Traffic Legal Aid


It is pertinent to note that Traffic Legal Rules are one of the most important rules that are in violation, most of the times by both the citizens and the Traffic Police. That is why it becomes important to be acknowledged these rules and some facts that might lead to violation of the basic rights of both citizens and the authorities. It is evident that the instances wherein people might be violating the traffic rules are augmenting with the increase in the level of traffic-on-roads. The idea is not to be acquainted by any law books to have the basic traffic legal aspect through law books, and statutes. These are just simple rules and regulations that also act as guidelines towards your distinct actions as per norms of the roads.


It is to be noted that most of the rules are totally ordained by the Motor Vehicles Act of 1988. However, it does not need an arduous interpretation of its provisions, the same is manageable on the reader’s end.

The traffic rules as per Section 3, the basics of the traffic rules emerge. The section simply states the necessity of having a driving license or an instructor (carrying a valid license), to guide the driver of any given vehicle. As we turn around the pages of the act, the whole code of conduct of traffic norms can be seen. It is advised for the drivers, and in fact every citizen to be in cognizance of these major rules, and provisions, provided as per the act. Some of these are mentioned below.

    • Wearing a helmet is a law that has not actually made a legitimized legal impact at some places of the nation. However, it is to be noted that even for the shortest distances, the rider of a two-wheeler vehicle should use helmets to cover his head. The same goes for the passenger. As per Section 129 of the Act, wearing helmet is a necessary pre-requisite to for two-wheeler riders, and their passengers. Moreover, Section 128 of the act limits the passenger upto two on a particular vehicle. However, infants and children can be accommodated.
    • It is to be noted that if a traffic police officer, has ordered you to stop for any enquiry, you have to stop your vehicle, and attend to his queries. But is to be noted that No power is to be given to the Traffic Police Officer, to snatch your keys forcefully, as it is legal and at the same time, actionable in the court.
    • Moreover, it can be seen many a places, wherein Police Officers (wearing Khakis, and not the Traffic Police) are stopping people for traffic laws. It can be rightly pointed out that No such power is vested with Police Officers, to stop people, and to take actions as per the Traffic Police Officers.
    • It is advisable to negate the usage of alcohol while driving. However, there is some limit to it, while driving. A driver, as per the Motor Vehicles Act, section 185 (read with 202) if found with 30 gm of alcohol, in his 100 ml blood sample, shall be subjected to arrest without warrant. Along with it, he/she may be liable to imprisonment or fine, or both.
    • Furthermore, racing and speeding cars, are also seen on empty roads at night. It is highly advisable that despite nightfall, no such speeding or racing is allowed as per the Act, as it is both subjected to imprisonment or fine.
    • It is important to note that proper documentation of the given vehicle should be carried along, if riding or driving the vehicle, as the lack of these documents might be punishable as under the laws. Moreover, it is recommended to drive/ride insured vehicles, as it also might lead to the similar repercussions as stated above.

It can be devised that these regulations are not in contravention to any liberty, or in violence of any fundamental rights, or religious rights. These regulations are simply sanctioned by the government in order to protect the mishaps and other road-accidents that may not only intrude the lucrative flow of traffic but also to avoid deaths, and other hazardous mishaps in the flow of traffic.


The dichotomy of “what is legal” or “what is illegal” as per the traffic rules and regulations is quite vast than what one expects it to be. Therefore, it is advised to read the provisions and the guiding regulations provided as per the road and traffic control authorities, and to have a bit cognizance of any new law or any such ordinance that has been mandated. The idea is not only to be fully equipped with lawful actions of driving, but is also to protect the rights of both citizens and the authority in order to maintain law and order in the society, and smooth functioning of traffic on roads.

Written By:

Lakshya Sharma

(Intern at Prime Legal)

Article Reviewed By:

Riti Gupta

(Legal Assistant, Prime Legal)


Types of punishments under the Indian penal code, 1860 (sections 53 to 75)


The stage of punishment is the final process of the criminal jurisprudence system. The well-known fundamental tenet of the criminal law is that a person is considered innocent until proven guilty. The nature of proof requires that the evidence before the court must prove beyond reasonable doubt the guilt of the person who has been accused of the various offences.

Principle for sentencing – In every criminal case, two aspects have to be borne in mind – the heinousness or enormity of the crime and based on the circumstance under which the accused has committed the crime. Concerning maximum imprisonment, the same can be awarded only with the discretion of the judge who will consider the totality of the circumstances before imposing the punishments which should be appropriate and just. Motives as well will play a vital role in determining the sentence.

