SUPPLEMENT

EXECUTIVE PROGRAMME
(This supplement covers Amendments/Developments
from August, 2021 to November, 2023)

JURISPRUDENCE, INTERPRETATION &

GENERAL LAWS

MODULE 1

PAPER 1

Disclaimer: This document has been prepared purely for academic purposes
only and it does not necessarily reflect the views of ICSI. Any person wishing
to act on the basis of this document should do so only after cross checking
with the original source.
 Index

S. No. Lesson Pages

1. Lesson 2 - Constitution of India 2-4
2. Lesson 3: Interpretation of Statutes 5
3. Lesson 5 - Administrative Laws 6-7
4. Lesson 7 - Limitation Act, 1963 8-9
5. Lesson 8 - Civil Procedure Code, 1908 10-12
6. Lesson 10 - Criminal Procedure Code, 1973 13
7. Lesson 12 - Special Courts, Tribunals under Companies 14-15
Act & Other Legislations
8. Lesson 13 - Arbitration and Conciliation Act, 1996 16-23
9. Lesson 14 - Indian Stamp Act, 1899 24-25
10. Lesson 16 - Right to Information Act, 2005 26
11. Lesson 17 - Information Technology Act, 2000 27-31

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 Lesson 2 – Constitution of India

1. Skill Lotto Solutions v. Union of India, 2020 SCC OnLine SC 990

In present case, the constitutional validity of levying of taxes on lottery, betting and gambling was
challenged in the Court. The Supreme Court held that the taxation of lottery tickets and prize
money as constitutionally lawful. The SC ruled that gaming and lotteries fall under the Goods and
Services Tax’s purview and are therefore legitimate under the law. It was stated as follows:

“The value of taxable supply is a matter of statutory Regulation and when the value is to be
transaction value which is to be determined as per Section 15 of Central Goods And Services Tax
Act, 2017, it is not permissible to compute the value of taxable supply by excluding prize which
has been contemplated in the statutory scheme. When prize paid by the distributor/agent is not
contemplated to be excluded from the value of taxable supply, we are not persuaded to accept the
submission of the Petitioner that prize money should be excluded for computing the taxable value
of supply the prize money should be excluded. We, thus, conclude that while determining the
taxable value of supply the prize money is not to be excluded for the purpose of levy of GST.”

2. Swapnil Tripathi and Ors. vs. Supreme Court of India and Ors. (26.09.2018 - SC) : AIR 2018
SC 4806
In this case, Petitioners have sought a declaration that Supreme Court case proceedings of
“constitutional importance having an impact on the public at large or a large number of people”
should be live streamed in a manner that is easily accessible for public viewing. The three judge
bench held that live-streaming of court proceedings are important so as to enable administration
of justice especially owing to the effect it has on public at large. It is important to re-emphasise
the significance of live-streaming as an extension of the principle of open justice and open courts.
it was stated in this case as follows:

“Live-streaming of proceedings is crucial to the dissemination of knowledge about judicial

proceedings and granting full access to justice to the litigant. Access to justice can never be
complete without the litigant being able to see, hear and understand the course of proceedings
first hand. Apart from this, live-streaming is an important facet of a responsive judiciary which
accepts and acknowledges that it is accountable to the concerns of those who seek justice.”

3. Municipal Corporation of Gr. Mumbai vs. Ankita Sinha (25.10.2021 - SC) 2021 SCC OnLine
SC 897
In this case, the principal issue as to whether the National Green Tribunal (in short “the Tribunal”)
can exercise suomotu jurisdiction or initiate suomotu action. It was decided that the Tribunal may
initiate suo moto action. However, same is subject to opportunities of being heard. The Court in
the Judgement stated that:

“the judgment rendered by this Court predicates that even if the Tribunal intends to initiate
suomotu action, must give opportunity to the parties likely to be affected before passing any

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adverse order against them. Viewed thus, the ex parte preemptory order(s) passed by the Tribunal
without giving opportunity to the person(s) likely to be affected by such order(s), be treated as
effaced from the record.”

4. Satender Kumar Antil vs. Central Bureau of Investigation and Ors. (11.07.2022 - SC)

In this case, taking note of the continuous supply of cases seeking bail after filing of the final report
on a wrong interpretation of Section 170 of the Code of Criminal Procedure ("the Code"), an
endeavour was made by Supreme Court to categorize the types of offenses to be used as guidelines
for the future.

The Supreme Court inter alia said that “The principle that bail is the Rule and jail is the exception
has been well recognised through the repetitive pronouncements of this Court. This again is on the
touchstone of Article 21 of the Constitution of India.”

Further, in this case, the Supreme Court issued certain directions, however they may be subject
to State Amendments. These directions are meant for the investigating agencies and also for the
courts. The directions are as under:

a) The Government of India may consider the introduction of a separate enactment in the nature
of a Bail Act so as to streamline the grant of bails.

b) The investigating agencies and their officers are duty-bound to comply with the mandate of
Section 41 and 41A of the Code and the directions issued by this Court in Arnesh Kumar (supra).
Any dereliction on their part has to be brought to the notice of the higher authorities by the court
followed by appropriate action.

c) The courts will have to satisfy themselves on the compliance of Section 41 and 41A of the Code.
Any non-compliance would entitle the Accused for grant of bail.

d) All the State Governments and the Union Territories are directed to facilitate standing orders
for the procedure to be followed Under Section 41 and 41A of the Code while taking note of the
order of the High Court of Delhi dated 07.02.2018 in Writ Petition (C) No. 7608 of 2018 and the
standing order issued by the Delhi Police i.e. Standing Order No. 109 of 2020, to comply with the
mandate of Section 41A of the Code.

e) There need not be any insistence of a bail application while considering the application Under
Section 88, 170, 204 and 209 of the Code.

f) There needs to be a strict compliance of the mandate laid down in the judgment of this Court in
Siddharth (supra).

g) The State and Central Governments will have to comply with the directions issued by this Court
from time to time with respect to constitution of special courts. The High Court in consultation
with the State Governments will have to undertake an exercise on the need for the special courts.

3
The vacancies in the position of Presiding Officers of the special courts will have to be filled up
expeditiously.

h) The High Courts are directed to undertake the exercise of finding out the undertrial prisoners
who are not able to comply with the bail conditions. After doing so, appropriate action will have
to be taken in light of Section 440 of the Code, facilitating the release.

i) While insisting upon sureties the mandate of Section 440 of the Code has to be kept in mind.

j) An exercise will have to be done in a similar manner to comply with the mandate of Section
436A of the Code both at the district judiciary level and the High Court as earlier directed by this
Court in Bhim Singh (supra), followed by appropriate orders.

k) Bail applications ought to be disposed of within a period of two weeks except if the provisions
mandate otherwise, with the exception being an intervening application. Applications for
anticipatory bail are expected to be disposed of within a period of six weeks with the exception of
any intervening application.

l) All State Governments, Union Territories and High Courts are directed to file affidavits/status
reports within a period of four months.

5. CBI vs. R. R. Kishore (Supreme Court decided on 11.09.2023)

In this case, the Supreme Court decided on the point that whether declaration made in the case of
Subramanian Swamy vs. Director, Central Bureau of Investigation and another (2014) 8 SCC 682,
that Section 6A of the Delhi Special Police Establishment Act, 1942 being unconstitutional, can
be applied retrospectively in context with Article 20 of the Constitution.

