“Justice Examined to Explain Delayed-Justice” 

(By T.R. Aswas, Advocate, High Court of Kerala)

i) What is the kind of arbitration are you having in India? Your Arbitrators deliberately multiply the sittings, elicit exorbitant fee and take years to pass Awards.

ii) Awards are supposed to be honoured by and large.  Your courts take decades to decide matters on challenge to Awards. 

iii) Your judicial officers are incompetent or corrupt or both as confessed by your C.J.I. 

iv)  What kind of finality does your legal system offer to the international business community?

These were uncomfortable questions/accusations mercilessly shot at me four years ago while addressing US business leaders in the Annual Convention of (AFI) Association of Food Industries, Inc, New Jersey, USA on “Enforcement  of  AFI Arbitration  Awards  against Indian  Companies”, at Florida. Knowing the ground realities, needless to say that I had tough times countering the allegations, but then I replied that with the latest amendments in CPC, matters could be fast tracked to be decided within a year, that the issue of corrupt judges is an exception than a rule and such cases are universal, etc. Four years later, I find the above questions and accusations still haunting me sans satisfactory answers.

2. The anomalies in our Arbitration Law are galore. Our Supreme Court had occasion to say so while dealing with the provisions of the Indian Arbitration & Conciliation Act, 1996. It is absurd that an Award passed by a retired High Court Judge appointed as Arbitrator u/S.11 of the Act is to be challenged before a District Judge u/S. 34. Moreover, the Arbitrators take considerable time for passing the Awards with innumerable unwanted sittings which is plainly contrary to the concept of quick decision making process envisaged in arbitration. It is also apposite to point out that the Supreme Court disapproved and even snubbed Arbitrators, who are retired High Court Judges, charging exorbitant fees in arbitration cases [see Union of India v. Singh Builders (2009) 4 SCC 523). A number of ways available currently to prolong the post-Award proceedings in the District and higher courts, that too given the backlog of cases in our courts, makes a mockery of the very existence of the arbitration process in our country. In spite of repeated promises of drastic and effective amendments being brought into the Act including constituting a Commercial Bench in the High Courts, we see no signs of such an advent. Regardless, any practicing lawyer of some intellect would know that arbitration can still be managed better and more efficiently even within the constraints of the present Act if we have the will to do so, mainly, on the part of the Arbitrators and the presiding officers dealing with frivolous challenges to a properly conducted arbitration proceeding.

3. Likewise in international arbitrations, the Indian Supreme Court in Bhatia International v. Bulk Trading ((2002) 4 SCC 105) held that Part I of the Arbitration and Conciliation Act is applicable to international commercial arbitration even where the seat of arbitration is outside India, unless there is express or implied exclusion by parties. Venture Global v. Satyam Computers ((2008) 4 SCC 190) followed and of late we have Videocon Industries v. Union of India (2011 (2) KLT SN 105 (C.No.125) SC = (2011) 6 SCC 161). Indian Supreme Court held that Indian Courts will have jurisdiction to interfere with foreign Awards and consequently India has been listed as a non-friendly arbitration country by the international business community. It is unfortunate that though a Division Bench of the Supreme Court doubted the correctness of Bhatia and Venture Global way back in 2008, the Apex Court found it apt only on 31st  October 2011 to post the matter for hearing before a Constitutional Bench on 10th January, 2012. The denial of justice through delay is the biggest mockery of law, but in India it is not limited to mere mockery; the delay in fact kills the entire justice dispensation system of the country.

4. Against the background of long standing cries of delayed disposals, things got worsened to the extent of a shameful situation to the Indian judiciary that a retired Supreme Court Judge had to depose recently as a witness for the Government of India to explain the delay in Indian judicial system, in a Bilateral Investment Treaty (BIT)-arbitration held in London recently, perhaps the first of its kind against the Indian Government. The plaintiff, an Australian corporate, even named Prime Minister Manmohan Singh, Coal Minister Sriprakash Jaiswal and the then Law Minister M. Veerappa Moily in that arbitration and even accused that the Indian judiciary is working under the influence of the Government of India in that the latter has stalled hearing of its appeal in the Supreme Court while trying to enforce an ICC Award obtained in its favour against Coal India Ltd. an Indian Government Company. It is pathetic and deplorable that Justice B.N. Srikrishna had to travel to London as an expert witness for the Indian Government, where he had to defend Indian courts against the charge of acting in league with the State. The lengthy opinion given by Justice Srikrishna on June 6, 2011, dwelt on the separation of powers under the Indian Constitution, under which judiciary is independent of the executive. In a second opinion dated August 12, 2011, he cited two politically significant judgments of the Apex Court in which the Government of India was on the losing side. 

5. The case has its origin when M/s. White Industries, Australia on September 28, 1989, entered into a contract with Coal India Ltd for supply of equipment and development of coal mine at Piparwar, India. The parties had subjected themselves to ICC Arbitration for dispute resolution and the said contract specifically purported to exclude the operation under the Indian Arbitration Act, 1940. Subsequently a dispute arose between White Industries Australia Ltd and Coal India regarding a claim for bonus by White Industries. White Industries invoked arbitration in accordance with the ICC Arbitration Rules and obtained an Award in its favour on 27.5.2002 for an amount of $(AUS) 4,085,180.00 with interest and expenses thereof. Award was challenged by Coal India under Section 34 of the Act before the Kolkata High Court while White Industries sought the enforcement of the Award before the Delhi High Court. White Industries raised an objection on the maintainability of the application u/S.34 which landed in the Supreme Court of India in 2004. In 2008, the matter was heard for some time and Coal India argued that the two Judgments in Bhatia International and Venture Global were in its favour and that Section 34 is maintainable in case of foreign Awards which are governed by Indian law. White Industries submitted that this is a foreign Award and objection cannot be filed in India. There was a difference of opinion amongst the judges on the correctness of Bhatia and Venture and the matter was referred to a larger bench, and of late on 31st October, 2011, the Supreme Court has posted the matter to 10th Jan., 2012 to be taken up before a Constitutional Bench. In other words, the ICC Award of 2002 reached the Supreme Court in 2004 through the Kolkatta and Delhi High Courts, heard and doubted in 2008, the apex court then found it apt only recently in October, 2011 to post the matter for final hearing in January next year before a Constitutional Bench. The ICC Award in favour of White Industries is to the tune of five million dollars and the claim seems to have arisen in 1989 which is pending for last 22 years.

