All you need to know about Road Accidents


There has been a steep escalation of road accidents in the past few years with the expansion of more motor vehicles in India. Road injuries and fatalities have come up as a major public concern as it is one of the leading causes of death and permanent disability in this country. According to a study conducted by National Transportation Planning and Research Center [1], one road accident takes place in every four minutes in India. Almost 97% of the road accidents are caused by rash or negligent driving[2].

When a road accident takes place, it gives rise to both civil and criminal liabilities on the part of the driver depending upon the nature and cause of the accident. Motor Vehicles Act, 1988 majorly deal with issues related to road accidents. Indian Penal Code also covers certain areas when it comes to criminal liability.

Things to do in case of a road accident (Section 132 of Motor Vehicles Act, 1988)

It is the driver’s duty to stop his vehicle and wait for a police officer for some reasonable time[3] when he is involved in a road accident and injures any person, animal or causes damage to any other car or property.

The driver of the vehicle should not panic and he should give his name and address to the person affected by the accident and also ask for the affected person’s details.

Generally people run away from such situations mainly due to fear of public harassment, violence and criminal record. There is a possibility that people may own up to their fault but because of rampant bribery culture they think that it is safer to run away than fact potential harassment and loot by the police.

There have been many accidents in which because of celebrity limelight and monetary stronghold the matter has been suppressed and not faced any serious implications in the eyes of law. The Aaston Martin hit and run case is one of those cases where the eye witness gave the statement that a young man (Mukesh Ambani’s son Akash Ambani) came out of the Aaston Martin Rapid and hopped into security vehicle after hitting a Hundai car and then ramming into an Audi showroom but the next day an old employee of Reliance Industries, Mr. Bansilal Joshi said he was responsible for the accident which occurred during a routine maintenance ride of the said car. He said that he panicked so he ran away. The police recorded his report but did not arrest him as they were not sure about who was the actual culprit.[4]

The recent Hema Malini car accident also is one of the incidents where priority of fetching first aid was given to the celebrity and member of parliament over the common Indian family. All of the family members had suffered graver injuries than what Hema Malini did; and in addition to that, they lost their 2 year old daughter too. But medical help reached them long after Hema Malini was driven off around 60 km away by a Samaritan passer-by in his car.[5]

 Things to do in case of injury to a person in a road accident (Section 134 of Motor Vehicles Act, 1988)

It is the duty of the driver or the person in charge of the vehicle to take the injured person to the nearest hospital unless he is unable to do so due to circumstances out of his control. Such a driver should provide any kind of information to the police as and when demanded.

In case there was no police near the area of accident, such incident should be reported to the nearest police station within 24 hours of the said accident.

Information about the accident should be given to the insurer of the policy holder (driver or owner). Policy holder is the person who holds the Certificate of Insurance issued by the insurer. Information such as date, time and place of the accident, details of the person dead or injured, details of the driver of the car are important in such cases.

Things to do after a road accident

An application for compensation should be filed under the Claims Tribunal[6] when death, injury or damage has been caused by a motor vehicle.

Such application can be filed by[7]:-

the person who has sustained such injury;

the person whose property is damaged;

legal representatives of the person deceased or;

an agent duty authorized by the injured person or the legal representatives.

There are three modes by which aggrieved can ask for compensation:-

Principle of no fault liability (Section 140),

Structured formula basis (Section 163A),

Compensation in hit and run cases (Section161)

In the case of no fault liability principle, the claimant does not need to prove any fault or neglect on the part of the driver for receiving compensation. There is a fixed amount of compensation payable to the victim which is 50,000/- in case of death and 25,000/- in case of permanent disablement.

In case of compensation by structured formula basis, the owner of the vehicle or the authorized insurer shall be liable to pay as per the Second Schedule of the said Act to the victim or his legal representatives when such vehicle is involved in causing death or permanent disablement to any person.

The above two modes of compensation can be availed only if the identity of the car is known. Also, a claimant cannot use both methods of compensation together.

The third mode of compensation is in Hit and Run cases. Hit and run can be explained as the liability of a driver of any vehicle who is involved in a collision which damages vehicle or property of any other person or injures any other person(s) or both and who runs away without giving his name and license number as prescribed by statute to the injured party, witness or any law enforcement officer. It is a situation where the identity of the vehicle responsible for the accident is not traceable. As the identity of the driver or the owner is not traceable, a fixed amount of compensation is given to the victim or the legal representatives of the victim from funds created by the government. The claimant receives 25,000/- and 12,500/- in situation of death and grievous injury respectively.

So evidently, the compensation amount reduces by half if the driver or the car cannot be located. Therefore it is imperative to attempt to locate the wrong doer.

No time limit has been prescribed for filing claim application. Initially when the law came into force application had be filed within 6 months from the date of accident which was later increased to one year but for the welfare of the people such limitation has been deleted from the legislation[8].

Any person who feels aggrieved by the decision of the Claims tribunal can appeal in the High Court. There are exceptions to such appeal. Firstly, no appeal by the person who is supposed to pay any amount in terms of award given by the Claims Tribunal shall be entertained by the High Court, unless he has deposited with it rupees 25,000/- or 50% of the amount so awarded, whichever is less in the manner directed by the High Court. Secondly, no appeal shall lie against any award if the amount in the dispute is less than rupees 10,000/-[9].

Motor Vehicles Act, 1988 also covers the offences like over speeding, dangerous driving and drunk driving. A person should have had 30mg of alcohol per 100ml of blood in his/her body to be called drunk under the Act. A first time offender in the case of drunk driving could be sentenced up to 6 months imprisonment or fined up to two thousand rupees or both. A second time offender within the time gap of 3 years could be sentenced up to 2 years of imprisonment or fined up to three thousand rupees or both[10].

What gives rise to criminal liability in a road accident?

Accidents which are caused by the rashness or negligence of the driver give rise to criminal liability. Section 304A of the IPC covers such liability which is punishable for 2 years or fine or both. It is absolutely necessary that death or injury should be a direct result of the negligent act of the accused. If there is a third party intervention then the prosecution case would weaken. Remote or indirect connection will not give rise to any criminal liability. For example, if a driver while talking on the cell phone hits a pedestrian, he is directly responsible for such an accident. On the other hand, when a driver collides with a building and the window sill falls on a pedestrian walking by, then such driver will not be liable under this section.

A person who is driving or riding holds the ultimate duty to control his vehicle. Such a person is prima facie guilty of negligence if his vehicle dashes into something or someone unless he has reason to explain that he did everything in his power to keep the vehicle under control but the accident was inevitable. This principle was established in the landmark case of Ratlam v.s Emperor[11]. In the case of K. Perumal v.s State[12] it was held that the driver was liable to be punished under section 304A of the IPC as he ran over his vehicle on the victim, without attempting to save him even though there was sufficient space on the other side.

Carelessness does not give rise to criminal liability (but it does result in civil liability under the Motor Vehicles Act as previously explained). Recklessness of the accused should reflect disregard for other person’s life and property which means there has to be intention or what we call in law Mens Rea. In the case of Chintaram v.s State of Madhya Pradesh[13] , the deceased was walking on the middle of the road so the accused was driving by the left of the road trying to keep a distance from her. When the accused reached close to the deceased she abruptly took a left turn and got struck by the motorcycle. In this case, the accused was not negligent. The erratic decision of the victim did not give any reasonable time to the motorcyclist to avoid her so he was acquitted.

There are various other offences involving motor vehicle accidents which are punishable under the Indian Penal Code.

Section 279 covers rash driving or riding on public way which is punishable by the way of imprisonment up to 6 months or fine of one thousand rupees or both. Rash driving is independent of other offences irrespective of its consequences, which means if the consequence of such rash driving is death or injury then the accused will be tried for those offences in addition to the charge under this section.

Section 336 provides that anyone who acts rashly or negligently which endangers human life or safety can be punished with imprisonment for a term up to three months or a fine of rupees 250/- or both.

Section 337 and section 338 cover causing hurt and causing grievous hurt which threatens life and safety of people. A person is liable to pay up to rupees 500/- as fine and can be sentenced imprisonment for a term of six months or both in case of causing hurt under section 337. In case of grievous hurt, the driver can be punished with imprisonment extending up to two years or fine of rupees 1000/- or both.

