Indian Competition Law : An Overview
By Shiju Varghese Mazhuvanchery
13/06/2011
Indian Competition Law : An Overview
(By Shiju Varghese Mazhuvanchery)*
The merger and acquisition provisions of the Competition Act, 2002, came into force on 1st June, 2011 (Act No. 12 of 2003, as amended by the Competition (Amendment) Act, 2007. S.O. 479 (E) Ministry of Corporate Affairs dt.4.3.2011 appointed 1st June, 2011 as the date for coming into force of Sections 5,6,20,29,30 and 31 (All these sections deal with mergers and acquisitions)). With this, all the provisions of Indian competition law have been notified and enforced. India is one among the hundred odd countries that adopted a ‘modern’ and ‘effective’ competition law in the last two decades. Competition law is often defined as the framework for regulating competitive activity (M. Furse, Competition Law of the EC and UK (4thed, Oxford: Oxford University Press, 2004), p.l.). It protects the process of competition. The common features of competition laws all over the world are: Provisions relating to the prohibition of anti-competitive agreements including cartels, abuse of dominant position and scrutiny of mergers from a competition stand point; and creation of an independent quasi-judicial body for an efficient enforcement of the law.
Framing of Indian Competition Act, 2002
Competition Act, 2002 cannot be called the first competition law in India. The Monopolies and Restrictive Trade Practices Act, 1969 addressed similar issues as the 2002 Act. When one analyses the history of competition law in India, three distinct phases can be discerned (For a detailed account of the history of Indian competition law see, Mazhuvanchery, “The Indian Competition Act: A Historical and Development Perspective”, Law and Development Review, Vol.3, No. 2, Article 8, (2010).).The first phase is the initial years of independence, which is characterized by an absence of competition law. The requirement of obtaining licenses for establishing and expanding of industrial operations resulted in entry barriers to new entrants. Similarly, the control on raising funds from the market also limited the entry of new players. This led to the emergence of a number of industries exercising monopoly power in many sectors. The second phase, beginning in the Sixties saw the unraveling of many political events that led to the enactment of a number of legislations in the field of economic activity. Controlling big business was the major aim of all these enactments.
The framing of India’s first competition law, the Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act) took place during this period. Prevention of the concentration of economic power to the common detriment; control of monopolies; prohibition of monopolistic trade practices; and prohibition of restrictive trade practices were the principal objectives of the MRTP Act. The MRTP Commission was established to oversee the implementation of the Act. The third phase in the development of competition law started in the year 1991. The massive fiscal and balance payment crisis that climaxed in that year led to a series of economic reform measures. The Industrial Policy, 1991 announced many far reaching changes on the economic front. The policy announced a series of reforms in industrial licensing; foreign investment; foreign technology agreements; public sector policy and the MRTP Act. The MRTP Act was identified as a major impediment to economic growth. Subsequent to the policy statement, the MRTP Act was amended in the same year. The most important amendment was the omission of Chapter III, which dealt with the concentration of economic power. This resulted in a situation where there was no prior scrutiny of mergers and acquisitions from a competition law perspective, leading to a spate of mergers and acquisitions mainly involving multinational corporations (For a detailed discussion see N. Kumar, Mergers and Acquisitions by MNEs — Patterns and Implications, 35 Economic and Political Weekly 32 (2000), 1851-1858.).Keeping pace with the reform process, the Central Government in 1999 announced the setting up of a commission to examine the relevance of the MRTP Act and to suggest an updated competition law in line with developments taking place at the international level. The High Level Committee on Competition Law and Policy (Ragahavan Committee) found that the MRTP Act was limited in its sweep and hence failed to fulfill the need for a competition law in an age of growing liberalisation and globalisation. It was noted that the MRTP Act, in comparison to the competition laws of many countries, was inadequate to foster competition in the market. The Committee recommended the scrapping of the MRTP Act and the enactment of a new competition law.
On the basis of the recommendations of the Raghavan Committee the Competition Act,2002 (the Act) was enacted replacing the MRTP Act. The Act deals with anti-competitive agreements, abuse of dominant position and anti-competitivecombinations. It establishes an independent body, the Competition Commission of India (CCI) for the enforcement of the provisions of the Act. Even before the major provisions were notified, the Act underwent major amendments in 2007. The creation of a Competition Appellate Tribunal to decide appeals against the orders of CCI was one major change brought by this amendment. The amendments were necessitated by the filing of a Writ Petition in the Supreme Court of India challenging certain provisions of the Act (See Brahm Dutt v. Union of India (2005) 2 SCC 431. See also Statement of Objects and Reasons, Competition (Amendment) Act, 2007. For a discussion on the contentions and the order of the Supreme Court in this case see, A. Bhattacharya, India’s New Competition Law: A Comparative Assessment, 4 Journal of Competition Law and Economics 3 (2008), 609-610.).After a hiatus of seven years, provisions relating to anti-competitive agreements and abuse of dominant position were notified in the month of May, 2009 (Though enacted in 2002, only provisions relating to the advocacy functions of CCI were enforced from 2003.). Section 66 which repealed the MRTP Act, 1969 was enforced on 1st September, 2009 (S.O.2204 (E) Ministry of Corporate Affairs dt.28.8.2009.). With that repeal, thirty years of MRTP regime - often described as a draconian legislation by the industry - came to an end. Now, with the coming into force of the merger and acquisition provisions, the Act has come into force in its entirety.