6. What is the message that we are conveying to the rest of the world in terms of efficacy of the legal system for dealing with an International Award in a timely manner, is the question that looms large? In many reputed jurisdictions, it is almost automatic and routine to have an Award made by such an authority as ICC is duly and timely honoured and executed.

7. There is nothing wrong to presume that it is fed up with the Indian Supreme Court having failed to take up the matter, White Industries Australia in 2010 launched arbitration against the Government of India under the Australia-India bilateral investment treaty (BIT) on the promotion and protection of investments, signed in New Delhi in 1999 in accordance with the United Nation Commission on International Trade Law (UNCTRIAL). BIT provides for investment protection in accordance with terms, for the investment made by one investor of one party in the territory of the other. White Industries, an investor for the purposes of BIT, claims in this UNCTRIAL-Arbitration that the Government of India has breached the bilateral treaty by way of the actions of the Indian courts and Coal India, and as a result, has suffered huge losses and damages. The Award is expected in December 2011.

8. India has entered into 137 treaties, similar to the one with Australia mentioned above, with various countries across the globe. It is alarming to note that more foreign corporates, who are faced with the kind of callous attitude towards international arbitration by Indian courts as mentioned above, are likely to invoke the BIT arbitration against the Indian Government.

9. The BIT-Arbitration now being held in London is a huge wake-up call for the legal fraternity in that it should very seriously appreciate the fact that is not just the actions of the executive or the legislature that can violate a BIT but also that of the judiciary. India ranks 182nd out of the 183 nations in the “World Bank’s 2011-Doing Business Report” in the decreasing order of efficiency for enforcing contracts, a measure that signals how bad is the situation for doing business in our country with the huge cost, length of time and complexity of dispute settlement in our country -- even in matters of properly conducted arbitration proceedings. Only East Timor was lower. Unfortunately in India, as things stand now, litigation can be easily prolonged to the third generation of the original plaintiffs/respondents. According to a report in January 2011 by the Union Govt., eliminating legal delays would add as much as two percent to India’s gross domestic product because it increases investment, reduces corruption and lowers business costs.

10. The legal system that moves at a snail’s pace, compounded with the tendency for entertaining patently frivolous challenges involving multi-tier review process and no certainty of finality and inflicting exponential litigation costs, are undoubtedly one of the most important factors that puts investors off India. India might have to pay a heavy price for this, quite literally too, as has Bangladesh faced recently. There are many instances where arbitral tribunals have ordered developing country governments to pay massive damages to foreign investors for violating their BIT obligations. Bangladesh faces an identical BIT-Award passed in June 2009 by the International Centre for Settlement of Investment Disputes by which Bangladesh Government is to pay more than $6 million plus interest at a rate of 3.375% per annum from 1993 to an Italian company because the actions of Bangladesh’s judiciary violated the Italy-Bangladesh BIT (Saipem v. The People’s Republic of Bangladesh). It will be a criminal waste of taxpayer’s money if India also suffers similar fate on account of its sovereign actions breaching its BITs. Legal fraternity has a national and moral duty to ensure that it doesn’t contribute to such losses. Therefore it is hugely important and of national importance that institutional capacities, at all levels, are bolstered and legislations related to international arbitration carefully re-visited. It is equally important that judicial officers are properly educated, trained and enlightened of wider significance of their roles and responsibilities as demanded by a modern/business-friendly India. “Time is Money” can no longer remain a concept alien India and its judiciary.

11. At a time when investor confidence about India is already low due to corruption scandals and the manner in which many big-ticket foreign investment projects like Cairn-Vedanta and Posco have been dealt with, the last thing India wanted was to be dragged by a foreign investor to an international arbitration, further denting its claim to be an attractive destination for foreign investment.

The author is reachable at traswas@justice.com

Third Party Information under the Right to Information Act,

2005 Practice, Procedure and Precedents

(By R. Muralidharan, Managing Director, PONTEX and Deputy Registrar

of Co-operative Societies (Legal), Puducherry) 

A public authority is required to disclose any information under the Right to Information Act, 2005, which is held by it or under its control.  This information may include personal information of the members of its own organisation or the information relating to any private body which can be accessed by the public authority under any other law. Third party information is the information or record, which relates to or has been supplied by a third party and has been treated as confidential by that third party. There are two pre-conditions, namely:

(i) Information or record should relate to or belong to third party, which has been supplied to a public authority; and

(ii) The information has been treated as confidential by the third party.

The Act, per se, does not impose a complete ban on disclosure just because it is third party information.  The Act provides complete mechanism in providing third party information under S. 11 of the Act.  The benchmark, in providing such information, is only the fulfillment of public interest, and this has to be judged by the public information officer (PIO) vis-à-vis any possible harm or injury to the interests of the third party.  The Act provides such a party the right of being heard before a decision is taken to disclose the information and also appeal against such decision if it is not found satisfactory.  Further such information is not to be disclosed if it falls under any of the exempted categories.

The term ‘third party’ has been defined as a person other than the citizen making a request for information and includes a public authority [S. 2(n)]. If any public authority keeps information supplied by another public authority on the condition that such information should be kept confidential, such public authority may also be treated as a third party to whom notice under S. 11 is necessary if such information is to be divulged by the former public authority.

