The residential sector witnessed a strong comeback in 2021, with housing sales in the top 7 cities rebounding to 90% of pre-COVID levels and new launches reaching 2019 levels. While the housing sector’s prospects generally look upbeat in 2022, it remains to be seen to what extent, if any, the new COVID-19 variant Omicron impacts real estate activity.
So far, it has not had any seriously dampening impact. However, the sentiment revival in residential real estate during the worst parts of the first and second waves hinged heavily on policy support. The RBI and the government have proactively aided the sector with various demand boosters. The stamp duty cuts, tax benefits extension on affordable housing in last year’s budget were strong moves that made a difference.
Despite rising inflation, the RBI kept the repo rates unchanged for the last nine consecutive bi-monthly monetary policies, thereby extending the benefit of lower interest rates to homebuyers. These measures helped the housing sector, which plays a significant role in the overall economy, to maintain an even keel during a very rough phase.
The residential sector looks forward to further support beyond the mainstay demands of industry status, easy availability of finance, and GST rates reduction. With regards to the upcoming Union Budget 2022-23, some of the significant moves which would help spur up residential demand include:
• Home loan deduction limit (u/s 24)
There is a need to hike the INR 2 lakh tax rebate on housing loan interest rates under Section 24 of the Income Tax Act to at least INR 5 Lakh. This could instantly infuse robust demand for housing, especially in the affordable and mid-segment categories.
• Deductions for home loan principal repayment, over and above the existing 80C
Personal tax relief, either via a cut in tax rates or revised tax slabs, would be a welcome move – especially since the last increase in the deduction limit under Section 80C (to INR 1.5 lakh a year) took place in 2014. The time is certainly ripe for a further upward revision, but there is no denying that the government currently lacks the elbow space for such a move. Instead, it may focus on providing more incentives to MSMEs and SMEs struggling post the pandemic. Also, the government spending on infrastructure may further get a boost.
• Redefine the definition of affordable housing criteria to extend the benefit of additional deductions to more buyers
According to the Ministry of Housing and Urban Poverty Alleviation, affordable housing is defined based on the property size, its price, and the buyer’s income. For instance, affordable housing is a unit with carpet area up to 90 sq. m. in non-metropolitan cities and towns, and 60 sq. m. in major cities and valued up to INR 45 lakh for both. The central bank’s definition, on the other hand, is based on the loans given by banks to people for building homes of buying apartments.
The government should seriously consider revising the city-wise pricing parameters to include a broader customer base under the benefits of extended to this segment. While the size of units as per its definition (60 sq. m. carpet area) is relatively appropriate, prices of units (up to INR 45 lakh) are not viable across most cities. For instance, a <INR 45 lakh budget is far too low for a city like Mumbai – it needs to be increased to at least INR 85 lakh.
As for other top cities, the budget range should be increased to at least INR 60-65 Lakh. With this price revision, more homes will fall within the affordable price tag, allowing more buyers to avail of multiple benefits like lower GST rates at 1% without ITC, government subsidies, and the tax deduction of a total INR 3.5 lakh on interest repayment of home loans.
Also, more government-controlled land needs to be unlocked to create affordable housing. Some portions of land across cities falling under the Department of Heavy Industries, Indian Railways, Port Trusts, etc., can be released by respective government bodies. Increased availability of low-cost land will also help rein in property prices significantly.
• Extend benefits of Affordable Housing
Affordable and rental housing got a big boost in the last Union Budget, with the government extending the period for extra deduction of INR 1.5 lakh for loans up to 31st March 2022. A further extension of this benefit will ensure buoyant demand for affordable housing in 2022. Further, extending the tax holiday for affordable housing projects by another year will help bring in more new supply within this segment. As per ANAROCK Research, affordable housing in 2021 accounted for approx. 26% of the overall supply across the top 7 cities. Tax exemption for ARHC will also help stave off labour shortage challenges in case of any future disruptions.
