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Manoj K. Singh Founding Partner

EDITORIAL

Dear Friends,

We are pleased to present the first edition of the year 2020 i.e. the January 2020 Edition of our monthly newsletter “Indian Legal Impetus.” In this edition, we have covered recent developments, case laws and issues relating to various disciplines of law in India. We sincerely hope that you will find this issue of Indian Legal Impetus informative and engaging and keeping in tune with the latest interpretation of laws in the wake of recent judgments by the Hon’ble courts as well as recent amendments in law.

To begin with, we have an article that throws light on the concept of ‘Relational Contracts’, its evolution and its significance in long-term commercial contracts. With the central theme of preserving business efficacy in long-term commercial contracts, the article also deals with the treatment of relational contract by Indian Judiciary and discusses various celebrated cases, including but not limited to Nabha Power Limited vs Punjab State Power Corporation [(2018) 11 SCC 508].

The next article analyses the recent judgment delivered by the Hon’ble Supreme Court in the case of Dyna Technologies Pvt. Ltd. Vs. Crompton Greaves Ltd [Civil Appeal No. 2153 of 2010, decided on 18.12.2019] which draws a line of demarcation between inadequacy of reasons in awards and unintelligible awards. The author in this article attempts to critically analyse the judgment regarding the issue of requirement of a reasoned award in arbitration proceedings in the light of Section 31 (3) of the Arbitration and Conciliation Act, 1996

We also have an analysis of Section 32A of the Insolvency and Bankruptcy Code (Amendment) Ordinance highlighting its significance, impact and need for such an amendment, which is followed by a very interesting article on “National Capital Territory of Delhi (Recognition of Propety Rights of residents in unauthorised colonies) Act, 2019”.

The next article analyses the recent judgment delivered by the Hon’ble Supreme Court in the case of The State of Arunachal Pradesh vs Ramchandra Rabidas [AIR 2019 SC 4954] wherein it was held by the Hon’ble Court that there is no bar under the MV Act or otherwise, to try and prosecute offences under the IPC for an offence relating to motor vehicle accidents.

The use and misuse of Section 124A of IPC have been a subject of public debate for a very long time in India. The next article deals with the misuse of sedition law in India.

The next segment highlights the transition of status of Jammu and Kashmir from a legal perspective followed by an article which discusses the 2019 amendments proposed and approved by the Ministry of Road Transport and Highway (MoRTH) in Toll-Operate-Transfer Model which was introduced by NHAI in order to monetize publicly funded highways.

Thereafter, there is an article which discusses the nature and enforceability of employment bonds in India. This article further emphasizes on the legality of employment bonds in India in light of section 27 of the Indian Contract Act, 1872.

Lastly, with growing cross-border investments and intellectual property transactions, the global surge in Intellectual Property (IP) disputes cannot be overlooked. The issue of arbitrability of IP disputes is gaining traction worldwide, with the perennial tug of war between rights in rem and rights in personam. In light of the above, the last segment lays special emphasis on arbitrability of IPR disputes in India.

Please feel free to send your valuable inputs /comments at [email protected]

Thank you.

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SINGH & ASSOCIATES ADVOCATES & SOLICITORS

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INDIAN LEGAL IMPETUSVolume XIII, Issue I

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Managing Editor Manoj K. Singh

Published by Singh & Associates

Advocates and Solicitors

Editor Rahul Pandey & Soumya Jha

1. EMERGENCE OF RELATIONAL CONTRACTS: A PERSPECTIVE 042. INADEQUACY OF REASONS IN AN AWARD VS. UNINTELLIGIBLE AWARDS: WHAT THE SUPREME COURT HELD 073. AN ANALYASIS OF SECTION 32A OF THE INSOLVENCY AND BANKRUPTCY CODE (AMENDMENT) ORDINANCE. 104. NATIONAL CAPITAL TERRITORY OF DELHI (RECOGNITION OF PROPERTY RIGHTS OF RESIDENTS IN UNAUTHORISED COLONIES) ACT, 2019 AND ITS IMPLICATIONS 125. OFFENCE COMMITTED UNDER MOTOR VEHICLES ACT, 1988 CAN ALSO BE PROSECUTED UNDER INDIAN PENAL CODE, 1860: AN ANALYSIS 156. MISUSE OF SEDITION LAW IN INDIA 177. TRANSITION OF JAMMU AND KASHMIR FROM BEING LAND TO A PRINCELY STATE TO STATE TO UNION TERRITORY: A LEGAL PERSPECTIVE 208. TOLL-OPERATE-TRANSFER MODEL AND ITS SUBSEQUENT AMENDMENT IN 2019: A WAY FORWARD 239. LEGALITY OF EMPLOYMENT BONDS IN INDIA: AN OUTLOOK 2510. ARBITRABILITY OF IPR DISPUTES IN INDIA: RIGHT IN PERSONAM V. RIGHT IN REM 27

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EMERGENCE OF RELATIONAL CONTRACTS: A PERSPECTIVEANMOL KUMAR AND SOUMYA JHA

INTRODUCTION: A BRIEF UNDERSTANDING OF THE CONCEPTRelational contracts are defined as “Contracts in which what is expected by both sides is not written out in detail but develops as an ongoing relationship.”1 In layman terms, a relational contract is one which identifies a relationship of trust and cooperation between the parties to which it pertains ultimately leading to mutual benefits for the parties involved. Moreover, the theory of relational contract essentially revolves around the idea that the explicit terms of a contract are just an outline and there are implicit terms and understandings which determine the behavior of the parties.

Nowadays in long term commercial contracts, in addition to maintaining contractual terms, emphasis is also placed on managing relationships between the parties involved owing to the fact that mere arm’s-length contractual relations in long term contracts exude a feeling of mistrust and defensive behavior that add to transaction costs. Therefore, while construing a contract, to include aspects of such a duty of implied good faith, the relevant background against which contracts are made includes not only matters of fact known to the parties but also “shared values and norms of behavior” such as an expectation of honesty and fidelity to the parties’ bargain2.

EVOLUTION OF RELATIONAL CONTRACTSThe concept of relational contracts dates back to 1889 when Lord Bowen in the judgment titled The Moorcock3 propounded the ‘business efficacy’ test, as per which a proposed term would be implied if it is necessary to give business efficacy to the transaction as must have been intended at all events by both parties who are businessmen.

1 Chrystal.K & Lipsey.R (1997), “Economics for business and management”, published by Oxford University press, New York, pg.702

2 Yam Seng Pte Ltd v International Trade Corp Ltd, [2013] EWHC 111 (QB)

3 [1889] 14 PD 64

The abovementioned judgment was followed by Shirlaw v Southern Foundries Ltd4 which propounded the ‘officious bystander’ test. This test lays down that something which is left to be implied and need not be expressed is something so obvious that it goes without saying, in so much, that while the parties were making their bargain, an officious bystander were to suggest some express provision for it in their agreement, and they would exclaim, ‘Oh, of course!’

Furthermore, the Queen’s Bench in the judgment titled Yam Seng Pte Ltd vs International Trade Corporation5suggested a shift from the traditional approach, with the court perhaps for the first time conclusively recognizing that there lies an implied duty of good faith in a commercial contract. Until this judgment there was no general doctrine of good faith in English contract law due to which the English courts have been reluctant to imply a duty of good faith into contractual arrangements. The only exception to this has been that the concept of good faith can be used in certain limited categories of contract by law, for example, in a fiduciary relationship. However, Mr. Justice Leggatt for the first time recognized that the traditional English hostility towards a generally applicable duty of good faith in performing contracts is “misplaced” and is “swimming against the tide”6.

Good faith in English contract law was further crystallized in 2019 by the Queen’s Bench in the case titled Bates vs Post Office Ltd.7wherein the court identified certain characteristics to assess whether a contract is relational or not which include but are not limited to:

1. No specific express terms in the contract that prevent a duty of good faith being implied.

2. A long-term contract, with the mutual intention of a long-term relationship.

4 [1939] 2 KB 206

5 [2013] EWHC 111

6 Yam Seng Pte Ltd v International Trade Corp Ltd, [2013] EWHC 111 (QB)

7 [2019] EWHC 606 (QB).


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3. An intention to perform the parties’ respective roles with integrity and fidelity to the bargain.

4. A commitment to collaboration in the contract’s performance.

5. The “spirits and objectives” of the parties’ venture being incapable of exhaustive expression in a written contract.

6. The parties reposing trust and confidence in each other (but of a kind different to that reposed in fiduciary relationships).

7. A high degree of communication, cooperation and predictable performance based on mutual trust and confidence, and expectations of loyalty.

8. A degree of significant investment by one or both parties.

9. Exclusivity of the contractual relationship.

It is also pertinent to mention that the Queen’s Bench in this judgment rejected the argument that a duty of good faith requires only that the parties act honestly. In the court’s view, the ambit of good faith included honesty but also required that the parties refrain from such conduct which in the relevant context would be regarded as commercially unacceptable by reasonable and honest people.

RELATABILITY TO INDIAN JURISPRUDENCEThe concept of relational contracts though not codified has been a part of the Indian Jurisprudence for a long time which is evident by the Hon’ble Supreme Court’s judgment in the case titled Union of India vs. M/s. D.N. Revri & Co. and Ors8 wherein the court observed that the meaning to a commercial contract should be gathered by adopting a common sense approach and it must not be allowed to be thwarted by a narrow, pedantic, legalistic interpretation.

