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ENERGY PROJECTS AND ENVIRONMENTAL IMPACT ASSESSMENT(EIA)

by with No Comment VOLUME 1 ,ISSUE 1.
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AUTHOR: GARIMA SHREE | STUDENT (5TH YEAR), KIIT SCHOOL OF LAW, BHUBANESWAR

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INTRODUCTION:

Energy production is an indispensable aspect to economic development, industrial expansion, technological advancement, and the improvement of living standards. However, the construction and operation of energy projects frequently have significant negative effects on the environment, such as habitat loss, air and water pollution, deforestation, ecological imbalance, and local community relocation. Modern legal and regulatory systems have the task of not only facilitating growth but also ensuring that it stays within ecologically acceptable bounds as energy needs continue to rise. In this regard, the Environmental Impact Assessment (EIA) has become an important regulatory tool for analyzing the potential environmental effects of proposed projects prior to approval.

The scope, intricacy, and long-term consequences of energy projects has made EIA even more crucial. Thermal power plants, hydropower projects, mining-related energy infrastructure, and renewable energy installations all pose unique environmental concerns that need to be carefully identified and assessed. With a focus on its role as a tool for striking a balance between developmental goals and environmental protection, sustainability, and responsible decision-making, this article explores the role of EIA in the governance of energy projects.

Keywords: Environmental Impact Assessment (EIA), Energy Projects, Sustainable Development, Public Participation, Environmental Governance, Renewable Energy, Ecological Risk, Regulatory Compliance.

REVIEW OF LITERATURE:

 It was examined that the quality of environmental management programmes contained in Indian EIA reports and finds that these programmes are often weak in terms of monitoring, compliance, and implementation. The study is significant because it shows that the effectiveness of Environmental Impact Assessment cannot be evaluated only at the stage of environmental clearance. Rather, the real strength of the EIA process also depends on the quality of post-clearance environmental management and follow-up mechanisms. This contribution is particularly relevant to energy projects, where environmental impacts are often long-term and require continuous monitoring and regulatory oversight (Rathi, 2019).

The Indian EIA framework in the context of developmental activities and highlights that public participation in India frequently remains procedural rather than substantive. The paper suggests that although public consultation is formally recognised as an important part of the EIA process, its practical impact on decision-making is often limited. This is important because it demonstrates that the gap between legal procedure and actual implementation continues to weaken the role of EIA as a tool of environmental governance, especially in large infrastructure and energy-related projects (Rathoure, 2021).

The treatment of climate concerns in renewable energy projects within the EIA process and finds that such projects are often assessed mainly in terms of their climate-related benefits, while their indirect or adverse environmental consequences receive less attention. The paper is important because it challenges the assumption that renewable energy projects are inherently sustainable. Its central contribution lies in emphasising the need for balanced environmental scrutiny of all forms of energy infrastructure, including those associated with climate mitigation goals (Larsen, 2014).

OBJECTIVE OF THE STUDY: 

Through this paper I aim to analyse the role and effectiveness of Environmental Impact Assessment in regulating energy projects while also studying the following:

  • To examine the environmental risks associated with different categories of energy

  • To study the legal and procedural framework governing EIA in relation to such

  • To assess whether the existing EIA mechanism adequately balances developmental and environmental concerns.

  • To identify major shortcomings in the present framework and suggest

RESEARCH METHODOLOGY:

 This research is doctrinal in nature and is based on secondary sources such as books, journal articles, research papers, case laws, statutes, government reports and official websites. The study uses a descriptive and analytical approach to understand the role of Environmental

Impact Assessment in energy projects. It also examines the legal framework and key issues to evaluate how far EIA helps in balancing development and environmental protection.

CONCEPT AND SIGNIFICANCE OF ENVIRONMENTAL IMPACT ASSESSMENT:

Environmental impact assessment or EIA has been defined by the International Association for Impact Assessment (IAIA) as “the process of identifying, predicting, evaluating and mitigating the biophysical, social and other relevant effects of development proposals prior to major decisions being taken and commitments made.”

EIA is the process of assessing a project’s or development’s anticipated environmental effects while accounting for interconnected socioeconomic, cultural, and human health effects, both positive and negative. Environmental assessment offers several advantages, including environmental preservation, efficient use of resources, and time and cost savings, by taking into account the project’s environmental consequences and their mitigation early in the project planning cycle. By encouraging community involvement, educating decision-makers, and laying the groundwork for ecologically sustainable initiatives, a properly executed EIA also reduces disputes. All phases of a project, from planning and exploration to building, operations, decommissioning, and beyond site closure, have shown benefits from incorporating EIA.

HISTORICAL DEVELOPMENT OF EIA IN INDIA:

Environmental Impact Assessment in India began as an administrative practice rather than a fully developed statutory requirement. Its early foundation is generally traced to 1976-77, when the Planning Commission asked the then Department of Science and Technology to examine river valley projects from an environmental perspective. This approach was later extended to other projects requiring approval from the Public Investment Board. At that stage, environmental clearance existed mainly as an executive and policy-based process, without a strong legislative framework.

With the enactment of the Environment (Protection) Act, 1986, which gave the Central Government the authority to regulate environmental activities and take action to safeguard the environment, a clearer legal foundation was created. On January 27, 1994, the government used this statutory authority to issue the EIA Notification, which required prior environmental approval for some types of development projects. This signaled a significant change from an administrative procedure to a clearance system with legal framework.

The EIA Notification, 2006, which introduced the current system of project classification into Category A and Category B, decentralized appraisal to the state level for some projects, and formalized stages like screening, scoping, public consultation, and appraisal, significantly altered the framework. Thus, the history of EIA in India shows a gradual movement from limited project review to a broader legal mechanism for environmental decision-making.

LEGAL FRAMEWORK OF EIA IN INDIA: 

The Environment Protection Act of 1986 governs EIA laws in India, which are operationalized through the EIA Notification 2006 (with modifications until March 2025). These regulations guarantee sustainable development while safeguarding India’s natural heritage. It offers the main legislative framework, outlining project classifications, clearance processes, and environmental assessment criteria.

The 2006 Environment Impact Assessment Notification has established two project categories which allow environmental clearance projects to operate in different regions. The system consists of two project categories which require different evaluation processes. Projects that require national level assessment fall under Category A whereas Category B projects need state level assessment.

  • Category A projects are those projects that, owing to their scale, nature, or potential environmental impact, are subjected to central level appraisal in the EIA These projects are examined by the Expert Appraisal Committee, and environmental clearance is provided by the Ministry of Environment, Forest, and Climate Change. As such, they are deemed to be projects that may have a significant impact on the environment, and thus they require prior environmental clearance. As a result, they do not undergo a screening stage. Instead, they are subjected to central level scrutiny through techniques such as scoping, public consultation, and expert evaluation.

  • Category B projects include the ones that are considered to have relatively more localised environmental impacts and hence are appraised at the state level. In the appraisal of such projects, the State Expert Appraisal Committee (SEAC) is involved, while the State Environment Impact Assessment Authority (SEIAA) is involved in the

environmental clearance of the project. Unlike the case with Category A projects, in the case of Category B projects, screening is conducted first. In the screening process, the project is further classified as either B1 or B2. While B1 projects involve the conduct of a detailed EIA study, B2 projects are exempted from the requirement of a detailed EIA report.

The State Environment Impact Assessment Authority (SEIAA) handles Category B projects at the state level based on the State Expert Appraisal Committee’s (SEAC) recommendations. In contrast to Category A projects, they undergo screening before being further categorized into Category B1 and Category B2. While Category B2 projects are often excluded from this requirement, Category B1 projects must provide a thorough EIA report. Nonetheless, the Category B proposal is taken into consideration at the central level even while it still maintains its status as a Category B project in cases where a State or Union Territory lacks a properly established SEIAA or SEAC.

This distinction is important because it determines the depth of environmental scrutiny that a project will undergo. Screening, however, applies only to Category B projects. Category A projects do not go through screening because they automatically require appraisal at the central level.

Key regulatory bodies include:

·       Ministry of Environment, Forest and Climate Change (MoEFCC):

The MoEFCC is the central authority in charge of India’s overall comprehensive environmental management and policy. According to the EIA framework, it deals with some Category B projects where general conditions apply and brings them under central evaluation in addition to giving environmental clearance to Category A projects. In addition to issuing notices, modifications, and policy directives, it oversees the environmental clearance system’s overall operation and is crucial in ensuring that projects with larger environmental consequences are reviewed at the national level.

·    State Environment Impact Assessment Authority (SEIAA):

The SEIAA is the state-level authority responsible for granting environmental clearance to Category B projects. It serves as the state’s decision-making body and implements the State Expert Appraisal Committee’s recommendations. Because it enables projects with more localized impacts to be evaluated closer to the ground while still adhering to the larger legal framework of the EIA Notification, 2006, it plays a crucial role in decentralizing the clearance process.

·       Expert Appraisal Committee (EAC) and State Expert Appraisal Committee (SEAC):

The professional bodies conduct technical assessments for their projects. The SEAC evaluates Category B projects while the EAC evaluates Category A projects. Their job description includes project documentation and Terms of Reference and EIA reports and Environmental Management Plans and public consultation results. They propose three options for environmental clearance which include approval and rejection and change of existing conditions. The committees serve an essential function because they assess scientific and technological aspects of research into environmental impacts.

·     State Pollution Control Boards (SPCBs):

The SPCBs perform an important operational role within the EIA process, especially during public consultation. They are responsible for organising and conducting public hearings, receiving responses from affected persons and local stakeholders, and forwarding the proceedings to the concerned appraisal authority. In addition, they also contribute to environmental monitoring and compliance at the state level, particularly where pollution control and local implementation are concerned.

·     Central Pollution Control Board (CPCB):

Although it does not issue environmental clearance, the CPCB is an essential component of the environmental regulatory system. It establishes national standards for pollution control, offers technical advice on environmental quality and monitoring, and encourages the creation of pollution control procedures that are pertinent to project evaluation and compliance. Its work is crucial since the CPCB develops baseline standards and pollution-related benchmarks that are frequently used in EIA appraisals.

ENVIRONMENTAL    IMPACT   OF    DIFFERENT    CATEGORIES    OF                 ENERGY PROJECTS:

Although the technology and goals of energy projects vary, nearly all of them have a substantial impact on the environment during the phases of site acquisition, building, operation, and waste disposal. Because of this, talking about “energy projects” as a single category is insufficient. The particular hazards associated with each type of energy infrastructure as well as the potentialcumulative impact these projects may have on ecosystems and populations must be examined in a rigorous environmental impact assessment. The EIA guiding framework in India itself acknowledges that sector-specific evaluation is required for nuclear, thermal, and river valley projects, demonstrating that environmental risk differs depending on the kind of project.

Thermal power projects: These are linked to some of the most obvious types of environmental harm. High water consumption, ash production, thermal pollution, air pollution from particulate matter and gaseous emissions, and strain on nearby land and settlements are some of their main effects. Additionally, if coal transportation, ash disposal, and related industrial activity exacerbate local environmental deterioration, these initiatives may result in cumulative impacts. Before receiving environmental clearance, thermal projects must carefully consider the implications for the air, water, waste, and public health because their impacts go beyond the plant site.

Hydropower and river valley projects: They can result in land submersion, habitat fragmentation, deforestation, altered river flow, sediment disturbance, and downstream biological impacts, even though they are frequently seen as a cleaner source of electricity. They could also cause local communities to be uprooted and have an impact on livelihoods that rely on river systems. The environmental impact of hydropower cannot always be comprehended project by project in isolation since several dams within a single basin may cumulatively alter the ecology of the entire region, according to official research on cumulative impact on river basins.

Nuclear energy projects: Because of their possible radiological effects, the requirement for stringent safety measures, and the long-term problem of managing radioactive waste, they create unique problems. Because site selection, water consumption, emergency readiness, waste management, and long-term environmental monitoring are all critical to the project’s acceptability, environmental evaluation is crucial even in situations when ordinary operations are under control. Accordingly, environmental evaluation in nuclear programs is treated by International Atomic Energy Agency guidelines as an ongoing, systematic process rather than a one-time procedural necessity.

Renewable energy projects, particularly solar and wind installations: Although they are frequently thought of as more ecologically friendly, they do have some impact. While wind projects may have an impact on birds, bats, and landscapes, large solar parks may need significant land conversion and disrupt delicate ecosystems. Furthermore, the broader renewable transition relies on minerals and commodities whose exploitation may result in pollution and biodiversity loss. Because of this, even if renewable projects have significant climatic benefits, EIAs should evaluate them with the same rigor as conventional projects.

 

ROLE OF EIA IN THE APPROVAL AND REGULATION OF ENERGY PROJECTS:

In India, environmental impact assessments are crucial to the licensing and regulation of energy projects. Prior environmental approval is required before projects like thermal plants, hydropower projects, mining-based energy infrastructure, and other significant energy operations are carried out since they have the potential to seriously impact the environment. By mandating that the project’s anticipated environmental effects be assessed before approval is given, EIA serves as a preventative measure. The following phases can be used to comprehend the function of EIA in the approval and regulation of energy projects:

1.     Screening and Scoping

The EIA Notification 2006 establishes two categories for project classification through Category A and Category B. The project evaluation process determines which government level will conduct the assessment based on the project’s assigned category. The authority in charge of EIA studies establishes Terms of Reference during scoping to define all project-related matters that need to be studied.

2.     Preparation of the EIA Report

The environmental effects of the proposed energy project are examined in detail. The report assesses how the project affects land and air and water and biodiversity and local communities. The report includes an Environmental Management Plan together with mitigation strategies. The EIA report functions as the main reference document which shows how the project will impact the environment.

3.     Public Consultation

Public consultation is an important part of the approval process, especially for Category A and B1 projects. The process enables affected individuals and other stakeholders to express their environmental and social impact concerns about the project. The EIA process achieves participatory development through local input which helps decision makers understand actual community conditions.

4.     Appraisal and Grant of Clearance

The Expert Appraisal Committee or the State Expert Appraisal Committee evaluates the project following the completion of the EIA report and public consultation. After that, the authority determines if environmental clearance should be given and, if so, under what circumstances. Therefore, by influencing the regulatory authority’s ultimate choice, EIA directly impacts the approval of energy projects.

5.     Post-Clearance Monitoring and Regulation

The role of EIA does not end once clearance is granted. The project proponent must comply with the conditions attached to the clearance and submit periodic compliance reports. Making EIA a continuous regulatory mechanism, as it helps ensure that the project remains environmentally accountable even during construction and operation. Thus, EIA is not merely a procedural requirement for obtaining approval. It serves as an important legal and regulatory tool that guides decision-making, encourages public participation, imposes environmental safeguards and monitors compliance in energy projects.

 

CHALLENGES IN THE IMPLEMENTATION OF EIA FOR ENERGY PROJECTS: 

Environmental Impact Assessments are intended to be preventive tools, however there are often significant practical challenges when implementing them in energy projects. In India, screening, scoping, public consultation, assessment, and post-clearance compliance are all explicitly covered under the EIA Notification, 2006. Nevertheless, successful environmental protection is not always guaranteed by the presence of a method. Because energy projects are large-scale, technically complicated, and have the potential to create long-term ecological harm, the discrepancy between the legislation on paper and its actual execution becomes particularly apparent.

