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Better to buy than compete?

Whether de-merger is the right solution or resorting to other remedies like compulsory licencing would be viable remains to be seen. However, in this process, one thing the authorities need to keep in mind is that the solution must cure the problem without compromising or disincentivising the innovation.




In the past 15 years, the social networking industry has certainly been one of the fastest-growing industries in the world. A recent study estimated that the global market for mobile social networking stood at 3.2 billion users in the year 2020 and is projected to reach a revised size of 4.9 billion users by 2027, growing at an annual growth rate of 6.5% over next seven years. The numbers depict how deeply personal social networking has penetrated our lives and hence the conduct of these booming service providers has also become more relevant than ever. Other than a host of data privacy concerns raised against these service providers, there have also been recent complaints of antitrust violations being flagged up against them.

Recently, two lawsuits have been filed by the US Federal Trade Commission (“FTC”) & governments of 48 US states and territories, accusing Facebook of eliminating competition by acquiring its competitors and resorting to anticompetitive trade practices. The lawsuit has once again brought the conduct and the present structure of the giant social media company under the scanner. Ian Conner, director of FTC’s Bureau of Competition, has remarked that “Facebook’s actions to entrench and maintain its monopoly deny consumers the benefits of competition. Our aim is to roll back Facebook’s anticompetitive conduct and restore competition so that innovation and free competition can thrive,” This complaint and the statement is particularly interesting as it suggests a significant shift in the United States’ antitrust policy. FTC, which generally follows a non-interventionist approach – unlike the CCI in India and the CMA in the UK, through this complaint seems to have heralded a new era where even the FTC wants to intervene and review the business practices in the digital world.

The FTC’s complaint also resembles very closely to the recent Competition and Markets Authority’s (“CMA”) report on Facebook. Both – the complaint and the report, highlights noteworthy anti-competitive practices adopted by Facebook.


Facebook, formed in February 2004, was one of the first personal social networks to gain significant popularity. In contrast to the limited functionalities of email and messaging, Facebook’s personal social network gained immediate popularity by providing a distinct and richer way for people to maintain personal connections. Generally, personal social networking providers e.g. Twitter, Facebook, Google+, have introduced a unique business model where on one side of the market – the social networking services, there is no monetory price for the services, but on the other side – the digital advertisement, the advertisers are charged heavily and are faced with take it or leave it situation. Facebook too monetizes its businesses by selling advertising that is displayed to users based on the personal data about their lives that Facebook collects. This business model has been highly profitable for Facebook, both in the market of social networking as well as in the display advertising. Advertisers pay billions – nearly $70 billion in 2019 – to display their “specific ads” to “specific audiences”, which is facilitated by Facebook using proprietary algorithms that analyse the vast quantity of user data it collects from its users.


FTC has filed a lawsuit before the District Court of Columbia alleging that Facebook has maintained its monopoly position by buying up companies that present competitive threats and by imposing restrictive policies that unjustifiably hinder actual or potential rivals that Facebook does not or cannot acquire. Facebook’s 2012 acquisition of Instagram for $1 billion and the 2014 acquisition of WhatsApp for $19 billion have been cited as attempts to illegally eliminate competition. Furthermore, the complaint highlights the exclusionary trade conditions imposed by Facebook on third-party applications for using its Application Programming Interfaces (APIs). The case has been filed under S. 2 of the Sherman Act, 15 U.S.C. §2, which the F.T.C imposes through S. 5 of the FTC Act. Section 2 of the Sherman Act penalizes companies for using anti-competitive means to acquire or maintain a monopoly. The suit has been petitioned for a permanent injunction to restrain Facebook from imposing anticompetitive conditions on access to APIs and data, along with a prayer for divestitures of assets, including Instagram and WhatsApp.


Under every antitrust regime, abuse of dominance investigation begins with defining the relevant market. The relevant market is essentially a tool to identify and define the boundaries of competition between firms. In the instant suit, the personal social networking service is defined as the relevant product market along with the United States as the relevant geographical market. Interestingly, an attempt has been made to define the relevant product market as narrowly as possible. Three key elements have been highlighted that make personal social networking services market distinct from the market for other forms of online services:

That the personal social networking services are built on a ‘social graph’ that maps the connections between users and their friends, family, and other personal connections. This social graph forms the foundation upon which users connect and communicate with their connections. Personal social networking providers use this social graph to inform what content they display to users in the shared social space and when.

