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Legally Speaking




A portfolio manager is a body corporate who pursuant to a contract or arrangement with a client, advises, directs or undertakes on behalf of the client (whether as a discretionary portfolio manager), the management of a portfolio of securities or the funds of the client. Generally, there are two kinds portfolio managers namely discretionary portfolio manager and non-discretionary portfolio manager. The discretionary portfolio manager separately and independently manages the funds of each client in accordance with the needs of the client. On the other hand, the non-discretionary portfolio manager manages the funds in accordance with the directions of the client itself. A cap of capital adequacy requirement of a portfolio manager is a must and the same must be maintained anyhow. The portfolio manager is required to have a minimum net worth of Rs. 2 crore. There is a requirement of registration fee which is to be paid by the portfolio managers. Every portfolio manager is required to pay Rs. 10 lakhs as registration fees at the time of grant of certificate of registration by SEBI.

For registration as a portfolio manager, an applicant is required to pay a non-refundable application fee of Rs.1,00,000/- by way of demand draft drawn in favor of ‘Securities and Exchange Board of India’, payable at Mumbai. The application in Form A along with additional information (Form A and additional information available on SEBI Website : submitted to the at the below mentioned address Investment Management Department – Division of Funds- 1 Securities and Exchange Board of India SEBI Bhavan, 3rd Floor A Wing, Plot No. C4-A, ‘G’ Block, Bandra-Kurla Complex, Bandra (E), Mumbai – 400 051.

It is pertinent to mention the recent update with respect to the informal circular issued by SEBI through an interpretative letter providing clarification to a Portfolio Manager (PM) rendering incidental investment advice to its clients. They are exempted to obtain registration as an Investment Adviser (IA) but are obliged to comply with the general obligations and responsibilities of the IA Regulations only to such clients that satisfy the minimum investment criteria under PM Regulations.

Fees chargeable by Portfolio Manager from its Clients

In this matter, the SEBI Portfolio Manager Regulations has not prescribed any scale of fee to be charged by the portfolio manager to its clients. However, the regulations provide that the portfolio manager should charge a fee as per the agreement with the client for rendering portfolio management services. The fee so charged must be a fixed amount or a return based fee or a combination. The portfolio manager must take specific prior permission from the client for charging such fees for each activity for which service is rendered by the portfolio manager directly or indirectly (where such service is outsourced).


The disclosure mechanism clause is not very complex towards the clients which is a plus point. The portfolio manager provides to the client the Disclosure Document at least two days prior to entering into an agreement with the client. This Disclosure Document contains the quantum and manner of payment of fees payable by the client for each activity, the portfolio risks, complete disclosures in respect of the transactions with respective related parties, the performance of the portfolio manager and the audited financial statements of the portfolio manager for the immediately preceding three years. Also, it is pertinent to mention that the disclosure document is neither approved nor disapproved by SEBI nor does SEBI certify the accuracy or adequacy of the contents of the Documents.

Moreover , the services of a Portfolio Manager are governed by the agreement between the portfolio manager and the investor. The agreement should cover the minimum details as specified in the SEBI Portfolio Manager Regulations. Apart from this, additional requirements can be specified by the Portfolio Manager in the agreement with the client. Hence, an investor is advised to read the agreement carefully before signing it.


As per the recent informal circular by SEBI, the portfolio manager shall periodically furnish a report to the client(s), as agreed in the contract, but not exceeding a period of six months and as and when required by the client. Such report must contain the following details as follows:-

(a) the composition and the value of the portfolio, description of security, number of securities, value of each security held in the portfolio, cash balance and aggregate value of the portfolio as on the date of report;

(b) transactions undertaken during the period of report including date of transaction and details of purchases and sales;

(c) beneficial interest received during that period in respect of interest, dividend, bonus shares, rights shares and debentures;

(d) expenses incurred in managing the portfolio of the client;

(e) details of risk foreseen by the portfolio manager and the risk relating to the securities recommended by the portfolio manager for investment or disinvestment.

This report may also be available on the website with restricted access to each client as per the circular. The portfolio manager must furnish all the relevant documents and information relating only to the management of a portfolio as per the agreement between the manager and the client thereof. The client has the right to obtain details of his portfolio from the portfolio managers at any given time.


All the clauses and the redressal mechanisms must be mentioned in the disclosure agreement. The investors would find in the disclosure document the name, address and telephone number of the investor relation officer of the portfolio manager who will be attending to the investor queries and complaints. Moreover, the grievance redressal and dispute mechanism is also mentioned in this document itself. Apart from this, investors can approach SEBI for redressal of their complaints. On receipt of such complaints, SEBI will take up the matter with the concerned portfolio manager and follow up with them. Investors can send their complaints to at the head office as well.

Moreover, investors can log on to the website of SEBI for information on SEBI regulations and circulars pertaining to portfolio managers. Addresses of the registered portfolio managers are also available on the website. The performance of a discretionary portfolio manager is calculated using weighted average method taking each individual category of investments for the immediately preceding three years and in such cases performance indicator is also disclosed. Also, the Portfolio managers cannot impose a lock-in on the investment of their clients. However, a portfolio manager can charge exit fees from the client for early exit, as laid down in the agreement.


Recently, SEBI under the interpretative request letter read with Informal Guidance analyzed the SEBI IA Regulations and the PM Regulations. It briefly talked about evaluation of registration and permissible activities undertaken by an eligible PM or a fund manager in relation to incidental advisory services to its clients. The fund manager of the AIF is also exempted from separate registration under IA Regulations for rendering investment or any incidental investment advice to its clients. Hence, the compliance provision concerning IA Regulations are inapplicable to the PM. Even though the PM is exempted from the IA registration, he/she is required to comply with general obligation and responsibilities of the IA Regulations. Moreover, in rendering incidental advisory services to the clients, PM must obligate to ensure that the minimum investment threshold of INR 5 million is satisfied as per PM Regulations.

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Legally Speaking

Animal welfare rights: Where does India stand?





Protection of animals is enshrined as a fundamental duty in the Indian Constitution and there exist several animal welfare legislations in India such as the Prevention of Cruelty to Animals Act 1960 and the Wildlife Protection Act 1972 at the Central level and cattle protection and cow slaughter prohibition legislations at the State levels. The Indian Penal Code (IPC) 1860 is the official criminal code of India which covers all substantive aspects of criminal law. Section 428 and 429 of the IPC provides for punishment of all acts of cruelty such as killing, poisoning, maiming or rendering useless of animals. The aforementioned legislations have been enacted to obviate unnecessary pain and suffering of animals and similar legislations continue to be enacted according to changing circumstances. Notwithstanding specific statutes, further protections for animals lie under general concepts such as tort law, constitutional law, etc. Some of these laws have been mentioned below:-

1. It is the fundamental duty of every citizen of India to have compassion for all living creatures. Article 51A(g)

2. Bears, monkeys, tigers, panthers, lions and bulls are prohibited from being trained and used for entertainment purposes, either in circuses or streets. Section 22(ii), PCA Act, 1960.

3. Stray dogs that have been operated for birth control cannot be captured or relocated by anybody including any authority. ABC Rules, 2001.

4. Abandoning any animal for any reason can lead to imprisonment for up to three months. Section 11(1)(i) and Section 11(1)(j), PCA Act, 1960.

5. To kill or maim any animal, including stray animals, is a punishable offence. IPC Sections 428 and 429.

6. No animal (including chickens) can be slaughtered in any place other than a slaughterhouse. Sick or pregnant animals shall not be slaughtered. Rule 3, of Prevention of Cruelty to Animals, (Slaughterhouse) Rules, 2001 and Chapter 4, Food Safety and Standards Regulations, 2011.

To put forth in detail one of the most important legislations made for the protection of animals in India is The Prevention of Cruelty to Animals Act, 1960.