The following are the theories of Punishment, which have evolved over time – 

  1. Deterrent theory – The act that takes away the power of committing injury is called incapacitation, is in the form of remedy operated by the fear should be the main object of the punishment which is called deterrent theory
  2. Preventive theory – Even utilitarian’s like Bentham advocated the preventive remedies which tend to prevent offences[1].
  3. Retributive theory – Retributive theory is based on rights, desert and justice[2]. The guilty deserve to be punished, and therefore there must be no moral consideration relevant to punishment that outweighs the offender’s criminal desert is the philosophy of retributive theory[3].
  4. Reformative theory – The object of punishment has been considerably under the process of changes from the last centuries because of the Welfare State concept. In Criminal Law we must  reduce the brutalities of punishment is today’s philosophy of law[4]

The following are the types of punishments under the Indian penal code provided under sections 53-60

  1. Death
  2. Imprisonment for life
  3. It has been repealed by act 17 of 1949
  4. Imprisonment with two descriptions – Rigorous (Hard labour), Simple Labour
  5. Forfeiture of property
  6. Fine

Let us understand in detail the type of punishments imposed by the courts on the accused for the crime they have committed under IPC.

  1. Death Sentence
  • The death sentence is the harshest form of punishment under the Indian Penal Code, it involves judicial killing or taking the life of the accused as a form of punishment.
  • Capital punishment is provided for the following offences – a) Treason as in waging, attempting or abetting war against the government of India (section 121), b) criminal conspiracy to commit an offence punishable by death (section 132), c) Abetment of mutiny committed (section 132), d) Perjury resulting in the conviction and death of an innocent person (section 195A) e) threatening or inducing any person to give false evidence. F) murder, g) abetment of suicide by a minor or an insane person or intoxicated person h) attempted murder by a life convict I) kidnapping for ransom j) causing death or resulting in a vegetative state of a rape victim k) committing rape on a girl under the age of 12 L) committing gang rape on a girl under 12 years M) repeat offenders N) Dacoity accompanied with murder.
  • The constitutional validity of Sec 303: Rajendra Prasad v State of Uttar Pradesh[5] – when the supreme court concludes that the accused is guilty of murder then the state through the prosecutor should be called upon court and state whether the extreme penalty is called for.
  • Under Sec 354(3) CrPC: The court has to give a special reason to explain why it came to this conclusion. This provision was introduced in the year 1973 which was in contrast to the earlier provision which made the death penalty the rule.
  • Sec 366 CrPC: Once the sessions Court award the death penalty, the Court has to submit the same to the HC for confirmation. The second level of review of the evidence is made.
  • Cases where the death penalty was confirmed – state of Tamil Nadu v Nalini[6] – 26 persons accused of being involved in the conspiracy to assassinate the former prime minister of India, Rajiv Gandhi. In Jai Kumar v state of Madhya Pradesh[7] Jai Kumar was sentenced to death for killing his sister-in-law who was pregnant and her eight-year-old daughter because she did not give him enough food.
  • Case laws where the death sentence was commuted to life imprisonment – Om Prakash v State of Haryana[8] – where an army man killed seven members of a rival family. Kishori v state of Delhi[9] – large scale death of Sikhs due to the assassination of then prime minister Indira Gandhi by two Sikh men.
  • Lehna State of Haryana [10]: when the collective consciousness of the community is so shocked that it would expect the holders of judicial power to impose the death penalty.
  • Bachan Singh the State of Punjab[11] (Constitutional Bench) The Bench held that: A real and abiding concern for the dignity of human life postulates resistance to taking a life through law’s instrumentality. That ought not to be done in the rarest of rare cases when the alternative option is unquestionably foreclosed. ‘Rarest of rare’ principle hence evolved in this case.
  1. Imprisonment for life
  • Section 53 secondly talks about imprisonment for life which means the sentence of imprisonment running throughout the remaining period of a convict’s natural life unless it’s commuted or remitted by the competent authorities.
  • In Gopal Vinayak vs the state of Maharashtra[12], as regards the nature of imprisonment it has been held to be rigorous imprisonment and not simple imprisonment. This was held in KM Nanavati vs the State of Maharashtra[13] and also in Naib Singh vs the State of Punjab[14] in which the court held that imprisonment for life meant rigorous.
  • The accused awarded life imprisonment, therefore, has to be retained in jail for the rest of his life. Even a state act equates life imprisonment with imprisonment for 20 years a convict does not entitle to an automatic release on expiry of the term of imprisonment including remission.
  • The view reiterated in State of Madhya Pradesh vs. Ratan Singh,[15] The supreme court held that it was the direction of the government to choose to exercise its discretion to remit either the whole or a part of the sentence under section 401(equivalent to section 432 of the present Cr.P.C.
  1. It has been repleaded by the law
  1. Imprisonment with two descriptions – Rigorous (Hard labour), Simple Labor
  • When it comes to rigorous imprisonment, unlike the simple version the prisoners are put to hard labour such as grinding corn, digging the earth, drawing water, construction of roads and dams, cutting the firewood, bowing wool etc.
  • However, in the Simpler version, the prisoner is merely confined in jail and is not put to any kind of work.
  • Some offences are made punishable by both rigorous and simple imprisonment under the Indian penal code. Only a trial court has the jurisdiction to award the form of punishment for the convict. Some sentences can be wholly or partly rigorous or simple.
  • Minimum wages for prisoners – the State of Gujarat vs. Honorable High Court of Gujarat[16] when there is rigorous imprisonment is accompanied with hard labour, these prisoners are entitled to wages for the work done by them as it is a matter of right which have to be paid as it would strengthen the dignity of convicts and penal jurisprudence.
  1. Forfeiture of Property
  • The punishment of forfeiture of property is ancient, section 53 fifthly deals with forfeiture of property as a form of punishment. This principle has been ceased to be a punishment except in three types of offences
  • 1st In cases where the offender commits depredation or make preparations for committing depredations against the government of India will be punished with forfeiture of the property mentioned under section 126.
  • 2nd receiving any property taken in the commission of war or depredation is punished with forfeiture of property which is elaborated under section 127.
  • 3rd if any public servant unlawfully buying or purchasing property in his name or another’s name is punished with the same elaborated under section 169.
  • In Shoba Suresh Jumani v appellate tribunal[17] – the supreme court held that section 61 and 62 which was repealed in 1921 is required to be re-introduced in the law for having the deterrent effect on those who are bent upon to accumulate wealth at the cost of society misusing their power or post.
  1. Fine
  • Fine is a forfeiture of money by way of penalty, in sections 137,155,171-177,278,283,294,154,157 of the Indian penal code are offences that carry fine as the sole punishment. Some offences fines are imposed as an alternative punishment. Some offences fines are imposed as an additional punishment.
  • Concerning the amount of fine, it will be imposed individually and not collectively. The amount of fine should not come unduly harsh.
  • In Philip Bhimsent Anid v. State of Maharashtra[18], The accused has been convicted and sentenced to life imprisonment and was also ordered to pay a fine and as since the offender was only 19 years old and a house servant, he was unable to pay the fine, the court, therefore, reduced the fine amount.
  • There is certain imprisonment that is imposed due to default in payment of the fine, when the same is paid the imprisonment will be terminated.
  • Shahejadkhan Mahebubkhan Pathan v state of Gujarat [19]Where a substantial term of imprisonment is inflicted an excessive fine should not be imposed except in exceptional cases. Shantilal v state of Madhya Pradesh[20]The court held that the amount of fine should not be harsh or excessive.