All seven charges were proved in the Sessions Court against the accused in the Salman Khan’s 2002 hit and run case which were covered sections 279, 304(iii), 336,337,338,427 of the IPC and sections 181 and 183 of the Motor Vehicles Act.

 Recently, Vice President (Legal) of Reliance Industries, Jahnvi Gadkar has been charged with culpable homicide not amounting to murder along with provisions of drunk driving from the Motor Vehicles Act because Gadkar had in an inebriated state rammed her car (Audi) – into a taxi and killed two persons.


Position of road accident legislations in UK and USA

India and UK have very similar legal position with regard to road accidents. Road Traffic Act, 1988 is the main legislation which covers issues related to road safety and accidents. Provisions of Motor Vehicles Act 1988 (India) and Road Traffic Act, 1988 (UK) are quite identical. UK Highway Code Penalty Table[14]  gives a complete list of offences and their corresponding punishments.

There is a Drink Drive Rehabilitation Scheme in UK which has been active since January 2000. This is generally offered at the discretion of Court to the offender and under this scheme, any offender can reduce his ban on driving which should be more than 12 months. There is also provision of community service for repeated offenders.

In USA, car accident issues are entirely covered under respective state legislations but all the states have three basic elements which need to be proved satisfactorily by the victim to claim compensation. Firstly, plaintiff should prove that there had been a breach of duty from the part of the defendant. A mere utterance of sorry at the time of the accident by the defendant can be used as evidence against him. Secondly, the victim must prove harm is caused to him. Damage to vehicle and injury to the victim must be proved to the court so that the victim can rightfully claim compensation, medical expenses, loss of wages etc. Finally, the plaintiff must prove element of causation. Causation means consistency of medical testimony of the victim with the nature of the collision. It is possible that certain injuries of the victim occurred before the accident so injuries of the victim should be compared with a proper evaluation of the crash scene which is generally captured in pictures and CCTV footage at the traffic poles.


The Motor Vehicles Act had been recently amended in March 2015 and a new Motor vehicle Bill is set to be introduced in the monsoon session of the Parliament this year. The bill is going to introduce strict measures against traffic offenders. It suggests heavy fines up to 3 lakh rupees and imprisonment up to 7 years for death of a child.[15] The increase in both pecuniary and imprisonment penalty may create a deterrent effect in the minds of general public as well as regular offenders. There are CCTV cameras at the traffic signals and the highway speed check posts but most of them are non functional. This loose functioning of the traffic authorities also needs to change. India may have an ideal legislation for dealing with traffic regulations and accidents but in the end it is the duty of the citizens and traffic authority to keep the roads & highways a safe place.




[3] Reasonable time has not been defined under the Act. It varies from case to case and also depends to some extent on the judges who comprise the bench.



[6] Section 166 of The Motor Vehicles Act, 1988

[7] Section 166 of The Motor Vehicles Act, 1988

[8] 1994 Amendment of the Motor Vehicles Act, 1988

[9] Section 173 of the Motor Vehicles Act, 1988

[10] Section 185 of the Motor Vehicles Act, 1988

[11] AIR 1935 Mad 209

[12] 1998 4 Crimes 382

[13] 1986, ACJ 1043 MP




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Revisiting Related Party Transaction laws in India


In layman’s language, a Related Party Transaction is nothing but businesses carried out among the relatives of different companies. On the other hand, legally speaking, there are many financial and commercial legal instruments which define and provide for such transactions.

Section 188 of the Companies Act, 2013 does not disallow or prohibit Related Party Transactions (for brevity, RPTs) but in fact, lays down how the contracts or arrangements involving related parties should be made keeping in mind the interests of the company, investors and other tax compliances. It is to be noted that the definitions of related parties have been given in not just The Companies Act, 2013 but also in Indian Accounting Standards-18 which is a tax compliance rule. Additionally, under the S. 41 of the Income Tax Act, 1961, while considering the taxable status of transactions, the following have been regarded as related parties:

assessee is an individual – any relative of the assessee; (ii) assessee is a company, firm, association of persons or HUF – any director of the company, partner of the firm, or member of the association or family, or any relative of such director, partner or member; (iii) any individual who has a substantial interest in the business or profession of the assessee, or any relative of such individual; (iv) a company, firm, association of persons or Hindu undivided family having a substantial interest in the business or profession of the assessee or any director, partner or member of such company, firm, association or family, or any relative of such director, partner or member; (v) a company, firm, association of persons or Hindu undivided family of which a director, partner or member, as the case may be, has a substantial interest in the business or profession of the assessee; or any director, partner or member of such company, firm, association or family or any relative of such director, partner or member; (vi) any person who carries on a business or profession, (A) where the assessee being an individual, or any relative of such assessee, has a substantial interest in the business or profession of that person; or (B) where the assessee being a company, firm, association of persons or Hindu undivided family, or any director of such company, partner of such firm or member of the association or family, or any relative of such director, partner or member, has a substantial interest in the business or profession of that person[1].

Therefore, it is always better to go through the section in the company’s annual report which details related party disclosures to get a fair idea of the operative mechanism of the company.Globally speaking, in countries like South Korea, RPTs act as a tool to transfer wealth from one generationof controllers to the next in avoidance of inheritance taxes.[2] In business adverse jurisdictions with stringent tax system, RPTs is a way of accruing private benefits.


Impact of RPTs

The RPTs have a tendency to adversely affect the financial health of the corporates by the undesired influence or control or joint control on the policies of the administration and operation of companies. The corporate wealth can be misappropriated by reducing the profits to the outside investors and shareholders. Tax evasion is also accompanied with such actions by managers of the company-. The best corporate governance practices are thus challenged owing to poor monitoring and disclosure policies of the companies in case of RPTs. Recent corporate scandals have heightened the concern to understand the phenomenon. Accounting frauds in Enron, Tyco, Parmalat, and Satyam are glaring examples of the same.[3] There has always been an incessant effort made to highlight the significance of transactions done based on arm length principle (usually, the parties to the transactions act independently without showing any personal interest in the business).


Let’s look at the laws in place

RPTs under Indian Accounting Standards

Under AS 18, related party includes[4]:

Enterprises, directly or indirectly, controlled by one or more other enterprises;

Associates or Joint Ventures of an enterprise;

Individuals who own interest in the voting power of an enterprise and are in a position tosignificantly influence the enterprise;

Key Management Personnel and their relatives;

Enterprises which share common directors.Now comes the analysis part, if we compare the two definitions, we will come to know that AS­ 18 is wider in purview than the Companies Act. The Companies Act requires approval only when a director and his/her relatives are involved in the transactions. However, even if substantial interest is involved if the key management personnel (i.e -a director), is not involved in any transaction, the approvals are not required-. In this way, AS-18 takes a lead because it requires the approval from all key management personnel transacting with related parties.



Presence of parent or controlling company is to be revealed in the financial statements irrespective of the transaction between the two[5]. However, before the Ministry of Corporate Affairs gave a clarification through a circular issued in 2014, to exclude mergers and acquisitions transactions from the purview of related party transactions (RPT) provision in the new company law. Prior to this, there were much speculations u/s 188 since the provision was not clear.[6]

Under both CLA, 2013 and SEBI Code, approval of the shareholders through special resolution needs to be obtained in addition to the requirement that the related parties must abstain from voting on such resolutions. But, the problem with this might be the rising of doubts in the minds of minority shareholders who have every right to disapprove a non-abusive RPT without wholly examining the proposed transactions. Not only this, it is highly imperative on the part of independent directors on the board to effectively monitor and identify the RPTs. Until these things materialize, Indian capital markets will continue to suffer.



Further, Auditing and Assurance Standard 23­ Related Parties impose duty on auditor to identify and disclose the related party transaction in the financial statements of the company. This is in correspondence to the roles of auditors in a company.

Photo Courtesy:


[1] Definition of Related Party – A Comparative Analysis
CORPORATE LAW REPORTER last accessed 12/7/15
[2]Luca Enriques, Related Party Transactions: Policy Options and Real-world Challenges (with a Critique of the European Commission Proposal), HLS Forum
<>   last accessed 12/7/15
[3]Padmini Srinivasan, An Analysis of Related-Party Transactions in India, last accessed 12/7/15
[4]See Supra note 1
[5]IAS 24 — Related Party Disclosures, DELOITTE accessed 14/7/15
[6]K R Srivats, M&A deals, de-mergers not to attract related party provision in new company law, THE BUSINESS LINE

<> last accessed 13/7/15

FAQs: Registration of Property.


