LAWYERED SLCU Litigation Committee Newsletter - Internship Special Issue

NOVEMBER-DECEMBER 2011 Volume 1, Number 4

Legal Vision

Interview with Mr. R. Venkataramani

Mr. R. Venkataramani, a legal visionary who is a practicing Senior Advocate in the

Supreme Court. He is also a member of the 19th

Law Commission of India.

1. Who inspired you to opt for litigation?

In the case of our generation, the relevant question would be what inspirations persuaded

as to turn to the legal profession, as litigation was the sole component of the profession. I

was drawn into the school of thought that considered the legal profession as an important

component of social reforms and social change. The role of law as a mediating dimension

or element, between the people and the state (viz. all power) and as a peaceful orderly

instrument occupies a central element in this conception. One who is truthfully and

powerfully engaged in this pursuit, and all of us collectively answer the ever tempting

collectively answer the ever tempting calls of revolution and persuasions of violence. The

two decades between 60s and 70s inspired students to deem part of the grand dream of

nation building. Beyond this, my answer to this question would be irrelevantly

autobiographical, yet Gandhiji and Swami Vivekananda were my thought artists.

2. What areas of law do you think law students should master so that they can

evolve as good lawyers?

Constitutional Law, Criminal Law and the exchange between environmental law and the

demands and fruits of intellectual property domains.

a) Constitutional Law because it is master of all branches.

b) Criminal Law because it gives you the essential insights of human nature and the

intricate problems of administration of justice inter-se between individuals and between

individuals and the state.

c) Environmental Law and Intellectual Property Law as twin branches of contemporary

obligations and societal needs.

3. What qualities should aspiring litigating students should possess in order to be a

successful litigating lawyer?

a) The deep understanding that peace, order, promotion of excellence and equal

respect for all;

b) the ceaseless quest for good answers to the issues and problems presented for

resolution;

c) without doubt the thirst for knowledge and

d) a deep sense of compassion driving your mind.

4. Corporate practice rather than litigation has always been touted as “instant

success and money mantra”. How do you debunk such a myth?

Do not debunk that myth by theory. We need myths. All myths have certain core

realities or essence. Corporate practice has its role and its offerings are commensurate

with its role. But the thrill of the mind in its all round engagement in litigation has no

substitute. The challenge however is to breakdown the existing, “the genealogy, the

pedigree and high contacts sources tending to block equality of talents.”

Contributor: Shweta Nambiar (III year)

Legal Newswire

TIME TO REPEAL ARMED FORCES SPECIAL POWERS ACT?

The Parliament of India passed Armed Forces Special Powers Act or AFSPA in 1958 and it

was enforced in the entire seven sister states of North-East. Later due to insurgencies the

power of AFSPA was extended to Jammu and Kashmir in 1990. This Act provides special

immunity to armed forces to take measures against the violent protest in these “disturbed

areas”. An officer is given the power to fire or use force even to the causing of death against

any person who is acting contrary to any of the present laws or orders for the time being in

force in the disturbed areas. It entirely depends on the discretion of the Center or the State

government to declare the state as “disturbed” or not.

It is often assumed that AFSPA seems to be awarding the “Right to Kill” to the armed

force and this is one of the reasons for the controversy. It makes no distinction between a

peaceful gathering of few people and a violent mob and hence the people who have no

intention and role to create a “disturbed” region also come under the cobweb of law.