Written by:

A. Beryl Sugirtham,

Intern at Prime Legal 

Article reviewed by: 

Riti Gupta 

Legal Assistant, Prime Legal


[1] Jeremy Bentham, op. cit.

[2] Amit Bindal, “Rethinking Theoretical Foundation of Retributive Theory of Punishment”, 51 JILI (2009)

[3] Stanford, edu/archives/spr2010/entries/punishment

[4] Sutherland Edvin H and Cressey Donald, Principles of Criminology, {12th Ed}, (Bombay: The Times of India Press, 1985).

[5] Rajendra Prasad v. state of Uttar Pradesh AIR 1979 SC916

[6] State of Tamil Nadu v. Nalini AIR 1999 SC 2640

[7] AIR 1999 SC 1860

[8] Omprakash v state of Haryana AIR 1999 SC 1332

[9] Kishori v state of Delhi AIR 1999 SC 382

[10] (2002) 3 SCC 76

[11] AIR 1980 SC 898 : (1980) Cr LJ 636 (SC)

[12] Gopal Vinayak Godse Vs. the state of Maharashtra, IR 1961 SC 600 : (1961) 3 SCR 440. 

[13] KM Nanavati vs. State of Maharashtra  AIR 1962 SC 605 see also a state of Madhya Pradesh vs. Ratan Singh AIR 1976 SC 1552

[14] Naib Singh vs. State of Punjab AIR 1983 SC 855: (1983) Cr LJ 1345( SC)

[15] State of Madhya Pradesh vs. Ratan Singh AIR 1976 SC 1552

[16] State of Gujarat Vs. Honourable High Court of Gujarat AIR 1998 SC 3164: (1998) 7 SCC 392

[17] Shoba Suresh Jumani vs. appellant tribunal, Forfeiture of property AIR 2001 SC 2288 : (2001) 5 SCC 755: (2001) Cr LJ 2583 (SC)

[18] Philip Bhimsent Anid v state of Maharashtra (1995) Cr. LJ 1694 (BOM)

[19] Shahejadkhan Mahebubkhan Pathan v state of Gujarat 2012 (10) scale 21

[20] Shantilal v state of Madhya Pradesh (2007) 11 SCC 243: 2007 (10) SCR 727

References – PSA Pillai’s Criminal Law, 14th edition and Criminal manual, Indian Penal Code as amended by the Jammu and Kashmir Re-organization Act,2019.


Maintenance to the second wife: A Gender Justice Perspective

Badshah v Urmila Badshah (2013): A case about maintenance to the second wife


The year 2013 marked a very interesting case of Badshah v Urmila Badshah[1] where the petitioner Mr. Badshah had concealed the fact of his first marriage and denied maintenance to his second wife. Both the marriages, in this case, were proved, but since Mr. Badshah had already been married. Based on the above-stated facts, it was derived that the petitioner could not be allowed to deny maintenance to his second wife (the respondent). Denying the right to seek maintenance to the second wife because of the husband’s wrong is taking advantage of it and hence wrong. A bench comprising Ranjana Prakash Desai and A K Sikri discussed the issue of whether the second wife (Respondent) was entitled to any sort of maintenance?


