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10 Oct

The Arbitral Tribunal is Cast With Duty to Give Reasons While Exercising Its Discretion Under Section 31(7) of the Arbitration and Conciliation Act

Hon’ble Supreme Court in a recent judgment[1] held that when a discretion is vested in the Arbitral Tribunal under Section 31(7) of the Arbitration and Conciliation Act, 1996 to determine the rate of interest, whether the interest is payable on whole or any part of the money and whether it is to be awarded to the whole or any part of the period stipulated, the Tribunal has the duty to apply its mind and give reasons as to how it deems a certain interest rate as reasonable and to decide why the interest is payable on whole or any part of the money and also as to why it is to be awarded to the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made. While exercising its jurisdiction under Article 142 of the Constitution of India, The Hon’ble Court reduced the rate of interest from 18% to 9% and further reduced the period by 20 odd years on account of the lapse of the Claimant-Respondent in taking timely action.

The Respondent was awarded the contract for construction of missing link of 3 kms stretch on NH6 on 16^th December, 1971 to be completed within one year. The contract amount was Rs.4,59,330/. However the work could be completed by 30^th August 1977. The Respondent was already paid an amount of Rs.3,36,465/ by then. The Respondent issued a notice to the Appellant regarding his claim only on 25^th July 1989 followed by the Respondent filing his claim of Rs.1,45,28,198/ and interest @ 19.5% from 1^st April 1976 to 15^th March 2002. The learned Arbitrator, vide award dated 24^th August 2004, awarded a sum of Rs.9,20,650/ and an interest pendent lite with effect from 1^st April 1976 to the date of the award at the rate of 18% per annum which came to Rs. 46,90,000/. The learned Arbitrator further directed the future interest to be paid at the rate of 18% per annum on the total of the aforesaid two amounts till actual payment.

The Award was challenged on various grounds including on the ground that the interest amount of Rs.46,90,000/ is almost five times that of the main award amount of Rs.9,20,650/. The Appellant relied on the judgments in Rajendra Construction Co. v. Maharashtra Housing & Area Development Authority and Others [(2005) 6 SCC 678], Krishna Bhagya Jala Nigam Ltd. v. G. Harischandra Reddy and Another [(2007) 2 SCC 720] and Mcdermott International Inc. v. Burn Standard Co. Ltd. and Others [(2006) 11 SCC 181].

The Court examined the issue in the light of the discretion given to an Arbitral Tribunal under Section 31(7) of the Arbitration and Conciliation Act, 1996 (“1996 Act”) to determine the rate of interest, whether interest would be applicable on the whole or any part of the money awarded, and whether it shall be applicable for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made. The Court arrived at the decision that such discretion when vested in the Arbitral Tribunal, it has a duty to exercise the discretion while applying its mind to the facts and circumstances of the case and give reasons for arriving at a certain interest rate, the sum of which it shall be applicable, and period for which it shall apply.

The Court observed that the Arbitral Tribunal in the matter did not do any such exercise of reasoning and further failed to exclude the period of more than 20 years during which it was the Respondent-Claimant who did not raise its claim and further did not take any action after decree was passed in 1990 and then after passing of 1996 Act until 2001 when the Respondent-Claimant finally filed an application under section 11 of the 1996 Act. The Court in this regard held that a party cannot be permitted to derive benefits from its own lapses. With regard to the determination of the rate of interest, the Court made reference to various judgments including the observation made by the Court in Mcdermott International Inc. wherein it was held that given the long lapse of time, it will be in furtherance of justice to reduce the rate of interest while exercising the jurisdiction under Article 142 of the Constitution of India. The Court, accordingly found that the present case was also a fit case wherein this Court needed to exercise its powers under Article 142 of the Constitution of India to reduce the rate of interest. While taking into consideration the conduct of the Respondent in delaying the proceedings at every stage which led to a long pendency of the dispute, the Court concluded that, though it will not be in the interest of justice to interfere with the principal award, it would be a fit case wherein the interest at all the three stages, that is prereference period, pendente lite and postaward period, requires to be reduced. The Court, therefore, was pleased to reduce the rate of interest to 9% from 18%

