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This article is written by Bhargavi Nimje, a 1^st year student at Firodia Law College, Pune. This article discusses the new regulations imposed by the government on OTT platform, social media and digital media and the issues with new regulations.

INTRODUCTION

Whether it is, social media or Over The Top (OTT) platforms, they have been hitting the headlines for their content or misuse for a long time. OTT platforms are replacing traditional media. Regulations of OTT platforms and social media has been a widely debated topic over the regulation of content and interference with privacy rights. Government has been contemplating the idea of a regulatory body for OTT platforms, digital media. Citing the reason of public interest, the government has decided to frame regulation for Over the top (OTT) platforms, digital media and social media.

Why the Need Felt

In the last few years, many controversies have come up regarding content on OTT platforms and inciting violence through social media. Government claimed that OTT platforms do not have censorship and so any content was published on platforms that was hurting viewers sentiments as in the case of ‘Tandav’ or depicting the particular city in a wrong way as in the case of ‘Mirzapur’ To curb the incidents of violence, assassination of character, prohibiting spreading of false message, protecting sentiments of viewers, government decided to have censorship. Defaming, harassing, stocking others on social media are some of the crimes which go unpunished. To bring an end to these issues, the government decided to have stricter regulation. However, a big push came when there were violent incidents at the Red Fort on Jan 26, 2021 and certain accounts were removed from social media on the ground that these accounts were involved in inciting violence through social media. The government felt the need to have stricter regulation for addressing such issues.

Prior to Regulations

There was no such rule for OTT platforms and digital news media. Whereas, for movies, The Central Board of Film Certification (CBFC), a film-certification body, reviewed the content before the release of a movie. There were no regulations on broadcasting and transmission of content on OTT platforms. OTT platforms were under the purview of the Ministry of Electronics and Information Technology but didn’t have any rules. After a lot of criticism OTT platforms are brought under the purview of the Information and Broadcasting Ministry. To curb the issue of content and to avoid coming of OTT platforms under Information and Broadcasting ministry, Internet and Mobile Association Of India (IAMAI), a representative body of OTT platforms proposed the self regulatory model ‘Code of Best Practices for Online Curated Content Providers’ which was signed by major OTT players like Netflix, Amazon Prime, but Information and Broadcasting ministry has not agreed to this model stating that IAMAI wanted to address grievances internally and there was no appeal mechanism which wasn’t acceptable to the government.

When it comes to digital news media, the government has claimed that many digital news media don’t have even basic information on their office address. To map out the digital news media, guidelines are required.

For the regulation of social media, there were certain sections under IT Act 2000, but they were applicable to very specific cases of data breaches and privacy. Also, there was an issue with some ‘terms’ which was not defined clearly and can be interpreted in various ways.

New Regulation

Social Media

The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 regulates social media, digital media and OTT platform. It also envisages a category of significant social media intermediaries for social media platforms. Intermediaries that host user generated content have an immense role to play as per the new guidelines. The government has classified intermediaries into 2 categories, i.e., social media intermediary and the significant social media intermediary. Social media intermediary means a provider who allows its user to interact online with other users using the providers’ platform. Platforms with over 50 lakh registered users are to be considered as ‘significant social media intermediaries

The social media intermediary should have

Grievance redressal mechanisms for receiving and resolving complaints from users in which a grievance officer had to deal with complaints, and must acknowledge the complaint within 24 hours, and resolve it within 15 days of receipt.
If the court or government authority passes an order to remove a prohibited content from the intermediary’s website, the said content shall be removed within 36 hours.

When it comes to significant social media intermediary, they have an additional obligation. The significant social media intermediary have to

Appoint Chief Compliance Officer residing in India who will be responsible for ensuring platform’s compliance with the rules.
appoint a nodal contact person for 24×7 for coordination with law enforcement
Appoint a resident Grievance Officer to handle the grievance redressal Mechanism.
To know what the situation is, the significant social media intermediaries will need to publish a monthly report mentioning the details of complaints received, action taken and the details of contents removed proactively.
They have to identify the first originator of the information of the mischievous tweet or message and have to disclose the name upon being asked by the court or by a government authority. However, disclosing of name is required only for prevention, detection, investigation, prosecution or punishment of an offence related to sovereignty and integrity of India, the security of the State, friendly relations with foreign States, or public order”.

Intermediaries are protected by Section 79 of the Information Technology Act, which provides a “safe harbour” to intermediaries and exempts them from liability for the actions of users if they adhere to government-prescribed guidelines. If an intermediary fails to observe the rules, they will be liable for punishment “under any law for the time being in force, including the provisions of the IT Act and the Indian Penal Code

OTT Platforms, Digital Media

Centre had amended (Allocation of Business) Rules, 1961 to bring OTT platforms, digital news under the purview of Information and Broadcasting

The Information and Broadcasting Ministry has introduced a 3-tier mechanism for OTT platforms and digital media. Wherein,

Level 1, This would be a self regulating body by the publisher, where the publisher shall appoint a Grievance Officer who would solve a grievance regarding the Code of Ethics in 15 days.

Level 2 would be an independent body by the publisher. This would be headed by a retired judge of the Supreme Court or a High Court, or any independent eminent person from the field of media, broadcasting, entertainment, child rights, human rights or other relevant fields. They would ensure that Code of ethics are followed and would address the grievance which has not been solved within 15 days.
Level 3, The Information and Broadcasting Ministry will establish an inter-departmental committee, the committee will have representatives from different Ministries of Government. They would deal with published offensive content, where the committee has the power to delete or modify the content. It may also block the published content, in case of emergency.

Code of Ethics

According to Code of Ethics given in the rules, digital news media has to follow Norms of Journalistic Conduct of the Press Council of India and the Programme Code under the Cable Television Networks Regulation Act. Code of Ethics also states that publishers of online-curated content have to classify their content into age-based categories.

5 categories on the basis of age

U suitable for all ages
U/A 7+ suitable for age 7 and above and below age 7 only with parental guidance
U/A 13+ suitable for age 13 and above and below age 13 only with parental guidance
U/A 16+ suitable for age 16 and above and below age 16 only with parental guidance
A restricted to adults

Parental locks feature should exist for content classified as U/A 13+ or higher and reliable age verification mechanisms for content classified as ‘A’

Issues with New Regulations

Imposing regulation has sorted out some issues. Classification according to age is a good initiative that would restrict children from watching adult content. Inciting violence through social media may reduce. Although, some new rules have brought with them new issues.

