Blockchain is the flavour of the times with a lot of organisations and individuals joining the digital bandwagon. It is not just organisations, but even governments are trying to implement blockchain Technology for their governance and other activities given the immutable nature of blockchain. It is interesting to note that blockchain could be used in the domain of Law. However, blockchain as a technology brings forwards a lot of cyber legal aspects & challenges that need to be addressed in a holistic manner of the intersection of law & technology.
Blockchain relates to the concept of distributed ledger, wherein the blocks are connected in a chain through secured cryptography methods. Blockchain has numerous advantages like transparency, immutability, decentralisation, scalability and security. This article intends to put forth and discuss the legalities and legal challenges, aspects relating to blockchain technology focusing on cyber legal perspective.
BLOCKCHAIN IN A NUTSHELL
Let us consider the newspaper publishing this article as a blockchain network. The article published herein is a block and the content in the article is nothing but the data in the block, the article is published on a particular date and day which can be considered as timestamp. This article is circulated among all the subscribers of this newspaper or the members of this forum. However, no member nor a subscriber to this newspaper can modify or alter the contents of this article but can secure access to the content of this article. However, the non-subscribers of this newspaper or non-members of this forum shall not be able to access the contents of this article.
From the above one can relate that there is transparency, decentralisation, and immutability. This in simple sense, is the concept of blockchain in a nutshell. Further in case of any modifications to this article, the revised article shall be published by the newspaper on new date and day which is the new timestamp and the original and revised both shall be available to the subscribers and members of the forum along with the proper and exact timestamp. As they already have access to the original article which was published earlier and since the revised article is also accessed by them due to the publication of the newspaper now.
However, considering the above in case any alteration or revision is required to be made to the data in the block a new block is created with such revision and is connected to the original block as a new block along with the proper and exact time stamp.
In a nutshell blockchain shall consist of blocks linked together in a chronological order using cryptography. Each block shall consist of data, hash of the previous block. The hash can be compared to as the digital fingerprint and the hash in the previous block in the sequence.
USE OF BLOCKCHAIN FOR PROPERTY OWNERSHIP
Consider the details of all the previous owners of the property that are stored in each block and each of the block getting connected in chronological order with the other block along with the date and timestamp fetches the records of the ownership from the previous owner to the present owner.
Using blockchain technology for verification of clear title can be a good option so as to establish the exact and proper ownership. This can ensure that there is no tampering of data anywhere in the chain.
BLOCKCHAIN AND LAW
It is essential to understand the potential benefit blockchain has, however, it is imperative to also understand the kind of legal consequences that visit you while making use blockchain technology. Blockchain as a technology populates legal policy regulatory issues and challenges that need to be specifically addressed. I intend to collate various legal and cyber legal aspects surrounding blockchain in this article.
LEGAL RECOGNITION AND LEGALITY OF BLOCKCHAIN
The primary aspect that blockchain as a technology presents is the aspect of legal recognition and legal consideration. Given the kind of adoption of Blockchain it becomes important to grant legal recognition and legality to blockchain transactions. However, from a layman’s perspective blockchain is ultimately information and data in electronic format created using computers, computer systems, computer networks, computer resources and communication devices like mobiles and tablets. Given the fact that a lot of countries have come up with national legislations on cyber law from UNCTRAL (United Nations Commission on International Trade Law) model law of electronic commerce, one can perceive that legality may be granted to blockchain transactions.
However, the people from the conservative school of thought opine that specific and dedicated blockchain Law shall be required with focal thrust on providing legality to blockchain and the transactions thereof.
ENTRIES ON BLOCK AND BLOCKCHAIN LEGAL STATUS
Yet another significant legal aspect that needs to be considered is the legal status on the entries on the block and blockchain. Considering the use of Blockchain Technology for determining the property ownership, the interesting question that crops up is whether a mere entry made on the block conveys, assigns, transfers ownership of one owner to the other? Well the current position is unclear and is ambiguous. I believe that the presumptions relating to the above has to be clearly and specifically addressed. While we are thinking it may take couple of decades for the blockchain Law to be a mainstream, some countries have come up with new manifestations by way of legislations recognising blockchain as a kind of electronic record.