Mr. Badshah got married to Ms. Urmila (Respondent), following all Hindu Rites and customs, on the 10th of February, 2005, at the Devgad Temple, Hivagrav-Pavsa. Post the marriage, both the respondent and petitioner stayed together at the house of the petitioner (Mr. Badshah). One day, his first wife named ‘Shobha’ knocked on the house, claiming to be his wife. Mr. Badshah asked the respondent to live quietly if she wanted to stay with him at his house or leave his house and go back to her house, on asking about his first wife, Shobha.

At the time, the respondent (Ms. Urmila) was pregnant and bearing Mr. Badshahs child and hence chose to stay with Ms. Shobha despite Mr. Badshah’s misbehavior. Soon, Mr. Badshah, under the influence of alcohol, started torturing Ms. Urmila both physically and mentally. When it was too much for her to handle while being pregnant, she decided to leave the petitioner’s house and go back to her parent’s house. Shivanjali, the daughter of Ms. Urmila and Mr. Bahadur, came into being on the 28th of November, 2005, and on the basis of the actualities, Ms. Urmila (Respondent) was seeking maintenance to provide for herself and her newborn child.

Mr. Badshah filed to leave the appeal of the order and judgment passed by the Bombay High Court on the 28th of February, 2013 under Section 125[2] of the CrPC, which directed Rs. 1000 maintenance towards Ms. Urmila and Rs 500 towards their daughter Shivanjali. This Section was upheld by the Learned Trial Court and was also affirmed by the Additional Sessions Judge.

The petitioner contended that his relationship with Ms. Urmila (Respondent 1) and Shivanjali (Respondent 2) as wife and daughter respectively was false. He also alleged that the so-called marriage did not even take place, and the respondent never stayed with him at his place. He even went on to the extent of saying that Respondent 1 had a habit of lying, falsely accusing, and was blackmailing the petitioner. He also claimed that he is not the father of Shivanjali (Respondent 2).

According to the petitioner, he was only married once on the 17th of February, 1979 to Ms. Shobha (first wife) and had only two children (a 20-year-old daughter and a 17-year-old son), and they have been staying together at his place. To conclude, he stated that the fact being that he was married to Shobha and was living with her was proof that he did not and could not be his wife and that she filed a false and wrong petition in which she was claiming to be his wife.

The respondent had stated that she was initially married to Popat Fapale to whom she was divorced in the year of 1997. After which she has been staying with her parents at her parent’s house till 2005. In 2005, the petitioner demanded their marriage via mediators, and she got married to him on the 10th of February 2005 at Devgad Temple, Hivargav-Pavsa.

This case is a combination of both the marriages being proved. The petitioner duping the respondent into being his second wife. The respondent being pregnant with their child and seeking maintenance for her and her child. According to my the petitioner has no grounds to not provide the respondent and her daughter with maintenance.

The esteemed court made reference to a lot of cases, including Chanmuniya vs. Virendra Kumar Singh Kushwaha & Anr. (2011) 1 SCC 141[3] where the partners had been staying together for a very long time. The question of presumption of marriage arose, giving rise to the issue of maintenance (Section 25 Criminal Procedure Code[4]) while largely interpreting the terminology of ‘wife’. The court held that if a man and a woman have lived together for a long time in the absence of a valid marriage, such a woman would be entitled to maintenance under Section 25 of the Code.

In the current case, Ms. Urmila has strong proof that she was married to Mr. Badshah. The court made reference to more judgments like Rameshchandra Daga v. Rameshwari Daga AIR 2005 SC 422[5], Capt.Ramesh Chander Kaushal vs. Veena Kaushal (1978) 4 SCC 70[6], Dwarika Prasad Satpathy vs. Bidyut Prava Dixit & Anr. (1999) 7 SCC 675[7], Savitaben Somabai Bhatiya vs. State of Gujarat & Ors. (2005) 3 SCC 636[8] and Yamunabai Anantrao Adhav vs. Anantrao Shivram Adhay & Anr. (1988) 1 SCC 530[9].


The marriage of Mr. Badshah and Shobha was kept a secret from Ms. Urmila, and she was falsely mispresented about the scenario. By not entitling Ms. Urmila to maintenance under Section 25, Mr. Badshah would be allowed to take advantage of his heinous act. Supreme Court observed that “This approach is particularly needed while deciding the issues relating to gender justice. We already have examples of exemplary efforts in this regard. The journey from Shah Bano to Shabana Bano guaranteeing maintenance rights to Muslim women is a classic example.” The Supreme Court had declined to grant leave to the petitioner and, by giving aforesaid reason dismissed the special leave petition.


[1] Badshah v Urmila Badshah, (2014) 1 SCC 188.

[2] Section 125, The Code of Criminal Procedure, 1973.

[3] Chanmuniya vs. Virendra Kumar Singh Kushwaha & Anr., (2011) 1 SCC 141.

[4] Section 25, The Code of Criminal Procedure, 1973.

[5] Rameshchandra Daga v. Rameshwari Daga, AIR 2005 SC 422.

[6] Capt.Ramesh Chander Kaushal vs. Veena Kaushal, (1978) 4 SCC 70.

