Dr. Manjula Krippendorf v Union of India [POCSO Decision 2017 Supreme Court]

With sexual crimes becoming a common story and those against children particularly on the rise, the case becomes more relevant in terms of deciding who to bring within the purview of ‘child’ under the Act. The case attempted to convince the Court to widen the ambit of the term so as to include mentally retarded adults who have attained adulthood only in respect of biological growth, while having mental growth of a child.

Title: Ms. Eera, through Dr. Manjula Krippendorf v Union of India and Anr.

Register No.: CRIMINAL APPEAL NOS.1217­-1219 OF 2017 

Coram:

·         Dipak Misra J.

·         R F Nariman J.

Matter:

The petitioner who is 38 years of age suffers from Cerebral Palsy and has attained only 6-8 years of mental growth was raped by the Resp-2, and case was registered under the IPC and proceedings were made under the CrPC. Since the prosecutrix is a child in terms of her mental capacity, when it came to trial at the Sessions Court of Saket, issues relating to camera trial, videography, absence of congenial atmosphere, etc. emerged. The mother of the victim filed a petition before the Delhi HC u/s 482 of CrPC praying that the matter be transferred to Special Court under POCSO Act. The HC directed videography of the proceedings as the victim mainly communicates through gestures, but did not transfer the case under POCSA. The High Court directed that the case should be assigned to a trial court presided over by a lady Judge in Saket Court. The Petition before the Supreme Court purports to widen the scope of the term “child” under the POCSO Act to consider the functional age of the subject, rather than the biological age. The case also pertained to payment of compensation under the Act to the victim, since the accused had died during the pendency of the case.

Decision of the Court:

The court ruled that the term “child” under the Act cannot be interpreted widely to include the mental age of the person, and directed that the State Legal Services Authority, Delhi shall award the compensation keeping   in   view   the   Scheme   framed   by   the   Delhi Government. The Court considered the mechanism of interpretation (literal or purposive) adopted by the Courts in various precedents and concluded that the distinction between adjudication and law-making must be maintained. Earlier decisions were examined, which ruled that judges must not proclaim that they are playing the role of law-makers merely for an exhibition of judicial valor.

Relevant Portions of the Judgment

“.......the only conclusion that can be arrived at is that definition in Section   2(d)   defining   the   term   “age”   cannot   include mental age…”

“….this is a fit case where the victim should be granted the maximum compensation envisaged under the scheme….”

“…..under our constitutional scheme, Judges only declare the law; it is for the legislatures to make the law.”

“…..A legislative judgment is anathema….”

5 CONTROVERSIAL CASES THAT ALTERED THE INDIAN LEGAL SYSTEM

Controversies have a power of shaping the outcome of an incident, altering the course of an event, and sometimes even setting right what could otherwise have gone wrong; while on the other side of the coin, it also sometimes ruins the true essence of the subject matter. India has had a series of controversial Court cases that led to the amendment of laws or shaped new legislations altogether. Here we analyze a list of top 5 controversial Court cases that altered the Indian legal system in some way.

5. The Shah Bano Begum Case (Mohd. Ahmed Khan v. Shah Bano Begum)

The case played a major role in shaping the law on maintenance to wife, as it upheld the provision under CrPC as non-violative of the Islamic personal law on maintenance, and directed the husband to pay maintenance to his first wife who he had divorced by way of Talaq a few years after taking a second wife of younger age. It led to severe protests from the Islamic religious factions, and in turn the Government passed the Muslim Women (Protection of Rights on Divorce) Act, 1986 nullifying the effect of the judgment and lay down that the maintenance only needed to be paid upto 90 days after divorce or during the iddat period. However, the Supreme Court again in cases of Daniel Latifi and Shahima Farooqi, upheld the earlier decision of the Court to ensure adequate protection and equal rights to Muslim women after divorce.

