An Escrow Arrangement is a monetary instrument whereby a third-party, i.e. an Escrow Agent, holds liquid assets for the benefit of two parties who have entered into an exchange/transaction, and dispenses it upon the fulfilment of a specific set of obligations on the part of both the parties under a contract.
An Escrow Agreement generally inculcates the following information:
- Credentials of the appointed Escrow Agent;
- Escrow Funds and the contingencies for its disbursement;
- Specific utility of the funds by the Escrow Agent;
- Duties, Liabilities, Fees, and Expenses of the Escrow Agent;
- Jurisdiction and Venue in the event of legal action; etc.
Popular Purposes of an Escrow Agreement: The primary purpose of an escrow agreement is to ensure that each party adheres to their end of the bargain, and can be seen as a mediator of the transaction since the transfer of assets is contingent upon the fulfilment of the terms set under the agreement.
This kind of setup may be used for agreements that have the following characteristics: i. Large Transaction Value;
- Standard quality of work to be ensured by the Buyer, prior to its payment;
- Seller’s uncertainty of undertaking large-scale work without any assurance of payment;
- Where the transaction needs to be completed in steps, i.e. partial release of funds upon the completion of predetermined milestones; etc
Escrow Arrangements are largely incorporated in the areas of real estate, leases, mortgages, online transactions, mergers and acquisitions, project finance transactions, and transactions involving overseas market. India’s Position on Escrow Mechanism:
India’s 163rd position in the world for enforceability of contracts calls for the emergence of escrow arrangements as a unique and novel mechanism in its commercial sectors that adds an extra layer of transparency in the payments’ ecosystem, aiding in the development of trust.
Escrow, despite being an age-old concept globally, has so far been restricted to the sectors of M&A, real es tate, etc., but has been on the rise owing to the dynamic technological and internetbased economy. Qualifications for an Escrow Agent:
An Escrow Agent, as stated above, is an individual/entity that holds valuable assets, as a fiduciary responsibility, for third parties while a transaction is being finalized or a disagreement is resolved. Assuming the role of an escrow agent by attorneys is a common practice worldwide, however, to understand the stance in India, the principles laid down in two judgments have to be taken into account.
In Jeweltouch (India) Pvt. Ltd. v. Naheed Hafeez Quraishi & Ors., it was observed that an escrow agent could be appointed by the concerned parties as such person who shall determine whether a promise or precondition has been satisfied or not so as to warrant the release of documents from escrow. “Parties to a deed, by the lodgment of the document in escrow evince an intent that the document shall be released subject to the fulfilment of the condition under which it is held in escrow. Documents which are held in escrow are sometimes delivered into the custody of a stranger while on other occasions, they are held as an escrow by an attorney acting for all parties thereto. Halsbury, in fact, postulates that a document may be handed over as escrow even to a Solicitor for a party to benefit under the deed provided it is handed over to him as the agent of all parties for the purpose of such delivery.”
In Siddhivinayak Realties (P) Ltd. v. Tulip Hospitality Services Ltd, “an ‘escrow arrangement’ is normally arrived at in order to safeguard the interest of the parties for the purpose of a contract… The ‘escrow agents’, normally, are persons who are trusted by the parties of a contract under an escrow arrangement to act fairly and without bias notwithstanding their relationship with the respective parties”.
A rough analysis of the abovementioned excerpts indicates that any third-party/ stranger could be authorized as an escrow agent if the parties agree to do so. However, attorneys representing the parties are generally vested with the responsibility of keeping such documents and assets in escrow, and performing such services as directed by the parties per the terms of the tripartite agreement. Advocates may also be jointly appointed as escrow agents by the parties, as is evident from the facts of these cases.
REGULATION OF ESCROW ACCOUNTS AND ESCROW AGENTS
An Escrow account is a financial instrument which holds an asset or escrow money through a third party on behalf of and at the direction of two other parties that are in the process of completing a transaction. Such accounts can hold money, securities, funds, and other assets. While it’s an old concept globally, it has remained restricted to merger & acquisition deals. But with changing technology and the rise of internet based economy, this instrument is getting democratized with stakeholders from several sectors using it to have safe and secure transactions.
GUIDELINES ON REGULATION OF PAYMENT AGGREGATORS AND PAYMENT GATEWAYS DATED 17/03/2020
Payment Aggregators (PAs) and Payment Gateways (PGs) are intermediaries that play a vital role in facilitating payments through the online platform. PAs are those bodies who facilitate e-commerce sites and merchants in the acceptance of various payment instruments from the customers to ensure the completion of their payment obligations without the need for merchants to create a separate payment integration system of their own. They, essentially, facilitate the conjunction of merchants with acquirers while receiving payments from customers, pooling and transferring it to the merchants after a specific period of time. Further, PGs are such bodies that provide the technological infrastructure to route and facilitate the processing of an online payment transaction without any involvement in handling of funds.
Initially, pre-paid instrument (PPI) issuers and payment aggregators (PA) were required to maintain one escrow account with a commercial bank. However, the Reserve Bank of India (RBI) vide a circular dated November 17, 2020 has allowed payment companies to maintain more than one escrow account with a scheduled commercial bank with a view to diversify risk and address concerns pertaining to business continuity. Escrow Accounts are majorly regulated under Clause 8 of the dated 17/03/2020, i.e. ‘Settlement and Escrow Account Management’. The compliances to be ensured by PAs are as follows:
The amount collected by non-bank PAs is required to be maintained in an escrow account with a Scheduled Commercial Bank (SCB), and for this purpose, the operations of PAs are deemed to be designated payment systems under Section 23A of the Payments and Settlement Systems Act (PSSA), 2007
Amounts debited from the customer’s account is remitted to the bank maintaining the escrow account on Tp+0 / Tp+1 basis, where Tp is the date of charge / debit to the customer’s account against the purchase of goods / services. Similar rules shall be deemed applicable to the nonbank entities where wallets are used as a payment instrument.
Guidelines for final settlement with the merchants are effectuated by the PAs based on the following situation:
It’s the PA’s responsibility to deliver the goods or services; It would be the Merchant’s responsibility to deliver the goods or services;
and Agreement with the merchant provides for maintenance of the amount by the PA till the expiry of its refund period.
Credits towards reversed and refund transactions to be routed back through the escrow account, except when as per the contract the refund is directly managed by the merchant and the customer is aware of it.
The amount in the escrow account shall at no time be less than the collectibles from the customer or as due to the merchant.
PAs are permitted to prefund the escrow account with their own or the merchant’s funds, whereas they’re entitled to the beneficial interest on such pre-funded portion.
Escrow Account cannot be made operational for Cashon-Delivery transactions.
Certain credits/debits have been permitted to be made to the escrow account, as under Clause 8.9 of the Guidelines: “Credits: a) Payment from various customers towards purchase of goods / services; b) Pre-funding by merchants / PAs; c) Transfer representing refunds for failed / disputed / returned / cancelled transactions; d) Payment received for onward transfer to merchants under promotional activities, incentives, cash-backs etc.” and “Debits: a) Payment to various merchants / service providers; b) Payment to any other account on specific directions from the merchant; c) Transfer representing refunds for failed / disputed transactions; d) Payment of commission to the intermediaries. This amount shall be at pre-determined rates/frequency; e) Payment of amount received under promotional activities, incentives, cash-backs, etc.”
Balances outstanding in the escrow accounts of the banks shall be deemed to be part of the Net Demand Time Liabilities (NDTL) to maintain reserve requirements. The entity and the escrow account banker shall be responsible for compliance with RBI instructions issued from time to time. The decision of RBI in this regard shall be final and binding. A list of acquired merchants shall be submitted by the PAs to the banks maintaining the escrow accounts, and shall be updated in a timely fashion.
No interest shall be payable by the bank over the balances in escrow accounts, except when specifically agreed upon for the transfer of the ‘core portion’ of the minimum requisite amount, subject to certain contingencies.
Escrow Account’s balance and the core portion is to be clearly disclosed in the auditors’ certificate on a quarterly and annual basis. Securities and Exchange Board of India (Substantial Acquisition of Shares & Takeovers) Regulations, 2011: Scheduled Commercial Banks are to hold escrow accounts and act as escrow agents. Such escrow account may be in the form of: cash deposited with any scheduled commercial bank; bank guarantee issued in favor of the manager to the open offer by any scheduled commercial bank; or
Deposit of frequently traded and freely transferable equity shares or other freely transferable securities with appropriate margin. The acquirer is to create an escrow account towards the security for performance of his obligations under the SAST regulations, not later than 2 working days prior to the date of the open offer for acquiring shares is issued.
An aggregate amount has to be deposited in the escrow account as per the provided schedule. The SAST regulations, further, provide for the ways in which the disbursements would occur for different forms of the escrow accounts, as mentioned above, and the modes of their payments for consideration; etc.
Terms & Conditions for Opening of Escrow Account and Special Account by Non-Resident Corporates for Open Offers / Delisting / Exit Offers dated 24/05/2007: Acquisition / Transfer of shares shall be strictly in accordance with the provisions of Notification No. FEMA 20/2000-RB dated 3rd May, 2000 as amended from time to time and SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997 or any other SEBI Regulations as applicable.
