In this blog post, Gourav Khatri, pursing M.A. Business law from NUJS, Kolkata, talks about   John Doe order and the situations when they are granted.

What Does John Doe Mean

The origin of ‘John Doe’ was from England’s King Edward III and the orders were issued to unidentifiable defendant. Oxford Dictionary defined John Doe as “Anonymous Party”.

In the wake of LPG i.e. Liberalisation, Privatisation and Globalisation, the intellectual property has been termed as the most important asset in today’s world.

Where there are several unknown parties involved in a case or dispute and whereas their identities are not traceable, they are collectively called as John Doe. In other words, Doe name is used to identify the anonymous or an unknown defendant.

What Are John Doe Orders

When it comes to protect intellectual property rights against certain unknown person and when a person who can be a threat to a given task, project, work, where such person can’t be traced due to his identity being hidden under various layers of covers, to protect such situations a legal remedial course of action emerges and that is termed as John Doe orders.

The basic idea is to protect intellectual property rights where the persons are anonymous.

The person who is of the apprehension that there is the likelihood of having caused some harm, by copying by an unidentifiable person on his project, where the outcome of such project has become innovative or inventive, can approach the court to direct to issue John Doe order.

It is an interesting concept of law where a person who is a party to certain legal proceedings but his or her name is unknown. It may be anyone be it an individual, company, partnership, association of person, a body of individuals, trust, society, service providers, website owners, newspaper owners which infringe intellectual property rights by making certain steps with such intent.

Upon application by a person who is in apprehension of having his book, movie, television show, live sport event may approach to a court of applicable jurisdiction and seek to secure a John Doe order which is in most acceptable legal sense is termed as the cease and desist order to protect his probable loss due to copying and publishing without the author’s knowledge or prior information.

John Doe Order and Indian Courts

Under the Indian scenario, John Doe order is issued in the following areas:

• Movies

Before release or even after release, the telecasting or copying and selling unauthorized copies of a movie. The producers can protect their rights by securing a John Doe order where the will file a petition/application to issue John Doe order in the name of so called produced movie by them and the court may upon deciding the merits of the case may proceed to issue John Doe order.

• Books

Author or the Publisher may approach the court and establish that the book authored by them is having a likely apprehension of copying without the permission of the author or the publisher and therefore, should be curbed by such unauthorized publication. The court may upon evaluation of the case grant the John Doe order.

• Sports Events

Live telecast rights can be protected via John Doe order.

Legal Position of John Doe Orders in India

Order 30 Rule 1 of the Code of Civil Procedure entails that where a petitioner has likelihood of happening of some infringement of copyrights by using the information created by petitioner or has clues of having his works copied to achieve some financial gains may approach the court and seek John Doe order.

The court has been empowered under Order 39 Rule 1 and 2 of the Code of Civil Procedure, 1908 whereby the court can issue an injunction order to issue John Doe order.

John Doe order has been recognized worldwide and has been internally accepted in terms of implementation of rights relating to intellectual properties. Indian courts although have started issuing John Doe orders, however, the implementation and effectiveness are yet to be seen.

The scope of John Doe order has been extended to media but has touched to seize counterfeit goods in case of infringement of either trademark or copyright. This even extends to those unidentified people who have been indulged in manufacture and sale of counterfeit optical. Infringing labels, artistic work and packaging materials of Plaintiff have also got place in Indian legal system, so far John Doe order is concerned.

The basic idea is that as long as the litigating finger is pointed at a particular person then the misnomer is not fatal. Indian judicial system has from time to time realized the order of infringement should be even passed even prior to the event of infringement itself to restrain threatened or probable wrongful.

 3 Cases in India where John Doe Order has been Granted

• E.S.P.N. Software India Pvt. Ltd. (Appellants) Vs. Tudu Enterprise and Ors. (CS/OS/384/2011)

Hon’ble Judge Smt. Gita Mittal, J.

Acts or Laws Applied –

Copyright Act, 1956 – Section 37(3), Cable Network (Regulation) Act, 1955, Code of Civil Procedure, 1908, Section 151, read with Order 26, Order 39 Rule 3.

Detailed Discussion –

The case was pertaining to Section 37(3) of the Copyright Act, 1957 whereas, the defendants had damaged the right of the plaintiff without entering into any proper contracts either with distributor or with plaintiff while using transmitting networks channels of plaintiff and showed events to their subscribers thereby, caused violations with respect to the reproduction laws of broadcasting. An appeal was preferred whether the acts done by the defendants were unauthorized while transmitting networks channels of the plaintiff.

It was held by the Hon’ble Delhi High Court that the channels belonging to the plaintiff were paid channels. These were viewed by those persons who were subscribed through a proper route of distributors.

Therefore, it could have been accessed through only authorized users.

The owners or the licensed who were having equipped with certain encryption could distribute these licensed channels. Decoder or decryption devices were being used while distributing the channels. Such devices were having a unique identification number to differentiate and identify the subscribers.

Unauthorized cable operators indulge in illegal capturing of sports related channels of the plaintiff were illegally transmitted and whilst they were not having neither the distribution rights nor were doing the legal authorized distribution.

While the defendants had not executed any licensed agreement with plaintiff’s distributors and were having no right to distribute channels over their cable operators therefore, it was in violation under Section 37(3) of the Copyright Act. Thus it was not justified and the appeal was disposed of.

The Hon’ble Delhi High Court in this matter held the following ratio decided in the case –

• It was held that the defendants and their agents including the representatives, franchisees etc or anyone claiming under them were restrained from using and distributing, telecasting and broadcasting including re-broadcasting or in any sense communication with respect to the viewing public subscribers either by wireless or by wire or in any ways the upcoming World Cup ICC, 2011 being telecast on the STAR Cricket and ESPN and START Sports Channels in any manner where its rights were infringed by way of copyright/re-broadcast right of the plaintiff by making download from any other channels not registered under the relevant guidelines.

• Delhi High Court further held and directed that the directions shall operate against the defendants unless the said order was vacated. Their representatives, agents, families, franchisees and sub-operators or any other person are liable under said injunction.

• The injunction was passed against unknown and unidentifiable persons warning the unnamed persons in order to protect the rights of the trademark owners.

• The SHO and concerned investigating staff of the police was directed to support the plaintiff and was stated to assist for the purpose of quick and swift enforcement of the present order as it was the obligation of the police authorities to ensure effective implementation of the injunction order passed by the Delhi High Court.

• Further, the plaintiff was directed to comply with the provisions of Rule 3 of the Code of Civil Procedure.

Key principles established in the case of E.S.P.N. Software India Pvt. Ltd. (Appellants) Vs. Tudu Enterprise and Ors. (CS/OS/384/2011)

• It was established that the court may issue suitable injunction order considering the volume of business, loss of opportunity and to ensure the effective implementation of the restriction of misusing the Intellectual Property Rights.

• The court appreciated the legal privileges secured by the trade mark owners who are the owners should be given adequate protection while ascertaining the requirement of safeguarding their interests.

• Even unidentifiable and unknown person can be brought under the purview of John Doe orders.

• Enforcement machinery like police can be used to bring implementation in place.

• Viacom18

In India, the Indian judiciary has been actively accepting John Doe order as a principle to secure copyright issues from time to time. This has gain popularity in bollywood rapidly on account of prevention against unauthorized copying and piracy. Recently, Hon’ble Madras High Court has restricted on the application of Viacom18 1250 identified and all other unidentified websites which are under apprehension of hosting pirated content prior to the launch of their latest upcoming movie namely Force – 2.

Through this, John Doe order so issued by the above-referred court the Internet Service Providers will get power and shall remain under the obligation to block websites upon request from the content owners i.e. Viacom18. This is without the need to validate each block from the said court. This has also been directed to block entire websites instead of only blocking the URL. Quite interesting that how long this block will be valid.

Under this ruling the court has unlike the judgement issued by Hon’ble Bombay High Court in petition filed by EROS where it was issued to block website in the month of July, the High Court had ruled that John Doe orders apply only to specific URL or subsections of said website which might infringe or have infringed copyrights in any time earliest. It is important here to understand that while blocking specific URLs it does enhance chances of piracy copies emerging on the same website again and also it ensures that collateral damage would be left out very minimum.

Worth mention here is that the side effect of John Doe order is that it has many-a-times affected those who are not actually involved in piracy or copyright activities.

For example, there was a website namely Mad About Movies which was only a review provider, was even blocked. This website was carrying discussions on the reviews of the movies which were even blocked.

Internet Service Provider’s email id on blocked websites was prescribed by the Hon’ble Bombay High Court as mandatory while issuing the John Doe orders for the release of movies namely Dishoom.

In the recent past, Bollywood has been gaining added advantage of John Doe order as it has started taking benefit of John Doe order and treating it as a weapon of choice to curb piracy.

The trend of using and filing petitions to seek John Doe order started in July 2011 when various internet service providers had blocked access to stop sharing files vide an order passed by the Hon’ble Delhi High Court.

In India, John ooe Order is also termed as “Ashok Kumar order”.

Key Principles established under Viacom18 Case

• The Internet Service Providers will get power and shall remain under the obligation to block websites upon the request from the content owners.

• It is important here to understand that while blocking specific URLs it does enhance chances of piracy copies emerging on the same website again and also it ensures that collateral damage would be left out very minimum.

• Tata Sky Ltd. (Appellants) Vs. Nible TV Inc. and Ors.

Hon’ble Judge Shri V. Kameswar Rao, J.

Laws Applied –

In relation to Code of Civil Procedure, 1908 (CPC) – Order II Rule, 2; read with Code of Civil Procedure, 1908 (CPC) – Order XXXIX Rule 1, read with Code of Civil Procedure, 1908 (CPC) – Order XXXIV Rule, 2, and Rule 3

The area of judgment was to evaluate whether the plaintiff was entitled to a decree of injunction against defendants.

It was held that the plaintiff had been licensed by GOI to act as DTH operator and the condition stipulated was that neither set top box or dish antenna should be moved from the premises of the subscriber of such services. The plaintiff entered into several agreements which spread across broadcasters pan India. The channels were made available for subscription for the viewers on DTH platform of the plaintiff.

The defendant had a website namely www.watch.nimbletv.com through which defendant No. 1 and 2 were using the website of plaintiff company without the authorization of plaintiff.

By said website, a customer could gain access to plaintiff’s website and would be able to access to view subscribed channels using the internet.

This all act was done by the defendants without seeking any permission of the plaintiff. Thereby it had infringed trademark “Tata Sky” of which owners was said plaintiff.

The legal recourse taken by the plaintiff in the plaint was of passing off. It was filed against all persons who had indulged in illegal activity concerning whose identity was not known. It was held in the case of ESPN Software India Pvt. Ltd. Vs. Tudu Enterprise and Ors. wherein the Hon’ble Court had held that jurisdiction to pass an order in nature of a John Doe order against person unidentified was issued.

Accordingly, a decree was passed issued in the nature of permanent injunction against the defendants no. 1, 2 & 3.  Injunction was issued against the unidentifiable person against of whose apprehension who could damage the trademark rights of the plaintiff and thereby cause huge loss to the plaintiff business. The court held that the online tapping done by defendants was illegal was a serious threat to the DTH operations.

The ratio kept in mind while deciding the case was that a party who had chosen to not to participate in court proceedings and stay must afford to suffer the consequences of the injunction order.

In view of the hearings held in the said court of law it was adjudicated by Hon’ble judge that a decree of permanent injunction should be passed and the defendants no. 1, 2 & 3, their partners, directors, proprietors, shareholders and officers including their representatives, franchisees or nominees including their known or unknown related to the defendants should be restrained from the matter linked through all sort of technical ways including and not limited to internet available with the plaintiff and said people should refrain from using the illegal usage. It was further ordered by said Hon’ble Court that defendants no. 1 to 3 were directed not to use/refer to the trademarks owned by TATA SKY. It was not just limited to www.watch.nibletv.com in any manner.

Further, an injunction order was passed against unnamed and undisclosed people who might be in a position to infringe and commit the breach of the legitimate rights of plaintiff.

Key Legal Principles established under Tata Sky Ltd. (Appellants) Vs. Nible TV Inc. and Ors.

• A party who had chosen to not to participate in court proceedings and stay must afford to suffer the consequences of the injunction order.

• An injunction order can be passed against unnamed and undisclosed people who might be in a position to infringe and commit the breach of the legitimate rights of plaintiff.

• Jurisdiction to pass an order in nature of a John Doe order against person unidentified was issued.

Conclusion

Although, from protection perspective, the John Doe order seems to be in the right direction, however, the very purposes need to be safeguarded. The very purpose should not be deviated by a vague injunction which can be an abuse of the process of court of law and this type of general and vague injunction of anticipatory shape should never be granted. To protect the interest, the scope and extent of such orders should be categorically stated to avoid any sort of misuse.

In Indian purview, the usages of John Doe orders have brought interestingly the awareness and feel of protected amongst the Intellectual Property owners. The main point of John Doe order before the court of law is that what if the unidentified defendants are (1) not aware about such orders or (2) not willing to follow such orders (3) avoids and prefers to continue with such infringement even after that then in that case what will be the purpose of having served such orders as it will go totally waste if the ultimate goal is not achieved of having intellectual property rights protection.

Piracy in India has been a huge problem. It is estimated that every atleast 650 million pirated DVDs are sold in comparison of 20 million original published which is 32.5 times. As per estimate piracy causes $2 Billion every year. Accordingly, the significance of John Doe order can be easily ascertained as the same is insurmountable. The right use and awareness campaign by government shall play a crucial role in an effective implementation of the order.

In a case where the injunction was supposed to be denied, the plaintiffs of the infringement is clear of his or her entitled proprietary usage. The court would require applying Law of Equity to analyze the remedial course available whether adequately safeguards the rights of the parties approach to it.

In the recent past, John Doe order has become a powerful tool in the hands of film-makers as in India piracy has been a perennial root cause of losses in the film industry. John Doe order has been a tool to avoid any such courses. It is imperative to bring effective implementation procedures in Indian context to utilize its maximum benefits.

To sum up, it can be inferred from the above discussion that the John Doe order usage has been growing gradually and it is at a nascent stage at present. It is extremely important to understand that the implementation of John Doe orders shall depend on the deeper understanding of the order and inherent legal applicability and will of the Indian Judicial Systems prevailing in India. The mechanism of application of John Doe order entirely depends on the way it is handled and enforced by Indian courts across India.

I hope now you know where to go in case you come across the copyright infringement, of your or any of your associates creative content. Do you have any questions to ask? Feel free to drop a comment below & share the article.

The post What Are John Doe Orders And In Which Situations They Are Granted appeared first on iPleaders.

In this blog post, Shantanu Pandey, a student of the Rajiv Gandhi National University of Law Punjab, describes and details the laws prevalent in India that help to prevent and control water pollution. 

Access to a healthy environment is considered to be the prime concern of the state. Water is considered to be a very precious resource possessed by the country. Pollution of water is one of the severe issues which are being faced by the country in the current scenario. Various laws and policies are being framed to control the pollution of water through numerous ways. Herein discussed are some of the Indian laws which are being passed by the parliament of the country to monitor the pollution of water in the country.

Water Prevention and Control of Pollution Act, 1974

The prime object of this Act is to provide for the prevention of water pollution and cater to the maintenance of the water bodies and carry out activities to promote restoration of water. With the objective of giving practical implementation to this Act, ^[1]the Central Pollution Control Board and the State Pollution Control Board have been established by the central and state authorities.The Central Pollution Control Board is to promote the cleanliness of streams and wells in different areas of the state.The Central Pollution Control Board has the power to advise the central government on various matters, which are concerned with the prevention and control of pollution of water. Under the Act mentioned above, the board has the power to encourage and conduct research and investigation with a view of promoting, the prevention of contamination of water in a significant manner.

Relevance of Section 24 of this Act

To promote the proper implementation of the Act, Section 24^[2] of the Act imposes a duty upon a person to refrain from allowing any poisonous or noxious matter, as determined by the standards laid down by the Central Pollution Control Board, into any stream or sewer or on the land. Another duty imposed by this Act upon the person is that no person shall, knowingly enter into any stream in a manner so as to impede the flow of water or in any other way causes pollution of water. According to this Section, any person who violates or contravenes with the provision of this Section shall be made liable to be punished with imprisonment of one year and six months which may extend up to six years.

Drawbacks of this Act

The Water Pollution Prevention and Control Act suffers from various drawbacks in spite of being one of the earliest acts which were being passed by the Indian Parliament to control the pollution of water. One of the chief drawbacks of this Act is that the Act is silent about the groundwater^[3] management policies. Another drawback with which this Act suffers from is the fact that it does not deal with the indiscriminate tapping of ground water, rain water harvesting, etc.

The Shore Nuisance Bombay and Kolaba Act

The objective, with which this act was being brought into force, was with the purpose of facilitating the removal of nuisances below the high water mark in the islands Bombay and Kolaba. This act aimed at safe navigation of the harbour in Bombay along with the objective of giving importance to the interest of the public. The Act empowered the land revenue collector of Bombay to issue a notice to remove the nuisances or obstructions which exist below the high water mark. The procedure for giving such notice is by affixing the same at a conspicuous place or near to the obstruction or the harbour below the high tide. Under this Act, the state is empowered by a competent authority to remove the obstruction if the notice is not being complied with within one month of issuance of the notice. The implementation can be governed or judged by the fact that, fine was being imposed by this act for contravening with the pollution of water.

Orissa River Pollution Act, 1953

Improper disposal of wastes has been one of the leading causes for the pollution of water in India. Disposal of wastes by the factories, industries, dumping of various toxic and poisonous substances into the river has been found to be the deep root cause of the increasing pollution of water in the country. This Act was formulated with the view of regulating the disposal of waste and effluents into the river by the factories and enable maintenance of the streams and water bodies. With the intention of giving this Act a practical implementation, the state of Orissa had established a board to govern the provisions of the Act above. This Act gives the board the competency to represent the inhabitants of a particular locality.

There is an urgent need to take control over the increasing level of water pollution in the state of Orissa. According to a recent study of water pollution, rivers in Orissa like Mahanadi and Brahmani amount to be the most polluted rivers amongst the rivers present in the state of Orissa. About ^[4]50 percent of water is polluted in these rivers which ultimately makes the survival of human life quite difficult. Sewage, waste from factories and mines, disposal of heavy metals like lead and magnesium are the major pollution causing agents in Orissa.

The Water Prevention and Control of Pollution Cess Act, 2003

Industrial waste is one of the causes of the of water pollution. Often the waste from the industries is being disposed of into the rivers which pollute the river to a significant extent. According to Section 2 of this Act, industries include any operation or process or sewage or disposal treatment or any industrial effluent. Section 3 of this Act provides an exemption to industries from levying cess on those industries, which consume water below the specified limit. Water gets polluted through the toxic or non-biodegradable substances when the processing of these materials is being done in any industry, and such industries are required to pay cess under this law.

The Indian Penal Code and Pollution

Under the Indian criminal law, provisions have been explicitly laid down to punish the person who commits an offence in contravention to the Code. Section 277 of the Code provides for the punishment to be given to the person who commits an offence of fouling of a public reservoir or a public spring voluntarily shall be liable to be punished with imprisonment of three months or with a fine of 500 Rupees or with both. The explanation of this situation can be given through an illustration. A, a resident of Chandigarh, goes near a reservoir and voluntarily puts a toxic substance with an intention to cause harm to the environment and in consideration pollutes the water. The reservoir was fit for public use before, but after the Act of A, the reservoir became unfit for the utilisation of the public. Therefore, A was being held liable for the offence under Section 277 of the IPC, and he was punished with imprisonment of up to three months and a fine of Rupees 500.

The River Boards Act, 1956

This act aimed at the establishment of rivers and the regulation of interstate water disputes.The interest of the public is considered to be the prime concern of this Act. The Act gives the power to the State Government to establish Boards by issuing a special notification.The object of this Act is to resolve and regulate the inter-state water disputes.^[5] Article 262 of the Constitution of India gives the power to the Union to establish and adjudicate the inter-state water disputes prevailing in the country. Through this Act, awards and tribunals were being formulated to regulate the interstate dispute prevailing in a particular country.

Damodar Valley Corporation Prevention of Water Pollution Act, 1948

The Damodar Valley has been among the most flourished river basins which the country has witnessed since time immemorial. With the view of keeping a check on the functioning of this valley, Damodar Valley Corporation was established. During the monsoon season, 80 percent of the waste comprising of waste from mines and industries is discharged into this river. With the coming up of this Cooperation, the agricultural sector had undergone a change. The agricultural area decreased from^[6] 59 percent in 1925 to just 10 percent in 1984. The mining industry had become the need of the hour during that period. The discharge of effluents from these mines was made into this river. This results in the pollution of water.

Right To Clean Water: a Fundamental Right

The Indian Judiciary has initiated a positive step, with the view of controlling pollution of water. Under the Indian Constitution, the judiciary has given a liberal interpretation to Article 21 of the Constitution of India and included the right to clean water and environment under the ambit of Article 21, Article 48, Article 51(g) of the Constitution of India. Various judicial decisions throughout the history of Fundamental Rights have paved a way to the broad concept of Right to Life. The judiciary had propounded that the Right to Clean water comes under the ambit of the right to life and hence the scope of Article 21, Article 48 and Article 51(g) can include the right to clean water. In the case of ^[7]Narmada Bachao Andolan Vs. The Union of India, the Supreme Court, held that the right to clean water is a fundamental right under Article 21 of the Indian Constitution. The court had observed that right to clean water is a part of the basic necessity of the human’s right to life.The state is duty bound to prevent the water from getting polluted.In the leading case of MC Mehta vs. The Union of India, the court held that the preventing the water of river Ganga from being polluted is the need of the hour.

Though many acts have been passed by the Parliament to control the pollution of water still, there is an urgent need for preventing our streams, reservoirs ,rivers, lakes from being polluted. The government should keep a check on the functioning of reservoirs, streams, lakes and a body should be established to monitor the working of the government.

References:

^[1] “www.environmental laws of India/Water Act”

^[2] “Section 24 of the Water Prevention and Control of Pollution Act,1974”

^[3] “Lasya Popanda, Right to clean water, Legally Services India”

^[4] “A Study of Water Pollution,Kapileshwar Sharma,PL Nayak”

^[5] “Article 262 of the Constitution of India”

^[6] “Case study on the Damodar Valley Region”

^[7] “Supra note 3”

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In this blog post, Shantanu Pandey, from Rajiv Gandhi National University of Law Punjab, describes the procedure for applying for a Green Card in the USA. 

Having access to a green card of a particular country is considered to be very beneficial for a citizen of a particular country. As an individual, the citizen of a given country is provided with various rights by virtue of being a permanent citizen of a country. This article mainly deals with different ways through which one can get a green card and the procedure to obtain it.

Green Card through family

Most of the times, people become eligible for a green card because of a family member who is currently residing in the United States. There are various ways to obtain a green card through the family.

Green card to an immediate relative of a person residing in the United States

Ideally, an immediate relative of a US citizen can get a green card easily. Immediate relatives include the spouse, unmarried child under the age of 21, parent if the US citizen is over the age of 21. One benefit which is available to the immediate relative of an already US citizen is that the immediate family member does not have to stand in the line of visa which makes the procedure of obtaining a green card simple and easy.

Procedure to apply for a green card when you are inside the United States

In case the immediate relative of the US citizen resides inside the United States, then the green card can be obtained by following the illustrated procedure:

The first step an immediate relative can follow to get a green card is that he must file the I-485 form to get his application registered for permanent residence.One can do this at the same time when the principal citizen has filed an I-30 application for the alien relative to get the status of a permanent resident.

Another method of applying for a green card is by following a two-way process –

• One can file an I-485 application any time after the principal resident has filed an I-30 petition for the alien relative provided, it has not been rejected.
• Once the I-30 application of the applicant has been approved, the applicant will receive a notice of issue (Form I-797) stating that your I30 application has been approved followed by which one can file an I-485 petition, one has to show the form I-797 indicating that the I-30 application of the applicant has been approved.

Getting a green card outside the United States

In case, one is staying outside the United States and wishes to obtain a green card; one can get a green card through consular processing. The consular processing begins when the United Citizenship Immigration Services works with the department of state to issue a visa after the I-30 application of the applicant is approved. One can travel to the United States when the I-30 application is approved and will become eligible for a green card once the name of the applicant is registered at the US port.

Green card for a family member of a US citizen

The US citizen is eligible to sponsor a green card of a family member under the ambit of a family preference category. These include unmarried sons and daughters under 21 years of age, brothers and sisters, married children of any age. However, under this category of applicants, there is a limitation being laid down in consideration to the number of relatives who can enter the United States after having a green card.

Procedure to apply for a green card when you are in the United States

To obtain a green card while in the United States, the family member can do so by giving consideration to the following process:

• Firstly, the principal US citizen must file an I30 application on behalf of the applicant and the same must be approved, once the application is approved, one must then wait for the priority date in the immigrant visa to become current.
• Once the priority date becomes current, one must file an I-485 Applcation to Register for Permanent or adjustment of status.It is a process through which one can acquire a permanent status.

Procedure for Adjustment of Status

In case one wants to change the status of residence then, one must follow this procedure –

• Determine the basis of your immigration: The first step one must take into consideration is that one must decide the purpose of his immigration, i.e., whether the immigration is family based, employment based, refugee based or first category immigrants. Documents vary in each case. Therefore, one must determine the basis of immigration at the first stage.
• Filing a petition: The next step is to file a petition. Once you have decided the category of your visa, you must file an appropriate petition depending on the purpose of your immigration.
• Check visa availability: After filling up the petition, check if the visa is available at present in the category one has applied for of the immigrant visa. Often the status of the applicant who has applied for a green card is not stated as the priority date is not current. However, one must take into consideration the fact whether the visa is available or not in the category under which one has applied.
• File I-485, Application to Register permanent residence or adjustment status: Applying for a permanent residence is an important task, which has to be taken into consideration by the green card applicant. One must apply at an appropriate time for the application for permanent residency.
• Go to your application support centre: Once the applicant has filled the application, one would be notified to appear at the application support centre and there, the fingerprints of the applicant would be taken. This will act as a security to speed up the process of the issuance of your green card and to permit working in the United States.
• Go for Interview: Once the applicant has visited the application support centre , one must appear for the interview. At the time of your interview, you and the principal visa applicant who had filed an I-30 petition on your behalf must bring the original copies of all the documents at the time of the interview.
• Final decision in the mail: Once the interview of the applicant has been conducted, one will then be notified of the permanent status of the green card status of the applicant. Considering the present decision, The United Citizenship and Immigration Authority would find the status of the green card of the applicant with the State authority.

Getting a green card outside the United States

Even if one is outside the United States, one can still get a green card through the counselling process. This process starts when the USCIS works with the Department of the United States to issue a visa when the I30 petition is approved. Once the applicant has been granted the visa, one can travel to the United States. However, one will become a permanent resident only when the name of the applicant is registered at the foreign port.

Green Card Applicants of special category

• Battered Spouse or Child
• Non-immigrant
• Person born to a foreign diplomat
• Widower

A battered spouse, child, a parent may file a petition for themselves without the knowledge of the first resident under the Immigration and Nationality Act which allows them to file a petition without the awareness of the abuser.

Eligibility for the Spouse or Child

• Qualifying spousal relationship:
  • One is married to a U.S. citizen or permanent resident abuser or
  • Your marriage to the abuser was terminated by death or a divorce (related to the abuse) within two years before filing your petition, or
  • Your spouse lost or renounced citizenship or permanent resident status within the two years before filing your petition due to an incident of domestic violence, or
  • You believed that you were legally married to your abusive U.S. citizen or permanent resident spouse, but the marriage was not legitimate solely because of the bigamy of your abusive spouse.
  • You have suffered battery/extreme cruelty by your U.S. citizen or permanent resident spouse.

Eligibility for a child

Any unmarried child of the permanent US citizen can file a petition for himself if he has been subjected to the following by the permanent US citizen

• He is the child of the US citizen
• The permanent US citizen had lost their citizenship on the ground of domestic violence
• The child had lived with his abusive parent
• You are a person of a good moral character ( a child less than 14 years of age is considered to be of good moral character)

For information regarding parents visit –www.uscis.gov.in

Procedure for filing a petition

If any one of the above wants to file a petition then the following procedure must be adopted by them

Firstly, one must complete the I-360 form and furnish all the supporting documents. Once the documentation is complete, you must then visit the Vermont Service Centre.

Procedure to file a petition if one is living abroad at the time of filing a complaint

An I-360 petition can be filed if the abuser comes under any one of the following categories:

• Abuser is a member of the US government
• Abuser is a member of uniform services of the United States
• Applicant was subjected to extreme cruelty in the United States

In case the applicant applying for the green card is filing a petition for himself, or their child and the applicant furnishes the filing requirements, in that case, a notice would be served to the applicant where 150 days would be given to present before a government agency which protects the victims of domestic violence from further abuse.

In case the I-360 petition of a widow or widower is approved, and the applicant does not have an immigration status in the United States then, such an applicant would be placed under deferred action by the USCIS.

In case one wants to apply for a job in the United States then, one must file an I-765 Employment Authorisation with the Vermont Service centre.

Procedure to apply for green card as K Non- immigrant resident

This kind of green card is obtained by the fiancée and their minor children accompanying them to stay in the United States with their intended spouse.

The fiancé of the US citizen files an I-29 petition for their fiancée. Then, in the year 2000, the Life Act was brought into the picture to speed up the process of the non-immigrant visa. All the applicants holding a K visa are required to file an I-485 petition and register for permanent residence.

Time limit for a K1 visa holder to file a petition

In case you are a K1 visa holder, you need to marry your fiancé within 90 days of your stay in the United States. In case you want a green card, then you must file an I-485 petition within this period . Failing to obtain this you could be deported from the United States.

Additional Documents along with an I-485 petition

• Two passport-style photos
• Form G-325A, Biographic Information
• Copy of your government issued photo identification
• Copy of your birth certificate
• Copy of passport page with non-immigrant visa
• Copy of passport page with admission (entry) or parole stamp
• Form I-94, Admission/Departure Record
• Evidence of your marriage to the U.S. citizen within 90 days (for K-1s)
• Form I-693, Report of Medical Examination and Vaccination Record, if applicable
• Form I-864, Affidavit of Support
• Copy of approved Form I-130 or Form I-797, Notice of Action, if Form I-130 is pending (if K-3 or K-4)
• Copies of any other approved application or waiver you have had about your application for K status (Approved Form I-129F, Form I-601, Application for Waiver of Excludability, )
• Applicable filing fees

Reference- www.usics.gov

In the case of a widow or widower of the US citizen, you can apply for green card if you had married the US citizen at the time of the death of the US citizen provided, you have married the US citizen in good faith and not solely for the purpose of immigration.

