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Friday, 31 January 2014

“Crystal is not glamour free”



Market is dynamic in terms of in-flowing products, consumer behavior and goodwill of a business. It is, therefore, crucial for a businessperson to defend his/her product(s) in the name and style of its trademark. The question of trademark protection becomes pertinent when the trademark is not in use for quite some-time. Does it mean that the consumer will forget the brand? Does this mean that the market dynamics will change the numbers or prestige of goods? Does the registered user be allowed to take leverage of its market reputation even long after abandoning the trademark? What if any other businessman wanted to revive its business with some trademark which may resemble its previously abandoned trademark?
IPAB has made this proposition clear with the issuance of an order on January 3, 2014 to remove the trademark “Crystal Glamour” owned by Austrian crystal jewellery and fashion accessories company Swarovski Aktiengesellschft under No.1134456 in Class 25 (Trademark classification for clothes). The mark has been applied for registration in the year 2002 and registered in 2005. The company (in a letter dated December 18, 2013) communicated to the registrar of trademark that the registration has lapsed and they have no interest in renewing the registration. Instead of which they requested to allow for rectification. They wanted to drop ‘Glamour’ from the trademark which flagged the applicant, “Crystal Knitters” based in Tirupur, since they are the registered trademark owner of ‘Crystal’. The applicant adopted this trademark in 1971, got it registered, has paid renewal fees timely and is still commercially active. The applicant has argued that they have extensive public identity and it has built itself as popular brand. It has statutory as well as common law rights over trademark ‘Crystal’ and copyright in the artistic work relating to the manner in which the mark is represented.
 The applicant argued further that –
Ø The trademark ‘Crystal Glamour’ was not in use for 5 years or more,
Ø The trademark registration fails by virtue of section 9 & section 11 of the Trade Marks Act, 1999,
Ø That the Trademark was obtained without the bona-fide intention to use the same and they were more of looking to use the applicant’s trademark and its reputation in the market,
Ø That the trademark of the defendant was ‘neither distinctive nor capable of being distinguished’,

On service of notice regarding the application by the applicant, respondent did not file any counter statement but responded with a letter informing that they are no more interested in the application. The applicant insisted on hearing which the defendant did not attend. Applicant contested that the word ‘glamour’ was dropped and the only word remaining was ‘crystal’ which is registered trademark of the applicant.
The board observed that the applicant has adduced all the relevant documents to substantiate their contentions. The defendant had the prior knowledge of the applicant’s trademark and therefore, concurrent use or innocent infringement situations are ruled out. Furthermore, the defendant has requested to allow the rectification petition. The board therefore, concluded that the application be ordered with a direction to the registrar of Trade Marks to remove/cancel the trade mark “Crystal Glamour” registered under No. 1134456 in class 25.

Conclusion -
Chapter VI of the Trade Marks Act, 1999 dictates the use of trademarks and registered user. Section 47 of the above-mentioned Act provides that the application for ‘removal from register and imposition of limitation’ are permitted after 5 years and 3 months from the date of register of the trademark, on non-use situations. Defendant seems to have lapsed its statutory rights to revive its trademark ‘Crystal Glamour’. Though, it seems irrelevant on behalf of the defendant to contest the opposition since they are no longer intending to use their registered trademark. Also, it is waste of time, energy and money if the businessperson is no more using or willing to commercialize the particular trademark.
The statutory provision mentioned above indicates that there is a fair chance that a consumer will forget a brand after certain time if that trademark is not in use, unless of course it is a well-known trademark. It is however very difficult to draw limitations on reputation in terms of time and economics for goodwill. But, the trademark law dictates that one shall not be allowed to hold IP rights if they have abandoned it for continuous long term. It is therefore paramount to fortify one’s trademark, its associated common law rights and statutory rights.

IPAB decision can be seen ‘ here.


