Legalities, Illegalities & Myths of Commissioning Surrogacy in India

(BySonali Kusum, Ph.D. Research Scholar, National Law School of India University, Bangalore)

India is called as the ‘surrogacy capital of the world’1. It offers the excellent medical reproductive technologies at the relatively cheapest costs in the entire world along with abundant availability of surrogate mothers, English speaking clinics, staff doctors, in India. One of the most unique feature of Indian surrogacy arrangement is large scale commercialization of surrogacy coupled with absence of any effective or binding statutory law on Surrogacy in India, another attractive feature is the special all inclusive surrogacy package covering not only the cost of ART Treatment but also other related costs like air port pick up, drop, local travel taxi, language translator, lawyer consultation fees, legal documentation, site seeing among others for all foreign intending couples in India. With these favorable factors, India is witnessing rampant practice of surrogacy in India, it is estimated that surrogacy has developed as an Industry generating US$2-3 billion annually and it continues to grow.2

While the practice of surrogacy multiplying tremendously, the laws regulating the same awaiting enactment and are still in pendency and during the pendency of law, present there is no statutory law on surrogacy in India but only a draft ART Bill 2008 revised as ART
Bill 20103, which is revised as the ART Bill 20134 with necessary modifications or additions, On the other hand, a series of legal instruments are being formulated for better regulation of surrogacy, one of such is the recent Home Ministry Guidelines 2013 directed towards the foreign nationals seeking to avail surrogacy in India. These guidelines are seeking to control the violation of Visa rules for surrogacy and redefines the eligibility criteria by permitting only the heterosexual married couples to avail surrogacy in India.

Under the absence of a binding or effective law in force, host of ambiguities, gaps, inconsistencies have surfaced among these instruments. There is no clear ascertainment of permissible legal action and prohibited legal action. The legal procedures related to the conduct of surrogacy arrangement are not well defined therefore certain myths, misconceptions, confusions have developed over the same. Under the guise of surrogacy a lot of illegal or prohibited activities are also taking place which may result or cause the parties to the surrogacy arrangement liable to punishment or which may criminalize the surrogacy arrangement and defeat the very purpose of objective of surrogacy arrangement.

Keeping with these considerations, it appears highly pertinent that these myths are necessarily corrected or clarified by elucidating the legal facts in order. Accordingly, certain popular myth related to surrogacy are identified for necessary legal correction in compliance with law.

i. Surrogacy is not a life style choice but only a Medical treatment in India:

India permits commercial surrogacy and permits availing the services of surrogate mother or gestational carrier in return for money. Under the Indian proposed/ draft Surrogacy law, Surrogacy is only and strictly available to such infertile couples for who it would not be possible to conceive, gestate or deliver child in regular course and not otherwise5. Surrogacy under the Indian draft law is conceptualized as medical treatment to infertility to be offered only on the sufficient proof of medical infertility after the conduct of the prescribed test and diagnosis5 . Thus surrogacy is certainly not a life style choice or discretion or one of the ways of the couples to have children or attainment of parenthood.

ii. Surrogacy is not the first but the last option to have children in India:

Availing surrogacy or commissioning surrogacy in India is taken as the most readily available option but this is far removed from the reality or the truth.

Under the ART Bill surrogacy is made subject to a series of procedural formalities.
In addition to medical test or diagnosis7, there are other procedural formalities firstly surrogacy is made subject to proved medical tests and counseling or diagnosis, secondly there is a counseling session for the intending couples as a pre condition for couples seeking to avail surrogacy on the implications of surrogacy, side affects, the success rate, the related advantages or disadvantages of surrogacy, the cost of treatment and the possibilities of availing surrogacy in India or in other foreign countries 8 followed with another round of counseling on the special rights accruing to the surrogate child wherein the intending couples are counseled on the right of surrogate child on attaining 18 years or adulthood to know about the birth process9. Alternatively there is another counseling session for the couples on the possibility of adoption over the option of availing surrogacy10. Thus, there are series of procedural formalities that must be exhausted in order to avail surrogacy in India.

iii. India prohibits Sex selective Surrogacy;

The ART Bill 2010 strictly prohibits the sex selective birth of surrogate child in India in pursuance of this, any advertisement or participation or solicitation, conducting or offering to conduct the same is made a punishable offence under this Bill11. Additionally there is a duty imposed on the intending couples to accept the surrogate children as they are delivered irrespective of sex, disability or defect of any kind and refusal to accept the same by the intending couples makes them liable to punishment12.

It may be relevant to mention the recent case of a very popular Hindi film actor against whom complaint at the local Magistrate court in Mumbai was filed by a Lek Ladki Abhiyaan, a NGO based in Mumbai in December 2013 for allegedly conducting sex determination test or gender test for preferring a male surrogate child which is a violation of PCPNDT Act as well as the relevant provision of ART Bill,13 the actor was also issued legal notice from the Mumbai High Court and necessary legal inquiries were conducted by the Brihanmumbai Municipal Corporation (BMC) in this regard14. Hence, it is evident that sex selective surrogacy is prohibited and punishable offence under this draft law.

iv. Prohibition on availing twin surrogates or gestational carriers by the same
intending couple :

It is assumed that India offers the only choice of availing the services of two surrogate mothers at the same time by one intending couple to ensure maximum possibility birth of surrogate children as the successful outcome of surrogate pregnancy. This practice of availing the services of twin surrogates simultaneously is popularly called as twiblings 15 though much against the law this is being advertised by many fertility clinics across India on their websites in order to lure more clients particularly more of the foreign clients.

