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Law making procedure in IndiaThe journey of a Bill to become an Act...

  Susshil Daga 9829 68 99 99Advocate, ACS

susshildaga.adv@gmail.comAmicus Legal Advocates and Consultants

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The HierarchyThe Constitution of India

(the supreme law of India)

- It was enacted by the Constituent Assembly on 26November 1949, and came into effect on 26 January 1950

The Govt of India (Union Govt/Central Govt/Republic of India)

- It was established by the Constitution of India

- The government comprises three branches: the legislative, the executive and

the judiciary

The Legislature (i.e. The Parliament)

- At the Union Level- At the State Level

The Upper House (Rajya

Sabha)

The Lower House (Lok

Sabha)

The President

The Executive

- It’s headed by the President who is the Head of the State

- The executive power is vested on mainly the President of India by

Article 53(1) of the constitution.- The President is to act in

accordance with aid and advise tendered by the head of

government (Prime Minister of India) and his or her Council of

Ministers (the cabinet) as described in Article 74 (Constitution of India).

The Judiciary

Supreme Court (at the Apex)

21 High Courts

several civil,

criminal and family courts at

the district level

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Difference between a Bill and an Act

A Bill is◦ a statute in the draft form◦ and cannot become law unless it has received:

the approval of both the Houses of Parliament and the assent of the President of India.

As soon as the bill has been framed, it has to be published in the newspapers and suggestions are invited from the general people, and after going through the suggestions of the people the bill is amended and then Bill may be introduced in the Parliament by:◦ Ministers (such bills are known as Government bills) or◦ Private members (such bills are known as Private Members’

bills)

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Legislative Process [Parliamentary Procedure Abstract Series No. 36]

Basic function of the Parliament is to make

laws, amend them or repeal them.

Introduction of the Bill in the Parliament

Circulation of Bill

Passage of Government Bills- A Bill undergoes three readings in each House, ie., the Lok Sabha and the Rajya Sabha, before it is

submitted to the President for assent.

Assent of the President

Bill becomes an

Act

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Basic function of the Parliament is to make laws, amend them or repeal them

India being a federal country, laws can be made separately at different levels by the Union Government (Federal Government) for the entire country and by the State Governments for their respective states.

◦ Laws for the entire country The legislative procedure in India for the Union Government

requires that the proposed law or bill passing through two houses of the Indian legislature.

◦ Laws for the respective states The legislative procedure for the states requires that the

proposed law or bill has to be passed in the State Vidhan Sabha (Lower House) and then through the State Vidhan Parishad (Upper House) if there exists one in that state.

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Introduction of the Bill in the Parliament

The process of law making begins with the introduction of a Bill in either House of Parliament.

A Bill can be introduced either by a◦ Minister (such bills are known as a

Government Bill) or◦ a Member other than a Minister (such bills are

known as a Private Member’s Bill)7 days notice in writing is required of his

intention to move for leave to introduce the Bill. The Speaker may, however, allow the motion to be moved at a shorter notice.

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Circulation of Bill It is required that atleast 2 days before the day on

which the Bill is proposed to be introduced, copies thereof must be made available for the use of members.

This requirement of prior circulation, however, does not apply to

◦ Appropriation Bills,◦ Finance Bills

Note: The Speaker may, however, permit the introduction of a Bill

◦ without prior circulation or◦ after circulation for a period shorter than 2 days

if adequate reasons are given in a Memorandum for consideration of the Speaker as to why the Bill is proposed to be introduced earlier than 2 days after circulation of copies or without prior circulation.

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Passage of Government Bills (First Reading)

The First Reading refers to the motion for leave to introduce a Bill in the House on the adoption of which the Bill is introduced.

Stage 1: Procedure regarding opposing the Introduction of Bill

Stage 2: Publication of Bills in the Gazette

Stage 3: Reference of Bills to Departmentally Related Standing Committees

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Passage of Government Bills (First Reading : Stage 1)

Stage 1: Procedure regarding

opposing the Introduction of Bill

Grounds on which the introduction of

the Bill may be opposed

General grounds

The Speaker may allow brief

statement from the member who

opposes the motion and the

Minister who moved the motion.

Thereafter, the motion is put to the vote of the

House.

Ultra vires competence

The Speaker may permit a full discussion

thereon.

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Passage of Government Bills (First Reading: Stage 2)

Stage 2: Publication of Bills in the Gazette

- A Bill is published in the Gazette of India only after it has been introduced.- However, for publishing it even before its introduction, the Minister-in-charge of the Bill has to obtain the permission of the Speaker.

If changes are made in the Bill after it has been published in the Gazette, it becomes a new Bill and the motion for leave to introduce the Bill has to be moved as in the case of any other Bill.

