In this article, Ashwini Gehlot discusses Are Freelancers Subject to TDS Deductions?

What Is Freelancer?

A freelancer is somebody who doesn’t work for one organization full-time, however, he is employed by various organizations for specific occupations. For instance, a magazine or site will have a core group of editors who procure freelance to compose articles, or a TV creation team may contract freelance cameramen to take a shot at one series of programs.

What Are The Advantages Of Freelancing?

• Choose your work

Being a freelancer implies you don’t have a manager guiding you so you can state “no” to jobs you don’t need. You may likewise get the opportunity to work at home for particular projects. For whatever length of time that your work is conveyed to the deadline, most customers wouldn’t mind when and how you do it – making freelancer a decent alternative for individuals who would prefer not to work normal office hours.

• Better pay

A freelancer can arrange your own rates with the organizations who procure you. Companies are regularly arranged to pay freelancer a better rate than their own staff since they don’t need to pay for things like sick leave as a component of the agreement. The more experience you have then the more money you can ask for.

• Choose and pick customers

While initially, you may take any customer that will hire you, as you develop, you can pick not to take troublesome customers. You can even fire them.

• Do the work the way you see fit

While you have to deliver what the customer asks, how the work is done is dependent upon you.

What Are The Disadvantages Of Freelancing?

• Getting work

There are a number of freelancers out there and landing your initial couple of positions can be hard. Simply being great at what you do isn’t sufficient – you have to network, make contacts and market yourself on the grounds that nobody will contract you on the off chance that they don’t know you’re there! The workload can be erratic – some of the time you may be working throughout the night to meet three deadlines in one week, while even the best freelancers have months where they get no work at all.

• Managing your money

Not only will you not get a consistent pay cheque for every month, you’ll additionally need to make all the tax and National Insurance arrangements bosses/employers would typically do for you. You have to register yourself as ‘independently employed’ with Inland Revenue, who can give you some counseling. You’ll additionally need to make sure to keep some cash aside for times when you’re sick or there’s no work – and keeping in mind that it may be awesome to have a holiday whenever you need, but remember that nobody will pay you for it!

Tax Deducted at Source

Understanding TDS

TDS regular shortening for Tax Deducted at Source is the reasoning of duty from the pay source itself, at the time of earning. The legislature has embraced the technique for TDS to simplify the tax assessment system and to guarantee that the payer and beneficiary are accounting the same while filing their income tax returns. TDS in basic terms is a part of your tax obligation kept to the government by the payer right at the source.

Who Can Deduct TDS From My Earning?

Company/individual from India having a substantial Tax Deduction Account Number (TAN) can just deduct TDS from your earning. TAN much like PAN is a record number given by the government to enlisted/registered entities making it obligatory for them to deduct TDS. Unless your customer has a TAN they are not qualified to deduct any TDS. Since people/company from outside of India don’t have this they won’t be deducting TDS from your income. So also on the off chance that you are working for a customer who is an individual and doesn’t have a TAN number (most people won’t be having a TAN unless they are maintaining a business on their name), no TDS is applicable. In such cases keeping Tax through Advance Tax (for some situation) become your liability.

What Happens After TDS Is Deducted?

The Individual/company who has deducted the Tax from your earning needs to pay the TDS to the government on your behalf. On the off chance that they neglect to do so, fines are collected from them (you are not in charge of this at all). When they have paid the TDS to the government they will be giving you a certificate called Form 16A which demonstrates that Tax was deducted from your earning on your behalf. Your customer can give this to you after the end of the quarter when the payment was made.

How Much Is The TDS For A Freelancer?

If the case of a freelancer the TDS is 10% of the aggregate payment sum. So let’s say you have invoiced a customer for Rs 50,000. The customer will be making an instalment of Rs 45,000 to you and deducting Rs 5,000 (10%) and depositing it to the government. Once the quarter closes the customer will be giving you a Form 16A which will say the Rs 5,000 deducted from your payment. It will likewise have different subtle elements like receipt number by which payment was made to government, the date when the sum was deposited to government and so on.

TDS And Refunds

Presently since we are clear on the point that customers need to deduct TDS and it is obligatory for them (for entities having a TAN), let’s think of the situation where your profit for the whole monetary year doesn’t fall under tax bracket. So let’s say you made an aggregate earning of 1.8 lakh from various customers and every one of them deducted TDS from your earning which would add up to an aggregate TDS of Rs 18,000 (10% of 1.8 lakh). Let’s additionally think of you as didn’t have some other source of income. Your aggregate salary for the current financial year hasn’t crossed the tax slab of 2.5 lakh (which is tax exempt) and consequently, you don’t have to pay any duties to the administration, what happens at that point? Well, you assert refund from the Income Tax Department. Since TDS was deducted at source without knowing how much your aggregate income for the year would be, you can end up noticeably qualified for refunds in case the aggregate TDS surpasses the amount of your tax liability. In the case above when you file your IT return you will be asking for a refund of Rs 18,000 which will be prepared by the IT division after checking points of interest (details) provided in your return.

Next time you hear the word TDS, don’t stress and comprehend that TDS is likewise your part of the earning and nobody is taking it away from you, they are simply depositing it for your sake to the government which you would have in the long run done.

When To Deduct TDS

The TDS rules for small entrepreneurs or freelancers states that single transaction payment which surpasses Rs 30,000 to experts are liable to TDS at the rate of 10%. Indeed, even freelancer who makes such installments are ordered by law to deduct tax at source and deposit the same with the administration. In any case, this is liable to one caveat–freelancers need to deduct TDS just when they have been examined in the past financial year. A review must be done if their yearly pay crosses Rs 25 lakh. In case, they haven’t crossed this income threshold, at that point, their audit would not have been done and they wouldn’t have to deduct TDS regardless of the possibility that they make payment beyond Rs 30,000.

Legal Provisions And Applicability Of TDS On Freelancers

Section 194J Of Income Tax Act, 1961-

According to Section 194J of Income Tax Act of 1961, an individual ought to deduct TDS at the rate of 10% when the following payment is made to an occupant, in a financial year (higher than Rs.30,000):

• Amount charged as professional services fee or

• Non-compete fee according to the Income Tax Act of Section 28(VA) or

• Amount charged as technical service fee or

• Royalty.

Professional Services

This is regarding the services performed by a person in the legal, medical, engineering profession or architectural. And various other services which involve advertising, accountancy, technical consultancy, interior decoration or some other profession that is acknowledged by the Board under Section 44AA.

Different administrations/services that are acknowledged under Section 44AA are company secretary, artist, and authorized representative.

Event managers, sports persons, anchors, commentators, referees & umpires, trainers & coaches, team physicians, physiotherapists and sports columnist are also covered under it.

Non-Compete Fees

Section 194J of the act states that non-compete fees are those in which amount is received either in money or kind in return for an contract that binds the individuals from sharing any license, patent,  trademark, franchise  or any business or commercial rights, technique or information likely to be utilized somewhere else for making elsewhere for manufacture, processing or any other temporary service.

Technical Services

It covers the services provided by a person for managerial, technical or consultancy services.

Administrations, for example, construction, mining and an assembly do not come under the category of technical services as a wage from the same would come under head salary of the recipient.

Royalty

• Under this section implies that the consideration for:
• Transfer of rights regarding secret formula, invention, design, model, patent or trademark.
• Utilization or right to utilize an equipment for industrial, commercial, or scientific purposes.
• Sharing any information related to utilization of a patent, invention, formula, and so on.
• Utilization of a model, invention, patent, and so on.
• Transfer of rights related to scientific findings, literary work, video tapes or films for the purpose of no consideration for sale, radio telecom, distribution or exhibition of the same.

Specific Cases

Some specific cases where TDS deduction is applicable U/S 197J, which is decided by the circulars of the department and case laws:

• Medicinal services rendered in hospitals.

• The sum which given to HR consultancy and recruitment agencies.

• Professional expenses charged by film artist from publicizing/advertising organizations.

• Payment made by organizations/companies to share registrars.

Key Points In Section 194J On TDS

• Under Section 194J, Rs.30,000 is the most extreme limit which is applicable to every payment or item autonomously. And no TDS will be deducted if the amount paid or likely to be paid does not exceed Rs. 30,000 in a financial year.
• TDS under this section is additionally applicable to compensation or commission or fees are given to an organization’s executive, despite the fact that the sum is not a part of the main income. In these cases, the Rs. 30,000 limit is not pertinent.
• TDS will be deducted for all class of person except HUF/Individual but if HUF/Individual is liable to get his tax audit held under section 44AB then this exception will not be applicable and then TDS will be deducted from their income.
• However, they will not be liable to pay TDS on the amount they get from technical and professional services because such sum will exclusively be paid for the individual purpose of such person or HUF.

Applying For TDS At A Lower Rate

As indicated by Section 197, the individual accepting payment can apply for a reduction of the rate in TDS, through filling in the Form 13 and sending it to the surveying officer.

In case it is affirmed by the officer, a certificate expressing a deduction in the TDS is issued to the assessee.

Time Limit To Deposit TDS Under Section 194J

Guidelines on time limit for depositing TDS under this section are-

• If the TDS deduction which comes under Section 194J is paid by the government or in place of the government, the deposit has to be made on the same day.

• In other situations, TDS can be deposited in a week from the end of the month in which the tax deduction has been made.

• If the payment is made on the last day of the financial year, the TDS deposit must happen within two months from that fiscal year’s end in which it was credited.

• Some extraordinary cases may be allowed to deduct TDS on a quarterly basis, given that the assessing officer has approved.

References

1. Brightknowledge.org. (2017). What is freelancing? — Brightside. [online] Available at: https://www.brightknowledge.org/knowledge-bank/media/careers-in-media/what-is-freelancing [Accessed 15 Jul. 2017].
2. Worknhire.com. (2013). TDS & Refunds for Freelancers in India | WorknHire. [online] Available at: http://worknhire.com/resources/tds-for-freelancers-in-india/ [Accessed 15 Jul. 2017].
3. ClearTax Blog. (2016). Even freelancers need to file TDS returns. Here’s when and how – ClearTax Blog. [online] Available at: https://blog.cleartax.in/even-freelancers-need-file-tds-returns-heres/ [Accessed 15 Jul. 2017].
4. Bankbazaar.com. (2017). Section 194J: TDS on Professional & Technical Fees. [online] Available at: https://www.bankbazaar.com/tax/section-194j-tds-on-professional-technical-fee.html [Accessed 15 Jul. 2017].
5. Duermyer, R. (2017). What is a Freelancer and How Can I Work At Home Freelancing?. [online] The Balance. Available at: https://www.thebalance.com/what-is-freelancing-1794415 [Accessed 15 Jul. 2017].

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In this article, Himanshi Srivastava of Amity Law School Lucknow discusses All you need to know about Syndicate Loan

Introduction

A Syndicate Loan is one of a kind of loan which is provided by the group of lenders to a single borrower. These borrowers can be an association, any large project or a government. The group of people who are offering loan is known as Syndicate, who are working on providing loans to a single borrower. These loans involve a fixed amount of funds or a credit line.

The main function of a Syndicate loan is to provide a loan extended to a single borrower by multiple financial institution group, or “syndicate”, for that purpose. The same terms and conditions will apply to all of the lenders in the syndication process, and there is only one loan agreement.

Features of Syndicate loan

1. Large amount and long t erm:- It can meet customer’s demand for funds of long term and large amount. It is generally used for new projects loans, large equipment leasing and enterprises, M&A financing in transportation, petrochemical, telecommunication, power and other industries.
2. Less time and energy for financing:- It’s usually the responsibility of the arranger for doing the preparation work of creating the syndicate or cluster once the recipient and also the arranger have united on loan terms by negotiation
3. Wide approaches to syndicated loans: The same loan syndications will embrace several sorts of loans, like fixed-term loans, revolving loans, standby L/C line on needs of the purchasers. Meanwhile, the receiver may select RMB, USD, EUR, GBP and different currency or currency portfolio, if needed.
4. It will facilitate borrowers establish an honest market image: To become a roaring institution of the syndicate, comes from the participant’s full recognition of the borrower’s monetary and operational performance, by that the receiver will build up their name.
5. Currency: Syndicate adopts mainly RMB but beside it USD,EUR,GBP and other currencies are also available. Multiple currencies can also be used in a syndicated group if demanded by a single borrower.
6. Term: Three to five years term is for short term funds, seven to ten years for medium and ten to twenty years for long term funds.
7. Interest Rate:The price of syndicated loan is composed of loan interest and fees.

Lending interest rate shall be set, according to different borrowers, in line with lending interest rate policies, lending interest rate regulations of and provisions of the syndicated loan contracts.

Charges: It includes arrangement fee, underwriting fee, agency fee, commitment fee etc.

Target Customers

• Customers who require long-term and large-amount loan.
• Customers with high reputation in the industry, whose operation ability as well as financial and technical strength are recognized by most banks.

Application Qualifications

• The receiver ought to be the legal persons of enterprises and public establishments additionally as alternative economic organizations approved and registered beneath the laws of its various State.
• The receiver should be qualified for basic terms and conditions on the borrowers of disposition General Provisions additionally as crediting management policy issued by the Bank.
• The borrower shall meet requirements of certain level after credit rating by the Bank or other recognized rating agency;
• The borrower shall be large and medium manufacturing enterprises or project companies with sound operation and finance as well as strong competition in respective industries, which shall be promising in the development.
• The borrower has established a regular and sound partnership with the lender.
• In the event of joining the syndicate set up by other banks, the arranger bank shall be a policy bank, state-owned holding bank or foreign bank with sufficient credit and operational strength.

Required Documents

1. Relevant information on the borrower and their Indian and foreign shareholders and guarantors,
2. Business license and articles of association of the borrower as well as joint venture or cooperation contracts of foreign-funded enterprises and inland associated enterprises,
3. Project proposals, feasibility study reports, engineering estimates and other documents approved by government departments and approval documents, as well as the approval documents on the project provided by administrations of taxation, environmental protection, and customs,
4. Purchase contracts, construction contracts, supply and sale contracts of project equipment.
5. Other documents or information needed by the bank.

Syndication Loan Process

1. Pre- sign language Process: It includes period covering following 2 phases:
2. Pre-mandate stage: Throughout this era, the main points of the planned group is action which are mentioned in the association and finalized through an Indicative Term Sheet. On the completion of Term Sheet, a letter of Mandate is obtained from the recipient. This point of amount is never shorter than one month and may be as long as collectively in a year.
3. Post-mandate stage: Throughout this era, loan syndication takes place and facility agreements square measure negotiated and finalized. it’s finished by a closing or linguistic communication ceremony. This section would possibly take six to eight weeks.
4. Post- sign language Process: In this, the total amount covering the execution/ sign language of syndication loan and security documents until full and final adjustment of syndicated loan facility takes place.

Things to Remember

Business of syndicated loan in the main involves arranger, lead bank, manager, participant, agency bank, arranger and alternative members, World Health Organization can perform the duty, relish the correct and assume the chance in keeping with the contract or their various disposition proportion. Syndicate member banks area unit divided into 3main levels: initial, arranger (lead bank); second, manager; third, participants.

1. The arranger, liable for organization and arrangement of the syndicated loan, could be a bank or banks that undertake preparation of syndicate and distribution on commission of consumers. The arranger sometimes can underwrite the entire issue of syndicated loan.
2. The banking company underwrites a bigger share of the syndicated loan, ranking the very best among managers. Usually, the agent bank is additionally the arranger.
3. The manager refers to the position granted by the agent bank in line with loan quantity and level undertaken by every bank within the syndicated loan with larger quantity and additional participants. it is a bank accountable for establishing syndicate throughout the preparation stage..
4. Participants discuss with the banks World Health Organization settle for invite of the arranger to hitch the loan syndicate and supply loans consistent with shares determined through negotiation. variations with the managers: Less loan subscription, assume no responsibility for enterprise and alternative sensible preparation of the syndicate.
5. The agency bank is chosen by syndicate members and approved by the receiver throughout the loan amount. when language the loan agreement, the agency bank, on behalf of Syndicate members, is accountable for withdrawal, reimbursement of principal with interest, post-loan management and alternative problems on loan management further as communication between syndicate members and also the receiver, handling contract breach, etc. within the light weight of terms of the loan agreement.
6. The organiser refers to the bank, designated from lead banks, to supervise the complete syndicated loan and to part undertaken preparation tasks of the bank syndicate.
7. advisor refers to the bank appointed by the recipient throughout the syndicated loan amount, that provides paid monetary consulting service for the receiver to form correct loan call in face of varied quotations and loan terms provided by alternative banks thus on facilitate all the loan work.

Benefits of Syndicate Loan

Economists and syndicate executives contend that there area unit alternative, less obvious blessings to going with a syndicated loan. These advantages include:

• Syndicated loan facilities will increase competition for your business, prompting alternative banks to extend their efforts to place market info ahead of you in hopes of being recognized.
• Flexibility in structure and rating.
• Syndicated facilities bring businesses the most effective costs in mixture and spare firms the time and energy of negotiating one by one with every bank.
• Loan terms will be abbreviated.
• Increased feedback. Syndicate banks generally area unit willing to share views on business problems with the agent that they might be reluctant to share with the borrowing business.
• Syndicated loans bring the recipient larger visibility within the open market.

Difference between a Consortium loan and a Syndicate Loan

Syndicate loan

While a loan syndication additionally involves multiple lenders and one receiver, the term is usually reserved for loans that involve international transactions, completely different currencies, and a necessary banking cooperation to ensure payments and cut back exposure. A loan syndication is headed by a managing bank that’s approached by the receiver to rearrange credit. The managing bank is usually accountable for negotiating conditions and transcription the syndicate. In return, the recipient usually pays the bank a fee.

The managing bank in a very loan syndication isn’t essentially the bulk investor, or “lead” bank. Any of the taking part banks might act as lead or assume the responsibilities of the managing bank counting on however the credit agreement is required.

Consortium loan

Like a loan syndication, syndicate funding happens for transactions that may not occur with one investor. many banks might comply with collectively supervise one receiver with a standard appraisal, documentation, and follow-up. Consortiums don’t seem to be designed to handle international transactions like a syndication loan; instead, a syndicate might arise as a result of the scale of the project at hand is solely overlarge or too risky for any single investor to assume. typically the collaborating banks type a replacement syndicate bank that functions by leverage assets from every establishment and disbands once the project is completed.

References

• http://myfinancial.in
• http://www.investopedia.com/terms/s/syndicatedloan.asp

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In this article, Himanshi Srivastava of Amity Law School Lucknow discusses the provision of Statutory rape as per the Indian laws.

What is Statutory Rape?

Statutory Rape is defined in Section 375 of Indian Penal Code, (amendment of 2013) which states that “any male, who does an intercourse with any female who is below the age of 18, with or without her consent will be constituting a Statutory Rape”. This offence is created to save the exploitation of the minor by the adults. In this kind of rape, the adult will get punished if he had any kind of physical interaction with a woman/girl, in the age of  18 or below, no matter if she has voluntarily participated in the act or not. The consent of the minor is immaterial and will not be considered any defence to the accused.

Statutory Rape is always in a shadow as the voice of victims goes unheard or they will not get any support from the society and our system. The minors who gets suffered from these acts, lives a horrifying life and it creates a massive disaster in their mind. The narrow minded people who do these acts, should be given the strict punishment so that it gives the pact lesson to the wrongdoers.

Age of Consent

The age of consent in India is 18 years old. The age of consent is the minimum age at which an individual is considered legally old enough to consent to participate in sexual activity. The individual within 17 years of age or younger, will not be considered to be legally old enough to give their consent to participate in any kind of sexual activity.

Statutory rape law is violated in circumstance where an individual engages himself in the sexual activity with a person under age of 18. The age of consent lowers to 15 years old in case if the couple is married.

The Protection of Children against Sexual Offences Act, 2012 was passed by both the Houses of Parliament on May 22. This Act aims to define various offences against the minor/children to provide penalties to them.  Before this Act was passed, the age of consent was 16 years of age. As the new Act came into force the exploitation of children will reduce at some extent.

Key Points of Statutory Rape

1. The Statute for this offence is The Protection of Children against Sexual offences Act, 2012 (POCSO) but it is regulated by the Section 375 of IPC.
2. This Act regulates the exploitation against the children by the adults,
3. The consent is immaterial of the victim in these type of offences,
4. This offence includes punishment under Section 376 of IPC.

Definition as given in Section 375 of IPC:

Old Provision:

Section 375 defines Rape as:

A man is said to commit “rape” who, except in the case hereinafter excepted, has sexual intercourse with a woman under circumstances falling under any of the six following de­scriptions:

1. First – Against her will.
2. Secondly – Without her consent.
3. Thirdly –  With her consent, when her consent has been obtained by putting her or any person in whom she is interested in fear of death or of hurt.
4. Fourthly – With her consent, when the man knows that he is not her husband, and that her consent is given because she believes that he is another man to whom she is or believes herself to be law­fully married.
5. Fifthly – With her consent, when, at the time of giving such consent, by reason of unsoundness of mind or intoxication or the administration by him personally or through another of any stupe­fying or unwholesome substance, she is unable to understand the nature and consequences of that to which she gives consent.
6. Sixthly – With or without her consent, when she is under sixteen years of age.

