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Allahabad HC acquits rape accused after 20 years in jail

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It is a matter of national shame, national disgrace and national humiliation that a man had to suffer without committing any offence 20 years of incarceration in connection with a false rape case filed against him by a woman owing to an alleged land dispute. Why is it that a woman who files a false rape case is not similarly made to undergo rigorous imprisonment for at least the same period which the man had to undergo? Why our lawmakers most shamelessly, senselessly and stupidly not do anything on this score?

It must be mentioned here that the Allahabad High Court on January 28, 2021 in a latest, learned, laudable and landmark judgment titled Vishnu v. State of UP in Criminal Appeal No. 204 of 2021 (From Jail) (Defectivve Appeal No. 386 of 2005) came to the rescue of a man, after he wrongly suffered 20 years of incarceration in connection with a false rape case filed against him by a woman owing to an alleged land dispute. A Division Bench of Justices Dr Kaushal Jayendra Thaker and Gautam Chowdhary while passing order for release of one Vishnu, set aside the conviction order passed by a Trial Court in 2003, under Sections 376 and 506 of IPC and Sections 3(2)(v) read with Section 3(1)(xii) of the Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, 1989. Very rightly so!

To start with, the ball is set rolling in para 1 of this notable judgment authored by Justice Dr Kaushal Jayendra Thaker for himself and Justice Gautam Chowdhary wherein it is put forth that, “Since the date of occurrence of the incident, i.e. 16.9.2000, the accused is in jail i.e. since 20 years. Most unfortunate, aspect of this litigation is that the appeal was preferred through jail. The matter remained as a defective matter for a period of 16 years and, therefore, we normally do not mention defective appeal number but we have mentioned the same. This defective conviction appeal was taken up as listing application was filed by the learned counsel appointed by Legal Services Authority on 6.12.2012 with a special mention that accused is in jail since 20 years.”

On the face of it, the Bench then brings out in para 2 that, “By way of this appeal, the appellant has challenged the Judgment and order 24.2.2003 passed by court of Sessions Judge, Lalitpur in Special Case No.43 of 2000, State Vs. Vishnu arising out of Special Case No. 43 of 2000, under Sections 376, 506 of IPC and 3(1)(xii) read with Section 3(2)(v) of Scheduled Casts and Scheduled Tribes ( Prevention of Atrocities) Act, 1989, Police Station Mehroni, District Lalitpur whereby the accused-appellant was convicted under Section 376 IPC and sentenced to imprisonment for a period of ten years with fine of Rs.2,000/-, and in case of default of payment of fine, to undergo further rigorous imprisonment for six months; he was further convicted under Section 3(2)(v) read with Section 3(1)(xii) of Scheduled Casts and Scheduled Tribes ( Prevention of Atrocities) Act, 1989 (hereinafter referred to as ‘S.C./S.T. Act, 1989’) and sentenced to imprisonment for life with fine of Rs.2,000/- and in case of default of payment of fine, to undergo further rigorous imprisonment for six months; and he was further convicted under Section 506 IPC and sentenced to undergo rigorous imprisonment under Section 506 IPC. All the sentences were to run concurrently as per direction of the Trial Court.”

To put things in perspective, the Bench then points out in para 3 that, “The brief facts as per prosecution case are that on 16.9.2000 at about 2:00 p.m., the prosecutrix was going from her house in village Silawan, P.S. Mehroni to Haar (fields), when she reached near mango tree named ‘black mango tree’ situated on the road leading to Zaraia accused-Vishnu son of Rameshwar Tiwari who had hidden behind the bushes, caught hold of her with bad intention and behind the bushes, he committed rape with her by pressing her mouth and went away extending threat that if any report is lodged at the police station or this fact is divulged to anyone, he will kill her. She went back to the house and disclosed the whole incident to her family members who did not go to the police station due to threat and went to Lalitpur, and on 19.9.2000 she along with her father-in-law Gulkhai and husband Bragbhan hiding themselves went to the police station for reporting the said incident.”

As it turned out, the Bench then observes in para 15 that, “We are unable to convince ourselves with the submission made by learned AGA for State that she has been a victim of atrocity as well rape and, therefore, the accused should not be leniently dealt with.”

Of course, the Bench then states in para 27 that, “The evidence as discussed by learned Judge shows that the mere fact that no external marks of injury was found by itself would not throw the testimony of the prosecutrix over board as it has been found that the prosecutrix had washed out all the tainted cloths worn at the time of occurrence as she was an illiterate lady. The learned Judge brushed aside the fact that report was lodged three days later. We also do not give any credence to that fact and would like to go through the merits of the matter.”

Be it noted, it is then elucidated in para 29 stating that, “We venture to discuss the evidence of the prosecutrix on which total reliance is placed and whether it inspires confidence or not so as to sustain the conviction of accused. There were concrete positive signs from the oral testimony of the prosecutrix as regards the commission of forcible sexual intercourse. In case of Ganesan Versus State Represented by its Inspector of Police, Criminal Appeal No. 680 of 2020 ( Arising from S.L.P. ( Criminal ) No.4976 of 2020) decided on 14.10.2020 wherein the principles of accepting the evidence of the minor prosecutrix or the prosecutrix are enshrined the words may be that her testimony must be trustworthy and reliable then a conviction based on sole testimony of the victim can be based. In our case when we rely on the said decision, it is borne out that the testimony of the prosecutrix cannot be said to be that of a sterling witness and the medical evidence on evaluation belies the fact that any case is made out against the accused.”

It is also worth noting that it is then stated in para 30 that, “The evidence of Dr. Smt. Sarojini Joshi, Medical Officer, PW-4 C.H.C., Mehroni who medically examined the prosecutrix on 19.9.2000 at 8:45 p.m., found no external or internal injury on the person of the victim. On preabclomen examination, uterus size was 20 weeks and ballonement of uterus who was present. On internal examination, vagina of the victim was permitting insertion of two fingers. Internal uterine ballonement was present. The victim complained of pain during internal examination but no fresh injury was seen inside or outside the private part. Her vaginal smear was taken on the slide, sealed and sent for pathological investigation for examination. The doctor opined both in occular as well as her written report that the prosecutrix was having five months pregnancy and no definite opinion about rape could be given.”

Furthermore, it is then stated in para 31 that, “In the x-ray examination, both wrist A.P., all eight carpal bones were found present. Lower epiphyses of both wrist joints were not fused. All the bony epiphyses around both elbow joints were fused. In the supplementary report, the doctor opined that no spermatozoa was seen by her and according to the physical appearance, age of the victim was appearing to be 15 to 16 years and no definite opinion about rape could be given.”

What is even more glaring is thus stated in para 32 that, “We find one more fact that despite allegation that rape is committed as alleged by the prosecutrix, there are no injuries on the private part of the lady, who is a fully grown up lady and who was pregnant and is said to have been threshed. Further, there was a motive on the part of complainant that there was land dispute between the parties. In statement of prosecutrix in her cross examination on 23.5.2002, she stated that it was her husband and father-in-law, who had lodged the compliant. Thereafter, learned Judge closed the cross examination of PW-1 and recorded it further on 24.5.2002. The First Information Report is also belatedly lodged by three days is the submission of the counsel Amicus Curiae appointed by High Court.”

Adding more to it, the Bench then makes it known in para 33 that, “As far as the medical evidence is concerned, there are three emerging facts. Firstly, no injury was found on the person of the victim. We are not mentioning that there must be any corroboration in the prosecution version and medical evidence. The judgment of the Apex Court rendered in the case of Bharvada Bhogin Bhai Hirji Bhai Versus State of Gujarat, AIR 1983 SCC page 753, which is a classical case reported way back in the year 1983, on which reliance is placed by the learned Session Judge would not be helpful to the prosecution. The medical evidence should show some semblance of forcible intercourse, even if we go as per the version of the prosecutrix that the accused had gagged her mouth for ten minutes and had thrashed her on ground, there would have been some injuries to the fully grown lady on the basis of the body.”

While still continuing further, the Bench then adds in para 34 that, “In our finding, the medical evidence goes to show that doctor did not find any sperm. The doctor categorically opined that no signs of forcible sexual intercourse were found. This was also based on the finding that there were no internal injuries on the lady who was grown up lady.”

Needless to say, it cannot be dismissed lightly that it is then pointed out in para 35 that, “The factual data also goes to show that there are several contradictions in the examination-in-chief as well as cross examination of all three witnesses. In her examination-in-chief, she states that incident occurred at about 2:00 p.m. but nowhere in her ocular version or the FIR, she has mentioned that she was going to the fields with lunch for her father-in-law. This statement was made for the first time in the ocular version of the husband of the prosecutrix i.e. PW-3 and that it was father-in-law who narrated incident to the police authority. The father-in-law as PW-2 in his testimony states that he was told about the incident by her daughter-in-law (Bahu) on which he complained some villagers about the accused who denied about the incident, therefore, they decided to go to the police station on the next day but the police refused to lodge the report on the ground that no one was present in the police station, therefore, they went on third day of the incident to lodge the FIR. After this, again he contradicts his story in his own statement recorded on cross-examination on the next date stating that the incident was told by his daughter-in-law to his wife who told him about the same. There is further contradiction in the statements of this witness. In examination-in-chief he states that the parties called for Panchayat but there is nothing on record that who were the persons called for Panchayat. If the pregnant lady carries fifth month pregnancy is thrashed forcefully on the ground then there would have been some injury on her person but such injuries on her person are totally absent.”

To be sure, it would be imperative to mention here that it is then stated in para 36 that, “For maintaining the conviction under Section 376 Cr.P.C., medical evidence has to be in conformity with the oral testimony. We may rely on the judgment rendered in the case of Bhaiyamiyan @ Jardar Khan and another Versus State of Madhya Pradesh, 2011 SCW3104. The chain of incident goes to show that the prosecutrix was not raped as would be clear from the provision of section 375 read with Section 376 of IPC.”