The relevant provision of ART Bill strictly prohibits this, the ART Bill expressly stipulates that the intending couple are permitted to avail the services of only one surrogate at one time16 as well coupled with another negative stipulation that there can not be simultaneous transfer of embryos in two or more than one women at the same time for the same intending couples. 17

Reading from the provision of the draft law, the trend of twibling is not legal rather a prohibited practice under the law.

V. Surrogacy is not a choice for the intending couples to selectively choose or abort
the surrogate child:

It is viewed that it is the choice of the intending couples to selectively abort the surrogate child as and when they feel so based on their individual discretion as they have paid for availing this surrogacy but the draft law differs on this point. The surrogacy law permits for termination of surrogate pregnancy through fetal reduction18 only under certain defined conditions after appropriate counseling for avoiding multiple pregnancies which poses risk to the health and survival of both the surrogate mother and the surrogate child19. Further, the sole decision making with respect to fetal reduction is solely vested with the doctor and not with the intending couple.

This is also a misconceived notion that it is the discretion of the intending couples that they may refuse to take the custody of child if delivered with any abnormality or defect or being more than one in number subsequent to birth of the child. To the contrary, the Bill makes it legally mandatory on the part of intending couples to accept the custody of surrogate child as they are born despite their health condition and number and refusal to comply with the same makes it a legally punishable offense in India under the law.

Vi. Surrogate mothers are not allowed to breast feed the surrogate child:

India has legalized commercial surrogacy accordingly the law permits the gestational services to be availed in return for monetary payment20 but not the nursing services of surrogate mothers.

Indian ART Bill prohibits the surrogate mother from breast feeding the surrogate child by making the immediate surrender of the custody of surrogate child by the surrogate mother to the intending couples at the birth and complete relinquishment of all guardianship rights over the surrogate child 21 thus the surrogate mother is prevented from breast feeding the surrogate child. Though this provision is criticized as it amounts to depriving the surrogate child from the most significant nutrition leading to hampering early growth and development of child.

Alternatively, the fertility clinics or doctors recommend the alternative options of Breast Banks, Formula feeds. Along with the option for the intending mother to undergo hormonal treatment for the production of milk in order to breast feed the child self.

Vii. Surrogacy agreement is not universally legally binding instrument:

The ART Bill or the draft law provides for entering into surrogacy agreement by the intending couples and the surrogate mother22 in order to initiate the surrogacy arrangement and gives legally being effect to this agreement within India. The Supreme Court judgment of India in the landmark case of Baby Manji23 upheld the surrogacy agreement as the governing instrument wherefrom the rights and obligations of both parties arise in the absence of a
binding law.

But this agreement is not binding outside India or in foreign nation and thereby the agreement may not have any legal effect rather it is a void. Accordingly the terms and conditions of the agreement have no effect as well. This may led to legal complexities or issues or complications and render the enforceability of surrogacy arrangement and the enforceability of legal rights and duties from the agreement questionable! Hence, it is recommended that the foreign intending couples may consult the Embassy of their respective nations on the nature, enforceability of surrogacy agreement to avoid unnecessary legal hassles in future.

Viii. Surrogacy in India does not offers designer child:

The Indian draft surrogacy laws permit the couples to avail or outsource both the gamete donors (samples) who may be either as anonymous individual or a friend family of the couple in return for monetary compensation thus implying that the intending couples need not necessarily be the genetic parent or donors of the gametes in all cases.

The ART Bill, the drafts surrogacy law in India permits for selection of gamete donors by the intending couples with due assistance from the ART Bank and correspondingly there is duty imposed on the ART Banks 24 to maintain the records or profiles on the gamete donors and assist the couple 25 . The Bill also permits the import of frozen sperm subject to necessary consent. The main objective of such provision is for therapeutic purpose or treatment purpose to ensure the surrogate child is healthy and disease free. Hence, similar practice of selectively choosing or outsourcing the gametes from the beautiful models, athletes so as to ensure the surrogate child is gifted with special attributes like blue eyes, blonde hair, white skin, exceptional intelligence quotient, sporting strength for creating not a normal child but a child with exceptional features thus the creating a designer child for themselves are banned. But at the same time, the draft law imposes a restriction on the choice of donors based on individual information the skin color, ethnicity among others26 this is to ensure that the choice does not constitute discrimination on, race, colour, ethnic grounds. Such provision is in keeping with the bio medical ethics. It is imperative under the law that surrogacy promise birth of a child but not designer child.

Ix. Foreign Homosexuals,Singles, Live in Partners are not allowed to avail surrogacy
 in India:

With the recent Home Ministry Notification of the year July 201227, all foreign homosexuals are not permitted to commission surrogacy in India, under these guidelines, only the married heterosexuals foreign couple are permitted to avail surrogacy in India and lays down or prescribes other necessary VISA conditions to be satisfied in this regard.

Though the provision of the ART Bill 2010 permits surrogacy for all including single, homosexuals, Live in partners with the use of permissive or liberal terms like relations in nature of marriage, or individuals or couples or partners or all.28 But this Home Ministry Notification imposed strict restriction on the same and the latter has been given immediate effect since notification and held binding over and above any such regulation or guidelines of Bill in this regard.