4. The Nanavati Case (K.M. Nanavati v State of Maharashtra)

That is one name Bollywood popularized among the masses by the movie starring Akshay Kumar and Ileana DCruze, but their real story is no less than a movie tale. The change brought by the case in the Indian system was that it was the last case where jury trial was held in India. The plot is no less than a crime-romance drama that unfolded in 1959 where Mr. Nanavati who was a Naval Commandant shot dead a business tycoon Mr.Prem Ahuja who was in an illicit relationship with his English wife Sylvia. There was major public support for Mr. Nanavati as he was an honorable man of values, and was intimidated by the ‘playboyish’ attitude of the businessman who indeed had no interest in marrying Sylvia even if she sought divorce from Nanavati. In a series of twists and turns, Nanavati was acquitted by the Jury, then re-tried and convicted by the HC, and eventually pardoned by the Governor and released from prison after 3 years.

3. Mathura rape Case (Tukaram and Anr v State of Maharashtra)

The rape case that rocked India from its roots, both in terms of public conscience and in terms of law. In 1972, the 14-16 year old girl Mathura who had to visit the Police Station in her small village to give a statement about a complaint of abduction that had been filed by her brother (but she was not abducted; she was only in love with a village boy and was with his family by free will) was raped by two policemen inside the Police Station. The case created much public uproar and social chaos as several women rights activists took to streets to seek justice for her after the accused were acquitted by the Court for lack of incriminating evidence. Though the offenders were not punished, the case created a tremor in the system that spoke volumes for women who were victimized. Under the present system, a woman should not be arrested after sunset and before sunrise unless there is permission from the Judicial Magistrate and at least one woman Police Officer is present at the time.

2. Vishakha Case (Vishakha and Ors v State of Rajasthan)

The case was a landmark decision in terms of setting stringent rules to tackle sexual harassment at workplace. The decision came in a Petition filed by Vishakha and some other activists against the Govt of Rajasthan and the Union of India, after which the Vishakha Guidelines were adopted to protect women from sexual assault and harassment at their workplace. It came after public outrage broke out upon the acquittal of a few upper class men who had been alleged of raping a poor lower caste woman who spoke up against child marriage in the village.

1. Kesavananda Bharati case (Kesavananda Bharati v State of Kerala)

After a series of cases in which the Legislature and Court seemed to be at a war in respect to the former’s power to amend the Constitution, this case finally set an end to the tug of war and upheld the Fundamental Rights as supreme “Basic Structure” of the Constitution. Though the case was in respect of the acquisition of the Petitioner’s land by the Govt., the judgment had an impact that went farther into limiting the power of the Govt to alter the provisions of the Constitution. In addition, the strength of the Bench (13) made sure that the verdict would be a strong precedent.

BOMBAY HC: FATHER MUST PAY MAINTENANCE TO MINOR SON

A recent decision of the Bombay HC (Nagpur Bench) has reiterated a Father’s responsibility to pay maintenance to his minor son, even when the wife had left him and was residing separately with the minor son.

Title: Neeraj Kumar Kapoor Chand Jain Vs Sweety

Case No: Criminal Revision Application No.33 of 2017

Coram: V.M. DESHPANDE, J.

Matter:

The case came before the HC as a Criminal Revision Application from the husband after the wife had secured an Order from the Family Court directing him to pay Rs.7000/- per month to the wife and child. The husband contested the Order of the Family Court stating that the wife had withdrawn co-habitation with him, and an Order for Restitution of Conjugal Rights was secured him from the competent Court at Bhopal. But the wife submitted before the HC that she has already challenged the said Order before the HC at Jabalpur and it was pending. The minor child is a 6-year old boy, and it was laid down before the Court that the father had not taken up any responsibility for his son since June 2012.

Decision:

The Court went on to consider the income of the husband and dismissed the revision application of the husband, upholding the lower Court’s verdict making him liable to pay Rs. 7000/-. The Court also went ahead and stated that “Rs. 7000/- is also not on the higher side”, considering that “the boy is at an age where he requires more attention on every aspect of his life”.

Relevant Remarks:

Some major remarks made by the Court were:

“It is the duty of every father to maintain his minor child.”