The basic cruelty law of India is contained in the Prevention of Cruelty to Animals Act 1960. The objective of the Act is to prevent the infliction of unnecessary pain or suffering on animals and to amend the laws relating to the prevention of cruelty to animals. The Act defines “animal” as any living creature other than a human being. In accordance with Chapter II of the Act, the Government of India established the Animal Welfare Board of India (AWBI) with some of the following functions: Advising the central government regarding amendments and rules to prevent unnecessary pain while transporting animals, performing experiments on animals or storing animals in captivity, Encouragement of financial assistance, rescue homes and animal shelters for old animals. Advising the government on medical care and regulations for animal hospitals, Imparting education and awareness on humane treatment of animals, Advising the central government regarding general matters of animal welfare.

The Act enumerates different variants of cruelty to animals under Section 11 as the following actions:

a) Beating, kicking, overriding, overloading, torturing and causing unnecessary pain to any animal.

b) Using an old or injured or unfit animal for work (the punishment applies to the owner as well as the user).

c) Administering an injurious drug/medicine to any animal.

d) Carrying an animal in any vehicle in a way that causes it pain and discomfort.

e) Keeping any animal in a cage where it doesn’t have reasonable opportunity of movement.

f) Keeping an animal on an unreasonably heavy or short chain for an unreasonable period of time.

g) Keeping an animal in total and habitual confinement with no reasonable opportunity to exercise.

h) Being an owner failing to provide the animal with sufficient food, drink or shelter.

i) Abandoning an animal without reasonable cause.

j) Willfully permitting an owned animal to roam on streets or leaving it on the streets to die of disease, old age or disability.

k) Offering for sale an animal which is suffering pain due to mutilation, starvation, thirst, overcrowding or other ill-treatment.

l) Mutilating or killing animals through cruel manners such as using strychnine injections.

m) Using an animal as bait for another animal solely for entertainment.

n) Organizing, keeping, using or managing any place for animal fighting.

o) Shooting an animal when it is released from captivity for such purpose.

However, the Act does not consider as cruelty the dehorning/castration of cattle in the prescribed manner, destruction of stray dogs in lethal chambers in prescribed manner and extermination of any animal under the authority of law. This Section provides somewhat of a leeway. Part IV of the Act covers Experimentation of animals. The Act does not render unlawful experimentation on animals for the purpose of advancement by new discovery of physiological knowledge or knowledge to combat disease, whether of human beings, animals or plants. It envisages the creation of a Committee for control and supervision of experiments on animals by the central government which even has the power to prohibit experimentation if so required. Chapter V covers the area of performing animals. Section 22 prohibits exhibiting or training an animal without registration with the AWBI. The Section prohibits animals such as monkeys, bears, lions, tigers, panthers and bulls from being utilized as performing animals. An additional leeway provided by the Act is that under Section 28, nothing contained in the Act shall render it an offence to kill any animal in a manner required by the religion of any community. Considering the diversity of religions and traditions in India, this Section was considered imperative.

Despite so many regulations every day, cases of cruelty to animals are reported across the country. But the perpetrators often get away unscathed as the penalty for a first-time offender is a meagre Rs 50 under the Prevention of Cruelty to Animals (PCA) Act 1960. Animal welfare activists have been trying for decades to amend the Act and pushing for more stringent penalties. The government has prepared a draft to amend the 60-year-old Prevention of Cruelty to Animals Act, proposing penalty up to Rs 75,000 or three times the cost of the animal with jail term up to five years or both if an act of an individual or an organisation leads to an animal’s death. The draft has proposed offences in three categories – minor injury, major injury leading to permanent disability, and death to an animal due to cruel practice – and prescribed different penalties ranging from Rs 750 to Rs 75,000 and jail term up to five years for different crimes.

Its proposed new section, meanwhile, has the following provisions—

11 (A): Gruesome cruelty or life-threatening cruelty against animals, for which the penalty is Rs 50,000 per animal or the cost of the animal as determined by a jurisdictional veterinarian. This carries imprisonment of one year which may extend to three years or both.

11 (B): Killing of an animal for which the penalty is Rs 75,000 per animal or three times the cost of the animal as determined by the jurisdictional veterinarian, whichever is more, with imprisonment of three years which may extend to five years or both.

11 (C): Exceptions (exemption to section 11 (B) killing of an animal): i) accident ii) in defence of self or property (iii) by an act of god or war (iv) any other unforeseen circumstance outside the control of any person in general.

Under Section 12—which deals with the practice of doom dev (the process of blowing air into a cow’s vagina to induce production of more milk) or the injection of any substance to improve lactation—the draft proposes Rs 75,000 as the penalty with imprisonment of three years which may be extended to five. The current penalty is Rs 1,000, two years in prison or both.


In the EU, the European Convention for the Protection of Pet Animals governs the treatment of companion animals. The basic principles for animal welfare presented in this treaty are that nobody shall cause a pet unnecessary pain, suffering or distress. Additionally, no one shall abandon a pet animal. It gives the guidelines for who can own a pet and there is an entire section on trading, commercial breeding, and boarding and animal sanctuaries. This legislation is helpful because it takes preventative measures instead of just relying on redress when an animal has been abused. The treaty contains protective measures existing for the welfare of the animal, not just the owner of the animal. The main component to the shift in Europe toward more progressive animal welfare laws is the recognition of moral status in animals. Animals are seen to have inherent value. No longer are animals seen as having value only as property. The recognition of an animal’s ability to feel pain has made a huge difference in the animal welfare laws in Europe. Laws exist to minimize unnecessary suffering for the benefit of animals as well as humans.

In the United States, there are three federal statutes governing animal welfare. These are the Animal Welfare Act , the Humane Methods of Slaughter Act and the Twenty-Eight Hour Act of 1877.

Please read concluding on

The Animal Welfare Act generally refers to animals used in scientific experiments and does not pertain to companion animals pets or animals raised for food. State anti-cruelty acts regulate the treatment of companion animals. The anti-cruelty acts protect against intentional infliction of pain, suffering, injury and death on animals. Some states have protections against animal fighting as well. State anti-cruelty statutes as applied to companion animals often work to convict persons accused of animal abuse. A federal law on the treatment of companion animals may help prevent these abuses from happening in the first place through regulating who can own pets, sell pets and regulating spaying and neutering. In most states, pets are considered the property of their owners and are regulated as such. In Switzerland, Germany and Norway, the animal welfare statutes do not have special provisions for companion animals. The general provisions apply to companion animals. All three of these countries recognize that the protection of animal welfare is for the benefit of the animals, not just the humans who come in contact with the animals.


Now considering the current situation it is a brutally honest fact that the state of animals in India 2021 is not good, the cases of cruelty inflicted on animals are being heard every now and then, people don’t understand that even these living being, these stray animals feel pain and it is wrong to take this issue so lightly specially in a community where people are educated and aware, I believe children should be educated in order to become front runners in protection of animal rights, shelter homes should be there in every state for abandoned animals. The first step itself towards which is educating children to have respect for animals and treat with them kindly. Food and shelter should be provided to street dogs by government shelters, and registered firms and NGOs to assure their safety. Banners and posters should be put up at all major areas of the town to spread awareness among general public about being compassionate with animals. Frequent raids should be conducted against people who operate under the guise of shelter providers or ‘rescuers’. These hoarders often fail to provide for animals’ physical and social needs, including food, water, veterinary care and sanitary living conditions. Further, animals are often confined to tiny cages or crates by them, which are stacked on top of each other. If everyone starts to look at animals and not just dogs and cats as fellow animals, who share our planet, we will see far fewer cases of cruelty towards animals. Organisations such as the SPCA and PETA, which are working for animal rights, can achieve a lot if they receive help from local organisations and public in general.

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Legally Speaking

Unclogging the clogged pipelines of justice

Ajay Bhargava



While Shakespeare with his golden words, “Brevity is the soul of wit”, might have influenced the world across centuries, the same is yet to permeate the ironclad Indian Judicial System. The Indian Judicial System has long attracted the opprobrium generated with its fabled clogged pipelines. With more than 3.9 crore cases pending in the district and subordinate courts, 58.5 lakh cases in the various high courts, and more than 69,000 cases in the Supreme Court, it is speculated that if no new cases are filed then the Judicial System will take around 360 years if not more to adjudicate upon the pending cases. The same has been worsened with the onset of Covid-19 induced lockdowns and restrictions, with figures showing that the number of pending cases has increased by at least 19% since March last year. These figures have been met with public outrage, administrative despair, countless discussions/debates/academic papers riddled with suggestions etc. However, the same is hardly followed with any implementable solutions.

