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The High Court of Punjab and Haryana asks whether the CCTVs installed in police station work or not?

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Kamla Devi

Vs.

State of Punjab

Date of decision: 21.08.2023

CRWP-5521-2021

CORAM: HON’BLE MR. JUSTICE ALOK JAIN

FACT:

The inquiry was initiated upon learning about a set of requests submitted for the placement of surveillance cameras in police stations. This group of pleas encompasses a submission from Gangster Kaushal, who claimed to have experienced police mistreatment while in their custody. In February 2022, Justice Amol Rattan Singh’s panel instructed the Punjab, Haryana, and UT Chandigarh administrations to place closed-circuit television cameras (CCTV) in all police stations, including interrogation rooms. These cameras should have the capacity to store footage for 18 months, aligning with the Supreme Court’s directive in the case of Paramvir Singh Saini v. Baljit Singh and others (2021). In this earlier case, the Supreme Court had mandated State and Union Territory Governments to guarantee the installation of CCTV cameras in every functioning Police Station under their jurisdiction

COURT ANALYSIS AND DECISION:

The High Court of Punjab & Haryana has requested the Chandigarh administration, along with the Punjab and Haryana governments, to provide information regarding the current situation of CCTV cameras that have been set up in police stations. Under the guidance of Justice Alok Jain, the legal representatives representing the respective states and union territory have been instructed to submit a precise affidavit containing information about the following aspects: Are all the Cameras/CCTV systems operational? What is the duration of storage capacity for CCTV camera recordings? What measures or agreements are in place for the adequate repair and maintenance of these systems?

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Written by- Srijan Garg

CCTV

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The difference between “law and order” and “public order” is completely unknown to state authorities: Gujarat high court

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TITLE:  Dhruv Sureshbhai Sarvaiya Versus State of Gujarat

Decided On-: August 18, 2023

13117 of 2023

CORAM: Hon’ble Justice Mr. A.S Supehia & Mr. M.R Mengdey

INTRODUCTION-  

The petition in question challenges the respondent-detaining authority’s decision to detain the petitioner-detenu, as that term is defined in section 2(c) of the Gujarat Prevention of Anti-Social Activities Act, 1985 while acting within the scope of the authority granted by that section.

FACTS OF THE CASE

 Detenu argued that the detaining authority should be held accountable for passing the contested order of detention solely on the basis of the registration of three FIRs for the offences listed in (i) Sections 385, 323, 504, 506(2), 143, 147, 148, and 149 of the Penal Code, 1860, and Section 135 of the Gujarat Police Act, (ii) Sections 323, 324, 504, 506(2), 143,   147, 148, and 149 of the Penal Code of 1860, Section 135 of the Gujarat Police Act, Sections 323, 324, 504, and 506(2) of the Indian Penal Code, and Sections 143, 148, and 149 of the Indian Penal Code, respectively, cannot by themselves bring the case of the detenu within the scope of the definition under Section 2(c) of the Act.

Detenu argued that it was impossible to conclude from the facts of the case that the detainees’ involvement in criminal cases had affected and disrupted society’s social fabric, eventually posing a threat to the very survival of people’s normal and routine lives, or that the detainees had thrown the entire social system into chaos by registering criminal cases, causing Additionally, it is claimed that the detaining authority has not given the petitioner’s overall release on bail any thought.

COURT ANALYSIS AND DECISION

The learned AGP for the respondent-State supported the detention order issued by the authority and argued that enough information and evidence discovered during the course of the investigation and provided to the detainee indicate that the detainee is habitually engaging in the activity as defined under Section 2(c) of the Act.  The learned AGP for the respondent-State argued that the detention order issued by the authority and detention order

Primarily, it is determined that the subjective satisfaction reached by the detaining authority cannot be said to be legal, valid, and in accordance with law, in as much as the offences alleged in the FIR/s cannot have any bearing on the public order as required under the Act and other relevant penal laws are sufficient enough to take care of

Given the circumstances, it cannot be said that the accusations made against the detenu are relevant to bringing them within the purview of section 2(c) of the Act. Hon’ble Court has also observed that the state authorities are completely unaware of the distinction between “law and order” and “public order.”

The personal liberty protected by Article 21 is so sacred and ranks so highly on the scale of constitutional values, that the detaining authority must demonstrate that the impugned detention is meticulously in accordance with the procedure stipulated by law. We have also seen instances where, in a single case of prohibition, the PASA provisions are used, the detention order is not carried out, and the PASA provisions are used even when the detainee has been granted bail. Thus, it would seem that such orders are frequently carried out in an effort to thwart bail orders.

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Written by-  Steffi Desousa

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Recourse Against Arbitral Award Under Section 37

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CONCEPT OF ARBITRAL AWARD – BRIEF INSIGHT

The term “arbitral award” is defined under section 2(1)(c) of the Arbitration and Conciliation Act. An award is a conclusive decision reached by the arbitrators regarding a particular aspect of a claim that was brought up during the arbitration. To put it simply, the decision of the arbitrator is final and must be followed by both parties. A person who is selected to arbitrate or settle a dispute that has been brought up between two or more parties is known as an arbitrator. An argument or disagreement can be settled by a procedure known as arbitration when those involved on both sides of a disagreement give their case to an impartial third party. The entire arbitration proceeding is documented in the award. It’s like a judicial ruling that settles all the issues in a case after the judge has carefully evaluated all the evidence presented to them.

The arbitral tribunal is required to issue its award in disputes that are not subject to international commercial arbitration within a period of twelve months from the date on which the party’s respective pleadings have been resolved under section 29A.

Section 30 of the act provides for settlement of the dispute. With the parties’ consent, the arbitral tribunal may employ mediation, conciliation, or other measures to facilitate settlement at any moment during the arbitral procedures. If the parties are able to resolve their dispute during arbitration, the arbitral tribunal will issue an award which has the same status as an arbitral award.

