INTRODUCTION

India has the world’s second largest population with an approximate total of 138 crores [1]. With such a large population India produces a huge work force i.e. skilled and unskilled labour for many industries and factories. Hence it is very important to have proper labour legislations in place to protect the rights of the workmen working at different industries. The Constitution of India under the Seventh Schedule in the Concurrent list empowers both the Central and State government to make legislations on labour and employment. Therefore, there are more than 100 legislation in India enacted either by the Central or State government based upon different subjects like industrial relations, wages, social security, conditions of service and employment, code of conduct and various other matters [2]. Further, the Central Government has recently carried out a major reform to the labour laws by passing three bills i.e. the Occupational Safety, Health And Working Conditions Code, 2020; the Industrial Relations Code, 2020; and the Code on Social Security, 2020. The three codes merge 24 legislations passed by the Central Government [3]. The main objective to carry out the reform is to have uniform laws and to limit the chances of overlapping provisions.

In this paper we are primarily going to discuss about subsistence allowance and its importance under Article 21 of the Constitution. Subsistence allowance is an allowance under which a particular percentage of the entire wage is provided to the workmen by the employer during the period he is suspended from his employment due to an investigation pending against him for any misconduct or wrongful activities carried out by him. The allowance is paid in order to fulfill his and his family’s basic means of livelihood. The Supreme Court and the High Courts have adjudicated upon cases involving ‘subsistence allowance’ and have considered it as a right of a workman under Article 21 of the Constitution. Hence in this paper we are going to discuss about the legal provisions regarding subsistence allowance in India, a brief history of how the courts have dealt with cases involving ‘subsistence allowance’ and have they considered it to be part of a employee’s wage, the importance of the allowance towards the workman and lastly carry out a brief discussion on the question that if subsistence allowance is considered as a right under Article 21 of the Constitution why is it only available to a few class of workmen and employees working in the industry.

RGULATIONS FOR SUBSISTENCE ALLOWANCE IN INDIA

The provisions for subsistence allowance in India is under section 10 A of the Industrial Employment (Standing Orders) Act, 1946. The provisions of the act clearly state that if there are disciplinary proceedings carried out against a workman and he has been suspended from the industry then in such cases the workmen is entitled to an allowance of 50% of his wage preceding the date of suspension for a period of ninety days. Further, the workmen is entitled to get an allowance of 75% of the wage in case of further delay which is not caused due to the conduct of the workmen. A maximum of 180 days should be permitted to complete the disciplinary proceedings. In case of any dispute regarding the subsistence allowance between the employer and the workmen either of the parties can approach the Labour Court within the jurisdiction of the parties. Lastly, if there are any provisions given under the State Legislations that are more beneficial then such provisions should be followed. [4]

As the Central government has made an amendment to the Labour laws and passed 3 new codes, provision for subsistence allowance has been included under the Industrial Relations Code, 2020. Under Section 38 of the Code the provision has been included and is same as the previous provision under the Industrial Employment (Standing Orders) Act, 1946. The only addition that has been included under the code is that a time limit for completion of the disciplinary or investigations should be within a period of 90 days. [5]

The State governments also have provisions for subsistence allowance in their respective legislations and can be applied and availed as and when required.

IS SUBSISTENCE ALLOWANCE CONSIDERED AS A WAGE?

There has been a lot of controversy on the above stated question as different High Courts have different opinions and hence there has been a lot of debate on the question that is subsistence allowance considered as a wage. There are two schools of thoughts that have originated from different set of judgments of the High Court. One school of thought is of the opinion that subsistence allowance cannot be considered as a wage as the employee gets a wage when he in turns fulfills his obligations under the contract signed with the industry i.e. to carry out his set of duties/work and so if he is suspended and has not carried out his part of the contract he is not entitled to any wage. On the contrary another school of thought is of the opinion that even though the contract is not performed by the workmen, the contract has not been suspended and the workmen is still under employment of the Industry and so he is still a part of the industry and has not been terminated therefore he will be entitled to wage/pay as defined under the Payment of Wages Act, 1936. [6]

The set of judgments that do not consider Subsistence Allowance as a wage are as follows – Management of Kirloskar Systems Ltd. [7], the court in the case stated that the remuneration i.e. allowance that was paid to the employees could in no way be considered as a wage as the contract of employment was not fulfilled. Further the court was of the opinion that as the workmen have been suspended as a result of their own misconduct or acts and hence it would be totally wrong to consider subsistence allowance as a wage. In another case of Orissa Road Transport Company Ltd [8], the court looked into definition of wages under the Payment of Wages Act 1936. After analyzing the definition, the court held that subsistence allowance cannot be considered under the definition of wages. Lastly in the case of Karnataka Central Co-Op Bank Ltd. [9], the court reiterated the above opinion and further stated that the allowance that is given to the workmen is to survive during the proceedings and fulfill the bare minimum needs of his and his family. Hence, as no service or work is carried by the workman as given under his contract of employment subsistence allowance cannot be considered as a wage.

On the other hand, several high courts while adjudicating upon cases are of the opinion that subsistence allowance has to be considered as part of wage. One of the landmark judgments of Leaf Spring Manufacturing Co. (Pvt.) Ltd [10], laid down that subsistence allowance is part of the wages. The court analyzed the definition of wages under the Payment of Wages Act and was of the opinion that the definition of wages is comprehensive and includes allowances. Therefore, a harmonious reding of Section 10 A of the Industrial Standing orders read with the definition of wages under the Payment of Wages Act will include subsistence allowance within the ambit of its definition. Further, the court emphasized upon the fact that the workman still was a part of employment under the industry and his contract was temporarily suspended hence subsistence allowance should be considered as a part of the wage.

The Supreme Court adjudicated on an appeal which included the question of subsistence allowance to be considered or not be considered as a part of wage. The landmark case of Employee State Insurance Corporation of India v. M/s. Popular Automobiles [11], clarified on the above question. In this case the suspended employees and employer were made liable to remit contributions under the Employee State Insurance Act. The contributions had to be made were from the subsistence allowance that were paid during the time of domestic investigation was being carried out against the employees. The question that arose was whether subsistence allowance a part of the wage to determine the liability of the employee and employer with regards to Insurance Act. The Kerala and Karnataka High Court were of the view that the allowance does not constitute as a wage under section 2(22) of the Act. The Supreme Court overruled the rulings of the High Court and was of the opinion that subsistence allowance does form part of a wage and the employees and employer will be liable to make contributions under the act. A major part of the ruling of the Supreme Court revolves around the relationship of the employee and employer during the period the employee has been suspended. The Court states that even if there is trial going on against the employee and he is suspended from the industry that does not terminate the relationship of the employee and employer. It is only when the trial is concluded and the employee is terminated the contract between the employee and employer will cease to exists. Until then the employee will still be a part of the industry and the subsistence allowance that is paid to him will be considered as a part of his wage.

Hence, the landmark judgment of the Supreme Court lays down the law that subsistence allowance is considered as a part of the wage.