Let’s take the case of Nevada, USA, which has amended its Uniform Electronic Transaction Law (UETL) recognising blockchain as an electronic record created by the use of a decentralised method by multiple parties to verify and store digital record of transactions which is secured by the use of a cryptographic hash of previous transaction information. The law further prohibits imposing of any tax or fee by the government on the use of blockchain by any individual or an entity. The law also has come up with specific requirement of obtaining a certificate, licence or a permit for use of a blockchain by any individual or an entity.
Further, Vermont Law has declared blockchain based digital record as a business record as per the Vermont Rules of Evidence.
While the State of Delaware has come up with a law that stimulates the use of blockchain technology for the purpose of creation and maintenance of corporate records including corporations stock ledger.
With privacy being the tip of the ice-berg, blockchain as a technology is presenting privacy issues concerning personal and data privacy. With the kind of intrinsic nature blockchain demonstrates the moment an information is generated or entered on the block, the same shall be made available to all the stake holders in the said blockchain network. The net effect of this means that the data is transparent evaporating the concepts of privacy whether be it personal privacy as also data privacy. In the areas where confidentiality and privacy are assuming immense significance the challenges of data privacy in the light of blockchain adoption will have to be addressed from a legal and cyber legal perspective specifically in countries like India where now privacy is made a fundamental right of every citizen.
BLOCKCHAIN AND INDIAN CYBER LAW, IT ACT
While interpreting the existing Indian Cyber Law i.e., IT Act 2000, IT Amended Act 2008 and the rules and regulations made there under, we can understand that any data entered on the block, is information or data in electronic form constituting an electronic record under the IT Act. Further going by the preamble or objective of the IT Act of providing legal recognition and validity to all electronic records or transactions carried out using electronic means, as also one can apply and interpret the above to blockchain transactions. This may look fine as we are discussing, however, the specific legislation on Blockchain has to step in giving the exponential growth of Blockchain adoption.
BLOCKCHAIN SERVICE PROVIDERS LIABILITY AND COMPLIANCE
It is not just creating blockchain by and large, blockchain technology is offered as a service by various blockchain service providers. However, maintenance and preservation of blockchain is also going to be an interesting aspect which the blockchain service providers need to be aware of. While affixing the liability on the blockchain service providers a lot of key legal aspects need to be considered for instance what and how much liability can be affixed on the blockchain service provider for any technical hitches affecting the working, operations of the blockchain, more specifically in case blockchain is offered as a service, then in case of the above will it be considered as a liability for deficient services? Apart from these what constitutes the liability will also have to be clearly spelt out from a legal perspective. The blockchain service provider may be considered as an intermediary as also a network service provider under section 2(1)(w) of the IT Act. It is pertinent to note that the liability of intermediary and network service providers culled out under the IT Act Rules and Regulations made there under will be applicable to the blockchain service providers.
While the specific compliance laid down under IT Act, rules and regulations made there under will have to be complied with by the blockchain service providers including exercising due diligence. However, one of the biggest challenges that needs to be specifically looked into shall be any order received from competent Judicial Authority to remove or disable any information in the block given the working architecture and practical implementation of blockchain as a technology.
Blockchain service providers shall have in place standard SLAs (Service Level Agreements) while providing Blockchain as a Service where in such services shall be provided on “as-is” basis with very limited or practically no warranty. Further what constitutes the minimum level of service standards which the blockchain service providers have to follow has to be specifically addressed from a legal perspective.
BLOCKCHAIN AND IP
Once the data is created or entered on the block, lot of information is generated thereof. Who owns the intellectual property generated on the blockchain, is it the creator or the service provider or the company? Further who owns the online data set made available on the blockchain? These IP related legal issues are opening new flood gates.
BLOCKCHAIN AND GENERAL DATA PROTECTION REGULATION (GDPR)
With GDPR providing specific rights to the data subject with regard to their personal data, it is interesting to see how these said rights can be enforced in the light of blockchain technology. I would like to specifically focus and highlight the implementation of right to be forgotten which is the data subject right and how the same can be enforced in blockchain technology given the intrinsic nature of block chain technology.
