Introduction

In the modern era of conflict, the paradigm of warfare has expanded far beyond the traditional battlefield. Non-kinetic warfare, encompassing methods such as cyberattacks, economic sanctions, information warfare, and psychological operations, has emerged as a significant dimension of contemporary conflicts. This form of warfare does not rely on direct physical force but instead leverages technology, information, and influence to achieve strategic objectives. While non-kinetic warfare offers novel opportunities for states and non-state actors, it also presents complex legal and ethical challenges. This article explores the legal frameworks governing non-kinetic warfare, delves into its evolving dynamics, and examines its international implications.

Understanding Non-Kinetic Warfare

Non-kinetic warfare refers to strategies and tactics that achieve objectives without the direct use of physical force. It includes cyber warfare, electronic warfare, economic measures, propaganda, disinformation campaigns, and other methods aimed at undermining an adversary’s capabilities or resolve. Unlike traditional kinetic warfare, which relies on physical destruction and military engagement, non-kinetic warfare focuses on influencing perceptions, decision-making processes, and systems.

The rise of non-kinetic warfare is closely tied to technological advancements and globalization. The interconnected nature of the modern world makes it possible to target financial systems, communication networks, and societal cohesion without crossing physical borders. This shift has raised questions about the applicability of existing legal frameworks designed for conventional warfare. The asymmetry of non-kinetic warfare also empowers smaller states and non-state actors to challenge more powerful adversaries, altering the balance of power in international relations.

Legal Framework Governing Non-Kinetic Warfare

International Humanitarian Law (IHL)

International Humanitarian Law, also known as the law of armed conflict, primarily governs kinetic warfare. However, its principles also extend to certain aspects of non-kinetic warfare. IHL is grounded in treaties such as the Geneva Conventions and their Additional Protocols, which aim to protect civilians and limit the methods and means of warfare. These principles provide a foundation for assessing the legality of non-kinetic operations.

For example, cyber operations that result in physical damage, loss of life, or the disruption of essential services could fall under the scope of IHL. The Tallinn Manual on the International Law Applicable to Cyber Warfare, developed by legal and military experts, provides guidance on applying IHL principles to cyber operations. It emphasizes that the principles of distinction, proportionality, and necessity apply to cyberattacks during armed conflict. For instance, a cyber operation targeting a power grid that causes widespread harm to civilians could be deemed a violation of IHL. The manual underscores that the intentional targeting of civilian infrastructure is prohibited, regardless of the method employed.

United Nations Charter

The United Nations Charter is a cornerstone of international law that regulates the use of force. Article 2(4) prohibits the threat or use of force against the territorial integrity or political independence of any state. While this provision was initially framed with kinetic warfare in mind, it has been interpreted to include certain forms of non-kinetic warfare.

For instance, a large-scale cyberattack causing significant economic or infrastructural damage could be classified as a use of force. The International Court of Justice (ICJ) in the Nicaragua case (1986) held that acts equivalent in scale and effects to the use of armed force, such as economic coercion, may violate international law. This principle has implications for assessing non-kinetic actions under the Charter. Furthermore, Article 51 of the UN Charter, which recognizes the inherent right of self-defense, could potentially be invoked in response to a non-kinetic attack that meets the threshold of an armed attack.

Customary International Law

Customary international law, derived from consistent state practice and opinio juris, also plays a role in regulating non-kinetic warfare. For example, the prohibition against interfering in the internal affairs of another state is a customary norm that applies to information warfare and disinformation campaigns. Actions that destabilize governments, manipulate electoral processes, or undermine public trust in institutions may violate this principle.

The International Law Commission’s Draft Articles on State Responsibility further clarify the obligations of states in preventing and addressing wrongful acts. These principles are relevant in attributing responsibility for non-kinetic operations, especially those conducted covertly or through proxies.

Domestic Legal Frameworks

In addition to international law, domestic legal frameworks regulate non-kinetic warfare. National laws on cybercrime, data protection, and national security often intersect with non-kinetic methods. For instance, the U.S. Computer Fraud and Abuse Act (CFAA) criminalizes unauthorized access to computer systems, while the European Union’s General Data Protection Regulation (GDPR) addresses privacy concerns arising from data manipulation. These frameworks create additional layers of accountability for non-kinetic actions that affect individuals, businesses, and governments.

Regulation of Specific Forms of Non-Kinetic Warfare

Cyber Warfare

Cyber warfare is one of the most prominent forms of non-kinetic warfare. It involves the use of digital attacks to disrupt, damage, or destroy computer networks and infrastructure. The regulation of cyber warfare is still evolving, with international efforts focusing on norms, confidence-building measures, and cooperative frameworks.

The Tallinn Manual provides a comprehensive analysis of how existing international law applies to cyber operations. However, the lack of a binding international treaty on cyber warfare leaves significant gaps. The Budapest Convention on Cybercrime addresses cybercrime but does not directly cover state-sponsored cyberattacks. This regulatory gap underscores the need for a globally accepted legal instrument to address the unique challenges posed by cyber warfare.

Information Warfare

Information warfare involves the dissemination of propaganda, fake news, and disinformation to influence public opinion and decision-making. While freedom of expression is a fundamental right, international law prohibits certain forms of harmful information warfare. The International Covenant on Civil and Political Rights (ICCPR) recognizes freedom of expression but allows restrictions to protect national security, public order, and the rights of others.

The European Court of Human Rights (ECtHR) has addressed cases related to disinformation and hate speech, balancing freedom of expression with societal interests. For example, in Delfi AS v. Estonia (2015), the ECtHR upheld liability for harmful online content, emphasizing the importance of protecting individuals and communities from harmful speech. This case illustrates the growing recognition of the need to regulate information warfare in a manner consistent with human rights principles.

Economic Sanctions

Economic sanctions, often used as a tool of non-kinetic warfare, involve restrictions on trade, financial transactions, and resource access to exert pressure on target states. Sanctions are typically regulated by the United Nations Security Council under Chapter VII of the UN Charter. However, unilateral sanctions imposed by individual states or regional organizations have raised legal and ethical concerns.

