The high profile Aryan Khan’s case has again ignited the public debate on the state of our criminal justice system; on the legal provisions that make bail difficult, if not impossible, under stringent penal laws; and on how similarly situated undertrial prisoners, who are awaiting a decision on their bail applications, are left bewildered, and bitter, as to how the wheels of justice can move faster in some cases than others.
The media attention has also made the provisions of the Narcotic Drugs and Psychotropic Substances Act (NDPS Act) common knowledge. The public now knows about the statutory presumption against the accused for mere possession of illicit articles, as well as the provision that where the Public Prosecutor opposes the bail application of the accused, the Court is to be “satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail”. And in any prosecution for an offence under the Act which requires a culpable mental state of the accused, the Court is to presume the existence of such mental state. The onus is on the accused to prove beyond reasonable doubt the fact that he had no such mental state with respect to the act charged as an offence in that prosecution.
Such provisions are not unique to the NDPS Act. I have had the occasion to examine in my book, Unravelling the Kashmir Knot, similar provisions in anti-terror laws like Terrorist and Disruptive Activities (Prevention) Act (TADA) which was succeeded by Prevention of Terrorism Act (POTA). All such provisions effectively deprive the accused of his liberty without giving him, at the time of such deprivation, an effective opportunity to defend himself.
For instance, both TADA and POTA made the mere unauthorized possession of specified arms and ammunition in a notified area a substantive offence pertaining to terrorist activity. It may be true that the accused was not justified in possessing the specified arms and ammunitions in a notified area, but surely, mere unjustified possession did not necessarily mean that a person was a terrorist. And it would only be at the time of trial that the accused would effectively get an opportunity to rebut the statutory presumption by leading evidence to show that the weapon was not meant to be used for a terrorist act. By then the accused would probably have languished in jail as an undertrial for years, if not decades. Nor would bail have been an option for such accused. Where the Public Prosecutor opposes the bail application, TADA mandated, like the NDPS Act, that the Court, in order to grant bail, must be “satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail” – a mandate which effectively ensured that those booked under TADA would continue to languish in jail. POTA was equally strict; it provided that where the Public Prosecutor opposes the bail application, “no person accused of an offence punishable under this Act or any rule made thereunder shall be released on bail until the Court is satisfied that there are grounds for believing that he is not guilty of committing such offence.”
In my view, such provisions are plainly unconstitutional for the reason that the accused simply has no effective opportunity to defend himself at the time when his liberty is being taken away, resulting in his being condemned to incarceration for cruelly long periods of time awaiting trial. These laws, as also other laws like the Unlawful Activities (Prevention) Act (UAPA), which contain provisions that invert the ordinary criminal rule of “Bail, not Jail” and the presumption of “innocence till proved guilty”, can perhaps be best described as being “lawless” and calculated to keep the accused in jail as undertrials. It is unfortunate that the such provisions have not been struck down. While TADA and POTA may stand repealed, UAPA is very much in force. The incarceration as undertrials assumes importance when one considers the functioning of the Indian legal system – after all, law cannot be divorced from reality. It is common knowledge that pending trial, prisoners languish in our overcrowded jails for decades in dehumanising conditions, even under the general law. It is our prisons that make the accused guilty; they detain them on allegations of commission of one crime, and return them, if returned alive, fitted for the perpetration of many.
Ironically, the first ever PIL in India, Hussainara Khatoon’s case (1979) pertained to the pitiable plight of undertrial prisoners in Patna and Muzzafarpur jails, some of whom did not even know why they were there, others were actually victims of a crime, yet others were children. Many were charged with trivial offences which, as the Supreme Court observed, “even if proved, would not warrant punishment for more than a few months, perhaps for a year or two, and yet these unfortunate forgotten specimens of humanity are in jail, deprived of their freedom, for periods ranging from three to ten years without even as much as their trial having commenced.” The Supreme Court, while declaring that it was a “crying shame on the judicial system which permits incarceration of men and women for such long periods of time without trial”, and expressing its anguish at such “sorry state of affairs” that betrayed “complete lack of concern for human values”, read a right to speedy trial as an essential and integral part of the fundamental right to life and liberty enshrined under Article 21 of the Constitution. The Court declared that it was its own constitutional obligation “as guardian of the fundamental rights of the people, as sentinel on the qui vive” to enforce the fundamental right of the accused to speedy trial by issuing necessary directions to the State which may include positive action. This PIL led to the release of an estimated 40,000 undertrial prisoners on personal or no bond.
I had the good fortune of appearing along with late Kapila Hingorani before the Supreme Court in Hussainara Khatoon’s case when it was eventually disposed off on August 5, 1995 with directions to each High Court to collect statistical information on undertrials in jails within their jurisdiction and to implement the guidelines laid down by the Supreme Court. Interestingly, Justice M.N. Venkatachaliah, former Chief Justice of India, while referring to the legacy of late Kapila Hingorani and of late Nirmal Hingorani in his endorsement to my book, described it as “the great humanism permeating penology from Hussainara Khatoon onwards.” It is indeed regrettable that this “humanism permeating penology” has lost its way. What can be more telling of this than the dismal fact that the undertrial population in our jails was reported in September 2020 to be about 70%, which is substantially more than what was documented by the Law Commission of India in its 78th Report submitted in February 1979 on “Congestion of Under-Trial Prisoners in Jails” – 54.9% as of April 1, 1977.
Included among the reasons for “humanism permeating penology” losing its way is the enforcement of such “lawless laws” by the Indian State on its own people for several decades now. It is no doubt true that terrorism or the trafficking and abuse of narcotic and psychotropic substances are heinous offences, and it is the legitimate concern and responsibility of any state to address such menace in a holistic manner. That does not, however, imply that the laws themselves be skewed in favour of the Indian State merely because it claims good intent. It has often been said that “most of the evil in this world is done by people with good intentions.” The way forward for the Indian State is to improve and strengthen its capacity to perform professionally – right from the time of collection and assimilation of intelligence to registration of cases to investigation to prosecution. That would help the investigating agency in arresting the accused only after collecting adequate and legally admissible evidence which incriminates the accused – instead of the investigating agency using such “lawless laws” to first ensure that the accused remains in jail and adds to the undertrial population while it goes around, at its own pace, to collect evidence in order to figure out what, if any, offence has been committed. As regards the judicial branch of the Indian State, one can only recall the anguished words used by the Supreme Court itself in Hussainara Khatoon’s case. Not only should the Supreme Court take pro-active steps to ensure the implementation of its own excellent guidelines laid down decades ago to address the issue of undertrials, it should also re-examine the patently unconstitutional provisions of the “lawless laws” so as to bring our criminal jurisprudence in line with that of civilised nations subscribing to the Rule of Law.
