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Topic: Caveat Emptor, Vishaka v/s State of Rajasthan
Under the guidance of: Prof. Radhika Rodrigues
Submitted by: -
Name: Jayshree Rambhadur Yadav
Class: F.Y L. L B
Semester: Ist Semester
Roll No: 213120
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Sr. No Topic Page No
1. Introduction
I) Caveat Emptor
Introduction
Meaning and Definition
Evolution
Is Caveat Emptor Still Relevant to Contracts of
Sale of Goods in the 21st Century?
Caveat Venditor
Applicability Under Different Acts
Exceptions to the Doctrine of Caveat Emptor
Illustrations
Case Laws
Conclusion
II) Vishakha and others v State of Rajasthan
Introduction
Quick insights on the case
Facts of the case
Issues raised in the case
Petitioners' arguments
Respondent’s arguments
Judgment of the case
Vishaka Guidelines
Conclusion
I) Caveat Emptor
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Introduction:
This phrase was coined to warn buyers in the sense that sellers have more information in a product
than buyers. It informs the buyer that she will bear the risks of any adverse information she may not
be aware of. There is no guarantee that the products on sale are of good quality.
This maxim explains that a purchaser must carefully examine and judge what is best for him. The
purchaser should not take the risk of the condition and quality of the object which he needs to buy,
he must protect himself by a warranty. The philosophy behind the rule of Caveat emptor basically
was that buyer shall apply his own skill and judgment before buying. It is based on the fundamental
principle that when a buyer is satisfied with the suitability of the product for his use, no subsequent
right will be left with him to reject the same. When the rule of caveat emptor originated, it was quite
rigid and there was no scope for any subsequent change in the rule.
This policy has a lot of exclusions; there may be accidental misrepresentation or deliberate fraud by
seller. In such a case, the buyer is not accountable for the misrepresentation. In other cases, the
sellers empty the terms of this policy by voluntarily offering warranties and guarantees of quality.
Today, Caveat Emptor is applied on real estate products. However, there are lots of regulations
guiding the real estate industry and Caveat Emptor is losing its significance. In addition to real estate,
the financial services industry is an exception to this principle. Here, regulators require those selling
financial products to disclose all the details about a product. In cases where there is evidence of
product misrepresentation or the buyer has offered false information, the Caveat Emptor principle
does not apply.
Caveat Emptor has been applied in commerce. While buyers are responsible for their buying
decisions, there are many laws that protect the buyer against the Caveat Emptor principle. For
instance, the buyer has the right to obtain clear and standardized product information.
In English Sale of Goods Act, 1893, it is highly noticeable and evident that the seller’s duties as to
requirements of disclosure when a product is sold was minimal. There was no duty upon the seller to
provide information and proper examination of the goods by the buyer was considered over and
above any other duty. For the reasons, the rule of Caveat emptor suffered backlash Gradually rule
“Caveat Venditor” gained prominence and the seller’s obligations have been given a proper shape
along various case laws and statutes limiting the rule of Caveat emptor to ‘reasonable examination.’
