Adoption – Legal and social perception

Parenthood is the greatest blessing in one’s life.  In olden days there was a belief that if one is not blessed with a ‘Puthra’  he is not free from the NARAKA named “PUM”. We see  the practices of performing ”’Puthrakameshti’ to have a biological child. Like parenthood the family is the dream of every child. We have several stories of adoption in our mythologies.  Sita or Janaki in Ramayana was an adopted child of King Janaka.  According the ancient belief, ‘Kanyadan’ is also to be performed by every parent to attain  heavenly bliss.

Due to many reasons beyond ones control,  there are couples who cannot have their own child. But if they have a will,  they can enjoy parenthood by adopting a child. The child gets a family life and the parents enjoy the heavenly bliss in such cases. There are several legally authorised  homes  in our country, which take care of children who are devoid of parents. To hold the hand of one such child and make him a member of the family, is a most beautiful feeling and a service. The sad part is that this is  not welcomed by many cultures and families.  Many people may agree to the idea of adopting a child. But there are a lot of people who are not having a biological child and desiring to have a child to be cared and protected, show reluctance to adoption due to the cultural barriers and some social stigma imposed upon them. 

Adopting A Child In India- its legal aspects.

Every countries have their own rules of adoption.  Rules for adoption is a way to make sure that the  child has a secured and bright future. Let us examine the very important rules and procedures existing in our land.

Who can adopt?

1. A couple who wants to give a child a loving family and healthy environment, can adopt.

2. One can adopt a child under the Hindu Adoption and Maintenance Act 1956 and under Juvenile Justice (Care and Protection of Children) Act 2000 and amended in 2006.

3. Must have a reasonable and regular source of income to support the needs of the child within the family.

4. The couples should be free from  major illness that can come in the way of parenting.

5. Neither of the parents should have a criminal record.

6. The composite age of desirous adoptive couple shouldn’t exceed 90 years for infants.

7. Single parent can adopt up to 45 years of age.

8. The age difference between the parent and the adopted child should be at least 21 years.

9. If the parent is single, there should have additional family support.

Agencies For Adoption – In India CARA is the central agency to regulate adoption. They formulate the principles for adoption. Application – Prospective adoptive parent(s) should register themselves with the local RIPA / LAPA or Adoption coordinating Agency or with the State Adoption Cell The Adoption – A home study report of the prospective adoptive parents will be prepared by the social worker of the Agency. To allay the fears and apprehensions of the prospective adoptive parent(s), pre-adoptive counseling sessions will be undertaken by the social worker during the preparation of the home study report. Assessing the ability of a couple to parent a child not born to them is of crucial importance in a successful adoption. Therefore, their suitability to care for an unrelated child is assessed through this home study and counseling. Documents relating to the financial and health status of the prospective parent(s) will be part of the Home Study Report. The Agency will make a suitable reference from amongst the admitted children legally free for adoption. If no suitable child is available, the family will be referred to the ACA. After the Home Study has been accepted and approved, a child will be shown to the parent(s). The agency will take care to match a child meeting the description, if any, desired by the parent(s). In case of placement of older children (above the age of 6), both written and verbal consent of the child will be obtained.

Post Adoption

Many parents are found to be reluctant to inform the child that they are adopted. In many cases it is found that the practice have created problems in their future life. So it is better that the parents should convincingly inform the child about the adoption in the very early stage. Adopting a child is a service which is above any rules and regulations. Adoption give pride and protection to a child who till few moments back was an orphanage.  The adoption is a two way process – it gives happiness of child hood  and parenthood at the same time.

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Right of the accused in an order passed u/s 156(3)cr.p.c.

Many times it becomes very confusing that either the revision by the accused person or persons in an order passed u/s 156(3)cr.p.c. is maintainable or not and also that the order passed by the magistrate in 156(3) cr.p.c. for filing FIR and investigation is interlocutory in nature or a final order . Not only the accused persons but we lawyers get confused .But if we go through the Full bench decision of Allahabad High Court(U.P.) in the criminal revision of Father Thomas v/s state of u.p.(cr.rev. no.1640 of 2001),the things becomes very clear . In this revision the full bench was constituted and which taken five other revisions of the same matter named Lal chand maurya v/s State of u.p. and others(1731/2001), Jas Ram Kuswaha v/s State of u.p. and another(1581/2001), Mohd. Tahir and others v/s state of u.p. and others(1727/2001), Swaroop and others v/s State of u.p. and others(1656/2001), Naresh and others v/s State of u.p. and others(1658/2001). The full bench taken three main points for the consideration and among of them, the two are very important.

A. Whether the order of the magistrate made in exercise of powers under section 156(3)cr.p.c. directing the police to register and investigate is open to revision when neither cognizance has been taken nor any process issued ?

B. Whether an order made u/s 156(3)cr.p.c.is an interlocutory order and remedy of revision against such order is barred under sub section(2) of section 397cr.p.c.

Findings come out on the issues-

a. Prospective accused has no locus standi to challenge a direction for investigation of a cognizable case under section 156(3)cr.p.c. before cognizance or issuance of process against the accused .

b. The order under 156(3)cr.p.c., the police to investigate is clearly an interlocutory order and a criminal revision is barred in view of sec.397(2) of the code .

The above discussion of the constituted full bench, makes it very clear that the accused have no right of the revision against the order passed by the magistrate to investigate the matter and also the order passed for investigation is interlocutory in nature and thus again revision is barred u/s397(2)cr.p.c.

One more important issue discussed in this revision and which was-

Whether the view of the division bench in Ajay Malviyas case(supra) that an order u/s 156(3)cr.p.c. was amenable to revision, no writ petition would lie for challenging an FIR lodged pursuant to the order u/s 156(3) cr.p.c. will be maintainable, is correct?

The bench find that the view expressed by a division bench of this court in case of Ajay Malviya v/s state of u.p. and others  in 2000(41)ACC435 is not correct.

