All you wanted to know about the law on benami property in India…..

In the last few months we have seen a major crackdown on Benami properties and their owners by the Government. Specialised Anti-Benami units have been set up by the Income Tax department across the country and in almost every state and thousands of properties already stand attached under the Prohibition of Benami Property Transactions Act, 1988 [as amended in 2016] (hereinafter “Benami Act”). This article endeavors to give you a bird’s eye view of what exactly does this law entail, what kind of transactions are outlawed, the civil and criminal implications/sanctions imposed by the Benami Act on persons entering into such transactions, and finally, how the anti-benami law operates and the defences/exceptions/remedies available against action taken under the Benami Law.  To begin at the beginnings, let us examine what a ‘Benami Transaction’ is:

1.      What is ‘benami’ and when can a transaction be termed a ‘Benami Transaction’?

Webster’s dictionary defines the term, “Benami” to mean : made, held, done, or transacted in the name of (another person).1 Thus, a Benami Transaction, in common parlance, refers to a transaction in which a property is transferred in the name of a person, whereas the consideration for the same is paid by some other person. To illustrate, where X purchases a property, let’s call it ‘Black Acre’; however, the property is not purchased in his own name, but in the name of ‘Y’, though the consideration has flown-in from X only. This would be a classic Benami Transaction. The subject matter of such a transaction (‘Black Acre’ in this case) is called a “benami property”. Usually, any Benami Transaction would have two primary actors: a beneficial owner (Mr.X, in our example) and a Benamidar (Y). Benamidar is a real or a fictitious person in whose name the Benami Property is transferred or held. A beneficial owner, on the other hand, refers to the  person, whether his identity is known or not, for whose benefit the Benami Property is actually held by a Benamidar. Simply put, a Benamidar is a mere name lender; a mask or a facade, whereas, it is the beneficial owner who is the real McCoy.

The law governing Benami transactions in India is the Prohibition of Benami Property Transactions Act, 1988, which was comprehensively amended and streamlined in 2016 by way of extensive and rather far reaching amendments.

2. What is a ‘Benami Property’ ?

A common illustration of a Benami transaction is one in which an individual purchases a house in the name of his daughter-in-law. Thus the property is sold to a lady, however, the consideration for the same is provided by her father-in-law. If we deconstruct this, the house is the subject matter of the benami transaction and is called ‘Benami Property’.2

It must be noted that, contrary to popular misconception, the application of benami law is not confined to immoveable properties alone.  The term ‘property’, for the purposes of Benami, is quite wide and includes within its wide ambit : assets of ‘any kind’; whether movable or immovable, tangible or intangible, corporeal or incorporeal; and not only that, it also includes any right or interest or legal documents or instruments evidencing title to, or interest in the property and where the property is capable of conversion into some other form, then the property in the converted form is included as well. In fact, the proceeds from the property are also included within the definition of ‘property’.

Though mostly houses, cars and jewelry have traditionally been considered to be property for the purposes of Benami Law; however, under the new definition, even securities, shares and intellectual property can be considered ‘Benami Property’ and may attract the rigors of the Benami Act. This expansion of the definition by the 2016 amendment reflects the legislative intent of intensifying the crackdown on such practices.

3. What is a ‘Benami transaction’?

With a broad understanding of the concept of Benami, let us get down to some specific conditions which are required to be satisfied for a transaction to qualify as a Benami Transaction:

(A) a transaction or an arrangement where a property is transferred to, or is held by, a person, and the consideration for such property has been provided, or paid by, another person; and the property is held for the immediate or future benefit, direct or indirect, of the person who has provided the consideration. (Emphasis on continued ‘beneficial ownership’ of the real owner)

(B) a transaction or an arrangement in respect of a property carried out or made in a fictitious name; (In other words, where benamidar is a non-existent person or entity)

(C) a transaction or an arrangement in respect of a property where the owner of the property is not aware of, or, denies knowledge of, such ownership; (A recent example of this is how Jan Dhan bank accounts were inundated with funds during demonetization and Jan Dhan account holders were made unwitting benamidars of the huge funds (Though in many cases it was also done in collusion with the account holders!).

(D) a transaction or an arrangement in respect of a property where the person providing the consideration is not traceable or is fictitious;

All these transactions would fall within the ambit of ‘Benami Transactions’ within the Benami Act.

4. The Acid test of what is a Benami Property ?

The Supreme Court has observed that the enquiry as to whether a particular transaction is Benami or not, is largely one of fact, and for determining this question, no absolute formulae or straitjacket can be laid down which is uniformly applicable in all situations.

However, there are some factors which weigh a great deal with the Courts in such an enquiry:

  1. the source from which the purchase money came;
  2. the nature and possession of the property, after the purchase;
  3. motive, if any, for giving the transaction a benami colour;
  4. the position of the parties and the relationship, if any between the claimant and the alleged benamidar;
  5. the custody of the title-deeds after the sale; and
  6. the conduct of the parties concerned in dealing with the property after the sale.3

5. Why are Benami Transactions considered unlawful/illegal?

Benami transactions have been a part of Indian society for a while. One of the earliest instances of recognition of this practice can be traced to a Calcutta case wherein – a person purchased property in the name of his wife, and the same was held to be fictitious and therefore invalid.4 However, in the next few decades, the judicial stance towards Benami became a little less certain and there was considerable ambivalence with respect to the legality of the concept. The Privy Council in fact observed that the idea was quite unobjectionable.5  In fact, in some decisions, the Courts went on to observe that certain benami transactions were  customs of the country and must be recognized as such, thereby giving it a veneer of legality, since custom was one of the important sources of law back then.

However, gradually it was realised that Benami Transactions were also being employed for various dishonorable motives, including but not limited to, money laundering and evasion of  taxes. It was also realized that these transactions could be mere facades and misused for diverting one’s assets in another’s name and thereby defeating the lawful claims of creditors and defrauding them. Slowly and gradually it dawned that, on a cost-benefit analysis, the losses and mischief arising from allowing benami transactions to continue unabated far outweighed their perceived advantages, leading to such transactions being forbidden by law.

6. What are the implications of entering into a Benami Transaction ?

  1. Attachment and Confiscation of Benami Property:

As we’ve seen above, there is a complete embargo on entering into Benami Transactions. Therefore, if X purchases a property in the name of ‘Y’, it quite clearly a Benami Transaction and X cannot file a suit seeking the recovery of the property back from Y. Any such suit would be barred by law and capable of being rejected at the very threshold. However, does this mean that Y, who was a willing partner to this illegality, continues to enjoy the property.  The Answer is No. Under the 1988 Benami Law regime there were no specific provisions for attachment and confiscation of such properties. However, the 2016 Amendments provide for an elaborate process for attachment and confiscation of such properties. Therefore, now, apart from the disability attached to recovery of such a property at the behest of someone claiming to be the real owner, Benami Property is also liable to attachment and confiscation under the Benami Act.

This is how the process plays out:

  1. Proceedings before the Initiating Officer:

An Initiating Officer under the Benami Act initiates the process. Assistant Commissioners or a Deputy Commissioners as defined in the Income-tax Act, 1961, have been empowered to act as the Initiating Officer under the Act as well.6

The process begins when some material, for instance, documents or other evidence, come into the possession of the Initiating Officer giving her a reason to believe (sufficient cause, as opposed to a mere guess or conjecture) that any person is a Benamidar in respect of a property. In such a situation, the Initiating Officer may after recording her reasons in writing, issue a notice to the person to show cause within a stipulated time as to why the property should not be treated as benami property.7 A copy of the notice must also be issued to the beneficial owner if her identity is known.8

However, issuance of prior notice is not a condition precedent to attachment always. Like other similar legislations such as Prevention of Money Laundering Act (“PMLA”) and Income Tax Act (“ITA”), Benami Act, in order to prevent wrongful alienation/dissipation of property, and since time is of the essence in some of these cases, also provides for a ‘provisional attachment’ of property suspected to be Benami, provided the initiating officer has a reason to believe that the person holding such Benami property may alienate the property, and render the proceedings infructuous. In such cases, the property can be provisionally attached for a period not more than 90 days, purely as a protective/interim measure.

Since a provisional attachment is carried out on the basis of a ‘reason to believe’ (which is a much lower threshold than positive proof), and it makes serious in-roads into a person’s right to property, as a check and balance, the approval of a higher official (“Approving Authority”) is made a condition precedent for a provisional attachment. Needless to state, the Initiating Officer as well as Approving Authority have to form an opinion that provisional attachment is absolutely imperative, on the basis of tangible and cogent material and not on the basis of conjecture.

If the Initiating Officer is of the opinion that such property ought to be provisionally attached, she may order provisional attachment of the property, initially for a period of 90 days from the day of issuance of notice. This attachment cannot be for a period of more than ninety days from the date of issuance of notice described above. Within that period, the Initiating Officer, after giving a reasonable opportunity to the Benamidar as well as the beneficial owner to put forth their side of the case, may either confirm or vacate the provisional attachment.

In case of confirmation of attachment, the matter is then referred to the Adjudicating Authority (“AA”) under the Act for its decision (on merits) and the attachment continues till a final disposal of the case.

If it is a case of mere issuance of notice (without a provisional attachment), the Initiating Officer may, after a hearing, go on to attach the property till a decision of the Adjudicating Authority. In cases where the attachment is made/continued, the Initiating Officer is required to draw up a statement of the case and refer the same to the Adjudicating Authority under the Act. This statement of case brings the matter to the seisin of the Adjudicating Authority, who conducts an enquiry in the following terms:

  1. Confirmation/Reference Proceedings before the Adjudicating Authority

Upon receipt of Reference, as outlined above, the Adjudicating Authority is required to  issue notice, within a period of thirty days from the date on which a reference has been received, to the following persons9:

  1. the person specified as a benamidar;
  2. any person referred to as the beneficial owner therein or identified as such;
  3. any interested party, including a banking company;
  4. any person who has made a claim in respect of the property:

The notice  is given to the concerned parties in order to give them an opportunity to demonstrate as to how the property in question is not a Benami Property and, therefore, not liable to confiscation.

The notice will provide a period of a minimum thirty days to the person to whom the notice is issued to furnish the information sought and make out a case of release of property.

In a situation where the property is held jointly by more than one person, the Adjudicating Authority will endeavour to serve notice to all persons holding the property.

  • Hearing by the Adjudicating Authority

Representation of Parties by Other Individuals

The Benamidar or any other person who claims to be the owner of the property may either appear in person, or take the assistance of an authorised representative of his choice to present his case. The next question that arises is

  • Who can be an authorised person?10

Authorised representative means a person authorised in writing, being—

  1. a person related to the benamidar or such other person in any manner, or a person regularly employed by the benamidar or such other person as the case may be; or
  2. any officer of a scheduled bank with which the benamidar or such other person maintains an account or has other regular dealings; or
  3. any legal practitioner who is entitled to practice in any civil court in India; or
  4. any person who has passed any accountancy examination recognised in this behalf by the Board; or
  5. any person who has acquired such educational qualifications as the Board may prescribe for this purpose.
  • Reply Filed by Parties

A reply can be filed to the notice issued by the Adjudicating Authority so as to apprise the Authority as to the correct facts and one’s answer/defence on the merits of the case.

  • Hearing

The Adjudicating Authority is required to consider the reply (if any), and conduct any such further inquiries, and/or call for such other reports or evidence as it deems fit and take into account all relevant materials, in the decision making process.

The person specified as a Benamidar, the Initiating Officer, and any other person who claims to be the owner of the property is also required to be heard by the Adjudicating Authority before taking a decision.

  • Other properties surfacing during the proceedings, suspected to be ‘Benami’.11

Where in the course of proceedings before it, the Adjudicating Authority has reason to believe that a property, other than a property referred to it by the Initiating Officer is Benami Property, it may extend the scope of the reference and provisionally attach that property as well.

  • Decision of the Adjudicating Authority12

Lastly, the Adjudicating Authority, upon due consideration, may pass any of the following two orders:

(i) holding the property not to be a Benami Property and revoking the attachment order and setting the property and property owners free; or

(ii) holding the property to be a benami property and confirming the attachment order, in all other cases.

  • Time-limit for passing the Order13

There is an outer limit of one year for the conclusion of these proceedings.

  • Situation where a part of the property is found to be Benami

This is a peculiar situation where the Adjudicating Authority is satisfied that some part of the properties in respect of which reference has been made to him is Benami Property, but it is not able to specifically identify such part; in such a case, the Adjudicating Authority will record a finding to the best of his judgment as to which part of the properties is held Benami.

In cases of an adverse decision by the Adjudicating Authority, the property is liable to be confiscated, and this is how the process of confiscation is carried out:

6.1.3. Confiscation of the Property14

Where an order is passed by the Adjudicating Authority in respect of any property holding such property to be a Benami Property, the Adjudicating Authority will, after giving an opportunity of being heard to the person concerned, make an order confiscating the property held to be a benami property.

Having said that, in case an appeal against the decision of Adjudicating Authority is filed, confiscation will be subject to the result of appeal proceedings.

  • Fraudulent Transfers during the process 15

In case, after the issuance of the initial notice by the Initiating Officer, the property in question is transferred to a third party clandestinely, in that case, the said transaction would be null and void and confiscation would take effect, notwithstanding such a transfer.

However, in case the property is held or acquired by a person from the Benamidar for:

  • adequate consideration;
  • prior to the issuance of show-cause notice by the Initiating Officer; and
  • without his having knowledge of the benami transaction; in such a case the transfer may be valid.
  • Effect of confiscation: 

Where an order of confiscation has been made, all the rights and title in such property will vest absolutely in the Central Government, free of all encumbrances and no compensation will be payable in respect of such confiscation.

7.  Role of the Administrator post confiscation.16

Once an order of confiscation is passed, the power to receive and manage the property, rests with an Administrator, notified by the Central Government for that purpose.

After the order for confiscation has been made, the Administrator will proceed to take the possession of the property. She will, by notice in writing, order within seven days of the date of the service of notice to any person, who may be in possession of the benami property, to surrender or deliver possession thereof to the Administrator or any other person duly authorised in writing by him in this behalf.  In the event of non-compliance of the order or in a situation where taking over of immediate possession is warranted, for the purpose of forcibly taking over possession, the Administrator can take police assistance and it shall be the duty of the officer to comply with the requisition.

8. What are the remedies against wrongful attachment if one is aggrieved by such an order?

8.1. Appeal before the Appellate Tribunal17

Any person, including the Initiating Officer, aggrieved by an order of the Adjudicating Authority may prefer an appeal to the Appellate Tribunal against the order passed by the Adjudicating Authority holding the property to be Benami or not, within a period of forty-five days from the date of the order. (The Appellate Tribunal may, however, entertain any appeal after the said period of forty-five days, if it is satisfied that the appellant was prevented, by sufficient cause, from filing the appeal in time.)

The Appellate Tribunal, as far as possible, may hear and finally decide the appeal within a period of one year from the last date of the month in which the appeal is filed.

Any party aggrieved by any decision or order of the Appellate Tribunal can file an appeal to the High Court18within a period of sixty days from the date of communication of the decision or order of the Appellate Tribunal to him on any question of law arising out of such order. (The High Court may entertain any appeal after the said period of sixty days, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the period specified)

8.2 Writ Proceedings in the High Court

In certain exceptional cases, a writ petition may be filed against the orders of the Initiating Officer or the Adjudicating Authority, before the High Court directly. This option can be explored in cases where the orders of the Initiating Officer/Adjudicating Authority are patently arbitrary or perverse or when there is a clear violation of principles of natural justice and/or fundamental rights. Jurisdiction of the High Court can also be sought in cases of a clear violation of the procedure established under the Act by the Initiating Officer/Adjudicating Authority, or where the Act’s validity itself is suspect, or where there is no adequate remedy provided by/is capable of being availed under the Act.

9. Is entering into a Benami Transaction a crime as well?

When a benami transaction is entered into : in order to defeat the provisions of any law, to avoid payment of statutory dues or to avoid payment to creditors, it attracts penal provisions of the Benami Act19 and prosecution can be initiated under the Act after receiving the sanction of the Central Board of Direct Taxes constituted under the Central Board of Revenue Act, 1963.20

Special Courts for trial of offences under the Act will be set up by the Central Government, as per the mandate under the Act.21

The Special Court, whenever it is setup, will take cognizance of any offence punishable under the Act, upon a complaint in writing made by—

  1. the Initiating Officer; or
  2. the Approving Authority; or
  3. the Administrator; or
  4. the Adjudicating Authority; or
  5. any officer of the Central Government or State Government authorised in writing by that Government

10. Some substantive defences to the charge of Benami.22

Though the nature of the law of Benami is pretty catch-all and extremely wide, there are certain defences/exceptions which can be pressed into action in civil and criminal proceedings under the Benami Act. If sufficiently proved, the following transactions may be protected from the rigors of the Benami Act:

10.1.  Property held by Karta/Member of a Hindu Undivided Family-

(i) A transaction wherein the property is held by a Karta, or a member of a Hindu undivided family, as the case may be, and the property is held for his benefit or benefit of other members in the family and the consideration for such property has been provided or paid out of the known sources of the Hindu undivided family;

10.2.  Property held by a person standing in a fiduciary capacity-

(ii) A transaction wherein the property is held by a person standing in a fiduciary capacity for the benefit of another person towards whom he stands in such capacity and includes a trustee, executor, partner, director of a company, a depository or a participant as an agent of a depository under the Depositories Act, 1996 and any other person as may be notified by the Central Government for this purpose;

When this defence is claimed, the first step is an inquiry into whether or not the property is being held by a person in his fiduciary capacity. While the expression “fiduciary capacity” may not be capable of a precise definition, it implies a relationship that is analogous to the relationship between a trustee and the beneficiaries of the trust. The expression is in fact wider in its import for it extends to all such situations as place the parties in positions that are founded on confidence and trust on the one part and good faith on the other. In determining whether a relationship is based on trust or confidence, relevant to determining whether they stand in a fiduciary capacity, the Court shall have to take into consideration the factual context in which the question arises for it is only in the factual backdrop that the existence or otherwise of a fiduciary relationship can be deduced in a given case.23 For instance, a property was sold by a municipal corporation in favour of a person, X, who was a tenant in the property. The other siblings had not relinquished their rights in the property but had consented to the sale as the corporation required the property to be transferred in the name of one person. Further, admittedly, the sale consideration was provided by other siblings also. In this backdrop, it was held that ‘X’ was holding the property in his fiduciary capacity for his other siblings and hence, the sale of the property in favour of X was not a benami transaction. In another instance, it was observed that a property was purchased by the agent and power of attorney holder. Hence, the transaction in question was not held to be a Benami Transaction.24

10.3.  Property held in the name of spouse, children, etc.

A transaction wherein the property is held by any person being an individual in the name of his spouse or in the name of any child of such individual and the consideration for such property has been provided or paid out of the known sources of the individual;

10.4. Property held in the name of brother, sister, lineal ascendant, etc.

A transaction wherein the property is held by any person in the name of his brother or sister or lineal ascendant or descendant, where the names of brother or sister or lineal ascendant or descendant and the individual appear as joint-owners in any document, and the consideration for such property has been provided or paid out of the known sources of the individual;

10.5.  Possession allowed to be taken or retained in part performance of a contract-

A transaction which involves allowing the possession of any property to be taken or retained in part performance of a contract, if, under any law for the time being in force,— (i) consideration for such property has been provided by the person to whom possession of property has been allowed but the person who has granted possession thereof continues to hold ownership of such property; (ii) stamp duty on such transaction or arrangement has been paid; and (iii) the contract has been registered.

10.6. Property purchased under a bona fide loan/financial arrangement.

Let us imagine a situation where X purchases a property called ‘White Acre’ with the help of a loan from Y, however, X, instead taking money from Y and paying it to Mr.Z , the owner of White Acre, instructs Y to pay the money directly Mr.Z, which Y does. Whether in that case, the transaction can be called Benami, or not? A literal/formalistic/positivist application of the Benami Law would seem to suggest that it may be a Benami Transaction, since consideration has admittedly flown-in from a third person (Y) and property is held in the name of another (X). However, in such a situation, the most crucial consideration would be : whether the property is held for the immediate or future benefit of ‘Y’, or is it a case of pure financial assistance, and Y has no stake in the property.   In a situation such as this, it would have to be seen as to what the real intent of the transaction was, and whether it was, or was not executed for an illegal purpose, such as defrauding the exchequer or creditors. The mischief of Benami Law would be attracted only when a property is held in the name of one, but the enjoyment of the property and real ownership is with another person who had contributed funds for purchase of the property. As opposed to this, the transferee in a property purchased through money taken as loan, would be in the safe harbour if it is shown that both real title and beneficial interests are with the transferee and the consideration had flown from a third party merely as a matter of convenience and on the basis of an underlying financial arrangement, bona fide in nature. In any other view would result in all transactions of purchase of property through assistance from financial institutions treatable as Benami Transactions.25 An interpretation that leads to such absurdity ought to be avoided.

11. Purchase of Shares-

There might be situations where the name of a person is entered in the register of members of a company as the holder of shares but the person whose name has been so entered does not hold the beneficial interest in such shares. In such a situation, the person whose name has been entered has to make a declaration within such time and in such form as may be prescribed, to the company, specifying the name and other particulars of the person who holds the beneficial interest in such shares. In the absence of such a declaration, the holder of such beneficial interest cannot enforce any rights emanating from those shares w.r.t which no declaration has been made. The registered owner is treated as the real owner for all intents and purposes. This is the disability attached to non-filing of declaration under the Companies Act by beneficial owners26 However, in some cases, the authorities have also gone on to initiate action under the Benami law w.r.t such shareholding and initiated attachment and confiscation proceedings qua such shareholding.

12.   Is the new Benami Law applicable to older transactions or only those entered-into after 25.10.2016 (i.e the date of commencement)?

  • Application w.r.t penal provisions.

The Act divides benami transactions, for purposes of punishment, into two buckets:

(i) Transactions entered into before the commencement of the 2016 Amendment i.e. 25.10.2016

(ii) those entered into after the commencement of the 2016 Amendment i.e. 25.10.2016

As per Section 3(2) of the Act, whoever enters into any benami transaction shall be punishable with imprisonment for a term which may extend to three years or with fine or with both. However, as per Section 3(3) of the Act : whoever enters into any benami transaction on and after the date of commencement of the 2016 Amendment, shall, notwithstanding anything contained in sub-section (2), be punishable in accordance with the provisions contained in Section 53 of the Act.

With respect to transactions entered into after 25.10.2016, a combined reading of Section 3(3) and Section 53 of the Act suggests that, where any person enters into a benami transaction in order to defeat the provisions of any law or to avoid payment of statutory dues or to avoid payment to creditors, the beneficial owner, benamidar and any other person who abets or induces any person to enter into the benami transaction, shall be guilty of the offence of benami transaction. Whoever is found guilty of the offence of benami transaction shall be punishable with rigorous imprisonment for a term which shall not be less than one year, but which may extend to seven years and shall also be liable to fine which may extend to twenty-five per cent of the fair market value of the property.

Therefore, transactions entered-into post 2016 are visited with much greater penal consequences, than earlier transactions.  However, the more harsher remedy cannot apply retrospectively for transactions entered into prior to the 2016 law. This aligns with the constitutional protection against ex-post facto/retrospective criminal legislations.27

Though the position in regard to retrospectivity of penal provisions is fairly clear, unfortunately, the legal position is nowhere as simple insofar as applicability of attachment and confiscation proceedings (as detailed above) quatransactions entered into prior to 2016 amendments is concerned. To recapitulate, the provisions relating to attachment and confiscation have been inserted in the Act only after the 2016 amendment. There is no juristic consensus on the question as to whether attachment/confiscation proceedings, in the context of Benami Law, are civil or criminal in nature.  There is one view which suggests that attachment and confiscation proceedings can be initiated even w.r.t transactions carried out prior to the commencement of the 2016 Act, being civil in nature and consequences, and also since these transactions were forbidden even under the 1988 law; whereas, the contra view is that these proceedings have trappings of criminal law and penal consequences and therefore, cannot have a retrospective application. Further, it has also been argued that since the 2016 amendment widens the scope of the Act by enlarging the definition of ‘property’, any transaction relating to ‘property’, not covered by the 1988 Act, but covered post the 2016 amendments, should not be brought within the purview of the Act, lest it violates the constitutional protection against retrospective penal legislations.  In the absence of clarity on these aspects, there is a need for a definitive ruling on this point and also the rather vexed and nuanced issue of difference between retroactivity and retrospectivity, which has long evaded a conclusive determination by our Courts.

13. Offences by Companies and Body Corporates

The Benami Act has a classic vicarious liability provision and provides for attribution of  liability on the alter egos/nerve centres of the Company for an offence committed by the Company.

Section 62 of the Benami Act provides that, in case it is found that a company is responsible for contravention of any of the provisions of the Act or of any rule, direction or order made – every person who, at the time the contravention was committed, was in charge of, and was responsible to, the company, for the conduct of the business of the company alongwith the Company itself; shall be deemed to be guilty of the offence.

Further, any director, partner in the firm, any member controlling the affairs of any association of persons or a body of individuals, manager, secretary or other officer of the company, on account of whose consent or neglect the contravention has taken place, would also be deemed guilty of the contravention.

Needless to state, classic defences to vicarious liability such as lack of knowledge, individual not being in charge of, or aware as to the affairs of the company, et al. may be invoked as defences to oppose fastening of vicarious liability under the Benami Law, as well.

14. Income Tax Act, 1961 and the Benami Law.

Benami law has an interesting inter-section with the Income Tax. Under the IT Act, if a person is found to be the owner of any money, bullion, jewellery or other valuable article and the same is not recorded in any books of account of the person and the source of acquisition/procurement is not explained satisfactorily, in that case, the money and value of bullion, jewellery or other valuable article is liable to be taxed as ‘income’ for such financial year at a flat rate of 77.25%, without allowing any deduction or threshold exemption. This applies only if the amount of such income is disclosed voluntarily and the applicable tax to the tune of 77.25% being paid on or before 31st of March of the relevant financial year. The penalty rate is even higher in case of non-disclosure.

