The Doctrine of Lifting the Corporate Veil in Company Law

Although a company is an artificial juristic personality having separate legal entity, in reality the business is carried on by its member shareholders and key managerial personnel. The doctrine of lifting the corporate veil refers to the scenario when the court completely disregards the company and actually concerns itself with the natural persons running its day-to-day operations. However, the court lifts the corporate veil only in exceptional scenarios which are well settled. Let us take a look at these scenarios one by one:

Statutory Provisions

The Companies Act, 2013 itself contains statutory provisions which enjoin the court to lift or pierce the corporate veil to reach the real persons concerned. These provisions are reproduced, below:

Offer, Acceptance and Revocation in the Indian Contract Act, 1872

In the information age, with instantaneous modes of communication, we enter into and terminate numerous contracts on a daily basis. However, the need for a proper understanding of when the offer is initiated, how it is to be accepted, and when it is finally concluded, eludes most of the people even in the legal fraternity. This article aims to examine the scheme and essentials of offer, communication and acceptance provided for in the Indian Contract Act, 1872, which is the governing legislation on Contracts. 

What is an offer? 

The Indian Contract Act does not use the word ‘offer’. Instead, it uses the word ‘proposal’. Section 2(a) lays down that when one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtain the assent of the other to such act or abstinence, he is said to make a proposal. 

All You Need To Know About The Bhanwari Devi Case That Led To The Formation Of The Vishakha Guidelines

This was published in Indiatimes

Sexual assault is a serious offense which has destroyed the reputation of many a public figure. Whether it's ex-TERI Chief Rakesh Pachauri here in India or comedian Bill Cosby in the United States, the offenders are swiftly isolated from the society, no matter how high they sit, and are brought to stand trial in the court of justice. However, it wasn’t always this way. The case of Vishakha v. State of Rajasthan in 1992 was the landmark case where the Supreme Court dealt with the question of safety of women from any kind of sexual harassment at the workplace and laid down detailed guidelines for the same.

Bhanwari Devi was a Saathin working in the Women’s Development Project of the Rajasthan Government. The state government had recently launched a campaign against child marriages and Bhanwari Devi took an active part in spreading the influence of this campaign in her area. She tried to stop the marriage of a one-year-old girl and was furiously resisted by the villagers. In 1992, she was raped by five villagers in front of her husband for her temerity to stop an evil practice from spreading further. The district court acquitted all the five accused.

The matter came before the Supreme Court via a Public Interest Litigation (PIL) filed by a group of NGOs by the name of “Vishakha” in which the petitioners urged for judicial intervention to make workplaces safer for women due to the legislative inactivity in this regard. The Supreme Court observed that India was already a signatory to Convention on elimination of All Forms of Discrimination Against Women (CEDAW) and held that international conventions are to be read into the fundamental rights to enlarge their scope and advance their objective. It thus read the provisions of CEDAW (signed by India in 1980) in Articles 14, 15, 19 and 21 of the Constitution and laid down binding guidelines to be followed by every private and public sector employer to ensure the dignity and safety of women in the place of employment.

This was a landmark step by the apex court as it strayed into the territory of the executive by issuing guidelines which were binding, and hence, were law. The judiciary cannot make the laws, it can only interpret them, but in Vishakha vs State of Rajasthan, the Supreme Court resisted such orthodox theoretical interpretation of separation of powers and proved that it would not hesitate to occupy the space vacated by the legislature by its inaction, to meet the ends of justice. For this, the Supreme Court earned a fair share of criticism with some critics citing this judgment as an example of judicial overreach.

However, the passage of time has proved that the Supreme Court was correct in intervening in this regard. Today, due to the power and reach of social media and other information networks, sexual harassment has emerged as a very serious issue in our public discourse. However, back in 1992, it had not acquired the sense of seriousness that it commands today. Fundamental Rights were supposed to be enforceable ‘vertically’ i.e. an individual could only enforce them against the state. But through this judgment, the apex court ruled that in some worthy instances, fundamental rights were also enforceable ‘horizontally’ i.e. by one individual against another.