Secondly, the law also states that, “no prosecution can be initiated against an officer without

the previous sanction of the Central government”. This section protects the officer from

various misguided allegation. In order to express faith in the armed forces and interest the

government is very fastidious in giving this sanction. Thirdly, it cannot be challenged in court

about the decision of the government to declare the particular area disturbed. India is

unwilling to accept the fact that the war to restore peace has been won relating to the twenty

three year old bombing which was a herald to the beginning of the murderous insurgency in

Jammu and Kashmir. The chief minister of Kashmir Omar Abdullah believes that the

controversial Armed Force Special Power Act should be withdrawn from the part of the State

which could be the first step towards reduction of Army‟s presence in civilian inhabitant

areas. On an analysis based on Central Government data it was commented that Jammu and

Kashmir was more peaceful than many of the „perfectly peaceful‟ States of India and in terms

as population it is at par with the population of Bihar and not significantly higher than in

Delhi. The situation of Kashmir seems to go out of hand and the leaders supports the

argument of the Act to be repealed reasoning that the threat due to which AFSPA was

enforced has reduced the effect over the years. It can be argued that if there is no threat in the

region then why not declare the region as „not disturbed‟ which will by itself put an end to the

role of the army.

It is obvious there has been killing and human right violation in both Kashmir and the

North-East as a direct result of AFSPA but the opinions differ. It has been repeatedly avowed

by the Joint Chiefs that even partial revocation of AFSPA will harm the freedom of the army

to carry out operation. According to them a soldier deserves all the legal protection for the

result or any decision he takes on the spot. It is reported that more than 80 civilians died since

June 2011 and on the other hand North East has been hunted down fifty two years ago. The

news is full of the headlines about mass killing and custody deaths which catalyses the

protest for instance Irom Sharmila‟s unsuccessful fast for over decades demanding the

termination of AFSPA from Manipur and other parts of the North-East. The army cannot be

fully blamed for the present situation. The Centre and the state are also a part of this. The

Prime Minister on his visit to Assam in 2006 promised the people of North- East about

replacing AFSPA with a more humane law. Even Justice Jeevan Reddy Committee was

constituted to do the same but the present situation marks the poor progress made in this

regard. The army comes into play only when the situation is serious and the state law has lost

control over the crisis. The government finds AFSPA a controversial tool to hide their poor

advancement in the present situation.

Source: The Hindu.

Contributor: Shreya Majumdar (II Year)

Cartoon: Mahit Anand

Legal Jargon

PUT OPTIONS - NOT ENFORCEABLE

Put Option are fundamentally exit rights vested with private equity and venture capital

investors in companies. Transferability of shares comes within the purview of Companies

Act, 1956 whereas the specialized transactions such as put options are also governed by the

Securities Contracts (Regulation) Act, 1956 (hereinafter referred as “SCRA”). In matter of

public takeover of Cairn India Limited, SEBI opined that put options violated the provisions

of SCRA and it was subsequently acknowledged by the parties that such options were not

enforceable.

In an informal guidance letter addressed to Vulcan Engineers Limited by SEBI

wherein it was stated that if the option was exercisable on a future date then the transaction

would not qualify as spot delivery contract as defined under section 2(i) of SCRA. Moreover,

such put option cannot be construed as legal and valid derivative contract in terms of section

18A of SCRA.

The 2000 SEBI Circular, while referring to 'contracts for derivatives', specifies that

only such are valid that take place under the SCRA or the SEBI Act / rules and regulations

and the rules, regulations and bye-laws of a recognized stock exchange. The 2000 SEBI

Circular read with the 1969 GoI Notification in effect says that contracts for the sale or

purchase of securities are prohibited, except if they are: (a) spot delivery contracts; (b)

contracts for cash; (c) hand delivery; (d) special delivery; or (e) contracts for derivatives

permissible under the SCRA or the Securities and Exchange Board of India Act, 1992 rules

and regulations. Moreover, the Statement of Objects and Reasons of the 1995 Amendment

clarifies that the idea behind the removal of Section 20 of SCRA was not to permit option

contracts without any regulation.

The conjoint reading of provisions of SCRA and SEBI 2000 Notification Contracts in

securities continue to be considered void unless they are spot delivery contracts or carried out

through the stock exchange mechanism.