The Supreme Court has decided that it is crystal clear that once a law is declared to be
unconstitutional, being violative of Part-III of the Constitution, then it would be held to be void ab
initio, still born, unenforceable and non est in view of Article 13(2) of the Constitution and its
interpretation by authoritative pronouncements. Thus, the declaration made by the Constitution
Bench in the case of Subramanian Swamy will have retrospective operation. Section 6A of the
DSPE Act is held to be not in force from the date of its insertion i.e. 11.09.2003.

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 Lesson 3: Interpretation of Statutes

The Authority for clarification and Advance Ruling & Anr. v. M/s. Aakavi Spinning Mills (P)
Ltd. (Order dated 12.01.2022)

The Supreme Court in its order dated 22.01.2022 has inter alia said that when the Entry in question
specifically provides for exemption to the goods described as “Hank Yarn” without any ambiguity
or qualification, its import cannot be restricted by describing it as being available only for the hank
form of one raw material like cotton nor could it be restricted with reference to its user industry.

The court in para 11 of the Order has mentioned that as noticed, the Entry in question, as inserted
into the Fourth Schedule to the Act, is clear and specific that is, “Hank Yarn”; it carries neither
any ambiguity nor any confusion. Undoubtably, the yarn in the hank form (which is a unit of
measure), has come for exemption under the said Entry 44; and obviously, that exemption enures
to the benefit of the handloom industry too. However, for that matter, if the benefit of this broad
and unambiguous entry also goes to any other industry, there is absolutely no reason to deny such
benefit. In other words, we find no reason to restrict the Entry in its operation to the handloom
industry alone or to any particular class of hank yarn like “Cotton Hank Yarn” only. The exemption
Entry being clear and unambiguous, no external aid for interpretation is called for, whether in the
form of Budget speech or any other notification under any other enactment.

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 Lesson 5: Administrative Laws

1. Rule of Law

Rule of Law was developed by British Jurist A.V. Dicey. He derived this term from French
Principle ‘La principle de legalite’ which means the principle of legality. It states that the
government should be governed by Rule of Law instead of Rule of Individual. Any dictator,
monarch or one particular person should not govern the functioning of any nation. Each country
should follow legality of law.

Dicey was highly influenced by the French concept of administrative law’ (droit administratif) or
the ‘administrative tribunals’ (tribunaux administratifs). According to this, a citizen’s lawsuit
against a public servant for a wrongdoing done in that capacity will be handled by a special court
rather than a regular court of law. Droit administratif contains a regulation that was created by the
judges of the administrative court rather than laws and rules created by the French parliament.

Three major principles given by Dicey in his book “Rule of Law” are –

1. Supremacy of law: It means that ordinary or regular laws shall remain supreme. Supremacy
here means absolute and pre-dominance of regular laws as against arbitrary or wide discretionary
powers.

2. Equality before the law: According to Dicey, all classes must be equally subject to the ordinary
law of the land as administered by the ordinary law courts. He states that there should be equality
between people. According to Dicey, all classes must be equally subject to the ordinary law of the
land as administered by the ordinary law courts. It provides that all are equal before law and
everyone will be subjected to the same law.

3. The predominance of a legal spirit: Legal Spirit refers to the judicial precedents upon any
dispute raised by any individual. The judgment given in any case will be the legal spirit of that
particular case. It basically refers to the law as set by the precedents that have evolved over time.

Few jurists have criticized his rule of law theory being not clear between administrative discretion
with arbitrary discretion, emphasising on equality before law and feels that specific tribunals
should not exist, opposition between ordinary courts and special courts, failed to recognise the
need of specific laws and bodies etc.

Rule of Law in India

The evolution of Rule of Law in India can be traced to British concept but the modern concept of
Rule of Law was introduced, only after the drafting of Constitution of India. Constitution of India
laid the very foundation of rule of law in India and is the essence of it. Rule of Law is embedded
in Constitution under multiple parts, important aspects are as under:

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1. Preamble – the Preamble to the Constitution of India upholds the basic structure of the
Constitution. It talks about the justice, equality, liberty and dignity to all individuals. All of these
aspects ensure Rule of Law in the country.

2. Part III- Fundamental Rights – These are the rights and fundamental or core of the
Constitution of India. They imply a duty on the state towards ensuring the welfare of its citizens.
It helps to keep a check on the actions of administrative authorities and legislature.

3. Part IV- Directive Principles of State Policy (DPSP) – These are the basic guidelines to be
followed by all especially the government of India to ensure smooth functioning of the country.
They are not enforceable by court of law. Few examples of Laws made under DPSP includes law
relating to wages, labor laws etc.

2. Airport Authority of India vs. Centre for Aviation Policy, Safety and Research and Ors.
(30.09.2022 - SC) : CIVIL APPEAL NOS. 6615-6616 OF 2022

In this case, the Supreme Court observed that the Court has erred in interfering with the
administration/policy decision of the tender making authority in exercise of powers Under Article
226 of the Constitution of India even deciding it on merits. The Court observed that –

“as per the settled position of law, setting of terms and conditions of invitation to tender are within
the ambit of the administration/policy decision of the tender making authority and as such are not
open to judicial scrutiny unless they are arbitrary, discriminatory or mala fide. In the matter of
formulating conditions of a tender document and awarding a contract, greater latitude is required
to be conceded to the State authorities unless the action of the tendering authority is found to be
malicious and a misuse of its statutory powers, interference by courts is not warranted”

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 Lesson 7: Limitation Act, 1963

1. S.M. Ghogbhai vs. Schedulers Logistics India Pvt. Ltd. (23.05.2022 - NCLAT) :2022 SCC
OnLine NCLAT 216

In this case, the Appeal was filed against the Order dated 16th November, 2021 passed by National
Company Law Tribunal, Mumbai Bench, Court-III by which the Application C.P. No. 3857/I &
B/2019 filed by the Appellant under Section 9 of the Insolvency and Bankruptcy Code, 2016 was
rejected as barred by time.

Tribunal dismissed the appeal stating - “We are satisfied that for the limitation for filing Section 9
application it is Article 137 of the Limitation Act, 1963 which is attracted. Under Article 137, time
from which period begins to run is “when the right to apply accrues” the right to apply accrues
when invoices issued by the Appellant to the Corporate Debtor were not paid. Invoices on the basis
of which payment is claimed are more than three years earlier from the date of filing of Section 9
Application which is the basis for rejection of the Application of the Appellant by the Adjudicating
Authority.”

2. Ajay Dabra vs. Pyare Ram and Ors. (31.01.2023 - SC)

In this case the impugned order of High Court of Himachal Pradesh dismissed the delay
condonation applications filed Under Section 5 of the Limitation Act, 1963, declining to condone
a delay of 254 days, because the reasons assigned for the condonation were not sufficient reasons
for condonation of the delay. This was not found to be a sufficient reason for the condonation of
delay as the Appellant was an affluent businessman and a hotelier.

The Supreme Court has said that we do not have a case at hand where the Appellant is not capable
of purchasing the court fee. He did pay the court fee ultimately, though belatedly. But then, under
the facts and circumstances of the case, the reasons assigned for the delay in filing the appeal
cannot be a valid reason for condonation of the delay, since the Appellant could have filed the
appeal deficient in court fee under the provisions of law, referred above. Therefore, we find that
the High Court was right in dismissing Section 5 application of the Appellant as insufficient funds
could not have been a sufficient ground for condonation of delay, under the facts and circumstance
of the case. It would have been entirely a different matter had the Appellant filed an appeal in
terms of Section 149 Code of Civil Procedure and thereafter removed the defects by paying deficit
court fees. This has evidently not been done.

