THE RIGHTS OF JOURNALIST

logoTHE RIGHTS OF JOURNALIST

Author: Tanya Raj

 

What is the extent of the right to gather news?

The question arises on a daily basis for journalists around the country.Reporters and photographers are told by police that they cannot enter a crime scene, are threatened with arrest for not moving where police order them to move, or are ordered out of a building or an area where a newsworthy event is taking place.

Unfortunately, courts have not been good at clarifying what the news gathering right entails. In a landmark case about the reporter’s right to keep sources confidential, Branzburg v. Hayes, the U.S. Supreme Court noted: “We do not question the significance of free speech, press, or assembly to the country’s welfare. Nor is it suggested that news gathering does not quality for First Amendment protection; without some protection for seeking out the news, freedom of the press could be eviscerated.” The Court introduced this defense of a free press simply to state that forcing reporters to testify about sources is not covered by this constitutional protection. And in the years since the 1972 Branzburg decision, the high court has never spelled out that protection.

In two subsequent cases involving media access to prisons — Pell v. ProcunierandSaxbe v. WashingtonPost — the Supreme Court declined to extend this access right any further. The majority of the court concluded that as long as restrictions treat the media and public equally, they raise no constitutional questions.

After the prison access cases, the Court later found in Richmond Newspapers Inc. v. Virginia that the public and media have a First Amendment right to attend criminal judicial proceedings, which reinforces the idea that newsgathering is constitutionally protected. And in Globe Newspaper Co. v. Superior Court, the Court noted that because the right to publish news depends on the ability of the media to gather information, restrictions on the right to gather news diminish the right to publish. But these standards have been so far limited to the realm of access to court records and proceedings, and, in fact, the high court has not extended the access right to civil proceedings.

Some lower courts have granted the media special news gathering privileges in specific situations where the public does not have access. But most of these decisions fail to clearly define the scope and nature of these privileges.

So what does this mean as a practical matter to the average journalist? Courts will generally defer to police and other officials if they interfere with reporters in the name of managing an emergency scene or protecting the public, but should protect reporters from “arbitrary” interference with news gathering. But reporters should remember that they will never convince an officer on the scene that their First Amendment rights are being violated. Usually, the only remedy is an after-the-fact discussion with officials or a lawsuit.

This guide does not cover issues of liability that journalists may face for publishing information, such as lawsuits for libel or invasion of privacy. Instead, it looks at some of the common news gathering scenarios encountered by journalists and discusses the law that applies.

ANCIENT LAWS

logoANCIENT LAWS

Author: Tanya Raj

Introduction:-For man to be able to live in a society there must be laws that govern man. If these laws cease to exist, then there will be chaos. This concept of law has drawn the attention of different scholars over time, such as Plato, Aristotle, The Stoics, Aquinas, to mention but a few.

Law is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. Immanuel Kant says that this question cannot be answered from the empirical point of view, rather from the metaphysical arena. Kant says “like the wooden head in Phedrus fable, is a head that may be beautiful but alas! Has no brains”.

For Jeremy Bentham and his disciple Austin, say law is essentially a command backed by sanction or the threat of punishment, which implies that anybody who is able to issue a command and is able to back it up with the threat of punishment has, ipso facto, made a law!

Now, all these definitions lacked one thing and that is the essential feature of law. If we agree with Justice Holmes and say it is a sanction, then we begin to see law as prediction, a systematized prediction as to what would happen to a person (sanction) if he does a given thing that is forbidden. But sanction is only an appendage of law, hence the only feature of law is obligation; this obligation is gotten from natural law. This brings us to see that talking about legal philosophy with the exclusion of Aquinas would be disastrous, as we see the idea of natural law, which he formulated being in play here.

Aquinas is an important figure in the philosophy of law and cannot be left out; this would bring us to understanding his idea of natural law. Natural Law is a moral theory of jurisprudence, which maintains that law should be based on morality and ethics. Natural Law holds that the law is based on what’s “correct.” Natural Law is “discovered” by humans through the use of reason and choosing between good and evil. Therefore, Natural Law finds its power in discovering certain universal standards in morality and ethics.

It is worthy of note that Aquinas was not the first to approach this idea of natural law; this shows that this concept of natural law is as old as Western philosophy. The Sophists made a distinction between laws of the State and nature, but placed laws of nature on higher priority over laws of the State. They said laws of the State must conform to laws of nature. In other words the laws of nature are the ideal. The laws of the State make men do things that are unnatural. The laws of nature make no distinction between Greeks and barbarians rather the laws of the State would.

Plato was one of the founders of philosophy of law and natural law doctrine. For him, laws are only necessary when reason fails, for the law of reason is the ideal law. This clearly shows he is the originator of the natural law which sees the law of nature as law of reason. Plato condemns positive laws which are only used when men are weak; he says thus that if men are perfectly rational and ready to submit to the law of reason, there would be no need for positive laws.

Now, the idea of Aristotle follows from that of his master, Plato. He makes use of the law of reason. Teleologically, there is always some end to natural phenomena. By studying a thing we come to know what it is intended for by nature. Each being has its own proper end intended for it by nature. What Aristotle has in mind is to bring natural law to this idea. That is natural law is nothing else than this “intention” of nature of things expressed through the natural tendency of things.  And for the Stoics, their natural law was indifferent to the divine or natural source of the law.

 

CORPORATE GOVERNANCE – CHANGING DIMENSIONS

logoCORPORATE   GOVERNANCE –  CHANGING   DIMENSIONS

By  RoumitaDey.

(BA.LLB, Fourth  Year,Jogesh  ChandraChoudhuri  College of Law, Kolkata)

 

Abstract
Corporate Governance in India has seen a paradigm shift and has been posing new set of challenges to the top echelons of management in various organizations including organizations from the financial sector. The increasing stringencies and tighter regulatory mechanism have been the compelling reasons for the companies to have stronger focus and orientation on smooth implementation of the corporate governance code in India. The paradigm shift in the manner in which business is conducted across the world in the digital era, warrants a synchronization of the regulatory mechanisms to tackle frauds, and to safeguard the interests of various stakeholders[1]. A clear understanding of the various changing dimensions and perspectives optimally backed by the collective will power of the corporate world as well as the government will ensure the accomplishment of shareholders’ objectives by the various organizations.

Introduction

The term ‘corporate governance’ may be defined as ‘the activity of controlling a company’ (OUP, 2000). ‘Corporate governance deals with the ways in which the suppliers of finance to corporations assure themselves of getting a stream of return on their investments’ (Schleifer et al, 1997)[2]. Corporate Governance is one of the most often talked about topics in business, among the senior echelons of management as well as other stakeholders. Corporate Governance is defined as the compendium of the general set of customs, regulations, habits, and laws that determine to what end a firm should be run. The most challenging part about corporate governance is the lack of clear demarcation between the complex intersections of law, morality, and economic efficiency. Corporate Governance has gradually gained focus,prominence and importance in the curriculam of the leading business schools and has also become one of the hottest contemporary issue on which seminars, conferences and workshops are being organized across the globe to sensitize the various stakeholders about its impact, implications and ramifications on the various stakeholders of the society. It is usually not a distinct academic discipline, but has been integrated into management course of different institutions and universities in India and abroad[3].

The issues pertaining to Corporate Governance is considered to be significant in the light of the manifold issues and dimensions including issues of executive compensation, financial scandals, and shareholders’ activism etc.

Corporate governance is the integration of the various processes, customs, policies, laws, and institutions affecting the way a corporation (or company) is directed, administered or controlled. Corporate governance also includes the relationships among the many stakeholders involved and the goals for which the corporation is governed. The principal stakeholders are the shareholders, management, and the board of directors. Other stakeholders include employees, customers, creditors, suppliers, regulators, and the community at large.

Corporate governance is a multi-faceted subject. An important theme of corporate governance is to ensure the accountability of certain individuals in an organization through mechanisms that try to reduce or eliminate the principal-agent problem.There are yet other aspects to the corporate governance subject, such as the stakeholder view and the corporate governance models around the world.

Global Scenario

USA
Corporate governance practices in the United States are not regulated by any one particular statute but instead are affected by the governing instruments, the corporate law and the court decisions of each issuer’s state of incorporation, and, in the case of many publicly-owned issuers, by the U.S. federal securities laws and requirements of the national securities markets. Matters governed by state law include the voting rights accorded to shareholders, the functions of the board, and the ability of board members and executives to enter into transactions with the company. State corporation laws vary among the 50 states. However, because many corporations choose to incorporate in Delaware, Delaware law is a useful reference point for state corporate governance practices and is referred to throughout this response.

U.S. federal securities laws also affect corporate governance practices, primarily in the areas of disclosure and financial reporting, proxy voting, and the submission of shareholder proposals for consideration at shareholders’ meetings. In addition, the national securities markets impact corporate governance practices through their requirements applicable to issuers of securities traded on their markets. Subject to all of these different laws and regulations as applicable, corporations may establish their own governance practices in their corporate charters and bylaws.

There has been renewed interest in the corporate governance practices of modern corporations since 2001, particularly due to the high-profile collapses of a number of large U.S. firms such as Enron Corporation and MCI Inc. (formerly WorldCom). In 2002, the U.S. federal government passed the Sarbanes-Oxley Act, intending to restore public confidence in corporate governance.

Code on Corporate Governance

This Code supersedes and replaces the Combined Code issued by the Hampel Committee on Corporate Governance in June 1998. It derives from a review of the role and effectiveness of non-executive directors by Derek Higgs and a review of audit committees by a group led by Sir Robert Smith. The Financial Services Authority has said that it will replace the 1998 Code that is annexed to the Listing Rules with the revised Code and will seek to make consequential Rule changes. There will be consultation on the necessary Rule changes but not further consultation on the Code provisions themselves. It is intended that the new Code will apply for reporting years beginning on or after 1 November 2003. The Code contains main and supporting principles and provisions. The existing Listing Rules require listed companies to make a disclosure statement in two parts in relation to the Code. In the first part of the statement, the company has to report on how it applies the principles in the Code. In future this will need to cover both main and supporting principles. The form and content of this part of the statement are not prescribed, the intention being that companies should have a free hand to explain their governance policies in the light of the principles, including any special circumstances applying to them which have led to a particular approach. In the second part of the statement the company has either to confirm that it complies with the Code’s provisions or – where it does not – to provide an explanation. This ‘comply or explain’ approach has been in operation for over ten years and the flexibility it offers has been widely welcomed both by company boards and by investors. It is for shareholders and others to evaluate the company’s statement. While it is expected that listed companies will comply with the Code’s provisions most of the time, it is recognized that departure from the provisions of the Code may be justified in particular circumstances. Every company must review each provision carefully and give a considered explanation if it departs from the Code provisions.

UK Corporate Governance has influenced Corporate Governance regulation in the European Union and United States.A detailed analysis of several UK corporate governance reports, in particular[4]

  • the Cadbury Report on “Financial Aspects of Corporate Governance” (December 1992),
  • Rutteman Guidance (December 1994), Greenbury Report (July 1995),
  • Hamel Report on “Corporate Governance” (June 1998),
  • Turnbull Report on “Internal Control: Guidance for Directors on the Combined Code” (September 1999) and
  • Higgs Report on the “Review of the role and effectiveness of non-executive directors” (January 2003)

revealed that the UK has been able to influence US corporate governance regulation (Sarbanes-Oxley Act 2002 [SOA] on “Corporate Responsibility”, enacted by the Senate and House of Representatives of the United States of America).