This was followed by another Supreme Court judgment titled Satya Jain (Dead) Through LRs. And Ors. vs. Anis Ahmed Rushdie (Dead) Through LRs. And Ors9, wherein the court elucidated the well-established principles of classic test of business efficacy to achieve

8 AIR 1976 SC 2257

9 (2013) 8 SCC 131

the result intended by the parties acting as prudent businessmen.

Recently, the principle of implying good faith terms into a commercial contract to boost business efficacy has been recognized by the Hon’ble Supreme Court of India in the case titled Nabha Power Limited vs Punjab State Power Corporation10 in the form of Penta principles which include:

1. reasonable and equitable;

2. necessary to give business efficacy to the contract;

3. it goes without saying i.e. The Officious Bystander Test;

4. capable of clear expression; and

5. must not contradict any express term of the contract which is centralized around the business efficacy of a contract.

The court held that while employing the aforesaid principles, the exercise involved would be that of ascertaining the presumed intention of the parties. The court further held that unless it is satisfied that the implication was necessarily in the minds of both parties, the court would not imply a term which wasn’t explicitly expressed by the parties. Furthermore, while analyzing this penta-principled test, the court also held that the express terms of the contract would take precedence in the event there is a contradiction with the plausible implied terms. Interestingly, the court also gave due regard to the presumed intention of the parties whilst retaining that as a peripheral test holding that the implication of terms by courts should not be contrary to the presumed intent of the parties.

The court also stated that implied term was a concept, necessitated only when the Penta-principle test came into play upon strict necessity. This judgment reinforces the jurisprudence against implying terms into a contract unless strictly necessary.

The Hon’ble Supreme Court in the case titled Adani Power (Mundra) Ltd. vs. Gujarat Electricity Regulatory Commission and Ors.11 relied upon the principles put

10 (2018) 11 SCC 508

11 MANU/SC/0869/2019

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forth in Nabha Power Ltd12 to harmoniously interpret the terms of the contract between the parties. The court in this case relied upon the principle of business efficacy to safeguard the interest of a private contractor by ruling that the principle of business efficacy could be invoked only if by a plain literal interpretation of the term in the agreement or the contract, it was not possible to achieve the result or the consequence intended by the parties acting as prudent businessmen. It further held that if the contract made business sense without the term, the courts would not imply the same. Moreover, an unexpressed term could be implied if and only if the court found that the parties must have intended that term to form part of their contract. It must have been a term that went without saying, a term necessary to give business efficacy to the contract, a term which, although tacit, forms part of the contract.

CONCLUSIONThe dichotomy between express and implied terms of the contract seem to have been reduced by the concept of relational contract which propagates the situation that benefits both parties from its continuance, therefore, establishing the element of trust between the parties.

The concept of an implied term of good faith in a relational contract is yet to undergo judicial treatment. Nonetheless, it appears that those contractual arrangements driven by trust and reliance, such as a joint venture, might fall within the ambit of a relational contract and businesses should bear this in mind. In addition, care should be taken to ensure that any such arrangement is recorded in writing with provisions included for various outcomes.

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12 (2018) 11 SCC 508


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INADEQUACY OF REASONS IN AN AWARD VS. UNINTELLIGIBLE AWARDS: WHAT THE SUPREME COURT HELD

DIVYA KASHYAP & RAHUL PANDEY

INTRODUCTIONThe Hon’ble Supreme Court of India in Dyna Technologies Pvt. Ltd. vs. Crompton Greaves Ltd.1, had the opportunity to examine the issue of requirement of a reasoned award in arbitration proceedings and the cautionary tale for the parties and arbitrators to have a clear award, rather than to have an award which is muddled in form and implied in its content. This is because it inevitably leads to wastage of time and resources of the parties to get clarity, and in some cases, frustrate the very purpose to opt for arbitration as a dispute resolution tool. The judgment was delivered on December 18, 2019, by a three-judge bench comprising of Hon’ble Justices N.V. Ramana, Mohan M. Shantanagoudar and Ajay Rastogi, wherein the Hon’ble bench held that an arbitral award passed without adequate reasons is “unintelligible” and therefore, unsustainable. The Hon’ble court delved into the jurisprudence of Section 31 (3) of the Arbitration and Conciliation Act, 1996, (“Act”) inserted by Amending Act 3 of 2016 (w.e.f. October 23, 2015), which provides that an arbitral award shall state the reasons upon which it is based unless agreed otherwise between parties or the award is on agreed terms under Section 30 of the Act.

BRIEF FACTSIn terms of the contract executed between one DCM Shriram Aqua Foods Limited and M/s. Crompton Greaves Limited (“Respondent”) for setting up of an aquaculture unit, the Respondent invited tenders for certain works of construction of ponds, channels, drains and associated works. The Appellant M/s. Dyna Technologies Pvt. Ltd. gave its proposal, estimate and quotation which was accepted, and a letter of intent was issued to the Appellant on July 25, 1994. After certain queries and clarifications, the final work order was issued by the Respondent on November 15, 1994, setting out the terms and conditions of the work.

1 Civil Appeal No. 2153 of 2010, decided on 18.12.2019

After commencement of the work, the Respondent prematurely terminated the contract. The Appellant claimed compensation for such premature termination and the dispute was referred to the Arbitral Tribunal consisting of three arbitrators. Out of the various claims put forth by the Appellant, the Respondent’s only objection was with respect to Claim No. 2 i.e. losses due to unproductive use of machineries, which was granted by the Arbitral Tribunal for a sum of Rs. 27,78,125/- with interest @ 18% p.a. vide its award dated April 30, 1998 and consequently, a petition under Section 34 of the Act was filed by the Respondent.

The learned Single Judge of the High Court of Judicature at Madras upheld the award passed by the Arbitral Tribunal and dismissed the petition in terms of the limited grounds available for setting aside an award under Section 34 of the Act. Aggrieved by the aforesaid decision, the Respondent appealed before the Division Bench in O.S.A. No. 234 of 2001, where the Division Bench partly allowed the appeal and set aside the award relating to Claim No. 2 for payment of compensation for the losses suffered due to unproductive use of machineries. The Hon’ble High Court opined that the award did not contain sufficient reasons or basis for the right of the claimant and the basis of the liability of the Respondent and in spite of best efforts, it was not possible to discover even any latent reason in the award. The Hon’ble High Court further noted that the option of Section 34(4) of the Act was not necessary as the compensation could not have been claimed as the same was barred by the provision under the work order. Hence, the appeal in question was filed against the final order and judgment dated April 27, 2007.

ARGUMENTS ON BEHALF OF THE PARTIESThe arguments on behalf of the counsel for the Appellant included, inter alia, that the Arbitral Tribunal had looked into all the material available on record and recorded a finding with respect to Claim No. 2 after

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relying on the evidence and hence, in these circumstances, it was not open for the High Court in appeal to reappraise and substitute its own view in contravention of the terms of the contract. Such an interference made by the High Court was beyond the scope of Section 37 of the Act. Moreover, the evidence relied upon by the Arbitral Tribunal was not challenged in the appeal filed by the Respondent under Section 37 of the Act and only the liability was questioned. The submissions made by the Respondent before the Arbitral Tribunal and the learned Single Judge of the High Court were examined and confirmed, after duly examining the objections raised under Section 34 of the Act. Hence, the interference at the appellate stage was beyond the scope of Section 37 of the Act.

Per contra, the learned counsel for the Respondent argued that the claim for payment of compensation or damages on account of premature termination of contract had not been examined in light of the terms of the contract, either by the Arbitral Tribunal or the learned Single Judge and as per the express terms of the contract, no such compensation was payable. Further, it was argued that the Arbitral Tribunal exceeded its jurisdiction and committed a manifest error in directing payment of compensation without disclosing the basis for arriving at such a conclusion.

OBSERVATIONS OF THE COURTThe Hon’ble Supreme Court first delved into the basic jurisprudence behind Section 34 of the Act which limits the grounds on which an arbitral award can be challenged. The court at Para 26 of the Judgment observed that arbitral awards “should not be interfered with in a casual and cavalier manner, unless the Court comes to a conclusion that the perversity of the award goes to the root of the matter without there being a possibility of alternative interpretation which may sustain the arbitral award……. The mandate under Section 34 is to respect the finality of the arbitral award and the party autonomy to get their dispute adjudicated by an alternative forum as provided under the law. If the Courts were to interfere with the arbitral award in the usual course on factual aspects, then the commercial wisdom behind opting for alternate dispute resolution would stand frustrated.”

Thereafter, the court analyzed the mandate under Section 31 of the Act which provides that the arbitral award shall state the reasons upon which it is based. It

observed that the intention of the legislature to provide for the default rule of providing reasons should be given a rational meaning in the light of commercial wisdom inherent in the choice of arbitration.

The court further highlighted the judgment of State of Kerala Vs. Som Datt Builders2, where the Supreme Court took note of the fact that while documents and arguments pertaining to an issue in dispute had been noted by the arbitrator, reasons for their finding on the said issue were not discernible. Referring to Section 31(3) of the Act, the court noted the mandate of the arbitrator to provide reasons for the award unless both parties agreed otherwise. Such requirement was not an empty formality and it guaranteed fair and genuine consideration by the arbitral tribunal.

The court further explained that the mandate of reasoning as provided under Section 31 (3) of the Act must be intelligible and adequate, which can be inferred by the courts from a fair reading of the award and documents referred to thereunder, if need be.