What also needs noting is that it is then stated in para 37 that, “The judgment relied on by the learned Amicus Curiae for the appellant will also not permit us to concur with the judgment impugned of the learned Trial Judge where perversity has crept in. Learned Trial Judge has not given any finding as to fact as to how commission of offence under Section 376 IPC was made out in the present case.”

Of particular significance is what is then stated in para 38 that, “Section 3(2)(v) of Scheduled Castes and Scheduled Tribes ( Prevention of Atrocities) Act, 1989 is concerned, the FIR and the evidence though suggests that any one or any act was done by the accused on the basis that the prosecutrix was a member of Scheduled Castes and Scheduled Tribes then the accused can be convicted for commission of offence under the said provision. The learned Trial Judge has materially erred as he has not discuss what is the evidence that the act was committed because of the caste of the prosecutrix. The sister-in-law of the prosecutrix had filed such cases, her husband and father-in-law had also filed complaints. We are unable to accept the submission of learned AGA that the accused knowing fully well that the prosecutrix belonged to lower strata of life and therefore had caused her such mental agony which would attract the provision of Section 3(2)(v) of the Atrocities Act. The reasoning of the learned Judge are against the record and are perverse as the learned Judge without any evidence on record on his own has felt that the heinous crime was committed because the accused had captured the will of the prosecutrix and because the police officer had investigated the matter as a atrocities case which would not be undertaken within the purview of Section 3(2)(v) of Atrocities Act and has recorded conviction under Section 3(2)(v) of Act which cannot be sustained. We are supported in our view by the judgment of Gujarat High Court in Criminal Appeal No.74 of 2006 in the case of Pudav Bhai Anjana Patel Versus State of Gujarat decided on 8.9.2015 by Justice M.R. Shah and Justice Kaushal Jayendra Thaker (as he then was).”

No doubt, it is then rightly stated in para 39 that, “Learned Judge comes to the conclusion that as the prosecutrix belonged to community falling in the scheduled caste and the appellant falling in upper caste the provision of SC/ST Act are attracted in the present case.”

What also needs to be noted is that it is then brought out in para 40 that, “While perusing the entire evidence beginning from FIR to the statements of PWs-1, 2 and 3 we do not find that commission of offence was there because of the fact that the prosecutrix belonged to a certain community.”

As a corollary, the Bench then holds in para 42 that, “In view of the facts and evidence on record, we are convinced that the accused has been wrongly convicted, hence, the judgment and order impugned is reversed and the accused is acquitted. The accused appellant, if not warranted in any other case, be set free forthwith.”

Damningly, the Bench then states in para 45 that, “We find that in the State of U.P. even after 14 years of incarceration does not even send the matter to the Magistrate for reevaluation the cases for remission as per mandate of Sections 432 and 433 of Cr.P.C. and as held by Apex Court in catena of decisions even if appeals are pending in the High Court. The accused in present case is in jail since 2000.”

More damningly, the Bench then observes in para 47 that, “Section 433 and 434 of the Cr.P.C. enjoins a duty upon the State Government as well as Central Government to commute the sentences as mentioned in the said section. We are pained to mention that even after 14 years of incarceration, the State did not think of exercising its power for commutation of sentence of life imprisonment of the present accused and it appears that power of Governor provided under Article 161 of the Constitution of India are also not exercised though there are restriction to such power to commute sentence. The object of Sections 432 read with Section 433 of the Cr.P.C. is to remit the sentence awarded to the accused if it appears that the offence committed by him is not so grave. In our case, we do not see that why the accused is not entitled to remission. His case should have been considered but has not been considered. Remission/ commutation of sentence under Sections 433 and 434 of the Cr.P.C. is in the realm of power vested in the Government. The factual scenario in the present case would show that had the Government thought of taking up the case of the accused as per jail manual, it would have been found that the case of the appellant was not so grave that it could not have been considered for remission / commutation.”

Most damningly, the Bench then holds in para 48 that, “Most unfortunate, aspect of this litigation is that the appeal was preferred through jail. The matter remained as a defective matter for a period of 16 years and, therefore, we normally do not mention defective appeal number but we have mentioned the same. This defective conviction appeal was taken up as listing application was filed by the learned counsel appointed by Legal Services Authority on 6.12.2012 with a special mention that accused is in jail since 20 years.”

No wonder, the Bench then rightly observes in para 49 that, “Seeing this sorry State of Affairs, we request the Registrar (Listing) through the Registrar General to place the matter before Hon’ble the Chief Justice that periodical listing of matters be taken up in the High Court so that those who are in jail for more than 10 or 14 years, where the appeals are pending, may at least get their appeal heard which are mainly jail appeals.”

Finally, it is then held in the last para 52 that, “A copy of this judgment be sent to the Law Secretary, State of U.P. who shall impress upon the District Magistrates of all the districts in the State of U.P. to reevaluate the cases for remission after 14 years of incarceration as per mandate of Sections 432 and 433 of Cr.P.C. even if appeals are pending in the High Court.”

To sum up, it is high time that a major surgery is done of the judicial system prevailing in lawless states like UP which accounts for maximum pending cases in India and Bihar. When there can be 4 High Court Benches for peaceful states like Maharashtra and Assam, 3 for Karnataka and two for Madhya Pradesh and West Bengal then why just one Bench for UP and here too West UP where maximum cases of crimes take place accounting for more than half of the total pending cases in UP has none and so also Bihar has none even though PM Narendra Modi represents UP from Varanasi and Law Minister Ravi Shankar Prasad from Patna still why no effort is made to create more High Court Benches in these two States? This is the real tragedy!

Maharashtra tops in Justice Index List as it is doing very good and still has 4 High Court Benches. The former UP Chief Justice DB Bhosale who hails from Maharashtra in his capacity as Chief Justice of UP had said that in Maharashtra women can venture out even in night alone which even I have seen myself as I did my LLB from Pune but in UP women is just not safe even with family and that too in national highway where she was assaulted brutally which I am also aware of as I stay here in Meerut! What a crowning irony that still UP has least benches in India and no wonder figures in bottom of Justice Index List and same is the case with Bihar! This despite the irrefutable fact that Justice Jaswant Singh Commission had historically recommended 3 High Court Benches for UP but not a single created for UP even though Benches were created for other states like Maharashtra in Aurangabad, Madurai in Tamil Nadu and Jalpaiguri in West Bengal! This is the real rub! The 230th Law Commission Report made in 2009 recommended for more high court benches not just for Maharashtra or Karnataka alone but for big states like UP and Bihar also but Centre is clearly culpable for not doing anything on this score for which it must hang its head in shame as it is not ready ever to do anything on this score! This case is the biggest testimony and biggest reminder that a major surgery of our decrepit, overburdened and moribund judicial system that exists especially in UP and Bihar is the crying need of the hour and it cannot be put in cold storage any longer! How long will the most populated State that is UP and Bihar be taken for granted? How long will the just demand for more High Court Benches still be ignored by the Centre? This alone explains why Rahul Gandhi terms people of South more mature as we saw how in Karnataka two more High Court Benches were created for Dharwad and Gulbarga for just 4 and 8 districts just because Centre could not resist their unrelenting pressure whereas on contrary for more than 20 districts of West UP not a single Bench is being created even though Justice Jaswant Singh Commission had recommended the same! What can be a bigger shame and more despicable than this which is the worst violation of Article 14 which talks about right to equality! A single High Court Bench for UP was created by Jawaharlal Nehru in 1948 in Lucknow just 200 km away from Allahabad where High Court is located but no PM dares to create even a single Bench in any hook and corner of UP other than Lucknow! This is the real tragedy! Even holy cities like Kashi, Ayodhya and Mathura which is also in West UP are considered “worthless cities” not fit to be given a High Court Bench! This is what pinches me most! Centre’s conduct on this key issue of creating more Benches in UP and Bihar is most deplorable, despicable and dangerous which cannot be justified under any circumstances! It is high time and Centre must act but till now Centre has chosen to emulate the past government’s dastardly stand on this which is most hurting to say the least! Most shocking!

Postscript: Even as I am writing this news is pouring in that goons who first had misbehaved with a girl later killed her father openly in Hathras in West UP after coming out from jail. Such instances are galore. The lawyers of 22 districts of West UP are still on strike since last many days which will continue till March 9 as a senior and eminent lawyer named Omkar Singh Tomar whom I knew as a very warm person always carrying a smile on his face had committed suicide in Meerut under suspicious conditions. When will Centre act? When will it wake up?

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Legally Speaking

Pre-trial role of the police: Exhaustive or insufficient?

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From the data and statistics collected from, United Nations Office on Drugs and Crime, latest available till 2013, says there are 138 police personnel per lakh of the population in India. This has been substantiated by the Indian Parliament in 2014, that there was shortage of 5.6 lakh police personnel against the sanctioned strength of 22.8 lakh, which clearly takes the figures to 25% vacancy. State police has 24% vacancies in January 2016, as the strength sanctioned is 181 police personnel per lakh people. These statistics serve for two crucial purposes, firstly in questioning the qualitative work function of the police, secondly in analysing the work function of the police, in all the domains. Our Police force, is legally regulated by Police Act, 1861 and Modern Police Act,2015, primarily for executing its functions. But there are certain duties and functions which police is bound to perform in the light of Cr.P.C, which is again in consonance to their primary source of regulation. In this paper, the author has tried to analyse the duties and role of police, primarily pertaining to the Judicial functions, which will also ensure the exhaustive analysis of the checks and control, which serves as the threshold for the police personnel in the exercise of their duty. This paper, is an attempt to link the work function of police, pertaining to the police acts and Cr.P.C by taking into account various factors like modernisation, training prospects, pre-trail functions in a coherent way.