Explanation – Penetration is sufficient to constitute the sexual intercourse necessary to the offence of rape.

(Exception) – Sexual intercourse by a man with his own wife, the wife not being under fifteen years of age, is not rape.]

New Provision: (As of Amendment 2013)

A man is said to commit “rape” if he:

1. penetrates his penis, to any extent, into the vagina, mouth, urethra or anus of a woman or makes her to do so with him or any other person;
2. or inserts, to any extent, any object or a part of the body, not being the penis, into the vagina, the urethra or anus of a woman or makes her to do so with him or any other person;
3. or manipulates any part of the body of a woman so as to cause penetration into the vagina, urethra, anus or any of body of such woman or makes her to do so with him or any other person;
4. or applies his mouth to the vagina, anus, urethra of a woman or makes her to do so with him or any other person, under the circumstances falling under any of the following seven descriptions:

• First. -Against her will.
• Secondly.- Without her consent.
• Thirdly.- With her consent, when her consent has been obtained by putting her or any person in whom she is interested, in fear of death or of hurt.
• Fourthly.- With her consent, when the man knows that he is not her husband and that her consent is given because she believes that he is another man to whom she is or believes herself to be lawfully married.
• Fifthly.- With her consent when, at the time of giving such consent, by reason of unsoundness of mind or intoxication or the administration by him personally or through another of any stupefying or unwholesome Substance, she is unable to understand the nature and consequences of that to which she gives consent.
• Sixthly.- With or without her consent, when she is under eighteen years of age.
• Seventhly.- When she is unable to communicate consent.

Explanation I.—For the purposes of this section, “vagina” shall also include labia majora.

Explanation 2.—Consent means an unequivocal voluntary agreement when the woman by words, gestures or any form of verbal or nonverbal communication, communicates willingness to participate in the specific sexual act:

Provided that a woman who does not physically resist to the act of penetration shall not by the reason only of that fact, be regarded as consenting to the sexual activity.

Exception I.—A medical procedure or intervention shall not constitute rape.

Exception 2.—Sexual intercourse or sexual acts by a man with his own wife, the wife not being under fifteen years of age, is not rape.’

Rationale of Statutory Rape Laws in India

Statutory rape laws are about the circumstances where a private person is lawfully incapable of willing to sexual activity till that person reaches a particular age. The law mandates that although he or she willingly engage in sexual activity, the sex isn’t consensual. Critics argue that the person’s age limit cannot be used to determine the ability to consent to sex, since a young juvenile might possess enough social sense to make aware and mature choices about sex, while some adults might never develop the ability to make mature choices regarding sex, as even several mentally healthy people stay naive and simply manipulated throughout their lives.

Another point of law comes from the fact that minors are generally economically, socially, and legally is not equal to adults. By making it a punishment for an adult to have sex with a minor, statutory rape laws focuses to give the minor some safeguards against adults in a position of power over the youth.

Another heated argument presented in defense of statutory rape laws relates to the difficulty of prosecution in prosecuting a rape case (against a victim of any age) in the courtroom. Because forced sexual activity with a minor is considered a particularly heinous form of rape, these laws helps the prosecution relieving the burden to prove lack of consent. This makes conviction more flexible in cases involving minors.

The aim of statutory rape laws is to protect young minor females from males who might exploit them and do not take responsibility by giving support for the child. In the past, the solution to such problems was often a shotgun wedding, a forced marriage by the parents of the minor girl in question. This rationale is to preserve the marriageability of the minor girl and to stop their unwanted teenage pregnancy.

Analysis of the Statutory Rape falling under the Sixth Clause of the above definition

Any Sexual activity with a woman with or without her consent when she is below 18 years of age constitutes rape. A woman under the age of 18 is considered incapable of giving consent for any kind of sexual activity. The age of consent was raised from 16 to 18 by the Criminal Law (Amendment) Act of 2013.

The Supreme Court in Harpal Singh held that ‘even if the girl of 14 is a willing party and invited the accused to have sexual intercourse with her, the accused would be liable for rape under this clause’.

In Mana Ramchandra Jadhav v. State of Maharashtra the victim left her mother’s house and started living with the accused because her mother had declined the proposal of her marriage with the accused on the ground that she was too young. While she was with the accused they had sexual intercourse which was against her will. The act of intercourse with the prosecution will be covered under this clause.

Exception to this Clause

“Exception 2: Sexual intercourse or sexual acts by a man with his own wife, the wife not being under sixteen years of age, is not sexual assault.”

Since child marriage in India is not yet void and is only voidable, such law was must to restrain men from taking advantage of their marital rights prematurely. No man can be held guilty of rape on his own wife when she is over 15 years of age on account of the matrimonial consent that she has given.

In Bishnudayal v. State of Bihar, where the victim, a girl of 13 or 14, who was sent by her father to accompany the relatives of his elder daughter’s husband to look after her elder sister for some time, was forcibly ‘married’ to the appellant and had sexual intercourse with her, the accused was held liable for rape under section 376.

However under section 376 B, IPC sexual intercourse with one’s own wife without her consent under a decree of judicial separation is punishable by 2 to 7 years imprisonment.

Punishment for Statutory Rape: [Section 376]

As per section 376 of IPC the Statutory Rape comes under the purview of the definition of Rape, so the punishment for Section 375 is:

Section 376 reads as:-

Punishment for rape.—

(1) Whoever, except in the cases provided for by sub-section (2), commits rape shall be punished with imprisonment of either description for a term which shall not be less than seven years but which may be for life or for a term which may extend to ten years and shall also be liable to fine unless the women raped is his own wife and is not under twelve years of age, in which cases, he shall be punished with imprisonment of either description for a term which may extend to two years or with fine or with both: Provided that the court may, for adequate and special reasons to be mentioned in the judgment, impose a sentence of imprisonment for a term of less than seven years.

(2) Whoever,—

(a) being a police officer commits rape—

(i) within the limits of the police station to which he is ap­pointed; or

(ii) in the premises of any station house whether or not situated in the police station to which he is appointed; or

(iii) on a woman in his custody or in the custody of a police officer subordinate to him; or

(b) being a public servant, takes advantage of his official position and commits rape on a woman in his custody as such public servant or in the custody of a public servant subordinate to him; or

(c) being on the management or on the staff of a jail, remand home or other place of custody established by or under any law for the time being in force or of a woman’s or children’s insti­tution takes advantage of his official position and commits rape on any inmate of such jail, remand home, place or institution; or

(d) being on the management or on the staff of a hospital, takes advantage of his official position and commits rape on a woman in that hospital; or

(e) commits rape on a woman knowing her to be pregnant; or

(f) commits rape on a woman when she is under twelve years of age; or

(g) commits gang rape, shall be punished with rigorous imprisonment for a term which shall not be less than ten years but which may be for life and shall also be liable to fine: Provided that the Court may, for adequate and special reasons to be mentioned in the judgment, impose a sentence of imprisonment of either description for a term of less than ten years. Explanation 1.—Where a woman is raped by one or more in a group of persons acting in furtherance of their common intention, each of the persons shall be deemed to have committed gang rape within the meaning of this sub-section. Explanation 2.—“Women’s or children’s institution” means an institution, whether called an orphanage or a home for neglected women or children or a widow’s home or by any other name, which is established and maintained for the reception and care of woman or children. Explanation 3.—“Hospital” means the precincts of the hospital and includes the precincts of any institution for the reception and treatment of persons during convalescence or of persons requiring medical attention or rehabilitation.

References

• https://www.ageofconsent.net/world/india
• http://www.prsindia.org/theprsblog/?tag=statutory-rape
• https://indiankanoon.org/doc/1279834/
• https://www.lawctopus.com/academike/section-375-analysis-of-provisions-relating-to-rape/
• https://successfullady.in/the-movement-for-change-the-problem-of-sexual-assault-and-rape-in-india

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In this article, Bhavna Thakur discusses laws regulating Online Gambling in India.

Betting is characterized as wagering, gaming or partaking in a lottery. An individual is betting at whatever point he or she takes the risk of losing cash or possessions, and when winning or losing is chosen generally by shot. Digital betting is otherwise called web betting, is a general term for betting utilizing the web.

History of Gambling

There’s a considerable measure of confirmation that betting amusements existed in old circumstances. From tiles found in China dating from 2300 BC and ivory dice found in Egypt from 1500 BC to betting stuff having a place with Bronze Age Greek officers, unmistakably betting is as old as human progress itself.

The Romans expounded on betting, relating stories of workers and sovereigns betting with dice, and archives have even been discovered recounting gigantic betting obligations and the battles that broke out finished them. While confirmation of any early Roman online poker room embarrassments is thin on the ground (it must involve time) there is proof of stacked dice, found in the remnants of Pompeii going back to 79 AD, instantly before the city got covered in a million tons of hot magma and fiery remains when Vesuvius blew.

Also, it was all around archived that two rulers named Olaf, one Norway’s ruler, the other Sweden’s, moved dice to decide how domain ought to be partitioned.

Betting has made some amazing progress since Ancient Egypt, with the web based betting world ceaselessly developing in 2015 and past. Join the rich history of betting by attempting one of our suggested locales, offering benefits that incorporate.

• Safe and secure saving money alternatives
• Splendid scope of diversions
• A comprehension of client’s’ needs, from years in industry

Web gaming and electronic wagering laws in India are so far creating. We have no dedicated laws for electronic gaming, electronic wagering, online dream sports, online poker, et cetera in India. Really, we have no laws that can sufficiently oversee honest to goodness issues of web gaming, electronic wagering, online dream sports, e-games, et cetera in India. Thusly we have disavowals and impediments that have been constrained by central laws and laws of different states making the entire gaming and wagering Indian gaming and wagering industry is before long torment from nonattendance of a techno legitimate structure that can supervise online gaming and electronic wagering related issues.

Starting late the Indian government has explained about the Foreign Direct Investment (FDI) in E-Commerce Sector of India. FDI is confined in lottery business including Government or private lottery, online lotteries, and wagering and betting including betting clubs et cetera. To the degree the points of central government are concerned, it is not for allowing FDI in lotteries, wagering and betting. Further, central government moreover declined to give its feeling on the legality or wrongdoing of online beguilements and web wagering in India. As needs be the online gaming and electronic wagering agents of India are at present required to agree to various laws of India, both central and likewise state sharp.

“The Sikkim state government has issued its first license to an online gambling operator”

Types of Gambling

• Slot machines
• Lottery
• Scratch cards
• Poker
• Black jack
• Roulette
• Bingo
• Sport betting and racing
• Online gambling

Web based betting locales or permitting wards

Authorizing experts are simply national governments which have sanctioned enactment giving them the privilege to permit and direct the operation of web based betting. Nations by and large do this to create income. Authorizing experts have been situated in little countries with constrained normal assets or an unsophisticated economy. Inside these locales, there is generally a vast focal association that the two issues licenses and arrangements licensees. Holding a permit from one of these bodies gives a site the privilege to make its administrations accessible in various world betting markets. In many parts of the world, working a betting site without such a permit is unlawful.

At the point when an administrator needs to open another betting site, they look for authorizing specialists similarly we search for another place to play blackjack or wagered on our most loved games. These experts have criteria that layout what a web based betting premium must do keeping in mind the end goal to gain and after that keep up an administrator’s permit.

Online Gambling

The State of Sikkim is the main state in India which has authorized a law for internet betting and dons wagering.The Sikkim was passed on June 28, 2008 with the dual objects of controlling and regulating online gaming through electronic or non-electronic formats, and imposing a tax on such games in the State of Sikkim.The Sikkim,were subsequently passed on March 4, 2009 (and the same have been amended from time to time)

Most Gambling Legislation restricts the demonstration of

• Owning, continuing, possessing or having consideration and administration of a gaming house/regular gaming house.
• Progressing or outfitting cash for the reasons for betting to people frequenting any such gaming house.
• Betting in like manner gaming house or present with the end goal of betting in Common Gaming House.
• Betting or suspected betting in any open road, place or avenue.
• Printing, distributing, offering, dispersing or in any way circling anything with the expectation of supporting or encouraging betting.
• Betting fundamentally (This is not material to each state. Just the Gambling Legislation of states like Orissa restrict the demonstration of gaming itself)The obligation for offenses under the Gambling.

Enactments generally vest with

• The proprietor of the gaming/basic gaming house.
• The individual keeping or having charge of the gaming/basic gaming house.
• The individual betting or having instruments or records of wagering or associated with betting or having such instruments.

All Gambling Legislations endorse punishments which are pretty much comparative. The Bombay Prevention of forces a fine and detainment for guilty parties. A first offense is culpable with a fine of in any event INR 500 (around USD 8) and 3 months detainment, a moment offense is culpable with a fine of at any rate INR 1,000.

PIL Filed For Banning Online Lotteries From Other States In State Of Maharashtra

The PIL expressed that state government has allowed just 13 online lotteries. Be that as it may, administrators with authorizations from states like Mizoram, Arunachal Pradesh, Sikkim, and Meghalaya, are directing on the web lotteries where comes about are reported in like clockwork on single-digit. The solicitor named the whole movement as absolutely unlawful. As per lottery rules confined by Maharashtra government, it’s required for administrators to pay propel impose on a wide range of online lotteries in the state. Be that as it may, the lottery organizations tested legitimateness of standards and the high court had given a break remain on it. Exploiting it, the online lottery organizations from outside states stayed away from installment of assessment to the tune of Rs 933.14 crore amid 2007-09. In 2009, the high court lifted the break stay and enabled the state government to gather the expense, however no recuperation has been made.

Recent case in South Delhi

Police on Friday (7th july 2017) busted an illegal online casino at Kotla Mubarakpur in south Delhi and arrested four persons in this connection, Deepak Chandra, Raj Kumar, Arif Khan and Prakash have been arrested. Deepak used to operate the gambling den and handle all the cash and maintain transaction details. The alleged mastermind of the racket, a woman named Neetu, is absconding. Police seized money Rs 35,800, seven CPUs, a portable workstation and a landline phone set among other items.Even, however, internet betting is unlawful in India, the market is assessed to be a couple of thousand crore rupees. Just Sikkim has set down directions for controlled and checked web based betting.

Conclusion

At the present time – most betting in India is illicit. Be that as it may, lawful betting exists for horse dashing, lottery, and so on. There is additionally a high number of wagering locales lawful in the UK which benefit Indians with just minor bother. The law right now appears to be more worried about terrifying Indians not to bet, than it does much to counteract it. It appears to be exceedingly likely completely lawful betting will come to India sooner or later – how far away that is, is impossible to say.

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In this article, Ashwini Gehlot of Institute of Law, Nirma University Ahmedabad discusses the Punishment For Possession Of Illegal Drugs And Narcotic Substances?

Introduction

Caught in the endless loop of substance abuse, India is home to roughly 3 million medication addicts. The National Crime Records Bureau’s information, as distributed in 2014, revealed that India witnesses almost 10 suicides once a day because of substance addiction.

India passed the Narcotic Drugs and Psychotropic Substances Act, (NDPS Act) in 1985 which was consequently amended in 1989, 2001 and recently, in 2014. India’s driving against anti-drug law endorses firm punishments for drug traffickers and rehabilitation for the users. Surrounded with the purpose to battle drug trafficking, it denies and criminalizes the production, cultivation, possession, sale, use, purchase, import and export, and consumption of narcotic drugs and psychotropic substances. It gives immunity in circumstances where the medications are used for scientific or medical purposes.

The NDPS Act appeared to conceive strict punishments for drug trafficking, to expand implementation powers, implement international convention that India is associated with and to direct psychotropic substances. A predominantly reformatory statute, NDPS furnishes the regulation of drugs. It expresses that capital punishment can be granted as a form of punishment under the Act. The 2014 amendment held that the decision to grant capital punishment lies at the discretion of the court and rather stipulates 30 years of detainment as a substitute.

With a specific end goal to supplement the NDPS Act, the Prevention of Illicit Trafficking in Narcotic Drugs and Psychotropic Substances Act came into existence in 1988. It contains provisions relating to the preventive detention of any and each person who is associated with or accused of drug trafficking.

The worry for combatting drug trafficking magnifies once the judiciary started to rely on Article 47 of the Indian Constitution, which endorses the restriction on the utilization of drugs and directs the State to endeavor to decrease and abolish the utilization of drugs, with the exception of when it is utilized for scientific purposes. The present legislation covers three classes of substances, which are psychotropic substances (LSD, Amphetamines, MDMA Methamphetamines), narcotic drugs (poppy straw, cocoa leaf, cannabis, and opium) and controlled substances (utilized for the production of any psychotropic substance or the narcotic drug).

Drug Law Enforcement Agencies In India

• Narcotics Control Division
• Central Bureau of Narcotics (CBN)
• The Narcotic Control Bureau (NCB )
• Other Agencies- Directorate of Revenue Intelligence, Central Bureau of Investigation, Customs Commission, Border Security Force.

Legislative Policies In India In Drug Related Matters

The broad legislative policy in the issue is mentioned in the three Central Acts, viz.

• The Narcotic Drugs and Psychotropic Substances Act, 1985,
• Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act, 1988,
• Drugs and Cosmetics Act, 1940,

Narcotic Drugs And Psychotropic Substances Act, 1985

India is a party to the 3 United Nations drug convention that is –  “The 1971 Convention on Psychotropic Substances (1971 Convention)”, “The 1961 Single Convention on Narcotic Drugs (1961 Convention)”, and “The 1988 Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988 Convention).”

The official record expresses that the NDPS Act was instituted with a specific end goal to give adequate penalties for strengthened enforcement powers, drug trafficking, and to execute international conventions to which India is a member, and uphold controls over psychotropic substances. Three times amendment was made in this Act i.e. in 1989, 2001 and currently, in 2014.

The NDPS Act restricts/prohibits the production, cultivation, sale, possession, trade, purchase, use, consumption and import/export of psychotropic substances and narcotic drugs except scientific or medicinal as per the law.

The Act covers three wide classes of substances:

1. Psychotropic Substances or those secured under the 1971 Convention and also other psychoactive substances, for example, ketamine which is not yet grouped under 3 international convention;
2. Narcotic Drugs, that is, those secured under the 1961 Convention;
3. “Controlled Substances” that are utilized to make psychotropic substances or narcotic drugs.

NDPS Amendments, 2014

The NDPS Act was amended in early 2014 for the 3rd time and some new provisions come into force from on 1 May 2014. The principal highlights include:

• Creation of another class of “essential narcotic drugs”, which the central government can regulate and determine consistently throughout the country.
• Widening the goal of the law from containing unlawful use to promoting the scientific and medical use of psychotropic substances and narcotic drugs.41 with regards to the rule of “balance” amongst control and accessibility of narcotic drugs that supports the international drug control treaties.
• Including the expressions “recognition and approval” of the treatment center and “management” of drug dependence, in this manner permitting for the foundation of lawfully binding treatment standards and proof/evidence based medical interventions.
• Making capital punishment optional for a subsequent offense including a specific amount of drugs U/S 31A. The court will have some other alternatives to impose detainment/imprisonment for a term of 30 years under this section.
• Increased punishment from a maximum of 6 months imprisonment to 1-year imprisonment for small quantity offenses.
• Authorizing private sector inclusion in the processing concentrated poppy straw and opium.
• Raising the rank of officers approved to conduct arrest and search permit holders for affirmed NDPS violations.
• More detailed provisions for relinquishment of the property of people summoned on charges of drug trafficking.

Punishment For offenses

NDPS Act considers drug offenses as very grave and serious in nature and so, punishments for them are very stiff. Offenses under this Act are cognizable and non-bailable. The quantum of sentence and fine differs with the offense. For most of the offenses, the punishment relies upon the quantity of drug included – little amount, more than little however not as much as the business amount or business amount of drugs. Commercial and small amounts are notified for each drug.

Under NDPS Act, criminal conspiracy, abetment and even attempt to carry out an offense pull in the same punishment as the offense itself. Habitual or repeat offenses attracts 1 and half times the punishment and capital punishment in some cases. Since the punishments under this Act are rigid and inflexible, a few procedural safeguards have been given in the Act. A few immunities are additionally accessible under the Act.

Quantity And Punishments

Offences And Penalties

Examples In Indian Judiciary

• February 2012: Chandigarh district court sentences Paramjit Singh, discovered with 10 kg of heroin in 2007, to death. In 1998 he had been captured with 1.02 kg of heroin.
• February 2008: Ahmedabad sessions court sentences Omkarnath Kak, found with 28 kg of charas in 2003, to death. In 1988, Kak had been captured for having 40kg of charas.
• December 2007: A Mumbai special court grants death sentence to Ghulam Malik, found with 142 kg of hashish in 2004. Approx 1.8 kg of hashish had been recuperated from Malik on a prior event.

