Analysis: India – Bangladesh water deal

Reading time: 6-8 minutes.

Jane Austen

“Where the waters do agree, it is quite wonderful the relief they give”.

When the Ancient Mariner lamented that there was ‘water, water everywhere, but not a drop to drink’, little could some relate to the plight of the stranded mariner of Samuel Coleridge’s famous poem.

Fast forward a few years, and the roadside squabbles on whose pots would get filled first from the huge tankers or even the local hand-pipe, have blown into major water disputes between the world’s nations.

One such dispute that had received media attention and made the headlines of our daily newspapers is that of the ‘Indo – Bangla Water Dispute’ and the subsequent Agreements.

With the mighty Ganga – Brahmaputra – Meghna basin forming the heart of the treaty with 54 rivers flowing through the two nations, the Ganges treaty was signed by India and Bangladesh in 1996, to share the waters at the Farraka Barrage.

Initially, the Ganges rivers ran its course through the Hooghly river in India. However, a shift in its course was seen in the 1500s when it shifted towards the Bengal delta in Bangladesh. The Farraka Barrage was set up by India to maintain the port that had been set up by the British in India for transportation of goods, thus, enabling the diversion of flow of the Ganges rivers to the Hooghly during dry climate.

As per the Treaty, it had been clearly stipulated that in case of availability of more than 75,000 cusecs in the Farraka, India shall be allowed to withdraw 40,000 cusecs while balance of flow is Bangladesh’s share; in case of availability between 70,000 and 75,000, India share is the balance of flow and Bangladesh can withdraw up to 35,000 cusecs.

If the availability in the Barrage is less than 70,000, it shall be shared equally. However, this agreement in itself has drawn up some flak on both sides – on the Indian side, it has been criticized that Bangladesh’s water allocation leaves it with less water to maintain the Calcutta port while Bangladesh has raised issues of raising salinity levels, adversely affecting Hooghly at Calcutta port and so on. The Farraka Barrage has also caused some unprecedented floods in Bangladesh.

The Teesta River has been the heart of yet another dispute between the two countries. The river, which originates in Sikkim flows through West Bengal and finally makes its way to Bangladesh. Bangladesh has time and again, requested for India’s cooperation in getting a fair share of the river. In 1983, an Ad – hoc agreement between the countries envisaged 39% water share to India and 36% to Bangladesh.

In 1984, a Joint River Commission had been appointed for allocation of water between the countries. The Commission opined for 42.5% for India and 37.5% for Bangladesh. In 2011, the agreement fell through. There has been scepticism about the agreement ever since West Bengal adopted the opinion that the agreement would prove to be a disaster, resulting in the drying up of the northern region.

It was also of the opinion that in view of the Teesta Barrage, the Bangladeshi farmers did not deserve more water than what was already availed of, by them. In light of these conflicts between West Bengal and the Centre, the Agreement has not moved past to the enforcement stage.

The Feni River also finds itself in a tussle between the nations. The river flows through Sabroom in Tripura and enters Bangladesh. The dispute with regard to the water sharing had not found a resolve for quite long.

Modi meets Sheikh Hasina : The Six River Agreement

The recent meeting between the Indian PM, Narendra Modi and his Bangladeshi counterpart has proved to be quite fruitful. The meeting which had discussed even issues such as border security and cultural exchange and other programs, culminated in two MoUs on ‘Coastal Surveillance System’ and on withdrawal of 1.82 cusec of water from Feni by India.

The latter has proved to be a true boon for the village of Sabroom. The two leaders had also expressed their pleasure over the Terms of Reference to conduct Feasibility Study of the Ganges Barrage Project for optimum utilization of waters as per the 1996 agreement.

The discussion also had its prime focus upon the drafting of a framework for Interim Sharing of six rivers, or the ‘Six River Agreement’. The six rivers forming the part of this agreement include Manu, Muhuri, Khowai, Ghumti, Dharla and Dudhkumar. The leaders exhorted the Technical Committee of the Joint Rivers Commission to draft the same, as expeditiously as possible.

Why West Bengal resists?

As noted previously, the West Bengal government has resisted the agreement with Bangladesh on the ground that the same would prove to be fatal to the State. Water, being a State subject, the State also has a take on the issue, which cannot be overlooked.

Further, the concerns raised by the State include that India would not benefit from the said agreement in a prominent way and Bangladesh, already availing the requisite amount, could not be entitled to more. Recurrent floods in West Bengal which may ensure river diversion, appears to be the prime concern behind the State’s resistance.

The way forward

The two States having shared amicable ties over the years and continue fostering the same even at present, this agreement of sharing of waters between themselves could prove to further strengthen the ties, if implemented effectively.

Sharing of water has often been regarded as a source of tension and has also led to major humanitarian crises in many cases, reinstating why water is indeed a precious resource! In this context, neither of the nations ought to take the agreement lightly and must work towards implementing the same in the best way possible.

-This article is brought to you in collaboration with Navya Benny from National University of Advanced Legal Studies (NUALS), Kochi.

Brexit: Boris Johnson’s negotiation offer

Reading time: 6-8 minutes.

Brexit is an abbreviation that is used to denote the term “British exit” from the European Union (EU). The EU includes 28 European countries which are in an economic and political union due to which the residents get the opportunity to live or work in any of those countries they want.

Brexit resulted from a public vote or also called as referendum which was held on 23rd June, 2016 to decide whether Britain should leave or remain in EU.

It was done with the intention to settle this big question once and for all and also as the then Prime Minister David Cameron promised such a National Referendum. He himself was campaigning for continuing the membership and was convinced that people would want to remain in the EU. The number of people voting was around 30 million.

Leave was supported by 52% and opposed by 48%. The voting results came as a big shock and created a huge disturbance in the global markets.Cameron announced his resignation the following day.

Though the UK government announced the country’s withdrawal in March 2017, it started a two year long process which was to be concluded on 29 March, 2019 completing the withdrawal.

But the UK parliament has voted against the withdrawal agreement thrice, causing the deadline to be extended twice; from 29th March to 9th October 2019. The latest deadline is 19th October 2019 and if the UK Parliament does not reach any agreement on that day then the withdrawal deadline will experience another extension.

PM Johnson’s Negotiations

Boris Johnson, current Prime Minister of Britain has offered a final Brexit offer to the European Union. In the latest Negotiation the following were covered:-

  1. Brexit new Offer: The PM made new offers on which he insisted on ditching the “Irish Backstop”, which is an insurance policy that is designed to ensure that there are no customs or any other type of infrastructure on the Irish border.
  2. Checks the business area: Johnson admitted that after Brexit some custom checks will be required in Ireland. He suggested that it could be done on “decentralized basis”. There are plans that would keep the Northern Ireland to stay in a regulatory zone with the EU single market for goods, removing the need for checks.
  3. “Get it done”: In the Tory conference the statement “Let’s Get Brexit done” was a repeated statement. Johnson’s office billed the proposals as a final offer. He reaffirmed that they have no intention of getting another extension. In his speech Johnson also said that no-deal is an outcome that the government isn’t seeking but it’s an outcome for which they are ready.

