Insider Trading Regulation in India

 Sourabh Battar


In a Company, Insider Trading is trading by Insider and Insider do not mean employees or key managerial person of a company, insider could be connected to the information of the company and securities of the company. Trading by insiders while in possession of unpublished price sensitive information thereby possibly gaining unfair advantage on the basis of information is received is called Insider Trading.

Prevention of insider trading is not a new concept to India. The Securities and Exchange Board of India  longback  introduces the preventive regulation for listed companies. However there were no provisions in The Companies Act, 1956, to deal with the insider trading. In India, the journey of regulating insider trading began in 1992 with the enactment of the Securities and Exchange Board of India Act and the regulation made there under called the SEBI(prohibition of insider trading) Regulation 1992. [1]The law imposes civil[2] and criminal sanction[3] against any person who engages in insider trading. In November 2014, the Securities and Exchange Board of India decided to substantially overhaul the 1992 regulations in the wake of the recommendations of Justice N.K.Sodhi Committee.[4] The 2015 regulations plug several loopholes ailing the 1992 regulations in an attempt to strengthen the regulatory framework of insider trading in India. [5]Now these provisions has became the part of the Indian company law.

Part II of this Paper describes concept of insider trading and regulatory framework in India. Part III traces the various theories across the world, which governs insider trading. part IV  of the article begins by exploring the possibility of the sec 195 of the companies act to private companies. It is argued that, there is a need to regulate insider trading in private companies.


Currently, In terms of central made law. There are two Acts, which are having provisions an insider trading in securities market. One is SEBI Act, 1992. Since 1992, it has been delegating clearly provided a function of SEBI to prohibit insider trading in securities market. In 2013, a new Act comes , The Companies Act,2013, which incorporates a provision sec 195 and saying insider trading as far as listed company and proposed to be listed company concerned are going to be regulated by SEBI. It defines in the explanation what does insider trading mean and it says act of subscribing, buying, selling, dealing or agrreing to subscribe, buy, sell or deal in any securities by any director or key managerial personnel or any other officer of a company either as principal or agent if such director or key managerial personnel or any other officer of the company is reasonably expected to have access to any non-public price se nsitive information in respect of securities of company and act of counseling about procuring or communicating directly or indirectly any non-public price –sensitive information to any person.[6] So that means the law presupposes insider trading to be an offence not limited to buying and selling, but also to deal in securities . It also defines price sensitive information. It says any information which relates directly or indirectly , to a company and which if published is likely to materially affect the price of securities of the company.[7] The same concept has been used by SEBI on the basis of Justice Sodhi Committee Report in 2015 regulation. In 2015 regulation, Trading means and includes subscribing, buying, selling, dealing, or agreeing to subscribe, buy, sell, deal in any securities. If we see 1992 regulation dealing in securities was defined. The only difference is earlier dealing used trading, now trading use dealing. But per se in concept is not a diversion.

Insider Trading is trading by insider and insider do not mean employees or key managerial person of a company, insider could be connected to the information of the company and securities of the company. Trading by insiders while in possession of unpublished price sensitive information thereby possibly gaining unfair advantage on the basis of information is received is called Insider Trading. In own words Insider Trading means invest today on tomorrows news i.e. X Limited is a Pharmaceutical Company in India. Equity shares of X Limited are listed in the stock exchange. X Limited have been trying to get permission to sell one of his drug in United States for which it has made the application which is pending with the United State Authority for sometime. The U.S. Authority may or may not grant the permission , if the permission is granted, the sales and profit is x limited will multiply means, this permission would definitely triggered an movement in the share price of x limited. on 30th june, the share price was rs.100/share and on 1st july the U.S. Authority granted the permission and on 2nd july, because of the permission of the share price shoots up by 30% to rs.130/share. In this example before the permission is actually granted, some of the senior executive of x limited would aware that the U.S. Authority are expected to grant the permission shortly. They were also aware that once permission is received , share price of x limited will go up , so they had already bought the shares at the level of rs.100, which is before the announcement of receipt of permission on 2nd july. the news of permission became publish and share price shoot up to rs.130. These senior executive sold the shares and make profits seems very easy money making but these gains on the basis of unpublished price sensitive information which is unethical. These unpublished price sensitive information could be anything , it could be better financial results, takeover offers, proposed mergers/demergers, etc.

Before the SEBI Act 1992, insider trading was regulating even using the word insider trading. When we see the history, the companies act 1956 always mandated disclosures on appointment of a directors or an officer of a company. There were various committees Reports. Since P.G.Thomas Committee(1948), Sachar Committee(1979), Patel Committee(1986), Abid Hussain Committee (1989). All the committees in one way or another mandated various disclosures to the made by the people who are connected to the company and these people who were prominently and who were in a position to access some information or who were in the decision making capacity with in a company. So till now in the jurisprudence insider trading is probably an offence which can be committed by high profile people connected with the people and can take advantage of that information. Since that time company law mandated disclosures not only the people with in the company, but the people outside the company or the people who receiving such information.


IOSCO CORE Principles-

1.      The objectives and principals of securities regulation published by the IOSCO (International Organization of Securities Commission)  states that the objectives of good securities market regulation are- (1)-Invester protection. (2)-Ensuring that markets are fair, efficient, and transparent. (3)-Reducing system risk.

2.      The discussion of these “core principles” state that “invester protection” in this context means “investor should be protected from misleading, manipulating, unfair practices, including insider trading.

Across the world there are various theories, which governs insider trading.

1.      Classical theory of fiduciary duty-Under the classical theory, a corporate insider ( such as an officer or director) violates rules by trading in the corporations securities on the basis of material non public information about the corporation. such a classic corporate insider, who owes fiduciary duty to the corporation and its shareholders, has a duty either to obstain from trading or disclose such information before trading.[8]

2.      Misappropriation theory-Misappropriation theory is designed to protect the integrity of the securities markets against abuses by outsiders to a corporation who have access to confedential information that will affect the corporations security price when revealed, but who owe no fiduciary or other duty to that corporations shareholders.[9]

3.      Parity of information theory-


Economist and Lawyers are divided , whether insider trading should at all be regulated or not.

A School of thought- Insider Trading is Good.

In events of insider trading(1966) Harvard business review 113, prof. henry mann argues that, insider trading should not be regulated because-

1.      Long term investors suffer no loss from it as they select stocks on the basis of fundamental  factors.

2.      There is no substantial relation between rigorous insider trading registration and public confidence  in the markets.

3.      Insider trading is the only way properly to compensate the entrepreneur who perform the function of innovation so necessary to the survival and growth of a free enterprise economy.

4.      Knowledge of specific events or of the probability of future events that will ultimately cause a change in share prices.


Counter to Prof. Henry Maan School-

1.      Insider trading does not reward efficient management as such it rewards the possession of confedential reside information, whether the information is favourable to the prospects of the corporation or not.

2.      It leads to loss of efficiency due to the incentives that are created for the insider to conceal information dissemination missed information above the corporation which he engages In trading.

3.      Managers and others with confedential information  would have an incentive to manipulate its disclosures so as to produce sharp changes in crisis.



Section 195 prohibits directors or key managerial personnel of a ‘company’ from engaging in insider trading, without making any distinction between a public or private company. So the provision, prima facie, suggests that it is uniformly applicable to all companies – regardless of whether they are public or private, listed or unlisted.

However, a closer reading of the provision reveals another story. Section 195 defines ‘insider trading’ as the activity of dealing in ‘securities’ of a company where the term ‘securities’ has the same meaning as under the Securities Contracts (Regulation) Act, 1956.[10] In the SCRA, ‘securities’ only refers to marketable securities. There is settled judicial opinion that since there are restrictions on the transferability of securities of a private company, such securities are not marketable and hence do not qualify as ‘securities’ within the meaning of the SCRA.[11]This has led some people to argue that though Section 195 prohibits insider trading in a ‘company,’ it refers only to trade in ‘securities’ of public company and it cannot be made applicable to private companies.[12]

This view has also found favour with the Sodhi Committee, which observed that ‘any security that fits within definition of the term under the SCRA would be amenable to insider trading.’[13] Given that SEBI regulations are already in place to regulate insider trading in listed companies, the Sodhi Committee assumed that the only contribution of Section 195 of Companies Act 2013, to the existing insider trading regime is that it extends the coverage of law to companies who intend to get their securities listed on the stock exchange.[14] This assertion further derives its force from the fact that Section 458 of the Companies Act 2013 empowers the SEBI to prosecute insider trading in securities of ‘listed companies or those companies which intend to get their securities listed.’ [15]This has been used to argue that private companies are still not the subject of insider trading laws. [16]

Considering the proliferation of conflicting interpretations, it may be useful to consult the reports of the drafting committee for the Companies Bill to gain an insight into the true legislative intent behind the provision. Interestingly, during the process of drafting of the Companies Bill, several business associations (such as the Bombay Chamber of Commerce and Industry and Indian Merchants’ Chamber) had recommended that Section 195 be deleted from the Act to prevent its overlap with the SEBI Act and the regulations made there under. [17]Alternatively, it was suggested that an explicit exception be carved out to prevent its application to the private companies since the concept of insider trading has always been understood within the framework of listed companies only. [18]The Ministry of Corporate Affairs, responding to the suggestions, explained that since ‘insider trading’ is not defined in any statute (the SEBI Act or the SCRA), recognition of this concept in the ‘principal legislation for corporate entities’ is intended to empower SEBI to curb this pernicious activity.[19] The Ministry asserted that the intention is not to modify the existing regulatory structure formulated by SEBI and the provision should remain in consonance with the SEBI regulations.[20] The Ministry brushed aside any further demands for clarity in legislative drafting by stating that Section 458(1) of the Companies Act clearly empowers SEBI to enforce these provisions and accordingly, there ought to be no apprehension that the provisions under the Companies Act would be inconsistent with the SEBI regulations.[21]

This suggests that, contrary to popular perception, Section 195 of the Companies Act was perhaps never intended to extend the insider trading prohibition to private companies but merely to bolster the existing regime of insider trading in India. Nonetheless, given the amorphous language of Section 195, there would always be a lingering possibility of dragging private companies within the ambit of the provision. A clarification from the Ministry of Corporate Affairs can dispel this ambiguity, putting the speculation to rest. Unfortunately, such a clarification does not seem to be forthcoming in the near future, since, as recently as in June 2015, the Ministry of Corporate Affairs released a notification exempting private companies from certain provisions of the Companies Act 2013. But no such proposal was made with respect to Section 195 and the Ministry of Corporate Affairs once again missed an opportunity to clarify the issue.

It is believed that stock exchanges exist to provide a fair, level playing platform where the potential buyers and sellers of securities meet to enter into a transaction.[22] In case of a public listed company, members of the public buy or sell shares on a recognized stock exchange on the faith that the relevant information has been made available to all market participants and no person can take an unfair advantage because he has access to additional material information. Therefore, insider trading needs to be prohibited to preserve investor confidence and ensure the efficiency of the financial market. The Sodhi Committee’s report similarly argues that the prohibition of insider trading presupposes the existence of a price-discovery platform for security. There is no price discovery if the securities of a company are not listed and hence there cannot be a risk of speculative trading or misuse of corporate information involved in the transaction of securities of a private company.[23]  the transaction is more often than not, a subject of direct negotiations between parties who know each other. In that sense, it is considered to be similar to a trade in any other good or product which ought to be governed by the principle of ‘caveat emptor’ (buyer beware) where neither party has an obligation to disclose any information to each other.



The 1992 Regulations and the 2015 Regulations, both have an expansive and open-ended definition of the term ‘insider,’ which includes anyone and everyone who has access to unpublished price-sensitive information such as lawyers, bankers, etc. regardless of whether or not they are connected to the company. In contrast to this, the Companies Act 2013 describes ‘insider trading’ only with reference to ‘director or key managerial personnel or any other officer of a company either as a principal or agent’ who is ‘reasonably expected to have access to any non-public price sensitive information in respect of securities of company.’  the Companies Act views insider trading as a breach of fiduciary duty. The provision is therefore applicable only to the directors/officers of the company who stand in a fiduciary position to the company and to the shareholders. When viewed from this standpoint, the regulation of insider trading in private companies is not entirely devoid of merit.