The recent case involving a Sudanese single national before the Punjab Haryana HC of April 2014 expressly held the Home Ministry Guidelines as the binding law and over and above any other regulations in this regard and in compliance of this law/Guidelines refused the single from availing surrogacy in India and reinforced Home Ministry Guidelines29.

The law as it stands today, at present, only the married couples both the foreigners and nationals are permitted to avail surrogacy in India not the homosexuals either Indian or foreign.

X. Surrogate child born in India are not take home babies:

Indian draft surrogacy law provides for direct naming of the intending parents in the birth certificate of the surrogate child30 thus vesting the legal parentage of the surrogate child with the intending parent at the time of birth. Prima facie, it appears as the most comprehensive and the most definite approach to the ascertainment or determination of parenthood, but there are many limitations and legal issues in the same. Though within the geographical territory of India such birth certificate may have legal effect, but this may not receive legal recognition, enforceability of birth certificate (issued to the surrogate child in India) in other foreigner jurisdiction, depending on the permissible or prohibitory nature of surrogacy law existing in such foreign legal jurisdiction.

On these lines of inconsistent surrogacy laws, it may be appropriate or pertinent to mention the landmark case of the Japanese surrogate child Baby Manji 31 who was born to a Japanese couple in India in the year at Anand in Gujarat but subsequent to birth while seeking travel documents including VISA permit for the surrogate child, the determination of legal parentage of the surrogate child came in question, which was met with serious legal glitches due to the inconsistencies in the legal regime of two nations namely India and Japan as surrogacy laws of two nations came into conflict as India permitted commercial surrogacy and the Japan prohibited surrogacy, further Japan recognized only the birth mother as the legal mother where as India recognized intending mother as legal mother not the surrogate mother. Japan refused to recognize the legal parentage of the intending couple over the surrogate child and also refused recognize the birth certificate issued to the surrogate child in India. In that case, during the entire pendency of legal suit which continued for several months the surrogate child's was left parentless and stateless.

Considering such inconsistency or differences in law and the pursuant legal complications, The ART Bill under relevant provision lays down special procedure for the foreign intending couples32 seeking to avail surrogacy in India and provides for a list of necessary documentation and consent required from foreign embassy of the concerned nation permitting or granting legal recognition to such surrogacy arrangement or surrogate child born in India along with a host of basic civil rights guarantee including entry of such surrogate child in the foreign country, issue of travel documents including VISA, Passport and other legal civil rights guarantees for the surrogate child to equate his or her status with any other child of the concerned foreign nation.

The same is reinforced with the Home Ministry Guidelines 33 which also provides for furnishing similar documentation and evidences from the foreign embassy in order to ensure the safe exit of surrogate child.

Hence it is suggested that despite the birth certificate being issued in India, consultation with the foreign embassy and necessary consent from the Embassy of foreign nation is required before entering into surrogacy agreement so that the surrogacy does not cause legal complications subsequently.

Xi. Foreigners can not avail surrogacy on Tourist VISA in India:

As much as India is promoted as the hub of reproductive tourism destination or surrogacy destination, but it does not permit the foreigners to avail surrogacy or commission surrogacy in India on tourist VISA. But permits only medical visa for availing surrogacy in India, this is in compliance with Home Ministry Guidelines 34 under which the foreigners are strictly required to seek Medical VISA for the same and use of tourist VISA for same is a violation of VISA norm in India and makes such couples liable to punishable offense and legal actions.’

Ending Notes:

The list of these identified legal and illegalities mentioned, is not an exhaustive list but an illustrative attempt, there may be a range of illegalities which are being practiced under the garb of surrogacy in the absence of an effective, binding law.

It is also important to observe that the legal void has resulted in ample scope for misuse of law as mentioned above, hence an early statutory enactment on the same with necessary regulatory control mechanism is required to ensure that surrogacy is commissioned in India for legally intended purposes and not otherwise.

Review of Books

Kerala Document Writers’ Licence Rules and Kerala Document Writers’, Scribes’ and Stamp Vendors’ Fund Ac t (Bilingual) –By Adv. G. Gopinathan Nair &
S. Seetharaman Potty – Second Edition – July, 2015 – Published by SAS Publications, Kombara, Ernakulam – 682018 – Price: `250-pp.232.

Kerala Document Writers’ License Rules and Kerala Document Writers, Scribes and Stamp Vendors Welfare Fund Act, 2nd Edition is coming out after an interval of seven years and the authors have thoroughly revised the entire text of the book. Being the first book of its kind, the authors have rendered useful service to those who wish to study in depth and in breadth about the topic. Many portions have been completely rewritten, expanded and discussed in greater depth and all amendments have been incorporated with respected S.R.O. Nos. and dates, making it extremely convenient for the reader to locate the notifications from the respected gazette. The wealth of details, statistics and documentation testify to the scholarly points undertaken by the authors. A book of rare merit, it is a sine qua non for everyone specifically interested in the field.

Supreme Court on Equity, Estoppel, Acquiescence and Waiver – By Surendra Malik and Sudeep Malik – 2015 Edition – Published by EBC Publishing (P) Ltd., 34A, Lalbagh, Lucknow – 226001 – Price: `825/- I-55+492pp.