Right to privacy, which is a fundamental right, has been compromised. To track the ‘originator of the message’ end-to-end encryption protocol will be broken.
Right to speech and expression through social media is a new medium of expression. If people won’t express their views, appropriate law won’t come up and this would create issues within society.
When a certain section of society gets hurt by the content shown, the audience starts demanding Boycotting of that respective OTT platform where the wrong content was exhibited. After new regulations, we can be optimistic that such happenings won’t come up as new regulations are up. Boycotting would result in economic losses.
We can notice that almost all news channels do speak in favor of the ruling government in the country wherein only a few viewers could understand the exact scenario. Digital news media, which usually are unbiased and brings out the truth will now be restricted from exhibiting certain news. The government has not accepted the proposal of IAMAI stating it lacked an independent body, but even after imposing regulation, it seems as if there are government regulations rather than independent body regulation. The final tier of OTT regulation is about government regulation where the government has emergency blocking power when delay is not acceptable. There are high chances that content criticizing the government will not be allowed to get released, criticism won’t be allowed as the government being the final tier won’t allow such content. Criticism is equally important, though.

Through entertainment mediums let people decide what is right. Exhibiting only the positive side won’t make a country progressive. The people should know both the sides to make an informed decision.

Reference

https://www.indiatoday.in/magazine/up-front/story/20201130-a-digital-disquiet-1742322-2020-11-20

https://www.google.com/amp/s/blog.ipleaders.in/overview-ott-regulations-2021/amp/

https://indianexpress.com/article/explained/social-media-digital-news-media-over-the-top-ott-content-providers-guidelines-7205053/

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This article is written by Indra Priyadarshini, a law student from Alliance University, Bangalore. This article discusses about concept of marriage and its classification under the Muslim law.

INTRODUCTION

A Muslim marriage is also called as a ‘Nikah’. According to the Hedaya, Nikah refers to a contract which has been entered into for the sole purpose of procreation and legitimization of children. There is a certain process that has to be followed in order to have a valid Muslim marriage. First, the would-be wife has to authorize a relative to accept the marriage proposal on her behalf. Thereafter, the Qazi will ask the would-be husband to make an offer if he is interested. The amount of dower and its nature should also be specified while making the offer. Then the relative authorized by the would-be wife has to accept this offer on her behalf. It has to be made clear and unambiguous to both the parties that they are entering into a marriage and the identities of the parties should also be mutually revealed. The offer (also called ‘Ijab’) when accepted (also referred to as ‘Qubool’) forms the ‘Ijab-i-qubool’, which is the ‘Aqd’ i.e. the Marriage Contract. This is the basic process of contracting nikah under the Muslim law.

Nature of Muslim Marriage

Nikah is in the nature of a contract. It consists of the following essential components which are similar to that of a contract:

Majority of the parties
Valid consent
Offer and Acceptance
Consideration.

From this it can be seen that the process of Muslim Nikah is essentially a contractual process. The requirement that there should be no ambiguity in marriage, that ‘nikanama’ (marriage contract) should be signed, the requirement of dower as a consideration, and free consent of parties are all what makes the process a contact at least in procedure.

The issue is whether Nikah can be equated with a pure commercial contract. There are some major differences between a Muslim marriage contract and a purely commercial contract:

Contract by a minor is void. Whereas a guardian can contract the marriage of a minor. Such marriage will be valid unless the minor on attaining majority avoids the marriage.
Dower is considered to be a natural legal incident of marriage. It is regarded as a mark of respect to the bride. Thus, it cannot be equated to a consideration for the marriage contract as it has other purposes.
In a nikah, maintenance will apply even without any express agreement upon it. But maintenance is not necessary in a contract.
In contract, the doctrine of frustration and novation will apply. Whereas both of those are not applicable to nikah. The only exception is that, doctrine of frustration can be applied in cases of irretrievable breakdown of marriage.
A nikah is permanent whereas a contract may be temporary or permanent in nature. But in case of muta marriage of shia’s, the marriage contract is temporary.
Unlike in contract, the concept of damages for a breach of contract is not applicable in case of Nikah directly. In cases of dissolution of marriage, the concept of maintenance and restitution are somewhat similar to damages, but they cannot be said to be damages in the same sense as understood in a contract.

In the case of Anis Begum v. Mohammed. Istifa, the Allahabad High Court stated that nikah is not a pure civil contract rather it has hot some socio-religious dimensions as well.

Essentials of Nikah

As already seen above, the basic requirements for a Muslim marriage are similar to that of a commercial contract. Apart from those 4, there are other essential components of a nikah:

Nikah has to be performed in the same sitting- the offer and the acceptance of a marriage proposal has to be made in a single transaction when the parties are present together. However, nikah can also be concluded via telephone or internet in case one of the parties are not present. But in this case as well, the acceptance and offer has to be made in the same transaction. The main requirement is that there should be no gap between offer and acceptance, so as to make the offer stale.
Presence of witness- as per the Shia law, there is no need of witnesses to be present at the time of marriage. Under the Sunni law, 2 witnesses have to be present during the marriage i.e., 2 male witnesses or 1 male and 2 female witnesses. If there are no witnesses then the Sunni nikah we be considered as irregular.
The marriage agreement should not be ambiguous or unclear.
The parties to the marriage have to be of sound mind. In case they are of unsound mind, the marriage has to be performed during lucid intervals of sanity.
The parties should be of majority, i.e., the age of puberty. The age of puberty various accordingly:
- A person greater than or equal to 15 years- Bulugh
- A child less than 7 years- Saghir
- A child between 7 to 15 years- Sariri.

Free consent of parties- if the nikah was conducted based on coercion or force then it will be regarded to be void in all Muslim sects except for Hanafi Sunni.
If the nikah was fraudulently conducted then it becomes a voidable marriage unless it is consummated after the discovery of fraud.
Nikah under mistake of fact will be considered as a void marriage.
The parties have to sign the marriage contract i.e., nikahnama.

Classification of Muslim Marriage

There are mainly 4 kinds of nikah:

Sahih- it refers to a valid marriage. When the marriage is performed by following all the legal requirements and there are no prohibitions affecting the parties, then the nikah will be correct or sahih. The prohibitions can be permanent or temporary. If they are permanent then the marriage will become void and in case of temporary prohibitions, the marriage becomes irregular. The following are the effects of a valid marriage:

Sexual intercourse becomes lawful and children born of the union are legitimate.
The wife becomes entitled to her dower and maintenance.
Establishment of mutual rights of inheritance.
Without observing the iddat period, the wife cannot remarry after death of her husband, or after dissolution of marriage.
Any prenuptial agreements or agreements made subsequent to marriage will become enforceable as long as they are not against public policy or any legal provisions.
The wife does not change her status on marriage. She remains subject to her own pre-marital school of law
Neither the husband nor the wife acquires any interest in the property of the other by reason of marriage, but they can inherit from each other after death.