3. A. Valliammai vs. K.P. Murali and Others decided by Supreme Court on 11th September, 2023

In this case the Supreme Court has referred to the provisions of Article 54 of Part II of the Schedule
to the Limitation Act, 1963 which stipulates the limitation period for filing a suit for specific
performance as three years from the date fixed for performance, and in alternative when no date is
fixed, three years from the date when the plaintiff has notice that performance has been refused.

8
The Supreme Court referred to the case earlier decided in Pachanan Dhara and Others v.
Monmatha Nath Maity (2006) 5 SCC 340. The Supreme Court in referred case had held that for
determining applicability of the first or the second part, the court will have to see whether any time
was fixed for performance of the agreement to sell and if so fixed, whether the suit was filed
beyond the prescribed period, unless a case for extension of time or performance was pleaded or
established. However, when no time is fixed for performance, the court will have to determine the
date on which the plaintiff had notice of refusal on part of the defendant to perform the contract.

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 Lesson 8: Civil Procedure Code, 1908

1. Jitendra Kumar Khan and Ors. vs. The Peerless General Finance and Investment Company
Limited and Ors. (07.08.2013 - SC) : 2013 ALL SCR 3259

The court stated that equitable set-off is different from legal set-off. Equitable set-off is based on
principle of justice, equity and good conscience.

It was stated in the judgement: “that equitable set-off is different than the legal set-off; that it is
independent of the provisions of the Code of Civil Procedure; that the mutual debts and credits or
cross-demands must have arisen out of the same transaction or to be connected in the nature and
circumstances; that such a plea is raised not as a matter of right; and that it is the discretion of
the court to entertain and allow such a plea or not.”

2. Dalpat Kumar and Ors. vs. Prahlad Singh and Ors. (16.12.1991 - SC) : AIR 1993 SC 276

The Court held that three main requirements are to be satisfied while granting temporary injunction
1. There should be Prima facie case
2. If injunction not granted, it would lead to irreparable loss and,
3. Balance of convenience

It was stated by the Court in the Judgement that:

“satisfaction that there is a prima facie case by itself is not sufficient to grant injunction. The Court
further has to satisfy that non-interference by the Court would result in “irreparable injury” to
the party seeking relief and that there is no other remedy available to the party except one to grant
injunction and he needs protection from the consequences of apprehended injury or dispossession.
Irreparable injury. The third condition also is that “the balance of convenience” must be in favor
of granting injunction.”

3. B.L. Kashyap and Sons Ltd. vs. JMS Steels and Power Corporation and Ors. (18.01.2022 -
SC) : (2022) 3 SCC 294

Supreme Court held that leave to defend (In case of summary suits) should only be granted in
exceptional cases. The leave to defend shall be denied only on the grounds that there is no fair or
reasonable defence. It was stated in the Judgement that:

“application seeking leave to defend, it would not be a correct approach to proceed as if denying
the leave is the Rule or that the leave to defend is to be granted only in exceptional cases or only
in cases where the defence would appear to be a meritorious one. Even in the case of raising of
triable issues, with the Defendant indicating his having a fair or reasonable defence, he is
ordinarily entitled to unconditional leave to defend unless there be any strong reason to deny the
leave.”

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4. Yashpal Jain v. Sushila Devi & Others decided by Supreme Court on 20th October, 2023

In this case, in the preface of the Judgement, Hon’ble Supreme Court has stated that:
Even after 41 years, the parties to this lis are still groping in the dark and litigating as to who should
be brought on record as legal representative of the sole plaintiff. This is a classic case and a mirror
to the fact that litigant public may become disillusioned with judicial processes due to inordinate
delay in the legal proceedings, not reaching its logical end, and moving at a snail’s pace due to
dilatory tactics adopted by one or the other party.
Further in this case, the Supreme Court has issued the following 12 directions for Speedy Trial of
Civil Cases:

i. All courts at district and taluka levels shall ensure proper execution of the summons and in a
time bound manner as prescribed under Order V Rule (2) of CPC and same shall be monitored by
Principal District Judges and after collating the statistics they shall forward the same to be placed
before the committee constituted by the High Court for its consideration and monitoring.
ii. All courts at District and Taluka level shall ensure that written statement is filed within the
prescribed limit namely as prescribed under Order VIII Rule 1 and preferably within 30 days and
to assign reasons in writing as to why the time limit is being extended beyond 30 days as indicated
under proviso to sub-Rule (1) of Order VIII of CPC.
iii. All courts at Districts and Talukas shall ensure after the pleadings are complete, the parties
should be called upon to appear on the day fixed as indicated in Order X and record the admissions
and denials and the court shall direct the parties to the suit to opt for either mode of the settlement
outside the court as specified in sub-Section (1) of Section 89 and at the option of the parties shall
fix the date of appearance before such forum or authority and in the event of the parties opting to
any one of the modes of settlement directions be issued to appear on the date, time and venue fixed
and the parties shall so appear before such authority/forum without any further notice at such
designated place and time and it shall also be made clear in the reference order that trial is fixed
beyond the period of two months making it clear that in the event of ADR not being fruitful, the
trial would commence on the next day so fixed and would proceed on day-to-day basis.
iv. In the event of the party’s failure to opt for ADR namely resolution of dispute as prescribed
under Section 89(1) the court should frame the issues for its determination within one week
preferably, in the open court.
v. Fixing of the date of trial shall be in consultation with the learned advocates appearing for the
parties to enable them to adjust their calendar. Once the date of trial is fixed, the trial should
proceed accordingly to the extent possible, on day-to-day basis.
vi. Learned trial judges of District and Taluka Courts shall as far as possible maintain the diary for
ensuring that only such number of cases as can be handled on any given day for trial and complete
the recording of evidence so as to avoid overcrowding of the cases and as a sequence of it would
result in adjournment being sought and thereby preventing any inconvenience being caused to the
stakeholders.
vii. The counsels representing the parties may be enlightened of the provisions of Order XI and
Order XII so as to narrow down the scope of dispute and it would be also the onerous responsibility
of the Bar Associations and Bar Councils to have periodical refresher courses and preferably by
virtual mode.

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viii. The trial courts shall scrupulously, meticulously and without fail comply with the provisions
of Rule 1 of Order XVII and once the trial has commenced it shall be proceeded from day to day
as contemplated under the proviso to Rule (2).
ix. The courts shall give meaningful effect to the provisions for payment of cost for ensuring that
no adjournment is sought for procrastination of the litigation and the opposite party is suitably
compensated in the event of such adjournment is being granted.
x. At conclusion of trial the oral arguments shall be heard immediately and continuously and
judgment be pronounced within the period stipulated under Order XX of CPC.
xi. The statistics relating to the cases pending in each court beyond 5 years shall be forwarded by
every presiding officer to the Principal District Judge once in a month who (Principal District
Judge/District Judge) shall collate the same and forward it to the review committee constituted by
the respective High Courts for enabling it to take further steps.
xii. The Committee so constituted by the Hon’ble Chief Justice of the respective States shall meet
at least once in two months and direct such corrective measures to be taken by concerned court as
deemed fit and shall also monitor the old cases (preferably which are pending for more than 05
years) constantly.