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Indianness of Constitution of India

The Constitution of India was framed by the Constituent Assembly that was absolutely Indian. An overwhelming majority of members of the body that enacted the most important document for governance of Bharat and observe Rule of Law comprised freedom fighters who had given their best to making India free. Their credentials were above reproach. Our Founding Fathers of the Constitution enjoyed the love, respect and admiration of people of India. People loved the members of the Constituent Assembly and got love in return in abundance.

FEATURES OF INDIANNESS

Language, culture, dress, education, Sanskars and above all the Mindset go to make the Indianness or otherwise of our Constitution. The vast majority of constitution makers came from villages of India. They were soaked in the soil, water and air of India. Regretfully they were not allowed to have their say in matters constitutional.

Leaders like Jawaharlal Nehru, Sardar Vallabh Bhai Patel, Dr Rajendra Prasad, Dr Bhimrao Ambedkar and many legal luminaries of the Aiyyar and Iyengar Tambram intellectual clans dominated the   proceedings of the Constituent Assembly from A to Z. The semi-literate Ram and Ghanshyam, men of peasant stock who were in an overwhelming majority in the Assembly, followed no English, what to say of legal lingua franca in a foreign tongue. Their presence in the Hall was the only contribution that they could make. Thus the Constitution of India in its final shape did not have an imprint of the People of India, the rural India, the India of the Vedic culture or the Ganga-Jamuni composite culture, notwithstanding the fact that it was enacted, adopted by the People of India and promulgated by the People of India just two months after enactment and signing by one and all concerned with it.

The Constitution was a finished product in a book form on 26 November 1949. It was adopted on 26 January 1950 and then the same day the Republic of India came into being. Dr Rajendra Prasad who was President of the Constituent Assemby, was dy eected as the first President of the Republic of India.

One regrets to note that despite all factors being favourable to India and Indians, the Constitution of India lacked an Indian soul that was needed to make it effective at the ground roots level. Our Vedic heritage was touched with a barge poll but there was no deep penetration in Spiritualism. Borrowing from the West where a camour for separating the Christian Church from the State was heeded to and the State was a votary of Secularism At a later stage Secularism was incorporated in our Indian Constitution too but here it was interpreted by successive Congress governments as an Article for protection of the Muslim minority reducing them to the status of a vote-bank.

The Constitution of India failed the litmus test of being Indian in character. It was everything but a document for the People, by the People and of the People of India that is Bharat. The vast majority of peope lives in villages and yet the villages are as neglected today as they were under the foreign rule. The focus was on the cities and urban areas and that caused a migration from the rural areas to the urban areas creating a myriad problems.

What a pity that the members of that august body, the Constituent Assembly failed to give just one Indian name to the motherland. It is called India that is Bharat in our Constitution and other legal documents. India remained but Bharat receded into anonymity.

The founding fathers of the Constitution of India were in favour of adopting just one national anthem – Vande Mataram. What a shame the present national anthem jana gana mana came from behind riding the shoulders of Jawaharlal Nehru and usurped the throne. The whole country regrets that dacoity till this day. Nehru did so just to please a section of the Muslim minority, ignoring the numerically superior Hindus of Bharat, jettisoning VANDE MATARAM and superimposing a Tagore written song that the vast majority of Indians believes  was written as an eulogy for King George V when he visited the British India in 1911. We have to live with that disgrace forever, thanks to Nehru’s monumental folly.

Dr Rajendra Prasad, President of the Constituent Assembly and a down to earth scholar and legalluminary sensed the mood of the House and the Indian Nation and said that Vande Mataram will be the National Song of India and shall have the same stats as the trumped up national anthem. That solemn promise remained on paper only and the inspiring anthem of the struggle for independence days gradually faded into oblivion.

As a commentator on Akashvani and Doordarshan, now on the ZEE NEWS on the Independence Day ceremony at the Red Fort and the Republic Day Parade on the Raj path, I always miss the good old VANDE MATARAM that I had sung along with other students on many a march against the British imperialism on road to freedom. The British Police beat up boys of senior classes, threatened juniors like me with sending a letter of complaint to parents but we marched on relentlessly. When the seniors fell to the lathi blows, we juniors held the Tricolour and rented the sky with our patriotic chants and slogans- Vande Mataram, Vande Mataram. Even the British sergeants looked at us in awe, used abusive language but stopped short of beating boys of junior classes. Freedom came sans the song of freedom.

It was the devilish design and a shameful act of those who appeased the anti-national elements by banishing the national song from the State ceremonies just to retain political power in their hands. Who cares for the country? Who cares for the Constitution? Who cares for the people? Not the ruling elite of political bigwigs and some families who became Pretenders to the Throne.

FEATURES OF OUR CONSTITUTION

The Constitution of India is a written document and is relied solely on its text by the judiciary. Although the Hindi text is the authentic text of the Constitution of India, it is the English text that rules the roost and is relied upon by judges and advocates in many a legal battle fought in courts of law. Unlike the British constitution which is by and large convention and tradition based and is in a written form to a minor degree only, the Indian constitution gives a little leeway to judicial interpretation where written word is clear in its intent. Indeed the Supreme Court and the High Courts have the constitutional mandate for a Judicial Review and their interpretation is not only the Last Word in the matter but also lays down law of the land.

The Judiciary ensures that the country is governed by the provisions of law and that the Rule of Law is respected and obeyed always. The Indian   jurisprudence, that relies on the Anglo-Saxon and Roman jurisprudence, lays down:

HOWEVER HIGH YOU MAY EVER BE,

THE LAW IS ABOVE YOU.

The Fundamental Rights and the Directive Principles are a part of the Constitution of India. It has 395 Articles and Nine Schedules. With the result, the Indian Constitution is a bulky book, difficult to carry and harder to understand in letter and spirit. It falls on the strong shoulders of the Indian Judiciary to interpret the Constitution of India for the benefit of the People of India.