Following recent financial reporting scandals, the requirement to implement standards for the EU capital market to enhance public trust in the audit function in the EU and the need to respond to SOA, the Commission prepared with the Winter report[5]. In September 2003 the Commission published the Communication (2003/236/02) on “Reinforcing the statutory audit in the EU” and in parallel an Action Plan on “Modernising Company Law and Enhancing Corporate Governance in the European Union”. The Directive (2006/43/EC) on “statutory audit of annual accounts and consolidated accounts, amending Council Directive 78/660/EEC and 83/349/EEC and repealing Council Directive 84/253/EEC” was adopted by the European Parliament on the 28.9.2005.

The new modern regulatory audit framework will be applicable to non-EU audit firms performing audit work in relation to companies listed on the EU capital markets. To achieve recognition of the EU regulatory approaches to the protection of investors and other stakeholders, the Commission has had regulatory discussions in particular with the SEC but also with decision makers in US Congress and EU Finance Ministers.[6]

Corporate Governance: Global Financial Crisis

The OECD report analysed and submitted a detailed report on the impact of failures and weaknesses in corporate governance on the financial crisis, including risk management systems and executive salaries[7]. It concluded that the financial crisis can be to an important extent attributed to failures and weaknesses in corporate governance arrangements which did not serve their purpose to safeguard against excessive risk taking in a number of financial services companies. Accounting standards and regulatory requirements have also proved insufficient in some areas. Last but not the least, remuneration systems have in a number of cases not been closely related to the strategy and risk appetite of the company and its longer term interests.

Corporate Governance Lessons from the Financial Crisis

The financial crisis in USA can be to an important extent attributed to the various failures and weaknesses in corporate governance arrangements. Qualified board oversight and robust risk management is important. Corporate governance enhancements often followed failures that highlighted areas of particular concern. Understanding the market situation that confronted financial institutions is essential. Default rates on US sub prime mortgages began to rise as of 2006, and warnings were issued by a number of official institutions. By mid-2007 credit spreads began to increase and first significant downgrades were announced, while sub prime exposure was questioned. Financial institutions faced challenging competitive conditions but also an accommodating regulatory environment. While the post-2000 environment demanded the most out of corporate governance arrangements, evidence points to severe weaknesses. The remuneration of boards and senior management also remains a highly controversial and debatable issue in many countries

Corporate Governance in India

In India, the challenge is more in respect of promoter managed companies where balancing of their interest with that of minority shareholders is tough.

Corporate Governance in India: Regulatory landscape

Recent events in India have put the spotlight on corporate governance practices of Indian companies. A key aspect that is being debated in the corridors of India Inc. is whether we need major regulatory changes to improve corporate governance, or whether improved standards of corporate governance could be achieved through adoption of principle-based standards of conduct. India Inc. has generally been proactive in promulgating corporate governance regulations. In doing so, a good balance has been achieved i.e. headway has been made, in terms of helping ensure that regulations are not stifling our entrepreneurial initiatives. From a purely regulatory standpoint, India compares favorably with most other developing and Asian economies as far as its corporate governance rules are concerned.


Good corporate governance

Good corporate governance is characterized by a firm commitment and adoption of ethical practices by an organization across its entire value chain and in all of its dealings with a wide group of stakeholders encompassing employees, customers, vendors, regulators and shareholders (including the minority shareholders), in both good and bad times. To achieve this, certain checks and practices need to be whole-heartedly embraced.

 

Broadening Base for Application to Unlisted Companies and SMEs

The speakers at a recently concluded seminar on corporate governance were of the view that the existing corporate governance norms and structures are good and need no major overhaul, but some fine tuning may be required to make them applicable to unlisted and small and medium enterprises. The speakers also laid stress on the fact the growth and prosperity of a nation depends on the character of its people which in turn depends on the education and value systems inculcated in a person since his childhood.

Manoharan, who was appointed by the central government as a director of the scam-hit Satyam Computers and later its chairman to bring back the company from the brink, was speaking at the ‘Corporate Governance – The Way Forward’, seminar organised at Chennai in association with National Foundation for Corporate Governance. ‘The ramification of a corporate fraud is not restricted only to the jurisdiction where the fraud was committed,’ he said. Speaking about the Satyam Computer balance sheet, he said: ‘On the right side (asset side) nothing was left and on the left side (liabilities) nothing was right. But such frauds are few.’

SanthoshShetty, director, Governance, Risk and Compliance Services practice at KPMG, called for some changes in the corporate governance norms and for a credible disciplinary system. He also asked key advisors like auditors to be more accountable.

Issues in the implementation of the Corporate Governance Code

In one of the recently concluded conference on corporate governance, the moderator – Ganesh Ramamurthy, director, governance risk and compliance services, KPMG India, set the ball for the second session rolling, by establishing that while the corporate governance norms in India are at par with the best in the world, ensuring that these norms are always implemented is where the trouble comes in. Commenting on the difficulty of implementing these norms, Stephen Matthias, partner, Kochhar& Co said that it was important to have all the corporate governance codes together to ensure better implementation rather than have the implementation governed by multiple bodies. KPMG[8] India and various other leading consulting firms have done a pioneering work in the area of smooth implementation of the corporate governance code and have been providing consulting to the various organizations and have been instrumental in ironing out the issues and the bottlenecks in the implementation of the corporate governance code.

 

Striking a balance between transparency and cost of disclosure

As the opening session on a series of discussions on corporate governance, it was only appropriate that it that focus on the most effective framework needed for organizational decision making. KMPG CEO Russell Parera said that what was needed was a culture that encouraged debate and dissent, something one doesn’t always see on Indian boards as people tend to belong to the same inner circle.
Following up on that, Zia Mody, managing partner, AZB Partners added that if a person was on the board of a company as an independent director, he or she was expected to ask awkward questions, which rarely was the case. “However, that in itself cannot help prevent a fraud as directors could be given wrong information,” she added. Of course, it takes a lot more than just having standards in place. It’s also about how these are implemented. It would, for instance, be almost pointless to have a whistleblower policy in place, and link it directly with the CFO. The panel agreed that it was best to give authority to an independent director or board member when it came to matters of compliance and governance.
Lakshminarayana KR, chief strategy officer, Wipro added that a lot also depended on how much time the board members had, to devote to each company on whose board they served, and the amount of access provided by the company to the mid and lower level of employees so that directors could truly get a sense of what was happening. Joseph Massey, MD & CEO of the Multi Commodity Exchange had a relevant point to make. “Corporate governance has to be treated as a normal part of life when running a company-it’s just one more add-on[9].
The focus should be on running the business, corporate governance just gets inculcated,” he said. While shareholder activism in India has still to take off, this is partly also because companies are shielded from the reputational risk that class action lawsuits bring with them. Parera mentioned that as companies would increasingly grow aware of this, shareholder activism too would rise in a healthy way. As the session ended, all the panellists agreed that there was no such thing as too much disclosure and while no one wanted more regulation in the wake of the Satyam scandal, what was needed was better implementation of existing regulations.

Role of Audit Committee in Corporate Governance

The members of board of directors of a company i.e. directors exercise the power vested in a company either directly or through managers appointed by them. (GOWER 1997)[10]. The boards of directors delegate their responsibilities by appointing managers in specialized areas to shoulder their burden as the overall responsibilities cannot be shouldered by few people at the top echelons of management.
One among such tasks is the preparation of financial statements and annual accounts which is a mandatory task. This is an important task from the perspective of the prospective investors as well because the annual report of the company is an indicator of the financial health of the company. Since the annual report represents the financial health of a company, the management of a company might be tempted to present a rosy picture of the same by modifying the numbers and thus avoiding incisive questions by the board as to its performance. In view of this possibility provision for compulsory audit of the annual accounts has been made. The auditors are, based upon the information which they gather from the company; expected to ascertain whether the annual accounts of a company present a ‘true and fair view’ of the company’s financial position or not. However, there have been instances of accounting and audit failure which led to several brainstorming sessions by the regulators who suggested different modes of ensuring that such scandals become events of the past. Instances of such failures like those in the cases of Maxwell, BCCI and Polypeck in the United Kingdom led to the appointment of Cadbury Committee on Financial Aspects of Corporate Governance (Cadbury 2003).

 

Conclusion and Recommendations
India has made significant achievement in the area of corporate governance and is yet to go a long way in ensuring good corporate governance in line with the leading economies of the globe. Indian companies are focusing on good corporate governance so as to accomplish the shot term and long term corporate plans simultaneously ensuring the overall interests of the various stakeholders. The good governance helps an organization in attracting the best talents in various domain areas, as well as in motivating and retaining the talent thereby facilitating the overall process of talent management which acts as a backbone or the engine of any organization. Good corporate governance facilitates the management of visualizing, analyzing and managing the various types of risk so as to ensure a secure and prosperous operating environment to improve the operational performance and productivity.



[1]Cadbury A. (2003), Corporate Governance and Chairmanship – A Personal View (New Delhi: Oxford University Press, 2003) (95).

[2]Schleifer A. and Vishny R. in J.R. Macey (1997), ‘Institutional Investors and Corporate Monitoring: A Demand-side perspective’ 18 (7/8) Managerial and Decision Economics (Nov-Dec, 1997) at 602 as cited on http://www.jstor.org. 5 Gower, Principles of Modern Company Law (P.L. Davies)

 [3]ICAI-NFCG National Seminar on corporate governance in Orissa, 20, Dec. 2009.

[4]http://en.wikipedia.org/wiki/Corporate_governance

[5]http://www.fsa.gov.uk/pubs/ukla/lr_comcode2003.pdf

[6]http://en.wikipedia.org/wiki/UK_Corporate_Governance

[7]Kirkpatrik, G. (2009), “The Corporate Governance Lessons from the financial crisis”, Financial Market Trends, OECD, 2009

[8]KPMG Report (2009), The state of corporate governance in India, – A Poll, Audit Committee Institute.

[9]Sustaining Investor Confidence: CD seminar on corporate governance, 29 May 2009, ET Bureau

[10]Gower, (1997), Principles of Modern Company Law (P.L. Davies ed., 6thedn., London: Sweet & Maxwell Ltd., 1997) (598).

 

DOCTRINE OF ULTRA VIRES-EFFECTS AND EXCEPTIONS

logoDOCTRINE OF ULTRA VIRES-EFFECTS AND EXCEPTIONS

(Author : Advocate Geetika Jain)

CONCEPT

 The object clause of the Memorandum of the company contains the object for which the company is formed. An act of the company must not be beyond the objects clause, otherwise it will be ultravires and, therefore, void and cannot be ratified even if all the members wish to ratify it. This is called the doctrine of ultra vires, which has been firmly established in the case of Ashtray RailwayCarriage and Iron Company Ltd v. Riche. Thus the expression ultra vires means an act beyond the powers. Here the expression ultra vires is used to indicate an act of the company which is beyond the powers conferred on the company by the objects clause of its memorandum. An ultra vires act is void andcannot be ratified even if all the directors wish to ratify it. Sometimes the expression ultra vires is used to describe the situation when the directors of a company have exceeded the powers delegated to them. Where a company exceeds its power as conferred on it by the objects clause of its memorandum, it is not bound by it because it lacks legal capacity to incur responsibility for the action, but when the directors of a company have exceeded the powers delegated to them. This use must be avoided for it is apt to cause confusion between two entirely distinct legal principles. Consequently, here we restrict the meaning of ultra vires objects clause of the company’s memorandum.

Basic principles included the following:

  1. An ultra vires transaction cannot be ratified by all the shareholders, even if they wish it to be ratified.
  2. The doctrine of estoppel usually precluded reliance on the defense of ultra vires where the transaction was fully performed by one party
  3. A fortiori, a transaction which was fully performed by both parties could not be attacked.
  4. If the contract was fully executory, the defense of ultra vires might be raised by either party.
  5. If the contract was partially performed, and the performance was held to be insufficient to bring the doctrine of estoppel into play, a suit for quasi contract for recovery of benefits conferred was available.
  6. If an agent of the corporation committed a tort within the scope of his or her employment, the corporation could not defend on the ground the act was ultra vires.

