Editorial 1/Liquid diet
Editorial 2/Sad demise
In the company of pirates
Letters to the Editor

Indian banks had it easy under socialism. The various interest rates were fixed. Their primary client was the government. Rather than the fleet-footed financial ferrets that a modern economy needs, they devolved into sleepy ruminants milched regularly by politicians. Under the present Reserve Bank of India governor, Mr Bimal Jalan, the banking sector is being gently groomed for the global financial market. The latest monetary and credit policy 2000-01 pushes the banks further down two different but complementary paths. On the one hand, it gives them greater freedom to set interest rates. Mr Jalan’s instrument is a new liquidity adjustment facility in which both amounts and rates would be set by market conditions. On the other hand, the RBI is setting tougher prudential norms for banks to follow. Specifically, it has called for banks to have consolidated balance sheets under which capital adequacy norms would be determined after the ledgers of all subsidiaries are merged. In crude terms, banks are being given freedom to take risks, but only in return for showing better discipline. The only discordant note is the RBI’s setting guidelines allowing banks to enter the insurance business. This is fine as it goes. But the RBI has relaxed criteria for nonperforming assets at the same time. This seems to mean greater freedom going alongside a relaxation of norms — a worrisome combination.

The prime lending rate of most banks having fallen steadily in the past four years, it is now almost taken for granted that interest rates will drop further. Mr Jalan has wagged a finger at such expectations, saying there are no quick ways to engineer cheap credit. There is an expectation that cash reserve requirements will be further eased. But as the RBI has noted, it will be up to banks to cut lending rates further because the real bottleneck now lies in their own internal inefficiencies. In particular, unless a bank can reduce transaction costs and reduce its portfolio of bad loans it will not be able to play around with its lending rates. Mr Jalan was at least certain there would be no turning back the monetary clock. Liquidity would continue to flow, credit would remain easy. He probably feels assured that most indicators are positive. Inflation is low, the current account deficit under control, the RBI’s economic growth estimates are akin to the finance ministry’s and, despite the government’s gaping fiscal hole, growth of the monetized deficit actually went southward. The annual credit policy means less and less these days. This is in part because Mr Jalan recognizes that a liberalized economy cannot possibly wait even six months for new policies. However, it is also because the central bank is following a global trend of retreating from micromanagement — but doing so in the cautious manner that is the trademark of the present governor.    

Divine intervention is what the Punjab chief minister, Mr Parkash Singh Badal, had hoped for in the assembly in March, when confronted with the failure of an attempted compromise between his party, the Shiromani Akali Dal, and the Akal Takht. Divinity may have just intervened — though with a not entirely undivine cruelty — in the form of the death of the daughter of Ms Jagir Kaur, president of the SAD-controlled Shiromani Gurdwara Prabandhak Committee. Following the charges of murder brought against her by her daughter’s fiancé, there has been increasing pressure on Mr Badal to initiate a Central Bureau of Investigation inquiry into the case, leading to his setting up of a special investigative team. The results of this team will not only determine Ms Kaur’s fate in the SGPC, but will also bring to some sort of a head relations between the SAD and the embodiment of Sikh religious authority, the jathedar of the Akal Takht, Mr Puran Singh.

There is a history of Ms Kaur being used by Mr Badal to mediate the lengthily volatile and fraught relationship between the SAD and the Akal Takht. The conflict between the two goes back, most immediately, to the bizarrely scholastic tussle over the two Sikh calendars — the traditional, Akal Takht-approved Bikrami calendar and the new, SGPC and government-backed Nanakshahi calendar. This bitter theological battle led to Ms Kaur’s excommunication in January 2000, followed by Mr Singh commanding Mr Badal to sack Ms Kaur and three jathedars who continued to support the SGPC president. The chief minister has no power, by law, to carry out such a command, and Mr Badal has since been trying to maintain a strategic distance from the theocratic establishment. But factions within the SAD are also part of the context, with some members of the party hoping for the SGPC presidentship, since the rift between Mr Badal and Ms Kaur’s predecessor, Mr Gurcharan Singh Tohra. Both Ms Kaur and Mr Singh had been crucial in Mr Badal’s campaign to rid the religious establishment of the Tohra faction. Yet, although going along with these designs initially, Ms Kaur has now proved herself to be a powerful and oppositional voice in Punjab politics, in relation to both the political and religious establishments. She has taken on, with open aggression, both the Akal Takht as well as the Sant Samaj, a religious coalition backing Mr Singh. Both happen to be the embodiments of religious authoritarianism Mr Badal cannot afford to antagonize entirely. Ms Kaur’s aggressive and ambitious style of politics lends itself, within a self-interested political establishment, to being fused with other forms of alleged, and more extreme, aggression. The outcome of the investigations into her daughter’s death will decide how the growing discomfort with her presence in the party will develop to the advantage of the various tensely overlapping institutions of the politico-religious establishment in Punjab.    