The court went on to explain the three characteristics/ requirements of a reasoned order, namely, proper, intelligible and adequate. It held that if the reasoning in the order are improper, they reveal a flaw in the decision-making process. Impropriety or perversity in the reasoning of an order can be challenged under Section 34 of the Act. However, if the challenge to an award is based on the ground that the same is unintelligible, the same would be equivalent to providing no reasons at all. In addition to this, the court further observed that “concerning the challenge on adequacy of reasons, the Court while exercising jurisdiction under Section 34 has to adjudicate the validity of such an award based on the degree of particularity of reasoning required having regard to the nature of issues falling for consideration……. Even if the Court comes to a conclusion that there were gaps in the reasoning for the conclusions reached by the Tribunal, the Court needs to have regard to the documents submitted by the parties and the contentions raised before the Tribunal so that awards with inadequate reasons are not set aside in casual and cavalier manner.”

Differentiating the above with an unintelligible award, the court observed that “ordinarily unintelligible awards

2 (2009) 4 Arb LR 13 SC


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are to be set aside, subject to party autonomy to do away with the reasoned award.”

JUDGMENTThe Supreme Court held that the High Court of Madras was wrong to have brushed aside the provision of Section 34 (4) of the Act which provides for making the award enforceable after giving an opportunity to the Arbitral Tribunal to cure the curable defects, and the court erroneously proceeded further to determine the issue on merits. In the case at hand, the High Court ought to have considered remanding the matter to the Arbitral Tribunal under Section 34 (4) of the Act.

The court further held that the award was confusing and had jumbled the contentions, facts and reasoning, without appropriate distinction and despite independent application of mind based on the documents relied upon, but could not sustain the award in its existing form as there was a requirement of legal reasoning to supplement such conclusion. Hence, the aforesaid award could not be sustained as being reasoned. It further observed that “from a perusal of the award, the inadequate reasoning and basing the award on the approval of the Respondent herein cannot be stated to be appropriate considering the complexity of the issue involved herein, and accordingly the award is unintelligible and cannot be sustained.”

CONCLUSIONVide this judgement, the Supreme Court ended a dispute spanning over two decades while also recommending a cautionary approach to the courts while distinguishing between inadequacy of reasons in an award and unintelligible awards. The court directed the Respondents to pay a sum of Rs. 30, 00,000/- to the Appellant in full and final settlement against the claim within a period of eight weeks.

To conclude, the Supreme Court rightly upheld legislative intention behind the mandate provided under Section 31 of the Act. The meaning of the word “reason” was explained by the Kerala High Court in the context of reasoned award in the matter of State of Kerala Vs. K. Kurian P. Paul3.The literal meaning of “reason” is a ground or motive for a belief or a course of action. The rationale for requirement of reasons is that the reasons assure that the arbitrator has not acted

3 AIR 1992 Ker 180

capriciously. The importance of a reasoned order has been discussed and mooted in a plethora of cases. It has been held that statement of reasons solved two objects: it secured clarity of the award and thereby reduces the scope of supervisory role of courts.4 Reasons may be short but should give an intelligible indication of the arbitrator’s mind. They should have such a connection with arbitrator’s conclusion as to show that he did not act irrationally or unreasonably.5

It may be relevant to quote Russell on Arbitration, 23rd edn. (2007), wherein he notes, “If the court can deduce from the award and the materials before it, which may include extracts from evidence and the transcript of hearing, the thrust of the Tribunal’s reasoning then no irregularity will be found. Equally, the court should bear in mind that when considering awards produced by non-lawyer arbitrators, the court should look at the substance of such findings, rather than their form, and that one should approach a reading of the award in a fair, and not in an unduly literal way.

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4 Anand Bros. P. Ltd. Vs. Union of India AIR 2015 SC 125

5 Govt. of NCT of Delhi Vs. Ved Prakash Mehta (2006) 1 RAJ 168 (Del.)

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AN ANALYASIS OF SECTION 32A OF THE INSOLVENCY AND BANKRUPTCY CODE (AMENDMENT) ORDINANCE.

PUSHKRAJ DESHPANDE

The Union Cabinet of Indian Government chaired by the Prime Minister of India approved the ordinance to further amend The Insolvency and Bankruptcy Code, 2016 (herein after referred as “IBC”).

The Amendment Bill was presented before the Parliament on December 12, 2019 but was not taken up for consideration. Thereafter, the Hon’ble President was pleased to promulgate the Ordinance on December 28, 2019.

The major amendment was made by inserting the all new Section 32A. By inserting Section 32A to the IBC, the corporate debtor shall now be immune from the liability for and offence committed prior to the commencement of the corporate insolvency resolution process (herein after referred as “CIRP”). Any criminal case pending on the corporate debtor shall cease to proceed and the corporate debtor shall not be prosecuted.

ANALYSIS OF SECTION 32A OF IBC.THE IMMUNITY:-

• Section 32A will give protection to the corporate debtor from any kind of criminal liability committed prior to the commencement of the CIRP process. The criminal proceeding against the corporate debtor shall cease and corporate debtor shall not be prosecuted for such offence from the date of approval of the resolution plan by the NCLT.

• When can the corporate debtor avail such an immunity?

o When the management or control of the corporate debtor goes in the hands of any third party not related to corporate debtor.

o When there is no material with the investigation to believe that the resolution applicant was involved with

the corporate debtor in such a crime.

o If the criminal case is instituted against the corporate debtor during the CIRP, the said case shall stand discharged from the date of approval of resolution plan.

o Properties of the corporate debtor which are mentioned under the resolution plan cannot be attached, seized, retained or confiscated by any investigation authority.

• Who cannot avail the immunity under section 32A?

o Section 32A will not protect any person who was a designated partner as defined under the Limited Liability Partnership Act or any person who is in default as defined under the Companies Act, 2013 or any person who was in any manner in-charge of the corporate debtor or involved in the commission of the crime and against whom the case has been registered. The above person cannot take the defence that the corporate debtor is no longer prosecuted and is discharged from the same crime.

o The private property of above-mentioned persons can be attached, retained, seized by the investigating agency.

• However, nothing shall stop the investigating agency to seek assistance of the corporate debtor or any person who may be required by the agency to render assistance under any such law as may be applicable to such corporate debtor.


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WHAT WAS THE NEED FOR THE AMENDMENT?In the world of booming global economy, where several financial frauds also take place, the central and the state governments are trying to take stringent measures by enacting several legislatures to act as deterrent for such financial frauds in our country. However, with each such fraud taking place multiple investigating agencies are put to work. Action against the alleged corporate and its management are taken by these separate criminal investigating agencies which are governed by State and Central governments, while simultaneously the insolvency proceedings are also filed before the NCLT in addition to that of civil proceedings in civil courts and High courts.

With several proceedings filed against one corporate, it leads to multiple orders of the Tribunals, Courts and the Governments attaching the same properties by different agencies. This is when the war of the prevailing legal statutes starts. Where the state government attaches the properties under the Economic Offences wing, the central government attaches with Central Bureau of Investigation (CBI) or through Directorate of Enforcement (ED) under the PMLA, the civil court grants injunctions against the sale and purchase of the properties. In all this confusion, the real victims that suffer the most are the creditors. This is because the creditors do not get their worth even after the corporate debtor is under the CIRP process and the resolution professional has to run pillar to post by approaching each and every court or authority, as the case may be, with an application to release the properties attached, which un-necessarily increases the burden of the Resolution professional and the burden of litigation on the Court of law. With this amendment, the legislators have made it very clear that no prosecution can be perused against the corporate and hence, no property of the corporate debtor shall be attached by any criminal investigating agency.

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NATIONAL CAPITAL TERRITORY OF DELHI (RECOGNITION OF PROPERTY RIGHTS OF RESIDENTS IN UNAUTHORISED COLONIES) ACT, 2019 AND ITS IMPLICATIONS

PALASH TAING AND MOONMOON NANDA

INTRODUCTIONA significant portion of the Indian urban population resides in unauthorized colonies and slums with a substandard and inhumane quality of life. The primary example of such unauthorized colonies in India can be found in NCT of Delhi (National Capital Territory), which attracts a large number of immigrants each year who desire a better future.1 Over the years, hundreds of residential as well as industrial colonies have been built in contravention of either DDA’s Master plan of Delhi (MPD) or the zoning regulations to cater the needs of immigrant population. Until 2013, the population living in unauthorized colonies was estimated about 25% of the entire population in Delhi by the GNTD, which indicates rapid urbanization and proliferation of unauthorized colonies in Delhi.2 The census of 2011 also notably assessed the growth rate of annual population of these unauthorized colonies at 3.1%. 3 This was more than even the total growth rate of the urban population which was 2.45% in the census of 2006.4

Initially, the unauthorized colonies developed due to the low prices of the agricultural lands. However, subsequently, they became an integral part of Delhi due to easy accessibility offered by the city, which resulted in dramatic rise to the prices of these lands. As a result, the housing prices also increased which further led to overutilization in unauthorized colonies instead of optimum utilization which further caused massive degradation of the socio-economic character. The

1 Mark Jong Choi, Sohail Ahmed, ‘ The context of uncontrolled urban settlements in Delhi’ <https://www.researchgate.net/publication/235919040_The_Conte x t_of_uncontrolled _urban _settlements_in_Delhi>

2 Sahana Sheikh, Subhadra Banda, ‘Regularizing Unauthorized Colonies in Delhi’ < http://citiesofdelhi.cprindia.org/reports/regularising-unauthorised-colonies-in-delhi/>

3 Census of India, ‘Provisional population totals (district or sub-districts) NCT of Delhi’ < http://www.censusindia.gov.in/2011-prov-results/paper2-vol2/data_files/Delhi/Provisional_Rural_Urban.pdf>

4 ibid.

major reason of lack of basic infrastructure at these locations is the non-recognition of these colonies by the planning authorities. Although, the Master Plan allows certain redevelopment it cannot be executed in the absence of ownership rights of the residents of these unauthorized colonies. Therefore, the issue of unauthorized colonies became imperative and required immediate redressal. The possible solution to these issues can be conferment, recognition of ownership or mortgage or transfer of rights to the residents of unauthorized colonies.

