Decriminalization of Dishonor of Cheque a/u Section 138, Negotiable Instruments Act 1881: A Remedy Viable Enough?

  • Anurag Mohan Bhatnagar & Manvendra Shekhawat

Background:

Since 2014, there are almost 3.5 Crore cases pending in the courts across India. Recently, with a vision of improving the ease of doing business in India, to improve the growth of the economy of the country, and ultimately, reducing unnecessary burden on the Indian Courts, the Finance Ministry has asked for suggestions from the general public on decriminalization of certain offences under various acts which are minor in nature. Notably, one of the provisions that the Finance Ministry looks forward to decriminalize is Section 138 of the Negotiable Instruments Act, 1881 (hereinafter, NI Act) by which bouncing of cheque is an offence.

Apart from the provision of bouncing of cheque, the Finance Ministry has also asked for suggestions on Section 12 of the Insurance Act, 1938, “which criminalizes failure to annually audit balance sheet and other documents of insurers”; criminal sanction for contravention of provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI) Act, 2002, and lastly, “criminal penalty for making false statement as under Section 58B(1) of the Reserve Bank of India Act, 1934.

There are 19 different economic legislations upon which the Government has asked for suggestions. However, in this article, we shall only discuss Section 138, NI Act and the repercussions of the same being decriminalized.

Status Quo:

With the increase in trade and commerce, the use of cheques, as well as related disputes, has also increased. The Parliament in 1988 introduced Sections 138-142 in the NI Act, 1881 to deal with the disputes related to the dishonor of cheques. The object of the same is “to encourage the efficiency of banking operations and to ensure credibility in transacting business through cheques”.

Section 138 of the NI Act makes a person criminally liable for fine or imprisonment or both to the person who has issued the cheque. The section imposes both criminal and civil liability. However, there are some situations where the drawer has no intention of doing such activities and for that, the prosecution can be done only when certain conditions are fulfilled stipulated under the proviso of Section 138.  The prosecution for the dishonoured cheque is only permitted when the notice of the same is envisaged to the drawer by the drawee to complete the required payment covered by the cheque and drawer fails to make the same within the stipulated time given under the Act.

The offence under Section 138 is a non-cognizable & bailable offence and the sentence can be punishment up to two years or fine which can be extended to twice the amount covered by the dishonoured cheque or both. This offence can also be made compoundable between the parties (consent of both the parties is required) and there is no requirement to attain formal permission from the court.  Even if there is no consent, the accused can be discharged if the court is of the discretion that the complainant has been duly compensated.

Analysis: Feasible Solutions

The intention behind imposing a criminal penalty on cases of cheque bouncing was to dissuade people from dishonouring cheques and to secure the credibility of the cheques. It is estimated that currently, 20% of the total cases present before the courts of India are related to dishonouring of cheques which would roughly amount to 4 million cases. Hence, in recollection criminalizing the act of cheque bouncing has not proved to be successful as far as the Indian legal system is concerned.

Here are some of the alternatives to criminalized cases of cheque bouncing apart from decimalizing the provision itself:

  1. Arbitration: The Government is considering an amendment to the NI Act that aims to make it compulsory for the parties to resolve any dispute through alternative dispute resolution. The usage of alternative dispute resolution along with Section 89 of the Code of Civil Procedure through conciliation, arbitration or judicial settlement can be made compulsory in the cases related to bouncing of cheques by making sufficient amendments to the NI Act. Thus, the Government can on one hand decriminalize Section 138, NI Act and on the other make it compulsory for the disputed parties to resolve their conflict via Alternate Dispute Resolution. However, there are only a few numbers of arbitrators who would take up ADR cases, and there is no institutional system of providing arbitral proceedings outside metropolitan cities.
  2. Civil Jurisdiction: the civil remedies were already available to the citizens before the amendment through which the provision was criminalized. This option would enable going back to the same legal system to enforce a contract. Enforcing a contract via judiciary is an excruciating effort as it involves 1420 days on an average to resolve a contractual dispute. As far as practical applications of this alternative are concerned it would not be sufficient. In addition to this, this would also defeat the whole purpose of the amendment. The punishment currently as under Section 138 is of two-year imprisonment and fine extending double the amount mentioned in the cheque. This alternative would however, provide for certainty to the holder and at the same time can prove to be deterrent for the drawer.

What if Cheques are Stunted?:

However, if we consider for one instance that what if, we do away with the whole cheque system itself? For many, it would be a viable option. But practically, it has its own repercussions. We shall discuss both the merits and demerits of the same.

Merits: if the cheque system is abolished, it would be replaced with E-transfer of funds, which is a very safe and fast process. The electronic transfer of funds would prove to be a very efficient way to transfer funds and the biggest advantage with it would be that, it would not be time-consuming and the creditor need not go to a bank to encash a cheque in order to get the money. However, this method has its consequences as well. For instance, if the transfer failed, then the creditor might not have sufficient proof to say that he did not receive the money at all.

Demerits: although physical cheques are widely followed in India, at the back end, they have been modified into ‘digital cheques’ since the banks have implemented the Cheque Truncation System (CTS). It was brought up by the RBI. This system provides banks with the freedom to circumvent transporting a physical cheque from the presenting bank to the drawee bank. Via CTS, an image of the cheque has to be sent to the drawee bank. Hence, the time required to clear the cheque is reduced.

It is quite possible that the onset of demonetization has increased the cheques since it stunted cash transactions. Cheques prove to be an expensive ordeal. If a ban happens, banks would not be affected since they have already shifted to CTS. It would not prove to be much impactful on retailers in the urban areas at least since; they can use UPI method to transfer money. Practically, it would not be feasible for the people residing in rural areas who still have cheques as the only medium to transfer money.

