Regarding Retrospective Amendments of Law
By Peter A. Mathai, Chartered Accountant, Kochi
14/12/2009
Regarding Retrospective Amendments of Law
(By Peter A. Matthai, Chartered Accountant, Kochi)
Whenever a law is made it should be prospective and never retrospective. Giving retrospective effect to any amendment of law shows the inefficiency of the process of law making as well as the law maker. A law maker is respected by all because of the power he wields and the knowledge he is supposed to have gained prior to qualifying himself for the coveted post. So he should not go below a certain standard to lose that respect.
The intention of the law maker when S.54EC was introduced in the Income Tax Act was to enable the assessee who sells any immovable property (can be any capital asset) to invest the capital gains (selling price minus cost and expenses) in certain bonds for three years and take advantage of tax exemption. As per the original law there was no ceiling limit which means that an assessee can invest the whole amount of capital gains whether it is lakhs or crores of rupees and avoid paying tax. But later on this position of law was amended and a ceiling limit was introduced with retrospective effect so that an assessee who accumulates a capital gain of Rs.5 crores will have to pay tax on Rs.41/2 crores at the rate of 20% plus surcharge etc. which works out to Rs 1 crore. As per amendment the maximum investible amount is limited to Rs 50 lakhs.
Here the law maker has noticed that a good number of assessees (Indian Citizens) are making advantage of the original law. What prompted the law maker to amend the law is quite clear. But those assessees who had already sold capital assets or those who had entered into sale agreements with the above law in mind (after consulting experts by paying fees) are not spared because the amendment was given retrospective effect.
What happens in such a situation is 1) the law maker loses his credibility and respect 2) the law maker accepts what he had written earlier was without foreseeing many things which a prudent layman must have done 3) the assessees lose considerable money and 4) the Tax consultant (Tax Planning Expert) loses all his glamour he can only blame the law makers.
What is explained above is only one-example of what is happening in law making. This is applicable to all retrospective amendments of law. What a citizen did in 1990 with complete obedience to law becomes a crime in 2008 whereby he might be punished now. This position should change and should be discouraged and only then a Government can be said to be stable. Normally a stable Government means a Government that withstands a no-confidence motion moved by opposition. But in real terms it should be a Government that sticks to its own policies in a consistent manner foreseeing the welfare of the Citizens. A stable Government should at least stick to the law passed in the Parliament (the promises given to the poor voters) till such a law is amended prospectively.
As a simple illustration I would like to conclude saying that the Rules of a game should be finalized and should be made known to both sides before the game starts and no changes should be entertained till the game is over. Not even the law maker should be permitted to amend any rules of the game with retrospective effect. In such a situation what happens is that the winning side (as per original law) becomes the loser (as per the amended law).
This type of retrospective amendments will create enmity between the law maker (Government) and the citizen (Voter) which is not a desirable sign for a ‘Government of the People’
Haelan Laboratories v. Topps Chewing Gum, 202 F2d 866
By Karni Singh Rajora & Krishnan Krishna K.
07/12/2009
Haelan Laboratories v. Topps Chewing Gum, 202 F2d 866
(By M/s. Karni Singh Rajora & Krishna K.,VIII Semester B.A.LL.B. (Hons.), NUALS, Kochi)
Quorum of the Judges Before Swan (Chief Judge), Clark and Frank (Circuit Judges).
Facts
The plaintiff is a chewing-gum seller and for the advertising of its product they made a contract with a baseball player providing that plaintiff will have an exclusive right to use the player’s photograph in connection with the sales of plaintiffs gum; the ball-player also agreed not to grant any other gum manufacturer a similar right during such term. Defendant, a rival chewing-gum manufacturer, deliberately induced the player to authorize defendant, to use the player’s photograph in connection with the sales of defendant’s gum either during the original or extended term of plaintiff’s contract and the defendant did so use the photograph.
Right to privacy viz-a-viz right to publicity
The case at hand mainly deals with a balance between right to privacy on one hand and right to publicity on the other hand, in which both the parties agreed that the New York “Law” governed their conduct and any such contract between plaintiff and a ballplayer, in so far as it merely authorized plaintiff to use the player’s photograph, created nothing but a release of liability. Thus, the defendant, knowing of the contract, deliberately induced the ball-player to break that promise and behaved tortuously1. Some of defendant’s contracts were obtained by it through its agent, Players Enterprise, Inc; others were obtained by Russell Publishing Co., acting independently, and were then assigned by Russell to defendant. Since Players acted as defendant’s agent, defendant was liable for any breach of plaintiff's contracts induced by Players. The breach was made by the defendants either by themselves or through their agents, but where it was made by Russell, the Court did not agree with the defendant that none of plaintiff's contracts created more than a release of liability, because a man has no legal interest in the publication of his picture other than his right of privacy. The court opined that, in addition to and independent of that right of privacy, a man has a right in the publicity value of his photograph, i.e., the right to grant the exclusive privilege of publishing his picture, and that such a grant may validly be made without an accompanying transfer of a business or of anything else. This right might be called a “right of publicity”.2
Furthermore, the right of privacy was “purely personal and not assignable” because “rights for outraged feelings are no more assignable than would be a claim arising from a libellous utterance.” Thus, the party soliciting such a subsequent contract knowing of the prior rights and proceeding to use the grant given in violation thereof, its contract is tainted with illegality and is utterly invalid.3 The matter was then remanded to the Trial Court for the determination of two points:-
(1) the date and contents of each of plaintiff's contracts, and whether plaintiff exercised its option to renew;
(2) defendant’s or Players’ conduct with respect to each such contract;
(3) the date and contents of each of defendant’s contracts under which defendant claims, and whether defendant exercised its option to renew, and
(4) plaintiff's conduct with respect to each such contract.