Timeline of Brexit

  1. 23rd June, 2016: Most commentators were in the belief that the Brits would decide to remain in the EU but the ‘Leave’ campaign won by 51.9% to 48.1% with a gap of 13 million votes. David Cameron resigned the next day.
  2. 13th July, 2016: Theresa May was appointed as the Prime Minister.
  3. 17 January, 2017: Through her speeches and setting out the government’s “Plan for Britain” May showed her intentions for a “hard brexit”.
  4. 29th March, 2017: May triggered article 50 which started the two year negotiation process that leads to UK exiting the EU.
  5. 8th December,2017: Amidst of the negotiations between UK and EU, they agreed over a deal covering both UK and EU citizens’ rights and the Northern Irish “backstop”.
  6. 6th July 2018: May took her cabinet to Chequers for signing a collective position for further negotiations with the EU but Brexit secretary David Davis and Boris Johnson opted out of it naming it as a suicide vest.
  7. 15th Jan & 12th March, 2019: With the fear of losing her votes, May made an attempt to get her deal ratified but due to various other concerns it wasn’t possible and hence she suffered a heavy defeat.
  8. 24th June, 2019: Due to the failure to get the withdrawal agreement ratified, May resigned.
  9. 24th July & 4th Sept, 2019: Boris Johnson had an easy win with 66% of the votes. MPs backed up a bill which blocked No-Deal Brexit on the 31st October. This would require Johnson to get extension the Brexit deadline, if he fails to strike a deal with EU.
  10. 3rd October, 2019: Johnson made a few negotiation proposals with a mind to get this brexit with or without a deal.

Recent Developments

On 28th August, Boris Johnson confirmed that the Parliament will be suspended for four weeks from mid- September. Recently, in this regard, the Supreme Court of UK declared that the PM acted unlawfully when he announced such suspension in a desperate attempt to muzzle Parliament for as much time as to in the run-up to the Brexit date of 31st October.

Just three weeks before the deadline of Brexit there are hopes that the agreement might be concluded between UK and EU after a meeting between the UK Prime minister and his Irish counterpart.

Despite the introduction of Johnson’s new Brexit plan, the huge differences remained in their respective positions. The new proposal seeks to strip out the Irish Border “backstop”- it seems to be a main issue.

The UK would no longer remain in custom with the EU and Northern Ireland would leave the EU’s customs union along with UK. However, it could remain partially aligned with EU’s single market as subjected to Approval of Belfast in every four years.

Johnson’s assurance over customs checks failed to convince EU leaders. The single market and consent proposal also caused alarm in Northern Ireland’s farming and business communities.

Implications of Brexit

In the situation of No-Deal

No-deal would imply that UK is not a part of EU and removal of its tariff free status with the rest of the members without an agreement. Increase in tariff would cause trouble for exporters as export cost will be increased.

Trade and travel in Ireland would become complicated in a no-deal brexit situation. UK would have to pay $51 billion outstanding EU bills and also guarantee EU citizens’ rights those living in UK.

In the situation of a Hard Brexit

It is almost same as a no-deal brexit but with a trade agreement. London’s reputation as being the bastion for business will be damaged. It would have a huge effect on young workers as there will be no jobs readily available for UL’s workers after Brexit. Hard Brexit could lead to UK losing Scotland.

Effect on US

US dollar increased in value when the pound fell. This is not good for foreign shareholders. High rate of dollar means exports from US becomes expensive which in-turn affects the farming and manufacturing sector of US.

UK would lose its titles like “world’s second largest economy”, third largest populated country and being the “financial capital of the world”.


Now, as the EU is almost there at the deadline for getting the much awaited brexit there might still be a question in the minds of people that is it worth it? Keeping in mind all the adverse effect that Brexit will bring for the EU, still those in favour of Brexit are looking at the bright side.

The economic fallout since the issue of the referendum has been improved and will be taken care of in the future. As the PM is determined for getting the Brexit done by the end of October and the voters are also in a bit of assurance that separation form the EU would actually provide them beneficial outcome, with the passage of time.

Deal or no-deal, pro- Brexit people are ready to go separate ways and bear the load upon them. Though, it is still required to have a system of proper laws that would be needed for the functioning of the post Brexit UK.

-This article is brought to you in collaboration with Rajni Negi from Bansathali Vidyapith, Newai, Rajasthan.

Earning livelihood at the stake of life: Tamil Nadu fishermen v. Sri Lankan Navy

Reading time: 6-8 minutes.

A 22-year-old Indian fisherman was shot dead, on March 7, allegedly by the Sri Lankan navy, while he was fishing in a mechanised boat at a short distance off Katchatheevu islet. Previously, more than 2,000 fishermen from Tamil Nadu within Indian waters had been taken by surprise when the Sri Lankan naval personnel attacked them for “trespassing”.

In another, separate incident, four fishermen were arrested by the Lankan navy for allegedly poaching near Neduntheevu off the Lankan coast.

What is Tamil Nadu Fisheries Department?

The maritime state of Tamil Nadu is blessed with 1,076 km long coast line and 41,412 km2 continental shelf area with an Exclusive Economic Zone (EEZ) of 1.9 lakh sq. km, contributing 4.97 lakh tons of marine fish production.

This supports the livelihood of 10.07 lakh marine fishers through 5,893 mechanised and 38,779 traditional fishing crafts which are actively engaged in fishing.[1]

India being the second largest producer of fish in the world and occupying the second position in inland fish production, Tamil Nadu ranks 4th in total fish production of the country.

What are some fundamental facts of the fishermen issue?

Firstly, the southern part of Tamil Nadu and the northern part of Sri Lanka lies at the same latitude. They fall between 10̊ N and 8̊ N, which means the Latitudinal Biodiversity Gradient (LBG) remains the same. Secondly, absence of strong currents in the area should also be taken note of.

These geographical conditions make fishermen on both sides chase the same variety of marine life using similar kinds of boats. When there is a depletion of marine resources on the one side, there is a temptation to cross boundaries in search of similar depleted variety.

Thirdly, the fishermen on either side of Palk Bay are Tamil speaking and there has been close contacts between them for centuries in terms of inter-marriages, religion, migration and literature. At one point, the Chola Kingdom (eleventh century) included northeastern Sri Lanka with Polonnaruwa as the local capital.

Lastly, there has also been a free movement of goods across the Bay before independence, which did not completely stop after independence. Even today, 40 per cent of India’s trade with Sri Lanka takes place through Tamil Nadu.

Interestingly, the informal trade through the state is estimated to be nearly double the formal one. The main reason being, during the colonial period, both countries were under the administration of the British, and this ensured that the free commercial intercourse that existed prior to colonization was not disrupted, which acts as a source of conflict now.

What is the public reaction?

