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Adverse inference can be drawn against party who does not appear in person to depose: Supreme Court

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In a well-written, well-worded, well-reasoned, well-substantiated and well-analysed judgment titled Iqbal Basith and others vs N Subbalakshmi and others in Civil Appeal No. 1725 of 2020 delivered as recently as on December 14,2020, a three Judge Bench of the Apex Court headed by Justice RF Nariman and also comprising of Justice Navin Sinha and Justice Krishna Murari held clearly, categorically, cogently and convincingly that adverse inference can be drawn against party who does not appear in person to depose. The Bench while allowing appeal against the concurrent findings by the Trial Court and the High Court dismissing a suit filed by plaintiff seeking the relief for permanent injunction. In appeal, the Court noted that the original defendant did not appear in person to depose and be cross-examined in the suit and instead his younger brother deposed on the basis of a power of attorney. So ostensibly the Bench had no hesitation to arrive at the logical, learned and laudable conclusion that, “No explanation was furnished why the original defendant did not appear in person to depose. We find no reason not to draw an adverse inference against defendant in the circumstances.”

To start with, the ball is set rolling in para 1 of this notable judgment wherein it is stated that, “The plaintiffs are in appeal against the concurrent findings by two courts, rejecting their plaint seeking the relief for permanent injunction. The suit was initially dismissed. R.F.A. No.116/1990 preferred by the appellants was allowed by the High Court. The order was set aside by this court in C.A. No. 2072/2000 on 22.07.2004 and the matter was remanded to the High Court.”

To put things in perspective, the Bench then enunciates in para 2 that, “Mr. Basava Prabhu S. Patil, learned senior counsel appearing on behalf of the appellants, submits that the respondents had no concern with the suit property no. 44/6, ad measuring 90 ft. x 110 ft. situated on the J.C. Road in Bangalore. The respondents were the owner of property bearing no. 42, at a distance of 103 ft., with intervening properties also. The respondents illegally attempted to encroach on the appellants property on 10.02.1974 by dumping bamboo and other construction materials, compelling the appellants to institute the present suit. Shri Patil relied upon the reports of the Pleader Commissioner appointed by the Trial Court, and again by the High Court, to submit that the appellants were found to be in possession of the property coupled with the entries in the property tax register and the municipal tax receipts in name of the appellants. The respondents did not claim any title in themselves to the suit property, but feebly sought to question the appellants title in a vague manner. O.S. No. 3334/1984 filed by the respondents was allowed to be dismissed in default. The suit filed by the appellants was only for grant of permanent injunction. No suit with regard to title was therefore framed. The lawful possession of the appellants stood established from Ex.D-1 dated 07.09.1946, filed by the respondents, vesting title in their vendor, O.A. Majid Khan by the Bangalore City Municipality (hereinafter referred to as “the Municipality”) under Section 41(2) of the Mysore City Municipalities Act, 1933 (hereinafter referred to as ‘the Act’) over an area of 75ft. x 110ft., and the subsequent sale deed dated 27.09.1962 by the Municipality in favour of the appellants mother for the remaining area of 15 ft. x 110 ft.”

Without mincing any words, the Bench then goes on to put forth in para 3 that, “Both the Courts held that the respondents had no concern with the suit property, yet ventured to decide that the appellants had failed to establish title and dismissed the suit. The conclusion of the High Court that the identity of the suit property had not been established is perverse and contrary to the evidence on record.”

While elaborating on the facts of the case, the Bench then puts forth in para 7 that, “The suit property bearing no. 44/6 in J.C. Road, Bangalore measures totally 90 ft. x 110 ft. The property originally belonged to the municipality, identified as site no. 10 and 17 J.C. Road, 6th Division, Bangalore. On 08.08.1945, the City Municipal Council resolved to sell 75 ft. x 110 ft. to one O.A. Majid Khan. Sanction for the sale was accorded by the Municipality on 07.09.1946, by Government Order No. L.33923/ML-55-46-6 under Section 41(2) of the Act. The respondents themselves filed a certified copy of the same in the suit, which was marked as Ex. D-1. The said O.A. Majid Khan, by letter no. A7.0.170/4647 dated 17.09.1946 was directed to deposit Rs. 17,361/- as consideration. The Municipal Engineer on 30.09.1946 was directed to hand over possession after deposit of the consideration amount. Possession was handed over to O.A. Majid Khan on 10.10.1946. On 16.04.1956, the Assistant Revenue Officer of the Municipality, informed that the property bearing no. 10 and 17 sold to O.A. Majid Khan had been renumbered as 44, J.C. Road, 25th division.”

While continuing in a similar vein, the Bench then points out in para 8 that, “Sufia Khatoon, the widow of O.A. Majid Khan, sold the property to the mother of the appellants Zahara Khatoon, original plaintiff no. 3, on 10.07.1956 by a registered sale deed. Two confirmatory sale deeds were also executed on 08.04.1958 and 21.08.1959 by the legal heirs of O.A. Majid Khan in favour of Zahara Khatoon after attaining majority. Subsequently on 27.09.1962 the remaining portion of the suit property admeasuring 15 ft. x 110 ft. was sold by the municipality to Zahara Khatoon by a registered sale deed. Zahara Khatoon thus became the owner of the suit area of 90 ft. x 110 ft. of property bearing no. 44/6. The mother of the appellants gifted the property to them in 1966. The necessary entries were made in the property tax register, and the tax receipts demonstrate the payment of tax by the appellants from 1964-65 up to the year 1969-70 and again from 1984-85, 1986-87.”

Significantly, the Bench then postulates in para 9 that, “The present suit was instituted by the appellants in 1974 seeking permanent injunction as the respondents attempted to encroach on their property. The suit schedule property was described as no. 44/6. The respondents in their written statement claimed ownership and possession of property no. 42, acknowledging that other properties lay in between. A feeble vague objection was raised, but not pursued, questioning the title of the appellants. The respondents raised no genuine objection to the validity or genuineness of the government documents and the registered sale deeds produced by the appellants in support of their lawful possession of the suit property. The original defendant no.1 did not appear in person to depose, and be cross-examined in the suit. His younger brother deposed on the basis of a power of attorney, acknowledging that the latter had separated from his elder brother. No explanation was furnished why the original defendant did not appear in person to depose. We find no reason not to draw an adverse inference against defendant no.1 in the circumstances. In Ishwar Bhai C. Patel vs. Harihar Behera, (1999) 3 SCC 457 this Court observed as follows:

“17…..Having not entered into the witness-box and having not presented himself for cross-examination, an adverse presumption has to be drawn against him on the basis of the principles contained in illustration (g) of Section 114 of the Evidence Act, 1872.””

More significantly, the Bench then waxes eloquent with consummate ease in para 14 that, “The appellants were seeking the relief of permanent injunction only. Their title to the suit property was not disputed by the respondents. The respondents acknowledged that they were in ownership and possession of plot no. 42, which had no concern with the suit property and was situated at a distance of 103 feet with other intervening properties. The two reports of the Pleader Commissioner also confirmed the possessory title of the appellants along with property tax registers and municipal tax receipts. The appellants had more than sufficiently established their lawful possession of the suit property.”

Most significantly, the Bench then after considering all the facts before it and the relevant case laws find it no difficult to hold in para 15 that, “The conclusion by the courts below that the appellants had failed to establish title and therefore could not be said to be in lawful possession is therefore held to be perverse and unsustainable. Similarly, the conclusion that the identity of the suit property was not established is also held to be perverse in view of letter dated 16.04.1956 from the municipality, referred to herein above. The contention of the respondents feebly seeking to question the title of the appellants was rejected holding that they had nothing to do with the schedule property and that their conduct was questionable. Yet the appellants were wrongly denied the relief of permanent injunction.

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In our considered opinion the Trial Court and the High Court both posed unto themselves the wrong question venturing to decide the title of the appellants, and arrived at an erroneous conclusion.”

Finally and as a corollary, the Bench then holds in para 16 that, “On basis of the aforesaid discussion, the materials and impugned orders dismissing the suit and the appeal are therefore not sustainable. We therefore set aside the orders of the Trial Court and the High Court dismissing the suit, and allowed the appeal.”

Before parting, it would be prudent to discuss para 12 which we have not discussed so far. It says that, “Both the courts then proceeded to consider the title of the appellants to decide lawful possession. The respondents had themselves produced a certified copy of Ex. D1 dated 07.09.1946. The appellants produced photocopies of all other resolutions, government orders and sale deed in favour of their vendor O.A. Majid Khan by the Municipality. The failure to produce the originals or certified copies of other documents was properly explained as being untraceable after the death of the brother of P.W.1 who looked after property matters. The attempt to procure certified copies from the municipality was also unsuccessful as they were informed that the original files were not traceable. The photocopies were marked as exhibits without objection. The respondents never questioned the genuineness of the same. Despite the aforesaid, and the fact that these documents were more than 30 years old, were produced from the proper custody of the appellants along with an explanation for non-production of the originals, they were rejected without any valid reason holding that there could be no presumption that documents executed by a public authority had been issued in proper exercise of statutory powers. This finding in our opinion is clearly perverse in view of Section 114(e) of the Indian Evidence Act, 1872, which provides that there shall be a presumption that all official acts have been regularly performed. The onus lies on the person who disputes the same to prove otherwise.”

All told, we can thus clearly infer that the three Judge Bench of the Apex Court have with strong and substantial reasons very rightly concluded that as the original defendant did not appear in person to depose so there is no reason not to draw an adverse inference against defendant in the circumstances! The Court also very rightly referred to judgment of Lakhi Baruah vs Padma Kanta Kalita (1996) 8 SCC 357 which dealt with the admissibility in evidence of thirty years old documents produced from proper custody! No denying!

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Legally Speaking

The raging Covid-19 pandemic: Environmental justice

Unlike popular notions and misconceptions, the Indian courts braved unimaginable odds to deliver speedy environmental justice during the pandemic when the entire country was battered with different Covid-19 waves. India’s ecological security has been superb with new priorities in the post-pandemic world. It has been rightly postulated by a scholar, ‘What is the use of a house if you haven’t got a tolerable planet to put it on?’

Sudhir Mishra Raghav Sethi and Simran Gupta

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The Prime Minister of India, in the 47th G7 summit held recently, clearly demarcated the national policy on climate change and gave the ‘One Earth, One Health’ mantra. The G7 summit is held annually among the group of seven wealthy nations that came together to discuss pressing climate issues; this year’s highlight being the ongoing battle with the global pandemic, while also deliberating on critical climate challenges. The UK, being the chair of the event, invited India too this time for G7 at Cornwall.

There is normally a growing criticism about India and China both not doing many international commitments and mandating carbon reductions. However, PM Modi clarified and assured the international community that India is doing a lot on carbon reductions, electric mobility, saving on electricity, promoting non-conventional energy sources on a very comprehensive level.

The reason is India has already created a move for carbon related technology and exemplary promotion of electric vehicles. India has marked ahead of other countries on the use of non-conventional energies. The country is making an ambitious push towards electric mobility to reduce smog. In March 2021, 25,640 electric vehicles were sold across the country, of which 90% were two and three-wheelers. The total 400,000 EVs registered in India in 2019 accounted for less than 0.2% of all vehicles. Committing to Net Zero India looks at emissions overall, allowing for the removal of any unavoidable emissions, such as those from aviation or manufacturing. Removing greenhouse gases could be via nature, as trees take carbon dioxide from the atmosphere, or through new technology or changing industrial processes.

While India was already crippling with many important environment issues, the COVID-19 pandemic came as a major jolt for the entire country. Where one could witness varied exotic species of animals on road in place of environment polluting vehicles, the courts judicial intervention did not cease to operate even during the harsh times of both waves of the COVID-19 pandemic of our nation.

Even though the COVID-19 pandemic shifted the focus from the environment to public health, the Indian judiciary has continued to play a significant role in addressing the environmental concerns that arose not only due to the pandemic but also the ones that have persisted since long and are somewhat man-made. The response of the PM in G7 was on behalf of a resilient resurgent India which has a renewed focus on its environmental and health commitments.

For example, it was evident that the Oxygen Bench of the Delhi High Court like many other High Courts of the country were persistent in administering with its judicial intervention catering emergency remedies for public health, the Supreme Court of India (“SC”) and even the Green Bench of the National Green Tribunal (“NGT”) were also steadfast in addressing the environmental concerns of the country at the same time.

It is imperative to analyse the steps taken by the judicial forums in the past year to understand the ways in which environmental concerns were addressed in the country and what lies ahead in preserving the essential elements of our ecological security.

Few examples of great judicial interventions in the past one year for the cause of environment:

For the purposes of protection of the Great Indian Bustard and the Lesser Florican which are both at the verge of extinction, a public interest writ bearing Writ Petition (Civil) No. 838 of 2019 in the case of M.K. Ranjitsinh v. UOI on 19.04.2021, the SC inter-alia stroke a balance between the protection of the endangered birds as well as the importance of efficient transmission of power. The Court had set up a committee to assess whether an underground powerline is feasible or not in difficult cases and further directed to install diverters pending consideration of the conversion of the overhead cables into underground powerlines in regions with an excess of these birds and to install underground power cables wherever feasible. 

For the purposes of construction of a Road Over Bridge (ROB), it was contended by the Government of West Bengal that there was a need to cut down trees which were more than 150 years old. It was claimed that these are “historical trees” which have irreplaceable value, due to the reason of their non-transferability and that they cannot be transplanted elsewhere. The SC of India on 25.03.2021 took a stern view in the case of Association for Protection of Democratic Rights v. State of West Bengal in Special Leave Petition (Civil) No. 25047 of 2018; and inter-alia constituted a Committee of Experts in order to develop a set of scientific and policy guidelines that shall govern decision making with respect to cutting of trees for such developmental projects.

The Apex Court on 09.12.2020, in the case of Titty v. Range Forest Officer, (2021) 1 SCC 812 inter-alia clarified on the question as to when an offence of capture or possession of wildlife species under the Wildlife (Protection) Act, 1972, can be said to be made out. The Apex Court held that the capture or possession of species belonging to the same genus or otherwise related The issue pertaining to solid waste management on railway stations was highlighted in the case of Saloni Singh & Anr. v. Union of India & Ors., Original Application No. 141/2014; wherein the Principal Bench of NGT, also known as the ‘Green Bench’, on 18.08.2020 inter-alia looked into the matter of non-compliance with the Plastics Waste and Solid Waste Management Rules, as well as the prevention of effluent discharge, water management at railway stations, compartments, and tracks, and the elimination of encroachments that degrade the environment. It specifically instructed the CPCB to consider the process of implementing Railway Action Plans for all-important stations to species specified in the Schedules to the Wildlife Act is not sufficient to constitute an offence under the Wildlife Act. To constitute an offence under the Wildlife Act, it is necessary that the animal in possession or captivity must be the exact genus and species as specified in the Schedules to the Wildlife Act.