Character Merchandising
In this decision the “right of publicity” as a means of appropriation of one’s personality was acknowledged to confer on a person the same benefits as any other property right, namely, the “exclusive, assignable and descendible” right. The right of publicity tort involves the appropriation of a celebrity’s name or identity for commercial purposes. It seeks to project the property interest that a celebrity has in his or her name; the injury is not to personal privacy, it is the economic loss a celebrity suffers when someone else interferes with the property interest that he or she has in his or her name.4 What is protected under the right of publicity is “the persona.” In short, in the U.S. appropriation of personality of a celebrity is recognized as a tort in that it amounts to appropriation of his right of publicity, damages for which are intended to compensate for the loss of goodwill by the use of celebrity’s personality. The tort of passing off is based on the property value of goodwill in a business. This is precisely what is affected by the appropriation of a celebrity’s personality. Further, the principle of unjust enrichment demand that a person must not “unjustly” benefit at the expense of another; in the case of a celebrity, such expenses may be very tangible.5
Trademarks and right to publicity
Generally, celebrity actors and athletes lead the field of personalities who enjoy a substantive economic value and goodwill in the market much like a trademark. It appears that the celebrity personality is an intangible and valuable asset, and a trademark framework may prima facie suit a majority of right of publicity cases.6 The right of publicity, as determined by the United States Court of Appeals for the Second Circuit in the above decision, gives a celebrity the right to damages and other relief for the unauthorized commercial appropriation of that celebrity’s identity, and such a right is independent of a common law or statutory right of privacy. Hence, the right articulated by Judge Frank in the Haelan Laboratories case has taken root and has grown with the increase of endorsements and other exploitation of personal images of celebrities.
There are possible analogies between the right of publicity and the law of trademarks which may be useful in attempting to define limits to publicity rights. In many respects, the right of publicity functions like a trademark to identify the origin of the celebrity’s services.7 One pair of commentators has proposed that the doctrine of trademark abandonment, for example, provides a conceptually sound analogy for limiting the right of publicity.8 If the estate of a deceased celebrity, they argue, fails to exploit the celebrity’s name and image for a period of time after death, the estate will be deemed by analogy to trademark law to have abandoned its rights. A third party may, at that point, begin to exploit the deceased celebrity’s name or image. The longer the period between the death of the celebrity and exploitation of the celebrity’s persona, the stronger the presumption that the estate has abandoned any claim to the right of publicity.9
Another analogy to trademark law is developed below: an analogy to the doctrine of generic use. Under that doctrine, a trademark proprietor loses its rights when the mark becomes identified in the public mind with a generic product 10. Much in the same way that a trademark passes into the public domain because it assumes a generic meaning, a celebrity’s right of publicity should expire and pass into the public domain when the celebrity’s persona assumes symbolic meaning. Whatever its other merits or demerits, such a rule would operate as a limit on the otherwise rather nebulous boundaries of the right of publicity
.
Current Position
In Haelan Laboratories, which was decided over a decade before Uhlaender v. Henrickson 11, the court glossed over this with a perfunctory comment that “(whether it be labelled (sic) a ‘property’ right is immaterial,” as the courts are effectively enforcing a claim which has pecuniary worth. Generally, with degrees of variations across different state jurisdictions, the United States courts continued to endorse this approach over the next forty years as they recognized the right of celebrities to recover for the unauthorized commercial use of their personae irrespective of the label attached to the right; the doctrinal justification, however, has become almost irrelevant in the courts’ alacrity to protect celebrities from such unauthorized uses.
In another case the Sixth Circuit made a notable contribution to development of the right of publicity in Carson v. Here’s Johnny Portable Toilets, Inc.12 This case is legally interesting in two respects: first, because it addresses the role of parody in publicity cases; second, because it demonstrates that “indicia of identity” (to quote the Restatement) do get protection of the right. The case arose out of two puns used by a Michigan manufacturer of portable toilets. The manufacturer adopted the trade name “Here’s Johnny,” and used the slogan “The World’s Foremost Comedian.” Neither the visage nor the name of the television comedian, Johnny Carson, was used. Nevertheless, Carson argued, his television show had so popularized the phrase “Here’s Johnny,” that it had become an indicator of identity. Though, the claim for action was rejected by the Second Circuit court, the Sixth Circuit was not willing to deny the plaintiff's entire case. The court, divided 2-1, opined that Michigan common law would recognize a right of publicity.13 On the issue of “indicia of identity” the court held that even a popular singer’s voice and style can be protected under the right of publicity.
Nevertheless, in contemporary society, fame is nurtured through the joint efforts of the celebrity trinity - the producers, the audience, and the celebrity individual, - and the Lockean labour doctrinal justification does not address the substantial labour put in by those other than the individual celebrity labour that can often exceed the labour put in by the celebrity. Ironically, in the last few decades, as the celebrity production industry grew in power, organization, and reach, resulting in the diminution of the labour of the celebrity individual, the courts saw an even greater need to recognize the publicity right as the sole property of the celebrity individual. 14
Indian Position
As far as the celebrities rights to publicity in India is concerned, the decision in the case of Star India Pvt. Ltd. v. Leo Burnett India 15, provides that to make a copy means to make a copy as a whole. It starts with the premises that S.13 of the Indian Copyright Act, 1957, excludes originality in case of cinematograph film. The facts in that case related to the making of a 30 seconds long advertisement of the ‘Tide Detergent’, which was based on a serial telecasted by Star Television namely ‘Kyuki Saas Bhi Kabhi Bahu Thi”. The advertisement was made in such a manner that any person viewing the advertisement will be remembered of the serial. In an action bought by Star India the court relying on the premises under S.13 refused to grant relief and held it as a violation of copyright. Here the court held that to make a copy means to make a whole copy.