In fact, a closer look at the difference between a private and public company would reveal that the risk of insider trading is perhaps even greater in a private company than a public one. Public companies in India operate under a strict disclosure regime. They are legally obliged to make regular, complete disclosures about almost every aspect of their functioning under the Companies Act and various SEBI Regulations such as the SEBI (Issue of Capital and Disclosure Requirements) Regulations 2009. Shareholders in a public company are generally familiar with the annual reports which provide extensive information about the company, its financial position, new developments, etc. Further information about the company can also be accessed on the website of the stock exchange where it is listed. Accordingly, the members of the public including the shareholders are seemingly at a level-playing field in terms of the information that is known about the company. Essentially, this means that the possibility of insider trading in a public listed company would arise only at times when there is particular price-sensitive information which has yet not been disclosed to the public and is known only to some officials of the company. Given the elaborate and extensive disclosure requirements, it is argued that such undisclosed information is a rare commodity in the context of public companies.

Unlike public companies, private companies have scant reporting and disclosure obligations and at any given point of time, the information about the company is available only to the directors and persons in authority or employees depending upon their varying levels of responsibility within the company. This would mean that a member of the public intending to buy securities of a private company from an existing shareholder is bound to be at a huge disadvantage in terms of access to information and the shareholders are quite literally at the mercy of the directors.

In the case of listed companies and those intending to get listed, Section 458 of the Companies Act 2013 conveniently delegates the power of enforcement of Section 195 to the SEBI while the authority responsible for enforcing the rule in the context of private companies is still shrouded in mystery. The method of enforcing or detecting insider trading is also similarly vague and unclear. Listed companies have a centralized enforcement of insider trading laws whereby the SEBI detects cases of insider trading based upon unusual price and volume activity. In the context of private companies, absent a trade on stock exchanges, there is no understanding on how the regulatory authorities will oversee the enforcement of the provision and detect cases of violation.

Through the inclusion of insider trading provisions in the Companies Act 2013, the legislature has raised more concerns than it ever hoped to address. Section 195 of the Act is a site of complete confusion and uncertainty regarding (I)- the scope of the application itself and (II)- in the event that the provision is finally made applicable to private companies – regarding the mechanism of enforcing the statutory restrictions. Under the law as it stands today, the director of a private company entering into any transaction of securities of his company is potentially engaging in insider trading which could expose him to the liability of a heavy fine or maybe even imprisonment.


[1] Securities and Exchange Board of India (SEBI) Act of 1992,s.30.
[2] Securities and Exchange Board of India (SEBI) Act of 1992,ss.12(d),15(g).
[3] Securities and Exchange Board of India (SEBI) Act of 1992,ss.12(d),24.
[4] SEBI Board Meeting
[5] Report of the High Level Committee to Review the SEBI (Prohibition of Insider Trading) Regulations, 1992, Justice N.K. Sodhi
[6] The Companies Act,2013(Act 18 of 2013),s.195.
[7] The Companies Act,2013(Act 18 of 2013),s.195.
[8]Howard.J.Kaplan, Joseph.A.Natteo,,The Law of insider Trading,ABA Section of litigation 2012 section annual conference(18-20)April,2012.
[9] ibid
[10] The Companies Act 2013, s. 2(81).
[11] Norman J. Hamilton v. Umedbhai Patel, (1979) 81 Bom L.R. 340(India);
[12] Tulika Sinha & Arun Mattamana, The Viewpoint: Notified Sections of the Companies Act, 2013 – Analysis of Issues for M&A Transactions, (Jan. 3, 2014),; ASSOCHAM White Paper, New Mergers & Acquisitions in the new era of Companies Act, 2013, (Feb. 2014),
[13] Report of the High Level Committee to Review the SEBI (Prohibition of Insider Trading) Regulations, 1992, Justice N.K. Sodhi
[14] Report of the High Level Committee to Review the SEBI (Prohibition of Insider Trading) Regulations, 1992, Justice N.K. Sodhi
[15] Section 458 (1) reads:

[..] Provided that the powers to enforce the provisions contained in section 194 and section 195 relating to forward dealing and insider trading shall be delegated to Securities and Exchange Board for listed companies or the companies which intend to get their securities listed and in such case, any officer authorised by the Securities and Exchange Board shall have the power to file a complaint in the court of competent jurisdiction.
[16] Report of the High Level Committee to Review the SEBI (Prohibition of Insider Trading) Regulations, 1992, Justice N.K. Sodhi
[17] Report of the Parliamentary Standing Committee on Finance on Companies Bill 2009, Ministry of CorporateAffairs (Aug. 2010)
[18] Report of the Parliamentary Standing Committee on Finance on Companies Bill 2011, Ministry of CorporateAffairs (June 2012)
[19] Report of the Parliamentary Standing Committee on Finance on Companies Bill 2009, Ministry of CorporateAffairs (Aug. 2010)
[20] Report of the Parliamentary Standing Committee on Finance on Companies Bill 2009, Ministry of CorporateAffairs (Aug. 2010)
[21]Report of the Parliamentary Standing Committee on Finance on Companies Bill 2011, Ministry of CorporateAffairs (June 2012)
[22] Michal Fishman and Katheren Hagerty,Insider Trading and the efficiency of stock prices,Journal of Economics(1992).
[23] Report of the High Level Committee to Review the SEBI (Prohibition of Insider Trading) Regulations, 1992, Justice N.K. Sodhi

Project Insight : A New Surveilance Technology Or Breach of Privacy

Even in a growing and developing economy like India, the so called Emerging Superpower behind China, has a serious problem on Tax Evasion by the General Public. As per Government Data only 3.81% of the population pays income tax. The figure clearly gives a picture on the practicability of the Search and Seizure method of IT Department shown perfectly in Special 26 movie. As technology is getting Advanced so are these Criminals day by day and it’s time for the Department to rise in the same field too. The Panama Paper leak gave an insight on the people evading tax, but all are not covered under the same, hence a permanent solution to the problem was required. Hence as measure to widen Income Tax Department’s (ITD) search Ministry of Finance in May 2017 would launch Project Insight.

The same project would give access to authority to Social Media accounts, and using specialised Data Mining Techniques used by Facebook and Google to track it’s users. Such technique would help to identify potential tax evaders online, and keeping a track of its activities. Many Today like to flaunt their overseas travel, expensive cars etc. online or other keep a track of it but fail to declare accurate income in front of authorities. Hence such authority would be tracked by Tax authority, and on the basis of the Data mining now online raids would be committed. L&T Infotech Ltd would provide the technologies to track such users, the same is tactic currently being used by US Tax Authorities, to raid homes of Rich Instagram users lavishing their lifestyle to the public. Data Mining in layman’s term can be called Track of user Data or Posts online and comparing it with the actual returns to the authority.

If we look at demonetisation one might argue it for various political considerations, but there is one perspective people were unable to see. Demonetisation was a big step to promote paper less transactions through Debit Card, Credit Card etc., and the Finance Act,1998 made quoting of PAN compulsory for a number of transactions such as opening of bank account and deposit exceeding Rs 50,000, as a result, Section 139A of the Income Tax Act, read with rules 114B and 114C, makes quoting of PAN compulsory for certain transactions. Now Income Tax Department as a part of the said Project would have access to these transactions, the authority will track PAN quoted on financial transactions and then tally them with Individual tax filings. Hence now even if a Tax Evaders delete their data from their media, with the new Demonetisation they are forced to do most transactions paper less as a result the same transactions would now be under scrutiny of the Authority all the time.

Critics might argue in future about the serious threat to privacy of an Individual, as the same data many argue curtail right to privacy but when one uploads data on such platforms, he/she expects such data to be streamed by anyone online i.e. the same become easily available in the Public Domain. If we take example of US Internal Revenue Service (IRS) which is similar to our IT department, it has currently assess to all Social Media websites and since 2012 has extensively used all data available at such websites for locating potential tax evaders. The same provoked controversy with respect to people being targeted based on private information too. Initially it was legal for the IRS to use data in public, but later it used private information of a person as well. However finally it settled on not tracking a person’s personal email, but the same confidence was not given on other platforms. Hence in India it is currently not clear with respect private information also being assessed by the authority.
But if we take example of Panama or Swiss Bank account holders, such kind of people are protected just because of privacy and it took decades for our country to finally come to an agreement with such institutions. Hence for such serious crimes which although don’t affect the body but affect the overall economy at large and directly has an impact over our lives, an issue of privacy must be least of our concern. An ordinary middle class man, who regularly pays his taxes and does his best to afford enough for his family would find it least of his concern of Government Agencies tracking him. Although Right to Privacy is a fundamental right of an individual, but such right is not absolute, and as citizens sometimes for a better tomorrow we should sacrifice such right to make all such defaulters accountable for good.

Right to be Forgotten

-Vishnushree Dalmia

The term “right to be forgotten” is a relatively new idea, though on 13 May 2014, the European Court of Justice legally solidified it as a human right and sparked a controversy in courtrooms throughout the world. In this famous case of Google Spain SL, Google Inc. v Agencia Española de Protección de Datos, Mario Costeja González, the Spanish national, Costeja, had filed a complaint with Spain’s Data Protection Agency that a google search of his name reflected links to two pages of a Spanish Newspaper bearing public notices of an auction of Costeja’s house due to his failure to pay social security debts. The proceedings had concluded and resolved many years ago and were no longer relevant. Costeja claimed that this information over the internet was effecting his reputation and violated his privacy rights. Costeja along with the Data Protection Agency moved the court against Google Spain for the removal of the online archive of the newspaper. The European Court of Justice held that internet search engines fall within the definition of Data Controller and decided against Google Spain. The court ruled that in cases where the information has become ‘inadequate, irrelevant or no longer relevant or excessive’ the information owner can ask the search engine to de-list the web addresses from search result The judgement stated, “Thus, if, following a search made on the basis of a person’s name, the list of results displays a link to a web page which contains information on the person in question, that data subject may approach the operator directly and, where the operator does not grant his request, bring the matter before the competent authorities in order to obtain, under certain conditions, the removal of that link from the list of results.” However, such information should not be pertaining to public interest.

The RTBF has its root in the  French Jurisprudence which recognizes ‘droit à l’oubli’ or the right to oblivion. The right to oblivion allows a criminal offender who has been rehabilitated to object to the publication of the facts of his conviction and incarceration so that he can spend the rest of his life in an unprejudiced society. The RTBF is being debated extensively by various other countries regarding its interaction with the right to freedom and expression and right to privacy. Some of them have lauded this development, some are still adapting to it, while others have widely criticised it. California in January 2015 enacted and implemented the RTBF law for the minors, giving them the right to request and obtain removal of content that could otherwise haunt them for years. President of Russia, Vladmir Putin, signed the RTBF Bill into law which came into force from the first day of 2016. This Russian law provides for de-listing of links to obsolete personal information on request of individuals, leaving the actual information on the web platform untouched, subjected to certain conditions. In South Korea, ’Guidelines on Right to Request Access Restrictions on Personal Internet Postings’ took effects from June 2016. These guidelines seek to address situations where an individual has lost control over the self-posted embarrassing or irrelevant content over the internet but does not apply to third party content. China, in June 2016, refused to recognize RTBF under Chinese law in the first case claiming it in the country. The Chinese courts, however, seems to have left open the possibility of offering some kind of protection if the circumstances justify. In November 2016, the Brazil’s Superior Court of Justice decided unanimously that the RTBF cannot be imposed on google and other search engines as the responsibility of removal would be too much a burden for them, turning them into digital censor. Recently in February 2017, Japan’s top court delivered its first decision involving the RTBF relating to internet searches and rejected a man’s demand that news search results of his arrest on sex charges to be deleted from google. The Court stated that the crime being serious and a matter of public interest, the public’s right to know overweighed the man’s right to privacy. The court further noted that the request for removal of content from the internet will be decided on case-by-case basis after giving due weightage to public interest. Hence, countries across the world are still adapting to this new concept and evolving their definition of the RTBF


The EU decision has thrown open a worldwide discussion on the RTBF and India did not remain untouched. The Information Technology Act which came into force in the year 2000, is the only Act in our country which covers key issues of data protection such as child pornography, hacking, online fraud, etc. but it does not have any provisions relating to the RTBF. Howsoever, Karnataka High Court, speaking through Justice Anand Bypareddy, was the first court in India to give a ruling on the lines of the Google Spain Case. In this case it was the apprehension of the petitioner’s daughter that if a name wise search is made on search engines like Google or Yahoo, an earlier court order would reflecting her name would appear bearing grave repercussions to her goodwill in the society. The petitioner therefore claimed masking of his daughter’s name from such court order available at various websites. The court ordered in the affirmative directing the registry to endeavour to mask the name of the petitioner’s daughter from certified copy of court orders as well as from court orders in the public domain over the internet excepting the High Court Website. It’s the first judicial pronouncement of the country explicitly acknowledging the RTBF although the order was largely an unreasoned one. The decision leaves many questions unanswered such as the procedure to request a removal from the internet, the criteria of content removal, that whether  it would lead to deletion of the concerned information or just de-indexing from search results, who will be responsible for the removal, search engines or the government, and many more. The Delhi High Court continues to hear a similar case. The judicial concept of RTBF is still at a nascent stage on our country which requires new development of protective legislations and a strong framework for its implementation. The Karnataka High Court order has paved a way to new battle of seeking right to privacy over the internet in our country.