According to the provisions of Section 31 of the Act, the arbitral award must be in writing and must have the signatures of each member of the arbitral panel. Because of this, the only time an award is fully binding and final is once all the arbitrators have signed it. Unless the parties agree otherwise, it must specify the rationale behind the award. Reasoning is the bridge between the underlying evidence and that conclusion. The 1996 Act emphasizes the reasoned awarded so that the parties and reviewing courts comprehend the facts as well as the general line of thinking that the arbitrator used to conclude that this was the deciding factor. At any point throughout the arbitral procedure, the arbitral tribunal is authorised to issue an interim award pursuant to section 31(6). However, in most cases, this authority is only exercised once the parties have moved past the stage of filing a claim statement and defence statement with the arbitral tribunal.

SETTING ASIDE OF ARBITRAL AWARD- A LEGISLATIVE APPROACH

Whenever an arbitral award is handed down that rule in favour of one of the disputing parties, they look for ways to overturn the decision. Only the reasons that are specified in section 34 of the act can result in the nullification of an award. The award either in its entirety or in part, may be modified in some ways as a result of setting aside.[1]

Observable characteristics of section 34 are as follows:

  1. It forbids the use of any other challenge to an arbitral award than the one described in subsection (1).
  2. According to subsection (2) of section 34, it limits the bases on which an award can be challenged, including
  • When the party is under some incapacity or the agreement is invalid- The court ruled in the State of P. v. Allied Construction[2] that the legislation to which the parties have submitted an agreement is the test for its legitimacy. In the absence of any such evidence, the legality would be evaluated per the applicable law.
  • Proper notice was not given to parties making the application – The court in Dulal Podda v. Executive Engineer, Dona Canal Division[3] found that an ex parte award granted by an arbitrator appointed at the appellant’s request without providing notice to the respondent was invalid and can be set aside
  • The arbitral tribunal’s composition was not according to the agreement made by the parties.
  • If the arbitrator’s award goes outside the parameters of the case, the decision might be vacated. An issue that was being addressed as part of a writ petition was sent to arbitration in the case of Rajinder Kishan Kumar v. Union of India.[4] The writ petition did not request monetary damages for the land’s potential being diminished due to the other party’s effluent and slurry discharges. The opposite side discharged effluents and sludge into the land, causing devastation. The decision to grant such compensation was found to go beyond the scope of the reference and was therefore subject to review for reversal.
  • It allows for the award to be sent back to the arbitral tribunal so that any problems with it can be fixed.
  1. Subsection (3) states that an application for setting aside a judgment may be submitted within a period that is considered to be quite short.

The Appellant petitioned the Learned Single Judge of the Bombay High Court to set aside the award under Section 34 of the Act, contending that the matters before the Arbitral Tribunal were not arbitrable since they were not within the scope of the arbitration clause in the Agreement.

For example, in Union of India v. Popular Construction Company[5], it was unclear whether or not an application contesting an award under Sec. 34 would be subject to the time limits set by Section 5. This issue was raised since it wasn’t apparent whether or not the time limits specified in subsection (c) of section 5 of the limitation act would apply. The legislative history, intent, and anticipated results were all considered by the court when reaching its decision. Following subsection (2) of section 29 of the limitation act, it was determined that this phrase related to an express exclusion that would exclude the application of subsection (5).

According to the terms of the act, the arbitral tribunal judgement may be overturned if it runs counter to the general direction of the public policy in India. The act does not include a definition for the phrase “public policy”. According to the definition, public policy is “a set of principles following which communities need to be regulated to achieve the good of the entire community or public”.[6] This is a relatively straightforward way of putting what is a complex concept into words. A broad meaning was ascribed to the concept of “public policy” in the supreme court’s most recent decision which was rendered in the case of ONGC v. Saw Pipes.[7] The court concluded that there is no need to give a restricted meaning to the phrase “public policy of India” in a case where the legitimacy of an award is being contested. On the other hand, a broader interpretation is required for the illegitimate award that was handed out by the tribunal to be overturned.

 

APPEALABLE ORDER

Section 37 of the Arbitration and Conciliation act states provisions regarding the appealable orders. The right to appeal is a legal provision and it cannot be expanded via implication since an appeal is a statutory creation. The basis for appeal does not rest on every single order that was handed down by the arbitration panel. Only some kinds of orders are subject to appeal, and only to the precise listed under section 37 of the act.

Only the court orders listed below, as specified in subsection (1) of Sec. 37 of the Arbitration and Conciliation Act of 1996. In subsection (1), there are three subsections: (a), (b), and (c). In accordance with section 8 of the act and subject to the provisions of section 8 of the act, subsection (a) addresses an order of the court to either refer the parties to the arbitration or the court’s decision not to refer the parties to the arbitration. The phrase “and from no others” makes it abundantly obvious that the legislature intended for there to be no other grounds for appeal before an appellate court than those pertaining to the directives specified in section 37.

Sub-clause (b) states that if a court grants any measure or decides not to grant any interim measure then the appeal shall lie under section 9. Whereas sub-clause (c) talks about parties’ right to appeal when the court under Sec. 34 sets aside an arbitral award or the court’s denial to set aside the same.

Sub-section 2 of the act states about the appeal contesting the admissibility of a plea for lack of jurisdiction. A court may hear an appeal from an arbitral tribunal’s decision to accept a plea under subsection (2) or (3) of section 16. A tribunal’s ruling on its jurisdiction is not an interim award. Nevertheless, if a claim of lack of jurisdiction is recognised by the tribunal, section 37 of the act permits an appeal of the order.

Sub-clause (b) of sub-section 2 states a court may hear an appeal from an arbitral tribunal’s ruling granting in denying an interim remedy under section 17.

A “second appeal” from an order that has been handed down in appeal is specifically forbidden under sub-section 3 of the Act, except for an appeal to the Supreme Court. The provisions of Article 133 of the Constitution of India are not altered in any way as a result of this section. As long as the requirements of the article are met, a person will be able to appeal the decision to India’s highest court, the Supreme Court.

