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The anomaly in Afcons Infrastructure case

Feroz Pathan

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Is Section 89 of CPC, 1908 really an attempt to put a cart before the horse? Can the clash between Section 89 of CPC and Section 73 of ‘The Arbitration And Conciliation Act,1996’ be resolved ?

The Arbitration Act, 1940 was replaced by the Arbitration and Conciliation Act, 1996. The object of the Act was to consolidate and amend the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards and also to define law relating to conciliation and for matters connected therewith or incidental thereto. It was in larger compliance with the United Nations Commission on International Trade Law (UNCITRAL)- The Model Law on International Commercial Arbitration in 1985.

Post WTO Free Trade regime and globalisation of world economy, commercial transactions had witnessed a sea-change in its nature. With growing complexities in world trade, there was an urgent need to revamp the conventional mechanism for speedy settlement of domestic and international commercial disputes. This was facilitated through alternative dispute resolution by means of arbitration, conciliation, mediation, and negotiation which are considerably speedy, inexpensive, and confidential as compared to the conventional method of court proceedings.

The Judgement of Afcons Infrastructure and Ors. v. Cherian Verkay Construction and Ors 2010 (8)SCC 24 changed the course of arbitration proceedings in India in addition to Salem Advocate Bar Association case. The scope and interpretation of Section 89 of CPC,1908, suitability and unsuitability of arbitration for various disputes, consent of parties to the suit for arbitration , mandatoriness or voluntariness of ADR process and many other co-related issues were largely settled by the apex court burying the hatchet once and for all.

BRIEF FACTS OF THE CASE

Cochin Port Trust(2nd Respondent) entrusted the work of construction of certain bridges and roads to Afcons Infrastructure(appellants) under an agreement dated 20th April,2001. The appellants sub-contracted a part of the said work to the first respondent i.e. Cherian Varkey Construction (hereinafter referred as CV Constructions) under an agreement dated 1st August,2001. The agreement did not contain any provision for reference of the disputes to arbitration.

The first respondent Cherian Varkey Construction had filed a suit against appellants Afcons Infrastructure for recovery of Rs. 2,10,70,881 which includes the amount due to the appellants from the employer with interest .

In the same suit an order of attachment was made in regards to Rs.2.25 crores. The first respondent , CV Construction thereafter filed an application under section 89 of the CPC,1908 before the trial court praying that court may formulate the terms of settlement and refer the matter to arbitration.

Afcons Infrastructure filed a counter stating that they were not agreed for arbitration process under Section 89. Thus, the first respondent agreed for arbitration, whereas defendants 1 and 2 were not agreeable for arbitration.

The trial court held that since the claim was related to work contract , so dispute should be settled by arbitration. The appellants Afcons Infrastructure filed for revision against order of the trial court in High Court. It was dismissed by High Court holding that apparent tenor of section 89 of CPC permitted court, in appropriate cases to refer the dispute to arbitration even if parties are unwilling. The pre-existing arbitration agreement as mandated under Arbitration and Conciliation Act,1996 for referring the disputes to arbitration is inapplicable under section 89 of CPC,1908, further stated the court.

The said order of the Kerela High Court was thus challenged in Supreme Court through an appeal.

ISSUE BEFORE THE COURT

On the contentions pressed by the appellant, two questions arise for consideration before the apex court –

What is the procedure to be followed by a court in implementing Section 89 of CPC,1908 and Order 10 Rule 1A of the Code ?

Whether Consent of all the parties to the dispute/suit is mandatory for reference to arbitration under Section 89 of the Code?

Section 89 was incorporated in the Code of Civil Procedure, 1908 by the Amendment Act of 1999 to resolve the disputes without going to trial and pursuant to recommendations of the Law Commission and Malimath Committee report. The object, purpose, scope, and tenor of Section 89 was dealt in-depth by the apex court in this case.