The nature of RTBF is premised over striking a balance of the Right to freedom and expression and the Right to Privacy. Under our Constitutional Law, the right to privacy is innate in the fundamental right to life an liberty guaranteed by Article 21 of the Constitution. This would include the right to be let alone. Further, Article 19 (1)(a) of the Indian Constitution provides for the freedom of speech and expression subjected to certain reasonable restriction. The right to privacy has been conflicted with the right to press, a right derived from article 19(1)(a), and the issue has always been decided by the court by taking into account the concept of ‘public interest’ and ‘public morality’. Further, in the case of Bennett Coleman and Co. v. Union of India in 1973 the court held that the freedom of speech and expressions encompasses within itself the right to of all the citizens to read and be informed. Moreover, the Supreme Court in Reliance Petrochemicals Ltd. v. Proprietors Indian express Newspaper Bombay Pvt. Ltd. has held that the right to know emanates from the fundamental right of freedom of speech and expression. The question that arises is that the RTBF, if recognised in India, would be taken as an extraction from which fundamental right and what would be its prevailing nature over other derived rights. A RTBF if accepted in India would be on one hand a healthy step towards data privacy and on the other hand will be infringing the right to speech and expression of the author, journalists and web publisher and will also be diminishing the right to know of other citizens of the country. The issue in hand is urgent and requires rules and regulations to be put in place before the courts are overburdened with requesting for deletion of data from the internet. The interacting spheres of the rights is rather complex and debatable. However, what legislator should bear in mind is while attempting to achieve an equilibrium between right to privacy and right to freedom of speech and expression, it is not necessary that there has to be a loser. In fact the RTBF should be understood as the point of equilibrium.


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Right to Be Forgotten

Critical Analysis of frauds in corporate world


There are plethora of cases of frauds in the corporate world and is ample enough to awaken the perpetrators benefitting themselves illicitly with the hard earned money of public at immense level.There are plenty of categories of frauds which take place in primary, secondary and within walls of the organization itself, because these condemning activities are corroding the foundation of security market as well as hampering the Indian economy. The ramifications of these frauds affects the entire firm in many ways such as,economical,psychological and loss of job by employees which becomes a matter of grave concern.In this research paper, we will elaborate further the concept of different categories of frauds and how it takes place by making fools to the entire public.As we all know Investors are the backbone of the security market and the number of investors is augmenting subsequently and it is going to help in prosperity of individuals along with nation but certain frauds which have taken place over a period of time have diminished the confidence of Investors and for the smooth functioning of security market,investors participation is mendatory in enhancement of Indian economy.Therefor e, there is an extreme need to maintain confidence of investors in the security market and all other concepts will be dealh in categorical manner in the entire research paper.



Corporate frauds are of much more significance from investor’s point of view in the corporate world.Fraud can be defined as, an act of deceiving or misrepresenting intentionally in order to obtain benefits in an illicit or unwanted manner.According to association of certified fraud examiners(ACFE) fraud is , deception or misrepresentation that an individual or entity makes knowing that misrepresentation could result in some unauthorized benefits to the individual or to the entity or some other party.Now a days Corporate frauds have become a matter of serious concern, since it affects, entity’s reputation and investor’s faith on the organization.Fraud consists of many unscrupulous activities by individual or company for making large amount of personal benefits.Fraud is an indirect way of attaining huge amount of money, the problem is in order to augment the level of company in corporate world, it indulges itself into unwanted activities, which affects organization to the larger extent as well as the investors loses trust over the company and they beware in future from these mistakes which take place.

Organizations of all types, whether private or public or any other sector are confronting these fradulent activities.The major public companies have experienced financial reporting fraud, resulting in turmoil in the capital markets, a loss of shareholder value, and in some cases the bankruptcy of the company itself.There are various mechanisms are being adopted by the comapnies for keeping an eye on these intentional and harmful activities and now a days investors are taking precautioanry measures in order to avoid monetary risks which can take place through various conducts because they want their investments to be safe in the hands of the entity.

The investors are the backbone of the securities market.They actively take part in security market and become condusive in the enhancement of the economy of the nation.The number of investors are increasing in India at large level.every organization needs money for carrying out their functions in secured and well established manner.Therefore investors are taking initiative to indulge themselves in the money market for fulfillment of their needs and become prosperous people through becoming a part of the company.Companie s borrow money from banks,individual s,and many financial institutions through issue of their financial securities like debentures, shares and bonds.Therefore for the betterment of the corporate world, the faith of investors over comapnies need to be stagnant always because they want benefit from their investments.


1.Who commits fraud: Corporate frauds can be committed thruogh many ways.It can be done inside the organization by the employee through manipulation of audit and financial statements of the company for the purpose of attainment of unauthorized benefit.Generally there are 3 groups of people who commit financial statement fraud.First category is people who are at top level of management such as CEO and CFO commit accounting frauds to conceal true business performance, to preserve personal status and benefits, for instance if company is running out of profits and they are not able to repay their debts to creditors, then they start showing their false income for obtaining huge amount of capital from individuals and from financial institutions without the security and it leads to company in wrong way and pushes it into the well of loss so this is all done for getting personal benefits and for maintaining the stagnant position of the company in market.

Mid and Lower level employees falsify financial statements related to the area of their responsibility to conceal poor performance of the company and to earn performance based bonuses.Corporat e world crminals falsify financial statements to obtain huge amount of loan from many big firms, individuals, banks and financial institutions, or to inflate they plan to sell in a pump and dump scheme.While many changes in financial in financial audits processes have stemmed from the financial frauds, or manipulations, history and related research repeatedly demonstrates that a financial audit simply can’t be relied upon to dtect frauds at any significant level.1

So from abovementioned discussion, it can be clearlly inferred that fraud can be comitted in organization from the top level to lower level of management and just for the sake of attaing certain amonut of benefits, they keep image of the company at stake.

2.Consequences of Fradulent Reporting: Fradulent reporting in accounts of company creates a chaos in the operation of activities of comapny.It can have significant consequences for the organization and its stakeholders and it affects public confidence in capital market because it hampers share value of company in capital market, moreover the fradulent financial reporting impacts organization in numerous areas such as, financial,operat ional activities and psychological and the consequences can be horrible and it can cause company to crumble like commodity becsuase the goodwill, reputation, customer trust over the company will be vanished and obtaining trust might be a herculean task for the company and from future point of view, when extreme need of capital arises, no one will be ready to provide loans to company.these unwanted activities affect on stakeholders,cre ditors and employees as well who suffer jobs and diminishes position and value and auditors,attorne ys, and insurers and even competitiors whose reputation suffer by association.2

As fraud can be perpetrated by any member of company, therfore there should be proper mechanism and strategical plans for avoiding these harmful activities to take place in the next level itself and proper fraud management department should be separtley available in the organization itself which will eyeball on company daily operatinal activities.

3.Types of Frauds : There are plethora of Corporate Frauds existing at present level in Corporate World, and feasible solution need to found for avoiding these inevitable and fradulent activities.

3.(1):Payment Fraud: This type of fraud involves falsely creating or diverting payments and for example, creating fake records and bank accounts which enable fradulent payments to be made,Other examples can be generating false payments, making fradulent payments to oneself, intercepting and altering payee details.

3.(2):Pyramid or Ponzi Schemes Fraud: In this category of fraud, investments of later investors are used to pay earlier investors and it often appears at the time of recession when investors want to remove their money from scheme and it is done for giving positive impression that the investments of the initial participants have increased in value in short amount of time.

3.(3):, : This type of fraud occurs when legitimate business is established with the intention to make fool to its customers,credit ors and suppliers. This type of fraud may take place after attaining good reputation or when apparent business is operative only for few months and when the huge amount of money is grabbed through various investments, business is shut down and huge profit is attained.3

3.(4):Insolvency and Bankruptcy related fraud: Insolvency related fraud occurs when company is aware of its fradulent conduct and it majorly takes place prior to the anticipated insolvency of company.In order to avoid debts and liabilities, directors establishes phonix comapnies just prior or after the insolvency of the company and they transfer all the assets of from the first comapny to newly established company, so that they get exempted from paying its debts.


Satyam Computers was one of the leading star industries in IT Sectors and it secured phenomenal growth at global level and the services of this company were spreaded at every corner of the world and it has won many leading enreprenurship awards for appriciating growth and became a part in augmentation of an Indian Economy.

Satyam Scandal has been dubbed as India’s Enron and it shook the entire country and IT Market in India because it had immense contribution in Indian Economy.The Factual situation was, On January 7, 2009, Mr. Raju disclosed in a letter to the board of directors about an entire fradulent activities which were taking palce at firm.He expressed that he had been manipulating the company’s accounts numbers for years .Mr. Raju claimed that he overstated the assets on Satyam’s Balance sheet by $1.47bn.Nearly$1 .04bn in bank loans and cash that the company claimes to own was non-existent.Sat yam also underreported liabilities on its balance sheet.Satyam overstated income nearly every quarter over the course of several yeras in order to meet analysts expectations that coampany is doing well.Mr.Raju and company’s global head of internal audit used a number of different techniques to perpetrate the fraud and Raju created many bank statements to advance the fraud.Mr. Raju falsified the bank accounts to inflate the balance sheet with balances that didn’t exist at all.He inflated the income statement by claiming interest income from fake bank accounts.Mr. Raju also revealed that he created 6000 fake salary accounts over the past few years and appropriated the money after the company deposited it.The global head of internal audit created fake customer identities and generated fake invoices against their names to inflate revenue and he also forged board resolutions and illegaly obtained loans for the company.

Immediately after the revelation of fraud, Merrill Lynch terminated its engagement with Stayam and PwC came under intense scrutiny and its license to operate was revoked.Satyam shares value came down to the lowest level. Satyam shares fell to 11.50 rupees on Jnuary 10,2009, thier lowest level since march 1998, compared to a high of 544 rupees in 2008.In new york stock exchange, satyam shares peaked in 2008 at US $29.10, BY march 2009, they were trading around US $1.80.Thus Investor lost $2.82 bn in satyam .Many Criminal Charges were brought against,Crminal Conspiracy, breach of trust and forgery and he violated the rules of corporate governance.After revelation, the new board members wanted to save the firm and they started working towards the feasible solution for bringing comapany on track and preclude the falling down of firm.Indian officials acted quickly to try to save satyam from the same fate that met Enron and Worldcom.The Indian government immediately started an investigation for the sell of company.To devise a plan of sale, the board met with te bankers, accountants ,lawyers and government officials immedialtely.Sev eral IT field had gained enough confidence in Satyam’s operation to participate in an auction process for Satyam.The SEBI appointed Justice Bharucha, to oversee the process and instill confidence in the transaction.The winning bidder was Tech Mahindra, bought Satyam for $1.13 per share.The stock of the comapany has again been stabilized from its fall on November 26,2009 and as a part of Tech Mahindra,Satyam is once again on its track.


Every Organization needs capital for operation of their daily activities in smooth and perfect manner since finance is the lifeline of all corporate sectors and here the Investors Contribution comes into play for the establishment of admiring and confident image in the eyes of investors.Investors are considered as backbone of the securities market because they contribute heavily in Security market as well as in enhncement of an Indian economy, therefore their invested money need to be safeguarded through effective rules and regulations.The number of investors are taking part in security market but due to several fraudulent scams which have taken place over a period of time has diminished the confidence of investors in capital market.Therefore , this confidence need to be maintained for existence of capital market or else the consequences will be outrageous and horrible which is beyond fantasy of laymen point of view.

The concept of investors protection need to looked from different angles by looking into aspirations and requirements of different category of investors.

(I)Investors in Equity

(II)Large institutional investors

(III) Investors in Debentures

(IV)Foreign investors and small investors and depositors.

So for the clear understanding of the aforesaid concepts, it is mendatory to know the term investors in elaborative manner.

