While it’s neither easy nor advisable to second guess Prime Minister Narendra Modi, it would be interesting to pen down some of the key points that he could be raising during his Independence Day address to the nation on 15 August this year. Interesting because the build-up seems to have begun.
For starters he will of course have to make some reference to the Covid pandemic and India’s reaction to it. This, strangely enough, is a topic he has not been very forthcoming about. During the initial stages of the lockdown we did get a couple of his televised addresses but these soon petered out (about six in all). There has been criticism that we locked down too soon, that the government was caught off-guard by the migrants’ exodus, that our bailout packages were neither adequate nor correctly tailored to address the crisis at hand. Will the PM take these criticisms head on, or will he brush these off as “Opposition propaganda”?
Will he use the fact that he implemented the world’s largest lockdown as a stand-alone achievement and let everything else pass off as collateral damage? After all, “Largest” and “Biggest” are words that fit neatly into the 56-inch chest-beating narrative. And to be fair, during the initial stages of the lockdown there were those (business leaders included) who praised him for having the nerve to shut down a country so huge, commenting that no other leader in India had the political capital to pull this one off. Certainly PM Modi had the political capital, but has he squandered a chunk of it in the implementation? Pragmatism says yes but politics says no, especially when the Opposition hasn’t done much to commend itself in the meantime.
And, yes of course, the much publicised Ram temple bhoomi pujan will be marked as an achievement. The event provides just the right setting for the “Hindu Hriday Samraat” in the backdrop of the coming Bihar and UP elections. The date of the bhoomi pujan clashes with the first anniversary of the revocation of Articles 370 & 35A in the Valley; both are a subtext of the same narrative. One Nation, One Constitution was a key mention of his speech last year.
However, one arena that will be of particular interest would be foreign policy. Lockdown began soon after US President Donald Trump’s visit to India. Foreign policy experts are since divided about the success of the visit especially since it didn’t yield any tangible benefits for India. This is election year in the US, so will the PM harp about his (now not-so) special relationship with Trump, or will he bide his time and see which way the geopolitical wind blows. But a bigger concern than Trump is our immediate neighbourhood, primarily the standoff with China. Again we haven’t heard the PM go as high voltage on this as he does about Pakistan. Will he shift the focus to Pakistan again, or will he hear his thoughts on China’s betrayal? Our equation with Nepal too is at an alltime low and that is worrying because while it’s a smaller country than both China and Pakistan, it is a part of our HUF, the larger Hindu Undivided Family.
Lastly, being Modi, he is known to take a grand event and use the platform to focus on something very basic. Such as the Swachh Bharat Mission and Jan Dhan Yojana (2014), to the Jan Arogya Abhiyan, national healthcare scheme to impact 50 crore Indians in 2018, to the Jan Jeevan Mission focusing on making drinking water available to all households (2019 speech). To be sure he’d have another scheme tagged and identified for 2020. He has already announced the Pradhan Mantri Garib Kalyan Anna Yojana to give 80 crore people free food grains till November. Given that the economy is still to pick up, I think we can safely expect more outreaches on these lines.
Two decades of the Information Technology Act, 2000: Way forward
Phishing is a procedure to secure sensitive data, for example, usernames, passwords, and credit card
details, by taking on the appearance of a dependable element in electronic correspondence. Phishing is
ordinarily done by email and frequently guides clients to enter individual and financial details at a site.
Copyright and trademark infringement do happen on the Internet, yet the Copyright Act, 1957, or Trade Mark Act, 1999 which explicitly manages infringements, is quiet on the issue. In this way we have no implementation apparatus to guarantee the protection of domain names on the Internet. Transmission of e-money and exchanges online are not given protection under the Negotiable Instrument Act, 1881. Online security isn’t ensured; Section 43 (penalty for damage to computer or computer systems) and Section 72 (Breach of confidentiality or privacy) discuss it in some degree, yet don’t address the ruin caused by online infringements.
With the advent of newer technology and advancement in the mode of communications, the internet has become an essential part of our lives. The benefits of cyber technology are immense and many facets of modern life are completely dependent upon it; however, at the same time, in the wrong hands it can be more dangerous than a nuclear weapon. Crimes are no longer confined only to the physical space but have also entered the digital, as cybercrime. Cybercrime or computer-oriented crime, is one that involves a computer and a network. All the rapid advancements of internet and related crimes were needed to be regulated and therefore accordingly a new branch of jurisprudence emerged to tackle the problems of cybercrimes in cyber space i.e. Cyber Law or Cyber Space Law or Information Technology Law or the Internet Law.
The United Nations Commission on International Trade Law (UNCITRAL) adopted the Model Law on Electronic Commerce in 1996 and for the first time extended its efforts towards bringing uniformity in the laws of different countries. The General Assembly of the United Nations by Resolution No. 51/162 dated 30th January 1997 recommended that all States should give favourable consideration to this Model Law when they enact or revise their laws. The Model Law provides for equal legal treatment of users of electronic communication and paper based communication. The Information Technology Act, 2000 [hereinafter referred to as, “IT Act”] is also in consonance with the Model Law.
The IT Act, 2000 was passed by parliament on 15th May 2000, approved by the then President, on 9th June 2000 and enforced on 17 October 2000. It amended the following four Acts in the Indian legislation with its introduction: The Indian Penal Code, 1860; The Indian Evidence Act, 1872; The Bankers’ Book Evidence Act, 1891; and The Reserve Bank of India Act, 1934.
It is not only applicable to offences within India but also to offences and contraventions outside India (section 1(2)) and section 75 of the IT Act). Later on, the IT (Amendment) Bill, 2006 was introduced and passed in the Lok Sabha and amended the IT Act, 2000 by the Information Technology (Amendment) Act, 2008.
What were the objectives?
The then Minister of Parliamentary Affairs and Minister of Information Technology, Shri Pramod Mahajan, during the discussion on the Information Technology Bill, 1999 talked about the absence of a suitable law in India to deal with tampering of computer source documents, publishing information which is obscene in nature and issues relating to damage to computers and computer networks through a system of appropriate penalties and punishment. In furtherance of the same and making the law in tune with the Model law on e-commerce adopted by the UNCITRAL, the IT Act, 2000 came to life.