Meaning and Definition:
The term ‘cavere’ means caution and the Latin term Emptor means buyer. 1 Caveat Emptor is a legal
term of Latin origin. It literally means ‘let the buyer beware”.2
The provisions of Caveat Emptor are enshrined in Section 16 of Sale of Goods Act which provides
that “Subject to the provisions of this act or any other law for time being in force there is not implied
condition or warranty as to quality or fitness for any particular purpose of goods supplied” 3
1 Caveat Emptor- Legal Maxim ([Link])
2 Caveat Emptor- ([Link])
3 Doctrine of Caveat Emptor- ([Link])
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Caveat Emptor is a Fundamental Principle in Commerce and Contractual relationships Between a
Buyer and a Seller. A Commercial Transaction involves two parties i.e.4
Caveat emptor is a kind of disclaimer/ warning included so as to resolve disputes which might come
up in future due to information asymmetry. Case of information asymmetry is one in which the seller
has more information about the quality of the goods or services than the buyer.5
According to this doctrine, the buyer must be aware of the product of what he is purchasing. It fails
in dealing under the circumstances where the buyer purchases the product in good faith in relying
upon the skill and judgment of the seller. Therefore, this doctrine is highly detrimental to the buyer
because of the absence of reasonable examination. This doctrine lacks giving a definite relationship
between the seller and the buyer.6
Subject to the provisions of the act or any other law for the time being in force there is no implied
condition or warranty as to quality or fitness for any particular purpose of goods supplied.7
Evolution:
The doctrine of caveat emptor has been followed by the Courts of England. This doctrine is traced to
the sixteenth century. During the 19th century, the caveat emptor was well established in the various
cases in the period of the Industrial revolution.8
Is Caveat Emptor Still Relevant to Contracts of Sale of Goods in the 21st
Century?9
Contracts in 21st Century have been progressive in nature, so much so that there is an emergence of
Electronic Contracts now. The rights and obligations of parties to a contract are largely governed by
The Indian Contract Act, 1872. However, the courts have often interpreted certain doctrines in a way
that the newly formed meanings of these doctrines do not surpass the basic framework of a statute
but they append a new meaning in addition to the one that is already in place. Contracts of sale of
goods in India are governed by the Sale of Goods Act, 1930. One very crucial and an integral
component of this act is the Doctrine of Caveat Emptor which in simple words means “let the buyer
beware.”
In the recent years, the consumers have grown wary of their rights and obligations towards the sellers
and the society as a whole. Therefore, there has been a paradigm shift from Caveat Emptor to Caveat
Venditor which in simple words means “let the seller beware.” The primary reason behind
enactment of Consumer Protection Act, 1986 was to save the consumers from exploitation and
section 16 of the sale of goods act was one of such provisions under law. Caveat Venditor was
another way of making the sellers accountable for the wrong committed by them.
4 [Link]
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9 Legal [Link]. 3- ([Link])
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Application of Caveat Emptor was feasible in the middle eras where the quantity of goods sold at a
time was less and of similar type unlike now, when large quantities of distinctively different goods
are sold at one point of time. It is impossible for the buyer to examine the latent defects in the goods
that they are purchasing. Moreover, no party should be allowed to enrich themselves at the cost of
another.
Caveat Venditor:10
he emerging doctrine of Caveat Venditor simple means “let the seller beware” as against the
conventional doctrine of Caveat Emptor which has been in use by common law since the 19th
century. As a matter of fact, the doctrine of Caveat Venditor has taken over the ancient maxim of
Caveat Emptor in the commercial world today. Courts in India have also come to realize that Caveat
Venditor, as a concept, is being exercised more than Caveat Emptor. The Principle of Caveat
Venditor is now rising as against the outdated principle of Caveat Emptor. Therefore, it can be said
that a modern buyer ought not to be extremely cautious while making purchases and he can rely on
what newspaper advertisements or other kinds of promotions exhibit to him.
Another reason that led to decline of the application of Caveat Emptor in commercial transactions,
especially the contracts involving sale of goods was that this doctrine, as enshrined under section 16
of the Sale of Goods Act, 1930 does not protect the consumers from the wilful misrepresentations
made by the sellers, particularly in cases where there are contracts based out of utmost good faith.
Here, in order to take defense, the buyer himself must prove that he acted on good faith and he
communicated the same to the seller, either expressly or impliedly.
Caveat Venditor is a maxim which is not only limited to legal fraternity but is also used as a common
term under social science as well. It is interesting to note that Caveat Venditor is more of an ethic
rather than a legal provision since it cannot be traced as a separate concept under any of the statutes.
