Dear Advocates, How You Can Go On Strike When Supreme Court Has Banned It?

Dear Advocates, How You Can Go On Strike When Supreme Court Has Banned It?

The author argues that it is hypocritical that advocates, who represent the elite of society & who are supposed to be the defenders of legal values, should openly flout the law by defying the verdicts of the Supreme Court. Such conduct is symptomatic of the utter lawlessness that our Society has degenerated into in all walks of life rues the author and claims that stern action ought to be taken against the perpetrators for contempt of court

Pursuant to a resolution of the Bar Council of India, advocates across the Country are on a strike yesterday and today (11th & 12th July 2012). The result is that 1.25 lakh lawyers across the Country have abstained from work and Courts have come to a grinding halt.

Let’s understand what the strike is all about and to what extent it is permitted by the law.

First, the issue: The HRD Ministry has introduced the Higher Education and Research Bill, 2011 in Parliament with the object of promoting “autonomy of higher educational institutions”. The Bill proposes to establish a “National Commission for Higher Education and Research” which will maintain “standards of higher education and research”. The Commission will be manned by prominent academicians. One of the fields of education for which “standards” will be set is the legal profession.

The Bar Council’s objections to the said Bill are detailed in the “Minutes of Meeting” dated 19.05.2012. Surprisingly, though drafted by top lawyers, the Minutes do not spell out the rationale why the Bar Council is opposed to the Bill. Instead, it is high on rhetoric. It claims that the Bill is an “attack on the Advocates’ Act” and “completely in violation of the federal structure of the nation”. It is also wildly alleged that “the HRD Ministry is trying to hand-over the entire education system to a few of its nominees”. The Bill is also attacked as being “arbitrary”, “totally impractical” and as an attempt “to spoil the tested and well established traditional norms of education system of the country“. It is also breathlessly claimed that the Bill has been “brought only at the instance of some foreign countries and help a few people and also to make the entry of Foreign Institutions and Foreign Law Firms easy”. For good measure, it is added that “the HRD Ministry was clandestinely trying to sideline and harm the advocates of the country and their elected statutory Bodies” and that “Indian culture” will be “spoilt” if foreign lawyers are allowed to practice here.

The Minutes end with the grim resolution that an “emergent” meeting must be called and “copies of the Bill must be burnt in public”. It is also stated that there will be a “Jail Bharo Abhiyan” in due course.

All in all, the Minutes make for very sad reading. I read the entire thing line by line and am still clueless on what is the grievance of the Bar Council. What I would have appreciated is an objective analysis of the Bill, what its pitfalls were and what were the suggestions of the Bar Council on how to rectify those drawbacks. Instead, what I see is some reckless posturing and mindless diatribe. The argument that allowing foreign lawyers to practice in India will “spoil Indian culture” is quite laughable to say the least.

Anyway, whatever, may be the merits or otherwise of the Bar Council’s views, they are entitled to it. However, the larger question is whether they can hold the courts and the litigants to ransom by refusing to attend court.

On this, fortunately, the law is very clear. In Harish Uppal vs. UOI (2003) 2 SCC 45, the Supreme Court lashed out at lawyers for going on strike. One can’t do better than to quote from what the judges said:

“The lawyers have no right to go on strike or give a call for boycott, not even on a token strike. The protest, if any as required, can only be by giving press statements, T.V. interviews, carrying out-of-Court premises banners and/or placards, wearing black or white or any colour arm bands, peaceful protest marches outside and away from Court premises; going on dharnas or relay fasts, etc. The lawyers holding vakalats on behalf of their clientscannot refuse to attend Courts in pursuance to a call for strike or boycott. All lawyers must boldly refuse to abide by any call for strike or boycott. No lawyer can be visited with any adverse consequences by the Bar Association or the Bar Council and no threat or coercion of any nature including that of expulsion can be held out. No Bar Council or Bar Association can permit calling of a meeting for purposes of considering a call for strike or boycott and requisition, if any, for such meeting must be ignored…. Courts are under no obligation to adjourn matters because lawyers are on strike. On the contrary, it is the duty of all Courts to go on with matters on their boards even in the absence of lawyers. In other words, Courts must not be privy to strikes or calls for boycotts. If a lawyer, holding a vakalat of a client, abstains from attending Court due to a strike call, he shall bepersonally liable to pay costs which shall be in addition to damages which he might have to pay his client for loss suffered by him”.