The Artices, Schedues, Clauses and Sub-clauses are so complicated that even judicial brains are perplexed and confused many a time, what to say of Sepoy Bhup Singh of the Indian Army who rarely knocks at the door of a Temple of Justice, even if he is wronged and feels aggrieved. It is well nigh impossible for a common man to get Justice since it is so expensive that he cannot afford it in this life.

Nevertheless the Constitution of India is the sole authentic document the legal fraternity relies upon. The leaders of the opposition parties who are incarcerated by the party in power every now and then have no option but to knock at the door of the High Court of the State where the cause of action occurred or at the Supreme Court if a number of States are involved. More often than not the underdog gets grievances redressed and is released from prison forthwith unless detained in some other case of infringement of law of the land.

As a student of the University of Allahabad it was my privilege to watch the proceedings of a case of Habeas Corpus under article 226 of the Constitution of India when the Socialist leader of eminence, Dr Ram Manohar Lohia was detained by the government of Uttar Pradesh for no rhyme or reason. Under orders of the High Court of Allahabad, Dr Lohia was brought from the central prison and in parts he was permitted to argue his own case in addition to what his counsel had said. Dr Lohia had read out the views of eminent thinkers and philosophers from all over the world like Hobbes, Thoreau, Rousseau and Chanakya to plead that he had exercised his  right of freedom of thought, expression, unrestricted movement without endangering the life, limb, property or any other constitutional right of another Indian citizen. The government could not produce any reliable evidence to support its case of detention of the leader and the logical deduction was that the govt had exceeded its powers and put restriction on the constitutional rights of Dr Lohia. Their Lordships allowed the petition and set Dr Lohia free. Indeed it was a landmark judgement reiterating the constitutional rights of a citizen and the judiciary was applauded as a protector of the Constitution of India.

VEDIC VISION

TRUTH, EQUALITY, LIBERTY, FRATERNITY, NON-VIOLENCE LEADING TO AN EGALITARIAN SOCIETY ARE SOME OF THE PILLARS OF VEDIC VALUES OF LIFE ON WHICH THE VEDIC SAMAJ EXISTED AND RESTED.

I am glad to note that the present Constitution of India promulgated on 26 January 1950 has incorporated quite a few them. Some of them got diluted over a period of time when values of life were thrown overboard and self-seekers put self before the society. The apple cart of Vedic vision was over-turned and the same degeneration set in post independence as had set in post-Mahabharat period of history.The words in Sanskrit in the Devnagari script written under the State symbol are: satyamev jayate, it means that the TRUTH alone shall prevail. The Vedic philosophers like Shankaracharya, Manu Maharaj and Maharishi Dayanand Saraswati have laid an emphasis on the TRUTH as the foundation of an ideal human life. In the TEN Principles of the Arya Samaj, there is an emphasis on the Truth among five of them.

Some commentators are of the opinion that the State symbol should have carried the correct quote: Satyamev Jayate nanritam – THAT IS THE Truth alone shall prevail but NOT the UNTRUTH. Unfortunately, only the three lions form the State emblem and the Sanskrit words from the Mundak Upanishad got deleted over a period of time. But a revival of the quotation is in the offing.

It would be appropriate to mention that the four lions are taken from the Sarnath Buddhist edict pillar erected by Emperor Asoka but only three are seen in print. It was a penchant with Nehru to go for symbols of other religions like the present one but keep the principles of the Vedic Dharm at bay. Little did he realise that weakening the hold of the Hindus on State authority will weaken the majority community and that in turn will weaken India that is Bharat. Now the writing is on the wall for everyone to see.

CONSTITUTION A SOULLESS ENTITY

The constitution is quite an idealistic one as it promises Heaven but does not deliver even mundane minor goods. There have been numerous amendments as the Congress government was, generally speaking, bent upon to undo whatever the judiciary did to uphold the rights of the wronged citizens. In Indira Gandhi’s time of prime ministership, her government had even superseded three judges of the Supreme Court just because they exercised their right to deliver unbiased judgements and did not toe the line of the government like a subservient magistracy. The whole world had criticised this unholy act of the government of India and thereafter the govt did not repeat its folly.

Now the Judiciary is so assertive that they do not let the Executive (read government) come anywhere near the selection process of judges of the High Courts and the Supreme Court. There is a Collegium of the Chief Justice of India, two senior most judges of the Supreme Court and Chief Justice of the High Court concerned where a judge is to be appointed. When the Collegium of Judges recommends names, the govt just issues the appointment  letter. The Executive is quite cut up on this assertive move of the Judiciary but as per the Constitution is powerless to act in the matter. The Judiciary is running the Executive show in many a matter because the govt is gripped with a paralysis of making policy decisions.

On making a critical assessment of the effectiveness of the Constitution, legal brains find that it is quite a hotch- potch. There is no fragrance of THE SOIL OF INDIA in the Constitution of India. To start with, the Constituent Assembly relied heavily on provisions of the Government of India Act 1935 that the then British govt had promulgated for a gradual transfer of power to the Indians. With the result certain constitutional posts were saddled with powers that should have devolved on the elected Executives. The State Governor even now recommends dismissal or continuation of an elected govt, including the Chief Minister, of a State.

Our Constitution had borrowed systems from other countries too although the circumstances, the people and the ground realities did not match. The Vedic values of life listed earlier were listed as the Guide but were thrown overboard when it came to working out the nitty-gritty of actual working of the system of governance. Undue importance was given to the rights of minorities and that fuelled anti-national activity among some elements who were inspired by their co-religionists from across the western borders. Thus the mixed provisions of constitution left the Indian intelligentsia a confused lot and the Founding Fathers got a bad name unnecessarily. The way to hell was paved with good intentions.

