Adv. Suraj Shandil, Author at JointJuristJournal

Minority Shareholder Protection in Reverse Mergers and Cross-Border Reverse Flips: A Critical Analysis under the Companies Act, 2013

April 25, 2026

by Adv. Suraj Shandil with No Comment VOLUME 1 ,ISSUE 1.

AUTHOR: – Pramyuktha R | 6th Sem BBA – LLB |School of Law, Christ / Lavasa Campus, Pune- 412112, Maharashtra State, India.

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Abstract:

The recent trend of reverse merger and cross-border reverse flips by Indian startups, highlighted by the successful example of Zepto’s re-domiciliation from Singapore to India in January 2025, along with similar efforts by PhonePe, Groww, Razorpay, and Pine Labs, reflects a paradigm change in corporate restructuring transactions. Although these transactions are motivated by the objective of simplification, minimizing tax complexities, and enabling domestic listing, there are substantial issues associated with minority shareholder protection under the Companies Act, 2013.

This research paper will attempt to evaluate the extent of protection offered to minority shareholders under Section 230-232 of the Companies Act, 2013 in respect of schemes of arrangements and amalgamations in light of reverse merger and cross-border flips. Despite the provisions for approval by a majority of members, NCLT sanction, and valuation norms, the current regime is primarily procedural and lacks any substantive analysis on issues relating to the fairness of valuation, appraisal rights, and information symmetry information for the benefit of minority shareholders.

Through this research along with recent case studies such as Zepto, PhonePe, and other transactions involving reverse flip mergers done in 2025, the study analyzes the important lacunae like the weak appraisal rights for the dissenting shareholders, majority dominance over ratio of exchange of shares, restricted review powers of the NCLT, and regulatory gaps in fast-track process through Section 233.

The paper suggests that despite the changes introduced by regulatory bodies and the new fast track procedures for mergers starting from 2024 and extending till 2025, minority shareholder protection has been somewhat sidelined and there exist many loopholes. The paper provides some important recommendations like independent fairness opinion, statutory appraisal right and compulsory buy-out mechanism, substantive test for review powers of NCLT, and guidelines issued by SEBI-MCA.

Keywords: Reverse Mergers, Cross-Border Reverse Flips, Minority Shareholder Protection, Sections 230-232 Companies Act 2013, NCLT Approval, Startup Restructuring, Corporate Governance.

Introduction:

The Indian startup ecosystem is currently witnessing an immense rise in the number of reverse mergers and cross-border reverse flips. The objective is to streamline the highly complicated offshore corporate structure and make way for the domestic listing of firms. Well-known startups like Zepto, PhonePe, Groww, Razorpay, and Pine Labs have already initiated or completed the process of reincorporating themselves in India after being incorporated overseas in places like Singapore, Netherlands, or the Cayman Islands. The move gathered considerable pace in 2024-2025 following some regulatory relaxations and the need to enter the domestic capital market.^[1]

Reverse merger and reverse flip is one of the many types of mergers, which entails restructuring of the company through scheme of arrangement and amalgamation. The process is governed under Sections 230 to 232 of the Companies Act, 2013. According to the legislation, it must be approved by not less than three-fourths of the members and creditors and then sanctioned by the NCLT.^[2] While there are procedures established by law regarding reverse mergers and flips, the issue is that serious concerns have been raised about the protection of minority stakeholders.

The primary research question that will be addressed in this paper is that despite procedural safeguards provided by the regime, there is a lack of substantive protection for minority shareholders through reverse mergers and reverse flips under Companies Act, 2013. This gives rise to a potential for majority dominance and manipulation, leading to issues of fair valuation and disclosure, thus resulting in a lack of confidence of the investors.

This paper will address the following research questions:

Does the current regime under Sections 230-232 provide adequate substantive protections to minority shareholders in reverse merger transactions?
How effective are the provisions regarding valuation, disclosure, and exit rights in cross-border reverse flips?
What are the major practical and regulatory gaps affecting minority protection?
What reforms should be made for enhanced minority protection without obstructing business restructuring?

The main purposes of this paper include a critical evaluation of the law, an examination of recent transactions, an identification of weaknesses, and recommendations for reform. The research methodology involves a doctrinal approach supplemented by a study of relevant case studies, particularly recent transactions, as well as a comparative analysis of other jurisdictions like the UK, Singapore, and the US.

Conceptual Framework:

2.1 Meaning and Nature of Reverse Mergers

A reverse merger is a corporate restructuring mechanism where a privately held company acquires a public company, typically a shell entity with negligible business operations. Through this process, the private company gains immediate access to the stock market without undergoing the lengthy and expensive traditional initial public offering (IPO) route.^[3]

In the Indian startup context, the concept has evolved significantly into what is popularly known as “reverse flips”. A reverse flip refers to the relocation of the ultimate parent company of an Indian startup from an offshore jurisdiction such as Singapore, the Netherlands, Cayman Islands, or the United States back to India.^[4] This involves a complex inbound cross-border restructuring where the foreign holding company is merged into an Indian entity or its business is transferred to a new or existing Indian company.

The primary objectives behind reverse flips include simplification of the corporate structure, reduction of multiple layers of overseas entities, optimisation of tax liabilities, better compliance with Indian regulations, and easier access to domestic capital markets for future fundraising and listing.^[5]

2.2 Types of Reverse Mergers and Flips

For the purpose of this study, reverse mergers and flips can be broadly classified into two categories:

(a) Domestic Reverse Mergers – These involve two or more Indian companies where a private Indian entity merges with a listed or shell Indian company.

(b) Cross-Border Reverse Flips – These are inbound transactions where a foreign company (usually the parent holding company of an Indian startup) merges into an Indian company or transfers its assets and liabilities to an Indian entity.^[6]

Cross-border reverse flips have witnessed a sharp rise since 2024, largely driven by changes in tax laws, liberalised FDI policies, and the attractiveness of Indian public markets.

2.3 Minority Shareholders: Concept and Vulnerability

Minority shareholders are those who collectively hold less than 50% of the voting share capital of a company and do not possess controlling influence over its management or decision-making. In the startup ecosystem, minority shareholders usually comprise early employees holding Employee Stock Option Plans (ESOPs), angel investors, small venture capital funds, and retail investors who participated in seed or early funding rounds.

These shareholders are highly vulnerable in reverse mergers and flips due to several structural disadvantages, including severe information asymmetry, heavy reliance on promoters for critical decisions such as valuation and share exchange ratio, limited negotiation power, and relatively weak influence even when their approval is required under the three-fourths majority norm prescribed under Section 230(6) of the Companies Act, 2013.^[7]

2.4 Need for Strong Minority Shareholder Protection

Robust protection of minority shareholders is essential for maintaining investor confidence, ensuring fairness and transparency in corporate restructurings, and fostering healthy capital market growth. In the absence of effective safeguards, minority shareholders often face risks such as forced dilution of their holdings, exit at undervalued prices, and loss of economic rights. Such outcomes not only cause individual injustice but also discourage potential investors from participating in Indian startups.

Although the Companies Act, 2013 incorporates several provisions aimed at minority protection, such as mandatory disclosures, NCLT approval, and limited exit rights , their practical efficacy in the fast-evolving landscape of reverse mergers and cross-border flips remains questionable and requires deeper scrutiny.

3. Legal Framework:

3.1 Scheme of Arrangement under Sections 230–232 of the Companies Act, 2013

Sections 230 to 232 of the Companies Act, 2013 form the core legal framework for reverse mergers and cross-border reverse flips in India. Section 230 deals with compromises and arrangements between a company and its members or creditors, while Section 232 specifically governs mergers and amalgamations.^[8] These sections require that the scheme must be approved by a majority of not less than three-fourths in value of the members and creditors present and voting. After approval, the scheme requires sanction by the National Company Law Tribunal (NCLT), which must be satisfied that the scheme is fair, reasonable, and in the public interest.^[9]

3.2 Fast Track Merger Route under Section 233

Section 233 provides a simplified fast-track merger process for small companies, holding-subsidiary companies, and certain other prescribed classes. This route does not require NCLT approval if no objections are received from the Registrar of Companies or the Official Liquidator.^[10] However, this provision has limited application in complex reverse flip transactions involving listed entities or cross-border elements.

3.3 Role of SEBI Regulations

Where the scheme involves a listed company or a company intending to list after the reverse flip, SEBI regulations become applicable. Key regulations include the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, and the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.^[11] These mandate detailed disclosures, independent valuation reports, fairness opinions, and sometimes an open offer to public shareholders.

3.4 Cross-Border Reverse Flips under Section-234

Cross-border aspects of reverse flips are regulated by Section 234 of the Companies Act, 2013 read with Rule 25A of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016.^[12] This section permits inbound cross-border mergers (foreign company merging into an Indian company) subject to prior approval of the Reserve Bank of India (RBI) under FEMA and compliance with other notified conditions.

3.5 Valuation Requirements

Valuation is a mandatory requirement under Rule 6 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. Every scheme must be accompanied by a valuation report prepared by a registered valuer.^[13] In cases involving listed companies, SEBI also requires a separate fairness opinion from an independent merchant banker.

The existing legal framework appears detailed and structured. However, its effectiveness in providing substantive protection to minority shareholders, especially in high-stake reverse flip transactions, remains a subject of debate.

4. Key Issues and Challenges in Minority Shareholder Protection:

4.1 Limited Substantive Scrutiny by NCLT

A major concern in reverse mergers and cross-border reverse flips is that the National Company Law Tribunal (NCLT) generally restricts itself to procedural compliance rather than conducting a deep substantive review of the scheme. Even though the law requires the Tribunal to ensure the scheme is fair and reasonable, in practice, it rarely examines the fairness of valuation or the share exchange ratio in detail unless a significant number of objections are filed.^[14]

4.2 Deficiencies in the Valuation Process

Valuation is the heart of any reverse merger, yet it remains one of the weakest areas for minority protection. Registered valuers prepare the report, but minority shareholders often find it difficult to challenge the key assumptions, growth projections, and discount rates used in the valuation. There are increasing instances where promoters allegedly influence the valuation outcome to their advantage.^[15]

4.3 Overwhelming Majority Dominance

The requirement of three-fourths majority approval under Sections 230–232 gives dominant promoters and large investors almost complete control over the outcome of the scheme. Minority shareholders, including ESOP holders and small investors, have very little practical power to influence or block the transaction even if they consider the terms unfair.^[16]

4.4 Inadequate Exit Rights for Dissenting Shareholders

Unlike several developed jurisdictions, Indian company law does not provide strong appraisal or buy-out rights to dissenting minority shareholders. They are largely forced to either accept the share exchange ratio decided by the majority or sell their shares in the secondary market, often at a lower value.^[17]

4.5 Severe Information Asymmetry and Poor Disclosure Standards

Minority shareholders frequently complain about receiving complex scheme documents at the last minute and in highly technical language. In cross-border reverse flips, additional layers of foreign laws, tax implications, and regulatory approvals make it extremely difficult for ordinary minority shareholders to understand how the transaction will actually affect their rights and holdings.^[18]

4.6 Regulatory Gaps and Overlaps

The involvement of multiple regulators like MCA, NCLT, SEBI, and RBI creates confusion and leaves several gaps in minority protection, especially in fast-track and cross-border transactions.