Salient Features of the Act
There are three ways in which the effect of monopoly can be felt in the market: competitors deciding to co-operate instead of competing (anti competitive agreements); abuse of dominant position; anti competitive mergers and acquisitions. As noted earlier, the Act contains provisions to deal with anti-competitive practices in the market. Each of these issues is discussed separately.
Anti-competitive agreements
Even if there are a number of competitors in the market, if all of them decide not to compete but to cooperate, the benefits of competition will not accrue to the consumer. Here the group of competitors is acting like a single dominant firm. Price cartel is a classic example of this. These types of agreements can be broadly divided into horizontal agreements and vertical agreements. A horizontal agreement is an agreement between firms operating in the same field. For example, an agreement between two car manufacturers is a horizontal agreement. These agreements can be a price fixing agreement (consumer is denied competitive prices), market sharing agreements (consumer is denied a choice of products), production quota agreements (here again the consumer is denied competitive prices), bid rigging and collusive bidding agreements (the purchaser is denied the benefits of a tendering process). The Competition Act proscribes these types of agreements and casts a presumption in favour of the anticompetitive nature of these agreements (Section 3 deals with anti competitive agreements. S.3(3) specifically deals with horizontal agreements.).A vertical agreement is an agreement between firms operating at different levels of production. An agreement between a car manufacturer and a dealer is an example of such an agreement. As the anticompetitive effect of such an agreement is lesser compared to a horizontal agreement, competition law views these agreements leniently. In order to come within the prohibition of the Act, the anti competitive effects of the agreement in the market has to be demonstrated (Section 3(4).). The Act gives an inclusive list of such agreements. The agreements included in the list are: Tie in arrangement, exclusive supply agreements, exclusive distribution agreements, refusal to deal and resale price maintenance (Section 3(4)(a)-(e).).
Abuse of dominant position
A dominant undertaking can abuse its dominance by resorting to a number of practices like charging high prices, restricting quantities etc. The dominant position can also be used by a firm to protect its dominance by making it difficult for potential entrants to enter the market or forcing the existing players to leave the market. Predatory pricing is an example of such a practice. These actions are prohibited as anti-competitive (Section 4.).Abusive practices by a dominant firm can broadly be divided under two categories, viz., 1) practices adopted with an aim to exploit its position of dominance, and 2) practices adopted to protect the position of dominance by making it difficult for potential competitors to enter the market. There are different yardsticks adopted by legislations in determining the position of dominance. One approach is to define dominance on the basis of market share held by the undertaking in question. The repealed MRTP Act adoptedsuch an approach. Another approach is to define dominance on the basis of the capacity of the undertaking in question to distort the market to its advantage. The Indian Competition Act, 2002 adopts such an approach (Explanation (a) to Section 4.).
Anti competitive mergers and acquisitions
Market power can be achieved through consolidation of competing enterprises. Mergers, amalgamations, acquisitions, takeovers etc., are ways of consolidating market power. As these consolidations have direct bearing on competition, the law treats this issue seriously (Sections 5 and 6.).As in the case of agreements, mergers can also be classified into horizontal and vertical. In addition to these there are conglomerate mergers that are between enterprises operating in different markets. Horizontal merger is potentially anticompetitive as it involves the integration of two firms operating in the same line of commerce. It accounts for a substantial number of all the mergers taking place across the globe. These mergers can have both anti competitive as well as pro-competitive effects. A competitor taking over a failing firm can have pro competitive effects. Similarly, merger of two competing firms can increase efficiency. A number of factors are taken into consideration in determining whether the merger is anti-competitive or not (Section 20 (4) lists out those factors.).As the cost of disentangling a merger can be prohibitive, what is generally followed is to mandatorily subject mergers above a certain threshold to compulsory pre merger scrutiny. The Indian Act also follows this approach. Section 5 of the Act prescibes the threshold limits. However, these limits have to be enhanced or reduced by the Central Government every two years on the basis of the wholesale price index or fluctuations in exchange rate of rupee or foreign currencies (Section 20 (3). In exercise of this power the threshold limit has been enhanced by 50 % vide S.O.480 (E) Ministry of Corporate Affairs dt. 4.3.2011.).
Conclusion
CCI has been entertaining informations on anti competitive agreements and abuse of dominat position for the last two years. It has passed many orders, which are accessible on its website (www.cci.gov.in).The Competition Appellate Tribunal (CompAT) is constitued under the Chairmanship of Hon’ble. Arijit Pasayat. The Supreme Court recently decided a significant case on the respective powers of CCI and CompAT (Competition Commission of India v. SAIL, (C.A. No. 7779 of 2010, decided on 9.9.2010).). With the coming into force of merger provisions, these institutions will assume greater significance in the Indian legal regime, especially in the corporate sector.
* Affiliated to Department of Policy Studies, TERI University, New Delhi. He is involved in the teaching and research of Competition Law and Regulatory Laws.