Author - Manish kumar


Tuesday, 28 January 2014

Banking Transaction Tax: A discussion

 The Indian Taxation system with all its criticism, is one of the best systems in the world: Schedule Seven of the Constitution gives an absolute division of power between the Center and the State; the collecting authority is clear on the collection schemes; most people have come to terms with the current system of Tax and lastly and most importantly the Indian Tax System has successfully worked for years as the Government of India has been able to achieve the desirous result (revenue generation) by implementing these Taxes.
The idea behind this article is not to take sides but only to objectively analyse the situation. The first question or rather an apprehension that comes to mind is that do we even need Tax reforms? Or is this a mere political stunt? India changed its economic policies in the year 1992, the next logical step would definitely be to change the Tax system to be in consonance with the said economic policy. Building of Tax capacity is vital for the state. It is also easily understandable that if the state simplifies the Tax system it will be highly beneficial for the Tax payer.
However the talk on Tax reform and fiscal policy is not new, Veteran Tax lawyer and jurist Nani Palkhiwala said 
We legislate first and think afterwards. Complexity is heaped upon complexity and confused becomes more confused[1]
(http://www.firstpost.com/investing/budget-2012-everything-you-need-to-know-about-personal-taxes-247065.html)

Since we are talking about the Tax system in general therefore it is also interesting to note that even though we have an Income Tax Act that is amended every year by means of the Financial Act (Budget)  and we are now coming up with the Direct Tax Code (DTC). In 2009 while proposing the DTC in the Budget speech, the then Finance Minister and now the Hon’ble President of India Pranab Mukherjee stated,
The objective of the DTC is to build a trust based, unbiased and low rates system to promote voluntary compliance with the code which will improve efficiency and equity in Tax system”.  However if look at the Vijay kelkar Committee report on “Road map for fiscal consolidation”[2] on page 21 mentions “The Direct Taxes Code Bill, 2010 which intends to revamp the law relating to direct Taxes is likely to result inconsiderable unacceptable losses on a continuing basis. Given the low Tax-GD Pratio and the existing fiscal crisis, there is absolutely no fiscal space for such large revenue loss. Therefore, the Direct Taxes Code Bill, 2010 should be comprehensively reviewed before it is enacted into law for implementation.”[3]
We can therefore easily come to the conclusion that the Tax codes must be simplified, in order to get rid of the problem of multiplicity of objectives assigned to Tax codes and multiple Taxes. Also the Kelkar committee recommends the modernization of the Tax administration system so as to reduce the transaction cost incurred by the Tax department and also to minimize the unnecessary harassment suffered by an honest Tax payer.

Having understood the need for reforms in Tax law we would now try to understand Banking Transaction Tax (BTT). The idea of having a single Tax throughout the jurisdiction is not new. A similar idea was mooted in France post World War; Canada, Australia, Brazil and The United States of America have also discussed this idea in the past. The current system of Tax followed in India is of Anglo-Saxon origin which is not hard to contemplate as our Income Tax statue is derived from the Colonial Tax Act of 1922. There are two different schools of thought here- one supports the Anglo-Saxon method of Tax while the other prefers the BTT.

The current Tax system in India is a declaratory system of Tax i.e. the assesse declares his taxable income and then the Tax is deducted. The Proposal that Ramdev (or BJP?) is making is to do away with such declaration along with the paperwork and nitty-gritties associated with it move to a non-declaratory system of Tax.

Globalization is an important consideration in understanding the reasons for proposing to move to such a system of Taxation, as previously stated that India globalized its economic policy in 1992 but the Tax system still waits for reforms to take place. All countries have lost their sovereignty in Tax related matters, the concept of Tax havens and electronic transfer of currency has further increased problems for the existing Tax system in India. Payment through or to these Tax havens and countries which do not have specific bilateral Tax agreement with India have troubled both the assesse and the assessing authority. (The Vodafone Tax dispute is a prime example)
The Anglo-Saxon system of Tax has lost its validity in such transactions. Moreover in today’s economy where FDI is being encouraged in various sectors (and as argued by Baba Ramdev is a prime source of getting Black money legitimately in the country), taxing this capital is also a necessary step in the Tax reform process.