People have expressed their deep anguish over the years on this issue and there have been instances in the past where it has shaped state politics. In fact, when a 21-year-old fisherman was killed the public reaction was so sharp, it forced chief minister Palaniswamy to write a letter to the central government demanding action.

At the same time, the people and the government of Sri Lanka wish to protect and create a sustainable environment for their maritime resources, and have claimed that Indian fishermen are primarily responsible for the declining ocean condition and the depletion of resourses.

What were the attempts in finding a sustainable resolution to the fishermen issue?

The first major move at the governments’ level came in the form of a Joint Working Group on Fisheries (JWG) between India and Sri Lanka.

It was constituted in November 2004 with the aim to deal with issues relating to the straying fishermen, working out modalities for the prevention of use of force against them and the early release of confiscated boats, and exploring possibilities of working towards bilateral arrangements for licensed fishing in Palk Bay and the associated area of the Bay of Bengal and the Gulf of Mannar. The Group was mandated to meet once a year alternatively in India and Sri Lanka to evaluate the situation and make recommendations to the respective countries. The first meeting took place on 21 April 2005 in New Delhi.

But, it was only in the second meeting that took place in January 2006 (Colombo) that some concrete proposals came about. Both sides agreed to:

  • 1. Examine the possibility of not arresting straying fishermen within five nautical miles of the maritime boundary on either side;
  • 2. Consider releasing the small fishing boats along with the fishermen on humanitarian grounds; and
  • 3. Enhance coordination between the two Navies to curb illegal activities (Government of Sri Lanka, 2006).

In addition to this, India and Sri Lanka have ‘agreed to put in place practical arrangements to deal with bona fide Indian and Sri Lankan fishermen crossing the International Maritime Boundary Line (IMBL)’ (Government of India,2008). The practical arrangements agreed upon include:

• Upon the designation by the Government of Sri Lanka of sensitive areas along the Sri Lankan coastline and their intimation to the Government of India, Indian fishing vessels will not venture into these identified sensitive areas.

• There will be no firing on Indian fishing vessels.

• Indian fishing vessels would carry valid registration/permit and the fishermen would have on-person valid identity cards issued by the Government of Tamil Nadu (Government of India, 2012).

Farmed Fishing is another option. In 2010, a project on Integrated Mangrove Fishery Farming Systems (IMFFS) was implemented by the International Union for the Conservation of Nature (IUCN) India in partnership with the M.S.

Swaminathan Research Foundation. IMFFS was first piloted in the state of Tamil Nadu, India, in abandoned shrimp farms on privately owned land. The process involves the building of local infrastructure such as bunds and embankments for mangrove plantation.

The farm is fed with mangrove-based fishery seeds and organic inputs for their development. Sea bass and other organisms are grown on smaller fish and plankton conveyed by tidal influx, in replacement of synthetic feed and at no cost to the farmer.

The tidal water replaces saline pond water on a periodic basis, a self-cleansing and energy-efficient method of production. The Coastal Aquaculture Authority of India can consider this ecosystem-based model as a green alternative to the fishermen in the area (IUCN, 2016).

The IUCN World Declaration on the Environmental Rule of Law outlines 13 principles for developing and implementing solutions for ecologically sustainable development.

Road ahead…

In the matter of fulfilling livelihood on one hand and protecting the sovereignty of mother land on the other hand, arbitrariness should not win. What has been done by the Sri Lankan Navy in the name of national interest is whimsical. Executions must be carried out on proof beyond reasonable doubt which in toto has not been followed by the navy.

Central government inclusive of Colombo and New Delhi should look for comprehensive and humane approach leading to pragmatic solutions on an urgent basis to forestall the future conflict that may arise between the two countries.

Shifting the focal point on developing and making resources sustainable can brace the relationship between both the countries. An authoritative advisory board can be formed who will keep a check on ongoing activities in Palk Bay. Making new guidelines, rules or laws might attract legal pluralism but that law has to balance equality and justice for people of both the sides.

-This article is brought to you in collaboration with Pratika Agarwal from ICFAI Law School, ICFAI University, Dehradun and Adya Aditi Samal from Xavier Law School, Xavier University, Bhubaneswar.

One card for all utilities: Propounding the multi-purpose theory.

Reading time: 5-6 minutes.

On 23 September 2019, the Union Home Minister Amit Shah put forward the idea of one card for all utilities. He mooted the plan of a multi-purpose card for citizens with all utilities like Aadhar, Passport and Bank Accounts.

While speaking at the ceremony for construction of new building of Registrar General of India that conducts the 10-year censuses, Mr. Shah spoke about the capabilities of bringing all kinds of cards into one multipurpose card.

What are the Salient Features of the announcement?

  1. The proposed idea is about creating a system of a single card which would include all details of a citizen such as Aadhar, Driving License, etc. 
  2. The aim of the process would be to lay a foundation for a digital census process, rather than the usual pen and paper process.
  3. Home Minister Shah also said that a digital application will be used for population census in the year 2021.
  4. While speaking about the digital census process, he also added that an app is being developed for data collection in phones.
  5. The idea of a single card would be a step towards achieving ‘one poll’ and ‘one unifying language’.
  6. However, the Ministry sources could not explain how the multi-purpose card would work and how it would differ from Aadhar, Passport, etc.

What was the general reaction?

The idea of a common utility card was greeted with varied reactions. Some experts believe that the very idea of a one-card is absurd. Some major issues that the experts believe would be are in relation to the security and privacy of the citizens. However, few experts have also backed the idea, claiming it to be a rather convenient one.

What are the Legal Issues Involved?

  1. One of the major issues includes the security risks. If there is a single card that holds all the vital details of a citizen, a huge problem would entail if the system is compromised.
  2. Further, the power of the central agencies to breach privacy of a citizen would increase.
  3. Cybercrimes, threats as well as digital frauds may witness a rise since the intruders would have to breach only one layer of security to gain all the data.
  4. Apart from the legal ramifications, the implementation of the idea is bound to include huge expenditure.
  5. A single card for all utilities would cause a lot of hardships if the card gets lost, damaged or stolen. Also, hacking of server and network issues are other obstacles.

What Lies Ahead?

The idea of one card for all utilities is a well-thought plan but limited to an extent. Keeping in mind the issues with the Aadhar process, the implementation of this idea is a complicated task. The one card idea being mooted by the Home Minister could open a can of worms.

One cannot ignore the fact that a single card would make people more vulnerable to security and privacy threats, both online and offline. Even if the idea is a smart one, it comes at a wrong time. People have already spent a lot of time standing in queues for Aadhar, ration cards as well as in banks demonetization came into action.

Such a process would again mean big queues and bigger displeasures. It is not to be forgotten that the Aadhar card has still not been able to become fully secured after all these years.

There is no doubt that a single card would be a convenient option for the citizens, however, the Government should first focus on strengthening the privacy and security segments. Due attention and time should be devoted to these issues and the implementation should not be hasty.

-This article is brought to you in collaboration Saksham Grover from Delhi Metropolitan Education, Guru Gobind Singh Indrapastha, New Delhi.