“…Father is duty bound to provide al facilities for education and health for his minor son or daughter…”

“The wife may withdraw the company, but that does not absolve the responsibility of the father to provide maintenance to his son or daughter…”

NITHARI ACCUSED SENTENCED TO DEATH

The brutal and shocking Nithari murders have not vanished from the conscience of Indians, especially the residents of Noida where the serial killings took place. The accused were recently found guilty and sentenced to death by the CBI Special Court in one of the cases of the total 16 cases against the accused businessman Mohinder Singh Pandhel and his domestic help Surender Koli. The cases rattled India in 2006 when the matter came to light when the residents and Police unearthed the bodies of several children and young women who had disappeared from the area in the past two years. The accused were immediately taken into custody, and investigations were completed, revealing incidents of abduction, rape, sexual abuse, murder and even suspected cannibalism.

The CBI Special Court convicted the duo and sentenced them to death on 24^th July 2017, after a protracted legal battle that went on for years after the crime was discovered. The verdict came in the case of rape and murder of a 20 year old woman Pinki Sarkar who was abducted, raped and murdered before being dismembered and buried in the vicinity of the crime scene which was the place of residence of the accused. The prosecutor Mr. JP Sharma relied on an arena of factual and scientific evidence to prove the offence in Court, and the defense lawyers argued on circumstantial evidence on the claim that Koli was in fact at another place on the alleged date of the incident. However, the Court took heed of the plethora of incriminating evidence available against the accused and convicted them of the offenses.

It is only the second case where conviction has been secured, among the 16 cases that were registered against the accused in the bizarre incident. But it certainly comes as a relief to the families of the many victims who are awaiting justice even after a decade of the crime.

Delhi High Court Decision on GST on Lawyers

The GST has been here for barely a month now, but its anomalies have already dragged it to Court to resolve the ambiguities raised by the various Notifications issued by the Govt under the GST regime. The Delhi HC was recently faced with the first case of this sort, filed by a lawyer, questioning the confusion caused to him by some Notifications.

Title: J. K. Mittal & Co. v Union of India

Citation: W.P. (C) NO. 5709 OF 2017; CM NO. 23814 OF 2017 (Delhi High Court)

Coram:

·         S. MURALIDHAR, J.

·         PRATHIBA M. SINGH, J.

Matter: GST Notifications – contradiction with GST Council recommendations – confusion w.r.t “reverse charge” mechanism - imposition on services of lawyers.

Brief Statement of Facts:

The petition was filed by Mr. J K Mittal citing that these Notifications will have adverse consequences on lawyers in general; earlier Notifications of the Govt stood for the exemption of liability of lawyers/Firms in respect of all services provided by them to clients and only the client was to pay on the reverse-charge basis. He points out the technical disparities between the wordings used in the subsequent Notifications, in effect limiting the exemption only to representational services rendered by lawyers to clients. an additional difficulty pointed out by him is that the Finance Act had earlier required lawyers to register as service-providers, but the subsequent change of bringing it under the reverse-charge category did not bring with it any provision for de-registration.

Decision of the Court:

Delhi High Court clarified in its order that no coercive action should be taken against any lawyer or law firms for non-compliance with any legal requirement under the CGST Act, the IGST Act or the DGST Act till a clarification is issued by the Central Government.

Relevant portions of the Order

“….it is plain that as of date there is no clarity on whether all legal services (not restricted to representational services) provided by legal practitioners and firms would be governed by the reverse charge mechanism…”

“….There is therefore prima facie merit in the contention of Mr Mittal that the legal practitioners are under a genuine doubt whether they require to get themselves registered under the three statutes...”

“…no coercive action be taken against any lawyer or law firms for non-compliance with any legal requirement under the CGST Act, the IGST Act or the DGST Act till a clarification is issued by the Central Government and the GNCTD and till further orders in that regard by this Court…”

“…any lawyer or law firm that has been registered under the CGST Act, or the IGST Act or the DGST Act from 1st July, 2017 onwards will not be denied the benefit of such clarification as and when it is issued.

“…..if an appropriate clarification is not able to be issued by the [UoI and GNCTD] by the next date, the Court will proceed to consider passing appropriate interim directions…”

GST IS ALREADY IN COURT: CHECK OUT WHY?

GST has been here for barely a month and it has already been dragged to Court by a lawyer in Delhi challenging the Govt Notifications imposing GST on the services of lawyers. The petition was filed by Mr. J K Mittal citing that these Notifications will have adverse consequences on lawyers in general; since the effect of imposition of ‘reverse charge’ on services would mean that GST will be collected from persons registered under one of the GST Acts (CGST, IGST or Delhi GST Act) would have to pay the GST in respect of a service availed from a person who is not registered under any of these Acts.