The ICJ has addressed the legality of sanctions in cases such as Iran v. United States (2018), where it examined the compatibility of U.S. sanctions with international obligations. The court emphasized the need for proportionality and adherence to international law in implementing sanctions. The misuse of sanctions for coercive purposes that exceed legitimate objectives raises questions about their legality and morality.

Challenges in Regulating Non-Kinetic Warfare

Attribution

One of the most significant challenges in regulating non-kinetic warfare is attribution. Identifying the perpetrators of cyberattacks or disinformation campaigns is often difficult, as actors can conceal their identities and operate through proxies. This creates obstacles for legal accountability and enforcement. Attribution requires sophisticated technical expertise, international cooperation, and transparent mechanisms to ensure credibility.

Ambiguity in Legal Frameworks

Existing legal frameworks often lack clarity and specificity regarding non-kinetic warfare. The absence of a universally accepted definition of cyber warfare or information warfare complicates efforts to develop cohesive regulations. This ambiguity allows states to exploit legal gray areas, undermining efforts to establish accountability and deter wrongful acts.

Enforcement and Compliance

Enforcing international law in the context of non-kinetic warfare is inherently challenging. Non-kinetic actions often fall below the threshold of armed conflict, making it difficult to invoke IHL or other legal mechanisms. Additionally, the lack of enforcement mechanisms for international norms and agreements hampers compliance. Strengthening international institutions and fostering multilateral cooperation are essential for addressing these challenges.

Case Laws and Judgments 

Stuxnet Case

The Stuxnet cyberattack, attributed to the United States and Israel, targeted Iran’s nuclear facilities in 2010. This operation highlighted the potential of cyber warfare to achieve strategic objectives without traditional military engagement. While no formal legal proceedings addressed the incident, it sparked debates on the applicability of IHL to cyberattacks and the need for clearer legal frameworks.

Russian Interference in U.S. Elections

The alleged Russian interference in the 2016 U.S. presidential election through disinformation campaigns and hacking raised questions about the legality of such actions under international law. The incident underscored the need for stronger norms and regulations to address information warfare. The use of covert methods to influence democratic processes poses significant challenges for accountability and justice.

Economic Sanctions and the ICJ

In the case of Iran v. United States (2018), the ICJ examined the legality of U.S. sanctions against Iran following the withdrawal from the Joint Comprehensive Plan of Action (JCPOA). The court’s interim measures emphasized the importance of humanitarian considerations in implementing sanctions, providing guidance on the limits of economic measures. This case illustrates the need for balancing strategic objectives with respect for human rights and international obligations.

International Implications of Non-Kinetic Warfare

The rise of non-kinetic warfare has profound implications for international relations and security. It blurs the lines between war and peace, creating a gray zone where traditional concepts of sovereignty and conflict are challenged. Non-kinetic methods enable states to project power without triggering conventional military responses, potentially destabilizing international order.

Moreover, the use of non-kinetic warfare by non-state actors, such as terrorist organizations and cybercriminals, complicates attribution and accountability. The asymmetric nature of these threats requires innovative legal and policy responses to ensure global security. The growing interdependence of states and the transnational nature of non-kinetic warfare demand coordinated efforts to prevent escalation and protect shared interests.

Conclusion: The Future of Non-Kinetic Warfare

Non-kinetic warfare represents a paradigm shift in the conduct of conflicts, necessitating a reevaluation of existing legal frameworks. While international law provides some guidance, significant gaps and ambiguities remain. Addressing these challenges requires collaborative efforts among states, international organizations, and legal experts to develop comprehensive regulations that balance security, sovereignty, and human rights.

As the nature of warfare continues to evolve, the legal and ethical dimensions of non-kinetic methods will play a critical role in shaping the future of international relations. Strengthening the legal framework for non-kinetic warfare is essential to ensure accountability, protect civilian populations, and maintain global stability. Expanding dialogue, fostering transparency, and enhancing international cooperation will be pivotal in addressing the complexities of this emerging domain.

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Introduction

Artificial Intelligence (AI) has emerged as a transformative technology, reshaping industries and redefining national security paradigms. In the realm of defence, AI offers unprecedented opportunities to enhance operational efficiency, automate complex processes, and strengthen national security frameworks. However, these advancements also pose unique legal and ethical challenges. The integration of AI in defence raises questions about accountability, compliance with international humanitarian law, and the balance between technological innovation and human oversight. This article explores the legal aspects of Artificial Intelligence in defence, including its regulation, relevant laws, landmark judgments, and the broader implications of its deployment.

The Role of Artificial Intelligence in Defence

AI in defence encompasses a broad spectrum of applications, including autonomous weapons systems (AWS), surveillance, logistics, and cybersecurity. Autonomous drones, robotic soldiers, and AI-powered decision-making systems are no longer confined to science fiction. They are real tools with profound implications for modern warfare. AI enables more precise targeting, minimizes collateral damage, and enhances situational awareness on the battlefield. It also provides critical support in areas such as predictive maintenance of military equipment and real-time data analysis.

Despite these benefits, the deployment of AI in defence introduces risks of misuse, bias, and unintended consequences. Autonomous weapons, for instance, operate without direct human control, raising ethical concerns about decision-making in life-and-death situations. There is also the potential for adversaries to exploit AI vulnerabilities, such as hacking into systems or manipulating algorithms to disrupt operations. These risks necessitate a robust legal and regulatory framework to govern the use of AI in defence.

International Regulations Governing Artificial Intelligence in Defence

The regulation of Artificial Intelligence in defence is primarily governed by international law, including the principles of jus ad bellum (governing the use of force) and jus in bello (governing conduct during war). These principles provide the foundation for evaluating the legality of AI-driven defence systems.

The Geneva Conventions establish rules for humanitarian conduct in warfare, including the principle of distinction, which requires distinguishing between combatants and civilians, and proportionality, which mandates avoiding excessive harm to civilians. Autonomous weapons must comply with these principles to ensure that their use aligns with international humanitarian law. The requirement for human oversight in critical functions is a key element in maintaining compliance with these norms.

The United Nations Charter plays a pivotal role in regulating the use of AI in defence. Article 2(4) of the Charter prohibits the threat or use of force against the territorial integrity or political independence of any state. AI-driven defence systems must adhere to these provisions to prevent escalations and violations of sovereignty. Furthermore, the principles of necessity and proportionality are critical in determining the legality of using AI in military operations.