CHAPTER- 1

DUTIES OF POLICE IN THE POLICE ACTS

“ Independent India must choose, whether we will have a people’s police or a ruler appointed police, or in other words whether the people should rule or the parties shall rule. The Constitution has laid down that the people should rule, so the police must also be the people’s police”

– Khosla Commission in 1968

Under our highest organic law of the land, police is kept under the domain to State list, so it is the duty of the state to provide efficient and coherent police force, for proper policing. All the state polices are regulated by Indian Police Act,1861. The duties of the police enshrined under the Act, basically finds itself within the clutches of the test of time, with respect to colonialism vs democracy.

Section 23 of the Indian Police Act, clearly defines the general role and duty of the police officer and section 20 of the act, provides for the restriction which acts as a check and balance on the unfettered discretion of the police when exercising their duty. The changing times, drew great attention of the esteemed law makers of our country and for maintaining and preserving the social order and tranquillity of our state, so a new act was passed, Model Police Act of 2006, which exhaustively discusses the roles and duties of the police, in all the fronts.

The general duties of the police has been incorporated under section 57 of the Model Police Act, 2006, which brings out the general essence and theme of the concept policing, enshrined in our laws. In the present research, it is important to pay much heed to section 57(e), 57(f) and 57(g) of the Model Police Act, which basically deals with the role of Police in the trial procedures. Section 57(e), deals with the dynamic role of the police, which is really necessary for curbing the commissioning of the crimes and any other opportunity associated with such commission of the crime. Section 57(f) deals with the duty of the police, to accurately register all the complaints brought to their notice, by any form, right from in-person representation to the digital media information. In this regard it is pertinent to note, how the Hon’ble Rajasthan High Court, interpreted the idea, on telephonic FIRs, in the case of Tehal Singh v State of Rajasthan, by virtue of which the main essence of section 154 Cr.P.C has been maintained. Section 57(g) of the act, it deals with the duty of the police with regards to registration and investigation of the cognizable offences. This also furnishes, that free copy of the FIR to be given to the complainant. This provision of Cr.P.C is in full consonance with the spirit of section 154(1), 154(2) and section 156(1) of the Cr.P.C. All these changes were brought in the initial police act, in accordance to the guidelines and remarks made by Hon’ble Supreme Court in the case of Prakash Singh v Union of India.

(The essential functions of the police pertaining to the trial, which has been given in the police acts, has been discussed in the next chapter)

CHAPTER-2DUTIES OF THE POLICE UNDER CRPC

1) ARREST AND DETENTION IN THE CUSTODY

For prevention and detection of crimes, a police officer has the power and duty to arrest the accused on the reasonable grounds or reasonable suspicion or with appropriate orders(warrant of arrest). This has been enshrined under section 41 of the Cr.P.C, also the distinct power given to police under section 42 of the act is necessary for the further investigation and trial procedures. In case of the cognisable offence, a police can arrest the alleged culprit, without warrant and can investigate into the case, without any directions from the magistrate. In the case of non-cognizable offence there is an exception to the rule, as enshrined by section 42 of the act. The duties and procedure for the arrest should be made in consonance to section 41-B, 41-C and 41-D. Section 41-D, empowers the arrested to meet the advocate of his choice, during the process of interrogation and in regards to this Supreme Court has given some guidelines for arresting a judicial officer, which are not too exhaustive, in the case of Delhi Judicial Service Assn. v State of Gujarat. Also, section 57 empowers the police for the search of the place, who is sought to be arrested, which is further fabricated by section 51 which gives the police, power to search for the arrested person and if found something police officer can seize them under section 102 for producing it in the court and further under section 52, gives power to seize offensive weapons. According to section 53, it is the duty of the police to get the medical examination of the accused by the medical practitioner and Supreme Court held in the case of State of Bombay v Kathi Kalu Oghad, held that section 53 is not violative of article 20(3). It is further extended by section 54, where the arrested is examined by a registered medical practitioner.

By virtue of section 50(1), it is the duty of the police officer to inform the arrested person, his ground for arrest, which is in true consonance with the article 22(1) of the Constitution, which is a precious right as held in the case of Udaybhan Shuki v State of U.P. By virtue of section 50(2), it is again the duty of the police to inform whether the person arrested has right to bail, if arrested for non-bailable offence. In the case, Joginder Kumar v State of U.P and D. K Basu v State of W.B made it obligatory on the part of the police, to inform the relatives or friends of the arrested person and also to make an entry in a register maintained by the police, this has been incorporated with a view to maintain the dignity of the rights provided under article 21 and 22 of the Constitution. Under section 56 and 76 of the act, it is the duty of the police to take the arrested to the magistrate without any delay, which has been specified and formulated well in the section 57, which provides for the time threshold of 24 hours, with an exception as explained under section 167. The purpose for not detaining the arrested for more than 24 hours has been explained in the case of Mohd. Suleman v King Emperor and the Hon’ble Supreme Court portrayed this provision to keep a check on the healthy investigation by the police, and directed to be observed positively. Apart from this, as per the requirements of section 62, the procedure for the serving of the summons has to be done by a police officer in general, otherwise specified by the Courts. By virtue of section 79, the police officer has the power to arrest outside the jurisdiction, with the warrant of arrest.

2) PRE-TRIAL: INVESTIGATION BY POLICE

After the FIR is lodged, as per the ingredients of section 154, it is the duty of police under 154(1) to register the FIR, as held in the case of Lalita Kumari v Govt. of U.P, pertaining to any cognizable offence and such information must be definite and not vague. Further as per the mandatory provision of the section 154(2), it is the duty of the police to furnish the copy of FIR to the complainant, whose exception has been explained categorically in the case of State v Gnaneswaran. In the case of non-cognizable offences, complying with the provisions of section 155(1), a police officer cannot proceed to investigate without the orders of the magistrate and its non-compliance may be a material cause in vitiating the ultimate proceedings, as well as it may be violative of Article 21. When the police officers gets an order from the magistrate for investigating a non-cognizable offence, the police officers, save as powers to arrest gets the power to arrest as in the case of cognizable offence. The police officer, by virtue of section 156, gets power to investigate the cognizable offences, where under 156(3) a magistrate has the power to order investigation, only at the pre-cognizance stage. The right of the police officer for investigation under section 156 is unfettered and cannot be controlled by Judiciary. Another important procedural aspect is the prompt lodging of the FIR is necessary for recording the spontaneous version of the case, hence it is the duty of the police to do the same. While analysing the section 156, we find the concept of cognizance by magistrate under section 190. The police in complaints sent to them under section 156(3) may make the investigation of the offence and send a report to the Magistrate under section 173. It will deemed to have been taken on the police report not on the original complaint. A magistrate may take cognizance of the offence under section 190, and instead of ordering investigation under section 156(3) can examine the complainant under section 200, and if the magistrate finds the matter fit, can postpone the issue of process against the accused and can either inquire into the case himself, or direct an investigation by the police officer, as to whether there is sufficient ground for proceeding. When police officer receives the complaint under section 202 for investigation and report, he has all the powers which is required for the investigation, similar to his power in case of an offence invoked via section 154. Further by virtue of section 158, the duty of the police officer pertaining to the submission of report, for which the state government appoint the senior police officer for the same.

In case of the cognizable offence, after the lodging of the FIR, the police officer shall proceed to the spot, to investigate and after necessary discovery, may make arrest, as per section 157(1). Moving ahead with the procedural aspect, there is the power of police under section 160(1), to require the attendance of the witness maintaining the conditions specified therein. There is a proviso attached to the section pertaining to person below 15 years or age and person above 65 years of along with woman or a man who is physically disabled. In Queen Empress v Jogindra Nath Mukerjee, it was held magistrate cannot issue any process compelling a person to attend before a police magistrate. Further section 161 and 162 gives the power to the police, for examination of the witness. According to section 161(1), oral examination of the person acquainted with the facts and circumstances of the case. As per the provision, it is the legal duty of the person to attend the investigating officer, if required, as intentional omission is an offence under section 174 IPC. In Pushma Investment (P) Ltd. v State of Meghalaya, Gauhati High Court has held, police can require witness to attend the police station, if they reside within the limits of the station or the adjoining police station. Section 161(1) lays down certain prescriptions, to be followed pertaining to the rank of the police officer, which must be specified by the State Government, must be duly followed. Analysing the flavour of the section, we can understand that the person, who is being examined must answer all the question correctly, but this would not bound him as such, which can invoke criminal liability against himself. Furthermore, in the case of Gian Singh v State(Delhi Admn.), it was held that police can question the accused even on his right to silence, with due permission of the magistrate, in the judicial custody. While interrogation, if a person furnishes voluntary false information to the police, or gives false evidence can draw penal action under section 193 and 177 of IPC respectively. In this context, Nandini Satpathy v P.L Dani, case is extremely important, which says area covered by section 161(2) and Article 20(3) is substantially the same and the 161(2) of Cr.P.C is a parliamentary gloss on the constitutional clause. The Supreme Court held that, a person is bound to answer where there is no clear tendency to criminate. The concept of “Compelled Testimony” was brought into the picture, and in the case, some guidelines were framed which were to be followed. The most important one was that the accused must be allowed to meet his lawyer, during the interrogation, which was also held in the D.K Basu v State of W.B. In one of the guidelines of the Satpathy’s case, it was held, police has the duty to invariably warn and record the fact, about the right to silence against self-incrimination and after the examination of the accused, the police officer must take him to the magistrate or any responsible person(in case of absence of his lawyer).