That the personal social networking services include features that many users regularly employ to interact with personal connections and share their personal experiences in a shared social space, including in a one-tomany “broadcast” format.

That the personal social networking services include features that allow users to find and connect with other users, to make it easier for each user to build and expand their set of personal connections.

Further, the suit has specifically distinguished the market for personal social networking with; the market for specialized social networking services like LinkedIn as these services are designed for and are utilized by a narrow and specialized set of users primarily for sharing a narrow and highly specialized category of content;

the market for online video or audio consumptionfocused services such as YouTube, Spotify, Netflix as users employ these for passive consumption and posting of specific media content (e.g., videos or music) from and to a wide audience of often unknown users. These services are not used primarily to communicate with friends, family, and other personal connections.

the market for mobile messaging services as these do not feature a shared social space in which users can interact, and do not rely upon a social graph that supports users in making connections and sharing experiences with friends and family.


The second step in an ‘abuse of dominance’ investigation is to assess the market strength enjoyed by the enterprise. The strength of an enterprise is usually assessed through a variety of factors. The FTC’s complaint takes under consideration two important factors i.e. market share and entry barrier, to show that Facebook holds a dominant position in the relevant market. The suit alleges that Facebook has maintained a dominant share of more than 60% in the U.S. personal social networking market since the time of establishment, until the present day.

The suit also alleges that Facebook’s dominant position in the U.S. personal social networking market is resilient, due to significant entry barriers, like direct network effects and high switching costs. A strong network effect is a significant entry barrier because the personal social network is generally more valuable to a user when more of that user’s friends and family are already members, and hence a new entrant faces significant difficulties in attracting a sufficient user base to compete with Facebook. Therefore, even an entrant with a “better” product often cannot succeed against the overwhelming network effects enjoyed by a dominant personal social network.

Another significant entry barrier is in form of high switching costs, which means that the users are reluctant to shift to a new service provider because they have already built connections and develop a history of posts and shared experiences, which they would lose by switching to another personal social networking provider. Thus, significant entry barriers in the market facilitate Facebook’s continuing dominance.


FTC has accused Facebook of using its dominance and strength to deter, suppress and neutralise competition by either acquiring its competitors or by imposing anticompetitive conditions that automatically drive its competitors out of the market.

FTC has alleged that due to the strong network effect existing in the digital market, a competing product can only become relevant at moments of social transition, for instance, with the advent of smartphones, there was a significant transition in personal social networking because smartphones were portable and offered integrated digital cameras, making social networking with family and friends through taking, sharing, and commenting on photographs via a mobile app optimized for that activity increasingly popular. However, Facebook was struggling to provide a strong user experience for this kind of personal social activity. It was built and optimized for desktop use, not smartphones, and its performance with sharing photos on mobile devices was weak. Facebook feared that its personal social networking monopoly would be toppled by a mobilefirst, photo-based competitor emerging and gaining traction. It was soon clear that Instagram was just that competitor and thus Facebook decided to buy than to compete. In sum, Facebook’s acquisition and control of Instagram represent the neutralization of a significant threat to Facebook Blue’s personal social networking monopoly and the unlawful maintenance of that monopoly by means other than merits competition.

Similarly, FTC’s complaint throws light on another social transition that started around 2010 in consequence of the increased popularity of smartphones. Consumers shifted from using traditional shortmessage-service (“SMS”) to using text messaging via the internet through overthe-top mobile messaging apps (“OTT Mobile Messaging Services”). At that time, Whatsapp was emerging as an increasingly popular OTT mobile messaging app. As a result, Whatsapp posed a threat to make a move into the personal social networking market. Facebook’s leadership feared that Whatsapp would serve as a path for a serious competitive threat to enter the personal social networking market as a mobile messaging app as it had reached sufficient scale and just by adding additional features and functionalities, it could enter the personal social networking market at competitive scale and undermine or displace Facebook’s social networking monopoly. Therefore, Facebook neutralized yet another threat by acquiring Whatsapp.