Contributor: Shinjni Kharbanda (IVth Year)

DEATH PENALTY: RAREST OF RARE CASES

Death Penalty is awarded in the rarest of rare cases. The special nature of the offence and the

sentence awarded requires one to keep a watchful eye on such cases especially being law

students. The procedure for appeal in such cases is also uniquely different. Whenever the

Sessions Court awards death penalty, the High Court has to confirm it. The Trial Court is

required to make a reference to the High Court. It is the duty of the Court to take into account

the entire evidence and make its own decision on the given facts and come to an independent

conclusion. The precautionary measure of this scrutiny of decision by the High Court is

further strengthened that while confirming or any new sentence passed by the High Court, it

should consist of two or more judges. If divided in opinion, then a third judge should be

referred, and he shall be bound to accept the view of the one judge who is holding in favour

of acquittal.

I had been assigned a research looking into the cases between 2000-2007, wherein

death penalty was awarded as a punishment. I observed that not all cases with similar facts

had the same sentence. Though aggravating and mitigating circumstances test laid by the

Constitutional Bench in Baachan Singh case (Baachan Singh v. State of Punjab, (1980) 2

SCC 684.) was relied upon in almost all the cases.

In majority of the cases after Baachan Singh the Courts looked into the nature of the

crime and criminal after drawing a balance sheet of aggravating and mitigating

circumstances. But in Santosh Kumar Bariyar v. State of Maharashtra, (2009 (7) Scale 341)

Justice S.P. Sinha clarified the position of law that Baachan Singh laid down two limbs. One,

that nature of crime and criminal should be looked into after drawing a balance sheet of

aggravating and mitigating circumstances, the probability that the accused would not commit

criminal acts of violence as would constitute a continuing threat to society. Second, the

probability that the accused can be reformed and rehabilitated, for this purpose the State shall

by evidence prove that the accused does not satisfy this condition.

After carefully analyzing the situation can it be said the previous judgments were per

incuriam. If the State has to prove the last condition then what standards can be used. For

human nature is itself unstable in nature. It is this very nature which leads to such crimes

being committed. A detailed inquiry into the accused might be of help but even the current

state of mind, i.e. if he is repenting his act may be required to be kept in mind.

Death Penalty is unique in its absolute rejection of the potential of convict to

rehabilitate and reform. It extinguishes life and thereby terminates the being, therefore puts

an end anything to do with the life. Hence, any decision passed in such cases should follow

all the precedents laid down by the Courts to achieve the ends of justice.

Contributor: Shweta Nambiar (III Year)

DECONSTRUCTING „INVESTMENT TREATIES‟

Foreign investments can be defined as flow of capital from one nation to another in exchange

for significant ownership stakes in domestic companies or other domestic assets. Foreign

investments are governed and regulated by the investment treaties. Investment Treaties

pertain to the treatment of foreign investment after its entry into the host state. As investment

treaties aim to promote investment flows, they provide safeguards for foreign investment.

There are provisions in the investment treaties which govern the treatment of the

foreign investments. The so-called “treatment” provisions typically include:

● The “national treatment” and “most-favored-nation” principles, whereby the host state

must provide to foreign investors a treatment no less favorable than that applied to its own

nationals (national treatment) and/or to nationals of other states (most-favored-nation).

● “Fair and equitable treatment” stipulates that the host state must treat foreign investment

according to a minimum standard of fairness, irrespective of the standards it applies to

domestic investment under its national law. It has been a widely accepted principle in

investment treaties and has been applied by many tribunals.

● “Full protection and security”, provides that the host state must take steps to protect

foreign investment from damage.

● Provisions on currency convertibility, profit repatriation and related aspects, which allow

investors to repatriate returns from their activities in the host state.