Stena impero: The story behind the seized British tanker

Reading time: 6-7 minutes.

Last week, Iran announced that the British-flagged oil tanker, Stena Impero, was “free to leave”, thereby ending a two-month long stand-off between Tehran and London which was a result of each country seizing the other’s oil tanker.

While a government spokesperson of Iran assured on 23rd September, 2019 that the legal process regarding Stena Impero’s detention was complete and that it could leave Iranian waters, the ship finally received clearance for sail only on 27th September, 2019 as the investigation into environmental damage remained open.

What is the Steno Impero incident all about?

Two weeks after the British Royal Marines seized the Iranian oil tanker Adrian Darya-1 off the shores of Gibraltar, a British overseas territory, the Iranian Revolutionary Guard Corps (IRGC) seized the Stena Impero tanker on 19th July, 2019 in the Strait of Hormuz for allegedly violating maritime rules and regulations in the Persian Gulf. A Liberian-flagged but British-operated tanker was also detained for several hours by the Iranian forces.

According to the Islamic Republic News Agency, the official news agency of Iran, the British-registered oil tanker collided with an Iranian fishing boat, thereby damaging it. As Stena Impero failed to answer its distress calls, the fishing boat informed Iran’s Ports and Maritime Organization which in turn notified the IRGC, leading to an investigation and subsequent detention by the latter.

However, the owners of Stena Impero maintain that the ship was “approached by unidentified small crafts and a helicopter during transit in the Strait of Hormuz while the vessel was in international waters”.

The tanker was manned by 23 crew members belonging to India, Russia, Latvia, and Philippines, of whom seven Indians were released earlier this month. The move to release the tanker came only after Adrian Darya-1 was released by Gibraltar authorities in late August.

What has been the global reaction to this incident?

The seizing of the “Stena Impero” could be seen as the most significant escalation in the tensions between Iran and the West since it began rising in May, 2018 when the United States pulled itself out from the Joint Comprehensive Plan of Action (JCPA), which is also known as the Iran Nuclear Deal.

The confrontation between the two sides has given rise to global concerns as any misunderstanding or misstep by either side has the potential to lead to war, especially since the incident occurred just a couple of days after Donald Trump, the US President, was reported to be considering air strikes on Iran as a retaliation against its attack on an American drone.

While UK Foreign Secretary, Jeremy Hunt, had decried the action as an illegal interference that was totally and utterly unacceptable and a clear contravention of international law, Abbas Ali Kadkhodayee, spokesperson for Iran’s Guardian Council, termed it as a “correct measure…based on international rights”, laying emphasis on the rule of reciprocal action.

The US patrol aircrafts and British warships were sent to the area to ensure the safety of American and British ships respectively. Further, while Donald Trump had declined to specify the US response to the situation, he maintained that they would work closely with the U.K. government on an appropriate course of action. 

What are the issues of international law involved in this case?

Several interesting legal issues involving International Maritime law and international customary law come to fore in the handling of the incident by both the sides.

Part III of the UN Convention on the Law of the Sea (UNCLOS) is designed in order to keep open vital chokepoints for seaborne trade. Hence, Article 44 of UNCLOS mandates that a State shall neither hamper nor suspend transit passage for any reason.

However, unlike the UK, Iran has not yet ratified the UNCLOS. This raises the question as to whether Iran is bound to follow the obligations under the treaty. If at all the latter agrees to be sued in an international court or tribunal, Part III UNCLOS may at least be argued as a customary international law in order to bind Iran.

With respect to Iran’s claim of reciprocal action, International Law recognises the Doctrine of Countermeasure which permits, if certain conditions are present, a limited degree of direct enforcement of obligations owed by one state to another. While detention of one ship in response to that of another meets the proportionality requirement, the argument of countermeasure stands on a slippery slope of legality.

On the other hand, ships in transit must ensure compliance with generally accepted international regulations, procedures, and practices for safety at sea, including the 1972 International Regulations for Preventing Collisions at Sea and the International Convention for the Prevention of Pollution from Ships.

What is the probable future?

The vessel left for international waters at 5:30 GMT on 27th September. It would now head towards Dubai where the remaining crew would be debriefed and provided with medical care.

It is yet to be seen what the fallouts of this incident will be. As of now, the UK is accusing Iran of the September 14 attack on Saudi oil facilities. While UK Prime Minister, Boris Johnson, maintains that he wishes to de-escalate tensions, he has not ruled out the possibility of military action against Iran if called upon by the United States or Saudi Arabia.

Even as the vessel has left for international waters, this truce stands on shaky grounds as the relations between Iran and the West remain tense. The situation seems volatile in the Gulf, with conflicts escalating each day. The international community continues to watch the key players with apprehension.

This article is brought to you in collaboration Shivani Karmakar from Amity Law School, affiliated to Guru Gobind Singh Indrapastha, New Delhi.

Analysis: Khalistan Issue

Reading time: 6-7 minutes.

Earlier in the month of September, a bomb blast happened in the district of Tarn Taran in Punjab, in which two persons were killed. An investigation conducted by the Punjab Police exposed the connection of a terror group of the revived Khalistan Zindabad Force (KZF) with the blast. In the past too, the district of Tam Taran had witnessed Khalistan activities demanding a separate state of Khalistan for the Sikhs.

What were the outcomes of the investigation into the Tarn Taran bomb blast?

On 20th September 2019, the Punjab police busted a number of terrorists belonging to the Khalistan Zindabad Force (KZF) in the Tarn Taran district of Punjab. The police said that the terrorists were planning to carry out a number of attacks in the states of Punjab, Jammu and Kashmir and in other neighbouring states.

In total, four persons were arrested and a large number of firearms were seized from them, which includes five AK-47 rifles, pistols, satellite phones and other items. The terror module of KZB is said to have reorganized with the help of sleeper cells and by manipulating local people.

The Punjab Chief Minister, Captain Amarinder Singh, handed over the further investigation into this incident to the National Investigation Agency (NIA) so as to find out the truth behind what happened and to ensure that similar events do not take place in the future.

The preliminary investigation by the police revealed that drones were used for delivering weapons and for communication across the border. This finding poses a major security threat. Therefore, the Chief Minister has asked the Centre to direct the Border Security Forces (BSFs) and the Indian Air Force (IAF) to take adequate counter-measures to check any possible threat. 

What is the Khalistan Movement and how did it start?

Khalistan movement was started by the Akali Dal, a Sikh-dominated political party, which demanded a separate Sikh state or Subha.  Although their demand was first rejected by the Indira Gandhi government, it later relented in 1966. As a result, Punjab was trifurcated into Punjabi –speaking Punjab, Hindi-speaking Haryana and the Union Territory of Chandigarh.

Peace prevailed for some time. But, then came Jarnail Singh Bhindranwale, who advocated a return to Khalsa or the orthodox form of Sikhism. The protest for Khalistan once again rose and the movement transformed into a violent one which unleashed terror.