Foot Note :
1. Hornstein v.Podwitz, 254 N.Y. 443, 173 N.E. 674, 84 A.L.R. 1.
2. Wood v.Lucy, Lady Duff Gordon, 222 N.Y. 88, 118 N.E. 214; Madison Square Garden Corp. v. Universal Pictures Co., 255 App.Div. 459, 465, 7 N.Y.S.2d 845;
3. Reiner v. North American Newspaper Alliance, 259 N.Y. 250, 181 N.E. 561, 83 A.L. R.23.
4 Carrie Rainen, "The Right of Publicity in the United States and the United Kingdom" (2005) 12 New Eng. J. Int’l & Comp. 197 at p.206.
5. N.S. Gopalakrishnan & T.G. Agitha, Principles of Intellectual Property, 1st edn., Eastern Book Company (2009).
6 David Tan, "Beyond Trade Mark Law: What the Right of Publicity can Learn from Cultural Studies", 25 Cardozo Arts & Ent. LJ. 913.
7. Winterland Concessions Co. v.Sileo, 528 FSupp 1201,1214, 213 USPQ 831 (ND III 1981).
8. Armand Cifelli and Walter McMurray, "The Right of Publicity: A Trade Mark Model for its Temporal Scope", 66 Journal of the Patent Office Society 455, 458 (1984).
9. Id at 470-71.
10. J.Thomas McCarthy, Trade Marks and Unfair Competition, 526(2d ed 1984).
11. Supp. 1277, 1282 (D. Minn. 1970).
12. Carson v. Here’s Johnny Portable Toilets, Inc, 698 FD 831 (CA 6, 1983).
13. William L. Prosser, Handbook of the Law of Torts, § 117 (4th Ed 1971).
14. Supra n. 4.
15. 2003 (27) PTC 81.
A Decent Dissent on Domestic Violence
By Sreejith Cherote, Advocate, Kozhikkodde
30/11/2009
A Decent Dissent on Domestic Violence
(By Sreejith Cherote, Advocate, Kozhikode)
1. A ruling of our High Court doesn’t seem to reflect the correct proposition of law. The verdict tends to give an impression, to be in contradiction with the very objective of the Legislation. Wrong reasoning has denied the benefits of the legislation passing on to the beneficiaries, hence an intellectual provocation to right this dissent.
2. The legislation is The Protection of Women from Domestic Violence Act, 2005 (hereinafter referred as Domestic Violence Act) and the ruling, Kanakaraj v. State of Kerala reported in 2009 (3) KLT 330. In the aforementioned ruling, the learned single Judge by his power of authority, declared that, for the violation of all orders passed under Ss.19,20,21 or 22 of the Domestic Violence Act, does not attract the penal provision under S. 31 of the Act and further clarified that only a violation of S.18 of the Domestic Violence Act, attracts the penal provision. Reliefs other than S.18, including monetary relief provided under the Domestic Violence Act is not enforceable by penal provisions. Of course a plain reading of the section justify the reasoning adopted by the Court, as it is expressly stated in S.31 of the Domestic Violence Act that the violation of a “protection order” and interim “protection order” shall be an offence and punishable with imprisonment or with fine. Literarily the punishment is only prescribed for violation of “protection orders”, hence there won’t be any penal action under the Domestic Violence Act for the violation of monetary orders and other orders not being a protection order. The vital element of deterrence is absent as measure for calling for compliance of the order of monetary orders by the Court. It is seen in many a case that there is no compliance of such order for want of effective enforcing force. Aforesaid fact can be considered a reason to declare the legislation as a failure as far as the aforementioned orders are concerned, at least at the execution level.
3. Things seem to be clear, if our endeavour is only to interpret law by applying a surface reasoning and is satisfied with the result, untouched by an impact unintended by the legislature. But when thinking of our own action, in interpreting the Domestic Violence Act as doing violence to the legislation itself, and if we are not satisfied with the impact of the outcome of such a reasoning, we dive deep into the legislation in search of a source, to undo the misery with the expectation that we can discover from abyss of law, a threshold which will lead us to a destination, parallel to the objective of the legislation. An effort in the said line yielded results, described below.
4. First to reproduce the relevant portion of the sections we are concerned with, beginning with S.2(o) of Domestic Violence Act.
S.2(o). “Protection order” means an order made in terms of S.18.
S.3. Definition of domestic violence- For the purpose of this Act, any act, omission or commission or conduct of the respondent shall constitute domestic violence in case it-
(a) ***** (Defines domestic violence)
Explanation I
(i) (defines physical abuse)
(ii) (gives an inclusive definition of sexual abuse)
(iii) (gives an inclusive definition of verbal and emotional abuse)
(iv) “economic abuse” includes -
(a) Deprivation of all or any economic or financial resources to which the aggrieved person is entitled under any law or custom whether payable under an order of a court or otherwise or which the aggrieved person requires out of necessity including, but not limited to household necessities for the aggrieved person and, her children, if any stridhan, property, jointly or separately owned by the aggrieved person, payment of rental related to the shared household and maintenance,
(b) *****
(c) *****
Explanation II- *******
S.18 Protection orders - The Magistrate may, after giving the aggrieved person and the respondent an opportunity of being heard and on being prima facie satisfied that domestic violence has taken place or is likely to take place, pass a protection order in favour of the aggrieved person and prohibit the respondent from-
(a) Committing any act of domestic violence;
(b) ****
(c) ****
(d) ****
(e) ****
(f) ****
(g) ****
S.31. Penalty for breach of protection order by respondent.- (1) A breach of protection order or an interim protection order, by the respondent shall be an offence under this Act and shall be punishable with imprisonment of either description for a term which may extend to one year, or with fine which may extend to twenty thousand rupees, or with both.
