Regulation of Bitcoins/Digital Currency in India by Roma Bhojani
The Government of India has been deliberating on formally legalising digital currency or cryptocurrency such as Bitcoins in India. In March 2017, the Ministry of Finance set up an intergovernmental committee with a mandate to research and create a framework for regulation of digital currency in India. In July 2017, the Supreme Court directed the government and the Reserve Bank of India to submit information on steps which have been taken to ensure that digital currency will not be used for terror financing, money laundering or other illegal activities. There is currently no law regulating digital currency in India, and it has not been explicitly declared as legal or illegal. Japan legalized digital currency in March 2017 and this led to a boom in the price and sale of Bitcoins. Even the central bank of China has already developed a prototype of a digital currency that it might circulate shortly. China will be conducting mock transactions involving digital currency by simulating possible situations, to analyse the issues which could arise by legalizing digital currency.
Proponents of digital currency believe that India is currently at an ideal place to launch legal digital currency due to many reasons. The Prime Minister Narendra Modi has been trying to popularize the idea of ‘Digital India’ since 2015 by encouraging improvement of digital infrastructure and internet connectivity. The government has been carrying out campaigns to open bank accounts for all citizens. Despite these efforts, millions of people in India do not have bank accounts. It is believed that improving this situation is an extremely difficult task due to lack of formal banking infrastructure. Digital currency could provide an online banking solution to those who are not a part of the formal banking framework as it will only require access to internet and no elaborate infrastructure. Furthermore, the process of accessing digital currency is less tedious than the process of opening a bank account as the latter requires submission of various documents, permanent address proofs, etc.
If digital currency is legalised in India then it would fall under the regulatory framework of currency in India. This means that it would presumably fall under the purview of Reserve Bank of India (RBI) Act, 1934. This means that the RBI would have the power to issue guidelines to regulate investment in digital currencies and their sale. Furthermore, the government will be able to tax the returns on investment from all types of digital currency. Moreover, foreign payments made using digital currency will be considered under the Foreign Exchange Management Act (FEMA), 1999. This regulation and control by the RBI and government would be helpful in countering the security risks associated with digital currency and encourage foreign investment in this currency in India. Another advantage of digital currency is that it would be an easier method for Indian citizens abroad to send small remittances back to their family India. Furthermore, sending remittances through Bitcoins would save fees paid to third parties amounting to billions, and this would be highly beneficial to India as it is one of the world’s largest remittance market.
The Bitcoin industry is already massive in India. The demonetization policy in 2016 resulted in the country experiencing a Bitcoin boom. It resulted in the formation of new Bitcoin startups and due to an increase in demand, a large premium was charged on the Bitcoin prices. Even the ‘Digital India’ policy encouraged Bitcoin investors in India. According to a BitConnect report, India has over 1 million Bitcoin users. Legalizing digital currency in India will further lead to increase trading volumes and activities involving this currency. Thus, legalizing digital currency appears to be the right step for India. ... See MoreSee Less
“PRIVACY AND THE NATIONAL IDENTIFICATION AUTHORITY OF INDIAN BILL: LEAVING MUCH TO THE IMAGINATION” by Amba Uttara Kak and Swati Malik
Last week the Supreme Court of India finally acceded to requests for hearing the Aadhar matter by a Constitutional Bench after a long delay since such a reference was made. Important questions of individual’s right to privacy and the contours of such a right under Article 21 are pending before the Court. The first hearing is scheduled for Tuesday.
In the article “PRIVACY AND THE NATIONAL IDENTIFICATION AUTHORITY OF INDIAN BILL: LEAVING MUCH TO THE IMAGINATION” Volume 3, Issue 4 by Amba Uttara Kak and Swati Malik, the authors undertake a comprehensive study of the then NIAI Bill which later became the Aadhar Act 2016. A close reading tells us that although changes were made to the Bill later on, the new Act suffers from many ambiguities which give rise to serious concerns. The detailed analysis of the authors in the article by taking issues of information privacy, national security etc. head on, makes for an interesting read before the Supreme Court begins hearing the challenge.
Highlighted Article We are honoured to have Flavia Agnes write on the triple talaq issue days before the verdict of the Apex Court, as an early release from Volume 10 Issue 3. With the judgement days away she writes – "This article is written at a critical juncture, as we await the Supreme Court verdict on the triple talaq issue. The aim here is to trace the trajectory of this entire debate and analyse the various strands of the arguments presented before the Supreme Court. While it is anyone’s guess which way the verdict will go, this article focuses attention on the Supreme Court’s directive issued at the end of the hearing regarding the use of a conditional nikahnama to restrain husbands from pronouncing arbitrary and instant triple talaq. By placing legal developments against the political backdrop, the article attempts to comprehensively address the interplay between gender, community and law in the present with triple talaq as the context."
Weekly Note TRADEMARK IN CASE OF ARCHITECTURAL DESIGNS: PREDICTING POSSIBLE IMPLICATIONS by Priya Garg
Recently, Mumbai’s Taj Mahal Palace Hotel (‘Hotel’) has been trademarked for its architectural design. Since it is the first building in India whose architecture has been trademarked, there have been discussions regarding the possible implications of this move under the Trade Marks Act, 1999 (‘the Act’). The implications need to be understood in light of the major objectives that trademark law seeks to achieve and the broad rights it thereby grants to trademark owners.