Batil- it refers to a void marriage. In a void marriage, no rights and obligations are created and children born out of such union are considered to be illegitimate. Marriages that are prohibited under the rules of affinity, blood relationship, or fosterage are considered to be void. Even a woman remarrying without completing her iddat period results in a void marriage.
Fasid- it refers to irregular marriages. If a marriage is performed by missing out some formality, or the existence of an impediment which can be rectified, a marriage becomes irregular. But the irregularity is not permanent and can be rectified. Therefore, the marriage does not become void. It can be made valid once the prohibitions are rectified. A Sunni marriage performed without witnesses, a marriage with a woman without the guardian’s consent when such consent is necessary, marriage with a fifth wife, etc., are all examples of fasid.
Muta marriage- ‘muta’ literally means ‘enjoyment use’. It is a marriage for a fixed period of time and it is for pleasure. Thus, it is also known as temporary marriage. Muta marriage is not recognised by any school of Muslim Law in India except the Ithna Ashari or Shai School. A muta marriage is considered to be valid if the term and the dower are fixed. In case the term is fixed, but the dower is not specified, then the contract becomes void. Furthermore, if the dower is specified and the term is not fixed, the contract, though void as Muta, may operate as a ‘permanent’ marriage. The legal effects of such nikah are as follows:

There is no mutual rights of inheritance between the parties.
The children born out of such union are legitimate and can inherit from both parents.
In cases where cohabitation commences in muta, but there is no evidence as to the term and cohabitation continues, it is presumed that muta marriage continued during the whole period of cohabitation. Children are legitimate and can inherit from both parents.
If there is no evidence of the term, but cohabitation continues after the expiry of term, it is presumed that the term was extended.
On expiry of the term, the muta marriage gets dissolved ipso facto.

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By Paavni Thareja & Anshika Tomar

There’s a gender in your brain and a gender in your body. For 99% of people, those things are in alignment, for transgender people, they’re mismatched. That’s all it is. It’s not complicated, it’s not a neurosis, its a mix-up. It’s a birth defect, like a cleft palate. – Chaz Bono

Transgender

If the Sexual direction of a character is clashing or not interlinked socially with the sex they were consigned at the time of childhood or birth and accordingly moreover by sex work and cultural position which is routinely associated with that sexuality.

Understanding Transgender Community

Transgender people group incorporates Hijras, Eunuchs, Kothis, Shiv-Shakthis, and so forth., who have been a piece of Indian culture from hundreds of years. In the literature during vedic and puranic times which mention the famous literature “tritiyaprakriti” i.e. the 3^rd sexual orientation along with the “napunsaka” who is a person with no ability and even no capacity of reproduction. Another most used term is utilized is “kinnar”, though “chhakka” is utilized in defamatory setting. Despite the fact that the greater part of the eunuchs seen today, asking at traffic signals or during weddings. They were regarded part during the Mughal rule in the medieval India. In Brits standard the Transgender were not provided common social status and were viewed as a different station or clan and they do capturing and maiming of youngsters and moved and disguised themselves as ladies.

Issues Faced by Transgenders

The primary issues that are being looked by the transgender network are of segregation, joblessness, absence of instructive offices, vagrancy, and cleanliness, despondency, tobacco and liquor misuse, and issues identified with marriage and appropriation.

Disrespect: – They are disregarded in every single part of life with the exception of in hardly any cases like after the introduction of a kid for their endowments or to favor the recently married couple.
They are told to leave their home: The transgender are not allowed to stay in their home because their parents feel shame to keep them and to accept the fact about their sexuality and in some cases the society forced them to leave their parental home.
Unwanted consideration: – People concentrate on the Transgender out in the open. They attempt to make the scene by annoying, rebuffing, manhandling or reviling them.
Rejection of section and entries: – The transgender are not allowed to enter easily in some places, such as parks, theaters, and many more.
Rape along with maltreatment: – This is one of the most common ill-treatment which is faced by Transgender they get physically abused and raped too.
They are not allowed to take part socially in any gatherings: This is one of the most serious problems that are faced by these transgender and are in from taking an interest in, social along with financial lifestyle.
Transgender are denied of social and social interest and henceforth they have confined access to instruction, medicinal helps. It is also noticed that are not allowed to take part in any type of political thing and also they are not allowed to cast their votes during elections.

Rights of Transgender Bill, 2014

This Bill was introduced in upper house on 12^tDec, 2014 and was approved on 24th April, 2015 consistently, by the help of other party. This bill was represented by the MP oF Tamil Nadu. Therefore the 24^th day of April month is now considered as Transgender day, and it was possible because of this bill.
The rights guaranteed under the Bill are generally substantive rights, for instance, the benefit to non-partition, life and individual opportunity, free talk, to live in a system, uprightness, nearby security from torment or viciousness and abuse, fierceness and misuse. There is an alternate arrangement for transgender children.
This bill consists about the education, and business facilities, and also every type of government facility is provided to the transgender under this bill.
In the institutionalized reserve funds and prosperity part, the Government is drawn nearer to induce institutionalized investment funds and restorative administrations workplaces which are to be given as autonomous HIV places and free SRS. They should be given the benefit to unwinding, culture and redirection. Basic rights like access to safe drinking water and sanitation must be given by the organization.
The Bill imagines setting up different authorities and conversations – National and State Commissions for Transgender Persons. The Commissions work will be generally in solicitation or recommendations in the abnormalities in the utilization of the law or encroachment of right of transgender individuals. The Commissions can offer summons to witnesses, get confirmation, etc. There is discipline by strategy confinement for a year for despise talk against transgender people.

Transgender (Protection of Rights) Act

This is a demonstration of the Parliament of India with the objective to oblige confirmation of benefits of transgender individuals, their administration help, and other related issues. The Act was introduced in the Lok Sabha on 19 July 2019 by the Minister of Social Justice and Empowerment, Thawar Chand Gehlot.

All proposed statutory arrangements in 2019 demonstration deny oppression transgender people. Like the bill of year 2018 and year 2019 demonstration incorporates multi sex people, such as kinnars, jogtas, and hijras inside the meaning of these transgender people, moreover it doesn’t include any proper definition of other types of trans man or trans woman, it only states about transgender who is a person, who doesn’t match the sex allocated to him at the time of his birth.

In the detailed action of the 2019 showing, a transgender individual can apply to the head of district. for a transgender individual verification which will give them the alternative to change the name on first experience with the world confirmation and have all reports invigorated as necessities be. In any case, similar to the 2018 bill game plans, a transgender individual can be perceived as male or female basically in the wake of applying for a redesigned demonstration of the District Magistrate, post sex reassignment clinical method.

The 2019 demonstration likewise secures transgender kids and accommodates states and establishments to concoct satisfactory approaches for the government assistance of transgender people. Like the arrangements coming from bill of year 2018 along with arrangements coming from year 2019 demonstration that a kid who is a transgender can be kept in isolation from the parental home.