However, what is pertinent to be noted is that the above would apply only in those cases where the person ownsthe money/asset in question, which is not the case in a Benami transaction. In a Benami transaction, the person in whose accounts such assets are held is not the real owner but only a benamidar. In such a case, the above provision may not be attracted, however, the individual assessee and the beneficial owner (or true owner!) would be liable to be proceeded-against civilly as well as criminally under the Benami Act.

15. Application to properties located outside-

Though the definition of property in the Act is extremely wide and there is nothing in the Act that excludes the applicability of Benami Act to Benami properties located outside India; however, in a reply to a debate on the Amendment Bill in the Rajya Sabha on 02.08.2016, the Finance Minister went on to say “What happens if the asset is outside the country? If an asset is outside the Country, it would not be covered under this Act. It would be covered under the Black Money Law, because you are owning a property or an asset outside the country…”. The reference appears to be to the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 which aims to curb black money and undisclosed foreign assets and income by imposing tax and penalties on such income. A judicial decision on this point clearing the airs is much awaited.

16. Conclusion-

The experience of demonetisation has revealed that, in addition to hoarding black money in the form of cash, tax evaders also heavily invest their accumulated illegal money and park it in Benami properties, whether in the form of land, property or gold. This facilitates circumvention/evasion of taxes, allows defeating the legitimate claims of creditors and facilitates money laundering. Therefore, the Act, along with its amendment, seeks to achieve a laudable motive and should be allowed its fullest play. Having said that, there is a lot of uncertainty that remains with respect to crucial issues like: application of the Act to properties located outside India, retrospective application to transactions entered-into prior to 2016, and the inter-play with Income Disclosure/Income Tax/Black Money and Company laws, amongst others. We hope that at least some of these issues would find their way into courts and get resolved judicially, or the legislators may take note, and introduce the necessary amendments clearing the airs.


1 This article has been authored by Bharat Chugh, Managing Associate/Counsel & Kushank Sindhu, Associate at Luthra and Luthra Law Offices, New Delhi. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of the Firm.

2 https://www.merriam-webster.com/dictionary/benami

3 This observation is subject to the special circumstances existing and laws applying thereunder.

4 Jaydayal Poddar (Deceased) through L.Rs. and Anr. vs. Mst. Bibi Hazra and Ors. (1974)1SCC3. Also see : In Bhim Singh v. Kan Singh, AIR 1980 SC 727, the principles governing the determination as to: whether a transfer is a benami transaction or not, was summed by the Supreme Court in the following words:

  1. The burden of showing that a transfer is a benami transaction lies on the person who asserts that it is such a transaction;
  2. if it is proved that the purchase money came from a person other than the person in whose favour the property is transferred, the purchase is prima facie assumed to be for the benefit of the person who supplied the purchase money, unless there is evidence to the contrary;
  3. the true character of the transaction is governed by the intention of the person who has contributed the purchase money; and
  4. the question as to what his intention was has to be decided on the basis of the surrounding circumstances, the relationship of the parties, the motives governing their action in bringing about the transaction and their subsequent conduct etc.

5 Sheikh Bahadur Ali v. Sheikh Dhomu, 1 Calcutta Sud. R. Diw. Rep. 250, 251, cited in Tyabji, Muslim Law (1968), page 396, foot note 1- page 3, Law Commission of India, Fifty-seventh Report, Benami Transactions, August, 1973, Available at: http://lawcommissionofindia.nic.in/51-100/Report57.pdf

6 Bilas Kunwar v. Desraj Ranjit Singh and Ors. (13.07.1915 – PRIVY COUNCIL) : MANU/PR/0010/1915

7 Section 2(19) of the Act

8 Section 24(1) of the Act

9 Section 24(2) of the Act

10 Section 26 of the Act.

11 Section 26(8) of the Act read with the Explanation thereto.

12 Section 26(5) of the Act.

13 Section 26(3) of the Act.

14 Section 26(7) of the Act.

15 Section 27 of the Act.

16 Section 27 of the Act.

17 Section 28 of the Act.

18 Section 27 of the Act.

19 Section 28 of the Act.

20 Section 46 of the Act.

21 Section 49 of the Act.

22 Section 53 of the Act

23 Section 55 of the Act.

24 Section 50 of the Act

25 Section 2(9) of the Act

26 Sri Marcel Martins vs. M. Printer and Ors. (27.04.2012 – SC) : MANU/SC/0333/2012

27 P.V. Sankara Kurup vs. Leelavathy Nambiar (16.08.1994 – SC) : MANU/SC/0533/1994 (1994)6SCC68

28 Hemangini Finance and Leasing Private Ltd. and Others v. Tamilnad Mercantile Bank Ltd. and Others (1996) 86 Comp Cas 875 (CLB). Also see : Pawan Kumar Gupta Vs. Rochiram Nagdeo [(1999) 4 SCC 243], wherein the Supreme Court interpreted the phrase ‘consideration paid or provided by another person” used u/s 2(a) of the Benami Act and held as follows: “29. Section 2(a) of the Benami Act defines benami transaction as “any transaction in which property is transferred to one person for a consideration paid or provided by another person.” The word “provided” in the said clause cannot be construed in relation tothe source or sources from which the real transferee made up funds for buying the sale consideration. The words “paid or provided” are disjunctively employed in the clause and each has to be tagged with the word “consideration”. The correct interpretation would be to read it as “consideration paid or consideration provided”.

29 If consideration was paid to the transferor then the word provided has no application as for the said sale. Only if the consideration was not paid in regard to a sale transaction the question of providing the consideration would arise. In some cases of sale transaction ready payment of consideration might not have been effected and then provision would be made for such consideration. The word “provided” in Section 2(a) of Benami Act cannot be understood in a different sense. Any other interpretation is likely to harm the interest of persons involved in genuine transactions, e.g., a purchaser of land might have availed himself of loan facilities from banks to make up purchase money. Could it be said that since the money was provided by the bank it was a benami transaction?.

30. We are, therefore, not inclined to accept the narrow construction of the word “provided” in Section 2(a) of the Benami Act. So even if appellant had availed himself of the help rendered by his father Pyarelal for making up the sale consideration that would not make the sale deed a benami transaction so as to push it into the forbidden area envisaged in Section 3(1) of the Benami Act.”

31 Sections 89 and 90 of the Companies Act, 2013

32 Article 20(1) of the Constitution of India.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.


Some thoughts on preparation for judicial services examinations

This was first published at Rahulsiasblog.com and is being republished.

  • This is a guest post by our alumnus Mr. Bharat Chugh. Bharat was with Rahul’s IAS and did coaching in the final year of college. Thereafter, he practiced law for sometime, before going-on to secure first rank in the prestigious Delhi Judicial Service Examination in 2013, at the young age of 23. He recently decided to resign and return to his first love i.e ‘the practice of law’. He is currently working on two books and has various publications to his credit. He is also extremely enthusiastic about mentoring future ‘judges’. In this guest post, he shares his thoughts on preparations for the judicial service examinations. Here’s over to Bharat ! 

How to be a judge ?  

How much to study ? Where to start ? What does it take to be a judge ? Can it be managed alongside the practice of law, or preparation is a full time thing ? How does one remember so many provisions ? What’s the best way to read a law ? How to approach answer writing ? How did ‘you’ do it ?

These are some of the questions that have been put to me by countless bright young law students/lawyers, aspiring to be judges. I am hardly qualified to answer these questions; my only claim to writing this post is my own humble success at the exam. It goes without saying that, I cannot, of-course, say anything more than what Rahul Sir has painstakingly told you a zillion times already, and it can’t ever be bettered.

Having said that, I’d still take the liberty to connect the dots backwards to the days of my preparations and pen-down a few thoughts. I must, however, begin with the caveat that whatever I say must be taken with a ‘pinch of salt’; you see, one has to carve out one’s own method and there is no one formula that fits all. But there are some ‘footprints in the sands of time’ which are not washed-off, that my younger (study-weary!) brothers and sisters can see and take heart in.

I shall not be the ‘judge’ today but judgment-debtor or a decree holder, depending on how you judge this post. With this, and without further ado, let us begin at the beginnings :

  • Starting early – If you are serious about ‘judgeship’ as a career, it really helps deciding early and then giving it your all.
  • Excellence at Law – Aim at excellence at law, everything else will follow. Once you are world-class expert at your subject – you’ll also go on to make excellent judges, bureaucrats, lawyers, law officers, academicians etc, and there are no two views about that ! There are countless examples of bright young aspirants who for some reason couldn’t clear the exam, but went on to become leading counsels. It’s quality that matters. There is a vaccum everywhere if you look around, and it needs to be filled. Just be great at your law and opportunities will strike at your door !
  • Understanding of first principles of law – Having a sound conceptual understanding of substantive and procedural law is an absolute-must; Remembering the key wording of the provisions is important, but at the end of the day, it’s how you interpret law, present the answer in a lucid and pithy manner that makes the difference.

Managing Coaching classes with College and Time Table. 

I coached with Rahul Sir during the final year of my college in the evening batch. I used to attend classes after college hours. I would make it a point to attend classes each evening and revise the concepts learnt atleast once at night before sleeping, or in any event in the day time, between/after the lectures – so as to internalise them. That constant engagement with the concepts learnt is extremely important. I used to think about the legal concepts a lot and did a lot of mental recalling of concepts. The result is that most concepts and cases are still etched in my memory.

By the time I graduated I was also done with the coaching classes, however, I kept on participating in the test-series conducted by Sir. I would do them religiously as it is the nearest that one can get to the ‘exam hall’ experience. It helps time-management and tests your performance outside the comfort zone of your study room.

As regards the number of hours that I put into studies each day : after graduation – I put in atleast 8-9 hours every day  in studies; The hours were spread across – reading, re-reading notes, books, recapitulation, mental recalling of concepts during my long walks. I did intersperse these studies with newspapers (I read the ‘Hindu’) current affairs (‘Frontline’, ‘EPW’), non-legal readings to make things vibrant for me. I also tried going-in for a run almost everyday in the evening to freshen my mind up.

Later when I started practising actively I used to get relatively less time at my study table, but I kept up with the engagement with law – through legal opinions to clients, legal writings (drafting and for publications), court arguments, discussions with colleagues etc.  However, ‘practice of law’ is by no means essential for clearing the exams. Most entrants into the service are fresh out of law school.

  • Importance of language – There is saying that “It is as much in the saying as it is in the ‘said” ! ‘Words’ are the first and foremost stock-in trade of a great lawyer/judge. Infact, this is all she/he has. Try and work on your language. Every piece of legal writing need not be flowery or a ‘judgment by thesaurus’, but in order to steal a march (remember : this is a competitive exam), your writing should still reflect a command over language; an understanding of the nuances and subtleties of different legal words (for instance, the words ‘accepts’ and ‘obtains’ have a world of difference between them and cannot be used interchangeably). Same goes for use of punctuation – the same sentence like ‘Roko mat, jaane do’ can also be re-written as ‘Roko, mat jaane do!’. One comma can totally change the meaning of a sentence and has to be used cautiously and with discernment. As a judiciary aspirant, you cannot be callous or reckless with your use of words. Each word carries a precise meaning and usually no other word can replace it and do the trick. Trying remembering at-least 10 new words everyday, this will enrich your vocabulary. A word, at the end of the day, is an idea. Having an expansive vocabulary means having a wider grasp of ideas and having more ideas. It need not be gainsaid that, in a knowledge driven economy, a man who has ideas is the winner. So knowing words is extremely important. I’ve been asked many a times whether 20s is too late to lay a good foundation language-wise ? of course not. It’s never too late. Very few of us have had the good fortune of studying in excellent schools and colleges. I personally am essentially a drop-out, having been constrained to leave school after 8th standard (due to father’s illness and financial difficulties) and completed the remaining part of my schooling through the ‘National Open School’. I kept working alongisde to contribute financially to home. To cut the long story short, I personally faced a series of setbacks as far as a conventional education was concerned, but I did acquire the habit of reading in my college days. I had realized by then language was not only a source of pleasure and learning, but the only salvation. Language (and knowledge came with it) was power. It had dawned on me that the most successful people in the world thrived on information asymmetries. I started on a reading frenzy and devoured whatever I could lay my hands on. A book to me, was the opportunity to get into somebody else’s skin, walk the town in it, and not just the skin of any person, but the best thinkers that the world has ever produced. This happened during college, so my friends, it’s never too late to begin. ‘India after Gandhi’ is a good book to begin with. Obviously, studying non legal stuff during preparations is difficult, but half an hour of reading everyday is something anyone can manage. Moreover, it will also add a little vibrancy to your routine.
  • Converting a ‘setback’ into Success. – It is a fact little known that before DJS, I appeared in Haryana Judicial Service Examination. Though I made it to the ‘Mains’, I could not proceed further. I’ll be lying if I say this was not a setback. Though initially I was a little dejected, but I tried introspecting. Sir was a constant source of strength. He expressed faith in me and encouraged me to push on. The reasons that I could figure were responsible for me not clearing the exam were : not being able to complete the paper within the requisite time, and writing rather long-ish answers. I worked harder on my time management strategy for DJS. I also used this time to make my answers more concise and sharp with focus on the key issues. In the exam hall, I divided my time according to the marks assigned to each question and stuck to the time limit.  This helped me a lot in the DJS Exam, and I could fare well.

  • Tell a tale – Always Remember : When a writer writes, he creates an experience. In a novel, the author creates a world and ‘invites’ the reader to inhabit it (who, of course, has the option of putting down the book and not inhabiting the writer’s world, so to speak). As opposed to this, author of a ‘judgment’ creates a world and ‘requires’ the plaintiff or the defendant to inhabit it. You see, there is no escape for the litigant or for the others, who HAVE TO read (and inhabit) the judgment, since ignorance of a judgment(or law) is not an excuse. Therefore, making your answers/orders/judgments interesting to read is important and makes the entire exercise more fun. Legal writing need not be tedious, boring or heavy. It is all about telling a tale ! Try to read judgments by masters such as Lord Denning, Justice Chandrachud, Justice Chinnappa Reddy for inspiration. Stand on the shoulders of these giants and try and emulate their writing. Lord Denning, for example, would at many times, use the parties names instead of standard ‘nomenclature – plaintiff/defendant’ etc. His judgments are eminently readable and interesting.
  • ‘Less is more’ – Nietzsche said “My ambition is to write in ten lines, what people write in a book”. The ability to summarize the most abstruse and knottiest of legal issues in a form understandable to the common man requires great mental clarity and linguistic competence. (As Rudyard Kipling writes in his poem ‘if’ : you should be able to talk to kings and queens, yet not lose the common touch). Try and master the art of ‘precis’. Never use a word that is not needed. Superfluity in language is a major put-off.
  • “The shortest distance between two points is a straight line”– Think straight, Think clear. Acquire an analytical bent of mind, try to approach the problem in a logical sequence (in chronology), sift the material facts from the less important, arrive at the key legal issues, sift the admitted from the disputed in the question (as far as facts are concerned) and then narrow down the point of controversy. This should make questions easier to answer; Questions these days are lengthy, winded and factually complicated. The ability to arrive at the core of the issue and framing it beautifully in a pithy issue/question form is skill that is worth its weight in gold, during the preparations and in judgeship. Don’t get caught in the thicket of facts and miss the woods for the trees.
  • Emphasis on the ‘Essence of Law’- Try to understand the essence of each law that you read. Remember, a particular section/law is only a ‘means to an end’, the end being ‘the object sought to be achieved by the law’. No law exists in a vacuum and every law has a social context. Understanding the social context of a law and adjudicating the case keeping that in mind helps bridge the gap between ‘judging’ and ‘justicing’. There is a huge thrust on socially responsive judging. The recent judgment interpreting ‘wife’ to include a ‘second wife, who has been deceived into believing that she is the first wife’ may go against a literal reading of Section 125 CrPC, but it serves the true spirit of the law and advances the cause of gender justice. Reading such judgments and trying to acquire this method is extremely important. Always remember statutes are dead letters in which judges breathe life by their interpretation. Try and master concepts of statutory interpretation such as the purposive rule, mischief rule, golden rule, et cetera. Once mastered, you’ll acquire the method of reading law, and it will equip you with the right skill-set to interpret any law or provision from any statute of the world.
  • Nothing worth having ever comes easy – Be prepared for a hermit’s life and slogging it out with your books. Having a passion for law will make it easier. Cellphones/Social Networking websites ought to be used constructively. Always master the core-areas offline, and if needed, top it up with a few latest case laws, contemporary policy decisions, historical perspective and social relevance/context/impact of your decisions, to acquire that cutting edge. Be hard on yourself, Steve Jobs said the most successful people in the world are paranoid almost all the time, this nervousness/anxiety keeps them up and doing the right thing over and over again. Every minute is precious, to quote Kipling’s expression – ‘fill each unforgiving minute with sixty seconds worth of distance run’ and you’ll go a long way
  • Inter-statute/Broad based approach : To master one thing, you have to master the things next to it, as well. While reading one law, try and read all the related/associated laws, in order to attain a comprehensive understanding on that issue. The interconnection of one provision with the other (within and outside the statute!) is extremely important. For instance, one case relating to a real estate dispute may involve issues relating to : Temporary injunctions, Hindu Succession Act, Partition Act and Transfer of Property Act, amongst others. Having a broad based, over-arching, inter-statute approach ensures that there is a comprehensive decision and reflects intellectual maturity and vast knowledge of the student. This also demonstrates the problem-solving approach of the student as opposed to a pedantic narrow legalistic approach. Elevating any question to the constitutional level also is extremely rewarding. For instance, all criminal procedure issues will have a ‘constitutional rights perspective’; for eg : law of bail requires the dovetailing of two conflicting demands : on one side – ‘public order/crime control’ in denial of bail versus liberty perspective/due process/presumption of innocence; if an answer on bail adequately demonstrates this balancing-act, this elevates the decision qualitatively and also convinces the examiner that the student’s compass is constitutionally aligned and compatible. The feel of the constitution should inform and run-through each answer.

Last but not the least, have a ‘love for law’. I am reminded of Justice Joseph Stories’ legendary lines : “that law is a jealous mistress, and requires a long and constant courtship. It is not to be won by trifling favours, but by a lavish homage”. Once you acquire the love for law and give it your all, there is no looking back. It shall reward you all of your life, whether as an excellent Judge, Attorney, bureaucrat, law officer or academician !

Wish you all the best,


Bharat Chugh


*Bharat Chugh now practices law at the Supreme Court of India and is a Counsel with Luthra and Luthra Law Offices. He can be reached at bharat.law06@gmail.com (https://in.linkedin.com/in/bharat-chugh-07b15ba


On the admissibility of insufficiently/unstamped documents and procedure of impounding by the Court.

Stamping of agreements/deeds is governed by the Stamp Act. If the document is not sufficiently stamped, then by virtue of Section 35 of the Stamp Act there is a bar on ‘admitting’ such a document in evidence or acting upon it.

Section 36 tells us that if this objection is not taken at the first instance, it stands waived and inadmissibility of the document cannot be argued later.

Further, Section 33 empowers the court, acting as the protector of state revenue, to examine and impound an unstamped/insufficiently stamped document.  The section stipulates that, if an instrument chargeable with stamp duty produced before a court and is not duly stamped, court shall impound the same. Therefore, there is a mandate on the court to impound the document when this issue is brought to its attention. 

With the basics being thus, a couple of questions with respect to this issue :

  1. Who can impound? 

* Any person authorized to receive evidence either by law or parties consent;

* Any person in charge of public office.

* Includes a ‘Court’

2. When can a document be impounded?

  • When document produced or comes before the court in performance of its functions.
  • Production connotes voluntary production or in pursuance of a court order (eg : Warrants cannot be issued against a person to compel him to produce a document for the purposes of impounding of the same).


3. What kind of document?

* Only the original. Courts under statutory obligation to impound even suo motu.

3A. At what stage is this objection required to be decided ? 

What is important to note is that whenever such an objection is raised that objection has to be decided first, before anything else. This is different from other objections which are merely recorded at trial and final decision deferred till appreciation of evidence.  

(Javer Chand And Others vs Pukhraj Surana 1961 AIR 1655)

Also supported by Bipin Shantilal Panchal v. State of Gujarat (3 judges bench) 2001 (3) SCC 1, where it was noted :

“14.When so recast, the practice which can be a better substitute is this: Whenever an objection is raised during evidence taking stage regarding the admissibility of any material or item of oral evidence the trial court can make a note of such objection and mark the objected document tentatively as an exhibit in the case (or record the objected part of the oral evidence) subject to such objections to be decided at the last stage in the final judgment. If the court finds at the final stage that the objection so raised is sustainable the judge or magistrate can keep such evidence excluded from consideration. In our view there is no illegality in adopting such a course. (However, we make it clear that if the objection relates to deficiency of stamp duty of a document the court has to decide the objection before proceeding further. For all other objections the procedure suggested above can be followed.)”


Step by Step procedure of impounding : (as gleaned from Chilakuri Gangulappa v. RDO, Madanpalle and Ors) 2001 (4) SCC 197 and provisions of Section 33 of the Stamp Act) :

  1. Non stamped or Insufficiently Stamped Instrument comes before the Court
  2. On its own finding or in case of objection and dispute as to whether the document is insufficiently stamped – Court decides the objection then and there, and doesn’t postpone the decision or tentatively admit the document.
  3. In case it is found to be so insufficiently stamped. Court IMPOUNDS the same. This is a mandate upon the court in order to guard public revenue.
  4. The court has to give the party producing the document an option to validate it and render it admissible by paying penalty within the terms of S.35.
  5. If penalty is so paid – S.38 mandates you to send to the collector/SDM, an authenticated copy of the instrument together with a certificate in writing, stating the amount of duty and penalty paid and send such amount to collector.
  6. Collector may exercise power to refund part of penalty so paid (S.39)
  7. If penalty is not so paid, Court has to send it to the Collector. On receipt of the document through either of the said avenues the Collector has to adjudicate on the question of the deficiency of the stamp duty. If the Collector is of the opinion that such instrument is chargeable with duty and is not duly stamped he shall require the payment of the proper duty or the amount required to make up the same together with a penalty of an amount not exceeding ten times the amount of the proper duty or of the deficient portion thereof.
  8. Collector shall then give certificate which shall be conclusive evidence of the fact that it has been stamped and document is sent back to the court for reception in evidence.

Demystifying law of liquidated damages.

Law of Liquidated Damages and Penalty (S.74)

 When the contract mentions a ‘specific amount’  to be paid as compensation in case of breach : 

  1. Whether that amount is ‘conclusive’ and bars any enquiry by the court into actual loss/damages suffered; 
  2. Whether the claiming party is obviated from proving the ‘actual loss’; 
  3. Whether the claiming party is also obviated from proving ‘any loss’ as a consequence of breach of the contract;

These are the questions that this post seeks to answer. 

Since our Contract Law is derived from English Cases, let us first begin at the beginnings and briefly examine the English Law in this regard :-  

English Law

The parties to a contract may determine beforehand the amount of compensation payable in the event of breach. According to English law, a sum so fixed may fall in any of the following categories :

  • Liquidated damages, or
  • Penalty

If the sum fixed represents a genuine pre-estimate of probable damage that it likely to result from the breach, it is liquidated damages. A sum less than the amount of probable damage is also regarded as liquidated damages. The whole of such sum is recoverable.  

In the latter cases, the money stipulated is in terrorem, i.e an extravagant and unconscionable amount, totally out of sync with the actually loss that could be conceived in the case, quoted as a deterrent with a view to discourage breach of contract.

In such a case the court can reject the named amount, and damages will be calculated in accordance with ordinary principles.  The fixed figure does constitute the maximum ceiling, and can never be exceeded though. 

Indian Law

Indian Law strikes a slightly different note. Section 74 reads as under :-

  1. Compensation for breach of contract where penalty stipulated for.— When a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or, as the case may be, the penalty stipulated for.

Explanation.—A stipulation for increased interest from the date of default may be a stipulation by way of penalty.]


On a bare reading it appears that the Indian Law has steered clear of the distinction between Penalty and Liquidated Damages, and makes two things clear :-

  1. The amount mentioned by the parties constitutes the upper limit;
  2. Within that ceiling, a reasonable compensation is to be awarded.


Some other important points : 

  • Prior to invoking right to damages, the injured party will have to prove breach of contract on the part of the other party.
  • The Court has to make its own assessment of the amount of loss causes by the breach. It cannot blindly follow the contract clause in awarding damages without any adjudication (Uma Minerals v. Malabar Cements Ltd, AIR 2003 Ker 146);
  • Contrary to misconception – Distinction between liquidated damages and penalty is not altogether irrelevant to the section.
    • Its relevance, in the first place, arises from the fact that the amount contemplated by the parties will be reduced only if it appears by way of penalty. Otherwise the whole of it is recoverable as liquidated damages.
    • Secondly, this is also implicit from the use of word ‘penalty’ in first explanation of the section, which allows exorbitant rate of interest to be construed as penalty and consequently diluted.

Some case studies.  

Fateh Chand v. Balkishan Dass, AIR 1963 SC 1405 (Constitution Bench)                      Out of Earnest Money-  only ‘Reasonable Amount’ liable to be forfeited.

Facts : Agreement for sale of certain land/house for Rs. 1,12,500. Rs. 1000 was payable as earnest money and Rs. 24,000 on delivery of possession. These payments were made and buyer was put in possession. Agreement further provided that if buyer failed to pay the balance price and get sale deed registered, sum of Rs. 25,000/- would stand forfeited. Buyer defaulted.

Held : The court allowed forfeiture of Rs. 1000 in the facts of the case, as the same was found to be reasonable, but conclusively held that only such amount is liable to be forfeited as is found to be reasonable.

