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Ironing out the conundrum between correction and modification of an arbitral award in India

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Introduction
To begin with the article, I want to first highlight that arbitration in India has grown manyfold due to legislative intent and much needed amendments coupled with various judicial pronouncements of the Supreme Court (SC) and High Courts (HC) for the betterment of making India an international hub for arbitration which gives confidence to the international business community to resolve the disputes via arbitration in India only with the exemplification of least judicial intervention in matters related to arbitration but the effort goes in vain when Karnataka High court upheld the judgment of the city civil court, Bangalore where the court permitted modification of an arbitral award under section 33 of the Arbitration & conciliation act, 1996 (Arbitration act) and surprisingly the Hon’ble Karnataka HC upheld the judgment when the matter reached the apex court with utter dissatisfaction the SC held that the modification of an arbitral award is not permitted under section 33 of the Arbitration Act and the arbitrator doesn’t have any power specifically related to this matter in Gyan Arya v. Titan industries Ltd. So I’ll mention the conundrum still prevalent among arbitrators and subordinate courts and how the supreme court of India ironed out this conundrum and cleared the mist concerning correction and modification of an arbitral award under sections 33 & 34 of the Arbitration act of 1996 on different occasions to avoid conflicting rulings and bring forth the clarified position for a win-win situation in Indian arbitration jurisprudence so far regarding this.
According to section 33 of the arbitration act, a party with notice to other parties to a dispute may request arbitral tribunal for any clerical and an arithmetical error within 30 days after receipt of the award, and also if mutually agreed they may seek an interpretation on a specific point of an award like I said about the procedural aspect about correction, modification, and interpretation about arbitral award it begins after the tribunal passed the award within 30 days or pre-decided by the respective parties on several days also the party, with notice to the other party, may request the arbitral tribunal to correct any additional errors, any ecclesiastical or typographical errors or any other errors of a similar nature occurring in the award as there are certain limitations regarding the interplay of modification and a corrected added award as section 34 appeal provisions also emanates into the show with the application of section 33 and clarification of SC in this regard recently.

Modification of an Arbitral Award
So modification of an Arbitration award sounds very similar to the correction, interpretation of an arbitral award but the reality is the legislative and legal means are way different in terms of implications as well as implementation especially when subjected to judicial scrutiny as the technicalities such as claim volume change or adding up of an additional claim or removing or similar changes of same nature and there is a Lakshman Rekha for arbitrators conduct between section 33 & 34 and time after again judicial pronouncements cleared the fog around this like just a couple of days ago the apex court reiterated that modification of arbitral award permitted only up to mathematical and calculations errors or mistakes of similar nature not beyond that if subjected to section 33 in an appeal came from Karnataka high court related to gold quantity.
Pertinent to mention the power of the court is in real dilemma dealing with an application to set aside the arbitral award under section 34 of the arbitration act of 1996 especially when it got mixed with modification of awards from district courts particularly in claimed quantity, volume, and other important stuff which are not supposed to be modified either under section 34 or section 33 of the arbitration act i.e., Correction & modification, so on similar footing we can expect section 33 must have absolute restrictions attached to the same.
The plain reading of Section 34 of the Act (“Section 34”) stipulates that the power of the Courts is limited to setting aside the arbitral awards, strictly in terms of the specific grounds enshrined therein. However, there are several judgments wherein the Courts have not only set aside but also modified arbitral awards while dealing with petitions filed under Section 34 which makes it understandable that section 33 corrections are different than modification, noticeable modification of an arbitral award vest with judiciary under certain circumstances after passing of the award the power of modification and adding up will shrink to a greater extent so whether Courts can modify arbitral awards while dealing with petitions under Section 34 and highlights certain relevant judgments given by various Courts regarding this issue for better understanding of modification of an arbitral award under sec 34 & interplay with sec 33, consequently, a dilemma occurs because of these windy clouds on concerning issues related to Indian arbitration jurisprudence although apex court regularly ironing out such conundrums to make our country an arbitration-friendly jurisdiction globally also satisfying the legislative intent of the legislation.