These challenges show that while the legal structure supports quick corporate restructuring, it provides only limited and mostly procedural protection to minority shareholders in reverse mergers and reverse flips.

5. Recent Developments and Case Studies:

5.1 Zepto’s Reverse Flip (January 2025)

Zepto, one of India’s leading quick commerce platforms, successfully completed its much-awaited reverse flip in January 2025. The company shifted its Singapore-incorporated holding company back to India through a scheme of arrangement under Sections 230-232 of the Companies Act, 2013. The primary objectives were to simplify its multi-layered offshore structure, reduce tax inefficiencies, and prepare for a potential initial public offering (IPO) on Indian stock exchanges.

The NCLT Mumbai Bench sanctioned the scheme after receiving the required three-fourths majority approval. However, several minority shareholders and ESOP-holding employees raised serious concerns about the fairness of the share exchange ratio, adequacy of valuation, and limited time provided for raising objections. Despite these concerns, the scheme was approved with very little modification by the Tribunal.^[19]

5.2 PhonePe’s Reverse Flip Process (2024–2025)

PhonePe, a major player in the digital payments and fintech space, began its reverse flip journey in late 2024 by moving its parent entity from the Netherlands to India. This restructuring involved a complex scheme of amalgamation aimed at consolidating the entire group under an Indian holding company.

The transaction attracted significant attention due to PhonePe’s high valuation. Minority investors, including some early employees and small stakeholders, expressed dissatisfaction over the valuation methodology adopted and the lack of transparent disclosure regarding the impact of the flip on their shareholding and ESOPs. The scheme ultimately received strong support from majority shareholders and was approved by NCLT.^[20]

5.3 Other Prominent Cases: Groww, Razorpay, and Pine Labs

Several other unicorns followed a similar path during 2024–2025. Groww (a leading investment platform), Razorpay (a payments solutions company), and Pine Labs (a merchant payments firm) either completed or initiated reverse flips from Singapore or other jurisdictions to India. These moves were largely driven by the desire to streamline operations, benefit from favourable Indian tax policies post-2024 amendments, and position themselves for domestic public listings.^[21]

In all these cases, the restructuring process followed the standard route of NCLT approval under Sections 230-232, with additional compliance under SEBI regulations and RBI guidelines for cross-border elements.

5.5 Common Trends and Implications

A clear pattern emerges from these recent high-profile transactions. First, reverse flips have become a preferred strategy among Indian unicorns to “come home” for better market access and regulatory simplicity. Second, the approval process is generally fast and smooth due to strong promoter control and majority support. Third, and most importantly, minority shareholders, especially ESOP holders and small investors consistently face similar difficulties: late receipt of scheme documents, complex technical language, limited ability to challenge valuation, and almost no effective exit options.^[22]

These case studies clearly demonstrate that while reverse mergers and flips are facilitating faster corporate restructuring and supporting the startup ecosystem, the current legal mechanism provides only formal compliance rather than real substantive protection to minority shareholders.

6.Critical Analysis & Comparative Insights:

6.1 Procedural Safeguards vs Substantive Fairness

The statutory framework governing reverse mergers under the Companies Act 2013 appears comprehensive on paper, incorporating safeguards such as majority approval, disclosure requirements, valuation reports, and judicial sanction. However, these safeguards largely operate at a procedural level rather than ensuring substantive fairness for minority shareholders.

The requirement of approval by a three-fourths majority, though intended to reflect collective consent, often results in the dominance of promoters and institutional investors who control significant shareholding. Consequently, minority shareholders, despite being formally included in the voting process, have limited practical ability to influence the outcome of the scheme. This raises concerns about whether the framework genuinely protects minority interests or merely legitimises decisions taken by controlling stakeholders.^[23]

6.2 Limitations of NCLT Scrutiny

The role of the National Company Law Tribunal (NCLT) is central to the approval of schemes under Sections 230–232. While the Tribunal is expected to ensure that a scheme is fair and reasonable, judicial precedents indicate that its scrutiny is generally limited. Courts have consistently emphasised the principle of “commercial wisdom of the majority,” thereby restricting judicial interference to cases involving illegality, fraud, or manifest unfairness.

In Miheer H. Mafatlal v. Mafatlal Industries Ltd., the Supreme Court held that the court does not sit in appeal over the commercial decisions of shareholders, thereby reinforcing a deferential approach.³ Similarly, in Hindustan Lever Employees’ Union v. Hindustan Lever Ltd., the Court upheld the scheme on the basis that procedural requirements had been satisfied.^[24]

This approach, while promoting efficiency and reducing judicial delays, significantly weakens substantive review. In complex reverse flip transactions involving intricate valuation methodologies and cross-border elements, the absence of rigorous scrutiny limits the effectiveness of judicial oversight as a protective mechanism for minority shareholders.

6.3 Valuation and Absence of Effective Appraisal Rights

Valuation constitutes the core of any reverse merger, as it determines the share exchange ratio and the economic consequences for shareholders. Although the law mandates valuation reports by registered valuers and, in certain cases, fairness opinions, these mechanisms do not adequately safeguard minority interests.

Minority shareholders often lack access to underlying financial data and technical expertise required to assess valuation methodologies. As a result, they are unable to effectively challenge assumptions relating to projected growth, discount rates, and comparable benchmarks.^[25]

Further, Indian law does not provide strong statutory appraisal rights comparable to those available in other jurisdictions. Dissenting shareholders are not entitled to seek an independent judicial determination of fair value and are effectively compelled to accept the terms of the scheme or exit at potentially undervalued prices.⁶ This absence of a robust exit mechanism significantly undermines the principle of equitable treatment and places minority shareholders at a structural disadvantage.

6.4 Comparative Perspective: United States, United Kingdom, and Singapore

A comparative analysis highlights the structural limitations of the Indian framework in ensuring effective minority shareholder protection in reverse merger transactions. While Indian law under the Companies Act 2013 provides procedural safeguards such as majority approval, valuation reports, and tribunal sanction, comparable jurisdictions adopt a more substantive approach that places greater emphasis on fairness and investor protection.

In the United States, particularly under Delaware corporate law, dissenting shareholders are granted strong statutory appraisal rights that enable them to seek a judicial determination of the “fair value” of their shares.^[26] Courts in Delaware actively examine valuation methodologies, including discounted cash flow analysis, comparable company benchmarks, and deal price indicators. Importantly, courts are not bound by the company’s valuation and may independently reassess the economic fairness of the transaction.^[27] This ensures that minority shareholders are not compelled to accept undervalued exit terms and acts as a significant check on managerial and majority shareholder power.

In the United Kingdom, schemes of arrangement under the Companies Act 2006 are subject to a two-stage court approval process, which incorporates both procedural and substantive scrutiny. Courts assess whether the statutory requirements have been fulfilled and whether the scheme is fair to all classes of shareholders. The well-established “reasonable shareholder” test requires the court to determine whether an intelligent and honest shareholder, acting in their own interest, could reasonably approve the scheme.^[28] This standard ensures that majority approval does not automatically validate a transaction and that minority interests are meaningfully considered.

Similarly, Singapore adopts a hybrid approach that combines judicial oversight with strong disclosure obligations. Under the Singapore Companies Act, courts examine whether shareholders have been provided with adequate and comprehensible information to evaluate the scheme.^[29] The emphasis on transparency reduces information asymmetry and enables minority shareholders to participate more effectively in decision-making. Additionally, Singapore courts have demonstrated a willingness to scrutinise schemes where there is evidence of unequal treatment or inadequate disclosure.

In contrast, the Indian framework remains largely compliance-oriented. The National Company Law Tribunal (NCLT), while empowered to assess whether a scheme is fair and reasonable, generally adopts a deferential approach and relies heavily on the approval of the majority. The absence of strong statutory appraisal rights and the limited scope of judicial scrutiny restrict the ability of minority shareholders to challenge valuation or restructuring terms effectively. As a result, procedural compliance often substitutes for substantive fairness.

This comparative perspective demonstrates that, unlike jurisdictions such as the United States, the United Kingdom, and Singapore, where minority protection is embedded in both procedural and substantive safeguards, the Indian approach continues to prioritise efficiency and ease of doing business. While this facilitates faster corporate restructuring, it raises serious concerns regarding the adequacy of minority shareholder protection in reverse mergers and cross-border reverse flips.

6.5 Emerging Trends and Practical Implications

Recent developments in the Indian startup ecosystem, particularly the surge in reverse flips during 2024-2025, further illustrate these systemic limitations. Transactions involving companies such as Zepto and PhonePe demonstrate that minority concerns relating to valuation, disclosure, and participation are often acknowledged but rarely addressed in a meaningful manner.

The speed and efficiency of approvals, driven by strong promoter control and majority support, often come at the cost of deeper scrutiny. Minority shareholders frequently face challenges such as delayed access to information, complex documentation, and lack of effective exit options.

These trends indicate that while reverse mergers and reverse flips contribute to corporate restructuring and economic growth, they simultaneously expose gaps in the existing legal framework. The current regime, therefore, appears to prioritise procedural efficiency over substantive fairness, thereby limiting its effectiveness in protecting minority shareholders.

7. Suggestions & Reform Proposals:

7.1 Strengthening Valuation and Fairness Mechanisms

A primary reform should focus on improving the credibility and independence of valuation processes. The law should mandate a separate “fairness opinion” by an independent merchant banker in all reverse merger and reverse flip transactions, distinct from the valuation report prepared by registered valuers. Additionally, shareholders should be given a statutory right to access underlying financial assumptions and challenge valuation methodologies before approval of the scheme. This would enhance transparency and reduce the scope for promoter-driven valuation manipulation.

7.2 Introduction of Statutory Appraisal Rights

Indian law should incorporate explicit appraisal rights for dissenting shareholders, allowing them to seek an independent judicial determination of fair value within a specified time frame. Such a mechanism would align the Indian framework with global best practices and provide a meaningful exit option for minority shareholders who oppose the scheme. A time-bound buy-out obligation on the company or promoters would further ensure that minority shareholders are not compelled to accept unfavourable terms.^[30]

7.3 Enhancing the Role of NCLT in Substantive Review

The National Company Law Tribunal (NCLT) should adopt a more proactive role in assessing the substantive fairness of schemes rather than limiting itself to procedural compliance. Legislative or regulatory guidelines may be introduced to require the Tribunal to specifically examine valuation fairness, adequacy of disclosures, and impact on minority shareholders. A structured checklist-based review mechanism could ensure consistency and accountability in decision-making. ^[31]

7.4 Special Regulatory Framework for Cross-Border Reverse Flips

Given the increasing complexity of cross-border reverse flips, there is a need for clear and coordinated guidelines involving multiple regulators. The Securities and Exchange Board of India and the Reserve Bank of India should jointly issue a comprehensive framework addressing valuation standards, disclosure requirements, and shareholder rights in such transactions. This would reduce regulatory overlaps and provide greater certainty to investors.

