Successful Resolution Applicant cannot substitute itself – NCLAT Delhi

Introduction

The Principal Bench of the National Company Law Appellate Tribunal in New Delhi (“NCLAT”), in an order dated 01.03.2024, dismissed an appeal by UV Asset Reconstruction Company Ltd. against the rejection of its application by the National Company Law Tribunal in Mumbai (“NCLT”). This piece will give a brief overview of the background facts of the case[1], the final decision by the Tribunal, and its implications in the larger context of the corporate insolvency resolution process (“CIRP”) as envisaged under the Insolvency and Bankruptcy Code, 2016[2] (“IBC”).

Brief Facts

UV Asset Reconstruction Company Ltd. (“Successful Resolution Applicant”/ “SRA”) submitted a resolution plan for Aircel Ltd., the corporate debtor, which was approved by both the Committee of Creditors and the NCLT. At this juncture, the Reserve Bank of India (RBI) issued a notification[3] mandating that Asset Reconstruction Companies (“ARC”) should have a minimum Net Owned Fund (“NOF”) of 1000 crore rupees in order to act as resolution applicants under the IBC. As the SRA did not meet the same criterion, it filed an application before the NCLT in order to substitute itself with another entity.

However, the NCLT dismissed the application[4] by placing reliance on Ebix Singapore (P) Ltd. v. Educomp Solutions Ltd.[5], wherein the Supreme Court held that “NCLT cannot do what IBC consciously did not provide it the power to do.” Further, the NCLT reasoned that the SRA would have no right to modify the resolution plan post the approval by the Committee of Creditors. Aggrieved by said order of the NCLT, the SRA preferred an appeal to the NCLAT, giving rise to the instant case.

Decision

The NCLAT dismissed the appeal while upholding the NCLT order. While the NCLAT did not consider the substitution of resolution applicant post approval as a sound remedy within the framework of the IBC, it recognized the difficult situation of the SRA. As such, the NCLAT advised both the SRA and the Corporate Debtor’s Monitoring Committee to file appropriate applications before the NCLT to find a path forward.

Conclusion

The decision of the NCLAT reiterates the strict confines within which the Tribunals must function while deciding cases relating to CIRP. Reasonable alternatives within the mandate of the IBC must be explored by all stakeholders within the CIRP hand-in-hand with the Tribunals. However, the decision also considerably limits the wiggle room afforded to successful resolution applications that may end up in unforeseeable circumstances and could lead to wantonly lengthening the resolution process.

Author : Archit K. P, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at IIPRD

References

1. UV Asset Reconstruction Company Ltd. v. Aircel Ltd., Company Appeal (AT) (Ins.) No. 333 of 2024, decided on 01.03.2024 (NCLAT).
2. The Insolvency and Bankruptcy Code, 2016.
3. Reserve Bank of India, Review of Regulatory Framework for Asset Reconstruction Companies (ARCs), RBI/2022-23/128 (Notified on October 11, 2022).
4. UV Asset Reconstruction Company Ltd. v. Aircel Ltd., IA No. 1403 of 2022, decided on 21.12.2023 (NCLT).
5. Ebix Singapore (P) Ltd. v. Educomp Solutions Ltd. (CoC), (2022) 2 SCC 401.

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[1] UV Asset Reconstruction Company Ltd. v. Aircel Ltd., Company Appeal (AT) (Ins.) No. 333 of 2024, decided on 01.03.2024 (NCLAT).

[2] The Insolvency and Bankruptcy Code, 2016.

[3] Reserve Bank of India, Review of Regulatory Framework for Asset Reconstruction Companies (ARCs), RBI/2022-23/128 (Notified on October 11, 2022).

[4] UV Asset Reconstruction Company Ltd. v. Aircel Ltd., IA No. 1403 of 2022, decided on 21.12.2023 (NCLT).

[5] Ebix Singapore (P) Ltd. v. Educomp Solutions Ltd. (CoC), (2022) 2 SCC 401.

Reasons for Poor corporate governance in Financial Institutions: an analysis

Introduction

Corporate Governance is main for each & every financial institution. An increase in the integrated financial system, risks arise quickly in different aspects of financial institution system and have a real impact on the real sector of the country. Any downfall in the corporate governance that’s effect the financial institutions to operational risk which quickly impact in the credit, market, liquidity or the reputation decreased in the society. Therefore, the financial institutions and their regulators have put in their systems, controls and processes to ensure the standards of corporate governance. These processes have changed over a period of time and are continuously keeps changing in the internal, external and supervisory management. However, the instances of corporate governance are failures and would result in bad corporate behaviour have recurred not only in India but across the whole world. In the context of India, the financial system has witnessed instance of the system or governance failures in banks, NBFCs and the market intermediaries with the different dimensions and aspects. Common threads across are such as managerial misconduct, the concentration of power is misused, the lack of market discipline and inadequacies of external oversight. The emergence of corporate governance failures from time to time indicates that certain changes in the internal control systems, governance processes, audit mechanisms and regulatory structured could not be out.

Corporate governance in financial institutions

[Image Sources: Shutterstock]

Corporate governance refers to the sets of structures, processes and relationships between the management of the company, its board member, its shareholders and the stakeholders, through which the objectives are achieved and processes are a set of achieving this objective along with the tools that are monitored. The primary objective of the corporate governance is to safeguard the interest of the stakeholder’s interests in an effective manner by ensuring that helps in undertaken in an effective, efficient, responsible and ethical manner. The banks and the financial institutions that’s takes the deposits from the people to kept in their account. It provides a comprehensive guide for the purpose of developing suitable corporate governance systems with the size, complexity, importance of the system, substitutability, interconnected of banks and the financial institutions.

Corporate governance in financial institutions: In the context of India

Financial sector regulators in India are RBI, SEBI, IRDAI and PFRDA have put the regulatory aimed at strengthening governance with the regulated entities. These regulations remain same and the conduct of the board and senior management such as the chair and meetings of the board, the composition of the certain committees of the board, audit, nomination and remuneration, risk management, age, tenure, qualification and the appointment of the directors etc.  These regulations it has its own prescribed code of conduct and code of ethics and proper norms and reporting structures. The regulatory provisions are put the limit to the directors should not interfere in the day-to-day functioning and prevent from influencing the employees not to be directly involved in the function of appointment and promotion of employees.

Reasons for the failure of corporate governance in financial institutions

As we discussed above the boards of financial institutions strengthened with the independent directors and with the well-structured committees and supported by the compliance, risk and audit functions have its own primary responsibility. The corporate governance is fails not only in India but across the world to look closure at the reasons for corporate governance and the reasons of the failure control.

The following points are the reasons for the corporate governance

1. Lack of Transparency:

Lack of transparency is one of the main drivers for poor corporate governance in financial institutions. Transparency is the basis of trust, and when financial institutions do not make clear information on their operations, both financial health and risk exposures for stakeholders are left in obscurity. Lack of transparency could stem from murky reporting practices, inappropriate disclosure channels or deliberate acts to mask unsavoury information. In such an environment, it becomes hard for investors, regulators and even internal stakeholders to ascertain dominance or the true state of the institution thus breaking down trust.

• Weak Board Oversight:

The board of directors does play a critical role in ensuring that the standards for corporate governance are upheld within such an institution. However, weak board oversight may play a sizeable role in the failure of governance. This can appear in several forms including not enough independent directors, weak skills among board members or a deficit of commitment to tough calls on management. However, in certain instances the boards may get involved into conflicts of interest thus compromising personal gains as opposed to what is best for institution. Such poor supervision often leads to ineffective strategic choices, negligent risk management and a loss of shareholder value.

• Inadequate Risk Management:

Risk management is critical for the sustainability of financial institutions, and in its absence one can readily identify poor corporate governance. This can result in institutions that do not implement adequate risk management frameworks, which overlook stress testing or underrating the potential impact of new risks. This negligence can cause disastrous results, and this is evidenced from the events that followed the global financial crisis of 2008 where poor risk management practices brought down leading banks. Negligent risk management not only harms the financial health of an institution but also puts stakeholders at needless risks.

• Short-Term Focus:

The long-term sustainability can be compromised by operation of financial institutions that adopt a myopic, short-term perspective. Pressures from shareholders, analysts and even management remunerations linked to result based on short-term performance metrics might lead in making decisions that promote gains at the cost of long-term health for organisation. Such emphasis on immediate profitability is known to result in reckless risk-taking, lack of the necessary investment towards fundamental infrastructure and mere neglect of long-term strategic planning. As a result, the financial institutions become exposed to external shocks and may fail in adjusting themselves with changing circumstances of market.

• Regulatory Capture:

Regulatory capture refers to a situation where regulatory authorities mandated with the responsibility of supervising and monitoring financial institutions become too close to its stakeholders hence compromised in carrying out their roles. Various forces can produce this alignment, including revolving doors between regulatory agencies and industry or the insufficient funding of regulators as well lose their independence due to lobbying by influential firms. If regulators do not act with independence and thorough enforcement of governance standards, financial institutions will look to exploit the gaps in regulation causing an erosion on checks that must be present for a sound functioning system.

Conclusion

The corporate governance standards are a main regulatory function for the financial institutions. A set of governance processes, control systems, audit mechanisms, supervisory oversight and regulatory structures are put in the place of the financial institutions. The failure of the corporate governance has been a recurring in the global. All the corporate governance is failed due to the structures, board member, audit and external evaluation take place. Poor corporate governance in financial institutions is a complex phenomenon that has far-reaching consequences to the integrity and stability of the entire system. These challenges need to be met head on through a multipronged strategy which seeks intensify transparency, fortifies board oversight, enhances risk management practices and encourages long-term perspective whilst ensuring regulatory independence. By dealing upfront with these problems, financial institutions can recapture trust; reduce potential risks and support systemic resilience. All the stakeholders, shareholders and executives should note the importance of effective corporate governance in order to implement it for protection the interests of all concerned parties.