1.     Poor Quality of EIA Reports:

The low quality of many EIA reports is one of the biggest issues with EIA implementation. In a number of instances, the studies fail to give a clear picture of the true environmental dangers associated with the proposed project and instead remain descriptive rather than analytical. Frequently, mitigation strategies are offered in a general way without adequately addressing the particulars of the project. Weak reports reduce the process’s overall efficacy since environmental clearance decisions are heavily influenced by the contents of the EIA report.

2.     Data Gaps and Weak Baseline Information: 

Accurate baseline data on the air, water, land, biodiversity, and local communities are essential for a thorough EIA. The lack of accurate and comprehensive data, however, is a frequent problem. The impact evaluation loses credibility when baseline data is inadequate or out of date. This is especially troublesome for energy projects, because the effects on the environment might last for years and impact a wide geographic region.

3.     Limited Public Participation and Stakeholder Engagement:

Public consultation was designed to give local communities and impacted individuals a formal way to express their concerns and objections before a project is approved. Because it aims to include public interest and local expertise into the clearance process, the EIA Notification views this as an important step in environmental decision-making. However, in reality, formal hearings, the technical intricacy of EIA papers, low knowledge, and restricted access to pertinent information frequently restrict participation. Weak stakeholder participation diminishes the process’s fairness, credibility, and general legitimacy in energy projects where locals may experience relocation, pollution, forest loss, or interruption of livelihood.

When issues with land acquisition, relocation, ecological degradation, and local resistance are not adequately addressed, environmental clearance procedures may become hotly contested, as seen by the controversy surrounding the Posco project in Odisha. The project’s continual examination and reassessment demonstrated the limitations of formal clearance procedures in resolving more significant environmental and social disputes. The case is still pertinent because it illustrates how EIA-related decision-making can encounter legitimacy issues in large-scale industrial and infrastructural development, even if it is not a traditional energy project.

4.     Inadequate Assessment of Cumulative Impacts:

Even when there are several identical projects in the same area, energy initiatives are frequently evaluated separately. Because the aggregate impact of several projects may be far higher than the impact of a single project, this causes a significant gap. Cumulative effects on forests, rivers, biodiversity, and air quality are frequently substantial in industries including thermal power, hydropower, and mining-related energy development. Environmental decision-making is weakened when these cumulative consequences are not evaluated.

5.     Weak Post-Clearance Compliance and Monitoring:

The EIA should proceed after receiving environmental clearance. The Indian framework, which sees them as part of post-clearance monitoring, requires half-yearly

 

compliance reports. However, one of the persistent shortcomings in practice is whether or not such regulations are successfully enforced. Since many environmental issues arise during construction, expansion, and operation, inadequate follow-up can greatly diminish the efficacy of the original review for energy projects.

6.     Institutional and Administrative Capacity Constraints:

The EIA system depends on several authorities, including the MoEFCC, EACs, SEIAAs, SEACs and Pollution Control Boards. Effective implementation therefore requires technical expertise, time, coordination and careful scrutiny of documents. In practice, large numbers of proposals, limited capacity, and the technical complexity of energy infrastructure can place pressure on these institutions. This may reduce the depth of review and make the process more dependent on the material submitted by project proponents themselves

7.     Lack of Early Integration into Project Planning:

The fact that EIA is frequently viewed as a step to be finished after a project has been largely defined rather than as a tool that should influence the project from the start presents another difficulty. Changing the location, design, or scale becomes more difficult when environmental issues are taken into account too late. This is a significant issue in energy projects as decisions about transmission arrangement, water supply, land usage, and siting are frequently environmentally critical.

8.     Inadequate Consideration of Social and Livelihood Impacts:

Energy projects often affect more than the physical environment. They may also alter access to land, forests, water resources and traditional means of livelihood. Yet social impacts are not always examined with the same seriousness as technical environmental parameters. This weakens the broader purpose of EIA, especially where local communities bear the long-term burden of development.

9.     Limited Integration of Climate Concerns:

In the energy sector, EIA must increasingly account not only for local environmental effects but also for climate-related concerns. This includes both the climate implications of conventional energy projects and the site-specific ecological impacts of renewable energy projects. Where climate concerns are treated narrowly or selectively, the assessment may fail to capture the full environmental context of energy development.

Thus, the challenges in implementing EIA for energy projects are not limited to the wording of the law itself. They arise mainly from weak report quality, inadequate data, limited

 

participation, poor cumulative assessment, weak monitoring, institutional constraints and insufficient integration of social and climate concerns. These problems reduce the ability of EIA to function as a meaningful safeguard and raise doubts about whether environmental clearance is always operating as a serious regulatory filter rather than a procedural formality.

 

EFFECTIVENESS OF EIA IN REGULATING ENERGY PROJECTS: 

The existence of a formal approach alone cannot be used to evaluate the efficacy of Environmental Impact Assessment in controlling energy projects. It must be evaluated by determining if the procedure genuinely affects project design, enhances decision-making, lessens environmental damage, and guarantees responsibility following approval. A formal framework for prior environmental clearance through screening, scoping, public engagement, and evaluation is provided in India under the EIA Notification, 2006. Compliance duties follow approval. This demonstrates that EIA is meant to function as an ongoing regulatory mechanism in addition to a pre-approval procedure.

1.     Effectiveness as a preventive legal tool

One of the strongest aspects of EIA is its preventive character. It requires environmental consequences to be assessed before a project begins, which is especially important in the energy sector where environmental harm may be large-scale and difficult to reverse. The Supreme Court’s decision in Alembic Pharmaceuticals Ltd. v. Rohit Prajapati is important in this respect because it rejected ex post facto environmental clearance as being contrary to the basic logic of the EIA framework. This supports the view that EIA is effective, at least in principle, because it brings environmental scrutiny into the decision-making process before irreversible project activity takes place.

2.     Effectiveness in structuring project approval

Another way the EIA works is by establishing a structure that is required for project approval. Many energy projects require evaluation of the environmental effects, consideration of mitigation strategies, and assessment by the relevant expert body in order to be approved. This guarantees that environmental concerns are included in the official decision record and lessens the likelihood of simply administrative or economically motivated approval. Because it forces authorities and project proponents to address environmental issues prior to approval, EIA has actual regulatory significance.

 

3.     Effectiveness in identifying impacts and mitigation measures

EIA’s capacity to anticipate potential effects and provide mitigation strategies through the Environmental Management Plan is another significant capability. Because it asks not only if a project may progress but also under what environmental circumstances it may do so, this offers the procedure real relevance. The case study by A.K.A. Rathi demonstrates how the strength and calibre of environmental management initiatives have a significant impact on the usefulness of EIA. To put it another way, EIA can only effectively regulate energy projects if mitigation and monitoring are planned carefully and are not considered standard project documents.

4.     Effectiveness in promoting public participation

EIA is further effective to the extent that it opens a formal space for public participation. Affected communities and other stakeholders can voice environmental and social concerns about the project through public consultation. This is particularly crucial in the energy industry, as people may experience ecological damage, pollution, loss of livelihood, or migration. The scholarly literature does, however, also demonstrate that its efficacy is restricted in real-world situations. According to Rathoure’s analysis of the Indian EIA process, public involvement frequently stays more procedural than substantive. This implies that although the framework acknowledges consultation, its impact on actual results may be minimal.

5.     Effectiveness in post-clearance regulation

The approval stage is not where EIA’s efficacy ends. The Indian system incorporates post-clearance monitoring within the regulatory framework and mandates six-monthly compliance reporting. This demonstrates that during building and operation, when numerous environmental hazards really occur, EIA is meant to stay relevant. However, this is also the point at which efficacy becomes inconsistent. The legal framework is in place, but whether or not compliance requirements are really observed and upheld will determine how well it works in practice. Rathi’s work highlights the shortcomings of environmental management and follow-up procedures in projects that have been cleared, demonstrating that post-clearance regulation is still one of the less effective elements of EIA in actuality.

6.     Effectiveness in different categories of energy projects

The type of energy project in question also affects how successful an EIA is. EIA is crucial for traditional projects like hydropower and thermal generation because of obvious concerns including pollution, forest loss, changed river systems, and

 

relocation. Effectiveness is more complicated with renewable energy initiatives. According to Larsen’s research, renewable energy EIAs frequently highlight climatic advantages while possibly paying less attention to indirect or negative environmental repercussions. This means that EIA remains necessary even for projects that are promoted as environmentally beneficial, and its effectiveness depends on whether the assessment remains balanced rather than one-sided.

All things considered, EIA is a crucial and essential instrument for controlling energy projects, and it works well in a number of ways. It acknowledges public input, establishes a formal decision-making framework, allows for mitigation planning, and incorporates environmental considerations into project approval. It is still only partially successful, though. Its performance is nevertheless hampered by the disconnect between formal framework and real-world application, particularly when it comes to report quality, public involvement, and post-clearance enforcement. As a result, EIA may be characterized as a useful regulatory tool whose efficacy in the energy industry is genuine, but variable and contingent on how seriously it is applied.

 

SUGGESTIONS AND REFORMS: 

The flaws in EIA implementation for energy projects do not prove that the framework is unnecessary. Instead, they demonstrate that the framework has to be implemented with more institutional responsibility, technical depth, and seriousness. Reforms should concentrate on making the EIA process more dependable before to clearing and more enforceable following permission because energy projects frequently include significant ecological change, displacement, pollution, and long-term resource usage. The structure for such regulation is already provided by the legislative framework, but how well the system is implemented in reality will determine how successful it is.

1.     Improvement in the quality of EIA reports:

The quality of EIA reports itself is a key topic for reform. The project-specific analysis of baseline conditions, effects, mitigation, and monitoring is required by the official Terms of Reference, demonstrating that the law demands more than a standard descriptive document. Therefore, in practice, a closer examination of report quality is required to ensure that evaluations are grounded in trustworthy, scientifically supported information rather than generalizations or repetitions. This is particularly crucial for

 

energy projects since their consequences on the environment are sometimes complicated and long-lasting.

2.     Stronger baseline data and field-based assessment:

A reliable effect evaluation starts with baseline data. For air, water, land, and other vital components, the ToR architecture specifically calls for environmental baseline data. Inadequate data can skew effect predictions from the start. Therefore, reform is required in the form of improved field research, updated data, and more thorough site condition verification prior to project evaluation.

3.     More meaningful public consultation:

Public input need to be considered more than just a formality in the decision-making process. Affected parties and other stakeholders are formally included in the process through the EIA Notification, and issues brought up during consultation are anticipated to be addressed in the final EIA. However, the scholarly material you submitted demonstrates that public participation in India is frequently delayed, constrained, and has little practical impact. Therefore, improved project information availability, early consultation, and more open handling of community complaints should be the goals of reform.

4.     Greater use of cumulative impact assessment:

Energy projects shouldn’t always be evaluated separately. The MoEFCC-sponsored hydropower basin studies show that several projects in the same biological region might have compounded impacts that a project-by-project evaluation would overlook, and the official ToR itself acknowledges cumulative effects. Reform should therefore shift toward more robust cumulative and regional evaluation, particularly in river-valley, thermal, and mining-related energy development.

5.     Stronger post-clearance monitoring and compliance:

The approval should not be the end of the EIA procedure. Six-monthly compliance reporting is incorporated into the regime, according to official documents and the Parivesh compliance system. This indicates that environmental regulation is intended to continue throughout the project’s operational period. Stricter evaluation of compliance reports, improved public access to those reports, and more robust enforcement in cases when clearance requirements are disregarded are all necessary reforms to increase the credibility of this follow-up.

6.     Better technical capacity and consultant accountability: 

The system depends heavily on the technical quality of consultants and appraisal bodies. The QCI/NABET certification program demonstrates that formal quality standards must be met by EIA consultants; nevertheless, accreditation by itself cannot guarantee accurate evaluation unless appraisal authority have adequate technical resources and review time. Therefore, reform should concentrate on both sides: boosting the institutional capacity of the authorities that assess consultant organizations’ work and enhancing their competence and responsibility.

7.     Earlier environmental scrutiny in project planning:

An essential reform element is highlighted by the Supreme Court’s rejection of regular ex post facto environmental clearance: environmental review must precede final project decisions. Early integration of EIA is more beneficial than treating it as a later approval barrier in the energy industry, where site selection, water use, transmission layout, and resource extraction patterns are frequently ecologically critical.

8.     Better integration of climate and social concerns:

Concerns of livelihood and climate change must also be addressed in a contemporary EIA framework for energy projects. A.K.A. Rathi’s Indian case study is especially relevant here because it shows that the practical value of EIA depends heavily on the quality and robustness of environmental management programmes. In addition, Indian EIA literature emphasizes the importance of paying more attention to stakeholder concerns and societal ramifications. Therefore, reforms should promote a more comprehensive evaluation that takes into account long-term socioeconomic impacts on impacted populations, indirect ecological effects, and climate resilience. In sum, the reform of EIA for energy projects should not be understood as the replacement of the current framework, but as its strengthening through better evidence, stronger participation, cumulative assessment, post-clearance enforcement and higher institutional capacity. If these areas are improved, EIA can operate more effectively as a serious regulatory tool rather than merely as a formal stage in project approval.

 

CONCLUSION: 

In conclusion, environmental impact assessments continue to be a crucial legal instrument in the regulation of energy projects since they allow for public input, bring environmental scrutiny prior to project approval, and establish a foundation for mitigation and post-clearance compliance. However, the study also demonstrates that its efficacy varies among energy projects and is frequently undermined in reality by subpar reporting, inadequate baseline data, low public engagement, insufficient cumulative evaluation, and inadequate post-clearance monitoring. Therefore, even though the Indian EIA framework may theoretically balance environmental protection with energy development, its actual performance is still inconsistent and incomplete. As a result, the research finds that while EIA is essential, it is not entirely successful in its current form. Its worth is found in making sure that decisions are transparent, responsible, and well-informed rather than just in giving clearance. Stronger compliance procedures, institutional capability, meaningful engagement, and scientific rigor must all be prioritized if EIA is to regulate energy projects more successfully.

 

REFERENCES: 

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IN CONTEXT WITH EIA 2020. In Octa Journal of Environmental Research. https://www.sciencebeingjournal.com/sites/default/files/03_0901_EIA.pdf

  • Satpathy, (2017). “Environmental Clearance Process and the Posco Controversy: An Analysis.” Journal of Political Science & Public Affairs, 5(4), 1–4.

Understanding EIA. (n.d.). https://www.cseindia.org/understanding-eia-383

  • Tandon, (2025, November 20). Supreme Court rolls back order banning post-facto environmental clearance. Mongabay-India.

https://india.mongabay.com/2025/11/supreme-court-rolls-back-order-banning-post-factoenvironmentalclearance/#:~:text=Share%20this%20article,for%20at%20least%2 0150%20more

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In Re: Amarnath Shrine(2013) 3 SCC 247 Supreme Court of India

by with No Comment VOLUME 1 ,ISSUE 1.
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AUTHOR: SHRADDHA BHARGAVA | STUDENT (3RD YEAR), SYMBIOSIS LAW SCHOOL, NOIDA

 

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ABSTRACT

This case commentary discusses the Supreme Court of India’s suo motu action in In Re: Amarnath Shrine, (2013) 3 SCC 247 and how the Court contributed to the evolving jurisprudence relating to public interest matters. The Court undertook an inquiry into the reasons for the large number of deaths of pilgrims during the 2012 Amarnath Yatra and asked if the State had fulfilled its constitutional duty to safeguard the right to life with dignity under Article 21, right to movement under Article 19(1)(d) and right to freedom to practice religion under Article 25. The Court constituted a Special High-Powered Committee (SHPC), accepted the findings of experts and converted their recommendations into directions relating to health infrastructure, environmental sanitation, animal track safety measures, registration and security arrangements for the Yatris. The Court’s intervention in order to save lives of pilgrims is praiseworthy as it was an effective step to fill the void created by executive inaction. However, the real test for the Court would be to ensure compliance of its directions on an ongoing basis. The case raises fundamental questions that are germane to the environmental jurisprudence as well as to the rights jurisprudence. It questions whether courts can direct Parliament to legislate in ecologically sensitive areas where unregulated religious tourism is taking a mounting toll on Himalayan ecosystems.