Crossing the Lakshman Rekha of Modification in Garb of Correction of an Arbitral Award

Due to the lack of a settled position of law and jurisprudence in this regard quite often inconsistent variations occur among different fora’s and court of law between correction under section 33 of the act which shall be used only for arithmetical and clerical errors in the award with notice to other party and section 34 which deals with appeal provisions to set aside arbitral award undergrounds enumerated in this section especially public policy like in garb of correction of a clerical error in an award the arbitrator went on to change claimed quantity & assets under section 33 of the act and similarly under section 34 of the act courts decides the merit of the award then made few modifications under 34 which itself is not permissible and finally the supreme court of India in 2021 pronounced two path-breaking judgments NHAI V. M.HAKEEM and GYAN ARYA V. TITAN INDUSTRIES LTD. related to ironing out the conundrum of correction and modification of award which surely clear some mist onwards on the concerned issue and do justice to the legislative intent of the act for least judicial intervention.
Tracing some background history in this regard the arbitration act of 1940 under section 15 & 16 provided powers for modification of award despite setting aside to Indian courts later got amended as this was against the basic spirit of arbitration and least judicial intervention and this amendment based on UNCITRAL model law for International Commercial Arbitration isolates the judicial appellate process from the practice of arbitration and neither does empower courts to modify award unless the law of land provided for the same, setting aside an award under section 34 of the act is restricted with few specific conditions as per the needs of international commercial disputes resolution scenario but modification part left undealt under this head, therefore it shows that parliament doesn’t want to provide any modification power of an arbitral award to safeguard autonomy and precious time of courts in a burdened judicial system but time and again the judicial precedents exhibited conflicting and non-uniform views which led to the crossing of correction and modification Lakshman Rekha in the Indian landscape.

Conflicting Judicial Precedents
In the past different courts endorsed inconsistent and differing approaches to modify and correction of awards to a greater extent until the NHAI v. M. HAKEEM judgment came on July 20, 2021, where SC held that the court cannot modify an award under section 34 as there are limited grounds to set aside an award and an doesn’t act as an appellate method also SC declined to modify the payment of compensation awarded under NHAI act despite it is extremely low for the land acquisition this provides much-needed clarity on this aspect before this the precedents created an unwanted conundrum in this regard.
In McDermott International v. Burn Standard Co. Ltd. Hon’ble SC held that courts cannot modify an arbitral award as it only has supervisory power to ensure fairness in arbitration, jurisdiction issue must be raised before the arbitral tribunal rather than the court so the court said we cannot modify the award we can only set aside it under section 34 although SC put up an interesting perspective to re arbitrate if the parties wanted so to cater the mistakes did by parties and tribunal in the past, slightly thinking it opened up a small room for a possible dilemma regarding modification issue as lastly, Apex court went on to modify the award under Article 142 in the garb of doing complete justice also it is better not to forget it cleared the mist to some extent in 2006.
In another landmark judgment Hindustan Zinc Ltd. V. Friends Coal Carbonisation delivered by the supreme court of India in 2006 after reiterating its stance in McDermott they unexpectedly upheld the modification of an award in a plea of section 34 to set aside the award by the trial court which is a dent in itself to the principle of least judicial intervention and an add on to the non-uniform position in this regard.
In a regressive step for the Indian arbitration landscape and a dent to bit improved image of the judiciary after they delivered a few pro arbitrations centric judgments during that period, it was a step back as in ONGC Ltd. V. Western Geco International Ltd. Court proceeded with modification of subject matter of an arbitral award under section 34 they had the option to set aside the award but to baffle public policy doctrine they modified the subject matter of award which violated section 5 arbitration act, 1996 doctrine of least judicial intervention in arbitration space, Hon’ble SC mentioned that if the tribunal inferred “wrong facts during proceedings then the award can be modified or cast away” which was fair to a certain extent but modification is certainly not the best choice regarding this.
In Vedanta Ltd. v. Shenzhen Shandong nuclear power construction Co. Ltd. supreme court of India in 2018 enumerated the parameters to award interest in international commercial arbitrations due to lack of consensus in awarding interest as well as the inconsistent approach of tribunals in doing so consequently the court made few modifications on account of interest part in the concerned international commercial arbitration respecting parameters and guidelines provided by Justice Indu Malhotra back then but modification and correction stigma continued which must not be the ideal practice, to be honest.
In Kinnari Mullick v. Ghanshyam Das Damani supreme court pronounced a very important judgment which said that after setting aside an arbitration award under section 34(4) courts are not empowered to transfer the parties before the arbitration tribunal especially Suo moto also added that restricted discretion is vested with courts if only written application made for the same by the parties, majorly it denied the power of modifications exercised by courts in various instances.
Similarly, in Radha Chemicals v. Union of India 2018, Hon’ble SC reiterated the same instance as mentioned in kinnari Mullick by the hon’ble court held that courts are not vested with the power to remand back the matter to the arbitration tribunal once the award is dispatched by the tribunal on the face of a petition under section 34 of the arbitration act such judgments cleared the instance of least judicial intervention and helped towards ironing out the conundrum in a limited manner.
In Gayatri Balaswamy v. ISG Nova soft technologies Ltd., Madras HC again took an ambiguous non-linear position when it comes to modification of award, the court said that under section 34 of the arbitration act modification power is inherent when the concerned matter reached SC, it found the observation of madras HC flawed and mistaken still in the garb of heaviest sword article 142 court allowed the modification to a greater extent.