While there have been numerous cases where women have secured justice and a safer work environment for themselves by pursuing litigation against employers indulging in sexual harassment, there have also been some cases where this shield accorded to women has been misused to file frivolous cases and to bargain for higher pay and promotions. Therefore these guidelines have come to be known as a “double edged sword” which can secure justice for worthy litigants and can also cause havoc for those abusing it to secure petty personal gains.

Meanwhile, the legislature has sought to shake off its decades-old attitude of treating such issues regarding the safety and dignity of women lightly. This is less because of a genuine awareness regarding such issues and more because of the fear of ceding their power to the judiciary. The 2012 Nirbhaya Gang Rape case has galvanised public support for enacting tough measures against the culprits indulging in this sort of sexually predatory behavior.

It is to be noted that even though more than 20 years after the judgment in the Vishakha case was passed, the parliament has still not passed a comprehensive legislation directed at combating sexual harassment against women at the workplace. It can only be hoped that our parliamentarians heed the developments in this regard and take urgent steps to ensure a welcoming environment for women in both public and private spaces of employment.

The Next Step For LGBTQ Rights In India - Scrap Or Amend Section 377 From The IPC

This was published in Indiatimes

After the unexpected decision of the Supreme Court in Suresh Kumar Koushal v. Naz Foundation, where it recriminalised homosexuality, efforts have increased to either amend or scrap Section 377 from the Indian Penal Code. It is conceded even by members of the ruling dispensation that Section 377 violates the right to equality and right not to be discriminated on the basis of sex as well as right to life and liberty as enshrined in the constitution. Some of the steps taken in this regard are enumerated below.

Rights of Transgender Persons Bill, 2014

On April 24, 2015, The Rajya Sabha unanimously passed the Rights of Transgender Persons Bill, 2014, which provides for reservation in education and jobs, financial aid and social inclusion for transgenders. It is rare for any house of the parliament to pass a private member’s bill, and this particular bill, moved by DMK’s Tiruchi Siva, became the first bill in 45 years to be passed in the Rajya Sabha. The Government has also assured to bring an updated bill in the Lok Sabha after removing some technical anomalies.

Curative Petition on Sec 377 in Supreme Court

The Supreme Court is currently hearing oral submissions on a curative petition filed against its judgment recriminalising homosexuality. It is rare for the judges to hear oral submissions on a curative petition, and decisions on such petitions are taken usually after the judges confer with each other. However, this departure from practice is being seen as an acknowledgment by the apex court of the changing social realities. It is to be noted that the curative petition against Sec 377 is the last legal resort for the petitioners to get any relief on this issue.

Medical Opinion

Medical Opinion in India has undergone a radical change since the days when arguments were repeatedly advanced claiming homosexuality to be a disease that can be cured. The Indian Psychiatrists Association, in a statement released in February 2014, said that there is no evidence to substantiate the claim that homosexuality is a mental illness or a disease. Earlier in 2011, in representations before the Supreme Court, the Vice President of the Indian Medical Association submitted that homosexuality is not a disease or mental illness.

Emerging Political Consensus

In view of international developments with regard to the issue of homosexuality, political consensus in India is also slowly building up. From Arun Jaitley of the BJP to P. Chidambaram of the Congress, political leaders have expressed their opinions supporting homosexuality. The RSS too has climbed down from its earlier position of vehement opposition to the decriminalisation of homosexuality to maintaining ambiguity on the issue. The Aam Aadmi Party and the CPI(M) have outrightly demanded the reversal of the Supreme Court Judgment in Suresh Kumar Koushal v. Naz Foundation.