The Supreme Court Judgment on Rights of Transgenders

The judgment consist of any person who is in any relation of 3^rd gender or who needs to transform themselves from male to female or female to male, the court also speaks about how the state governments should keep on check about the sexuality rates in their states whether the person is male, female or the third sex.

Apex court proclaimed –

Hijras, Eunuchs, aside from twofold sexual orientation, be dealt with “third sex” to shield their benefits under Part III of our Constitution and the laws made by the Parliament and the State Legislature.
Transgender individuals’ privilege to pick theirself-perceived sex is moreover kept up and the Center and State Governments are composed to yield legal affirmation of their sexual direction character, for instance, male,female or as third sex.
We direct the both i.e. the Center and the State Governments to figure out how to view them as socially and informatively in turn around classes of inhabitants and extend a wide scope of reservation in cases of insistence in educational establishments and for open courses of action.

Laxmi Narayan Tripathy, who is a Hijra, told about the problems faced by her in my childhood, “I felt not the same as the young men (as I was conceived as a kid) of my age and was ladylike in my manners. By virtue of her womanliness, since the beginning, I confronted rehashed lewd behavior, attack and sexual maltreatment, both inside and outside the family. Because of my being unique, I was separated and had nobody to converse with or express my sentiments while I was grappling with my character. Everyone used to call me by names such as a “chakka” Afterwards she joined many NGO’s and the hijra network in Bombay and without any thinking of past, she was very comfortable in her work and enjoyed her work.

Some Transgenders who Made a Difference

Padmini Prakash: India’s first transgender, On the event of its 68th Independence Day, India liberated itself from another sort of sexual orientation predisposition when Padmini Prakash turned into the main transgender TV anchorperson in the country. The news came only five months when the court announced that transgender can be legally regarded as third sex.

Shabnam Mausi: India’s first eunuch to transform into a MLA-the principle Indian transgender to be picked for open office. She was a picked individual from the Madhya Pradesh State Legislative Assembly from 1998 to 2003.Shabnam went to two years of basic coaching, yet imparts in 12 tongues that she got during her developments. As a person from Legislative Assembly, her inspiration joins doing combating debasement, joblessness, dejection and craving in her supporters.

Lakshmi: Who was a Transgender rights lobbyist, also a hindi movie peformist along with dancer in Bharatanatyam craftsman in Mumbai, IndiaBorn in 1979 in Thane, Laxmi is the essential transgender individual to address Asia Pacific in the UN in 2008At the social occasion, she talked about the pickle of sexual minorities” People should be progressively philanthropic,” she also mentioned. Laxmi has done, many more for the NGO’s who work for transgender rights.

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-ZUBA PARVEZ BUBERE, LL.M., BUSINESS AND CORPORATE LAW, SYMBIOSYS LAW SCHOOL, PUNE

INTRODUCTION

In an era of growing Shareholder Activism and Corporate Democracy, the landscape has clearly changed dramatically and indeed, positively. In the present scenario, one of the primary objectives of activist shareholders is to pressurize firms to consistently aim for better performance in terms of Corporate Governance and thereby enhancing Corporate Democracy. The reasons could be both financial as well as non-financial. Shareholders have come up with effective modes to impact the governance regime of corporate firms and its Board of Directors. The highest measure of Corporate Democracy can be understood as to mean neither the extent of freedom nor the extent of equality, rather the level of participation. Consequently, contributory roles played by Proxy Advisors can be viewed as important aspects being consistently regulated and monitored. An in-depth explanation of these areas, issues respecting the same and responses to these concerns are dealt with in detail.

Proxy Advisors, their Role and Impact on Corporate Democracy

Institutional investors investing in companies of different countries are obliged to comply with the respective legal systems, complexities and requirements. The role of proxy advisors remains to assist such investors to form an informed decision by extending valuable research in relation to the corporate governance of respective countries. They provide recommendations on the rationale of a proposed resolution, facilitating companies to vote “for” or “against the motion. Therefore, the role of proxy advisors can have a significant impact on a company’s voting results.

Proxy advisors have a considerable impact on the corporate democracy mechanism of a company. The reason for the same can be stated to be the growth of institutional shareholdings and passing of regulatory reforms for the purpose of enhancing shareholder voting. It is perhaps, extremely critical that advices and recommendations forwarded by proxy advisors and proxy advisory firms be just, fair and independent. In all cases, they must be free of potential conflict of interests. On one hand, where it can be said that reports by proxy advisors could be relied upon, on the other hand, it cannot be negated that the recommendations and reports as provided by proxy advisors may not turn out to be as per the expectations of the promoter of the issuer company. In a nutshell, any kind of prediction on the voting of this particular group of shareholders is a challenging task for the reason that the said group makes a constant attempt to increase their participation in an informed manner.

Issues in Relation to the Working of Proxy Advisors

The nature of working of such proxy advisors or proxy advisory firms can lead to the generation of conflict of interests in numerous ways. The following are some of the significant issues to be taken into account:

Dual Service

Proxy advisors provide dual service, both consultancy services to issuers and proxy research and advice to investors. The risk associated with this function is that they could provide inappropriate proxy advice to investors on how to read statements by issuers and this may be totally dependent on the extent of influence of issuers on the proxy advisors.

Relationship of Proxy Advisor with Issuer

Secondly, if the proxy advisor is, in any manner, related to the issuer i.e. through commercial or personal relationships with the issuer or the issuer’s major shareholders, this may result in rendering a biased advice to the investors, thereby creating a conflict of interest.

Potential or material interest of Proxy Advisor in the issuer

Any potential or material interest of the proxy advisor in the issuer can lead to conflicts since there is an existence of a possibility that recommendations made by proxy advisors would be affected by such potential/material interests.

Relative influence of Proxy Advisor client

An influence of a particular investor client on the proxy advisor while advising any other investor client can severely affect the independent nature of advice rendered.

Mandate by the Securities and Exchange Board of India (SEBI)

In India, there exist certain regulations as drafted by The Securities and Exchange Board of India (SEBI) that are to be mandatorily complied with by proxy advisors. The objective of such guidelines is to protect the interests of investors from any defective/faulty research report, thereby avoiding conflict of interests. Apart from observing compliance to the said regulations, proxy advisors have to fulfill additional disclosure responsibilities as follows:

Compulsory registration with SEBI.
Maintenance of adequate capital.
Employees of proxy advisors must possess minimum qualification in any discipline.
Maintenance of a record of voting recommendations and furnishing the same to the Board on request.
Disclosure of research details along with effectiveness of the same in ensuring accuracy of data.
Disclosure of policies and procedures adopted for the purpose of interacting with issuers, informing issuers of the recommendations and review of the same.
Addressing issues relating to conflict of interests, etc.