It is the enactment of the IT Act that provided legal recognition to transactions carried out by the means of electronic communication and has not only facilitated the electronic filing of documents and/or applications with the government but has also assisted and encouraged the use and acceptance of electronic records and digital signatures in government offices, making interactions between the government and civilians smooth and quick.
The government set up an expert committee to review the IT Act in January 2005. The committee comprised of representatives from the government, IT industry, legal experts etc. It found substantial lacunae in the existing Act and submitted its report in August 2005. It was noted that a lot of changes were required to the existing IT Act, 2000 because of the developments internationally and nationally especially in the area of the data protection and privacy. They observed that the field of cyber laws is a nascent area and experience of its formulation and implementation is still evolving worldwide and more so in India.
After due consideration and deliberation, the committee recommended that the IT Act should be technology neutral. It revisited the provisions related to data protection and privacy and proposed stringent provisions for handling sensitive personal data. The committee addressed the issue of liability of intermediaries and suggested amendments using the European Union Directive on E-Commerce as the guiding principle. It suggested severe punishments to prevent child pornography and also made recommendations on computer related crime and electronic evidence.
Later, the Information Technology (Amendment) Bill 2006 was introduced in Lok Sabha on 15th December in the year 2006. It was then referred to the standing committee on 19thDecember 2006. Further a report was submitted by the standing committee on 7th September 2007. The amendment Act was passed in the Lok Sabha on 22nd December 2008 and consequently in the Rajya Sabha on 23rd December 2008. The final assent was given by the President on 5th February 2009.
Highlights of the Information Technology (Amendment) Bill, 2018
Section 67BA is inserted by the Bill stating that whoever publishes or transmits or causes to be published or transmitted in the electronic form, any material which is repugnant to well established cultural ethos, that person shall be punished on first conviction with imprisonment of either description for a term which may extend to six months and with fine which may extend to two lakhs INR.
Also, with respect to online gaming specifically, sections 67BB and 79B are inserted. Section 67BB states that whoever hosts any online game, which induces the users to commit any dangerous act which is harmful or any act that may cause injury or an illegal act, shall be punished with a maximum punishment of one year and fine which may extend to two lakhs and in the event of second or subsequent conviction, with imprisonment of either description for a term which may extend to three years and also with fine which may extend to five lakh rupees. Games such as the ‘Blue Whale Challenge’ have been said to inflict injury on a number of individuals, also in some cases, resulting in suicidal acts. This game in particular has gained a huge fan base in India among children leaving to a number of deaths and cases of depression amongst children.
Section 79B states whoever hosts an online gaming resource or produces any storage media containing a gaming resource to be sold offline, shall ensure that the game resource is categorised for use by appropriate age group on the basis of game contents; and there is a suitable mechanism within the game resource to warn the users against repeating the dangerous acts, if any, shown in the game in their real lives.
The IT Act has been quite useful in setting up the guidelines to settle the disputes pertaining to the internet/digital domain but specialists have also opined that the Act is a toothless legislation and has not been totally compelling in issuing punishments to the culprits. There are surely territories of digital laws which needs consideration. Some of the areas which could be worked upon includes:
Spam might be characterized as unsolicited bulk e-mail. At first, it was seen as a negligible irritation however at this point it is presenting major economic issues. Without sufficient specialized technical protection, stringent legislation is required to manage the issue of spam. The Information Technology Act does not talk about the issue of spamming. The USA and the European Union have authorized anti-spam legislation. Australia has exceptionally stringent spam laws (Spam Act, 2003) under which spammers might be fined 440 dollars per contravention for an individual with a maximum penalty of 22,000 dollars for a single day. Phishing
Phishing is the procedure of endeavouring to secure sensitive data, for example, usernames, passwords, and credit card details, by taking on the appearance of a dependable element in electronic correspondence. Phishing is ordinarily done by email and frequently guides clients to enter individual and financial details at a site.
There is no law against phishing under the Information Technology Act. Though the Indian Penal Code discusses duping, it isn’t adequate to check phishing. Recently, a phishing assault was seen on the clients of State Bank of India wherein a clone of the SBI site was utilized. What is more regrettable is that even SBI has not alerted its clients. So there is need of an enactment that prevents phishing in India.
Information Protection in Internet Banking
Users are assured by banks that their information will be kept confidential, however, the web banking system includes banks and their clients; but may also involve various outsiders as well. It is outdated for banks to hold data inside their very own computer systems. India currently has no laws on information insurance and therefore the risks associated with altering of personal information is pretty high.
The Information Technology Act discusses access; however, it does not discuss keeping up the integrity of client exchanges. The legislation does not set out any obligation upon banks to secure the details of clients and customers. U.K had an Information Protection Law enacted in 1998 which is repealed by the enactment of the General Data Protection Regulation (GDPR) under which banks or any individual holding sensitive data might be held liable for damages in the event of it neglecting to keep up satisfactory security protection in regard of information. In India, a bank’s obligation would be out of agreement as there is no resolution on the point. Cyber War
The issue of cyber war has not been talked about in the Act. India, as of late, has confronted various digital assaults from programmers outside of India who penetrated through the Indian firewalls. In the 26/11 attacks of Mumbai, various characterized information was given as intel to the culprits from other countries planning attacks against India. There are no arrangements in the Act to make such culprits liable for their activities.
Almost all cyber-crimes, barring a couple, are bailable offences under the IT (Amendment) Act, 2008. The quantum of civil liability is sought to be enhanced in the Act, while the quantum of punishment is reduced due to which convictions in cybercrime is very low.
Intellectual Property Infringement
The most widespread digital “abuse” that an individual makes these days is downloading motion pictures through distributed sharing systems. This is a widespread infringement of copyright laws; however, the numbers of culprits are so large that a successful measure cannot be taken to check it. So, to check the developing threat of digital violations, government through measures frequently deny access to sites. This has been contended to be a draconian measure and a violation of the right to speak freely and articulation under Article 19(1)(a).