It appears to have been forgotten that for the citizen to respect and obey the law as also the legal system, both the law and the legal system must accord to the moral sense of the citizen that the treatment meted out to him would be fair, just, reasonable, timely, honest and even-handed. No state anywhere in the world considers itself relieved of its obligations to conform to such sense of morality simply because it is empowered to make law, interpret law, apply law and enforce law. And should any state choose to do so, it does so at its own peril; after all, history tells us that more states are known to have perished from violation of morality rather than of law.
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Intolerance and the search for identity: A history of communal tensions in Bangladesh
“For our language many have died Drawn from the arms of our mother But down the road smeared with their blood I hope freedom will come to this land The simple language of a simple people Will meet the demands of this our land”
The world today has been gifted with the growing sensitization towards religious pluralism that situates itself between the two corridors of religious tolerance and the identification of minority rights. The belief system of one religion is to be accommodated within the structures of a majoritarian religion in order to bring harmony and peace to a country. There are however greater complexities as the dimensions of the political narratives also pose a serious threat sometimes to a country that is polarized by religious hypertrophy.
Bangladesh is celebrating its 50th year of liberation from Pakistani oppression this year. Though very young, this South Asian country has been able to establish itself as a liberal democratic nation. Recognition of Bangladesh as a developing nation from being underdeveloped endorses its effort to make it a functioning democracy in the map of South Asia. It has displayed remarkable progress in public health, education, women empowerment, public administration, overall human development index among other things. However, contrarily, its policies towards securing free religious practice for its citizens are under careful watch by the international communities. Violence against religious minorities is tarnishing the efforts of Bangladeshi liberal leadership for more than the last three decades, resulting in a sharp decline in the religious minority population from 30% in the year 1947 to 9% now.
Bangladesh, as it is known today, was known as East Bengal during British Rule, then East Pakistan under the Pakistani Regime from 1947 till 1971. Irrespective of two major religious communities i.e. Hindus and Muslims, the population is known as Bengalee primarily based on their culture and linguistic equivalences. Undivided Bengal that encapsulates the area consisting of West Bengal and Bangladesh now has a long history of a tolerant progressive human society. There is hardly any record of religious conflicts between these two communities till the middle of the twentieth century when the demand for a separate nation on the religious line began to gain momentum. At the end of the British rule, the two major religious communities i.e. Hindus and Muslims failed to retain the tolerant fabric of Bengali society based on religious harmony for centuries.
The Constitution of Bangladesh was adopted on 4th November 1972 and came to effect on 16th December 1972. Bangladesh was the first country in South Asia to specifically use secularism in its constitution followed by India in 42nd amendment Act in 1976. A decisive change was to ban religious-based political part, Jamaat-e-Islami that opposed Bangladesh’s independence and faced allegations of involvement in the 1971 Bangladesh genocide that was initiated by Pakistani military on all Bengali’s of East Bengal. The Jamaat-e-Islami supported the Pakistani Army During the Awami League’s rule, the Opposition Leader and leftwing cleric Maulana Bhashani talked about a “Muslim Bengal” as opposed to the League’s secular Bengali platform.
The first religious clash between Hindus and Muslims took place in Calcutta, the capital city of undivided Bengal, in 1946 (Aug 16 -Aug 19), resulting in an estimated loss of 10,000 lives of both communities, also known as the Great Calcutta Killing. This is the beginning of a dark chapter of communal disharmony. This was followed by the Noakhali Riots of 1946 (November- December) where the death toll touched around 5000.
In the year 1947, Pakistan was carved out of India as a separate country with a Muslim major population. East Bengal became East Pakistan as it was in the eastern part of Pakistan. Religious intolerance has however grown in Bangladesh over these four decades and the nation has further away from the harmonious grounds of anti-fundamentalism that Sheikh Mujibur Rahman had gifted to the country.
Some of the major incidents of violence against Hindus are Dhaka Riots of 1948, Nacholi Massacre (Rajshahi District), Dhaka Riots, Barisal Riots, Chittagong Riots, Rajshahi Riots -1962, East Pakistan Riot- 1964. Then in the year 1971 during the war of independence against the Pakistani Army, an estimated 3 million people were killed, 200000 women were raped and the majority of these casualties were Hindus.
On the 16th December 1971, 93000 Pakistani Army Surrenders to the Joint forces of Indian Army and Bangladesh Mukti Bahini and Bangladesh becomes an independent nation in south Asia
The country entered the comity of nations under Sheikh Mujibur Rehman, also known as the Bongobondhu or the friend of the Nation. The religious intolerance was given away and there was a greater attempt at protecting the interests of the religious minorities with his Awami League that took up the leadership in the country. But there was a decline in the subjective efforts with the murder of Bangabandhu on the 15th August, 1975, leading to a coup by radical army officers that over the years have given rise to further coup and counter coups, resulting in transfer of power to Major Ziaur Rehman in 1977.
The issue largely resulted from the fact that Ziaur Rehman uplifted the ban on the religious based political party and as a result of such an attempt the Constitution incorporated ideas of social justice from Islamic religious order, removing the tenets of secularism from the Constitution- Bismillahir Ram Rahim or absolute trust and faith in the almighty Allah shall be basis of all actions. Islam has thus been mentioned at least twice in this Constitution.
From 1975 till 1988, there were no such noticeable large scale attacks on Hindus, but it continued at local levels across the country which failed to get attention of the international communities. In 1988 , the then President of Bangladesh , Hussain Mohammad Ershad declared Islam as the National Religion of Bangladesh, also called the State Religion. From 1988 the other two religious groups the Buddhist and the Christian also began to be the target of the majority Muslim communities including Hindus. Though the attacks are being carried out in a routinely fashion , some of the major incidents of atrocities which attracted international attention are described here, in 1989 ,an estimated 400 Hindu temples were destroyed across Bangladesh in reaction to the laying of foundation stone for Ram Temple in the close vicinity of Babri Mosque in Ayodhya, India. In 1991 attacks were carried out in Dhaka, Chittagang, Jessore, Narail, Gaibandha, Mymensingh, Sunamganj and Sylhet. In 1992, at the aftermath of Demolition of Babri Mosque in India, 11 temples were destroyed among many killings, rapes and destruction of property of the Hindus.
Last few years the attacks increased many folds, according to Ain O Salish Kendra (ASK), a human rights body in Bangladesh, from September 2013 till October 2021, the total number of attacks on religious minorities in Bangladesh were 3710, and from 1993 till 2006 the number was 22 . This increasing act of atrocities is contributing to the gradual decline of a religious minority population in Bangladesh, it was 31% in 1947 and now it stands a meager 9%. According to Dr Abul Barkat, Professor of Dhaka University, 11.3 million Hindus fled Bangladesh since 1947.
Communalism is a pervasive phenomenon in the public life of Bangladesh and communal riots have the ugliest expression. This is very similar to the condition in India. Communal riots have two faces – violence and confrontation. Every reason for communal riot appears to be superficial and trivial; though deep within political reasons are rooted. Communal riots in East Bengal are rarely due to religious animosity but that is taken advantage of by the politicians to meet their political and economic interest.