Mandate by the Securities and Exhange Commission (The United States)

Bearing in mind the issues as stated above, it was in the year 2014 that The Securities And Exchange Commission issued specific guidelines regarding proxy advisors in the form of a Staff Legal Bulletin10. Under the guidelines, there are certain responsibilities that are to be fulfilled by investors who opt for the services of proxy advisors and such guidelines are to be followed by the proxy advisors. These comprises of some points on due diligence such as follows:

Capacity and competency to efficiently address proxy issues.
Adoption of robust policies and procedures.
Disclosure of potential conflict of interests.
Disclosure of significant relationships or material interests including those associated with provision of consultancy services to companies.

CONCLUSION

A careful understanding of the concepts and their significance leads to the opinion that the trend in the growth of Corporate Governance highlights a positive sign ensuring greater accountability and transparency in the working of the Board through enhanced shareholder participation. There is indeed a growing general awareness amongst the masses regarding the position of shareholders and the rights and powers concerning their position. The massive contribution made by Proxy Advisory Firms (PAFs) towards Shareholder Activism is quite apparent too. Recent developments in the area throws a light on improved corporate governance standards, improvement in shareholders’ rights viz. right to receive information, right to appoint and remove directors, etc., ease of exercising these rights, creation of new shareholder remedies, and so on. Besides, the establishment of grievance redressal mechanisms, class action suits, etc has have added to the bonus.

At the same time, it is also become important for the companies to look at the prevalence of red flags, if any. This may include inability of the management to resolve concerns of shareholders or disregarding their concerns, substantial increase in the shareholding by certain shareholders, lack of communication with shareholders, poor financial and market performance in comparison to competitors, etc. In such a scenario, to minimize the risks of being targeted by activist shareholders the company must take measures such as striking a balance between legislative compliance-corporate strategy-policy making, regular assessment of the performance of the company and its directors, inviting shareholder comments on numerous aspects, formulating a long-term strategy and analyzing its benefits, etc.

In the light of current trends and developments, companies are required to observe fair and transparent corporate governance practices along with ensuring a high level of shareholder participation. Instances of the same include: safeguards in relation to related party transactions and consolidated quarterly results. Adopting such an attitude will ensure enhanced shareholder credibility. Several regulators, too, promote such practices. Entities are therefore required to function as per the pace of recent developments in corporate governance.

LIST OF REFERNCES:
Sakate Khaitan, Aditi Chandak and Sangeeta Jhunjhunwala, Shareholder Activism in India, Thomson Reuters, https://uk.practicallaw.thomsonreuters.com/w-013-9526?transitionType=Default&contextData=(sc.Default)&firstPage=true
Shareholder meetings and practices in leading economies, Ingovern, http://www.ingovern.com/2015/03/shareholder-meetings-and-practices-in-leading-economies/
Noor Hayati Abdul Samad, A legal perspective of shareholders’ meeting in the globalised and interconnected business environment, ScienceDirect (January 27, 2015), https://www.sciencedirect.com/science/article/pii/S187704281500467X
Aditi Jhunjhunwala and Suman Poddar, Dance of Corporate Democracy: The rise of Proxy Advisors, Vinod Kothari and Company (March 15, 2016), http://vinodkothari.com/wp-content/uploads/2017/03/Dance_of_Corporate_democracy-_rise_of_proxy_advisors-1.pdf
Bernard S. Black, Shareholder Activism and Corporate Governance in the United States, Researchgate (January 2002), https://www.researchgate.net/publication/315468713_Shareholder_Activism_and_Corporate_Governance_in_the_United_States

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This is authored by Janaki Nair a 3^rd year B. A. LLB student in Symbiosis Law School Pune. The following article deals with the cinema industry of mainly India and the different ways in which specific laws are put up that streamline the content for viewers all around the world. The article will be discussing the different censorship laws that relate to different entertainment platforms in the film industry.

INTRODUCTION

The Entertainment Industry of India is unparalleled. The Indian entertainment industry is known both nationally as well as internationally for its glitz and glamour, especially in the cinema industry. Its one of the biggest cinema hubs of the world and is known for its vibrancy, diversity, and drama with its vast cultural differences in different parts of the country. However, a cinema is produced not only with the mind to unleash creativity and storytelling techniques but also to engage the audience. India, with its population, has an enormous audience to market films too. Furthermore, according to the United Nations Population Fund, India is currently the country that has its largest amount of adolescent and youth in its population.

Due to it being a developing country, proper education is also something that is slowly progressing which again makes the young viewers completely reliant on cinema for their real-life issues also. The young, impressionable, and naïve Indian audience may fall prey to the fiction that is cinema and therefore the Government has established what is known as Censorship across the country.

Censoring a cinema means properly and thoroughly analyze and vet the film before being approved for distribution in theatres. In this manner, scenes that are inappropriate and/or violent can be discarded away to not harm the viewer’s mind. Censorship also has its critics that state that they are willingly destroying and damaging the essence of the film as a whole by cutting certain parts of it from the eyes of the public. However, the positives outweigh the negatives in the Indian terrain especially, and numerous censorship laws have circulated throughout the country for decades.

Development of Censorship Laws

The first instance of ‘control’ over cinema originated in late 18^th century Paris. A year and a half after the first film screening in history, tragic events unfolded wherein the film stock was mixed with another chemical compound which made it into an explosive material that accidentally killed over 126 people in Paris. This type of tragedy continued over the decade which led to the first cinematograph legislation passed in the year 1909 by Britain that aimed at controlling the issuance of cinema licenses. As with human nature, controlling the conditions of film screening gradually translated into an even more restriction of controlling the content in the film. After a few years, the British Board of Film Censors was established in the year 1912. Around the same time, the English began to notice the surge in popularity of cinemas in India. The year 1917 saw a bill to the same effect being raised in the Imperial Legislative Council which also recommended the birth of a law that would ensure the safety of the Indian public from inappropriate or otherwise objectional publications, and thus the Cinematograph Act of 1918 which housed censorship laws was born in India.

Cinematograph Act, 1918

Under the following act, the district magistrates were provided with the power to issue licenses to films, and the local governments were instructed to appoint ‘examiners’ who analyze and certify films based on whether they were appropriate for the public- viewing. However, a major lacuna of the above act was that there were no suitable guidelines for these inspectors and examiners to assess the film’s appropriateness with. However, this issue was gradually sorted in 1920 when censor boards were established in important cities like Madras, Bombay, Calcutta, and Rangoon and adopted certain rules to be followed. Therefore, these censor boards had around 43 objectionable materials that were not allowed to be showcased to the public. The 1920s were also the period of the non – cooperation movement and therefore, scenes that showed confinement were also not allowed to be shown in movies because the authorities feared that it may incite communal tensions within the people. Furthermore, films either about or featuring Mahatma Gandhi were also strictly prohibited. The British were extremely paranoid about the rising nationalist sentiments across the country, and they projected this paranoia into the cinema industry by cutting anything that mentioned the Indian National Congress, self-governance, revolution in other countries, etc. Till the 1940s, the censorship scene was said to be extremely chaotic as the 5 boards did not have any organization or co-operation among each other.

