Thursday, September 27, 2018

Legal compliance and the IBC corporate law


The Indian government is poised to instill confidence in the falling real estate market through their mandated legal compliance of the Insolvency & Bankruptcy Code (IBC). In a move to protect homebuyers, the government is cracking down on debt-ridden real estate corporations, the latest of which is the Jaypee Group.
The Jaypee Group is a conglomerate of businesses in various industries such as Engineering, Construction, Power, Real Estate, IT, Cement and many more. They are in charge of various multi-crore projects, including the Yamuna Expressway project.
Jaypee’s Fall
In November of last year, IDBI bank filed a petition against Jaypee Infratech for insolvency of the corporation. As the adjudicatory body for corporate law, the National Company Law Tribunal (NCLT) admitted this claim - asking the real estate mogul to either clear their debts in full or find a process for resolution.
It has been over a year, and homebuyers are still in the wind as to if and when they will receive delivery of homes - or compensation for the same.
Bringing Home-buyers to the Table
As per the new amendments to real estate company compliances of the IBC, home buyers are now legally considered as financial creditors. In fact, homeowners now have more than a 62% representation in the committee of creditors.
Resolution Processes
Here are some of the key steps being taken to resolve the Jaypee insolvency crisis.
  1. Before the IBC amendment, home buyers petitioned against the IDBI Bank insolvency claim. They were vastly underrepresented and liquidation of assets would have gone majorly in the bank’s favor. The IBC amendment has now given home buyers legal claim to the assets from this dispute resolution.
  2. The Supreme Court (SC) asked the Jaypee Group to pay estimated Rs 2,000 crores worth of damages.
  3. Senior management of the company was barred from leaving the country.
  4. Directors of Jaiprakash Associates Limited (JAL) - an offshoot of the Jaypee Group, were asked to present details of their assets in court, in person.
  5. Last November, the real estate developer doled out Rs 275 cr.
  6. An active web portal is collecting complaints against the developer from homebuyers, who easily number in the 30,000s.
  7. Earlier this May, the SC decreed that JAL would have to deposit Rs 1,000 cr by June 15. This was later decreased to Rs 600 cr and passed on to the NCLT to ensure legal compliance by the developer and an expedited reimbursement process.
  8. JAL is expected to pay back the amount to homebuyers in seven installments.

Tuesday, September 18, 2018

Dissolution of Muslim Marriage Act, 1939


Almost every religion recognizes marriage as a sacred union of man and woman which cannot be or rather should never be broken by any force on earth, and Islam is no different to this philosophy. In fact, it is also believed that happy family can only be achieved when the bond between the husband and the wife is strong and resilient.

Islamic perspective on divorce 
The religion of Islam preaches its followers to avoid breaching the holy marriage between husband and the wife and should be used as the last resort, despite the fact that a Muslim Marriage is contract. As a matter of fact, even the Prophet preached that out of all the things which were sanctioned or allowed by law, divorce is by far the worst of its kind and in any case should be avoided. Having said so, there are times and situations when divorce becomes more of a necessity than a luxury. This is particularly when it is practically impossible to continue their marital relationship. This is exactly why under Islamic law, there are only two situations when divorce between husband and wife can take place. These are:
  1. By act of God
  2. By act of the parties, meaning divorce.

Legislative background and history to Islamic divorce 
When it comes to aspects like marriage, divorce, succession etc, people are largely governed and regulated by their personal laws. If we try to trace the history of codifying the Islamic personal laws for the Muslims residing in India, then an attempt to codify their laws made as early as in 1937 by way of the Sharia Application Act. But even after enacting this law, it was observed that people continued following their personal practices which defeated the whole purpose and rendered it unsuccessful.
Following this, in 1939, another attempt to do the same was made which eventually led to the passing of the Dissolution of Muslim Marriage Act, 1939 (“Act”). This Act prescribed as many as nine grounds based on which Muslim woman could seek divorce from her husband. One startling differentiation, however, which this Act made, was that this Act granted a Muslim man to divorce his wife at will. On the other hand, however, the wife did not enjoy such an unrestricted right either to give divorce or get one. As a result, the only way out for her was to get converted to another religion in order to call off her marriage. Although this also paved way to lot of amendments nevertheless, it did not restrict the unilateral right of the man to divorce his wife.

Understanding grounds for divorce for women 
A glimpse on the grounds on which a Muslim woman can claim for divorce against her husband clearly shows that the woman can get divorce only when her husband has been absconding for at least four years or has failed to provide her maintenance for two years; or he has been serving imprisonment for seven or more than seven years; or has failed to perform his marital obligations for three years; or is impotent since marriage or has been suffering from any mental disorder for two years or is suffering from leprosy or any virulent venereal disease or if the woman has got married when she was below the age of fifteen years and hence, it was her father or guardian who had taken this decision for her and she now wants to repudiate it or has subjected her to cruelty.
Apart from the above, there are only two ways in which a Muslim woman is allowed to seek separation from her husband, which is either through mutual agreement between the husband and the wife which is known as ‘Khula’; or secondly, by filing a suit and getting a formal judicial decree against the husband in a court of law which is called ‘Fask’ and which falls under the category of Table-i-tafwid. Thus, unlike her male counterpart, the Muslim woman cannot release herself from marriage easily and unilaterally.

Analysis on the perspective of divorce
As compared to the Islamic states, where the rights of women particularly in relation to divorce are quite rigid and obsolete, the Indian law aims to put the Islamic woman almost on similar pedestal as her male counterpart under ‘khula’. That could also be the reason why in Neorbibi v. Pir Bux AIR 1971 Ker 261, which came in almost twenty five years later to Umar Bibi v. Mohammed Din AIR 1945 Lah 51, the court recognized the principle of irretrievable breakdown of marriage’ and granted divorce on the grounds of incompatibility unlike in the latter where incompatibility was outright rejected by the court.

Virtues: 
Muslim Law is based on “Shariat Law” and is a Qitabiya Law i.e. interpretation of Quran. Enactment of Dissolution of Muslim Marriage Act, 1939, was a revolutionary step for the Indian Legislature. The Act was enacted despite the fact that Muslim Law was primarily recognizing the rights of Males and entitling them to marry and have 4 wives thereby glorifying polygamy. Furthermore, before enactment of this act only Males had the right to divorce their wives. Albeit, enactment of this act gave certain grounds to the woman to seek shelter under the Law and exercise their statutory right. This Act gave right to woman to raise their voice against cruelty and seek separation.

Vices: 
This Law is a law on papers only and was never exercised by the women for the reason it only highlighted few aspects of the Muslim Personal Law. This Act is a very brief Act only highlighting few grounds of divorce for woman to initiate proceedings. This Act does not prescribe the post divorce measures . The Muslim marriage is a Contract where the ‘Mehr’ is consideration. This Act is silent as to what will happen to the ‘Mehr’ post dissolution under this Act. This codification was lacking in codification of Muslim Law pertaining to child custody, maintenance or uniform applicability of the same. Where the right to woman were given but the cruel pronouncement of unilateral ‘Talaq’ by men was not curbed. There was no uniform applicability of this Act and the customary laws continued to prevail and the Muslim woman continued to suffer.