An investor is a person who is an individual or legal entity who invests his earned money in different ventures without indulging himself or itself into activities of that venture.Investor is always ignorant about the going on procedures within internal management of the organization and they never become part of any decision making process.Normally an investor is a blind person who doesn’t possess any idea about working environment of the corporation itself.The chance of taking part into business activity comes into picture when investors trade among themselves in secondary market, where they buy and sell shares among investors themslves and here no interjection by the comapanies take place.Investors invest their money in belief that,they will get sufficient amount of return from their money and it will help them to execute their other planned schemes in future and sometimes investors are not aware about the procedure of security market and they invest money without due diligence and proper care which cause them a huge loss in future, since they can’t predict about happenings with their money by the utilizers.An investor has mainly 3 objectives, which he expects to be fulfilled from his investments, firstly the safety of invested money,secondly liquidity position of invested money, and return on investment in selected securities.There fore for the fulfillment of those three objectives, precautionary measures need to be adopted for prevention of these unwanted activities which hampers company’s reputation as well as confidence of shareholders and other investors.4

There are 5 established legislations which governs security markets.

(a)The Security and Exchange Board of India Act, 1992

(b)The Companies Act, 1956, which sets of the code of consuct for the corporate sector in relation to issuance,allotme nt, and transfer of securities, and disclosures to be made in public issues.

(c)The Securities Contracts Act,1956, which provides for the regulation of transaction in securities through control over stock exchanges.

(d) The Depositories Act, 1996 which provides for electronic maintenance and transfer of ownership of demat shares.

(e) The Prevention of Money Laundering Act,2002.

These legislations governs the entire security market scandals and fraud and it works as protective measures of money of investors and helps in estalishmenst of confidence of investors in security market because their participation is necessary for the betterment of economy of country and investors prosperity.


The number of Corporate scandals related with primary and secondary market affects the whole entity in many ways such as, financial, psychological and reputation of the company gets hampered and whoever was involved in company’s various operational activities becomes prey of one negligent and greedy decision which drowns the entire firm.The ramifications of scams are easily predictible, therefore for avoidance of these decisions from being taken by employees at all level of entity should carefully indulge into proper decision making process because obtaining money by following wrong direction leads to devastation and collapse of the entire community and affects economy as whole.

Investors should always be careful and due diligence need to be adopted by them before they indulge into investment process.There is different category of investors and thier knowledge differs in field of security market, therfore those investors who don’t possess knowledge about working procedure of capital market, they should always take consultation with appointed financial brokers by SEBI and every organization should have properly establsihed fraud depatment which keeps an eye on day to day transactional activities therfore the security market system need to be transparent and trustworthy since the confidence of investors should always be given priority because capital market can’t stand without contribution and full support of investors.

India has enacted various legislation for safeguard of investors’s money because they can’t predict the intention of utilizers of that money and it can be used in many wrong ways, but proper implementation of these laws are necessary for resisting scams in corporate world.These 2 concepts corporate fraud and more of sgnificant value to make sure about protection of investors money becsuase they have certain objectives from these investments which must be fulfilled at any cost and if all goes well, the realtionship between investors and conglomerates will increase and it will be condusive for the Indian security market.


1“Corporate Accounting Fraud: A Case Study of Satyam Computers Limited by Madan Lal Bhasin: SSRN,” October 20, 2015, accessed October 29, 2016, https://papers.s ers.cfm?abstract _id=2676467. Bibliography:Bhasin and Madan Lal. “Corporate Accounting Fraud: A Case Study of Satyam Computers Limited by Madan Lal Bhasin: SSRN.” October 20, 2015. Accessed October 29, 2016. https://papers.s ers.cfm?abstract _id=2676467

2 Bibliography:Bhasin and Madan Lal. “Corporate Accounting Fraud: A Case Study of Satyam Computers Limited by Madan Lal Bhasin: SSRN.” October 20, 2015. Accessed October 29, 2016. https://papers.s ers.cfm?abstract _id=2676467.Footnote:“Corporate Accounting Fraud: A Case Study of Satyam Computers Limited by Madan Lal Bhasin: SSRN,” October 20, 2015, accessed October 29, 2016, https://papers.s ers.cfm?abstract _id=2676467.
3 Bibliography:“Different Types of Corporate Fraud Explained – Solicitors – London.” 2006. Accessed October 29, 2016. http://www.franc iswilksandjones. ys/faq_booklets/ tips_different_t ypes_of_corporat e_fraud_uf.html.Footnote:“Different Types of Corporate Fraud Explained – Solicitors – London,” 2006, accessed October 29, 2016, http://www.franc iswilksandjones. ys/faq_booklets/ tips_different_t ypes_of_corporat e_fraud_uf.html.
4 Bibliography:“Print Article: Protection of the Interest of the Investor.” Accessed October 29, 2016. m/article/print. php?art_id=1560.Footnote:“Print Article: Protection of the Interest of the Investor,” accessed October 29, 2016, m/article/print. php?art_id=1560.

Water Pollution – A Toxic flow Of Fluoride pollution In Andhra Pradesh & Telangana



This study aims to examine the extensively spreading water pollution in ground water and the respective effects as a whole in the country with more subtle importance to ground water pollution due to fluoride in Telangana and Andhra Pradesh. Groundwater is found in abundance in the above respective states above and serves as a major contribution to the water usage there. With extensive growth of population there has been massive urbanization and industrializatio n leading to pollution as a result of chemical discharge in water bodies. Fluoride and arsenic have been termed as major contributors to pollution resulting in groundwater, taking into account various studies, surveys and researches conducted by state authorities and water control boards.

The study also aims to put forth the legal aspect of Right to Life under Article 21 of the Constitution of India under which an individual is embodied and entitled to a Right to clean drinking water. We aim to portray that chemical concentration in water bodies is a major threat to the living organisms. This study stands for a being a part of the solution and not the pollution.



Water is one the most fundamental and essential elements amongst the natural resources and is imperative for the survival of all living organisms. It serves as an extremely important requisite for Sustainable Development as well as Economic Growth & Development. Water can be termed as one of the most precious gift to mankind. As of the present day, there are various countries worldwide facing a drastic shortage of water. According to statistics, on an average 250 million people worldwide succumb to various health problems and diseases related to water pollution. In recent years, urbanization and industrializatio n have been the most extensive cause of water pollution. However, tones of waste involving organic matter, microbial pathogens, urban sewage, heavy metals, and toxic chemicals are being discharged into water bodies on a daily basis. Lakes, rivers, stream have merely transformed to dumping grounds. As, Rene Dubos quoted, “The most important Pathological effects of pollution are often delayed or indirect. Water pollution is on a global rise than ever before. An estimated 1000 children die every day due to water pollution in India. Wastes are regularly released into the getting water bodies with practically zero respect to their bibulous degree. The release of crude sewage, waste, and also oil slicks are dangers to the weakening abilities of the tidal ponds and waterways in the real urban areas. The common filtration of contaminated waters on a whole is never quick, as for intensely dirtied water has cross long separation in days before a huge level of purifying is accomplished.

The most extensively used source of water is considered to be ground water. Due to its accessibility and general great quality, ground water is broadly utilized for family unit needs and different purposes. Groundwater is an imperative source for the entire hydrologic cycle. Nonetheless, the nature and the nature of surface and ground water are generally factor and are dictated by the nearby topographical history, including the stones and concealed metal stores encompassing the locales for the accumulation of the water, and different elements. The nature of water is inadequately comprehended because of the assortment in the connections amongst water and solvent minerals, dissolvable minerals, and salts.


As per the Bureau of Indian Standards the authorized amounts of fluoride are 1.5 milligram per liter (1.5 mg/l), however as per reports the fluoride levels present in groundwater in Andhra Pradesh have exceeded the above the limit. Also, the information on the premise of water test concentrate appointed by Center the nation over and transferred in the net uncovered startling realities. The fluoride levels in nine areas of Telangana aside from Hyderabad represent high substance of fluoride while it ought to be beneath 0.5ppm or 0.5 mg/l.
As per statistical reports provided by The Hindu-

Regardless of a few endeavors, still a large number of school understudies in the locale are devouring water with more than 0.6 mg/l to 1.5 mg/l fluoride, the reasonable level of fluoride in water with progressive chosen elected candidates neglecting to respect their guarantees.

As indicated by specialists, if heavy metals enter the groundwater, they can’t be extracted. At most their effect can only be weakened, however they stay adhered to the aquifers for eternity. The report just uncovers the express disappointment of contamination sheets and panels that have existed just in name amid the previous three decades. Absence of control on effluents, which have dirtied the bowls all in all, has brought about these conditions.Signi ficant issues are confronted in a few sections of the world because of the nearness of high grouping of fluoride in drinking water which causes dental and skeletal fluorosis to people. Nalgonda region in Andhra Pradesh, India is one such area where high grouping of fluoride is available in groundwater. Nalgonda District in Andhra Pradesh is said to have the most noteworthy grouping of individuals influenced by fluorosis. Almost 500 towns in the locale are grasped by fluorosis bringing about twenty thousand fluorosis casualties in the region. As indicated by the World Health Organization, greatest level of fluoride in water ought to be 1 ppm or 1 mg/l. In Nalgonda, the water contains up to 10 ppm of fluoride. Numerous grown-ups and even youthful kids have been irreversibly influenced by skeletal fluorosis in this region.

Since there are no significant reviews in the later past, the present review was done to comprehend the present status of groundwater quality in Nalgonda, furthermore to survey the conceivable reasons for high convergence of fluoride in groundwater. Tests from 45 wells were gathered once like clockwork and investigated for fluoride fixation utilizing a particle chromatograph. The fluoride focus in groundwater of this locale extended from 0.1 to 8.8 mg/l with a mean of 1.3 mg/l. Around 52% of the specimens gathered were reasonable for human utilization. Nonetheless, 18% of the examples were having not exactly the required furthest reaches of 0.6 mg/l, and 30% of the specimens had high centralization of fluoride, i.e., over 1.5 mg/l. Rocks being withered and vanishing of groundwater are major causes of fluoride concentration in groundwater.

However, considerably certain measures have been issued and raised by the legislative authorities to curb the problem of water pollution as a whole.

The Telangana, the Central Pollution Control Board (CPCB) has recently issued warnings to pharmaceutical companies in Telangana for contamination and for not introducing progressed online nonstop gushing checking frameworks. The primary reason for CETPs is to reuse and clean the unsafe effluents created from the pharmacy and mass medication producing businesses in the state and discharge the treated water into the principle rivulets.Central Pollution Control Board has requested that they introduce nonstop checking frameworks to guarantee responsibility and straightforwardn ess. Address was brought up in Lok Sabha on Contamination of Ground Water. Ground water quality information created by Central Ground Water Board (CGWB) amid different logical reviews and ground water quality checking demonstrates that ground water in disengaged pockets in parts of different States including Andhra Pradesh, Delhi, Telangana and Bihar is defiled with Fluoride, Nitrate, Arsenic, etc.. To expand accessibility of drinking water, the Ministry of Drinking Water and Sanitation has proposed all States to embrace water preservation measures like rooftop top water collecting, raising maintainability structures for water protection and so forth. For making such supportability structures, 10 % of National Rural Drinking Water Program (NRDWP) store is given to the States.

Fluoride ingestion in low levels mixes is helpful to the body and anticipates dental caries. Any case, long haul ingestion of abundance fluoride can be destructive to the body and cause a condition known as fluorosis that influences teeth and bones.In the later past there has been extreme reliance on groundwater to meet consumable water needs. On the off chance that groundwater goes through fluoride rich rocks, it breaks up the fluoride and the water thusly can have more than a worthy level of fluoride. Water utilized for drinking ought not have fluoride in abundance of 1.0 mg/l.

No specific medication for Fluorosis has been discovered yet, however, treatment frameworks that can direct the measure of fluoride in water are accessible. The control of drinking-water quality is along these lines basic in averting fluorosis. In all fluoride influenced zones it is prompted that water reaping is done to revive the groundwater source that shows high fluoride levels. In spots where fluoride levels are between 1.5 to 2 mg/l, some dietary mediation can offer assistance. In these spots it is informed to eat more with respect to sustenance’s that are rich in iron, calcium and Vitamin C. The utilization of dark salt and items containing it, and also the utilization of fluoridated toothpastes ought to be evaded in these zones.


The Human Right to Water and Sanitation was recognized by the United Nations General Assembly in 2010.According to the domestic law in India, every citizen has a Right to clean water. This falls under the ambit of Article 21 of the Indian Constitution pertaining to Right to Life. Right to Water is considered as a concrete constitutionally protected right. Nonetheless, the situation regarding fluoride pollution in the districts of Telangana and Andhra Pradesh is worsening by the day.