The accounts shall be noninterest bearing, and the Escrow Account may be opened in Indian Rupees, jointly and severally for the purpose, with the following permitted credits and debits: Permitted credits: Foreign Inward Remittance through normal banking channels; and Permitted debits: as per SEBI (SAST) Regulations or any other SEBI Regulations, as applicable.
A Special Account may be opened in Rupees, jointly and severally for the purpose, with the credit and debits as per SEBI (SAST) Regulations or any other SEBI Regulations, as applicable.
The resident mandatee empowered by the overseas acquirer for this purpose, may operate the Escrow Account in accordance with SEBI Regulations, and with the specific approval of the AD Category – I bank with whom the account is opened. No fund based / non-fund based facilities shall be permitted against the balance in the accounts.
Requirement of compliance with KYC guidelines issued by RBI shall rest with the AD Category – I bank. Balance in the Escrow Account, if any, may be repatriated at the then prevailing exchange rate (i.e. the exchange rate risk will be borne by the overseas company acquiring the shares), after all the formalities in respect of the said acquisition are completed.
In the event, the proposal under the said acquisition/ transfer does not materialize, the AD Category – I bank may allow repatriation of the entire amount lying to the credit of the Escrow Account on being satisfied with the bonafides of such remittances.
The accounts shall be closed immediately after completing the requirements as outlined above.
Escrow Arrangements are a unique tool of effectuating transactions in a smooth fashion. Escrow Accounts could prove to be beneficial for niche companies or startups by aiding them to secure their transactions based on some contingencies. As regards their specific-use transactions, such as those pertaining to procurements, supply chain, etc., such companies and businesses may leverage escrow payment methods so as to minimize the standard of risk that might exist otherwise.
An escrow mechanism facilitates efficient and safe business transactions in a manner that aids in a business’ seamless evolution. Whereas, the extensive regulatory and auditory compliances put in place by the authorities mark the determining point of its safety. The regulatory push around escrow seems to be on the right path where a more transparent online payments ecosystem is required to be created.
However, more awareness has to be ensured amongst people regarding such escrow arrangements and facilities by elucidating the function of a temporary, tripartite financial agreement that helps two parties to transact worry-free in a secure manner.
Escrow arrangements are a unique tool of effectuating transactions in a smooth fashion. Escrow
accounts could prove to be beneficial for niche companies or startups by aiding them to secure
their transactions based on some contingencies. As regards their specific-use transactions, such as
those pertaining to procurements, supply chain, etc, such companies and businesses may leverage
escrow payment methods so as to minimise the standard of risk that might exist otherwise.
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Counsel entitled to physically accompany party to remote point while giving evidence via video conferencing: Karnataka HC
In a very significant development, we saw how just recently on 24 June 2022, the Karnataka High Court has in an extremely learned, laudable, landmark and latest judgment titled K Lakshmaiah Reddy vs V Anil Reddy & Others in Writ Petition No. 10926 of 2022 and cited in 2022 LiveLaw (Kar) 237 held in no uncertain terms that a counsel/advocate appearing for the parties are entitled to be physically present at the remote point from where the evidence of such party is being recorded through video conferencing. It must be mentioned here that a Single Judge Bench of Justice Sachin Shankar Magadum allowed the petition filed by one K Lakshmaiah Reddy who had challenged the order of the Trial Court which had declined permission that was sought by his counsel to be present at the remote point while recording of the evidence. Very rightly so!
To start with, this brief, brilliant and balanced judgment authored by a single Judge Bench of the Karnataka High Court comprising of Justice Sachin Shankar Magadum sets the ball rolling by first and foremost putting forth in para 1 that, “The captioned writ petition is filed by the defendant No.2 questioning the order dated 30.05.2022 passed on memo filed by the petitioner/defendant No.2. Under the impugned order, the learned Judge has declined permission sought by the counsel appearing for the present petitioner/defendant No.2 to be present at the remote point while recording evidence of defendant No.2.”
To put things in perspective, the Bench then envisages in para 2 that, “The present petitioner is a resident of Michigan, USA and is aged about 87 years and is suffering from various health issues. Therefore, the petitioner filed applications in I.A.Nos.27 and 28 under Rule 6 of the Video Conferencing Rules and also application in I.A.No.36 under Order 18 Rule 16 of CPC to examine the petitioner immediately. The said applications were allowed by the Trial Court thereby permitting the present petitioner/defendant No.2 and defendant No.5 to record their evidence through Video Conference. The Trial Court accordingly with the consent of parties to the suit, fixed the date of recording evidence through video conferencing on 06.06.2022. The petitioner filed memo on 25.05.2022 requesting the Court to make further e-mail correspondence towards logistic support and to inform the remote point coordinator to issue 5 entry passes to enable the petitioner to have assistance of his Advocate and also attendants.”
While stating the precise reason behind filing of petition, the Bench then specifies in para 3 that, “The contesting defendants filed statement of objections to the said memo. The learned Judge vide impugned order at Annexure-A has refused to permit the petitioner’s Advocate to be present at the remote point while recording evidence of defendant No.2. It is this order which is under challenge.”
To be sure, the Bench then states in para 14 that, “Before I advert to the controversy involved between the parties, it would be useful for this Court to refer to the relevant Rules framed by this Court which is titled as “Rules for Video Conferencing for Courts”. The relevant definitions are culled out as under:
“2(v) ‘Court Point’ means the Courtroom or one or more places where the Court is physically convened, or the place where a Commissioner or an inquiring officer holds proceedings pursuant to the directions of the Court.
2(x) ‘Remote Point’ is a place where any person or persons are required to be present or appear through a video link. 2(xii) ‘Required Person’ includes:
a. the person who is to be examined; or
b. the person in whose presence certain proceedings are to be recorded or conducted; or
c. an advocate or a party in person who intends to examine a witness; or
d. any person who is required to make submission before the Court; or
e. any other person who is permitted by the Court to appear through video conferencing.””
Needless o say, the Bench then mentions in para 21 that, “The respondents are objecting the presence of counsel at the remote point. The moot question that has to be examined before this Court is, as to whether the Court is vested with discretion to permit the counsel on record to be present at the remote point along with his client?”
It would be instructive to note that the Bench then enunciates in para 22 that, “Rule 14 refers to ‘Conduct of proceedings’. It would be useful for this Court to refer to Rules 14.1 and 14.7 which reads as under:
“14.1 All Advocates, Required Persons, the party in person and/or any other person permitted by the Court to remain physically or virtually present (hereinafter collectively referred to as participants) shall abide by the requirements set out in Schedule I.
14.7 The Court shall satisfy itself that the Advocate, Required Person or any other participant that the Court deems necessary at the Remote Point or the Court Point can be seen and heard clearly and can clearly see and hear the Court.””
For sake of clarity, the Bench then clarifies in para 23 that, “On perusal of Rule 14.1, it is clearly evident that the said Rule clearly contemplates and enables all Advocates, required persons, party-in-person either to remain physically or virtually present who are collectively referred to as participants. The only rider to the said sub-rule is that the participants are required to abide by the requirement set out in Schedule-I to the Rules. Therefore, the “Required Person” as defined under Rule 2(xii) would not necessarily mean that it is only the witness, who has to be examined, has to be physically present at the remote point. This Court is unable to understand as to how the counsel on record can be denied a right of audience at the remote point. Rule 14 clearly contemplates and permits all Advocates including required persons or party-in-person to be physically present at the remote point. Further, Rule 14.7 also gives discretion to the Court in a given case to permit the Advocate or any other participants that Court deems necessary at the remote point or Court point.”
Frankly speaking, the Bench then observes in para 24 that, “The definition “Required Person” and further persons who can be permitted to be present at the remote point as contemplated under Rule 8.11 cannot be so narrowly construed and interpreted so as to exclude a counsel. If such a proposition is accepted, that would take away the valuable rights of a client who is entitled for apt assistance by his counsel on record. It is an established tradition that a trusting relationship between a client and Advocate is necessary for effective representation. Therefore, legal assistance before a witness is examined or cross-examined plays a vital role. The counsel appearing for either of the parties are the most important actors of most court room interactions. The Advocates on record are the central influence in the court room. Therefore, personal contact between a counsel and his client stand together in Court and therefore, is deemed very important in establishing trust which would ultimately result in establishing a litigants’ faith in the legal system overall and this trust is often built by the Advocates on record who are also officers of the Court. Mere presence of Counsel of a deponent under cross-examination at remote point would result in either prompting or tutoring the witness.”
Most forthrightly, the Bench then states in para 25 that, “The definition “Required Person” under Rule 2(xii) coupled with Rule 8.11 authorizing a coordinator at the remote point to ensure that no person is present at the remote point cannot be read in isolation. The above said relevant rules have to be conjointly read along with Rules 14.1 and 14.7. A witness is entitled for legal assistance even when he is cross-examined. However, at the time of cross-examination, his counsel cannot prompt or tutor him. Based on mere apprehension, the above said rules cannot be narrowly interpreted so as to exclude the counsel on record who is an integral part of legal system and plays a vital role in dispensation of justice. The Advocates admittedly play a role as an Officer of the Court. His presence at the time of cross- examination of his witness is further more essential. It is a common fact that cross-examination often involves a battle of wits between cross-examiner and witness. At times, Advocates cross-examining the witness may have to use guile to expose the unreliability of the witness, as when the latter is lulled into a false sense of security and does not realise that he is being trapped or set up for questions which will effectively challenge him. Advocates often adopt such an approach which are essential to break the effect created by the witness in examination-in-chief or in his affidavit of the evidence in chief. Therefore, it is the counsel appearing for the witness who is subjected to cross-examination can object to the questions posed to the witness which are found to be contrary to ethical rules. In such circumstances, it is the Advocate who has to meticulously watch the proceedings of cross-examination and has to be vigilant to see that Advocate who is cross-examining does not lie or put untruths to the witness. The essence of the principle here is that the cross- examiner must not act dishonestly. He must not mislead the Court as well as the witness who is being cross-examined. Therefore, the presence of Advocate also plays a vital role when his witness is being cross-examined at the remote point. The presence of Advocate at the remote point would create a sense of security and would help him to face test of cross-examination. That cannot be misconstrued to such an extent that it would amount to prompting or tutoring. His mere presence at the remote point will not violate the Rules.”