5. While analyzing the legislation in a purposive angle of bringing justice to the beneficiaries of the legislation, we can see that in the definition of protection order under S.18 sub-cl.(a), while defining protection orders incorporates into it, an order prohibiting any act of Domestic Violence. The term Domestic Violence is also defined in the Act as per S.3, which means to include in its ambit “physical abuse”, “Sexual abuse”, “verbal and emotional abuse” and “Economic Abuse”. The right legislative response to the legal crisis as to the penal enforcement of the monitory orders passed seems to be inbuilt in the definition of “Economic abuse” explained in S.3 of the Act, which incorporates into its province all economic deprivation, an aggrieved person is entitled to, including the economic recourses entitled as per an order of the Court. Hence it does not stand to reason how a monetary order of a court directing the respondent to pay maintenance or compensation or any other monetary relief cannot be considered as protection orders and is not warranted with penal provision under S.31 of the Domestic Violence Act, inspite of the express legislative mandate.
6. If we stretch our reasoning with a view to make the legislation meaningful, we can see that in the definition Domestic Violence, we can also include any action of the respondent in disobedience of the order of the court, including monetory orders and bring them within the purview of S.18, so as to make them punishable under S.31 of the Domestic Violence Act. Hence it is distressing that a remedy which is conferred on the aggrieved person by the legislature is not reaching them for want correct logical approach.
7. Understanding a problem is ineffectual without undoing the misery. No analysis is worthy without suggesting a solution for the crisis. Things being clear the only problem which remains, is how to get over the obstacle of the “Stare decisis”1 and carve out an exception for the “ Rule of Precedent”, for the purpose of refraining to apply the ratio, of the aforementioned decision in future cases, until overruled by a higher bench. The aforementioned ruling of Honourable High Court is still a hurdle for the Lower Court to act in consonance with the legislation and in bringing justice to the beneficiaries. But as we know, in the realm of law, no wrong is without remedy and searching for a solution for mining out a proposition of law to evade the impact of a wrong decision, brings us to the doctrine of “per incuriam”2 principally developed by the English courts in relaxation of the rule of stare decisis, where a ratio of a decision is avoided and ignored if it is rendered, in ignorance of a statute or other binding authority3. Per incuriam refers to a judgment of a Court which has been decided without reference to a statutory provision or earlier judgment which would have been relevant4. The significance of a judgment having been decided per incuriam is that it does not have to be followed as a precedent by the lower court giving it a good option for the lower court, not to follow the judgment for being decided per incuriam.
8. To perpetuate an error is no heroism, to rectify it, is the compulsion of the judicial conscience. Hence this dissent, even though improperly sponsored for the reason of its origin, from the opposite side of the bench, may treated as an appeal to the intellect of future to rectify the error.
FOOT NOTE:
1 Interpretation of Statutes - By Justice A.K.Yog. 1st Edition 2009.
2 . A.R.Auntlay v. R.S.Nayak (AIR 1988 SC 1531)
3 . M/s Furest Day Lawson Ltd v. Jindal Exports Ltd. (AIR 2001 SC 2293)
4 . Delhi Municipal Corporation v. Gurunam Kaur (AIR 1989 SC 38)
* Comments to the Author can be made to “Sreejithcherote@gmail.com”
I Wish to be Reborn As a Lawyer Only
By T.P. Kelu Nambiar, Sr. Advocate, High Court, Ernakulam
30/11/2009
I Wish to be Reborn as a Lawyer Only *
(By T.P.Kelu Nambiar, Sr.Advocate, High Court of Kerala)
From zero to eighty-two, I have attained the big age of innocence. My friend Sri.Dandapani, who has anthologized my writings and speeches, has proved that he has attained the age of discretion and discrimination.
I have written and spoken with conviction and courage. I do not draw a Da Vinci portrait. Some of my writings and speeches are judicial door-stoppers, sometimes frowned upon as stinging, though my intention is not to wound. I write with my ‘blue pencil’ only, not with dagger. I speak without fear or hatred. I speak and write in search of myself, not to shine to victory.
I always carry the burden of expectations for the good of the legal profession, as I go on writing. My writings are not letters to God.
I am greatly indebted to Adv.Sri.Siby Mathew and his father, the late Advocate Sri.M.C.Mathew, for publishing almost all my writings and speeches in the Kerala Law Times. Senior Advocate Sri.K.P. Dandapani has created this all-in-one book. Merely thanking him, is too little repayment for so great a debt I owe him. All heart to Sri.Dandapani.
I conclude by saying, as I have said in this book,
“I wish to be reborn as a lawyer only”.
Thank you.
* Reciprocation Speech delivered by T.P. Kelu Nambiar, on 2.11.2009, at the Kerala High Court Auditorium, on the occasion of the release of “NAMBIAR THIRD MISCELLANY”.
N.I. Act S.138138 - Holder v. Drawer
By K.G. Joseph, Advocate, Aluva
23/11/2009
Negotiable Instruments Act -- Section 138 - Holder v. Drawer
Feedbacks - Impacts - Ground Realities
(By K.G. Joseph, Advocate, Aluva)
1. In recent times detailed discussions are taking place in the legal parlour regarding the progressive provisions of the N.I. Act S.138 with reference to its application vis-a-vis interpretation. In this article the debtor is “Drawer”, being the “maker” of the cheque and accused in the complaint as against “the Creditor’’ is “Holder” being the “payee” and the complainant in the complaint.