Investment treaties usually include provisions setting conditions for the expropriation

(or “taking”) of the investor‟s property rights. Black‟s law dictionary defines expropriation as

“a governmental taking or modification of an individual‟s property rights, especially by

eminent domain”. It deprives the investor of the ownership, control and/or economic benefit

of the investment. Expropriation does not violate International Law per se. There are certain

conditions which have to be met in order hold an expropriation by the host state as lawful

one:

i) Non Discrimination: If „investor‟ assets were expropriated in a non-discriminatory way

(i.e. not discriminating between foreign and domestic investors, or between foreign

investors).

ii) Public Purpose: if the taking of the investment was done in pursuit of a public purpose.

iii) Due Process: if the host state has observed procedural safeguards.

iv) Compensation : Expropriation has to be accompanied by payment of compensation based

on specified standards.

Investment treaties commonly include provisions on international arbitration and

therefore disputes between a state party and an investor national of the other state are settled

by international arbitration. For example the IRAN-US Claims Tribunal which was

established on January 19, 1981 by the Islamic Republic of Iran and the United States of

America. The Iran-United States Claims Tribunal came into existence as one of the measures

taken to resolve the crisis in relations between the Islamic Republic of Iran and the United

States of America arising out of the detention of 52 United States nationals at the United

States Embassy in Tehran which commenced in November 1979, and the subsequent freeze

of Iranian assets by the United States of America. To date, the Tribunal has finalized over

3,900 cases.

Sources: Lorenzo Cotula, Investment Treaties.

Contributor: Himanshu Bagaria (II Year)

JUVENILE JUSTICE

Juvenile Justice Act 2000 was brought out to protect and ensure safe environment for the

children in our society. There are two main divisions under Juvenile Justice Act, which are:

Children in Conflict with law and Children in need of Care and Protection. A child or a

juvenile is one who has not attained the age of 18years. This is defined under the Juvenile

Justice Act of 2000.Children in conflict with law, are those who have alleged to commit an

offence before they have attained 18 years of age. Like those who involve themselves in

Theft and petty criminal offences.

Children in need of care and protection are those who require special attention and

care. These children may have been victims in crimes like Rape, Sexual assault and abuse.

Children who have no means to live and are homeless are brought into the Juvenile Homes.

Since these two groups, that is, Children in conflict with law and Children in need of care and

protection are different in nature, they are kept in different homes until they attain the age of

majority. Observation Homes, Special Homes, Children‟s Home are few, which have been

introduced under this Act.

Observation Homes shelters Children in conflict with law for a temporary period.

They are monitored until the case has been fully judged by the juvenile court. Special homes

shelters Children who are in need of special care and protection. They are provided with a

safe environment to live in and facilities to nurture them to grow. They provide education, a

place to live and also allow them to participate in various co-curricular activities.

The provisions of Juvenile Justice (Care and Protection of Children) Act 2000 have an

overriding effect on all other legislations irrespective of the nature of offence committed by a

child who is less than 18 years of age as on the date of commission of offence.

The following are few of the landmark cases decided by the Hon‟ble Supreme court -:

Umesh Chandra v. State of Rajasthan

Arnit Das v. State of Bihar

Pratap Singh v. State of Jharkhand and others

Satbir Singh v. State of Haryana

In the case between Pratap Singh v. State of Jharkhand and others, the Hon‟ble Supreme

court decided that the reckoning date for the determination of the age of the juvenile is the

date of the offence and not the date when he is produced before the authority or in the court.

There has been a tremendous change in the development of Child care and protection due to

enactment of this welfare legislation. Juvenile Crime rate has been reduced to a large extent.

India has been initiating various programs to empower and support Children.

Contributor: Ann Kaynadi (II Year)

LETTERS OF INTENT: MERE GENTLEMEN‟S AGREEMENTS?

A Memorandum of Understanding (hereinafter referred to as “MoU”) or a Letter of Intent

(hereinafter referred to as “LoI”) is a formal document that lays down the tentative terms of a

contract that the parties may subsequently enter into. Normally, it contains the negotiated

terms which are to be incorporated into a contract. Fulfilling the terms laid down in a LoI or

entering into a contract thereon are generally moral and not legal obligations. Do parties

have legally enforceable rights and liabilities under a LoI?