Various other ways to obtain Green Card

• Green card through a job offer
• Green card through investment
• Green Card through self-petition
• Green Card through special categories of jobs

Procedure to obtain Green card through a job offer

In this case, the applicant who wants to obtain green card must have a permanent opportunity for employment in the United States. Another method of applying for permanent residence in the United States is by a citizen of the United States sponsoring or filing a petition on behalf of the applicant.

Mostly all the employers file an I -40 petition on behalf of the employee in case, they are found eligible for a permanent job in the United States.

A permanent residence in the United States can be obtained even if one is outside the United States at the time of filing a petition. A consular process would be an appropriate method to file a petition in this case. A consular process begins when the United States Citizenship and Immigration Services works with the department of United States after the approval of the I-40 petition of the applicant who had applied for the green card.

On the other hand, one can obtain the status of a permanent resident while being in the United States while filing an I-485 form for adjustment of permanent status. Once the I-40 petition of the applicant has gained approval, one can file the I-485 form to obtain a green card for establishing the status of a permanent resident in the United States.

Evidence for form I-485 to be fulfilled by the applicant

• Proof of inspection, admission or parole into the United States (Form I-94, Arrival-Departure Record)
• If you have already been approved for an immigrant petition, submit a copy of the approval notice sent to you by the USCIS
• Job offer letter from your employer
• Two color photos which were taken within 30 days
• Form G-325A, Biographic Data Sheet (for applicants between the ages of 14 and 79)
• Form I-693, Medical Examination (not required if you are applying based on continuous residence since before 1972, or if you have had a medical exam based on a fiancé visa)
• Form I-864, Affidavit of Support (completed by the sponsor)
  • This requirement will not apply to you if you are adjusting based on employment petition unless you or a relative own a percentage of the employer company
• Any other evidence establishing eligibility

Procedure to apply for green card through investment

The entrepreneurs, their spouses and children under the age of 21, who have applied for a permanent work area and have invested up to $1,000,000 or at least $500,000 in the field of employment in which they are permitted to work, can obtain a green card for being a permanent citizen of the United States. One of the primary requirements for this category is one must have an I-526 form to obtain a green card for permanent residence. One can get a green card even if one is outside the United States. This can be done through the consular process. The consular process begins once the I-40 petition is approved. Hence, the United States Citizenship immigration service works with the department of state to issue a visa to the applicant who has applied for a green card.

Another method through which one can get a green card while being in the United States is when the I-526 form is approved. After the approval of the I -526 form of the green card applicant, one can file a petition called I-485 for the adjustment of status of the permanent resident. Once your name has been included at the foreign port, you are eligible for a green card in the United States.

Supporting evidence for a form I-485 –

• Form G-325A, Biographic Information, if you are between 14 and 79 years of age
• Copy of government issued photo identification
• Copy of birth certificate
• Copy of passport page with non-immigrant visa (if applicable)
• Copy of passport page with admission (entry) or parole stamp (if applicable)
• Form I-94, Arrival/ Departure Record (if applicable)
• Certified copies of court records (if you have been arrested)
• Report of Medical Examination and Vaccination Record
• Applicable fees
• Approval notice for Form I-526 (Form I-797)

Procedure to apply for a green card through Self- petition

It includes persons with extraordinary abilities, in the sciences, arts, education, business or athletics. It also includes individuals who were granted National Interest Waiver. Individuals of this category can file a petition through consular process in case they are not present in the United States. The consular process begins when the USCIS works up with the department of states after the completion of the I40 petition. An individual can obtain a green card while being in the United States as soon as the I-40 petition is being approved by the department of the state. Once the I-40 petition is being approved one can apply for the issuance of the green card to the individuals and adjustment of status can also be done by him after the approval of the I-40 petition.

Evidence for an I-485 petition

• Evidence of inspection, admission or parole into the United States (Form I-94, Arrival-Departure Record)
• If you have already been approved for an immigrant petition, submit a copy of the approval notice sent to you by the USCIS
• Two color photos were taken within 30 days
• Form G-325A, Biographic Data Sheet (for applicants between the ages of 14 and 79)
• Form I-693, Medical Examination (not required if you are applying based on continuous residence since before 1972, or if you have had a medical exam based on a fiancé visa)

Green card for jobs through special categories

• Broadcaster: Under this category, individuals who are willing to seek employment in the United States and are employed in any field of broadcasting are eligible to apply for a green card in the United States. The term broadcaster includes reporter, writer, editor, announcer, news broadcast host. However, individuals from the entertainment field are not included under this category. Once your I-360 form, Petition for Amerasian widow(er), the special immigrant is being approved, you are eligible to obtain a green card. If the applicant is inside the United States then one must file an I-360. If the I-360 form of the applicant has been approved to obtain a green card through broadcast provisions then one must file an I-485 form, Application for permanent residence or adjustment of status once it is done by the applicant, the applicant would be issued a green card under broadcast provisions.
• Religious Worker: This category includes ministers and non-ministers of religious vocations and occupations. They are eligible to obtain permanent residency under the following circumstances.
  • One must have been a member of a bona fide non-profit denominations for at least two years before filing an I-360 form.
  • Have been working for the past two years immediately before filing petitions a religious minister in a religious vocation either professional or non-professional capacity, or
  • In a religious occupation either professional or nonprofessional capacity seek to enter the United States solely to carry out such religious occupation of the employer’s denomination

One can apply for a green card in the United States as a religious worker by filing an I- I-360 petition. Once the I-360 petition is being approved, the applicant applying for a green card as a religious worker must file the I-485 form and a permanent resident or adjustment.

Procedure for obtaining Green Card for refugees and asylum

If one has been present in the United States for one year and his status as a refugee is not being terminated, then one is eligible to apply for green card. One must file form I-485, Application to register permanent residence or adjust status. Once one is being granted with a permanent residency one will have the adjustment of the status recorded the day one had entered the United States.

Documents required to support I-485

• Form I-485 signed (Box “h” of Part 2 should be marked with the word “refugee” printed on the accompanying line)
• Two photos in an envelope stapled to lower left corner
  • Your name and A-number, if known, should be lightly written in pencil on the back of each photo.
  • Details on photo size, etc., may be found in the Form I-485 instructions.

• Form G-28, if applicable, signed by you and the attorney (or authorized representative)
  • Facsimile signature stamps are acceptable for the signature of the representatives
  • However, you must sign the initial Form G-28 submitted with the application in the original
• Form G-325A
• Form I-693, signed by you and the civil surgeon, with only the vaccination portion completed
  • You may have the vaccination part of the Form I-693 completed at any state or local health department or may choose to make an appointment with a civil surgeon designated by the USCIS to conduct medical examinations
  • Call the National Customer Service Center at 1-800-375-5283 to locate USCIS-designated civil surgeons (doctors) where you live or see the USCIS Civil Surgeons Locator page.
• A complete Form I-693 is required only if:
  • There were medical grounds of inadmissibility noted at the time of arrival in the United States
  • If the refugee status was granted to the individual in the United States by an approved Form I-730, Refugee/Asylee Relative Petition
  • If neither of these conditions applies, all that is required is the vaccination portion
• Evidence of refugee status (This might include a clear, readable photocopy of Form I-94 or a copy of your Employment Authorization Document)
• Proof of any legal name change you have obtained since you were granted refugee status

Procedure to apply for a green card in case of Family

In case a family member wishes to ask for a green card, then one can apply for the same by separately filing an I-485 form. However, a separate I-485 form is needed to be filled by each individual, though, all the forms of the same family must be sealed in one single envelope. In the case of change of address of the applicants who have applied for a green card, one must inform about the same to the USCIS within ten days of the change of address. In this case, each individual of the family must notify the authority in the same manner as the information given by one member of the family will not lead to a change in the address of all the members of the family. One can do so by mailing the AR11 form, Alien’s change address card to the address on the form.

Procedure for change in status of the Asylee

Once an individual has got the status of an asylum one may apply for a green card, after one year of getting an asylee status. The spouse and the children of the asylee are also eligible for the status of asylee in case they were being admitted to the United States as an asylee or were included in the grant of asylum during the period when you were being given the status of an asylee.

Eligibility Criteria for the status of an asylee

• One should have been physically present in the United States at least for one year after one has been granted an asylum
• One must continue to meet the definition of an asylee
• One should not have abandoned their asylee status
• One must not be firmly resettled in any foreign country
• One must continue to be admissible to the United States

Procedure to apply for a green card

One must file an I-485 form, Application for a permanent residence or to adjust status to obtain a green card after being granted the status of an asylee.

As soon as one is being granted a green card, the derivatives of the asylee will have the date of the adjustment of status rolled back one year to the date after one is being granted the status of an asylee.

Supporting Evidence for form I-485

If your asylum status is granted, you should file a Form I-485 with the following supporting documentation (in this order):

• Completed and signed Form I-485, Application to Register Permanent Residence or Adjust Status
• Completed and signed Form I-693, Report of Medical Exam and Vaccination Record, if required.
  • The Instructions for Form I-693
  • The Immigration Medical Examination page
• Applicable fees
  • Asylees must pay the Form I-485 application fee and the fingerprint fee
  • Applicants under the age of 14 do not need to submit a fingerprint fee
• Completed and signed Form I-602, Application by Refugee for Waiver of Grounds of Excludability (if applicable)
• Copy of your I-94 card
  • Asylees may also submit a copy of their approval notice granting asylum or a copy of the immigration judge’s orders showing that you were granted asylum
• A completed Form G-325A, Biographic Information Sheet, if you are between 14 and 79 years of age
• Certified copies of court records (if you have been arrested)
• Two passport-style photos

One must submit any foreign language documents, and the translator must be competent to translate the text in a correct manner, and it must be ensured that the translation is accurate.

In the case of family members of the asylee, the USCIS accepts an I-529 form from the individuals or derivatives of the asylee who do not meet the definition of the asylee to allow the children and spouse of the asylee to become permanent members of the United States. There are enormous advantages of having a green card. However, one must be cautious about the procedure to be followed to obtain a green card.

The post What is the procedure to apply for a Green Card in the USA appeared first on iPleaders.

In this blog post, Shantanu Pandey, from Rajiv Gandhi National University of Law Punjab, describes the different types of US Visa and the procedure which is needed to be followed in order to apply for them.

Getting a visa is being considered to be one of the most complicated processes which a person has to go through before going out of the country. Here we would take into consideration the different types of US visas and the procedure which is needed to be followed in order to apply for them.

Types of Non-immigrant Visas

B1, B2 Visa

This visa has to be obtained by the person who wants to travel the United States for the purpose of business activities or tourism. Specifically, a B1 visa is needed to be obtained by an individual who is to visit the United States for the purpose of negotiating a contract, consult the state officials, settle an estate, attend a conference or a seminar. Whoever is travelling to the United States to participate in a musical program, athletics tournament must obtain either the B1 visa or B2 visa depending upon their purpose of travel.

Who should take B1 visa

• If you are visiting the US to negotiate or sign any contracts
• To meet state

Procedure for applying for this visa

The first step to apply for this visa is to complete the online application form by completing the DS 160 form.

This is a kind of electronic form which is needed to be filled by the applicant applying for the US Visa.

Need for this form

• This form is required to be filled by the applicants intending to establish the authenticity of the procedure.
• It was being brought into picture to speed up the process of the application
• After filling this application form, one must print the application confirmation form to bring at the time of interview.
• Further, one must upload his photograph, provided, the photo must not be older than six months, and it should be photo without spectacles or any other fancy thing. However, if you are applying for a nonimmigrant visa using the DS 160 form, in that case, one must upload his digital photograph at the time of filing the Visa application form. In case one is applying for a nonimmigrant visa using the DS 260 form then one must additionally provide two identical photos of 2×2 size, and the photos must be in JPEG format.
• The next step one must follow is that he must schedule a visa interview. However, there is no interview for those who are less than 13 years or above 80 years of age.
• Once you have scheduled a visa interview, you must then pay the fee for the issuance of the visa
• Followed by the payment of Visa fee, one must gather the required documents for the Visa. The documents one must have at the time of Visa interview are:
  • A passport which is valid for six months beyond your period of stay in the United States
  • Nonimmigrant Visa Application, DS 160 confirmation form
  • Application Fee payment receipt in case the fee is required to be paid before the Visa interview.

Additional Documents Required

One may need to furnish additional documents at the time of Visa Interview to establish the following:

• The purpose of your trip
• The duration of your trip
• Your ability to pay the cost of your trip

The last step before getting a visa is that one must attend the Visa interview. Furthermore, at the time of your interview, you will be asked to give fingerprints, and a digital photograph would be taken. After this, you will be informed how to collect your passport and visa if you are being issued a valid visa by the US consular office.

Exceptions in case of a medical treatment or a domestic worker visa

One requires a few additional documents at the time of the interview if one is travelling to the United States for medical treatment. Here is a list of additional documents you will require in case you are travelling to the United States for a medical treatment

• Medical diagnostics from a local practitioner, stating the specifications of your ailment and the reason for the treatment in the United States
• Letter of confirmation from a physician or medical facility in the United States stating their willingness to treat your ailment and a projected length of all the costs included in the treatment.
• Proof that your living expenses and medical expenses would be paid in the United States.

In case you are travelling to the United States as a domestic worker then you can get this visa if your employer is

• A U.S. citizen who has a permanent home or is stationed in a foreign country, but is visiting or is assigned to the United States temporarily; or
• A foreign citizen who is in the United States on one of the following nonimmigrant visa categories: B, E, F, H, I, J, L, M, O, P, or Q

Exchange Visitor Visa (J1Visa)

A foreigner who wishes to participate in exchange visitor program conducted by the United States must firstly obtain this visa. Short-term scholar, intern, government visitor, professor, physician, student are legally eligible to get this kind of visa.

Procedure to obtain this Visa

Generally, one will have to go through the same procedure for obtaining this kind of visa. However, subject to the exceptions one has to gather some extra documents in consideration to the rules laid down to apply for this visa.

The first step before you can apply for this visa, is to be accepted by the sponsored institution to participate in the student exchange visa program which is being conducted by the sponsored institution and the program is the same in which you intend to participate in, then you would be registered under the Student Exchange Visa Program.

Once you are registered under the Student Exchange Visa program, you must then pay the I-901 fee. One exception in relation to the procedure of the fee of the visa is that applicants applying for this visa are not required to pay the fee if one is participating in the department of state, a US agency for international development or a federally funded educational or cultural exchange program having a program serial number starting from G1, G2,G3 or G7 which is printed upon the DS 2019 form. They are also not required to pay the Visa issuance fee.

Additional Documents Required

• Certificate of Eligibility for Exchange Visitor Status- This form is also known as DS 2019 form, is being provided by the Student Exchange Visa Program to every applicant applying for this visa once your name is entered into the SEVIS system. All spouses and applicants must obtain a separate DS 2019 form in order to be eligible for the issuance of the VISA.
• Internship Placement Form(DS 7002)- Any intern or trainee who has been chosen for the exchange program and is applying for this visa mandatorily requires this form at the time of interview.

Under the US law, there is a provision that the holder of this visa must visit his home country for two years after the completion of the exchange program.This provision is being laid down under Section 202 of the Immigration Nationality Act.

Crew Member Visa (D Visa)

One needs to obtain this type of visa, in case he is working on board vessels or on international airlines. Anyone, who wants to be on board during the normal operation provided, one is intending to depart within a period of 29 days. One exception to this rule is that if one is visiting the United States with the intention to join the vessel, he will work on, then it is mandatory for him to obtain a transit visa along with this visa. One exception is that in the case of this visa one would be required to provide evidence for his transit, letter from an employer to join the vessel. Another rule is that in case one is obtaining a transit visa along with this visa then he/she may be issued a combination of this visa. On the other hand, you are required to pay the visa issuance fee only if it applies to your nationality.

Foreign Diplomat or government official Visa (A visa)

One is required to obtain this visa in case he is travelling to the United States for the sole purpose of engaging in activities on behalf of the national government of the home country. However, there is an exception to this rule, the head of the state qualifies for A visa regardless of his position in the home country. Non-government officials travelling to the United States. One rule, in this case, is that the domestic workers or employers of the A1 visa holders are to be mandatorily interviewed.

Additional Documents Required

A diplomatic note- In order to obtain this visa, one is required to obtain a diplomatic note in addition to the other documents. The diplomatic note is issued by the government of your home country. The note should contain the following relevant details

The government official’s or employee’s name, date of birth, position and title, place of assignment or visit, purpose of travel, a brief description of his or her duties, travel date, and the anticipated length of the tour of duty or stay in the United States, and the names, relationships, and date of birth of any dependents and other members of household who will be accompanying or joining the government official or employee.

In the case of an immediate family member who is applying separately from the principal visa applicant, an I-94 form is also required to obtain this visa. One exception, in this case, is that applicant obtaining diplomatic passports are exempted from paying the visa fee.

Diplomat and Foreign Government Official Visa (A3 Visa)

This kind of visa can be obtained by the employers or domestic workers of the diplomats. There are a few additional documents required for this visa along with the mandatory documents required for every visa. The employment contract should be written in English language or in other cases, in a language which is being understood by the employer. The contract should contain the following details.

• Description of Duties
• Hours of work
• Minimum wage
• Overtime work
• Payment
• Transportation to the United States

The employers and domestic workers must keep their passport and a copy of the contract with them.

Employees of international organisation (G Visa)

If one wants to travel to the United States, with a view to being the employee of an international organisation, then one is required to obtain a G visa in order to travel to the United States.

These visas are required to be obtained by a person who is are permanent mission members of a recognized government to a designated international organizations and their immediate family members(G1 Visa), representatives of a recognized government travelling on a temporary basis to the United States with a view to attend meetings of a recognized international organization and their immediate family members(G2 Visa), Representatives of a non-recognized or non-member government and their family members (G3 Visa),Individuals coming to the United States to take up an appointment at a designated international organization, including the United Nations, and their immediate family members(G4 visa). Personal employees of the G1 to G4 visa holders(G5 visas)

Procedure for applying for G Visas

In the case of an interview procedure, the G1 to G4 visa holders generally do not require an interview. Though, an embassy consular might say to you to attend an interview. On the other hand, there is a compulsion to the attendants and personal employees(G5 Visa holders to give an interview. One exception to this rule is that the G1 to G4 visa holders who are on an assignment and are reapplying for their visa would require a DS 1648 form.

North Atlantic Treaty Organization Visa

One is needed to obtain this kind of visa in case one is travelling to the United States as under the provision of an agreement under the North Atlantic Treaty Organization or the protocol existing upon the provision of North Atlantic Treaty Organization. This includes national representatives, international staff, and immediate family in the category of (NATO 1 to NATO 6)visa. Personal employees would be issued NATO 7 visa. One exception to the rule of passport and visa is that most of the armed forces personnel are exempted from the from the passport and visa requirements under the following circumstances

• Legally attached to the allied NATO headquarter in the United States and are travelling on official business.
• Entering the NATO forces under the NATO status agreement.
• Family members are not being exempted from passport and visa requirements. Therefore they are required to obtain
• The military personnel must present their official identification card and the NATO travel orders.

H1 B Visa

In case someone wants to travel to the United States with the objective of work, then one is needed to obtain this visa. This kind of visa is obtained by a person who is being appointed in the United States as a person with a speciality occupation. It requires education and merit and skills, government to government research and development.

H2 A Visa

Generally, temporary agricultural workers are needed to obtain this visa. Seasonally nationals of designated countries subject to various exceptions and in the interest of the United States

Additional requirements to obtain this visa

These types of temporary worker visa require the prospective worker to file a petition with the U.S.citizenship and immigration services. The first and foremost requirement to apply for this visa is to obtain a labour certification from an authority of a labour department. Another additional requirements to obtain this visa is the form I-129(petition on behalf of the non-migrant worker). After that, the petition is being filed under the appropriate authority. Once the petition is being approved, the prospective employer issues a notice of action which is denoted as form I-797.

In addition to these documents, one will require the receipt of the approved petition in order to obtain this visa.

L Visa

In case, an individual wants to work in a company which is a company which is a subsidiary company of the employer, in which the applicant is already employed in, then one is needed to obtain this kind of visa. One must apply for this visa in case one wants to work on an executive or managerial or a position requiring specialised skill or knowledge. In order to obtain this visa, one must be employed by the employer continuously for a period of 1 year within the preceding three years. These visa applicants must be included in an L blanket petition. Once you are being included in an L blanket petition, one must bring I 129 S form with them at the time of interview

F1 Visa (Student Visa)

If an individual wants to enter the United States with a view to pursuing their higher studies, then one is required to obtain this visa. However, an exception to this rule is that if wants to visit U.S for a short period then a B visa would be appropriate.

Procedure to apply for this visa

Before one applies for this visa, one must apply and be accepted for the Student Exchange Visitor Program(SEVP). Once you are being accepted by the school, you will be then enrolled in the Student Exchange and Visitor information system. You must then pay the I 901 fee. Once you have paid the fee, you will then be provided by an I 20 form by the school, which you must produce to the counsellor at the time of your interview.

Additional Provisions in relation to this Visa

In case one is a new student who has applied for this Visa, then you would be issued an F1 visa or an M1 visa 120 days before the course you have applied for is beginning. However, you would not be allowed entry into the United States before 30 days of the starting of the course for which you have applied. In addition to this, it is being provided that continuing students must enter the United States at any time before the starting of their course.

Other additional documents might also be required as an evidence of your preparation which might include

• Your transcripts, degrees, diplomas or certificate from the schools you attended
• Standardized test scores required by the US school you have applied for.
• Once intention, to depart from the United States upon the completion of the course.
• Mode of payment of educational, living and travel costs.

Types of immigrant visas

IR1 or CR 1

In case one wants to migrate to the United States permanently, and his/her spouse is a US citizen, then one can do so by obtaining any of these visas.

Procedure to apply for this visa

In order to obtain this visa, the first step one must adopt is filing a petition with the Department of Homeland Security, US Citizenship and US services by filling a form called I-130 for your spouse to immigrate to the United States. In order to be eligible to sign a petition one must be at least 18 years of age to sign the Affidavit of Support (Form I 864 and I 864-EZ)

Once the petition is being signed by the US citizen, after that the petition will be sent to the National Visa Center. Once received, the National Visa Centre will request you to fill form DS 261, choice of address and address of the agent. In case, one already has an attorney, then one will be not be required to fill the DS 261.After the filing of this form, one will be requested to pay the visa fees. After that, you will be requested to submit the required documents along with application form, civil documents and more.

Things for which fee is being charged

• Filing of petition for an alien relative, Form- I 130
• Processing of the application, DS 260
• Medical examinations and required vaccinations
• Other costs include transaction charges, photocopying charges, etc.

The fee is required to be paid only if demanded by the National Visa centre.

Additional Documents Required

1. Affidavit of support- An affidavit of support signed by the US citizen for the spouse is mandatory to be brought to the venue of the interview. These include I-864, I 864A, I 864EZ, I 864W
2. Form DS 260, immigrant visa and alien registration application.
3. Civil Documents- The category of civil documents include, Birth Certificate, Marriage Certificate(original copies)
4. Completed Medical Examination Form
5. Category of vaccinations required – 

• Measles
• Meningococcal
• Mumps
• Pneumococcal
• Polio
• Rotavirus
• Rubella
• Tetanus
• Varicella
• Hepatitis A
• Hepatitis B
• Influenza
• Influenza type b (Hib)

E1, E2, E3 and E4 (Employment Visas)

These visas are generally needed to be obtained by the persons who want to travel to the United States with a view to seeking employment in the United States

The first step to apply for this visa is obtaining a labour certification from the Department of labour, once it is received, the applicant applying for the visa must then file an immigrant petition for labour Worker, Form I-140

Employment First Preference(E1 Priority Workers)

The applicant falling under this category must be a beneficiary of an approved immigrant petition for foreigner worker. Applicants of this visa are not required to obtain a labour certificate. These include persons with extraordinary capability, Outstanding professors and research scholars, Multinational managers, and executive.

On the other hand, E2 visa applicants include, persons holding an advanced degree, persons, with exceptional capacity. Generally, E3 visa applicants include skilled workers, professionals.

Provisions with regard to E4 applicants – Certain special applicants are being included in this category. They need an I30 form instead of an I 40 form

Procedure to apply for these Visas

Once your petition for the visa has been approved, it is then sent to the national visa centre which then assigns you the date of your interview. The applicant will then be instructed by the National Visa Centre to fill the form(DS 261). Once, the applicant has filled up the form then, the applicant is required to pay the fee. After, the fee is being paid one would be requested by the NVC to submit the required documents.

Financial Requirements

When one goes for the interview, one must prove that one will not be a burden to the United States and would be able to bear the costs. In case the applicant who has applied for the visa must fill the I – 864 form.

One must be subjected to complete the medical examination prior to the interview. Once the visa is being issued to you, you will be provided with a sealed packet which you must not open by yourself rather, it must be opened by the counsellor at the time when you enter the United States

Diversity Immigrant Visa

Section 203(c) of the Immigration Nationality Act provides for a class of immigrants which are called diversity immigrants with historically low rates of immigration to the United States. According to the 2018 DV program countries like, Bangladesh, Brazil, Canada, China (mainland-born), Colombia, Dominican Republic, El Salvador, Haiti, India, Jamaica, Mexico, Nigeria, Pakistan, Peru, Philippines, South Korea, United Kingdom (except Northern Ireland) and its dependent territories, and Vietnam are not eligible. However, persons born in Hong Kong and Taiwan are eligible. However, it is to be noted that there is no registration fee to be given this time to obtain this visa

Procedure to apply for this Visa

The first step one must take into consideration in order to obtain this visa is that one must submit his/her entry through the electronic visa website i.e., www.dvlottery.state.gov during the specified registration period. Once the applicant submits the entry, he would then receive a confirmation screen containing the name of the applicant and a unique number. One must retain this number for the interview prospect through this number only. One must fill the entry on his own, without the help of any visa consultant.

Once the applicant has filled the entry then, he would be notified whether the entry of the applicant is selected or not. In order to check the status of the application, one must enter the unique confirmation number which the applicant had received at the time the applicant had submitted his entry.

If the application of the applicant is being selected, then the applicant would be directed to the page which would provide further information regarding the payment of fee and other applications. The applicants must then confirm his qualifications in consideration to the provided guidelines. One must have completed his higher education (10+2) in order to obtain this visa

He must also possess the work experience of minimum two years in order to obtain this visa. After completing this step, one must submit his application by filling up the DS 260 form. One must then prepare the supporting documents required for this visa. After this lastly, the applicant should give the interview and travel to the United States.

The application should contain the name of the spouse, children, adopted children, unmarried children below 21 years of age. There are various other kinds of US visa for which the Indian citizens can apply and get admitted to various kinds of courses

The post All about the different types of US Visa and how to apply for them appeared first on iPleaders.

In this blog post, Shantanu Pandey, from Rajiv Gandhi National University of Law Punjab, discusses various aspects concerning visa bulletins. 

Migrating to the United States and getting a permanent citizenship there, for different purposes is a significant way for obtaining a green card. However, the visa process is quite lengthy and often creates confusion among the classes of immigrants which in turn delays the issuance of green cards to the applicants. The concept of visa bulletins has, however, helped to curb the delay in the publication of the visa to a great extent. This article would deal with various aspects which are specifically concerned to the visa bulletins.

Meaning of Visa Bulletins

A visa bulletin refers to a monthly publication which is being published by the department of state every month to serve as a guiding matter to the counselors and the applicants, who have applied for an immigrant visa to get a permanent citizenship in the United States. The visa bulletin contains the names of the candidates who have applied for an immigrant visa along with the cutoff dates and the priority dates which are available for a particular country as per the availability of the visa. The visa bulletin contains a list of immigrant visas available in the family based category. However, in the case of an immediate relative, like spouses and children, immigrant visas are readily available for them as they are being included in the category of first preference.

The concept of priority date

The concept of priority date is quite confusing for the applicants who are applying for a green card for establishing a permanent residence in the United States. The idea of priority date is a concept which determines as to when the individual of a particular country who has applied for a green card would be able to file an application for the adjustment of status (I-485) application. The concept of priority dates also determines as to when an applicant who had applied for the visa can get an immigrant visa through consular processing. The importance of priority dates is that when a foreign citizen had applied for a green card. The priority dates in the visa bulletin state the time as to whether the applicant can get his immigrant visa or whether one can be granted the adjustment of status after one has filed I-485 or one can be granted an immigrant visa through the consular process. These are also known as cut off dates. The cut-off dates are compared up with the priority dates to check, whether an applicant who has applied for a green card would be able to obtain a green card after the approval of I-485 or through a consular process.

Process to establish a priority date

The visa bulletin contains two categories for getting a green card or an immigrant visa namely employment visa immigration and family based immigration. In the case of employment-based immigration, the priority date can be established by two ways. One way of determining the priority date in the event of employment based immigration is through the labour certificate. In the cases requiring labour certificate, the officially acknowledged priority date is the date when the case is being filed with the US Department of labour. In the cases where labour certificate is not required then the priority date is assigned on the date when the applicant has duly submitted the I-40 application to the US Citizenship and Immigration Services(USCIS). However, if one wants to obtain an immigrant visa through a family based petition, in that case, the priority date would be assigned by the date when the I-30 petition for the alien relative is duly submitted by the prominent citizen to the United States and immigration services. However, the first preference relatives, i.e., the spouse and the children can easily get a green card as there is no backlog in this category in most of the cases.