Further, implementing privacy by design and default as specified by GDPR in blockchain technology specifically will draw a lot of practical legal challenges given the architecture of blockchain technology. Blockchain as a paradigm never sleeps and blockchain as a phenomenon never forgets.
BLOCKCHAIN AND CYBER SECURITY
Given the immutable functionality of the blockchain, one can understand that there is a relatively secured environment in blockchain and its working and operations. However, with cyber criminals being opportunistic and weaponizing the atmosphere, they may devise topical methodologies of targeting the cyber security of the blockchain. I think as cyber security driving the economies all around, cyber security legislations have started to emerge as a new ground reality and specific cyber security legal compliance and roles, responsibilities, obligations have to be addressed in the area of blockchain.
BLOCKCHAIN AND JURISDICTION
While Blockchain is a distributed ledger operating with data is stored on various blocks to form a blockchain. In case of any blockchain dispute, what has to be looked into the physical location of the respective block in dispute in the blockchain. However, in case the block in dispute is forming a part of the blockchain which is on a computer, computer network, computer resource physically located in one particular jurisdiction, then the courts located in that particular jurisdiction may be able to adjudicate such issues.
Given the intrinsic nature of the internet adoption by blockchain, any person across the globe may be able to add blocks to the blockchain. This opens up a pandora’s box of jurisdictional issues with regard to blockchain and disputes arising thereof.
However, in case of blockchain as a service, the usage of blockchain may be governed by its legal policies like terms and conditions and the like. In such cases, the blockchain disputes arising thereof shall be governed by the jurisdiction outlined in the terms and conditions.
BLOCKCHAIN CONTRACTS – LEGAL ANALYSIS
The contracts may be executed through self-executing or automatic programs in the blockchain wherein the contract is embedded in the code itself subject to fulfilment of certain conditions or criteria specified thereof in such code. Such contracts using blockchain are generally termed as “Smart Contracts”. Given that blockchain technology generates Hash that is used as an identifier to authenticate Smart Contract, this brings in cyber legal challenges to the table.
While Smart Contracts are the contracts executed using blockchain make use of Hash authentication mechanism, the IT Act specifically stipulates that the authentication has to be done using electronic signatures obtained from a certified authority. This brings in cyber legal issues relating to enforcement of smart contracts. Once the Smart Contract is generated, how do we dispute it? Not just that the frustration of Smart Contract is also challenging.
BLOCKCHAINS AND Alternative Dispute Resolution (ADR)
While Smart Contracts leads the way, arbitrators follow. Building dispute resolution and arbitration into transactions and blockchain shall seem interesting. Crowd sourcing arbitration is spinning a new colour to the wheel of dispute resolution with platforms like Kleros- Blockchain Dispute Resolution Layer, Jury. Online decentralised dispute resolution platform using blockchain becoming the new ground reality. Further, bringing together Game Theory (incentive based decision making), Cryptography and blockchain will be the new cherry on the cake for ADR.
BLOCKCHAIN EVIDENTIARY VALUE
While Section 62 of the Indian Evidence Act, specifically as per explanation 2 which states that if number of copies of documents are created by mechanical process, every such document is a primary evidence.
While blockchain is a distributed ledger wherein all copies are created by a mechanical process in one go, considering the immutable and tamper proof nodes of Blockchain, the authencity and veracity of information stored therein is completely upheld.
Applying this proposition, Distributed Ledger can also be considered as a primary evidence.
However, Section 65 B may bring in a legal challenge since establishing the ownership of a Blockchain is challenging.
BLOCKCHAIN AND CRYPTO CURRENCY
Crypto currency is a digital currency that runs on Blockchain. While Blockchain is the main domain Crypto Currency is one of its applications. Imagine you are in a movie theatre and you enter the theatre and you exchange your cash for Crypto Coins. You may be able to use this Crypto Coins to purchase refreshments in the theatre, however outside the movie theatre these Crypto Coins have no legitimate purchasing power. Considering the above scenario, the movie theatre is a blockchain network providing an echo system for its viewers, allowing the Crypto Coins to come into play and transaction.