Between January 1972 and January 1975, Bangladesh enjoyed a parliamentary government but then it was a military dictatorship. In 1977, secularism was removed by a Martial law directed during the military dictatorship of Ziaur Rahman. The 5th amendment to the constitution in 1979, that had allowed religious based politics and legitimized the post -1975 regimes after a coup toppled the country’s post-independence government. In 1988, the Parliament of Bangladesh declared Islam as the state religion during the presidency of Hussain Muhammad Ershad.
After the restoration of democracy in 1990, the Bangladesh Nationalist Party (BNP) and Awami League (AL) governments retained Islam as the state religion. At the end of BNP’s 2001-2006 term, the Awami League questioned the appointment of the new Chief Advisor. Awami supporter led protests and violence popularly known as logi boitha movement , which resulted in 40 deaths and 100s(hundreds) of injuries in the first month .On that day Awami League activists severely beat and killed 3 activists of Jamat e Islami in Paltan in front of the TV camera. On 11th January 2007, Chief Advisor Iajuddin Ahmed announced a state of Emergency in Bangladesh. On 12th January 2007, with military backing, the former Bangladesh Bank Governor Fakhruddin Ahmed, who had worked for the World Bank was now sworn in as the Chief Advisor.
Hefajat-e-Islam (HeI) claims it is apolitical, as they do not participate in electoral politics, but they are at the forefront of accumulating religious capital and have emerged as important players in Bangladeshi politics. Hefajat-e-Islam, which literally means ‘protector of Islam’, was established in 2010 as a reaction to the Draft National Women’s Development Policy Bill, proposed by the military-backed caretaker government in 2008.
In 2010, the Bangladesh Supreme Court ruled that the removal of secularism in 1977 was illegal because it was done by an unconstitutional martial law regime. The principle of secularism now co-exists with the state religion. The apex court division on Feb 2nd again this year had revised and declared illegal the 5th amendment. In 2011 finally this Women’s Bill was supported.
In 2011, HeI proved its street power by its student march and 13 charter petitions to the government. This led to a violent bloodshed of the students who had partaken. The Government realized their power in the Shah Bagh protests. In recent times, the extreme street power of these parties is forcing the government to dunk their secular image next into a more Islamic State.
This coming together of AL and HeI though was a crucial factor that helped in the AL’s 2014 and 2018 electoral victories. The death of the supremo, Shafi, has brought the power tussle for succession between Anas Madani, Shafi’s son, and Junaid Babunagori, out in the open. In 2019, the rivalry between senior Nayeb–e–Ameer, Mohibullah Babunagari, and Anas Madani, came to the fore.
After the death of Allama Shah Ahmed Shafi, the Amir of HeI on September 18, 2020, the takeover of the group by radical leaders like Junaid Babunagori, who are opposed to the government, reflects the limitation of the latter’s appeasement policy(Meaning is not clear). While the Ulemas may not be electorally successful, their street power and ideological commitment to their interpretation of religion are swiftly pressing the secularism.
Bangladesh State Minister for Information Murad Hussain has stated that Bangladesh is(has) secular constitution proposed by the Father of the nation, Mujibur Rahman. The judgment came in response to why compelling women to wear religious attire should not be declared illegal. In August this year it was reported that a women’s college in northwestern Natore issued a directive prohibiting students from entering the campus without burqas, also barred them from sport and cultural activities. The high court found the college guilty based on the fact that the 5th amendment is null and void and Bangladesh is a secular nation.
From October 13th to 19th, the riots in Bangladesh defeated the entire fabric of the secularism that the Constitution of Bangladesh abides by. The reports of casualties and deaths, including demolishing of around 80 temples spanning across regions like Cumilla, Chandpur, Noakhali, Chattogram, Bandarban, Cox’s Bazar, Narsingdi and Gazipur only shows that there needs to be one social disassociation to bring around the religious tensions in the region. What is even strange is that the Charter of Medina based on which the Constitution of Bangladesh pulls its resources hardly justifies the secular stand stated in other parts of the Constitution of Bangladesh. Places like Rangpur saw the burning down of around two dozen of hindu houses over a protesting post by a Hindu man over the ongoing conditions of the minorities and even the United Nations Resident Coordinator Mia Seppo condemned the attacks over Twitter. It is only to be seen how the Bangladesh administration deals with the person Iqbal Hossain, identified as the one who placed the Holy Quran in the feet of the Goddess Durga in the Pandal that sparked the entire saga of violence in Bangladesh.
However the gagging of the bloggers, leaders and protestors who are against the heinous communal riots is another side to the acting administration and their public policy and places the citizens in a state of confusion as to the real mode of action in such a state of affairs. The external response from other countries is negligible as India promised no intrusion to settle internal disputes and China is in the grip of declaring another lockdown. This tension of mildness and appeasement since 1971 has stayed always. If this continues to operate, the secular fabric of the Bengalees in the Eastern Bengal shall be washed out and there will be no room for the minorities to live with a dignified standing and the Awami League’s role in propagation of the same shall only be seen as a discomfort in the topography of a state that has seen a lot of divisive politics in the last few years with immense vote rigging for winning the seats of power. The tribals, also minorities, have also faced immense oppressions specially in the militarized hill tracts of the Chittagong. It can only be hoped that the citizens live up to the tenets of their Constitution, where in Article 11, it is mentioned that,” the Republic shall be a democracy in which fundamental human rights and freedoms and respect for the dignity and worth of the human person shall be guaranteed”.
Also Article 32 and 39 mentions the Right to Life and Personal Liberty and The Right to Freedom of thought conscience and speech ( special reference to Digital Security Act, 2018 of Bangladesh) and these must be invoked and protected at all costs in order to quash the violence by taking strict actions against perpetrators without any bias towards religion, creed and sect.
Hefajat-e-Islam (HeI) claims it is apolitical, as they do not participate in electoral politics, but they are at the forefront of accumulating religious capital and have emerged as important players in Bangladeshi politics. Hefajat-e-Islam, which literally means ‘protector of Islam’, was established in 2010 as a reaction to the Draft National Women’s Development Policy Bill, proposed by the military-backed caretaker government in 2008.
Stern law on population control is need of the hour
In recent years, attention has been focused on the problems of overcrowding and efforts to curb population growth. Most modern estimates of global governance under existing conditions range from 4 billion to 16 billion. Depending on the scale used, the full caused concern.
This rapid rise is due to a decrease in mortality (faster than the birth rate), and especially the increase in the age of the population. In 2000 people counted six billion heads. However, the increase (doubled) began to decline after 1965 due to declining birth rates. This article will tell you all about population, growth factors, population growth, and population management solutions such as population control are important to save our next generation resources and whether there will be more demand and more resources.
Population means the total number of creatures that live in a particular area. Population helps us to find the right amount of things and how to do it right. For example, if we all know the real people of the city, we estimate the amount of resources they need. Similarly, we can do the same for animals. When we look at the population, we see how it becomes a definition of anxiety.