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Delhi HC facilitates school admission
While emerging as a very strong voice for the voiceless, the Delhi High Court in an extremely laudable, learned, landmark and latest judgment titled Kamini Arya Through Perokar vs The State NCT Of Delhi in Bail Appln. 2165/2022 pronounced as recently as on August 3, 2022 has taken suo motu cognizance to facilitate admission of an 8 year old child to school which could not be facilitated for the reason that her parents were in judicial custody in a murder case since July 2021. It must be mentioned here that the Single Judge Bench of Hon’ble Ms Justice Swarana Kanta Sharma minced just no words to espouse child’s cause while observing that, “The court is of the opinion that the child must get admitted in a school at the earliest so that shadow of no unpleasant happening falls upon the child’s life to darken her future.” It is also most pleasing to learn that the Delhi High Court in this notable case made it absolutely clear that the child, being an individual Indian citizen, enjoyed the Fundamental Rights including the Right to Education and that the welfare of child should not only be considered in cases dealing with family disputes but also like the present one.
At the outset, this most commendable, cogent, courageous, composed and convincing judgment authored by the Single Judge Bench comprising of Hon’ble Ms Justice Swarana Kanta Sharma sets the ball rolling most promptly by first and foremost putting forth in para 1 itself that, “The present application has been filed by the petitioner seeking interim bail for two weeks in FIR No. 323/21 registered at P.S. Mohan Garden under sections 302/365/292/397/411/120-B/201 & 34 of the Indian Penal Code, 1860 (‘IPC’). The petitioner and her husband, who is the co-accused in the aforementioned FIR, have been in judicial custody since 11.07.2021. The application has been moved by the mother of the child on the ground that she is concerned about the admission in a school of her child, who is about 8 years of age. It is stated that without her presence, she cannot be admitted in any school.”
No doubt, the grounds forwarded by the mother of the child are bona fide and worth considering seriously by the Court. The child is just about 8 years of age and so definitely the mother’s presence is inevitable to get the child admitted to school. This was considered seriously also by the Court!
To put things in perspective, the Bench then envisages in para 2 that, “The interim bail application of the petitioner has been dismissed by the ld. ASJ, Dwarka Court, vide order dated 21.05.2022 wherein the ld. ASJ opined that the ground on which the petitioner has approached the court for bail, i.e. getting her daughters admitted to school, is not of such a nature which can be termed as a compelling circumstance or intolerable grief. The application was thus dismissed by the ld. ASJ.”
As it turned out, the Bench then points out in para 3 that, “The court is informed by the learned counsel for the applicant that the elder sibling of the child is studying in the secondary school branch of Co-Ed Pry. School, West Zone, New Delhi – 110059. It is prayed that the child in the present case may be admitted in Nursery Class in the aforementioned school.”
As we see, the Bench then discloses in para 4 that, “In the present case, it has come to notice of the court that the applicant, i.e. the mother of the minor child, is in judicial custody due to her alleged involvement in the murder of an old lady whose body parts were severed and disposed of in a drain.”
As things stand, the Bench then brings out in para 5 that, “During the course of arguments on the bail application a query was put forth by this court and the court was informed that the presence of the applicant/mother is not required for admission of the child in the school and the Aadhaar Card of the mother shall suffice. The same has been duly verified by the Investigating Officer (IO) who has filed a reply from the Principal of SDMC, Co-Ed Pry. School, West Zone, New Delhi – 110059, wherein it is stated that the child’s admission can be done without the Aadhaar Card if the child has a certificate bearing the child’s date of birth from any government institution. It is further stated that any local guardian of the child can also get him/her admitted in school.”
While unequivocally underscoring the huge importance of education in a child’s life, the Bench then opines in para 6 that, “In my opinion, education is the first step towards tackling social evils, especially poverty, inequality and discrimination. Every child, irrespective of caste, religion, sex, or economic background has been guaranteed right to education. An educated individual can make informed decisions, first for themselves, and then be able to contribute constructively towards the progress of the nation and society at large.”
While sending out the most simple, straightforward and strong message to all the Judges, the Bench then mandates in no uncertain terms in para 7 that, “Once it comes to the notice of the court that a child or an individual is deprived of a fundamental right, the courts have to ensure that the fundamental right is enforced and there is no impediment for any individual to enjoy the same. The court should not fail in its duty at any point of time in this regard.”
Most remarkably, the Bench then further adds in para 8 that, “Right to Education is a fundamental right guaranteed to every citizen under Article 21-A of the Constitution. A child must not suffer the consequences, on account of their parents having been in judicial custody for a crime which is yet to be adjudicated upon by the court. This court is duty bound to enforce fundamental rights of every citizen and in this case right to education of the child.”