The word “equity” is derived from the Old French word equite' which itself is derived from the Latin word aequitas which again is derived from aequus which literally means “equal”. Equity is also that branch of law with detailed principles and precedents developed by the Courts of Chancery in England, complementary to the law developed by the Courts of Common Law in England. These separate court systems were merged in England by the Supreme Court of Judicature Act, 1873, and all courts in England became courts of common law and equity, but it is submitted that the two branches of law did not merge. It has also been said most perceptively that “equity doth mitigate the rigours of the law”. This is quite clear from the present selective compendium of case law of the Supreme Court on the general principles of Equity from 1950 till the present, extracted with great care by the SCC Editors since 1950 from myriads of different fact situations, especially if one looks at case law under the following headings:’1.2.2 Equity follows the law/statute: equity can supplement but not supplant the law/statute’, pp. 67 et seq., and ‘1.2.6 Equitable relief/Moulding relief/Balancing of equities/Doing complete justice/Judicial discretion/Individualised Justice/Sympathy/Misplaced sympathy’, pp. 92 et seq. What makes the study of Equity particularly interesting yet complicated in India is that a great deal of what in England is still Judge-made equity has been codified and enshrined in statutes in India. The Trusts Act, 1882 and the Specific Relief Acts, 1877 and 1963 in their entirety are nothing but principles developed by the Courts of Chancery of England codified as statutes in India. Many other Indian statutes and codes contain codified principles of equity, like the Civil Procedure Code, 1908, the Evidence Act, 1872, the Transfer of Property Act, 1882, the Contract Act, 1872 and others. Detailed cross-references have been given at appropriate places so that the reader is guided to the subject-area where the principles are covered in greater detail. A valuable companion work is Supreme Court on Specific Relief Act. The principles of Estoppel are grounded entirely in Equity, though there is a statutory codification of the principle in Ch. VII of the Evidence Act, 1872, contained in three sections, being Sections 115 to 117. The principles of Acquiescence and Waiver are closely allied, though not entirely grounded in Equity as there is an element of intention involved. So it was thought neat and fitting to place the law on these subjects close together and to interlink by means of cross-references, the rulings of the Supreme Court on Equity and Estoppel, Acquiescence and Waiver. The rulings of the Supreme Court on the Evidence Act, 1872 follow immediately thereafter, and the rulings on Sections 115 to 117 of the Evidence Act, 1872 can be referred to in Vol. 40 at pp. 556 et seq. Necessarily there is some overlap and repetition, since as often happens in Indian law, there is a statutory codification of the principle, and yet the statutory codification is not exhaustive and requires a topic-wise treatment. This analytical, systematic and comprehensive work by EBC Publishing Co. is the combined effort of several persons. Merit and accuracy is the result of their dedication. Each Law Library should feel proud of this Publication.

1.   First person, the guardian weekly, India’s booming surrogacy business. 30 December 2009,
http://www.theguardian.com/world/2009/dec/30/india-women.

2.   Priya Shetty, India’s unregulated surrogacy industry,The Lancet, Volume 380, Issue 9854, Pages 1633 - 1634,10 November 2012, http://www.thelancet.com/journals/lancet/article/PIIS0140-6736(12)61933-3/fulltext.

3.   The Assisted Reproductive Technologies (Regulation) Bill - 2010 (Draft), Ministry of Health & Family Welfare Government of India, New Delhi & Indian Council of Medical Research New Delhi, available at http://icmr.nic.in/guide/ART%20REGULAT10N%20Draft%20Billl.pdf (Last visited Feb. 15, 2014) [hereinafter ART Bill 2010].

4.   Assisted Reproductive Technology (Regulations) Bill 2013, §2 (zj), (Tentative Draft)
Date June 27, 2013, Legislative Department, Ministry of Law & Justice, Government of India [hereinafter ART Bill 2013].

      For supporting documents, see also, Kounteya Sinha, Bill Aims To Weed Out Rent-A-Womb Clinics, TNN, Jul. 13. 2012, available   at  http://timesofindia.indiatimes.com/india/Bill-aims-to-weed-out-rent-a-womb-clinics/articleshow/14858687.cms?referral=PM (last visited Feb. 11, 2014);

      See alsoTeena Thacker, After 5 Years, Surrogacy Bill Waits For Its Chance, ASIAN AGE,
Feb. 22, 2014, available at http://www.asianage.com/india/after-5-years-surrogacy-bill-waits-its-chance-212 (last visited Feb. 15, 2014).

5.   ART Bill 2010, supra note 1 at § 20(10).

6.   ART Bill 2010, supra note 1 at § 20(11).

7.   ART Bill 2010, supra note 1 at § 20(10) (11).

8.   ART Bill 2010, supra note 1 at § 20(6).

9.   ART Bill 2010, supra note 1 at § 20(7).

10.  ART Bill 2010, supra note 1 at § 20( 6).

11   ART Bill 2010, supra note 1 at § 37(1)(3).

12.  ART Bill 2010, supra note 1 at § 34(11)

13.  PTI Mumbai, Case filed against Shah Rukh Khan for gender test of surrogate son Abram, indianexpress, Aug 09 2013, http://archive.indianexpress.com/news/case-filed-against-shah-rukh-khan-for-gender-test-of-surrogate-son-abram/1153303/

14.  PTI Agencies, HC notice to Shah Rukh Khan, BMC in sex determination case, thehealthsite, December 9, 2013 http://www.thehealthsite.com/news/hc-notice-to-shah-rukh-khan-bmc-in-sex-determination-case.