Cinematograph Act, 1952

All of this came to a boiling point in the year 1949 where the five regional boards were abolished, and a Central Board of Film Censors was set up. The letters U/A and A were recognized and were placed as a warning on the type of film it was supposed to be. Even though after Independence censorship laws on newspapers were abolished, the film industry still did not stand a chance. It became even more restrictive in its censoring – it was then realized that India has to satisfy the society as well as the censor board to produce profitable films.

The 1918 Act was also repealed but was replaced with the Cinematography Act of 1952 which was extremely similar to the 1918 act in scope. In the year 1983, the name of the central censorship board was changed to the Central Board of Film Certification (CBFC). According to the Act, the CBFC can, after reviewing the film, do the following:

Allow the film for unrestricted public access and exhibition,
Allow the film for restricted public access and exhibition only to adults,
Direct the film directors for modifications in the film to make it available for either public or adults-only access,
Refuse the film to public exhibition.

The first case concerning the censorship laws that took place in Independent India was the case of K.A Abbas v. Union of India, 1971 AIR 481, 1971 SCR (2) 446. The question of pre-censoring films arose in this case where the Supreme Court had ruled that pre-censorship was constitutionally valid under the reasonable restrictions under Article 19(2) of the Constitution, and hence, could be exercised when necessary. Furthermore, in the case of S. Rangarajan Etc vs P. Jagjivan Ram, 1989 SCR (2) 204, 1989 SCC (2) 574, the court had stated that if film censorship does not fall under the reasonable restrictions under A.19(2) of the Constitution, then the film cannot be suppressed by way of any public protest, threat, or violence. The court further stated that, if done so, then it would violate the Rule of Law and would be seen as a surrender to intimidation and blackmailing techniques.

Critiquing the CBFC

The Central Board of Film Certification, however, is widely criticized all across the country and the criticisms have only been gaining momentum as the society becomes more progressive and modern in its thoughts. The 1952 Act only made the CBFC a board that had to ensure certification without endangering the creative and artistic expression of the filmmakers. However, there have been several instances wherein the CBFC had allegedly gone above and beyond their power by acting as moral police of sorts. The most recent case that talks about this would be about the film Udta Punjab wherein the CBFC ordered a huge number of deletions which included the names of some states, references to cuss words, etc. This was taken to the Bombay High Court where the producers had pleaded for the exhibition of the film under the ‘A’ category without any deletions, and the court allowed the same by stating that there was no need for the Board to issue these many deletions merely based on drug sales in a particular state.

OTT Platforms

Upon answering a query filed under the RTI Act, the Ministry of Information and Broadcasting had clarified that the CBFC was only authorized to control and police the films that are distributed to theatres and televisions and not the ones that are released on the Internet. Therefore, online streaming platforms such as Netflix, Amazon, Hulu, etc. are at present free from the confines of any code of conduct of the CBFC except for the IT Act provisions that talk about child pornography and so on. Though some parts of the public feel as if the digital content – makers could do with a code in place, the content – makers themselves vehemently oppose the idea of any code burdening them by potentially curbing the creative freedom that they enjoy at the moment. The pandemic has further increased this vehement opposition in internet content providers as this method is their only source of both creative expression and income.

CONCLUSION

To conclude, it is not a new revolutionary opinion to suggest that the current censorship board needs to evolve. Society and thereby the morals and values of the public keep changing, and it only impedes democracy if industries within the country do not change with the times. The CBFC is still stuck with archaic notions that have not changed that much from the pre-independence times which makes it an extremely difficult concept to work within today’s times. Instead of protecting and ensuring the safety of the public, the CBFC is slowly becoming a catalyst of moral policing.

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Case Number

Criminal Appeal No. 159 of 1957.

Equivalent Citation

(1960) 3 SCR 319 : AIR 1960 SC 889 : 1960 Cri LJ 1250

Bench

S.J Imam, K.N Wanchoo and J.C Shah, J.J

Decided on

16^th March 1960.

Relevant Act/ Section

S.409 of the Indian Penal Code of 1860 – Criminal breach of trust by public servant, or by banker, merchant, or agent.
S. 34 of the Indian Penal Code of 1860 – Acts done by several persons in furtherance of common intention.

Brief Facts and Procedural History

In the present case, the two accused appellants were the Director and the technician of a Textile Dyeing Company, respectively. They had submitted to a tender and was accepted in accordance with general conditions. Based on the contract, almost 2,51,060 yards of cloth were supplied to the Company for dyeing. The Company however only successfully dyed 1,10,000 yards of cloth and after some correspondence, the company decided to cancel the contract with the Textile Commissioner. The Commissioner then asked the company to account for the balance amount of cloth as soon as possible which the Company again failed to do so. The Company was also entering into financial difficulties around that point of time and had creditors suing them for insolvencies. Numerous letters and notices were served towards the two appellants and almost all of them were unattended except one time where the First Appellant wrote back a letter which stated that the cloth had numerous problems to go forward with delivery. The appellants, however said that they would account for it but they again failed to do so. The respondent commissioner along with the police raided the cloth factory wherein the cloth was nowhere to be found. When taken to the Trial Court, the court immediately dismissed the present appellants plea of not having dominion over the cloth. The High Court also ruled in favor of the respondent cloth commissioner and sentenced the appellants guilty under Sections 409 r/w 34 of the Indian Penal Code. Aggrieved, the appellants brought the present case to the Supreme Court of India.

Issues before the Court

Whether the appellants should be acquitted and not tried for criminal breach of trust?

Ratio of the Case

The ratio decidendi of the present case was that even if dishonest misappropriation may not, in ordinary circumstances, be direct proof, but if it is found by the court that the property is entrusted to an individual or if the individual had some kind of dominion over it, and the individual has given a false excuse or explanation for his failure to account for it, then an inference of misappropriation with dishonest intent may readily be made.

Decision of the Case

The Supreme Court, in this case, decided against the appellant-accused’s reasoning of it not being a criminal breach of trust under Section 409 of the Indian Penal Code. The court further stated that the High Court has not erred in charging the appellants under S.409 read with S.34 of the Code, because S.34 in itself does not create an offence. The Apex Court also stated that the sentences of 3 and 1 passed by the High Court was also correct as both of the accused were people in high positions dishonestly misappropriating a product of considerable value. The second appellant should get a lesser sentence as even though he was considered a Director, he was essentially a technician and acted on the orders of the first appellant.

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This article is written by Indra Priyadarshini, a student of Alliance University, Bangalore. This article discusses investor’s protection. It also gives a brief on the measures taken by SEBI in this regard and the relevant provisions of the Companies Act, 2013.