NATIONAL CAPITAL TERRITORY OF DELHI (RECOGNITION OF PROPERTY RIGHTS OF RESIDENTS IN UNAUTHORISED COLONIES) ACT, 2019It has been decades since the fate of the unauthorized colonies pertaining to recognition and conferment of ownership rights was due in the hands of the government of NCT of Delhi. Currently, the unauthorized colonies have a system of purchase and lease of plot through general power of attorney which has the recognition of the court of law in India. However, the Supreme Court in the case of Suraj Lamp & Industries (P) Ltd v. State of Haryana,5 has held that transactions including Sale Agreement, General Power of Attorney or Wills do not constitute a transfer of rights or sale thereof. Thus, such transaction cannot be treated as complete conveyance of property which implies that the aforesaid documents will not be a proof of ownership. This legal quagmire was finally settled with the introduction of National Capital Territory of Delhi (Recognition of Property Rights of Residents in Unauthorized Colonies) Bill, 2019 (“Bill”) by the Central Government introduced in Lok Sabha on November 24, 2019. The Bill was finally approved, and it received the President’s assent on December 11, 2019. The National Capital Territory of Delhi

5 Suraj Lamp & Industries (P) ltd vs. State of Haryana AIR 2012 SC 206.


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(Recognition of Property Rights of Residents in Unauthorized Colonies) Act, 2019 (“Act”) seeks to provide recognition to the property rights of residents in unauthorized colonies by securing their right of ownership, and/or transfer or mortgage in favour of the residents of such colonies who are in possession of the property as on such date. The Act also covers a wide range of such residents possessing the property on the basis of Power of Attorney, Agreement to Sale, Will, Possession Letter or any kind of document inclusive of the evidence of payment of consideration and matter connected therewith.6 The Act also states that the payment of charges i.e., stamp duty and registration charges, to obtain ownership of the property in unauthorized colonies would be payable on the amount mentioned in the conveyance deed or authorization slip and not on any previous sale transaction related to property.7

IMPLICATION OF THE ACT ON THE RESIDENTS OF UNAUTHORIZED COLONIES IN DELHISince, the unauthorized colonies are built in contravention of the Master plan of Delhi (MPD) of the Delhi Development Authority, the socio-economic and environmental conditions of these colonies are poor in comparison with the planned colonies. The unauthorized colonies are primarily divided into two categories – (i) regularized unauthorized colonies and (ii) un-regularized unauthorized colonies. While the Regularized Unauthorized Colonies were entitled to basic infrastructure such as water supply, sewerage, roads, electricity etc., the Unauthorized Colonies, in the absence of recognition from the government stand to be illegal, and hence are deprived of basic infrastructure. This results in extensive overexploitation of the land due to overpopulation in these colonies. However, under the Act, once the colonies are regularized, such colonies will cease to be tagged as illegal and the development of basic infrastructure will be done through planned intervention of the government. The DDA prepares a new planning layout for these colonies and makes the settlements in accordance with its regulation.

In order to transfer the property in India, a conveyance deed which is a legal instrument needs to be executed

6 Section 2(a) of National Capital Territory of Delhi (Recognition of property rights of resident in unauthorized colonies) Bill 2019

7 Section 3(3) of National Capital Territory of Delhi (Recognition of property rights of resident in unauthorized colonies) Bill 2019

between the person who owns the property and the person on whom the property is being transferred including in the form of a sale or gift deed However, the registration of such deeds are mandatory under the Registration Act, 1908 but before that a clear title on such property has to be established. The common practice of conveyance is a General Power of Attorney (GPA) in these areas. A GPA doesn’t give ownership, but it gives the power to manage the affairs of the property,8 which implies that there is absence of legal status of the residents in such colonies. This puts the residents into another distress due to denial of any kind of formal loans from banks or financial institution on the basis of such properties.

Further, the regularization process confers ownership right or mortgage, transfer right to the residents of unauthorized colonies on the property in their possession. Additionally, it settles the issue related to the citizenship of residents of such colonies. With the conferment of ownership rights, the residents will also get valid empowerment of residence. These colonies had been developed in contravention of the building regulation and therefore, were susceptible to natural calamities. Regularization compels them to comply with building norms of DDA. This also helps in minimizing the damage during the time of natural calamities like earthquakes and floods. Simultaneously, the relief with respect to stamp duty and transfer charges would now be given to the residents on the conveyance of property in such unauthorized colonies. The aforesaid charges will only be payable as mentioned on the conveyance deed and authorization slip. The stamp duty would be levied at the rate of 0.5% against the stamp duty and transfer charge which is 4% in case vendee is a woman and 6% in case vendee is a man.9 The aforesaid relief has been provided under income tax through the Notification no. 96/2019 dated 11.11.2019 issued by the Ministry of finance.10

Further, the notification also provides exemption from section 56(2) (x) of Income tax Act, 196111 to the

8 Sahana Sheikh, Subhadra Banda, ‘Regularizing Unauthorized Colonies in Delhi’ < http://citiesofdelhi.cprindia.org/reports/regularising-unauthorised-colonies-in-delhi/>

9 Sanjeev Madan, ‘Income Tax Relief; regularization of unauthorized colonies’ < https://taxguru.in/income-tax/income-tax-relief-regularization-unauthorized-colonies-delhi.html>

10 Ministry of finance, Notification No. 96/2019/F. No.370142/29/2019-TPL , issued on 11 November 2019.

11 Income tax Act 1961, s 56 (2)(x).

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resident of an unauthorized colony in NCT of Delhi. This means that the residents won’t be burdened with the tax liability that occurs during transfer of property that was without consideration or when the consideration was received by the resident of the unauthorized colony in NCT of Delhi was less than the stamp duty, and where the central government through notification in the official gazette regularizes the transaction on the basis of latest Power of Attorney (PoA), Agreement to Sale, Will, Possession letter and other documents including documents evidencing payment of consideration for conferring or recognizing the right of ownership or transfer or mortgage of such immovable property. This has certainly come as a relief for the residents as they don’t have to pay hefty taxes on such conveyance of the property in the unauthorized colonies going forward.

CONCLUSIONTherefore, the regularization through the Act will have a positive impact on the residents of unauthorized colonies. There are still certain plausible challenges in the implementation of the Act. As per the officials of DDA, there is a possibility of multiple claims being there on the same property once the registration process starts. Further, there is also an uncertainty regarding the verification of the ownership document in such a short time span by the DDA authority. Furthermore, there is no clarity as to how the houses which have been constructed in contravention of structural safety be dealt with. This bill will solve large number of issues standing between the rights of these residents and development of our national capital.

***


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OFFENCE COMMITTED UNDER MOTOR VEHICLES ACT, 1988 CAN ALSO BE PROSECUTED UNDER INDIAN PENAL CODE, 1860: AN ANALYSIS

JUHI CHANDEL

An offence committed under the Motor Vehicles Act, 1988 (herein after referred as “The MV Act”) also creates criminal liability i.e. motor vehicles accidents, drinking and driving, reckless driving and driving at excessive speed etc. Such circumstances, on a rise in current times, result in increase in accidental deaths, injuries to life, limbs and property.

The MV Act, though exclusively deals with the offences relating to motor vehicles, is silent on rash and negligent driving resulting in death or hurt or grievous hurt to another person nor does it prescribe any separate punishment for the same; whereas IPC (herein after referred as “Indian Penal Code, 1860”) has been specifically framed to deal with such criminal offences.In The State of Arunachal Pradesh vs Ramchandra Rabidas @ Ratan Rabidas & Anr1, the Supreme Court held that there is no bar under the MV Act or otherwise, to try and prosecute offences under the IPC for an offence relating to motor vehicle accidents.

ISSUEThe issue raised in the above mentioned matter was whether Guwahati High Court was justified in stating that the road traffic offences shall be dealt with only under the provisions of the Motor Vehicles Act, 1988 (“M.V. Act”), and in holding that, in cases of road traffic or motor vehicle offences, prosecution under the provisions of Indian Penal Code, 1860 (“IPC”) is without sanction of law, and recourse to the provisions of the IPC would be unsustainable in law?

HELDa. That MV Act is not clear on how to punish the

offender in case of offences committed under section 183 and 184 of M.V. Act.

183. Driving at excessive speed, etc.

i. Whoever drives a motor vehicle in contravention of the speed limits referred to

1 AIR2019SC4954

in section 112 shall be punishable with fine which may extend to four hundred rupees, or, if having been previously convicted of an offence under this sub-section is again convicted of an offence under this sub-section, with fine which may extend to one thousand rupees.

ii. Whoever causes any person who is employed by him or is subject to his control in driving to drive a motor vehicle in contravention of the speed limits referred to in section 112 shall be punishable with fine which may extend to three hundred rupees, or, if having been previously convicted of an offence under this sub-section, is again convicted of an offence under this sub-section, with fine which may extend to five hundred rupees.

iii. No person shall be convicted of an offence punishable under sub-section (1) solely on the evidence of one witness to the effect that in the opinion of the witness such person was driving at a speed which was unlawful, unless that opinion is shown to be based on an estimate obtained by the use of some mechanical device.

iv. The publication of a time table under which or the giving of any direction that any journey or part of a journey is to be completed within a specified time shall, if in the opinion of the Court it is not practicable in the circumstances of the case for that journey or part of a journey to be completed in the specified time without contravening the speed limits referred to in section 112 be prima facie evidence that the person who published the time table or gave the direction has committed an offence punishable under sub-section (2).