Given the kind of positive connotation offered by the blockchain technology, there is a need to have a dedicated blockchain legislation, to address and handle the specific legal, policy, reegulatory issues surrounding Blockchain. I believe that is the way to the future, and we cannot walk the walk without addressing the specific legal nuances brought forth by blockchain. Cyber Law, Cyber Security are going to act as key catalysts in the manifestation of blockchain legislation and blockchain jurisprudence. While Molta is the Blockchain island of the world, as also Estonia, Swiss, Belarus have already made their first step ahead to come up with Blockchain Laws. It will be interesting to see how the Law, Legislation and Jurisprudence will evolve in India and countries of the World as time passes by.
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Allahabad High Court Quashes POSCO Case: If Husband/Accused Is Convicted Then Victim/Wife’s Future Would Be Ruined
The Allahabad High Court recently in the case Rajiv Kumar v. State of U.P. And 2 Others observed and has recently quashed an FIR and criminal proceedings in a POCSO case registered against a man as it noted that the accused man and victim-wife (who was a minor at the time of the incident) married the accused/ applicant out of her own sweet will and is living a happy married life with him.
The bench comprising of Justice Manju Rani Chauhan observed that to punish punish the offenders for a crime, involved in the present case, is in the interest of society, but, at the same time, the husband is taking care of his wife and in case, the husband is sentenced and convicted for societal interest, then, the wife will be in great trouble and it would ruin their future. Thus, it is also in the interest of society to settle and resettle the family for their welfare, the bench quashed the rape-POCSO case against the accused.
Facts of the Case:
The Maternal Uncle of the Victim lodged an FIR against the accused under Sections 363, 366, and Section 376 of the Indian Penal Code, 1860and Section 3/4 of the POCSO Act, alleging that the accused had raped the victim (then a 17-year-old minor).
Further, the accused moved the instant Section 482 CrPC petition seeking to quash the instant FIR. Also, the victim appeared before the Court and had submitted that her maternal uncle had lodged the FIR in an attempt to ruin her married life.
It was further stated by her that she has entered into a compromise with the accused and has married him out of her free will, and consent, and without any external pressure, coercion, or threat of any kind. Before the court, it was also submitted that that out of their wedlock, they are blessed with a male child, who is presently four and half years old and as per her date of birth and at the time of marriage she was nearly 17 and half years old.
It was submitted by the Applicant-Accused that on account of the compromise entered into between the parties concerned, all disputes between them have come to an end, and therefore, further proceedings are liable to be quashed in the present case.
Observations Made By Court:
In the present case, the court noted that though the offence under the relevant sections 363, 366 and 376 of IPC and Sections 3/4 of POCSO Act are not compoundable under Section 320 Cr.P.C, however, adding to it, the court stated that the power of the High Court under Section 482 Cr.P.C is not inhibited by the provisions of Section 320 Cr.P.C and the criminal proceedings as well as the FIR can be quashed by exercising inherent powers under provision of Section 482 Cr.P.C, if warranted in given facts and circumstances of the case for ends of justice or to prevent abuse of the process of any Court, even including the cases which are not compoundable where parties have settled the matter between themselves.
The court while considering the facts and circumstances of the case, and also the submissions made by the counsel for the parties, the court came to the considered opinion that the victim herself, has stated before this Court that out of her own sweet will, she has married the applicant and is living a happy married life and out of their wedlock, the couple are blessed with a male child. However, no useful purpose shall be served by prolonging the proceedings of the criminal case as the parties have already settled their disputes.
Accordingly, the court quashed the charge sheet and the cognizance order as well as the entire proceedings of the Criminal Case were hereby quashed. Thus, the application was allowed.
SC likely to hear next month pleas related to Article 370
A Supreme Court constitution bench is expected to hear a slew of petitions related to Article 370 of the Constitution, which granted Jammu and Kashmir (J&K) semi-autonomous status before it was repealed in August 2019. Chief Justice of India (CJI) Uday Umesh Lalit said on Friday that the petitions will be heard after the Dussehra holiday.
When senior advocate Prashanth Sen asked the CJI to list the matter, Justice Lalit responded, “We will certainly list that…it will be listed after Dussehra break.” From October 3 to 10, the court will be closed for Dussehra.
The petitions were last heard in March 2020, when a five-judge panel declined to refer the case to a larger panel. The reference was requested because previous court decisions on the subject were in conflict with one another. This contention was rejected by the bench.