Comparison with the Legislation in other Countries:

Legislators can always come up with the solutions by penetrating in the legal system of other countries to find if they have dealt with those problems in a better way. For instance, one of the best practices for the dishonour of cheques is followed in France. After a cheque is dishonoured, the bank will charge an amount known as service charge from the defaulter. The banks also have the power to add a person who frequently defaults the payments in the central register called the Fichier Central de Chèque. The person can also be banned by the bank from issuing cheques for five years.

Another example is the USA where some of the states have the provisions which gave the power to banks to increase the penalty for successive cheque by a person. This type of provision can act as a deterrent for frequent defaulters.

There is no such law of banning the person from issuing of cheques in India and the service charge which is charged from the defaulters is so less that it is of no significance. Parliament can come up with a new law where the bank has the power to report the name of the frequent defaulters in a central database along with an increase in penalty irrespective of the value of the cheque. Banning the frequent defaulters from issuing cheques for a certain period is also an effective deterrent which can be replicated in India by keeping in mind the increasing cases.

Conclusion and Suggestive Remarks:

In conclusion, the move of Finance Ministry to decriminalize Section 138, NI Act is welcomed and we surely think that the move would definitely lessen the burden which currently the judiciary is facing in India. A major drawback with Section 138, NI Act is that it mentions both punishment and fine without considering the presence of intention. It would be highly helpful if the provision is done away with and only civil liability must remain i.e. only fine should be implemented which can be doubled or tripled depending upon the gravity of the offence.

The authors are 2nd Year students at NLU, Odisha

CCI’s probe into alleged anti-competitive practices, E-Commerce market report and need for a revamped mechanism

  • Ashhab Khan & Janhavi Singh

Introduction

E-commerce is indisputably the fastest evolving sector in India because of increased access to the internet and developing technology, both of which have led to an increase in consumer demand. It was further boosted with the relaxation in FDI norms due to which many international players entered the Indian markets and there was easy access to funding opportunities.

The year 2020 started with the Competition Commission of India (“CCI”) publishing the “Market Study on E-commerce in India” on 8th January. It is a report which encapsulates features of e-commerce and trends in the market, major competition issues, observations and findings. Further, on 13th January the commission ordered an investigation into Flipkart and Amazon for alleged anti-competitive activities.

The Indian Competition law regime is new to such developments in the E-Commerce sector and thus, the abovementioned report and case may provide a foundation for CCI to endorse competitive practices in the market. The authors, through a careful examination of the cases and the study, aim to highlight the need to check anti-competitive behaviour in the E-Commerce sector and its negative impact on the physical market.

Background of the Case

The order on the agenda is regarding the allegations made against Flipkart and Amazon, the two undisputed mammoths of the “Internet shopping era”. It first surfaced in the case of Delhi Vyaapar Mahasangh v. Amazon Seller Services Pvt. Ltd.(Amazon) and Flipkart Internet Services Pvt. Ltd.(Flipkart), where the informant alleged that sections 3 and 4 of the Competition Act, 2002 were said to have been violated by the defendants by possibly entering into vertical agreements with smartphone companies and manufactures based in China. Furthermore, the informants contended that the opposite party palpably enjoyed a dominant position in the market and was practising predatory pricing, which was apparently plausible owing to their exclusive tie-ups with the preferred companies. Through predatory pricing, the companies are able to set their market prices low and attract substantial consumer preference and consequently, several competitors face a threat of being thrown out of the business. It was also insinuated that this discriminatory practice undermined competition and in the long run, may prove to be detrimental to other sellers, therefore, affect the fair distribution of products.

The commission acknowledged the implications and noted that there is an incontestable potential to hamper competition and it may ultimately lead to Appreciable Adverse Effect on Competition (AAEC). While it was alleged that the companies practised collective dominance, the commission quashed it as the Competition Act, 2002 has no provision regarding the same. On account of such allegations and relevant evidence produced by the informant and available in the public domain, the director-general (DG) was instructed by the commission to look into the matter immediately and determine whether or not section 3(1) and section 4(1) of the were compromised by the defendants in the course of their business.

Later, Amazon India filed a writ petition in the Karnataka High Court to seek redressal. In its petition, the company submitted that CCI does not hold lawful jurisdiction over the matter and therefore cannot issue an investigation order into the adopted course of action of the company. It also pleaded against the absence of representatives from any relevant E-Commerce platforms during the hearing and CCI’s apparent ex-parte decision. Due to this, the petitioners said that there was a lack of opportunity extended to present a counter proposition to all the allegations hurled against them. The high court principally noted CCI’s diffidence in defining the relevant market in the present case as dominance cannot be established in isolation of the existence of a relevant market.

To substantiate its assertion, Amazon cited a similar case presented before CCI in November, 2018 where it had quashed All India Online Venders Association (AIOVA)’s postulation against Flipkart India stating that such companies do not enjoy dominant position in the market and thus, cannot violate section 4(3) of the Competition Act through their policies. Furthermore, the petitioner had shed light on the fact that CCI acted on a mere possibility that it “appears that the E-commerce companies are in exclusive agreements with smartphone brands”. Subsequently, Karnataka High Court on 14/02/20, issued an interim stay of four weeks on CCI’s investigation order. The High court later reiterated its decision in a writ petition filed by Flipkart India challenging the probe. Therefore, the high court’s stand in both cases presents a counter to CCI’s approach in disposing of issues emerging out of the expanding E-commerce market in India. It also raises a pertinent question regarding the need to adopt an effective mechanism helpful in timely determining whether or not E-commerce platforms are indulging in anti-competitive behaviour and are detrimental to the market.