Forest Laws -- Flawed Legislative Interventions - Few Thoughts in the Wake of State of Kerala v. Kumari Varma - 2011 (1) KLT 1008
By Boby Jacob, Advocate, Mannarkkad
06/06/2011
Forest Laws -- Flawed Legislative Interventions - Few Thoughts in the
Wake of State of Kerala v. Kumari Varma - 2011 (1) KLT 1008
(By Boby Jacob, Advocate, Mannarkkad)
Introduction
The High Court of Kerala has with prudence, categorically clarified the law “Kerala Forest (Vesting and Management of Ecologically Fragile Lands) Act, 2003 (EFL Act for short)”, removing a perceptible irritant among the forest laws, bringing solace to the farming community. Rightly so, since the farming community has been at the receiving end from legislative interventions, under the guise of protecting forests, putting the farming community on tenterhooks perenneally and denying them the right to enjoy the usufructs of successful litigations, besides the substantive rights accrued to them under the earlier laws. Such was their anguish and anxiety, that many among the farming community were reluctant and afraid to treat even the exempted “private forests” to be assets, that could be passed on to their progeny. Or has it become the proverbial “forbidden wealth.”?
This author would like to share a few thoughts on the impact of the judgement and on the “legislative interventions” through the plethora of laws that pervades the “forest arena” in Kerala.
The inspiring judgement
Let me now refer to the Division Bench ruling of the High Court of Kerala as reported in “2011 (1) KLT 1008”. The judgment was rendered by the Division Bench, consisting of their Lordships the Chief Justice Mr. Justice Chelameswar and Mr. Justice P.R. Ramachandra Menon, in the appeal filed by the State against the Single Bench decision on a Writ Petition, preferred by an agriculturist of Kannur Dist., Mrs. Kumari Varma regarding the notifications under EFL Act.
The impugned notifications issued by the State had declared the vesting of 24.28 hectares (notified as 35.105 hectares vide an earlier notification dated 25.1.2008) of Mrs. Kumari Varma’s property, in pursuance of the EFL ordinance. These vesting notifications had come up, after, Mrs. Kumari Varma had been involved in a long drawn out litigation from 1979 onwards with regard to the vesting notification under the Kerala Private Forest (Vesting and Assignment) Act, 1971 and before the property was restored in deference to the final order of the Apex Court. The judgment of the Supreme Court, rendered on 4.8.2006, had brought an end to the litigation that started in 1979, under the Kerala Private Forests (Vesting and Assignment) Act, 1971. As fate would have it, the EFL notification were promulgated, much to the chagrin of Mrs. Kumari Varma.
The judgment has to be appreciated, as it has with right perspective, analysed the EFL Act. The way in which the Judges have approached the issues emanating, has to be applauded, for many a time, it is the correct attitude that matters while resolving a dispute. The EFL Act proceeds on the very definition of the expression “ecologically fragile land” and the judgment very rightly has tackled the expression. The Judges have after an elaborate discussion found the expression “forest land” in the EFL definition to exclude those lands which are used principally for the cultivation of crops of long duration such as tea, coffee, rubber, pepper, cardamom, coconut, arecanut or cashew or any other sites or residential buildings and surroundings, essential for the convenient use of such buildings. Their Lordships have not invented anything or cooked up any innovative theories to arrive at the conclusions. In fact the Judges have interpreted the definition, in conformity with the law as it was framed in the Kerala Private Forests (Vesting and Assignment) Act, 1971 and with the support it has gathered from the EFL Act, whereunder Section 2 (c) and (d) provide for the definitions of the expression “forest” and “land”.
The State had, very curiously enough tried to destroy the farmer’s interest by canvassing a theory that the court should accept the present situation of the land, when it is found to be deprived of the plantation, after the vesting notification and after the farmer was prevented or restrained from entering the property. So much so, a farmer, who under compulsion could not continue with the cultivation or maintain the plantation, had to suffer for no fault of his own and would have to haplessly watch the same land being taken over as “ecologically fragile land”. The High Court has very succinctly and categorically negatived this argument of the State, by declaring that there must be an intention on the part of the owner of the plantation land to abandon the land and permit the land to become a forest land and in the instant case there was no intention on the part of the owner to abandon the cultivation of cardamom and infact was prevented from cultivating, due to the denial of possession on a wrong interpretation of the Kerala Private Forests (Vesting and Assignment) Act, 1971. The court warned the State, that it cannot be permitted to take advantage of a wrong committed by it in depriving the owner of the land, the legal rights to cultivate the lands by wrongly invoking Private Forests Act, 1971.
The judgment has thus brought in tranquility to the farming community, though there are forebodings, so long as the executive harbours prejudices against the farming community and there could be no restraints on its attempts to introduce laws, to promote its image vis-a-vis forests. That is exactly what the history reveals on the subject.
History of laws on forests
There have been various laws on forests, promulgated since 1949, with the avowed intention of preserving and promoting forests wealth in the State. However, on an impartial analysis of the history, it is so clear that the intention apart, the executive as well as the legislature have totally failed to realize the objects, it set for itself. After independence, starting from the Madras Preservation of Private Forests Act (MPPF Act) 1949, the legislature had framed several laws viz.. Kerala Forests Act 1961, Private Forests (Vesting & Assignment) Act, 1971, Preservation of Trees Act 1986, Promotion of Tree Growths in non-forests Area Act 2005 and Kerala Forests(Ecologically Fragile Land) Act, 2003 (Now Act 21/2005).
