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’21 Week 12 (19/03 – 26/03)

This week saw major developments in the legal arena with the Supreme Court of India deciding on multiple important cases such as the Tata Sons case and the Parliament passing the Government of National Capital Territory of Delhi Bill. We shall be travelling from India to New Zealand, Turkey and the United States to view various developments in policy, arbitration and intellectual property. Happy Reading!

Greetings! TeLawgram presents a roundup of the biggest legal updates of the past week, and reading material therein, for your perusal. Happy Reading!

India
International
CfPs and Seminars

India

The Supreme Court Bars Charging Compound Interest Or Penal Interest On Any Borrower During a Loan Moratorium

The Supreme Court on 23rd March 2021 observed that compound interest, penal interest or interest on interest cannot be charged for any instalments which were due during the period of loan moratorium which was allowed by the Reserve Bank of India from March 1 to August 31 last year on account of the COVID-19 pandemic. A bench comprising Justices Ashok Bhushan, R Subhash Reddy and MR Shah pronounced the verdict in the case Small Scale Industrial Manufacturers Association (Regd) v. Union of India and connected matters. 

In 2020, the Centre had taken a decision to allow waiver of interest on interest in eight specified categories for loans up to Rupees 2 crores. The Court observed that there is no rationale in the Centre’s policy to limit the benefit of waiver and no justification has been shown to restrict the relief of not charging interest on interest with respect to the loans up to Rs. 2 crores. The Court ruled that if such interest had already been collected, it should be either refunded to the borrower or adjusted towards the next instalments. The bench stated that “there shall not be any charge of interest on interest/compound interest/penal interest for the period during the moratorium from any of the borrowers and whatever the amount is recovered by way of interest on interest/compound interest/penal interest for the period during the moratorium, the same shall be refunded and to be adjusted/given credit in the next instalment of the loan account”.

Suggested Readings:

  1. Click here to read the judgement. 
  2. Click here to read a related judgement that pleaded with the Court to declare the notification as ultra vires.
  3. Click here for RBI notification. 
  4. Moratorium on loans due to Covid-19 disruption,  Vinod Kothari Consultants (Mar. 27, 2020), http://vinodkothari.com/2020/03/moratorium-on-loans-due-to-covid-19-disruption/. 
  5. Anuja Khandelwal, Interest on Interest Waiver: Is the move justified?, (Oct. 05, 2020), https://blog.finology.in/market-news/interest-on-interest-waiver.
  6. Prachi Bhardwaj, Supreme Court says no to total waiver of interest and extension of moratorium period but directs full waiver of compound interest, (Mar. 23, 2021), https://www.scconline.com/blog/?p=246003.

The Supreme Court questions the extended duration of the existence of reservation in our country

A Constitution Bench of the Supreme Court comprising Justices Ashok Bhushan, L. Nageswara Rao, S. Abdul Nazeer, Hemant Gupta and S. Ravindra Bhat, is hearing the petitions challenging the validity of the Maharashtra State Reservation for Socially and Educationally Backward Classes (SEBC) Act, which had extended a 16% reservation for the Maratha community. The Supreme Court on 19th March 2021 raised concerns over the possible inequality as a result of removing the 50 per cent cap on reservations as mandated by the historic Mandal Judgment also known as Indira Sawhney vs Union of India case of 1992. The 5- Judge Bench of while hearing Jaishri Laxmanrao Patil v. The Chief Minister wanted to know the extent of generations till which the system of reservations in jobs and education will continue. The Court cited the Mandal judgement was based on the census of 1931, advocate Mukul Rohatgi stated that the Courts should let the states decide on fixing of reservation quotas in view of the changed circumstances. He put forward various reasons for relooking the judgment since the population has increased many folds and reached 135 crores. The bench observed, “If there is no 50 per cent or no limit, as you are suggesting, what is the concept of equality then. We will ultimately have to deal with it. What is your reflection on that… What about the resultant inequality. How many generations will you continue”.