Market Study conducted by CCI

The report “Market Study on E-commerce” released by CCI, aims to understand the modus operandi of the E-commerce market and identify emerging hindrances to competition and to ascertain CCI’s enforcement and advocacy priorities in light of the same. Since the revenue from the E-Commerce sector in India has been increasing at an annual rate of 51%, there are various challenges present in this sector in the competition sphere and this report is seen as a resource to overcome such challenges.

The study inspects the issue of platform neutrality and acknowledges that in both cases i.e. preferential sellers and private labels, there exists a lack of transparency mainly regarding search-ranking criteria, use of black-box algorithms and commercial terms offered by platforms, which may put other retailers on the platforms at a disadvantage. It concedes that there are limits to the data that can be unconcealed as it may raise the risk of businesses to game the systems. But this shouldn’t curb the platform to reduce the risk and hence should ensure ample transparency.

For exclusive agreements, it was observed that while it can increase prices and reduce choices, it can also increase efficiencies and competition among the brands of different manufacturers or service providers. Hence, it has to be analysed on a case-by-case basis and the commission can examine them u/s 3(4) of the Act in a ‘rule of reason framework’.

Deep discounts are significantly more than usual discount as there is a greater reduction in price as compared to the product’s original value. The CCI contemplated the requirement to recognize the schemes of discount used because the extensive deep discounts have a propensity to push costs below the price levels. While from the viewpoint of the consumers, so as to appeal to the demand, it’s vital to assimilate a moderate approach for discounting, as the same cannot be entirely done away with. Deep discounting raises apprehensions such as unfair conditions due to differential discounting structures, demotion in rankings, profitability erosion and loss of brand equity, etc. for retailers. The study further acknowledges that while deep discounts promoted customer on-boarding and increased network effects, no distinguishable cost-savings arose from it. Duly, it concludes that even though discounting for a short duration might be justifiable, longer periods would be put through a fact-intensive analysis. Thus, CCI has firmly emphasised to adopt a case-by-case review structure.

From the recapitulation of the study it is apparent that it envisages, the Commission’s intelligible intentions regarding online markets and transactions underneath their umbrella. This report shall be presenting a strict framework to closely monitor and initiate high-level investigations in this sphere. In the times of the widespread COVID-19, the consumers have moved to online platforms more than ever to purchase all kinds of goods ranging from essential supplies like groceries to electronics, kitchen appliances, clothes, toys & games etc. Hence, it is to be ensured that the practices adopted by such portals do not result in distorting the primary free-flowing market mechanisms of demand and supply.

Conclusion         

A heedful and detailed analysis of CCI’s venture into the functioning of E-commerce giants in India and the ensuing disapproval shown by the judiciary conveys vital insight into the complications faced by the commission in taking futuristic steps to dodge anti-competitive practices in the internet era. While the probe ordered by CCI to enable the DG to investigate into the purported defiance of provisions laid under the competition act by E-Commerce platform is essential, it becomes incontestable that the commission doesn’t make arbitrary assumptions or relies upon dubious assertions when it comes to establishing responsibility. Moreover, taking into consideration the contemporary consumer preferences, relaxed FDI norms and business avenues emerging out of it, it is undoubtedly agreed upon that brick and mortar stores or physical retail markets are taking a steady backseat and online shopping is hitting the roof.

 In such circumstances, the commission should adopt a more cautious strategy to efficiently deal with cases involving discrepancies as the one discussed above and penalize every anti-competitive practice taking place in the market impartially and irrespective of the players involved. This carefully moulded approach paired up with modifications in the Competition Act to sustain the physical market and sellers in the constantly evolving world of E-Commerce and its perceptible dominance is need of the hour.

The authors are 2nd Year students at NLIU, Bhopal

The Conundrum Of Co-Existence Of Patents And Trade Secrets

  • Anamika Mishra & K.Amoghavarsha

1.  Introduction

Intellectual property rights have been characterized as a bundle of intangible rights ensuring the protection of commercially valuable insights. Patent and Trade secrets are two methods used by innovators and pioneers to protect their innovation. Patent and trade secret are the two significant strategies for ensuring the protection of innovation that underpins a competitive advantage. While this has been valid for quite a long time, the legal scenario where organizations must pick between them has changed drastically as of late. Organizations are frequently confronted with the issue of whether to protect the property through patent or save the data by means of a trade secret. There are huge contrasts between the sort and level of assurance gave by the patent law and the trade secret law that influence innovators’ decisions between the two.

Amidst all the COVID-19 related interruption, the Delhi High Court has rendered a significant decision in the case of John Richard Brady and Ors v. Chemical Process equipment’s P. Ltd[i] on the issue of the dilemma of interconnection and the relation of patents and trade secrets with potential expansive outcomes.

2.  Intersection Between Trade secret and patent

The Indian context about the relationship between patent and trade secrets has been different. In the case of Kewanee Oil Co. v. Bicron Corp[ii], it was held by the U.S. SC court that pre-emption pf such laws were concerned with the subjects and the laws are considered to be not preempted if the subject is secret and not in the knowledge of the general public in the business.