INTRODUCTION

The Supreme Court of India made a major judicial decision when it dealt with three key issues relating to public safety, environmental protection, and the safeguarding of fundamental rights during religious events in the Amarnath Shrine case. The annual Amarnath Yatra is a Hindu pilgrimage during which hundreds of thousands of devotees visit the Amarnath cave shrine located in the Himalayan region of Jammu and Kashmir. The pilgrimage is not merely a private religious undertaking; it is, in significant measure, a state-managed public event, with the Shri Amarnath Shrine Board (SASB) constituted under a statute of the State Legislature.

The Supreme Court took suo motu cognizance of the matter in 2012 when a series of news reports highlighted the pilgrims’ suffering due to inadequate infrastructure, limited medical facilities, poor sanitation, and the lack of proper crowd management at the pilgrimage routes. The devotees have to cover the tough mountainous terrain on foot mainly through the Baltal and Pahalgam routes even in the harshest weather conditions. Many pilgrims died as they fell ill due to the extreme weather and the hospital could not provide assistance on time. The increasing number of pilgrims also led to environmental degradation as the area is ecologically sensitive, and there were very few means of waste disposal, and tourists were allowed to roam freely. The Court not only summoned the Union of India and the State of Jammu and Kashmir for answers but also the Shri Amarnath Shrine Board while simultaneously issuing the formation order.

ISSUES

  1. Whether the State has met its constitutional duty to protect pilgrims’ fundamental rights of the right to life with dignity, safety, and free movement (Articles 21, 19(1)(d), and 25 of the Constitution of India)?
  2. What are the concrete measures for safety, health, amenities, and environment?
  3. The scope of courts in giving directions where law or policy is missing, impacting fundamental rights and public interest?
  4. How to reconcile religious freedom and right to pilgrimage with environmental protection in a climatically sensitive area?

RULE

  • Article 21 of the Constitution of India has been changed from a strict prohibition against the deprivation of life and personal liberty to a wider right to life in a dignified manner, understanding the latter to mean among other things the right to health care, safe conditions of movement, and a clean and healthy environment. Therefore, the protection of the environment is very much a part of the protection of life, especially in situations where human life and human well, being are endangered by the deterioration of the environment.
  • Article 19(1)(d) grants citizens the liberty to move without any restrictions throughout the territory of India however this basic right can be curtailed reasonably as per Article 19(5) for the sake of the general public.
  • Likewise, Article 25 guarantees the freedom to follow one’s religion and to change it, but these liberties are subject to the limitations imposed by considerations of public order, morality, and health.
  • The Directive Principles of State Policy contained in Articles 47, 48 A and 49 besides the fundamental duty under Article 51A(g) stress the obligation of both the State and citizens to protect public health, conserve the environment, and preserve natural and cultural heritage.
  • These principles are frequently read in conjunction with Article 21 in order to advocate for concepts such as sustainable development and inter-generational equity.
  • Articles 32 and 142 authorize the Supreme Court to give directions for the purpose of ensuring the effective enforcement of fundamental rights, especially in cases where there are legislative gaps.
  • Key environmental doctrines that have been used by courts to guide their interpretation of laws include:
  • sustainable development which tries to integrate development with nature protection to a certain extent,
  • the precautionary principle that advocates for taking precautionary measures even if scientific evidence is not fully conclusive[1], and
  • the public trust doctrine which states that natural resources are the property of the State but the State is simply a trustee for the public.[2]
  • The Universal Declaration of Human Rights, 1948 (UDHR), especially Article 1 (dignity, freedom and equality) and Article 25(2) (right to a standard of living adequate for health and wellbeing), were cited as a basis for the enlarged interpretation of Article 21 and the State’s mandate.
  • Environment (Protection) Act 1986 was regarded as an expression of the constitutional duty of the government to take proper steps for the protection of the environment.

APPLICATION

The Supreme Court’s suo motu intervention on July 13, 2012 marked a monumental example of judicial activism when the Apex Court took note of the disturbing press reports from The Times of India and The Hindustan Times about the deaths in the 2012 Amarnath Yatra, 67 in 17 days, going by 105 in 45 days the previous year. The reports revealed a series of cardiac arrests falls hypoxia, and stampedes on the dangerous routes from Baltal and Pahalgam base camps to Panchtarni and the holy cave, which have to be walked along with narrow and unprotected paths, lack of medical facilities, poor sanitation, and improper waste management. Conceiving the breach of rights guaranteed by Articles 21 (life with dignity), 19(1)(d) (free movement), and 25 (religious freedom), the Court opted to serve a notice to the Union of India, Jammu & Kashmir (J&K) State, and Amarnath Shrine Board (ASB/SASB)[3], seeking the clarifications regarding the yatra which the court noticed is not only an expression of religious fervour but also a state function.[4]

By July 20th, with the death toll rising (from 84 to 97 over just three days), the Court set up a Special High-Powered Committee (SHPC) composed of representative from the Union Ministry, the J&K Chief Secretary, and the Director Generals of BSF/ITBP. The committee was given the main task of carrying out a site inspection. Their report dated September 6, 2012 covered eight main areas: health environment registration, access control security track conditions, and amenities. All the parties agreed to it, subject to obtaining clearances, which led the Court to accept it in its entirety, while also giving it mandatory and binding directions classified as short, and long, term by a Sub, Committee (Chief Secretary, Home Secretary J&K, CEO SASB).[5] The Chief Secretary, Health Secretary, and CEO were to be held personally accountable for the work up to the level of compliance. They were given powers to request for clarifications or even point out the instances of non-compliance.

Health Measures

Each pilgrim must have a health certificate checked by an Expert Medical Committee (Union Health Ministry, J&K specialists through State Health Secretary) with a standardized checklist. This is done by authorized government doctors or listed private institutions (publicized by CEO SASB). This will ensure the pre-screening of the pilgrims.[6] Medical aid camps (MACs) should rationalize the location of their facilities, they should be increased in number, well-equipped/spacious, especially at Sangam, Holy Camp Lower, Kalimata Top Railpathri Nagakoti Wavbal Sheshnag, and lower Holy Cave (those led by the ITBP are already included in this list). Increasing the number of Indian Systems of Medicine camps along the routes. Union Health Ministry supplies specialists/GDMOs from the most, pilgrim states, train J&K staff on high, altitude sickness, and provide portable Hyperbaric Chambers. Tents/Huts kept warm (25, 26C) at Holy Cave Sangam Panchtarni Sheshnag Poshpatri. A committee (CEO SASB, a high, altitude expert) is developing junk, food, free menus; the public is informed through documentaries, AIR/Door darshan, pamphlets in local languages on dos/don’ts.

Environmental and Sanitation Directives

Bio-digester toilets upgraded through the professionals; STPs at Baltal/Nunwan upgraded to treat garbage, including the langar grease/ biology waste. The State Public Health Engineering manages the provision of water in sanitation contracts, the growth of facilities along langar routes. Blandishment vigilantly imposed; SASB places filters over water where camps/langars, pilots place schemes and also erect pictorial signs. Segregation of waste into compost pits is done in Langars; there is no clearance without facilities. Garbage trucks are multiplying; solid waste disposal follows yoga. Ranga Moth-Domail Road is widened/upgraded with Ranga Moth-Domail state road protection against dust/ mud. State Pollution Control Board (SPCB) does annual studies of water of Lidder/Sindh River, modernizes laboratories. SHPC puts emphasis on routine environmental impact assessments (EIA when statutory), separation of water bodies to low-temperature curb contamination.

Track and Infrastructure Improvements

Tracks broadened up to 12 ft and with rough surfaces, iron grills/retaining walls/railing through realignment; no metalled roads. One-way traffic of palkis/horses vs. pedestrians close to Shrine, prefabricated matting/rough cement tiles on track Baltal, tracks Panchtarni, Chandanvadi. Shelters every now and then; tentative ones at Shrine. The iron grill of holy cave has been swapped with transparent fibre (or 12-inch holes through which people see).

Registration, Access, and Security

SASB restricts number of annual pilgrims per weather/track/infrastructure; colour-coded/date/route-specific permits are required on gates. Pre-registration of the home-state advanced and the on-spots (Srinagar/base camps), and releases were done in batches and reports so as to decongest. Additional mountain rescue teams (MRTs) J&K Police deployed in 3 years; CAPFs upgrade personnel equipment. Principal Secretary Home holds SOPs evacuation (air ambulances); CEO seeks NGO/red cross assistance.

According to the Court, which invoked Article 32, the motive of this legislature-coloured intervention to substitute inaction-induced rights abuses was well bearing because of its widespread implication.[7] Directions are aligned to the principles of sustainable development and precautionary policies, which are based on the input of experts, and do not place any impracticality. A Sub-Committee is supervising, and reports to Court. This plan will gut reform in yatra management, I would argue that enforcement is the acid test- judicial fiat should be coupled with responsible implementation of such fiat to stop repeat tragedies (in ecologically vulnerable areas).

CRITICAL ASSESSMENT

The judgment gets several things right. It does not treat preventable pilgrim deaths as just an administrative issue. It turns constitutional principles into clear, practical steps. It also creates an accountability system that, at least in theory, could be effective. Finally, it expands on the idea of inter-generational equity in environmental rights, giving future courts something to build on. However, there are important problems that need to be mentioned. The biggest issue is how hard it is to enforce these directions. Indian courts have made important rulings on the environment and safety before, but they are not always put into practice. Holding the Chief Secretary and CEO personally responsible sounds good, but officials change, governments shift, and people forget about old court orders. The Sub-Committee approach only works if someone keeps making sure the rules are followed, and courts are not set up to do that over the long term. There is also the issue of democratic legitimacy. The SHPC’s suggestions about limits on pilgrims, route planning, environmental rules, and how langars operate are all policy decisions. These are choices about balancing different interests in a specific place and religious setting. Parliament, or at least the State Legislature, would be better suited to make these decisions in an open and transparent way. The Court stepped in because the executive failed, but just because the intervention was justified does not mean it was the best way to handle things.

Another issue is that the judgment does not look at why the number of pilgrims has increased so quickly or what it would take to keep those numbers sustainable in the long run. The directions do not address the social, religious, and economic reasons behind the growth of the Yatra. Setting limits on pilgrims can control numbers for a year, but it does not solve whether those limits can last for decades when both religious feelings and the local economy push for more visitors.

Finally, the Court is working in a very complex area that involves things like high-altitude medicine, environmental limits, mountain engineering, and waste management. The Court’s main tools are legal, not technical. The SHPC model was a good way to bring in expert advice, but how well it works depends on the skills and independence of the committee members. That is something the Court cannot control.

CONCLUSION

In Re: Amarnath Shrine was an important case when it was decided and it still matters today. It showed that courts can enforce positive duties under Article 21, even if the legislature has not made specific laws. The case also added meaning to the environmental side of the right to life, especially in the context of high-altitude pilgrimage tourism, which the Court had not dealt with before. It created a model where judicial directions are guided by experts and supervision, which, despite its flaws, is more thoughtful than doing nothing or making laws from the bench.

Whether the judgment actually worked is a different question, and it takes more than legal analysis to answer. If pilgrim safety and environmental conditions at the Amarnath Yatra improved for the long term after 2013, then the judgment deserves its good reputation. But if the directions were ignored, like many other court orders, it would just be remembered as an important principle without much real impact. The deeper issue is whether India needs legislation that properly governs ecologically sensitive pilgrimage sites, with enforceable environmental limits and long-term management frameworks, was not resolved by this case and could not have been. That is a job for Parliament, and until Parliament does it, courts will keep being asked to fill the gap one crisis at a time.

 

BIBLIOGRAPHY

  • In Re: Amarnath Shrine, (2013) 3 SCC 247 (Supreme Court of India).
  • Constitution of India (1950).
  • Environment (Protection) Act, 1986.
  • Universal Declaration of Human Rights, 1948, Arts 1, 25(2).
  • Bandhua Mukti Morcha v. Union of India, (1984) 3 SCC 161.
  • CESC Ltd. v. Subhash Chandra Bose, (1992) 1 SCC 441.
  • Consumer Education and Research Centre v. Union of India, (1995) 3 SCC 42.
  • Him Singh v. Union of India, (2010) 5 SCC 538.
  • C. Mehta v. Kamal Nath, (1997) 1 SCC 388.
  • C. Mehta v. Union of India, (1987) 1 SCC 395.
  • Nilabati Behera v. State of Orissa, (1993) 2 SCC 746.
  • Vellore Citizens’ Welfare Forum v. Union of India, (1996) 5 SCC 647.
  • Vishaka v. State of Rajasthan, (1997) 6 SCC 241.
  • Sharma A, ‘Analysing the Socio-Economic Impact of Amarnath Yatra on Local Communities in Kashmir’ (2025) International Journal of Creative Research Thoughts.

REFERENCES 

[1] Vellore Citizens’ Welfare Forum v. Union of India (1996) 5 SCC 647.

[2] M.C. Mehta v. Kamal Nath (1997) 1 SCC 388.

[3] Nilabeti Behera v. State of Orissa (1993) 2 SCC 746

[4] Him Singh v. Union of India (2010)

[5] Vishaka v. State of Rajasthan (1997) 6 SCC 241

[6] Consumer Education and Research Centre v. Union of India (1995) & CESC Ltd. V. Subhash Chandra Bose (1992) 1 SCC441

[7] Bandhua Mukti Morcha v. Union of India (1984) 3 SCC 161 & M.C. Mehta v. Union of India (1987) 1 SCC 395

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“INDIA’S ONLINE GAMING BILL 2025: DATA PROTECTION, VPN CIRCUMVENTION AND GLOBAL COMPLIANCE UNDER THE DPDP ACT AND GDPR”

by with No Comment VOLUME 1 ,ISSUE 1.
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JOINT JURIST

AUTHOR:  SUBHASREE BOSE | STUDENT  (2ND  YEAR), AMITY UNIVERSITY, NOIDA

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ABTRACT

Global Online Gaming companies under scrutiny:The impact of India’s Online Gaming Bill, 2025 on Data Protection, VPN Circumvention, and compliance with the DPDP Act and GDPR. The Global Growth of online Gaming has triggered complex debates on regulatory actions and data protection. India’s Online Gaming Bill, 2025[1], provides a legal platform that blanket bans all forms of online money gaming on licensing as a necessity and provides blocking measures (Blocking rules) in compliance with these provisions. At the same h time, the strong enforcement of the DPDP Act (Digital Personal and Data Protection Act, 2023)[2] provides provisions, including children ‘s data, data processing, data retention policies, and restrictions on cross-border data flows. such provisions which remain the international data protection Regulations which remain the international data protection compliance standard. These regulatory Systems put the Global online gaming Platforms companies under different levels of scrutiny.