Section 89 of CPC deals with Settlement of disputes outside the court and it reads- 1)Where it appears to the court that there exist elements of settlement which may be acceptable to the parties, the court shall formulate the terms of settlement and give them to the parties for their observations and after receiving the observations of the parties, the court may reformulate the terms of a possible settlement and refer the same for-

a) arbitration

b) conciliation

c) judicial settlement including settlement through Lok Adalat ; or

d)mediation

2) where the dispute has been referred –

a) for arbitration or conciliation , the provisions of Arbitration and Conciliation Act,1996 shall apply as if the proceedings for the arbitration or conciliation were referred for the settlement under the provisions of that Act;

b)to Lok Adalat, the Court shall refer the same to the Lok Adalat in accordance with the provisions of sub-section(1) of section 20 of the Legal Services Authority Act,1987 and all other provisions of that Act shall apply in respect of the dispute so referred to the Lok Adalat;

c)for judicial settlement, the Court shall refer the same to a suitable institution or person and such institution or person shall be deemed to be Lok Adalat and all the provisions of the Legal Services Authority Act,1987 shall apply as if the dispute were referred to a Lok Adalat under the provisions of that Act;

d) for mediation, the Court shall effect a compromise between the parties and shall follow such procedure as may be prescribed.

Order 10 Rule 1A- Direction of the Court to opt for any one mode of alternative dispute resolution- After recording the admissions and denials, the Court shall direct the parties to the suit to opt either mode of the settlement outside the Court as specified in sub-section (1) of Section 89.

A bare perusal of Section 89 can seem to be nothing more than importation of Section 73 of the Arbitration and Conciliation Act,1996 which to a much extent is like its replica. Section 73 of the 1996 Act has provision for settlement agreement and it reads- 1) When it appears to conciliator that there exist elements of settlement which may be acceptable to the parties, he shall formulate the terms of a possible settlement and give them to the parties for their observations. After receiving the observations of the parties, the conciliator may reformulate the terms of a possible settlement in light of such observations.

2) If parties reach agreement on a settlement of the dispute, they may draw up and sign a written agreement. If requested by the parties, the conciliator may draw up, or assist the parties in drawing up, the settlement agreement.

3) When the parties sign the settlement agreement, it shall be final and binding on the parties and the persons claiming under them respectively.

4) The conciliator shall authenticate the settlement agreement and furnish a copy thereof to each of the parties.

One may infer that Section 89 is trying to transcend the express powers of ADR mechanism provided under Section 73 of 1996 Act. Furthermore, Section 89 also empowers the court to formulate and reformulate the terms of settlement at a stage prior to reference to an ADR process. Even if court draws the terms of settlement , those will be totally redundant in any subsequent ADR process. Thus, civil courts are unnecessarily burdened with the task of formulating the terms of settlement at a pre-reference stage.

Apex Court has thus aptly observed that Section 89 of CPC,1908 is like “putting a cart before the horse and is wholly impracticable, if not impossible, yet the object behind it was laudable.”

Section 89 of CPC presupposes that there is no-preexisting arbitration agreement between the parties. Its only when by means of a joint application, the parties to the dispute agree for ADR before the court , the matter can be referred to arbitration under section 89 of CPC and on such reference, the provisions of Section 8 or Section 11 of the Arbitration and Conciliation Act,1996 would apply. This will take the dispute out of the court stream once and for all.

Furthermore, the apex court pointed out various drafting errors in Section 89 of the Code of Civil Procedure,1908 . The first anomaly is the mixing up of the definitions of ‘mediation’ and ‘judicial settlement’ under the clauses (c) and (d) of the Sub-section( 1) of Section 89 of the Code.

Clause (c) states that for judicial settlement , the court shall refer the same to a suitable institution or person who shall be deemed to be a Lok Adalat.

Clause (d) provides that where reference is to mediation, the court shall affect a compromise between the parties by following such procedure as may be prescribed.