Changes introduced in the Visa Bulletin since 2015

Before 2015, the cut-off dates and the dates of final action were being laid down in the visa bulletin in the same chart. However, in the year 2015, with the intention of speeding up the process and avoid confusion regarding the priority dates, the department of state had made a provision for dual charts to be laid down in the visa bulletin. The first table represents the date of final action^[1]. Through this table, the applicant can get to know as to when one is eligible to obtain a green card or an immigrant visa. On the other hand, the second chart indicates the dates when the applicants who have applied for a green card or an immigrant visa will be required to assemble and submit the documents to the national visa center. Under this system applicants of specified category are eligible to file an I-485 well in advance of green cards being available to the applicants. Every month the department of state publishes a visa bulletin in which a limitation is being laid down in the number of immigrant visa and green cards that can be issued from a particular country. The visa bulletins contain the current dates and the priority dates. The current dates indicate that there are enough number of permits available for a citizen of a particular country and one can file an I-485 petition or an I-30 petition, and one is eligible to obtain a green card.

In a case, under the visa bulletin, the FA chart indicates that the demand for visa exceeds the number of visas available, then under the FA chart, the department of state introduces the concept of a cut-off date. Beyond this date, the foreign national is not eligible to file an I-485 petition, and one is either not eligible to obtain a green card. Visa bulletins are issued in advance for the upcoming month by the department of the state. However, if the FA chart shows that the current date as per the priority date is not available for September, but, it says that in the month of October current dates are available for the visa and the applicant files an I-485 petition, which reaches the (USCIS) before the current date, then the USCIS would reject the application of the applicant at once.

Benefits of filing an adjustment application for obtaining a green card

As soon as the candidate is filing an I-485 application, irrespective of the case whether it is approved or not, the applicant who has applied for the adjustment of status is eligible to demand the benefits which are given to the applicant who has filed an application for adjustment of status. Therefore the visa bulletins are of great help to the counsellors and various groups of individuals and are considered to be a very relevant concept in the current scenario.

Reference:

^[1]“Retrieved From,www.travel.state.gov/visa bulletin”

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In this article, Anubhav Kumar Pandey explains the common problem in hiring an advisor in exchange for equity or money. 

Understanding equity

Let us understand equity by reviewing our environmental classes lessons which we all learnt at school. Steps required to grow a plant!

• First, you sow the seed.
• Second, you keep watering it on a daily basis.
• Third, you wait for some time with patience.
• Fourth, with due respect to time, you will get the fruits of the efforts you made.

The same concept applies to equity too. It is an ownership in the business. If you own 200 shares of company X which has a total of 1000 share in public domain. You are 20% owner of company X.

Equity advisory

To an alternative to borrowing money, a company can raise capital by selling equity. As an equity advisory, a person or a firm gives independent financial advice to companies issuing equity via the market. Advisors, who are mostly veterans in their field advise start-up companies and in return takes a certain share of the equity of the company. The work of an advisor involves, advising, bringing funds, providing solutions to the problems the company is facing. This is equity advisory.

What does equity advisor do

Good equity advisors have great network, reputation, and skills required to boost the growth of any company. Having an advisor in exchange for equity or money has its own pros and cons. Bringing funds, hiring a person, solving issues are few of the jobs which an advisor does.

How much equity to give and what kind of equity is it

Incentives are a crucial part of doing any business. It is a tricky part when it comes to dividing the equity between the founders, team members, directors, investors and advisors. Diving equity poses a challenge to the founder. Typically a start-up allocates 1/10%  – ½% of equity for the advisors vested (explained below) for 3 or 4 years. Keeping the grant small is the key. 

Pic courtesy https://www.linkedin.com/pulse/how-divide-equity-among-startup-founders-investors-advisors-kazanas

There are various models too which are helpful in dividing the equity in a company. One such model is Slicing pie model.

Different kinds of equity available are as follows.

Sweat equity

These equities are issued to exceptional employees or directors or officers for performing considerably well and adding to the Intellectual Property Rights of the company in any form. Sweat equity is governed by section 54 of the Companies Act 2013. Sweat Equity is a grant of shares at discount or without monetary considerations. A company can only issue sweat equity if it fulfils the following conditions.

• The issue is authorised by a special resolution passed by the company.
• The resolution specifies the number of shares, the current market price, consideration if any, and the class or classes of directors or employees to whom such equity shares are to be issued;
• Not less than one year has, at the date of such issue, elapsed since the date on which the company had commenced business; and
• Where the equity shares of the company are listed on a recognised stock exchange, the sweat equity shares are issued in accordance with the regulations made by the Securities and Exchange Board in this behalf and if they are not so listed, the sweat equity shares are issued in accordance with such rules as may be prescribed.

Employee stock ownership plan (ESOP)

ESOP is a grant of an option to purchase shares at a predetermined price given to employees. It is in the form of incentive and can be issued only to employees and officers. It is a form of remuneration given to employees. ESOPs can be in the form of Stock Option Plans, Phantom Equity Plans and Stock Purchase. Different companies have their different eligibility criteria for ESOP schemes but there is statutory condition which needs to be followed.

• An employee who is a promoter or belongs to the promoter group shall not be eligible to participate in the ESOP.
• A director who either himself or through his relative or through anybody corporate, directly or indirectly, holds more than 10% of the outstanding equity shares of the company shall not be eligible for ESOP.

Should equity be vested or should it be given on a DRIP basis

There are two things.

• First, vesting the equity which means, at the very beginning each founder gets his or her full package of stocks at once but, the company has the right to purchase a percentage of the founder’s equity in case he or she walks away. It is an observed practice for companies in India to vest equity for a time period of 3 years (36 months). The longer you stay, the larger percentage of your equity will be vested until you become fully vested in the 36th month.
• Second, DRIP or dividend reinvestment plan. This is a long term prospect. A dividend reinvestment plan (DRIP) is a method through which existing shareholders can reinvest their dividends to purchase additional shares of the company.
• Out of these two, vesting is considered as your best friend. Let us understand this by narrating a simple story. A and B start a company and divide equity among them on a 50-50 basis. After working for a complete year, B decides to walk out and do work on his own. Now, in this situation A will be obliged to give 50% of the company’s stake to B. But if the equity would have been vested, the situation would have been completely different.

How to structure the performance standard of an advisor

In the practical arena, it is very hard to find advisors who can continue to maintain their performance same for the whole time span of 3 or 4 years, whichever is in the advisory agreement. Therefore, it is advised by most veterans that, the advisory agreement should have the following structure, One year of NSO shares, monthly vesting, no cliff. (Cliffs basically allow you to “trial” a hire or partnership without an immediate equity commitment.)

Hiring an advisor in exchange of money

The technicalities are the same just in place of equity, the advisor will be facilitated with money either on a monthly term or in whichever manner their agreement facilitates it. Most advisors do not look for money as equity is what makes them rich. Equity gives you the power to own a part of the company. All the big billionaires in the world derive their wealth from the equities which they have in big companies.

Cash flow Vs equity. Cash might help you to receive a permanent flow for a short duration of the agreement, but equity helps to own partnership stake in a particular company.

Let us now move to common problems in hiring an advisor in exchange for equity or money

#1 What if advisor starts a competing company or advises competitors

• When founders and co-founders of a company look for an advisor, trust is an important factor which they look for. The company bestow trust upon the advisor and at the same time expects the same in return. But there are situations where your advisor might start a competing company or starts advising competitors. What to do in such situations?
• Solution to this problem is an advisor’s agreement. Time is one of the most important things which your advisor is giving to you and it is indeed valuable to your advisor too. Having a legal backup ready is valuable for both the advisors and the company founder too. It assures the advisor of the equity or whatever incentive is to be given to him. A proper legal framework must contain clauses which specifically mention that your advisor will not be involved with the same kind of business and they will not advise your competitors or share your business ideas with them.

#2 What if the advisor starts to leak your confidential papers and ideas

The solution to this problem is related to the first problem. There can be situations where your advisor might break some confidential obligations imposed upon him. The solution to this is to have a strong Confidentiality clause in your advisor’s agreement.

These are the following ways to have a strong confidential information clause in your advisor’s agreement.

Having a strong No conflicting obligations

It is recommended to have a strong ‘No conflicting obligations’ in the advisor’s agreement.

Having a strong proprietary information clause.

The clause may read as follows.

• During the term of this Agreement, Advisor may receive and otherwise be exposed to information regarding the patents, trade secrets, technology and business of the Company.  Advisor therefore agrees that all Proprietary Information, whether presently existing or developed in the future, whether or not patentable or registrable under copyright law, shall be the sole property of the Company and its assigns, and that the Company and its assigns shall be the sole owner of intellectual property and other rights in connection with such Proprietary Information.
• “Proprietary Information” includes, without limitation, any information created, discovered, developed, or otherwise known to the Company, all inventions, works of authorship, trade secrets, business plans, confidential knowledge, data or any other proprietary information of the Company and any information assigned or otherwise conveyed to the Company by another entity.
• To have a look at sample advisor’s agreement, click the following link.
• Further, having strong non-disclosure clause, no improper use clause is recommended.

#3 Deciding expenses and compensation

• It is for the company’s administrator to decide how to compensate the advisor. Should they be compensated with equity or money? In general advisor’s agreement contract contains a compensation clause which goes as follows.
• In consideration of the foregoing Services, the Company will grant Advisor, subject to approval of the Company’s Board of Directors (the “Board”), an option to purchase XXXX shares of the Company’s Common Stock at the fair market value of such stock as determined by the Board on the date of the grant.  The foregoing stock option shall provide that the shares subject to such options vest in equal monthly instalments over a period of four (4) years, provided that Advisor is still performing Services for the Company.

#4 What representations to take from the advisor

Fundraising – Capital is the biggest requirement for any business to grow. The founder and members of any company depend on their advisor when it comes to fundraising. One of the most important duties of any advisor advising a company is to advise them on places from where funds can be raised. Every company have different expectations from their advisors depending on the field of work of the company.

Here are few general representations to take from the advisor.

• Advising- As the name suggests, it is the responsibility of the advisor to advise the company on all matters. Even at times, advisors are expected to sort the matters relating to equity between the founder and co-founder.
• Product development– An advisor is expected to give ideas regarding the development of products, how to improve the quality of existing products or services.
• Recruiting– Advisors are involved in hiring members for company too.

#5 After taking equity advisors do not add much to value

Not all advisors are created equally. All those who are looking for an advisor need them as they add value to their business. Advisor tends to lose interest when the company’s performance is not on par with the expectations. When availability, desire and priorities of an advisor change, it is an indication that your advisor won’t add much to value to the company.

How to tackle such situations? What to do when, after taking equity advisors do not add much to value to the company?

First, try to talk it out. Try to resolve the difference between a company and the advisor as the relation between an entrepreneur and his advisor depends upon trust. If things do not work out, the only solution left is, terminating the advisor’s agreement.

Under what circumstances can the advisor’s agreement be terminated and what are its consequences

An advisor’s agreement may get terminated on the account of any reasonable reason such as,

• When the advisor starts a competing company or give advice to a competitor
• When the advisor breaks the confidentiality clause.
• When the advisor is not adding much to value to the company.

A time limit to terminate the agreement between company and advisor exists, which generally is of 3 years. This time period is subject to certain conditions such as,

• With the mutual consent of both advisor and company, the agreement can be extended for a period of 1 year (preferably).
• Both, the advisor as well as the company is free to terminate the agreement at will subject to a notice of 30 days prior to termination.

Consequences of termination of an advisor’s agreement

• Each party shall be released from all obligations and liabilities to the other.
• But such relief shall not release the advisor from the duty of keeping the intellectual properties of the company a secret.
• The advisor shall promptly deliver to the company all documents and other materials of any nature in advisor’s possession pertaining to the services, together with all documents and other items containing or pertaining to any Proprietary Information.
• Share in equity will depend upon the nature of the contract between company and advisor. If the nature of equity is vested consequences will be as explained above in the section of vested equity.

When and how the advisor will leave the company

The advisor will take an exit when the advisor’s agreement will come to a conclusion. As specified in the agreement, the advisor will take an exit with his allotted equity or money at the fulfilment of the time period mentioned in the agreement. If there is a mutual consensus between the advisor and the company, the agreement might get extended for a further duration of time. The advisor may also take an exit when he does not conform to the agreement clauses of the agreement.

This was all about the common problems in hiring an advisor in exchange for equity or money. Do comment and share with your friends and family.

The post What are the common problems in hiring an advisor in exchange for equity or money appeared first on iPleaders.

In this article, Anubhav Kumar Pandey talks about the legal fee one can expect to pay for divorce cases in India and factors on which a lawyer’s fee will depend.

There are more than 2.18 crore cases pending in district courts across the country. 12 states have more than 5 lakh cases to decide while a little more than one case, on an average, is awaiting conclusion for at least 10 years. Cases for divorce is not an exception. In India, divorce cases take years before they are finally settled. The court process is tedious and requires money at every step. For every draft of application, appearance in court your lawyer will charge with some or the other amount. Therefore, it becomes important for us to know what exactly can be the lawyer’s fee one can expect to pay for divorce cases in India. Here is a detailed report on factors on which a lawyer’s fee depends when it comes to cases relating to divorce in India. What are the different procedure or a layman may say checkpoints at which money has to be paid?

Factors on which a lawyer’s fee depends in India

#1 A Lawyer’s fee depends upon his experience 

It is understood and expected of a good lawyer to charge more fee compared to any other decent lawyer. When I say a good lawyer and a decent lawyer, one can assume the difference between the two. A well-established lawyer might even take fees per hearing which he will make in the court. For every draft, every application, he might charge a hefty amount. And there is a reason too for this.

A well-established lawyer knows how to turn your case and lift it from barren land to a fertile plain. Letting the secret out, even a judge respects and listen more closely to the points made by experienced lawyers.

One might even find lawyers wandering around the premises of any family court in any city who guarantees you a win-win situation that too in a lump-sum amount of INR 10,000 to 15,000. Beware of such lawyers. Such advocates often play with the clients. They initially say the case will get settled within lump-sum amount but later ask for money to facilitate court proceedings and other miscellaneous charges. They intentionally delay the procedure and there have been situations in the past where the couple seeking divorce left the very idea of it due to the heavy amount of money flowing through their pocket. Thanks to these lawyers! They saved a marriage but looted the party.

#2 A lawyer’s fee depend on the financial status of the party fighting the case  

It will not be incorrect to say that, one of the factors which a lawyer considers while deciding his fees is the financial status of the party who wants a divorce. In the practical arena, it is often found that the same lawyer might charge a poor farmer less when compared to big businessmen. There are veteran lawyers, like Sri Ramjethmalani who makes all his asset through 10% of his cases only, rest 90 % of the cases he does for free! Therefore, a lawyer’s fee also depends upon the financial status of the party fighting the case.

#3 Personal law to be applied in your case

In India, there are different and separate enactments for every personal law. For Hindus, the matter relating to marriage and divorce are dealt with the Hindu Marriage Act. In the same way, Indian Muslim are governed by their personal Shariah law and Quran. In Hindu-dominated cities, it is often difficult to find good lawyers who can fight Muslim divorce cases and ultimately they charge a good amount for their consultation.

#4 A lawyer’s fee depends upon the nature of the divorce: contested or mutual

This is the point which plays a decisive factor in deciding the lawyer’s fee. A divorce case through a contest, that means when either of the parties is not willing to give the divorce, takes long years to get finally settled. One party to a marriage wants a divorce and other wants to remain in the bond of marriage. Therefore, lawyers charge more in cases where the divorce is through a contest. In cases of mutual divorce, the lawyer charges fewer fees compared to what he charges for divorce through a contest.

Reason behind divorce cases being so expensive

The reason lies in the procedure. Therefore, to understand the reason as to why a divorce case requires a hefty amount of investment in terms of money, it is important for us to understand the procedure involving divorce cases.

Procedure for divorce through mutual consent

• Both the parties need to file together with a petition seeking a divorce before the District court.
• Before the filing of the petition, married couple should make sure that they are living separately for a period of one year or more. After the petition is allowed, parties are required for filing of the statement.

If any party is not available, any such family member of such party may file the statement on his behalf. Once this is done, ‘First motion’ is established.

• Couple seeking divorce by mutual consent will have to give the reason why they are not able to live together and mention in the petition that they have not been able to live together and that they have mutually agreed that the marriage should be dissolved.
• Court after a period of 6 months and not more than 18 months (cooling-off period) will give a date for listening to the parties.

If the case is withdrawn or the parties do not move to court at the given date(s), the petition stands cancelled. After hearing to the parties and on being satisfied, the court may pass a decree of divorce declaring the marriage to be dissolved.

Paper Requirement

1. Income Tax returns (3 years)
2. Details of present income
3. Birth and family details
4. The details of the assets

Procedure for contested divorce

• Lawyer files for a divorce petition on behalf of the petitioner in family court or civil court after which court issues notice to the other party.
• The opposite party has to appear either himself or along with an advocate. Later is preferred.
• Court might send the matter to mediation with the district legal services authority. If not sent for mediation, the procedure goes as follows.
• Pleading begins. Allegation and counter-allegations are made by the parties contesting the divorce. It is this step which takes the time and increases the cost of litigation.
• Respondent leading evidence and cross-examination by the petitioner lawyer.
• The conclusion of the evidence and finally closing with final arguments.

A thumb rule, the cost of litigation is directly proportional to the time duration of the litigation.

City wise report on fees one can expect to pay for a divorce in India

Delhi

• By the virtue of the place being the capital of the country, one find multiple options available when it comes to choosing of lawyers. Divorces cases are fought by various lawyers. Along with the options available for individual lawyer consultation, one can even go to law firms based in Delhi.

• Therefore, if you are opting for any decent lawyer the minimum fees will be starting from INR 2000 and the higher limit might even go to lakhs.
• This is mere the consultation fees. Rest if you hire any lawyer, either independent or through a law firm, there will be charges at every step. Per appearance fee, drafting fee, court fee (one time), photocopy charges, and it all can cost you around lakhs!
• Though the figure is ambiguous but it has its reasons for being so. No one knows, how many years your case will be heard in the court. You might give 10 Lakhs to a veteran and get it done within few hearings or you may even pay an average charging lawyer, say INR 10,000 per hearing and get it done within 3-4 years!

Here is a link providing a good legal solution for cases relating to divorce in NCR.  http://cliklawyer.com/index.php/service/avail_service

Mumbai

Being the financial capital of India, Mumbai is litigation expensive city.

For mutual consent divorce → INR 15,000 – 30,000 (for complete process) Lawyers with experience of 1-3 years.

Divorce through contest → This is the real deal. Lawyer charges in Mumbai from a minimum of INR 3000-7000 per hearing (Experience of 3-5 years). Going for a veteran lawyer can eves cost you around INR 35,000 per hearing.

Bengaluru

In Bengaluru, litigation expenses are less when compared to other metros like Delhi or Mumbai. The consultation fee of lawyers with experience of 1-3 years can start from INR 1000.

Again the upper cap cannot be stated by anyone as there is no law which limits the fee charged by lawyers in India.

Apart from consultation fees, the charges per appearance may vary. There might even be decent lawyers who can relieve you from all the daily payments and fix a lump-sum amount.

Here is a link where you can find lawyers in Bengaluru https://www.urbanclap.com/bangalore-divorcelawyers?p=1

Hyderabad

In Hyderabad, the litigation expenses are again high and similar to Delhi, Mumbai. An average consultation fee can be around INR 2000 and per appearance fee even be higher. Here is a link which might help you http://lawrato.com/divorce-lawyers/hyderabad

Chennai

When it comes to Chennai, the litigation expenses is not as exorbitant as it is in Delhi, Mumbai or Hyderabad. Owing to the history of legal practice the old and shining Madras High Court, the price of a consultation is minimal as the profession of lawyer is quite common in Madras.

Here is a link which might help you if you are looking for divorce lawyer in Chennai https://www.urbanclap.com/chennai-divorcelawyers?p=1

http://lawrato.com/divorce-lawyers/chennai

Kolkata

Like any usual metro city, seeking divorce in Kolkata is expensive. Here is a link which might help you finding a good divorce lawyer in Kolkata http://lawrato.com/divorce-lawyers/kolkata

http://www.pathlegal.in/DivorceConsulting/Kolkata/

Jaipur

http://lawrato.com/divorce-lawyers/jaipur,

Agra

http://lawrato.com/divorce-lawyers/agra

Pune

https://www.urbanclap.com/pune-divorcelawyers

Ranchi

http://lawrato.com/divorce-lawyers/ranchi

Patna

https://www.hg.org/law-firms/divorce/india/patna.html

Patiala

http://lawrato.com/divorce-lawyers/patiala

Itanagar

http://lawrato.com/family-lawyers/itanagar

Dispur

http://lawrato.com/divorce-lawyers/Dispur

Raipur

https://www.justdial.com/Raipur-Chhattisgarh/Lawyers-For-Divorce-Case/nct-10296165

Panjim

https://www.justdial.com/Goa/Lawyers-For-Divorce-Case-%3Cnear%3E-Panjim/nct-10296165

Gandhinagar

https://www.justdial.com/Gandhinagar-Gujarat/Lawyers-For-Divorce-Case/nct-10296165

Chandigarh

http://lawrato.com/divorce-lawyers/chandigarh

Shimla

http://lawrato.com/divorce-lawyers/shimla

Trivandrum

http://lawrato.com/divorce-lawyers/trivandrum

Bhopal

http://lawrato.com/divorce-lawyers/bhopal

The post What fee can one expect to pay for divorce cases in India? appeared first on iPleaders.

In this blog post, Meenal Nasa, pursuing M.A. in Business law from NUJS, Kolkata, interprets the term “consumer” with reference to beauty services.

A bad hairdo, a cosmetic surgery gone wrong: all you need to know about the legalities involved in enforcing your rights as a consumer.

In this modern era, where it has become indispensable to look good and presentable, a large number of people are spending a considerable amount of money on fashion and maintenance of their looks. This is also because of factors such as improved affordability and greater access. People today spend money on procuring a variety of beauty products and services such as hair styles, makeups, spas, facial & hair treatments and even cosmetic surgeries, which is now moving beyond the exclusivities of the rich and famous.

The consumers of these services expect value for their money in the form of efficient and good quality services. However, quite often they suffer at the hands of unscrupulous service providers through their various acts and omissions such as deficient or negligent services, high prices and misleading advertisements exaggerating the quality of their services or products.

To protect the interest of the consumers from the exploitative and deceptive acts of the service providers and suppliers, the government of India has enacted The Consumer Protection Act 1986 (The Act) which was later amended in 2002. The objective of the Act is to provide a simpler, speedier and cost effective mechanism to address the grievances of the consumers.

It is pertinent here to note that the Act does not protect every “consumer” in the literal sense of the term. The protection is meant only for those persons who fall within the definition of ‘consumer’ as defined in the Act. The interpretation of term “consumer” has been an issue of many legal disputes and debates since the commencement of the Act.

This article aims to resolve whether deficiency or negligence in the performance of beauty services (as described above) fall within the ambit of that Act and also on the remedies and forums available to a consumer who is aggrieved as a result of such deficiencies.

Consumer Protection Act 1986

The Act defines the term “consumer” in relation to goods and in relation to services separately. For our purpose, we will only focus on the definition of the term “consumer” in relation to rendering of “services”. Since the Act gives protection to the consumer in respect of the service rendered to him, the definition of “service” and “consumer” (in relation to services) has to be read in conjunction.

• In relation to services, the Act defines a “consumer” as –

“A person who hires or avails of any service for a consideration which has been paid or promised or partly paid and partly promised or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person but does not include a person who avails of such services for any commercial purpose”.

According to the above definition, a consumer includes two categories of persons –

• The one who hires or avails any services for his/her own benefit.

• Any other person (beneficiary) for whose benefit the services are hired or availed of – provided that such beneficiary has given his consent/approval to receive such services.

These above categories of persons must also satisfy the following criteria to come within the purview of “consumer” for protection under the Act –

• The Services should be Hired or Availed of – 

The term hired or availed is not defined under the Act however, according to Black’s law dictionary, the term hire/avail in relation to services means engaging a service for a stipulated reward/compensation.

• Consideration must be Paid or Payable –

As noted above, a consideration is an important element of hiring or availing of services, however, according to the Act, the consideration need not be immediate or one-time payment; the payment could be deferred, paid in installments over an agreed period of time.

• The Person has Not or Will Not Obtain such Services for Commercial Purpose –

Commercial purpose in relation to service has been defined under that Act as “services hired” exclusively for the purposes of earning livelihood by means of self-employment.

From the above, we can decipher that a person who has hired beauty services for his own benefit or for any other person with his/her consent qualifies to be protected under the Act as long as such persons hires or avails of such services for a consideration (usually monetary) which is paid at one go in lump sum or has agreed to be paid in future through installments.

It has also to be kept in mind that the person who is hiring the service of a person for “commercial purposes” cannot claim protection under the Act.

For example – owner of a salon or a spa who hires the services of a beautician or a hairdresser cannot file a consumer complaint against their negligence as such hiring is done to carry out the business of a salon i.e. clearly a “commercial purpose”. Also, the employment of beautician or hairdresser is a “contract of service”, which is excluded from the definition of “service” under the Act, as discussed in the following paragraphs. The Salon owner who is aggrieved by the negligence of his employee may have other remedies under the law but will not be qualified to claim relief under the Act.

Now, let us examine the definition of “service”.

• The term “Service” has been defined under the Act as –

“Service of any description which is made avail­able to potential users and includes but not limited to, the provision of facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information but does not include the rendering of any service free of charge or under a contract of personal service.”

From the definition, it is clear that the Act covers services of “any description” whatsoever rendered to potential consumers. Although the definition lists down eight specific industry sectors but does not limit it to services related to only those sectors. The use of the word `any’ in the definition indicates that legislature intended to construe the term in the wider sense extending from one to all.

The definition of services excludes from its ambit the services performed for free of charge or services under a contract of personal service. To sum up, the Consumer Protection Act covers services of any description as long as such services are not performed free of cost and are not “contract of personal service”.

The expression “contract of personal service” is not defined under the Act. To understand this expression, we need to comprehend the difference between “contract of service” and “contract for service”.

The Supreme Court of India, in Dharangadhara Chemical Works Ltd. v. State of Saurashtra, 1957 differentiated between a contract of services and contract for services –

• “A ‘contract for services‘ implies a contract whereby one party undertakes to render services.

For example – professional or technical services, to or for another in the performance of which he is not subject to detailed direction and control but exercises professional or technical skill and uses his own knowledge and discretion”.

• “A ‘contract of service‘ implies a relationship of master and servant and involves an obligation to obey orders in the work to be performed and as to its mode and manner of performance”.

In the case of Indian Medical Association vs V.P. Shantha & Ors, the Supreme Court noted that Parliament has deliberately chosen the expression ‘contract of service’ instead of the expression ‘contract for services’ in the exclusionary part of the definition of `service. The reason being that an employer cannot be regarded as a consumer in respect of the services rendered by his employee in pursuance of a contract of employment.

By affixing the adjective ‘personal’ to the word “service” the nature of the contracts which are excluded is not altered. The said adjective only emphasizes that what is sought to be excluded is personal service only. The expression “contract of personal service” in the exclusionary part of the definition must, therefore, be construed as excluding the services rendered by an employee to his employer under the contract of personal service from the ambit of the expression “service”.

From the above, we can easily decipher that the contract of service which creates a master–servant relationship or an employer-employee relationship between two parties is excluded from the purview of the Act.

For example – the relationship between the salon owner and the hairdresser.

However, services performed under a “contract for service” are covered under the Act, i.e. an agreement to render professional or technical services whereby, a service provider uses his own skill and knowledge without obtaining detailed instructions from the consumer.

For example – when a consumer goes to a hairdresser for a haircut, he can only convey to a hairdresser the kind of haircut he/she wants, how such service is performed is at the discretion of the hairdresser, who will use his own skill and knowledge to give the haircut his/her client desired.

Now, if we read the definition of “consumer” and “services” in conjunction we can conclude that beauty services will come within the purview of consumer protection act as long as they satisfy all the criteria laid down in the respective definitions.

To summarize, the essential criteria are laid down below:

• The services should be availed by a person for his own benefit or another person’s benefit with his/her approval.

• The services should be availed for a consideration which is paid or payable.

• Services should not be availed for a commercial purpose.

• The services should not be under a contract of personal service i.e. a master-servant relationship but could be a contract for service such a consumer going to hairdresser for a haircut.

• The services should not be rendered free of cost.

When Can a Consumer File a Complaint Against a Service Provider?

A consumer can file a complaint against a service provider on grounds such as the service provider charging a higher fee than what was agreed or displayed in his price list, an unfair trade practice and most essentially when a service is found to be deficient.

The term “deficiency” under the Act has been defined as –

“Any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service”.

There are two essential elements to this definition:

• The term “deficiency” includes any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance.

• Where such quality and manner of performance of service is required to be maintained by or under any law for the time being in force or undertaken to be performed by a person in pursuance of a contract or otherwise.

The above clarifies that willful negligence or fault needs to prove by the aggrieved consumer and it should be based on something that was already agreed upon in the contract or otherwise.

The Supreme court in Ravneet Singh Bagga vs Klm Royal Dutch Airlines And Anr noted that “deficiency in service” cannot be alleged without attributing fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be performed by a person in pursuance of a contract or otherwise in relation to any service. The burden of proving the deficiency in service is upon the person who alleges it. The deficiency in service has to be distinguished from the tortuous acts of the service provider.

In the absence of deficiency in service, the aggrieved person may have a remedy under the common law to file a suit for damages but cannot insist for grant of relief under the Act for the alleged acts of commission and omission attributable to the respondent which otherwise do not amount to deficiency in service.

In the case of bonafide disputes, no wilful fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance in the service can be informed. If on facts it is found that the person or authority rendering service had taken all precautions and considered all relevant facts and circumstances in the course of the transaction and that their action or the final decision was in good faith, it cannot be said that there had been any deficiency in service.

If the action of the service provider is found to be in good faith, there is no deficiency of service entitling the aggrieved person to claim relief under the Act.

The rendering of deficient service has to be considered and decided in each case according to the facts of that case for which no hard and fast rule can be laid down. Inefficiency, lack of due care, the absence of bonafide, rashness, haste or omission and the like may be the factors to ascertain the deficiency in rendering the service.

The Supreme court in Indian Medical Association vs V.P. Shantha&Ors held that –

“Professional men should possess a certain minimum degree of competence and that they should exercise reasonable care in the discharge of their duties. In general, a professional man owes to his client a duty in tort as well as in contract to exercise reasonable care in giving advice or performing services.”