7.5 Improving Disclosure and Shareholder Participation

To address information asymmetry, companies should be required to provide simplified and timely disclosures of scheme documents, including executive summaries explaining key implications for shareholders. Minimum notice periods should be strictly enforced, and digital platforms should be used to facilitate wider participation and informed voting. Enhanced disclosure norms would empower minority shareholders to make meaningful decisions.^[32]

Conclusion:

This paper has examined the evolving landscape of reverse mergers and cross-border reverse flips in India and their implications for minority shareholder protection. While the statutory framework under the Companies Act 2013 provides a structured mechanism through Sections 230–232, the analysis reveals that the protection afforded to minority shareholders remains largely procedural rather than substantive.

The requirement of majority approval, combined with limited judicial scrutiny by the National Company Law Tribunal (NCLT), often results in the dominance of promoters and controlling shareholders. Minority shareholders, despite being formally included in the decision-making process, lack meaningful influence over critical aspects such as valuation, disclosure, and restructuring terms. The absence of strong appraisal rights and effective exit mechanisms further aggravates this imbalance.

Recent developments in the startup ecosystem, particularly the wave of reverse flips involving companies such as Zepto and PhonePe, demonstrate that while these transactions facilitate corporate restructuring and enhance access to domestic capital markets, they simultaneously expose structural gaps in minority protection. The comparative analysis with jurisdictions such as the United States, the United Kingdom, and Singapore further underscores the need for a more substantive and investor-centric approach in India.

In conclusion, while reverse mergers and reverse flips contribute to economic efficiency and ease of doing business, they must be balanced with stronger safeguards for minority shareholders. Strengthening valuation processes, introducing statutory appraisal rights, and enhancing judicial scrutiny are essential steps toward ensuring fairness and maintaining investor confidence. Future reforms must therefore aim to shift the framework from mere procedural compliance to genuine substantive protection.

^[1] Most Startup Investors See IPO Mania Fuelling Reverse Flipping Trend In 2025, Inc42, Jan. 9, 2025.

^[2] The Companies Act, 2013, §§ 230–232.

^[3] S. M. S. S. Corporate Professionals, Reverse Mergers: A Faster Route to Going Public 7 (Taxmann, 2024).

^[4] Nishith Desai Associates, Reverse Flips by Indian Startups: Regulatory and Tax Perspective 3 (Feb. 2025)

^[5] EY India, Startup Ecosystem Report 2025: Trends in Restructuring and Listings 42 (2025)

^[6] The Companies Act, 2013, § 234 (governing cross-border mergers and amalgamations).

^[7] Organisation for Economic Co-operation and Development, G20/OECD Principles of Corporate Governance 58 (2023).

^[8] The Companies Act, 2013, §§ 230–232.

^[9] Miheer H. Mafatlal v. Mafatlal Industries Ltd., (1997) 1 SCC 579 (Sup. Ct. India).

^[10] The Companies Act, 2013, § 233.

^[11] Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, Reg. 37; Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, Reg. 163.

^[12] The Companies Act, 2013, § 234; The Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, Rule 25A.

^[13] The Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, Rule 6.

^[14] Hindustan Lever Employees’ Union v. Hindustan Lever Ltd., (1995) 1 Comp LJ 1 (Bom).

^[15] Deloitte India, Valuation Challenges in Startup Reverse Flips 15 (2025).

^[16] Umakanth Varottil, Corporate Law in India 456 (3rd ed., 2024).

^[17] SEBI, Consultation Paper on Schemes of Arrangement (2024).

^[18] PwC India, Cross-Border Restructuring: Investor Protection Concerns 28 (Jan. 2025).

^[19] Zepto Completes Reverse flip from Singapore to India, Economic Times, Jan. 28, 2025,

^[20] PhonePe’s Corporate Restructuring and Valuation Concerns, Mint (Feb. 2025).

^[21] India’s Reverse-Flip Wave: Regulatory Breakthroughs and Enabling Frameworks, IndiaCorpLaw, Oct. 29, 2025

^[22] Reverse mergers: regulatory challenges and investor protection, Mondaq (2025),

^[23] Companies Act 2013, §§ 230–232.

^[24] Miheer H. Mafatlal v. Mafatlal Indus. Ltd., (1997) 1 SCC 579.

^[25] Unpacking Reverse Mergers: Minority Shareholders & Appraisal Rights, NUALS L. J. (2023),

^[26] Del. Code Ann. tit. 8, § 262 (2024).

^[27] DFC Global Corp. v. Muirfield Value Partners, L.P., 172 A.3d 346 (Del. 2017).

^[28] Re Alabama, New Orleans, Texas and Pacific Junction Railway Co., (1891) 1 Ch 213 (CA).

^[29] Re Halley’s Departmental Store Pte Ltd, [2015] SGHC 202 (Sing.).

^[30]OECD, G20/OECD Principles of Corporate Governance 2015 (rev. 2023)

^[31]Ministry of Corporate Affairs, Report of the Company Law Committee (2022)

^[32]Reverse merger scenario in India, Legal 500 (2025),

TRIPLE TALAQ: POST-ABLOTION LEGAL AND SOCIAL IMPLICATIONS

April 25, 2026

by Adv. Suraj Shandil with No Comment VOLUME 1 ,ISSUE 1.

AUTHOR: Akanksha Kumari

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ABSTARCT

The practice of Triple Talaq is a form of unilateral divorce in Islamic law which has been subject of intense scrutiny, debate and legal reforms in recent years. This research paper delves into the multi-faceted dimensions of this practice, examining the historical roots, legal dimensions, societal impacts and gender perspectives. Triple Talaq or talaq-e-biddat, is an Islamic divorce allowing a husband to pronounce “talaq” thrice in single sitting, leading to an immediate and irrevocable dissolution of marriage. The main discussions of this research paper revolve around unconstitutionality of Triple Talaq. The study highlights the landmark judgement by the Supreme Court of India that declared Triple Talaq unconstitutional in 2017 and also examines the role of Indian law in protecting the Muslim women’s rights. The research concludes with actionable recommendations for future action and emphasis the ongoing need for reforms. Through a nuanced analysis, the paper endeavors to assess whether this declaration of triple talaq as unconstitutional serves as boon or bane for Muslim women, considering diverse perspectives and societal ramification.

Key Words – Triple Talaq, Muslim Women Right’s, Islamic law, Divorce, Unconstitutional

INTRODUCTION

Triple Talaq, also known as instant divorce or talaq-e-biddat, is a controversial practice in Islamic law that allows a Muslim man to divorce his wife by simply uttering the word “talaq” (divorce) three times in one sitting, without any judicial intervention or consideration for reconciliation. This practice has faced significant criticism and debate within Muslim communities and beyond due to concerns over gender equality and the well-being of women, as it grants unilateral power to men and often results in the abrupt and irreversible dissolution of marriages. Many argue that Triple Talaq undermines women’s rights, as it denies them the opportunity to seek legal recourse or negotiate terms of divorce. Several countries, including India, have taken steps to ban or regulate this practice, while others continue to grapple with finding a balance between religious freedom and gender justice. The debate surrounding the legality of Triple Talaq in India has its roots in the historical context of personal laws in the country. India, being a secular state, recognizes different personal laws for different religious communities, including Muslims. The historical development of Triple Talaq in India has also been influenced by social, cultural, and political factors. The practice became deeply ingrained in certain communities and was seen as a way to maintain patriarchal control over women’s lives and relationships. Over time, it became a matter of personal law and was recognized and protected by the state. However, in recent years, there has been a growing realization and acknowledgment of the negative consequences of Triple Talaq on women’s rights and well-being. The debate surrounding its legality and reform has gained momentum, leading to legal challenges and calls for change within the Muslim community in India. Activists and Muslim women’s organizations argue that Triple Talaq is discriminatory, violates women’s rights, and goes against the principles of equality and justice enshrined in the Indian Constitution. They contend that Triple Talaq is not a religious practice and should be declared unconstitutional. While hearing this petition, in August 2017, the Supreme Court ruled that Triple Talaq is unconstitutional and violated the fundamental rights of Muslim women. In response, the Indian government passed The Muslim Women (Protection of Rights on Marriage) Act in 2019, which criminalizes Triple Talaq and provides for imprisonment and fines for those found guilty of practicing it. However, the Act continues to be a subject of debate, with critics arguing that it criminalizes a civil matter and may not effectively address the issue of women’s empowerment.

MEANING & ORIGIN OF TRIPLE TALAQ

Talaq is an Islamic word for divorce and it literally means separating and breaking of marriage. In essence, ‘talaq is a unilateral repudiation of cutting off the marital tie’.[1] Since, the Muslim marriage is a civil contract and not a sacrament. Muslim law imposes obligation upon the husband to pay consideration of the marriage to the wife as a mark of respect. The relevant verses under Chapter LXV of Holy Quran say, “Divorce is only permissible twice; after that the parties can hold up together or proceed with separation”. According to interpreters talaq-ul-Biddat is “Sinful but effective” proposition in English “Bad I theology but good in law”. This irregular mode of talaq was introduced by Omeyyads in order to evade the stringency of law.[2] No verse in the Holy Quran can be interpreted which give authenticity to so called triple talaq. Triple talaq is recognized but it is disapproved form of dissolution of marriage. Prophet condemned triple talaq as “playing with the book of God while I am still alive.”[3] However, after the death of Prophet, the second Caliph Umar started giving effect to triple talaq in order to prevent the misuse and abuse of religion. When Arabs conquered regions like Egypt, Persia and Syria, they found local women more attractive than Arabian women. And many of these women conditioned marriage on divorcing existing wives through Triple Talaq in one sitting, Arab men accepted this knowing that Islam permits divorce only twice in separate tuhr periods, rendering Triple Talaq void. To address misuse Caliph Umar temporarily validated Triple talaq as an administrative measure but not as law. Unfortunately, Hanafi jurists later legitimized this practice granting it religious sanction, which continues to be controversial precedent.

TRIPLE TALAQ UNDER HANAFI SCHOOL OF LAW

The Hanafi school is the first of the four and the largest orthodox Sunni schools of law. It differs from the other schools of law through its placing less reliance on mass oral traditions as a source of legal knowledge. In India, majority of the Muslims are followers of the Hanafi school of thought and this is because Imam Abu Hanifa is the main promoter of it. The Hanafi’s acknowledged that there are two forms of talaq that is –

Talaq-ul-Sunnat or talaq according to the rules of the Prophet
Talaq-ul-biddat or new or irregular form of talaq.

According to Mulla, Talaq-ul-biddat was introduced by the Omeyyade monarchs in the second century of the Mohammedan era. Hanifi school of thought was one of major schools of Sunni community which believed that if the husband pronounced ‘talaq’ three times in one sitting this will lead to divorce (Talaq-ul-biddat) and the talaq will be considered valid.[4] This practice allowed the man to unilaterally divorce his wife. In India, the practice of triple talaq has been followed by the Hanafi sect since the advent of Islam in the Indian sub-continent. However, the Hanafi school believes that although talaq-e-biddat is a sinful form of divorce, but seeks to justify it on the ground though bad in theology, it is good in law. Therefore, it gained validity based on the acceptance of the same view by the British courts before independence.