Chunilal V. Mehta & Sons Ltd. V. Century Spg and Mfg. Co. Ltd. (1962 Supp (3) SCR 549)

‘By providing for compensation in express terms (S.74) the right to claim damages under the general law (S.73) is necessarily excluded.’

Facts :

  • Agreement for appointment of managing agents.
  • Remuneration Rs. 6000 per month or 10 % of gross profits of a year, whichever was more.
  • In the event of premature termination, their compensation not less than Rs. 6000 per month for the whole of the unexpired period. 
  • They were removed before the expiry of term and compensation @ 10 % of gross profits for unexpired term was sought.

SC held : the agents were entitled to Rs. 6000 per month as per the contract and not 10 % gross profits. By naming damages, the general application of principles of damages stood excluded.


  • Chunilal (supra) first held that  ‘proof of actual loss or damage’ is not necessary, however there should be legal injury as a result of the breach. Proof of some loss is, therefore, necessary.
  • This was reaffirmed by the SC in Maula Bux v. Union of India (1969) 2 SCC 554.

Case Study – Maula Bux v. Union of India (1969) 2 SCC 554.

Facts : A supplied to the government deposited a certain amount of money as security for performance of the contract. Contract breached. Government rescinded the contract and sought to forfeit the entire Security Deposit. The government argued that it is not incumbent on them to prove ‘actual loss or damage’.

Held : The words ‘whether or not actual damage or loss is proved to have been caused thereby’ apply only in those cases where it is not possible to prove monetary value of the loss, and, therefore, value fixed by parties may be taken as a reasonable measure of compensation.

In the present case, loss could be determined. The government having led no evidence to prove : Whether prices paid to alternate source of supply were less or more than the contract price, therefore, the Government was not entitled to any compensation for the breach.

Applying Maula Bux (supra) damages have been declined in a catena of cases where no loss was proved, or infact a profit was made subsequent to the breach of the contract. (See : Ennore Port Ltd v. Hindustan Construction Co Ltd. (2005) 4 Mad LJ 86; State of Orissa v. Calcutta Co Ltd. AIR 1981 Ori 206).


Other Points relating to S.74.  

  • Principle of S.74 applicable to amount quoted in consent decrees (Parvati Bai v. Ayodhia Pd. Jain, 1985 MPLJ 703) In this case it was held that a consent decree is a contract and any penalty clause therein can be read down. It went on to the extent of saying that “the executing court shall always have the power to apply equitable principles embodies in Section 74 and relieve a party to a contract against any term in the decree which operates as penalty”

(Ed. Comment : Students of Civil Procedure may want to examine whether such an approach on part of the executing court amounts to going behind the decree, on which there is a specific mandate. Students may also examine as to the role of court passing the consent decree, whether that court should ensure that no penalty/excessive damage clause creeps in the agreement. What would be the brief of the court passing such decree would also be interesting to examine)


Whose Burden is it to prove loss, or absence of loss, as the case may be. 

It appears from the decision in Chunilal (supra) that it is for the party claiming damages to prove the quantum of damages.

However, a somewhat discordant note was struck by the SC in ONGC Ltd. V. Saw Pipes Ltd. (2003) 5 SCC 705 wherein the court held that “Burden of Proving that no losses were actually caused to the other party was on the party committing breach. The Court said that it was not necessary for the party to lead evidence to show the amount of loss suffered by it unless the breaching party came to the court and proved that no loss was in-fact caused.

The case involved public utility services and has been a precedent in such cases ever since.


Section 74 and Public Contracts – Latest Trends. 

It was also held in ONGC (supra) that in cases relating to public utility, that by itself, could be a ground for compensation, even without proof of actual loss, as in such cases, the damage to the public at large is difficult, if not impossible to quantify and is assumed; it falls now on the party breaching the contract to prove that the clause is in the nature of a ‘penalty’ and no, or less damage actually occasioned.

 In Saw Pipes (supra) the SC has, therefore, contemplated the onus shifting to the defendant to establish the absence of loss/damage and not other way round. It is rightly observed in the said judgment that where the contract in question is one relating to a public utility and for instance the loss/damage to the public on account of delay in due execution, the loss on account of the breach is not amenable to precise quantification and assessment.

The principle laid down in ONGC v. Saw Pipes Ltd. (2003) 5 SCC 705 has been reaffirmed recently by the SC in M/S Construction and Design Services v. DDA (2015) 14 SCC 263 in a case involving public utility/town planning/civic/public amenities contract and lapse in its performance, where amount named in contract was held to be conclusive and binding. This case related to a public utility and had contained an express finding to the effect that the contractor had failed to execute the work (construction of sewerage pumping station) (para 14). It is in this context that the Supreme Court held that if the entire amount stipulated is a genuine pre-estimate of damages, actual loss need not be proved (para 16). The Court further premised this conclusion on a finding that the evidence of precise amount of loss may not be possible.

[Ed. Comment : Upon fair reading of the relevant paragraphs of the judgment passed by the Supreme Court in the case of Construction and Design Services (supra), it is clear that the Supreme Court has retained the power of the court to examine as to what extent the party complaining the breach is entitled to compensation in the event of breach in the contract involving public utility service containing pre-estimated damages and the same is rightly so in view of the provision of Section 74 of the Act]

 However, in cases not involving public amenities, courts have fallen back on the traditional principles of Fateh Chand (supra) and Maula Bux (supra). A recent example is Kailash Nath Associates v. DDA & Anr. (2015) 4 SCC 136 where earnest money paid was held not liable to be forfeited and ordered to be returned with interest, as DDA subsequently auctioned the land to other party at almost 5 times the price, and also because breach on the part of the appellant was not proved. Besides, the court also held that this was a case where bid did not fructify into an actual agreement, and Section 74 of the Contract did not apply at pre-contract stage, therefore, restitution ought to be made and not grant of damages. In this case notably, it was not the case of DDA that it had suffered any damages on account of alleged breach of conditions/non payment by the appellant, infact it had made a killing out of the subsequent auction.

Latest in the Delhi High Court on this :-

A Recent Delhi High Court decision where liquidated damages have been denied on account ‘no loss’ is : Punj Lloyd v. Gail India Ltd. 2016 SCC OnLine Del 2542

A latest judgment by the Delhi High Court on payment of reasonable damages, within the maximum ceiling, on non-proof of fact that contract related to public serves is : ATC Telecom Tower Corporation Pvt Ltd. V. Videocon Communications Ltd. 2016 SCC OnLine Del 5237.


Law relating to validity of foreign divorce decrees, child-custody orders and principles relating to grant of anti-suit injunctions.  


“H (an NRI) is divorced in Texas, and to marry – he is free; 

No, he has a wife in India, Indian Law says, doesn’t he ?,

H is, therefore married and not so, all at the same time; 

perfectly legal at one place; in the second, his act – a crime.”  

This limerick reflects a classic case of conflict of laws. Picture this : H is an NRI & W an Indian woman who get married in Delhi. Soon thereafter, they move to Texas in the United States, where the husband resides and works. They live in Texas for about three years. Unfortunately, relations between the spouses turn sour, constraining H to file a divorce case in Texas Court seeking dissolution of marriage on the grounds of cruelty and irretrievable breakdown of the relationship. W receives the summons from the court, however, instead of participating in the court proceedings, she takes the next flight back-home, to her parental house in Delhi. The court in Texas grants H a decree of divorce on the ground of irretrievable breakdown of marriage, having regard to the fact that the allegations levelled by the husband in his divorce petition had gone un-rebutted.

The question that now arises is : whether the foreign divorce decree holds good in India ? If not, who ought to challenge it, and how ? Will it make a difference if the decree is granted also on the grounds of cruelty ? To complicate matters further, what if H marries another lady (let’s call her W-2) in Texas, six months thereafter. Would he liable for bigamy in India ?

Another situation that may also be visualised is : where H & W have a child out of the wedlock – ‘C’. However, subsequently there is bad blood between the parties and W insists that they part ways. When this proposal is resisted by H, W insists that she would leave for India along with the child, nonetheless. Apprehending that the child may be taken away. H approaches the court in Texas, which passes an order restraining W from taking the child out of the jurisdiction of the court. W, nevertheless, and in defiance of the restraining order, succeeds in going to India along with the child. Now, what remedy does H have ? Would the act of W qualify as ‘child abduction’, thereby entitling the husband to a writ of habeas corpus. Can he seek compliance of the child custody order of Texas Court in India, on the ground of principle of comity of courts ? Or, can the Indian Court embark on a full fledged scrutiny of the matter in order to independently decide the question of ‘welfare of the child’ ?

Let us further assume, for the sake of argument that – H had filed the divorce petition after W had left for India and not before. Whether W on her arrival in India, could have sought an anti-suit injunction in an Indian Court, seeking to restrain H from proceeding with the divorce case in Texas on the ground of lack of jurisdiction with the Texas Court, and her inability in participating in the proceedings? Can an Indian Court restrict a person from prosecuting a lis before a foreign court, if yes, what would be the considerations that will govern the exercise of such a power ?

These are some of the vexed legal questions being posed to Indian courts today, which have assumed significant importance in view of the fact that, in an increasingly globalising world, the Indian diaspora has now spread itself across continents. What compounds the problem is that this geographical migration does not mark a complete cutting of umbilical cord of customs, traditions and practices of their communities and Parties retain their cultural identities and affinities, wherever they go. They also prefer entering into alliances in their own country for a gamut of reasons. The laws prevailing in the countries (to which they subsequently move to) concerning : marriage, divorce, child custody – may or not be in consonance with the Indian Law. This leads to a situation of a proverbial ‘conflict of laws’; the onerous duty of resolving which falls on the Indian Judiciary. Faced with such cases, which are needless to state, extremely commonplace these days, the court has to walk the tightrope between two competing considerations : one one hand –  the principle of due deference to a foreign court order (called the principle of ‘comity of courts’), and on the other hand – court’s allegiance to the domestic law in India and protection of the rights of its people.

This article is an endeavour to use the above illustrations as springboards to initiate an analysis of the knottiest problems of NRI Marriage and Divorce. We’ll try briefly revisiting the first principles of law relating to NRI Marriages, Solemnisation, validity and dissolution, and also the  question of conclusiveness of foreign judgments in India. We shall also touch upon the possible grounds of challenge to foreign judgments, and Procedure thereof. In the last bit we talk about Child Custody issues with a conflict-of-laws element, and finally, the much debated issue of ‘anti-suit injunctions’.



Provisions relating to solemnisation, registration and validity of marriage, law governing marriage, divorce and ancillary matters. 

What is an NRI Marriage ? 

The word ‘NRI Marriage’, though quite commonplace, is not defined anywhere and is not a legal term. It is commonly used as an broad phrase to connote a marriage between : an Indian, residing in India with another Indian, residing in a country other than India. The Indian residing in another country, may continue to hold Indian Citizenship (in which case, he/she will be an NRI, that is, a Non Resident Indian) or he/she may have acquired citizenship of that country (in which case, he will technically be a PIO, that is – a Person of Indian Origin) or other Indian Expatriates. However, marriages in both these cases are usually bracketed together under the phrase ‘NRI Marriages’.  An overwhelming number of these marriages are arranged marriages; the considerations for entering into such a union may be diverse. Upward social mobility, cultural bond, material aspirations are some of the considerations.

Despite a huge public outcry for a special law governing NRI Marriages, there is no specific legislation in that regard. An NRI Marriage, therefore, may solemnized under either : The Hindu Marriage Act, 1955, The Special Marriage Act, 1954 or The Foreign Marriage Act, 1969 or any other personal law governing the parties.

A personal Law such as the Hindu Marriage Act, 1955, applies not just to Hindus, but also to Buddhist, Jains and Sikhs, residing in India, irrespective of the question whether they are domiciled in India or not. Hindu Marriage Act, 1955 also does not apply to Schedule Tribes and Marriage and Divorce in that regard is governed by their own Customary Laws. However, they can get married and get their marriage registered under the Special Marriage Act, in which case they are governed by the Special Civil Code.

With respect to residence of the parties, the Kerala High Court has ruled that Hindu Marriage Act, 1955 applies to all Hindus even if they reside in different parts outside India. However, both parties must be Hindu by religion in any of its forms and they satisfy the conditions and have performed the ceremonies provided in the Hindu Marriage Act, 1955. There can be no denial by local authorities to register marriages under Hindu Marriage Act, 1955 between Hindus having foreign domicile who have solemnised marriages under Hindu Marriage Act, 1955. Therefore, an NRI can get married to an spouse domiciled in India, or two NRIs can also get married in India as per the Hindu Marriage Act.

The Hindu Marriage Act, 1955 permits solemnisation of marriage of two Hindus, who are citizens of India. Here, the marriage is solemnised as per traditional Hindu Rites and Ceremonies and performance of those ceremonies gives the marriage what can be termed ‘Legal Sanctity’. As opposed to this, Special Marriage Act, 1954 is a completely secular law, permitting a civil marriage. A marriage is totally devoid of religious trappings and is akin to a civil contract. No religious ceremony is prescribed. The marriage is performed in the office of the Registrar of Marriages. The designated officer administers the marriage vows to the couple. After this, the couple along with the three witnesses, has to sign-in the register of marriages maintained by the Registrar. The relevant page in the register will also be counter signed by the officiating authority and will bear the seal of the sub-registrar of marriage of that district. The extract from this register is usually issued to the parties and is titled as a ‘Marriage Certificate’ which bears the seal of the officiating authority. Under this Act, “any two persons “ may marry, irrespective of caste, religion or even nationality. Even two foreigners may marry under this Act.   Historically, the Special Marriage Act, 1954 was enacted as a prelude to a future common civil code. The parties by their consent could opt for the application of the Special Marriage Act and be governed by the secular law. It was aimed that such a law will encourage inter-caste/inter-religious unions, and thereby strengthen the bond of fraternity.

The Special Marriage Act also allows registration under the Act, of any marriage performed under any other form, law upon fulfilment of certain conditions. After the registration, all the provisions of the act will become applicable to such parties and they will no longer be governed by their special laws.

However, the Act provides for a mandatory waiting period of one month. This makes the process tedious for couples looking to marry in a hurry. This eventually constrains the parties to marry under the Hindu Marriage Act (usually a no frills wedding at an Arya Samaj Temple) and registering their marriages immediately as the Hindu Marriage Act does not envisage any notice period requirement.

With respect to non Indians, The Foreign Marriage Act, 1969 is a specific legislation which is applicable to a Marriage of an Indian Citizen to a Non Indian solemnised abroad. This act stipulates that marriages, where one of the parties is an Indian Citizen and the other is a non Indian, would be governed by the provisions of the Special Marriage Act, 1954. In a nutshell, The Foreign Marriage Act, 1969 provides that a Marriage performed outside India will be regarded as correct and valid provided it is performed in accordance with the law of the country where the marriage was performed. The test of formal validity of the marriage in such cases is, therefore lex loci celebrationis.  That is to say, ‘Law of the land where the marriage was celebrated’

Registration of marriage 

Once the marriage is solemnised, the next question that crops up relates to ‘Registration’. A marriage between two Hindus, may be registered under Hindu Marriage Act, or the Special Marriage Act. In the latter, there is a notice process, whereby objections are invited to the marriage from people at large, before the Certificate of marriage is granted, while in the former, this period is not insisted upon.  However, if one of the spouses is a foreigner and not a Hindu by religion at the time of marriage ceremony, they will have to get their marriage compulsorily registered under Special Marriage Act, 1954.

Broadly under the Muslim, Christian and Parsi religions, the provisions of registration are more entrenched. The essential prerequisites for marriage and registration are laid down clearly. Under laws governing Christians and Parsis, as well as Special Marriage Act, formalities for the solemnisation of a marriage are strictly laid down and the priest is to provide a certificate of registration or alternatively, the marriage has to be registered with the Registrar of Births, Deaths and Marriages.

In contrast to this, Hindu Marriages, are based on different practices which are not uniform and thus not entrenched with clarity.

In India there is no umbrella legislation making registration of marriages an essential condition. The Supreme Court in Seema v. Ashwani Kumar has held : that all marriages shall be compulsorily registered and that the State Governments shall initiate action for rule-making in this regard. However, on the ground level there is a huge diversity of legislations and localised practices. The Law Commission of India in its 211th Report has recommended enactment of a “Marriage and Divorce Registration Act” to be made applicable in the whole of India and to all citizens irrespective of their religion and personal law and without any exceptions or exemptions, however there is great legislative apathy in this regard and the law has not been enacted. It goes without saying that a compulsory marriage registration legislation will rule out dishonest denials of marriage and will go a long way to protect the rights of spouses.

Hindu law

S. 8 of the Hindu Marriage Act merely provides for registration of an already solemnised marriage. Therefore, the act of registration is not entrenched within the solemnisation. Unlike, the Special Marriage Act, it does not provide for marriage through a civil authority. Registration comes after the marriage has been solemnised and is complete. The parties may appear before the Registrar within one month of marriage, or even thereafter, with an application for condonation of delay.  Parties appear before the Registrar along with parents/guardians or other winesses.

For registration of the marriage, the marriage ought to be valid marriage as per the conditions laid down in Section 7 of the Hindu Marriage Act. Section 7 states that a Hindu Marriage may be solemnised in accordance with the Customary Rites and Ceremonies of either party thereto.  A hindu marriage in order to be valid does not mandatorily require witnesses. The essence of validity of the marriage is the rites and ceremonies. This usually connotes ‘Saptapadi’. The word, Saptapadi means “Seven steps”. After tying the Mangalsutra, the newly wed couple take seven steps around the holy fire, that is called Saptapadi. This is usually held to be the core ceremonies, unless parties peculiar customs provide otherwise. In a number of cases it has been held that a mere exchange of garlands or putting vermillion on the head of the bride, is not sufficient to constitute a valid marriage.

As per the clear provisions of Section 8(5) The non registration of marriage does not detract from the validity of the marriage in any way, although may have implications in terms of fine etc.

If the marriage is solemnised in India under any of these laws, the question of Validity of the marriage, Divorce, Maintenance, Child Custody, Spousal Property matters are regulated by that law only, under which the marriage took place, regardless of the fact, that the parties may choose settle abroad in any part of the world, thereafter. Therefore, an Indian takes the Personal Law with him/her, wherever she chooses to go and settle.

Foreign Courts may also exercise jurisdiction over these subjects. However, their laws may be not be in consonance with the Indian Laws. This results in a situation of conflict of different legal regimes. Questions as to recognition and validity of foreign court decisions arise; These questions are resolved through what are known as ‘rules of private international law’. There is no comprehensive codified body of Private International Rules in India and the applicable rules are spread over various acts such as Hindu Marriage Act, Special Marriage, Code of Civil Procedure, Indian Succession Act.   These questions arise mostly in cases of foreign judgments of divorce.

The law relating to foreign judgments. 

Section 13 of the Code of Civil Procedure provides that a judgment of a foreign court is also conclusive in India under  normal circumstances, in a lis between the same parties. This is based on the reasonable jurisprudential principle of res judicata, which places an ‘flogging of a dead horse’ and repeated litigation on the same points. This seeks to prevent wastage of precious judicial time & expense and also to ensure finality and certainty in human relations and commercial transactions.

Foreign Judgments are, therefore, conclusive in Indian Courts regarding any matter directly adjudicated between the same parties. It must be also be flagged that a decree of divorce obtained by a foreign court is not required to be sanctified or legitimised by an Indian Court.

This pays due homage to the principles of comity of courts and the upshot of this is that the courts shed their parochialism and be more internationalist, or atleast, tolerant in their outlook.

Similarly, Section 41 of the Indian Evidence Act, which provides that a final judgment of a competent court in the exercise of matrimonial jurisdiction is conclusive proof that the legal character which it confers or takes away accused or ceased at the time declared in the judgment for that purpose.

There are, however, certain exceptions to this general principle, where  a foreign judgment is not taken to be conclusive and may not be recognised by the Indian Law. Such exceptions are laid down in the six clauses (a) to (f) of Section 13 :

In a nutshell, In the following six cases, a foreign judgment will not be considered conclusive:

(1) Foreign judgment not by a competent court;

(2) Foreign judgment not on merits;

(3) Foreign judgment against International or Indian Law;

(4) Foreign judgment opposed to natural justice;

(5) Foreign judgment obtained by fraud; and

(6) Foreign judgment founded on a breach of Indian Law.

Let us touch upon them briefly :-

(1) Foreign judgment not by a competent court

It is a fundamental principle of law that the judgment or order passed by the court which has no jurisdiction is null and void. Thus, a judgment of a foreign court, in order to be conclusive between the parties, must be  a judgment pronounced by a court of competent jurisdiction. Such judgment must be by a court competent both by the law of the State which has constituted it and in an international sense and it must have directly adjudicated upon the “matter” which is pleaded as res judicata.

As to which courts can entertain a petition relating to matrimonial cases, is governed by personal law applicable according to the religion between the parties. For e.g. : A hindu couple, whose marriage is solemnised as per Hindu Rites and Ceremonies, would be governed by the Hindu Marriage Act, 1955 [for short ‘HMA’].  Section 18 of HMA provides that three courts shall have jurisdiction to deal with a matrimonial matter :- the courts of the place where the couple got married, last resided together as husband and wife and where the woman resides.  However, there are certain exceptions to this, but more on that afterwards.

The leading authority on this point is Y. Narmismha Rao v. Venkat Lakshmi, whereA’ a husband obtained a decree of divorce against B (wife) from an American court on the ground that he was a resident of America. Thereafter, he remarried with a woman ‘C’. B filed a criminal complaint against A and C for bigamy back home in India. A and C filed an application for discharge. Dismissing the application, the Supreme Court held that the decree of dissolution of marriage was passed by a court without jurisdiction inasmuch as, neither the marriage was solemnised nor the parties last resided together in America, therefore the american court had no jurisdiction to grant the divorce as per Indian Law. The Foreign Divorce Decree was not  held invalid in Indian Law on ground of lack of jurisdiction.

The court in this case went on to hold that the jurisdiction assumed by the foreign court as well as the grounds on which the relief is granted must be in accordance with the matrimonial law under the parties are married. The court also recognised certain exceptions to this principle :-

  1. where the matrimonial action is filed in the forum where the respondent is domiciled or habitually or permanently resides and the relief is granted on a ground available in the matrimonial law under which the parties are married;
  2. where the respondent voluntarily and effectively submits to the jurisdiction of the forum and contests the claim which is based on a ground available under the matrimonial law under which the parties are married;
  3. Where the respondent consents to the grant of the relief although the jurisdiction of the forum is not in accordance with the provisions of the matrimonial law of the parties.

Therefore, there are situations where a court may be vested with jurisdiction if the parties submits to the jurisdiction of the court. Such conduct is taken as ‘acquiescence’ and springs out of the principle that a person subjecting himself to the jurisdiction of a court willingly, cannot turn back and challenge the decision on jurisdictional grounds, if the decision happens to go against him or her.

(2) Foreign judgment not on merits

In order to operate as res judicata, a foreign judgment must have been given on merits of the case.  Merit is the inherent goodness of truthfulness of a case. A judgment is said to have been given on merits when the same has been passed, after enquiring into the truth or falsity of the plaintiff’s case, the judge decides the case one way or the other. Thus, when the suit is dismissed for default of appearance of the plaintiff; or for non-production of the document by the plaintiff even before the written statement was filed by the defendant, or where the decree was passed in consequence of default of defendant in furnishing security, or after refusing leave to defend, such judgments are not on merits. It need not be gainsaid, that a petitioner ought not to become entitled to something, which he otherwise would not, merely because there is no opposition. For a decision to be on merits, the court is duty bound to examine the petitioner’s case within itself. However, at the time time, the mere fact of a decree being ex parte will not necessarily justify a finding that it was not on merits.

The acid test for deciding whether the judgment has been given on merits or not is to see whether it was merely formally passed as a matter of course, or by way of penalty for any conduct of the defendants, or is based upon a consideration of the truth or falsity of the plaintiff’s claim, notwithstanding the fact that the evidence was led by him in the absence of the defendant. In the latter case, the judgment can be said to be on merits and conclusive on the fact being agitated.

Most matrimonial cases, where the conflict of law situation arises is where one of the spouses leaves jurisdiction of the foreign court on receipt of summons/motion for appearance. Whether in such cases, the judgment is on merits or not, would depend essentially on the question as to whether the foreign court in its order considered the veracity of the petitioner’s case or not.

(3) Foreign judgment delivered in contravention of principles of International or Indian law

A judgment based upon an incorrect view of international law or a refusal to recognise the law of India where such law is applicable  is not conclusive. But the mistake must be apparent on the face of the proceedings.  Most judgments in matrimonial cases are hit by the mischief of this clause. Most indian laws permit the party to seek divorce on the ground of cruelty, adultery, desertion etc. However, irretrievable breakdown is not recognised as a ground for divorce by itself. Since many countries such as US, Europe, Australia recognise irretrievable breakdown as ground for divorce. Divorce under this ground, also known as ‘no fault divorce’ is the most commonly invoked ground for divorce, in view of the difficulty in proving a divorce based on fault. This is a situation where the conflict of law takes place.

The case of Anoop Beniwal v. Jagbir Singh Beniwal65 is illustrative in this regard, it relates to a matrimonial dispute between the parties leading to a divorce case being filed by the husband in England on the basis of the English Act, that is the Matrimonial Causes Act, 1973. The particular ground under which the suit was filed was “that the respondent has behaved in such a way that the petitioner cannot reasonably be expected to live with the respondent.” This ground is covered by S. 1(1)(2)(b) of the Matrimonial Causes Act, 1973 (i.e the english law). The decree was obtained in England and came to India for enforcement thereafter. The respondent/wife claimed that since the decree was based on the English Act, there was refusal by the English Court to recognise the Indian Law. However, the court negatived her contentions and held that under the Indian Hindu Marriage Act under S. 13(1)(ia), there is a similar ground which is “cruelty” on which the divorce may be granted. Therefore the English Act, only used a milder expression for the same ground and therefore there was no refusal to recognise the law of India. Thus the decree was enforceable in India.