The issue pertaining to solid waste management on railway stations was highlighted in the case of Saloni Singh & Anr. v. Union of India & Ors., Original Application No. 141/2014; wherein the Principal Bench of NGT, also known as the ‘Green Bench’, on 18.08.2020 inter-alia looked into the matter of non-compliance with the Plastics Waste and Solid Waste Management Rules, as well as the prevention of effluent discharge, water management at railway stations, compartments, and tracks, and the elimination of encroachments that degrade the environment. It specifically instructed the CPCB to consider the process of implementing Railway Action Plans for all-important stations.

In the case of Shailesh Singh v. Hotel Holiday Regency, Moradabad & Ors., Original Application No. 176/ 2015; the NGT addressed the concern of illegal extraction and contamination of groundwater on 20.07.2020, especially, in regions designated by the Central Ground Water Authority (CGWA) as overexploited, critically exploited, or semi-critically exploited. The Tribunal formed an Expert Committee to look into the procedures that need to be taken to prevent groundwater depletion and to ensure that groundwater is not removed in an unauthorized and exploitative manner. The Tribunal ordered the Ministry of Jal Shakti and the State Government to ensure that the CGWA has the necessary manpower and is operating efficiently in order to ensure long-term groundwater management.

An environmental issue arising out of household use of RO released water was also brought to the fore in the case of Friends through its General Secretary v. Ministry of Water Resources, Original Application. No. 314/2015. The Tribunal aimed to place onus of being responsible on both the government and its citizens including the industrialists. The NGT on 13.07.2020 inter-alia addressed the issue of potable water conservation by preventing waste due to the improper usage of reverse osmosis by RO equipment. It directed the MoEFCC to produce an appropriate notification which must include a mechanism for raising public awareness about the negative effects of RO released water, as well as effective enforcement, such as requiring concerned local bodies to display water quality at regular intervals. ‘Extended Producer Responsibility’ was also imposed on manufacturers for the disposal of cartridges and membranes, requiring them to provide correct labelling on the purifier.

The NGT in the case of Rajiv Narayan & Anr. v. Union of India & Ors., Original Application no. 804/2017, on 01.07.2020 inter-alia dealt with the issue of Hazardous Waste Management. The Tribunal ordered various governmental and administrative bodies to follow the Expert Committees recommendations, which was established in one of its earlier rulings in the case. The Tribunal also directed to make sure that the hazardous waste inventory was updated and double- checked to ensure that it was accurate. In furtherance to this order, the Green Bench had passed a detailed order in the present case on 29.01.2021 by placing its reliance on the judgment passed by the SC in Research Foundation for Science Technology and Natural Resources Policy vs. Union of India (UOI) and Ors., (2005) 10 SCC 510, which inter-alia dealt with the same issue of the alarming situation created by generation and unscientific dumping of hazardous waste resulting in serious and irreversible damage to the environment and public health.

In Re: Scientific Disposal of Bio-Medical Waste arising out of COVID–19 treatment, the NGT on 23.04.2020 addressed the threat posed by COVID–19 waste disposal, and showed its concerns regarding the same for not being dealt with in a scientific manner. It directed the Chief Secretaries of States/ UTs, to monitor the treatment of COVID-19 waste by coordinating with multiple state departments. Further, a National Level Task Force was created, with representatives from multiple ministries, to ensure that the waste treatment is being done in accordance with the rules. The Tribunal had managed to keep a check on the functioning of every state and district level machinery even during the times of Covid.

It was emphatically emphasised by the SC in one its ruling that if the EC was to be ultimately refused, irreparable harm would have already been caused to the environment. Thus, the SC on 01.04.2020, in the case of Alembic Pharmaceuticals Ltd. v. Rohit Prajapati & Ors., 2020 (5) SCJ 531, upheld the principles of environmental protection and held that an ex post facto environmental clearance or EC is adversative to key doctrines of environmental law such as the ‘Precautionary Principle’ and ‘Sustainable Development’. Emphasising on the relevance of such doctrines, it was observed that the power given to the Government by Section 3(1) of the Environment Protection Act 1986 to undertake measures it deems necessary or expedient must necessarily be only “for the purpose of protecting and improving the quality of the environment and preventing, controlling and abating environmental pollution.” EC necessitates cautious application of the mind and a comprehensive study into the consequences to be suffered by the environment.

The SC made some positive measures in the case of M.C. Mehta (Stubble Burning & Air Quality) v. UOI, (2020) 7 SCC 530, concerning intense air pollution due to stubble burning in the Delhi-NCR region. The Court on 13.01.2020 noted that not being able to breathe good quality air is an affront to the right to life guaranteed by Article 21 of the Indian Constitution, 1950. It noted that the inadequacy of the state machinery to check air pollution, and inability to sufficiently lift garbage and waste has also majorly contributed to the pollution. It directed the Governments of NCT of Delhi-NCR, Haryana and UP to prepare a scheme to alleviate the need for stubble burning amongst small farmers, and if need be, to provide the necessary farming equipment to them free of cost or on a nominal rental basis. It also directed inter alia that smog towers and anti-smog guns be installed in the Delhi-NCR region and the same shall be updated by filing relevant status reports.

A noteworthy case titled “Sudhir Mishra vs. Ministry of Health and Family Welfare & Ors. in W.P. (C) 2115 of 2015” which has been filed by the Author, being an environmental activist and lawyer is being relentlessly litigated since 2015. During the peak of the first wave of the COVID-19 pandemic, the High Court of Delhi had taken cognizance on the same issue of stubble burning by farmers around Delhi-NCR region and had passed appropriate directions in the said case.  

While the Oxygen Bench was busy in procuring oxygen for its citizens, the Green Bench was busy in saving the environment through which we get the oxygen. India is a country endowed with rich environmental diversity and ecological resources. Even at the international level, India has led the efforts to develop the framework of international environmental law since the earlier times. In various judgments over the course of the last year, India has upheld principles of sustainable development balanced with the needs of a developing country’s economy.

Unlike common notions and misconceptions of varied nature, the Indian courts braved unimaginable odds to deliver speedy environmental justice during the pandemic when the entire country was battered with different covid waves. India’s ecological security has been superb with new priorities in post pandemic world. Trees, water, and disposal of plastics is a major priority for the Modi government and with pain of pandemic’s second wave easing the environmental safeguards will be on top of our national agenda all over again. We can always take pride that as a nation our forest cover has increased many folds since Independence. We have saved our flora and fauna. Our tigers and elephants remain highly protected and the remaining challenges of river pollution, plastics, and increased plantation will be the remaining priorities. It has been rightly postulated by a scholar, “What is the use of a house if you haven’t got a tolerable planet to put it on?” 

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IBC and the development of credit market in India

Financial instruments are in-principle designed to mitigate the risks pertaining to repayment of debt. By mitigating such risks, the regime aims to furnish more assurance among the investors and expanding resources for the beneficiary of borrowers.

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Economic development of a country is channelized by reforms brought in the legal and financial sector. Time and again deliberate reforms are brought in the country with an aim to bring higher economic growth in the country. Major factor contributing to the growth of India’s Index of Economic Freedom since 1990s is attributed to the supportive governmental policies and institution. These policy decisions range from lowering key policy rates, increasing, or decreasing the rate of interests on different types of loans and cash transfers and, various types of fiscal stimulus measures. Annual Financial Statement, 2021-22 considered persistent problems of the banking and financial sector. For instilling confidence in Corporate Bond Market in India and improve secondary market liquidity, an announcement was made regarding the creation of a permanent institutional framework to invest in investment-grade securities.

There is a strong causal relationship between the development of credit market and economic growth. An established credit market effectively relocates the resources aiming higher economic growth and fuels the growth of credit market. Time bound successful resolution of the stressed assets will reinstate the trust of investor, which is paramount in credit market. The present article seeks to discuss the nexus between IBC and development of Credit Market. The article will also draw a comparative analysis between the Pre-IBC and IBC Regime and how the latter has been better fostering the credit market in the Country.

Historically, the laws relating to corporate insolvency and creditor protection proved to be a significant obstacle to the growth of the credit markets in India. The Sick Industrial Companies (Special Provisions) Act, 1985 (‘SICA’), enacted to rescue sick companies, turned out to be inefficient due to delays and other systemic problems leading to its failure. Several committees appointed by the government critiqued and sought to introduce new legislation. The Bankruptcy Law Reform Committee, which issued its report in 2015, that resulted in a concrete change in the form of the Insolvency and Bankruptcy Code, 2016 (the ‘Code’).

The Code signifies a paradigm shift in Indian corporate insolvency law. It involves an approach where creditors lead a time-bound process that is intended to revive and rehabilitate companies and stands in stark contrast to the experience with SICA where most companies were wound up. By taking the process of corporate resolution out of the hands of the company’s board and management, the Code seeks to avoid problems of moral hazard. In terms of the institutional set up, the Code assigns the oversight responsibility to the NCLT (and the NCLAT).

IBC AND CREDIT MARKET

Credit Culture provides a unique blend that keeps the credit method united and forms the crucial foundation of Credit discipline. A county’s credit culture wields a strong influence on the bank’s lending and credit risk management system. Credit culture of a bank is defined by the policies set out by the bank which influences practices and management attitude of the bank. The impugned polices further categorically set out the lending environment and determines the lending behaviour of the bank. The ultimate goal of credit culture is to build a risk management system that in a way foster a good banking system and build right foundation for fostering the economy as well. Considering the complex and extensive banking regime, credit culture plays an indispensable role in the lending institution. IBC fosters an environment where credits can be generated from the domestic market and investments can be drawn from the international market.

Enactment of the Code aimed at enforcing discipline in the country’s credit culture. There is a well planted notion in the defaulter’s mind that in case there is a financial default, Corporate debtor will not be provided with an “automatic-rescue package”. There is a notion of security in the mind of creditors that in case of a default in payment, the dispute does not ends by dragging the debtors to court for the repayment of loan and get struck in the shackles of litigation with unimaginable set of issues. The Resolution proceedings in IBC were designed by bypassing the cumbersome, inefficient, subjective and debtor-friendly model. IBC has ushered a simple and creditor friendly model which has certainty and ensures value maximization of the assets for the benefit of stakeholders in Time bound manner. The present framework ensures that the lenders are paid on time, imbibing a credit culture in the mind of investors. This in turn is a contributing factor in the rise of India’s ranking in Ease of Doing Business Index from lowly 42 in 2014 to 63 in 2019. Thus, making India a favourable destination for Foreign Investment. IBC makes efforts to bring best out of a situation of a financial default with a creditor friendly approach.

INCLUSION OF PERSONAL GUARANTORS AND CORPORATE GUARANTORS

Jurisprudence of any legislation evolves over a period of time and IBC was no exception. Since the inception of the code, it has been exposed to prolific legislative and judicial reforms. The latest and perhaps the most significant development was driven by the Notification dated 15th November 2019, wherein the Central Government enacted part III of the Insolvency and Bankruptcy Code. Thus, bringing Personal Guarantors to Corporate Debtors, Insolvency and Bankruptcy proceedings of Individuals within the sweep of IBC. The notification explicitly mentions that the provisions of part-III of the Code have been enforced as far as they are applicable to the Guarantors. The validity of this notification was upheld by the apex court in the case of Lalit Kumar Jain v. Union of India.

Financial instruments are in-principle designed to mitigate the risks pertaining to repayment of debt. By mitigating such risks, the regime aims to furnish more assurance among the investors and expanding resources for the beneficiary of borrowers. The customary practices involved in such credit enhancement scheme is by providing sureties against the risk to qualifying borrowers. This not only schematize introduction of large-scale lending operations but also introduces new borrowers to the market. Further ensuring a steady flow of liquidity in the market.

As a pre-requisite for banks to provide loans it requires guarantees to be given by the Guarantors. Historically, India is the economy where a large part of Companies (listed/unlisted) are run by the Owners/Promoters. Generally, Banks ensure the guarantee of the Promoters to ensure their skin in the game. In absence of any efficacious forum to enforce personal guarantees which comes like a shadow with insolvency of the corporate debtor for which the guarantee has been given. It was a prolific step to enable rehabilitation and bankruptcy proceedings against personal guarantors. This will allow the creditors to run recovery proceedings against creditors and guarantors simultaneously before the same Adjudicating Authority of the NCLT having territorial jurisdiction.

IBC: SATISFACTORY EXIT ROUTE FOR BUSINESS

Any entity in the market requires freedom at three instances namely, a hassle-free entry, free competition ensuring a level playing field for all the players, and a smooth exit. Entities must have freedom to indulge in the business till they remain resourceful. On accounting several losses, they can vacate the field for newer and more efficient entities. Thus, ensuring the proper allocation and redirection of resources. For proper allocation of resources, it is crucial for a mechanism to exist wherein the defunct firms can leave the space and relocate the idle resources in orderly manner for newer players. At the same time, India being an Economy supporting Start-ups it brings a sense of security within the newly established entities that their withdrawal from the business will not leave them with tons of obligations taking a lifetime to repay. Such a mechanism is envisaged in the form of Insolvency and Bankruptcy Code, 2016. The pre-IBC regime neither had an efficient rescue mechanism nor a satisfactory exit route for business.

CREDITOR-FRIENDLY NATURE

The present insolvency framework has experienced a move from a “Debtor-in-possession” model to “Creditor in Control” model. At the time of admission of insolvency petition, juncture at which the control and management of the defaulting company is transferred to the Committee of Creditors depicts the model of “Creditor in Control”.

Supreme Court in the case of Innovative Industries Ltd. v. ICICI Bank rejected a challenge to the insolvency proceedings mounted by the corporate debtor (Innovative Industries Ltd) and ruled in favour of the Financial Creditor (ICICI Bank), emphasizing the creditor friendly nature of the Code. By rejecting the time barred claim of the debtor, Court not only endorsed the creditor centric approach of the court, but also the time bound structure of the Code. The slant of the court ruling clearly demonstrates the need for a stringent corporate insolvency framework in India, which was answered by enactment of the Code.

The BLRC Report recognized that it is not a company’s ‘divine right’ to control the affairs of the firm. In case of any default in payment of debt, the control of the company must shift from the debtor to creditors. The erstwhile Code promoted a debtor-friendly regime, allowing defaulting debtors to secure a moratorium order and force write-downs on debt repayment. At the same time keeping the management of the defaulting company in the hands of the debtor, frustrating the efforts of the creditors including banks to realize their payment of dues by indulging in serial litigation.

Before the enactment of the Code, the non-adjudicatory forms of dispute resolution suffered high rates of failure. Which in turn resulted into continuing defaults committed by the borrowing entities. The management of the company continued to stay in the hands of the defaulting debtors which in turn became another reason for defaulters to continue to thwart the system. The Code was enacted focusing on finding a resolution and recognition of distressed financial assets which would otherwise face liquidation. This behavioural change has instilled a significantly increased sense of fiscal and credit discipline to better preserve economic value.