The widespread use of VPN (Virtual Private Networks), which allows Indian users to evade geo-blocking and access unlicensed on unregulated gaming, provides a formidable enforcement challenge. This scenario gives rise to unanswered accusations concerning the jurisdictions appointment of liability among platforms. Also, questioning the effectiveness of regulatory constraints in a borderless world, the VPN circumvention is explored as a distinctive element subverting both data governance and regulatory enforcement. the legal research work wants to approach a practical reality encountered by the international gaming business, all the while safeguarding users’ privacy in an increasingly decentralized and vpn based online world.

INTRODUCTION AND BACKGROUND

One of the most rapidly expanding industries of the digital economy has been the internet games business with hundreds of web sites boasting of millions of gamers worldwide. It has also come with massive concerns on the regulatory, moral and data protection concerns on its growth. The world governments are faced with the Herculean task of ensuring that the economic potential of the online games is realized and protection against financial exploitation, misuse of information and addictive interfaces are provided. India has also seen a change in favour of Promotion and Regulation of Online Gaming Bill, 2025 (“Online Gaming Bill”), which is a proposed bill to introduce licensing requirements, prohibit games of chance, and give the authorities the right to access and block non-licensed sites. The Bill is a tectonic shift of the previous self-regulation model designed with the 2023 IT Rules, and it is also a move that testifies to the Indian intention to have more control over the gaming sector.

The connotations of regulation with regard to this Bill cannot be uncoupled. The Bill overlaps with the Digital Personal Data Protection Act, 2023 (DPDP Act), which is the first national data protection legislature in India. The DPDP Act stipulates on consent, data minimization, handling of data of children, and cross-border transfer of data, which play a significant role in online gambling websites, which traditionally handle sensitive personal and financial information of players. Meanwhile, foreign online gambling enterprises with European customers are covered by the General Data Protection Regulation (GDPR), the most powerful and significant data protection legislation globally. This point of regulatory intersection presents a complicated compliance challenge, where the questions of consistency, enforcement, and extraterritorial law are in play. The use of Virtual Private Networks (VPNs) by India is some of the causes of some of the issues of enforcement. Through a VPN an end-user can conceal their physical location and, thus, connect to a game platform that may be in a class that is prohibited or licensed under the Online Gaming Bill. This form of avoidance nullifies the effectiveness of geo-blocking strategies, confounds the distribution of liability between platform and user, and also presents major problems to the degree to which a state in an online borderless world can regulate.

The other field, which directs the State regulatory approach in India, is the parents patriae doctrine of the State, commonly known as the doctrine of the State as parent or father. This principle of judicial gives to the State a paternal, custodial role in respect of its citizenry–particularly weaker groups like children, orphans, and persons incapable of self-protection. Providing itself as a guardian to their safety, the State can step in even beyond natural guardianship in order to protect interests standing vulnerable to exploitation. Applied to online gambling, the doctrine defends the government in its argument of strict licensing, real-money gaming prohibition and the additional protection of children data and web usage which can be seen as a defense of the State as a protector and not a regulator.

Nonetheless, even though parens patriae further increases consumer protection, the State is subjected to colossal risks in an internet economy. Too much augmentation of the paternal position of the State may smother agency of individual, constrain rightful online behavior, and enable unproportional surveillance in the name of security. Overindulgence in paternalism may also put a freeze on creativity and the freedom of choice by adults in legal entertainment. Without open checks and judicial oversight, the doctrine can serve as a convenient shroud around an over-accumulation of data, censorship and over-governance, and it also thwarts the privacy and freedom that it claims to defend.

The constitutional basis on which the data protection regime in India is founded is in the identification of the fundamental right to privacy as enunciated in K.S. Puttaswamy v. Union of India (2017). In the landmark case, the Supreme Court decided that informational privacy is an accessory and complement of the right to life and liberty under Article 21. Then, the DPDP Act, as well as personal regulation, e.g., the Online Gaming Bill, will have to be reviewed within the prism of such constitutional guarantee. The privacy rights engagement, regulatory authority, and global compliance regimes such as the GDPR are sensitive as they show the delicate tug-and-pull between personal freedom and government control within cyberspace. This thesis places the Online Gaming Bill in the broader scope of data protection laws, and examines its impacts on online gaming platforms across borders. The relationship between the Bill, DPDP Act, and the GDPR is discussed in a bid to evaluate the shifting of the compliance obligations in response to the claims of sovereignty, borderless transfer of data, and technological evasive mechanisms like VPNs. Moreover, it raises a question of whether the regulatory policy of India is addressing legitimate problems of user protection and data sovereignty appropriately or it may create disjointed burdens that may hamper global interoperability. Lastly, the research will be able to add insight into better understanding how borderless states can regulate digital markets without infringing on fundamental privacy rights

.SCOPE AND OBJECTIVES

The purpose of the study in particular is to examine the impact of Online Gaming Bill, 2025 on the foreign online gaming websites, particularly in the sphere of data protection, circumvention via VPN and its compliance with the international regulations such as the Digital Personal Data Protection Act, 2023 (DPDP Act) and the General Data Protection Regulation of the European Union (GDPR). It looks at the interlocking of the Bill blocking and licensing regime with these data protection regimes, such as consents, data minimization, children data regulation and cross-border data transfer, and evaluates the costs of compliance to global gaming companies. The study also reviews the issue of the widespread use of Virtual Private Networks (VPNs) that bypass geo-blocking and licensing requirements and are hard to enforce. Moreover, it examines the tension between the regulative power and the constitutional right to privacy in Article 21 of the Indian Constitution as set out in K.S. Puttaswamy v. Union of India (2017) and whether the policy in India is sufficient in balancing the protection of the users with the creation of innovations or poses a threat of breaking the international interoperability. Finally, the study will provide pragmatic regulatory or self-regulatory suggestions to balance out data protection standards, seal enforcement loopholes, and maintain user privacy in an open-digitized world.

[3]India’s online gaming sector has developed very quickly, with famous firms such as Nazara Technologies, Dream11, MPL, Games24x7, and Paytm First Games drawing millions of gamers. The platforms deal with a great deal of personal and money-related information, so they have to abide by strict guidelines. The upcoming Online Gaming Bill, 2025 requires all real-money games to be licensed and enables the government to block non-licensed sites. Meanwhile, the Digital Personal Data Protection Act, 2023 (DPDP Act) enforces norms on consent, child data protection, restricting data collection, and cross-boundary data transmission, as in the case of global standards such as GDPR.

The new legislation has posed significant issues for Indian online gaming businesses. Several businesses, such as Dream11, MPL, and WinZO, have shut down real-money gaming and are revising their business models. Venture capitalists, who invested around $2 billion in Indian online gaming startups worth around $15 billion, now worry about the returns. To add to that, most of the users make use of VPNs to circumvent geo-blocking and play unauthorized games, which makes it all the more challenging for corporations and regulators to comply with the law.

Due to such issues, Indian gaming businesses need to tread the fine line between ensuring regulatory compliance, maintaining user privacy, and keeping their finances afloat. With this, the following research questions are concerned with how the Online Gaming Bill, 2025, affects Indian online gaming companies in terms of data protection, VPNs, privacy, and compliance.

How does India’s Online Gaming Bill, 2025, interact with the Digital Personal Data Protection Act, 2023 (DPDP Act), and to what compliance issues does this pose for Indian online gaming businesses such as Nazara, MPL, and Dream11?

India’s Online Gaming Act, 2025, which came into effect on October 1, puts a straight ban on real-money gaming, including skill-based game money participation. The act criminalizes the providing, arranging, promoting, or sponsorship of such games, with imprisonment for up to three years and a fine of up to ₹1 crore. Indian gaming firms like MPL, Dream11, and Nazara have thus been compelled to suspend their real-money operations. MPL, for instance, intended to lay off some 60% of its employees in India, or about 300 employees, as a consequence of shutting down paid gaming services. Nazara Technologies too suffered heavily, with its share price plummeting by 6.73%, indicative of market uncertainty and investor apprehension regarding changes in regulations.

Concurrently, the Digital Personal Data Protection Act, 2023 (DPDP Act) places stringent data protection responsibilities, labeling gaming platforms as ‘Data Fiduciaries’ and liable for the privacy and security of users’ data. Data processing requires direct consent from users, having strong data protection systems, careful cross-border data transfers, reporting data breaches within 72 hours, and ensuring the data of young users through verifiable parental consent mechanisms. The conflict between the DPDP Act and the Gaming Bill generates a twin regulatory burden: whereas the Gaming Bill limits money transactions, the DPDP Act regulates the collection and usage of financial and personal information, so that companies have to juggle criminal risk and data protection duties. Breach of either statute can lead to draconian sanctions, such as fines, imprisonment, or reputation loss, which make operational adjustment both illegally and economically burdensome.

Together, the legislations have compelled Indian gaming firms to restructure their business models into gaming experiences that are not monetary with emphasis on alternative sources of income like sponsorship and advertisement. Dream11, for example, leverages its 10 million daily active consumers to generate revenues through brand collaborations such as Swiggy, Astrotalk, and Tata Neu targeting a predominantly youthful population of approximately 70% aged between 18 and 35 years.. But the shift brings in challenges like reduced profitability, increased operation costs to manage data, and rebuilding user interaction in a competitive landscape. In general, the regulatory landscape requires Indian gaming companies to walk along the thin line of compliance and innovation so that they are at par with the law and yet sustain their operations and growth. For more details, see “Dream11 eyes advertising revenue with 10 million daily active users after RMG ban” and “Legal experts weigh in on DPDP Act’s impact on online gaming sector”

To what extent is the extensive popularity of VPNs in India weakening the enforcement of the Online Gaming Bill, 2025, and how should liability be divided between users and platforms in a borderless digital world?

The widespread use of Virtual Private Networks (VPNs) across India has a significant impact on the implementation of the Online Gaming Bill, 2025, particularly regarding the prohibition of real-money gaming. VPNs enable users to mask their geographical location so that they may access and participate in online gaming platforms that otherwise would be prohibited within the country.. Such bypassing of geo-blocking technology negates the success of the law since users can readily evade national firewalls and access foreign gambling websitesVenturThe problem of enforcement from the excessive application of Virtual Private Networks (VPNs) in India is critical, particularly from the view of the Online Gaming Bill, 2025. While the Indian government has attempted to regulate the application of VPNs, for example, by requiring providers to keep users’ data for extended periods, such controls are largely targeting service providers and not end-users. Therefore, users will still be able to access censored content, like web-based gaming sites, with VPNs without being legally confronted immediately.

India’s cyber regulator, the Indian Computer Emergency Response Team (CERT-In), issued new guidelines in April 2022 that require VPN service providers, cloud service providers, and data center, to store users’ data for at least five years. This includes names, e-mail addresses, contact information, and IP addresses. The goal of the regulations is to improve cybersecurity and fight cybercrime. Obligations like this apply directly to service providers only and not users.. Therefore, users are free to use VPNs to conceal their location and access online gaming websites that otherwise remain banned in India.

The applicability of the Online Gaming Bill, 2025, is also made tougher by the technological advancement of VPN services. Although the government has made VPN operators keep records of users, the operators are not bound to censor or block users’ actions. Users are still able to access VPN servers in nations where online gaming is not prohibited, thus avoiding national prohibitions. This puts the enforcement of the Online Gaming Bill provisions in a difficult situation, as it is hard to differentiate between legal users and those seeking to evade legal prohibition.

In this global free zone, liability is elusive. Although users who deliberately circumvent national restrictions through VPNs can be said to go against the intent of the law, they are not directly violating its letter. On the flip side, platforms that enable access to their services from jurisdictions where they are banned could be argued to be complicit in promoting illegal activity. However, enforcement of Indian laws against foreign platforms is problematic on issues of jurisdiction and enforceability.

To address such issues, there must be a balanced response to liability. Users need to be educated about the legal implications and the risks of avoiding national controls, including the risk of fraud and addiction. Websites, especially those which are licensed in other jurisdictions than India, should be endowed with robust geo-blocking mechanisms and adhere to international norms of responsible gaming to prevent their services from being accessed in prohibited zones. Secondly, international cooperation between regulators is essential in formulating an overarching framework that can address the challenges posed by the application of VPNs and provide proper enforcement of online gambling laws. In such a context, establishing responsibility in an extraterritorial cyber world is complicated. Those users who purposefully circumvent national bans through the use of VPNs can be held to have broken the spirit of the law, although not necessarily its letter. Conversely, sites that enable access to their websites from jurisdictions under which they are banned can be said to be complicit in facilitating illicit activity. Yet, the application of Indian laws outside India to foreign websites creates concerns regarding jurisdiction and enforceability.

For these purposes, a balanced approach to liability is called for. Users should be made aware of the legal implications and risks entailed in avoiding national controls, including exposure to fraud and addiction. Sites, especially those operating in jurisdictions outside India, will need to implement efficient geo-blocking technology and global norms of responsible gaming to prevent their services from being accessed within areas banned. There also needs to be international cooperation between regulators to develop an integrated framework for dealing with the difficulties presented by VPN use and enforcing online gaming regulations.

Is the Online Gaming Bill, 2025, when construed with the DPDP Act, sufficient to safeguard users’ constitutional right to privacy under Article 21 of the Indian Constitution (K.S. Puttaswamy v. Union of India), or is it in danger of overreach and regulatory fragmentation?

The K.S. Puttaswamy v. Union of India (2017) Supreme Court judgment sanctioned that the right to privacy is a constitutional right under Article 21 of the Constitution. The court held that any such state action infringing upon such a right must pass three tests: legality, necessity, and proportionality. Thus, while examining the Online Gaming Bill, 2025 and the DPDP Act, one has to ascertain whether their provisions satisfy such tests or unreasonably intrude into privacy.

DPDP Act establishes a statutory regime for data protection in India. It prescribes obligations for data fiduciaries — such as gaming platforms — to procure consent, provides notice, provides rights of access, rectification, and erasure of personal data, and governs cross-border transfers. These are substantial legislative protections to safeguard informational privacy under Article 21

[4]The DPDP Act requires processing of personal data to be for a particular lawful purpose and notice to be given. These elements conform with the proportionality requirement of Puttaswamy. The Act also offers procedural safeguards and outlines categories of processing and risk, thus planning to curb excesses.

[5]The Online Gaming Bill’s prohibition on real-money gaming, through prohibitions and sanctions, can be argued to be directed towards legitimate state aims: averting financial exploitation, safeguarding vulnerable groups (particularly children), avoiding fraud and gambling-addiction. State control in such areas has been sustained in the past as permissible under Article 21 (albeit subject to challenge). The Madras High Court in recent times upheld gambling restrictions such as the minors’ ban and time bans, saying the right to privacy is not absolute and public health/public order considerations justify regulation.

The The DPDP Act establishes a statutory paradigm for data protection in India. It enunciates duties for data fiduciaries — such as gaming platforms — to seek consent, guarantees notice, provides rights of access, correction, and erasure of personal data, and controls cross-border transfers. These are substantial legislative protections aimed at safeguarding informational privacy under Article 21.

The DPDP Act imposes that processing of personal data shall be for a predefined lawful purpose and notice shall be given. These are adopted in the proportionality requirement of Puttaswamy. The Act also prescribes procedural means and determines types of processing and risk, thus aiming to curb overreach.