[1] Executive Engineer (R and B) and Ors. v. Gokul Chandra Kanungo (Dead) Thr. His Lrs. [CIVIL APPEAL NO. 8990 OF 2017 decide on 30.09.2022]

1 Oct

Trademarks And Copyrights Would Constitute ‘Goods’ Under Section 5(21) Of IBC And Royalty Payable Against Licensing IPR Shall Be Operational Debt

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Insolvency and Bankruptcy

In a recent order passed in Somesh Choudhary v Knight Riders Sports Private Limited & Anr. under Company Appeal (AT) Insolvency No. 501 of 2021, the Hon’ble National Company Law Appellate Tribunal, Principal Bench, New Delhi (“NCLAT“) dismissed the appeal filed under Section 61 of the Insolvency and Bankruptcy Code, 2016 (“Code“) and upheld the order dated passed by the National Company Law Tribunal, New Delhi, and held that the claims arising out of the grant of an exclusive license to use intellectual property rights fall within the ambit of the definition of operational debt.

Global Fragrances Pvt Ltd (“Corporate Debtor“) and Knight Riders Sports Private Limited (“Respondent“) entered into a licensing agreement. The Respondent granted exclusive rights and allowance to the Corporate Debtor to use the trademark ‘KKR‘ to manufacture, distribute and advertise licensed products including deodorants, hair gels, and perfumes in return of payment of Minimum Guaranteed Royalties by the Corporate Debtor as compensation for enjoying the exclusive rights. On delivery of the rights, the Respondent raised invoices for an aggregate sum of Rs. 40,60,147/- towards the outstanding Minimum Guaranteed Royalties payable by the Corporate Debtor as per the agreement. The Respondent received only a part payment. Since the Corporate Debtor failed to keep its payment obligations the Respondent filed an application for initiation of the corporate insolvency resolution process under Section 9 of the Code, claiming the amount due as an operation debt under the Code. The application was admitted by the National Company Law Tribunal, New Delhi and aggrieved by the same, Mr Somesh Choudhary (a shareholder of the Corporate Debtor) filed this appeal.

The Corporate Debtor had opposed the petition on the ground that claims arising out of non-payment of Minimum Guaranteed Royalties did not pertain to non-payment of any goods or services as proided under section 5(21) of the Code and therefore Minimum Guaranteed Royalties were not operational debt. The Corporate Debtor further contented that the Respondent has failed to show that how the Corporate Debtor has used the trademark of the Respondent for sale, marketing etc. and hence does not fulfill the parameter set out in the judgment of the NCLAT in M. Ravindranath Reddy v Mr. G. Kishan & Ors. [Company Appeal (AT) (Ins.) No. 331/2019], which held that any “‘debt’ arising without nexus to the direct input to the output produce or supplied by the ‘Corporate Debtor’, cannot be considered as an ‘Operational Debt’.

In order to test the direct nexus, the NCLAT examined the licensing agreement between the parties and held that the trademark ‘KKR‘ was used in the development, packaging and advertisement of the Licensed Products which established a direct nexus between the payment of the MGR and the business operations of the Corporate Debtor. NCLAT, however, dismissed the argument advanced by the Corporate Debtor referring to M. Ravindranath Reddyjudgment and stated that Ravindranath Reddy judgment had been overturned as it did not correctly deal with the meaning of “service” under section 5(21) of the Code and referred to the judgment by the larger bench in Jaipur Trades Expocentre Private Limited v. M/s. Metro Jet Airways Training Private Limited [2022 SCC OnLine NCLAT 263]. The NCLAT dismissed the appeal and upheld the order of NCLT stating that Minimum Guaranteed Royalties are operational debts to be paid against the licensing of trademarks which in turn constitute moveable property and accordingly would be considered as “goods” under the Sale of Goods Act, 1930 wherein the term “goods” includes all moveable property other than actionable claims and money. The NCLAT relied on the decision of the Hon’ble Supreme Court in Vikas Sales Corporation v. Commissioner of Sales Tax [(1996) 4 SCC 433]. Further, the NCLAT observed that pursuant to Section 7 of the Central Goods and Service Act 2017, any utilisation or enjoyment of intellectual property rights would be considered a service provided by the intellectual property rights holder. The NCLAT referred to the decision of the Madras High Court in the matter of AGS Entertainment Private Limited v. Union of India[2013 SCC Online Mad 1823] and held that by providing the Corporate Debtor with a right to utilise the trademark of ‘KKR‘ in its Licensed Products, the Respondent had temporarily provided permission to use its trademark, which would constitute the provision of a service by the Respondent. The Appellate Tribunal further reasoned that a guaranteed minimum royalty is a periodic payment made by a licensee towards a licensor to utilise a licensed product for an agreed period.