The diseases are on a rise compared to before, which is not only affecting the adults but also the younger generations in an extensive manner.

The government and law shall strive to protect the citizens for it is their absolute right as Indian citizens to be enabled to have access to clean and sanitized and pollution free water.

It is about time we bring a change. For Barack Obama rightly said, “ We are the change that we seek.”

Alternate Dispute Resolution vis-a-vis Allied Case laws

Indian law encompasses five types of Alternate Dispute Resolution (“ADR”) procedures, made up of one adjudicatory process (arbitration) and four negotiatory (non-adjudicator y) processes–conci liation, mediation, judicial settlement and Lok Adalat settlement.

Arbitration and Conciliation are being governed by Arbitration and Conciliation Act 1996 and the two other ADR processes Lok Adalat settlement and mediation will be governed by the Legal Services Authorities Act 1987. In case of Judicial Settlement is not governed by any enactment and the court will follow such procedure as may be prescribed

What is difference between Arbitration and other for four ADR ?

The difference between Arbitration and other for four ADR is , In Arbitration the case goes out of the stream of court and becomes an independent proceeding before an Arbitral Tribunal and since Arbitration is a adjudicatory process it will end with a decision. The award of Arbitration can be enforced as decree of court under Section 36 of Arbitration and Conciliation Act.

The other four ADR processes are non- adjudicatory and the case does not go out of the stream of the court when a reference is made to such a non- adjudicatory ADR forum. The court retains its control and jurisdiction over the case, even when the matter is before the ADR forum. The matter in case of conciliation is placed before the court for recording it and disposal in terms.

Key Arbitration Aspects

Section 5 – Extent of judicial intervention.
Notwithstanding anything contained in any other law for the time being in force, in matter governed by this Part, no judicial authority shall intervene except where so provided in this Part.

This sections is a non – obstante clause , it limits judicial intervention in any Cases

Non – Obstante means that the provision contained therein have an overriding effect upon the provisions even if the other  provisions provide to the contrary

However there are certain exception to this , Supra of Judgement :- “Though Section 5 of the Arbitration and Conciliation Act bars the jurisdiction of judicial authority, the said Section shall not be pressed into service to exclude the power of judicial review under Article 226/227.” 1

Judicial review, as the words imply, is not an appeal from a decision, but a review of the manner in which the decision was made. In other words, judicial review is concerned with reviewing not the merits of the decision but the decision-making process itself.

Section 7 – Arbitration Agreement
Arbitration agreement’ as an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not

Arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement & shall be in writing

Query :- Is an Arbitration Clause drafted in specific form ?

It is not essential to draft Arbitration Clause in any specific form , however following supra identifies what shall be taken into consideration for drafting :-

“…….an arbitration clause is not required to be stated in any particular form. If the intention of the parties to refer the dispute to arbitration can be clearly ascertained from the terms of the agreement, it is immaterial whether or not the expression arbitration or ‘arbitrator’ or ‘arbitrators’ has been used in the agreement.”
But mere use of the word ‘arbitration’ or ‘arbitrator’ in a clause will not make it an arbitration agreement, if it requires or contemplates a further or fresh consent of the parties for reference to arbitration.2

Use of words such as “parties can, if they so desire, refer their disputes to arbitration” or “in the event of any dispute, the parties may also agree to refer the same to arbitration” or “if any disputes arise between the parties, they should consider settlement by arbitration” in a clause relating to settlement of disputes, indicate that the clause is not intended to be an arbitration agreement.
Similarly, a clause which states that “if the parties so decide, the disputes shall be referred to arbitration” or “any disputes between parties, if they so agree, shall be referred to arbitration” is not an arbitration agreement. Such clauses merely indicate a desire or hope to have the disputes settled by arbitration, or a tentative arrangement to explore arbitration as a mode of settlement if and when a dispute arises3.
Such clauses require the parties to arrive at a further agreement to go to arbitration, as and when the disputes arise. Any agreement or clause in an agreement requiring or contemplating a further consent or consensus before a reference to arbitration, is not an arbitration agreement, but an agreement to enter into an arbitration agreement in future.
Section 16 – Competence of arbitral tribunal to rule on its jurisdiction4

Doctrine of Kompetenz-kompet enz, or competence-compe tence, is a jurisprudential doctrine whereby a legal body, such as a court or arbitral tribunal, may have competence, or jurisdiction, to rule as to the extent of its own competence on an issue before it.

Section 16(1) is based on the Doctrine of Kompetenz-kompet enz ,

Section 16(1)(a) the legislature makes it clear that while considering any objection with regard to the existence or validity of the arbitration agreement, the arbitration clause, which formed part of the contract, had to be treated as an agreement independent of the other terms of the contract

Section 16(1)(b) of the 1996 Act, the arbitration clause continues to be enforceable, notwithstanding a declaration that the contract was null and void

Query :- Where does this both principle work ?

If there is any dispute between the parties to the agreement arising out of or in relation to the subject matter of the Agreement(i.e wherein the Clause is) The argument of the respondent that the disputes cannot be referred to the arbitration as the agreement is not in existence as of today is therefore devoid of merit.”

Section 11 – Appointment of Arbitrators

The Procedure of Appointment of Arbitrators is left open to parties in Agreement
Judicial Intervention i.e. Chief Justice is sought only when there is a failure of appointment of Arbitrators among the parties
The Decisions of matter entrusted to Chief Justice or the person or institution designated by him is final
Query :- So is the decision made by Chief Justice a administrative or Judicial nature ?

The stand taken by Court is that in 2002 is the only function of the Chief Justice or his designate under Section 11 is to fill the gap left by a party to the arbitration agreement or by the two arbitrators appointed by the parties and nominate an arbitrator. It is open for party to challenge appointment under Section 12 and procedure adopted under Section 135
However the above decision was overruled wherein it was held that proceeding before the Chief Justice while entertaining an application under Section 11(6) of the Act is adjudicatory, then obviously, the outcome of that adjudication is a judicial order. The Delegation of power by Chief Justice can be done to Judge of Supreme or High Court. The intention apparently was to confer the power on the highest judicial authority in the State and in the country, on Chief Justices of High Courts and on the Chief Justice of India. Such a provision is necessarily intended to add the greatest credibility to the arbitral process6
Section 20 – Place of arbitration.

The parties are free to agree on the place of arbitration.
In case if place of Arbitration is not specified then Arbitral Tribunal shall determine the place based on circumstance of case and convenience of parties.
No where in Section 20 restricts the parties to subsequently agree to another place as the seat of arbitration
Clause :- “18…….. If the dispute, controversy or difference is not resolved through mutual consultation within 30 days after commencement of discussions or such longer period as the Parties may agree in writing, any Party may refer dispute(s), controversy(ies) or difference(s) for resolution to an arbitral tribunal to consist of three (3) arbitrators, of who one will be appointed by each of the Licensor and the Licensee and the arbitrator appointed by Licensor shall also act as the presiding arbitrator.
“18.3 A proceedings in such arbitration shall be conducted in English. The venue of the arbitration proceedings shall be in London. The arbitrators may (but shall not be obliged to) award costs and reasonable expenses (including reasonable-fees of counsel) to the Party (ies) that substantially prevail on merit. The provisions of Indian Arbitration and Conciliation Act, 1996 shall apply.”7
Query :- So is there any distinction between Venue and Seat of Arbitration ?


Just because venue is London it does not tantamount to be seat of Arbitration as since the parties intended to be governed only by the Indian Arbitration Act, 1996. The clause uses the word Presiding Arbitrator and not Chairman; this language is expressly used in Sections 11 and 29 of the Indian Arbitration Act, 1996 as distinct from Section 30 of the English Arbitration Act.
Substantive law of the contract is Indian law; law governing the arbitration is Indian Arbitration law; curial law (i.e. law governing the arbitration proceedings) is that of India;
Even if the seat is considered as London , it would create lot of confusion , chaos the Indian Arbitration Act, 1996 would apply to the process of appointment under Section 11; English Arbitration Act would apply to the arbitration proceedings , challenge of award would under English Arbitration Act and enforcement of award would Indian Arbitration Act.
Governing Law for Arbitration.

Since the party has freedom in an International commercial Agreements , incorporating provisions in all these three aspects is very essential :-

Governing law of the contract which defines the substantive rights and obligations of the parties
Law which governs the arbitration agreement. This includes questions as to whether the dispute is arbitrable; the jurisdiction of the arbitral tribunal to make an award and the validity of the award itself
Curial law of arbitration which governs the manner in which the arbitrator would conduct the arbitral proceedings and would extend to procedural matters and the regulation of the conduct of the arbitration
Query :- (i) Substantive law is Indian law; (ii) Venue of arbitration at Kuala Lumpur (iii) Law governing Arbitration Agreement is England, Curial Law is not specified , What is seat of Arbitration ?

Answer :- Laws of England , in cases of international commercial arbitrations held out of India provisions of Part-I would apply unless the parties by agreement, express or implied, exclude all or any of its provisions. In that case laws or rules chosen by the parties would prevail. Thus if the parties have agreed to be governed by any law other than Indian law in cases of international commercial arbitration, same would prevail8

When Arbitrator is Employee

While vetting Arbitration Clauses of PSU we come across obligations where appointment of Arbitrator is a person who is interested in Agreement. That is the person who is employee ; or a person who holds equity ; or retired professional of Company

It was held that :- If a party, with open eyes and full knowledge and comprehension of the said provision enters into a contract with a Government/statu tory corporation/publ ic sector undertaking containing an arbitration agreement providing that one of its Secretaries/Dire ctors shall be the arbitrator, he can not subsequently turn around and contend that he is agreeable for settlement of the disputes by arbitration, but not by the named arbitrator who is an employee of the other party.

Paragraph 48 :- If circumstances exist, giving rise to justifiable doubts as to the independence and impartiality of the person nominated, or if other circumstances warrant appointment of an independent arbitrator by ignoring the procedure prescribed, the Chief Justice or his designate may, for reasons to be recorded ignore the designated arbitrator and appoint someone else.”9

So to conclude ignoring the named Arbitrator and nominating an Independent Arbitrator is an exception to agreed procedure only if valid reason is resorted

Section 34 – Setting aside of Award

Arbitral Award can be set aside on following grounds as per provision :-

Incapacity i.e. mental incapacity, minority and such like circumstances.10
Arbitration agreement not valid
No proper notice of appointment of arbitrator or arbitral proceedings ,Supreme Court had held in a case that parties should not only prove that he was not given proper notice, but also to show that he was seriously prejudiced thereby.11
Arbitral award outside the scope of the agreement
Composition of arbitral tribunal or procedure not in accordance with agreement of the parties
Court finds that subject matter of dispute is not capable of settlement by arbitration under the law or arbitral award is in conflict with “public policy of India”
Principle of Natural Justice

In many contract we may a situation in which the Arbitrators appointed are generally interested individuals in the Contract which is against the principle of Natural Justice

Query :- What is the Principle of Natural Justice ?

The principles of natural justice consist primarily of two main rules, namely,

“nemo judex in cause sua” (“no man shall be a judge in his own cause”) and
“audi alteram partem” (“hear the other side”).
From the above two rules a corollary has been deduced namely that he who shall decide anything without the other side having been heard, although he may have said what is right, will not have done what is right, in other words has it is now expressed, Justice should not only be done but should manifestly be seem to be done.