Immunity In Drug Cases

1. Officers acting in the discharge of their duties in good faith under the Act are exempted from legal proceedings, suits and other prosecution (Section 69).
2. Addicts accused with consumption of drugs under section 27 or with offenses including little quantities will be exempted or protected from any prosecution if they volunteer for dead-diction. This exception might be withdrawn if the addict does not undertake complete treatment (Section 64 A ). It is important to note that it is not obligatory that the drug, if any, found with the addict in little quantity, require not be for personal use.
3. Offenders State or Central governments can delicate immunity to a wrongdoer in order to get his evidence in the case.This immunity is allowed by the government and not by the court (Section 64).
4. Minors, offenses committed under any law by individual less than 18 years old will be secured by the Juvenile Persons (Care and Protection) Act. This Act seeks to ameliorate such juveniles instead of punishing them under the respective Acts. It prevails over any other Act in regard to people underneath the age of 18. Subsequently, such persons cannot be prosecuted under the NDPS Act too.

Loopholes in The Act And Suggestions

Referred to as a hasty piece of enactment that was passed under tremendous pressure, India’s chief law to handle drug trafficking isn’t free from pitfalls. It doesn’t have a reasonable outline between the definition of an addict and a consumer. The definitions set up is neither backed by laws nor by ethics. It notices terms like use, possession, and consumption yet neglect to illustrate what they truly mean. The non-appearance of any political initiative in setting up machinery sanctioned to enforce and regulate rehabilitation acts as a bottleneck. The scarcity of related institutions in charge of training the judicial machinery, the insufficient rehabilitation facilities and such factors have advanced the inadequacy of law to deal with the widespread drug menace in India. The ineffectual enforcement of the statute and the deficiency of rehabilitative organization has only added to the rundown of shortcomings. Brutal and stringent, the statute intensely hampers the criminal justice system.

The strictness of the NDPS Act is revealed by the provision for granting capital punishment in instances of repeated offenses, similar to the manufacture, production, transportation, possession and import/export of drugs.

The lack of data and statistics regarding drug addiction in no way whatsoever arises from the absence of substance abuse. A glaring gap, the range of drug abuse and its consequences on one’s health and overall well-being remains an unchartered territory. The paucity of data with respect to the nature and extent of drug dependence, which are key factors to be examined before formulating drug policies, hinders the accomplishment of the statute’s objective.

Provisions of criminalizing the utilization of drugs, punishing the possession of drugs for individual utilize, imposing the death penalty and other different aspects of the enactment are far harsher than those specified in the UN drug control convention. Despite the endeavors taken by civil society groups to show the incapability of these extreme provisions, legislators have neither surveyed nor replaced these systems. Drug policy execution is attempted by the state and central governments, as well as by ministries. Thus, this offers to ascend to circumstances of abandoning one’s duty and overlapping in the enforcement.

Suggestions

Unless viable measures are taken quickly, the reformative aim of the legislation will go futile. In spite of the fact that illuminating presences and society’s representatives can be brought in to recommend and evaluate changes in the drug policy, these measures have not yet been put into utilization. Inspecting the cruel provisions and respecting the privileges of each one of those people who rely upon drugs is an unquestionable requirement. Reinforcing the connection between Government divisions and reaching common society representation, for example, medical experts and patient groups can uphold viable plan of drug policies. Conducting research and accumulating information on drug dependence, substance use and the repercussion on the health of the individuals who infuse/inject drugs can help to stand for the war against drug abuse. The transformation of the NDPS Act itself is the principal walk to be taken if the Government genuinely tries to reaffirm its dedication towards wiping out India’s drug crisis.

References

1. com. (2017). ‘High’ time Indian drug laws are sent to rehab. [online] Available at: http://www.legallyindia.com/views/entry/high-time-the-drug-law-is-sent-to-rehab [Accessed 17 Jul. 2017].
2. gov.in. (2014). Punishment for offenses |. [online] Available at: http://www.dor.gov.in/Punishment_for_offenses [Accessed 17 Jul. 2017].
3. Rao, P. (n.d.). Drug Laws In India. [online] http://www.antidrugs.gov.il. Available at: http://www.antidrugs.gov.il/download/files/indian_drug-laws.pdf [Accessed 17 Jul. 2017].
4. Anon, (n.d.). [online] Available at: http://shodhganga.inflibnet.ac.in/bitstream/10603/18155/12/12_chapter6.pdf [Accessed 17 Jul. 2017].
5. Tandon, T. (2015). Drug policy In India. [online] http://idhdp.com. Available at: http://idhdp.com/media/400258/idpc-briefing-paper_drug-policy-in-india.pdf [Accessed 17 Jul. 2017].
6. The Telegraph. (2012). Crime and punishment. [online] Available at: https://www.telegraphindia.com/1120314/jsp/opinion/story_15247652.jsp [Accessed 17 Jul. 2017].

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In this article, Karn Singh of JGLS discusses How to get a judicial clerkship at Supreme Court and various High Courts.

“You learn more in one year of clerking than you learn in eight years of practice”– Justice Sonia Sotomayor.

Introduction

Every judge requires an assistance in deciding cases or making up for the mistakes. This task is done by the Judicial Clerk who is essentially an assistant to the Judge in conducting research on the cases that is in front of the judge. The Task of Judicial clerkship differs from court to court and judge to judge. The Task of judicial clerkship in Supreme Court can be very different from a Judicial Clerkship in District Court.

But the knowledge in every court about the judicial process is tremendous. The primary role of a judicial clerk is to assist the judge under the strict deadline and tremendous workload.

One law clerk is assigned to each judge for a year, but some judges require 2 or more law clerk at a time depending on the work a judge has. The law clerk usually begins its tenure in the month of July each year, soon after he/she completes LLB degree. Judicial Clerkship can be on any level either in Supreme Court or High Court. Advocates can be tremendous assistance at the Supreme Court level. Judicial clerks are paid around Rs. 25000 to 30000 per month. The task given to the Judicial Clerkship are preparing a summary of facts, read briefs, lookup and update relevant authorities, conduct general research, and make a record of facts and arguments.

The more detailed task of judicial clerkship

• Maintaining judges libraries by updating appropriate documents.
• Attend court sessions to record necessary case information
• Draft or proofread judicial opinions, decisions, or citations.
• Participate in conferences between judges and attorney
• Prepare briefs, statement of issues involved in cases.
• Research laws, court decisions, documents, opinions, briefs, or other information related to cases.

Advantages of Judicial Clerkship:

• It allows a fresh graduate to get an overview and in-depth experience of the procedure of the court.
• One can understand how to argue in the court or how not to argue in the argue. As this is the most important part of a case.
• Going through a lot of cases will make the graduate understand how to spot the weaknesses or strengths of a case fast.
• Also, going through 100s of cases will make a graduate perfect in different aspects of the law.
• As research is an integral part of the judicial clerk, it does enhance the research skill of a graduate.
• Working as a judicial law clerk will teach a great research technique from the judge he or she is working with.

How to get the judicial clerkship at Supreme Court or High Court

• The first stage for the Judicial Clerkship at Supreme Court is the entrance test which is held almost year in the month of May. In this written exam, two sections are included. Section 1 includes General English, and General Awareness for 50 marks And Section 2 includes all the law related questions i.e. Indian Constitution, Indian Penal Code, Criminal Procedure Code, Civil Procedure Code and Indian Evidence Act etc for 100 marks.

Guidelines for Written Exam

• The candidate applying for the exam should be a law graduate having an LLB degree from any law school recognized by Bar Council Of India
• Candidate studying in the last year can also apply for the clerk cum research assistant.
• Candidate must know basic computer skills and must know the various search engines like Manupatra, SSC Online, Westlaw etc.
• The question paper comprises of 150 questions. One mark for the correct answer and 0.25 negative mark for the wrong answer.
• Minimum marks to qualify is 60% of the total.

After the written test, selected candidates are called for personal interview.

• A committee of judges interviews the eligible candidate. The interview will carry for 30 marks and 15 marks are the minimum qualifying marks.
• The selected candidates are allocated work under the sitting judges of the Supreme Court.

If a judge wants more than one law clerk then, a judge can appoint a second clerk.

A judge can either ask the Registrar to appoint one from the list of the shortlisted candidates or can personally recommend someone. If the candidate is fit then he will be appointed as the 2nd clerk.

A lot of people apply for the judicial clerkship. More than 100 candidates apply and around 50-60 candidate is selected. Court starts in the month of July and the clerkships starts in mid-August.

Questions asked in the interview:

• Firstly, the judges will ask about the internship that is done in the law school. Judges basically look if the candidate knows the basic of the court proceedings and how the court works. So, if you choose to go for clerkship then court internship will matter a lot.
• The Judge will also ask about the law that is covered in the internship. Law is the most important part in the clerkship and one should know the law properly. Not only from the books but from the practical point of view. In the interview, judges will ask about the law, in what part of law one has interned like criminal law, civil law, or arbitration etc.
• Judges will also ask about the hobbies and academic interests.

Is the internship with Judge is important to get judicial clerkship job?

No, it is really not important but one should know the basic information about the court and its proceedings.

Difference Between Internship and clerkship:

A Judicial clerkship is referred as long term clerkship. Duration of which is 1 year and if the judge or the candidate wants to expand, it can be expanded for 2 years. A Judicial clerkship is a paid job which is varied from court to court. In Supreme Court, a judicial clerk is paid between INR 25000-30000.

Short term clerkship is the opportunity given to the law students to work as a legal trainee under the honorable Supreme Court judges during their internship period. The duration can vary from 4 to 6 weeks. Short term clerkship is mostly unpaid.

How to apply for short term clerkship:

• Law students from the school recognized by The Bar Council Of India can directly apply under the name of the university to the Registrar of the Supreme Court of India or The High Court.
• The Registrar of the court scrutinizes the applications and communicate the same to the head of the institution. The application for the same should be applied 3 to 4 months prior to the date of joining.
• The registrar will call the applicant if the application is selected or not, 3 weeks before the date of joining.
• Short term clerkship is basically unpaid.

Conclusion

A judicial clerkship is not a famous job in India. But fresh graduates from many know law school is applying for judicial clerkship as it serves a lot of benefit in one’s career. It is said that you can learn a lot in one year of clerkship than you can learn from seven years of practice. Judicial clerkship gives the insight of the judge’s chamber and how a judge decides a case. In addition, Judge develops a professional relationship with their clerks which can be beneficial for a law graduate. The Graduate should try judicial clerkship at least once in his/her career. This can improve the skills that are required for arguing a case.

Name-Karan Singh

College- Jindal Global Law School

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In this article, Karn Singh of JGLS discusses the procedure for Trademark Registration in India.

A great trademark is Appropriate, Dynamic, Distinctive, memorable and Unique- Primo Angelia

Introduction

Registration of a trademark is very important for a company or if you’re starting a new business or trade. The company’s logo, name or signature is the first thing that should be unique from the rest. It should be protected from the others. Registering a trademark is a legal process that is provided under the Trade Marks Act,1999. A Trademark is a symbol that makes the mark legally valid. Hence, registering your mark under the trademark act is very important for a company, so that the mark can be secured from the rest of the competition of that business.

Registration of trademark for your business is very easy. Anything like a symbol, mark, signature, etc which is important for a business should be registered, so that others cannot misuse the company assets.

In India, the court has decided the infringement of trademarks according to the evidence given by the parties. In 1980s Bata v Bata, the shoe maker wanted to stop a company marketing foam materials under the same name. The judge asked, “ How would the customers know that Bata is not producing foam?” For this, the judge reasoned that customers won’t ask the seller who the manufacturer is. For this, Bata won the case despite the fact the class was totally different.

Cadbury owns 3 trademarks containing the word eclairs. And also own the purple color wrapper which no-one can use for chocolates. However, all three names were not in use because of which ITC won the case.

For registering a trademark, one has to understand and take precautions before registering it as it can lead to the court hearing.

For that step by step procedure is explained below:

Documents required

• A soft copy of the logo in JPEG format is required for the registration.
• A Form of Authorisation TM 48. Link for the form is attached http://www.ipindia.nic.in/writereaddata/images/pdf/form-TM-48.pdf .
• Date of first use of a mark.
• Name and address of the proprietor of the mark or Name of all the partners if its a partnership firm.
• Fees that is required for registration.

Types Of Trademark available

• Names According to Section 9 or 11 of Trade Marks Act it should not be similar to with an earlier trademark.^[1]
• Symbols
• The Combination of Colours or even a single color in combination with a word or device according to Section 10.^[2]
• Letters, numerals or combination of both.
• Monograms
• Sounds Mark

In the registration of the trademark, it should contain the following

• The class/classes of the goods/services in respect of which it is to be registered.
• Name and address of the proprietor
• Proprietor Trade Description
• Agent/Attorney Detail
• Trade Mark text which is to be registered.
• Place where trademark has been registered

How to make a trademark application?

The first process before registering for the trademark is to search for the trademark. Entrepreneur or owner of the company should conduct an online search of the trademark on trademark database.

For this, you just have to visit the Intellectual property website. Link for the same is provided http://www.ipindia.nic.in/.  After visiting the web page, the public search option is given on the right side of the page. Which would provide you the option of selecting different search like patents, trademarks, design, electronic registerar of patent agents. Select Trademarks under the public search. This will open a form which has to be filled. Link for the form is https://ipindiaonline.gov.in/tmrpublicsearch/frmmain.aspx.

• In that form, you have to select word mark as the search type at the top of the page.
• After that enter the Wordmark that you would like to search. The trademark database can be selected through 3 options that are  – “start with”, “contains” and “match with”.
• After that enter the class of trademark that is applicable to the product. You can access the NICE Classification for selecting the class.
• Click search to begin the trademark search.

The result of the trademark search

The above picture shows the result of a company names Levis under class 25. Levis Strauss & Co. is the owner of the clothing and do own this mark internationally. You can select the option of show details which would display information about the company like date of expiry, registered or not, etc. However, if the result shows no matches, then there is no registered company in that name. It is very important to know the result before registering for the trademark. After the search is done, you are ready to register the mark. For registering the trademark follow the step below:

You can make an application for a trademark on Form TM-A. TM-A form is attached in the link http://www.ipindia.nic.in/writereaddata/Portal/Images/pdf/FORM-TM-A.pdf.

Application for registration of a trademark /collective Marks / Certification Mark / Series of the trademark for specification of goods or services included in one or more than one classes. Where the applicant is an Individual / Start-up /Small Enterprise, the prescribed fees for physical filing is Rs. 5000 and for E-filing it is Rs. 4500. TM-A form with prescribed form fees should be made at one of the five offices of the Trade Marks Registry located at Mumbai, Delhi, Kolkata, Chennai, and Ahmadabad.

Pre-filing search is important before filing the application. Once registration is done, an official receipt with a TM number will be issued. Then an examination report is generated to which a reply has to be submitted through e-filing or through email at parm.tmr@nic.in within one month from the date of receipt of the examination report. A response to the registration is given by an affidavit, a hearing or by an interview.

The Application will be looked at only if it does not conflict with existing registration or pending trademarks. As the objections raised by the registrar are removed, then the application is then published in the Indian Trade Marks Journal, with endorsements stating that it has been accepted or that it is being published before acceptance. Once it is published, any person can file a notice of opposition to registration within 3 months.

Acceptance or refusal of the trademark will be considered once the opposition proceedings have been completed.

Journal Publication

When the trademark application is accepted by the trademark registrar, the registered trademark is published in the Trademark Journal. All the trademarks that have been registered and accepted are published in the journal according to the class. within 90 days, anyone can oppose the trademark if the trademark is damaging their mark. They have the opportunity to object the trademark within 90 days of publishing. If there is no objection raised within 90 days of the publication, then the mark will be registered within 12 weeks time.

When the trademark is opposed by the 3rd party who’s mark has been damaged then a hearing will be called and both the parties have to appear before the court. The objection can be removed by evidence. Based on the decision of the court, the mark will be decided if rejected or accepted.

Duration of Trademark

• Trademark can be registered for the duration of 10 years. It can be renewed for a further period of 10 years on payment of the renewal fees. The trademark can be renewed by filling the form TM-R with transaction costs.

Costs for trademark transactions

• To file a new application (Form TM-A): For physical filing Rs-5000 & For E-filing Rs-4500
• To file a notice of opposition to oppose an application published in the Trade Marks Journal a (Form TM-O): For physical filing Rs 3000 & For E-filing Rs 2700
• For Renewal of a registered trademark (Form TM-R): For physical filing Rs-10,000 & For E-filing Rs-9000
• Surcharge for late renewal (Form –TM-R): For physical filing Rs- 5,000 Plus renewal fee & For E-filing Rs- 4,500 Plus renewal fee.
• Restoration of removed mark (Form TM-R): For physical filing Rs- 10000 Plus renewal fee & For E-filing Rs- 9000 Plus renewal fee.

Ways to register the trademark

Registration of a trademark can be done by two ways offline or online. Offline registration of the trademark can be done at one of the offices of the trademark register based on the jurisdiction. While online registration is called E-filing of a trademark. E-filing of a trademark application is a new service provided by the trademark office. Link for the same is attached http://www.ipindia.nic.in/e-gateways.htm#comprehensive-e-filing.

For registration of a trademark, go to the link and complete an electronic application form. Then providing the associated attachments and pay the necessary fees.

E-filing is beneficial and more useful than offline registration as it provides trademark application number immediately. It also provides online verification to assure error-free filing and obtain your filing date. It also speeds up the process. All the details can be saved in your PC and can see online history or track status of the applications filed by clicking “Status of filed application”.

Contact

Trade Marks Registry, Mumbai (head office)

Intellectual Property India,
Boudhik Sampada Bhavan, Antop Hill, S.M. Road, Mumbai-400037 Tel: + 022-24132735

(Jurisdiction: Maharashtra, Madhya Pradesh, and Goa)

Shri. O P Gupta, controller general of patents, designs and trademarks, Bhoudhik Sampada Bhavan, Near Antop Hill Head Post Office, S M Road, Antop Hill, Mumbai-400037,

Phone: 022-24132735, Fax:  022-24123322

Website: www.ipindia.nic.in

^[1] Section 9 and 11 of Trade Marks Act, 1999

^[2] Section 10, The Trade Marks Act,1999

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In this article, Ashwini Gehlot of Institute of Law, Nirma University Ahmedabad discusses whether a citizen domiciled outside Goa buy a land in Goa or not.

Background

Many proposals were made by the Goa government to restrict outsiders from purchasing land in Goa but till now nothing much had happened. Goans do not like outsiders buying properties in Goa and for this particular reason, they demanded special status for Goa to stop the encroachment of outsiders. But despite all the efforts, Goa didn’t get special status.

In 2011, The Goa law commission has decided to propose a ban on sale of agricultural land to non-Goans in a bid to boost farming activities in the state. The commission plans to submit a report to the government on the same.^[1] the whole idea behind this report is to make Goa green and free from outsiders interference or we can say that for saving the Goa land for Goans and to use the land for best economic and ecological purpose.

Similarly, in 2013 also fearing that the Goa population will be going to become minority till 2021 the chief minister of Goa led a delegation to delhi expressing the concern to the central government and demanding special laws for the same.

Many a times requests were made to the central government to give special status to the state of Goa but the Goan people always gets disappointments regarding the same.

Likewise in the year 2013 The central government rejected the demand for special status for the state of Goa by saying that Ban on ‘other’ Indians buying residencies, settling in Goa is opposed to all civilised rules of citizenship^[2].

Efforts are constantly made in this issue, Recently in April 2017,

The state-run Goa Coastal Zone Management Authority (GCZMA) is contemplating the possibility of imposing a complete ban on non-Goans buying land or properties in areas notified as Coastal Regulation Zone (CRZ). GCZMA in its recently held meeting focuses on the possibility of imposing the ban on allowing the sale of properties or land in CRZ notified areas to those who are not from Goa.^[3] But the irony is in spite of making all these efforts no particular laws regarding the same has made which ban non-domiciled Goans to buy land in Goa. Now here comes the main question, Who can buy land in Goa?

Who can buy land in Goa?

Indian citizen domiciled outside Goa but living in India

Every Indian citizen whether domiciled in Goa or outside Goa can buy a land in Goa, because restricting Indian citizens from buying a land in their own country will be a violation of their fundamental rights.  And the demand of ban on sale of land and residences to persons not of Goan origin, Such restrictions one can think to be imposed on foreigners but to say that another Indian citizen cannot buy land in Goa for residence and settlement is a complete negation of a citizen’s right under Article 19(e) of the Constitution of India. That provision is a part of fundamental rights which cannot be diluted. India has a single citizenship and a ban on outsiders buying residencies and settling in Goa is opposed to all civilised rules of citizenship.^[4] So, it can be said that we can not restrict non domiciled Goan or person living outside Goa but is a citizen of India from buying land in Goa. even the agricultural and plantation land can be purchased by Indian citizen only.

