Rostrum's Law Review, Vol I, Issue IV

LAW REVIEW

ROSTRUMs Fourth Issue

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A DIVISION OF ALKEMIA LEGAL EDUCATION VENTURES PVT. LTD.

ISSN: 2321 - 3787

ISSN: 2321 - 3787

2013. All Rights Reserved

Alkemia Legal Education Ventures Pvt. Ltd.

ROSTRUMs LAW REVIEW

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Volume : I Issue: IV

Fourth - December- 2013

Editorial Advisor

Prof. (Dr.) G. P. Tripathi

Director, MATS Law School, Raipur, Chhattisgarh, India

Guest Editor

Dr. Debasis Poddar

Assistant Professor of Law

National University of Study and Research in Law,

Ranchi, Jharkhand, India

Managing Editor

Anurag Parihar

CEO, Alkemia Legal Education Ventures Pvt. Ltd.

Associate Editors

Aounkar Anand

COO, Alkemia Legal Education Ventures Pvt. Ltd.

M. B. Elakkumanan

CAO, Alkemia Legal Education Ventures Pvt. Ltd.

Mode of Citation: RLR (4) 2013

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www.rostrumlegal.in/journal

TABLE OF CONTENTS

FOREWORD BY K. N. C. PILLAI 01

NOTE FROM THE DESK OF GUEST EDITOR

DEBASIS PODDAR 02

A. SPECIAL ARTICLE:

EXCEPTIONS UNDER MORAL RIGHT OF THE AUTHOR - AN ANALYSIS

JAYANTA KUMAR LAHIRI 03

B. ARTICLES:

PROBLEMS OF RURAL CONSUMERS AND THEIR EMPOWERMENT THROUGH

PANCHAYATI RAJ INSTITUTIONS

ALOK MISRA 09

E-CONTRACTS: MAIL BOX RULE AND LEGAL IMPACT OF THE INFORMATION

TECHNOLOGY ACT, 2000

ATUL KUMAR PANDEY 24

PUBLIC INTEREST LITIGATION (PIL): EFICACY AND DANGERS

CHINTAMONI ROUT 47

REVISITING THE CONCEPT OF PAROLE IN INDIA

DIPA DUBE AND MANISHA CHAKRABORTY 54

DEVELOPING SPACE LAW EDUCATION IN INDIA: SOME PROPOSALS

MALAY ADHIKARI 70

A STUDY ON LAW RELATING TO GROUNDWATER RECHARGE IN INDIA

P. SAKTHIVEL, S. AMRITHALINGAM AND M. STARKL 84

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B. SHORT NOTES:

STATE OBLIGATIONS UNDER INTERNATIONAL CRIMINAL LAW: PROGRESS,

CHALLENGES AND PROSPECTS

DEEPA KANSRA 102

CONTRIBUTION OF SUFISM IN RELIGIOUS POLICY OF MODERN INDIA

GOURISHWAR CHOUDHURI 110

MOST FAVOURED NATION TREATMENT

NIDHI CHAUHAN 120

PERILS OF A FRAGILE PLANET: SHIFTING PARADIGMS AND SENSITIVE POSSIBILITIES

TAPAN R. MOHANTY 129

D. CASE COMMENTS:

OCCUPATIONAL HEALTH AND SAFETY ASSOCIATION VERSUS UNION OF

INDIA,

ARUP PODDAR 159

ASSOCIATION FOR MOLECULAR PATHOLOGY,

ET AL V UNITED STATES PATENT AND TRADEMARK OFFICE ET AL

GARGI CHAKRABARTI 169

E. LEGISLATIVE COMMENTS:

THE NATIONAL FOOD SECURITY ACT, 2013: A CRITIQUE.

GEORGE K. JOSE 176

THE LOKPAL BILL, 2013

S.C. ROY 184

F. INTRODUCTION TO CONTRIBUTORS A

Page | 1

FOREWORD

I am thrilled that Rostrums Law Review comes out with its fourth edition. If earlier

editions are any guide, the fourth edition should be superb.

The venture of law school students under the able guidance of guest editor Dr.

Debasis Poddar should be encouraged and appreciated in as much as it dispels the

popular misconception that the law schools now serve only corporate interest.

Rostrum is the standing monument of the sincere efforts made by the law school

lads to make legal education socially relevant.

I congratulate Dr. Poddar and his team of young scholars devoted to hard work and

learning for bringing out this wonderful journal for the benefit of the fraternity of

law. Keep up the multidisciplinary approach.

Kochi, Kerela Prof. K N C Pillai

January 26th, 2014

Page | 2

FROM THE DESK OF GUEST EDITOR

It seems heartening to note that young Guest Editor was requested

to continue assignment for another issue of Rostrums Law Review-

a forum that has created brand for itself within its short life span.

For few reasons, I was prompt while accepting offer from publisher

to repeat my stewardship for this journal. First, I received response

from contributors across the country to add value for my initiative.

Second, I received support and cooperation from other stakeholders

of RLR which knows no bound. Last but not least, in course of this exercise, I received insight

on editorial role that encouraged me accept this further opportunity for editorial experiment.

Together, these points did reboot my odyssey with RLR once again.

Scribbling from the same desk twice, I find it convenient to mention newer points of strategy

rather than repeating my editorial policy existing since earlier issue which is available online

@ RLR Volume 1, Issue 3. Here I prefer to accommodate an author on invitation who was not

part of mainstream academia as such; but made a mark of his own through his contribution

to legal literature on Intellectual property. A veteran in IP matter, both in academics and

practice, Dr. Jayanta Kumar Lahiri is known for hard rigour he undertakes and the insignia

of (t)his rigour seems apparent. Also, Im elated to receive two pieces of legislative comment

on two newly introduced statutes. Legislative Comment- being my dream column- is meant

to address a long-pending vacuum in the world of juridical literature.

With these words, I prevent myself to stand further between our authors and their readership.

Debasis Poddar

January 27, 2014, Guest Editor,

Ranchi (Jharkhand), Vol. 1, Issue 4,

India. Rostrums Law Review.

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EXCEPTIONS UNDER MORAL RIGHT OF THE

AUTHOR - AN ANALYSIS

JAYANTA KUMAR LAHIRI

ABSTRACT

While delving into the moral rights in the law on copyright, the present article

focuses in brief the most distinctive features and which of the them stands unique

concerning the concept of right and reason therefore. The moral right,

notwithstanding its conceptual formidability and practicality, suffers from some kind

of ambiguity and uncertainty in deciding kind of acts that amount to reputational

damage of the author in relation to his work ultimately pushing the court to be the

judicial umpire of the rival contending parties. That the harmonised standard for

deciding the reputational damage of the author caused by humiliating display of his

work admittedly is some what illusion but the truth remains that the its absence

confounds the problem although this aspect is not dealt in detail here. The article

fleetingly discusses the effects of exception clauses on the efficacy of the moral

right).

Right, without punitive law against infringement, had little appeal to the

conservative positivist juristsi. They consistently held that moral indefensibility of an

act or omission, its severity and public abhorrence notwithstanding, if so facto does

not confer legal right to compensation and relief to the aggrieved unless specific

law provides so. Differently put, conduct arising out of moral aberrations will be

unlawful against a set of enacted rules although opposite may not always be the only

reasonable inference. Conversely, under ethical concept of Hindu raj dharma, moral

shade of an individual conduct, enjoyed primacy over the strict legal faade of the act

as understood under modern parlance, decided the compensatory approach of

retribution. Religious precepts, regardless of difference in tenor and emphasis,

inherently prefer morality over other considerations in dealing human conduct. The

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moral right carves out an exception to the approach to the classical concept of right

for, among others, the reason being that the moral consideration germinates

enforceable right within particular area of intellectual creations.