Pride Parades and Awareness Building

The most stringent opposition to homosexuality comes not from the legal or political circles, but from the society where it is still frowned upon. However, the LGBT community has taken a number of steps to spread awareness about same-sex couples and homosexual relationships, including the organisation of various pride parades in major Indian cities and constituting LGBT groups in many college campuses. Various internet magazines and radio channels are dedicated to covering LGBT issues and spreading their culture. LGBT issues have featured prominently in Bollywood films such as My Brother Nikhil, Honeymoon Travels Pvt. Ltd. and Aligarhleading to a slowly building acceptance of the community.

The Road Ahead

With major developed countries like the United States, Canada, United Kingdom, New Zealand, South Africa, France etc. legalising gay marriage and homosexuality in general, it would be tough for the Indian government to drag its feet any longer. One can reasonably expect the Supreme Court to either strike down Sec 377 or for the current parliament to pass a bill decriminalising homosexuality in the country. In short, the question is not of “if”, but more of “when”.

Everything You Need To Know About Section 377 Of Indian Penal Code And The Story So Far

This was published in Indiatimes

Section 377 of our constitution, introduced with the Indian Penal Code way back in 1860, criminalises sexual acts “against the order of the nature”. This Victorian era statute was struck down by the Delhi High Court in 2009 in the famous Naz Foundation case, but the decision was overturned on appeal by the Supreme Court in 2013, which reasoned that the matter relating to LGBT rights and decriminalisation of homosexuality should be left to the legislature.

There is widespread support for the scrapping of Section 377 among the enlightened sections of Indian society, including eminent lawyers, jurists, renowned writers, political activists, journalists, doctors, actors, producers, directors, teachers, students etc. The Supreme Court judgment overturning the Naz Foundation case has come in for heavy criticism as it runs against the history of the apex court acting as a champion of the underprivileged.

What was the Naz Foundation Case?

In Naz Foundation vs Govt. of NCT of Delhi, the issue before the two-judge bench of the Delhi High Court was whether Section 377 of the Constitution violates the fundamental rights of the LGBT community and if so, should it be struck down as unconstitutional? And should homosexual acts between consenting adults be legalised?

The bench of Justices Ajit Prakash Shah and Justice S. Muralidhar answered in the affirmative and read down Section 377 holding that it violated Articles 14, 15 and 21 of the constitution, which guaranteed the right to equality before law, right not to be discriminated on the grounds of sex and right to life and liberty respectively.

The Appeal – Suresh Kumar Kaushal vs. Naz Foundation

In their appeal in the Supreme Court, the petitioners argued that Section 377 does not classify any particular group or gender and hence is not in violation of Articles 14, 15 and 21 of the Constitution. They also argued that if the High Court judgment was approved by the Supreme Court, “India’s social structure and institution of marriage will be detrimentally affected and it would cause young people to be tempted towards homosexual activities”. They finally submitted that the Supreme Court could not legislate and it should leave the matter of legality or illegality of Section 377 to the Parliament.

Sadly, the Supreme Court accepted the arguments advanced by the appellants and observed that Section 377 is the only law that criminalises pedophilia and crimes like sexual abuse and assault. It also reasoned that if Section 377 was a pre-constitutional statute and if it were in violation of any fundamental right, the framers of the constitution would not have included it in the first place. Based on such observations, the apex court overturned the decision of the Delhi High Court.

Subsequent developments

The decision by the Supreme Court was met with heavy criticism and a general outcry from the intelligentsia, but was welcomed by many religious groups. However, some religious organiaations have begun favoring decriminalisation of homosexuality keeping in view the worldwide trend of acceptance for the practice.

Congress MP Shashi Tharoor has introduced a private member’s bill twice in the Lok Sabha to decriminalise homosexuality, but has been unsuccessful in getting it passed. Many voices within the government, including Finance Minister Arun Jaitley, have favored decriminalisation of homosexuality. In February 2016, the Supreme Court agreed to review its decision in the Suresh Kumar Koushal case and referred the curative petitions filed against the decision to a five-judge constitution bench.