The registration of property that is land, flat, shop, garage or other things are mandated by the three laws such as Transfer of Property Act 1882; The Indian Contract Act 1872; The Registration Act 1908; Hindu Succession Act 1956; Indian Succession Act 1925 and such other municipal laws, local laws and bye laws.

One should be aware that whenever someone purchases any immovable property[1] (like, land, building etc and not tractor, gold etc) which is valued at or above Rs. 100, he would have to get such a property registered with the local registration office. It is easy to locate the local registration office for this purpose-the municipal corporation within which the buyer resides would be considered as the right place.

The buyer has to appoint an advocate for carrying out the registration of his property[2]. Though a buyer can get the property registered with the local registry office[3] also he can register any property situated in the State of West Bengal at ‘The Registrar of Assurances” situated opposite to the Governor house in Kolkata.

The buying and selling of such immovable property is considered legal when an “agreement of sale[4]” is drawn up. Such deed of sale must contain every minute particulars[5] relating to the property. For instance in case of sale of a flat by a promoter to an individual buyer the deed of sale should lay down specific details like: the material used to do the flooring (Mosaic or marble or tiles) the material used to make the walls, the kind of doors (Iron gates or steel gates) installed; the kind of water facilities installed; the percentage of common area that comprises the stair case, terrace lift, water tank, reservoir.

Note here, that many a times promoters try to get away with delivering less services than what is expected of them. Usually a small clause is put into the agreement which puts the liability of construction of “better reservoir facilities” upon the buyer on the payment of an extra fee. It is better for the buyer to be cautious of such clauses and ensure that every tiny details such as these is notified explicitly in the contract. This would give the buyer the right to sue the promoter for specific performance of the suit if the latter doesn’t keep to his promise.

The deed of sale must also contain the method (cheque, cash, demand draft) and the amount of payment that is to be made by the buyer. A payment schedule contains these details.

The buyer usually pays[6] the per sq. ft. rate based upon the total area (i.e. super built up + carpet area). Now, super built area is calculated upon other amenities provided in the complex in which the building is located. For instance, if the promoter provides common facilities like lift, swimming pool etc then the super built area is calculated as 25%-30% (depends on the construction manifesto) of the Carpet Area. Whereas if these common facilities are non existent then the super built area is calculated at 20% of the Carpet Area. Do check the construction manifesto carefully to know the exact percentage that applies to you.

For eg., If an apartment has a common lift; and the carpet area purchased is 600 sq. ft.—the super built up area would be (25/100*600=150 sq ft). In other words the buyer would have to pay to the seller a total amount on the total area of 750 sq ft (600+150 = 750 sq. ft).

            Steps for registration:

The first thing the buyer must do is engage in the process of searching the property (be it a new property or an old property). Searching has to be done before agreement of sale is drawn up between the parties. This helps in identifying possible sales that a fraudulent promoter could have engaged in. This is a critical step in the process of buying and registering a property, since there are abundant cases pending before the court where the same property has been sold to more than one parties.

The buyer has to pay the stamp duty upon the market value which is obtained from the registration office after submitting the details of the buyer and seller along with the sale agreement. Incase the property is located in one of the places where the land was given as refuge land, then the photocopy of the mother deed of the land would be required. This process is called obtaining the valuation/query[7] of the property. This is primarily a clerical work and the buyer can himself visit the registration office and get it sorted.

The query takes about three working days. After this the same has to be handed over to the advocate for preparation of the draft of the registration/conveyance deed.


The query obtained shall contain terms such as, market value, set forth value, stamp duty, registration fees etc. The amount of fees is calculated upon the market value. An additional 1% is charged if the market valuation exceeds 25 (twenty five) lakhs of rupees. Now there are two types of fees:- registration fees and stamp duty which the government receives when a property is sold/brought. The registration fees has to be paid in cash to the office and the stamp duty has to be paid by demand draft by the buyer. The Stamp duty can also be paid through electronic transfer such as NEFT. But if the buyer wishes to make the payment through the NEFT facility he would have to ensure that the payment is made within 30 days from the date on which the query/valuation of the property is procured. Whereas if he chooses to pay by a demand draft he would enjoy an extra buffer period of 14 days (the time period for payment through demand draft is 44 days). The deed of conveyance has to be printed on a stamp paper. Such stamp papers come in various valuations: like Rs. 500, 1000, 5000[8].

The procedures in between the registration date and submission of the documents in the registration office for registering the property involves making what is popularly called “volumes”. In a crude sense, volumes refers to “big green official papers” where every minute details of the property is recorded, including the names of old buyer and new buyer and such other details which the office intends to record. This is not something a buyer should be concerned with. It is primarily the duty of the advocate engaged for this purpose.. For example: If the market value of the property is 45 lakhs, then the fees is calculated @8.2 % of 45lakhs. The amount arrived at would be termed government fees. The buyer other than this has to pay the fees of the advocate which ranges from 0.5 to 1 or up to 2%. The advocate’s fees is steep when he seeks to take up additional tedious responsibilities like sorting of the following things on behalf of the client like— obtaining the query, drafting and typing the deed; paying the volume fees, the clerk fees and such other fees as is required. For more information you can visit:

The buyer is given the opportunity to propose a desired date for the registration of the property. If the office agrees to that date, the buyer has to be present at the registration office along with the seller, witness, landlord and such other persons as is required by the said office. There are two witnesses (each from the buyer and the seller) required to be present for the process of registration. The new regulation of obtaining[9] the query requires the seller to give the name of a person (known as the ‘identifier’) and his details who has to be present on the day of registration.

For those of you who find the above process (of visiting the registration office) cumbersome, there is another option called “commission[10]”. If you avail of this option, on payment of an extra fee, you could get the registrar and his staffs to come over to your place (the new property) to complete all the formalities of registration.

After the completion of the registry the buyer has to usually wait for one month to receive the original registry deed. This usually depends upon the functioning and efficiency of the registration office. But once the buyer gets the original deed of the property, he can keep it with himself. There is no legal requirement for him to deposit the deed at any government office. The position would however slightly change if the buyer seeks to obtain a loan from a bank against this newly purchase property. He would then have to deposit the original deed with the bank as a security.If the buyer loses the original deed of the property, he could get hold of a duplicate copy of the same after having registered an FIR/GD[11] and paying the required fees. This is possible because the buyers’ lawyers usually makes a photocopy of the original deed and keeps it in the office. Though this is not something that the buyer should be concerned with, it would be good for him to confirm with his lawyer if the same has been done.

 After the completion of the process of registration, the buyer has to initiate the process of mutation[12]. Mutation essentially is the process that allows you to pay property tax to the government. Every year a bill is sent from the municipality/corporation or sometimes one has to go to the municipality himself and pay the tax on a yearly or quarterly basis.

The buyer should ensure before making the final payments for the purchase of the property if the promoter has complied with all the promises he made regarding construction of the apartment. Do note that a part of sum can even be paid later[13] even after the completion of the registration process (this all depends on your negotiating abilities).

Upon taking delivery of the flat the buyer must obtain the NOC[14] and possession letter from the promoter and be verify if there are any pending taxes required[15] to be paid by the promoter. If the buyer does not get this clarified, and if there is tax amount due, upon possession of the apartment, the entire liability of payment of the taxes would shift from the promoter to the buyer.

There is a possibility of the promoter requiring you to engage the services of his designated advocate and telling you how that is a mandatory requirement under law. He could also that that it is important to do so in order to avoid potential legal problems pertaining to the property. Do note that there is no such limiting clause placed upon the buyer by law. The buyer can very well appoint his own personal Advocate for carrying out the work.

Also remember to inform your advocate who handles your income tax returns about the purchase/sale of any immovable property. If you don’t, you could fall on the wrong side of the law. The details of buying/selling of properties in a year has to be informed to ones’ income[16] tax advocate also so that it is recorded in the balance sheet[17]. It is advised that the buyer seeks the assistance of his advocate while choosing the mode of payment for the property (cheque, cash, demand draft etc).