The moral right, grounded specific principles is an individual right ii. The concept of

moral rights originated in French law with three limbs namely, right of paternity,

right of integrity and right of publication. The right of paternity confers the author

the right to claim authorship in respect of certain type of works, right to restrain

others from claiming the authorship of those works and right to prevent the use of

his name by others in connection with that other persons work. The right to

integrity confers the owner the right to prevent distortion or mutilation of his work.

The fundamental justification of moral rights is based on the premise that the

works of art belong to their creators and the works reflect the personality of the

author or creator and the work being the embodiment of creators personality

therefore must be protected from distortion and mutilation. From the point of

enforceability, it is a branch among other forms of rights but characteristically not

akin to in other respects. The moral rights are essentially personal, non-economic in

nature and are not proprietary rights.. The author, even after the transfer of

copyright enjoys the right to object to distortion , mutilation of other

modification of, or other derogatory action in relation to the said work, which will be

prejudicial to his honour and reputation.iii The author receives no financial profit

neither can assign moral rights even after assigning the economic rights of the work.

But the author is entitled to claim damages and sue against infringement of moral

rights against any person including the person to whom he transferred the copyright

by assignment.

The Berne Convention (Paris Act 1971) recognized two kinds of the moral

rights of the author namely:

the right to claim authorship of the work

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to object in any distortion, mutilation or other modification or, or other

regulatory action in relation to, the same work which would be

prejudicial to his honour or reputation.

The Convention left it to the rectifying countries to frame statutory mechanism

under their national laws to safeguard the author's moral rights. TRIPS

Agreement although required that Member Sates shall comply with the

main Articles 1 to 21 of the Convention but did not endorse any protection

of the works under authors moral rightiv.

Judicial approach to the infringement of moral rights is largely determined by

various factors like facts of each case, the category of the work, nature of

alleged derogatory treatment, the use of treatment resulting in alleged

infringement, the contextual laws of the each country and the exceptions.

In Eaton Centre case, simple putting ribbons around the necks of flying gees

forming a part of an art work by Eaton Centre, the Shopping complex, in

Toronto, was upheld by the Canadian courtv being prejudicial to the honour

and reputation of its author. Contrastingly, the British court refused to accept

the plea of violation of integrity of the works of cartoon by the cartoonist

merely because the original size of cartoons was reduced Natural History

Museum Authorities while including the cartoons in a book. The Court held

that the reduction of size of the cartoon did not result in distortion of the

cartoons and therefore caused no prejudice to the reputation and honour of the

cartoonist vi . The bronze mural sculpture which was commissioned by the

government of India from an internationally reputed sculpture was damaged

for being badly kept. It was considered by the court as destruction and

mutilation of the work and held to be infringement of moral rights of the

sculpturevii.

The moral right doctrine under Copyright Act 1957

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The concept of moral rights is given legislative shape in Copyright Act 1957 by

providing authors special right viii with certain exceptions and moral rights to the

performersix. The section 57 of the Act reads:

Independently of the authors copyright and even after the assignment either wholly

or partially of the said the author of a work shall have the right-

(a) to claim authorship of the work and

(b) to restrain or claim damages in respect of any distortion, mutilation,

modification or other act would be prejudicial to his honour or reputation:

Moral right under Copyright (Amendment) Act, 2012

Under the un-amended Act, the duration of moral rights was limited to the term of

the copyright in the work. In other words, the author could enforce his moral

rights so long the copyright exists in the work. By omitting the words which is

done before the expiration of the term of copyright the amended provision wiped

out the durational limit of moral right and conferred permanent moral right to

the author x. The new provision is slight variation of the provision under Berne

convention but largely similar to that under French law.

Calling for the rationale behind choosing the phrase moral right instead of any

other indicative expression receives no convincing explanation. One of the

strained reasons might be the concept that work personifies the author and so the

he can claim moral right over it. But this justification does not go beyond the

theory of right to paternity Can a right automatically emanate from the claim of

from the moral perspective? Unless the conduct or behaviour intervening the right

is visited with punishment, moral claim cannot share the same platform with legal

right. But why the authors and performers are chosen to be conferred with such

right solely based on moral consideration under intellectual property law leaving

other rights, if claimed on the moral considerations under other branches law of

property, remains unanswered.

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Apart from those rights granted to him under section 14 of Act , the author also

enjoys special rights which he retains even after the assignment of the

copyright either wholly or partially in respect of particular copyrighted work.

The violation of special rights read with exceptions and explanation, will

constitute cause of action for bringing suit of infringement by the author in

addition to those provided under section 51 of the Copyright Act. The duration of

special rights or moral rights is limited to the term of the copyright in the work.

The term author however, has to be interpreted in the light of definition given

in the Copyright Actxi . This right can be enforced either by the author or his

appointed legal representatives.

The moral right, in summary, can be enforced by the author if his work are

mutilated, or subjected to such treatment that causes his reputational damage

affecting his honour and integrity of his authorship even after the assignment or

sale. The moral right transcends beyond the cardinal concept of ownership

because the right prescribes its enforceability even after transfer the ownership

of the work to a third person by way assignment o others legal means.

The exceptions of the moral rights under the law of copyright to some extent

,dwarfed its efficacy from the authors point of view thus making it a fragile

extension of legal right. Under one of the exceptions, the authors special rightxii

will not operate in case of failure to display his work to his satisfactionxiii and

therefore an suit of infringement of his right will not stand. The wide ambit

phrase failure to display the work coupled with innumerable ways of displaying

the work makes it difficult to decide whether authors moral right has been

affected or not. For example, can a cartoonist of no reputation or marketability of

his work allege the failure of his work of cartoons and consequent infringement

of his moral right if his cartoon morphed by adding colour to the appearing

bodies? Theoretically he may allege morphing resulted in his reputational

damage and brought dishonour to his work and the defendant may put up many

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defences. Ultimately, the court, if approached by the affected author will decide

which bound to differ due to various reasons.

The exception clause further provides that infringement of moral right cannot be

invoked by the author merely because failure to display his work to his satisfaction.

The exclusionary provision apparently attempts to make a stark distinction

between personal dissatisfaction of the author and the aberration in displaying or

treating the work which detectable by an objective analysis. But if the author is

satisfied that his work has not been subjected to any dishonour affecting his

reputation, he is not aggrieved in any way. The element of personal dissatisfaction

of the author comes into play when treatment mated out to his the work contrary

to what he considers appropriate. Therefore element of personal satisfaction of the

author cannot be eliminated altogether because it would extend a ground of

defence to the defendant.

i Austins proposition that law must be backed by commands sits comfortably with these positivist. ii See Dworkins supportive logic that Arguments of principle are arguments intended to establish

an individual right. Ronal Dwarkin Taking Rights Seriously p-90 Universal Law publishing Co

New Delhi 2005 iii Berne Convention art 6 bis (i) iv TRIPS agreement specifically provides that Members shall not have rights or obligations under

the Agreement in respect of the rights conferred under Art 6bis of that Convention. v Snow vs Eaton Centre (1982) 70 CPR (2d) 105 (Canada) vi Tidy vs. Trustees of Natural History Museum (1998) 39 IPR 501 vii Amarnath Shegal vs Union of India (2005) Copinger comments that the decision of

the court that the complained act was prejudicial to the reputation of the sculpture may not be

followed in the UK. See Copyright : Copinger & Skone James ed .2011 viii Section 57 of the Copyright Act 1957 read with amendments2012 ix Section 38 A of Act 2012 x Sec 57 of the Act xi Section 2 (d) of the Copyright Act as amended in 2012 specifically mentions that author, in relation

to a literary or dramatic work is the author of the work , the composer is the author of a musical work,

the artist is the author of artistic work, the photographer who takes the photograph is the author of

the photograph and the producer ins the author of cinematograph film and sound recording. xii Authors special rights and moral right, in spirit and meaning are synonymous to each other

permitting inter-changeability under the respective domestic laws. xiii Italics added

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PROBLEMS OF RURAL CONSUMERS

AND THEIR EMPOWERMENT

THROUGH PANCHAYATI RAJ

INSTITUTIONS

ALOK MISRA

INTRODUCTION

"The State shall take steps to organize village panchayats and endow them with such

powers and authority as may be necessary to enable them to function as units of self-

government." (Article40)

In State of Uttar Pradesh v. Pradhan Sangh Kshettra Samitii, the Supreme Court observed

that Article40 does not give guidelines for organizing village panchayats. All that they

require is that the village panchanyats howsoever organized have to be equipped with

such powers and authority as may be necessary to enable them to function as units of self-

government.