 The Petition challenged the rules on the basis that there is no corresponding provision or machinery in the system to implement the rule, thus making is impracticable. The earlier Notification stood for the exemption of liability of lawyers/Firms in respect of all services provided by them to clients and only the client was to pay on the reverse-charge basis. He points out the technical disparities between the wordings used in the subsequent Notifications, in effect limiting the exemption only to representational services rendered by lawyers to clients. an additional difficulty pointed out by him is that the Finance Act had earlier required lawyers to register as service-providers, but the subsequent change of bringing it under the reverse-charge category did not bring with it any provision for de-registration.

The number of confusions raised by the apparently contradictory provisions on the earlier and current schemes, and the various Notifications under GST, led the Delhi High Court to clarify in its order that no coercive action should be taken against any lawyer or law firms for non-compliance with any legal requirement under the CGST Act, the IGST Act or the DGST Act till a clarification is issued by the Central Government and the GNCTD and till further orders in that regard by this Court. The Court also stated that if an appropriate clarification is not able to be issued by the Govt by the next date, the Court will proceed to consider passing appropriate interim directions.

For further details and full judgment, subscribe to the Legal Resolved Repository Google Drive by sending a request by E-Mail to legalresolvedrepository@gmail.com. 

GOLAKNATH CASE JUDGMENT

The Supreme Court in Sankari Prasad[i] and Sajjan Singh[ii] had upheld the power of the State to amend the Constitution, including the provisions relating to Fundamental Rights, thus conferring wide powers on the Parliament. In the subsequent case of Golak Nath, the Supreme Court took a different stand and upheld the sanctity of Fundamental Rights above the power of State to amend the same.

Title of Case: I. C. Golaknath & Ors v State of Punjab & Anr

Citation: 1967 AIR 1643

Coram:

·         K. SUBBA RAO (CJ)

·         K.N.WANCHOO

·         M. HIDAYATULLAH

·         J.C.SHAH

·         S.M. SIKRI

·         R.S. BACHAWAT

·         V. RAMASWAMI

·         J.M. SHELAT

·         VISHISHTHA BHARGAVA

·         G.K. MITTER

·         C.A.VAIDYIALINGAM

Matter: Whether Fundamental Rights can be amended – power of Parliament to amend the Constitution

Brief Facts: The Punjab Security of Land Tenures Act (1953) and of the Mysore Land Reforms Act (1962) were challenged under Art 32 of the Constitution by the petitioners who were deprived of a few acres of their land under the impugned legislations. The 17^th Constitution (Amendment) Act was also challenged as unconstitutional, as it enabled the inclusion of the impugned Acts in the 9^th Schedule of the Constitution.

More than a mere battle on property and land, the friction between the Court and the Legislature began to become evident from here on ahead.

Court’s Decision: The Court held that Fundamental Rights cannot be abridged by the Parliament under the procedure given in Art.368. The Court also clarified that an Amendment to the Constitution is 'law' within the meaning of Art.  13(2) and is therefore subject to Part III of the Constitution.

Relevant Portions of the Judgment:

“….Fundamental rights are the primordial rights necessary for the development of human personality…”

“…The Constituent Assembly, it so minded, could certainly have conferred an express legislative power on Parliament to amend the Constitution by ordinary legislative process…”

“……The Constitution (Seventeenth Amendment) Act, 1964, inasmuch as it takes away or abridges fundamental rights was beyond 'the amending power of Parliament and void because of contravention of Art. 13(2)...”

Relevant Statutes (Indian Kanoon)

·         Constitution of India

·         17^th Constitution (Amendment) Act

---

[i] 1951 AIR  458 (Refer previous Post for detailed account)

[ii] 1964 AIR  464

SHANKARI PRASAD CASE JUDGMENT

Fundamental rights have always been regarded with great sanctity in the scheme of the Indian Constitution, and the same have been analyzed and expanded on various occasions to include more supplementary rights within its purview to widen its ambit. The Supreme Court is currently considering whether the right to Privacy falls under Right to Life, in the case related to Aadhaar Cards being considered by a 9-Judge Bench. In the light of the impending situation, we proceed to examine the series of Judgments in which the amendability of Fundamental Rights was considered by the Supreme Court, beginning with the Shankari Prasad Case. 