 

ORIGIN AND DEVELOPMENT

Doctrine of ultra vires has been developed to protect the investors and creditors of the company. The doctrine of ultra vires could not be established firmly until 1875 when the Directors, &C., of the Ashbury Railway Carriage and Iron Company (Limited) v Hector Riche, (1874-75) L.R. 7 H.L. 653 was decided by the House of Lords. A company called “The Ashbury Railway Carriage and Iron Company,” was incorporated under the Companies Act, 1862. Its objects, as stated in the Memorandum of Association, were “to make, and sell, or lend on hire, railway carriages and waggons, and all kinds of railway plant, fittings, machinery, and rolling-stock; to carry on the business of mechanical engineers and general contractors ; to purchase, lease, work, and sell mines, minerals, land, and buildings; to purchase and sell, as merchants, timber, coal, metals, or other materials, and to buy and sell any such materials on commission or as agents.” The directors agreed to purchase a concession for making a railway in a foreign country, and afterwards (on account of difficulties existing by the law of that country), agreed to assign the concession to a Société Anonyme formed in that country, which société was to supply the materials for the construction of the railway, and to receive periodical payments from the English company.

The objects of this company, as stated in the Memorandum of Association, were to supply and sell the materials required to construct railways, but not to undertake their construction. The contract here was to construct a railway. That was contrary to the memorandum of association; what was done by the directors in entering into that contract was therefore in direct contravention of the provisions of the Company Act, 1862

It was held that this contract, being of a nature not included in the Memorandum of Association, was ultra vires not only of the directors but of the whole company, so that even the subsequent assent of the whole body of shareholders would have no power to ratify it. The shareholders might have passed a resolution sanctioning the release, or altering the terms in the articles of association upon which releases might be granted. If they had sanctioned what had been done without the formality of a resolution, that would have been perfectly sufficient. Thus, the contract entered into by the company was not a voidable contract merely, but being in violation of the prohibition contained in the Companies Act , was absolutely void. It is exactly in the same condition as if no contract at all had been made, and therefore a ratification of it is not possible. If there had been an actual ratification, it could not have given life to a contract which had no existence in itself; but at the utmost it would have amounted to a sanction by the shareholders to the act of the directors, which, if given before the contract was entered into, would not have made it valid, as it does not relate to an object within the scope of the memorandum of association.

Later on, in the case of Attorney General v. Great Eastern Railway Co.4, this doctrine was made clearer. In this case the House of Lords affirmed the principle laid down in Ashbury RailwayCarriage and Iron Company Ltd v. Riche5 but held that the doctrine of ultra vires “ought to be reasonable, and not unreasonable understood and applied and whatever may fairly be regarded as incidental to, or consequential upon, those things which the legislature has authorized, ought not to be held, by judicial construction, to be ultra vires.”

The doctrine of ultra vires was recognised in Indian the case of Jahangir R. Mod i v. ShamjiLadhaand has been well established and explained by the Supreme Court in the case of A. LakshmanaswamiMudaliarv. Life Insurance Corporation Of India. Even in India it has been held that the company has power to carry out the objects as set out in theobjects clause of its memorandum, and also everything, which is reasonably necessary to carry out those objects. For example, a company which has been authorized by its memorandum to purchaseland had implied authority to let it and if necessary, to sell it.However it has been made clear bythe Supreme Court that the company has, no doubt, the power to carry out the objects stated in theobjects clause of its memorandum and also what is conclusive to or incidental to those objects, but it has no power to travel beyond the objects or to do any act which has not a reasonable proximate connection with the object or object which would only bring an indirect or remote benefit to the company.

 To ascertain whether a particular act is ultra vires or not, the main purpose must first be ascertained, then special powers for effecting that purpose must be looked for, if the act is neither within the main purpose nor the special powers expressly given by the statute, the inquiry should be made whether the act is incidental to or consequential upon. An act is not ultra vires if it is found:

(a) Within the main purpose, or

(b) Within the special powers expressly given by the statute to effectuate the main purpose, or

(c) Neither within the main purpose nor the special powers expressly given by the statute but incidental to or consequential upon the main purpose and a thing reasonably done for

effectuating the main purpose.

The doctrine of ultra vires played an important role in the development of corporate powers. Though largely obsolete in modern private corporation law, the doctrine remains in full force for government entities. An ultra vires act is one beyond the purposes or powers of a corporation. The earliest legal view was that such acts were void. Under this approach a corporation was formed only for limited purposes and could do only what it was authorized to do in its corporate charter.

This early view proved unworkable and unfair. It permitted a corporation to accept the benefits of a contract and then refuse to perform its obligations on the ground that the contract was ultra vires. The doctrine also impaired the security of title to property in fully executed transactions in which a corporation participated. Therefore, the courts adopted the view that such acts were voidable rather than void and that the facts should dictate whether a corporate act should have effect.

Over time a body of principles developed that prevented the application of the ultra vires doctrine. These principles included the ability of shareholders to ratify an ultra vires transaction; the application of the doctrine of estoppel, which prevented the defense of ultra vires when the transaction was fully performed by one party; and the prohibition against asserting ultra vires when both parties had fully performed the contract. The law also held that if an agent of a corporation committed a tort within the scope of the agent’s employment, the corporation could not defend on the ground that the act was ultra vires.

Despite these principles the ultra vires doctrine was applied inconsistently and erratically. Accordingly, modern corporation law has sought to remove the possibility that ultra vires acts may occur. Most importantly, multiple purposes clauses and general clauses that permit corporations to engage in any lawful business are now included in the articles of incorporation. In addition, purposes clauses can now be easily amended if the corporation seeks to do business in new areas. For example, under traditional ultra vires doctrine, a corporation that had as its purpose the manufacturing of shoes could not, under its charter, manufacture motorcycles. Under modern corporate law, the purposes clause would either be so general as to allow the corporation to go into the motorcycle business, or the corporation would amend its purposes clause to reflect the new venture.

State laws in almost every jurisdiction have also sharply reduced the importance of the ultra vires doctrine. For example, section 3.04(a) of the Revised Model Business Corporation Act, drafted in 1984, states that “the validity of corporate action may not be challenged on the ground that the corporation lacks or lacked power to act.” There are three exceptions to this prohibition: it may be asserted by the corporation or its shareholders against the present or former officers or directors of the corporation for exceeding their authority, by the attorney general of the state in a proceeding to dissolve the corporation or to enjoin it from the transaction of unauthorized business, or by shareholders against the corporation to enjoin the commission of an ultra vires act or the ultra vires transfer of real or personal property.

Government entities created by a state are public corporations governed by municipal charters and other statutorily imposed grants of power. These grants of authority are analogous to a private corporation’s articles of incorporation. Historically, the ultra vires concept has been used to construe the powers of a government entity narrowly. Failure to observe the statutory limits has been characterized as ultra vires.

In the case of a private business entity, the act of an employee who is not authorized to act on the entity’s behalf may, nevertheless, bind the entity contractually if such an employee would normally be expected to have that authority. With a government entity, however, to prevent a contract from being voided as ultra vires, it is normally necessary to prove that the employee actually had authority to act. Where a government employee exceeds her authority, the government entity may seek to rescind the contract based on an ultra vires claim.

 

EFFECT OF ULTRA VIRES TRANSACTIONS

A contract beyond the objects clause of the company’s memorandum is an ultra vires contract and cannot be enforced by or against the company as was decided in the cases of In Re, Jon Beaufore (London) Ltd ., (1953) Ch. 131, In S. Sivashanmugham And Others v. Butterfly Marketing PrivateLtd., (2001) 105 Comp. Cas Mad 763,

A borrowing beyond the power of the company (i.e. beyond the objects clause of the memorandum of the company) is called ultra vires borrowing.

However, the courts have developed certain principles in the interest of justice to protect such lenders. Thus, even in a case of ultra vires borrowing, the lender may be allowed by the courts the following reliefs:

(1) Injunction — if the money lent to the company has not been spent the lender can get the injunction to prevent the company from parting with it.

(2) Tracing— the lender can recover his money so long as it is found in the hands of the company in its original form.

(3) Subrogation—if the borrowed money is applied in paying off lawful debts of the company, the lender can claim a right of subrogation and consequently, he will stand in the shoes of thecreditor who has paid off with his money and can sue the company to the extent the money advanced by him has been so applied but this subrogation does not give the lender the same priority that the original creditor may have or had over the other creditors of the company.

 

EXCEPTIONS TO THE DOCTRINE OF ULTRA VIRES

 There are, however, certain exceptions to this doctrine, which are as follows:

1. An act, which is intra vires the company but outside the authority of the directors may be ratified by the shareholders in proper form.20

2. An act which is intra vires the company but done in an irregular manner, may be validated by the consent of the shareholders. The law, however, does not require that the consent of all the shareholders should be obtained at the same place and in the same meeting.

3. If the company has acquired any property through an investment, which is ultra vires, the company’s right over such a property shall still be secured.

4. While applying doctrine of ultra vires, the effects which are incidental or consequential to the act shall not be invalid unless they are expressly prohibited by the Company’s Act.

5. There are certain acts under the company law, which though not expressly stated in the memorandum, are deemed impliedly within the authority of the company and therefore they are not deemed ultra vires. For example, a business company can raise its capital by borrowing.

6. If an act of the company is ultra vires the articles of association, the company can alter its articles in order to validate the act.

 

CASE NOTES:

Eley v The Positive Government Security Life Assurance Company, Limited, (1875-76) L.R. 1 Ex. D. 88

It was held that the articles of association were a matter between the shareholders inter se, or the shareholders and the directors, and did not create any contract between the plaintiff and the company and article is either a stipulation which would bind the members, or else a mandate to the directors. In either case it is a matter between the directors and shareholders, and not between them and the plaintiff.

 

The Directors, &C., of the Ashbury Railway Carriage and Iron Company (Limited) v Hector Riche, (1874-75) L.R. 7 H.L. 653.

The objects of this company, as stated in the Memorandum of Association, were to supply and sell the materials required to construct railways, but not to undertake their construction. The contract here was to construct a railway. That was contrary to the memorandum of association; what was done by the directors in entering into that contract was therefore in direct contravention of the provisions of the Company Act, 1862

It was held that this contract, being of a nature not included in the Memorandum of Association, was ultra vires not only of the directors but of the whole company, so that even the subsequent assent of the whole body of shareholders would have no power to ratify it. The shareholders might have passed a resolution sanctioning the release, or altering the terms in the articles of association upon which releases might be granted. If they had sanctioned what had been done without the formality of a resolution, that would have been perfectly sufficient. Thus, the contract entered into by the company was not a voidable contract merely, but being in violation of the prohibition contained in the Companies Act , was absolutely void. It is exactly in the same condition as if no contract at all had been made, and therefore a ratification of it is not possible. If there had been an actual ratification, it could not have given life to a contract which had no existence in itself; but at the utmost it would have amounted to a sanction by the shareholders to the act of the directors, which, if given before the contract was entered into, would not have made it valid, as it does not relate to an object within the scope of the memorandum of association.

Shuttleworth v Cox Brothers and Company (Maidenhead), Limited, and Others, [1927] 2 K.B. 9

It was held that

  •  the contract, if any, between the plaintiff and the company contained in the articles in their original form was subject   to the statutory power of alteration and
  •  if the alteration was bona fide for the benefit of the company it was valid and there was no breach of that contract;
  •   there was no ground for saying that the alteration could not reasonably be considered for the benefit of the company;
  •   there being no evidence of bad faith, there was no ground for questioning the decision of the shareholders that the alteration was for the benefit of the company; and,
  •  the plaintiff was not entitled to the relief claimed.