184. Driving dangerously.

Whoever drives a motor vehicle at a speed or

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in a manner which is dangerous to the public, having regard to all the circumstances of the case including the nature, condition and use of the place where the vehicle is driven and the amount of traffic which actually is at the time or which might reasonably be expected to be in the place, shall be punishable for the first offence with imprisonment for a term which may extend to six months or with fine which may extend to one thousand rupees, and for any second or subsequent offence if committed within three years of the commission of a previous similar offence with imprisonment for a term which may extend to two years, or with fine which may extend to two thousand rupees, or with both.

b. It was held that the M.V. Act and IPC both operate in entirely different spheres. There is no harm is prosecuting an offender under IPC if the offence is committed under M.V. Act. The objective of both the acts is to punish the wrongdoer. The offender can be prosecuted and punished independently under both statutes.

c. Furthermore, there is no provision under the M.V. Act which separately deals with offences causing death, or grievous hurt, or hurt by a motor vehicle in cases of motor vehicle accidents. It was also taken into consideration that where Chapter XIII of the M.V. Act is silent about the act of rash and negligent driving resulting in death, or hurt, or grievous hurt to persons nor does it prescribe any separate punishment for the same; Sections 279, 304 Part II, 304A, 337 and 338 of the IPC have been specifically framed to deal with such offences.

d. Section 26 of General Clauses Act, 1897 states if an act or omission is constituted under two or more statutes then offender shall be prosecuted and punished under either or any of those enactments but shall not be liable to be punished twice for the same offence. Similarly, the Supreme Court held that there is no bar to a trial or conviction of an offender under two different enactments, but the bar is only to the punishment of the offender twice for the same offence2.

e. Offences under Chapter XIII of the MV Act, cannot abrogate the applicability of the provisions

2 State of Maharashtra v. Sayyed Hassan, Criminal Appeal No. 1195-1207 of 2018

under Sections 297, 304, 304A, 337 and 338 of the IPC. The maxim of “generalia specialibus non-derogant” is inapplicable and could not have been invoked. The offences prescribed under the IPC are independent of the offences prescribed under the M.V. Act. It cannot be said that prosecution of road traffic/motor vehicle offenders under the IPC would offend Section 5 of the IPC, as held by the High Court, in so far as punishment for offences under the M.V. Act is concerned.

f. The maximum imprisonment for the first-time offence under MV Act is up to six months whereas under IPC it can go up to 10 years under Part II of the IPC. Therefore, the objective is that the sentence imposed by the court should have a deterring effect on wrongdoers3.

CONCLUSIONHence, it is a settled position of law that a person committing an offence under MV Act can also be prosecuted under IPC. MV Act is a complete code in itself in so far as motor vehicles are concerned. There is no bar under the MV Act or otherwise, to try and prosecute offences under the IPC for an offence relating to motor vehicle accidents. This is for the sole reason that the punishment given under the IPC is deterrent in comparison to the punishment prescribed under MV Act.

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3 State of Karnataka v. Sharanappa Basanagouda Aregoudar (2002) 3 SCC 738


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MISUSE OF SEDITION LAW IN INDIAPALASH TAING AND DEEPIKA K (INTERN)

INTRODUCTIONThe disturbing pattern of charging people under sedition law has eventually led to a widespread debate over the justifiability of such power exercised by the government through the police. In order to delve into the genesis of the debate, we need to understand what act constitutes sedition under Section 124 A of the Indian Penal Code, 1860 (IPC). ‘Sedition’ under Section 124A of the IPC is defined as illegal acts or speech which incite anybody to form anti-national views against the Government that is probable to disrupt the public peace or harmony of the state.1 The origin of sedition law lies in the pre-independence era, where the law drafted by Lord Macaulay in 1870 was particularly a tool used by the British to oppress the freedom movement and suppress all forms of dissent by Indians against the British regime. Even, the stalwarts of the Indian freedom struggle like Mahatma Gandhi and Bal Gangadhar Tilak were victims of this oppressive law.

It is ironical that in the contemporary times the same draconian law has become a tool for the orchestrated witch hunt against its own people who dissent, while UK the country that introduced the law in India repealed the sedition law on the ground that it is in violation of freedom of speech in their own country.2 In our opinion the extension of law enacted by the colonial autocratic regime to the post-independence democratically elected government has no relevance. However, time and again, there have been instances where people have been booked under the sedition law merely for having dissented. The recent event being that of ‘Pathalgadi Movement’ (Jharkhand) and the People’s movement against nuclear power plant in Kundankulum (Tamil Nadu).

BACKGROUNDThe case of sedition in the Kunti district dates back to Pathalgadi Movement in 2016. The movement was

1 Section 124A, Indian Penal Code 1860.

2 Arpitha Desai, ‘India’s Sedition Law is a dangerous hangover from British Colonialism’ < https://www.indexoncensorship.org/2019/03/india-sedition-hangover-british-colonialism/>

resentment against the government over the corporate takeover of residents’ land. As a form of protest, the people against the government started carving the provision of fifth schedule enshrined under the Indian Constitution which grants tribals autonomy over their land. However, to curb the tribal movement, cases of sedition have been filed against people who are associated with the movement or sympathetic towards the movement. More than 10,000 people in the Kunti district of Jharkhand were charge sheeted by the police under the sedition law.3 Further, the First Information Reports (FIR) against the protesting tribals were filed alleging that the police were attacked with the traditional weapons. Moreover, it also states that the leaders of the movement have been misleading innocent people in the garb of scheduled area, which resulted in detention for several months in jail.4

Similarly, a movement brewed in the Kundankulum village of Tamil Nadu in relation to installation of nuclear power plant. Though, the construction of the nuclear power plant started in the year 2000, it was only in 2011 that a protest grew in this regard after Japan’s Fukushima nuclear plant disaster occurred in the same year.5 The chief concern of the anti-nuclear protesters was that it would be impossible to evacuate the entire locality around the plant during any nuclear emergency; therefore the establishment of the plant must be stopped. Conversely, the government ordered the police to detain the protesters and register FIRs under various sections of IPC in order to avoid law and order crisis. Consequently, the entire village was charged under sedition for peacefully protesting against the same.6 Activists of the movements were

3 Virginius Xaxa, ‘Is pathalgadi movement in tribal areas- anti constitutional’ <ht tps: //w w w.e pw. in/ j o urnal/2019/1/alternative -stand p o int /pathalgadi-movement-tribal-areas-anti.html>

4 ibid.

5 P. Sudhakar, S. Vijay Kumar, ‘Kundalkulum; 11 protestor held on Sedition charge’ < https://www.thehindu.com/news/national/tamil-nadu/kudankulam-11-protesters-held-on-sedition-charges/article3013635.ece>

6 Arun Janardhan, ‘8,856 enemies of the state: The entire village lives under the shadow of sedition’ < https://indianexpress.com/article/india/india-news-india/kudankulam-nuclear-plant-protest-sedition-supreme-court-of-india-section-124a-3024655/>

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threatened by the police of booking them with sedition charges under section 124A of IPC, the law criminalizing the people for waging war against the Government of India and promoting enmity between different groups for sensitizing the locals of the health danger due to radiation from nuclear plant. They have also been labelled as ‘terrorist’ by the Tamil Nadu government. The movement was tagged as anti-national by the state administration as well as the regional media. However, the realty is somewhat different than it appears.7 The incidences show that government has taken the weapon of sedition in order to halt the protest against any government action in form of policies.

MISUSE OF THE LAWThe ambiguous and unclear wording of the sedition provision gives ample window for abuse. The definition of sedition is disaffection against the government or bringing it into hatred or contempt. It is amply clear from the definition that there is un-demarcated boundary to the scope of sedition law, and hence it can easily be manipulated. When the sedition law was first challenged in Kedarnath vs State of Bihar8, the Supreme Court held that only the ‘act’ which has the tendency to disrupt the public order will fall under the scope of the Section 124A of the IPC. Nevertheless, the dictum laid down in the case of Kedarnath vs. State of Bihar seems to have no impact on the abuse of sedition law. To start with, the tendency to disrupt the public order is vague as the text of the original section. Second, as long as the provision continues to operate in the exact form, the police could and did continue to invoke it to suppress protest and dissent, and trial court could and did refuse to bail the jailed people.

The draconian nature of sedition laws is being used extensively to curtail the right to freedom of speech and expression in India enshrined under Article 19 (1) (a) of the Constitution of India, on the basis of reasonable restriction under Article 19 (2).9 The report of National Crime Record Bureau in 2017 estimated about 30% rise in the offenses against State.10 However, conviction under the sedition law is low, yet the process

7 Livemint, ‘opinion; A seditious town?’ < https://www.livemint.com/>

8 Kedarnath Singh vs State of Bihar, AIR 1962 SC 955.

9 Constitution of India 1950, Article 19 (2)

10 Vijiata Singh, ‘30% jump in the crime against state; NCRB’ < https://www.thehindu.com/news/national/30-jump-in-crimes-against-state-ncrb/article29771116.ece>

is worse than conviction as the imprisonment and trial of the accused are long and gruesome. The people booked under sedition in Kunti district of Jharkhand, primarily belonged to the indigenous community, who were unacquainted with law under which they were charged. The sedition law on several occasions has been moulded by the government according to their whim and fancies in order to suppress any kind of criticism against them. Similarly, the people in Jharkhand and Kundalkulum were charged merely to suppress the movement, even the people who supported the movement through Facebook posts were not spared in the Pathalgadi Movement.11 This particular incident exemplifies the persistent imbalance of power between the State and individual, even after decades of independence. The State has retained certain legal as well as extra-legal weapon such as Sedition Laws which it can any time turn against its own people with minimal scrutiny or accountability. Having said that, what remains to be construed is why these people should be charged with one of the severest provision? Opposing legal amendment does not amount to trying to overthrow the government from power.