Suggested Readings:

  1. Click here to read the judgement. 
  2. Pranav Narsaria, Maratha Reservation Case and the 50% limit on reservation: A chance to remove the ambiguity?, (Aug. 11, 2020) https://gnlusrdc.wordpress.com/2020/08/11/maratha-reservation-case-50-limit-reservation-chance-to-remove-the-ambiguity/.
  3. Aishi Barat, Maratha Reservation: A Social Elevation Or Crumpling Constitution, (Dec. 13, 2020), https://pclshnlu.wordpress.com/2020/12/13/maratha-reservation-a-social-elevation-or-crumpling-constitution/.
  4. JAI BRUNNER, Limits on reservation?, (Jul. 24, 2020), https://clpr.org.in/blog/limits-on-reservation/. 
  5.  M. Bagwe &  A. Helekar, AN ANALYSIS OF JUDICIAL PRONOUNCEMENTS ON THE PRINCIPLE OF RESERVATION IN INDIA (Part-I), (last visited 27.03.2021), https://ilscentreforpubliclaw.wordpress.com/an-analysis-of-judicial-pronouncements-on-the-principle-ofreservation-in-india-part-i/.
  6.  M. Bagwe &  A. Helekar, AN ANALYSIS OF JUDICIAL PRONOUNCEMENTS ON THE PRINCIPLE OF RESERVATION IN INDIA (Part-II), (last visited 27.03.2021), https://ilscentreforpubliclaw.wordpress.com/quantum-of-reservation-in-india/.

The Supreme Court rules in favour of Tata & Sons Ltd.

A three-judge bench of the Supreme Court comprising Chief Justice S.A. Bobde, Justice A.S. Bopanna and Justice V. Ramasubramanian, on 26th March, 2021 allowed Tata’s appeal against the NCLAT’s decision to reinstate Cyrus Mistry. Tata & Sons had removed Mistry as their chairman through a resolution in 2016. The Shapoorji Pallonji group filed company petitions against the resolution before the NCLT under Sections 241 and 242 of the Companies Act, 2013, alleging mismanagement by Tata & Sons. The NCLT ruled in favour of Tata & Sons, however, the NCLAT ruled in favour of the Pallonji group.

The Supreme Court delved into the legislative history of Sections 241 and 242 of the Companies Act and observed that tribunals cannot question the legal validity of the removal of a director in petitions involving Section 241.  The Court observed that Tribunals cannot grant relief under Section 242 unless the removal was oppressive or prejudicial. The Supreme Court expressed its disapproval at the NCLAT’s decision to reinstate Mistry as chairman under Section 242 since the reinstatement of directors is barred by Section 14 of the Specific Relief Act. The Court ruled in favour of Tata and found that the company was not managed in a prejudicial manner.

Suggested readings:

  1. Click here for the judgement. 
  2. Umakanth Varottil, Unpacking the Scope Of Oppression, Prejudice and Mismanagement Under Company Law in India (NUS Law Working Paper 2020/020), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3659751 (July 2020).  
  3. Umakanth Varottil, Paper on Shareholder Remedies: Oppression, Prejudice and Mismanagement (July 30, 2020), https://indiacorplaw.in/2020/07/paper-on-shareholder-remedies-oppression-prejudice-and-mismanagement.html. 
  4.  Avinash Kumar, Arbitrability of Oppression and Mismanagement Petitions in India, 36 Statute Law Review 202 (2015).
  5.  Amit Kumar Pathak & Siddadrth Singh, Scope of Sections 397 and 398 of the Companies Act 1956: A Critical Analysis, 2012 Company L.J. 133.

The Supreme Court quashes FIR against Patricia Mukhim 

A two-judge bench of the Supreme Court comprising Justice L. Nageswara Rao and Justice S. Ravindra Bhat on 25th March, 2021 quashed the FIR against Patricia Mukhim, editor of the Shillong Times. An FIR was filed against Mukhim under Sections 153A, 500 and 505(1)(c) of the Indian Penal Code (‘IPC’) for her Facebook post which discussed an attack against non-tribals in Meghalaya which was being investigated. The prosecution alleged that the Facebook post incited communal disharmony. The Supreme Court held that the Facebook post, when read as a whole, expressed the need for equality among tribals and non-tribals in the State of Meghalaya. The Court observed that the mens rea requirement under Section 153A was not met since Mukhim had expressed her disapproval of the government’s actions in the post and had no intention to cause communal disharmony.  The Court observed, “Free speech of the citizens of this country cannot be stifled by implicating them in criminal cases, unless such speech has the tendency to affect public order.”