24 Sep

The State Claiming under the Gujarat Value Added Tax (GVAT) Act, 2003 is a Secured Creditor under Section 53(1)(b)(ii) of IBC

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Insolvency and Bankruptcy

The Supreme Court on the appeal of a Sales Tax Officer of the Gujarat government against the 2019 judgment passed by the National Company Law Appellate Tribunal (NCLAT), in the matter of State Tax Officer (1) Vs. Rainbow Papers Ltd. [Civil Appeal NO. 1661 of 2020 decided on 06.09.2022] while answering the issue whether the provisions of the IBC, in particular, Section 53, overrides Section 48 of the Gujarat Value Added Tax, 2003 (GVAT Act), has held that the provisions are neither inconsistent or in conflict with one another and therefore there is no question of overriding. The State would be considered a secured creditor under the GVAT Act under Section 53(1)(b)(ii) and a resolution plan which ignores the statutory demands payable to state governments, or legal authorities, is liable to be rejected. The Court observed that the definition of secured creditor in the Insolvency and Bankruptcy Code (IBC) does not exclude any government or legal authority.

Section 48 of the GVAT Act provides that : “Notwithstanding anything to the contrary contained in any law for the time being in force, any amount payable by a dealer or any other person on account of tax, interest or penalty for which he is liable to pay to the Government shall be a first charge on the property of such dealer, or as the case maybe, such person.” Section 53 of Insolvency and Bankruptcy Code, 2016 provides for the waterfall mechanism for the distribution of liquidated assets amongst the creditors of the corporate debtor.

While interpreting the Government dues under section 48 of the GVAT as one of secured creditor within the waterfall mechanism, the Court clarified that the financial creditors of a company cannot secure their own dues in approving the resolution package of a bankrupt company at the expense of other obligations including statutory dues owed to a government authority. The court also clarified that a company would have to be liquidated and its assets sold and distributed in accordance with Section 53 of the IBC if it was unable to pay its debts, which should include any statutory obligations to the government or other authorities, and there is no plan that contemplates dissipating those debts in a phased, uniform proportional reduction.

The appeal was against the National Company Law Tribunal (NCLT) order had passed holding that the government cannot claim first charge over the property of a corporate debtor, as Section 48 of the Gujarat Value Added Tax (GVAT) Act, 2003, which provides for first charge on the property of a dealer in respect of any amount payable by the dealer on account of tax, interest, penalty, among others, under the said GVAT Act, does prevail over Section 53 of the IBC. The NCLAT affirmed the order of the NCLT.

Setting aside the NCLAT order, the Apex Court held, “In our considered view, the NCLAT clearly erred in its observation that Section 53 of the IBC over-rides Section 48 of the GVAT Act”.

17 Sep

Whether Intermediaries Like Telegram Can be Directed to Disclose the Identity of the Creators of the Channels Infringing Copyright or Trade Mark of Other Person?

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The dispute surrounding listing of Rooh Afza, manufactured by a company based in Pakistan, on Amazon has been broiling and the matter is being heard by the Hon’ble Delhi High Court which in its interim order has recently directed Amazon to remove the Pakistan based Rooh Afza from its platform in India. Apart from the violation of Hamdard’s IP rights in India over Rooh Afza, the listing of Pakistan-manufactured products was found to be lacking the contact details of the manufacturer, thus making Amazon, an intermediary under Information Technology Act, 2002 (“IT Act”), liable for the lack of the relevant information which could potentially mislead consumers about the product they might be purchasing, or they might wrongly assume that the Pakistan Hamdard is associated with the Indian Hamdard Laboratories. It is now trite that the platforms which are intermediaries under IT Act shall be liable to address the complaint of copyright or trademark violation by de-listing or removing the product or channel.