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 Lesson 10: Criminal Procedure Code, 1973

Arnesh Kumar v. State of Bihar, (2014) 8 SCC 273

The Supreme Court observed that:

“the need for caution in exercising the drastic power of arrest has been emphasized time and again
by Courts but has not yielded desired result. Power to arrest greatly contributes to its arrogance
so also the failure of the Magistracy to check it. Not only this, the power of arrest is one of the
lucrative sources of police corruption. The attitude to arrest first and then proceed with the rest is
despicable. It has become a handy tool to the police officers who lack sensitivity or act with oblique
motive”.
“…..we believe that no arrest should be made only because the offence is non-bailable and
cognizable and therefore, lawful for the police officers to do so…..”

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 Lesson 12 - Special Courts, Tribunals under Companies Act & other Legislations

1. Section 58 of the Companies (Amendment) Act, 2020 has amended Section 410 of the
Companies Act, 2013 w.r.t. “Constitution of Appellate Tribunal”-Notification dated
September 28, 2020 (Amendment Effective from January 22, 2021)

(i) in the opening portion, the words "not exceeding eleven" is omitted;

Details of Changes:

The restriction on the appointment of the number of judicial and technical members in the
Appellate Tribunal by the Central Government has been removed.

(ii) in clause (b), for the word, figures and letter "section 53N", the word, figures and letter
"section 53A" is substituted.

Details of Changes:

The NCLAT constituted under Section 410 of the Companies Act, 2013 is empowered to hear
appeals against any direction, decision or order referred to in Section 53A of the Competition
Act, 2002 in accordance with the provisions of that Act.

For details: https://www.mca.gov.in/Ministry/pdf/AmendmentAct_29092020.pdf

https://www.mca.gov.in/bin/ebook/dms/getdocument?doc=Njc1MQ==&docCategory=Notificat
ions&type=open

2. Benches of Appellate Tribunal (inserted by The Companies Amendment Act

2020 Amendment Effective from 22nd January 2021)

The Companies Amendment Act 2020 inserted section 418A in the Companies Act, 2013. It
provides as under:

The powers of the NCLAT may be exercised by the Benches thereof to be constituted by the
Chairperson. Further, it has been provided that a Bench of the NCLAT shall have at least one
Judicial Member and one Technical Member.

The Benches of the NCLAT shall ordinarily sit at New Delhi or such other places as the Central
Government may, in consultation with the Chairperson, notify. Provided that the Central
Government may, by notification, after consultation with the Chairperson, establish such number
of Benches of the NCLAT, as it may consider necessary, to hear appeals against any direction,
decision or order referred to in section 53A of the Competition Act, 2002 and under section 61 of
the Insolvency and Bankruptcy Code, 2016.

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Impact

The said amendment inserted the provisions related to constitution, powers, sitting place,
jurisdiction etc. of National Company Law Appellate Tribunal (NCLAT).

For more details visit:

https://www.mca.gov.in/bin/ebook/dms/getdocument?doc=MTQxODk=&docCategory=Notific
ationandCirculars&type=open

3. The Companies (Amendment) Act, 2020 amends the provision of section 435 of the
Companies Act, 2013 related to establishment of Special Courts (effective from 22nd
January 2021)

Section 435 (1)

Old Provision

The Central Government may, for the purpose of providing speedy trial of offences under this Act,
by notification establish or designate as many Special Courts as may be necessary.

New provision

The Central Government may, for the purpose of providing speedy trial of offences under this Act,
except under section 452, by notification establish or designate as many Special Courts as may be
necessary.

Impact

The new provision has exempted the offence under section 452 i.e. Punishment for wrongful
withholding of property out of the jurisdiction of Special Courts.

For more details visit:

https://www.mca.gov.in/bin/ebook/dms/getdocument?doc=MTQxODk=&docCategory=Notific
ationandCirculars&type=open

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 Lesson 13 - Arbitration and Conciliation Act, 1996

1. The Arbitration and Conciliation (Amendment) Act, 2021 amends the Arbitration and
Conciliation (Amendment) Act, 2021

Hon’ble President of India promulgated ‘The Arbitration and Conciliation (Amendment)

Ordinance, 2020’ on November 04, 2020 with an objective to ensure that all the stakeholder parties
get an opportunity to seek unconditional stay of enforcement of arbitral awards, where the
underlying arbitration agreement or contract or making of the arbitral award are induced by fraud
or corruption.

Amendments in the ordinance inter-alia include amendments to Section 43J of Arbitration and
Conciliation Act, 1996, which prescribes qualification, experience and norms for accreditation of
arbitrators, is substituted with the following section.

43J. The qualifications, experience and norms for accreditation of arbitrators shall be such
as may be specified by the Regulations.

Accordingly, the qualifications for appointment as arbitrators, which were earlier prescribed in the
principal Act, will now be through Regulations.

Impact

The provisions of the Arbitration and Conciliation (Amendment) Ordinance, 2020 were adopted
in the principal Act by virtue of the Arbitration and Conciliation (Amendment) Act, 2021.

For more details visit:

https://egazette.nic.in/WriteReadData/2021/225832.pdf

2. The Oriental Insurance Company Limited vs. Dicitex Furnishing Limited

The Supreme Court has decided the case of the Oriental Insurance Company Limited vs. Dicitex
Furnishing Limited on 13th November, 2019. The details of the case are as follows:

For deciding the application under Section 11(6) of Arbitration Act, 1996, the court is
required to ensure that an arbitrable dispute exists and has to be prima facie convinced about
the genuineness or credibility of the plea and not be too particular about the nature of the
plea, which necessarily has to be made and established in the substantive proceeding

Facts of the Case:

Dicitex (Respondent) obtained a Standard Fire and Special Peril Policy from the Oriental Insurance
Company Limited (Appellants). A fire broke out which spread to the first floor of the building and
completely engulfed all of the appellant’s three godowns. Respondent informed the appellant about
the fire and the consequential loss. The appellant appointed M/s. C.P. Mehta & Co. as Surveyors

16
and Assessors to survey the loss suffered. The Surveyor appointed by the insurer filed a
FinalSurvey Report recommending that the clai m be settled for a net amount of `12,28,60,369/ be
paid over to Respondent. Respondent addressed various letters to the appellant’s chairman,
informing him of the financial distress that it was facing, requesting for settlement of the claim on
priority basis. Apparently, the appellant appointed a Chartered Accountant (M/s Naveen Jhand &
Associates) to carry out a resurvey of the claim made by Respondent. Respondent received an
email from the appellant stating that a discharge voucher for the balance amount of the claim
payable as described was being enclosed. Respondent placed on record that its total claim was
approximately `15 crores and the surveyor had assessed the same at approximately `12.93 crores.
Respondent stated that the basis for arriving at the figure of `7.16 crores was not explained by the
appellant. Respondent submitted along with the discharge voucher for a full and final settlement
of their claim due to urgent need of funds to meet its mounting liabilities. Respondent placed on
record their objection that the same was signed due to pressure of the respondents and applied to
Bombay High Court under Section 11(6) of Arbitration Act, 1996. Bombay High Court has
allowed the application under Section 11(6) of said act. The appellant filled the appeal to the
Supreme Court in present case.