Here is a brief review of what we borrowed from where. The Parliamentary system of governance, the separation of powers between the Legislature, the Executive and the Judiciary with checks and balances to keep each other within bounds was a brilliant idea borrowed verbatim from the United Kingdom. The UK has a long tradition of People exercising Power since 1215 when King John was forced by the Barons to sign on the dotted line of Magna Carta. Thereafter, the parliamentary democracy evolved with maturity over many centuries. The British Parliament is likely to enact in 2011 The Right To Recall of the MPs if they have a serious brush with law. The voters wil exercise this right for the first time in UK. Anna Hazare, the Indian social activist is pressing for the same Right to Recall for the Indian voters too.

India had the inheritance of Vedic Ganarajya system and the sagacity to implement it but the then political leadership of Nehru’s ilk were so British oriented in their thinking that they abhorred their forefather’s legacy. The nation paid dearly for this fallacious thinking. Nehru took pride in being branded as the last Englishman to rule India on behalf of the British Crown.

The principles of the Fundamental Rights and the over-riding factor of Judicial Review to keep the autocratic Executive in check were borrowed lock stock and barrel from the Constitution of the United States of America.

The Directive Principles of the Constitution were borrowed from the Irish Republic but rarely implemented. The Directive Principle of Common Civil Code for all Indian citizens irrespective of their religion or faith was put in the cold storage lest the Congress party lost Muslim votes as they were   opposed to the very idea of a Common Civil Code. Fortunately the then British government had implemented the Common Criminal Procedure and criminal Law otherwise the spineless Congress govt would have conceded to the Muslims their right of governance under the Sharia Law.

Under the influence of the Communists, the Congress government had amended the Constitution to add the Fundamental Duties on the pattern of the Constitution  of Russian Federation.

The Supreme Court of India has come to the rescue of the hapless Indian citizen and Ruled once and for all that no amendment can be brought by the govt that may alter the basic character of the Constitution. Their lordships of the large Constitution Bench also said that in case it was deemed necessary by the government to alter the basic character of the Constitution, a new Constituent Assembly should be elected and mandated to alter the basic character.

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Exemption from filing Original Documents in Suits: Delhi High Court

Justice Rajiv Sahai Endlaw in a recent unreported Judgment has dealt with the power of the Court with relation to permitting a party to a civil suit to file only photocopy of the document and exempt such party from placing the original document on the file of the court and merely to give inspection thereof to the opposite party at the time of admission/denial of documents and at the time of tendering the document into evidence and to put the Exhibit mark again on photocopy on the file of the court.

While discussing the advancement of science and technology, the Court held;

7. At the outset, I must state that, to hold that there is no power whatsoever in the court to exempt placing of the original document on the file of the court on the condition of the party offering the same for inspection in the court as and when required, is not found by me to be in consonance with the principles of convenience and expediency and with the times. The courts, increase in number whereof has not kept pace with the increase in population and development of trade and commerce which also leads to increase in litigation, are today over loaded and facing a crunch not only of manpower but also of shere physical space and infrastructure. The court buildings/premises/infrastructure which were built and designed for a certain volume of litigation, are falling far short of the number of legal cases transacted therein. The persons handling the court files and/or the papers filed in the court work under tremendous time constraints and pressure and cannot be expected to take care or safety and preservation of the papers in the court file, as one would of his own. The papers filed, for being retained on the court file are punched not once or twice but several times. Often the papers are found to come loose from the court file and/or on repeated handling with torn corners. The documents which may be required to be filed in a lis may not merely be magazines or invoices as in this case but may be title documents to the immovable properties of the parties or of financial investments of the parties or as to educational qualifications/experience of parties and which may be irreplaceable qua the parties and loss/damages whereto may depreciate the value of the property/financial investments of the parties. The question posed above has to be adjudicated keeping all the said factors in mind and not merely the documents in the present case.

8. The courts today have undertaken an e-project, the vision whereof is a paper less court. Of course, the same is still a far cry. However, that being the vision, the law must evolve in consonance therewith and not to create impediments/obstacles in the same. In many countries, the filing of lis/claims in the court is through electronic media only without the advocate or the litigant physically visiting the court or filing a single paper therein. All this is not possible if insistence is made on filing of the original documents. It is possible today to scan the document and e-file it with the court and to simultaneously serve it on the opposing parties.

9. I am, therefore, of the view that if the provisions of the codified law so permit, it would be expedient to, where the court finds that the original document is such, the loss or damage whereto could cause irreparable loss or inconvenience to a litigant, to allow such original to remain in the safety of its owner/possessor and to allow filing of photocopy thereof only, with a condition on the party to produce the original for inspection as and when required.

10. Yet another reason which prevailed on me for even before considering the provisions of law find the aforesaid to be more reasonable, was the advancement in science and technology which today allows the photocopy of the original to be as good/clear as the original, if not clearer. A number of times, it is difficult to distinguish between the original and the photocopy. Gone are the times when copies of the original were made manually either in hand or in type with inherent possibility of differences between the two. In those times, seeing the copy could not be the same as seeing the original. One could not have the impact of seeing the original by seeing such a copy. However, the process of photocopying has changed all that. The ocular inspection of a photocopy of a document is as good as of the original. The laws which were drafted in those times have to be interpreted in consonance with the present times and technology.

While discussing the relevant provisions of law, the Court observed that;

20. The next questions which arise are, as to whether under Order 13 Rule 1 of the CPC the original document has to be placed on the file of the court or to be merely given inspection of for admission/denial of documents; whether the Evidence Act while providing for proof of documents by primary evidence requires filing/placing of the original document on the record of the court.

21. There can be no manner of doubt that the Evidence Act providing in Section 64 thereof of proof of documents by primary evidence only means proof of the original document. Even though Section 62 defining the primary evidence as meaning the document itself, does not state original document but since Section 63 while defining secondary evidence includes “copies from the original” and “copies made from and compared with the original” it necessarily follows that only the original is primary evidence.