Suggested readings: 

  1. Click here for the judgement. 
  2. Diya Vaishnav & Nihal Deo, The Peril of Hate Speech in India (Feb. 3, 2020), https://criminallawstudiesnluj.wordpress.com/2020/02/03/the-peril-of-hate-speech-in-india/. 
  3. Maya Mirchandani, Ojasvi Goel & Dhananjay Sahai, Observer Research Foundation, Encouraging Counter-Speech by Mapping the Contours of Hate Speech on Facebook in India (2018).
  4. Siddharth Narain, Hate Speech, Hurt Sentiment, and the (Im)Possibility of Free Speech, 51 Economic and Political Weekly 119 (2016). 
  5. Chinmayi Arun & Nakul Nayak, Preliminary Findings on Online Hate Speech and the Law in India (Berkman Klein Centre Research Publication No. 2016-19), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2882238.

The Parliament passes the Government of National Capital Territory of Delhi (Amendment) Bill, 2021

The Lok Sabha, on 22nd March, 2021, passed the Government of NCT of Delhi (Amendment) Bill, 2021. Following this, the Rajya Sabha passed it on 24th March, 2021. The bill was first introduced in the Lok Sabha on 15th March, 2021. It seeks to amend the Government of National Capital Territory of Delhi Act, 1991.

The Act lays down the framework for the functioning of the Legislative Assembly and the government of the National Capital Territory (NCT) of Delhi. Some of the key highlights of the Bill are: (i) that the term “government” referred to in any law made by the Legislative Assembly will imply Lieutenant Governor (LG); (ii) Section 3 of the Bill seeks to extend the powers of the Lieutenant Governor through an amendment of Section 24 of the 1991 Act, which deals with “Assent to bills”; (iii) Changes are sought to be brought to Section 33 of the 1991 Act so that the Legislative assembly cannot make any rule to enable itself or its committee to consider in matters of the day-to-day administration of Delhi or conduct inquiries in relation to administration. Notably, this provision is also sought to be made retrospective in its effect; (iv) The Bill adds that on certain matters, as specified by the LG, his opinion must be obtained before taking any ‘executive action’ on the decisions of the Minister/ Council of Ministers.

The Centre has proposed this amendment to give effect the Supreme Court’s judgement in Government of NCT of Delhi v. Union of India.

Suggested Readings:

  1. Read the Government of NCT of Delhi Act, 1991 here.
  2. Read the proposed Amendment here.
  3. Government of NCT of Delhi v. Union of India, (2018) 8 SCC 501.
  4. Niranjan Sahoo, Statehood for Delhi: Chasing a Chimera (June 15, 2018), https://www.orfonline.org/research/41571-statehood-for-delhi-chasing-a-chimera/.
  5. Akshay Marathe, Delhi: A Case for Full Statehood (July 9, 2018), https://lawschoolpolicyreview.com/2018/07/09/delhi-a-case-for-full-statehood/.

International

India files appeal against $1.4-bn Cairn arbitration award

India has appealed against the Hague Arbitration Tribunal’s verdict that overturned its demand for Rs. 10,247 crore in back taxes from Cairn Energy Plc. For the second time in three months, India has refused to accept an international award against retrospective taxation. The appeal against the three-member tribunal at the Permanent Court of Arbitration at The Hague invalidating India’s claim on Cairn Energy comes weeks before UK Prime Minister Boris Johnson’s visit to India.

The verdict from Hague has been a huge setback to India. The tribunal’s 582-page detailed verdict has asked India to return USD 1.2 billion-plus interest and cost to Cairn. Finance Minister Nirmala Sitharaman had indicated that the award should be appealed because it questioned India’s sovereign powers to levy taxes. The Ministry holds that taxation is not a subject of bilateral investment treaties, like the UK-India Bilateral Investment Treaty. Cairn had sought to rescind the tax demand raised. However, the arbitration award had specifically made it clear that the judgment’s base was not a challenge to the 2012 law or India’s sovereign right to taxation. Cairn had moved the courts in nine countries to enforce the award against India. The award has already been recognised by courts in the US, the UK, Netherlands, Canada, and France. The same is in the process in Singapore, Japan, the United Arab Emirates, and the Cayman Islands.