Most forthrightly, the Bench then also unambiguously maintained in para 9 that, “The Constitution guarantees protection of independent identity and individuality to every Indian citizen. Constitution of India is the supreme law of the land and this court is bound to protect the rights of every individual enshrined and guaranteed by the same. Especially in the present case, where the right to education of a child is at stake, it is imperative that the court intervenes timely and upholds the right envisaged in the Constitution to protect the future of the child.”
Needless to say, the Bench then notes clearly in para 10 that, “This court is of the opinion that the child must get admitted in a school at the earliest so that shadow of no unpleasant happening falls upon the child’s life to darken her future.”
Most significantly, the Bench then state in para 11 what constitutes the cornerstone of this learned judgment that, “At the cost of repetition, it is opined that in the present case, the child is an individual Indian citizen and enjoys her own Fundamental Rights given to her by virtue of her being born in India, Right to Education is the child’s fundamental right. In the present unpleasant situation of the case, the court has to become the voice of the voiceless child. The parents are in judicial custody and the prime concern of the parents is education of the child. It is not only in cases dealing with family disputes that the rights and welfare of the child should be considered but also in the cases as the present one, the courts can become and act as the parent of the child and ensure that the child is not deprived of its Fundamental Right to Education. Depriving any child of education due to family circumstances should not be allowed to every extent possible. An educated child educates the entire family and becomes an asset to the nation.”
Quite forthrightly, the Bench then directs in para 12 that, “In the circumstances, at this stage, this court feels the need to exercise its discretionary powers under Article 226 of the Constitution of India and take suo-motu cognizance to facilitate the child’s admission in a school so that the child does not lose out on the current academic year i.e. 2022-23. It is therefore directed that the SHO concerned will get the child admitted to the school adjacent to the senior branch of the school in which the older sibling of the child is already enrolled and pursuing her education.”
Furthermore, the Bench then lays down in para 13 that, “The Principal of the school will extend full cooperation for the admission of the child. A compliance report will be filed within 10 days. The identity of the child and the school in question is not being mentioned in this order to protect the privacy and dignity of the child.”
What’s more, the Bench then aptly points out in para 14 that, “It is submitted by the counsel for the petitioner that the petitioner is satisfied with the relief that has been granted. Considering the petitioner was seeking bail only on the ground that she needed to fulfil her responsibilities as a parent and get her child admitted to school, permission is now sought by the counsel of the petitioner to withdraw the present application.”
As a corollary, the Bench then reveals in para 15 that, “In view of this order, the learned counsel for the applicant states that she is satisfied with the order and does not press her application at this stage. Permission is sought to withdraw the same.”
In this context, the Bench then quite ostensibly directs in para 16 that, “In terms of the above, the application is dismissed as withdrawn.” Finally, the Bench then concludes by holding in final para 17 that, “Ordered accordingly.”
All told, it definitely merits no reiteration that all the courts must in similar such cases emulate what the Single Judge Bench comprising of Hon’ble Ms Justice Swarana Kanta Sharma of Delhi High Court has laid down so elegantly, eloquently and effectively in this noteworthy case! In essence, the Courts must definitely become the voice of the voiceless as we see so very ostensibly in this leading case. It also must be definitely underscored that the Courts must also prima facie ensure that the process itself does not become the punishment due to which the long term interest of the child gets jeopardised. No doubt, we saw how in this case the Delhi High Court so very commendably took suo motu cognizance to facilitate the school admission of the child whose parents are in custody and thus ensured that the paramount interest of the child to education is safely protected. Of course, it must be said that this is definitely the best way in which ideally all the Courts in our country must always act and not just turn away their face citing process, procedure etc! There can be certainly just no denying or disputing it!
PRADHAN MANTRI AWAS YOJANA: RS 8.31 LAKH CR INVESTMENT APPROVED
In Finance Minister Nirmala Seetharaman’s words, India stands on the threshold of Amrit Kaal, or the ‘Era of Elixir’. Regarding the country’s real estate sector, we can be a little more restrained with such definitions. Still, there is little doubt that the industry has made remarkable progress since it attained independence 75 years ago. Real estate has not been left behind – quite the contrary.
This once hugely beleaguered sector has made history-defying forward strides, especially in the last 8-10 years.