The misuse of sedition law is not specific to the government of one political party in India. Since independence, the government has accused writers, activists and cartoonists of sedition for any criticism by them, legitimate or illegitimate. There have been numerous attempts made in order to determine sedition; such recent attempt was by the Law Commission of India where dissent was observed as an essential part of the democracy. Therefore, the law enforcement agencies must use the law judiciously. Both the movements were neither a Naxalite nor a Maoist movement. The movement was completely non-violent struggle which arose out of fear and paranoia of being displaced due to the corporate takeover of land in Jharkhand and possible nuclear disaster in Kundalkulum. To charge people who participated in the movement for waging war against the state is totally against the principle of democracy in the country.

11 EPW, ‘Jal, Jangal aur Jameen: The pathalgadi movement and Adivasi right’ < https://www.epw.in/engage/article/pathalgadi-movement-nation-autonomy-rights-adivasi-jharkhand>


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CONCLUSION These current events in the district of Kunti and Kundankulam evidence the rifts in the legal system as well as its implementation agencies. For such gap, every wing of the society equally owes a responsibility of failure, starting from the parliament, for allowing the provision to remain and operate in the statute books, to the Hon’ble Supreme Court of India for not striking down the archaic law when they had ample of opportunity to do so, to the state police that have found in it a ready tool of oppression and to the lower courts that enable prolonged incarceration of people under the aforesaid provision. The sedition law, therefore, has become a tool of harassment by the ruling government, rather than a safeguard against the disloyalty by the citizens. Basically, it has been a tool of oppression against the dissenting voices and as the law still persists, we continue to be one of the few countries in the world to have such an archaic law.

***

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TRANSITION OF JAMMU AND KASHMIR - FROM A LAND TO A PRINCELY STATE TO A STATE TO A UNION TERRITORYA LEGAL PERSPECTIVE

PUSHKRAJ S DESHPANDE

HISTORY OF THE STATE OF J&K

ANCIENT HISTORYKashmir is believed to be named after the great sage Kashyap i.e. Kashpay-mir which means lake of Kashyap, hence, the name we know today i.e. Kashmir. The legend says that Kashyap rishi drained the lake that covered the valley of Kashmir thereby creating a place to stay for him and his people. Jammu is believed to be named after a King Jambu Lochan.

In the year 1339 Shah Mir believed to be a Turkish-Persian, invaded Kashmir and established Shah Dynasty which lasted till 1561.

In the year 1586, the Mughal empire overthrew the Sultan Dynasty and Kashmir was believed to be under the Mughals till 1751, when the Durranis of Afghan took over. Soon enough, the Kashmir Valley was taken over by the Sikhs under the able rule of Maharaja Ranjit Singh in the year 1819 and this was the beginning of Kashmir as we know it today. Ranjit Singh installed Gulab Singh, a Dogra from Jammu as the Head of the State of J&K to rule in his place granting him complete autonomy.

With death of Maharaja Ranjit Singh, Gulab Singh consolidated his position in the Kashmir by striking a deal with East India Company in 1846.

1846 TO 1947: THE PRINCELY STATE OF J&KJ&K, a princely state under the British Empire was ruled by the Kings of Dogra Dynasty. It was formed from the present-day Jammu, Kashmir valley (Ghati), Ladak and Gilgit-Baltistah (presently occupied by Pakistan and administered by Pakistan also known as the POK). These were the parts of Sikh empire which was ruled over by Maharaja Ranjit Singh. After the first anglo-sikh war between 1845 and 1846 when the Sikh empire lost to East India Company, the treaty of Amritsar was executed on 16th March, 1846, between the Company

and Raja Gulab Singh (Founder of Dogra Dynasty in Kashmir) by which aforesaid parts of present day J&K were axed by the East India company from the Sikh empire and transferred to Raja Gulab Singh on payment of 75 Lakhs of NSR (Nanak Shahi Rupees). This treaty marked the beginning of the rule of Dogra Dynasty on Jammu and Kashmir.

END OF PRINCELY STATEIn August 1947, the British monarch gave up their rule of India. The Independence of India Act, 1947, divided the country of India into two separate countries namely the Domino of India and Domino of Pakistan. The existing 565 princely states were advised to join either of the two dominions or remain independent. As the princely states were not ruled by the British and there was mere suzerainty over these princely states, it was supposed to be simply terminated after 15th August 1947. An Instrument of Accession was proposed by the then viceroy Lord Mountbatten. The Congress leaders agreed to the said Instrument of Accession with the condition that Lord Mountbatten ensures majority of the princely states shall become part of Indian Domino.Kashmir was then ruled by Maharaja Hari Singh who wanted his state to remain independent, joining neither India nor Pakistan but maintain friendly relations with both. Maharaja offered to sign Stand Still agreement with both the countries which stated that all the rights and administrative powers would continue the same way as it did during the British rule. Pakistan accepted the said offer whereas India sought for further discussions. This agreement never came to be executed by either country. There was a war declared to invade Srinagar, which was the capital of Kashmir. Maharaja who was not well equipped to handle such an attack turned up to Indian Army for help. India agreed to airdrop the troops in Kashmir on 3 conditions a) Maharaja shall accede to India. b) New constitution of J&K shall be framed. c) He shall make Sheikh Abdulla the Prime Minister of J&K. The Maharaja accepted the conditions and Instrument of Accession was signed in favour of India on 26th October 1947.


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INSTRUMENT OF ACCESSION1

The Instrument of Accession is a legal document executed by Maharaja Hari Singh of Jammu and Kashmir, on October 26, 1947. By executing this document under the provisions of the Indian Independence Act 1947, Maharaja Hari Singh agreed to accede to the Dominion of India.

On reading clause 3 it can be understood that only the matters specified in the schedule can be legislated by India; said matters include:

a. Defence - Army, Navy and Air force and other armed forces of India, matters related to arms, firearms and ammunitions and explosives.

b. Matters relating of external affairs

c. Matters relating to communication.

d. Other ancillary matters.2

Furthermore, Clause 6 states that Indian cannot make any laws authorizing the acquisition of land from Kashmir. If it has to be done, it could be done only with request.

Further Clause 7 states that this state shall not be compelled to accept the Constitution of India in future (as the constitution did not come into force then). It further stated that the State of J&K shall draft and follow its own constitution. (Article 370 of Constitution of India was to protect these clauses)

1948 WAR BETWEEN INDIA AND PAKISTANUN intervened for considering the Kashmir problem. India and Pakistan made presentations to the UN Security council. Vide Resolution 393 the UN set up a 3-member committee to resolve the Kashmir dispute, however, the commission did not come into force till May 1948. By January 1949, a cease fire between Indian and Pakistan forces left India with the control of Kashmir valley, Jammu, Ladak, while Pakistan gained control over western regions including Azad Kashmir, Gilgit and Baltistan. UN tried to resolve the dispute but due to heavy differences in understanding by both the

1 http://jklaw.nic.in/instrument_of_accession_of_jammu_and_kashmir_state.pdf

2 http://jklaw.nic.in/instrument_of_accession_of_jammu_and_kashmir_state.pdf

3 https://unmogip.unmissions.org/security-council-resolution-39-1948

countries the efforts failed. In April 1949, Azad Kashmir signed the Karachi Agreement with Pakistan which handed over the control of Azad Kashmir over defence and external affairs to Pakistan. Following the disputes, the Indian Constitution adopted Article 370, ensuring special status to Jammu and Kashmir with Indian jurisdiction only in the 3 areas as agreed in Instrument of Accession.

A STEP-BY-STEP ANALYSIS OF ARTICLE 3704 OF THE CONSTITUTION

1. Article 370(1) sub clause (b) empowers the Parliament of India to make only those laws for the sate which are limited to the schedule of the Instrument of Accessions as discussed in the foregoing paragraphs and any other laws only with concurrence of the Government of State (for the purpose of this article the Government of State means the Maharaja).

2. Clause (2) of Article 370 further states that if concurrence has been given to any law to be passed then such a law shall be placed before the Constituent assembly (of the state of Jammu and Kashmir) for decision.

3. Sub clause 3 states that notwithstanding anything we have discussed in point 1 and 2, the President of India is empowered to declare Article 370 cease to be operative and it can be declared by a Public Notification with any exceptions and modifications. But there was a proviso added at the end as to when such a notification can be operative, the proviso states that it will be necessary for the President that the recommendation of the Constituent Assembly of the state shall be taken before issuing such a notification.