This conduct of Facebook deprived users of the benefits of competition from an independent Instagram or Whatsapp, which had the potential to penetrate the U.S personal social networking market. Moreover, Whatsapp’s strong focus on the protection of user privacy and Instagram’s unique functionality could have provided an important form of product differentiation for them to be an independent competitive threat in personal social networking.

The third aspect of the FTC’s complaint stresses on the imposition of unfair trade conditions by Facebook on access to its valuable platform interconnections – APIs, that it makes available to third-party software applications. To communicate with Facebook ((i.e., send data to Facebook, or retrieve data from Facebook) third-party apps must use Facebook APIs. FTC has alleged that for many years, Facebook has made key APIs available to third-party apps only on the condition that they refrain from providing the same core functions that Facebook offers, including Facebook Blue and Facebook Messenger, and also refrain from connecting with or promoting other social networks. These conditions have helped Facebook maintain its monopoly in personal social networking, in two ways:

First, these restrictive conditions have deterred thirdparty apps that relied upon the Facebook ecosystem, from including features and functionalities that might compete with Facebook or from engaging with other firms that compete with Facebook. This deterrence, according to FTC, suppresses the emergence of threats to Facebook’s personal social networking monopoly.

Second, the enforcement of these conditions by terminating access to valuable APIs hinders and prevents promising apps from evolving into competitors that could threaten Facebook’s personal social networking monopoly.


Facebook has responded to these charges in an extensive post calling these lawsuits as revisionist history. Facebook’s defence can be divided into two parts:

On the acquisition of Instagram and Whatsapp, Facebook primarily contends that the FTC which had itself approved the mergers years ago, cannot now retroactively kill those mergers. Moreover, Facebook has pressed on the defence of ‘consumer benefit’. It argues that both the acquisitions have resulted in better products for consumers. Since the merger, Instagram has grown over a billion users worldwide due to improved features and better experiences. Meanwhile, Facebook has enabled Instagram to help millions of businesses engage their customers and grow. Similarly, Facebook made WhatsApp free worldwide, adding valuable new features like voice and video calling, and making it more secure by encrypting it end-to-end.

On the accusation about the imposition of anti-competitive conditions, Facebook maintains that it had created this platform for innovation on which millions of developers have created new apps, but there are certain thirdparty apps which unfairly duplicate services already being provided by Facebook. The objective behind the imposition of such conditions is to only avoid the use of Facebook’s platform to essentially replicate Facebook. Moreover, these restrictions are standard in the industry, where platforms give restricted access to other developers, while many do not provide access at all, but all of this is only to prevent duplication of core functions.


The FTC’s lawsuit has attracted a lot of academic discussion on powers of antitrust authorities globally to kill mergers retroactively, which they once approved. Under the US Antitrust regime, the Hart-Scott-Rodino Act provides a mechanism for agency review of and preconsummation challenges to reported mergers through a challenge under S. 7 of the Clayton Act. Moreover, nothing in the statute prohibits the agencies from challenging a reported merger at some later stage, including after merger review, merger clearance, and merger consummation. In fact, Section 7(A)(i) of the Hart-Scott-Rodino Act states that any action under this section shall not bar any proceeding or any action with respect to such acquisition at any time under any other section of this Act or any other provision of law. Thus, by the express terms of Section 7(A)(i), the fact that the agencies reviewed and cleared a reported merger does not preclude the agencies from challenging the transaction at a later date.