Quite commendably, the Bench then holds in para 26 that, “Therefore, in the present case on hand, defendant No.2 is entitled to seek legal assistance even when he is being cross-examined by way of video conferencing. Using video conferencing, the defendant’s rights cannot be sacrificed in the name of procedural efficiency. The adversarial model which is adopted for several decades cannot be abandoned under the garb that the Rules relating to video conferencing does not permit. Adversarialism is a cornerstone of the legal process; the system is predicated on this tenet. Denial of legal assistance while recording ocular evidence of a witness through video conferencing violates fundamental fairness.”
In the present context, the Bench then also makes it clear in para 27 that, “Looking to the recent trend, video conferencing does have a place in the legal system. The challenge is not to exclude it but to use it responsibly. The video conferencing can produce better results, but at the same time, certain highlighted issues which may prop up down the line have to be addressed effectively. The client is entitled to seek assistance and therefore, the clients interaction with his counsel on record is quite essential to a fair trial and a person who is supposed to be cross-examined is entitled to meet his counsel ahead of time to discuss every anticipated questions, concept or a piece of evidence. The Rules that are framed by this Court governing recording of evidence through video conferencing require all participants to follow the Rules in terms of Schedule-I which is annexed to the Rules.”
As a corollary, the Bench then observes in para 28 that, “It is in this background, the proposition floated by the counsel appearing for the contesting respondents cannot be acceded to. An Advocate should always be with his client. The Rules framed by this Court do not intend to support plaintiffs team or a defence team. The counsel appearing for respective clients are entitled to stand together and the same is necessary for an attorney-client relationship to function properly. A medium that interferes with the court’s main mission should be eliminated.”
Quite forthrightly, the Bench then also clearly states in para 29 that, “The contesting parties are entitled to have a discussion with their Advocates on record as they need to discuss important decisions concerning vital documents, basic legal strategy prior to appearing in Court. Personal meetings are better for hastening out case strategies, fact gatherings and basic legal tactics. Therefore, it is in this context, if the proposition of respondents is accepted and if counsel appearing for a witness who is supposed to be cross-examined is denied a right of audience at a remote point, the apprehension that the ocular evidence recorded through video conferencing will not satisfy the prescribed requirements of a fair trial and the same would create a doubt in regard to legitimacy of a legal process may turn out to be a hard reality. Therefore, denial of right of audience to a counsel on record has its own ramifications and may result in violation of fundamental fairness and may also have impact on due process of law.”
Furthermore, the Bench then states in para 30 that, “By introducing technology and by bringing in recording of ocular evidence through video conferencing, an attempt is made in all good faith to meet the standards of face-to-face trial. By bringing in new Rules, the Courts have to meet the established standards and traditions in recording evidence physically in the open Court. The dignity and ritual of physical presence in the Court was found to be absolutely necessary for public perception of justice. A very ceremony of trial and presence of fact finder may exert a powerful force for truth telling. The opportunity to judge the demeanor of a witness face-to-face is accorded great value in our tradition. Now in a given case, where parties consent to record ocular evidence through video conferencing has to meet the above said standards. There is an apprehension that non-verbal cues are unavailable or harder to read when associated with video conferencing. Therefore, the presence of counsel of a witness to be cross-examined at a remote point becomes further more essential.”
What’s more, the Bench then stipulates in para 31 that, “In the light of the discussions made supra, now let me see whether the Court is vested with discretion to permit the counsel appearing for a witness who is supposed to be cross-examined to be present at the remote point. The remote point has to be considered as an extended court room. A Court includes a physical court and a virtual court and if a Court can have court point at one or more place, then the Rules clearly prescribe that the counsel on record can be present at all point either in the Court physically or through a video link or at a remote point physically. Rule 14.1 clearly contemplates persons who are entitled to participate in court proceedings. Rule 14.1 clearly indicates that all Advocates and required persons are entitled to remain physically or virtually present. A discretion is also vested with the Court under Rule 14.7 and it is well within the discretion of the Court in a given set of facts to permit Advocate, required person or any other participants that court deems necessary at the remote point or at the court point. If at all any mischief is played during the course of recording evidence, the Court is better placed to hold an enquiry in regard to any mischief that would be complained.”
Of course, the Bench then rightly points out in para 32 that, “Unlike face-to-face hearing, a Judge has a privilege of replaying the recording and find out as to whether the witness is hoaxed or tutored. The court can also examine whether counsel on record has interfered and assisted the witness under cross-examination. The guidelines set out in Schedule-I coupled with Rule 5.6.4 clearly provides adequate protection. It is in this background, this Court would find that the apprehension of the respondents and objections raised in regard to entitlement of counsel on record to be physically present at remote point appears to be misconceived.”
Most significantly, the Bench then lays down in para 33 that, “If the order under challenge is tested in the light of the above said discussions made supra, this Court is of the view that the order under challenge is not at all sustainable. Mere bald allegations that if the counsel is permitted to be physically present at remote point, then every possibility of petitioner getting prompted, tutored or coaxed cannot be acceded to and such an objection is not at all sustainable. In fact, Rule 14 which lays down guidelines for conducting proceedings through video conferencing clearly contemplates and authorizes all Advocates to be present physically at remote point. A discretion is also vested with the Court in a given set of facts to permit the counsel or any other unconnected participants to be physically present at the remote point. It is in this background, this Court would find that the learned Judge erred in not exercising discretion judiciously. Therefore, the finding of the learned Judge that counsel appearing for the present petitioner/defendant No.2 is already present at the remote point and he can join recording of evidence by joining the link does not satisfy the requirements of a fair trial. The learned Judge erred in not exercising judicial discretion by permitting the counsel appearing for defendant No.2 to be physically present at the remote point.”
In addition, the Bench then also most commendably notes in para 34 that, “If a coordinator at the remote point is already available and if the entire ocular evidence is video recorded, any slight mischief can be easily taken notice of and the consequences would follow if the counsel contravenes any of the courtesies and protocols applicable to a physical Court. Therefore, I am of the view that the counsel appearing for the defendant No.2 is entitled to be physically present at the remote point.”
Finally, the Bench then concludes by holding in para 35 that, “For the reasons stated, supra, I pass the following:
(i) The writ petition is allowed;
(ii) The impugned order dated 30.05.2022 passed in O.S.No.66/2016 on the file of the III Additional City Civil & Sessions Judge, Bengaluru is set aside. Consequently, the memo dated 25.05.2022 filed by the petitioner/defendant No.2 is allowed;
(iii) The coordinator at the remote point shall ensure that while recording evidence of the petitioner/defendant No.2, the persons who are permitted to be present at the remote point will not indulge in interfering with his cross-examination;
(iv) Before commencing with the recording of evidence of petitioner/defendant No.2, the Court shall satisfy itself that the counsel appearing on behalf of petitioner/defendant No.2 can be seen and heard clearly at the remote point;
(v) The Court shall also monitor and take all necessary precautions that recording of ocular evidence of petitioner/defendant No.2 is conducted by strictly following the Rules.”
In essence, the Karnataka High Court has thus made the entire picture pretty clear in this notable judgment about counsel being entitled to physically accompany a party to remote point while giving evidence via video conferencing. We have already discussed it in detail. It merits no reiteration that all the courts must definitely pay heed to what the Karnataka High Court has held so very explicitly in this leading case!
Accused can’t be convicted for charge which is not framed by trial court, says Karnataka HC
It is worth mentioning that the Bench then observes in para 23 that, ‘Having heard the respective counsel and also on perusal of the material available before the court, the trial court imposed a fine of Rs 4,000 each and accordingly, accused No.1 deposited the fine amount and whether the accused No.2, the revision petitioner herein, has deposited the amount or not is not forthcoming. Admittedly, this petitioner has also not challenged the same in any appeal before the Appellate Court i.e., the sentence of fine imposed by the trial court’.
While fully, firmly and finally espousing the legal right of the accused, the Karnataka High Court in an extremely learned, laudable, landmark and latest judgment titled M Ajithkumar vs The State By Food Inspector, Koppa in Criminal Revision Petition No. 1527/2016 and cited in 2022 LiveLaw (Kar) 234 that was pronounced finally on June 24, 2022 has set aside the conviction that was handed down under the Prevention of Food Adulteration Act by the Trial Court for a charge which it did not frame against the accused and remanded the matter back to be considered afresh. A Single Judge Bench of Justice HP Sandesh while allowing the petition filed by one M Ajithkumar said that, “There is a glaring error on the part of the Trial Court since charge has been framed for Section 7(1) of the Act and conviction and sentence is passed for the violation of Section 7(2) of the Act. The Appellate Court also failed to take note of this aspect into consideration and concentrated mainly on the minimum sentence.” We thus see that the Karnataka High Court very rightly sets aside the conviction and sentence order passed by the court below.