Recently, there has been a welcome shift in how the proceedings are conducted in one of the Supreme Court’s courtroom. Recognising the humongous backlog and lack of any concrete action taken to combat the same, the Supreme Court has decided to put a cap on the length of oral arguments and accompanying written submissions, in the matters before them. The Supreme Court while delivering the judgement in Ajit Mohan & Ors v Legislative Assembly National Capital Territory of Delhi & Ors highlighted the extraordinary amount of time taken, of four months, between reserving the judgement and the final pronouncement of the order/judgement. Alongside the Covid-19 induced difficulties, the Court also took note of factors like voluminous compilations, synopses being longer than submissions, the contemporary attitude of the “courtroom becoming a competing arena of who gets to argue for the longest time” etc. contributing to the delay. The Court called attention to overwhelmingly complex judicial precedents and the need for writing clearer and shorter judgements which could be easily understood by litigants, and prolonged interim proceedings defeating the purpose of the interim nature of the same.

A few weeks later in the case of Yitin Narendra Oza v High Court of Gujarat, the Supreme Court, inspired by the practices of the Supreme Court in United States, Article 6 of the European Convention on Human Rights and practices followed in the United Kingdom set down a schedule of hearing for the learned counsels, disallowing multiple counsels to argue. It was directed that learned senior counsels between themselves will take one hour to make their submissions, whereas the opposing counsel was granted 45 minutes and lastly the intervention application filed in the case were allotted 15 minutes to finish their submissions. Further, they directed the “parties to file a short synopsis running into not more than three pages each and confine their submissions in line of that synopsis with not more than one judgement cited per proposition”.

The Indian Judicial System had been an outlander with its archaic and unorganised court room practices, case management system etc., with the need for the same being recognised way back in 1984, with the Law Commission of India’s 99th Report on ‘Oral and Written Arguments in the Higher Courts’. The same was not followed with any change in context of Oral Arguments. However, with this move we are one step closer to keeping up with the court room norms and practices across the globe. The United States Supreme Court, for instance, is well-known to be very punctilious for adhering to the time allocated to the parties. Rule 28 of the US Supreme Court Rules gives the rules regulating Oral Arguments. The Rule states that,

“Unless the Court directs otherwise, each side is allowed one-half hour for argument. Counsel is not required to use all the allotted time.”

Similar to India, in the first six decades of its operation the Court did not impose any time limit and accordingly the hearings used to span across days and weeks. However, in 1849, a four-hour limit was introduced, which was further reduced to two hours in 1920 and finally in 1970 the current one-hour limit was adopted. The same led to an exponential increase in the number of cases dealt by the Court in a year, going up to 150 cases a year. Interestingly, with the advent of Covid and introduction of online mode of adjudication coupled with a slight deviation from the strict adherence of half an hour time allotted for an argument, the Court has only heard around 60 cases in recent times, which is a significant reduction of more than 50%.

Singapore on the other hand, does not have hard and fast rule stipulating a fixed time like the US Supreme Court or any other standard rule for determining the time needed by the parties. Instead, parties write to the Court to indicate the amount of time that they are likely to require, and the Court accordingly decides the time limit based on the relevant indications and its own estimation of the complexity of the matter/appeal. The Clerk then notifies all the parties of the time allotted to them. The counsel is encouraged and required to finish their arguments/submission in the allocated time unless the need for an extension of time is in part the result of extensive questioning from the bench itself. UK is also heading towards a similar practice, with some of the civil and arbitration related rules stipulating the need for prior submission of documents to determine an estimate length of the hearing.

Conversely, the European Convention on Human Rights goes a step beyond to determine the length of civil and criminal proceedings in a seemingly ambiguous manner. Article 6 of the European Convention on Human Rights states that,

“In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.”

Now the question that arises is what constitutes as reasonableness? What are the determining factors for the same? In Frydlender v. France, the Court stated that, “the “reasonableness” of the length of proceedings must be assessed in the light of the circumstances of the case and with reference to the following criteria: the complexity of the case, the conduct of the applicant and of the relevant authorities and what was at stake for the applicant in the dispute.”. Therefore, it largely depends on the circumstances of the case and is extremely subjective in nature. However, there is an established exception wherein the assessment is not made on account of the circumstances of the case when there have been frequent breaches of the reasonable time requirement by the defendant state.

Evidently, India has a plethora of models that it can learn from, to up its case management game and ensure speedy justice is delivered, since justice delayed is justice denied. However, it cannot be stressed enough that we have to be very cautious in whatever method we do choose to learn from or adopt. The same is because it is possible that a method adopted to speed up the process could itself cause further delay. For instance, if we were to adopt a purely Singapore and UK centric model without proper, centralised guidelines to temper the time allocation process it could lead to several grievances and complaints. The same might even require a redressal mechanism rendering the entire process not just useless but counterintuitive as well.

As the Supreme Court noted in the postscript of the Ajit Mohan & Ors v Legislative Assembly National Capital Territory of Delhi & Ors judgement, the aim is to kickstart a discussion in the legal fraternity to combat these issues for ‘the common man’. The time is nigh for us to take concrete and substantial steps. A good start to the same is the notable practice adopted recently by the Supreme Court wherein, the daily list of cases comes with specific instructions for lawyers which requires the parties to be ready with a short synopsis of not more than three pages each in the final hearing/disposal matters. While the bar has made the first move, it would be good to remember that it takes two to tango. A pro-active Bar with self-discipline if not self-regulation can help the Bench in cutting this Gordian Knot. The Bar can definitely take a leaf out of the American Comedian, actor & writer George Burns book who famously quoted, “The Secret of a good Sermon is to have a good beginning and a good ending, then having the two as close together as possible.”.

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Legally Speaking

Enemy within: Cryptic case of increasing instances of cyber sabotage in India



A fledgling issue of a miscalculated measure but of critical pertinence, the complication of “Cyber-sabotage” is an all-encompassing phrase that refers to state and non-state actors targeting computing systems, often those that govern a nation’s vital infrastructure of critical and strategic importance. Such disruption-tactics can range from causing minimal impediments of public utilities to designing absolute mayhem by subjecting a Nation to incessant surveillance, or by hindering the access of a Nation to its assets of paramount importance – with the only way the affected Nation could retain the control of such assets back is by acceding to the demand of a ransom. Surprising and saddening as it is, the foremost cause for concern in these digitally sensitive times is the executive machinery’s discomforting quietness & furtiveness, as well as its disinterest towards openness, in disclosing the occurrences of cyber-sabotage on the country’s key infrastructure & critical assets. In order to fully grasp the magnitude of the problem, a look closer back home in India would be of particular interest to gain an intuitive insight into the magnitude of the predicament we are looking at.

The nodal national cyber-security agency of India has reported a colossal 1.15 million cyber-attacks in March 2021, according to the statistics provided by the Union Ministry of Home Affairs of the Government of India. This is an alarming twenty-fold hike in the reported instances of infractions over the 2016 figures. These disturbing stats are also buttressed by reports from independent and non-governmental firms & companies that India has now become one of the five most cyber-attacked nations. The majority of such cyber-attacks are aimed at dismantling vital assets of pivotal importance, with the banking sector, the defence infrastructure, and the oil & natural gas installations being the most recurrent targets amongst the lot – not to mention the pervasive magnification of the instances of ransomware attacks on the medicare and the pharma sector, especially at a time when the medical infrastructure of India was infirmly decrepit under the bludgeoning blows of the Second Wave.

Hence, taking into account the skyrocketing of the cases of cyber-attacks on India’s critical assets and strategic infrastructure of vital importance – a robust and rugged policy of Interception, Espial, and Response is the need of the hour. To better appreciate where the deficiencies of India’s cyber-security bulwark lies, let us understand first how the chassis of the Indian cyber-security framework looks like. Essentially, this framework functions on three central facets, i.e. – One, the identification of any attempts or attacks of cyber-sabotage; Two, a swift & speedy response system to a cyber-attack, thereby curtailing the attacker from inducing any additional harm, and; Three, interception of any incoming cyber-attack or an attempt of cyber-sabotage before it is able to penetrate a pregnable software or hardware component of a critical asset.