Supreme Court of India Ironed Out the Conundrum
So, as I mentioned the dilemma and inconsistent approach of high courts and the supreme court on different occasions related to this conundrum of modification, correction, and the intricacies involved in section 34 of the act, to settle the dust and mist around the issue in 2021 SC pronounced 2 important judgments which according to me will iron out these confusing stances and shall provide a constant and uniform approach in India to make India an arbitration-friendly jurisdiction in a real sense although the courts can modify the award under article 142 of Indian constitution in the garb of doing complete jurisdiction these two precedents will benefit the arbitration jurisprudence of India.
1st is Project director, NHAI v. M. Hakeem where the supreme court held that courts do not have any power to modify the arbitral award under section 34 of the Arbitration act, 19996 and as section 34 of the act is based on UNCITRAL model law on international commercial arbitration, 1985 under which no modification power was provided under section 34 courts can set aside the award completely or in part but modification is not the ideal way to proceed , court also discussed power to adjourn the proceedings under section 34(4) so the arbitration tribunal can treat the defects in a fair and just manner as tribunal can eliminate grounds for setting aside the award this judgment welcomed largely by the practitioners of arbitrations and the commentators in the same subject or practice area as this cleared the space which was earlier complicated by different high courts hopefully the relevant course, judicial orders, and relevant amendments to the post-award mechanism become more synthesized and effective onwards.
2nd one is in Gyan Prakash Arya V. titan industries Ltd. This is one of the most important and recent cases decided on the issue of the conundrum of modifications and corrections under section 33 of the act as the learned arbitrator modified the award in name of correction and interpretation under section 33 so the aggrieved appellant after facing a setback under section 34 for setting aside this award on account of modification which is not permitted under section 33 consequently, went to the Karnataka high court against this under section 37 of the act but surprisingly the high court upheld the judgment of Bangalore city civil court rendering the modification of award under section 33 as Valid and sustaining with no option left the appellant knocked on the door of the apex court where the bench decided with utter dissatisfaction from both subordinate courts that no modification of an award is permitted under section 33 of the act until and unless there is an arithmetical or clerical error in the award and constitutional courts shouldn’t interfere with the basic spirit of arbitration legislation of least judicial intervention and to contribute for improving India’s image as a preferred seat for International Arbitration around the world and eradicating such sorry affairs of the state in Indian Arbitration Landscape.