(4) Foreign judgment in violation of principles of Natural Justice. 

It is the essence of a judgment of a court that it must be obtained after due observance of the judicial process, i.e., the court rendering the judgment must observe the minimum requirements of natural justice- it must be composed of impartial persons, act fairly, without bias, and in good faith; it must give reasonable notice to the parties to the dispute and afford each party adequate opportunity of presenting his case.

Thus, a judgment given without notice of the suit to the defendant or without affording a reasonable opportunity of representing his case is opposed to natural justice. Similarly, a judgment against a party not properly represented in the proceedings or where the judge was biased is contrary to natural justice and, therefore, does not operate as res judicata.

But the expression”natural justice” in clause (d) of Section 13 relates to the irregularities in procedure rather than to the merits of the case. A foreign judgment of a competent court, therefore, is conclusive even it is proceeds on an erroneous view of the evidence or the law, if the minimum requirements of the judicial process are assured; correctness of the judgment in law or on evidence is not predicated as condition for recognition of its conclusiveness by the municipal court. Thus, a foreign judgment is not open to attack on the ground that the law of domicile had not been properly applied in deciding the validity of adoption or that the court disagrees with the conclusion of the  foreign court, if otherwise the principles of natural justice have been complied with.

In the context of matrimonial cases, it is not sufficient to merely aver that the defendant was served, it must also be demonstrated that the respondent/defendant was in a position to appear and participate effectively in the proceedings and put up a contest, and if the respondent is not in a position to do so, for financial reasons, arrangements must be made to enable her to do so, so as to ensure an adequate opportunity.

(5) Foreign judgment obtained by fraud

It has been said, “Fraud and justice never dwell together” (Fraus et jus nunquam cohabitant);  or “Fraud and deceit ought to benefit none” (fraus et dolus nemini patrocinari debent).

Lord Denning observed, “No judgment of a court, no order of a Minister, can be allowed to stand, it it has been obtained by fraud.” Cheshire rightly states, “It is firmly established that a foreign judgment is impeachable for fraud in the sense that upon proof of fraud it cannot be enforced by action in England.” All judgment whether pronounced by domestic or foreign courts are void of obtained by fraud, for fraud vitiates the most solemn proceeding of a court of justice.

Explaining the nature of fraud, de Grey, C.J. stated that though a judgment would be res judicata and not impeachable from within, it  might be impeachable from without. In other words, though it is not permissible to show that the court was “mistaken”, it might be shown that it was “misled”. There is an essential distinction between mistake and trickery. The clear implication of the distinction is that an action to set aside a judgment can not be brought on the ground that is has been decided wrongly, namely, that on the merits, the decision was one which should not have been rendered, but it can be set aside if the court was imposed upon or tricked into giving the judgment.

In A.V. Papayya Sastry v. Govt. of A.P., the Supreme Court observed: Fraud may be defined as an act of deliberate deception with the design of securing some unfair or undeserved benefit by taking undue advantage of another. In fraud one gains at the cost of another. Even most solemn proceedings stand vitiated if they are actuated by fraud. Fraud is thus an extrinsic collateral act which vitiates all judicial acts, whether in rem or in personam. The principle of ‘finality of litigation’ cannot be stretched to the extend of an absurdity that it can be utilised as an engine of oppression by dishonest and fraudulent litigants.”

In the leading case of Satya v. Teja Singh, a husband obtained a decree of divorce against his wife from an American court averring that he was domiciled in America. Observing that the husband was not a bona fide resident   or domicile of America, and he had played fraud on a foreign court falsely representing to it incorrect jurisdictional fact, the Supreme Court held that the decree was without jurisdiction and a nullity.

The fraud may be either fraud on the part of the party invalidating a foreign judgment in whose favour the judgment is given or fraud on the court pronouncing the judgment. Such fraud, however, should not be merely constructive, but must be actual fraud consisting of representations designed and intended to mislead; a mere concealment of fact is not sufficient to avoid a foreign judgment.

(6) Foreign judgment founded on breach of Indian law

Where a foreign judgment is founded on a breach of any law in force in India, it would not be enforced in India. The rules of Private International Law cannot be adopted mechanically and blindly. Every case which comes before an Indian court must be decided in accordance with Indian law. It is implicit that the foreign law must not offend our public policy.

Thus, a foreign judgment for a gaming debt or on a claim which is barred under the Law of Limitation in India is not conclusive. Similarly, a decree for divorce passed by a foreign court cannot be confirmed by an Indian court if under the Indian law the marriage is indissoluble.

It is implicit that the foreign law and foreign judgment would not be offend against our public policy.

In the case of Neeraja Saraph v. Jayant Saraph (1994) 6 SCC 461. R.M.Sahai, K. of the SC, in action brought before the court by a deserted wife of a NRI husband for maintenance, made a three-fold recommendation addressed to the legislature for its thoughtful consideration which partake the character of ratio. They are :-

  1. No marriage between an NRI and an Indian woman which has taken place in India may be annulled by a foreign court [emphasis added];
  2. provision may be made for adequate alimony to the wife in the property of the husband both in India and abroad; and
  3. the decree granted by Indian Courts may be made executable in foreign courts, both on principle of comity and by entering into reciprocal agreements like Section 44-A of the CPC which makes a foreign decree executable, as it would have been a decree passed by that court.


Section 14 of the Code declares that the court shall presume, upon the production of any document purporting to be a certified copy of a foreign judgment, that such judgment was pronounced by a court of foreign judgment, that such judgment was pronounced by a court of competent jurisdiction, unless the contrary appears on the record, or is proved. However, if for admissibility of such copy any further condition is required to be fulfilled, it can be admitted in evidence only if that condition is satisfied.

Thus, in Narasimha Rao v. Venkata Lakshmi (1991) 3 SCC 451 at pp.463-64), The Supreme Court held that mere production of a photostat copy of a decree of a foreign court is not sufficient. It is required to be certified by a representative of the Central Government in America as per Section 86 of the Evidence Act.


It is well-established that one of the principles on which foreign courts are recognised to be internationally competent is voluntary submission of the party to the jurisdiction of such foreign court. The reason behind this principle is that having taken a chance of judgment in his favour by submitting to the jurisdiction of the court, it is not open to the party to turn round when the judgment is against him and to contend that the court had no jurisdiction.

Submission to jurisdiction of a foreign court may be express or implied. Whether the defendant has or has not submitted to the jurisdiction of a foreign court is a question of fact which must be decided in the light of the facts and circumstances of each case.


A foreign judgment which is conclusive under Section 13 of the Code can be enforced in India in the following ways:

(1) By instituting a suit on such foreign judgment, or

(2) By instituting execution proceedings.

(1) Suit on foreign judgment

A foreign judgment may be enforced by instituting a suit on such foreign judgment. The general principle of law is that any decision by a foreign court, tribunal or quasi-judicial is not enforceable in a country unless such decision is embodied in a decree of a court of that country. In such suit , the court cannot go into the merits of the original claim and it shall be conclusive as to any matter thereby directly adjudicated upon between the same parties. Such a suit must be filed within a period of three years from the date of judgment.

(2) Execution proceeding

A foreign judgment may also be enforced by proceedings in execution in certain specified cases mentioned in Section 44-A of the Code. The said section provides that where a certified copy of a decree of any of the superior courts of any reciprocating territory has been filed in a a District Court, the decree may be executed in India as if it had been passed by the District Court. When a foreign judgment is sought to be executed under Section 44-A, it will be open to the judgment-debtor to take all objections which would have been open to him under Section 13 if a suit had been filed on such judgment. The fact that out of six exceptions there has been due compliance with some of the conditions and there has been no violation of some of the exceptions is of no avail. The decree can be executed under Section 44-A only if all the conditions of Section 13(a) to (f) are satisfied.


In Ruchi Majoo v. Sanjeev Majoo – The court held that repatriation of child on the principle of comity of courts is not always desirable; It was reiterated that the primary consideration is the welfare of minor – Father not seriously grudging mother getting custody of minor but wanting them to return to USA, and father having contracted a second marriage – On father’s allegation, Court in USA framing charges of abduction against mother – District Court, Delhi granting custody of minor to mother – Child being happy with his studies and surroundings in Delhi where he had been living for three years – Child being unhappy with his father’s attitude – Mother not wanting to go back to USA because of alleged past traumatic experience –

Held, repatriation of minor to USA, on principle of “comity of courts” does not appear to be an acceptable option worthy of being exercised at this stage – Interest and welfare of the minor being paramount, a competent court in India is entitled and indeed duty-bound to examine the matter independently, taking the foreign judgment, if any, only as an input for its final adjudication – Respondent’s case that the minor was removed from jurisdiction of American courts in contravention of orders passed by them, is not factually correct – Order by American Court was passed after father had sent his child to Delhi.  (Courtesy SCC)

Hence in this case the court did not accept the foreign court’s order concerning child custody as conclusive and binding.

However, in another case, the balance tilted the other side and the court considered the custody order conclusive –

In Surya Vadanan versus State of T.N & Order (2015), A Supreme Court Bench comprising of Justice M.B. Lokur and Justice U.U. Lalit has held that in a case where there is a pre-existing order of a foreign court of competent jurisdiction to decide whether a child should be repatriated to the foreign country and the domestic court decides to conduct an elaborate inquiry (as against a summary inquiry), it must have special reasons to do so.  The husband in this case was a citizen and resident of U.K. while the wife is a resident and citizen of India. Four years after the marriage, the wife acquired British citizenship and a British passport. They bore 2 daughters out of the wedlock. After experiencing matrimonial problems, the wife returned to India with the daughters and filed a petition under Section 13(1) (i-a) of the Hindu Marriage Act, seeking divorce. An application for custody was also filed by the wife. Subsequently, the husband decided to initiate legal action and petitioned the High Court of Justice in U.K. for making the children as wards of the court. It seems that along with this petition, he also annexed documents to indicate (i) that he had paid the fees of the children for a private school in U.K. with the intention that the children would continue their studies in U.K. (ii) that the children had left the school without information that perhaps they would not be returning to continue their studies. On 13th November, 2012 the High Court of Justice passed an order making the children wards of the court “during their minority or until such time as this provision of this order is varied or alternatively discharged by the further order of the court” and requiring the wife to return the children to the jurisdiction of the foreign court. Another order was passed by the foreign Court, renewing its request to the administrative authorities of the British Government in India and the judicial and administrative authorities in India for assistance for repatriation of the wards of the court to England and Wales, the country of their habitual residence. A Writ of habeas corpus was rejected by the Madras High Court. The Madras High Court, in its decision, took the view that the welfare of the children (and not the legal right of either of the parties) was of paramount importance. On facts, the High Court was of opinion that since the children were in the custody of the mother and she was their legal guardian, it could not be said that the custody was illegal in any manner.

The Court was concerned with two principles in the present matter. They are (i) The principle of comity of courts and (ii) The principle of the best interests and the welfare of the child. These principles have been referred to “contrasting principles of law” but the Court noted that they are not ‘contrasting’ in the sense of one being the opposite of the other but they are contrasting in the sense of being different principles that need to be applied in the facts of a given case.

The Court then went on to observe that the “most intimate contact” doctrine and the “closest concern” doctrine of Surinder Kaur Sandhu v. Harbax Singh Sandhu, (1984) 3 SCC 698 are very much alive and cannot be ignored only because their application might be uncomfortable in certain situations. According to the Court, it is not appropriate that a domestic court having much less intimate contact with a child and having much less close concern with a child and his or her parents (as against a foreign court in a given case) should take upon itself the onerous task of determining the best interests and welfare of the child. A foreign court having the most intimate contact and the closest concern with the child would be better equipped and perhaps best suited to appreciate the social and cultural milieu in which the child has been brought up rather than a domestic court. This is a factor that must be kept in mind. It also stated that there is no reason why the principle of “comity of Courts” should be jettisoned, except for special and compelling reasons. The Court hence observed, “No doubt we expect foreign courts to respect the orders passed by courts in India and so there is no justifiable reason why domestic courts should not reciprocate and respect orders passed by foreign courts.” “If the reluctance to grant respect to an interim or an interlocutory order is extrapolated into the domestic sphere, there may well be situations where a Family Court in one State declines to respect an interim or an interlocutory order of a Family Court in another State on the ground of best interests and welfare of the child,” it added. The Court also stated that there may be situations where an interim or an interlocutory order of a foreign court may be ignored. What needs to be considered is to determine, prima facie, that the foreign court has jurisdiction over the child whose custody is in dispute, based on the fact of the child being ordinarily resident in the territory over which the foreign court exercises jurisdiction. The Court further added a word of caution, stating that since there is no finality to an interlocutory order, it would merely have a persuasive value for a penalizing result. The Court hence directed that the mother should take the children to UK in their summer vacations and comply with the order of the foreign Court. The cost of litigation would be borne by the husband. In case the mother does not comply with the Court’s orders, the father was directed to take the children to U.K. for further proceedings in the High Court of Justice.

Comment : It is therefore clear that the diverging viewpoints, and the law in this regard is still evolving. 


Simply put, an anti-suit injunction is a judicial order restraining one party from prosecuting a case in another court outside it’s jurisdiction. Such orders are not passed at the drop of a hat, because they involve a court impinging on the jurisdiction of another court, which is not entertained very easily. The Supreme Court of India in Modi Entertainment Network v WSG Cricket Pte Ltd, held that in exercising discretion to grant an anti-suit injunction, the Court must be satisfied of the following aspects, (a) the defendant, against whom injunction is sought, is amenable to the personal jurisdiction of the Court; (b) if the injunction is declined, the ends of justice will be defeated and injustice will be perpetuated; and (c) the principle of comity- respect for the Court in which commencement or continuance of action or proceeding is sought to be restrained- must be borne in mind.

In Padmini Hindupur vs. Abhijit S. Bellur, The Hon’ble Delhi High Court, granted an anti-suit injunction in favour of the wife against the husband, restraining the husband from prosecuting divorce petition in the foreign court.

On the issue of wife whether to be held entitled to the relief prayed for by her i.e. the grant of an anti suit interim injunction, it was noted that Section 13 of the CPC deals with the recognition of a foreign judgment. It deals with the various alternatives under which a foreign decree may not be recognized by an Indian Court; until and unless, the foreign decree is in conformity with the public policy which is equity and good conscience, such a decree may not been recognized. The provision clearly says that a foreign judgment not been given on merits of the case will not be recognized by the Courts in India. Unless the party after service voluntarily and unconditionally submits himself/herself to the jurisdiction of the Court and contests the claim, or agrees to the passing of the decree with or without submitting to the jurisdiction of the Court it should not be considered to be a decision which was rendered on the merits of the case. The wife as per communication to Court in the USA was always aggrieved by the jurisdiction of the US Court and she had even lodged her protest at the very first opportunity.

However, Court while considering a prayer for grant of an anti-suit injunction has to consider that if the injunction is declined, the ends of justice would be defeated and injustice would be perpetuated. Then, the Court should consider the issue of forum conveniens – in case there is more than one forum available, the Court in the exercise of its discretion while granting an anti-suit injunction will examine as to which is the most appropriate forum (forum conveniens) having regard to the convenience of the parties. The Court may grant anti-suit injunction in regard to proceedings which are oppressive or vexatious or in a forum non-conveniens.

It was further held that the principles governing the grant of anti-suit injunction being essentially an equitable relief, the Courts in India has the powers to issue anti-suit injunction to a party over whom it has personal jurisdiction in an appropriate case because the Courts of equity exercise jurisdiction in personam.

It was accordingly held that the present would be a forum of inconvenience for the wife to submit herself to the US Court. She having lodged her protest in regard to jurisdiction of US Court, there was no suppression or concealment of facts and thus she was entitled to the equitable relief as prayed for. 


In another case of Nidhi Prakash versus Rajneesh Verma (2013) Delhi High Court again granted an ex-parte interim anti suit injunction restraining the husband from proceeding with the divorce petition at Texas.

Therefore, it is apparent that though courts are generally loath to grant anti-suit injunctions in purely commercial matters, such injunctions are generally granted in family law cases. However, such an injunction can be resisted on the grounds : of submission to jurisdiction, inequitable conduct, suppression of material facts etc.

It is apparent from this discussion that the law in this field is in a constant state of flux and evolving (or one may say, meandering) each day.

The Author Bharat Chugh is a Delhi based Supreme Court Advocate (working at Luthra and Luthra Law Offices as a Counsel) and has advised litigants and courts the world over in matters involving recognition of foreign decrees in India.  This article is distillate of his lectures given at various points of time at different fora.  Bharat can be reached at bharat.law06@gmail.com


Civil Law · Criminal Justice System · Uncategorized

Issues relating to Electronic Evidence – Admissibility, Section 65B certificate and other frequently asked questions.

Issues relating to Electronic Evidence

  1. What is an Electronic Record ?
  2. Types of Electronic Records.
  3. Is an Electronic Record a ‘document’ ?
  4. Is a ’Hard Drive’ a document ?
    • Admissibility of Hard Disk
  5. Proof of Electronic Record.
  6. Section 65B of the Evidence Act
  7. Effect of use of Non Obstante Clause in S.65B(1);
  8. Conditions : Section 65B(2) (a) & (c) related to computer’s integrity;
  9. What if Computer Malfunctions ?
  10. Conditions in Section 65B(2) (b) & (d) relating to the informational ‘chain of integrity’;
  11. Section 65B(4) Certificate
  12. Whether Mandatory ?
  13. Oral Testimony as to S.65B – whether sufficient compliance of Section 65B(4) ?
  14. Who is to file the certificate ?
  15. Stage of filing – Can the certificate u/s 65B(4) be received at a later stage, that is to say, after filing of the electronic evidence on record in the form of an output ?
  16. Whether judicial admission by the opposite party as to the electronic record dispenses with formal proof and compliance of Section 65B of the IEA ?
  17. E-Contract – territorial jurisdiction;
  18. Challenging issues in interface with Criminal Law.


  1. What is an Electronic Record ?

2(t) of the IT Act “Electronic Record” means Data, Record or Data Generated, Image or Sound Stored, Received or Sent in an Electronic Form or Micro Film or Computer Generated Micro fiche;


  1. Types of Electronic Record.

Pen Drive, CD, DVD, Whatsapp message, email, SMS, Video, image file etc.


  1. Electronic Records as ‘documents’ for the purpose of Evidence Act.

Section 3 of Indian Evidence Act.

“Evidence” – ‘Evidence’ means and includes—

(1) all statements which the Court permits or requires to be made before it by witnesses, in relation to matters of fact under inquiry;

Such statements are called oral evidence

(2) all documents including electronic records produced for the inspection of the Court;

such documents are called documentary evidence.


  1. Whether a ‘Hard Disk’ is a document ?

Answer is Yes.

Dharmabir Vs. CBI  (2008) DHC  –

  • New Hard Disk (blank slate) is merely a storage device.
  • Hard Disk once data/information is written on it, becomes a electronic record. (S.2(t) of the IT Act)
  • From Electronic Record to document (S.3 IEA)
  • Two Levels of Electronic Record : Active memory & Subcutaneous memory;
  • Accused entitled to both.
  • Right of the accused under sections 207 (v) and 173(5)(a) of the Cr.P.C.


  1. Proof of Electronic Record : Primary – Secondary
  2. Primary Evidence – (eg : Original Device/Electronic Record)  directly admissible u/s 62 of the IEA. (Kishan Tripathi Vs. The State, Delhi High Court 2016 held : Original Hard Disk containing CCTV Footage = primary evidence u/s 62 IEA
  3. Secondary Evidence (Output) Admissible u/s 65B of the IEA.




Section 65B(1)

Notwithstanding anything contained in this Act, any information contained in an electronic record

  • which is printed on a paper;
  • stored, recorded or copied in optical or magnetic media produced by a computer
  • shall be deemed to be also a document, if the conditions mentioned in this section are satisfied.
    • in relation to the information and
    • computer in question and
  • shall be admissible in any proceedings, without further proof or production of the original, as evidence of any contents of the original or of any fact stated therein of which direct evidence would be admissible.


  1. Use of Non Obstante clause in S.65B(1)

Notwithstanding anything contained in this Act”  ~ See class notes for detailed discussion.


  1. 65B(2): Conditions (a) & (c)

a) The computer from which the record is generated was regularly used to store or process information in respect of activity regularly carried on by a person having lawful control over the period, and relates to the period over which the computer was regularly used;

c) The computer was operating properly, and if not, was not such as to affect the electronic record or its accuracy;

Broadly related to Computer’s integrity and Lawful Control


  1. What if computer is malfunctioning ?

Bank ATM – withdrawal case !

Sri. P. Padmanabh Vs. Syndicate Bank Limited, 2008 Karnataka High Court.

If Computer is malfunctioning output may become inadmissible.

ATM link lost > Person took out more money than he was entitled > Bank alleged defendant took advantage of computer malfunction > sued for recovery of that amount > in evidence, relied on electronic evidence of withdrawal of money > held : when the ATM/Computer itself was admittedly malfunctioning, output not admissible in evidence.

Therefore, the proper functioning of the computer > accuracy of data > chain of integrity is extremely important.


  1. 65B(2): Conditions (b) & (d)

b) Information was fed in computer in the ordinary course of the activities of the person having lawful control over the computer;

d) Information reproduced is such as is fed into computer in the ordinary course of activity.

Broadly related to informational integrity


  1. Certificate u/s Sec. 65B(4): Certificate :
  • identifying the electronic record containing the statement and describing the manner in which it was produced;
  • giving the particulars of any device involved in the production of that electronic record
  • dealing with any of the matters to which the conditions mentioned in sub-section (2) relate,


  1. Whether certificate u/s 65B Evidence Act is mandatory ?
  • Earlier view – No (State (NCT of Delhi) v. Navjot Sandhu (2005) SC)
  • Current view – Yes. ((ANVAR P.V. VS. P.K. BASHEER AND OTHERS – 2014 (SC) Navjot Sandhu stands overruled in this context by PV Anvar.
  • See Dictation Notes for detailed discussion.
  • Generalia Specialibus Non Derogant


  1. Oral Deposition as to conditions of S.65B(2) – whether sufficient compliance ?

Oral Statement in court as to compliance of Section 65B of the IEA will not suffice and certificate u/s 65B is mandatory.  Jagdeo Singh and Ors. Vs. The State (2015) Delhi High Court

Principle : When something is categorically prescribed to be done in law in a certain manner, it has to be done in that manner alone and no other.


  1. Who is Competent to issue the certificate ?

After mentioning the contents of the certificate, the latter part of Section 65B(4) reads as under :-

  • and purporting to be signed by a person.
  • occupying a responsible official position in relation to the operation of the relevant device or
  • the management of the relevant activities (whichever is appropriate)
  • shall be evidence of any matter stated in the certificate; and for the purposes of this sub-section it shall be sufficient for a matter to be stated to the best of the knowledge and belief of the person stating it.


Section 65B(4) Certificate and the Doctrine of Hearsay

  • In cases where information as to proper functioning of computer system/server is derived from system logs, made in the ordinary course of business, a witness deriving his knowledge from such written records can produce certificate u/s 65B(4) and prove the electronic record and his testimony is not barred by doctrine of hearsay.
  • This is premised on the fact that : Proper functioning of the computer in such cases is not a matter of personal testimonial knowledge but knowledge derived from records maintained in the usual course of working of the system.
  • Doctrine of hearsay primarily applies in the domain of oral evidence.
  • Doctrine of hearsay limited in its application in cases of Electronic Evidence. (Kundan Singh Vs. The State (2015) Delhi High Court)



  1. Stage of filing of certificate u/s 65B(4) ? Is it mandatory to file it alongside the electronic evidence output or can it be filed later ?
  • Certificate u/s 65B IEA can be filed even after receipt of document/Electronic evidence on record.
  • Court may invoke Sections 91, 311,391 of the CrPC to facilitate filing of certificate. Investigating authority (police) can also file the certificate alongwith a supplementary police report u/s 173(8) of the CrPC.
  • In civil proceedings, Ord. XVI R. 14, Ord. XVIII R.17 r/w 151 CPC can be used to recall a witness for the purpose of certificate.


(See : Kundan Singh Vs. The State (2015) Delhi High Court & Paras Jain and Ors. Vs. State of Rajasthan,(2015) Raj. HC).


  1. Whether judicial admission by the opposite party as to the electronic record dispenses with formal proof and compliance of Section 65B of the IEA ?


Judicial Admission by the Witness as to electronic record waives the requirement of formal proof and conditions of Section 65B IEA need not be complied with.  (Shamsher Singh Verma Vs. State of Haryana, 2015 – SC)


  1. E-Contract – territorial jurisdiction;


Section 13(3) of the IT Act reads as under :-


(3) Save as otherwise agreed to between the originator and the addressee, an electronic record is deemed to be despatched at the place where the originator has his place of business, and is deemed to be received at the place where the addressee has his place of business.


P.R. Transport Agency vs. Union of India & others – 2005 SCC OnLine All 880 Allahabad High Court.

  • No expert opinion can be led w.r.t an electronic evidence without first complying with Section 65B of the IEA. (See Anvar P.V v. P K Basheer, 2014 SC)


  1. Electronic Evidence Vis-à-vis Criminal Law and the Constitution.
    • Section 27 of IEA or Section 65B – which one is to prevail ?
    • Certificate from the Accused u/s 65B(4) IEA – is it a violation of Article 20(3) of the Indian Constitution ?
Criminal Justice System · Uncategorized

All you need to know about the Law relating to Money-Laundering in India

The Indian Government’s crackdown on black money continues unabated and a spate of prosecutions have been launched in the recent times under the Prevention of Money Laundering Act, 2002. This article is an attempt to demystify the law relating to money laundering in India and provide a brief overview of its scheme and operation.