Many of these laws introduced at various point of time were intended to satisfy certain protagonists in order to promote Forest Wealth, as they would like to have it. Among the Acts, the Kerala Private Forests (Vesting and Assignment) Act, 1971 is a case for study, as it shows many intrinsic drawbacks, in the matter of drafting and presentation. This Act in its present form was preceeded by several ordinance numbering more than a dozen, over a span of 25 years. The earliest ordinance on the subject was, in fact, made without even providing for appeal rights to the aggrieved parties. Thereafter, the executive brought in amendments after the High Court struck down the law, to provide for appeals and indeed, several other amendments had to be made time and again, to fill up the lacuna, as and when it was revealed. The Government at various intervals, subjected the law to various kinds of modifications, even to the extent of bestowing “review rights” on it, with the apparent objective of overcoming the negative judgments from the forest tribunals on the alleged basis of concessions/manipulations on the part of the Government officials. A queer piece of legislation, manifestly enacted to find agricultural land to be distributed mainly among the landless agricultural labourers, but was later trumpeted to be a shield to save forest wealth. These two extremely contradictory postures in the make up of a legislation, in fact, served none.
The Kerala Preservation of Trees Act, though not a forest law basically, had all the trappings of a forest enactment. Its intention was also to restrict cutting of trees and had even provided for prohibiting cutting of trees from a notified area, which was formerly a private forest or cardamom cultivated area etc. This law ultimately was misused by the forest department to harass people who had genuinely promoted tree growth in their premises. Instances were there when cases were booked against even old women under the Act, who perhaps had sold the trees for some dire necessity in their house - hold. Many habitual offenders could circumvent the rules by putting up sheds to get permission for cutting trees, masquerading them as house compounds.
The latest legislation viz. Kerala Tree Growth Promotion Act also wanted to promote preservation of trees, but without trying to reconcile the space for the two Acts viz, Kerala Preservation of Trees Act and Kerala Tree Growth Promotion Act.
EFL Act was introduced in the wake of a purported call for preservation of eco-systems and had the blessings of environmentalists. However the so called forest preservationists, made it another piece of legislation that almost follows the Kerala Private Forests (Vesting and Assignment) Act, 1971. What is undone under the 1971 Act, is sought to be done by the 2003 enactment. Nevertheless, the legislature has adopted the 1971 enactment-provisions, to meet the objectives in the 2003 Act. Even while going in pursuit of the EFL enactment, it took about two years to reach the present composition viz. Act 21/2005. The structural deficiencies of the enactment are many, as the checks and counter checks are mostly done through the bureaucratic set up. The management part of the enactment, is yet to be put in place properly and relies presently on the frugal official set up of the department.
Present Situation
A critical audit of the Kerala Forests (Vesting and assignment) Act, 1971 has not been done so far, at least as far as I know. Nobody knows how much of land has been taken over by the State under the 1971 enactment and how much of land have been “distributed to agriculturists and agricultural labourers for cultivation’,’ the statutory objective described in the preamble. The Government has truly and definitely failed to realise the objective. It cannot certainly boast about, when it has not been able to restore possession of the lands exempted u/S.3 (2) and 3 (3) of the Act 1971, even after final judgment has been rendered by the Apex Court. There are of course, many properties not taken over, even after the “dismissal of petitions” having been accepted by the Apex Court and which continue to be with the litigants, who earn profits, with the active connivance of the officials.
The EFL law was enacted with the sole objective of denying the successful litigants under the 1971 enactment, from getting their property restored. The department of forests, unofficially, laments its inability to manage the lands it has already notified and there are many instances where lands continue to be with the owners.
A performance audit vis-a-vis both these enactments could be revealing and shocking.
Farming community’s predicaments:
The farmers who were given to understand that their aspirations are going to be met, through the 1971 legislation, have lost their hopes and have been destined to be either perenneal litigants or live at the mercy of the forest department for no-objection certificates for anything and everything. Their travails continue unabated. Those successful litigants faced the music, when the State amended the Act to bring in review applications. Again after appeals and finality through the Apex Court judgment, the irritants that hampered them were Sec. 5 notifications under Kerala Preservation of Trees Act 1986 and EFL Act, 2003. Those who chose the litigation route, a legitimate right under law, have perished, while the others, the lucky ones, saved their lands by managing the powers-that-be.
Misplaced enthusiasm and unnecessary interference
The pervading attitude, right through the spectrum of private forest law, has been to enlarge the availability of agricultural lands and to provide the agriculturists and labourers enough land to cultivate. However over the years, the executive tried to adopt a dubious stance by becoming the preservationists of forest wealth, using the very same laws. The 1971 enactment, that nationalised the private forests, without compensation, in fact, opened the flood gates to many unscrupulous elements to alienate and destroy the real forests, by the time the Act became operational. Rather than saving the forests or facilitate the farmers, what eventually happened was the denuding of forest wealth. Had there been compensation, 1971 Act could have earned universal approval and prevented back-door alienations.