The above comments of the Supreme Court make it clear that the onus is on the consumer to prove the service provider’s negligence or inefficiency. It is important for the consumer to prove that the service provider did not exercise reasonable care in the discharge of his duties which is ordinarily exercised by professionals performing similar services.

The court has noted that –

“The test is the standard of the ordinary skilled man exercising and professing to have that special skill. A man need not possess the highest expert skill; it is well-established law that it is sufficient if he exercises the ordinary skill of an ordinary competent man exercising that particular art”.

Therefore, in case willful negligence or default of the service provider is not proved and it is held that service provider acted in a bonafide manner as an ordinary competent person in his profession will do and what is reasonably expected from him, the consumer will not be qualified to claim relief under the Act.

Remedies and the Procedure to Seek Protection Under the Act

The main reliefs granted by a consumer forum under the Act when it is satisfied that any of the allegations contained in the complaint about the “deficiency in the service” are true are:

• A direction to the service provider to remove the deficiencies in the service in question.

• A direction to the service provider to refund the charges paid or payable to the consumer in relation to the service in question.

• And a direction to the service provider to pay compensation to the consumer for any loss or injury suffered by him.

An aggrieved consumer can file a complaint in:

• District Forum

If the value of services and compensation claimed is less than 20 lakh rupees.

• The State Commission

If the value of the goods or services and the compensation claimed does not exceed more than 1 crore rupees.

• The National Commission

If the value of the goods or services and the compensation exceeds more than 1 crore rupees.

The jurisdiction of the Consumer Court would also depend on where anyone of the opposite parties resides or carry on business or where the cause of action arose.

The arising of “cause of action” at a particular place or at different places is determined on the basis of “material acts” like where the services were performed.

For example – where the salon is situated in case of deficient beauty services.

The intent of the legislature is to provide a speedier and cost effective redressal to the consumers, therefore, no court fee is required to be paid to these forums and there is no need to engage a lawyer to present or argue the case.

The consumer in his complaint should clearly state the material facts of the case. The following standards should be kept in mind while drafting a consumer complaint –

The complainant should clearly state:

• Nature of service hired/availed.

• The nature of deficient service rendered.

This would also include the consequence of such deficiency or negligence.

• The “chain of events” that ultimately resulted in the deficiency.

The complainant should clearly state what happened on each of the relevant dates.

• The facts explained should be material to all the relief claimed such as refund or correction of deficiency or claim of damages.

• The intention of the parties “in good faith” or “bad faith” should be reflected in the complaint”.

• Details of what transpired the consumer to pursue litigation against the consumer should be clearly stated.

The acts and omission of the parties prior to commencing legal proceeding should be clearly stated in the complaint.

• The relief claimed should be stated clearly.

When a Consumer files a written complaint, the forum, after admitting the complaint, sends a written notice to the opposite party asking for a reply in writing to be submitted within 30 days of the receipt of the notice. Thereafter, the forum, depending on the facts of each case, would ask the parties to file affidavit or evidence which could be in the form of judicial decisions, interrogatories, expert evidence etc.

The Act has conferred the consumer forums with special powers such as:

• The summoning and enforcing of the attendance of any defendant or witness and examining the witness under oath.

• The discovery and production of any document or another material object producible as evidence.

• The reception of evidence on affidavits.

• The summoning of any expert evidence or testimony.

• Issuing of any commission for the examination of any witness.

An appeal against the decision of the District Forum can be filed before the State Commission. An appeal against the decision of State Commission will be filed in the National Commission and from the National Commission to the Supreme Court. The time limit within which the appeal should be filed is 30 days from the date of the decision appealed against.

Conclusion

Consumer awareness is constantly growing in India and consumers today are proactive in pursuing litigation proceedings against the erring service providers and suppliers. The Consumer Protection Act 1986 was enacted by the government for the welfare of the consumers who are considered the weaker section in the market dominated by the sellers and service providers. The most essential characteristic of the Act is that it aims to provide speedier and inexpensive redressal to the consumers. However, it is in the hands of the judiciary, the lawyers and the consumers to effectively use the machinery provided by the Act.

What do you think? Drop a comment below & share the article.

The post Interpretation of the Term ”Consumer” With Reference to Beauty Services appeared first on iPleaders.

In this blog post, Meet Kachy, pursuing M.A. in Business law from NUJS, Kolkata, opines upon if it makes sense for the Indian entrepreneurs to incorporate their holding company in another country.

India is rapidly turning into one of the world’s leading entrepreneurial hotspots and it is not difficult to see why. In an increasingly slow-growing world economy, India’s demographics and low base provide a large market with a potentially long growth runway making it one of the standout economic destinations.

The above mentioned macro-economic factors coupled with a largely young and fairly educated workforce and a growing aspiring consumer class make India an attractive market to experiment with new ideas, launch new products and create new businesses.

All these factors create a fertile environment for a new generation of Indian businesses to emerge.

The most fundamental factor in the success of any entrepreneur/start-up is the ability to fulfill an explicit or a hidden need with a good quality product or service

We see around us plenty of new ideas mushrooming each day, some of which will become very big someday and most of which will fail to take off the ground. While the most fundamental factor in the success of any entrepreneur/start-up is the ability to fulfill an explicit or a hidden need with a good quality product or service, this soon becomes a basic hygiene factor.

Once a product or a service is found to be relevant and meaningful as well as of a good quality, the future success of the company and its promoters is often dependent on their ability to understand and navigate the labyrinth of various compliance, regulatory and legal structures which govern their business.

One of the key factors governing the above is the domicile of the start-up and its corporate structure as they determine the regulatory framework which will govern the business (hereinafter referred to as company).

We will explore this question by going through the three key aspects of any startup/company –

1. Investing into the company
2. Operating the company
3. Exit/returns from the company

Before we delve any deeper, it would be prudent to state the base assumptions upon which the document is written. We assume that the situation we are discussing involves a resident, Indian operating company (hereinafter referred to as the “Opco”) which is operating a business in India and the question involves the domicile of the holding company (hereinafter referred to as the “Holdco”) of this operating company.

The operating company is the majority or completely owned by its holding company. The founder/promoter of the Opco and its underlying business are also assumed to be Indian citizens resident in India.

Investing into the Company

One of the key aspects of running a start-up and growing the business is to obtain investment from various strategic & financial investors. Due to the nature of how the global economy has evolved and how it currently operates most often, the subject matter expertise, the wealth and the patience/mindset required to invest and nurture a young business is available only outside the country either in the western markets or in wealthy Asian countries such as China, Singapore and Hong Kong.

Investment into an Indian company can be done by resident individuals/entities or non-resident ones.

• When the latter is an investor into any Indian company it is governed by the rules of foreign direct investment, as covered by the extant foreign direct investment policy at the time.

• As far the FDI policy is concerned, it treats individuals and body corporate/partnerships the same with regards to the FDI policy.

Hence, whether the Opco is receiving investment directly from a foreign individual or from a foreign domiciled Holdco, the same set of rules are applicable.

Any foreign investment into the Opco will be governed by the latest FDI policy circular.

The said circular defines in very clear terms –

1. The amount of foreign shareholding allowed.
2. The mode of investment.
3. The definition of a non-resident investor.

• Amount of Foreign Shareholding Allowed

• The government of India has defined the maximum thresholds of the foreign shareholding allowed in various sectors of industry.

For example, the government allows 100% FDI in ‘non-news and current affairs’ television channels but only 49% in ‘news and current affairs’ television channels.

• Mode of Investment

There are two approved modes of FDI into an Indian company –

• Automatic Route

Under the automatic route, the investor doesn’t require any approval from the government for its investment. It is possible that a particular sector could have automatic approval up to a certain level of investment beyond which government approval is required.

For example, investment up to 49% stake in any defense undertaking is covered under the automatic route but government approval is required for investment above 49%.

• Government Route

Under the government route, prior approval of the government is required for the investment to go ahead. This approval is provided by a body called the Foreign Investment Promotion Board (FIPB) which comprises of secretaries from ministries of finance, commerce & industries and external affairs.

• Definition of Foreign Investment

• Foreign investment into an Indian company includes both direct and indirect foreign investment.

• Direct investment means investment which has come from a non-resident entity directly into the target resident entity.

• Indirect foreign investment means that investment which has come from a non-resident entity into a resident entity which then further invests into the target resident entity.

If the investing resident entity is such that even after the non-resident investment it is still owned and controlled by an Indian person/entity then, the downstream investment into the Opco will not be considered as a foreign investment.

So, any decision about having a foreign-domiciled Holdco and attracting foreign investors will first have to be filtered through the above-described FDI rules and regulations.

If the underlying business proposed to be conducted in the Opco is such that the government doesn’t allow up to 100% FDI then the entire premise of having a foreign-domiciled Holdco can fall flat.

The next aspect which needs to be considered with regards to investing into the venture is that there are two broad types of investors in any company –

1. Promoters
2. Non-Promoters

We shall evaluate the given situation from both their perspectives:

• Promoter/Founder Investment

• The promoter/promoter group/founder (hereinafter referred to as ‘promoter’) is the person/group of persons who are central to the entrepreneurial venture.

The promoter will want/have to invest a certain amount of funds in their own venture to ensure they have a good amount of control.

• If this is to be done via a foreign-domiciled Holdco, the promoter will need to transfer their funds abroad first into the Holdco which will then come back into the country into the Opco.

While this is definitely allowed, it is governed by another set of regulations called the Master Circular on Overseas Direct Investments, defined and updated by the Reserve Bank of India from time to time.

The above circular defines the limits of maximum investment which can be done in a year (USD 1 billion or 400% of net worth of the entity, whichever is lower) as well as the modus operandi and any other restrictions.

More importantly, these rules can restrict the flexibility that the promoter can have with respect to infusing funds into their own venture.

Hence, the promoter needs to have a very clear picture as to why they would want to invest via a foreign-domiciled Holdco as prima facie, there doesn’t seem to be any merit for them to be doing so.

• Non-Promoters

• As far as non-promoter investors are concerned, while the FDI, as well as, the ODI would apply as relevant, they could have valid reasons for wanting to invest via a foreign-domiciled Holdco.

• For non-promoter investors based in foreign locations, it might be easier and more attractive to invest directly into a Holdco which is domiciled in their home/preferred jurisdiction, leaving the hassle of foreign investment compliances for the Holdco/Opco to sort out.

The same would also apply when they are taking their money out during an exit. We will cover this aspect in more detail later in the article.

As a conclusion to the investing stage of the start-up and the benefits of having a foreign-domiciled Holdco, we can state the following:

• The suitability of a foreign-domiciled Holdco and consequently foreign direct investment into the Opco business will primarily be governed by the activities proposed to be carried out in the Opco.

If the extant FDI regulations are favorable to the underlying business of the Opco then this becomes a non-issue. But if the underlying Opco business is such that the extant FDI regulations do not allow majority foreign ownership then having a foreign-domiciled Holdco would not be advisable.

• Unless the promoter has a very strong reason to invest money via a foreign-domiciled Holdco, extant RBI regulations on FDI could create an additional layer of restrictions and compliances for the promoter to invest money into their own venture. Non-promoter investors, on the other hand, could be neutral between the two options and maybe even prefer the option to invest in a Holdco which is based in their home/favorable jurisdiction. Prima facie, this may not be a game changer either ways.

Operating the Company

Once the business has been set up with some initial capital, and hopefully some investor capital as well, the corporate structure should be such that it allows for hassle-free operations on a day-to-day basis. This is important because no promoter starts a business to spend all their time on completing compliances and worrying about the corporate structure. It is thus very important that the holding structure of the company is such that it minimizes the time and cost spent towards compliance and regulatory activities. We shall focus on this issue from a few different angles, namely:

• Operational Compliance

• As the business of the Opco will be conducted within the territory of India, it will be governed by the various compliances and regulations existing in India.

But if the Holdco is a non-resident entity then there will be additional compliances with respect to Foreign Exchange Management Act (FEMA) which governs the flow of currency in and out of the country.

• As a fundamental understanding, the Reserve Bank of India has a much lesser objection to foreign currency coming into the country than exiting out of the country. Having said this, FEMA compliances have to be done on both kinds of transactions, be it inflow or outflow, regardless of whether the flow is of an investment/capital nature or of an operational nature.

• The cost of these compliances is typically in the form of additional human capital resources as the business will need to either employ or hire professionals competent in completing FEMA transactions and ensuring compliance. This is not an easily available skillset as rules are continuously evolving and not all finance, legal and secretarial professionals have had exposure to the same.

• This is also important because FEMA non-compliances can often hold up transactions for months together and can come back to hit the business at any point in the future most often, during subsequent rounds of investing or during investor exits.

• Taxation

• As the Opco is a resident as well as the main business generating entity, it will be governed by the accounting and taxation rules existing in India. Hence, its earnings will be taxed at the usual Indian corporate tax rate, which can effectively be nearly 30%.

• Even if the Holdco is domiciled abroad it would have no effect on the corporate taxation of the Opco.

From an operational & on-going compliance aspect, it would not be advisable to have a foreign-domiciled Holdco.

Exiting the Company

One of the main reasons for new businesses to be formed and invested into is that the promoters and investors are looking to make outsized returns from betting big at an early stage into what they believe would be successful businesses of the future. While promoters can often start a venture out of passion for the underlying business and could even continue doing the same for many years, non-promoter investors are always investing from the perspective of generating returns, either for themselves or for their clients whose money they are managing.

Hence, one of the key points of discussion & negotiation in any such deal is the exit strategy of the business and the various exit options available to the investors. These options and rights can be materially impacted by the corporate structure of the business.

Below, we examine the question at hand and how it will impact the return of capital to the investors:

• Dividends

• Once the Opco has paid its income taxes and subject to the rules governing dividend distribution under the Companies Act 2013, it is free to pay dividends to the Holdco after withholding the dividend distribution tax.

• The above rule is applicable regardless of whether the parent (Holdco) is domiciled in India or abroad.

• Exit via Sale of Shares

This is the primary mode of exit as well as the primary motivation for investors to invest in a start-up. There are two main ways to exit a private entity:

• Secondary sale to another private investor

• This involves selling the shares in the business to another private investor, preferably for a profit on the original investment made.

• Investors, especially foreign ones, could have a preference to invest via a foreign Holdco as it makes it very easy for them to offload their shares to another investor in their jurisdiction. While the underlying business will continue to run in India, the investors can get an easier exit as the incoming buyer will also not have to undertake any FEMA compliances which they might otherwise have to if the investment was made into a resident Holdco.

• Listing on a stock exchange via an IPO

• This involves offering the shares of the Holdco to the general public for investment and listing those on a recognized stock exchange. This provides a more permanent and much more liquid exit route for the investors, allowing them to sell down stake over time according to their preference.

• Listing requirements and regulations differ from place to place and are typically governed by the local securities market regulator. Due to the exponential increase in start-ups and their contribution to job & value creation, regulators in markets such as the USA have come up with a separate, lighter set of rules governing listing of start-up businesses.

This can make it attractive to have a foreign-domiciled Holdco which would find it much easier to list on an exchange abroad. Such an arrangement could provide tremendous liquidity to the Holdco shares and make the Holdco an attractive investment for the non-resident investor.

• Additionally, the abundance of growth-seeking capital, the scarcity of growth-generating businesses and a general culture of risk-taking in certain foreign markets can mean that often there is more appetite abroad to invest in early stage ventures in India.

This coupled with the above-mentioned point on ease of listing in foreign markets can make a foreign-domiciled Holdco an attractive entry funnel for interested investors abroad who can get access to a fast-growing Holdco without having to concern themselves with the various foreign exchange regulations and compliances.

• On the other hand, if the Holdco is a domestic entity, all is not lost. While there are certain formalities & documentations to be completed before a foreign investor can sell their shares and recoup their invested capital and any profits, as on date these are fairly well-established processes and approvals are not unreasonably delayed or held back.

• Similarly, SEBI is also continuously exploring facilitating easier listing norms for startups and has been working towards the same.

All considered this is definitely one aspect in which having a foreign-domiciled Holdco could be more beneficial to the businesses’ longer term prospects.

Why have a Holding Company?

The question at hand assumes that there is a holding company which needs to be domiciled either in India or abroad and the promoter is looking for advice on the same.

But it is also important for the promoter to understand whether we even need a holding company.

While there are benefits to having a Holdco (we shall enumerate a few later on in this article), there are costs involved in having a Holdco–Opco structure.

• First and foremost, there is the issue of the bloated share capital as shares will have to be issued at two levels.

To issue any shares, a company needs to have the requisite authorized share capital in place.

• This is obtained by applying to the RoC and paying fees which are in the form of an escalator.

For example- an infusion of Rs 50 Crs could entail registrar of companies (RoC) fees in the region of Rs 40-50 lacs whereas, an infusion of Rs 10 Crs would entail fees of only about Rs 5 lacs

While the business can issue shares at a premium to reduce these costs, issuing shares at a premium can be very restrictive with respect to the issuances of shares in future rounds of funding or even during a secondary sale.

• A Holdco-Opco structure also introduces multiple taxation incidences. As we have explored above in the section on exits, dividends and capital gains are taxed at each level which reduces the return of the investors and also makes the whole process very inefficient.

Does this mean there are no merits to having a Holdco-Opco structure?

No, there are situations where it makes perfect sense to have a Holdco-Opco structure. Some of which we list out below:

• If the Holdco to be structured as a parent for multiple businesses then, it makes sense to have this kind of a structure where the investors come in at the Holdco level and the Holdco management then allocates capital to various Opco entities.

This could add economies of scale to the group as Holdco can provide certain common management & administrative services to the various Opcos which don’t need to incur those expenses. It would also help the various Opcos in borrowing monies as the group size lends a certain level of stability to the business.

• As per the extant FDI rules, if a non-resident entity invests into a resident entity but only to the extent of 49% so that the investment receiving entity remains ‘owned and controlled’ by a resident, the receiving entity can then invest downstream into another resident entity as a domestic investor.

If such a scenario has to be played out then, it makes immense sense to have a Holdco-Opco structure but the Holdco investing directly into the Opco will have to be a resident entity which is owned and controlled by another resident entity.

Conclusion

I would not recommend an Indian entrepreneur to incorporate their holding company abroad unless most of the potential investors are abroad and insistent on the same or there are compelling case-specific reasons to do so.

A foreign-domiciled Holdco brings with it many layers of compliance and regulatory costs which is only in addition to the compliance and regulatory requirements arising out of running a business in India in the first place.

What are your views on this? Drop a comment below & share the article.

The post Should Indian Entrepreneurs Incorporate a Holding Company in Another Country appeared first on iPleaders.

This article on how Indian government can help your startup has been contributed by Himanshu Jain CEO at LegalRaasta, an online portal for GST Registration in India.

The Indian Government has recognized the potential of startups and is actively trying to figure out ways to help startups flourish. Thus, Startup India is a flagship initiative of the Indian Government, intended to construct a strong ecosystem for nurturing and fostering innovation and Start-ups in the nation that will drive sustainable growth of the economy and generate large scale of employment opportunities. The Government through this initiative aims to empower Startups to grow through innovation and design.

Thus, the Indian Government through its Startup India initiative has provided a detailed action plan along with a status report. The initiative was started on 16^th January 2016 and has submitted a status report as on 13^th December 2016.

In order to meet the objectives of the initiative, Government of India had announced this Action Plan that addresses various aspects of the Startup ecosystem.

Through this simple initiative

• From digital/ technology sector to a wide array of sectors including agriculture, manufacturing, social sector, healthcare, education, etc.; and

• From tier 1 cities to tier 2 and tier 3 cities that are already existing include semi-urban and rural areas are some of the ways the Govt. can help your start-up.

• Simplification and Handholding:

1. Compliance Regime based on Self-certification
2. Relaxed Norms of Public Procurement for Start-ups
3. Rolling out of Mobile App and Portal
4. Start-up India Hub
5. Legal Support and Fast-tracking Patent Examination at Lower Costs
6. Faster Exit for Startups Section

• Funding Support and Incentives:

7. Providing Funding Support through a Fund of Funds with a Corpus of INR 10,000 crore
8. Credit Guarantee Fund for Startups
9. Exemption from tax on Capital Gains
10. Exemption from tax to Start-ups for 3 years
11. Exemption from tax on Investments above Fair Market Value Section

• Industry-Academia Partnership and Incubation:

12. Organizing Startup Fests for Showcasing Innovation and Providing a Collaboration Platform
13. Building Innovation Centres at National Institutes
14. Harnessing Private Sector Expertise for Incubator Setup
15. Setting up of 7 New Research Parks Modelled on the Research Park Setup at IIT Madras
16. Launch of Atal Innovation Mission (AIM) with Self-Employment and Talent Utilization (SETU) Program
17. Promoting Startups in the Biotechnology Sector
18. Launching of Innovation Focused Programs for Students
19. Annual Incubator Grand Challenge

The post HOW CAN THE INDIAN GOVT HELP YOUR STARTUP appeared first on iPleaders.

In this blog post, Lalrinngheti Sangsiama, pursuing M.A. Business law from NUJS, Kolkata, explains the conditions vital to get a business visa in India.

Business Visa

A business visa, one of the two types of work related visas (the other being an employment visa, ‘E’ visa), is designated as ‘B’ Visa.

The difference between the two is that employment visas are for applicants who are applying to work for an Indian company whereas a business visa is granted to the following types of foreigners as listed by the Ministry of Home Affairs:

• To explore possibilities of establishing an industrial or business venture in India.

• To purchase/sell industrial or commercial products.

• To attend technical/board meetings/discussions for providing business services support.

• For recruitment of manpower.

• Who are partners in a business or functioning as directors in a company.

• For giving consultations or participation in exhibitions, trade fairs, etc. This is different to attending conference or seminar or workshop being held in India for which the applicant should apply for ‘Conference Visa’.

• For transacting businesses with suppliers in India or provide services relating to goods or services procured from India.

• For experts or specialists in a project to monitor work or provide high-level technical guidance.

• For pre-sales activity not amounting to the actual execution of any contract or project. Those who want to come to India to execute contracts/projects will have to get an employment visa.

• For students on internship by AIESEC or other project based work in companies/industries.

• For trainees of foreign companies coming for in-house training in the concerned company located in India.

• Senior executives of firms, experts, tour conductors and travel agents who are visiting India in connection with projects of national importance and public sector undertakings. However, as long as these personnels are continued to be employed by foreign firms and are merely relocated to India to work on a specific assignment, they must get an employment visa.

The difference between a business visa and an employment is a point of confusion and concern as obtaining a visa under either category while carrying out activities of the other may result in termination of the visa and thus, deportation.

The confusion is particularly heightened because both business and employment visa require an Indian company sponsor. This is why it is important to make sure that applicants obtain the correct visa for the purpose of their travel.

• Business Visa is issued to applicants who wish to go to India for genuine business purposes. Unlike the employment visa, applicants under the business visa need not be working for an Indian employer.

• An Employment Visa is issued to a highly-skilled and qualified professional who is taking up assignment/employment with companies registered in India. Those going for volunteer work should also apply for the employment visa.

• A business visa is usually granted for 3 months to 1 year or 5 years with single or multiple entries. The period of stay for each visit is limited to six months only. This means that the applicant has to leave India after 6 months and then re-enter if necessary.

The Consulate has discretion to grant a 5 year or 10-year visa with multiple entries. Furthermore, if the visa is for more than 180 days, the holder of the visa must register him/herself within 14 days of arrival in India at their respective country embassies in India.

The 10-year business visa is usually granted to foreigners who set up joint ventures in India. Business Visas must be applied before arriving in India and cannot be granted on arrival.

A Foreign National must fulfill the following conditions for getting a Business Visa:

• A valid travel document is required to be produced by the applicant

• The applicant must fill out the Indian visa application form, declaration and provide passport photos.

• The applicant must provide documents to prove bonafide purpose (company’s letter etc).

• ‘Certificate of Incorporation’ which is issued by the inviting company in India or a ‘Letter of Invitation’ which is written by the inviting/sponsoring company in India.

It must be signed, sealed and written with the company letterhead. This letter must contain all the corresponding information of the applicant and describe their relationship, purpose of travel and details of the job.

• ‘Business Cover letter’ is to be written by the applicant’s current employer in their home country which shall contain information about the applicant’s employment status and state the purpose of visit to India. The letter must mention the sponsoring company in India and the validity of visa applied for i.e. a 1 year, 5 year or 10 years visa.

For the 5-year and 10-year visa, the letter must also explain the reason for future trips.

The business cover letter, like the letter of invitation, should be written in the letterhead and signed and sealed.

• ‘Proof of address’ must be shown and must match the present address on the visa application. It can be a driver’s license, state-issued ID or any recent utility bill.

• Business-related papers on the authenticity of the business.

• Copy of permission from Reserve Bank of India and approval of government of India in the case of joint venture/collaboration.

• Undertaking from one of the directors.

• Letter from AIESEC or other companies in case of the internship.

• Details of business activities of the applicant’s concerned companies in India and their respective country with the annual turnover of the specified minimum.

• Proof of partnership in the business and/or functioning as directors of the company.

• Proof of registration of the company under Indian Company Act.

Both the letter of invitation and business cover letter must have the following information –

• Addressed to High Commission of India or Consulate General of India (in their home country).
• Letterhead.

• Signed by authorized signatory of the company/inviting party.

• The purpose of visit.

• Applicant’s full name as stated in the Passport.

• Passport number with issue and expiry date of the passport.

• Duration of stay in India (per trip – if applicable).

• Specify the exact nature of the business being conducted.

• Specify requested number of entries and the length of visa required.

• The applicant must have an Assured Financial Standing

• The application must be made under good reason for application

• The applicant must comply with other requirements such as Tax Liabilities.

• The applicant must apply for the B Visa in the country of origin or residence if residence in the country has been for more than 2 years.

• The applicant must pay visa fees.

• If the applicant wants to bring his/her family to India, an ‘X’ visa or also called a ‘Dependant Visa’ can be applied for their family members.

• The business visa is non-convertible to any other kind of visa.

• The Business Visa is extendable in India if –

• The gross sales/turnover from the business activities is not less than 1 crore per annum.

• The first extension is granted by the Ministry of Home Affairs.

• Further extensions may be granted by state governments/UT administrations/ FRRS/FROs on a year-to-year bases based on good conduct and proper production of necessary documents.

• The period of extension cannot exceed five years.

• If the extension of visa is denied then the applicant must leave India upon expiry of the visa.

• Processing Time

• If going to areas for which Restricted Area Permit or Protected Area Permit is required.

• If applicant belongs to Nigeria, Somalia, Iraq, Pakistan, and Afghanistan or is of Pakistani origin.

• Non-Indian nationals are eligible for applying for the business visa and so are people of Indian origin. There are different or additional procedures for such instances and also for applicants certain countries such as Pakistan, Bangladesh and Sri Lanka.

If the Indian passport is officially canceled then, the applicant must provide a photocopy of the bio page.

If it is not officially canceled, the original Indian Passport must be submitted for cancellation and a ‘Surrender Certificate’ will be issued which will have to be submitted in the application.

This is because the Indian passport law does not permit dual-citizenship therefore, all Indian nationals obtaining a foreign citizenship must renounce their Indian citizenship.

In case the applicant does not have the Indian passports in their possession for any reason, they are required to furnish duly notarised affidavit in this regard. A police report is also required if the passport has been declared lost or stolen.

Pakistani applicants who hold dual passports must apply for an Indian business visa on their Pakistani passport.

Those who have either renounced Pakistani nationality or canceled their Pakistani passport would need to submit documentary proof of this.

The processing time for visa applications received from persons of Pakistani origin will be around seven to eight weeks or more. And the processing time for applications from those holding dual passports will be substantially longer.

The same is applied for Bangladesh and Sri Lankans i.e. they must submit their Bangladesh or Sri Lankan passports if they hold dual citizenships.

Visa approval for applicants of Afghanistan, Bangladesh, China, Iraq, Iran, Nigeria, Somalia or Sri Lanka origin are sought from officials in India. Processing time is considerably longer and additional consular fees may be charged. The current processing time is the minimum of eight weeks and an additional declaration visa form will be required.

In case where the applicant holds a New Zealand passport and are also a permanent resident of Australia, the applicant must submit a copy of his/her Medicare card.

Certain other countries are subject to conditions like –

• An applicant holding a Czech Republic passport must have at least one-year validity from the date of application and have present medical insurance for the entire period of proposed stay in India.

• An applicant with Chinese passport holding Type-P passport with the number beginning with the alphabet E can apply for Indian visa from mainland China only.

This list is not exhaustive so it is important for the applicant to check with the Indian Embassy in their respective countries.

• Vaccinations and other medical certificates.

Certain nationalities must check their respective country Indian Embassies or High Commission if they are required to show they hold necessary vaccinations.

For example, those who travel to India from Pakistan, Israel, Kenya, Ethiopia, Nigeria, Afghanistan or Somalia are required to hold a valid polio vaccination certificate.

Similar medical certificate can be epidemics such as yellow fever certificate.

• Transferring a Business Visa

If the applicant needs to transfer an Indian business visa from an old passport to a new passport then both the expired passport which holds the valid India visa and the current passport must be provided.

Visas can only be transferred to a passport of the same nationality i.e. visa transferred from a US passport to another US passport.

• Schedule an appointment and get an appointment letter

Scheduling an appointment means that the applicant needs to appear in the Indian Mission in person and cannot be represented by his/her travel agent, relative, etc.

• The Fast Track Scheme

The same day service is available for urgent business travel. Many Indian Embassies are revamping a Fast Track scheme to increase the maximum validity of business visa allowed under the scheme and to further streamline the scheme. The new scheme is created to assist companies that have a long-term business association with Indian businesses and whose employees need to travel frequently to India.

The business visas under this scheme will usually be granted with a maximum validity of 3 years.

Companies that fulfill the following criteria will be eligible for the revamped Fast Track Scheme:

• Companies with an Indian subsidiary.

• Companies who are subsidiaries of an Indian company.

• Companies having substantial business relation with an Indian company with an investment of more than €50,000 or exports/imports of more than €50,000 in a year with the Indian company during the last 2 years.

• All companies who wish to be empanelled for the revamped Fast Track Scheme may apply giving the details of their business and other information requested based on which they may be empanelled. Existing companies in the Fast Track Scheme are also eligible to apply under the scheme if they fulfill the criteria of the scheme.