At the time, the bench was aware of an older batch of petitions pending in the Supreme Court challenging the constitutionality of Articles 370 and 35A, which granted J&K special status. It was stated that all issues concerning Article 370 should preferably be heard together.
National Conference legislators, former bureaucrats, and some organisations are among those who have objected to the repeal of Article 370. Some petitioners cited the Supreme Court’s 2018 decision, which stated that Article 370 had gained permanent status.
Many petitions have also been filed against the Jammu and Kashmir State Reorganization Act, which calls for the division of J&K into two Union Territories.
Despite opposition from the central government, which argued that Article 370 had international and cross-border implications, the Supreme Court issued notices on the petitions on August 28, 2019. The Centre also claimed that it is a highly sensitive issue, and that whatever happens in the country will be brought up at the United Nations. While issuing notices in 2019, the court referred the case to the five-judge constitution bench.
Supreme Court: Fixed Term Sentences Exceeding 14 Years Can Be Alternative To Death Sentence In Certain Cases
The Supreme Court in the case State of Haryana vs Anand Kindoo observed and stated that fixed term sentences exceeding 14 years can be awared in appropriate cases to strike a delicate balance between the victims’ petition for justice and rehabilitative justice for the convicts.
The bench comprising of Justice Sanjay Kishan Kaul, Justice Abhay S. Oka and the Justice Vikram Nath observed that this fixed term sentence can only be by the High Court or this Court and not by the trial Court.
In the present case, the trial court awarded death sentence to the accused who were ‘trusted employees’ of the deceased. However, Major General Kailash Chand Dhingra (K.C. Dhingra) and his wife Smt. Sangeeta Dhingra, who were an aged couple and were killed by the accused while they were sleeping. It was refused by the High Court to confirm the death sentence and imposed life sentence on them.
In an appeal before the Apex Court, the complainant and the state contended that given the brutality of the crime, the court should impose a fixed term sentence before which the convicts are not liable to be considered for granting of remission. Thus, it was submitted that there should be at least a fixed term sentence.
The court observed that it was a pre-planned murder for gain and greed by somebody who was in a position of trust with the family.
The bench observed that at an advanced stage in such health respect, there is always an element of trust and faith in the person by a person who employs them as well as the family members. However, the work takes other family members elsewhere and with the joint family system having broken down, the role of such trusted help becomes even more significant. Also, it is the significance of the society where a wrong signal goes if a trusted person breaches that trust to kill the person who had employed them in such a gruesome manner. It has been stated by the trial Court, the society itself demands justice, apart from an utter element on deterrence which is in any aspect of conviction. Further, the approach cannot be the vindictive but lack of appropriate sentence leaves the cry of justice of the society un-addressed apart from the fact that other persons who may have the propensity to carry out the crime feel that they will get away with the lighter sentence, if in case they are caught. While, battering two sleeping people beyond recognition who imposed trust in their employee certainly calls for something more than merely a life sentence under Section 302, IPC, even if death sentence is not to be imposed.
Therefore, the court imposed a fixed term sentence of 30 years.
The bench while allowing the appeal observed in the case Shankar Kishanrao khade vs. State of Mahrashtra (2013) 5 SCC 546, wherein it was held that if there is any circumstance favouring the accused such as lack of intention to commit the crime, young age of the accused, possibility of reformation etc., accused not being a menance to the society, no previous criminal record etc., the accused may avoid capital punishment. It was opined by the court that the crime is important but so is the criminal and hence the Supreme Court in recent past has substituted death penalty with fixed term sentences exceeding 14 years. It stated that imposing a fixed term sentence creates a possibility for the convict to re-integrate into society after serving his/her sentence. A delicate balance is strike the balance between victims’ plea for justice.