The Convention on Certain Conventional Weapons (CCW) is another crucial framework for regulating AI in defence. The CCW aims to restrict or ban specific categories of weapons that cause unnecessary suffering or have indiscriminate effects. Discussions under the CCW framework regarding the regulation of lethal autonomous weapons systems (LAWS) have highlighted the need for clear guidelines to prevent the misuse of AI technologies. While some nations advocate for a complete ban on LAWS, others emphasize the importance of responsible use and human oversight.

Customary international law also plays a vital role in addressing gaps in treaties. The Martens Clause, for instance, emphasizes adherence to the principles of humanity and public conscience, which are particularly relevant in the context of AI in defence. These unwritten norms provide a moral and legal compass for evaluating the deployment of AI technologies in warfare.

National Regulations and Policies

Countries across the globe have adopted varied approaches to regulating AI in defence. In the United States, the Department of Defense’s (DoD) AI Strategy emphasizes the ethical and accountable use of AI. The establishment of the Joint Artificial Intelligence Center (JAIC) reflects the DoD’s commitment to integrating AI into defence operations while adhering to ethical guidelines. The JAIC provides a centralized platform for coordinating AI initiatives, ensuring compliance with legal and ethical standards.

The European Union has proposed a regulatory framework that emphasizes trustworthiness, transparency, and accountability in AI applications. The European Commission’s Ethics Guidelines for Trustworthy AI serve as a foundation for member states to align their defence policies with human rights and ethical principles. These guidelines highlight the importance of human oversight, data privacy, and the prevention of bias in AI systems.

In India, the Defence Research and Development Organisation (DRDO) spearheads AI-driven initiatives for national security. While India has made significant progress in developing AI technologies, it lacks a comprehensive regulatory framework for AI in defence. Existing laws, such as the Information Technology Act and data protection regulations, provide a limited foundation for addressing the legal challenges posed by AI in military applications. There is a pressing need for dedicated legislation to govern AI in defence, ensuring accountability, transparency, and compliance with international norms.

Legal and Ethical Challenges of Artificial Intelligence Integration in Defence

The integration of AI in defence presents several legal challenges and ethical dilemmas. One of the most significant challenges is determining accountability and responsibility. If an AI-powered system malfunctions or causes unintended harm, it is unclear who should be held liable—the developer, operator, or manufacturer. This ambiguity complicates efforts to ensure accountability and justice in cases involving AI-related incidents.

Compliance with international humanitarian law is another critical concern. Autonomous systems must adhere to the principles of necessity, distinction, and proportionality, but ensuring that AI systems can interpret these principles in dynamic combat scenarios remains a contentious issue. The lack of transparency in AI decision-making processes further exacerbates these challenges, making it difficult to verify compliance with legal and ethical standards.

The issue of transparency and bias is particularly problematic in AI systems. Many AI algorithms function as “black boxes,” making it difficult to understand how decisions are made. This lack of transparency raises concerns about the potential for bias in target identification and other critical functions. Ensuring that AI systems are explainable and free from bias is essential to maintaining trust and accountability.

The use of AI in defence also increases vulnerabilities to cybersecurity threats. Adversaries can exploit weaknesses in AI systems to launch cyberattacks, disrupt operations, or manipulate data. Legal frameworks must address these risks by establishing robust cybersecurity standards and protocols.

Ethical concerns about the delegation of life-and-death decisions to machines are also central to the debate on AI in defence. Critics argue that machines lack the judgment and empathy required to make ethical decisions in complex, high-stakes environments. These concerns underscore the importance of maintaining human oversight in the deployment of AI technologies.

Case Laws and Judgments

Several legal cases and judgments have addressed issues related to AI and defence, setting important precedents for future developments. Israel’s use of autonomous drones for surveillance and targeted strikes has sparked international debate. While these systems demonstrate advanced capabilities, critics argue that they may violate international humanitarian law by failing to adequately distinguish between combatants and civilians. The lack of transparency in decision-making processes further complicates efforts to assess compliance with legal norms.

The Jadhav case (India vs. Pakistan) highlighted the importance of compliance with international law in matters of national security. Although not directly related to AI, the principles upheld in this case are relevant for AI-driven defence systems to ensure accountability and adherence to human rights. Similarly, the International Court of Justice’s judgment in the Oil Platforms case reaffirmed the need for proportionality in the use of force, a principle that is critical for the deployment of AI in defence.

United Nations discussions on lethal autonomous weapons systems have also played a significant role in shaping the legal and ethical landscape. While no binding judgment exists, these discussions emphasize the need for human control over critical functions, setting a de facto standard for future legal challenges. These precedents highlight the importance of balancing innovation with accountability in the use of AI in defence.

The Role of Soft Law and Ethics

In addition to binding regulations, soft law instruments such as guidelines, codes of conduct, and ethical principles play a vital role in shaping the use of AI in defence. The Asilomar AI Principles, for instance, emphasize the importance of aligning AI development with human values, transparency, and accountability. These principles provide a moral framework for evaluating the ethical implications of AI technologies.

The Tallinn Manual, though primarily focused on cyber warfare, offers valuable insights into how existing laws apply to emerging technologies, including AI in defence. These soft law instruments complement binding regulations by providing flexible and adaptive guidelines for addressing the challenges posed by AI.

The Way Forward: Balancing Innovation and Regulation

Achieving a balance between technological innovation and legal oversight is critical for the responsible integration of AI in defence. Policymakers must prioritize the development of robust regulatory frameworks to address the unique challenges posed by AI. Comprehensive laws should be adopted to ensure compliance with international standards, promote accountability, and safeguard human rights.

International cooperation is essential to establish global norms and prevent the misuse of AI in warfare. Collaborative efforts through the United Nations and other international bodies can facilitate the development of binding agreements and best practices. Nations must work together to address common challenges and promote the responsible use of AI in defence.

Fostering ethical AI development is another key priority. Developers and policymakers should prioritize fairness, accountability, and human oversight in the design and deployment of AI systems. Transparency and explainability should be central to AI development to ensure that decision-making processes are understandable and verifiable.