 

SECTION 37 VIS A VIS SECTION 34

According to what was stated above, Section 37 grants the ability to appeal to either party in specific scenarios where the court issues an order. Specifically, appeals to a court order issued under section 34 are the topic of discussion in subparagraph 1(c) (Recourse for an arbitral award.). This demonstrates that there is a connection between the two sections since in this situation, for there to be an appeal, there needs to be a decree from the under 34. If there isn’t already an order in place, there can’t be an appeal. However, even for an appeal to be valid, it cannot address the merits of the award. It is a known fact and principle that, in the field of arbitration that an appeal under section 37 can only be made regarding the law and the facts. This is further enumerated in the case of MMTC Ltd. V. Vedanta Ltd.[8] –

The Respondent, M/s Vedanta Ltd., has filed an arbitration claim with the Appellant, MMTC Ltd., seeking payment for goods that the Respondent sold to Hindustan Transmission Products Ltd. (“HTPL”) via the Appellant, according to the terms of an agreement between the parties dated 14 December 1993 (“Agreement”). The Arbitral Tribunal, by majority judgement dated 27 June 2001 (“Award”), among other things, granted the claims of the Respondent and ordered the Appellant to pay the same with interest.

The Appellant submitted a petition to the Learned Single Judge of the Bombay High Court following Section 34 of the Act to have the award overturned. In the petition, the Appellant argued, among other things, that the disputes that were brought before the Arbitral Tribunal could not be arbitrated because they did not fall under the purview of the arbitration clause that was included in the Agreement. After reviewing all of the evidence and paperwork, the Learned Single Judge issued an order on August 5, 2002, rejecting the challenge, the Appellant simply raised the premise that the disputes before the Arbitral Tribunal were not arbitrable in their challenge to the order issued by the Learned Single Judge. By ruling dated February 9, 2009, the Division Bench declined to review the Appellant’s request for a review of the Learned Single Judge’s decision and instead rejected the appeal.

Accordingly, the Appellant filed a Civil Appeal with the Supreme Court of India challenging the aforementioned judgement from the Division Bench of the Bombay High Court dated 9 February 2009.

Considering the Arbitration and Conciliation (Amendment) Act, 2015 (“2015 Amendment”), the Supreme Court examined the existing position of law concerning the scope of interference with an arbitral ruling in India under Sections 34 and 37 of the Act. After examining the scope of judicial interference, the Supreme Court ruled that it cannot exceed the limitations outlined in Section 34 and hence cannot replace the judgement reached by the Arbitral Tribunal with its finding. By way of clarification, the Court’s powers under Section 37 are limited to verifying that the High Court’s powers under Section 34 have not been exceeded. The Court, therefore, determined that it lacked the jurisdiction to evaluate the award on its own.

The Supreme Court further noted that it must exercise extreme caution and move slowly to disturb concurrent conclusions if an arbitral award has been confirmed under Section 34 and then in an appeal under Section 37.

In light of the foregoing, and after considering the evidence in the record on the question of the arbitrability of the disputes, the High Court, in exercising its powers under Sections 34 and 37 of the Act, confirmed the Award and found that it was a reasonable interpretation of the Agreement and the evidence presented. Therefore, the Supreme Court did not hear the Appellant’s civil appeal and dismissed the Award.

One of the only exceptions to this rule was enumerated in the case of Sarkar and Sarkar v. State of West Bengal,[9]

A correct decision was made by the Calcutta High Court in Sarkar and Sarkar v. State of West Bengal, wherein it was held that the role of the court which has appellate jurisdiction, under Sec. 37(2)(a) is to evaluate the decision made by the tribunal in accordance with Section 16 about the legality of the arbitration agreement, whether it is factually and legally correct, as well as the arbitrability of the matter at hand. In addition, it was concluded that in contrast to Section 34 when read in conjunction with Section 37, the court’s authority in its function as a first appellate court is not limited in any way. This decision was made in light of the fact that the court is the first appellate court. As a consequence of this, it gives power to the court to evaluate all the aspects of the case. As a consequence of this, the court is in a position to decide whether or not the interpretation of an arbitration clause offered by an arbitrator is accurate. The fact that India’s highest court, the Supreme Court, upheld the decision that was issued by the Calcutta High Court in 2018 makes this development much more significant.

CONCLUSION

This decision establishes the law as it stands, as it has been repeatedly ruled in precedent that courts must exercise judicial restraint when using their jurisdiction under Sections 34 and 37 of the Act unless the conclusions of the Arbitral Tribunal are prima facie perverse or unconstitutional. The Court made its decision because it is well-established by precedent that judges should be cautious when applying the Act’s Sections 34 and 37. In reality, the Act was amended in 2015 to make it clear that an arbitral judgement cannot be reversed due to a mistake in the application of law or a different interpretation of the facts. This rule went into effect on January 1, 2016. There can be no revaluation of the evidence or the merits of the dispute, as the Supreme Court correctly concludes, thus the conclusions in the arbitral decision cannot be reviewed. The Supreme Court reached this decision by considering the whole scheme of the provisions found in Sections 34 and 37 of the Act, as well as the 2015 Amendment, both of which seek to limit the Court’s supervisory function. The purpose of these provisions and amendments is to prevent courts from interfering with arbitration proceedings to the extent that they undermine the expediency and finality that such procedures offer as a means of alternative dispute settlement. The right to appeal is universally recognised as an invaluable legal right. Indian legal system, in particular, provides vast powers of appeal thus, ensuring that the interests of aggrieved litigants are safeguarded. However, the setup does have side effects which can be problematic for speedy disposals of disputes. This could be particularly alarming in arbitration as speedy disposal of disputes is one of the many factors that make commercial arbitration so popular. Supreme Court has acknowledged this perspective while dealing with appeals arising out of International Commercial Arbitrations under Sec. 50 of the Act. In this light, the court has rightly cemented the legal position surrounding the scope of an appeal under Sec. 37 of the Act. 