Finally, all these guidelines were not binding in nature, but were necessary for bringing out the prudent police policy. The section 161(3) gives wide power to the police to record or not to record any statement during the investigation. Now section 162 and 163, broadly talk about the validity and admissibility of the nature of statements recorded by the police under section 161. Section 162, prohibits signing of any statement obtained by the police, during the course of investigation, supports that it protects the accused from zealous police officers and untruthful witnesses. This provision is time specific and is applicable only during the time of investigation, with an exception to the dying declaration which is admissible under section 32 of the Indian Evidence Act. Therefore, the statements not reduced in writing by the police cannot be used as contradiction, under section 145 of the Evidence Act. The Court cannot rely on the confessions of the accused and case diary statements of the witnesses to come to a conclusion, as statements of witness under section 161 are admissible to the limited extent permitted under section 162(1) proviso and 162(2). Finally, the pivotal provision to test the aforesaid examination comes into picture, section 163, by virtue of which statements cannot be recorded by the police by any kind of pressure or inducement. This section derives its aroma in the presence of section 24 of Indian Evidence Act and 163(1) is not only applicable to the police but to any person in authority. Finally, when the investigation is complete, there are certain procedures to be followed upon. When the evidence is deficient, the accused is to be released by the police, with a bond, with or without security, for the procedure, to be taken after cognizance and during the trial(Section 169). When the evidence is sufficient, the case has to be taken by the police to the magistrate, for the trial and if the offence is bailable he has to be released on bail, with a bail bond with or without securities(Section 170(1)). Secondly, as per provision 170(2), the police officer has to forward any weapon or article, or any security to the magistrate, in order to give evidence for the charge framed against the accused.

On the completion of investigation, a mandatory report is submitted by the Investigating Officer, which is commonly called, ‘Charge-sheet’, and it is given without delay (173(1)). It includes all the necessary details of as prescribed under section 173(2)(i) and submission of this report is a part of the investigation. In this regard it is pertinent to note that, the magistrate under section 156(3) has the power to further direct the investigation even after submission of the report by the police. This means it would not affect the power of the investigating officer to further investigate the case even after the submission of the report. Finally as per the section 174 the police has the power to investigate and report the cases in cases of unnatural and suspicious deaths and under section 175 the police has the power to summon at inquest, in order to investigate the case registered under section 174 and their statements are again governed by the section 162.

CONCLUSION

The role of police, their duties in the light of various police acts and under the Cr.P.C is undoubtedly exhaustive and coherent. The Pre-trial role of the police, right from arrest to the investigation is in full consonance to the spirit of the fair trial, an original form of natural justice. This has been elucidated in the above research, which deals with the role of the police which is to be expected right from arresting a person, by allowing the arrested certain basic human rights is really commendable.

The latent jurisprudence of all these rights clearly furnish that, our highest organic laws of the land, grants us certain Fundamental Rights, which is not jeopardised throughout the pre-trail role performed by the dynamic police. The investigation procedure, requires that magistrate and the judicial bodies are kept informed about the procedures adopted by the police, which keeps a check on the process.

The recording of statements by the police, has been always subjected to the evidence and its value, which again doesn’t give the draconian power to the police authorities, making the whole actions and procedures adopted by them smooth, justifiable and in the interest of the fair trial for the accused. Therefore, from the above discussion and research I am of the view that the role of police, is the pre-trial is exhaustive enough to make the process coherent.

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Phone tapping: The saga of right to privacy and the Telegraph Act

The right to privacy was conceived around the home, and unauthorised intrusions into homes were seen as interference with the right to personal liberty. The court recognised ‘the right to the people to be secure in their persons, houses, papers, and effects’ and declared that their right against unreasonable searches and seizures was not to be violated.

Manjunath Kakkalameli

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In the Era of Digital Communication, Telephone – Tapping is a serious invasion of an individual’s privacy. With the growth of highly sophisticated communication technology, the right to sold telephone conversation, in the privacy of one’s home or office without interference, is increasingly susceptible to abuse. It is no doubt correct that every Government, howsoever democratic, exercises some degree of sub-rosa operation as a part of its intelligence outfit but at the same time citizen’s right to privacy has to be protected from being abused by, she authorities of the day. Although Phone Tapping is a debatable issue in India, as it directly infringes one’s Right to Privacy, which is a fundamental right of every Indian.

However, meanwhile in Maharashtra, As Smt. Rashmi Shukla, IPS Officer alleged to be leaked the confidential data of intercepts, which create a whirl in Maharashtra Politics. In this background let’s travel to revisit the issue of Phone Tapping.

PHONE TAPPING

The term “phone tapping” means interception of the contents of communication through a secret connection to the telephone line of one whose conversations are to be monitored usually without the consent of the person whose communication is monitored. Here, the question arises about the violation of the right of privacy of individuals. Every act without the consent of the person termed as an illegal act by a private person or public officer but in the case of public emergency or in the interest of public safety does not need any consent.

While it is moral and ethical not to peep in some one’s privacy but when it comes to sovereignty and Internal security of the state, the state has every Legal right to do so.

Life and liberty are not empty words; they include all those necessary ingredients which give meaning to them. Privacy of a person is a part of his life and liberty under our Constitution. Any invasion of this right, which is fundamental in nature, can be done only according to the constitutional limitations.

The act of telephone tapping affects right to privacy as well as right to freedom of speech and expression, both are Fundamental Rights under the Constitution. Art 21 of the Constitution.

Therefore, not only substantive law but even the procedure should satisfy the constitutional test. The power of interception of communication can be resorted to, when it is necessary or expedient so to do in the interest of the sovereignty and integrity of India, security of the state, friendly relations with foreign state, public order or for preventing incitement to the commission of an offence.

PHONE TAPPING, RIGHT TO PRIVACY AND THE JUDICIARY

The Judiciary of India, have time to time uphold the right to privacy, Courts in its order/judgments have observed that any private conversations of any individual have to be protected unless it is disturbing the National Security and Sovereignty.

However, The process related to the right to privacy began in Kharak Singh v. State of U.P., where the court discussed the relationship between surveillance and personal and found that unauthorized intrusion into a person’s home would interfere with his/her right to personal liberty.

The right to privacy here was conceived around the home, and unauthorized intrusions into homes were seen as interference with the right to personal liberty. The court recognized “the right to the people to be secure in their persons, houses, papers, and effects” and declared that their right against unreasonable searches and seizures was not to be violated.

Further, in People`S Union vs The Union of India And Another, the court ruled that telephone tapping would violate Article21 of the Indian Constitution unless it was permitted by the procedure established by law and that it would also violate the right to freedom of speech and expression under Article 19 unless it came within the restrictions permitted by Article19(2) & has issued certain guidelines-

1. An order for telephone-tapping in terms of Section 5(2) of the Act shall not be issued except by the Home Secretary, Government of India (Central Government) and Home Secretaries of the State Governments. In an urgent case the power may be delegated to an officer of the Home Department the Government of India and the State Governments not below the rank of Joint Secretary. Copy of the order shall be sent to the Review Committee concerned with one week of the passing of the order-.

2. The order shall require the person to whom it is addressed to intercept in the course of their transmission by means a public telecommunication system, such communications as are described in the order. The order may also require the person to whom it is addressed to disclose the intercepted material to such persons and in such manner as are described in the order.

3. The matters to be taken into account in considering whether an order is necessary under Section list of the Act shall include whether the information which is considered necessary to acquire could reasonably be acquired by other means.

4. The interception required under Section 5(2) of the Act shall be the interception of such communications as are sent to or from one or more addresses specified in the order belong an address or addresses likely to be used for the transmission of communications to or from, from one particular person specified or described in the order or one particular set of premises described in the order.

5. The order under Section 5(9) of the Act shall, unless renewed, case to have effect at the end of the period of two month from the date of issue. The authority which issued the order may, at any time before the end of two-month period renew the order if it by the State Government.

(a) The Committee shall on its own, within two months of the passing of the order by the authority concerned, investigate whether there is or has been a relevant order under Section 5(2) of the Act. Where there is or has been an order whether there has been any contravention of the provisions of Section 5(2) of the Act.

(b) If on an investigation the Committee concludes that there has been a contravention of the provisions of Section 5(2) of the Act, it shall set aside the order under scrutiny of the Committee. It shall further direct the destruction of the copies of the intercepted material.

(c) If on investigation, the Committee comes to the conclusion that there has been no contravention of the provisions of Section considers that it is necessary to continue the order in terms of Section 5(2) of the Act. The total period for the operation of the order shall not exceed six months.

6. The authority which issued the order shall maintain the following records:

(a) the intercepted communications,

(b) the extent to which the material is disclosed,

(c) the number of persons and their identity to whom any of the material is disclosed.

(d) the extent to which the material is copied and

(e) the number of copies made of any of the material.

7. The use of the intercepted material shall be limited to the minimum that is necessary in terms of Section 5(2) of the Act.

8. Each copy made of any of the intercepted material shall be destroyed as soon as its retention is no longer necessary in terms of Section 5(2) of the Act.

9. There shall be a Review Committee consisting of Cabinet Secretary, the Law Secretary and the Secretary, Telecommunication at the level of the Central Government. The Review Committee at the State level shall consist of Chief Secretary, Law Secretary and another member, other than the Home Secretary, appointed 5(2) of the Act, it shall record the finding to that effect.

Further, in the case of K.L.D Nagasree v. Government of India (2006), while referring the ruling of the Court in the P.U.C.L case, it was held that “For the reason of making an order for interception of messages in the exercise of powers under Section 5(1) and (2) of the Telegraph Act, 1885 the happening of any public emergency or the existence of a public safety interest is the sine qua non (mandatory).”

PHONE TAPPING: ONLY IN CASE OF NATIONAL SECURITY AND THREAT TO SOVEREIGNTY

In 2019, The Bombay High Court in Vinit Kumar vs State of Maharashtra held that tapping of telephones was only allowed in cases of public emergency or public safety. Observing that illegal phone tapping was an infringement of the fundamental right to privacy, the court quashed three orders passed by the Union Home Ministry allowing investigating agencies to intercept the calls of a businessman involved in a bribery case.

CONCLUSION

In light of the above, it can be said that there is no legal impediment in recording the telephonic conversation with prior written consent of all the parties to the telephonic conversation and the same is not in violation of right to privacy enshrined under Article 21 of the Constitution and shall also be outside the ambit of interception.

