The Obnoxious Article 370 of The Indian Constitution: Abrogation Is The Way Forward

Is a 3rd year student at W.B.N.U.J.S, Kolkata

“Samvidhan ki dhara 370 ghiste ghiste ghis jaayegi”[1] (Article 370 of the Indian Constitution will gradually erode to oblivion) This statement was made by Mr. Jawaharlal Nehru in the Lok Sabha in 1963 on the assumption that Article 370 was temporarily inserted into the Constitution of India so as to facilitate the integration of Jammu and Kashmir with the Republic of India. Further by incorporating this Article in Part XXI of the Indian Constitution, which is titled ‘Temporary, Transitional and Special Provisions’, it is quite clear that the constitutional makers also wanted that the Article should be abrogated once the aim of integrating J&K with the Republic of India is fulfilled. But today it seems as if this Article has become the eternal reality of the Indian Constitution.

It would be appropriate to start with the history of the genesis of Article 370. After getting independence from the British rule all the 562 princely states in India were returned their rights and independence. Surprisingly both the Cabinet Mission (12th May, 1946) and the British government were clueless about the future of these states and gave no suggestion as to the future course of action. It was Mr. V.P. Menon (the constitutional advisor of the three last Viceroys of India during the British rule) who came up with the suggestion that all the princely states should surrender three basic functions of their state to the Indian government (i.e. defence, communication, and external relations). This led to the inception of the “Instrument of Accession”. This was a form of agreement through which all the princely states were asked to accede to either of the two dominions (i.e. India or Pakistan) and surrender their rights related to defence, communication and external relations. Maharaja Hari Singh of Kashmir faced a dilemma that whether he should accede to India or to Pakistan, as both were geographically adjacent to it. He finally chose India over Pakistan on an assurance by the Government of India that there would be a plebiscite (direct vote of all the members of an electorate on an important public issue) in the near future to finalize the accession.

So, if Kashmir is just another princely state in India, which chose to be the part of the Indian dominion, why is it that a special Article is incorporated in the Constitution, which provides it an unreasonable amount of autonomy? The answer is that on getting independence each princely state had its own Constitution but gradually all the states except J&K accepted the Indian Constitution over its own Constitution. J&K decided to act differently and thus adhered to its old Constitution Act, 1939.[2]This posed a major problem for the Government of India as now it was impossible for it to integrate all the states under a single Constitution. But the government could do nothing as the situation of Kashmir was very delicate and thus they passed a Bill in the Parliament which gave J&K special status in the Indian Constitution. This led to the birth of Article 370.

Now let us discuss some major problems with Article 370. There is a major confusion with regard to the status of Article 370. Some consider it temporary while some others consider it permanent. This problem was caused due to the addition of word “Special Provisions” to the title of Part XXI of the Constitution, as this misled people into believing that Part XXI is a permanent part of the Constitution because it is titled as “Special”. Former Chief Justice of India Mr. Adarsh Sein Anand was one such person who mistook Article 370 to be permanent.[3] It is stated here that the words “Special Provisions” were inserted only to show that Part XXI confers special status to states such as J&K, Sikkim, Assam, Nagaland etc. and such provisions are special as no other state enjoys the benefit conferred by Part XXI. This does not mean that these provisions are permanent as during the inception of the Constitution they were clearly titled as “Temporary”. This assertion is also supported by statements made by Gopal Swami Ayyangar and Jawaharlal Nehru in the constituent assembly during the framing of the Constitution.[4]

Article 370 begins with a non-obstante clause: ‘Notwithstanding anything in this Constitution’ before the main text, which indicates that all the powers given to the state under this Article do not depend on any Constitutional provision. This expression is rarely used in the Constitution and thus in a way gives autocratic powers to this Article.

When it comes to analyzing the Clauses 1(b)(i) and 1(b)(ii) of Article 370, it is clear that they prevent any law of the Parliament from directly applying to the state of J&K. Application of such laws are only possible either through consultation or through concurrence with the state government. Clause 1(b)(i) says that any law of the parliament related to defence, communication and external affairs can only be applied after “consultation” with J&K government. Clause 1(b)(ii) says that laws on subject not related to defence, communication and external affairs can only be applied after concurrence with the state.

Firstly, Clause 1(b)(i) goes against the basic “Instrument of Accession” which J&K accepted. By this what is meant is that ideally there should not be any need for consultation with the J&K government in applying laws related to the above mentioned subjects since the right to make laws on these subjects was already surrendered by the J&K government under the Instrument of Accession.

Further, the J&K government has interpreted the term “consultation” and “concurrence” to mean the same. This means that if consultation with J&K state government, with regard to a law, fails the law will not apply to the state![5] Despite the fact that this assertion of the State government is clearly fallacious, successive governments at the Centre have done nothing to change the status quo.

Moreover, Clause 1(d) of the Article gives the President power to issue orders exempting certain provisions of the Constitution from applying to J&K. All these orders are compiled together to create ‘Constitution (Application to Jammu and Kashmir) Amendment Order’. The most infamous among these orders was the one issued on 14thMay, 1954. It gave the following powers to the state of J&K:

         i.            Residuary powers vested in J&K rather than the Centre, a departure from the norm under the Indian Constitution.

       ii.            State legislature given the power to give special rights to its citizens.

      iii.            The right to have its own flag.

     iv.            General emergency cannot be proclaimed in the state by the Centre in case of internal disturbance.

Among all these powers the second power mentioned above is the most devious as the state has atrociously used it to discriminate between the permanent residents of J&K and other Indian citizens living there. Using this power the state legislature has inserted Article 35A in the state Constitution which discriminates against those who are not permanent residents in matters related to employment, buying immovable property and election. Persons who are not permanent residents cannot vote in the elections to the state legislature. This has created a lamentable condition as some citizens of India living in J&K can vote in Lok Sabha elections but not in state assembly elections! Further Article 35A even gives the state the power to decide the definition of “permanent resident” which it can use to give as narrow a definition as it wants. All these provisions are against the basic structure of the Indian Constitution guaranteeing equal rights to citizens under Article 14 of the Constitution.[6]

But the most startling clause in Article 370 is clause (3) which says that the President, through a public notification, can declare that this Article shall cease to operate and such a public notice shall be valid only if prior to the notification the Constituent Assembly of J&K recommends the same. The inconsistency in this is that the Constituent Assembly of J&K ceased to operate on 15th March 1957 and thus no such recommendation can be given. This means that Article 370 has eternal existence and thus it cannot be abrogated. The same was confirmed by the Supreme Court in the case Sampat Prakash v. State of J&K.[7]

But such an explanation cannot be accepted because of the fact that the primary intention of the legislature while incorporating this Article was to make it temporary and not permanent and thus the first step to be taken is to replace the term Constituent Assembly and insert State Legislature in its place. This is the only viable change which can give some meaning to this moribund clause.

Further, it is important here to know that the word “secular” used in the Preamble to our Constitution is omitted in the constitution applicable to J&K. This is shocking because the Preamble is a part of the basic structure of the Constitution and its non-applicability in J&K possibly makes it a theocratic state.

Further, J&K is the most pampered state in India. It receives 14 times more financial assistance than Bihar and is receiving the highest amount of financial aid as compared to any other state. Despite such heavy expenditure on J&K there is widespread poverty, malnutrition and unemployment in the state. The centre does not have the right to audit or check account registers of the state. Further no directions given by the Reserve Bank of India are applicable on banks in J&K as they are completely governed by J&K bank. All these practices give an open way for corrupt officers and politicians to earn easy money. Thus it can be easily understood as to why political parties in J&K are always unwilling to even debate this matter. It is highly deplorable that even politicians in J&K are not even ready to sort out the matter democratically. Omar Abdullah’s recent comment when Jitendra Singh asked for a debate on abrogation of Article 370 was: “We the people of J&K would like to categorically tell BJP that it is not possible to withdraw Article 370 and any attempt by anyone will be on our dead bodies”.[8]

This speaks volumes about the failure of the Indian government’s policy of “carrots” used to integrate J&K with India. This is the time when “sticks” ought to be used to abrogate this obnoxious Article from the Indian Constitution.

Possibly the best method is to amend Article 370 (using the powers given by Article 368) and remove the necessity that recommendation from J&K Constituent Assembly is essential to revoke this Article since the Constituent Assembly is not in existence. But even then, state concurrence will be required to revoke it and this concurrence can be obtained through the power of political and financial pressure on the state. This is the most viable way forward.

 [1] Statement said by Mr. Jawarharlal Nehru in Constituent Assembly, (1947-1948)

[2]Arvind Lavakare, The Truth about Article 370, Pg. 13.

[3]Adarsh Sein Anand, The Development of the Constitution of Jammu and Kashmir, 1980.

[4]Supra note 2, Pg. 23

[5]Supra note 2, Pg. 28

[6]Id., Pg. 59.