Author : Bhaskar Pandey, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at IIPRD

The Metaverse Paradox: Exploring Avatar Rights, Virtual Crimes, and the Legal Frontier

INTRODUCTION:

The metaverse is a virtual space where humans, disregarding any geographical barriers, can interact with each other and represent themselves through their customized avatars. It can be asserted that it is a parallel or unreal world existing alongside the real world. Author Neal Stephenson originally used the term “metaverse” in his 1992 book “Snow Crash”.[1] The metaverse was first revealed and widely embraced through digital gaming. Online multiplayer games like Roblox, Fortnite, Avakin Life, and Minecraft have allowed users to interact with each other through avatars, laying the groundwork for the metaverse. It is a concept of teleporting a human into the virtual space (i.e., a game metaverse), where a person experiences real-life sensations of a video game. For a player to establish a neurological connection between their brain and the virtual reality gadget, a disc interface has to be attached to their temple.[2]  The mind is then carried into the metaverse, where the players assume the role of an avatar, causing the body to briefly convulse in response to stimuli from the metaverse. Whether emotions created by one avatar for another in the metaverse would transfer to actual sentiments if the people behind their avatars crossed paths in real life was one of the film’s central questions.[3]

THE CONCEPT OF AVATAR IN THE METAVERSE:

Avatars are a digital representation of you that enables you to freely display your identity, personality and looks. People can customize their avatars accordingly. A highly futuristic avatar would likely eliminate physical gadgets to generate virtual and augmented reality experiences. Neural link technology enables brain impulses to control external devices via an implanted chip.[4]  This involves utilizing one’s brain to operate an external gadget. For the avatar’s activities to impact humans, the chip must receive and interpret signals from the metaverse before transmitting them to the brain.[5]  Here, the legal scenario when the users communicate via their avatars, there could be instances where an altercation arises that, if it happened between persons in the real world, would be considered illegal.

LEGAL RIGHTS OF AVATAR IN THE METAVERSE:

Protecting the legal rights of avatars in the metaverse is quite challenging due to inadequate laws present, and it necessitates a multifaceted solution. First, clear norms and regulations must be established inside metaverse platforms to specify acceptable conduct and provide systems for reporting and resolving infractions. Here, the most significant challenge would be in applying current legal conceptions to enforce accountability and safeguard rights. Assume a scenario where an avatar steals a digital “Audi car” in the ‘metaverse’. In such cases it would involve property rights, intellectual property law, and theft. If the same scenario is been observed in the real world where the loss of money or defamation of a person or company involved, then the case is brought before the court of law. As the metaverse develops determining the jurisdiction is ambiguous and there may be a need for international law of the metaverse.

Legal frameworks must be designed to address possible breaches of privacy and consent. This might include granting a separate legal personality to avatars, making them accountable for their acts in the metaverse.[6]  If avatars in virtual spaces may operate independently of humans, then avatars in the metaverse are completely autonomous entities. If avatars can conduct transactions in the metaverse, they should be granted rights and obligations leading to the rights to use or be sued. A new metaverse law covering copyright, harassment, rape, murder, and other topics could be developed and ratified by an International community without country-specific boundaries.[7]  Companies may serve as a paradigm for granting rights to avatars in a metaverse. Avatars, like corporations, are non-human entities that may drive economic investment in the marketplace. To enhance productivity, avatars should have the same rights and obligations as enterprises.[8]

HARMS AN AVATAR COULD CAUSE IN METAVERSE:

Real crimes are those that take place solely in the real world. Every state has civil laws that outline property rights as well as criminal laws that forbid violating these rights and specify the penalties for doing so.[9]  Sanctions encompass deterrence, rehabilitation, incapacitation, and vengeance. In the metaverse, not all types of crimes that have been identified in the real world should be prosecuted because they do not cause any physical harm, and it is anticipated that psychological and emotional damages are anticipated to be the most prevalent kind of harm in the metaverse. For instance, voluntary intoxication in the bar and leading to harassment of the avatar can cause physical as well as mental harm in the real world, but in the metaverse, it may only be prosecuted for mental harm.[10]  However, in the future, the avatars may be extremely developed to the degree that a connection between the human and his avatar through a neural connection would be able to send physical pain straight to a person’s brain. In such cases, maybe physical harm ought to be prosecuted.

THE NECESSITY OF ENACTING NEW LAWS:

Many legal scholars and experts have asserted that there is a need of implementing new laws to protect the rights of avatars in the metaverse. The legal rules regulating the metaverse, a fast-developing digital domain, are still relatively new. The particular difficulties presented by the metaverse might not be adequately addressed by existing laws. Since the metaverse seeks to transcend national boundaries, a single crime may have an impact on several countries, creating challenges for investigators in terms of standards and technology. It would be inconsistent with the idea of a decentralized, democratic government structure for the metaverse to provide all regulatory authority to a select few. This would lead to enforcing International laws that are to be ratified by the states. Furthermore, it is already common for criminals to exploit avatars in order to help them create fraudulent accounts and move money unlawfully. Crimes against the avatars, such as harassment, stalking, in-game scams, cheating, and impersonating a real person, have taken place.[11]  Crimes against the state, such as distributing illegal information or upsetting public peace and order, will also be prosecuted in state courts. But as of right now, neither state nor federal laws specifically address the metaverse. Game creators generally use a hierarchy of in-game sanctions, starting with a warning and progressing to account deletion. Closing and reporting an account, might have major consequences, including losing any virtual assets. Surprisingly, avatar killing is part of the game and is not considered murder or culpable homicide in the virtual space.

CONCLUSION:

Virtual reality’s next frontier, the metaverse, is a quickly developing digital environment that might fundamentally change how people interact with digital material and with one another. The interaction of avatars in the metaverse led to the implementation of legal rules and regulations. This blog claims that, although it’s not a perfect solution, the corporation’s legal framework may be one of the many laws mentioned to address the problem of avatar rights and responsibilities in the metaverse. This would begin the process of identifying and addressing the many rights and associated liabilities that an avatar may have in the metaverse by incorporating it and giving it an independent legal personality of the same quality as the corporate veil in company law.[12]  Nonetheless, it would take a very long time before people could better grasp the shape that the metaverse would take and how people would interact with it. The blog is truly forward-looking; as the metaverse develops over the next few decades, new laws and regulatory responses that were initially investigated through regulatory gaming regimes will need to be implemented in order to maintain a well-organized metaverse community and foster trust.

Author :Tanu Chaudhary, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at IIPRD

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[1] Matthew Sparkes, “What is a metaverse” (2021) 251 New Scientist, 3348, p 18.

[2] Jon Christian, “Elon Musk Compares Neuralink to a Black Mirror Episode” (20 August 2020) Futurism https://futurism.com/the-byte/elon-musk-neuralink-black-mirror.

[3] Hannah Shaw Williams, “Black Mirror Season 5: Striking Vipers Ending Explained” Screenrant (7 June 2019) https://screenrant.com/black-mirror-season-5-striking-vipers-ending-explained/.

[4] Anne McKinnon, “These Technologies are bringing us into the Metaverse” (31 March 2020) The Boolean https://theboolean.io/2020/03/31/these-technologies-are-bringing-us-into-the-metaverse/.

[5] Richard Chang, “Elon Musk’s Neural link shows monkey with brain-chip playing videogame by thinking” (10 April 2021) Reuters https://www.reuters.com/technology/elon-musks-neuralink-shows-monkey-with-brain-chip-playing-videogame-by-thinking-2021-04-09/.

[6] S. M. Solaiman, “Legal personality of robots, corporations, idols and chimpanzees: a quest for legitimacy” (2017) 25 (2) Artificial Intelligence and Law 155–179.

[7] Marc Andrew Spooner, “Comment, It’s Not a Game Anymore, Or Is It?: Virtual Worlds, Virtual Lives, and the Modern (Mis)Statement of the Virtual Law Imperative” (2012) 10(2) University of St. Thomas Law Journal 533–578.

[8] Tiffany Day, “Avatar Rights in a Constitutionless World” (2009) 32(1) Hastings Communications and Entertainment Law Journal 137, 150.

[9] Ben Chester Cheong, “Avatars in the metaverse: potential legal issues and remedies” (2022), Int. Cybersecur. Law Rev. (2022) 3: 467–494, https://doi.org/10.1365/s43439-022-00056-9.

[10] Susan Brenner, “Fantasy Crime: The Role of Criminal Law in Virtual Worlds” (2008) 11(1) Vanderbilt Journal of Entertainment and Technology Law 1, 61–70.

[11] Susan Brenner, “Fantasy Crime: The Role of Criminal Law in Virtual Worlds” (2008) 11(1) Vanderbilt Journal of Entertainment and Technology Law 1, 27.

[12] Ben Chester Cheong, “Avatars in the metaverse: potential legal issues and remedies” (2022), Int. Cybersecur. Law Rev. (2022) 3: 467–494, https://doi.org/10.1365/s43439-022-00056-9.

Trans-Border Trademark Landscape in India Post Toyota-Prius Judgement

INTRODUCTION

A trademark is any word, mark, logo, brand, name, slogan, or other visual element that differentiates one company’s products or services from those of another. Trademarks are considered Intellectual Property Rights and are legally protected under both national and international laws. The rationale for giving legal protection is that trademarks symbolise quality standards and prevent counterfeiting of the company’s products, therefore increasing the company’s goodwill. In India, trademarks are controlled by the Trademarks Act of 1999, which provides an exhaustive framework for trademarks.

One of the many aspects of trademark recognition is the Trans-Border reputation of a trademark. Trans-border reputation means that when the trademark of the company gains goodwill and is reputed globally, beyond the territorial limits of the country where the trademark is filed due to its widespread presence in the market through physical presence product, promotion, advertisements and/or publicity.

Trans-border trademark recognition has become more important in recent years to assist traders in protecting their trademarks internationally. Because the courts acknowledge this element of trademarks, third parties from other countries are limited to registering any trademark that suggests any likeness to a trademark previously filed by one nation in another country.