It makes no sense to call a compromise effected by a court as a mediation as is done in clause (d). One even wonders how can a reference of a dispute made by court to a suitable institution or a person for settlement purpose be described as a ‘judicial settlement’. The mix-up of terms ‘Judicial Settlement’ and ‘Mediation’ in Section 89 has indeed created a jumble and confusion and appear as typographical or clerical errors in drafting.

JUDGEMENT

Supreme Court pronounced that it’s not necessary for the court to formulate and reformulate the terms of possible settlement before referring the dispute to arbitration. It’s sufficient even if court merely describes the nature of dispute or its summary and makes the reference.

Section 89 starts with words- ‘where it appears to the court that there exists elements of settlement’. This amply implies that only those cases suitable for ADR should be referred by courts to ADR and cases which are not suited for ADR process should not be referred under Section 89 of the Code.

The suitability and unsuitability of cases for ADR process was elaborated by apex court by providing an illustrative list. The Supreme Court stated that all cases of civil nature whether pending in civil courts or any tribunals can be referred to ADR process such as-

All cases relating to trade, commerce, and contracts

All cases arising from strained relationship , such as matrimonial cases

All cases where there is a need for continuation of pre-existing relationship such as disputes between neighbours and members of societies

All cases relating to tortious liability, including motor accident claims and all consumer disputes.

The apex court also held that it’s not ‘Mandatory’ to refer the parties to any ADR process in all cases. Where case falls under an excluded category, the court need not refer it to ADR process. In all other cases, reference to ADR is a must.

It was also held that a civil court cannot refer a suit to arbitration unless all the parties to the suit agree for such a reference. Thus, consent of parties in suit will be necessary for referring the subject-matter of the suit to arbitration.

CONCLUSION

ADR mechanism facilitates speedy resolution of disputes. It also reduces the burden of civil courts that are already dealing with whopphing number of pending cases yet to be cleared by them. Furthermore, only those cases capable of being resolved through arbitration are referred to ADR mechanism. Under the Act of 1996, the award of arbitration is enforceable as if it were a decree of court. The Afcons case thus put an end to most of the debatable issues that were a bone of contention in ADR mechanism.

The author is a budding lawyer at Delhi.

The Arbitration Act, 1940 was replaced by the Arbitration and Conciliation Act, 1996. The object of the Act was to consolidate and amend the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards and also to define law relating to conciliation and for matters connected therewith or incidental thereto. It was in larger compliance with the United Nations Commission on International Trade Law (UNCITRAL)—The Model Law on International Commercial Arbitration in 1985.

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AMENDMENT: UCC TO BE CHANGED FROM DPSP TO FUNDAMENTAL RIGHT

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No one in our country, our political leaders or individuals, have ever concentrated their efforts towards defining the Uniform Civil Code, All we know is that some common law covering issues relating to marriage, succession and property is called Uniform Civil Code but what these laws would be is anyone’s guess. Now, what does our Constitution say about Uniform Civil Code? In article 44, our constitution clearly specifies the UCC: “The State shall endeavor to secure the citizen a Uniform Civil Code throughout the territory of India” The constitution is thus, very clear that unless a uniform civil code is followed, integration cannot be imbibed. However, the fact is that it is only a “directives principle” laid down in the constitution and as Article 37 of the Constitution itself makes clear, the directive principles “shall not be enforceable by any court” Nevertheless, they are “fundamental in the governance of the country”. This shows that although our constitution itself believes that a Uniform Civil Code should be implemented in some manner, it does not make this implementation mandatory and hence, it is time that an amendment should be made making UCC a mandatory action to be taken by the country.

WHY IS UCC IMPORTANT?

The human rights of women in India have always been associated with the personal laws which involve social institutions like marriage and family; Indeed, it is the personal laws which lay down the legal contours of the status of women in these social institutions. UCC

as envisaged under our Indian Constitution is time and again hailed to be the miraculous cure for all the social problems faced by the Indian women which has recently been reiterated in the case of Shayara Bano, wherein a 35 year old Muslim woman calls to ban the practice of triple talaq and declare it as unconstitutional. The practices of polygamy and halala have also been brought under the judicial scanner, This has once again raised the question that whether UCC will be the magic solution in weeding out such practices which are being considered as oppressive and anti-women not only by people belonging to other religion but even group of people belonging to the same religion?