22. However, most importantly, Section 62 is as under:

62. Primary Evidence – Primary evidence means the document itself produced for the inspection of the court.

Thus even at the stage of proof, the requirement is only for production of the original for inspection of the court and not of filing of the original in the court. It cannot be argued that production for inspection of the court has to be necessarily by placing it on the file of the court. It can also be by producing it as and when directed by the court for inspection thereof.

23. When at the stage of proof of documents, the requirement under Section 62 of the Evidence Act is only of production of original for inspection of the court, Order 13 Rule 1 of the CPC requiring production of originals has to be necessarily meant as production of original for inspection of the court and not as filing of the original. Significantly, Order 13 Rule 1 also uses both expressions “produce” in connection with original and “filed” in connection with the copies. The different expression used, together with definition/meaning of produce cited by Counsel for plaintiffs also lend me to hold that the original documents are only intended to be produced i.e. to be given inspection of while the copies are to be filed.

24. I, therefore, find that the scheme of the aforesaid legislative provisions also permits production of originals for inspection only and filing of copies only.

25. However, Order 13 Rule 4 CPC and the practise directions in the trial of suits issued by this court, also provide for making of endorsement on documents admitted in evidence. The document which is admitted in evidence is the primary document i.e. the original. Is the endorsement of exhibit mark to be made on original only which would again mean placing it on court record? In my view No. These provisions are procedural. When the substantive law permits only production for inspection of original, once that has been done, the endorsement/exhibit mark can be put on copy on court record also.

26. The aforesaid should not be understood as laying down that in all cases the filing of photocopies is enough. If the document is doubtful or for any other reason required by the court to remain in original on the file of the court, the court can always direct so and a party cannot insist on filing of copy only. There may be other instances where filing of the original is necessary, as in the case of documents like Will, Agreements which may be terminated/cancelled by destruction. The courts can in such cases insist upon the original being filed on the record.

27. I, therefore, answer the question posed by me in opening paragraph in the affirmative and in law there is no impediment to granting the application.

28. The next question is whether in the facts and circumstances of the present case the application should be granted. Though the arguments of the Counsel for the defendant of it being possible to file magazines/article in original in as much as several copies of the same can be available is attractive but impractical. In the normal course, a litigant may not retain a large number of copies of the magazines/articles and may retain a single or a few copies only for future use. It is very difficult for a litigant to long after the date of publication approach the publisher for other copies of the newspapers, magazines and articles. The same is the position of the invoices. The various laws i.e. the Income Tax Laws and the Companies Act provide for the duration for which the records are to be preserved. The parties may beyond the said terms retain a few/sample records for further use. It thus cannot be said that same invoices can be filed in each court.

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Can the Bank adopt unfair/illegal methods to recover its due?

Recovery of its due has been a hectic exercise for the Banks in the absence of a special legislation. ‘Non-performing Assets’ were growing and a need was felt to reduce the ‘Non-performing Assets’ of the Banks drastically. As the recovery through Courts was a difficult exercise for the Banks, initially, a special legislation called ‘The Recovery of Debts due to Banks and Financial Institutions Act, 1993’ was enacted creating a Special Tribunal called ‘Debt Recovery Tribunal’. Under the Act, the Banks are entitled to approach the Tribunal by filing an ‘Original Application’ which is similar to filing a suit in Civil Court proceedings. However, unlike the ‘Civil Court’ which is supposed to follow the ‘Civil Procedure Code’, a special and simple procedure has been prescribed under ‘The Recovery of Debts due to Banks and Financial Institutions Act, 1993’. At the end of adjudication, the Tribunal is supposed to grant a certificate called ‘Recovery Certificate’ infavour of the Bank crystallizing the amount to be recovered from the borrower and it is like a ‘Decree’ granted by a Civil Court. There was a mechanism attached to the Debt Recovery Tribunal to conduct execution proceedings pursuant to the grant of ‘Recovery Certificate’. Thus, with ‘Recovery of Debts due to Banks and Financial Institutions Act, 1993’, the Banks were enabled to recover their dues speedily through the proceedings before the Special Tribunal called ‘Debt Recovery Tribunal’.

However, the object of reducing ‘Non-performing Assets’ could not be achieved even after enacting ‘Recovery of Debts due to Banks and Financial Institutions Act, 1993’ and as a result, another legislation on the similar field was enacted and it is ‘The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Called ‘SARFAESI Act’ in short)’. Under SARFAESI Act, 2002, the Bank can determine the outstanding due after noting the objections from the borrower/guarantor if any and can proceed against the ‘secured asset’ by taking physical possession of the same and initiating auction proceedings in accordance with the provisions and the SARFAESI rules. Under SARFAESI Act, the Bank need not approach the Courts for getting the due crystallized as it will do everything on its own and the only occasion for the Bank to approach Court is under Section 14 of the Act seeking police assistance etc. while taking physical possession of the ‘Secured Asset’. The borrower or any person aggrieved is provided with a right to question the action of the Bank under SARFAESI Act, 2002 by filing an appeal to the Debt Recovery Tribunal under Section 17 of the Act. On different provisions of SARFAESI Act, 2002, the Courts have passed some land-mark judgments making good balance between the object of SARFAESI Act, 2002 and the interests of the borrower.

Few brief points, pursuant to the judgments of Constitutional Courts on SARFAESI Act, 2002, are as follows:

1. While upholding the constitutional validity of ‘SARFAESI Act, 2002’, Courts have made it very clear that the Bank is supposed to apply its mind to the objections raised by the Bank and the reply to the Borrower has been made as ‘mandatory’ and subsequent to the intervention of direction from the Court, section 13 (3A) was inserted.