Copyright and trade mark infringement do happen on the internet, yet the Copyright Act, 1957, or Trade Mark Act, 1999 which explicitly manages infringements, is quiet on the issue. In this way we have no implementation apparatus to guarantee the protection of domain names on the internet.
Transmission of e-money and exchanges online are not given protection under the Negotiable Instrument Act, 1881. Online security isn’t ensured just Section 43 (penalty for damage to computer or computer systems) and Section 72 (Breach of confidentiality or privacy) discusses it in some degree yet doesn’t address the ruin caused by infringements caused over the internet. Indeed, even the Internet Service Providers (ISP) who transmit some outsider data without human mediation isn’t made liable under the Information Technology Act, 2000. One can undoubtedly take cover under the exclusion condition on the off chance that the ISP demonstrates that it was submitted without his knowledge or that he practiced due perseverance to counteract the offense.
With the internet saturation on a rise in India, the evil of online piracy is growing at an alarming rate, and to fight with the problem of piracy, the Government of India was compelled to issue the Information Technology (Intermediaries Guidelines) Rules, 2011 which mandate an intermediary to observe due diligence while discharging its duties and not knowingly host or publish any information which infringes the Intellectual Property Rights of anyone. But the guidelines would not stop the piracy because of the vastness of the domain. Most of such records are made available on different websites, on or before the date of release. When a record is uploaded on the internet, it opens the floodgates for the masses to download it, thereby, causing heavy losses to the creators. The most difficult thing in the current piracy world is that the person who uploads such records on the internet is unknown to the world. Therefore, preventive action in the nature of ‘John Doe orders’ or Ashok Kumar orders has become significant globally to prevent intellectual property right infringements.
Suggestions and the Way Forward
When I look at the IT Act today, I strongly feel for the modernization of existing laws and enactment of new ones. Maybe it is time we need specific laws on Social Media, Fake news, and eCommerce. Often, we witness the application of two different legislations such as the IT Act and the IPC in a particular scenario. The decision of the Hon’ble Supreme Court in Sharat Babu Digumarti v. NCT of Delhi was followed by the Bombay High Court in Gagan Harsh Sharma v. The State of Maharashtra, holding that when an offence is sufficiently covered under the provisions of the Information Technology Act, 2000, the IT Act will apply as lex specialis to the exclusion of the Indian Penal Code, 1860. The IT Act, a later special law contained overriding provisions over IPC, a general law. Majority of the offences under the IT Act are bailable and compoundable and may also lead to amicable settlement between the parties, wherein, the offence under IPC may not be bailable and can attract higher punishment. Hence, if the complainant is willing to prosecute the offender under sections of IPC, it may deprive the offender from getting bail and from the case being settled, which the IT Act permits. Along with the IPC, the IT Act also at times collides with the Copyrights Act, 1957, the Companies Act, 2013 and the Contract Act, 1872. A settled principle on this point will make the implementation of the IT Act smooth.
Moving on, the reporting of cyber-crimes should be encouraged in order to devise proper mechanisms for its redressal. According to the data analysis of cybercrime, only 50 out of 500 crimes get reported. Here, I would also like to draw the readers’ attention towards the National Cyber-Crime Reporting Portal launched by the Ministry of Home Affairs, Government of India. This portal which can be accessed on https:// cybercrime.gov.in facilitates the victims/complainants to report the cybercrime complaints online and also has a special focus on cybercrimes against women and children.
We are surely in need for a universal regulatory framework mechanism which helps in the restructuring of the substantive as well as the procedural laws relating to computer generated crimes. The problems arising due to divergence of laws and procedure of different nations may be eliminated to a considerable extent if at least major cyber-crimes are uniformly recognized and incorporated by all the countries in their penal laws.
The internet being a borderless medium has often posed jurisdictional challenges in handling of crimes especially cyber defamation. Attention should be drawn towards the multiple publication rule which means that in relation to an online material, each ‘hit’ on the website creates a new publication, potentially giving rise to a separate cause of action if it contains defamatory material. Jurisdiction in such cases may be prescribed by the principles laid down in International Law or applying the Principle of International Comity so that if there is no particular law in the country, the court can resort to the principles already established in other legal systems of the world.
The use of strong encryption technology especially in government commercial organizations that are mostly dependant on massive computerization for the transmission of transactions or sensitive information, will enable them to keep their data safe from leakage or disclosure to public or hackers.
The data landscape of India is bound to witness a sea change with the enactment of the Personal Data Protection Bill but at present the IT Act and the rules made thereunder have not even defined the term ‘encryption’. Strange, isn’t it?
The Information Technology Act, 2000 puts forward reasonable provisions for studying and examining the law and strategizing the field of cyber-crime legislations; however, the legislation falls short of strict implementation of its provisions. This suggests that no penal legislation should be left open for expansive translations, particularly concerning the digital age because the internet provides us with certain freedoms in real life which might make transgressing any law easier for us. Hence, any administrative instrument or authoritative measure must try to be exhaustive, clear and interpreted restrictively. I am keenly looking forward to a wellequipped law which caters to the age of digitization and emerging technologies such as blockchains, artificial intelligence, and cryptos.
Stay Alert and Stay SafeYou’re on the Internet!
‘Honour killing’ offenders must be tried as violators of fundamental rights
“We don’t live in a world in which there exists a single definition of honour anymore, and it’s a fool that hangs on to the traditional standards and hopes that the world will come around him.” – Joseph J. Ellis
To begin with, the fabric which binds and protects the integrity of this nation as a whole has been tested time and again and one being on the abrupt practice of ‘Honour Killings’. The terms «honour killings» and «honorable crimes» have been used interchangeably to describe the incidents involving the brutality and badgering caused primarily to young couples who intend to marry someone of their own choice including those who dare to ceasefire the boundaries of “whom to love” set by their family members. Murders like these which are the acts of retribution, usually death, performed generally by the patriarch›s mind as a response to protect and maintain the dignity and pride of the family. The element which gives rise to such abrupt and feudal practices are the perception or apprehension of bringing dishonor to the society/family by one of their own family members. These barbaric practices have now taken a front pew in our society, resulting in the suppression of inalienable rights, enshrined under Article 21 of the Constitution of India.