Currently, there are two schools of thought for growth theory. The first is the idea of hopelessness made by Rev. Robert Malthus, a British scholar. He believed that the resources available would not be enough for the people of South Africa if the population was not controlled. Another view is the optimistic view made by Julian Simon, who believed that people could bear the brunt of the census because of their knowledge and skills. Therefore, this article will discuss these two ideas to enhance and affect global and environmental resources.
Population growth rate is the rate at which the population increases over a given period of time, which is expressed as a fraction of the first population.
In 1986 the value of the land was 5 billion, and then it continued to increase at an alarming rate, and if this were the case, then by 2061, it would be approx. 10 billion. As the current global population in 2020 grows at a rate of around 1.05% per annum. Population growth is currently estimated at 81 million people a year. The annual growth rate reached its peak in the late 1960s, when it had been around 2%. UN figures show that the world’s population exceeds 7.7 billion. China is the most populous country in the world, with a population of over 1.4 billion. Currently, India has a population of 1,220,800,359, and is ranked second according to the central website compared to all other countries or countries around the world. If we talk about India, Currently, the Indian population stands at about 140 crores. And this fast-growing figure is an obstacle to his economic development. We don’t have a magic wand to reduce the population, even if we put everything in place it will take generations to control it. I agree that it is impossible to reduce the current population size. But it is likely to reduce the rate at which population growth increases.
Now, it is time to get control over it because if it continues, everyone will need to suffer a lot not only economically but naturally.
Now, it is very important for us to get some solution for this problem. There are some solutions which can be beneficial for controlling the population growth.
Education – Once educated people know and understand the damage that results from a high rate of increase. Education, especially education, for women does wonders in controlling population.
High demand for social control law – A two-child policy may be limited by the government of two children allowed in each family, with state benefits being granted only to the first two children previously used in Vietnam. Therefore, there should now be a strong law of social control, whether criticized by a few people or analysed, but now it is a national need.
Easy and affordable access to contraceptives- Ensuring that people quickly access contraceptive tools will help prevent the causes of unwanted pregnancies and births. Contraceptive methods not only serve as an important social control measure but also prevent the spread of sexually transmitted diseases such as AIDS, thus ensuring healthy young families.
Women Empowerment – In many developing countries, women are not considered men by force and power. Such ideas are common in Islamic lands, even in India and Bangladesh. Sexual harassment is a major factor in the increase.
Disseminating information – People get informed and help know the consequences of having too many children. Public and non-government institutions can run public awareness campaigns on how to provide quality education, nutrition, and medical facilities for their children if they need more.
Provision of Incentives – Incentives need to be used to formulate appropriate policy objectives in addressing the problems of development initiatives, including population. Providing health education or perhaps financial incentives is often the most effective way for people.
Delayed marriages – the issue of child marriage is rampant in some densely populated countries such as India, Pakistan, or Bangladesh. Early marriage leads to increased separation.
In conclusion, growth in population can cause problems within the ecosystem, pollution and degradation, and loss of habitat. Therefore, urgent steps have been taken to manage population growth to a level, which will be well managed. With so many solutions to how the population can be controlled, if it can be followed by one person, it knows and lets others know that there will be a big change in society. Therefore, one step can also help control the population.
ADVANTAGE OR DISADVANTAGE
Uttar Pradesh’s population control plan is not only unconstitutional – it may also be disastrous:
The Uttar Pradesh State Law Commission has released the draft population control bill. The theme is “The Uttar Pradesh Population (Control, Stabilization and Welfare) Bill, 2021”, comes after the 2022 Council elections in the country.
Although much of the controversy over the law has focused on whether or not it applies to the Muslim community, the Bill has benefits for all residents, Muslim and non-Muslim, in Uttar Pradesh.
The Bill is proposed to be enacted under the entry of 20A of the Concurrent List set out in Schedule Seven of the Constitution. Included in the same list contains topics that Parliament and the State Assemblies can legislate on. Article 20A, which deals with “human control and family planning” was enshrined in the Constitution in 1976 by the Indira Gandhi government, during the Emergency.
Section 4 of the Bill is entitled “Incentives for Public Servants” and states that those public servants who adopt a “two-child policy on voluntary interest” will be entitled to various benefits. These benefits can also be obtained if the partner of a public servant makes interest.
Benefits include additional pay, 12 months’ maternity leave, housing loan assistance, rent rebates, electricity, water costs and free health care and extension of insurance for a business partner. Section 6 makes these benefits available to members of the general public if they too are willing to “comply with the practice of two children” and be cleansed.
Under these conditions, it is not enough that the public servant / community member in question has two or less children. It is not enough that the obligation is given to a public servant / community member who is said to have no more than two children. It is compulsory for government employees / members of the public to carry interest “voluntarily” regardless of whether they have two children or not in order to receive the maximum benefits.
In its face, the provisions of the Bill violate the literary law of the constitutional right to equality. However, before proceeding with the examination of segregated administrative justice on the basis of sterilization, understanding the various approaches taken by India and China in addressing the “human problem” may be instructive.
An important metaphor for estimating population growth is the “total reproduction rate”. Total birth rate refers to the average number of children a woman has during her reproductive years. The total fertility rate of 2.1 is considered fair, as this means that a woman will give birth to two children with her partner, and these two children will take the place of their parents when they pass away. An additional feature of the 0.1 accounts for children who may not have reached the age of majority or not past their parents.
In 1980, when a strict one-child policy was introduced in China, the total birth rate was 2.61. In 2019, the total number of births in China dropped to only 1.69 per woman after thirty-one and a half years of strict child-enforcement policy. In 2015, China State abolished the policy of one child – the Chinese people were allowed two children.
According to the Centre’s Economic survey of 2018-’19, 62.5% of India’s population is between the ages of 15 years and 59 years and is expected to peak in 2041. As per the Union government’s projections in the survey, India’s total fertility rate is likely to touch the ideal replacement level of fertility of 2.1 this year.
According to the Bill, it is necessary to regulate and bring stability to the people of the country in order to ensure sustainable development. Therefore, proponents of the Bill must first demonstrate that interest is the key to ensuring that the people of the state are governed and settled. Once they are able to do so, they will need to show that controlling population growth ensures sustainable development.
While it is difficult to challenge the goals of the Bill – sustainable economic development is undoubtedly a well-established constitutional framework – the accepted means of violating Article 14. Even considering that interest is a legitimate basis for treating people differently, the purpose of the Bill is not achieved by promoting interest.
The fatal theory underpinned by the Bill is that a reduction in total fertility will lead to sustainable economic development. If the purpose of the Bill was to control the people, it could be argued that incitement would achieve this goal. However, given that the purpose of the Bill is sustainable economic development, and such development is hampered, it does not continue, in the case of overall fertility rates, the court must find that segregation on the basis of sterilization is unconstitutional.