This problem is more complex under the Indian competition regime as there is nothing like Section 7(A)(i) under the Indian Competition Act. Moreover, under the Indian merger control regime, the transaction which meet the jurisdictional threshold provided under Section 5 constitues a combination and requires the approval of the CCI, while the trasnations which do not neet the threshold limits of S. do not require prior approval. The Indian problem can be analysed in three parts; first, whether the CCI can hear an ex-post challenge to a previously approved combination; second, whether the CCI can hear an ex-post challenge to an unnotified transaction; and third, whether the CCI has the power to grant a structural remedy in terms of causing the breakup of the merged firm or divestiture of the assets of the enterprise. In cases of previously approved mergers, the statute gives a categorical power to the CCI to conduct an expost review of such a merger. Under S. 20(1), Commission can inquire into whether a notified combination under S. 5 has caused or is likely to cause an appreciable adverse effect on competition in India. However, the proviso restricts such review only up to one year of consummation. The question then arises is whether the commission can hear an ex-post challenge after a year of consummation? The answer may lie in S. 3(1) of the Act since the provision specifically includes an acquisition agreement. Therefore, even after a year of consummation, nothing precludes the CCI from conducting an ex-post facto analysis of the acquisition agreement under Section 3. Needless to say, it has to be shown that such trasncation has caused AAEC in the marketSimilarly, for unnotified mergers, since no provision restricts an ex-post review, the CCI has valid powers under S. 3(1) to check the anti-competitive effect of such agreement at any point of time. In India, the problem with the FacebookInstagram-Whatsapp acquisition was that it was never notified as it didn’t fall under the threshold limit and therefore the commission couldn’t even conduct an ex-ante review. However, looking at the wide powers under S. 3(1), the commission today may certainly look at the acquisition agreements in light of the factors under S. 19(3) and pass necessary orders.

On the question of powers of the commission to break up the enterprises, S. 27 and S. 28 of the Indian Competition Act gives the commission vide enforcement powers to remedy the distorted competition in the market. S. 28 empowers the commission to direct division of an enterprise enjoying a dominant position to ensure that such an enterprise doesn’t abuse its dominant position. Moreover, S. 27(g) empowers the commission to pass any order or issue any direction to remedy the abuse of dominance. Thus, by using these unequivocal powers given to it by the statute, CCI can impose structural remedies on already consummated mergers, causing the breakup of the merged firm or divestiture of some of the acquired assets.


It is one thing to see if the antitrust authorities theoretically possess the power to divest assets of a firm, and totally another thing to see if the antitrust authorities would use such power to demerge an enterprise. Despite the antitrust authorities’ ability to challenge reviewed and cleared mergers after the fact and the pro-competitive benefits of such ex-post challenges, the cases of such demergers are extremely rare. That’s the reason why the Competition and Markets Authority (“CMA”), even after finding tech giants abusing their dominance, didn’t take the responsibility of breaking them up. Technical experts have also vehemently argued against breaking up these tech giants as demergers might be counter-productive. Facebook has spent years integrating Instagram and WhatsApp: weaving their ad systems, user profiles, databases and other technology with Facebook. What to the public appear as distinct products are one giant social network on the back end. Therefore, the problem might not be solved only at the grant of prayer for demerger, the Courts would have to play a pivotal role in facilitating such de-merger, keeping in mind the importance of the tech-giant for the US economy. A famous line by an economist is worth keeping in mind, “it is dangerous to apply twentiethcentury economic intuitions to twenty-first-century economic problems”. Whether de-merger is the right solution or resorting to other remedies like compulsory licencing would be viable remains to be seen. However, in this process, one thing the authorities need to keep in mind is that the solution must cure the problem without compromising or disincentivising the innovation. It would be interesting to see how the court goes about developing the remedy package if it holds Facebook abusive of its dominant position.

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Legally Speaking

Disproportionate assets case: Delhi High Court stays Lokpal proceedings initiated against Jharkhand Mukti Morcha chief Shibu Soren



Disproportionate assets case: Delhi High Court stays Lokpal proceedings initiated against Jharkhand Mukti Morcha chief Shibu Soren

On Monday, the Delhi High Court has stayed the proceedings initiated by Lokpal of India under the provisions of the Lokpal & Lokayuktas Act, 2013 against Jharkhand Mukti Morcha (JMM) Chief and Rajya Sabha MP Shibu Soren in connection with a disproportionate case of assets.