Democracy in Quarantine
The COVID- 19 pandemic needs no introduction and description now. In India, amid lockdown, an unprecedented event of honour killing was reported from the southern part of India where, M. Sudhakar, 24, was killed by his wife’s father for marrying outside of his caste. Cases surrounding feudal practices in the name of gender, caste, and religion; have demolished the hailed findings and verdicts of the Supreme Court on what we call as the basic feature of the Constitution of India ‘The Rule of Law’. Supreme Court recently delivered another notable judgment wherein the court said that the law will not come to guard any person who in the name ‘honour’ takes a life of another person.
Another, odd practice which has locked the still has a pew especially in rural sectors of the country is the informal system of ‘Khap Panchayats’; wherein the society and especially the men who consider themselves as the protectors of their culture and family issue severe orders or ‘dikats’ to restrict and remind the realm of love. In the case of Shakti Vahani the apex court of the country categorically laid down stringent guidelines, thereby ensuring protection to young couples against the feudal orders of the Khap panchayats. It further ensured an immediate registration of FIR against such orders andx extended to provide safety, if needed. The ghost which has confined the system of democracy into the four walls is the hinge of traditions vs modernity.
Pandemic of Caste
The impact of the caste system has been wide and varied across the country. It has burnt a family of Dalits including kids alive. It has beheaded a person who had ‘dared to contest’ in local body elections. Dalit women continue to be sexually harassed across the country. The list is endless. Honour killings perhaps have the most dreadful impact upon the caste systems in the country today. The Supreme Court judgment of 2006 delivered a notable finding on ‘Honour Killing’ and it stated that «There is nothing honorable in such killings, and in fact, they are nothing but barbaric and shameful acts of murder committed by brutal, feudal minded persons who deserve harsh punishment», but, it failed to incentivize the government to bring a new code on ‘honour killing’ thereby criminalizing such barbaric, feudal practices at large. Murder in its very name is a heinous crime. Murder in name of caste inevitably murders the principles of Dr. B.R. Ambedkar, who once remarked that if the practice of building and taking shelters in the temples of caste would continue then it will only deteriorate the integrity of this country. But in my notion, the Indian Laws have miserably failed to distinguish between a murder and a caste murder. Honour killings, thus, has proved to be at the top of the list of spate crimes across the country.
In the culture of patriarchal control and notions of feudal minds, where women are not free to fall in love with a man of their choice, particularly from different religion or caste, these egregious violations of inalienable rights need to be addressed with utmost caution which will not only provide rigorous punishment to those who consider ‘Honour’ in abysmal killings, but will also break the hornet’s- nest of queer notions. In the year 2018, the Apex court of the country refused to take note of brutal murder of a 23-year-old Delhi based photographer by the family members of his girlfriend. Another incident which imbalanced the bedrock of the Rule of Law was the reported murder of Shankar, a Dalit man from Coimbatore who daringly fell in love with Kawsalya, an upper-caste Hindu which resulted in an escalation of caste-based violence where a group of men hacked Shankar to death for daring to marry an uppercaste woman without the permission of her family. In 2018, the data available with the National Crime Records Bureau (NCRB) reported that 10,773 people eloped due to the familial denial upon marrying someone of their own choice, suggesting only the number of people who are at risk over distinction in their caste, class, or religion. These distressing instances of killings and feudal practices are only a few out of plethora that has taken place across our country.
In light of these blatant instances, one question that inevitably strikes down is, whether the government is shunning the desperate need of a stringent code on “honour killing” or is it the question of Who, as to who will take traditional values within the realm of judicial setup.
A RoadMap for Curbing Menace
Even if the local governments decide to step on the pedestal by introducing a separate regime on ‘Honour Killing’, it would require it to be enforced effectively. Police cooperation, in India, is yet another glaring issue, instances of outright refusal to register the complaint or perhaps officials harassing the complainant resulting in either withdrawing or not registering the complaint.
The foremost facet of honour killing which needs utmost consideration is the tracking of honour killing cases across the country. The killings which take place in the name of ‘honour’ are frequently reported by the family members as suicide, the relatives and family members destroy every shred of evidence by immediate cremation of the victim. In 2019, a similar incident of murder of a minor girl by her family members was reported. To control the exponential growth of such practices, one must start with the root cause. ‘Police’ and ‘Public Order’ being the subject matter of the State list, empowers them to make policies or laws on the same, as the case of the State of Rajasthan, in 2019 the Rajasthan Assembly introduced a bill mandating the death penalty for the crimes and practice of ‘Honour Killing’. Such dedicated regimes if gets introduced at the centric level, would not only bolster up the safety of young couples who wish to marry the person of their own choice but would also let us all know the depth of the cavity caused by the distinction in religion and caste.
The Tool of Amendments
To construct robust and stringent law on the subject of honour killing, amendments majorly in the areas of Indian Penal Code, 1862, Hindu Marriage Act, 1955, and Evidence Act, 1872 can help in achieving the same. To mention a few, amendment in the definition of Murder under Section 300 of the IPC, must be done with an inclusion of the term ‘Honour Killing’; doing the same would generate more clarity on classification of honour killing cases thereby it would be easy for the justices to punish the victim pursuant to the succinct definition of honour killing. Apart from this, an amendment must also be made under Section 34 of the IPC to the extent of inclusion of the system of ‘Joint Liability’ in the cases of arising out of barbaric orders (dikats) of ‘Khap panchayat’ in order to accord stringent punishments to those to issue dikats along with those who are involved in the execution of such brutal orders.
Along with these amendments, the offenders of ‘honour killing’ must also be tried as the violators of the fundamental rights facilitated by the Constitution of India to all its citizens. Therefore, the cases of honour killing must be put under constitutional scrutiny in order to ensure the facilitation of inalienable rights especially to every woman who suffers from the patriarch notions of living life and as aptly elucidated by an American poet “There are miles to go before we sleep, miles to go before we sleep”; and hence the only vaccine for this pandemic of caste would be a separate regime on honour killing.