NCLAT Upholds Dismissal Of Section 7 Petition, Corporate Debtor Willing To Pay Full Amount, Opposed By Financial Creditor
The National Company Law Appellate Tribunal (“NCLAT”) in the case Reliance Commercial Finance Limited v Darode Jog Builder Private Limited, the Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Judicial Member, Justice M. Satyanarayana Murthy and the Technical Member, Mr. Barun Mitra observed while adjudicating an appeal filed in Reliance Commercial Finance Limited v Darode Jog Builder Pvt. Ltd., has upheld the Adjudicating Authority’s decision to not admit a petition under Section 7 of IBC, despite there being a default and a debt. It was recorded by the bench the Corporate Debtor an opportunity to pay/settle the full amount of default despite the Financial Creditor’s unwillingness to enter settlement.
Background Facts of the Case:
The Appellant/ Financial Creditor, Reliance Commercial Finance Limited had sanctioned Term-Loans of Rs. 19.5 Crores to the Corporate Debtor i.e., Darode Jog Builder Pvt. Ltd. on 29.07.2013. In 2017, the Loan Accounts were declared as the Non-Performing Assets. On 04.11.2019, a petition under Section 7 of Insolvency and Bankruptcy Code, 2016 (“IBC”) was filled by Financial Creditor, wherein seeking initiation of Corporate Insolvency Resolution Process (“CIRP”) over a default of Rs. 15,79,41,658/- against the Corporate Debtor.
It was observed that in an hearing held on 06.07.2022, the Corporate Debtor acknowledged its liability to pay and made an offer of Rs. 12.75 Crores, which is to be paid within 45 days. Thus, the Adjudicating Authority directed the Counsel for the Financial Creditor to obtain appropriate instructions. Thus, the court observed that if the Settlement did not take place, the Petition would automatically be admitted on the next date of hearing.
The court on the next date of hearing i.e. 11.07.2022, it was submitted by the Corporate Debtor that it is willing to deposit the entire amount of Rs. 15,79,41,658/- within 45 days. However, the Financial Creditor expressed its unwillingness for settling the matter. The Bank account details of the Financial Creditor were obtained by the Adjudicating Authority and alongside granted liberty to the latter to file for restoration of petition in case said amount is not deposited within 45 days. The court disposed of the appeal.
The Financial Creditor filed an appeal before the NCLAT, aggrieved by the order dated 11.07.2022.
Contentions Made By Appellant:
It was submitted by the Financial Creditor that the Adjudicating Authority committed error in disposing of the Petition, as it was not willing to settle the matter. However, the Adjudicating Authority could not have permitted the Corporate Debtor to deposit amount in Financial Creditor’s account.
Contentions Made By Respondent:
It was argued by the Corporate Debtor that Financial Creditor was unwilling to settle as earlier entire amount was not offered and settlement had not taken place despite several adjournments. Further, it was submitted that the Corporate Debtor has financial capacity to deposit the entire amount.
The Bench placed reliance on the Supreme Court judgment in the case Vidarbha Industries Power Limited Vs. Axis Bank Limited, Civil Appeal No. 4633 of 2021.
It was observed by the bench that as per the judgment, even after debt and default is there, Adjudicating Authority has to apply its mind to assess the feasibility of initiating CIRP.
It stated that when the Corporate Debtor has complied to deposit the entire defaulted amount of the Financial Creditor as permitted by the Adjudicating Authority and no purpose and occasion shall survive to still proceed with the Corporate Debtor Insolvency Resolution.
Accordingly, the bench observed that the proceedings under Section 7 are for resolution of insolvency. Adjudicating Authority had not erred in ascertaining whether the Corporate Debtor can comply to deposit the entire defaulted amount in bank account of Financial Creditor’s. Further, the court observed that the Financial Creditor’s interest was fully protected, since liberty was already given to revive the petition in case full amount was not received within 45 days.
The bench dismissed the appeal.
IBBI Amends Liquidation Process Regulations: COC To Function As Stakeholder’s Consultation Committee For First 60 Days
On 16.09.2022, the Insolvency and Bankruptcy Board of India (“IBBI”) has notified amendments for a second time to the IBBI (Voluntary Liquidation Process) Regulations, 2016 (“Voluntary Liquidation Regulations”) and IBBI (Liquidation Process) Regulations, 2016 (“Liquidation Regulations”).
Detailed Overview Of the Amendments:
the IBBI has introduced the following amendments to the Voluntary Liquidation Regulations and Liquidation Process regulations, in exercise of the powers conferred by Section 196(1)(t) read with Section 240 of the Insolvency and Bankruptcy Code, 2016.