[7] AIR 1970, SC 1118

[8] National Tehlka Daily, Any Attempt to Revoke Article 370 Will Be Over Our Dead Bodies: Omar http://www.tehelka.com/any-attempt-to-revoke-article-370-will-be-over-our-dead-bodies-omar

Right to freedom of Press (Article 19) v. Right to Privacy (Article 21)

An under-grad student of ILS, Pune

Freedom of speech and expression is one of the important pillars of democracy. Free expression is indispensable to the unadulterated exchange of thoughts and ideas needed to regulate the democratic machinery in India. These free thoughts lead to ideas that formulate public policy. There is need for free expression so as to build political stability and check abuse of power by public officials.

Freedom of press can be said to be a subset of freedom of speech and expression. In the case of Romesh Thappar v. State of Madras , it was observed by Justice Shastri that, “freedom of speech and the press lay at the foundation of all democratic organizations, for, without free political discussion no public education, so essential for the proper functioning of the processes of the popular government is possible.”

In the case of Union of India v. Motion Picture Association , freedom of speech was advocated profoundly. The said judgment upheld free speech as a foundation of democratic society. It is the only kind of freedom, which makes it possible for the people to formulate their own opinion on a proper basis in order to exercise their social, economic and political rights in their free society in an informed manner. Democracy cannot prosper unless people go out and express their views.

Freedom of speech and expression also means freedom to propagate ideas by way of circulation of press. Liberty of circulation is as important as publication by the print media or press. Without circulation, the publication would be worthless.

Nothing in this world is absolute; hence freedom of speech and expression is also subjected to certain restrictions. No person has the right to speak or express any views towards any person or organization if it is not true. This would lead to defamation, which is punishable under both Indian Penal Code, 1860 as well as the law of torts. But in case where a person in good faith believes that certain facts are true about another person or organization then it would not be considered as an offence. Sometimes, when the press meddles in certain court proceedings which hamper the fair process of trial and delivering of justice then the press can also be charged for contempt of court under Contempt of Court Act, 1971. The press should not try to create an opinion among the people as well as the judges towards a certain case, where the outcome may be prejudicial to the interest of the accused. It can be seen that pre-trial publications have not been given importance in the existing laws dealing with contempt.

The Law Commission of India in its 200th Report condemned it and said even pre-trial reports should be brought under the purview of contempt laws. They suggested that arrest should be taken as the starting point of pendency of criminal proceedings and not charge sheet or challan. The Law Commission’s Report can be quoted as under:

“a publication made in respect of a person who is arrested but in respect of whom a charge sheet or challan has not yet been filed in a Court, in our view, prejudices or may be assumed by the public to have prejudiced the Judge, and in that case a procedure, such as the one permitted by Section 3(2) read with Explanation of the Contempt of Courts Act,1971, does not prescribe a procedure which is fair, just and equitable, and is arbitrary and will offend Article 14 of the Constitution of India.”

In the case A.K Gopalan v. Noordeen , the Supreme Court held that a publication made after “arrest” of a person could be considered as contempt if it was prejudicial to the suspect or accused. According to the Law Commission this is the correct approach and the existing law is flawed.

It is to be remembered that the press has no right to intrude into the private matters of an individual unless it is a matter of public interest and moreover not by a mere whim. The movement towards the recognition of the “Right to Privacy” in India started with Kharak Singh v. State of Uttar Pradesh and Others , wherein the apex court observed that it is true that our Constitution does not expressly declare the “Right to Privacy” as a fundamental right, but the said right is an essential ingredient of personal liberty. After an elaborate appraisal of this right in Gobind v. State of Madhya Pradesh and Another , it has been fully incorporated under the umbrella of right to life and personal liberty by the humanistic expansion of the Article 21 of the Constitution.

The observations of the Supreme Court in R. Rajagopal and Another v. State of Tamil Nadu and Others are a true reminiscence of the limits of freedom of press with respect to the right to privacy. "A citizen has a right to safeguard the privacy of his own, his family, marriage, procreation, motherhood, child bearing and education among other matters. No one can publish anything concerning the above matters without his consent – whether truthful or otherwise and whether laudatory or critical. If he does so, he would be violating the right to privacy of the person concerned and would be liable in an action for damages. Position may, however, be different, if a person voluntarily thrusts himself into controversy or voluntarily invites or raises a controversy.”

Article 21 of the Indian Constitution lays down that no person shall be deprived of his life or personal liberty except according to procedure established by law. In Maneka Gandhi v. Union of India , the court necessitated that to deprive a person of his life and liberty; such procedure must not only be established by law but must also be fair, just and reasonable. Thus right to a fair trial emanates from Article 21 which gives to a citizen the fundamental right to protection of life and personal liberty where there should not be any bias made due to the prior one sided or vague news propagated by the press and media . For a court trial to be just and fair it has to be free from bias and the accused has to be given a fair opportunity to prove his innocence.

Like every other right, these two rights also have restrictions. The situation needs to be balanced in these kinds of cases and the ultimate decision in the end lies in the hands of the Honourable Judge or the bench who decide ultimately, which right should be given precedence depending upon the circumstances of the particular case.

 

Picture Credits: http://freespeechdebate.com/en/discuss/ten-arguments-for-and-against-no-platforming/

Notice or a Heads up?

a 4th year student of ITMU Law School, Gurgaon

Notice or a Heads up?

 “Water and air, the two essential fluids on which all life depends, have become global garbage cans.” By Jacques-Yves Cousteau

 

As much as the domain of environmental law needs good lawyers to defend it in a court of law it also needs effective statutes. Statutes must serve the ends of justice rather than the purpose of perpetrators.

It is an undeniable fact that mankind is known for its destructive nature, for we are the only animals who hunt, not merely to feed but for greed. Our debauching thirst for development and expansion gave a boom to industrialization. This in turn resulted in production of unfathomable and unmitigated pollutants. We do recognize the fact that these issues are problematic but are unable to perceive their real intensity. Environment legislations serve as sentinels for protection of mankind. However a chain is only as strong as its weakest link. Our sentinels are equipped with loopholes instead of weapons of defense. We definitely need a wakeup call for we sleep a lot.

Who could possibly deny that a forewarned comes forearmed? The saying holds true when we go through the existing provisions of the Air (Prevention and Control of Pollution) Act, 1981 and Water (Prevention and Control of Pollution) Act, 1974. Current provisions look like handcuffs on the hands of the pollution control authorities. Apparently there is something weird about the existing statutes. It is extremely essential to give a very clear interpretation to the said section to understand the intended purpose and effect of it. Section 21 of the Water (Prevention and Control of Pollution) Act, 1974 focuses on power to take samples of effluents and procedure to be followed in connection therewith. The State Board or any officer empowered by it in this behalf have the power to take, for the purpose of analysis samples of water from any stream or well or samples of any sewage or trade effluent which is passing from any plant or vessel or from or over any place into any such stream or well as per the section. The samples so taken are admissible as evidence in a court of law. Sub-section (3) of Section 21 requires the authoritative person to serve a notice before such evidence is to be collected. In simple terms, if the notice is not served the evidence is not admissible. Section 26 of the Air (Prevention and Control of Pollution) Act is more or less the same. Both the provisions happen to be identical in nature.

The crux of the matter is that the authorities are under an obligation to provide a notice in advance to the owner or the person in charge of the industry about such an investigation. So here is what it actually looks like- “Hello Mr. Thief I am a police officer and I am planning to drop by your house in the evening. Please be ready with all the incriminating evidence if any.”

By now you must have started thinking that there must be something reasonable behind the notice, after all the Indian Legislature would not make such a blunder while drafting an environmental legislation. To your surprise, perhaps the only reasoning is that the notice helps the owners/person in charge to facilitate the process. They are in a position to accumulate required documents and arrange for keys to the locks which are otherwise closed. Frankly speaking the rationale behind the serving of the notice is not even close to what we can call adequately reasonable.

The said notice gives enough time to the owners of the premises to make arrangements which ensure that they have complied with the set norms. That is why India is the cleanest country on paper and the most polluted in reality. Effluent treatment is often a costly business which is directly proportional to what one produces. Due to the immense pressure applied by the Supreme Court by virtue of its decisions, industries have been forced to install appropriate effluent treatment instruments/plants. However these plants are not switched on until and unless the pollution control officer is planning to pay a visit. Industry owners find it convenient to discharge their waste untreated as it saves them a few thousands or lakhs of rupees in the form of electricity and raw materials used in effluent treatment. The rest is taken care of by the lawyers of industries who know how to use a poorly drafted statute to their benefit.