See Also, PTI, Agencies, Notice to Shahrukh Khan in pre-natal sex test case, Times of India,
December 9, 2013, http://timesofindia.indiatimes.com/city/mumbai/Notice-to-Shahrukh-Khan-in-pre-natal-sex-test-case/articleshow/27106961. cms.

15.  Poonam Taneja, The couple having four babies by two surrogates, BBC Asian Network, 28 October 2013, http://www.bbc.com/news/uk-24670212.

16.  ART Bill 2010, supra note 1 at § 34( 20).

17.  ART Bill 2010, supranote 1 at § 34(21).

18.  ART Bill 2010, supra note 1 at § 2(o).

19.  ART Bill 2010, supra note 1 at § 23(5).

20 . ART Bill 2010, supra note 1 at § 34(3).

21.  ART Bill 2010, supra note 1 at § 34(4).

22.  ART Bill 2010, supra note 1 at § 34(1).

23.  Baby Manji Yamanda v. Union of India, (2008 (4) KLT 306 (SC) = (2008) 13 SCC 518).

24.  ART Bill 2010, supranote 1 at § 20(2)(3).

25.  ART Bill 2010, supranote 1 at § 26(12), 28(1).

26.  ART Bill 2010, supranote 1 at § 20(4).

27.  Government of India , Ministry Of Home Affairs , (Foreign Division) , New Delhi , Home Ministry Guidelines regarding conditions for grant of VISA to foreign nationals intending to visit India for commissioning surrogacy , issued on 9th July 2012, No. 25022/74/2011/F-l, 14lh October 2013, Availableathttp://wvvw.icmr.nic.in/icmrnews/art/MHA%20Notification %2014%20Oct., %202013.pdf (last visited April 25, 2014);

28.  ART Bill 2010, supra note 1 at § 32 (1.

29.  Ajay Sura, Restriction on medical visa for surrogacy: HC summons ICMR, MHA officials on Sudanese national plea TNN , Apr 1, 2014 http://timesofindia.indiatimes.com/city/chandigarh/Restriction-on-medical-visa-for-surrogacy-HC-summons-ICMR-MHA-officials-on-Sudanese-national-plea/articleshow/33066265.cmsSee Also , Dr Samit Sekhar, Petition to allow Singles to access surrogacy programs in India picks up pace., http://highcourtchd.gov.in/interim order/io data/CWP  15490 2013 0204 2014 INTERIM ORDER.pdf.

30.  ART Bill 2010, supra note 1 at § 34 (10), 35(7) 31 supranote at 21.32 ART Bill 2010, supra note 1 at § Section 34(19) 33 supranote at 25 33 supranote at 31.

31.  Supra note at 23.

32.  ART Bill 2010, supra note 1 at § Section 34(19).

33.  Supra note at 25.

33.  Supra note at 31.

Impact  of  GST  on  Kerala  Revenue

(By Liju V. Stephen, Advocate, High Court of Kerala)

Whether it is a State or a Nation, Fiscal Policies do matter. Finance is an essential pre-requisite for a good Government. In a Federal structure where two sets of Governments have functions to discharge, it is essential for the effective working of each Government that it be empowered to raise financial resources of its own. This necessitates an apportionment of taxing power between the Centre and States. In a Federation, therefore along with division of function there is also a division of Taxing Powers between the Centre and the State Governments and it touches the very heart of modern Federalism and it affects the working of a Federal Polity. In a Federal Constitution transgression of power by a Legislature should be avoided.

The State Government should have its own source of money to finance its activities and for which State should have liberty to generate the Revenue from the respective domain allotted by the Indian Constitution. The specific bifurcation of the State and Union List is with a purposive Legislative intent that there is no overlapping of power by the State and Union and there should be no encroachment in the respective field allotted to the Governments as envisaged under Article 246 of the Indian Constitution.

Our Constitution by Entry 82,83and 84 in the Union List of the Seventh Schedule has allotted Income Tax, Customs Duties and Excise, among others as the source of generating revenue for the Union Government, and by Entry 52 and 54 in the State List in the Seventh Schedule for levying of entry tax and sales and purchase tax among others within the domain of the State Governments.

By the 122nd Constitution Amendment Bill 2014, the Indian Parliament has proposed to incorporate Article 246A, 269A, 279A and also to amend Article 286,366 and the Seventh Schedule in the Indian Constitution to introduce "The Goods and Services Tax" (GST) and thereby to subsume the Central and State Indirect Taxes.

Under the Constitutional 122nd Amendment, Article 246A (2) is being incorporated by which exclusive power to make laws with regard to indirect Tax on “Goods and Service” are proposed to be bestowed on the Parliament and the power of the State Government by Article 246A (1) is made subject to 246A(2). At present under Entry 54 of the State List in the Seventh schedule it is the right of the State to Levy and Collect Tax on any Goods other than News Paper subject to Entry 92A of Union List. But by the proposed 122nd Amendment Bill of 2014, the States would be empowered to levy and collect their own Tax only on “Petroleum products and Human Consumed Liquor”. Moreover Entry 52 on Entry Tax in the State List in the Seventh Schedule is also proposed to be omitted. Hence the right of the State Government over any other “Goods” is proposed to be taken away and moreover the incidence of taxation is presumed to be the supply point. Thus if a manufacturer supplies goods to a dealer in Kerala and the incidence of taxation is the supply point, the transfer being an Inter State transaction it is only the Central Government or the respective Industrial State that can impose the whole tax. Moreover if there is no corresponding Entry proposed by the Authority of Law the respective State is precluded by Article 265 to levy and collect their own tax.