In Re New British Iron Company, [1898] 1 Ch. 324

It was held that the article is not in itself a contract between the company and the directors; it is only part of the contract constituted by the articles of association between the members of the company inter se. But where on the footing of that article the directors are employed by the company and accept office the terms of art. 62 are embodied in and form part of the contract between the company and the directors. Under the article as thus embodied the directors obtain a contractual right to an annual sum of 1000l as remuneration. It was held also that although these provisions in the articles were only part of the contract between the shareholders inter se, the provisions were, on the directors being employed and accepting office on the footing of them, embodied in the contract between the company and the directors; that the remuneration was not due to the directors in their character of members, but under the contract so embodying the provisions; and that, in the winding-up of the company, the directors were entitled to rank as ordinary creditors in respect of the remuneration due to them at the commencement of the winding-up.

Rayfield v Hands and Others, [1957 R. No. 603.]

Field-Davis Ltd. was a private company carrying on business as builders and contractors, incorporated in 1941 under the Companies Act, 1929 , as a company limited by shares, having a share capital of £4,000, divided into 4,000 ordinary shares of £1 each, of which 2,900 fully-paid shares had been issued. The plaintiff, Frank Leslie Rayfield, was the registered holder of 725 of those shares, and the defendants, Gordon Wyndham Hands, Alfred William Scales and Donald Davies were at all material times the sole directors of the company. The plaintiff was a shareholder in a company. Article 11 of the articles of association of the company required to inform the directors of his intention to transfer shares in the company, and which provided that the directors “will take the said shares equally between them at a fair value.” In accordance with this the plaintiff so notified the directors, who contended that they need not take and pay for the plaintiff’s shares, on the ground that the articles imposed no such liability upon them.

The plaintiff’s claimed for the determination of the fair value of his shares, and for an order that the directors should purchase such shares at a fair value. It was found that the true construction of the articles required the directors to purchase the plaintiff’s shares at a fair price. Article 11 is concerned with the relationship between the plaintiff as a member and the defendants, not as directors, but as members of the company.

Guinness v Land Corporation of Ireland,(1883) L.R. 22 Ch. D. 349

The Land Corporation of Ireland, Limited , was incorporated under the Companies Act on the 12th of July, 1882, as a company limited by shares. By the memorandum of association of a company limited by shares it was stated that the objects of the company were, the cultivation of lands in Ireland , and other similar purposes there specified, and to do all such other things as the company might deem incidental or conducive to the attainment of any of those objects.

The 8th clause of the articles of association, provided that the capital produced by the issue of B shares shall, so far as is necessary, be applied in making good to the holders of A shares the preferential dividend of £5 per cent., which they are to receive on the amounts paid up on their shares. This action was brought by one of the B shareholders on behalf of himself and the others, to restrain the directors from issuing any A shares on the footing of their being entitled to the benefit of that article, and to restrain the directors from applying in accordance with it the capital arising from the B shares.

It was held that the application of the B capital provided for by the articles is not an application of capital to carrying on the business of the company, but is providing an inducement to people to take shares and subscribe capital to carry on the business and that article 8 was invalid, as it purported to make the B capital applicable to purposes not within the objects of the company as defined by the memorandum of association, and in a way not incidental or conducive to the attainment of those objects, and that the directors must be restrained from acting upon it. The articles of association of a company cannot, except in the cases provided for by sect. 12 of the Companies Act, 1862 , modify the memorandum of association in any of the particulars required by the Act to be stated in the memorandum.

 

 

 

Critical Analysis of Sexual Harassment under IPC

logoCritical Analysis of Sexual Harassment under IPC

INTRODUCTION

The terms sexual harassment has been defined as – an unwelcome sexually determined behavior (whether directly or by implication) as:

a)      Physical contact and advances;

b)       A demand or request for sexual favours;

c)       Sexually coloured remarks;

d)     Showing pornography;

e)      Any other unwelcome physical, verbal or non-verbal conduct of sexual nature[1]

This offence of sexual harassment has not been dealt anywhere specifically under the Indian Penal Code. However, following the definition stated above, we find that the offence which falls within the bracket of this definition has been dealt under section 294, section 354 and section 509 of the IPC.

Section 294 deals with obscene acts and songs. Section 354 deals with the case of assault or criminal force to women with intent to outrage her modesty. Section 509 talks about words, gestures or act intended to insult the modesty of a woman.

In this project, the focus will be on section 294 and section 509 of the IPC. Firstly, the concept of these two sections has been explained in the project and then an analysis of the two has been presented in order to develop a broader understanding of the offences under these two sections.

 

SECTION 509 –

This section says that- Whoever, intending to insult the modesty of any woman, utters any word, makes any sound or gesture, or exhibits any object, intending that such word or sound shall be heard, of that such gesture or object shall be seen, by such woman, or intrudes upon the privacy of such woman, shall be punished with simple imprisonment for a term which may extend to one year, or with fine, or with both.

This section is referred as the Eve Teasing Section. The object of the section is to protect the modesty and chastity of a woman.

The essential elements of the section are:

  1. Accused uttered any word, made any sound or made a gesture or exhibits any object or intrude the privacy.
  2. Accused intended that words uttered, sound made or gesture shown or object exhibited seen or heard by the woman.
  3. It has to be directed towards a woman or group of women[2].

There is a difference between Section 354 and 509. Section 509 specifically talks about the insult and modesty of the women whereas Section 354 deals with outraging the modesty of the women.

Now the question that comes for consideration is what is meant by the term modesty. The term has not been defined in IPC. In the famous case of Major Singh Lachhman Singh vs The State on 30 May, 1963[3] ,the Shorter Oxford English Dictionary (Third Edition) definition of the word “modest” in relation to woman has been taken. It says that modesty is “Decorous in manner and conduct; not forward or lewd; shame fast”.  Hence, when used for men, it means the quality of being modest, and in relation to woman, “womanly propriety of behaviour; scrupulous chastity of thought, speech and conduct”.

Webster’s New International Dictionary of the English Language (Second Edition) amplifies the definition of “Modest” by adding “observing the proprieties; free from undue familiarity, indecency, or lewdness’.

In the case Swapna Barman Vs. Subir Das[4] , “Under Section 509 that the word ‘modesty’ does not lead only to the contemplation of sexual relationship of an indecent character. The section includes indecency, but does not exclude all other acts falling short of downright indenency.”

Recently in 2007 the SC defined Modesty as “The essence of a woman’s modesty is her sex.”[5]

An insult to the modesty of the woman is an essential ingredient of this offence. If a man exposes his person in an indecent way or use obscene words which he intend that it should be heard or his obscene drawings should be seen, he is held to be an offender under s.509 of IPC. The intention to insult the modesty of woman must be coupled with the fact that the insult is caused. It means that the other party understands that he is insulted. If a person intrudes upon the privacy of a woman, then also he is considered to be liable under this section.[6]

The intention to insult the modesty is very important as held in Santha vs State Of Kerala on 16 December, 2005[7]. And even when a man exposes his private organs to a woman, he can also be charged under section 509 of IPC. The offence may occur in private or public place.

As per the Justice Verma Committee Report[8], certain modifications should be done in Section 509 of the IPC. The Committee has suggested that use of words, acts or gestures that create an unwelcome threat of a sexual nature should be termed as sexual assault and be punishable for 1 year imprisonment or fine or both.

Recently the criminal law (amendment) ordinance, 2013 was passed in which section 509 of the Penal Code, for the words “shall be punished with simple imprisonment for a term which may extend to one year, or with fine, or with both”, the words “shall be punished with simple imprisonment for a term which may extend to three years and shall also be liable to fine” shall be substituted.[9]

 

SECTION 294

Section 294 of the act says that- whoever to the annoyance of others-

a.         Does any obscene act in any public place, or

b.         Sings, recites or utters any obscene song, ballad or words, in or near any public place,

Shall be punished with imprisonment of either description for a term which may extend to three months, or with fine, or with both.

The key ingredients of this section are:

  1. The accused-
    1. Did some act,
    2. Sang, recited or uttered any ballad;
    3. That such act, singing etc. was obscene
    4. That it was done in public place
    5. It caused annoyance to others.

This section is not gender specific, and the offender as well as the victim can be both male and female. The essential condition to be satisfied is that the obscene act or song must cause annoyance. Since annoyance is a mental faculty of a person, therefore it has to be derived from the facts and circumstances of the case. In other words, the facts and circumstance has to be considered in order to conclude whether the act caused any annoyance or no.

Now, with regard to the concept and meaning of the word ‘obscene’, it keeps varying from place to place. It differs in accordance to the circumstances- cultural, social and economical. In the Indian context, even kissing in public place by a married couple is considered to be obscene, and the persons doing so can be charged with doing indecent act in public place.[10]  Whereas the same act in western countries is absolutely acceptable. Where the accused addressed openly two respectable girls who were strangers to him, in amorous words suggestive of illicit sex relations with them and asked them to go along with him on his rickshaw, he was held to have committed an obscene act.[11]

Further in the case of K.P Mohammad v. State of Kerala[12], the court held that the performance in a public place, such as hotel and restaurant of cabaret dance and devoid of nudity and obscenity judged according to the standards of our country, is permissible and is not in any way liable to be banned. This judgement shows a very controversial stand quite contrary to the general belief held by the people of our country. However, the same view was held by the Bombay HC in a judgement in April 2005, when they quashed the proceedings against a dance bar owner ruling that section 294 IPC would be attracted only when annoyance is caused to others.[13]

 

ANALYSIS

If we analyze the definition of the term sexual harassment, we find that the key ingredients covered under the definition have been dealt under section 294 and section 509 of the IPC. The definition of sexual harassment talks about ‘sexually coloured remarks’ and ‘pornography’.   Now this sexually colored remark can either be verbal or non- verbal. This gets covered under section 294, as the section talks about any ‘song’(verbal) or ‘act’(non-verbal) which are obscene. Obscenity comes in various forms- by way of talking or by gestures. Obscenity also comes in through pornography, which is an element of sexual harassment. This is how section 294 covers the offense of sexual harassment.

Section 509 specifically talks about infringing the modesty of women. If seen in general parlance then sexual harassment of a woman directly infringes the modesty of a woman. This harassment can come in the form of ‘words’, ‘gesture’, ‘act’ or ‘exhibit’ of objects. This gets covered by section 509.

Thus, the two sections cover the offense of sexual harassment of woman.

However, the two sections have a key loophole with reference to the punishment. Section 294 prescribes punishment for 3 months at maximum. Section 509 prescribes simple imprisonment for maximum of one year. However, seeing the present scenario of India, where the offense of sexual harassment has increased by leaps and bounds, and the offenders managing to escape the liability because of such meager punishment, we cannot afford to stay with such reformative punishment. Rather, steps need to be taken to enhance rigorous punishment which will have deterrence effect on the future offender.

CONCLUSION

After going through  the project, we reach to a conclusion that the both the sections and their elements need to be given a broader interpretation in order to deal with rising offence of sexual harassment of woman. With the degradation of the Indian society, both the sections should be enforced and applied so as to create a deterrence effect on the society.