Applicability Under Different Acts:11
The Doctrine of caveat Emptor is applicable in following Acts:
(a) The Sale of Goods Act, 1930
(b) The Indian Contract Act, 1872
(c) The Consumer Protection Act, 1986
Exceptions to the Doctrine of Caveat Emptor:12
10 Legal [Link]. 4- ([Link])
11 Legal [Link]. 4- ([Link])
12 Legal [Link]. 2- ([Link])
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a. Fitness of the Product for the Buyer’s Purpose of Purchase- Section 16 (1)
If the buyer informs the seller about his purpose behind purchasing the goods and the seller does not
sell the goods according to that knowingly, it relieves the buyer from the responsibility. In this case,
it becomes the duty of the seller to supply the right goods to the buyer.
b. Sale of Goods Under the Trade Name
If the buyer purchases a branded product or a product sold under a trading name, then he is assured
of the quality that is associated with that brand name. The seller in this case cannot be held
responsible. In this case, the buyer is not relying on the skill or judgment of the seller but on the
implied quality standard that the brand offers.
c. Goods Sold by Description
If the buyer purchases the goods based on their description which matches the product, then the
seller cannot be held liable. The seller will be held liable only if he provides an incorrect description
of the goods.
d. Merchantable Quality of Goods- Section 16(2)
The seller must provide goods of merchantable quality to the buyer. This means that the goods must
be fit for resale in the market and must pass the market standards. When the buyer purchases the
goods from a seller based on a description and the seller deals in the goods of that description, then
the goods must be of merchantable quality. If the goods are not of merchantable quality, then the
seller can be held liable for the same.
e. Sale by Sample Inspection
The Doctrine of Caveat Emptor does not apply if the buyer purchases the goods after careful
inspection of a sample of the goods that he intends to buy and the seller supplies goods different
from that sample. For example, A inspects a sample carpet manufactured by B. He gives an order of
100 carpets of the same quality as that of the sample. If B supplies carpets that do not match the
sample carpet in quality, then he will be held liable. If the sale is made based on a description as well
as a sample and the goods do not match both, then the buyer is not held responsible.
f. Trade Usage - Section 16(3)
The rule of Caveat Emptor does not apply if the seller deviates from informing the buyer about the
quality or the fitness of goods/products. There is an implied condition or warranty on the condition
of the goods.
g. Fraudulent Representation by the Seller
If the seller provides fraudulent information about the goods or conceals some important information
about them, the buyer is not responsible.
Illustrations:
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a. A wants to buy a car from B. In this A is responsible for gathering the necessary information to
make an informed purchase. If he simply buys the car by asking the price an makes little or no effort
to assess its true value, and the car subsequently breaks down, B is not liable for damages under the
principle of Caveat Emptor.13
b. A buys a Bicycle from B by mentioning that he wants to use the cycle for mountain trekking.
In this case if B sells him ordinary bicycle that is incapable of fulfilling A’s purpose the seller B will
be responsible.14
c. John purchases a house from Adam. Before the purchase, John asked the seller about the
defects in the house. Adam told him that there was a leak in the bathroom upstairs, but it was fixed
already. However, Adam also warned him that despite the repairs, a small leak could occur from
time to time. John failed to inspect the bathroom properly but still decided to buy the house. After
three months, there was a big leak that damaged the floor in the bathroom and the ceiling in the
dining room downstairs. John decided to go to court to recover damages from Adam. However, the
judge stated that John is not entitled to any remedy because the caveat emptor principle is applied.
John did not perform thorough due diligence to ensure that the defect in the bathroom could not
cause any damage in the future.15
d. There was a sale by sample by a woolen manufacturer of cloth to merchant, who was also a
tailor. The cloth was required for making liveries but the fact was not made known to the seller. On
account of the latent defect in the cloth, liveries could not be made out of it. But there was nothing to
show that it was unfit for other purposes. Held the buyer was without remedy due to non-
communication of the purpose for which the cloth was required.
e. If a person A buys a house from B and A asks whether there are defects, B is supposed to
notifying him of any defects. If A does not inspect the defects and there ends up being a leak that
destroys the house, B is not held responsible
Case Laws:
In M/s Emami Ltd. v. Nikhil Jain, a consumer court has imposed a penalty of 15 lakh rupees on
Emami Ltd. for ‘misrepresentating’ to the public about its fairness cream for men. The company’s
13 egal [Link]. 2- ([Link])
14 Legal [Link]. 2- ([Link])
15 Legal [Link]. 2- ([Link])
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advertisements claim the cream makes skin fairer. The district consumer disputes redressal forum
(central), Delhi, held that Emami had adopted unfair trade practices by claiming through its
advertisements that its product ‘Fair and Handsome cream’ would give men fairer skin in three
weeks.
