India Chapter authored by Zia Mody, Aditya Vikram Bhat and Priyanka Shetty ^[1]

As with most common law countries, Indian law may broadly be classified as substantive or procedural law. While substantive laws determine rights and liabilities of parties, confer legal status, or impose and define the nature and extent of legal duties, procedural laws prescribe the practice, procedure and machinery for the enforcement or recognition of rights and liabilities.² To put it another way, substantive laws are those that are enforced, while procedural laws pertain to the rules through which the substantive laws are enforced.³

Dispute resolution in India may be through courts, specialised tribunals (such as those for recovery of debt by banks or company disputes, among others) or alternative dispute resolution (ADR) mechanisms that include arbitration, mediation and conciliation. The amendment to the Commercial Courts Act, 2015 (Commercial Courts Act) provides for the constitution of commercial courts at a district level, except in areas where the High Court exercises ordinary civil jurisdiction and provides for commercial divisions (in all High Courts having ordinary civil jurisdiction) and commercial appellate divisions in each High Court for the adjudication and speedy disposal of commercial disputes⁴ of a specified value of not less than 10 million rupees or such other notified value within the limits of the relevant territorial jurisdiction.⁵ The amendment mandates pre-institution mediation in all cases except in suits or applications in which urgent relief is sought and further prescribes a maximum period of three months for the completion of the process of mediation.⁶

The primary laws codifying court procedure in India are the Code of Civil Procedure 1908 (CPC) and the Code of Criminal Procedure 1973 (CrPC). Charter High Courts such as the High Courts of Bombay, Calcutta, Delhi and Madras may also apply Letters Patent Rules, which, when applicable, may override the provisions of the CPC. The procedure to be applied by tribunals is often governed by the statute that establishes the tribunal (and rules framed thereunder). Courts have held that the fundamental principles contained in the CPC and Indian Evidence Act, 1872 (Evidence Act) would continue to apply to tribunals, even if they are not bound to follow the specific provisions.⁷

While the legislative and executive branches of the government follow a federal structure, the Indian judicial system comprises a unified three-tier structure with the Supreme Court of India (the Supreme Court) holding the position of the apex court. Below the Supreme Court are the High Courts, functioning (in most cases) in each state. Lower in the hierarchy are the subordinate courts, which include courts at the district level and other lower courts.

Law declared by the Supreme Court is binding on all other courts in India.⁸ By acceptance of the doctrine of stare decisis, law declared by High Courts binds subordinate courts⁹ and may have persuasive value over High Courts of other states.¹⁰ The Supreme Court and the High Courts are charged with original,¹¹ appellate and writ jurisdiction. Under the writ jurisdiction, they have the power to review administrative actions, including for the purposes of the enforcement of constitutional and fundamental rights granted under Part III of the Constitution of India.¹²

The Arbitration and Conciliation Act, 1996 (the Arbitration Act) governs the law related to arbitration in India. Part I of the Arbitration Act governs the arbitrations seated in India, both domestic and international, and Part II incorporates the provisions of the Convention on the Recognition and Enforcement of Foreign Awards (the New York Convention). The Arbitration Act is based on the Model Law on International Commercial Arbitration, 1985 (the Model Law), as adopted by the United Nations Commission on International Trade Law on 21 June 1985. Conciliation has also been given statutory recognition through Part III of the Arbitration Act.

As a recent trend, even courts often promote ADR. This was discussed in great detail in the case of Afcons Infrastructure Limited v. Cherian Varkey Construction,¹³ where the Supreme Court laid down guidelines for courts to follow for the effective implementation of Section 89 of the CPC. Courts encourage parties to settle their disputes by means of ADR. The Supreme Court in Perry Kansagra v. Smriti Madan Kansagra¹⁴ identified various kinds of disputes where ADR may be a better alternative than litigation, such as cases relating to trade, commerce and contracts including, inter alia, money claims arising out of contracts. Disputes relating to specific performance or disputes between insurer and insured, bankers and customers were also considered to be better resolved through an ADR mechanism rather than litigation.

The year 2022 witnessed a series of legislative developments aimed at introducing greater ease of doing business in India and bringing the current law in line with the global technological advancement and rapid economic growth in the country.