Today, massive transformation across sectors and industries has assured India a recognizable position in the new world order. The real estate sector features prominently in this revitalized avatar of a country on the move. Let’s reflect on what has transpired over the years and take a look at what lies ahead for the sector.
The Winds of Change
As India’s population grew over time, cities expanded to create habitable localities and industries for its economic upliftment. Chandigarh was the first planned city of independent India – one of the successful trials of urban planning and modern architecture. To address the ever-increasing need for housing, the government set up institutions like the Housing and Urban Development Company (HUDCO), City Industrial and Development Corporation (CIDCO), and the National Housing Bank (NHB).
The liberalization of policies in the 1990s facilitated significant changes in the real estate sector. Many international companies jostled to establish businesses in India, triggering a consistently increasing demand for commercial and residential real estate.
The rapid growth of the IT-ITeS sector resulted in the expansion of new urban centres across major cities like Bengaluru, Chennai, Hyderabad, Kolkata, MMR, NCR, and Pune. These cities were the first to witness changing skylines and rapid vertical development.
At the turn of the century, the sector was further invigorated when foreign direct investments allowed the entry of global investors. This catalysed the development of malls and other organized retail spaces across the country.
PMAY: With the Pradhan Mantri Awas Yojana (PMAY) program, the social housing sector – mainly aimed at the economically weaker sections – has gathered momentum over the last decade. PMAY was launched with a specific and ambitious target to provide Housing for All by 2022. In the country’s urban areas, the development has been tangible.
CLSS: To provide momentum to affordable housing and generate demand for it, the government has provided for subsidized interest to be paid to financial institutions lending to borrowers in this housing category. The cost of ownership became easier on prospective buyers and empowered women with the social security of having their own homes – a significant sea-change in a once highly patriarchal society.
Smart Cities Mission: The Smart Cities mission aims to develop 100 cities that are technology-enabled to drive economic growth and offer significantly improved quality of life to citizens. Currently, there are 5,151 projects under this mission across the identified cities, with investments to the tune of INR 2,05,018 crores.
Various reforms and structural changes implemented in the government have been instrumental in altering the real estate sector. Today, we use terms such as governance, transparency, and accountability, and stakeholders are evaluated on these parameters.
Many corporate business houses have also ventured into the sector. Prominent and listed real estate players are successfully gaining market share and helping the industry consolidate – a much-needed process that steadily eliminates unwholesome elements and the shenanigans for which they were known.
Some of the significant reforms in recent times and their effects:
GST: This taxation reform was conceived and implemented to enable a uniform tax code across the country. Completed real estate projects are exempted from GST, and affordable housing projects are levied with GST of only 1% to keep the momentum of demand high.
REITs: Real Estate Investment Trusts (REITs) have emerged as another option for Indian investors to add real estate to their portfolios for better diversification and risk mitigation. The REITs operational in India today are mainly in the commercial office segment. The total market cap of these REITs is estimated at INR 60,584 crores.
RERA: Perhaps the most significant post-independence reform to impact the Indian real estate sector was implementing the Real Estate Regulation Act. This Act aims to safeguard the interests of homebuyers and investors and make developers accountable for their projects. The Act makes all relevant project details, including the approvals and permissions, available at homebuyers’ fingertips and provides a mechanism for redressing complaints and grievances.
RERA establishes specific standards for the construction and development of real estate that aim to improve transparency in real estate transactions. It has given homebuyers several rights and has set forth specific laws and regulations that all developers must observe.
In the five years of its existence, 87,124 projects and 65,500 agents have been registered across the country. The regulator has successfully disposed of 97,404 complaints, paving the way for a stronger and more resilient real estate sector.
RERA is in many ways still a work-in-progress, with loopholes and lacunae getting addressed along the way. However, it is safe to say that it is the one regulatory reform that has genuinely empowered real estate end-users and investors.
THE ‘AMRIT KAAL’ WAY FORWARD
As the nation progresses rapidly and requirements evolve, real estate products, services, and assets will grow too. Many new-age real estate asset classes such as senior living and student housing are already gaining momentum. Data centres, warehousing, and industrial parks are the new buzzwords in the sector. They will gain further traction as the incumbent government focuses on its visions of Atmanirbhar Bharat and India becoming a USD 5 trillion economy.