In India with respect to trade secrets, there is no definite statutory protection for trade secrets. The Indian courts have instead taken an approach of common law by upholding trade secrets on the basis of common law and equity and breach of confidence which is on a similar footing with breach of a contract. An owner of a trade secret as a remedy can obtain an injunction which restrains the licensee from revealing the trade secret, compensation for any losses suffered in consequence of disclosing a trade secret. In the present case, Delhi HC resorted to a broader perspective regarding equitable jurisdiction and injunction was granted even in the absence of any contract.

3. Interpretation by the court

In a single judge decision, it was held that the patent and trade secret cannot be granted to the same product/process. The court stated that when a patent has been applied for and expired too, the invention comes under the public domain and henceforth, a claim for trade secret protection cannot be claimed.[iii]

The most important issue raised before the court was “whether an invention which does not qualify as patented product and has no property right therein, can acquire property rights by the third person entering into an agreement of exchange of Know-How and thus claiming confidentiality”.

The court said it cannot happen so. According to the Hon’ble court’s observation, for any product or process without a patent being applied for it, its know-how would be in the public domain. It was also opined by the court that in India, trade secrets and confidential information are not equivalent to property. There exists a criterion of sufficiency and best mode requirement in patents i.e. they require the complete disclosure of the product/process for it to be operated sufficiently and in its best possible mode[iv]. In addition to this, the compulsory licensing regime ensures that there is complete disclosure of the patent for the licensee to make the product/process.

As the plaintiffs in the above case did not have any subsisting protection of their patent in India and the patent had expired in the US, the court held that the product was in the public domain. The court said that the plaintiff was seeking a judicial creation of a monopoly for perpetuity which was impermissible and would be in complete contrast to the scope and objective of the Patent Act and violating public policy and judicial discipline.

This judgement has far-reaching consequences if it is applied beyond the facts of this case specifically. In the present times, trade secrets and patents are seen to be complementary to each other irrespective of the distinction. A single invention has various aspects and those aspects are protected in different ways i.e. some are protected via patent law and some by trade secrets depending on the specific aspect[v]. This is known as a layered protection model.

The finding of the court that “know-how” is in the public domain without any patent being applied thereon is in contrary to the position taken in previously, wherein it has been established that know-how is protected even if no patent has been applied for in respect thereof.[vi]

4. Conclusion

Earlier deciding whether to protect property through trade secret or patent (or both) used to be a genuinely clear exercise; or if nothing else we as a whole expected it was. Any transition initially feels disruptive but in any case, pendulums swing, and frameworks working in pressure normally come back to stability. Similarly, in this case, the change might be discomforting but will be stability in balancing the intersection of patents and trade secrets.

Regardless of the choice to use trade secret or patent for specific development and innovation, there is currently a more prominent need to focus on how information assets are managed. This is the fleeting property and requires a unique administration centre to ensure integrity, regardless of whether it is held as a trade secret or develops into a patent.

The authors are 3rd Year Students of NLU, Odisha


[i] 416 U.S. 470 (1974).

[ii] AIR 1987 Delhi 372.

[iii] Prof. Dr. Claudio De Simone & Anr v. Actial Farmaceutica, CS(OS) 576/2019.

[iv] Patents Act 1970 s.10(4).

[v] Michael R. Mcgurk & Jia W. Lu,The Intersection of Patents and Trade Secrets, 7 HASTINGS SCI. & TECH. L.J. 189 (2015).

[vi] Seager v. Copydex,1 WLR 923 (1967).

Dilemma of Proportionality in International Humanitarian Law

International Humanitarian Law is a set of rules made for regulating armed conflicts that seek to limit the effects of armed conflict, by protecting the persons who are not the part of the armed conflict. Proportionality is one of the pillars of International Humanitarian Law and an inherent part of customary international humanitarian law, which prohibits attack causing excessive incidental loss to civilians and damage to civilian objects than an expected military advantage. This principle acknowledges such inevitable collateral civilian casualties and damage to civilian objects caused even after taking reasonable care and precautions in attack by the parties of the armed conflict. Usually, caused when civilians and civilian objects are mingled with combatants and military objectives.  

According to this principle before attacking, an assessment should be done comparing incidental loss or damage from the attack and the advantage from the attack which can be expected by a reasonable person while planning or launching the attack, according to the information possessed by him at the relevant time. As stated in Prosecutor v. Prlić, principle of proportionality is defined in Article 51(5)(b) of Additional Protocol 1 of Geneva Convention 1949 and was later drawn by the drafters of Rome Statute of International Criminal Court for Article 8(2)(b)(iv) as War Crime of causing excessive incidental damage civilian objects and loss to civilians.

However, as there is no proper standard of measuring proportionality and the assessment is done on the expectation of the commander which makes it very subjective and prone to ambiguities. Furthermore, the cost of any erroneous judgment is very high because it can result into death of civilians and damage to civilian objects. Hence, there is a need for modification in this standard of proportionality.

Problems in assessing Incidental loss

Proportionality operates in the scenario in which incidental injury and damage is foreseeable, albeit undesired. Incidental loss includes injury, casualties and damage which the person planning the attack could expect. Incidental loss consists of both direct and indirect effects. Direct effects are the immediate, first-order consequences whereas indirect effects of an attack consists of the reverberated, delayed and displaced (second, third and higher-order) consequences of the action.

The incidental damage considered in proportionality assessment includes any indirect loss that may be reasonably expected and foreseeable by those launching or planning the attack. So if a commander concludes in good faith based on the information reasonably available that the incidental damage to civilian or civilian object is not excessive, the attack will not be in violation of the prohibition even if an ex post facto assessment reveals that excessive incidental damage has been inflicted. 