The bench comprising of Justice Yashwant Varma observed and has passed an order on Soren’s plea challenging the validity of the said proceedings, claiming that the same was ex facie bad in law and without jurisdiction.

In the present case, the proceedings were initiated by Lokpal of India pursuant to a complaint dated August 5, 2020 filed by BJP’s Nishikant Dubey. Therefore, it has been directed by the CBI to make a preliminary enquiry into the Complaint under section 20(1)(a) of the Lokpal and Lokayuktas Act, 2013. It was claimed by Soren that the said order was not served on him.

While claiming the complaint was false, frivolous and vexatious, Soren in his plea submitted that according to section 53 of the Act and there is a statutory bar against the Lokpal of India assuming jurisdiction to investigate or inquire into any Complaint made after the expiry of seven years from the offence alleged.

The plea reads that the initiation of the proceedings under the Complaint, or at the very least, continuation thereof, once it has been demonstrated by the preliminary inquiry that it pertains to alleged acquisitions prior to the 7-year period and is clearly barred by statute, without jurisdiction and the same is liable to be quashed.

Further, the petition filled submits that the maximum period of 180 days for completion of preliminary enquiry from the date of Complaint expired on February 1, 2021. In this backdrop, it has been stated that by this time, only on July 1, 2021, the comments were sought from Soren which is beyond the prescribed statutory period.

The plea adds that the final preliminary enquiry report was submitted by the CBI on 29.06.2022, about a year and a half after expiry of the 180- day period. Such purported report is void and null and non-est in the eyes of law and cannot be received or considered by the Respondent No.1.

Thus, the court took note of the order passed by Lokpal of India dated August 4, 2022 directing that proceedings under section 20(3) of the Lokpal Act be initiated to determine whether a prima facie case existed to be proceeded against Soren. It is Soren’s case that the order was passed without considering the preliminary objection on jurisdiction being raised by him.

In the said order, the court noted that all the Lokpal of India recorded was that the comments received from the petitioner were forwarded to CBI so as to examine and submit an enquiry report.

It was ordered by the court that the challenge to assumption of jurisdiction by respondent no. 1 (the Lokpal of India) has neither been answered and nor dealt with. Matters require consideration. Subsequently, there will be a stay of proceedings pending before the Lokayukta.

Accordingly, the court will now hear the matter on 14 December.

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The Delhi High Court in the case Narender @ Lala v. State Of NCT Of Delhi observed and has set aside the orders of conviction for murder and sentence of life imprisonment awarded to a man in 2018 who was unrepresented by a lawyer before the Trial Court. Thus, the Delhi High Court has remanded the case back to the Trial Court for cross examination of certain prosecution witnesses.

The division bench comprising of Justice Mukta Gupta and Justice Anish Dayal observed and was of the view that there had been a grave miscarriage of justice to the man as when number of witnesses were examined, he was not represented by a counsel and that the legal aid counsel, who was present before Trial Court and was appointed on the same day and asked to cross- examine the witnesses on the same day.

On March, 2018, Narender was convicted for offence of murder punishable under section 302 of Indian Penal Code, 1860. On 4th May, 2018, he was sentenced by the Trial Court for life imprisonment and also to pay a fine of Rs. 10,000.

In the present case, the case of the prosecution was that the man had committed murder of his wife by strangulating her to death.

In a appeal, it was argued by the man that during the substantial course of trial, he was not represented by a lawyer and hence the trial in the absence of a lawyer had seriously prejudiced him. He thus sought recalling of all the prosecution witnesses and thereby ensuring a fair trial.

The Court observed that the manner in which the trial is conducted, there was a serious denial of fair trial to the appellant and the appellant is required to be given an opportunity to cross-examine the witnesses i.e., the witnesses examined in the absence of the lawyer, or the lawyer having been appointed on the same day from the legal aid and is asked to cross-examine the witnesses.

Further, the court remanded the back to Trial Court for cross-examination of ten prosecution witnesses. Also, the court directed the Trial Court Judge to follow due process of law and also to record the statement of the man under Section 313 CrPC and permit leading the defence evidence if so required.