Foreigners and Indian citizens residing outside India

The law relating to buying and selling of property by an individual resident outside India is administered by the Foreign Exchange Management Act (FEMA), 1999.

The FEMA act, is different from other acts, it is to a greater degree a restrictive act, which means everything under this act is prohibited unless otherwise specifically permitted. FEMA directs and regulates the purchasing of properties by , Persons of Indian Origin (PIO), Non-Resident Indians (NRI) and foreign citizens.^[5]

The Goa government has clarified on Thursday that under the extant rules and regulations, an Indian citizen resident outside India may acquire immovable property in India other than agricultural land, plantation or a farm house. However, citizens of some countries like Sri Lanka,  Pakistan, Afghanistan, Bangladesh, China,  Nepal, Iran, or Bhutan have take take the prior permission of the Reserve Bank of India (RBI) before acquiring any land.^[6]

Who Is A Foreigner?

Section  2(w) of the FEMA  defines a person resident outside of India i.e. foreigner. Which says it includes persons resides outside India for employment Or person have intentions to resides outside India for undetermined or uncertain period Or for carrying any business outside India.

Consideration of a Person as a Foreigner

Sec 2(v) of FEMA- An individual or we can say a foreign national who is residing in India for more than 182 days during the course of the preceding financial year for carrying on business  or taking up employment or for any other purpose which shows his intention to stay for an undetermined period can acquire immovable property in India as he would be a “Person Resident of in India’’^[7] under sec 2(v) of  FEMA.

Can Foreigners Buy Property In India By Incorporating A Company?

It is unlawful for a foreigner/individual living outside India to purchase immovable property in India until he/she satisfies any of the above-expressed conditions to end up becoming a person residing in India. It is illicit to purchase property on a tourist visa in India because the tourist visa lapses in 180 days.

In spite of the fact that it is unlawful for a foreigner to purchase property in India, they get it by registering a company under Indian law in Goa. As Section 2 (v) (iii) of FEMA states that, any agency, branch or office in India claimed or controlled or owned by a man residing outside India is considered as a property belonging to a person who is resident of India. Subsequently, a non-native/foreigner can buy a non-agricultural property in India by forming an organization/company and enrolling it under Indian Law. Given that every single pertinent law, rules, regulation or direction are appropriately obeyed and a statement in the prescribed form is filed with the RBI within the 90 days from the date of such acquisition.

Exceptions

The law disallows foreigners from obtaining property in India, however, there are two exemptions expressed in Section 6 (5) of FEMA, 1999 that enable them to buy property in India. These are;

1. An individual living outside India can acquire/buy property in India if he/she possess/owned such property when he/she was living in India
2. Or the property is inherited or acquired by the individual living outside of India from a man/person who was resident in India.

Area 6 (5) additionally expresses that the individual living outside India can also own/possess, invest or transfer/exchange Indian currency or security given that it has been acquired from an inhabitant in India or purchased when he/she was himself/herself occupant of India.

However, the citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, or Bhutan, who are residing in India can only purchase immovable property in India with the prior permission of the RBI, who will consider the request in consultation with the Government of India.^[8]

Rules Governing Property Purchase in Goa by Non-Residents

Rules for NRIs and PIOs

• A person who is a citizen of India and resident outside India is considered as a NRI.
• A person whose grandfather or father has been a citizen of India or a person who at any time held an Indian passport is considered as a PIO.
• PIOs and NRIs are allowed to buy any number of commercial or residential properties in India. And for this they do not have to take any special permission from the RBI nor filing of documents is required with RBI.
• Under the general RBI authorization accessible to NRIs and PIOs, funds must be transmitted to India through normal banking channel or funds held in his FCNR (B) / NRE /NRO account. No consideration should be paid outside India.
• The PIO / NRI may repatriate the sale proceeds of immovable property in India procured by a method for internal settlement through normal banking channels or by debit to FCNR (B) / NRE account. The sum to be repatriated should not surpass the amount paid for the purchase of the immovable property. Repatriation of sale proceeds of residential property bought by PIO / NRI out of foreign exchange is limited to not more than two such properties. If any capital gain is credited to the NRO account from where the PIO / NRI may send back a sum up to USD 1 million for every financial year subject to tax compliance.^[9]

Rules for Foreign Nationals of Non-Indian Origin^[10]

• Foreign Nationals are allowed to rent/ lease property in India for a time up to 5 years and have no need for any special permission from the RBI.
• Foreign organizations/companies who have been allowed to open an office in India are also permitted to acquire any immovable property in India, which is essential for or incidental for conducting such activity. This stipulation is not accessible to entities which are allowed to open liaison offices in India.
• Despite the fact that RBI rules permit a foreign national who is a Resident of India (i.e. person who stays in India for more than 182 days in the previous financial year) to purchase property, the rule likewise states that “… the person concerned would have to get the approvals, and satisfy the prerequisite if any, prescribed by other authorities, for example the concerned State Government”. We DO NOT advise foreign nationals to make an effort to buy property in Goa via this route at the moment.

Buying Process^[11]

When you choose to purchase a specific property, the accompanying procedure is prescribed. Kindly, however, take note of that this procedure may contrast marginally from Developer to Developer, contingent upon the property chosen.

• On receipt of your inquiry we will seek out the developers/owners to re-affirm accessibility of the property and revert to you.
• In spite of the fact that the properties on our site are of well-respected developers/owners, simply as an issue of “Due Diligence” we prescribe that a legitimate examination is done by a local Goa lawyer selected by you. In situations where the project has just been lawfully checked and pre-approved by Banks, in that case, this step is discretionary.
• Once the Lawyer finishes the scrutiny (generally a time of 4-5 days) and gives his approval, you have to choose whether you/your delegate needs to make a site visit/meet the developer/owner.
• When you choose to buy the property a Booking/Token Amount is to be paid by you to the Seller/Developer to affirm your intention to purchase the property. An official receipt for the same is issued to you by the Seller/Developer affirming receipt of your installment and that the property has been held for you.
• Land in Goa’s Sourcing and Coordination Fees of 2% + Govt. Administration Tax is additionally to be paid by you as at this time.
• The subsequent stage is to sign the “Agreement of Sale” (for properties under development). In the event that a property is prepared for possession, this is not required and one can specifically sign the last “Sale Deed” against payment of the balance sum due for the purchase of the property. Sale Deeds must be enlisted with the Registrar’s office.
• At the time of signing the “Agreement of Sale”, most Developers expect you to pay all installments according to their Payment Schedule fell due for installment up to the present phase of completion of construction. Once signed, the “Agreement of Sale” ought to be registered with the concerned authority. Consequent payment is to be made in installment according to the developer’s/engineer’s payment plan for the remaining part of the construction. The “Sale Deed” is signed once development/construction is finished and you can claim your property or can take possession of your property.
• Stamp Duty and Registration charges for property in Goa is presently a sum of 4% of the property value. Generally, half of this is paid at the time of the Agreement of Sale and the remaining amount is at the time of Sale Deed.
• It would be best if the person purchasing the property personally present in Goa for signing both, the Agreement of Sale and the Sale dead and also for registration of the documents but if this is not possible then the person can appoint a Power of Attorney to do this work on person’s’ behalf.

Guidelines for Buying Property^[12]

NRI/PIO’s desirous of purchasing property in Goa must be aware of the following:

1. Must have a legitimate OCI/PIO card issued by the concerned authority.
2. Appoint a Goa lawyer to verify and scrutinize the documents.
3. Must stick to FEMA (Foreign Exchange Management Act) rules predominant at the time.
4. Guarantee there is Nil Encumbrance on the property.
5. All the NOC’s (No complaint Certificates) are arranged in order.
6. On the off chance that the property is inherited it must have a probated will.
7. On account of land, it must not be assigned as ‘Agricultural Land’
8. House/property tax should be fully paid till date.
9. On account of house/apartment, title reports or duplicates from the first owner are required.
10. Close scrutiny of, municipal permissions, penalty clauses, payment plan, construction plan, violation of set-backs etc is highly prescribed.
11. Explore the property before buying it to see whether there are any defects in the material or construction.
12. Finalize the Agreement of Sale or Sale deed upon payment of government duties and property price.
13. Take the possession of the property according to the Agreement of Sale or Sale Deed.

References

^[1] Murari Shetye,No agri land for non-Goans, TOI, june 2 ,2011.

^[2] Ban on ‘other’ Indians buying residencies, settling in Goa is opposed to all civilised rules of citizenship, Navhind Times, August 3, 2014.

^[3] NOW THE NON-GoaNS WILL NOT BE ABLE TO BUY THE PROPERTIES COMING UNDER CRZ IN Goa, Goa Prism,April 25, 2017.

^[4] Supra 2

^[5]  http://www.saffronart.com/real-estate/Guidelines.aspx [Accessed 5 Jul. 2017].

^[6] Prakash kamat,Goa cracks down on property acquisition for foreign nationals, the hindu, MAY 23, 2016.

^[7] Supra 6.

^[8] Supra 5

^[9] Buygoaproperty.com. (2017). Buying in Goa | Buying Real Estate in Goa | Rules for Buying Property in Goa. [online] Available at: http://www.buygoaproperty.com/buying-property-in-goa.php [Accessed 11 Jul. 2017].

^[10] Landingoa.com. (2017). Buying and Selling Residential/Commercial Properties in Goa. [online] Available at: http://www.landingoa.com/buyingproperty.php [Accessed 11 Jul. 2017].

^[11]  Buygoaproperty.com. (2017). Buying in Goa | Buying Real Estate in Goa | Rules for Buying Property in Goa. [online] Available at: http://www.buygoaproperty.com/buying-property-in-goa.php [Accessed 11 Jul. 2017].

^[12] Anon, (2017). Guidelines for NRI’s Buying/Selling Property in Goa | Bonafide Goa Homes. [online] Available at: http://bonafidegoahomes.com/nri-guidelines/ [Accessed 11 Jul. 2017].

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In this article, Aklovya Panwar discusses the impact of GST on the sale and purchase of cars and two wheelers.

Introduction to GST

On July 1, 2017, the historical tax regime of India has passed after 27 years of effort. This date plays the most important role for Indian economy as we are shifting from a continuously followed rigid system of indirect taxation to one tax system i.e., Goods and services tax (GST).

The main efforts for GST has been started in the year 2006 when the UPA government announced the introduction of GST upto 2010 but the new tax regime remained a dream. Then in 2011, the 115th constitutional amendment bill was presented in the Lok sabha for the imposition of GST but the bill was passed in 2014 in Lok sabha as the 122nd constitution bill.After the wait of 2 years, the bill got assent from  the Rajya sabha aswell and has been passed in 2016.^[1]

The GST regime is based on the principle of Consumption and destination principle. It applies to all supplies of goods / services (as against manufacture, sale or provision of service) made for a consideration except –

1. Exempted goods / services from the mutual list of CGST and SGST
2. Goods / services which are out of the scope of GST
3. Exchanges which are below from the already set threshold limits under GST. ^[2]

In this GST regime there is a benefit to the producer/retailer, if they have already paid the GST then it can be set forth against that payable on the supply of goods and services or they can claim it back through tax credit mechanism.^[3]

The reason why GST has to introduce is because Indirect Tax system is highly intricated in India because there are various types of taxes that are charged by the Central and State Governments on Goods and Services. These taxes incorporate Entertainment Tax for watching film, Value Added Tax (VAT) for acquiring goods and services by the purchaser. Different taxes are excise duties, Import Duties, Luxury Tax, Central Sales Tax, Entry tax, and Service Tax.^[4]Businessmen have to maintain accounts which need to obey with all the applicable laws.

Now GST comes as a ray of hope because it seems to be a promising proposal.

Benefits

GST regime is an optimistic approach for the consumers and the sellers because it seems capable of reducing the market prices of the goods.^5] This will solve the complex and multiple taxation systems which somehow lead to the waning of “Black money” and allow Free Flow of Goods and Services ^[6]

Impact of the news GST regime over buying and selling of vehicles

The Goods and Service Tax bill proposed for the abstraction of tax has been in talks for a significant time now. Four of these GST sections which incorporate the “Integrated GST Bill 2017, The GST (Compensation to States) Bill 2017, the Central GST Bill 2017 and the Union Territory GST Bill 2017” have been passed by the Rajya Sabha. There is no direct impact on the purchase and sell of cars and bikes.But the outcome seems to be favorable as there will be a single tax imposition instead of multiple taxes which will surely enhance clarity.

Goods and Services Tax impacts are yet indeterminate to numerous and different sectors are yet indistinct in the matter of how this will affect their business, sales and profits.The automotive area has likewise been in a predicament about the impacts of Goods and Services Tax (GST) and its effect on two and three wheelers, passenger and business vehicles. Prior automakers crosswise over India reported pre–GST rebates to clear stocks and begin once more from first July 2017.

This made some turmoil in the brains of purchasers in the matter of whether to buy vehicles pre-GST or sit tight for its execution and probably take advantage of lower prices. It is evaluated that little vehicle are not going to encounter a sensational change in cost yet luxury vehicles could get less expensive.

Two Wheelers

After the implementation of GST, pre-showroom prices of two wheelers will be same in India with a flat of 28% GST.

Two wheelers have been distributed into two groups under GST rate – engine capacity.

1. Less than 350cc
2. More than 350cc.

Ex-showroom prices of bikes less than 350cc are set to decrease while those above 350cc will see an increase in prices.

The table will show the impact of GST on two wheelers in detail.^[7]

Impact on Cars

Cars have been distributed into two groups under GST rate – engine capacity.

1. less than 1200 cc capacity-(Sub 4 Meter Petrol Cars)

                                           (Sub 4 Meter Diesel Cars)

2. Medium-Sized cars above 4 meters but less than 1500cc
3. Cars above 4 meters and 1500cc
4. SUV
5. Hybrids

The table will show the impact of price in detail:^[8]

Examples

Here’s are certain examples on how companies are reacting to the GST rollout.^[9]This will clear the concept that how GST is being implemented.

BMW^[10]

1. Decrease price ranging from Rs 70,000 on base end version of X1 to Rs 1.8 lakh on the top end of its sedan 7 series.
2. The hybrid model i8 prices will increase ranging Rs 4.8 lakh to Rs 2.28 crore.

Conclusion

GST is the greatest tax reform in India established on the idea of “one nation, one market, one tax”. The time for which the Indian government was sitting tight for 10 years has at last arrived. The single biggest indirect tax regime has kicked into constrain, destroying all the inter-state boundaries for trade. The GST rollout, with a solitary stroke, has changed over India into a unified market of 1.3 billion people’s. In a general sense, the $2.4-trillion economy is endeavoring to change itself by getting rid of the inner levy boundaries and subsuming central, state and local taxes into a brought together GST.The rollout has resurrected the hope of India’s fiscal reform program.Then again, there are fears of disruption, embedded in what’s perceived as a rushed transition which may not assist the interests of the country.^[11]GST is not an overnight thought as it took years of efforts to put this idea into motion.It has impacted various segments of the market but the automotive was not directly affected by it.Now, eyes are on the implementation of this idea which comes as a revolution for the Indian economy.

References

^[1]Cbec.gov.in. (2017). Available at: http://www.cbec.gov.in/resources//htdocs-cbec/gst/ovw-short.pdf;jsessionid=046C66AA6589AA00802C0A75389DC3C2 (Last visited 5 Jul. 2017).

^[2]Goods and services tax (2017),https://www.aces.gov.in/Documents/gst-dgtps-01012017.pdf (last visited Jul 5, 2017).

^[3]What is GST bill and how it impacts on common man, Civilserviceindia.com (2017), http://www.civilserviceindia.com/current-affairs/articles/what-is-GST-bill-and-how-it-impacts-on-common-man.html (last visited Jul 5, 2017).

^[4] Id.

^[5]Cbec.gov.in(2017),http://www.cbec.gov.in/resources//htdocs-cbec/gst/ovw-short.pdf;jsessionid=046C66AA6589AA00802C0A75389DC3C2 (last visited Jul 5, 2017).

^[6] Ajit OmGhyan & Ajit OmGhyan, GST Slabs Pdf Download -GST Rates Structure, www.Studydhaba.com (2017), https://www.studydhaba.com/gst-slabs-pdf-download-gst-rates-structure/ (last visited Jul 5, 2017).

^[7]Your complete guide to GST impact on the car and bike industry, Rushlane.com (2017), https://www.rushlane.com/gst-impact-on-the-car-and-bike-industry-12245753.html (last visited Jul 5, 2017).

^[8] Id.

^[9] GST impact: As vehicle prices fall by up to Rs 3 lakh, check out which all turned cheaper, Firstpost (2017), http://www.firstpost.com/business/gst-impact-as-vehicle-prices-fall-by-up-to-rs-3-lakh-check-out-which-all-turned-cheaper-3771409.html (last visited Jul 5, 2017).

^[10] Id.

^[11]Mercedes, BMW, Audi price cut up to INR 10 lakh – Thanks to GST, Rushlane.com (2017), https://www.rushlane.com/mercedes-bmw-audi-price-cut-gst-12243141.html (last visited Jul 5, 2017).

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In this article, Aklovya Panwar of Institute of Law Nirma University discusses the impact of GST on the education sector.

Introduction

Whenever there is a discussion over the growth and development of a nation, the first thing taken into consideration is the strength of the education sector of that nation. The literacy of the nation plays a major role in the stability of a nation. It is the foremost sector of an economy on which the future of that particular economy is based. Similarly, the government of India has also made it a fundamental right after passing the most ambitious act in the parliament in 2009 i.e., Right of Children to Free and Compulsory Education Act. Thus, it is a duty of the country to provide quality education at an inexpensive rate. Following this duty, the GST Council tried to put the education sector away from the GST regime similar as other services are exempted.

The education related services which has been exempted from the levy of taxes, in the new GST regime are the service provided by any educational organisation to its students, faculty and staff, which will include their “transportation, catering, mid-day meals scheme sponsored by the government, services related to admission or conduct of examination, cleaning, housekeeping, security of the educational institution up to higher secondary”. The notification says that services provided by pre-schools or higher secondary educational institutes, private or government, shall remain tax-free.

Services provided by the Indian Institutes of Management, as per the guidelines of the Central Government, to their students, by way of the following educational programs, except Executive Development Programme-

“Two-year full-time residential Post Graduate Programmes in Management for the Post Graduate Diploma in Management, to which admissions are made on the basis of Common Admission Test (CAT), conducted by Indian Institute of Management; Fellow program in Management; Five-year integrated program in Management”.

It also includes the services provided by “the National Skill Development Corporation set up by the Government of India; a Sector Skill Council approved by the National Skill Development Corporation;an assessment agency approved by the Sector Skill Council or the National Skill Development Corporation; a training partner approved by the National Skill Development Corporation or the Sector Skill Council in relation to –

• (a) the National Skill Development Programme implemented by the National Skill Development Corporation; or
• (b) a vocational skill development course under the National Skill Certification and Monetary Reward Scheme; or
• (c) any other Scheme implemented by the National Skill Development Corporation”.

Post GST Tax status of educational services

At the display, a Service charge is not forced on instructive administrations that are in the ‘Negative List’. The ‘Negative List’ comprises of Educational administrations that are ‘a part’ of the educational programs stipulated to secure a degree or a qualification perceived by the Law, part degree courses directed by schools, colleges or organizations to accomplish a qualification endorsed by Law. It also includes the Vocational training for expertise development.However, in 2016 government has eliminated education from the negative list still some of the parts treated the same way as before. In any case, coaching or training related services that sustain instructive necessities have been ordered independently from the educational category. As services relating to the educational exercises led by training and coaching foundations don’t prompt getting legitimately perceived qualifications, these would not be conceded tax relief.

Analyzing the concern areas

1. Higher Education and private institutions at stake

It is plainly apparent that fundamental education or the K-12 education segment will pick up from the GST strategy as it is authoritatively barred from the tax regime in the present situation. In any case, the condition connected in this manner can’t be disregarded. As indicated by the GST exemption classification for educational and training services, there is clear say of exclusion of GST just for administrations taking into account pre-school till higher secondary education.As universities and other advanced education organisations have not been specified in the exception list, we can expect that the taxes imposed on the administration’s rendered by them would be at 18%. Higher education in the private sector will turn out to be more expensive. Now,Competition for confirmations in government schools/universities/institutions will increase. There will be a 3 to 5% of the duty climb on the cost of services that will in the long run influence the ordinary citizens.

This is a matter of great concern because every individual is not able to get government college and as an alternative they have private institutions .Now,private institutions financial expenditure has raised due to the new tax regime.This a very heavy burden for the middle class families who are trying educate their children leaving no stones unturned.They are taking loans from bank, from families etc. and are in debt already.