Title: Sankari Prasad Singh Deo v Union Of India and Anr. 

Coram:

• M. PATANJALI SASTRI

• HIRALAL  KANIA  (CJ)

• B.K. MUKHERJEA

• SUDHI RANJAN DAS

• N. CHANDRASEKHARA AIYAR

Citation: 1951 AIR 458

Matter: Power of Parliament to Amend Constitution

Facts in Brief: In order to abolish the Zamindari system widely prevalent in India, some State Govts enacted the Zamindari Abolition Act to acquire huge holding of land that lay with rich zamindars, and redistribute them among the tenants. But the same was challenged as being unconstitutional and violative of the Right to Property that was included in the Fundamental Rights. The Act was held unconstitutional by the HC of Patna but was upheld by the HCs of Allahabad and Nagpur; whereby eventually the matter was put before the Supreme Court. In the midst of this, the Union Govt brought forward the First Amendment to the Constitution, validating the Zamindari Abolition laws and limiting the Fundamental Right to Property. New Articles 31 A and B were included in the Constitution to validate the impugned measures. The Zamindars challenged the first Amendment in the Supreme Court, stating that it was unconstitutional and invalid. 

Decision of the Court: It was held that the power of the Parliament to amend the Constitution including the Fundamental Rights is entailed in Art 368 and is not violative of the provisions of the Constitution. The validity of the land reforms was upheld by the Court; as they do not curtail the powers of the High Court under Art. 226 to issue writs for enforcement of any of the rights conferred by Part III or of the Supreme Court under Arts. 132 and 136 to entertain appeals from orders issuing or refusing such writs. Articles 31A and 31B are were held not invalid on the ground of ultra vires; the Court declared that though the subject of ‘Land’ came under the State List, the power to enact amendments of the Constitution lay solely with the Parliament.

Relevant Portions of the Judgment:

“… to make a law which contravenes the Constitution constitutionally valid is a matter of constitutional amendment, and as such it falls within the exclusive power of Parliament..”

“…these articles [31 A and B] do not either in terms or in effect seek to make any change in Article 226 or in articles 132 and 136.”

“…We find it difficult in the absence of a clear indication to the contrary; to suppose that they [Constitution framers] also intended to make those rights [Fundamental Rights] immune from constitutional amendment…”

“……“law" must be taken to mean rules or regulations made in exercise of ordinary legislative power and not amendments to the Constitution made in exercise of constituent power, with the result that article 13(2) does not affect amendments made under Article 368….”

Relevant Statutes (Indian Kanoon):

• Constitution of India

• Constitution (First Amendment) Act, 1951

TERM SHEETS FOR START UPS

India has in the past one decade seen more start-ups than it did in the two-three decades prior to that, owing to the more liberal stance taken by the authorities, encouraging Govt policies, availability of funds, people’s willingness to invest in new ventures, but most importantly the passion held up by the youth to create something on their own instead of settling down in conventional job-posts. While it is great to be driven by dreams and propelled by hard work, a difficult task faced by all start-ups is obtaining sufficient funds to kick-start the venture and then get the boat to sail smooth. There are various funding sources through which start-up ventures could source investments, and the compliance requirement for each is different. In this post we discuss about Term Sheets that are required to be drafted and presented before the prospective investors to get them to trust your venture with their money. It must put forth a clear outline of the investment sought, the stake offered and the investment rights that may be made available to the angel investors.

The Term Sheet is an agreement that reflects the interests of both the parties (investor and the investee) in respect of the business and the concerns that either party has; it represents the basic relationship between the investor and the company. While framing the term Sheet, conditions and terms preferred by either party is to be negotiated and the two will have to settle at a point where the benefits and liabilities are mutually agreeable to both. Some typical items to be included in term Sheet are listed below:

·         Company Information: About the company, its promoters, business, etc. Vital information in relation to the company must be furnished to the investors to help them make an informed decision.

·         Valuation of Company: The Company may be valued pre-money or post-money, and this plays a major role in calculating the investor’s stake in the equity of the company.