This sentiment was echoed in Ramon Services Pvt. Ltd vs Subhash Kapoor where it was observed “Abstaining from the courts by the Advocates, by and large, does not only affect the persons belonging to the legal profession but also hampers the process of justice sometimes urgently needed by the consumers of justice, the litigants. Legal profession is essentially a service oriented profession. The relationship between the lawyer and his client is one of trust and confidence. With the strike by the lawyers, the process of court intended to secure justice is obstructed which is unwarranted under the provisions of the Advocates Act. Law is no trade and briefs of the litigants not merchandise”.

In Mahabir Prasad Singh v. Jacks Aviation Pvt. Ltd (1999) (1) SCC 37, the Court used stark language to drive home the point: It said “Judicial function cannot and should not be permitted to bestonewalled by browbeating or bullying methodology, whether it is by litigants or by counsel. Judicial process must run its even course unbridled by any boycott call of the Bar, or tactics of filibuster adopted by any member thereof”.

In Ramon Services Pvt. Ltd vs Subhash Kapoor, the Court “put the profession to notice that in future the advocate would also be answerable for the consequence suffered by the party if the non-appearance was solely on the ground of a strike call”. It also pulled up the judiciary for “sympathising with the Bar during the strikes or boycotts” and warned them to “rise from the slumber” and not show any leniency to the defaulting party and award “exemplary costs” to the adversary. “Inaction will surely contribute to the erosion of ethics and values in the legal profession” warned the Court and threatened that “The defaulting courts may also be contributory to the contempt of this Court”.

This was reiterated in B.L. Wadehra vs. State AIR 2000 Delhi 266 where it was held “ .. so long as a lawyer holds the vakalat for his client and has not been duly discharged, he has no right to abstain from appearing in Court even on the ground of a strike called by the Bar Association or any other body of lawyers. If he so abstains, he commits a professional misconduct, a breach of professional duty, a breach of contract and also a breach of trust and he will be liable to suffer all the consequences thereof. There is no fundamental right, either under Article 19 or under Article 21 of the Constitution, which permits or authorises a lawyer to abstain from appearing in Court in a case in which he holds the vakalat for a party in that case. On the other hand a litigant has a fundamental right for speedy trial of his case ..”.

In U.P. Sales Tax Service vs. Taxation Bar Association 1996 AIR 98, the Court rued that “It has ben a frequent spectacle in the recent past to witness that advocates strikes work and boycott the courts at the slightest provocation overlooking the harm caused to the judicial system in general and the litigant public in particular and to themselves in the estimate of the general public. An advocate is an officer of the court and enjoys a special status in the society“.

Ikm Investors Services Ltd. vs Kiranpal Kapoor was an unfortunate case which shows how the adverse consequences of an irresponsible lawyer’s actions have to be borne by the unfortunate client. The Petitioner’s s. 138 complaint was dismissed because the lawyer did not appear as he was on “strike”. An appeal against that order was dismissed by the High Court by stating that the Court could not be a party to the strike call and was duty bound to proceed with the matter. The Court held that the “non-appearance of the advocate in the court on the date when case is fixed, on the pretext or ground of strike amounts to breach of faith and trust reposed in the advocate by the client, who engaged him and paid his fees”. The consoling factor was that it was observed that the litigant could recover the loss from the concerned advocate. Of course, whether any advocate would own up the responsibility and compensate the poor litigant’s loss is another matter altogether.

Interestingly, even the Income-tax Appellate Tribunal made the assessee suffer the consequences for the non-appearance of his advocate owing to a “boycott” call by the Jabalpur Tax Bar Association. It dismissed the appeal and refused to recall the order (see (2007) 111 TTJ Jab 149)

Faced with the piquant situation of defiance of the law versus defiance of the Bar Council’s dictate, I understand that several State Bar Associations, including the powerful Bombay Bar Association chosenot to take any stand in the matter and left it to their members to do as they please. However, this also is not defensible. When you know something is not right, can you just bury your head in the sand and ignore it?

However, some lawyers were brave enough to listen to their conscience and showed a great sense of responsibility. The Times of India quoted eminent senior advocate S G Aney as stating that there was “no reason for the strike” and that it was “pointless and childish”. However, the other lawyers who mutely stayed home and did not attend courts cannot claim this distinction.