To promote resolution of intra-company disputes in publicly listed companies, the Securities and Exchange Board of India issued a standard operating procedure for a stock exchange arbitration mechanism.¹⁵

The Ministry of Electronics and Information Technology issued the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2022. The rules amended the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (the Intermediary Guidelines) to, inter alia:

1. require the intermediaries to ‘make reasonable efforts to cause’ its users not to publish or process certain information;¹⁶
2. remove ‘defamatory’ and ‘libellous’ from the ambit of such prohibited information and add ‘misinformation’ to this category;¹⁷ and
3. provide for the establishment of a Grievance Appellate Committee.¹⁸

The Finance Act, 2022 brought virtual digital assets within the ambit of the Income Tax Act, 1961 (ITA) and made them taxable at a flat rate of 30 per cent.¹⁹

In view of the resurgence of covid-19 cases in India, the Supreme Court by its order dated 10 January 2022 has restored the order of 23 March 2020 and issued the following directions:

In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15 March 2020 until 28 February 2022 shall stand excluded. The balance period of limitation remaining as on 3 October 2021, if any, shall become available with effect from 1 March 2022.

In cases where the limitation period would have expired between 15 March 2020 and 28 February 2022, all persons shall have a limitation period of 90 days from 1 March 2022, notwithstanding the actual balance period of limitation remaining. In such case, if the actual balance period of limitation with effect from 1 March 2022 is greater than 90 days, that longer period of limitation shall apply.

Furthermore, the following are significant court judgments in 2022.

In Vidarbha Industries Power Ltd. v. Axis Bank Ltd,²⁰ the Supreme Court held that the National Company Law Tribunal (NCLT) has the discretion to not direct initiation of the corporate insolvency resolution process (CIRP) of a company pursuant to a petition filed on behalf of a financial creditor under Insolvency and Bankruptcy Code, 2016 (IBC), despite the existence of default. On 22 September 2022, the Supreme Court dismissed the review petition against the judgment.²¹

On the issue of treatment of statutory dues in a resolution plan under the IBC, the Supreme Court in State Tax Officer (1) v. Rainbow Papers Limited ²² held that, in view of Section 43 of the Gujarat Value Added Tax Act, 2003, which provided that the ‘government shall be a ‘first charge on the property of the dealer’, state tax authority was a ‘secured creditor’ under the IBC and, thus, must be treated on par with other secured creditors while distributing monies under the resolution plan.

In Indian Oil Corporation v. NCC Limited,²³ the Supreme Court held that that the courts’ scope of inquiry when deciding an application for appointment of arbitrator under Section 11(6) of the Arbitration Act can include determining whether a dispute is non-arbitrable or falls within the excepted clause, or both, if ‘the facts are very clear and glaring’ and ‘in view of specific clauses in the agreement’.²⁴

In Oil and Natural Gas Corporation v. Afcons Gunanusa JV,²⁵ the Supreme Court held, inter alia, that arbitrators do not possess an absolute or unilateral power to determine their own fees and agreement between the parties in this regard is paramount. In absence of such agreement, the arbitrators are accorded with the power to determine their own fee under some national arbitration laws, which is subject to review by courts.²⁶ In this context, the Court held that the application of the Fourth Schedule of the Arbitration Act (applicable to domestic arbitrations) is mandatory for stipulating the fees for arbitrators appointed by arbitral institutions designated for such purpose, but not for court-appointed arbitrators in the absence of rules framed by the concerned High Court.²⁷ The Court also distinguished the concepts of fees and costs, holding that Sections 31(8), 31A or 38(1) of the Arbitration Act, which deal with the latter, cannot be used by arbitrators to issue orders regarding their own remuneration.²⁸ Furthermore, in exercise of its plenary powers, the Court directed the adoption of the certain guidelines for the conduct of ad hoc arbitrations in India.²⁹

In ONGC Ltd. v. Discovery Enterprises (P) Ltd,³⁰ the Supreme Court dealt with the issue relating to an application for discovery and inspection filed against a non-signatory even before it was successfully joined in the arbitration. It was contended that the said application was necessary to make a case for such joinder. As the tribunal refused to decide the said application due to lack of evidence to show that the non-signatory had any role in the contract between the parties, the Court set aside an interim award refusing to join the non-signatory. The Court held that the tribunal did not evaluate the legal foundation of the group of companies doctrine on facts or law and made a ‘fundamental error of law’ in not deciding the application for inspection and discovery.³¹