SHAYARA BANO v. UNION OF INDIA

Over the years, there has been a movement within India to challenge the legality of Triple Talaq by advocating for gender justice. Throughout India the activists and women’s organizations argue that Triple talaq is discriminatory, violates women’s rights and goes against the principles of equality and justice enshrined in the Constitution of India. They contend that Triple Talaq is not an essential religious practice and should be declared unconstitutional. The issue gained attention when a Muslim women Shayara Bano from Uttarakhand in 2016 filed a petition in the Supreme Court of India challenging the practice of Triple talaq.[5]

Supreme Court Verdict on Triple Talaq (2017)

In 2017, the Supreme Court through a 5-judge bench delivered a historic judgement on the practice of Triple Talaq. The Constitution bench of the court in a 3:2 majority, led by J.S. Khehar, declared Triple Talaq to be unconstitutional and violative of fundamental rights, that is Article 14 , 21, and 25 which states the Right to Equality, Right to Life and Personal Liberty and Right to Freedom of Religion. The Courts’s judgment was based on the premise that the Triple Talaq was arbitrary, discriminatory and violated the constitutional guarantees of equality and justice. The verdict however was a major milestone towards gender justice and it was widely hailed as a victory for women’s rights in India. In the legal history of India, this ruling was acknowledged that the personal laws could not be used to justify discrimination and harm against women. The majority opinion, delivered by Justice Joseph, examined if the practice of triple talaq would amount to an integral religious practice of Islam. It was held by the Court that triple talaq was not an essential religious practice, as it was not mentioned in the Quran and was considered sinful by some Islamic scholars. Therefore, triple talaq was not protected under Article 25[6] of the Indian Constitution which guarantees freedom of religion. The Court also evaluated the practice through the lens of justice and gender equality and enshrined in Article 14, 16 and 21 Indian Constitution. It found the practice to be arbitrary enabling the unilateral divorce of Muslim wives without consideration of their rights. This allows such practice as arbitrary is against the constitutional guarantees of equality and non-discrimination based on sex. The practice of triple talaq could not be considered under Islamic law as it violated principles of gender justice central to the Indian Constitution.

Implications of the Judgment

The Supreme Court’s judgment of prohibiting triple talaq had far reaching consequences for personal laws and secularism in India. This meant a fundamental shift in the relationship between religion and rights and overturning the decades of practice of triple talaq. The court ruled that Triple Talaq was arbitrary as Muslim men instantly divorcing their wives by uttering talaq three times was declared unconstitutional. This ended an abusive practice that had affected thousands of Muslim women, finally granting them equal rights under the law. The judgment impacted social norms and perspectives surrounding the gender roles and women’s rights in India. This empowered the Muslim women to stand up against patriarchal customs and demand justice through the courts. Henceforth, this ruling had fueled a wider movement for reforming personal laws and establishing a uniform civil code. The declaration of triple talaq as unconstitutional itself asserts the supremacy of constitutional rights over religious laws and customs. Moreover, this signifies implications for secularism in India, setting a precedent that fundamental rights cannot be violated on the grounds of religious practices. As a result, this ruling had stimulated the ongoing controversies on the balance of religious freedom with the principles of equality and justice.

THE MUSLIM WOMEN (PROTECTION OF RIGHTS ON MARRIAGE) ACT, 2019

Even after the Supreme Courts’s verdict in the Shayara Bano case, there were still reports of around 100 instances of pronouncing of triple talaq in the country.[7] And because as such there was no law to punish those who continued to practice Triple Talaq therefore to provide legal remedies to the victims of such practice there was a need to make law for the effective implementation of the Supreme Court judgment. After much discussions, the Indian Parliament enacted the Muslim Women (protection of Rights on Marriage) Act, 2019 in September, 2019. The Act declares the instant divorce granted by pronouncement of talaq three times as void and illegal.[8] This provided imprisonment for a term up to three years and fine to the husband who practiced instant triple talaq.[9] The Act also granted the Muslim woman upon whom the talaq has been pronounced the custody of children and subsistence allowance to be paid by the husband.[10] The act, declared triple talaq as cognizable and non-bailable offense. Moreover, it is stated that when the husband pronounces the talaq to his wife, in that case the wife is entitled to the custody of minor children.[11] Consequently, this act has been a deterrent for husband who intend to divorce their wives in this manner.

While the Muslim Women (Protection of Rights on Marriage) Act, 2019 has been an important step towards resolving the Triple Talaq issue but there are challenges in the implementation of the act. Firstly, there is lack of awareness and education about the laws and their rights and also available legal remedies. In addition, it is essential to implement and enforce the law in all regions of India to ensure its full impact. Secondly, divorced Muslim women still face social stigma and challenges in the society. The act has faced criticism from some quarters arguing that it interferes with religious practices and infringes upon the autonomy of Muslim personal law. Several opposition parties and legal experts questioned the necessity of criminal penalties arguing that divorce is a civil matter and should not be criminalized.

The abolition of triple talaq signifies the empowerment of Muslim women in India. By criminalizing this archaic practice, the government has strengthened the ideals of gender equality and ensured the dignity, security and justice for Muslim women. This legal reform supports their constitutional, fundamental and democratic rights which was previously undermined by the one sided and immediate nature of the triple talaq. Previously, the practice of immediate divorce has left many women vulnerable to financial instability, homelessness and social ostracization. However, with the legal framework that is introduced the Muslim women have access to legal remedies, maintenance rights and a way to safer future. One of the most remarkable results of this legislative reform is the drastic decrease in Triple Talaq cases. According to official data, Triple talaq cases have been decreased by almost 82% within one year of the act passed.[12] This demonstrates the effectiveness of the status in discouraging abuse of arbitrary divorce and emphasizes the shift towards a fairer legal system for Muslim women. The act had penalized the practice of Triple Talaq which has functioned as a strong deterrent and hence ensured better compliance with the law. In recognition, the government declared August 1 as ‘Muslim Women’s Rights Day’. Additionally, observed nationwide since 2021, this day has been commemorating the passage of the law and serves as a reminder of progress in the protection of Muslim women from social injustices.

LEGAL IMPLICATIONS OF TRIPLE TALAQ ABOLITION

The abolition of Triple Talaq has brought deep legal consequences and transformed the framework of Muslim marriage and divorce laws in India. Before the enactment of the Muslim Women Act (Protection of Rights to Marriage) of 2019, the practice of Talaq-ul-biddat made it possible to divorce their wives immediately and often to leave women without financial support or legal procedure. The new law fundamentally changed this landscape by making the practice invalid and illegal, which ensures that divorce proceedings will be carried out in a fair and just way.

Changes in the laws of Muslim marriage and divorce

The legal transformation after the abolition of Triple Talaq had significant consequences for Muslim marriage and divorce laws. The new provisions order that the Muslim man looking for divorce must follow the prescribed legal procedures under personal law before resorting to unilateral and arbitrary means. This change is in accordance with the wider principles of justice and a proper process anchored in Indian law and ensures that both spouses have the same word in the dissolution of marriage.[13] The law further protects the rights of Muslim women by providing access to maintenance, care for children and other legal means that were previously uncertain in the unregulated distribution system.[14] Another important aspect of the law is its impact on the stability of marriage. The fear of immediate and unauthorized divorce has often led to uncertainty among Muslim women and discouraged them since promoting their rights in marriage. With the legal abolition of Triple Talaq, women now have more confidence in the stability of their marital relations, because they know that they cannot be discharged without a proper process. Legal shifts after harassment Indian judiciary also played a key role in strengthening the principles of equality and justice in divorce proceedings. Several judgments emphasized the importance of protecting the rights of Muslim women and decided that any divorce that does not meet the prescribed legal framework is invalid. In addition, the courts emphasized the need to observe the fundamental rights guaranteed under the Constitution, in particular Articles 14, 15 and 21, which provide equality of women and men and protection against discrimination. The legislative shift also set a precedent for wider reforms in personal laws. The abolition of Triple Talaq has triggered a discussion on the need for the United Civil Code (UCC) to ensure consistency in marital and divorce laws across all religions in India.[15] While the debate on personal law reform continues, the abolition of Triple Talaq was a decisive step towards legal uniformity and gender justice. However, the enforcement of the law remains a challenge. Despite a significant decrease in Triple Talaq cases, reports that in some regions there are still cases of verbal and electronic Talaq. In order to resolve these concerns, campaigns and programs for awareness of legal awareness must be strengthened and ensure that women and men understand the legal consequences of the New Testament. In addition, the mechanisms for rapid delivery of justice, such as rapid courts, can further increase the effectiveness of the law and provide early relief to affected women. Overall, the abolition of Triple Talaq in India has created a transformative legal precedent, strengthened the principles of justice, equality and a proper process in the laws of Muslim marriage and divorce. By criminalizing this practice and introducing legal guarantees, not only confirmed the constitutional rights of Muslim women, but also prepared a way for future legal reforms aimed at achieving gender justice in the country.

CRIMINALIZATION v. CIVIL REMEDY

The legal and social consequences of the abolition of triple Talaq in India have caused the ongoing debate on the best approach to ensuring justice for Muslim women. The practice that allowed her husband to divorce with his wife by expressing “Talaq” three times at one sitting, was declared unconstitutional by the Supreme Court in 2017.[16] While criminalization serves as a deterrent, civil remedies offer a structured legal process to support affected women. A balanced approach is necessary to solve justice and practical consequences in the cases of triple talaq.

The criminalization approach was introduced through the Muslim Women Act (Protection of Rights to Marriage) of 2019, which criminalizes the immediate triple Talaq, which makes it a recognizable crime that can be punished by imprisonment up to three years.[17] Legal Scholars argue that criminalization serves as a necessity discouraging means against the arbitrary and unilateral nature of the triple Talaq, which disproportionately affects women by leaving them by abandoning without legal procedure. By limiting the problem as criminal matters, the state claims its role in the protection of women’s rights and compliance with the constitutional values of equality and justice. This approach is in accordance with the constitutional principles of gender justice and equality and strengthens the idea that no religious practice should violate the fundamental rights of a woman. Critics, however, claim that the treatment of marital dispute as a crime creates unintended problems for women than authorization. If the husband is imprisoned for pronouncing Triple Talaq, the wife may suffer from financial uncertainty, especially if it depends on economic support. Criminal proceedings could also create a social stigma, making it more difficult to reconcile and keep women limited for alternative dispute. Furthermore, personal laws governing marriage and divorces in India have been traditionally civil in nature therefore it has raised concerns that criminalizing triple talaq sets a problematic precedent by introducing punitive measures into personal law matters.[18]

On the contrary, the approach of civil remedy emphasizes legal frameworks that provide women for compensation rather than repressive measures to their spouses. Civil advocates claim that there would be an emphasis on ensuring that women have access to management, financial maintenance and the rights to care for children. This perspective is in accordance with the wider principles of family law that prefers the well -being of the family unit and fair treatment of all parties involved. Civic remedies also provide greater flexibility by enabling financial compensation, protective orders and enforceable legal rights rather than criminal sanctions that can further stigmatize divorced women. The Supreme Court, in Danial Latifi v. Union of India,[19] confirmed the right of Muslim women to seek maintenance in accordance to Section 144 BNSS[20] and strengthened the importance of civil remedies in the resolution of marital disputes. Critics of criminalization argue that strengthening civil remedies, such as improving access to family courts, legal assistance and mechanisms for solving alternative disputes, would better serve the interests of women affected by Triple Talaq. The criminalization of practice of Triple Talaq has encountered the resistance of some Muslim organizations and claimed to violate religious freedoms and autonomy. However, the Supreme Court in Shayara Bano has ruled that the immediate Triple Talaq lacks religious sanctity and violates constitutional rights.