Criticism: While appreciating the concern of the Courts in the interests of the borrowers, many also continuously criticize as to how the Banks follow the directions or implement the provisions. There are critics arguing that the it is very difficult to know as to whether the Bank has applied its mind or not while replying the objections raised by the borrower under section 13 (3). There is also a criticism that the reply from the Bank may not have any value, though the object is good theoretically. Because, the reply from the Bank to the borrower, will not enable the borrower to question the same in any Court unless the Bank issues a notice to the borrower under Section 13 (4) which is normally referred as ‘Possession Notice’.

2. The Courts have made it very clear that the borrower can raise all his objections before the Debt Recovery Tribunal in an appeal under section 17 of the Act. The scope of enquiry has literally been expanded by the Courts and the ‘Debt Recovery Tribunal’ can not confine its enquiry only to the procedural issue as to whether the Bank is right in following the procedure. Consequent to the expansion of scope of enquiry, the scope of powers of ‘Debt Recovery Tribunal’ were also expanded to some extent.

3. Courts have come very heavily, from time to time, on procedural irregularities committed by the Bank as each provision was backed with certain object. This is very laudable.

4. Initially, it is understood that the Borrower can only question the possession notice issued by the Bank under Section 13 (4) of the Act. However, the Courts have consistently held that all measures taken by the Bank under Section 13 (4) of the Act are appeallable before the Tribunal. This is very important issue and Bank is in no way gets prejudiced if the borrower is given a right to question all measures taken by the Bank. In the absence of such a provision pursuant to Court’s intervention, the borrower is left with no remedy when his property worth 1 crore is sold for a meager sum of 10 lakhs by the Bank. In no stretch of imagination, it can be said that the Bank always acts fairly as it is a Public Sector Undertaking and which may not have any motives.

The most important thing to be discussed is as to whether the Bank can act unfairly or illegally in the course its recovery of money. It may be true in some cases where the borrower tries to trouble the Bank in getting or recovering the outstanding due. No action of the borrower can trouble the Bank if it holds a right over ‘Secured Asset’ and if there is ‘Secured Asset’. Banks are provided with a special legislative set-up, though drastic, to recover its dues. Banks can not complain at the special legislation enabling it to recover its due and the borrower keep complaining at this special legislation and they keep calling it as ‘draconian’.

With this back-ground, the Banks are not entitled to act unfairly or illegally in the course of recovery of money. The delay tactics, at times, adopted by the borrower is no excuse for the Banks as to why it has not acted fairly as every Public Sector Bank is supposed to act fairly and strictly in accordance with law.

I would like to give an example as to how the Banks too can trouble the borrowers using the stringent provisions of SARFAESI Act, 2002 and it is as follows:

Facts:

A borrower avails various loan facilities including an agricultural loan from a Bank and the various loan facilities are extended to many family members. Only one member of the family oversees all these credit facilities from the Bank. It was a ‘secured loan’. The sole member/borrower who has maintained all the loan accounts from the Bank has expired and other family members are not aware of the loan facilities granted by the Bank fully. However, the family members came to know about the existence of loans with the Bank. The Bank has also sent demand notices under section 13 (2) while main borrower was alive. The family has also realized that the ‘secured asset’ was already transferred or sold without any knowledge to the Bank. The family members have conveyed all facts to the Bank and wanted to settle all ‘loan accounts’ and they have requested the Bank for a ‘One-Time Settlement’. The Bank has agreed for a ‘One-Time Settlement’ and receives the full amount under OTS. After the receipt of money from the borrowers, the Bank sends a communication to the borrowers saying that the ‘OTS acceptance’ is cancelled as the OTS was not in accordance with the regulations.

After canceling the OTS, the Bank issues notices under section 13 (4) of the Act clubbing all loan facilities, however, splitting all loan facilities, into two sets.

The family members of the borrowers are literally shocked. Now, the Bank proceeds under section 13 (4) without referring anything as to what has happened in-between and balance outstanding is claimed under section 13 (4).

Analysis:

1. Bank is supposed to take every-care while accepting the OTS and it can not cancel the OTS after receipt of substantial money from the borrower. Its an unfair practice unless the facts are such that the OTS cancellation is justified.

2. Bank will be clubbing all loan facilities, but issue notices as it likes. Sometimes, there can be one notice and there can be separate notices also despite the fact that the ‘Secured Asset’ is one and the same. When it issues ‘separate notices’, the borrower will be finding it extremely difficult while approaching the Courts or the Tribunal and they may be asking the borrower to file different Appeals or Cases though the entire transaction is same in substance.

3. The object of giving demand notice and seeking objections from the borrower is in line with the principles of natural justice and fair play. If much water is flown in between the notice under section 13 (2) and section 13 (4), the Bank is supposed to start the proceedings again under section 13 (2) and so that the borrower can raise his objections. But, this remains a complicated issue again.

4. The Borrower is entitled to ask for a ‘Specific Performance’ of OTS terms, however, it can be done in Civil Courts. DRT can say that it is not concerned with the OTS issues and even the High Court may ask the borrower to approach the Tribunal under section 17.

Like-wise, the borrower may also be facing lot of difficulties if the Bank misuses the provisions of the SARFAESI Act or intends to trouble the borrower. Irrespective of the object of SARFAESI Act, there is no justification whatsoever for the Banks or Public Sector Banks to act unfairly or act in a manner which is prejudicial to the borrower.

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Innocent purchaser cannot be disallowed ITC for non payment of tax by seller-Landmark Judgement

The Punjab & Haryana High court has delivered a landmark judgement namely Gheru Lal Bal Chand Vs. State of Haryana and another on 23/09/2011 disposing off 26 writ petitions challenging the constitutional vires of section 8(3) of Haryana Value Added Tax Act, 2003 and Rule 20(1) and 20(4) of Haryana VAT Rules and the consequent assessment orders.