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Written by- Shreya Sharma

[1] Alan Redfern and Martin Hunter, Law and Practice of International Commercial Arbitration, London: Sweet and Maxwell, January 17, 2008

[2] State of U.P. v. Allied Construction (2003) 7 SCC 396

[3] Dulal Podda v. Executive Engineer, Dona Canal Division (2004) 1 SCC 73

[4] Rajinder Kishan Kumar v. Union of India AIR (1999) SC 463

[5] Union of India v. Popular Construction Company (2001) 8 SCC 470 (India)

[6]Aishwarya Padmanbhan, Analysis of Section 34 of the Arbitration and Conciliation Act – Setting Aside of Arbitral Award and Courts’ Interference: An Evaluation with Case Laws, In Manupatra,  on January 1, 2011

[7]  ONGC v. Saw Pipes 2003 (5) SCC 705 (India)

[8] MMTC Ltd. V. Vedanta Ltd (2019) S.C.C. SC 220(India)

[9] Sarkar and Sarkar v. State of West Bengal (2018) 12 S.C.C. 736 (India)

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Critical Appraisal Of The Powers And Functions Of The Lokpal And Lokayukta With Reference To Judicial Contribution

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ABSTRACT

The Lokpal and Lokayukta Act, 2013 was enacted to establish institutions for the investigation and prosecution of corruption cases involving public officials. This research paper critically appraises the powers and functions of the Lokpal and Lokayukta with reference to judicial contribution and examines the efficacy of the Act.

The research paper utilizes a mixed-methods approach, which includes a systematic review of relevant literature, as well as an analysis of the Act and its implementation The analysis takes into account the powers and functions of the Lokpal and Lokayukta, as well as the role of the judiciary in shaping their effectiveness. It also constitutes a critique of the Act, highlighting its shortcomings and limitations. The analysis identifies gaps in the Act, which have impeded its effectiveness in addressing corruption in high places. The research paper also examines the challenges faced by the Lokpal and Lokayukta in fulfilling their mandate and the implications of these challenges for the overall fight against corruption. The study recommends a review of the Act, with a view to addressing the gaps and limitations identified, and strengthening the powers and functions of the Lokpal and Lokayukta.

Keywords: Lokpal and Lokayukta, Corruption, Independent Ombudsman, Judicial Contribution

RESEARCH QUESTIONS

  1. What are the key powers and functions of the Lokpal and Lokayukta institutions in India, as outlined in the Lokpal and Lokayukta Act, and how have these institutions been implemented and functioning in practice?
  2. To what extent have the Lokpal and Lokayukta institutions contributed to addressing corruption in India, and what is the nature and extent of the impact of these institutions in the fight against corruption?
  3. How do the Lokpal and Lokayukta institutions interact with the judicial system in India, and what is the role of the judiciary in the effectiveness of these institutions in addressing corruption?
  4. What are the key criticisms of the Lokpal and Lokayukta Act and the institutions established under the act, and what are the challenges faced by these institutions in their implementation and functioning?
  5. What are the lessons that can be learned from the performance of the Lokpal and Lokayukta institutions in India, and what are the policy implications and recommendations for improving the effectiveness of these institutions in the fight against corruption?

POWERS AND FUNCTIONS OF LOKPAL AND LOKAYUKTA

INTRODUCTION AND HISTORY

The Lokpal and Lokayukta Bill is a landmark anti-corruption legislation in India. The bill looks to create a self-sustaining ombudsman institution, known as the Lokpal at the central level and the Lokayukta at the state level, to probe allegations of corruption against public servants and elected representatives. The stipulation of a strong anti-corruption legislation in India dates back to the 1960s when the first Lokpal Bill was instituted in the parliament. However, it could not be passed into law due to political and bureaucratic resistance. The demand for a Lokpal gained momentum in 2011 when the social activist Anna Hazare went on a hunger strike to stipulate the passage of a strong anti-corruption law.[1] The public support for the movement was enormous, and it put tremendous pressure on the government to act. In response to the public outcry, the government formed a joint committee to draft a new Lokpal Bill, which included members from civil society and the government. The committee yielded its report in June 2011, and the Lokpal and Lokayukta Bill was introduced in the parliament in August 2011.

The bill underwent several revisions and debates in parliament before it was finally passed in December 2013. However, it was further challenged in the Supreme Court, which administered the government to make certain changes to the bill to make it more effective.[2] Finally, in July 2016, the Lokpal and Lokayukta Act, 2013 was amended to make it operational. The act established the Lokpal as an independent statutory body to investigate corruption cases involving public servants and elected representatives, including the prime minister, except for matters related to national security. The act also established the Lokayuktas in the states to investigate corruption cases at the state level.

Despite its passage into law, the implementation of the Lokpal and Lokayukta Act has been slow. As of early 2023, the Lokpal has not yet been fully operationalized, and several key positions in the institution remain vacant. However, the act remains an important milestone in India’s fight against corruption and a significant achievement in the country’s history.

The Lokpal and Lokayukta Bill is a section of legislation that seeks to set up a self- sufficient ombudsman at both the national and state levels in India. The purpose of the bill is to provide an apparatus for citizens to report corruption and hold public officials accountable for their actions. The Lokpal and Lokayukta Act, 2013 was passed by the Parliament of India and came into force on January 16, 2014.

POWERS AND FUNCTIONS

The Lokpal and Lokayukta have the following powers and functions:

  1. Investigation: Among the people subject to investigations by the Lokpal and Lokayukta are the Prime Minister, and all government officials including Members of Parliament, who are suspected of corruption. They can also investigate complaints against public servants working in organizations that receive public funds or are owned by the government.
  2. Prosecution: The Lokpal can prosecute public officials who have been accused of corruption in court. This includes filing charge sheets and presenting evidence.
  • Asset Forfeiture: The Lokpal and Lokayukta have the power to seize assets obtained by corrupt means. This includes money, property, and other assets.
  1. Prevention: The Lokpal and Lokayukta can recommend changes to government policies and practices to prevent corruption. They can also make recommendations for changes to the law to strengthen anti-corruption efforts.
  2. Whistle-blower Protection: The Lokpal and Lokayukta can protect whistle-blowers who report corruption from retaliation by their employers or others.
  3. Grievance Redressal: The Lokpal and Lokayukta can address complaints related to grievances against public officials, including non-payment of pensions, salaries, and other benefits.
  • Public Awareness: The Lokpal and Lokayukta can promote awareness of corruption and its impact on society through public education campaigns, seminars, and workshops.