1. What is Money Laundering ?

Investopedia[2] defines money laundering as The process of creating the appearance that large amounts of money obtained from serious crimes has originated from a legitimate source.”

Illegal arms sales, smuggling, and other organized crime, including drug trafficking and prostitution rings, can generate huge amounts of money. Embezzlement, insider trading, bribery and computer fraud schemes can also produce large profits and create the incentive to “legitimize” the ill-gotten gains through money laundering. The money so generated is tainted and is in the nature of ‘dirty money’. Money Laundering is the process of conversion of such proceeds of crime, that is to say the ‘dirty money’, to make it appear as ‘legitimate’ money.[3]

1.1              The USUAL modus operandi

A case of Money laundering ostensibly appears to be an above-board financial transaction, however, the criminality underneath is hidden by a three stage process :

  • The first stage is when the crime money is injected into the formal financial System. This is called ‘placement’;
  • In the second stage, money injected into the system is layered and spread over various transactions with a view obfuscate the tainted origin of the money. This process is called ‘layering’;
  • In the third and the final stage, money enters the financial system in such a way that original association with the crime is sought to be obliterated so that the money can then be used by the offender or person receiving as clean money. This is called ‘Integration’.

1.2             Methods of Money Laundering

Structuring, Bulk Cash Smuggling, Cash Intensive Businesses, Trade-based laundering, Shell companies and trusts, Round-tripping, Bank Capture, Gambling, Real Estate, Black Salaries, Fictional Loans, Hawala, False invoicing are some of the common methods of money laundering.

2. What is the Indian Law on the subject ?

In India, the specific legislation dealing with money laundering is the Prevention of Money-Laundering Act, 2002 (for short ‘PMLA’). The law was enacted to combat money laundering in India and has three main objectives :

  • To prevent and control money laundering;
  • To provide for confiscation and seizure of property obtained from laundered                                  money; and
  • To deal with any other issue connected with money-laundering in India.

Apart from the provisions of PMLA, there are other specialised provisions such as RBI/SEBI/IRDA anti money laundering regulations. Many of these authorities are bound to provide suspicious transaction reports, which are in-turn analysed by Financial Intelligence Units established by the Central Government.

3. What is the Legal Definition of Money Laundering ?

3.1       Money Laundering

The offence of ‘Money Laundering’ is defined under Section 3 of the PMLA, which, for ease of understanding, can be deconstructed as :

Whosoever :

  • directly or indirectly,
  • attempts to indulge, or
  • knowingly assists, or
  • knowingly is party, or
  • is actually involved in
  •             any process, or activity connected,
  • with the Proceeds of Crime, including its :

            ◦          Concealment,

            ◦          Possession,

            ◦          Acquisition or use; and

  • Projecting or Claiming it as Untainted Property

                     shall be guilty of offence of Money-Laundering.

It is clear that the section is most widely worded and almost any kind of dealing with the proceeds/fruits of crime, is brought within the purview of the section and made culpable.

3.2       ‘Proceeds of Crime’

An understanding of the phrase ‘Proceeds of Crime’ is crucial to the understanding of the crime of Money Laundering. The offence of money laundering (defined u/s 3 and punished u/s 4 PMLA) is attracted only when the laundered property falls within the definition of ‘proceeds of crime’

To understand what is meant by ‘Proceeds of Crime’, one has to turn to Section 2(u) of PMLA, which provides that – ‘proceeds of crime’ means and includes :

  • Any property derived or obtained
  • Directly or indirectly
  • By any person
  • as a result of criminal activity
  • relating to a ‘scheduled offense’; or
    • the value of any such property

To further add teeth to this provision, the Finance Act of 2015 has further widened the definition of proceeds of crime and included within its ambit not only the specific property (which is the subject matter of money laundering) or its value, but also the property-equivalent in value held within the country (in a situation where property which is the ‘proceed of crime’ is taken or held outside the country). Such properties are also included within the definition of ‘proceeds of crime’. This principle of equivalence has been introduced by the Finance Act, 2015 for the first time.

To illustrate, if a person X has been accused of having proceeds of crime in country X, in that situation, his assets in India of the same value will qualify as ‘proceeds of crime’, even though these assets per se are not the ‘proceeds of crime’ or in no way connected to it. This has been done with a view to enable action in those cases where ‘proceeds of crime’ are taken or held outside the country and to allow action to be taken for attachment of equivalent asset located within the country. This step appears to have been taken in view of the increasing internationalisation of crime. However, this gives rather wide and unguided powers of attachment to the authorities under the Act, which may be exercised arbitrarily.

The Interconnectedness of PMLA and ‘scheduled offence’ 

A reading of the above definition of ‘proceeds of crime’ also makes one more thing clear, which is extremely crucial to an understanding of the offence of Money Laundering, which is that the offence of Money Laundering is not an independent crime; it depends upon another crime, which is known as the ‘predicate offence’ or ‘scheduled offence’, the proceeds of which are made the subject matter of crime of money laundering. The world over, countries include almost all serious crimes as predicate crimes for the purpose of money laundering offence, with a view to widen the ambit of prosecution.

In the next section we deal with the Schedule and the list of predicate offences.

4. What are the scheduled/predicate offences which entail proceedings under PMLA ?

4.1       List of Offences

Under PMLA, commission of any offence, as specified in the Part A and Part C of the Schedule of PMLA will attract the provisions of PMLA. Some of the Acts and offences, which may attract PMLA, are enumerated herein below:

  • Part A enlists offences under various acts such as : Indian Penal Code, 1860 (including but not limited to offences against Property such Cheating, Forgery, Counterfeiting, Fraud, murder etc) Narcotics Drugs and Psychotropic Substances Act, 1985, Prevention of Corruption Act, 1988 SEBI, Customs Act, 1955, Foreigners Act, Arms Act, Antiquities and Art Treasures Act, Copyright Act, 1957, Trademark Act,1999, Wildlife Protection Act, 1872, Information Technology Act, 2000, amongst others.
  • Part B offences (offence under the Customs Act), provided the value of property involved is more than one crore rupees or more;
  • Part C deals with trans-border crimes, and reflects the commitment to tackle Money Laundering across International Boundaries.


5. Authorities entrusted to investigate/prosecute under the PMLA?

Though the Code of Criminal Procedure governs the procedural aspects of prosecution, there are marked deviations from the standard procedure considering the special nature of the offence (including its cross border character) and slightly different process is envisaged. The offence is cognizable which means arrest can be made without a warrant.[4] There is a specialised investigative body for investigation of these offences. The Directorate of Enforcement in the Department of Revenue, Ministry of Finance is responsible for investigating the offences of money laundering under the PMLA.  Investigation usually begins with the registration of an Enforcement Case Information Report (also known was ECIR) which sets the investigation into motion.

This authority is empowered to carry out interim measures such as survey, search, seizure and arrest of the accused. Similarly, if an asset is found to be the proceeds of crime, the same can be confiscated and appropriated by the Government.

Financial Intelligence Unit – India (FIU-IND) under the Department of Revenue, Ministry of Finance is the central national agency responsible for receiving, processing, analyzing and disseminating information relating to suspect financial transactions to enforcement agencies and foreign FIUs.

The predicate/scheduled offences are separately investigated by agencies mentioned under those acts, for example – the local police, CBI, customs departments, SEBI or any other investigative agency, as the case may be.

After investigation is complete for the offence of money laundering, a complaint is filed by the investigating authority before the Special Court, where the trial for the offence actually takes place.

Since the offence of Money laundering is inextricably connected with the predicate offence, 2013 amendments to the PMLA provide that the trial for the predicate offence as well as offence punishable under Section 4 shall be conducted by the Special Court. If court which has taken cognizance of the scheduled offence is other than the Special Court (which has taken the cognisance of the complaint of the offence of money laundering under sub-clause (b), it shall, on an application by the authority authorised to file a complaint under this Act, commit the case relating to the scheduled offence to the Special Court and the Special Court shall, on receipt of such case proceed to deal with it from the stage at which it was committed. [5]

As opposed to this, the process relating to attachment of property (including its confirmation) is dealt with by the Adjudicating Authority established under the Act.

6. Actions that may be initiated against person laundering money?

  • Attachment of property under Section 5, seizure/freezing of property and records under Section 17 or Section 18.
  • Persons (Individuals and/or juristic person such as a Company etc) found guilty of an offence of Money Laundering are punishable with imprisonment for a term which shall not be less than three years but may extend up to seven or even ten years (depending on circumstances) and shall also be liable to fine (no upper limits) [Section 4].[6]

7. Attachment of Property.

The PMLA gives extremely wide powers to the authorities to attach properties suspected to be involved in Money Laundering. Section 5 of the PMLA authorises the Director or any other officer not below the rank of Dy.Director to attach property. This power is to be exercised if the authority, as specified above, has a reason to believe (and such reasons have to be recorded in writing to prevent arbitrariness), on the basis of material in their possession, that –

Any person is in possession of any Proceeds of Crime; and such Proceeds of crime are likely to be :

  • Concealed,
  • Transferred, or
  • dealt with in any manner

which may result in frustrating any proceedings relating to confiscation of such proceeds of crime.

 If the aforesaid conditions are satisfied, the authority may by order in writing, provisionally attach such property for a period not exceeding 180 days from the date of order.

Under normal circumstances, presence of a complaint/police report against the accused for the predicate/scheduled offence, whether in India or abroad, is a necessary precondition for provisional attachment of property.  This is, however, not an absolute pre-condition and in cases where immediate attachment is needed and non-attachment is likely to frustrate the proceedings, the Director or the Dy.Director, for reasons to be recorded in writing, may nevertheless go ahead with provisional attachment even with there being no prosecution qua the scheduled offence against the accused. 

It may be noted that there is no provision for a prior notice of a provisional attachment and the same can come like a total bolt from the blue.

What happens post-provisional attachment ?

After provisional attachment, the Director or any other officer, has to file a complaint stating the facts of such attachment before the Adjudicating Authority, within a period of thirty days from such attachment


Thereafter, the person aggrieved by the provisional attachment may file his objections before the Adjudicating Authority.  This is the remedy under the PMLA, however, an order without jurisdiction or suffering from any jurisdictional error may be challenged directly before the High Court by invoking Article 226 of the Constitution.  The Courts have held that a mere mechanical noting that the property in question is likely to be concealed, transferred or dealt-with would not meet the requirements of Section 5(1) of the Act and such a non speaking order by a Director can be set aside in writ proceedings by the High Court if it is devoid of strong and cogent reasons[7]


  1. Can provisional attachment be invoked against a person not accused of any Scheduled Offence ?

 The answer is Yes. Provisional attachment can be invoked even against a person who is not accused of any ‘scheduled-offence’. A conjoint reading of Sections 2(s) and 2(u) reveals that reference made is to ‘any person’; this coupled with the purpose and intent of the Act, calls for a wide interpretation.

In fact, Section 5(1) second proviso specifically allows attachment of property in the hands of a  third person even without there being a prosecution qua that person under the PMLA. It provides that if the designated officer has reason to believe that the property in possession of such person is involved in Money-Laundering, and non-attachment will frustrate any proceedings under the Act, he can go ahead and attach the same. The essence of the matter being ‘freezing of tainted assets’ at the earliest.

However, even post attachment, the person may continue in the enjoyment of the property during the period of attachment, but is prohibited from creating any third party interest in the property.

  1. Post Attachment proceedings.

We have already seen that after provisional attachment u/s 5 of the PMLA, the Director has to file a complaint before the Adjudicating authority. Section 8 of PMLA lays down an elaborate procedure for adjudication of a complaint under Section 5 of PMLA. It calls for a show cause notice to be issued to the offender/person from whom property has been seized, so as to give the person an opportunity to make a case against attachment/confiscation. Such a person, in order to avoid confiscation, can demonstrate the legitimate sources of his income, earning or assets, out of which or by means of which he has acquired the property attached, the evidence on which he relies and other relevant information and particulars, and to basically convince the authority as to why all or any of such properties should not be declared to be the properties involved in money-laundering and confiscated by the Central Government. The Authority after giving him a hearing reaches a finding, which needless to state is open to challenge before the Appellate Tribunal.

If the Adjudicating Authority, after the enquiry, comes to the conclusion that any property is involved in money laundering, it can, by an order in writing, confirm the attachment of the property. Such attachment shall :

  1. continue during the pendency of proceedings relating to any scheduled offence before a Court; and
  2. become final after the guilt of the person is proved before the Special Court and order of such Court becomes final;
  3. after the confirmation of provisional order of attachment, the Director or any other officer authorised by him in this behalf shall forthwith take the possession of the attached property.

Essentially, once the provisional attachment is confirmed, the final fate of the property depends on the decision of the Special Court (trying the offence under the PMLA). If the offence under PMLA stands proved, the Special Court shall order confiscation of the property to the Central Government. If the Special Court reaches the conclusion that the offence has not taken place, it shall order release of such property to the person entitled to receive it.

Appeal against confirmation of Attachment

Decisions of the adjudicating authority of first instance can be appealed to the Appellate Tribunal  created under the Act.

Adjudicating Authority and Special Court – Relative scope

It is to be noted that the Adjudicating Authority under this section is concerned with questions of continuation of attachment and/or retention of property involved in money laundering and not the trial of offence of money laundering or the scheduled offence, which function falls for a judicial trial by the Special Court.

Procedure before the Adjudicating authority

 The Adjudicating Authority has been given vast powers of discovery, inspection, compelling production of records as per S.11 of the Act. Section 11 spells out the powers of the Adjudicating Authority in discovery of facts, Section 50 does so in respect of a Director.

Needless to state, being a quasi judicial authority, both of them have to conform to the principles of Natural Justice.

As per established principles, following duties are imposed on quasi judicial authorities :- (i) A quasi-judicial authority ought not to make any decision adverse to a party without affording an opportunity of meeting the allegations made against him; (ii) The party whose rights are to be affected should be provided with the information upon which the action is raised and the affected party should have reasonable notice of the case which he has to meet/face. Of course, an opportunity is to be provided to the affected party which must be real, reasonable and substantial too; (iii) The affected party should have the opportunity of letting in/adducing evidence which he relies upon.

 9A. Whether an accused can be called upon to disclose documents and give statements, or can he exercise the right to silence?

Section 11(2) & S.50(3) of the PMLA makes it mandatory for a person so summoned by the adjudicating authority to attend in person and bound to disclose documents as may be required, and answer such questions as are put and for the purposes of these sections, the adjudicating authority is considered a ‘court’ and proceedings ‘judicial proceedings’.

Moreover, Section 50(1) prescribes taking of affidavits on oath with respect to discovery of facts.

On a plain reading, any person will include an accused person too. Now, whether the accused can be compelled to disclose documents and disclose facts is a serious question as it makes serious inroads into the constitutional right of silence of the accused and protection from self incrimination, as guaranteed under Article 20(3) of the Constitution. However, the law as it stands makes the statement recorded before the Investigating officer under PMLA admissible in evidence before the Court.[8] (This, it may be noted, is in stark contrast to any other criminal prosecution where statements given to Police during investigation are not admissible in evidence during trial).

  1. Powers of the Enforcement Directorate relating to Search, Seizure and Arrest.

10.1            Search of premises

Section 17 gives wide powers of search and seizure to the investigating agency. If the investigating agency has reason to believe (and such belief should be recorded in writing) the commission of offence under the PMLA and possession of proceeds of crime, it can enter and seize property/records etc, make an inventory of the same. The seizure memo is required to be signed by two independent witnesses.

Whereas this section provides for search of premises, Section 18 provides for search of an individual.

10.2            Search of person

If the investigating authority has a reason to believe that a person has secreted about his possession, ownership or control, proceeds of crime, in that case the person can be searched. Before the search of a person, as per his wish, the authority shall take the said person before a Gazetted officer superior in rank to the authority or a Magistrate within 24 hours excluding the time of journey. This is the safeguard laid down in S. 18(4) of the PMLA, however, strangely there is no corresponding obligation on the investigating agency to inform the person about to be searched of this valuable right. Something akin to a Miranda warning will be apposite here.

The property seized has to be forwarded to the adjudicating authority for further orders.

10.3            Arrest

The offence is cognizable which means arrest can be made without a warrant.[9] Section 19 gives the authority power to arrest. Standard safeguards relating to arrest apply. Every person arrested has to be produced before the Magistrate within 24 hours (excluding time of journey).  The provision also mandates that such arresting official has to forward a copy of such arrest memo with the material in his possession to the adjudicating authority in a sealed envelop as per the procedure prescribed.

Apart from these, the investigating officer may summon and record the statements of persons concerned (S.50 of PMLA)


  1. Right to Bail

Section 45 of the PMLA makes the offence of money laundering non-bailable, which means that a person arrested is not entitled to bail as a matter of right, and bail becomes a matter of discretion for the court. If the predicate offence provides for punishment more than 3 years, then there is an embargo on release on bail, unless either the offence concerns a child, woman, sick or infirm; if not, then bail can only be granted after hearing the Prosecutor and only after the court comes to the conclusion that “there are reasonable grounds for believing that he is not guilty of such an offence and that he is not likely to commit any offence while on bail”. Now this is an extremely tall order, especially having regard to the fact that the matter is usually at a preliminary stage when the question of bail is being decided. For a court to record a finding, at that stage, that there are no reasonable grounds for believing commission of the offence is an unnaturally high threshold. Usually the prosecution will prepare the case in such a way so that it contains the basic allegations and there is a very less likelihood of it being thrown out at the very outset. Once that is done, the court, at the stage of bail, will normally not be in a position to return a finding of non-guilt in favour of the accused.

This makes serious inroads into the right & presumption of innocence in favour of the accused. An accused is presumed to be innocent till his guilt is proved beyond reasonable doubts. Pre-trial incarceration is frowned upon by law, as it carries a substantial punitive content and has a stigmatic effect. Such incarceration is not only a denial of ‘due process’ but prejudices the accused in the preparation of defence of his case.

Secondly, if in a case, the court releases the accused on bail, in view of the above findings and at the same time frames charges against him and takes the matter to trial, would not the two findings be mutually destructive of each other. These are some of the major anomalies with this provision and a serious constitutional challenge can be mounted on this provision on the above grounds.

  1. Can a Company and its Directors/Managers/Secretaries be accused of offence under PMLA ?

Section 70 of PMLA deals with offences by Companies. It states that where a person committing a contravention of any of the provisions of this Act or of any Rule, Direction or Order made there under is a Company (company” means a body-corporate and includes a firm or other association of individuals), in that case: every person who, at the time the contravention was committed, was in charge of, and was responsible to the company, for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the contravention and shall also be liable to be proceeded against and punished under PMLA. This is an instance of what is known as ‘Vicarious Liability’ where liability for the acts of the company is also attributed on the individuals heading responsible positions in the company on the premise of them being the alter egos/nerve-centers of the company.

The possible defence and exception to this is for the individual to argue and prove that the contravention took place without his knowledge/despite all due diligence.

S.70(2) further provides that if the contravention has took place with the consent or connivance of, or is attributable to any neglect on the part of any Director, Manager, Secretary or other Officer of any Company, such Director, Manager, Secretary or other Officer shall also be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly.


  1. Obligations of Banking Companies, Financial Institutions and Intermediaries

Under Section 12 of PMLA, there is a mandate on all Banking Companies, Financial Institutions and Intermediaries to maintain records of all transactions, including information relating to transactions for a period of 5 years, in such manner as to enable the investigating agency/Court to reconstruct individual transactions and find out criminality. The aforesaid agencies are required furnish to the concerned Authorities under PMLA, all information relating to such transactions, whether attempted or executed; the nature and value of such transactions; verify the identity of its clients and the beneficial owner, if any; and maintain record of documents evidencing identity of its clients and beneficial owners as well as account files and business correspondence relating to its clients.

  1. Trial of PMLA offence and scheduled offence

Since the offence of Money laundering is inextricably connected with the scheduled offence, 2013 amendments to the PMLA provide that the trial for the predicate offence as well as offence punishable under Section 4 shall be conducted by the Special Court. If a Court which has taken cognizance of the scheduled offence is other than the Special Court (which has taken the cognizance of the complaint of the offence of money laundering under sub-clause (b), it shall, on an application by the authority authorised to file a complaint under this Act, commit the case relating to the scheduled offence to the Special Court and the Special Court shall, on receipt of such case proceed to deal with it from the stage at which it was committed. [10] However, this by itself should not be construed to mean a joinder or clubbing of trial. The simultaneous trial in both the cases by the same court is an expedient to reduce delays. Needless to state, both the cases are independently tried and decided on the basis of evidence in each case.  The trial of scheduled offence and PMLA offence is to be conducted by the same court – only for the sake of expediency.

The interconnectedness of PMLA and ‘scheduled offence’

It would be a truism to say that the offence of Money Laundering is inextricably linked with the scheduled offence and, logically, an exoneration in the latter should, by itself, lead to an acquittal/discharge for the offence of money laundering too. This view seems not only just and legal but also deserves to be adopted for its eminent common-sense, for if there is no scheduled offence, there cannot be any ‘proceeds of crime’ either, as the ‘crime’ in the phrase ‘proceeds of crime’ is nothing but the scheduled offence. In other words, the Special Court trying the PMLA case cannot conclude, without the scheduled offence being proved, that some property associated with that offence is tainted as ‘proceeds of ‘crime. For something to be ‘proceeds of crime’ there has to be a crime in the first place. Any other view would make the two judgments mutually inconsistent, absurd and contradictory. Therefore, an acquittal/discharge in the predicate/scheduled offence should ipso facto lead to exoneration in the PMLA offence too. Infact, since it is the same Court which tries both the scheduled offence and the PMLA case (arising out of the scheduled offence), a discharge/acquittal in the scheduled offence itself leads to a discharge/acquittal for the PMLA offence too. A conclusive decision by the Hon’ble Supreme Court is required on the matter so as to settle the issue.

It may be noted that this provision cannot be construed to mean that the Enforcement Directorate (the investigating body under the PMLA) can investigate into the scheduled offences also. Investigation for each of the offences is to be done by agency(agencies) authorised under the respective acts. Investigation by an agency other than ED for an offence under PMLA may open the entire investigation (and its result) to challenge.


  1. Evidence, Presumptions and Burden of Proof

Keeping in view the difficulty of investigation in complex cases like money laundering, PMLA makes a departure from the standard rule of presumption of innocence and raises certain presumptions. This is an application of the ‘doctrine of reverse burden’. Such provisions, needless to say, make the defence of a PMLA case quite challenging.

15.1            presumption of property being tainted property

Section 24 of the PMLA casts the burden of proving that (alleged) proceeds of crime are not involved in Money Laundering on the Accused. This prima facie appears harsh, but on a deeper scrutiny it seems that this section will not relieve the prosecution of its responsibility of making a specific allegation that the monies that are allegedly being laundered are earned by committing a particular schedule offence or offences under the PMLA and are, therefore, proceeds of crime. The section cannot be read so as to obviate the requirement for the prosecution to prove these foundational facts. Any other view shall seriously undermine the fairness of the process, as one has to keep in mind that negative proof (proof of innocence, as opposed to proof of commission), by its very nature, is extremely difficult to be established. It is always easier to prove a positive, than a negative. The language of Section 24 (a) demonstrates that a person should be ‘charged’ for an offence under Section 3, in order for the presumption to follow. Charge has to be read to mean a specific charge and not a vague and omnibus allegation. However, once that charge is made, the accused will have justify that the property is not tainted with vice. This can be done by making it reasonably probable that the property is legitimately acquired by lawful means. He can disclose his sources of Income, Earnings or Assets, out of which or means by which he has acquired the property attached. As per fairly established principles of standard of proof, the accused does not have to prove all this to the hilt or beyond all reasonable doubt, but on a standard of preponderance of probability, that is to say, that it is more probable that the property is above board, than not.

15.2            presumption in inter-connected transactions

Where proceeds of crime are layered through plural transactions, the intent to camouflage the source of the property as a derivative of criminality renders it difficult to identify the succeeding transactions as relatable to the initial proceeds of crime. It is for this reason and to effectuate the purposes of the Act that Section 23 incorporates the presumption that where money-laundering involves two or more connected transactions and one or more such transactions is/are proved to be involved in money-laundering, then for the purposes of adjudication or confiscation under Section 8, it shall, unless otherwise proved to the satisfaction of the adjudicating authority, be presumed that the remaining transactions form part of such interconnected transactions i.e., involved in money-laundering as well. (Section 23 of PMLA).

15.3            presumption in cases of records/property found in possession of person

A presumption is raised that property/records/documents found, seized from the possession or control of a person actually belong to such person (from whom they are seized) and the contents of such records are true. Further, there is also a presumption as to the records being in the handwriting/signatures of the person from whose possession they are seized. Due to the operation of the presumption, the onus, once again, is on accused to rebut the same. (Section 22 of PMLA)

  1. Punishment under PMLA

Section 4 of PMLA prescribes the punishment for Money-Laundering as under:

                        Rigorous Imprisonment for a term

            ◦          which shall not be less than 3 years, but

            ◦          which may extend to 7 years/10 years, and

            ◦          shall also be liable to fine.

A notable feature is that there is no upper limit on the fine that may be imposed for an offence under the PMLA. The obvious intent is for the fine imposed to be commensurate to the nature and extent of offence committed and the money laundered.

  1. Conclusion

Money laundering poses a serious threat not only to the financial systems of countries, but also to their integrity and sovereignty. To obviate such threats, certain legislations including PMLA, have been enacted. The above analysis of the PMLA manifests that the Act, although extremely well intentioned, compromises on the fundamental principles of natural justice, fair trial and due-process. In its enthusiasm to fight black money, the Act transgresses upon basic rights and liberties. Some of the provisions under the Act are legally and jurisprudentially unsound and tenuous and may not pass constitutional muster. Since the Act is fairly new, it is expected that the Hon’ble Courts would interpret/strike/read-down these provisions in such a manner, so as to make the Act less prone to arbitrary exercise of power and ensure that its operation is constitutionally compatible.