In Cox & Kings Ltd v. SAP India (P) Ltd,³² the Supreme Court held that the doctrinal ingredients concerning the group of companies doctrine needs to be relooked. The Court observed that the law laid down in Chloro Controls India Private Limited v. Severn Trent Water Purification Inc,³³ and the cases following it, appear to have been based, ‘more on economics and convenience rather than law’ and commented that this may not be the correct approach. The Court took note of the inconsistencies among the earlier judicial pronouncements regarding the basis for the doctrine. While expressing doubts on the correctness of the law, the Court referred the following questions to a larger bench:³⁴

1. Whether the doctrine should be read into Section 8 of the Arbitration Act or whether it can exist independent of any statutory provision?
2. Whether it should be invoked based on the principle of ‘single economic reality’?
3. Whether it should be used to interpret implied consent or parties’ intent to arbitrate?
4. Whether the principles of alter ego or piercing the corporate veil, or both, can alone justify its application even without implied consent?

In Intercontinental Hotels Group (India) (P) Ltd v. Waterline Hotels (P) Ltd,³⁵ a three-judge bench of the Supreme Court affirmed the view adopted by a previous three-judge bench in NN Global Mercantile (P) Ltd v. Indo Unique Flame Ltd ³⁶ and held that at the stage of appointment of an arbitrator under Section 11 of the Arbitration Act, a court cannot ascertain whether the agreement is insufficiently or not appropriately stamped. The Court took notice of the fact that the issue of the effect of non-stamping of the main contract on the enforceability of the arbitration agreement has been referred to a constitution bench, and observed that, during the pendency of the issue, courts must ‘ensure that arbitrations are carried on, unless the issue before the Court patently indicates existence of deadwood’.³⁷ This position was recently re-affirmed by the Supreme Court in Weatherford Oil Tool Middle East Ltd v. Baker Hughes Singapore PTE.³⁸

In Patil Automation (P) Ltd v. Rakheja Engineers (P) Ltd,³⁹ the Supreme Court held that pre-litigation mediation under Section 12A of the Commercial Courts Act is mandatory, and any suit instituted in contravention thereof would be liable to be rejected under Order VII, Rule 11 of CPC (rejection of plaint). The Court made this declaration prospective, that is, applicable to suits filed after 20 August 2022.⁴⁰

Footnotes:

i Overview of court procedure

It can be seen in connection with the Indian legal system (as a criticism more than a compliment) that ‘there is ample – sometimes excessive – due process; and one has to be patient and persevering’.⁴¹ Broadly, court procedure in India is governed by the CPC for civil matters and the CrPC for criminal matters. As discussed above, even where statutes create specialised tribunals and courts to deal with particular disputes, it is generally recognised that the principles contained in the CPC and CrPC would apply. This is often so because such provisions in the CPC and CrPC are recognised as the embodiments of the principles of fair play, natural justice and due process.

ii Procedures and time frames

The primary statute governing limitation is the Limitation Act, 1963. As a general rule, most suits, especially those relating to contracts and accounts, have a limitation period of three years for filing. Some suits relating to immovable property may fall within a longer limitation ranging from three to 30 years.⁴² The periods prescribed under the Limitation Act may not apply in the event a specific statute prescribes a period of limitation.⁴³

Where a plaintiff approaches a court for injunctive relief, especially at an interlocutory stage, the court may require the plaintiff to demonstrate (quite aside from being within limitation) that the plaintiff has acted in a timely manner and has not acquiesced to the infringement of its rights.⁴⁴

The Supreme Court, in Wockhardt Limited v. Torrent Pharmaceuticals Limited,⁴⁵ clarified this position by stating that acquiescence cannot be equated with delay. There should not be mere silence or inaction on the part of the plaintiff but a refusal or failure to act despite knowledge of invasion and opportunity to stop it.

A writ court may require a petitioner (although no limitation is prescribed for writs) to demonstrate that he or she has approached the court without delay, since a delay may disentitle a petitioner to relief.⁴⁶

The CPC was amended by virtue of the Commercial Courts Act, 2015. According to the amended provisions of Order V Rule 1(1) and Order VIII Rules 1 and 10 of the CPC,⁴⁷ a party is granted 30 days to file its written statement, and a grace period of 90 days is provided wherein a court can, after recording the reasons for the delay in filing and after imposing costs, allow a written statement to be taken on record. It was further held by the Supreme Court in the case of M/s SCG Contracts India Pvt Ltd v. KS Chamankar Infrastructure Pvt Ltd ⁴⁸ that the failure to file written statements within the statutory time period of 120 days in a commercial suit will result in the forfeiture of the right of the defendant to file a written statement, and the court would not be able to use its inherent powers to avoid the consequences emanating from the aforesaid provision. The CPC also curtails the number of adjournments that may be sought and attempts to curtail practices that are often perceived as dilatory, such as belated amendments to pleadings⁴⁹ and belated production of documents.⁵⁰