The Revenue Receipt of the State Government comprises mainly of Tax Revenue, Non Tax Revenue and State's share from the central taxes and grants from the Union Government. The Tax Revenue of the Government is the major source of revenue, and in it the major chunk is from the Sales Tax. Hence States like Kerala which are not Industrial States but consumer States would be terribly affected by the implementation of GST. Thus by the amendment being brought to Entry 54 and the omission of Entry 52; State Governments would have to mainly depend on the apportionment to be made by the Union Government for its revenue. It is evident that the Parliament has visualized such a scenario by the proposed implementation of GST, hence by Clause 19 of the 122nd Amendment Bill it is proposed to compensate the States for the Revenue loss caused to them up to a period of 5 years.

The question to be considered is what after the said 5 year support period after the implementation of GST in the State of Kerala. The State of Kerala is with the highest per Capita debt ratio in the country and with a soaring public debt of Rupees 87,063/- crores.

The proposed amendment to the Seventh Schedule limits the States Tax field to petroleum products and human consumed Liquor. Presently out of the Tax Revenue Receipt of State of Kerala the sales tax on human consumed liquor contributes 22%. But with the State's policy to ban liquor in a phased manner in the State keeping in mind of the avowed Constitutional Directive Principle under Article 47 and also considering the social impact of liquor in the State it is justifiable for the State to go on with the policy of ban on liquor. Resultantly the State of Kerala cannot expect or plan its future from the Revenue Receipt of Tax on Human consumed Liquor. And the other tax field proposed to the State is the tax on petroleum products, but considering the political impact on an unjustifiable hike in price from that of the neighboring States will prompt the State to limit the tax rate on petroleum products. Hence the two commodities in which State can levy its own tax may not be of much relevance or would not support the future Revenue structure for the State of Kerala.

The advantage claimed by the Union Government to implement the GST over the State Value Added Tax regime is that the consumers would get a reduced tax burden. But at the same time the Union Government should also consider and keep in mind the difficulties that are to be faced by the State Governments like Kerala, that has to perform their Governmental duties and also to carryout welfare legislative schemes. Hence unless the State like Kerala makes appropriate demand for a better share in the apportionment of Revenue from the Central Government on a progressive basis the State’s Revenue structure would be terribly affected and would be putting the people of the State at the mercy of the Union Government. And the Union Government should ensure that States like Kerala receives their share of GST proportional to the turnover of goods consumed by the State. This will ensure increase in revenue in proportion to the progressive consumption of goods in the course of time.

Order 18 Rule 4, C.P.C. -- Affidavit of Evidence -- 

Some Salient Points to be Noted in Drafting the Examination-in-Chief  by

Affidavit and the Legal effect of Introducing Certain Matters in such effect

-- Powers  of  Court

(By N. Subramaniam, Advocate, High Court of Kerala, Ernakulam)

1. In the Trial Courts examination-in-chief of parties is done by affidavit under Rule 4 of Order 18. Rule 4 was substituted by Act 46 of 197 (Section 27) and again by Act 22 of 2002 (Section 12) with effect from 1.7.2002.

2. Invariably, now-a-days in majority of chief affidavits, some matters which are of irrelevant evidence; irrelevant to the issues in question, some evidence which are beyond the scope of pleadings, some evidence for which there are no pleadings and some evidence which are not necessary to decide to issue involved in the dispute, are also included; ignoring the legal concept that only relevant matters touching the pleadings and issues and pertaining the relevant and admissible documents alone has to put in examination-in-chief.

3. A commissioner is appointed for examination of parties and witnesses, who have filed affidavit evidence. Some of the commissioners taken down the depositions of the parties and witnesses, as they are being deposed by them. Some of the Commissioners may not note objection raised by the opposite side.

4. It is noticed by the Court in large number of matters that, in view of the Court Commissioner having no power to decide any objection about the irrelevancy of the evidence, large number of irrelevant questions on inadmissible documents and irrelevant issues are asked to the witness. The Court Commissioner simpliciter, records all the objections raised by the parties through advocate and keeps on recording the evidence whether it is relevant or irrelevant. This process of recording evidence, in the absence of the Court deciding the issue of relevancy of the evidence in examination-in-chief and more particularly when deposition in examination-in-chief is ex facie irrelevant, beyond the pleadings and beyond the powers of Court to adjudicate upon, cross examination becomes very lengthy on the irrelevant issues causing tremendous loss of time and money to the litigants. It becomes very difficult for the Court also to segregate the irrelevant part of evidence or to segregate examination-in-chief and cross - examination on the irrelevant issues or which are beyond the pleadings or issues, the evidence being common. A party who does not choose to cross-examine the witness on the deposition made in the affidavit, always has an apprehension of being faced with an argument of waiver and/or evidence having remained uncontroverted.

5. In cases wherein the chief affidavit evidence, which are irrelevant, unnecessary matters, and questions which are not based on any pleadings etc. it has been laid down that such evidence is to be ignored. Opposite side need not cross examine such witness in respect of ignored parts.