[7] Dwarika Prasad Satpathy vs. Bidyut Prava Dixit & Anr., (1999) 7 SCC 675.

[8] Savitaben Somabai Bhatiya vs. State of Gujarat & Ors., (2005) 3 SCC 636.

[9] Yamunabai Anantrao Adhav vs. Anantrao Shivram Adhay & Anr., (1988) 1 SCC 530.


Regulation of Crypto-tokens in India

Every crypto-token or altcoin has one thing in common. They break down the geographical impediment of finding investors by holding the token offering at a global level: the advent of online transactions facilitating them. China and Turkey have outrightly banned any kind of sales related to cryptocurrency while Thailand has opted for a selective ban. Though crypto-tokens are now regulated in the US after getting recognized as a commodity, the situation pertaining to the sales aligned with ICOs, after getting an initial ban is now selectively regulated by the SEC. India, backed by its technological boom could not remain a stranger to cyber innovation and witnessed its first major crypto-exchange, Unocoin in 2014 which opened the proverbial Pandora’s Box. Since then, it has been nothing short of a turbulent journey for the Indian crypto-community.

An inter-ministerial commission was set up in the fall of 2017 to weigh the factors against the regulation of cryptocurrency and submitted the bill titled Crypto Tokens and Crypto Assets (Banning, Governing, Regulating) Act of 2018. A consensus was reached that banning might not produce the best results considering the government’s own experimentation with the blockchain technology. However, this was all set to change soon, when RBI decided to issue a notification dated 6th April 2018; through which it sought to immediately stop all banks from transacting with the crypto-exchanges. The Parliament’s own tryst with the complexities of the issue produced two bills: Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019 and the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021; both of which have failed to get enacted. In the light of this, if it had not been for the IAMAI judgment, we would have been stranded cascading complexities of the crypto-sphere. Albeit the judgment took cognizance of budding investments in this paradigm and gave them a green signal; on second thought, it still could not address what is the true nature of the tokens and in what form are they to be regulated. Based on the above premise, we are aware that Kik v SEC [1] ruled SAFT agreements to be securities. Furthermore, the CFTC is the governing body in the paradigm of future tokens and views these tokens as commodity.

To be regulated like security?
Instead of viewing cryptocurrency as an alternative to fiat currency, a compelling approach would be to see it through the lens of security market. RBI would not be issuing any legal tender to cryptocurrency anytime in the near future; however so until any such arrangement is made it is prudent to see it as a security. The tokens take the value from the startup behind the project and give the holder a stake in that startup through ICOs. People buy these tokens solely with the idea that their value will increase in the future along with the underlying value of the cryptocurrencies. Thus they derive their value from the underlying asset just like a derivative does.

Howey Test
The Howey test finds it origins in the USA which was formulated by the US Supreme court in the case of Sec v Howey, to pinpoint whether a financial instrument would be in nature of an investment contract. As per this test, a transaction is an investment contract if it has three important features: first, it involves a money investment; second, the investor has an expectation of profit; and third, the profit is generated by the efforts of the issuer of the instrument. In Kik v SEC, the court was of the opinion that SAFT construed to be a security since it satisfied all three prongs. In addition to the start-ups issuing the token, we can also take into account the crypto-exchanges which facilitate trading in the secondary market and contribute to the influx of new investors.

The broadest prong of the Howey test surrounds the issue of actual investment of money. The ICO private sales invite accredited investors for a seed stage financing. The total market capitalization for Kin was around $75 million. One of the crypto-networks founded in India known as Polygon has a market capitalization of $13 billion[2]. In the secondary market, the usual method followed; by the crypto-exchanges involves the exchange of fiat currency of the buyer with the seller of the cryptocurrency. The takeaway is that the cryptocurrency they receive is in form of a stablecoin. The investor needs to exchange this stablecoin for other cryptocurrencies[3]. Since there is a prima facie initial investment of money, the first condition of the test stands satisfied.

In respect of the second test where the investor expects profit, it is important to review the dividend rights asserted through the ICO. Kin was sold on the promise of huge returns on completion of project which incentivized the investor. As discussed above, ICOs are way to raise fund for the projects and represent a stake in the network. Investors expect profit as the value of the organization increases just as they would when public shares of a company return profits. A relatively new ICO could average the return rate of 50% in the first 30 days[4].
Let’s also consider the other investors who only wish to trade in the secondary market. Even when we view it from their standpoint, it does not fall short of what an ordinary person would expect from a profit stock market. The investors who had bought the stablecoin would now invest in different crypto-tokens and expect profit in the event of a bullish market. The analogy not only goes a long way in establishing a connection between cryptocurrency trading and the ordinary stock market but also helps in identifying a nexus between cryptocurrency and securities.