Procedure  for  disclosure

On receipt of an application for information, the PIO should examine whether the information relates to or has been supplied by a third party.  If that be the case, the PIO should first decide whether the information sought falls within the exempted categories engrafted under Ss. 8(1) or 9.  In   case   of   trade   or commercial secrets protected by law, disclosure may be allowed if overwhelming public interest is demonstrated against any possible harm or injury to the interest of such third party.  If the PIO reaches a conclusion that the information is not to be disclosed, he shall inform the applicant accordingly.

If the PIO intends to disclose any information or record, he shall within five days from the receipt of request, give a written notice to such third party to this effect.  The third party shall be asked to make a submission in writing or orally, against the proposed disclosure, within ten days from the date of receipt of such notice.   The third party may be specifically informed that if no representation is received within the date line, it will be presumed that he has no objection and the matter would be decided on merits. However, failure to respond by the third party does not imply that he has given its consent for disclosure of information.  The PIO may still weigh the public interest involved and the possible harm or injury to the interest of the third party. 

The Act does not give a third party an automatic veto on disclosure of information which may be held by a public authority. The denial ought to be under Ss. 8(1) or 9.  The representation of the third party must portray how the information sought falls under the exempted category or how the disclosure would be detrimental to its interest.  

After taking into reckoning the representation made by the third party, the PIO must take a decision on whether or not to disclose the information.  This process should be completed within forty days of receipt of request for information from the applicant. The decision shall be communicated to the third party as well and he shall be informed of its right to file an appeal against the decision and to facilitate this, the name and designation of the appellate authority, the time frame within which the appeal can be preferred, the fee to be paid and other procedures, if any, should be communicated to the third party.

It was held by Gujarat High Court in Reliance Industries Ltd. v. Gujarat State Information Commission & Ors.  (AIR 2007 Guj. 203: 2008 (2) ID 26) that when public body collects the information relating to or given by third party, it might not have been treated as confidential but third party can make a submission later that it is treating the said information as confidential.  More so, when information is relating to third party it may not be even known to that third party, when and what information relating to third party was collected by public body.  Therefore, S. 11(4) gives mandate to the PIO to give written notice to third party if he intends to disclose information relating to third party.  The PIO has to pass a reasoned order before disclosing of information to applicant. 

In the light of the above judgment it is a safe course of action for the PIO to call for the views of the third party whenever he intends to disclose the information relating to the third party.

Public  interest  to  be  weighed

The disclosure may be allowed if it is in public interest and if it outweighs in importance any possible harm or injury to the interest of the third party except in the case of trade of commercial secrets protected by law.  In case the PIO is satisfied that the public interest gets served by disclosing the information, he may provide the information to the applicant.  Disclosure of information must be clearly in public interest and should be decided on a case to case basis.

Right  to  appeal  by  third  party

The third party may file an appeal against the decision of the PIO with the first appellate authority within thirty days from the date of receipt of the order of the PIO and not the date of the receipt of the order.  The legislative intent would be evident on a careful reading of sub-section (2) of S. 19 in so far it relates to first appeal by the third party [thirty days from the date of the order] and the use of words in sub-section (1) of the said section in respect of other cases [thirty days from the receipt of such a decision]. 

It is also worth noting that the third party has no right to file a first appeal after the lapse of thirty days from the date of order.  The power to condone delay available under the proviso to  sub-section  (1)  of  S.19  in  other  cases is  not  provided  to  the  third  party  under sub-section (2) ibid.  

A second appeal against the decision of the PIO lies before the Central/State Information Commission.  The second appeal can also be filed if the first appeal is not decided by the appellate authority within the prescribed time limit.  Appeal against the decision of the PIO cannot be filed directly with the Commission. The appellant is required under S. 19(1) to exhaust the recourse to first appeal before filing an appeal before the Commission.

Points  to  ponder

A question may arise that if the third party registers his objection against the disclosure of information with the public authority, should the PIO is duty bound to give the applicant an opportunity to contest the third party’s claim.  The litmus test for the PIO is weighing the public interest in favour of disclosure and he will be more justified in getting the views of the applicant in response to the objections of the third party.  The onus is on the PIO in passing a reasoned order overruling the objection of the third party.  However the entire exercise should be completed within forty days, in any case.

Another intriguing query is when a request for information related to hundreds of third parties is received by the PIO, is it practical to give a notice to all of them, as required by S.11(1) of the Act.  The answer may be found from a decision of the Central Information Commission. In Abhishek Chowdhury v. SEBI, CIC/AT/2007/01554 dated 30th May 2008  the Commission advised the PIO to choose to call for hearing certain representatives of all third parties, selecting them from sample of large, medium and small investors and pass a speaking order.

Binding  precedents

To have a better insight on the subject it is profitable to study certain dictums of various High Courts on the facets of third party information. 

*If a person, who seeks for documents is a business competitor and if any trade secret is sought for, then such document may be denied.  But regarding a public document, if sought for by an individual, whatever be the motivation of such individual in seeking document has no relevancy as the Act had not made any distinction between a citizen and a so-called motivated citizen, as held by the Madras High Court in V.V. Mineral, regd. firm through its Managing Partner, Tisaiyanvilai v. Director of Geology & Mining, Chennai and others  (2007) 4 MLJ 394 : 2009 (1) ID 108.

*The third and fourth respondent sought information on the functioning of a weavers co-operative society, the qualifications of the Manager of the society, the details of movable and immovable properties of the society and the expenditure incurred by them.    In P. Duraisamy v. The Public Information Officer, Office of the Assistant Director of Handlooms and Textiles and three others, W.P. No.3278/2009 dated 27.11.2009, the High Court of Madras held that S.8 of the Act provides for exemption under S.11, the Information Officer has power to give notice to such parties and after affording opportunity can decide whether or not to disclose the information or record.  Any person who is aggrieved of such an order passed under S. 11 read with S.8 has a right to file an appeal under Section  19.  It must be noted that the co-operative society like the second respondent society though a membership society, it is run by State subsidy and therefore the affairs of the society cannot kept in dark.  The authorities constituted under the Act are empowered to take several actions including the ordering of enquiry, surcharge or supersession or winding up. The Court ordered that the information sought for should be provided and the objection made by the employee through the Writ Petition was dismissed. 