The principle of UCC essentially involves the question of secularism. Secularism is a principle which needs to be analysed at great length. However, due to the different family laws, they are treated differently based on their religion. In my opinion, to some extent, this goes against the underlying principles of the Indian Constitution, also Due to the various family laws, there is an ambiguity amongst people, which leads to differentiation between them on the basis of their religion. Having a uniform civil code (UCC) will mean that all these different laws will be replaced by a new law which will be applicable for all, irrespective of their religion.

The country has already suffered a lot in the absence of a uniform code for all. It is rather a pity that the longest and most elaborately written constitution in the history of mankind, the Indian constitution is responsible for creation of erosion in society. The society has been fragmented in the name of religions, sects and sex and even at present, in India, there are different laws governing rights related to personal matters or laws like marriage, divorce, maintenance, adoption and inheritance for different communities. The laws governing inheritance or divorce among Hindus are thus, very different from those pertaining to Muslims or Christians and so on; In India, most family law is determined by the religion of the parties concerned Hindus, Sikhs, Jains and Buddhists come under Hindu law, whereas Muslims and Christians have their own laws. Further, The various divorce laws prevalent in India at present are also inexplicable and indifferent on some matter of dissent of marriage such as—Parsi law requires a three year period of separation and it could serve as a ground both for judicial separation or divorce, while Indian Divorce Act provides for a period of two year separation and makes it a ground for judicial separation only and it is to say that each law suffers from some deficiencies and identical matters show differences. Also, Only Hindus can adopt a child in the sense of affiliating him or her legally and confer on the child rights of property Others cannot adopt even if they want to do so. They have to take recourse to the Guardian and Wards Act, but guardianship over a child falls far short of conferring the legal status of a son on the ward.

National identity will be more secure and human resources much better utilised. It will add to the country’s growth and development; Indian Divorce Act, Christian Marriage Act, Hindu Succession Act , Shariat Act are unnecessary complications. A Uniform Civil Code embodies justice and there should be no compromise on it. One nation should have one civil code. It is now 70 years since the Constitution came into force. It is high time there was a decisive step towards a common civil code. If not now, then when?

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JURISDICTION OF NCLT TO ADJUDICATE CONTRACTUAL DISPUTES DURING MORATORIUM: REVISITING THE POSITION

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INTRODUCTION

The Insolvency and Bankruptcy Code, 2016 has faced criticism over the past many years, but there still exists a debatable question on whether the code has been a successful outcome in the Country or not? Further, what makes this enactment better than the earlier one? In an opposed system, the Court acts as a referee between the prosecution and the defence and the whole system is a contest between the two events. The underlying principle is to find a solution between the research/investigation and the individual that ultimately decides the outcome. The old regime, the which existed prior to the enactment of the Code in 2016, changed after the enactment of the Code. Prior to December 2016, unsecured creditors mostly had two (2) approaches to getting better their claims; namely, lodging civil cases, or, initiating arbitration. All the answers to the aforesaid questions fall in the precise design and paraphernalia of the new code, which is a mixture of the government and judicial powers inside the shape of the National Company Law Tribunal (NCLT), making the legal process of insolvency observe an inquisitorial machine as was practised in continental Europe.

The plethora of contractual obligations being solved has been a distinctive issue. The powers that have been granted to the Courts have also been questioned especially with regard to the termination of contracts. In India, contracts are governed by the provisions under Indian Contract Act, 1872.