The LGBT community in India is no more a minuscule minority as was made out by the apex court in its judgment. It is a thriving community whose members include prominent public figures such as renowned author Vikram Seth, fashion designers Rohit Bal and Manish Arora, film directors Karan Johar and Onir etc. Today, there are various LGBT groups in college campuses across India, which are doing spectacular work in spreading awareness about the LGBT community and in combating homophobia. 

As the practice of homosexuality starts getting acceptance worldwide, it is only a matter of time before the Parliament and the Supreme Court in India get rid of the Judeo-Christian morality imposed on the Indian public by Section 377 and give the LGBT community in India their right to lead their lives with dignity.

Everything You Need To Know About The KM Nanavati Case - How An Affair Turned Friends Into Foes

This was published in Indiatimes

This is a story involving an extra-marital affair that resulted in a murder. The trial of the murderer generated unprecedented media coverage and the circumstances in which the murder took place resulted in huge public sympathy for him. This is also one of the first cases through which the maverick lawyer, Mr. Ram Jethmalani, came into the limelight for the first time.

Kawas Maneckshaw Nanavati was an Indian Naval Officer who had settled in Mumbai with his English wife, Sylvia, and their two children. As his work required him to be away from his family for long periods of time, his wife began an affair with his friend Prem Ahuja. Sylvia wanted to divorce Nanavati and marry Ahuja, but he refused. Distraught by the refusal, she spilled the beans about the affair to Nanavati when he returned to his family.

Nanavati was enraged, but he did not show it. He dropped Sylvia and their two children to a nearby cinema hall, proceeded to the Naval Docks from where he withdrew his pistol and six cartridges on an excuse, finished his shift and went to Ahuja’s office. He did not find him there. He proceeded to Ahuja’s flat and confronted him there asking whether he would marry Sylvia and take in his children.

He refused.

Nanavati shot him dead.

After committing the murder, he proceeded to the Provost Marshal of the Western Naval Command, where he confessed to his crime. The Provost Marshal asked him to surrender before the Deputy Commissioner of Police, which he did. Nanavati was an upright, moral and patriotic officer who did not have any prior history of criminal activity. The jury that heard his trial was sympathetic to his suffering and declared him to ‘not guilty’ by a majority of 8-1.

Ram Jethmalani, a young lawyer at the time, was assisting the prosecution on the request of Ahuja’s sister Mamie Ahuja. The trial court judge found this verdict to be perverse and referred the matter to the High Court.

Throughout the trial, the Bombay Daily Blitz, which folded shop in the 90s, championed the cause of Nanavati. One copy of the magazine, which was usually priced at 25 paisa, was selling at 2 rupees per issue at the height of the trial. The coverage of the trial pitted the Parsi and Sindhi communities in the city against each other. When the matter reached the High Court, a sentence of life imprisonment was read out, upon which Nanavati preferred an appeal to the Supreme Court.

The Supreme Court confirmed the verdict of the High Court in November 1961. Blitz now went into an overdrive. It published a mercy petition in its pages, forcefully conveying the sentiments of the Parsi community which was wholly in favor of pardoning him. The rule of law and the demands of the society had clashed with each other. It was obvious that one had to bend in favor of the other.

Around the same time, Vijayalakshmi Pandit, newly appointed Governor of Bombay and sister of Prime Minister Jawaharlal Nehru, received a mercy petition from Bhai Pratap, a prominent Sindhi leader, in March 1962. Bhai Pratap had a business of import-export of sport goods and bureaucrats around her agreed that he could be pardoned. Pandit pounced on the chance. Bhai Pratap could be pardoned, she reasoned, after Nanavati had been pardoned. This way, both the Parsi and the Sindhi communities would get what they want. The proposal was conveyed to Jethmalani, who was asked to convince Mamie Ahuja for the same. She acceded to the government’s request.

Soon after being pardoned by the government, Nanavati left for Canada along with his wife and two children and was never heard of again. He died in 2003. Sylvia is still alive.