The primary aim of the trademark law is to safeguard consumers’ and the trademark owner’s interests simultaneously, by ensuring that the usage of a mark by someone on his product is not done so as to ‘deceive’ consumers about the ‘origin’ of the product. Resultantly, even if ‘similar’ (and not ‘identical’) mark is used, even for commercial purposes, in relation to similar or identical category of products for which a trademark has already been registered, action still cannot be taken under trademark law if the usage does not ‘deceive’ public about the product’s actual origins.
This is the reason that trademarking the architectural design of the Hotel should not bar tourists, professional photographers, etc. from clicking, preserving or/and publishing its snapshots without obtaining a prior consent from the trademark owner, unless this is done in a manner that this causes confusion among public regarding the ‘origins’ of the photograph. Similarly, trade-marking the architectural design of the Hotel would not ipso facto prevent government authorities or private tourist agencies etc. from using the Hotel’s pictures in the backdrop while advertising. This is because such usages of the Hotel’s image are ordinarily not likely to make the consumers mistaken the origin of those products in relation to which the Hotel’s picture is used to that of the original trademark owner of the Hotel’s architectural design. In fact, these issues such as the right to photograph an architectural design, or to publish such photographs, or to use the picture of an architectural design in posters, merchandise etc. come under the ambit of Copyright law instead of falling under the parlance of trademark law. However, Sections 29(4) and 29(8) of the Act deal with the ‘principle of dilution’ (which prevents the usage of a mark in a manner which may dilute the goodwill of an existing registered trademark); and the latter provision also safeguards the trademark owners against the unfair commercial practice resorted to by anyone in relation to the registered trade mark. The possible effect these two provisions can have on an architectural design being trademarked actually depends upon the attitude that courts choose to adopt in interpretation of Sections 29(4) and 29(8). It may be possible that courts may interpret the usage of the Hotel’s picture in a wall-painting or on a cloth etc. as an act likely to harm the goodwill of the trademark even when such usage does not result in deception regarding the product’s origins. Therefore, the implications of the existence of right against dilution and gaining of unfair commercial advantage remains a grey area. It remains to be seen how widely or narrowly the courts choose to interpret the ambit of this type of right granted to trademark owners, specifically in relation to the architectural designs that are trademarked. ... See MoreSee Less
Weekly Note The Irony of a Digital Nation? by Mihika Poddar
Human Rights watch recently released a report scoffing at the alarming number of internet shutdowns in regions across India, touching 20 in 2017 alone. India, according to Brookings Institution’s report, had more internet shutdowns than even Iraq or Pakistan last year. This increasingly arbitrary Government clampdown on internet services does not seem to sit right with (a) the bruhaha over the Centre’s Digital India mission, (b) our domestic laws and fundamental freedoms. We have rapidly transitioned into an era where suspension of the internet is not just the obvious violation of the freedom of expression. It would also be at cross-roads with Article 19(1)(g), given the digitization drive having nurtured e-commerce to levels such that even conservative figures estimated economic losses due to shutdowns in India to the tune of $968 million in 2015-16. Given the multitude of essential Government e-services and the increasing reliance on cashless payments, especially post demonetisation, this could also be seen as a subversion of rights under Article 21. Ramifications that have only become graver in recent times would presuppose a reasonable check on the exercise of such powers. However, we see that most shutdowns are the result of the exercise of emergency powers under Section 144 of the Criminal Procedure Code, 1973, which has no inherent safeguards. While judicial review over orders subsist, post-facto nullification of such orders will be of little value, given that neither can particular victims be identified, not the harm adequately recognised and quantified. The Apex Court in Ramlila Maidan Incident v. Home Secretary, Union of India & Ors (AIR 1978 SC 597), opined that Section 144 is to be used as a last resort, when ‘a lesser alternative would be inadequate’. Further, critics have argued that recourse for such measures ought to be had under Section 69A of the Information Technology Act, 2000, along with the Information Technology (Procedure and Safeguards for Blocking for Access of Information by Public) Rules, 2009, that provide for a mechanism to block information from public access through any computer resource by a direction from the Central Government or any officer specially authorized in this behalf, and has adequate safeguards including an opportunity of hearing. We see however, that routinely, orders are passed under Section 144 by District Magistrates to preserve peace and tranquility in the face of political and other public disturbances, to prevent dissemination of inciting messages and propaganda, and even to prevent cheating in a government examination. A challenge along these lines to shut down of mobile internet services in Guarav Sureshbhai Vyas v. State of Gujarat (W.P. (PIL) No. 191 of 2015), saw the Gujarat HC defending the State’s use of its authority under Section 144, and an SLP challenging the order was dismissed by the Supreme Court with the Chief Justice noting that ‘It becomes very necessary sometimes for law and order.” How necessary an unregulated shutdown of the economy, of political freedoms and communication is, in the face of our dependence on the internet services, remains a pressing concern, bringing to the fore questions of how reasonable and proportionate these measures are. The dichotomy in populist Government policies running contrary to arbitrary exercise of disproportionate powers is strikingly troubling, to say the least. ... See MoreSee Less
Indian authorities should cease arbitrary restrictions of the country’s internet and telecommunications networks. Officials contend these shutdowns are needed to prevent violence fueled by rumors ci...