Decision:

The Hon’ble Supreme Court held that an overall reading of respondent’s application under Section
11(6) of Arbitration Act, 1996 clearly shows that its grievance with respect to the involuntary
nature of the discharge voucher was articulated. The court is conscious of the fact that an
application under Section 11(6)is in the form of a pleading which merely seeks an order of the
court, for appointment of an arbitrator. The high court- which is required to ensure that an
arbitrable dispute exists, has to be prima facie convinced about the genuineness or credibility of
the plea of coercion; it cannot be too particular about the nature of the plea, which necessarily has
to be made and established in the substantive proceeding. The Supreme Court opinioned that the
reasoning in the impugned judgment cannot be faulted. The appeal was held to be dismissed
without order as to costs.

For more details:

https://main.sci.gov.in/supremecourt/2015/39792/39792_2015_4_1501_18110_Judgement_13-
Nov-2019.pdf

3. Brahmani River Pellets Limited vs. Kamachi Industries Limited

The Supreme Court has decided the case of the Brahmani River Pellets Limited vs. Kamachi
Industries Limited on 25th July, 2019. The details of the case are as follows:

Parties are free to agree on the place of arbitration. Party autonomy has to be construed in
the context of parties choosing a court which has jurisdiction out of two or more competent
courts having jurisdiction

17
Facts of the Case:

The appellant entered into an agreement with the respondent for sale of 40,000 WMT (Wet Metric
Tonne) of Iron Ore Pellets. Dispute arose between the parties regarding the price and payment
terms and the appellant did not deliver the goods to the respondent. The respondent claimed for
damages and the appellant denied any liability. Clause 18 of the agreement between the parties
contains an arbitration clause. The respondent invoked arbitration clause and the appellant did not
agree for the appointment of arbitrator. Hence, the respondent filed petition under Section 11(6)
of the Arbitration and Conciliation Act, 1996 before the Madras High Court. The appellant
contested the petition challenging the jurisdiction of the Madras High Court on the ground that the
parties have agreed that Seat of arbitration be Bhubaneswar. The Madras High Court vide
impugned order appointed a former judge of the Madras High Court as the sole arbitrator. The
appellant preferred the appeal to the Supreme Court.

Decision:

The Hon’ble supreme court observed that Section 2(1)(e) of the Arbitration and Conciliation Act,
1996 (the Act) defines the “Court” with reference to the term “subject-matter of the suit”. As per
Section 2(1)(e) of the Act, if the “subject-matter of the suit” is situated within the arbitral
jurisdiction of two or more courts, the parties can agree to confine the jurisdiction in one of the
competent courts. In para (96) of BALCO, the Supreme Court held that the term “subjectmatter”
in Section 2(1)(e) of the Act is to identify the court having supervisory control over the arbitral
proceedings. As per Section 20 of the Act, parties are free to agree on the place of arbitration. Party
autonomy has to be construed in the context of parties choosing a court which has jurisdiction out
of two or more competent courts having jurisdiction. The Supreme Court observed that when the
parties have agreed to have the “venue” of arbitration at Bhubaneswar, the Madras High Court
erred in assuming the jurisdiction under Section 11(6) of the Act. Since only Orissa High Court
will have the jurisdiction to entertain the petition filed under Section 11(6) of the Act. The
impugned order was liable to be set aside.

For more details:

https://main.sci.gov.in/supremecourt/2019/9962/9962_2019_7_1501_15263_Judgement_25-Jul-
2019.pdf

4. Oil and Natural Gas Corpn. Ltd v. Saw Pipes Ltd AIR 2003 SC 262

In this case the court decided how “Public Policy” should be interpreted for the purpose of section
34 of the Arbitration and Conciliation Act, 1996 which deals with Application for setting aside
arbitral award. It was decided in this case that ‘public policy’ should not be interpreted in narrow
terms with respect to just the Indian Laws, it should be interpreted in a way that aims at broadening
public interest and fairness. It was stated by court that:

18
 “Public policy, however, is not the policy of a particular government. It connotes some matter which
concerns the public good and the public interest. The concept of what is for the public good or in
the public interest or what would be injurious or harmful to the public good or the public interest
has varied from time to time. It must be held that the enforcement of a foreign award would be
refused on the ground that it is contrary to public policy if such enforcement would be contrary to

(i) fundamental policy of Indian law; or

(ii) the interests of India; or
(iii) justice or morality.

If the arbitral tribunal does not dispense justice, a Court would be well within its right in upholding
the challenge to the award on the ground that it is in conflict with the public policy of India.”

5. Union of India v. Om Vajrakaya Construction Company (dated 20.12.2021) in OMP (COMM)

299/2021

In this case, the High Court of Delhi held unlike the tribunal’s ability to award interest, the court’s
ability to award costs within the meaning of section 31A of the Arbitration and Conciliation Act,
1996 is unrestricted, and any agreement between the parties that forbids the awarding of costs would
be irrelevant unless they do so after a dispute has already arisen.

6. BCC Developers & Promoters Ltd v. DMRC (dated 28.10.2021 in ARB.P 813/2021)

In this case, it was observed that just because the appointed arbitrators happen to be ex-employees
of one of the parties, it shall not make them ineligible for such appointment.

“the plea urged by petitioner seeking appointment of sole Arbitrator and disqualification of panel
of proposed/nominated Arbitrators by the respondent being hit by provision of Section12 of the
Act, is not maintainable.”

7. Chloro Controls (I) P. Ltd v. Severn Trent Water Purification Inc and Ors 2012(9) N SCALE
595

In this case, court observed on the rule of kompetenz kompetenz.

Court held that “challenge to the existence or validity of the arbitration agreement will not prevent
the arbitral tribunal from proceeding with hearing and ruling upon its jurisdiction. The negative
effect of the kompetenz kompetenz principle is that arbitrators are entitled to be the first to
determine their jurisdiction which is later reviewable by the court, when there is action to enforce
or set aside the arbitral award. Where the dispute is not before an arbitral tribunal, the Court must
also decline jurisdiction unless the arbitration agreement is patently void, inoperative or incapable
of being performed.”

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8. Cholamandalam Investment and Finance Company Ltd. vs. Amrapali Enterprises and Ors.
(14.03.2023 - CALHC)

This case has given a clarification on unilateral appointment of Arbitrator.

Calcutta High Court decided that in light of the aforementioned judicial precedents(mentioned in
the Judgement), it can be said with unambiguous certainty that the unilateral appointment of
Arbitrator by the award holder is illegal and void. However, what still remains to be determined is
the impact of the aforesaid illegality on the arbitral award and the present execution petition.

The Court further stated that ……. It is a settled principle of law that compliance with Section
12(5) read with Schedule VII is sine qua non for any arbitral reference to gain recognition and
validity before the Courts. In the present facts in hand, an arbitral reference which itself began
with an illegal act has vitiated the entire arbitral proceedings from its inception and the same cannot
be validated at any later stage. Thus, it would be a logical inference to consider the aforesaid
arbitral proceedings as void ab initio.

9. Can court exercising power under Section 37 of the Act modify the orders of the arbitral
tribunal to protect the subject matter of the arbitration?
Asian Hotels (North) Ltd. vs. Sital Dass Sons and Ors. (22.12.2022 - DELHC)

The High Court of Delhi has said in the Judgment of this case that this Court is aware of the limited
scope of interference in appeal against orders passed by Arbitrators on applications under Section
17 of the Act. However, in appropriate cases, Court can exercise its jurisdiction under Section 37
of the Act to protect the legitimate interest of the appellant, which includes modifying the order of
the learned Arbitral Tribunal. It may be noted that jurisdiction of this Court under Section 37 of
the Act is substantially different from the scope of jurisdiction under Section 34 of the Act, which
does not include the authority to modify the award passed by the Arbitral Tribunal.