Interception in the general sense means monitoring of such information by means of a monitoring device or viewing, examination or inspection of the contents of any direct or indirect information and diversion of any direct or indirect information from its intended destination to any other destination. Remedies that are available to aggrieved persons can be that in cases where unlawful interception infringes the right to privacy then the aggrieved person can file a complaint in the Human Rights Commission.

For now, the Indian public has gradually become aware of possible privacy violations that could be caused by technology and they know for prevention and investigation of crimes or in maintaining the sovereignty, integrity, and security of the state or if such information discloses clues and evidence of a crime or scandal, they have to be pursued.

An FIR can be lodged under the IT Act & telegraph act, when illicit phone interception comes into the knowledge of the person. Moreover, the aggrieved person can move to the Court against the person or company doing the Act. Therefore, in India, phone tapping has to be approved by a designated authority and it is illegal otherwise.

The Author is Executive Member of Maharashtra BJP Executive Committee – Legal Cell.

The term ‘phone tapping’ means interception of the contents of communication through a secret connection to the telephone line of one whose conversations are to be monitored usually without the consent of the person whose communication is monitored. Here, the question arises about the violation of the right of privacy of individuals. Every act without the consent of the person is termed illegal by a private person or public officer but in the case of public emergency or in the interest of public safety does not need any consent.

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COGNISANCE BY MAGISTRATE: AN OVERVIEW

Shivanshu Goswami

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The primary step in any criminal case is taking cognisance of the offence. By taking cognisance it is meant to take judicial note of an offence. Only after taking the cognisance of offences, the judiciary comes into picture. If we apply the dictionary meaning it simply refers to becoming aware or getting the knowledge of any such offences. This was also enunciated by the apex court, in the case of R.R.Chari v. State of U.P were it defined it as the application of judicial mind. Section 190- 199 of the Code of Criminal Procedure, 1973 describe the methods by which, and the limitations subject to which, various criminal courts are entitled to take cognizance of offences. Section 190 (1) states about the powers and conditions under which any magistrate of first and second class specifically empowered in this behalf can take cognizance

The word cognizance has nowhere been defined in the Code. The definition of cognizance has been derived from the case laws. According to the legal dictionary the meaning of cognizance is as under-

The power, authority, and ability of a judge to determine a particular legal matter. A judge’s decision to take note of or deal with a cause. In simple words, the word cognizance can be defined as cognizance means exercise of a judicial discretion to proceed with the case.

As per black law dictionary “Cognizance” –

1) A court’s right and power to try and to determine cases; JURISDICTION.

2) The taking of judicial or authoritative notice.

3) Acknowledgment or admission of an alleged fact; esp. (hist), acknowledgment of fine

(Bryan A. Garner (Editor in chief) BLACK’S LAW DICTIONARY 10th edition)

The word “cognizance” has no esoteric or mystic significance in criminal law or procedure. It merely means “become aware of” and when used with reference to a court or judge, “to take notice judicially” [Ajit Kumar Palit v. State of W.B., (AIR 1963 SC 765).

Taking cognizance does not involve any formal action, or indeed action of any kind, but occurs as soon as a Magistrate, as such, applies his mind to the suspected commission of an offence for the purpose of proceeding to take subsequent steps (under Section 200 or Section

202, or Section 204) towards inquiry and trial [Darshan Singh Ram Kishan v. State of Maharashtra, (1971) 2 SCC 654]. However, when a Magistrate applies his mind not for the purpose of proceeding as mentioned above, but for taking action of some other kind, for example, ordering investigation under Section 156(3), or issuing a search warrant for the purpose of investigation, he cannot be said to have taken cognizance of the offence [Tula Ram v. Kishore Singh, (1977) 4 SCC 459]. The word “cognizance” has been used in the Code to indicate the point when the Magistrate or a judge first takes judicial notice of an offence [Gopal Marwari V. Emperor, (1944) 45 Cri LJ 177].

TAKING OF COGNISANCE

Meaning of what is “taking cognizance” has not been defined in the Criminal Procedure Code. However, it can be said that any Magistrate who has taken cognizance under Sec. 190 (1) (a), Cr. P.C., he must not only have applied his mind to the contents of the petition, but he must have done so for the purpose of proceeding in a particular way as indicated in the subsequent provision i.e., proceedings under Section 200, and thereafter sending it for inquiry and report under Section 202. It can be said that before a Magistrate takes cognizance of an offence, he must have applied his mind for the purpose of proceeding in a particular way as indicated in the subsequent provision. When a Magistrate applies his mind not for the purpose of proceeding under the subsequent sections but for taking action of some other kind, e.g., ordering an investigation under Section 156 (3) or issuing a search warrant for purposes of investigation, he cannot be said to have taken cognizance of. As to when a cognizance is taken will depend upon the facts and circumstances of each case and it is not possible to define what is meant by it. It is only when a Magistrate applies his mind for purposes of proceeding under Section 200 and subsequent sections of Chapter XV (XVI old) or under Sec. 204 of Chapter XVI (XVII old) of the Code that it can be positively stated that he has applied his mind and, therefore, he has taken cognizance [Narayan Das Bhagwan Das v. State of West Bengal, AIR1959 SC 1118]

MAGISTRATE NOT BOUND BY OPINION OF INVESTIGATING OFFICER

One of the courses open to the Magistrate is that instead of exercising his discretion and taking cognizance of a cognizable offence and following the procedure laid down under Section 200 or Section 202 of the Code, he may order an investigation to be made by the police under Section 156(3) of the Code, which the learned Magistrate did in the instant case. When such an order is made, the police is obliged to investigate the case and submit a report under Section 173 (2) of the Code. On receiving the police report, if the Magistrate is satisfied that on the facts discovered or unearthed by the police there is sufficient material for him to take cognizance of the offence, he may take cognizance of the offence under Section 190 (l)(b) of the Code and issue process straightway to the accused. However, Section 190 (l) (b) of the Code does not lay down that a Magistrate can take cognizance of an offence only if the investigating officer gives an opinion that the investigation makes out a case against

Under section 190(1) (a), a Magistrate can take cognizance upon receiving a complaint. But the question as to whether the Magistrate has taken cognizance of the offence depends upon the steps taken afterwards. If he applies his mind to proceed with the complaint under sections

200 to 203, he must be said to have taken cognizance; whereas if he applies his mind to the complaint and proceed under section 156(3) or section 93, he cannot be said to have taken cognizance of the offence (K.N.C. Pillai, R. V. Kelkar’s Criminal Procedure, Sixth Edition, Eastern Book Company, 2015)

The reference can be drawn from the cases below-

(1)- Superintendent & Remembrancer of Legal Affairs vs. Abani Kumar Banerjee, AIR1950 Calcutta 437

(2)- Narayandas Bhagwandas Madhavdas v. State of West Bengal, (1960) 1 SCR 93

(3)- Ajit Kumar Palit v. State of W.B. & Anr., (1963) Supp (1) SCR 953;

(4)-Hareram Satpathy v. Tikaram Agarwala & Anr., (1978) 4 SCC 58

(5)- Bhushan Kumar vs. State (N.C.T. of Delhi), (2012)2 SCC(Cri.)872

When a written complaint disclosing an offence is filed before a Magistrate or Court, as the case may be, under chapter XV of the code, as soon as the Magistrate registers that complaint for recording the statements of the complainant and the witnesses present, if any, under section 200 of the Code, the Magistrate is deemed to have taken cognizance.

The important judgment of Hon ‘ble Supreme Court on this topic is

S.K. Sinha, Chief Enforcement officer vs Videocon International Ltd. & Ors, 2008 (61) ACC 371 SC.

Since the Hon’ble Apex Court has discussed various case laws in the aforesaid judgment, hence, it will be appropriate to reproduce the relevant part of the judgment, herein below

“…12. The expression cognizance has not been defined in the Code. But the word (cognizance) is of indefinite import. It has no esoteric or mystic significance in criminal law. It merely means become aware of and when used with reference to a Court or a Judge, it connotes to take notice of judicially. It indicates the point when a Court or a Magistrate takes judicial notice of an offence with a view to initiating proceedings in respect of such offence said to have been committed by someone. Taking cognizance does not involve any formal action of any kind. It occurs as soon as a Magistrate applies his mind to the suspected commission of an offence. Cognizance is taken prior to commencement of criminal proceedings. Taking of cognizance is thus a sine qua non or condition precedent for holding a valid trial. Cognizance is taken of an offence and not of an offender. Whether or not a Magistrate has taken cognizance of an offence depends on the facts and circumstances of each case and no rule of universal application can be laid down as to when a Magistrate can be said to have taken cognizance. Chapter XIV (Sections190-199) of the Code deals with Conditions requisite for initiation of proceedings. Section 190 empowers a Magistrate to take cognizance of an offence in certain circumstances. Sub-section(1) thereof is material and may be quoted in extenso.

1) Subject to the provisions of this Chapter, any Magistrate of the first class, and any Magistrate of the second class specially empowered in this behalf under sub-section (2), may take cognizance of any offence

(a) upon receiving a complaint of facts which constitute such offence; (b) upon a police report of such facts;

(c) upon information received from any person other than a police officer, or upon his own knowledge, that such offence has been committed.

13. Chapter XV (Sections 200-203) relates to Complaints to Magistrates and covers cases before actual commencement of proceedings in a Court or before a Magistrate. Section 200 of the Code requires a Magistrate taking cognizance of an offence to examine the complainant and his witnesses on oath. Section 202, however, enacts that a Magistrate is not bound to issue process against the accused as a matter of course. It enables him before the issue of process either to inquire into the case himself or direct an investigation to be made by a Police Officer or by such other person as he thinks fit for the purpose of deciding whether there is sufficient ground for proceeding further. The underlying object of the inquiry under Section 202 is to ascertain whether there is prima facie case against the accused. It thus allows a Magistrate to form an opinion whether the process should or should not be issued. The scope of inquiry under Section 202 is, no doubt, extremely limited. At that stage, what a Magistrate is called upon to see is whether there is sufficient ground for proceeding with the matter and not whether there is sufficient ground for conviction of the accused.