Some courts have taken a stand as Principle of Natural Justice is overused concept and cannot be used as a straight jacket formula.12

In one of the judgements Court held as under:

“Natural justice is no unruly horse, no lurking land mine, nor a judicial cure all. If fairness is shown by the decision-maker to the man proceeded against, the form, features and the fundamental of such essential procedural propriety being conditioned by the facts and circumstances of each situation, no breach of natural justice can be complained of. Unnatural expansion of natural justice, without reference to the administrative realities and other factors of a given case, can be exasperating (i.e.infurating) . We can neither be finical nor fanatical but should be flexible yet firm in this jurisdiction. No man shall be hit below the belt that is the conscience of the matter”.13

Cost Allocation in Recent Years

The allocation of Cost in recent years are as under :-

“Costs follow the event” pure – The victor takes all, the loser pays all costs of arbitration and all opposing costs of party representation (“Even Attorney fees & Expenses”)
“Costs follow the event” pro rata – The loser pays all costs of arbitration and all opposing attorney’s fees in proportional relationship to the outcome.
“Costs follow the event” modified – The loser pays all costs of arbitration, but not necessarily all or any opposing attorney’s fees.
“Costs to be shared equally” – 50-50 as to either costs of arbitration or attorney’s fees or both, irrespective of any disparity in respective investment in attorney’s fees
The costs of arbitration are to be shared equally, respective attorney’s fees to be borne by each side.
American Rule” – Each party bears its own costs of arbitration and attorney’s fees, irrespective of the outcome or other externalities.
“American Rule” exception – In the presence of manifest fraud, corruption, spuriousness, abusiveness of process, etc., the culpable party bears some or all of the costs of arbitration and/or attorney’s fees of the other party14
Attributes of Arbitration Agreement/Clause

The arbitration agreement must contemplate that the decision of the tribunal will be binding on the parties to the agreement
The jurisdiction of the tribunal to decide the rights of parties must derive either from the consent of the parties or from an order of the court or from a statute, the terms of which make it clear that the process is to be an arbitration.
The agreement must contemplate that substantive rights of parties will be determined by the agreed tribunal
The tribunal will determine the rights of the parties in an impartial and judicial manner with the tribunal owing an equal obligation of fairness towards both sides
The agreement must contemplate that the tribunal will make a decision upon a dispute which is already formulated at the time when a reference is made to the tribunal15
Expert Determination and Arbitration

Example :- Clause 9 of MOU :- “…….Implementati on will be done in consultation with the financial institutions. For all disputes, clarifications etc. in respect of implementation of this agreement, the same shall be referred to the Chairman, IFCI or his nominees whose decisions will be final and binding on both the groups.…..”

The role of an arbitrator and an expert is different. If a person is appointed, owing to his skill and knowledge of a particular subject, to decide any questions, whether of fact or of value, by the use of his skill and knowledge and without taking any evidence or hearing the parties, he is not, prima facie, an arbitrator
A person is appointed with the intention that he should hear the parties and their evidence and decide in a judicial manner, then he is an arbitrator
The most significant distinction between an arbitrator and an expert is that, an expert need not act judicially. This has two effects, namely, an expert can apply his own expertise to decide the question referred and further the expert is not bound to give each party an opportunity to put its case and to deal with other material.16
Russell on Arbitration in 21st Edition describes difference between expert determination or Arbitration in following words :-

Firstly the express words of the disputes clause
If specific words such as ‘arbitrator’, ‘arbitral tribunal’, ‘arbitration’ or the formula ‘as an expert and not as an arbitrator’ are used to describe the manner in which the dispute resolver is to act, they are likely to be persuasive although not always conclusive.
Where there is no express wording, the court will refer to certain guidelines. Of these, the most important used to be, whether there was an ‘issue’ between the parties such as the value of an asset on which they had not taken defined positions, in which case the procedure was held to be expert determination; or a ‘formulated dispute’ between the parties where defined positions had been taken, in which case the procedure was held to be an arbitration

‘Conciliation’, as a specific mechanism for dispute resolution is provided under Part-III of the Arbitration and Conciliation Act, 1996, and under Section 61, applies to disputes arising out of a legal relationship as well as to proceedings relating thereon. Conciliation proceedings are initiated under Section 62 of the Act on a written invitation by one party to conciliate to the other.
It commences when the other party, accepts such invitation, in writing. The appointment of a conciliator is undertaken under Section 64 while Section 66 maintains that the conciliator is “not bound by the Code of Civil Procedure, 1908 or the Indian Evidence Act, 1872”.
A settlement agreement between the parties is finalized in accordance with Section 73 while by virtue of Section 74 of the Act, such settlement agreement shall have the same status and effect as if it is an “arbitral award on agreed terms on the substance of the dispute rendered by an arbitral tribunal under Section 30”. Section 76 prescribes the manner in which the conciliation proceedings are terminated.
. .

1 – Mangayarkarasi Apparels Pvt. Limited vs Sundaram Finance Ltd., Pattullos on 30 April, 2002 (2003 113 CompCas 487 Mad, (2002) 2 MLJ 444)

2 – In M. Dayanand Reddy v. A.P. Industrial Infrastructure Corpn. Ltd., this Court has held that: (SCC p. 142, para 8) ;

3 – Supreme Court of India Jagdish Chander vs Ramesh Chander & Ors on 26 April, 2007

4 – M/S Reva Electric Car Co.P.Ltd vs M/S Green Mobil on 25 November, 2011 , Supreme Court Judegement. ; M/S.Today Homes & Infrastr. … vs Ludhiana Improvement Trust & Anr on 10 May, 2013

5 – Supreme Court of India Konkan Railway Corporation vs M/S. Rani Construction Pvt. Ltd on 30 January, 2002

6 – SBP & Co. v. Patel Engg Ltd (2005) 8 SCC 618

7 – Supreme Court of India Enercon (India) Ltd And Ors vs Enercon Gmbh And Anr on 14 February, 2014

8 – Supreme Court of India in Videocon Industries Ltd vs Union Of India & Anr on 11 May, 2011

9 – Supreme Court of India in Indian Oil Corp.Ltd.& Ors vs M/S Raja Transport(P) Ltd on 24 August, 2009

10 – Delhi Jal Board vs Reliable Diesel Eng. (P) Ltd. on 14 December, 2005 2005 (3) ARBLR 602 Delhi, 127 (2006) DLT 378

11 – Sohan Lal Gupta Thr. L.Rs. & … vs Smt. Asha Devi Gupta & Ors on 1 September, 2003

12 – Union Of India And Another vs Tulsiram Patel And Others on 11 July, 1985 1985 AIR 1416, 1985 SCR Supl. (2) 131

13 – In The Chairman, Board of Mining Examination and Chief Inspector of Mines and Another v. Ramjee (1997) 2 SCC 256)

14 – Best Practices in International Arbitration”, ASA Swiss Arbitration Association, Conference of January 27, 2006 in Zurich, Edited by Markus Wirth

15 – Supreme Court of India K.K. Modi vs K.N. Modi & Ors on 4 February, 1998 (1998) 3 SCC 573

16 – Delhi High Court Joint Investment (P) Ltd. vs Escorts Ltd. on 26 May, 2010

Divorce Laws In India: All You Need To Know About.

Aditya Gaur.

  1. Introduction

Divorce as a word means legal dissolution of Marriage by a Court or any competent authority. “Any Marriage which is solemnized, whether before or after the commencement of Hindu Marriage Act, May be dissolved by a decree2 of Divorce”3. Divorce Brings end to a legal relationship but it doesn’t has any direct application on personal relationship. For Example if any couple may have cohabited for only few days of Marriage, and after this they may have lived separate and apart with hate or anything, but they will remain husband and wife in the eyes of Law, there is no such thing mentioned anywhere that they won’t be husband and wife anymore.4 Divorce doesn’t end the person relationship between the persons. Although the Marriage separation is legal in India, the process is quiet lengthy. Hindu Marriage Act Introduce many theories of Divorce under the Act like-Fault, Mutual Consent and Breakdown.

Acc. to Kautallya’s Arthshastra “Marriage might dissolved because of unhappiness and other circumstances but Manu doesn’t believe in discontinuance of Marriage. He declares “let mutual fidelity continue till death, this in brief may be understood to be the highest drama of Husband and Wife.”5 Manu Declares that a wife can’t be left by her husband by sale or abandoned or by any other means implying that once tie can’t be severed. Manu treated this as Adharma.

Evolution of Divorce

Before going further and discuss more about divorces. We should be known about how divorce was introduced and evolved in India. The History of Divorce goes back to thousand years its origin can be traced back from the Vedas. During the Vedic age Hindu Marriage was considered as indissoluble, that can’t be terminated and that is bound with many sentiments. Manus’s ultimate verdict on Women was that where the women lives happily and with respect the almighty god brings happiness and cherish the house as well and the house in which the women has to sacrifice for everything, live in sorrow or are dishonored a curse dwells in that house and no religious benefits can be taken. Manu was also very much harsh upon women he said that woman are just a child procreating machine and don’t have any rights over the property. A woman should obey her husband and do his “Seva” all her life.6

Acc. to Aristotle “Woman is to the man as a slave like a servant to the master. The male is the natural superiors and female as inferior.”7 One of the foreign explorer also reflected the same he said that “a male and female or husband and wife can’t be equal they have a mental fight between them. There can be no peace without victory and it is not possible till one of them accepts another as Master. The dissimilarity between man and woman should be increased.”

There are different laws of divorce for Different religion. Hindus are governed under Hindu Marriage Act, 1955. Muslims are governed under Personal Law, Dissolution of Marriage Act, 1939 and The Muslim Women protection of Rights and Divorce Act, 1986. Christians are governed under Indian Divorce Act, 1869 and Indian Christians Marriage Act, 1872 and Parsis are governed by The Parsi Marriage Act, 1936 and there is also a secular act called as Special Marriage Act, 1954.

Grounds of Divorce.

A Marriage can be dissolve by the decree of the court when a wife or husband files a petition under these grounds:-

I) having voluntarily intercourse with a person other than his or her spouse.

II) Has treated the petitioner with cruelty after marriage.

III) Has deserted the petitioner for a continuous period of not less than two years.

IV) Has been incurably of unsound mind, or has been suffering continuously or intermittently from mental disorder of such a kind and to such an extent that the petitioner cannot reasonably be expected to live with the respondent.8

Section 13 of Hindu Marriage Act, 1955 also describes the following grounds of Divorce as under:

1. Adultery.

2. Conversion.

3. Leprosy.

4. Renounced the World.

5. Not heard alive for seven years.

6. Judicial Separation.

In the case of Apurba Mohan Ghosh v. Manashi Ghosh9, “the apex court clearly held that when the parties have given their mutual consent of getting divorce and there are no chances of their getting reunited. Their consent is also given by free consent not by any fraud or undue influence. In this case court will allow them to get divorced.”

Mutual Consent Divorce

Section 13B of Hindu Marriage Act, 1955 Provides with the Mutual Consent Divorce. Period of Separation is 1 Year.

Section 28 of Special Marriage Act, 1954 provides for divorce by Mutual consent.

Section 10A of Divorce Act, 1869, Provides for Divorce by Mutual Consent.

There are two ways of Getting Divorce in India. One is Mutual Consent Divorce and second is Contested Divorce. Mutual Consent is the easiest way of getting a divorce. Under this process both party should be equally agreed and should give free consent to get separated.

Condition Required under Mutual Consent Divorce is-

Both husband and wife have been living separately for a time more than one year.
That they were unable to live together.
And that the husband and wife are mutually agreed that the marriage is collapsed.
In addition of this both of them have to mutually decide about two important things-

1. Alimony

This is the amount that has to be paid by the husband to the wife after getting separated. There is no limit for this. Both husband and wife has to agree upon some figure and court doesn’t has to do anything with his.

2. Child Custody

If the couple is having Child or children than they have to agree upon a thing that who will be taking care of the child. Child custody can be shared, joint or exclusive, depending upon their understandings.

In the case of Garasia v. Mansu @Minachamanlal Gangi,10 it has been observed that the provision on such waiting time were in the nature of being directory and not mandatory. It was a case under marriage act for dissolution of marriage under section 13.11 During pendency of such a nature, the parties filed a miscellaneous application for converting the main petition into a joint petition for dissolution of Marriage on mutual consent under section 13b. The parties also prayed for waiving of the waiting time. They pleaded that they are living separately for a longer period of time already. The court said that there are no chances of getting reunited again so the court waived the waiting time.12

How to file a Divorce under Mutual Consent:

The husband and Wife should be living separately for One Year.

Both Parties will file a Petition under the Court.
The statement of both the parties will be recorded and Signed under a sheet of Paper before the honorable Court.
Then the court will provide the parties with a period of six months to resolve the disputes among them and to consider their relationship all over again or they want to carry on with the separation process. This is Called Reconcile Period.
At the end of the said period Court will call both the parties in case they haven’t changed their mind.
After listening both the parties Court will announce its decision.13
Contested Divorce

However. Not all the parties agree upon getting mutual consent divorce. In some cases, one party files the divorce case in the court and the other contests it. The ground for contesting can be anything. But the ground on which the case has been filed by a party in the court is given under-

(i) Adultery.

(ii) Willful desertion of the petitioner by the spouse for more than 2 years.

(iii) Physical or mental torture on the petitioner by the spouse.

(iv) Sexual impotency or unable to perform sexual intercourse.

(v) Insanity or suffering from any mental disease of the spouse.

Documents Needed to Contested Divorce.

Income Tax Statement for the last two years.
Details of the present profession of the petitioner.
Information related to the family background.
Information of all the assets if have any.
How to File a Divorce under Contested Divorce.