Even in the past, several right thinking advocates have come out in the open to protest the strike calls. K.K. Venugopal, senior advocate, wrote in the article “The Legal Profession at the Turn of the Century” [(1989) 1 NLSJ 121], that a boycott amounts to contempt of court and the advocates participating in the strike keep their clients as hostages and their interests in jeopardy. P.P.Rao, senior advocate, wrote in his article “Strike by Professionals” (Indian Advocate, Vol. XXIII 1991 (Part I) that a strike amounted to professional misconduct. H.M. Seervai, a noted distinguished jurist, wrote in his article “Lawyers Strike and the Duty of the Supreme Court” (Indian Advocate [Vol. XXIII 1991 (Part I)], that lawyers ought to know that at least as long as lawful redress is available to aggrieved lawyers, there is no justification for lawyers to join in an illegal conspiracy to commit a gross, criminal contempt of court, thereby striking at the heart of the liberty conferred on every person by our Constitution. Fali Nariman, wrote in his article “Boycott – a lawyer’s weapon” (Indian Advocate [Vol. XVIII 1978 Nos. 1 & 2]) that when the lawyers boycott the courts, confidence in the administration of justice is shaken.

So, if the question is asked whether the Bar Council of India violated the law by giving a strike call in its resolution dated 19.05.2012, the answer would definitely have to be in the affirmative. There can be no question about it because in Harish Uppal vs. UOI it was held “No Bar Council or Bar Association can permit calling of a meeting for purposes of considering a call for strike or boycott and requisition”. I have scoured the law reports and cannot find one circumstance that would justify the strike call. The next question is what will be the consequence of this illegality. The answer simply is “Nothing”. Nothing will happen. If at all the matter travels to Court, the judges will write another long judgement “condemning” the strike call. But beyond that, who cares.

Anyway, what this entire episode shows is the utter disregard that we as a society have towards the law. Whether it is a petty thing like obeying traffic rules or a major thing like properly discharging your income-tax obligations or even holding judicial institutions to ransom, the common feature is the sense that you can break the law and get away with it. And even if you are unfortunate enough to get caught, a mild slap on the wrist is that all the punishment that you get. So, why respect the law?

Vellalapatti Swaminathan Iyer
Hyderabad (tax2.me)

Court rules on appointment of arbitrator under special circumstances

Introduction

The Supreme Court recently ruled that, despite an express clause providing for an arbitrator, the court can appoint an independent and impartial arbitrator under special circumstances.

Bipromasz Bipron Trading SA (BBT) filed a petition(1) seeking referral of disputes against Bharat Electronic Ltd (BEL) to an independent arbitrator. In its decision the Supreme Court held that although, in general, the court must honour the express clause in the arbitration agreement appointing an arbitrator, under special circumstances (eg, a reasonable apprehension that the person mentioned in the arbitration agreement as the arbitrator is unlikely to act independently or impartially) the chief justice or his or her designate may exercise power under Sections 11(4) and 11(6) of the Arbitration and Conciliation Act 1996 and may refer the dispute to an independent arbitrator under Section 11(8) of the act.(2)

Facts

BEL, an Indian government company, issued a purchase order to BBT, a Poland-based company, seeking to purchase certain industrial goods or materials, including hydraulic motors, gyro units and actuating cylinders. The purchase order was issued along with a document titled "General Terms and Conditions of Purchase Order (Foreign)". Clause 10 of the document governed arbitration, referring all disputes concerning the purchase order to the chairman and managing director of BEL or his nominee. While the performance of the contract was ongoing, BEL "put on hold" pending supplies, directing BBT to not dispatch any pending items. However, in response to BEL's subsequent communication, BBT sent out 10 units of gyro stabilisers, which were all rejected by BEL on the alleged ground of being defective and not being of "Russian origin". This, among other things, gave rise to a number of disputes between the parties. Thereafter, the following chain of events occurred.

On May 20 2011 notice was sent through counsel by the petitioner to the respondent seeking appointment of an independent and impartial sole arbitrator. On June 29 2011, realising that the statutory period of 30 days had expired with no reply from the respondent, the petitioner filed a sworn affidavit in Poland requesting appointment of an arbitrator.(3) The same day, the respondent sent a reply to the advocate at New Delhi (which was received on July 1 2011) stating that the correspondence was being placed before the chairman and managing director.

Due to the new communication received, a fresh affidavit was required. Hence, a petition was withheld to await a fresh affidavit from Poland. On July 8 2011 the petitioner sent further notice to the respondent stating that the action would be improper. On July 21 2011 the petition at hand seeking the appointment of an arbitrator was filed. On July 26 2011 the respondent sent an email to the counsel of the petitioner in New Delhi, attaching a letter from the counsel (dated the same day) along with a letter from the respondent (dated July 19 2011) stating that the arbitrator had been appointed. The hard copy of this letter was received by the counsel for the petitioner in New Delhi on July 28 2011.