[1]Vishaka and ors v. State of Rajasthan JT 1997 (7) SC 384

[2] Section 509 IPC criminalises a ‘word, gesture or act intended to insult the modesty of a woman’ and in order to establish this offence it is necessary to show that the modesty of a particular woman or a readily identifiable group of women has been insulted by a spoken word, gesture or physical act as held in S. Khushboo Vs. Kanniammal and Anr (AIR2010SC3196)

[3]  AIR 1963 P H 443

[4] (2004)1GLR168

[5] http://articles.timesofindia.indiatimes.com/2007-03-21/india/27870988_1_modesty-outraging-definition

[6]http://www.lawyersclubindia.com/articles/Sexual-harrasment-under-India-penal-code-1860-A-critical-analysis-3067.asp#.UWqe56JHJLw

[7] 2006 (1) KLT 249

[8]http://www.prsindia.org/uploads/media/Justice%20verma%20committee/js%20verma%20committe%20report.pdf

[9] http://mha.nic.in/pdfs/criminalLawAmndmt-040213.pdf

[10]   Times of India, December 22,2005 , p.8

[11] Zafar Ahmad, AIR 1963 All 105

[12]   1984 CrLJ 745

[13] Supra, see footnote 9

FIR:At a glance from the view point of Indian Evidence Act, 1872

logoFIR:At a glance from the view point of Indian Evidence Act, 1872

(Author: Debaditya Roy)

 

What is FIR?

The expression ‘FIR’ is the abbreviated form of First Information Report. “First Information” or “First Information Report” is not defined in Criminal Procedure Code, 1973, but these words are always understood to mean an information recorded U/s-154 (1) of Cr.P.C.

It is the information given to a police officer in the form of a complaint or accusation regarding the commission of or suspected commission of a cognizable offence. FIR is the information which is given to the police first in point of time on the basis of which the police may select ad record as First Information [AIR 1975 SC 1453].

FIR is the first step of Criminal Procedure that leads to the trial and punishment of a criminal. It is also the most important supportive evidence on which the entire structure of the prosecution of the case is built up.

The object of FIR is to set the criminal law in motion. It enables the police Officer-in-Charge of the police station to initiate the investigation on the crime and to collect evidence as soon as possible. This report forms the foundation of the case.

 

Object of FIR :-

The objects of FIR can be summarized as follows –

a)     To set the criminal law in motion.

b)    To inform the magistrate of the district and the District Superintendent of the Police who are responsible for peace and safety of the district about the offence reported at the station.

c)     To inform the judicial officers before whom the case is ultimately tried about the facts given out immediately after the occurrence and the materials on the basis of which the investigation was initiated.

d)    To safeguard the accused against subsequent variations or additions.

e)     To obtain information about the alleged criminal activity in order to take suitable action for tracing and bringing the guilty party.

 

Sec.154(1) of Cr.P.C.:-

(1) Every information relating to the commission of a cognizable offence, if given orally to an Officer-in-Charge of a police station—–

i)   shall be reduced to writing by him or

ii)   shall be reduced to writing under his direction

iii)    shall be read over to the informant

(2) Every such information, whether given in writing or reduced to writing as aforesaid, shall be signed by the person giving it and

(3) the substance thereof shall be entered in a book to be kept by such officer in such form as the State Govt. may prescribe in this behalf.

 

Conditions required for recording FIR u/s-154 Cr.P.C. :-

The following conditions should be satisfied to constitute an information as First Information Report within the meaning of Sec.154 (1) of Cr.P.C.:-

1)    It must be the information relating to the commission of a cognizable offence.

2)    It must be given to an Officer-in-Charge of a police station.

3)    It must be put into writing. If it is already written, it has to be signed by the person giving it.

4)    If it is orally made, it must be taken down in writing and read over to the informant.

5)    The substance of the information shall be entered in the prescribed register (General Diary or Station Diary).

 

This article emphatically contains the significance of FIR from the view point of Indian Evidence Act.

Evidentiary value of FIR 

  • FIR—a public document:-

FIR is a public document prepared u/s-154 of Cr.P.C. A certified copy of an FIR can be given in evidence. A copy of the FIR can be given to the accused only under the order of the court after the court has taken cognizance of the case and not before. But the accused can get a copy of the FIR on payment of adequate fees from the court. The Officer-in-Charge of the police station is not authorized to give the copy of FIR to the accused. If he does so, he will be liable U/s-29 of the Police Act, 1961.

 

  • Statements made in FIR are not privileged:-

The statements made in the FIR are not privileged. They do not enjoy immunity. If the statements made in the FIR is found to be defamatory in nature, the maker of the FIR is liable to be prosecuted. The privilege can be claimed if the informant can bring such statement under the purview of the Exception-8 of Sec.499 of I.P.C. to show that he made the statement in good faith.

 

  • Use of FIR for corroboration or contradiction:-

FIR is not a substantive evidence. It can be used to corroborate the informant U/s-157 of Indian Evidence Act or to contradict him U/s- 145 of Indian Evidence Act, if the informant is called as a witness at the time of trial.

 

Sec.157 of I.E.Act:-Former statements of witness may be proved to corroborate later testimony as to same fact:-

In order to corroborate the testimony of a witness, any former statement made by such witness relating to the same fact at or about the time when the fact took place, or before any authority legally competent to investigate the fact, may be proved.

 

Sec.145 of I.E. Act:-Cross-examination as to previous statements in writing:-

 A witness may be cross-examined as to previous statements made by him in writing or reduced into writing and relevant to matters in question, without such writing being shown to him or being proved; but if it is intended to contradict him by the writing, his attention must, before the writing can be proved, be called to those parts of it which are to be used for the purpose of contradicting him.

 

FIR can’t be used for corroborating or contradicting any witness other than the person who has lodged the FIR [Hasib v. State of Bihar (1972) 4 SCC 773; Damodar Prasad v. State of Maharashtra AIR 1972 SC 622]

 

FIR can be used by the defence to impeach the credit of the person who lodged the FIR U/s-155(3) of I.E.Act.[Shanker v. State of U.P. AIR 1975 SC 757]

Sec.155 of I.E.Act:- Impeaching credit of witness:-

The credit of a witness may be impeached in the following ways by the adverse party or with the consent of the court by the party who calls him:-

1)      By the evidence of persons who testify that they, from their knowledge of the witness, believe him to be unworthy of credit;

2)      By proof that the witness has been bribed or has baacpeted the offer of a bribe or has received any other corrupt inducement to give his evidence;

3)      By proof of former statements inconsistent with any part of his evidence which is liable to be contradicted;

Explanation— A witness declaring another witness to be unworthy of credit may not, upon his examination-in-chief, give reasons for his belief, but he may be asked his reasons in cross-examination, and the answers which he gives can’t be contradicted, though, if they are false, he may be afterwards be charged with giving false evidence.

 

FIR can be used to contradict only the maker of informant who lodged the FIR under sections-145 and 155 of I.E.Act, but not the other witnesses ——– [Nisar Ali v. State of U.P. 1957 CrLJ 550 SC; Aghnoo Nagesia v. State of Bihar 1956 CrLJ Pg 100 SC]

 

  • Value of FIR lodged by the accused:-

 

If the FIR is given to the police by the accused himself, it can’t be used wither for corroboration or contradiction because the accused can’t be used as a prosecution witness and he would very rarely offer himself to be a defence witness U/s-315 of Cr.P.C.

If the FIR is of a confessional nature, it can’t be proved against the accused-informant, because according to Sec.25 of I.E.Act, no confession made to a police officer can be proved as against the accused person.

But the FIR made by the accused becomes relevant under the following cases:-

 

(1) The FIR lodged by the accused may be relevant U/s-8 of I.E.Act as his conduct.

 

Sec.8:- Motive, preparation and previous or subsequent conduct:-

Any fact is relevant which shows or constitutes a motive or preparation for any fact in issue or relevant fact.

The conduct of any party, or of any agent to any party, to anysuit or proceeding, in reference to such suit or proceeding, or inreference to any fact in issue therein or relevant thereto, and the

conduct of any person an offence against whom is the subject of anyproceeding, is relevant, if such conduct influences or is influencedby any fact in issue or relevant fact, and whether it was previous orsubsequent thereto.

Explanation 1.—The word “conduct” in this section does notinclude statements, unless those statements accompany and explain actsother than statements; but this explanation is not to affect therelevancy of statements under any other section of this Act.

Explanation 2.—When the conduct of any person is relevant, anystatement made to him or in his presence and hearing, which affectssuch conduct, is relevant.

 

(2) If the FIR lodged by the accused is non-confessional, it may be admissible in evidence against the accused as an admission U/s-21 of I.E.Act regarding certain facts.[Nisar Ali v. State of U.P. 1957 550 SC]

 Sec.21:-Proof of admissions against persons making them, and by or on their behalf.-

Admissions are relevant and may be proved as against the person who makes them, or his representative in interest; but they cannot be proved by or on behalf of the person who makes them or by his representative in interest, except in the following cases:-

(1) An admission may be proved by or on behalf of the person making it, when it is of such a nature that, if the person making it were dead, it would be relevant as between third persons under section 32.

(2) An admission may be proved by or on behalf of the person making it, when it consists of a statement of the existence of any state of mind or body, relevant or in issue, made at or about the time when such state of mind or body existed, and is accompanied by conduct rendering its falsehood improbable.

(3) An admission may be proved by or on behalf of the person making it, if it is relevant otherwise than as an admission.

 

(3) If the FIR is confessional in nature, certain portion of such FIR lodged by the accused can be used against him if it leads to the discovery of a fact within the meaning of Sec.27 of I.E.Act.[Agnou Naagesia v. State of Bihar 1966 CrLJ 100 SC]

Sec.27:- How much of information received from accused may be proved.-

Provided that, when any fact is deposed to as discovered inconsequence of information received from a  person accused of any offence, in the custody of a police-officer, so much of such information, whether it amounts to a confession or not, as relates distinctly to the fact thereby discovered, may be proved.

 

  • FIR and Dying Declaration:-

 

In case of death of the informant, FIR can be used as substantive evidence if it relates to the cause of death of the informant or the circumstances of the transaction resulting in the informant’s death within the meaning of Sec.32 (1) of I.E.Act.                                 [Damodar Prasad v. State of U.P. AIR 1975 SC 757]

Sec.32(1) :- Cases in which statement of relevant fact by person who is dead or cannot be found, etc., is relevant.

When it relates to cause of death.-

(1) When the statement is made by a person as to the cause of his death, or as to any of the circumstances of the transaction which resulted in his death, in cases in

which the cause of that person’s death comes into question,

Such statements are relevant whether the person who made them was or was not, at the time when they were made, under expectation of death, and whatever may be the nature of the proceeding in which the cause of his death comes into question.

 

In no other case FIR can be used as a substantive evidence. FIR lodged by the deceased is admissible U/s-32(1) as the statement of a person since deceased relating to the circumstances of the transaction which resulted in his death.

Kapoor Singh v. Emperor (AIR 1930 Lahore 450)

A FIR can be treated as a dying declaration if the informant dies of his injuries after lodging the report to the police

Munna Raja v. State of M.P. (AIR 1976 SC 2199)

In the case of Munna Raja v. State of M.P. (AIR 1976 SC 2199) Munna Raja and Chottan were tried by the Sessions Judge, Chattarpur on the charge that at about 10 a.m. on April 30th 1969 they committed murder of one Bahadur Singh. Two eye witnesses were turned hostile and learned Sessions Judge thought that it was unsafe to rely on their testimony. In this case there were three dying declarations made by the deceased Bahadur Singh and the prosecution placed great reliance on them. The Sessions Court was also impressed by three dying declarations given by the deceased Bahadur Singh, but finally the accused persons were acquitted by the Sessions Court.

The Supreme Court held that the judgment of the Sessions Court suffers from a patent infirmity because it wholly overlooks the earliest dying declaration which was made by the deceased soon after the incident. The Second dying declaration is the FIR lodged by the deceased at the police station. Probably the Sessions Court assumed that since the statement was recorded as an FIR, it could not be treated as a dying declaration. On the basis of such assumption the Sessions Court committed an error.