We have already seen what happened in the Vellore Citizens Welfare Forum v. Union of India[1] case where untreated effluents were discharged in the Palar river. The river was polluted to the core. Water of more than 300 nearby wells was rendered unfit for drinking. The lands adjoining the Palar were poisoned due to chemicals making them infertile and unfit for any agricultural purpose. Similarly there are hundreds of industries on the banks of the river Yamuna. The appropriate authorities try to keep a constant vigil on these industries. However Yamuna is still being polluted. If you go to the Wazirabad area in Delhi you would be able to see a blend of effluents being discharged into the Yamuna. Despite massive governmental expenditure on cleaning the Yamuna, the status quo prevails.[2] The Yamuna's polluted stretch was about 500 km from Wazirabad in Delhi to Juhika in the downstream reaches of the river near Etawah in Uttar Pradesh, according to CPCB's 2010 data. Central Pollution Control Board (CPCB) revised report says the polluted length of the river has increased from 500 km to 600 km.[3]

The truth is that the Yamuna cannot be restored. The same applies to any other river which has literally been sacrificed in the name of the industries which deal with toxic chemicals. Our laws look more polluter friendly and less environment friendly. The industries near the Yamuna should be re-examined. And this time the authorities can surely use some surprise element. But this is not possible until and unless our legislature thinks about amending the existing regulations.

Section 21 of the Water (Prevention and Control of Pollution) Act, 1974 and Section 26 of Air Act, 1981 are notoriously unreliable and mischievous in nature. These sections offer undue safeguards for the industry owners.  Money minded industry owners use such regulation to the prejudice of the environment and the people at large. The authorities must be empowered to infiltrate the premises of industries at any time they deem fit and proper.

          There is a strong link between the loopholes in the above statutes and continuous polluting of river and air. Had the authorities been empowered to pay surprise visits to industries, several such industries discharging untreated waste would have been caught red handed and prosecuted. But surprisingly they are not empowered with such authority. Their visits to the manufacturing plants are does not bear the desired results.

       The Supreme Court has also expressed its dissatisfaction towards the slow pace of work despite such a big investment in the Yamuna’s case. The Hon’ble bench of Justices Swatanter Kumar and Madan B. Lokur pointed out – “All the agencies have spent crores of rupees. What is the purpose? What work has been done ultimately?” The Bench noted that despite there being as many as 18 sewage treatment plants to treat the effluents; the treated water has “a high rate of pollution”.

          The real question is not whether the Yamuna is being cleaned or not. The million dollar question is whether we will ever stop polluting it. Evidently the water of the Yamuna still contains toxic chemicals. These are fresh chemicals which were not present earlier. Since the city’s sewage and other drainage channels cannot discharge chemicals in the river, suspicion veers towards the industries situated on the banks of the Yamuna. These industries were given a clean chit by the Pollution Control Board. The approvals so granted could have been a result of notices served under Section 21 and Section 26 of the two Acts. If the visits of the officials of the Pollution Control Board were not pursuant to a notice, the result might have been different.

          Despite the strict attitude of the Supreme Court and the Pollution Control Board it turns out that our statutes have severely failed us.  The key to the answer lies in revamping the existing statutes. Our courts have always given importance to public interest over private interest. Private interest in the present case- that of the ‘right to be present while evidence is taken’ must be relaxed against public interest which is ‘right to safe and healthy environment’.  Since the courts have to stick to the letter of the law while deciding cases, it is equally difficult for them to give a beneficial construction to statutes. Let us hope that the wisdom of our authorities revive before the damage caused by hibernated statutes turns our natural resources into garbage cans.

[1]Vellore Citizens Welfare Forum v. Union of India AIR 1996 SC 2715

[2] See http://indiatoday.intoday.in/story/clean-yamuna-mission-fails-panipat-delhi-stretch-most-polluted/1/199976.html; Also see http://www.dailymail.co.uk/indiahome/indianews/article-2156984/Money-river-Rs1-500-crore-spent-cleaning-Yamuna-goes-drain-Panipat-Delhi-stretch-fails-pollution-test.html  as visited on 15/06/2014

[3] Refer Annual Report (2010) of Central Pollution Control Board available at www.cpcb.nic.in

 

Picture Credits: http://www.epd.gov.hk/epd/misc/BusinessGuide/english/section2.html

Insider Trading and the Chinese Wall Defense

 By Tanaya Sanyal, 5th Year, WBNUJS, Kolkata

 

The concept of a Chinese Wall has been a widely acknowledged method of preventing conflict of interests in financial institutions for a considerable period of time. The House of Lords recognised this principle when they defined a Chinese Wall as the “existence of established organisational arrangements which preclude the passing of information in the possession of one part of the business to other parts of the business” in Bolkiah v. KPMG. [1] Such an arrangement is usually characterised by a physical separation of various departments to prevent leakage of information, an informative and ethics based programme to sensitise the employees of the need to prevent divulging of information, clearly defined situations in which the separation can be compromised and guidelines to regulate such exchange, constant monitoring of compliance with the wall and finally imposition of sanctions in the event of an unauthorised contravention. [2]

The use of The Chinese Wall is not only limited to rein insider trading activities, but has also found widespread application in protecting the integrity of research reports prepared by analysts in mammoth investment concerns. It attempts to insulate the analysts from the banking wing of the organisation, to ensure independence in the research reports based on which investors weigh their options.[3] In this blog post, I shall only be examining the Chinese Wall as a defence to insider trading in the Indian regulatory framework and its viability.

 

1. Regulatory framework in India

Regulation 12 of the Insider Trading Regulations[4] mandates all listed companies and organisations associated with the securities market to frame and adopt a code of internal procedures.[5] This Code must comply with the terms of the Model Code of Conduct[6] which is also annexed to the Regulations. The conditions in the Code can be in addition to what has been suggested in the Model Code but shall not dilute the terms laid down in it. The Model of Code Conduct is divided into two parts: Part A prescribes conditions for the listed companies while Part B lays down conditions for operation of residuary entities such as intermediaries, professional firms and any other entity associated with the securities market.[7]

 

2. Statutory recognition of the “Chinese Wall” principle

As part of the obligations under Part B of Schedule I of the Regulations, entities associated with the securities market shall be required to follow a Chinese Wall policy.[8] The Code speaks of creation of ‘insider areas’ and ‘public areas’ within the organisation, for the purpose of segregation of the two zones. Access to insider areas (zones of confidential information) shall be restricted and segregated from public areas and accordingly, employees engaged in the former shall not communicate price sensitive information to the latter. If in any exceptional circumstance, the employees of the public area have to be given confidential information, it shall be on a ‘need to know’ basis and shall take place within the insider area.[9] Such exchange must be cleared by the compliance officer.

 

3. Enforcement of the principle

It is not feasible to physically segregate the departments of an organisation handling confidential information and those dealing with sales or investment. If the organisation is allowed to trade in client securities, based on the information it has been privy to on account of close association or interaction with any of its client it would be considered as a violation of the Regulations. It is for this purpose that ‘restrictive or grey lists’ have been mandated under the Regulations. [10] For instance, if an organisation by virtue of preparing an appraisal report, credit rating or handling any assignment for a company is privy to price sensitive information, the securities of the company shall be put in a ‘restricted/grey’ list and trading shall be restricted in such securities.[11] The rationale behind such lists is to ensure compliance with the Chinese Wall principle and ensure that the interests of clients of an organisation are not compromised with. To quote a live example, Merrill Lynch, a consultancy firm, was alleged to have engaged in practices that compromised its client, the Douglas Aircraft Co. Merill Lynch was the underwriters working on a public offering by the client.[12] When the underwriters became aware of the fact that the client was going to re-issue a revised estimate of their earnings which was lower than the previous projections, they passed on the information to the sales wing of the firm which subsequently fed the news to many of its other institutional clients. Before the revised estimate was to be published, Merill Lynch, along with its other clients, had dumped large number of shares belonging to the Co. in order to minimise losses.[13] Such examples underscore the need for a restriction on trading in the securities of the client during an ongoing assignment due to the organisation’s knowledge of price sensitive information.

A question thus arises as to why even with the existence of rigid Chinese Wall policies do price sensitive information get abused? Is the policy deficient to address concerns of insider trading.?

 

4.Inadequacies of the Chinese Wall.

It has been averred that the above policy is only equipped to impede accidental exchange of information among the departments of an organisation. It cannot curb those situations when there is a deliberate disclosure of information by the investment advisors to clients as in the case of “givingtips”.

However, at times the firm’s compliance with the Chinese Wall policy can also be counterproductive in light of the duty it owes to its customers. It is an uphill task to strike a balance between the duty to maintain confidentiality of information obtained from its corporate clients and its duty of providing accurate information of all material facts and circumstances to its customers. This is exactly what happened in Slade v. Shearson, Hammill & Co,[14] where Slade did not act on the adverse information of a company’s financial stability that its underwriting department was privy to and continued to recommend stock to its clients. As a result, it was sued –by its clients. The defense of a Chinese Wall did not hold good in court as it was of the opinion that the firm was unable to recognise its ‘conflicting fiduciary relationships’ and its duty not to recommend the said stock which it failed to fulfil. [15] Hence, compliance with the Chinese Wall policy can often conflict with other fiduciary duties in securities trade, producing adverse consequences.