Governments must also invest in robust cybersecurity frameworks to protect AI-driven defence systems from adversarial attacks. Strengthening cybersecurity measures is critical to mitigating the risks posed by AI vulnerabilities and ensuring the resilience of defence systems.

Conclusion

The legal aspects of AI in defence are complex and multifaceted, requiring a nuanced approach that balances innovation with accountability. International and national laws must evolve to address the unique challenges posed by AI, ensuring that these technologies are used responsibly and ethically. By fostering collaboration, transparency, and compliance with humanitarian principles, the global community can harness the potential of AI in defence while safeguarding human rights and international peace.

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Introduction

In a landmark ruling by the National Company Law Appellate Tribunal (NCLAT) Chennai, it was held that shares cannot be transmitted without obtaining a Succession Certificate. The case was presided over by Mr. Justice Venugopal M. (Judicial Member) and Ms. Shreesha Merla (Technical Member). The case is cited as Avanti Metals Pvt. Ltd. Vs. Alkesh Gupta – NCLAT Chennai.

Acquiring a Succession Certificate

In order to get a succession certificate, an individual with a vested interest must adhere to a prescribed legal process, commencing with the submission of a formal request to the appropriate district court. The court’s jurisdiction is established based on the deceased individual’s domicile at the time of death or the location of any owned property.

Process for Acquiring a Succession Certificate

• Petition Preparation: The petitioner is required to diligently draft, endorse, and authenticate a petition, and subsequently lodge it with the district judge, accompanied by the requisite court fees.
• Submission to Court: The district judge will preside over a preliminary hearing of the petition. Upon admission, a specific date for the final hearing will be scheduled, and notifications will be dispatched to the pertinent parties.
• Issuance of Certificate: Following the conclusive hearing and thorough evaluation of all relevant parties, the district court will determine the entitlement of the applicant to the succession certificate. If the judge is content, they will issue the certificate.
• Bond Submission: The district judge has the authority to request the applicant to furnish a bond, along with sureties or alternative forms of security, to safeguard against any potential financial damage that may occur as a result of the certificate’s utilisation or mishandling.

Details of the Petition

The petition for a succession certificate must contain essential information, including the precise time and location of the deceased individual’s passing, their primary place of residence, particulars regarding property located within the court’s jurisdiction, immediate family members or close relatives, the petitioner’s legal entitlements, absence of any grounds to challenge the validity of the certificate, as well as details concerning debts and securities.

Legal enforceability of Succession Certificate

A succession certificate holds jurisdiction across the whole territory of India. In order for a document issued by an Indian representative in a foreign nation to be valid in India, it must be duly stamped in accordance with the Court Fees Act of 1870. The main objective of the certificate is to safeguard individuals who are making payments for debts in a sincere manner and authorise the certificate holder to manage the financial matters of the deceased individual.

Impact of the Succession Certificate

Although the certificate enables legal transactions on behalf of the deceased individual, it does not inherently grant ownership or establish legal heirs. The identification of legitimate heirs entails a distinct legal process.

Key Findings of the Tribunal

The Hon’ble NCLAT made several key observations in their ruling:

1. Transmission of shares on the basis of a Will: The tribunal noted that this can raise complicated issues which require evidence to be read by the parties and need to be determined by a Court of Law.
2. Probate proceedings and rectification of register: If the probate proceedings are pending in a Civil Court, then the petition under the Companies Act for rectification of register would not be maintainable.
3. Dispute as to the heirship of a deceased shareholder: The tribunal held that where there is a dispute as to the heirship of a deceased shareholder, the Company could refuse transfer of shares, until such dispute is resolved by a Competent Court of Law.
4. Role of the Succession Certificate: The Succession Certificate, which specifies the debts and securities, entitles a legal heir not only to receive the Interest or Dividends but also to negotiate or transfer them.
5. Section 44 of the Companies Act, 2013: From this section, it is clear that shares are construed as movable property governed by the Articles of Association of the Company and Article 8.15 mandates that a Succession Certificate is required for the transmission of the shares.
6. Transmission of Shares without a Succession Certificate: The tribunal concluded that the prayer of the first Respondent herein seeking transmission of Shares without even obtaining a Succession Certificate, cannot be sustained.

Conclusion

This Tribunal is of the considered view that submission of a Succession Certificate, as provided for under the Articles of Association of the Appellant Company, is required for the transmission of shares of the deceased Member. This ruling underscores the importance of a Succession Certificate in the transmission of shares and sets a precedent for future cases.

Our Comments

Understanding the complex legal procedures involved in obtaining a succession certificate is crucial for those who are managing the challenges of settling an estate where the deceased person did not leave a will. Prospective candidates should consult with a lawyer to negotiate the jurisdictional requirements and procedural stages, assuring the inclusion of specific details in the petition, particularly addressing the deceased individual’s place of residence, family information, and financial responsibilities. Highlighting the significance of the preliminary hearing, candidates must provide a persuasive argument to increase the probability of being admitted. It is vital to be aware of the potential criteria for submitting bonds and to have a clear understanding of the issues for worldwide validity, especially for assets located in other countries. Effective expectation management is crucial, as the succession certificate grants authority to the rightful heir in financial affairs, but it does not inherently establish legal heirs or grant ownership rights. Obtaining expert legal advice throughout the process guarantees a more seamless experience and fosters assurance in navigating the complex legal terrain.

The post The Importance of a Succession Certificate in Share Transmission appeared first on Bhatt & Joshi Associates.

Part 1: Introduction

The Securities and Exchange Board of India, or SEBI for short, is a regulatory agency that was established by the government of India in the year 1992 under the acronym SEBI. Protecting the interests of investors in securities, as well as supervising and regulating the securities market, is the primary responsibility of the organisation. Additionally, it is responsible for regulating the process by which the stock market and mutual funds operate.

The Securities and Exchange Board of India (SEBI) has as its major mission the maintenance of the effective operation of the Indian Capital Market and the creation of an environment that is both transparent and secure for investors to invest their cash. This action was taken as a response to the proliferation of unethical practices in the financial sector during the tail end of the 1970s. These practices included insider trading, price manipulation, and violations of legislation governing stock exchanges. The government recognised the importance of establishing an institution to regulate the operations of the Indian Securities market and to reduce the number of unethical activities that were taking place. This was done in order to restore the faith of the general people.