The Indira Gandhi government decided to conduct ‘Operation Blue Star’ to remove the Sikh militants stationed inside the Golden Temple, which had been turned into an armoury. Under this operation, the Indian Army forcefully entered the Golden Temple despite facing stiff opposition from the supporters of Bhindranwale. Thereafter, the army killed Bhindranwale inside the Temple. This hurt the feelings and sentiments of Sikhs

A few months later, Indira Gandhi was assassinated by her two Sikh bodyguards who wanted to avenge the attack on the Golden Temple. This led to the anti-Sikh riot of 1984 which resulted in the killing of many Sikhs. All these developments led to the weakening of the Khalistan movement.

However, the recent attack by the KZF indicates that even now there are factions who support the notion of separate nation of Khalistan and who are ready to fight for it. They demand a separate nation consisting only of Sikhs, speaking the language of Sikhs and which will be governed by their own laws and rules.

Most importantly, a campaign named “Referendum 2020” has been launched with the objective of seeking a separate homeland for the Sikhs.

Does the Indian Constitution permit referendum?

The question that needs to be answered is the legality of referendum as a measure to decide whether Punjab should secede from India. Referendum is a process by which a political question is referred to the people for their decision by way of direct vote.

The Indian Constitution contains no express provision for conducting referendums, neither does it prohibit it. In fact, one referendum had happened in India on the question of statehood for Goa.

 In that referendum poll, people were asked decide as to whether they want Goa to be a Union territory or to merge with the state of Maharashtra. The outcome of this poll is history and needs no mention. Since then, no referendum has happened in India.  

Anyway, the practice of referendum does not appear to be a good idea for a country like India. Unlike US, India is not a group of independent states. Rather, the Indian states come under the direct control of the Centre.

Therefore, practically, a referendum would not happen if the Center does not allow for it. Also, in a country like India, where there is so much diversity in religion, language, castes etc., resorting to referendum to decide the Khalistan issue would set a bad precedent and then every other day one or the other community will demand referendum for secession from the Indian Union.  This will create imbalance and a chaotic situation in the country and hamper its growth and development.

Way Forward

As mentioned, a referendum for the creation of Khalistan is a bad idea, the consequences of which will be utter chaos and communal violence. In fact, though the Referendum 2020 campaign draws support from groups of Sikhs in foreign countries like he US-based secessionist group, Sikhs for Justice (SFJ), it does not have much support from the Sikhs in India. Hence, the community itself is divided on this issue.

One thing is for sure. A hasty, forceful creation of Khalistan driven by religious impulses would lead to a situation similar to partition, especially when there are no proper plans or procedures in place to oversee the formation of Khalistan smoothly.

-This article is brought to you in collaboration Sheetal Dhyani from Guru Gobind Singh Indrapastha, New Delhi.

Corporate tax cut: Centre’s bid to stabilize the economy

Reading time: 6-7 minutes.

The Union Government on 20th September, 2019 announced a massive cut in corporate tax in a bid to combat the slowing economy. The Union Minister for Finance, Nirmala Sitharaman announced the new measure which brings down the existing tax rate on corporates from 35% to 25%.

This new tax rate is inclusive of all cesses and allied surcharges. The Union Government estimates that as a result of this tax cut, it will have to forgo a whopping revenue of Rs. 1.45 lakh crore. Following this announcement, the Nifty and Sensex rose by almost 5%, signaling the approval of the corporate sector and the common man to this measure.

The corporate tax reduction follows the already drastic measure taken by the Union Government by borrowing almost Rs. 1.76 Trillion from the Reserve Bank of India on 27th August, 2019 to infuse it into the economy.

It also comes in the backdrop of the various reforms already initiated by the Government such as an order by the Ministry of Corporate Affairs dated 18th September 2019, which announced the formation of a Company Law Committee. The Committee is to be chaired by the Secretary, Ministry of Corporate Affairs and will have a tenure of 1 year.

The above actions are part of the Central Government’s efforts to combat the slowing economy of India, which is currently growing only at a rate of 5% in the first quarter of the fiscal year 2019-2020 (FY 20), the lowest in almost over 8 years.

What are the reasons for the reduction in corporate tax?

India ranked 142 in the 2015 Ease of Doing Business rankings published on 29th October, 2014 by the World Bank. Since then it has jumped 65 places to reach its current 77th position in the 2019 rankings published on 31st October 2018. 

The Ease of Doing Business ranking is published by the World Bank and is of international repute. A country’s ranking is a reflection of its business policies and the overall conditions in the country that either foster or inhibit growth of businesses.

The major policy changes introduced by the previous regime, like demonetization and GST, had severe impact on foreign investors. In order to improve the Ease of Doing Business ranking of India, various measures have been undertaken like setting up of Special Economic Zones (SEZ) and tax exemption to startups and angel investors.

However, these are not enough to help save the slowing economy. There is also a need for reduction in red tape and bureaucracy that hamper the climate of doing business in India.

Many reasons can be attributed for the government resorting to the drastic measure of cutting down corporate tax. Some of the reasons have been identified below:

  • High Unemployment rate: A recent report by the Centre for Monitoring Indian Economy (CIME) reveals the massive rate of unemployment in India with a national average of almost 8.4%, which is the highest in the last three years.
  • Slowdown of Sectors: Many sectors of the Indian economy like FMCG, real estate etc. have been badly affected due to monsoon, fund crunches, regulatory issues and consequently have been facing stagnant growth.
  • Decrease in profits: The profits of majority of the listed Indian companies fell by almost 37% in the quarter which ended on March 31, 2019. Such a fall was experienced for the first time in six quarters in the financial history of the country.
  • Global Economic Slowdown: Due to the US-China trade war, the world is facing a situation akin to the 2008 Wall Street Meltdown Crisis. To add to this are the growing problems of climate change and Artificial Intelligence.
  • Economic Slowdown of China: China, the world’s second largest economy, is experiencing its lowest rate of economic growth since the early 1990s and is already burdened by a trade war with US. The Chinese government, like the Indian government, has taken far-reaching reforms such as reduction of tax and a slew of measures to enhance the liquidity system of their country.

What are the changes brought forth by the corporate tax cut?

This new move by the Union Government introduces different rates of taxe for corporates and non-corporates. The benefit of the different rates of tax is only available subject to conditions like amount of turnover, non-availment of tax incentives etc. Newly set-up companies that primarily focus on manufacturing will also have a different slab of tax. The important changes are summarized as follows:

  • Domestic companies not seeking exemptions or incentives will have to pay tax at the rate of 22% only.
  • Domestic companies not seeking relief or incentives will not have to pay Minimum Alternate Tax (MAT).
  • Listed companies, having made a public announcement of buyback before 5th July, 2019, shall also have no tax applicable to them.
  • Companies seeking exemptions or incentives will have to pay MAT of 15% which is reduced from 18.5%.
  • New companies incorporated after 15th October, 2019 will attract only 15% tax rate.
  • Enhanced surcharge under Section 2 of the Finance Act, 2019 will not be applicable to sale of equity shares.
  •  Manufacturing companies that will incorporate on or after 1st October, 2019 and which will commence production before the end of March 2023 will have an effective tax rate of 17% applicable to them.