However, it is a contentious issue that up to what extent( i.e. upto what order) the effects of the attack have to be factored into the proportionality test. Moreover, the foreseeability of the person may also vary depending on the planning of the attacks, for example, the attacks done in defence will not be planned and the expectation of incidental loss will vary as compare to the well planned bombings. Regardless of what the possible losses are, as proportionality is assessed from the expectation of the commander hence, commander has the complete discretion to attack unless the attack is clearly disproportionate.

 Problems in assessing Military Advantage

The assessment of proportionality requires balancing of two very different sets of values and objectives. The two values are expected incidental loss and the concrete and direct military advantage which can be anticipated from the attack. The expression, “concrete and direct” is intended to show that the advantage concerned should be substantial and relatively immediate, hence the advantage which is hardly perceptible or which would only appear in the long-term should be disregarded.

Proportionality is calculated on the expectation rather than the results and the military advantage factored into this standard is determined at the time of planning or executing an attack (Commentary on HPCR manual). Thus, it means that foreseeable incidental damage, or casualties should be weighed against the foreseeable military advantage of a particular military operation including indirect effects.

However, it is not necessary that the concrete and military advantage anticipated must be the advantage of destroying or weakening the enemy’s armed forces but can also be that of the denying enemy military object and defending one’s own attacking force (DoD Law of War Manual).  In anticipation of military advantage the same prospective standard is applied which is applicable in expectation of incidental loss, hence it gives the commander the same discretion for estimating military advantage, as for incidental loss, which may vary from person to person according to the importance of the military objectives .

Problem in assessing the proportionality

As stated in Prosecutor v Galić there exists a basic obligation to spare civilians and civilian objects as much as possible and this obligation guides the attacking party while considering the proportionality. The assessment should include military advantage and incidental loss in terms of relatives values which will be included or excluded in totalling the sums, in the standard of time or space and according to the extent a military commander is obligated to expose his forces to danger to limit the incidental loss. 

Assessment of proportionality requires balancing of two very different sets of values and objectives, in a framework in which all choices will affect human life. That balancing is inherently difficult, and raises significant moral and ethical issues and raises core questions, in assessing a commander’s decision to attack like (a) whether he or she made the determination based on the best information available, given the circumstances, (b) what to include or exclude in totalling of sums (indirect effects), (c) what are the relative values to be assigned to the military advantage and incidental loss to civilians and civilian objects ,  (d) whether commander took all precautionary measures to spare civilians and civilian objects and (e) whether a reasonable commander could have reached a similar conclusion.

            The answer to these questions may differ depending on the background and values of the commander. Moreover, International Humanitarian Law lacks the definition of the term ‘excessive’ and thus, works on the general agreement that ‘excessive’ is not equivalent to ‘extensive’ and that assessing excessiveness is more than an empirical analysis. Assessment of the proportionality principle is not a matter of counting civilian casualties and comparing them to the number of enemy casualties. Hence, even extensive civilian casualties may not be excessive in the light of the concrete and direct military advantage anticipated. However, there is no standard for determining proportionality and as proportionality is estimated ex-ante therefore it becomes very subjective and difficult for anyone,  facing an immense pressure of armed conflict, to determine whether attack is proportionate or not.

Consequences of this problem

Firstly- Article 8(2)(b)(iv) of Rome Statute which criminalizes disproportionate attacks during armed conflicts, requires an evaluation by the Court based on the information available to the perpetrator. Thus judges will have to decide whether the attack is proportionate or not, from reasonable commander standard, according to the information available to him at the time. Also, according to Article 66 of Rome Statute, the onus is on the prosecutor to prove the guilt of the accused beyond reasonable doubt and until then the commander is presumed to be innocent. Hence, both the court and the prosecutor has to inspect the expectation of the commander retrospectively, which because of ambiguities and varied interpretation can make accused go scot-free.

Secondly- This proportionality principle justifies civilian deaths and damage to civilian objects, though not directly, if the commander thinks that the loss is not excessive. This facet of this principle is contrary to the rule of distinction by which parties to the conflict are obligated to distinguish between civilians and combatants, and civilian objects and military objects.  

Conclusion

The International Humanitarian Law seeks to limit the effects of armed conflicts on civilians and civilian objects by making an obligation on the parties of the armed conflict. Hence, laws are biased towards civilians and civilian objects for their protection. Like in case of doubt that whether an object is civilian or military, it shall be presumed to be a civilian object and the objects which are indispensable to the survival of the civilian population should not be attacked.

Similarly, in case of doubt i.e. in the situations where it cannot be clearly said whether attack is proportionate or not. The attack should be presumed to be disproportionate and the onus should be on the military commander to prove that the attack was proportionate, and that he acted reasonably according to the information available to him. As proportionality is assessed according to the expectation of the commander hence if he is innocent he will be able to justify it. Moreover, this will create deterrence as now commander will have to justify his assessment, and will have to take more precautions while attacking, and in dubious cases he has to refrain from attacking which will reduce incidental losses.

The author is a 2nd Year Student of GNLU, Gandhinagar

Judicial Evolution of the Right to Privacy and the Aadhar conundrum by Harish Jayakumar, HNLU

The Industrial Revolution picked up steam at the turn of the 19th century and the world underwent a decisive change forever. Almost 200 years later, the world is similarly being transformed by the Technological Revolution. It has been instrumental in propelling us into the Information Age where the proliferation of knowledge has never been greater. However, while the benefits are numerous and immense in their scale, there are equally vital concerns ranging from privacy to data-protection to which a search for an effective solution is still ongoing. One needs to understand the significance of technology because the current and future notions of privacy hinges on how modern society shapes itself to this technological change. Our right to privacy is not the same definition that existed in the ancient era and is constantly evolving and adapting with the times. Previously, the notion of privacy was restricted to the idea of protecting one’s person and property from torts such as trespass[1]. Now, the right to privacy has evolved completely to encapsulate not just privacy in the physical state but also to privacy in the spiritual and intellectual state as well[2].