In Shital Kumar Saini v. Satvir Singh, a compressor was purchased by the petitioner with one year
warranty. The defect in the product appeared within three months. The petitioner sought a
replacement. The seller replaced it but did not provide any further warranty. The State Commission
stated that an implied warranty was guaranteed under section 16 of the Sale of Goods Act, 1930 and
allowed it to be rejected.16
Eswari Petitioner v. The Regional Manager, Mstc Ltd., 2014 AIR MAD 182.
Held - No plea or misunderstanding or ignorance or conditions put forth subsequent to any
confirmation of sale shall be accepted. The principle of “caveat emptor” (let the buyer be aware) will
apply. The registered Parties (or their Authorised Representative) should inspect the materials at the
specified locations by producing their e-Auction Photo ID Card to the Seller or by producing a copy
of this e-Auction Catalogue downloaded from the Website.17
Commissioner Of Customs (Preventive) v. Aafloat Textiles India Private Limited And
Others, 2009 SCC 11 18.
Held - “Caveat emptor is the ordinary rule in contract. A vendor is under no duty to communicate the
existence even of latent defects in his wares unless by act or implication he represents such defects
not to exist.” Applying the maxim, it was held that it is the bounden duty of the purchaser to make all
such necessary enquiries and to ascertain all the facts relating to the property to be purchased prior to
committing in any manner.18
M.S Padmanabha Iyer v. Devadass Sylus and Another, 1970 MLJ 2520.
Held - It is clear from the facts of the present case that it has passed the stage of the agreement to sell
and the complete conveyance has been made in respect of the property. I have already discussed as to
the nature of the sale deed Ex. A-1, and hence it cannot to construe that the vendor in Ex. A-1 has
covenanted to indemnify the purchaser from any loss. It is pure and simple that at the time when the
purchaser got the property under Ex. A-1, he gets it with open eyes and the principle of caveat
emptor alone was applicable at that time.19
Conclusion:20
Thus, it can be concluded from the aforementioned analysis that the rule of Caveat emptor is being
taken over by the rule of Caveat venditor and is dying a slow death. The change is taking place in
order to create a more consumer-oriented market wherein transactions of commercial nature will be
encouraged. Such change will help to create a more consumer-friendly market and an appropriate
balance can be maintained between the rights and obligations of the buyer and the seller. But it
should be noted that if this approach is taken too far, it might end up in becoming extremely pro
buyer and then some people might end up misusing the protection under the law.
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II) Vishakha and others v State of Rajasthan
Introduction:
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Vishaka & Ors. v. The State of Rajasthan & Ors is a case that addresses the heinous crime of sexual
harassment of a woman at the workplace. It is a watershed moment in the history of sexual
harassment, as decided by the Supreme Court.
Sexual Harassment is defined as an uninvited sexual favour or sexual gestures from one gender
toward the other. Sexual harassment violates the fundamental right codified in Article 14 of the
Indian Constitution, as well as the fundamental right to life and to live a dignified life, which is
violated under Article 21 of the Indian Constitution. Vishaka & Ors. v The State of Rajasthan & Ors
is a landmark judgment issued by the Supreme Court of India that addresses the issues of sexual
harassment of women at the workplace. The Supreme Court issued the well-known Vishaka
guidelines, requiring both the private and public sectors to establish mechanisms to address sexual
harassment complaints.21
Quick insights on the case:22
NAME OF THE CASE Vishaka & Ors. V State of Rajasthan & Ors.
CITATION OF THE CASE AIR 1997 SC 3011
NAME OF THE COURT Hon’ble Supreme Court of India
PETITIONERS IN THE CASE Vishaka And Ors.
RESPONDENTS IN THE CASE The State of Rajasthan and Ors.
HON’BLE BENCH Chief Justice J.S. Verma,
Justice Sujata V. Manohar and
Justice B.N. Kirpal.