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Legally Speaking

Supreme Court holds off on decision in Baba Ramdev contempt case

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6 months ago

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May 15, 2024

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The Supreme Court has deferred its decision on a contempt notice issued against yoga guru Ramdev, his associate Balkrishna, and their company Patanjali Ayurved in connection with a case involving misleading advertisements. The bench, comprising Justices Hima Kohli and Ahsanuddin Amanullah, stated, “Orders on the contempt notice issued to respondents 5 to 7 (Patanjali Ayurved Ltd, Balkrishna, and Ramdev) are reserved.” The Uttarakhand State Licensing Authority (SLA) informed the court that manufacturing licenses for 14 products of Patanjali Ayurved Ltd and Divya Pharmacy have been suspended immediately. The Supreme Court noted that the counsel representing the firm had requested time to submit an affidavit detailing the actions taken to retract the advertisements of Patanjali products and to recall the medicines.

Highlighting the importance of public awareness and responsible influence, the court emphasized that Baba Ramdev wields significant influence and should employ it responsibly. It awaits an affidavit from Patanjali outlining the measures implemented to withdraw the existing misleading advertisements of the company’s products, with instructions for submission within three weeks.

During the proceedings, Indian Medical Association (IMA) President R V Asokan extended an unconditional apology to the bench for remarks made against the top court in a recent interview with news agency PTI. Justice Kohli conveyed to Asokan that public figures cannot criticize the court in media interviews. However, the court indicated its disinclination to accept the apology affidavit submitted by the IMA president at present. In an earlier hearing on May 7, the apex court had denounced Asokan’s statements as “very, very unacceptable.” The court reiterated its stance that celebrities and social media influencers are equally liable for the products they endorse, warning that if such products are found to be misleading, they could face repercussions.

The case stems from a plea filed in 2022 by the IMA alleging a smear campaign by Patanjali against the Covid-19 vaccination drive and modern medical systems. As the legal proceedings unfold, the Supreme Court continues to emphasize the importance of accountability and responsible conduct in advertising and public discourse. The case underscores the need for stringent regulations to curb misleading advertisements and ensure consumer protection. With the demand for transparency and ethical practices on the rise, the judiciary plays a pivotal role in upholding standards of integrity in commercial communications.

As the court awaits the submission of the affidavit from Patanjali, stakeholders across industries are keenly observing the developments, anticipating their implications on advertising practices and regulatory enforcement in the country.

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Tech

Australia fights Musk’s platform over control of online content

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7 months ago

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May 11, 2024

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In a courtroom battle that underscores the complex interplay between global tech giants and national regulatory frameworks, Elon Musk’s X, formerly known as Twitter, finds itself at odds with Australian law over the removal of graphic content depicting a terrorist attack.

At the heart of the dispute lies a fundamental question: to what extent should a platform like X be compelled to adhere to the laws of a specific country when it comes to content moderation? The legal showdown commenced as the eSafety Commissioner of Australia sought the removal of 65 posts showcasing a harrowing video of an Assyrian Christian bishop being stabbed during a sermon in Sydney, classified as a terrorist incident by authorities.

Tim Begbie, representing the cyber regulator, argued that while X has policies in place to remove harmful content, it cannot claim unilateral authority to decide what is acceptable under Australian law. He contended that X’s resistance to globally removing the posts challenges the notion of reasonableness within the scope of Australia’s Online Safety Act.

X’s stance, guided by its mission to uphold free speech, underscores a broader philosophical debate surrounding the jurisdictional reach of national laws in the digital realm. The company maintains that while it has blocked access to the posts for Australian users, it refuses to implement global removal, asserting that the internet should not be governed by the laws of a single nation.

However, Begbie argued that geo-blocking, the solution proposed by X, is ineffective due to the widespread use of virtual private networks (VPNs) by a significant portion of the Australian population.

Amidst the legal wrangling, X’s lawyer, Bret Walker, contended that the company had taken reasonable steps to comply with Australian laws while balancing the principles of free expression. He emphasized the importance of allowing global access to newsworthy content, cautioning against the suppression of information on a global scale. The implications of such an approach, he argued, extend beyond Australia’s borders, potentially setting a precedent for censorship on a global scale.