6. Court can also exclude inadmissible evidence whether or not objected to by a party. The above legal aspect has been pointed out by Bombay High Court in AIR 2015 (NOC - Notes on Cases) Case No. 766 (Mrs. MahabanooBavroz Kotwal v. Piloo Fair Bomanji) decided on 10.6.2014. Full text of judgment is reported in 2015(3) ABR 151.

7. In the decision reported in 17 (1980) DLT 225 (Amarjit Kaur v. Kishan Chand) decided on 14.11.1979, it has been held “an erroneous omission to object to evidence, not admissible on relevant under the Evidence Act, does not make it admissible. It is the duty of Court to exclude all irrelevant or inadmissible by the parties. (Para 19).

AIR 1936 Lahore 114 (Nanak v. Mian).

AIR 1929 Lahore 583 (Lachhu v. Mela).

(2007) 10 SCC 21 (Kishore Kirtilal Mehta v. Kiritilal Mehta Medical Trust).

8. The above legal principles, if followed in drafting the affidavit for examination -in- chief, it can avoid wastage of time for all.

9. It is worthy to note and remember the following rulings rendered by courts in this regard.

a) 2013(6) Maharashtra Law Journal 802 (Bom. H.C.) (Rajendra Singh Chharasal Singh (deceased) v. Jitendra Singh Rajendra Sing Kushwaha) (para 13) which rules that part of evidence which is irrelevant to the issues framed by Court is to be ignored.

b) 2010(6) Bom. C.R. 379 (Bom. H.C) (Harakchand Gulabchand Dhoka v. Kasinath Narsingh Marathe).

c)  2007 (3) KLT 878 : 2007(3) KLJ 174 : ILR 2007 Kerala 293 (T.K. Gangan Menon v. Bright Credit and Real Estate).

Extracted para. 32 of judgment in Amir Trading Corporation case which runs as follows.

"32 The matter may be considered from another angle. Presence of a party during examination-in-chief is not imperative. If any objection is taken to any statement made in the affidavit, as for example, that a statement has been made beyond the pleadings, such as objection can always be taken before the Court in writing and in any event, the attention of the witness can always be drawn while cross examining him. The defendant would not be prejudiced in any manner whatsoever the examination-in-chief is taken on an affidavit and in the event, he desires to cross examine the said witness he would be permitted to do so in the open Court. There may be cases where a party may not feel the necessity of cross examining a witness, examined on behalf of the other side. The time of the Court would not be wasted in examining such witness in open Court.'

10. There is yet another aspect involved. If the party is giving evidence in chief, three contingencies can happen.

i. The opposite party may object to some questions asked in chief on some legal or technical ground and the court in order to give continuity to the examination may close the evidence.

ii. In some case, as in the case where evidence in chief is given and the opposite party is to be cross examined before the commissioner, and if objection is raised, he will note the objections.

iii. In some cases opposite party may not raise any objections.

11. In all these cases it is the duty of the Court to decide the objections raised and pass a judgment. It has been held that a judgment passed without deciding the objections is not legal or proper  (AIR 1978 SC 1393).

12. Even if the objection in writing is not filed, while cross examining the witness, the attention of the witness can be drawn to the objectionable portion of the affidavit. This is the second mode of raising an objection to any part of the affidavit.

13. The very object of amending Rule 4 of Order XVIII of the said Code is to ensure that there is a speedy trial. The object is to ensure that the time of the Court is not wasted in recording the lengthy examination-in-chief. Consistent with the said object, it is obvious that the objection raised to any part of the affidavit in lieu of examination-in-chief will have to be considered at the time of final hearing of the suit or proceeding. The party raising objection cannot insist upon the Court considering the said objection before cross examination of the witness starts. In a given case, rival party may not raise objection in writing. As stated earlier, the party can cross examine the witness by inviting attention of the witness to the statements which according to the rival party are objectionable. Even in such a case, at the time of final hearing, objection will have to be considered by the Court though there may not be any specific objection in writing. It is always the duty of the Court to decide as to how much evidentiary value should be given to a particular piece of evidence. If a portion of the affidavit is found to be not relevant or if it is found that the portion has no foundation in the pleadings, the Court can always discard itwhile deciding the suit.

14. Objection of party about alleged irrelevancy of the portion of evidence can be kept in abeyance till the matter is finally heard.

Bipin Shantilal Panchal v. State of Gujarat (2001 (1) KLT SN 86 (C.No.106) SC = AIR 2001 SC 1158) (paras 12 to 14).

15.  The Bombay High Court in an unreported judgment (W.P. No. 9033 of 2012 dated 5.11.2012) has ruled that the relevancy of the evidence and the weightage given to such evidence can be considered by Court at the time of final adjudication.