In India, defining the right to privacy and its extent is more complicated because the Indian Constitution does not guarantee a specific right to privacy. Though the Supreme Court in various judgements has affirmed indeed that a right to privacy is an inherent right and that it flows naturally from the Right to Life and Personal Liberty, it is still a matter of contention. This has created consternation because the right to privacy is an important and inalienable right inherent to every Indian citizen but this is being offset by the State’s need to balance its national security interests. Most recently, the debate around the right to privacy has arisen around the Aadhaar which is a unique 12-digit identity number exclusive to every Indian[3] which is issued by the central government agency known as the Unique Identification Authority of India (henceforth UIDAI). The purpose of the Aadhaar is akin to what the role is of the social security number in the United States. It qualifies as a valid ID for availing various important government services and to receive government subsidies.

The controversy around Aadhaar is because the UIDAI collects the biometric and demographic data of the residents and stores this in a centralized database. This poses a serious risk to the right to privacy of each individual as it is now possible to categorize everyone in society by analyzing their biometric information. This is notwithstanding the fact that this information is in a centralized database which is a major security concern. The safeguards that have been introduced by the government in order to ostensibly protect the information of the citizens are also wholly inadequate and laughable by international standards. The implementation of the project has not taken place smoothly and has been ridden with a slew of controversies which raises questions regarding the efficacy of the government’s methods. The Aadhaar has been introduced by the government to provide many of their most important services and subsidies through the Public Distribution System (PDS). It is directly transferred to the lower strata of society in order to eliminate the middlemen and the constant leakages that plague the system. Also as of May 2016, almost 101 crore Aadhaar cards have been issued and 97% of adults possess an Aadhaar card[4]. So, it is clear that the project is on its way to its completion. Therefore, there are two very important questions that arise from this. Firstly, is the right to privacy a fundamental right guaranteed under the Constitution and is the UIDAI or Aadhaar in violation of an individual’s right to privacy?

 

The Supreme Court’s stance

 

The evolution of the Right to Privacy did not start out positively in India. The first case before the court which addressed the Right to Privacy was in M.P. Sharma & Others vs. Satish Chandra, District Magistrate of Delhi & Others[5]. The case considered whether there were any constitutional limitations to the government’s search and seizure of people’s homes. Here, the headnote reads, “When the Constitution makers have thought fit not to subject such regulation to Constitutional limitations by recognition of a fundamental right to privacy, analogous to the American Fourth Amendment, we have no justification to import it into a different fundamental right by some process of strained construction.” The American Fourth Amendment states that it is the “right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures.”[6] An important point to be noted is that this does not pertain to the entire right to privacy. It only deals with a part of it, namely the protection of people against search and seizure. Following this is Kharak Singh vs State of Uttar Pradesh[7] which dealt with the physical surveillance of ‘history sheeters’. In this case also, the right to privacy was not recognized. The judgement begins stating that “as already pointed out, the right to privacy is not a guaranteed right under our constitution.”[8] Though, the saving grace here is “as already pointed out” which refers to an earlier section of the judgement where the Court quotes the US Fourth Amendment, and then declares that the Constitution does not confer any ‘like constitutional guarantee’[9] following the ratio of the M.P. Sharma Case. It is clear that both these cases don’t refer to right to privacy as a whole. The Attorney General, Mr. Mukul Rohatgi provoked a huge controversy when he stated in the Supreme Court that Right to Privacy is not a right provided by the Constitution while defending the claim that the Aadhaar violated the Right to Privacy on the basis of these 2 cases[10]. This was a technical error on the Attorney General’s part as both of these cases deal with the question of whether the US Fourth Amendment can be read into the Indian Constitution and not about the whole right to privacy. The 2 cases discussed above don’t rule out a broad constitutional right to privacy as the right to privacy is a bundle of rights not limited to only surveillance or search and seizure. Also, in the minority judgement of the Kharak Singh case, Justice Subba Rao recognized the need for a right to privacy under Article 21 and set the foreground for shaping the right to privacy under Article 21.

In subsequent years, small bench judges expanded the position of the right to privacy. In Govind vs State of Madhya Pradesh[11] which also dealt with the surveillance of ‘history sheeters’, the Court held that the surveillance by various means is not violative of Article 21 of the Constitution as it was a regulation according to “procedure established by law.”[12] However, it recognized the right to privacy in a limited context and allowed that it should be developed on a case-by-case basis. The true break for the Right to Privacy came with the celebrated Maneka Gandhi[13] case which greatly expanded the ambit of Article 21. In the judgement, Justice Bhagwati observed, “The expression ‘personal liberty’ in Article 21 is of the widest amplitude and it covers a variety of rights which go to constitute the personal liberty of man and some of them have raised to the status of distinct fundamental rights and given additional protection under Article 19.” Thus, the Court had held Article 21 to be controlled by Article 19 binding the two important rights together. This also meant that the ambit of right to privacy had greatly increased and could now be interpreted in a much more liberal manner. So, following this in R. Rajagopal vs State of Tamil Nadu[14]  the apex court observed, “The right to privacy is implicit in the right to life and liberty guaranteed to the citizens of this country by Article 21. It is a right to be let alone. A citizen has a right to safeguard the privacy of his own, his family, marriage, procreation, motherhood, child bearing and education among other matters.[15]” Therefore, these final cases represented a decisive shift in the court’s ratio towards the right to privacy. Previously, the court took a cautious stance and interpreted the law in a positive manner following the text of the Constitution. With the liberalization of the country during the early 90s, the Court also followed suit as observed in R. Rajagopal and took favorable interpretations of the right to privacy.