S.11 appears to be for the purpose of preventing the Act from becoming a tool in the hands of a busy body only for the purpose of setting personal scores or other oblique motives. By no stretch of imagination can it be held that the information regarding the appointment and educational certificates of the employees of the organisation would be an unwarranted invasion of their privacy.  Their educational qualifications are not privy to them but are records available with the institution which is a public authority within the meaning of the Act.  They were appointed by virtue of their qualifications and hence such qualifications have direct relationship to their duties. As such the exemption from disclosure of such information under S.8(1)(j) is not available, as held by the Division Bench of Allahabad High Court in  Surender Singh v. State of U.P. & Ors. (2009 (1) ID 208).

*The question before the Delhi High Court in Arvind Kejriwal vs. Central Public Information Officer, Cabinet Secretariat, 2010 (2) ID 485 : AIR 2010 Delhi 216  is whether the information seeker can be provided with copies of documents in the files concerning appointments at the levels of Deputy Secretary, Director, Joint Secretary, Additional Secretary and Secretary in the Government of India without the procedure outlined in S. 11(1).  The evaluation of the past performance of these officers is contained in the ACRs. On the basis of the comparative assessment a grading is given. Such information cannot but be viewed as personal to such officers vis-à-vis a person who is not an employee of the Government of India and is seeking such information as a member of the public, such information has to be viewed as constituting ‘third party information’. This can be contrasted with a situation where a government employee is seeking information concerning his own grading, ACR etc. That obviously does not involve 'third party’ information. When an application is made seeking such information, notice would be issued by the CIC or the CPIOs or the State Commission, as the case may be, to such ‘third party’ and after hearing such third party, a decision will be taken whether or not to order disclosure of such information. The third party may plead a ‘privacy’ defence. But such defence may, for good reasons, be overruled. Whatever may have been the past practice when disclosure was ordered of information contained in the files relating to appointment of officers and which information included their ACRs, grading, vigilance clearance etc., the mandatory procedure outlined under S. 11(1) cannot be dispensed with.

"The disclosure of information sought for is about the disciplinary proceedings initiated against 14 bank officials of the State Bank of India. The disclosure of information sought for are the charge sheet, reply given by the employees and the final order passed by the authorities concerned in the disciplinary proceedings initiated against them. As such the information sought for particularly, the reply submitted by the employees relates to information of third party. The CIC is bound to decide the appeal in accordance with the procedure laid down only after giving due opportunity to such third parties for being heard.  Whereas the CIC disposed of the appeal without complying with such statutory requirement as admittedly the third parties are deprived of such opportunity as such the impugned order is passed contrary to the procedure and is in violation of the principles of natural justice as contemplated under S. 19(4) of the Act. On this score alone the impugned order is liable to be set aside, so held the High Court of Madras in Chief General Manager, State Bank of India v.  K. Thakshinamurthy & Ors. ( 2011-2-LW-63 : 2011 (1) ID 284).

Interpretation to Section 11

The Division Bench of the Delhi High Court in Arvind Kejriwal v. Central Public Information Officer & Ors.  (L.P.A. 719/2010 etc., dated 30.9.2011)  gave an impetus to S.11 and gave an intellectual interpretation to the said section. The intra court appeals assailed the judgment of the learned single Judge reported in 2010 (2) ID 485 : AIR 2010 Delhi 216 (cited supra). 

The core contention of the appellant is that the expression “relates to or has been supplied by a third party and has been treated as confidential by that third party” in S.11(1) of the Act should be read as “relates to and has been supplied by a third party and has been treated as confidential by that third party”. In other words, the word ‘or’ used in S.11(1) should be read as ‘and’. In support of the said contention, it was submitted that purposive and not literal interpretation is required and if a restricted or narrow interpretation is given then in all cases where information relates to third party, the PIO would be required to issue notice to the third party or parties concerned. This may happen in most cases and it would make the Act unworkable. The appellant has pointed out instances like list of families below the poverty line, copy of contracts or bills etc., between the public authorities and third parties, marks obtained in a exam, admissions or even information which is already in public domain would attract the procedure stipulated in S. 11 unless the word ‘or’ is read as ‘and’. It was further submitted that in such cases, notices will have to be issued to third parties who may be spread all over India and this process itself may take days, if not months to be completed. This would also make the Act tedious, resulting in procedural difficulties and delay in furnishing of information and is therefore contrary to the legislative intent. 

The Court found that the answer in regard the legislative intent is clear and reflected in the proviso to S. 11(1) which spells out the parameters when third party information can be furnished or denied to the information seeker. The said proviso has to be read with along with the exemptions which have to be provided in S. 8 specially S. 8(1)(j) which permits denial/disclosure of personal information which has no relationship with any public activity or interest; or which causes unwarranted invasion of privacy of an individual unless larger public interest justifies disclosure of such information. 

The proviso to S. 11(1) states that the confidential information except in cases of trade or commercial secrets protected by law, shall be disclosed if public interest in disclosure outweighs any possible harm or injury to the interest of the third party. The proviso as well as S. 8(1)(j) requires balancing of two conflicting rights, i.e., right to information and the right to confidentiality or privacy. Reference can also be made to S. 8(1)(e) of the Act in this regard. Thus in such cases, which of the two conflicting right has to be given primacy depends upon larger public interest. This is the test which has to be applied. 