On the other hand, the approach of a civil axle can offer more reconciliation paths, respect religious traditions and at the same time support the equality of women and men and legal protection. The scholars suggested that the reform of Muslim marital law should ensure uniform divorce procedures, compulsory arbitration proceedings before divorce and financial guarantee for women would be more effective than criminal sanctions. The abolition of Triple Talaq was an important step towards gender justice and legal reform, but the method of implementation remains controversial. While criminalization acts as a discouraging means, it does not necessarily provide economic or social support to affected women. Access to the civic axle focusing on legal protection and financial assistance could be more efficiently authorized by women. The main focus should be on social justice, legal guarantees and institutional support and ensure that women are not stressed by the legal consequences of marital disputes.

SOCIAL IMPLICATIONS OF TRIPLE TALAQ ABOLITION

The practice of Triple Talaq, also referred to as Talaq-ul-biddat, carries profound social consequences for Muslim women, families, and communities in India and beyond. Its effects reach far beyond legal implications, influencing gender equality, family structures, social justice, and interpretations of religious doctrine. The prohibition of Triple Talaq in India has illuminated these issues and underscored the pressing need for reform.

Triple Talaq placed numerous Muslim women in precarious social situations, granting men unilateral authority in marital matters. Women could be divorced without any prior notice or justification, leaving them isolated and without support. Moreover, the abolition of Triple Talaq has empowered women by introducing legal frameworks to contest arbitrary divorces. Women who once felt powerless against this practice can now pursue maintenance and child custody under the Muslim Women (Protection of Rights on Marriage) Act of 2019. This legal protection has enabled women to seek justice and security, thereby enhancing their social standing and dignity. Additionally, the elimination of Triple Talaq has bolstered the principle of gender equality within Indian society. Women are now better equipped to confront patriarchal norms within marriages and assert their rights within the family. This shift is vital for fostering women’s autonomy and their involvement in decision-making processes within both family and community settings.

Divorced women in Indian society, particularly in conservative Muslim communities, have historically encountered considerable social stigma. The practice of Triple Talaq intensified this stigma, leaving many women without social or economic support. Those who were divorced, especially without financial or emotional backing, often faced isolation and, in some instances, ostracism from their families and communities. Many women affected by Triple Talaq found themselves without a source of income or financial security, particularly if they were responsible for children. The prohibition of Triple Talaq and the maintenance provisions under the 2019 Act have been crucial in alleviating these economic difficulties, enabling women to seek financial support post-divorce. Henceforth, the introduction of new legal protections has begun to mitigate the economic vulnerability faced by women who were previously subject to arbitrary divorces. They now have the legal authority to demand compensation, alimony, and child support, which has enhanced the financial independence of many divorced women.[21]

LEGAL POSITION IN COUNTRIES THAT HAVE ABOLISHED TRIPLE TALAQ

The abolition of Triple Talaq was a significant legal reform in many countries with a substantial Muslim population. Before the abolition of Triple talaq in India, many countries had already banned this practice. Nations with majority Muslim populations such as Pakistan, Bangladesh, Egypt, Indonesia and Turkey had either reformed or completely banned the practice of Triple Talaq long before India through its landmark judgement in Shayara Bano case declared it unconstitutional. The Parliament then enacted The Muslim Women (Protection of Rights on Marriage) Act, 2019 which criminalized the practice of Triple Talaq and also further provided legal recourse to Muslim women, including maintenance and custody rights. It is to be noticed that India had banned this practice through court intervention and legal regulations, but other countries have adopted different approaches.

Moreover, Pakistan regulated Triple Talaq according to the Muslim Family Laws Ordinance, 1961. Under this, the husband is ordered to must notify the local arbitration council about his intention to divorce and the wife must be informed ensuring a reconciliation period before the divorce takes effect.[22] This procedural safeguard ensures a period of reconciliation which prevents impulsive pronouncement.[23]

In contrast, Egypt reformed its divorce laws as early as 1929, making Triple Talaq ineffective unless pronounced on three separate occasions with intervening periods of reconciliation.[24] This approach aligns with Islamic jurisprudence, which discourages instant divorce and encourages mutual resolution. Other Middle Eastern countries, such as the United Arab Emirates and Jordan, have also incorporated judicial oversight, requiring a court to validate the divorce before it becomes legally binding.

Tunisia and Turkey have gone further by completely outlawing religious-based divorces. In Tunisia, all divorces must be sanctioned by a court under the Tunisian law, ensuring both parties have legal protection.[25] Turkey operating in a secular legal framework, does not recognize religious divorces and requires all the marital dissolution to go through the Civil Courts.[26]

RECOMMENDATIONS & SUGGESTIONS

After a critical analysis of the existing social and legal scenario of India, it can be said that the

law against Triple Talaq is certainly a very welcome step but in addition to that there is a need

for continued engagement and awareness to ensure the effective implementation and protection of women’s rights in the context of Triple Talaq in India.

Addressing Cultural Sensitivities: Engaging with various stakeholders, including religious leaders, community organizations, and scholars, allows for a better understanding of cultural sensitivities and religious perspectives. This engagement helps bridge the gap between legal reforms and societal acceptance, ensuring that women’s rights are respected while also respecting cultural diversity.
Raising Awareness: Continued engagement and dialogue are essential for raising awareness about the rights of Muslim women and the legal provisions available to them. This includes educating women as well as their families and communities, about the negative impacts of Triple Talaq and the importance of gender equality and personal autonomy.
Ensuring Access to Justice: Engagement can help identify and address barriers that hinder access to justice for Muslim women. This includes addressing issues such as lack of legal aid, biases within the legal system, and social stigma. By involving relevant stakeholders, strategies can be developed to improve access to justice and ensure that women can effectively exercise their rights.
Addressing Concerns and Misconceptions: This provides an opportunity to address concerns and misconceptions towards the Triple Talaq law. By engaging with those who may oppose or have reservations about the law, it is possible to clarify misunderstandings, provide explanations about the intent of the legislation, and address any legitimate concerns that may exist.
Monitoring and Evaluation: Continued engagement and discourse are necessary to monitor the implementation of the law and evaluate its impact on Muslim women’s lives. This includes assessing the effectiveness of legal mechanisms, identifying gaps in support services, and addressing any challenges that may arise during the implementation process.
Policy Reforms: Active participation and engagement can also help in identifying areas where further policy reforms are needed to strengthen the protection of women’s rights.

CONCLUSION

In summary, the topic of Triple Talaq in India has garnered considerable attention across legal, social, and political spheres, showcasing notable changes that reflect the shifting landscape of personal laws and gender justice in the nation. The conversation surrounding Triple Talaq has included various aspects—historical, legal, constitutional, and societal—leading to both judicial rulings and legislative changes. A pivotal moment occurred in 2017 with the Shayara Bano case, when the Supreme Court ruled that the practice of instant Triple Talaq was unconstitutional, arbitrary, and in violation of fundamental rights. This ruling highlighted the necessity for personal laws to be consistent with constitutional values, particularly those relating to justice, equity, and gender equality. Following this judicial decision, the Indian Parliament enacted the Muslim Women (Protection of Rights on Marriage) Act in 2019, which criminalized the practice of instant Triple Talaq while recognizing its civil implications. Although this legislative action aimed to safeguard the rights of Muslim women, it also ignited discussions about the appropriateness of criminalizing a religious custom. The efforts to reform and the legal actions taken illustrate a careful attempt to balance respect for religious traditions with the safeguarding of fundamental rights, especially concerning gender equality and the right to dignity. Nonetheless, ongoing discussions emphasize the necessity for a nuanced comprehension of the complexities tied to personal laws in a diverse society. The trajectory of Triple Talaq in India reflects broader challenges and possibilities in the realm of legal reform, religious customs, and gender justice within the constitutional framework. As the nation addresses these intricate issues, it is vital to encourage inclusive conversations, raise awareness, and persist in efforts to find a balance between religious liberties and the safeguarding of individual rights, ultimately fostering a society that upholds equality and justice for all its members. As the country navigates these complex issues, it remains crucial to foster inclusive dialogues, promote awareness, and continue efforts to strike a balance between religious freedoms and the protection of individual rights, fostering a society that values equality and justice for all its citizens.

BIBLIOGRAPHY

Books –

Flavia Agnes, Muslim Women’s Rights and Triple Talaq: Interrogating the Legal System, Oxford University Press, 2019
Dinshaw Fardunji Mulla, Principles of Mohammedan Law. 22^nd, Lexis Nexis, 2017
K. Agarwal, Muslim Law in Modern India. Oxford University Press, 2019
Shams Pirzada, Triple Talaq in the Light of Quran and Sunnah, tr. Sultan Akhtar, Idara Dawat ul Quran, 1996

Articles –

Prateek Kushwaha, “The Journey of Triple Talaq in India,” International Journal of Law, Vol.4, Issue 2, March 2018, pp. 98-102
Nayum Husain and Dr. Rinu Saraswat, “Historic and Legal Developments of Triple Talaq”, International Journal of Food and Nutritional Sciences, Vol. 11, Issue 11A, 2022
Ritu Raghuvanshi, “Triple Talaq in India: An Analysis of Legal Framework and Judicial Precedents,” Research Communications, Vol. 2, Issue 1, Jan-June 2024, pp. 81-89
Ekta Tomar, “A Case Study on Triple Talaq and Status of Women in India,” ShodhKosh: Journal of Visual and Performing Arts, Vol. 4, Issue 1, 2023, pp. 1101-1108
Akanksha Kumari, “Legal Article on Triple Talaq,” Law Foyer, 2025

Websites-

Ministry of Law and Justice, Government of India, “The Muslim Women (Protection of Rights on Marriage) Act, 2019,”
Indian Kanoon, “Shayara Bano v. Union of India (2017)”.
Law Foyer, “Legal Article on Triple Talaq,”.
Legal Service India, “Triple Talaq: An Analysis of Muslim Personal Law,”.
Manupatra, “Judicial Precedents on Triple Talaq”.

[1] David Pearl & Werner Menski, Muslim Family Law 281 (3^rd edn. 1998)

[2] Aqil Ahmad, Mohammedan Law, p.171 (Central Law Agency, 2008)

[3] Aqil Ahmad, Mohammedan Law, p.174-175 (Central Law Agency, 2008)

[4] Mohammad Iqbal, The Hanafi School: A Historical and Legal Review (Harvard Law Review, 2018)

[5] Shayara Bano v. Union of India, (2017) 9 SCC 1

[6] Article 25 of the Indian Constitution guarantees the fundamental right to freedom of religion, allowing individuals to profess, practice and propagate their chosen faith. This right is subject to reasonable restrictions in the interest of public order, morality and health ensuring these religious practices do not disrupt societal harmony.