As much as India possesses an enviably fortified cyber-security defence set-up, however an ineffectual & callous response system acts as a fly in the ointment to its efficaciousness – perhaps, this weak link in an otherwise formidable framework can be attributable to the success of most of the cyber-attacks that India has witnessed in the past decade or so.

Woeful as it may seem, even in the face of frequent infractions of its cyberspace and in the tall claims of being a “cyber superpower”, the administrative setup of India often functions in a disorganized and disoriented fashion whenever pitted up against a cyber-attack – in the lack of specific organizational mandate, there lies chaotic confusion amongst its agencies and authorities, as who should finally have the jurisdiction over a particular instance of transgression. To add to the despondent state of affairs, the lackadaisical approach of the Indian bureaucracy to issues of grave & pressing concerns, coupled with its primordially deep-rooted affliction of “red-tapism”, often generates a response which is far too little, far too late – and, all of this ineffectuality in the response-system occurs even after the presence of two highly modernized & sophisticated nodal agencies which are tasked exclusively with providing cover on the cyber-front to the critical assets & vital infrastructures of India.

The nodal agencies that are being referred to here are,

One, the Indian Computer Emergency Response Team (“CERT-In”) – established in the year 2004 under the Information Technology Act, 200 (“IT Act”), with the Ministry of Electronics & Information Technology (“MEITY”) being in charge of its affairs and functioning.

Two, the National Critical Information Infrastructure Protection Centre (“NCIIPC”) – established in the year 2014 under the IT Act as well, with the National Security Advisor of India administering over the NCIIPC via the National Technical Research Organization (“NTRO”).

In the dearth of a clear course of action and a coherent & comprehensible line of communication between the agencies & authorities concerned, the end result is a dawdling & dilly-dallying response to a cyber-attack – and even if we were to pin our hopes on a diligent administrative revamp & restructuring aimed at a more streamlined functioning of the cyber-agencies and authorities in the near future, it would be a pipe-dream to expect an immediate change in the state-of-affairs immediately after such an overhaul. And for this very reason, our attention should be concentrated less on the response-system, and more on the development and advancement of prevention mechanisms – for, that is where the true panacea lies to the maladies of the disconcerting concerns of cyber-sabotage.


It is practically unworkable to detect and respond to each and every cyber-attack or attempt at cyber-sabotage aimed at India – let us not kid ourselves here, India faces thousands of such transgressions on a daily basis (perhaps far more, considering that not all cases are reported), and owing to a dearth of resources at the disposal of the concerned agencies and authorities, it is impracticable to put to effect the “detection-response” modus operandi.

Without question, our best bet then to tackle the virulence of violations on the virtual front is to bolster the strategies which can aid in preventing such cyber-attacks from happening in the first place – and such a “prevention” policy should ideally peruse a two-pronged approach:

Prong One: A robust and rigorous evaluation and certification of the components (both of software and hardware) that is being put to operation in critical assets and vital infrastructure (like, in the defence and security of the nation, for health & medicare, in communications & information technology, to name a few)

Prong Two: To instill and engender reasonable and practical standard operating procedures (“SOP”) amongst all the relevant stakeholders, with the view of increasing the awareness on the importance of observing protective security practices in the cyberspace

In recent times, many of the administrative decisions that have been taken with respect to acquiring software or hardware components made, manufactured, or assembled outside the territory of India escape reason in toto, and reek a lot of knee-jerk backlash riding high on the horse name nationalism. To buttress this assertion, let us go back to the abrupt ban foisted on over 100 Chinese mobile applications last year on the grounds of such apps being deleterious to the interests of sovereignty, integrity, and national security of India – and, I don’t wish to insinuate a challenge to the Governmental wisdom here. However, what is suspect is that such a disruptive decision was taken without any due factual or technical investigation of a scientific nature to scrutinize the dangers of such apps – however, if there was an inspection of this kind that was undertaken, it begs the question: why were the results of the same never made public?

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Let us consider yet another example – the Department of Telecommunication (“DoT”) proclaimed an official pronouncement, whereby it amended the licenses of telecom carriers to mandate the use of equipment only from “trusted sources” with effect from the mid of June of this year – simply put, no telecom carrier can buy a software or hardware component from a seller post-June 15 of 2021 which isn’t approved by the government, anymore. To add to the questionable series of events, as per this notification, the Designated Authority (appointed by the Government, mind you) can also create a list of such sellers whose software and hardware equipment shall be blacklisted, and with whom any sort of transaction shall jeopardize the interests of telecom carriers. The modus operandum of the DoT notification bears an uncanny resemblance with the banning of the Chinese apps last year – there is no account of what the basis of the administrative acuity behind the decision was, and it, unfortunately, seems like a step taken merely on the perception that such software and hardware components made, manufactured or assembled by certain companies of certain nations “may” serve as the stairs of backdoor surveillance.

Arguendo, even if the justification of such apprehensions of a looming threat to the nation’s assets by such pieces of equipment were to carry weightage – nonetheless, an action exclusively on populist premises, and not on investigative reason and rational, is daftly imprudent. Disheartening as it is, the Electronics & Information Technology Goods (Requirement of Compulsory Registration) Order, 2021 (“Order of 2021”) of the MEITY is perhaps the only policy document of consequential value that affirms the logical rationale of amply testing hardware pieces of equipment first, and thereafter objectively scrutinizing the data of such testing. In close parallels, the Indian Telegraph Rules, 1951 (“Rules of 1951”) mandate for a compulsory assessment of any telecom hardware before it can be given the green light to be sold in or imported to the domestic market in India. In furtherance of the Rules of 1951, the DoT has issued a public list of all telecom components and pieces of equipment that have to be mandatorily tested before they can be put to commercial or personal use in India. However, the catch is that be it in the Order of 2021, or the Rules of 1951, or the public list of the DoT – the scope of mandatory testing applies only to hardware pieces of equipment, and not to the software components.

The functioning of any electronic system is premised on a symbiosis of both the hardware component and the software element – and only the Heavens know why the current legal fabric does not necessitate a compulsory checking of the software element, especially in light of the fact that almost all reported cyber-attacks aimed at India were directed at destabilizing the software-element first!

Concluding Remarks

A lot of us have envisaged the Personal Data Protection Bill, 2019 (“Bill of 2019”) as the light at the end of this dark tunnel; as a one-pit stop solution to all the infirmities of and the loopholes afflicting India’s cyber-security framework, once the Bill becomes an Act – and that thought is misguided. On one hand where the Bill of 2019 aims at protecting the personal data of Indian citizens, what we need is an exhaustive and extensive cyber-security law – which not only plugs the already existing loopholes but also fosters the notion of an all-encompassing research-and-development-induced culture while addressing the issue of cyber-sabotage.

In this game of playing catch-up, Technology is far, far ahead of Law. Metaphorically speaking, if the two of them were to play a game of football; Technology would have scored a few hundred goals before Law would get to know where the goalpost is – in a lighter vein, after all kanoon andha hai.

Jokes apart, on a more realistic note – in India, for metamorphosing from a Bill to a Law, the journey encompasses an extensive legislative process; perhaps, even judicial scrutiny in some instances. On the other hand, Technology advances overnight! And with every technological progression, comes out novel ways in which such technological advancement could be put to a perverse usage – just like we have witnessed over the past decade or so the myriad mutations and variations of the means and manners in which cyber-attacks can be conducted.