In summary, the Lokpal and Lokayukta have the power to probe and prosecute corruption cases, recommend changes to government policies to prevent corruption, protect whistleblowers, address grievances, and promote public awareness of corruption. These powers are designed to ensure that public officials are held accountable for their actions and that the government operates transparently and in the best interests of the people.

ADJUDICATING POWERS OF LOKPAL

  1. The Lokpal and Lokayukta are independent institutions that are not under the control of the government, ensuring that cases are investigated and prosecuted impartially.
  2. The Lokpal and Lokayukta have the power to initiate and fast-track corruption cases, ensuring that justice is delivered in a timely manner.
  • The existence of the Lokpal and Lokayukta has a deterrent effect on corruption, as public servants are aware that they can be held accountable for corrupt practices.

In conclusion, while the Lokpal and Lokayukta have the potential to make significant contributions to the judiciary in the fight against corruption, their effectiveness is limited by a lack of resources and the need for greater powers. However, the mere existence of these institutions has a deterrent effect on corruption, and they have the potential to be more effective with greater resources and powers.

THE VITAL ROLE PLAYED BY LOKPAL AND LOKAYUKTA

The purpose of the Act is to establish a mechanism for prosecuting cases of misappropriation and abuse of power by high-ranking government officials. The intention was to speed up the trial process while still adhering to the proper procedures and rules of evidence. The Supreme Court reviewed the constitutionality of the original bill twice, making some adjustments to it.[3] The modified bill was then passed into law and later challenged in State (Delhi Administration) v V.C. Shukla.[4] The central argument was that the bill, originally designed to try emergency offenses, was now a permanent statute and violated Article 14 due to a lack of classification. Despite this, the Supreme Court upheld the Act’s validity, stating that its primary objective was to ensure speedy trials for specific categories of offenses committed by those in positions of public or political trust. Such individuals were considered a distinct group of offenders. Maintaining democracy, administrative efficiency, and purity requires a special approach for when those in high-ranking positions commit severe abuses of power and betray the trust placed in them.

The opening statement of the main statute clearly highlights the significance of the Lokayukta in our region. Its duty involves directing both the government and legal system in combating corruption within our community.[5] In Justice Chandrashekharaih (Retired) v. Janekere C. Krishna & Ors[6]., Radhakrishnan, J. contemplated the Lokayukta’s role and proposed a solution. Ingeniously, he proposed the formation of two distinct entities, one at the state and national levels, with the responsibility of handling grievances regarding administrative actions undertaken by ministers or secretaries, and another dedicated to resolving complaints related to other officials. These bodies must operate independently and remain separate from the executive, legislative, and judiciary. In the case of Institution of A.P. Lokayukta/Upa-Lokayukta v. T. Rama Subba Reddy[7], the Hon’ble Apex Court explained the purpose behind the Lokayukta Acts. The Court noted that the Acts were designed to hold public servants accountable for their actions, and that the Lokayukta and Upa-Lokayukta, who are high-ranking judges, are intended to act as effective ombudsmen to maintain public confidence in public bodies. To ensure that their decisions are not disregarded, these authorities should be empowered with appropriate tools and penalties, and not merely be symbolic. Therefore, their recommendations must be enforceable to prevent their efforts from going to waste, and their reports from being disregarded by disciplinary authorities.

The Act is a comprehensive piece of legislation that can address many issues, such as prolonged detention of under-trial prisoners, torture of inmates, poor conditions for female prisoners, and low wages paid by government contractors to workers. The Ombudsman could have effectively addressed such cases if they had been expedited. The Act is a commendable effort to create a mechanism for investigating corruption charges against central ministers. However, it is essential to remember that addressing individual grievances against the Administration is just as important as combating corruption. The surging number of public interest litigations being presented before the Supreme Court and High Courts underscores the necessity for a system that facilitates individual resolution of grievances against the Administration.

CRITCAL INTERPRETATION OF PROVISIONS OF THE ACT

In the Act, Section 4(1) specifies that, “the President will appoint the Chairperson and members of the Lokpal based on the recommendations of the Selection Committee. This Committee consists of the Prime Minister, the Speaker of the House of People, the Leader of Opposition in the House of People, the Chief Justice of India or a nominated Supreme Court Judge, and an eminent jurist.” This provision has received criticism for potentially undermining the Chief Justice’s independence and the importance of selecting the Jurist with care to ensure the Lokpal’s effectiveness.

Section 4(2) states that, “a vacancy in the Selection Committee does not nullify the appointment of the Chairperson or a member of the Lokpal.” The intent behind this provision is unclear since it is highly unlikely that all the positions in the Committee would be vacant simultaneously. Section 5 requires the selection process to begin at least three months before the Chairperson or member’s term expires to avoid a vacancy in the Selection Committee. The appointment or vacancy of an eminent jurist can be used by the government to influence the executive members, which is a concern.

It is unexpected that the procedures detailed in Section 20 for the preliminary investigation and inquiry phases have contrasting features, and this could be considered as contradictory. When a complaint is received, the Lokpal has the option to authorize a preliminary inquiry to establish if a prima facie case exists or to instruct another agency to conduct an investigation, but only after verifying that a prima facie case has been established.

As stated in this section’s proviso, it is essential for the Lokpal to request an explanation from the public servant being investigated to ascertain the existence of a prima facie case before initiating an investigation. As a result, the Lokpal must review the public servant’s explanation before initiating any investigation.

JUDICIARY’S PERSPECTIVE ON IMPLEMENTATION OF LOKPAL AND LOKAYUKTA ACT, 2013

INTRODUCTION AND CASE LAWS

The rule of law is a cardinal foundational stone in the domain of administrative law. Regardless of his status, no man is beyond the law. With the same end goal, i.e. to subject public servants to the same laws applicable to an ordinary man, ensure fairness and equity in an investigation, and prosecute them for corruption, the Lokpal and Lokayukta Act was brought to the general public after years of sweat and blood. While the Legislature’s role was successful, the Executive’s role in implementing the Act had failed at various stages. The third pillar of democracy, i.e., the judiciary, has endorsed the bill confidently.