Because in the event that we take cases of other nation like GREECE for example, forced a 23% Value added tax (VAT) on private educational foundations in 2015.”“It looked like a double win that would simultaneously please creditors and demonstrate the government’s commitment to helping the underprivileged. Obviously, it did not one or the other“, The Economist gave an account on October 30, 2015.Within months, reasonably priced private schools were compelled to close down. The individuals who endured as an outcome were the people belonging to the rich as well as middle and lower-salary groups.Private schools situated in working class areas charged reasonable educational cost expenses and pulled in working class parents who were  keen their children receive a decent education. The VAT likewise stressed an effectively overheated state education framework.

2.What about the training programs?

Before getting into the impact of GST over the coaching institute, first which has to be focused is the report of Asian Development Bank (ADB) of 2012 which says that around 83% of Children from High School consume their time in school, extra-curricular activities, and tuitions at the coaching centers. The ADB study, ‘Shadow Education: Private Supplementary Tutoring and Its Implications for Policy Makers in Asia,’ estimated the sector to be growing at over 15 per cent each year after excluding the small coaching centers.

This shows that the coaching centres are at the mainstream for children’s education and everyone from rich to lower middle-class families are approaching for these non-conventional ways of training and studying.Now,GST has raised the tax to 18% from 14% over these coaching centres. This will act as a burden for every child who pass out from 12th standard and though of coaching for IITs and other competitive examinations.

As said by R K Mishra, director, Institute of Public Enterprises (IPE) that non-regular courses of shorter length, preparing programs for working individuals are altogether taxed at 18%, which will influence organisations and furthermore course students. Takers for short-term, mid-career and non-conventional courses will increase immensely later on, because of career prerequisites and this will be a weight on them. Similarly, Y Lakshman Kumar, dean and director, Hyderabad Business School, GITAM University showed his concerns and said that the exception will push for most extreme proficiency with a more prominent scope. Nonetheless, coaching and training institute organisations are in enormous number conferring different skills to students and professionals. In this way, the legislature ought to contemplate over exempting or diminishing expense on these courses, and take after strict controls measures to crack down on substandard or unscrupulous institutes.

3.Cost of input supplies and events organised

Another area of worry for the education and training division is the taxability of educational occasions organized out by a foreign based entity in India.Accordingly, these foreign entities organize educational training events in India which are attended by individuals, participants from business entities and overseas participants as well and would become liable to GST. While these exclusions would support the instruction part, however, these training foundations would at present persevere through the GST load on certain information supplies, for example, leasing, media transmission, occasion related use, buy of products and so forth. These provisions would still be an info impose taken a toll for training foundations. This area looks forward to a GST exclusion in regard of the all expenditures brought about with the goal. that the input tax cost does not raise the key cost of the education resources..

Conclusion

The Government did not have any desire to radicalize the whole framework in the principal period of imposing GST and needed to have ‘a smooth arrival’. In any case, there may be plans for adjustments or changes in the offing. We can trust that given the significance of instruction in our general public, the Government will actualize proper measures to make education and training at all levels the minimum troubled scenario.As of now, the Indian government spends about four percent of its GDP on education, of which 50 percent is allocated to primary education, including educational institutions for higher education, private players as well as coaching institutions under the lower tax slabs, which will help improve the quality of education in the country, as well as ensure proximity and, hence, access.Moreover, seamless credit on input tax should be implemented across the supply chain, in order to bring down the total cost of education upon India’s journey into the GST era.

References

• http://www.business-standard.com/article/economy-policy/gst-will-raise-private-education-cost-by-3-even-at-lowest-tax-slab-of-5-117033000848_1.html

• http://www.business-standard.com/article/economy-policy/gst-to-make-higher-education-costlier-in-private-institutions-here-s-how-117040500242_1.html

• http://www.gstcounsellor.com/PDF/507923.pdf

• https://yourstory.com › 2017 › 05

• http://economictimes.indiatimes.com/articleshow/59047429.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

• http://mhrd.gov.in/sites/upload_files/mhrd/files/statistics/ESG2016_0.pdf

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In this article, Komal Shah does a comparative study between UK, Ireland and Indian laws on Board meetings for Private Limited Companies. 

As someone who has shifted across continents and back, I have been asked quite a few times about the differences in work experiences in India and abroad. So I picked up an area which is probably one of the most common areas company secretaries can come across, in their work lives, and decided to draw up a comparison.

Below I have taken a few aspects covering provisions relating to board meetings for private limited companies which might give an idea into the legislative intents / prevalent practices in India, Republic of Ireland (Ireland) and the UK.

Number of provisions

India

The Companies Act, 2013 has a whole Chapter XII dedicated to meetings of the board and its powers. Then there are the Companies (Meetings of the Board and its Powers) Rules 2014. Both of these do not deal with the minutes for the board meetings and so these are dealt with in Section 118 under Chapter VII of the Companies Act 2013 and Rule 25 of the Companies (Management and Administration) Rule 2014.

Besides these, in Table F to Schedule I which provides the model Articles of Association for a company limited by shares, articles 67 to 76 deal with the ‘proceedings of the Board’. If you digress from some of these and have your own provisions in the Articles, you have that much more to look into while ‘convening and conducting’ a board meeting.

In addition to the above, there is a Secretarial Standard I which needs to be adhered to, as required under Section 118 of the Companies Act 2013.

There are exemptions available to section 8 (non profit) companies and private companies which are small, start ups, IFSC private companies or dormant companies, but these are specific to relevant sections.

Ireland

Section 160 of the Companies Act 2014 deals with the meetings of the board of directors. Section 166 deals with the minutes of the proceedings of the directors. Other than these, there seem to be no other sections or rules specifically dedicated to the meetings of the board of directors of private companies. The Companies Act 2014 does go on to provide for general meetings of different types of companies though, such as public limited companies and designated activity companies and for specific situations such as mergers or winding up.

United Kingdom

There are no direct sections in the Companies Act 2006 dealing with the meetings of the board of directors. The only relevant sections are sections 248 and 249 which relate to the minutes of the directors’ meetings. Also, the articles 7-16 of the Companies (Model Articles) Regulations 2008 deal with the board of directors’ meetings. However, companies can have their own Articles of Association registered, which can have different provisions than the model articles.

Food for thought: So it seems a lot more needs to be looked into, if you are holding a private limited board meeting in India, than in Ireland or UK, assuming that none of the entities are regulated.

Frequency

India

Per section 173 of the Companies Act 2013, the first meeting of the board of directors should be held within 30 days of incorporation (60 days for a specified IFSC private company). Thereafter, at least 4 board meetings should be held in every year with a gap of not more than 120 days between two meetings. For section 8 (non profit) companies, one person companies, small companies, dormant companies and a start up private company, this rule is relaxed to holding one board meeting in each half of the year.

Ireland

Section 160(1) of the Companies Act, 2014 just says that the directors of a company may meet together for the dispatch of business, adjourn and otherwise regulate their meetings as they think fit. That’s it. No minimum number of meetings.

United Kingdom

No specific section in the Companies Act 2006 is dedicated exclusively to the meetings of the board of directors and therefore, there is no minimum number of meetings to be held. Article 8 of the model articles for a private company in fact, provides that the decision taken by the directors can be a unanimous decision, where all eligible directors indicate to each other, by any means, that they share a common view on the matter. This means that the entire business of the private limited company may be conducted without holding any meeting of the board at all, (no, not even accounts approval meeting), simply by all directors agreeing in writing, to a decision.

Food for thought: What could be the logic behind specifying the number of board meetings that need to be held in India, while the other two countries seem to leave it to the board’s judgment? Is there an anxiety that decisions may be taken outside of the corporate governance framework, without all directors’ inputs and that there may not be a mechanism to record dissent, if any, other than board meeting minutes? Possibly.

Mode of participation

India

According to Section 173(2) of the Companies Act 2013, the mode of participation can be in person or through video conferencing or any other audio visual means which are capable of recording proceedings. Telephone meetings or, to my mind, even Skype meetings are therefore not permitted. Further, video conferencing or other audio visual means cannot be used for approval of annual financial statements, board’s report, prospectus, amalgamation, merger, demerger, acquisition or takeover.

Ireland

Section 161 of the Companies Act 2014 permits the meeting of directors to be held by telephone, video or other electronic communication where each of the directors are able to speak to each of the others and be heard by each of the others. It also goes on to provide how the location of the meeting will be decided in case the directors are at different places.

United Kingdom

The participation conditions specified by Article 10 (1) of the model articles per the Companies (Model Articles) Regulations 2008 are (i) that the meeting should have been called and taken place in accordance with the articles and (ii) each of the directors should be able to communicate to the others any information or opinions they have on any particular item of business of the meeting. Article 10 (2) then states that in determining participation, it is irrelevant where any director is or how they communicate with each other.

Food for thought: The UK seems to be the most non specific here. The focus is entirely on the fact that each of the directors should be able to communicate the information or opinions to the others; the mode is irrelevant. So when challenged, there should be some kind of evidence that this communication was a) possible and b) done.

Also to note that only India imposes the need to have recordings of video conferencing or other audio visual means. The other two countries leave it to the practices set by each company.

Business to be conducted and decisions

India

Section 179(3) provides a list of powers which can only be exercised by the board through a resolution passed at a meeting i.e. there cannot be a circular resolution for these decisions. This list includes issue of securities, making calls for unpaid monies, authorizing buyback, approving financial statements, diversifying the business, approve amalgamation, merger, reconstruction or acquisition. There are also other specific businesses covered by different sections, which require a resolution of the board at its meeting, such as approval of related party transactions (Section 188).

Further, the Companies (Meetings of the Board and its powers) Amendment Rules, 2015 provide that making political contributions, appointment or removal of key managerial personnel and appointment of internal and secretarial auditors must also be carried out by resolutions at a board meeting.

The Secretarial Standard I also provides an illustrative list of items which should not be approved by a resolution by circulation.

There are no specific sections in the Companies Act 2013 which states how the decisions of the board shall be taken except that unanimous consent of the board is mandated for certain matters. However, regulation 68 of Table F of Schedule I states that the questions arising at the meeting of the board shall be decided by a majority of votes and in case of equality of votes, the chairperson (appreciate the gender neutrality here!) shall have a casting vote.

Ireland

There are no sections which specify matters which must be decided at a board meeting. Section 160(2) of the Companies Act 2014 states that questions arising at a meeting of the board shall be decided by a majority of votes and when there is an equality of votes, the chairperson shall have a casting vote.

United Kingdom

Again, no sections mandating matters which must be decided at a board meeting. As already discussed, articles 7 and 8 of the model articles provide that the decisions taken by the board can either be a majority decision at a meeting or a unanimous decision.

Food for thought: Though there are no specific regulations in Ireland or UK, from experience, I am aware that the companies do maintain ‘terms of reference’ for the board and committees, where matters which are of significant importance to the company’s business are reserved for the board. But this is entirely left to the board to decide and not mandated by legislation.

Record / Minutes

India

According to Section 118 of the Companies Act 2013 requires the minutes of the proceedings of the board of directors meetings to be prepared and signed and also kept in the books maintained for the purpose within a period of 30 days. The minute book must also be serially numbered.

Further, the Companies (Management and Administration) Rules 2014 specify that the minute books for members, board, committees and creditors must be maintained in distinct books. Each page of the minute book must be initialed or signed and last page must be dated and signed by chairman of that particular meeting or next board meeting.

Ireland

According to Section 166 of the Companies Act 2013 the company shall cause the minutes of appointments of officers made by its directors, names of directors present at each directors’ meeting and all resolutions and proceedings of directors’ meeting to be entered in the minute book kept for the purpose.

United Kingdom

 According to Section 248 of the Companies Act 2006, every company must cause the minutes of all proceedings of its meetings of directors to be recorded and the records must be kept for a period of 10 years from the date of the meeting.

All three countries penalize the non maintenance of minutes. In addition, India penalizes the tampering of minutes.

Food for thought: There are dedicated sections for maintenance of minutes in the companies acts of all three countries, which probably goes to show the importance of the minutes. The minutes assume all the more importance as admissible evidence of discussions and decisions where the entities are regulated.

So, to conclude…

On one hand, while the Indian attitude of micro managing things (specifying which pages should be initialed, which ones should be signed!) seems to be at play and there is a case for making the requirements less detailed, one has to note that this detailing might be coming from the misuse of non specific legislation in the past.

But given that the law today is this specific, there is also a case for setting up the system really meticulously and monitoring it periodically for compliance with the Indian law, or else something or the other is likely to turn out against the specification.

References

http://ebook.mca.gov.in/default.aspx

http://www.irishstatutebook.ie/eli/2014/act/38/enacted/en/html

http://www.legislation.gov.uk/ukpga/2006/46/contents

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In this article, Aklovya Panwar of Institute of Law Nirma University discusses Taxation Of Public Charitable Trust.

Introduction

In this modern time, we constantly heard of the term called “Philanthropy”. It is the act of helping others by way of private or voluntarily giving. The term has first entered the English language in the 17th century.^[1] Philanthropy serves many social purposes which include religious morality, humanitarianism, charity, etc. India also has a vast history in the concept of Philanthropy. Rig Veda directs to some of the collective social responsibilities in the form of charity as an obligation. It also guides about the conscience of a Human being.^[2]Nowadays, there are organisations who are doing these voluntary services like NGOs, Vos, etc. These organizations amalgamate funds for these services. The Government has various taxation laws for these organization to keep a check on them so that they do not misuse that fund for self-purpose. So, the author will highlight certain ingredients of the taxation of these Public Charitable organizations that how these organisations fits in the present tax structure?When they have to pay tax?When they are exempted from the taxation? etc.

What is Charity?

The French word “charité” which was derived from the Latin word “Caritas” give birth to the English word “charity” which naturally means preciousness, dearness and high price. It a voluntary help to the needy.It includes helping in the form of monetary terms or through services. ^[3]

What is a charitable organisation?

The organization which has an objective of charitable purpose and provides voluntarily help.They are non-profit based organization.It includes Trusts, foundations, unincorporated associations and in some jurisdictions specific types of companies.^[4]

The main aim of the Charitable organization is to help the public at large.The policies of these organizations are parallel to general public policies.they raise funds by the way of campaigning and other fund-raising programs.They generally function as a welfare organization.

Charitable purposes

Section 2(15) of the Income Tax Act,1961 defines “Charitable Purpose” which is somehow different from the normal assumption of the meaning of Charitable Purpose.

“It includes relief of the poor,education,medical relief,preservation of environment (including watersheds, forests and wildlife) ,preservation of monuments or places or objects of artistic or historic interest even if it is of the nature of trade, commerce or business[added by the Finance (No.2) Act, 2009] and the advancement of any other object of general public utility.”^[5]

According to this section, the above-mentioned points are the charitable purposes. If the organization, directly or indirectly, render any step which is of the nature of trade, commerce or business then it will not be considered under the work of the public charitable organization.They have to pay tax if any act of the nature of trade, commerce or business has been done.This provision was added by the Finance Act, 2008.^[6]

But Finance Act, 2010 provided some liberty by allowing the limit up to rupees 10 lac.This means that first provision will not be applied to a person if a number of the receipts from the activities is ten lakh rupees or less in the previous year.The commercial purpose of the trust should not exceed rupees 10 lakhs, if it does the trust ceases to be a charitable trust.^[7]

Exemption and application of tax

Section 11 of the Income-tax Act provides the aspects in which the property under a trust can be exempted from the tax.The property will be exempted if the trust has a registration with Commissioner of Income Tax by the application Form 10A under section 12AA, which includes the bona fide work for the religious and charitable purpose.Even before claiming the exemptions under section 11 & 12, the exemptions from the tax can be met if the Books are audited by the form 10B and if income exceeds Rs. 1,80,000 which includes corpus donations[U/S 12A(b)].^[8]

There is a standard deduction of 15 percent of “such income” derived from property held under trust wholly for charitable purposes. The expression ‘such income’ only means income accruing or arising in favor of the trust – CIT v. P. Krishna Warriar (1964) 53 ITR 176 (SC).^[9]

The exemption can be granted if 85 percent of income must be applied towards the approved objects of the Trust, but the corpus donations should be excluded from it.

Before moving further we must know what is “corpus donation” and what is its impact.Corpus donation is the Income generated from voluntary contributions from the donors where they give a particular direction that they shall form part of the corpus of the trust or institution, are generally referred to as “corpus donations”.Section 11(1)(d) of the Act exempt such donations.^[10]

Image below shows the Form No. 10A

Image below shows the Form No. 10B

It has to be noted that the words “applied to charitable purposes” includes – Purchase of capital assets – Revenue expenses – Donations to religious/charitable trust registered under section 12AA or section 10(23C)  – Repayment of loans taken for purchase of capital assets – Depreciation on capital assets.^[11]

In Director of Income-tax (Exemption) vs. Daulat Ram Education Society (2005) 278 ITR 260 (Del) the court held that if the trust has specified some purposes but they haven’t explained the plan of spending on such purposes the Assessing Officer cannot deny the claim of exemption u/s. 11(2).

What conditions are required to be fulfilled by a charitable or religious trust seeking exemption under Section 11?^[12]

1. The property held under trust or institution has to file a return of income if in some way they have contributed the taxable income during the year without giving effect to Sections 11 and 12.
2. There must be a separate account for the business if the trust is involved in some whether it is incidental or not.
3. As soon as the trust accumulate Capital gains, it must invest them into another capital asset in order to remain and apply for charitable purposes.There is no period of holding of the asset for availing such exemption by re-investment.Capital gains can be any during the year (whether short or long term).
4. Section 11(5) decides the mode of investment and depositing of money.The Income Tax Act provides a list of modes and forms permitted for the investments of the Charitable Trust. This section includes a subclause wherein it is mentioned that “any other form or mode of Investment or Deposit as may be prescribed”. Rule 17C specifies such prescribed other modes of investments.The funds of the trust should be invested or deposited in any one or more of modes or forms mentioned in section 11(5).To remain exempt from the tax u/s 11, this rule must be followed
5. The trust should not be created for the benefit of any particular religious community or caste.

NOTE: “a “previous year” is the financial year in question, and the year that follows is the “assessment year”. For example, for the financial year April 2010 to March 2011, the “previous year” is 2010-11, and the “assessment year” is 2011-12. Tax returns are filed in the assessment year, as per tax provisions relevant to the assessment year, for the income earned in the previous year”^[13]

Cases in which exemption will be forfeited

1. If any trust has both charitable and noncharitable activities and is falling under the proviso of section 2(15) where it is rendering any activity in the nature of trade, commerce, and business, in this case, whole trust will lose exemption u/s 11 & 12 and will be taxed as an unregistered trust in that specific year u/s 13(8) of the act.The tax will equal to the amount of fund collaborated more than the threshold limit.^[14]
2. If the trust exceeds the monetary limits will fall under the proviso to section 2(15) and the exemption u/s 11 will end. Thus, the proviso puts the stay on the controversies that may emerge from the speculation that profits and gains being incidental to the main object or not. ^[15]
3. If the amount invested by the trust is less than 85 Percent and out of the scope of section 11(5) r/w section 13(1) (d) [the funds of the trust should be invested or deposited in any one or more of mode or form described in this section], then it will be out of the scope of exemption.^[16]
4. If the funds invested by the trust were before March 1, 1983[other than section 11(5)], in such case they will forfeit exemption. But after that section 11(5) will continue to remain so invested or deposited after November 30, 1983.^[17]

Notifications

In this regard, Central Board of Direct Taxes (CBDT) has issued an explanatory circular vide no. 11/2008, dt. 19-12-2008, F.No. 134/34/2008- TPL.

On 27-05-2016,CBDT by circular No-21/2016 has notified that if the public charitable trust,with reference to the proviso of section 2(15) crosses the threshold limit in a specific year then they will have to pay tax in that year.The cancellation of registration is not mandatory as per section 13(8),other requirements have to be met for the cancellation of registration.It has been advised to the field officers to not cancel registration of the trust only on the basis of the proviso to section 2(15) because the introduction of new chapter XII –EB will make the trust liable to tax accreted income by getting hit by section 115TD(3).^[18]Cancellation will take place according to the section 12AA (3) and 12AA (4) after examining the applicability of these provisions.

Cases to understand the scenario

Trustees of Dr. Sheths Charitable Trusts v/s Seventh Income Tax Officer (1982) 2 ITD 649 (Mum-Trib), and also clarified by Circular No 72, dated 06-01-1972.

The case held that as per Section 11(1A), the income generated from capital gain is recognized as income derived from property held under trust, as such the provision of accumulation of income applied to capital gains too.As soon as the trust accumulate Capital gains arising u/s. 11(1A), they must invest them into another capital asset in order to remain and apply for charitable purposes.There is no period of holding of the asset for availing such exemption by re-investment.Capital gains can be any during the year (whether short or long term)

Whether entire exemption will be forfeited in case of violation of section 11(5)?