The Online Gaming Bill’s real-money gaming restrictions, such as its prohibitions and fines, may be viewed to be directed at proper state purposes: avoiding financial exploitation, safeguarding vulnerable groups (particularly children), avoiding fraud and gambling-addiction. State control in these areas has been accepted in the past to be within Article 21 (albeit subject to judicial review). The Madras High Court in a recent judgment upheld gaming prohibitions such as minors’ prohibition and time prohibitions, holding the right of privacy is not absolute and public health/public order grounds vindicate regulation. In spite of these positives, there are various material risks and gaps that endanger proper protection for privacy and pose risks for regulatory overreach or fragmentation.

The DPDP Act provides broad exemptions under Section 17 to state instrumentalities on grounds like national security, friendly foreign relations, public order etc. These are extremely wide, and critics have raised that they could breach the proportionality test: permitting excessive government access to personal data in the absence of stringent safeguards.

The Rules of the Act (DPDP Rules) have been faulted by the civil society (e.g., Internet Freedom Foundation) as being imprecise: words such as “reasonable safeguards”, “appropriate measures”, or “necessary purposes” are employed but not precisely defined. Such imprecision could enable arbitrary exercise of power, which is in tension with Puttaswamy’s calls for narrowly drawn constraints.

The structural framework for enforcement (Data Protection Board, etc.) has been faulted as too dependent or ineffective. For instance, worries have been expressed regarding executive control over appointments, absence of judicial oversight over some data access or processing operations, and lack of effective or timely redress and review mechanisms.

The Bill prohibits all real-money gaming (even skill games) instead of making a distinction between games of skill versus chance. It has the potential to infringe upon the right to livelihood (part of Article 21 / Article 19(1)(g)) of professional gamers, and could be perceived as disproportionate if there are less prohibitory alternatives available (licenses, regulation instead of outright ban). Such a blanket ban can be argued by critics as potentially failing the proportionality test under Puttaswamy.

[6]Since the Gaming Bill governs economic activity, financial bets, and licenses, and the DPDP Act governs data, there is possibility of duplication and ambiguity. For example, stringent blocking / licensing under the Gaming Bill could encourage companies to gather more user information or impose stricter identification checks, which is a privacy risk. Conversely, loose data protection laws could enable state access in most situations under exemptions, compromising user trust.

Overall, while the DPDP Act and Online Gaming Bill do contain provisions aimed at safeguarding privacy and do tackle some of Puttaswamy’s tests of legality, necessity, and proportionality, there is very real risk of overregulation and regulatory dispersal. Some of the main issues are sweeping government exemptions, imprecise statutory/regulatory language, inadequate supervision, and disproportionate regulation (e.g., blanket prohibitions rather than finessed regulation).

Therefore, as drafted today, the laws partially safeguard privacy but fail to completely meet what Puttaswamy requires. There is a requirement for greater design in control, clearer definitions, judicial checks, and adherence to the least restrictive means to prevent privacy violations and facilitate constitutional validity.

What law and policy frameworks could India implement to align its online gaming regulation with global data protection norms, simplify compliance requirements, and enhance interoperability across borders while protecting the users?

India should take two major steps first will be ,  reform and harmonize domestic rules so they conform to global standards, and establish useful, cooperative mechanisms to facilitate compliant cross-border activity by gaming platforms.

[7]First, on domestic law and rulemaking: India needs more lucid, precise DPDP implementing rules and guidance that reflect internationally accepted safeguards. The DPDP Act presently establishes fundamental principles (consent, purpose limitation, rights of data subjects) but there are lacunae on cross-border adequacy, operational specificity, and wide exemptions that leave uncertainty for businesses and foreign partners. Tightening DPIA rules(  Data Protection Impact Assessment), making technical and organisational measures precise, and confining state exemptions would eliminate legal risk and make India a more reliable partner for the EU and other regulators The Data Protection Board and every gaming regulator should be endowed with clear powers, transparent rulemaking, and robust appeals/judicial review. Avoiding duplicative enforcement (multiple regulators with conflicting powers) reduces fragmentation that increases compliance cost and litigation risk. India should publish authoritative guidance (FAQ, DPIA templates, parental-consent process) specifically for gaming businesses to address particular issues such as children’s data, behavioural profiling for monetisation within the game, and anti-fraud .India can manage VPN usage and rule-violation intelligently and equitably. Extremely rigorous measures such as prohibiting VPNs outright or compelling all VPNs to retain detailed user information can damage individuals’ privacy and prompt them to lose faith in the system. Rather, the government can:

(a) Request game platforms to employ simple instruments to bar players from regions where the games are prohibited and verify the location genuinely.

(b) Establish clear guidelines on how to warn off or block unlicensed gaming services.

(c) Collaborate with other nations’ authorities to take down illicit games, exchange blacklists, and act against recidivists.

Meanwhile, VPNs and encryption must continue to be permitted for secure and legitimate applications. Regulations cannot become so broad as to jeopardize individuals’ right to privacy.

The industry itself must also establish some good-practice guidelines. These can range from age verification, safer play elements, equitable adverts, and obtaining as little personal data as possible. Independent audits or monitoring can help ensure companies do live up to these undertakings, and sanctions should be used if they do not. Public education through government-private business cooperation can also help with educating people about secure gaming, creating better parental controls, and running secure-gaming labs for reducing harms and the need for stringent regulation.

Lastly, the transition to new rules must be gradual and planned. The government should provide explicit timelines, user-friendly guides, and even tax or research incentives to assist gaming platforms in changing their systems (e.g., shifting to esports, skill-based tournaments, or advertising models). This gradual process prevents shock that chases away investors or leads to job losses. It also enables companies to plan more effectively and regain trust.

CRITICAL ANALYSIS

The recent prohibition of real-money gaming under India’s Online Gaming Bill, 2025 has set a hotly debated issue ablaze. It has nothing to do with games of skill or gambling. It is about controlling the fast-growing digital economy without damaging privacy, innovation, or international competitiveness. Three key tensions define the argument: privacy against enforcement, innovation against restriction, and domestic versus international norms. The government’s agenda is clear: stem gambling addiction, protect children, and eliminate money laundering. In order to that, the Bill and attendant rules require blocking unlicensed apps, strict geolocation verification, and Know-Your-Customer (KYC) authentication. These same measures, however, imply gathering sensitive information—IDs, addresses, financial information, device locations—and storing it for years in many cases. This goes against India’s Digital Personal Data Protection Act (DPDP), 2023, that mandates purpose limitation and data minimisation. Practically speaking, sites now over-collect data to play safe from fines. This expands state surveillance powers and increases the potential for breaches. As legal academic Vrinda Bhandari has pointed out in the Indian Express (2024), “broad exemptions without oversight” leave privacy rights vulnerable. The question is whether such intrusive surveillance is actually necessary in order to get enforcement, or if less intensive privacy-respecting solutions would be as effective.India created a successful skill-gaming and fantasy sports ecosystem between 2015 and 2023. Makers of these games like MPL, Dream11, Nazara and Head Digital Works received investment from Sequoia, Tiger Global, and international gaming companies. As per the ban, MPL has let go of around 300 of its 500 Indian employees (India Today, Aug 2025), Head Digital Works has dismissed approximately 500 employees (Moneycontrol, Sept 2025), and Gameskraft has let go of approximately 120 employees (Business Standard, Sept 2025). In total, that works out to around 1,300–1,400 employees laid off in a span of a few months. Flutter, the owner of Junglee, has threatened to lose USD 200 million in revenue from India (Reuters, Aug 2025). This illustrates the economic price of a blanket ban. More permissive models—licensing, age-restriction, stakes limits—might have safeguarded users while keeping companies and jobs intact. And it poses the broader question of whether we are protecting citizens from harm or merely shoving them onto unregulated offshore platforms that provide zero protection.India’s strategy will also need to sit within the international privacy and gambling regulatory framework. Under the EU’s General Data Protection Regulation (GDPR), data minimisation and severe retention restrictions are applicable even to gambling operators, and state exemptions are strictly limited. The UK Gambling Commission demands age and affordability checks but restricts intrusive profiling and demands encryption. Singapore’s Remote Gambling Act denies access to unlicensed operators but is consistent with its Personal Data Protection Act, having transparent data-handling provisions and cross-border transfer channels. India, by contrast, has broad government exemptions under the DPDP Act and no adequacy frameworks for data flows. This raises compliance costs and deters global firms, which must adapt to conflicting requirements.Two key assumptions underpin the current approach. First, that banning real-money gaming will protect users. Yet evidence from Europe and the US shows that strict bans tend to push users to black markets (Reuters, Aug 2025). Second, that KYC duties do not compromise privacy. In practice, KYC may be extremely invasive, particularly if operators hold entire documents rather than minimal tokens or hashes. Privacy threats increase where such sensitive information are kept for extended durations or insecurely stored. KYC may also discourage involvement in legitimate non-monetary games or ban users lacking common identity documents. VPN infiltration provides an easy indicator of enforcement boundaries. Reports put the use of VPNs by Indians at 43% or an estimated 600 million people, perhaps reaching 700 million by 2026 (Grab On, 2025). This defeats geo-blocking and indicates how simple it is for users to circumvent bans. Loss of jobs, as mentioned earlier, amounts to 1,300–1,400 redundancies. Investment flight comes in the shape of Flutter and other companies reducing their India budgets. These statistics indicate that the price tag on a blanket ban is tangible and quantifiable.Many gaps exist. The first is broad state exemptions under the DPDP Act, which can be triggered without judicial oversight or independent review. The second is a weakened Data Protection Board, which is inadequately staffed and less independent than EU regulators. The third is ambiguous liability for VPN circumvention: it is not clear whether it is the user’s or platform’s liability if a blocked game is accessed using a VPN. The fourth is not providing any transition support to impacted workers or new businesses. A more balanced solution is available. Rather than a total ban, India might establish phased licensing of real-money games with rigorous age checks, spending limits and harm tracking. Current platforms might be allowed six to twelve months to comply, which would keep tax revenues and jobs in place while improving consumer protection. State exemptions under the DPDP Act may be restricted through independent or judicial approval and transparency reporting every time an exemption is applied. KYC may be re-designed as privacy-preserving, for instance through the use of age-verification tokens or hashes rather than the storage of full IDs, and through pseudonymous play in non-monetary games. Transparent rules of liability could be made regarding VPN evasion, defining good-faith geo-blocking by platforms and what notice needs to be provided to users, and safe Harbor where applicable if platforms abide. The Data Protection Board could be beefed up with additional staff, technical expertise and independent appointments.

India too should establish a cross-border data transfer framework—like Standard Contractual Clauses—and negotiate an EU adequacy decision. These would reduce compliance hurdles for Indian companies and facilitate easier foreign investment attraction. Transparency can be enhanced by mandating large gaming platforms to disclose yearly reports on blocking measures, data requests and data protection impact assessments, with independent audits to promote trust. Government assistance could lastly be provided to laid-off workers, through tax credits, retraining grants and startup support. This would moderate the impact of the regulatory change and demonstrate that the state assumes responsibility for transition costs.

CONCLUSION AND SUGGESTIONS

Internet gaming web sites celebrity endorsements (particularly real-money or high-stakes games) should be eliminated. Popular personalities have massive power over vulnerable groups such as children and can become a source of normalisation or glorification of harmful gaming behaviour. India has the potential to borrow a code such as the Advertising Standards Council of India (ASCI) guidelines to gambling and betting advertisements with the help of legislation. This should:Ban Celebrities should not advertise real-money or probability games, particularly where money changes are involved, or loot boxes are involved.

Paste demand warnings and risk warnings on all gaming advertisements, stating that loss of finances and data gathering are pitfalls of using it.

The regulators, civil society and gaming platforms should embark on a sustained awareness campaigns to educate the users about their rights and responsibilities. Terms and Conditions (T&Cs), privacy policies, and consent forms should be highly encouraged to be read and understood by the users before signing up and transacting financial transactions. In order to do this possible:

Obtain key-facts or privacy nutrition labels that give an overview of the important aspects of T&Cs in simple terms. Give automatic in-app notifications or dashboard warning of permission, budget constraints, and data-sharing practices. Introduce cooling-off periods and convenient self-exclusion options allowing users to exit/quit games safely. Financial penalties on misleading or non-compliant advertising and endorsers ought to be held jointly and severally liable to misrepresentative or exaggerating statements. Platforms must be encouraged to adopt privacy enhancing technology -age-verification tokens, low-KYC data, encryption and anonymisation, to advance regulatory objectives without excessive gathering of sensitive information. The government can offer compliance sandboxes to test out such initiatives. Laws and regulations should unmistakably outline the respective roles of platforms and users. Good faith sites that have effective geo-blocking and age-checking in place should enjoy safe-harbour protection; users who deliberately circumvent local restrictions must be made aware of the legal consequences in plain English. Any gambling regulator and the Data Protection Board must be adequately funded and independent, including with clear appointments and judicial review of their power. India must also conclude international data-transfer accords and mutually beneficial takedown processes with other governments to reduce compliance hassle and increase enforcement consistency.India should not have outright prohibitions, but should implement gradual licensings, spending caps, and harm-tracing. This allows firms a time to make the transition, protects jobs and creates a continuous investment. The government can facilitate this by offering re-training or by the tax rebate on innovation to the affected workers.

REFERENCES

https://prsindia.org/files/bills_acts/bills_parliament/2025/Bill_Text-Online_Gaming_Bill_2025.pdf

https://www.meity.gov.in/static/uploads/2024/06/2bf1f0e9f04e6fb4f8fef35e82c42aa5.pdf

https://link.springer.com/article/10.1007/s42979-025-04269-7?utm_

https://www.scconline.com/blog/post/2025/09/25/rethinking-online-gaming-regulation-india/amp/?utm_source

https://www.mondaq.com/india/gaming/1650648/the-state-reasonably-controls-the-apps-madras-hc-upholds-real-money-gaming-restriction?utm_source

https://timesofindia.indiatimes.com/business/india-business/online-gaming-bill-2025-gaming-regulation-shake-up-puts-billions-in-vc-investment-at-risk-investors-to-figure-out-what-can-be-done-next/articleshow/123500416.cms?utm_source

[1] https://prsindia.org/files/bills_acts/bills_parliament/2025/Bill_Text-Online_Gaming_Bill_2025.pdf

[2] https://www.meity.gov.in/static/uploads/2024/06/2bf1f0e9f04e6fb4f8fef35e82c42aa5.pdf

[3] https://timesofindia.indiatimes.com/business/india-business/online-gaming-bill-2025-gaming-regulation-shake-up-puts-billions-in-vc-investment-at-risk-investors-to-figure-out-what-can-be-done-next/articleshow/123500416.cms?utm_source

[4] https://www.juwiss.de/32-2025/?utm

[5] https://www.mondaq.com/india/gaming/1650648/the-state-reasonably-controls-the-apps-madras-hc-upholds-real-money-gaming-restriction?utm_source

[6] https://www.scconline.com/blog/post/2025/09/25/rethinking-online-gaming-regulation-india/amp/?utm_source

[7] https://link.springer.com/article/10.1007/s42979-025-04269-7?utm_

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CHALLENGES AND OPPORTUNITIES: HARMONIZING THE COMMERCIAL COURTS ACT AND MEDIATION ACT, 2023

by with No Comment VOLUME 1 ,ISSUE 1.

