Principles of Desuetude 

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

1. Craies' Statute Law states that desuetude is a process by which an Act of Parliament may lose its force without express repeal. It does not, however, consist merely of obsolescence or disuse; there must also be contrary practice, which must be of some duration and general application. Desuetude requires for its operation a very considerable period, not merely of neglect, but of continuing usage of such a character to infer a counter law or establish a quasi-repeal. Lord Denning M.R. in Buckokev Greater London Council (1971 Ch 655 = 1970 (2) All. ER 193)  has a few words about desuetude “It is a fundamental principle of our Constitution, enshrined in the Bill of Rights, that no one, not even the Crown itself, has ‘the power of dispensing with laws or the execution of laws’. But this is subject to some qualification. When a law has become a dead letter, the police need not prosecute, nor need the Magistrates punish. They can give an absolute discharge.”

2. This principle does not appear to have been used so far to hold that any statute has stood repealed because of this process; but the Supreme Court of India has expressed its opinion that this principle could be made applicable to Indian statutes also. According to the Supreme Court, a citizen should know, whether despite a statute having in disuse for long duration and instead a contrary practise being in use, he is still required to act as per “dead letter” and according to Supreme Court; it would advance the cause of justice. The Supreme Court goes further to say that there is need for its implementation, because persons residing in India, who have assured fundamental rights, must be protected from their being prosecuted and punished for violation of a law which has become a “dead letter.” The Supreme Court in ((1995) 3 SCC 434 = AIR 1996 SC 2856 (Municipal Corporation for City of Pune v. Bharat Forge Co. Ltd.) has dealt with this aspect.

3. This principle has already been in vogue in respect of valuation made for different items under Compensation For Tenants’ Improvements Act, 1958. In Table 1 published under S.13(1)(a) of the Act; where the price of 1000 coconuts ranges from ` 130 to ` 380 in various districts; for arecanuts ` 16 to ` 38.75 in various districts, pepper per pound ranges from 0,62 ` to ` 1.59. and price of paddy per para ranges from ` 2-19 to ` 3-30 in various districts. Similar as the rates for costs of cultivating and harvesting of the crop of paddy and cost of planting, protecting a coconut tree, arecanut tree, Jack tree, pepper vine etc. 

4. Adverting to AIR 1964 SC 1179 State of M.P. v. Bhopal Sugar Industries LD1, (AIR 1964 SC 1590 Narottam Kishore Deb Varman v. U.O.I. ((1979) 4 SCC 642), H.H. Shri Swamiji Amar Mutt  v. Commissioner of HRE Dept., ((1984) 1 SCC 222) Motor General Traders v. State of A.P., ((1986) 3 SCC 385) Rattan Anja v. State of Tamil Nadu ((1990) 1 SCC 109) Synthetics and Chemicals Ltd. v. State of U.P., the Supreme Court of India in paragraph 15 of its judgment reported in ((1998) 2 SCC 1) Malpe Viswanath Acharya v. State of Maharashtra has stated that “ a statute which when enacted was justified, may, with the passage of time, become arbitrary, and unreasonable law, should not be unjust to one and give disproportionate benefit to another.”

Check Cheque Cheating

(By S.A. Karim, Advocate, Vanchiyoor, Thiruvananthapuram)

In a cheque there are three parties - drawer, drawee and payee. Payee is the person who receives the cheque amount. Drawee is always a bank. Drawer is the person who draws the cheque. Drawing means writing the amount, date and signature on a cheque. Then only a cheque becomes a valid cheque. Otherwise it is defective one and has no value. In the ordinary parlance, drawing means putting the signature on the right side bottom of a cheque.

Lending and borrowing are the main functions of banks and other financial institutions. They demand proper and sufficient securities for availing loan. Ordinary people is unable to afford proper and sufficient securities. So such people turns to the local and unscrupulous money lenders for their urgent needs. The money lender gives money on signed cheque without writing amount and date and other securities like promissory note and property documents.

Once the borrower fails to repay the loan amount, the lender writes amount of his choice and date and presents the same for encashment. Thus starts criminal case. In almost all such cases, the amount claimed is very very high. At this stage only the borrower understands the gravity and seriousness of the cheque issued without writing amount and date. Several such persons have been ruined beyond repair.