Section 11(5) decides the mode of investment and depositing of money.The Income Tax Act provides a list of modes and forms permitted for the investments of the Charitable Trust.

Whereas Section 13(1)(d) provides the case where the income is invested other than the modes or forms described in Section 11(5) and the sections 11 or 12 will not apply.

But there are various views whether the entire exemption will be forfeited or not in the case of violation of section 11(5).

Gurudayal Berila Charitable Trust v/s ITO, Fifth (1990) 34 ITD 489 (Mum)

ISSUE: Whether the entire exemption has to be forfeited or to the extent of violation committed. The court held that to the extent violated be brought to tax.

Director of IT (Exemptions) v/s sheth Mafatlal Gagalbhai Foundation Trust (2001) 249 ITR 533 (Bom.), it was held that tax will be levied at a maximum marginal rate only to the portion of violation u/s. 13(1) (d).

Director of IT (Exemptions) v/s Sheth Mafatlal Gagalbhai Foundation Trust (2002) 253 ITR 593 (Del), there was a violation of section 11(5) as different mode was used. As soon as the assessee came to know it, he had withdrawn the investment. The decision falls in the favor of assessee and exemption remains with the trust.

Asst. CIT v/s Sri Ramchandra Educational & Health Trust (2010)128 TTJ 408, the investment made was in contravention of section 11(5).It was held that under the circumstances, as the reasons were beyond the control of the assessee as they try to recover the amount but couldn’t able to thus forfeiture will not raise.

References

^[1]Rajkumar S. Adukia, HANDBOOK ON LAWS GOVERNING FORMATION AND ADMINISTRATION OF CHARITABLE ORGANISATIONS IN INDIA, 3-6 (2017),http://www.caaa.in/image/hb-charitable_org.pdf.

^[2] Id.

^[3] Id.

^[4] Id.

^[5] Id.

^[6]TAXATION OF CHARITABLE TRUSTS, 2-6 (2017), http://vipca.net/wp-content/uploads/2015/07/Taxation-of-Charitable-Trusts.pdf (last visited Jul 12, 2017).

^[7] Id.

^[8] Id.

^[9]TAXATION OF CHARITABLE TRUST AND AOP / BOI, 9-13 (2017), https://www.wirc-icai.org/material/TAXATION_CT_AOP_18062016_BirlaFInal.pdf (last visited Jul 12, 2017).

^[10]INCOME TAX DEPARTMENT,Assessment of Charitable Trusts and Institutions 47-49 (2017).

^[11] Supra 6.

^[12] Supra 10.

^[13]  Supra 6.

^[14] Supra 9.

^[15] Supra 6.

^[16] Supra 6.

^[17] Supra 9.

^[18] Supra 9.

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In this article, Karan Singh of JGLS discusses the legal requirements to set up a public or private cloud computing service business in India.

Introduction

Cloud Computing is the computing as a service over the internet. It is also referred as “the Cloud” in simple language. It is the delivery of on-demand computing resources- everything from applications to data centers over the internet on a pay for use basis. Cloud computing has elastic resources where user can scale up or down quickly and easily to meet demand. It gives metered service so you pay for what you use.^[1]

Mostly, everyone uses cloud computing these days. If use you an online service to send emails, edit documents, watch movies, or TV, listen to music, play games or store pictures or other files, then you are likely to use cloud computing. From small startups to MNCs, from government organisation to NGOs all are taking advantage of this technology for all sorts of reasons.

What can you do with the cloud:

• Create new apps and services
• Store, backup and recover data
• Host websites and blogs
• Stream audio and video
• Deliver software on demand
• Analyse data for patterns and make predictions.^[2]

Public cloud computing service

Public clouds are owned and operated by a 3rd party cloud service provider, which deliver their computing resources like servers and storage over the internet. Microsoft Azure is an example of a public cloud. Cloud provider manages and own all the hardware, software, and other supporting infrastructure. You just have the access these services and you can manage your account using a web browser.

Private Cloud Computing service

A private cloud is a service exclusively by a single business or organisation. A private cloud can be physically located on the company’s on site datacenter. Some companies also pay 3rd party service providers to host their private cloud. A private cloud is one in which the services and infrastructure are maintained on a private network.

Benefit of cloud computing

Cloud computing is a new technology to enhance the traditional way business to modern way business. But why is cloud computing so popular? Here are some common reasons why companies are opting cloud computing.

Cost

Cloud computing eliminates the expenses of buying hardware and software and setting up. Expenses for pen drive, hard drives to store can be saved as cloud computing does not need any hardware for storing files.

Speed

Cloud Computing is a service which is given on demand. So even vast amounts of computing resources can be supplied in minutes. This fast speed gives businesses a lot of flexibility and taking the pressure off capacity planning.

Global Scale

The benefit of cloud computing services includes the ability to scale elastically. This means that the service can be adjusted according to the user and the location. For example: more or less computing power, storage, when it’s needed and from the right geographic location.

Productivity

Data, when stored in the offices, can create problem which requires a lot of racking and stacking or may be difficulty in hardware setup, software patching and other time consuming chores. Cloud Consuming removes the need for many of these tasks, so that the teams can spend time on achieving more important goals.

Performance

Cloud Computing works for the users and upgradation is regularly done by the companies. The database is regularly upgraded to the latest generation of fast and efficient computing hardware. This offers several benefits over a single corporate database, including reduced network and greater economies of scale.^[3]

Disadvantages of Cloud Computing

Service is unavailable when the internet goes down: This can be a problem in emergency. Whe cloud computing only works when internet is there and will go down if internet goes down. Many service providers of cloud based technology are very reliable and can promise an exceptionally high percentage uptime But problems can occur if you are solely relied on the internet to access your files and the internet connection in your workplace or home suddenly malfunctions.

Shifting from one provider to another: This can be a huge problem and confusing. If you wish to change your provider then you have to transfer your files over to a different provider, that process may prove much more complicated than expected.

Reduced Customer control: Customer are bond by the service provider. Customers are at a risk of getting interference from the service provider. Many cloud computing service providers do not provide their details of infrastructures, which may be frustrating to customers that prefer to handle administration needs on their own.

Main Legal issues to be kept in mind while setting up a cloud computing service in India are

Copyright: Copyright can be a main legal issue when cloud computing service is set up in India. It is said that the copyright issues in the cloud is difficult to understand as the IPR laws vary from country to country. This makes the application of Copyright law difficult since the question of jurisdiction creates confusion in the cloud computing environment. Copyright infringement content can be uploaded on the cloud in thousands ways. To solve this problem, it should be ensured that every party involved is well aware of the rules or laws and rights of the country in which the data is stored.

Jurisdiction: The jurisdiction can be a legal issue as cloud computing works globally. The influence of cloud computing globally to conduct operations through computers has led to number of legislative issues. This can be over government or jurisdiction. The owner or customer is unaware of the location of the data which can be problematic as the location can tell the law of that country. But if we do not know the location then which law will be applied is unknown.^[4]

Data Portability: Data portability is that your data can be ported anywhere in the world.  It can be loosely described as the free flow of people’s personal information across the internet. Privacy is just a word in cloud computing. For example, anyone can import your social network connections, ability to reuse any information in hospitals, or any cafe.

Indemnity: The service provider does not have any responsibility for service interruptions or for any damages caused to the data. Customers can not look up to the cloud for any sort of indemnification. No measures are given for risk mitigation.

Status of Cloud Computing in India

In India there is no legislature or rule which exclusively deals with cloud computing or the legal issues that is mentioned above. And rules for cloud computing is difficult as it is globally same for everyone. Hence, the laws related to cloud computing is very limited in its applicability. But we can not say that there is no law exists in India for cloud computing. In India, there is a provision under Information Technology act, 2000. This Act deals with the issue of privacy in cloud computing from a distance.

Information Technology provides for the protection of privacy under section 72.  Section 72 of the Act states the Penalty for breach of confidentiality and privacy. If any person who, in pursuance of any of the powers conferred under this Act, rules or regulations has secured access to any electronic record, book, register, correspondence, information, document or other material without the consent of the person concerned discloses such electronic record, book, register, correspondence, information, document or other material to any other person shall be punished with imprisonment for a term which may extend to two years, or with fine which may extend to one lakh rupees, or with both.^[5]

So, if anyone wants to set up a cloud computing service then he/she has to keep in mind that breach of privacy can be a problem for you. You have to be very carefull for the privacy of the customer.

Section 80 of the Information Technology act, 2000 deals with the search and seizure of computer data on connected systems if there is reasonable justification to do so. Cyber law aim is to ensure that privacy is maintained and respected in the cloud. Measurements should be taken by the companies to maintain and safeguard all that is stored in the cloud. And if the service provider fails to provide the service and maintain the privacy then there should be legal action against them.^[6]

Conclusion

As of now, to set up cloud computing there is not much legal requirement. The service provider has to take care of the privacy of the customer and privacy should be the main issue of the cloud computing. Cloud industry is growing rapidly and competition is also increasing day by day. Cloud computing won’t succeed if the service provider do not create trust in the customers. We can not trust a service provider if he is likely to disclose or information and data. And without any legal support in India, user’s data is not safe at all. Government should make some rules and regulation for cloud computing in India this will help the companies and MNC’s to secure their data.^[7]

India needs more regulations and not only just in privacy. According to Information Technology Act, which only deals with privacy secures the privacy part of cloud computing but what about other parts like jurisdiction, Data portability, Copyright issues.

References

^[1] https://www.ibm.com/cloud-computing/learn-more/what-is-cloud-computing/

^[2] https://azure.microsoft.com/en-in/overview/what-is-cloud-computing/

^[3] https://azure.microsoft.com/en-in/overview/what-is-cloud-computing/

^[4] http://www.indialawjournal.org/archives/volume7/issue-1/article3.html

^[5] Section 72 of Information Technology Act, 2000

^[6]http://www.mondaq.com/india/x/279070/Data+Protection+Privacy/Privacy+Issues+In+Cloud+Computing+With+Reference+To+India

^[7]http://citeseerx.ist.psu.edu/viewdoc/download;jsessionid=891442B07F58C4D2B4827B9F09C6DD05?doi=10.1.1.403.2221&rep=rep1&type=pdf

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In this article, Ashwini Gehlot discusses the laws regulating the production of Wine in India.

Among BRICS nations, India has the least per capita consumption of wine: around 19 ml, against 8.1 liters in Russia, 2.26 liters in Brazil, 7.0 liters in South Africa, and 0.9 liters in China.

Indian Wine Industry

India is not customarily a wine drinking nation. Because of prior time of restriction in India and higher price as compared to spirits like brandy and whisky made in the country, the production and consumption of wine in India are negligible when compared with various other countries. The setting up of Champagne Indage’s plant in 1984 in the province of Maharashtra denoted the production of wine on an organized scale in India. commercial wine manufacturing is coming into existence in  the1980s in India.

The accompanying elements have added to India’s low wine consumption-

• Poor transport facilities
• Poor storage
• Stringent and backward government rules with various tax collection across different states
• Unfavorable standards for domestic marketing of wines aside from in a few States
• Lack of promotional activities for wine utilization in the nation

The Indian wine industry has been constantly evolving over the past 10 years. Wine is step by step turning into a part of urban Indian way of life. Since India joined the WTO, import taxes in the nation have been astoundingly lessened, accordingly empowering foreign exporters to exploit India’s huge consumer market. The wine market is bit by bit opening up as quantitative limitations are being lifted, import duties are being brought down and domestic regulations are being untangled.

The accompanying components are adding to the higher consumption of wine in India-

• Rising incomes of Indian populace
• Growth in the foreign tourist
• Exposure to new culture
• Changing demography
• Loosening of Government policies and regulations

Types Of Wines Available In India

There are fundamentally three sorts of wine available in India-

1. Premium Wines (Still wines): In this class, the Indian market is isolated principally into two noteworthy classifications – White and Red wines;
2. Sparkling Wines: This wine is for the most part considered to fall into the White wine classification by numerous consumers;
3. Fortified wines: This is not yet made or viewed as quality wines.

All the wines which are available in the above-mentioned categories are further divided into 3 categories-

• Domestic Indian Wine: This is the wine, which is manufactured from Indian grapes and packaged in India by the domestic wineries. ·
• Foreign Bulk Wine Bottled in India: A couple of huge domestic producers import bulk wine and pack it in India.
• Foreign Wine Bottled in birthplace: approximately 200 and above are currently available in this category and they are transported in by Importers, Domestic players, and Foreign players.

Production Of Wine In India

“India has 123, 000 acres of vineyards, of which only 1% are utilized for wine manufacturing. India‘s first winery was set up amid the 1980s and by 2000 there were only 6 working wineries. Manufacturing consequently expanded rapidly, cresting at approximately 13.0 million liters (1.4 million cases) in 2010, preceding dropping in 2011 and 2012.” 

The below mentioned 3 wine companies are presently manufacturing/producing wines in India-

• Chateau Indage Limited, Pune
• Sula Vineyards, Nasik
• Grover Vineyards Limited, Bangalore

There are no official production statistics, but state excise information with industry estimates give a genuinely dependable sign of recent manufacture/production levels.  Excise data of Sangli (Maharashtra) shows that production was 641,000 liters (71,200 cases) in the financial year 2010/11 and 233,000 liters (25,900 cases) in the financial year 2011/12. Excise data from Karnataka shows that the state manufactured 2.9 million liters (322,200 cases) during Indian fiscal year (April/March) 2010/2011 and 3.2 million liters (355,500 cases) during financial year 2011/12. According to Industry sources, the approximately total wine manufacturing is 11.5 million liters from 2,000 hectares of grapes in 2012.

Consumption Of Wine In India

The domestic wine utilization touched more than 10 million liters in 2007 and may go up to 15 million liters for the present year, from a negligible 1 million liters in 2001.

About 80% of the demand for wine comes from these major cities as mentioned below with their consumption pattern, namely – Mumbai (39%), New Delhi (23%), Kolkata, Goa  (9%), Chennai, Bangalore (9%) and Pune and the rest of India has just 20% consumption.  The total wine consumption in India is around 400,000 cases a year of which 85% are table wines and the remaining are the costly assortments. Out of the 400,000 cases, around 50,000 cases are foreign from different sources. Today, the utilization/consumption per head is about 0.0030 liter for each annum.

Duty Regime

Customs Duty / Excise Duty

• The excise duty on wine has been expanded from 100% to the most extreme reasonable rate of 150%.
• India rejected extra excise duty on imported alcohol, beer and wine following an objection by the European Union and the US in the World Trade Organization. So the customs duty has been waived on wine.
• The instruction/education cess applicable on the imports of wine has been rejected in 2007.

Local Taxes

• The Central Government has endorsed a most extreme state excise of 25% for wine in different states.
• In Kerala, the rate of Import expense for imported wine is Rs. 2 for every mass liter. · Maharashtra has expelled excise duty on wine.
• Haryana has lessened the excise duty for wine to Rs.20.50 liter from Rs.32.25 liter per proof liter. Furthermore, it has decreased the export duty to half for the domestic business.

Value Added Tax (VAT)

• Delhi – 20%, Maharashtra – 20%, Chandigarh – 4%, Haryana – 20%, Tamil Nadu – 53%, Karnataka – No VAT, Kerala – 12.5%

Foreign Direct Investment Policy

• The approach for distillation of liquor has been reported vide Press Note 4 (2006) as per this report, FDI up to 100% is allowed under the automatic route for brewing and distillation of liquor subject to licensing by the suitable authority.

Key Wine Importers

The most famous imported wine marks in India are from France, and French wines represent half of the aggregate imports in value terms. Italian wines are the second most noteworthy imported, trailed by Australia. 72,000 wine cases are transported in basically by Sansula, ITDC, E and J Gallo, Brindco and other private businesses. The number of wine merchants in India is developing at the rate of 30% with the list of importers expanding each year.

The following are the key wine importers in India

• Brindco Sales Ltd. (Delhi)
• Sonarys Co-Brands Pvt. Ltd. (Mumbai)
• International Global Tax (Delhi)
• Mohan Brothers RR (Delhi)
• Fairmacs Shipstores Pvt. Ltd. (Chennai)
• RR International (Delhi and Mumbai)
• Kiara Wines (Mumbai)
• Star X wines (Delhi)

Localisation of the Wine Industry

The following are the major wine producing regions in the country:

1. Sangli Region (Maharashtra)
2. Nashik Region (Maharashtra)

• The majority of the Indian wineries are situated in these two areas including the largest Sula Vineyards and Chateau Indage. There are 54 wineries in the country. Out of them, 52 wineries are in Maharashtra, incorporating 8 in Sangli, 28 wineries in Nasik, 9 in Pune, 2 in Buldhana, 3 in Solapur and 1 in Usmanabad. The Maharashtra Industrial Development Corporation has set up 2 Wine Parks in the State: Palus, close Sangli (53.70 Hectares) and Vinchur, close Nasik (151.36 Hectares).

3. Bangalore Region (Karnataka)- The third biggest wine maker of India, Grover Vineyards has its winery placed in this area.
4. Himachal Region (Himachal Pradesh)- Chateau Indage has planted Cabernet, merlot, and sauvignon blanc grape assortments in Kullu and Manali where it is wanting to get into manufacturing in three years.

Major Indian Wine Companies

Most of the wineries in India are situated in Nashik in  Maharashtra. Currently, India has around 60 wineries with an expected venture of about USD 60 million. The accompanying three wine companies are the real wine manufacturing/producing companies in India:

• Chateau Indage Limited, Pune
• Grover Vineyards Limited, Bangalore
• Sula Vineyards, Mumbai

The following are the other top Indian wine companies

• ND Wines
• Renaissance Wines
• Sankalp Wines
• Vinicola
• Flamingo Wines
• Mandala Valley
• Vintage Wines

Other Wineries

• Indo Grape Winery
• Girana Valley Vineyard
• Sahyadri Hills Vineyards and much more.

Licenses

Licensing procedure differ state by state; a few states disallow the sale of liquor, some prohibit the sale of liquor beverages and others have state-run restraining infrastructures that control the distribution of liquor. In general, distributors, importers, restaurants retailers and hotels must have a license to deal with liquor beverages. In a few states, licenses are further described to take into consideration things like room service sales of liquor. Licenses are ordinarily subject to yearly renewal fees. State permitting and distribution structures are depicted in the Table.

Brand/Label Registration

Distributors and importers are required to register or in some cases label the brand with the state excise department for showcasing the brand/label in the state. The state excise office charges a fixed registration expense, and the registration must be renewed each year. In a few states, importers are too required to mention the MRP(Maximum Retail Price) for the wine at the time of registration.

The state excise office, at the time of registration, gives guidelines and rules on specific labeling prerequisites for sale. State specific labeling guidelines may include:

• Available to be purchased in the state of xxxxxxx as it were’.
• Liquor Consumption is Injurious to Health’ in English
• Maximum Retail Price (MRP) Rs. xxx.xx only.

Transport Permits

Subsequent to accepting an order from a licensed purchaser/buyer, the licensed merchant/distributor applies for a transport license from the excise office. License and permits are normally issued after payment of sales charge (VAT), state excise tax, and other pertinent taxes.

The Food And Drug Administration (FDA) – Procedure For Obtaining A License To Operate.

“According to the new Food Safety Standards Act, wine goes under the food category. As there are worries over quality, we are intending to make licenses compulsory for wineries and wine retailers (shops),”

ANNEXURE A

General requirements for License to Operate (LTO)

1. Authenticated Accomplished Application for Authorization Form (Annex A-1)
2. Evidence of Registration
3. In the event of Single Proprietorship, legitimate Certificate of Business Name Registration with the Department of Trade and Industry.
4. On the off chance that Corporation or Partnership, legitimate Registration with Securities and Exchange Commission (SEC) and Articles of Incorporation or Partnership.
5. In case of Cooperative, legitimate Certificate from Cooperative Development Authorities and by laws
6. Verification of Occupancy – Office
7. Substantial authenticated Contract of Lease/Certificate of Occupancy/Sub-Lease.
8. Transfer Certificate of Title (TCT) if claimed and authenticated Certificate of Occupancy (if possessed by one of the incorporators).
9. Clearance from the Building/Condominium Administration permitting the utilization of the unit for business purposes – as fundamental.
10. Verification of Occupancy – Warehouse or Stockroom
11. Substantial authenticated Contract of Lease/Certificate of Occupancy/Sub-Lease.
12. Transfer Certificate of Title (TCT) if claimed and authenticated Certificate of Occupancy (if possessed by one of the incorporators).
13. Substantial legally approved Warehousing Agreement (Third Party Logistics)
14. Confirmation of Occupancy – Manufacturer Photocopy of Notarized substantial Contract of Lease of the building/space possessed (if space/bldg. is not claimed).
15. Photocopy of Notarized Fixed Asset and Operating Capital or Financial Statement, if material.
16. Area Site/Plan (Indicate location, size, sort of building, immediate environment).
17. Floor Plan/Lay out with measurement.
18. Conditional list of food items to be distributed or produced recognized in light of its arrangement (domestic or imported) and classification (Annex L) (Low/medium/high hazard).
19. A copy of Proposed Label (for the local producer)/test label of the item to be imported or a computerized picture of the document in an FDA-affirmed document type.