Similarly, Telegram, the messaging app, also falls within the category of an intermediary under IT Act. The platform shall be liable to remove channels that violate the IP rights of the owners. However, the question that recently came up for consideration before the Delhi High Court was different. The issue emerged when the Plaintiffs – Ms. Neetu Singh, who owns a coaching academy and is an author of books and contents for the preparation of competitive examinations including the examinations of Staff Selection Commission (SSC), Bank Probationary Officer (PO), CDS, NDA, etc. and her company K.D. Campus Pvt. Ltd. found that her copyrighted works in form of videos, lecture, books and study material etc. were illegally being disseminated through various Telegram channels. According to the Plaintiffs, since any abuse on Telegram channels can be reported as per the Privacy Policy of Telegram, the Plaintiffs after acquiring knowledge of the illegal dissemination of the Plaintiffs’ works, called Telegram to take down the impugned channels and also sent e-mails to the e-mail addresses where abuse can be reported. As a response some channels were taken down and others continued to exist while new channels came up like hydra heads. Taking down the channels itself was turning out to be completely ineffective in such a scenario. The infringers operated through private channels and the phone numbers or other details were not visible. Thus, it was not possible to locate the owners of such channels. Since Telegram also makes secret chats possible, the phone numbers could not be traced and the identity of the person(s) was also unknown. Such information is exclusively available only with Telegram.

Telegram had a limited defense in the said suit. As it was already in the process of taking down such infringing channels, it only opposed the grant of relief to the plaintiffs in the interim application to the extent that it cannot share the data relating to the creators or users of the channels. Telegram contended that the said data is stored in Telegram’s data servers in Singapore and the law of Singapore prohibits such disclosure. Telegram uses a distributed physical infrastructure and is bound by the provisions of the Personal Data Protection Act, 2012, Singapore. Telegram itself is a Dubai-based company and is bound by the laws of Dubai. Moreover, In India it being an intermediary under the IT Act, it was not liable to disclose the identity as none of the pre-conditions which permit the intermediary to disclose the identity of the users, as per the IT Guidelines were satisfied. Telegram relied on Rule 3(1)(d) of the Information Technology Intermediary Guidelines and Digital Media Ethics, 2021 (IT Guidelines) and contended that unless and until, any one of the situations as contemplated in the first proviso to Rule 4(1)(2) of the said guidelines was satisfied, even a Court order cannot be passed directing disclosure of the basic subscriber information. As per Section 72A of the IT Act, any disclosure of information in breach of a lawful contract i.e., the contract between the Telegram platform and the subscriber/ creator of the impugned channels, would also be contrary to law and would constitute an offence.

The Court started its analysis by recording its concern that the number of channels that can be created despite taking down of existing ones are innumerable. The creators of the channels were able to mask their identity on account of how the app operates and its policies. Therefore, repeated blocking of the channels was proving to be insufficient. This is the fulcrum of the reasoning given by the court in the judgment.

The Court looked into the actions that Telegram is required to take as per its own policy. As per the Q&A provided on Telegram, it does not process any requests related Telegram chats and group chats as they are private amongst their participants. However, in relation to the sticker sets, channels, and bots on Telegram which are publicly available it has been provided that – “If you see a bot, channel, or sticker set that is infringing on your copyright, kindly submit a complaint to [email protected].” The Plaintiffs did follow the procedure and registered its complaint.

The Court then went on to analyse the Copyright Act, 1957 to determine if the Indian Courts have jurisdiction to direct the Respondent-Telegram to disclose the identity of the creators of the channels in the light of the fact that the Telegram stores the data on cloud and that its servers are located in Singapore – this being the core defense sought by the Respondent. The Court ruled that since the Plaintiff was the owner of copyright in the works, this alone fulfills the criteria of jurisdiction as per Section 62(2) of the Copyright Act which states that an owner can file a suit for infringement in a place where the said owner resides or carries on his business. This makes Delhi High Court the court of competent jurisdiction. The Court added that as the materials being circulated relate to Indian competitive examinations, it is likely that the infringers, though unidentified at this stage, may also be based out of India.