Conclusion:

The grant of business visa is subject to the discretion of the Indian Mission or any instructions issued by the government of India on the basis of reciprocity with other foreign countries from time to time. This means that obtaining a business visa is not right.

The High Commission or Consulate General of India may seek more information or documents if necessary to process the application. Even if all the conditions have been met by the applicant, the Indian Mission can reject the application without reason.

What are your views regarding this? Drop a comment below & share the article.

Sources:

1.    Ministry of Home Affairs, India

2.    Indian Visa Online, Government of India

The post What are the Conditions of Getting a Business Visa in India appeared first on iPleaders.

This article on non disclosure clauses in employment contracts is written by Aishwarya Singh, Jindal Global Law School, Sonipat.

One of the standard clauses in employment agreements are non disclosure clauses, where the employee undertakes that she will not disclose confidential information to a third party unless mandated under any law in force. The question which comes up during the enforcement of such clauses is when the general knowledge of the employee ends and the confidentiality of the employee begins.

In India, Section 27 of the Contract Act, 1872 states that “Every agreement by which anyone is restrained from exercising a lawful profession or trade or business of any kind, is to that extent void.” The said provision is invoked by employees to argue that non-compete clauses including non-disclosure agreements act as a restraint of trade. Recently the Delhi High Court in the case of Stellar Information Technology Private Ltd. v. Rakesh Kumar and Ors. 234 (2016) DLT 114 held that “Once it is held that in the guise of a confidentiality clause, the plaintiff is attempting to enforce a covenant in restraint of trade, the same must be held to be void.” In the said case, the non-disclosure clause restricted the employee from carrying a competing business after the employment ceases, unless the employee can prove that he has carried on the business activity without using any confidential information as defined in the contract. The court observed that the information claimed as confidential by the plaintiff is in public domain, the employee can only be injuncted from using the proprietary information of the employer otherwise the impugned covenant will be a restraint of trade. In this case, the impugned information was a database of names of customers.

The Supreme Court discussed the distinction between special information and general information in the case of Nilanjan Golokari v. The Century Spinning and Mfg.  AIR 1967 SC 1098. Century Spinning Company entered into a non-disclosure agreement with their employees. Clause 9 of the employment contract for a period of five years read as follows; “Employer shall have the right to restrain an employee from divulging any and all information, instruments, documents, reports etc. which may come to his knowledge while in service of the company.” After receiving training for nine months, the employee left to join a rival company and a dispute arose before the court. The employee contended the clause was too wide since it was not limited to trade secrets but also included any information which came to his knowledge. The Supreme Court observed that the “information regarding the special processes and the special machinery imparted to and acquired by the appellant during the period of training” is different from the “from the general knowledge and experience that he might have gained while in the service of the respondent company”. The court opined that restrictive covenants limited as to time, nature of employment and area to protect the interests of an employer cannot be held to be a restraint on trade. The court clarified that a non-compete clause operating during the period of contract will not constitute a restraint on trade, unlike a clause which is to operate post the termination of the contract. It would have been difficult to seek an injunction for restricting the employee to use his knowledge regarding the “special processes and the special machinery” once the contract was terminated in view of Section 27 of the Contract Act, 1872.

It seems that information which can be conferred with protection post the termination of the contract is limited to proprietary information of the employer. In essence, the employer can only seek protection in case of a copyright infringement, since the courts are varied of enforcing non-compete clauses like non-disclosure agreements once the contract has been terminated. In the case of Diljeet Titus v. Mr. Alfred A. Adebare and Ors. 2006 (32) PTC 609 (Del), the defendant used to be an advocate at plaintiff’s law firm. Pursuant to the termination of employment, the defendant was alleged to have taken away important confidential data including client lists and proprietary drafts belonging to the plaintiff. It was contended by the defendant that “the creation was independent and the same was so created by advising and counseling the clients” during the employment. While, the plaintiff firm argued that, “under his guidance, direction, supervision and control defendants and other associates using the plaintiff’s knowledge, skill, experience, resources and investment, developed and created various extremely confidential, crucial and vital electronic records, documents, data and information utilizing the computer system at the office of the plaintiff”. The Delhi High Court gave a judgement in favour of the plaintiff firm holding that the defendants are free to carry on their profession, utilize the skills and information they have mentally retained and they are being restrained only from using the copied material of the plaintiff in which the plaintiff alone has a right…..The defendants having worked with the plaintiff cannot utilize the agreements, due diligence reports, list of clients and all such material which has come to their knowledge or has been developed during their relationship with the plaintiff and which is per se confidential. The relationship between parties was a contract of service. The precedent indicates that the material developed by the employee during the employment period may become a part of the employer’s confidential knowledge as the copyright of the material vests with the employer. The general knowledge of the employee gained during the employment is limited to material retained in memory.

The Delhi High Court in the case of American Express Bank Ltd. v. Ms. Priya Puri 2006 (110) FLR1061 made similar observation indicating that the employer can only claim a copy right infringement against the employee. The court stated that, “Copyright can be claimed only in derivative work. A derivative work consists of a contribution of original material to a pre-existing work so as to recast, transform or adapt the pre-existing work”. The court further observed that the plaintiff had failed to rely on any Indian decision where injunction was granted against the employee once the employment has been terminated, on the ground that he has confidential information and should be restricted from carrying on a trade or business which may involve using such information.

Conclusion

It appears that non-disclosure agreements in employment contracts can be successfully enforced during the period of contract. However, it will be difficult to enforce such a restrictive covenant once the employment contract has terminated, unless the employer can raise a claim of some intellectual property right violation like a copyright infringement. The employee is free to use the material where the employer cannot claim a copyright, in any case, the employee can utilize such material if retained in memory. This may put the employer at a disadvantage when there is a reasonable necessity to protect its legitimate business interests. The English Court of Appeal in Lansing Linde Ltd v Kerr [1991] 1 All E.R. 418, has observed that “It must be possible to identify information used in the relevant business, the use and dissemination of which is likely to harm the employer, and establish that the employer has limited dissemination and not, for example, encouraged or permitted its widespread publication.” Taking a cue from the English position, the Indian courts should develop a more nuanced interpretation of Section 27 of the Contract Act, 1872, balancing the interests of both the employer and employee.

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In this blog post, Aishwarya Sujay Kantwala, pursuing M.A. in Business law from NUJS, Kolkata, talks about FRAND licensing in India & the 10 essential points to keep in mind.

The Universal Declaration of Human Rights in Article 27 states that –

‘Everyone has the right freely to participate in the cultural life of the community to enjoy the arts and to share in scientific advancement and its benefits.’ Further, everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author.’

-(UN General Assembly. 1948)[1]

As outlined above, intellectual property being intangible are yet bound by ownership and such benefits accruing are to be in the favor of the owner. These rights are awarded by the state and the user can exercise these rights to restrain others from using them without his consent.[2] The world today is dynamic with constant interaction through different platforms often, this leads to infringement of intellectual property rights.

There is an acute difference between infringement and competition.

Competition enables improvement and amelioration of services or products constantly. This works in the favor of the consumer as there are more effective advancements in respective commodity or service markets. In India, The Competition Act, 2002 regulates the practices that result in an adverse effect on competition in the markets in India.[3] The Act seeks to promote and sustain competition markets, protects consumer interests and ensures freedom of trade in the markets in India.[4]

A ‘Standard’ in layman’s terms means a defined quality, level or league. In this context –

‘a set of technical specifications that seeks to provide a common design for a product or process.'[5]

This means that a certain expectation is created. A standard is the presumption or anticipation of a certain prospect being the actual outcome or a characteristic.

The Thirteenth session of Standing Committee on the Law of Patents brought about interesting ideas of standardization.

• The document prepared by the secretariats introduces the importance of conformity which basically means stressing on the needs/wants of the consumers.

• Further, the document mentions that apart from practical convenience even assurance of various factors is necessary i.e. quality, safety and reliability.

This essentially means that the product/service has to be of such an archetype so as to survive in the market.

• The essence of standardization is widespread varying from the products to service depending on the most vital requirement. This could be safety, hygiene, environment, health, technology, etc. It is an approval of a specification.

The general vocabulary, according to the ISO/IEC Guide 2:2004, standardization and related activities of “standard” is defined as a “document, established by consensus and approved by a recognized body that provides for common and repeated use, rules, guidelines or characteristics for activities or their results, aimed at the achievement of the optimum degree of order in a given context”.

• Further, an extension to the definition was –

“Standards should be based on the consolidated results of science, technology and experience and aimed at the promotion of optimum community benefits”. This definition provides credibility to a ‘standard’ which cannot be simply acclaimed or appraised without certain recognition or credentials.

Simply, this is for the benefit of the consumers so they cannot be tricked into using a product or availing a service dangerous to their safety. Improvement of the quality of human life is one of the important reasons for the evolution of standards.[6]

• The committee has bifurcated standards into two types being de-facto standards and de-jure standards.

• A de-facto standard is created when a particular technology is widely implemented by market players and accepted by the public so that such a technology becomes a dominant technology in the market even if it has not been adopted by a formal standard-setting body.

• De-jure standards are, in general, set by standard setting organizations (SSOs). The role of SSOs is to coordinate and facilitate a standard setting process with the involvement of various stakeholders and is international, regional or national.[7]

SSOs develop, support and set interoperability and performance standards among others which help to facilitate the adoption of new technologies.[8]

Interoperability means the sustainable and common use through compatibility of various products. The technical know-how expenses of a manufacturing company can be avoided through an already existing simplified design. This is also easier for consumers to be on the link of technology rather than change from one kind of product to another with an entirely different functionality. Hence, if there are multiple compatible products in the market it is a healthy commercial endeavour.

On the recommendation of the SSO, if an invention must be used to comply with a standard it is known as an Essential Patent or Standard Essential Patent.[9] One cannot use another’s patent without authorization. The owner of Standard Essential Patent is under an obligation to license its patented technology which sets a standard for the industry and such license must be granted on FRAND terms i.e. licensing of Standards Essential Patents (SEPs) on Fair, Reasonable And Non-Discriminatory (FRAND) terms is the foundation of the standards development.[10]

As the rightful owner of the patent, FRAND is a voluntary licensing commitment that SSO’s acquire on the permission of such owners.[11] This is primarily for the adoption of an already existing patented technology to be operated through other various manufacturers and producers. This is wholly simplified and less complex initiating a user-friendly interface.

FRAND is a policy included in the bylaws of the SSO’s agreement. The SEP holders are permitted to license their patents only on FRAND terms to eliminate the cream advantage of SEP’s and an ‘added incentive of immunity from punitive action.’[12] Other benefits from FRAND licensing include certification and branding for standards-compliant products which may further result in both shared costs and early access to information regarding a related but evolving standard.[13] Royalty accrued from patent licenses are wholly based on the commitment of remuneration, such being charged on the basis of deservance.

SSO’s should commit to licensing SEP’s on FRAND terms also, for patent owners being able to protect their technology and at the same time, ensure a reward mechanism for investments in research and development of such patent.[14]

A few points to keep in mind about FRAND licensing are as follows-

• Understanding  FRAND

‘It is widely acknowledged that in fact, there are no generally agreed upon tests to determine whether a particular license does or does not satisfy a RAND commitment.’[15]

FRAND emerged to initiate promotion of technological sharing through legal measures and preventing a sprain on the movement of patent growth. If there aren’t terms implemented to curb the unfair use of licenses, it would be equivalent to underwater basket weaving.

In a capitalistic economy like India, there are major market players that can reverse the tides and change the face of consumption. Naturally, if one cannot take away the rights bestowed through Patent Invention, one can effectively introduce the interoperability of such.

As discussed earlier, certain inventions like chip technology etc cannot be used independently of a device. This results in the standardization of the product. When the patent holder of this chip technology licenses it to the licensee viz. device manufacturer, it is done to prevent either the parties from causing exploitation or infringement through one another. The origin of FRAND was to lay down terms to prevent exploitation and infringement, also can be termed as a harmonious footing to promote athletic rivalry.

Summarizing the following, ambiguity in the definition of ‘FRAND’ is one of the core problems in the licensing of rights to patents, essential for the implementation of a written technical standard.[16]

• Fair, The F in FRAND

It seems extremely debatable as to what is fair and what isn’t. It is fair for striving developers to charge or impose restrictions on the product of their handwork and intellect yet, isn’t it fair for others to utilize the same for progression.

The ambivalence is important to an extent so as to not subvert various situations that may arise. Fair means an equitable set of terms which should be laid down so as to allow competition to thrive. Any agreements which are anti-competitive due to non-compliance of FRAND terms can be challenged in the Competition Commission of India.[17] Generally, the term “fair” relates to the underlying licensing terms and describes them as not being anti-competitive and not unlawful.[18]

• Reasonable. The ‘R’ in FRAND

Companies are formed primarily to focus on profits, unlike the other companies, a steady revenue can be accrued by licensing patents which would persist for a long time. Without forgetting the importance of profit margin and the benefit of the SEP holder, the royalty rate/charge has to be reasonable.

As investors, they cannot be denied their basic right to remuneration for using/licensing their product, however, as mentioned above, standardized patents have to be offered to licensors, such enjoyment should be within the purview of practicality and realistic.

Sometimes companies require such SEPs to function and would be ready to lower their profit margin considerably due to the royalty rates, such deprivation should not be allowed, which is why FRAND includes reasonable. Reasonable in this context has to be subjectively considered.

• The Non-Discriminatory in FRAND

Non-discriminatory means non-prejudicial. This is generally mentioned so as to prevent SEP holders to selectively grant licenses to certain licensees. It is often seen that in the chaos of competition, multiple rivalries arise. When one of these competitors become huge market players they essentially try to boycott the remaining.

Non-Discriminatory also relates to the royalty pricing which cannot be different for different licensees, as mentioned in the cases below there is a clear understanding of such and how the Competition Commission took cognizance of the same.

It will be seen how certain parties charged excessive royalty which was discriminatory due to its opaque nature that being non-transparent due to non-disclosure agreements. The charging of different license fees per unit of phone for the same technology is discriminatory.

It should be mandatory for patent licensors to within the patent licensing agreement mention a clause for strict adherence to FRAND terms or a separate FRAND contract. Any breach or violation of FRAND terms should be treated equally as that of other contractual terms. It is important to clearly mention the purpose of FRAND, adjudication and remedial measures.

• Royalty Rates

The royalty rates being charged by the licensor being the patent holder has to have a linkage to the patented product, not the whole finished product. Fair, Reasonable and Non-discriminatory terms can be subjective and defined widely.

Common sense would prevail that royalties should be charged on the patented part of the product and not the whole hence, royalty charges on the selling price is wholly unreasonable.

This has been demonstrated in Micromax Informatics Limited Vs Telefonaktiebolaget LM Ericsson, where the royalty was charged on the entire selling price of the product. Hence, if a phone was manufactured for Rs.50 which included using the patent technology of Ericsson under a license at Rs.10 and sold for Rs.100 to consumers, the patent-holder in this case viz. Ericsson charged royalty on Rs.100 rather than simply the patent technology worth Rs. 10. Now, a phone has various functions which necessitate various licenses and technology developed outside the purview of the manufacturers. This requires licenses to be issued.

The question posed in simple terms is why a mobile manufacturer should pay the royalty for one particular patent from the complete cost/selling price of the phone. Has such patent holder contributed completely in creating the product? No, the reason being 10 patents are applied for to manufacture a device, why should the benefit of excess royalty be shadowed leaving the manufacturers to cost ridden. This has been discussed further where Micromax Informatics Limited Vs Telefonaktiebolaget LM Ericsson has been expanded upon. [19]

• Uniformity of Licensing Terms

The license granted by such patent holding licensor to licensees should be uniform for all i.e. the conditions and royalty rates should not significantly differ. Facilitating uniformity in licensing requires sharing commercial terms and conditions with all the licensees. Not only is this extremely transparent and progressive but it also facilitates healthy competition and prevention of fair use.

In Micromax Informatics Limited Vs Telefonaktiebolaget LM Ericsson, it was held that non-disclosure of commercial terms with different licensees is contrary to the principles of FRAND. The reason being that it wouldn’t be fair to other licensees as the royalty rates could significantly differ also, being it would be unreasonable to disallow transparency as one licensee could be cogently cheated through stricter conditions and less flexible rates while others could be favored. Hence, as held below the commission ruled such practice to avoid sharing of commercial terms is against FRAND policy.

Micromax Informatics Limited Vs Telefonaktiebolaget LM Ericsson

The information was filed by popular mobile handset manufacturer Micromax Informatics Limited under Section 19(1)(a) of the Competition Act, 2002. The opposite party, Ericsson group, is one of the prevalent, globally established telecommunication companies. Micromax held that unfair, discriminatory and exorbitant royalty demands were made by Ericsson regarding its GSM technology.

This stands for Global System for Mobile communications which is an open, digital cellular technology used for transmitting mobile voice and data services.[20] Notices had been sent by Ericsson to Micromax to secure FRAND licenses from it as Micromax had allegedly infringed essential GSM patents of Ericsson. Following the same, Micromax made a request for details of the FRAND licenses from the Ericsson but the same were not provided.

Thereafter, Micromax entered into a non-disclosure agreement with Ericsson where FRAND licenses were disclosed. Demanding more, Ericsson wanted Micromax to accept licenses on FRAND terms within 25 days otherwise, it will be construed as a refusal to sign FRAND license agreement. The royalty rates imposed by Ericsson were as exorbitant which resulted in immense litigation from both ends.

On approaching the commission Micromax set forth the following arguments-

• That Ericsson was aware of its dominant position with an over advantage of being the only sole licensor of technology without alternatives. They imposed steep royalty rates. Also that companies did not have any other means but to license such technology through Ericsson due to them holding Standard Essential Patents of globally acceptable technology standards.

• The royalty charged was not on the product but on the value of the phone, this means that the sales price generated royalty rates which are strange as another technology manufactured by Micromax was included. The remuneration granted was not based on its sole addition to the product but on the device as a whole.

• Micromax argued that the royalty should be charged on basis of value of technology/chipset used in the phone and not the complete price of the device. This escalated the price of the royalty to more than 10 times as such phones were the smartphones equipped with features highly contrasted to ordinary phones.

• Interestingly, Micromax contended that while the chipset gives no additional value to a smartphone, such misuse of SEPs would ultimately harm consumers.

The agreements put forth by Ericsson were-

• That the royalty rates paid by Micromax had in fact as per the interim arrangement recorded by the Delhi High Court.

• The dispute being of commercial and civil nature that the commission should not acquire the role of a price setter or concern itself with excessive prices.

The Commission held-

• The practices adopted as aforementioned by the Ericsson were discriminatory as well as contrary to FRAND terms.

• The royalty rates being charged by Ericsson had no linkage to patented product, contrary to what is expected from a patent owner holding licenses on FRAND terms. These imposed royalties are linked with the cost of product of the user.

• Ericsson had refused to share the commercial terms of FRAND licenses with the licensees similarly placed as Micromax i.e. which licensed similar patents. This was noticeably fortifying the accusations of discriminatory commercial terms imposed by Ericsson.

The court further enumerated through demonstrating via an example being for the use of GSM chip in a phone costing Rs.100, royalty would be Rs.1.25 but if this GSM chip is used in a phone of Rs.1000, royalty would be Rs.12.5. Thus increase in the royalty for the patent holder is without any contribution to the product of the licensee. Higher cost of a smartphone is due to various other Softwares/technical facilities and applications provided by the manufacturer/licensee for which he had to pay royalties/charges to other patent holders/patent developers. Charging of two different license fees per unit phone for use of the same technology prima facie is discriminatory and also reflects excessive pricing vis-a-vis high-cost phones.[21]

• Non-disclosure agreements are opposed to FRAND terms

In Intex Technologies (India) Limited Vs Telefonaktiebolaget LM Ericsson, the information filed in the Competition Commission of India was by Intex Technologies (India) Limited, an incorporated Indian company of which the product portfolio includes more than 29 products including mobile phones, multimedia speakers, desktops LED / LCD TVs CRT, DVD players, computer UPS, cabinets, headphones etc. Also mentioned was the affordability and high-end technology provided by Intex along with custom made mobile devices etc.

On the other hand, Ericsson is a global player in the telecommunications sector, the business is of manufacturing network/ base station equipment and setting up and managing telecommunications networks. The revenue mostly accrues from the handset business and importantly patent licensing/monetization. Ericsson held 33,000 granted patents and was the largest holder of Standard Essential Patents for mobile communication covering 2G, 3G and 4G technologies. Intex alleged that Ericsson refused to share the commercial terms and royalty payments on the grounds of non-disclosure agreements.

This clearly suggests that it is most probable that different royalty rates/commercial terms were being offered to the potential licensees belonging to the same category. For instance, if A, B, C were potential licensees, A would be given a different royalty rate to be paid in comparison to B and C.

The pertinent question is why else would transparency be declined? Moreover, the NDA was a necessary pre-condition for letting Intex know about the details of the alleged infringement. The absurdity lies in the fact that notifying the infringing party of the infringement required an NDA to be signed for not letting such information leak.

It has to be kept in mind that purpose of FRAND terms was to reduce the friction between the SEP holder and the licensee, having such conditions of non-disclosure are equivalent to pompous threatening. Clearly, this assertion of dominance with an attitude of ‘take it or leave it’ is in contravention to FRAND terms. Hence another enumerated characteristic of FRAND is transparency. [22]

• The reason for standard setting and FRAND compliance

Often patent holders would deem it unnecessary to partake in adhering to a standardization which would eventually require compliance of FRAND terms. Without such, there is an immense possibility of realized profits and unanimous budgeting of royalty rates. This kind of unchallenged advantage is attractive as a concept yet defeated due to the obligation to declare technology that would require standards.

Further, evolving into such standard-setting activities would impress patent licensees in a form of security and safety. This would, in turn, increase the number of licensees significantly as there would be fixed and unbiased FRAND terms as rescuers. As mentioned there would be a ‘guaranteed pool of licensees’, without such assurance the patent would be left unutilised.

• Purpose of FRAND terms to prevent stacking up and patent hold-ups

Usually, patent hold-up occurs due to an exceptional advantage of the patent holder over the patent licensee. And patent hold-up is more likely where a company uses its SEPs to exclude competitors from the market.

The commissioner for competition of the European Commission has expressed similar concerns (Alumnia, 2012) –

‘To build a smartphone, one needs thousands of standard-essential patents. The holders of these patents have considerable market power and can effectively hold-up the entire industry with the threat of banning competitors’[23].

By threatening to use injunctions, these companies make demands that their commercial patent licensees would never imagine or concede to under normal circumstances. Injunctions are remedial being of interim (temporary measures) or permanent in nature. Injunctions are not often given unless there is a rational basis to prevent infringement. FRAND terms help to prevent such misuse of injunctions by the patent holder to disadvantage the patent licensee. Yet again, non-adherence to FRAND terms also results in litigation hence, there is no per-se remedy to cater to such disputes.

• Loopholes within FRAND

FRAND terms require adherence yet again, there is no transparent system of remedies available. The most practical advice would be for the potential licensees to clarify with patent owners or patent licensors through investigations. The SSO’s bylaws have to be read and agreed upon before the patent is licensed. [24]

One remedy can be the breach of contract i.e. the FRAND contract. This being more attractive to licensees rather than patent licensors upon the breach of FRAND terms.[25] In a contract, a separate clause can be dedicated to the adherence to FRAND terms if not a whole separate contract. The remedy post-breach can be damages awarded after being adjudicated upon. The jurisdiction of the contract should be the same for breach through noncompliance to FRAND or other actions.[26]

There is no law stipulating necessity to mention FRAND clauses or a separate contract for FRAND terms which is why this is more in vogue after the cases mentioned above. It is high time the legislature should divert some clarity to curb the arbitrary process of licensing and improve the efficacy of FRAND implementation.

That’s all about FRAND licensing. Do you have something to say? Feel free to mention your queries/views in the comment box below & share the article.

References –

[1]Universal Declaration of Human Rights, G.A. Res. 217A (III), U.N. Doc.A/810 at 71 (1948).
[2]Shippey, Karla C. “A Short Course In International Intellectual Property Rights.” World Trade Press, N.D.
[3]The Competition Act, 2002, No. 12, Acts of Parliament, 2003 (India).
[4]Kochhar& Co, Introduction Of The Competition (amendment) Bill, 2012 In India, (2012), http://www.kochhar.com/pdf/Rationale%20For%20Competition%20Laws%20-%20SALIENT%20FEATURES%20OF%20THE%20BILL%20AND%20THE%20IMPLICATIONS%20THEREOF..pdf.
[5]Hovenkamp H, Janis M &Lemley M, IpAnd Antitrust: An Analysis Of Antitrust Principles Applied To Intellectual Property Law (aspen Law & Business, Ny). 2003-04, Supplement P. 35.1.
[6]Wipo, Standing Committee On The Law Of Patents Thirteenth Session, Http://www.wipo.int/edocs/mdocs/scp/en/scp_13/scp_13_2.pdf.
[7]Wipo,Supra note 6.
[8]See, e.g., U.S. DeptOf Justice & Fed. Trade Comm’n, Antitrust Enforcement And Intellectual Property Rights: Promoting Innovation And Competition 33 N.1 (2007), Available At http://www.ftc.gov/reports/innovation/P040101PromotingInnovationandCompetitionrpt0704.pdf.
[9]Shapiro, Carl, ―Navigating The Patent Thicket: Cross Licenses, Patent Pools, And Standard-setting‖, Forthcoming Innovation Policy And The Economy, Volume I, Mit Press, 2001 Available At http://faculty.haas.berkeley.edu/shapiro/thicket.pdf
[10]Understanding Patents, Competition And Standardization In An Interconnected World,Itu, 2014 Available At http://www.itu.int/en/itu-t/ipr/pages/understanding-patents,-competition-and-standardization-in-an-interconnectedworld.aspx.
[11]Layne-Farrar, Anne; Padilla, A. Jorge; Schmalensee, Richard (2007).”Pricing Patents for Licensing in Standard-Setting Organizations: Making Sense of FRAND Commitments”.Antitrust Law Journal.74: 671.
[12]RaghaviViswanath, Demystifying the Indian FRAND Regime: Interplay of Competition and Intellectual Property, http://nopr.niscair.res.in/bitstream/123456789/34083/1/JIPR%2021(2)%2089-95.pdf.
[13]Frand V. Compulsory Licensing [Vol. 14]Implementation Of A Standard By Licensing At Exorbitant Prices.
[14]Yann Ménière, Fair, Reasonable and Non-Discriminatory (FRAND) Licensing Terms, JRC Science and Policy Report, http://is.jrc.ec.europa.eu/pages/ISG/EURIPIDIS/documents/05.FRANDreport.pdf.
[15]Daniel G. Swanson & William J. Baumol, Reasonable and Nondiscriminatory (RAND) Royalties, Standards Selection, and Control of Market Power, 73 Antitrust L.J.1, 5(2005).
[16]Larry Goldstein And Brian Kearsey, Technology Patent Licensing: An International Reference On 21st Century Patent Licensing , Patent Pools And Patent Platforms.

[18]Saumya Srivastava, Standard Essential Patents And Competition Law, Competition Commission Of India, 15–16 (2013).
[19]Micromax Informatics Limited Vs Telefonaktiebolaget LM Ericsson, (2013) Case No. 50 of 2013, Competition Commission (India).
[20]GSMA, GSM About Us, http://www.gsma.com/aboutus/gsm-technology/gsm
[21]Supra note 16
[22]Intex Technologies (India) Limited vs Telefonaktiebolaget LM Ericsson , (2013) Case No. 76 of 2013, Competition Commission (India).
[23]Keith E. Maskus& Stephen A. Merrill, Patent Challenges For Standard-setting In The Global Economy: Lessons From Information And Communications Technology (2013).
[24] See Kraig A Jakobsen, Revisiting Standard-Setting Organizations’ Patent Policies, 3 NW. J. TECH. &INTELL. PROP. 43, 50 (2004), available at http://scholarlycommons.law.northwestern.edu/cgi/viewcontent.cgi?article=102 7&context=njtip.
[25]SrividhyaRagavan, Brendan Murphy & Raj Davé, Frand V. Compulsory Licensing: The Lesser Of The Two Evils, http://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=1285&context=dltr.
[26]Supra note 25.

The post What is FRAND Licensing all About: Top 10 Points to Keep in Mind appeared first on iPleaders.

In this blog post, Saurabh Kumar, from KIIT University, Bhubaneswar discusses the concept of minority rights and how the Indian Constitution protects the rights of these minorities. 

Introduction

In a multicultural society, for the preservation of distinct cultural traits and patterns, exclusive rights may be recognised as fundamental for religious denominations and cultural and linguistic minorities. Such special rights may include educational rights. Religious, cultural or linguistic organisations provide a forum to co-ordinate the demands of individual members. These collective rights can be better exercised only by the use of freedom of speech, expression, assembly, association, and religion and right to property. Protection against effacement of identity is made possible more by an active assertion of their distinct characteristics through the use of freedom rather than by mere artificial insulation by the state. Insofar as members of these minority communities are concerned, the guarantee of conservation of cultural and educational rights extends several advantages to them including means of livelihood.

Amidst fundamental rights, cultural rights occupy a unique place as they enable both cultural pluralism and compositeness of culture. The social and political fabric of a nation, instead of reflecting a sum total of collective intolerances of various culture-specific communities, would be tending to unite their insight for co-existence and tolerance in the backdrop of a guarantee of cultural and educational rights.[1] The UN Declaration of Minority Rights 1993 believes that constant promotion and realization of the rights of ethnic, religious and linguistic minorities as an integral part of the development of society as a whole, and within a democratic framework based on the rule of law, would contribute to the strengthening of friendship and cooperation among peoples and states.[2]

The Indian cultural tradition of protecting the insular minorities against exclusion ‘from the shores of a vast sea of humanity’[3], ultimately culminated in the constitutional guarantee of collective right. The principled approach so emerged is one of equal opportunity for conservation of culture and protection of linguistic and religious minorities against coerced assimilation in the educational front. The cherished aim was to hold India’s many peoples, languages, culture and religion into an atmosphere of tolerance and intellectual growth.