AUTHOR : Vineet Seervin / Law Student / BA LLB(Hons.)/ Third Year/ SVKM’s Narsee Monjee Institute of Management Studies, School of Law, Bengaluru

 

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ABSTRACT

Understanding the intersection of mandatory pre-litigation mediation through Section 12A of the Commercial Courts Act, 2015, and the philosophical underpinnings of agreement in the Mediation Act, 2023, creates one of the most stimulating intellectual tensions in modern Indian Law surrounding dispute resolution. In 2018, when the Indian Parliament introduced pre-institutional mediation, which was implemented, requiring parties to mediate before filing a commercial suit, there was a significant shift in court procedures. The purpose of this necessitating mediation was to reduce the backlog of cases in the courts and to promote settlement between the parties. In 2023, with the passage of the Mediation Act, a legislative framework for mediation was established. The foundation of this legislation is the inherent position that mediation is and should remain a voluntary process.

These two varying frameworks create a conflict with several critical issues. Does mandatory mediation pre-litigation create a conflict with the voluntary basis for mediation in the Mediation Act of 2023? What statutory interpretation have the courts given to Section 12A? What are the unique structural challenges that continue to hinder the effectiveness of MPIM? How do we bring the two frameworks together? Using a doctrinal analysis of primary legislation, cases from the Supreme Court, and comparative law, this article will attempt to answer each of these questions. Ultimately, we conclude that under the legal rationale for the statutory provisions, the two statutes are able to co-exist with the caveat that there are both procedural and institutional reforms necessary to allow those statutes to exist in a complementary manner.

Keywords: Pre-litigation mediation, Commercial Courts Act, Mediation Act 2023, Section 12A, Voluntary mediation, Mandatory mediation, Party autonomy, Dispute resolution.

I. INTRODUCTION

The way disputes are resolved in India is changing. There has been such an increase in the number of cases in court (over 50 million cases pending) that parties are being pushed by legislators and courts to stop looking for ways to resolve their disputes through adversarial litigation (going to court) and to consider ways of resolving their disputes through consensual resolution (e.g., mediation). For many years, mediation has been a very little-used way of resolving disputes, but in recent times it has become a way in which many parties are resolving their disputes.

The introduction of the Commercial Courts Act in 2015 (amended 2018) required parties to use a mediation process before filing a lawsuit in a Commercial Court, as set out in Section 12A. Parties must use mediation before they can go to the Commercial Court unless they are seeking to have the Court order interim relief. The Commercial Courts Act is a creative way to divert parties that have a Commercial dispute into mediation prior to them going to the Commercial Court to resolve their dispute.

In addition to the Commercial Courts Act, the Mediation Act, 2023, is the first stand-alone legislation addressing mediation in India. Section 6 of the Mediation Act has a provision where, if a party wishes to engage in Mediation they may withdraw from the Mediation process at any time without affecting their legal rights. This is the philosophical basis of the Act and one that has been adopted by many other countries when developing their mediation laws. Mediation is a party-centred process.

This paper explores the conflict created by the contrasting statutory frameworks of mandatory participation under s. 12A [1] and voluntary participation under the Mediation Act. [2] To assist with this, four separate research objectives were used to answer the above questions and are addressed in each section of the paper.

II. STATEMENT OF PROBLEM

Statutory interpretation, process design, and constitutional values intersect to produce research gaps within this study area. While the Commercial Courts Act’s section 12A mandates that parties must first attempt to mediate before commencing litigation, the Mediation Act of 2023 establishes that voluntary consent is the basis upon which mediation can take place. Consequently, Indian courts now struggle with the inconsistency between section 12A and the 2023 mediation act; for example, the Supreme Court’s decision in Patil Automation Pvt Ltd v. Rakheja Engineers Pvt Ltd deemed section 12A to be a jurisdictional restriction on a party’s ability to file a lawsuit without first having attempted mediation. [3]

However, the Mediation Act of 2023 provides definitions regarding the mediation process itself, such as confidentiality, mediator behaviour, and enforcement of settlement agreements.[4], and reiterates the importance of parties’ voluntary participation in mediation. Thus, several practical dilemmas arise from the tension produced by these two statutes: can a legal requirement that a party participate in mediation solely as a condition precedent to being able to commence a legal proceeding be considered true mediation, given that the party would not otherwise voluntarily do so?, what do courts’ interpretations of section 12A demonstrate about how MPIM will operate in practice?, what with respect to systemic deficiencies exist that may impede MPIMS effectiveness?. And will both statutes operate together without compromising the fundamental purpose of each?

Legal scholars and courts have failed to properly answer these questions. This paper will provide this doctrinal analysis in an organised manner applied to each of the four research questions presented below.

III. LITERATURE REVIEW

The relationship between the mandatory pre-institution mediation (PIM) process outlined in Section 12A of the Commercial Courts Act, 2015, and the voluntary ethos established under the Mediation Act, 2023, is a major subject of inquiry within the Indian dispute resolution literature. This review of existing literature combines doctrinal, empirical, and comparative research to identify methods for harmonising these statutory frameworks without compromising procedural justice, as well as to ascertain whether compelling parties to mediate is contrary to the nature of mediation itself.[5]

Individuals and scholars refer to the “Voluntariness Paradox” as a key area of contention, which is demonstrated through scholars’ arguments that distinguish between “mandatory attendance” and “voluntary settlement.” Some scholars argue that the procedural requirements of Section 12A to compel parties to attend mediation do not compromise the integrity of the mediation process if the parties have complete autonomy as to the outcome of the process. Others argue that obligations of participation in the process jeopardise the voluntary, consensual nature of mediation. For example, Laila Ollapally concludes that the term “mandatory mediation” is inappropriate and that “mandatory pre-litigation information sessions” should be used instead of “mandatory mediation” to ensure that the virtues of voluntariness are maintained when introducing parties to mediation as a dispute resolution method. [6] Furthermore, corporate law scholars such as Umakanth Varottil have expressed concerns that, without no strong and specialized infrastructure, the requirement for PIM will create a “procedural gatekeeper” for mediation by creating additional delays to obtain substantive justice and by creating shifted costs to the parties to the litigation, who will incur increased costs in obtaining mediation ultimately create an increased burden on litigants.[7]

Jurisprudential Evolution

The Supreme Court’s decision in Patil Automation Pvt Ltd v Rakheja Engineers Pvt Ltd (2022) has covered its status as the lead case when discussing the mandatory jurisdictional requirement of complying with section 12A. For many commentators, this ruling satisfied the intent of the original legislation to reduce congestion in the commercial courts and provided effective steps for affected parties to recover damages from defendants who were infringing their IP rights without having to go through mediation. The subsequent line of case law has, however, drawn considerable criticism from commentators, as, for instance, the Delhi High Court’s decision in Aditya Birla Fashion v Saroj Tandon (2024) mandated that the parties would have to go through mediation even though they did so under duress.[8]

The literature also examines the different approaches taken by the High Courts to determining whether an urgent interim relief application can be justified under the exception for ‘emergency relief’, with commentary pointing to conflicting methodologies from a simple “Pleadings-Based” approach to a more elaborate “Justifying-Based” approach. [9] The current discourse has focused on a ruling of the Supreme Court affecting the Novenco Building decision in relation to the Supreme Court ruling, which clarified that ongoing damage due to IP infringement creates ongoing damages, which justifies the need for urgent relief, such that the relief can be granted outside of the mandatory PIM requirement.[10]

Empirical Realities: The “Non-Starter” Epidemic

Research has shown numerous real-world examples of how statutory laws do not match their intended purpose. According to data compiled by the Ministry of Law and Justice (2025), there is an alarming level of “non-starter” issues relating to the implementation of the law throughout the country.

According to data from the Ministry of Law & Justice 2022–2023 reporting period indicates that there was a gradual increase in total applications & non-starters, whilst at the same time there was also a gradual decrease in the number of settlements achieved. In financial year 2022-23, there were 46,412 applications, of which 41,898 were not started & only 1,449 were settled. Then in financial year 2023-24, total applications increased again to 51,019; there were also more non-starters to 47,185; however, there was another decrease in settled to just 1,139. Lastly, the financial year 2024-25 had the highest level of activity with 59,568 total applications, of which 52,730 were not started, but there was again another large decrease in achieving settlement at just 877.

Much of the literature regarding these problems points to a large functional disparity between the institutions responsible for administering Section 12A mediation (i.e., the District Legal Services Authorities [DLSAs]) and the unique, specialised experience and knowledge necessary to successfully manage complex corporate disputes.[11]

Harmonisation and Comparative Insights

To align both of these institutional frameworks, legal scholars are advocating a composite interpretation of the statutory provisions, which employs the use of Section 4(2) of the 2023 Mediation Act as a savings provision for both the Commercial Courts Act, which requires parties to refer their cases to mediation; and the Mediation Act, which provides the ethical standards of conduct during the mediation process and provides for enforcement of the parties’ final resolution. In addition to this, scholars are exploring the potential for using comparative law to support reform efforts. The 2023 United Kingdom decision in Churchill v Merthyr Tydfil has been cited by a growing number of legal scholars in support of the compulsory mediation framework existing in India. [12] Additionally, scholars have recently begun to advocate for allowing Indian courts to implement the “carrots and sticks” method of imposing strict monetary penalties for those who engage in bad-faith participation in mandatory mediation proceedings, to deter frivolous participation while still ensuring that the parties meaningfully cooperate to resolve their differences.[13]

Judicial Consideration of CPC Section 89 and Traditional Mediation Methods

Justice Indu Malhotra’s book, O.P. Malhotra on Law and the Practice of Arbitration and Conciliation (3rd ed., Thomson Reuters, 2014), provides an authoritative overview of how Indian courts have evolved in their approach to referring disputes to alternative dispute resolution (ADR). This work also discusses the Supreme Court’s landmark decision in Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd. [14]Regarding how the referral process under CPC Section 89 has been streamlined, how parties should be given autonomy when they are referred to ADR by the court, and how these principles apply to the second question of the research paper regarding the judiciary’s interpretation of mandatory mediation provisions. As such, the interpretive benchmark established through Afcons must be used to evaluate jurisprudence relating to CPC Section 12A. Malhotra provides a reliable mixture of Supreme Court case law and comparative materials from within the Commonwealth.

Law Commission of India’s Report on Section 89 of the CPC 

In a 2011 law commission report (LCR 238), there were many recommendations to improve upon section 89 of the Code of Civil Procedure (CPC). [15] These included enhancing clarity around judicial powers relative to Alternative Dispute Resolution (ADR) methods, as well as instating pre-litigation mediation. The law commission has identified various conceptual defects with the then-current framework, whereby mediation, conciliation, and judicial settlement are being confused with one another. This report serves to provide critical information regarding two of four distinct research questions, i.e., judicial interpretation and harmonisation, and it indicates to parliament what was originally intended with respect to pre-litigation mediation requirements and warns against provisions that would violate the concept of voluntariness. The Commission compiled both quantitative and qualitative data from High and subordinate courts across the jurisdiction to validate its conclusions as to the reliability of the report.

IV. RESEARCH QUESTIONS

The objective of this study is to examine the following four questions:

  1. Does Section 12A of the Commercial Courts Act, 2015 require mandatory pre-litigation mediation for all commercial disputes and if not, why?
  2. What have Indian Courts interpreted to be the meaning of mandatory pre-litigation mediation under Section 12A, and how does this understanding inform how parties will use mediation to settle their disputes?
  3. What systemic issues delay the successful implementation of pre-litigation mediation under Indian law?
  4. How can the pre-litigation mediation statutory scheme established by the Commercial Courts Act be harmonised with the provisions of the Mediations Act, 2023, to enhance the effectiveness of both laws?

V. RESEARCH METHODOLOGY

The study will take a doctrinal approach towards the four research questions with an analysis of the primary sources of law (e.g., statutes, constitutions, and case law) and the secondary sources of law (e.g., academic commentaries, law commission reports, and international literature).

Primary sources of law analysed include The Commercial Courts Act (2015) (as amended 2018), The Mediation Act (2023), The Code of Civil Procedure (1908), notably s. 89 & O. 10, and relevant precedential Supreme and High Court case law. Secondary materials that were used included articles published in peer-reviewed journals, law commission reports, policy documents, and case comparative literature from the UK, Singapore and the EU, which have established systems of compulsory mediation.

A doctrinal methodology is appropriate for this enquiry because the ultimate objective is a normative legal question concerning how to interpret and reconcile two statutes rather than conducting empirical analyses of what litigants do. Therefore, this research does not include surveying or interviewing; rather, the research builds an interpretive argument based upon legal texts, judicial reasoning and academic commentary. Each section in the main body of the paper addresses one of the four research questions, and each section contains a statement of findings at the conclusion of that section.

VI. ANALYSIS

6.1 Research Question 1: Is Section 12A Consistent with the Voluntary Ethos of the Mediation Act, 2023?

6.1.1 The Architecture of Section 12A

Section 12A (Mandatory Pre-Institution Mediation) stipulates that a plaintiff must exhaust all pre-institution mediation avenues before commencing an action for a commercial suit with a value equal to or greater than the amount specified on the court’s approved list, unless an immediate interim remedy is sought. [16] This provision is absolute and has a jurisdictional basis; a suit filed in violation of Section 12A is subject to being returned or dismissed at the threshold.

In contrast, at the initial level, it appears that the requirement for mandatory attendance at mediation creates a conflict with the Mediation Act 2023, in that the foundation upon which the Mediation Act stands is based on the concept of voluntary participation. As stated in Section 5 of the Mediation Act, the process of mediation is a voluntary process, while Section 6 of the Mediation Act provides that parties have the right to withdraw from the mediation process at any time without being prejudiced with respect to their legal rights.

6.1.2 Mandatory Referral, Voluntary Outcome – Reconciling the Discrepancy

The apparent conflict between the two pieces of legislation is ultimately resolved by properly identifying the level at which the concept of voluntariness applies. Section 12A requires attendance at mediation, not agreement through mediation; and the Mediation Act, 2023, safeguards the concept of voluntariness of outcome, not of referral. Although they both relate to mediation, they apply to different aspects of the process and are not, in principle, inconsistent.

Section 4(2) of the Mediation Act preserves the applicability of other legislation providing for mediation as such; it is clear that the statute was meant to include current mediation statutes. [17]including s.12A, while enacting it. Review those statutes together and determine how they interact with one another: Commercial Court’s Statute mandates the MPIM process, which will govern the way this referral occurs, while the Mediation Act governs parties when they get to the table in terms of quality, conduct and enforceability of that process.

The Mediation Directive (2008/52/EC) from the European Union and the Mediation Framework established in Singapore both create statutory authority for making referrals to mediation mandatory, but keep settlement voluntary. In both instances, there is a clear recognition of the difference between a mandatory process with a voluntary outcome, and therefore, there is clarity in comparing what has been proposed here with the other two models.

Thus, even though the MPIM is a mandatory process, it does not violate the voluntary principles of the Mediation Act, 2023, because it is understood as requiring attendance (not acquiescing to agreement). Furthermore, a party is fully free to leave the pre-litigation mediation having settled nothing whatsoever after obtaining its non-settlement report and pursuing litigation.

Finding relating to Research Question 1: The requirement for mandatory attendance under Section 12A does not conflict with the voluntary nature of mediation established by the Mediation Act, 2023. Two acts are in place; one sets out the requirement for a mediation process to begin, and the other provides for the process’s resultant outcome being voluntary. Thus, the two acts can be worked together positively and in a way that is permitted by Section 4(2) of the Mediation Act.