2. The history of offence under S.138 has started two decades ago, as early as 1st April, 1989 incorporating Ss.138 to 142 with the objective of enforcing a new law for Commercial world to facilitate the activities in trade, commerce, industry and business giving more legal sanctity to the instruments of credit making its violation as a “deemed offence”. It is interesting to note that it took more than a century to think of a change in the N.I. Act, 1881 to give effect to such a progressive legislation beneficial both to the bona fide Holders as well as honest Drawers who were facing unnecessary harassment from either side under the provisions of unamended Act. After assessing the progress of implementation of the new law for a period of fourteen years, another amendment was enacted w.e.f. 6.2.2003 by incorporating Ss.143 to 147. The new law is in vogue enlightened by judicial pronouncement from time to time on various issues, aspects, points raised in each case.
3. It is noteworthy that the esteemed Kerala Law Times is bringing out almost all the important aspects discussed under the law through its 57 volumes from 1989 onwards ruled by the various High Courts and Supreme Court highlighting its interpretations in 293 citations consisting of 110 Short Notes and 183 complete judgments. It is worth mentioning that about 32 articles on the subject in the Kerala Law Times under journal section was published by eminent practitioners in the field during the period. It is also seen that no issues of other contemporary legal Journals are seen without the law being discussed elaborately on various points throughout the country so that the root of the subject is going day by day to its in-depth areas in search of purest gems of legal remedies while widening its horizon in its interpretation, administration and application with fullest length and breadth.
4. While going through the Ss.138 to 147 one thing is noteworthy that the law is highly progressive and innovative in as much as it keeps a balancing safe position/equal distance to the Drawer as well as the Holder as the former gets reasonable time to pay and settle the debt even if there is bouncing of cheque/failure of timely payment with a favourable provision of compounding without attracting conviction/sentence/imprisonment. However whether this balanced approach of the legislature in its letter and spirit is available in the existing circumstances/situations? This is the actual difficulty prevailing at present. May I try to throw more light on this encircling gloom.
5. From time immemorial there existed a sound relationship in the financial/commercial/trading/industrial/business transactions between lender and loanee, creditor and debtor and in cheque transactions between Holder and Drawer and ultimately between complainant and accused by the time it reaches to the Court. As it is well settled that the offence under S.138 is a “deemed” one and it is out of the realm of “mens rea”, guilty mind, “without involving moral turpitude” and is treated as “technical” and "strict liability offence in commercial practice”. What is intended is to create a peaceful meeting ground between the Holder and the Drawer before and even after dragging the matter to the Court so that the Creditor/Lender/ Holder gets back his money and the Debtor/Borrower/Drawer gives back his debt. The legal instrumentalities available before 1.4.1989 were only civil remedies/resort to I.P.C. 420 which was found to be less and less effective within its multitudes of due/delayed process of law. As a rescue to the bona fide Holders and honest Drawers of cheque, the law under S.138 came into effect which is playing an important role for settlement of transactions through cheque. After dishonour of a cheque even while sending a notice to the Drawer/waiting till the expiry of statutory period for receipt of cheque amount and to the filing of timely complaint it is interesting to note the “mind set” of the bona fide Holder which reveals nothing but his genuine efforts for getting back the money without much injury to the honest Drawer as he knows such injury alone will not help the drawer to give back the debt. The positive attitude of the Holder influences the Drawer and a practical study of S.138 cases in its grass root level clearly suggests that the settlement/compromise/compounding etc., have been playing a vital role in redressing the grievances of both bona fide Holder and honest Drawer. The ground realities also show that an honest Drawer has got compulsion for paying back the debt. There are personal compulsions to face the creditors, moral compulsions to his own conscience, and social compulsions as a gentleman before the general public, legal compulsions to be free from litigations and financial compulsions to arrange money from available sources rather than cutting a sorry figure among his family/friends/relatives/customers/creditors apart from sacrificing his credibility among them. All or any one of the above factors can also interfere in the process which goes a long way in the settlement of debt covered by cheque in an amicable manner beneficial both to the Drawer and Holder. Apart from the above, the fear complex while avoiding/ignoring the above compulsions that spontaneously influences an accused/ Drawer if the trial ends in conviction/compensation is yet another compelling factor for him to clear the debts earlier.
6. An honest Drawer’s benefit of availing time to pay back his debt in a prosecution under S.138 is welcomed by all litigants and more cases are decided by compromise/settlement during the course of litigation. The compelling factors on the side of the honest Drawer in general is that he has no mala fides to give back the debts as he has actually availed it/he was instrumental in availing it by somebody else. Another factor is that normally no debtor is happy that others are aware of his debt in public and he will try to close the debt by all means before it is made known to others so as to keep his clear image before others by the time he gets legal notice/summons etc. Yet another factor is that usually the honest Drawer will try to save his face without going to appear before court/filing vakalath/taking bail/attending personally during trial. He will try to escape from the ordeal of confronting litigation by paying the debt by resorting to compromise/settlement rather than waiting for judgement/appeal. These genuine compulsions are originated in his mind and he takes keen interest and active initiative for a settlement directly for which the bona fide Holder is also willing. The counsels in between the Holder and Drawer actually play a vital role for a fair settlement in which the grievances of the Drawer and Holder are assessed or scrutinized and amicably settled especially with regard to the quantum of amount payable/receivable/adjustable as the case may be in a given case. These are all the compulsions of a honest Drawer who will be pleased to step into the shoes of a bona fide Holder and watch things in his perspective so that settlement is easy to the Drawer as well as to the Holder.