The Common issue involved in these writ petitions was with regard to denial of Input Tax Credit by the Assessing Authority on the ground that the dealers from whom the petitioners have purchased goods, have not deposited full tax in the State Treasury. The purchasers-petitioners have not been held entitled for deduction of Input Tax Credit in terms of the provisions of Section 8(3) of the Haryana Value Added Tax Act, 2003.

The Hon’ble High Court has held that no liability can be fastened on the purchasing registered dealer on account of non-payment of tax by the selling registered dealer in the treasury unless it is fraudulent, or collusion or connivance with the registered selling dealer or its predecessors with the purchasing registered dealer is established.

Statutory Provisions: Section 8(3) of Haryana VAT Act, 2003 and Rule 20(1) and 20(4) of Haryana VAT Rules are being produced herebelow:

Section 8. (Determination of input tax)

(1) … … …

(2) … … …

(3) Where any claim of input tax in respect of any goods sold to a dealer is called into question in any proceeding under this Act, the authority conducting such proceeding may require such dealer to produce before it in addition to the tax invoice issued to him by the selling dealer in respect of the sale of the goods, a certificate furnished to him in the prescribed form and manner by the selling dealer; and such authority shall allow the claim only if it is satisfied after making such inquiry as it may deem necessary that the particulars contained in the certificate produced before it are true and correct.”

Rule 20 [Form of certificate by a selling VAT dealer. Section 8(3)] :

(1)The certificate referred to in sub-section (3) of section 8 shall be in Form VAT-C4 and shall be furnished by the selling vat dealer to the purchasing VAT dealer in respect of sale of taxable goods made by him to the purchasing dealer on tax invoice when the tax payable under the Act on such sale has been paid by him in full.

(2) xxxxxxxx

(3) xxxxxxxx

(4) The liability of a selling VAT dealer to pay tax on sale of goods by him to other VAT dealer on tax invoice shall not abate if he fails to furnish or furnishes a false certificate referred to in the foregoing sub-rule to the purchasing VAT dealer and tax for this reason has been realized from the latter but if the selling VAT dealer later pays the tax due from him, the liability of the purchasing VAT dealer shall accordingly abate and he may, within three years of finalization of his assessment, claim refund of tax paid by him.

In nut shell Section 8 of the Haryana VAT Act, 2003 read with Rule 20(1) and 20(4) of Haryana VAT Rules makes the purchasing dealer liable if the selling dealer has not paid tax with the Government treasury after collecting the same from the purchasing dealer.

Brief Facts of the case: The petitioner is a partnership firm under the name and style of M/s Gheru Lal Bal Chand, engaged in the business of sale and purchase of cotton. The petitioner procures material from different persons and sells the same in terms of the provisions of the relevant Act and the Rules and the tax which is paid by the dealer after deduction of Input Tax Credit is paid in the treasury. The firm is registered under the provisions of Act as well as the Central Sales Tax Act, 1956 (in short, the ‘Sales Tax Act’).

As per the petitioner, the scheme under the Act is that on the sale of goods, tax calculated would be treated as “output tax”. But if the purchases are made from within the State of Haryana, the tax paid on such purchases is to be set off from the out-put liability and resultant tax liability is paid by the selling dealer. The assessing authority observed that the petitioner was not entitled for deducting input tax credit as per provisions of Section 8 of the Act, because the Value Added Tax (VAT) dealers from whom the petitioner had purchased certain goods had not deposited the full tax in the State Treasury. The stand of the dealer, however, is that it made bona fide purchases from the selling dealers who were duly registered by the Assessing Authority under the Act and irrespective of the fact, whether they paid full tax or not, he should be allowed the necessary input Tax Credit. The said selling dealers discharged their tax liability and deposited the tax payable by them by deducting the input tax credit available to them.

Contention of the Petitioners: On behalf of the petitioners not only the assessment oders but also the conbstitutional validity of Section 8 of the Act read with Rule 20 of the Haryana VAT Rules have been challenged.

It was contended on behalf of the petitioners that Section 8(3) of the Act read with Rules 20(1) and 20(4) of the Rules are arbitrary and inequitable. It was argued that the registered selling dealer who collects tax from the purchasing dealer acts as an agent of the Government and, therefore, no liability could be fastened on the purchasing dealer for any default committed by the registered selling dealer in not depositing the tax so collected. To support this submission  the following observations of the Apex Court in Corporation Bank v. Saraswati Abharansala and another, (2009) 19 VST 84 (SC) were relied upon:-

“Sales tax is leviable on sale of goods. It must be collected by the dealer as an agent of the State at such rate as may be specified. Neither the State nor the agent is entitled to collect tax at a rate higher than specified.”

The above contention was also supported with the observation of Supreme Court in State of Punjab and Others V Atul Fastners Ltd., (2007) 4 SCC 471.

Another contention raised on behalf of the petitioners was that no liability could be fastened on the petitioner on account of non-deposit of input tax received by the selling dealer from the purchasing dealer as the term “paid”[under Rule 20(1)] is to be interpreted to mean “ought to have been paid” as held by the Supreme Court in Sanjana, Assistant Collector of Central Excise, Bombay and others v. The Elphinstone Spinning and Weaving Mills Co. Ltd., AIR 1971 Supreme Court 2039.

Thus it was contended on behalf of petitioners that sub-rules (1) and (4) of Rule 20 of the Rules and Form VAT C-4 are arbitrary prescribing thereunder requiring the purchasing dealer to establish that the contents thereof are true. Meaning thereby, for the assessee to establish that the registered selling dealer has deposited the tax collected from the purchasing dealer is an onerous condition which is not capable of performance as the purchasing dealer has no control over the registered selling dealer or its predecessors. It was next urged that the State has all the machinery at its command to effect recovery from the real defaulter and no person other than the defaulting person can be penalized for some body else’s lapses.