 

5.Conclusion

Hence, from an above analysis, it is clear that the concept of Chinese Walls as existing is not self-sufficient in checking the flow of price sensitive information. It often discourages the traders to comply with the regulations since they cannot perform their duties towards clients with the most updated information available. Also, it discourages collective pooling of resources within an organisation due to watertight compartmentalisation of the various wings. Hence it is argued that the Chinese Wall defense itself will not be a sufficient defence to insider trading. It must be coupled with other defences for the organisation to immunise itself from claims of insider trading. To this end, the additional defences suggested in the J. Sondhi Committee Report may provide useful guidance.[16]

 

SOURCES:

[1] [1998] UKHL 52, Lord Millet.

[2]Id.

[3] Christopher M Gorman, Are Chinese Walls the Best Solution to the Problems of Insider Trading and Conflicts of Interest in Broker-Dealers?, available at http://ir.lawnet.fordham.edu/cgi/viewcontent.cgi?article=1169&context=jcfl (Last visited on March 27, 2014). Hereinafter ‘Regulations’.

[4] Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992.

[5]Hereinafter ‘Code of Conduct.’

[6] Regulations, Schedule 1, Part A & B.

[7] Regulations, Reg. 12(1): “. (1) All listed companies and organisations associated with securities markets including : (a) the intermediaries as mentioned in section 12 of the Act, asset management company and trustees of mutual funds ; (b) the self-regulatory organisations recognised or authorised by the Board; (c) the recognised stock exchanges and clearing house or corporations; (d) the public financial institutions as defined in section 4A of the Companies Act, 1956; and (e) the professional firms such as auditors, accountancy firms, law firms, analysts, consultants, etc., assisting or advising listed companies, shall frame a code of internal procedures and conduct as near thereto the Model Code specified in Schedule I of these Regulations 45[without diluting it in any manner and ensure compliance of the same].”

[8] Regulations, Schedule I, Part B, ¶2.4.

[9]Ibid., ¶ 2.4.5.

[10]Ibid., ¶4.0.

[11] Ibid., ¶ 4.2.

[12]Supra note 3, at 483.

[13]Ibid.

[14] 517 F.2d 398, 400 (2d Cir. 1974).

[15]Supra note 3, at 491-92.

[16] SEBI, Report of the High Level Committee to Review The Sebi (Prohibition of Insider Trading) Regulations, 1992, December 7, 2013, available at http://www.sebi.gov.in/cms/sebi_data/attachdocs/1386758945803.pdf (Last visited on March 25, 2014).

Analysing the Concept Of Universal Jurisdiction, Its Problems And Prospects

  By Shruthee Srinivasan, 4th Year, WBNUJS, Kolkata          

Universal jurisdiction is essentially the mechanism under which the courts of any state may exercise jurisdiction without regard to the territory where the crime has occurred or the nationality of the perpetrators or victims. If governments of different nations collude together to prosecute the criminals, the result would be a host of conflicting laws suggesting different solutions, thus adding to the confusion. Through the idea of Universal Jurisdiction, by vesting jurisdiction in all states, this confusion was somewhat removed.

However, the problem comes in with the question of impartiality of the prosecuting country towards its own or certain nationals. There is absolutely no way to establish that the trial will be conducted in accordance with due process of law and that the prosecutions will be unbiased and impartial. Moreover, most of the crimes committed on an international level are usually politically motivated by one of the more powerful countries that hold a veto power in the United Nations (UN). This is the reason why most countries refrain from using Universal Jurisdiction in crimes committed in their territory.

The significant question, which this essay attempts to answer, is whether the potential benefits surrounding Universal Jurisdiction are worth the risks.

 

Understanding Universal Jurisdiction: History and Development

To understand the working of Universal Jurisdiction, its problems and prospects, it is important to know how the universal application of rights developed over the years.

Traditionally, the law dealing with piracy was designed in such a way as to prevent universal jurisdiction by including only private acts within its definition. Thus, the exemption of official acts of states automatically immunises piracy from coming under Universal Jurisdiction.[1] World War II provided a major thrust to the development of the Universal Jurisdiction concept. In the post war period, various trials were set up for prosecuting the perpetrators of war crimes and crimes against humanity. Some of them included controversial jurisdictional bases and inadvertently contributed to the development of Universal Jurisdiction (UJ) in this period.[2]

Territoriality and nationality are the two heads of jurisdiction that are unquestionably available to states with respect to all offences.[3] With respect to extraterritorial jurisdiction, passive personality – where the nationality of the victim determines the jurisdiction ,– is gradually gaining precedence.[4] Protective Principle allows a state to assert criminal jurisdiction over offences committed abroad by aliens where the offence is deemed to constitute a threat to some fundamental national interest.[5] The numerous instances of courts trying offences committed in allied countries or offences committed against nationals of those allied countries, show the gradual acceptance of the principle of Universal Jurisdiction, and trace its growth and development among the different legal systems of the world.[6]

The Nuremberg trials offer the best-known example among the post-war trials for a controversial jurisdictional issue. The allied powers jointly established the Nuremberg Tribunal and assumed joint authority over Germany.[7] The Berlin Declaration of June 1945 makes it very clear that USA, USSR, UK and French Republic had jointly assumed supreme authority over all powers possessed by the German Government.[8] This was one of the first instances of application of Universal Jurisdiction across state boundaries, though some scholars dispute it.[9]

The Eichmann Case before the Israeli Supreme Court[10] discussed the four schools of thought in this area:

  • One, the power to try and punish a person is universally acknowledged only for the crime of piracy;
  • Two, the extension of universality principle to extra-territorial offences is secondary to the territoriality and nationality principle being applicable;
  • Three, the principle of Universal jurisdiction is applicable to all acts that are offences under the laws of nations (delicta juris gentium); and
  • Four, it is a principle of natural justice that states assume jurisdiction over crimes of a heinous character.

The court ultimately applied Universal Jurisdiction to prosecute Eichmann, thus paving the way for applicability of Universal Jurisdiction over crimes against humanity and other similar heinous crimes. The proponents of Universal Jurisdiction and judges in this case never addressed the flaw in the analogy in applying UJ over piracy and extending it to war crimes and crimes against humanity.

 

Problems and Prospects of Universal Jurisdiction

With the advent of 1970s-1980s, new treaties on Universal Jurisdiction covered crimes such as hijack, crime against safety of maritime navigation, hostage-taking, attacks on internationally protected persons, terrorist bombing and torture.[11] These treaties came to be recognised as a new feature of customary international law and Universal Jurisdiction of crimes was accorded a legal basis. However, a decade later in 1998 when the International Criminal Court (ICC)was set up, it rejected the scheme of universal jurisdiction over territoriality and nationality jurisdiction. This led to the obvious conflict of laws between the international customary law and the treaties jurisdictional scheme.

Parties to ICC statute argued that as per the customary international law, every state had Universal Jurisdiction over genocide, war crimes, crimes against humanity and the ICC jurisdiction was flawed. At the same time, the non-party states led by United States of America, argued that this attempt to bind the non-party nationals is unlawful and against the principles envisaged by ICC statute.[12] One of the many problems associated with Universal jurisdiction of crimes is that there is no common consensus among the states on what is a crime under international law . It is an international body that decides the gravity and heinous nature of the crimes.[13] The underlying assumption that all courts will be law abiding and provide justice is too optimistic and ideal, and ignores the due process problems that may surface.

Lack of judicial independence represents an additional problem in implementing the due process, particularly in politically charged trials. Universal jurisdiction also contributes to interstate problems where large-scale conflicts in the nature of crimes against humanity, genocide or war crimes, lead the courts of one state to question the policies and officials of the other. One state may exercise Universal Jurisdiction as a means of gaining advantage over states it is in conflict with by prosecuting other state nationals.[14] Additionally, Universal Jurisdiction has not been particularly effective in actually moving states to act. The courts in a state are under no obligation to follow the dictates of the courts of another state. The rationale behind allowing Universal Jurisdiction of crimes is that certain crimes are so heinous in nature like genocide, war crimes and such crimes against humanity, that they are considered to have a considerably negative impact on all states. The conditions of territory and nationality fade away in the brutality or the atrocity of such crimes. However, as already seen, there are many drawbacks associated with applicability of Universal Jurisdiction.