7. The above practice has been going on well and there have been desired results in the field of settlement of cheque cases between Drawer and Holder along with judicial remedies. Whether this situation still exists is a matter of discussion since the Ruling in Jain Babu v. Joseph (2008 (4) KLT 16) of Kerala High Court. There is sound reasoning arrived at and unparalleled competence and justification for an eloquent/epoch making ruling in the annals of S.138 which suggests that “courts are user-friendly assets to a modern judicial personality” by insisting “commitment to human rights” with an innovative vision of legitimacy by avoiding illegitimacy when disposing of cases. The consequences, that followed since then may not be overlooked. The concept and practice of good relationship that prevailed among Holder and Drawer earlier is at low ebb at present in as much as the Drawer, the so called accused, is not bound to appear in person in the Court even for bail/trial/313/judgement etc., under the shadow of guidance contained in the above ruling in the light of clarifications of Ss.205/313 of Crl.P.C. vis-a-vis offence under S.138 N.I. Act. Practically ever since the Debtor gets money and giving cheque to the Holder there is very little worry/nominal worry about paying back the debt even after he gets notice of dishonour/summons from court as he can safely entrust everything to his counsel without making his physical attendance/appearance till judgment except to receive punishment/produce stay in appeal.
8. As already explained the drawer is under an impression that he is saved from all the compulsions for a fair settlement and he can evade though not avoid, payment/delay process and try to inflict injury to the bona fide Holder who has done nothing other than lending money/giving goods and services as the case may be to the Drawer. The impact of the ruling in the mind set of the Drawer and Holder is said to be that the former is in safe ship/boat, the latter is in turbulent sea/water. The drawer feels fine and the Holder feels fined, the former is “in” and the latter is “out” as the Drawer feels a happy/winning mood, though temporarily, the Holder feels unhappy/quitting mood till judgment. The Drawer has no immediate worry and feels fair against the Holder immensely worried and feels fear to face the legal process for getting back the hard earned money even by way of compensation. The Drawer is highly pleased, Holder is doubly displeased, the former is joyful and the latter is tearful. The Holder is in partly insulted mood before the Drawer along with injury to his mind as he fails to bring the Drawer before the Court in the midst of Drawers’ self honour in a case of cheque dishonour filed against him by the Holder. The Drawer is in a safe shelter under highly “technical” a ground being an “innocent criminal” but Holder finds not even a shadow of shelter being an innocent looser. The fear of the Holder is whether the utility of the new law is changed into its futility as far as he is concerned. The Drawer has got a sign of relief temporarily while the Holder is not relieved of his anxiety and the Drawer has gained something while Holder is pained little. There is enough solace to the Drawer without corresponding consolation to the Holder. In actual practice the exemption to general rule of personal attendance of accused now takes as a rule itself under S.138 cases. This situation is conveniently exploited by the Drawer to his advantage without adhering to the normal compulsions in a similar previous situation thereby cases are accumulated in courts without settlement/compromise. The “unnecessary crowds that throng the corridors of criminal courts” is dispensed with by dispensing with the personal attendance of accused even without “compelling need” under S.138 case under the strict interpretation of Ss.205/313 of Crl.P.C. These are the factual feed backs from the floor level studies and go a long way to expose the current trend existing at present.
9. It is to be assessed whether the present situation is to be met with/overcome by means of an analytical and meaningful scrutiny of the subject and an effective advertence to the so far adopted procedure without sacrificing the spirit of law made by legislature/judiciary. As is seen the consequences are far reaching with a departure from the so far followed procedure which has resulted in diminishing the relief given to the bona fide Holders against the dishonest Drawers. It is further to be looked into whether present situation has limited the reasonably clear meaning and procedure on the realm of law of Negotiable Instruments without explaining the law according to their "object and intent” but to their “literal meaning” to avoid a particular situation. It is again to be looked into whether the present situation will take us to think that there is a tendency to put the clock back to the date of amending Act 1988 while trying to “iron out the creases” in the fabrics of enacted laws as there is doubt regarding the “legal injuries” in its effective application based on ground realities and “Mind sets” of the Holder as well as Drawer in a balanced proportion adhering to the dictum “thus in criminal cases personal appearance is the Rule and appearance through counsel (without personal appearance) is the exemption”. The discussion regarding exemption ruled is practically compulsory in nature rather than its application occasionally and discretionary “in rare instances” exercised as is followed so far. It is note -worthy that it took about one century to bring the dishonest Drawer into the arms of criminal offence by means of S.138 during 1989. But within a period of two decades (after its administration) it is to be assessed whether the criminality for which the law is framed is effective in its letter and spirit in the present situation and whether it has become a “mere ritualistic exercise” as the Drawer being an “innocent Criminal” is plugging all loopholes to get out of the picture keeping the remote control with him and immediate control with his counsel after getting exemption for personal attendance which was exceptional/discretionary earlier. It is also to be looked into whether there is uncertainty, prevailing in the present situation and whether the system is just or reasonable avoiding injustice by fully ensuring its “technical nature” as it “does not involve moral turpitude” that the system does not deny rights or perpetuate injuries. It is again to be gone into whether the grievance of the litigant is overlooked while interpreting the words of the statute with its “object and intent” as “to be literal in meaning is to see the skin and miss the soul” and “the interpretative efforts must be illuminated by the goal though guided by the word” as rightly put by Justice V.R. Krishna Iyer.