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Passage of Government Bills (First Reading: Stage 3)Stage 3: Reference of Bills to Departmentally

Related Standing Committees (DRSC)

• To examine such Bills introduced in either House and• Make report thereon in the given time (Normal time

allowed = 3 months)

Purpose of Reference of Bills to DRSC

• Chairman, Rajya Sabha or• Speaker, Lok Sabha

Who can refer the Bill to the

DRSC

• All Government Bills, except the following:• Bills to replace Ordinances,• Bills repealing obsolete laws,• Appropriation Bills,• Finance Bills and• Bills of technical or trivial nature

What all Bills can be

referred to the DRSC

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Passage of Government Bills (Second Reading)

Stage 1• Discussions

on the principles of the Bill

Stage 2• Clause-by-

clause consideration of the Bill

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Passage of Government Bills (Second Reading: Stage 1)

Stage 1 : Discussion on the principles of

the Bill

The following provisions are

discussed

that the Bill be taken into

consideration

that the Bill be circulated for the purpose

of eliciting opinion thereon.

the next motion in regard to such a Bill

must be for its reference to a

Select or a Joint Committee

that the Bill be referred to a

Select Committee of

the House

- The Committee considers the Bill clause-by-clause

-It invites memoranda from the public at large as well

as from specialised interest

groups to place materials and points of view before the

Committee.

that the Bill be referred to a

Joint Committee of the Houses

with the concurrence of

the other House

Same as in Select

Committee

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Passage of Government Bills (Second Reading: Stage 2)

Stage 2: Clause-by-clause consideration of the Bill

Discussion takes place on each clause of the Bill and

amendments can be moved at this stage

Each amendment and each clause is put to the vote of the

House.

The amendments become part of the Bill if they are accepted by a majority

of members present and voting.

Then, the Second Reading is deemed to be over.

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Passage of Government Bills (Third Reading)

The Third Reading refers to the discussion that the Bill, as amended, be passed.

Debate is confined to arguments either in support or rejection of the Bill without referring to the details

Only formal, verbal or consequential amendments are allowed at this stage.

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Bills in the other House

Bill passed in Lok Sabha

it is transmitted to the Rajya Sabha

Same process in the other House

also

Rajya Sabha to return the Bill within 14 days

from the date of its receipt (otherwise it is deemed to have been

passed by both the Houses of Parliament

at the expiry of 14 days)

Lok Sabha may accept or reject all

or any of the recommendations of Rajya Sabha.

After the Bill has been agreed to by both the Houses, it is submitted to the President for

his assent.

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Constitution Amendment Bills (CAB)

Introduction of CAB

• May be introduced in either LS or RS

• Such motions are adopted by simple majority

Majority required for adoption of

effective clauses and passing CAB

• A majority of total membership of the House and

• A majority of not less than 2/3rd of the members present & voting

Additional requirement for

CAB for vital issues enlisted in Article

368(2)• After having been passed by both LS & RS, it’s to be ratified by not less than half of the State Legislatures

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Withdrawal of Bills

• By the Minister in charge of the Bill, who introduced it in LS

Withdrawal by whom

• The Legislative proposal is to be dropped

• Bill is to be replaced subsequently by a new Bill which substantially alters its provisions

• Bill is to be replaced subsequently by another Bill which includes all its provisions

Withdrawal on

following grounds

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Joint Sitting

Joint Sitting

of both

Houses

when

• Bill passed by 1 House is rejected by other House, or• Houses have disagreed to the amendments to be made in

the Bill, or• More than six months lapse from the date of receipt of the

Bill by the other House without the Bill being passed by it

Who calls the Joint

Sitting

• President may call a Joint sitting of the two Houses to resolve the deadlock.

Exceptions

• There cannot be a Joint sitting of both Houses on a Money Bill or a Constitution Amendment Bill

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Assent of the President

Powers of President• Give his assent, or• Withhold his assent,

or• Return the Bill, if it is

not a Money Bill, with his recommendations to the Houses for reconsideration• if the Houses

pass the Bill again with or without amendments, the President can not withhold his assent to a such a Bill.

President vis-à-vis CAB• President is bound to

give his assent to a CAB presented to him for assent

Conclusion• The Bill becomes an

Act after the President’s assent has been given.

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Arbitration

Susshil Daga, Advocate

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IntroductionArbitration and Conciliation Act,

1996

Part I – ArbitrationSections 2 to 43

Part II – Enforcement of Certain Foreign

AwardsSections 44 to 60

Part III – Conciliation

Sections 61 to 81

Chapter – INew York

Convention Awards

Chapter – IIGeneva

Convention Awards

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Deemed Arbitration Clause Domestic commercial contract with a

consideration of Rs. 5 crores or more Deemed to have in writing “specified

arbitration agreement”“All disputes (except (here specifically the excepted disputes, if any) arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of (here specify the name of the approved arbitral institution) by one or more of the arbitrators appointed in accordance with the said Rules.”