Suggested Readings

  1. Kshama A. Loya, Moazzam Khan & Vyapak Desai, Cairn V. India – Investment Treaty Arbitration, 11 National Law Review 8 (2021).  
  2. Cairn Energy PLC and Cairn UK Holdings Limited v. The Republic of India, PCA Case No. 2016-07.
  3. Trisha Mitra, Forum Conveniens? India’s Tryst with Anti-Arbitration Injunctions (Sept. 9, 2016), https://ssrn.com/abstract=2898923.
  4. Tanya Chadha and Steve Nichol, Cairn Energy v India: A lesson in BIT rights and enforcement (Feb. 11, 2021), https://www.lexology.com/library/detail.aspx?g=5fc468b6-42cc-4ce6-8392-03d44419a063. 
  5. Find background information about the dispute here.

Grand jury charges Proud Boys leaders with conspiracy in Capitol attack

A federal grand jury charged four leaders of the far-right, neo-fascist group called the  ‘Proud Boys’ for conspiring to block the Congress from certifying U.S. President Joe Biden’s election on the day of a deadly assault on the Capitol, according to court papers unsealed on 19th March 2021. The indictment revealed that four Proud Boys leaders have been charged with six counts, including conspiracy, related to the attacks. The indictment alleges that the four leaders carried out conspiracy in part by encouraging others to attend the protest, raising funds through social media, and “obtaining paramilitary gear and supplies.” The Jury pressed charges against the group for conspiring to commit offences or fraud against the United States, for destruction of government property, and for other civil disorder. 

The attack had left five people dead after a mob of then-President Donald Trump’s supporters stormed the building in a failed bid to stop Congress from certifying Biden’s victory. More than 300 people have been charged in connection with the attacks and approximately 20 people associated with the Proud Boys have been charged, while some of the others have been tied to anti-government militias such as the Oath Keepers and the Three Percenters.

Suggested Readings:

  1. Find the indictment here.
  2. Shirin Sinnar,  Pamela S. Karlan and  Joseph Bankman, The Attack on the U.S. Capitol and Ongoing Threats of Political Violence and Hate Groups (Jan 18, 2021), https://law.stanford.edu/2021/01/18/stanford-laws-shirin-sinnar-on-the-attack-on-the-u-s-capitol-and-ongoing-threats-of-homegrown-terrorists-and-hate-groups/.
  3. Rashawn Ray, What the Capitol insurgency reveals about white supremacy and law enforcement, (Jan 12, 2021), https://www.brookings.edu/blog/how-we-rise/2021/01/12/what-the-capitol-insurgency-reveals-about-white-supremacy-and-law-enforcement/.
  4. Niranjan Sahoo, 6th January challenge to 4th of July: US Democracy Needs a Marshall Plan (Jan. 11, 2021), https://www.orfonline.org/expert-speak/6th-january-challenge-to-4th-of-july-us-democracy-needs-a-marshall-plan/. 
  5. Congressional Research Service, Federal Conspiracy Law: A Brief Overview (Apr. 3, 2020), https://fas.org/sgp/crs/misc/R41223.pdf. 
  6. Abraham. S. Goldstein, Conspiracy to Defraud United States, 68 Yale L J. 405 (1959), https://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?article=8693&context=ylj.

New Zealand approves a Bill to provide paid leave after a miscarriage

The Parliament of New Zealand voted unanimously on 23rd March, 2021 to allow mothers and their partners three days of paid bereavement leave following a miscarriage. The employers in the country were already provided paid leave in the instance of stillbirth. However, there were some ambiguities regarding the qualifications. The landmark Bill removes all uncertainties and extends benefits to anyone who loses a pregnancy at any given point of time.  In most countries, people who experience miscarriages are only expected to take sick leave to grieve, forcing them to return to work before they are ready. Supporters of the legislation believe that the Bereavement Bill provides grieving couples with financial stability and paves the way for open discussions around miscarriages and stillbirths, which many find painful and uncomfortable to discuss or seek help.

“This is a bill about workers’ rights and fairness,” tweeted the Labour member of Parliament Ginny Andersen, who presented the bill. She said when she presented the bill that grief that comes with a miscarriage is not a sickness rather, it is a loss and must be considered accordingly. The Parliamentarian criticized the employers that force employees to take sick leave after a miscarriage. The decision makes New Zealand, India, and the Philippines the only countries in the world that mandate paid miscarriage leave.