In addition to its regional offices in New Delhi, Chennai, Kolkata, and Ahmedabad, the Securities and Exchange Board of India (SEBI) has its headquarters located in the Bandra Kurla Complex in Mumbai. In addition, the corporation maintains local offices in the cities of Patna, Kochi, Guwahati, Jaipur, and Chandigarh in addition to Bangalore.

The appointment of Ajay Tyagi to the position of Chairman of SEBI took place on January 10, 2017. The Securities and Exchange Board of India (SEBI) is structured in a hierarchical manner, with various divisions all being managed by their respective department heads. The organisation is managed by a single Chairman, is made up of seven boards of members, and is comprised of around twenty divisions. Several departments are included in the Securities and Exchange Board of India (SEBI), including Corporate Finance, Human Resources, Economic and Policy Analysis, Foreign Portfolio Investors and Custodians, Debt and Hybrid Securities, Information Technology, Enforcement, Investment Management, Legal Affairs, Office of International Affairs, Commodity Derivatives Market Regulation, and the National Institute of Securities Market, amongst others.

Learn more

• moneymint.com
• Samco.in
• testbook.com
• drishtiias.com
• byjus.com

Part 2: The Powers of SEBI

The Securities and Exchange Board of India (SEBI) is a powerful regulatory organisation that combines three key authorities into a single entity. These powers may be classified as quasi-executive, quasi-legislative, and quasi-judicial respectively.

Powers that are quasi-legislative SEBI is responsible for drafting regulations for the capital markets in its function as a quasi-legislative body. Specifically, this entails the formulation and approval of the by-laws that govern stock exchanges. A foundation for the operation of these exchanges is provided by the by-laws, which also ensure that they operate in a manner that is both fair and transparent.

Powers that are quasi-judicial Due to the quasi-judicial powers that it possesses, SEBI is able to issue rulings and directives. The Securities and Exchange Board of India (SEBI) is vested with the responsibility to adjudicate and render decisions on matters pertaining to the securities market. In the event that entities do not comply with its regulations, for instance, it has the ability to make them pay penalties.

Powers that are quasi-executive The implementation of the legislation that SEBI prepares is one of the quasi-executive duties that it performs. Among these are the pursuit of investigations and the implementation of enforcement actions. One example is that the Securities and Exchange Board of India (SEBI) has the authority to check the books of accounts of recognised stock exchanges and to request periodic returns. In addition to this, it is able to examine the books of financial intermediaries.

In addition, the Securities and Exchange Board of India (SEBI) have the authority to compel particular corporations to become listed on one or more stock exchanges. The purpose of this action is to ensure that the securities of these companies are accessible for trading to a greater segment of the general public, which will ultimately result in an increase in market transparency.

In addition, SEBI is responsible for the registration of brokers. Because of this, SEBI is able to keep a database of all of the active brokers in the securities market, which is an extremely important aspect. A further benefit is that it helps to ensure that only individuals who are suitable and appropriate are permitted to carry out the operations of a broker.

In conclusion, the Securities and Exchange Board of India (SEBI) possesses a wide range of capabilities that enable it to efficiently control and monitor the securities market. In the following section, we will talk about the procedure that SEBI uses to issue summonses, as well as the significance of complying with the system.

Learn more

• en.wikipedia.org
• samco.in
• moneymint.com
• sebi.gov.in

Part 3: The Process of Issuing Summons

The act of issuing a summons is an essential stage in the process of commencing legal proceedings and disseminating information to individuals regarding their participation in a case. When it comes to the Securities and Exchange Board of India (SEBI), this procedure is absolutely necessary for the protection of the securities market and the implementation of its regulations.

Basis for the Legality of Summons When it comes to civil proceedings, the Code of Civil Procedure, 1908, and the Code of Criminal Procedure, 1973, govern the issuance of summonses in India. The former applies to civil cases, while the latter applies to criminal ones. The courts, attorneys, and litigants who are involved in the case are provided with guidelines by these codes, which explain the procedural features of the issue of summonses.

Submission of a Petition or Complaint Request It is necessary to submit a petition or complaint to the court that is responsible for the matter in order to commence legal procedures. In the process of submitting the essential documents and information on the case, the petitioner or complaint, through their legal agent, provides the relevant details and documents, including the names and addresses of the individuals involved.

The examination conducted by the court The documents are reviewed by the court when it has received the petition or complaint, and it is determined whether or not they comply with the prescribed legal standards. In the event that the court makes the determination that the petition or complaint is in order, it will proceed with the issuance of the summons.

Preparation for the Summons After the court has made the decision to issue a summons, it will then compile the documents that are required. It is common practice for the summons to include information such as the name and address of the court, the names of the parties involved, the case number, as well as the date and time that the parties are needed to appear before the court.

The Act of Serving Summons In the following phase, which is of the utmost importance, the summons is served on the parties involved. In India, a summons can be issued in a number of different ways, including through personal service, registered mail, and even, in certain instances, through electronic means. The process of personal service involves delivering the summons to the individual who is the subject of the summons, whereas registered post necessitates sending the summons through the mail along with an acknowledgment of receipt.

Recognisance of the Summons Served The party is required to confirm receipt of the summons by either signing or affixing a thumb impression to the acknowledgement section of the summons document. This must be done immediately after their receipt of the summons. It is evidence that the party has been properly informed of their role in the matter, and this statement acts as evidence.

Inability to Appear in Person In the event that a party that has been summoned does not show up before the court on the date that has been indicated, the court may take appropriate actions taking into consideration the circumstances. The issuance of a bailable or non-bailable warrant, the imposition of penalties, or the continuation of the case in the absence of the party’s presence are all examples of this approach.

Procedural Compliance and Procedures After the parties have responded to the summons by appearing before the court, they will have the opportunity to present their side of the argument, evidence, and witnesses. In the course of the proceeding, the court will listen to both sides of the argument and then make conclusions based on the merits of the case as well as the applicable legal provisions.

With the legislative duty of protecting the securities market and the interests of genuine investors or participants, the Securities and Exchange Board of India (SEBI) is granted the authority to issue summonses, which includes the ability to compel the production of documents or information. It is not possible to minimise the seriousness of the Noticee’s contempt for the summonses that were issued by SEBI and their subsequent refusal to cooperate with the inquiry process.