The case has inspired several Bollywood movies, plays and books including R K Nayar’s Ye Raaste Hain Pyaar Ke (1963) starring Sunil Dutt and Leela Naidu, Gulzar’s Achanak (1973) starring Vinod Khanna and Lily Chakraborty and Indra Sinha’s book The Death of Mr Love (2002). It is also rumored that Akshay Kumar and Neeraj Pandey’s latest offing Rustom, is based on the case. 

Even after 50 years, the Nanavati case continues to have a tremendous recall value among a public infamous for its short memory. The question that animated discussions in countless chai shops of Bombay at the time of the trial remains relevant till today - “What would you have done if you were in his shoes?”

The Darkest Hour In Indian Judicial History - When The Supreme Court Surrendered Its Autonomy During Emergency

This was published in Indiatimes

Today, most Indians have an implicit faith in the Supreme Court righting any wrongs done to any citizen by the government. But there was a dark period during the Emergency (1975-77) when even the Supreme Court bowed down to the diktats of the government and robbed the citizens of the country of their final hope of grievance redressal.

What was the case

ADM Jabalpur v. Shiv Kant Shukla, or the Habeas Corpus case as it came to be known, was a blot on the judiciary. No citizen had any right to move to the courts against any arbitrary action by the government, which resulted in the loss of his/her liberty or even life.

Four of the five judges on the Supreme Court bench came to this conclusion at a time when Mrs. Gandhi's emergency regime was rounding up opposition political figures, trade unionists, student leaders, civil society activists etc. and throwing them into jail for their crime of speaking up against the brutal emergency regime. This violated the most fundamental principles of democracy with impunity.

How it led to the making of draconian law

Chief Justice A N Ray, beholden to Mrs. Gandhi for his appointment as the Chief Justice after superseding other senior judges, chose to disregard the unanimous conclusion advanced by all the other high courts of the country on the same question. They all agreed that, even in the darkest period of political turmoil, a citizen could approach the high courts under Art. 226 of the Constitution for appropriate remedy through writ jurisdiction. CJI Ray chose to overrule all those judgments and closed the gate of the courts to the ordinary citizen of the country demanding justice in very unjust times.

The Judge who didn't budge 

Justice H R Khanna, the lone dissenting judge on the Supreme Court bench that decided ADM Jabalpur, paid the price for his dissent when he was superseded by Justice M H Beg for the post of Chief Justice. 

What's Habeas Corpus

The phrase "Habeas Corpus" means "have the body" and is usually used to challenge illegal detention by the government. Its roots can be traced back to the Magna Carta of England in 1215. When the SC decided to rob the citizens of the remedy through Habeas Corpus, it not only dealt a blow to the principles enshrined in our constitution, but also positioned itself against a legal principle dating back more than 750 years and recognised by all civilised democracies around the world.

How the case unfolded

Mr. Shanti Bhushan, Mr. Ram Jethmalani, Mr. Soli Sorabjee and Mr. Anil Divan argued for the detainees. The government was represented by Attorney General Mr. Niren De. The Attorney General argued that the detainees had no right to move to the court under a writ of Habeas Corpus as all fundamental rights including Article 21 of the constitution were suspended during the emergency. This lead Justice Khanna to ask, "Article 21 also contains life. Would government arguments extend to it also?"

The Attorney General replied, "Even if life was to be taken illegally during the Emergency, the courts are helpless".

The Attorney General would later justify his outrageous defense of the Emergency with these words, "I wanted the robes to rage against that violent view I propounded and come down on such Emergency inhumanity. But, to my surprise, barring Khanna, the other justices heard but did not furiously resist. I felt sad as a jurist but found success as Counsel." 

The Habeas Corpus case has been dubbed ”the biggest blow to the Supreme Court – by the Supreme Court” by the People's Union for Civil Liberties. Justice V R Krishna Iyer, an eminent jurist, called the judgment a disgrace at par with an American judgment that ruled that Negroes were slaves to be owned, not humans who could own. H M Seervai, another eminent jurist, said that through the judgment, the four Supreme Court justices had propounded the maxim "lawlessness be thou our law". 

