The Criminal Law

THE CRIMINAL LAW (AMENDMENT) ORDINANCE, 2018 – ANALYSIS OF THE COHERENCE OF THE STEP BY THE GOVERNMENT

The Criminal Law (Amendment) Ordinance, 2018 (“Ordinance”), as promulgated by the President on 21st April, 2018, provides for certain amendments in the Indian Penal Code, 1908 (“IPC”), Indian Evidence Act, Code of Criminal Procedure, 1973 (“CrPC”) and Protection of Children from Sexual Offences Act (“POCSO Act”). The Ordinance has brought in some positive changes to the aforementioned statutes as following:

  1. NEW OFFENCES UNDER THE IPC:
  2. Age Group: Below 12 years

Offence: Rape

Punishment: Rigorous imprisonment of at least 20 years extendable to life imprisonment, along with fine, or, death.

Provision: Section 376AB of IPC

 

  1. Age Group: Below 12 years

Offence: Gang Rape

Punishment: Life imprisonment, along with fine, or, death

Provision: Section 376DB of IPC

 

  1. Age Group: Below 16 years

Offence: Rape

Punishment: Minimum rigorous imprisonment of at least 20 years, extendable to life imprisonment, along with fine

Provision: Section 376(3) of IPC

 

  1. Age Group: Below 16 years

Offence: Gang Rape

Punishment: Life imprisonment, along with fine.

Provision: Section 376DA of IPC

 

  1. AMENDMENTS TO CrPC, :
  • Time-bound investigation: The Ordinance amends Section 173 of CrPC, thereby reducing the time for completion of investigation from the earlier prescribed period of three months to two months.
  • Appeal: The Ordinance amends Section 173 of CrPC, thereby providing that an appeal against a sentence related to rape cases must be disposed of within six months from the date of filing of such appeal.
  • Anticipatory Bail: The Ordinance amends Section 438 of CrPC, thereby restricting the grant of anticipatory bail in cases under Section 376AB, Section 376DB, Section 376(3) and Section 376DA of IPC.
  • Day-to-day trial: U/s 309 of CrPC, inquiry or trial in the proceedings shall be continued from day-to-day, until all the witnesses have been examined. The Ordinance extends this provision to cases under Section 376AB, Section 376DB, Section 376(3) and Section 376DA of IPC.
  • Compensation: Section 357B of CrPC provides that the compensation u/S 357A of CrPC payable by the State Government to the rape victim and the dependents shall be payable, in addition to the fine payable to the victim u/S 326A or section 376D of IPC. Apart from this, Section 357C of CrPC provides the victim shall be provided first-aid or medical treatment free of cost at all hospitals run by the Central Government, the State Government, local bodies or any other person These two provisions i.e. Sections 357B and 357C have now been extended to cases under Section 376AB, Section 376DB, Section 376(3) and Section 376DA of IPC.

 

  1. AMENDMENTS TO THE INDIAN EVIDENCE ACT, 1872 :

In Section 53A of the Indian Evidence Act, evidence of character or previous sexual experience of the victim is not relevant where the question of consent is in issue. Further Section 146 of the Act provides that when a witness is cross-examined, he may be asked any question which tends to test his veracity, to discover who he is and what is his position in life, or to shake his credit, by injuring his character. Both these provisions i.e. Sections 53A and 146 have now been extended to cases under Section 376AB, Section 376DB, Section 376(3) and Section 376DA of IPC.

 

COMMENT:

The amendment enhancing the punishment for offenders is a step forward. The Ordinance has introduced less ambiguous provisions which are more stringent which may act as a deterrent to curb the commission of the offence. It effectively addresses the heinous crimes against the girl child. However, there is also a need to provide for similar provisions which address similar offences against the male child under the age of 12 years. For this, the government has proposed to amend the POSCO Act to make it more gender neutral.

 

CCI corporate law firms in delhi

A TURF WAR BETWEEN CCI AND TRAI HAS MOVED THE SUPREME COURT

An information under Section 19 (1) of the Competition Act, 2002 (hereinafter referred to as “Act”), was filed by Reliance Jio Infocomm Limited (hereinafter referred to as “RJIL”) in 2016 before the Competition Commission of India (hereinafter referred to as “CCI”) against the Cellular Operators Association of India (hereinafter referred to as “COAI”), Vodafone India Limited, Bharti Airtel Limited and Idea Cellular Limited (hereinafter referred to as the “Opposite Parties”), alleging “cartelisation” by acting in concert and denying adequate Point of Interconnections to RJIL.