NOT A HOME RUN YET
As these sectors and economic activities rev up, housing for the workers they employ will pose a significant challenge. The government has already laid the framework for affordable rental housing and invites private participation, but there is still a lack of clarity. ARHCs (Affordable Rental Housing Complexes) are now among the most urgent needs in post-Independence India – and the government’s Housing for All vision.
‘Fishery sector needs an integrated structure like dairy’
It is crucial to have an integrated chain of activities when organising fish farmers, especially those who are poor, said NN Sinha, Secretary, Ministry of Rural Development, Government of India, at the First Conference on Fishtech, organised by the industry chamber FICCI.
Delivering the Special address, Sinha alluded to the need to develop an integrated structure akin to the dairy sector. “There is a lot of scope for developing such a value chain”, he said. The secretary also referred to growing seaweed, ornamental fishing, and cage culture as viable livelihood activities. “We think aquaculture is an important livelihood option for a large number of people”, he said, adding, “we will work with everyone in the sector”.
Speaking on occasion, Hemendra Mathur, Chairman, FICCI- Taskforce on Agri-Startups, said, “we need a dedicated fund for fishery startups, which can put in early-stage funding for startups trying to build interesting models and features”. Further, Mr Mathur said that “we should at least have 500 fishtech startups in the country, given the sector’s potential”, adding, “all startups put together account for less than 2-3 per cent of the market potential”.
He said that fishery is an important sector with more than 1.5 crore fishermen engaged in the activity and its contribution to GDP being more than USD30 billion. Noting the considerable headroom for growth, Mr Mathur alluded to the need to develop an innovation ecosystem in fishtech on the lines of agriculture and said, over the last five to seven years; we saw 1500-plus agri-tech startups in the country due to ecosystem development. However, he said the share of fishtech startups is still tiny, probably 30 to 50. “That is a small number in the context of the opportunity ahead of us”, he said, adding, “I think fishtech has a lot to catch up to when compared to agritech”.
Alluding to the opportunities in the sector, Mathur noted the need to create an integrated supply chain and incorporate technology to bring efficiency to fisheries.
Mr Shashi Kant Singh, Executive Director, Agri & Natural Resources, PWC, also noted the potential of increasing the use of technology and, further, the headroom available to increase the production, exports and domestic consumption in the fishery sector. He added that a lot of “policy support”, “ecosystem support”, and “well-designed schemes” were introduced by the government during the last four to five years. However, “we do see a lot of opportunity for the fishery sector in improving the quality of the produce”, he said. Mr Singh added that “if the blue economy story has to be a success in India, then fishery is going to be one of the key segments, among others”.
Devleena Bhattacharjee, Chair, FICCI Committee on Fishtech and Founder & CEO, Numer8 Analytics, said, “India is the second largest fish producing country in the world and contributes to about 7.56% of the global fish production. She noted that the fishery sector is a sunrise sector owing to tremendous scope in domestic consumption and expansion, strong export potential and greater economic returns with strong policy support.
A FICCI PwC report, “Championing the blue economy: Promoting sustainable growth of fisheries sector in India”, was released on occasion. The report showcases the potential of India’s fisheries sector, trends, opportunities, challenges, and strategic interventions needed to support the blue economy in India and build a sustainable and profitable future for the industry.
Industry should engage with the government to help reduce the use of fertilizers and pesticides in the agriculture sector, says Narendra Singh Tomar
Need to focus more on organic pesticides; Industry should work with the aim of protecting the environment and being self-reliant, says Bhagwanth Khuba, Minister of State for Chemicals & Fertilizers.
Narendra Singh Tomar, Minister of Agriculture & Farmers Welfare, Govt of India today said that the private sector should come forward and support the government in reducing the use of fertilizers and pesticides in the agriculture sector.
Addressing the ‘11th Agrochemicals Conference 2022 -Policy Landscape for a Flourishing Agrochemicals Industry’, organized by FICCI, with the support of Department of Chemicals & Fertilizers and Department of Agriculture & Farmers Welfare, Govt of India, Mr Tomar while speaking virtually, added that India is agriculture oriented, and agriculture has a huge contribution in country’s economy. “Profit is very important for the farmers in the agriculture sector. Increase in production is also necessary. It is imperative to increase the profits in the field of agriculture and post-harvest losses to the farmers should be minimal for which the government is working on several schemes,” he added.