There could be other smaller aspects (not covered in the blog post) involved in the purchase and sale of property. It is best to seek the assistance of a real estate and tax lawyer for the same before venturing out in the buying and selling of immovable property.

There are a couple of other things that you need to be aware of to avoid yourself from landing in any unpleasant situation are as follows.

A.There is a possibility of the promoter requiring you to engage the services of his designated advocate and telling you how that is a mandatory requirement under law. He could also that that it is important to do so in order to avoid potential legal problems pertaining to the property. Do note that there is no such limiting clause placed upon the buyer by law. The buyer can very well appoint his own personal Advocate for carrying out the work.

B.Also remember to inform your advocate who handles your income tax returns about the purchase/sale of any immovable property. If you don’t, you could fall on the wrong side of the law. The details of buying/selling of properties in a year has to be informed to ones’ income[1] tax advocate also so that it is recorded in the balance sheet[2]. It is advised that the buyer seeks the assistance of his advocate while choosing the mode of payment for the property (cheque, cash, demand draft etc).

There could be other smaller aspects (not covered in the blog post) involved in the purchase and sale of property. It is best to seek the assistance of a real estate and tax lawyer for the same before venturing out in the buying and selling of immovable property.


Photo Courtesy:


[1] Section 139(1) of Income Tax Act.

[2] Section 139(1) of Income Tax Act.

[1] Part III OF REGISTRABLE DOCUMENTS u/s 17: Documents of which registration is compulsory of The Registration Act available at .

[2] Hiring an Advocate is necessary as the ‘deed of conveyance’ (the official sealed and stamped document which you receive from the registration office basically saying you are the new owner of such and such property) has to be prepared based upon the agreement of sale and other documents available with the buyer and such work is entirely based upon the legal frameworks such as the present laws and other norms that have to be compiled with. The advocate also studies the agreement of sale in case of purchase of new flat and in case of resale he checks the present conveyance deed. It is prudent to allow the advocate to oversee all the above issues and avoid the possibility of incorrect statements.

Depositing the fees can also be technically done by the buyer himself but since an advocate is a regular visitor of the court, adept at handling such issues on an everyday, it is advisable that the buyer employs the services of an Advocate to check the veracity of receipts and vouchers involved in the transaction.

[3] Part V and XI of the Registration Act 1908.

[4] – Section 54 of Transfer of Property Act.

[5] Terms of contract which has been agreed between the parties under the Contract Act Indian Contract Act 1872.

[6] Municipal laws Kolkata Municipal Act, West Bengal Land Reforms Act 1955 Laws; West Bengal Premises Tenancy Act, 1997; West Bengal Estate Acquisition Act, 1953.

[7] Mainly known as the e-assessment slip issued by the Directorate of Registration & Stamp Revenue covered under PART XIII: OF THE FEES FOR REGISTRATION, SEARCHES AND COPIES under section 78 of the Registration Act.

[8] Please note that only the first page has to be purchased for such cost which is known as the stamp paper. (the other pages of the deed of conveyance are the regular green legal sheets)

[9] The office of the Registrar of Assurances Kolkata has been computerized, which now mandates supplying every minute details of the property, buyer, seller, identifier along with bank details.

[10] Section 33 and 32 of the Registration Act 1908.

[11]– Depending on the quantum of the property in question the police registers a case of FIR or GD. Both of them are valid under law

[12] Mutation of Names in the R.O.R.s (Record of Rights) under section 50 of WBLR Act, 1955 available at

[13] It can be treated as due diligence of the buyer referred under the terms of the contract which has been agreed between the parties in the agreement of sale.

[14] The is the duty of the promoter to handover the NOC and Possession certificate upon completion of payment but the buyer should be aware that he needs to receive the documents before registration is completed.

[15] The buyer before buying any property should ask for the latest tax receipt paid buy the present owner/seller. The same can be verified in the local municipality office.

[16] Section 139(1) of Income Tax Act.

[17] Section 139(1) of Income Tax Act.

Job application rejected on religious grounds: Morally reproachable but not legally culpable?

Many will be familiar with the story of Zeeshan Ali Khan, who was allegedly denied a job by a private company because of his religion. The twenty-two year old MBA graduate applied for a marketing job at Hare Krishna Exports Pvt. Ltd., a diamond export company in Mumbai. According to him, he received a response within fifteen minutes, which said that the firm only hired non-Muslim candidates.[1] Two friends who had applied with him, both Hindu, received job offers.[2] Mr. Khan posted a screenshot of the shocking email on Facebook, and the story soon went viral. An outpouring of support for Mr. Khan and criticism for the company followed on social media.  An FIR for this alleged discrimination was filed against the company, under Section 153-B (1) (b) and (c) of the Indian Penal Code 1860.  However, there is a very important question here that cannot be overlooked: Does this private company’s rejection of the application on religious grounds, however distasteful and morally reprehensible it may be, attract civil or criminal liability under the law in India as it exists today?

 In this post, I shall examine the relevant Indian law and assess whether it would apply to a situation like this one. I shall also be discussing the legal framework that exists in other countries, that addresses this serious social issue as well as any attempts in India made in the past to bring in a law that could adequately cover cases like these.

Before we turn to the law, however, it would be appropriate to bring up the social dynamics that are behind this fact situation. In a country where the relations between people of different religions has been marred with numerous incidents of hatred and often bloodshed, this incident, sadly does not come as an altogether large  surprise. To what extent religious discrimination with reference to employment exists in India cannot be precisely ascertained, however, there has indeed been some research on this topic. A study[3] that appeared in the Economic and Political Weekly in 2007 attempted to answer this question. The methodology followed by the researchers was this: The researchers collected advertisements announcing job openings in entry level positions in various private sector firms. Sets of resumes and application letters were prepared, with identical educational qualifications and work experience. All the applications purported to present strong candidates with suitable degrees from reputed universities. The only difference in the applications was that one set of applications, had in the name of the ‘applicant’ section a visibly Muslim name, while the names in the other set of applications were suggestive of individuals belonging to high-caste Hindus. (No explicit mention of religion was made) The study found that the Muslim ‘applicants’ were statistically, significantly less likely to receive a call for the next stage of the selection process than equally qualified Hindus.


The law in India

Having presented a situation where religious discrimination can play a role  in hiring, we now look at the legal scenario here. The first to be examined is Section 153-B of the IPC under which the FIR in this case was filed. Section 153 B (1) (b) penalizes, inter alia, assertions that any class of persons by reason of their religious beliefs be denied their rights as citizens of India. Employment in the private sector is not a ‘right’ guaranteed to people by virtue of their being Indian citizens. Thus it is very obvious on a plain reading that the statement made by the company would not amount to an ‘assertion’ within the meaning of this Section.  Section 153 B (1) (c) criminalizes any assertion concerning the ‘obligation’ of any person by reason of their belonging to a religious group, which is likely to cause feelings of enmity between such members and other persons. Firstly, the company’s rejection did not mention an ‘obligation’ of any kind and it seems unlikely that it can be proved that it is likely to cause ‘hatred’ or ‘enmity’ between religious groups. Thus whether a conviction will result in this case is a doubtful matter.

Another related provision is the ‘hate speech’ Section 153-A, which makes it an offence to attempt to promote enmity, hatred or ill will between,  among other things, different religious community, as well as any such conduct which is likely to disturb the public tranquility. As with Section 153-B, the language of the Section is disproportionate to this factual situation, howsoever appalling the company’s conduct was.

It is true that the Constitution of India guarantees equality before the law under Article 14 and prohibits discrimination on grounds of among other things, religion under Article 15. However these Fundamental Rights are only enforceable against the State (that is, the government, its agencies and establishments).  Thus private companies are not constitutionally bound to treat persons of all religions equally. In fact, it is possible that the Supreme Court may have actually endorsed the reverse proposition. In a Supreme Court decision[4] dated 2005, with a somewhat related factual situation, namely, persons from different religions being barred from buying plots in an exclusively Parsi housing society, it was held that the Society was entitled to do this on religious grounds, on of the reasons being that “ …Part III of the Constitution has not interfered with the right of a citizen to enter into a contract for his own benefit and at the same time incurring a certain liability arising out of the contract.”[5] 

 Thus, it could easily be argued that under the present law, the private company enjoys the freedom to contract with whomever they please. Even if a conviction does result in this case, one rather vaguely worded Section of the IPC is not sufficient to address the various permutations and combinations of situations related to religious discrimination at the workplace. There is clearly a serious need for such a law in India.