For enabling better participation of stakeholders and streamline the liquidation process to reduce delays and realize better value, the following major modifications are made for the amendment in Liquidation Regulation.
The Committee of Creditors (CoC) constituted during Corporate Insolvency Resolution Process (CIRP) shall function as Stakeholders Consultation Committee (SCC) in the first 60 days and after the adjudication of claims and within 60 days of initiation of process, the SCC shall be reconstituted with respect to the admitted claims.
It has been mandated to the liquidator to conduct the meetings of SCC in a structured and time bound manner with better participation of stakeholders.
It has been enlarged the scope of mandatory consultation by liquidator with SCC and now SCC may even propose replacement of liquidator to the Adjudicating Authority (AA) and fix the fees of liquidator, if the same during CIRP is not fixed by the CoC.
The amount of claim collated during CIRP shall be verified by the liquidator, if any claim is not fixed during the liquidation process.
Whenever it is decided by the CoC that the process of compromise or arrangement may be explored during liquidation process, an application shall be filled by the liquidator only in such cases before Adjudicating Authority for considering the proposal of arrangement or compromise, if any, within thirty days of the order of liquidation.
For Auction process, specific event-based timelines have been stipulated.
SCC b Before filing of an application for dissolution or closure of the process shall advice the liquidator, the manner in which proceedings in respect of avoidance transactions or fraudulent or wrongful trading and shall be pursued after closure of liquidation proceedings.
Further, the Amendment Liquidation Regulations and Amendment Voluntary Liquidation Regulations lays down the manner and period of retention of records relating to liquidation and voluntary liquidation of a corporate debtor or corporate person, respectively.
Supreme Court: Setting Aside NCDRC Order Awarding Compensation To Women Who Gave Birth Despite Undergoing Tubectomy Surgery
The Supreme Court in the case Civil Hospital vs Manjit Singh observed and has set aside an NCDRC order that directed a hospital to pay compensation to a woman who delivered a child despite undergoing tubectomy procedure.
In the present case, a woman underwent tubectomy procedure twice, though both the procedures remained unsuccessful. In the year 2003, she gave birth to a male child. A complaint was filled by her before the District Consumer Disputes Redressal Forum alleging medical negligence on account of failed tubectomy surgery. Thus, the court dismissed the same on the ground that the hospital is not a consumer. The order was affirmed by the State Consumer Commission (SCDRC). Later, the revision petition was allowed by the National Consumer Commission and has directed to pay compensation as per the guidelines and the policy of the State.
Before the Apex Court, two contentions were raised by the hospital (1) that hospitals and Doctors who render service without any charge to every person availing of the service would not fall within the ambit of ‘service’ under Section 2(1)(o) of the Act relying on the case Indian Medical Association Vs. V.P. Shantha And Ors., (1995) 6 SCC 651 that the failed tubectomy surgery is not a case of medical negligence as the sterilized woman can become pregnant due to natural causes. [relying on the case State of Punjab Vs. Shiv Ram and Ors., 2005, 7 SCC 1].
The bench while taking notice of the law laid down in the decisions relied on by the appellants, allowed the appeal by setting aside the NCDRC order. However, if the respondent has been paid any amount in terms of the Order of the NCDRC, the same shall not be recovered by the State, the bench said.
It was observed in In V.P. Shantha that the Hospitals and Doctors who render service without any charge whatsoever to every person availing of the service would not fall within the ambit of ‘service’ under Section 2(1)(o) of the Act. Thus, the payment of a token amount for registration purposes only would not alter the position in respect of such doctors and hospitals.
The Apex Court regarding failed tubectomy surgery in Shiv Ram (supra), had observed that the cause of action in claiming compensation in cases of failed sterilization operation arises on account of negligence of the surgeon and not on the account of child birth. Further, the failure due to natural causes would not provide any ground for claim and it is the women who has conceived the child to go or not to go for medical termination of pregnancy. Thus, having gathered the knowledge of conception in spite of having undergone sterilization operation, if the couple opts for bearing the child, it ceases to be an unwanted child and the compensation for maintenance and upbringing of such a child cannot be claimed.
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