Shell companies: Illegality in functioning & regulatory framework
The Guwahati High Court in the case of Assam Company India Ltd and Ors v. Union of India explained the working of shell companies by stating that a ‘shell company is artificially identified
with suspicious activities which include serious offences like tax evasion’.
Shell Companies and their features Shell Company has neither been defined under Companies Act 2013, Income Tax Act 1961 nor under any of the Indian Legislations. The Organization for Economic Cooperation and Development (OECD) defines shell companies as “A shell company is a company that is formally registered, incorporated, or otherwise legally organised in an economy but which does not conduct any operations in that economy other than in a pass-through capacity. Shells tend to be conduits or holding companies and are generally included in the description of Special Purpose Entities”. These companies are usually established with the motive to save the illegal money earned from the eyes of law. The money is transferred to the shell companies which have no physical existence, business transactions, etc. Through these companies, people try to commit offences like tax evasion, money laundering, use of money received from unknown sources. Recent cases and scams have helped the Indian judiciary to determine some basic features of Shell Company. The features identifying a company to be a shell company are –
The product or services provided are totally different from the company’s main business. Companies having no physical existence at the mentioned address or several companies having the same address. Companies having very less or no assets. The company established for illegal cross-border transactions and transfer of a huge amount of money. Payments of the large amount made to shell companies without any reasonable and legal business.
Through the above mentioned features of a shell company, it can be concluded that the simple motive behind the establishment of these companies is to commit economic offences through the laundering of illegal money earned by the large businessmen with the help of powerful people. These shell companies get registered by fulfilling all the legal formalities required for registration of a company. Due to the lack of check and balance system, and proper legislation on these companies, people go on committing such offences very easily. These offences lead to black marketing to a greater extent affecting the economic condition and trust of people over financial institutions very badly.
The Legality of Shell Companies
The Guwahati High Court in case of Assam Company India Ltd. and Ors v. Union of India explained the working of shell companies by stating that “A shell company is artificially identified with suspicious activities which include serious offences like tax evasion, Benami transactions, and conversion of black money to white, money laundering along with other associated offences”. A shell company is not always made for illegal purposes. Incorporating shell companies is completely legal while carrying out general business activities, such as a subsidiary to facilitate business takeovers along with estate acquisitions1, or to protect assets from lawsuits, to hide dealings with another company or to avoid target of criminals, or to gain access to foreign markets.
Recent Scams based on Shell Companies
Many wealthy individuals in India are using a large number of shell companies for illegal dealings and evasion of tax, etc. Some of the recent cases which had involvement of shell companies in India are: Yes Bank Scam: The founder of Yes Bank Mr. Rana Kapoor, along with his family floated more than 100 shell companies as per the information by Central Bureau of Investigation and Enforcement Directorate for misappropriation of funds and financial manoeuvres. These companies were used to cover the illegal money earned and were named after relatives of Mr. Rana. Due to lack of regulations over shell companies, Mr. Rana was able to set up more than 100 companies to commit an economic offence to a larger extent becoming a scam.
In Punjab National Bank Scam (2018), the Enforcement Directorate found that Nirav Modi, with the help of 17 shell companies based out of India, laundered an amount of Rs. 5,921 Crores in the Year 2017. Nirav Modi’s uncle Mehul Choksi, who was a fellow fugitive billionaire diamond merchant, ran a larger number of shell companies. While ED shortlisted 140 shells companies, SFIO was probing at least 400 companies. Both of them turned fugitive after deceiving the PNB of Rs 14,000 crore by procuring Letters of Undertakings (LoUs) fraudulently.
In the INX media Case, Former Minister P.Chidambaram was involved in granting Illegal foreign investment (FIPB) clearances to receive kickbacks. These kickbacks were paid through shell companies operated by his son Karti Chidambaram. The investigation department identified that there were several shell companies registered in India and abroad which had an investment of more than Rs. 300 Crore. His son also received payments of huge amount from a company located outside India which was figured in Panama Paper as well.
Impact of Shell Companies on the Economy
Shell companies help to launder money, illicit fund flows and tax evasions which harm the economy.
The shell companies are assumed to have a serious risk to the investors. Due to the lack of proper definition of shell companies, it’s difficult for the investors to identify a legal and a shell company made for illegal purposes. The network of shell companies puts in jeopardy the interest of investors and shareholders. It also adds fuel to black money menace.
Therefore, shell companies are hard to trace as they disguise their ownership to escape regulatory monitoring.
Laws to prevent illegal activities of Shell Companies
To tackle with the illegal activities of Shell Companies, there are few major statutes such as The Companies Act, 2013; Benami Transactions Prohibition (Amendment) Act, 2016; Prevention of Money Laundering Act 2002; Indian Penal Code, 1860; The Income Tax Act, 1961; Securities and Exchange Board of India Act, 1992; Black Money and Imposition of Tax Act, 2015.
All these laws have helped to find out the culprits behind the big scams all over the country. A few of them have been discussed above. For example, Nirav Modi was charged with an offence under PMLA in PNB Bank Scam; Rana Kapoor in Yes Bank Scam was booked for misappropriation of funds and financial manoeuvres.
In Satyam Scam, the country’s biggest accounting scandal, the company misrepresented its accounts to its investors, stakeholders, stock exchanges, regulators and its board members as well; and thus was booked under the aforesaid laws. P. Chidambaram was charged by CBI with offences of forgery, corruption and cheating under IPC in INX Media case, and moreover, the effectiveness of these laws can be seen from the fact that in Panama Papers leak case exposed 2,14,488 shell companies for numerous companies around the globe.
In February 2017 a Task Force was set up by the Prime Minister’s Office under the chairmanship of Ministry of Corporate Affairs and Revenue Secretary to establish a systematic way to identify such companies indulging in illegal activities (here referred as shell companies).