ANNEXURE B

Requirements for the Renewal of LTO

 Regular Renewal:

1. It should be done on or before the issuance date of the license.
2. Submit most recent Financial Statement appropriately signed by a CPA or most recent BIR.

Automatic Renewal:

1. The application is filed before the termination date of the permit/license;
2. The endorsed renewal fee is paid after filing of the application; and
3. A sworn statement demonstrating no change or variety at all in the establishment is attached to the application.

ANNEXURE D

Classification Of Processed Food Products

 A. Low-risk Category –

Food that is probably not going to contain pathogenic microorganisms and won’t typically bolster their development because of food characteristics or type. Wine is included in this category of food products.

ANNEXURE E

Initial/ Regular Renewal For Low-risk Category:

1. Totally filled up Assessment Slip
2. Application Letter with Product List for Locally produced items
3. A duplicate of substantial FDA License to Operate
4. Totally filled up Product List
5. One sample in business presentation OR an advanced/digital picture of the item and its packaging no less than 1024 x 768 pixels in estimate, and in an FDA-affirmed file type
6. For locally manufactured items/products-One real loose label connected in the documents OR a digital picture of the item and its bundling no less than 1024 x 768 pixels in measure, and in an FDA-affirmed file type
7. For imported items/products-
8. One genuine loose label attached in the reports/documents with a sticker showing the complete name and address of the Importer OR a digital image of the item and its packaging no less than 1024 x 768 pixels in size, and in an FDA-endorsed document sort.
9. Authenticated Affidavit of Undertaking with item list for imported items.

References

1. indialawoffices.com. (n.d.). Indian Wine Industry. [online] Available at: http://www.indialawoffices.com/ilo_pdf/industry-reports/wineindustry.pdf [Accessed 19 Jul. 2017].
2. Sood, D. (2012). Wine Market Update 2012. [online] Available at: https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Wine%20Market%20Update%202012_New%20Delhi_India_12-14-2012.pdf [Accessed 19 Jul. 2017].
3. Chandra, A. (2014). Investment required in wine. [online] Business-standard.com. Available at: http://www.business-standard.com/article/beyond-business/investment-required-in-wine-114072501471_1.html [Accessed 19 Jul. 2017].
4. indianwineacademy.com. (n.d.). COMPREHENSIVE STUDY OF THE INDIAN WINE MARKET. [online] Available at: http://www.indianwineacademy.com/comprehensive_study_iwm_reference_section.pdf [Accessed 19 Jul. 2017].
5. Pawar, T. (n.d.). Soon, licence system for wine makers – Times of India. [online] The Times of India. Available at: http://timesofindia.indiatimes.com/city/nashik/Soon-licence-system-for-wine-makers/articleshow/13787969.cms [Accessed 19 Jul. 2017].
6. fda.gov.ph. (n.d.). Requirements for License to Operate (LTO) – OPENING/ INITIAL. [online] Available at: http://www.fda.gov.ph/attachments/article/71149/Annex%20to%20Food%20AO%20-%20Annex%20A%20to%20H.pdf [Accessed 19 Jul. 2017].

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In this article, Himanshi Srivastava of Amity Law School, Lucknow discusses kinds of laws that the state of Andhra Pradesh should make to become a Blockchain capital of the World.

What is Blockchain Technology?

Blockchain Technology is a System Ledger which provides a security to transactions, agreements, and contracts etc. which need to be verified and stored. However, uniquely, instead of being kept in one place just like the a lot of ancient ledger book, the info is shared across a network of computers. This network will comprehend simply a few of users, or lots of and thousands of individuals. The ledger becomes an extended list of transactions that have taken place since the start of the network, obtaining larger over time.

How is it Used?

Blockchain runs on specialised computer software that operates behind the scenes, mechanically distributing data to the information as new transactions are created. Most individual users will not see a blockchain performing and this fast nature suggests that there’s very little to no window of your time for somebody to change a transaction before it’s recorded on to the ledger.

Why it is Secure?

A blockchain information consists of blocks and transactions. Blocks contain batches of transactions that are “hashed” and encoded. every block contains the hash of the block before it, that links the two and forms the chain. This method validates every block, all the approach back to the first, and is integral to the database’s security.

When a transaction takes place, its details are encrypted and a singular multiple-character dealing number is generated. Rather than alternative users within the blockchain having the ability to check the precise details of the transaction, this number is recorded within the ledger as a placeholder. All the users of the network are ready to see that the transaction has taken place however solely the parties concerned within the dealing will access and look at its details.

Why it is meant for development?

As an emerging technology, blockchain enthusiasts are hopeful it may be successive huge development disruptor. In providing a clear, instant and indisputable record of transactions, its potential to get rid of corruption and supply transparency and responsibility is one space of intrigue. However, there are still several queries around a way to apply the technology.

In What Sector will it be useful?

Blockchain might even be used for land tenure and property rights. Traditionally, governments keep records of who owns an exact piece of land or property, and therefore the owner might or might not have a bit of paper to prove it. However, government records may be lost or manipulated, or the govt might have issued a deed to some other person for a similar piece of land therefore two individuals might claim possession for the same plot. The blockchain, however, might operate as a neutral broker to work out who owns what; the chain might prove that parties are concerned and what they agreed to as the original contract would have been verified by a blockchain info, and hold on firmly on the ledger.

Blockchain as an idea of Decentralisation?

By design, the blockchain may be a decentralized technology. Anything that happens on it could be a function of the network as a whole. Some vital implications stem from this. By making a replacement way to verify transactions aspects of ancient commerce might become extra. Securities market trades become virtually coinciding on the blockchain, for example: or it might create kinds of record keeping, sort of a land register, totally public. And decentralization is already a reality.

A global network of computers uses blockchain technology to collectively manage the information that records Bitcoin transactions. That is, Bitcoin is managed by its network, and not any one central authority. Decentralization means that the network operates on a user-to-user (or peer-to-peer) basis. The types of mass collaboration this makes attainable are simply beginning to be investigated.

Who can use Blockchain Technology?

The blockchain probably cuts out the middleman for these kinds of transactions. Personal computing became accessible to the overall public with the invention of the Graphical User Interface (GUI), which took the shape of a “desktop”. Similarly, the foremost common graphical user interface devised for the blockchain are the supposed “wallet” applications, which individuals use to shop for things with Bitcoin, and store it together with different cryptocurrencies.

Transactions online are closely connected to the processes of identity verification. it is simple to imagine that wallet apps can rework within the returning years to incorporate different kinds of identity management.

Andhra Pradesh: Among few states to implement the Blockchain Technology in India.

Hyderabad, the capital of Telangana and de jure capital of Andhra Pradesh, are integrating blockchain technology into its government affairs. The 2 Indian states are following help from blockchain startups as they assess the technology for information security. Many alternative state governments among the country, like Karnataka, Gujarat, and Maharashtra, have additionally started exploring the appliance of blockchain technology for governance. State IT minister of Karnataka, Priyank Kharge, says Indian officers are presently evaluating international markets to visualize however the technology are often used in the general public and personal sectors:

“We have asked these startups to return back to United States with how blockchain is getting used outside the country and what policies are in place there.”

What legal Issues the State can Face?

With huge restrictive implications, blockchain applications have already raised several legal queries as they provide new capabilities to engage activities in ways that don’t match showing neatness into existing legal frameworks.

Here are simply a number of ways in which blockchain and its numerous apps are changing the legal landscape:

Cryptocurrencies as legal tender

Bitcoin, the world’s most recognizable digital currency, uses encryption techniques as to manage the generation of units of currency and verify the transfer of funds, operational severally of a financial organisation. It implies that this money has not passed through a bank or alternative financial institution, nor has it been screened by any bureau.

If you’ve got a significant transaction that’s normally needed to be reportable, it simply isn’t. This ends up in important challenges, principally regarding government regulators and current laws.

Money laundering and other illegal monetary transactions

Bitcoin’s blockchain has remained resilient to attack, and it supports a sturdy payment system. however, this doesn’t mean the people using this technology are always noble citizens.

Blockchain actions are automatic and fall outside of human legal proceeding, which means bonus funds might be anonymously spread mechanically into various accounts.

In 2013, regulative bodies answerable for preventing money crimes have introduced new rules to bring Bitcoin within the scope of its enforcement. Later that year, some twenty two Bitcoin firms and investors were unceremoniously subpoenaing by the New York Department of financial Services (NYDFS) culminating in federal agents move down the trade route (a dark market for the most part powered by Bitcoin).

Recently, lawmakers in West Virginia deemed it a law-breaking to use Bitcoin or other cryptocurrencies for concealment, with an update to the state’s anti-money laundering (AML) statutes. The law specifically created a definition for cryptocurrency that is recognized as a ‘monetary instrument’ in the state.

Regulating decentralized applications

In some cases, block chains are used to produce tokens that aren’t designed to be cash at all. for instance, programmable block chains like Ethereum let users create decentralized applications that have their own tokens.

“Distributed” and “decentralized” refer to the peer-to-peer aspect of the blockchain network;  there’s not one central information of the blocks. every node on the network will have a duplicate of the total ledger.  

Privacy laws

Blockchain, like every kind of ledger book, becomes the official record for trailing the history and validity of transactions and other data. That record is visible to all, even though individual components of the transactions are encrypted and not publicly visible. Here, the division of public and personal on a blockchain are particularly interesting.

For example, your passport or different identity data might be securely encrypted, but the proof of the validation could be used publicly on a blockchain to prove that you simply are you for functions of that dealings, without revealing the underlying private data.

But blockchains could raise challenges where financial establishments are forced to comply with bound privacy laws.

Legal ramifications of Blockchain records

In part, to its stringent encryption techniques, blockchains will have more legal bearing in court. A bill in Vermont passed that would make records verified through blockchain technology admissible as evidence in court.

Laws like this produce a sort of legal backing for blockchain-based information.

In Nevada, a bill has deemed smart contracts and blockchain signatures acceptable records beneath state law.

As blockchain ledgers and systems become a lot of common, their attainable use in cases as proof and discovery becomes more possible.This means lawyers will need to know such records exist as well how to handle that evidence as well as what specific information to request.

Smart contracts

Because blockchains will process transactions, not merely store information regarding transactions, they will functiona platform on that code will be executed and apps are often run. this can be mentioned as “smart contracts.” they need a logic designed into them that triggers an action if a predecessor event happens, while not requiring an extra intervention.

As such, simple contracts – and their reduction in transactional friction – are showing nice potential within the short term.

Property ownership

In several developing countries, wealth is made through ownership. sadly, one in every of the foremost difficult aspects is determining who owns an explicit piece of land. And disputes typically occur once corrupt governments or people take advantage of the under-educated.

Having a public blockchain ledger would allow for everyone to bear in mind of who owns that parcel of land, and it might build the exchange of ownership a lot of easier and a lot of equitable . This efficient proof of ownership would create a higher base for authentication and governments may fairly tax people and businesses.

Multi-signature transactions

Blockchain technology can accomplish official document by exploiting multi-signature transactions, that involve depositing funds to a virtual currency address to initiate a gaggle action between 3 parties, where 2 getting parties and a third-party ‘escrow’. Finishing or refunding the group action desires two of the three parties to sign the group action.

Laws control written agreement agents who assume physical management over assets don’t seem to be designed to accommodate this sort of group action. for example, Calif. defines written agreement using language like ‘delivers’ and ‘to be held’. Such laws could also be discrepant with transactions wherever nothing is physically delivered to or heldin written agreement.

Storage and data transfer

Other data could also be transferred or hold on via blockchain. for example, a blockchains redistributed verification may give for secure digital signatures. Identity data might be stored and verified via a blockchain ledger, and ensuing verified identities (remaining pseudonymous) may scale back fraud on peer-rating sites or give trust ratings for peer-to-peer marketplaces or disposal services.

Yet, such identity verifications raise privacy issues, together with whether or not a right to privacy would exist in such applications. Further, making huge data repositories raises knowledge breach issues. though cryptologic ledgers are wide seen as secure, if in person recognizable knowledge from elsewhere were exposed and related to blockchain knowledge, or if blockchain knowledge were aggregative and analysed, transactions might be tracked and compared even with a onymous ledger.

Conclusion

As this technology continues generating new possibilities for the approach we interact and exchange info, it brings forth difficult and complicated legal issues and pushes the boundaries of existing laws.

Blockchain technology is a subject of law – one thing that our laws will need to adapt to, even as they adapted to the web, new medical technology, or social media. Do these legal and regulatory challenges mean we shouldn’t be exploring the potential of Blockchain? not at all. The technology is already showing tremendous potential to require our business into the longer term. These are simply a number of the initial problems we must always be exploring in parallel to our exploration of the technology. Once, Blockchain becomes totally developed, we tend to won’t be able to merely plug into it and begin giving product. we are going to initial ought to explore all of the legal and regulatory implications of doing, This, as always, to make sure that we tend to shield our customers and ourselves against any potential mishaps.

So, it’s not a matter of not evolving with the days. It’s solely a matter of making certain that our evolution is completed with foresight, insight and a transparent plan of protection. regardless of the future of Blockchain holds for the State, we should conjointly make sure that we tend to shield our most worthy asset: our citizens.

References:

• https://thenextweb.com/worldofbanking/2017/05/15/7-interesting-laws-blockchain-apps-will-force-to-change/#.tnw_1xSFDOYc

• https://www.ethnews.com/india-looks-to-blockchain-for-e-governance
• https://blockgeeks.com/guides/what-is-blockchain-technology/
• https://www.theguardian.com/global-development-professionals-network/2017/jan/17/blockchain-digital-technology-development-money

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In this article, Jagriti Bharti of Amity Law School, Lucknow discusses the kinds of Raids a Restaurant or Eatery can expect.

With the globalisation of the whole country, India’s food trade system has also been globalised. It has initiated a transnational system for food production. India is passing through a strategic development phase when it comes to food and beverages. Indian food industry not only with its own home brands but also with the foreign brands is being taken to great heights of development. Indian food and beverage market are growing steadily having a fairly sophisticated market with enough restaurants in big cities of India like Delhi, Mumbai, Bengaluru, Chennai etc. Food franchise like KFC, Pizza Hut, McDonald’s, Starbucks Coffee, Dunkin’ Donuts, Domino’s Pizza, Subway, Costa Coffee, Burger King is among some of the famous foreign food franchise who has tightened their position in Indian food industry through their outlets in various cities of the country.

Active and fast pace lifestyle of the people has given a path to the development of the restaurant and eateries across the country. Thought they fulfil the purpose of serving hungry Indians who are willing to pay them their price, there are lots of eateries and restaurants who are not up to the mark in sanitation, hygiene and food quality. Their compromise in quality and hygiene can have a disastrous effect on the health of the consumers of their food. Several laws are made for these restaurants and eateries for maintenance of hygiene level and food quality but least of them is followed leading the government to take a step forward towards securing the safety of the public. And this step is the “surprise checks” (also known as “raids”) and audits of the hotels, restaurants, eateries to check their level of hygiene and food quality and ensure their public health.

“Week long raids in the Secunderabad Cantonment has exposed the unpalatable underbelly of the restaurant industry operating in the city. The exercise has now prompted a sea change in the Cantonment hotels management policy. The sanitation wing of the Cantonment board seized 6 installations including a sweetshop and a bakery. Officials found that all the kitchens had employees living in them and the kitchen repleted with the toilet. The surprise check was conducted after receiving complaints and will be continued until the food outlets will comply with hygiene norms^[1].”

Above stated incident was just an example of a “raid.” There are much more which have been either conducted or yet to be conducted wherever the restaurant staff and administration lay back from their duty. The safety and quality of the food served in the restaurants and eateries are governed under FSSAI (The Food Safety and Standards Authority of India) Act. It operates under the Health ministry and is required to regulate and monitor the manufacture, processing, distribution, sale, and import of food as to ensure the safety of food. The FSSAI has become really active after the “Maggi issue”. They are conducting a lot of surprise audits and raids frequently in various hotels and restaurants to keep the restaurants and food businesses of their toes and deliver what is expected “quality”.

The provisions of FSSAI Act under which raids can be conducted of restaurants and eateries are:

1. Running Food Business Without License and Registration

As per Section 31 of the Food Safety and Standards Act, 2006, no person can commence or carry food business without a license. Whosoever carries food business without obtaining required licence will be liable to imprisonment for a term which may extend to 6 months and also a fine which may extend to five lakh rupees (Section 63).

Running food business (including restaurants and eateries) without a proper licence is illegal and this may attract raids from the food authority in order to find out whether the specific food business is legal or illegal. Restaurants will be required to show licence of their business whose inability to produce will attract the said punishment. [Getting FSSAI license for the restaurants].

NOTE: For a restaurant to sell liquor on its premises, it needs to get licensed from the State Excise Commissioner without which selling liquor is illegal. That restaurant can be raided and can even order for its closure.

2. Selling food, not of nature, substance or quality demanded

Raid can be conducted in any restaurant or eatery if they sell food to the purchaser which is,

• Not in compliance with the provision of the FSSAI Act or,
• Regulations made under this Act or,
• Nature or substance or quality demanded by the purchaser’

And the concerned person will be liable to a penalty not exceeding five lakh rupees^[2]. Noncompliance of this Section by any person who, if, covered under Section 31 (2) will be liable to a penalty not exceeding 25,000 rupees.

Case: This case is of Delhi’s eateries serving low-quality food. It was informed to the Delhi High Court by the FSSAI that various food samples collected from three different popular eateries in the capital have been found unsafe for consumption. They were:

• KFC at Scindia House in Connaught Place: Sample collected was ‘Rizo Rice’ which contained artificial colour.
• Sagar Ratna restaurant in Guru Teg Bahadur Nagar: Rice sample collected for testing was found to be unsafe.
• Bikanerwala restaurant at ITL Tower in Netaji Subhash Place: Samples of fruit and vegetable chutney was found to be contaminated with artificial colours.

3. Selling food that contains external or inappropriate matter

Section 54 of the FSSAI Act states that any person who sells, stores, distributes or imports food which contains inappropriate or extraneous matter shall be liable to a penalty which may extend to one lakh rupees. Raids can be conducted by the concerned authority if complaint registered against any eateries or restaurant regarding this matter.

Case: There was a case of Mother Diary in which media agencies reported that he detergent and frozen fat was found by the Kolkata based Central Laboratory during re-tests of milk samples collected by the district Food and Drug Administration.

4. Keeping the kitchen dirty and unhygienic

Any restaurant owner who keeps the manufacturing area of food or process any article of food in an unhygienic or unsanitary condition will be liable to a penalty which may extend to one lakh rupees (Section 56) and this noncompliance of the owner can also raids to be conducted.

Case: The authorities warned Central Province Club of Nagpur of cancellation of their food licence due to faults like an extremely unhygienic kitchen, no pest control, unclean water tank etc. found during an inspection by the Food safety officer and which was not permissible under the FSSAI Act. [FSSAI guidelines to be followed by all the restaurants].

5. Accidents including consumer’s injury or death

According to Section 59, if any restaurant owner found guilty of selling any food item which caused either death or injury to the consumer then he will be liable a penalty of rupees five lakh in case of death and rupees 3 lakh in case of injury occurred to the consumer. If this has happened in any restaurant then the owner of the concerned restaurant may face the wrath of the food safety officials during raids.

There are also some other laws under which raids can be conducted in the restaurant and eateries

1. Income Tax Act, 1961

Section 14 of the Income Tax Act provides 5 heads of income i.e. Salaries, income from house property, profits and gains of business and profession, capital gains and income from other sources. If a person’s income falls in any of these heads, he will be liable to pay income tax as per the provisions of this Act. Owning and operating a restaurant, hotel, eatery or other food business is a kind of business and hence the restaurant owner has to pay the income tax on the income he has earned in the previous year from his business under the head “Profits and gains from business and profession” evading which will make him liable to face penal consequences.

Despite the laws made under the Act, people tend to evade payment of tax by not disclosing their income and assets. But the government had a smart solution to this. It launched “Income Declaration Scheme” in 2016 in order to combat the problem of tax evasion. Under this scheme every person has to declare their income and wealth to the government till 30 September 2016 failing which he will face search and seizures from the Income Tax officials.