RELATIONSHIP BETWEEN ARTICLE 21 AND SUBSISTENCE ALLOWANCE

Article 21 of the Constitution is one of the most important fundamental right imbedded in the Constitution. Article 21 states that, “No person shall be deprived of his life or personal liberty except according to procedure established by law.”[12] Article 21 includes the ‘right to livelihood’ under ‘right to life’. This is because if a person is deprived of the means of basic livelihood like food, shelter and water he would not be able to survive and this would directly violate the fundamental right under Article 21 of the Constitution. Hence, in the case of Olga Tellis [13], the Supreme Court stated that ‘right to life’ includes the ‘right to live with dignity’. Further, Article 21 of the Constitution is not only available to all the citizens but is available to all “persons” in the country and hence that includes individuals who belong to another nationality and are residing in India. [14]

The question that arises here is that what can be the relationship between Subsistence Allowance and Article 21 of the Constitution. Referring to the Supreme Court’s landmark judgment in the case of O.P. Gupta [15], the Supreme Court defines the expression of ‘subsistence allowance’. It states that the expression of the word ‘Subsist’ is defined in the Oxford English Dictionary as “to remain alive as on food; to continue to exist”. “Subsistence” means-means of supporting life, especially a minimum livelihood.” Hence the provision of subsistence allowance is given to the employees of the company to survive and fulfill their basic necessities during the period they are suspended from working in the industry. It is also provided to the employees so that the proceeding against the employee can be conducted fairly, and they adequately represent themselves through an expert or attorney in the proceedings if required. Therefore, ‘Subsistence Allowance’ is very essential to the employee as it is a means of livelihood for them

The Supreme Court and the High Court in a set of case laws have stated the relationship between Article 21 of the Constitution and ‘Subsistence allowance’ [16]. In the case of A.K. Bindal [17], the court states that if an employee is suspended it would be impossible for an employee to survive and fulfill his basic needs. This would violate the right to life under Article 21 of the Constitution which includes a right to live with dignity under it. It further stated that, “Right to life enshrined in this Article means something more than survival or animal existence.”[18] Hence non-payment of subsistence allowance is a violation under Article 21 of the Constitution. Further, in the case of Shankarla [19], the Supreme Court reiterated the above stated phrase and further said that Subsistence allowance is not a bounty and is a right under the constitution. Recently, in the case of M. Elango [20], the Madras High Court was dealing with the issue of non -payment of subsistence allowance to government employees during the period of suspension. The court in the case held that a denial to pay subsistence allowance is an violation of Article 21 of the Constitution.

Hence, we can clearly observe that the right to subsistence allowance is a fundamental right of an employee and covered under Article 21 of the Constitution.

IS SUBSISTENCE ALLOWANCE AVAIALABE TO ALL THE EMPLOYEES IN THE INDUSTRY?

The provision of Subsistence allowance is defined under Section 10 A of the Industrial Employment (Standing Orders) Act, 1946. Under the said section it is clearly stated that ‘workman’ employed in an industry are entitled to the right of subsistence allowance as per the percentage fixed in the legislation. Closing analyzing the definition of ‘workman’ given under Section 2 (s) of the Industrial Disputes Act, 1947, it seems that only a set of employees in an industry are entitled to the provision of subsistence allowance. The definition of ‘workman’ has been interpreted by the Supreme Court in a set of judgments [21] which state that some of the main factors to consider if an employee is covered under the definition of workman are – i. Existence of a master-servant relationship, ii. Nature and the kind of functions performed, iii. The kind of work is either manual, skilled, unskilled, technical operational, clerical or supervisory in nature iv. Mode of recruitment, source of employment, designation, contract, terms of employment, amount of wage are some of the other factors that need to be considered. Further, the court in these cases laid down that persons that are carrying out purely managerial and supervisory work are not covered under the definition of ‘workman’ [22]. The reason being that the persons working as mangers or supervisors have implied powers of hiring and firing, granting of leaves and participation in the business policies. Therefore, as per the definition under Section 10 A of the Industrial Employment (Standing Orders) Act, 1946 only a specific set of people who come within the definition of ‘workman’ under the Act are entitled to the provision of subsistence allowance. But as stated above in a series of case laws that subsistence allowance is considered as a right under Article 21 of the Constitution. Hence, will it be fair to draw a distinction between employees of a factory who will be entitle to the provision of subsistence allowance.

Article 21 of the Constitution is a basic right that is available to all persons in India and if the Supreme Court of India has mandated the ‘right to live with dignity’ as a right to life all the employees of a industry should be entitled to get the provision of subsistence allowance. But there is no legislation as such that mandates the right of subsistence allowance to all the employees of the industry/factory. The only reason that the Supreme Court has emphasized on subsistence allowance being a right under Article 21 is to ensure that an employee could survive and meet basic expenses for livelihood. Hence, if the allowance is not granted to employees working in a managerial position or supervisory position it would be difficult for them to survive as well because even, they rely on their salaries and that is the only source of income for them to meet their basic and necessary expenses. If during the period they are suspended and are not paid any allowance their right to live with dignity would be affected. This also leads to discrimination among the employees of the industry. It would be a violation of Article 14 of the constitution which deal with equality. Even though under certain circumstance based on intelligible differentia there can be differential treatment given under certain circumstance, [23] the act of not providing subsistence allowance to a set of employees will not qualify under the exception. As there is no reasonable nexus between the discrimination and it is not based on intelligible differentia because the right to live with dignity is a right available to every person and any violation based on it would be against the principles of the Constitution.

But the recent case law of M. Elango [24], by the Madras High Court has laid the foundation to prohibit any such violation under the Constitution. In this case as the secretary of a Cooperative Society was suspended for several irregularities. During the period he was suspended he was not paid any allowance because he was working in a managerial and administrative capacity and hence did not qualify as a ‘workman’ under the definition of the act to avail the right of subsistence allowance. Hence, filed an appeal in the High Court. The court was of the opinion that every person working under an industry has to fulfil his basic needs and if during suspension of his employment he is not paid any allowance he will not be able to sustain himself therefore every employee is entitled to such allowance through which he can sustain himself and fulfill his basic needs.

Therefore, there is strong need for the Supreme Court of India to take a suo-moto action to clarify the discrepancy in the labour legislation and recommend the Parliament to make certain amendments to the provisions to mandate a certain percentage or sum to every employee as subsistence allowance during the period he is suspended from his employment.

CONCLUSION

Subsistence Allowance is a basic necessity that every employee of an industry needs to survive on and carry out his means of livelihood.  That is the reason the Supreme Court has considered the right of subsistence allowance under Article 21 of the Constitution. Hence, it will be unfair and against principles of the Constitution if only a particular set of employees get the provision of subsistence allowance as wage/pay or salary is an integral and important part of an employee’s survival and if they are not given the same their right to live with dignity will be violated. Further, under the amendment of labour laws, the provision of subsistence allowance is no covered under Section 38 of the Industrial Relations Code 2020. Under the provision the right to subsistence allowance is provided to all workers in the industry. Section 2 (zr) of the Code defines the term ‘workers’ and the Parliament has made an effort to make the section extensive and include a large category of people. However, the code does not specify whether the employees carrying out managerial/administrative/supervisory work are entitled to subsistence allowance or not. Hence, it is very important that the Parliament takes note of the discrepancies with the provisions of subsistence allowance and make an amendment to the Section and add a proviso to the same including all employees of a factory to be entitled to the provision of subsistence allowance in case of suspension or issue guidelines with respect to the provision of subsistence allowance to be made available to employees of industry.