Among the laws enacted to protect the forest wealth, the pioneer law viz. Madras Preservation of Private Forests Act 1949, could be acclaimed as the best among the lot, for its realistic and practical approach and the vision to safeguard the forest wealth. The Act and rules had a system that was almost perfect in the matter of cutting and removal of trees. The law had provided only selection felling, with a rider to regenerate tree growth and should the owner fail to do so, the owner would be penalised and would no more be eligible for cutting permit. The system had been fine-tuned by the officials of that era, when a cutting permit could be procured only after an elaborate process. The rigours undergone by an applicant is referred to in detail by the famous Novelist Malayattoor Ramakrishnan, (I.A.S.) in his award winning novel “yanthram”, based on his actual experience, as a Sub Collector in State Service. In the light of such a law, the Kerala Preservation of Trees Act, 1986 and Kerala Promotion of Tree Growths in non-forests area Act, 2005 would have become unnecessary and superfluous. Indeed, forest wealth was meticulously protected and preserved, with a handful of personnel (Karyasthas or managers of yester - years) by the erstwhile landlords of the western ghat and in fact, their autocratic dispensation was held in awe, as they could deny even a pack of firewood to the women of that time. Now, even with a healthy number of personnel in the department of forest, protection is a rarity, while denudation of forest wealth is the common feature. In fact more the laws to guard the forests, more the acts of violence that deprive it.
Profit makers in the wake of new laws
This author, while going through the laws on forests, is surprised by the discretionary powers given to the forest officials, in the matter of issuing certificates. It would only be a subject of speculation, as to how many of these officials have really visited the nook and corners of the forests, under their jurisdiction. No wonder on the rise in the quantity of allegations, every time a new law is promulgated, when exemptions are granted on the certifications made by empowered officials. The farmer or the people at large are always left in the lurch and nobody bothers about them.
Judgements keeping the door open-no finality:
It is a matter of inspiration and joy to read the great analytical wisdom shown by their Lordships in 2011 (1) KLT 1008, while correctly interpreting the EFL Act. However the Division Bench’s passing comment viz. that it is open to the State to notify the land as “ecologically fragile land”, if it is so as on today, throws a spanner into the enthusiasm generated. It is this space that is thrown open, that could propel the over enthusiastic officials to create mischief and some legislative wizards in the law department would seek the creation of another law.
Legislation - restraint and caution required :
The present day legislative exercises are often done without adhering to the basic tenets and parameters laid down over the years. There is no proper survey to evaluate the need of a law and its possible impact on the community. Many a time laws are promulgated as ordinances and it is only after years the legislature takes up the concerned Bill for discussion and enactment. It is only those enactments that are preceeded by elaborate discussion and the modifications, pursuant to it, that can make the law withstand the test of time. Let it be remembered that the Courts have often referred to the parliamentary discussion to interpret the law properly.
Conclusion
It is in the context of a plethora of laws that seldom reflect the will of the people and relate to their desire, the High Court’s judgment has to be appreciated and applauded. Not because it brought solace to the farming community, but because it has, while holding on to the basic legal principles, putforth a refreshing attitude which is non - partisan and just.
Pray Kumari Varma, may not be allowed to suffer, for she has not become a litigant out of choice. But the powers - that - be are not likely to allow Kumari Varma to live in peace.
Are the Offences Punishable u/Ss. 184 and 185 of the Motor Vehicles Act Non-cognizable
By K.G. Sankaran, Advocate, Thrissur
23/05/2011
Are the Offences Punishable u/Ss. 184 and 185 of the Motor Vehicles Act
Non-cognizable ?A Note on 2011 (2) KLT 236
(By K.G. Sankaran, Advocate, Thrissur)
In a recently reported decision in Mehaboob v. State (2011 (2) KLT 236), His Lordship Justice Sri Thomas P. Joseph, while considering the matter found that the offences punishable u/S.184 and 185 of the Motor Vehicles Act are Non-Cognizable in character and therefore a Police Officer who detected the offences can investigate such offences only after obtaining the order from the Magistrate u/S.155(2) of the Criminal Procedure Code. His Lordship also made it clear that the limited power of arrest available u/S.202 and 203 of the Motor Vehicles Act does not change the nature of such offences for Non-Cognizable to cognizable. To arrive at a conclusion so many decisions of our High Court other High Courts and the Apex Court were relied on. With due respect it is submitted that it is doubtful whether the said decision is made correctly.
It is true that the Motor Vehicles Act is silent whether the offences punishable u/S.184 and 185 are cognizable, Non-Cognizable, Bailable and Non-Bailable. In such circumstances Part II of the First Schedule of the Code of Criminal Procedure, which deals with classification of offences against other laws is applicable. Category No.3 of the Schedule II of the Cr.P.C. states that if the offence is punishable with imprisonment for less than three years or with five only, such offences shall be Non-Cognizable and Bailable. The maximum punishment provided u/S.184 of the M.V. Act to a person for driving a vehicle in a manner so dangerous to the public is imprisonment for two years. So also the maximum punishment provided u/S.185 of the M.V. Act to a person for driving a vehicle in a drunken stage or under the influence of drugs is imprisonment for 2 years. So it goes without saying that the offences punishable u/S.184 and 185 of the M.V.Act are Non-cognizable and Bailable as per the provision of the Code of Criminal Procedure, and so absolutely there is no dispute with regard to the preposition of the law laid down on the subject by the Hon’ble High Court.
But, it is respectfully submitted that the word cognizable offence is not properly construed in the above decision, otherwise the situation would have been different.