INCLUSION OF BANKS

IBC regime brings within its sweep not only guarantors and promoters but also keep a check on the Banks. It acts as an instrument which drives bank to refer specific cases of default against large borrowers for resolution.

With the legislation coming into force, an immediate step was taken by the government for the execution of the same. Subsequently, the Banking Regulation (Amendment) Ordinance, 2017 was promulgated, now passed by Parliament, which introduced new clauses into the Banking Regulation Act, 1949 permitting the RBI to initiate action requiring banks to launch proceedings to resolve bad assets with specifically identified clients. In an attempt to resolve the crisis due to the ballooning Non-Performing Assets of Indian Banks, the Reserve Bank of India directed the concerned banks to initiate insolvency proceedings against such NPAs under the Code. The 12 selected stressed companies constituting 25% of the total NPAs, effectively constituted the test cases for implementation of the Code.

Thereinafter, creditors and on several other occasions corporate debtors had initiated proceedings for the resolution of the corporate debts though the procedure envisaged under the Code. Unpaid loans are only the tip of the iceberg of an ailing banking sector which pose a risk to the nation’s economic growth. The Code was effectively considered a panacea for the NPA problem that had distressed India’s banking sector.

Statistically, the economic survey report, 2020-2021 has reiterated the same view. Data reported by Reserve Bank of India has indicated a hike of 45.4% in the recovery of percentage of claims for scheduled commercial banks through IBC for the financial year 2019-20. This recovery number is the highest as compared to recovery through any other means and under any other legislations. The report further mentions the amount recovered by the scheduled commercial banks in IBC regime was 1.73 Lakh Crore. The amount being more than all the amounts recovered by all the other possible alternative mechanism available for the year 2019-20.

It is noteworthy to mention that inclusion of the Non-Banking Finance Institution is credit positive for India’s banks that are NBFI’s largest lenders. Until the enforcement of the IBC Regime, the only resolution framework for NBFIs was through liquidation.

ADJUDICATION VERSUS RESOLUTION

Within the IBC Regime, both creditors and debtors are empowered to initiate insolvency proceedings. The characteristic attribute of IBC lies to confirm the commercial feasibility of insolvency resolution. The Code also demarcates the commercial aspect from the judicial aspect. In turn it narrows down the role of adjudicating authority to facilitate the process envisaged under the Code rather than adjudicating on merits of the resolution.

The significant changes brought by the Code in the equation of Creditors and Debtors has redefined the fashion in which the credit market functions. The fear of the slipping away of control and management of the firm from the existing promoters and Corporate Debtor to the Committee of Creditors acts as a deterrence in the minds of the corporate debtor. This inevitable consequence of an Insolvency proceedings acts as deterrence mechanism and refrain the firm from operating below the optimum level of efficiency. Additionally, in case of defaults, it encourages the corporate debtor(s) to settle the dispute expeditiously with the creditor at the earliest, preferably outside the court.

There has been catena of instances wherein the corporate debtors have resolved their dispute and repaid the debts immediately on the filing of the application before the concerned National Company Law Tribunal and sometimes even before the application is admitted for further proceedings.

Regarding the withdrawal of application, statistically since the inception of the Code 18,892 applications have been filed before the concerned NCLT. As many as 14,884 cases involving defaults of 5.15 lakh crore were withdrawn by September 2020 before these applications were admitted by the Adjudicating Authority and 897 processes were closed mid-way by December 2020. These statistics were reported by the Economic Survey Report, 2020-2021. It indicates that almost 83% of the cases of financial default by the Corporate Debtor are resolved even before the lis enters the very first stage of CIRP. This accounts for the behavioural shift among the defaulting parties. It is been four years since the inception of the Code, only 7% of the defaults have undergone the entire procedure envisaged under the Code resulting into Liquidation or Resolution.

In account of these statistics a likely option in future for resolving stressed assets is a pre-packaged insolvency resolution process. A proposal regarding the same is floated by the Ministry of Corporate Affairs for the public views. The proposed regime enables the stressed companies to enter into negotiation of restructuring plans with creditors prior to the formal institution of insolvency proceedings. ‘Pre-Packs’ are existing mechanism in U.S. and U.K. jurisdiction ad recently notified in India. Such negotiations result in completion of resolution process quickly and discreetly. Enforcement of a statutory pre-pack regime will go a long way in resolution of stressed assets of the creditors.

WATERFALL MECHANISM WITHIN THE CODE

The conundrum of distribution prescribed within the Code follows a waterfall mechanism which essentially delineates the order in which the liquidation proceeds will be distributed within the different categories of shareholders. As per the principles for effective insolvency and Creditor/Debtor regime by World Bank, Insolvency regime of a country must provide for an equitable treatment of similarly situated creditors.

In a pool of creditors, secured creditors are given the preference in resolving their dues. Secured Credit is an essential part of the credit system, it drives economy and encourage entrepreneurship. Preferring Secured Creditor’s right and their claims and taxation dues promotes secured lending. IBC regime protects the Secured Creditor’s right in liquidation by permitting it to enforce its security (Security against which the credit is extended) by staying out in the liquidation process. Vide section 52 of the Code, the Secured Creditor need not to give up its security to the liquidation estate and can reinforce the same on its own for the realization of its dues. For realization of the credit owed to the Secured Creditors, they have two options provided upon the commencement of the liquidation proceedings. Firstly, either to relinquish the security interest and receive their share after the sale of the assets. Secondly, to stay outside the liquidation proceedings, and to recover the due credit by the exercising the right owed to the Secured Creditor in section 52 of the Code.

CONCLUSION

Taking an insight in the credit industry, India’s insolvency regime continues to achieve and surpass its objectives, assist in strengthening India’s credit environment, and further entrepreneurship in the country.

The Pre-IBC regime discouraged the lenders from lending their assets due to the inefficient resolution system. The lenders were also unsure of their recovery of debt which in a way reduced finance availability. There was a need of legislation which stops the practice of not-paying back the loan and getting away without penalty.

In the case of Binani cement, the NCLAT observed “Resolution of stressed assets” to be the first and foremost objective of the Code. The second being the “Maximization of the value of the assets of the Corporate Debtor”. The third objective being “promoting entrepreneurship, availability of credit and balancing interests”. This order of objective is sacrosanct. The code was enacted to foster the credit regime of the country.

The factors such as, passing the management of the debtor company in the hands of the company has always fostered the credit culture in the country. The Economic Survey Report, 2020-2021 has reiterated these factors as indispensable for bringing confidence within the investors.

IBC envisages certain provisions which ensures protection of the creditors, but not at the cost of causing damage to the debtors. In addition to the creditor centric approach of the Code, it can also be seen to protect debtors against the wilful frivolous petition brought by the Creditors just for the sake of pushing the debtor company in insolvency proceedings. Suspension of IBC for the stipulated duration once in a century crisis is one such move. Additionally, in the light of recently promulgated IBC Amendment Ordinance which came in force on 28th December, 2019 a corporate insolvency resolution plan (CIRP) application can only be filed jointly by 100 allottees under the same real estate project or 10 per cent of the total number of allottees under the same real estate project, whichever is less. The said move was brought in to ensure that creditors or stakeholders who have inordinate leverage over the real estate companies by being at par with the financial Creditors do not abuse the IBC Provisions. The code seeks to strike a balance between the creditors and debtors to foster the credit market in the Country.

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ENFORCEMENT OF ARBITRAL AWARDS AND THE INTRICACIES INVOLVED

Mohd Arham

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INTRODUCTION

The expansion of global trade and commerce in the contemporary era has necessitated the conception of efficient and effective methods of resolution of disputes securing party autonomy at the same time. In some situations, securing an arbitral award or a final judgment from the courts may only be an encounter half won; this is especially true in the Indian context the latest example of the same being the Vodafone arbitration case decided by the permanent court of arbitration, Netherlands recently, as the solicitor general of India Mr. Tushar Mehta advised the government to challenge the arbitral award in a court of law and the government did the same, also a similar scene is created in the dispute between Cairn energy and indian government against the arbital award in favour of Cairn energy by the Permanent Court of arbitration.

We have seen situations where the opposite parties decide to not participate in the arbitral process or abandon it mid-way. The enforcement of these awards where the party is absent is sometimes more complicated than one where the opposite party has participated in the proceedings. In some situations, objections have been made even against costs awarded by the arbitral tribunal or the authority of the tribunal or court, as the case may be. Consequently, the stage of enforcement of an award or decree warrants a high degree of caution.

The modus operandi for enforcement and execution of decrees especially in India is governed by the Code of Civil Procedure, 1908 (“CPC”) on the other hand, that of arbitral awards in India is mainly governed by the Arbitration & Conciliation Act, 1996 (“Act”) as well as the CPC.

The successful party in international commercial arbitration to be honest expects the award to be performed without delay as much time taken in the resolution of dispute is a major reason to opt for arbitration instead of litigation. This is a legit expectation. The idea of arbitration, unlike mediation and most other methods of alternative dispute resolution (ADR), is to arrive at a binding decision on the dispute. Once this decision cross-border in the form of an arbitral award, it is an inherent part of every arbitration agreement that the parties will carry out. To put the spot away from confusion, this is expressly set out in cross-border and institutional rules of arbitration. For instance, the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL) said that the arbitral award ‘shall be ultimate and obligatory on the parties, and that ‘the parties take on to bring out the arbitral award without any further delay’.

Such figures as are accessible propose that most arbitral awards are carried out willingly—that is, without the need for enforcement measures in national courts of any country. Nonetheless, broad and reliable statistics about international and domestic arbitration are not readily available for two main reasons: first because arbitration is a private dispute resolution process; and secondly, in any event, there is no particular reason why an arbitral tribunal (or indeed an arbitral institution) should know whether or not an award has been carried out. Unlike a national court of law, an arbitral tribunal majorly has no role to play in the enforcement of its award/decision. Once the award has been rendered to the tribunal, the arbitral tribunal usually has nothing more to do with the dispute, except it, is necessary to make an additional award or to correct or interpret its award for a particular reasonable reason. After making a final arbitral award the work of the arbitral tribunal is formally finished, also is known as functus officio.

When it comes to the Indian context Domestic and foreign awards are enforced in the same manner as a decree of the Indian court. This is true even for consent awards obtained according to a settlement between parties negotiation and mediation you may say. Nonetheless, there is a disparity in the course for enforcement of an arbitral award based on the seat of arbitration. While the enforcement and execution of an award of which the seat is India called (“domestic award”) would be regulated by the provisions of Part I of the act, in international commercial arbitration arbitral awards called (“foreign award”) would be governed by the provisions of Part II of the arbitration and conciliation Act, 1996.

DIFFERENCE BETWEEN RECOGNITION AND ENFORCEMENT OF ARBITRAL AWARDS

Though there are some minute conceptual differences between recognition of an award and enforcement of an award though not feasible/significant to deal with in length although it’s pertinent to note that recognition of an award is a prerequisite of the enforcement of awards or vice versa used jointly as mentioned in the New York convention on arbitration any potential problem faced in recognition of award similarly comes as a hurdle at the time of enforcement of the arbitral award. The precise distinction, an award may be recognized without being enforced. Though, if it is enforced, then it is essentially acknowledged by the court of law that ultimately orders its enforcement like the Delhi high court granted interim relief to Amazon in the case of reliance v Amazon after acknowledging or recognition of emergency arbitral award delivered by the Singapore international arbitration centre (SIAC). In other words, is between ‘recognition’ and ‘recognition and enforcement’ Enforcement goes a step further than recognition to be more precise.

ENFORCEMENT OF FOREIGN ARBITRAL AWARD UNDER THE NEW YORK CONVENTION

(a) Introduction

The New York Convention replaces the 1927 Geneva Convention as stuck between states that are Parties to both Conventions, and is a considerable development, as it provides for a Simpler and more efficient method of having recognition and enforcement of foreign awards. The conference also replaces the previous 1923 Geneva Protocol as between states that are bound by both, and again constitutes a substantial improvement, because it gives a much wider scope to the validity of arbitration agreements than that given under the earlier convention. Hence, the New York Convention has been rightly eulogized as ‘the single most important pillar on which the edifice of international arbitration rests’ , and as a convention that ‘possibly could lay claim to being the most effectual instance of international Legislation in the entire gamete of commercial law history’. It is for this reason that, for now, many remain unwilling to put up with the possible disturbance that would go with the upgrading of the Convention’s existing text shows the importance of convention globally.

(b) Enforcing foreign awards

Even though the title of the New York Convention provides only for the recognition and Enforcement of ‘foreign arbitral awards, the Convention also deals with the recognition and enforcement of arbitration agreements. In its opening text, the Convention adopts a stunningly global approach: This Convention shall have an effect on the recognition and enforcement of arbitral awards made in the country slightly than the condition where the acknowledgment and enforcement of arbitral awards are requisite, and any kind of differences arising out of dispute whether physically or importantly legally is a thing to watch out for. It shall also apply to arbitral awards not considered domestic awards in the State Where their acknowledgment and enforcement of award are sought.

If this opening Article were to stand without qualification, it would mean that an award Made in any state (even non-signatory to New York Convention) would be Recognized and enforced by any other state that was a party, as long as the award fulfilled the basic circumstances set down in the Convention especially the public policy of a concerning jurisdiction or the due process of law is not followed while writing an award in matters of international as well as domestic arbitration.

(c)Recognition and enforcement under the New York Convention

The new York convention paves way for both recognition and enforcement of awards in the country where convention applies, same scenario with recognition, a state bound by the Convention undertakes to respect the obligatory effect of awards to whom the Convention Applies; so, as has been seen, such awards may be relied upon by way of a solid defense in legal proceedings. Also concerning enforcement, a state that is a party to the Convention undertakes to enforce awards to which the Convention applies following its local procedural rules and regulations. It also undertakes not to impose substantially more difficult conditions, or higher amount or charges, for such enforcement than are obligatory in the enforcement of its domestic awards for fair and equitable treatment of the parties as provided in the Havana convention especially when it comes to/ for investment/interstate arbitration, all collectively work efficiently.

Also when it comes to India there is a big problem underlying when it comes to the enforcement of a foreign award in India though it is a two-stage procedure that is started by filing an execution petition. To begin with, a court would fix whether the award adhered to the requirements of the Act. An arbitral award may be enforced like a decree of a civil court if it is enforceable although the parties and their counsels at this stage needs to be careful concerning various tactics such as objections taken by the opposite party like no attempt is made for pre-arbitration negotiation between the parties, notices before commencement not served, etc, along with requirements like filing original/ authenticated copy of the award and the underlying Arbitration agreement before the court for successfully enforcing the arbitral award in INDIA.