REFERENCES

1. “India’s Population ”(Worldometer) <https://www.worldometers.info/world-population/india-population/>
2. Sinha S, “An Overview of Labour Laws in India” (IPleaders, October 2018)<https://blog.ipleaders.in/labour-laws-in-india/
3. Haq Z, “Understanding the New Labour Codes” (Hindustan Times, 24 September 2020 <https://www.hindustantimes.com/indianews/understanding-the-new labour-codes/storyllI015EZK8EYtDHmP9SXVP.html>
4. Industrial Employment (Standing Orders) Act, 1946, Section 10 A
5. Industrial Relations Code, 2020, Section 38
6. Dutta S, “Is Subsistence Allowance a Wage?” (1999) 35 Indian Journal of Industrial Relations98<https://www.jstor.org/stable/pdf/27767637.pdf?refreqid=excelsior%3A766dc22bacdbef72ba611795a2ca5765>
7. ESIC Vs. Management of Kirloskar Systems Ltd., (1985 I LLJ 173)
8. Orissa Road Transport Company Ltd. Vs. Narayan Parida & Anr., (1986 I LLJ 270)
9. Karnataka Central Co-operative Bank Ltd. Vs. Karpi, (1987 I LLJ 197)
10. Indian Leaf Spring Manufacturing Co. (Pvt.) Ltd. Vs. Appellate Authority under Payment of Wages Act, (1993 I LLN 833)
11. Employees State Insurance Corporation Vs. M/s. Popular Automobiles etc., (1997 II CLR 1003)
12. Constitution of India, Article 21
13. Olga Tellis & Ors Vs. Bombay Municipal Council, 1986 AIR 180
14. Jain R, “Article 21 of the Constitution of India – Right to Life and Personal Liberty” (Academike, 13 November 2015) &lt;https://www.lawctopus.com/academike/article-21-of-the-constitution-of-india-right-to-life-and-personal-liberty/&gt;
15. O.P. Gupta Vs. Union of India and Ors., (1988) I LLJ 453 SC
16. Fakirbhai Fulabhai Solanki Vs. Presiding Officer and Anr., (1986) II LLJ 124 SC, Ram Lakhan and Ors. Vs. Presiding Officer and Ors., (2000) 10 SCC 201, State of Maharashtra Vs. Chanderbhan Tale, (1983) II LLJ 256 SC.
17. A.K. Bindal & Anr. Vs. Union Of India & Ors., (2003) 5 SCC 163
18. A.K. Bindal & Anr. Vs. Union Of India & Ors., (2003) 5 SCC 163 [18]
19. State Government Of M.P. & Ors Vs. Shankarlal, [2007] Insc 72
20. Registrar the Co-operative Society N.V. Natarajan & Ors. Vs. M. Elango, 2020 SCC OnLine Mad 384
21. Chintaman Rao Vs. State of Madhya Pradesh AIR (1958) SC 358, John Joseph Khokar Vs. Bhadange B. S. & Ors 1998 (1) LLJ 447 (Bom), Kirloskar Brothers Ltd. Vs. Respondent: The Presiding Officer, Labour Court, Delhi and Anr., [1977(34)FLR206], Devinder Singh Vs. Municipal Council, (2011) 6 SCC 584, Delta Jute & Industries Ltd. Staff Association and Ors. Vs. State of West Bengal and Ors, 2015 (145) FLR 105, Burmah Shell Oil Storage and Distributing Company of India Ltd. and Anr. Vs. Burmah Shell Management Staff Association and Ors., A.I.R. 1971 S.C. 922.
22. Delta Jute & Industries Ltd. Staff Association and Ors. Vs. State of West Bengal and Ors., 2015 (145) FLR 105
23. Dr. Saurabh Choudhary & Ors. Vs. Union Of India & Ors., AIR 2004 SC 2212
24. Registrar the Co-operative Society N.V. Natarajan & Ors. Vs. M. Elango, 2020 SCC OnLine Mad 384

Introduction

The practice of betting for amusement and an explicit desire to make effortless money is present in the annals of Indian history. The ancient scriptures [1] of the land validate this fact where it has been commanded from divine sources to abstain [2] from indulging in games like these for reasons of immorality and sin. The mode adopted for playing has however transformed over time due to external influences like digitization and the spread of the internet. Online betting is now perhaps the most prevalent form of gambling. The extent of the growth of its online presence could be analyzed by trends of betting in the gaming community [3]. A study done in the year 2017 [4] suggested that by 2021 growth of the online gaming industry in India (such as online poker, online rummy, and fantasy sports) will amount to One Billion Dollars. 

But what could be the possible ramifications on the economy and socio-political structure of the country when an activity of that scale goes unregulated by the law? To explore this, we must have a fair understanding of the existing legal and regulatory framework in place that governs online betting in India.

Legal Framework of online betting games            

At present, gambling in India is regulated amongst others, by the Public Gambling Act in the year 1867 [5]  formulated by British Indians who were wary of the gambling culture among Indians. Gambling in common parlance refers to winning or losing (usually) an extravagant amount of money based on some fortuitous event [6]. Online gambling (or online betting as it is called) on the other hand has the same elements unless it gets incorporated with a new dimension of ‘gaming’. There is a blurred line between the definitions of online betting and conventional gambling and this confusion also translates itself into the legal sphere.

In addition to this, the state legislators are, by the Seventh Schedule (Entry 34, List II) of the Constitution of India, given exclusive powers to make laws for betting and gambling. When a specific amendment by the state is promulgated in this regard, the parent act can be repealed for that particular state. 

Legal discussions around online betting usually revolve around two terms associated with it. One is ‘games of skill’ and the other is ‘games of chance’.

Definition of games of skill, according to the courts in various judgements ,involves certain parameters being a developed strategy, physical coordination, technical expertise and knowledge. It is an exercise upon known rules and fixed probabilities.[7].

Now the second ingredient which is physical co-ordination is the thing that separates sports gambling from online betting in games such as Rummy, Poker, and Fantasy sports games. This is also the area of legal jurisprudence whereupon courts have not commented with clarity. Thus online betting and online gaming are not well defined till this time. The courts don’t seek to give a practical explanation to the difference underlying between the two categories of games and have instead propounded a very basic principle which is- games where chance dominates over skill are prohibited while games where skill dominates over chance are permitted [8].

So even when gambling has been prohibited by most states, we see that online games somehow accommodate betting under the pretext of ‘games of skill’ making them legal. It must be noted that these games of skills have a huge element of chance that is overlooked. The thin line between these two implies that as long as online games have some element of skill involved, it cannot be regulated under the gambling act. What this clearly indicates is that our judicial machinery must help interpret and provide a reliable definition of gambling in the digital world.

Landmark judgements that interpret Online Betting

In State of Andhra Pradesh v. K. Satyanarayana & Ors [9], the same court while holding that the card game – “Rummy” is not a gambling activity. It stated that the game of Rummy had in itself an ingredient of skill and this can be understood if one studies the way the game is played. Anyone well versed with the functioning of the game will know that success in the game is dependent on good memorizing skills. In Rummy the player, in order to gain victory, should be acquainted with the correct sequence of holding and then discarding the cards. Keeping this in mind the court held that it is mainly a game of skill.

In  State of Bombay v. R. M. D. Chamarbaugwalal [10], the Apex Court held that gambling convers those games defined under the central act and state acts respectively. But when a significant degree of skill is involved in that game, it cannot fall under the purview of gambling even if there is element of chance. Again the aspect of preponderance comes in to picture and it is said that as long skill is the dominant factor, it cannot be categorized as game of chance.

In M.J. Sivani & Ors. v. State of Karnataka [11], the Apex Court observed that a player who is skilled might be either lucky or unlucky. The emphasis here was about preponderance of chance over skill. If the element of chance supersedes that of skill, it cannot be a game of skill. The court then said that it would be impracticable to decide whether a game is game of skill or of chance. It is a subjective case and depends solely on the facts of that instant case.

The Apex Court once again explored the meaning of ‘games of skill’ in Dr. K.R. Lakshmanan v. State of Tamil Nadu, where it stated games could either be of chance, of skill or of skill and chance both combined. The reasoning of these courts runs such that there only few games which consist purely chance or skill. They mean that the majority of games consist both elements and the test lies in determining which dominates the other. It is the element that holds more weight that finally decides the nature of that game.

Regarding the game of Poker, the Bangalore High Court held that the license is not contemplated if played as a game of skill in Indian Poker Association v. the State of Karnataka [12].

Government Bodies and Online Betting

Regulatory bodies are fundamental to any sphere of activity that impacts a large number of people. Unfortunately, there is no neutral body to regulate these online gaming companies. The individual industrial bodies are given a lot of autonomy as a result of which they are not accountable to any supervisory head. This gives them the power to function at their own whim and fancies. Such a situation proves to be most problematic when the public has to suffer after getting lured by false and misleading advertisements.

Certain bodies like the AIGF have already expressed their concerns and also requested the Prime Minister to direct the Enforcement Directorate to investigate and take action against offshore betting websites. These sites are responsible for illegally offering Indian citizens and accepting bets from India. This is in contravention of the Information Technology Act and Foreign Exchange Management Act.

Further, a rough analysis of law commission reports on gaming laws reveals that even though a lot of debates and deliberations have taken place around the concept of online gaming, it is still insufficiently clear to meet the needs of gaming investors who want to ensure compliance with laws of the land.