JUDGMENT PASSED ON 13th August 1997
Facts of the case:23
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a. Bhanwari Devi, a lady from Bhateri, Rajasthan started working under the Women’s
Development Project (WDP) run by the Government of Rajasthan, in 1985.
b. In 1992, Bhanwari took up an issue based on the government’s campaign against child
marriage as part of her job. The villagers were ignorant of the matter and supported child
marriages despite knowing that it was illegal.
c. In the meantime, the family of Ram Karan Gurjar decided to conduct such a marriage, of his
infant daughter. Bhanwari attempted to convince the family not to perform the marriage,
however, her endeavours brought about being vain. The family chose to proceed with the
marriage.
d. On 5th May 1992, the sub-divisional officer along with the Deputy Superintendent of Police
(DSP) went and stopped the said marriage. However, the marriage was performed the next
day and no police action was taken against it. Later, it was established by the villagers that
the police visits were a result of Bhanwari Devi’s actions. This led to boycotting Bhanwari
Devi and her family whereby she lost her job.
e. To seek revenge, on 22nd September 1992, five men i.e., four from the above-mentioned
Gurjar family- Ram Sukh Gujjar, Gyarsa Gujjar, Ram Karan Gujjar, and Badri Gujjar along
with one Shravan Sharma, attacked Bhanwari Devi’s husband and brutally gang-raped her.
f. The police had attempted to play all dirty tricks to prevent her from filing any complaint due
to which there was a delay in the investigation as well as medical examination which was
deferred for 52 hours only to find that no reference of rape was mentioned in the report.
g. At the police station, she was continually and grossly taunted by the women countable for the
whole of midnight.
h. In past midnight she was been asked by the policeman to leave her lehnga as the evidence of
that incident and go back to her village. She was just left with the bloodstained dhoti of her
husband to wrap her body, because of which they needed to go through their entire night in
that police station.
i. In the absence of adequate proof and with the help of the local MLA Dhanraj Meena, all the
accused managed to get an acquittal in the Trial Court. Women activists and organisations
chose not to be silent and raised strong protests and voices against the acquittal.
j. A PIL was filed by a women’s rights organisation known as ‘Vishaka’ which focused on the
enforcement of the fundamental rights of women at the workplace under the provisions of
Article 14, 15, 19, and 21 of the Constitution of India and the need to protect their sexual
harassment at the workplace.
Issues raised in the case:24
a. If formal guidelines were required to deal with incidents involving sexual harassment at the
workplace?
b. Whether sexual harassment at the workplace amounts to the violation of the fundamental
rights of a woman?
c. If the employer has any responsibility in cases of sexual harassment by its employee or to its
employees at a workplace.
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Petitioners' arguments:25
A writ petition, seeking the writ of mandamus was filed by the ‘Vishaka’ group which comprised of
various women’s rights activists, NGOs, and other social activists. They put forward their argument
that the indecent acts of sexual harassment of women at Workplace violate the fundamental rights
enshrined under Article14, 15, 19(1)(g) and 21 of the Constitution of India. The petitioners brought
the attention of the Hon’ble court to the loophole that the legislation has regarding the provision of a
safe working environment for women. They requested the Hon’ble Court to frame guidelines for
preventing sexual harassment at Workplace.
Respondent’s arguments:26
The learned Solicitor General appearing on behalf of the respondents (with their consent) in this case
did something unusual i.e., supported the petitioners. The respondent assisted the Hon’ble court in
figuring out an effective method to curb sexual harassment and in structuring the guidelines for the
prevention of the same. Fali S. Nariman – the amicus curiae of the Hon’ble court along with Ms.
Naina Kapur and Ms. Meenakshi provided assistance to the Hon’ble court in dealing w ith the said
case.
Judgment of the case:27
The court held that sexual harassment at the workplace was indeed violative of the fundamental
rights guaranteed under Article 14, 15, 19(1)(g) and 21 of the Constitution of India.
The court also defined sexual harassment as unwelcome “sexually determined behaviour (whether
directly or indirectly) like physical contact and advances, a demand or request for sexual favours,
sexually coloured remarks, showing pornography, or any other unwelcome physical verbal or non-
verbal conduct of sexual nature.”