Who are ‘Minorities’

Although the term ‘minorities’ is not defined in the Constitution, from the Constituent Assembly Debates, it can be gathered that the Constitution Makers used it to connote numerically vulnerable group in the power equation of State population. In the background of territoriality of dominant linguistic groups with an interspersing of other numerically less linguistic groups within the State territory, the concept of numerical test with reference to religion in State like Punjab, Jammu and Kashmir and Nagaland makes Sikhism, Islam and Christianity, the majority religions in those States respectively.[4] It is submitted, as the state action in the sphere of lower and general education flows from the member of a federal organisation, the numerical test is objective and rationally distinguishes between the dominant and the vulnerable groups. It also conforms to the UN definition of minority, which looks to the minority as a distinctly vulnerable group and to its rights as collective rights. Ever since In re, Kerala Education Bill[5], the Supreme Court has been applying the numerical test, which poses the question whether the population of a linguistic or religious community claiming the minority status is below 50 per cent of the State population. Accordingly, in D.A.V. College, Bhatinda,[6]Hindu religion was regarded as a minority religion in Punjab. The expression ‘All minorities’ suggest the implied existence of equality amidst minorities about their entitlement under Article 30(1). Hence, a government rule which provides for separation between girls school and boys school and compels the girls of one minority community to study in a school of another community in the same vicinage instead of studying in its own MEI is unconstitutional vis-à-vis minorities, as held in Mark Netto.[7]

In TMA Pai Foundation,[8] the Eleven Judges Bench of the Supreme Court confirmed the position that the minority status of a community is to be decided with reference to the State population. RUMA PAL, J. expressed the sole dissent on this point on the ground that since education is presently a legislative subject coming under Concurrent List, the matter must be determined in relation to the source and territorial application of the particular legislation against which protection is to be claimed.[9]

For the Constitution Makers, initially, the sources of inspiration for a guarantee of the minority language educational right were the Nehru Committee Report and a resolution of Government of India 1948.[10] The relevant part of the Nehru Committee Report stated, “Adequate provision shall be made by the state for imparting public instruction in primary schools to the children of members of minorities through the medium of their own language and in such script, as is in vogue among them”[11]. The Resolution of Government of India stated, “The principle that a child should be instructed in the early stages of its education through the medium of the mother tongue has been accepted by the Government”[12].

Right to Freedom of Religion

Article 25 reads – Freedom of conscience and free profession, practice and propagation of religion-

• Subject to public order, morality, and health and to other provisions of this Part, all persons are equally entitled to freedom of conscience and the right freely to profess, practice and propagate religion.
• Nothing in this Article shall affect the operation of any existing law or prevent the State from making any law –
  • regulating or restricting any economic, financial, political or other secular activity which may be associated with religious practice;
  • providing for social welfare and reform or the throwing open of Hindu religious institutions of a public character to all classes and sections of Hindus.

This Article provides every person the right to the freedom of conscience and the right freely to profess, practice and propagate religion. Freedom of conscience connotes a person’s right to entertain beliefs and doctrines concerning matters, which are regarded by him to be conducive to his spiritual well-being.[13] The right is not only to entertain such religious beliefs as may be approved by his judgment or conscience but also to exhibit his sentiments in overt acts as are enjoined by his religion. To profess a religion means the right to declare freely and openly one’s faith.[14]

A person may propagate freely his religious views for the edification of others. It is immaterial whether the propagation is made by a person in his individual capacity or on behalf of a church or institution.[15] The right to religion includes the right to seek a declaration that the Church is episcopal.[16]

Freedom to manage religious affairs

Article 26 reads – Subject to public order, morality and health, every religious denomination or any section thereof shall have the right-

1. to establish and maintain institutions for religious and charitable purposes;
2. to manage its own affairs in matters of religion;
3. to own and acquire movable and immovable property; and
4. to administer such property in accordance with law.

Article 26(a) as the basis for an educational right, the Supreme Court in Brahmachari Siddeshwar[17], ruled that religious denominations could establish institutions for charitable purpose subject to limitations prescribed under Article 26(1). But it did not decide whether it provided protection to educational institutions established and maintained by religious denomination for general education. The TMA Pai Foundation judgment made a significant contribution in this sphere by holding, “The right to establish and maintain educational institutions may also be sourced to Article 26(a), which grants, in positive terms, the right to every religious denomination of any section thereof to establish and maintain institutions for religious and charitable purposes, subject to public order, morality, and health. Education is recognized as the head of charity. Therefore, religious denominations or sections thereof, which do not fall within the special categories carved out in Article 29(1) and 30(1), have the right to establish and maintain religious and educational institutions”.[18] This enables the religious denominations of majority religious community also to set up any educational institution.

Freedom as to payment of taxes for promotion of any particular religion

Article 27 reads – No person shall be compelled to pay any taxes, the proceeds of which are specifically appropriated in payment of expenses for the promotion or maintenance of any particular religion or religious denomination.

In Suresh Chandra Chiman Lal Shah v. Union of India[19], the court held that commemoration of distinguished persons, who had contributed to India’s cultural heritage, was done with a view to focusing attention on their ideals, to kindle in our younger generation an awareness of our heritage and to promote international understanding, and that the celebrations involved no religious rites or ceremonies hence no infringement of Article 27.

Also in the case of K. Reghunath v.State[20], expenditure from the State fund for the reconstruction, among others, of the religious and educational places damaged during communal riots was upheld notwithstanding the fact that the damaged places belonged to any one religion. Acquisition of land for construction of a temple has also been upheld.[21]

Cultural and Educational Rights

Article 29 reads – Protection of interests of minorities-

• Any section of the citizens residing in the territory of India or any part thereof having a distinct language, script or culture of its own shall have the right to conserve the same.
• No citizen shall be denied admission into any educational institution maintained by the State or receiving aid out of State funds on grounds only of religion, race, caste, language or any of them.

Article 30 reads – Right of minorities to establish and administer educational institutions-

• All minorities, whether based on religion or language, shall have the right to set up and administer educational institutions of their choice.
• In making any law providing for the compulsory acquisition of any property of an educational institution established and administered by a minority, referred to in clause (1), the State shall ensure that the amount fixed by or determined under such law for the acquisition of such property is such as would not restrict or abrogate the right guaranteed under that clause.[22]
• The State shall not, in granting aid to educational institutions, discriminate against any educational institution on the ground that it is under the management of a minority, whether based on religion or language.

The right of any section of citizens, under Article 29(1) having distinct language, script or culture of their own to conserve the same entitles them to establish and maintain an educational institution for this purpose. The right of religious and linguistic minorities to establish and administer educational institutions of their choice under Article 30(1) also provides a basis and opportunity for education. Although TMA Pai Foundation has expanded the scope for establishing educational institutions especially by liberal interpretation of Articles 19(1)(g) and 26(a), groups of people neither belonging to religious denomination nor to an occupation of teachers nor even coming under Articles 29 and 30 seem to be left out.

Facilities for instruction in mother-tongue at primary stage[23]

Article 350A reads – It shall be the endeavour of every State and of every local authority within the State to provide adequate facilities for instruction in the mother-tongue at the primary stage of education to children belonging to linguistic minority groups; and the President may issue such directions to any State as he considers necessary or proper for securing the provision of such facilities.

The learning and communicative processes involved in the conservation of culture, language, and script are animated by the constitutional policy of mother tongue instruction contemplated in Article 350A. According to Article 350A, “It shall be endeavour of every State and of every local authority within the State to provide adequate facilities for instruction in the mother-tongue at the primary stage of education to children belonging to linguistic minority groups, and the President may issue such direction to any State as he considers necessary or proper for securing the provision of such facilities.”

Although Article 350A is a special directive to the State, its function of strengthening the rights under Article 29(1) suggests receiving instruction in the mother-tongue at the primary stage of education. As observed by MOHAN, J. in English Medium Students Parents Association v. State of Karnataka, [24]“ where the tender minds of children are subject to an alien medium the learning process becomes unnatural. It inflicts a cruel strain on the children which makes the entire transaction mechanical. The basic knowledge can be gathered through the mother tongue. The introduction of a foreign language tends to threaten to atrophy the development of mother tongue.”

Special Officer for linguistic minorities[25]

Article 350B reads –

• There shall be a Special Officer for linguistic minorities to be appointed by the President.
• It shall be the duty of the Special Officer to investigate all matters relating to the safeguards provided for linguistic minorities under the Constitution and report to the President upon these issues at such intervals as the President may direct, and the President shall cause all such reports to be laid before each House of Parliament, and sent to the Governments of the States concerned.

Right to education

It is universally accepted that education empowers the people for the full development of human personality, strengthens the respect of human rights, and helps to overcome exploitations and the traditional inequalities of caste, class, and gender. Learning liberates from ignorance, superstition, and prejudice that blind the vision of truth.[26] According to Dr S. Radhakrishnan, the process of education is the slow conquering of the darkness of faults in our inward being. “To lead us from darkness to light, to be free us from every kind of domination except that of reason, is the aim of education”.[27] It is a preparation for living in a better way in future with an ability to participate successfully in the modern economy and society.[28] As viewed by B.N. KIRPAL, J. it is the single most powerful tool for the upliftment and progress of the society.[29] Education is empowerment for socio-economic mobility, an instrument for reducing socio-economic inequalities, and an equipment to trigger growth and development. The linkage of the right to educational to the right to dignified life, equality, freedom and cultural and minority right has made it highly intricate and the extent of regulations relating to it from different perspectives, quite complex.

The right to education has a relation of mutual assistance with other positive rights of life and with various liberties. As viewed by B.N. KIRPAL, CJI. In TMA Pai Foundation Case, “India is a land of a diversity of different castes, communities, languages, religions and culture. Although these people enjoy complete political freedom, a vast part of the multitude is illiterate and lives below the poverty line. The single most powerful tool for the upliftment and progress of such diverse communities is education.”[30]

Conservation of Distinct Language and Culture

Conservation of language and culture is a complex and continuous process of manifestation and transmission of cultural traits and nurturing of creative abilities. As stated by K.T. Shah in the Constituent Assembly, “whether we think of the arts, the learning, the sciences, the religion or philosophy, culture includes them all, and much else besides. As such, it is progressive and should be regarded as being capable of constant growth as any living organism”.[31] Culture, as a sense of ultimate value possessed by a particular society, and expressed in its collective institutions, endeavours and dispositions, designates a way of life, and deeply influences human behaviour.[32] Eminent thinkers and writers have regarded attainment of perfection in, or through culture as a desirable social practice.[33] Irrespective of the controversial questions, whether it is the state or the concerned cultural community that should monitor the process and direction of refinement, or what shall be the parameters for such reforms, the immense help that the expressional and other freedoms render towards enlightened cultural reforms or at least avoidance of cultural fault lines is significant.[34] Unlike conservation of material resources, which relies on strategies of non-user and lesser user, conservation of language and religion is done by more and more application. Since the life of thought is very much inherent in the life of language symbols of that thought, language serves as a cultural grid to receive and respond to human experiences.[35] Its essence is communication. Therefore, the assistance that Article 29(1) right gathers from freedom of speech, expression, assembly, association, religion and the right to establish and administer educational institutions of their choice is greatly wide and significant. It is because of such relations that in countries like America where cultural and language rights are not constitutionally enumerated, invoking of due process clause or of First Amendment is resorted to.[36] Sometimes equal protection clause is also rewardfully employed.[37]

Conclusion

Though minorities are those whose are numerically less based on their language and culture, it is evident from the above arguments that the Indian Constitution provides certain rights to the minorities residing in several parts of Indian territories. The Constitution of India has not defined the term ‘minority’, but had provided them with all the opportunities needed for their survival in the form of fundamental rights. Since India is a secular country, it is important to maintain the integrity of nation by maintaining a status of equality as because of its rich cultural values and tolerance. Besides this, there are also certain fundamental duties under Article 51A given in Part IV-A of the Constitution of India for every citizen.

The main focus of the law is to create confidence in the mind of such minorities that they are protected by the law of the Constitution and also they are treated equally on par with the majority so that there would be no any kind of discrimination among the citizens.

References:

[1] About aspects of cultural pluralism, see Amartya Sen, Secularism and its Discontents, in Kowshik Basu and Sanjay Subrahmanyam (ed.), Unravelling the Nation (Penguin Books 1996), at p. 43; Anisuzzman, Cultural Pluralism (Calcutta: The Asiatic Society 1993), p. 7; S. Abid Hussain, The National Cultural of India, 3^rd Ed, 6^th Rept. (New Delhi: National Book Trust 1996), at p. 11.

[2]6^th para of Preamble, Resolution No. 47, General Assembly, dated 3^rd Feb 1993. Also see, Janusz Symonides, Cultural Rights’ in Janusz Symonides (ed.), Human Right: Concept and Standards (Aldershot: Ashgate Darthmouth, UNESCO Publishing 2000), p. 175 at 178.

[3]Poem by Rabindranath Tagore as referred by Das, CJ in In re, Kerala Education Bill, AIR 1958 SC 956; 1959 SCR 995.

[4]See DAV College v. the State of Punjab, AIR 1971 SC 1731; (1971) 2 SCC 261. Also see a note issued by Minority Commission, New Delhi, on 7 June 1998 to this effect.

[5]AIR 1958 SC 956; 1959 SCR 995.

[6]AIR 1971 SC 1731.

[7]Mark Netto v. State of Kerala, AIR 1979 SC 83; (1979) 1 SCC 23.

[8]TMA Pai Foundation v. State of Kerala, AIR 2003 SC 355; 2002 (8) SCALE 1.

[9]Ibid, at 91,92 (paras 252-259).

[10]Vol. VII, C.A.D., pp. 900-901.

[11]Ibid.

[12]Ibid.

[13]Ratilal Panachand Gandhi v. State of Bombay, AIR 1954 SC 388: 1954 SCR 1055.

[14]Punjabrao v. D.P. Meshram, AIR 1965 SC 1179: (1965) 1 SCR 849.

[15]Supra 15.

[16]P.M.A. Metropolitan v. Moran Mar Marhaoma, 1995 supp (4) SCC 286: AIR 1995 SC 2001.

[17]Brahmachari Siddeshwar v. State of West Bengal, AIR 1994 SC 13: (1993) 4 SCC 286.

[18]2002 (8) SCALE 1 p. 17 (para 26).

[19]AIR 1975 Del 168. See also, Bira Kishore Mohanty v. State of Orissa, AIR 1975 Ori 8.

[20]AIR 1974 Ker 48.

[21]Papanna v. State of Karnataka, AIR 1983 Kant 94.

[22]Ins. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 4 (w.e.f. 20-6-1979).

[23]Ins. by the Constitution (Seventh Amendment) Act, 1956, s. 21.

[24] 1993 (4) SCALE 627 at 633.

[25]Ins. by the Constitution (Seventh Amendment) Act, 1956, s. 21.

[26]Citing from Sanskrit text, per MOHAN, J. in J.P. Unnikrishnan v. State of AP AIR 1993 SC 2178.

[27]Report of the University Education Commission 1948 cited in TMA Pai Foundation v. State of Karnataka (2002) 4 LR 1; 2002(8) SCALE 1; AIR 2003 SC 355.

[28]Brown v. Board of Education, 98 L Ed US 347 (1954); 98 L Ed 873; 347 US 483 (1954).

[29]TMA Pai Foundation v. State of Karnataka, (2002) 4 LR 1; 2002(8) SCALE 1 at 2.

[30] 2002 (8) SCALE 12 (para 1).

[31] Vol. VII, C.A.D., p. 896.

[32] Abid Hussain, The National Culture of India, 3^rd Ed, 6^th Rept. (New Delhi: National Book Trust 1996), p. 3; Rasheeduddin Khan, The Problematique: The Heritage of Composite Culture as an Input in the Process of Building a New National Identity in Tasheeduddin Khan (ed), Composite Culture of India and National Integration (New Delhi: IIAS and Allied Publishers 1987), p. 24. see, Janusz Symonides, Cultural Rights’ in Janusz Symonides (ed.), Human Right: Concept and Standards (Aldershot: Ashgate Darthmouth, UNESCO Publishing 2000), pp. 179-80.

[33] Matthew Arnold, Culture, and Anarchy, (ed), J. Dover Wilson (Cambridge: University Press 1971),p. 48; V.K. Gokak, India and World Culture (New Delhi: Sahitya Academy 1994), p. 9; M.K. Gandhi, Harijan 5-12-1936; Hindu Dharma, p. 30.

[34] Veena Das, Cultural Rights and the Definition of Community in Oliver Mendesohn and Upendra Baxi (ed.), The Rights of Subordinated Peoples (Delhi: Oxford University Press 1996), 117 at 122; Robert Unger, Knowledge and Politics (New York: Free Press 1985), pp. 339-40.

[35]Reek Dickerson, The Fundamentals of Legal Drafting, (Boston: Little, Brown & o. 1965), pp. 10-11.

[36]Meyer v. Nebraska, 262 US 390; 67 L Ed 1042 (1923); Pierce v. Society of Sisters, 268 US 510; 69 L Ed 1070 (1925).

[37]Lau v. Nichols, 414 US 563; 39 L Ed 2d 1 (1974).

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In this blog post, Arya Nisal, from ICFAI University, Dehradun discusses the concept of arbitration and analyses the BSE Arbitration. 

Introduction to BSE (Bombay Stock Exchange)

The BSE (Bombay Stock Exchange) is Asia’s first stock exchange established in 1875 in Maharashtra. It was founded by Premchand Roychand and was the first stock exchange to be recognised by the government of India, under the Security Contract (Regulation) Act, 1956. The main objectives of BSE are to help in the growth of Indian capital market, to maintain market integrity and safeguard the interest of the investors. The shareholders of BSE are not only from India but also from other countries. It deals with a kind of business transaction in which two parties agree to perform a contract. If any of the parties breached the contract, then there is a chance of dispute between them. Therefore, to resolve the disputes, claims and difference between the trading member and non-trading member and between trading members inter-se, BSE has established an Arbitration Mechanism embodied in the Rules, Bye-laws and Regulations of BSE. All disputes arising out of the transaction between the parties can be resolved by the Arbitration Mechanism provided by the Exchange.

Arbitration Mechanism 

Arbitration is a quasi-judicial process in which disputes between trading members, shareholders, sub-brokers shall be settled by the sole arbitrator or a panel of arbitrators.

Investors who have disputes with trading members can apply for arbitration.

Trading members, who have disputes with non-trading members or investors or with other trading members can apply for arbitration.

Jurisdiction of Courts

In respect of any proceeding in which the BSE is a party then the court of Bombay will have the exclusive jurisdiction and in respect of any other proceeding, courts having jurisdiction over the area in which the respective Regional Investor Service Centre is situated shall have the jurisdiction.

The disputing parties are required to send all relevant documentary proof as contract notes, statement of accounts, bills, etc. along with the prescribed arbitration form duly filled into the Regional Arbitration Centre of that area.

Arbitral Tribunal

To resolve the disputes between trading members and non-trading members, the Arbitral Tribunal is appointed by the Arbitration Committee. The Arbitration Committee appointed for this purpose, consists of retired Judges of the High Court, Advocates, Chartered Accountants and other eminent persons with specialised knowledge or skills in this field. Arbitral Tribunal may consist of a sole arbitrator or a panel of arbitration.

Arbitration Committee: The provisions relating to the arbitration committee dealing with arbitration between trading members inter-se and between trading members and non-trading members are laid down in the Rules, Bye-laws and Regulations of the BSE.

Arbitration between trading members inter-se

The provisions relating to the Arbitration Committee dealing with arbitration between trading member inter-se are given in Bye-Laws Nos.282-315 of the Rules, Bye-Laws and Regulations of the BSE.

The number of arbitrators depends upon the pecuniary value of the claim such that if the value of the claim exceeds 25,000, then the bench of three arbitrators is appointed by the Arbitration Committee to decide on such disputes. And if the value of the claim is up to 25,000 then only one arbitrator from the Arbitration Committee is to be appointed to look into such matters.

The trading member filing an arbitration reference is required to attach a coupon of Rs 100 along with the application form. Both the parties, i.e., applicant and respondent or their accredited representatives are required to present in the arbitration proceeding. On hearing both the parties, the award will be given by the arbitrators.

Provisions of Appeal in the Lower Bench of Arbitration and Full Bench of Arbitration: The aggrieved party, who is not satisfied with the award given by the Lower Bench Arbitration Committee, may file an appeal before the Full Bench of Arbitration Committee within seven days from the date of receipt of the award by him if the principal amount of claim disallowed by the Lower Bench to the appellant exceeds Rs 1, 00,000 or the principal amount awarded by the Lower Bench against the appellant exceeds Rs 1, 00,000. The party who desire to file an appeal before the Full Bench of Arbitration is required to deposit the amount award/shares as stated in the lower Bench with the Exchange along with a fee of Rs 500. The amount of award or shares is retained in the BSE until the Full Bench of Arbitration Committee decides the case. All the members of the Full Bench of Arbitration Committee decide the case against the award given by the Lower Bench of Arbitration Committee.

Appeal before the Board of Directors: The aggrieved party who is not satisfied with the award of Full Bench of Arbitration may file an appeal before the Board of Directors within seven days from the receipt of the award from the Full Bench by him if the principal amount of claim disallowed by the Full Bench to the appellant exceeds Rs 5, 00,000 or the principal amount awarded by the Full Bench against the appellant exceeds Rs 5, 00,000. The Party is required to deposit the amount of award or shares as stated in the Full Bench of Arbitration with the Exchange along with the fee of Rs 750. The Board of Directors is the final Appellate authority, and generally, no further appeal is possible against the decision given by them. But in some special circumstances, the Board of Directors may permit the aggrieved party to file a further appeal to Court of Law.

Arbitration between non-trading members and trading members

The provisions related to arbitration between non-trading members and trading members are laid down in Bye-Laws Nos. 248-281 of the Rules, Bye-Laws and Regulations of the BSE.

An Arbitral Tribunal of three arbitrators is appointed in case the value of the claim exceeds Rs 25, 00, 000 whereas an Arbitral Tribunal of only one arbitrator is appointed in case the value of the claim is up to Rs 25, 00, 000.

IN CASE OF a CLAIM UPTO Rs 25, 00, 000: In this case, the respondent gives consent to any one of the three arbitrators proposed by the applicant, and that consented person acts as an arbitrator in such a matter. If the respondent refuses to choose any of the proposed arbitrators, then the Managing Director or CEO of the Exchange appoints the arbitrator for that matter. Both the parties are required to deposit the prescribed fees, and the deposited fees will be refunded after deducting the statutory charge to the award holder.

IN CASE OF CLAIM EXCEEDING Rs 25, 00, 000: In this case, an Arbitral Tribunal of three arbitrators is appointed, one each by the applicant and the respondent and one by the Managing Director or the CEO of the Exchange as per the Rules, Bye-Laws and Regulations of BSE. If any of the parties fail to appoint the arbitrator then the Managing Director or the CEO of the Exchange, appoints the arbitrator on their behalf. Both the parties are required to deposit the prescribed fees, and the deposited fees will be refunded to the award holder after deducting the statutory charge.

Application Form: A copy of documents filed by the applicant along with the applicable forms are sent to the respondent who then has to submit the counterclaim if any, consent to the arbitrators or appointment of arbitrator along with the arbitration fees. The forms are available the website of BSE i.e. http://www.bseindia.com .

After that notice of hearing sent to the parties as arranged by the arbitrator. An advocate may appear on behalf of each party if the Arbitral Tribunal has granted the permission.

Time Limit: The Arbitral Tribunal shall make the award within four months of the appointment of an Arbitrator. The time limit can be extended due to some reasonable cause if the same is approved by the Managing Director or The CEO of the Exchange, but it shall not be extended for more than two months (Bye-Laws No.254 of the Rules, Bye-Laws and Regulations of the BSE).

Appeal: An aggrieved party can file an appeal against the award of the arbitrators within 30 days from the receipt of the award. The party filed for appeal is required to pay the applicable fees as decided from time to time. The party who is not satisfied with the award given by the lower Bench can file an appeal with the Appellate Bench. If the appeal is preferred in, the same is decided by the Appellate Bench of three arbitrators and the award given by that Bench will be final and binding on both the parties subject to challenge under Section 34 of The Arbitration and Conciliation Act, 1996. The Appellate Bench decide the award within three months from the date of appointment of an arbitrator or within an extended time which shall not be more than two months in case of any reasonable cause as approved by the Managing Director or the CEO of the Exchange.

Settlement of Award

 If the award is made against the trading member, then the trading member is required to make the payment award either directly to the award holder or deposit the award amount into the Exchange. If the member fails to do so, then the awarded amount will be deducted from his deposit into the Exchange. If no fund is available as a deposit into the Exchange, then BSE will send a so cause notice to the member. If the member still does not make the payment, then the matter is placed before the Disciplinary Action Committee for suitable action and which declares that member as Defaulter. If the award has not been challenged under Section 34 of The Arbitration and Conciliation Act within prescribed time limit then on the expiry of such period the award will be enforceable as if it is the decree of the court.

Settlement of award against the defaulter member: If the Disciplinary Action Committee declares any trading member as a defaulter then the award is placed before the Defaulters’ Committee. The Committee recommends payment of the award to the award holder from the Investors Protection Fund (IPF) of the Exchange to the extent of the amount awarded or the maximum permissible amount from the fund, whichever is lower. The maximum amount payable from the fund at present is Rs 15, 00, 000 per client per defaulter and shall apply to the clients of the trading member of the Exchange, who will be declared a defaulter. SEBI vide its circular dated 26^th September 2013 empowered the Investors’ Grievances Redressal Committee (IGRC) to decide the value of the claim to the investors against the trading members which defers from case to case.

Publication of the award

After the award is made by the arbitrators, a duly signed copy of the award shall be delivered to each party, i.e., the award holder and the member against whom the award is made.

Correction of the Award

If there is any clerical error, mathematical error, computational error or any other similar error then within 15 days of the receipt of the award, any party with the notice to the other may request the arbitrator or arbitrators to correct the error. If the application is considered as justified by the arbitrator(s), then it shall make the correction. The arbitrator may suo moto correct the error if any, within 10 days of making the award and correct copies of the award shall be given to the parties.

Award binding on parties and their representatives

An award made by the arbitrator will be final and enforceable on the parties as well as their legal representatives subject to section 34 of the Arbitration and Conciliation Act, 1996. So if any legal disability or death of any party before or after the award is made, shall not operate as the revocation of the award.

Kassa Case

In this case, it was alleged that Kassa Finvest Private Limited had misused the funds of investors. In May 2015, BSE expelled Kassa when SEBI had found that the broker was illegally selling the securities of investors and raised funds.

The BSE on July 2016 said that the investors could file an arbitration against the broker within 90 days from the date of issue of notice dated July 5, 2016, by the Exchange. The client who filed complaints within 90 days and if the award is in favour of the client against the trading member, would only be eligible for receiving compensation from the Investors Protection Fund (IPF).

Notes

• ARBITRATOR: – An arbitrator is an independent person chosen to decide the disputes or settle differences between the parties and helping them to agree to an acceptable solution.
• AWARD: – Award means a decision made by arbitrator or Arbitrator Tribunal after hearing the disputes between the parties and that award shall be binding on both the parties.
• COUNTER CLAIM: – Counterclaim is an amount claimed by the respondent in the arbitration proceeding.
• JURISDICTION OF COURT: – The power of the court to try all cases and rule on legal matters within a specific geographical area.

References: 

• http://www.business-standard.com/article/companies
• http://www.bseindia.com/investors/Arbitrage.aspx?expandable=3
• http://www.bseindia.com/investors/services.aspx?expandable=1
• http://economictimes.indiatimes.com/markets/stocks/policy/sebi-bars-kassa-finvest-for-misutilisation-of-investor-funds/articleshow/46676816.cms
• http://economictimes.indiatimes.com/topic/BSE
• https://www.pressreader.com
• Rules, Bye-Laws and Regulations of BSE
• The Arbitration And Conciliation Act, 1996

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In this blog post, Arpita Kulkarni, from Balaji College, Pune discusses the concept of economic justice while providing steps on what needs to be done if a company does not pay or delays in paying the PF Amount. 

The concept of Economic Justice under Constitution of India

The Preamble of India gives vital importance to the term “JUSTICE” which not only means Social Justice but also Economic Justice. Besides the Preamble to the Constitution, the Directive Principles of States Policy which are enshrined under Art. 36 to Art. 51 strengthen and promote the concept of economic justice by seeking to lay down some socio-economic goals which the States have to strive to achieve.[1] Article 43 says workers should have the right to a living wage and “conditions of work ensuring a decent standard of life not only during the course of his/her employment but also after that. Fundamental Rights under part III of the Constitution of India envisages the principle of social and economic justice by providing Art. 21 which declares that every person of every class has a right to live with dignity which connotes to the fact that working class or an employee has rights to be protected under labour laws so as to live a dignified life during their employment and even after that.

Labour Laws in India

The most vulnerable class subjected to economic injustice is the working class of society. To achieve the socio-economic goals pertaining to the working class, the Indian Government has enacted some beneficial enactments for the welfare and protection of the interests of employees viz. Payment of Wages Act, 1936; Industrial Disputes Act, 1947; The Payment of Gratuity Act,1972; The Payment of Bonus Act,1965; The Employees Provident Fund and Miscellaneous Provisions Act 1952; etc. The most beneficial among the abovementioned enactments is the Employees Provident Fund and Miscellaneous Provisions Act 1952 which functions as a pension fund for old age security for the organised workforce sector. The Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 has been enacted with the main objective of protecting the interest of the employees after their retirement and their dependents after death of the employee. The Act provides insurance to workers and their dependents against risks of old age, retirement, discharge, retrenchment or death.

Concept of Provident Fund

A provident fund is created to provide financial stability and security to the working class. An employee begins contributing to this fund on a monthly basis when he/she starts out as an employee. The purpose of an EPF is to help employees save a part of their salary every month to be used when the employee is no longer fit to carry on working, i.e., when the employee has to retire from service, or terminated, or is retrenched for any valid reasons. Entry 24 of List III of Schedule Seven of Indian Constitution provides the welfare of labour including conditions of work, Provident Funds, employer’s liability, workmen’s compensation, invalidity and old age pensions and maternity beliefs.[2] Deductions from the wages of an employed person shall be made only in accordance with the provisions of Payment of Wages, 1936 Act related to deductions for subscriptions to, and for repayment of advances from any provident fund to which the Provident Funds Act, 1952, applies or any recognized provident fund as defined in clause (38) of section 2 of the Income-tax Act, 1961 (43 of 1961)] or any provident fund approved in this behalf by the appropriate Government, during the continuance of such approval.[3]

“Contribution” means a contribution payable in respect of a member under a scheme or the contribution payable in respect of an employee to whom the Insurance Scheme applies.[4]

Therefore, both the employer and employee contributes to the Employees Provident Fund at a rate of 12% of the basic salary and dearness allowance (if any) every month. This fund is maintained and overseen by the Employees Provident Fund Organisation of India (EPFO). Any company with over 20 employees is required by law to register with the EPFO which is the authority made under the said Act to check the correct implementation of the Act.