6.2 Research Question 2: How Have Indian Courts Interpreted Section 12A, and What Does This Jurisprudence Reveal?

6.2.1 The Mandatory Character: Patil Automation

The Supreme Court’s judgment in Patil Automation Pvt Ltd v Rakheja Engineers Pvt Ltd. held that Section 12A of the Code is mandatory. If a plaint does not comply with this requirement, then it will not be maintainable. This section was given prospective effect and thus will apply to all commercial suits (other than those with interim relief) filed on or after 20th August 2022 if they are preceded by documentation showing that there has been an attempt to mediate the dispute in question before engaging the litigation process.

The court also reasoned that legislative intent was the basis for this ruling, as Section 12A was added to reduce the burden on commercial courts through the diversion of disputes to mediation rather than using the court system to resolve these disputes. If Section 12A were treated as directory rather than mandatory, then the purpose of this amendment would be defeated.

6.2.2 The Reach of the Jurisdictional Bar

Several subsequent decisions from high courts have scrutinised how far they can go from the criteria established in the Patil Automation ruling. The earlier decision of the Supreme Court in M.R. Krishna Murthi v. The New India Assurance Company Limited [18]distinguished situations where plaintiffs were able to prove that the opposing party had rejected participation in a micro-mediate, or where trying mediation was not an option due to the absence of appropriate facilities. In other words, the bar will not be applied strictly if a plaintiff has demonstrated that the other party acted unreasonably regarding their offer to micro-mediate, or has participated in a similar unreasonable manner.

In Yamini Jippu and Arun Shankar Jippu (1930) 5 M.L.J. 167, the Madras High Court, on appeal, held that a Mediation(PIM) should be done under section 12A of the Mediation Act 2023 as per its spirit. They conclude that if a plaintiff has made extensive efforts to start a mediation and has met with resistance from the other party, the court cannot use non-compliance to deny the plaintiff their recovery as a remedy.

6.2.3 What the Jurisprudence Reveals

In the case of Vikram Bakshi v Sonia Khosla, the current legal landscape has provided a large degree of judicial flexibility while simultaneously requiring that litigants comply with MPIM requirements (in terms of the disputes) once an opportunity to participate has been presented.[19]

Recent decisions by Indian courts have seen them view the MPIM process as an important substantive means of resolving disputes between parties rather than viewing it merely as an opportunity for “procedural gaming.” However, there are instances where courts have refused to allow the MPIM process to serve as a vehicle for litigants to ambush each other procedurally.

As discussed above, an important gap exists in the current system because Legal Services Authorities (which administer MPIM) are often slow, under-resourced, and not sufficiently familiar with commercial disputes. Consequently, mandatory MPIM processes often occur in name only; if a party engages in a referral to MPIM, they are frequently issued a non-settlement certificate by the Authority after engaging in very limited dialogue with each other before filing their suit.

Conclusion on Research Question 2 – Indian courts treat Section 12A as a mandatorily-imposed condition precedent that carries a jurisdictional component to it, but they also apply the Section purposively to prevent procedural injustice. While the underlying legal framework regarding MPIM is good, the overall institutional framework in place to administer MPIM is inadequate to achieve the MPIM’s goals for resolving disputes between parties.

6.3 Research Question 3: What Are the Structural Challenges Limiting Pre-Litigation Mediation’s Effectiveness?

6.3.1 Bad Faith and Nominal Participation

A significant weakness in the MPIM is the prevalence of simply nominal participation. Section 12A only requires mediation to be “attempted”, which means that a party has no intention to settle, could attend the mediation for a very short time, then wait for the Authority not to produce a report stating that they will not settle, and thereafter commence suit with the appearance of complying with the statute while completely undermining the statute’s purpose. Bad-faith participants operate in this way because neither the Commercial Courts Act nor the Mediation Act currently has any meaningful consequences for bad-faith participation during the MPIM stage.

While there is a provision in Section 26 of the Mediation Act 2023 that enables a mediator to terminate mediation where the parties are not participating in good faith, [20] That power is seldom exercised in the MPIM environment, where the presiding Authority is the Authority under the Legal Services Authorities Act, not a trained commercial mediator. Consequently, there is no mechanism for the commercial court to infer adversely or impose costs based upon a finding of a bad faith MPIM participant.

6.3.2 Institutional Mismatch

The MPIM process is routed through the Legal Service Authority. These agencies were created to provide free legal services to those who cannot afford them; these agencies are not designed, capable or have any relevant resources to facilitate professional commercial mediation. [21] In contrast to the MPIM process through the LSA, the 2023 Mediation Act envisions a specially constructed institutional infrastructure for mediation, i.e., the Mediation Council of India, accredited mediation service providers, and a directory of accredited mediators with speciality skills for various subjects. The current vehicle for MPIM vs. the process envisioned by the 2023 Mediation Act is incompatible.

The fallout of this incompatibility is real. LSA-administered mediation sessions are typically short, routine and predictable. Mediators generally lack any reasonable level of training in commercial disputes, negotiation of business term sheets or the laws of contract, intellectual property, or banking, the three major classes of types of commercial litigation. Therefore, people appearing at an MPIM mediation often have little to no confidence that an MPIM will create a beneficial outcome; therefore, they are disincentivised and will likely not participate in good faith.

6.3.3 Absence of a Robust Enforcement Culture

Although there can be uncertainty surrounding enforceability by parties about settlements produced by the MPIM under the established history and precedents of the open mediations process, the Mediation Act of 2023 goes a little way towards addressing that issue through Section 31’s express provisions for mediated settlement agreements to be enforced as decreed by the courts[22], as well as the fact that India’s involvement with the Singapore Convention on Mediation assists with respect to international commercial agreements[23]; however, the level of awareness by parties and their representatives regarding these provisions is still low, thus undermining any incentive that parties may have to genuinely invest in the MPIM process.

6.3.4 Limitations of time and location

The MPIM must take place within no longer than three months, and with the agreement of the parties, can be extended to five months. [24]Although this avoids MPIM being a potential barrier to accessing the courts indefinitely, it also puts pressure on the parties not to explore all possible settlement options through mediation because the parties will want to settle the dispute before they go to court. In addition to this, the infrastructure for mediation is disproportionately weighted towards the metropolitan centre, making it difficult for parties outside of the larger Tier II and Tier III cities to access the infrastructure necessary to commence an MPIM process.

Finding on the research question 3: The challenges faced by the MPIM process in pre-litigation mediation are fourfold, being.,  i) No deterrence mechanism for bad faith and nominal participation; ii) There is no institutional compatibility between the MPIM framework administered by the LSA and the commercially based mediation framework developed by the Mediation Act; iii) The parties do not know about the enforcement component of the Mediation Act; and iv) There are limitations imposed on time and location by the presence of only a limited number of mediation facilities.

6.4 Research Question 4: How Can the Two Frameworks Be Harmonised Without Undermining Either Statute?

6.4.1 A Composite Statutory Reading

The composite statutory method is the first step in harmonising: Section 12A of the Commercial Courts Act provides the mandatory trigger for referral, while the provisions of the Mediation Act (2023) on how mediation is conducted through the requirements governing the conduct of mediators (including confidentiality, good faith, and enforceability of settlements). The composite statutory reading provides for the intended operation of both statutes without either statute cannibalising the operation of the other statute. This composite statutory reading is made available textually by the savings clause in s 4(2) of the Mediation Act, but it is up to the courts and the executive to consistently apply the composite statutory reading.

6.4.2 Harmonised Reading: Constitutional Compatibility

The harmonised reading of the Commercial Courts Act and the Mediation Act also addresses the constitutional dimension. In Salem Advocate Bar Assn v Union of India[25]The Supreme Court held the constitutional validity of pre-litigation ADR mandates, stating that the right to access to the courts under Article 21 is not absolute and can be subject to proportionate procedural conditions. The MPIM circuit scheme (a time-limited, urgent relief carve-out scheme with guaranteed access to litigation for failure) satisfies the proportionality test. The addition of the prerequisite of voluntarily choosing mediation as a prerequisite for obtaining the right to mediation, as opposed to requiring that the outcome of mediation be mandatory (only the process of mediation is mandatory, not the outcome of mediation), supports, not detracts from, the constitutional validity of the MPIM scheme.

6.4.3 Courts should interpret legislation based on its purpose, which would help facilitate better cooperation between courts. When the court is faced with a procedural issue, the court could adopt a purposive interpretation as demonstrated in cases like Yamini Jippu by viewing s 12A not as a procedural hurdle, but rather seeing s 12A as being intended to give parties a genuine opportunity to resolve their disputes, and further, the Mediation Act creates a good faith standard, which should apply in all proceedings under the MPIM Act as well. Courts’ exercise of their inherent jurisdiction to impose costs where parties have bad faith participation would serve to indicate to parties that MPIM is not just a procedural exercise that can be carried out and then forgotten about.

6.4.4 The Way Forward: Institutional and Legislative Reform

While doctrinal harmonisation is definitely useful, it will not be sufficient to close the structural gap. Institutional and legislative reform also have to be made in order to close that gap completely. Functionally integrating the two statutes rather than merely coexisting can be accomplished through the following suggestions, which also form the basis for the recommendations made in this paper:

VII. CONCLUSION AND SUGGESTIONS

In this paper, we examined through four specific research questions the relationship between the mandatory pre-institutional mediation (PIM) regime established by Section 12A of the Commercial Courts Act, 2015 (CCA) and the voluntary mediation principles enshrined in the Mediation Act, 2023 (MA).

This paper demonstrates four findings. Firstly, the mandatory attendance required by Section 12A is not fundamentally incompatible with the voluntary ethos of the mediation process contained within the Mediation Act, because these two statutes operate at two different places in the mediation process; Section 12A is a precondition to initiating mediation, while the Mediation Act governs the outcomes of mediation. Secondly, the Indian courts have interpreted Section 12A as a mandatory condition precedent while still applying that requirement in a flexible purposive manner, demonstrating that while the legal framework is sound, the institutional mechanisms designed to implement it are not. Thirdly, there are four structural impediments to pre-litigation mediation in place today: bad faith participation, institutional mismatch, limited enforcement awareness, and geographic concentration. Fourthly, a composite statutory interpretation, purposive constitutional analysis, and the institutional reforms outlined below will create the necessary harmonisation of both statutes.

The suggestions listed below are a response to the structural issues related to the Research Questions 2, 3 and 4. They are structured around how to implement the harmonisation outlined by Research Question 1. Here are those suggestions:

  1. Firstly, Transfer of jurisdiction(Sec 12A) to Mediation Service Providers, it is suggested that the MPIM process out of Legal Services Authority(s) to accredited mediation service providers that fall under the Mediation Act 2023; the function of MPIM will be more appropriately aligned to the quality and competency standards of institutional vehicular path identified in the mediation Act, as it relates to the adjudication of complex commercial matters.
  2. Secondly, that commercial courts adjudicating on subsequent matters will have expressed powers, through Practice Directions, to impose costs against any party that has been found, through a proper process, to have participated in bad faith. The prescriptive framework is intended to create a strong deterrent against such actions and will not add any delay for these parties in the procedural layers of the legal framework.
  3. Thirdly, to provide automatic authentication of MPIM settlements pursuant to section 31 of the Mediation Act 2023, by way of rule or notification, will allow for automatic registration of MPIM Settlement Agreements under the Mediation Act, making them enforceable as court decrees without the necessity of further proceedings.
  4. To promote a skilled workforce prepared to use meaningful ways with pre-litigated mediation, the Bar Council of India and Universities must add compulsion to the training on commercial mediation in their curricula for legal education; therefore, adding modules about Commercial Mediation. Commercial Mediation training will include the MPIM framework created by the Bar Council and the Mediation Act enacted in 2023.
  5. It is important that the Mediation Council of India develop an oversight of MPIM under the Commercial Courts Act so that the Mediation Council of India can supervise MPIM to establish standards for the quality of the mediator, the accreditation of the mediator, and collect data needed for periodic legislative review.

In conclusion, a framework for compulsory pre-litigation mediation and an optional framework outlined in the Mediation Act of 2023 can exist as a unit. With the proper interpretation and institutional support, both frameworks exist to establish two pillars of a modern commercial alternative dispute resolution system that meet the needs of the parties involved. India has significant potential for the creation of commercial mediation because the legal infrastructure is established; the remaining component necessary for the success of commercial mediation will be the institutional commitment to provide statutory interpretations for the effective implementation of the Act’s provisions.

REFERENCES:

[1]  The Commercial Courts Act, 1949, § 12A, No. 4, Acts of Parliament, 2016 (India).

[2]  The Mediation Act, 2023, § 6, No. 32, Acts of Parliament, 2023 (India).

[3] Patil Automation Pvt Ltd v. Rakheja Engineers Pvt Ltd, (2022) 10 SCC 1.

[4] The Mediation Act, 2023, § 5, No. 32, Acts of Parliament, 2023 (India).

[5] Shirin Khajuria, Reimagining Justice Through Mediation – An analysis of The Mediation Act, 2023, LAW SCH. POL’Y REV. (Aug. 8, 2025), https://lawschoolpolicyreview.com/2025/08/08/reimagining-justice-through-mediation-an-analysis-of-the-mediation-act-2023/.

[6] Laila Ollapally, Mandatory pre-litigation mediation: A missed opportunity in the Mediation Bill, 2023?, BAR & BENCH, https://www.barandbench.com/columns/mandatory-pre-litigation-mediation-a-missed-opportunity. (last visited April 4, 2026).

[7] Sanjeev Sanyal & Apurv Kumar Mishra, Why Commercial Mediation Should be Voluntary (Econ. Advisory Council to the P.M., Working Paper No. 25, 2023), https://eacpm.gov.in/wp-content/uploads/2023/10/EACPM-WP25-Why-Commercial-Mediation-Should-be-Voluntary.pdf. (last visited April 4, 2026).

[8] Ambar Bhushan & Divyam Sharma, Forced mediation for counterclaims counterproductive, INDIA BUS. L.J., https://law.asia/counterclaims-forced-mediation/. (last visited April 4, 2026).

[9] Aravind Sundar, Determining Urgency in Compulsory Pre-Litigation Commercial Mediation, 13 NLIU L. REV. 49 (2024).

[10] Supreme Court Interprets Urgent Interim Relief Under Section 12A in Novenco IP Infringement Case, SUNS LEGAL, https://sunslegal.com/2025/11/05/supreme-court-interprets-urgent-interim-relief-under-section-12a-in-novenco-ip-infringement-case/. (last visited April 4, 2026).

[11] Shubhi, PIMS After Six Years: Law Ministry Updates Parliament on Commercial Disputes Settled Through Pre-Institution Mediation, SCC TIMES https://www.scconline.com/blog/post/2026/02/01/law-ministry-informs-parliament-about-pre-institution-mediation-commercial-courts/. (last visited April 4, 2026).

[12] James Levy & Louise Duffy, Mandate to Mediate: Compelled Alternative Dispute Resolution in England, ASHURST, https://www.ashurst.com/en/insights/mandate-to-mediate-compelled-alternative-dispute-resolution-in-england/. (last visited April 4, 2026).

[13] Anandi Katiyar, Meditari, Meditatio, Mediation: Tackling Non-Starter Cases—Lessons from the Italian Model, NICKELED & DIMED, https://nickledanddimed.com/2025/03/17/meditari-meditatio-mediation-tackling-non-starter-cases-lessons-from-the-italian-model/. (last visited April 4, 2026).

[14] Afcons Infrastructure Ltd v Cherian Varkey Construction Co (P) Ltd, (2010) 8 SCC 24.

[15] Law Comm’n, Gov’t of Ind., Report No. 238, Amendment of Section 89 of The Code of Civil Procedure 1908 And Allied Provisions, 12–14 (2011).