Even though courts have increasingly become involved in administrative management in recent years, they still play a minor role. In many cases, courts fail to conduct reviews, which impede the judicial process. Administrative authorities do not investigate the merits of official discretionary powers in their findings of fact. It is also imperative that they do not substitute their own judgment for the judgment of officials who have been entrusted with authority. As a result of the Lokpal Bill, gaps that had been left unfilled by the judiciary were filled.

In the landmark judgment of Mr. Justice Chandrashekaraiah vs. Janekere C. Krishna & Ors[8]., the Apex Court laid down general features and guidelines for the functioning of the Lokpal and Lokayukta institutions. According to them, the Lokpal was also given the status of being a member of the highest judicial body that deals with acts of injustice, corruption, favoritism, etc. A mechanism that is independent and unprejudiced must be established; investigations and proceedings should be confidential and informal; and appointments should, wherever possible, be nonpolitical. Additionally, they believe that Lokpal may acquire authority without conflicting with other constitutional authorities by being granted constitutional status for his office, powers, and functions.

The Indian Judiciary in the recent case of Vijay Raj Mohan vs. State Represented by the Inspector of Police, CBI, ACB, Chennai, and Tamil Nadu[9], the Supreme Court reaffirmed the importance and purpose of the Lokpal and Lokayukta Acts, stating that they were both made to maintain the integrity of certain public functionaries and that they work well with the Code of Criminal Procedure, and Prevention of Corruption Act etc.

CHALLENGES TO THE LOKPAL ACT

Many politicians and candidates have used the need for a Lokpal to combat corruption to further their own electoral and political agendas. However, the lack to subside by these rules after the Act came into public domain has led to nothing but a series of obstacles. One of the biggest challenges posed to the act was failure in its implementation. The Act requires every state for the appointment of a Lokayukta within one year, however numerous states have yet to do so. The Lokpal has tried to alter India’s administrative framework to fight corruption, but numerous loopholes remain.

19 states have established the office, and most are defunct. Only Kerala, Karnataka, and Uttar Pradesh succeeded. Even there, Lokayuktas lack prosecution authority, equipment, and people. Karnataka politicians have conveniently postponed a new Lokayukta.

Secondly, Lokpal is susceptible to political influence because of the composition of the appointing committee, which comprises of members of political parties and no criteria exist to determine who is “a person of integrity” or “an eminent jurist”.  It took nearly five years for the National government to create a Lokpal to investigate charges of corruption involving public employees on the grounds that there was no Leader of the Opposition in Parliament. This unrealistic approach has led to excessive delay in the process of justice administration. Further, Lokpal being a quasi-judicial body has no provisions for appeals, and A change brought about by this Act in the selection process of the CBI’s director has led to one of the biggest debates in the country regarding the demand for a supervisory committee of Lokpal taking into account the CBI’s need for functional independence.

Lastly, the Lokpal is often criticized for being toothless bodies. They do not have the power to initiate action on their own and can only investigate cases that are referred to them by the government or the courts. Further, the lack of resources and manpower add on to the ripple effect of collapsing authority of Lokpal and Lokayukta.

SUGGESTIONS AND CONCLUSION

The Act has been contested to be powerless by various critics however, from our opinion Lokpal as an institution has tremendous potential if the implementation procedure is up to mark. Lokayuktas should have been set up in every state after one of enactment of the Act however, the same has not been complied after all these years. Secondly, the Act includes Prime Minister in the Selection Committee, while simultaneously bringing Prime Minister’s office within Lokpal’s jurisdiction. It contradicts the purpose of the Act invariably. Lastly, a supervisory committee for the Lokpal and Lokayuktas should be set up excluding judiciary considering its hesitancy in the subject-matter. This committee may comprise of jurists and other corruption specialists with limited interest in legislative so the matters can address unbiasedly.

The Apex Court has expressed optimism time and again claiming the planned Lokpal and Lokayuktas will “strengthen the current legal and institutional structure” to combat corruption in Common Cause, a Registered Society V. Union of India and ors[10]. The language of “zero tolerance against corruption” was echoed throughout the ruling. The court lauded the legislative move, and anticipated that it would lead to the establishment of a stronger anti-corruption watchdog in India. Justice Krishna Iyer’s words from the Special Courts Bill, 1978 were appropriately cited by the court: “Law is what law does, not what law says, and the moral gap between word and practise menaces people’s trust in life and law.” The loss of democracy would be a terrible tragedy. However, the same optimism isn’t shared by the citizens and media. Despite substantial excitement surrounding the Lokpal’s establishment, it has not only failed to live up to expectations, but the buzz surrounding it has been unfounded, raising the question of whether the concept was such a good one in the beginning.

So far, the majority of complaints have been facetious or ultra vires of the ombudsman’s authority. Furthermore, the number of complaints, even frivolous ones, has decreased

“PRIME LEGAL is a full-service law firm that has won a National Award and has more than 20 years of experience in an array of sectors and practice areas. Prime legal fall into a category of best law firm, best lawyer, best family lawyer, best divorce lawyer, best divorce law firm, best criminal lawyer, best criminal law firm, best consumer lawyer, best civil lawyer.”

Written by- Mansi Malpani

[1] Maseeh Rahman, Anna Hazare ends Hunger Strike After Indian Government Backs Down, The Guardian, August 28th, 2011

[2] Plea against notification of Lokpal Bill panel premature: Supreme Court, The Hindu, April 29th, 2011

[3] In re, the Special Courts Bill, 1978, (1979) 1 SCC 380.

[4] State (Delhi Administartion) v. V.C. Shukla, (1980) 2 SCC 665.

[5] Mithilesh Kumar Singh vs. The State of Bihar and Ors., MANU/BH/0399/2022.

[6] Justice. Chandrashekaraiah (Retd.) v. Janekere C. Krishna, (2013) 3 SCC 117, para 19.

[7] A.P. Lokayukta/Upa-Lokayukta v. T. Rama Subba Reddy, (1997) 9 SCC 42, para 17.

