Transactions in Cryptocurrency
There is no law regulating Cryptocurrency In India. In an interesting case the Chief Metropolitan Magistrate , Tis Hazari court vide its order dated 1.7.2021 in Hitesh Bhatia vs. Mr. Kumar Vivekanand  bearing Case No. 3207/2020  has dealt with a matter involving money transactions in buying bitcoins whereby the bank account of the person who received the money was freezed, this led to a complaint before the CMM which resulted in a direction for  registration of FIR in a complaint filed under section 200 CrPC and application under 156(3) CrpC.

Brief Facts of the case -Cryptocurrency In India

Brief Facts of the aforementioned case is that the The accused purchased Bitcoins from the complainant ,Mr Hitesh Bhatia, from a virtual wallet from an online portal namely Binance.  Surprisingly on one occasion the account was frozen , the Accused although accepted that the money transferred was illegal being  a scam, however the accused refused to return the bitcoins to the complainant , in such a scenario the complainant approached the SHO and thereafter DCP  however no FIR was registered. Thereafter the Complainant approached the Ld Magistrates Court, Tiz Hazari , Delhi whereupon directions were issued to police to register an FIR and to investigate suspicious activities have been carried out by this portal called Binance.

Jurisdiction of Court-Cryptocurrency In India

In view of the provisions of Section 179, 180 and 182 of Cr.P.C  the Magistrate Court has jurisdiction to try the matter and  directions were passed in the matter.

Court Observations  dealing with Cryptocurrency In India

The observations of the court also followed with a few guidelines which are essential to find out about the source of money and establishing the identity of parties .The investigation order was to see whether there was fraud on the part of the accused and whether the complainant has acted legally and also the position irregularity  of the online portal Binance .The Hon’ble Court laid stress that such online currency transactions would be governed by the general laws  of India namely PMLA, IPC, FERA ,, NDPS Act, existing tax laws  and abide by RBI regulations of KYC(know your customer) CFT which is combating of funding of terrorism and AML  (Anti- Money laundering requirements).

KYC is very much the responsibility of the intermediary which is Binance in this case to ensure the identity of the parties.

The Hon’ble Court observed that  protection under Article 19 (i)(g) of the constitution of India  i.e. the freedom to practice any profession, or to carry on any occupation, trade or business can be availed although  there is no  specific law regulating or banning, or monopolising cryptocurrency, only legitimate trade through legitimate intermediaries.

The Ld Magistrate also was of the view that it is important and significant to investigate if there is any negligence or complicity on the part of the online portal Binance so as  to hide the proceeds of crime or to fund any illegal activities through cryptocurrency, etc. In such a scenario the Ld Magistrate Court has passed directions to the Police station concerned to investigate and register the complaint  under the relevant provisions of the Indian Penal Code, 1860, PMLA and FEMA. Significantly the  Court also held that the  registration of FIR does not mean that the Accused is to be automatically arrested.

Whether complainant himself was acting legally?

Hon’ble Supreme Court in the case of Internet and Mobile Association vs. Reserve Bank of India vide Judgment dated 04.03.2020  set aside a 2018 RBI Circular however it did not deal with the legality of virtual currencies , the Hon’ble Supreme Court   observed that access to banking is the equivalent of supply of oxygen in any modern economy, and the total denial of such access to the persons who carry on a trade that is not prohibited by law cannot be said to be a reasonable restriction, and is extremely disproportionate. The RBI issued another   Circular titled as ‘Customer Due diligence for transactions in virtual currencies’ which was in a form of advisory  to  banks and financial institutions not to rely upon the Circular dated 06.04.2018 which was earlier set aside by the Hon’ble Supreme Court.

It has further directed all entities regulated by the RBI to carry out customer due diligence process in line with regulations governing standards for policies such as ‘Know Your Customer’ (‘KYC’), ‘Anti-Money Laundering’ (‘AML’) and ‘Combating the Financing of Terrorism’ (‘CFT’). The transactions in virtual currencies must also carry out the obligations under the Prevention of Money Laundering Act, 2002 (‘PMLA’) in addition to ensuring compliance with relevant provisions under the Foreign Exchange Management Act, 1999 (‘FEMA’) for overseas remittances.

Hence, the Magistrate Court held that the transactions in cryptocurrency still have to comply with the general law in force in India and the RBI regulations regarding KYC, AML and CFT. It is the responsibility of an intermediary i.e., Binance to ensure adequate safeguards against activities such as ‘mixing’ and other random cryptocurrency exchanges, which change the identity of Bitcoins being held in a virtual wallet. The traceability of Bitcoin transactions may even be managed through the Blockchain Analysis, but establishing their connection with the malicious actors is a complex issue, in case the intermediary is not adhering to the KYC norms.