14. Then comes Chapter XVI (Commencement of proceedings before Magistrates). This Chapter will apply only after cognizance of an offence has been taken by a Magistrate under Chapter XIV. Section 204, where under process can be issued, is another material provision which reads as under:

204. Issue of process.- (1) If in the opinion of a Magistrate taking cognizance of an offence there is sufficient ground for proceeding, and the case appears to be

(a) a summons-case, he shall issue his summons for the attendance of the accused, or

(b) a warrant-case, he may issue a warrant, or, if he thinks fit, a summons, for causing the accused to be brought or to appear at a certain time before such Magistrate or (if he has no jurisdiction himself) some other Magistrate having jurisdiction.

(2) No summons or warrant shall be issued against the accused under sub- section (1) until a list of the prosecution witnesses has been filed.

(3) In a proceeding instituted upon a complaint made in writing, every summons or warrant issued under sub- section (1) shall be accompanied by a copy of such complaint.

(4) When by any law for the time being in force any process-fees or other fees are payable, no process shall be issued until the fees are paid and, if such fees are not paid within a reasonable time, the Magistrate may dismiss the complaint.

(5) Nothing in this section shall be deemed to affect the provisions of section 87.

15. From the above scheme of the Code, in our judgment, it is clear that Initiation of Proceedings, dealt with in Chapter XIV, is different from Commencement of Proceedings covered by Chapter XVI. For commencement of proceedings, there must be initiation of proceedings. In other words, initiation of proceedings must precede commencement of proceedings. Without initiation of proceedings under Chapter XIV, there cannot be commencement of proceedings before a Magistrate under Chapter XVI. The High Court, in our considered view, was not right in equating initiation of proceedings under Chapter XIV with commencement of proceedings under Chapter XVI.”

In Devarapalli Lakshminarayana Reddy & Ors. v. V. Narayana Reddy & Ors., (1976)

3 SCC 252, Court Observed

“It is well settled that when a Magistrate receives a complaint, he is not bound to take cognizance if the facts alleged in the complaint, disclose the commission of an offence. This is clear from the use of the words “may take cognizance” which in the context in which they occur cannot be equated with must take cognizance”. The word “may” gives discretion to the Magistrate in the matter. If on a reading of the complaint he finds that the allegations therein disclose a cognizable offence and the forwarding of the complaint to the police for investigation under Section 156(3) will be conducive to justice and save the valuable time of the Magistrate from, being wasted in enquiring into a matter which was primarily the duty of the police to investigate, he will be justified in adopting that course as an alternative to taking cognizance of the offence, himself.

This raises the incidental question: What is meant by “taking cognizance of an offence” by a Magistrate within the contemplation of Section 190?. This expression has not been defined in the Code. But from the scheme of the Code, the content and marginal heading of Section 190 and the caption of Chapter XIV under which Sections 190 to 199 occur, it is clear that a case can be said to be instituted in a Court only when the Court takes cognizance of the offence alleged therein. The ways in which such cognizance can be taken are set out in Clauses (a), (b) and (c) of Section 190(1). Whether the Magistrate has or has not taken cognizance of the offence will depend on the circumstances of the particular case including the mode in which the case is sought to be instituted and the nature of the preliminary action, if any, taken by the Magistrate. Broadly speaking, when on receiving a complaint, the Magistrate applies his mind for the purposes of proceeding under Section 200 and the succeeding sections in Chapter XV of the Code of 1973, he is said to have taken cognizance of the offence within the meaning of Section190(1)(a). If, instead of proceeding under Chapter XV, he has in the judicial exercise of his discretion, taken action of some other kind, such as issuing a search warrant for the purpose of investigation, or ordering investigation by the police under Section 156(3), he cannot be said to have taken cognizance of any offence. [see also M.L. Sethi v. R.P. Kapur & Anr., (1967) 1 SCR

COGNISANCE TAKEN BY A MAGISTRATE NOT EMPOWERED

If any magistrate not empowered to take cognizance of an offense under S. 190(1)(a) and 190(1)(b), does erroneously in good faith take cognizance of an offense, his proceeding shall not be set aside merely on the ground of his not being empowered.

Purshottam Jethanand v. State of Kutch [9]: If a magistrate takes cognizance of an offense and proceeds with a trial though he is not empowered in that behalf and convicts the accused, the accused cannot avail himself of the defect and cannot demand that his conviction be set aside merely on the ground of such irregularity, unless there is something on the record to show that the magistrate had assumed the power, not erroneously and in good faith, but purposely having knowledge that he did not have any such power. On the other hand, if a magistrate who is not empowered to take cognizance of an offense takes cognizance upon information received or upon his own knowledge under. 190(1)(c) his proceeding shall be void and of no effect. In such a case it is immaterial whether he was acting erroneously in good faith or otherwise.

COGNISANCE OF OFFENCES BY COURT OF SESSION

No court of session shall take cognizance of any offense as a court of original jurisdiction unless the case has been committed to it by a magistrate under S. 193 of the Code. When an offense is exclusively triable by a court of session according to S.26 read with the First Schedule the Magistrate taking cognizance of such offence is required to commit the case for trial to the Court of Session after completing certain preliminary formality. Sometimes the posts of CJM and ADJ are held by one individual. In such a case the CJM was required to take cognizance and try economic offenses. It was ruled that S. 193did not apply to that case. For proper distribution of the work in the court of session and for administrative convenience, it has been provided that an Additional Session Judge or Assistant Session Judge shall try such cases as the Sessions Judge of the division may, by general or special order, make over to him for trial or as the High Court may, by special order, direct him to try under S.194 of the Code.

But it is very important to point out at this juncture that once the case is committed to the Sessions Court under Section 209 Cr.P.C, the embargo engrafted in Section 193 Cr.P.C is lifted and the Sessions Court assumes all jurisdictions which are vested with the court of Original jurisdiction including the power to summon such other co-accused persons who have not been charge-sheeted by the investigating officer. Reliance in this regard is placed upon the judgment of the Hon’ble Supreme Court in Kishun Singh v. State of Punjab, (1993) 2 SCC 16, the relevant extract of which is reproduced herein below for the kind consideration of this Hon’ble Court:

16. We have already indicated earlier from the ratio of this Court’s decisions in the cases of Raghubans Dubey [(1967) 2 SCR 423 : AIR 1967 SC 1167 : 1967 Cri LJ 1081] and Hareram [(1978) 4 SCC 58 : 1978 SCC (Cri) 496 : (1979) 1 SCR 349 : AIR 1978 SC 1568] that once the court takes cognizance of the offence (not the offender) it becomes the court’s duty to find out the real offenders and if it comes to the conclusion that besides the persons put up for trial by the police some others are also involved in the commission of the crime, it is the court’s duty to summon them to stand trial along with those already named, since summoning them would only be a part of the process of taking cognizance. We have also pointed out the difference in the language of Section 193 of the two Codes; under the old Code the Court of Session was precluded from taking cognizance of any offence as a court of original jurisdiction unless the accused was committed to it whereas under the present Code the embargo is diluted by the replacement of the words the accused by the words the case. Thus, on a plain reading of Section 193, as it presently stands once the case is committed to the Court of Session by a Magistrate under the Code, the restriction placed on the power of the Court of Session to take cognizance of an offence as a court of original jurisdiction gets lifted. On the Magistrate committing the case under Section 209 to the Court of Session the bar of Section 193 is lifted thereby investing the Court of Session complete and unfettered jurisdiction of the court of original jurisdiction to take cognizance of the offence which would include the summoning of the person or persons whose complicity in the commission of the crime can prima facie be gathered from the material available on record.

The Hon’ble Supreme Court in in Dharam Pal v. State of Haryana, (2014) 3 SCC 306 has authoritatively held that the language of Section 193 of the Code very clearly indicates that once the case is committed to the Court of Session by the learned Magistrate, the Court of Session assumes original jurisdiction and the Sessions Judge has jurisdiction to summon those persons shown in column 2 of the police report to stand trial along with those already named therein and it is absolutely fallacious to contend that the Sessions Court would have no alternative, but to wait till the stage under Section 319 Cr.P.C was reached. Thus, it becomes evident that upon committal of the case to the Sessions Court, the Court under Section 193 Cr.P.C has sufficient power to proceed to summon the accused not charge-sheeted against whom a prima facie case is made out.

CONCLUSION

The expression “to take cognizance” has not been defined in the code, nor does the code prescribed any special form of taking cognizance. The word “cognizance” is however, used in the code to indicate the point when the magistrate or judge takes judicial notice of an offence. It is a word of infinite import and is perhaps not always used in exactly the same sense. The expression ‘cognizance’ merely means ‘become aware of’ and when used with the reverence to a court or judge, it connotes ‘to take notice judicially’. It indicates the point when the court or a magistrate takes judicial notice of an offence with a view to point initiate proceeding in respect of such offence said to have been committed by someone. Taking cognizance” means cognizance of an offence and not of an offender. Once the magistrate takes cognizance of an offence. it is the duty to find who the offender really is and once he comes to the conclusion that apart from the person sent up by the police some other person is involved, it is his duty to proceed against those people. Thus, it is unfortunate to say that, the Magistrates, who have been repeatedly advised and guided by the Hon’ble Supreme Court to exercise great caution in taking cognizance, have abruptly failed in adhering to such guidance, as a result of which, the immersion of civil disputes with criminal charges is immensely growing with each passing day as reflected in the statistics furnished before the subordinate courts of India. Day in and day out, hundreds of such complaints have been entertained by some of the Magistrates and cognizance is taken. Humanly, it is impossible if there is proper application of mind. To conclude, as remarked by the Supreme Court, there is no special charm or any magical formula in the expression ‘taking cognizance’ which merely means judicial application of the mind of the Magistrate to the facts mentioned in the complaint with a view to take further judicial action.