(d) Formalities

The rules and regulations required for having recognition and enforcement of arbitral awards to which The New York Convention applies are easy. The party looking for such recognition and Enforcement is only required to bring the following documents to the relevant court:

(a) The duly signed authentic original award or a duly qualified copy thereof; [and]

(b) The original agreement where arbitration clause was mentioned in article II, or a duly certified copy thereof.

Despite these necessities of Article IV of the New York Convention, courts of law in several Jurisdictions have enforced awards in the absence of an original doc of the arbitration Agreement, or certainly with not any written arbitration clause at all. For example, the Supreme Court of Spain enforced an award of the China International Economic and Trade Arbitration Centre (CIETAC) even though surprisingly it did not identify the parties thereto, Reasoning that the respondent fully participated in the arbitration, therefore proving its Intention to present its dispute with the claimant to arbitration. If the arbitral award and the arbitration agreement are not in the official language of the country in which recognition and enforcement are required, certified translations are required. Once the essential documents have been supplied, the court will grant recognition and enforcement unless one or more of the grounds for denial, listed in the Convention, is Present.

LANDMARK JUDICIAL PRONOUNCEMENTS PERTAINING TO ENFORCEMENT OF ARBITRAL AWARDS & INTRICACIES INVOLVED

In the latest case, the supreme court of India in national agriculture cooperative marketing federation of India v. aliment S.A held that a foreign arbitral award is not enforceable, on the basis that the deal contemplated would have dishonored OR violated the Indian laws and was opposing to the public policy of India which itself an in-depth ground for refusal of an award.

In oil and natural gas corporation v. saw pipes ltd, the supreme court of India while looking at a domestic arbitration award the Hon’ble court held that the domestic arbitral award could be rejected on the ground that the arbitral tribunal violated the Indian law and SC also said that it added patent illegality shape to Renu Sagar case formula.

The SC of India in the landmark case of SBP CO. V. Patel engineering held that the power of appointment is strictly to be a judicial power and the same could not be exercised by the nonjudicial authority or any interested party univocally to prevent biases of arbitral tribunals that’s why court restricted to delegate this authority only to a supreme court or a high court judge, not at the district court level, the court remarked.

In the recent landmark case, Perkins Eastman architects DPC & ANR. V. HSCC {India} the supreme court resolved many queries especially related to impartiality and independence of the arbitrator appointment also said that the court has the power to intervene under S.11 unless the appointment is prima facie valid and the court agreed by the same doesn’t want an overhaul on its power conferred, this will surely affect the government contracts where the arbitration clause are mostly one sided.

Also it was held by the supreme court in the past few recent years that a foreign arbitral award is not liable to be stamped it won’t affect the enforceability of an award .

In the past the Hon’ble Delhi high court in Naval Gent Maritime Ltd v Shivnath Rai Harnarain ltd had held that foreign award would not require registration and can be enforced as a decree of a court of law in India and it won’t be considered as a prerequisite for its enforceability anyhow. Similarly, the Hon’ble Bombay high court observed the same approach at this viewpoint only in the case of Vitol S.A v. Bhatia International Limited.

Also, it’s noteworthy how the seat & venue debate faced a deepening crisis irrespective of the judgment of the supreme court where it settles down some important question of law revolving around the same issue as an international London seated arbitration governed by the English law challenged in Chhattisgarh high court under sec.34 of the arbitration and conciliation act, 1996 further comes into the arena of the supreme court where the supreme court upheld the judgment of the high court and reject the challenge to award in favor of the respondent and it’s indeed a very important and significant judgment after the Bhatia case.

Adding ambiguities or resolve the complexities of this saga is bring it up on a table by the hon’ble supreme court of India in 2019, BGS SGS Soma JV V. NHPC LTD. That the venue of arbitration mentioned in the t arbitration agreement or clause in the contract between the parties is the seat of arbitral proceedings and sort of willfully overrule the case of union of India v. hardy exploration and production [India] inc. where the crisis of seat/ venue debate decided upon the conduct and determination of parties thereof.

In the much-debated case of Amazon.com NV investment holdings LLC V. future coupons (p) Ltd there is a huge dilemma regarding the status of emergency arbitration in India and the interim injunction as prayed by the future group against the emergency arbitration award from Singapore international arbitration center in favor of Amazon against the deal of reliance and future retail group in December 2020 although, on March 18, 2021, the single-judge bench of justice J.R.Midha J. of Delhi high court acknowledged the status of emergency arbitration to some extent by upholding application of the doctrine of a group of companies directs attachment of the future retail group and agreed by the SIAC emergency arbitrator relief which observed that protective rights didn’t amount to control of the petitioner over future retail ltd and consequently didn’t violate the law bench aligns with the same after hectic debate and arguments.

CONCLUSION

On a concluding note, I just wanted to say that the above discussions focus on the problem faced by the parties (mostly foreign) seeking enforcement of international arbitration awards in India and other multiple jurisdictions but one still needs to remain optimistic when it comes to arbitration practice as it’s a fact that a large number of awards are enforced too by the assistance of the national courts in Asia and interestingly India and other Asian countries trying hard to make arbitration more robust and friendly for MNC’S and foreign investors as dispute resolution is a thing to watch out when it comes to economic and investment aspects’ for the companies and others especially investment treaty arbitration.

Also very pleased to see the growth of arbitration in India and the approach of the supreme court of India and other high courts to interfere as little as required to ultimately reduce the burden of pendency of disputes on the judiciary. for instance, the 2019 amendment of the arbitration and conciliation act (section 29A) to reduce the time limit of arbitration proceedings to 12 months and the arbitration tribunal needs to pass an award within 12 months only except in the case of international commercial arbitration for which it was stated that finish proceedings as early as possible also creation of a council of arbitration, centralized body for looking at arbitrators and promotion of arbitration as a way to resolve the dispute and also Indian council of arbitration opens up a dispensation center for arbitration activities in tier 2 cities such as Kanpur last year inaugurated by the chief justice of Allahabad high court and also formal institutionalized New Delhi international arbitration center at par with Mumbai center for international arbitration, Mumbai doing some appreciable work into this domain, thus future for enforcement of arbitral awards as well as arbitration as a practice is bright.

At last, in the contemporary era, it is quite evident within this domain of arbitration that the losing party in arbitration setup usually has more room for tricky negotiation as; such a party may simply carry out the award freely, following its care-full activity to do so. Then, the losing party may use the arbitral award as a source for negotiating a settlement. It is possibly unanticipated that the winning party to the arbitration may settle for less than the amount awarded in comparison to the claim made, but it may be considered better to accept a lesser sum without delay than to face a further challenge or enforcement proceedings to recover the full amount, therefore hopefully Shortly this practice of challenging arbitral award will be reduced to a greater extent by the reforms and propagation made to the practice of arbitration for making it more fruitful, far-reaching and robust to a larger extent.

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‘District judiciary extremely tight-twisted in granting bail’: MP HC issues guidelines

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Observing that the district judiciary is “extremely tight twisted” while granting bail, the Madhya Pradesh High Court in a latest, learned, laudable and landmark judgement titled Zarina Begum vs State of Madhya Pradesh through P.S.E.O.W in M.Cr.C. No. 30933/2020 delivered on 13 May 2021 has issued commendable guidelines to the police authorities and Judicial Magistrates in the state for implementation of guidelines issued in Arnesh Kumar vs State of Bihar & Anr. in Criminal Appeal No. 1277 of 2014 judgement while dealing with the bail applications. It must be mentioned here that in this notable case a single-judge Bench comprising Justice Atul Sreedharan made the significant observation stipulating that, “The hesitancy of the District Judiciary to adhere to the rule of bail and not jail is understandable. There exists a widespread fear amongst judges of the District Judiciary that they may be questioned by the High Court, or complaints may be preferred against them by disgruntled lawyers or litigants whenever they pass orders granting bail which in turn, results in a vigilance enquiry against them.”

While underscoring the importance of independent decision making in District Judiciary, the Bench then also held that, “The importance of having a District Judiciary unfettered and fearless cannot be underscored enough. In a state like Madhya Pradesh with widespread widespread poverty, illiteracy and lack of resources, it is only a free, independent and fearless District Judiciary that can ensure that the end user of the justice system is given justice at the very first level and does not have to move higher up the hierarchy of Courts to get justice.”

To start with, this brief, brilliant, bold and balanced judgment authored by a single Judge Bench of Justice Atul Sreedharan of Madhya Pradesh High Court sets the ball rolling by first and foremost pointing out in para 1 that, “This application has been preferred by the applicant under section 438 Cr.P.C, in Crime No.95/2020 registered at P.S E.O.W Bhopal, District Bhopal, for offences under sections 420,467,468,471,472,474 read with section 120B of IPC.”

Of course, the Bench then observes in para 2 that, “The investigating agency is the Economic Offences Wing, Bhopal (hereinafter referred to as the “EOW”). The applicant is around 58 years of age and is stated to be suffering from various medical ailments including sleep apnoea.”

To put things in perspective, the Bench then observes in para 3 that, “Briefly, the facts of this case are that one Rabiya Bi, the complainant along with others, registered the FIR against the applicant and other co-accused persons. The property in question is a piece of land admeasuring 93.37 acres situated in Village Singarcholi, Bhopal. The owner was one Faiz Mohammad who died leaving behind seven legal heirs. They are Mohammad Ayub, Mohammad Yakub, Hanifa Sultan, Asma Sultan, Sikandar Khan, Qamar Khan and Anwar Khan. Out of the total area of 93.37 acres, 54 acres was demarcated for residential purpose while the remaining, approximately 39 acres was kept aside for agricultural purpose.”

While elaborating on the facts of the case, the Bench then puts forth in para 4 that, “With the exception of Mohammad Yakub, the remaining six legal heirs of Faiz Mohammad jointly executed a power of attorney dated 17/01/1989 and transferred all their rights in the aforesaid property to the power of attorney holder Mohammad Sharif (the then President of Tilak Grah Nirman Society). Similarly, Mohammad Yakub also executed a power of attorney on 05/08/1989 transferring all his rights in the aforesaid property in favour of power of attorney holder Mohammad Sharif. Thus, Mohammad Sharif became the power of attorney holder for six of the legal heirs by way of power of attorney dated 17/01/1989 and also the power of attorney holder for Mohammad Yakub vide power of attorney dated 05/08/1989. On the basis of the combined power of attorney given by the six legal heirs, Mohammad Sharif sold 34 acres of agricultural land through 12 registered sale deeds, executed in favour of various individuals between 04/02/1989 and 26/06/1989. On the basis of the power of attorney executed by Mohammad Yakub, Mohammad Sharif sold the remaining agricultural land of five acres and 64 decimals to Tilak Grah Nirman Samity vide 11 registered sale deeds and the same was executed between 15/11/1994 and 23/11/1994. Besides the power of attorney mentioned hereinabove, all the 7 legal heirs of Faiz Mohammad executed 7 different power of attorneys in favour Mohammad Sharif between February and March 1990 vesting the rights of remaining the 54 acres of land in favour of Mohammad Sharif, the power of attorney holder.”

To say the least, the Bench then states in para 5 that, “On the strength of the 7 power of attorneys executed between February and March 1990, the remaining land of 54 acres was also sold to Tilak Grah Nirman Samiti by 14 registered sale deeds executed in the year 1997 and Tilak Grah Nirman Samiti further sold the land to 1500 persons.”

As we see, the Bench then discloses in para 6 that, “In the FIR dated 07/02/2020, it has been alleged by the complainants that Mohammad Sharif had executed the power of attorney dated 17/01/1989 without the knowledge of the 6 legal heirs or the ancestor of the complainants and altered the remaining paragraphs of the power of attorney and thereby committed forgery.”

While continuing in the same vein, the Bench then elucidates in para 7 stating that, “In the FIR, it was also alleged that Mohammad Sharif, in connivance with other accused persons, executed various sale deeds in favour of his family members and friends between 04/02/1989 to 26/06/1989. The applicant Zarina Begum was one of the beneficiaries. It is for this alleged offence that was committed thirty-one years ago, that the applicant is sought to be arrested today.”

On similar lines, the Bench then points out in para 8 that, “In a connected case arising from the same FIR, being M.Cr.C No. 26706/2020 (Colonel Bhupendra Singh Kharayat Vs. State of Madhya Pradesh), this court had granted the benefit of bail to the 78 year old retired Colonel who was picked up from his home by the investigating agency for the same offence for which the applicant herein is sought to be apprehended. In that case the Colonel did not even get an opportunity to move either this Court of Sessions Court for an anticipatory bail. While passing that order, this court had elaborately discussed the judgement of the Supreme Court in Joginder Kumar versus State of Uttar Pradesh, a landmark judgement of the Supreme Court striking a balance between the personal liberty of an accused and the safety of the society. However, the order passed by this court in Col Bhupendra Singh Kharayat’s case, though being available to the Ld. Court below it has unfortunately dismissed the application for anticipatory bail moved by the applicant only on the basis that the investigation was still in progress. Not even fleetingly has the learned court below even considered the necessity for a custodial interrogation of the applicant for an offence that was committed more than three decades ago.”

Quite forthrightly, the Bench then minces no words to hold in para 9 that, “Case after case this court has observed that the District Judiciary is extremely tight-fisted when it comes to granting bail. Applications are routinely dismissed on cyclostyled grounds that the offence alleged is serious or that the investigation is still in progress or that the accused may influence the witnesses. Hardly ever does the court below examine the requirement for continued incarceration of the accused as an under trial, but for the routine reasons given above. Resultantly, the High Court suffers a deluge of bail cases and its precious time is lost in deciding bail applications instead of deciding civil and criminal appeals.”

Briefly stated, the Bench then lays bare in para 10 that, “The pressure of the pending bail applications is a major factor preventing this Court to spare time for deciding criminal appeals on account of which, several criminal appeals are withdrawn by the appellants on account of the same being rendered infructuous with the appellant having served the entire sentence during the pendency of the appeal or, in case of life imprisonment, the State offers remission to the appellants who have completed fourteen years or more of their sentence, subject to the withdrawal of the criminal appeal. The chart below shows the number of criminal appeals withdrawn from the High Court in the year 2020.

The above figures have been received from the Registry of the High Court. The huge burden of bail matters that has been shifted to the High Court, is on account of the extremely negative view that is being adopted by the District Judiciary in bail matters for which they can hardly be held responsible on account of perception by the judges of the District Judiciary of professional hardships they may have to face, if they indeed start deciding bail applications applying the principle of “Bail and not Jail”. For a majority of the Judges of the District Judiciary, it is a catchy phrase to be observed in breach rather than in compliance.”