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Order 1 Rule 10 CPC

Order 1 Rule 10 CPC or  Code of Civil Procedure, 1908 (in short, ‘CPC’),  is a provision for adding or removing a party to a suit and the object is for proper adjudication of the dispute at hand. It is well settled law that plaintiff is the “dominus litus”  a  latin maxim which essentially means  “master of suit”. It is so because it is the plaintiff who approaches the court for his relief and so has an edge in proceedings as it is  believed that the plaintiffs have approached the court with clean hands. Therefore there is a huge burden on the Plaintiff to prove his case.

The Hon’ble Supreme Court in Sudhamayee Pattnaik and Others versus Bibhu Prasad Sahoo and Others in CIVIL APPEAL NO. 6370 OF 2022 dated SEPTEMBER 16, 2022 has categorically stated that

“As per the settled position of law, the plaintiffs are the domius litis. Unless the court suo motu directs to join any other person not party to the suit for effective decree and/or for proper adjudication as per Order 1 Rule 10 CPC, nobody can be permitted to be impleaded as defendants against the wish of the plaintiffs”

Order VI Rule 17 of the CPC

The Provision of Order 6 Rule 17  of the Code of Civil Procedure, 1908 (in short, ‘CPC’) provides for amendment of pleadings. Very recently the Hon’ble High Court in NITIKA TALWAR vs DINESH TALWAR  in its Judgment passed on 08.11.2023 in  C.R.P. 263/2023 while  dealing with the provisions of Order 1 rule 10 CPC and Order 6 Rule 17 CPC , in this case the husband before the Family court had filed an application under Order 1 rule 10 CPC for impleadment of another respondent , the same was allowed by the Family Court. However the Hon’ble High Court set aside the order of the family court   which allowed  the Respondent No 2 to be impleaded. The Hon’ble High Court in para 4 of its judgment has held that “Without prejudice to the rights and contentions of the rights of
the respondent herein, the learned counsel for the respondent,
however, fairly admits that the proper course for the learned
Family Court was to seek an application from the respondent
under Order VI Rule 17 of the CPC before adjudicating on the
application under Order I Rule 10 of the CPC to implead
Mr.Ritesh Rai as a party respondent in the Divorce Petition.”

The hon’ble High Court  also granted liberty to file an application under Order VI Rule 17 of the CPC seeking an amendment to his Divorce Petition

Conclusion

It can therefore be concluded that prior to impleadment it is necessary to amend the pleading to establish that the impleadment is necessary for proper adjudication of the case. For more information kindly click here

You may also call at 9873628941 and speak with Shri Tapan Choudhury, Advocate-On-Record , Supreme Court of India

Transfer of  Domestic violence  case to Family Court

Transfer of  Domestic violence case to Family Court is an interesting topic of discussion and very recently The Hon’ble High Court of Mumbai in MISCELLANEOUS CIVIL APPLICATION NO.498 OF 2022 with MISCELLANEOUS CIVIL APPLICATION NO.500 OF 2022  pronounced on 2^nd February 2023 held in para 19 of  its  judgment  allowed the transfer of  a Domestic violence case to the family court where the divorce case was pending .

“Reverting back to the facts of the case, considering the pleadings of the parties in both proceedings pending before two different courts, there is the possibility of conflicting verdicts by two courts, and transfer will reduce the burden of one Court resulting in saving of judicial time; and moreover, the transfer of proceedings will not cause inconvenience to the wife as she will not have to travel outside Pune, therefore, for the aforesaid reasons, in my opinion, both miscellaneous civil applications deserve to be allowed.”

Is right of Appeal lost when DV case transferred to family court?

No the right of appeal is not lost . In Santosh Machindra Mulik Vs Mohini Mithu Choudhari, the Bombay High Court in Misc. Civil Application No.64 OF 2019 has held that “ no party can be said to be losing his/her right of appeal; what is lost is a further right of revision.”

Court in Sandip Mrinmoy Chakrabarty v. Reshita Sandip Chakrabarty (Family Court Appeal No.31 of 2020 decided on 26th February 2021) wherein this Court while considering an appeal arising out of judgment deciding proceedings under DV Act and Family Courts Act, 1984 held that right under section 29 of the Family Court Act is not taken away

Important Judgments;

i) Machindra Mulik Vs Mohini Mithu Choudhari-Bombay High Court in Misc. Civil Application No.64 OF 2019

ii) Sandip Mrinmoy Chakrabarty v. Reshita Sandip Chakrabarty (Family Court Appeal No.31 of 2020 decided on 26th February 2021)

Conclusion

For any information for filing a transfer petition of a domestic violence case to a family court kindly click here