Applicable legislations abroad

Various nations such as the U.S.A, U.K., and Australia have laws that prohibit employers from discriminating against employees or prospective employees on the basis of religion.

The most prominent among these is Title VII of the Civil Rights Act[6], 1964 in the U.S.A.  Some key features of this extremely comprehensive legislation are:

  • It holds employers responsible for religious discrimination not only by supervisors but also by co-workers. Employers are duty bound to have clearly communicated policies that deal with such discrimination, train managers to deal with complaints of discrimination and make it clear to employees that such conduct is prohibited.
  • It applies not only to the hiring stage, but also to any discrimination that may take place in promotions, transfers, and related matters.
  • An interesting feature of this law is ‘religious accommodation’ which means that employers are required to reasonably accommodate religious practices of employees such as wearing headscarves or not working on a particular day of the week, unless such an accommodation causes unreasonable hardship to the employer

In a recent case[7] the U.S. Supreme Court ruled in favor of a case where a woman was denied a job because she wore a hijab, with the company arguing that such attire violated the dress code under their corporate policy, holding that this did indeed amount to workplace discrimination. In another case,[8] a settlement was arrived at in favor of a Muslim woman who wanted to wear a headscarf with her bus drivers uniform as well as a Pentecostal woman who wanted to wear skirts with her uniform instead of pants.

Therefore the U.S.A law is clearly sensitive to the various ways in which religious discrimination at the workplace may manifest itself.


Possibility of a relevant law in India in the future

In 2013, there were reports that the government would possibly introduce the Equal Opportunities Commission Bill in the budget session that year.[9] In fact, an expert committee had presented a report along with a draft bill[10] on such a proposal in 2008.  It was recommended that the proposed Equal Opportunities Commission was to be given the functions of holding inquiries into complaints of discrimination at the workplace, conciliate such disputes and support proceedings in the Courts wherever necessary, or to direct the Government to take action including prosecution against persons who had acted against the directives of this Commission. However, since 2013, this Bill has not been heard of. In 2014, there were reports[11] that this Commission would only protect minorities. This is a rather disappointing development. Indeed, minorities are more vulnerable to discrimination, however a community that constitutes a majority nationwide could very well be a minority in a State, district or locality, shifting the balance of ‘vulnerability.’ Further, religious discrimination needs to be condemned irrespective of who is committing it. Since 2014, the proposal to set up the EOC has not been heard of.



The much publicized incident has only highlighted an issue which has been substantially  prevalent in India for a long while. It should hopefully act as a catalyst to enact a law prohibiting religious discrimination even in the private sector following the example set by various countries.  Clearly, the Constitutional promise of non-discrimination is not sufficient in India where eighty percent of the workforce is in the private sector,  where discrimination is probably continuing unobstructed.[12]This is critically important in a deeply religious society like India. To those who argue that the autonomy of the private sector [1]must be respected, it must be said that what is at stake here is unity and security of the country, which should certainly take precedence.

  1. Photo Courtesy:




[3] The complete study can be accessed here:,%20epw.pdf

[4] Zoroastrian Cooperative Housing Society v District Registrar

The judgment may be accessed here:

[5] Supra, para. 16.

[6] The statute can be viewed here:


[8] United States v. Washington Metropolitan Area Transit Authority: Consent decree may be accessed here:





Three Social Security Schemes For Prosperity


Since the time Modi led government has come into force, it has been burdened with sky high expectations of reform. The Union Budget of 2015-16 was the first full budget that was presented by the newly elected government and it clearly did not disappoint us, for it gave due importance to all sections of the economy. Keeping the infrastructural development as its main agenda the budget introduced various schemes for all sectors of our society especially in the sector of health, education, pension and insurance, etc.

Bearing numerous economic problems such as inflation, global commodity price crash, etc., in mind the Finance Minister had presented a very credible budget which can be dubbed as a budget for the common man. The new Budget seemed to provide a balanced policy framework aimed at supporting everyone from the common man to the corporate[1]. The Finance Ministry announced detailed guidelines for three social security schemes in the Budget. Though anyone can enrol in these schemes and avail of its benefits, it was primarily formulated to cover workers engaged in unorganised sectors apart from the poor and vulnerable sections of the society[2]. These comprise a pension scheme and two insurance schemes for the welfare of the mass.



“Worryingly, as our young population ages, it is also going to be pension-less,” Union Finance Minister Arun Jaitley said while presenting the Budget for 2015-16 in the Lok Sabha.[3] The Budget he said was proposed to work towards creating a universal social security system for all Indians, especially the poor and the underprivileged. The GOI had a few years ago launched a pension scheme called ‘Swalamban’. Unfortunately it failed to draw enough investors. Swalamban’s failure prompted the government to launch a modified scheme.. The new scheme i.e. Atal Pension Scheme (APY) which is governed by the Insurance and Regulatory Development Authority of India (IRDA) has its focus on all the citizens in the unorganised sector who have joined the National Pension System (NPS) but are not members of any statutory social security scheme. APY entitles them to a pension ranging between Rs.1,000 to Rs.5,000 per month after 60 years of age. Each employee will be given a retirement number after registering under APY with which he can track easily track his investments. The fixed pension will be based on the contributions made by an individual.  The contributions would vary upon the age of joining the scheme. The minimum age of joining APY is 18 years and maximum age is 40 years. Therefore, minimum period of contribution by the subscriber under APY would be 20 years or more.

The benefit of fixed pension would be guaranteed by the Government. The Central Government would also co-contribute 50% of the subscriber's contribution or Rs. 1,000 per annum, (whichever is lower), to each eligible subscriber account, for a period of 5 years, that is, from 2015-16 to 2019-20, who join the NPS before December 31 this year and who are not income-tax payers.[4] The existing subscribers of ‘Swavalamban’ Scheme i.e. the old scheme would automatically be migrated to the new scheme, unless they specifically opt out of it.

The Pradhan Mantri Suraksha Bima Yojana is another scheme, which is mainly for accidental death. The risk coverage for accidental death is Rs 2 lakhs whereas for partial disability the risk coverage is Rs. 1 lakh. The benefits of this scheme are available to people in age group 18 to 70 years who have a bank account. They would be required to pay a minimum premium of Rs. 12 per annum or Re 1 per day. The scheme is set to be offered by all public sector general insurance companies and all other insurers who are willing to join the scheme and tie-up with banks for this purpose. Any person having a bank account and his Aadhaar number (linked to the bank account) would be able to avail of benefits arising from the scheme if he fills up a simple form and submits it to the bank every year before by June 1[5].

Bearing in mind low number of  health insurance penetration in India (which is only around 5% of all insurance policies and which comprises only about 13 – 15% in urban areas) the government launched another insurance scheme to provide life insurance cover i.e. Pradhan Mantri Jeevan Jyoti Bima Yojana. This scheme provides for risk coverage of Rs. 2 lakh in case of death for any reason whatsoever. This scheme is available to anyone holding a bank account and aged between 18 to 50 years. People who join the scheme before completing 50 years can continue to have the risk of life cover up to the age of 55 years subject to the payment of premium. The subscribers need to pay a premium of Rs. 330 p.a. The scheme would be offered by Life Insurance Corporation and all other life insurers who are willing to join the scheme and tie-up with banks for this purpose.

The premium under both the schemes will be directly auto-debited by the bank from the subscribers’ account and a person will have to opt for the scheme every year. He can also prefer to give a long-term option of continuing in which case his account will be auto-debited every year by the bank.