[8] Justice. Chandrashekaraiah (Retd.) v. Janekere C. Krishna, (2013) 3 SCC 117.

[9] Vijay Raj Mohan vs. State Represented by the Inspector of Police, CBI, ACB, Chennai, and Tamil Nadu, (2022) LiveLaw (SC) 832

[10] Common Cause, a Registered Society V. Union of India and Ors., (2018) 9 SCC 382

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Cyber Risks In The M&A Process: Prioritizing Cyber-security For A Successful Merger

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Abstract

The growing emphasis on cybersecurity within businesses is shedding light on its pivotal role in enabling successful mergers and acquisitions (M&A). Cybersecurity due diligence holds importance not solely for the acquiring entity; rather, it brings benefits to all parties involved in the M&A process. A robust cybersecurity framework not only enhances the allure of a target firm but also ensures a seamless and secure transition for both entities. This research paper delves into an exhaustive analysis of predominant cyber threats inherent in M&A scenarios. It offers a profound comprehension of cyber risks associated with merger transactions, underscores the imperative role of due diligence in upholding cybersecurity, and presents strategies for effectively managing cyber risks during the amalgamation process. The research concludes that cybersecurity stands as a pivotal consideration throughout M&A undertakings, wherein cyber breaches and threats pose substantial hazards to both acquiring and target enterprises. By proactively adopting a comprehensive and multi-faceted approach to cybersecurity, organizations can effectively mitigate risks, safeguard sensitive data, and facilitate a harmonious post-merger assimilation. Nurturing a cybersecurity-centric approach across the M&A lifecycle emerges as an indispensable necessity in today’s digital landscape, offering protection against the ever-evolving spectrum of cyber vulnerabilities.

 

Introduction

The significance of cybersecurity in facilitating successful mergers and acquisitions has garnered increasing attention from businesses. In the prevailing landscape of threats, concerns related to cybersecurity, such as the discovery of undisclosed data breaches, hold the potential to derail deals. Engaging in M&A activities underscores the need for robust cybersecurity policies, thorough audits, and effective measures to identify, address, and mitigate security challenges and vulnerabilities within the target organization.

However, it’s important to note that cybersecurity due diligence extends beyond the acquiring company alone. Remarkable cybersecurity practices yield advantages for both sides involved in the M&A process. Demonstrating a robust cybersecurity stance can enhance the appeal of a target firm, while the implementation of cybersecurity best practices by both parties contributes to a smoother and more secure transitional phase.

Understanding Cyber Threats in the Context of Mergers and Acquisitions

In the contemporary digital era, the increasing intricacy and frequency of cyber threats have underscored the paramount importance of cybersecurity. Cyber attackers employ intricate tactics, including ransomware, phishing, and data breaches, targeting individuals, businesses, and even governmental entities. The expanding attack surface presents a substantial challenge to cybersecurity efforts. The widespread integration of IoT devices, cloud computing, and mobile gadgets has augmented the potential entry points for cyber criminals to exploit. Given the vast number of smartphone and IoT device users globally, organizations must proactively oversee and fortify interconnected devices and systems to effectively tackle this concern.

The evolutionary landscape of cyber threats is characterized by exceedingly targeted and sophisticated challenges, such as ransomware, Advanced Persistent Threats (APTs), and zero-day vulnerabilities. Traditional antivirus software alone has become insufficient in countering these threats. A multifaceted strategy encompassing advanced threat detection technologies, behavioral analytics, and real-time threat intelligence is imperative for efficacious cybersecurity. Furthermore, the emergence of nation-state-sponsored attacks poses yet another critical dilemma. Governments harness cyber espionage and warfare tactics to secure political and economic advantages, thereby posing profound implications for national security. Confronting these evolving cyber threats necessitates leveraging technology. Machine learning and artificial intelligence amplify cybersecurity capabilities by scrutinizing vast datasets to discern potential threats.

Nevertheless, technology on its own does not guarantee cybersecurity. A collective responsibility involving individuals, enterprises, and governments is indispensable. Educating individuals about risks and best practices assumes paramount importance in fortifying their online protection. For businesses, the prioritization of cybersecurity, robust implementation of access controls, and regular vulnerability assessments stand as vital measures. Governments must establish and enforce robust cybersecurity regulations to cultivate cooperation, the exchange of information, and liability within the digital ecosystem.

Given the dynamic nature of cyber threats, a proactive and comprehensive cybersecurity approach is imperative. Consistently updating systems, staying abreast of the latest threats, and investing in advanced defense mechanisms are pivotal to safeguard the interconnected realm we inhabit today. Cybersecurity has transitioned from being a mere luxury to a compelling necessity in guaranteeing a secure digital environment for all stakeholders.

The Role of Cybersecurity Due Diligence in Mergers and Acquisitions

The process of mergers and acquisitions (M&A) introduces pivotal cybersecurity risks that can cast a shadow on negotiations and yield extensive repercussions for both acquiring and target enterprises. Neglecting to address these concerns not only exposes the involved businesses to potential threats but also ripples into their supply chain. The expenses and time required to rectify profound cybersecurity issues might even imperil the successful finalization of the deal.

  • Technology Integration:

A Central Risk Element In the context of M&A, merging entities often grapple with the intricacies of technology integration, particularly when introducing new technology during the process. The complexity of fully hybrid integration, which entails amalgamating novel technologies with legacy systems, introduces challenges of compatibility and scalability. Unfortunately, this disruption can create a fertile ground for malicious activities by cyber attackers. Amidst the technological turbulence, anomalous cyber behavior might go unnoticed, culminating in data breaches and unauthorized access.

  • Dormant Threats and IoT Vulnerabilities:

The infrastructure of the acquired entity might conceal dormant cybersecurity threats, such as latent malware or issues with access management. Furthermore, the proliferation of Internet of Things (IoT) devices has introduced complexities in M&A cybersecurity endeavors. The convergence of traditional IT with operational technology elevates the potential attack surface, rendering companies susceptible to cyber assaults. In security assessments, certain IoT devices might escape the scrutiny of auditors, rendering them latent weak links in the broader cybersecurity posture.