A welfare Government is duty bound to protect the innocent borrowers and prevent the unscrupulous money lenders from their unfair trade practice. In the existing cheque law, writing amount and date need not be in the hand writing of the drawer. It can even be typing. Drawer’s signature presumes the correctness of the amount and date. In case the law insists to write amount and date on the cheque in the drawer’s handwriting, the money lender’s mischief shall be defeated and save lakhs of borrowers.

Double Justice

(By S.A. Karim, Advocate, Thiruvananthapuram)

In our criminal justice system, State is the complainant. Police represents the State. Investigating the case, filing charge sheet, adducing evidence, and making ground for conviction of the accused are the prerogatives of the police. Trial, appeal and revision are the hierarchy of the courts. If the Trial Court is magistrate court, sessions court is the appellate court. High Court is the revisional court. If Trial Court is the sessions court, High Court is the appellate court and Supreme Court the revisional court. It Trial Court convicts the accused, he goes appeal to the appellate court. If the accused is acquitted, the police may go for appeal to the appellate court, where the convicted accused goes. If the accused’s conviction is confirmed in appeal he goes for revision. In case the accused is acquitted in appeal, the police may go for revision in the same court. There is one trial, one appeal and one revision.

The Criminal Procedure Code provides provision for filing private complaint direct to the Court. The Trial Court may acquit or convict the accused. If the accused is convicted, he goes appeal to the appellate court. If the accused is acquitted, the complainant has to go to the High Court with a Special Leave Petition under Section 378(4) of the Code. In a complaint case, accused’s appellate court and complainant’s appellate court are different. Hence, equality before the law or the equal protection of the laws do not work. It is a violation of Article 14 of the Constitution. So, there needs modification in Section 378(4) of the Code to make the appellate court one and the same to the accused and the complainant.

Payment of Ransom to Pirates, Whether Opposed to Public Policy?

(By V.B. Hari Narayan*, Advocate, High Court of Kerala)

When a vessel is captured by pirates, can it be considered as irretrievably lost in the context of Marine Insurance Act, 1908 and whether payment of ransom to pirates is against English law are the two interesting questions considered by the UK Court of Appeal (Civil Division) in the recent decision in Masefield AG  v. Amlin Corporate Member Ltd. (2011) EWCA Civ.24. 

Facts

Pirates seized the vessel Bunga Melati Dua on 19 August 2008 in the Gulf of Aden while she was en-route from Malaysia to Rotterdam. The vessel was then forced to anchor off the coast of Eyl in Somalia territorial waters. During the course of the hijacking, one of the crew member was killed by the pirates. The ship owners (MISC), entered into negotiations with the pirates soon after seizure following a ransom demand in excess of US$2 million for the safe release of the crew, vessel, and her cargo.

While negotiations were in progress, on 18 September 2008, the appellant (Masefield, who owned two parcels of bio-diesel loaded onboard Bunga Melati Dua) served a notice of abandonment on the respondent (Amlin Corp. - the insurer of the parcels of biodiesel). The respondent declined the notice of abandonment but the parties agreed that proceedings should be deemed to have commenced on the date of issue. The Vessel was later released on payment of US$2 million as ransom.  The claimant apparently was not involved in the negotiation process or payment of ransom.  Following the eventual release of the vessel on 2 October 2008, after a brief stopover in the port of Djibouti, for a crew change and damage assessment, Bunga Melati Dua arrived in Rotterdam on 26 October 2008. The cargo was intact in original load port condition and had not deteriorated due to the delay, but unfortunately it had missed its prime market in the meantime. The market for bio-fuel is seasonal; hence the claimant had to store the cargo until the following year. Eventually it was sold for a price significantly less than its insured value. The assured gave credit for the recovery made on re-sale, less expenses, and claimed the balance. 

The  Issue

The appellant claimed for an actual total loss, contending that they were ‘irretrievably deprived’ of their cargo when the Bunga Melati Dua was seized by pirates. The appellant further contended that despite the cargo being subsequently retrieved upon the payment of ransom; such payment was undesirable from the point of view of public policy and universal principles of morality. In addition the appellant also argued that it is not the duty of the assured to preserve his property from loss by succumbing to a ransom demand. Therefore, the parcel of cargo ought to have been treated as ‘irretrievably lost’ and the only means of recovering it was to do something which an insured could not reasonably be expected or required to do. On the other hand the respondent contended that the cargo cannot be said to have ‘irretrievably lost’, going by the statutory test prescribed for an actual total loss (ATL) under S.57(1) of the Marine Insurance Act, 1906 as there was a good chance of negotiations for payment of ransom being fruitful.