The Sports (Online Gaming and Prevention of Fraud) Bill, 2018[13] is a classic example to show how the mindset of Indian legislators have started to incline towards stricter regulation of online games. States like Andhra Pradesh have already begun considering the option of including online games in the state Gaming Act.

On the other end of the spectrum, it is said that talks between the Ministry of Youth Affairs and the Government of India to completely legalize online games are on the way[14]. Also, the NITI Aayog’s guiding principles reveal the good intent from the government and give hope that this will pave way for some real legislative work in the field of online gaming.

Way Forward

An Amendment to the existing act is the easiest way to remove the anomalies and create clarity in the interpretation of online gaming vis-à-vis betting. Accordingly, a commission should be constituted to move things in the right direction.

Like every other huge policy change, the country must be ready to withstand the requirements that come along. India needs to create a comprehensive plan for implementation and regulation of the whole system of online gaming before legalization. The outcome of an otherwise scenario would be disastrous for both- the government and the public at large. 

 

 

References:

[1] Mukhia, H. Medieval Indian history, and the communal approach. In Thapar, R, Mukhia, H, Chandra, B, eds. Communalism and the writing of Indian history. New Delhi: Penguin Books, 1969.

[2] Singh, NS. HH Wilson’s Translation of the Rig Veda Samhita 2nd ed. Delhi: Nag Publishers, 1990.

[3] Should Gambling Be Legalized in India?

Sanju George, Richard Velleman, Benedict Weobong

https://journals.sagepub.com/doi/full/10.1177/0253717620928761 

[4] KPMG Google. Online Gaming in India: Reaching a new pinnacle. https://assets.kpmg.com/content/dam/kpmg/in/pdf/2017/05/online-gaming.pdf

[5] Public Gambling Act, 1867

 https://www.indiacode.nic.in/bitstream/123456789/2269/1/AAA1867____03.pdf 

[6] OXFORD DICTIONARIES, OXFORD ENGLISH DICTIONARY (7th ed. 2012).

[7] India: Online Gaming And Gambling Laws In India by Vinay Vaish 

https://www.mondaq.com/india/gaming/350824/online-gaming-and-gambling-laws-in-india 

[8]Online Gaming In India: A Legal Puzzle by Akshay Sachthey  

https://www.livelaw.in/law-firms/articles/online-gaming-in-india-167719#_ftn2  

[9] AIR 1968 SC 825

[10] AIR 1957 SC 699

[11] AIR 1995 SCC 289

[12] WRIT PETITION NOS.39167 TO 39169 OF 2013

http://judgmenthck.kar.nic.in/judgments/bitstream/123456789/704683/1/WP23106-12-10-07-2012.pdf 

[13] http://164.100.47.4/billstexts/lsbilltexts/asintroduced/2415as.pdf 

[14]  Amitav Ranjan & Mihir Vasavda, Sports Ministry lays ground for making onling betting legal, THE INDIAN EXPRESS, (July 16, 2017),

http://indianexpress.com/article/sports/sports-ministrylays-ground-for-making-online-betting-legal-4752604/

• Introduction

Domestic Violence cases in India is no new story. It has been so long since we are experiencing Domestic Violence cases and its surge. Domestic violence in India represents an intriguing mystery: notwithstanding being the most omnipresent of fundamental basic freedoms infringement, it is likewise the most un-detailed and talked about issue. The firmly man centric standards and structure of conventional Indian culture, and the sharp differentiation among public and private life, have made the subject of domestic violence a complex and nuanced one, bringing about a long and enthusiastic battle for equity against the shocking practice. Theoretical reexamining and change encompassing the lawful arrangements against domestic violence has been the commitment of the continued campaign against the training by the Indian women development. The meaning of violence has advanced throughout the years to a degree it incorporates actual types of violence as well as passionate, mental, monetary, and different types of cold-bloodedness. Consequently, the term domestic violence incorporates acts which damage or imperils the wellbeing, security, life, appendage, or prosperity (mental or physical) of the person in question, or will in general do as such, and incorporates causing actual maltreatment, sexual maltreatment, boisterous attack, psychological mistreatment, and financial maltreatment, executed by any individual who is or was in a domestic relationship with the person in question.

• History of Domestic Violence

The women development in India is followed from the beginning of the 1970s, when the issue of sexual orientation started to pick up footing and perceivability as an issue separate from different concerns, deserving of being handled itself. In any case, the women’ development in India is really a far more established marvel, having its underlying foundations in the Indian patriot development, going back to the mid-1920s. The Indian women’s movement, from the 1920s until the 1970s, was intensely impacted and coordinated by the outer financial and political powers of the country, such that women’s issues were viably sidelined, failing to occupy focal worry in the psyches of individuals. The time frame from the 1920s until Independence saw the imbuement of the women’s development with patriot legislative issues, its forms molded by the on-going battle for independence from British government. This period, from the 1920s to the 1970s, was described by the commencement of different neighborhood women’s affiliations, for example, the Bharat Stree Mahamandal and the Arya Mahila Samaj. These affiliations were barely of political nature; rather than addressing sexual orientation jobs, they coached women in child-care, behavior, sewing, serving tea and so forth at the public level, women’s affiliations, for example, the National Council for Indian Women and the All-India Women’s Conference were more impending concerning policy driven issues, their exercises running across noble cause, requesting of fore casting a ballot rights and child marriage change. These were, in any case, basically city-based and tip top in piece, with scarcely any premise in mass enrollment.

• Legal Aspects

The push of the women’s development during the 1980s was on administrative change. Instances of assault, viciousness, and settlement related wrongdoings, notwithstanding debates over the Shah Bano case and the Uniform Civil Code, featured the requirement for laws that uniquely tended to women’s issues.1 Though the term ‘aggressive behavior at home’ did not exist in legitimate speech till 2005, a stage toward its was made in 1983 with the selection of sections “498A”[1] and “304B”[2] of the Indian Penal Code. The enactment of 498A made savagery towards spouses a non-bailable criminal offense culpable with as long as five years in jail. 304B made settlement passing an offense with at least seven years extendable to life detainment if the culprit was seen as liable. Indira Jaising depicts Section 498A as ‘strong’ (Jaising, 2014). For one, it presented criminal offenses in personal connections, which hitherto were considered past the span of the law, and two, since savagery was not restricted to the interest for settlement alone nor kept to actual mutilation or injury however stretched out additionally to mental brutality. (Jaising, 2014) Additionally, the offense was made cognizable, which implied that a capture could be made without a warrant from a justice. Four sorts of ‘pitilessness’ were perceived by the article: lead that is probably going to drive a lady to self-destruction; direct which is probably going to make grave injury the life, appendage or soundness of the lady; provocation to compel the lady or her family members to give some property; badgering in light of the fact that the lady or her family members can’t respect requests for more cash or doesn’t give some property. Section 498A, however a milestone in the women’s development, confronted analysis on various records concerning the degree it checked the issue of savagery against women. The term ‘savagery’ was felt to be prohibitive, avoiding with regard to its ambit monetary and sexual brutality. The law likewise left out instances of brutality happening inside the natal home of a lady. Also, the Family Courts Act of 1984 moved ‘savagery’ cases from the ward of officer courts to under that of family courts with the end goal that women could settle separation and upkeep continuing under one roof. The dominating idea overseeing family courts was the ‘insurance of the family structure’ and not discipline. Henceforth, a specific level of savagery was approved in such cases to shield the family from self-destructing. The significant deficiency of 498A was anyway the suitability of its execution. The designers limited the trouble women looked in moving toward the police for recording the principal data report (FIR), as the specialists were hesitant to do so given their own ethical biases and confidence in the regularity of abusive behavior at home. Despite the fact that the quantity of revealed cases under these punitive arrangements expanded with each progressive year, the equivalent didn’t have any significant bearing for the pace of feelings. An investigation led by the Center for Social Research, Delhi (CSR 2005), uncovered rather upsetting discoveries. Out of 100 cases which were requested for examination under Section 498A, just in two cases did the charged get indicted. The lone cases which finished in conviction were those where the lady had kicked the bucket and the case under Section 498A was enlisted alongside Section “304B”[3] (share passing) or “Section 302”[4] (murder). There were no feelings in any of the cases enlisted under Section 498A alone. Without substantial advantages following out of the enactment, it was difficult to have confidence in its viability.