Are there any legal issues involved in Corporate Tax reduction?

The power to legislate on matters relating to taxation is enshrined in the Constitution itself. Entry 82 of the Union List contained in Schedule VII of the Constitution empowers the Central Government to levy tax on any income. This includes the power to mandate tax cuts also.

 In India, we do not yet have any major judicial pronouncements regarding the constitutionality of tax cuts. In the United States, on the other hand, there is a strong history of anti-tax movements with many judicial pronouncements upon petitions challenging the constitutional validity of tax cuts and imposition of tax cuts in the first place. 

Examples include cases in which US citizens tested the constitutionality of the 14th, 15th, 16 and 17th Amendments to the US Constitution.

The way forward

While making the corporate tax rate of India at par with or even lower than its Asian competitors is a positive step, it is not sufficient. The onus is on the government to make other sectors of the Indian economy more attractive to foreign investors by cutting down the land and rent prices, railway freight rates, electricity tariffs, to name a few.

Reforms are also needed in major legislations like the Companies Act, 2013, the Limited Liability Partnership Act, 2008, the Indian Contract Act, 1872 and other allied legislations that primarily govern the realm of business in India in order to reduce the ambiguity present in the laws and to keep up with the international mandate on the same. Also, there is a need to simplify laws and end corporate nepotism, bureaucracy and red tape.

The government should also ensure enforcement of law and provide a means of judicial recourse that is fast and efficient. The fear of long pending litigation and enforcement of law is widely prevalent among foreign investors.

Therefore, the government should undertake measures to further strengthen the existing adjudicatory regime such as the National Company Law Tribunal (NCLT), Securities and Exchange Board of India (SEBI), the Prevention of Money Laundering Tribunal (PMAT) and other judicial, quasi-judicial, regulatory and statutory authorities to boost investor confidence.

Further, similar incentives should be given to the manufacturing sector, primarily the Medium and Small Manufacturing Industries (MSME’s) who form the backbone of the manufacturing sector, rather than just focusing on the large conglomerations and corporates.

As a result of the huge tax cut, the Central Government’s tax deficit will rise up to almost 3.7%. This will be detrimental to the Centre and may affect the release of funds to States and the discharge of other financial duties of the Centre. The Centre, therefore, will have to undertake more reforms to combat this deficit.

To conclude, the corporate tax cut is just a small step in the long path ahead to reform and revive the ailing Indian economy.

This article is brought to you in collaboration with Kaushik Chandrasekaran from School of Law, Christ University, Banglore.

Extending the Fiduciary Duty of Loyalty: Item Software (UK) Ltd v. Fassihi

Reading time: 11-12 minutes.

In Item Software (UK) Ltd v. Fassihi, the Court of Appeal considered two issues. Firstly, it determined whether or not a company director was in breach of his fiduciary duty of loyalty by failing to disclose his own misconduct to the company, and secondly, if an employee was entitled to claim his remuneration to the date of his dismissal notwithstanding the fact that the date for the payment of that remuneration had not been reached. Lady Justice Arden clarified the law by utilizing policy doctrine and extended the fiduciary duty of loyalty to disclosure of a director’s own misconduct. In relation to the second issue, the Court ruled that the director could make a time-apportioned claim for his salary under the Apportionment Act, 1870. This article primarily focuses on the first issue.

What are the facts of the case?

Item Software Ltd (UK) (Claimant) distributed software products and at the relevant time, a major part of the Item’s business was the distribution of software products to Isograph Ltd. The directors of Item included Mr. Fassihi (Defendant) and Mr. Dehghani. The defendant was employed from 1 May 1995 and the contract expressly provided that Mr. Fassihi should not use confidential information belonging to Item for his own purposes.

In November 1998, Item attempted to negotiate more favourable terms with Isograph. Mr. Fassihi encouraged Mr. Dehghani to press Isograph for improved terms. At the same time, Mr. Fassihi secretly approached Isograph with his own proposals which involved establishing his own company, RAMS International Ltd. (RAMS), to take over the contract. On 24 April 1999, Mr. Fassihi had sent a fax to Isograph referring to RAMS and urged Isograph to accept a conditional notice to terminate the existing distribution arrangements which Item had given.

In the end, the negotiations between Item and Isograph failed because Item insisted on terms that Isograph was not prepared to accept. Item then discovered the defendant’s misconduct and Mr. Fassihi was summarily dismissed on 26 June 1999. Item brought proceedings against Mr. Fassihi alleging that he was in breach of his duty as a director and employee in seeking to divert the contract with Isograph to RAMS and for having pressed Mr. Dehghani to take a hard line in the negotiations with Isograph with the intention of improving RAMS’ chances of securing the contract. Both these claims failed before the judge in the trial. However, Item succeeded on a further allegation that Mr. Fassihi was in breach of his duty in failing to disclose to Item his own wrongdoing.

What did the court decide?

During the trial, Item couldn’t not succeed in the diversion or sabotage issues as the judge found that, in the negotiations with Isograph, Item insisted on terms that Isograph was not prepared to accept. This was deemed to be the cause of failure of the negotiations. Furthermore, Mr. Fassihi was the sales and marketing director of Item and it appeared from the facts that he may have had day-to-day responsibility for the trading relationship with Isograph but not the responsibility for strategic business decisions regarding that relationship.

There was nothing to suggest that Mr. Dehghani would have negotiated more cautiously if Mr. Fassihi had not pressed him to seek better terms. In relation to the crucial issue of law, namely: “whether, in addition to Mr. Fassihi’s breach of duty in seeking to divert Item’s main contract to his new company, the failure to disclose that misconduct to  Item was a further breach of duty”, it was held by the trial judge that Mr. Fassihi’s misconduct did give rise to a superadded duty of disclosure as in Syborn Corpn v. Rochem Ltd, there was a separate and independent aspect of his duties which required him to disclose the facts. Furthermore, the judge stated that there was a clear case of fraudulent concealment as Mr. Fassihi had failed to tell Mr. Dehghani of what he had done, while remaining involved in the negotiations with Isograph and was part and parcel of his dishonest scheme to rob his employers of their business.

The judge argued that the director owes fiduciary duties to the company for reasons given in Horcal Ltd v. Gatland and it is difficult to justify how a director who was making profit by appropriating the company’s contract for his own benefit would not be under duty to disclose what he had done. This scenario is distinguishable from the one in Bell v. Lever Bros Ltd due to the fact that Mr. Fassihi was a director of Item as well as an employee. Therefore, the non-disclosure of Mr. Fassihi’s conduct was a breach of duty.

On appeal, L.J. Arden states that in relation to the disclosure issue, she considers the position of Mr. Fassihi as a director because a director is not simply a senior manager of the company and the duties of a director are in general higher than those imposed by law on an employee and disagrees with the trial judge’s superadded duty of disclosure by stating that a fiduciary does not owe a separate and independent duty to disclose his own misconduct to his principal.