To start with, this refreshing, remarkable, robust and rational judgment authored by a Single Judge Bench of Hon’ble Mr Justice HP Sandesh sets the ball rolling by first and foremost putting forth in para 1 that, “This criminal revision petition is filed under Section 397 of the Code of Criminal Procedure, 1973 praying this Court to set aside the judgment passed by the Civil Judge and JMFC, Koppa dated 24.04.2013 in C.C.No.451/2008 and also set aside the judgment dated 09.11.2016 passed in Crl.A.No.233/2013 by the Principal District and Sessions Judge, Chikkamagaluru and acquit the revision petitioner for the offences alleged against him and grant such other relief as deems fit in the circumstances of the case.”
While elaborating on prosecution case, the Bench then states in para 2 that, “The factual matrix of the case of the prosecution is that the Food Inspector, Koppa has visited the shop belonging to the accused No.1-M. Umar on 16.02.2008 situate at Koppa and inspected the food articles and examined 20 packs each containing 200 miligrams of sungift refined cooking oil and found that there is adulteration in the said oil and noticed that the said oil was supplied by the revision petitioner and filed the complaint against the accused persons stating that they have violated Section 7(2) of the Prevention of Food Adulteration Act, 1954 (‘the Act’ for short) and thereby committed the offence punishable under Section 16(a)(i) of the said Act.”
Needless to say, the Bench then specifies in para 3 that, “Based on the complaint, cognizance was taken against this revision petitioner and accused No.1 and both of them not pleaded guilty. Hence, the prosecution, in order to prove their case, examined P.Ws.1 to 4 and relied upon the documents Exs.P1 to P13(a) and two memo of objects were marked as M.Os.1 and 2 containing sungift refined cooking oil.”
To put things in perspective, the Bench then envisages in para 4 that, “The Trial Court, after considering both oral and documentary evidence placed on record, convicted both the accused and imposed sentence of fine of Rs.4,000/- each, failing which they are liable to serve the sentence of simple imprisonment for seven months. The accused No.1 paid the fine amount and the prosecution also challenged the inadequate sentence and filed appeal in Criminal Appeal No.233/2013 and the First Appellate Court reversed the judgment of the Trial Court and imposed sentence of six months vide judgment dated 09.11.2016. Hence, the revision petitioner-accused No.2 has filed this revision petition.”
As we see, the Bench then stipulates in para 22 that, “Having heard the respective counsel and also on perusal of the material on record, the points that would arise for consideration of this Court are:
(i) Whether the revision petitioner has made out a ground to exercise the revisional jurisdiction to set aside the orders passed by the Trial Court as well as the First Appellate Court?
(ii) What order?”
It is worth mentioning that the Bench then observes in para 23 that, “Having heard the respective counsel and also on perusal of the material available before the Court, the Trial Court imposed fine of Rs.4,000/- each and accordingly, accused No.1 deposited the fine amount and whether the accused No.2, the revision petitioner herein has deposited the amount or not is not forthcoming. Admittedly, this petitioner has also not challenged the same in any appeal before the Appellate Court i.e., the sentence of fine imposed by the Trial Court. However, the State has filed an appeal before the First Appellate Court on the ground of inadequate sentence. Hence, the Appellate Court modified the sentence of simple imprisonment for a period of six months, instead of fine of Rs.4,000/-.”
No doubt, the Bench then rightly points out in para 24 that, “The first and the foremost contention of the learned counsel for the revision petitioner before this Court is that there was no adulteration and it was only a misbranding. The counsel also relied upon the document Ex.P10 i.e., the report received from the Divisional Public Analyst cum Regional Assistant Chemical Examiner, Mysuru Division, N.P.C. Hospital Compound, Nazarbad, Mysuru, wherein it is opined that the sample sent for analyst is not adulterated but, it is misbranded wide label-3(e) and the said report is given on 6th day of March, 2008. On perusal of the records of the Trial Court, it is seen that the charge was framed on 18th August, 2011 subsequent to receipt of the report. On perusal of the charges, it is seen that the trial Judge has framed the charge for the offence under Section 7 of the Act, particularly, Section 7(1) in respect of adulteration of food and Section 7(2) is in respect of misbranding food. The charge has been framed for the offence under Section 7(1) i.e., adulteration of food and that is not the case of the prosecution and the case of the prosecution is misbranding.”
Be it noted, the Bench then most commendably enunciates in para 25 that, “On perusal of the complaint which is dated 8th July 2008 particularly, page No.2 in the bottom, it is stated that the information given in the packet is erroneous and also referred that the report of the analyst is misbranded and categorically mentioned in page No.3 that there is violation of Section 7(2) of the Act, punishable under Section 16(a)(i) of the Act. However, the allegation against this petitioner is that he has not issued cash bill in terms of Section 14 of the Act and he had distributed the oil packet, wherein also specifically mentioned that the petitioner has violated Section 7(2) of the Act, punishable under Section 16(a)(i) of the Act. But, the trial Judge has framed the charge for the offence under Section 7(1) of the Act and not for the offence under Section 7(2) of the Act. It is also important to note that the complaint dated 8th day of July, 2008 is subsequent to the receipt of the report from the analyst which is marked as Ex.P10 which is dated 6th day of March, 2008. Hence, it is clear that the report is received on 6th day of March, 2008 and complaint is filed in the month of July i.e., 8th day of July, 2008 and inspite of it, though allegation is in respect of Section 7(2) of the Act, the Trial Court framed the charge for the offence under Section 7(1) of the Act. Hence, very framing of the charge itself is erroneous.”
Most forthrightly, the Bench then mandates in para 26 that, “It has to be noted that the trial Judge, even while passing the judgment invoked Section 7(2) of the Act punishable under Section 16(a)(i) of the Act and not altered the Section from 7(1) to 7(2) of the Act. It is also rightly pointed by the learned counsel for the revision petitioner that no notice was given to invoke Section 7(2) of the Act and though the same is noticed by the Trial Court, the charge has been framed for violation of Section 7(1) of the Act and punishment was provided for the violation of Section 7(2) of the Act. Hence, there is a glaring error on the part of the Trial Court since charge has been framed for Section 7(1) of the Act and conviction and sentence is passed for the violation of Section 7(2) of the Act. The Appellate Court also failed to take note of this aspect into consideration and concentrated mainly on the minimum sentence. Hence, the very judgment of the Trial Court as well as the First Appellate Court requires to be set aside on the ground that the charge has been framed for violation of Section 7(1) of the Act and conviction and sentence has been passed for violation of Section 7(2) of the Act.”
Most significantly, the Bench then holds in para 27 that, “The other contentions of the learned counsel for the revision petitioner are that, no authorization to file any complaint and the delegatee also cannot delegate the powers. He also would contend that no notification was produced regarding appointment of Food Inspector and the independent witnesses have not been examined. It is also his contention that non-furnishing of report of Public Analyst and misbranding of label does not require any opinion from the Public Analyst. When charge has not been properly framed and conviction and sentence is passed for in respect of violation under Section 7(2) of the Act, it is appropriate to set aside the judgments of both the Trial Court as well as the First Appellate Court by keeping open the other contentions of the learned counsel for the revision petitioner and remand the matter to the Trial Court for framing appropriate charges and consider the matter afresh. If need arises, the Trial Court shall also permit the prosecution as well as the revision petitioner to adduce evidence before the Trial Court since, proper charge has to be framed and an opportunity has to be given to the revision petitioner to meet the case of the prosecution and unless the charge is specific, meeting the case of the prosecution by the defence is also very difficult. Hence, the judgment and sentence passed by the Trial Court as well as the First Appellate Court is not legally sustainable in the eye of law and it requires fresh consideration. Accordingly, I answer point No.(i) as ‘affirmative’.”
Finally and far most significantly, the Bench then concludes by holding in para 28 that, “In view of the discussions made above, I pass the following:
(i) The criminal revision petition is allowed.
(ii) The judgment passed by the Civil Judge and JMFC, Koppa dated 24.04.2013 in C.C.No.451/2008 and the judgment passed by the Principal District and Sessions Judge, Chikkamagaluru dated 09.11.2016 in Crl.A.No.233/2013 are set aside. The matter is remanded to the Trial Court to consider the matter afresh in accordance with law within a period of six months, since the matter is of the year 2008.
(iii) The revision petitioner and the prosecution are directed to appear before the Trial Court on 25th July, 2022 without expecting any notice.
(iv) The respective parties are directed to assist the Trial Court in disposal of the case within the stipulated time.
(v) The Registry is directed to transmit the records forthwith to the concerned Court.”
In a nutshell, the Karnataka High Court has thus not left even a straw of doubt to make it indubitably clear that the accused can’t be convicted for a charge which is not framed by the Trial Court. It merits no reiteration that all the Courts must definitely pay heed to what the Karnataka High Court has held in this leading case. Of course, we thus see that the matter has been very rightly remanded to the Trial Court to consider the matter afresh in accordance with the law within a period of six months, since the matter is of the year 2008 as mentioned above. No denying it.