Notably, the Arbitration Act, as amended by the Arbitration and Conciliation (Amendment) Act, 2019 (the 2019 Amendment Act), mandates time-bound procedure for domestic arbitrations seated in India.⁵¹ It now provides that the pleadings in a case shall be completed within six months from the appointment of the arbitrator,⁵² and an arbitral award is required to be made within 12 months of the date of completion of the pleadings under Subsection (4) of Section 23.⁵³ Parties may also agree, in writing, to have their dispute resolved by fast-track procedures, which would require the award to be made within six months of the date of entry of the arbitral tribunal upon reference.⁵⁴ If the court passes any interim measure under Section 9 of the Arbitration Act, the proceedings must commence within 90 days of the date of the order.⁵⁵

Pursuant to the enactment of the Commercial Courts Act, there is a time limit of 30 days for the submission of the written statement (extendable to 120 days),⁵⁶ and 90 days from the date of conclusion of arguments for the pronouncement of judgment.⁵⁷ It further provides that the appellate court should endeavour to dispose of appeals within six months of the date of filing of such appeal.⁵⁸ The Constitution Bench of the Supreme Court in New India Assurance Co Ltd v. Hilli Multipurpose Cold Storage Pvt Ltd ⁵⁹ has clarified that there was no scope for extending the time for filing of written statements beyond the period of 120 days in commercial suits, as the provision with regard to such suits is mandatory. The Supreme Court in Shoraj Singh v. Charan Singh⁶⁰ held that the timeline prescribed under Order VIII, Rule 1 of the CPC for filing the written statement is mandatory for the purposes of commercial cases filed before the commercial courts under the Commercial Courts Act.

The IBC provides a period of 330 days from the insolvency commencement date as the period of the insolvency resolution process that culminates with the submission of a resolution plan to the NCLT.⁶¹ However, the Supreme Court of India has observed that the timelines prescribed under IBC are not mandatory and the time spent on legal proceedings during the CIRP can be excluded by the NCLT.⁶² According to the Economic Survey of the Government of India for FY 2021–22, the resolution process took an average of 428 days, after omitting the time excluded by NCLT.⁶³ Furthermore, owing to the covid-19 pandemic, the Insolvency and Bankruptcy Board of India on 29 March 2020 issued a notification directing that the period of lockdown imposed by the central government shall not be counted for the purposes of the timeline for any activity in relation to a CIRP.⁶⁴ Despite these recent developments to reduce time frames, the time taken for the completion of a trial in civil and criminal proceedings may be several years.

iii Class actions

The CPC recognises that where there are numerous persons with the same interest in one suit, one or more of such persons may, with the permission of the court, sue or be sued, or may defend such suit on behalf of or for the benefit of all persons interested.⁶⁵

The Companies Act, 1956 and the Companies Act, 2013 stipulate that a specified number of members or depositors may, if they are of the opinion that the management or control of the affairs of a company are being conducted in a manner prejudicial to the interests of the company or its members or depositors, file an application before the NCLT on behalf of the members or depositors.⁶⁶

The Supreme Court and High Courts have, in exercise of their writ jurisdiction, long recognised the ability of an individual or a group of individuals to bring public interest litigations to espouse the cause of larger sections of society.⁶⁷

The Consumer Protection Act, 2019 provides for the establishment of the Central Consumer Protection Authority, which is empowered to, inter alia, regulate matters relating to rights of consumers, and promote, protect and enforce the rights of consumers as a class.⁶⁸ It further provides that a complaint with respect to goods or services, even where there are numerous consumers involved having the same interest, may be filed before a District Commission, with its permission, on behalf of or for the benefit of all interested consumers.⁶⁹ IBC allows allottees under a real estate project to file an application for initiation of CIRP jointly either by not less than 100 allottees or 10 per cent of the allottees under the same real estate project.⁷⁰