The Court ordered that the case be listed before the learned Trial Court on 26th September, when Superintendent Tihar Jail will product the appellant before the learned Trial Court and the learned Trial Court is requested to expedite the trial and conclude the same preferably within four months.

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The Supreme Court in the case Dr. B.R. Ambedkar Educational And Cultural Trust v. Hon’ble High Court Jharkhand And Ors. observed and has refused to entertain a plea challenging the non-inclusion of reservation for Scheduled Castes, Scheduled Tribes and Other Backward Classes communities in the process of appointment of District Judges in pursuant to an advertisement issued in March, 2022 by the High Court of Jharkhand. The present petition claimed that the exclusion of reservation violates Jharkhand State Reservation Policy and constitutional guarantee under Article 16(4). Apart from this, it is also in derogation of a resolution being passed by the High Court vouching to implement reservation in the Jharkhand Superior Judicial Service.

The bench comprising of Justice D.Y. Chandrachud and the Justice Hima Kohli observed and has granted liberty to the petitioner to file a petition under Article 226 of the Constitution before the Jharkhand High Court.

The court while considering that the process of appointment as per the concerned notification is underway, Justice Chandrachud asked the petitioner to approach the High Court with respect to future appointments.

It stated that “For the future you can file a petition before the High Court… We will give you liberty to approach the High Court under Article 226 of the Constitution.”

The bench of Justice Chandrachud observed that the Decisions of the Administrative side of the High Court can be challenged before the judicial side of the High Court. You can move the High Court.

In the present case, a writ petition challenging a similar notification was filed in 2017 before the High Court, which was eventually dismissed. It was observed by the High Court that there is no duty vested in the authorities to reserve seats for all posts, more particularly in higher judiciary. Moreover, it had already initiated the appointment process, the High Court opined that it cannot alter the rules midway. Thus, the appeal filed before the Apex Court was also dismissed.

However, in 2018 the Full Court of the Jharkhand High Court had agreed in principle to grant reservation in the recruitment for Jharkhand Superior Judicial Service. The advocates belonging to the SC/ST/OBC communities in 2021 had made representations to the Chief Justice of the High Court requesting for the implementation of the Reservation policy in appointment of District Judges (direct entry from Bar)/ superior judicial service. The impugned notification was issued without incorporating reservation for SC/ST/OBC communities in March 2022.

Mr. Arvind Gupta, Advocate on Record has filled the present petition.

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Right to contest election is not a fundamental right; it is only a right conferred by statute: Supreme Court



Don’t compare Turban, Kirpan with Hijab: SC

The Supreme Court in the case Vishwanath Pratap Singh vs Election Commission of India observed that the right to contest an election is not a fundamental right but only a right conferred by a statute.

The bench comprising of Justice Hemant Gupta and the Justice Sudhanshu Dhulia observed while dismissing a Special Leave Petition filed by Vishwanath Pratap Singh that an individual cannot claim that he has a right to contest election and the said stipulation violates his fundamental right, so as is required under the Act, to file his nomination without any proposer.

Also, the court imposed a cost of Rupees one lakh on Singh.

In the present case, Singh had first approached the Delhi High Court challenging a notification issued by Election Commission of India for election to Rajya Sabha after he was not allowed to file his nomination without a proper proposer being proposing his name. His contentions were rejected by the High Court that his fundamental right of free speech and expression and right to personal liberty has been infringed.

While dismissing the SLP, the Apex Court observed that the writ petition before the High Court was entirely misconceived.

The bench observed while referring to earlier judgments viz Javed v. State of Haryana, (2003) 8 SCC 369 and Rajbala v. State of Haryana (2016) 2 SCC 445 wherein it was stated that the right to contest an election is neither a fundamental right nor a common law right. It is a right conferred by a statute.

However, the Supreme Court in Javed (supra) had made the following observations: Right to contest an election is neither a fundamental right nor a common law right and it is a right conferred by a statute. At the most, in view of Part IX having been added in the Constitution of India that a right to contest election for an office in Panchayat may be said to be a constitutional right and a right originating in the Constitution and given shape by a statute. But even if, it cannot be equated with a fundamental right. It is stated that there is nothing wrong in the same statute which confers the right to contest an election also to provide for the necessary qualifications without which a person cannot offer his candidature for an elective office and also to provide for disqualifications which would disable a person from contesting for, or from holding, an elective statutory office.