Suggested Readings:

  1. Find the Bereavement Bill here.
  2. International Labour Organisation, Maternity & Paternity at Work: Law & Practise across the world (last visited: Mar. 27, 2021), https://www.ilo.org/wcmsp5/groups/public/—dgreports/—dcomm/—publ/documents/publication/wcms_242615.pdf. 
  3. Intonal Labour Organisation, Maternity at Work: A review of national legislation (last visited: Mar. 27, 2021), https://www.ilo.org/wcmsp5/groups/public/—dgreports/—dcomm/—publ/documents/publication/wcms_124442.pdf. 
  4. Sally Maitlis & Gianpiero Petriglieri, Going Back to Work After a Pregnancy Loss (Dec. 5, 2019), https://hbr.org/2019/12/going-back-to-work-after-a-pregnancy-loss. 

Apple to pay $308.5M for digital rights management patent infringement

The US District Court for the Eastern District of Texas ruled that Apple Inc. must pay $308.5 million to Personalized Media Communication (PMC) for infringing their digital rights management patent.

In 2015, PMC sued Apple alleging that they infringed PMC’s patent with streaming technology such as FairPlay. Apple challenged the validity of the patent, and the US Patent and Trademark Office (USPTO) determined that the patent was invalid. In March 2020, the Board’s decision was reversed by the US Court of Appeals for the Federal Circuit. The US District Court for the Eastern District of Texas denied Apple’s motion for summary judgment in February, 2021 on finding that Apple failed to show that the patent was directed to ineligible subject matter.

PMC is a patent-licensing company and has over 100 issued patents and pending applications. The company only licenses the patents of its founder and Chairman, John Harvey. PMC’s licensees include companies such as Sony and Samsung.

Suggested Readings:

  1. Read the ruling here.
  2. Stefan Bechtold, The Present and Future of Digital Rights Management – Musings on Emerging Legal Problems (2003).
  3. Stephen M. Kramarsky, Copyright Enforcement in the Internet Age: The Law and Technology of Digital Rights Management, 11 DePaul J. Art, Tech. & Intell. Prop. L. 1 (2001).
  4. Tereza Trencheva, Tania Todorova & Ivan Trenchev, Digital Right Management (DRM) and Library Copyright Policy (2011).
  5. Jochen M. Schaefer, IP Infringement Online: the dark side of digital (April, 2011), https://www.wipo.int/wipo_magazine/en/2011/02/article_0007.html .
  6. Timothy R. Holbrook & Lucas S. Osborn, Digital Patent Infringement in an Era of 3D Printing, 48 UC Davis 1319 (2015).

Turkey announces withdrawal from violence against women treaty

President Tayyip Erdogan withdrew Turkey from the Council of Europe Convention on preventing and combating violence against women and domestic violence, popularly known as the ‘Istanbul Convention’, prompting protests and criticism from those who claim the Convention was necessary to tackle rising domestic violence. The withdrawal from the Convention, by a presidential decree was announced via the official gazette.

The decision is said to be a huge setback to women’s rights. The Convention was the first legally binding instrument in Europe that battled for violence against women, and Turkey, in 2012, was the first country to ratify the Convention in 2011. No official reasons were provided for making the decision. However, sources suggest that the Erdogan government plans to tackle the rising femicides and domestic violence by domestic laws. Opponents of the Convention claim that it encourages divorce and undermines traditional family values. Thousands took to the streets in protest of this decision, calling on President Erdoğan to reverse his decision. Poland had also announced its decision to withdraw from the Convention in July 2020.

Suggested Readings:

  1. Find the Istanbul Convention here.
  2. Find the official statement of Turkey’s withdrawal from the Convention here.
  3. Find a brief overview of the Convention here.
  4. Gursimran Kaur Bakshi, Women with No Women’s Rights in Turkey (Sept. 17, 2020), https://blogs.lse.ac.uk/wps/2020/09/17/women-with-no-womens-rights-in-turkey/. 
  5. Magdalen M. Wagner, The Decline of Women’s Rights in Turkey: Is it Political Islam…or Tayyip?.Undergraduate Honors Theses. Paper 1069, University of Colorado, Boulder (2016).
  6. Berthe De Vos, The Intent & Importance of the Istanbul Convention (Sept. 11, 2020), https://www.soroptimistinternational.org/the-intent-and-importance-of-the-istanbul-convention/. 

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