The information addressed an attempt by the above-mentioned telecom giants to frustrate RJIL’s new project/entry in the telecom market, which resulted in “congestion” and thus failure of calls of RJIL, on other operators’ networks. This alleged action in concert falls within the ambit of Sections 3 and 4 of the Act. CCI had passed an order under Section 26(1) of the Act on 21.04.2017, holding that there was prima facie contravention of Section 3(iii) (b) of the Act as the aforementioned telecom companies appeared to have entered into an agreement amongst themselves along with COAI, and have acted in a concerted manner to restrict RJIL’s entry into market and to further, deny the Point of Interconnections to the RJIL, thus, directing an inquiry by the Director General against the Opposite Parties.

The telecom companies challenged the above order passed by the CCI before the Bombay High Court. The show cause notices issued by Director General were also challenged.

The Bombay High Court in the case of Vodafone India Limited & Ors. v. The Competition Commission of India & Ors. [2017]144SCL580(Bom.), was of the opinion that the order passed by the CCI had caused great injustice, hardship and prejudice to the legal rights of the service providers. On the question of jurisdiction of the Telecom Regulatory Authority of India (hereinafter referred to as “TRAI”) or CCI, the court opined that the Act aims to ensure fair competition in the market and to avoid appreciable adverse effects on competition, while the Telecom Regulatory Authority of India Act, 1997 (hereinafter referred to as “TRAI Act”) regulates the telecommunication services, adjudicates the disputes and protects the interests of the service providers and the consumers. According to the court, the clauses under the agreements entered between the various service providers/Petitioners and RJIL require strict interpretation by the appropriate authority under the TRAI Act, for adjudication of the allegations raised and to determine the rights and obligations of the parties. If there is any non-compliance or breach of clauses, the dispute is required to be redressed before the appropriate Authority under whose control the rights and obligations are defined, and CCI is not the right forum for the same.

The Commission has overlooked Section 21(A) of the Act which empowers it to refer the matter to the competent authorities in case of any doubt or clarification of issues, and instead has ousted its jurisdiction to decide the contractual terms, rights and obligations between the service providers, arising out of the contracts they enter into, who are governed and regulated by the TRAI Act. It was not right on the part of CCI to have proceeded for inquiry and investigation, by expressing “prima facie opinion” under Section 26(1) of the Act.

In particular, in case of any dispute or any question of interpretation of contractual terms between the telecom service providers and RJIL, it will be dealt with and decided by the authorities under the TRAI Act and not by the CCI. Though, there is no conflict of jurisdiction of the two authorities, but the authority under the Act itself is not sufficient to decide and deal with such issues. Every aspect of telecommunication market is to be regulated and controlled by the concerned department under the TRAI Act. Thus, it was held that the CCI, overlooking the provisions of the TRAI Act, independently proceeded and directed for the investigation, which was held to be “perverse, illegal and impermissible” by the Bombay High Court.

This decision of the Bombay High Court declining the authority of CCI has now been challenged in five petitions before the Hon’ble Supreme Court by CCI and RJIL claiming that the CCI has the right to direct investigation into RJIL’s allegations under Section 26(1) of the Act, which is pending till date. Recently, TRAI has also filed an Intervening Application claiming that it has the ‘exclusive jurisdiction’ on the matters of telecom sector. Meanwhile, a stay has been granted to the investigation into the alleged actions of Bharti Airtel, Vodafone India and Idea Cellular/ Petitioners.

Daichi corporate law firms in delhi

Delhi High Court allows enforcement of Arbitral Award against Ranbaxy’s owners

The High Court of Delhi on 31.01.18, allowed a Japanese drug maker Daiichi Sankyo Company Ltd., to enforce a Foreign Arbitral Award passed by a Singapore Arbitral Tribunal, ordering former Ranbaxy Laboratories Ltd. owners (Singh brothers) and 13 others to pay around Rs. 3,500 crore (Rs. 2,563 crore in damages, along with interest @ 4.44% per year from November 7th, 2008 to the date of the Award) to the company.

Daiichi had accused the Singh brothers on charges of non-compliance with drug manufacturing quality norms and related falsification of data in filings to the US Food and Drug Administration. Daiichi had acquired a majority stake of the company in 2008, for $4.6 billion, through a Share Purchase and Share Subscription Agreement (“SPSSA”).

When disputes arose in November 2013,  Daiichi invoked the Arbitration Clause of the SPSSA, seeking compensatory damages from the Singh brothers and 13 others, accusing them for ‘concealment and misrepresentation’, before an Arbitral Tribunal in Singapore.

In May 2016, Daiichi sought enforcement and execution of the Foreign Award passed by the Tribunal in the Delhi High Court, which was objected by the Singh brothers u/s 48 of the Arbitration & Conciliation Act, 1996 (“Act”), arguing that the Award granted consequential damages which were beyond the Tribunal’s jurisdiction, as the SPSSA specifically prohibited the grant of consequential damages and hence is unenforceable.