These three schemes not only provide for social security by the way of fixed pension and risk covers but also provide a tax benefit of additional Rs 50,000. As per Section 80C of the Income Tax Act[6] a person is eligible for certain deductions from his income tax if he makes certain investments and expenditures[7]. Earlier if such investments and expenditures together totalled to Rs.1,00,000 or above a person was eligible for  exemption under Section 80C, 80CC, 80CCC of the Income Tax Act. This limit has now been raised to Rs.1,50,000 per annum as per the amendment in Income Tax Act, 1961 through Finance Act of 2015[8]. A contribution upto 10% of salary or 10% of the gross total income to notified pension scheme of Central Government is only eligible for deduction.[9] Which means that the income gets reduced by Rs.1,50,000 and the persons ends up paying no tax on it at all. On health insurance premium paid for self and family a deduction upto Rs.15,000 was allowed[10] and in case of health insurance premium for parents there is an additional deduction upto Rs.15,000.[11] This deduction is now increased to the limit of Rs.25,000 for self and family and from Rs.20,000 to Rs.30,000 for senior citizens[12].



This budget seems to be a budget for the development of the poor. The new schemes are nothing but a government driven investment for fixed returns to the common man in future. But except for the tax rebates there is not much motivation for the common man to opt for these schemes.. Therefore, the government might face a little difficulty in inviting people to invest in these schemes at the initial stage. But with the flow of time and better awareness about the benefits, the additional deductions would certainly encourage investment in pension schemes which in turn will enable India to become a pensioned society instead of a pension less society.

All the contributions under these social security schemes shall be transferred from subscribers’ Jan Dhan accounts directly and the accounts will be linked with the Aadhar numbers. This not only will make it compulsory for every citizen to have a bank account but also to have a unique identity number through Aadhar Card which will give a new direction to the schemes already launched by the government. These schemes reflect the government’s intention that no person suffers from pain due to illness or old age. This will also help to realise the dream of 'One India, Great India' and bring the country on the path of prosperity through 'Sabka saath, Sabka vikas' i.e., equal cooperation and contribution from both citizens as well as the government.







[6] Deductions allowable to tax payer

[7] The investments that fall under Section 80C can be broadly classified as contributions / investments to: • Provident Fund • Public Provident Fund • Life insurance premium • Pension plans • Equity Linked Saving Schemes of mutual funds • Infrastructure bonds • National Savings Certificate


[9] Section 80CCD (1) of Income Tax Act: Deduction in respect of Contribution to Pension Account

[10] Section 80CCC: Deduction in respect of Premium Paid for Annuity Plan of LIC or Other Insurer

[11] Section 80D: Deduction in respect of Medical Insurance


Ageism: Discrimination on the basis of age


Age discrimination or “Ageism” is the discrimination of a group of people because of their age. The main victims of ageism are the people belonging to the age group of fifty years or more.  Employees from this age group often do face age discrimination, but this concept has not received attention in India yet. This blog post attempts to detail the problem of age discrimination in India, which has come to the forefront off-late.

A landmark case in the U.S. was in EEOC v. Wyoming[1], where the Supreme Court upheld the constitutionality of the Age Discrimination in Employment Act as it applies to state and local governments. The Court rules that state and local governments cannot discriminate against employees and job applicants on the basis of their age. Recently, in the case of Schmitzer v. Bundesministerinfür Inneres (European Court of Justice decision in 11 November 2015), a pay scheme for Austrian civil servants which was amended because of age discrimination, was still age discriminatory.



Age discrimination is likely to affect employees, especially those belonging to the older age group, if the workforce faces an oversupply of young people. This has a considerable possibility in a country like India where the percentage of youth work force is nearly 60 percent of the total work force. Such discrimination results in many people losing their jobs due to their age alone. This could result from either from being pushed out of a profession with headhunters or recruiters preferring younger people over more senior counterparts, being barred from applying for a post or being replaced in one’s job by a younger candidate. Age-discrimination is common in India. For example, most institutions for higher studies prescribe a maximum age limit for applicants. Previously, a person could not take the Common Law Admission Test for studying LLB unless one was below 20 years of age, however this rule has been done away with.

There are no codified laws in India however, that tackle age discrimination, either at the local or national level[2]. Since there is no codified law on age discrimination in India, there is no designated statutory body which deals with matters pertaining to age discrimination. The awareness of the need to prevent age-based discrimination is very low as well.

The Constitution of India guarantees certain fundamental rights to the citizens of India, including protection to individuals from discrimination only on the grounds of religion, race, caste, sex or place of birth under Article 15 of the Constitution of India. However, age is not included. In practice, age discrimination is actually prohibited at various levels in matters of job recruitment or retirement [3].

Under the penal laws of India, no criminal sanctions are prescribed in relation to age discrimination and thus, only civil law actions can be instituted, and even then, only in cases where discrimination on the basis of age is highly unjustified. Civil remedies may include reinstatement with compensation where a person’s employment is terminated. An example of this would be seeking corrections of an award under Section 6(6) of the Industrial Disputes Act, 1947.  According to the nature of the claim made and the category of the employee, such cases can be filed in civil courts, service tribunals or labour courts[4]. Mostly claims made in India related to age discrimination are limited to judicial precedents (Air India v. Nergesh Meerza and Others (AIR 1981 SC 1829), State of Uttar Pradesh v. Dayanand Chakrawarty (AIR 2013 SC 3066). Judicial precedents are case laws that establish a principle which can be used in subsequent cases.

Under the retrenchment laws in India, termination of employment can only be done according to a specific Act which applies to the area where the dispute arose[5].

Retirement Age

There is also the problem of retirement age. In India,the retirement age for State government employees differ. For example, in the State of Kerala, the retirement age for government employees is 55 years while in the State of Punjab it is 60 years. The age of retirement for Central government employees is currently 60 years[6] Therefore, a government employee in Punjab would have the benefit of more years of service than one in Kerala. It is for this reason that one state may attract more applicants since their years of service would be more. This indicates inequality in terms of the number of years of service of governmental service and the migration of a number of government employment candidates from one state to another. It is clear that states with a higher retirement age provide an advantage for potential applicants.Indian laws do not prescribe any retirement age for private organisations. Thus, private organisations are free to decide the retirement age for their employees, which usually is 58 to 60 years.

In the case of Air India v. Nergesh Meerza and Others[7], the issue of different retirement age of male and female crew members of Air India came up for consideration. The Honourable Supreme Court of India struck down the provision which provided that the extension of service of an air hostess beyond 35, if found medically fit, would be at the discretion of the Managing Director. While striking the latter condition, the Court held that the real intention of the makers of this regulation had not been carried out because the Managing Director had been given uncontrolled, unguided and absolute discretion to extend or not to extend the period of retirement after an air hostess attained the age of 35 years. The Court held that the regulation gave wide powers to the Managing Director which could result in discrimination. However, although the Court considered the fact that Air India had fixed the retirement age of air hostesses different from the male crew members taking into account the nature of work, prevailing conditions of service, the need to safeguard health of females, and other relevant factors, the Court negated the grievance that service conditions providing lower age of retirement to air hostesses is unfavourable or discriminatory.

In the more recent case of State of Uttar Pradesh v. Dayanand Chakrawarty[8], the Court referred to the judgment of Prem Chand Somchand Shah v. Union of India[9], in which it was held that “if employees appointed from different sources, after their appointment were to be treated alike for the purpose of superannuation under Regulation 31, and subsequently solely on the basis of source of recruitment no discrimination can be made and differential treatment would not be permissible in the matter of condition of service, including age of superannuation, in absence of an intelligible differentia distinguishing them from each other”.



However, it is important to remember that India still has such a large number of unemployed people and that it cannot afford to allow its senior citizens to keep working until they voluntarily decide to call it a day. Furthermore, it is difficult to ascertain if one’s age is the cause of discrimination at work, as it could be a problem of incompetence or experience. When there are reasonable grounds for discrimination on the basis of age, such as nature of job, location of job, etc, discrimination would be justified. Yet, a situation where, if an employee’s termination is in accordance with law or contract, and they are duly paid their severance pay and termination benefits, they can challenge the termination but not only on the basis of age discrimination, if it seems unfair to people being discriminated against[10].

Thus, a law based on age discrimination in India could be the answer to the problem of ageism.  By making it unlawful for an employer to refuse to hire because of such individual’s age; or classify or group the employees in any way which would affect his status as an employee, because of such individual’s age; or reduce an individual’s wage simply on the grounds of age, an end to age discrimination could possibly be in sight.