EMERGENCE

N.R. Dongre vs. Whirlpool Corporation, 1996 (16) PTC 583

Facts:

Whirlpool Corporation and its Indian subsidiary launched a lawsuit against N.R. Dongre in India for trademark infringement. Whirlpool was selling washing machines in India using the same trademark that N.R. Dongre was accused of infringing. The appellants (Whirlpool) contended that they have long used the disputed trademark and that the appellant’s company’s goods have a trans-border reputation. One of the several issues presented in this case was whether Whirlpool was widely recognised in India and had a trans-border reputation.

Held:

The Delhi High Court’s single and division benches both decided in Whirlpool’s favour. It stated that the appellants’ evidence proved that they had been long-time users of the mark in question, whilst the respondents failed to show their innocence for using the mark. Division Bench of the Delhi High Court further acknowledged the mark’s trans-border reputation and indicated that it is not required to have the goods present in physical form to recognise the trademark, but that the product is recognised in the market through marketing, as was the case here. The Supreme Court likewise supported the Division Bench’s judgement, stating that overturning the Division Bench’s decision would cause irreparable injury to Whirlpool because they had been using this mark for a long time.

The concept of trans-border has evolved through this case and the courts have heavily relied on this case to determine the cases of trans-border trademark recognition of multinational companies.

TOYOTA JIDOSHA KABUSHIKI KAISHA vs. M/S PRIUS AUTO INDUSTRIES LTD. & ORS. 2018 (73) PTC 1

Facts:

Toyota (hereafter referred to as plaintiff), an internationally recognised automobile manufacturer, introduced a car named the ‘PRIUS’ for which trademark registrations were submitted across the world. Prius Auto Industries (hereafter referred to as the defendant) is a company incorporated in India that manufactures and sells vehicle components and accessories. Toyota filed before the Single Judge Bench of the Delhi High Court for a permanent injunction against Prius Industries for violating Toyota’s trademark, which it had already filed. If the injunction is not granted, Prius Industries will obtain an unfair advantage over Toyota’s brand reputation and goodwill, which is detrimental to Toyota.

Held:

The Single Judge Bench issued an ex parte ad interim injunction prohibiting the defendants from using Plaintiff’s registered trademarks.

The defendants filed an appeal with the Delhi High Court’s Division Bench against the ruling. The Division Bench decided that Prius lacked a transborder reputation in India, and that print media marketing had minimal impact on the public. Furthermore, no substantive evidence suggested that the public was confused about both items.

The Supreme Court heard an appeal, and upheld the Division Bench’s ruling. Toyota claimed that the ‘PRIUS’ mark was marketed internationally in print media, but failed to demonstrate that the ‘PRIUS’ brand had established significant goodwill and recognition in the Indian market prior to when Prius Industries applied to use the same mark. They also said that if people affiliated with the sector or the items are aware of the mark, it has built a positive reputation and goodwill in the market.

However, the court did not agree with this but rather agreed with the territorial principle to be the primary focus. It noted that in order to establish a trans-border reputation, the mark must have gained goodwill in the Indian market before anyone else may submit a trademark application for it. Because it was not clear in this case that Toyota had a significant level of goodwill for its automobile, the Division Bench of the Delhi High Court’s decision to overturn the permanent injunction was affirmed.

CONCLUSION

According to the well-established precedent set by Whirlpool, even in cases when a product is not physically present in the market, the company’s mark alone would be enough to identify it as a trans-border reputation in the Indian market. The Toyota decision provided more clarification on this issue, with the court ruling that a trademark cannot be considered to have trans-border recognition just because it is printed in newspapers and magazines. Whether or not the general public has been impacted and influenced by these commercials is one of its key components. It acknowledged the territorial doctrine and placed a strong emphasis on the spillover of global reputation to the Indian market prior to its adoption by others.

The Toyota case expanded the scope of trademarks’ trans-border reputation in the Indian market and gave greater protection to those using marks that were not acknowledged in the Indian market but were registered as trademarks elsewhere in the world. Following this precedent, each case’s facts will be interpreted differently because a variety of factors will be taken into account when determining whether a company’s trademarks have a trans-border reputation. This ensures better protection to the other company and fair and equal justice for all which forms the basis of the Indian Constitution. 

Author : Riya Shah, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at IIPRD

SOURCES

1. https://www.mondaq.com/india/trademark/665844/transborder-reputation-and-passing-off-action-toyota-prius-case
2. https://singhania.in/blog/trans-border-reputation-of-trademarks-in-india
3. https://www.khuranaandkhurana.com/2022/05/28/the-issue-of-transborder-reputation-of-trademarks/
4. https://www.theippress.com/2021/10/26/effect-of-prius-judgment-on-trans-border-reputation-of-trademarks/
5. https://www.indiacode.nic.in/bitstream/123456789/1993/1/A1999-47.pdf
6. https://indiankanoon.org/doc/163092085/

Deciphering The India’s Modern Criminal Justice System

Introduction

The transition of the India’s criminal justice system from the pre-constitutional to the post constitutional eras is reflected in its evolution. Justice in the pre-constitutional era was primarily administered through conventional means that were frequently based on social conventions and practices. There was no formalised structure to the system, and punishments were severe. The Indian Constitution of 1950 brought about a profound paradigm change. A comprehensive legal framework centred on the values of justice, equality, and fundamental rights was established during the post-constitutional era. Adoption of the Evidence Act, the Indian Penal Code, and the Criminal Procedure Code provided a structured procedural underpinning, among other important changes. 

However, the judicial system remains influenced by the colonial past. Originally enacted to suit British interests, the colonised laws created inequalities, prejudices, and weakened native legal customs. Despite these current attempts at modernization and reform, the process of decolonizing the legal system is still ongoing and requires a commitment to reforming the legal system to reflect modern values while still giving due regard to historical legacies.

SIGNIFICANCE OF UNDERSTANDING THE MODERN DYNAMICS

Three historic bills were signed into law by the President on December 25, 2023 and it replaced the criminal laws of the colonial period namely, “the Indian Penal Code, 1860 (IPC), the Indian Evidence Act, 1872 (IEA) and the Code of Criminal Procedure, 1973 (CrPC)”, The three new laws are slated to modernise the criminal law in India, elimination of slavery, and establish “justice” as the cornerstone of the system rather than “punishment.”

A. Bharatiya Nyaya Sanhita 2023

The Bharatiya Nyaya Sanhita, 2023 (BNS) seeks to establish a citizen centric legal framework and improve India’s criminal justice system. It is intended to substitute the Indian Penal Code. In addition, it intends to address organised criminal activity and terrorist acts, construct new offences pertaining to secession and armed rebellion, make crimes gender-neutral, and incorporate community service as a form of punishment.

The Bhartiya Nyaya Sanhita introduces several novel offenses, such as the following:

a murder perpetrated by an ensemble of more than five individuals based on race, religion, caste, etc[1], production or dissemination of false news[2], use of deceptive means during sexual relations[3], terrorist acts[4], acts endangering the sovereignty, unity, and integrity of India[5]. This legislative update reflects a comprehensive approach to address emerging challenges and enhance the deterrent effect of the criminal justice system in India.

B. Bharatiya Nagarik Suraksha Sanhita, 2023

The Bharatiya Nagarik Suraksha Sanhita, 2023 (‘BNSS’) proposes to supplant the CrPC with citizen-centric criminal proceedings, addressing issues like as court pendency, investigative delays, below par conviction rates, and ineffective use of forensics.

The BNSS boasts regulations that limit arrests in specific circumstances, facilitate the use of technology in investigations, mandate bail, and set timetables for different processes. The law authorises police to seek detention of suspects[6], use handcuffs for specific offences[7], and hold trials in absentia[8].

C. Bharatiya Sakshya Adhiniyam, 2023

The Bharatiya Sakshya Adhiniyam, 2023 (‘BSB’), introduced as a replacement for the Indian Evidence Act, seeks to reform India’s evidentiary legislation in light of technological improvements over the last several decades.

Amongst additional provisions, the BSB makes “digital documents admissible as principal evidence[9] and widens the umbrella term of “supplementary evidence” to include testimony from witnesses who have seen a document as well as written and verbal confessions[10].

decolonization of India’s criminal justice system

The aforementioned laws serve the admirable goal of decolonizing India’s system of criminal justice. This is a significant beginning for India’s efforts to improve and modernise its criminal justice system. Criminal laws were employed to instil terror among citizens and to muzzle detractors with a view to further colonial rule. Although it was founded on flawed foundations, the Indian Penal Code (IPC) unified criminal law in India. Because they were perceived as an “aboriginal savages,” native Indians were not deserving of change. This set the stage for India’s punitive policy, which has persisted ever since the country gained independence.

Significant Aspect of the Laws

1. Bid to enhance the conviction ratio: The sole goal of the Bills is to increase the proportion of conviction rates. The rule of law will only triumph if offenders are brought to justice. The police would not be able to hold up the probe indefinitely. The chargesheet will be filed within 90 days, and the investigative procedure must be completed within 180 days. After the arguments are concluded, the court must give a decision within 30 days, which will be made available online within seven days. In addition, the scope of summary trials has been broadened in minor situations.
2. Crime site visit by Forensic specialists: Videography has also been made mandatory for the search and seizure procedures that will be used in this case. Without such documentation by the police, no chargesheet will be considered genuine. Each district will have three mobile Forensic Science Laboratories (FSLs), and 33,000 forensic scientists and professionals would be trained each year.
3. Filing of Zero FIR: For the first time since independence, a zero FIR provision has been created. Citizens will be able to file complaints outside of their police station area. In addition, the first provision for e-FIR has been introduced. These reforms will speed the process of seeking justice. The police will have to provide updates to the arrested person’s family, both online and in person.
4. Absentee trial: This is a historically significant provision. If a person is intentionally absent from proceedings in court and has been proclaimed a fugitive by the sessions court (for example, Dawood Ibrahim, Mehul Choksi, etc.), they will be tried and sentenced while away.
5. Sexual crimes: According to the new penal code, sex under the pretence of fraudulent promises of marriage, job, promotion, or fake identity is now a felony. All incidents of gang rape now carry a 20-year or life sentence. A provision for the death penalty in instances of underage rape has been established.  In situations of sexual harassment, the updated laws require the police to provide the complainant with an update on the progress of the complaint within 90 days, and thereafter every 15 days.
6. Mob lynching and fake news: The provisions for 7 years in jail, life imprisonment, and the death sentence for mob lynching have been retained. Spreading false news that has the potential to damage sovereignty and internal security is now a criminal violation punishable by up to three years in jail.