In the above context, it is most relevant to refer the word “cognizable offence” defined under the Code of Criminal Procedure. S.2(c) reads that unless the context otherwise requires, cognizable offence means an offence in which a Police Officer may in accordance with the First Schedule or under any other law for the time being in force arrest without warrant. It means that an offence which is stated as cognizable in the First Schedule of the Code of Criminal Procedure is a cognizable offence. Secondly, it is a cognizable offence for which a Police Officer may under any other law for the time being in force arrest without a warrant. To speak it differently if a Police Officer, under any other law for the time being in force, is empowered to arrest an offender without warrant, definitely, such offence shall be cognizable offence. When the language used in the Criminal Procedure Code is clear and unambigious it is the plain duty of the Court to give effect to it and consideration of hardship will not be legitimate ground for not faithfully implementing the mandate of the legislature. (Bihari Chowdhary v. State of Bihar (AIR 1984 SC 1043). Here under the Motor Vehicles Act specific provisions are made u/S.202 and 203, empower the Police Officer in uniform to arrest the person committing offence u/Ss. 184, 185, 192, in his presence. If we read the second part of the definition of the word cognizable offence together with the provisions under Ss.202 and 203 of the M.V. Act, we can lead to the conclusion that the offences punishable u/S.184 and 185 are cognizable. It appears that the learned Counsel appearing for the State failed to bring the above provisions of law before the Honourable Court. Moreover, if the offence u/S.184 and 185 are held non-cognizable, it is likely to cause unnecessary hardships to the law enforcing agencies as well as the Courts to bring to book the unscrupulous offenders before law and also the fate of several cases pending trial before the Magistrate Court is at anybody’s guess. In the above circumstances, it is requested that the above decision requires reconsideration.
Boon to Drunken Drivers But A Doom to Prosecution
By Salim Kambisseri, Advocate, Pathanamthitta
23/05/2011
Boon to Drunken Drivers But A Doom to Prosecution
-- A dissection on Mehaboob v. State of Kerala (2011 (2) KLT 236 -Mehaboob v. State.)
(By Salim Kambisseri, Advocate, Pathanamthitta)
Introduction
Yester year’s India is not today’s India and and it will not be in future. Crimes of various types are on the enhance. Learned Palkivala in his book WE THE PEOPLE (Page 3 of "we the peoplE" - By N.A. Palkiwala.) says “ our legal system has made life too easy for criminals and too difficult for law abiding citizens”. He continues - “ we forget that crime is not a problem for police only, but for the whole society”.
Drunken Driving on Enhance
The road accidents in India, according to Crime Records Bureau, are increasing by 8% per annum, but death rate is galloping by 12% a year. Worldwide, the number of people killed in traffic crashes each year is estimated at 1.2 million, while the number of injured could be as high as 50 million. In India, over eighty thousand persons die in traffic accidents annually, over 1.2 million are injured seriously and about three lakhs are disabled permanently. India has just 1% of the world’s vehicles, but account for 10% of the world’s road accidents. India has one of the highest accident rates but one of the lowest conviction rate of errant drivers, which can sink lower than 10%. This happens because of the lethargic delay of court procedures, hostility of witnesses, absence of scientific investigation, weakness of prosecution and police etc. Inadequacy of punishment is yet another serious matter. For example, drunk drivers get six months imprisonment or fine of Rs. 2000/-, but hardly anyone ever goes to prison . Most of the contested cases end in acquittal. Accused persons are on the safer side. Criminals and law breaking persons can walk freely.
Traffic accidents is becoming a serious problem in our country, in terms of number of lives lost, limbs maimed and economic ruin of families, this problem has assumed the form of a disease of epidemic proportions. Though drunk driving is a serious offence, the authorities are not taking effective steps to curb the menace for various reasons of their own.
With due regard and respect to the Honourable High Court, I am constrained to state that the drunken drivers would take shelter under Mehaboob’s umbrella who, in turn, will act as the guardian angel for them as the above decision under discussion has misconstrued Sections 184 , 185 and 202 of Motor Vehicles Act.
Ratio of the decision
The ratio of the decision Mehaboob v. State can be formulated as follows:-
1. Offences punishable under Sections 184 and 185 of the M.V. Act are non-cognizable.
2. Police can investigate into a case involving offences punishable under Sections 184 and 185 of M.V. Act only after getting an order from the Magistrate under Section 155(2) Cr. P.C.
3. Registration of F.I.R., conducting investigation, filing of charge sheet and taking cognizance by court into the above offences without an order under Section 155(2) Cr. P.C, are illegal.
I do, with all respects to the Honourable Court , doubt the correctness of the principle of law declared by Honourable High Court of Kerala through His Lordship Justice Thomas P. Joseph, in the above decision. To buttress my view it is necessary to have a discussion and a comparative and harmonious analysis of Sections 184, 185, 202 of the M.V Act and Sections 2(c) and 155(2) Cr. P.C.
Sections 184 and 185 of M.V. Act are Cognizable Offences
According to His Lordship the offences punishable under Sections 184 and 185 of M.V. Act come under the third category of cases mentioned in Part 11 of First Schedule of Cr.P.C, i.e, punishable with imprisonment for less than three years, and hence non-cognizable and bailable in character. The decision also states that eventhough a police officer in uniform has limited powers to arrest a person who commits an offence punishable u/S 184 or 185 of M.V. Act, in his presence, he cannot register a case or investigate, as such offences continue to be of non-cognizable character, notwithstanding anything contained in Section 42 of the Code of Criminal Procedure or Sections 202 and 203 of the M.V. Act .