The Competition Act, 2002 also recognises class actions for seeking compensation for any loss or damage suffered on account of any anti-competitive practices in the relevant market.⁷¹ Under the Competition Act, 2002, class actions can be filed before the National Company Law Appellate Tribunal (NCLAT).⁷²

iv Representation in proceedings

The Indian Constitution guarantees the right of a person accused of an offence to be represented by a legal practitioner of his or her choice.⁷³ In other proceedings, while litigants are typically represented by advocates enrolled under the Advocates Act 1961, there may be exceptions to the rule. For instance, the Family Courts Act, 1984⁷⁴ stipulates that a party may be represented by an advocate only if the court thinks that it is necessary for a fair trial. This provision of the Family Courts Act has now been challenged before the Rajasthan High Court.⁷⁵ The Advocates Act⁷⁶ empowers a court to permit any person who has not been enrolled as an advocate to appear before it in any particular case.

v Service out of the jurisdiction

The CPC⁷⁷ and the CrPC⁷⁸ contain provisions for service out of the territory of India. India has also entered into bilateral treaties and multilateral conventions for these purposes, including the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters 1965 (the Hague Convention).

Under the CPC, when a defendant resides outside India and no agent in India is empowered to accept service, summons or notice may be sent by courier or post service as approved by the appropriate High Court. This provision must, however, be read together with the procedure prescribed under the Hague Convention.⁷⁹

The CrPC recognises bilateral arrangements and makes compliance with such an arrangement mandatory. It is prescribed that summons or warrants issued by a court in India should be served and executed in accordance with the bilateral arrangement, if any. In addition, the Ministry of Home Affairs in India has, by a circular dated 11 February 2009, clarified the procedure to be followed for the issuance of summons to a foreign resident (MHA Circular). Under the MHA Circular, all requests for service of summons, notices or judicial processes on persons residing abroad shall be addressed to the Under Secretary (Legal) of the Ministry of Home Affairs. The Ministry, after scrutinising the request, can forward it to the relevant foreign officer.

vi Enforcement of foreign judgments

A money decree obtained from a court of a jurisdiction notified by the Indian government as a reciprocating territory under the CPC can be enforced in India directly by filing an execution petition in a court of competent jurisdiction.⁸⁰ As a result, judgments of courts not notified as reciprocating territories or decrees other than money decrees cannot be executed directly in India. A decree holder in such a case may file a fresh lawsuit in the Indian courts based on the foreign judgment. In both execution proceedings and fresh suits filed based on foreign judgments, parties may rely on Sections 13 and 14 of the CPC. In 2020, the central government issued an official gazette declaring the United Arab Emirates (UAE) a reciprocating territory for the purpose of Section 44-A of the CPC. The notification allows civil decrees and judgments passed by the specified courts of the UAE to be directly executed in India in a manner similar to a decree passed by a district court in India.

Section 44 of the Arbitration Act prescribes that a foreign award that arises out of a commercial legal relationship and is made in one of the territories, in respect of which the Indian government declares that the New York Convention on the Recognition and Enforcement of Foreign Awards (New York Convention) applies on satisfaction that reciprocal provisions are being made, may be enforced in India. In this regard, the Arbitration and Conciliation (Amendment) Act, 2015 (2015 Amendment Act) has clarified that a foreign award may be refused enforcement if it violates the public policy of India on the same grounds as described for setting aside awards that arise out of India-seated international commercial arbitrations. However, unlike domestic awards, foreign awards cannot be refused enforcement on the ground of patent illegality.

vii Assistance to foreign courts

Assistance may be given to foreign courts⁸¹ based on bilateral agreements with the reciprocating territories. In civil matters, the CPC provides for the service of foreign summons issued by certain specified courts only. In such cases, assistance is given when a defendant resides or works for gain or carries on trade or business within India and the summons itself may be a summons for the appearance of the defendant, production of documents or furnishing of information.⁸²

Again, as discussed above, India is a signatory to the Hague Convention, key objective whereof is to improve the organisation of mutual judicial assistance by simplifying and expediting procedures.

viii Access to court files

Rules relating to access to court files may vary depending on the nature of the proceeding, who is seeking access and whether the proceeding is ongoing or concluded. In most cases, a person who is a party to the proceeding is allowed to search, inspect or have copies of all pleadings and other documents or records of the case. A third party seeking the information or record is not entitled to access court files as a matter of right and may need to apply to the court and show cause as to why it seeks such information or record.⁸³

ix Litigation funding

Disinterested third-party funding is not common in India. While some courts have found that third-party funding may be permissible,⁸⁴ other courts have often declined to uphold such agreements on the grounds of public policy or professional ethics.⁸⁵ It has been held in a recent Supreme Court judgment that there appear to be no restrictions on a third party funding a litigation and getting repaid after the outcome of the litigation as long as they are not lawyers.⁸⁶