State can be held entitled to enforce recovery from the purchasing dealer in an eventuality when transaction is actuated with fraud or any connivance is established between the purchasing dealer and the registered selling dealer.

Contentions of the State Government: Section 8(3) of the Act was perfectly valid and did not violate Articles 14 and 19(1)(g) of the Constitution of India. It was specifically denied that the said provisions conferred any excessive power upon the State Government to frame the Rules. It further states that vires of the provisions of the above Section 8(3) of the Act and Rules 20(1) and 20(4) of the Rules framed under the Act have been challenged by the petitioner to bye-pass statutory remedies available to it which could legally be done by availing the remedy of appeal against the order of assessment as provided under Section 33 of the Act. It was further asserted that where a statute provided remedies against the orders of the assessment, the Court should refrain from entertaining writ petition against such orders.

The respondents further demonstrated that sub-section (3) of Section 8 of the Act did not declare certificate in Form VAT C-4 as a conclusive evidence for input tax and the said provision, however, permits the authority to allow the claim only if the authority was satisfied after making enquiry that the particulars contained in the certificate were true and correct.

 It was further contended on behalf of the State that once the petitioner has come to know about the fact that the tax has not been paid by the selling dealers to the State, the petitioner could claim refund of tax from its selling dealers. As regards the averments of the petitioner that the scheme framed under the Act neither violated Section 19(1)(g) nor Article 14 of the Constitution of India and the allegation of the petitioner that Section 8(3) of the Act conferred excessive power upon the State Government to frame Rules was fallacious and misconceived as the Legislature in its wisdom had conferred under Section 60 of the Act, the power to make Rules for carrying out the purpose of the Act. Similarly, the power conferred under Rule 20 of the Rules by the State Government under Section 60 of the Act was also not excessive as it laid down the procedure for computation of input tax which the legislature defined under Section 2(w) and for reduction under Section 3 (5) of the Act which was the integral part of the scheme for carrying out the purpose of the Act.

Verdict: After considering the contentions of both the petitioners and respondent and various judgments it has been held by the Hon’ble High Court :

“In legal jurisprudence, the liability can be fastened on a person who either acts fraudulently or has been a party to the collusion or connivance with the offender. However, law nowhere envisages to impose any penalty either directly or vicariously where a person is not connected with any such event or an act. Law cannot envisage an almost impossible eventuality. The onus upon the assessee gets discharged on production of Form VAT C-4 which is required to be genuine and not thereafter to substantiate its truthfulness by running from pillar to post to collect the material for its authenticity. In the absence of any malafide intention, connivance or wrongful association of the assessee with the selling dealer or any dealer earlier thereto, no liability can be imposed on the principle of vicarious liability. Law cannot put such onerous responsibility on the assessee otherwise, it would be difficult to hold the law to be valid on the touchstone of articles 14 and 19 of the Constitution of India.”

“The selling-registered dealer who had collected tax from the purchasing-registered dealer acts as an agent for the Government as held in Atul Fasteners Ltd.’s case (supra). Still further, paid would mean and embrace within it ought to have been paid as enunciated in Elphinstone Spinning and Weaving Mills Co.Ltd.’s case (supra). Moreover, the apex Court in B. R. Enterprises v. State of U.P., (1999)9 SCC 700, Calcutta Gujarathi Education Society v. Calcutta Municipal Corporation (2003) 10 SCC 533 and M.Nagraj v. Union of India (2006) 8 SCC 212 has interpreted the rule of reading down statutory provisions to mean that a statutory provision is generally read down so as to save the provision from being pronounced to be unconstitutional or ultra vires. The rule of reading down is to construe a provision harmoniously and to straighten crudities or ironing out creases to make a statute workable.

To conclude,no liability can be fastened on the purchasing registered dealer on account of non-payment of tax by the selling registered dealer in the treasury unless it is fraudulent, or collusion or connivance with the registered selling dealer or its predecessors with the purchasing registered dealer is established.

In view of the above, it cannot be held that the provisions of Section 8(3) of the Act and the sub-rules (1) and (4) of Rule 20 of the Rules are ultra-vires but the same shall be operative in the manner indicated above. Consequently, the writ petitions are partly allowed and assessment orders are set aside and cases are remanded to the assessing authority to pass fresh assessment order in accordance with law.”

Thus the High Court instead of declaring the statutory provisions in question as ultra vires of constitution held that the said provisions be interpreted in such manner that no liability can be fastened on the purchasing registered dealer on account of non-payment of tax by the selling registered dealer in the treasury unless it is fraudulent, or collusion or connivance with the registered selling dealer or its predecessors with the purchasing registered dealer is established.

Effects of this Judgement in Punjab and other States: The Judgment delivered has far reaching effects in settling down the issues relating to cases where purchasing dealers are disallowed ITC on the ground that the seller has not paid the tax collected by him from the purchaser. The Judgement makes it clear that the selling dealer collects tax as an agent of the Government and if he makes any default to deposit the same with the treasury then innocent purchasing dealer cannot be disallowed the claim of such tax as ITC. However, if the collusion between the purchasing dealer and selling dealer is being proved then the Purchaser can certainly be held liable.

There is no such provision as equivalent to Section 8(3) of Haryana VAT Act read with rule 20 of Haryana VAT Rules in Punjab, but according to section 13(15) of Punjab VAT Act, 2005 the onus to prove that the VAT invoice on the basis of which, ITC is claimed, is bonafide and is issued by a taxable person, shall lie on the claimant.

The ratio descidendi  of this judgment  that innocent purchasing dealer cannot be disallowed ITC  for the default of the selling dealer for non-deposit of tax shall also apply to the cases covered under Punjab VAT Act, 2005 and the provisions of section 13(15) of Punjab VAT Act should be interpreted in the light of the decision of Hon’ble High Court in this case.

This judgment will also act as guiding force for the other States as well where such issues has arisen but not been settled as yet.

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