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Present generation taking concept of marriage very lightly, they apply for divorce on unimaginable trivial issues: Madras HC

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It has to be taken most seriously that none other than the Madras High Court which is one of the oldest High Courts in India has taken most serious note of the present generation taking concept of marriage very lightly and they apply for divorce on unimaginable trivial issues and marriage is broken. This clearly reflects that the tolerance level in the present generation is decreasing very rapidly. The present generation can only at its own peril prefer to ignore what the Madras High Court has ruled in this notable case.

To start with, this leading, latest, learned and laudable judgment titled Annapoorani Vs. S. Ritesh in C.R.P.No. 106 of 2021 and C.M.P. No. 995 of 2021 authored by a Single Judge Bench of Justice V Bhavani Subbaroyan of the Madras High Court sets the ball rolling in para 1 wherein it is put forth that, “The present Civil Revision Petition has been filed under Article 227 Constitution of India with the prayer to strike off the petition in O.P. 4784 of 2019 on the file of III Additional Family Court, Chennai on the ground that the invocation of Section 12(1)(a) of the Hindu Marriage Act is not sustainable by raising various grounds.”

To put things in perspective, the Bench then points out in para 2 that, “The present Civil Revision Petition has been filed by the wife as against the petition in O.P.No.4784 of 2019 filed by the respondent / husband before the said Family Court. The respondent / husband has filed the Original Petition before the Family Court against the petitioner / wife herein on the ground that the respondent / wife is suffering from Polycystic Ovarian Syndrome (for brevity ‘PSOS’) and the respondent / wife was not fit for cohabitation or give birth to a child. Apart from that, he has also raised many other issues, instances as against the wife for seeking declaration declaring that the marriage solemnized on 01.07.2018, which was subsequently registered on the same day, vide Sl.No.95 of 2018 before the Marriage Registrar, Joint II, Saidapet, Chennai – 15, as null and void. After filing this petition, the respondent / husband has also filed an I.A. 1 of 2020 seeking for an amendment to include the provision of law from 12(1)(a) and 12(1)(a) and (c). The said petition seeking for amendment is pending before the Family Court for decision.”

Needless to say, the Bench then also mentions in para 5 that, “Heard the learned counsel for the petitioner in length and perused the materials available on record.”

As it turned out, the Bench then points out in para 6 that, “It is to be noted that the petitioner herein had approached this Court seeking to strike off the petition under Article 227 of the Constitution of India on the alleged facts which are pleaded in O.P.No.4784 of 2019 before the Family Court, Chennai . She also claims that she wedded to the respondent / husband on 01.07.2018, as per the Hindu Marriage Act and the same is the arranged marriage; arranged by the parents, elders and well-wishers of both the parties. However, the said marriage did not last long on the alleged ground of physical condition that the petitioner / wife cannot give birth to a child, as alleged by the husband, owing to ‘PSOS’ on the part of the wife.”

Be it noted, the Bench then mentions in para 7 that, “On a careful perusal of the said petition filed before the Family Court, Chennai, it is seen that the respondent . husband has narrated various facts apart from the issue of ‘PSOS’ which he relies most as a ground for seeking divorce. It is also seen that the respondent / husband has made categorical allegation that the petitioner / wife is suffering from ‘PSOS’ due to which’ her menstrual cycle will extend for more than 25 days and she is under mediation ever since the date of puberty.”

It is also worth noting that it is then pointed out in para 8 that, “The issue of ‘PSOS’, which is now commonly prevailing among the present generation of women due to various habits, such as, mental stress and to a very great extent, the contaminated environment, in which we live, is also one of the cause for particular women, who develop this physical problem. The term ‘PSOS’ by itself cannot be termed as ‘impotency’. Impotency is different and unable to give birth to a child is different, owing to various physical and mental reasons.”

Please read concluding on thedailyguardian.com

Most remarkably, what forms the cornerstone of this leading judgment is then enunciated in para 9 wherein it is held that, “On a careful perusal of the entire pleadings in a petition filed by the respondent / husband, it is clear that he has not pleaded that the wife’s inability to give birth to a child as ‘Impotency’, but he seeks for annulment of a marriage on the reason that there was no cohabitation and wife could not bear a child. In fact, he has also pleaded that the wife has not cooperated for cohabitation owing to her medical condition, as she was almost 25 days on her menstrual cycle. The marriage being a bondage between men and women as husband and wife, it not only limits to a biological needs and desires, but also as a companion in life caring forward to the next generation through their children. This bondage is a factor, through which, we are living in this world for centuries. However, the concept of marriage in the present generation are taken very lightly and even for trivial issues, they file divorce and marriage is broken. That is why the Family Courts increase in numbers to cater the demand of intolerant couple, who are unmindful of the institution of marriage, break the relationship on unimaginable trivial reasons.”

In the present context in this notable case, the Bench then observes in para 10 that, “As far as the present case on hand is concerned, on going through the entire pleadings it is clear that the respondent / husband has not spelt out any single word connoting impotency towards his wife/ petitioner herein. But he has approached the Family Court mainly on the issue complaining that his wife/ petitioner herein could not bear a child on two reasons, viz., firstly, there is no cohabitation, secondly, the wife is suffering from ‘PSOS’ due to which the said wife suffer a improper menstrual cycle. At this stage of the case, the petiitoner / wife has filed the present Civil Revision Petition, who has not filed any counter to the said allegation.

For the sake of clarity, the Bench then makes it a point to clarify in para 11 stating that, “With regard to invocation of Article 227 of Constitution of India is concerned, it is only a supervisory jurisdiction of the High Court on its Subordinate Courts and in several cases, Hon’ble Supreme Court as well as this Court have confirmed that when the suit filed on frivolous fact and when there is an abuse of process of law, the court can extend its power strictly and if on plain reading of the plaint, it shows abuse of process of law, the court can intervene. The supervisory jurisdiction of this Court can be invoked only when there is manifest error committed by the Subordinate court and the said arguments of the petitioner’s counsel does not come under the said reason and the same will not fall under realm of exercising the power under Article 227 Constitution of India, as the respondent / husband contrary to the submissions made by the learned counsel petitioner, has not made any allegation in the petition with regard to the impotency of the petitioner / wife.”

What’s more, it is then pertinently mentioned which is quite ostensible also in para 12 that, “It is a legitimate expectation of the husband to live with his wife and have cohabitation and bear children and if the same is not achieved owing to any physical and mental problem among the partners, it is quite logical that either of the parties will approach the court for seeking divorce on such allegations. Except in few cases, where the couple understand each other and come forward with the life issue-less or even go for adoption, however, the same has to be proved by the person claiming that his or her partner is incapacitated to give or bear the child. But in the case on hand, the petitioner is not in a position to show that there is no cause of action disclosed by the averments made in the petition filed by the husband/respondent or that the cause of action disclosed by the averments made in the petition is not natural, but illusive.”

Finally, it is then held in the final para 13 that, “Under these circumstances, it could be seen that the petitioner has not made out any grounds seeking for intervention of this Court under Article 227 of the Constitution of India to strike off the petition in O.P.No.4784 of 2019 on the file of III Additional Family Court, Chennai. Accordingly, the Civil Revision Petition does not even merit admission and the same is liable to be dismissed at the threshold and the same is dismissed. The learned III Additional Judge, Family Court, Chennai shall proceed on merit in the said H.M.O.P.No.4784 of 2019 uninfluenced by the observations made by this Court in the present Civil Revision Petition. In the result, the present Civil Revision Petition is dismissed. Consequently, the connected miscellaneous petition is closed. No costs.”

To conclude, it is high time and the present generation must at least now wake up their ideas and adhere to what the Madras High Court has said in totality. They must learn to be more tolerant towards each other as had been the case in the earlier generations and stop applying for divorce on unimaginable trivial issues as has been very rightly pointed out also by the Madras High Court in this notable case also. Only then will they be able to live a happy and peaceful life. What is the harm in doing so? Why start fuming in anger over very trivial issues and then foolishly going in for litigation which hurts both the parties as both have to spend money on hiring lawyers and other expenses! They will themselves stand to gain the most if they prefer to do so as has been very commendably suggested by the Madras High Court in this leading case. Justice V Bhavani Subbaroyan of the Madras High Court who is herself a woman and who has delivered this brief, balanced and brilliant judgment has set the record straight on this and it is the bounden duty of the present generation to pay heed to what she has said in her commendable and noteworthy judgment which is being widely appreciated also! Let’s fervently hope that they do so accordingly!

Sanjeev Sirohi, Advocate,

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CENTRE ISSUES ORDINANCE TO INTRODUCE PRE-PACKAGED INSOLVENCY FOR MSMES

Tarun Nangia

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The IBC Amendment Ordinance has made available pre packaged insolvency process for Micro Small and Medium Enterprises (MSME). There are a little over 6 lakh MSMEs in the country.

The IBC Amendment Ordinance 2021 (“Ordinance”) makes available the pre-packaged route to genuine and viable cases, to ensure least business disruption. While modelled on debtor-in-possession approach, it vests significant consent rights to the financial creditors, such that the mechanism cannot be mis-used by errant promoters. Further, adopting plan evaluation process akin to Swiss Challenge, it retains competitive tension such that promoters propose plans with least impairment to rights and claims of creditors. The ability of the committee of creditors to require dilution of promoter shareholding/ control, in cases resolution plans submitted by the corporate debtor provides for impairment of any claims owed by such corporate debtor, should also be a significant deterrent against unreasonable terms in resolution plans, said Soumitra Majumdar, Partner J Sagar Associates

“As we had seen in the past, contractual restructurings are fraught with major co-ordination problems, which should get adequately redressed by this route. Protecting the process from competing litigations and co-ordinating the consent process, this approach should solve issues arising from fragmented credit arrangements. As with any legislation, this Ordinance will also need to evolve, as it goes along to address implementation issues which will arise. Illustratively, the payment/ restructuring terms to dissenting creditors may have to be dealt with soon, especially in light of the recent Supreme Court judgement. In summary, this is a welcome move, aimed at flexible, timely and viable resolutions, with the sanctity of a statutory process,” Majumdar said.