As the case unfolds in the Federal Court, Judge Geoffrey Kennett has issued a temporary takedown order for the posts, extending it until June 10 pending a final decision. The outcome of this legal battle is poised to have far-reaching implications, not only for the regulation of online content in Australia but also for the broader discourse surrounding internet governance and free speech in the digital age.

Beyond the legal arguments, the case underscores the evolving dynamics between tech platforms and regulatory authorities, highlighting the challenges of reconciling competing interests in an increasingly interconnected world. With the proliferation of digital platforms and the rise of social media, questions surrounding content moderation, censorship, and the balance between freedom of expression and societal harm have come to the forefront of public discourse.

In the digital era, where information knows no borders and online platforms wield immense influence over public discourse, the case of X versus Australian law serves as a microcosm of the broader tensions between technology, governance, and individual rights. As societies grapple with the complexities of the digital age, the need for robust legal frameworks, ethical guidelines, and international cooperation becomes ever more apparent.

As the legal battle between X and Australian authorities unfolds, it underscores the intricate relationship between technology, law, and societal norms in the digital age. At stake is not just the removal of graphic content depicting a heinous act but also the broader principles of free speech, censorship, and the jurisdictional reach of national regulations in a globalized world.

The outcome of this case carries significant implications for the future of online content moderation and regulation. On one hand, proponents of free speech argue that platforms like X should have the autonomy to determine their content policies without being unduly influenced by the laws of individual countries. They contend that a global approach to content moderation ensures consistency and prevents the fragmentation of the internet along national lines.

On the other hand, proponents of regulation argue that national laws play a crucial role in safeguarding citizens from harmful content and upholding community standards. They assert that while platforms may operate globally, they must abide by the laws of the countries in which they operate, particularly when it comes to content that poses a threat to public safety or incites violence.

Amidst these competing interests, the case highlights the need for a nuanced approach to content moderation that balances the principles of free speech with the protection of users from harm. It also underscores the importance of international cooperation and dialogue in addressing cross-border challenges in the digital realm.

Beyond the legal realm, the case has broader implications for the future of internet governance and the regulation of online platforms. As technology continues to evolve at a rapid pace, policymakers around the world face the daunting task of crafting regulations that are effective, enforceable, and adaptable to the ever-changing digital landscape.

Moreover, the case raises important questions about the role of tech companies in shaping public discourse and influencing democratic processes. With social media platforms serving as key channels for information dissemination and political engagement, the decisions made by companies like X have far-reaching consequences for the functioning of democratic societies.

Ultimately, the resolution of this case will have significant implications not only for X and its users but also for the broader digital ecosystem. It will shape the future trajectory of online content moderation, influence regulatory approaches to technology platforms, and set precedents for how governments and tech companies interact in the digital age.

As the legal proceedings continue, stakeholders from across sectors will closely monitor developments, recognizing that the outcome of this case has the potential to reshape the digital landscape for years to come. Whether it leads to greater clarity in content moderation policies, a re-evaluation of regulatory frameworks, or a deeper understanding of the complexities of governing the internet, the case of X versus Australian law represents a pivotal moment in the ongoing debate over the future of online governance and free speech in the digital age.

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Legally Speaking

Supreme Court Framed Issues To Consider, Hearing In July 2024: Challenge To Surrogacy Law

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7 months ago

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May 7, 2024

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SC seeks Centre’s reply on fresh pleas against CAA

The Supreme Court in the case Arun Muthuvel v. Union of India has elucidated the issues it will consider in a batch of petitions challenging provisions of the Surrogacy Regulation Act, 2021 and the Surrogacy Regulation Rules, 2022. The bench comprising of Justice BV Nagarathna and Justice AG Masih passed the order recording the following issues:

  1. Whether the prohibition of commercial surrogacy as stated under Section 4(ii)(b) and Section 4(ii)(c) of the Surrogacy (Regulation) Act, 2021 is constitutional?
  2. Whether the right of a couple to avail surrogacy being restricted to married couples between the age of 23 to 50 years and in case of female and between 26 to 55 years in case of male as it is being provided as stated under Section 4(iii)(c)(I) read with Section 2(1)(h) of the Surrogacy (Regulation) Act, is constitutional?
  3. Whether the right of a single woman to avail surrogacy being restricted to only widows or divorcees between the ages of 35 to 45 years as it is provided being under Section 2(1)(s) of the Surrogacy, the Regulation Act 2021, is constitutional?
  4. Whether the right of an intending couple to avail surrogacy being restricted to only those couples who do not have a surviving child as provided as stated under Section 4(iii)(c)(II) of the Surrogacy (Regulation) Act 2021, is constitutional?
  5. Whether individuals who initiated the process of availing surrogacy which being prior to the enactment of the Surrogacy, the Regulation Act, 2021 have any right to avail surrogacy in a manner which being beyond the scope of the Surrogacy (Regulation) Act, 2021, save for cases falling within the ambit of Section 53 of the Act?

The petitioner in the plea highlighted an additional issue which relates to exclusion of single men from the purview of Surrogacy Regulation Act.

Therefore, the lead petition in the matter has been filed by an infertility specialist from Chennai, Dr. Arun Muthuvel, through Advocate Mohini Priya and Advocate Ameyavikrama Thanvi.

Therefore, while highlighting various contradictions in the Surrogacy Regulation Act and the Assisted Reproductive Technology (Regulation) Act, 2021, thus, the petitioner in the plea points out that the twin legislations inaugurated a legal regime that was discriminatory and was violative of the constitutional rights of privacy and reproductive autonomy.

The Supreme Court in the case observed and has agreed to hear the petition wherein it challenges against the two Acts. In September last year, several other petitions and applications were filed wherein similar questions were raised, such as whether it was constitutional to exclude unmarried women from the ambit of the Surrogacy Act, or whether limiting the number of donations made by an oocyte donor under the ART Act would amount to unscientific and irrational restrictions.

The bench in the case observed and has expressed reservations about hearing the challenges to both the Acts simultaneously, as the linkage between the provisions of the two Acts could not be ascertained in the present matter. Further, the said court decided that issues wrt the Surrogacy Regulation Act will be heard first, followed by those which relate to the ART Act.

The court asked the parties to file written submissions on the foregoing issues. It has also been clarified by the said court that the petitioners need not restrict their submissions to the issues recorded by the court. Any ‘related’ issue may also be raised during the proceedings.

Accordingly, the court listed the matter for further consideration on July 30, 2024.

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Legally Speaking

SC ruling on spectrum allocation doesn’t affect satellites

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7 months ago

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May 2, 2024

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SC seeks Centre’s reply on fresh pleas against CAA

The Supreme Court’s decision to reject the government’s application seeking clarification on administrative allocation of spectrum for non-mobile services is not expected to impact the allocation of satellite spectrum as outlined in the Telecom Bill, according to highly placed sources. In February 2012, the Supreme Court had upheld that auctions were the preferred method for allocating scarce public resources like telecom spectrum.

The Centre had filed a miscellaneous application in December last year seeking a clarification on the matter of administrative allocation of spectrum, which was mentioned in court last week. However, the SC registrar refused to accept the plea, arguing that it was seeking a review of the 2012 order and that there was no ‘reasonable cause’ to entertain it.

Government sources emphasized that this decision would not change the existing laws governing spectrum allocations for satellite communications, as clearly stated in the Telecom Bill. Sources clarified that the application did not seek to amend the 2012 judgment on 2G spectrum allotment nor did it seek permission for administratively allocating spectrum. Spectrum will continue to be auctioned for mobile services, while for the 19 specific use cases cited in the Telecom Bill, it will be allocated administratively.