Be it noted, the Bench then observes in para 11 that, “The attention of the District Judiciary must also be drawn to the overcrowding of jails in the State which is also directly associated with the reluctance of the lower courts to grant bail. The inmates occupying these jails are far in excess of the optimum capacity of these jails. A majority of them are undertrials. Even convicts and undertrials are entitled to basic human rights and overcrowded prisons with waning resources, result in the violation of that right. Convicts serving sentence or undertrials awaiting judgment cannot be held in inhuman conditions. The charts below give the figures, which paint a very dismal picture. It is almost as if, basic human rights are not available to undertrials while judgement after judgement laudably mentions that during trial, the presumption is of innocence and not of guilt.

PRISON INMATES AS ON 30 NOVEMBER 2020

S.No Type of Jail Number Undergoing Sentence Undertrials Others Total

1. Central Jails 11 11,182 10,107 96 21,385

2. District Jails 41 2290 13,164 47 15,501

3. Open Jails 06 2 0 0 2

4. Sub-Jails 73 271 7596 3 7870

5. Total 131 13,745 (30.71%) 30,867 (68.96%) 146 (0.33%)

The figures disclose that 68.96% of the prison inmates in the State are undertrial while convicts constitute 30.71%.

OVER-CROWDING OF PRISONS AS ON 30 NOVEMBER 2020

S.No Type of Jail Number Prison Capacity Number of Prisoners Excess Percentage of Overcrowding

1. Central Jails 11 14,060 21,385 7325 52.10%

2. District Jails 41 9485 15,501 6016 63.43%

3. Open Jails 06 94 2 -92

4. SubJails 73 5020 7870 2850 56.77%

5. Total 131 28,659 44,758 16,099 56.17%

The chart above reveals that the total overcrowding in the four categories of jails in the State is 56.17%. Even convicts and under trails are entitled to basic human rights and if the figures are anything to go by, their condition as on date is no better than livestock, herded together for lack of infrastructure and a “not so sensitive” judicial system.”

Quite remarkably, the Bench then waxes eloquent to hold in para 12 that, “The “grundnorm” of bail jurisprudence i.e., “bail and not jail” [State of Rajasthan Vs. Balchand – (1977) 4 SCC 308] appears to have been forgotten. Bail should not be denied by the District Judiciary only for the purpose of ingratiating the raucous blood lust of a society existing on social media, or to pander to public perception. The courts must remember that the presumption is always of innocence and that the denial of bail must be for exceptional reasons, justifiable on the facts and circumstances of the case before it.”

It would be worthwhile to mention here that the Bench then quite aptly states in para 13 that, “This Court feels it essential to refer to the judgement of the Supreme Court in Joginder Kumar’s case where the Supreme Court has extensively discussed the power of the police to affect an arrest. The Supreme Court refers to the third National Police Commission report and extracts therefrom “In India, Third Report of the National Police Commission at p. 32 also suggested: “An arrest during the investigation of a cognizable case may be considered justified in one or other of the following circumstances: (i) The case involves a grave offence like murder, dacoity, robbery, rape etc., and it is necessary to arrest the accused and bring his movements under restraint to infuse confidence among the terror-stricken victims. (ii) The accused is likely to abscond and evade the processes of law. (iii) The accused is given to violent behaviour and is likely to commit further offences unless his movements are brought under restraint. (iv) The accused is a habitual offender and unless kept in custody he is likely to commit similar offences again. It would be desirable to insist through departmental instructions that a police officer making an arrest should also record in the case diary the reasons for making the arrest, thereby clarifying his conformity to the specified guidelines ….” (Joginder Kumar v. State of U.P., (1994) 4 SCC 260, Paragraph 20). After reproducing the above from the NPC report, the Supreme Court holds “The above guidelines are merely the incidents of personal liberty guaranteed under the Constitution of India. No arrest can be made because it is lawful for the police officer to do so. The existence of the power to arrest is one thing. The justification for the exercise of it is quite another. The police officer must be able to justify the arrest apart from his power to do so. Arrest and detention in police lock-up of a person can cause incalculable harm to the reputation and self-esteem of a person. No arrest can be made in a routine manner on a mere allegation of commission of an offence made against a person. It would be prudent for a police officer in the interest of protection of the constitutional rights of a citizen and perhaps in his own interest that no arrest should be made without a reasonable satisfaction reached after some investigation as to the genuineness and bona fides of a complaint and a reasonable belief both as to the person’s complicity and even so as to the need to effect arrest. Denying a person of his liberty is a serious matter. The recommendations of the Police Commission merely reflect the constitutional concomitants of the fundamental right to personal liberty and freedom. A person is not liable to arrest merely on the suspicion of complicity in an offence. There must be some reasonable justification in the opinion of the officer effecting the arrest that such arrest is necessary and justified. Except in heinous offences, an arrest must be avoided if a police officer issues notice to person to attend the Station House and not to leave the Station without permission would do” (Joginder Kumar v. State of U.P., (1994) 4 SCC 260, Paragraph 20.).”

In context of this case which we are discussing, it would be instructive to mention here that the Bench then makes it clear in para 14 that, “In recent times, if there has been a judgement of the Supreme Court which passionately desired the protection of the individual’s liberty from arbitrary arrest, it is Arnesh Kumar Vs. State of Bihar (2014) 8 SCC 273, the Supreme Court scathingly indicted the police for still bearing a colonial mindset and disdain for the liberty of the citizen. The Supreme Court referred to the power of arrest as a “tool of harassment”. In paragraph 5 the Supreme Court observed “Arrest brings humiliation, curtails freedom and casts scars forever. Lawmakers know it so also the police. There is a battle between the lawmakers and the police and it seems that the police has not learnt its lesson: the lesson implicit and embodied in CrPC. It has not come out of its colonial image despite six decades of Independence, it is largely considered as a tool of harassment, oppression and surely not considered a friend of public. The need for caution in exercising the drastic power of arrest has been emphasised time and again by the courts but has not yielded desired result. Power to arrest greatly contributes to its arrogance so also the failure of the Magistracy to check it. Not only this, the power of arrest is one of the lucrative sources of police corruption. The attitude to arrest first and then proceed with the rest is despicable. It has become a handy tool to the police officers who lack sensitivity or act with oblique motive”. The Supreme Court went on to hold that a person accused of an offence punishable with imprisonment up to seven years, cannot be arrested by the police on mere prima facie satisfaction of the person having committed such an offence and thereafter, adverting to s. 41 (1) (b) (ii) clause a to e, laid down the requirement under the law in the following words.

“7.1. From a plain reading of the aforesaid provision, it is evident that a person accused of an offence punishable with imprisonment for a term which may be less than seven years or which may extend to seven years with or without fine, cannot be arrested by the police officer only on his satisfaction that such person had committed the offence punishable as aforesaid. A police officer before arrest, in such cases has to be further satisfied that such arrest is necessary to prevent such person from committing any further offence; or for proper investigation of the case; or to prevent the accused from causing the evidence of the offence to disappear; or tampering with such evidence in any manner; or to prevent such person from making any inducement, threat or promise to a witness so as to dissuade him from disclosing such facts to the court or the police officer; or unless such accused person is arrested, his presence in the court whenever required cannot be ensured. These are the conclusions, which one may reach based on facts.

7.2. The law mandates the police officer to state the facts and record the reasons in writing which led him to come to a conclusion covered by any of the provisions aforesaid, while making such arrest. The law further requires the police officers to record the reasons in writing for not making the arrest

7.3. In pith and core, the police officer before arrest must put a question to himself, why arrest? Is it really required? What purpose it will serve? What object it will achieve? It is only after these questions are addressed and one or the other conditions as enumerated above is satisfied, the power of arrest needs to be exercised. In fine, before arrest first the police officers should have reason to believe on the basis of information and material that the accused has committed the offence. Apart from this, the police officer has to be satisfied further that the arrest is necessary for one or the more purposes envisaged by subclauses (a) to (e) of clause (1) of Section 41 CrPC.” (Arnesh Kumar Vs. State of Bihar – (2014) 8 SCC 273, Paragraphs 7.1 to 7.3 at page 278 to 279.).

Please read concluding on thedailyguardian.com

The Supreme Court, in paragraph 7.3 has reiterated the spirit of Joginder Kumar Vs. State of Uttar Pradesh, when it says that the police officer before effecting an arrest must question himself with regard to the necessity of arrest and the objective such an arrest seeks to fulfil. In Joginder Kumar, the Supreme Court opined that “The existence of the power to arrest is one thing. The justification for the exercise of it is quite another. The police officer must be able to justify the arrest apart from his power to do so”. Having thus illumined the legal position on the power of the police to arrest without a warrant in cases punishable with imprisonment up to seven years, the Supreme Court went on to lay down the duty of the Magistrate, to ascertain the necessity for further incarceration of the accused as an undertrial, in the following words.

“8.1. During the course of investigation of a case, an accused can be kept in detention beyond a period of 24 hours only when it is authorised by the Magistrate in exercise of power under Section 167 CrPC. The power to authorise detention is a very solemn function. It affects the liberty and freedom of citizens and needs to be exercised with great care and caution. Our experience tells us that it is not exercised with the seriousness it deserves. In many of the cases, detention is authorised in a routine, casual and cavalier manner.

8.2. Before a Magistrate authorises detention under Section 167 CrPC, he has to be first satisfied that the arrest made is legal and in accordance with law and all the constitutional rights of the person arrested are satisfied. If the arrest effected by the police officer does not satisfy the requirements of Section 41 of the Code, Magistrate is duty-bound not to authorise his further detention and release the accused. In other words, when an accused is produced before the Magistrate, the police officer effecting the arrest is required to furnish to the Magistrate, the facts, reasons and its conclusions for arrest and the Magistrate in turn is to be satisfied that the condition precedent for arrest under Section 41 CrPC has been satisfied and it is only thereafter that he will authorise the detention of an accused.

8.3. The Magistrate before authorising detention will record his own satisfaction, may be in brief but the said satisfaction must reflect from his order. It shall never be based upon the ipse dixit of the police officer, for example, in case the police officer considers the arrest necessary to prevent such person from committing any further offence or for proper investigation of the case or for preventing an accused from tampering with evidence or making inducement, etc. the police officer shall furnish to the Magistrate the facts, the reasons and materials on the basis of which the police officer had reached its conclusion. Those shall be perused by the Magistrate while authorising the detention and only after recording his satisfaction in writing that the Magistrate will authorise the detention of the accused.

8.4. In fine, when a suspect is arrested and produced before a Magistrate for authorising detention, the Magistrate has to address the question whether specific reasons have been recorded for arrest and if so, prima facie those reasons are relevant, and secondly, a reasonable conclusion could at all be reached by the police officer that one or the other conditions stated above are attracted. To this limited extent the Magistrate will make judicial scrutiny” (Arnesh Kumar Vs. State of Bihar – (2014) 8 SCC 273, Paragraphs 8.1 to 8.4 at page 279 to 280).”

Going ahead, the Bench then postulates in para 15 that, “After imposing the checks on the power of the police to arrest, the Supreme Court, in paragraphs 8.1 to 8.4, diverts its attention to the duty of the Magistrate u/s. 167 Cr.P.C. It emphasises that further detention of the accused should not be resorted to in the exercise of remand powers, unless warranted. The Supreme Court has also given serious consideration to the power of remand referring to it as a “solemn function” which must be exercised with concern for liberty of the individual and has also observed that it is presently exercised in a “routine, casual and cavalier manner” in some cases.” Who can deny this unpalatable truth? This is what happens most unfortunately in so many cases!

To be sure, the Bench then points out in para 16 that, “The Supreme Court, in paragraph 9 of the judgement examines s. 41A Cr.P.C in and observes “Another provision i.e. Section 41- A CrPC aimed to avoid unnecessary arrest or threat of arrest looming large on the accused requires to be vitalized …….. The aforesaid provision makes it clear that in all cases where the arrest of a person is not required under Section 41(1) CrPC, the police officer is required to issue notice directing the accused to appear before him at a specified place and time. Law obliges such an accused to appear before the police officer and it further mandates that if such an accused complies with the terms of notice he shall not be arrested, unless for reasons to be recorded, the police officer is of the opinion that the arrest is necessary. At this stage also, the condition precedent for arrest as envisaged under Section 41 CrPC has to be complied and shall be subject to the same scrutiny by the Magistrate as aforesaid” (Arnesh Kumar Vs. State of Bihar – (2014) 8 SCC 273, Paragraph 9 at page 280). This observation reveals the unequivocal premium that the Supreme Court attaches to an individual’s liberty. It has held that section 41 of the CRPC, prohibits the police from effecting an arrest for an offence where the punishment is not more than seven years imprisonment except for exceptional reasons to be recorded. It has interpreted section 41A CrPC and held that the police shall refrain from making an arrest where the accused, in response to a notice under section 41A appears before the police and joins the investigation, except in exceptional circumstances to be recorded by police.”

Quite pertinently, the Bench then brings out in para 17 that, “Thereafter, in paragraph 11 of the judgement, the Supreme Court issue directions which is law under article 141 of the Constitution. The same are reproduced hereinbelow.

“11. Our endeavour in this judgment is to ensure that police officers do not arrest the accused unnecessarily and Magistrate do not authorise detention casually and mechanically. In order to ensure what we have observed above, we give the following directions:

11.1. All the State Governments to instruct its police officers not to automatically arrest when a case under Section 498-A IPC is registered but to satisfy themselves about the necessity for arrest under the parameters laid down above flowing from Section 41 CrPC;

11.2. All police officers be provided with a check list containing specified sub-clauses under Section 41(1)(b)(ii);

11.3. The police officer shall forward the check list duly filled and furnish the reasons and materials which necessitated the arrest, while forwarding/producing the accused before the Magistrate for further detention; 11.4. The Magistrate while authorising detention of the accused shall peruse the report furnished by the police officer in terms aforesaid and only after recording its satisfaction, the Magistrate will authorise detention; 11.5. The decision not to arrest an accused, be forwarded to the Magistrate within two weeks from the date of the institution of the case with a copy to the Magistrate which may be extended by the Superintendent of Police of the district for the reasons to be recorded in writing; 11.6. Notice of appearance in terms of Section 41- A CrPC be served on the accused within two weeks from the date of institution of the case, which may be extended by the Superintendent of Police of the district for the reasons to be recorded in writing;

11.7. Failure to comply with the directions aforesaid shall apart from rendering the police officers concerned liable for departmental action, they shall also be liable to be punished for contempt of court to be instituted before the High Court having territorial jurisdiction.

11.8. Authorising detention without recording reasons as aforesaid by the Judicial Magistrate concerned shall be liable for departmental action by the appropriate High Court.” (Arnesh Kumar Vs. State of Bihar – (2014) 8 SCC 273, Paragraph 11 to 11.8 at page 281).

the directions given by the Supreme Court in Arnesh Kumar’s case are extremely elaborate and has taken into consideration, the liberty of the individual accused of offences where the punishment is not more than seven years imprisonment.”