It is true that Sections 184 and 185 of M.V. Act are bailable as there is no express provision declaring them as non - bailable. But the definition of “cognizable offence” in Section 2(c) Cr.P.C would indicate that Sections 184 and 185 of M.V. Act are cognizable offences.
Section 2(c) : Cognizable offencemeans an offence for which, and acognizable case means a case in which a police officer may, in accordance with the First Schedule or under any other law for the time being in force, arrest without a warrant. (Explanatory Note No.2 of First Schedule also indicates that the word “cognizable” stands for “ a police officer may arrest without warrant ” ).
So it is crystal clear that Section 202 of M.V. Act was substituted in the year 1994, solely for the purpose of declaring Sections 184, 185 and 197 as cognizable offences. In such a situation Part II of Schedule 1 of the Code has no application, as the special provision i.e., S. 202 (1) of M.V. Act contains an enumeration by specific words to make the sections cognizable so as to attract the definition given in Section 2(c) Cr.P.C and no contrary legislative intention can be inferred from the construction of the words therein.
Section 202 of M.V. Act reads as follows:-
S. 202 : Power to arrest without warrant - 1. A police officer in uniform may arrest without warrant any person who in his presence commits an offence punishable under Section 184 or Section 185 or Section 197:
Provided that any person so arrested in connection with an offence punishable under Section 185 shall, within 2 hours of his arrest, be subjected to a medical examination referred to in Sections 203 and 204 by a registered medical practitioner failing which he shall be released from custody.
2. A police officer in uniform may arrest without warrant, any person, who has committed an offence under this Act, if such person refuses to give his name and address.
3. A police officer arresting without warrant, the driver of a motor vehicle shall if the circumstances so require take or cause to be taken any steps, he may consider proper for the temporary disposal of the vehicle.
Sub-sections 1 and 2 mentioned above refers to four different circumstances in which a police officer in uniform can arrest a person without warrant. Those are-
a When a person drives a vehicle dangerously (S.184).
b. When a person drives a vehicle or attempt to drive a vehicle, under the influence of drugs or alcohol (S.185).
c When a person refuses to give his name and address (S.202(2)).
d When a person takes or drives away any motor vehicle without the consent of the owner or without lawful authority (S.197).
Actually construction of Section 202 of M.V. Act does not vary from the intention of the legislature or leads to any manifest absurdity or repugnance. The object of introducing the Section 202 was to make Sections 184, 185 and 197 cognizable, to prevent antisocial elements such as drunken drivers from committing the offences. Legislature never intended that a police officer arresting a person under S. 202 of M.V Act , cannot register a case under Section 184 or 185 of M.V Act. M.V Act being a special statute and Section 202 being a special provision, special provision would prevail over other general provisions.
Ironing out Creases
The literal rule of construction is expressed in maxim “A verbis Legis nonest residendum” (from the words of law there should not be any departure) and “Verbis standum ubi nulla Ambiguitas” (one must abide any words when there is no ambiguity). To make it clear, where no absurdity or ambiguity exists and the words used in the enactment are plain and can be given their ordinary meaning, the courts of law must adopt an interpretation which gives due weight to all words in the enactment. On a reading of the definition in S. 2(c) of the Code and considering the intention of legislature behind the substitution of Section 202 of M.V. Act, would clearly endorse the view that Sections 184 and 185 are cognizable offences (also S.197). Interpretation must depend on text and context. A Judge must not alter the material of which Act is woven, but he can and should iron out the creases, as stated by Lord Denning (Sea Ford Court Estates Ltd. v. Asher - 1949 All. E.R. page 155 at page 164.).
Judicial law making is desirable since law is an instrument of social ends. A dynamic society requires dynamic legal system. Judges also should be motivated by the same consideration as that of the legislature. When the legislature expressly mentions that for offences under Sections 184 and 185, a police officer in uniform can arrest a person without a warrant , which implies that the offences are cognizable as defined under S.2( c) of the Code, the express words shut the doors to any further implication contrary.
The decision relied on by Honorable Judge in this case (Kunhumuhammed v. State of Kerala (1981 KLT 150) also not seems squarely applicable, since it was a case relating to an offence under S. 51 A of Kerala Police Act, in which there is no express provision to make the section cognizable. For the same reason Sections 2(d), 155(2) and 190 (1)(a) of the Code has no application in Mehaboob’s case.
To Meet the Challenges
It is high time to make traffic laws with deterrent and stringent punishments. It may be noted that the punishment provided in Section 304(A) is the same as that of Section 429 which deals with mischief by killing, poisoning , maiming or rendering useless an animal !. Punishment for Sections 279 and 304(A) I.P.C. may be enhanced and may be made non-bailable. It may also be declared expressly that Sections 184, 185 and 197 of M.V. Act are cognizable offences without ambiguity, to avoid further controversies. Drastic measures may be taken to penalize unscrupulous and drunken drivers with the aid of scientific evidence (including statements made under proviso to sub-section 3 of 161 Cr.P.C with the aid of audio–video electronic means), and to improve impoverished roads. But we need it get fast.