The Bill is proposed to be enacted under the entry of 20A of the Concurrent List set out in Schedule Seven of the Constitution. Included in the same list are topics that Parliament and the State Assemblies can legislate on. Article 20A, which deals with “human control and family planning” was enshrined in the Constitution in 1976 by the Indira Gandhi government, during the Emergency.
AN ADVOCATE CANNOT BE BOTH POWER OF ATTORNEY HOLDER OF CLIENT AND HIS COUNSEL: DELHI HC
In a very significant development, we see that the Delhi High Court has as recently as on November 17, 2021 in a learned, laudable, landmark and latest judgment titled Anil Kumar and Anr. Vs Amit and other connected matters in C.R.P. 75/2020 & CM APPL. 29472/2020 and others has minced absolutely no words to state in simple, straight and suave language that the practice of advocates acting as power of attorney holders of their clients and also as advocates in the matter, is contrary to the provisions of the Advocates Act, 1961. It also added that, “Any advocate who is engaged by a client would have to play one role, i.e., that of the advocate in the proceedings and cannot act as a power of a attorney holder and verify pleadings and file applications or any other documents or give evidence on behalf of his client.” It must also be added here that the Court was dealing with three petitions arising out of three different suits pertaining to the same property.
To start with, this brief, brilliant, bold and balanced judgment authored by a single Judge Bench of Justice Prathiba M Singh of the Delhi High Court sets the ball rolling by first and foremost putting forth in para 1 that, “This hearing has been done through hybrid mode.”
As we see, the Bench then points out in para 2 that, “These petitions arise out of three different suits relating to the same property bearing No. WZ-50B-F, measuring 281 sq.yds. out of khasra No.698, situated in the abadi of Old Lal Dora (1908-09) of Village Basai Darapur, Delhi.”
Needless to say, the Bench then states in para 3 that, “C.R.P. 75/2020 arises out of the impugned order dated 18th November, 2019, in CS No. 734/2018 titled Amit v. Anil & Ors., by which the application of the Petitioner/Defendant No.2 (hereinafter “Defendant”) under Order VII Rule 11 CPC has been rejected. In the other two petitions, the applications under Order VII Rule 11 CPC have been dismissed in default.”
Simply put, the Bench then envisages in para 4 that, “C.R.P. 42/2021 arises out of the impugned order dated 5 th February, 2021, in CS No. 198/2019 titled Amit v. Ashok Kumar & Ors., by which the application of the Defendant under Order VII Rule 11 CPC has been dismissed in default, by the Trial Court.”
Of course, the Bench then discloses in para 5 that, “C.R.P. 44 of 2021 arises out of the impugned order dated 5th February, 2021 in CS No. 199/2019 titled Amit v. Ashok Kumar & Ors., by which the application of the Defendant under Order VII Rule 11 CPC has been dismissed in default, by the Trial Court.”
To put things in perspective, the Bench then very rightly points out in para 6 about the questions raised in these petitions that, “The question raised in these petitions was whether Mr. Amarjeet Singh Sahni, who was acting as the power of attorney holder of the Plaintiff, Mr. Amit Ved/Plaintiff/Respondent herein (hereinafter “Plaintiff”), and had verified the plaint on behalf of the said Plaintiff could appear also as a counsel in the matter. In C.R.P. 75/2020, vide order of the Court dated 13th July, 2021, Mr. Sahni submitted that he would withdraw his Vakalatnama and continue as the power of attorney holder and he would no longer act as a counsel for the Plaintiff. He again assures this Court that he would withdraw his Vakalatnama in the Trial Court proceedings and he would no longer act as a counsel for the Plaintiff in this matter. He submits that he shall take steps within 2 weeks for substitution of the Vakalatnama by a new counsel.”
Most significantly and also most remarkably, what forms the nucleus of this extremely commendable, cogent, concise, composed and convincing judgment is then laid bare in para 7 wherein it is stipulated that, “It is made clear that the practice of advocates acting as power of attorney holders of their clients, as also as advocates in the matter is contrary to the provisions of the Advocates Act, 1961. Any advocate who is engaged by a client would have to play only one role, i.e., that of the advocate in the proceedings and cannot act as a power of attorney holder and verify pleadings and file applications or any other documents or give evidence on behalf of his client. This aspect has to be scrupulously ensured by all the Trial Courts. This legal position has been settled by various decisions. In Baker Oil Tools (India) Pvt. Ltd. & Ors. v. Baker Hughes Ltd. & Ors., 2011 (47) PTC 296 (Del), the Court held:
“Thus as is manifest from the said rule, it would be a professional misconduct if a lawyer were to don two hats at the same time. However not only that, the partnership firms have a hurdle for acting in the said two capacities even under The Partnership Act, as every partner in a partnership firm is an agent of another and if one were to be acting as an advocate for a client, the rest would also be in the same capacity by virtue of agency and the same would be the situation in case of an advocate acting as a client. However, it cannot be forgotten by any who has ever been graced with the honour of wearing the robe that the lawyer is first an officer of the court and his prime duty is to assist the court in the administration of justice. The rules of conduct as per the Bar Council Of India Rules may act as a guardian angel for ensuring the moral conduct of the lawyers but the legacy of the traditions of the Bar cannot be bedaubed by a few for the lucre of commercial gains. A lawyer cannot forget that this is called a noble profession not only because by virtue of this he enjoys an aristocratic position in the society but also because it obligates him to be worthy of the confidence of the community in him as a vehicle of achieving justice. The rules of conduct of this profession with its ever expanding horizons are although governed by the Bar Council of India Rules but more by the rich traditions of the Bar and by the cannons of conscience of the members of the calling of justice of being the Samaritans of the society. Thus the foreign companies and firms must respect the laws of this land and the solicitors and law firms are equally not expected to discharge their duties as clients for these foreign companies/firms. Law is not a trade and briefs no merchandise and so the avarice of commercial gains should not malign this profession. Hence there can be no divergent view on the legal proposition that an Advocate cannot act in the dual capacity, that of a constituted attorney and an advocate.””
Be it noted, the Bench then observes in para 8 that, “The Plaintiff Mr. Amit Ved, is a resident of Bangkok, Thailand. Mr. Sahni claims to be his power of attorney holder. Mr. Sahni has verified the plaint and all other pleadings on behalf of the Plaintiff. He is also appearing as the counsel for the Plaintiff which would be impermissible. However, since in the present case, Mr. Sahni has assured the Court that he would no longer act as an advocate in the matter, no further observations are being passed in this regard.”
Furthermore, the Bench then enunciates in para 9 that, “Mr. Pankaj, who is the power of attorney holder for the Defendants and who has filed the present revision petitions is also present in Court. He and Mr. Sahni who is the power of attorney holder for the Plaintiff, submit that the dispute between the parties have been resolved by way of Deed of Settlement/Memorandum of Understanding dated 30th July, 2021. The original MoU/Deed of Settlement has been shown to the Court and the photocopies have been taken on record. As per the said MoU/Deed of Settlement, a tripartite agreement has been entered into between the Plaintiff in the suit, the Defendants, as also one Mr. Ved Prakash Bhagat who is to carry out construction in the suit property.”