Protection of Interests of Working Class under Employees Provident Funds & Miscellaneous Provisions Act, 1952

The scheme of the Act is that each employer and employee in every ‘establishment’ falling within the Act do contribute into a statutory fund a little of the wages to sell into a large fund wherewith the workers who toil to produce the nation’s wealth during their physically fit span of life may be provided with some retiral benefit which will ‘keep the pot boiling’ and some source wherefrom loans to face unforeseen needs may be obtained. This social security measure is a human homage the State pays to Article, 39 and 41 of the Contribution. The viability of the project depends on the employer duly deducting the workers’ contribution from their wages, adding his own little and promptly depositing the nickel into the chest constituted by the Act. The mechanics of the system will suffer if the employer fails to perform his function. The dynamics of this beneficial statute derives its locomotive power from the funds regularly flowing into the statutory till.[5]

In Sarvaraya Textiles Limited v. Commissioner, Employees Provident Fund, the Court observed that the Appellant’s case is that the Appellant does not have sufficient cash flow and has been irregular in the payment of salaries and wages of employees and workers as well as in depositing the amounts deducted from them towards the EPF and the ESIC contribution. We realise the hardship faced by the workers due to delay in payment of their wages. We also feel concerned about the fate of workers who have died or retired and have not received their legal dues. We are also aware that EPF and ESIC organisations have their policies for recovery of arrears of EPF and ESIC dues over a period in case rehabilitation schemes are sanctioned by BIFR/AAIFR. Keeping in view of the essential need of fairness to workers, without jeopardising the preparation of a workable rehabilitation scheme for the appellant company, we order –

• The PF dues (including the contribution of the employees/workers and the employer) of the expired workers shall be paid within one month.
• The EPF dues (including the contribution of the employees/workers and the employer) of the superannuated employees/workers shall be paid within three months.
• The EPF dues (including the contribution of the employees/workers and the employer) of employees/workers superannuating hereinafter or expiring before superannuation, shall be paid within one month of superannuation/expiry.[6]

Hence, the Judiciary has been very active from the very beginning in giving justice to those employees who have been denied their Provident Fund. ‘But, the question arises here is that what is the basic remedy available to the employee of any Company if his Company does not pay or delays his Provident Fund before seeking remedy from the Apex Court.’ To answer this question, the legislature has enacted a very beneficial law to protect the employees who are subjected to non-payment of Provident Fund amount. The employee will get the benefits of the Provident Fund scheme if his wages were subjected to the authorised deductions provided under Section 7(2)(i) of Payment of Wages Act, 1936 as aforementioned.

Remedies available to employees if he do not receive Provident Fund amount

Employees Provident Funds & Miscellaneous Provisions Act, 1952 applies to –

• to every establishment which is a factory engaged in any industry specified in Schedule I and in which twenty or more persons are employed and
• to any other establishment employing twenty or more persons or class of such establishments which the Central Government may, by notification in the Official Gazette, specify, in this behalf, provided that the Central Government may, after giving not less than two months‟ notice of its intention so to do, by notification in the Official Gazette, apply the provisions of this Act to any establishment employing such number of persons less than twenty as may be specified in the notification.[7] Therefore, any establishment (also company) comes within the purview of the said Act if it contains more than 20 persons.

Section 7A of the said Act provides: Determination of monies due from employers – The Central Provident Fund Commissioner, any Additional Central Provident Fund Commissioner, any Deputy Provident Fund Commissioner, any Regional Provident Fund Commissioner or any Assistant Provident Fund Commissioner may, by order,

• in a case where a dispute arises regarding the applicability of this Act to an establishment, decide such dispute; and
• determine the amount due from any employer under any provision of this Act, the Scheme or the Pension Scheme or the Insurance Scheme, as the case may be, and for any of the aforesaid purposes may conduct such inquiry as he may deem necessary.[8]

Section 7B of the said Act provides: Review of orders passed under Section 7A

• Any person aggrieved by an order made under sub-section 1 of section 7A, but from which no appeal has been preferred under this Act, and who, from the discovery of new and important matter or evidence which, after the exercise of due diligence was not within his knowledge or could not be produced by him at the time when the order was made, or on account of some mistake or error apparent on the face of the record or for any other sufficient reason, desires to obtain a review of such order may apply for a review of that order to the officer who passed the order: Provided that such officer may also on his own motion review his order if he is satisfied that it is necessary so to do on any such ground.
• Every application for review under sub-section one shall be filed in such form and manner and within such time as may be specified in the Scheme.
• Where it appears to the officer receiving an application for review that there is no sufficient ground for a review, he shall reject the application.
• Where the officer is of opinion that the application for review should be granted, be shall grant the same.[9]

Though employer is at fault, the Act purports that employee needs to be cognizant if he is subjected to non-payment or delay in receiving Provident Fund amount by providing Section 7A and Section 7B.

Another provision which focuses the remedy given to the employee in case he is working in any Company is section 14A which provides for Offences by companies:

• If the person committing an offence under this Act, the Scheme or the Pension Scheme or the Insurance Scheme is a company, every person who at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any such person liable to any punishment, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.
• Notwithstanding anything contained in sub-section 1 where an offence under this Act, the Scheme or the Pension Scheme or the Insurance Scheme has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any Director or Manager, Secretary or another officer of the company, shall be deemed to be guilty of that offence and shall be liable to be prosecuted against and punished accordingly.

It was observed in Ralliwolf Limited v. The Regional Provident Fund Officer [10]that “the measure was enacted for the support of a weaker sector viz. the working class during the superannuated winter of their life. The financial reservoir for the distribution of benefits is filled by the employer collecting by deducting from the workers’ wages, completing it with his own equal share and duly making over the gross sums to the Fund. If the employer neglects to remit or diverts the monies for alien purposes the Fund dry and the retirees are denied the meagre support when they most need it. This prospect of destitution demoralises the working class and frustrates the hopes of the community itself.”

The point that should be mentioned here is that Constitution of India under “Directive Principles of State Policy” provides that the State shall within the limits of its economic capacity make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old-age, sickness & disablement and undeserved want. The said Act was enacted by the Parliament of India and came into force with effect from 4 March 1952 as part of a series of legislative interventions made in this direction. Presently, the following three schemes are in operation under the Act:

• Employees’ Provident Fund Scheme, 1952
• Employees’ Deposit Linked Insurance Scheme, 1976
• Employees’ Pension Scheme, 1995

Hence, in the case of non-payment or delay of Provident Fund amount, an employee has been given remedy under Employees Provident Funds & Miscellaneous Provisions Act, 1952 which is a social legislation aiming at providing financial security to the employees after completion of their service.

Amendments in Employees Provident Funds & Miscellaneous Provisions Act, 1952

The Ministry of Labour and Employment, Government of India, has recently made few amendments in the Employees’ Provident Fund Scheme, 1952 (PF Scheme). These guidelines are mainly related to ‘early withdrawals from Provident Fund & provisions related to PF withdrawals. These latest EPF withdrawal rules are effective from 10 February 2016.

Amendments are related to;

• Full EPF balance cannot be withdrawn before attaining the new Retirement Age of 58 years.
• Continuity of EPF membership.
• Increase in Age limit to withdraw 90% of PF balance.
• Partial withdrawal of EPF amount on Resignation.
• Increase of retirement age.[11]

Conclusion

It is concluded that every employee has a right to avail Provident Fund amount from the company if he has contributed to the Provident Fund by seeking the remedies available in labour law legislations viz. Payment of Wages Act, 1936; and the Employees Provident Fund and Miscellaneous Provisions Act 1952.

It was observed in N.K. Jain & Ors v. C.K. Shah & Ors [12]that “the concept which prompted the Legislature to enact this welfare law should also be borne in mind in the interpretation of the provisions. Chagla, C.J. in Prakash Cotton Mill. (P) Ltd. v. the State of Bombay, [1957]2 LLJ 490 observed as under: “no Labour legislation, no special legislation, no economic legislation, can be considered by a court without applying the principles of social justice in interpreting the provisions of these laws.”

An employee should seek the redressals purporting to the abovementioned legislations as their right and then only socio-economic goals aimed by the Constitution can be achieved with full justice to the working class.

References:

[1] Indian Constitutional Law by MP Jain (7^th Edition)

[2] Dayalal v. State of Madhya Pradesh, AIR 1962 MP 342

[3] Payment of Wages Act,1936: Section 7(2)(i)

[4] The Employees’ Provident Funds & Miscellaneous Provisions Act, 1952: Section 2(c)

[5] Organo Chemical Industries v. Union of India, AIR 1979 SC 1803

[6]Sarvaraya Textiles Limited v. Commissioner, Employees Provident Fund, 2002 (2) LLN 501 (AP) : 2002 (1) LLJ 611

[7] Employees Provident Funds & Miscellaneous Provisions Act, 1952: Section 1(3)

[8] Employees Provident Funds & Miscellaneous Provisions Act, 1952 Section 7A

[9] Employees Provident Funds & Miscellaneous Provisions Act, 1952 Section 7B

[10] Ralliwolf Limited vs The Regional Provident Fund officer, (2001) 1 BOMLR 235

[11] https://biblehr.com/epf-withdrawal-new-rule-notification and also https://biblehr.com/wp-content/uploads/2016/03/EPF-Withdrawal-New-Rule-Notification.pdf 

[12] N.K. Jain & Ors v. C.K. Shah & Ors AIR 1991 SC 82

The post What to do if the Company does not pay or delays the PF Amount appeared first on iPleaders.

In this blog post, Noopur Kalpeshbhai Dalal, pursuing M.A. in business law from NUJS, Kolkata, talks about the steps you can take if your right to do business is curtailed by a Government notification.

I. Conceptualization

The right to do business is a fundamental right given to the citizens of India under Article 19 (1) (g) of part III of the Constitution of India which came into force on 26th November, 1949. Upon its enactment the Constitution of India laid down six fundamental rights for the benefit and development of each and every citizen of India irrespective of their race, place of birth, religion, caste or gender.

Amongst the six fundamental rights, Article 19 (1) (g)[1] provides all the citizens of the country the right to practice any profession, occupation, business or trade of their choice subject to certain restrictions as laid down under Article 19 (6)[2]. Article 19 (1) (g) is a general right available to all the citizens of the country to carry on any type of business, occupation or profession to satisfy their livelihood needs. However this fundamental right does not confer the right to carry on any business, trade, occupation or profession which is unlawful or is hindering general public interest[3].

Thus, if the nature of any business is such that it hinders the working of any government statutory body or prevents the enforcement of any statutory law enacted by the government or is illegal then that person carrying on such business is not entitled to claim his fundamental right of occupation as per  Article 19 (1) (g)[4]. Also the state or any statutory body does not possess any power to impose any restrictions or create any situations which make any business unlawful or create any circumstances to help any person procure customers for his business[5].

Article 19 (6) provides that nothing stated in the Article 19 (1) (g) shall prevent the government from enactment of any new law or prevents the working of any existing law in the interest of general public as a whole. Sub clause (i) of Article 19 (6) states the enactment of any law for any professional or technical occupation or trade or business which requires any particular professional or technical qualifications that can only be carried on by a personal having such professional or technical qualifications for the same. Sub clause (ii) of Article 19 (6) states the enactment of any law for carrying on of any business, industry or service by the state or by a corporation which is controlled by the state either exclusively or partially.

The terms Business, Constitution and Fundamental rights are explained hereunder:

• Business

The term business means any commercial activity, trade, employment, profession or occupation for earning profit or livelihood. As per the Income Tax Act, 1961 the term business includes any trade, commerce, manufacture or even any adventure or concern in nature of trade, commerce or manufacture. The term includes every trade occupation or profession.

• Constitution

The term Constitution refers to the framework which defines the fundamental rules, principals, functions, duties, procedures & powers of government institutions. It also establishes the fundamental rights, directive principles, duties of the citizens.

• Fundamental Rights

The term Fundamental Rights mean the general human freedom which every citizen is entitled to for his proper personality development.

II. Scope of Article 19 (1) (g)

A. Freedom to carry on any business

“Right to do Business” under Article 19 (1) (g) gives a huge and general right to the people of India to carry on any business of their choice. The freedom to carry on any business of one’s choice does not include a right to carry on any activity which is illegal of nature such as business of selling and buying of liquor and drugs in a prohibited area/state.

Also the freedom to carry on any business does not include the right to carry on such activity which hinders public interest or peace of the country such as creating riots, bandh or any such activity which hampers the public peace. The freedom to do any business can be availed by an individual only if it does not prevent imposing of any existing or new statutory laws in the country.

Thus, the freedom to do Business includes the freedom to carry out any commerce, activity, trade or profession which is in benefit of the general public and is a legal activity as per the prevailing laws of the country. Also, one cannot claim his right to do business if by carrying out his business it hinders the human or fundamental rights of any other individual.

B. Right to do any business under Article 19 (1) (g) is available against the State and not any particular person

Indian judiciary in many cases has upheld that the fundamental rights given to the citizens of India under Article 19 (1) (g) are available against any state or state body. Any claim for violation of any such rights against any particular individual cannot be claimed under the fundamental rights it has to be subjected under the Law of Torts in the Civil Courts.

Thus, it is clear that only when the violation of any fundamental right is on the part of the state, the aggrieved person has the below mentioned three options:

• He can approach the Ordinary Court.
• He can approach the High Court under Article 226 of the Constitution of India.
• He can approach the highest court i.e. the  Supreme Court under Article 32 of the Constitution of India.

C. Right to do any business under Article 19 (1) (g) is available only to the Citizens of India

The right to do business under Article 19 (1) (g) is available only to the Citizens of India i.e. living natural humans having Indian Citizenship and not available to non-citizens. A non-citizen cannot claim the fundamental rights under Article 19 of the Constitution of India[6]. Thus, in such cases the burden of proof of citizenship is on the person who is claiming his right against any state or body.

For the purpose of the Right to Business the below mentioned entitles are considered to be non-citizens:

• A Company incorporated under the Companies Act, 1956 or the Companies Act, 2013.
  However the fundamental rights of the members or shareholders of the Company are not taken away by law for being associated with such company.[7]
• A religious Sect or group or a section thereof.
• Municipal Committee.
• A Juridical Union or a juristic person.
• A Deity.

From the above it is clear that the right to do business under Article 19 (1) (g) of the Constitution of India, 1949 is available to any citizen of India. As per the judgement in a case the Supreme Court held that when the infringement of any fundamental right is claimed by an association of persons who are the citizens of India or corporation being the aggregation of the Citizens of India. In such case the association of people or corporation is not considered to be a company/non-citizens.

D. Whether right to do business under Article 19 (1) (g) is available to the foreigners

It is clear from point C above that the rights under Article 19 (1) (g) are not available to Non-Citizens, hence, the same cannot be claimed by the foreigners. However, Article 14, 20, 21 and 22 are even available to the non-citizens.

A non-citizen though not entitled to the fundamental rights under article 19 is entitled to equal protection of law and equality before Law by the Constitution of India. The Honourable Supreme Court of India has held in many cases that the judiciary in any such case will not tolerate any inequality before law or judicial review in case of any contract or arrangement where a foreign party/ individual/ entity is involved. However, any foreigner/non-citizen cannot challenge the constitutionally of any law by applying his rights under Article 14 and 21 of the Constitution of India, 1949.

III. Right to do Business as read with the Laws of Other Countries

• SWITZERLAND

Article 31 guarantees freedom of trade and industry throughout the confederation, but reserves the following to the states, viz. salt and gunpowder monopolies, federal duties, import duties of wine and other alcoholic beverages[8].

• GERMANY

Article 12 declares that all Germans have the rights of free choice of occupation, place of employment and place of training. Pursuit of occupation may be regulated by legislation. No one shall be forced to do a particular job except in virtue of an established general obligation to perform a public service lying equally upon all[9].

• SOUTH AFRICA

Section 136 provides that there shall be free trade throughout the union. And the parliament shall frame the law to provides the custom duties and levy the excise duties on productions so as to enable every citizen to secure the rightful work[10].

• ROMANIA

Article 19 declares that all citizens have right to work and the State shall gradually secures this right by planned organization for the development of national economy[11].

• USA

There is no specific provision in the Constitution of the USA guaranteeing the right to freedom of profession, trade or occupation etc. but right to freedom of trade, business and profession has been held by the judicial interpretation, which follow from the right and property. The 14th Amendment assuring the citizens that the state shall deprive any person of life, liberty or property without due process of any contains the guarantee to the individual freedom to practice any profession, trade or occupation he chooses[12].

IV. Restrictions on the Right to do Business as per Article 19 (6)

What is Restriction?

Restriction means to pass an order or rule to limit your freedom to something, to limit the quantity, size or amount of something you can do or any such limit which prevents you to do what you want to do as per your own choice. So, restriction is basically putting a limit on some person to prevent him/ her from doing what he wants to do.

In reference to the right to do business, restriction means imposing restriction to the fundamental rights given to the Citizen of India under Article 19 (1) (g).

Article 19 (6) of the Constitution of India, 1949 has imposed certain restrictions on the right to do business given by the Constitution to the citizens of India under Article 19 (1) (g). The restrictions as per the Article 19 (6) can be summarized as under:

1.     Imposing reasonable restrictions on the freedom to trade, occupation, profession and business in the interest of general public
2.    Professional and technical qualifications
3.    To carry on any trade or Business

The above three restrictions as imposed by Article 19 (6) can be briefly understood as under:

a.  Reasonable Restrictions

Reasonable means which is supported with a reason behind it. Thus, reasonable restrictions refer to such limits or restrictions imposed on the right to do business of a citizen with which any logic or intelligent care and deliberations are taken into considerable before imposing such restrictions. Mere arbitrariness cannot be defined as a reasonable restriction.

When a reasonable restriction is imposed on a person for enjoyment of his right to do business, then it should not be arbitrary or it should not be excessive or beyond what is actually needed in the interest of general public.

Also, to justify a restriction as reasonable, the restriction must be in relation to the object to which the law is seeking attainment and it should not be in excessive nature[13].

There must be a nexus between the restriction and the object which is sought to be attained and also it should not be objectionable to the whole spirit of the Constitution[14].

The Reasonable restrictions should always be in the interest of the general public and not in the interest of a particular person or citizen[15].

How to test whether a particular restriction is a Reasonable restriction or not?

The test of reasonability of a restriction is of complex nature. Judiciaries at different point of time in different cases have given distinguished decisions and judgments for the test of reasonability based on the merits of the case. The Judiciary or Legislation has not prescribed any stringent rules for the test of reasonability of a restriction imposed on a person on a rule. However there are some basic factors on basis of which we can decide if a particular restriction is reasonable or not.

The basic factors can be summarized as below:

1. The purpose of the restriction
2. The nature of the right which is curtailed
3. The prevailing social and other conditions at that time in the state/country
4. The interest of general public involved with such restriction
5. The extent to which such restriction is imposed

b. Unreasonable Restrictions

The restrictions which are not reasonable in nature are unreasonable restrictions. A restriction which curtails the right to business given by the constitution of India to its citizens without any reasonable object behind it is an unreasonable restriction.

Unreasonable restrictions can be better understood based on the below mentioned examples:

1. When the right to do business of the business of a citizen is restricted due to political bandhs created by any political party.
2. Granting of monopoly trade license to some trader by the municipal commissioner for his personal benefits and restricting the right to do business of the local traders and their means of livelihood.

Also, it is necessary to note that a restriction cannot be categorized as an unreasonable restriction on the grounds that it operates severely, even if the aggrieved parties are local traders.

c. Prohibition for the interest of General Public

When the state or a central legislature totally takes away the fundamental right to do business of an individual for the benefit of the society and in the interest of the public, then it is said to be a prohibition.

Sometimes, it may be possible that the reasonable restriction imposed on some business is a complete prohibition. Though, the Constitution of India has given full freedom to work under the fundamental rights, the state and central has right to impose complete restriction on the said right if the same is in order to bring political, social, and general order in the society for the interest of general public and protecting the common good of the people.

For example, if some restriction is imposed by the state to maintain public peace during riots, to protect public morale, prevent crime and corruption then such restriction is in the interest of general public and claim cannot be made under the fundamental rights for protection of the right to do business of a person.

There are some basic factors on basis of which we can decide if a particular restriction is for the interest of general public. The basic factors can be summarized as below:

1. The time and place when such restriction is imposed, i.e. judging the circumstances prevailing.
2. The nature of the business on which such restriction is imposed.
3. Its effect on general public and society, and;
4. Other factors which may be develop and affected with the passage of time.

Permanent restrictions or Prohibition can be illustrated as below:

1. When the nature of business of a person is buying and selling of narcotic drugs and illegal drugs then for the benefit of the society restriction can be put by the state for buying and selling of such illegal products.
2. When the nature of business of a person is of a bootlegger in an area were Liquor is banned such as in the state of Gujarat.
3. When the business involves import and export of expensive imported goods without payment of custom duty or illegally.
4. Cow slaughter– the business of cow slaughter is informally banned in India, following the religious faith and tradition of the majority of the population of India. Cow is considered to be holy in India and is worshiped by majority as a mother or deity. Thus, to protect the religious beliefs of the population of the country, government has put a ban on the cow slaughter and the business of beef. The government has put a total prohibition on slaughter of cows of any age in the country and such prohibition is a valid prohibition as it is in the interest of general public as a whole[16].

d. Can the directive principle of a state policy be treated as a reasonable restriction?

The judiciary in many cases has taken the decision based on the nexus between the restriction and objective behind the restriction in case of a directive principal of the state. 

So, in the case of  State of Bombay v/s Balsara the Hon’ble Supreme Court had stated that when the directive principal of the state that the consumption of intoxicant drugs is banned except in case of any medical conditions then such directive principle shall be considered as a reasonable restriction on the fundamental right to do business.

e. Professional and Technical Qualifications

The right and freedom to do business does not mean that any person can carry on any business which requires certain professional and technical qualification. Such as the business of a doctor, solicitor, chartered accountants, company secretaries can only be practiced by a person who has got professional qualification to carry out such profession/business.

Also, when some individual who is possessing such professional or technical qualifications is found to be involved in any unethical business or unlawful act then their respective institutes/ councils/state has the powers to restrict the individual/professional from practicing that profession or do the business of that profession by cancelling his/ her license or professional degree.

The same can be better understood based on the below examples:

1. As per the Prenatal Diagnostic Act introduced by the Indian Government for the determination of the gender of the fetus during pregnancy of a woman, any medical practitioner at any point of time during the pregnancy cannot disclose the gender of the fetus either to the patient or her family members, to protect the girl child killing prevailing in the Country.
   Thus, if any gynecologist or any other medical practitioner is found to be involved in the business of determination of the sex of the fetus of pregnant women then the state has the powers to prohibit him from doing so and restrict his right to do business by cancellation of his degree/ qualification.[17]
2.  Also, the business of a doctor can only be carried out by an individual who possesses the degree as per the Medical Act, 1858 to 1886 or Dentist Act, 1921.
3. The business of practicing lawyer can only be done by an individual who has taken Sanad/License by passing the Bar Council Examination.

V.  On What Grounds a Restriction Can be Challenged by any Aggrieved Party?

Any restriction which is imposed upon any person by the state under any law on the right guaranteed to the person under Article 19 (1) (g) can be challenged on the below mentioned grounds:

a) The imposed restriction is unreasonable.

b) The imposed restriction is excessive in nature of the right.

c) The Business undertaken by the person is not malicious or illegal.

d) The procedure stated for curtailing any business is either unjust, unreasonable or is arbitrary.

Thus, if the aggrieved person is able to satisfy any of the above options then he can challenge the state on restricting him to carry out his right to do business of his own choice.

VI. Conclusion

As per the elaborated narration above, if the right to do business is curtailed by the government notification, one has to assess the constitutionality, reasonableness and cause of action pertaining to the said notification debarring this fundamental right.

Though “cause of action” is not accurately defined under any statutes, one may infer it from the various judgements of the statutory bodies and includes the facts the person has to plead to prove that he has obvious and reasonable grounds to sue. There must be circumstances to enforce the aggrieved party to approach the authorities to seek justice and redressal.

Accordingly, it needs to be assessed whether the notification to debar the person from the right to do business is issued/enacted by an appropriate authority and under the act which is permitted under the legislation. Generally, parliament (central government) and state legislature can make and amend the laws in their jurisdiction and wisdom of the legislation in enacting the law cannot be challenged.

Till 1971, 24th Constitutional Amendment, the fundamental rights were deemed to be permanent which cannot be diluted by the government. However, Article 13 (4) was introduced which enabled the government (through parliament) to make laws on Part III of the constitution. Later on, its validity was upheld by the Supreme Court. But, it was also noted that the basic structure of the constitution containing basic foundation denoting freedom of the individual cannot be taken away or destroyed making amendment in the constitution.

The aggrieved party can make writ petitions under Article 32 or 226 only when he has been aggrieved with some civil consequences which ostensibly deprive his fundamental rights. Apprehension of any civil consequences is not a valid ground to entertain the writ petitions.

The place of accrual of the cause of action decides the jurisdiction of the High Court which can address and admit the writ petition which challenges the jurisdictional validity of such notification whether of state or center. Place of state legislature or parliament is not material in deciding the jurisdiction.

Thus, presuming the government notification expressly violates the fundamental rights and is unreasonable as per Article 19 (1) (g) discussed hereinabove, and if the aggrieved party has actually suffered the civil consequences because of such notification, he has rights to approach the high court or supreme court filing writ petition elaborating the substance and cause of action.

What are your views on this? Feel free to comment below & share the article.

Reference-
[1] Article 19 (1) (g) in The Constitution of India 1949 states “to practice any profession, or to carry on any occupation, trade or business”
[2] Article 19(6) in The Constitution Of India 1949 states “Nothing in sub clause (g) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of the general public, reasonable restrictions on the exercise of the right conferred by the said sub clause, and, in particular, nothing in the said sub clause shall affect the operation of any existing law in so far as it relates to, or prevent the State from making any law relating to-
(i) the professional or technical qualifications necessary for practicing any profession or carrying on any occupation, trade or business.
(ii) the carrying on by the State, or by a corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise.
[3] Fertilizer Corporation Kamgar Union Sindri v/s Union of India; AIR 1981 SC 344
[4] State of Gujarat v/s Dharamdas; AIR 1982 SC 781
[5] Chaitanya Prakash v/s Board of Secondary Education Rajasthan; 1960 Raj L.W. 209
[6] Martiner Joan v/s Union of India AIR NOC 2010 AP 87
[7] Bennett Coleman &  Company v/s Union of India AIR 1972 SC 106
[8] As stated in Article 31 of the Constitutional rights conferred to the citizens of Switzerland
[9] As stated in Article 12 of the Constitutional rights conferred to the citizens of Germany
[10] As stated in Article 136 of the Constitutional rights conferred to the citizens of South Africa
[11] As stated in Article 19 of the Constitutional rights conferred to the citizens of Rumania
[12] The right to do business as per the Constitution of USA
[13] P.P. Enterprises V/s Union of India 1982 SCC 341
[14] Habibullah v/s Gulam Ahamed Baba 1979
[15] Kochuni v/s State of Madras 196 SCR 887 (1914)
[16] Mohd. Hanif Quareshi & Others vs The State Of Bihar
[17] Dr. Umesh Murlidhar Karanjkar vs 2 The District Collector on 6 June, 2011

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In this blog post, Ritika Das, pursuing M.A. in business law from NUJS, Kolkata, talks about whether you can do anything if a Supreme Court order/judgement is against you.

In accordance to the Constitution of India, the Supreme Court is the protector of the Constitution and the highest court of appeal. The Supreme Court is considered as the the ‘guardian angel of fundamental rights[1] consisting of four cardinal parts being- original, appellate, advisory and review jurisdiction.

The jurisdiction of the Supreme Court is defined under Article 124 to 147 of The Indian Constitution, wherein it elaborates on the fact that the Supreme Court of India being the apex court entertains the appeals against the orders passed by the High Court. Additionally it takes writ petitions in instances of genuine human rights infringement or if a case includes a significant issue that requires an expeditious verdict.

Article 137 of the Constitution of India, 1950, subjects to provisions of the guidelines made under Article 145, by which it is clear that the Supreme Court has the ability to review any judgment declared by it. This petition needs to be filed within thirty days from the date of the impugned ordee.

The petition or appeal goes before the same bench who had delivered the initial judgment. Although, questioning a judgment or an order which has accomplished conclusiveness by a writ on the premise of infringement of fundamental rights is quite dubious. A mere perusal of the Constitutional Assembly Debates with respect to Article 12 shows that there is a lot of misgiving with respect to the expression of “power/ authority” which is a part of Draft Article 7.

It was felt that “……….a magistrate or even a petty officer in authority (could) rightly claim under this article to have the authority to abridge a citizens (fundamental) rights. “[2] There had been a judgment in the matter of Naresh Shridhar Mirajkar & Ors .vs. State of Maharashtra & Anr [3] which had concluded with the help of a majority that an order can’t be said to repudiate or infringe anyone’s fundamental rights. Although in the matter of Mukharji, Oza and Natarajan, JJ. It had been clearly stated that the earlier order of Supreme Court dispossessed the appellant of his constitutional rights which is in contravention to the principles of natural justice and the foundation of the said Act was without precedent and the legal wrong should be redressed ex debito justitiae[4].

There are only a few resources available to those seeking relief from an Order of the Supreme Court, namely:

• Review Petition
• Curative Petition
• Presidential Pardon

Review Petition

“Review” in legitimate speech means a legal reconsideration of the case, ‘review’ is “re-examination. Along these lines, keeping in mind the end goal which is to rectify a miscue and obstruct a miscarriage of justice an arrangement for review is comprised under Section 114 of the Code of Civil Procedure Act, which gives a concrete right to review an Order, the Order XLVII of the Code of Civil Procedure Act specifically furnishes the procedure of review. “Articles 124 to 147 of the Constitution of India set out the purview of the Supreme Court of India wherein under Article 145(e), the Supreme Court is authorized to make rules subject to which the court may review any judgement or order. In exercise of this power, Order XL has been framed”[5].