The details of Panchayat Raj institutions as political system of local governance are found

in abundance in the history of South-East Asia particularly in the countries of

subcontinent like India, Pakistan, Bangladesh and Nepal. Indian social system has

tremendous vitality. Since racial, religious, cultural, linguistic, geographical and economic

diversity has been coexisting and nurtured since ages, this provides a strong unity to social

system. In simple understanding Culture is day to day pattern of living. In India the

cultural diversity has been maintained as a social policy by the rulers in their polity.

The word 'Panchayat' literally means assembly or Ayat of five or panch elderly and wise

persons. Panchayati Raj Institutions existed, functioned and contributed significantly. It is

important to note that the village panchayats have always been elected bodies and

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functioned as units of local self-government. Gram panchayats are contrastingly apart

and distinct from the unelected khap or caste panchayats prevalent in some parts of

India.

CONSTITUTIONAL AND LEGAL ROLE OF PANCHAYAT RAJ

INSTITUTIONS IN CONSUMER PROTECTION

India is a country with extensive topography, vast geography and consequent economic

diversity. Largest segment of population which is around 70 percent of the population

lives and works hard in rural India. The people in rural areas are engaged in agricultural

and related activities. In independent India the rural economy has rapidly transformed

itself and the economic activities are getting organized very fast. The contribution of rural

economy is significant and it sustains a large section of population in India. Agriculture

and related activities have grown enormously on scientific and technological lines.

Mechanization of agriculture and irrigation has gone a long way. The economic activities

are to be managed and administered in a user friendly manner.

There are more than 72 million consumers in villages and rural India, as per the reports

of various government and non-government organizations. The protection of consumers

in rural areas has become an area of concern. The consumers in the form of farmers and

entrepreneurs are using agricultural inputs and technology to a considerable extent. They

are to be protected. In this the Panchayat Raj Institutions are required to play a vital role.

The powers of these institutions and co-related obligations towards the consumers are

required to be emboldened. It will give a new dimension and role to the functioning of

these institutions. Panchayat Raj Institutions are required to be oriented towards people

and development.

From the second half of the 20th century law rapidly came to be recognized as a tool of

social development and welfare of humanity. The process of social engineering came on

priority. The reforms started coming very fast. It was an urgent requirement to

emancipate people living in Afro-Asia which had been made slums by the colonial powers.

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The object of law is to do welfare of humanity, similar to that of all branches of knowledge

like science and technology, engineering, medical sciences, social sciences, political

science, management science, economics etc. India has been strengthened by various

revolutions in co-operative and private sector like the green, yellow, blue, white and pink

revolutions. These developments are the result of the hard work of the people of India.

There is massive production and consumption of goods and services across India. In all

the four sectors of economy there is rapid rise of consumers.

Mahatma Gandhi emphasized on the establishment and organization of the village

panchayats for the administration and development of villages as a unit of self

government. He clearly believed that India can have a strong economy only when the

villages will be self reliant. His philosophy came to be known as Gram Swaraj. Article40

of the Constitution of India stands explicitly inspired by Gandhian philosophy. It is a

major directive to the State of India in law and policy making.

In pursuance of this directive, Balwant Rai Mehta Committee in Nehruvian era, Ashok

Mehta Committee in Desai era, P.K. Thungan Committee in Rajeev Gandhi era were

major mile stones. The constitutional status of Panchayat Raj institutions by 73rd and 74th

Amendments of the Constitution came during Narsimha Rao era in pursuance of the

dream of Rajeev Gandhi to take democracy to the grass root level. In fact the organized

establishment and constitutional status given to the functioning of these institutions had

become and urgent requirement in the light of the growth of Indian economy as well as

the impact of liberalization and globalization of agricultural and related activities.

By 73rd Amendment of the Constitution Part IX dealing with the Panchayats (containing

Articles 243, 243A to 243O) was inserted. Similarly Part IXA related to the Municipalities

(containing Articles 243P to 243Z, 243ZA to 243ZG) was inserted by the 74th amendment.

For details of the aforesaid provisions Eleventh and Twelfth Schedule were also added in

the Constitution. Detailed provisions defining Gram, Gram Sabha, Panchayat, composition

of Panchayats, Panchayat area, Intermediate level, District level, reservation of seats,

disqualifications for membership, powers, authority and responsibilities of Panchayats,

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power to impose taxes by, and funds of the Panchayats, constitution of finance

commission to review financial position, audit of accounts of Panchayats, elections to the

Panchayats etc. have been enshrined. Similar details with regard to the Municipalities have

also been provided.

Article 243G mentions Powers, authority and responsibilities of Panchayats and clearly

lays down that the Panchayats at appropriate level shall have the responsibilities for the

preparation of plans for economic development and social justice, the implementation of

schemes for economic development including those in relation to the matters listed in the

Eleventh Schedule. Similarly Article 243W and Twelfth schedule enshrine the similar role

of Municipalities.

The Constitution (73rd Amendment) Act, 1992 enshrines a key role for the

Panchayati Raj Institutions related to the 29 subjects such as education, health, rural

housing, drinking water, agriculture etc., as mentioned in the Eleventh Schedule of

the Constitution. States are required to transfer these functions to the Panchayati Raj

Institutions and to devolve funds, functions and functionaries upon the Panchayati

Raj Institutions for discharging these functions. The Comptroller & Auditor General

of India is responsible for exercising control and supervision over the proper

maintenance of accounts and the audit of all the three tiers. The format for

preparation of budget and for keeping accounts is prescribed by C&AG. The

classification of transactions in Panchayati Raj Institutions their budgets and

accounts has been structured on a function-cum-program basis to provide uniformity

in three levels of governance i.e. Union, State and Local Government.

The role of the Panchayati Raj Institutions in consumer education and their protection

is of prime importance in present times. The evolution of law in the field of consumer

protection and the constitutional status accorded to Panchayat Raj Institutions are closely

related. Both of them achieve special significance and meaning in the light of the fact that

India is a country with extensive rural base and a large number of consumers are living in

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rural areas. Rural markets are feeling the impact of globalization and liberalization of law

and economy.

The economic prosperity achieved by the common men in India by their hard and

sustained work has gone a long way in pre and post green revolution era. This

improvement in the economic status has made Panchayat Raj Institutions and consumer

protection more meaningful. Education and awareness in rural areas has increased and is

to be increased further. The thought process of consumers in rural areas is evolving and

getting rationalized resulting into the emergence of better and more rational preferences.

The behavior of consumers in rural areas is becoming systematic and is changing in a

positive direction. In this context the innovations in the field of rural management, science

and technology have played a crucial role. With the generation of massive requirement in

the resurgent nation this is a thrust area in which law related to consumer protection can

not only protect the welfare of masses but also can work as a tool for social development

in conjunction with Panchayat Raj Institutions.