Learn more

• lawsisto.com
• taxguru.in
• blog.taxomart.com

Part 4:  Compliance and Non-Compliance

To ensure that the securities market continues to operate without any disruptions, it is of the utmost significance that the summons issued by SEBI be complied with. The SEBI Act equips the government with the authority to conduct investigations and to collect information and documents for the purpose of conducting investigations. The Securities and Exchange Board of India (SEBI) has been given the authority to issue summonses in order to compel the production of documents or information. Keeping in view the legislative mandate of protecting the securities market and the interests of the genuine investors or participants in the securities market, the Securities and Exchange Board of India (SEBI) has been granted the authority to issue summonses.

Relevance of Obligation to Comply For the purpose of bringing an inquiry to a successful conclusion, timely filing of information is of utmost importance. If an entity does not cooperate with the inquiry, it may be detrimental to the interests of investors and the securities market. This is because any delay in the investigation may have unintended consequences. The behaviour of the Noticee, which consisted of not paying attention to the summonses that were issued by SEBI and, as a consequence, not cooperating with the investigative process, is not something that can be taken lightly.

Resulting Consequences of Failure to Comply There may be severe repercussions for those who do not comply with the summonses issued by SEBI. The behaviour of the Noticee, which consisted of not paying attention to the summonses that were issued by SEBI and, as a consequence, not cooperating with the investigative process, is not something that can be taken lightly. This is especially true in situations where the appellants were involved in offences of such a serious kind that were damaging to the interests of legitimate investors as well as to the efficient and secure operation of the securities market.

The appellants’ statements were unable to be recorded because they did not reply to the second summons that was issued and because they did not appear before the Investigating Authority when they were required to do so. This in turn has made the investigation more difficult to complete. The appellants had failed to deliver the papers and information that were requested by summonses dated 01.04.2003 and 09.04.2003 respectively, which had consequently impacted the way in which the investigation was carried out.

If the appellants comply with one of the summonses that were issued on 02.07.2001 and 26.07.2001, respectively, this does not in any way exonerate them of their responsibility to comply with the subsequent summonses that were issued on various occasions. The appellants were obligated to provide the Investigating Authority with complete cooperation and to promptly produce any and all papers, records, and information that were requested for the investigation at various points in time.

Learn more

• barandbench.com
• blog.ipleaders.in
• taxguru.in
• sebi.gov.in

Part 5:  Penalties and Judgments

If an organisation does not comply with the regulations that it has established, the Securities and Exchange Board of India (SEBI) has the authority to levy penalties against such organisation. According to the Securities and Exchange Board of India Act, any individual who fails to provide the Board with any document, return, or report is subject to a penalty of one lakh rupees for each day that such failure persists, or one crore rupees, whichever amount is less.

As a result of non-compliance, penalties In a case involving Dwitiya Trading Limited, the Securities and Exchange Board of India (SEBI) imposed a monetary penalty of Rs. 5,00,000/- (Rupees Five Lacs only) on the Noticee, Jahman Dealers Private Limited, for failing to comply with the summonses that were issued on September 27, 2019, and subsequently two reminder summonses that were issued on October 23, 2019, and November 01, 2019. It was made very clear that the Noticee was not willing to participate with the inquiry being conducted by SEBI, which is a statutory regulator. Defaults of this nature pose a significant threat to the regulatory framework. In situations like these, taking a more tolerant stance would be contrary to the meaning of section 15A (a) of the law.

Judgements of Notable Importance Several important judgements have been handed down in relation to the penalty for non-compliance with SEBI’s summons from time to time. For example, in the case of Kunnamkulam Paper Mills Ltd. v. SEBI, the appellants were directors of the firm that violated the SEBI (Disclosure and Investor Protection) Guidelines, 2000 by allotting a high number of equity shares. This was done in contravention of the guidelines. SEBI issued a directive to the appellant, directing them to return the money obtained from the investors in accordance with the problem, together with interest5. Nevertheless, the appellants did not comply with the same, which resulted in the Securities and Exchange Board of India (SEBI) initiating a criminal prosecution by means of a private complaint in accordance with Section 24 (1) read with Section 27 of the SEBI Act, 1992 (SEBI Act), 19925. As a result, the appellants were found guilty after the charge was framed for the commission of an offence under Section 24. The accused were each had to pay a fine of fifty lakhs of rupees, and if they failed to do so, they were sentenced to simple imprisonment for a term of one year.

In a different case, Manoj Gokulchand Seksaria v. State of Maharashtra, the petitioner challenged the orders that were issued by the Special Court (CBI) taking cognizance and issuing process against him in relation to the FIR that was registered by the Chief Justice of the Nation, Securities and Exchange Board of India (SEBI). The petitioner challenged these orders under Article 227 of the Constitution of India read with Section 482 of the Criminal Procedure Code. 

The First Information Reports (FIRs) were filed in response to allegations that certain brokers and individuals working for Yes Bank Limited had allotted initial public offerings (IPOs) under fictitious names in order to corner more shares that were intended for retail investors and then sell them on higher returns after the listing, thereby enriching themselves with profits that were not justified. The corporations opened demat accounts under false and benami names in order to corner the largest quota of shares that were available in initial public offerings (IPOs). 

During this time, in April of 2007, the Securities and Exchange Board of India (SEBI) released a circular that included rules for consent orders and the consideration of requests for the composition of offences. By doing so, the Securities and Exchange Board of India (SEBI) was granted the authority to combine civil and criminal proceedings that it had initiated or was investigating against a variety of parties who had been prosecuted for violating SEBI statutes. Additionally, the petitioners took advantage of the aforementioned method by using an amount of around 2.05 crores of rupees as the disgorgement amount towards the reduction of the settlement expenses. Following this, the Securities and Exchange Board of India (SEBI) issued a consent order, which resolved all of the processes that were still outstanding under Section 11-B of the SEBI Act. In light of this, the petitioner submitted a writ petition in an effort to have the criminal proceedings that were initiated on the basis of the same set of claims that were ultimately compromised overturned.