To satisfy the third test, the profits drawn should have been a result of others’ efforts. The effort here can be construed to be managerial efforts of the crypto-network to contribute to the development of the network and in creating a demand of the tokens in general. Investors in the case of Kin held onto the SAFT as a promise to be delivered future tokens after the complete development of the network subsequent to the public offering. The tokens would have been issued only when the overall project would be successful which depended heavily on the managerial effort[5]. Hence the profit was drawn from the active effort of others.
In this context, the crypto-exchanges perhaps stand out the most because of the myriad of functions that they perform such as maintaining liquidity, compiling the aggregate information of buying and selling price and thereby depicting the token value accurately[5]. Further, investors will choose the crypto-exchange depending on the quality of their whitepaper, their business plans, the kind of interface they deploy, their ease of transaction.

SEBI can come within purview only when the transactions involve securities within the meaning of Section 2(h) of the Securities Contracts (Regulation) Act, 1956:
(h) “securities” include—
(i) shares, scrips, stocks, bonds, debentures, debenture stock or other marketable securities of a like nature in or of any incorporated company or other body corporate;
[(ia) derivative;
(ib) units or any other instrument issued by any collective investment scheme to the investors in such schemes;]

On a plain reading, it is clear that the definition of securities is befitting for cryptocurrency. Although SAFTs are not equivalent to a debenture but are in the nature of a future commodity, they could still come within the ambit of this definition by the virtue of being a unit issued by through a collective scheme. Furthermore, the price of crypto-tokens on the secondary market derives its value from the development of the crypto-network. Hence correspondingly SEBI can become the regulatory body for crypto-exchanges in lieu of RBI.

It was noted in Sudhir Shantilal Mehta vs. Centra Bureau of Investigation by the Supreme Court bench that: “The definition of `securities’ is an inclusive one. It is not exhaustive. It takes within its purview the matters specified therein and all other types of securities as commonly understood. The term `securities’, thus, should be given an expansive meaning.”[6]
In Naresh K. Aggarwala & Co. vs. Canbank Financial Services Limited[7], it was contended that only listed securities would come under the definition of the SCRA. While the apex court eventually held the definition of securities to be wide enough to include unlisted securities also; we need to reminisce that SAFTs are also in nature of unlisted security sold to private investors before a public offering of tokens is held.
Lastly, in Sahara India Real Estate Corporation Limited and Others vs. SEBI and another, the Supreme Court opinionated that,

Section 2(h) of the SCR Act gives emphasis to the words “other marketable securities of a like nature”, which gives a clear indication of the marketability of the securities and gives an expansive meaning to the word securities. Any security which is capable of being freely transferrable is marketable. The definition clause in Section 2(h) of SCR Act is a wide definition, an inclusive one”[8].

Thus, in either nature of investments, we find that tokens qualify as security that would enable the Central authorities to regulate it. However, the major setback, in this case, would be that of failing to achieve the objective of decentralization. If we look at the eventual result, we are still tying up the value of tokens with fiat currency in the application of the first prong of the test which proves to be detrimental to the cause of decentralization as envisioned by the Government think tank, Niti Aayog[9].

Misplaced Concern
The IAMAI judgment although liberated the exchanges and gave them a right to trade by striking down the circular, it missed the crucial point of assessing the true nature of crypto-tokens. It viewed them from a mono-dimensional view of currencies only and considered the various definitions cited in different acts across the years[10].

Clause (33) of Section 65B of the Finance Act, 1994, inserted by way of Finance Act, 2012 defines ‘money’ to mean “legal tender, cheque, promissory note, bill of exchange, letter of credit, draft, pay order, traveler cheque, money order, postal or electronic remittance or any other similar instrument, but shall not include any currency that is held for its numismatic value”.

S.2(h) of FEMA defines currency as “includes all currency notes, postal notes, postal orders, money orders, cheques,drafts, travellers cheques, letters of credit, bills of exchange and promissory notes, credit cards or such other similar instruments, as may be notified by the Reserve Bank.
And a final consideration of the The Central Goods and Services Tax Act, 2017 which defines ‘money’ under Section 2(75) to mean “the Indian legal tender or any foreign currency, cheque, promissory note, bill of exchange, letter of credit, draft, pay order, traveler cheque, money order, postal or electronic remittance or any other instrument recognised by RBI, when used as a consideration to settle an obligation or exchange with Indian legal tender of another denomination but shall not include any currency that is held for its numismatic value.

On a perusal of the above definitions, the court was of the view that promissory notes, cheques, bills of exchange, etc. were not exactly currencies but operated as valid discharge (or the creation) of debt only between 2 persons or peer-to-peer. From this standpoint, it was short-sighted for the bench to accept the contention of the petitioners that VCs were just goods/commodities and can never be regarded as real money. Having established that the sales of tokens are backed by contractual protections (SAFT in cases of crypto-network), their utility is actually quite similar to a promissory note. They promise the delivery of tokens which represents a stake in the network.

Prohibitions are “economically inefficient means of regulation” because they may eliminate any potential benefit that could have stemmed from the banned technology and also dampen any subsequent future innovation[11]. Various countries however have already started regulating cryptocurrency under different approaches. Japan has made it a legal tender under the – Payment Services Act, 2005 while Canada has treaded cautiously by placing it under -Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, 2002: Section 1(2):
Virtual currency means (a) a digital representation of value that can be used for payment or investment purposes that is not a fiat currency and that can be readily exchanged for funds or for another virtual currency that can be readily exchanged for funds; or
(b) a private key of a cryptographic system that enables a person or entity to have access to a digital representation of value referred to in paragraph (a).”