The Court further reasoned that the provisions of the Copyright Act were widely worded to be able to cover and extend protection in the situation where the illegal activities were done with the aid of recent technology as in the present case. The definition of “infringing copy” was broad enough to cover electronic copies which were being circulated on Telegram channels. Not only Section 14(1)(a) specifically included reproduction by “electronic means”, the devices of the channel operators including smart phones, computers, servers, and such other devices, which were permitting and enabling such dissemination and communication, would constitute “plates” within Section 2(t) of the Act (defined as “any device used for reproducing copies of the work”) and they would constitute “duplicating equipment”. The Court therefore concluded that “… both civil and criminal Courts in India would always be vested with jurisdiction to adequately deal with dissemination of infringing material through such devices and merely because the messaging service has its server located abroad, the same cannot result in the infringer escaping from the consequences of infringement. All contentions to the contrary would be untenable.” The Court then noted that the only party that is in possession of the information relating to the devices used, IP addresses used, channels created, number of users, identity of the devices through mobile numbers etc., was Defendant No.1 – Telegram.

The Court laid additional reasons for concluding jurisdiction in favour of the Indian Courts and why the Singaporean law cannot be an excuse for Telegram to justify the non-furnishing of the information relating to the channels –

infringement unabatedly was continuing within India;
Since the content was for preparation of exams in India, the accounts of infringing channels were likely to have been created from India and the data of such accounts would have been uploaded from India;
For the same reason the devices used in circulating the infringing material must be located in India and so be the owners of such channels/devices;
the conventional concepts of territoriality no longer would exist, as the data is accessible across different jurisdictions, including India – the physical server being outside India is inconsequential in determining jurisdiction of Indian Courts.
On analysis of law of Singapore, the Court observed that the law specifically recognized violations of law (which in this case is violation of copyright and other intellectual property rights) as an exception to privilege of privacy, when details of the originators of the infringing data can be revealed
Furthermore, the copyrighted works are entitled to automatic protection in all WTO countries under the Berne Convention for the Protection of Literary and Artistic Works, 1886 read with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), 1995 to which Singapore, a WTO country, is a signatory. This shall provide reciprocal protection to authors who can enjoy rights across the world even without seeking registrations – India recognizes copyright in foreign works and reciprocally, foreign countries recognize the copyright granted under Indian Law.

While enumerating the remedies that an IP owner or a copyright owner is vested with, the Court stated that owner has the right to seek injunction and the right to claim damages. The latter remedy acts as a deterrent against further infringement. However, the remedy shall become completely a ‘toothless relief’ if infringers are permitted to hide their identity through technological means provided by Telegram, and further if their identity is not directed to be disclosed. Injunction becomes equally ineffective since it does not restrain the infringers from creating new infringing channels. ‘Take down’ or blocking orders were merely token relief. Plaintiffs would then be required to seek an injunction for every new channel which means undue and continuous harassment of plaintiffs which cannot be “integral to public policy behind the legislation.” Thus, the identity of the operators of the channels was required to be disclosed.

In respect of Telegram’s submission of it being an intermediary, and being obliged to not disclose the details of the originator of the information, in the opinion of this Court, these guidelines (esp. Rules 3 and 4 of the IT Guidelines) did not in any manner obviate the duty of Telegram as a platform to take all effective steps required to protect IP rights, including rights of copyright owners. The Court referred to the judgment in My Space Inc. v. Super Cassettes Industries Ltd., (2017) 236 DLT 478 (DB) wherein it was held that section 79 grants only a “measured privilege to an intermediary” and provides for an affirmative defence and not a blanket immunity from liability and it certainly does not pose a barrier in the applicability of the Copyright Act. The Court further underlined that the intermediary is to be granted safe harbour, so long as it complies with the requirements of law. Practically the Court cannot supervise such infringements all the time and, thus, the origin and source of the infringing material had to be traced.