Mr Tomar also stated that the government is promoting the use of newer technology to be adopted by the farmers to produce expensive crops. “Work is also being done to ensure uniformity in production of crops along with ensuring quality in the production”, he added.
The Minister also emphasized that today, horticulture should be promoted so that India can become self-reliant in every respect. “Our country is in a very good position from the point of view of food grains. To compete at the global level, we have to look towards developed countries and move ahead with them,” he said.
Bhagwanth Khuba, Minister of State for Chemicals & Fertilizers and New & Renewable Energy, Govt of India stated that the government aims to move forward while keeping in mind the benefits for farmers. “With rising population, it is important to focus on food security along with ensuring farmers produce at lower cost and safeguarding the environment.” He further added that the government is farmers and business friendly and works to remove barriers by amending policy and reforms as and when needed. “It is not only the commitment but conviction of the government to work towards doubling farmers income. It is our responsibility to adopt low-cost agrochemicals along with innovations to improve the agriculture sector. We need to also focus on organic fertilizers,” he stated.
Khuba also urged the industry to focus on organic pesticides as this will take time to adopt to mitigate the side effects of pesticides currently used. “We must also promote manufacturing these organic pesticides in India as well”, he added.
Vijay Sampla, Chairman, National Commission for Scheduled Castes, Govt of India said that there is a need for the research and development to be communicated to the small and marginal farmers in their language. He also emphasized on the need to create more awareness on the use of pesticides to benefit the agriculture sector.
RG Agarwal, Chairman, FICCI Crop Protection Committee & Chairman, Dhanuka Group said, “We urge the government to reduce GST rates on pesticides and bring it at 5 per cent like fertilizers so as to benefit small and marginal farmers as well. The government should also provide PLI to pesticides industry to develop the domestic industry as an international manufacturing hub.”
SUPREME COURT TELLS CENTRE: ADOPTION PROCESS TEDIOUS IN INDIA, PRECLUDING PEOPLE FOR ADOPTING.
The Supreme Court in the case The Temple of Healing v. Union of India observed and has adjourned the hearing of the petition seeking simplification in the process of adoption in India.
The bench comprising of Justice D.Y. Chandrachud and the Justice J.B. Pardiwala apprised by Additional Solicitor General, Mr. K.M. Nataraj observed and has held that he had not received the petition. Thus, the Bench asked the petitioner-in-person to handover a copy to him.
In the present case, as a preliminary objection, Mr. Nataraj indicated that the writ petition might not be maintainable as it is filed by a society. It was noted by the bench that the process of adoption in India is indeed cumbersome and tedious and needs to be addressed, wile stating that it is a genuine PIL. It was requested by the bench to the ASG not to treat it as adversarial litigation. Thus, the bench also orally observed that the petitioner-in-person has established his bona fides, on the last date of hearing.
The bench of Justice Chandrachud orally said that “We issued notice because the process of adoption is so cumbersome and tedious that it is precluding people from adopting…It is a genuine PIL. Do not treat the PIL as adversarial litigation”.
A charitable trust, “The Temple Of Healing” filled an PIL through its secretary Dr. Piyush Saxena (petitioner-in-person).
It was observed that earlier, when the notice was issued, Dr Piyush Saxena, had informed the Apex Court that he had submitted an application seeking leniency in adoption norms to the Ministry of Women and Child Development and which has not been acted upon.
It was stated by him that 4000 children are adopted in our country every year but there are 3 crores orphans in our country and there are infertile couples too who are desperate to get a child. Thus, parents are not educated enough therefore the scheme should be introduced based on the Income Tax Scheme which was issued 16 years back. The notification has been issued by the Ministry wherein they have given some leniency to the prospective parents.
It was suggested by the petitioner that the Child Adoption Resource Information and Guidance system may appoint a few trained “Adoption Preparers” along the lines of the Income Tax Preparer Scheme of 2006. However, they can help prospective parents complete the cumbersome paperwork required for adoption.
It was pointed out by Dr. Saxena that adoption governed by the Hindu Adoption and Maintenance Act, 1956 was administered by the Ministry of Law and Justice, whereas adoption of orphans is dealt with by the Ministry of Women and Child Development.