Lacunas of the Bills

Regrettably, the trio of bills fails to confront the fundamental premises regarding the effectiveness of criminal law and penalties in India and does not adequately address the need for decolonization in the following aspects:

1. The absence of an established decolonization roadmap: In pre-independence India, citizen-state relations were governed by colonial logic of dominance. It should be noted that the new legislation neither deviate from this nor even take into account how the relationship between the citizen and the state has changed since independence. A large part of the colonial nature of the existing IPC is reflected in these bills, which over-rely on jail terms as a deterrent; view Indian civilians with suspicion and rely on ambiguous laws to uphold police authority.

The punitive ideology of the new imperialist Indian state remains unresolved by each of the three bills, save from the overarching goal of recolonizing and transforming the country’s criminal justice system. The objective of Indian criminal law and the definition of a violation aren’t rendered explicit in the bills.

• The implementation of arbitrary penalties and an imperial punitive theory: The BNS tends to rely extensively on obligatory minimum sentences, the lethal penalty, and jail to inculcate fear in people—the colonial idea of punishment. The Indianization of our criminal justice system could have been aided by an emphasis on restoration and reformation, particularly given that the purpose of these aforementioned laws is to ensure “justice” rather than “punishment.” The use of community service instead of jail time for a tiny percentage of criminals shows a resistance to adopting a more liberal approach to punishment.
• Retaining colonial implements: The colonial authority’s tactics to uphold its interests and quell opposition are still included in the BNS. Patriotic Movement activists were imprisoned and indigenous individuals were monitored via the employment of provisions such as criminal slander and sedition. Retaining these essentially colonial elements in the BNS and adding the charge of ‘endangering the sovereignty, unity, and integrity of India'[11], which is akin to the sedition crime[12], are unlikely to aid in the process of decolonization.

ESTABLISHING A CITIZEN-CENTRIC CRIMINAL JUSTICE SYSTEM

Indian citizens remain viewed with scepticism by the BNS and BNSS, which grants the police apparatus wide authority to impose restrictions on their liberty on the basis of mere suspicion. The BNSS’s criminal justice system is mostly similar to the court system and law enforcement agencies in terms of its colonial legacy. It appears that the law has squandered the chance to develop a criminal justice system that is simple to comprehend rather than a maze of legalese.

Another remnant of the colonial state, overbearing police and policing, does not seem to be on the agenda for this round of reforms. It is imperative that the Police Act of 1861 be changed in order to completely overhaul the criminal justice system.

Conclusion

Nowadays, the system  of criminal justice is an intricate network of competing entities. Delays in justice can lead to a miscarriage of justice occasionally. The government faces a number of issues as a result of the criminal justice system’s present scenario. Nonetheless, the Indian criminal justice system remains very slow and is woefully understaffed and underfunded. This system, like every democratically civilisation society, aims to provide the public with the greatest extent of safeguarding by dealing with crimes and offenders in a prompt, efficient, and legal way.

The goal is to minimize criminality in society by detecting reported offenses, securing prompt convictions, imposing suitable sanctions, and preventing recidivism. Recent reforms in the court system have improved access to justice for the poor. These advancements have significant impact on the justice delivery system. They have transformed our legal jurisprudence and will greatly benefit the masses and average man. The nation’s supreme courts’ initiatives to modernize criminal justice have also led to paradigmatic changes in victim recuperation, jail reform, and the care of inmates awaiting trial.

Author : Aanchal Verma, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at IIPRD

References

• https://vidhilegalpolicy.in/research/comments-on-the-new-criminal-law-bills/

• https://bprd.nic.in/WriteReadData/userfiles/file/202312280520065884209BSA.pdf
• Subhajit Basu & Shameek Sen (2023), “Silenced voices: unravelling India’s dissent crisis through historical and contemporary analysis of free speech and suppression”, Information & Communications Technology Law, DOI: 10.1080/13600834.2023.2249780
• Panickasseril, J.G. (2023), “Judicial Approaches to Victims of Sexual Violence: The Indian Criminal Justice System and Restorative Justice Principles”, Orton, B. (Ed.) Gendered Perspectives of Restorative Justice, Violence and Resilience: An International Framework (Diverse Perspectives on Creating a Fairer Society), Emerald Publishing Limited, Leeds, pp. 41-62. https://doi.org/10.1108/978-1-80382-383-620231004
• [1] Bharatiya Nyaya Sanhita, 2023, cl. 101
• [2] Bharatiya Nyaya Sanhita, 2023, cl. 195
• [3] Bharatiya Nyaya Sanhita, 2023, cl. 69  
• [4] Bharatiya Nyaya Sanhita, 2023, cl. 111
• [5] Bharatiya Nyaya Sanhita, 2023, cl. 150
• [6] Bharatiya Nagarik Suraksha Sahinta, 2023, cl. 187
• [7] Bharatiya Nagarik Suraksha Sahinta, 2023, cl. 43
• [8] Bharatiya Nagarik Suraksha Sahinta, 2023, cl. 356
• [9] Bharatiya Sakshya Adhiniyam, 2023, cls. 57 and 61
• [10] Bharatiya Sakshya Adhiniyam, 2023, cl. 58
• [11] Bharatiya Nyaya Sanhita, 2023, cl. 150
• [12] The Indian Penal Code, 1860, s.124A

Can Situations Of Outright Refusal To Deal Be Equated To Constructive Refusal? – The Question of Indispensability under the Eu Competition Law.

ABSTRACT

The paper explores the complex legal environment that surrounds refusal to deal under EU law, focusing on the differences between constructive and outright refusal. While constructive refusal builds restrictions that effectively prevent competitors from operating downstream, outright refusal indicates a company’s unilateral refusal to engage in transactions. The EU makes clear that margin squeeze and tying are two different types of abuses. Self-preferencing, or favoring one’s own products above competitors’, is defended by claims of property protection and contractual freedom. The indispensability requirement, which is crucial in evaluating outright rejections, is contested; the EU court has determined that it is not always necessary in specific situations involving access restrictions. This strategy is criticized, meanwhile, for being inconsistent and having the ability to discourage investment incentives.

INTRODUCTION

Situations, where a firm discriminates in favour of its products to the detriment of its rivals, must be defined as self-preferencing and is a form of refusal to supply and should be treated the same way. The EU commission must consider that the guidance paper on Article 82 of the treaty is not meant to be a legal declaration and does not affect how the European Communities Court of Justice or Court of First Instance would interpret Article 82. Furthermore, the broad structure outlined in the text does not affect the Commission’s ability to reject a complaint if it determines that it is not in the best interests of the community and that the matter is not prioritized.

In order to assess whether situations, where the dominant company is self-preferencing, can be treated equally to an outright refusal, the EU courts must take into consideration the forms of self-preferencing taking place. The comission must also consider the benefit of consistency derived from the non-application of differential principles in cases of refusal to deal. RCA must also take into consideration the end idea of balancing competition and promoting innovation and incentives. This comes from the criterion of indispensability which guarantees the dominant firm the freedom of innovation and such freedom should not be restricted in case of self-preferencing or constructive refusals. Lastly, RCA must rely upon the fact that it is the indispensability criterion that provides dominant firms an incentive to innovate and invest and it remains essential for the indispensability criteria to be proven even in cases of constructive refusal to supply in order to preserve the incentive to innovate.

MAIN ARTICLE

The term outright refusal to deal has been understood as direct and complete denial to deal by a firm. On the contrary, a situation of constructive refusal to deal/supply would mean that a firm makes it practically impossible for its rival to operate downstream. In situations where a dominant firm consistently delays its deliveries, and degrades the quality of its inputs, differential and increased price for inputs to its rivals would constitute a constructive refusal to deal. The EU law has clarified that situations of margin squeeze and tying be treated as a separate form of abuse and not be categorized under any of the refusals as mentioned earlier.

However, situations, where a firm discriminates in favor of its products to the detriment of its rivals, defined as self-preferencing may also be backed by reason of (i) Freedom to Contract and, (ii) protection of private property.

The Union Courts have ruled that the indispensability criterion is not necessary in cases where the dominant firm has agreed to, or is required by regulatory obligations, to grant access to its input, as in the cases of margin squeeze (Telefónica, TeliaSonera)[1] , or it degrades the supply of the input and sets unfair terms and conditions (Slovak Telecom)[2] , or it otherwise unfairly restricts access (Google Shopping)[3] . According to the Court of Justice, the Bronner case’s indispensable criteria only applies to outright denials of supply—it does not apply to other abusive actions involving access requirements once access has already been granted[4].

Economic perspective on the application of indispensability: Numerous situations where a dominating corporation has an incentive to participate in vertical foreclosure have been recognized by economic research. These theories typically concentrate on situations in which a vertically integrated company has the exclusive right to the input, presuming that the input is necessary. However, this assumption is made for simplicity, because there are models where alternate input providers exist, even if they may be less effective. Furthermore, the existence of an upstream oligopoly is a fundamental component of the theory of harm in the “raising rivals’ costs” theory.4 12. Thus, from an economic point of view, a dominant firm can participate in vertical foreclosure, which has an anti-competitive effect, without the input having to be indispensable.

However, not only does the differential treatment of constructive refusal from an outright refusal to supply lacks consistency and run the risk of producing perverse incentives for enterprises, but it also has the potential to jeopardize investment incentives. Moreover, such differential treatment may also incentivize the firm to outrightly refuse access to the inputs as it is treated more leniently than a less exclusionary practice even though it is more restrictive.