This Task Force had found more than 2 lakh such companies whose names it had struck off the Registrar of Companies (RoC) under Section 248 of Companies Act, 2013.
A proper definition of Shell Company is required to create a clean economy and to make such offenders come out of their shell before they start harming the economy to a greater extent. For example, we can look into the definition of shell companies as per The US Securities Act Rule 405 and Exchange Rule 12b2 which defines shell company as ‘A company with no or nominal operations; and either, no or nominal assets consisting of cash and cash equivalents, or, assets consisting of any amount of cash and cash equivalents and nominal other assets’.
The Shell companies not only put investor’s interest in jeopardy but also give a boost to the business of black money. The government should plan at increasing vigilance over such companies with the help of data analytics. New rules and regulations should be made to protect the interest of investors. SEBI should keep an eye on wealthy organisations. The doubtful companies should be asked to submit a timely report of financial details mentioning about their subsidiaries and huge bank transactions compulsorily. The setting of a proper regulatory system, timely check, eye on corrupt practices will lead to a decrease in the amount of the frauds and use of shell companies for illegal purposes. The new regulations and enactments should be made in such a way that it doesn’t harm or affects the perfectly running legal business entities.
AMIT SHAH’S STAMP CLEAR IN NADDA’S NEW TEAM
Finally, BJP chief J.P. Nadda has reshuffled his team at the party headquarters after taking office in January this year. For the most part he was stuck with Amit Shah’s old team, though a few name-plates have been changed. He hasv retained three general secretaries including the low-profile Bhupender Yadav who will have much lesser time to spend with his books given the rise in his political graph. The erudite Yadav is known to be Amit Shah’s key pointsman in the party and he is the one trusted with all the crucial tasks; sometimes his in tray is even more full than that of the BJP chief himself. Anil Baluni who retains his post as the media chief and Amit Malviya as the IT Cell in-charge are also key players in the Amit Shah scheme of things. And despite this being a Nadda reshuffle, the Amit Shah scheme very much matters.
Poll-going states have also been taken into account and so Mukul Roy, Anupam Roy and Raju Biswa from West Bengal get a place, as do Tom Vaddakan and A.P. Abdullakutty from Kerala. The articulate Guruprakash from Bihar has also been made spokesperson. Turncoats have also been rewarded, sending mixed signals down the line to the party faithful. As many as 5 of the 12 newly appointed BJP vice presidents are exports from other parties: A.P. Abdullakutty, who has travelled to the BJP via the CPM and the Congress; Mukul Roy, former Trinamool Congress leader; Annapurna Devi, former Rashtriya Janata Dal (RJD) MLA from Jharkhand; D.K. Aruna, former Congress minister from Telangana; and Baijayant ‘Jay’ Panda, former Biju Janata Dal leader.
A word about the role of the vice presidents. It’s a ceremonial office and real power vests with the general secretaries. But being ceremonial it is this lot that gets to share the dais whenever there is an important party function, and this includes events to which the PM is also invited. Even if they are not seated on the dais throughout the function, they are invited aboard during the lamp lighting or whatever ceremony that kicks off the events. Hence the five newly-minted party VPs will be flaunted before the party workers who have spent a much longer stint in the party.
Another key question that emerges is the role of the RSS in the party set up. Two general secretaries, Ram Madhav and P. Murlidhar Rao who were dropped, are closely linked to the RSS. This has sparked off speculation that they could either be included in the parliamentary board or the Union Cabinet. The parliamentary board is yet to be reconstituted specially after the demise of Ananth Kumar, Arun Jaitley and Sushma Swaraj. A fourth vacancy was created when M. Venkaiah Naidu was made Vice President. The PM is also expected to reshuffle his Cabinet though some say that this will happen only after the Bihar polls. It would be interesting to see whether PM Modi and Shah accommodate Ram Madhav and Murlidhar Rao in the Cabinet, as is the speculation. BJP watchers are also waiting to see Devendra Fadnavis’ fate. The former Maharashtra CM does not enjoy a good equation with Amit Shah; it remains to be seen whether he will get his coveted seat in the parliamentary board or not. He has been given charge of the Bihar polls. Two of his bete noirs from the state — Pankaja Munde and Vinod Tawde — find a place in the party headquarter as secretaries. The Fadnavis camp draws some solace from the fact that this is not a very senior position.
Tejasvi Surya replaces Poonam Mahajan as the Bharatiya Yuva Morcha chief. His induction seems more in lines of an Anurag Thakur (on steroids) model than a continuation of Poonam’s style. And the BJP finally has a full-time treasurer in the 77-yearold Rajesh Aggarwal who replaces Piyush Goyal. A former finance minister (2017-2019) in the Yogi government, Aggarwal was axed by the UP CM but seems to have made a strong comeback.
Both Sonia (read Rahul Gandhi) and Nadda have reshuffled their team in the last month. In both cases it is difficult to find that one dominant message that comes through, but then not everything is done keeping headlines in mind.
The false spectre of a friendless India
Far from losing friends, as the Congress claims, we are witnessing a new narrative of engagement. India’s neighbourhood-first policy ensures that it maintains a long-term and reliable partnership with countries in the region.
PM Modi and PM Rajapaksa’s recent virtual summit has given the India-Sri Lanka relation a new dimension in the pandemic era. In August 2020, when he took over as Sri Lanka’s foreign minister, Jayanath Colambage had clearly stated that for Sri Lanka’s strategic and security policy, it will always be “India First”. The virtual summit had seen two very significant developments: One was the agreement on strengthening defence cooperation; and, two, the crucial announcement by PM Modi, in line with his commitment towards re-kindling civilisational ties, that India would give a grant assistance of “$15 million for the promotion of Buddhist ties between the two countries”.
That the All India Congress Committee’s foreign affairs department is near defunct and has almost shut shop have been evident for quite some time now. But when former Congress president Rahul Gandhi quoted The Economist to castigate the Modi government and blamed it for India apparently losing friends in the neighbourhood, it was clear that the once powerful AICC has gone into a state of prolonged hibernation and outsourced its foreign policy thinking to foreign sources.