[1] This article has been co-authored by Anirban Bhattacharya, Partner & Bharat Chugh, Counsel at Luthra and Luthra Law Offices, New Delhi. (bharat.law06@gmail.com) The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of the Firm.

[2] http://www.investopedia.com/terms/m/moneylaundering.asp

[3] FAQ on Money Laundering Act, Enforcement Directorate, Government of India


[4] Chahagan Chandrakant Bhujbal v. Union of India, 2016 SCC OnLine Bom 938.

[5] Section 44 of the PMLA.

[6] If the proceeds of crime involved in money-laundering relates to any offence specified under paragraph 2 of Part A of the Schedule, the provisions of this section shall have effect as if for the words “which may extend to seven years”, the words “which may extend to ten years” had been substituted. Section 4 – proviso.

[7] M/s. Mahanivesh Oils & Foods Pvt. Ltd. v. Directorate of Enforcement – 2016 SCC OnLine Del 475

[8] Section 50(2) and 50(3) of the PMLA. The person summoned is bound to attend and state the truth upon any subject respecting which they are examined or make statements and produce such documents as may be required. These proceedings are deemed to be judicial proceeding within the meaning of Section 193 and 228 of the IPC. The proceedings relating to perjury/contempt of court apply with respect to these proceedings.

[9] Chahagan Chandrakant Bhujbal v. Union of India, 2016 SCC OnLine Bom 938.

[10] Section 44 of the PMLA.


Indian Extradition Law – Explained.

Vijay Mallaya’s arrest in UK has once again brought to the limelight the law of extradition. How the UK Court decides the extradition request is something that would be interesting to follow. There are various grounds available to Mr.Mallaya to challenge the legality of the extradition request and escape extradition. Conversely, with the level of uproar within the country, CBI would also want to give its best shot and try and argue the validity of its request and seek extradition. If this extradition takes place, it would be the first in many respects. Whether the same is likely to be allowed or not, is yet to be seen. But here is a primer on how the extradition law operates :


Jurist Oppenheim defines Extradition as :

Extradition is a delivery of an accused or a convicted individual to the State on whose territory he is alleged to have committed or to have convicted of a crime, by the State on whose territory the alleged criminal happens to be for the time.1


Crime is increasingly turning international. Many serious offences now have cross border implications. Even in cases of traditional crime, criminals frequently cross borders in order to escape prosecution. According to traditional principle of territoriality of Criminal Law, a State will not usually apply its criminal law to acts committed outside its own boundaries. However, there is a growing recognition that states should show solidarity in repression of criminality and co-operate in the international battle against crime. Though States refuse to impose direct criminal sanctions to offences committed abroad (except exceptional situations of extraterritorial jurisdiction), the states are usually willing to cooperate with each other in bringing perpetrators of crime to justice.

Therefore, in view of the growing internationalisation of crime, porous borders, easy mobility, a need was felt to co-operate in legal processes for transfer of criminals, with a view to ensure that no crime goes unpunished and the rule of law is upheld. The device of extradition therefore, evolved under the principle of comity of nations whereby one State surrenders a criminal to the other state for bringing him to justice in country in whose jurisdiction offence was committed. It was realised that trial for a crime ought to be conducted in the vicinity of the crime; this not only enables easy availability of evidence, but a crime punished in the very vicinity of the original offence sends out a strong signal of deterrence and restores societal equilibrium, which the crime had upset.

Extradition, therefore, is a means to resolve two apparently conflicting principles – first being that – criminal jurisdiction extends only to offences committed within geographical boundaries; Secondly, the rule that frowns over a crime/criminal going unpunished on account of jurisdictional reasons.

The law of extradition attempts to dovetail the competing imperatives of comity of nations (respect for a foreign court) on one hand, and international crime control on the other. It ensures harmonisation of these two principles, while at the same time, guaranteeing due process and protection of basic human rights of fugitives, and protection from persecution, cruel punishment, inhuman treatment and torture. Extradition law seeks to achieve this balance by laying down a procedure that is to be satisfied prior to surrender. These procedures reflect a zealous approach with respect to protection of personal liberty and the right to life. This includes a judicial inquiry by a Magistrate, followed by a decision of the Central Government. There are certain guidelines as to the exercise of this power within the Extradition Act and treaty obligations with specific states.

This article is an attempt to give an aerial view of the law relating to extradition, basic principles, procedure and considerations governing extradition of fugitives.


In India, the extradition of a fugitive from India to a foreign country or vice versa is covered by the provisions of the Extradition Act, 1962 which forms the extant legislative basis for this area of law. The act lays down the first principles of extradition law. The obligation to extradite springs out of treaties/arrangements/conventions entered into by India with other countries. Under Section 3 of the Extradition Act, a notification can be issued by the Government of India extending the provisions of the Act to the countries notified. Therefore, for a comprehensive understanding of the law of Extradition, one has to read the Extradition Act in conjunction with specific treaties/arrangements/conventions entered into with various states.


Extradition treaty, as per Section 2(d) of the Extradition Act means ‘a treaty, agreement, or arrangement with a foreign state relating to extradition of fugitive criminals’. An extradition treaty also spells out the conditions precedent for an extradition. It also includes a list of crimes which are extraditable.

It is important to note that even in absence of a treaty, extradition may be permitted if it has the backing of the principle of reciprocity. (The principle of reciprocity will be discussed in greater detail a little later in the article) Suffice would it to say here that the primary consideration for the request of extradition is the assurance of reciprocity. This principle has been upheld in a number of cases 2

(For a list of countries with whom India has extradition treaties/arrangements, click here : http://cbi.nic.in/interpol/extradition_treaties.php)

The next question that arises is – what happens in cases pre-independence treaties ?

The answer to this is provided in Section 9 of the Indian Independence Act, 1947 and Indian Independence (International Arrangements) Order, 1947. It is made clear by these provisions that all international agreements to which India (or more appropriately, British India) was a party would devolve upon the Dominion of India and Dominion of Pakistan and if necessary, the obligations and privileges should be apportioned between them. As far as extradition treaties generally are concerned, the provisions of Section 2(d) of the 1962 Act have been made applicable to all such treaties entered into prior to Independence.3 These treaties, therefore, bind post-independence India too.


5.1 Principle of relative Seriousness of the offence – Extradition is usually permissible only for relatively more serious offences, and not for trivial misdemeanours or petty offences. For instance, the extradition treaty between US and India permits extradition only for those offences which are punishable with more than one year of imprisonment (apart from the condition of dual criminality, which will be dealt a little later).

5.2 Principle of Reciprocity in exchange of fugitives between requesting and requested State;

5.3 Principle of Dual Criminality : This is the most important principle governing Extradition Law. This requires that the offence that the fugitive is alleged to have committed, should be an offence both in the requesting as well as the requested state (however, it may be noted that this refers to the substance of the offence and not the nomenclature given to it in a specific country, which may vary). For instance : In Quattrocchi’s case – the request for extradition was declined as the CBI had not filed the requisite documents making out a specific case for extradition and had not satisfied the court as to the basic requirement of ‘dual criminality’. To satisfy oneself as to the requirement of dual criminality, one has to examine the treaty between the two countries and see if the offence in question finds mention there.

5.4 Existence of prima facie caseagainst the fugitive : This is a safety valve to ensure, at-least on broad probabilities, the existence of a triable case against the fugitive. This is sought to be ensured by a magisterial inquiry that is to precede the actual surrender/extradition. If the case lacks merit on the face of it, extradition may be disallowed at the very outset.

5.5 Principle of proportionality between offence and sentence : Requesting state should respect the principle of proportionality between offence and sentence and punishment for that particular crime should not be excessively harsh or inhuman, in which case extradition request may be declined. The possibility of a death sentence to the fugitive by the requesting state usually leads to the extradition request being turned down or allowed only after an assurance from the requesting state that death penalty will not be carried out.

5.6 Whether the fugitive is seeking asylum from political persecution and trial for an offence of a political character : This requires an enquiry into whether the accused is likely to suffer political persecution or death sentence in the requesting country. In such cases extradition is disallowed. For instance, in the Indian Context, the provision of death penalty in India and alleged human rights violations in prisons/police torture have proved to be major hurdles in acceding extradition requests from India to other countries, especially the UK with the European Commission on Human Rights (ECHR) taking a strict note of the same.5

5.7 Possibility of fair trial in requesting state, post surrender – Before an extradition request is processed, it should be ensured that post-surrender the fugitive will get a fair trial in the requesting country. However, it may be noted that this entails only a broad examination of judicial procedures in the requesting state. This principle also needs to be read subject to the principle of non-inquiry, which stipulates that the judicial process in the requesting country is not to be subjected to finicky evaluations and fairness of judicial procedure in requesting country is not to be normally questioned.6 However, this is not an absolute principle and the requested state may question the procedure of the requesting state if the same is prima facie contrary to fundamental principles of justice and there is a high risk of fugitive being prejudiced by the process of extradition.7 The apprehension of denial of fair trial has to be substantiated with cogent material. In a case where a man chose to reside in USA, received his education and worked there, was not allowed to plead threat or denial of fair trial in US in order to evade extradition.8 In the context of extradition from UK, issues such as human rights violations in jails, minority rights, possible political motivation, have weighed heavily with UK authorities in not acceding to extradition requests made by India. 9

5.8 Rule of specialty, that is to say, when a fugitive is extradited for a particular crime, he can be tried only for that crime. If the requesting state deems it desirable to try the extradited fugitive for some other offence committed before his extradition, the fugitive has to be brought to the status quo ante, in the sense that he has to be returned first to the State which granted the extradition and fresh extradition has to be requested for the crime for which the fugitive is sought to be prosecuted.

These are some of the overarching principles cutting across almost all treaty/convention/agreement obligations with various countries. With these fundamental concepts in mind, let us proceed to some specifics.


Section 2(c) defines Extradition Offence as :-

  • Offence provided in the extradition treaty with the foreign states; (with respect to treaty states)
  • an offence punishable with imprisonment not less than one year under India Law or law of a foreign state. (non treaty states)
  • Composite offence – offence committed wholly, or in part, in India and Foreign State, which would constitute an extradition offence in India.


A fugitive criminal may be extradited. A fugitive criminal as Per S.2(f) is a person who :

  • Who is accused or convicted of an extradition offence committed within the jurisdiction of a foreign state;

What about a person abetting/participating in the commission of an offence in a foreign state, from within the shores of India?

  • Such person is also liable to be extradited and is included within the expansive definition of a ‘fugitive criminal’. S.2(f) of the Extradition Act further applies to :
  • a person who, while in India : conspires,
  • attempts to commit
  • incites
  • participates – as an accomplice in the commission of extradition offence in a foreign state.
  • Therefore, a person in India, attempting/conspiring/abetting the commission of the offence from within the shores of India, is also covered in the definition of a ‘fugitive criminal’ and liable to be extradited.


8.1 Receipt of Information

The process of extradition is set into motion by the receipt of Information/Requisition regarding fugitive criminals wanted in foreign countries. This information may be received :-

  • Directly from diplomatic channels of the concerned country (along with the necessary information relating to the offence and the fugitive); or
  • General Secretariat of ICPO-Interpol in the form of red notices;
  • Other settled modes of communication.

Legality of arrest in Pursuance of a Red Corner Notice issued by Interpol :

  • The Interpol Wing of the CBI is the agency which receives the information and passes it onto the concerned police organisations. All the red notices received are circulated to all State Police Authorities and immigration authorities. However, as held by the Supreme Court in Bhavesh Jayantilal Lakhani v. State of Maharashtra10 – arrest in India is not automatic in case of red corner notice and fugitive criminal can only be apprehended according to the provisions of the 1962 Extradition Act. The situation will, however be different in case of an endorsed warrant, that is to say, where a warrant has been issued by a foreign country against a fugitive in India, and India has an extradition treaty with that foreign country and offence complained of is a extraditable offence, in that case the Central Government has to endorse that warrant and the same can be executed thereafter as per S.17 of the Extradition Act.
  • A Red Corner Notice per se does not give it a status of warrant of arrest; It is merely a request of issuing authority to keep surveillance on the person and provisionally or finally arrest the wanted person for extradition. Therefore, by itself, a red corner notice cannot be the basis of arrest or transfer of an Indian Citizen to a foreign jurisdiction, though issue of red corner notice has several consequences like –
  • Requesting country may make a deportation request (governed by the Foreigners Act);
  • law enforcement agency in India is required to take up follow action with regard to arrest of the fugitive criminal;
  • information emanating from the red corner notice is required to be distributed all over Interpol website;
  • extradition proceedings may follow. 11

The court further ruled that Municipal laws of a country reign supreme in matters of extradition. It is for the State concerned to take decision in regard to red corner and yellow corner notices12, keeping in view municipal laws of the country. It is wrong to say that a red corner notice issued by Interpol should not be tinkered with. When a person complains of a violation of his fundamental rights, he is entitled to judicial review, which is exactly what happened in the following case :-

8.2 Magisterial Inquiry

  • Where a requisition is received, the Central government may order an enquiry by a magistrate directing him to enquire into the case. The initial inquiry by the Central Government before ordering a magisterial inquiry need not be a detailed one13 No pre-decisional hearing is required to be given to the fugitive before ordering magisterial enquiry 14 The function of the Magistrate under this Section is quasi judicial in nature. The magistrate directed to proceed with the enquiry need not have territorial jurisdiction.15
  • On receipt of order, the Magistrate shall issue a warrant of arrest of the fugitive criminal;
  • Once the fugitive criminal appears, or is brought before Magistrate pursuant to the warrants, the magistrate inquires into the case.


  • By inquiry it is meant that the Magistrate shall :
  • take such evidence as may be produced in support of the requisition of the foreign state;
  • take such evidence on behalf of the fugitive criminal, including any evidence to show that offence for which the fugitive criminal is accused or convicted is not a extraditable offence.

The word ‘evidence’ used here is not be construed as evidence in its strict legalistic sense and must be read in context of Section 10 of the Extradition Act.16 The Magistrate can receive depositions, exhibits, documents in evidence during the inquiry. Judicial documents stating facts, if duly authenticated, are also receivable in evidence. This includes depositions/orders of foreign courts. It is also well established that the requesting state has the locus standi in extradition proceedings considering it has a stake in success of extradition proceedings. Therefore, the requesting state may become party to and participate in the inquiry proceedings.

Scope of Inquiry

In the inquiry, the magistrate has to satisfy himself as to the existence of a sound basis and material, which justifies the extradition of the person sought to be extradited. The enquiry before the magistrate cannot be converted into a full fledged trial of the offence for which the extradition of the fugitive is sought. By the inquiry, the magistrate has only to find out if, based on the evidence and material produced in support of the requisition of foreign sate and that produced by the fugitive, a prima facie case is made out in support of the requisition or not. No formal trial is to be held. The accused, however, can lead evidence to prove that the offence is not extraditable or of a political character; however, he does not have an unfettered right, which can be extended so as to allow him to lead any evidence or examine any number of witnesses, whether relevant or irrelevant or which have no nexus with the matter and does not advance the case of the petitioner in any way. The Delhi High Court in Kamlesh Babulal Aggarwal17 has equated the extent of scrutiny in inquiry to that akin to framing of charge. Even a strong suspicion founded upon material and presumptive opinion would enable the court to recommend extradition.

The word ‘evidence’, therefore, has to be given a reasonable interpretation and has to be read to mean evidence necessary to and relevant to the prima facie enquiry and nothing more. It should be reiterated that the inquiry envisaged under the Act culminates in a report, and not a finding of guilt or innocence of the fugitive.

What happens if the ‘extradition offence’ is one which is triable by a Court of Sessions and not a Magistrate. Whether in such cases too, it is the Magistrate who has to conduct the inquiry ?

The answer is Yes. This does not prevent the magistrate from going ahead with the enquiry. Even if the extradition offence is triable by a Sessions Judge/Special Judge as per the law of India (had it happened in India), the Magistrate is deemed to be having the power to inquire into such a case. This is borne out from the legal fiction18(deeming provision) provided under Section 7(1) of the Extradition Act.19


  • The option of anticipatory bail as well as regular bail is available to the accused fugitive criminal. For the purposes of this section, the Magistrate is vested with the same powers and jurisdiction as Court of Session under the Code of Criminal Procedure, 1973 (hereinafter “Cr.P.C”).
  • As regards power to seek cancellation of Non-Bailable Warrants during the pendency of the Extradition Proceedings : The Madras High Court in State v. Subhash Chandra Kapoor20 has ruled that the same cannot be permitted, and only option that the accused has is to seek discharge from Central Government Under Section 29 of the Extradition Act.


Section 34B of the Extradition Act, provides that on receipt of a urgent request from a foreign state, the Central Government may request the Magistrate to issue an immediate provisional warrant for the arrest of fugitive criminal. As per Section 34-B(2) – A fugitive criminal arrested under sub-section (1) shall be discharged upon the expiration of sixty days from the date of his arrest if no request for his surrender or return is received within the said period. This has judicially been held to be a non-derogable time limit and the magistrate has no jurisdiction to extend this period further or direct the government to take steps as per Extradition Act.21


As per the Judgment in Salwant Singh Sadhu22  Action can also be taken under the provisions of Section 41 (1) (g) of the Cr.P.C., 1973 which authorize the police to arrest a fugitive criminal without a warrant. However, in such a case, they must immediately refer the matter to Interpol Wing for onward transmission to the Government of India for taking a decision on extradition or otherwise. In absence of there being a follow-up extradition request, the person will be discharged and cannot be kept in detention. The court held that the same cannot be done, as Section 41(1)(g) is applicable only on the condition that the offence committed at any place out of India should be counted as an offence by Indian Law. This provision cannot be pressed into service when there is a Red Corner Notice. The consequence of the Red Corner Notice is that the requesting country may make deportation request or to take follow up action with regard to the arrest of fugitive Criminals. However, the main criteria is that the Extradition proceedings has to follow. Under Section 9 of the Act, the Magistrate may issue a warrant of arrest. Therefore, in absence of a formal request by the requesting state i.e Srilankan Government for the extradition of the Petitioner – registration of First Information Report under Section 41(1)(g) of Cr.P.C is not proper. With these remarks, the proceedings against the petitioner were quashed.


The inquiry by the Magistrate may result either in :

  • Discharge of the fugitive – If the magistrate is of the opinion that no prima facie case is made out in support of the requisition of foreign state; or
  • Positive finding in favor of extradition – If prima facie case is made out, the magistrate may commit the fugitive criminal to prison to await the orders of the Central Government, and shall report the result of his inquiry to the Central Government, and shall forward together with his report, any written statement that fugitive criminal may desire to submit for the consideration of the Central Government.


Under the scheme of the Act, both the magistrate and the Indian Government, which makes the executive decision in respect of extradition, must bear in mind the substantive restraints on the extradition power (sections 29 and 31).

If, the Central Government, on receipt of report of the Magistrate, and statement of the accused, is of the opinion that the fugitive ought to surrendered to the foreign state, it may issue a warrant for the custody and removal of the fugitive criminal and for his delivery at place and to a person to be named in the warrant.


No. In case the Central Government is of the option that the fugitive criminal cannot be surrendered/returned pursuant to a request, it may, as it thinks fit, take steps to prosecute such fugitive criminal in India. (S. 34A of Extradition Act).

Now, the next question that logically arises is : whether the government of India can try the fugitive for an offence that has admittedly occurred beyond its territorial jurisdiction ?

Yes. This is made possible by way of a legal-fiction engrafted under Section 34, which, for such limited purposes, deems such offences to have been committed in India. Such extra-territorial application of law by legal fiction is put in place to ensure that, merely because of the fact extradition is not granted in a particular case for some reason, the fugitive should not escape punishment altogether.

This proceeds upon the internationally established principle of ‘aut dedere aut judicare”, which, simply put, means ‘either extradite or to punish’. As noted in the Final Report of the International Law Commission (2014) on “the obligation to extradite or prosecute” (aut dedere aut judicare):

“The role the obligation to extradite or prosecute plays in supporting international cooperation to fight impunity has been recognized at least since the time of Hugo Grotius, who postulated the principle of aut dedere aut punire (either extradite or punish):

‘When appealed to, a State should either punish the guilty person as he deserves, or it should entrust him to the discretion of the party making the appeal.’

The modern terminology replaces “punishment” with “prosecution” [aut dedere aut judicare] as the alternative to extradition in order to reflect better the possibility that an alleged offender may be found not guilty.

In other words, if a State is unwilling to extradite a fugitive criminal, it should undertake the responsibility of prosecuting him or her, the theory being that a criminal should not go unpunished.


As per Section 31, A fugitive criminal shall not be surrendered or returned if :

  1. the offence complained of by the foreign state, is of a political character, directly, or his requisition/warrant, is made for an apparently non-political offence, merely as subterfuge to infact punish him for an offence of Political Character (Schedule to the Extradition gives a list of offences, which are not to be regarded as offences of a political character for the purposes of the Act);
  2. prosecution of the offence is time barred in the foreign state;
  3. he/she is accused of any offence in India other than the offence for which the extradition is sought;
  4. he/she is undergoing sentence under any conviction in India;
  5. until expiration of 15 days from the date of his being committed to prison by magistrate (post inquiry u/s 5 of the Act);


The answer is No. Section 21 of the Extradition Act places an embargo on trial of a fugitive for any offence other than the extradition offence. The exceptions to this rule are cases where the fugitive is in fact charged for an offence which is a minor cognate offence of the offence charged originally, or where the foreign court gives its consent to the charge for the newer offence. This is in accord with the principle of speciality as discussed earlier in the paper.


No. In deportation, a person is ordered to leave a country and is not allowed to return to that country. In exclusion, a person is prohibited from staying in a particular part of a sovereign state. Deportation and Exclusion are non-consensual orders that do not require a treaty obligation, whereas extradition depends on existence of treaty or some other arrangement between two States. Extradition is resorted to in cases of serious offences and is governed by the Extradition Act.23 As opposed to this, deportation is governed by the Foreigners Act, 1946, read along with orders/notifications and is essentially a governmental decision with little judicial review permissible.

Needless to state, Extradition and Deportation find themselves at cross roads in a variety of situations. One such instance is Section 31(1)(d) of the Extradition Act, which reads as ::

“A fugitive criminal shall not be surrendered or returned to a foreign State or commonwealth country…if he has been accused of some offence in India, not being the offence for which his surrender or return is sought, or is undergoing sentence under any conviction in India until after he has been discharged, whether by acquittal or on expiration of his sentence or otherwise.”

On a plain reading this will also apply to offences under the Foreigners Act, 1946, since there is a clear embargo on extradition for as long as the accused is not discharged, acquitted or released after the expiration of a sentence in the other case.

However, this is where Section 33 of the Extradition Act comes into the picture. It begins with a non-obstanteclause, and lays down that nothing in this act that shall work to prevent the Indian government from using its powers under the Foreigners Act, 1946 to deport a person. Therefore, a fugitive can be deported even though he is undergoing sentence in a prosecution in India.

The non-obstante clause in section 33 enlarges the power of deportation under the Foreigners Act and allows the government to circumvent the considerations in the Extradition Act and allow deportation. This may allow the government to actually extradite the person, under the guise of deportation. This may be construed to allow the government to deport a person even in the absence of an inquiry by a magistrate, and even when no prima faciecase exists against him, or even where his deportation may entail a trial for a political offence. These ‘disguised extraditions’24 may amount to denial of due process and circumvention of the beneficial provisions of the Extradition Act.

The judicial trend has been to uphold the State’s sovereign power to deport and courts seldom embark on a judicial review of deportation. Jurisprudence needs to develop on this count to ensure that power of deportation is exercised in a just, fair and reasonable manner (in order for it to pass constitutional muster) and not colorably as a cover-up for a disguised extradition.


Section 105 of the Cr.P.C stipulates that the Court desiring to issue summons/warrant to any person residing in any country/place outside India, has to send the summons to the authority in the foreign country notified by the Central Government in this regard. This notification is usually carried out through what is known as a Mutual Legal Assistance Treaty (hereinafter “MLAT”). India has MLATs with various countries. The authority notified under the MLAT is entrusted with the task of facilitating service of Summons/Warrants in the foreign country.

In order to secure the appearance of an accused, the courts usually resort to issuance of summons in the first instance. Pursuant to the service of summons if the accused fails to appear or there are other circumstances which provide a reason to believe that the accused is trying to avoid the process of law, the court may proceed to issue warrants. Since the issuance of Warrants has coercive consequences insofar as the accused may be arrested and brought before the court, issuance of warrants shall trigger an extradition request. Extradition request by an Indian Court has to be routed through the Ministry of Home Affairs which is sent through the concerned Indian Missions/Embassies in the foreign country. In case of MLAT countries, the mode and manner of communication as laid down in MLAT is to be followed. For instance, in the case of an extradition request to the US, the request for extradition has to be supported by documents, statements which describe the identity, probable location of the person sought. The request also has to be supported by information describing the facts of the offence and procedural history of the case. In addition to this, a statement of the provisions of law describing the essential elements of the offence/punishment is also required. The request for extradition also has to be accompanied with a copy of the warrant/order of arrest issued by the judge, charging document (if any). Once the extradition request is made in conformity with the provisions of the MLAT, the foreign government takes a decision on the same, broadly on the same principles as highlighted above such as dual criminality, rule of specialty et al and a judicial inquiry may also precede grant or denial of such a request.


Extradition is a great step towards international cooperation in the suppression of crime. States should treat extradition as an obligation resulting from the international solidarity in the fight against crime. With the growing internationalisation of crime and judicial developments, extradition law is in a state of great flux. The courts are grappling with myriad issues including : interpretation of treaties and arrangements vis-a-vis municipal extradition law, balancing of due process versus principle of adherence to comity of courts, the effect of a red corner notice, the role of international agencies, the interface of powers of deportation with extradition, etc. Jurisprudence in the area of extradition law is evolving at a rapid pace and it is hoped that the Indian Judiciary will match up to global standards and resolve the extremely vexing legal challenges posed to it.