And perhaps this solicitude is what makes the significance of the advent of a novel cyber-security enactment all the more consequential. Not only would this particular legislation have to keep up with the newfangled and disruptive ways of cyber-criminals, but it will also have to create a singular nodal agency or authority to address all issues and instances of cyber-sabotage – the creation of this sole authority or agency will go a long way in having a streamlined approach to any particular infraction of the Indian cyberspace. At the present time, we are not endowed with such an approach due to an overlap of mandate between multiple agencies and authorities, and a disarray that follows subsequently with regards to which authority or agency holds competent jurisdiction over an instance of a hack. And very importantly, the need for a new legislative enactment is of paramount importance to place a bar on the administrative authority from taking impulsive and hasty decisions which per se have no objective backing to them – perhaps the only way to diminish the fallout of a cyber-attack on an asset or infrastructure (critical & vital, or otherwise) is to infuse a culture of approaching every vulnerability with a systematic and scientific outlook.

They say an outdated Law, which perhaps doesn’t serve the society today as it did a certain yesterday, is like quicksand – and it ultimately ends up engulfing the same society it was made to serve. Perhaps, the most formidable adversary to India’s virtual defences is not a black-hat hacker operating from a distant, far away land – it is our rambling cyber-security architecture that is in utter shambles. The enemy within is the antiquated legal framework governing our cyberspace, which has lived far beyond its expiry date.

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Legally Speaking

Practice of not answering query regarding maintenance of petition By An Advocate Is Deprecated: Madhya Pradesh High Court



It is really good to see that the Madhya Pradesh High Court has as recently as on July 30, 2021 in a latest, learned, laudable and landmark judgment titled Arun Singh Chauhan Vs State of MP & Ors in W.P. No. 11298/2021 has chosen to clearly deprecate the conduct of a practicing advocate who chose not to answer the repeated queries of the Court pertaining to the maintainability of his petition seeking issuance of a writ of quo warranto and regarding the non-impleadment of a necessary party. It must be mentioned here that the Division Bench of Madhya Pradesh High Court comprising of Justice Sujoy Paul and Justice Anil Verma also dismissed his petition challenging the posting and performance of duty of an administrative officer as SDM/SDO at a particular place with a cost of Rs 10,000/-.

It is stated right at the outset in this notable judgment regarding the law laid down that, “Article 226 of the Constitution – Writ of Quo Warranto – Can be issued to test the validity of appointment to a public office. The said writ cannot be issued to examine the posting or working of an officer to particular place.

Writ of Quo Warranto – Necessary party – The person against whom writ is prayed for is a necessary party.

Public Interest Litigation – Conduct of petitioner – A practising Advocate has chosen not to answer the repeated queries regarding maintainability of a petition seeking issuance of writ of quo warranto and regarding non impleadment of necessary party. The practise deprecated.

Exemplary cost – Since writ of Quo Warranto was not maintainable and there is no other public interest element involved, the petition was dismissed with exemplary cost.

Writ of Quo Warranto – Can be issued to question an appointment on the substantive post. The working of an officer on officiating posting or a particular station cannot be subject matter of the petition for issuance of writ of Quo Warranto.”

To start with, Justice Sujoy Paul who has authored this brief, brilliant and balanced judgment for a Division Bench of Madhya Pradesh High Court comprising of himself and Justice Anil Verma sets the ball rolling by first and foremost observing in para 1 that, “The petitioner, a practising Advocate has filed this Public Interest Litigation wherein it is prayed as under:-

(a) Issue appropriate writ of Quo Warranto and may direct to respondents to take serious disciplinary action against Respondent No.4 and if he is unable to show or prove such an authority he may be ousted and restrained from functioning in the office and future bar also may be directed, which he has unlawfully usurped and intruded into or is unlawfully holding.

(b) Issue appropriate writ and may cost penalty on respondent for being on such post without proper authority for so long (one and half year).

(c) Issue appropriate writ and if he is not able to prove his authority then all the actions and proceedings taken by him must be suspended with immediate effects.

(d) Issue any other further order/orders or direction/directions as this Hon’ble Court may deem fit and appropriate to the facts and the circumstances of this case.”

Simply put, the Bench then states in para 2 that, “In para three of the petition, it is averred as under:-

“That the Petitioner is shattered by that an officer of different district is how liable to become an SDO/SDM of different district as the matter of fact is that the Respondent No.4 was an Administrative Officer of District Dhar on the post of Land Acquisition and Rehabilitation Officer, NHDC Kukshi, District Dhar and then he was transferred to District Alirajpur on the post of Dy.Collector but during both the posting he was not there and during above both the postings he was performing his duty and taking action from last one and half year in district Indore on the post of SDO/SDM of various subdivision of district Indore, even he is not the officer of district Indore, which is totally illegal and unlawful as the appointment of Respondent no.4 in Indore district on the post of SDO/SDM is not in accordance of law. And on remaining on the same post as SDO/SDM he defamed common people by posting their punishing image on personal handled Instagram page.””

As we see, the Bench then states in para 3 that, “The petitioner submits that on 14/12/2020 an order was passed by State government whereby 10 officers were transferred. Respondent No.4 was also transferred as Dy.Collector, Alirajpur from NHDC, Kukshi. The respondent No.4 never joined at District Alirajpur and started performing duty of SDM/SDO, Kanadiya Indore. Thus, writ of quo warranto may be issued against respondent No.4 to show under which authority he has working as SDM/SDO, Kanadia, Indore. The respondent No.4 SDO/SDM is misusing authority and making fun of common people and publishing those photographs on instagram. Hence, a writ of quo warranto may be issued.”

To put things in perspective, the Bench then envisages in para 6 that, “The petitioner has not filed the appointment order of the concerned officer/respondent No.4. The order dated 14th December, 2020 (Annexure P/4) shows that respondent No.4 is an officer of State Civil Services. The order further shows that he was posted as Dy.Collector. The appointment of respondent No.4 is not called in question. Indeed his posting and performance of a duty at a particular place namely Kanadia, Indore is called in question. This is clearly outside the scope of writ of quo warranto. We may hasten to mention that on more than one occasion the Court enquired from the petitioner, a practising Advocate as to how a writ of quo warranto is maintainable when petitioner is not challenging the appointment of respondent No.4 and has not chosen to implead him by name. Sadly, petitioner decided to avoid the said question repeatedly asked.”

As it turned out, the Bench then hastens to add in para 7 that, “The Apex Court in B.R. Kapoor Vs. State of Tamil Nadu AIR 2001 SC 3435 opined that a person against whom the writ of quo warranto is prayed for is a necessary party.”

Be it noted, the Bench then enunciates in para 8 that, “In HALSBURY’S LAWS OF ENGLAND, it is observed: “Broadly stated, the quo warranto proceedings affords a judicial inquiry in which any person holding an independent substantive public office or franchise or liberty is called upon to show by what right he holds the said office. If the finding is that the holder of the office has no valid title to it, the issue of the writ of quo warranto ousts him from that office. It confers jurisdiction and authority on the judiciary to control executive action in the matter making appointment to public offices against the relevant statutory provision; it also protects a citizen from being deprived of public office to which he may have a right. It would thus be seen that these proceedings are subject to the condition recognised in that behalf, they tend to protect the public from usurpers of public office; in some cases, persons not entitled to public office may be allowed to occupy them and continue to hold them as a result of the convenience of the executive or with its active help, and in such cases, if the jurisdiction of the courts to issue writ of quo warranto is properly invoked, the usurper can be ousted and the persons entitled to the post allowed to occupy it. It is thus clear that before a citizen can claim a writ of quo warranto, he must satisfy the court, inter alia, that the office in question is public office and is held by usurper without legal authority, and that necessarily leads to the enquiry as to whether the appointment of the said alleged usurper has been made in accordance with law or not.” [See HALSBURY;’S LAWS OF ENGLAND, 3rd Edn.; Vol.II. p.145].”

It deserves mentioning here that the Bench then points out in para 9 that, “In R. Vs. Speyer (1916) 1 K.B. 595 the appointment of a Privy Counselor was allowed to be questioned by a private person who had no personal interest in the matter. In India, the principle laid down in R. Vs. Speyer (supra) is followed and it was held that:- “In a proceeding of a writ of quo warranto to test the validity of appointment to a public office, the applicant does not seek to enforce any right of his as such, nor does he complain of non-performance of any duty towards him. What is in question is the right of the non applicant to hold the office. Hence, it is not necessary in such a case that the applicant must have some personal interest in the matter.” [See R. Speyer,(1916) 1 KB 595] (emphasis supplied).”