Be it noted, the Bench then most commendably enunciates in para 25 that, “On perusal of the complaint which is dated 8th July 2008 particularly, page No.2 in the bottom, it is stated that the information given in the packet is erroneous and also referred that the report of the analyst is misbranded and categorically mentioned in page No.3 that there is violation of Section 7(2) of the Act, punishable under Section 16(a)(i) of the Act. However, the allegation against this petitioner is that he has not issued cash bill in terms of Section 14 of the Act and he had distributed the oil packet, wherein also specifically mentioned that the petitioner has violated Section 7(2) of the Act, punishable under Section 16(a)(i) of the Act”.
Friendly relations not consent to establish physical relations: Bombay High Court
The complainant herself has narrated the repeated incidents when they indulged in sex, on an assurance by the applicant that he is going to marry her. The complainant conceived and was found to be carrying six weeks’ pregnancy. She immediately contacted the applicant, but he refused to take up any responsibility and, on the other hand, blamed her for her ‘bad character’ and alleged that she is in relationship with some other person. Repeatedly, she kept requesting the applicant to marry her, but he refused.
While clearly drawing the red lines most distinguishably for boys in cases of establishing physical relations with a girl, the Bombay High Court in an extremely commendable, cogent, courageous and composed judgment titled Ashish Ashok Chakor vs State of Maharashtra in Anticipatory Bail Application No. 1676 of 2022 as recently as on June 24, 2022 in exercise of its criminal appellate jurisdiction minced just no words to hold that a girl merely being friendly with a boy doesn’t allow him to misconstrue it as her consent to establish a sexual relationship with her and rejected the anticipatory bail application of a man accused of impregnating a woman under the pretext of marriage. It must be mentioned here that the Single Judge Bench of Hon’ble Smt Justice Bharati Dangre rejected the pre-arrest bail that was filed by one Ashish Chakor who was accused of raping a woman under the pretext of marriage and booked him under Sections 376(2)(n), 376(2)(h) and 417 of the IPC. No doubt, this extremely laudable judgment by the Bombay High Court should serve as a very loud and strong message to all males that they cannot hide under the guise of friendly relations to develop physical relations with any female and if they dare to do so then they must be prepared to face the horrendous consequences by finding themselves landing in jail for a good number of precious years thus spoiling their whole life!
To start with, this recent, refreshing, robust, remarkable and rational judgment authored by a single Judge Bench of the Bombay High Court comprising of Hon’ble Smt Justice Bharati Dangre sets the ball rolling by first and foremost putting forth in para 1 that, “The applicant is apprehending his arrest in C.R.No.462 of 2022 lodged with M.H.B. Colony Police Station for the offences punishable under Sections 376(2)(n), 376(2)(h) and 417 of the IPC. The complainant is a girl aged 22 years, who was briefly acquainted with the present applicant. Somewhere in the year 2019, when she alongwith her friend had visited a residential premises of a third friend, the applicant is alleged to have committed forcible sexual intercourse with her. When she opposed, he expressed that he likes her and in any case, he is going to marry her. Thereafter, on multiple occasions, the act was repeated. The complainant herself has narrated the repeated incidents when they indulged into sex, on an assurance by the applicant that he is going to marry her. The complainant conceived and was found to be carrying six weeks’ pregnancy. She immediately contacted the applicant, but he refused to take up any responsibility and on the other hand, attributed her a bad character and alleged that she is in relationship with some other person. Repeatedly she kept requesting the applicant to marry her, but he refused.”
On the face of it, this prima facie reflects that the men himself is at fault and he had no business to indulge in physical relationship with her. Not just this, he even promised to marry her but later retracted. This clearly demonstrates that he is culpable and cannot be exonerated for what he has done so very wrongly!
Truth be told, the Bench then mentions in para 2 that, “Upon such a complaint, referring to the incidents occurring between 17/05/2019 to 27/04/2022, the complaint has been lodged. As far as the last incident is concerned, even on 27/04/2022, the complainant states that he had forcibly committed sexual intercourse with her.”
To be sure, the Bench then brings out in para 3 that, “Reading of the complaint would reveal that the girl, who is major, developed a liking for the applicant, but her version as far as the sexual relationship is concerned, is that she permitted it, since the applicant gave a promise of marriage. The sexual relationship was established on multiple occasions on the promise of marriage. However, when the girl conceived, the applicant attributed infidelity, but once again committed forcible sexual intercourse with her on the last date as mentioned in the complaint.”
Finally and far most significantly, the Bench then minces just no words to hold so very rightly in the last para 4 that, “Merely sharing friendly relationship with a girl do not permit a boy to take her for granted and construe it as her consent to establish physical relationship. In today’s society when a man and woman are working together, it is quite possible that proximity may develop between them, being either mentally compatible or confiding in each other as friends, ignoring the gender, since friendship is not gender based. However, this friendship with the person of fairer sex, does not confer a licence upon a man to force himself upon her, when she specifically refuse copulation. Every woman expects ‘Respect’ in a relationship, be it in the nature of friendship based on mutual affection. Here is the applicant, who is accused of maintaining sexual relationship on the pretext of marriage, but when the complainant conceived, he walked out alleging that pregnancy carried by her is on account of her relationship with other persons. The accusations faced by the applicant definitely require a thorough investigation to ascertain the version of the prosecutrix that she was forced to give her consent for sex. The application is rejected.”
In conclusion, the Single Judge Bench of the Bombay High Court comprising of Hon’ble Smt Justice Bharati Dangre has been forthright enough to hold that this friendship with the person of fairer sex, does not confer a licence upon a man to force himself upon her, when she specifically refuse copulation. It is also very rightly held that every woman expects ‘Respect’ in a relationship, be it in the nature of friendship based on mutual affection. We thus see that the anticipatory bail application of the men is thus rightly rejected as he took undue advantage of friendly relations to establish physical relations and gave false assurances of marriage which cannot be condoned. So it merits no reiteration that he had to face the consequences and the same was accordingly ensured by the Bombay High Court in this leading case so very rightly! No denying it!
It must be mentioned here that the Single Judge Bench of Hon’ble Smt Justice Bharati Dangre rejected the pre-arrest bail that was filed by one Ashish Chakor who was accused of raping a woman under the pretext of marriage and booked him under Sections 376(2)(n), 376(2)(h) and 417 of the IPC. No doubt, this extremely laudable judgment by the Bombay High Court should serve as a very loud and strong message to all males that they cannot hide under the guise of friendly relations to develop physical relations with any female and if they dare to do so, then they must be prepared to face the horrendous consequences by finding themselves landing in jail for a good number of precious years, thus spoiling their whole life.
Bharat Ratna moments
Enormous opportunities for deriving a sense of satisfaction.
I had mentioned in my book ‘Ethical Dilemmas of a Civil Servant’ that “I love to look back upon the years gone by with utmost satisfaction. I loved every moment of it”. There is also an explanation in the book about the reason for this ‘enjoyment’. I have used the term “kick” as the cause of this enjoyment. There were many such occasions during my career when I enjoyed this “kick”, my Bharat Ratna moments and some of these have been outlined in the first two books, “Ethical Dilemmas of a Civil Servant” and “No More a Civil Servant” that I authored. One such illustration is given below:
I was on a visit to the World Bank for a presentation before a select audience on the Rashtriya Swasthya Bima Yojana (RSBY, the national health insurance scheme that was launched in 2007 and the one that has now morphed into Prime Minister’s Jan Aarogya Yojana, PMJAY). During this visit to the US, a Washington-based organisation—Brookings Institute invited me to talk about the scheme to another set of audience comprising government representatives, non-governmental organisations and some funding agencies like the Bill Gates Foundation. The presentation went smoothly, and was apparently received well. However, what is etched in my memory is the conversation with a representative of a foundation during the tea break. The question he posed was quite simple, ‘‘Mr Swarup, why are you so passionate about the scheme? What are you getting out of it? What is the government giving you beyond your salary?’’ My response took a while. It was clear that, during my presentation, I had conveyed a level of commitment to the scheme that was beyond the expectation of a thoroughbred bureaucrat. I asked him, “What do you get when you part with millions of dollars to help the poor in developing countries?” His reply did not surprise me, “That is our job and our purpose. We additionally get a lot of good wishes from those that are assisted by us.” He now awaited my response. My answer was simple, “I am better off than you. I don’t spend a single penny from my pocket, yet all the good wishes and blessings from the poor benefitting under the scheme come back to me. What could be a better motivation!’ and then I narrated an incident to illustrate my point.
“Beta, idhar aao,’ (Come here, my son) — a feeble voice called me as I stood in a Delhi hospital. I was there to check in on a patient. Turning around I found an old lady lying in a bed nearby. She waved and signalled me to come over to her. As I approached, I saw an emaciated figure that looked weak and haggard. She tried to get up, but could not. The pain was writ large on her face, but she greeted me with a smile. Someone had told her that I was associated with the Rashtriya Swasthya Bima Yojana. She had the RSBY smart card in her hand and she was flashing it to me. As I enquired about her welfare, she confessed that she was in pain, but conveyed her appreciation for the hospital staff that had looked after her very well despite her inability to pay a single penny to them. She seemed resigned to her fate as she admitted that time had come for her to meet the Almighty. But I wasn’t prepared for what came next. She was all praise for the scheme and she said that she would convey this to the Almighty when she would meet Him and seek His blessings for the scheme. Gradually she gathered the strength to sit up and raised her hand to bless me. It was a Bharat Ratna moment for me. The scheme has won several awards, but this one was the best.