Article 370 gave the special status to the state of J&K. It exempted the State from the applicability of the Constitution of India. The State was allowed to have its own Constitution. Central legislative powers over the State were limited, at the time of framing, to the three subjects of defence, foreign affairs and communications as mentioned in the Instrument of Accession. Other constitutional powers of the Central Government could be extended to the State only with the concurrence of

4 https://w w w.legalcr ystal.com/act /38338/constitution- of-india-article-370

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the State Government, which had to be ratified by the State’s Constituent Assembly. The State Government’s authority to give ‘concurrence’ lasted only until the State Constituent Assembly was convened. Once the State Constituent Assembly finalized the scheme of powers and dispersed, no further extension of powers was possible. The Article 370 could be abrogated or amended only upon the recommendation of the State’s Constituent Assembly.

PRESIDENTIAL ORDERSIn exercise of the powers conferred by clause (1) of article 370 of the Constitution, the President, with the concurrence of the Government of the State of Jammu and Kashmir can make any orders through public notification. The President of India till date made a series of orders.

ORDER OF 1950The first order came into force on 26th January 1950 along with the Constitution of India. It stated the list of subjects on which the Indian Parliament can make laws that will be extended to the Sate of J&K.

ORDER OF 1952This order was issued on demand of the Government of J&K. Vide this order there was an amendment to the Article 370, replacing the phrase “recognized by the President as the Maharaja of Jammu and Kashmir” with “recognized by the President on the recommendation of the Legislative Assembly of the State as the Sadr-i-Riyasat”. The amendment represented the abolition of the monarchy of Jammu and Kashmir.

ORDER OF 19545

It was this order which amended the Constitution of India and added the controversial Article 35A in the Constitution of India. Article 35A empowered the state legislature to legislate on the privileges of permanent residents with regard to immovable property, settlement in the state and employment. The jurisdiction of Supreme Court was also extended to state of J&K. The central government was given powers to declare National Emergency in event of external aggression; J&K custom duties were abolished.

OTHER PRESIDENTIAL ORDERSA total of 47 orders were issued between 1956 to 1994.

5 http://jklaw.nic.in/constitution_jk.pdf

PRESIDENTIAL ORDER OF 2019 6

On August 05, 2019, the Government of India revoked the Temporary Special Status granted under Article 370 of the Constitution of India. This was followed by the presidential order dated August 06 2019, wherein the Hon’ble President of India revoked the special status. The amendment to Article 370 read as under:

“Article 370- All provisions of this Constitution, as amended from time to time, without any modifications or exceptions, shall apply to the State of Jammu and Kashmir notwithstanding anything contrary contained in article 152 or article 308 or any other article of this Constitution or any other provision of the Constitution of Jammu and Kashmir or any law, document, judgement, ordinance, order, by-law, rule, regulation, notification, custom or usage having the force of law in the territory of India, or any other instrument, treaty or agreement as envisaged under article 363 or otherwise.”

We have already discussed Article 370 above, before it was amendment by the presidential order 273. The old Article 370 gave powers to the Hon’ble President of India to revoke the special status after discussion with the Constituent Assembly. However, during this period the State of J&K was under the rule of the Governor as State Legislative Assembly was suspended and the Constituent Assembly ceased to exist. With the bare reading of all the orders and the Amendment bill, it is clear that the President was well within the powers conferred to him by the Constitution of India to revoke the Special Status from the State of J&K.

With The Jammu and Kashmir Reorganization Act 20197 the erstwhile state Jammu and Kashmir is now divided into the Union territories of Kashmir and Ladak which came into force from October 31, 2019. The western part of old J& K now consists of Union Territory of J&K and the eastern part now consist of the Union territory of Ladak. The High Court of J&K has jurisdiction over both the Union territories.

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6 http://egazette.nic.in/WriteReadData/2019/210049.pdf

7 http://egazette.nic.in/WriteReadData/2019/210407.pdf


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TOLL-OPERATE-TRANSFER MODEL AND ITS SUBSEQUENT AMENDMENT IN 2019: A WAY FORWARD

SOUMYA JHA

In order to make the operational national highways economically beneficial for both the National Highway Authority of India (NHAI) and the private contractors, the Cabinet Committee on Economic Affairs (CCEA) on August 03, 2016, authorised NHAI to monetise public funded National Highway (NH) projects and approved the Toll Operate and Transfer (TOT) model1.

The objective behind introduction of this scheme was monetizing National Highways by facilitating efficient toll realization through private sector partnership. The Government further intends to optimally utilize such corpus generated to meet its fund requirements regarding future development and O&M of highways in the country. This scheme also aims at creating new business opportunities for (i) A new vertical of developers who specialize in O&M of highways, and (ii) Category of investors (Institutional Investors including Pension & Insurance Funds, Sovereign Funds, etc.) which is averse to taking construction risks but is adequately equipped for making long term investments in road infrastructure.

IMPLEMENTATION STRATEGY AND TARGETSThe TOT model aims at monetizing public funded NH projects, such as EPC/BOT (Annuity) projects, which are operational and have a proven toll collection history of at least two years. Furthermore, the approved TOT model provides for a fixed 30-year concession period. Additionally, the Government hopes that the TOT model would permit NHAI to achieve the following:

1. Ensure efficient management of constructed and operational NH projects through proper Operation and Maintenance (O&M).

2. Arrange for additional funds which are re-quired for achievement of targets under Bharatmala Programme and other NH devel-

1 https://pib.gov.in/newsite/PrintRelease.aspx?relid=148306, accessed on 31st December 2019

opment works2.

KEY FEATURES OF TOT MODEL y The period of concession is a fixed period of 30

years from ‘Appointed Date’. However, this period may be varied (i.e. increased or decreased) depending on certain situations that may arise as the project commences.

y Upon grant of concession of the project, concessionaire shall be required to pay lump sum upfront concession fee to Authority, prior to ‘Appointed Date’. Further, escrow account is required only if concessionaire obtains loans/ advances from Banks/ FIs.

y With the expectation of increased foreign investment/ involvement of foreign players in TOT projects, the Government has introduced requirement of prior approval from requisite authority (from national security and public interest perspective), in all cases of acquisitions (including transfer of ownership or control) of not less than 25% of the total equity of concessionaire; or acquisition of any control of the board of concessionaire.

y TOT model also provides flexibility to concessionaire to upgrade to ‘intelligent tolling system’ or equivalent mechanism, upon the same being introduced in future, coupled with the benefit of settlement of revenue collection with Authority in case of substantial variations. NHAI proposes to adopt a tolling system, which will work on a combination of mobile telecommunications technology (GSM) and satellite-based GPS and would be able to deduct money from a vehicle account, credit to concessionaire within one day and open toll gate. In case of a failed transaction it would be able to alert toll operator to collect payment manually and not open the gate.

2 https://pib.nic.in/PressReleasePage.aspx?PRID=1592541, accessed on 3rd January, 2020

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BUNDLES OF PROJECTS UNDER TOT MODELThe projects under this model have been awarded as a bundle of operational national highways, which allows the investor to offset the risks of one project against another. Since existing and operational roads have been auctioned under the TOT model, it does not need developers with construction skills to participate.

1. Bundle 1: In March 2018, Macquarie Group, the Sydney-based infrastructure asset management company, won the maiden bundle of nine highway projects in the States of Andhra Pradesh and Gujarat under the first tranche of a monetisation drive pursuant to the TOT model. As against the base bid price of Rs. 6258 crores set by NHAI, the bid was won by Macquarie Group for an amount of Rs. 9681 crores making it one of the largest foreign direct investments in public infrastructure in India. The concession agreements with NHAI for attaining rights of toll collection on such highways, each for a concession period of 30 years, were executed on April 26, 2018 by the special purpose vehicles (SPVs) floated by the Macquarie Group3.

2. Bundle 2: Second bundle comprising of eight NH stretches on TOT model was annulled by NHAI.

3. Bundle 3: Singapore-based Cube Highways emerged as the winning bidder for the government’s third round of road monetisation programme, quoting a price bid of Rs 5,011 crore4. This third bundle comprises of following projects - Jhansi-Lalitpur (package-1: section of NH 25 & 26) and (package-2: section of NH 26), Lucknow-Raibareli (section of NH 24B) in Uttar Pradesh; Kotwa- Muzaffarpur (section of NH 28) in Bihar; Hazaribagh-Ranchi (including Ramgarh bypass section of NH 33) in Jharkhand; and three stretches on Madurai to Kanyakumari (section of NH 7) in Tamil Nadu.

3 https://economictimes.indiatimes.com/news/economy/infrastructure/macquarie-wins-maiden-bundle-of-road-projects-under-tot-for-rs-9682-crore/articleshow/63116601.cms, accessed on 31st December, 2019

4 https://economictimes.indiatimes.com/news/economy/infrastructure/c u b e - h i g h w a y s - w i n s - t o t - p r o j e c t - w i t h - r s - 5 0 11 - c r - b i d /articleshow/72152364.cms?from=mdr, accessed on 3rd January, 2020

KEY HIGHLIGHTS OF THE AMENDMENT TO TOT MODELThe CCEA, on November 20, 20195 gave its approval to the proposed amendment to the TOT model of the NHAI. After the successful roll out of the TOT model in 2016, CCEA’s recent decision appears to be with a view to increase more participation of institutional investors in national highways sector for raising funds for NHAI.

• Earlier, projects could be monetized if they were operational and had been generating toll revenues for at least two years after the commercial operations date. This threshold has been reduced to one year.

• Amongst other changes, NHAI is also given the authority to determine the concession period of the projects between 15 to 30 years as opposed to previous fixed concession period of 30 years under the 2016 TOT Model.

• The monetisation of the highway using the TOT model will be subject to approval of competent authority in the Ministry of Road Transport and Highways or NHAI on a case-to-case basis.

• NHAI has identified around 75 operational projects bundled into 10 separate bids for potential monetisation.