Furthermore, the Bench then states in para 10 that, “It is trite that a writ of quo warranto can be issued against a person and related to a post which he is substantively holding. It is relevant to examine the legal journey on this aspect.”

It is worth noting that the Bench then observes in para 11 that, “The Constitution bench of Apex Court in the matter of University of Mysore v. C.D. Govinda Rao (1964) 4 SCR 575 has held as under:-

“6. Broadly stated, the quo warranto proceeding affords a judicial enquiry in which any person holding an independent substantive public office, or franchise, or liberty, is called upon to show by what right he holds the said office, franchise or liberty, if the inquiry leads to the finding that the holder of the office has no valid title to it, the issue of the writ of quo warranto ousts him from that office…..” (emphasis supplied).”

What’s more, the Bench then enunciates in para 12 that, “In the matter of B.Srinivasa Reddy v. Karnataka Urban Water Supply & Drainage Board Employees’ Assn; (2006) 11 SCC 731(2), the Apex Court has held as under:-

“43……..The order appointing the appellant clearly stated that the appointment is until further orders. The terms and conditions of appointment made it clear that the appointment is temporary and is until further orders. In such a situation, the High Court, in our view, erred in law in issuing a writ of quo warranto the right under Article 226 which can be enforced only by an aggrieved person except in the case where the writ prayed for is for habeas corpus”. (emphasis supplied).”

Going ahead, the Bench then states in para 13 that, “In the matter of N. Kannadasan v. Ajay Khose (2009) 7 SCC 1 the Supreme Court has held as under:- “131…………The writ of quo warranto proceedings affords a judicial remedy by which any person who holds an independent substantive public office is called upon to show by what right he holds the same so that his title to it may be duly determined and in the event it is found that the holder has no title he would be directed to be removed from the said office by a judicial order……………..” (emphasis supplied).”

Moving on, the Bench then notes in para 14 that, “The Delhi High Court in the matter of S.K. Dubey vs. Union of India, 1983 SCC Online Del 32 has held as under:-

“7…………An information in the nature of quo warranto lay only if the office was substantive in character, that is, an office independent in title, and if the holder of the office was an independent official, not one discharging the functions of a deputy or servant at the will and pleasure of others. An information in the nature of a quo warranto lay in respect of an office held at pleasure, provided that the office was one of a public and substantive character.”

Please read concluding on

“26…….. “The test to be applied is whether there has been usurpation of an office of a public nature and an office substantive in character, that is, an office independent in title.” [R. v. Speyer (1916) 1 KB 597 at page 609]. The office must be a substantive office, that is, an office of independent character as contrasted with the employment of a deputy or mere servant……………” (emphasis supplied).”

Adding more to it, the Bench then observes in para 15 that, “This Court also in the matter of Anand Selot vs. Chief Secretary, Govt. Of MP & Ors. 2010 ILR (MP) 1357 has held as under:-

“18……………..As respondent No.3 is not substantively holding the post of Engineer-in-Chief, petitioner cannot question the said appointment, when it is not a substantive appointment to the post and seek a Writ of Quo Warranto”.

“20. If the judgment of the Supreme Court in the case of B.Srinivasa Reddy (supra) and N. Kannadasan (supra) and the Allahabad High Court alongwith the powers to be exercised by an incumbent holding post on current charge basis are evaluated in the light of the facts that have come on record, it is clear that a writ of Quo Warranto would not be maintainable in the case of such an appointment.” (emphasis supplied).”

Significantly, the Bench then observes in para 16 that, “In the instant case, the petitioner has not challenged the appointment of respondent No.4. The posting and working of respondent No.4 cannot be a reason for issuing the writ of quo warranto.”

More significantly, the Bench then points out in para 17 that, “For issuance of writ of quo warranto the locus standi is insignificant but to maintain a regular writ petition, the petitioner must show that he is a “person aggrieved”. This petition for issuance of quo warranto by no stretch of imagination can be treated to be a public interest litigation. In the matter of Retd. Armed Forces Medical Association and others Vs. Union of India & Ors. (2006) 11 SCC 731 (I) the Apex court held that “a petition praying for a writ of quo warranto being in the nature of public interest litigation, it is not maintainable at the instance of a person who is not unbiased. The proceedings of quo warranto is not meant to settle personal scores…..”. In the same judgment, the Supreme Court opined that if petition for issuance of writ of quo warranto is filed with impropriety or mala-fide intentions, exemplary cost should be imposed.”

Most significantly, the Bench then holds in para 18 that, “As analysed above, the petition for writ of quo warranto is not maintainable. It appears that petition is filed to either settle personal score or gain publicity. We deprecate such practice and deem it proper to dismiss the petition with cost of Rs.10,000/- (rupees ten thousand). Petitioner shall deposit Rs.5,000/- (rupees five thousand) before High Court Legal Aid Committee, Indore within 30 days and remaining Rs.5000/- (five thousand) in the fund of High Court Bar Association, Indore within the aforesaid time. The bar association may utilise the said fund for the purpose of relief to be given to the Covid affected lawyers/family members. Petitioner shall deposit the receipts obtained from said bodies before the Registry of Court within 30 days from today failing which Registry shall apprise the Court regarding non compliance so that suitable proceedings/contempt proceedings may be initiated.”

Finally, the Bench then holds in para 19 that, “The petition is dismissed with cost.”

All said and done, the Division Bench of Madhya Pradesh High Court comprising of Justice Sujoy Paul and Justice Anil Verma makes no bones in making it absolutely clear that the practice of not answering query regarding the maintainability of petition by an advocate is deprecated and cannot be condoned. It goes without saying that the advocates must always play by the rules of the book and always prefer to answer query regarding the maintainability of petition. All the advocates must always adhere to what the Madhya Pradesh High Court has laid down so clearly, cogently and convincingly in this leading case. It shall certainly be always in their own best interest as also in the best interest of their client also. Of course, the earlier they realize this and start implementing it also, the better it shall be in their own best term longer interests as also their clients! There can be certainly just no denying it!

Sanjeev Sirohi, Advocate,

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Legally Speaking




In a progressive, powerful and penetrating observation, the Kerala High Court has just recently on July 27, 2021 in a latest, landmark, laudable and learned judgment titled A Hameed Hajee v. State of Kerala in WP(C) NO. 14867 OF 2021 while ruling explicitly that trade is not more important than health has dismissed a petition seeking withdrawal of the weekend lockdowns imposed in the State amid the pandemic. It must be mentioned here that the Bench of Kerala High Court comprising of Chief Justice S Manikumar and Justice Shaji P Chaly observed that the prayers sought for by the petitioners would be contrary to the directions issued by the Supreme Court. Very rightly so!

To start with, this latest, learned, laudable and landmark judgment authored by Chief Justice S Manikumar for himself and Justice Shaji P Chaly of Kerala High Court sets the ball rolling by first and foremost observing in para 1 that, “Instant writ petition has been filed for the following reliefs:-

“i. Issue a writ of mandamus or any other appropriate writ order or direction to the respondent to withdraw the lock down imposed on Saturdays and Sundays and restriction imposed on all shops, establishments, banks, other institutions, in the state enabling them to function on all days without any time restrictions;

ii. Issue a writ of mandamus or any other appropriate writ order or direction to the respondents to allow the shops, establishments, banks, other institutions to function more time including Sundays to reduce overcrowding of people by maintaining social distancing at all time;

iii. Issue a writ of mandamus or any other appropriate writ order or direction to the respondent to pass an order to functions Offices and other essentials services of Government Banks and Financial Institutions and other institutions on Sundays by following rotations of employees by granting leave on weekday to ensure services to all needy by avoiding overcrowding;

iv. Issue a writ of mandamus or any other appropriate writ, order to the respondent implement effective and efficient plan to strict adherence of Covid Protocol and Social Distancing each and every corner of the state.””

