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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.

 

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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.

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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.

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Apex Chamber of Industry and Commerce of NCT, Delhi Challenges Government Notification for hike in Minimum Wages.

The Delhi Government, by a notification dated 3rd March, 2017, cleared a significant 37% hike in minimum wages of workers in the State. An unskilled labourer will now be entitled to a minimum wage per month of Rs. 13,350/- from the earlier Rs. 9,724/-. Likewise, the minimum wage per month for semi-skilled workers would go up from Rs. 10,764/- to Rs. 14,698/- and from Rs. 11,830/- to Rs. 16,182/- for skilled labourers. The sole objective of the Government behind the scheme is to provide financial security to the impoverished, thus increasing their purchasing power, which in turn would stimulate growth in the trade and industry.

Apex Chamber of Commerce and Industry is the representative body for free industries in Delhi. It aims to facilitate the common interests of trade and industry for its members thereby creating a constructive trade and industrial relationship, competitive, transparent, free and fair environment for its members. The Apex Chamber in a letter to Lieutenant Governor opposed the figures proposed in the said order by Delhi Government.

While fixing the rate of minimum wages, the fundamental components that are taken into account include food, clothing, house, light, fuel and education. The Seventh Pay Commission has laid down 2700 calories per day for a workman who performs moderate activities. The representative body for trade and industry has stated that the minimum calorific value taken into consideration while calculating minimum wages was 3447 calories, which is much higher that the value fixed by the Seventh Pay Commission. It is also argued by the representative body that the legislative scheme under Section 9 of the Minimum Wages Act, 1948 has been completely violated in as much as it requires equal number of representation of employers and employees as well as independent persons not exceeding 1/3rd of its total members. In W.P. (C) 12088/2016, before the Hon’ble High Court of Delhi, in the matter of Apex Chamber of Commerce and Industry of NCT Delhi v LT. Governor of Delhi, a bench comprising of the Chief Justice of the High Court of Delhi and Justice Sangita Dhingra Sehgal has passed an interim order stating that no coercive action shall be taken against the petitioner therein, pursuant to the Notification dated 3.03.2017 by the Delhi Government until further orders.

The bench is yet to decide the matter filed by the Apex Chamber of Commerce and Industry and the matter is listed before the Delhi High Court for 11th September, 2017. In the interim period, no coercive steps shall be taken as per the Court order dated 7th March, 2017.

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New MRP Rules under GST notified by Central Government

Maximum Retail Price (“MRP”) is the highest price that can be charged to a consumer by the last point in the supply chain which is inclusive of all taxes. But, post Goods and Services (“GST”) Tax introduced in the country on 1 July 2017, the rate of tax has changed in some commodities, thus, affecting the MRP in some cases. This has created a crisis like situation for several businesses which are left with huge volumes of unsold pre-packed items with the previous MRP before the GST came into force.

By way of respite, the Government has issued a notification on 4 July 2017, allowing companies to print, stamp, or use stickers to show the revised MRP on a product package. The old MRP will have to be clearly visible along with the revised MRP sticker. Also, it has been further directed that companies should advertise the change in prices of their products, in at least two newspapers, if they are raising the price of any product featuring both the new (post-GST) and old (pre-GST) MRPs on the packaging. However, no advertisement is required in case of lowering of price. This step is aimed to ensure that the companies and retailers have a way of dealing with the older (pre-GST) stock and preventing profiteering.

This transitional measure can be availed till 30 September 2017, after which all pre-packed goods will have to have just one MRP including the GST.

That said, this notification has come out as a ‘sticker shock’ to the companies who point out that the step is horrendously complicated, time-consuming and tedious as it would be a formidable task for the manufacturers to use stickers that reflect the new MRP as millions of packages are already in stock with distributors and retailers countrywide. Not only would this be virtually impossible but also, it would impose a crushing financial burden on the sellers.

Also, a downside of the step is that the notification issued would result in non-compliance of the provisions under the Legal Metrology Act, 2009, which prohibits manufacturers from changing MRP tags once goods are out of the factory.

The Food and Consumer Affairs Minister, has taken to social media to inform that if the provisions regarding revised MRP, as stated in the rules, are not properly followed, then legal action will be taken against such shopkeeper.

In conclusion, it would be best to state that though the Government may be well intentioned, the steps being taken are harm handed, and punitive and impractical.

WhatApp in a Soup of its own Data

The Supreme Court rejected  the government’s contention to hold back the hearing of  the Privacy issue regarding WhatsApp till Diwali , as that is when the new regulations from the Telecom Regulatory Authority of India (TRAI) .

A five judge bench of the Supreme Court of India led by Justice Dipak Misra is entrusted to examine if the Facebook has violated the privacy rights of almost 160 million users of WhatsApp  who have an access to all the messages and contents shared via the platform.

The Constitutional bench has asked Facebook, WhatApp, the Centre and the Telecomm Regulatory Authority of India to respond to the petition by two young Indian students.  Harish Salve arguing for the petitioners has invoked the citizen’s fundamental right to speech and expression and right to privacy under Article 19 and 21 respectively. He contended that WhatsApp has become a  Public Utility Service, by providing free messaging, call and video call services.

The of Chief Justice J S Khehar and Justice D Y Chandrachud bench had difficulties initially to entertain petition stating that could a free service provider be required to be liable for privacy rights being violated.

Since its inception in India in 2010, WhatsApp’s privacy policy promises to protect the data and content , which has continued even after being acquired by Facebook in 2014.

The government represented by attorney general Mukul Rohatgi while contending to hold back the hearing said that TRAI is attempting to make such guidelines so as to ensure security and confidentiality to such data which are retained by the servers.

The Bench is to hear preliminary written submissions from all the parties by 24th April and the next date of hearing has been set for the 27th April, 2017.

Pro Bono work may earn extra brownie points for Judicial Aspirants.

The Union Law Minister, Ravi Shankar Prasad indicated that Pro Bono legal service may be a part of the Memorandum of Procedure, which are guidelines for High Court Judge selection Procedure, which is presently being revised by the centre.

On the 20th of April, Mr. Prasad, initiated a few measures, which includes Pro bono legal Services, Tele Law service and Nyay Mitra (Justice Facilitator). These measures aim at  “ digitally ” including the  underprivileged in the justice delivery system.

The Department of Justice has launched an online portal on its website doj.gov.in .The lawyers may register themselves to volunteer services for this mainstream legal aid program. The ‘Tele Law’ program aims to include the expert panel of Lawyers at the State Legal Service Authority (SLSA) and the marginalized communities through the Common Service Centre (CSCs).

‘Nyay Mitra’ strives to solve the issue of pending cases by designating a retired judicial officer/executive as a justice facilitator. The justice facilitator among other assistance is to recognize such delayed cases through the National Judicial Data Grid, he is also to refer such cases to the Lok Adalats for dispute resolutions.