10. While pointing out these facts this writer is not of opinion that the law is to be static and not to be dynamic as it is further to be enquired into whether dynamism has inflicted legal injury in recent time in the matter of S.138. Dynamism is a sign of life and growth under all situations. The true spirit and inherent purpose of enactment like S.138 is to be preserved and no trickster Drawer is to be allowed to escape from the rigour of the provision in as much as he is placed in a safe position of making his absence visible thereby getting a chance to overlook its spirit and purpose under the guise of a “technical offence”. Here there is a Holder who is the complainant and now he is perambulating through the corridors of the court denied of his opportunity even to see his debtor/drawer/accused at least in the periphery of the court, if not in the corridors, nor in the box of the court. Holder gets no common venue to see the Drawer even during the pendency of the case and at least at Adalaths which is a venue for settlement with legal recognition. The Drawer is under blissful oblivion of the case against him, though temporarily, due to his getting permanent exemption. The involvement of his friends and well wishers are also not necessary for initiating a compromise in the present situation. The Drawer is also getting chances for all imaginary tactics to delay the proceedings and finally go for appeal/compounding for which also his personal attendance is not warranted till conviction/sentence. It is to be noted whether there is denial of justice to the Holder on technicalities under S.138 and whether the present situation has led to mental agony/legal injury to the bona fide Holders. Though there is no express prohibition of personal attendance of Drawer and his permanent exemption is discretionary, in actual practice his personal appearance is permanently/compulsorily exempted recently. Whether the existing settled law is disturbed recently and has resulted in added injury to the Holder, as a result of the general guidelines regarding “what the law is” which seems to be “what it should be”. Whether there is any possibility of changing the present situation so that the Holders wait for a verdict from a superior Bench in the near future so as to keep the balancing position between Holder and Drawer considering the compulsions and ground realities. There is no guideline at present to ensure the attendance of the Drawer in the court so as to “avoid the tedium and trauma of an oppressive procedure” treating him as an "innocent criminal” by which a trickster/dishonest Drawer is evading the Court negating chances of compromise/settlement available in the earlier situation. No opportunity is left with the Holder to see the Drawer during the pendency of the case instituted by him though he is also given relief by not insisting his presence during trial.
11. It is to be again seen whether exemption is to be given sparingly and not permanently invariably or compulsorily as at present in the best interest of justice as the possibility of a settlement/compromise in case the Drawer and Holder gets a chance to see face to face in the court will be much more than at present. The opportunities for a Drawer to feel the difficulties of an accused in an offence and his agony and ordeal during the trial/bail/evidence/cross examination etc., by ensuring his actual presence will go a long way to compel him to settle the case which is now rarely available as he gets permanent exemption. The feed back the Drawer gets from other similar accused-drawers from their experience in facing trial etc. will also play an important role to settle the case if he is not permanently exempted but sparingly done. There will be a tendency for the Drawer and Holder to be more friendly while they meet in the court at least occasionally during trial which will enable them to get together and which will avoid tension among them and finally ends in settlement of cases. While reducing the over crowding in the corridors of the criminal courts as a result of permanent/compulsory exemption to the accused the above ground realities are becoming relevant for reconsideration from a pragmatic point of view of the present situation. The legally injured plight of a bona fide Holder is conspicuous as he feels discomfort without protection though the Drawer feels comfort and protection. While it is convenient from the perspective of an accused it is wounding to the complainant in its actual application. The settled law of exemption under S.205/313 may be desirable as it was very sparingly used as against its compulsory/permanent/invariable use at present in the current situation of S.138 offence.
12. There are Rules of guidance regarding exemptions under Ss.205/313 Crl.P.C. vis-a-vis S.138 in Keya Mukherji v. Magma Leasing & Anr. (2008 (2) KLT 327 (SC)/DCR 2009 (1) 290) emphasizing “pragmatic and humanistic approach in regard to special exigencies” in the matter of exemption in as much as the accused has to satisfy the court that he is unable to reach the venue of the court except by bearing huge expenditure or that he is unable to travel the long journey due to physical incapacity or some such other hardships by means of application/affidavit sworn to by the accused himself. The Calcutta High Court in Sabir Biswas v. State of Bengal (DCR 2009 (1) 349) gave guidance to the effect that exceptional and exigent circumstances on identifiable facts and circumstances are necessary for dispensing with personal appearance/attendance “even though an accused has been permitted to be represented by the pleader under S.205 of Crl.P.C. he has no right to ask the Magistrate to exempt him from personal appearance on examination under S.313 and examination of accused under S.313 through pleader is not the spirit of law”.
13. In Jain Babu v. Joseph (2008 (4) KLT 16) there is a specific case in which the accused, a woman in her late forties, a house wife who has her husband employed abroad having two children studying engineering course/BAMS etc., permanent resident of Alapuzha receiving summons from Judicial First Class Magistrate Court, Hosdurg, Kasargod District. Her genuine prayer was to exempt her from personal appearance and counsel may be permitted to represent her and conduct the case. The counsel to the petitioner wanted general directions under Ss.205/313 Crl.P.C. while hearing the Crl.M.C.No.1977 of 2007. While it is a land mark judgment with long standing effects highlighting the exceptional exigencies/circumstances until overruled/reviewed it is to be looked into whether the rules of guidance are being adopted in all cases irrespective of the particular situations/conditions/contingencies/circumstances/eventualities/exigencies in each case. An accused from Alapuzha to attend a S.138 case at a Hosdurg (Kasargod District) Court is a special/contingency justifying exigency, warranting exception in the light of the situations represented by her. In Bhaskar Industries Ltd. v. Bhiwani Denim & Apparels Ltd. (2001 (3) KLT 307 (SC)) the complainant belong to Bhopal (M.P.)) and accused from Bhivani (Hariyana) far distant places in two States and the court located at Bhopal where the “particular situation” existed and “it is within the powers of a Magistrate in his judicial discretion to dispense with the personal appearance of an accused”. However an accused from the same locality not so far distant from the court without having “certain situations” similar/nearer to the above and getting exemptions freely at his option as at present though “such discretion need be exercised only in rare cases” as was followed so far thereby the chances of settlement/compromise are less as there is no scope for a meeting place between Drawer and Holder. The universality and generality of its application with its compulsive nature has virtually culminated in a legal injury to the Holder who is desirous of meeting the Drawer at least in the outskirts of the Court to settle the issue without waiting for the finality of case whether the interest of the Holder is highlighted fairly and convincingly before the Hon’ble High Court is another real situation for reconsideration.