  1. Photo Courtesy:


[1] 460 U.S. 226 (1983)

[2] Age Discrimination, India, available at <>

[3] Business and Human Rights Resource Centre, available at <>

[4] Age Discrimination, India, available at <>

[5] Age discrimination: New phenomenon emerging at the workplace, available at <>

[6] Available at<>

[7] AIR 1981 SC 1829

[8] AIR 2013 SC 3066

[9] (1991) 2 SCC 48

[10] Age Discrimination, India, available at <>


Turning the Heat Down

From Lima to Paris:

Global warming has been on the rise. Many fear that the implementation of the 2° C limit of temperature rise that was set in the Cancun summit in 2010 might not be realised any time soon if the global participation continues to be minimal and ineffective.

This fear was confirmed when the 20th Conference of Parties (COP 20) to the United Nations Convention on Climate Change (UNFCCC) was held during 1-12 December last year[1]. The COP was held in the Peruvian capital, Lima and was attended by a host of delegates from across the world. The Lima Conference was supposed to roll out a basic architecture for the crucial COP 21 in Paris scheduled to be held in December this year. However, despite the sprawl and the pomp that usually accompanies any international conference, the corpus failed to arrive at a comprehensive binding climate change agreement and fell short of safeguarding in concrete terms any of the goals laid out in its agenda.[2]

The primal aim of the agreement that is sought to be ready by the time COP 21 takes place, is “another protocol”, that is, another legal instrument or an agreed outcome with legal force under the UNFCCC. The purpose of the protocol as expounded by the phraseology used in the decision of COP 17 (2011) in Durban—is to limit carbon emissions from all countries in order to prevent the globe from breaching the guardrail temperature increase of 2° C by the turn of the century, a limit arrived at in the Cancun summit in 2010. An Ad Hoc Working Group on the Durban Platform for Enhanced Action (ADP) was created in 2011 in pursuance of this goal.[3] Its mandate involved framing a protocol that would be put to vote in Paris and would enter into force in 2020. If there was any misplaced hope that COP 20 in Lima would take forward this task of creating a formal and satisfactory legal structure to achieve the goal laid out in Durban, it was belied.

The phrase "another protocol" is a reference to the only binding international treaty on cutting down carbon emissions that has hitherto been in place, that is, the Kyoto Protocol. It was framed in 1997 and entered into force in 2005, and its provisions and targets were based on some fundamental tenets of  UNFCCC, which required parties to protect the climate system for present and future generations, by adhering to the principles of CBDR (Common But Differentiated Responsibilities).

CBDR in essence means that all countries share a common responsibility of averting dangerous climate change; yet this responsibility is differentiated by capacity (technologically and financially) of several countries. Hence, developed countries have a greater responsibility to mitigate the effects of climate change, as they are primarily responsible for causing it and they have the capacity (greater than developing countries) to develop clean technology, to focus on cutting down emissions rather than development and helping developing countries to pursue sustainable development.

Accordingly, the Kyoto Protocol was organized such that member states were divided into Annex I (developed) and non-Annex 1[5] (developing) countries. While the former were required to commit to binding emission cuts with respect to their 1990 emission levels, the latter were not. The first commitment period ended in 2012, wherein many countries failed to meet their respective targets except for those in the European Union (E.U.), which in fact over-achieved their targets. The COP 18 Summit in Doha, 2012 recommended a second commitment period which would run up to 2020.[6] It was recommended therein that a second round of binding reduction targets ought to be imposed on 37 countries, based on historical and present-day levels of emissions. This round would act as a precursor to the major 2020 phase commencing in Paris, such that the 2° C goal could be attained in the long run.

The USA, which usually surges to get take leadership on any global issue, has in fact been the cog in the wheel when it comes to the global climate change regime. Despite being the second highest carbon emitter in the world, the USA has consistently rejected any binding commitment on the subject. It repudiated the Kyoto Protocol, which was then followed by many developed countries who also argued on the US lines that they would not accept binding commitments unless major emitters among the developing countries accepted likewise. In essence, developed countries do not wish to accept their historical responsibility of being the major cause of the present global warming and are against this differentiated emission reduction targets mandated by the protocol.

The developing bloc under the leadership of China and India has been arguing for differentiated standards for rich and poor countries, while the developed bloc has been pulling in the exact opposite direction. Therefore, for all practical purposes, the parallel exercise at climate summits to arrive at further commitments for exclusively Annex 1 countries has lost all its meaning. At Lima, too, there was not much headway on this front, and the protocol hangs in limbo today. Hence the principle of common but differentiated responsibility has been severely weathered down, thanks to the USA.

New Phraseology:

A new trend has developed since the developed versus developing bloc showdown in COP 15 (Copenhagen) in 2009. A bottom-up approach of “pledge and review” of mitigation commitments, based on voluntary emission reduction pledges made by countries, has arguably displaced the top-down legally mandated approach a la the Kyoto Protocol. The top-down approach wherein developed countries were mandated to commit to a minimum emission cut of 5% and anything above that voluntarily, was based on the principles of the convention and on what science says about emission pathways that the world needs to adopt to avoid exceeding the 2° C temperature rise limit. The new phrase in the negotiations glossaries that characterises this trend is known as “intended nationally determined contributions (INDCs)”, a term that was adopted in the COP 13 (Warsaw) in 2013.

As a result, the nature of the new protocol that delegates hope to finish drafting by COP 21 in Paris will be largely INDC-centric. It forms the core mitigation element in the draft text for the Paris negotiations and a complete abandonment of the common but differentiated standard.[7] It still remains a question as to how the principles of equity and common but differentiated responsibility will be incorporated in the bottom-up-pledges-driven approach. Further, the Kyoto involved not just mitigation (emission cuts) but also adaptation, capacity-building, technology transfers from developed to developing countries (under the Clean Development Mechanism).[8] In the several COPs of the past, there has been contentious disagreement over the scope of INDCs. Developed countries wanted the scope of INDCs to be restricted to mitigation, while developing countries wanted the INDCs to include the related elements of financial contributions and technology transfer to assist them in their mitigation and adaptation actions in the post-2020 period.

Other controversial issues

Apart from the scope of INDCs, several issues regarding the new protocol remain either completely unaddressed or lacking consensus among member states. For instance, the issue of financing for the post-2020 period,[9] the inclusion of the issue of the “international mechanism for loss and damage” to least developed countries (LDCs) and vulnerable countries due to climate change,[10] which was mandated a COP 19 decision. In a similar vein, some developed countries (mainly among the EU) proposed a system for assessment and review of the INDCs by mid-2015;[11] this was to be done so as to see whether the mitigation commitments would in fact limit the temperature rise to below 2° C. The EU wanted the 2015 agreement to have a mechanism that allowed a revisit of the collective mitigation potential.

But these proposals were rejected by developing countries. They argued that an  assessment regime was beyond the Warsaw Mandate and therefore  did not need to be done under the convention. It was further argued that such an assessment might result in the developing countries being brought under greater pressure to enhance their commitments. As a result, the Lima Conference ended in a botched and hurried compromise agreement with many countries pulling in opposite directions instead of working together.

Commitments made by major emitters leading up to COP 21

The commitment of several countries toward climate change mitigation can be fairly gauged by their INDC targets. Unfortunately, the respective announcements of these two largest carbon emitters of the world, who account for nearly 44 per cent of global carbon emissions (China 27 per cent, the U.S. 17 percent) amount to only marginal improvements over their earlier stated positions. These will barely have any substantive impact on the long-term prognosis of climate change. China recently announced in a bilateral deal with the USA that its carbon emissions would “peak” around 2030 and that it would endeavour to cap emissions even earlier. It also announced that renewable energy would account for a 20% share of all energy produced. The US, on the other hand, declared that it would cut its emissions by 26-28% by 2025 relative to 2005, which is more than what it declared in Copenhagen in 2009 and in Cancun in 2010.

Although the US never embraced the Kyoto Protocol, the US did in fact meet its target in 2012. The US has been pushing for clean technology within its borders, however not with the same kind of vigour that is seen in the EU. Further, China’s declaration of a peak year, to which it had been steadfastly opposed until a few years ago, is new and extremely welcomed. However, a peak year between 2020-25 would have been an even more significant contribution on China’s part in the pursuit of limiting global emissions to 2° C. More pertinently, the rate of increase towards the peak, when the decline would start, and the rate of decline have not been indicated. The Chinese declaration does indicate a possible earlier peaking year; perhaps one has to wait until China announces its INDCs to see whether they are ready to hold themselves to more ambitious targets than indicated in the bilateral deal.