The Evolution of the Aadhaar Project

The need for issuing every citizen an identity card and number had started during the Vajpayee years itself. It was then taken up the subsequent UPA government which established the UIDAI as an attached office of the Planning Commission in 2009. As stated above, the purpose of the Aadhaar is to issue a unique 12-digit number to all residents of India in the form of the Aadhaar card which will serve as the primary proof of identity anywhere across India. This card would contain their biographic and demographic information such as photograph, ten fingerprints and two iris scans which would then be stored in a centralized database[16]. In the beginning, the Aadhaar was created in order to weed out illegal aliens but this has changed to focus it as a development initiative[17]. In its current form, Aadhaar is part of the government’s flagship JAM Trinity (Jan Dhan, Aadhaar and Mobile Banking) by which the government seeks to provide its services to the people using these as the medium in a more efficient, effective and economical way. Aadhaar is the lynchpin of this program and some of the government programs which can be availed using the Aadhaar card include procuring an LPG connection, subsidized rations from the PDS, and benefits under NSAP pension schemes, obtaining a SIM card or opening a bank account[18]. The importance of the Aadhaar is therefore clear and India needs such an identity card so that the beneficial schemes that the government implement reaches those that need it the most.

Troubling Concerns

The Aadhaar has gone through a slew of controversies since its inception and this has raised many vital concerns. Until March 2016, the Aadhaar did not even have legislative backing and the entire project continued to run only on the basis of an executive order[19]. It was only on March 11, 2016 that the Parliament passed the Aadhaar (Targeted Delivery of Financial and Other Subsidies, benefits and services) Act, 2016. Even this was not without controversy as the Bill was introduced as a money bill in order to bypass the Rajya Sabha where the ruling government did not have a majority.

Another controversy is the so-called “voluntary” nature of the Aadhaar card. In March 2014, the Supreme Court passed an interim order declaring that the Aadhaar is not mandatory and no one should be forced to use it to avail government services[20]. However, the government fosters the illusion that an Aadhaar is absolutely necessary and one must register their bank accounts with their Aadhaar number in order to avail its various facilities. Indeed, it was only after the Supreme Court passed its orders declaring that no one should be denied services for want of an Aadhaar that the government made statements stating that it was voluntary[21]. In fact, some of the government’s most important schemes such as Jan Dhan Yojana, Ration Card & LPG Subsidy and Mobile Numbers don’t even require the use of an Aadhaar. Therefore, it begs the question as to why the government is so focused on promoting it as a mandatory requirement and it raises concerns about their need to profile the citizens.

This leads us to the most important issue regarding Aadhaar which is privacy or the lack of it in the entire Aadhaar project. The main danger is that it opens the door to mass surveillance because Most of the “Aadhaar-enabled” databases will be accessible to the government[22]. This brings to mind the Snowden leaks in 2013 which revealed that the US government was extensively spying on its own citizens in the guise of “protecting national interests”. Another important concern that has been raised is the method and process of data collection. The UIDAI has enlisted the services of several private subcontractors in order to collect the data which greatly increases the possibility of leakages of data occurring[23]. They are also not responsible to Indian law for data collation and this greatly exacerbates the threat to the right to privacy. Lastly, there is the use of the centralized database which keeps the record of all the biometric and demographic information of each citizen. This has been a great concern because of 2 reasons. Firstly, the data is in the hands of the government which can then use it in order to categorize the people in society. Also, there is the possibility that data leaks may arise from this centralized database because there is as yet, no foolproof system in place to guard against breach of data from the private players despite the UIDAI’s claims that it has robust security measures in place[24].

The UIDAI had an opportunity to implement the Aadhaar for the noble purpose of setting up an effective Public Distribution System and also a pan-India identity card for any transaction throughout the length and breadth of the country. While this has ostensibly been done in some respects, it has also come at a great cost. The government has in the background created a big-brother like situation where they are poised to misuse this data for mass surveillance and profile the citizens in the country. In the world’s largest democracy, such a fundamental violation of a natural right is deeply regrettable.

Conclusion

 

Let us be clear that an absolute right to privacy is impossible in this day and age. It is a fact that somehow, somewhere, we are bound to be identified and categorized in some respect. With technology pervading and becoming an intrinsic part of our lives, it is not possible to truly enjoy a complete right to privacy. However, this does not mean that the right to privacy should be made inviolable to allow mass surveillance by a government. There are still certain fundamental tenets about the right to privacy that must be respected and protected at all costs. Therefore, this presents a new question to the social contract: Does a citizen forsake one’s right to privacy in order to safeguard national security interests? The answer is undoubtedly no because this is a right that is an essential constituent of personal liberty and also to enjoy a free and fruitful life. The Supreme Court is currently deliberating over whether the Right to Privacy constitutes a fundamental right and one only hopes that they declare a positive affirmation firmly entrenching it so. This is important because going forward technology is going to play an even more important role in lives of people. Therefore, stringent declarations protecting the rights of people in case of data protection and privacy violations will become all the more important. By setting a precedent right now, it will help the future generations to expand upon the doctrine. Laying ironclad precedents also sends a message to the government to not tamper with the rights of citizens from the start and conduct their policies respecting these principles. It also ensures that projects such as Aadhaar which are in danger of grossly violating an individual’s right to privacy are never again conducted in the manner that they have been. The Aadhaar is currently poised to be one of the government’s most successful initiatives considering the amount the government has saved plugging leakages in the PDS and directly helping the people who are below poverty line. However, the government is the caretaker of the people and they should be providing the best possible safeguards if they are undertaking any measure that may compromise on an individual’s right. It is regrettable that the same cannot be said of the Aadhaar which stands as a threat to the right to privacy of every citizen. So, it is up to the people to put pressure on the courts and the Parliament alike so that they can take cognizance of the needs of the people and the need of the law to adapt to changing times and their responsibility to ensure that it happens in the free and democratic tradition that this country was founded upon.