Unless the parties expressly and in writing exclude the effects of this provision

Mandatory institutional arbitration

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Introduction – Meaning of Arbitration

Form of Alternative Dispute Resolution (ADR)

Alternative to court room litigation (Out of the court settlement)

Parties submit their disputes to a NEUTRAL (decided by both the parties) called the Arbitrator(s) or Arbiter(s) for resolution

Binding on the parties; equivalent to court litigation

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Introduction – Benefits & Drawbacks of Arbitration

Confidentiality

Speed

The control the parties have over the selection of the arbitrator

No need to get involved in lengthy (& sometimes avoidable) court proceedings

Benefits Lack of a formal evidence process, which means you are relying on the skill and experience of the arbitrator to sort out the evidence

Arbitration agreements can have loopholes

The arbitrator(s), being a human being not bound by court, may be prejudiced

Drawbacks

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The Arbitration and Conciliation Act, 1996 - Background

The Arbitration and Conciliation Act, 1996

The Foreign Awards

(Recognition and

Enforcement) Act, 1961

The Arbitration Act, 1940

The Arbitration

(Protocol and Convention)

Act, 1937

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Structure of the Arbitration and Conciliation Act, 1996

Part I : Arbitration

Part II : Enforcement of certain foreign awards

Part III : Conciliation

Part IV : Supplementary provisions

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The Arbitration and Conciliation Act, 1996

An Act to consolidate and amend the law relating to:

domestic arbitration,international commercial arbitration andenforcement of foreign arbitral awards

as also to define the law relating to conciliation and for matters connected therewith or incidental thereto.

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The Arbitration and Conciliation Act, 1996 – Concepts of arbitration

If the Agreement/Contract between the parties contain a clause on arbitration, then any dispute between them can be solved ONLY by arbitration [Once an arbitration is always an arbitration]

Ways in which an arbitration can be opted for??• An arbitration clause in the agreement/contract• A separate arbitration agreement between the parties• Exchange of correspondence (like emails, letters) between the parties

showing the intent of the parties to take the route of arbitration [Ref: Powertech World Wide Limited vs. Delvin International General Trading LLC (SC)]

Sec.8 : Power to refer parties to arbitration where there is an arbitration agreement• In cases where there is an arbitration clause in agreement, it’s obligatory

for the court to refer the parties to arbitration in terms of their arbitration agreement and nothing remains to be decided in the original action after such an application is made except to refer the dispute to an arbitrator

• Ref. P.Anand Gajapathi Raju v. P.V.G.Raju (Dead), 2000 (4) SCC 539

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The Arbitration and Conciliation Act, 1996 – Composition of arbitral tribunal [Chapter III of Part I of the Act]

Number of arbitrators [Sec. 10]•The no. of arbitrators shall not be an even number

•An agreement specifying an even number of arbitrators cannot be a ground to render the arbitration agreement invalid under The A&C Act, 1996 [MMTC Ltd v. Sterlite Industries (India) Ltd. AIR 1997 SC 605]

Appointment of arbitrators [Sec.11]•Any nationality [Sec..11(1)]

•In an arbitration with 3 arbitrators, each party shall appoint 1 arbitrator, and the 2 appointed arbitrators shall appoint the 3rd arbitrator who shall act as the ‘presiding arbitrator.’ [Sec.11(3)]

•In case arbitrator(s) can’t be appointed by the parties as aforesaid, then the appointment shall be made by the Chief Justice of the High Court

Failure or impossibility to act [Sec.14]•The mandate of an arbitrator shall terminate if:•He becomes de jure (according to law) or de facto (existing in fact) unable to perform his functions or for other reasons fails to act without undue delay; and

•He withdraws from his office or the parties agree to the termination of his mandate

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The Arbitration and Conciliation Act, 1996 – Interim measures, etc. BY COURT [Sec.9]

Applicabilit

y

• Before the arbitration proceedings, or• During the arbitration proceedings, or• After the making of the arbitration award BUT before it’s enforced in

accordance with Sec.36

Interim measures

• Appointment of a guardian for a minor or a person of unsound mind; or• Following matters:

• Preservation, interim custody or sale of disputed goods,• Securing the disputed amount,• Detention, preservation or inspection of any disputed property/thing• Interim injunction or appointment of a receiver,• Such other interim measure as may appear to the Court to be just and

convenient.

Power of

the court

• The Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it.

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The Arbitration and Conciliation Act, 1996 – Conduct of Arbitration Proceedings [Chapter V of Part I of the Act]

•The parties shall be treated equally

Sec. 18 – Equal treatment of parties

•The arbitral tribunal shall not be bound by the CPC, 1908 or the Indian Evidence Act, 1872

•As agreed between the parties•If the parties can’t agree, then the rules & procedure/place/language shall be determined by the arbitral tribunal

Sec. 19 – Determination of rules & procedure;Sec. 20 – Place of arbitration;Sec. 22 – Language

•Unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent.