What’s more, the Bench then brings out in para 10 that, “Mr. Aggarwal, appearing for the Petitioner, however, submits that he has not been informed of the settlement and neither a copy of the same has been shown to him. There appears to be some issue between the Petitioner and his counsel, Mr. Aggarwal. Mr. Pankaj who is appearing in the Court is duly identified by Mr. Aggarwal who had filed the present petitions. Mr. Pankaj, has also confirmed that the settlement has been arrived at out of Court, and he had not sought the advice of Mr. Aggarwal, ld. counsel.”
It is worth noting that the Bench then holds in para 11 that, “Since this Court has perused the original MoU and both Mr. Pankaj and Mr. Sahni, confirm that the MoU/Deed of Settlement has been executed, the petitions are disposed of as the disputes have been settled. No further orders are called for in these petitions.”
As it turned out, the Bench then also held in para 12 that, “Accordingly, the parties to appear before the Trial Court on the date fixed, i.e., 28th January, 2022, for presenting the settlement and for recording of the same. At the time of recording of the settlement, the Trial Court, if it deems appropriate may also record the statement of the parties themselves apart from their power of attorney holders. The Parties may appear even virtually as the Plaintiff is stated to be a resident of Thailand and the Court may record its satisfaction after statements of parties are recorded that the settlement is legal, in accordance with law.”
Adding more to it, the Bench then holds in para 13 that, “These three petitions are disposed of in view of the settlement between the parties.”
Finally, the Bench then holds in para 14 that, “A copy this order be circulated to all the District Courts by the Registry.”
In summary, all the advocates must always unfailingly adhere to what the single Judge Bench comprising of Justice Prathiba M Singh of the Delhi High Court has laid down so explicitly, elegantly and eloquently in this leading case that an advocate can’t be both power of attorney holder of client and his counsel also. In other words, the lawyer can’t don two hats at the same time – that of the power of attorney holder of client and his counsel also! The Delhi High Court in this notable case has clearly directed that this has to be scrupulously ensured by all the Trial Courts! It has ably cited relevant case laws also as already discussed hereinabove! So this has to be observed always in practice and not in breach!
It is also made crystal clear in this learned judgment that law is not a trade and briefs no merchandise and so the avarice of commercial gains should not malign this noble profession in any manner under any circumstances. Hence there can certainly be no divergent view on the basic legal proposition that an advocate cannot act in the dual capacity, that of a constituted attorney and an advocate. There can certainly be no denying this in any way!
Sanjeev Sirohi, Advocate
INVALIDATING RETROSPECTIVE TAXATION CLAUSE: SIGNIFICANCE AND IMPLICATIONS
An enactment or amendment made by the Parliament which expressly states that it should be implemented from a preceding date is said to be retrospective in nature. This modus operandi of taxation is used by the states to rectify the anomalies in policies that could have enabled the firms in benefitting from the loopholes. The concept of retrospective taxation permits a state to pass an ordinance to tax specific goods and services on erstwhile transaction. Many countries like India, US, UK, Netherlands, Canada, Belgium and Australia have successfully taxed firms retrospectively. The retrospective taxation law was passed in India in the financial year 2012 following the verdict of the Supreme Court in favor of US based telecom giant, Vodafone. The Dutch arm of Vodafone group acquired the Cayman Islands based company for $ 11 Billion in the financial year 2007 which obliquely held a majority stake in the Indian Company of Hutchison Essar Ltd and the firm was later renamed as Vodafone India.
The acquisition of Hutchison Essar Ltd by Vodafone made the Government of India amend the tax laws so as to penalize Vodafone. After amendments in the Finance Act, the tendentious move of enabling the tax department to impose retrospective capital gains tax for deals which involved the transfer of shares in foreign entities located in the country post 1962, was pursued. The amendment made in the Finance Act was intentioned to castigate Vodafone but several other firms too faced the crossfire and had unquestionably constituted multiple arbitrary litigations for India over the years. The amendment made in the Finance Act in the financial year 2012 to validate retrospective taxation remains the most contentious and ambivalent amendments to the Income Tax Act.
Apart from various Arbitrations India has faced in The International Arbitral Tribunal with various states and firms the Cairn UK has been among the landmark ones. The unfavorable verdict for India in the International Arbitral Tribunal at The Hague was for retrospectively taxing Cairn Energy Plc and Cairn UK HoldingsLtd. on alleged capital gains which the firm made in the financial year 2006 by restructuring its entire business model in the country before listing the local unit. The unfavourable award for India made the country introspect at its laws and taxing clauses. Nonetheless the reputation of the state has been at stake due to a complexed tax structure discouraging foreign investors to invest in the country.
The unfavorable award of the International Arbitral Tribunal, the red tape complexities and opaqueness of taxing structure made the Government of India work on its legal structures and introspect at its taxing clauses. The finance minister introduced the Bill in August, 2021 to revoke the tax clause provision that permitted the Government to levy taxes retrospectively. The Bill was passed in the Lok Sabha and Rajya Sabha on the 6th and 9th August 2021 respectively and subsequently on 13th August, 2021 the President of India accorded assent to it. The Bill clearly highlighted the importance of withdrawing retrospective taxation demands which were previously enacted in the financial year 2012 legislation with the objective of taxing the indirect transfers of the Indian assets. The Government of India has been dealing with arbitrations against Vodafone and Cairn Energy on taxes it had claimed retrospectively on various transactions for which these entities entered for the ventures in the country. The Judgment of the Arbitration was in complete favor of the U.K. based companies and the Indian Government was held to be in breach of bilateral investment protection agreements with the Netherlands and UK respectively.
Amending the clauses to refute losses in future was an essential step. The contentions mentioned in the bill argued about the nature of retrospective amendments and the impact it had on the principle of tax certainty and the international reputation of the country. The proposed changes in the bill explicitly and meticulously stated that no tax demand shall be escalated for any indirect transfer of the Indian assets condition being if the transaction was undertaken before 28th of May 2012. Furthermore, the tax that has been levied for the indirect transfers of Indian Assets before the stated date of 28th of May, 2012 would be held nullified of the accomplishment of specified conditions. The specified conditions mention the withdrawal of unresolved and pending litigations along with the incorporation of an undertaking which precisely states that no damages and claims would be filed. The proposed changes incorporated the proposal to reimburse the amount which was paid by the firms facing trail in these cases without interest thereon. The amendments so proposed interpret that tax claims made on offshore transactions executed prior to 28th of May 2012 shall be neutralized and annulled, subject to riders. The move so proposed and undertaken shall help close past disputes and repudiate and negate the future litigation costs. It is significant to mention that the Government proposes to reimburse only the principal amount to the companies and not the interest amount. The revocation of the retrospective taxation is nonetheless a move to ease out the business environment. The step so proposed and taken is in the favor of foreign investors and their interests. The invalidation of the retrospective taxing style has irrefutably welcomed a progressing and comprehensible tax structure which incorporates the perspicuous and rational attributes. The move shall establish an investment and business friendly environment and encourage the inflow of foreign investment and companies in the Indian market. The road from red tape to red carpet has been very deviating and long but it is still being accomplished with such laws and proposals that make the taxing structure and governing laws less penalizing and more trade friendly. The move can also be expected to escalate the economic transactions and activities and benefiting the Government with additional revenue over time. This could undoubtedly enhance the reputation of the state and restore faith in India’s endeavor to usher in business-friendly environment by removing the complex and baffling tax regime.