·         Conditions placed on the Business: The investor may impose certain conditions on the business to be able to receive the funding, and the promoters must attempt to negotiate it to demarcate some terms as conditions subsequent to the infusion of funds into their business.

·         Types of Shares Offered: The investor might prefer to know the kind of shares that he will be receiving in return for the investment that he is making, such as whether he will have voting rights in respect of the same.  

·         Investors’ Rights:  The investor may seek to exercise some reasonable control on the company’s functioning, owing to the fact that they have put their valuable money into it. Some rights and modes of control that companies seek to possess over their investee are Participation Rights, Registration Rights, Board Representation, Information Rights, Voting Rights, etc.

·         Anti-Dilution Protection and Affirmative Rights: Anti-Dilution protection would mean that the business cannot offer its securities to any new investor at a rate lower than the price paid by the previous set of investors. An Affirmative Right is where it is agreed that decisions pertaining to matters affecting investors’ rights as shareholders or varying the valuation of shares would require prior written consent of the investors.

·         Governing Laws and Dispute Resolution Clauses (Indian Kanoon): The law that is purported to regulate the dispute resolution process or set out the arbitration agreement between the parties, decide on the clauses to be incorporated therein, and the applicable laws.

·         Time-Limitation and Exclusivity: The parties may agree upon a time period for which the agreement is valid, and the same may be subject to extension if both parties think fit to do so. Also, an Exclusivity provision prohibits the business from approaching any other investor during the time of subsistence of the Term Sheet.

In India, Start-Ups receiving funds from angel investors are mandated to abide by the Rules and regulations put in place by the Authorities such as SEBI (Alternative Investment Fund) Regulations. To receive angel investment, the Start-Up must be within 3years of incorporation, not listed on any Stock Exchange, and with a turnover less than 250 Million.

Sample Term Sheet

Presumptions:

·         Company: Start-Up

·         Requirement: Series A Financing

·         From: Angel Investor

Note: This is only a sample meant as informative content, and must not be used as a template to create a legally binding document. To draft a Term Sheet for your Company, get in touch with us at our Website Legal Resolved, where experienced and efficient corporate lawyers will assist you to draft a formal and fool-proof Term Sheet.

Sample Term Sheet

The following document intends to lay down the principal terms with respect to the proposed Series A Investment by __________ [Corp.] in the business venture by the name of _________ [Inc.], and does not constitute a legally binding contract to invest. This document is only a written proposal of investment spelling out the basic requirements of the financing that the former may provide to the latter, if it deems fit to do so, and does not amount to a legally binding undertaking to make the investment. In case the investment shall take place after due negotiations and correspondence between the parties, the terms and conditions hereinafter expressly stated as ‘binding’ shall come into effect from that point on.

Company:                                                                 [ABC] [Corp], incorporated under the laws of [country, law under which incorporated, etc.]

Type of Security:                                                    [Equity, other security, etc.; specify amount of shares; minimum to close the deal]

Closing Date:                                                           [xx-xx-xxxx]

Price per Share:                                                      [Specify Pre-Money and/or Post-Money Valuation; price per share as per the valuation adopted]

Investors:                                                                  [List the names of the investors targeted, and their necessary details]

TERMS OF INVESTMENT

Incentives to Investors:                                      [Specify any incentives that will be provided to the investors, such as discounts, warrants and stock options]

Liquidation Preference:                                     [The Series A Preferred shall receive an amount equal to one times (1x) the Purchase Price, in addition to any unpaid dividends; in priority over payment of any sums to any other equity security holders in the event of (i) a liquidation, dissolution, or winding up of the Company; or (ii) Change in Control]

Voting Rights:                                                         [Whether to vote together with Common stock Investors or as a Separate Class]

Information Rights:                                              [The right to receive financial information and Standard information with respect to the business; audited annual financial statements, unaudited quarterly financial statements, etc.]