Article 137 of the Constitution of India, 1950, states that subject to arrangements of any law and principles made under Article 145, the Supreme Court has the ability to review any order pronounced. Any party distressed by an order may file for reviewing the said order before to the same court. There is no scope of an appeal.

Review petition is a petition in which one implores before the same court of law to review its order/judgment which has been effectively professed. In accordance to the rules set under the Supreme Court Rules, 1966 the petition must be filed within thirty days from the date of the order and must be presented in front of the same bench of judges who had initially delivered the order.

A review petition is produced before the judges in their chambers and doesn’t come before an open court, which curtails the prospect of arguing out the matter by the respective counsels. Also the plausibility of a review petition to be successful in the Supreme Court is extremely meager unless a judge of the Supreme Court resigns, as the review petition is always produced before the same bench which has already heard the matter/ case.

It is only in the instances when there is something consequential that is produced before the judges that the judges decide to hear the petition in the open court, which sanctions an oral argument by the counsels, although needless to say this too is an extremely rare possibility. “Review is a serious matter; it doesn’t entail hearing the appeal all over again. A judgement once delivered is final. “A departure from that principle can be justified only when circumstances of a substantial and compelling character make it necessary to do so”.[6]

The apex court has elucidated that a review is in no way a form or camouflage of an appeal. The court has advocated review of its own judgment with the accompanying comments:

“Review literally and even judicially means re examination or re consideration. Basic Philosophy inherent in it is the universal acceptance of human fallibility…Rectification of an order thus stems from the fundamental principle that justice is above all. It is exercised to remove the error and not for disturbing finality.”[7]

In accordance to the rules set out in the Supreme Court, a review petition is not entertained in civil proceedings unless it is in accordance to the grounds mentioned in Order XLVII, Rule I of the Civil Procedure Code which consists of:

1. Some slip-up or blunder obvious on the record.
2. The revelation of new and essential matter or evidence which, after the practice of due diligence, was not within the know how or couldn’t be delivered by the personal when the decree or order was passed.
3. Whatever other adequate reason.

A review petition is neither entertained in any criminal proceeding, but only on the occasion when there is a conspicuous error seen which has surfaced on the records. Ergo it is befitting to mention that a review petition is viable only on restricted grounds.

Further it is of human predilection to not acknowledge with the review petition even at the likelihood of an error transgressed by the judge. Despite the inconsequential possibility people are still optimistic therefore they file review petitions in a standard way. There are abounding occasions when a review petition is not allowed, on such occasions the grieving parties tend to file a curative petition before the Supreme Court.

Curative Petition

After the review plea is dismissed a curative petition may be filed. It is the last legal resort and a fairly new concept accessible for prevention of any abuse of the procedure and to be sure that there is no miscarriage of justice. It is usually decided by Judges in-chamber. It is barely ever that these petitions are given an open-court hearing.

The Supreme Court had first decided the concept of curative petition on the basis of what was laid down in the matter of Rupa Ashok Hurra vs Ashok Hurra & Anr[8]. It is appropriate to say that the arrangement of curative petition begun after the choice of the Supreme Court on account of this matter. After a woman withdrew her consent regarding mutual separation in her divorce, Supreme Court got an intimation regarding the validity of a decree of divorce. If the petitioner can establish that the natural justice is violated then curative petition can be entertained.

Curative petition is not a regular phenomenon and can be used in circumspection. An enervating process has been systematized for filing a curative petition. A senior advocate must certify the petition in cognizance to the implementation of the requirements for filing the curative petition. Three senior most judges who have passed the concerned judgment must get the petition first. The petition is only listed after more than half of the number of judges arrives at a common conclusion that the matter needs to be heard again before the same Bench.

Curative Petitions are filed under Article 137, 141 and 142 of the Constitution of India and the same can be filed under the following grounds:

1. The petitioner will have to certify and confirm that there was a genuine infringement of principles of natural justice and that there had been a bias of the judge and judgment that affected him.
2. The petition shall state expressly that the grounds mentioned under Review Petition were dismissed by circulation.
3. The Curative Petition must come with the certification of a senior advocate for fulfilling the above requirements.
4. The petition is to be sent to the three senior most judges and judges of the bench who passed the judgment, if available.
5. If the majority of the judges on the above bench agree that the matter needs hearing, then it would be sent to the same bench.
6. The court could impose “exemplary costs” to the petitioner if his plea lacks merit”.[9]

The curative petition system had begun in the year of 2002 since which only a total of two curative petitions have thrived from all the numerous curative petitions that are filed every year, which makes it evident that the chances of a curative petition to succeed is quite diminutive.

In March 2013, Supreme Court allowed a curative petition against a udgment delivered in 2009 which stated “that if a woman kicked her Daughter-in-law or permitted her with divorce, it would not amount to cruelty under Sec 498-A of the Indian Penal Code.[10]”  In April 2010, the court further amended an error on its part by delivering an order which led to the wrongful confinement of four indicted in a twenty one year old case without any hearing.[11] The Supreme Court in the case of Union of India v. Azadi Bachao Andolan[12] upheld the legitimacy of circular issued by the Central Board of Direct Taxes in regards The Indo-Mauritius Tax Treaty, with respect to the testament of residence issued by Mauritius Regulatory Authority, which would permit them to gain tax exemptions. A curative petition was recorded in light of the fact that the decision authorizes the idea of “treaty shopping” and that it has conflicted with the constitution since delegated powers of the government had been allowed benefits over statutes.

A five -judge bench had been set up to deem whether it ought to be conceded, and was subsequently dismissed. “Since April 2002 when the Supreme Court propounded the nature of curative petitions, five hundred and sixty curative petitions have been filed before the Supreme Court”[13]. This suggests that the parties won’t stop till they have depleted all cures accessible including filing of curative petitions. The nature of a curative petition in Rupa Ashok Hurra included the conjuring of Article 137 of the Constitution. Before Rupa Ashok Hurra, Review Petitions denoted the certainty of a Supreme Court judgment past which no further challenge of the judgment was permitted.

Study Of Curative Petitions And Review Petitions

• Primarily, in both the cases the petitions are circulated to the Supreme Court: for review petitions, the course taken is it is submitted before the judges who passed the decried whereas in the case of curative petitions, the petition is given to the three senior most judges in the Supreme Court and the judges who had passed the impugned judgment if available.

• Secondarily in both the petitions a certificate from a senior counsel is fundamental and on the account of curative petition the court can ordain an exemplary cost for those petitions that are unjustifiable, although this isn’t the case in review petitions.

• Lastly the curative petition is founded purely on the grounds of natural justice principles which isn’t the case in respect of review petition which is a wider scope and not just restricted to the laws of natural justice

Even though there is very little difference between a curative petition and a review petition, the Supreme Court has laid down different grounds for filing both these petitions; this brings to light such factors which make it evident that they are different in totality.

Curative petition can be considered under Article 32 of The Constitution Of India as it constitutes under constitutional remedies, albeit the chances of allowing a curative petition remains bare minimum.

Presidential Pardon

According to the Article 52 of the Constitution of India, the President is the Executive Head of India. According to Article 72 of the Constitution the Indian President is empowered to grant pardon, he can reprieve, respite or remit the punishment. He has the ability to acquit a criminal. The general idea of crime and punishment are pre existing factual which play a major role during the procedure of exoneration being conceded.

As per the Oxford dictionary “Punishment is the action of punishing or the penalty imposed on someone for an offence “. It is a social justice for the community at large. According to Sergent Stephen:

“Crime is a violation of the right, considered in reference to the evil tendency of such  violation as regards the community at large.”

So crime is an offence against the society. Only a crown has the right to award pardon and should be given to those acts which can be pardoned and to that crime where the pardon can benefit the society.

A Global View of Presidential Pardon

Presidential pardon is one of the powers that are given to the executive by the Constitution. All countries must have this in their Constitution in order to check and rectify any mistake made by the judiciary in delivering a verdict. Awarding the death penalty is the highest punishment which must be reviewed by the Head of the State before it is delivered.

Presidential acquit is one of the forces that are given to the official by the Constitution. All nations must have this in their Constitution keeping in mind the end goal to check and amend any oversight made by the legal in conveying a decision. Granting capital punishment is the most astounding discipline which must be looked into by the Head of the State before it is conveyed

United States of America

In accordance to Article II Section 2 of the U.S Constitution the President can grant pardon unless he is impeached.

 Pakistan

By the virtue of the Article 45[15] of Pakistan’s Constitution the President has full power to concede, reprieve, respite and remit, suspend or commute any sentence passed by any court, tribunal or authority. The question of granting pardon was brought before public eye in Sarabhjit’s Case[14].

France, Germany and Russia

President of France also possesses the ability to pardon. Article 84 of the Russian constitution says that the President has the unconditional power to pardon . A chancellor or the minister of justice may also get the power to modify a verdict along with the President as the power to pardon can be assigned by the German President himself.

Pardoning Power of President in India

It is very clearly mentioned in Maru Ram vs Union of India[16] and Kehar Singh vs Union of India[17] that the judiciary has the liberty to evaluate the exercise of executive choice.  State Governors are also given power to grant a pardon as being mentioned in Article 161 of the Constitution.

There is a need for the existence of an executive pardoning power giving the following reasons:

1. Facts not placed before the court
2. Facts placed but not in a proper manner
3. Facts disclosed after the passing of the sentence
4. Events which have developed after the passing of the sentence[18]

The capacity of Article 72 was clearly verified in Maru Ram vs Union of India. The court clearly stated that responsibility and power should go hand in hand. There must not be any bias on the grounds of caste, religion, color and political devotion when regarding the pardoning power. Great liability lies with the court to verify the validity of any executive action.

The Petition is in the hands of the President and he has the privilege to decide on how he can get hold of all the information that are required for successful placement. Amongst the latest cases the Supreme Court had sentenced Mohammad Afzal who was a convict in the Parliament attack in December 2001. He was granted Presidential pardon. Many social activists and political groups were demonstrating against the denial of a free trial to Afzal.

The mercy petition for Dhanonjoy Chatterjee who was convicted in rape and murder case was denied by the President of India in spite of the Human rights agitations.

According to the Article 72(1) of our Constitution, the Governor also has the ability and power of pardoning a criminal.

The President has the full authority to scrutinize the evidences and records of a case concerned. His views may differ from the record of the court regarding the previous verdict. With that the President does not rectify or modifies the records. In this way the judiciary system of our country can maintain its supremacy.

Conclusion

Given the limited recourses available to one who wishes to appeal and obtain relief from the judgements of the Supreme Court of India, it is necessary that the ones who carry out the process of law understand the true implications of the three ways that have been detailed in this paper. These provisions remain out of the understanding of most of the general public of this country. It is important that they be well laid out for the purposes of fair and true justice, as guaranteed by the constitution of India.

What are your views on this? Feel free to comment below & share the article.

BIBLIOGRAPHY

• P :Exercise of Pardoning Power in India: Emerging Challenges , The NEHRU Journal, Vol XII, No. 2,
• Shroff Kaushal: Presidential Pardon: A legal, historical and political perspective, Times of India
• Sarkar S and MunirJ.J :The Constitution of India
• N.Laddha: The Era Of Second Review Petition – Curative Petition
• file:///C:/Users/User/Downloads/SSRN-id1560036.pdf(visited on 28-11-2016)
• file:///C:/Users/User/Downloads/SSRN-id1970958.pdf(visited on 28-11-2016)

Reference

[1] V. C. Mohan v. Union of India (2002) 3 SCC 451 at P. 453, Para 2.

[2] VII Constituent Assembly Debates 609(1950).

[3] [1966]3SCR744

[4] Ex debito justitiae has been used in Common law doctrine to mean as a matter of right.

[5] On the rule making power of the court, see Sec 1(f)

[6] Northern indian carters vs Lt. Governor of Delhi, 1980

[7] S.Nagraj vs State of Karnataka (1993)

[8] (2002) 4 SCC 388 : AIR 2002 SC 1771

[9] Satya Prakash, Hindustan Times, New Delhi

[10] Available at http://www.thehindu.com/news/national/supreme-court-recalls-kicking-daughterinlaw-not-cruelty-judgment/article4510382.ece  (visited on 28­­-11-2016)

[11] Navneet Kaur v. State of NCT of Delhi

[12] (2004) 10 S.C.C. 1.

[13] The Source of this information is the empirical data collected from the Supreme Court

[14] Available at http://www.legalserviceindia.com/article/l149-PresidentialPardon.html  (visited on 28-11-2016)

[15] Article 45. President’s power to grant pardon, etc.- The President shall have power to grant pardon, reprieve and respite, and to remit, suspend or commute any sentence passed by any court, tribunal or other authority. Available at http://www.pakistani.org/pakistan/constitution/part3.ch1.html visited on 28-11-2016)

[16] (1981) 1 SCC 107

[17] (1989)1SCC 204

[18] Available at http://www.legalserviceindia.com/article/l370-Presidential-Pardon.html (visited on 28-11-2016)

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In this blog post, Rajan S, pursuing M.A. in business law from NUJS, Kolkata, talks about the hierarchy of courts & justice system in Italy.

The judicial system in Italy is based on the Civil Law and it is unified. As like most of the countries the function of a judge and the public prosecutor is governed by the members of the judiciary. It consists of succession of courts and a body of judges.

The following areas are the breakdown of judicial functions:

• Civil and criminal
• Accounting
• Administrative
• Taxation
• Military

The magistrates in accordance to the judicial order would exercise the civil and criminal matters. Magistrates are fulfilling their roles as a judge and the investigators respectively.

The State Auditor’s court will exercise the accounting concerns. The general prosecutor office is based in the same court.

Regional administrative courts and council of state exercises the administration dealings.

Provisional Taxation Commissions and the District Taxation Commissions are responsible for the taxation matters.

Military courts, the military appeals court and the surveillance military court would take care of the military affairs. The military prosecutor will be based at military courts and general military prosecutors are based at the military appeals court.

Civil Courts

This courts deals in disputes between private bodies or private and public. The justice is bestowed in order by the justices of peace, judges, tribunals, appeal courts and the Supreme Court.

Administrative Courts

This courts have two functions:

• Protection of individual interests with public interests
• The control of public funds

Ministry of Justice is in charge of court administration among the government structures. Administrative and organizational functions are carried out by the Ministry of Justice. The responsibility of assigning the personnel to judicial services is function of the administration.

The magistrates are assigned to courts as per their personal choice of area of competence followed by very tough public examination. The magistrates cannot be assigned, promoted, removed, transferred without consultation of the superior council of magistrates (Consiglio Superiore della Magistratura or CSM). The CSM must evaluate all the matters related to the magistrates to protect the independence of the magistrates and their status.

The President of the Italian Republic is also president of the CSM.

The apex of the court is Chief Magistrate who is in charge of judiciary and has the authority on office decisions. A court manager will take care of public and internal assistance to judges and prosecutors.

Criminal Courts

The legal process in this court involves judges, tribunals and hearing courts. Once a trial has been decided and verdict passed, a party found guilt can appeal to an appeal court, further, he can approach the supreme court in case of failure in appeals in appeal court which qualifies on the ground of misinterpretation of laws.

In case you have been arrested for any offence, you are not supposed to appoint any lawyer prior to a hearing from judge. However, you reserve the right to state only your basic details such as name, date of birth and history about imprisonment in Italy. There is a possibility that you will be held for a maximum of three days before a hearing. In serious cases it is very difficult to get bail and you will be held for three years without trial.

If you lost any property or your belongings have stolen, you need to make a report about the incident and it is very essential to claim an insurance.

Hierarchy of courts

The cases start from the hearing courts, appeal courts and the Supreme Court. The apex among all the courts is the supreme court.

The following are the setup or hierarchy :

Initial proceedings

• The minor hearings of civil and criminal matters would be by Justices of the Peace (JP)
• The criminal case involves penal justice would be dealt by the penal office.
• The severe case hearings are by the tribunals or the court.
• Hearing are also dealt by Juvenile Court.

Chief prosecutors also plays the role of public prosecutor in first trials.

Appeal or second instance to claim against the first decisions

• Appeals courts will interpret the conclusion of hearing court.
• Second instance courts in concern involving penal justice would be by penal tribunals.

Chief prosecutors also plays the role of public prosecutor in second instance.

Final or highest level of infringement of the law

• The final interpretation of law on justice and the final verdict will be exercised by the Supreme Court.

The Attorney Generals of the Supreme Court plays the public prosecutor,s role in final instance.

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In this blog post, Rittika Chowdhary, pursuing M.A. in business law from NUJS, Kolkata, talks in detail about forward contracts.

We are living in the 21^st century; the so-called virtual world, where barriers with respect to trading and business have now been reduced to a bare minimum. Of course it goes without saying that each country has its own set of rules and guidelines to safeguard its economic resources and interest of the country.

This brings us to the importance of trade and finance and the fact that all individuals, firms and business houses are exposed to various levels of risks on their business exposure. Hence the concept of risk mitigation came into practice.

One can mitigate various forms of risks with different types of methods and even can make a profit by managing the risk.

Consider a Punjab farmer who grows wheat and has to sell it at a profit. The simplest and traditional way for him is to harvest the crop in March or April and sell in the spot market then. However in this way the farmer is exposing himself to risk of downward movement in the price of wheat which may occur by the time crop is ready for sale.

In order to avoid risk, one way could be that farmer may sell his crop at an agreed upon rate now with the promise to deliver an asset i.e., crop at predetermined rate in the future. This will ensure the input cost and reasonable amount of profit to the farmer.

The transaction which farmer has entered is called a forward transaction and the contract which covers such transaction is forward contract. A forward contract is an agreement between buyer and seller, obligating the seller to deliver a specified asset of specified quality and quantity at the specified rate and at the specified place and the buyer is obligated to pay the price agreed upon.

The following depicts simple movement of forward transaction:

Flow Of A Forward Contract

1. Scenario 1: After 3 months the spot rate goes up to Rs.42, customer will have a gain of Rs.10.
2. Scenario 2: After 3 months if the spot rate drops to Rs.38, customer will incur a loss of Rs.10
3. Scenario 3: After 3 months if the price is stagnant at Rs.40, neither of them incurs any profit or loss.

The above depicts a typical business transaction with the 3 possibilities; the same is more so evident in the foreign exchange market, owing to the dynamic nature and the number of currencies, and still more number of reasons which determine / influence the exchange rates.

An exchange rate change, in a more technical way is called as “exchange rate fluctuation”. For some businesses, the currency exposure is significant (and direct), while others are indirectly affected by foreign currency fluctuations.

Where there is a problem, we find a solution, and foreign currency fluctuation is one which entails cash losses. The market has therefore been ever evolving with a plethora of options for businesses to minimize (if not eradicate) the losses on account of foreign currency fluctuations.

Here, another point worth mentioning is that for forex, there is no physical market as such; rather these transactions take place “Over the Counter”, where we have bankers in dealing rooms who determine the foreign exchange rate. Now that in itself is a separate topic, which need not be spoken of now. Bankers are in such a position that they are always ready to buy/sell forex. Here comes our chance to reduce the foreign currency losses.

The reason “why” we need something like a forward contract is required was what we discussed above.

What is a Forward Contract

As explained above, it is a contract that obligates the holder to buy or sell an asset at a set price on a specified date in the future. Now that is what any dictionary or a google search will give you.

Let me break it down for you.

To understand what a forward contract is, we need to know what a forward rate is; and in order to know what a forward rate is, we need to know what a spot rate is!

Spot rate is the rate applicable for delivery on 2^nd business day, and forward rate is the rate fixed for a forward contract. Such a contract essentially refers to contract to buy or sell a certain amount of foreign currency at a predetermined  rate (which is but the forward rate) on a pre-determined date (maturity date).

For example: M/s A & Co. has exported iron ore to USA and the total value of the shipment is $ 100,000 which is due after 3 months. The current rate (spot rate) for exchange is $1 = INR 66.45. M/s A & Co. enters into an agreement with banker to realize the proceeds after 3 months at the rate of 66.67 per dollar. Agreed rate of $1=INR 66.67 shall be the forward rate for the particular transaction, and the entire transaction is a “Forward Contract”. By booking the forward contract, M/s A & Co. have done the following:

• Ensured that despite the spot rate is lesser, they will have a higher INR inflow.
• They will not be bothered about the unfavorable movement in the forex market.
• In the event that they see that the spot rate on the day of maturity is higher, they will still have the liberty to use the spot rate, provided they are able to rollover the current forward rate.

Forward rates are extensively used by exporters and importers to “hedge” their foreign currency payables and receivables.

Note: Both spot rate and forward rates are determined by demand and supply forces, in addition to the manner in which the macro-economic determinants like political conditions, monetary policy, fiscal policies of all concerned countries are being shaped up; the same is discussed in more detail ahead.

If a forward rate (F) is higher / lower than the spot rate (S), the denominator currency is said to be a forward premium / discount. In simple terms, we can say that one can earn profit or incur loss with the forward contract. When the future rate is higher than the spot rate, a transaction which involves the sales or inflow, it will contribute in earning the profit. And if the transaction involves monetary outflow or purchase, the same scenario can make the trader to incur loss.

If we put the above in a formula:

Annualized Forward Premium = {(F-S)/S}*100*12/n

A negative answer would imply a discount.

For example: Say spot rate is $1=62, and 6-months forward rate is 62.8, therefore annualized premium on $ = {(62.8-62)/62}*100*12/6 = 2.58%

Therefore, the USD is at a premium of 2.58% in the forward market with respect to the INR; likewise the INR is at a forward discount in the forward market with respect to the USD.

The difference between the spot rate and forward rate is called as “Swap Point”; if the currency is at a forward premium/discount, we add/deduct the swap points from the spot rate to get the forward rate.

And now the question arises why we have to use forward contract. The very basic reason is to manage the risk and to cover the probable loss that may arise in the course of execution.

What is risk

Risk is nothing but the exposure of the business to probable losses, which may get affected by general economic conditions or specific business scenario, and in turn which may cause monetary damage to the business.

For example: A general deflationary economy may cause slowdown in the growth of business environment and in turn a stake holder shall be affected by possible monetary loss on his investments.

The types of risk which are a business may be exposed have been broadly discussed here:

• When the loss to the exposure is caused by counterparty’s failure to perform obligation is called as credit risk.
• When the loss is caused by adverse changes in the market value of an instrument is known as market risk.
• When the loss is caused by failure of an institution to meet its funding requirements or to execute a transaction at a reasonable price is known as liquidity risk.
• Lastly if the loss is caused by inefficient internal control, human error, management failure or deficiencies in information systems is known as operational risk.

Now that we know what a forward contract is, and we can now have an overview on the features.

Features of a Forward Contract

Forward contracts are non-standardized contracts, which are not traded in an exchange. These are essentially over the counter trades, which are dealt with between the banks and its customers; this feature of forward contracts is called “Over the Counter”.

To explain in simpler words, it means that a forward contract is essentially a tailor made dress, versus another dress which is available off the shelf. This other product in forex parlance is called a future contract. Futures are standardized forward contracts which are traded on the exchange with Marked to Market features and Stringent Margin Requirements.

Forward Contracts are highly exposed to the counterparty risks. As Forward Contracts do not have any clearing house or other institutional agents in the contract, exposure to counterparty risk is substantial. Moreover forward contracts are not Marked to Market on daily basis; instead they are agreed to be settled at a future date at an agreed price; this leads to the high volume of risk.

Future contracts because of its standardization make it possible to be traded in the secondary market. However, the basic characteristic of the forward viz. customization prevents it from getting traded in the open market.

A host of new words were used in the above paragraphs, which need a clarification note:

1. Marked to Market means that the product price changes at fixed intervals to reflect the impact of demand and supply of the same in the price of the product at the end of each day. Classic example of marked to market feature, which is relatable to one and all is the stock market prices.
2. Going long/short in futures implies contracting to buy/sell.
3. Margin requirement is essentially put in place for futures contract so that the risk of client defaulting in any contract is bare minimum. Going long/short in futures implies contracting to buy/sell. If there is an adverse price movement there is a possibility of default on the part of the trader. To mitigate the same, the clearing house requires every future trader to make a security deposit, which is called initial margin; and this margin requirement is strictly monitored in the case of a future contract.
4. Arbitrage is the simultaneous buying and selling of securities, currency, or commodities in different markets or in derivative forms in order to take advantage of differing prices for the same asset. It is essentially a profit making scheme for profit hungry investors who look for these differences in prices of same product in different markets. Goes without saying that any arbitrage opportunity is vigorously exploited by these investors, and therefore the same does not persist for a longer duration.

How is a Forward Rate Calculated

The answer to the above is fairly simple.  Market forces, that is, demand and supply, determine the rates at which a particular currency which you want in the near future is determined. In a free floating exchange rate mechanism, exchange rates are determined by the demand and supply forces. These supply and demand in turn are influenced by a number of macroeconomic factors – interest rates, inflation, growth rate of GDP, monetary and fiscal policies, balance of payment situation, etc. Out of these many factors, inflation and interest rates are considered to be the most important.

The relation between the above three is christened in the market parlance as follows:

• Exchange Rate and Interest Rate – Interest Rate Parity (IRP)
• Exchange Rate and Inflation – Purchasing Power Parity (PPP)
• Interest Rate and Inflation – International Fischer Effect (IFE)

• IRP: To explain in simple terms, effect of interest rate change on foreign exchange, when other factors remain constant. Therefore, if in one country the interest rate is lower than the other, then the 1^st country’s currency shall be at a forward premium. IRP in fact goes one step further, and it quantifies the premium vide a formula.

To explain the above with numbers, say if the $ interest rate is 4% and INR interest rate is 10%, then $ should be at a premium against INR approximately by 10-4=6%, and exactly by 6/1.04=5.77%; the corollary of the above shall be that INR should be at a discount against USD by approximately 6%, and exactly by 6/1.1=5.45%.

• PPP: Purchasing Power Parity theory expresses the relationship between the exchange rates and inflation, other factors remaining constant. Inflation causes a decline in the purchasing power of money. Thus if 1 country has a higher inflation than another, its currency should depreciate.
• IFE: This is a parity relationship between interest rates and inflation, and is derived from IRP and PPP. As per IFE, the real interest effect in all countries should be the same.

Among all above mentioned theories Interest Rate Parity theory considered to be more superior, as it considers the running interest rate in the economy. And in many cases, the forward rate is highly dependent on the interest rate and the expected income or reducing loss intention of the investor.

So, now again we are back to the main question: how will the forward rates be calculated and what provides the strong base for calculating the forward rate?

First let’s take an example of non-currency forward transaction. Suppose that-

Mr. A wants to buy a house a year from now. At the same time, suppose that Mr. B currently owns a INR 100,000 house that he wishes to sell a year from now. Both parties could enter into a forward contract with each other.

Suppose that they both agree on the sale price in one year’s time of INR 104,000 (more below on why the sale price should be this amount). Mr. B and Mr. A have entered into a forward contract. Mr. A, because he is buying the underlying, is said to have entered a long forward contract. Conversely, Mr. B will have the short forward contract.

At the end of one year, suppose that the current market valuation of Mr. B’s house is INR 110,000. Then, because Mr. B is obliged to sell to Mr. A for only INR 104,000, Mr. A will make a profit of INR 6,000. To see why this is so, one need only to recognize that Mr. A can buy from Mr. B for INR 104,000 and immediately sell to the market for INR 110,000. Mr. A has made the difference in profit. In contrast, Mr. B has made a potential loss of INR 6,000, and an actual profit of INR 4,000.

The similar situation works among currency forwards, in which one party opens a forward contract to buy or sell a currency (e.g. a contract to buy Canadian dollars) to expire/settle at a future date, as they do not wish to be exposed to exchange rate/currency risk over a period of time. As the exchange rate between U.S. dollars and Canadian dollars fluctuates between the trade date and the earlier of the date at which the contract is closed or the expiration date, one party gains and the counterparty loses as one currency strengthens against the other.

Sometimes, the buy forward is opened because the investor will actually need Canadian dollars at a future date such as to pay a debt owed that is denominated in Canadian dollars. Other times, the party opening a forward does so, not because they need Canadian dollars nor because they are hedging currency risk, but because they are speculating on the currency, expecting the exchange rate to move favorably to generate a gain on closing the contract.

How the Forward Price Should be Agreed Upon

Continuing on the example above, suppose now that the initial price of B’s house is 100,000 and that A enters into a forward contract to buy the house one year from today. But since B knows that he can immediately sell for 100,000 and place the proceeds in the bank, he wants to be compensated for the delayed sale. Suppose that the risk free rate of return R (the bank rate) for one year is 4%, then the money in the bank would grow to 104,000, risk free. So B would want at least 104,000 one year from now for the contract to be worthwhile for him – the opportunity cost will be covered.

So, the basic factors which influences on determining forward rates are as follows:

1. Spot rate of the item
2. Risk free interest rate
3. Opportunity cost
4. Market rate
5. Storage cost (for commodity forward transaction)

All the points described above place the bridge for determining parity between spot and forward rates.

The idea of maintaining parity between the spot and forward rates is to eliminate the chances of arbitrage opportunities; in Indian market scenario, it is essentially not allowed as well. A person without having a valid underlying cannot enter into a forward contract.

So, what happens when you have a forward contract, but the underlying based on which you had entered into the contract is delayed for some reason? The answer to the same is ‘Rollover Contract’.

Extension, Cancellation and Early Delivery of Forward Contracts

In India, forward contracts are allowed only for hedging purpose. It may so happen that the underlying exposure (payable/receivable) which initiated the forward contract gets cancelled, extended or preponed. Hence the forward contract has to be cancelled, extended or delivered early.

Herein also comes the idea of a rollover contract, wherein the expected forex inflow/outflow is delayed for business reasons, and the underlying is still in place. In such cases, the forward contracts are “Rolled Over” to a further future maturity date.

Forward contracts are gaining prominence in the economy over the period. Judicial forward cover is helping the business houses to safeguard their exposures both domestic as well as of foreign exposures. In fact, common man has also started using forward these days. Forward contracts are now getting prominence as a mode of investment as well.

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