Holes in the theory:

The first and easily visible flaw of implementation of BTT in Indian scenario is non-inclusion of a major section of the society in the banking system.
To add to that is the lesser use of proper form of bank instruments such as cheques, drafts debit and credit cards etc.
Also if we deem to convert all Tax transaction in electronic form then the bigger problem is that of cyber security. We have seen networks of premier banks like “The State Bank of India” and “The Punjab National Bank” down for hours, the most revenue generating website for the government is the IRCTC which has been ridiculed on several social media platforms for the server speed. We have to accept that we are still not in a position to protect all the data which includes a citizen’s financial information, which can very easily be misused, in an electronic format.
The issue is of transferring the Tax collection process to Banks, and here we must also keep in mind that all the banks are not government banks but also include ICICI and HDFC which are private players, so in effect the Tax collection will be outsourced to the private players which will lead to loss of sovereignty over Tax collection.
The role of agencies like the Enforcement Directorate (ED) and the Financial Intelligence Unit will increase by leaps and bounds and so will their infrastructure capability will need to be augmented as per the needs of the day. The cost benefit analysis with the Current Tax Department and the then ED and other agencies will not lead to a drastic change in the current expenditure of the government.
Moreover the implementation of such a law will include constitutional amendments and abolition of several Taxes that are being imposed at the moment and consensus between Center and State. There will be a transition period between the abolishing of these Taxes and implementation of the new Taxes. This transition period will lead to loss of revenue and how this loss would be made good to the government.
Now coming to some very simple questions that will need to be answered when such a Tax is to be imposed.
Consider the scenario where:
  •  A person gets a salary that is Taxed, now he sends money to his son who is studying in an educational institute by way of bank transfer. This transaction, as per the current IT Act is not an income in the hands of the son. How will the Bank or the BTT framework make such distinction, is an important question that remained unanswered.
  •   Another interesting question arises in instances of loan, in this case when a person takes a loan of Rs. 100. A Tax of say Rs. 5 is deducted as BTT, so he in effect gets only 95 Rs. But has to pay back 100 Rupees.
  • Also when he pays the amount back he will have to pay (95+5+Tax) because this transaction will also be Taxed by the BTT.
  • The Tax Slab problem. As per the cannon of Tax law equity must be maintained while levying and collection of Tax. In this system a person earning 5 Lakhs a year, another earning 2 Lakhs and the third earning 5 crore will be Taxed at the same rate. Moreover if a person earning 2 Lakhs does larger number of Bank Transactions he will be subject to larger amount of Tax although he is not earning more. It will be the same money that will be transacted through the bank and be Taxed again and again.


Several such problem may emerge as per the circumstances that may arise in the future.
Another huge problem will be of Tax avoidance by means of cash economy. The Idea is simple, if a person wants to avoid Tax he will forgo the system of bank transactions altogether and rely completely on cash. The stories of people hiding cash under their beds would be revived.

Conclusion

The proposition of BTT as it appears at this time, seems half cooked. Although it is a step in the correct direction but it has to be thought out in a more precise way. A lot of research has been done by several institutions to make progress in the process of implementation of BTT, however the end result seems to be tricky. Some propositions make the Tax system too complex while other lead to too much generalization and over simplification.
The decision, if taken, at this point of time will, in my view, be a hasty one. Such a decision can only be made when we are able to establish a Tax policy that will best suit the interest of the citizens as well as the Tax authority. 
The steps for financial inclusions must be taken as the first step of BTT implementation and when successful in this process we should move ahead with a better precise and conceptually sound BTT.





[1] Palkhivala in Sorabjee and Datar (2012)
[2] http://finmin.nic.in/reports/Kelkar_Committee_Report.pdf
[3] Ibid p. 21


Author - Antriksh Mishra

Sunday, 26 January 2014

WE, THE PEOPLE OF INDIA...

(This is a Republic Day Special Post)

Hon'ble Members, my prayer is that the Constitution that you are going to plan may similarly be reared for Immortality, if the work of man may justly aspire to such a title, and it may be a structure of adamantine strength, which will outlast and overcome all present and future destructive forces.
 - Monday, the 9th December 1946 (Constitution Hall, New Delhi)

Dr. Sachchidananda Sinha (Provisional Chairman Constituent Assembly) in the very first address to the Constituent Assembly indicated that the Constitution of India is sought to be immortal and organic. True to the vision, India has the most comprehensive Constitution that ensures Justice, Liberty, Equality and Fraternity in the country. Moreover, we as a nation have constantly thrived to achieve the goal set forth by the makers of our constitution. The foundation of our Constitution dates back to May of 1934, when  Swaraj Party formulated the first ever scheme which promulgated the idea of self-determination paving path for a Constituent Assembly with representatives of all sections of Indian people. This action was taken after consistent demands made by Mahatma Gandhi since 1922, for a Constituent Assembly.