In State of Karnataka v. Krishna (1987 (1) KLT S.N 42 (page 25) SC.)our Apex Court observed that consideration of undue sympathy in motor accident cases, will not only lead to miscarriage of justice but also will undermine the confidence of public in efficacy of Criminal Judicial System. In Raman v. Francis (1987 (2) KLT 773. = 1988 (2) Crl .L .J page 1359 (Kerala))Justice Chettur Sankaran Nair was of the view that “flea bite” sentences unmistakably leave the impression that the trial is a mockery of justice. It was also held.
“Inadequate sentences can do harm to society. Law must meet the challenges that criminalisation offers. Madulin sentiments, bordering on tottering weakness cannot masquerade or reformative sentiments cannot do service for rational sentencing system”.
To quote Hon’ble Justice Sukumaran, personal liberty must necessarily be preserved , but certainly not in such a manner to facilitate the antisocial elements to destroy the basic fabric of criminal judicial system. Any attempt made to bring a grinding halt to the machinery entrusted with the maintenance of law and order has to be checkmated (Iyya Alias Ashraff v. State of Kerala - 1983 KLT 629.).
Conclusion
The decision Mehaboob v. State of Kerala requires reconsideration, for the reasons stated above.
Tail Piece
To put a gordian knot for the present deadlock created by Mehaboob, I suggest a temporary panacea till the decision is overruled by Larger Bench - To add Section 279 I.P.C along with Section 184 or 185 of M.V. Act, in appropriate cases. According to Justice Chettur Sankaran Nair, drunken driving itself constitutes rashness, so as to attract S. 279 I.P.C. (See Abraham Varghese v. State of Kerala (1987(2) KLT 840) .
Permanent Lok-Adalat -- An Alternate Dispute Redressel Forum
By D. Pappachan, Retd. District Judge, Chairman, Permanent Lok Adalat, Ernakulam
23/05/2011
Permanent Lok-Adalat -- An Alternate Dispute Redressel Forum
(By D. Pappachan, Chairman, Permanent Lok Adalat, Ernakulam)
Permanent Lok Adalat is yet another Alternate Dispute Redressal mechanism introduced by the Central Government as per Legal Services Authorities (Amendment) Act 2002 and incorporated as Chapter VI A of the Legal Services Authorities Act 1987. Unlike the usual Lok Adalats whose role is only conciliatory, Permanent Lok Adalat has a dual function, both conciliatory and adjudicatory.
Permanent Lok Adalats are constituted by the National Legal Services Authority or as the case may be, every Legal Services Authority to exercise jurisdiction in respect of one or more public utility services, which are defined under S.22A of the Legal Services Authorities Act. The public utility services in respect of which Permanent Lok Adalath constituted by the Kerala State Legal Services Authority at Ernakulam are:-
(i) Transport service for the carriage of passengers or goods by air, road or water; or
(ii) Postal, telegraph or telephone service; or
(iii) Supply of power, light or water to the public by any establishment; or
(iv) System of public conservancy or sanitation; or
(v) Service in hospital or dispensary; or
(vi) Insurance service.
As per notification dated 3rd May, 2010 issued by the Kerala State Legal Services Authority under S.22B of the Legal Services Authorities Act, the Permanent Lok Adalat at Ernakulam shall have jurisdiction over the area comprised in the revenue districts of Kottayam, Idukki, Ernakulam and Thrissur. As per S.22C of the Legal Services Authorities Act any party to such dispute may, before the dispute is brought before any Court, make an application to the Permanent Lok Adalat for the settlement of the dispute. As and when the opposite party appears, the Permanent Lok Adalat shall conduct conciliation proceedings to assist the parties to arrive at an amicable settlement.
There is no prescribed proforma for filing application before the Permanent LokAdalat. The applications can be filed either by the aggrieved party or through a practising lawyer. No court fee is payable on any application filed before this forum. The Permanent Lok Adalat however, shall have no jurisdiction in respect of non-compoundable offences and where the value of the property in dispute exceeds Rs. 10 Lakh.
True to its literal meaning, the Lok Adalats including the Permanent Lok Adalats constituted under Chapter VIA of the Legal Services Authorities Act are intended to bring the contesting parties across a table and arrive at a settled decision to the satisfaction of both parties. But the peculiarity of the Permanent Lok Adalats established under Chapter VIA of the Legal Services Authorities Act is that, it can decide the disputes on merit, if the contesting parties fail to reach an amicable settlement. As per S.22E of the Act, every award of the Permanent Lok Adalat, either on merit or in terms of settlement agreement, will be treated as a decree and is executable by a civil court having jurisdiction over the area. The award is final and is binding on the parties to the dispute or persons claiming under them. While conducting the conciliation proceedings or deciding the dispute on merit, the Permanent Lok Adalat is not strictly bound by the Code of Civil Procedure or the Indian Evidence Act. For the purpose of determination of the issues before it, the Adalat has the same powers as are vested in the Civil Court while trying a suit in respect of matters relating to summoning witness, producing documents, receiving evidence on affidavits etc. The Permanent Lok Adalat shall have the requisite powers to specify its own procedure for the determination of any dispute coming before it. The Permanent Lok Adalat at Ernakulam started functioning in the Old High Court Building with effect from 25.2.2011.