Participation Rights:                                             [The investor’s right to participate in the business, on pro-rata basis or otherwise]

Conversion:                                                             [Power to convert the securities into Common Shares at the option of the investor holding the same, and terms thereof, if any]

Automatic Conversion:                                       [Whether or not, and if yes then how, the shares of investor will automatically convert into common shares, at the then applicable conversion rate upon either the closely of an underwritten IPO of Common Shares, or with the consent of the majority of holders of the outstanding Investor Shares]

Protective Provisions:                                         [Like requiring the consent of the majority of holders of the outstanding Investor Shares in order to alter the Articles of Association of the Company that may adversely affect the rights of the Investor, etc.]

Pre-emptive Rights:                                             [Major Investors may have a right to purchase the pro rata share of any offering of new securities by the Corporation, subject to certain exceptions; the right may terminate immediately prior to the Company’s first IPO].

Exclusivity:                                                               [Specify a certain date or incident like closing of the investment deal/formal termination of negotiation/consummation of financing between the parties, before which the Business is forbidden from approaching any other potential investor for finances].

Confidentiality:                                                      [Until the negotiation terminates or the finance is obtained, or based on any other eventuality, bind the parties to maintain confidentiality in respect of the transaction and negotiations.]

Statements or Clarifications:                            [Such as the conditions that are binding, and the extent to which it I so; disclaimer that the Term Sheet is not a description of financing; or that it is not a contract between the parties].

Expiration date:                                                     [Preferably fix a suitable date when the Term Sheet would expire, so that the business could absolve itself of the Exclusivity clause]

SIGNATURES AND DETAILS

On behalf of the Company                                On behalf of the Investors

[Name of Company]                                             [Name of Investor Group]

[Signature]                                                               [Signature]

[Name of Person]                                                  [Name of Person]

[Phone]                                                                     [Phone]

[E-Mail]                                                                      [E-Mail]

  Glossary:

·         Series A Financing: The first round of financing given to a new business by external investors when they are given company ownership for the first time. This is sought subsequent to the setting up of Seed Capital.

·         Angel Investors: Who invest in small Start-Ups and new ventures; they give a one-time investment to kick-start the business or may give money at intermittent intervals to help in difficult situations.

·         Seed Capital: The initial capital used to start up a business, often from the personal assets of founders.

SUPREME COURT ON AADHAAR AND PRIVACY SCUFFFLE

The Supreme Court’s 9-Judge Bench on Wednesday began hearing the matter on Aadhaar and its alleged invasion into privacy of people. While the decision bears considerable weightage owing to the strength of the Bench pronouncing the decision, the Court seems to be considering possibilities of putting State Powers and Citizen’s Rights on a reasonable balance.

Hon’ble Chief Justice Mr. K S Khehar had stated that “We have to first determine whether right to privacy is a fundamental right or not before going into the issue [on the constitutionality of the Aadhaar scheme],” while placing the matter before a 9-Judge Bench a few days ago. The Petitions arose from the several complaints and concerns raised by the public over the level of surveillance (though virtual) that the state would be empowered to exercise over the mass population of our people through Aadhaar (the UID or Unique Identification) since it is now being integrated with other documents like the PAN, Mobile Number, Social Welfare Schemes, etc. The UID database consists of all social and biometric data related to a person including fingerprints and iris scans; while it gives the Govt an effective mechanism to maintain a reliable ID on all people with the UID, the risks attached with such mass amount of personal data being accumulated in a single place is also alarming. The matter was challenged in various Courts of the Country by many people, and eventually the Supreme Court has now decided to settle the matter once and for all. The verdict of the Bench will put in place a binding precedent, as the strength of the Bench is high.

While the decision is yet to be pronounced on the matter, the Supreme Court did make some observations on the first day of hearing after listening to the averments put forth by the parties. “An exhaustive cataloguing by the court of what all constitutes privacy may limit the right itself”, Justice Chandrachud observed, implying that while the term “privacy” needs to be explained unambiguously before deciding what constitutes an ingression into the same, it is also dangerous to put narrow limits on the Right. While the State (represented by Attorney-General K.K. Venugopal) contends that the right to privacy is only a common-law right [not a Fundamental Right] and it was deliberately excluded (“consciously avoided”) by the framers of the Constitution from making it a part of the Fundamental Rights; the Petitioners contended that “a person should have the right to ‘informational self-determination”.