Learn more

• taxguru.in
• sebi.gov.in
• sebi.gov.in
• sebi.gov.in
• scconline.com

Part 6: Case Study

Allow me to take a look at a recent instance in which a penalty was imposed for failing to comply with a summons issued by SEBI. According to the decision that was handed down on July 23, 2021, the case is known as “Prakash Gupta vs. Securities and Exchange Board of India.”

Brief history Prakash Gupta, the appellant, was charged with committing an offence in accordance with Section 24 (1) of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as the “SEBI Act”). Additionally, the appellant requested that the offence be compounded in accordance with Section 24A. The application, on the other hand, was denied by the Additional Sessions Judge, who upheld the objection of the Securities and Exchange Board of India, which stated that the offence could not be compounded without the board’s agreement.

The Decision of the High Court During the revision process, the High Court of Delhi upheld the order that was issued by the Trial Judge. It was decided by the High Court that the trial had progressed to the point where the last arguments were being presented, and that the plea for compounding could not be granted without the approval of SEBI.

Decision Made by the Supreme Court In its decision, the Supreme Court of India separated the case into many categories for the purpose of analysis. These sections included the appeal, the initial public offering (IPO), the investigation conducted by SEBI and the criminal complaint, the motion for compounding, the representations made by counsel, and the analysis.

It was brought to the attention of the Supreme Court that the appellant is currently facing charges for an offence that is outlined in Section 24 (1) of the Securities and Exchange Board of India Act, 1992 (often known as the “SEBI Act”). Additionally, the appellant requested that the offence be compounded in accordance with Section 24A. The application was denied by the Additional Sessions Judge in a judgement dated November 15, 2018, and the objection of the Securities and Exchange Board of India, which said that the offence could not be compounded without the board’s agreement, was upheld.

The conclusion is that this case serves as a reminder of the significance of complying with the restrictions that are set forth by SEBI, as well as the severe penalties that can arise from failing to comply with these regulations. In addition to this, it emphasises the role that the judicial system plays in maintaining the honesty of the securities market and safeguarding the interests of investors.

Learn more

• indiankanoon.org
• taxguru.in
• main.sci.gov.in
• main.sci.gov.in

Part 7: Conclusion

In this article, we have discussed the powers and responsibilities of the Securities and Exchange Board of India (SEBI), as well as the procedure of issuing summonses and the consequences of non-compliance, which include penalties and judgements linked to the matter.

When it comes to ensuring that the securities market continues to operate in an honest manner, SEBI, as a regulatory organisation, plays a significant role. Because of its capabilities, which range from quasi-legislative to quasi-judicial to quasi-executive, it is able to regulate and monitor the market in an efficient manner.

One of the most essential tools that SEBI uses to ensure compliance with its regulations is the practice of issuing summonses. In order to ensure that the securities market continues to operate efficiently, it is imperative that these summonses be complied with. The failure to comply with regulations can result in serious consequences, including significant fines.

We gained an understanding of how failure to comply with the laws set forth by the Securities and Exchange Board of India (SEBI) might result in legal procedures and penalties by examining the case study titled “Prakash Gupta vs. SEBI.” By serving as a reminder of the significance of compliance and the role that SEBI plays in protecting the interests of investors, this case serves important purposes.

One cannot exaggerate the significance of the Securities and Exchange Board of India’s (SEBI) involvement in preserving the integrity of the securities market. It is not only a legal requirement, but also a prerequisite for the market to operate in a manner that is both fair and transparent, and compliance with its norms is required.

Download Booklet on SEBI Regulations in India – Market Compliance & Investor Protection

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Introduction

In the previous articles, we discussed the changes in bail provisions and the regular bail provision under the Bharatiya Nagarik Suraksha Sanhita (BNSS), also known as the New CrPC. In this article, we will delve into the changes in the anticipatory bail provision under the BNSS.

Changes in Anticipatory Bail Provision under the BNSS

Anticipatory bail is a provision that allows a person who apprehends arrest for a crime to apply for bail before the court in anticipation of the arrest. The BNSS has made a significant change in the anticipatory bail provision.

The existing law disallows granting of anticipatory bail to individuals accused of committing a gang rape on a woman under sixteen years of age. However, the new law has enlarged the applicability of the provision by not allowing anticipatory bail to individuals who are accused of committing gang rape on a woman under eighteen years of age.

This change is reflected in Sub-section 4 of Section 482 of BNSS, which states that nothing in this section shall apply to any case involving the arrest of any person on an accusation of having committed an offense under section 65 and Sub-section (2) of section 70 of the Bharatiya Nyaya Sanhita, 2023.

Impact of the Changes

This change in the anticipatory bail provision has significant implications. It extends the protection of the law to women under eighteen years of age, aligning with the recognition of eighteen as the age of majority in many other legal contexts. It also sends a strong message about the seriousness with which the law views offences of gang rape.

Conclusion

This article provided a detailed analysis of the changes brought in the anticipatory bail provision under the BNSS. The extension of the provision to protect women under eighteen years of age represents a significant shift in the legal process. In the next article, we will discuss the bail provisions under special laws like the NDPS Act. Stay tuned for more insights into this important legal reform.

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Introduction

In the previous articles, we discussed the changes in bail provisions, regular bail provisions, anticipatory bail provisions under the Bharatiya Nagarik Suraksha Sanhita (BNSS), and bail provisions under the NDPS Act. In this article, we will delve into the bail provisions under another special law, the Unlawful Activities (Prevention) Act (UAPA).

Bail Provisions under the UAPA Act

The UAPA enables this under Section 43D by statutorily extending periods of pre-trial detention and police custody, and raising a bar against bail in case there are reasonable grounds to believe that the allegations against the accused are prima facie true. For non-citizens, the UAPA bars the right to bail.

Landmark Judgments

Several landmark judgments have shaped the interpretation and application of the UAPA’s bail provisions:

• Angela Harish Sontakke v State of Maharashtra (2016): The Supreme Court granted Sontakke bail in 2016, stating that the alleged offence must be balanced against how long the accused had suffered in jail, and how likely a swift trial was.
• National Investigation Agency v. Zahoor Ahmad Shah Watali (2019): The Supreme Court provided its first interpretation of Section 43D (5) in the 2019 Watali judgment. The Court held that the ‘degree of satisfaction’ the Bench must have while determining if a prima facie case exists for bail is ‘lighter’ under the UAPA than in other criminal legislations.
• Union of India v K.A. Najeeb (2021): The Supreme Court held that despite restrictions on bail under the UAPA, constitutional courts can still grant bail because the fundamental rights of the accused have been violated.