After this move of invalidating the retrospective taxation the Government should also prioritize to set up a rational dispute resolution mechanism wherever cross border transactions are concerned in order to prevent the disputes from entering the ambit of international courts to save the cost and time. A push in improvising the Arbitration ecosystem is irrefutably required to have a pragmatic impact on the ease of doing business and revenue gains.
ANALYSIS OF CONSUMER PROTECTION ACT, 2019: A DICHOTOMY OF CONSUMER’S AND SELLER’S RIGHTS
In the past decade due to the globalization and dynamic character of the market, relations between consumers and sellers have changed multi-fold. In the digital age, the E-Commerce market has eclipsed the traditional market to a reasonable extent. Thus, in the revolution brought by digitalisation Application of Consumer Protection Act, 1986 encountered many challenges and needed immediate attention. The legislation brought drastic changes and introduced Consumer Protection Act, 2019 which came into effect from 20th July, 2020. The new act aims to strengthen the scope of protection and enhance the rights provided by the virtue of previous legislation.
1. Application of provisions to e-commerce
The defence that e-commerce sector is merely a ‘platform’ or aggregator’ will not be accepted. All the rules and regulations which were earlier applicable to the direct selling market in India are now extended to the e-commerce sector by the virtue of new act. ‘E-Commerce’ has been defined under Section 2(16) of Act as “Buying or selling of goods or services including digital product over digital and electronic market.”
The guidelines make it compulsory for E-Business to disclose the seller’s details and policies regarding refund, return, delivery, shipment, warranty and guarantee. This is a paramount step as under the realm of digital marketing companies will be penalised for trading in defective goods and indulging in deficient services provided on online platform.
2. Extension of pecuniary jurisdiction
One of the major changes brought in by the Act of 2019 includes an extension of pecuniary Jurisdiction for all three adjudicating forums. By the virtue of Section 34 of Consumer Protection Act, 2019 the District Commission can now entertain the complaints up to Rs. 1 Crore, which earlier was restricted to Rs. 20 Lakh. Similarly, as per Section 47, the State Commission will now have jurisdiction over the complaints which exceeds Rs. 1 Crore but under the value of Rs. 10 Crore. Pecuniary Jurisdiction of National Commission is extended to complaints whose value exceeds Rs. 10 Crore as per Section 58 of the Act.
3. Extension of territorial jurisdiction
Previously, the consumer had to file a complaint only in the Consumer Courts where seller’s office was located or where he resides or where cause of action has arisen. This provision has now been expanded and it empowers the consumer to file a complaint in the consumer court where he resides of work. This expansion of territorial jurisdiction is an evidence of the objective of the act which is protection of the interest of consumers.
Consumer Protection Act, 2019 not only protects the interest of the consumers at the time of exchange of goods and services but also from the aftermath of the same. Manufacturers or service providers would now be made liable for any harm, injury or loss suffered due to defective product or deficient service provided by them.
5. Central regulator
The Act provides for establishment of The Central Consumer Protection Authority (CCPA) which would address issues related to consumer rights, unfair trade practices or misleading advertisements. CCPA has the power to impose, on the endorser or manufacturer a imprisonment up to 2 years for misleading and deceptive advertisement. Repeated offence may attract a fine of Rs. 50 Lakhs and imprisonment up to 5 years.
6.Alternative dispute resolution
Section 37(2) of the act provides that the parties can go for the mediation for resolution of disputes between them. This process is voluntary and non-binding on the parties. For the purpose of said provisions the Consumer Mediation Cell (CMC) will be attached at District, State and National level.
CONFLICT OF INTERESTS
The legislature must take note that while protecting the interest of one party the rights of other should not be violated. New Consumer Protection Act, 2019 gives certain rights to the consumers but the liabilities of seller’s are expanded more than what was necessary. Number of Penalties against the sellers under this act has increased drastically. Moreover, the number of penal provisions has also been increased in the current act. This includes extension in the term of imprisonment as well as increase in the value of fine imposed. These provisions are in conflict with the concept of Equity before law and creates a disbalance of rights and liabilities between sellers and consumers.
Sellers should not be kept devoid of their basic rights. One such right violated is right to fair trial.
Transfer of case: Provision has also been included by the virtue of section 48 in the new Consumer Protection Act, 2019. In contrast with Transfer of case provisions mentioned under other statutory laws, section 48 of the act provides only the complainant to file for the transfer of case and bars the locus standi of seller to approach the court for the said reason.
In Criminal Procedure Code, 1973 sections 406, 407 & 408 deals with Transfer of Case. In all the three provisions every party interested is allowed to apply for transfer of case. Even in Civil Procedure Code under section 25 both the parties are allowed to apply for transfer of case.
Transfer of case provision is a way to ensure the litigant parties that for legislature the interest of justice is given supremacy even if it means change of adjudicating forum. Therefore, I believe ousting the Jurisdiction of Respondent to apply for transfer of case is violating of principle of equity and Right to fair trial.
Further, The Central Consumer Protection Authority (CCPA) is empowered to impose penalties on the manufacturers and seller’s for misleading advertisement. The appeal against such order can be made only under National Commission. The grounds for such appeal are not clear which leaves seller’s and legal fraternity in disarray.
Consumer Protection Act, 2019 is revolutionary legislation that will bring numerous reforms in consumer rights. It includes certain provisions that are need of the hour in era of digitalisation like E-Filling, proceedings through Video Conferencing and inclusion of E-Commerce in the realm of Consumer Laws.
Though these provisions are in consonance with the objective of the act that is protection of interest of consumer, but the legislature should also understand that their giving rights to one may not result in the violation of another’s rights. As stated in the terms of Economics the best position of Market is Considered when there is an equilibrium. Similarly, the legislature should also maintain an equilibrium of the rights and liabilities between Sellers and Consumers while formulating laws for Consumer Protection.
From money laundering to cleaner energy: The legality of NFTs
While the COVID-19 pandemic has had a negative impact on India’s art markets, there is only one thing that has instead provided hope to artists and producers hoping to break through traditional market boundaries and that are NFTs. They are one-of-a-kind digital assets that can be used to establish ownership. NFTs are “minted” on these assets utilising blockchain technologies like Ethereum and smart contracts like Binance Smart Chain, which make them extremely safe by creating a unique digital signature.