To put things in perspective, the Bench then puts forth in para 2 that, “Short facts leading to filing of the writ petition are as hereunder:-

According to the petitioner, the lock down and restrictions imposed by the State Government to control the spread of Covid-19 has proved to be as unsuccessful, evidencing from the current status of continuing constant rate of TPR in the State. Due to the indefinite extension of complete lock down on Saturday and Sundays, and other restrictions on the functioning of shops, establishments, Banks and other Institutions in the State, on a restricted time period and days, cause overcrowding in all these places, during the period of its functioning, cases have not come down. Petitioner has contended that the number of people or customers are not reduced, by imposing the lock down, but the Government have restrained, to a shorter period, to avail and meet the demands of public and others, the needs and requirements, which cause the overcrowding in shops and other establishments, violating the Covid Protocol and social distancing, the most effective and efficient method accepted across the world, for controlling spread of Covid-19. Petitioner has further contended that there are more than 30 lakh shops and establishments functioning in the State of Kerala and more than 90 lakh workers employed in these shops and establishments. Due to lock down and restrictions on the functioning of shops and establishments, merchants, businessmen, their employees and their families are facing huge financial stringency. The family of these people are purely depending on these sectors for their livelihood and other needs. Due to restrictions to open and functioning of the shops and establishments, huge stock purchased by the merchants are lying idle, holding their huge investment. Apart from that, dues in rent for shops and buildings, electricity and water charges, EMI for loan, wages and salary of its works and employees, etc., piled up the financial burden and liability of merchants in the State. Petitioner has also contended that in the urge of effective and efficient method to control the Covid-19 in the State and safeguard the interest of the merchants and businessmen in the State, according to the petitioner, the Government is still continuing with the proven failed method of implementing lock down and restriction on shops and establishment to control spread of pandemic Covid-19, which is highly necessary to be withdrawn in the current scenario and that the Government should come out with effective implementation of Covid Protocol, social distancing and sanitation and cleanliness, a world wide accepted method of controlling spread of Covid-19.”

Simply put, the Bench then envisages in para 5 that, “Learned Advocate General further submitted that having regard to the ‘Kanwar Yatra’ in Uttar Pradesh, Hon’ble Supreme Court registered Suo motu Writ Petition (C). No.5 of 2021 and, on 14.7.2021, issued certain directions and further directed to list the matter on 16.07.2021. Subsequently, on 18.07.2021, an interlocutory application, viz., I.A. No.82837 of 2021, in Suo motu Writ Petition (C).No.5 of 2021 is filed on behalf of one Mr. P.K.D. Nambiar, pointing out certain news articles, which portray an alarming situation taking place in Kerala as a result of Bakrid celebrations.”

Most significantly, the Bench then observes in para 6 that, “Having heard learned counsel for the parties therein, in I.A. No.82837 of 2021, the Hon’ble Supreme Court, on 20.7.2021, passed the following orders:

“What is extremely alarming is the fact that in Category D, where infections are the highest i.e. 15%, a full day of relaxation has been granted, which was yesterday. It is then stated that, as far as possible, the persons visiting shops and other establishments may belong to those with at least one dose of vaccine/COVID recovered category and follow strict COVID protocols, echoing paragraph (vi) of the 17th July, 2021 Notification, along with the Chief Minister’s appeal. The aforesaid facts disclose an alarming state of affairs. To give in to pressure groups so that the citizenry of India is laid bare to a nationwide pandemic discloses a sorry state of affairs. Even otherwise, homilies such as “as far as possible” and assurances from traders without anything more, do not inspire any confidence in the people of India or this Court. We may only indicate that this affidavit discloses a sorry state of affairs as has been stated hereinabove, and does not in any real manner safeguard the Right to Life and Health guaranteed to all the citizens of India under Article 21 of the Constitution of India. It may also be pointed out that the relaxation for one day to a Category D area was wholly uncalled for. In these circumstances, we direct the State of Kerala to give heed to Article 21 read with Article 144 of the Constitution of India, and follow the law laid down in our orders in the Uttar Pradesh case i.e., 14.7.2021, 16.7.2021 and 19.7.2021. Also, pressure groups of all kinds, religious or otherwise, cannot in any manner, interfere with this most precious Fundamental Right of all the citizens of India. We may also indicate that if as a result of the Notification dated 17.07.2021, any untoward spread in the Covid-19 disease takes place, any member of the public may bring this to the notice of this Court, after which this Court will take necessary action against those who are responsible. In view of the above, I.A. No.82837 of 2021 and the suo motu writ petition are disposed of.””

Adding more to it, the Bench then points out in para 7 that, “Mr. K. Gopalakrishna Kurup, learned Advocate General, further submitted that there will be a review of the COVID-19 pandemic situation in Kerala and depending upon the decision, the restrictions either relaxed in certain cases or made stringent, as the case may be. According to him, only after a comprehensive decision is taken, appropriate orders will be issued by the Government.”

Furthermore, the Bench then points out in para 8 that, “Placing on record the above submission, having regard to the orders of the Hon’ble Apex dated 20.7.2021, extracted supra, and taking note of the submission that a review will be conducted on COVID-19 pandemic situation, we are of the view that the interim order granted on 19.05.2021, periodically extended, requires further extension. Interim order is extended upto 9.8.2021. Registry is directed to post this suo motu writ petition on 06.08.2021.””

What’s more, the Bench then further added that, “Thus, when the Hon’ble Supreme Court had already taken note of the Covid situation in Kerala and observed that relaxation of the restrictions, even for a day to some category of area, was wholly uncalled for, and that when the Hon’ble Supreme Court has also observed that it was the sorry state of affairs that State of Kerala, does not in any real manner, safeguard the rightful life and health guaranteed to all the citizens under Article 21 of the Constitution, the prayers sought for, would be contrary to the directions issued by the Hon’ble Supreme Court.”

Finally and far most significantly, the Bench then holds in the final para that, “That apart, judicial notice can also be taken that in the State of Kerala, the Test Positivity Rate is increasing, despite the measures taken by the Government, to contain the spread of Covid – 19. Trade or business is not more important than health, which is integral to right to life. Reasonable restrictions can be imposed on trade or business. Article 19 (6) and 21 of the Constitution of India, encourages, right to trade and business. If only there is health and life, one can engage himself in trade or business. Having regard to the above, we are not inclined to issue any mandamus as prayed for by the writ petitioner. Writ petition is dismissed.”

Of course, it would not be an exaggeration to say that the final para forms the cornerstone of this brief, brilliant and balanced judgment which very rightly accords the supreme importance to health and also minces no words to hold that, “Trade or business is not more important than health, which is integral to right to life.” We all must always adhere to it and this alone explains why it is so famously said also that, “Health is wealth.” If our health is not good then we cannot enjoy anything in life no matter how much wealth we may have with us! There is certainly no valid reason to disagree with what the Division Bench of Kerala High Court comprising of Chief Justice S Manikumar and Justice Shaji P Chaly have held so explicitly, elegantly and effectively in this noteworthy case while dismissing the plea seeking withdrawal of weekend lockdown in the State! There can certainly just be no denying it!

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Legally Speaking




The resolution of disputes by arbitration has become one of the preferred modes of dispute resolution in India. The reasons for the popularity of arbitration as a mode of dispute resolution are three-fold: one, arbitration provides for a quick resolution of the disputes between the parties by a mutually (sometimes also unilaterally appointed) appointed arbitrator(s), respecting party autonomy and consent of the parties; two, the evolution of arbitration-friendly approach of courts and legislature in India; and three, the provisions of compulsory/optional arbitration under different statutory instruments in India. The Micro, Small and Medium Enterprises Act, 2006 (MSMED Act) passed by the Indian Parliament with the objective of the promotion, development, and enhancement of competitiveness of micro, small and medium enterprises enunciates statutory arbitration as a recovery mechanism in cases of disputes concerning payment of dues between the parties.