That anyone can even think seriously of formulating a cogent and serious foreign policy argument based on an article in The Economist is astounding enough, but that India’s principle Opposition party’s top leader needs to base himself on a piece from The Economist to buttress his argument, shows how rudderless and unimaginative the Congress’ wings and departments have become.
From the days of Jawaharlal Nehru drafting the Congress’ foreign policy resolutions himself, to the likes of Purabi Mukherjee serving as the general secretary of the party and Margaret Alva conducting training camps for its leaders, to leaders like Anand Sharma and Karan Singh heading it, the AICC foreign affairs department has truly fallen on evil days. The fact that its former president and princeling-in-chief needed to take recourse to an article from The Economist shows how shallow, selfserving and reduced the Congress’ thinking has become on trying to assess India’s foreign policy under Prime Minister Narendra Modi.
PM Modi has altered the terms of the game completely. In the last six years, India has put to use, with remarkable alacrity and effectiveness, all the dimensions of power — soft, sharp and smart — to achieve her strategic and foreign policy objectives. More importantly, India, as Foreign Minister S. Jaishankar has argued, is no longer a ‘bystander’ and has contributions and interventions to make on the major issues of our times. This major and fundamental transformation is something the Congress and its leadership, especially its family, plagued by muddled thinking, is refusing to understand.
Of course, Jawaharlal Nehru himself never had any real and abiding global vision. He was constantly swayed by his own esoteric internationalism, which really had no place in the world of hard geopolitics. In his confused and muddled understanding of India’s foreign policy imperatives, and especially how these have been transformed under PM Modi, Rahul Gandhi has flashes of Nehru in him. For instance, to the utter astonishment of his colleagues in Parliament, on 12 December 1962, about two months after the China war debacle, when the Rajya Sabha was discussing the ‘Cease Fire Proposals’, Nehru had made an alarming statement: “I have suggested in the Lok Sabha that we might even be prepared to refer the question of the merits of the boundary disputes to the International Court of Justice at the Hague.” Obviously, even as late as 1962, Nehru had learnt no lessons from his misadventure of referring Kashmir to the UN, and his statement reflected his poor understanding of the intricacies of international politics. When A.D. Mani, an independent member from Madhya Pradesh and a veteran journalist, asked Nehru whether he could clarify his statement, Nehru reiterated his outlandish proposition, that among the various peace measures he was suggesting, this could be one: “These other peaceful methods might include a reference to the Hague Court…”
An incorrigible naiveté and a dense ignorance dipped in a personal hatred for PM Modi has made Rahul aimlessly blabber almost on every issue in the last few months. His contention that India is increasingly friendless in the neighbourhood is actually a dishonest assessment of India’s neighbourhoodfirst policy. ‘Neighbourhood first’ continues to remain a cornerstone of PM Modi’s foreign policy doctrine. In fact, with all countries — except for the one recalcitrant selfstyled republic to her west — India’s approach to her neighbourhood has been based on the ‘Mitratva-Magga (Path of Friendship) and the SAGAR (Security and Growth for All in the Region) doctrine. The SAGAR doctrine is eliciting greater interest in the region and is being seen as a credible, reliable and long-term framework of partnership and exchange, devoid of exploitation and shorn of unilateralism.
In the neighbourhood, India continues to be regarded as the first responder to humanitarian crises, and in the last six years, while China laid claim to Nepali territory, encroached into it and erected buildings, India has continued unwaveringly in her commitment towards the well-being of the people of Nepal. The latest tranche, in the promised post-earthquake reconstruction of Nepal, especially in the construction of houses, schools and libraries, was handed over to the government of Nepal on 2 September.
PM Modi and PM Rajapaksa’s recent virtual summit has given the India-Sri Lanka relation a new dimension in the pandemic era. In August 2020, when he took over as Sri Lanka’s foreign minister, Jayanath Colambage had clearly stated, that for Sri Lanka’s strategic and security policy, it will always be “India First”. The virtual summit had seen two very significant developments: One was the agreement on strengthening defence cooperation; and, two, the crucial announcement by PM Modi, in line with his commitment towards re-kindling civilisational ties, that India would give a grant assistance of “$15 million for the promotion of Buddhist ties between the two countries”. This offers immense scope for a long-lasting re-invention of our civilisational linkages.
The Indian Foreign Secretary’s recent visit to Dhaka, the first since Covid struck, was a highly successful one. The successful completion of the LBA in 2015 was a landmark in the India-Bangladesh relation in the last four-plus decades and now the Beximco and Serum Institute of India (SII) agreement for Dhaka to be given “priority-access” to the Covid vaccine is a major step towards fulfilling India’s ‘neighbourhood first’ policy.
The launch of the direct Maldives-India Cargo Ferry Service has further enhanced our partnership with this crucial Indian Ocean island nation. The work on the expansion of the Hanimaadhoo International Airport has already started, with the Airport Authority of India team moving in and completing the survey for the work to begin. This will be one of the largest infrastructure projects in recent times and will give a major boost to the Maldivian tourism industry. The whole of India’s credit line system and diplomacy is based on transparency and sensitivity and is meant to completely empower and enhance the receiving country and fulfil its requirements. India’s financial package of $250 million for the Maldives during the pandemic period is also the largest by a bilateral partner.
Meanwhile, Myanmar is clearly rethinking and reassessing its approach to BRI and is in the process of diversifying its outreach and has started working on expanding its relations with India.
Far from losing friends, India’s neighbourhood is seeing a new narrative of engagement evolving with the creed and vision of SAGAR at its centre. It is a narrative of partnership that is far-seeing, dynamic and driven by transparency, accountability and a fundamental conviction that India’s neighbourhood needs to emerge as a dynamo of growth and prosperity for the people of the region and beyond. Prime Minister Modi has not only reiterated this in the last six years but has actualised it on the ground.
The Congress party’s leadership has lost its international perspective and it is beholden to the anti-India fringe and is, therefore, afflicted with the false spectre of a friendless India! The reality is convincingly otherwise.