A LoI is an agreement to enter into a contract. However, a contract to enter a contract

is not a valid contract at all (Jyoti Bros. v Shree Durga Mining Co., AIR 1956 Cal 280).

Therefore, the LoI has no validity and no legal enforceability. However, completion of

negotiation and intention of the parties to create a legal relationship leads to legal

enforceability of a LoI.

A LoI, not resulting in a contract but followed by continued negotiations is part of the

negotiations (Harichand Manacharam v. Govind Luxman Gokhle, ILR 47 Bomb. 335).

If parties intended to create a legal relation, the LoI becomes enforceable. Intention can be

inferred from the language used in the LoI. The preamble generally mentions either that the

parties wish to initiate negotiations or that they shall act in the manner prescribed in the LoI.

The latter is a contract; there is an agreement for a lawful purpose and consideration, making

the agreement a contract with the force of law. To prevent ambiguity, many letters of intent

expressly exclude legal enforceability.

The intention of parties may not be clearly expressed or inferred from the language of

the LoI. When there is ambiguity, the Court tests for meeting of the minds. However, the

Court cannot go outside the language of the LoI and create a contract for the parties (Dresser

Rand S.A. v. Bindal Agro Chem Ltd. Appeal (civil) 8357 of 2003; Nasir Husain Films Pvt.

Ltd. v. Saregama India Pvt. Ltd. And Anr 2007 (5) BomCR 192).

The actions of parties pursuant to the LoI often determine the validity and enforceability of a

LoI. If the parties transact and act in furtherance of the LoI to bring the stipulations into

operation with immediate effect and an intention to enter into a formal contract later, the LoI

is binding whether or not a formal contract is executed. Here, the LoI becomes an implied

contract because of the act or forbearance of one or more of the parties. If the material terms

are agreed upon and reduced to writing, a LoI is enforceable (M/S. Nanak Builders and

Investors Pvt. Ltd. v. Vinod Kumar Alag, AIR 1991 (Del) 315).

Actions in furtherance of a LoI create an implied contract. A LoI pertaining to placing

orders for goods shows the willingness of parties to do business on such terms. When orders

are placed and accepted, the order is a binding contract governed by the terms set down in the

LoI (Chatturbhuj Vithaldas Jasani v. Moreshwar Parashram.). A LoI is often a quotation or

invitation to treat and actions in furtherance do not always result in a binding contract.

However, the acceptance of a bid for tender and the subsequent payment of security deposit

do not, in itself, result in legal relation (CMD, Tamil Nadu Tea Plantation Corporation Ltd.

v. Srinivasa Timber, AIR 1999 Mad 111). Thus, withdrawing the award of the tender to one

party who has paid the deposit and reassigning the same to another(BCCI v. Zee Telefilms,

(2005) 2 MLJ 653) withdrawal of the LoI (Rajasthan Co-operative Dairy Federation Ltd.v.

Shri Mahalaxmi Mingrate Marketing Service Pvt. Ltd & Ors.) does not injure any contractual

rights of the party, even if it incurred expenses or difficulties in anticipation of entering into a

contract, as no contract resulted.

However, if a reasonable man considers that the LoI was made with the intention to

create a legal intention or contract between parties to therein, a legal obligation arises

(Brikram Kishore Parida v. Penudhar Jena, AIR 1976 Ori 4). Thus, the test of the reasonable

man can determine whether the parties are bound by the LoI.

It can be seen that some instruments, though termed as Letters of Intent or

Memoranda of Understanding are actually contracts as per S. 10 of the Indian Contract Act

and can thus be enforced.

Contributor: Mukta Batra (II Year)

DEPARTMENT OF PUBLIC INSTRUCTIONS:

RIGHT TO EDUCATION ACT, 2009

The Department of Public Instructions is the department set up in order to monitor the Right

to Education Act. Its main function is to ensure the implementation of the Right to Education

Act by providing free and compulsory education to all children up to the age of 14 years.