Footnotes:

i Conflicts of interest and Chinese walls

The Bar Council of India Rules (the BCI Rules), notified by the Bar Council of India under the Advocates Act 1961, impose standards on advocates to ensure avoidance of conflicts of interest. These include:

1. a prohibition on appearing for opposite parties in the same matter and from taking instructions from anyone other than the client and the client’s authorised agent;
2. a prohibition on lending to a client, converting funds in the advocate’s hands to a loan, or adjusting fees against personal liability owed by an advocate to the client;
3. a prohibition on bidding for or acquiring an interest in property of actionable claim involved in litigation;
4. a prohibition on appearing in matters where the advocate has a pecuniary interest;
5. a prohibition on becoming a party to stir up or instigate litigation;
6. a prohibition on representing establishments of which the advocate is a member;
7. a prohibition to stand as a surety to the client or certify the soundness of a surety that his or her client requires for the purpose of any legal proceedings;
8. a prohibition on appearing in matters where he or she is a witness;
9. a prohibition to trade or agree to receive any share or interest in any actionable claim;
10. a prohibition to bid in court auction or acquire by way of sale, gift, exchange or any other mode of transfer any property that is the subject matter of proceedings in which he or she is professionally engaged;
11. a prohibition on appearing in matters in which he or she has reason to believe that he or she will be a witness;
12. a prohibition on appearing before relatives who are judges;
13. an obligation to make a full and frank disclosure to a client relating to his or her connection with the parties and any interest in or about the controversy likely to affect his or her client’s judgement in either engaging him or her, or continuing the engagement;
14. an obligation not to disclose information or instructions provided by the client; and
15. an obligation to fearlessly uphold the interests of his or her client by all fair and honourable means.

ii Money laundering, proceeds of crime and funds related to terrorism

While there are no specific obligations on lawyers with respect to money laundering, India has a strong legislative framework, including the Prevention of Money Laundering Act 2002 (PMLA), the Income Tax Act 1961, the Foreign Exchange Management Act 1999, the Foreign Contribution Regulation Act 2010, the Companies Act, 2013, directions of the RBI and Securities and Exchange Board of India guidelines on Anti-Money laundering (AML) Standards and Combating Financing of Terrorism (CFT), which serve to detect and prevent money laundering and the proliferation of the proceeds of crime. The Supreme Court, in a recent judgment,⁸⁷ upheld the constitutionality of various provisions of the PMLA, including Section 24, which departs from the general principle of presumption of innocence and places the burden of proving that the proceeds of crime are untainted property on the accused. The Court also upheld the constitutional validity of Sections 5, 17 and 19 of the PMLA relating to power of attachment, search and seizure by the Enforcement Directorate, and Section 45, which relates to conditions for grant of bail. The Court also held that the Enforcement Case Information Report maintained by the Enforcement Directorate is an internal document and its disclosure is not mandatory.

iii Data protection

The data protection regime in India involves certain provisions of Information Technology Act, 2000 (IT Act), and the rules framed thereunder. The IT Act was amended in 2008 to add Sections 43A and 72A, pertaining to sensitive personal data, and the Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011 (IT Rules) were introduced. These rules define sensitive personal data and information (SPDI)⁸⁸ and prescribe the manner in which SPDI may be collected, processed, transferred, disclosed or stored. The IT Act provides for damages in the event that SPDI is not protected and wrongful loss is caused as a result. The introduction of the IT Rules has affected how lawyers may collect and use SPDI. To the extent that SPDI is collected directly from a data subject, the consent of the data subject is required for the purpose of using the SPDI or the transfer of the SPDI.

For due diligence and onward sharing of data with other law firms and legal process outsourcing companies, the levels of compliance appear higher inasmuch as data sharing agreements usually incorporate the requirements of the IT Rules. Furthermore, when dealing with information of EU citizens, law firms are required to comply with the General Data Protection Regulation (GDPR). However, compliance with the IT Rules by lawyers generally appear to be relatively lax when it comes to collection and use of data in the course of or for the purposes of litigation, especially as damages may be claimed only if wrongful loss can be proved.