The government had filed the miscellaneous application at the Supreme Court to explain its intentions before tabling the bill in Parliament, emphasizing that it was not seeking any permission from the court. The application aimed to seek appropriate clarifications from the court regarding the CPIL judgment in 2012, to establish a spectrum assignment framework that includes methods of assignment other than auction in suitable cases, to best serve the common good. In 2012, the SC had criticized the ‘first-come, first served’ method for spectrum allocation, known as the CPIL judgment, and had quashed the 2G spectrum allotted by the United Progressive Alliance government.

Since then, the government has been issuing spectrum administratively in certain cases where auctions are not technically or economically preferred or optimal. The Telecom Bill’s First Schedule lists satellite spectrum and 18 other sectors where administrative allocations will be compulsory, including law enforcement, public broadcasting, in-flight and maritime connectivity, the Indian Army and Coast Guard, and radio backhaul for telecom services. Government sources noted that all stakeholders were consulted on the issue, and the government was confident of its legal standing as outlined in the Telecommunications Act.

The SC, in a presidential reference, did not specify that all spectrum should be auctioned, only that for mobile services. The Supreme Court’s decision not to accept the government’s application seeking clarification on spectrum allocation for non-mobile services does not alter the framework outlined in the Telecom Bill. While auctions remain the preferred method for mobile services, administrative allocations will continue for specific use cases, including satellite spectrum, as delineated in the bill.

The rejection of the application underscores the importance of adherence to established legal procedures and the judiciary’s role in upholding regulatory frameworks. Moving forward, the government remains committed to transparent and efficient spectrum allocation, balancing the imperatives of economic efficiency and public interest in the telecommunications sector.

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Legally Speaking

Legal Victory for Ankiti Bose: Limits Imposed on Defamatory Content Regarding Former Zilingo Chief

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7 months ago

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May 1, 2024

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A legal dispute has unfolded involving B2B fashion startup Zilingo, with former CEO Ankiti Bose on one side, and co-founder Dhruv Kapoor and former COO Aadi Vaidya on the opposing side.

A recent court decision in Delhi has brought focus to a legal dispute involving Ankiti Bose, the former CEO of Zilingo, a prominent technology platform. The court issued an ex parte order in Bose’s favor, instructing certain parties, including Zilingo co-founder Dhruv Kapoor and former COO Aadi Vaidya, to refrain from making defamatory statements against Bose. This decision underscores the importance of protecting reputational rights against unfair reporting.

The court’s ruling cited a prima facie case in Bose’s favor, acknowledging her legal right to safeguard her reputation from damaging remarks. It emphasized that failure to act promptly could lead to irreparable harm to Bose’s reputation. The order specifically bars Kapoor and Vaidya from making any further defamatory postings against the former CEO.

This legal action stems from a broader conflict within Zilingo, a B2B fashion startup that has faced financial struggles since its inception in 2015. Bose’s departure from the company was contentious, marked by allegations of misconduct and underperformance. She subsequently filed a First Information Report (FIR) accusing Kapoor and Vaidya of sexual harassment and business irregularities. In response, the accused have dismissed these claims as retaliatory, asserting that Bose’s actions were prompted by her dismissal from the company.

The litigation highlights the complexities of corporate disputes and the broader implications for individuals and businesses. Beyond the legalities, it reflects the challenges faced by startups navigating internal strife amidst financial difficulties. Zilingo’s trajectory, from inception to liquidation, encapsulates the turbulent landscape of the tech industry and underscores the importance of legal protections for individuals like Bose seeking to safeguard their professional standing amidst controversy. The court’s intervention serves as a reminder of the gravity of reputational issues in the modern corporate environment, particularly amidst the complexities of startup dynamics and leadership disputes.

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Legally Speaking

Supreme Court In Patanjali Case: Concerned With All FMCG/Drugs Companies Affecting Lives Of Children And Elderly Through Misleading Ads

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7 months ago

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April 26, 2024

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The Supreme Court in the case Indian Medical Association v. Union Of India observed and has clarified against Patanjali over publication of misleading advertisements that it was not dealing with Patanjali as a standalone entity; rather, the Court’s concern, in public interest, extended to all those Fast Moving Consumer Goods, FMCGs or drugs companies which take consumers of their products for a ride through misleading advertisements. The bench comprising of Justice Hima Kohli and Justice Ahsanuddin Amanullah in its order stated that, this court must clarify that we are not here to gun for a particular party, or a particular agency or a particular authority.