 Section  11(1), (2), (3) and (4) are the procedural provisions which have to be complied with by the PIO/appellate authority, when they are required to apply the said test and give a finding whether information should be disclosed or not disclosed. If the said aspect is kept in mind, there would be no difficulty in interpreting S. 11(1) and the so called difficulties or impartibility as pointed out by the appellant will evaporate and lose significance. This will be also in consonance with the primary rule of interpretation that the legislative intent is to be gathered from language employed in a statute which is normally the determining factor. Read in this manner, what is stipulated by S. 11(1) is that when an information seeker files an application which relates to or has been supplied by third party, the PIO has to examine whether the said information is treated as confidential or can be treated as confidential by the third party. If the answer is in the possible sphere of affirmative or ‘may be yes’, then the procedure prescribed in S. 11 has to be followed for determining whether the larger public interest requires such disclosure. When information per se or  ex facie cannot be regarded as confidential, then the procedure under S. 11 is not to be followed. All information relating to or furnished by a third party need not be confidential for various reasons including the factum that it is already in public domain or in circulation, right of third party is not affected or by law is required to be disclosed etc. The aforesaid interpretation takes care of the difficulties visualized by the appellant like marks obtained in an examination, list of BPL families, etc. In such cases, normally plea of privacy or confidentiality does not arise as the said list has either been made public, available in the public domain or has been already circulated to various third parties. 

On the other hand, in case the word ‘or’ is read as ‘and’, it may lead to difficulties and problems, including invasion of right of privacy/confidentiality of a third party. For example, a public authority may have in its records medical reports or prescriptions relating to third person but which have not been supplied by the third person. If the interpretation given by the appellant is accepted then such information can be disclosed to the information seeker without following the procedure prescribed in S.11(1) as the information was not furnished or supplied by the third person. Such examples can be multiplied. Further, the difficulties and anomalies pointed out can even arise when the word ‘or’ is read as ‘and’ in cases where the information is furnished by the third party. For example, for being enrolled as a BPL family, information may have been furnished by the third party who is in the list of BPL families. Therefore, the reasonable and proper manner of interpreting  Section 11(1) is to keep in mind the test stipulated by the proviso. It has to be examined whether information can be treated and regarded as being of confidential nature, if it relates to a third party or has been furnished by a third party. Read in this manner, when information relates to a third party and can be prima facie regarded and treated as confidential, the procedure under  Section  11(1) must be followed. Similarly, in case information has been provided by the third party and has been prima facie treated by the said third party as confidential, again the procedure prescribed under S. 11(1) has to be followed. S. 11 also ensures that the principles of natural justice are complied with. Information which is confidential relating to a third party or furnished by a third party, is not furnished to the information seeker without notice or without hearing the third party’s point of view. A third party may have reasons, grounds and explanation as to why the information should not be furnished, which may not be in the knowledge of the PIO/appellate authorities or available in the records. 

The information seeker is not required to give any reason why he has made an application for information. There may be facts, causes or reasons unknown to the PIO or the appellant authority which may justify and require denial of information. Fair and just decision is the essence of natural justice. Issuance of notice and giving an opportunity to the third party serves a salutary purpose and ensures that there is a fair and just decision. In fact issue of notice to a third party may in cases curtail litigation and complications that may arise if information is furnished without hearing the third party concerned. S. 11 prescribes a fairly strict time schedule to ensure that the proceedings are not delayed. Thus, S. 11(1) postulates two circumstances when the procedure has to be followed. Firstly when the information relates to a third party and can be prima facie regarded as confidential as it affects the right of privacy of the third party. The second situation is when information is provided and given by a third party to a public authority and prima facie the third party who has provided information has treated and regarded the said information as confidential. The procedure given in S. 11(1) applies to both cases.

In  fine

It must be remembered that inadvertent disclosure of third party information will warrant penalty to the PIO.  Hence an insight to S.11 is imperative to all the stake holders.

Contract by a Guardian -- Liability of Minors

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

This subject open up a vast vista.  But the writer proposes, in this short article, to notice one out of several topics, under which the subject may be considered viz.:

Suits  for  specific  performance  by  or  against  Minors

1. Till the decision of the Privy Council in Mir Sarwarjan v. Fakhruddin Mohammad 

(ILR 39 Cal. 232) divergent views prevailed in the Indian High Courts as to the power and competency of a guardian to bind a minor by contracts relating to transfer of property. There were two schools of thought on the question of the specific enforcement of such contracts in favour of or against a minor. In certain cases, the view found acceptance that such contracts are unenforceable for want of mutuality. ILR 20 Cal.508 is representative of that view. ILR 18 Mad. 415 belongs to the opposite category wherein it was held that the English doctrine of mutuality had no application in India. The same view was taken in 27 Cal. 276 also. It was in this state of the authorities that the first mentioned case was decided by the Privy Council. In this case the minor was the plaintiff and the suit was to compel specific performance of a contract for the purchase of immovable property entered into by the guardian. The courts in India had decreed specific performance. This was reversed by the Privy Council and Lord Mac Naghtan, delivering the judgment of the Board, says at p. 237 “It is not within the competence of the manager of a minor’s estate or within the competence of the guardian of a minor to bind the minor or the minor’s estate by a contract for the purchase of immovable property, and they are further of opinion that as the minor in the present case was not bound by the contract, there was no mutuality, and that the minor who has now reached his majority cannot obtain specific performance of the contract”. It is significant that their Lordships were prepared to assume for the purpose of their decision that the intended purchase was an advantageous purchase for the minor.  It follows, therefore, that necessity or benefit which will support an alienation by the guardian, under the ruling in Hanooman Pershad’s case, 1856 (6) MIA 393 is not the true criterion to be applied in the case of suits for specific performance.