Notably, India does not currently have a separate legislation exhaustively dealing with data protection, although a draft legislation is in circulation (see below). In Justice KS Puttaswamy (retd) v. Union of India,⁸⁹ the Supreme Court identified nine types of privacy, including informational privacy, and established informational self-determination; that is, the right of an individual to control its information and determine whether and to what extend it should be disclosed, while giving primacy to individual consent. The Justice B.N. Srikrishna Committee was formed, which recommended a data protection framework suitable for India by extrapolating the European GDPR, OECD Core Privacy Principles and data protection laws of various jurisdictions. Accordingly, on 11 December 2019, the central government presented the Personal Data Protection Bill, 2019 (PDPB), which was tabled in Parliament based on the aforesaid recommendations. On 3 August 2022, the PDPB was withdrawn after deliberation by the Joint Committee of Parliament (JCP) after pushback from many stakeholders over aspects such as requiring data localisation and being too compliance-intensive. A revised bill, the Digital Personal Data Protection Bill, 2022, has been introduced on 18 November 2022 and is currently open for feedback from the public.

In the meantime, the legislature enacted the Criminal Procedure (Identification) Act, 2022 (the Identification Act), repealing the Identification of Prisoners Act, 1920. The Identification Act modernises the framework for collection of data of prisoners by allowing the police officers to collect biological samples and their analysis, behavioural attributes, DNA profiling, among other things, of the convicts and arrestees.⁹⁰ The Identification Act empowers the National Crime Records Bureau to maintain the records of the collected data and allows it to share it with law enforcement agencies.⁹¹

In Karthick Theodre v. Registrar General, Madras High Court,⁹² the Madras High Court held that the right to privacy and, particularly, the right to be forgotten cannot be invoked to seek redaction of names of accused persons who are acquitted from criminal proceedings, as judgments of courts constitute public records. The Court observed that it would be appropriate to await the enactment of a legislation on protection of personal data to lay down an objective standard to enforce a ‘right to erasure’, similar to what has been provided under Article 17 of the GDPR. Similarly, the Gujarat High Court refused a request for removal of a judgment acquitting a person accused of kidnapping and murder, as no specific provisions of law had been violated.⁹³ Nonetheless, the right to mask and prevent disclosure of identity, as a part of the right to privacy, has been recognised in India in the context of highly sensitive cases concerning women and children.⁹⁴ In addition to the statutory prohibitions against the disclosure of the identity of the victim and witnesses,⁹⁵ the aforesaid forms the exception where such a right is applied in the context of judgments delivered by courts.⁹⁶

iv Other areas of interest

In CCI v. State of Mizoram,⁹⁷ the Supreme Court dealt with the scope of the jurisdiction of the Competition Commission of India (CCI) regarding lottery business regulated by the Lotteries (Regulation) Act, 1988 (Lotteries Act). The Court held that any agreement that facilitates a dominant position and its abuse, or adversely affects competition, comes under the purview of the Competition Act, 2002 notwithstanding sectoral regulations,⁹⁸ thereby expanding the jurisdiction of the CCI.⁹⁹ Thus, the pretext of the lottery tickets being res extra commercium and being regulated by the Lotteries Act does not oust the jurisdiction of the CCI when anti-competition elements are present.¹⁰⁰

In Knit Pro International v. State of NCT of Delhi,¹⁰¹ the Supreme Court held that an offence of infringement of copyright under Section 63 of the Copyright Act, 1957 is cognisable and non-bailable in nature. The Court observed that the punishment for an offence under Section 63 of the Copyright Act is ‘imprisonment for a term which shall not be less than six months but which may extend to three years and with fine’.¹⁰² Thus, the maximum punishment that can be imposed would be three years, thereby making an offence under Section 63 of the Copyright Act, 1957 non-bailable and cognisable in nature.¹⁰³

In Devas Multimedia Pvt Ltd v. Antrix Corporation Ltd,¹⁰⁴ the Supreme Court upheld an order of the NCLAT directing winding-up of a company under Section 271(c) of the Companies Act, 2013 on the ground of fraud. While doing so, the Court observed that ‘[i]f the seeds of the commercial relationship between Antrix and Devas were a product of fraud perpetrated by Devas, every part of the plant that grew out of those seeds, such as the Agreement, the disputes, arbitral awards etc., are all infected with the poison of fraud’.¹⁰⁵ It further observed that allowing an entity and its shareholders to reap the benefits of a fraudulent transaction sends a wrong message to the world.¹⁰⁶