• Domestic Violence Act of 2005

For the protection of women from Domestic Violence, the “Protection of Women from Domestic Violence Act of 2005”[5] was enacted. Prior to the enactment of the Protection of Women from Domestic Violence Act, 2005 (“DV Act”), the casualty could move toward the court under Section 498-An of the Penal Code, 1860 which accommodates ‘spouse or relative of husband of a lady exposing her to cold-bloodedness’ wherein just a specific arrangement of offense managing remorselessness to wedded women was the lone plan of action. Any remaining cases of domestic violence inside the family unit must be managed under the offenses that the particular acts of violence established under the IPC with no respect to the sex of the person in question.

To limit the cumbersome position of law, be it procedural or substantive, the Protection of Women from Domestic Violence Act, 2005 was enacted to shield the women from acts of domestic violence. The legislative expectation was additionally stressed by the Supreme Court of India on account of “Indra Sarma v. V.K.V Sarma,”[6] wherein it was expressed that the DV Act is enacted to provide a cure in civil law for the protection of women, from being victims of such relationship, and to prevent the event of domestic violence in the general public. Different enactments like Cr.P.C, IPC, and so on, where reliefs have been provided to women who are put in vulnerable circumstances were additionally talked about. The objective of the Act sets out “An Act to provide for more effective protection of the privileges of women ensured under the Constitution who are victims of violence of any kind happening inside the family and for issues associated therewith or coincidental thereto.”[7] The Madras High Court in “Vandhana v. T. Srikanth,”[8] out of one of the early cases since the enactment of the DV Act, observed that the Act was detailed to execute Recommendation No. 12 of United Nations Committee on “CEDAW, 1989”[9] and which was endorsed by India in June, 1993. Understanding of the DV Act ought to adjust to global conventions and worldwide instruments and standards. The Bombay High Court on account of “Mr. X vs Mrs. Y (name removed as per the request of the party) 2011 SCC Online Bom 412[10]” repeated that the object of the DV Act is to concede legal protection to victims of violence in the domestic area who had no exclusive rights. The Act provides for security and protection of a spouse irrespective of her restrictive rights in her home. It targets ensuring the spouse against violence and at the protection of repeat of acts of violence. As indicated by the provisions of this Act, any aggrieved lady who is in a domestic relationship with the respondent and who claims to have been exposed to the act of domestic violence by the respondent can seek help. A lady can document a grumbling against any grown-up male culprit who submits an act of violence. She can likewise document a grumbling against any male or female relatives of the spouse/male accomplice (for instance in a live-in relationship) who has executed violence. The Supreme Court in “Hiral P. Harsora v. Kusum Narottamdas Harsora,”[11] struck down grown-up male from the meaning of “respondent” expressing that it did not depend on any understandable differentia having sound nexus with object tried to be achieved. The Supreme Court likewise clarified in the said case that the classifications of people against whom cures under the DV Act are available incorporate women and non-grown-ups. Articulation “respondent” in “Section 2(q)”[12] or people who can be treated as culprits of violence against women/against whom cures under the DV Act are actionable can’t be confined to articulation “grown-up male individual” in Section 2(q). Consequently, cures under the DV Act are available even against a female part and furthermore against non-grown-ups.

• Domestic Violence cases during lockdown

With a quick expansion in the quantity of COVID-19 cases across the world in the previous few months, several worldwide associations took cognizance of a worldwide ascent in Domestic Violence (DV) cases because of physical removing guidelines and its resulting lockdowns. Numerous nations revealed a 15-30% hike in the quantity of misery calls received from women who were limited in shut spaces with abusive accomplices. Studies, over the years, have demonstrated an immediate link between seasons of emergency like these and relational violence. Pandemics provide for an empowering environment of dread and vulnerability that may fuel diverse types of violence against women. Moreover, monetary uncertainty, monetary shakiness, and confinement are additionally a portion of the factors that add to making domestic violence even more prevalent. Sadly, domestic violence cases are underreported across the world, particularly in the midst of worldwide crises like COVID-19. Women overall think about casual channels as their first purpose of-revealing on account of domestic violence. Because of lockdown limitations, the pressure of being bound with one’s victimizer and monetary requirements, it has gotten progressively hard for women to get to help against domestic violence. Various social workers and legal counselors have featured the confined admittance to protection officers as a reason for concern, and have proposed that the work of protection officers, advising and emergency focuses should be proclaimed as basic services. “The principal respondent is often the family and the police the last. In India, the National Family Health Survey-4, directed in 2015-16, revealed that 33% of wedded women in the age gathering of 15-49 experienced physical, sexual, or passionate spousal violence. Of these women, just 14% looked for help and 77% never spoke about it. Among the individuals who looked for help, 65% answered to the natal family and simply 3% answered to the police.”[13] The arrangement of COVID-19 lockdowns in India decreased the chances of detailing of domestic violence cases. Here’s the reason:

1. Confined movement: The lockdown crippled women by preventing them from moving to more secure spots in instances of violence and misuse. With people living together for longer periods, the privacy of women plunged, and occurrences of violence rose.
2. Impaired vehicles of correspondence: The WhatsApp number dispatched by the NCW had a restricted reach as just 38% of women in India own telephones and less have a web association, making this stage unavailable to lion’s share of women in the nation.
3. Diminished contact with the natal family: Natal family is typically the principal purpose of contact for the victim. They are not just fundamental in supporting the victim in recording a protest yet additionally encourage documenting of grumblings to the police. The steady presence of the culprit made it hard for the victims to contact their first respondent which at last discouraged them from answering to organized channels.
4. Unavailability of the proper emotionally supportive network: The apparatus under the Protection of Women from Domestic Violence Act had not been distinguished as a fundamental service during the lockdown. Henceforth, the protection officers couldn’t visit family units of victims, NGOs couldn’t have actual interactions with them and the cops being at the cutting edge in our work to tackle COVID-19 were overstretched to help victims effectively.

While the cross-country limitations have been loose, various state and local level lockdowns are invoked every from time to time, permitting the pandemic of domestic violence to grow close by. We should not count violence as a detriment to women as an inevitable result of an emergency yet improve the generally postponed strategy suggestions to address the circumstance.

• Conclusion

In spite of the fact that the significant objective of this law, being to ensure the women against domestic violence has been made sure about, specific parts of the law actually stays to be developed. This law provides civil solutions for the victims of domestic violence. Under the steady gaze of enactment of this law, to seek any civil cures, for example, divorce, care of youngsters, orders in any structure or support, a lady just had the choice of taking response to the civil courts. Thus, the DV Act has surely achieved the required and fundamental change in the framework. In spite of the fact that the Act provides exhaustive solutions for counter the issue of domestic violence certain terms and its understanding requirements to develop. The Act misses the mark in providing any help to the male individuals in the network who are exposed to domestic violence, being one of the zones where the law misses the mark. However, it likewise should be viewed as that no wrongdoing can be canceled from the general public totally, it is just with rigid changes and system that it very well may be checked.

References

1. Indian Penal Code 1860, Section 498A.
2. Indian Penal Code 1860, Section 304B.
3. Ibid.
4. Indian Penal Code 1860, Section 302.
5. Protection of Women from Domestic Violence Act, 2005.
6. Indra Sarma v. V.K.V Sarma, (2013) 15 SCC 755.
7. Supra Note 3.
8. Vandhana v. T. Srikanth, 2007 SCC Online Mad 553.
9. Convention on Elimination of All Forms of Discrimination Against Women, 1989.
10. 2011 SCC Online Bom 412.
11. Hiral P. Harsora v. Kusum Narottamdas Harsora, (2016) 10 SCC 165.
12. Protection of Women from Domestic Violence Act 2005, Section 2(q).
13. National Family Health Survey (NFHS – 4), 2015-2016: India, INTERNATIONAL INSTITUTE OF POPULATION SCIENCES (IIPS) and ICF 2017.