The mission of the Department of Primary and Secondary Education (Department of Public

Instructions) is to equip children of the State with specified knowledge, skills and values to

enable them to become good human beings and productive, socially responsible citizens and

to achieve excellence in whatever they do.

As in the other states of India, the Government of Karnataka too imparts 10 years of

school education to all children in the state in Government schools. Up until 2001-2002,

Lower Primary Schools comprised of 1st to 4th standard classes, Higher Primary Schools

comprised of 5th to 7th standard classes and High School comprised of 8th to 10th standard.

The Educational Task Force constituted by the Government under the chairmanship of

Dr.Rajaramanna, recommended that the Government as a first step, should provide children

with 8 years of free Primary schooling. And so, the 5th standard was clubbed to Lower

Primary School in 2001-2002, and then in 2003-2004, 8th standard was clubbed to Higher

Primary Schools. Also, 8th standard has been set up in Higher Primary Schools where there is

no Higher School facility within the radius of 3km. By this the Lower Primary School

education is of 5 years' duration, Higher Primary School education is of 3 years' duration and

that of High School is 2 years.

DIRECTOR OF PUBLIC INSTRUCTIONS

Our meeting with the director of public instruction for primary schools was fruitful in

the sense that it provided us with an insight into the functions, powers and responsibilities of

the post. We were able to ascertain valid information about his working in relation with the

upkeep and monitoring of government school systems. He informed us that his powers are

largely supervisory in nature and he ensures the efficient working of the Block education

officers as well as the deputy directors of public education. In case of a complaint, he

familiarized us with the procedure for redressal which, according to him, is usually taken care

of by the redressal cell headed by the block education officers. If required he steps in and

ensures that valid steps are taken to correct any misdemeanors. He also told us that various

schemes have been implemented by the department of public instruction at the primary

school level to encourage attendance in government schools.

These include free uniforms and books as well as free cycles which were provided to

theses children as an incentive to attend school. The mid day meal scheme has proven to be a

success in ensuring that children remain in school. As the director of public education for

primary schools, the responsibility of carrying out these schemes in an effective and efficient

manner rests on him. He also told us that through the implementation of „a no failing policy‟

he aims to “make learning fun, so that children enjoy going to school”. This brought us to an

interesting point of contention which was the ability of the state to provide quality education

at the government school level in order to ensure that children attending these schools are

able to compete with children from private schools. In this regard he clarified his stance that

these schools do have a long way to go regarding quality education but the initial foundation

of such a system have been laid down through the implementation of various incentives

provided to these children and their families in order to keep them in school.

We tried to elicit his opinion on the shutting down of government schools in various

taluks and he answered our queries with a fairly positive response. He informed us that this

was being done only in cases where the attendance at these schools was less than 10%. In

such instances these schools were amalgamated to ensure that the attendance levels were

higher and consequently the children in these schools could be taught in a more efficient and

productive manner.

He believes that the Right to Education Act, 2009, is a strong legal instrument that

will go a long way in reforming the education system and asserted his firm belief that as the

director of public instruction he would do his best to ensure its effective implementation.

Contributor: Tanvi Mohan (I Year)

Faculty Advisor- Dr. Sandeep Desai

Editor – Shinjni Kharbanda

Editorial Committee- Roshil Nichani, Ashwin Bhadang, Shweta Nambiar, Darshana. S, Akshata Benegal,

Deepali, Shreya Majumdar, Mukta Batra, Rajeev Rambhatla, Himanshu Bagaria, Priyanka Kumar, Ann J. Kynadi

and Tanvi Mohan.

Cartoon: Mahit T. Anand

Comments or Suggestions: Please send comments or suggestions to shinjni.kharbanda@law.christuniversity.in

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