Singapore has gone for the dual approach of regulating virtual currencies both as securities and legal tender money. All the while USA and Indonesia have categorized it as a commodity. Under Section 1a(9) of the US Commodity Exchange Act, the Commodity Futures Trading Commission, USA defines “commodity” to include, among other things, “all services, rights, and interests in which contracts for future delivery are presently or in the future dealt in.”[12]

United Kingdom has followed the footsteps of Canada by mandating all the crypto-exchanges to comply with the AML/CFT measures and the categorization of cryptocurrencies has been as under property. Lastly the European Union’s Directive 2018/843 of 30 May 2018 (5thAnti-Money Laundering Directive) Article 3(18) which defines cryptocurrency as:
Virtual Currencies’ means a digital representation of value that is not issued or guaranteed by a central bank or a public authority, is not necessarily attached to a legally established currency and does not possess a legal status of currency or money, but is accepted by natural or legal persons as a means of exchange and which can be transferred, stored and traded electronically.

Cryptocurrency through the advent of blockchain can avoid the traditional banking systems opted during international trading which in turn prevents any extra transaction fee and lowers down the cost of cross-border payments. From a broader perspective, the rise of cryptocurrencies is not only for easier trade but it is also a direct consequence of the sub-prime mortgage crisis of 2008 which saw the financial sector come crumbling down. The heavy dependence on the aficionados of the finance world: banks; cost the individuals a lot in respect of their livelihood and savings because of which the idea behind the decentralized system as propagated through cryptocurrency flourished. On similar lines, the virtual currency also came to be celebrated as it facilitated veiled transactions, safe from the scrutiny of the government.


Written by:

Shiladitya Mishra,

Intern at Prime Legal



[1]Case No. 19-cv-5244


[3]WazirX, WRX Token whitepaper, https://download.wazirx.com/wrx/wrx-whitepaper.pdf, Coinbase whitepaper, https://www.sec.gov/Archives/edgar/data/1679788/000162828021003168/coinbaseglobalincs-1.htm

[4]Benedetti, Hugo E and Kostovetsky, Leonard, Digital Tulips? Returns to Investors in Initial Coin Offerings (May 20, 2018). Journal of Corporate Finance, Vol. 66, No. 101786, 2021, Available at SSRN: https://ssrn.com/abstract=3182169 or http://dx.doi.org/10.2139/ssrn.3182169

[5]Kristin N. Johnson, Regulating Cryptocurrency Secondary Market Trading Platforms, https://lawreviewblog.uchicago.edu/2020/01/07/298/


[7]IVIL APPEAL NO.5173 OF 2004

[8]Para 111, CIVIL APPEAL NO. 9813 OF 2011

[9]Blockchain: The India Strategy, https://niti.gov.in/sites/default/files/2020-01/Blockchain_The_India_Strategy_Part_I.pdf

[10]Writ Petition (Civil) No.528 of 2018

[11]Kesan, J. P., & Shah, R. C. (0AD). Shaping Code. SSRN Electronic Journal. https://doi.org/10.2139/SSRN.328920

[12]See, e.g., Board of Trade of City of Chicago v. SEC, 677 F. 2d 1137, 1142 (7th Cir. 1982). Bitcoin and other virtual currencies are encompassed in the definition and properly defined as commodities.



Section 66 (a) of the IT Act, 2005: A Zombie Provision.


Section 66 (a)[1] of the Information Technology Act, 2000, read as follows: “Any person who sends by any means of a computer resource any information that is grossly offensive or has a menacing character; or any information which he knows to be false, but for the purpose of causing annoyance, inconvenience, danger, obstruction, insult shall be punishable with imprisonment for a term which may extend to three years and with fine.” The provision of Section 66 (a) is a part of the ‘zombie provisions’, which are presently being used as a tool by the police for the prosecution of people years after it has been struck down and been declared as invalid. It is unconstitutional on the grounds that it sweeps protected speech that might be innocent under the rug, hence there is a need for the provision to be repealed that arises on the grounds of it being ‘overbreadth’ which indicates the void nature of the provision.


Section 66 (a), Legal Zombie, Justice Nariman, Shreya Singhal v Union of India, freedom of speech.



This section was introduced and used to punish any online communication that was grossly offensive. However, as Justice Nariman commented, “Implementation is a problem.” Section 66 (a) of the Information Technology Act excessively, disproportionately and arbitrarily invaded the fundamental rights of freedom to speech which in turn has a negative effect on the balance between reasonable restrictions and said rights that might have been imposed. This violated the fundamental rights of the citizens under Section 14[2], which guarantees ‘equality before the law’, Section 19 (1) (a)[3], and Section 21[4] of the Constitution of India, which guarantees’ right to life and personal liberty’, that has been enshrined in the Constitution of India. Section 19 (1) (a) guarantees a citizen ‘the right to freedom of speech and expression.’; however, this provision severely impacted and went strikingly opposite the same because it influenced peoples right under the said section.