14. S.147 is included so as to make the case compoundable which has got bonding effect for both the Drawer and Holder for a compromise for which meeting place is necessary and exemption will give less chance for meeting at least in the court premises. The fear of the presence of a police officer with a warrant relating to the S.138 case in the house/residence/business place of the accused/innocent criminal will change the mind set of the accused/Drawer which influences him for a settlement and payment of debt by avoiding such a contingency. In the annals of S.138 cases it is a fact that more cases are settled/withdrawn on grounds of compromise/compounding rather than waiting for finality/judgement which is beneficial both to Drawer and Holder. Though overcrowding in the corridors of court will certainly be reduced by dispensing with the attendance of accused, the chances of settlement of cases are decreasing disproportionately at a higher rate which is prejudicial to the Holder who desires settlements through S.138 cases which is a means for getting his money at lease by way of compensation. Holder is using the remedy/solution by resorting to S.138 to get a chance to settle his claim of cheque covered by his cash/service/goods. Drawer is resorting to the guidelines as a rescue for prolonging the payment by exploiting the loopholes in the sound principles enunciated by the Court in its administration. The broad rules of guidance as per 2008 (4) KLT 16 is being followed and the feed back on its impact among the litigants based on ground realities are noted above. Under S.138 cases it is imperative to note that the Drawer and Holder are two sides of coin which is in-separable in business transaction, well knit in commercial world, keeping equilibrium, balancing power to the pendulum to keep the clock forward. Any imbalance will affect the concept and practice of cheque and will shatter the aspirations of business people. Whether a change is inevitable to save the situation from the present is to be considered though law stands as an unchangeable mountain not easy to climb. A genuine desire for its change, though would not make the mountain smaller; it will make its climbing much easier to the Drawer and the Holder alike to achieve the ends of justice in its letter and spirit based on ground realities in its application and administration.
15. The Law Commission of India headed by Justice AR.Laxmanan in its report submitted to Government recently said that because of the huge pendency of the cases the credibility of the business within and outside the country suffered a set back. The Commission is of opinion that “Dishonour of Cheque by a bank causes incrediable loss, injury and inconvenience to the payee and the creditability of issuance of cheque is also being eroded to a large extent. The very purpose of the above amendments made in the Act for speedy disposal of dishonoured cheque cases is being lost”. The fact of the pendency of a huge number of cases under S.138 of N.I. Act which has virtually paralyzed the working of criminal courts in the country unequivocally demonstrates that introduction of this provision has virtually proved its ineffectiveness as it has failed to curb the menace of bouncing of cheques”. The Commission also noted that even after the serving of summons the accused prolonged trial for years together, thereby putting the complainant to not only financial loss but also a lot of inconvenience and harassment. S.138 deals with dishonouring of cheques for insufficiency of funds in the drawers account on which the instrument is drawn for discharge of any legally enforceable debt or other liability. In order to make the law really effective the Commission has suggested that a further provision be added to S.138 viz., “Provided further that after the accused enters appearance pursuant to the service of summons or otherwise the accused shall not be allowed to defend the case unless he deposits in court at least 50 percent of the cheque amount or furnishes surety for the same amount to the, satisfaction of the Court” (Hindu daily paper dated 31.9.2009). The above reflections of the Law Commission on the subject gives a clear picture of the condition of the complainant/Holder and the trend still continues apart from the accused/Drawer is permanently exempted from physical appearance in the court. It seems that there exists a particular situation in as much as the substance of the offence of dishonour of cheque is being dealt with in a manner leaving the dishonest Drawer even without his physical appearance in the Court. Under the circumstance it is to be looked into whether there is a genuine feeling that the settled legal positions are changed giving place to the new situation bound by the general guidance. It is further to be enquired into whether it is expedient, necessary and desirable for a reconsideration/review of the situation at the appropriate level.
16. This article tries to highlight the importance of a point of view from the angle of settlement/compromise of this “technical offence in the commercial practice”, apart from the conduct of the case under conventional Crl.P.C., which is being encouraged at present and the litigants are motivated for the same by means of establishment of Addalath. It is to be looked into whether this objective of settlement beneficial both to Holder and Drawer can be achieved in the absence of physical presence of the accused at least once during the course of the proceedings before the Court for which there is no compulsion for the accused in the present situation. The accumulation of cases may also be reduced if attempts are made towards this direction for which the process of legal compulsion for ensuring the physical presence of the accused/Drawer is inevitable the possibility of which in the present situation seems to be very remote/difficult though not impossible/unattainable. Whether there is a compelling ground for a comparison of the situations before and after general guidance on the basis of impacts/feed backs/ground realities is a matter for introspection/detection/substitution/reconsideration by all concerned in the light of the compulsive wording in para.37 i.e., “rules of guidance can and must certainly be followed by courts below with trials under S.138”. While the wording in Ss. 205/313 Crl.P.C. is “may” conferring statutory discretion to the Magistrate for dispensing the personal attendance of accused.