Democracy is incomplete unless the local government and the individual consumers

are empowered. There was a time when consumer came last and was least important

in the economy but now the consumer is the mainstay of empowerment. One of the

major drawbacks of the present consumer protection movement is that it is restricted

to the urban areas. One way to empower the rural population is to empower the

members of Panchayati Raj Institutions and through them the masses. On the one

side there is growing market and on the other side there is manipulation and

exploitation which impairs the interests and rights of the consumers. Consumer

protection and business should proceed together. Markets are to be disciplined with

orientation towards the satisfaction of the interests of consumers.

EMPOWERMENT OF CONSUMERS IN RURAL AREAS

India started transforming itself rapidly with the promulgation of the Constitution. The

Constitution enshrined the Preamble containing objectives of socio-economic justice, the

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fundamental rights for the many fold development of the individuals, and the Directive

Principles of State Policy to usher the era of welfare in India. The establishment of

Planning Commission to be chaired by the Prime Minister, by a Resolution of Cabinet on

15th March 1950 within 47 days of the promulgation of the Constitution was a significant

step. The policy of ceiling i.e. hadbandi on land holdings and bringing scattered peaces of

land i.e. chakbandi were major steps of land reforms. Another significant effort in this

context was of Bhudan and Gram Dan movements by Acharya Vinoba Bhave.

The turning point of transformation of agriculture and rural India came with the green

revolution. The government made signal innovations in the empowerment of simple,

dedicated and honest people in rural India through Community Development Programs

like Food for Work Program, National Rural Employment Program (NREP), National

Rural Landless Employment Guarantee Program (RLEGP), Integrated Rural

Development Program (IRDP), Training of Rural Youth for Self-Employment (TRYSEM)

etc. The legendary Jawahar Rozgar Yojna (JRY) in which the aforesaid programs got

merged and introduction of Perspective Planning were milestones achieved by the

government. Granting of the constitutional status to Panchayat Raj Institutions was the

logical conclusion arrived towards taking democracy to the grass root level. The

empowerment of consumers in rural areas became a visible reality with Insurance of

Agricultural Sector under the auspices of General Insurance Corporation (GIC) and

making available the credit cards, named Kisan Credit Cards. Mahatma Gandhi National

Rural Employment Guarantee Act, 2005 (MGNREGA) also aims to empower the

consumers in rural areas.

The welfare measures as mentioned above have contributed to the general well being,

happiness and prosperity in rural India giving vast purchasing power and emergence of

rural consumers and markets. The role of the banking industry and of NABARD has

helped a lot in this direction. The expansion of cooperative activities in general and of

IFFCO, KRIBHCO and NAFED in particular has been beyond imagination. The HBJ

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(Hazira-Babrala-Jagdishpur) pipe line, rightly named as Gas Ganga has been instrumental

in giving and entirely new dimension to rural economy of Northern India.

The philosophy and aim of Co-operative Federalism is proving itself to be the correct

objective in nation building. The life and life style of rural India has tremendously

changed and getting updated and upgraded. This has narrowed down the gap between

Urban and Rural India. Rural Marketing Association of India (RMAI) and MART are

providing valuable inputs in this direction. The income in rural areas and of rural

consumers is on the rise as is visible from enormous growth in rural marketing

operations. The rural share of popular consumer goods and durables is also rapidly

rising. The growth and potential in rural markets is enormous and significantly more

as compared to Urban markets.

The Pharmaceutical Revolution at the dawn of 21st century popularly came to be

known as Pink Revolution has made India the largest manufacturer of medicines in

the world. The medical facilities have reached rural India vertically and have spread

horizontally making it a thrust area in rural markets. Significantly Pink Revolution

has occurred in private sector. Indian economy is rapidly transforming itself into a

global economy with the arrival of patenting in the field of agricultural research and

development.

The invention of Internet led to Information Technology Revolution, ultimately bringing

Cell Phone as a necessity in the hands of most of rural consumers. Requirement and

availability of mobile phones, computers, internet connectivity, laptops, palm tops and

information highways have changed the form, shape, nature and extent of consumer

markets in rural India generating remarkable potential changes and growth. Super

conductivity and Optical Fiber Technology has contributed a lot towards Rapid Transit

Transportation Systems and Tele Communication Technology. The construction of

extensive road networks has generated usage of automobiles on a large scale in rural

India. Automobiles have given wheels to the people of rural India. Their life has become

faster and business oriented.

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PROBLEMS OF CONSUMERS IN RURAL AREAS

Rural consumers in emerging market countries are among the largest and fastest

growing segments of the world's population. Rural India is growing at a fast speed

and is a potential market for the goods and services. The extent of rural markets in

rural India is expected to be doubled than that of urban India. Liberalization

resulting into Globalization, rise in income, expansion of media and information

technology in rural areas, women empowerment, improvement in infrastructure etc.

are some of the catalysts for the growth of rural markets.

With the growth and expansion of rural market at such a fast pace there is a

consequential and simultaneous rise in the problems and grievances. The major

difficulties and problems of consumers in rural areas are lack of awareness,

adulteration, less and incorrect weighing and measuring, quite often absence of

safety and quality in equipments, defective goods and deficient services,

misrepresentation and unfair assurances, misleading warranties and guarantees, high

pricing, cheating in the form of spurious and mirror image goods and malpractices

like selling on more than prescribed minimum retail price, faulty weights and

measures, deficiency in services, misrepresenting advertisements etc. The six

sensitive areas in consumer protection are related to Credit Cards, Milk production

and supply, Banking, Travel, Telecommunication and Consumer goods.

The reality is that the conditions are unfavorable for the consumers. They stand

exploited. Ignorance is an important factor in the exploitation of the consumers

especially in the rural areas. With economic reforms the market is gradually being

transformed from a predominantly sellers market to a buyers market where choice

of the consumers depends on their awareness level. Consumer rights could be

protected in a competitive economy only when right standards for goods and services

are ensured by evolving a network of institutions and legal protection system. To

ensure consumer welfare is the responsibility of the Welfare State.

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Even a manufacturer or provider of a service is a consumer of some other goods or

services. If both the producers and consumers realize the need for co-existence,

adulterated products, spurious goods and other deficiencies in services will get

reduced.

The rural consumer remains disadvantaged as their right to information, choice,

redress, education and to be heard are not sufficiently fulfilled. There is need for the

improvement in the existing consumer protection and consumer welfare polices for

meeting the specific requirements of rural consumers more effectively. Indian

consumer is also to be protected from wrong influences which some times come

from the media.

In fact Mahatma Gandhi had rightly said that a consumer is the most important

visitor on our premises. He is not dependent on us, we are on him. He is not an

interruption to our work; he is the purpose of it. We are not doing a favour to a

consumer by giving him an opportunity. He is doing us a favour by giving us

opportunity to serve him. As per the Gandhian thought the consumers and producers

were not looked as separate individuals. The process of production was supposed to

be decentralized and distributed in parity. In consumer protection movement there is

need of emphasizing and resorting to Gandhian values with decentralization as a

policy for protecting all, including consumers.

The benefits of the decentralization must be able to reach the poorest of the poor. As

Mahatma Gandhi clearly observed Whenever you are in doubt or when the self

becomes too much with you, apply the following test: Recall the face of the poorest

and the weakest man whom you may have seen and ask yourself if the step you

contemplate is going to be of any use to him. Will he gain anything by it? Will it

restore him to a control over his own life and destiny? In other words, will it lead to

Swaraj for the hungry and spiritually starving millions? Then you will find your

doubts and your self melting away.

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EMPOWERMENT OF REDRESSAL MECHANISM

Protection connotes that someone is there as protector and protected. Consumer

Protection Act, 1986 aimed to provide better protection to the consumers.