MSME’s contribute significantly to India’s economy and also are the largest employers cumulatively. The pre packaged insolvency process will quicken the process of resolution of MSME’s.

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Indus Biotech vs Kotak India: Decoding Supreme Court’s approach towards arbitrability of insolvency disputes

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There has been a lot of discussion across jurisdictions regarding the intersection and interaction between insolvency and arbitration. On 26th March 2021, the Supreme Court of India rendered its judgment in Indus Biotech vs. Kotak India, putting to rest some important questions surrounding this relationship, most importantly the question as to when do insolvency disputes become inarbitrable. This article is an attempt to decode the observations of the Supreme Court and their impact on future questions relating to arbitrability.

BACKGROUND TO THE DISPUTE

Kotak India Venture Fund had subscribed to Optionally Convertible Redeemable Preference Shares [“OCRPS”] issued by Indus Biotech Private Limited. There arose a dispute between the parties regarding the appropriate formula to be adopted, and to arrive at the actual percentage of the paid-up share capital which would be converted into equity shares and the refund, if any, thereafter.

When Indus failed to redeem the OCRPS, Kotak approached the National Company Law Tribunal (hereinafter “NCLT”) seeking the initiation of corporate insolvency resolution process under Section 7 of the Insolvency & Bankruptcy Code, 2016. At the same time, Indus invoked the arbitration clause provided under the Share Subscription and Shareholders Agreement (“SSSA”) and requested the Tribunal to refer the parties to Arbitration under Section 8 of the Arbitration & Conciliation Act, 1996.

NCLT’S DECISION

The Adjudicating Authority observed that in a Section 7 petition there has to be a judicial determination as to whether there has been a “default” within the meaning of Section 3(12) of the IBC, and in that light determined that a ‘default’ had not occurred in the instant case. The Tribunal also noted that Indus was a solvent, debt-free, and profitable company. Considering that the dispute was purely contractual in nature, the NCLT directed the parties to resolve their dispute by arbitration, thereby dismissing the application filed by Kotak under the IBC.

Aggrieved by the said decision, Kotak approached the Supreme Court of India by way of a Special Leave Petition. The primary contention raised by Kotak before the Supreme Court was that the dispute sought to be raised, being a matter in rem, belongs to that class of litigation which falls out of the scope and ambit of arbitration. It is in this context that the aforementioned dispute becomes extremely relevant to the insolvency versus arbitration debate.

THE TEST OF ARBITRABILITY IN INDIA

In order to understand the importance of the Apex Court’s decision in the instant case, it becomes imperative to look at the test of arbitrability in India and how it has transformed in the recent times.

Until recently, the decision of the Supreme Court in Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd., used to serve as the primary guiding point in so far as the question of arbitrability was concerned. The Apex Court in Booz Allen, using a rights-based approach formulated a test wherein disputes involving rights in personam (i.e., rights enforceable against a particular person) were held to be amenable to arbitration, whereas disputes involving rights in rem (i.e., rights enforceable against the whole world at large) were characterized as inarbitrable. Further, the Court also listed certain examples of inarbitrable disputes, including insolvency disputes.

However, due to its overly broad nature and its inability to differentiate between the mere involvement of rights in rem and the effects of such involvement, i.e., any erga omnes effect of such involvement, the test formulated in Booz Allen was considered to be inherently problematic and has been rightly criticized by noted arbitration scholars such as Ajar Rab.

At this juncture, it is also important to refer to the landmark decision of Swiss Ribbons Pvt. Ltd. & Anr. vs. Union of India & Ors., which is often cited to support the argument that disputes involving insolvency are inarbitrable in nature. Kotak, in the instant case, too had placed reliance on Swiss Ribbons. However, it is argued that a simple reading of the Apex Court’s observations in Swiss Ribbons would highlight as to why such reliance is misplaced. The SC had clearly observed that the Code gets triggered on the admission of an application and upon such admission the proceeding becomes in rem in nature (Paragraph 52 of the Judgment). Therefore, the argument that the Court had observed that insolvency disputes are inarbitrable per se is wrong and misplaced.

In December 2020, through the case of Vidya Drolia & Ors. vs. Durga Trading Corporation, the Supreme Court devised a more nuanced four-fold test of arbitrability. This test fills the void of ambiguity that was created by Booz Allen, and therefore, any further reliance upon Booz Allen has become redundant. As per the test, a dispute would become inarbitrable when:

(I) it relates to actions in rem or actions that do not pertain to subordinate rights in personam that arise from rights in rem.

(II) it affects third party rights; has erga omnes effect; requires centralized adjudication, and mutual adjudication would not be appropriate and enforceable.

(III) it relates to the inalienable sovereign and public interest functions of the state; and

(IV) it is expressly or by necessary implication non-arbitrable as per mandatory statute/s.

ARBITRATION ACT VS IBC: WHAT PREVAILS?

There are two fundamental rules relating to repugnancy of Statutes which must be understood in order to answer this question: (I) the provisions of special law prevail over the provisions of general law [Supreme Court in Sharat Babu Digumarti v. Govt. of NCT of Delhi], and (II) when two special laws have provisions repugnant to each other, then the statue later in time shall prevail [Supreme Court in KSL And Industries Ltd. v/s Arihant Threads Ltd]. 

The first rule does not have any application in so far as the tussle between the Arbitration Act and the IBC is concerned, considering that both these statutes have been enacted for a special purpose. While the Arbitration & Conciliation Act is a special law, consolidating and amending the law relating to arbitration and matters connected therewith or incidental thereto [Supreme Court in Consolidated Engineering Enterprises v/s. Principal Secretary, Irrigation Department & Others], the IBC was introduced to “consolidate and amend the laws relating to reorganization and insolvency resolution of corporate persons”. Therefore, the answer to the instant question lies in the second rule of repugnancy.

Coming to the second rule, the IBC being a statute enacted later in time will prevail over the Arbitration & Conciliation Act. The over-riding effect of IBC has been granted statutory recognition under Section 238 of the Code, which provides that the provisions of the Code shall have an over-riding effect over all other statutes. In order to understand the position better, a reference can be made to the case of ABG Shipyard Limited v/s. ICICI Bank Ltd., wherein NCLT Ahmedabad held that the provisions of IBC would prevail over those of the Electricity Act, 2003 for the reason that IBC being later in time would prevail over the Electricity Act (considering both the statutes are special law).

SUPREME COURT’S OBSERVATIONS IN INDUS BIOTECH VS KOTAK

The observations of the Supreme Court can be divided into two heads, considering the aforementioned context:

(1) ARBITRABILITY OF INSOLVENCY DISPUTES

With respect to the question of arbitrability, the Court took a nuanced approach and held that an insolvency proceeding becomes in rem only after it is admitted. An admission leads to the creation of a third party right in all the creditors of the corporate debtor, thereby creating an erga omnes effect. Therefore, the Apex Court observed that the moment an insolvency application is admitted under Section 7 of the IBC, the dispute would become inarbitrable and a Section 8 application under the Arbitration & Conciliation Act would not be maintainable.

On the other hand, it was also observed by the Apex Court that if the Adjudicating Authority leads to the conclusion that there is no default committed by the Company and thereby dismisses the application, it would be open for the parties to secure the appointment of an Arbitral Tribunal in an appropriate proceeding as contemplated in law.

(2) Over-riding effect of the IBC and its Implication

At the very outset, the Apex Court observed that the position of law that the IBC shall override all other laws as provided under Section 238 needs no elaboration. In what is an extremely important observation, the Court went to describe the implication of this over-riding effect in so far as the relationship between insolvency and arbitration is concerned. The implication, as per the Court, would be that the Adjudicating Authority is duty bound to deal with the enquiry under Section 7 of the IBC by examining the material placed before it and record a satisfaction as to whether there is a default or not, even if an application under Section 8 of the Arbitration Act has been filed simultaneously.

COMMENT

Sound Approach Towards Arbitrability

The authors are of the opinion that the Court has taken a sound and progressive approach towards the question of arbitrability, by choosing not to tread on the ambiguous path laid down by Booz Allen and instead choosing to follow the latest and more nuanced test laid down in Vijay Drolia. By doing so, the Court, instead of making blanket observations rendering an entire category of disputes inarbitrable, has provided some much-needed clarity as to when would insolvency proceedings create third party rights and truly become in rem in nature. This is also consistent with the proposition that disputes should become inarbitrable only when they create an erga omnes effect and not due to the mere involvement of rights in rem. To quote an example, an intellectual property right is a right in rem, however, a dispute relating to the licensing of a patent, is purely between the owner and the licensee and is, therefore, inter partes. It has no effect erga omnes and should be amenable to arbitration. Similarly, an insolvency proceeding becomes in rem only when it effects third party rights, i.e., upon admission, and if there is no admission, such disputes are fully capable of being settled by arbitration.

PREVENTION OF DRESSING UP OF CLAIMS

Further, by holding that an insolvency proceeding becomes in rem only upon admission, the Court has put in place a system which would prevent the “dressing up” of reliefs in so far as insolvency disputes are concerned. The Bombay High Court in the case of Rakesh Malhotra vs Rajinder Kumar Malhotra & Ors. described “dressed up” reliefs as reliefs which are designed as such to evade the arbitration clause. By the virtue of the impugned decision (Indus), a party would no longer be able to simple evade or wriggle out of the arbitration clause, by merely filing an insolvency application and claiming that the dispute has become inarbitrable. The Adjudicating Authority would necessarily have to determine the question relating to the existence of a default, which would in turn bring out the true nature of the dispute.

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