This article has been co-authored by Anirban Bhattacharya, Partner & Bharat Chugh, Counsel at Luthra and Luthra Law Offices, New Delhi. Anirban and Bharat have advised in one of the most complex extradition cases in India and abroad. 


1. Oppenheim’s International Law, seventh edn, p 631

2. Marie-Emmanuelle Verhoeven v. Union of India and Others (2016) 6 SCC 456

3. Marie-Emmanuelle Verhoeven (supra); Also see : Rosiline George v. Union of India, (1994) 2 SCC 80. Questions relating to Obligation to Prosecute or Extradite (Belgium v. Senegal), 2012 ICJ Reports 422; Also see : Abu Salem Abdul Qayoom Ansari v. State of Maharashtra, (2011) 11 SCC 214.

Section 2(d) of Extradition, “extradition treaty” ..includes any treaty[agreement or arrangement] relating to the extradition of fugitive criminals made before the 15th day of August, 1947, which extends to, and is binding on, India;

4. “Prima Facie” has a definite connotation in law. It is defined as “at First Sight”; as “accepted as so until proved otherwise” or “on face of it” or “So far as it be judged from the first disclosure”. For a discussion on concept of ‘prima facie’ see Kamlesh Babulal Aggarwal v. UOI, 2008 SCC OnLine Del 533.

5. Her Majesty’s Knights in Sullied Armour, Bhavna Vij-Aurora, Outlook, November-14, 2016.

6. Schmidt Case(1987) 1 SCR 500

7. Abu Salem Abdul Qayoom Ansari v. State of Maharashtra & Anr. (2011) 11 SCC 214.

8. Kamlesh Babulal Aggarwal v. UOI, 2008 SCC OnLine Del 533.

9. Her Majesty’s Knights in Sullied Armour, Bhavna Vij-Aurora, Outlook, November-14, 2016.

10. (2009) 9 SCC 551

11. (2009) 9 SCC 551

12. Issued in case of missing persons.

13. Pragnesh Desai v. Union of India and Anr, (2004) ILR I Del 95 (DB).

14. Nina Pillai (Smt) & Ors. v. UOI (1997) Cr LJ 2358 (Del)

15. Section 5 of Extradition Act overrides principle of jurisdiction laid down in Cr.P.C- see Rosiline George v. Union of India, (1994) 2 SCC 80.

16. Sarabjit Rick Singh v. UOI (2008) 2 SCC 417.

17. Kamlesh Babulal Aggarwal v. UOI, 2008 SCC OnLine Del 533.

18. Legal fiction is a supposition of law as against facts.

19. Flemming Ludin Larsen v. Union of India (1999) 105 Cr LJ 526 (Del).

20. State v. Subhash Chandra Kapoor, 2012 SCC OnLine Mad 1801

21. Bansil Mutei Shiblaq v. Union of India and Ors. (2007) SCC OnLine Del 562.

22. Salwant Singh Sadhu v. State of Delhi and Others, 2001 SCC OnLine Del 442. Also see: Mohammed Zubair Fauzal Awam v. State (Represented by the Inspector of Police & Anr), 2011 CRI LJ 2975: where applicability of Section 41(1)(g) of the Cr.P.C without a formal extradition request was held to be improper.

23. Abu Salem Abdul Qayoom Ansari v. State of Maharashtra (2011) 11 SCC 214.

24. See O’Higgins “Disguised Extradition – The Soblen Case” 27 Mod. L. Rev. 521 (1964), and Thornberry “Dr. Soblen and the Alien Law of the United Kingdom” 12 ICLQ 414 (1963).


Discharge in Summons Cases.

The recent order by the Hon’ble Supreme Court in Amit Sibal v. Arvind Kejriwal1, has again brought to the forefront, the short but extremely important question as to : Whether the magistrate, in a ‘summons case based on a complaint’ has the power to drop proceedings and discharge an accused, or not ?

The question assumes great practical significance insofar as many criminal cases such as defamation, dishonour of cheques, amongst other cases of relatively private character are triable as summons cases (based on private complaints, as opposed to investigation and charge-sheet by the police2).

To set the context right for the discussion, it would be apposite to recapitulate that, earlier in 2014, in Arvind Kejriwal and others versus Amit Sibal & Anr3 (in a case alleging defamation by Delhi Chief Minister Mr. Arvind Kejriwal) a Single Judge of the Hon’ble High Court of Delhi had ruled that the ‘Magistrate has the power to hear the accused at the time of explanation of substance of the accusation, and if no offence is made out, to drop proceedings against him at that stage itself, and the court need not, in all cases, take the matter to a full blown trial‘.

Aggrieved by this decision, the matter was carried by the complainant (Mr.Amit Sibal) to the Supreme Court. The main ground of attack was that ‘The Magistrate, in a Summons Case, has no power to drop proceedings, in absence of a specific provision in the CrPC to that effect‘ Pending hearing on the matter, the Supreme Court had stayed the operation of the High Court decision. The Respondents (representing the accused) did not dispute this legal position (as to CrPC not stipulating a ‘discharge scenario’ in summons cases) and the Supreme Court apparently agreed with this proposition and matter was remanded to the High Court for fresh consideration from the viewpoint of Section 482 of the CrPC, effectively implying that Trial Court would have no such power.

Since the order of the Supreme Court is basically in the nature of a ‘consent order’, an independent discussion of the legal position in this regard becomes extremely important and this is what the authors seek to do, by way of this article.

An overview of the Statutory Realm

Speaking purely in terms of statutory provisions, an examination and juxtaposition of the provisions relating to trial of ‘Warrants Cases’ and ‘Summons Cases’ would quickly reveal that as far as Trials of Sessions and Warrants cases (for offences punishable with imprisonment of 2 years or more) are concerned, there are specific provisions in the form of Section 227 and 239 CrPC, respectively, which stipulate affording an opportunity to the accused to make submissions on the point of charge and seek discharge at the very threshold. This is similar to a ‘no case to answer’ motion, wherein accused argues that even if the prosecution case is accepted at face value and taken to be correct, no case is made out against the accused. This opportunity is specifically provided vis-à-vis Warrants Cases. However, there is no analogous provision as far as Summons Cases are concerned.

Chapter XX specifically deals with the procedure relating to trial of Summons cases by Magistrates.

Section 251 of the CrPC reads as follows :-

251. Substance of accusation to be stated.— When in a summons case the accused appears or is brought before the Magistrate, the particulars of the offence of which he is accused shall be stated to him, and he shall be asked whether he pleads guilty or has any defence to make, but it shall not be necessary to frame a formal charge.

Even on a bare reading, it becomes apparent that there is no specific power of discharge or dropping of proceedings available with the Magistrate in a Summons Trial. However, the judicial opinion on this aspect is far from consistent and the position of law has meandered a great deal. A short chronology of decisions dealing with this aspect would be apposite.

Judicial Interpretation of Section 251 of the CrPC

The issue was first dealt-with at length by the Supreme Court in K.M.Matthew v. State of Kerala4 where the accused had sought recalling of the summoning order in a Summons Case.

The facts of the case lie in very narrow conspectus; the accused (who was a Chief Editor of a daily newspaper) was summoned for an offence u/s 500 of the Indian Penal Code, 1860 (“IPC”) (defamation). The Chief Editor, on appearance, moved an application seeking ‘dropping of proceedings’ on the premise that there was no specific allegation against him and offence against him was not made out. The Magistrate had accepted this plea and held that complaint, insofar as it concerned the Chief Editor, could not be proceeded with.

On the matter finally reaching the Supreme Court, it was held that:

“If there is no allegation in the complaint involving the accused in the commission of the crime, it is implied that the Magistrate has no jurisdiction to proceed against the accused. It is open to the accused to plead before the Magistrate that the process against him ought not to have been issued. The Magistrate may drop the proceedings if he is satisfied on reconsideration of the complaint that there is no offence for which the accused could be tried. It is his judicial discretion. No specific provision is required for the Magistrate to drop the proceedings or rescind the process. The order issuing the process is an interim order and not a judgment. It can be varied or recalled. The fact that the process has already been issued is no bar to drop the proceedings if the complaint on the very face of it does not disclose any offence against the accused”

With these observations, the proceedings against the accused were dropped. This judgment gave rise to many questions such as, would not such a decision amount to the court reviewing its own order.

The correctness of the legal proposition set out above in K.M.Mathew (supra) came up for consideration before the Supreme Court in in Adalat Prasad v. Rooplal Jindal & Ors5 wherein a three judge bench was specially constituted since the validity of K.M.Mathew (supra) was open to question. The Court held that “If the Magistrate issues process without any basis, the remedy lies in petition u/s 482 of the CrPC, there is no power with the Magistrate to review that order and recall the summons issued to the accused”6

The decision in Adalat Prasad was reaffirmed by the Supreme Court in Subramanium Sethuraman v. State of Maharashtra & Anr7 (which was a Summons Case relating dishonour of cheque u/s 138 of the Negotiable Instruments Act, 1881 – “NI Act”), wherein it was held that : Discharge, Review, Re-Consideration, Recall of order of issue of process u/s 204 of the CrPC is not contemplated under the CrPC in a Summons Case. Once the accused has been summoned, the trial court has to record the plea of the accused (as per Section 251 of the CrPC) and the matter has to be taken to trial to its logical conclusion and there is no provision which permits a dropping of proceedings, along the way.8

An aberration

This position held sway for a long time, till the Supreme Court in Bhushan Kumar v. State (NCT of Delhi)9 ruled that the Magistrate has the power to discharge an accused in a Summons Case. The relevant observations of the Court are as under :

“It is inherent in Section 251 CrPC that when an accused appears before the trial court pursuant to summons issued under Section 204 in a Summons Trial case, it is the bounden duty of the trial court to carefully go through the allegations made in the charge-sheet or complaint and consider the evidence to come to a conclusion, whether or not, commission of any offence is disclosed and if the answer is in the affirmative, the Magistrate shall explain the substance of the accusation to the accused and ask him whether he pleads guilty otherwise, he is bound to discharge the accused as per Section 239 of the CrPC”

The above observation raises more questions than it answers:

  1. Firstly, if one delves into the facts of Bhushan Kumar (supra) it is revealed that the case concerned an FIR u/s 420 of the IPC, which is punishable with upto 7 years of imprisonment, and was therefore, a Warrants Case and not a Summons Case; in such a factual background, the discussion of Section 251 of the CrPC seems inapposite as Section 251 of the CrPC applies only qua a Summons Case;
  2. Secondly, in the context of a Summons Case, the applicability of words ‘discharge’ and Section 239 of the CrPC is questionable; Section 239 of the CrPC figures in a separate and dedicated chapter (Chapter XIX) and applies only with respect to a Warrants case and not a Summons case (Chapter XX). The case before the court was a warrants case. In a matter triable as Warrants Case the possibility of discharge was never in question.
  3. Therefore, the question as to whether the Magistrate is empowered to discharge an accused in a Summons Case never really arose before the court in this case. In fact, the case involved only the following two questions:
    1. Whether taking cognizance of an offence by the Magistrate is same as summoning an accused to appear?
    2. Whether the Magistrate, while examining the question of summoning an accused, is required to assign reasons for the same?

    Therefore, in absence of this question arising before the court, and the case in question being a Warrants Case which specifically provides for ‘discharge’, Bhushan Kumar (supra) may not have precedential value for the following reasons:

    1. Observations qua Summons Case cannot be considered to be the ‘ratio decidendi’ as the immediate case before the court was one triable as a Warrants Case.
    2. The court’s attention not having been drawn to previous decisions in Adalat Prasad, Subramanium Sethuraman etc, and for that reason, the decision may be per incuriam.
    3. being incongruent with the clear scheme of CrPC and procedure to be adopted in a Summons Case (expressly set out in Chapter XX of the CrPC)

The decision of the court in Bhushan Kumar (supra) was followed in a catena of decisions including Urrshila Kerkar v. Make My Trip (India) Private Ltd10 with the following observations:

“9. It is no doubt true that Apex Court in Adalat Prasad Vs. Rooplal Jindal and Ors. (2004) 7 SCC 338 has ruled that there cannot be recalling of summoning order, but seen in the backdrop of decisions of Apex Court in Bhushan Kumar and Krishan Kumar (supra), aforesaid decision cannot be misconstrued to mean that once summoning order has been issued, then trial must follow. If it was to be so, then what is the purpose of hearing accused at the stage of framing Notice under Section 251 of Cr.P.C. In the considered opinion of this Court, Apex Court’s decision in Adalat Prasad (supra) cannot possibly be misread to mean that proceedings in a summons complaint case cannot be dropped against an accused at the stage of framing of Notice under Section 251 of Cr.P.C. even if a prima facie case is not made out.”

Course Correction

The recent order of the Supreme Court in Amit Sibal (supra), appears to be the much needed course correction and seems to suggest that the trial court has no power to drop proceedings/discharge in a Summons Trial. This also appears to be in sync with the settled judicial view and also the scheme of CrPC, wherein separate and distinct procedures have been laid down for Warrants, as opposed to Summons Cases (or those cases triable summarily for that matter).

The Delhi High Court recently in R.K. Aggarwal v. Brig Madan Lal Nassa & Anr11 expressly recognised the absence of power of discharge in a summons case by holding:

“There is no basis in the contention of the petitioners for discharge for the reasons that firstly, there is no stage of discharge in a summons case. Under Chapter XX of Cr.P.C, after filing a private complaint, in a summons case, the accused is either convicted or acquitted. There is no stage of discharge of an accused at any stage under Chapter XX of Cr.P.C”


The very fact that in a Summons Case there is no specific provision of a discharge, as opposed to a Warrants Case (S.227/239/245 of the CrPC) speaks volumes as to the legislative intent of not having an elaborate hearing at the time of framing of notice. What also deserves to be borne in mind is the fact that Summons Cases were not envisaged to be as long-drawn out as Warrants Case and the need for a specific discharge hearing was ousted.

It was expected that, since Summons Cases relate to offences of relatively lesser gravity and capable of being completed expeditiously, having a dedicated charge hearing would only delay matters unnecessarily, without any corresponding benefit. The legislative intent to have a relatively abridged form of trial in Summons Cases is writ large on the face of the provisions.12

The latest decision in Amit Sibal (supra) is in perfect harmony with the statutory scheme. However, since the decision is more in the nature of a consent order, the authors feel that an authoritative judicial decision that examines the nuances of the issue is required. The decision should also take into account the fact that Summons Cases, for which a separate and abridged form of trial has been envisaged, now for all practical purposes take as long as Warrants Cases, and there is no ostensible reason as to why the accused should not be able to argue for a discharge in such cases and has to mandatorily face a protracted trial.


A decision which reads into Section 251 itself ‘the power of discharge’ may be required. One way in which the same can be done is by holding that the power to frame notice in a case, has implicit within itself the power not to frame a notice when no case is made out against the accused. Such a judicial pronouncement is required to clear the air on this issue. Amendment of the law is, of course, the more appropriate way of bringing about a change, wherein the desirable results may be achieved without having to stretch the language of the section unnecessarily.

Till then, reliance on Subramanium Sethuraman (supra) (supported broadly by Amit Sibal v. Arvind Kejriwal –supra) and the bare provisions of CrPC constrain us to conclude that there is no such provision in CrPC that permits a ‘discharge’ or ‘dropping of proceedings’ in a Summons Case. Having said that, the remedy of filing a revision u/s 397 of the CrPC and/or a petition seeking quashing of proceedings u/s 482 of the CrPC before the Hon’ble High Court is always available with the accused, who can argue, in appropriate cases, that the continuance of proceedings against him amounts to abuse of process of law, and ends of justice demand that proceedings are quashed.


1. 2016 SCC OnLine SC 1516

2. In contrast to Summons Cases based on private complaint, in cases based on FIR (culminating into a Police Report u/s 173 of the CrPC), Section 258 of the CrPC specifically provides for dropping of proceedings. However, a similar provision is conspicuously absent in Summons Cases based on a private complaint.

3. (2014) 1 High Court Cases (Del) 719

4. (1992) 1 SCC 217

5. (2004) 7 SCC 338.

6. It should be noted that in Adalat Prasad (supra), the case against the accused was triable as a Warrants Case and not a Summons Case. It is pertinent to flag that in a warrants case the accused gets an opportunity to argue that no case is made out against him and seek a discharge, to protect himself from the rigmarole of a full-fledged trial, which might take years. Whereas, there is no analogous provision as far as Summons Cases are concerned, as demonstrated above.

7. (2004) 13 SCC 324

8. Though there is no provision for discharge in such cases, but the dual remedy of invoking Section 482 as well as revisional jurisdiction u/s 397 of the CPC was clarified by the Supreme Court in Dhariwal Tobacco v. State of Maharashtra (2009) 2 SCC 370.

9. (2012) 5 SCC 424

10. 2013 SCC OnLine Del 4563. To the same effect, also see : Raujeev Taneja v. NCT of Delhi (Crl.M.C. No.4733/2013 decided on 11th November, 2013)

11. 2016 SCC OnLine Del 3720. Also see : R.P.G. Transmission Ltd v. Sakura Seimitsu (I) Ltd. & Ors, 2005 SCC OnLine Del 311, Raj Nath Gupta & Ors v. State and Anr. 1999 SCC OnLine Del 683 and Devendra Kumar Jain v. State, 1989 SCCOnLine Del 121

12. 41st Law Commission Report, p. 178, para 22.1

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

This article has been co-authored by Anirban Bhattacharya, Partner & Bharat Chugh, Counsel at Luthra and Luthra Law Offices, New Delhi. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of the Firm.

*The article first appeared on MONDAQ.

Criminal Justice System · Uncategorized

Role of a Magistrate in a Criminal Investigation

Authored by Bharat Chugh[1]


A young bank official named Joseph is arrested by two policemen one fine morning, without even being informed why. Joseph is outraged. Till his death, Joseph does not get to know what is he being tried for. Joseph is the protagonist of Franz Kafka’s seminal work ‘The Trial’, which is the story of Joseph’s case, his trial and tribulations with : the invisible Law, absent judge, opaque court processes, police excesses and the high-handedness of our criminal justice system. He dies a year later at the hands of the very policemen who had arrested him, in a striking finale of how the system consumes him. Like all fiction, the story is a lie, but one that says a lot of truth about our criminal justice administration, or at any rate, its prevailing stereotype, which has a definitive impress of truth.

Enter G, a 6-year old girl taken to a field, enticed with sweets, and then raped; her delicate face smashed beyond recognition, having been bludgeoned to death by bricks. Her little feet chopped-off from right above her ankles. You see, she was wearing silver anklets which wouldn’t come-off otherwise. The case was based on circumstantial evidence. X was acquitted by courts – on all counts, primarily on account of : grave lapses by the investigative/prosecution agencies, non-examination of material witnesses and obliteration of vital evidence. The sheer agony of the court is palpable in the judgment[2].

Joseph was arbitrarily arrested, falsely prosecuted and ultimately loses his life, while the court remains oblivious. Conversely, in G’s case, the accused who brutally cut short her life, went scot free on account of glaring omissions in the investigation. Irregularities which could have been nipped in the very bud by a more involved, responsive & pro-active magistracy.  In both these cases, it is not Joseph or X who is at trial, it is ‘us’.

This paper makes a case for a more pro-active & responsive magistracy. It is an endeavour to highlight the areas in which magistrates, as the protectors of rights of people, can make meaningful interventions during investigation, with a view to protect liberty and also to ensure an effective investigation.  An attempt would be made to analyse the relevant statutory provisions and case law on the subject, and also to draw comparative insights from the conception and role of a Magistrate in the french criminal justice system. 


Magisterial Vigil during Investigation.

In chronological order, the role of magistrate in investigation can be understood in terms of these five stages :

Stage – I –     Soon after the registration of FIR

Stage – II –   In cases where the arrest is effected by the Investigating officer, on his production before the court and while deciding the question of the validity of arrest and need for further custody – Judicial or Police.

Stage – III- Magisterial interventions while deciding misc. applications for recording of statement(s) u/s 164 of the Cr.P.C, test identification parades, etc.

Stage – IV – Monitoring of investigation and Comparison with French Model.

Stage – V – Further investigation, post-filing of police report u/s 173 of the Cr.P.C


Stage – I – Soon after the Registration of FIR 

Criminal justice Administration is set into motion with the receipt of information with respect to the commission of a cognizable offence[3]. Section 157 mandates the sending of a report to this effect to the area magistrate forthwith, to bring the matter to his scrutiny. This is a safeguard meant to prevent police excess, embellishments, false prosecutions and non-investigation at a crucial stage. A copy of the FIR (often termed ‘occurrence report’) is to be brought to the seisin of the magistrate as soon as possible, and any delay can adversely affect the prosecution case at trial, if not explained adequately. In heinous cases, a copy of the FIR alongwith an endorsement is dispatched via a special messenger to the area magistrate or duty magistrate. Delhi High Court Rules[4] require the magistrate to make an endorsement on the copy of the FIR regarding date/time and place of receipt. The Delhi High Court recently in Rafiq[5] has directed magistrates to mention the aforesaid details & sign such copy of the FIR legibly, forthwith on its receipt, so that the time of registration of FIR can be ascertained with exactitude.


Stage II – Production of the Accused before the court for the first time.

“Eternal Vigilance, is the price of liberty….” [6]


Law of Arrest

Arrest leads to deprivation of liberty and, therefore, has great ramifications for the person arrested. Any denial of personal liberty has to be through a due process[7]. A process that is non-arbitrary, just, fair and reasonable.No arrest shall be made, merely because it is lawful for the police officers to do so and each arrest has to be justified on ground of its imperative need[8]  and reasons are to be recorded in writing by the police officer effecting the arrest. According to the latest amendments in the CrPC, in cases covered u/s 41(1)(b) of the CrPC, i.e where the case relates to offence punishable with imprisonment of 7 years or less, arrest can be made by the police only on satisfaction (recorded in writing) to the effect that, the arrest is imperative for :

✔         prevention of further offences;

✔         proper investigation of the offence;

✔         prevention of tampering or disappearance of evidence;

✔         prevention of any undue influence/threat to the complainant or witnesses;

✔         ensuring his presence in the court;


The requirement of recording of reasons is expected to transcend the essentially subjective decision of arrest, to greater objectivity and to rule out arbitrary arrests, made with a view to wreak vendetta.[9] The Magistrate is a bulwark against unnecessary detention and abuse of power and process.[10]


The recording of these reasons, therefore, is a condition precedent for arrest.


Magisterial check on police powers of arrest.

The sufficiency of reasons for arrest recorded by the police officer is to be examined by  magistrates and not to be accepted at the mere ipse dixit of the police. After examining the validity of the arrest, the next point of inquiry is : whether there are grounds to keep the accused in detention or whether he can be released on bail, or otherwise discharged. The Supreme Court recently in Arnesh Kumar v. State of Bihar [11] has ruled that decision to detain & remand is not a mechanical act and a remand order has to be a reasoned order and should reflect due application of mind. Mere mechanical reproduction of above elements in remand application is also to be deprecated. These conditions have to be justified in the factual matrix of each case.  The fact that 76 % of the prisoners in Tihar Jail[12] are undertrials is evidence of a rather trigger-happy (or rather custody-happy) magistracy. Magistrates, to borrow the expression of Lord Atkin, ought to avoid being more executive-minded than the executive[13] and consider the question of bail/release by special order on the first production suo motu.

The anxiety as to participation in investigation by the accused is allayed by Section 41A of the CrPC, which provides for service of a notice on the accused by the Investigating Officer (in short ‘IO’) seeking participation in investigation and the necessary information from him. If the accused does not comply with the notice, he can be arrested, after recording the factum of his non cooperation in writing.


Safeguards relating to arrest

The magistrate is also under an obligation to peruse the Arrest Memo/Medical examination report of the accused (to rule out cases of police torture) as well as the victim (to preserve crucial medical evidence).[14] It is also incumbent on the Magistrate to ensure production of the accused before itself within 24 hours of arrest[15] and communication of information to relatives/friends about his arrest and compliance of the detailed guidelines laid down by the Supreme Court in D.K.Basu (supra). The Magistrate is to also ensure that the copy of the FIR is uploaded on the internet, forthwith, except of course, in cases where the matter is sensitive in nature, or issues of privacy are involved.[16]


Importance of Case Diary

Case diary is an effective instrument for the magistrate to keep a tab on the propriety of an investigation. The Supreme Court has repeatedly reiterated that the case diary should be maintained with scrupulous completeness and efficiency, since it is an extremely important document.[17] When a person arrested is produced before a magistrate for remand, the magistrate has to : peruse and scrutinise copies of FIR/Case Diary ‘Zimnis’, which ought to be in the form of a volume, duly paginated[18] and contain statements of the witnesses recorded u/s 161 of the CrPC[19], and also to ensure that the same are in chronology and reflect the progress of investigation. The Delhi High Court Rules[20] make it incumbent upon the Magistrate to record reasons for the grant of remand and to sign and date every page of the case diaries or copies thereof as a token of his having seen them. This rules out any fabrication, embellishment or interpolation of case diary at a later stage.


Audi Alteram Partem

Even god did not banish Adam and Eve from the heavens for their proverbial sin, before giving them an opportunity of making their case. The Magistrate can claim little immunity from this salutary principle of natural justice, wherein no man ought to be condemned without hearing him. The magistrate is duty bound to ensure Legal Representation for the accused at the very first production and to give him an effective opportunity of being heard. If the accused does not have a private counsel, Legal Aid from the state is to be ensured.[21] In Delhi – Remand Advocates have been appointed by the District Legal Services Authorities, in each court, to ensure fair representation for each accused.