ABSTRACT

The present article tries to draw a real picture of India’s dream of becoming a superpower, India’s emerging position as a world leader in the UN, and how this emerging superpower was affected by the Covid-19 pandemic. The author here wants to gain the attention of its readers on the recent happenings which worked in favor of India (especially in the Indo-Pacific region). These recent events include; defense agreements, treaties, diplomatic achievements, important international dialogues &, etc.

INTRODUCTION

India is an ancient land where endless human advancements flourished. It is a nation which, has withstood the assaults of time and maintained its way of life as a free, independent country. India is a place that is known for variety, monotony wears on the soul.

A nation that is the house of more than one-sixth of the worldwide populace, it is a country that is lively with the fantasy of its kin. India of the 21st century isn’t only a country, yet a fantasy a dream of incalculable spirits trying to have a place with a solid, confident, ground-breaking and self-reliant country.

In the start of 1990-91 the then Prime Minister P.V. Narasimha Rao was forced to proclaim that “our coffers are unfilled” and India had to vow its gold to get the scant forex. Yet, in 2004 Prime Minister Dr. Man Mohan Singh in his Independence Day discourse stated that, “From being a borrower, India today loans cash to the less fortunate and poorer countries”.

Prior to this pandemic India became the 5th largest economy in the word, and the GPD growth of India’s economy seemed to be rising at a very promising rate, but due to the pandemic this economic growth was hugely affected, making the GDP growth of India fall to its record low of negative 23.9%. It was a huge blow to India, which made us question our dreams of becoming the global superpower. [1] But fortunately in the 3rd economic quarter of this fiscal year, we are observing, the restoration of steadiness and hope in our economy, with rapid growth from a negative 23.9% to a positive 0.1%.[2]

This present paper tries to discuss in details about how the changes brought to the world along with the pandemic is working in favor of India and how India is using it for its advantage and emerging as a world superpower. This paper not only focuses on the economic aspect but also the military, political & diplomatic aspect, more of which is discussed in the later part of this article.

INDIA’S EVOLVING POSITION IN UN

United Nation should undoubtedly, the most significant position in establishing today’s world order, the foundation of which was laid in the year 1945. Presently there are 193 countries which are registered as “members State” in UN. The founding charter of UN forwarded the purpose for which this organization was established and it has further records many-a-few guiding principles which regulates all the current missions and works of UN. There are 6 main organs of UN that includes UNSC, UNGA and ICJ.

• India getting a non-permanent seat in UNSC

United Nations Security Council (UNSC) is unarguably one of the most important organs of the UN. The membership into this organ holds the most controversial and discriminatory aspect of UN. The membership into UNSC is regulated as per the UN Charter which states that, “The security council shall consist of 15 members of the United Nations”.[3] Of these 15 members, 5 will be the permanent members[4] and others non-permanent. Now the election for the non-permanent members happens every year, where 5 countries are elected for the term of 2 years. The election of the non-permanent members has to follow the rules of UN charter which also provides the fixed quotas for different regions; this ensures uniform representation of countries of different region to the UNSC. Currently 2/10 seats are fixed for the countries belonging to the Asia pacific. Indonesia and Vietnam were elected as non-permanent members from Asia-pacific region, of which Indonesia is to retire, giving its position to India in January of 2021.This is 8^th time that, India has won the non-permanent seat of UNSC.

India’s candidature to this year’s UNSC’s election was unanimously endorsed by 55 countries of Asia pacific region including China & Pakistan who presently are, having direct military and diplomatic confrontation with India. This unopposed endorsement of Indian candidature to UNSC’s membership shows the success of Indian diplomacy, in the indo-pacific region which was able to mold the decision of countries such as Pakistan, which is considered to be the sole nemesis of India along with china, who consider India as their biggest hurdle. The biggest highlight of this election is the voluntary suspension of Afghanistan’s candidature from UNSC election for India.[5]

• India’s approach to reform UNSC

What makes this position in UNSC so important to India? Post the covet-19 it’s being assumed by many diplomats and political-analysts that, the year 2021 & 2022 are going to be very crucial for India, who has always supported the idea of reformation in UNSC, along with its demand of a permanent seat in the Security Council. Moreover, it’s important to note the rapid increase in the number of countries, supporting and advocating India’s demand for reformation in current UNSC which doesn’t “represent the geo-political realities of the 21^st century”.[6]

According to “The Print” article, India’s External Affairs Minister, S. Jaishankar releases an statement stating that, “India’s win in the UNSC election will bring ‘Five S’ approach to the world.” The 5 ‘S’ approach here includes; Samman, Samvas, Sahayog, Shanty & Samriddhi of all. The External Affairs Minister further supplements that it’s through using this approach that India will move near the direction of a novel orientation for the “reformed multilateral systems also known as norms.”[7]

• India’s leadership role in WHO

The international courts may not be effective in delivering justice, by punishing those who are responsible for spread for this pandemic but the world can’t look the other way as China and its accomplice break the rules; the accomplices like the China and the World health Organization; an institution which has been parroting China’s statements since the very beginning.

The WHO is made up of the UN member states (194 members), the challenges that it faces are institutional. The WHO is as effective as the nations which make up its body, so cutting funds and issuing threats to WHO by some members like US, will not really work in the long term, there has to be a leader, someone will have to get their hands dirty and fix the flaws in the system, can that someone be India? There’s a probability for that to be a reality. Starting from the 22^nd May 2020, India was given the leadership role of WHO. India’s nominee is appointed as the WHO’S executive board chairperson. India’s nomination was unanimously upheld by the south-east Asia group last year. India thereby took-over this leadership role in WHO replacing Japan and is expected to hold this post for a minimum of 3 year.

The author here forwards some recommendations which the government of India can and must do to fix the broken system of this body, which are as read;

1. Push the WHO leadership for accountability -A good place to begin is by asking questions; questions like, why did it buy china’s word on human transmission? Did it downplay or bluntly lied about how lethal this virus was? Why did it declare a pandemic only after the virus has reached 85 odd countries? India must begin by asking these questions without hesitation.
2. Demand transparency from member countries – starting from the one who gave the world the virus; china.
3. India must insist on financial independence of WHO – by doing this India can limit the influence of other nation in the decision making process of WHO.

Changing nexus between Indo-ASEAN countries post covet

The new phase to Indo-ASEAN relationship began with the change in India’s views towards the south-east Asian countries, this view of India is reflected in its 1991 foreign policy of “Look East”, which in 2018 was renewed to “Act East Policy”.[8][9] Now the question was, Should India forgo its policy of “Act East” and concentrate more in other organization like the Quad-Groups, SAARC nations & etc, which satisfies more of India’s security interest?

Considering all the challenges before ASEAN that affected it’s relevancy to India (such as, its failure of ASEAN to gather uniform consensus, ASEAN’s bent towards China in major trade agreements like RCEP and OBOR, Reluctance of few ASEAN countries to go against China and etc[10]) author’s view to the above question would have been in positive, but after observing all the changes within this ongoing pandemic, the author believes that, India’s “Act East” policy which centrally focuses on the ASEAN countries is still very much significant to India, to ensure India’s strategy to counter china’s “String Of Pearls”.[11] Some of the major developments which change the author views on ASEAN’s relevancy to India are as discussed hereunder[12]:

• Changing views and interest of the ASEAN countries­

The increasing aggression of china, towards its neighbors’, be it India in the Himalayas or the ASEAN countries in the south china sea, is now forcing these countries to change it strategy towards china from passive resistance to now active aggression. For example, the repeated intrusion of the Chinese into the Vietnamese Exclusive Economic Zone, which lead to the death of few Vietnamese sailors in the past few months have aggravated the whole situation to a next level and the accusation on Chinese to have intentionally started this pandemic, doesn’t make things any better for the ASEAN-china relation but on contrary to this, it has brought India and ASEAN a lot closer, due to the mutual threat for both which is china. These recent incidents have created a drastic change in the views and interest of the ASEAN countries towards china. Earlier, where there we use to see the failure of ASEAN to gather uniform consensus on this matter, now we observe a sought off uniformity among them.