From Kevin Mc Coy’s Quantum to Beeple who sold his piece “Everydays: The First 5000 Days” for a staggering $69 million to now even Amitabh Bachchan announcing the launch of his NFT collection of one-of-a-kind artworks inspired by his life and career, NFTs have come a long way.
NFT and Cryptocurrency:
NFTs are fundamentally different from cryptocurrencies like Bitcoin, which are indistinguishable from one another as the value of one Bitcoin would remain the same as the value of another and thus fungible. But NFTs as the name says, ‘Non-Fungible Tokens’ aren’t freely exchangeable as all of them have unique properties and cannot be exchanged for one another. This can be linked to the claim of originality which NFTs provide to the asset’s purchaser. For example, anyone who wants to buy a Van Gogh painting can do so, but only the individual who owns the original can control its ownership and enjoy all other rights.
Moreover, there is a royalty generation mechanism for NFTs that would automatically transmit a predetermined portion of the resale revenues to the asset’s original inventor.
The issues with NFTs
NFTs are traded globally because DLT platforms typically perform better outside of national borders. At the same time, the likelihood of illicit actions being enabled by cryptocurrencies because they are anonymous is one of the issues regarding NFTs as according to investors all around the world, even if it is difficult to create an NFT, the prevailing fear of the world is that NFTs are not immune to foul play. The “pump and dump” strategy is used by creating many accounts to artificially raise the pricing resulting in pricing fluctuations among countries. It is too early to tell whether NFTs are a long-term investment or merely a “trend”.
The Financial Action Task Force has voiced worry about NFTs, stating that they may be used to support money laundering or terrorism financing. Even under the Money Laundering Regulations, 2017, crypto assets are defined as “a cryptographically secured digital representation of value or contractual rights that uses a form of distributed ledger technology and can be transferred, stored, or exchanged electronically.” This implies that dealing in cryptocurrency-related properties would necessitate registration.
In the case of United States v. Harmon, Criminal Case No. 19-cr-395 (BAH) (D.D.C. Apr. 16, 2021), the respondent was said to be conspiring to launder monetary instruments by using a bitcoin tumbler known as ‘Helix.’ This tumbler’s service had been touted expressly as a tool to conceal transactions from authorities. Furthermore, persons who buy NFTs use pseudonyms and their profiles lack any information that can be used to identify them. For example, Vignesh Sundaresan, who paid $69 million for the most expensive NFT, purchased it anonymously and only later revealed his identity.
Moreover, there are no set rules or criteria for pricing NFTs, it can be subjective, for example, an animated flying cat with a pop-tart body, on the other hand, was recently auctioned for nearly $600,000 because there are no parameters for determining the worth of this flying cat and other similar NFTs, money launderers can acquire them at inflated rates, making it incredibly easy to launder significant quantities of money.
Another issue that arose with NFTs is their contribution to the tonnes of planet-warming carbon dioxide emissions due to the cryptocurrencies that are used to buy and trade them. Take, for example, “Space Cat,” an NFT that is essentially a GIF of a cat in a rocket travelling to the Moon, the carbon footprint of Space Cat can be said to be equivalent to the two-month supply of power for an EU resident. Clean energy, i.e., more cryptocurrency machines using renewable energy is the simplest solution to NFTs’ emissions problem.
NFTs and Intellectual Property Rights
Let’s take the most famous example of a video of LeBron James’ slam-dunk, which can be purchased and sold on the ‘Top Shot’ marketplace. Even if the card representing the dunk sells for a lot of money, the NBA still owns the rights to the original film. Even if one is fortunate enough to own one of the rare NBA NFTs, they are still prohibited from altering the video moment captured in your NFT or selling any items related to your NFT without the NBA’s permission. If one breaks the conditions of their licence, platforms like Top Shot marketplace may suspend or deactivate their account.
The ownership and commercialization of IP rights in NFTs is a complex area as of now. The owner of the NFT may or may not have rights to the underlying IP rights. The owner of a work has the right to copy or distribute copies of his work under Section 14 of the Copyright Act, 1957. As a result, the author’s specific permission, licence, or assignment is required for the NFT owner to exploit or replicate the artwork in any way. Otherwise, the NFT they own is more akin to a licence to use the artwork for personal purposes, collectibles, or secondary market sale.
Is it legal?
As of now, there are no rules in India that control the trade of NFTs. Since NFTs can only be traded in cryptocurrencies, crypto-trading companies such as WazirX, Zebpay, and others have already built their own virtual NFT marketplaces in India .Despite the fact that cryptocurrencies are not illegal in India, the Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019 pushes for a complete prohibition. It also imposes a fine or a sentence of up to ten years in prison for those who deal in it.
In Internet and Mobile Association of India v. Reserve Bank of India, the Supreme Court of India held that the April 2018 RBI circular prohibiting all regulated organisations from trading in cryptocurrencies was irrational and hence violated Article 19(1)(g) of the Indian Constitution.
In India, even though there is no explicit legislation governing NFTs, there are a few Foreign Exchange Management Act (FEMA) provisions that prohibit crypto-trading. FEMA laws have operated as a check on the flow of cash beyond Indian borders on numerous occasions. If one looks at the current FEMA laws, crypto assets should be classified as intangible assets like software and intellectual property, which are both protected by FEMA regulations.
It is a fact that the majority of NFT buyers and sellers are located outside of India’s borders, hence participants from India are frequently seen making cross-border transfers to participate in NFTs. There is currently no universal rule governing cross-border NFT transactions. If they are classified as intangible assets under FEMA, determining their location is critical because they are backed by cryptocurrencies, which are recognised as “global-ledgers,” meaning that the data is recorded, shared, and synchronised across multiple data stores or through a distributed network of different network participants. This will make it impossible to link the NFT to a specific location. If Indian participants continue to participate in the cryptocurrency market, they must do so using fiat currencies that are reported to their approved dealer banks in order to take a less risky approach.
Moreover, with the introduction of the Finance Act of 2020, a non-resident “e-commerce operator” is required to pay a 2% equalisation levy on the amount of consideration received or receivable by him. Foreign entities selling NFTs now will be required to pay the equalisation levy if they want to operate in India.
NFT is a developing field, and only time will tell if it will stick around. For the time being, the NFT revolution appears to be thrilling and promising, especially for artists who want to monetise their work and safeguard it from limitless replication in the digital realm. But what makes trading in NFTs more risky is that there is no clear understanding of the legal status of cryptocurrencies in India,
India can learn from countries with a well-balanced legal and regulatory environment, such as Singapore, Canada, Japan, and Switzerland.
If NFTs are deemed legal in India, amendments to the Prevention of Money Laundering Act, 2002, as well as the Antiquities and Art Treasures Act, 1972, will be required. Taking more advice from the European Union’s “Fifth Anti-Money Laundering Directive” may also be beneficial. In fact, there is a special law to combat money laundering through the art market, which includes NFTs in the definition.
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