India’s software industry lost nine billion rupees last year to piracy. For a decade, the National Association of Software and Service Companies has educated users on the need to purchase legal software, emphasizing the risks associated with pirated software — viruses, bugs, the lack of documentation, technical support and upgrades. NASSCOM’s focus has so far been on persuading clients to trade pirated software for legal versions, rather than on prosecution. Now it has stepped up its campaign by installing a nationwide toll free hotline at 1-600-334455 where reports of suspected piracy can be lodged anonymously.

Since most hotline calls are from disgruntled employees, executives of many of India’s best known organizations face the prospect of being charged with nonbailable criminal offences under sections 51, 63 B and 69 of the Indian Copyright Act. These carry a jail term between six months and three years.

Company officials may find they are personally liable for jail terms of at least six months for any illegal software found on their firm’s computers or premises, even if the piracy was done by a junior employee or an independent contractor without their permission. Leave aside wilful piracy by companies to save on costs, many employees genuinely believe that because their employer bought one software package, they can make copies.

For lack of court decisions at home, Indian courts will rely on precedents from other countries with similar copyright laws, especially the United Kingdom and the United States.

That employers are liable for copyright infringement by their employees has long been established in English common law. In 1926, Falcon vs Famous Players Film Company, the judges held, “A person is liable for any infringement of copyright which his servants or agents may commit in the course of their duty and within their authority, even though he has no knowledge of the act of infringement and despite the fact that he has given a general order to his servants prohibiting the doing of acts which might amount to infringement.”

C ourts in the UK have gone further. They have said any person in authority who should have known that copyright infringement was possible under certain circumstances, and who did not attempt to prevent it, can be held liable. In the 1924 case, Performing Right Society Limited vs Ciryl Theatrical Syndicate Limited, the judges said, “If anything in the nature of even indirect evidence of permission or countenance of the performance of the works could be found, it would be sufficient to constitute authorizing of the infringement. The court may infer an authorization or permission from acts which fall short of being direct and positive.’’ They added that “indifference exhibited by acts of permission or omission may reach a degree from which authorization or permission may be inferred”. When such permission is implied, “it is clearly unnecessary” that the authorizing party know that the actual act of infringement will be done.

This principle was stretched further. In the 1975 case, Moorhouse vs University of New South Wales, it ruled, “A person who had under his control the means by which an infringement of copyright may be committed — such as a photocopying machine — and who made it available to other persons knowing or having reason to suspect that it was likely to be used for the purpose of committing an infringement and omitting to take reasonable steps to limit its use to legitimate purposes, would be held to have authorized any infringement that resulted from its use.’’ Knowledge of or reason to suspect “any one of a number of acts, rather than the particular act of infringement actually committed’’ was sufficient. Although Indian courts give much higher weightage to UK precedents than to US ones, the latter have extended third party liability even more. They have developed the theories of vicarious and contributory infringement, even though these are not mentioned in the 1976 US Copyright Act.

Vicarious infringement was formulated by a US court of appeals in 1963 in Shapiro, Bernstein and Company vs H.L. Green Company. It is based on the common law doctrine of respondent superior and may be imposed on any person “who has the legal right to inspect or supervise the actions of the primary infringer provided he also receives a direct financial or other benefit from the infringement”. The supervisor does not have to know of the infringing activity, or even have reasonable grounds for suspecting piracy was occurring. According to Leslie Berkowitz , LawInfo Forum, “An employer will be vicariously liable for an employee’s copyright infringement, even if the employer has no knowledge and no intent to infringe. ’’ It does not matter if the employee has been directly told not to do the dirty deed.