• Increasing Role of ASEAN in India’s “Necklace Of Diamond”[13] Strategy

We all know about the “String Of Pearls”, which is the Chinese strategy to encircle India in the Indian ocean by continually developing significant strategic bases around India. For years now, India remained unsuccessful to form a useful alternative to counter the string of pearls strategy of Chinese, the reason for it being is the lack of capitals to to afford creating such bases which is huge. But now India has come up with a much affordable and useful strategic plan, where we by signing security agreements with other foreign countries promise to share each other’s naval bases and ports for strategic and commercial use.

Further, Indian strategic experts with the same principle as above have formed a new strategy of “Necklace of Diamond”[14] as a counter to Chinese “String of Pearls”. The necklace of diamond or garland of diamond strategy mainly aims at encircling china in the South China Sea. This plan of India seemed nearly impossible few years back but with the transformation in the “geo-static relationship” things have changes for good. For making these diamond strategies successes the ASEAN countries are very significant for India, this is because India has already signed significant deals with ASEAN countries like Singapore & Indonesia, and the discussion for such other agreements with rest ASEAN countries are still in progress.

The authors suggestion for India, if it wants to use ASEAN’s support and their ports as a way to counter china, is to 1^st ensure the stability of the union and then create medium to attain uniform consensus or understanding among them by letting them know of the benefits they will achieve form this which might be ranging from soft loans to security, from free trade deal to tourist promotions and etc.”

CONCLUSION:-

The author of this present article aims at drawing a clearer picture of India’s dream of becoming global superpower. The present paper mainly focuses on 2 major aspects, relating to India’s emergence as the world leader; first being the India’s evolving position in UN and the second being the Changing nexus between Indo-ASEAN countries post covet and why ASEAN’s relevance to India changed post the pandemic, which also includes the Indian strategy of “necklace of diamond” as a way to counter the Chinese strategy of “string of pearls”. And the very end of this paper the author has forwarded her suggestions and opinions of the concerned issue.

REFERENCE:-

[1] Which top economies have suffered worst GDP fall due to COVID-19?, (BusinessToday), (Cited on 18^th December 2020), published on:https://www.businesstoday.in/current/economy-politics/which-top-economies-have-suffered-worst-gdp-fall-due-to-covid-19/story/414683.html

[2] Swarajya Staff, India’s quarterly GDP growth to return to positive territory in Q3 after 2 quarters of contradiction, (Online), (Cited on 22^ndDecember 2020), available at: https://swarajyamag.com/insta/indias-quarterly-gdp-growth-to-return-to-positive-territory-in-q3-after-two-quarters-of-contraction-says-ncaer.

[3]UN charter, Art. 23

[4]The permanent members of the UNSC are namely; China, France, Russia, UK and US

[5] Yashwant Raj, India elected unopposed to UNSC’s non-permanent member seat, (HINDUSTAN TIMES), (Cited on 22nd Dec 2020), available at: https://www.hindustantimes.com/india-news/india-wins-unopposed-unsc-s-non-permanent-member-seat/story-heCU25mJRYCVC9OYDvBCJP.html.

[6] ibid

[7] Nayanima Basu, India set to be UNSC non-permanent member, says will bring ‘Five S’ approach to world, (THE PRINT), (Cited on 22^nd December 2020), available at: https://theprint.in/diplomacy/india-set-to-be-unsc-non-permanent-member-says-will-bring-five-s-approach-to-world/436171/

[8] Mohit Anand, India-ASEAN Relations: Analysing Regional Implications, INSTITUTE OF PEACE AND CONFLICT STUDIES, Pp. 1-12 (2009). http://www.jstor.com/stable/resrep09296

[9]Dedeoğlu, Beril, &TolgaBilener. Neo-Functionalist Regional Integration Theory Put To Test In Asia: New Regionalism Around India And ASEAN.  19 INSIGHT TURKEY, Pp. 155–174, 2017,. Jstor, Www.Jstor.Org/Stable/26300563.

[10] Ryosuke Hanada, Asean’s Role In The Indo-Pacific: Rules-Based Order And Regional Integrity, GERMAN MARSHALL FUND OF THE UNITED STATES pp. 7-12 (2019).

[11]NilanjanBanik, Why ASEAN matters to India, (FORTUNE India), (Cited on 16^TH December 2020), available at https://www.fortuneindia.com/macro/why-ASEAN-matters-to-india/101500

[12]Tridivesh Singh Maini, “ASEAN Summit: Takeaways For New Delhi”, (THE GEOPOLITICS), (Cited on 16^TH December 2020), available at https://thegeopolitics.com/asean-summit-takeaways-for-new-delhi/

[13]India’s Necklace of Diamonds – Garlanding China, (THE TRUE PICTURE), (2018), (Cited on 16^th December 2020), available at https://www.thetruepicture.org/india-china-relations-india-china-military-india-attack-china/

[14]ibid

• Introduction

Insider Trading is one of India’s most prominent financial crime, which was prevalent since the early 1920’s. The term ‘Insider Trading’ can be defined as the illegal use of non-public information derived from a person associated with the company to profit /gain by purchasing/selling listed securities on the share market. The seriousness of the crimes relating to Insider Trading cannot be overlooked. Such crimes create a huge problem for the regulating authorities in tracing those involved in sharing and benefitting the information. All those benefitted are very well-connected thereby giving them the leverage to escape the liability and make enormous profit at the cost of other traders. In year 1986, the definition of Insider Trading was laid down by the Patel Committee, as “Trading in the shares of a company by the person who are in the management of the company or are close to them on the basis of undisclosed price sensitive information regarding the working of the company, which they possess but which is not available to others.”[1]

In the year 1940, the very first recommendation of implementing Insider Trading Regulation was received in India. Thereafter in the year 1948, a report was submitted by the Thomas Committee stating that all the directors, agents, officers, auditors should make proper disclosures. In 1956, with the enactment of the Companies Act, provisions to prevent Insider trading was introduced. According to Section 307 and 308 of the said Act, the directors and all the major key managerial persons were required to maintain a record of their shareholdings in the register and to make the complete disclosures of their shareholdings. However, these provisions were not stringent enough to prevent the crimes of Insider Trading.

By this time, the effects of insider trading were already been seen in the market. Not only the shareholders were losing confidence in the functioning of the markets, but were also refraining themselves from investing. And not to much surprise, even the foreign investments were adversely affected. As a result of all these the Indian Economy started suffering losses, leading the government to introduce various Committees in order to have a check on and curb such practices.

In the year 1979, the Sachar Committee submitted a Report stating that, “Insider Trading practices are being carried out in the markets and there is a need to have specific provision to restrict and prohibit such practices”. Subsequently, in the year 1986, the Patel Commission put forth the need to make several changes to the Securities Contract Regulation. Further in the year 1989 the report by Abdul Hussain Committee suggested that the offence of Insider Trading should be made liable under Civil and Criminal laws. It also suggested for the formation of a body known as SEBI to regulate and keep a check on the working of the markets.