  • IT Resilience and Cyber Assaults:

Amidst the M&A progression, prolonged periods of overburdened IT resources can emerge as fertile ground for cyber criminals. These vulnerabilities, stemming from heightened operational activity, might be exploited through strategies like phishing, ransomware, or Distributed Denial of Service (DDoS) attacks.

  • Data Security and Information Gap:

Within the M&A realm, two sets of critical data are in play, necessitating a comprehensive evaluation of cybersecurity risks for both participating entities. However, particularly in instances of minor acquisitions, the acquiring company might grapple with acquiring sufficient documentation on the cybersecurity policies and practices of the target enterprise. This information gap amplifies the complexity of cybersecurity due diligence and potentially exposes the acquiring entity to unforeseen cyber perils.

  • Organizational Turmoil and the Primacy of Cybersecurity

The process of amalgamating two organizations frequently engenders substantial disruptions as new roles, responsibilities, and operational methodologies are established. Amid these transformations, sustaining stable information systems and upholding cybersecurity assumes arduous proportions. Entities equipped with mature and advanced cybersecurity controls are better poised to identify, manage, and mitigate M&A-linked cybersecurity risks.

  • Integrating Cybersecurity across the M&A Lifecycle:

A successful navigation of the M&A journey necessitates a collaborative approach from both the acquiring and target entities. Well-defined governance structures, policies, managerial protocols, technology tools, and risk assessment metrics should be harmonized to ensure effective management of cyber risks. The identification and prompt remediation of vulnerabilities should persist through the integration process via risk assessments and proactive threat investigation.

In the increasingly intricate landscape of contemporary M&A activities, cybersecurity must assume a central role in strategic deliberations. From the outset of due diligence to the subsequent phases of integration, entities must elevate cybersecurity efforts to shield sensitive data and guard against cyber threats. By giving prominence to cybersecurity, enterprises can confidently traverse the convoluted terrain of M&A, fortified with resilience and assurance.

Strategies for Mitigating Cyber Risks in Mergers and Acquisitions

This article underscores the noteworthy cybersecurity risks inherent in the context of mergers and acquisitions (M&A) and proposes five pivotal strategies for effectively managing these risks. It underscores the critical significance of factoring in cybersecurity considerations early in the M&A journey to evade potential pitfalls that might culminate in buyer’s remorse or resource-intensive post-merger rectification efforts.

 

  • Comprehensive Evaluation of the Target Firm’s Security:

A meticulous appraisal of the security landscape of the target company prior to acquisition assumes paramount importance. Through an assessment of the target’s security posture and policies, the acquiring entity can gauge the alignment with its strategic objectives and risk appetite. Furthermore, it’s imperative for acquiring companies to gain insights into past security incidents, irrespective of their legal disclosure requirements, to attain a holistic understanding of potential risks.

  • Integration of Software Security:

In M&A scenarios with a technology focus, cybersecurity emerges as a pivotal consideration. It is imperative for acquiring entities to ascertain if the target company has ingrained security measures within its software products. Neglecting this aspect could lead to unforeseen future remediation endeavors and heighten the likelihood of data breaches. In such instances, buyers might negotiate adjustments in valuation or allocate funds in escrow to preemptively address prospective security issues. A meticulous evaluation of the software security framework of the target is imperative to prevent any untoward surprises post-merger.

  • Early Engagement of Cybersecurity and IT Teams:

The active involvement of cybersecurity and IT teams during the initial phases of the M&A process is indispensable to identify potential vulnerabilities and weaknesses. In some scenarios, target companies might lack even rudimentary security measures, potentially resulting in substantial remediation expenses. Engaging these teams in the due diligence process ensures a methodical approach to incorporating new acquisitions. This encompasses immediate security assessments and the provision of suitable training for the incoming workforce.

  • Assessment of Data Environment Risks:

Acquiring organizations must undertake a comprehensive scrutiny of the data environment of the target entity. This evaluation entails comprehending the nature of the data in question (such as personal information, healthcare records, payment data) and the pertinent regulatory requisites. Failing to grasp the inherent risks within the data environment could result in an incomplete comprehension of the security controls and overall security posture of the target firm.

  • Skills Proficiency Analysis of Target Employees

Beyond technological considerations, acquiring entities also inherit the workforce of the target company. A thorough analysis of skills proficiency is indispensable to ascertain if the incoming staff can adequately address the demands of the integration process. Overlooking skill gaps and inadequately supporting the workforce during integration might lead to burnout, morale decline, and an uptick in cybersecurity vulnerabilities.

The article underscores the substantial risks associated with data breaches during M&A, which can potentially expose confidential corporate information to malicious actors. Notable cases like Verizon’s acquisition of Yahoo and Marriott’s merger with Starwood Hotels underscore the severity of this issue. Such breaches not only trigger reputational damage but also legal consequences, exemplified by Marriott’s $123 million GDPR fine. Given the mounting frequency of data breaches in M&A, enterprises must accord high priority to cybersecurity, conducting exhaustive due diligence to mitigate risks and safeguard sensitive data.

Conclusion

To sum up, cybersecurity emerges as a pivotal factor in the M&A process, as data breaches and cyber threats present substantial hazards for both acquiring and target entities. In pursuit of a prosperous and secure merger, it becomes imperative for organizations to accord primacy to cybersecurity. This entails comprehensive due diligence, early engagement of cybersecurity teams, and meticulous assessment of the target’s security stance. By embracing a proactive and multi-pronged approach to cybersecurity, enterprises can effectively mitigate risks, safeguard sensitive information, and cultivate a seamless post-merger amalgamation. Against the backdrop of ever-evolving cyber threats, the steadfast prioritization of cybersecurity throughout the M&A lifecycle becomes indispensable in the contemporary digital realm.

“PRIME LEGAL is a full-service law firm that has won a National Award and has more than 20 years of experience in an array of sectors and practice areas. Prime legal fall into a category of best law firm, best lawyer, best family lawyer, best divorce lawyer, best divorce law firm, best criminal lawyer, best criminal law firm, best consumer lawyer, best civil lawyer.”

Written by- Ankit Kaushik

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