2.   Doctrine in relation to minors.-- (1) General, - In India, a contract by a minor himself is absolutely void. There is not only absolute lack of mutuality, but there is no enforceable contract. There can be no claim for specific performance either by or against the minor. Nor is it within the competence of a manager of guardian of a minor to bind the minor or his estate by a contract for the purchase or sale of immovable property. The minor cannot, sue for specific performance of such a contract. It makes no difference that the contract was entered into by the guardian for the benefit of the minor or for purposes of necessity, unless the contract is one for the sale of immovable property and is made by the dejure or natural guardian for the legal necessity under justifying circumstances, in which case it may be specifically enforced. Analogy of minor is not applicable to a private deity. Contract by trustee of such deity to sell immovable property for legal necessity is specifically enforceable. Where some persons severally agree to sell their property jointly to several vendees, the contract is enforceable at the instance of one of the vendees, even though one of the vendors successfully impeaches the contract and one of the vendees is a minor. In such a case, the contract is not unenforceable for want of mutuality.

3.  The doctrine of mutuality is not affected by the doctrine of part performance. The latter doctrine can be applied only to the person concerned. So, if a contract made by the guardian of a minor is not capable of specific enforcement against the minor, the fact that the guardian in pursuance of the contract has placed the other party in actual possession by way of part performance of the contract makes no difference. But the Privy Council has held that where the agreement of sale was within the competence of the guardian and also for the benefit of the minor and possession was delivered in part performance the minor aptly answered the description of “the transferor” within the meaning of S.53-A, T.P. Act.

4.  As submitted above, a contract made by a minor, or by his defacto guardian for the purchase of immovable property, is void and there is no mutuality even. It is not open to the minor on attaining majority, to enforce specific performance of the contracts. But there are two exceptions to the rule, namely:

(i)  Contracts made by the karta of a joint Hindu family. 

(ii) Contracts made by the statutory guardians.

5. A distinction is to be drawn between conveyance and a contract. A conveyance stands on a different footing from a contract of sale. In a conveyance the whole matter is complete and there is no doubt that a minor will be bound by a conveyance of property executed by a guardian to pay off his father’s debt and that he could not get it aside merely on the ground of minority”. (89 I. C. 892). On the other hand in ILR 47 Mad. 692, it was held that where a guardian of a minor enters into a contract on behalf of a minor, that contract cannot be specifically enforced though it may be for the purpose of necessity or for the minor’s benefit. This distinction between a conveyance and a contract is further explained by Niyogi J. in (1939) Nagpur.L.N. 324 at p.326 as follows: - “When the minor’s property is already alienated the court is required only to find whether the alienation is binding on the minor or not. In such a case no consideration of equity arises. The relief of specific performance is a relief in equity and the question with which the court is faced is whether it should compel the minor to perform the onerous act of alienating his property in consequence of the contractual obligation incurred by his guardian”. With the exception of 18 Mad. 415 which was decided before the clear pronouncement of the principle by the Privy Council, the Madras High Court has been consistent in declining specific performance against a minor on the ground of mutuality. Vide ILR 56 Mad. 433; AIR (1924) Mad. 863; AIR (1928) Mad 830.  The Lahore High Court has applied the same principle in ILR 8 Lah. 212. In ILR 57 Cal. 268 the principle was extended to a contract by the manager of a joint family to sell land belonging to the family including a minor. 

Contract  for  sale  and  Contract  for  purchase:

6.  In AIR (1924) Pat 81 the Patna High Court had to consider a case where specific performance was sought against a minor and it was held following the ILR 39 Cal.232 that it could not be decreed. An attempt was made to distinguish the Privy Council case on the ground that it related to a contract for purchase but it proved unsuccessful. Das J. observes that no distinction can be drawn between a contract for purchase and a contract for sale and says “want of mutuality in a contract is a well-recognized defence to a suit for specific performance and was at the bottom of the decision of the Privy Council in ILR 39 Cal. 232”. The cases which seek to confine the application of the Privy Council case to contracts of purchase only are, therefore, of doubtful soundness. They try to perpetuate a distinction without a difference.

7.   Doctrine  no  more  applicable  in  view  of  S.20 (4) - Application of doctrine of mutuality to specific performance of contract became the settled law in India on the authority of Privy Council in Mir Sarwarjan v. Fakhruddin. In that case during minority of the plaintiff his guardian entered into a contract for purchase of property. It was held that as the minor was not bound by the contract there was no mutuality and the minor who had by then attained majority was not entitled to specific performance of the contract. This principle was applied in a long catena of cases in different High Courts till 1948. Thereafter in Srikakulam v. Kurra Subba Rao, the Privy Council held a minor to aptly answer the description of “the transferor” in the sense it was used in S.53-A of the Transfer of Property Act. In that case the mother of the minor acting as his guardian had entered into a contract of sale of minor’s immovable property for the benefit of the minor and had delivered possession. It was held that the guardian was competent to enter into such a contract and that the minor was debarred from obtaining relief of possession from the transferee in view of S.53-A, T.P. Act. 

8.   In Sitarama Rao v. Venkatarama, the Madras High Court was of the view that Srikakulam’s case had no effect on the doctrine of mutuality as held applicable in Mir Sarwarjan’s case. However, a Full Bench of Andhra Pradesh High Court held in Suryaprakasham v. Gangaraju, that Srikakulam’s case overruled all the previous decisions based on Mir Sarwarjan’s case. Other High Courts took conflicting views on the point.

9. However, the Legislature set the controversy at rest by enacting sub-s.(4) of S.20 of the Specific Relief Act, 1963. While recommending insertion of that sub-section the Law Commission observed that there was still scope for application of the rule in Mir Sarwarjan’s case but they did not consider it necessary to import the doctrine of mutuality into the codified law of specific performance. On the contrary they wanted to do away with the doctrine by insertion of the new sub-section, which they did and which was enacted and as sub-s.(4) of S.20. Accordingly it was provided in S.20(4) of the new Act that specific performance of a contract shall not be refused on the ground that the contract is not enforceable at the instance of the other party.

10.  Thus there is no further scope for contending that the doctrine of mutuality will defeat a claim for specific performance. It is submitted that since the Specific Relief Act is a procedural law, the doctrine of mutuality will not defeat a suit pending on the commencement of the new Act, either.