Quite rightly, the Bench then puts forth with regret in para 18 that, “This judgement was passed by the Supreme Court in the year 2014. Yet, after the passage of nearly 7 years, the directions passed are observed more in breach than in compliance. In order to ensure that the benevolent effect of the judgement is not restricted only to those offences arising from matrimonial cases u/s. 498-A and s. 406 IPC, the Supreme Court laid down in the following words that “We hasten to add that the directions aforesaid shall not only apply to the cases under Section 498- A IPC or Section 4 of the Dowry Prohibition Act, the case in hand, but also such cases where offence is punishable with imprisonment for a term which may be less than seven years or which may extend to seven years, whether with or without fine” (Arnesh Kumar Vs. State of Bihar – (2014) 8 SCC 273, Paragraph 12 at page 281).”

Quite rightly, the Bench then while striking the right chord in para 19 holds that, “The underlying concern of the Supreme Court regarding the approach of the Courts below in bail matters was reflected yet again in Dataram Singh Vs. State of Uttar Pradesh and Another (2018) 3 SCC 22, where a two-judge bench of the Supreme Court, in the very first paragraph observed, “……A fundamental postulate of criminal jurisprudence is the presumption of innocence, meaning thereby that a person is believed to be innocent until found guilty. However, there are instances in our criminal law where a reverse onus has been placed on an accused with regard to some specific offences but that is another matter and does not detract from the fundamental postulate in respect of other offences. Yet another important facet of our criminal jurisprudence is that the grant of bail is the general rule and putting a person in jail or in a prison or in a correction home (whichever expression one may wish to use) is an exception. Unfortunately, some of these basic principles appear to have been lost sight of with the result that more and more persons are being incarcerated and for longer periods. This does not do any good to our criminal jurisprudence or to our society” ( Dataram Singh Vs. State of UP and Another – (2018) 3 SCC 22, at paragraph 1, page 22).”

Notably, the Bench then hastens to add in para 20 that, “More recently, in Arnab Goswami’s case, the Supreme Court once again focussed its attention on liberty of the individual. The Supreme Court emphasised on the role of the District Judiciary and the High Court to be more proactive when it comes to dealing with cases of personal liberty rather than dealing with it in a mundane manner. Paragraph 70 of the judgement deserves to be reproduced in full in which the Supreme Court observes, “More than four decades ago, in a celebrated judgment in State of Rajasthan v. Balchand [State of Rajasthan v. Balchand, (1977) 4 SCC 308 : 1977 SCC (Cri) 594], Krishna Iyer, J. pithily reminded us that the basic rule of our criminal justice system is “bail, not jail” [ These words of Krishna Iyer, J. are not isolated silos in our jurisprudence, but have been consistently followed in judgments of this Court for decades. Some of these judgments are : State of U.P. v. Amarmani Tripathi, (2005) 8 SCC 21 : 2005 SCC (Cri) 1960 (2) and Sanjay Chandra v. CBI, (2012) 1 SCC 40 : (2012) 1 SCC (Cri) 26 : (2012) 2 SCC (L&S) 397] . The High Courts and courts in the district judiciary of India must enforce this principle in practice, and not forego that duty, leaving this Court to intervene at all times. We must in particular also emphasise the role of the district judiciary, which provides the first point of interface to the citizen. Our district judiciary is wrongly referred to as the “subordinate judiciary”. It may be subordinate in hierarchy but it is not subordinate in terms of its importance in the lives of citizens or in terms of the duty to render justice to them. High Courts get burdened when courts of first instance decline to grant anticipatory bail or bail in deserving cases. This continues in the Supreme Court as well, when High Courts do not grant bail or anticipatory bail in cases falling within the parameters of the law. The consequence for those who suffer incarceration are serious. Common citizens without the means or resources to move the High Courts or this Court languish as undertrials. Courts must be alive to the situation as it prevails on the ground—in the jails and police stations where human dignity has no protector. As Judges, we would do well to remind ourselves that it is through the instrumentality of bail that our criminal justice system’s primordial interest in preserving the presumption of innocence finds its most eloquent expression. The remedy of bail is the “solemn expression of the humaneness of the justice system” [ Arghya Sengupta and Ritvika Sharma, ‘Saharashri and the Supremes’, (The Wire, 23-6-2015) available at ] . Tasked as we are with the primary responsibility of preserving the liberty of all citizens, we cannot countenance an approach that has the consequence of applying this basic rule in an inverted form. We have given expression to our anguish in a case where a citizen has approached this Court. We have done so in order to reiterate principles which must govern countless other faces whose voices should not go unheard”(Arnab Manoranjan Goswami Vs. State of Maharashtra – (2021) 2 SCC 427 – paragraph 70 at page 473) (emphasis added). The portions bearing added emphasis, reveals the importance given by the Supreme Court to the District Judiciary in bail matters. It gently disapproves of the District Judiciary being referred to as the Subordinate Judiciary and goes on the say that the District Judiciary is only administratively subordinate to the High Court but on the judicial side, it is just as responsible for upholding the liberty of the average citizen as is the High Court and the Supreme Court.”

While taking the right stand, the Bench then makes it clear in para 21 that, “It is all very well to reproduce the benevolent observations of the Supreme Court in Arnab Goswami’s case while glossing over the reality that exists on the ground relating to the District Judiciary. The District Judiciary is the bulwark against executive excess. It is the first line of defence, and for a large number of the citizens, perhaps the last. The existence of the rule of law in the state is reflected by the responsiveness of the District Judiciary to matters relating to personal liberty and freedom of the individual. The hesitancy of the District Judiciary to adhere to the rule of ‘bail and not jail’ is understandable. There exists a widespread fear amongst judges of the District Judiciary that they may be questioned by the High Court, or complaints may be preferred against them by disgruntled lawyers or litigants whenever they pass orders granting bail which in turn, results in a vigilance enquiry against them.”

Practically speaking, the Bench then candidly concedes in para 22 that, “Whenever a judge of the District Judiciary is proceeded against by the vigilance on account of a bail order or an acquittal in a high-profile case, it results in a domino effect where other judges of the District Judiciary feel intimidated and consider it practical to dismiss bail applications and enter convictions and remain safe from imputations of dishonesty and the associated enquiry that follows it. Even an inquiry by the High Court in which the Judge may eventually be exonerated, which may seem innocuous for those of us sitting in the High Court, has a debilitating effect on the psyche of the Judge in the District Judiciary. The fact that there has been an inquiry against a Judge for granting bail or an acquittal sees a fall in his image amongst his peers. Resultantly, they clam up and refuse bail in even the most trivial of offences. The High Court sees numerous cases coming up before it, concerned with the minor offences which are triable by the Court of the JMFC.”

In addition, the Bench then further rightly adds in para 23 that, “The combined effect of some members of the bar and disgruntled litigants, ever ready to complain against judges by anonymous communication coupled at times with an overzealous District Judge (Vigilance and Inspection), out to prove the worth of his existence, whose overbearing presence and attitude of selectively examining the orders passed by the Judges of the District Judiciary relating to anticipatory bail, regular bail and acquittals (especially in those cases relating to heinous offences or cases which acquire prominence in the print, electronic and social media), has a demoralising effect on the Judges of the District Judiciary for whom such action is the proverbial sword of Damocles, perpetually hanging over their heads, always threatening to drop.”

On a practical note, the Bench then puts forth in para 24 that, “The office of the District Judge (Vigilance and Training) continues to have a debilitating effect on independence and individuality of the judges of the District Judiciary. The post is a surplus appendage, akin to a vestigial organ in the body of the Judiciary in the State of Madhya Pradesh. The post is occupied by a Judge, senior enough to occupy the post of the District Judge. His duties involve calling at random, the judgements and orders passed by the Judges of the District Judiciary and examine them for quality and integrity. A position of immense power and influence over the Judges of the District Judiciary. As it is, the District Judge constantly reviews the work of those under him and gives his or her assessment in the ACR’s of the Judges who are working under him. Sometimes, the post can be occupied by an individual who to prove his preeminent importance to the High Court, as a conduit of information, can assess the orders of the Judges and comment upon the same being passed with a dishonest motive only because in his or her opinion, the order is bad in law. This demotivates the Judges of the District Judiciary, especially in criminal cases from doing justice and may convict in the absence or inadequacy of evidence and dismiss bail applications even in cases in which were fit to be granted bail. It would not render the District Judiciary less efficient if the post is done away for good. Instances of judges of the District Judiciary being proceeded against by the High Court on the administrative side for discretion exercised in bail matters would demoralise others who would consider it safest to dismiss bail applications as proof of their integrity.”

Furthermore, the Bench then adds in para 25 that, “An adverse report from the District Judge (Vigilance and Inspection) can be sufficient to initiate an enquiry by this Court against the Judge in question. The post of the District Judge (Vigilance and Inspection) is a surplusage with potential to cow down Judges of the District Judiciary and gives a sublime message to them to dismiss bail applications and enjoy a career in the District Judiciary without facing any inquiry. The continued existence of the post of District Judge (Vigilance and Inspection) is questionable. It belies reason why the orders passed by a Judge of the District Judiciary must be scrutinised by his peer in a purely administrative capacity, for quality or otherwise, when the District Judge scrutinises them every year while preparing the ACR of the Judges. Besides, if a party is aggrieved by an order, it has the right to challenge the order before the Court higher in the judicial hierarchy.”

Interestingly enough, while referring to an American case law, the Bench then envisages in para 26 that, “Justice William O. Douglas, a former Judge of the U.S Supreme Court, in his dissenting opinion in Stephen S. Chandler V. Judicial Council of the Tenth Circuit of the United States observed “No matter how strong an individual Judge’s spine, the threat of punishment – the greatest peril to judicial independence – would project as dark a shadow whether cast by political strangers or by judicial colleagues. A federal Judge must be independent of every other Judge…. Neither one alone nor any number banded together can act as censor and place sanctions on him. It is vital to preserve the opportunities for judicial individualism” (Extracted from C. Ravichandran Iyer Vs. Justice A.M. Bhattacharjee – (1995) 5 SCC 457 at page 469) (emphasis added).”

While citing a relevant case law, the Bench then states in para 27 that, “In Ramesh Chander Singh Vs. High Court of Allahabad (2007) 4 SCC 247, a judge of the District Judiciary in Uttar Pradesh was imposed the punishment of withholding of two increments with cumulative effect and being reduced in rank from Additional District and Sessions judge to Civil Judge (Senior Division). His alleged misconduct was passing a judicial order granting bail to an accused in a double murder case after taking illegal gratification from the accused. The Judge who conducted the enquiry against the Petitioner in this case disbelieved the allegation of illegal gratification and held the same to be not proved. However, observations were made that the order was passed with an oblique motive, insufficient grounds and extraneous consideration. The enquiry report does not reveal as to what these oblique motive, insufficient ground and extraneous considerations were. Two other co-accused persons were already granted bail by the High Court. He failed before the High Court in challenging the decision of the full Court. On appeal to the Supreme Court, it was held “…….. A Sessions Judge was competent to grant bail and if any disciplinary proceedings are initiated against the officer for passing such an order, it would adversely affect the morale of subordinate judiciary and no officer would be able to exercise this power freely and independently” (Ramesh Chander Singh Vs. High Court of Allahabad – (2007) 4 SCC 247 – Paragraph 11 at page 254). The Supreme Court further held “This Court on several occasions has disapproved the practice of initiation of disciplinary proceedings against officers of the subordinate judiciary merely because the judgments/orders passed by them are wrong. The appellate and revisional courts have been established and given powers to set aside such orders. The higher courts after hearing the appeal may modify or set aside erroneous judgments of the lower courts …” (Ramesh Chander Singh Vs. High Court of Allahabad – (2007) 4 SCC 247 – Paragraph 12 at page 255). Needless to state, the Supreme Court set aside the order of the full Court and reinstated the Petitioner on the post of AD&SJ with full consequential benefits.”

Quite relevantly, the Bench then states in para 28 that, “More recently, in Krishna Prasad Verma Vs. State of Bihar ((2019) 10 SCC 640), a judge of the District Judiciary was proceeded against for misconduct. The charge against him was of having granted bail to an accused in a case under the NDPS where an earlier application of another accused was dismissed by the High Court. The other charge against him was having closed the evidence of the prosecution and thereby preventing it from producing evidence against the accused which led to his acquittal. As regards the charge of having overlooked the previous order passed by the High Court, the Supreme Court held that it could at the most be held as an act of negligence on the part of the judge. As regards closing of the prosecution’s evidence prematurely, the Supreme Court held from the record of the case that the prosecution was granted about 18 opportunities of producing the witnesses and it was only thereafter that the evidence was closed. The Supreme Court, while setting aside the punishment imposed upon the petitioner, underscored the importance of the independence of the District Judiciary. In paragraph 1, the Supreme Court held “In a country, which follows the Rule of Law, independence of the judiciary is sacrosanct. There can be no Rule of Law, there can be no democracy unless there is a strong, fearless and independent judiciary. This independence and fearlessness is not only expected at the level of the Superior Courts but also from the District Judiciary” (Krishna Prasad Verma Vs. State of Bihar – (2019) 10 SCC 640 – Paragraph 1 at page 640). Emphasizing upon the importance of the District Judiciary as the first and perhaps the last resort for a large part of our population, which is unable to approach the High Court or the Supreme Court on account of their poverty or lack of resources, the Supreme Court held “Most litigants only come in contact with the District Judiciary. They cannot afford to come to the High Court or the Supreme Court. For them the last word is the word of the Magistrate or at best the Sessions Judge. Therefore, it is equally important, if not more important, that the judiciary at the District level and at the Taluka level is absolutely honest, fearless and free from any pressure and is able to decide cases only on the basis of the facts on file, uninfluenced by any pressure from any quarters whatsoever” (Krishna Prasad Verma Vs. State of Bihar – (2019) 10 SCC 640 – Paragraph 2 at page 640). It further held that where the order passed by a judge of the District Judiciary is incorrect or against the settled law, the same should not lead to administrative action against Judge, unless from the record of the case and based upon evidence, malice, misconduct and corrupt practice is evident.”

Quite strikingly, the Bench then commendably adds in para 29 that, “The importance of having a District Judiciary unfettered and fearless cannot be underscored enough. In a state like Madhya Pradesh with widespread poverty, illiteracy and lack of resources, it is only a free, independent and fearless District Judiciary that can ensure that the end user of the justice system is given justice at the very first level and does not have to move higher up the hierarchy of Courts to get justice.”

Also, quite significantly, the Bench then also seeks to make it clear in para 30 that, “The court hopes that the High Court may, on the administrative side, re-assess the necessity for the post of District Judge (vigilance and inspection). The existing system by which complaints against judges of the District Judiciary are dealt with are adequately sufficient in order to ensure that the demands of a person aggrieved by the conduct of a judge is suitably addressed and also ensures that the judge of the District Judiciary is adequately protected from frivolous complaints from disgruntled and maliciously motivated persons.”