The amended guidelines reflect that indispensability need not be proven in cases of constructive refusal to supply[5], self-preferencing, and margin squeeze. However, such an approach creates disbalance and inconsistency in the application of principles. The main rationale behind the application of the criterion of indispensability is the freedom to contract and the right to dispose of its property. The economic rationale behind the same is the preservation of incentive to invest and innovate which in most cases lies with the dominant firms, given the strong financial backbone. In such a case removal of criteria of indispensability from constructive refusal not only makes the firm obliged to share its inputs with its rivals but also gives a free–rider advantage to the rival firms to not invest in any innovations. This discourages the firm from sharing its inputs to not develop them in the first place[6].

There must be Homogenous protection to firms in all types of refusal as there lies no substantial valid justification that a firm not outrightly refusing to deal should not be given the same protection of criterion of indispensability as provided in cases of outright refusal. An effect-based approach should not treat differently any conduct that differs only in form but not in substance.

Since self-preferencing is a form of refusal to supply, it ought to be treated the same way as Similar to other forms of refusal, self-preferencing also has objective and efficiency justifications such as a delay may be backed by the reason of ensuring quality control or protection against a market negatively reputed due to the introduction of a product of any player or rival. (ii) In many situations, self-preferencing may not even have appreciable effects. Situations of delay in supply may be for a short duration time and be resolved later.

To summarize, the following conclusions can be drawn from the literature on exclusionary practices that were previously discussed: (a) the input in question for a vertical foreclosure action should be an important asset, but not necessarily indispensable in the sense of Bronner; (b) all vertical foreclosure cases, including cases involving both outright and constructive refusals to supply, should be governed by this principle.

Author : Jeevanaa .N. Rathor, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at IIPRD

REFERENCES

1. Telefónica SA v European Commission, Case C-274/12 P and Konkurrensverket v TeliaSonera Sverige AB, Case C-52/09.
2. Slovak Telekom, a.s. v European Commission, Case C-165/19 P, para 39
3. Google and Alphabet v Commission, T-612/17
4. Judgment of 25 March 2021, Slovak Telekom v Commission (Slovak Telekom), Case C-165/19 P, EU:C:2021:239, paragraphs 50-51 and judgment of 12 February 2023, Lietuvos geležinkeliai AB v European Commission, Case C-42/21 P, EU:C:2023:12, paragraphs 81-84 and 91.
5. Official journal of the European union, INFORMATION AND NOTICES, Amendments to the Communication from the Commission – Guidance on the Commission’s enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings, C116 VOLUME 66, 2023, (2023/C 116/01), PG 4, PARA 4.
6. Motta (2023) formalizes a model inspired by the Google Shopping case. There, the input is not essential, in the sense that a part of the user population needs access to the input, while the remaining part does not. Still, vertical foreclosure takes place and it is anti-competitive
7. Communication from the Commission COMMISSION NOTICE Guidelines on vertical restraints 2022/C 248/01C/2022/4238
8.  

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[1] Telefónica SA v European Commission, Case C-274/12 P and Konkurrensverket v TeliaSonera Sverige AB, Case C-52/09.

[2] Slovak Telekom, a.s. v European Commission, Case C-165/19 P, para 39

[3] Google and Alphabet v Commission, T-612/17

[4] Judgment of 25 March 2021, Slovak Telekom v Commission (Slovak Telekom), Case C-165/19 P, EU:C:2021:239, paragraphs 50-51 and judgment of 12 February 2023, Lietuvos geležinkeliai AB v European Commission, Case C-42/21 P, EU:C:2023:12, paragraphs 81-84 and 91.

[5] Official journal of the European union, INFORMATION AND NOTICES, Amendments to the Communication from the Commission – Guidance on the Commission’s enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings, C116 VOLUME 66, 2023, (2023/C 116/01), PG 4, PARA 4.

[6] Motta (2023) formalizes a model inspired by the Google Shopping case. There, the input is not essential, in the sense that a part of the user population needs access to the input, while the remaining part does not. Still, vertical foreclosure takes place and it is anti-competitive

Copyright in India

Introduction

Emerging lawyers these days hear this a lot during their degree, “if you want to earn money more quickly, you should specialize in copyright and intellectual Property right”. As one of such students who is inspired to be a corporate Lawyer, I decided to complete a copyright course in the Coursera Website for Copyright law in Music Business offered by the Berklee University. However, I was still not satisfied about only leaning Copyright in music business so i decided to do more and more research about copyright and Intellectual Property right in India.

What is copyright and what are the benefits one gets for registration of getting copyright on your work?

Copyright can be simply understood as the rights given to the creators of the original work for a particular period of time (it includes music, tunes, essays, notes, machines etc.). One thing to note is that copyright only protects expression of the idea rather than the idea itself. For example, A comes with an idea of creating music with a particular tune and informs this music creation detail to B. B after listening to A’s Idea, creates the music with the same tune. In this case A cann’t sue B for copyright infringement as A only shares the idea and did not do anything to persuasion of the idea so B didn’t copy the work. B will be called the owner or creator of the property.

One of the benefits of getting copyright on your work is that it helps the original creator from getting evidence for any copyright dispute. If one’s work is registered for copyright, then one can file for copyright infringement lawsuit in case someone copy one’s work without taking the permission of the said person.

It is not necessary to register their work for copyright. It is said that copyright is acquired as soon as one’s work is completed. However as mentioned above, registration for copyright can be helpful for certain benefits.

Law for copyright in India

Indian Law which governed copyright in India is the Copyright Act, 1957. Copyright protection is granted to literary works, theatrical works, musical works, artistic works, cinematograph films, and sound recordings under section 13 of the Copyright Act 1957.

A collection of exclusive rights that are granted to the copyright holder by virtue of Section 14 of the Act is referred to as copyright. Only the copyright owner or any other individual who has been properly granted permission in this respect by the copyright owner may exercise these rights. These rights include the ability to modify, reproduce, publish, translate, communicate with the public, and make other types of changes.[1]

Copyright Act, 1957 distinguishes Copyright in two form- Economic Right and Moral Right. According to the Economic Right, the original Creator should have the benefit from their work (Selling their work or reproducing the same work). That is the reason why production of books without any permission of the original creator is lawsuit for copyright infringement. Moral Right deals with the fact that the original creator should be given credit for the work which he has done and should not be copied by other person without permission.

Time Period for Copyright

One of the important thing which should be kept in mind is that after the expiration of time period of copy right, the work of the creators ends up in the public domain which means that other people can then use creators work without taking creator’ permission. 

Original plays, novels, musical compositions, and creative works are protected by copyright in India for 60 years after the author’s death. In cases when there are several writers, the deadline is 60 years after the final author’s passing.

Copyright protection is in place for cinematograph films, sound recordings, images, posthumous publications, anonymous and pseudonymous publications, government works, and works of international organizations for 60 years following the year of publication. Unpublished computer programs, photographs, and cinematograph films are covered by copyright for a period of 60 years from the year of creation.[2]

Punishment to Copyright

In case one of my copy my work which i have created before him, then I can bring a civil or a criminal lawsuit against him. Section 54-62 of the act mentions about the civil remedy which one can take in order to take an action against the copying person. This include damages, account, Delivery of Infringement Copy etc. However, Section 63- 69 mentions about the criminal remedies which one can take against the copying party or person. Punishment includes 6 months to 3 years imprisonment or fine of rupee 50,000 – 2,00,000(with seize of infringed copy).

Conclusion

Copyright is one of the most important field as the digital world keeps on getting bigger and bigger. Lawyers these days are getting more and more cases of copyright as the people are taking the work of another person without giving any credit or taking any permission from them. In this, the Indian Laws are playing an important role despite the fact that they are made in 1957. The question is that whether the copyright lawsuit will continue as we enter the digital age where we can go to any place without leaving the room or will it only be applicable in physical world only.

Author : Sarthak Gupta, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at IIPRD

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[1] Sunkar, M.K. Copyright law in India, Copyright Law in India – Copyright Office, Copyright act. Available at: https://www.legalserviceindia.com/article/l195-Copyright-Law-in-India.html.

[2] Onderkova, H. (2022) Copyright protection in india- overview and recent developments, IP Helpdesk. Available at: https://intellectual-property-helpdesk.ec.europa.eu/news-events/news/copyright-protection-india-overview-and-recent-developments-2022-03-02_en.

Evolution of India’s Corporate Law Development

MAIN BLOG

History of corporate law in India has changed a lot to meet the emerging needs of the business environment of the country. Critical scrutiny of the evolution of corporate law in India which focuses on the significant turning point and the impact on innovative business strategies.

1. Historical Evolution of Indian Corporate Law: The history of company law in India dates back to 1850, when the Companies Act was enforced based on English law. Subsequent acts, such as the Companies Act of 1913 and the Companies Act of 1956, were drafted to govern companies in India.

2. The Companies Act of 2013: In 2013, this act marked a significant impact in corporate governance laws of India. It introduced several new provisions with objectives to increase obligation, transparency and shareholders’ rights. For example, appointment of independent directors to have an audit committee for a corporation.

3. Judicial decisions’ effect on corporate law: Judicial decisions have significantly shaped the corporate law in India. For example, the Supreme Court in its historic decision in the famous case of Tata Consultancy Services v. State of Andhra Pradesh where the court reaffirmed the federal character of corporate law in by stating that it is the Central Government that has the exclusive power to incorporate companies.

4. Current Corporate Law Trends: Strong focus on simplifying rules and enhancing ease of doing businesscan be seen from the last few years in India. Insolvency and Bankruptcy Code, 2016 improved the credibility of Indian business environment, which fast tracks resolution process for financially troubled firms.

Case Laws Influencing Indian Corporate Law

• Salomon v. Salomon & Co. Ltd. (1897): This landmark ruling had introduced the notion of corporate personhood, which lies at the heart of modern corporation law.

• State of West Bengal v. Associated Contractors (2015) – This case influenced company governance standards in India by emphasizing duty and transparency in public procurement processes.