INTRODUCTION

Investors have a very important and crucial role in the financial and securities market. They are also known as the shareholders or members of the company. They are the ones who decide the level of activity in the market. They help in the growth of the market by investing money in funds, stocks, etc., and as a result also aid in economic development. By protecting them, you can protect and enforce the rights and claims of a person in his role as an investor. This is why it is essential to protect the interests of the investors. Various methods have been enacted in order to protect the interested of the investors from malpractices. The Securities and Exchange Board of India (hereinafter referred to as SEBI) provides for the regulations of the Mutual Funds and investor’s protection. SEBI has taken several measures to protect and safeguard the investors from malpractices in mutual fund, stock market, shares, etc. The Companies Act, 2013 also has various provisions related to investor’s protection.

Who are Investors?

The capital of a company is divided into 2- Equity and Debt. Creditors are those persons who contribute to the debt capital of a company, whereas investors are those who contribute to the equity capital of a company. The creditors get a fixed rate of interest on the amount they loan and have limited voting rights only on matters which are directly linked to their affairs, like winding up of the company, or reduction of capital. On the other hand, investors have voting rights in all matters of the company and are also permitted to obtain dividend. The investors are insiders of the company and are also referred to as shareholders or members. It is important to keep in mind that not all members are shareholders, but all shareholders are members of a company. According to Section 2(55) of the Companies Act, 2013, the definition of the word “member” includes the subscribers of the memorandum of a company, persons who agrees in writing to become a member of a company and whose name is entered in the company’s register of members, and persons holding equity share capital of company and whose name is entered as beneficial owner in the records of the depository.

Investor’s Protection under the Companies Act of 2013

The shortcomings of the previous Companies Act of 1956 in preventing white-collar crimes and providing investors protection was disclosed by the “Indian Enron”. The fall out of Satyam in 2009 highlighted the dire need for protection of investors in India. Therefore, the Companies Act of 2013 was fixated at ensuring sufficient protection to investors. Various provisions were introduced in the 2013 Act to facilitate accountable and transparent management in company’s in order to safeguard the interests of the stakeholders’ like prohibition of insider trading, introduction of class action suits, offence of fraud, and enhanced penalties for breaches and non-compliances. The following provisions of the Companies Act, 2013 are related to protection of investors:

Section 73- Under this section, a company accepting or reviewing deposit from the general public is a punishable offence except in manner stated under Chapter V of the Act and the Companies (Acceptance of Deposit) Rule, 2014.
Section 34- A brief information about a company’s profile and their investment proposals are written in the prospectus, which is issued to the general pubic. In this regard, Section 34 imposes criminal liability for any misstatements in the prospectus.
Section 447- If there is any false or misleading information in the prospectus which is issued, distributed or circulated, which encourages others to make an investment, then they shall be liable for action under this section. Fraudulent act of deliberate concealment of facts to induce people to invest money is also punishable under this section.
Section 36- This section provides punishment for persons who deliberately induce investors to invest by any agreement for the purpose or the pretended purpose in order to secure a profit.
Section 123- It is in the agenda of every Assistant General Manager to declare the dividend. Dividend refers to the profits gained by the company and its distribution among the shareholders according to the amount paid-up shares they hold, i.e., it is the return on the investment made by them. This section of the 2013 Act mandates that the dividend should be credited in investors account within in five days after the declaration.
Section 125- This section provides for the establishment of investors education and protection fund by the central government. This fund is credited with the unpaid or unclaimed amount of application money, matured money, or deposits. This fund has to be used solely for the promotion of investor’s awareness and protection of the interests of investors.
Section 136- This section deals with the right to demand financial statements. It states that every member of a company has the right to get access to the copies of the Balance-Sheet and Auditors Reports. In case of default, the company will be made liable to pay a fine of rupees twenty-five and the concerned authority will be penalised to a fine of rupees five thousand.
Section 436- In cases where Section 136 is not complied with, then the investor has another option i.e., to proceed against the company or the officers in court according to the guidelines enlisted under Section 436 of the Act.

These are a few of the sections under the Companies Act, 2013 which provide for investors protection.

MEASURE TAKEN BY SEBI:

The SEBI has taken numerous measures to ensure the protection of interest of investors. They have released many directives, established investor protection fund to compensate investors, and conducted several investor awareness programmes. Section 11(2) of the SEBI Act enumerates the measures taken for investors protection:

Stock Exchange and other securities market business regulation.
Registration and regulation of intermediaries in the business like brokers, bankers, trustees, investment consultants, etc.
Works of custodians, participants, credit rating agencies, foreign investors, depositors, etc. being recorded and monitored.
Registration of investment schemes like Mutual fund and venture Capital funds, and regulation of their working.
Promoting and controlling of self-regulatory companies.
Checking regularly for frauds and unfair trading practices relating to the securities market.
Monitoring and regulating major transactions and take-over of the companies.
Conducting investor awareness and education programme.
Training the intermediaries in the business.
Assessing and auditing the security exchanges and intermediaries.
Calculating fees and other charges

CONCLUSION

Protecting the interests of the investors is one of the most prioritised duty of the regulatory bodies. The SEBI has enacted several hard measures to ensure investor protection. The SEBI guidelines and measures ensure that all aspects of the investors interests are safeguarded. But there is still room for improvement. The investor awareness programme has helped to a great extent. These measures are necessary to establish an accountable and transparent transaction. It is up to the issuers and investors to abide by the guidelines to really secure the securities market. The Companies Act, 2013 increasingly focuses on regulations relating to investors protection as well and ensuring a more transparent work environment in all levels of a company’s management and removing any hidden hurdles which may directly or indirectly tamper with the working of a company. In order to maximise the protection of interests of the investors, the company’s law has to be coordinated with other legislations.

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This case is analyzed by Sujata Porwal, third year BA LLB (Hons.) student at Symbiosis Law School, Pune.

Case Number

Review Petition (Crl.) Nos. 446-447 of 2019 in Criminal Appeal Nos. 1174-1175 of 2019

Equivalent Citation

1963 AIR 1094, 1963 SCR Supl. (1) 689

Bench

K. Subbarao, J.

Decided on

22^nd October, 1962

Relevant Act/ Section

Constitution of India – Article 136
Indian Evidence Act, 1872 – Section 24
Indian Evidence Act, 1872 – Section 3
Indian Penal Code 1860, (IPC) – Section 109
Indian Penal Code 1860, (IPC) – Section 23
Indian Penal Code 1860, (IPC) – Section 24
Indian Penal Code 1860, (IPC) – Section 378
Indian Penal Code 1860, (IPC) – Section 379
Indian Penal Code 1860, (IPC) – Section 465

Brief Facts and Procedural History

The appellant was a Superintendent in the Chief Engineer’s office who was charged under Section 379 of IPC. He was accused of removing a file from the Chief Engineer’s office to deliver it to a friend (co-accused). The co-accused substituted certain documents and returned the file the next day.