The Supreme Court also observed that after making the statement before the police the deceased Bahadur Singh succumbed to his injuries and therefore the statement can be treated as a dying declaration and is admissible U/s-32(1) of Indian Evidence Act. 

It was also held that the statement was made by Bahadur Singh at the police station by way of FIR. After recording the information the investigation was commenced and therefore it is wrong to say that the statement was made to an investigation officer. The Station House Officer who recorded the statement did not possess the capacity of an investigation officer at the time of recording the statement.

 

If the complainant who had been belaboured died a natural death and not because of the injuries caused to him, Sec.32(1) is not applicable.   [Umrao v. State of M.P. AIR 1961 MP 45]

 

When an FIR is lodged by the deceased clearly implicating the accused and containing the details of the incident, the same could be used as a dying declaration.  [Pancham Yadawa v. State of U.P. 1994 CrLJ 848 (All)]

 

If the informant disappears after filling an FIR and there is no proof of his death, it is not admissible.

The injured died during the trial. The FIR lodged by him was treated as a dying declaration but the prosecution made no effort to establish the cause of his death or the connection between the death and injuries in question. The time of his death was unknown. The statement in FIR was held to be not admissible as dying declaration.

[Sukhar v. State of U.P.  (1999) 9 SCC 507]

 

A dying declaration was recorded by a sub-inspector in the nature of an FIR but it was not attested by the doctor to the effect whether the injured was conscious or not. The signature or thumb impression of the deceased was also not taken. The dying declaration in the FIR was held to be highly doubtful.    [Maniram v. State of M.P. AIR 1994 SC 840]

  

  • Death of the Informant and Value of FIR:-

 

There is no law which provides that the FIR can’t be taken into consideration on the death of the informant. FIR can’t be thrown out on the death of the informant. The case needs to be proved on the basis of evidence collected by the prosecution during the course of investigation. FIR is not an evidence in a case, it is only a piece of informant with the police records with which the system comes into motion.

 

FIR is only used for corroboration or contradiction if the complainant is examined. In a case where the first informant died before he could depose in the court, the purpose of corroborating or contradicting its contents by the person, would not be possible. In view of this, the accused could not cross examine the first informant and the other pieces of evidence which are produced in the court can be looked into. As the FIR is not a substantial piece of evidence, it should not have any effect on the prosecution case it its contents are not proved by the person who gave it due to his death.     [E.J.Goud & others v. State of A.P. 2004 (2) ALD (CRL)241 (AP)]

 

In the case of Hakirat Singh v. State of Punjab [AIR 1997 SC 323], the Supreme Court held that non-examination of the complainant on account of his death could not be factual on its own to the prosecution case and it will depend on the facts of each case. If the prosecution story as revealed by the witnesses in the court is directly contradictory to the contents of FIR, it mayhave one effectand on the other hand if the contents of FIR are in conformity with the evidence during the trial, it may have all together a different effect.

  • Difference between FIR & Actual Evidence tendered in the Court:-

 

If there is a difference between FIR and the version narrated in the court, it is always a matter of grave suspicion to the court. If certain important facts are not mentioned in the FIR and they are brought to the court subsequently as substantial evidence, the court would be right in disbelieving that part of evidence.

There is no consequence on account of minor discrepancies between the statement mentioned in FIR and the statements appearing in the evidence of eye-witnesses.

 

If the facts stated in the FIR are based on hearsay, much importance can’t be attached to the discrepancies found therein. The statements mentioned in the FIR which are given in many cases under the circumstances of haste and without proper knowledge of true facts, ought not to be reviewed too narrowly.

 

  • Defence and Cross-examination of FIR:-

 

Before conducting the cross-examination the original complaint and FIR has to be studied carefully. The following points of FIR must be examined thoroughly for the purpose of cross-examination —-

i)      The date and time of lodging the FIR to the police officer

ii)      Name of the complainant

iii)      Name of the police officer who recorded the complaint

iv)      Date and time of dispatching the FIR from the police station to the Magistrate

v)      Date and time of receiving the FIR by the Magistrate

vi)      Time when the copy of FIR was given to the informant

 

During the cross-examination the defence may vary the nature and facts of the case according to the circumstances. The following points have to be examined carefully by the defence during cross-examination :-

1)       Delay in lodging the complaint

2)       Delay in recording the FIR

3)       Delay in dispatching the FIR by the police officer to the Magistrate

4)       Recording the FIR by an incompetent police officer

5)       FIR whether signed by the informant

6)       FIR recorded on the basis of telephone or telegram messages

7)       The substance of an FIR whether entered in the General Diary

8)       The original information given to the police officer whether suppressed or not

9)       Whether the police officer recorded the FIR after commencement of investigation

10)  Omission of the names of the accused persons and witnesses, place of occurrence etc.

11)  Whether FIR was vague

12)  Any serious discrepancy between FIR and the evidence produced by the witnesses in the court

13)  Contradiction in the statement of the informant in the FIR and the statement made in the court

 

  • Proving of FIR

 

a)     FIR is a document and it has to be proved like any other document.

b)    The informant must be produced in the court during the trial and must be examined by the prosecution and cross-examined by the defence.

c)     FIR should be marked as an exhibit.

d)    When the maker of the FIR is examined in the court, but such FIR is not tendered  by the prosecution in accordance with the Indian Evidence Act, the court is debarred from relying on the FIR.

——- [Damodar Prasad Chandrika Prasad & others v. State of Maharashtra  AIR 1972 SC 622]

 

  • FIR admitted in evidence by the consent of defence becomes part of prosecution evidence:-

 

It is a settled law that FIR is not a substantive evidence. It can be used only to contradict the maker or for corroborating his evidence and also to show that the implication of the accused was not an afterthought.

In the case of  Malkiat Singh Vs State of Punjab[1991 SCC (Criminal)976],the examination of the first informant was dispensed with by the consent of the defence and the FIR became part of the prosecution evidence u/s 11 of the Indian Evidence Act read with Sec.6. The facts stated in such FIR that P.W.4 was not in speaking condition, would be used only as  a relevant fact of prior existing state of facts in issue as res-gestae of the earliest information.

 

Conclusion:-

It may be submitted that from the view points of law of Evidence, FIR has a great significant role in each criminal litigation.  FIR, being an information first in point of time, is a valuable piece of evidence in any criminal trial either for corroborating evidence or for contradicting witnesses. Therefore, it is necessary that FIR must be recorded in all circumstances especially where the person has arrived in the police station to lodge an FIR against a particular crime. If a FIR is duly recorded,it may provide a valuable evidence in a criminal case. Suchinformation should be lodged with the police as soon as a person comes to know as to the commission of an offence. Apart from prevention of crimes andmaintenance of law and order in the society, FIRmay also lead to successful conclusion of a criminal trial.

Death Penalty: An analysis

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INTRODUCTION

Death as a penalty servesa deterrent as well as retributive form of punishment.The retributive aspect of the punishment is meant to gratify the instinct of revenge or retaliation which exists not merely in the individual wronged, but also by way of sympathetic extension in the society at large. People will not be disposed to resort to private revenge if they can have the offender brought to book and adequately punished for his crime through a court of Law, Punishment of the wrong-doer is the vengeance of the wronged, and this reinforces the faith of the people in the administration of justice. If people can get away after committing serious crimes by being awarded light punishments, it may induce the person wronged and his friends and sympathizers to resort to private vengeance which is not at all desirable for maintaining peace and order in society.In the words of (Salmond) “A society which felt neither anger nor indignation at outrageous conduct would hardly enjoy an effective system of law”, ‘Kant’ considered death as a proper punishment, if the criminal was beyond redemption, ‘Hobbes’ asserted that every man had under the natural order has the right of reprisal for wrongs done to himself or anyone else.Bentham’s theory of penal objectives also provides that pain of offender should be higher than pleasure he enjoys by commission of the crime.

As, Crime has rightly been described an act of warfare against the community touching new depths of lawlessness,the object of imposing deterrent sentences is threefold:

1)      To protect the community against callous criminals for a long time.

2)      To administer as clearly as possible to others tempted to follow them into lawlessness on a war scale if they are brought to and convicted, deterrent punishment will follow, and

3)      To deter criminals who are forced to undergo long-term imprisonment from repeating their criminal acts in future. Even from the point of view of reformative form of punishment “prolonged and indefinite detention is justified not only in the name of prevention but cure. The offender has been regarded in one sense as a patient to be discharged only when he responds to the treatment and can be regarded as safe for the society.

Being a human we consider Life is the most wonderful gift that God gives us. He also gives us the power to do what we wish with that life. We can keep it and guard it, or we can take it away. It follows that murder is the worst crime anyone could ever commit. It is a crime that no one can ever make right because once you take a life away you can never give it back. Penalties exacted from criminals are made to fit the crimes committed. The worst crime possible should therefore receive the worst penalty possible. That penalty is the death penalty. A killer who is a perpetrator of other’s right to live can’t claim to have an inviolable right to live. The focus should be on the mischief flowing from what the criminal has done to his victim and those near and dear to him and greater attention be paid to victim logy and therefore to the retributive aspect of punishment.The Origin of Death Penalty can be traced back to Eighteenth Century B.C. in the Code of King Hammaurabi of Babylon, which codified the death penalty for 25 different crimes.The death penalty was also part of the Fourteenth Century B.C.’s Hittite Code, the SeventhCentury B.C.’s Draconian Code of Athens, which made death the only punishment for all crimes,and the Fifth Century B.C.’s Roman law of the Twelve Tablets. Death sentences were carriedout by such means as crucifixion, drowning, beating to death, burning alive, and impalement.In the Tenth Century A.D., hanging became the usual method of execution in Britain. Bythe 1700s, 222 crimes were punishable by death in Britain, including stealing, cutting down atree, and robbing a rabbit warren. Because of the severity of the punishment of death, manyjuries would not convict defendants if the offense was not serious. This led to reforms ofBritain’s death penalty. From 1823 to 1837, the death penalty was eliminated for over 100 of the222 crimes punishable by death. (Randa, 1997) In the early part of the nineteenth century, many states reduced the number of their capital crimes and built state penitentiaries. In 1834, Pennsylvania became the first state to move executions away from the public eye and carry them out in correctional facilities. In 1846, Michigan became the first state to abolish the death penalty for all crimes except treason. Later, Rhode Island and Wisconsin abolished the death penalty for all crimes. By the end of the century, the world would see the countries of Venezuela, Portugal, Netherlands, Costa Rica, Brazil and Ecuador follow suit (Bohm, 1999 and Schabas, 1997).