 

[1] Samuel D. Warren & Louis D. Brandeis, The Right to Privacy, 4(5) HARVARD LAW REVIEW 193, 193 (1890).

[2] Hinailiyas, Right to Privacy under Article 21 and the Related Conflicts (January 22, 2014), LEGAL SERVICES INDIA, available at http://www.legalservicesindia.com/article/article/right-to-privacy-under-article-21-and-the-related-conflicts-1630-1.html (Last visited on June 2, 2016).

[3] V Nalinakanthi, All you wanted to know about the Aadhaar Bill, THE HINDU BUSINESS LINE (March 21, 2016), available at http://www.thehindubusinessline.com/opinion/columns/all-you-wanted-to-know-about-aadhaar-bill/article8381808.ece (Last visited on June 9, 2016).

[4] UIDAI (2009), Aadhaar Generation Progress in India, Aadhaar by Ages & Gender, and Aadhaar by Trend (Bar Graph) available at https://portal.uidai.gov.in/uidwebportal/dashboard.do (Last visited on April 30, 2016).

[5] M.P Sharma & Others v. Satish Chandra, District Magistrate of Delhi & Others, AIR  1954 SC 300 (Supreme Court of India).

[6] Amendment IV, THE CONSTITUTION OF THE UNITED STATES OF AMERICA, 1787.

[7] Kharak Singh vs State of UP, AIR 1963 SC 1295

[8] Id., at 13.

[9] Chinmayi Arun, A Basic Right is in Danger, THE HINDU (July 31, 2015), available at http://www.thehindu.com/opinion/op-ed/a-basic-right-is-in-danger/article7482874.ece (Last visited on June 9, 2016).

[10] PTI, Right to Privacy cannot be a Fundamental Right: Centre Tells Supreme Court, ECONOMIC TIMES (July 23, 2015), available at http://articles.economictimes.indiatimes.com/2015-07-23/news/64773078_1_fundamental-right-attorney-general-mukul-rohatgi-privacy (Last visited on June 7, 2016).

[11] Govind vs State of Madhya Pradesh, (1975) 2 SCC 148 (Supreme Court of India).

[12] Id., at Para 176.

[13] Maneka Gandhi vs Union of India, (1978) 2 SCR 621 (Supreme Court of India).

[14] R.Rajagopal vs State of Tamil Nadu, (1994) 6 SCC 632 (Supreme Court of India).

[15] Id., at 26.

[16] TNN, Learning with the times: What is Aadhaar?, THE TIMES OF INDIA (4th October  2010), available at: http://timesofindia.indiatimes.com/india/Learning-with-the-Times-What-is-Aadhaar/articleshow/6680601.cms (Last visited on June 9, 2016).

[17] Tusha Mittal, Falling between the barcodes, TEHELKA (20th August 2009), available at http://www.tehelka.com/2009/08/falling-between-the-barcodes/?singlepage=1 (Last visited on June 9, 2016).

[18] Seetha, There is a Privacy Issue with the Aadhaar Card, SWARAJAYA (July 29, 2015), available at  http://swarajyamag.com/politics/there-is-a-privacy-issue-with-the-aadhar-card (Last visited on June 9, 2016).

[19] Ruhi Tiwari, Aadhaar legal, valid under Constitution: Centre tells SC, THE INDIAN EXPRESS (February 12, 2015), available at http://indianexpress.com/article/india/india-others/aadhaar-legal-valid-under-constitution-centre-to-tell-sc/ (Last visited on June 9, 2016).

[20] Krishnadas Rajagopal, Don’t insist on Aadhaar, warns SC, THE HINDU (March 16, 2015), available at http://www.thehindu.com/news/national/aadhaar-not-mandatory-sc-reiterates/article6999924.ece (Last visited on June 9, 2016).

[21] Dhananjay Mahapatra, Aadhaar use will be voluntary, says government, THE TIMES OF INDIA (October 15, 2015), available at http://timesofindia.indiatimes.com/india/Aadhaar-use-will-be-voluntary-says-government/articleshow/49366557.cms (Last visited on June 9, 2016).

[22] Jean Dreze, The Aadhaar Coup THE HINDU (March 15, 2016), available at http://www.thehindu.com/opinion/lead/jean-dreze-on-aadhaar-mass-surveillance-data collection/article8352912.ece (Last visited on June 9, 2016).

[23] Rajeev Chandrasekhar, A Shaky Aadhaar INDIAN EXPRESS (October 1, 2015), available at http://indianexpress.com/article/opinion/columns/a-shaky-aadhaar/ (Last visited on June 9, 2016).

[24] Usha Ramanathan, Who Owns the UID Database? MONEYLIFE (April 30, 2013), available at http://www.moneylife.in/article/aadhaar-who-owns-the-uid-database-ndashpart-ii/32440.html (Last visited on June 9, 2016).