However, she observed that this case is based on the fundamental duty a director is subject to, that is the duty to act in what he in good faith considers to be in the best interests of the company. Furthermore, the duty of loyalty is a time-honoured rule that focuses on principle rather than the particular words which have been used previously. This principle is dynamic and it reflects the flexible quality of the doctrines of equity. The fact that the duty of loyalty has never before been applied so as to require a fiduciary to disclose his own misconduct was not a good objection to the application of the fiduciary principle.

Based on this policy doctrine, the Court of Appeal held that there is no basis on which the defendant could reasonably have come to the conclusion that it was not in the best interest of Item to know of his breach of duty and Mr. Fassihi could not fulfil his duty of loyalty except by informing Item about RAMS, and his plan to acquire the Isograph contract for himself.

In relation to the apportionment issue, the court observed that, if section 2 of the 1870 Act applies, Mr. Fassihi is free to claim that part of his June salary (1 to 26 June) as his employment contract contained no provision which expressly excluded the operation of the 1870 Act. Furthermore, the Court distinguishes this case from the case of Boston Deep Sea Fishing And Ice Company v. Ansell, by observing that in the Boston case there was no attempt to rely on the 1870 Act and therefore it is not an authority as to the effect of the 1870 Act. To conclude, L.J. Arden allowed the appeal and held that none of the authorities cited, detracts from the interpretation to sections 2 and 3 of the 1870 Act and based on that interpretation Mr. Fassihi can make a time-apportioned claim for his salary for the period 1 to 26 June.

What can be made out of this judgement?

The fiduciary duty of loyalty has been a source of debate among academics. It is argued by some that the requirement of loyalty is subjective as it requires fiduciaries to exercise their judgement in a manner, which they subjectively believe to be in the best interests of the beneficiary, while others have argued that the duty of loyalty is best understood as the summation of the various doctrines that are applied peculiarly to fiduciaries, rather than as a legal duty that is directly enforceable on its own right.

In the case of Item Software Ltd where full disclosure was seen as an extension of the fiduciary duty of loyalty; the Delaware court, in the case of Malone v. Brincat, where it was established that absolute honesty was required from the fiduciaries; the Canadian Court, which adopted the English approach and the Scottish Court, where the question of full disclosure being a part of the fiduciary duty of loyalty was left open.

The Australian Courts seem to be an outlier as they have rejected this proposition. They view the fundamental duty of loyalty as proscriptive by nature and this stance does not easily accommodate a duty of full disclosure as a primary fiduciary obligation. According to the Australian Courts, the fiduciary obligation of loyalty is exhausted by the proscriptive ‘no conflict’ and ‘no profit’ rules. In contrast to the Australian Courts, academics and legal scholars have observed the importance of this extension of the fiduciary duty of loyalty.

For example: Licht argues that the common law regime of fiduciary loyalty implements a dual-pronged approach that ensures certain outcomes. The first prong i.e. the prohibition of any pursuit of self-interest aims to counteract self-interestedness and the second prong, which requires full disclosure by the fiduciary aims to combat information asymmetries.

Academics like Lee have claimed that there is a directional element in fiduciary obligations that includes a duty to act solely for the benefit of the principal. This directional element was explained in Item Software, when the court described the director’s duty to act in the company’s best interests. Furthermore, Lee explains that this duty consists of a duty to act in the sole interests of the company as the fiduciary obligations are not result-oriented and do not specify a particular standard to be attained by the fiduciary. She further argues that this positive, directional element of fiduciary obligation was seen in the case of Regal (Hastings) Ltd v Gulliver, where the House of Lords found the directors liable to account to the company for their profits due to the fact that the directors has made use of those fiduciary positions to make those profits.

It is argued that it was enough that the fiduciary used its fiduciary position to make a profit for itself and it did not matter that it had not been shown that the interests of the principal had been adversely affected. However, some academics are not convinced by the best interests duty applied in Item Software. Edelman argues that the difficulty with the duty to act in the best interests is that the duty is extremely vague. Furthermore, it is observed that the extreme vagueness has generated much academic criticism such as  being unhistorical, simplistic, true in part only and misleading.

In conclusion…

The approach taken by L.J. Arden in the caseof Item Software started a chain reaction and various jurisdictions around the world adopted this approach. It is crucial to note that even though the court stated that the duty of disclosure was not an independent duty, it functioned in the exact way as it operated as a separate and additional source of liability. Furthermore, I believe that Mr. Fassihi was in clear breach of his fiduciary duty primarily due to the conflict of interest and his duty to not make (potential) secret profits. The court arguably erred by placing too much emphasis on the full disclosure aspect of the fiduciary duty of loyalty and should have adopted the Australian courts’ approach instead.

-This article is brought to you in collaboration with Priyam Raj Kumar from University of Edinburgh, Scotland.

Analysis: One nation, one language?

Reading time: 4-5 minutes.

The Home Minister of India, Amit Shah, had recently invited trouble in an attempt to make Hindi as the national language of the country. He, on 14 September 2019 (also celebrated as Hindi Diwas), had tweeted (as translated to English), “India is a country of different languages and every language has its own significance, but it is very important to have one language that should become the identity of India in the world.

If one language can unite the country today, it is the widely-spoken Hindi language”. This led to the widespread protests in various Non-Hindi speaking states, especially in south India, rekindling the past Hindi opposition movements.

Background of the Language controversy:

The Anti-Hindi ideology surfaced immediately after Indian Independence when the leaders chose Hindi as the official language in a bid to phase out English. But due to certain errors made by the promoters of Hindi, there were counteractions from the non-promoters fearing that Hindi was being imposed on them. Because of this and certain other factors, neither English was removed from the list of official languages nor was Hindi made the national language of India. Later in 1965, in accordance with the 15-year plan, instructions were given to proceed with linguistic change-over from English to Hindi with an exception that communication from the centre to Non-Hindi speaking states will be accompanied with English translation.

This move was highly opposed by various states throughout India, with Madras opposing it with a greater intensity than the others. Dravida Munetra Kazhagam (DMK), the ruling party in Tamil Nadu at that point of time, organised Madras State Anti-Hindi Conference on January 17, 1965, few weeks before January 26, the day scheduled for Hindi to take position as sole official language of India. Following this, the students of Madras agitated for a period of two months.

There were also protests in the Northern part of India staged by Pro-Hindi groups opposing English and urging the Union Government to proceed with the shift to Hindi. Despite this, the Madras agitation gained more attention as nearly 66 people died, out of which 2 committed suicides by self-immolation in the streets. This in fact halted the realisation of the Centre’s one nation one language ideology.

In February 1965, the Congress Working Committee (CWC) passed a resolution which stated that the position of English as an official language will not be changed unless all states consent to it. Later, a three-language system was introduced which also failed miserably. Recently, the new Education Policy of 2019 proposed teaching Hindi in non-Hindi speaking states but, when Tamil Nadu leaders warned of protests, the policy was revised, and the suggestion of teaching Hindi was made not mandatory.