Proceedings

The petitioner called on the court to intervene and appoint an independent arbitrator, as it was alleged that neither the chairman nor his nominee would be able to act impartially - there would always be a reasonable apprehension that the chairman would be favourably inclined towards the respondent. Furthermore, the petitioners contended that communication of the fact that the arbitrator had been appointed by the respondent was made to the petitioner only through an email after the petition for appointment of arbitrator before the Supreme Court had been filed. In view of the same, the petition was maintainable.

As a rebuttal, the respondent argued that the chairman had duly exercised his power and appointed an authority to act as an arbitrator and that the order of the chairman had been communicated to the petitioners, via fax, before the petition was filed. It was further argued that the petitioner, having accepted the arbitration clause with "open eyes", could not be permitted to avoid the same on the ground of perceived partiality. Since the parties had once agreed on a named arbitrator, they could not later resile therefrom.

In the light of the above, the Supreme Court had to consider two issues:

·                          whether the petition was maintainable in view of the respondent's claim that the arbitrator had already been nominated before the petition was filed; and

·                          whether the court should allow the petition to appoint an independent arbitrator to adjudicate on the dispute or honour the express clause in the purchase order, referring the dispute to the chairman of BEL.

Decision

The Supreme Court allowed the petition and, exercising its powers under Sections 11(4) and 11(6) of the act, appointed a retired High Court judge as the sole arbitrator or to adjudicate the disputes that had arisen between the parties, on such terms and conditions as the sole arbitrator may deem fit and proper.

On the first issue, the Supreme Court took the view that the petition was maintainable, as the intimation of the appointment of the arbitrator was made to the petitioner only between July 26 and July 28 2011, following the filing of the petition on July 21 2011. The court arrived at this view relying, among other things, on Section 3(2) of the act, which provides that the communication is deemed to have been received only on the day it is so delivered. Moreover, an official order takes effect only when it is served on the person affected. However, if an order is passed but not communicated to the party concerned, it does not create a legal right that can be enforced through the court of law, as it does not become effective until it is communicated. The order passed by a competent authority or by an appropriate authority and kept with itself can be changed, modified or cancelled, thus denuding such an order of the characteristics of a final order.

In view of the above, the court held that even if the order appointing the arbitrator was passed before the date on which the petition was filed, since it was not delivered to the affected party (ie, the petitioner) on the same day, (as there was no proof of the respondent having faxed the order appointing the arbitrator to the petitioner), it was deemed to be received on the day on which it was delivered (ie, through email), following the filing of the petition.

On the second issue, at the outset the court examined the position that where the arbitration agreement clearly envisages the appointment of the presiding officer, and there is no specification that the arbitrator must be a different person depending upon the nature of the dispute, it is not for the court to ignore the same and invoke the exercise of its power under the act. The court further took the view that it was not bound to appoint the chairman or his nominee in view of the arbitration clause.

The court referred to observations in the following judgments, which carved out an exception to the general rule that courts should always follow the choice of arbitrator detailed in an arbitration clause:

·                          Northern Railway Administration, Ministry of Railway, New Delhi v Patel Engineering Company Ltd;(4) and

·                          Indian Oil Corporation v Raja Transport Private Ltd.(5)

The court relied on the following observations made in such judgments:

·                          In exercise of its power under Section 11(6) of the act, the court must take into consideration the provision contained in Section 11(8) of the act which requires that when appointing an arbitrator, the appointing statutory authority will have due regard to any qualifications required of the arbitrator by the agreement of the parties and other considerations as are likely to secure the appointment of an independent and impartial arbitrator.

·                          While the rule shall be to refer disputes to the named arbitrator, ignoring the named arbitrator and deviating from this rule in nominating an independent arbitrator will be in the nature of an exception to the rule to be resorted to only for valid reasons, such as a reasonable apprehension that the arbitrator is unlikely to act independently or impartially, or if the named arbitrator is not available.

The court opined that it has the power to make an appointment of an arbitrator other than the named arbitrator on the examination of the relevant facts, which tend to indicate that the named arbitrator is likely to be partial. In the court's view, as the chairman was the controlling authority of all the employees, he had also been dealing with the contract, and therefore could not act as an impartial arbitrator. Considering the factual circumstances, and drawing analogy from Denel (Proprietary) Limited v Bharat Electronics Limited,(6) the court adopted a similar course of action. While allowing the petition, it appointed a retired Chief Justice of the Madras High Court as the sole arbitrator.