CONCLUSION

Evolution of corporation in India can easily identify how focused US is to make a business-friendly environment. India has positioned itself as a desirous place for investment and business expansion by taking global best practices and adjusting to change realities.

Author : Shashank Shekhar, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at IIPRD

REFERENCE

• Companies Act, 2013
• Insolvency and Bankruptcy Code, 2016
• Chakrabarti, Rajesh and Kagade, Mandar, Corporate Governance — Evolution and Challenges in the New Companies Act (June 21, 2018), https://ssrn.com/abstract=3200708 (last visited- 0104/2024)
• Emerging Trends in Corporate and Commercial Laws of India (2019), https://cbcl.nliu.ac.in/wp-content/uploads/2019/11/Emerging-Trends-in-Corporate-and-Commercial-Laws-of-India.pdf (last visited- 1/04/2024).
• Institute of Company Secretaries of India, Corporate Law Study (Institute of Company Secretaries of India, 2018). https://www.icsi.edu/media/webmodules/publications/FinalCLStudy.pdf (last visited- 31/03/2024)

Google Play Billing Policy: Whether Anti-Competitive In Nature

ABSTRACT:

The goals of both, namely the maximization of public welfare, can be compared in terms of how competition law and policy handle the process as well as to those of political democracy.[1] But because of the quick rise of e-commerce and the digital market, it has grown increasingly complex. The paper describes the entire situation by the way of taking an example of the contemporary Indian problem that occurred in relation to the Google Play billing system, contextualize it with the competition law and its current state, and draws attention to the shortcomings in the ruling itself.

INTRODUCTION:

Due to the rapid growth in field of e-commerce and digital market place there has been an insurgence of platform to facilitate the process and in turn gaining power from it. This new field is governed by multiple laws but the focus of the article is on the competition law which keeps the power of the platforms in check in order to preserve the right of freedom of choice and welfare of the consumer by keeping in check the competition in the marketplace.

The Google Play Billing System (hereinafter “GPBS”) in context to the digital market place of Google Play have been in spotlight as was fined for anti-competitive practice which was been followed. The GPBS has been rightfully charged by Competition Commission of India (hereinafter (CCI) and in this article after critically analyzing the facts, issues will lay down the judgement of the court, then point out the Main Factors which the Commission took aid in order to reach an ultimatum as well as substantiating it and then even pointing out the lacunae that even this judgement suffers from.  

ANALYSIS:

India has seen a drastic change in the technology and in the modern times due to increasing availability of electronic devices as smart phones, laptops, etc. with the supplement of the Internet has been the epicenter for the emergence of the e-commerce platform and mobile payment systems. Due to this emergence as the law changes with the change to the society so there has been changes, amendment and even addition of laws or legal provision governing the area of the digital market place. In Businesses operating in the digital market place in India have to comprise with multiple laws such as:

1. The Information Technology Act, 2000,[2]
2. The Indian Contract Act, 1872,[3]
3. The Consumer Protection Act, 2019,[4]
4. The Competition Act, 2002,[5]
5. The Payment and Settlement Systems Act, 2007,[6]
6. The Reserve Bank of India (RBI) regulations on digital payments,[7]
7. The Copyright Act, 1957,[8]
8. The Trademark Act, 1999,[9]
9. The Patents Act, 1970.[10]

But, this article focuses on the aspect of assessing the junction where the interfaces where two domains of completion law and the digital market place meets, in the recent times due to the fine imposed by the CCI against the Google for GPBS being anti-competitive in nature and impugned monetary fine of Rs. 936.44 crores as result of the case of XYZ vs Alpahabet Inc..[11]

XYZ v. ALPHABET INC.:

BACKGROUND:

There was a two-fold allegation made by the informants on Google as recognized by the commission, firstly was the mandatory use of the GPBS for purchasing apps as well as to conduct in-app purchases restricts the choice available to the app developers and also keeping in mind the 30 percent service tax which may be 15 in some cases which is mandatory to be given to Google under the GPBS for any purchasing of the app for the google play store and for ant in-app purchases as well. Secondly, was that the other mobile wallets and UPI apps are not accepted as legitimate payment methods in the Google Play payment system.[12]

Issue arose:

1. Whether making the use of Google Play’s billing system (GPBS), exclusive and mandatory by Google for App developers/owners for processing of payments for App and in-app purchases and charging 15-30% commission is violative of Section 4(2) of the Act?
2. Whether exclusion of other UPI apps/mobile wallets as effective payment options on Play Store is unfair and/or discriminatory as per Section 4(2) of the Act?
3. Whether pre-installation and prominence of Google Pay UPI App (GPay) by Google is in violation of Section 4(2) of the Act?

WHETEHR GPBS PRACTICE IS ANTI-COMETITICE IN NATURE OR NOT:

Yes, the GPBS system was anti-competitive in nature and the commission was right in its approach and holding them liable under 4(2)(a)(i),[13] 4(2)(a)(ii),[14] 4(2)(b)(ii),[15] 4(2)(c),[16] and 4(2)(e) of the Act.[17] and we can analyze each of the aspects discussed by the court while substantiating it even further:

GPBS:

GPBS is the proprietary billing system of the google, in which the app developer makes account with Google, and in this system the Google gets its “service fee” on all the app purchase or in-app purchase. In the due process of creating an account by the app developer with Google they have to agree to the DDA (Developer Distribution Agreement) and the DPP (Developer Program Policies) which clearly mandates the compulsory use of the GPBS.[18] Further, if seen in the Section 4 of the Google Play’s Payment Policy can be clearly inferred that the not only does it mandates the use of GPBS,[19] but in addition it also has an “Anti-steering provisions” which means it also restrict the ability of the app-developer to inform the consumer about in-app purchase from some elsewhere. There were number of factors as to why the GPBS system is anti-competitive in nature such as subsequently discussed.

DISCRIMINATORY PRACTICES:

Then Court finally highlighted the part of discriminatory practice which comes to light when we see that YouTube which is owned by Google does not use GPBS but YouTube is in connection with third-party payment processors directly, Google had given liberty to YouTube but not to the others who still have to follow the GPBS and have to pay the exorbitant rate of 15-30% service fee every time putting them at a disadvantage;[20] (cite) When we say discriminatory practice, we say so in the light of the practices which results in denial of market access in violation of provisions of section 4. (cite para 40 Arshiya Rail Infrastructure Limited Vs. Respondent: Ministry of Railways Arshiya Rail Infrastructure Limited vs. Ministry of Railway: MANU/CO/0076/2012). Also, the Supreme Court itself has interpreted denial of market access under Section 4(2)(c) widely, noting that denial of market access ‘in any manner’ would fall under its ambit, regardless of whether it is a denial of access to competitors or denial of access to players in vertically affected markets.[21] So the denial of market access used in this context is an umbrella term. Here, Google turning a blind eye to the YouTube in turn to increase their revenue allowed them engage with a third-party payment processor and like others they are charged significantly lesser fee then they themselves charge to others which ranges from 15-30%.

ACCESS TO DATA:

All the Google-owned services have access to the all data giving competitive advantage as a result of having access to this downstream competitors’ data set. Google would be able to use this information to enhance its offerings and more effectively target its potential clients. On the other side, the downstream rivals wouldn’t have access to the entire data set, which would hurt their ability to compete;[22] as can be inferred from the clause 9.2 of the DDA,[23] and also from the “Share usage & diagnostics information with Google” as explained on the Google Play’s Support page itself.[24] From the very insurgence of the digital marketplace access to data have been both an enabler and driver of competition and like any tool it serves the competitive as well as the anti-competitive services. There are companies like Google in at this very instance we can see that it misused their data access and companies not being careful not to abuse their control over the data will harm consumer welfare as well as limit the competition.

INNOVATION AND BARRIER TO ENTRY:

The GPBS has an adverse effect on the even though Google argues that GPBS as evident from its averments that it aids in levelling the playing field for app developers and stops monopolistic practices by app shops. On the other hand, while in reality as accepted by the commission as well GPBS stifles innovation by preventing developers from experimenting with fresh business models and sources of income.[25] The same argument is forwarded with respect to barrier to entry as it raises barriers to entry for competitors and inhibits developers’ capacity to provide alternative payment systems, Google’s requirement that app developers utilize its billing system reduces competition and choice for app developers and customers.[26]

UPI

There was another issue of UPI, Google has made only itself available to the intent flow technology while the other UPI only have access to the collect flow technology, to differentiate between in intent flow and collect flow in simple terms would be that, intent flow is a connected chain of steps, user-friendly and simple while collect-flow technology is a broken chain of steps which are disconnected with each other,[27] through this this Google was discriminated between developers of “similarly placed apps, equally placed transactions”.[28] While rejected the last contention as the option of pre-installation is available to all the others just because one utilizes it does not make it abuse of dominant position.

LIMITATION TO THE JUDGEMENT:

The main aim of the competition law is to maintain the following aspects:

1. Prohibition of anti-competitive agreements
2. Prohibition of abuse of dominant position
3. Merger control
4. Consumer protection

When any practice which is in contravention of any of the point and is having an adverse-effect on market competition is an anti-competition practice.[29]

With the rise of the e-commerce and digital marketplace there has been a sharp rise in anti-competitive practice like price-fixing, predatory pricing, Exclusive dealing, tying and bundling, abuse of market power.