More significantly, the Bench then seeks to clarify in para 31 that, “In order to ensure that the directions passed by the Supreme Court in Arnesh Kumar’s case is scrupulously implemented and followed by the police and the Judicial Magistrates in Madhya Pradesh, this court considers it essential to pass certain directions.

DIRECTIONS TO THE POLICE

31.1 Where for an offence, the maximum imprisonment provided is up to 7 years, the accused shall not be arrested by the police as an ordinary course of action. Unless it is a special statute mandating such an arrest.

31.2 Before effecting an arrest in such a case, the police would have to record its reasons that the arrest was essential to prevent such person from committing any further offence, or for a proper investigation of the case, or to prevent the accused from causing the disappearance of evidence or on the basis of credible apprehension that the accused would tamper with evidence or prevent a witness from disclosing such facts to the court or to the police which thereby necessitates the arrest of the accused.

31.3 The State Police is directed to format and prepare a check list of pre-conditions fulfilled by the police under section 41(1)(b)(ii) of the Cr.P.C, while arresting an accused for offences bearing a maximum punishment up to 7 years. It is mandatory to supply a copy of the check list along with the remand application, to the Magistrate authorised to further remand the accused to police or judicial custody.

31.4 Where decision is taken not to arrest the accused, the police shall forward an intimation to the Magistrate within two weeks of the registration of the FIR. This period may be extended by the Superintendent of Police of the district concerned with reasons to be recorded in writing.

31.5 Where interrogation of the accused is required, notice in terms of section 41A Cr.P.C or s. 160 Cr.P.C be served on the accused within two weeks from the date of registration of the FIR which may be extended by the Superintendent of Police of the district concerned for reasons to be recorded in writing.

31.6 Where the police does not arrest the accused and upon notice u/s. 41A or 160 Cr.P.C, the accused appears before the police and assists the police in the course of investigation, in such a situation, the police are not to arrest the accused unless, there exists compelling reasons which must be recorded, as given in paragraph 31.2.

31.7 If the police does not perform as required of them as hereinabove, it would constitute contempt of the order passed by this court in addition to such other action, which may be taken against the erring officer on the administrative side.”

No less significant is what is then envisaged in para 32 that,

“DIRECTIONS TO THE JUDICIAL MAGISTRATES:-

32.1 The Magistrate, while exercising powers of remand, shall ascertain if the arrest effected by the police satisfies the requirements of section 41 of the CRPC as provided in paragraph 11.2 of Arnesh Kumar’s case (see paragraph 17 supra).

32.2 The Magistrate shall ascertain the availability of the check list as ordered by the Supreme Court in paragraph 11.3 of Arnesh Kumar’s case.

32.3 If there is non-compliance of paragraph 11.2 and/or 11.3 of Arnesh Kumar’s case, the Magistrate shall not authorise the further detention of the accused and shall release forthwith as the arrest itself is unlawful and therefore, his detention would also be rendered unlawful on account of the police not having fulfilled the requirements of section 41 of CRPC.

32.4 It is mandatory for the Magistrate authorising detention to record his independent satisfaction and also ensure in his order of remand that his satisfaction for further remand of the accused stands satisfied in compliance of paragraph 11.4 of Arnesh Kumar’s judgement.

32.5 The Magistrate shall also satisfy himself whether specific reasons have been recorded for the arrest of the accused and whether those reasons are relevant, raising a reasonable conclusion that one of the conditions for further detention of the accused as an under trial is satisfied.

32.6 Failure on the part of the Magistrate to perform as directed hereinabove, may see the initiation of proceedings against such Magistrate on the administrative side.”

While taking the practical approach, the Bench then observes in para 33 that, “As regards the grant of bail in offences involving punishment of more than seven years imprisonment, there can be no universal rule of thumb. It would defeat the very purpose of bail law, if bail were to be rejected only on account of the offence being heinous in nature. Weather an offence is heinous in nature is a matter of perception but, it would be reasonable to include in its ambit and scope such offences, which shock the conscience of a reasonable person. Again, bail cannot be denied merely because the allegations relate to the commission of a heinous offence. The nature of the evidence, the antecedents of the offender, the circumstances in which the offence was committed etc., are also to be considered. However, what the Courts must consciously exclude is the cacophony of hyper opinionated and unmoderated voices on social, print and electronic media. Public perception must never be a factor while deciding a bail application. At the same time, prudent reasons ought to be briefly given to reflect the mind of the Court while deciding the application for bail.”

Adding still more, the Bench then also holds in para 34 that, “While considering an application for bail, the following may be kept in mind:

34A. Whether, granting bail to the under-trial would result in him attempting to overawe and influence the witness or influence the course of investigation, either by threat of dire consequences or by monetary inducement?

34B. Whether, the probability of the under-trial, upon his release, committing another crime while on bail, would be germane while considering grant of bail to recidivists or repeat offenders?

34C. Whether, there is a probability upon the release of the accused on bail that he would fall victim of any vengeful action by the Complainant?

34D. Whether, the release of the accused on bail would raise a reasonable apprehension of breach of peace, and social or civil unrest, on account of the nature of the offence alleged against him?

34E. Whether, the accused would destroy the evidence yet to be collected during investigation, upon his release on bail?

34F. Whether, the overwhelming nature of prima facie evidence against the accused is such that he may be tempted to abscond and evade the process of justice all together if he is enlarged on bail?”

In context to what is stated in para 34, the Bench then adds in para 35 that, “The above considerations should be applied in a reasonable and judicious manner based upon the material on record. They, however, must not be applied in a pedantic manner only to deny the benefit of bail to the accused. Also, it must be borne in mind that the said considerations are not glossed over in order to grant the benefit of bail. Whichever way the application is decided, unless it is withdrawn, reasons ought to be given to reflect the prima facie appreciation of the material for or against the accused.”

For the sake of clarity, the Bench then points out in para 36 that, “The above notwithstanding, no undertrial ought to be kept in judicial custody, inordinately. There may be several factors delaying the trial which may not be attributable to the accused. The production and examination of prosecution witnesses is where the delay is maximum. In such cases, even if there is a perceived handicap in releasing the accused on bail, it may still be considered by placing stringent condition like higher quantum of personal bond and surety, to appearing before the Police periodically and registering his presence and in extreme cases, even asking the under trial to remove himself from the municipal limits of the district where the trial is taking place and the witnesses are situated. Of course, no rule of thumb can ever be laid down as an indelible proposition which must be followed in every case of bail and the discretion must be left to the Court.”

On an advisory note, the Bench then observes in para 37 that, “The District Judiciary must create an environment where bail applications can be decided at the first tier of the justice system itself. There is no legislative provision that mandates the disposal of a bail application within a fixed period of time. However, the ends of justice do demand that it be so done in the shortest possible time. However, it must also be borne in mind that many a litigant may not have the wherewithal of approaching the next forum available within the shortest possible time. This Court has seen applications for bail in offences triable by the Court of Magistrate, coming for the first time after the accused has completed more than half the period of the total sentence.”

Adding more, it is then stated in para 38 that, “Therefore, the District Judiciary must instil confidence in the bar and the litigants alike in bail matters. Where, the Court is unable to grant bail because the investigation is still in process, the applicant can be asked if he wants to withdraw the application with liberty to file afresh after the charge sheet is filed. In some cases, certain documents may be necessary to effectively decide the application, it may be better to adjourn the proceeding giving short dates, rather than dismiss the application on merits forcing the applicant approach the High Court for bail. In other words, the endeavour must be to see that justice is done at the level of the District Court itself. The applicant may only be too willing to try his luck a second time before the District Courts itself as along as his application is not dismissed on merits. Such an option must be given to the applicant.”

To be sure, the Bench then notes in para 39 that, “The office is requested to send a copy of this order to the Director General of Police, who is further requested to circulate the same to all the districts and disseminate to the lowest functionary, the directions given by this Court in paragraph 31.1 to 31.7 are complied with and, if in any case where such compliance is found wanting after 01/07/2021, this court shall proceed to try the policemen acting in violation of this order for contempt of this Court’s order.”

What’s more, the Bench then also adds in para 40 that, “The office is requested to send a copy of this order to all the District Judges, who are further requested to circulate the same to all the Judicial Magistrates under them to ensure compliance with the directions given by this Court in paragraph 32.1 to 32.6 and any case where such compliance is found wanting after 01/07/2021, they may be proceeded on the administrative side.”

Finally, it is then held in para 41 that, “On the merits of this case, for what has been discussed and observed by this Court herein above, the application is allowed, and it is directed that the applicant shall be forthwith enlarged on bail upon arrest by the investigating officer, upon furnishing a personal bond in the sum of Rs.10,000/- (Rupees ten Thousand only) with one solvent surety in the like amount to the satisfaction of the arresting officer. Certified copy as per rules.”

No doubt, it is a very learned, brilliant and balanced judgment which must be adhered to in totality. Justice Atul Sreedharan has painstakingly elaborated on each and every aspect very rightly and has sought to make it absolutely clear that the district judiciary is extremely tight-twisted in granting bail and elaborated the reasons also for it and suggested the right approach also which must always be followed. The directions which it has issued to police and judicial magistrates for implementing the Arnesh Kumar case guidelines must be implemented in totality. There can be no denying it!

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Significant Supreme Court judgements of May 2021

MUNEEB RASHID MALIK

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The Supreme Court of India has pronounced numerous judgments in the month of May, 2021. In this write-up, the important pronouncements are briefly discussed.

RAJKUMAR SABU V. M/S SABU TRADE PRIVATE LIMITED, TRANSFER PETITION (CRIMINAL) NO. 17 OF 2021

The transfer of a criminal case under Section 406 of the 1973 Code of Criminal Procedure can be directed when such transfer would be expedient for the ends of justice.

A Single-Judge Bench of Justice Aniruddha Bose held that a transfer of a criminal case under Section 406 of the 1973 Code can be directed when such transfer would be expedient for the ends of justice. This expression entails factors beyond mere convenience of the parties or one of them in conducting a case before a Court having jurisdiction to hear the case. The Bench also held that if a Court hearing a case possesses the jurisdiction to proceed with the same, solely based on the fact that one of the parties to that case is unable to follow the language of that Court would not warrant exercise of jurisdiction of the Supreme Court under Section 406 of the 1973 Code.

RAHUL SHARMA & ANR. V. NATIONAL INSURANCE COMPANY LTD. & ORS., CIVIL APPEAL NO. 1769 OF 2021

In case the deceased is self-employed and below the age of 40, 40% addition would be made to their income as future prospects.

A Bench comprising the Chief Justice N.V. Ramana, Justices Surya Kant and Aniruddha Bose reiterated that in case the deceased is self-employed and below the age of 40, 40% addition would be made to their income as future prospects, as was held by the Supreme Court in a Five Judge Bench decision in National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680. In the present case, the deceased was self-employed and was 37 years old, therefore, warranting the addition of 40% towards future prospects. The Bench observed that Pranay Sethi (supra), affirming the ratio in Sarla Verma v. Delhi Transport Corporation, (2009) 6 SCC 121 held that the deduction towards personal and living expenses for a person such as the deceased who was married with two dependents, to be one-third (1/3rd).

SATBIR SINGH & ANOTHER V. STATE OF HARYANA, CRIMINAL APPEAL NOS. 1735­1736 OF 2010

Section 304-B, IPC must be interpreted keeping in mind the legislative intent to curb the social evil of bride burning and dowry demand.

A Bench comprising the Chief Justice N.V. Ramana and Justice Aniruddha Bose while summarizing the law under Section 304­B, IPC read with Section 113­B, Evidence Act, held that Section 304-B, IPC must be interpreted keeping in mind the legislative intent to curb the social evil of bride burning and dowry demand; the prosecution must at first establish the existence of the necessary ingredients for constituting an offence under Section 304-B, IPC; once these ingredients are satisfied, the rebuttable presumption of causality, provided under Section 113-B, Evidence Act operates against the accused; the phrase “soon before” as appearing in Section 304-B, IPC cannot be construed to mean ‘immediately before’. The prosecution must establish existence of “proximate and live link” between the dowry death and cruelty or harassment for dowry demand by the husband or his relatives; Section 304-B, IPC does not take a pigeonhole approach in categorizing death as homicidal or suicidal or accidental. The reason for such non-categorization is due to the fact that death occurring “otherwise than under normal circumstances” can, in cases, be homicidal or suicidal or accidental; due to the precarious nature of Section 304-B, IPC read with 113-B, Evidence Act, Judges, prosecution and defence should be careful during conduction of trial; it is a matter of grave concern that, often, Trial Courts record the statement under Section 313, CrPC in a very casual and cursory manner, without specifically questioning the accused as to his defense. It ought to be noted that the examination of an accused under Section 313, CrPC cannot be treated as a mere procedural formality, as it based on the fundamental principle of fairness. This provision incorporates the valuable principle of natural justice “audi alteram partem” as it enables the accused to offer an explanation for the incriminatory material appearing against him. Therefore, it imposes an obligation on the court to question the accused fairly, with care and caution; the Court must put incriminating circumstances before the accused and seek his response. A duty is also cast on the counsel of the accused to prepare his defense since the inception of the Trial with due caution, keeping in consideration the peculiarities of Section 304-B, IPC read with Section 113-B, Evidence Act; Section 232, CrPC provides that, “If, after taking the evidence for the prosecution, examining the accused and hearing the prosecution and the defence on the point, the Judge considers that there is no evidence that the accused committed the offence, the Judge shall record an order of acquittal”. Such discretion must be utilized by the Trial Courts as an obligation of best efforts; once the Trial Court decides that the accused is not eligible to be acquitted as per the provisions of Section 232, CrPC, it must move on and fix hearings specifically for ‘defence evidence’, calling upon the accused to present his defense as per the procedure provided under Section 233, CrPC, which is also an invaluable right provided to the accused; Trial Courts need to balance other important considerations such as the right to a speedy trial. In this regard, the Bench cautioned that the provisions should not be allowed to be misused as delay tactics; the presiding Judge should follow the guidelines laid down by the Supreme Court while sentencing and imposing appropriate punishment. It was also observed that sometimes family members of the husband are roped in, even though they have no active role in commission of the offence and are residing at distant places and the Court need to be cautious in its approach in such cases.

THE CHIEF ELECTION COMMISSIONER OF INDIA V. M.R VIJAYABHASKAR & ORS., CIVIL APPEAL NO. 1767 OF 2021

Freedom of speech and expression extends to reporting the proceedings of judicial institutions as well.