The scheme, RSBY covered 300 million poorest of the poor in the country. Many of whom actually benefitted and some of whom would have been dead but for the scheme. As an IAS officer I had the opportunity to visualize, conceptualize, articulate and implement this scheme that came to be recognized by institutions like the World Bank that considered it as a “model of good design and implementation with important lessons for other programmes in India”. United Nations Development Programme (UNDP) and International Labour Organization (ILO) recognized the scheme as one of the top social security schemes in the world.
There are many opportunities for such recognition and sense of satisfaction in other jobs as well but in the IAS there is such an opportunity available in most of the assignments. To me these are Bharat Ratna moments. This is what makes it different from other jobs. However, a lot depends upon the officer concerned. As I write in ‘Ethical Dilemmas of a Civil Servant’, the inspiration for exploring avenues to derive satisfaction has to come from within. This inspiration can be sought from such officers who have managed to succeed and serve the country and its people despite some adverse set of circumstances. Many such examples have been given in my recently released book, “No More a Civil Servant”. These examples relate to the good work being done by officers, organizations and NGOs in their respective domains despite all the problems. The onus lies on the civil servant himself to resolve the dilemma that he faces while keeping his dignity and self-respect intact, as he, like any other individual, has no control over the others. The control that he has is over himself. And, hence, he has to focus on himself. He has to evolve in a manner that those who want to corrupt him aren’t able to muster courage to do so. His conscience and ethics must be his firewall. It is difficult but it has been done. Hence, it can be done.
Anil Swarup has served as the head of the Project Monitoring Group, which is currently under the Prime Minister’s Offic. He has also served as Secretary, Ministry of Coal and Secretary, Ministry of School Education.
Preventive Detention Can’t Be Invoked For Law And Order Situation: SC
While underscoring that the preventive detention law “strikes hard on the freedom and liberty of an individual, and cannot be exercised in a routine manner”, the Supreme Court in an extremely laudable, learned, landmark and latest judgment titled Shaik Nazneen vs The State of Telangana & Ors in Criminal Appeal No. 908 of 2022 (@ SLP (Crl.) No. 4260 of 2022) and cited in 2022 LiveLaw (SC) 559 has observed that “the powers to be exercised under this law are exceptional powers which have been given to the government for its exercise in an exceptional situation”. It must be noted that the Apex Court has once again clearly highlighted the distinction that while a law and order situation can be dealt with under the ordinary law of land, it is only when there is a public order situation that the invocation of the powers under the law of preventive detention is justified, absent which the preventive detention would be bad and would be in violation of Articles 21 and 22 of the Constitution as it encroaches upon the liberty and freedom of an individual. The Apex Court Bench of Justice CT Ravikumar and Justice Sudhanshu Dhulia were hearing an appeal against the March judgment of the Telangana High Court by which the Habeas Corpus Writ Petition of the petitioner-wife challenging the order of prevention of detention of her husband had been dismissed.
To start with, this brief, brilliant, bold and balanced judgment authored by Apex Court Bench comprising of Justice CT Ravikumar and Justice Sudhanshu Dhulia sets the ball rolling by first and foremost putting forth in para 1 that, “This appeal challenges the order dated 25.03.2022 passed by the High Court of Judicature for the State of Telangana at Hyderabad by which the Habeas Corpus Writ Petition bearing No. 35519 of 2021 of the petitioner-wife challenging the order of prevention of detention of her husband has been dismissed.”
To put things in perspective, the Bench then envisages in para 2 that, “The brief facts of the case are that the prevention detention order was passed against the husband of the petitioner on 28th October, 2021 by the Commissioner of Police, Rachakonda Commissionerate on grounds that the detenu was involved in gold chain snatching offences, where victims were mostly women. He has been doing this since the year 2020 in the States of Andhra Pradesh and Telangana. He was involved in as many as 36 gold chain snatching offences. Earlier, the detenu, along with three others, had formed a gang to commit these offences in order to make quick money. It was alleged that they had come to Hyderabad in a car bearing No. AP 39 TU 5033 and took shelter in a lodge. Their modus operandi was to first conduct recce of some residential areas and after selecting a suitable residential area, lift two wheelers and motor cycles which were then used in the chain snatching offences. Although according to the Authority the detenu was involved in more than 30 cases but only 4 cases of chain snatching were considered as ground for detention, as the other cases were reported to be behind the proximity period and out of the jurisdiction of Commissionerate. The four cases on which reliance has been placed are as under:
“(1) Crime No. 355 of 2021 for the offences under Sections 392, 411 read with 34 IPC of Medipally Police Station.
(2) Crime No. 358 of 2021 for the offences under Sections 392, 411 read with 34 IPC of Medipally Police Station.
(3) Crime No. 532 of 2021 for the offence under Section 392 read with 34 IPC of Medipally Police Station.
(4) Crime No. 533 of 2021 for the offences under Sections 392, 411 read with 34 IPC of Medipally Police Station.””
Briefly stated, the Bench then specifies in para 3 stating that, “In short, against the detenu the F.I.Rs primarily an offence of ‘robbery’ under section 392 of the Indian Penal Code. The detention order also says that the crimes were committed in broad day light and have thus resulted in creation of fear and panic in the minds of the general public, especially women and hence, the Government had to interfere in order to “maintain public order”.”
It must be noted that the Bench then discloses in para 4 that, “The said four cases were allegedly committed by the detenu within a span of two months between 06.05.2021 to 26.07.2021 and were committed within the jurisdiction of one police station i.e., Medipalli police station. In all these cases, the detenu had moved bail applications before the concerned Metropolitan Magistrate and was granted bail under Section 167 (2) Cr.P.C, which is commonly known as ‘default bail’ and the detenu was released on 16.10.2021. The detention order was later passed on 28.10.2021, which was subsequently confirmed by the Advisory Council on 13.01.2022, i.e., within the stipulated time. The detenu is under detention since 28.10.2021.”
While referring to the relevant law in this regard, the Bench then lays bare in para 5 stating that, “The Preventive Detention Law, under which the powers have been exercised is a long winded statute called the “Telangana Prevention of Dangerous Activities of Boot-Leggers, Dacoits, Drug-Offenders, Goondas, Immoral Traffic Offenders Land-Grabbers, Spurious Seed Offenders, Insecticide Offenders, Fertiliser Offenders, Food Adulteration Offenders, Fake Document Offenders, Scheduled Commodities Offenders, Forest Offenders, Gaming Offenders, Sexual Offenders, Explosive Substances Offenders, Arms Offenders, Cyber Crime Offenders and White Collar or Financial Offenders Act, 1986”(hereinafter referred to as `the Act’). Powers have been exercised under Section 3 of the Act which reads as under:
“3. (1) The Government may, if satisfied with respect to any boot-legger, dacoit, drugoffender, goonda, immoral traffic offender [Land-Grabber, Spurious Seed Offender, Insecticide Offender, Fertilizer Offender, Food Adulteration Offender, Fake Document Offender, Scheduled Commodities Offender, Forest Offender, Gaming Offender, Sexual Offender, Explosive Substances Offender, Arms Offender, Cyber Crime Offender and White Collar or Financial Offender] that with a view to preventing him from acting in any manner prejudicial to the maintenance of public order it is necessary so to do, make an order directing that such person be detained.
(2) If, having regard to the circumstances prevailing or likely to prevail in any area within the local limits of the jurisdiction of a District Magistrate or a Commissioner of Police, the Government are satisfied that it is necessary so to do, they may, by order in writing, direct that during such period as may be specified in the order, such District Magistrate or Commissioner of Police may also, if satisfied as provided in sub-section (1), exercise the powers conferred by the said subsection:
Provided that the period specified in the order made by the Government under this sub-section shall not in the first instance, exceed three months, but the Government may, if satisfied as aforesaid that it is necessary so to do, amend such order to extend such period from time to time by any period not exceeding three months at any one time.
(3) When any order is made under this section by an officer mentioned in sub-section (2), he shall forthwith report the fact to the Government together with the grounds on which the order has been made and such other particulars as in his opinion, have a bearing on the matter, and no such order shall remain in force for more than twelve days after the making thereof, unless, in the mean time, it has been approved by the Government.””
To be sure, the Bench then points out in para 6 that, “The powers have been exercised in the present case under section 3(1) of the Act. Under the aforesaid provision, inter alia, a detention order can be passed against a “goonda”. A “goonda” has been defined under Section 2 (g) of the Act, which reads as under:
“2. g) “goonda” means a person, who either by himself or as a member of or leader of a gang, habitually commits, or attempts to commit or abets the commission of offences punishable under Chapter XVI or Chapter XVII or Chapter XXII of the Indian Penal Code.”
It deserves mentioning that the Bench then notes in para 7 that, “Since the allegation is that the detenu is involved in four cases of chain snatching i.e., robbery, which comes under offences given under Chapter XVII of the Indian Penal Code, he has been declared a habitual offender and thus a “goonda” vide the detention order dated 28.10.2021.”