• The fund raised from the proceeds of monetization will be utilized by the government to meet its fund requirements and for future development of highways in the country including O&M of national highways.

CONCLUSIONWith Roads and Highway projects being top priority areas in infrastructure development and the Union Government aggressively promoting the TOT model, NHAI’s decision to tap funds through innovative methods might bring ample opportunities for private sector developers, funds, banks and lending institutions to participate in the TOT model.

***

5 https://pib.nic.in/PressReleasePage.aspx?PRID=1592541, accessed on 3rd January, 2020


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LEGALITY OF EMPLOYMENT BONDS IN INDIA: AN OUTLOOKPALLAVI ANAND

BACKGROUNDTo gain competitive advantage in the market, corporations today make huge investments in imparting proper training to its employees. It gives an opportunity to employees to acquire valuable skills and increase their technical know-how. Employers incur significant loss when these trained employees leave the organization and incur a recurring cost in terms of recruiting a replacement and training of the new employee. To preserve their interests and to recover their costs, corporations rely on employment bonds. An employment bond is simply an agreement between the employer and its future/ prospective employees to serve the organization for a definite minimum period stipulated in the bond. If the employee fails to serve the stipulated period, the employer is entitled to compensation for such breach.

Negative Covenants vis-à-vis Section 27 of Contract Act, 1872

RESTRAINT DURING THE EMPLOYMENTThe validity of employment bonds may be challenged under Section 27 of the Indian Contract act, 1872. It states that any agreement in restraint of any lawful profession, trade or business, is void. Generally, an agreement containing negative covenant preventing the employee from working elsewhere during the term covered by the agreement, is not void under Section 27of the Contract Act, as such stipulation is never a restraint of trade during the continuance of a contract of employment. It becomes one only when the contract comes to an end.1In Niranjan Shankar Golikari v. Century Spinning and Manufacturing Co. Ltd.2, negative covenant can be enforced to the extent that the unexpired part of the term service would be essential for the fulfilment of the contract.

1 Superintendence Company of India Pvt. Ltd. v. Krishana Murgai, AIR 1980 SC 1717

2 AIR 1967 SC 1098

RESTRAINT BEYOND THE EMPLOYMENTEmployment bonds imposing post-termination obligations are void if they impose unconscionable or excessively harsh, unreasonable, or one-sided. In Pepsi Foods Ltd. v. Bharat Coca Cola Holdings (P) Ltd3., the Delhi High Court held that a negative covenant that restrained employees from undertaking employment for 12 months after leaving the complaining party are void as per Section 27.

RESTRAINTS WHEN SPECIALIZED TRAINING PROVIDED However, in case the employer has provided specialized training to the employees, the restrictive covenant will be valid if the organization has incurred costs on personnel training or skills enhancement of the employee. The defaulting party shall have to pay compensation if he prematurely terminates the employment. In Toshnial Brothers Pvt. Ltd. v. E. Eswarprasad4, the employee was engaged for a period of three years as stipulated in the contract, but he terminated his employment after fourteen months. The Madras High Court held that employer did not have to prove damages suffered by them as there existed an explicit employment bond clause. The employer or the management has to show either incurred expenditure or any financial commitment in order to give special training to the employee. Otherwise, actual injury accruing as a result of the breach would have to be proved.

REASONABILITY OF RESTRICTIVE COVENANTSA restrictive covenant to be valid should be such that it is not greater than what is necessary to protect the interest of the other party.5 The reasonability of a particular covenant in an agreement depends upon the nature of the agreement, the service to be rendered, place of employment and availability of the service of

3 1999 (50) DRJ 656

4 1997 LLR 500

5 Superintendence Company of India Pvt. Ltd. v. Krishana Murgai, AIR 1980 SC 1717

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the same nature.6 A covenant protecting the employer against the betrayal of trade secrets or confidential information is not void.7The conditions of employment bond must be reasonable especially regarding the duration of employment and compensation payable by the employee in case he prematurely terminates the employment. An employment bond that imposes an excessive time period of mandatory employment will amount to forced labour and invoke the safeguards under Article 23 of the Constitution. The damages prescribed in the contract for termination of employment would not guarantee that the court shall grant whole of the damages prescribed. The court will consider the actual loss suffered by the employer.8

CONCLUSION Employment bonds serve as a deterrent to prematurely terminate a contract. They are considered reasonable as it is necessary to protect the interest of the employer. However, they can be scrutinized if found to be unreasonable and one-sided. It must give the employee the freedom to seek employment wherever he chooses and the opportunity to advance further in the industry in which he is most productive.

***

6 Sunilchand C Mazumdar v. Aryodaya Spinning & Weaving Mills OC. Ltd., AIR 1964 Guj 115

7 Gopal Paper Mills Ltd. v. Surendra Kumar Ganesh Das Malhotra, AIR 1962 Cal 61.

8 Sicpa India Limited vs Shri Manas Pratim Deb, RFA No.596/2002


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ARBITRABILITY OF IPR DISPUTES IN INDIA: RIGHT IN PERSONAM VS. RIGHT IN REM

RISHAB KHARE

Time and again the courts have held that tribunals are not covered under the ambit of Judicial Authority.1 On this premise, it shall be imperative to highlight the statutory authority pertaining to the reference to arbitration under the scheme of Arbitration & Conciliation Act, 1996 (hereinafter referred as “the Act”). The relevant statutory authority is reproduced below:

“8. Power to refer parties to arbitration where there is an arbitration agreement.—[(1) A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists.]

(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof: [Provided that where the original arbitration agreement or a certified copy thereof is not available with the party applying for reference to arbitration under sub-section (1), and the said agreement or certified copy is retained by the other party to that agreement, then, the party so applying shall file such application along with a copy of the arbitration agreement and a petition praying the Court to call upon the other party to produce the original arbitration agreement or its duly certified copy before that Court.]

(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued

1 Engineering Mazdoor Sabha v Hind Cycles Ltd AIR 1963 SC 874; Prakash Timbers v Sushma Singhla & Anr AIR 1996 All 262; ANZ Grindlays Bank v National Hydro Electric Power Corp Ltd 1995 82 CC 747

and an arbitral award made.”

A bare perusal of the statutory enactment indicates that the act provides for reference of a dispute for arbitration when the judicial authority is seized of a matter that provides for adjudication of disputes vide arbitration. Here it is pertinent to note that when the subject matter is an IPR dispute which generally falls before the statutory tribunals such as IPAB (Intellectual Property Appellate Board), it won’t be open for such tribunals to refer the matter for arbitration as they do not fall within the ambit of Judicial Authority in terms of Section 8 of the Act.

The Hon’ble Delhi High Court in HDFC Bank v. Satpal Singh Bakshi2, held that disputes which are right in personam in nature are arbitrable in nature.

In Booz-Allen & Hamilton Inc vs Sbi Home Finance Ltd. & Ors3, the court observed that the disputes which are private in nature i.e. disputes involving rights in personam are capable of being adjudicated vide arbitration whereas the disputes which are not private in nature i.e. right in rem are capable for adjudication by courts only.

In Eros International Media Limited vs. Telemax Links India Pvt Ltd4, the court has held that IPR disputes fall squarely within the subject matter of the arbitration dispute. The reason given by the court for the same was that when the parties have decided that any dispute arising between them shall be referred for arbitration, then there is no question of ouster of arbitrability of such dispute. Furthermore, the court observed that there is nothing contained in the Patents Act which ousters the jurisdiction of arbitral tribunal from entertaining disputes vis-à-vis intellectual property rights. The court observed:

“Section 62 of the Copyright Act 1957 corresponds almost exactly to Section 134 of the Trade Marks

2 [193 ( 2012 ) DLT 203]

3 CIVIL APPEAL NO.5440 OF 2002

4 (MANU/MH/0536/2016)

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Act, 1999: infringement and passing off actions cannot be brought in a court lower than a jurisdictionally competent District Court, one within whose limits the plaintiff resides or works for gain. I do not think these sections can be read as ousting the jurisdiction of an arbitral panel. All that they mean is that such actions are not to be brought before the registrar or the board, viz., an authority set up by either of those statutes.”5

The Hon’ble Madras High Court in Lifestyle Equities Cv vs Qdseatoman Designs Pvt. Ltd6 held that intellectual property disputes that are Right in Personam in nature are arbitrable while the disputes that are in the nature of Right in Rem are not arbitrable. The court observed:

“We now deal with the first aspect of the matter, i.e., as to whether IPR disputes are arbitrable. This takes us to the question as to whether it is in the realm of a right in rem and therefore, not arbitrable. In this context, a clear distinction has been made inter-alia in the line of authorities referred to supra between a right in rem and an action in personam. A judgment in personam refers to a judgment against a person as distinguishable from a judgment against a thing, right or status. A judgment in rem refers to a judgment against a thing, right or status or condition of property which operates directly on the property itself. To make this illustrative, it can be said that a patent license issue may be arbitrable, but validity of the underlying patent may not be arbitrable.”

CONCLUSIONThus, it can be seen that the matters involving public rights cannot be decided by the Arbitral Tribunal which is a private body, per se. In other words, factum of the dispute is the decisive factor while concluding if a dispute is arbitrable or not. If dispute pertains to the enforcement of Right in Personam, it shall be arbitrable. Whereas, if the dispute pertains to the enforcement of Right in Rem, it shall not be arbitrable.

***

5 Ibid

6 C.M.P.No.14932 of 2017

indian legal impetus · the hon’ble court that there is no bar under the mv act or otherwise, to...

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