Karnataka HC Orders Rs 5 Lakhs Compensation To Man Wrongly Arrested
It has to be stated right at the very outset that a Single Judge Bench comprising of Hon’ble Mr Justice Suraj Govindaraj of Karnataka High Court in an extremely laudable, landmark, learned and latest judgment titled Ningaraju N v. Official Liquidator Of M/S India Holiday (Pvt) Ltd in Company Application No. 96 of 2022 in Company Petition No. 26 of 2008 pronounced recently on July 7, 2022 has directed the State Government to pay a compensation of Rs 5 lakhs to one Ningaraju N for wrongful arrest based on alleged confusion in his identity. It merits mentioning here that the Karnataka High Court has explicitly held that whenever warrant is issued, whether bailable or non-bailable, the arresting officer is required to ascertain the identity and be satisfied that the person proposed to be arrested is the same person as against whom the warrant has been issued. We thus see that the Karnataka High Court has made it indubitably clear by this learned judgment that when a person suffers because of being wrongly arrested then the State is certainly liable to pay a suitable compensation to him/her to compensate for the loss suffered by him/her as a consequence of such wrongful arrest! Very rightly so! It must be also mentioned here that this Company Application has been filed under Rules 6 and 9 of The Companies (Court) Rules 1959, with prayer being made to drop the proceedings.
At the outset, this brief, brilliant, bold and balanced judgment authored by a Single Judge Bench comprising of Hon’ble Mr Justice Suraj Govindaraj of Karnataka High Court sets the ball rolling by first and foremost putting forth in para 1 that, “This application has been filed for dropping the proceedings against Sri N.G.N. Raju S/o. Ningegowda on the ground that he is not the Ex-Director of the Company in liquidation as mentioned in CA.No.1382/2011. This Court in its earlier order dated 26.05.2022 dealt with the said issue and on verification it has been found that the applicant in C.A.No.96/2022 is not Raju N.G.N., who is the Ex-Director of the Company in liquidation.”
While taking potshots at the arbitrary and whimsical manner in which the arrest took place, the Bench then observes in para 2 that, “It is rather shocking that a person has been arrested without ascertaining whether he was the person who was required to be arrested and that the warrant had been issued against him. Though the arrestee had disputed that he was the person named in the warrant and the applicability of the warrant to him, his identification was not cross-checked and verified resulting an innocent person being arrested.”
Needless to say, the Bench then underscores in para 3 that, “The Right to Life and Liberty Guaranteed under Article 21 of the Constitution of India is of paramount importance. By arresting a person whose arrest was not authorized there is a violation of the fundamental rights guaranteed under Article 21 of the Constitution of India.”
While expressing serious reservation over the shoddy manner in which arrest had been made, the Bench then notes in para 4 that, “The only reason why the applicant had been arrested is that the name of his father was similar to the name of the person named in the warrant. I’am unable to comprehend as to how the name of the father being similar or even identical would have any role to play in the arrest, extrapolating the same logic if the arrest warrant has been issued for one brother, another brother or maybe even the sister could be arrested, merely, because the father name is identical.”
To be sure, the Bench then observes in para 5 that, “What is of primary importance is the identity of the person who is to be arrested and not any other aspect like the name of the father, though the same may have a corroborative role.”
Without mincing any words whatsoever, the Bench then stipulates in para 6 that, “Whenever any warrant is issued bailable or non-bailable, it is but required for the arresting officer to ascertain the identity of the person proposed to be arrested and be satisfied that the person proposed to be arrested is the same person as against whom a warrant has been issued.”
Quite notably, the Bench then lays bare in para 7 mentioning that, “In the present case though the arrestee had categorically stated that he was not the person named in the warrant, the arresting officer has not verified the same instead the arrestee has been arrested and produced before this Court, thereby causing harm and injury not only to the liberty of the arrestee but also to the reputation of the arrestee which are in violation of the fundamental rights guaranteed under Article 21 of the Constitution.”
It is worth noting that the Bench then directed in para 8 that, “If Guidelines or Standard Operating Procedure are already issued to cater to this situation, training in this regard to be provided to all arresting officers.”
While adding more to it, the Bench then further directs in para 9 that, “If not issued the Director General of Police is directed to issue suitable Guidelines and/or Standard Operating Procedure as to what are the steps to be taken by the arresting officer before arresting a person including the verification of identity. The same to be issued within 4 weeks from the date of receipt of the copy of this order. Registrar (Judicial) is directed to forward a copy of this order to the Director General of Police, Government of Karnataka, immediately.”