 

Conclusion

Universal Jurisdiction may function well at times, but it is impractical and difficult to implement in all situations.[15] In most of the high profile cases where Universal Jurisdiction could have actually resolve the issue, the states did not agree to it. In most of the high profile cases where Universal Jurisdiction could actually resolve the issue, the states did not agree to apply it. Thus, a lot depends on the political scenario and the undercurrents flowing within the states and international organisations. Hence it can be concluded that enforcing Universal Jurisdiction upon states is not as easy as it seems to be ***

 

 


[1] Universal Jurisdiction in a Divided World: Conference Remarks by Madeline H. Morris, Available at http://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=1846&context=faculty_scholarship (Last visited on 25th February, 2013)

[2] Ibid. Page 5

[3] Universal Jurisdiction, Clarifying the Basic Concept by Roger O’Keefe Journal of International Criminal Justice 2 (2004), 735-760, Available at http://documents.law.yale.edu/sites/default/files/O'Keefe%20-%20Universal%20Jurisdiction%20-%202004.pdf (Last visited on 21st February, 2013)

[4] The dissenting judges in the Lotus case [S.S. Lotus (Fr. v. Turk.), 1927 P.C.I.J. (ser. A) No. 10 (Sept. 7)] disputed the position of passive personality principle but with the Arrest Warrant Case, Judge Higgins, Kooijmans and Burgenthal held that ‘passive personality jurisdiction, for so long regarded as controversial, is now reflected..in the legislation of carious countries…and today meets relatively little opposition, as least so far as particular category of offence is concerned.’

[5] Supra n. 3, See also, Lotus case, diss op Loder at 35-3; Arrest Warrant sep. op. Guillaume and Rezak at §4, In the past, at least this principle has been less a general rule than the basis on which a few specific exercises of extraterritorial jurisdiction over non-nationals have been tolerated by states.

[6] United National Law reports on Trial of War Criminals, Available at http://www.loc.gov/rr/frd/Military_Law/pdf/Law-Reports_Vol-3.pdf

[7] Supra n. 1, page 6

[8] Ibid.

[9] Id. Page 8

[10] Attorney General of Israel v. Eichmann, 36 I.L.R. 227 (Isr. Sup. Ct. 1962)

[11] Supra n. 1, Page 12

[12] United States Hostility to the International Criminal Court: It’s all about the Security Council, William A Schabaas, EJIL (2004). Vol. 15, No. 4, 701-720, Available at http://ejil.oxfordjournals.org/content/15/4/701.full.pdf (Last Visited on 25th February, 2013)

[13] It might be the permanent members of the UN Security Council or the NATO or any other such body. For example, the Pinochet government in Chile in 1998 refused to accept charges of genocide, saying that the “group” alleged to have victimized by Pinochet was not a “national, ethnical, racial or religious group” and hence charges of genocide cannot be framed by the other states using universal jurisdiction principle. The genocide charges were consequently retained and the international community could do nothing.

[14] Supra n. 1, page 21

[15] Supra n. 1, page 23

An Analysis of the Law for the Protection of Juveniles from Sexual Offences

  By Nilabha Sharma Advocate, New Delhi

Movies whether good or bad always leave an impression on the viewer. The scene from the film “Highway” which portrayed the actress’s outburst about being sexually abused as a child by her uncle kept haunting me for days. I tried imagining the trauma and the misery of an innocent child subjected to abuse. Sexual abuse of any kind on any person is a monstrous act in itself; more so if a child is subjected to it; who often cannot even comprehend what is happening to him or her.

The problem of child sexual abuse in India and USA at a glance:

The problem of sexual abuse of children is prevalent in the world at large. Even in a country like USA, a study by David Finkelhor, Director of the Crimes Against Children Research Center indicates that 1 in every 5 girls and 1 in every 20 boys is a victim of child sexual abuse.Over the course of their lifetime, almost 28% of U.S. youth aged between 14 to 17 years had been sexually victimized.[i] In India the statistics are indicative of a catastrophe under which the whole society is reeling. A survey undertaken by the Human Rights Watch, an International organisation in 2013 reflected startling numbers – 53% of the children interviewed had suffered one or the other kind of sexual abuse of which 72% of the cases had never been reported to anyone. Only 3% of these cases had been reported to the police.[ii]

Examples are many like Ruchika Girhotra, a 14 year old girl who was sexually abused by a police officer. The police officer was never punished but her family’s harassment and the fact that they were ostracised by the police; drove her to suicide. Other cases include the infamous Nithari killings and the case of Apna Ghar in Haryana, a residential care institution for orphans; where the residents were incessantly raped not only by the authorities, but the children were also coerced into having sex with strangers. The most recent example is the gang-rape and the brutal murder of two teenage dalit girls in Badaun district, UP. Three of the seven culprits involved are still absconding. These are only four of the several hundreds of cases that happen every year, of which only few are reported and the people who report them are subjected to the abysmal behaviour of the authorities that discourage others to report such cases.

Scholars often treat this as a sociological menace, which is true. But it is also a legal failure. Sexual offences against children have been treated under the IPC (Sections like 375, 376 etc.); however no special reference is given to children as such. Under the Juvenile Justice (Care and Protection of Children) Act, 2000, primarily Section 23 – a penal provision deals with cruelty towards children.

The Protection of Children from Sexual Offences Act, 2012 (POCSO):

In 2012, the Indian Parliament passed the Protection of Children from Sexual Offences Act. The Act was drafted as early as 2002 but passed as late as in 2012. The implementation of the Act is still to be seen. The Act on paper seems infallible. It is comprehensive and covers almost all kinds of sexual abuse, be it assault, harassment even pornography. It provides for establishment of special courts and in camera proceedings so that the victim does not feel intimidated. Section 19 elaborately provides for reporting of offences. Section 21 provides for punishment if, after possessing the knowledge of such an abuse, a person doesn’t report it. Though the punishment is not very stringent, however it might be effective for the time being. Special provisions have been provided for recording of statements, etc. which has to be done at home or any other place where the child feels comfortable. The identity of a child is to be protected at all costs, though no penalty is provided for the authorities if they leak out the name of the victim.

The Act establishes the National Commission for Protection of Child Rights as the monitoring body for the proper implementation of the Act. The loopholes that exist are that the Act does not at any instance provide for a child with special needs or one suffering from a physical or mental disability. Moreover the provisions that would ensure that the Act is properly implemented are almost negligible. The penalties provided are severe but changes have to be made in the manner of obtaining of evidences. What has to be made certain is that the victim does not suffer further and the belief of the people in the justice delivery mechanism is strengthened.

Child sexual abuse is shrouded in secrecy and more often than not it is kept buried due to the social stigma attached to it. The victim suffers in silence. The devastating effect it has on a child is incomprehensible. It shatters the soul of an innocent being. The psychological effects are numerous; the victim keeps on reliving that trauma for almost his or her entire life- dragging the burden alone, never sharing it with anyone. The most surprising thing is that the perpetrators of this crime are mostly those people on whom the child has utmost faith like a relative, a close domestic help etc.

Epilogue:

Apart from the implementation of the Act, my personal opinion is that the best way to combat child sexual abuse is through awareness. As soon as the society embraces this problem, understands it, stops ostracising people who talk about it or who come forward with it; the menace of child sexual abuse would be dealt with to a great extent. The further victimisation of the child has to be stopped. The social stigma attached to it has to be done away with. Instead of penalising the perpetrator, the focus should be on how to prevent sexual abuse of children; how to nurture them in an environment where there is no such fear. As a society we have to ensure that justice is done to these innocent victims and not only do we need to ensure that this monstrosity is stopped, but also that other innocent children are not persecuted. If we cannot do this, it shall mark the failure not only of society, but humanity as a whole.

[i] Data as retrieved from http://www.victimsofcrime.org/media/reporting-on-child-sexual-abuse/child-sexual-abuse-statistics

[ii]Human Rights Watch Report “Breaking the Silence Child Sexual Abuse in India”, 2013, retrieved from www.hrw.org/sites/default/files/reports/india0113ForUpload.pdf.

Need for National Legislation on Refugee Law

By Saumya Kumar, Advocate, Lucknow

India has been a shelter for fleeing refugees right from the time of infiltration of the Zoroastrian community into the sub-continent. India has invariably been a safe haven for refugees and in the process, has enlarged its multi-cultural and multi-ethnic fabric. It is relevant to point out that since its Independence India has received expatriates not only from its neighboring countries but also from distant countries like Afghanistan, Iran, Iraq, Somalia, Sudan and Uganda.

India having one of the most stable political structures, and a long and porous boundary has often attracted aliens (foreign nationals) seeking refuge. Even with the massive inflow of refugees in India there is no legislation to regulate their movement. The movement of refugees has been controlled mostly by Executive orders. Although a majority of the European countries have utilized the 1951 Convention on Refugees, most of the South Asian countries including India have neither ratified the Convention nor have they incorporated it in their domestic legal framework. The debate for a national legislation for refugees has been raised by many and requires a proper assessment of the practice undertaken by the Indian Government in this area with the practical feasibility of such legislation. India has dealt with the issues of ‘refugees’ on a bilateral basis[i] with no formal policy on which the practice could be contoured.[ii] Even though there may be a case to distinguish them from the rest of the ‘foreigners’, the current position in India is that refugees are legally identified as foreigners.[iii] This is because there is no separate law to deal with ‘refugees’ and for this reason the refugee ‘status’ in India is determined on a case-to-case basis. Therefore to ascertain the need for the legislation for refugees the actual methodology of the Indian Executive must be examined.