Recently in the case of TATA Consultancy Services Limited v. Vishal Ghisulal Jain, Resolution Professional, SK Wheels Private, the power of the National Company Law Tribunal (NCLT) was also challenged concerning contractual obligations, before the Hon’ble Supreme Court of India. The Supreme Court, in this case, observed that in all future instances falling under NCLT to adjudicate disputes which arise solely from or which relate to the insolvency of the Corporate Debtor cannot be invoked. Also further issuing a note stating that NCLT will have to be cautious of setting apart valid contractual terminations which might merely dilute the value of the corporate debtor, and not push it to its corporate dying by using distinctive features of it being the corporate debtor’s sole agreement. When it comes to balancing all the sectors altogether, it is necessary to know the limitations and powers of authorities. The rights of parties are important to be safeguarded. For the same reason, the powers and jurisdiction of the NCLT to adjudicate disputes under Sec. 60(5) (c) of the Code, which is an authority created by the Code itself, was questioned in the TCS Case, so that a clear picture can be drawn.

ROLE OF NATIONAL COMPANY LAW TRIBUNAL (NCLT) IN CONTRACTUAL DISPUTES

NCLT came into existence via statutes and was the outcome of the Eradi Committee, the powers of its sporting events are the ones that might be conferred upon it via regulation, which includes the IBC. The NCLT has been constituted underneath Section 408 of the Companies Act, 2013. It discharges such powers and features as are, or can be, conferred on it with the useful resource of or beneath this Act or some other law meanwhile in force. The NCLT has territorial jurisdiction over the vicinity where the registered workplace of the corporate person is located. NCLT is the adjudicating authority, with regards to insolvency decisions and liquidation for corporate humans inclusive of corporate borrowers and personal guarantors via the virtue of section 60(1) of the Code. The institutional framework under the Code pondered the establishment of a single umbrella platform to address subjects of insolvency and bankruptcy, which was earlier disbursed throughout a plethora of areas. In the absence of a court exercising jurisdiction over subjects referring to insolvency, the corporate debtor could file and/or shield a couple of complaints before NCLT.

SECTION 60(5)(C): THE RESIDUARY JURISDICTION OF THE NCLT

The residuary jurisdiction of the NCLT under Section 60(5)(c) of the Code, provides extensive discretion to adjudicate questions of regulation or fact check when it comes to the proceedings under the Code. The residuary jurisdiction conferred by the Code may extend to matters which aren’t in particular enumerated beneath the legislation. The jurisdiction of NCLT underneath Section 60(5) of the Code is normally seen as a comprehensive recourse to all problems regarding a corporate debtor undergoing company insolvency decision procedure (“CIRP”) or liquidation. In many cases, in recent years the Supreme Court has had the occasion to opine at the scope and volume of NCLT’s jurisdiction underneath Section 60(5) such as in the cases of M/s Embassy Property Developments Pvt. the Ltd. V. State of Karnataka, Gujarat Urja Vikas Nigam Limited v. Amit Kumar Gupta. Further, the Hon’ble Supreme Court in the recent judgment of TCS vs. Vikas Ghisulal Jain, was pleased to observe and lay down that the jurisdiction of NCLT under Sec. 60(5) (c) of the Code, cannot be invoked in subjects where termination may additionally take area on grounds unrelated to the insolvency of the corporate debtor. Further, it cannot even be invoked in the event of a valid termination of a contract based totally on an ipso-factoclause, if such termination does not have the impact of making positive the demise of the corporate debtor. Hence, the aforesaid judgment of the Supreme Court clarifies and fortifies the principle of law, that, while a residuary jurisdiction under a Code/Statute confers the Authorities/Tribunals/Courts/Forums under the Code/Statute with wide powers but then its jurisdiction has to be restricted to the scope and ambit of the statute or the effect of such dispute on the process initiated under the Code in this case and not beyond. Powers under Section 60(5) (c) of the Code, cannot be read as a sweeping power to adjudicate disputes which are in the realm of public law or beyond the provisions of the Code.

ANALYSIS OF THE JUDGMENT OF THE HON’BLE SUPREME COURT IN THE JUDGMENT OF TATA CONSULTANCY SERVICES LIMITED VS. VISHAL GHISULAL JAIN (RP) SK WHEELS PVT. LIMITED.