Remand to Police Custody

Detention in police custody (permissible only within 15 days of the first remand), is usually disfavoured by law, which guards personal liberty zealously[22]. Courts are cognisant of the police’s predilection for disclosure statements & confessions(often extorted), instead of scientific and objective methods of investigation. Therefore, at the time of giving police remand, the magistrate ought to ensure and record the imperative need for police custody, and as to why it is is necessary for an effective investigation. The need for discovery of the weapon of the offence, fruits of crime, unearthing a larger conspiracy and facilitating the arrest of co-accused by disclosure are important considerations. However, mere verification of information given by the accused is not a ground for police custody. Similarly, the Magistrate should also ensure that remand is not taken merely to make a ‘pointing out’ memo. Such pointing-out memos, needless to state, have no statutory sanction or admissibility in a court of law. Only when there is a certain physicality to a discovered fact : that the same falls within the definition of Section 27 of the Evidence Act. Practise has shown that ‘Pointing out Memos’ are recorded with a view to circumvent the clear embargo on police confessions under Section 25 of the Evidence Act, and to permit a rather insidious inclusion of incriminating facts through a circuitous route.

One more thing that a Magistrate ought to be extremely cautious about is that in almost every criminal case – there is an (alleged) confession made to the police by the accused, however, practise shows that only seldom does the police file an application for the confession to be recorded in the presence of the Magistrate, after compliance of Section 164 of the CrPC. It defies reason as to when so many accused are penitent and inclined to confess, then why no confessions are being recorded through the Magistrates. This becomes crucial since the confession before the Police Officer is inadmissible in law and has to be totally excluded from consideration. However, such confessions are employed to IOs routinely to have atleast some semblance of a case against the accused and seek repeated Police Custody/Judicial Custody on that basis.  Expediency should never be allowed to supersede the legal principle and Magistrates ought not to blink at such a practise, as the very fact of there being a police confession in every case and judicial confession in none, reflects a pernicious, and a rather appalling state of affairs. In every case where the accused has allegedly confessed to the police, the magistrate ought to put a question to the IO as to what prevented him from getting the confession recorded before the court. This will keep the coerced confessions in check and encourage police officers to explore other avenues of investigation, which are more legitimate.

It is also important for the Magistrates to remember that Police custody ought not to be given at the drop of a hat and at the mere asking of the police. It is also advisable for the magistrate to scrupulously ensure medical examination of the accused before and after the grant of police custody, so as to rule out torture at the hands of the police. In many a cases the injuries on the person of the accused are suppressed in the Medical Certificates. In such cases, the Magistrate may order a fresh medical examination of the Accused by a team of doctors at a reputed and independent medical institution and entrust the safety of the accused personally to a higher police functionary.  It also needs to be remembered that the Accused has a right to interview with his legal advisor during this time. [23]


Release by special order in case of unjustified arrests

If the arrest seems unwarranted in the facts of the case, the magistrate can always disallow both judicial and police custody and release the person on bail (on surety or personal bonds), or even by way of a special order u/s 59 of the CrPC. A more active use of this provision is the need of the hour.


Immediate Succour to the (oft forgotten!) victims

The magistrate, when seized of the matter for the first time, ought to enquire about the status of the victim of the crime and whether the victim needs immediate first aid or any other interim compensation. A recommendation in this regard can be made by the Magistrate concerned to the District Legal Services Authority[24]. DLSA shall go on to grant compensation in accordance with the Victim Compensation Scheme.


Special Provisions relating to juveniles. 

While dealing with juveniles, the court ought to proceed strictly in line with the principles of parens-patriae[25] & best interests of the child and zealously guard their welfare. Any offender under the age of 18 ought to be tried by the Juvenile Justice Board and is not to be exposed to the rigours of ordinary criminal law process.

Whenever a plea of juvenility is taken by an accused, the age determination enquiry has to be conducted by the court only, in accordance with Section 7A of the JJ Act and Rule 12 of the Delhi JJ Rules, 2009. Where, in the opinion of the Magistrate, the accused is patently(from the physical appearance or otherwise) below 18, the court shall immediately transfer the child to observation home and order production of the juvenile before the JJB concerned. In other cases, the inquiry has to be conducted by the court, and if the accused turns out to be a juvenile, he shall be ordered to be transferred to observation home the same day and if person has turned an adult on the date of such order, in that case, to a place of safety.

Contrary to popular misconceptions, an age inquiry, envisaged under the act, is a summary inquiry to be completed within 30 days[26] and not a full blown investigation or trial. Oral evidence need not be recorded to arrive at a finding. Lengthy examination/cross examinations are also out of the question, unless of course, a vexed question of fact arises. The input for such an inquiry may be prima face opinion on the basis of documents.[27]

Experience has shown that in many cases, investigating officers would deliberately state the age of the accused to be above 18 years in order to defeat the benevolent provisions of the Juvenile Justice Act. To counter this, the Delhi High Court[28] has directed that : in case of person arrested being within 18 to 21 years of age, the Investigating officer of the case  of the case has to mandatorily prepare an age memo and collect proof regarding the age of the accused, and court also has to conduct an age inquiry in such cases, if juvenility is pleaded.

STAGE – III –  Magisterial interventions while deciding applications for recording of statement u/s 164 of the Cr.P.C/Test Identification Parade, and the like.

While recording statements u/s 164 of the Cr.P.C

 Recording of Statements of the witnesses is a vital part of the investigation. This not only allows an investigator to come to a finding, but also captures the testimony of the witness, when the same is still fresh and unsullied. However, the code reflects a palpable distrust of police officers in the matter of impartial recording of statements.  Statements recorded by the Police Officers during investigation are inadmissible in evidence, except in limited cases where it can either be used as a Dying Declaration or only insofar as it leads to a recovery. [29] These statements, however, can be used for contradiction and cross examination of the prosecution witnesses, at the time of trial.

 In India, the statement u/s 164 of the CrPC is recorded by the same Magistrate who goes on to conduct inquiry or trial, or his link Magistrate (In Delhi). In contrast to this, in the French system, the statements of the witnesses are recorded by an ‘Examining Magistrate’, a judge who carries out investigation and also arranges prosecutions.   The conception of a Magistrate under the French System will be dealt in greater details in the following paras.

Coming back – Under the present code, Section 164 allows recording of statement of witnesses & confessions by the magistrate. The statement of witnesses under this section is recorded on oath. The underlying objective is to preserve evidence, get an account of the testimony of the witness at the first instance (while it is still fresh), and to prevent retraction of testimony at a later stage. Another upside of a statement recorded u/s 164 of the Cr.P.C is that the same can be used for corroboration of the witness’s testimony at trial[30], thereby strengthening the veracity of prosecution case.

The safeguards in place to ensure the voluntariness of a confession/statement made before the magistrate are too well established to be reiterated. However, there are certain cases that deserve extra care and caution : for instance, in cases of rustic/illiterate and other vulnerable witnesses, the magistrate is duty bound to cull out the truth from the witness by asking the relevant questions.[31] In cases of child victims, the statement ought to be recorded in the special child witness/vulnerable witness room, away from the grim dynamics of the court. The magistrate can also take the aid of visual guides/diagrams and anatomically correct dolls with a view to ensure that the young witness, who might not be articulate or possess an adult vocabulary, is able to communicate and explain as to what happened. POCSO[32] also envisages the presence of a parent/support person with the victim at the time of recording of statement. It also permits the services of a special educator/interpreter/translator to aid the judge to understand and record the statement better.[33] Wherever possible, the magistrate must direct the IO to make the necessary arrangements for video recording of the statement. The expectation, therefore, is of utmost sensitivity and responsiveness while recording the testimony of a vulnerable witness, being alive to the trauma & stigmatic impact that the witness has undergone. [34]


Magistrate and Witness Protection.

Witnesses disappearing or turning hostile is a major stumbling block in successful criminal justice administration. The need for a specific witness protection legislation has been sorely felt for many years. Pursuant to the repeated directions of the High Court of Delhi with respect to a law to this effect, the Delhi State Government has notified the ‘Delhi Witness Protection Scheme, 2015’. Under the scheme, witnesses are categorised under three categories, depending on the threat perception. The Delhi State Legal Services Authority has been appointed as the competent authority for the implementation of the scheme. As per the scheme, the witness facing a threat is required to file an application for protection before the Ld.Member Secretary/Officer on Special Duty, DSLSA, which has to be routed through the Prosecutor. However, the Magistrate too, has a vital role to play in this. The Magistrates establishes a direct dialogue with the witness at various stages of the investigation; therefore, in appropriate cases, where there is sufficient cause to believe that a threat to the witness exists, there is nothing that prevents the Magistrate from referring the case to the DSLSA for consideration under the scheme, even sans a formal application. The witnesses’s oral request may be treated as an ‘application’. Considering the fact that most witness are laypersons, without adequate legal advise and knowledge as to their rights, this latitude will go a long way to serve the spirit of the scheme.


Apart from the magisterial interface with the investigation, as discussed above : The question as to how a case has to be investigated has been traditionally considered to be the sole prerogative of the investigating officer, premised on (the now defunct!) ideals of formalistic separation of powers. The dangers of unfettered power and insulating investigation from court’s vigil have already been demonstrated in the introductory paragraphs of this paper.

Such anachronistic notions of a passive magistrate have taken a thorough beating over the last couple of years and the definitive shift towards a more inquisitorial and participative system is clearly discernible. The argument that there is no provision in CrPC that allows the magistrate to monitor an investigation has been debunked by the Supreme Court conclusively in Sakiri Vasu[35] wherein such power has been read within Section 156(3) of the CrPC. It has been held that the power to direct investigation u/s 156(3) of the CrPC is wide enough to include all such powers in a Magistrate which are necessary for ensuring a proper investigation. Therefore, in appropriate cases, the victim, complainant or a witness can approach the court seeking necessary directions to the police and supervision of investigation.

This reflects a definitive shift in the perception of a magistrate and recognition of his social function. The fact that he ought not to remain a mute spectator to the distortions and inadequacies of investigations, but make meaningful interventions. At the same time, the magistrate ought to desist from investigating himself, as in the system we have adopted in India, the same magistrate often conducts the trial. However, the magistrate is empowered to monitor the investigation, with a view to ensure that it is free and fair.

The exact import of word ‘monitoring of investigation’ is too circumstantial to be put in a straitjacket. Placing a narrow interpretation on the phrase will render it sterile. The phrase, therefore, ought to receive a social context or liberal interpretation. Illustrative cases, where the power to pass necessary directions may be used are :  to protect witnesses,  check disregard of vital evidence (which may get obliterated in course of time), non-examination of witnesses, deliberate shielding of some accused, or the investigating officer being interested in the case.  In such cases, a magistrate ought to push the envelope and actively monitor the investigation, while avoiding investigating himself, or directing investigation by a specific agency, with respect to which there is a specific embargo on the powers of the magistrate.

Monitoring of investigation by the magistrate is, therefore, of vital importance to protect the integrity of prosecution. In this regard, the Magistrate has to walk a tightrope and balance, on one side – the separation of executive from judiciary and the investigative autonomy of the police and on the other, the imperatives of a fair, free and impartial investigation and to ensure that the search for truth is not muddied by police lapses, whether innocent or blameworthy.

The Malimath Committee had recommended that a provision on the following lines be added immediately below Section 311 of the CrPC :

Power to issue directions regarding investigation

“Any court shall, at any stage of inquiry or trial under this Code, shall have such power to issue directions to the investigating officer to make further investigation or to direct the Supervisory Officer to take appropriate action for proper or adequate investigation so as to assist the Court in search for truth.”[36]

The above amendment remains elusive. Similarly, amendments to Section 482 of the CrPC so as to acknowledge ‘inherent powers in the trial court’ to pass any orders to do complete justice, have also remained on the paper. However, even dehors these amendments, there is nothing that prevents the court from reading this ‘pursuit of truth’ within the existing framework and more particularly, within Section 156(3) of the CrPC.


Comparison of the Indian Magistrate with the French System of Juge d’instructions’

Any analysis of the role of a Magistrate cannot be complete without a comparison with the  extraordinary role of a Magistrate in the French System. France’s investigating magistrates, or Juge d’instructions’, as they are called in french, have been a central pillar of the french criminal justice system for the last 200 years. Under the French System –  Investigation in respect of serious and complex offences is done under the supervision of an independent judicial officer, who for the purpose of discovering truth  : collects evidence for and against the accused and then decides whether the accused ought to be tried or not. In case of there being adequate material, the matter is forwarded for an adversarial trial by jury.

The institution of a juge dinstruction was made in the mid 19th Century. Juges are appointed by none other than the President himself – for fixed three-year terms (which are renewable) upon the recommendations of the Ministry of Justice. The juge d’instruction commences investigation on either a referral by the prosecutor or on a private complaint. Once the juge d’instruction’s is seized of the matter : even the accused gets right to all the documents and evidence collected during the investigation, and the right to be assisted by a counsel throughout the investigation. In contrast to this, in a strictly adversarial system – such as ours, the accused has little role to play in the investigation. The Investigating officers usually collect only incriminating material, totally disregarding exculpatory material. The accused does not get to participate in the investigation process, till the filing of the police report, and not even thereafter, strictly speaking, as even upto the stage of charge, he cannot adduce any evidence of his own to assist the court. He can only address submissions, punch holes, and expose intrinsic infirmities in the case of the prosecution. This results in the court having a totally one sided view of the case, atleast till the stage of charge. This also results in a warped investigation; as much of what the accused can possibly rely on, is lost. This is especially problematic having regard to the fact that : most accused persons have little investigative prowess compared to the state, and by dictates of logic – a negative (innocense) is always more difficult to be proved than a positive (guilt).

Coming back to the institution of Juge d’Intruction, To assist fact finding, juge has a wide range of powers available. He may issue search warrants and order seizure of property. He also may issue warrants requiring attendance of other witnesses; he may even require experts to testify. Infact, if there is a conflicting testimony, witnesses are confronted with each other and often with the accused. This exercise is not done, in an adversarial system, till the recording and appreciation of evidence, which is usually- years after the actual occurrence and when the recollection of the incident is allowed to be muddied.

The evidence collected and the testimony of witnesses recorded – make up what is known as a ‘dossier of a case’, which serves as a guide for the juge in the preliminary hearing in the court. It is also made available to the defence, so that the element of surprise, so prevalent in common-law trials, is eliminated from the main hearing.  It is on the strength of this file that the juge d’instruction bases his decision as to whether to commit a case to trial. The trial is conducted by another judge or the jury, which allows a fresh set of eyes to evaluate the evidence collected.

It will be naive to suggest that the institution of examining magistrates is devoid of imperfections. An inquisitorial system is not at all infallible. An apt illustration will be – Albert Camus’ famous work – ‘The Stranger’, where an examining magistrate allows extremely prejudicial past character evidence (which ought to have been excluded) and societal retribution to creep into the trial against the defendant. Where : in a trial for Murder of an assailant, evidence was allowed to show that the defendant did not believe in god; Evidence was also allowed to the effect that the accused displayed a lack of emotion/grief at his mother’s funeral some months back. Strangely, this fact was allowed to be led in evidence to prove his guilt in a totally unrelated murder case.

One more opposition to the french model is that : there is no constitutional right of habeas corpus in France. Investigating magistrates have a right to keep suspects in detention for extended periods of time without trial.

It is also argued that the ‘examining magistrate’ system is also less effective in ordinary crimes. It is slower and sometimes chokes the system; it is relatively more opaque and the concentration of power in one magistrate sometimes leads to arbitrariness in exercise thereof.

Having said this, the Inquisitorial system has certain undeniable advantages. It can be used to avoiding misunderstandings at an earlier stage in the case. In addition to this, in an inquisitorial system – ‘truth seeking’ is the fundamental value, and the very ‘end’ of the system. This is contrast to the Adversarial system, where by competing to prove one’s case to the judge – parties are encouraged to win, not uncover the truth. This can lead to unnecessary complications during the trial and more technical objections. Truth seeking is lost somewhere in this dialectic clash, which is seldom played by the rules. Such a passive system, also ends up rewarding the better lawyer and not the more truthful case.

Relatively, Trial procedures in this non-adversary model are simpler, less technical, and less lawyer dominated than in the adversary model where a complex system of evidentiary and procedural rules governs the parties’ judicial duel.[37]

It is undeniable that the move towards a more pro-active and participative magistracy, on the lines of the examining magistrate is the need of the hour. Incidents of transgression of power will not be common-place, and in any event, a magistrate can be credited with greater objectivity than the average investigating officer. The argument of possibility of bias creeping in is not very convincing as bias can never be completely ruled out as long as investigation is done by any human agency. However, a judge’s very training gives him atleast some amount of transcendence and objectivity; although – aberrations are always there.

Therefore, on a juxtaposition of the two systems. Both have certain advantages and concerns. But on a fair analysis – the trade of should not be difficult; The benefits of a more inquisitorial approach far outweigh the pitfalls. Across the world – there is a move towards more involved and less passive legal systems. Within the Indian Legal Framework – these benefits can be achieved with the expansion, or atleast better use of Section 164 of the CrPC – wherein statements of more material witnesses are recorded before the Magistrate during investigation, more proactive use of S.156(3), inclusion of powers to pass specific directions to the Investigating Officers, with a view to aid the search of truth – as recommended by the Malimath Committee and saving of inherent powers with the trial court. This paper is an attempt to demonstrate that all this can be achieved, atleast in a fair measure, within the existing judicial framework.

Stage – V – Further investigation after filing of police report

Magisterial vigil does not terminate on the filing of the police report on the conclusion of the investigation and the court is not bound to accept the results of an investigation conducted by the police. In the case the police concludes that no case is made out against the accused, the Magistrate has to issue a notice to the informed/victim and hear him out. [38] After hearing the informant, the court can, notwithstanding the closure report, choose to proceed with the matter, as a case based on police report or even a prior complaint.

The third option available is ordering further investigation. Section 173(8) of the CrPC expressly lays down such a course of action. However, the section does not enlist considerations that will govern the exercise of such power. Illustrative cases where further investigation may be ordered are : where the police acts in a partisan manner to shield the real culprits and the investigation has not been done in a proper and objective manner but is tainted[39], non-examination of crucial witnesses, clearing of doubts and to substantiate the prosecution case.  To conduct fair, proper and an unquestionable investigation is the obligation of the investigation agency and the court in its supervisory capacity is required to ensure the same. [40]

Having said that, further investigation is to be distinguished from re-investigation or a de-novo investigation, which is not permissible. In cases where vital evidence has been disregarded by the police, the court can order further investigation into that aspect. The result of the further investigation is called a ‘supplementary report’ and can supplement the primary police report, already on record.[41]  The earlier investigation is not wiped-off from the record and the subsequent investigation only supplements the earlier investigation.

The magistrate also cannot order a further investigation by a different agency (agency other than the original investigating agency) either, as that will amount to re-investigation. Only the higher courts have the power to order reinvestigation by a different agency, such as the CBI.[42] Having said that, in such cases, the Magistrate is not powerless, if the magistrate suspects foul play in investigation, he can always pass orders for senior officers to supervise the investigation personally and file periodic compliance reports, in a process akin to a continuing mandamus.

The power of further investigation, it must be remembered, can be exercised even suo motu[43], and even after taking of cognizance[44] – to ensure that no crucial aspect of the case goes investigated and subsequent facts are brought to the fore.



“Trial judge as the kingpin in administration of Justice..” [45]

It is apparent that ample powers are vested in the magistrate to check arbitrary arrests, police excesses & to facilitate a more incisive probe into the discovery of truth, at various stages of an investigation, and even after filing of the police report. Never should a judge find himself in a situation where he has to make a grudging confession of acquitting a known culprit due to lack of evidence or investigative lapses. A conscientious magistrate’s Dharma also lies in the deft use of these provisions, in order to uphold constitutional values and the Rule of law, and in this he ought not to hesitate in recalibrating the scales of justice and even protectively discriminating to correct systemic asymmetries & disadvantages towards the weaker accused, witness or the complainant. Existing provisions can be interpreted creatively. Cues can be taken from the magisterial role, as envisaged in other jurisdictions. No doubt, there would be questions raised over the magistrate having descended into the arena. But the magistrate ought to not to be unnecessarily wary of such aspersions; or be a worshipper of dead habit, convention, or the complacency of the status quo, for no ideals, howsoever hallowed, can be allowed to impede the voyage of discovery, an affirmative duty for the search of truth.

[1]                Advocate Supreme Court of India, formerly : Civil Judge/Metropolitan Magistrate, Delhi

[2]                 State of Gujarat v. Kishanbhai (2014) 5 SCC 108

[3]                 Section 154 of the Cr.P.C

[4]                Delhi High Court Rules – Vol III, Chapter 11, Part A, Rule 4.

[5]                 Rafiq v. State (Crl. A. No. 1505/2013 – Date of Decision 23.07.2015)

[6]                Attributed to Thomas Jefferson.

[7]                 Article 21 of the Constitution. Maneka Gandhi v. Union of India, (1978) 1 SCC 248

[8]                 D.K.Basu v. State of West Bengal (1997) 6 SCC 642, Joginder Kumar v. State of U.P (1994) 4 SCC 260.                       Also see Code of Criminal Procedure (Amendment) Act, 2008.

[9]                According to Third National Police Commission – 60 % of the arrests made were unjustified and unnecessary arrests account for 43 % of the expenditure in jails (Joginder Kumar v. State of U.P – supra)

[10]               Fair Trial Manual : A Handbook for Judges and Magistrates by CHRI. (http://www.humanrightsinitiative.org/publications/police/fair_trial_manual.pdf)

[11]              2014 8 SCC 273

[12]               As on 31.12.2015, by a report of the Tihar Prison (available at : http://www.delhi.gov.in/wps/wcm/connect/lib_centraljail/Central+Jail/Home/Prisoner+Profile)

[13]           Lord Atkin’s dissenting judgment in Liversidge v. Anderson [1941] UKHL 1

[14]               Section 53/53A/164A of the CrPC

[15]               Section 57 of the CrPC & Article 22 of the Constitution of India

[16]          Court on it’s own motion versus State (Writ Petition (Crl.) No. 468 of 2010)

[17]               Bhagwant Singh v Commissioner of Police, Delhi, (1983) CriLJ 1081.

[18]               Section 172 (1-B) of the CrPC

[19]               Section 172(1-A) of the CrPC

[20]               Delhi High Court Rules – Vol III, Chapter 11, Part B, Rule 3.

[21]               Md. Ajmal Amir Kasab v. State of Maharashtra (2012) 9 SCC 1. The Hon’ble Supreme Court has also held     that any lapse on this count by the magistrate may entail departmental action.

[22]               CBI v. Anupam J. Kulkarni – AIR 1992 SC 1768

[23]               Adjudication in trial courts : A Benchbook for Judicial Officers, by N.R.Madhava Menon, David                   Annoussamy & D K Sampath.

[24]               Section 357A(6) of the CrPC

[25]              Black’s Law Dictionary, Sixth Edition, p. 1114 – Parens patriae. “Parens patriae,” literally “parent of the country,” refers traditionally to role of state as sovereign and guardian of persons under legal disability, such as juveniles or the insane, State of W.Va. v. Chas. Pfizer & Co., C.A.N.Y., 440 F.2d 1079, 1089, and in child custody determinations, when acting on behalf of the state to protect the interests of the child.  It is the principle that the state must care for those who cannot take care of themselves, such as minors who lack proper care and custody from their parents

[26]               Rule 12 of the Delhi JJA Rules, 2009

[27]               Ashwani Kumar Saxena v. State of M.P (2012) 9 SCC 750.

[28]               Court on it’s own motion versus  Dept of Women and Child Development &Ors – WP(c) 8889 of 2011,        Date of Decision – 11.05.2012

[29]          Section 162 of the CrPC.

[30]               Section 157 of the Evidence Act

[31]               R.Shaji v. State of Kerala (2013) 14 SCC 266

[32]               Section 25 of the POCSO, Section 164(5A) in cases of women victims of sexual assault.

[33]               In such cases the video recording of the statement is mandatory as per the mandate of Section 164(5A)(a) 2nd proviso

[34]               See Exhaustive guidelines for various stakeholders with respect to vulnerable witnesses, laid down by the High Court in Virender v. State of NCT of Delhi (Crl. A.No. 121/2008 – Date of Decision : 29.09.2009)

[35]              Sakiri Vasu v. State of U.P (2008) 2 SCC 409. (Note on position post Sakiri Vasu -The correctness of Sakiri Vasu was subsequently questioned by the Supreme Court in Nirmal Singh Kahlon (2009) 1 SCC 441 by saying “correctness whereof is open to question”, however since the matter was not referred to a larger bench for reconsideration and no reasons given as to why Sakiri Vasu was not acceptable – Sakiri Vasu still holds field and has since been endorsed by a catena of judgments including T.C.Thangaraj vs V.Engammal & Ors (2011) 12 SCC 328.

[36]          Malimath Committee on Reforms in Criminal Justice System, 2003. Available at : http://www.mha.nic.in/hindi/sites/upload_files/mhahindi/files/pdf/criminal_justice_system.pdf

[37] Edward A. Tomlinson, Nonadversarial Justice: the French Experience, 42 Md. L. Rev. 131 (1983)

[38] Bhagwant Singh v. Commissioner of Police and Another, AIR (1985) SC 1285; Gangadhar Janardan Mhatre v. State of Maharashtra and Others (2004 7 SCC 768)

[39]               Kashmeri Devi vs. Delhi Administration and others, AIR 1988 SC 1323.

[40]              Vinay Tyagi v. Irshad Ali, (2013) 5 SCC 762.

[41]               Vinay Tyagi (supra)

[42]          Chandra Babu versus State, (2015) 8 SCC 774.

[43]               Vinay Tyagi (supra)

[44]              Kishan Lal v. Dharmendra Bafna, (2009) 7 SCC 685 at page 693

[45]              All India Judges Association v. Union of India (1992) 1 SCC 119