The influx of people from East Pakistan during partition was not considered as a refugee movement as the people were displaced from one socio-political environment to another.[iv] During the struggle over Bangladesh in 1961 a sea of people migrated to India which resulted in India issuing identity cards for the East Pakistanis and welcoming them with open arms. This was eventually discarded in March 1958, since by then there were already around 8 lakh refugees in some 150 camps across West Bengal. It was only after the number of refugees increased exponentially and posed a threat to the strained resources of the country that some focus was shifted in this direction which eventually materialized re-habilitation programs for the migrants already living in the camps in West Bengal.[v] From 1958, the scattered scheme of the Government was consolidated to arrive at a comprehensive regional development program. The Government focused on transferring the migrants to other states as a part of the rural assistance program which led to the Dandazkaranya Project. Over a period of time it has been accepted that the position of these individuals has ceased to be that of a refugee in the legal sense and in the material sense as well.[vi]

With regard to the Chakma Refugees, the Government of Assam provided shelter to them and then shifted them to Arunachal Pradesh where the Government eventually initiated the Chakma Resettlement Scheme. The presence of the Chakmas and their settlement schemes threatened the residents of Arunachal Pradesh supported by the State Assembly which passed a resolution demanding that the Chakmas must be removed from their territory which was not in consonance with the Central Government objectives.[vii]Consequentially, the Chakmas were not sent back and have been living in parts of Assam and Arunachal Pradesh ever since. In the meantime the Chakma refugees living and flourishing in Arunachal Pradesh have even tried to acquire Indian citizenship which was disallowed by the Indian Supreme Court but the Central Government refused to provide any guidelines about the status of these people.

For the Tibetan Refugee, the Indian Government much like the East Pakistani migrants, established a massive centre with adequate facilities. Something which was considered as a temporary affair at that time lasted for a very long duration which made the return of the Tibetan refugees to their homeland in the immediate future seem impossible.[viii] Where on one side the migrants of East Pakistan were ready if not eager to settle and blend into the Indian society, the Tibetan refugees insisted under the leadership of Dalai Lama that their cultural identity must be duly maintained.[ix] Since the Tibetan community has mostly refused to acquire Indian citizenship, the Indian Government has tried to assist them by providing them certificates of identity so that they can apply for jobs in the country.[x]

In Tamil Nadu, the Government has shown a more supportive role to the Tamilian refugees from Sri Lanka. It has been identified that Sri Lankan refugees have been given complete freedom with regard to movement in the country more like the mandate ascribed in the Convention.[xi] The Government has issued certificates to these refugees to facilitate admission process in colleges and universities and some places even provide special quotas for these refugees. Subsequently, with the assistance of the UNHCR, massive repatriation program under the Indo-Sri Lanka Peace Accord was initiated which succeeded for some time but a new burst of ethnic clashes led to another round of migration and many safe havens were created for them.[xii]

It can be observed that the Indian Government has been very focused on the rehabilitation process of individuals moving across the borders even if the refugee status of the person is not determined. It is further observed that this helping hand is available only when there has been a substantial change in circumstance in the home country. The Executive does not limit its task to the establishment and rehabilitation of the refugees but focuses on the repatriation program as well. In this regard it is to be noted that the repatriation program has been initiated and pursued only where the support of the home country is available as extended by Sri Lanka and Bangladesh and nothing much could be done for the Tibetans as there was no consensus with the Chinese Government in this regard.

[i] Sarbani Sen, ‘Paradoxes of the international regime of care: the role of the UNHCR in India’, in Ranabir Samaddar (ed.) Refugees and the State: Practices and Asylum and Care in India, 1947-2000 (2003) p. 398

[ii] Ibid

[iii] Myron Weiner, Rejected Peoples and Unwanted Migrants in South Asia, Economic and Political Weekly, Vol. 28 (1993), pp. 1737-1746 at p. 1739.

[iv] US Committee for Refugees and Immigrants, Country Report for India 2006, at http://www.refugees.org/countryreports.aspx/id=1558

[v] Ibid

[vi] Jacques Vernant, The Refugee in the Post-war World, (yale university Press, 1953) pp. 740

[vii] Supra note i

[viii] Ibid

[ix] Lousie W Holborn, Refugees: A Problem of Our Time (The Sacarecrow Press Inc.) Metuchen, New Jersey, 1975) p. 718

[x] Dawa Norbu, ‘Motivational Crisis in Tibetan Education System : Some Personal Reflections’, Tibetan Review (May 1994) pp.13-14

[xi]UNHCR, ‘Burden-Sharing- Discussion paper submitted by UNHCR Fifth Annual Plenary Meeting of the APC’, ISIL Yearbook of International Humanitarian and Refugee Law, Vol. 17 (2001), at http://www.worldii.org/int/journals/ISILYBIHRL/2001/7.html

[xii] Cornellis D.Jong de, “The Legal Framework: The Convention Relating to the Status of Refugees and the Development of Law Half a Century Later” International Journal of Refugee Law, vol.10(1998),pp.688-99

Labor Law Reforms- Is flexibility the only resort left?

 By Ayushi Singhal,

3rd Year, WBNUJS, Kolkata

 

Introduction

After the recent clean sweep victory of the right wing party in the elections of the largest democracy in the world, the talk for reforms in the Labour Laws of India (which are more than 250 in number) has begun again. Reforms like flexibility in these laws have been demanded by many liberalists like Mr. Kaushik Basu time and again.

Since the subject of labour is included in the concurrent list, the states can change their own laws. Some states like Gujarat have already made amendments in their laws by allowing industries in the Special Economic Zones to lay off workers without permission. These amendments have been lauded by various economists[i] and after Mr. Modi’s debut on the national political scene; there is a hope that he will apply the same for the whole of India. He envisages this as a necessary step in bringing up the contribution of the manufacturing sector (which is right now only 15%) by attracting foreign investment.[ii]

 

Analysis

The Goldman Sachs Report has also stated that more flexible laws like that in Gujarat, as opposed to the pro labor laws in West Bengal are beneficial for economic growth.[iii] However, one needs to cogitate upon the fact that- is flexibility the only option left? For this we need to analyze the problem which we seek to rectify.

Here, I will focus on the one related to the Industrial Disputes Act (“IDA”), 1947. This Act, which was legislated a few months before our country’s independence, guides the hiring and firing policy of the industries. An amendment which was made in the Act in the 1980’s asks an industry employing more than 100 workers to get permission from the state government before firing any of these workers. The industry also needs to take permissions before winding up even a sick unit. Moreover, it is required that the workers be given a 21 day notice before alteration in work, wages and other terms and conditions of work. This permission is seldom given and the process to attain the same is lengthy and circuitous, which has had several adverse consequences.

 

Arguments For Flexibility

What might happen is that a company might just be ready to give labourers higher wages for a particular period of time, but since the firm cannot remove workers all of a sudden, it will have to spread those wages for a longer period of time, which is only counterproductive. Moreover, some industries which have a volatile demand have not been exploited well in the fear of this legal regime.

It has also been alleged that this very policy has held back the growth of India’s manufacturing sector since this permission is seldom given,[iv] making the dismissal even in the extreme circumstances very difficult. To avoid this, the employers become extra wary while hiring which ultimately leads to the dwindling of potential jobs.

They cannot increase the workforce even during the time of a boom, since they cannot be removed when the market falls. These have added the burden of extra costs (both direct and indirect) which further decrease competitiveness. The long lines for the dates of cases and their disposal along with the unchecked corruption make the adherence to these guidelines much more difficult.

Consequentially, to avoid coming under the umbrella of industries that ought to follow these rules, firms generally limit the number of their formal employees below 100, leading to the increased hiring of contract labour. These laborers are not only more often than not paid less, but also have no job security. New labour saving technologies have been devised which replace human labour. There has also been a tendency to resort to grease the palms of officials in order to get rid of the consequences of retrenchment.[v]

This has led people, including economists and lawyers to believe that the pro-worker legislation is harming workers more than it is helping them.[vi] A civil servant believes to such an extent that there is a causal relationship between these laws and the “low number of intermediate-sized firms”.[vii] A study by World Bank has in fact rated India – 48 out of the highest 100 in terms of rigidity, whereby China scoring a 30 and Singapore scoring equivalent to 0.[viii]

 

Suggestions

Having understood that this requires a change, what is needed is a policy which achieves the dual objectives of development of the manufacturing sector along with the welfare of workers. As mentioned earlier, flexibility in these laws has been one of the obvious methods suggested to get rid of this impasse. Others include simplification of these laws, introduction of self-certification akin to the states of Gujarat, Maharashtra and Rajasthan and the reforms in the dispute settlement mechanism.[ix] I will restrict my criticism to the demand for flexibility, since other reforms are beneficial ‘directly’ (as argued by many, flexibility is ‘indirectly’ beneficial to the employees) both to the labourers and the industries.