A Bench of Justices Dr Dhananjaya Y Chandrachud and M R Shah held that the freedom of speech and expression extends to reporting the proceedings of judicial institutions as well and Courts are entrusted to perform crucial functions under the law. Their work has a direct impact, not only on the rights of citizens, but also the extent to which the citizens can exact accountability from the executive whose duty it is to enforce the law. Citizens are entitled to ensure that courts remain true to their remit to be a check on arbitrary exercises of power. The ability of citizens to do so bears a direct correlation to the seamless availability of information about what happens in a court during the course of proceedings. Therein lies the importance of freedom of the media to comment on and write about proceedings. The Bench observed that there is a need for judges to exercise caution in off-the-cuff remarks in open court, which may be susceptible to misinterpretation. Language, both on the Bench and in judgments, must comport with judicial propriety. Language is an important instrument of a judicial process which is sensitive to constitutional values. Judicial language is a window to a conscience sensitive to constitutional ethos. Bereft of its understated balance, language risks losing its symbolism as a protector of human dignity. The Bench further observed that the power of judicial review is entrusted to the High Courts under the Constitution and so high is its pedestal that it constitutes a part of the basic features of the Constitution, yet responsibility bears a direct co-relationship with the nature and dimensions of the entrustment of power. The Bench clarified that the oral observations during the course of the hearing do not constitute a part of the record.

DR JAISHRI LAXMANRAO PATIL V. THE CHIEF MINISTER & ORS. CIVIL APPEAL NO. 3123 OF 2020

No exceptional circumstances justifying the grant of reservation to Marathas in excess of 50% ceiling limit as a socially and economically backward class.

A Constitution Bench of the Supreme Court comprising Justices Ashok Bhushan, S.A. Nazeer, L. Nageswara Rao, Hemant Gupta and S. Ravindra Bhat, while striking down the Maratha quota, held there were no exceptional circumstances justifying the grant of reservation to Marathas in excess of 50% ceiling limit as a socially and economically backward class. The Bench also held that there was no need to revisit the 50% ceiling limit on reservation laid down by the 9-judge bench decision in Indra Sawhney v. Union of India, 1992 Suppl. (3) SCC 217. The Bench observed that neither the Gaikwad Commission nor the High Court have made out any situation for exceeding the ceiling of 50% reservation for the Marathas.

UTTAR PRADESH POWER TRANSMISSION CORPORATION LTD. AND ANR. V. CG POWER AND INDUSTRIAL SOLUTIONS LIMITED AND ANR., SPECIAL LEAVE PETITION (C) NO. 8630 OF 2020

The availability of an alternative remedy does not prohibit the High Court from entertaining a writ petition in an appropriate case.

A Bench of Justices Uday Umesh Lalit and Indira Banerjee held that the existence of an arbitration clause does not debar the court from entertaining a writ petition. The Bench observed that it is well settled that availability of an alternative remedy does not prohibit the High Court from entertaining a writ petition in an appropriate case. The High Court may entertain a writ petition, notwithstanding the availability of an alternative remedy, particularly where the writ petition seeks enforcement of a fundamental right; where there is failure of principles of natural justice or where the impugned orders or proceedings are wholly without jurisdiction or the vires of an Act is under challenge. The Bench also observed that it is now well settled by a plethora of decisions of the Supreme Court that relief under Article 226 of the Constitution of India may be granted in a case arising out of contract. However, the writ jurisdiction under Article 226, being discretionary, the High Courts usually refrain from entertaining a writ petition which involves adjudication of disputed questions of fact which may require analysis of evidence of witnesses. Monetary relief can also be granted in a writ petition.

LALIT KUMAR JAIN V. UNION OF INDIA & ORS., TRANSFERRED CASE (CIVIL) NO. 245/2020

The approval of a resolution plan does not ipso facto discharge a personal guarantor of a corporate debtor of her or his liabilities under the contract of guarantee.

A Bench of Justices L. Nageswara Rao and S. Ravindra Bhat held that the approval of a resolution plan does not ipso facto discharge a personal guarantor (of a corporate debtor) of her or his liabilities under the contract of guarantee. The release or discharge of a principal borrower from the debt owed by it to its creditor, by an involuntary process, i.e. by operation of law, or due to liquidation or insolvency proceeding, does not absolve the surety/guarantor of his or her liability, which arises out of an independent contract. The Bench held that the impugned notification was legal and valid. It was also held that approval of a resolution plan relating to a corporate debtor does not operate so as to discharge the liabilities of personal guarantors (to corporate debtors).

GAUTAM NAVLAKHA V. NATIONAL INVESTIGATION AGENCY, CRIMINAL APPEAL NO. 510 OF 2021

Under Section 167 CrPC, it will be open to courts to order house arrest in appropriate cases.

A Bench of Justices Uday Umesh Lalit and K.M. Joseph held that custody under Section 167 CrPC has been understood as police custody and judicial custody, with judicial custody being conflated to jail custody ordinarily. The concept of house arrest as part of custody under Section 167 has not engaged the courts, however, when the issue has come into focus, and noticing its ingredients, it involves custody which falls under Section 167. The Bench observed that under Section 167 in appropriate cases, it will be open to courts to order house arrest as well. The Bench observed that in order to house arrest a person, courts can consider criteria like age, health condition and the antecedents of the accused, the nature of the crime, the need for other forms of custody and the ability to enforce the terms of the house arrest.

A Bench comprising the Chief Justice N.V. Ramana and Justice Aniruddha Bose while summarising the law under Section 304­B, IPC, read with Section 113­B, Evidence Act, held that Section 304-B, IPC, must be interpreted keeping in mind the legislative intent to curb the social evil of bride burning and dowry demand; the prosecution must at first establish the existence of the necessary ingredients for constituting an offence under Section 304-B, IPC; once these ingredients are satisfied, the rebuttable presumption of causality, provided under Section 113-B, Evidence Act, operates against the accused; the phrase “soon before” as appearing in Section 304-B, IPC, cannot be construed to mean ‘immediately before’.

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Why justice is delayed

Though our judiciary has achieved remarkable feats in the past 70 years, a gap between ideal and reality is becoming wider and clearer over the years. Slow delivery of justice, the appointment of judges enmeshed in controversies, ineffective disciplinary mechanisms are some of the major problems our justice system is facing.
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PRADYUMN SINGH

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The Indian judicial system, as we know today, incorporates the Supreme Court, high courts, and various subordinate courts. It began functioning on 28 January 1950. Since then, our judicial system has been able to prove itself as moral conscience keeper, upholding the rights of all citizens irrespective of their class, gender, status, religion, and on several occasions, it has also saved the democratically established government itself. Even though our nation’s judiciary has achieved remarkable feats in 70 years, the gap between ideal and reality is becoming wider and clearer over the years. Slow delivery of justice, the appointment of judges enmeshed in controversies, and ineffective disciplinary mechanisms are some of the major problems our justice system is facing. The question of delay in the administration of justice has been addressed in the past but even now there has been no considerable change and the ironic thing is that today in all the other avenues of this modern civilisation, speed and efficiency are of great significance. Delayed justice, if justice at all, has become the basic premise of Indian judicial system. There are almost 25 million pending cases all over the court. According to experts these numbers are likely to grow with the growing population unless and until something is done to tackle this. The objective of this article is to identify and study the gridlocks leading to such delay and inefficiency and to suggest effective measures to correct them.

THE BLIND SPOT: CRIMINAL JUSTICE

The criminal justice system has been revamped by hundreds of thousands of pending cases and is also skewed against the poor or unprivileged section of the society. Even though justice is served it still takes several years which highlights the deficiencies of the adjudicating authority. The constitution of India grants every citizen certain fundamental rights , the breach of which lead to legal consequences, but still, there are thousand rape cases are never investigated ,because of the belief that court may takes 8-10 year to decide the matter. This is an ongoing condition of Indian judiciary. For example in the Nirbhaya Rape cases, even after the whole nation knew that those six people were guilty of rape and needed to be punished it still took the court 8 precious year of victim’s mother’s life to decide whether they are guilty or not. The Mohammad Harrris Nalapad case in Bengaluru took into consideration the fact that the chargesheet was never filled within the stipulated 60 days period. Evidence has also been tampered with in several cases due to political pressure or sometimes due to callousness.

ROLE OF THE POLICE

It is the police who set criminal justice into motion by initiating an investigation. A police officer handling law and order duties may not be able to pay adequate attention to the specialised field, hence law and order and investigation duties must be separated, which the supreme court has recommend in its order on police reforms though practical difficulties come in the way of its full implementation a specialised unit can be started in every district to investigate crimes of a grave nature such as murder and rape. Often the police delay filing of chargesheet. Sometimes chargesheet returned for rectification, forensic reports too are delayed as just few forensic labs exist. More labs should be opened with capabilities for cyberforensic, DNA testing, handwriting comparison and so on, every district should have one. Even after the chargesheet is submitted in the court, there is considerable delay in taking the cases on file and committing them to the court. Special court exclusively for the trial of heinous offences such as murder and dacoity must be set up with powers to take cognisance of offences directly and conduct trial on day to day basics. Many provisions of the criminal procedure code enable the accused to delay trial. Such provision intended to provide every opportunity to the accused to defend themselves are often used to delay and scuttle trials. Once the court takes cognizance of a case, it should be the bounden duty of the accused to appear for the trial. The accused should be put to jeopardy if they try to abscond. The accused adopt many delaying tactics absenting themselves one after the other without receiving copies of documents relied upon by the prosecution; failing to appear to give explanation for the charges and filing discharge petition one after the other and later going on appeal. When trial finally starts the witnesses are first examined but the defence counsel defers cross examination. The accused then seek repeated adjournments by filling petitions under section 317 of c.r.p.c examination of witnesses questioning of the accused and so too are deferred. Another method is to abscond and remain untraceable for a long time. Warrants are then issued against the accused If one absconding accused is secured and produced before the court, the co-accused will abscond one by one. After closure of prosecution the defence counsel invariably represents that they propose to examine the defence witnesses but after many adjournments, they will say there are no such witnesses. Likewise the oral arguments are delayed by giving excuses such as personal inconvenience of counsel.

SOME MAJOR OBSTACLES AND DEADLOCKS

It is unfortunate that despite the Indian judiciary’s many successes, it is suffering from several structural problems that hamper its effective and efficient administration of justice. Unlike in the past this structural mess can be understood and analysed in a better way in present times, due to better availability of data. There are numerous reasons behind the law’s delay and ineffectiveness. The inadequate number of judges as well as courts in the country is one of the primary causes of delayed disposal of cases. In the year 2000, unlike 107 judges to every million in the US, 75 in Canada, India only had 10.5 per million people. Incompetent and inefficient judges are another such reason. In Indian courts it can be easily seen that there is a habit of taking adjournment by the majority of the lawyers for their own benefit. This is one of the big reasons for such a huge number of pending cases in India. The legal costs and all the expenses that a person has to incur to commence a legal action, even for a small claim any legal action possible. The procedure and formalities are so complex and full of technicalities that it hinders the litigants at every stage. A lot of time is wasted on jurisdictional arguments sufficiency of notices; causes of action and other procedural issue .And even after the court of law has given the initial judgements the number of counter appeal in higher courts iis also one of the reasons for delay in imparting justice

There is another reason for the ineffectiveness in the working of our judiciary like many Supreme court and high court judges being made to study various commission reports and recommendations which in turn hamper the working of our courts. Political affiliation and sluggish tactics committed by judges also defeat the true essence of the justice system. One of the biggest reason for the delay in our courts in our country’s diverse culture, language, religion sentiments, customs and practices which pose an unsettling issue in front of our courts in i.e whenever a matter is addressed before a court of law, the rule to be applied is capable of hundreds and thousands of interpretations which prevents the judge making a straightforward and quick decision is not so complicated matters

AMENDMENTS TO THE LAWS TO OVERCOME THESE PROBLEMS

The following amendments in the C.R.P.C need to be carried out. Section 207 may be amended to furnish copies to counsel when the accused is absent. Section 228 and 240 may be amended to get explanation from counsel when the accused is absent. Under section 227 and 239 a time limit of 30 days from the date of receipt of copies may be set for filling a discharge petition . Section 317 may be amended to enable the court to examine witnesses in the absence of the accused and their counsel. In the revisional power under section 397 and inherent powers under section 482 necessary provision may be inserted so that the other party heard before passing interim orders on the investigation and prosecution. The bail provision under section 436and 437 may be amended so that the accused who violate bail conditions can be detained till the completion of the trial. Provision may be included in the bail bond to obtain the consent of the accused to conduct the trial in his absence in case of breach of conditions. Some of the frequently reported offences under section 294[b] 147,148,279,324,384 and 498A of the Indian Penal code which are not every serious in nature can be brought under compoundable offences.

SUGGESTIVE MEASURES FOR THE WAY AHEAD

The necessary changes cannot be brought in one days, but surely they will come if we strive for them. Despites many loopholes and deadlocks a change needs to take place to reform the justice system in India. The number of judges should be increased in the High court as well as the Supreme Court. Although we have highly qualified judges, their strength has failed to administer justice. As discussed earlier, we are far behind in the appointment of judges as compared to other developed nations, which is the main reason for inefficiency and effectiveness

A Fast Track court should be set up and also there is an urgent need to increase the number of tribunals, judicial and quasi-judicial bodies. Each tribunal must be categorized according to the specialization of its judges which reduces the burden of the courts.

A major shift needs to be made from adjourning authority to adjudicating authority and advocates who seek delay excessively must be condemned severely. People should be made aware of the Alternatives Disputes Resolution system like mediation, arbitration conciliation, etc, which ensure speedy justice to trivial cases and screening of matters that require court assistance. In addition, the number of appeals should be capped and the court must extensively use video conferencing to examine witnesses

CONCLUSION

Justice is the foundational goal of any civilization. Thus, it is imperative for the judicial system to perform its duty with due diligence so that society can strive for peace, harmony and progress. Article 39A of the Indian Constitution shines light upon the concept of free legal aid to poor and weaker sections of society, but keeping the present state of mind, it has failed to achieve significance. The judges are considered equivalent to god, hence it their duty to ensure that no guilty person escapes unpunished. Since our independence, we have suffered a lot due to the excruciating slow pace, but now is the time when reformations must be done in the judicial system. “Justice delayed is justice denied’’ should be the major aim of every adjudicating authority.

If this is not so, then how much we develop economically or technologically doesn’t matter because we will never be a developed nation.

It is unfortunate that despite the Indian judiciary’s successes, it is suffering from several structural problems that hamper its effective and efficient administration of justice. Unlike in the past this structural mess can be understood and analysed in a better way in present times, due to better availability of data. There are numerous reasons behind the law’s delay and ineffectiveness. The inadequate number of judges as well as court in the country is one of the primary causes of delayed disposal of cases. In the year 2000, unlike 107 judges to every million in the US, 75 in Canada, India only had 10.5 judges per million people.

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