11.  The Specific Relief Act does not anywhere repudiate the doctrine of mutuality. The word ‘mutuality’ means that each party must have freedom to enforce the rights under the contract against other. However sub-s.(4) of S.20 only makes it clear that the court cannot refuse to any party specific performance merely on the ground that contract was not enforceable at the instance of the other party.

Aviation Accidents and Liability of Air Carrier A Relook at Abdul Salam's  case¹

(By A. Mohamed Mustaque, Advocate, MK Associates, Ernakulam²)

Onset of liberalisation and growing cross-border transactions throws challenges to the courts in India in the context of taking cognizance of issues having global ramifications. Even before the process of globalisation, consensus drawn through various conventions or treaties in relation to air transport, outer space, environment etc., were arrived at international community for economic, peace and social progress of the global community.  Though India is not a monist State, even in the absence of municipal laws, courts in India often with reference to Article 21 of the Indian Constitution infuse consensus arrived in the conventions or treaties into the domestic law. Therefore when court meets a situation of interpreting statutory provisions in Carriage by Air Act (hereafter 'Act')  like in the Abdul Salam’s case which arising from an aviation accident happened at Mangalore  is called up on to interpret lex situs  alongside of peremptory norms of wider genus evolved through Montreal Convention to bring “comity". Certainly learned single Judge while interpreting Third Schedule of the Act scanned history of development of international law on compensation payable to the crash victims and found that minimum compensation payable for injury or death is one lakh SDR. Division Bench however found that controversy surmounted on interpreting relevant provisions of the Third Schedule of Act and held that Act does not provide for payment of any minimum compensation by the air company for death or injury of a passenger in an accident. Decision not only arouses concerns in private international law but also in tortious liability principles of law.

Private  International  Law  Perspective

Passengers in international air carrier may belong to different nations. Bringing an action against a carrier arising from same accident in different jurisdiction available to such passenger would result in different compensation payable by the carrier. It would be impractical for international air carriers to have different liability regime on different routes across their networks. Further to prove --  wilful misconduct by the carrier under Warsaw Convention 1929 has led to repetitious, lengthy costly litigation through the judicial process. Therefore to avoid forum shopping and to bring uniformity in liability regime, international legal community through the service of ICAO³ adopted Montréal Convention for the unification of certain rules for international carriage by air. The Montreal Convention of 1999 was adopted by acclamation on 28 May 1999 and initially signed by 53 ICAO Member States. The Convention came into force in 2003. Even before the Montréal Convention at the Japanese initiative IATA inter-carrier agreement on passengers liability of 1995 was subscribed by many international cariers. Essential features of IATA agreement are a waiver of defences for personal injury and death claims up to100,000 SDR, creating a system of strict liability up to that amount, and a waiver of liability limits above100,000 SDR, not based on strict liability of the carrier, but on presumed liability that may be rebutted by carrier's proof of absence of fault (See page 73 chapter 5 of the Law and Policy of airspace and outer space, a comparative approach byP.P.Chaanppel.). Article 21 of the Montréal Convention reiterates minimum compensation based on strict liability as like under IATA agreement and beyond that amount based on fault. International legal community also underscores minimum compensation payable based on strict liability at the rate of one lakh SDR , see Article 10 of European Council Regulation No. 889/2002 of the European Parliament and of the Council wherein it provides for damage ups to 1 lakh SDR air carrier cannot contest claims for compensation.  See also one of the commentary on Montreal Convention refers to minimum compensation principle “quantum of compensation in case of death or injury of passengers: Convention removes the antiquated and unjustified limitation of liability for death and personal injury of passengers, it accepts a two tier system of compensation: up to SDR one lakh, the carrier is strictly liable and cannot exclude or limit its liability, beyond that sum the liability is based on fault (See M.Milde Liability in international carriage by air: the new Montreal Convention page 835.).”

Therefore viewing in the above backdrop Carriage by Air Act in India cannot be differently understood to mean that liability of the carrier is only to the extent of proved damages.

Tortious  Liability  Perspective

 Strict liability is often synonymously understood as absolute liability. Differences between two principles are narrow in case of strict liability, what is brought on land is not inherently dangerous, therefore defences of act of God, sabotage and plaintiff’s negligence could be pleaded. In case of absolute liability, what is brought on land is inherently dangerous and in such cases no defence at all is allowed (See p.766-767 Ramaswamy Iyer on Law of Tort.).In short difference is that there can be exception in strict liability and there cannot be exception in absolute liability.  Tortious principle of strict liability under the rule in Rylands v. Fletcher (1868 LR 3HL330.)often modified by statutory provisions with regard to compensatory damages by incorporating scaling down of damages on account of contributory negligence. Compensatory damages payable under the statutory provision depend upon the scheme and object of the statute. Strict liability or absolute liability fastened not necessarily based on any negligence sometimes arises for breach of duty of some kind(See P 201 of Tort law By Nicholas J Mcbride & Roderick Bagshaw.). In absolute liability there cannot be any exception on payment of compensation(See M.C. Mehta v. Union of India (Oleum Gas Leak case) (1987) 1 SCC 395.) . Difference between these two principles would place us to understand relevant provisions in Carriage by Air Act in better terms. Relevant rules of the Third Schedule of the Act are extracted here under:

Rule 17.(1) The carrier shall be liable for damages sustained in case of death or bodily injury of a passenger upon condition only that the accident which caused the death or injury took place on board  the aircraft or in the course of any of the operations of embarking or disembarking.

Rule 20.If the carrier proves that the damages was caused or contributed to by the negligence or other wrongful act or omission of the person claiming compensation, or person from whom he or she derives his or her rights,  the carrier shall be wholly or partly exonerated from its liability to the claimant to the  extent that such negligence or wrongful act or omission caused or contributed to the damage. When by reason of death or injury of a passenger compensation is claimed by a person other than the passenger, the carrier shall likewise be wholly or partly exonerated from its liability to the extent that it proves that the damage was caused or contributed to by the negligence or other wrongful act or omission of  that passenger.