The Court, though Justice Chandrachud, observed that right to privacy cannot be linked to data protection. He instead observed that focus must be placed on statutory recognition of data protection instead of linking it with concerns of privacy. The final decision on the question is pivotal to the definition and limitation of privacy of people, and it will have far-reaching consequences further than just the current concern of Aadhaar. 

THE RIGHT TO PRIVACY-WHY TODAY WILL BE DECISIVE

On a plethora of cases that have flooded various Courts in the country challenging the imposition of Aadhaar on citizens as a mandatory identity proof and linking the unique ID to almost all personal identification documents including PAN, Phone Number, Social Welfare Schemes, etc. and with the impending proposal of the Law Commission to link Aadhaar with the Compulsory Registration of Marriage[i], today’s 9-bench Supreme Court decision on the matter bears great relevance to the notion of privacy in India. Before the Bench decides on the matter, let us take a peep into the backdrop of the situation and analyze the earlier stand taken by Indian courts towards privacy of its citizens.

The Right to Privacy in India

The Constitution of India does not contain any express provision for protecting privacy, but on several occasions the question has been addressed under the Right to Life[ii], and the possibility of including the right in the purview of a broadened concept of Right to Life. The Supreme Court considered the question in the case of M P Sharma v Satish Chandra[iii], where an 8-Judge bench decided that “….search and seizure is an overriding power of the State for the protection of social security… Constitution makers have thought fit  not  to  subject  such  regulation to constitutional limitations  by recognition  of the  fundamental  right  to privacy.. there is no justification  for  importing  into  it,  a  totally different  fundamental right by some  process of  strained construction..”. The decision did not allow Privacy to be incorporated into the available Fundamental Rights, and upheld the State’s power to monitor social security.

Further, in Kharak Singh v State of UP[iv] the Court ruled that “the right of privacy is not a guaranteed right under our Constitution and therefore the attempt to ascertain the movements of an individual which is merely a manner in which privacy is invaded is not an infringement of a fundamental right guaranteed by Part III”.

In Rajagopal v State of Tamil Nadu[v], the Supreme Court held that “…..Right to privacy is not enumerated as a fundamental right in our Constitution but has been inferred from Article 21.” The Court also went ahead to state that “…any right to privacy must encompass and protect the personal intimacies of the home, the family, marriage, motherhood, procreation and child-rearing”.

The Aadhaar Issue with Privacy

Justice K S Puttaswamy (Retd.) v Union of India[vi] bears great relevance in this regard, as the Aadhaar Scheme was challenged in several petitions claiming that collection of such biometric data is violative of the “right to privacy. In the said case, it was pleaded by Attorney General and the other Senior counsel that “…to settle the legal position, this batch of matters is required to be heard by a larger Bench of this Court as these matters throw up for debate important questions..”

The Court identified two questions that need to be considered in arriving at a decision on the matter:

(i)                  Whether there is any “right to privacy” guaranteed under our Constitution.

(ii)                If such a right exists, what is the source and what are the contours of such a right as there is no express provision in the Constitution adumbrating the right to privacy.

The Court in the case declared that “…the cases on hand raise far reaching questions of importance involving interpretation of the Constitution. …. pronouncement made by larger Benches of this Court cannot be ignored by the smaller Benches without appropriately explaining the reasons for not following the pronouncements made by such larger Benches. to give a quietus to the kind of controversy raised in this batch of cases once for all, it is better that the ratio decidendi of M.P. Sharma (supra) and Kharak Singh (supra) is scrutinized and the jurisprudential correctness of the subsequent decisions of this Court where the right to privacy is either asserted or referred be examined and authoritatively decided by a Bench of appropriate strength.”

Subsequent to the havoc caused by the outpour of challenges against Aadhaar, Chief Justice Mr. K.S. Khehar has formed a Bench of Nine Judges who will bring a final settlement on the question whether Right to Privacy is a Fundamental right or not, and if so, then the Constitutionality of collecting and storing biometric and social data by way of Aadhaar will be examined.

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INDIAN KANOON

[i] 270^th Report of the Law Commission of India

[ii] Art.21, Constitution of India

[iii] 1954 AIR 300

[iv] 1964 SCR (1) 332

[v] 1995 AIR 264

[vi] WRIT PETITION (CIVIL) NO.494 OF 2012