The  decision

The Court of first instance, agreeing with the insurer’s submission dismissed the claim. In appeal by the claimant the Court of Appeal held unanimously that the appeal must be dismissed. Lord Justice Rix , giving the judgment for the Court, disagreed with the appellant’s submission and found that, when there is a strong likely-hood for the vessel being released after the payment of  a nominal  ransom (nominal in relation to the value of the vessel and her cargo) to the pirates, which will secure the safe recovery of the vessel and her cargo, there is no deprivation of the property. The Judge was persuaded to take such a view based on previous successful release of vessels under seizure by Somali pirates and the statement given by the expert witness. Thus according to Lord Justice Rix, the assured was at no point of time irretrievably deprived of its cargo so as to constitute an actual total loss (ATL) but it was more of a typical wait and see situation.

The appellants’ reliance on Dean v. Hornby ((1854) 3 El & Bl 180) was found by the Court to be of any assistance as there is no legal rule that seizure by pirates will automatically amount to an ATL. However, Rix LJ observed that a vessel seized by pirates may amount to an ATL, when the seized vessel is being utilised for the pirates’ own use and there is no prospect of finding or recovering the vessel or her cargo.  

On the grounds that payment of ransom is against public policy and that the property being held to ransom “must be considered to have been irretrievably lost, physically and/or legally, where the only means of recovering it was to do something which an insured could not reasonably be expected or required to do”: Rix LJ held that it is the role of the Parliament and not “the idiosyncratic inferences of a few judicial minds” to determine what is best for the public. Placing reliance on the decision in Egerton v. Brownlow ((1853) 4 HLC 1), it was concluded that payment of ransom by ship owners to secure the safe return of their property is not against the UK or International law.

 The Court of Appeal went on to consider whether the taking of the vessel and cargo, even with an intention of returning them on payment of a ransom, constitutes theft under English law. This point was dealt with quickly and the Court concluded that on facts since there was no intention to permanently deprive the owner of the property, it cannot be treated as theft.

Masefield’s further argument that an insured was not under a duty to sue and labour (Section 78(4) of the Marine Insurance Act, 1908) by paying a ransom, as something not expected of it, was also rejected. As Rix LJ put it, “the fact that there may be no duty to pay a ransom” does not mean there is any obligation not to make such payment. The remainder of the judgment considered the question of public policy in relation to ransom payment. The Court of Appeal held that “there is no legislation against the payment of ransoms, which is therefore not illegal.” The learned Judge went on to identify that “there is no universally recognised principle of morality, no clearly identified public policy, no substantially incontestable public interest, which could lead the courts, as matters stand at present, to state that the payment of ransom should be regarded as a matter which stands beyond the pale, without any legitimate recognition.”

Conclusion

The judgment of the Court of Appeal will be welcomed by those involved in the shipping industry, marine insurance and legal field. Whilst protagonists in favour of making ransoms illegal will continue to attract the moral dilemma of paying ransoms to Somali pirates for the safe release of vessels, crews and her cargoes, the reality is that as long as there remains no practical alternative for ship owners and their insurers, the practice will continue. Above all, ship owners undoubtedly have a moral obligation to secure the safety of life of their crew members under any circumstances and paying ransom is the only way out as they virtually  have no other options to safe guard their crew. In addition it is the duty of the state to protect the life and property of every citizen. Contrary to the policy of most countries where ransom payment is not considered illegal, countries like South Korea and United States of America have maintained a “No negotiation with pirates” attitude making ransom payment illegal. 

Cargo insurers will be reassured that the Court of Appeal dismissed the claim for an actual total loss at the time of capture; a reversal of the first instance judgment could have resulted in cargo underwriters being faced with a significant number of total loss claims from assureds and becoming owners of valuable cargoes currently being held by the Somali pirates. 

The fact that payment of a ransom has been held to be recoverable as a sue and labour expense in Royal Boskalsis Westminster NV v. Mountain ([1999] QB 674) was thought by Mr Justice Steel in the trial court to be a strong indication that the Claimant’s position was misconceived, was approved by the Court of Appeal.