Flexibility will naturally come in the form of removing the need for seeking permissions for the removal of workers or winding up the industries. Now even if we accept the argument that there is an established causal relationship between the prosperity in developed countries (like Norway) and the flexible labour reforms; we do not have similar social security schemes like an unemployment insurance program etc., which may decrease the effects of bringing flexibility in these policies. In the absence of such measures, bringing flexibility in these laws can pose a huge threat to the workers who are dependent on the industries for their livelihood.

We are living in a myth whereby we conceive everyone to be ready for the developmental changes, which however is not the case for one and all.[x] If we envisage building labour laws in the same mould as these countries, which take bold steps of removing workers from sick units, we should not forget that the ideas like celebrating ‘May day’ are the brain child of these nations only.

Since the problem arises due to the lengthy and time consuming mode of taking permission and because of the few cases who ultimately receive such permissions, changing the regulatory mechanism can be an alternative consideration. This implies that the means rather than the end should be changed. For instance, there are numerous adjudicating authorities under the IDA like conciliation officers, conciliation boards, courts of inquiry, labour courts, industrial tribunals and the national industrial tribunal. This increases the complexity of the process. This complex procedure makes the survival of these companies a difficult task.

 

Conclusion

The construction of a mechanism which ensures quick disposal of permission related processes will be helpful to the employers in adapting to the market changes and will also not harm workers. However even here, the authority should make sure that the permissions are given after proper assessment of all the factors involved. We need to realize that this efficiency, which we might bring by vouching for flexibility, may not necessarily transform into prosperity for people at the lowest rung of the corporate chain. Having said this, we will have to make the workers adept to adjusting to changes in the economic environment.[xi]

Nevertheless, whatever reforms we cogitate to bring in, they should not instill fear in the minds of workers of being laid off any time. This can be ensured by making workers aware of the reasons for the change we decide to bring about in the laws. Until all this is achieved, reforming the implementation of these laws is a far better option than changing these laws wholly.

[i] http://siteresources.worldbank.org/INTDECSHRSMA/Resources/india.pdf

 [ii] http://news.valleyindiatimes.com/2014/06/a5.html

 [iii]http://timesofindia.indiatimes.com/business/india-business/Goldman-thumbs-up-for-Gujarat-model/articleshow/32878950.cms

 [iv] http://news.bbc.co.uk/2/hi/south_asia/4103554.stm

 [v] http://siteresources.worldbank.org/INTDECSHRSMA/Resources/india.pdf

 [vi] http://pragati.nationalinterest.in/2013/11/labour-market-reforms-in-india/

 [vii] http://pragati.nationalinterest.in/2013/11/labour-market-reforms-in-india/ “A recent study by International Finance Corporation compared the sizes of the typical Indian, Mexican, and US firms at start-up and at the end of 35 years and found that their size declined by a fourth in India whereas it doubled in Mexico and rose 10 times in the US.”

[viii] http://pragati.nationalinterest.in/2013/11/labour-market-reforms-in-india

[ix][ix] http://articles.economictimes.indiatimes.com/2014-03-13/news/48189392_1_labour-stringent-laws-archaic-laws

[x] http://www.bim.edu/index/doc/labour-reforms.pdf

 [xi] http://pragati.nationalinterest.in/2013/11/labour-market-reforms-in-india/

Cyber Defamation – Response of Information Technology Act

Anupama Sharma, Advocate, Rajasthan

“Speech has consequences. Lies, implicit or actual, can inflict real monetary and emotional harms”[i]

 

Defamation: A Cyber Crime.

Information Technology came up as a boom to the society and increased its expanse at an explosive speed. But with every bane comes a bane. Soon, we all were aware of the term, ‘cyber crimes’ i.e. crimes prevailing in the cyber world.[ii]Defamation is one such cyber crime. It is well recognized under the Law of Torts and is penalized under section 499[iii] of the Indian Penal Code, 1860. In the year 2000, an attempt to regulate the cyber world was made in the form of the Information Technology Act. However, till date, we do not have any concise definition of ‘cyber/ E/ Internet defamation’ under the Information Technology Act. Does it mean that the Freedom of Speech and Expression guaranteed under Article 19(1) of the Indian Constitution stands unregulated in the context of defamation on the internet? For deep understanding, we need to first mention the main constituents[iv] of defamation; i.e.

  • the content must be defamatory, which is likely to harm the reputation of the person concerned; which can be made through speech (spoken or written), signs or representations and;
  • most importantly it must be published. By ‘published’, what is meant is that the defamatory content must have come to the knowledge of a third person other than the one defaming and the one defamed. The test of defamation can be such that on reading the published material, it should give a wrong impression to the reader about the person being spoken or written of

The next question that arises is: can there at all be an ‘e-defamation’? In this age, internet has touched human lives in a manner that it has become one of the fastest and most widely used mediums. It has promoted[v] freedom of speech and expression through effective ways of communication, exchange of information, ideas and opinions.[vi]

In such circumstances, chances of defamation cannot be ruled out. There can be defamation on the internet through various means[vii] since it provides a user friendly interface[viii] which facilitates freedom of articulation and information. Publication can be made through mailing lists, newsgroups where discussions are held, World Wide Web, blogs, etc. But is our law equipped to deal with such ‘e- defamation’?

 

How our law deals with Defamation?

Since the Information Technology Act does not specifically deal with cyber defamation, can the ambit of section 499 of the IPC be extended to cover cyber/e-defamation? The Indian Penal Code can certainly be used since the ambit of section 499 seems to be broad enough to cover cyber defamation and is internet-neutral. A major setback in terms of dealing with e-defamation is that the Information Technology Act, 2000 which has been specifically designed to regulate Information Technology does not in clear terms cater to such e-defamation; which consequentially reduces the deterrence or control over the internet users. However, defamation can be read under Section 66A(b)[ix] of the Information Technology Act. But it is a matter of interpretation and when there is a specific law catering to the cyber world, provisions that specifically cater to acts of defamation must also be drafted to fill the vacuum.

 

Difficulty of holding liable!

When analyzed practically, it can be argued that internet service providers (ISPs) must be held responsible for any publication of defamatory content since they provide the platform and hence must keep a check on the possible misuse of it. The Indian Penal Code, under section 501[x] does hold them liable. On similar grounds, Section 79[xi] of the Information Technology Act, 2000 puts liability upon ISPs in case they conspire, abet, aid or induce in publication of defamatory material. However, he won’t be held liable if he is merely providing access to the communication forum. Due to this proviso, it becomes extremely convenient for the ISPs to take the defense of merely providing access and their inability to keep a check due to the wide usage of internet.

Amending the act and adding a provision which criminalizes defamation will not serve the purpose. When looked from the mirror of practicality, it is a far complex problem.

The very fact that internet has become a global phenomenon and has spread its reach at an alarming rate, controlling it is becoming a mammoth task. When a person posts a defamatory content about another person, it becomes highly difficult to trace the origin (place of occurrence) since a person might have posted it from a fake profile and from a public computer which renders it impossible to track the offender. Moreover, even if the offender can be identified, the issue of jurisdiction creeps in. If the offender posted the defamatory material from place ‘X’ and he is a citizen of place ‘Y’ and the person who has been defamed belongs to place ‘Z’; in such cases ascertaining jurisdiction over the matter and the applicability of the laws becomes the moot question.

 

Conclusion and a proposed solution:

What can feasibly be done is that every service provider must have a supervisory panel which designs the communication interface in a manner that it screens the material that is being posted before it comes to the public domain. But in the process of screening, it needs to be taken care of that the thin line between defamation and freedom of speech and expression is not crossed. The thin line can be maintained if the text which has the potential of being defamatory and is otherwise not important to be shared as a public opinion is discarded; for example ‘XYZ is not a good politician and doesn’t know how to take his own decision’; might seem defamatory but it is fair to be shared in public as an opinion because it relates to his competence in his ruling abilities. But at the same time a statement such as ‘XYZ has an extra marital affair’ is not an ‘important’ opinion which needs to be shared and at the same time seems to be defamatory hence could be discarded.

To tackle the two possible problems with this test i.e., (1) handling the increasing internet traffic and (2) understanding of a statement to be ‘defamatory’ might vary as per perceptions. What possibly can be done is separate domains must be allocated to supervisory panels and their code of functions must be framed according to which each department/panel should keep a check on its respective domain. It can further be decentralized on the level of various ISPs who provide such communication forums. The ones who are benefiting the most from this lacuna of proper regulation are the Reputation Defence Services[xii], who are minting profits for destroying the defamatory material from the internet.

But one thing must be remembered, we are the creators of the cyber world and we must operate and let it grow in a manner that it remains within our reach.