Later, upon being threatened by the Chief Engineer, he gave a confession that was later retracted. The petitioner challenged the order of the Hon’ble court that convicted the accused, but set aside the charges against the co-accused.

Issues before the Court

Whether Section 24 of the Indian Evidence Act can be interpreted in order to extend its scope?
Whether the act of taking something out of the possession of a person and returning it later would constitute as ‘theft’ under Section 379 of IPC?

Ratio of the Case

The hon’ble court concluded that theft can be temporary as well as permanent in nature. The court expanded the scope of the definition of theft as mentioned in the existing acts by stating that temporary or permanent unlawful possession of any movable property that causes material or immaterial wrongful loss shall be considered as theft.

The scope of opinion in matters of induced or coerced confessions under S. 24 of Evidence Act was expanded to introduce flexibility in deciding upon such matters.

Decision of the Court

The court chose a different path to adjudge the matter by laying down points of distinction over the conclusion of facts. The court believed that the officer was working in the capacity of an officer and not officer-in-charge. Thus, he cannot be held to be the one in legal possession of the file.

Besides, the definition nowhere expresses that the dispossession must be permanent in nature in order to constitute theft and hence the bench held that the conditions pre-requisite for the crime of theft are fulfilled in the present case. The Hon’ble judges further disregarded the arguments of the petitioner thereby holding that wrongful loss can constitute ‘the loss of any property that is lost by an unlawful means to which the person at loss is legally entitled to’.

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Case Number

Criminal Appeal No. 159 of 1957.

Equivalent Citation

(1960) 3 SCR 319 : AIR 1960 SC 889 : 1960 Cri LJ 1250

Bench

S.J Imam, K.N Wanchoo and J.C Shah, J.J

Decided on

16^th March 1960.

Relevant Act/ Section

S.409 of the Indian Penal Code of 1860 – Criminal breach of trust by public servant, or by banker, merchant, or agent.
S. 34 of the Indian Penal Code of 1860 – Acts done by several persons in furtherance of common intention.

Brief Facts and Procedural History

In the present case, the two accused appellants were the Director and the technician of a Textile Dyeing Company, respectively. They had submitted to a tender and was accepted in accordance with general conditions. Based on the contract, almost 2,51,060 yards of cloth were supplied to the Company for dyeing. The Company however only successfully dyed 1,10,000 yards of cloth and after some correspondence, the company decided to cancel the contract with the Textile Commissioner. The Commissioner then asked the company to account for the balance amount of cloth as soon as possible which the Company again failed to do so. The Company was also entering into financial difficulties around that point of time and had creditors suing them for insolvencies. Numerous letters and notices were served towards the two appellants and almost all of them were unattended except one time where the First Appellant wrote back a letter which stated that the cloth had numerous problems to go forward with delivery. The appellants, however said that they would account for it but they again failed to do so. The respondent commissioner along with the police raided the cloth factory wherein the cloth was nowhere to be found. When taken to the Trial Court, the court immediately dismissed the present appellants plea of not having dominion over the cloth. The High Court also ruled in favor of the respondent cloth commissioner and sentenced the appellants guilty under Sections 409 r/w 34 of the Indian Penal Code. Aggrieved, the appellants brought the present case to the Supreme Court of India.

Issues before the Court

Whether the appellants should be acquitted and not tried for criminal breach of trust?

Ratio of the Case

The ratio decidendi of the present case was that even if dishonest misappropriation may not, in ordinary circumstances, be direct proof, but if it is found by the court that the property is entrusted to an individual or if the individual had some kind of dominion over it, and the individual has given a false excuse or explanation for his failure to account for it, then an inference of misappropriation with dishonest intent may readily be made.

Decision of the Case

The Supreme Court, in this case, decided against the appellant-accused’s reasoning of it not being a criminal breach of trust under Section 409 of the Indian Penal Code. The court further stated that the High Court has not erred in charging the appellants under S.409 read with S.34 of the Code, because S.34 in itself does not create an offence. The Apex Court also stated that the sentences of 3 and 1 passed by the High Court was also correct as both of the accused were people in high positions dishonestly misappropriating a product of considerable value. The second appellant should get a lesser sentence as even though he was considered a Director, he was essentially a technician and acted on the orders of the first appellant.

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Case Number

Criminal Appeal No. 572 of 1994

Relevant Citation

1996 SCC OnLine Kar 665: (1997) Kant LJ 81 (DB): 1997 Cri LJ 4386

Bench

M.F Saldanha and H.N Narayan, J.J

Decided on

04^th December 1996.

Relevant Act/ Section

Section 325 of the Indian Penal Code of 1860 – Grievous hurt.
Section 384 of the Indian Penal Code of 1860 – Extortion.
Section 325 of the Indian Penal Code of 1860 – Sentence.

Brief facts and Procedural History

In the present case, the complainant, Bhagyamma, alleged that her husband, the respondent – accused took her to a nearby forest within 10 days of marriage in the pretext of going to a wedding but instead threatened to kill her if she does not give her entire jewellery to him at that moment. Even after giving jewellery worth Rs.10,500, the husband picked up a stone and started hitting her with it and injuring her. He only stopped hitting when he heard people coming by and ran away. The complainant was then taken to a hospital where the doctor attested that one injury on her ribs is severe out of everything and that it could have been from a stone. The complainant gave the details of the accused after which he was arrested, and the jewellery was recovered from his possession. When the case was taken to the Trial Judge, the accused was acquitted by the court stating that the sole testimony of the wife was insufficient along with the witnesses turning hostile during the trial process. The case was then brought to the present court by the aggrieved wife.

Issues before the Court

Whether the Trial judge was correct in acquitting the accused?

Ratio of the Case

The ratio decidendi of the present case is that the Trial court committed an extremely erroneous decision by acquitting the accused. The court had claimed that nothing could justify the action of the accused taking the wife into the forest with a criminal intent. The case may not have been one of attempted murder but the intention to commit a crime was still present, and along with the material evidence as well as the submission of the victim, it becomes enough proof to prove the guilty mind of the accused.

Decision of the Case

The bench in this case convicted the accused of committing grievous hurt under Section 325 of IPC by way of injuring the wife with a stone and with an obvious criminal intent to hurt or harm her. Under this punishment, he shall undergo rigorous imprisonment for a period of two years. This leniency is primarily due to the fact that it had already been 9 years since the offence was committed. The accused is also liable under S.384 of IPC for extortion of jewellery by threatening the life of Bhagyamma. He is sentenced to undergo rigorous imprisonment for a period of two years for this offence.

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