The writer is Director, Dr Syama Prasad Mookerjee Research Foundation, New Delhi. The views expressed are personal
Making things happen: Municipal corporation turns Indore into cleanest city
Indore was known as an industrial town in the state of Madhya Pradesh but shot into prominence as it was declared as the cleanest city in the country in 2017. It continued to be awarded the cleanest city every year thereafter. What brought about a transformation that has been sustained now for so many years?
It wasn’t very easy to begin with. A number of challenges were faced initially to set up a system in the city:
• Insufficient knowledge and self-motivation of residents, community and operation staff • Weak financial support and management
• Lack of involvement of stakeholders, including the private sector and non-governmental organizations.
• Lack of public participation
• Lack of strengthening of institutions for monitor and enforcement To overcome these challenges, it was decided to transform the city through strategic planning and municipal waste management. Indore Municipal Corporation (IMC) developed capacity to collect, transport and treat 1100 tonnes of waste generated every day.
This was achieved through support from citizens and stakeholders in the following manner: • 100% source segregation of waste in dry and wet waste.
• 100% door-to-door collection
• 100% transportation of waste to processing facility
• 100% treatment of wet by composting • 100% treatment of dry waste in two material recovery facility.
• 100% utilization of all rag pickers in the city in material recovery facility
• 100% recovery of land from old dump by bio-mining process
• 100% vehicles equipped with GPS with geo tagging and real time monitoring through control room
• 100% workers registration with biometric system and wages directly to their accounts. Extensive work to strengthen infrastructure and efficient operation and maintenance of solid waste management waste was carried out.
Information, Education and Communication (IEC) was the key to behaviour change.
The first step therefore was to create awareness amongst the people and the community through pamphlets, loud speakers, rallies, meetings and public participation. Made them aware to segregate wet and dry waste, its benefits and consequences on human health & environment.
Door to door collection and transportation services were designed in such a way that the citizens got the services on all 365 days in a year irrespective of any National Holidays, Festivals and Sundays. Accordingly, a ward wise deployment plan of sanitary workers, drivers and utilization of vehicles was prepared.
For better segregation 3 bins are used in each house. Door to Door collection of waste is being done in all 85 wards of city using partitioned vehicles. There are three separate collection compartments for wet, dry and domestic hazardous waste in each tipper. The wet waste from semi bulk generators generating 25 to 100 kg of waste is collected through the dedicated Bulk Collection System.
The wet waste collected is transported by the tippers to one of the ten transfer stations. At the garbage transfer station (GTS), the tippers unload the wet waste into dedicated compactors which compress and load the wet waste on dedicated hook loaders.
The details of all the incoming waste collection vehicles are logged in the log books at the GTS. Aadhar based Biometric attendance of all the workers is taken every day. All vehicles are monitored by a GPS enabled tracking system. Any route deviation is penalized and multiple deviations are grounds for termination. Sweeping of roads less than 18m wide is done manually by sanitary workers of IMC and wider roads are cleaned by 10 ultra-modern mechanized road sweeping machines. 400 km roads are mechanically swept between 10 pm and 6 am. Gangs of workers are deployed along with to wash the squares, footpath and monuments with pressure jet machines.
10 ultra-modern transfer stations have been developed at strategic locations to transfer the waste from small tippers to big hook loaders. From these transfer stations, wet waste is sent for processing. The segregated MSW is compressed into respective containers. They are then lifted by dedicated hook loader and sent to disposal site.
The bucket for the sanitary waste and domestic hazardous waste is off loaded into dedicated drums and is transported to Common Biomedical Waste Facility (CBWTF) regularly. The IMC took over an existing under-performing Centralized Organic Waste Processing Unit. After the takeover, complete overhauling of the plant, including repair of the machinery, was done. The compost plant is now working to its capacity of 600 MT of wet waste per day.
IMC established decentralized aerobic pit composting units in 414 gardens to treat lawn cuttings, leaves and tree branches. Depending upon the size of garden and quantity of garden waste generated the onsite composting facility for garden waste has been developed. Decentralized processing for wet waste has been developed at vegetable and fruit markets and at Khajrana Ganesh Mandir for converting flower waste into compost through Organic waste converter System. Mobile Composting Vans for onsite treatment of Organic Waste generated from small food joints and restaurants has been deployed on contract basis.
The IMCtook the initiative to produce and utilize Bio CNG produced from processing of Municipal Solid Waste. The project with 20 TPD capacity is in one of the whole sale market of Fruits and Vegetables in Indore. This plant generates Bio CNG for public transport. It generates methane gas which is converted into CNG and utilized. 15 buses in Indore run on the Bio-CNG and consuming nearly 500 kg of gas per day & cover more than 2000 km per day.
On segregating dry and wet waste, around 500 TPD dry waste is generated. To handle and process such large quantity of dry waste, IMC has developed Material Recovery Facility. At this material recovery facility various fractions of dry waste like plastic, rubber, leather, glass, metal, cloth etc. are segregated by registered rag pickers. 1753 rag pickers were identified after extensive survey.
The non-biodegradable waste is segregated by category at the site. The recyclable low-density polyethylene (plastic bags) gets cleaned and sent for recycling at existing plastic briquetting unit, where the plastic briquettes are sold to an irrigation pipe manufacturer. Other smaller-volume recyclables such as paper / carton, glass, metals, HDPE, PPP, and PET are cleaned, sorted, bundled and traded to wholesalers at a cost-plus margin.
A construction and demolition waste processing plants of 100TPD capacity has been developed and 4 transfer points for C&D waste have been developed within the city.
The success of Indore shows that this is doable. It is a lighthouse project for MP and for other similar cities across the country. What is even more remarkable is that the wonderful and exemplary work initiated under the inspired leadership of the then Municipal Commissioner, Manish Singh was carried forward, consolidated and sustained by his extremely competent successor, Asheesh Singh . They have demonstrated that it-can-happen.
Anil Swarup has served as the head of the Project Monitoring Group, which is currently under the Prime Minister’s Office. He has also served as Secretary, Ministry of Coal and Secretary, Ministry of School Education.
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