As for Justice Khanna and his role during the gloomy days of the Emergency, these words from an editorial by the New York Times are more than enough to sum up the tale of one of the darkest cases in India's judicial history:

“If India ever finds its way back to the freedom and democracy that were proud hallmarks of its first eighteen years as an independent nation, someone will surely erect a monument to Justice H.R. Khanna of the Supreme Court. It was Justice Khanna who spoke out fearlessly and eloquently for freedom this week in dissenting from the Court’s decision upholding the right of Prime Minister Indira Gandhi’s Government to imprison political opponents at will and without court hearings... The submission of an independent judiciary to absolutist government is virtually the last step in the destruction of a democratic society, and the Indian Supreme Court’s decision appears close to utter surrender.”

Everything You Need To Know About Aruna Shanbaug, Whose Case Led To India's Euthanasia Debate

This was published in Indiatimes

At some point in your life, through friends, popular media or your school or college, you must have come across the term "mercy killing". The legal term for mercy killing is euthanasia and the consequences of legalising it, have over time, become a heated debate among India's intellectual, political and legal circles. The case that led to this heated debate was that of Aruna Ramchandra Shanbaug v. Union of India.

Aruna Ramchandra Shanbaug was a nurse in the King Edwards Memorial Hospital in Mumbai when she was assaulted by a sweeper of the same hospital while changing her clothes in the hospital basement. During the assault, she was tied with a dog chain around her neck, which cut off oxygen supply from her brain and rendered her in a permanent vegetative state for the next 42 years.

From the day of the assault till the day she died, Aruna could only survive on mashed food. She could not move her hands or legs, could not talk or perform the basic functions of a human being. Journalist-Activist Pinky Virani, who had published a book regarding her case titled Aruna's Story, filed a writ petition under Article 32 before the Supreme Court of India, asking for the legalisation of euthanasia so that Aruna's continued suffering could be terminated by withdrawing medical support. She contended that the patient had been in a permanent vegetative state for the past many years and did not have any chance of recovery at all.

The Supreme Court accepted the petition and constituted a medical board to report back on Aruna's health and medical condition. The medical board, comprising three eminent doctors, reported that the patient was not brain dead and responded to some situations in her own way. They felt that there was no need for euthanasia in the case.

The staff at KEM Hospital and the Bombay Municipal Corporation filed their counter-petitions in the case, opposing euthanasia for Aruna. The nurses at KEM Hospital were quite happy to look after the patient and they had been doing that for years before petitioner Pinky Virani emerged on the scene. 

The court, while delivering its judgment, distinguished between active and passive euthanasia. Active euthanasia means killing a person through the use of lethal substance or force, and passive euthanasia means withdrawing or discontinuing medical support necessary for the continuation of life. The court rejected the plea for euthanasia for Aruna Shanbaug but legalised passive euthanasia in the country.

The reason any debate around euthanasia generates such a heated discussion is because while our constitution recognises the right to life with dignity, it does not recognise the right to die. Therefore, a debate regarding mercy killing is just not a debate regarding the legality of such a wish, but is also a debate about the morality and ethics of such an act. With the concept of euthanasia, law enters that complex territory of medical ethics which has even divided the medical fraternity sharply in the recent past.

Passive euthanasia did not remain legalised for long in India. In Common Cause v. Union of India, it was urged that the judgment of Aruna Ramchandra Shanbaug v Union of India was decided based on incorrect interpretation of the constitution bench's judgment in Gian Kaur v State of Punjab, and therefore it was referred to a larger constitutional bench for review and final judgment.

Aruna Shanbaug died in May 2015, but her case helped in shedding light on an extremely complex issue of medical ethics and law. Euthanasia is currently legal in the Netherlands, Switzerland and the United States. Will India join the list?

We'll have to wait and watch.