[7] Triple Talaq Ban: 5 Years after SC Verdict, Fewer Cases, ‘New Problems’, The Federal, August 22, 2022

[8] Section 3 of Muslim Women (Protection and Rights on Marriage) Act, 2019

[9] Section 4 of Muslim Women (Protection and Rights on Marriage) Act, 2019

[10] Section 5 of Muslim Women (Protection and Rights on Marriage) Act, 2019

[11] Section 6 of Muslim Women (Protection and Rights on Marriage) Act, 2019

[12] Press Information Bureau, PIB e-Booklet on The Muslim Women (Protection of Rights on Marriage) Act, 2019, Government of India, 2021

[13] Mohammed Ahmed Khan v. Shah Bano Begum, (1985) 2 SCC 556

[14] Flavia Agnes, Muslim Women’s Rights and Legal Reforms in India, 47(43) Economic and Political Weekly 118-126 (2012)

[15] Law Commission of India, Report No. 277: Consultation Paper on Reform of Family Law (2018)

[16] Shayara Bano v. Union of India,(2017) 9 SCC 1

[17] Section 3 of Muslim Women (Protection and Rights on Marriage) Act, 2019

[18] Flavia Agnes, Law and Gender Equality: A feminist Perspective 210, 3^rd edn., 2018

[19] Danial Latifi v. Union of India, (2001) 7 SCC 740

[20] A dependent (wife, child, or parent) who is unable to maintain themselves can file an application before a Magistrate of the first class, alleging neglect or refusal by the person responsible for their maintenance.

[21] Akanksha Kumari, Triple Talaq, Law foyer, February 27, 2025

[22] Muslim Family Laws Ordinance, 1961 (Pakistan)

[23] Mohammed Serajuddin, Sharia Law and Society: Tradition and Change in South Asia (Oxford University Press, 2017)

[24] Laws No. 25 of 1929 (Egypt)

[25] Tunisian Personal Status Code, 1956

[26] Turkey Civil Code, 1926

The Rule of Law in the Algorithmic State: Constitutional Challenges of AI-Based Administrative Decision-Making in India

April 21, 2026

by Adv. Suraj Shandil with No Comment VOLUME 1 ,ISSUE 1.

Author: Ayushi Ojha, LL.B. ICFAI University Dehradun, LL.M. NLU Kochi, PG Diploma NLU Lucknow

Download Full Article (PDF)

Abstract

The integration of artificial intelligence (AI) into governance systems represents a profound transformation in the structure and functioning of modern administrative states. Algorithmic systems are increasingly being deployed in critical areas such as welfare delivery, taxation, policing, immigration control, and regulatory decision-making. While these technologies promise efficiency, speed, and data-driven precision, they simultaneously raise significant constitutional concerns relating to transparency, accountability, fairness, and due process.

This paper examines the rise of algorithmic governance through the normative framework of the Rule of Law, arguing that the opacity and complexity of AI-driven decision-making systems pose a direct challenge to foundational constitutional principles under Articles 14, 19, and 21 of the Constitution of India. It highlights how automated and data-driven processes may result in arbitrariness, exclusion errors, and a lack of intelligible reasoning, thereby weakening procedural safeguards that traditionally govern administrative action.

The paper further critically analyses the limitations of India’s existing legal framework, particularly the Digital Personal Data Protection Act, 2023, in addressing issues of algorithmic accountability, explainability, and state responsibility. In doing so, it identifies a significant regulatory gap in the governance of automated public decision-making systems.

Drawing comparative insights from the European Union’s Artificial Intelligence Act, United States administrative law jurisprudence, and OECD ethical principles on artificial intelligence, the paper argues for the development of a structured and rights-based regulatory framework. Such a framework must incorporate algorithmic transparency, independent audit mechanisms, enforceable accountability standards, and mandatory human oversight in high-impact decision-making processes.

The paper concludes that while AI has the potential to significantly enhance administrative efficiency and governance capacity, its deployment must remain firmly within constitutional limits. Without adequate safeguards, there is a risk of the emergence of an opaque and unaccountable “black box” governance system that undermines the core values of constitutional democracy and the Rule of Law.

Keywords: Algorithmic Governance, Rule of Law, Artificial Intelligence Regulation, Constitutional Law in India, Administrative Accountability, Digital Governance

1. Introduction

The increasing deployment of AI in governance marks a structural transformation in the nature of the modern administrative state. Traditionally, public administration in constitutional democracies has been premised on human agency, where officials exercise discretion within a framework of statutory authority, constitutional limitations, and principles of natural justice. This structure ensures accountability, reasoned decision-making, and effective judicial review.

However, with the rise of algorithmic governance, decision-making is increasingly mediated through computational systems, including machine learning models, predictive analytics tools, and automated classification systems. These systems are now deployed in welfare administration, taxation, policing, immigration control, surveillance mechanisms, and regulatory enforcement.

In India, the integration of digital governance systems such as Aadhaar-based authentication, DBT, GSTN, FASTag systems, and emerging facial recognition technologies demonstrates a significant shift towards data-driven governance. While these systems are often justified on grounds of efficiency, transparency, and reduction of corruption, they simultaneously raise critical constitutional concerns regarding accountability, arbitrariness, and procedural fairness.

The central constitutional issue is whether decisions that directly affect fundamental rights can be delegated to systems that are incapable of providing intelligible reasons for their outcomes. This question lies at the intersection of administrative law and constitutional theory, particularly under Articles 14, 19, and 21 of the Constitution of India.

This paper argues that algorithmic governance must be understood not merely as a technological development but as a constitutional phenomenon requiring doctrinal regulation under the Rule of Law.

Conceptual Foundations of Algorithmic Governance

Algorithmic governance refers to the use of computational systems to assist or replace human decision-making in administrative processes. These systems operate through statistical inference rather than normative legal reasoning, relying on datasets to identify patterns and generate predictions.

Unlike traditional governance systems based on legal interpretation and human discretion, algorithmic systems function through probabilistic modelling. This marks a shift from normative reasoning to data-driven computation, fundamentally altering the epistemology of administrative decision-making.

Frank Pasquale describes this transformation as the emergence of a black box society, where decisions affecting individuals are generated through opaque systems that resist meaningful scrutiny.^[1] Lawrence Lessig’s proposition that “code is law” further highlights how software architecture increasingly determines regulatory outcomes.^[2] It means software and computer code regulate people’s behaviour just like legal rules do in the real world.

Algorithmic governance therefore represents not simply administrative reform, but a redistribution of decision-making authority from human actors to computational systems.

Rule of Law in the Algorithmic State

The Rule of Law is a foundational principle of constitutional governance. A.V. Dicey’s classical formulation emphasises the supremacy of law, equality before law, and the absence of arbitrary power.^[3] However, modern constitutional thought, particularly Joseph Raz’s theory, expands the concept to include requirements of clarity, accessibility, and predictability of law.^[4] Algorithmic governance challenges each of these dimensions.

3.1 Legality and Delegation of Power

In administrative law, delegation of power must be accompanied by clear statutory guidance. In Ajoy Kumar Banerjee v Union of India, the Supreme Court held that essential legislative functions cannot be delegated without adequate safeguards.^[5] Algorithmic systems, however, often exercise quasi-decisional authority without explicit statutory frameworks governing their operation.

3.2 Transparency and Reasoned Decision-Making

A key requirement of administrative law is that decisions must be reasoned. In S.N. Mukherjee v Union of India, the Supreme Court held that recording reasons is an essential component of fairness and judicial review.^[6] Algorithmic systems challenge this requirement because their outputs are often not explainable in human terms, particularly in machine learning models.

3.3 Equality and Non-Arbitrariness

Article 14 has been interpreted to prohibit arbitrariness in state action. In E.P. Royappa v State of Tamil Nadu, the Court held that arbitrariness is antithetical to equality.^[7] Algorithmic systems, however, may produce discriminatory outcomes due to biased datasets, even in the absence of intentional discrimination.

Article 21: Due Process, Privacy, and Algorithmic Governance

Article 21 of the Constitution of India guarantees that no person shall be deprived of life or personal liberty except according to procedure established by law. Over time, judicial interpretation has transformed this provision into the most expansive guarantee of substantive due process within Indian constitutional law.

In Maneka Gandhi v Union of India, the Supreme Court held that the procedure under Article 21 must be “just, fair and reasonable” and not arbitrary or oppressive.^[8] This judgment fundamentally redefined procedural fairness in Indian constitutional jurisprudence and remains central to evaluating state action in modern administrative systems.

With the rise of algorithmic governance, the scope of Article 21 has expanded further into domains involving digital identity, automated decision-making, and surveillance systems. The constitutional requirement of fairness is increasingly tested in situations where decisions are generated through opaque computational systems rather than human reasoning.

Privacy and the Constitutional Limits of Data-Driven Governance

The recognition of privacy as a fundamental right in Justice K S Puttaswamy v Union of India marked a watershed moment in Indian constitutional law. The Supreme Court held that privacy is intrinsic to life and personal liberty under Article 21 and is grounded in dignity, autonomy, and informational self-determination.^[9] The Court further emphasised that any intrusion into privacy must satisfy the tests of legality, necessity, and proportionality. This doctrine has significant implications for algorithmic governance, as such systems rely heavily on large-scale data collection, profiling, and behavioural analysis.

Algorithmic governance systems, by design, require continuous processing of personal data. This raises concerns regarding:

mass surveillance
behavioural profiling
lack of informed consent
secondary use of data beyond original purpose

These concerns are amplified when data is processed through automated systems that generate decisions affecting welfare eligibility, law enforcement profiling, or access to public services.

Aadhaar and Algorithmic Identity Infrastructure

The Aadhaar framework represents one of the most extensive biometric identification systems globally and forms the backbone of India’s digital governance infrastructure. In K S Puttaswamy v Union of India, the Supreme Court upheld the constitutional validity of the Aadhaar scheme while imposing specific limitations on its use, particularly in relation to private-sector linking and proportionality concerns.^[10]

The shift from documentary identity to biometric authentication alters the traditional relationship between citizen and state. Despite judicial safeguards, concerns persist regarding exclusion errors arising from biometric authentication failures. Individuals engaged in manual labour, elderly citizens, and persons with worn fingerprints often face authentication failures, resulting in denial of welfare entitlements.

Such exclusion is constitutionally significant because it directly impacts the right to life and dignity under Article 21. In Olga Tellis v Bombay Municipal Corporation, the Court recognised that the right to livelihood is an integral component of the right to life.^[11] Therefore, technological exclusion that deprives individuals of essential welfare benefits raises serious constitutional concerns.

In addition, Aadhaar operates as an example of what may be described as algorithmic identity infrastructure, where identity is not only verified but also continuously processed through automated systems across multiple platforms. This transforms identity into a dynamic, system-dependent construct rather than a purely legal or documentary status. Thus, while Aadhaar has strengthened administrative efficiency and reduced certain forms of fraud, it has simultaneously introduced new constitutional challenges relating to exclusion, data protection, and algorithmic dependence in governance systems.

Algorithmic Exclusion and Structural Harm

A key feature of algorithmic governance is that the harm it causes is usually systemic rather than personal. Unlike traditional administrative decisions, which can be linked to a specific officer or authority, algorithmic harm often comes from how the system is designed, the data it uses, and the way it processes information automatically.

This results in what may be described as structural constitutional harm, where:

there is no explicit decision-maker
reasons for exclusion are not disclosed
remedies are procedurally unclear
accountability is diffused across institutions and systems

Such harm is particularly evident in welfare delivery systems relying on Direct Benefit Transfer mechanisms, where data mismatches and authentication failures may lead to denial of entitlements without formal rejection orders.