Impact of the Provisions

The bail provisions under the UAPA have significant implications. They provide a clear framework for the grant of bail in cases involving unlawful activities. These provisions aim to balance the need for effective law enforcement with the rights of the accused.

Conclusion

This article provided a detailed analysis of the bail provisions under the UAPA Act. The stringent parameters for the grant of bail under this Act represent a significant aspect of the legal process in cases involving unlawful activities. This concludes our series on bail provisions under the BNSS and special laws. We hope you found these insights into this important legal topic informative and helpful.

Learn More : 

• 1.scobserver.in
• 2.scconline.com
• 3.civilsdaily.com
• 4.thewire.in
• 5.cjp.org.in

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Introduction

In the previous articles, we discussed the changes in bail provisions, regular bail provisions, and anticipatory bail provisions under the Bharatiya Nagarik Suraksha Sanhita (BNSS), also known as the New CrPC. In this article, we will delve into the bail provisions under special laws, focusing on the Narcotic Drugs and Psychotropic Substances Act (NDPS Act).

Bail Provisions under the NDPS Act

The NDPS Act has stringent parameters for the grant of bail. Under Section 37 (1) (b) (ii), the limitations on the grant of bail for offenses punishable under Sections 19, 24, or 27A and also for offenses involving a commercial quantity are: The Prosecutor must be allowed to oppose the bail application, and There must exist ‘reasonable grounds to believe’ that (a) the person is not guilty of such an offense; and (b) he is not likely to commit any offense while on bail.

Landmark Judgments

While there are no specific landmark judgments related to bail provisions under the NDPS Act, the interpretation and application of these provisions have been the subject of numerous court cases. These cases have shaped the understanding and implementation of the NDPS Act’s bail provisions.

Impact of the Provisions

The bail provisions under the NDPS Act have significant implications. They provide a clear framework for the grant of bail in cases involving narcotic drugs and psychotropic substances. These provisions aim to balance the need for effective law enforcement with the rights of the accused.

Conclusion

This article provided a detailed analysis of the bail provisions under the NDPS Act. The stringent parameters for the grant of bail under this Act represent a significant aspect of the legal process in cases involving narcotic drugs and psychotropic substances. In the next article, we will discuss the bail provisions under another special law, the Unlawful Activities (Prevention) Act (UAPA). Stay tuned for more insights into this important legal topic.

The post Bail Provisions under Special Laws: NDPS Act appeared first on Bhatt & Joshi Associates.

Introduction

In the previous article, we introduced the changes in bail provisions under the Bharatiya Nagarik Suraksha Sanhita (BNSS), also known as the New CrPC. We discussed the newly introduced definitions of “bail”, “bail bond”, and “bond”, and the changes made concerning undertrial prisoners. In this article, we will delve deeper into the changes in the regular bail provision under the BNSS.

Changes in Regular Bail Provision under BNSS

The BNSS has made a significant change in the regular bail provision. In the existing law, the need for police custody beyond the first fifteen days is not a ground to deny bail. However, the new law states that if the court finds that the custody of the accused required for identifying the witnesses during the investigation is more than the first fifteen days, the accused shall be entitled to regular bail.

This change is reflected in Proviso 3 of Section 480 of BNSS, which deals with when bail can be taken in case of a non-bailable offense. It states that the mere fact that an accused person may be required to be identified by witnesses during an investigation or for police custody beyond the first fifteen days shall not be sufficient ground for refusing to grant bail if he is otherwise entitled to be released on bail and gives an undertaking that he shall comply with such directions as may be given by the Court.

Impact of the Changes

This change in the regular bail provision has significant implications. It provides a clear timeline for the police custody required for identifying witnesses during the investigation, thereby preventing indefinite detention of the accused. It also ensures that the rights of the accused are protected while maintaining the effectiveness of the legal process.

Conclusion

This article provided a detailed analysis of the changes brought in the regular bail provision under the BNSS. The introduction of a clear timeline for police custody required for identifying witnesses during the investigation represents a significant shift in the legal process. In the next article, we will discuss the changes in the anticipatory bail provision under the BNSS. Stay tuned for more insights into this important legal reform.

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Introduction to BNSS: Transforming Bail Provisions

The Bharatiya Nagarik Suraksha Sanhita (BNSS), also known as the New CrPC, is a significant reform in the Indian legal system. It introduces several changes to the existing Criminal Procedure Code (CrPC), aiming to make the legal process more efficient and transparent. This article will focus on the changes made in the bail provisions under the BNSS.

Definitions of Bail, Bail Bond, and Bond

One of the key changes in the BNSS is the introduction of definitions for the terms “bail”, “bail bond”, and “bond”. These terms were not explicitly defined in the CrPC, leading to ambiguity. The BNSS provides clarity by defining these terms in Section 2:

• Bail: Defined as the release of a person accused of or suspected of the commission of an offense from the custody of law upon certain conditions imposed by an officer or Court on execution by such person of a bond or a bail bond.
• Bail Bond: Defined as an undertaking for release with surety.
• Bond: Defined as a personal bond or an undertaking for release without surety.

Changes for Undertrial Prisoners

The BNSS has introduced significant changes concerning undertrial prisoners. These changes include:

• Early Release of First-Time Offenders: The new law allows for the early release of first-time offenders who have spent up to one-third of their sentence as an undertrial prisoner.
• Denial of Bail for Multiple Pending Cases: The new law denies bail to undertrial prisoners if an investigation, inquiry, or trial in more than one offense or multiple cases is pending against a person.

These changes aim to balance the rights of the accused with the need for an effective legal process.

Conclusion: Bail Provisions under the BNSS

This article provided an overview of the changes in bail provisions under the BNSS. The introduction of clear definitions and changes to the treatment of undertrial prisoners represent significant shifts in the legal process. In the next article, we will delve deeper into the changes in the regular bail provision under the BNSS. Stay tuned for more insights into this important legal reform.

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