Contributory infringement was formulated by a US court of appeals in 1971 in Gershwin Publishing Corporation vs Columbia Artists Management. It may be imposed on anyone “who, with knowledge, induces, causes, or materially contributes to the infringing activity or provides services or equipment to the primary infringer.’’ The person need not actually know the third party. The court held that it was sufficient “if a reasonable person would have known that the underlying infringing act was possible under the same circumstances”. A contributory infringer is jointly and severally liable along with the direct infringer. In the 1988 Telenate Systems vs Caro, a company was found liable for contributory infringement when its customers copied software using equipment it provided.

There are many measures Indian organizations can take to reduce their liability for copyright infringements by employees, consultants and contractors. These include adopting an organization wide anti-piracy policy which specifically states that any employee who infringes copyrights will be dismissed, and will also indemnify the employer for any acts of infringement. Second, clauses prohibiting use of pirated software in all contracts with computer vendors, contractors, system integrators and consultants, with indemnification for liabilities.

Third, purchase an adequate number of authorized copies of all software, either under site licences or concurrent use licenses; maintain a record of all software on each computer, register these with the respective software publishers, and conduct regular audits.

They could place a notice beside each computer that pirated software should not be used or downloaded from the internet — and that any employee who does so will be dismissed. Also, segregate hard drives into application and workspace partitions with write protection. This will prevent the unauthorized installation or downloading of application software. Any unauthorized application must necessarily be loaded into the workspace domain, allowing piracy to be quickly identified.

Such measures are not a defence against liability. But they would probably persuade a copyright holder to agree to an out of court settlement. If the matter goes to trial, employers may be shocked to find that the measures taken above do not constitute a valid defence, at best they can mitigate the quantum of punishment.

Both UK and US courts have held that clauses in employment or consulting contracts prohibiting the use of pirated software and indemnifying the employer have no legal validity and provide no protection to the employer. On the contrary, a US court recently ruled: “Such a ‘hold harmless’ clause does not represent a good faith effort to avoid copyright infringement, but is actually an attempt to circumvent the copyright law.” An employer was liable even if illegal copying violated “an expressly documented and circulated company policy”.

It is not even a valid defence that it is not technically or physically feasible to supervise every action of every employee, contractor or consultant.    


Old whine in new battle

Sir — Rita Pal’s lone crusade against the medical fraternity in a hostile “foreign” land is hardly surprising (“The Whistle blower”, April 30), what with racism, sexism and other biases still rampant. Pal is portrayed as the Bengali girl next door, but with a fiery conviction, who has succeeded in taking on the medical world in London. This is typical of how women, who opt out of the stereotypical roles conferred upon them, are viewed. However, Pal still has to adhere to another stereotype since by being a doctor she is seen to have taken up a “caring” profession. Recent research reveals that when women opt out of humanities, the invariable choice of study, they go for those professions that appeal to their nurturing instinct. For what reason, other than to emphasize her “womanliness”, should the article stray from her real work — her allegations against the misdeeds committed in National Health Services hospitals — to that of her image of a simple girl with “single” marital status?

Yours faithfully,
Shiela Mukherjee, Calcutta

Promoting inequality

Sir — The report, “PM puts Dalit promotions on fast track” (April 18) makes obvious Atal Behari Vajpayee’s attempts to appease Dalits. After all, Vajpayee is not immune to vote-bank politics.

The reservation policy as practiced is India is unique. People in fact consider themselves proud to belong to any community to which reservations apply. Thanks to the policy today, the son of an Indian administrative service officer belonging to the scheduled caste or scheduled tribe category is assured of employment in government service while a member of an impoverished upper caste family would find it difficult to get the basic necessities of life. It is the “creamy layer” among the backwards which is grabbing the benefits of reservations.

In his speech the prime minister called for relaxation in promotion because it involved people who had borne the brunt of “neglect and injustice for centuries”. It is not clear why Vajpayee has suddenly started shedding crocodile tears for the backward castes. Yet he should remember that in today’s world, it is economic backwardness and not caste-based backwardness that matters.

The prime minister has given a dangerous signal. If reservation is extended to promotions, administrative efficiency will be the first casualty. If the present trend continues we might have bus and railway seats reserved for scheduled categories, special television and radio programmes for the backward. In that case how would Vajpayee like to hand over the reins of the country to a backward class compatriot?