Sec. 21 – Commencement of arbitral proceedings

•During the arbitration proceedings, the claimant shall state the relevant facts of the dispute, and the relief sought

•And the respondent shall state his defence in respect of these particulars

Sec. 23 – Statement of claim and defence

•Unless otherwise agreed by the parties, the arbitral tribunal may appoint 1 or more experts to report to it on specific issues.

Sec. 26 – Expert appointment by arbitral tribunal

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The Arbitration and Conciliation Act, 1996 – Manner of arbitral award and termination of proceedings [Chapter VI of Part I of the Act]

Sec.29 – Decision making

• Unless otherwise agreed, decisions of arbitral tribunal shall be made by a majority of all its members

Sec.31(7) – Power to award interest

• The arbitral tribunal may award interest for the whole/any part of the period b/w the cause of action date AND the date of arbitration award.

• The sum directed to be paid by the tribunal shall, unless the award otherwise directs, carry interest @ 18% p.a from the date of award to the date of payment

Sec.33 – Correction and interpretation of award; additional award• The party(s) may request the arbitral tribunal to• correct any computational errors, any clerical errors or other similar errors in the award;

• Give an interpretation on a specific point of the award.

• The party(s) may request the arbitral tribunal to make an addnl. Award as to the claims made in the proceedings but omitted from the arbitral award.

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The Arbitration and Conciliation Act, 1996 – Biasedness of arbitrator

• Arbitrator shall disclose in writing any circumstances likely to give rise to justifiable doubts to his independence or impartiality

• A party may challenge an arbitrator only if:• Circumstances exist that give rise to

justifiable doubts as to his independence or impartiality, or

• He doesn’t possess the qualifications agreed by the parties.

Grounds of challenge [Sec.12]

• A party can challenge an arbitrator within 15 days (the 15 days period can be extended by the parties) after becoming aware of the constitution of the arbitral tribunal/of any circumstances referred in Sec.12

• The application to challenge shall be sent to the arbitral tribunal

• If the application for challenge is not successful, then the tribunal shall continue the arbitration proceedings

Challenge procedure [Sec.13]

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The Arbitration and Conciliation Act, 1996 – Recourse against arbitral award [Chapter VII of Part I of the Act]

Sec. 34(2) – An arbitral award may be set aside by the Court only if-• Some incapacity of a party, or• Arbitration agreement is not valid in law, or• Improper notice given to a party about the appointment of

arbitrator, or• Dispute is beyond the scope of arbitration, or• Composition of the arbitral tribunal was not in accordance with the

agreement b/w parties, or• Arbitral award is in conflict with the public policy of India.

Other points

• Right to get an award set aside is statutory [AIR 2005 Mad 59]• The application for set aside can’t be made after the expiry of 3

months from the date on which the applying party had received the award

• An appeal can be made against the Court order to set aside/refusing to set aside an arbitral award.

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The Arbitration and Conciliation Act, 1996 – Conciliation [Part III of the Act]

Meaning•Not defined in the Act

•Hence, general meaning to be assigned

Commencement of conciliation [Sec.62]•Conciliation proceedings shall commence when the other party accepts the invitation to conciliate.

Role of conciliator [Sec.67]•Assisting the parties in an independent and impartial manner to reach an amicable settlement of dispute

•Conciliator shall be guided by principles of objectivity, fairness and justice

Other points•Conciliator is not bound by CPC, 1908 or the Indian Evidence Act, 1872 [Sec.66]

•Conciliator may formulate and submit a settlement agreement to the parties for their observations. [Sec.73]

•When the parties sign the settlement agreement, it shall be final & binding on the parties & persons claiming under them respectively. [Sec.73]

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The Arbitration and Conciliation Act, 1996 – An overview of Foreign awards [Part II of the Act]

International Commercial

Arbitration

[Sec.2(f)]

• An arbitration relating to disputes where at least 1 of the parties is:• An individual resident outside India, or• A body corporate incorporated outside India, or• A company or AOP or BOI whose mgmt & control is exercised outside

India, or• Govt. of a foreign country

Foreign

awards

• India is a signatory to the New York Convention and the Geneva Convention on reciprocity basis i.e. India will enforce the awards decided in a territory outside India only if that other territory agrees to enforce the awards decided in India.

• Both these conventions govern the provisions relating to the enforcement of such foreign awards.

Binding

effect of

foreign awards

• Any foreign award which would be enforceable shall be treated as binding for all purposes on the persons b/w whom it was made.

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Thank you

Susshil Daga 9829 68 99 99Advocate, ACS

susshildaga.adv@gmail.comAmicus Legal Advocates and Consultants