10. Application of Fundamental Rights while passing of Awards by Arbitrators

The Chairman Board of Trustees for Shyama Prasad Mookherjee Port Kolkata vs. Universal
Sea Port Private Ltd. (03.11.2022 - CALHC)

In this case, the Calcutta High Court has said in my understanding, the respondent seems to have
had found favour with the arbitrator’s sympathies, but unfortunately, they do not find favour with
my sympathies and most unfortunately, they do not find favour with the law. It is evident that
considerations of discrimination and want of state functionaries to act in due conformance to
Article 14 of the Constitution swayed the arbitrator’s contractual interpretation. The aforesaid
inference can be gauged from paragraph 5(e) of this judgement. Firstly, arbitrators cannot apply
the rights envisaged under the fundamental rights of the Constitution of India or equity while
granting arbitral awards, and if they do, such awards must be set aside as being patently illegal
under Section 34(2A) of the Act. The arbitrator is a creature of contract and must act within the
powers granted by it…..

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11. Types of Arbitration

1. Ad hoc Arbitration - This is a type of arbitration that is not handled by a formal organisation
rather the number of arbitrators, mode of selection, and how the arbitration will be conducted,
may be decided by the parties. The procedural aspects should also be decided by the parties.

2. Domestic Arbitration - The arbitration in which the disputes are subject to Indian laws and
the cause of action is entirely based in India are called Domestic arbitration.

3. International Arbitration - It is an arbitration relating to disputes where at least one of the

parties is:
(i) an individual who is a national of, or habitually resident in, any country other than
India; or
(ii) a body corporate which is incorporated in any country other than India; or
(iii) an association or a body of individuals whose central management and control is
exercised in any country other than India; or
(iv) the Government of a foreign country.
4. Institutional arbitration - In Institutional arbitration, the matter is to be administered by
established arbitration institutions.

12. Essentials of Arbitral Process

1. Seat of Arbitration – The parties are free to select any location as the arbitration’s seat.
2. Venue of Arbitration – The Venue or location, for the sessions of the arbitral proceedings
may be decided by the parties.
3. Arbitral Institution – The parties may select the arbitral institution for conducting the
proceedings. The rules of such arbitration institution will apply to proceedings.
4. Law – The parties may by agreement choose any law .
5. Language – The parties may also agree on the language of the arbitration proceedings.
6. Number of arbitrators – The parties are free to determine the number of arbitrators, provided
that such number shall not be an even number. However, failing the determination, the arbitral
tribunal shall consist of a sole arbitrator.
7. Cost – The Court or arbitral tribunal have the discretion to determine the cost which includes
the decision as to:
(a) whether costs are payable by one party to another;
(b) the amount of such costs; and
(c) when such costs are to be paid

13. M/s Obulapuram Mining Company Pvt. Ltd. v. R.K. Mining Private Limited decided by High
Court of Andhra Pradesh on 12th September, 2023

In this case, the essential objection before the court was raised that after the Commercial Courts
Act, 2015 came into force an Award can only be executed before the Commercial Court and that
the regular District Judge did not have the jurisdiction to entertain this case. He points out that
initially by virtue of G.O.Ms.No.74, dated 10.06.2016, the Principal District and Sessions Courts
in all the districts of the State of Andhra Pradesh were designated as Commercial Courts.

21
The contention of the respondents on the other hand, as far as jurisdiction is concerned, was that
the Commercial Courts do not have the power to execute an Arbitration Award. Learned senior
counsel contends that the execution of an Award, even if the same relates to a dispute of
commercial value and commercial industry, can only be before a regular Civil Court as per the
provisions of Order 21 of the Code of Civil Procedure, 1908.

The Hon’ble High Court of Andhra Pradesh in the Judgement stated that with reference to the
provisions of Arbitration and Conciliation Act, 1996, Commercial Courts Act and Code of Civil
Procedure that “A reading of these sections and amendments in seriatim shows that the intention
of the legislature was only to modify and streamline the procedures and practices relating to suits
and applications in suits etc., which are pending for disposal.”

The silence or failure to refer to Order 21 does not mean that the Commercial Court cannot execute
a decree. A purposive interpretation has to be given to the provisions of the Act. If it is not so
interpreted the Commercial Courts will be powerless in many aspects.

14. Chennai Metro Rail Limited Administrative Building v. M/s Transtonnelstroy Afcons (JV)
& Anr. decided by Supreme Court on 19th October, 2023

In this case, Chennai Metro Rail Limited(“Chennai Metro”), a joint venture between the Central
Government and the Government of Tamil Nadu, had awarded the contract to the respondent
(“Afcons”).

The tribunal recorded the agreement of parties, that the hearing fee for each arbitrator was fixed at
₹ 1,00,000/- per session of hearing date. A member of tribunal was substituted. Further, in the 10th
Meeting, the tribunal sought to revise the fee payable from ₹ 1,00,000/- to ₹ 2,00,000/. Chennai
Metro objected to this revision and Afcons requested the tribunal to keep its direction for
modification of fee, in abeyance till the decision of this court.

Later, Afcons informed Chennai Metro that it had paid the revised fee for five hearings but Chennai
Metro filed an application before the Madras High Court. In this proceeding under Section 14, the
relief sought was a declaration that the mandate of the tribunal was terminated in respect of the
disputes referred to them.

All three members of the tribunal filed affidavits, in response to the Section 14 petition
acknowledging that Supreme Court’s judgment in ONGC v. AFCONS Gunasa JV2 (hereafter
“ONGC”) had decided the issue and thus members of the tribunal decided to revert back to the
originally agreed fee i.e., ₹1,00,000.

Initially, the High Court granted an interim order, staying the proceedings. However, after hearing
counsel for the parties, and considering the materials on the record, the court dismissed the
application, filed by Chennai Metro through the impugned judgment.

In the present SLP filed before Hon’ble Supreme Court, it was decided that the attempt by Chennai
Metro to say that the concept of de jure ineligibility because of existence of justifiable doubts
about impartiality or independence of the tribunal on unenumerated grounds [or other than those

22
outlined as statutory ineligibility conditions in terms of Sections 12 (5)], therefore cannot be
sustained. We can hardly conceive of grounds other than those mentioned in the said schedule,
occasioning an application in terms of Section 12(3). In case, this court were in fact make an
exception to uphold Chennai Metro’s plea, the consequences could well be an explosion in the
court docket and other unforeseen results. Skipping the statutory route carefully devised by
Parliament can cast yet more spells of uncertainty upon the arbitration process….

23
 Lesson 14 - Indian Stamp Act, 1899

1. Finance Act, 2019 amends Indian Stamp Act, 1899

Implementation of Amendments in the Indian Stamp Act, 1899 and Rules made from 1st
July, 2020 for Rationalized Collection Mechanism of Stamp Duty across India with respect
to Securities Market Instruments

The Amendments in the Indian Stamp Act, 1899 brought through the Finance Act 2019 and Rules
made thereunder have come into effect from 1st July, 2020 vide notifications dated 30th March,
2020.