16. Once an affidavit in lieu of examination -in- chief is filed, it partakes character of examination-in-chief. There is no provision in Code to enable Court to order its deletion. In case statement is irrelevant or beyond scope of pleadings an objection can always be taken in writing and Court can discard such portion while finally deciding suit. Harakchand Dhoka v. Kasinath Narsingh Marathe (2004(3) Bom. C.R. 583 SC) (para 5)

17. In the Full Bench decision rendered in Hemendra Rasiklal Ghia v. Subodh Mody (2008) 6 Bom. C.R. 519 F.B.), has decided the issue at which stage, the objection to the admissibility and/or proof of document which may be produced or tendered should be raised, considered and decided by the Court and at which stage, an objection to the admissibility or relevancy of evidence contained in the affidavit filed under Order XVIII, Rule 4 of Civil Procedure Code should be considered and decided by the Court. It is held that if any objection is to be taken to any statement made in the affidavit, such an objection should always be taken before the Court in writing and an attention of the witness should always be drawn while cross examining him. It is held that a determination or decision thereon can be deferred to a later stage of a suit, however, final decision must be recorded before the court proceeds to judgment. It is also held that irrelevant evidence brought on record can always be excluded as the question of admissibility of evidence is a question of law. It is held that if the evidence is irrelevant, consent of parties cannot make it relevant. Convenient mode to objection in the first instance, is reserving question of law as to its admissibility until final judgment in the case. The objection to the admissibility or relevancy of the evidence contained in the affidavit can be admitted at any stage reserving its resolution until final judgment.

18. Division Bench of Bombay High Court in the decision reported in 2013 (1) Bom. C.R. 599(Ayushakti Ayurved Pvt. Ltd. v. Hindustan Uniliver) speaking through Hon. Justice Dr. D.Y. Chandrachud has held that “A commissioner has no power to decide the objection as to admissibility and has to merely record the objection. It is held that judicial experience of proceedings before Commissioners appointed by the trial Judges of this Court on the Original Side shows only results in enlarging the scope of cross examination before the Commissioner. Commissioners charge fees for every session of recording evidence or part thereof. It is held that the ambit of the cross examination can be restricted by dealing with the question of admissibility of documents before recording of evidence before the Commissioner begins. Division Bench also considered the fact that if a decision on admissibility is deferred to final hearing of the suit and evidence is recorded without reference to a document of which admissibility is in dispute, segregation of that part of the evidence which relates to the document in question becomes a serious bone of contention at the final hearing of the suit. Cross examinations are rarely compartmentalized. Segregation of the evidence may not in every case were not to cross examine a witness with reference to a document in relation to which an objection as to admissibility has been raised, it would run the risk of not having conducted the cross examination at all with reference to the document, should it eventually be held to be admissible in evidence. In other words if a document is produced and referred to in chief examination and if the opposite party is disputing the correctness of that document, it is the duty of opposite party to cross examine the deponent in chief examination regarding the disputed document.”

19. The learned Judge has also added the following. “It is noticed by the Court in large number of matters that in view of the Court Commissioner having no power to decide any objection about the irrelevancy of the evidence, large number of irrelevant questions on inadmissible documents and irrelevant issues are asked to the witness. The Court Commissioner simpliciter records all the objections raised by the parties through advocate and keeps on recording the evidence whether it is relevant or irrelevant. This process of recording evidence in the absence of the Court deciding the issue of relevancy of the evidence in examination-in-chief and more particularly when deposition in examination-in-chief is ex facie irrelevant, beyond the pleadings and beyond the powers of Court to adjudicate upon, cross examination becomes very lengthy on the irrelevant issues causing tremendous loss of time and money to the litigants. It becomes very difficult for the Court also to segregate the irrelevant part of evidence or to segregate examination-in-chief and cross - examination on the irrelevant issues or which are beyond the pleadings or issues, the evidence being common. A party who does not choose to cross-examine the witness on the deposition made in the affidavit, always has an apprehension of being faced with an argument of waiver and/or evidence having remained uncontroverted.”

20. Option is given to the party to file Chief Affidavit or to be examined in Court. (Govindji Padamshi v. Bhawanji Hansraj - 2006 (3) KLT 1009 = 2006 (3) KLJ 210 = ILR 2006 (3) Ker. 800).

21.  Karnataka High Court in the decision reported in 2005 (3) KLT SN 11 has ruled that Order 18 Rule 1 is mandatory (Drakshayi v. Gagavva).

This article is intended to enlighten the budding Advocates regarding drafting of evidence in examination in chief as ordained in Order 18 Rule 4.

Whether Document Executed before Filing of a Suit but Registered after Registration of the Suit in Court will be Affected by Principle of Lis Pendensu/S.52 of T.P. Act.

(By N. Subramaniam, Advocate, High Court of Kerala, Ernakulam)

Transfer of Property Act. S.52. Lis pendens. Document executed before filing of a suit but registered after registration of the suit in the court.

Question is whether execution of such a document is affected by principle of lis pendens?

Ans. Sale deed is not affected by lis pendens since registration of a document relates back to the date of the document.

(1921) 41 MLJ 399 (D.B.) (Venkitarama Reddy v. Rangiah Chetty) Judges Sadasiva Iyer andSpencer JJ.

(1925) 1 MLJ 496 (Akki Guru Basappa v. Veluvathi Setra Shaulappa), 1991 (1) KLT SN 2 (C.No.2) SC = (1991) 2 MLJ 52 (Hamda Ammal v. Avadiappa Pather), 2011(1) Law Weekly 949 (Perumal v. V. Balasubramanian), (2006) 10 SCC 96 (A Jitendra Nath v. Jubilee Hills Co-operative House Building Society), (2000) 9 SCC 214 = (2000) 3 MLJ 199 (Boramma v. Krishna Gouda), AIR 2010 SC 2994 = (2010) 8 SCC 612 = (2010) 8 MLJ 1098 (Ittanam & Ors. v. Cherichi @ Padmini).

The above decisions are followed in (2015) 5 MLJ 529 (Pandia Nadar v. Sivakama Sundari).