Consequently consumer movement acquired momentum. It provides three tier

structure from district to national level for the redressal of consumer grievances.

The Act enshrines consumer rights which are internationally accepted. The Act

provides for simple, speedy and inexpensive redressal to the consumer grievances

against defective goods, deficiency in services including the restrictive and unfair

trade practices.

An enlightened consumer is an empowered consumer. An aware consumer not only

protects himself from exploitation but brings efficiency, transparency and

accountability in the production of goods and services. It is important that top

priority be accorded to Consumer Education, Consumer Protection and Consumer

Awareness. The Consumer Protection Act, 1986 applies to all goods and services

unless specially exempted by the Central Government, in all sectors whether Private,

Public or Co-operative.

A person can make a complaint if he is not satisfied with the standard of service

which has been provided to him. Anyone who feels that he was provided a poor

service or is not satisfied with the product or the service can make a complaint in the

Consumer Court. Consumer complaints are legal methods for expressing

dissatisfaction with regard to a service or product. It is the legal way of filing a claim.

The important rights of consumers are Right to Safety, Right to Information, Right

to Choice, Right to be heard, Right to Redress and Right to consumer education etc.

Every body is using goods or services in day today life and is a consumer. However,

the reality is that the conditions are not favorable and conducive for consumers. They

are being exploited and cheated especially in the rural areas. For this the consumers

are to be made aware of various aspects and their rights. The best way to educate the

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rural consumers is to hold the meetings of Gram Sabha regularly which are

generally attended by most of the villagers.

The task of consumer protection has three basic dimensions. First, to ensure a legal

framework of legislations related to consumer protection. Secondly, to evolve

standards so that consumers are able to exercise their choice amongst different

products. Standards are the essentials for quality and play a key role in consumer

protection. Standards are technical specifications of usage of proper

terminology, codes of practice and procedures and of management systems. Thirdly,

awareness of consumers and their education for protection is very important. How to

educate the rural masses still remains a challenging task.

Some significant measures are visible in this direction Multi-media publicity

campaigns have been launched through print and electronic media on the issues

which are very relevant such as putting ISI marks, Hallmark, Labeling, MRP,

etc,. Advertisements are now released through a network of national as well as

regional newspapers. The Department of Consumer Affairs has video spots of 30

seconds duration on various consumer related issues, which are being telecast

through Cable and Satellite channels. Special programs have also been telecast on

Lok Sabha TV and Doordarshan to highlight the issues relating to consumer

awareness. Issues pertaining to rural and remote areas have been given prominence

in the various advertisement spots.

Consumer Protection Act, 1986 has its own limitations. Although it is providing

protection to the rights of consumers yet it requires to be revisited in the light of

extensive changes during last two decades.

The disputes redressal mechanism related to consumers operates through consumer

forums. They exist at district, state and national level to redress the complaints of

consumers. The Consumer Forum is bestowed with the power to order replacement

of the commodity or removal of deficiencies in goods and services or refund of

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payment. It can also award compensation for loss suffered. The three-tier system of

consumer forums under the Act reaches to urban areas only. It is difficult for rural

consumers to reach the forum. The extension of the consumer forum in rural areas

will give relief to consumers.

Consumer forums and Lok Adalats organized by them are required to reach villages.

In this regard there is a significant role for the Panchayat Raj Institutions in

protecting the rights and interests of rural consumers. Easy and available remedy

will ensure further participation of people in rural areas in the growth and change of

rural and semi-urban India. The Gram Panchayats are viable constitutional

mechanism present across India. Through this constitutional mechanism the

consumer movement can be made effective and awareness among rural consumers

can be spread. In this context required amendments can be made to establish

consumer forums at Gram, Block and District level.

The Gram Panchayats can play a crucial role in spreading awareness. Information

Technology and both print and electronic media can be used for this purpose. The

relevant literature in this regard in languages of the people can be extensively

circulated in hard as well as in soft versions. The Gram Panchayats can use media in

the form of documentary films. Street plays can also go a long way in spreading

awareness. The teachers and students can do wonders in taking the consumer

awareness programs at every door of villages.

Involvement of academicians and researchers in consumer movement is of vital

importance. Till now there is not much of the involvement of teachers, students,

researchers and educational institutions in generating awareness about the problems

of consumers and their protection. There is a need to encourage teachers and

students to take up this cause in rural areas. Active participation of the consumers in

awareness drives can ensure consumer welfare.

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There is need of improvement in infrastructure of the Consumer Forums, sufficient

allocation of funds in budget for their effective functioning and for consumer

protection and welfare, provision for training of staff, and members of the Consumer

Forums and provision of necessary legal aid to the consumers in order to enable

them to defend themselves.

CONCLUSIONS AND SUGGESTIONS

In a democratic system people are required to be made active participants in the process of

governance and development. This helps in strengthening the democratic fabric and

processes consequently developing the sense of belonging in people. It also ensures

utilization of the knowledge and experience of the people as a human resource. In this

way people develop skills also in them to contribute and accelerate the process of

development. Decentralization and devolution of legislative and executive powers is the

primary requirement of resurgent nation. Earlier village assemblies resolved disputes

between individuals in villages. Now the Constitution and law has decentralized and

delegated several administrative functions to the local level. This has empowered

elected Gram Panchayats. This decentralization of the aforesaid powers and functions

with regard to such a huge population is historical in the history of humanity. C.

Rajgopalachari rightly opined 'A knitting together of people's hearts makes democracy'.

The rights of consumers are to be protected in every sector and especially of the rural

consumers. The Panchayat Raj institutions are required to be made the pivotal agencies in

educating and protecting the consumers through policy making. The active involvement

and participation from the Union and State governments, the educational

Institutions, the NGOs, the print and electronic media and the adoption and

observance of a code of code of professional conduct by the trade and industry and

the citizens charter by the service providers is necessary for the success of the

consumer movement.

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Impact of participation of women as functionaries in Panchayati Raj Institutions is

significant. It has enhanced their self-esteem, confidence, decision-making ability,

respect within the family and in community. Their voice has increased in decisions

related to economic matters and other issues in their family. Women who received

training have performed better. It should be organized regularly covering rules and

regulations, administrative issues, budgeting, finance and the implementation of

development schemes.

The need of the hour is for total commitment to the consumer cause and social

responsiveness to consumer needs. It is important that this should proceed in a

harmonious manner. The majority of consumers in India are not aware of their

rights and existence of the consumer forums. The access to consumer forums is not

available to them due to numerous factors in general and absence of the network,

branches and benches of consumer forums below the district level in particular.

Many a times the consumers suffer financial injuries. Although there is Indian

Contract Act of 1872 yet there is no comprehensive legislation like Indian Torts Acts

till now. The codification and enactment of Indian Torts Act which is pending since

British times is urgently required for the fair justice with regard to civil wrongs. The

doctrine of caveat emptor and caveat vendor are required to be in balance. The calls

like Jago Grahak Jago have reached in every household as a result of the awareness

campaigns undertaken during the recent past. The State has endeavored to inform

the common men of their rights as a consumer. Consumer awareness initiative in

rural and remote areas should find top priority in governance.

Now, the Fundamental Right to Education in Article 21A of the Constitution is set to give

a further fillip to consumer protection movement. MGNREGA is a movement towards

making Right to Work a fundamental right and actualizing the directives of law and

policy making as mentioned in Article41 of the Constitution. Major concern in this

direction is of corruption, financial misappropriation of funds and lack of commitment

towards the cause. The issue is of humane governance and not simply of good

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governance. For this socially responsible skilled professionals are to be produced as their

end products by universities, which are sanctuaries of the nation, its happiness and

prosperity.