Comment

Taking a practical view of the scenario, government companies such as BEL generally enter into standard contracts providing for an in-house authority as a sole arbitrator. While such contracts are "agreed" between the parties, the party entering into the agreement with such companies may not generally have an equal bargaining power. Therefore, arbitration under such circumstances may be reduced to a sham. Hence, through its ruling in Bipromasz, the Supreme Court has recognised the principle of party autonomy insofar as the parties agree on a named arbitrator. However, the court has also laid down an exception to this rule by stating that where the factual circumstances are peculiar to a case (eg, reasonable apprehension of impartiality), the court may exercise its power to appoint an arbitrator in spite of the express choice of the parties.

Through this ruling, the court struck a balance to the extent that it could not interpose and interdict the appointment of an arbitrator whom the parties have chosen under the terms of the contract. However, in order to protect the sanctity of the arbitration process, it may appoint an arbitrator in a special set of circumstances if the arbitration would otherwise be rendered void

TIME TABLE FOR CS FOUNDATION/EXECUTIVE/PROFESSIONAL PROG. DEC EXAM-2012

COMPANY SECRETARIES EXAMINATIONS - DECEMBER, 2012

TIME-TABLE & PROGRAMME
FOUNDATION PROGRAMME
(OLD SYLLABUS)
PROFESSIONAL PROGRAMME
EXECUTIVE PROGRAMME

http://www.icsi.edu/docs/WebModules/Student/TTCS_D2012.pdf

www.icsi.edu

TIME-TABEL FOR CS FOUNDATION PROG. EXAMINATION DECEMBER-2012

COMPANY SECRETARIES EXAMINATIONS – DECEMBER, 2012

TIME-TABLE AND PROGRAMME FOR FOUNDATION

PROGRAMME UNDER NEW SYLLABUS (OMR) SYSTEM

1st OMR BASED PAPER 1 JAN 2013

http://www.icsi.edu/docs/WebModules/Student/TT%20FP-NSDEC.pdf

www.icsi.edu

Deductors Must Comply with their Obligations to Ensure Correct Credit to Persons from Whose Income Tax is Deducted at Source

Ministry of Finance10-July, 2012 16:05 IST

Deductors Must Comply with their Obligations to Ensure Correct Credit to Persons from Whose Income Tax is Deducted at Source

All deductors other than Government deductors must file their quarterly TDS statement for the quarter ending 30th June 2012, on or before 15th July 2012 and Government deductors must file their statement on or before 30th July 2012. While submitting their statements, the deductors have to choose correct and relevant form, quote correct PAN against all entries and ensure that correct CIN/BIN is quoted in the TDS statement. Non-quoting of PAN or TAN in TDS statements or delay in filing of TDS statements may lead to levy of penalty. 

Filing of TDS statement with correct PAN and CIN/BIN is important because under Rule 37BA of Income Tax Rules, 1962 credit for tax deducted at source is given to the deductees on the basis of TDS statement furnished to the Income-tax Department by the deductor. Filing of TDS statements with incorrect PAN or other details of the deductee would, therefore, cause inconvenience to the deductees (taxpayer). 

In case the income on which tax has been deducted at source is assessable in the hands of a person other than the deductee, the deductee must file a declaration with the deductor that credit for the TDS shall be given to the other person and not to the deductee. The declaration filed by the deductee must contain the name, address, Permanent Account Number of the person to whom credit is to be given and reasons for giving credit to such person. The deductor must, in the TDS statement, report the tax deduction in the name of such other person and also issue the TDS certificate in the name of the person in whose name credit is shown in the TDS statement. 

TDS certificates for deductions on income other than salary income (Form 16A) for the quarter ending 30th June 2012 should be issued on or before 30th July 2012

NEW BATCH OF CS FOUNDATION STUDENTS

NEW BATCH OF CS FOUNDATION STUDENTS 



TRIAL CLASS OF : ACCOUNTS 


FACULTY : NIKITA AGARWAL




DAY & TIMING : 20TH JULY,2012 4.30PM 






PLACE : 3RD FLOOR CHITRAHARA BUILDING, (NEAR LEELA CINEMA HALL)


             NAVAL KISHORE ROAD, HAZRATGANAJ, LUCKNOW.


DETAILS : 9554279814, 9935778867, (0522)4011081

UPDATES:

1. Circular No.6, dated 06/07/2012- Charging of interest under DVAT/CST acts discussing section 3(4), 42(2), 32(3), rule 36(3) & (4) of DVAT and section 9(2B) of CST.
2. ITR 5 & 6 for AY 2012-13 notified. Income tax (7th amendment) rules, 2012. Balance sheet as per old schedule VI. E-filing to start after schema release by Income Tax Department.
3. CS can also appear before any authority in any proceedings under DVAT act besides legal practitioner, CA or CWA. [DVAT 2nd amendment rules of 15-06-2012]