As we see, the Bench then observes in para 8 that, “Now under section 3(1) of the Act, detention order can be passed, inter alia, against a “goonda”, “with a view to prevent him from acting in any manner prejudicial to the maintenance of public order…”. Due to the detenu’s alleged involvement in four criminal cases relating to “robbery” he has been declared a “goonda” and it is said that this is acting in a manner which is “prejudicial to the maintenance of public order”.”
Be it noted, the Bench then mandates in para 9 that, “A bare reading of the aforesaid provision shows that the “maintenance of public order” has a crucial bearing here and unless the Government is justified in holding that the act of the detenu is prejudicial to the maintenance of public order, the preventive detention would be bad and would be in violation of Articles 21 and 22 of the Constitution of India as it encroaches upon the liberty and freedom of an individual.”
Of course, the Bench then mentions in para 10 that, “The detention order was challenged by the wife of the detenu in a Habeas Corpus petition before the Division Bench of the Telangana High Court. The ground taken by the petitioner before the High Court was that reliance has been taken by the Authority of four cases of chain snatching, as already mentioned above. The admitted position is that in all these four cases the detenu has been released on bail by the Magistrate. Moreover, in any case, the nature of crime as alleged against the petitioner can at best be said to be a law and order situation and not the public order situation, which would have justified invoking the powers under the Preventive Detention Law. This, however did not find favour with the Division Bench of the High Court, which dismissed the petition, upholding the validity of the detention order.”
Simply put, the Bench then specifies in para 11 that, “Shri Rahul Gupta, learned counsel for the Petitioner before this Court has confined his arguments on two aspects. Firstly, the detenu is allegedly involved in four criminal cases where he has been granted bail, and that too has been granted as the prosecution, in all four cases, failed to file its charge sheet in time. Now they cannot resort to the law of Preventive Detention. Secondly, even assuming the allegations of the prosecution to be correct, then too it only reflects a “law and order” problem and not a “public order” problem as mentioned under the Act.”
Quite forthrightly, the Bench then candidly concedes in para 13 that, “The reason why bail was granted in all four cases, however, has not been given. Bail was granted in all the four cases due to the inability of the prosecution, which did not complete its investigation in time. The bail had to be given as the charge sheet was not filed by the police in all the cases within the stipulated period of 60 days. The fault thus lies with the prosecution.”
While setting the record straight, the Bench then also pointed out aptly in para 14 that, “The other reason assigned is that the Trial Court while granting bail did not lay down any conditions. This is again a wrong presentation of the case. Conditions were not imposed simply as it was a default bail, and in bail of this nature conditions are not liable to be imposed.”
Most significantly, the Bench then minces no words to hold in para 15 that, “Having heard the learned counsel for the petitioner and learned counsel for the State of Telangana, we are of the considered view that in the present case invocation of the Preventive Detention Law against the petitioner was not justified. The powers to be exercised under the Preventive Detention Law are exceptional powers which have been given to the Government for its exercise in an exceptional situation as it strikes hard on the freedom and liberty of an individual, and thus cannot be exercised in a routine manner. The distinction between law and order situation and a public order situation has been dealt with by the Supreme Court in a catena of decisions. In the case of Ram Manohar Lohia Vs. State of Bihar, it has been held as under:
51. “We have here a case of detention under Rule 30 of the Defence of India Rules which permits apprehension and detention of a person likely to act in a manner prejudicial to the maintenance of public order. It follows that if such a person is not detained public disorder is the apprehended result. Disorder is no doubt prevented by the maintenance of law and order also but disorder is a broad spectrum which includes at one end small disturbances and at the other the most serious and cataclysmic happenings. Does the expression “public order” take in every kind of disorders or only some of them? The answer to this serves to distinguish “public order” from “law and order” because the latter undoubtedly takes in all of them. Public order if disturbed, must lead to public disorder. Every breach of the peace does not lead to public disorder. When two drunkards quarrel and fight there is disorder but not public disorder. They can be dealt with under the powers to maintain law and order but cannot be detained on the ground that they were disturbing public order. Suppose that the two fighters were of rival communities and one of them tried to raise communal passions. The problem is still one of law and order but it raises the apprehension of public disorder. Other examples can be imagined. The contravention of law always affects order but before it can be said to affect public order, it must affect the community or the public at large. A mere disturbance of law and order leading to disorder is thus not necessarily sufficient for action under the Defence of India Act but disturbances which subvert the public order are. A District Magistrate is entitled to take action under Rule 30(1) (b) to prevent subversion of public order but not in aid of maintenance of law and order under ordinary circumstances.
52. It will thus appear that just as “public order” in the rulings of this Court (earlier cited) was said to comprehend disorders of less gravity than those affecting “security of State”, “law and order” also comprehends disorders of less gravity than those affecting “public order”. One has to imagine three concentric circles. Law and order represents the largest circle within which is the next circle representing public order and the smallest circle represents security of State. It is then easy to see that an act may affect law and order but not public order just as an act may affect public order but not security of the State. By using the expression “maintenance of law and order” the District Magistrate was widening his own field of action and was adding a clause to the Defence of India Rules.””
While referring to recent case laws, the Bench then states in para 16 that, “In two recent decisions [Banka Sneha Sheela Vs. State of Telangana (Crl.A.No.733/2021) ; Mallada K. Sri Ram Vs. State of Telangana (Crl.A. No. 561/2021)], this Court had set aside the detention orders which were passed, under the same Act, i.e., the present Telangana Act, primarily relying upon the decision in Dr. Ram Manohar Lohia case (supra) and holding that the detention orders were not justified as it was dealing with a law and order situation and not a public order situation.”
It cannot be glossed over that the Bench then holds in para 17 that, “In any case, the State is not without a remedy, as in case the detenu is much a menace to the society as is being alleged, then the prosecution should seek for the cancellation of his bail and/or move an appeal to the Higher Court. But definitely seeking shelter under the preventive detention law is not the proper remedy under the facts and circumstances of the case.”
Most commendably, the Bench then while referring to latest case law remarks in para 18 that, “In fact, in a recent decision of this Court, the Court had to make an observation regarding the routine and unjustified use of the Preventive Detention Law in the State of Telangana. This has been done in the case of Mallada K. Sri Ram Vs. The State of Telangana & Ors. 2022 6 SCALE 50, it was stated as under:
“17. It is also relevant to note, that in the last five years, this Court has quashed over five detention orders under the Telangana Act of 1986 for inter alia incorrectly applying the standard for maintenance of public order and relying on stale materials while passing the orders of detention. At least ten detention orders under the Telangana Act of 1986 have been set aside by the High Court of Telangana in the last one year itself. These numbers evince a callous exercise of the exceptional power of preventive detention by the detaining authorities and the respondent-state. We direct the respondents to take stock of challenges to detention orders pending before the Advisory Board, High Court and Supreme Court and evaluate the fairness of the detention order against lawful standards.”
Finally, the Bench then concludes by holding in para 19 that, “In view of the above, the appeal stands allowed. The order of detention dated 28.10.2021 and order dated 25.03.2022 of the Division Bench of the High Court of Telangana are set aside. The detenu shall be released forthwith, in case he is not required in any other case.”
All told, the Apex Court has thus made it indubitably clear that preventive detention can’t be invoked for ordinary law and order situations. It has also voiced its utmost concern on routine and unjustified use of preventive detention laws which cannot be allowed to go unchecked and unabated as such preventive detention would be bad and in violation of Articles 21 and 22 of the Constitution as it clearly encroaches on the liberty and freedom of an individual. Very rightly so!
Draconian provisions of NDPS Act misused: Calcutta HC orders mandatory videography of recovery procedure
It is really good to note that in a remarkable, refreshing, robust and rational judgment titled Kalu Sk. @ Kuran v. State in C.R.M. (NDPS) 492 of 2022 with C.R.M. (NDPS) 493 of 2022 and cited in 2022 LiveLaw (Cal) 255 that was pronounced finally on June 22, 2022, the Calcutta High Court has directed that in all cases involving recovery of narcotic substances, seizing officers shall make a video recording of the entire procedure and that reasons for failing to videograph the recovery must be specifically stated in the investigation records. It must be specifically mentioned here that a Bench comprising of Justice Joymalya Bagchi and Justice Ananya Bandyopadhyay opined that all police officers are ordinarily equipped with smart phones and other electronic gadgets which would enable them to videograph such a recovery procedure. It was further observed that reliance on such technology must be placed to instill fairness, impartiality and confidence in the investigative process. The Court conceded that the draconian provisions of the NDPS Act have been misused. This further necessitates mandatory videography of recording procedure as conceded by the Court.
At the outset, the Bench comprising of Justice Joymalya Bagchi and Justice Ananya Bandyopadhyay sets the ball rolling by first and foremost putting forth candidly in the introductory para that, “Disturbing features were noticed in a number of cases including the present one involving recovery of narcotic substance under N.D.P.S. Act. Firstly, the seizure list did not contain signatures of all the accused persons who were alleged to have been arrested from the spot where the recovery was made. Secondly, presence of independent witnesses at the time of seizure appeared to be doubtful, as the said witnesses in their statements before the Magistrate under Section 164 of the Code of Criminal Procedure did not support the seizure. Noticing such discrepancies in the present and other cases, this Court was constrained to issue directions upon the Superintendent of Police of Murshidabad Police District to take steps in the matter including initiation of disciplinary proceedings/suspension of police officers connected with the investigation of the case.”