The Court further asserted that the Court has power to exercise its authority under Order XI of Civil Procedure Code, 1908, to direct disclosure of documents and information relating to ‘any matter in question in a suit’.

While dealing with the contention of the Defendant that disclosing of information related to the creators of the infringing channels shall amount to violation of their privacy rights, the Court emphasized that under the IT Act and Rules, Telegram also has a duty to expeditiously remove or disable access to the unlawful material under Section 79(3)(b) of the IT Act. In addition, under Rule 3 of the IT Guidelines, the intermediary has a duty to tell its users not to host, display, upload, modify, publish, transmit, update or share any information, which infringes on copyright or other proprietary rights or violates any law. This is buttressed by Telegram’s Privacy Policy which does not permit spamming, phishing and other abuses. Therefore, the Court ruled that the fundamental rights of privacy or protection of freedom of speech and expression would not extend to protect personal data related to the infringers. It was only the “processing” of data, which can be stopped for protection of fundamental rights. Disclosure of such data pursuant to a Court order would not fall in the definition of “processing”. Moreover, it is trite that the fundamental right cannot be used by any person or entity in order to escape the consequences of illegal actions.

While Telegram relied upon the judgment of the Supreme Court in Justice K.S. Puttaswamy v. Union of India & Ors., (2017) 10 SCC 1, the Court was of the opinion that if there is a law in existence to justify the disclosure of information and there is a need for the disclosure considering the nature of encroachment of the right then privacy cannot be a ground to justify non-disclosure, so long as the same was not disproportionate. Thus, whenever the data is sought for a legitimate purpose, and for curbing the violation of law, including infringement of copyright, such action shall be in line with the Judgment given in Puttaswamy.

The Copyright Act is the law that clearly requires “infringing copies” to be taken into custody. Finally, a perusal of the provisions of Section 81 of the IT Act shows that the provisions of the IT Act are supplemental to the provisions of the Copyright Act:

“81. Act to have overriding effect.–The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. Provided that nothing contained in this Act shall restrict any person from exercising any right conferred under the Copyright Act, 1957 (14 of 1957) or the Patents Act, 1970 (39 of 1970).” Finally, the Court after reviewing the law in the matter observed as a matter of public policy also if the protection of copyright is not evolved as per the changing times and if the issue is not nipped in a bud especially in the light of the fact that during the COVID-19 pandemic, teachers and the education system as a whole, have taken great initiative to ensure access of educational materials to students through online modes – it would have a chilling effect on the progressive initiatives taken by educators in sharing their materials and ensuring accessibility. The Court, therefore, directed Telegram to disclose the details of the channels/devices used in disseminating the infringing content, mobile numbers, IP addresses, email addresses, etc., used to upload the infringing material and communicate the same, as per the list of channels filed along with the present application. Telegram was also directed to submit list of infringing channels, if any and the data relating to the infringing channels and the details as to the devices/servers/networks on which they are created, their creators, operators including any phone numbers, IP addresses, email addresses, used for this purpose.

10 Sep

Distinction Between Maternity Leave And Childcare Leave Being Separate Entitlements

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Maternity Leave

In 2017 Parliament in New Delhi increased the extent of paid maternity leave from 12 weeks to 26 weeks. This needs to be appreciated not only from the angle of the physical and mental health of the mother and child alone but it should be seen through economic lens and from the broader perspective of growth of the nation. It is trite that human health is fundamentally a national asset. The social welfare legislations like Maternity Benefit Act, 1961 are implemented in order to ensure well-being of the females at the workplace (with negligible cost to be borne by employers) and thus it has the possibility of attracting female candidates and potential talent pool gets automatically doubled. By facilitating a woman to take ample care during the birth and raising of the child, the system ensures a physically and mentally strong generation for future too. ‘Maternity benefit’ essentially gives right of payment to every woman and imposes an obligation on every employer to ensure payment (as per the definition given under Maternity Benefit Act, 1961) “at the rate of the average daily wage for the period of her actual absence immediately preceding and including the day of her delivery and for the six weeks immediately following that day.” The average daily wage means the average of the woman’s wages payable to her for the days on which she has worked during the period of three calendar months immediately preceding the date from which she absents herself on account of maternity, or one rupee a day, whichever is higher.