As said by Ashok Kumar Gupta, chairman of Competition Commission of India that, “Digital markets are epicenters of technological innovation but lately they have become zones of “entrenched and unchecked dominance”,[30] all this has been possible due to the presence of lacunae in the act of competition law itself. Some of the lacunae are:

LACUANE 1: “RELEVANT MARKET IN DIGITAL MARKET PLACE”

The “relevant market” defined in Indian Competition law,[31] is based on the geographic region as in Section 2(s),[32] and the nature of product or service being offered as in Section 2(t),[33] which is ingenious only in case of the single side transaction, but does not take into account the interconnectedness of the sellers on each other which occurs in a multi-side transaction. There are substantial differences between a multi-side transaction and a single side transaction such as the unlike the traditional market where there was a seller and a buyer, here there can be multiple buyer as well as seller and may at times for one buyer to earn money there has to be involvement of other buyer, all of the people interact through a platform which is to say there is an intermediary role and there is a degree of the network effect, there are pricing models and even risk allocation.[34]

The biggest limitation to Indian Competition Law is the Multi-sided transaction as it is not possible to find the “relevant market” based on the available test, when looking at judicial procurements we see that courts have only recognized multi-sided nature of platform,[35] but have not adopted any means to aid the situation as can be seen from the subsequent judgement including Xyz v. Alphabet Inc.,[36] where to the CCI did not give any weightage to the multi-sided nature of the app store which connects the smartphones users to app developers just applying the tradition test of substitutability and geographic region just gave three separate relevant market and had delineated between market for licensable mobile operating system for smart mobile devices and the market for app store for Android OS.

Keeping in mind the past inconsistent judicial procurements with respect of “relevant market” in competition law ranging from cases such as Matrimony.Com Limited vs Google LLC & Ors,[37] Make My Trip case,[38] to contemporary cases such as Harshita Chawla,[39] Delhi Vyapar Mahasangh cases.[40]

LACUNAE 2: DETERMINATION OF DOMINANT POSITION AND ABUSE OF POWER BASED ON SHARES:

Market share measures the percentage of total sales or revenue in a market that a company controls, but it does not take into account other factors that can affect a company’s ability to exercise market power, such as barriers to entry, network effects, economies of scale, and access to data or other resources. Even though, in the judgement the court while accessing the case of Xyz v. Alphabet Inc.,[41] the court had taken into account other factors such as access to data, entry barriers, etc. but had clearly stated that the Commission is of the view that market share is one of the primary though not determinative parameters to assess dominance in a relevant market.[42] Accepting market share as a dominant factor to access the dominance in the market place can be very misleading in the current age witnessing the rise of e-commerce and digital market place as mentioned above.

CONCLUSION:

To sum up, the key takeaway from this article is that GPBS was anti-competitive in nature and is one of the major accomplishment of the CCI in identifying the issue and then delivering the judgement it in a very detail and a descriptive manner had discussed the issue while shedding light to the aspects of discriminatory practice, access to data and even to the effect of innovation and the barrier on entry, while also highlighting the second clubbed issue of UPI which was discussed then afterwards highlights the lacunae which the decision itself suffers from and through this highlights lacunae we can clearly see the way forward which is, accepting and understanding our own shortcomings which is that unlike other countries with competition law India still falls a bit short, India as a way forward just as a suggestion can take two different ways like:

1. Can pass a similar ruling as the seminal ruling of Ohio v. Amex, the CCI can take into account the feedback effects and competitive constraints in transaction and non- transaction platforms which is unique to the multi-side transaction,[43] or
2. Can either join or create something similar to the Digital Markets Act in the EU,[44] so that the there is a separate legislation to deal with digital market place altogether.

While at the current juncture though there is the Competition (Amendment) Bill, 2022, which a has passed both the Lok Sabha as well as the Rajya Sabha on March 29, 2023 and April, 3 2023 respectively and one of its key issue is analysing digital market, so the India may in the future successfully tackle issues such as which arose at the current instance.[45]

Author : Arkadeep Poddar, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at IIPRD

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[1] JSTOR: INDIAN COMPETITION LAW: GLOBAL CONTEXT, by B.S. Chauhan, published in Journal of the Indian Law Institute, July-September 2012, Vol. 54, No. 3 (July September 2012), pp. 315-323, at page 315,  available at, https://www.jstor.org/stable/44782475, (last visited 14^th May, 2023).

[2] The Information Technology Act, 2000.

[3] The Indian Contract Act, 1872.

[4] The Consumer Protection Act, 2019.

[5] The Competition Act, 2002.

[6] The Payment and Settlement Systems Act, 2007.

[7] Master Direction on Digital Payment Security Controls, Reserve Bank of India, available at, https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12032&Mode=0, (last visited 14^th May 2023).

[8] The Copyright Act, 1957.

[9] The Trademark Act, 1999.

[10] The Patents Act, 1970.

[11] Xyz and Ors. V. Alphabet Inc. and Ors., 2022 SCC OnLine CCI 63.

[12] Xyz and Ors. V. Alphabet Inc. and Ors., 2022 SCC OnLine CCI 63.

[13] The Competition Act, 2002, § 4(2)(a)(i).

[14] The Competition Act, 2002, § 4(2)(a)(ii).

[15] The Competition Act, 2002, § 4(2)(b)(ii).

[16] The Competition Act, 2002, § 4(2)(c).

[17] The Competition Act, 2002, § 4(@)(e).

[18] Xyz and Ors. V. Alphabet Inc. and Ors., 2022 SCC OnLine CCI 63, ¶ 249.

[19] Google Play, Google Play’s payment policy: Google Terms and Services, § 4, Rights and Restrictions, available at, https://play.google.com/about/play-terms/index.html, (last visited on 14^th May, 2023).

[20] Xyz and Ors. V. Alphabet Inc. and Ors., 2022 SCC OnLine CCI 63, ¶ 29.

[21] Competition Commission of India v. Fast Way transmission Pvt. Ltd., Civil Appeal No. 7215 of 2014.

[22] Xyz and Ors. V. Alphabet Inc. and Ors., 2022 SCC OnLine CCI 63, ¶ 282, 284.

[23] Google Play Developer Distribution Agreement, clause 9.2, available at, https://play.google.com/about/developer-distribution-agreement.html, (last visited on 14^th May, 2023).

[24] Google Play Support page: “Share usage & diagnostics information with Google”, available at https://support.google.com/accounts/answer/6078260?hl=en, (last visited at 14^th May, 2023).

[25] Xyz and Ors. V. Alphabet Inc. and Ors., 2022 SCC OnLine CCI 63, ¶ 314.

[26] Xyz and Ors. V. Alphabet Inc. and Ors., 2022 SCC OnLine CCI 63, ¶ 186, 193.

[27] Xyz and Ors. V. Alphabet Inc. and Ors., 2022 SCC OnLine CCI 63, ¶ 354.

[28] Xyz and Ors. V. Alphabet Inc. and Ors., 2022 SCC OnLine CCI 63, ¶ 355.

[29] Competition Commission of India v. Bharati Airtel Limited and Ors. (2018) SCC OnLine SC 2678.

[30] Khurana and Khurana Advocates and IP Attorneys, The Antitrust issues in digital markets – Modifiable anti-competitive conduct of Artificial Intelligence, published at 12^th October, 2021, available at, https://www.khuranaandkhurana.com/2021/10/12/the-antitrust-issues-in-digital-markets-modifiable-anti-competitive-conduct-of-artificial-intelligence/, (last visited at 14^th May, 2023).

[31] The Competition Act, 2002, § 2(r).

[32] The Competition Act, 2002, § 2(s).

[33] The Competition Act, 2002, § 2(t).

[34] Business Model Analyst: Mutisidedx Platform Business Model, available at,  https://businessmodelanalyst.com/multisided-platform-business-model/, (last visited 14^th May, 2023).

[35] Vijay Gopal Vs. Big Tree Entertainment Pvt. Ltd. (BookMyShow) and Ors., 2022 SCC OnLine CCI 36.

[36] Xyz and Ors. V. Alphabet Inc. and Ors., 2022 SCC OnLine CCI 63.

[37] Matrimony.Com Limited vs Google LLC & Ors, 2018 SCC OnLine CCI 1.

[38] Makemytrip India Pvt. Ltd. MMT and Another V. Competition Commission of India and Others, 2022 SCC OnLine Del 4440.

[39] Harshita Chawla (informant) Whatsapp Inc. and Facebook Inc. v. Competition Commission of India, 2020 SCC OnLine CCI 32.

[40] Amazon Seller Services Private Limited, represented by its Authorized Signatory Mr. Rahul Sundaram v. Competition Commission of India, represented by its Secretary and Others, 2021 SCC OnLine Kar 12626.

[41] Xyz and Ors. V. Alphabet Inc. and Ors., 2022 SCC OnLine CCI 63.

[42] Xyz and Ors. V. Alphabet Inc. and Ors., 2022 SCC OnLine CCI 63, ¶ 164.

[43] IndiaCorpLaw: Delineating Relevant Market for Multisided Platforms: Transaction vs Non-Transaction Platforms, by Harshit Upadhyay and Sanigdh Budhia, publishe at October 26, 2022, available at, https://indiacorplaw.in/2022/10/delineating-relevant-market-for-multisided-platforms-transaction-vs-non-transaction-platforms.html, (last visited 14^th May,2023).

[44] European Commission: The Digital Markets Act: ensuring fair and open digital markets, available at https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/europe-fit-digital-age/digital-markets-act-ensuring-fair-and-open-digital-markets_en, (last visited 14^th May, 2023).

[45] PRS Legislative Research: The Competition (Amendment) Bill, 2022, by the Ministry of Finance, available at, https://prsindia.org/billtrack/the-competition-amendment-bill-2022, (last visited on 14^th May, 2023).

Understanding Obscenity Laws: Tests, Judicial Interpretations, and Media Impact

Introduction

Obscenity laws have a significant impact on the media and expression landscape, determining the parameters of what is considered appropriate for general public consumption. By prohibiting content that is deemed offensive, morally repugnant, or potentially harmful to public decency, these laws aim to protect society values. But the definition of obscenity is not always the same,  it can be interpreted differently and changes over time in response to changing social mores and cultural standards. Therefore, navigating the complicated world of media content regulation requires an understanding of the specifics of obscenity laws and how the courts interpret and apply them. Examining obscenity laws provides insightful information about the delicate balance between individual liberties and communal values in the context of media and communication, from historic court cases that have shaped judicial interpretations to the ongoing discussions about the need to preserve public morality versus the right to freedom of expression.