To put things in perspective, the Bench then envisages in the next para that, “Superintendent of Police is present before us. He has submitted report wherefrom it appears an administrative order has been issued directing all seizing officers to record signatures of accused persons who are apprehended at the time of recovery of narcotic substance in the seizure list. It also appears from the said report, seizing officer, investigating officer of the present case as well as Officer-in-charge of the Police Station concerned has been placed under suspension and departmental proceedings have been initiated against them.”
Without mincing any words, the Bench then concedes in the next para that, “N.D.P.S. Act vests plenary powers of search, seizure and arrest on investigating officers. The power of the court to grant bail is circumscribed by strict restrictions under Section 37 particularly in cases involving commercial quantity. While a strict law is necessary to control organized crime like drug trafficking and protect the youth from the menace of drug abuse, its draconian provisions are sometimes misused by investigating agency leading to false implication and prolonged unjustified detention of individuals. Most of the cases registered under the N.D.P.S. Act revolve around recovery of narcotic substance from the accused. Heart and soul of the prosecution is the legitimacy of such recovery. Prosecution in such cases primarily relies on the evidence of official witnesses particularly seizing officers to prove lawful recovery of contraband. In most cases as in the present case, independent witnesses are either not examined or turn hostile. There may be myriad reasons for that ranging from false implication to winning over of such witnesses by resourceful accuseds.”
Quite forthrightly, the Bench then observes that, “In order to remedy the situation and ensure unvarnished truth is placed before the court during adjudication, it is imperative that the investigating agencies resort to modern technology and videograph the recovery of narcotics.”
While underscoring the need for use of technology by the police, the Bench then points out that, “This Court takes judicial notice of the fact that all police officers are ordinarily equipped with smart phones and other electronic gadgets which would enable them to videograph recovery. When technology is available at the lay level we see no reason why it shall not be utilized to instill fairness, impartiality and confidence in the investigative process. Videography as a modern tool of investigation has been well recognised in law. In fact, the Field Officers’ Handbook issued by Narcotics Control Bureau, inter alia, directs the search team to carry video camera amongst other equipments for the purpose of search. (See Chapter 3 – Operation: Preparation, Co-ordination and Planning). In chapter 6 relating to “Recovery and Seizure” video recording of seizure of narcotics has been mandated as under:-
“Video:- A lot of times the witnesses and suspect allege foul play by the search team during the trial proceedings alleging that they were not present at the time of recovery. To avoid such a situation, all recovery and concealment methods should be videographed simultaneously if possible, recording the presence of the owner/occupant of the premises and the witnesses. This acts as a deterrent later during trial proceedings.””
Lamentably, the Bench then also points out the most worrying part as stated in the next para that, “Unfortunately, even in cases conducted by NCB, such directives are mostly observed in the breach.”
Be it noted, the Bench then points out that, “It may also be apposite to note use of videography in investigation was examined by a Committee constituted by the Ministry of Home Affairs in 2017. The Committee observed videography of crime scene as “desirable and acceptable best practice”. The Committee issued various directives for the purpose of preparation, capacity building and implementation of such procedure on a mandatory basis.”
While continuing in the same vein, the Bench then enunciates that, “The Committee also suggested a group of experts to be set up at the level of Government of India to issue guidelines and advisories. State Police and the Central investigating agencies were also advised to set up steering committees to spearhead the drive. State and Central agencies were also suggestive to designate a Senior Officer in the rank of IG/ADG as Nodal Officer for the preparation, capacity building and implementation of videograph in investigation.”
While citing the relevant case law, the Bench then deems it apposite to state that, “In Shafhi Mohammad Vs. State of Himachal Pradesh (2018) 5 SCC 311, the Apex Court noted the aforesaid report and observed as follows;
“9. We are in agreement with the Report of the Committee of Experts that videography of crime scene during investigation is of immense value in improving administration of criminal justice. A Constitution Bench of this Court in Karnail Singh v. State of Haryana (2009) 8 SCC 539 : (2009) 3 SCC (Cri) 887, SCC para 34 noted that technology is an important part in the system of police administration. It has also been noted in the decisions quoted in the earlier part of this order that new techniques and devices have evidentiary advantages, subject to the safeguards to be adopted. Such techniques and devices are the order of the day. Technology is a great tool in investigation [Ram Singh v. Ram Singh, 1985 Supp SCC 611; R. v. Maqsud Ali, (1966) 1 QB 688 : (1965) 3 WLR 229 : (1965) 2 All ER 464 (CCA); R. v. Robson, (1972) 1 WLR 651 : (1972) 2 All ER 699 (CCC); Tukaram S. Dighole v. Manikrao Shivaji Kokate, (2010) 4 SCC 329 : (2010) 2 SCC (Civ) 112 : (2010) 2 SCC (Cri) 826; Tomaso Bruno v. State of U.P., (2015) 7 SCC 178 : (2015) 3 SCC (Cri) 54; Mohd. Ajmal Amir Kasab v. State of Maharashtra, (2012) 9 SCC 1 : (2012) 3 SCC (Cri) 481; State (NCT of Delhi) v. Navjot Sandhu, (2005) 11 SCC 600 : 2005 SCC (Cri) 1715]. By the videography, crucial evidence can be captured and presented in a credible manner.””
Most forthrightly, the Bench then minced no words to hold that, “The Court further held time was ripe to introduce videography in investigation particularly for crime scene as a desirable and acceptable “best practice” as suggested by the Committee to strengthen the rule of law. It approved the Centrally Driven Plan of Action prepared by the Committee and the timelines mentioned therein.”
Most remarkably, the Bench then also hastens to add in the next para that, “The observations made in Shafhi Mohammad (supra) as well as the guidelines in the Field Officers’ Handbook issued by the Narcotics Control Bureau reinforce our view regarding mandatory videography of recovery proceedings under NDPS Act. Technology has advanced considerably and equipments like smartphones and other electronic devices enabling videography are ordinarily available with seizing officers. Hence, lack of availability of technology or awareness is a non-issue.”
Most significantly, the Bench then holds in the next para what forms the cornerstone of this notable judgment that, “Accordingly, we direct as follows:-
(i) In all cases involving recovery of narcotic substance particularly recovery of narcotic above commercial quantity, seizing officers shall make a video recording of the entire procedure unless for reasons beyond the control of seizing officers, they are unable to do so;
(ii) Reasons for failing to videograph the recovery proceeding must be specifically recorded in the investigation records particularly contemporaneous documents including seizure/inventory list;
(iii) Superior Police Officer not lower than the rank of Additional Superintendent of Police shall monitor recovery of narcotic substance above commercial quantity within their territorial jurisdiction and ensure due compliance of statutory provisions regarding search and seizure including compliance of the directives (i) and (ii) relating to videography of recovery and/or recording of adequate reasons for departure from such procedure;
(iv) Non-compliance of the directives (i) and (ii) relating to videography of recovery and/or failure to record just reasons in contemporaneous documents for its noncompliance would attract departmental proceeding so far as the seizing officer is concerned;
(v) Director General of Police shall issue necessary directions for due compliance with the aforesaid directives;
(vi) Superintendent of Police/Commissioner of Police in each district/commissionerate shall undertake training programmes to spread awareness and capacity building of officers regarding compliance of statutory requirements in the matter of search and seizure of narcotic substance under NDPS Act and compliance of the aforesaid directives relating to videograph of recovery including collection, preservation and production of such electronic evidence in Court.”
It is also worth noting that the Bench then made it quite clear that, “We are also of the considered view all Central agencies empowered under the NDPS Act to search and seize narcotic substance ought to comply with the aforesaid requirement of videography of recovery proceedings.”
As it turned out, the Bench then observed that, “Accordingly, it is proposed directive Nos. (i), (ii) and (iv) shall apply to all seizing officers of the Central agencies empowered to search and seize narcotics under NDPS Act. Directive Nos. (v) and (vi) shall apply to the head of the department of the Central agency concerned while Directive Nos. (iii) and (iv) shall apply to all superior officers of the said agency not below the rank as prescribed by the head of the department.”
Of course, the Bench then directs that, “Union of India including NCB shall submit response in this regard on the adjourned date.”
Furthermore, the Bench then specifies in the next para of this learned judgment that, “Director General of Police, West Bengal shall submit report with regard to the compliance of the aforesaid directions on the adjourned day.”
As we see, the Bench then directs that, “Let these matters appear two weeks hence.”
Furthermore, the Bench then also mandates in the next para that, “Registrar General shall communicate a copy of this order to the Union of India including NCB as well as on the Assistant Solicitor Generals of this Court and Director General of Police, West Bengal for necessary compliance.”
Finally, the Bench then aptly concludes by holding in the final para of this extremely laudable judgment that, “Presence of the Superintendent of Police, Murshidabad is noted and dispensed with at present.”
In a nutshell, this brief, brilliant, bold and balanced judgment is certainly worth emulating by all the Courts in India. No doubt, the Courts must always regularly ensure that the draconian provisions of NDPS Act are not misused which can put to trouble an innocent person which cannot be ever justified.
We thus see that the Calcutta High Court very rightly orders mandatory videography of recovery procedure in strict compliance with the rules as stated above. It definitely merits no reiteration that all the courts must definitely pay heed to what the Calcutta High Court has held in this leading case so very commendably, cogently and convincingly!
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