[16] The Commercial Courts Act, 1949, § 12A (1), No. 4, Acts of Parliament, 2016 (India).

[17] The Mediation Act, 2023, § 4 (2), No. 32, Acts of Parliament, 2023 (India).

[18] M.R. Krishna Murthi v The New India Assurance Co Ltd, (2020) 15 SCC 493.

[19] Vikram Bakshi v Sonia Khosla, (2014) 15 SCC 80.

[20] United Nations Convention on International Settlement Agreements Resulting from Mediation, G.A. Res. 73/198 (Dec. 20, 2018).

[21] The Mediation Act, 2023, § 27-30, No. 32, Acts of Parliament, 2023 (India).

[22] The Mediation Act, 2023, § 31, No. 32, Acts of Parliament, 2023 (India).

[23] Singapore Convention, Supra note 20.

[24] The Commercial Courts Act, 1949, § 12A (3), No. 4, Acts of Parliament, 2016 (India).

[25] Salem Advocate Bar Association v. Union of India, (2005) 6 SCC 344.

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DIGITAL FRONTLINES: INTERNATIONAL HUMANITARIAN LAW IN CYBER CONFLICTS _ (Short Article )

by with No Comment VOLUME 1 ,ISSUE 1.

 

AUTHOR: Kunwar Veer Vikram Pratap Singh /UGC NET QUALIFIED / LLM (Cyber Law and Cyber Crime Investigation) / /Uttar Pradesh State Institute of Forensic Science Affiliated to NFSU Gandhinagar.

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Abstract

“As warfare transcends the physical battlefield, the application of International Humanitarian Law (IHL) to cyber operations presents a profound legal paradox. This paper presents the existence of critical protection gaps to civilian data and dual-use infrastructure as a result of digital warfare as it is concluded that the principles of International Humanitarian Law (IHL) still apply to these scenarios, despite the fact that the doctrine was developed in times of kinetic conflict.  By analyzing the threshold of ‘armed attack’ and the principle of distinction in digital environments, the study identifies critical ‘protection gaps’ regarding civilian data and dual-use infrastructure. It concludes that while IHL principles are resilient, a ‘Digital Geneva Convention’ or a specialized Protocol is necessary to prevent unchecked state-sponsored digital aggression.”

Introduction: The Invisible Frontline

The old pattern of seeing war as a symphony of muscular power, and as a spectacle of the tumbling artillery, and the actual passage of men over material boundaries, has been essentially broken by the coming of the digital era. We are now on the threshold of a new era characterized by the Invisible Frontline with the theatre of conflict being no longer quantified by hectares of territory but by architecture of silicon and the flow of binary code[1]. This shift in the traditional to the cyber warfare is not only a technological innovation but a major ontological change in the way the international community conceptualizes the meaning of force, aggression and sovereignty[2]. The weapons in this invisible realm are not ballistic but algorithmic and geared towards breaching the vital organs of any state; its power grids, financial clearinghouses, water treatment plants and communication systems without even a single shot. The strategic appeal of cyber operations is the asymmetry of the operations and anonymity that cyber operations offer. It takes only one rogue actor or an agency sponsored by a state to disable the administrative apparatus of a superpower thousands of miles away in nearly no physical footprint and with a degree of plausible deniability that a conventional military attack would not have allowed. This produces a gray area of continual tension which lies between peace and open conflict, a grey area where laws of war are in practice always neglected, and yet never actually applied.

 The ‘Attack’ Threshold and Article 49

The legal core of cyber-hostilities is whether the threshold of the attack as embodied in Article 49 of Additional Protocol I to the Geneva Conventions is met.[3]  Conventionally, the expressions used in definition of humanitarian law (IHL) in relation to an attack include the idea that any act of violence against the opponent is to be classified as an attack (either offense or defense)[4].  It is a definition created in the middle of the 20th century, which assumes that the expression of force will be kinetic or physical, in terms of bullets, bombs or blades. Nevertheless, in the modern setting of cross-border cyber activities, this “physicalist-understanding provides a significant protection gap[5]. The discussion revolves around, whether the definition of violence is the tools used (the employment of kinetic energy) or the effects created (the damage caused). According to a strict, traditionalist interpretation, a cyber attack that destroys the social security database of a country, or shuts down its central bank would not be an attack since it is not a matter of releasing physical force. This paper argues that this very limited interpretation is becoming more and more outdated and does not meet the humanitarian aims of the Geneva Conventions that aim to protect civilian populations against the devastating consequences of conflicts.

The most recent common ground among liberal legal theorists and those writing the Tallinn Manual is the functioning damage or consequentialist approach[6]. Within this framework an act of a cyber operation is deemed to be an attack when it causes persons injury or death, or the destruction or the loss of functionality of objects[7]. The difficulty is there in the case of a massive disruption that a given operation can cause, unless it is physically disrupted. As an example, when malicious software-induced outage of a city power supply in the middle of a freezing winter scenario leads to indirect deaths by the inability of heating and medical devices to operate, the act is digital, yet the violence is real. The existing legal contradiction is in the gray area where the cyber activities remain short of physical destruction but lead to system breakdown. By placing a high bar in defining an attack, IHL unwillingly encourages states to employ sub-threshold cyber warfare with the understanding that the actions they take will not result in the application of the armed conflict law and the right to self-defense pursuant to Article 51 of the UN Charter[8].

Moreover, the threshold of attack is indissolubly connected with the security of the so-called civilian objects in Articles 52. When a digital operation is not a legal attack, it is possible that the restrictive law of proportionality and military necessity do not apply strictly, and important civilian data can be altered or deleted. This paper proposes an evolutionary reading of Article 49 that admits to digital presence a privileged interest. As the need to use data emerges as a necessity to survive, as a society, be it at the hospital registers or the distribution of food, the definition of violence should change to the functional as opposed to the kinetic. The inability to modernize the concept of an attack under Article 49 will push IHL into a sense of irrelevance, where the most common and destructive types of modern war conflicts will have no regulation whatsoever by the treaties made to humanize war. As such, the suitability of IHL hinges on its capability to bridge the physical-digital divide and offer a reliable barrier against any operation disrupting the fundamental balance of civilian life, on the basis of its size and its impact.

 The Principle of Distinction in a Wired World

The Principle of Distinction, a principle of the International Humanitarian Law (IHL) spelled out in Article 48 in Additional Protocol I, is the so-called cardinal rule of the rule of distinction, which prescribes that parties to a conflict should at all times differentiate between the civil population and combatants, and non civilians and military targets[9]. The difference between theatrical and domestic space in a conventional physical theater is ensured with respect to the visual elements: uniforms, marked vehicles, and physical segregation of barracks and residential areas. But in the 21 st century wired world, it is the pillar on which the whole world rests, and which possesses an existential crisis. Internet architecture is by its nature unconcerned with the status of internet users. [10]The digital and the physical worlds differ in the fact that unlike the physical world where a hospital and a munitions factory might be at different geographical coordinates, the digital world needs to use shared infrastructure. Civilian banking information, emergency communications, and even personal communications are sometimes on the same fiber optic cable, router, and satellite links as are used by military command-and-control networks. This dual-use character of the digital backbone renders it virtually unattainable to concentrate on a military goal in cyberspace without unintentionally attacking or disrupting non-military networks as well.

What makes the situation even more complicated is the fact that the divide between combatants and civilians is indistinct. When the kinetic era was in force, a civilian was able to become a combatant by picking up a rifle; when the cyber era is in play, a civilian programmer sitting in a high rise office will do a line of code that will cause the air defense system of an enemy to shut down. This emergence of the civilian hacker or even patriotic cyber-collective questions the legal immunity otherwise given to non-combatants. Even in the case of IHL, the civilians are not deprived of protection except that they direct participation in hostilities (DPH) ousman[11]. But what constitutes the direct involvement in a cross-border cyber-op is hotly disputed in terms of the law. Is it DPH to have given technical assistance to any state-operated hacking outfit[12]? Is the very act of writing a malware and not deploying it a loss of a protection? By using the civilian population as a human shield to perpetrate digital aggression through person fronting the civilian as proxies, states are actively undermining the Principle of Distinction when they engage civilian proxies to retain plausible deniability.

Additionally, the topic of targetability of data is also controversial. Although IHL safeguards the objects, it is not globally agreed on whether intangible information, like social security records, land titles, medical history, or others, would be considered as such an object. When data is not an object, then destruction or manipulation of it may not be technically in violation of the Principle of Distinction. This article uses hyper-connected society as the basis of arguing that data is a functional equivalent of a physical asset. Destroying a vaccination database of a country is as detrimental to the civilian population as destroying a real-life medical warehouse. A systems-based view of the interpretation of the Principle of Distinction should be used to ensure the sufficiency of IHL. The law should examine the civilian use of network, instead of just doing the physical nature of the target. In the absence of a serious re-characterization of civilian data as a safeguarded interest the wired world turns into theater of complete war, in which the civilian population is no longer bystander, but primary though unseen target. Failure to impose the distinction strictly in cyberspace does not only pose any threat to digital assets but the whole humanitarian system may be on the point of collapse as indiscriminate warfare under the name of technological necessity will be acceptable.

The Attribution Gap and Plausible Deniability

Attribution is the one problem that has proven to be the biggest impediment to the successful application of the International Humanitarian Law (IHL) in the electronic space. The presence of an aggressor in the conventional armed conflict is normally defined by physical presence – marking an aircraft, the position of a naval ship, or the recognizability of uniform of a soldier. When it comes to cross-border cyber warfare, the internet digital architecture has been purposely created in such a way that it enables anonymity. A mix of spoofing IP addresses, routing attacks across several layers of zombie servers in neutral third-party states and encryption allows an aggressor to initiate a crippling attack akin to the trail of forensic breadcrumbs that leaves the finger print on a dozen different directions. This Attribution Gap provides a strategic space in which technical capability to detect an attacker is far behind that of the attacker to cause harm[13]. As a practitioner of law, this leaves an evidentiary loophole in that, without any clear connection between a malicious code line and to a state that could be deemed sovereign, the laws of state responsibility cannot be invoked, and the victim state has no clear legal avenue to pursue or any lawful response.

This technical anonymity is used as a weapon of the doctrine of Plausible Deniability. States are growing to depend on the use of proxies- privatized military contractors and criminal syndicates; but also on the services of the so-called patriotic hacktivists groups- to conduct their own cyber activities[14]. In keeping some distance between these actors, states are able to profess ignorance of the existence of the hostile activity or inability to control the hostile activity within the borders of the states. According to the contemporary principle in international law as developed by the International Court of Justice (ICJ) in the Nicaragua case, a state can only be able to bear responsibility of the actions of individuals belonging to a particular community only when it exercises effective control over the activity. The effective control is almost impervious to prove in the cyber world. A state may fund, provide intelligence or even the malware itself to a proxy group but unless they can prove that that particular command to press the button was issued by the state, then the legal connection has not been proven. This enables aggressors to circumvent the bans (the UN Charter and the Geneva Conventions) and allows them to wage a type of warfare that is in essence lawless, yet not yet on the level of formal armed conflict.

Moreover, the concept of deterrence based on which the world order is founded is placed in danger by the so-called Attribution Gap. The risk-to-reward ratio of cyber aggression is very positive when an actor is familiar with the fact that he can act behind a digital veil. The present system of IHL is based on the name and shame phenomenon and the possibility of being prosecuted in the International Criminal Court (ICC)[15]. The Rome Statute however by the ICC must identify certain persons to find criminal liability.  In an international cyber attack in which the attacker is a black hat group or a government agency that is faceless, the chances of a successful prosecution are small. In this article, it is argued that the international community should change towards a Due Diligence standard in order to bridge this gap[16]. According to such an evolution, a state would be accountable, not only to the cyber-attacks that it triggers, but also to its inability to ensure that the territory and infrastructure does not fall into the hands of third parties and is used to inflict damage on other states. It is only when the evidentiary bar is lowered, that it may no longer be effective control but rather a test of the so called sovereign due diligence that the law can start to close the attribution gap to deprive digital aggressors of their plausible deniability camouflage.

Conclusion: Toward a Digital Protocol

Cross-border cyber warfare is currently in evolutionary stages, and it comes across as one of the most sensitive issues to the stability of the international legal order ever. To elaborate on this aspect of digital operations, as this article has seen, the main conflict is that there is no fit between the kinetic based drafting of the Geneva Conventions and the virtual, borderless existence of digital activities.

To sum up, the sufficiency of the available IHL is at the moment of the brink. Although this is an excellent scholarly guidebook on how to take the long walk, the Tallinn Manual does not give the binding power needed to limit the behavior of states in the flare of geopolitical competition. What is needed is a two pronged solution: an extreme interpretation of the current treaties by international courts and eventual codification of a special tool – a so-called Digital Protocol – that tackles the specific issues of attribution and plausible deniability. We should shift towards a sort of Sovereign Due Diligence model wherein states are assigned some responsibility on the bad code that flies out of their borders. Digital age is not to be one of wanton lawlessness; it is supposed to be the time when IHL demonstrates its universality. This can be accomplished by recalibrating our legal definitions in ways that safeguard the so-called digital integrity of the human person, that is, the rule of law can be an effective check on power, notwithstanding when that power is exercised with a keyboard as opposed to a cannon.

Bibliography:

[1] Michael N. Schmitt, Cyber Operations and the Jus ad Bellum Revisited, 56 Vill. L. Rev. 569 (2011).

[2] Marco Roscini, Cyber Operations and the Use of Force in International Law 45–47 (2014)

[3] Protocol I, supra note 5, art. 49.

[4] Id

[5] Michael N. Schmitt, Tallinn Manual on the International Law Applicable to Cyber Warfare 77–79 (2013).

[6] Id. At 78–80

[7] Id. At 79

[8] U.N. Charter art. 51.

[9] Protocol Additional to the Geneva Conventions of 12 August 1949, and Relating to the Protection of Victims of International Armed Conflicts (Protocol I) art. 48, June 8, 1977, 1125 U.N.T.S. 3.

[10] Yoram Dinstein, The Conduct of Hostilities Under the Law of International Armed Conflict 82–84 (3d ed. 2016).

[11] Protocol I, supra note 1, art. 51(3)

[12] Nils Melzer, Interpretive Guidance on the Notion of Direct Participation in Hostilities Under International

Humanitarian Law 46–49 (ICRC 2009).

[13] Michael N. Schmitt, Cyber Operations and Accountability, 42 Yale J. Int’l L. 1, 15–17 (2017).

[14] Military and Paramilitary Activities in and Against Nicaragua (Nicar. v. U.S.), 1986 I.C.J. 14, 115.

[15] Rome Statute of the International Criminal Court art. 25, July 17, 1998, 2187 U.N.T.S. 90.

[16] Michael N. Schmitt & Liis Vihul, Sovereignty in Cyberspace: Lex Lata and Lex Ferenda, 4 Tallinn Paper No. 2 (2014).

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

by with No Comment VOLUME 1 ,ISSUE 1.
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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.

  1. 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.

  1. 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),

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TRIPLE TALAQ: POST-ABLOTION LEGAL AND SOCIAL  IMPLICATIONS

by with No Comment VOLUME 1 ,ISSUE 1.
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JOINT JURIST

 

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

  1. 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. 22nd, 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
  1. 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
  1. 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 (3rd 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, 3rd 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

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

by with No Comment VOLUME 1 ,ISSUE 1.
3d logo journal

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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.