Reasons behind the scrapping of Section 66 (a) of the Information Technology Act, 2000?

The Supreme Court of India repealed the provision of Section 66 (a) of the IT Act on the 24th of March, 2015. While scrapping the provision made the following observations in its judgment:

– While identifying liberty of thought and expression as ‘cardinal’, the bench observed that the said provision directly affects and influences the citizens’ freedom of speech and expression, ‘right to know’ as guaranteed in the Indian Constitution, which violates and hence contradicts with the Section 19 (1) (a) of the Constitution of India. 

– The court also observed that the language used in the provision is vague. Words like ‘grossly offensive’, ‘annoying’, and ‘inconvenient’ are the enshrined grounds for holding a person accountable under the provision and deeming it unconstitutional. This is difficult for both the offender and the law enforcement agency to identify the offence. For this, two UK judgments were used to figure out if the material of the question raised was grossly offensive or just offensive, to which two separate conclusions were derived.

– In the essence of the previous point, the court also observed that if the judicially trained minds derived two different sets of conclusions, then how can the others fairly decide whether something is grossly offensive or offensive at all. It is nearly impossible since it varies, and what may be offensive to one may not necessarily be offensive to the other person.

– NDA governments assurance on ensuring that the provision shall not be misused after the introduction of a few procedures was quashed by the court. The court gave its reasoning based on its observation that ‘Governments come and go, but section 66 (a) will remain forever’ since the government cannot take an undertaking that the future government will not misuse and/or abuse the provision.


The Legal Zombie making the rounds of Supreme Court years after being repealed.

On the 5th of July, 2021, the honourable Supreme Court voiced their astonishment at the event of people still registering First Information Reports (FIRs) under the repealed Section 66 (a) of the I T Act, 2000, which was rescinded in the case of Shreya Singhal v Union of India (2015)[5]

Justice Rohinton Fali Nariman expressed sheer disappointment and shock while hearing an application seeking guidelines on the FIRs that were filed under the provisions of Section 66 (a) of the IT Act, which was filed by PUCL (Peoples Union for Civil Liberties). He further went on to say, “What is going on is terrible.” while remarking that it was a 2015 judgment as soon as he laid eyes on the petition since people are still being prosecuted under this provision which was long struck down.

Even after seven years of the section being repealed, thousands of cases across the country are being filed where the offenders are being prosecuted under Section 66 (a) of the I T Act, stated Senior Advocate Sanjay Parikh, who was appearing for the petitioner in the PIL case. This also shows the level of legal illiteracy present amongst the law enforcers of the country, hinting towards its ‘draconian’ nature. The solution to this illiteracy lies in making police forces independent from the influence of politics and professionalising them. Since it was observed that they seem to be blindly working in the favour of the political parties while disregarding the public by taking recourse to zombie provisions without actually realising the validity and scope of the provisions.

An interesting observation made by Attorney General for India KK Venugopal revealed that even though the division bench struck down the provision, the section is there in the Bare Act. It is written in the footnote only that it has been mentioned that the Supreme Court of India has struck down the provision of Section 66 (a) of the Information Technology Act, 2005. Nonetheless, the police will not look at the footnote, which was commented by the honourable Justice R F Nariman, which circles back to the need of mentioning that it has been repealed right next to the provision of the said section to put an end to this misconduct.


Violation of fundamental rights and why is it happening?

Section 21 of the Constitution of India guarantees’ protection to life and personal liberty’, which is violated due to the dire consequences of the provision since people are still being prosecuted under the scrapped provision. Hence, through the respected high courts, all district courts must be communicated of the entirety of the Section 66 (a) of the I T Act being struck down.

Major inferences that can be drawn from this act is that either the magistrates and few prosecuting agencies are proactive in not giving effect to the landmark judgment in Shreya Singhal or the enforcement relies predominantly on the defendants stimulating the law in to action. These inferences can be drawn from the NCRB data, which supports the observation that even after its ‘constitutional death’, Section 66 (a) of the I T Act continues to have a zombie like undead application across the country in the esteemed courts and the police-stations. The court, in light of this non-compliance, should have undertaken suo moto cognisance of the failure of communication between the states’ branches.


Conclusion and Solution 

There a lot of zombie provisions like the Section 66 (a) that presently exist in the Indian society, and a simple yet effective solution to this would be to “create a procedure for the automatic tabling of an amendment to give effect to the Supreme Court decision like the rules pushed through under many statutes by the executive.” If these laws are not voted against specifically, then these laws must be circulated in the Gazette of India. In addition, initiating debates on the changing of the Gazette for the inclusion of sections as a constitutional import from the Supreme Court judgments. It is time to put a stop to this injustice, educate the masses about the validity and scope of the provisions so that not one more innocent person can be ‘bit’ or prosecuted under these legal zombies.



[1] § 66 (a), Information Technology Act, 2005.

[2] § 14, Constitution of India.

[3] § 19 (1) (a), Constitution of India.

[4] § 21, Constitution of India.

[5] Shreya Singhal v Union of India,  AIR 2015 SC 1523.

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