 

[i] Ann Bartow,Internet Defamation As Profit Center: The Monetization Of Online Harassment, Harvard Journal of Law and Gender Seq 1 ; June 2009;Pg 133: http://ssrn.com/abstract=1447472

[ii] Bhakta Batsal Patnaik; Deeptakirti Verma, Quelling the CyberCrime challenge: Law relating to Computers, Internet and E-Commerce-A guide to Cyber law

[iii] “Whoever by words either spoken or intended to be read, or by signs or by visible representations, makes or publishes any imputation concerning any person intending to harm, or knowing or having reason to believe that such imputation will harm, the reputation of such person, is said, except in the cases hereinafter excepted, to defame that person.”

[iv] Section 499 IPC

[v] Farzad Damania, The Internet: Equalizer Of Freedom Of Speech? A Discussion On Freedom Of Speech On The Internet In The United States And India,12 Ind. Int’l & Comp. L. Rev. 243 2001-2002

[vi] Kamini Dashora, Journal of Alternative Perspectives in the Social Sciences: Cyber Crime in the Society: Problems and Preventions, ( 2011) Vol 3, No 1, 240-259

[vii] Bhakta Batsal Patnaik; Deeptakirti Verma, Quelling the CyberCrime challenge:: Law relating to Computers, Internet and E-Commerce-A guide to Cyber law

[viii] Bhakta Batsal Patnaik; Deeptakirti Verma, Quelling the CyberCrime challenge:: Law relating to Computers, Internet and E-Commerce-A guide to Cyber law

[ix] Any person who sends, by means of a computer resource or a communication device ; any information which he knows to be false, but for the purpose of causing annoyance, inconvenience, danger, obstruction, insult, injury, criminal intimidation, enmity, hatred or ill will, persistently by making use of such computer resource or a communication device, shall be punishable with imprisonment for a term which may extend to three years and

with fine.

[x] Whoever prints or engraves any matter, knowing or having good reason to believe that such matter is defamatory of any person, shall be punished with simple imprisonment for a term which may extend to two years, or with fine, or with both.

[xi] Network service providers not to be liable in certain cases.- For the removal of doubts, it is hereby declared that no person providing any service as a network service provider shall be liable under this information or data made available by him if he proves that the offence or contravention was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence or contravention.

[xii] Ann Bartow,Internet Defamation As Profit Center: The Monetization Of Online Harassment, Harvard Journal of Law and Gender Seq 1 ; June 2009;Pg 133: http://ssrn.com/abstract=1447472

 

Prevention of sexual harassment at workplace

 

By Shinjini Kharbanda,

Associate, Phoenix Legal, New Delhi

 

The recent sexual harassment case of Tarun Tejpal (editor of investigative journalism magazine, Tehelka) has brought to the fore the inept redressal of sexual harassment complaints within the Indian companies. The Supreme Court of India in 1997, for the first time, acknowledged sexual harassment at the workplace as a human rights violation in Vishaka and others v. State of Rajasthan[i] (the Vishaka judgment). This judgment made it mandatory for employers at all workplaces to observe the guidelines laid down therein.

However, the law dealing with this pertinent issue has been enacted almost 16 years after the judgment on the Vishaka case was passed. The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013; (hereinafter the Act) aims at providing “protection against sexual harassment of women at workplace and prevention and redressal of complaints of sexual harassment.”[ii] It was notified by the Central Government on December 9, 2013 and it replaces the guidelines provided in the Vishaka judgment.

In addition, the Parliament has strengthened the penal law whereby it has included punishment for sexual harassment in the Indian Penal Code, 1860).[iii] The duty of employer includes that he must provide assistance to a woman employee if she opts to file a police complaint or he can by himself initiate action against the perpetrator under the Indian Penal Code, 1860.[iv] Further, the Supreme Court has also taken a proactive approach by introducing the Gender Sensitization and Sexual Harassment of Women at Supreme Court of India (Prevention, Prohibition and Redressal) Regulations, 2013.

I Sexual Harassment and Workplace – Definition

The definition of ‘sexual harassment’ stipulated in the Act includes any unwelcome sexually determined behaviour such as physical contact and advances, demand or request for sexual favours, sexually coloured remarks, showing pornography, or any other unwelcome physical verbal or non-verbal conduct of sexual nature. This wide definition takes into account direct or implied acts of such nature.[v]

The Act stipulates that a woman should not be subjected to sexual harassment at any workplace. As per the statute, the presence or occurrence of circumstances that imply the promise of preferential treatment in employment; the threat of unfavourable treatment in employment; the threat about present or future employment; interference with work or creating an intimidating or offensive or hostile work environment; or humiliating treatment which is likely to have an adverse effect on any lady employee’s health or safety falls within the purview of sexual harassment.[vi]

The Act has provided a wide connotation to the term ‘workplace’. It takes into account the actual place of work and the areas connected to it including the transport that the employee uses for commuting to her workplace. Also, the Act is applicable to both the organised as well as the unorganised sector in India.

II Constitution and Working of Internal Complaints Committee

The Act mandates the establishment of Internal Complaints Committee at all branches or offices of organizations where at least ten or more employees are employed.

The constitution of the Committee is as follows:

1. It should be headed by a women employed at a senior level.

2. Half of the members should be women.

3. It should include a third party NGO/other body.

4. Two persons amongst employees committed to the cause of women/experience in social work/legal knowledge should form part of the Committee.

The maximum period for which any member can occupy a position in the Committee is three years.

Interim Reliefs – During pendency of enquiry, the complainant may be transferred or granted leave if so requested. Further, the accused person can be restrained from reporting on the work performance of the complainant.

A report pertaining to the findings of the said committee should be given to the employer within ten days. If the act of sexual harassment is proved then action must be taken against the offender under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013 or the compensation to the complainant is to be deducted from the salary of offender. The Act clearly mandates that the employer has 60 days to act upon the recommendations of the Internal Complaints Committee.

The following courses of action can be taken against the offender:

a)      Written apology;

b)      Warning;

c)      Reprimand;

d)      Withholding increments/promotion;

e)      Termination from service;

f)        Undergoing counseling session; and

g)      Carrying out community service.

If the complainant wishes, the Committee can settle the matter through conciliation (but not as a monetary settlement). When the matter is settled in this manner, terms of settlement have to be then communicated to the Employer who shall then take action. If conciliation is not preferred by the aggrieved female employee then an inquiry has to be conducted by the said Committee.

Also, the Committee must prepare an annual report to be submitted to the Employer and the District officer of the district where the organization is situated.

III Obligation of Employers

The employer’s obligations under the Act are as follows:

a)      Providing a safe working environment at the workplace;

b)      Displaying at the workplace, details of – the penal consequences of indulging in acts of sexual harassment, composition of the Internal Complaints Committee and the availability of the grievance redressal mechanism for aggrieved employees;

c)      Providing necessary facilities to Internal Complaints Committee for presiding over enquiry and dealing with complaints;

d)      Taking disciplinary action when an allegation of sexual harassment has been proved;

e)      Encouraging employees to raise any issue of sexual harassment;

f)        When an outside party is alleged to have subjected employee to sexual harassment, helping the employee to initiate action against such person; and

g)      Carrying out employee awareness programs.

IV Penalties

The Act has imposed a penalty of fifty thousand rupees for:

(a) Non-establishment of internal committee by the organization.

(b) Not submitting the annual report by the Internal Committee.

(c) Not submitting the inquiry report by the Internal Committee.

(d) Not taking action against false complaint/evidence.

The Act also provides that if an employer is convicted again for same offence then he may be punished with twice the punishment as prescribed under the Act. Moreover his licence may be cancelled or the registration required by him for performing his business or activity may be withdrawn or not renewed.

V Conclusion

It is about time that society shows a ‘zero tolerance’ attitude towards this shameful act. These humiliating acts tend to discourage women from taking up vocations of their choice or force them to be silent sufferers at the workplace.

This beneficial piece of legislation cannot be considered to be an all- encompassing one as it has to plug a few loopholes. As matters of sexual harassment demand sensitivity and responsible action from the managing authority, conciliation as mode of settlement of said issue may not be a favourable measure. Such an act of harassment causes a psychological impact on the aggrieved woman and she may not be in a stable frame of mind to settle this issue through conciliation. Also, this legislation poses a daunting task for the employer to establish Internal Complaints Committee at every office of the organisation. Further, the time bound redressal of such matter by the employer may face roadblocks as these issues need thorough investigation and assessment of the complaints.

Nevertheless, it is a significant and positive step that a law governing sexual harassment at the workplace has been codified, as it has established a formal system for tackling this grave issue.

 

[i] AIR 1997 SC 3011

[ii] Preamble to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

[iii]Section 354A-‘Sexual harassment and punishment for sexual harassment’ has been added by the Criminal Law (Amendment) Act, 2013. The punishment for sexual harassment varies between 1-3years depending on the nature of the crime. The Criminal Law (Amendment) Act, 2013 has provided that crimes of this nature will now be considered as bailable offence

[iv] Section 19(g) and Section 19(h), The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

[v] Section 2(n), The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

[vi] Section 3, The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013