 

PRESENT SCENARIO

The issue of death penalty has been debated, discussed, studied from a prolonged time but till now no conclusion can be drawn about the retention or abolishment of the provision. As above mentioned Death penalty has been a mode of punishment from time immemorial which is practiced for the elimination of criminals and is used as the punishment for the heinous crimes.In many countries the death penalty is dropped and is replaced by life imprisonment.Various countries have different outlook towards crime in different ways. In Arab countries they choose the retributive punishment of “an eye for an eye” others have deterrent punishment. Of late there has been a shift towards restorative and reformist approaches to punishment, including in India. The International movement for the abolition of capital punishment came in vogue only after the Constitution of Universal Declaration of Human Rights, 1948. According to Article 3 of UDHR, imposition of death penalty is in conflict with the ‘Right to Life’ which is the basic human right. The efforts have been made by the General Assembly of United Nations since 1959 towards the promotion of respect for right to life and desirability of abolishing capital punishment. Many international instruments, most notably the International Covenant on Civil and Political Rights prohibit the imposition of Death Penalty. One of the major steps towards achieving the goal of abolishing death penalty is the adoption of second optional protocol to the International Covenant on Civil and Political Rights on 15th Dec. 1989 by the General Assembly with the help of the Human Rights Commission. The optional protocol aims at the abolition of the Death sentence as a punishment. Similarly, a protocol to the American Convention on Human Rights to abolish Death Penalty was concluded in 1990. Recently, in December 2007, the United Nations has introduced a moratoriumon execution with a view to abolish Death Penalty. More than two-third of the countries in the world have now abolished the death penalty in law or practice.In India the present position regarding death sentence is quite a balanced one. But the wide judicial discretion given to the court has resulted into enormously varying judgment, which does not potray a good picture of the justice delivery system. What is needed to be done is that the principle laid down in cases like Bachan Singh or Machhi Singh have to be strictly complied with that is the death penalty must be awarded only in ‘rarest of rare cases’ and for ‘special reasons’Though what constitutes a ‘rarest of rare case’ or ‘special reasons’ has not been answered either by the legislature or by the Supreme Court. However, the application of its principles by the courts to various cases before them has been very uneven, and inconsistent. This has naturally led to the criticism that the jurisprudence suffers from a judge-centric approach, rather than a principles-centric approach. The Supreme Court has itself admitted on several occasions that there is confusion and contradiction in the application of the death penalty. Last year, 14 eminent retired judges wrote to the President, pointing out that the Supreme Court had erroneously given the death penalty to 15 people since 1996, of whom two were hanged. The judges called this “the gravest known miscarriage of justice in the history of crime and punishment in independent India”.

The opinion of Justice Ruth Bader Ginsburg, (U.S. Supreme Court) targeting the Indian Legal system based on the political power, “I have yet to see a death case among the dozen coming to the Supreme Court on eve-of-execution stay applications in which the defendant was well represented at trial… People who are well represented at trial do not get the death penalty.” Just over four years ago, AjmalKasab walked into Mumbai’s ChatrapatiShivaji Terminus railway station and ‘waged war with India’. He reportedly told police he wanted to replicate 9/11 in India. He was prosecuted, convicted and, on 21 November, executed by the Indian Government. Many death row convicts signed a petition that was presented to the President of India under Article 72 of the Constitution that appealed to his power to grant mercy to a convict after the Supreme Court has confirmed the death sentence. As an appeal for mercy, the petition did not rely on substantive legal grounds or due process. The events leading up to the execution strengthen the view that the due process guarantee of the Indian legal system cannot protect prisoners from the lottery based on poverty, class, caste geography and prosecutorial independence that the death penalty continues to be.

 

CONCLUSION

Death sentence must fulfill the conditions for protection of human rights in Criminal Justice Administration in India. In European countries the agitation against capital punishment started with criminologists Jeremy Bentham and J.S. Mill’s writings for due punishment; who maintained that punishment must be just, adequate, fair, reasonable and proportionate to the crime to achieve the goal and should never be excessive.

The execution of death row prisoners in India might have come to a near standstill, with only one in the last decade, and another recently. Yet, the frequency of confirmation of death sentences by the Supreme Court has created a large pool of death row prisoners in the country, who may be living between life and death constantly for many years, till the executive decides on their mercy petitions. When the Supreme Court time and again admits that many of these prisoners might have been sentenced on the basis of erroneous legal precedents set by it, the executive cannot pretend to be unconcerned.Due to arbitrary and discriminatory decisions and unjust procedures, basic rights of accused are violated in inhuman and brutal manner which are not only contrary to the National Human Rights principles envisaged in the Constitution but also contrary to the Universal Human Rights ethos. In order to serve as a just and effective mechanism for administration of justice to all sections of society, law should be nourished by and nurtured in human rights.


Organised Vs Un Organised Child Labourers

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Organised Vs Un Organised Child Labourers

 

Author: DR. SHAILESH N HADLI.

BAL,LLB, LLM, PhD.

RNPI School of Law & Justice

We are guilty of many errors and many faults but our worst crime is abandoning the children, neglecting the fountain of life, many of the things we need can wait, The Child cannot. Right now is the time his bones are being formed, his blood is being made and his senses are being developed, to him we cannot answer tomorrow his name is today…” Gabri A Mistral.

Existence of child labour can be traced from long decade but the labour to the child was utilised in a minimum and the limited manner. But as a result of Industrial Revolution it took the worst ever turn which we can find till the present date. During the Industrial Revolution, children as young as four were employed in production under factories with dangerous and often fatal, working conditions. Based on this understanding of the use of children as labourers, it is now considered by wealthy countries to be human rights, and is outlawed, while some poorer countries may allow or tolerate child labour. Child labour can also be defined as the full-time employment of children who are under a minimum legal age.

The problem of child labour is very common in almost every country when compared to the other countries India continues to host the large number of child labourers in the world today. According to the Census, there were more than 12.7 million economically active children in the age-group of 5-14 years. Census data shows that there is a decline in the absolute number as well the percentage of children (5-14) to total population in that age group.

Broadly speaking the child labourers can be classified into two categories as Organised sector Child Labours and Un organised sector Child Labours. Organised sector child labour are those children who are below the age of 14 years and working under some organised establishment like factories, mines, Shops and establishments, Plantations, stone crushers, Brick industries, beedi and cigar manufacturing industries, cracker industries and any work place which is coming under the definition of Industries small scale or large scale, where in Un Organised child Labours don’t have any definition of its own. In simple words any person below the age of 14 years does any work for the earning or helping for the earning of his family other than as defined in the Organised Sector is considered to be child labour under Un Organised Sector. For example Rag pickers, Supplying and cleaning tea glasses, beggars, helping the parents in farm land and cattle rearing, selling papers, flowers fruits, snacks at bus stands and doing other odd jobs which distract them from going to school.

From various studies conducted by the researchers it has come to light that very often the children found in the juvenile homes are from the un-organised sectors. The reason is that these children start working from the very young age of about 5 to 6 years and start earning money. When the money comes to their hands they try to keep some of the amount with them for their personal needs and rest is given away to the family members as the time passes the their personal needs increases and the amount paid to their family members goes lower than their own requirements. Due to the money in hands the children get addicted to bad habit like smoking eating gutkas and at last drinking and many more. By the time they reach the age of 12 to 13 they become the master of all the bad habits and the income generated by them is not sufficient for themselves and they try to do something where in the easy money can be generated and at last get into the trouble landing in juvenile homes. Female child workers are also in plenty in numbers they take their siblings of 1 to 2 years of age and beg for the money to create sympathy. And some people try to exploit them by luring the money and slowly and gradually are forced towards the prostitution.

No doubt the Government of India is working hard to eliminate the concept of Child labour from India and with regard to the same has passed many legislations for the protection of the children in organised sector, for example provision under Indian Constitution, Children [Pledging of Labour] Act (1933), Employment of Children Act (1938), The Bombay Shop and Establishments Act (1948), Child Labour -Prohibition and Regulation Act, The Indian Factories Act (1948), Plantations Labour Act (1951), The Mines Act (1952), Merchant Shipping Act (1958), The Apprentice Act (1961), The Motor Transport Workers Act (1961), The Atomic Energy Act (1962), Bidi and Cigar Workers (Condition of Employment) Act (1966), State Shops and Establishments Act, Child Labour and Probhition Act 1986 and others (Proposed Child Labour and Adolescent Act 2012), But the fact remains is the existing of child labour in organised and un-organised sectors.

The ambitious plan of right to education included under the Indian Constitution can be achieved only when the organised and un-organised child labourers find their places in school rather than at the work place. The act of the Government to provide mid day meal is an benevolent act but it is insufficient as some of the working children have responded in the negative sense, stating that what if I get one time food and all other aged persons depended on me are hungry whole day and the amount I receive per day from work can make my family more happy.

Considering all the things the Government has approved the (Child Labour and Adolescent Act) increasing the age limit from 14 years to that of 16 years and making it compulsory for every children to go to school and at the same time the fine and the imprisonment has been drastically increased to Rs 50000/- and 3 years imprisonment. But unfortunately again left the agricultural labour untouched, by stating the children who support their parents in their parental (family) activities of business are not governed by this laws. This clause makes the difference between organised and un-organised sector. It is commonly seen in the rural areas of our country the presence of the students’ increases in the class/school at the time of distribution of free food and after that there will be hardly few students in the school and at the time of harvesting season the children are not at all going to schools. The Cost of living has drastically increased and due to the urbanisation and mordanisation the agricultural lands are shrinking and the cost of the agricultural activity is increasing day by day. The agricultural labourers are shifting towards the city looking for better life and employment as a result there is an acute shortage in the agricultural labourers. Under these circumstances the people doing agricultural activities are in demand and to fulfill the said demand the children are forced to take up the activity for quick money. This is the Rule of Land DEMAND AND SUPPLY.

The present proposed act Child labour and Adolescent Act  is the beneficial act whose scope is limited only to the urban population and it will be effective if the act is strictly implemented in accordance and if not done so then it will become the law limited only to the papers.

But what about the Un-Organised Child labourers where there is no proper definition about the same and what the Government of India had done for them is the big question mark. The main reason for the not making the law for this sector is these are small term labourers who groom up in no time and disappear in no time.

The main reason for not able to eradicate the child labour is the Poverty. Approximately about 25% of the Indian population leaves below the poverty line, and other major problem is the illiteracy. When we overcome these two major problems then the problem of the Child Labour will automatically perished from India.

No doubt there are many laws for the prohibition of child labourers but still it continues why? The reason is the lack of strict implementation of the existing laws. Laws are not framed to show to the world and the people that we too have the laws; the real meaning will be achieved by the strict and proper implementation of the same.

Majority of the Un-Organised Child Labourers work under the prohibited areas of work where their exist the prohibition of Child labour for example the Mouffesal bus stands, and private bus stands, Traffic signals, Railway Signals, busy places of the city and agricultural lands etc; When there are authorities for the implementation of the prohibition of child labourers then why theses authorities keep quite and allow them to grow.

The government shall strictly implement the laws in the organised sectors and see to it that the un-organised child workers does not erupt at all. As there are the governments authorities spread all over the states why they themselves cannot take steps to restrict the child workers and if some one is negligent as a result the child worker is found then why action should not be taken on such authorities. For eg Depot Manager for bus stands, Traffic police in charge for the traffic signals, railway gate in charge for the railway signals, and the Police personal on duty for the other unorganized child labourers. The person encouraging the Child labour shall be strictly dealt with the laws of the land and shall be imposed heavy fine along with the imprisonment. Then only we can remove the child labour in Organised as well as     Un Organised sectors.

“If we do not prepare children to become good citizens, if we do not develop their full capacities, if we do not enrich their minds with knowledge then our republic will go down to destruction and mankind will be swept through a vast cycle of sin and suffering before the dawn of better era can arise upon the world”

 

 

MANUFACTURERS LIABILITY

logoMANUFACTURERS LIABILITY – Case Developments in UK,USA and INDIA

 

The Types of Defects and Liability of Manufacturers

Product Liability Law (Defective Products Law) falls under personal injury/tort law. It refers to the claims against any parties along the chain of manufacture (designers, manufacturers, distributors and retailers) of products which have defects that harm consumers causing injury or loss. Most defective products belong in one of three categories. These categories are:
1> Design defect – This occurs when the basic design of a product is inherently flawed–recognized easily because they usually affect all of the products in a line, rather than just some of them.

2> Manufacturing defect – This occurs when a product is designed well, but someone makes an error while constructing it. One example is an electrical product that has been built with faulty wiring. Unlike design defects, manufacturing defects may only affect some of the items in a line.