Yours faithfully,
Hrishikesh Chakrabarti, Agartala

Sir — It appears Atal Behari Vajpayee wants to correct a wrong done centuries ago. Before Vajpayee allows his minister to introduce such legislation in Parliament, he should ensure officials, particularly of the reserved category, do not attend office in a drunken state — which is a regular feature in the Northeast. He should ensure that the principles of the people he is willing to help are upright.

The ludicrousness of the policy should be obvious from the fact the chief secretary of any state in the Northeast, if he is an ST and included within the sixth schedule of the Constitution, does not pay income tax while his driver, who, if he happens to be a non-tribal, has to pay income tax.

Yours faithfully,
A. Hazarika, Guwahati

Sir — As I read “French daily says sorry to Narayanan” (April 20), I was reminded of an article I read in a Philadelphia daily about the settlements the French government offered the Jews in return for seizing their belongings not too long back around the time of World War II. It’s an open secret that Germany used hundreds of thousands of Jews and Poles in slave labour. It could also be possible that slavery existed in France as well. After all, this is also a country that indulged in colonization.

Yes, we agree that in India ostracization of our own people has taken place for generations as in every other society. But it is also true that the transformations and social adjustments that have taken place in the past few decades are without parallel. The so-called ostracized people of yesterday are today’s lawmakers. Think of Phoolan Devi and Laloo Prasad Yadav. As Indians, we are proud of these achievements. The same hasn’t taken place in France. Had it been so, French soccer player, Zinedine Zidane, would not have regretted his Algerian origin.

Yours faithfully,
Anshuman Roychowdhury, Calcutta

Sir — Let’s not haul the French over the coals. They did not invent the word “untouchable”. It is the Congress in league with the vote-catching politicians who have perpetuated the ignominious caste brandings of “pariah”, “chandala”, “chamar” and hundreds more by euphemistically classifying them as Dalits. “Protective discrimination” bestowed on these people is the most pernicious political habit India has spawned.

When K.R. Narayanan became president, our small-time, sycophant politicians and the press hollered from the rooftops that for the first time in the history of independent India, an “untouchable” had assumed the highest executive office and occupied the Rashtrapati Bhavan. What right do we have to get angry with the French? If Narayanan is against such brandings let him prohibit the demeaning labels through a presidential promulgation in all government and official deliberations.

Yours faithfully,
H.P. Hande, Bangalore

Smoke screen

Sir — There is no doubt that consumption of tobacco causes many diseases like cancer and respiratory disorders (“Anti-tobacco drive hits union hurdle”, March 27). Moreover, tobacco smoke comprises 4,000 chemical substances, 438 of which can produce cancer — tobacco tar and carbon monoxide being very dangerous. Meanwhile, the United States has declared nicotine as a habit-forming drug. According to the World Health Organization, one-fifth of the 28 lakh people who annually succumb to cancer worldwide, are Indians. In 1999, 1.63 lakh people developed cancer due to consumption of tobacco.

Interestingly, the Indian Council of Medical Research has calculated that the average cost of treatment for a single case of tobacco-related cancer is Rs 3.5 lakh; and the amount of money the government spends towards the treatment of tobacco-related ailments is far more than the revenue generated by tobacco growers and tobacco industries. It is indeed frightening the rate at which tobacco users are increasing in the country. Any pan or cigarette shopowner will vouch that the sale of tobacco products, like pan-masala , zarda and khaini are increasing along with cigarettes and bidis.

Finally, the globalized and liberalized Indian market is now flooded with cigarettes coming in from Myanmar, Thailand, Bangladesh, Egypt, China, Indonesia and Malaysia. Shouldn’t the government make some effort to curb the tobacco lobby from peddling poison in India?

Yours faithfully,
Manoranjan Das, Jamshedpur

Sir — The West Bengal government should immediately ban the sale of gutkha within 100 yards of schools and colleges. Moreover, the state information and cultural affairs department together with the West Bengal health department must launch a full-fledged campaign to discourage cigarette as well as gutkha addiction.

Yours faithfully,
A.F. Kamruddin Ahmed, Hooghly

Sir — Why does the government always have to sound sanctimonious? Smokers are, most often, adults who are aware of the consequences of their habit. For non-smokers, no-smoking zones could be introduced more rigidly.

Yours faithfully,
S. Sen, Calcutta
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