Given its track record, the EU’s declaration of its INDCs is meaningful and reasonable. It has committed a 40% reduction of its 1990 levels by 2030. The indications from other countries such as Japan (whose emissions are likely to significantly increase because of Fukushima), Australia and Canada, whose target is aligned with the 17 per cent reduction target of the US, are, however, hardly encouraging. India, too, has stated that it is working on appropriate INDCs, which it will submit to the UNFCCC sometime this year.[12]

In conclusion, a great deal of doubt and confusion looms large over the Paris Conference later this year. Will delegates engage cooperatively and enter into a deal that will save us from the disastrous effects of climate change? Will the developed and developing blocs reconcile their differences? Will the Paris agreement, (in whatever form it will come through) compromise on the basic tenets of the UNFCC Convention? Many questions need to be answered by the COP 21. One can hope that the Paris Accord is not fraught with lacunae and weaknesses, and that it actually reflects the needs of those who will bear the brunt of climate change to the maximum degree however play no part in its initiation. The turn of this century will bring with it many events, one can only pray that one of them is a deal in Paris that saved the world!

Photo courtesy:


[1] Micheal Jacobs, The Lima Deal Represents a Fundamental Change in the Global Climate Change Regime, The Guardian (December 15, 2014), available at:

[2] Micheal Jacobs, The Lima Deal Represents a Fundamental Change in the Global Climate Change Regime, The Guardian (December 15, 2014), available at:

[3] See UNFCCC Bodies, Ad Hoc Working Group on the Durban Platform for Enhanced Action (ADP), available at:

[4] UNFCCC, Article 3.1.


[6] Famously known as the Doha Amendment. This Amendment has been ratified by only 23 countries (none of which are developed), while the Amendment requires 144 ratifications in order to enter into force.

[7] INDC Submissions of different countries (both developed and developing) building up to the Paris Agreement, available at:

[8] INDC Partnerships, available at:

[9] Nordic Council of Ministers, Accounting Framework for the Post-2020 Period, available at:

[10] See

[11] See

[12] For a detailed report on the different INDCs and India’s current potential:

Do celebrities owe us a duty for the claims they make in advertisements?

Do celebrities owe us a duty for the claims they make in advertisements?

The favorite midnight snack of many, Nestlé’s Maggi has been banned by the Food Safety and Standards Authority of India (FSSAI) because of problems associated with the quality and labeling of the product. The notices issued to various celebrities who had been endorsing Maggi noodles and the orders for lodging FIR against them have reignited an extremely important legal debate concerning the liability of celebrities for the product endorsements they make. This article discusses the duty of celebrities for their endorsements, relevant laws in India and the precedents in some other countries.


Making a case for celebrity endorsement

There are many questions which crop up when we seek to make celebrities liable for their claims in advertisements. First among them being do the people actually believe in the claims celebrities make? Are the products bought because of endorsements or are they bought first and endorsements only reassure the consumer? Well, there is no straitjacket formula to these questions unlike believed by some. It certainly depends on “the context, the product or service endorsed, the expertise of the celebrity in that area, the mass appeal of the celebrity and the reliance of individual consumer”. This brings us to a more nuanced argument. Does the fact that celebrities have a right to publicity which they harness economically while advertising, impose a duty on them to not use this right in a manner detrimental to the general public? Or since the celebrities have a right to publicity, the audience has a reciprocal right of reliance? After all, unlike the movies, the fact that the plot and characters are fictional is never reflected/shown in an advertisement. In fact the representations made by the likes of Ms. Padukone are a “cause in fact” of the pecuniary loss to the consumers to the extent of the difference between an effective gym equipment for losing one’s weight and the Kellogg’s Special K. Similar arguments can be made for every misleading advertisement. Some make a superficial distinction between the celebrities giving personal testimonies versus the celebrity playing a role in the advertisement, for instance Ms. Dixit is playing the role of a mother in the Maggi advertisement. It is argued that a celebrity should be liable only when (s)he is making a personal testimony and not when (s)he is playing a role of another. However, it is extremely difficult to accept this difference. Audience generally does not think this way when relying upon the claims. Further, as stated above, unlike films, the fictional and impersonalized role is not emphasized in advertisements, thus making no space for this argument. Another argument put forth by the people disagreeing with making celebrities liable is based on the fact that celebrities have to no way in which they can identify the truthfulness of the statement which they are made to say in the testimonial by the ad-gurus. However a simple counter to this is requiring celebrities to test, try and experiment the product to find out. Similar has been legislated upon in various countries as we will see in the next section. While this may sound a little far-fetched in the case of Maggi noodles, after all, checking the amount of lead is the duty of the FSSAI and not Ms. Dixit’s and every single pack can certainly not be checked by the celebrities, yet celebrities can certainly be made liable for making sweeping claims like a person drinking Drink X can grow twice as taller as (s)he would grow drinking Drink Y (the ad for the health drink Complan). Therefore, there remains a strong case for making celebrities liable.


What are our neighbors and partners in trade doing about it?

In the USA, the Federal Trade Commission Guidelines prohibit deceptive and misleading endorsements by celebrities and make celebrities liable for the same. The endorsers are required to reflect their “honest opinions, findings, beliefs, or experience” in the advertisements. In fact, the advertisers can continue to use the endorsements only as long as the advertiser has a good reason to believe that the endorser continues to remain a bona fide user of the endorsed product. In Europe, the celebrities follow a self-imposed code whereby they refrain from endorsing products harmful to the health of the general public like alcohol, medicines etc. Korea on the other hand has an Advertising Self-regulation Institution which issues guidelines with respect to endorsements and reviews the endorsed advertisements making false advertisements a rarity. Among our neighbors, China makes the endorsers jointly liable with the service provider for the harm caused by the product. Pakistan also has laws forbidding false and misleading advertisements, however it is uncertain whether these laws will also include liability of celebrities for their endorsements. The Malaysian Code of Advertising Practice requires that the endorsements or testimonials contained in advertisements should be based on genuine experience of the endorser over a period of time. Malaysia also has special guidelines for “[p]ersons, characters or group who have achieved particular celebrity status with children”. These celebrities are forbidden from promoting food or drinks in a manner that may undermine the need for a healthy diet however the endorsers are not liable for the same since sanctions are in the form of “withholding of advertising space from advertisers and the withdrawal of trading privileges from advertisers/ advertising agencies”. Singapore has similar laws  relating to false advertisements and is also cogitating to put into place specialized guidelines pertaining to children. In Japan on the other hand celebrities participating in false endorsements are made to apologize publicly. This harms the reputation of the endorser decreasing the employment opportunities of these people, forcing celebrities to refrain from making claims with regard to the quality or effectiveness of a product.


What is the law in India?

Section 24 of the Food Safety and Standards Act, 2006 puts restrictions on misleading advertisements. It states, that “no person” shall be allowed to engage in misleading representation concerning the “standard, quality, quantity or grade-composition” and “need for, or the usefulness” of a food product. (S)he should not make any statement which “gives to the public any guarantee of the efficacy [of the product] that is not based on an adequate or scientific justification thereof.” Section 53 of the Act describes the penalty for such false advertisements which can extend to ten lakh rupees. This penalty applies to “any person” and hence should ideally include the celebrities; however there is no case law to support this proposition. The Central Consumer Protection Council (CCPC) has also decided to issue specific guidelines to this effect after the MP High Court directed to set up an advertisement monitoring panel as per the Vibha Bhargava Commission. These guidelines if enforced will allow consumers to claim compensation from celebrities for misleading claims made regarding a product, recklessly or with knowledge that the claim is false.



The case for celebrity endorsement is a strong one considering the status which is accorded to the claims made by these stars and the money which is used in these endorsements. This has been understood across the world and many countries have laws to the effect of punishing celebrities for misleading claims. Indian laws are also developing in this regard and stars in India are becoming more aware with respect to the duty they owe to their fans. For instance recently Amitabh Bachchan stopped promoting Pepsi after a young girl questioned him as to his reasons for endorsing Pepsi which her teacher had termed as poison.