Impact

This system will help develop equity markets and equity culture across the length and breadth of
the country, ushering in balanced regional development.
To achieve the rationalization of stamp duty structures, the amendments, inter-alia, provide for
the following structural reforms —
i. The stamp-duty on sale, transfer and issue of securities shall be collected on behalf of the
State Government by the collecting agents who then shall transfer the collected stamp-duty
in the account of the concerned State Government.
ii. In order to prevent multiple incidences of taxation, no stamp duty shall be collected by the
States on any secondary record of transaction associated with a transaction on which the
depository / stock exchange has been authorised to collect the stamp duty.
iii. In the extant scenario, stamp duty was payable by both seller and buyer whereas in the new
system it is levied only on one side (payable either by the buyer or by the seller but not by
both, except in case of certain instrument of exchange where the stamp duty shall be borne
by both parties in equal proportion).
iv. The collecting agents shall be the Stock Exchanges or authorized Clearing Corporations
and the Depositories.
v. For all exchange based secondary market transactions in securities, Stock Exchanges shall
collect the stamp duty; and for off-market transactions (which are made for a consideration
as disclosed by trading parties) and initial issue of securities happening in demat form,
Depositories shall collect the stamp duty.
vi. The Central Government has also notified the Clearing Corporation of India Limited
(CCIL) under the jurisdiction of RBI and the Registrars to an Issue and/or Share Transfer
Agents (RTI/STAs) to act as a collecting agent. The objective is to bring OTC derivative
transactions reported to CCIL and physical space (non-demat) transactions in mutual funds
handled through RTI/STAs under the ambit of stamp duty regime so as to avoid any tax
arbitrage.
vii. The collecting agents shall within three weeks of the end of each month transfer the stamp-
duty collected to the State Government where the residence of the buyer is located and in
case the buyer is located outside India, to the State Government having the registered office
of the trading member or broker of such buyer and in case where there is no such trading
member of the buyer, to the State Government having the registered office of the
participant.

24
viii. The collecting agent shall transfer the collected stamp-duty in the account of concerned
State Government with the Reserve Bank of India or any scheduled commercial bank, as
informed to the collecting agent by the Reserve Bank of India or the concerned State
Government.
ix. The collecting agent may deduct 0.2 per cent of the stamp-duty collected on behalf of the
State Government towards facilitation charges before transferring the same to such State
Government.
x. For many segments, there is reduction in duty. For example, the rate prescribed is lower
for issue of equity/debentures and for transfer of debentures (including re-issue) to aid
capital formation and to promote corporate bond market.
xi. For equity cash segment trading (both delivery and non-delivery-based transactions) and
options, since rates are to be charged only on one side in line with the new scheme, it can
be stated that there is an overall reduction in tax burden.
xii. Secondary market transfer of instruments which are traded with differences in a few basis
points, like interest rate / currency derivatives or corporate bonds are being charged at a
very lower rate from the existing rates. For the newly introduced ‘repo on corporate bonds’,
a far lower rate is specified, since similarly positioned repo on Government Securities is
not subject to duty.
xiii. No stamp duty shall be chargeable in respect of the Instruments of transaction in stock
exchanges and depositories established in any International Financial Services Centre set
up under section 18 of the Special Economic Zones Act, 2005.
xiv. Tax arbitrage is avoided by providing the same rate of stamp duty for issue or re-issue or
sale or transfer of securities happening outside stock exchanges and depositories.
xv. Mutual funds, being delivery-based transactions in securities, were supposed to have been
paying the duty as per various State Acts. All mutual fund transactions are thus liable for
stamp duty and the new system has only standardized the charges across states and the
manner of collection of stamp duty.
The Regulators (RBI & SEBI) have been authorized by the Central Government under the Indian
Stamp Act, 1899 to issue clarificatory circulars/ operational guidelines on specific issues so as to
ensure smooth implementation from 1st July, 2020.

For more details visit:

https://pib.gov.in/PressReleasePage.aspx?PRID=1635399
http://egazette.nic.in/WriteReadData/2019/209695.pdf

25
 Lesson 16: Right to Information Act, 2005

1. HN Malviya vs. CPIO, Department of Personnel and Training on 31st October, 2022 (Central
Information Commission)

The Appellant filed an RTI application dated 27.01.2021 seeking the information related to seniority
of employees.

The Chief Information Commission in Second Appeal decided that the Commission based on a
perusal of the facts on record observes that the information sought for in the RTI Application is in
the form of mere conjecture and even futuristic query, neither of which conforms to Section 2(f) of
the RTI Act, yet the CPIO & FAA have tried to facilitate the Appellant adequately in keeping with
the spirit of the RTI Act. The Appellant shall note that outstretching the interpretation of Section
2(f) of the RTI Act to include deductions and inferences to be drawn by the CPIO is unwarranted
as it casts immense pressure on the CPIOs to ensure that they provide the correct
deduction/inference to avoid being subject to penal provisions under the RTI Act.

2. Mr. Raj Kumar vs. CPIO Guru Teg Bahadur Hospital dated 31st October, 2022 (Central
Information Commission)

The Complainant vide his RTI application sought information relating to salary records and DA
implementation.

The CPIO furnished a pointwise reply to the Complainant. Dissatisfied with the reply received from
the PIO, the Complainant filed a First Appeal, which was not adjudicated by the First Appellate
Authority. Thereafter, the Complainant filed a Complaint before the Commission.

The Complainant remained absent during the hearing despite notice. The Respondent present during
the hearing submitted that a suitable response in accordance with the provisions of the RTI Act,
2005, had already been furnished to the Complainant. The respondent further stated that the
information sought in respect of point no. 01 will be furnished in due course.

The Central Information Commission decided that Keeping in view the facts of the case and the
submissions made by the respondent and after perusal of the documents available on record, the
Commission directs the Respondent to furnish complete and correct information to the
Complainant, in accordance with the spirit of transparency and accountability as enshrined in the
RTI Act, 2005 within a period of 21 days from the date of receipt of this order under the intimation
to the Commission. The Commission cautions the then CPIO to be more careful in the future while
dealing with the RTI application so that no such lapse would recur and the provisions of the RTI
Act are complied with in letter and spirit.

26
 Lesson 17 - Information Technology Act, 2000

1. Information Technology (Reasonable Security Practices and Procedures and Sensitive

Personal Data or Information) Rules, 2011

Data privacy and protection in today’s world has become a matter of Individual rights. The right
to privacy is recognized as a fundamental right under Article 21 of the Indian constitution which
was held in the historic verdict by the Supreme Court in the case of Justice KS Puttaswamy v.
Union of India. India’s digital transformation requires the law to transform as well. Information
Technology Act, 2000 (‘the IT Act’) and Information Technology (Reasonable security practices
and procedures and sensitive personal data or information) Rules, 2011, commonly known as SPDI
Rules, is one of the key legislations in this area.

Under Section 87(2) read with Section 43 – A of the IT Act, “SPDI Rules” were issued on 13th of
April 2011 which govern the Sensitive Personal Data or information and apply to body corporate
or any person located in India.

The rules define sensitive personal data under the Rule 3 that the following types of data or
information shall be considered as personal and sensitive:
o Passwords,
o Bank Account details,
o Credit/debit card details,
o Present and past health records,
o Sexual orientation,
o Biometric data.

An information provider is a person who provides information to the body corporate and under
these rules, he has certain rights over the sensitive personal information, this information cannot
be collected without the providers’ consent and he or she has the right to abstain from giving
consent and can withdraw the consent by writing to the body corporate.

i. Privacy Policy

Rule 4 requires a body corporate to provide a privacy policy on their website, which is easily
accessible, provides for the type and purpose of personal, sensitive personal information collected
and used, and Reasonable security practices and procedures.

ii. Consent

Rule 5 requires that prior to the collection of sensitive personal data, the body corporate must
obtain consent, either in writing or through fax regarding the purpose of usage before collection of
such information.