Surveillance, Predictive Systems, and Article 21 Concerns

Algorithmic governance extends well beyond welfare administration and is increasingly embedded in domains such as law enforcement, criminal justice, and state surveillance. Advanced technologies including facial recognition systems, predictive policing tools, and automated risk-assessment models are now being deployed to identify individuals, detect patterns of behaviour, assess potential threats, and assist investigative decision-making by law enforcement agencies.

While these technologies are often justified on the grounds of efficiency and enhanced security, they raise significant constitutional and legal concerns. One major issue is the risk of false positives and false negatives, where individuals may be wrongly identified as suspects or high-risk persons due to algorithmic error. In addition, these systems often reflect embedded demographic bias, as they are trained on historical data that may already contain structural inequalities.

In Kharak Singh v State of Uttar Pradesh, the Supreme Court recognised that surveillance activities can infringe upon personal liberty and dignity.^[12] Modern algorithmic surveillance systems intensify these concerns due to their scale, automation, and continuous data processing capabilities.

The constitutional concern, therefore, is not confined merely to instances of direct rights violations but extends to the broader impact such systems have on civil liberties in practice. The pervasive presence of algorithmic surveillance can reshape the relationship between the individual and the State by normalising constant monitoring as a routine feature of governance. This may gradually alter behavioural patterns, as individuals begin to adjust their actions in anticipation of being observed or assessed by automated systems. In this sense, the impact of algorithmic surveillance lies not only in identifiable harm but also in its subtle influence on autonomy, privacy, and the overall exercise of constitutional freedoms within a democratic society.

Procedural Fairness and Automated Decision-Making

Procedural fairness under Indian administrative law requires notice, hearing, and reasoned decision-making. However, algorithmic systems challenge each of these requirements.

In automated systems:

notice may not be provided in meaningful form
hearings may not be effective without access to algorithmic logic
reasons may be non-intelligible or statistically framed

This creates a gap between formal procedural compliance and substantive fairness.

The absence of explainability in algorithmic decision-making therefore raises serious concerns under both Article 14 and Article 21.

10. India’s Legal and Regulatory Framework: A Fragmented Approach

Despite the rapid expansion of algorithmic governance in India, there is no dedicated, comprehensive statutory framework regulating the use of artificial intelligence in public administration. Instead, the regulatory landscape remains fragmented across general technology law, data protection legislation, and policy-level documents.

The Information Technology Act, 2000 primarily governs cyber activities, electronic records, and intermediary liability. However, it was enacted in a pre-AI era and does not address algorithmic decision-making, automated administrative action, or transparency obligations for computational systems used by the State.

Similarly, the Digital Personal Data Protection Act, 2023 regulates personal data processing but does not impose substantive obligations regarding explainability, algorithmic transparency, or accountability in automated decision-making systems. It focuses on consent and data processing principles but remains silent on how data-driven decisions affecting rights are generated and justified.

Policy-Based Governance and Its Limitations

India’s approach to artificial intelligence governance is largely policy-driven rather than rooted in binding legislation, reflecting an early-stage regulatory framework that prioritises innovation over enforceable legal safeguards. The NITI Aayog’s National Strategy for Artificial Intelligence serves as the primary guiding document in this area and promotes the adoption of AI across key sectors such as healthcare, agriculture, education, smart cities, infrastructure, and public governance. The strategy envisions AI as a tool for economic growth and social transformation, often describing it in terms of “inclusive growth” and “responsible innovation.”

However, While the strategy emphasises innovation, inclusivity, and economic growth, it does not establish enforceable rights, statutory safeguards, or institutional accountability mechanisms for algorithmic systems deployed by the State.^[13] It also fails to establish statutory safeguards addressing key concerns such as transparency in algorithmic decision-making, accountability for automated outcomes, or procedural protections for individuals affected by such systems. Furthermore, there is no dedicated institutional mechanism tasked with auditing, regulating, or independently reviewing algorithmic systems used by the State. The absence of enforceable standards results in a regulatory gap between technological deployment and constitutional accountability.

As a result, AI governance in India currently operates primarily through soft law instruments, including policy reports, ethical guidelines, and advisory frameworks. These instruments, while useful in shaping discourse and encouraging best practices, lack binding force, enforceability, and direct judicial oversight. Consequently, individuals affected by algorithmic decisions often have limited legal recourse, as courts can only indirectly engage with such systems through existing constitutional or administrative law principles.

This reliance on non-binding frameworks creates a significant regulatory gap, particularly in high-impact domains where algorithmic decisions may affect fundamental rights such as access to welfare benefits, privacy, and equality before law. It also raises broader concerns regarding institutional accountability, as responsibility for algorithmic outcomes remains diffused across policymakers, implementing agencies, and private technology providers.

Administrative Law and the Breakdown of Reasoned Decision-Making

A foundational principle of Indian administrative law is that state decisions affecting rights must be reasoned. In S N Mukherjee v Union of India, the Supreme Court held that recording reasons is an essential component of natural justice and enables effective judicial review.^[14]

Algorithmic systems, however, disrupt this principle because their outputs are often:

probabilistic rather than reasoned
generated through non-intelligible computational processes
dependent on machine learning models that do not produce human-readable justification

This creates a situation where administrative decisions are functionally binding but epistemically opaque.

The absence of intelligible reasoning undermines the ability of affected individuals to challenge decisions, thereby weakening judicial review under Articles 32 and 226 of the Constitution.

Accountability Vacuum and Responsibility Fragmentation

Algorithmic governance introduces a structural challenge to traditional accountability frameworks. In conventional administrative systems, responsibility can be traced to identifiable officials or departments. However, in algorithmic systems, decision-making is distributed across multiple actors, including:

government agencies deploying AI systems
private vendors designing algorithms
data scientists training machine learning models
automated systems generating outputs

This diffusion creates what scholars describe as a responsibility gap, where no single actor can be held fully accountable for outcomes produced by algorithmic systems.

From a constitutional perspective, this undermines the principle of accountability, which is essential to the Rule of Law.

Judicial Review in the Algorithmic Context

Judicial review under Articles 32 and 226 is a cornerstone of Indian constitutionalism. However, algorithmic governance creates new challenges for courts.

First, opacity in algorithmic systems limits the ability of courts to assess the reasoning behind decisions. Second, proprietary algorithms used by private vendors may restrict disclosure of system logic. Third, technical complexity may hinder meaningful judicial scrutiny.

As a result, judicial review risks being reduced to procedural review rather than substantive examination of decision-making logic.

This raises a serious constitutional concern that whether traditional judicial mechanisms are sufficient to regulate algorithmic administrative action.

Comparative Context: Emerging Global Regulatory Responses

Globally, jurisdictions are beginning to address algorithmic governance through structured regulatory frameworks. The European Union Artificial Intelligence Act represents the most comprehensive attempt to regulate AI systems through a risk-based approach. The EU framework classifies AI systems into different risk categories and imposes stricter obligations on high-risk systems, including transparency requirements, human oversight, and conformity assessments.^[15]

International organisations such as the OECD and UNESCO have also developed ethical frameworks emphasising transparency, accountability, fairness, and human-centred AI governance.^[16] These frameworks, although non-binding, reflect an emerging global consensus that algorithmic systems must be governed by rights-based principles.

15.1 European Union: The Artificial Intelligence Act and Risk-Based Regulation

The European Union Artificial Intelligence Act (EU AI Act) represents the most developed and comprehensive attempt to regulate artificial intelligence through a binding legislative framework. It adopts a risk-based regulatory model, distinguishing AI systems according to the level of risk they pose to fundamental rights and public safety.

Under this framework, AI systems are classified into four categories: unacceptable risk, high-risk, limited risk, and minimal risk. High-risk systems include those used in areas such as employment, credit scoring, biometric identification, law enforcement, and public administration.

High-risk systems are subject to stringent regulatory obligations, including:

mandatory risk assessments prior to deployment
transparency and documentation requirements
human oversight obligations
conformity assessments and post-market monitoring

The significance of the EU approach lies in its preventive orientation. Instead of addressing harm after it occurs, the framework regulates AI systems ex ante, thereby embedding accountability into system design itself.^[17]

This model is particularly relevant for India, where algorithmic systems are often deployed without prior impact assessment or statutory safeguards.

United States: Algorithmic Decision-Making and Due Process Concerns

In the United States, AI regulation is less centralised, but constitutional litigation has raised important concerns regarding algorithmic decision-making, particularly in criminal justice contexts.

One of the most discussed cases is State v Loomis, where the Wisconsin Supreme Court upheld the use of a proprietary risk assessment algorithm in sentencing decisions. The Court acknowledged concerns regarding transparency and due process, but ultimately allowed its use, noting that it was one factor among many in sentencing.^[18] However, this case also highlighted a critical constitutional tension: the inability of defendants to meaningfully challenge algorithmic reasoning due to proprietary protection of the software.

In addition, the US Supreme Court in Mathews v Eldridge established a balancing test for procedural due process, weighing private interests, risk of erroneous deprivation, and governmental interest.^[19] This framework is particularly relevant for algorithmic governance systems, where the risk of erroneous deprivation increases due to automated classification and predictive modelling.

Similarly, in Carpenter v United States, the Court recognised that digital surveillance and data aggregation raise serious Fourth Amendment concerns, reinforcing the idea that technological systems can significantly expand state power over individuals.^[20]

This raises serious due process concerns under the Fourteenth Amendment, particularly where algorithmic tools influence liberty-depriving decisions without full disclosure of their functioning.

The broader US debate reflects a growing concern that algorithmic governance may create “due process opacity,” where individuals are subject to decisions they cannot effectively contest.

Algorithmic Bias and Discrimination in Computational Systems

A central concern in algorithmic governance is the risk of embedded bias within computational systems. Unlike traditional forms of discrimination, which are often intentional, visible, or attributable to specific decision-makers, algorithmic bias tends to be structural in nature. It arises not from deliberate exclusion but from the way data is collected, the assumptions embedded in system design, and the modelling choices made during algorithm development.

Such bias may enter algorithmic systems in multiple ways. It can originate from historical datasets that already reflect existing social and economic inequalities, thereby reproducing past discrimination in present decision-making. It may also arise through the use of proxy variables that indirectly capture protected characteristics such as caste, gender, or race. In many cases, underrepresentation of certain groups in training data further skews outcomes, making the system less accurate or fair for those populations. Additionally, optimisation goals that prioritise efficiency, speed, or cost reduction over fairness can unintentionally reinforce unequal treatment across different groups.

This leads to what scholars describe as “disparate impact,” where algorithmic systems produce unequal or adverse outcomes for certain groups even in the absence of explicit discriminatory intent. From a constitutional perspective, this raises concerns under equality doctrines, particularly where state-deployed systems disproportionately affect marginalised or vulnerable communities.

Algorithmic discrimination becomes especially significant in high-impact domains such as predictive policing systems, welfare eligibility determination, employment screening, and credit scoring mechanisms. In these contexts, automated decisions can directly influence access to liberty, livelihood, and essential public services. As a result, such systems risk reinforcing and amplifying existing structural inequalities while simultaneously presenting themselves as neutral, objective, and data-driven.