In the end it is to be appreciated and kept in mind that although Panchayat Raj

institutions can play a crucial role in policy making and their implementation yet the

judicial function in the adjudication of disputes can not be given to them because

that will go against the principles of natural justice. Since huge finances are and will

be involved in development, in many cases Panchayat Raj institutions will be a party

in disputes. So they can and should not be a judge in their own cause. Awareness,

expansion and availability of the network of consumer forums below the district level

shall be the right mechanism.

i AIR 1995 SC 1512.

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E-CONTRACTS: MAIL BOX RULE AND LEGAL

IMPACT OF THE INFORMATION TECHNOLOGY

ACT, 2000

ATUL KUMAR PANDEY

The principles governing the E-contracts are based on the traditional law of contracts.

According to section 10, of the Indian Contract Act, 1872 essentials of a contract

include:

1. Parties competent to contract

2. Existence of consent of parties

3. Consent being free

4. Existence of consideration

5. Consideration and Object being lawful

6. The agreement does not being expressly declared void.

However, before ascertaining whether a contract is valid or not, it is important to

ascertain whether a contract has been concluded at all. A contract is formulated

when the offer is communicated by the offeror to the offeree and the same is

accepted by the offeree, whether expressly or by implication. The key to

understanding electronic contracting is that is to regard the Internet simply as

another tool of communication. Until now, new modes or tools of communication

have been adequately incorporated into the legal system for example the telex or the

fax machine. In theory, therefore law is capable of dealing with the issues raised by

electronic means of communication.

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COMMUNICATION IN ELECTRONIC FORM AND E-CONTRACT

ISSUES:

An offer or acceptance, like any other expression of will or intention, may be

communicated by any means, including by messages in electronic form (called

electronic record in Information Technology Act, 2000). The provisions of Indian

Contract Act, 1872 are wide enough to cover such transactions. In the context of

contract formation, unless otherwise agreed by the parties, an offer and the

acceptance of an offer, or either of them, can be expressed by means of data

messages or electronic records.

Where electronic records are used in the formation of a contract, that contract shall

not be denied validity or enforceability on the sole ground that data messages was

used for that purpose according to provisions of Section 10 A of Information

Technology Act, 2000. As between the originatori and the addresseeii of the electronic

record, a declaration of Will or other statement should be valid, effective and

enforceable even though it is in the form of a data message.

1.1 IS ONLINE CONTRACTING INSTANTANEOUS?

One might express the view that email and other methods of online contracting are

instantaneous communications and that the general acceptance rule should apply to

their acceptances. In fact, this argument may be true in respect to website

acceptances since there is no actual space in time between the sending and the

acceptance of the offer. But, contracting through email messages is different than

that happens in website contracting and hence cannot be treated as instantaneous

communication.

HOW DO PEOPLE CONTRACT ONLINE?

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To determine when to treat online contracting instantaneous and when not, we need

to understand methods of online contracting. There are two main methods: click

wrap and e-mail.

A. Click-wrap: Click wrap contracts are most commonly found in the workings of the

World Wide Web. The usual formation of such a contract begins with the web vendor

placing information about a product on the web. This information could be in the

form of an advertisement, an invitation to offer, or an offer of a product or service for

the due consideration. There is usually a hypertext order form within close electronic

proximity which the consumer fills out and this form will contain a button labeled I

Accept, Submit, Purchase or some such phrase. When the computer clicks on this

button, the order is sent to the vendor, who usually reserves the right to proceed or

not to proceed with the transaction. In many instances, however, the order will be a

processed automatically and in this respect, it is similar to a purchase in real world.

Communications in the manner described above, will be treated as instantaneous.

However, the situation is different with regard to contracting through email.

B. E-mail: The text of email messages is the digital equivalent of a letter. E-mail

without being in existence physically, is still capable of performing all the functions

of a usual email. It can be used to send offers and acceptances. However, because of

some technical reasons e-mail delivery systems is different from standard mail

delivery system and this creates complications for e-contracting. To understand the

complications, first we need to understand how an e-mail is transmitted.

HOW IS E-MAIL TRANSMITTED?

A user who has an email account can draft a message that he is going to send

without having a connection to the internet. After the user creates this message on

the senders computer the first stage of the e-mails journey starts when he opens the

connection to the internet server provider (ISP). The second stage occurs at the

moment the sender actually presses the send button, which, so long as the network is

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not busy and the receivers email address has been correctly entered, transmits it

along the international network of computers until it reaches the intended receivers

ISP. From the ISP the email enters the internet where it may bounce from a

minimum of one computer to many millions, before reaching the ISP of the receiver.

The recipient will then be able to retrieve the message by logging onto their ISP and

downloading the message.

In fact, the e-mails journey, while travelling through the internet, may involve

travelling across the world even though the person receiving the message is in the

next building. This journey takes a moment, sometimes minutes, until the recipient

receives the email message. This fact does not differ even, if the internet service

provider for the offeree is the same as for the offeror, as would be the case if they are

members in the corporation or the university email network. This is because the

transmission of email through the network depends entirely on the viability of the

ISP for the offeree or the offeror.

For example, if the offeree is in London and the offeror in New York, then the

journey should start from Londons internet service provider of the offeree and go to

another network service provider in the Atlantic and perhaps it will then need two or

more connections prior to it reaching the offerors service provider in New York. The

speed of email messages depends, in these cases, on whether one or more of these

service providers are busy with millions of applications from other internet users.

Considerable delays may occur in email communication between when a message is

sent and when it is received by the recipient. These delays result from the complex

path over which the email is sent. For example, if person A in London sends an email

message to person B in Nigeria, usually there will be no direct link between the

computer systems. This explains why, on occasion, an email takes a longer time than

usual to reach the recipient

It can be said that email is not an instantaneous form of communication, because as

explained previously, there can be gap in time between dispatch and deemed receipt.

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This conclusion was recently pointed out in a Singapore case, in the judgment of

Rajah JC, in Chwee Kin Keong v Digilandmall.com Pte Ltdiii unlike a fax or a

telephone call, it is not instantaneous. Emails are processed through servers, routers

and internet service providers. Different protocols may result in messages arriving in

an incomprehensible form. Arrival can also be immaterial unless a recipient accesses

the email, but in this respect email does not really differ from mail that has not been

opened.

Usually, an acceptance is considered as having been sent at the time the acceptance

went out of the possession of the offeree and into the possession of the third party

allowed to receive it. The third party, of course, is neither an agent of the offeree nor

of the offeror, but in the situation of email, it is the ISP. Even though the offerees

server is not under the offerees control, it is considered a provider for the internet

service to the offeree and likewise, it is not agent to the offeree, as it is an

independent entity, such as a company server or a university service provider.

In transmission of the acceptance through email, the message is considered to be out

of the offerees position at the time the offeree connects to the internet and presses

the send button. The offeree may receive acknowledgement that the message is

successfully sent (if this acknowledgement is available in his email system),

otherwise the offeree will receive a message in his mail box system, indicating a

failed delivery notice of an email which has not been successfully transmitted. There

are times when a computer freezes upon sending a message, the offeree should at

that time resend the email, because the message may not have been sent or may

have been altered when it was frozen. Clarifying the moment of dispatch by time can

be ensured by looking at the time of sending of the email, is recorded by the ISP and

can be found by looking in the offerees account. This time usually corresponds with

the time which appears on the senders computer at the time of sending the email.

Some email accounts embody a universal GMT timing of the provider of the email

account itself. There is also the provision of time-stamping authority in Information

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Technology Act, 2008. Time-stamping is the process of securely keeping track of the

creation and modification time of a document.