The honourable court also acknowledged the lack of adequate legislation and loopholes which
allowed such heinous crimes to thrive.
The Court also took reference from the international conventions to give a deeper analysis. Article
11(1), (a) and (f) and Article 24 of Convention on the Elimination of All Forms of Discrimination
against Women was cited.
The court made a special mention that “Gender equality includes protection from sexual harassment
and right to work with dignity, which is a universally recognised basic human right.” Therefore, it
was the court’s responsibility to show light in that regard and it was their obligation under Article 32
to ensure that fundamental rights were protected at any cost.
The court also noted that it was discriminatory when the woman has reasonable grounds to believe
that objecting to sexual harassment would disadvantage her in her employment in terms of recruiting
or promotion or the creation of a hostile work environment.
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Thus, sexual harassment need not involve physical contact. Any act that creates a hostile work
environment, by cracking lewd jokes, verbal abuse, circulating rumours etc can be considered as
sexual harassment.
The Hon’ble Supreme Court outlined the rules to forestall sexual harassment at the Workplace,
known as ‘Vishaka Guidelines,’ that should have been treated as law under Article 141 of the Indian
Constitution to allow time-bound treatment of complaints. These rules provided the foundation for
The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Vishaka Guidelines:28
a. EMPLOYER’S OR OTHER EQUIVALENT AUTHORITY’S DUTY– Employer or other
responsible persons are bound to preclude such indecent incidents of sexual harassment from
happening. In case such an act takes place, then the organization must consist of a mechanism
to provide prosecutorial and conciliatory remedies.
b. DEFINITION – For this purpose “Sexual Harassment” means disagreeable sexually
determined behaviour direct or indirect as-
Physical contact and advances;
A demand or request for sexual favours;
Sexually coloured remarks;
Showing pornography;
Any other unwelcome physical, verbal, or non-verbal conduct of sexual nature.
c. MEASURES FOR PREVENTION– Employers or persons in charge of the workplace must
take preventive measures such as an express prohibition of sexual harassment in the form of
notifications or circulars, penalties by the government against the offender, appropriate work
conditions in respect of hygiene, health, and leisure.
d. PROCEEDINGS IN CASE OF MISCONDUCT– If the offenses committed are the ones that
fall under the purview of the Indian Penal Code, 1860, then the employer is bound to take
prosecutorial action by complaining to the appropriate authority.
e. APPROPRIATE DISCIPLINARY ACTION– If there is an occurrence of the violation of
service rules, appropriate disciplinary action must be taken.
f. REDRESSAL MECHANISM– An organization must have a redressal mechanism to address
the complaints. This must be irrespective of the fact that whether the act constitutes an
offense under the Indian Penal Code, 1860, or any other law as such.
g. REDRESSAL COMMITTEE– Such a redressal mechanism or more precisely such a
complaint committee must have women as more than half of its members and its head must
be a woman. The committee must comprise of a counselling facility. It is also acceptable to
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collaborate with NGOs or any such organisations which are well aware of such issues. A
report must be sent to the government annually on the development of the issues being dealt
by the committee.
h. SPREADING AWARENESS– To raise sexual harassment issues, employer-employee
meetings must be held. The employer must take appropriate actions/measures to spread
awareness on the said issue.
Conclusion:
The constitutional principles of equality and liberty have been upheld by the Hon’ble Supreme Court
of India in the Vishaka Judgement. The inception of the law against sexual harassment has inspired
many women to raise their voices against the suffering that they were silently subjected to until the
year 1997. Vishaka Guidelines formed the basis for the establishment of The Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The true spirit of Judicial
Activism has been portrayed in the Vishaka Judgement and it has been an inspiration to other
nations. However, Bhanwari Devi, the spark that ignited the need for appropriate legislation to
safeguard women against sexual harassment, even after two decades, is still awaiting justice to be
served. It is paramount to take note of the fact that, though such comprehensive laws have been
enacted to safeguard women in India, it still ranks as the most dangerous country for women. Maybe
it is time to question ourselves, is it the law or is it us that must be responsible?
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