 This  rule  applies  to  all  the liability provisions of these rules, including sub-rule (1) of  Rule 21.

Rule 21(1). For damages arising under sub-rule (1) of Rule 17 not exceeding one lakh Special Drawing Rights for each passenger, the carrier shall not be able to exclude or limit its liability.

 (2) The carrier shall not be liable for damages arising under sub-rule (1) of  Rule 17 to the extent they exceed each passenger one lakh Special Drawing Rights  if the carrier proves that-

(a) such damage was not due to the negligence or other wrongful act or omission of the carrier or its servants or agents, or

(b) such damage was solely due to the negligence or other wrongful act or omission of a third party.

In the light of difference between absolute liability and strict liability the above provisions in Third Schedule can be deducted as follows:

I.      Air carrier is liable to pay minimum compensation of one lakh SDR based on strict liability for injury or death provided no contributory negligence is involved. To claim minimum compensation it is not necessary to prove fault or negligence. However there is an exception for strict liability to pay minimum compensation on proof of contributory fault.

II.     Air carrier is not liable to pay minimum compensation of one lakh SDR if the damage suffered on account of contributory fault as well. This is clear from the Rule 20 which states that Rule 21 (1) is subject to Rule 20.

III.   Liability of air carrier beyond minimum compensation is based on fault and there’s no upper limit.

IV.   In claims covered by contributory fault carrier is exonerated wholly or partly from its liability to the extent of contributory negligence involved in the damage.

No one can benefit from his own wrong. Keeping in mind minimum compensation payable which is a large sum in the Indian context Indian legislature had displayed remarkable craftsmanship to exclude the liability to pay minimum compensation on proof of Contributory negligence by incorporating Rule 20. Similar provision is absent in Montreal Convention or European Regulation. To my mind legal conundrum that arisen in this case is  due to equating claim as absolutely liability like under Section 140 of Motor Vehicles Act. No doubt upholding liability of payment of minimum compensation under Act, it ensures India's pacta sunt servunda for implementing Montreal Convention.

Agreeable Symmetry

(By Devan Ramachandran, Advocate, High Court of Kerala)

Let  the  punishment  match  the  offence

                                                        (Cicero)

Nearly every organized protest or strike these days is a stratagem for organized plunder, vandalism and depredation of public and at times private assets and properties.

Most often the destruction is wanton, indiscriminate and without cause. Willing claque, often mercenary, are exhorted by their handlers to violence against person and property for results beyond their comprehension, emboldened by the thought and more often than not the knowledge that they would not be held or found accountable for their flagitious actions. They are soldiers of fortune when transient ochlocracy prevails with the guarantee of safe exit and immunity from penal or tortuous implication or liability.

The concise but sententious order in Hemanth Kumar & Ors. v. Sub Inspector of Police & Anr.  (2011 (4) KLT 288) assumes momentousness with its sheer potential to deter fissiparous organizers and willful participants of such maraud and confutative agitations. Being required to deposit such sums as are equal or adequate to the damage caused by such vandalism for being enlarged on bail would certainly operate as the apposite prophylactic against future perpetration. This is the desideratum of the times for a puissant society. After all, to quote N.A.Palkhivala, democracy without discipline is democracy without a future.

The ratiocination is simple: The diversionist pays. The effect much more in the realm of deterrence than in tort. It is a war call against the shenanigans who choose willingly to vandalise and plunder, however novel his claim be to a right to do so, against the rule of law. This establishes Agreeable Symmetry between inconsiderate action and its ensuant liability.

To extraordinary circumstance we must apply extraordinary remedies said Napolean Bonaparte famously. The circumstance certainly extraordinary and compelling, presenting the leaven for imposition of drastic conditions, since the scourge of vandalism has proceeded unabated, becoming ubiquitous despite the statutory prescription in the nature of the Prevention of Damage to Public Property Act 1984, which received the assent of the President of India as early as in 1984. The Hon’ble Supreme Court has also accepted it as

“unusual situations which need to be provided for in the larger interest of the public” (See (2009 (2) KLT 552 (SC)). 

This is not the first time and certainly not the last that the attention of the courts were and will be engaged by such deleterious behavior. The Hon’ble Supreme Court had in 2007 taken suo motu cognizance of this affliction in the name of agitation when it ordered the Directors General of Police of certain States to file affidavits as to the action taken against the vandering offenders (see Destruction of Public and Private Properties, In Re (2007) 4 SCC 479). By its judgment in this matter reported in  (2009 (2) KLT 552 (SC) (In Re Destruction of Public & Private Properties v. State of A.P.), the Hon’ble Court accepted with hortative approval the recommendations of the Justice K.T.Thomas Committee and Mr.F.S.Nariman Committee, appointed by it to recommend the steps required to be taken to prevent such vandalism and to recover the damages from the perpetrators of such action, and had declared such recommendations as having become operative immediately as guidelines.

The plunder, pillage and maraud however continue in spite of these recommendations, primarily because the perpetrators believe that the legal system is in a state of lassitude and that they would not be made accountable for the perdition committed. It is here that the order of Justice K.T. Sankaran gathers paradigm relevance. The order, contrary to its critics, is not judging the accused but is judging their actions. The order even while judging the causal connection is not being judgmental of the accused.

The order has already been subject to public scrutiny and rightfully so. Opinions, as has been disclosed in the media, have been divided but not on account of the order to impose extraordinary conditions for bail per se but more on account on the argument that the accused may not be the actual perpetrator of the pillage and destruction. This argument indubitably is more speculative and conjectural than factual and should in no manner be employed to judge the purpose sought to be achieved by the order. To be faced with the certainty of being burdened with the sins of their transgressions if apprehended and incarcerated, would travel the length in deterring misguided and misdirected asocial adventurers.

The law is not so much carved in stone as it is written in water, flowing in and out with the tide.

          (Jeff Melvin)