Grounds on which the divorce has to be filed should be clear.
All the documents and evidence should be collected. For filing a case it is very necessary to have appropriate evidence.
File the petition.
The court then summon the other party if the other party arrives than the court will hear arguments of both the side and if the other party don’t show up the court will give ex-parte judgment.
The court will then examine all the evidence and documents and will hear cross-examinatio n of parties.
Then the court will decide the case.
This is very time and money consuming process.
Landmark Judgments on Divorce.

Cruelty as a Ground for Divorce.

V.Bhagat versus. D.Bhagat (Mrs.).14

A two judge’s bench referred that “mental cruelty can broadly be defined as that conduct which inflicts upon the other party such pain and mental suffering as would not make possible for the party to live with another. The mental cruelty should be of a nature that the other party should not be reasonably live with another.”15

A. Jayachandera versus. Aneel Kaure16

“It has been ruled that the question of mental cruelty should be considered in the light of the norms of the society and their social values, status and Environment in which they live. If the conduct of a spouse creates an apprehension in the mind of others about his mental or physical welfare than it would amount to cruelty.”

Denial of Sex is Valid Ground for Divorce.

Smt. Shashi Bala vs. Shri Rajiv Arora17

The verdict came on petition by a husband seeking divorce, complaining that his wife had subjected him to mental cruelty by not allowing him to have physical relationship for four and a half years, though she was not suffering from any physical disability.

“In view of foregoing discussion, we are of the considered view that the husband has fully established that he was subjected to mental cruelty by the wife by denying sex to him for a long period despite living under the same roof, without any justification and though she was not suffering from any physical disability” a bench comprising Justice Pradeep Nandrajog and Pratibha Rani Said.18

Hindu Couple can Remarry after Divorce.

Shivram Dodanna Shetty V. Sharmilla Shetty.

The ruling came from a full bench Presided over by Justice Naresh Patil, Justice Ramesh Dhanuka and Justice Sadhana Jadhav. This judgment came as the relief to estranged Hindu couples who want to challenge the orders. Decree and verdicts of the family court.

“The court said that the Hindu couple that got divorced by the family court can remarry within 90 days after the verdict of the court.”

An Important judgment has also given by the Aurangabad bench of the Bombay High Court that the talaq even if it is oral must be proved before the court, if it contested by the wife with leading evidence.
This judgement of the high court will help the Muslim woman who are arbitrarily divorced by pronouncing of talaq three times. It was very rigid and unfair with the Muslim woman.


Religions like Hindu consider their marriage as unbroken bond. Prior to the Acts made by the legislation or executive there were no such provisions for divorce. The concept of divorce or termination of relationship wasn’t even in the mind of people at that time. Woman were treated as slave all lifelong. But time has changed, situation has changed, now woman are treated with more respect. There are courts now to set free woman or man from an unpleasant marriage. There are many ground on which a divorce can be taken without any problem. Taking a divorce is always a stressful and big step that is why courts have also made it easy for the people of the country. The difference of sexes has also reduced nowadays.

Everything comes with pros and cons. And introducing the divorce in the independent India may reduce the content of marriage. It can completely stop the concept of marriage by continuous breakdown of marriages by court. Breakdown of marriage easily can also encourage the person to marriage again and again. That will surely harm the culture related with marriages in India. That is why it is very necessary for our lawmakers to deal with this matter and should make laws in a very cautious manner.

1 B.comLLB 3rd Year, UPES, Dehradun.
2 All Decree of Divorce are, in the first instance and the marriage is finally terminated when the decree made absolute.
3 Section 13, Hindu Marriage Act, 1955.
4 See the form of Solemnization of Marriage in Common Prayer.
5 Agarwal R.K, Hindu Law, Central Law Agency, Print 2014.
6 Ibid, Verses II 213-214k IV, 205-206,V,146-14 8, VIII, 416, IX, 2-3, 14-20, 45-46,104,IX,36- 37.
7 Aristotle, The Politics, ch-1, p-13, R.G. Mulgan, Aristotle’s Political Theory, Pages 20, 44-47,61,79, Clarenden Press (1977).
8 Section 13, Hindu Marriage Act, 1955.
9 AIR 1989 Cal 115: 93 CWN 79: I (1990) DMC145: (1988) 2 CHN 449.
10 1987 (2) GLR 1321: II (1988) DMC 243
11 Hindu Marriage Act, 1955.
12See at http://shodhgang n/bitstream/1060 3/39005/11/11_ch apter%203.pdf.
13 See at http://www.vakil vice/divorce-mut ual-consent-indi a-step-step-proc edure.html.
14 (1994) SCC 337.
15 https://indianka 8484/.
16 (2005) 2 SCC 22.
17 Judgment delivered on 21.03.2012.
18 https://indianka 858876.

Win-Win Negotiation

From a layman to Brexit leaders, everyone indulge in negotiation of one kind or another. Whatever is the form of profession, business one may engage in, negotiation is an essential skill to have to prosper in that given field. Country heads to party leaders, professionals to service expertise, academicians to students, investors to customers, lawyers to doctors, everyone has to negotiate in one or the other aspects of their personal or professional life.

What’s negotiation? Negotiation is generally defined as – mutual discussion by the parties having certain interest in the issues to resolve the differences and come to an agreement. Negotiation is identified as a method to settle the differences by many corporates in the present world. Negotiation is a self-developed trait than an inherent skill.

Forms: There are certain forms of negotiation too. Various methodologies are used in different forms of issues that may involve corporate disputes, legal transactions, international disputes, union-employer issues, domestic conflicts, etc. Negotiations are not always easy. It’s an art and that requires certain pre-requisites. The good news is, one can acquire these skills and can excel in the same. There are certain key elements that make a negotiation useful, solution oriented and a win-win for the parties involved in it.

Excellent Preparation: Win-win negotiation begins with an excellent preparation, reasonable bargaining and resolution oriented agreement. Satisfying the needs of various parties involved is another key to a win-win negotiation. Negotiation can’t always be one-sided. If it is, then, in the long term, it may boomerang the negotiator. It has to yield mutual benefits. Negotiation will generally happen, when both the parties have something to offer and something to negotiate. If it’s one side leaning, then it may not result in positive outcome. Ultimately, negotiation should ensure a stronger bonding between the parties than a diluted relationship status leading to bitterness. A good preparation will focus on these aspects while sitting for a negotiation.
Focused approach: A win-win negotiation cannot be like social media debate. It should more focus upon resolution than winning the argument or making one’s point prevail. Identification of the key – conflicting areas is the prime requirement for a negotiation. When the issues are identified, you can discuss through your way out for the resolution. A final agreement to implement the points accepted by the parties involved is necessary for a good negotiation to conclude.
Need and Necessity: While deciding to negotiate, the initial analysis of the need and necessity of a negotiation is mandatory. Analyzing the given situation, the points that are in one’s favor, the pros and cons, the possible outcome, the points/clauses that can be compromised or changed based on negotiation. Having a prior list of all these elements will come in handy while negotiating. In addition to these the past negotiations or the future dealings and transactions, a fair amount of awareness of these aspects will add on to one’s negotiation skillset.
Logic and Emotions: Logic and emotions play a significant role in a win-win negotiation. If the logic/reasoning takes the back seat and the emotions take the driver seat, then it may prove harmful to a good negotiation. The negotiator has to balance out between one’s own impulse to win and finding a resolution. In a situation wherein the parties are not willing to take a step or failing to make an attempt to come half way, it’s essential to sense the situation and take a control of the situation. At times, the digression would waste the time and energy of the parties involved. So, it’s vital that parties are concentrated on the resolution and issues to be discussed upon.
Give and Take: There will always be ‘give’ and ‘take’ in a negotiation. If these were absent, then the negotiation wouldn’t occur in the first place. It’s for a party to ascertain these areas, wherein they can really step forward or take a step back and be firm. One has to be flexible and open to the suggestions made by the other party and evaluate its advantages and disadvantages before agreeing on to the same. If it’s taking time, then the parties should decide to take some time and revert later on those ‘identified’ issues.
Alternative Plan: A negation need not always be win-win. Hence prepare to fail too. A negotiation may not always have a positive outcome for the parties. Therefore, one must have an alternative arrangement / another solution, if the negotiation didn’t go as per the initial speculation.
After Negotiation: Parties, once mutually agreed on the points of consensus, shall jot down the course of action for implementation of the agreed issues. This would ease the further process and procedure for the parties. This would also help the parties to identify their path forward.
Summary: Good negotiation will have the following components:

1) An adequate preparation;

2) Identification of the issues involved;

3) Open and positive discussion;

4) Flexibility to the suggestions;

5) ‘Give’ and ‘Take’;

6) Clarity of points, clauses that can be compromised;

7) win-win approach for both the parties;

8) Desire for resolution;

9) Balanced approach between logic/reasoning and emotions;

10) Mutual agreement;

11) Alternatives/Pla n B

12) Implementation Plan


Senior Legal Counsel/Vice President,

Northern Trust,


The Child Labour (Prohibition and Regulation) Amendment Act:How Long Will Our Children Suffer?


The Child Labour (Prohibition and Regulation) Amendment Act (hereinafter amendment) has been passed by Rajya Sabha as well as Lok Sabha after a rigorous debate. It is a tragedy that even after 70 years of independence the parliament had to discuss this oxymoron and a bigger tragedy that it came up with a regressive law like this. The act has invited criticism from UNESCO, Nobel laureate Kailash Satyarthi and other child rights advocates. The intention of the government behind passing this act was to have an implementation -friendly law which could work in present socio- cultural environment of India. However, in this process, government has compromised with the objective of achieving zero-tolerance against child labour.

Critical analysis:

Two classes have been created by the amendment one of a child and other of an adolescent.

1 Age of child has been defined differently in various existing laws in India for e.g. Factories Act defines a person who has not completed 15 years of his age as a child whereas as per Protection of Children from Sexual Offences Act 2012, a child means a person below 18 years. However, to determine the age of the child in the concerned act government has used Right to Free and Compulsory Education Act 2009 (hereinafter RTE) as the yardstick. There is still no consistency in the definition of child in Indian laws. RTE defines a child as a male or a female child between the age of 6 to 14 years. If the age of a child is further increased in RTE, the same will happen in the amendment act. The acts are therefore synchronised together. This also lies in line with the basic minimum age of working according to International Labour Organisation (ILO) Convention. The major reason behind this provision is that if the government is not able to provide free education after the age of 14, the child from a poor family may not be in a position to pursue his or her education due to financial constraint on one hand and on the other hand cannot work due to ban under Child Labour Act which may create a serious social/law and order problem. However, the essence of RTE is that a basic elementary education is required before one enters into any occupation so that one is aware of one’s rights and is exposed to education. Section 4 of the RTE states that a child who may have crossed 14 years of age, but has not done 8 years of his statutory elementary schooling to be admitted in a school with provisions for special training for that child to complete his/her elementary schooling. Hence adolescents who have not completed their education must be first educated and then allowed to work. This would make the law in perfect sync with principals of RTE.

2. Allowing work in family enterprise and entertainment industry

The amendment imposes a blanket ban on working in the hazardous sector for anyone below the age of 18. However, the amendment allows a child to help his family or family enterprise after his school hours or during vacation.2 Also, it allows them to work in audio –video industry and entertainment industry subject to conditions and safety measures.

3. Even Child Labour Prohibition and Regulation Act 1986 allowed working in family enterprises. The new amendment was expected to be a progressive leap and remove this provision. However, this provision has been kept intact disappointing all children. There are no norms and conditions for employment prescribed for children below the minimum age in an audio-visual entertainment industry.

Definitions of family, family enterprise and entertainment industry are too inclusive.

4 These definitions open up a range of settings for work by the child like places that any of these family members own, where any of these family members are employed or wherein any of these family members have subcontracted work; entertainment sector can include performing as a singer in restaurants and dhabbas. An employer can take the disguise of siblings of parents and employ these children (Ganotra) .These definitions are the major loopholes in the amendment.

The Ministry seems quite confused between what constitutes child labour and child work. There is a thin line of difference between children helping a family, child labour and preparing him for adult life. With regards to the conceptual and definitional problem of child labour one simple test is to list down the impact amendment has on children as they are the major stakeholders. Does working in family enterprise going to benefit children mentally, socially and physically? The educational development has to go hand in hand with mental, social and physical development. Hommerfolks, Chairman of United Nation Child Labour Committee has defined Child Labour as “Any work by children that interfere with their full physical development, their opportunities for a desirable level of education and of their need for RECREATION.” If children are made to work in the family enterprises after their school hours, the fatigue faced by them won’t give them any leisure time for social interaction, exercises, sports or even completing homework. This task leaves children too tired for active participation in any other activity. Moreover, this can have a far -reaching effect on the education of the children. It will devastate their health by overburdening them with work which in turn might increase the school drop –out rate or be the cause of irregular attendance. So, instead of supplementing RTE it will defeat its main purpose.