The judgment of the Hon’ble Supreme Court in Tata Consultancy Services Ltd (judgment dated 23.11.2021) clarifies the power of NCLT in relation to contractual obligations. In the present case, application was filed under Section 60(5)(c) of IBC, 2016, to quash a termination notice of a contract, as it was contended to barred during the moratorium period under Sec. 14 of the Code. Hon’ble NCLT was pleased to grant an interim stay on the termination of the contract and said interim order was upheld by Hon’ble NCLAT and thereafter the appellant knocked the doors of the Hon’ble Supreme Court to clarify the position of law under Sec. 60(5) (c) of the Code.

The issues that fell for consideration of the Hon’ble Supreme Court, were whether the NCLT has the power to adjudicate upon such contractual matters under Sec. 60(5) (c) of the Code and further the power of NCLT to grant an ad-interim stay while adjudicating such issue(s).

Heavy reliance was placed by the respondent on the judgment of the Supreme Court in the case of Gujarat Urja Vikas. In that case, NCLT stayed the termination of its power purchase agreement, which had triggered on the ground of insolvency, which was upheld by the Hon’ble Supreme Court.

The Supreme Court in reference to the present case stated that the agreement in question turned into termination via a third party based totally on an ipso facto clause. The reality of insolvency itself constituted an occasion of default. Hence in relation to the present case, the Supreme Court, proceeded to factually distinguish its judgment in Gujarat Urja Vikas and clarified that NCLT, under Sec. 60(5)(c) of the Code, has jurisdiction to adjudicate disputes, which relate to the insolvency of the corporate debtor and that there must be a direct co-relation and nexus with the insolvency of the corporate debtor. Thus, the residuary jurisdiction of the NCLT cannot be invoked if the termination of a contract is based on any other ground which is not related to insolvency of the corporate debtor.

Hence, in view of the aforesaid, the Hon’ble Supreme Court in the present case (TCS) ruled that the NCLT had exceed its jurisdiction and that the interim order passed by NCLT and upheld by NCLAT was bad in law and therefore was set-aside. Further, a word of caution was issued and laid down by the Hon’ble Supreme Court to the NCLTs and NCLAT with respect to using the residuary powers under Sec 60(5)(c) of the Code, with respect to interference with a party’s contractual right to terminate a contract, wherein it was pleased to observe and lay down that; “Even if the contractual dispute arises in relation to the insolvency, a party can be restrained from terminating the contract only if it is central to the success of the CIRP. Crucially, the termination of the contract should result in the corporate death of the Corporate Debtor.” (para 28).

CONCLUSION

The present case has again unfolded the jurisdiction and power of the apex court. The apex court holds the authority to determine the power of lower bodies. It is necessary to keep a check on such authorities in order to keep the work going authentically. The present case also sets an example that the bodies should be bound to exercise their jurisdiction in a particular manner. This case holds an important place in the development of jurisprudence under the Code, as the jurisdiction and power of NCLT have been clarified by the Supreme Court, in relation to interference by the NCLTs under Sec. 60(5) (c) of the Code to stay termination of the said contract pursuant to the triggering of the CIR process and thereby carving out and laying down strict contours on the jurisdiction envisaged under the residuary powers/ jurisdiction under Sec. 60(5)(C) of the Code.

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Intolerance and the search for identity: A history of communal tensions in Bangladesh

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“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”

-Sufia Kamal

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.

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Stern law on population control is need of the hour

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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.

Demographic dividend:

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.

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AN ADVOCATE CANNOT BE BOTH POWER OF ATTORNEY HOLDER OF CLIENT AND HIS COUNSEL: DELHI HC

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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

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INVALIDATING RETROSPECTIVE TAXATION CLAUSE: SIGNIFICANCE AND IMPLICATIONS

Ishita Singh

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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.

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