The Court went on to state that, pirates are not classified as terrorists and reiterated that the payment of ransom is a sue and labour expense under a Marine Insurance policy. It is arguably implicit in the judgment of the Court of Appeal in this case that ship owners and cargo owners must exercise whatever options they may have under  Section 78(4) of the Marine Insurance Act, 1906, to meet the demands of  pirates, in order not to break the chain of causation between peril and loss.

* LL.M (Southampton)

Organ Transplantation and the Law

(By Kaleeswaram Raj, Advocate, High Court of Kerala)

Gist of the paper presented on 30.7.2011 at the National Workshop conducted by Indian Medical Association, Kerala, at I.M.A. Hall, Kochi

1. Statutes can have an ethical foundation. Juvenile Justice Act rests on ethics of Child Rights. The Legal Services Authorities Act rests on the ethics of mediation and conciliation. Abolition of exploitation of children has an intrinsic ethical value. So is the case with resolution of dispute by way of conciliation. Commercial dealings in human organs is per se unethical, according to the Transplantation of Human Organs Act, 1994 (TOHO Act, for short) (See para.2,Statement of Objects and Reasons of TOHO Act, 1994.) . But this itself is a questionable postulate. The arguments in favour of commercial transactions of human organs too have an equal (or more) formidable counter ethical foundation.

2. Demand overweighs supply in transplantation scenario. It so happens despite high success rate in transplantation treatment. India is ranked second (after the United States) in kidney transplantation from live donors. Roughly 3,200 to 3,500 transplantations occur every year. We have experts and expertise. But, non availability of organs, remains as the major obstacle in the life saving ventures. Conventional mindset cannot readily accept Scott Russell who visulised “body as property”.  But even in United States, law treats organs as national assets (Organ Transplantation and Transportation Act.) and not an individual property, capable of being sold or purchased. The “final Rules”(1998) in the United States aim at “equitable allocation of organs” based on “sound medical judgment”.

In US, it is reported that despite the high success rate of 95+ % in organ transplantation, 10 persons die every day due to non obtainment of ‘body parts’.

3. Our options need not be necessarily between the present system of donation on the one hand, and the free market of organs with statutory support, on the other.

There is an option in between - A benevolent statute which encourages donation of organs by taking a pro active role - a motivating statute that explores the possibilities of incentives, compensation, concessions, reservations, etc. A catalytic statute is long over due, which should replace TOHO Act that failed to explore such possibilities. Also there is a need to educate the mass and to make them familiar with the dangers of the orthodox reluctance to part with the ‘parts’ even on death.

4.  TOHO Act creates procedural hurdles as well. Those may act as obstacles to the patient in critical situations. Thus the TOHO Act does violence to the ratio laid down by the Supreme Court of India in Paramananda Katara (AIR 1989 SC 2039) which indicated that no regulations or 'law’ can intervene to avoid/delay the proper and timely discharge of duty of a doctor. TOHO Act, thus doesn’t stand the test of Art.21of the Constitution, dealing with a citizen’s right to life and right to live, as explained by the Supreme Court in Paramananda Katara.

5. A better regulatory legislation may

-- prohibit brokerage or any unethical trade of organs for that matter. Even pricing, distribution and allocations can be strictly subjected to statutory regulations. Penal provisions in the TOHO Act (sections 18,19,20 and 21)could be retained, subject to the new regulatory provisions.

-- create a national organ bank with sufficient resources and donor net work.

-- stipulate concessions, reservations, incentives, welfare schemes etc., for genuine donors.

--  legalize the policy of presumed consent with necessary conditions and regulatory clauses.'

6.  TOHO Act is also a failed legislation. Successful prosecutions are rarely reported, though the violations of the Act often hit the headlines. Reports about ‘kidney rackets’ are not rare in India. Also there are complaints regarding misuse of S.9(3) of the Act by which trades occur in the guise of ‘affection’ or ‘attachment’, which is either not detected or indulged by the authorities under the Act.

7.  Therefore, the TOHO Act needs to be revisited and thoroughly revised in tune with the modern thoughts on ethical marketing practice. An egalitarian approach would ultimately find that both life and death occur to the body only and not to the soul.