One of the central objectives of the MSMED Act is to provide for speedy disposal of the claims of the suppliers (micro, small and medium enterprises under the MSMED Act) with regards to recovery of dues. Chapter V of the MSMED Act enacts the provisions regarding delayed payments to MSMEs. Section 18 of the MSMED Act lays down the procedure to be followed for the resolution of disputes concerning payments due to be paid by a buyer to a supplier under the MSMED Act. Section 18 of Chapter V enunciates a two-tier dispute resolution mechanism for the settlement of payment disputes between the parties: first, the parties may make a reference to the Micro and Small Enterprises Facilitation Council (Facilitation Council) and the Facilitation Council shall then, either itself or through any other institution or centre providing alternate dispute resolution services, conduct conciliation in the matter under the provisions of Part III of the Arbitration and Conciliation Act, 1996 (ACA); and second, if the conciliation is unsuccessful and there is no settlement of disputes between the parties, the Felicitation Council is mandated to either itself conduct an arbitration or refer the parties to any institution or centre for conducting such arbitration under the provisions of ACA.

Recently, the Hon’ble Supreme Court of India (SCI) in M/s Silpi Industries & Ors. v. Kerala State Road Transport Corporation & Ors., Civil Appeals Nos. 1570-1578 of 2021 (Silpi Industries) decided upon two important questions of law regarding statutory arbitration under the MSMED Act read with the ACA. The following were the questions answered by the SCI in its judgement: (1) Whether or not the provisions of the Indian Limitation Act, 1963 apply to arbitration proceedings initiated under Section 18(3) of the MSMED Act; and (2) Whether or not, a counter-claim is maintainable in such arbitration proceedings. In this article, the authors shall be analysing the judgement of the SCI in Silpi Industries, and its potential implication on Micro and Small industries registered and unregistered under the MSMED Act.


There were two batches of appeals heard by the SCI in Silpi Industries. In the first batch of appeals, the appellants were aggrieved by the judgement of the High Court (HC) of Kerala in an arbitration appeal matter wherein the HC had held that Limitation Act, 1963 is applicable on proceedings initiated under Section 18(3) of the MSMED Act read together with ACA. Further, following the judgement of the Allahabad HC in M/s B.H.P. Engineers Pvt. Ltd. v. Director, Industries, UP Facilitation Centre, Kanpur & Ors., 2009 SCC OnLine All 565 and the Nagpur Bench of Bombay HC in M/s Steel Authority of India Ltd. & Anr. v. Micro, Small Enterprise Facilitation Council, 2010 SCC OnLine Bom 2208, the Kerala HC had held that owing to the provisions of Section 23(2A) of the ACA, counterclaim and set off is maintainable in an arbitration proceeding arising out of institutional arbitration under Section 18(3) of the MSMED Act.

In the second batch of appeals, i.e., Civil Appeals No. 1620-22 of 2021, the appellant was aggrieved by the judgement of the Madras HC in which a second arbitrator was appointed by the HC under Section 11(6) of the ACA. The relevant facts were such that the appellants had filed a claim petition against the respondent before the Facilitation Council under the MSMED Act. Although the respondent appeared before the Facilitation Council, the respondent, in furtherance of its arbitration agreement with the appellant, had made an application before the Madras HC for the appointment of a second arbitrator under Section 11(6) of the ACA. The Madras HC allowed the application of the respondent for the appointment of a second arbitrator, and owing to the provisions of the MSMED Act, did not agree with the case of the appellant that the application of respondent is liable to be dismissed given the pending claim petition before the Facilitation Council. Aggrieved by the order of the Madras HC, the appellant had preferred Civil Appeals No. 1620-22 before the SCI.


Applicability of Limitation Act, 1963 on arbitral proceedings under the MSMED Act-

To begin with, the first issue which concerns the applicability of the Limitation Act on the arbitral proceedings under the MSMED Act, the Supreme Court concurred with the decision of the High Court and reiterated the ratio laid down in one of its previous judgments. Taking note of the provisions of Section 43 of the ACA, the SCI propounded that Limitation Act, 1963 will also be applicable on arbitrations arising out of Section 18(3) of the MSMED Act. The apex court observed that when the parties to a dispute, one of whom is qualified as an MSME enterprise, fail to come to terms under the MSMED Act, Section 18(3) of MSMED Act obliges the Facilitation Council to refer the parties to arbitration as per the ACA. Once arbitration is invoked as per Section 18(3) of the MSMED Act, all the provisions of the ACA will automatically become applicable to it. Accordingly, every such arbitral proceeding shall be deemed to be construed as arising out of an arbitration agreement stipulated under Section 7(1) of ACA, even when the parties had not incorporated such arbitration agreement at the time of entering into a contract. The stance taken by the Supreme Court on this particular issue seems to be settled from the beginning as a variety of judgments by courts ranging from High Courts to the Supreme Court have consistently followed this approach. Furthermore, a contrary view to the above-stated position is not feasible as the law on such an issue is clear, categorical, and longstanding. Any contrary view would sabotage the primary purpose of limitation contemplated under the Limitation Act, 1963.

Maintainability of counter-claim & set-off in an arbitration proceeding under the MSMED Act-

Another very important aspect that constitutes the heart of the judgment is the issue of the maintainability of counterclaim in arbitral proceedings initiated under Section 18(3) of the MSMED Act. In this regard, the Court had delved into the legislative intent underlying the MSMED Act, 2006 which is to safeguard the interests of the MSMEs. The said legislation confers benefits upon the sellers which qualify to be MSMEs, in pursuance of a beneficial object that it purports. Such conferment of benefits can find its roots within various provisions of Chapter V of MSMED Act which not only prescribes the rights and obligations of the seller and the buyer, respectively, but it also provides for the mechanism for recovery of any unpaid amount to the seller. Sections 15 and 17 of the MSMED Act 2006 require the buyer to make payment of the amount due to the seller (MSME) within the time agreed by the parties or time prescribed under the Act, failure of which would render the buyer liable to pay the due amount in addition to compound interest at the rate three times of the bank rate. Additionally, Section 19 enables the buyer/applicant to apply for setting aside an award, decree, or order passed in favour of the seller, only when she deposits 75% of the amount in terms of the award or decree.

Given the aforesaid provisions, the court opined that ousting the jurisdiction of the Facilitation Council merely on the ground of inadmissibility of the counterclaim by the buyer/Respondent under proceedings under section 18(3) of MSMED Act would defeat the very purpose of the MSMED Act as the seller (MSME) would not be able to enforce its rights against the buyer in case of any default in payment by the latter. That is to say, if counter-claim is not allowed, the buyer can easily evade its statutory obligation of payment of compound interest at the rate three times of the bank rate and security deposit of 75% envisaged under Sections 16 and 19 of MSMED, respectively, by filing a counter-claim in the proceedings under Section 18(3) of MSMED Act. Such a decision implies that even when there is a separate agreement for the resolution of disputes between the parties, the parties are bound to follow the recovery mechanism stipulated under the statute of the MSMED Act.

The mechanism for the recovery of the unpaid amount provided within Section 18 of MSMED Act stipulates that in case of any dispute with regards to the non-payment of amount due to the seller, any party may refer to the Facilitation Council which will then conduct conciliation between the parties as per subsection (2) Section 18 of MSMED Act. It is only when the parties fail to conciliate, the parties are mandatorily referred to arbitration under Section 18(3) as a result of which all the provisions of ACA will become applicable to such arbitration as if there is an arbitration agreement between the parties under Section 7(1) of ACA. While making special reference to Section 23(2A) of the ACA, the Supreme Court has highlighted that when there is already a provision for filing a counterclaim under Section 23(2A) of the ACA, there is no point in denying the right of the buyer/respondent to file a counterclaim in the arbitration proceedings before the Facilitation Council under Section 18(3) of MSMED Act. The rationale behind the insertion of the provision of counterclaim within the ACA was to prevent multiplicity of proceedings and diverse claims. Curtailing the right of buyer/respondent in the arbitration proceedings under Section 18(3) would initiate parallel proceedings in distinct forums. In this way, the seller who is a beneficiary under the MSMED Act would claim before Facilitation Council under the provisions of the MSMED Act, while the buyer would either approach the civil court for making its claims or seek the appointment of an arbitrator if there is an arbitration agreement between the parties. Hence, refusal to admit the counterclaim in the arbitral proceedings before the Facilitation Council under Section 18(3) of MSMED Act, 2006 will lead to conflicting findings by different forums and render such proceedings redundant.

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