Swaraj will not be a free gift of the British Parliament. It will be a declaration of India's full self-expression, expressed through an Act of Parliament.                 

                                                                                                                   - Mahatma Gandhi.

The policy was approved by All India Congress Committee in Patna a few days later in May 1934 and confirmed at Faizpur in December 1936 only to be adopted in November 1939 by the Congress Working Committee. The Congress declared in that resolution that Recognition of India's independence and the right of her people to frame their constitution through a Constituent Assembly is essential. But, the idea was not favoured in 1940 by the Muslim League that was demanding separate Constituent Assembly for a separate nation in accordance with their gruelling ask for Pakistan. In the year 1945, Sapru Committee issued a report favoring the scheme. To end the political deadlock, the British Cabinet Mission propounded a different scheme which was acceptable to most of the parties. 


The Assembly was thus formed and it started to frame the Constitution of India. Dr Rajendra Prasad was elected as President of the Assembly, which met for the first time on 9 December 1946. Dr Bhimrao Ramji Ambedkar, was the prime architect of the Indian Constitution. The Assembly worked for 2 years 11 months and 18 days to build a Constitution with 395 Articles in 22 parts and 8 schedules consisting of almost 80,000 words.  The Constitution of India was adopted by the Constituent Assembly on 26 November 1949 and came into effect on 26 January 1950. This date of 26 January was chosen to commemorate the Purna Swaraj declaration of Independence of 1930.

 (http://soilmag.com/constitution-of-india-a-real-world-connect/)

On 24 January 1950, Dr Rajendra Prasad was elected as first President of India. This followed the discussion on election of new members and National Anthem. It was then decided that Vande Mataram shall be honoured equally with Jana-Gana-Mana and shall have equal status with it. The copies of the Constitution were signed by the President followed by the Prime Minister J. L. Nehru. The Constitution follows parliamentary system of government and the executive is directly accountable to the legislature. It envisages well established principles, procedure and structure, powers and duties of government, fundamental rights, directive principles and duties of the citizens (added later). The Constitution of India is federal in nature that declares us as a sovereign, socialist, secular, democratic, republic country. Union of India became Republic of India, which was no longer governed under the Government of India Act,1935

Dr Rajendra prasad concluded the Assembly with high hopes for the future - 
The country today is facing very many problems and my feeling is that the kind of work which we have now to do is different from that which we used to do two years ago. It requires greater devotion, greater care, greater application and greater sacrifice. I can only hope that the country will throw up men and ,women who will be able to take up the burden and fulfil the highest aspirations of our people. May God give us strength to do that.
The country has seen everything, from war to revolution to emergency to economic breakdown to nuclear tests to space programmes to corruption to nationalisation to globalisation. Today, India is growing as one of the super-powers in the world. Still, it has its own problems that requires immediate solution. The present President of India, Shri Pranab Mukherjee, on the eve of republic day of India 2014 raised similar concerns such as corruption, rise of hypocrisy in public life, incompetency of governments to strike social and economical progress. The President highlighted the need of better education and requisite infrastructure. The President also hoped that with the emergence of India as one of the fastest growing economies, India will be be able to continue its legacy of her Constitution. 
We must be open to all knowledge; to do otherwise would be to condemn our nation to the misery of a stagnant mire. But we should not indulge in the easy option of mindless imitation, for that can lead us to a garden of weeds. India has the intellectual prowess, the human resource and financial capital to shape a glorious future. We possess a dynamic civil society with an innovative mindset. Our people, whether in villages or cities, share a vibrant, unique consciousness and culture. Our finest assets are human.
And in this journey, the lawyers have to and have played an important role- be it at the time of 1975 emergency or the issue of protection and furtherance of Fundamental Rights, there has always been a silent Hero in the form of a Lawyer, fighting for a cause. Thus, we take this opportunity to reshare the following interview of Mr. Ram Jethmalani where he has elaborately discussed the duties of a lawyer:


To Conclude, IIT-Kharagpur Law Blog wishes you all a very Happy Republic Day. Every Indian understands the sanctity of the Constitution and importance of this day which was actually the day we found ourselves as India, as a nation. In the words of former President of India Dr A. P .J.  Abdul Kalam, we wish the nation peace, prosperity and happiness.