INVITATIONS, OFFER AND ACCEPTANCES

Before we further investigate the details of electronic contracting we must consider

whether these contracts are actually legal and binding. In general, the contract law

will enforce any form of contract supported by consideration, whether oral or written,

formal or informal, as long as the intention of the parties can be clearly discerned to

create legal relationship. If it satisfies, the essentials of the contract according to sec

10 of Indian contract Act as specified at the beginning of this unit, it will be

enforceable. Thus, there are no reasons in principle and legally to prevent the

enforcement of electronic contract.

A contract is formed when there is meeting of mind between the parties. This is

usually found in clear and unambiguous offer followed by similarly clear and

unambiguous acceptance. An important distinction needs to be made here between

an offer, an invitation and an advertisement. A offer is a proposed set of terms which

can form the basis of a contract. An invitation to treat is simply an invitation to make

an offer for a product or service. Hence, an advertisement, as a form of an invitation

to treat, also acts as carrier to information upon which contracting decisions might be

based. Significantly, an offer will always contemplate acceptance and therefore it

must always be something capable of being accepted.

This is particularly important in the Internet context because the distinction between

advertisements, invitations to treat, and offers included in websites are often blurred

by vendors. If there is an offer, an affirmative response means that a contract is

formed. If a statement looks like an offer but it is not capable of being accepted, it is

only an invitation to offer, and then an affirmative response is only an offer. A well-

established real example of an invitation to offer can be found in supermarkets.

Goods on the shelves are presented by the shop as an invitation to offer, and goods

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subsequently being taken to the cash counter and presented by the shopper is treated

as an offer.

Applying these principles to the World Wide Web, the electronic proximity between

the advertisement on web and the actual point of sale is likely to render the status of

a message closer to an invitation to offer in a shop than to an advertisement that we

might see in a magazine. Hence, a consumer who clicks on a form in a click wrap

situation is generally making an offer and the vendor will be the party accepting the

offer. This, of course, is not universally the case, as it is quite possible for a vendor to

make a clear and unambiguous offer on the World Wide Web and the consumer,

through the click of the mouse, accepts the offer.

TERMS OF A CONTRACT

Terms can be incorporated into a contract in a number of ways. A contract can

contain these three distinct types of terms:

Express terms

Terms incorporated by reference

Implied terms

Before a contract can be formally concluded all the terms of the contract must be

brought to the attention of the parties. Otherwise, there cannot be a meeting of

minds. This is crucial both in terms of both e-mail and click wrap contracts. In the

former, parties must take care to avoid contradiction and confusion if negotiations of

terms are held using e-mail; this is especially so if the negotiations are lengthy.

Parties must also take care to identify the documents which are intended to form part

of the contract. In the event that terms of a contract are imprecise, the effect of the

contract may be substantially altered through a different interpretation of the terms

of the terms from that originally intended. In the case of click wrap contracts, web

site designers must take care to ensure that all terms are brought to the attention of

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the consumers before they are presented with the opportunity to purchase a product.

Often the terms of click wrap contracts are incorporated by reference.

Incorporating terms by reference is most important for click wrap contracts. This

means that the terms of the contracting parties are set out in different document and

incorporated by reference. In click wrap contracts, the terms and conditions of the

contract are usually located on a separate web page, rather than being embedded in

the contract page. The problem is that both parties must know that these terms are

part of the binding contract. The vendor must take all reasonable steps to bring the

terms to the attention of the other party. As advertisements on web are invitations to

offer and not contracting documents, the potential customers would not expect to

find terms and conditions of contract contained in the web advertisements.

Hence the design of the web site must be such that before the consumer has the

opportunity to click Submit or I Agree, the terms must be clearly brought to his or

her attention. The onus is upon the web designers to enure that consumers read and

acknowledge the terms and conditions. In order to do this effectively, the usual

practise has been to require consumers to tick a box or clicks on the

acknowledgement that the terms and conditions have been read. If the consumer

checks the box or clicks on the acknowledgement, the terms will be incorporated,

regardless of whether they have been actually been read. If this is not done, the

purchase order or other agreement will not proceed.

Implied terms usually arise separately from the contract formation process and are

usually localised. This means that, in the event of a dispute, the governing law of the

contract would be a central concern, as would be the type of contract at issue. So this

becomes removed from the method of contract formulation in general. Terms may

be implied by fact, on the basis of customs or usage, or by construction of the

contract. Questions of implied terms are case-specific and will turn on the particular

relevant laws of a particular jurisdiction, such as unconscionable conduct or business

efficacy or on the subject matter of the contract.

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FORMATION OF A CONTRACT AND THE POSTAL

ACCEPTANCE/MAILBOX RULE:

The final step to understand e-contracting is the issue of when and where the

contract is formally made or concluded. The general rule is that contract is made

when acceptance is communicated from the offeree to the proposer/offeror.

Accordingly, there is no contract where the acceptance is not communicated to the

proposer, the reason being that it would be unfair to hold proposer by an acceptance

of which he has no knowledge. The location of the formation is decided according to

where the offeror receives notification of the acceptance. However, there is well-

known exception which was made to facilitate contracting between the parties at a

distance- The postal acceptance rule.

PARTIES AT A DISTANCE

When parties are in the presence of each other, the proposer and the acceptor knows

that the acceptance has been communicated, if they are at a distance, they depend

upon other modes of communication. The modes used may be instantaneous,

namely telephone, telex etc. or they may choose other modes like post, courier,

telegram, fax or email.

The conclusion of distance contracts has been one of the controversial issues in the

law of contract formation. It raises some question marks, especially with regard to

the type of rules that should govern the timing of contract formation. More

specifically, a strong debate has been emerged recently as to whether the postal

acceptance rule may apply in respect to contracting through electronic medium like

email.

First, it has been argued that the postal acceptance rule applies to the Internet

because the communication has been entrusted to a third party such as ISP acting as

a parallel to postal system. Second, it has been argued that the reason for the

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application of postal acceptance rule applies because the system of Internet is similar

to postal delivery and hence is non-instantaneous form of communication.

NON-INSTANTANEOUS MODE OF COMMUNICATION AND

FORMATION OF CONTRACT: EVOLUTION OF MAILBOX RULE

The postal acceptance or mailbox rule was first established in the case of the court of

Adams v Lindselliv when the court had to decide the moment of contract formation

by post. The court found that parties when communicating acceptance by post were

not sure at the precise time the acceptance had been communicated. As postal

communication is subject to delay, the parties could not be simultaneously aware of

the communication. This created a number of problems and has led to a formulation

of the rule. This rule as accepted in the common law legal systems is: Where the

circumstances are such that it must have been within the contemplation of the

parties that, according to the ordinary usages of mankind, the post might be used as a

means of communicating the acceptance of an offer, the acceptance is complete as

soon as it is posted.v

The uncertainty regarding the moment of contract formation does not happen in the

environment of face-to-face communication or even in distance contracting where an

instantaneous method of communication is used. In this kind of contracting, all

parties are aware of contract conclusion and they do not face problematic issues such

as delay or failure of transmission which occur in non instantaneous

communications.

In contrast, the case of Adams v Lindsell, adopted the rule to avoid the extraordinary

and mischievous consequences which could follow if it were held that an offer

might be revoked at any time until the offeree was in the position of accepting it had

been actually received.vi This justification for the postal rule appears to provide the

best solution in determining the time that the parties reach consensus ad item and it

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was felt, that at the time of posting the letter, there would be a greater chance of a

meeting of minds occurring than at the later time when the letter was delivered.

Another reason has been suggested for the validity of this rule, is that the offeror

must be considered as having made the offer throughout the whole time that his

offer is in the post, and that therefore, the agreement between the parties is complete

as soon as the acceptance is posted. This idea depends on the assumption that the

offer creates a power that binds both parties and that an acceptance is an exercise of

that power. Consequently, the offeror has, in the beginning, full power to determine

the acts that are to constitute acceptance. However, after the offeror makes that

determination, the legal consequences are out of his hands because an offer has then

become effective and the offeree has an advantage over the offeror in the contract

formation process. The offeree may need additional time to decide whether or not to

accept the offer and during that time, may need to spend money and effort in

reaching to a decision.