Few Respondents were minors and they objected to the enforcement of the Award, contending that a minor cannot be penalized for entering into a contract which per se was not enforceable. The High Court allowed their objection u/S 11 of the Contract Act, under which, a person competent to contract must be major and a contract must be entered into by a person who can make a promise or an offer.

Further, the court also considered Article 15, 39 (e) and (f) and 45 of the Constitution of India and noted that the present Award against the minor was “disproportionate”.

The objections of all other Respondents were dismissed by the Court, citing reasons that the scope of inquiry u/S 48 of the Act does not permit the court to “review” the Foreign Award on merits. Moreover, the Court does not exercise appellate jurisdiction over the Foreign Award and any procedural defect (like taking into consideration inadmissible evidence or ignoring any evidence of a binding nature) in a foreign arbitration does not lead to the non-execution of the Foreign Award on the ground of “public policy” under the said section. The Court held that the phrase “consequential damages” would not have been intended to oust/ exclude award of damages.

corporate law firms in delhi

LONG TERM CAPITAL GAINS TAX IN BUDGET 2018: AMBIGUITIES AND IMPLICATIONS

The budget for financial year (“FY”) 2018-19 (“Budget”) has proposed a 10% tax on transfer of listed equity shares, units of an equity oriented mutual fund and units of a business trust, where such gains exceed INR 100,000 (approx. USD 1500), with effect from April 1, 2018.

Previously, in 2004, Securities Transaction tax (“STT”) was introduced in India in place of Long Term Capital Gains Tax (“LTCG”). STT is a direct tax payable on the value of taxable securities transactions done through a stock exchange. The introduction of LTCG tax while retaining STT has made India the only country in the world to have both taxes at the same time.

While the new tax will be applicable to all investments, the reference price would be the highest quoted price on January 31, 2018, or the cost of acquisition, whichever is higher. This technical construct means that the realized/notional gains made until January 31, 2018 will be grandfathered. If the actual cost is less than the fair market value of such asset as on 31January, 2018, the fair market value will be deemed to be the cost of acquisition, thus, protecting gains incurred before 31January, 2018.

However, there is no clarity with respect to valuation and computation of gains in case of unlisted companies as well as ESOPs. Introduction of LTCG Tax while the former STT remains may drive away Foreign Portfolio Investment away from India to other offshore countries which have a more tax friendly regime for (foreign) investors. It will entail additional tax compliance and operational costs for investors.

Further, in the case of equity shares, STT is paid both at the time of acquisition and at the time of transfer. In the case of Public Issue, STT is not paid at the time of acquisition of Equity Shares. The method of computation of Long Term Capital Gains in such cases needs clarification. Another clarification is required in the case of off -market purchase and sales as well as gifts. STT is not required to be paid in such transactions. The method of computation and the exemption, if any, applicable to such transactions needs clarification. The biggest disadvantage of this development is to the middle class pensioners, whose source of income from investment of savings in mutual funds will be affected.

McD corporate law firms in delhi

LEGAL TUSSLE BETWEEN FAST FOOD GIANT MCDONALDS AND ITS FRANCHISE IN NORTHERN AND EASTERN INDIA

The London Court of International Arbitration (LCIA), in an award passed on 12 September, had asked Vikram Bakshi to sell his stake in Connaught Plaza Restaurants Ltd (“CPRL”), the McDonald’s franchise for northern and eastern India as CPRL defaulted in payment of royalties to the tune of Rs. 61 Crore for the past two years. Vikram Bakshi has now approached the High Court of Delhi, challenging this London Arbitration Court Award that had asked him to sell his stake in Connaught Plaza Restaurants Ltd (CPRL) to the US burger chain.

Mc Donalds’s US Giant has also filed a petition in Delhi High Court to stop CPRPL from using its brand name. On the other hand, Connaught Plaza Restaurants Pvt. Ltd. (CPRPL), a McDonald’s franchise, has contended before the Delhi High Court that the US fast-food giant’s petition to stop it from using the brand name was a serious abuse of the process of law. McDonald’s has sought that the franchise be restrained from using its name as the franchise agreement with the Indian entity has been terminated.

The franchise on the other hand has challenged the termination in the National Company Law Appellate Tribunal (NCLAT) where it is pending consideration, hence, the contention of CPRPL that the current plea is an abuse of the process of law.

As per the franchise, McDonald’s is in contempt of orders of non-interference from the NCLT. The Court refused to grant a restraining order against CPRPL from selling the products of the fast food giant.

McDonald’s India had communicated to CPRPL not to use its brand system, trademark, and designs and associated intellectual property among other things, within 15 days of the termination notice which expired on September 6, 2017. As per their pleadings the royalties to the tune of Rs. 61 Crore for the past two years remain unpaid. McDonald’s India had terminated its franchise agreement with CPRL on the grounds of “default in payment of royalties by CPRL”.