On the basis of the reports submitted by the aforementioned committees, Securities and Exchange Board of India (SEBI) was established with the aim to regulate the market transactions and dealings. The provisions of the SEBI Act further empower it to carry out investigations, trials and impose a penalty upon those who breach the laws and carry out unlawful activities.[2]

• Regulations in India Regarding Insider Trading

The regulatory body that ensures proper corporate governance in India is the Securities and Exchange Board of India. This body keeps a watch for any unusual transaction related to purchase or sale of listed securities. The TISCO Case of 1992, paved the way for formation of the Securities and Exchange Board of India in the year 1992. In the Tisco, case the profits of the company sharply fell and there was a sale of shares in small quantities before the announcement of the half yearly results. The Court held that there was no insider trading as there is no evidence for the same. As there was a lack of regulations and procedures the culprits could not be made liable. This finally led to the forming of Securities Exchange Board of India (Insider trading) Regulations, 1992.[3] After the Regulation of 1992, a significant change was made to Insider Trading laws in India in the year 2015. Hence the “SEBI (Prohibition of Insider Trading) regulation, 2015”, was enacted to resolve the flaws in the earlier regulation as the unlawful transaction were not covered with thin ambit of the regulation. Another, significant amendment has been carried out in the year 2019 where efforts have been made to cover direct and indirect transactions.[4]

The Companies Act of 2013 also had a provision to restrict Insider Trading. Section 195 of the Act prohibited any communication of sensitive information by the key managerial persons. Later, this section was omitted as section 458 of the Companies Act delegates the power to SEBI to conduct trials against the accused persons and therefore there was a confusion that the accused should be held under the Companies Act or the SEBI regulations and therefore in 2017 the section 195 was omitted by a notification. Hence, the current regulations regarding Insider Trading in India are the SEBI (Prohibition of Insider Trading) Regulations, 2015 and Section 12A (Prohibition of Insider trading) and 15G (Penalty for Insider Trading) of the SEBI Act.

• Judgments on Insider Trading

The case of Hindustan Lever limited (HIL) Vs SEBI [5], was one of the earliest cases where SEBI acted against Insider trading, in this particular case around 8 lakhs shares were bought by HIL from the Unit Trust of India, and after some weeks a merger was announced between HIL and the other subsidiary. SEBI carried out an investigation and it was held that it was a case of Insider Information, an appeal was made to the Appellate authority and they confirmed the order of the SEBI rejecting the arguments given by HIL denying having the information or knowledge for the same. After this case SEBI made an amendment to the regulations and added and defined the word ‘unpublished’. This was the origin for the definition of the term ‘Unpublished Price Sensitive Information in India’.[6]

In another case of Reliance Industries limited (RIL) Vs SEBI [7], RIL had a stake of around 5 % in the L&T company and further there were two nominees for the company Mr. Mukesh and Anil Ambani. Further, RIL went on purchasing stake in L&T and almost got around 10 %. RIL further made a sale of these shares above the market price to Grasim Industries as a result of which the two nominees were removed and RIL was prohibited from further trading in shares of L&T. SEBI carried out an investigation and a case was filed against RIL in which they were held to be guilty of Insider trading. In an appeal the Appellate Tribunal reversed the order of SEBI stating that the information was not passed by the nominees of L&T and the same had no relation in communicating or passing of the information. L&T was not even aware of the deal and there was no evidence to prove the same. Therefore, RIL was not made liable for Insider trading.

As we can observe from these cases the conviction by SEBI for Insider trading is very less and the penalty imposed upon the convict for the commission of such illegal activities is way to less. Hence, in the next part of this Article we will discuss the problems with SEBI and the regulations in dealing with Insider Trading.

• Problems Regarding Insider Trading in India

There have been many arguments about the legality and the illegality of Insider Trading. But most of the scholars and investors state that Insider Trading is against the integrity of the market. This is because the it gives an unfair advantage to the people having access to such information as there is no risk or losses that such people suffer. Also, it causes the investors to lose their money as the people having such sensitive information carry out certain malpractices of manipulating and spreading rumours which leads to change the mind of many investors while trading in the stock markets. This further leads to loss of confidence of investors to invest in markets which is a very big concern for the economy and it also affects foreign investments. Therefore, the practice of Insider Trading is very harmful for the markets and there needs to be a regulating authority to keep a check and prevent such malpractices.

Also, another problem that is faced by SEBI is proving the cases of Insider trading as there is not always sufficient evidence to prove that a particular trade was a result of Insider Trading. As the people having access to such UPSI use third parties or make some other transactions through which they escape the liability and are held not guilty. Also in many cases the court has not been able to give proper judgment as the regulating authority has failed to prove any direct relations between the Information and the trade. As a result of this the investors lose their money, and the markets suffer the loss.

Another difficulty is that although there are provisions for Criminal Liability in the SEBI regulations but implementing them is difficult. As there is a need for Mens Rea to hold a person liable under Criminal law. It becomes very difficult for SEBI to prove the case of Mens Rea and so the accused often escape criminal liability and are held liable under civil law. Therefore, there is no fear in the markets and so this sensitive information is freely circulated.[8] For instance there have been cases that such information is being passed through WhatsApp messages on various groups. The SEBI has been trying to investigate these matters but have found no solid proof to make a case against the persons passing such sensitive information.[9]

Lastly, the Indian judiciary system takes many years to pass a judgment and the option of appeals gives the offenders enough time to manipulate the evidence and escape such liability under the SEBI regulations.

• Conclusion and Suggestion

It  would be safe to conclude that, Insider Trading is no more a White-collared Crime. Countries across the globe have taken stringent measure to check and prevent on practices such as Insider Trading. In the United States of America, the Federal Court convicted Rajat Gupta the director of Goldman Sachs for Insider trading. The facts of the case stated that, Rajat Gupta was found guilty of passing sensitive information about the market to Raj Rajaratnam, a co-founder of the Galleon Group LLC hedge fund.[10] The ruling by the Court sentenced him to two years of imprisonment and a fine.

It is a high time for India to implement such measures for the persons who have been found guilty and not treat Insider Trading just as a white-collar crime. As there is only a less than three percent conviction rate in such crimes in India there is a need to amend the regulations and to add strict criminal proceedings and awards against such offences. There also needs to be another regulatory body along with SEBI to track down high profile cases and prevent such sensitive information flowing in the market.[11]

Also, the SEBI as a regulatory body needs to increase their staff as there is only one official having a look over six companies and so it is not possible for SEBI to track and regulate every such function of the companies.[12]

Further, as the number of cases are increasing every year, the Indian Judiciary needs to set up fast track courts for certain high-profile cases that involve a huge stake of the market as it would not only save the investor’s and the markets money but would also curb the illegal practice of Insider Trading. 

References

[1] Das, Sonakshi. “The Know-All of Insider Trading – Decades of Corruptive Prevention.” Academike, 15 Jan. 2015, www.lawctopus.com/academike/know-insider-trading-decades-corruptive-prevention/#_edn8.

[2] Das, Sonakshi. “The Know-All of Insider Trading – Decades of Corruptive Prevention.” Academike, 15 Jan. 2015, www.lawctopus.com/academike/know-insider-trading-decades-corruptive-prevention/#_edn8.

[3] Kumar Gaurav. “Role of SEBI in Curbing Insider Trading in India – An Analysis.” I Pleaders, 4 June 2018, blog.ipleaders.in/sebi-insider-trading-offences/.

[4] Srivastava Anushweta & Shah Maharashi. “Latest Insider Trading Regulations: Prohibitions & Exceptions” TaxGuru, 30 Sept. 2020, https://taxguru.in/sebi/latest-insider-trading-regulations-prohibitions-exceptions.html.

[5] Hindustan Lever limited (HIL) Vs SEBI, (1998) 18 SCL 311 MOF

[6] Machiraju, H.R., (2009) “The Working of Stock Exchanges in India”, New Age International (P) Ltd., pp-164-165

[7] Reliance Industries limited (RIL) Vs SEBI, 2004 55 SCL 81 SAT

[8] Katarki, Suneeth. “India: ‘Mens Rea’ In Insider Trading – A ‘Sine Qua Non’?” Mondaq, 3 June 2015, www.mondaq.com/india/x/401724/Securities/Requirement Of Mens Rea As A Criterion for Penalising Insider Trading In India.

[9] Jayachandran. “Eliminating the Menace of Insider Trading.” Live Mint, 27 Nov. 2017, www.livemint.com/Opinion/qUBUyk9cbxSfItLarLAuvK/Eliminating-the-menace-of-insider-trading.html.

[10] Sharma, Betwa. “Rajat Gupta Found Guilty of Insider Trading.” Business Today, 16 June 2012, www.businesstoday.in/current/world/rajat-gupta-insider-trading-sentence/story/185519.html.

[11] Ibid.

[12] Ibid.