Most notably, most laudably and also most remarkably, the Bench then minces just no words whatsoever in para 10 to explicitly, elegantly, eloquently and effectively hold that, “In the present case, the arrestee having been put to loss of liberty as also loss of reputation, I’am of the considered opinion that the State would be liable to compensate the arrestee for the same. The compensation is fixed at Rs.5,00,000/- (Rupees 5 Lakhs only), the said payment to be made within a period of eight weeks from today. The State is at liberty to recover the same from the Police Officers who had arrested the applicant.”
As a corollary, the Bench then holds in para 11 that, “In view thereof, C.A.No.96/2022 is required to be allowed and the same is allowed.”
Finally, the Bench then concludes by directing in para 12 that, “Though the above matter is disposed, re-list on 1.9.2022 to report compliance with the above directions.”
No doubt, we thus see that the Single Judge Bench of Karnataka High Court comprising of Hon’ble Mr Justice Suraj Govindaraj has most commendably, cogently and convincingly ordered Rs 5 lakhs compensation to be paid to the person named Ningaraju N who was wrongly arrested due to the alleged confusion in his identity. It is high time and a statutory right to compensation must be enacted and if men in uniform are found to be indulging in maliciously framing any person due to which the person framed got wrongly incarcerated in jail for a number of years then those men in uniform must be not just dismissed from service but also be jailed and no bail should be given in such cases so that no men in uniform ever dares to take the personal liberty of any citizen of India for granted. If our country is able to ensure this for the benefit of citizens only then can we call ourselves free in the real sense!
There can be no gainsaying that the subject of “police” falls within the ambit of the State list under the Seventh Schedule of the Constitution as enunciated in Article 246 of the Constitution. So it is definitely the job of the State government to ensure that the police in their respective State functions properly and if they fail in ensuring this then they are liable to pay compensation to the person aggrieved as we see the Karnataka High Court directing the State Government to pay so to the person named Ningaraju N who was wrongly arrested due to the alleged confusion in his identity. Of course, the State is at liberty to recover the amount from the men in uniform who were guilty of wrongly framing an innocent person and jailing him/her for no fault!
Unquestionably, it is high time and now a law must be enacted whereby it would be mandatory for the State Government to award a huge compensation of at least Rs 25 lakhs to any person who is wrongly incarcerated so that this growing tendency of wrongly framing an innocent person is checked to a large extent as early as possible. It cannot be glossed over that the United Nations had drafted and so also introduced the International Covenant on Civil and Political Rights (ICCPR) in 1954 and after thoroughly going through each and every aspect on compensation, the ICCPR ultimately came into force on March 23, 1976. It must also be noted that India itself had ratified it and became a signatory to it on July 10, 1979. It also must be borne in mind that Article 9(5) and Article 14(6) of the ICCPR deal with a judicial remedy to victims of unlawful or wrongful arrest in the form of compensation.
It also cannot be glossed over that in August 2018, the Union Government had been submitted Report No. 277 on ‘Wrongful Prosecution (Miscarriage of Justice) : Legal Remedies’ by the Law Commission of India. The report, among other things had suggested the formation of special courts to deal with claims of compensation within a specified timeframe. But we ought to remember in this context that asking a victim to approach a special court for compensation would be akin to engrossing them into another protracted round of legal battle which will only make them suffer further and waste money in hiring lawyers, attending court proceedings etc. This definitely has to be avoided so that the victim does not have to suffer interminably.
In a nutshell, we can thus very rightly infer from what we have discussed hereinabove that what must be done forthwith is to make mandatory awarding of prompt compensation to all those persons who have been wrongly incarcerated and those men/women in uniform who are found guilty of malicious conduct in framing innocents without any fault of theirs must be most strictly punished and not just suspended for a very short span of time for public consumption only and then again reinstated once the public anger subsides. This open sham as we see so many times must end once and for all so that those in uniform never dare to breach the personal liberty of any citizen of India! It also merits no reiteration that there must definitely be most exemplary punishment in such cases so that no men/women in uniform ever dares to take the fundamental right of any citizen of right to life and personal liberty as encapsulated in Article 21 of the Constitution for granted any longer! No denying it!
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