The concept of the term obscene

The term “obscenity” originates from the Latin word “obscaena,” which originally referred to elements of a theatrical production that were kept offstage. Its modern usage encompasses things considered offensive or morally objectionable, extending beyond sexual content to include various forms of repugnant behavior or expression. It can be employed metaphorically to critique unethical financial gains as “obscene profits” or to condemn the immorality and brutality of war as “the obscenity of war.” In these contexts, “obscenity” denotes strong disapproval, highlighting the extreme offensiveness or immorality of the subject matter. The precise meaning of obscene is though still very ambiguous.[1] Though it can be explained as material, language, or behavior that is considered offensive, repulsive, or morally repugnant by prevailing societal standards of decency and morality. It typically involves content that is sexually explicit, vulgar, or otherwise deemed inappropriate for public consumption due to its explicit or graphic nature. However, obscenity can also extend to other forms of expression or conduct that violate commonly held moral or ethical principles, such as violence, cruelty, or gross disregard for human dignity. The definition of obscenity may vary depending on cultural, social, and legal contexts, and it often involves subjective interpretations based on individual perspectives and community standards. It is also important to note that Defining obscenity is Highly context-driven and could be specific to some parts of the world, what might be considered obscene in one place might not be considered obscene elsewhere.[2]

Several tests have evolved through various judgments that lay down what qualifies as obscene and what does not.[3]

Tests for What is Considered Obscene.

One prominent test used to assess obscenity is the Miller test, named after the U.S. Supreme Court decision in Miller v. California.. This test consists of three parts: the test states that “Firstly, whether the work, taken as a whole, appeals to the prurient interest according to contemporary community standards. Secondly, whether the work depicts or describes sexual conduct in a patently offensive way, as defined by applicable state law. And thirdly, whether the work lacks serious literary, artistic, political, or scientific value. The work is deemed obscene only if all three conditions are met.”[4]

Another significant test is the Hicklin test, which originated from the English case Regina v. Hicklin This test focuses on ascertaining whether the tendency of the material is to deprave and corrupt those exposed to it. It assesses the potential to corrupt individuals open to immoral influences and generally takes a broad view of what could be considered obscene.[5]

In the United States, the Roth test is also used, named after the case Roth v. United States. This test evaluates obscenity from the perspective of the average person, applying prevailing community standards. It considers how contemporary societal values influence perceptions of obscenity, recognizing that standards may evolve over time.[6]

Judicial interpretations of Obscenity in Indian Courts.

The interpretations of obscenity in India started with the case of Ranjit D. Udeshi v. State of Maharashtra, the Supreme Court of India was tasked with ruling on a matter related to obscenity. Ranjit Udeshi,[7] a partner in a firm owning a book stall in Bombay, faced prosecution under Section 292 of the Penal Code for selling and possessing copies of D.H. Lawrence’s novel “Lady Chatterley’s Lover,” which was deemed obscene under Indian obscenity laws due to its suggestive content. Udeshi was subsequently convicted and fined 20 rupees or sentenced to one week’s simple imprisonment. Dissatisfied with the verdict, the petitioner sought to challenge the constitutionality of Section 292[8] of the Penal Code. Justice Hidayatullah introduced a modified version of the Hicklin test. In his judgment for the Court, he outlined three key adjustments to the original English Hicklin test. Firstly, he emphasized that the mere presence of sex and nudity in art and literature could not automatically be considered evidence of obscenity; additional factors were required to establish obscenity. Secondly, he stressed that the depiction of sex alone was insufficient to be deemed as depraving or corrupting. Lastly, he highlighted the importance of assessing the work as a whole, considering both obscene and non-obscene elements, and determining whether the non-obscene parts outweighed the obscene ones, or if the obscenity was so minimal that it could be disregarded. The third modification to the test involved introducing a defense against charges of obscenity if the publication in question served the public good. This change was implemented through an amendment to the Penal Code in 1969. Under this amended law, the court was required to evaluate the entirety of the work. In the case of Samaresh Bose v. Amal Mitra,[9] the Court was tasked with determining whether the Bengali novel Prajapati was obscene due to its portrayal of sexual encounters and use of vulgar language. While the trial court deemed the matter obscene, the Supreme Court disagreed with this finding and noted that

“The concept of obscenity is moulded to a great extent by the people who are expected to read the book. It differs from country to country, depending upon the standards of morality. Even the outlook of a Judge may differ from another Judge as it is a matter of objective assessment of the subjective attitude of the Judge hearing the matter”

And later The Court also clarified that there is a distinction between vulgarity and obscenity.[10] Until 2014, both the Supreme Court and the High Courts in India applied the Hicklin test. However, in 2014, the Supreme Court officially abandoned this test in the case of Aveek Sarkar v. State of W.B[11]. In this case, the Court was tasked with determining the obscenity of a semi-nude photograph featuring a renowned German tennis player with his dark-skinned fiancée. Originally published in a German magazine, the photograph was subsequently reproduced in Sportsworld and Anandabazar Patrika. The Court concluded that simply depicting a nude or semi-nude woman in a picture did not constitute obscenity.

Kinds of Media on which the obscenity laws apply.

Obscenity laws are applicable to a diverse array of media formats, spanning print, broadcast, digital, and artistic realms. In print media, newspapers, magazines, books, and pamphlets fall under the purview of obscenity regulations, governing both written and visual content. Broadcast media, including television and radio, are subject to these laws, impacting broadcasts, advertisements, and programs aired to the public. With the advent of the internet, obscenity laws extend to digital platforms such as websites, social media, and streaming services, encompassing text, images, videos, and other digital content. Furthermore, motion pictures, television shows, videos, and other visual media are scrutinized for compliance with obscenity regulations. Artistic expressions, ranging from paintings and sculptures to performances and exhibitions, are also subject to these laws if they contain sexually explicit or offensive material. Additionally, advertisements displayed through posters, billboards, and commercials may be regulated for obscenity. Even live performances, such as stage plays, concerts, and public events, can come under scrutiny if they feature content deemed obscene. Overall, obscenity laws aim to regulate and control content that is considered offensive, morally objectionable, or harmful to public decency and morals across a wide spectrum of media formats.[12]

Impact and necessity of controlling obscenity from media

Controlling obscenity in the media is deemed necessary due to its significant impacts on individuals and society at large. One crucial aspect of this necessity lies in safeguarding public morals and values. Obscene content has the potential to undermine societal norms, eroding moral standards and cultural integrity. Additionally, regulating obscenity is essential for protecting vulnerable audiences, particularly children and adolescents, from exposure to harmful material that could lead to psychological distress or inappropriate behavior. Moreover, controlling obscenity aims to prevent harm by discouraging the normalization of detrimental behaviors such as violence, substance abuse, and sexual exploitation. It also plays a role in promoting public health by combatting the dissemination of unrealistic or harmful attitudes towards sexuality and relationships. Furthermore, regulating obscenity contributes to the preservation of social harmony by mitigating the dissemination of divisive or inflammatory narratives that could incite social unrest. While ensuring the regulation of obscenity, it’s also imperative to uphold the principles of freedom of expression, striking a balance between protecting individuals and maintaining liberties. In essence, controlling obscenity in the media serves to uphold public morals, protect vulnerable audiences, prevent harm, promote public health, preserve social harmony, and safeguard freedom of expression within legal and ethical boundaries.

Conclusion

Examining obscenity laws highlights how societal values and the right to free speech must be balanced when controlling media content. Courts attempt to negotiate the difficult terrain of what constitutes obscenity through judicial interpretations in landmark cases and tests such as the Miller and Hicklin tests. These laws raise significant concerns about censorship and individual liberties even as they work to safeguard vulnerable audiences and uphold public morals. It is necessary for legislators and attorneys to modify these laws to reflect modern values and protect fundamental rights as society views continue to change. In the end, the discussion around the control of obscenity in the media is still dynamic and ongoing, reflecting how ethical issues and cultural norms are constantly evolving.

Author : Srushti Joshi, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at IIPRD

References.

Cases

1. Aveek Sarkar v. State of W.B.
2. Regina v. Hicklin
3. Ranjit D. Udeshi v. State of Maharashtra
4. Roth v. United States
5. Samaresh Bose v. Amal Mitra
6. Bobby Art International v. Om Pal Singh Hoon & Anr.
7. Jagdish Jugtawat v. State of Madhya Pradesh
8. K.A. Abbas v. Union of India
9. M/s Super Cassettes Industries Ltd. v. Board for Film Certification
10. Raj Kapoor v. Laxman
11. State of Maharashtra v. Firoz Nadiadwala
12. State of Maharashtra v. Mohammed Hanif Quareshi

Books

1. Singh, Mahendra Pal. V.N. Shukla’s Constitution of India. Vol. [Volume Number], Eastern Book Company, 13th ed., 2020.
2. M P Jain, Lexis Nexis’s Indian Constitutional Law (HB) (2 Volumes), 8th ed. (Lexis Nexis, November 2022

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[1] Ramanatha Aiyar, P. The Law Lexicon Of British India, 1940.

[2] William B. Lockhart, Robert C. McClure, Literature, the Law of Obscenity, and the Constitution, Minnesota Law Review,1954.

[3] Obscene Publication Act, 1959, S. 13.

[4] Marvin Miller v. State of California, 1973 SCC OnLine US SC 156 : 37 LEd2d 419 : 413 US 15 (1973).

[5] R. v. Hicklin, (1868) LR 3 QB 360.

[6] Roth v. United States of America, 1 L Ed 2d 1498 : 354 US 476 (1957).

[7] Ranjit D. Udeshi v. State of Maharashtra, AIR 1965 SC 881.

[8] The Indian Penal Code, 1860, S. 292.

[9] Samaresh Bose v. Amal Mitra, (1985) 4 SCC 289.

[10] Ibid.

[11] Aveek Sarkar v. State of W.B., (2014) 4 SCC 257.

[12] Coleman A. Young v. American Mini Theatres Inc, 49 L Ed 2d 310 : 427 US 50 (1976).