Other than Maternity Benefit Act, 1961, the Central Civil Services (Leave) Rules, 1972 (CCSL Rules) have been framed to apply to Government servants appointed to the civil services and posts in connection with the affairs of the Union. The provisions for Maternity Leave and Childcare Leave are provided under Rule 43 and 43-C of the CCSL Rules. As provided under Rule 43 of the CCSL Rules, “A female Government servant (including an apprentice) with less than two surviving children may be granted maternity leave by an authority competent to grant leave for a period of 180 days from the date of its commencement.” Rule 43-C of the CCSL Rules provide for Child Care Leave and states that “A woman Government servant having minor children below the age of eighteen years and who has no earned leave at her credit, may be granted child care leave by an authority competent to grant leave, for a maximum period of two years, i.e., 730 days during the entire service for taking care of upto two children whether for rearing or to look after any of their needs like examination, sickness, etc.”

Where it is important that such legislations are framed and implemented by the Government, it is equally essential that the provisions of the legislations made by the Government are purposively interpreted by the judiciary. One such example found in the judgment delivered by the Apex Court in Municipal Corporation of Delhi v Female Workers (Muster Roll) [2000 (3) SCC 224], wherein it was held that the obligations laid down under Articles 14, 15, 39, 42 and 43 of the Constitution of India mandated that the benefits provided under the Maternity Benefit Act, 1961 be made applicable to the women engaged in casual/daily basis.

In a recent case before the Hon’ble Supreme Court of India – Deepika Singh v Central Administrative Tribunal and Others [Civil Appeal No. 5308 of 2022], the issue arose when the woman concerned had previously availed benefit under Rule 43-C of the CCSL Rules i.e. she was granted ‘childcare leave’ for taking care of the two children of his husband born out of his previous marriage. She had now applied for the benefit of maternity leave after conceiving her biological child. As per the Respondents (Post Graduate Institute of Medical Education and Research) where she was working, by availing childcare leave for her two children from her husband’s first marriage, she had accepted the fact that she has two ‘surviving children’ (as per Rule 43 of the CCSL Rules) and therefore, she was not entitled to avail maternity leave for the birth of her first biological child. On the other hand, the contention on behalf of the woman was that availing childcare leave on account of the two children from her spouse’s first marriage is distinct from availing paid maternity leave in connection with her first biological child.

The Hon’ble Supreme Court of India, while interpreting Rules 43 and 43-C of the CCSL Rules held that the expression ‘less than two surviving children‘ as provided under Rule 43 of CCSL Rules shall mean less than two surviving ‘biological children’ of that woman in order to not be allowed further maternity leave or to be provided with further maternity leave in a restricted manner. Therefore, a woman shall be eligible for maternity benefit related to the birth of her first biological child and the right shall not get diluted by the fact that she is a mother to her husband’s two biological children from his previous marriage and that she has already availed childcare leave as provided under Rule 43-C of the CCSL Rules in relation to the husband’s two biological children.

The judgment has once again upheld the rule of purposive interpretation that should be adopted while giving effect to the provisions of social welfare legislations. The Court also referred to the objective behind the Maternity Benefit Act, 1961 and that is to secure a woman’s participation in workplace by ensuring that her right to attain maternity status is balanced against her right to work. As per the Court, this balance is achieved by providing the woman with maternity benefit which enables her to proceed on her maternity leave for delivery and taking care of her child post-delivery.

The Court while applying the principle laid down in Municipal Corporation of Delhi observed that the rules prescribed under the CCSL Rules must also similarly achieve one of the constitutional goals of securing woman’s right of reproduction and at the same time ensures humane conditions of work and maternity relief. The Court also discussed India’s international treaty obligations and reiterated that social welfare legislations in the country need to be purposively interpreted to safeguard the rights provided thereunder and secure that the gap between the society and law is bridged by appropriate application of their provisions. The Supreme Court clarified and the law that maternity leave and childcare leave are distinct entitlements provided for a woman under the CCSL Rules and the grant of the childcare leave does not disentitle the woman from availing maternity benefit which is a separate right provided for in the CCSL Rules.

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