JUSTIFICATION OF MAILBOX RULE

It can be said that this rule is effective as it is takes care of both of the business

convenience of the offeree and the fair allocation of risk, as it establishes a finite date

for the contract and avoids circular communication. Any delay which occurs between

sending and receiving post letters creates potential risk for both of parties due to the

uncertainty as to preciously when the message is deemed to have been received. This

justification may be considered as the corner stone for application of the postal

acceptance rule.

For example, if the offeror asks for notification, then the offeree would need

notification of the receipt and so on. Another way of illustrating this is demonstrated

if we consider that A is required to receive B's acceptance, then B should have the

right to receive notification from A, that the acceptance was received, and A should

have the right to receive notification from B, that the notification of receipt of the

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acceptance was received and so forth. Carrying this on to its logical conclusion,

putting the risk in the hands of the offeror would appear logical since it is he who is

the master of the offer and he is the position to for or stipulate a specific action in

order to be exposed to the potential risk. vii

The mailbox rule is further justified on the ground that it limits the power proposer

to revoke the proposal after the offeree has acted upon the offer. The rule is justified

on the basis of commercial convenience.

These traditional justifications have been argued in respect to post contracting since

as we explained above there is a gap of time and a delay between sending a letter and

receiving it and parties are not in a position that they can control transmission of

letters by post. Thus, it can be argued that if electronic contracting is similar to

contracting by post then the postal rule should be applied to electronic acceptances

like emails.

Under the UNDROIT principles, acceptance is complete when it reaches the offeror;

the reason for adoption of the receipt principle being that the risk of transmission is

better placed on the offeror than on the offeree, since it is the former who chooses

the means of communication, who knows whether the chosen means of

communications is subject to special risks or delay and who is therefore able to take

measures to ensure that the acceptance reaches its destination.viii

Another important reason for applying the postal rule is that it avoids any business

uncertainty regarding the timing of email contracts. For example, applying the

general rule will create uncertainty in what is the definitive time of considering the

email formed. If A sends his email acceptance late Friday afternoon and the recipient

B, left his office at lunchtime not to return until the following Monday, at what time

can we consider the time of receipt? Is it on Monday morning when B returns to work

or at any time when the B opens his email account and accesses the particular email,

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even if it was out of the working hours? In fact, applying the postal rule will avoid

such uncertainty and create a definite time regarding to email contract conclusion.

Email is considered to be a non-instantaneous method of communication and

therefore subject to delay. Contracting by email has been considered as the digital

equivalent of the postal system. According to the difficulties with the transmission of

email, delays, failure of networks, hacking by third parties or incorrect email

addresses of intended recipients, may delay or prevent the delivery of an email. They

suggest therefore, that risk of non-delivery of the email, as with the ordinary post,

should lie with the offeror. Nevertheless, it should be kept in mind that similar issues

of delay identified in relation to telexes are similarly applicable to email. In fact, no

universal rule can cover all situations. These possibilities were not sufficient to

persuade courts to find that the general rule of communication should be displaced.

Likewise with email, the mere possibility of delays, incorrect addresses or

technological failures may not be sufficient to create a universal rule that an email

acceptance is effective at a time other than communication.

Generally, courts tend to apply the general rule in cases where there is an

instantaneous method of communication, such as the telephone or the EDI or where

they are virtually instantaneous and direct, such as telex. In the case of Entores Ltd. v

Miles Far East Corporationix , the court concluded that the contract was made when

the acceptance was received by the plaintiffs in London because:

...So far as telex messages are concerned, though the dispatch and receipt of

a message is not completely instantaneous, the parties are to all intents and

purposes in each others presence just as if they were in telephone

communication, and I can see no reason for departing from the general rule

that there is no binding contract until notice of the acceptance was received by

the offeror.

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Where the acceptor uses the telephone or telex for communication, the acceptor will

generally know if his communication has not reached the proposer and can try to

send it again. The rule is sound and practical because the oral acceptance may be

drowned by the noise of a flying aircraft or the telephone may go dead. The Supreme

Court of India, in Bhagwandas Goverdhandas Kedia v Girdharilal Purshottamdasx

has held that in case of oral communication or by telephone or telex, an acceptance

is communicated when it is actually received by the proposer.

It seems that the justifications for applying the postal rule in the age of post may be

valid to be analogized to a new method of communication, such as the email. Email

cannot be considered as an instantaneous method of communication, since there are

some delays and gaps between sending and receiving messages. Parties do not

communicate instantaneously between one other. In contrast, there is much greater

clarity regarding the application of the general rule to website acceptances. Having

examined the basis of the development of the postal rule and applying the reasoning

above, the logical conclusion would be that contracts based on e-mail acceptances do

benefit from the postal rule application.

SUMMING UP

When postal rule is applied to e-mail technical consideration come to the fore. The

fact remains that e-mail is not instantaneous, the packets may not all arrive there

may be congestion on the networks, some of the servers may malfunction and so on.

E-mail is also fragmented when compared to a telephone call and the sender has no

way of knowing whether the receiver will actually get the message.

In relation to click wrap a different method is involved. The communication between

the web client and the server is instantaneous. If the communication between the

parties is broken for whatever reasons, the other party will be immediately notified.

This is due to the built in self-checking mechanism known as checksum. Therefore,

when dealing with click wrap contracts, the postal rule is not applicable as compared

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to e-mail contracting because the line of communication in click wrap is continually

verified, which implies that a communication once sent will be instantly received.

APPLICATION OF MAILBOX/POSTAL ACCEPTANCE RULE TO

ELECTRONIC CONTRACTS- LEGISLATIVE DEVELOPMENTS IN US

AND UK

Even though the electronic commerce legislation, in the UK and the US, do not aim

to provide substantial changes to the rules of contract formation, particularly

regarding email contracting, they do provide clarification of the contracting process,

especially in contracting through websites.

A. Position in US

The US laws are active in determining the time and place of dispatch and receipt of

Electronic Commerce has the same approach as the Uniform Electronic Transactions

Act (UETA) as a main source, US legislation relating to this discussion reject the

application of the postal acceptance rule for electronic transactions and adopt the

general rule (receipt rule), for the acceptance to be effective. The reasons for this are

firstly, in the US, the application of the general rule depends on whether the method

of communication is instantaneous or substantially instantaneous as two-way

communication. For example, in cases regarding contracting by fax or telephone,

even though the parties are not in physical proximity of one another, the general

rule is applied to these types of communication. Since email cannot be described as

direct and instantaneous communication thus it cannot be within this argument.

Secondly, US laws, especially the UETA, clarifies the moment when a message is

considered as having been received by the recipient and when it could be accessible

in order to be received. The UETA contains a section entitled Time and Place of

Sending and Receipt, which states that an electronic record is deemed to be sent

when it is properly addressed or directed to another recipient, is in a form capable of

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being read by the other parties' system and when it is out of the control of the sender

but however, it does not establish when the acceptance becomes effective and the

contract is formed.

Additionally, subsection 15(b) of the UETA, states that an electronic record is

deemed received when it enters an information processing system designated by the

recipient for receiving such messages (e.g., home office), and "it is in a form capable

of being processed by that system." This Section closely follows Art 15 of

UNICITRAL Model law.

The Uniform Computer Information Transactions Act (UCITA) 1999, which is

uniform commercial code for software licenses and other

Rostrum's Law Review, Vol I, Issue IV

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