Hindi as national language: Possible?

Article 343(1) of the Indian Constitution reads as “The official language of the Union shall be Hindi in Devanagari script. The form of numerals to be used for the official purposes of the Union shall be the international form of Indian numerals”. As per this provision, Hindi is the official language and not the national language.

The Constitution neither provides for any language as the national language of India nor does it prohibit in recognizing a national language. In addition to this, since Article 351 imposes a duty on the Union government to promote the spread of Hindi in order to develop it to serve as a medium of expression, Hindi can be made a national language and it would not be against the provisions of Constitution provided that this does not interfere with other languages.

Consequences of Nationalisation of Hindi:

Nationalising Hindi is however a tedious process as there would definitely be agitation and protests against it like always. Various non-Hindi speaking states would not come to a common consensus, for they would look at this move as Hindi Imposition. The consequences are divided into positive and negative.

Positive consequences:

  1. There will be easy movement of people throughout India without any language barrier.
  2. Hindi shall represent India in the International arena.
  3. After so many years of Independence, Hindi will finally oust English from India.

Negative consequences:

  1. It adds extra burden on non-Hindi speaking states for they have to learn a new language, while Hindi speaking states need not.
  2. There would be an imbalance in employment opportunities.
  3. More than 1000 Indian languages’ existence would be threatened by Hindi.


India is a multi-lingual country with more than 1000 languages and dialects spoken by its people. Recognising Hindi as the national language would be a burden on all non-hindi speaking population. They would regard it as an imposition on them. As stated earlier, nationalising Hindi needs the consensus of all the states, which is a difficult task for they have a strong pride over their regional languages.

Any attempts to proceed with this ideology will end up in protests throughout India and immeasurable damage to the spirit of nationalism. As far as Amit Shah’s tweet is concerned, he had later clarified that he never advocated for Hindi imposition but only suggested learning Hindi as a second language. Despite this clarification, there still prevails a common notion that his previous statement might be hinting at the Union Government’s future agenda of One Nation, One Language.

This article is brought to you in collaboration with Jaimithra from School of Excellence in Law, TNDALU, Chennai.

Centre-State relations: The MVA angle

Reading time: 6-7 minutes.

Amendments to Motor Vehicle Act, 1988 came into effect on 1 September, 2019. These recommendations have been given by a group of Transport Ministers of States.

The idea of these amendments was to deter individuals from violating traffic rules. After this amendment, the penalties for  driving an uninsured vehicle, causing obstruction to free flow of traffic, racing and speeding, drunk driving, dangerous driving, over speeding,  driving without qualification, driving without a license have significantly increased.

This has however received criticism from the common people that the government  should first improve the road infrastructure and facilities associated with it. A lot of state governments also find these new penalties unreasonable and a burden for the common man of the country.

Introduction: Gujarat slashes fines under MVA

 BJP ruled Gujarat has slashed the fines by up to 90% for some offences even though the Centre tried to justify the reason for increasing the fines by substantial amounts.

The new fines in Gujarat will come in force from September 16. The fines for offences like drunken driving and jumping traffic lights will remain the same as they cannot be altered but the offences for which fines have been reduced are – not fastening the sea belt, pillion rider not wearing a helmet, dangerous driving for the first time and  having an unregistered vehicle.

There are claims that fines have been reduced by taking a compassionate and humanitarian approach and the idea is not to collect penalty but to ensure that people are safe. The fines were imposed just to have a deterrent effect on people and in the long run for their own welfare. There are certain offences where upper limit has been mentioned and the amounts can be reduced whereas for some other offences the amount cannot be altered.

Other states like  Karnataka, Bihar, Maharashtra, Uttar Pradesh and Uttarakhand  have shown dissent over these increased penalties and will follow Gujarat’s suit. Opposition ruled states like Madhya Pradesh and West- Bengal have refused to implement the new fines according to the amendments completely. However, no fines will be slashed by Delhi government as they think traffic violation is a major concern that can be taken care of by imposing stricter penalties.

Centre-State relations under the Constitution

The executive, financial and legislative power between the Centre and the states has been divided by the Constitution of India which gives the Constitution a federal structure. Centre- State legislative relations are stated in Part 11 of the Constitution from Article 245 to 255 of the Constitution.

The legislative authority has been divided between the Centre and the States in three lists namely Concurrent List, Union List and State list. The Central government has exclusive right to make laws on  99 subjects enumerated under the Union list like defence, posts, armed forces, communications and foreign affairs. The State government has exclusive jurisdiction to make laws on the 61 subjects in the state list like police, prison, agriculture, local government and public order.

Both the parliament and state legislatures can make laws in respect to subjects enlisted in concurrent list but the claim of centre has a prior claim to legislate on these subjects. The law of parliament prevails when there is a conflict between the law of centre and state on a subject in the concurrent list. This list includes 52 subjects like criminal and civil procedure, population, family planning, education, electricity, newspapers and books. The residuary power to decide on a subject not listed in any of these three lists is vested with the union.

Tussle over differences in matters of common jurisdiction: Article 254

Article 254 of the Constitution deals with inconsistencies between laws made by Parliament and laws made by the legislature of the states.

If any law made by the state is inconsistent with the law that the parliament is competent to enact or any matter enumerated in the concurrent list then the law made by the parliament will prevail and the law made by the state legislature to that extent will be void.

When a law is made by the state legislature with respect to a matter enlisted in the concurrent list is repugnant to the provision made by the Parliament or any existing law, then the law if reserved for the consideration of President, shall prevail if received the assent of President. This clause shall not prevent Parliament from enacting laws on that matter including a law to amend, vary or repeal the law.

Probable future of this issue

Since the Motor Vehicle Act is in our concurrent list and both state and Centre have the right to formulate laws in this aspect, states are free to make  changes.  Where the fines are mentioned as up to, the fines can be lowered by the respective governments.

However where the penalties are fixed at a certain amount, these amounts cannot be lowered by the state governments. Even for offences that are in the category of compoundable offences, the state can decide on the quantum of penalties.


The insane penalties imposed on some people have been making headlines lately. There have been incidents where people and police have clashed on the streets as well. Amidst all, one thing that people have ignored in these incidents are the various laws that these people were violating.

India sees over 5 lakh accidents per year which results in 1.5 lakh accident deaths annually. Majority of these people are among the age group of 18 – 45 years which is the productive group for the country. Most of the vehicles involved in an accident are two wheelers.

The Union government believes that these accidents can be reduced and deaths prevented  since majority of the accidents are because of lack of respect and fear for laws framed. The result of this law is already visible as there is an increase in people applying for driving license and pollution check already. Slashing penalties by 90% in this case will not fetch any results that were intended by the Central government. 

This article is brought to you in collaboration with Shreya Bansal from Jindal Global Law School, Haryana