Theoretical Foundations: Code, Power, and Governance

The rise of algorithmic governance has been extensively analysed in legal theory. Lawrence Lessig’s proposition that “code is law” remains central to understanding how digital architecture regulates behaviour in modern societies.^[21] In this framework, software design becomes a form of regulatory power, shaping outcomes in ways that resemble legal norms but operate outside traditional democratic oversight.

Similarly, Frank Pasquale’s concept of non-transparent computational decision-making structures highlights how algorithmic systems concentrate informational and decisional power in opaque institutional structures, making meaningful accountability difficult.^[22]

These theories collectively suggest that algorithmic governance represents a shift from law as text to law as system architecture.

Towards a Doctrinal Synthesis: Rule of Law in the Algorithmic State

The Rule of Law, in its classical formulation, requires that state power be exercised through transparent, predictable, and reviewable processes. However, algorithmic governance introduces a structural transformation where decision-making is:

automated rather than discretionary
opaque rather than reasoned
distributed rather than centralised

This challenges traditional legal doctrines in three key ways: First, legality becomes difficult to assess when decision-making is embedded within computational systems rather than explicit administrative orders. Second, accountability becomes fragmented across institutions, reducing the ability to assign responsibility. Third, reviewability becomes constrained due to the technical opacity of algorithmic systems.

Despite these challenges, constitutional principles remain adaptable. The Rule of Law must evolve to include not only legal rules but also computational governance structures that determine how those rules are applied.

20. Constitutional Synthesis: Articles 14, 19 and 21 in the Algorithmic State

The constitutional impact of algorithmic governance in India must ultimately be assessed through the triad of Articles 14, 19, and 21, which collectively form the golden triangle of fundamental rights.

Article 14, through judicial interpretation, prohibits arbitrariness in state action. In E.P. Royappa v State of Tamil Nadu, the Supreme Court held that arbitrariness is antithetical to equality.^[23] Algorithmic systems, however, introduce a form of structural arbitrariness, where unequal outcomes arise not from intentional discrimination but from data-driven design, proxy variables, and historical bias embedded within datasets.

Article 21, as interpreted in Maneka Gandhi v Union of India, requires that any deprivation of life or liberty must follow a procedure that is just, fair, and reasonable.² In algorithmic systems, procedural fairness is compromised where decisions are automated, non-transparent, and not accompanied by intelligible reasoning.

Further, the right to privacy recognised in Justice K.S. Puttaswamy v Union of India reinforces that dignity, autonomy, and informational control are central to constitutional governance.^[24] Algorithmic systems that rely on large-scale data processing must therefore satisfy constitutional standards of legality, necessity, and proportionality.

Article 19, particularly freedoms of speech, movement, and association, is also implicated through algorithmic surveillance systems that create behavioural monitoring environments, resulting in a chilling effect on constitutional freedoms.

Structural Harm and the Transformation of Constitutional Injury

Traditional constitutional violations are typically identifiable, attributable, and reversible through judicial remedies. Algorithmic governance, however, produces structural harm, which is:

distributed across systems rather than individuals
embedded in data architecture rather than discrete decisions
continuous rather than episodic
difficult to attribute to a single decision-maker

This transformation challenges the remedial structure of constitutional law, particularly under Articles 32 and 226, which depend on identifiable state action.

In algorithmic governance, harm often manifests as exclusion, denial of services, or surveillance without formal administrative orders, thereby complicating judicial intervention.

Toward a Rights-Based Framework for Algorithmic Governance

A constitutionally compliant framework for algorithmic governance must be grounded in enforceable legal safeguards rather than relying solely on policy guidance or ethical principles. This is because digital systems increasingly perform regulatory functions that directly influence rights and entitlements, effectively shaping behaviour in a manner similar to formal law. In this context, Lawrence Lessig’s proposition that “code is law” becomes particularly relevant, as it highlights how software architecture and system design can regulate conduct without the visibility or procedural safeguards associated with traditional legal norms. Similarly, Frank Pasquale’s concept of the black box society draws attention to closed algorithmic architectures, where decision-making processes are often inaccessible, unexplainable, and difficult to scrutinise, thereby weakening institutional accountability.

These theoretical perspectives collectively underscore the necessity of embedding robust safeguards within any regulatory framework governing algorithmic systems. Such safeguards should include a legally recognised right to explanation for individuals affected by automated decisions, ensuring that outcomes are intelligible and capable of being meaningfully challenged. In addition, algorithmic transparency is essential to ensure that the logic, scope, and impact of such systems are not entirely concealed from public and judicial scrutiny. This must be complemented by meaningful human oversight in high-impact decision-making processes to prevent complete delegation of authority to automated systems. Finally, independent audit mechanisms are required to periodically assess the fairness, reliability, and constitutional compliance of algorithmic tools deployed in governance.

Moreover, Comparative frameworks such as the European Union’s Artificial Intelligence Act demonstrate the importance of structured regulatory oversight, particularly for high-risk systems.^[25] International standards developed by organisations such as the OECD and UNESCO further emphasise transparency, fairness, and accountability in AI governance.^[26]

India must adopt a similar institutional approach to ensure constitutional compliance.

Balancing Innovation with Constitutionalism

The regulation of algorithmic governance must strike a balance between innovation and accountability. While technological development is essential, it must operate within constitutional limits.

Unchecked algorithmic systems risk undermining fundamental rights, whereas well-regulated systems can enhance governance without compromising legality.

CONCLUSION

Algorithmic governance marks a major shift in the functioning of the modern administrative state by replacing human decision-making with automated, data-driven systems. While this improves efficiency and speed in governance, it also raises serious constitutional concerns relating to transparency, accountability, and fairness.

This paper has shown that the increasing use of artificial intelligence in governance challenges the Rule of Law, particularly under Articles 14, 19, and 21 of the Constitution of India. The opacity of algorithmic systems often makes it difficult to understand how decisions are made or to effectively challenge them, leading to risks of arbitrariness and exclusion.

Despite its potential benefits, India’s current legal framework remains inadequate to address the complexities of AI-driven governance. Comparative developments in jurisdictions such as the European Union and the United States highlight the need for stronger safeguards, including transparency requirements, human oversight, and accountability mechanisms.

The paper therefore argues for a structured regulatory approach that includes algorithmic transparency, independent audits, and meaningful human intervention in high-impact decisions. These safeguards are essential to ensure that technological advancement does not undermine constitutional values.

Ultimately, while AI can enhance governance efficiency, it must remain firmly within constitutional limits to preserve fairness, accountability, and the Rule of Law in a digital state.

LIST OF ABBREVIATIONS

AI – Artificial Intelligence
AIA – Algorithmic Impact Assessment
AIA Act – Artificial Intelligence Act (European Union)
Aadhar Act- Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016
– Article (of the Constitution of India)
API – Application Programming Interface
DBT – Direct Benefit Transfer
EU – European Union
GSTN – Goods and Services Tax Network
HITL – Human-in-the-Loop
IT Act – Information Technology Act, 2000
OECD – Organisation for Economic Co-operation and Development
SC – Supreme Court of India
UNESCO – United Nations Educational, Scientific and Cultural Organization
UK – United Kingdom
US – United States

TABLE OF CASES

India

Ajoy Kumar Banerjee v Union of India (1984) 3 SCC 127
E P Royappa v State of Tamil Nadu (1974) 4 SCC 3
Justice K S Puttaswamy v Union of India (2017) 10 SCC 1
K S Puttaswamy (Aadhaar) v Union of India (2019) 1 SCC 1
Kharak Singh v State of Uttar Pradesh AIR 1963 SC 1295
Maneka Gandhi v Union of India (1978) 1 SCC 248
Olga Tellis v Bombay Municipal Corporation (1985) 3 SCC 545
S N Mukherjee v Union of India (1990) 4 SCC 594

United States

State v Loomis 881 NW 2d 749 (Wis 2016)
Mathews v Eldridge 424 US 319 (1976)
Carpenter v United States 585 US (2018)

TABLE OF STATUTES / LEGISLATION

Constitution of India 1950
Information Technology Act 2000
Digital Personal Data Protection Act 2023
Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act 2016
European Union Artificial Intelligence Act (Draft Proposal) COM/2021/206 final

INTERNATIONAL INSTRUMENTS / POLICIES

OECD Principles on Artificial Intelligence (2019)

UNESCO Recommendation

^[1] Frank Pasquale, The Black Box Society: The Secret Algorithms That Control Money and Information (Harvard University Press 2015).

^[2] Lawrence Lessig, Code and Other Laws of Cyberspace (Basic Books 1999).

^[3] AV Dicey, Introduction to the Study of the Law of the Constitution (10th edn, Macmillan 1959).

^[4] Joseph Raz, ‘The Rule of Law and Its Virtue’ (1977) 93 Law Quarterly Review 195.

^[5] Ajoy Kumar Banerjee v Union of India (1984) 3 SCC 127.

^[6] S N Mukherjee v Union of India (1990) 4 SCC 594.

^[7] E P Royappa v State of Tamil Nadu (1974) 4 SCC 3.

^[8] Maneka Gandhi v Union of India (1978) 1 SCC 248.

^[9] Justice KS Puttaswamy v Union of India (2017) 10 SCC 1.

^[10] K S Puttaswamy (Aadhaar) v Union of India (2019) 1 SCC 1.

^[11] Olga Tellis v Bombay Municipal Corporation (1985) 3 SCC 545.

^[12] Kharak Singh v State of Uttar Pradesh AIR 1963 SC 1295.

^[13] NITI Aayog, National Strategy for Artificial Intelligence (Government of India 2018).

^[14] S N Mukherjee v Union of India (1990) 4 SCC 594.

^[15] European Commission, Proposal for a Regulation laying down harmonised rules on artificial intelligence (Artificial Intelligence Act) COM/2021/206 final.

^[16] OECD, OECD Principles on Artificial Intelligence (OECD 2019); UNESCO, Recommendation on the Ethics of Artificial Intelligence (2021).

^[17] European Commission, Proposal for a Regulation laying down harmonised rules on artificial intelligence (Artificial Intelligence Act) COM/2021/206 final.

^[18] State v Loomis 881 NW 2d 749 (Wis 2016).

^[19]Mathews v Eldridge 424 US 319 (1976).

^[20]Carpenter v United States 585 US (2018).

^[21] Lawrence Lessig, Code and Other Laws of Cyberspace (Basic Books 1999).

^[22] Frank Pasquale, The Black Box Society: The Secret Algorithms That Control Money and Information (Harvard University Press 2015).

^[23] E P Royappa v State of Tamil Nadu (1974) 4 SCC 3.

^[24] Justice KS Puttaswamy v Union of India (2017) 10 SCC 1.

^[25] European Commission, Artificial Intelligence Act Proposal COM/2021/206 final.

^[26] OECD (2019); UNESCO (2021) AI ethics frameworks.

Minority Shareholder Protection in Reverse Mergers and Cross-Border Reverse Flips: A Critical Analysis under the Companies Act, 2013

JOINT JURIST

TRIPLE TALAQ: POST-ABLOTION LEGAL AND SOCIAL IMPLICATIONS

JOINT JURIST

The Rule of Law in the Algorithmic State: Constitutional Challenges of AI-Based Administrative Decision-Making in India

Author: Ayushi Ojha, LL.B. ICFAI University Dehradun, LL.M. NLU Kochi, PG Diploma NLU Lucknow

UNESCO Recommendation

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