3> Marketing defect – This occurs when a defect lies not with the product, but with the way it is sold. For example, a children’s toy with an incorrect age recommendation on its packaging has a marketing defect.

 

The Earlier Scenario

Earlier the entire concept of manufacturer’s liability was very restricted. In England and the USA, in the early and middle 19th century, it was generally held that a duty of care was only owed where a contract existed between two parties. Winterbottom v. Wright [1842], an English case, set the stage for early U.S. law upholding the privity requirement. In that case, a coach company contracted with the Postmaster General to provide coaches for the mail service and to take responsibility for the maintenance of the coaches. The plaintiff, hired by the Postmaster General to drive the coach and deliver the mail, was subsequently injured when the coach collapsed as a result of poor maintenance. The plaintiff sued the coach company. The court held that the driver could not recover from the coach company because the plaintiff was not a party to the contract for maintenance between the coach company and the Postmaster General. Until the early 20th Century, courts in the UK had been ruling with respect to the parties to the contract and not an outsider. With the inception of the concept of the ‘neighbour’ in the cause célèbre Donoghue v. Stevenson, the rights of the injured party(s), though not contractually related, received cognizance. In this case, Judge Atkins explained the concept of neighbour citing the reference from the parable of the Good Samaritan.  The speech of Lord Atkin is the cynosure of this case which basically states that “ ‘persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions that are called in question’…‘a manufacturer of products, which he sells in such a form as to show that he intends them to reach the ultimate consumer in the form in which they left him with no reasonable possibility of intermediate examination, and with knowledge that the absence of reasonable care in the preparation or putting up of products will result in an injury to the consumer’s life or property, owes a duty to the consumer to take that reasonable care.’ The case whose importance was not more recognized was MacPherson v. Buick Motor Company [1916], wherein, Judge Cardozo, in doing away with the privity concept, stated that, duty of care extended to ultimate consumers under two necessary criteria: first, the nature of the product must be such that it is likely to place the life and limb of a person in danger if negligently made. This knowledge of danger must be probable, not merely possible. Second, there must be knowledge that in usual course of events, the danger will be shared by people other than the buyer. The court in Donoghue v. Stevenson had referred to the above mentioned case which, in many respects, is a landmark case that established duty of care beyond the limit of contractual obligations.

The Present Scenario

Case laws have progressed on the lines of holding the manufacturer liable for negligence in the event of an injury sustained by the ultimate consumer due to a design or a manufacturing defect. In the famous Liebeck v. McDonalds Restaurant case, the plaintiff sustained third-degree burns when the coffee, which was at 180 degrees Fahrenheit (which could cause such burns within a fraction of a second), spilled on her lap. The quality manager had confessed of negligence in not reviewing the safety ramification at such an elevated temperature even though it was necessary in order to retain the characteristic taste. The Court found for the plaintiff and ordered McDonalds to pay compensation.

 

It is incumbent upon the manufacturer to inspect their products before marketing them as they were in the best position to do so. The first inkling of a new standard for manufacturers, distributors, and sellers was espoused by Justice Traynor in a concurring opinion in Escola v. Coca Cola Bottling Co. In that case, a waitress was injured when a soda bottle exploded in her hand. Justice Traynor asserted that public policy demanded recovery for the plaintiff even if negligence could not be proven because the manufacturer was in the best position to insure against the damage. This position was based on the theory that the consumer does not have the same opportunity to inspect products, the same knowledge to recognize dangers, or the ability to spread the cost of such dangers. This idea of liability imposed without fault became known as “strict liability”.

The laws relating to product liability, in India, have been constantly evolving, by way of judicial interpretations and amendments, to become one of the most important socio-economic legislations for the protection of consumers. The enactment of the Consumer Protection Act, 1986 is ample proof of the fact that rights of the consumers are being given paramount importance. The courts have taken a pro-consumer approach in awarding compensation and damages which are more punitive than compensatory in nature. In Wheels World vs. Pradeep Kumar Khurana, the complainant, a doctor by profession, complained to the respondent about deficiency in service in not repairing, free of charge, a technical fault, which occurred during warranty period, in his new Montana car and then not delivering the same for a period of 4 years. The Court awarded damages to the plaintiff including the deposit of Rs. 50,000/- by the respondent for stay of imprisonment. Product liability in India also imposes penal liability in the event of non-compliance with acts such as the Food Adulteration Act, 1954, the Indian Penal Code, 1860 etc. These acts are in addition and not in derogation of any laws which implies that a penal liability can also be initiated along with civil liability. For example, the provisions of Indian Penal Code (IPC), in respect of product liability, are attracted when the element of cheating and fraud can be attributed to the defects as discussed earlier.
Product liability law is fast developing in India owing to the pace of globalization. It is incumbent upon legislation to do justice to the bona fide consumers by providing them with the right to be informed and to complain in the event of the sale of defective products.

Interim Measures under Arbitration & Conciliation Act

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Interim Measures under Arbitration & Conciliation Act

(Author: Dr Shailesh N Hadli )

 Arbitration and Conciliation Act is effective and inttergative part of Alternative dispute resolution system accepted universally. Arbitration and Conciliation Act 1996 repealed old Arbitration Act existing in India and incorporated law relating to domestic arbitration, international commercial arbitration and law relating to conciliation. The new Act was enacted on the lines of the United Nations commission on International Trade Law (UNCITRAL) for ensuring a fair and efficient settlement of disputes in an international commercial contract. Whenever there is an ambiguity in arbitration matters, our Courts have relied on UNCITRAL rules for interpretation and application of the provisions of new act.

 Need for Arbitration?

The new Act minimized the intervention of courts and it provided that final award passed is binding on parties and is enforceable as if it were a decree, if it is not set aside on challenge u/s 36. The arbitrators are vested with powers for deciding matters such as law to be applied, procedure to be followed for evidence, jurisdiction, venue, interest etc. As these factors contribute to speedy arbitral process, it is quite common to find arbitration clause in commercial agreements.

Arbitration Procedure:

Arbitration process starts when parties to agreement fail to amicably resolve their disputes or differences and aggrieved party issues a notice for referring the dispute/claim to the arbitrator (Section 21). After the arbitral Tribunal is constituted, claimant will state facts of his case submit his claim and seek relief. Respondent will file his counter claim or his defence to the claim. Arbitrator passes an award on completion of arbitration proceedings.

Award under Arbitration:

As per definition of arbitral award appearing in Section 2(e), an arbitral award includes an interim award within its ambit. Section 31(6) provides that the arbitral tribunal may, at any time during the proceedings make an interim award on any matters with respect to which it may make a final award. A question that arises in the minds of everyone is that whether interim measures can be treated as  an interim award especially when such measures of protection are ordered by the Tribunal. The author is of the view that such measures will amount to granting of interim award. This view is subscribed from the definition of arbitral award as defined u/s 2 (e) of the new Act.

With the above background, it is now appropriate to shift the focus of this article to the interim measures /relief provided under the New act and their effectiveness. The sections that deal with interim relief are Section 9 and Section 17. Both these are compared for ascertaining the ground reality of these measures.

Interim relief Under Arbitration:

Under the Arbitration Act, 1940,a party could commence proceedings in a Court by moving an application under Section 20 for appointment of an arbitrator and simultaneously it could move an application for interim relief under the Second Schedule read with Section 41(b) of the old Act.  Under the  New Act 1996,  Section 9 empowers the court to order a party to take interim measure or protection when an application is made. Besides this Section 17 gives power to the Arbitral Tribunal to order interim measures unless the agreement prohibits such power.

Interim relief u/s 9

A plain reading of the section 9 indicates that a party may before or during the arbitral proceedings or at any time after making of the arbitral award but before it is enforced in accordance with Section 36, may apply, to the court for interim measure of protection. Prayers for interim measures of protection may include:

– Appointment of a guardian for a minor or person of unsound mind

– Preservation or interim custody or sale of goods, if goods are of perishable nature

– Securing the amount of claims

– Allowing inspection or interim injunction or appointment of receiver

– Any other relief’s as the court may in its discretion may deem proper considering the circumstances of the case.

 

Interim relief u/s17

Let us now examine the powers of Arbitral Tribunal u/s 17. If the arbitration agreement does not prohibit, Arbitral Tribunal at the request of a party, may order the other party to take such interim measures of protection as it may deem necessary in respect of subject matter of dispute. In the process, it can order for providing appropriate security in exercise of its power. This power also has to be exercised within the terms of reference or arbitration agreement. It is very strange that Section 17 although permits Arbitral tribunal to pass interim order, it does not give any power to Tribunal to enforce its order. Also there is no  section in the  new Arbitration Act which ensures  enforcement of interim orders passed by the Tribunal or  to treat  interim order as an enforceable decree like that of final award. In other words, the power of the tribunal is limited and any interim award necessarily has to merge with the final award for attaining enforceability.

In UNCITRAL model law similar power is given to arbitral tribunal under Article 16 and 21 of Arbitration Rules.

 

Section 9 and Section 17:

Analysis of Section 9 and Section 17 would lead us to the following conclusions:-

– The new arbitration Act empowers the arbitral tribunal to pass orders for giving interim relief while such power is not vested under the Old Act.

– Powers under Section 17 can be exercised only after the arbitral tribunal is constituted and it stats functioning.

– Powers of court under section 9 are wide as the words “before,  during or after  indicate so. A party can approach the court to seek interim measures of protection even before the arbitration commences.

– Court’s powers are wide and have supremacy in granting interim relief. However interference of court when Tribunal is constituted is minimum.

Judicial precedents:

Let us now refer to some important judgments for understanding the effectiveness or limited effectiveness of Section 17.

No power to Arbitral tribunal to enforce its orders u/s17

Supreme court of India in the case of M D Army WHO Vs Sumangal services (p) Ltd reported in AIR 2004 SC 1344  observed thateven under S. 17 of the 1996 Act the power of the Arbitrator is a limited one. It cannot issue any direction which would go beyond the reference or the arbitration agreement. Even under S. 17 of 1996 Act, an interim order must relate to the prot, ection of subject-matter of dispute and the order may be addressed only to a party to the arbitration. It cannot be addressed to other parties. Even under S. 17 of the 1996 Act, no power is conferred upon the Arbitral Tribunal to enforce its order nor does it provide for judicial enforcement thereof.

Relief u/s 9 can be granted even before commencement of arbitration

In the case of M/s. Sundaram Finance Ltd. v. M/s. NEPC India Ltd., AIR 1999 SC 565, Supreme Court was to examine the issue whether u/s 9 of the Arbitration and Conciliation Act, 1996, the Court has jurisdiction to pass interim orders even before arbitral proceedings commence and before an arbitrator is appointed. SC held that it is not necessary that arbitral proceedings must be pending or at least a notice invoking arbitration clause must have been issued before an application under Section 9 is filed.

 

Interim measure u/s 9 and u/s 17 are distinguishable

In Firm Asok Traders  Vs Gurumukhdas Saluja AIR2004 SC 1433, the Apex court observed  that Section 17 would operate only during the existence of the Arbitral Tribunal. During that period power conferred on Arbitral tribunal u/s 17 and power of  court u/s 9 may over lap to some extent but so far as the pre and post the arbitral proceedings are concerned, party seeking interim measure of protection has to approach only court.

 

Conclusion: While drafting arbitration clause, one should keep in mind whether the arbitral tribunal should be given the power to grant interim relief or not. If arbitration clause provides for such power to arbitral Tribunal, then one need not approach the court for such relief. But there exists a doubt about its enforceability, if it is not complied with by the party. Courts can be approached only if interim relief as prayed is refused u/s 37(2)(b) but not for enforcing the interim relief granted by the arbitrator.