The Vision
Where is the peak, my Lord?
I ploughed and ploughed,
Where is the knowledge treasure, my Lord?
I sailed and sailed,
Where is the island of peace, my Lord?
Almighty, bless my nation
With vision and sweat resulting into happiness.  
JAI HIND!

Friday, 24 January 2014

Types of Copyright in a Comic Book and an Animation Movie


Although a formal Registration of Copyright with the Copyright Office is not mandatory but a Registration Certificate serves as a prima facie evidence of ownership of Copyright (s. 48 of Indian Copyright Act, 1957). For e.g., in the case of Raja Pocket Books v. Radha Pocket Books, 1997 (40) DRJ 791, the plaintiff through evidence had to prove that they were the true owners of copyright in the character ‘Nagraj’ and it was a very heavy burden to discharge. The Indian Copyright Act chalks out the following categories of copyrightable work:
  1.        Artistic
  2.        Literary
  3.        Dramatic
  4.        Musical
  5.        Sound Record
  6.        Cinematograph
  7.        Software
And by the virtue of s. 16 of the Copyright Act, the Copyright Office will grant Registration only if the work falls in any of these categories and the applicant is able to establish the same. At times, a piece of creation may contain more than one of the above elements and a registration of copyright for the work in one of the above categories would not deem that the other elements have also got a protection. For example, the song “Maa Rewa” by the band “Indian Ocean” in their album “Kandisa” has the following elements in which a copyright could subsist: 1. Lyrics, 2. Music and 3. Sound Recording.  A copyright registration certificate in the category of Sound Recording although would be a prima facie evidence that the sound recording is original but could not establish that the copyright in the music (the tune, etc.) and the lyrics lie with the applicant. For these purposes, two separate applications need to be filed- one for the Lyrics (under Literary category) and other for Music and respective Registration Certificates need to be obtained.

The situation becomes more complex when the complexity of the nature of the work also increases and thus it is important to have a very clear understanding of the various underlying copyrightable elements in the work for the purpose of a proper and complete legal copyright protection.

A.     Comic Book

A comic book is a creation where generally a story is told using certain pictures in various frames. These pictures may or may not be accompanied by words, dialogues, etc. Therefore, a comic book contains the following copyrightable elements:
  1. Artistic Work in the pictures and characters: The Copyright Office will not accept the entire comic book as one artistic work and therefore each character needs to be registered separately through separate application. Although, it is not necessary to register various moves of one character separately and one application containing one figure of the character is enough but it is advisable to register every unconceivable (by common man) emotion or action associated with that figure (For e.g. it is not necessary to file a separate application under artistic category for a Nagaraj who is kicking when an application for a standing Nagaraj has been made but it is advisable to get a separate registration of a Nagaraj with snakes coming out of his wrist)
  2.  Literary work in the dialogues and captions: The dialogues and other captions used in the comic book would fall under Literary Category for Copyright protection. An application under literary category shall be made to the copyright office with the complete Comic book attached (but remember that this application would not be able to cover the artistic elements discussed above).
  3. Non Literary Elements to be covered under Literary category: In a comics, the story is told either through a combination of pictures and dialogues/ words/ captions or by the use of pictures alone. When no dialogues/ words/ phrases are used, it is important to protect the underlying story which is the non literal element by writing down the story in a real language on a piece of paper and then applying for a registration under the literary category. In those cases too, where the story is conveyed partly through words and partly through pictures, such type of protection of non literal element is advisable. (For a better understanding of non literal copyrightable expressions, please see R.G. Anand v. Deluxe Films, AIR 1978 SC 1613 and Anil Gupta v. Kunal Dasgupta, AIR 2002 Delhi 379).   
Story partly told through dialogue and partly through pictures
(http://lous-land.blogspot.in/2013/01/new-crocs.html)
Moreover, a comic book, like Raj Comics’ “Nagaraj”, may contain one single story or, like Diamond Comics’ “Billoo”, may contain a set of many stories. It would really not matter whether the literal elements in a comic book with many stories are registered using one application or different applications for different stories however to avoid the 10% permissible infringement (de minimis infringement, please see India TV v. Yashraj, 2013 (53) PTC 586 Del), one might go for separate registrations.