This being the absolute Public Interest Litigation, PIL since it is in the larger interest of the consumers, the public to know which way they are going and how and why they can be misled and how […] is acting to prevent that misuse. Thus, at the end, this is also as we said a part of the process of rule of law. If that is violated, then it affects […].

The court in the case observed that the implementation of laws regulating misleading ads in relation to medicines require deeper examination, as the products are used for babies, school going children and senior citizens based on the ads: Further, the court stated that this court is of the opinion that the issue which relates to implementation of the relevant provisions of the Drugs and Magic Remedies Act and the Rules, the Drugs and Cosmetic Act and the Rules, and the Consumers Act and the relevant Rules needs closer examination in the light of the grievances raised by the petitioner…not just limited to the respondents before this court but to all similarly situated or placed FMCGs who have […] misleading advertisements, and taking the public for a ride…affecting the health of babies, school going children and senior citizens who have been consuming products on the basis of the said misrepresentation.

The court while taking into account the misleading ads issued in electronic media impleaded the Ministry of Information and Broadcasting, Ministry of Information Technology, and Ministry of Consumer Affairs. Therefore, the same was being done with a view to examine the steps taken by these Ministries to prevent abuse of Drugs and Magic Remedies (Objectionable Advertisements) Act 1954 (and the Rules), the Drugs and Cosmetic Act 1940 (and Rules) and the Consumer Protection Act. Accordingly, the court listed the matter for further consideration on May 07, 2024.

Background Of The Case:

The Court raps Uttarakhand authorities The said court also came down heavily on the State of Uttarakhand for the failure of its licensing authorities to take legal action against Patanjali and its subsidiary Divya Pharmacy. The bench also asked why it should not think that the authorities were ‘hand in glove’ with Patanjali or Divya Pharmacy.

The court in its order stated that it was ‘appalled’ to note that apart from ‘pushing the file’, the State Licensing Authorities did nothing and were merely trying to ‘pass on the buck’ to ‘somehow delay the matter.’ The court stated that the State Licensing Authority is “equally complicit” due to its inaction against Divya Pharmacy despite having information about t heir advertisements violating the Drugs and Magic Remedies (Objectionable Advertisements) Act.

Further, the court stated that it was refraining from issuing contempt notices to other officers. Further, the court directed that all officers holding the post of Joint Director of the State Licensing Authority, Haridwar between 2018 till date shall also file affidavits explaining inaction on their part.

Background of the Case:

The contempt case was initiated wherein the petition is filed by the Indian Medical Association against Patanjali’s advertisements attacking allopathy and making claims about curing certain diseases. On the Supreme Court reprimand, the Patanjali on last November had assured that it would refrain from such advertisements. The court in the case noted that the misleading advertisements continued, thus, the Court had issued contempt notice to Patanjali and its MD in February.

The court in march considering that reply to the contempt notice was not filed, the personal appearance of the Patanjali MD as well as Baba Ramdev, who featured in the press conferences and advertisements published after the undertaking, was ordered by the said Court. Therefore, the Patanjali MD filed an affidavit wherein it is stated that the impugned advertisements were meant to contain only general statements but inadvertently included offending sentences. Further, the court stated that the advertisements were bona-fide and that Patanjali’s media personnel was not ‘cognizant’ of the November order (wherein the undertaking was given before the Supreme Court).

The affidavit filed also contained an averment that the Drugs and Magic Remedies Act was in an “archaic state” as it was enacted at a time when scientific evidence regarding Ayurvedic medicines was lacking. On the last date of hearing, both Baba Ramdev and MD Balkrishna were physically present in Court. The court expressed its reservations about MD Balkrishna’s affidavit, calling it “perfunctory” and “mere lip service”. The court gave last opportunity to the alleged contemnors for filing a proper affidavit.

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