27
iii. Collection Limitation

Rule 5 (2) requires that a body corporate should only collect sensitive personal data if it is
connected to a lawful purpose and is considered necessary for that purpose.

iv. Notice

Rule 5(3) requires that while collecting information directly from an individual, the body corporate
must provide the following information:
o The fact that information is being collected
o The purpose for which the information is being collected
o The intended recipients of the information
o The name and address of the agency that is collecting the information
o The name and address of the agency that will retain the information.

v. Retention Limitation

Rule 5(4) requires that body corporate must retain sensitive personal data only for as long as it
takes to fulfil the stated purpose or otherwise required under law.

vi. Purpose Limitation

Rule 5(5) requires that information must be used for the purpose that it was collected for.

vii. Right to Access and Correct:

Rule 5(6) requires a body corporate to provide individuals with the ability to review the
information they have provided and access and correct their personal or sensitive personal
information.

viii. Right to ‘Opt Out’ and Withdraw Consent

Rule 5(7) requires that the individual must be provided with the option of ‘opting out’ of
providing data or information sought by the body corporate. Also, they must have the right to
withdraw consent at any point of time.

ix. Grievance Officer

Rule 5(9) requires that body corporate must designate a grievance officer for redressal of
grievances, details of which must be posted on the body corporate’s website and grievances must
be addressed within a month of receipt.

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x. Disclosure with Consent, Prohibition on Publishing and Further Disclosure

Rule 6 requires that body corporate must have consent before disclosing sensitive personal data to
any third person or party, except in the case with Government agencies for the purpose of
verification of identity, prevention, detection, investigation, on receipt of a written request. Also,
the body corporate or any person on its behalf shall not publish the sensitive personal information
and the third party receiving the sensitive personal information from body corporate or any person
on its behalf shall not disclose it further.

xi. Requirements for Transfer of Sensitive Personal Data

Rule 7 requires that body corporate may transfer sensitive personal data into another jurisdiction
only if the country ensures the same level of protection and may be allowed only if it is necessary
for the performance of the lawful contract between the body corporate or any person on its behalf
and provider of information or where such person has consented to data transfer.

xii. Security of Information

Rule 8 requires that the body corporate must secure information in accordance with the ISO 27001
standard or any other best practices notified by Central Government, which must be audited
annually or when the body corporate undertakes a significant up gradation of its process and
computer resource.

2. Syed Asifuddin and Ors. vs. The State of Andhra Pradesh and Ors. Andhra Pradesh High
Court, 2006 (1) ALD Cri 96, 2005 Cri. LJ 4314

In this case it was contended that Insofar as the offence under Section 65 of Information
Technology Act is concerned, a telephone handset is not a computer nor a computer system
containing a computer programme. Alternatively, in the absence of any law which is in force
requiring the maintenance of “computer source code”, the allegation that the petitioners concealed,
destroyed or altered any computer source code, is devoid of any substance and therefore the
offence of hacking is absent.

It was observed by the court that the essential functions in the use of cell phone, which are
performed by the MTSO, is the central antenna/central transmitter and other transmitters in other
areas well coordinated with the cell phone functions in a fraction of a second. All this is made
possible only by a computer, which simultaneously receives, analyses and distributes data by way
of sending and receiving radio/electrical signals.

3. Google India Private Limited vs. Visakha Industries and Ors. (10.12.2019 - SC)

In this case the Supreme Court decided that Section 79 of Information Technology Act, 2000 as
originally enacted, did not deal with the effect of other laws.

The Supreme Court inter alia decided that the finding by the High Court that in the case on hand,
in spite of the complainant issuing notice, bringing it to the notice of the Appellant about the

29
dissemination of defamatory matter on the part of the first Accused through the medium of
Appellant, Appellant did not move its little finger to block the said material to stop dissemination
and, therefore, cannot claim exemption Under Section 79 of the Act, as it originally stood, is
afflicted with two flaws. In the first place, the High Court itself has found that Section 79, as it
originally was enacted, had nothing to do with offences with laws other than the Act. We have also
found that Section 79, as originally enacted, did not deal with the effect of other laws. In short,
since defamation is an offence Under Section 499 of the Indian Penal Code, Section 79, as it stood
before substitution, had nothing to do with freeing of the Appellant from liability under the said
provision…..

4. Law of Personal Data Protection

Digital Personal Data Protection Act, 2023 has got the assent of the Hon’ble President of India on
11th August, 2023. This law will be supplemented by delegated Legislation by way of rules to be
made by Central Government.

The purpose of this law is to provide the law relating to the processing of digital personal data in
a manner that recognises both the right of individuals to protect their personal data and the need to
process such personal data for lawful purposes and for matters connected therewith or incidental
thereto.

Important Definitions
 “Board” means the Data Protection Board of India established by the Central Government.

 “Data” means a representation of information, facts, concepts, opinions or instructions in

a manner suitable for communication, interpretation or processing by human beings or by
automated means;

 “Data Principal” means the individual to whom the personal data relates and where such
individual is—

(i) a child, includes the parents or lawful guardian of such a child;

(ii) a person with disability, includes her lawful guardian, acting on her behalf;

 “Data Processor” means any person who processes personal data on behalf of a Data
Fiduciary.

 “Personal data” means any data about an individual who is identifiable by or I n relation to
such data;

 “Personal data breach” means any unauthorised processing of personal data or accidental
disclosure, acquisition, sharing, use, alteration, destruction or loss of access to personal
data, that compromises the confidentiality, integrity or availability of personal data;

30
  “Processing” in relation to personal data, means a wholly or partly automated operation or
set of operations performed on digital personal data, and includes operations such as
collection, recording, organisation, structuring, storage, adaptation, retrieval, use,
alignment or combination, indexing, sharing, disclosure by transmission, dissemination or
otherwise making available, restriction, erasure or destruction;

 “Data Fiduciary” means any person who alone or in conjunction with other persons
determines the purpose and means of processing of personal data; and “person”
includes—

(i) an individual;
(ii) a Hindu undivided family;
(iii) a company;
(iv) a firm;
(v) an association of persons or a body of individuals, whether incorporated or not;
(vi) the State; and
(vii) every artificial juristic person, not falling within any of the preceding sub-
clauses

Application of the Act

According to section 3, subject to the provisions of this Act, it shall-

(a) apply to the processing of digital personal data within the territory of India where the personal
data is collected––
(i) in digital form; or
(ii) in non-digital form and digitised subsequently;
(b) also apply to processing of digital personal data outside the territory of India, if such processing
is in connection with any activity related to offering of goods or services to Data Principals within
the territory of India;
(c) not apply to—
(i) personal data processed by an individual for any personal or domestic purpose; and
(ii) personal data that is made or caused to be made publicly available by—
(A) the Data Principal to whom such personal data relates; or
(B) any other person who is under an obligation under any law for the time being in force
in India to make such personal data publicly available.

Illustration. X, an individual, while blogging her views, has publicly made available her personal
data on social media. In such case, the provisions of this Act shall not apply.

Digital Data Protection Act, 2023 will come into force only after notification in the Official Gazette
by the Central Government which is yet to be notified.

Note: Students appearing in June, 2024 Examination should also update themselves on all the
relevant Notifications, Circulars, Clarifications, Orders etc. issued by MCA, SEBI, RBI & Central
Government upto 30th November, 2023.

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