Snakes coming out of Nagraj's wrist- something difficult to conceive
(http://www.2-clicks-comics.com/comic-book-characters-letter-n/nagraj-comics.html)


B.     Animation Movie

An animation movie is a great work of art and per se it comes under the category of ‘Cinematograph’ for the purpose of Copyright. However, there are a number of other copyrightable elements in it and are as follows:
1.       Cinematograph: The complete movie would enjoy a protection under the cinematograph category and as per section 2 (f) of the Copyright Act, cinematograph also includes the Sound Recording, therefore, in my opinion, there is no need to file a separate application for the Sound Recording in the film.
2.       Artistic Work in the character, background, etc.: Just like a comic book, all the characters and even the background (For e.g., the ice castle in the movie ‘Frozen’ by Disney) would come under the Artistic category and it is advisable to file separate applications for all the characters and their distinct moves and any other work whose infringement would harm the true owner.
3.       Literary Category: The dialogues, the commentary, the lyrics of the songs, etc. would come under the Literary Category. It is advisable to file separate applications for the lyrics and the dialogues to avoid any de minimss infringement.
4.       Music: The music in the songs, background score of the movie, etc. would come under the Music category and it is advisable to file separate application for separate score.
5.       Non Literal Elements to be covered under Literary category: Just like a comic book (discussed above), the non literal elements (like the underlying story) should be written down on a paper and filed for Copyright Protection under Literary Category.


Again, Copyright Registration is not mandatory but a Copyright Certificate would serve as a prima facie evidence in case of any future infringement and by its virtue, the infringer has to suffer a very heavy burden of proof.

In reality, the situation is more complex especially in the cases of Animation movies because the authors of various component works are different and thus a proper licensing/ assignment strategy needs to be adopted, but that discussion shall be kept for a separate blogpost. 

A Copyright application as per the current Copyright rules is made through Form XIV.

Meaning of the word "NAGRAJ" and "NAGESH" is the same, namely, king of snakes. The idea depicted in the comic Nagraj is of a human being (male) with snake like characteristics ,who can climb walls and roofs, can blow poison and kill his enemy, capable of releasing snakes from any part of his body, the snake so released from the body after completing their work return back to the body and merge in the snake like character NAGRAJ. In the comic "NAGRAJ" the character is shown to be a creature of professor Nagmani, an expert and knowledgeable person with respect to snakes with the object of helping criminals and militants in furtherance of their object of creating terrorism etc., which due to intervention of Baba Gorakhnath is transformed into a Harmit, a noble character used for eradication of terrorism from the earth. (Devinder Gupta, J. Del HC, 1996).


(Note: 
  1. This post is not a legal advice.
  2. I do not own the copyright in the pictures/ comics posted. However, this use will be fair use but further copying might amount to infringement.
  3. The copyright in the video has expired.
  4. This post may be used for scholarly purpose without my permission. However, the source and the name of the author needs to be mentioned.)


Author - Tanveer Verma

Off Court and beyond....


Dear Friends,

Indian Institute of Technology has been the premier education institute in India, Our students have proved to be the best and brightest in the country in all academic and co-curricular activities.


Here in the place of that Hijli Detention Camp stands the fine monument of India, representing India's urges, India's future in the making. This picture seems to me symbolical of the changes that are coming to India.
_J.L. Nehru (speaking on the Foundation Day of IIT Kharagpur) 


True to our first Prime Minister's vision and ideas, the Rajiv Gandhi School of Intellectual Property Law (R.G.S.O.I.P.L.) was established in 2005 to provide legal education to Engineering and Science Graduates.
Ever since the school has produced excellent students, who have achievements in scientific endeavors and have established themselves in the legal world with the same acumen.

Drawing our inspiration from the German philosopher and critic Fridrich Nietzsche
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This blog is another step by the students of RGSOIPL, IIT Kgp to further the cause of Intellectual discussions and expression of unbiased opinions on matters of legal and socio-economic implications. In the world of diverse opinions, a fruitful discussion on such issues by the current and future legal stalwarts of a democratic country.

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We are all caught in this network of thought. This is a FACT indisputable and actual.
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In the age of Internet communications and free access to information, we welcome blog posts from law students, lawyers, academicians etc. on the aforementioned issues which would be shared freely among the legal fraternity and serve for discussion from the current and to be jurists.

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