It was held in Rajbala (supra) that the right to contest for a seat in either of the two bodies is subject to certain constitutional restrictions and could be restricted further only by a law which the parliament made.

Further, the court added that Singh did not have any right to contest election to the Rajya Sabha in terms of the law made by the Parliament.

The Court stated while dismissing the SLP that the Representation of People Act, 1950 read with the Conduct of Elections Rules, 1961 has contemplated the name of a candidate to be proposed while filling the nomination form. However, it cannot be claimed by an individual that he has a right to contest election and the said stipulation violates his fundamental right, so as to file his nomination without any proposer as is required under the Act.

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Post-conviction compounding of offences is permissible: Himachal Pradesh High Court



The Himachal Pradesh High Court in the case Shri Kantu Ram v Shri Beer Singh recently observed that a court, while exercising powers under Section 147 of the Negotiable Instruments Act and can proceed to compound the offences even after recording of conviction by the courts below.

The bench comprising of Justice Sandeep Sharma observed in a case where the revision Petitioner, who was convicted under Section 138 of the NI Act by the Magistrate Court and was aggrieved by subsequent dismissal of appeal by the Sessions Court and had agreed to pay the amount due and settle the matter.

Thus, the petitioner had sought compounding of offences.

In the present case, the respondent admitted the factum with regard to receipt of the amount due from the accused and expressed that the prayer made on behalf of accused for compounding of offence can be accepted.

However, the High Court allowed the prayer and the offence committed by the Petitioner under Section 138 NI Act was ordered to be compounded.

The Court observed that the Reliance was placed on Damodar S. Prabhu V. Sayed Babalal H. (2010) 5 SCC 663, wherein the Apex Court has categorically held that court, while exercising power under Section 147 of the NI Act and can proceed to compound the offence even after recording of the conviction by the courts below.

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‘Pensionary benefits to employee, who is removed from service for misconduct, is not at par with those who retire on superannuation’



The Jammu and Kashmir and Ladakh High Court in the case Bashir Ahmad Wani v Jammu and Kashmir Grameen Bank and Another recently observed and stated that an employee who is removed from service for misconduct is not at par with those who is being retired on superannuation.

The bench comprising of Justice Sanjeev Kumar observed while dismissing the pension claim made by a former employee of the J&K Grameen Bank, who was removed from service in 2011.

In the present case, the petitioner had sought benefit of the J&K Grameen Bank (Employees) Pension Regulations, 2018 whereby provision was made for terminal benefits.

However, the court disallowed the claims on two grounds:

Firstly, that at the time of removal of the petitioner from service when there were no norms, rules or regulations providing for the benefit of pension to the employees of the respondent-Bank.

In the year 2011, the employees of the respondent-Bank were governed by the J&K Grameen Bank ( the Officers and Employees) Service Regulations, 2010… it is abundantly clear that it does not prescribe imposition of a penalty of removal along with the pensionary benefits.

Secondly, it was opined by the court that though the 2018 Regulations had been made applicable to those employees who were in service between 1st day of September, 1987 and 31st day of March, 2010 and the employees retired from the services of the Bank before 31st day of March, 2018, however, this leeway cannot come to aid of the Petitioner.

The Curt observed that the reason for finding that the Petitioner was not an employee who had “retired” on superannuation from the bank. Rather, he was “removed” for misconduct.

The Court stated that the regulations apply to those employees who retired from the service of the Bank before 31.03.2018 and not the employees who were terminated for misconduct. Viewed thus, the order of removal of the petitioner dated 02.09.2011 holding the petitioner entitled to terminable benefits and cannot, by any stretch of reasoning, be construed to be an order of removal with the benefit of the pension. Neither, the petitioner, at the time of his removal from service, nor with the promulgation of Pension Regulations of 2018, is entitled to the benefit of pension.

Accordingly, the court dismissed the petition.

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