The massive amount of Indian child labour is engaged in family employment where they work from dawn to dusk. According to the report of Bachpan Bachao Andolan, 21% of all the rescued children below the age of 14 worked in some sort of family enterprise.5Working at home or in workshops, through long hours in unhealthy environments, makes children’s lives extremely tiring .Even working as a part of the family is no protection when the family is exploited as in the case of plantation labour or craft manufactures. In India, we have families trapped in Intergenerationa l debts where they are brutally harassed. Hence, working for these enterprises is going to be hidden nature of work for these children.

The major argument put forth is that a child working under the family with relatives is not prone to exploitation by the virtue of blood relation and absence of employer –employee relationship. A family which is continuously pressurised by traders to complete an order way above its working capacity can in no way prevent the exploitation of children in forms of long working hours, sleepless nights and drenching work. Moreover, most of the cases of child labour are either by parent’s approval or parents themselves force kids into human trafficking. The government talks about the absence of employer- employee relationship but in this act ,it exists in latent forms. In family -based enterprise like agrarian sector children are exposed to pesticides, fertilisers, animal’s organic crop and animal dust leading to cancer and immune system abnormalities. Moreover the treacherous and back breaking work like sowing , reaping, milking animals, lifting heavy and awkward loads hinders their physical development(Narasiah,2)Most of the family employed in agricultural sector involve a great deal of labour input which involves six hours of works and face exploitation by the middlemen. Since most of India’s child labour is caste-based work, this is going to cement traditional caste system.

Under the cover of training, children are made to work for hours as they have very weak bargaining position in front of their parents. This is in addition to the emotional abuse they face in case of small mistakes and errors (Konikar, 105). Carpet weaving and jari industry are few examples of family- based enterprises involving traditional skill. In activities like carpet weaving children are packed into shreds in long rows behind giant looms. About 60% of the children working in carpet weaving industries are asthmatic or have other lung diseases caused by breathing cotton dust and wool fiber (Narasiah ,12).It is not the question of a child working out of a hobby or to learn a tradition, it is a situation where they are forced to work in appalling condition without consent. What may seem to be unhazardous for an adult can prove to be extremely harmful to children. Under the disguise of traditional skill these children will continue to be exploited and this provision of the act is going to be extremely misused.

Life of a child labourer can be categorised into two phases-

First: where he works along with some kind of education.

Second: where the child only works and does not attend any form education.

If the first stage is legalised it will take no time for a child to move to the second stage.

If the law permits home- based work, these children will be ceased from any form of protection. This is no way going to further the benefit of the children due to aforementioned reasons. Helping in a family is something very obvious; there is no requirement for legislation to give it legitimacy. By enacting the act in this way the government has created a loophole which is only going to increase the magnitude of the child labour.

Poor skills and vocational training conspire to keep children as a child labourer. Vocational training and skills should be part of school curriculum so that children are prepared for their entry into the world of work especially for children who have reached the minimum legal age for employment in their country so that they can find decent employment.

6 Reducing number of hazardous activity

Adolescents are allowed to work in the non-hazardous industry and the number of hazardous industry has been reduced drastically from 83 to 3. The central government may add or omit any hazardous occupations from the list including the act.7 List of hazardous industries has been very haphazardly copied from Factory Act. The point to be noted here is that Factories Act is legislation for adult and the processes defined under the act are defined keeping in view adults and not children.

Various activities like domestic help, rag picking have been excluded from the hazardous sector but experiences under these industries can be extremely tormenting and may have a serious effect on the mental health of adolescents. For e.g. while rag picking, adolescents might cut themselves by pieces of glass bottles, wire and working under such unhygienic condition might cause a serious problem like diarrhoea. Working as a domestic helper is extremely exploitative as these children are scolded on a daily basis and kept away from their families. The amendment has looked at the definition of hazardous works from a very narrow perspective whereas it should have been kept as broad as possible to safeguard adolescents from any kind of exploitation. However, Government can add or remove the number of hazardous industries by a notification. The time, for which these activities are kept out of the ambit of the act, adolescents are exposed to danger. Hazardous work is defined as work which, by its nature or the circumstances in which it is carried out, is likely to harm the health, safety or morals of Children.8 In determining the types of hazardous processes, consideration should be given to ILO convention no. 182. ILO Worst Forms of Child Labour Recommendation 190 defines hazardous work as work that exposes children to physical, psychological or sexual abuse; work underground, under water, at dangerous heights or in confined spaces; work in an unhealthy environment, and work under particularly difficult conditions such as work for long hours or during the night.


No punishment to parents for the first time offence :
Punishment for employers has been doubled in regards of both imprisonment and fine. Minimum punishment has been kept as 3 months which can be extended up to 2 years or a minimum fine of 20,000 rupees which can be extended up to 50,000 rupees. For repeat offenders, minimum punishment has been as kept 1 year which can be extended up to 3 years. Parents and guardians of kids are excused from punishment if they permit their child or adolescents to work in contravention of the provision. However, if they repeat the same offence again they are to be punished with a maximum fine of 10,000 rupees. 9

Parents are exempted from the punishment for the first time offence. Though it is accepted that parents are the perpetuators of child labour, but in most of the cases they send their kids to work due to dismal financial condition of the family. It becomes difficult for the family to pay a huge amount of fine and if parents are imprisoned children are left without guardian leaving them vulnerable and ultimately forcing them to work. More than a deterrent it acts as a reason for kids to bring in more income. Considering the lack of awareness there are high chances that parents might send their adolescents to work without even being aware of the hazardous list.10This move should be welcomed and appreciated. An alternative source of income should be provided to the family for the eradication of child labour and that employment should be provided to an adult in the family in lieu of a child working in a factory or mine or any other hazardous work.

Child and adolescents rehabilitation:
The amendment simply states that the child or adolescent, who is employed in contravention of the provisions of this Act and rescued, shall be rehabilitated in accordance with the laws for the time being in force. It would have been better if an elaborate plan was proposed instead of relying on some future legislation. The Amendment calls for the establishment of the Child and Adolescents Rehabilitation Fund (hereinafter fund) in every district or for two or more district. The entire fine realised from the offenders is to be credited to the fund along which appropriate government will credit an amount of 15,000 rupees for a child or adolescent for whom the fine amount is credited. This amount has to be invested or deposited in the bank as the appropriate government may decide. The invested amount along with the interest is to be paid back to the child or adolescents in whose favour the amount has been credited.11Power to ensure that provisions of this act are effectively carried out is conferred upon the District Magistrate. 12 The amount that will be secured as a fine can help these children and adolescents to start a better life if utilised for their further education or for their family. This provision was missing in the original act and is one step forward in solving the problem of child labour. The Act, however, does not go into detail and provides no information as to when the children will have legitimate claim over the credited amount .It has touched upon an essential provisions but does not go into detail. A basic model should be put forward which could serve as building block for different State Rehabilitation Programs. Without the proper guide-lines for rehabilitation, the task of saving children is not over.


The amendment has been formulated with adult – driven perception of the child labour. A detailed analysis of the act brings forth many loopholes which can be used as an escape mechanism by the culprits. There are few provisions in the act which are welcomed but the overall amendment is insufficient to rescue a child from the clutches of child labour. If children are allowed to work in family enterprises and list of hazardous industries is not increased for the adolescent the anti-child labour movement will face a major set- back. There is no doubt that the amendment will worsen the status quo and this makes it imperative that the issue is re-visited.
1 “adolescent” means a person who has completed his fourteenth year of age but has not completed his eighteenth year;’child” means a person who has not completed his fourteenth year of age or such age as may be specified in the Right of Children to Free and Compulsory Education Act, 2009, whichever is more;’
2 The Child Labour (Prohibition And Regulation) Amendment Act ,2016 no. 35 of 2016 , S. 5
3 Id.
4 (a) ‘‘family’’ in relation to a child, means his mother, father, brother, sister and father’s sister and brother and mother’s sister and brother;(b) ‘‘family enterprise’’ means any work, profession, manufacture or business which is performed by the members of the family with the

engagement of other persons;
5 Bachpan Bachao Andolan, ”Employment of children in hazardous and family run business”, available at n/sites/default/ files/Employment %20of%20Children %20in%20Hazardou s%20and%20Family %20Run%20Busines s.pdf , pg. 9, accessed on October 31,2016
6ILO, “Employers and workers handbook on hazardous child labour”, available at http://www.ilo.o rg/public/englis h/dialogue/actem p/downloads/proj ects/cl_handbook .pdf, pg. 9,accessed on October,31,2016
7 Supra note 2,S. 6
8 Convention concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour, art. 3(d), June 17 ,1999,2133 U.N.T.S.161
9 Supra note 2, S. 8
10 See MC Mehta v State of Tamil Nadu Writ Petition (civil) No. 465/1986 (India)
11 Supra note 2, S. 19
12 Supra note 2, S. 20

New surveilance Technology or Breach of Privacy

Even in a growing and developing economy like India, the so called Emerging Superpower behind China, has a serious problem on Tax Evasion by the General Public. As per Government Data only 3.81% of the population pays income tax. The figure clearly gives a picture on the practicability of the Search and Seizure method of IT Department shown perfectly in Special 26 movie. As technology is getting Advanced so are these Criminals day by day and it’s time for the Department to rise in the same field too. The Panama Paper leak gave an insight on the people evading tax, but all are not covered under the same, hence a permanent solution to the problem was required. Hence as measure to widen Income Tax Department’s (ITD) search Ministry of Finance in May 2017 would launch Project Insight.
The same project would give access to authority to Social Media accounts, and using specialised Data Mining Techniques used by Facebook and Google to track it’s users. Such technique would help to identify potential tax evaders online, and keeping a track of its activities. Many Today like to flaunt their overseas travel, expensive cars etc. online or other keep a track of it but fail to declare accurate income in front of authorities. Hence such authority would be tracked by Tax authority, and on the basis of the Data mining now online raids would be committed. L&T Infotech Ltd would provide the technologies to track such users, the same is tactic currently being used by US Tax Authorities, to raid homes of Rich Instagram users lavishing their lifestyle to the public. Data Mining in layman’s term can be called Track of user Data or Posts online and comparing it with the actual returns to the authority.
If we look at demonetisation one might argue it for various political considerations, but there is one perspective people were unable to see. Demonetisation was a big step to promote paper less transactions through Debit Card, Credit Card etc., and the Finance Act,1998 made quoting of PAN compulsory for a number of transactions such as opening of bank account and deposit exceeding Rs 50,000, as a result, Section 139A of the Income Tax Act, read with rules 114B and 114C, makes quoting of PAN compulsory for certain transactions. Now Income Tax Department as a part of the said Project would have access to these transactions, the authority will track PAN quoted on financial transactions and then tally them with Individual tax filings. Hence now even if a Tax Evaders delete their data from their media, with the new Demonetisation they are forced to do most transactions paper less as a result the same transactions would now be under scrutiny of the Authority all the time.
Critics might argue in future about the serious threat to privacy of an Individual, as the same data many argue curtail right to privacy but when one uploads data on such platforms, he/she expects such data to be streamed by anyone online i.e. the same become easily available in the Public Domain. If we take example of US Internal Revenue Service (IRS) which is similar to our IT department, it has currently assess to all Social Media websites and since 2012 has extensively used all data available at such websites for locating potential tax evaders. The same provoked controversy with respect to people being targeted based on private information too. Initially it was legal for the IRS to use data in public, but later it used private information of a person as well. However finally it settled on not tracking a person’s personal email, but the same confidence was not given on other platforms. Hence in India it is currently not clear with respect private information also being assessed by the authority.
But if we take example of Panama or Swiss Bank account holders, such kind of people are protected just because of privacy and it took decades for our country to finally come to an agreement with such institutions. Hence for such serious crimes which although don’t affect the body but affect the overall economy at large and directly has an impact over our lives, an issue of privacy must be least of our concern. An ordinary middle class man, who regularly pays his taxes and does his best to afford enough for his family would find it least of his concern of Government Agencies tracking him. Although Right to Privacy is a fundamental right of an individual, but such right is not absolute, and as citizens sometimes for a better tomorrow we should sacrifice such right to make all such defaulters accountable for good.


Mayank Mahla