Case: The Income Tax department has left no stone unturned in a bid to make “IDS” a success. It conducted around 100 raids in eateries in Ahmedabad, New Delhi and Kolkata. In Mumbai alone, around 50 restaurants and eateries were raided and were asked to declare their income under Income Declaration Scheme. Small businesses and roadside eateries also had to face raids from the IT officers.^[3]

2. Prevention of Food Adulteration Act, 1954

Under Section 7 of the Act, no restaurant can sell food which is,

• Adulterated^[4]
• Misbranded
• In noncompliance of the conditions mentioned in the license for selling that food
• For the time being prohibited by the Food (Health) Authority in the interest of public health.
• In contravention of the Act or the rules made under this.

Violation of Section 7 may lead the restaurant owner to face search and seizure conducted by the Food inspector under Section 10 of the Act. A food inspector may enter the places of manufacture and storage of food items of a restaurant or eatery under question and conduct raid. He may collect food samples and send it to food analyst for analysis.

CONCLUSION

Owning a business like a restaurant or an eatery needs a bundle of licences from different Acts of State as well as Central and has to abide by the provisions and rules mentioned therein, violation or noncompliance of which can really trouble their business through penalties and raids conducted by the food authorities who can even pass an order of its closure. So, before starting a food business, one needs to be very alert and careful about the laws related to it.

^[1]http://www.thehindu.com/news/cities/Hyderabad/Unpalatable-underbelly-of-restaurant-industry/article16084834.ece [19 July, 2017 at 12:15 PM]

^[2] Section 50 of FSSAI Act, 2006

^[3]http://economictimes.indiatimes.com/news/economy/policy/income-tax-department-raids-roadside-eateries-small-businesses-to-make-declaration-scheme-a-success/articleshow/54454245.cms [19 July, 05:25 PM]

^[4] Section 2 (ia) of Prevention of Food Adulteration Act, 1954

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In this article, Jagriti Bharti of Amity Law School, Lucknow discusses How can I recover my money back if someone else misused my Debit Card details.

Introduction

To make life easier technology was developed and it indeed fulfilled the purpose. It covers different aspects of our day to day life without which it would have been nearly impossible to survive. Nowadays, part and parcel of our life is dependant on technology and banking system has not remained untouched from this.

Earlier, banking transactions was only limited to transactions which were physical in nature i.e. through card, ATM, POS, direct withdrawal of cash from bank etc. But gradual development in technology of banking system made it more electronic in nature; resulting in transaction not only limited to face to face transactions but also online transactions i.e. transactions occurring over internet.

Kinds of Electronic Banking Transaction

Broadly, the electronic banking transactions can be divided into two categories:

1. Remote/online payment transactions (payments that do not require physical payment instruments to be presented at the time of the transactions). E.g. internet banking, mobile banking, Prepaid Payment Instrument (PPI), Card Not Present (CNP) transactions.
2. Face to Face/Payment Proximity Transaction (payments that require physical payment instruments to be presented at the time of the transactions). E.g. card or mobile phone to be presented at the time of the transactions, ATM, POS etc.

Debit Card Frauds

Regardless of the facilities provided for safe banking transactions, frauds do occur while using electronic banking system. One of them is transaction through Debit Cards. It is a payment card that deducts money directly from the consumer’s bank account on the account of purchase made by the consumer. It has dual function:

• Withdrawing money from the bank account.
• Paying for the purchases made by the consumer.

Debit card works using details provided on the card (which is directly linked to consumer’s bank account details) and PIN. Misusing debit card details leads to frauds. Debit card frauds occurs when a fraudster get access to any person’s card details as well as PIN and make unauthorised transactions from that person’s account leading to loss of his hard earned money. A debit card can be misused in three ways namely:

• By making unauthorised cash withdrawal from a consumer’s bank account.
• By online transfer of cash from consumer’s bank account to fraudster’s bank account.
• By making online purchases through consumer’s debit card.

Now the question arises, how can a person who has become victim of debit card frauds get back his money ? What are  those legal procedures which needs to be followed by the victim in order to get back his money? 

Before proceeding to the legal procedures, let’s focus on some points which should be taken immediate care of  when someone misuses a person’s debit card details:

• First of all contact your bank and get your debit card blocked.
• If the card has been misused for online transactions just after you made some online transactions through your device then run a good anti virus scanner through your device in order to eradicate any further chances of your card details getting accessed by the fraudsters.
• Change the PIN and other security details of your card.

RBI guidelines on Unauthorised Electronic Banking Transactions

Now, moving further to the legal procedures which needs to be adopted by the victim in case of Debit Card frauds in order to get his money back, RBI has prescribed certain guidelines via its Circular DBR.No.Leg.BC.78/09.07.005/2017-18 dated July 6, 2017 titled “Customer Protection – Limiting Liability of Customers in Unauthorised Electronic Banking Transactions.” The Circular suggests the extent to which the customer has chances to get his money back from the bank which he has lost due to unauthorised transaction. The sooner a customer report about unauthorised transaction to the bank the more chances he has to get his money back.

Liability of a customer in case of an unauthorised transaction

 As per the circular, there can be two kinds of liabilities of a customer:

• Zero Liability of a Customer

A customer’s entitlement to zero liability shall arise where the unauthorised transaction occurs in the following events:

1. Contributory fraud/ negligence/ deficiency on the part of the bank (irrespective of whether or not the transaction is reported by the customer).
2. Third party breach where the deficiency lies neither with the bank nor with the customer but lies elsewhere in the system, and the customer notifies the bank within three working days of receiving the communication from the bank regarding the unauthorised transaction.

• Limited Liability of a Customer

A customer shall be liable for the loss occurring due to unauthorised transactions in the following cases:

1. In cases where the loss is due to negligence by a customer, such as where he has shared the payment credentials, the customer will bear the entire loss until he reports the unauthorised transaction to the bank. Any loss occurring after the reporting of the unauthorised transaction shall be borne by the bank.
2. In cases where the responsibility for the unauthorised electronic banking transaction lies neither with the bank nor with the customer, but lies elsewhere in the system and when there is a delay (of four to seven working days after receiving the communication from the bank) on the part of the customer in notifying the bank of such a transaction, the per transaction liability of the customer shall be limited to the transaction value or the amount mentioned in Table 1, whichever is lower.

TABLE 1: MAXIMUM LIABILITY OF A CUSTOMER

If the delay is beyond 7 working days, the customer’s liability shall be determined as per Bank’s Board approved policy. Overall liability of a customer in third party breaches, where deficiency lies neither with the bank nor with the customer but lies elsewhere in the system is summarized in the Table 2.

TABLE 2: SUMMARY OF CUSTOMER’S LIABILITY

Duties of Bank in case of reporting of unauthorised transactions by customers

The Circular further states the duties of the bank towards its customers on reporting of unauthorised transactions by customers to the banks:

• It is the duty of the bank to ask their customers to register themselves mandatorily for SMS alerts and email alerts for electronic banking transactions and it should enable the customers to instantly respond by “Reply” to the SMS or email alerts.
• The customer must be advised to notify the bank about any unauthorised transactions from their bank account at the earliest to reduce the risk of loss occurring through the transaction.
• For reporting unauthorised transactions or loss of cards, banks should provide their customers with 24*7 access through multiple channels (like via website, email, SMS, phone banking, toll free helpline etc).
• The fraud reporting system should ensure that immediate reply should be sent to the customer acknowledging their complaint alongwith registered complaint number.
• Banks must record the time and date of customer’s message in order to determine the extent of customer’s liability.
• Banks should take immediate actions on the receipt of report of unauthorized transaction by the customer to prevent further unauthorised transactions in the account.

How to get money back if the account has been hacked and debit card details have been misused?

If your money has been lost due to online purchase of any goods from your debit card which is not done by you but someone else, you will definitely want your money back. This situation can arise when your system gets hacked and fraudsters get access to your card details and PIN.

Whenever a transaction is made from a customer’s account, it is the the duty of the bank to provide the details of the transaction to the customer through SMS or email alerts. So, when the fraudster will make transaction from your account then also you will get alert. This SMS or email provides you the basic transaction details which is done from your account. Watch out the name of the gateway which is used in the transaction while purchasing the goods by fraudster. Suppose it is eBay then contact to eBay customer care and alert them that the transaction has not been done by you. They may ask you to prove your identity.

Once they get convinced that the transaction was fraudulent, the will block the transaction and you will get your money back. But this needs to be done as soon as possible because once the goods get delivered nothing can be done by the company to refund your amount. Normally it takes 24 hours to deliver the goods to the prescribed address.

Conclusion

Whether you have lost your money due to fraudulent:

• Cash withdrawal
• Online transfer of cash
• Online transaction to purchase goods
• Hacking of card details

Only your promptness in registering complain can give you your money back.

References

• http://blogs.quickheal.com/how-to-recover-your-money-if-your-bank-account-is-hacked-or-your-card-details-are-stolen/
• http://www.investopedia.com/articles/pf/09/debit-card-fraud-at-risk.asp
• investopedia.com/terms/d/debitcard.asp
• https://rbidocs.rbi.org.in/rdocs/notification/PDFs/NOTI15D620D2C4D2CA4A33AABC928CA6204B19.PDF

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In this article, Alric Tirkey of Institute of Law, Nirma University discusses whether entering into a prenuptial agreement is advantageous or not?

Prenuptial Agreement

In a country like India where prenuptial agreement which is also known as antenuptial agreement, or premarital agreement is neither legal nor valid under the marriage law in India because in India marriage is not considered as a contract between husband and wife on the other hand according to Indian culture marriage is considered as sacred religious bond between husband and wife and prenuptial agreement between spouse do not accepted by the society. However, in India prenuptial agreement are governed by the Indian contract act 1872.

Prenuptial agreement is a written agreement between husband and wife who will about to married in which the contract defining themselves about their respective rights, duties, and responsibilities in the event their marriage terminates by death of any spouse, annulment, separation, or divorce. In this agreement, the both the parties agrees to give an equal and equitable division of property, support spouse or other rights they will entitled under the law.

Objective

Although In India all the matrimonial laws of the country have the provisions for wife’s maintenance and alimony under the Hindu Marriage Act in which either party can claim it. at the time of divorce the amount of maintenance will always depend upon the partner’s income, property and other assets. So it might have helped the couples who are fighting legal battle, had they declared their assets in the very beginning, reviewed their financial positions and agreed to a mutually acceptable division of wealth with the help of the prenuptial agreement. This is the primary reason behind drawing up a prenuptial agreement in which both the parties have the fair idea about what to give and what to receive at the time of divorce. In spite of lacking legal sanctity under Indian marital laws, a prenuptial agreement still be treated as a valid contract if a person and his/ her spouse consent to go by its terms and conditions of the agreement. ^[1]

Condition

Following are the condition for the prenuptial agreement^[2]

1. The prenuptial Agreement between parties should be fair, and duly acknowledged.
2. The prenuptial Agreement should have attorney certification from both parties as well.
3. The prenuptial Agreement should contain clause stating that if any provision of the agreement is invalidated, the rest of the agreement still remains in effect.
4. Prenuptial agreement there should be list attached which is showing each spouse’s assets and liabilities.
5. The prenuptial Agreement should have all the clauses of agreements arrived at between the

prospective spouses.

6. The prenuptial Agreement may also contain the necessary history of proposed alliance.
7. The prenuptial Agreement should be reviewed by separate lawyers and duly certified by them.
8. The prenuptial Agreement should be setting out each party’s assets, debts, and property rights before the marriage, settling issues of division of property and of spousal support in the event of marriage breakdown.

Important provisions which a prenuptial agreement should contain^[3]

The following are the key provisions that must be stated by both the parties in the prenuptial agreement:

• Disclosure of assets and liabilities
• Financial or monetary state
• Ownership of property or real estate
• Estate planning
• Alimony, spousal support or maintenance and child custody & maintenance
• Financial state of business, partnership rights in business
• Monetary savings
• Life insurance, medical insurance, claims
• Credit card limits, debts, spending, payments
• Financial investments
• Management of bank accounts or joint accounts
• Management of household expenses, bills, etc
• Retirement benefits and accounts
• Division of property
• Gifts in the form of jewellery, engagement ring, precious bands, art, etc

Form Needed

This form includes the following key provisions:^[4]

• Separate Property:- The agreement will allow the parties to set out the property being brought into the marriage that should remain separate in the event of death or divorce. The agreement will enable both the parties to set out the property being brought into the marriage that should be separated at the time of divorce or death of the any
• Shared Property:- identifying the property that will be shared between both the parties.
• Division of Property:- set out the way in which how all the property will be going to divided at the time of divorce or death of any of the spouse.
• Disclosure of Assets and Liabilities:- Gives the opportunity to the couple defining each party’s assets and liability coming into the marriage and this is consider as important provision as failure of this provision lead to invalidate the agreement between parties.
• Alimony, Support and Maintenance
• Estate Planning/Wills: every couple should have acknowledged about the estate and identify what should be included (every couple should have comprehensive estate plan).
• Additional Clauses: Provides room for the parties to add additional provisions that they may find important.

Advantages of the prenuptial agreement ^[5]

1. A prenuptial agreement between couple going to married can protect the inheritance rights of children and grandchildren from a previous marriage.
2. If any of the spouse own any business or professional practice, a prenuptial agreement between couple can protect that interest so that business or practice did not divided and subject to the control or involvement of your former spouse upon divorce.
3. If one spouse having more debt than the other spouse with help of prenuptial agreement which can protect the debt-free spouse from having to assume the obligations of the other.
4. If any of the spouse want to give up a lucrative career, the agreement can ensure that you will be compensated for that sacrifice if the marriage does not last.
5. A prenuptial agreement focus more on the financial aspect of the marriage which cover any of the details of decision making and responsibility sharing to which each party agrees in advance.
6. A prenuptial agreement can limit the amount of spousal support which will have to pay at the time of divorce.

Disadvantage of the prenuptial agreement^[6]

• Deciding to go for an antenuptial agreement is a very difficult and complex step for both the parties.
• The agreement implies that the couples do not envision the marriage did not last forever.
• The agreement can adversely impact life of both the parties post marriage.
• The agreement can enhance the importance of money than the thought of living together for both the parties.
• The agreement can adversely impact the lifestyle of both the parties.

Provisions in a prenuptial agreement that can be overruled by the courts^[7]

• Agreements that promote or encourage divorce/separation.
• Mention of spousal waivers
• Waivers of counsel fees, temporary alimony and permanent alimony
• Agreements that do not support child custody, child support and maintenance
• Regulation of conduct during marriage
• Agreements that mention religious upbringing of children
• Enforceability of no child provisions
• Limiting the grounds for divorce
• Agreement comprising of provisions requiring the spouses to marry
• Severability

References

^[1] https://blog.ipleaders.in

^[2]  http://www.legalserviceindia.com/article/l284-Pre-nuptial-agreements.html

^[3] Helplinelaw – http://www.helplinelaw.com/family-law/PRENAI/prenuptial-agreements-in-india-an-overview.html

^[4] https://india.findlegalforms.com/product/prenuptial-premarital-agreement-india/

^[5]http://family.findlaw.com/marriage/pros-and-cons-premarital-agreements-prenuptials.html

^[6]http://www.helplinelaw.com/family-law/PRENAI/prenuptial-agreements-in-india-an-overview.html

^[7]http://www.helplinelaw.com/family-law/PRENAI/prenuptial-agreements-in-india-an-overview.html

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In this article, Mohammed Zain Khan, Founder and Managing Partner of One Legal, Advocates and Legal Consultants draws an assertion on the provision of section 34 and section 38 of the Specific Relief Act. 

Chapter VI of the Specific Relief Act 1963 provides for Declaratory Decrees under section 34 of the Act.

Section 34 of the Specific Relief Act – Discretion of Court as to declaration of status or right

Any person entitled to any legal character or to any right as to any property, may institute a suit against any person denying, or interested in denying, his title to such character or right, and the Court may in its discretion make therein a declaration that he is so entitled, and the plaintiff need not in such suit ask for any relief.

Provided that no Court shall make any declaration where the plaintiff, being able to seek further relief than a mere declaration of title, omits to do so.

Chapter VIII of the Specific Relief Act 1963 provides for Perpetual Injunctions under section 38 of the Act.

Section 38. Perpetual Injunctions when granted

1. Subject to the other provisions contained in or referred to by this chapter, a perpetual injunction may be granted to the Plaintiff to prevent the breach of an obligation existing in his favor, whether expressed or by implication.
2. When any such obligation arises from contract, the Court shall be guided by the rules and provisions contained in chapter II.
3. When the defendant invades or threatens to invade the Plaintiff’s right to or enjoyment of property, the Court may grant a perpetual injunction in the following cases, namely:-

• where the defendant is trustee of the property for the plaintiff;
• where there exist no standard for ascertaining the actual damage caused, or likely to be caused, by the invasion,
• where the invasion is such that the compensation in money would not afford adequate relief;
• where the injunction is necessary to prevent a multiplicity of proceedings.

When a suit for Injunction and Declaration would lie?

Any person who has any legal character or any legal rights as to any property by virtue of title deeds or otherwise may file a suit for declaration of those rights and for injunction against any person denying or interested to deny his title to such character or right.

The Hon’ble Supreme Court has in the matter of Anathula Sudhakar vs. P Buchi Reddy & Ors, clarified the general principles as to when a mere suit for permanent injunction will lie and when it is necessary to file a suit for declaration and or possession with injunction as consequential relief which reproduced as under:

Para 11.1- When a Plaintiff is in lawful or peaceful possession of a property and such possession is disturbed or threatened by the defendant, a suit for injunction simpliciter will lie. A person has a right to protect his possession against any person who does not prove a better title by seeking a prohibitory injunction. But a person in wrongful possession is not entitled to an injunction against the rightful owner.

Para 11.2- Where the title of the Plaintiff is not disputed, but he is not in possession his remedy is to file a suit for possession and seek in addition, if necessary an injunction. A person out of his possession cannot seek the relief of injunction simpliciter, without claiming the relief for possession.

Para 11.3- Where the Plaintiff is in possession but his title to the property is dispute, or under a cloud, or where the defendant asserts title thereto and there is also thereat of dispossession from the defendant, the Plaintiff will have to sue for declaration of title and consequential relief of injunction. Where the title of the Plaintiffs is under cloud or in dispute and he is not in possession or not able to establish possession, necessarily the plaintiff will have to file a suit for declaration, possession and injunction.

In view of the above judgment any person can file a suit for declaration and injunction with regard to any legal character or rights as to any property against any person who is denying or interested to deny his title or such character. In a suit for seeking declaration with regard to a right or title in respect of property along with consequential injunction the Plaintiff will have to pray for a declaration as contemplated under section 34 of the Specific Relief Act, 1963, an interim injunction during the pendency of the suit under order 39 of the Civil Procedure Code 1908 and a mandatory injunction under section 38 of the Specific Relief Act, 1963.

The Hon’ble Supreme Court in the matter of Dalpat Kumar Vs Prahlad Singh and Ors has provided the manner in which a temporary injunction can be granted under order 39 rule 1(c) of the Civil Procedure Code 1908 in a suit for Declaration and Injunction which is reproduced as under:

Para 4- Order 39,Rule 1(c) provides that temporary injunction may be granted where, in any suit it is proved by affidavit or otherwise, that the defendant threatens to disposes the plaintiff or otherwise cause injury to the plaintiff in relation to any property in dispute in the suit, the court otherwise may by order grant temporary injunction to restrain such act or make such other order for the purpose of staying and preventing or dispossession of the plaintiff or otherwise causing injury to the plaintiff in relation to any property in dispute in the suit as court thinks fit until the disposal of the suit or until further orders. Rule 1 primarily concerns with the preservation of the property in dispute till legal rights are adjudicated. Injunction is a judicial process by which a party is required to do or refrain from doing any particular act. It is in the nature of preventive relief to a litigant to prevent future possible injury. It is settled law that grant of injunction is a discretionary relief. The exercise thereof is subject to the court satisfying that,

1. There is serious disputed question to be tried in the suit and that an act, on the facts before the court, there is probability of his being entitled to the relief asked for by the Plaintiff/defendant;
2. The courts interference is necessary to protect the party from the species of injury. In other words, irreparable damage or injury would ensue before the legal right would be established in trial and
3. That comparative hardship or mischief or inconvenience which is likely to occur from withholding the injunction will be greater than would be likely to arise from granting it.

Based on the aforesaid principles the Hon’ble Supreme Court in the matter of Lakshmi alias Bhagyalashmi & Anr vs. E. Jayarani set aside the order of the High Court which had in turn set aside the order of the Additional Judge City Civil Court which had granted interim injunction under order 39 Rule 1 and 2 of the Civil Procedure Code. On the basis of the pleadings and submissions of the Court observed that the Additional Judge City Civil Court has rightly granted interim injunction under order 39 rule 1 and 2 by categorically observing that the respective rights of the parties shall be decided at the time of final disposal of the Suit.

In a suit for declaration of rights or character and injunction the Plaintiff will have to substantiate/prove his rights as claimed thereof. Accordingly the Court may in its discretion award the rights so prayed along with permanent injunction if deemed fit and necessary in the facts of the case.

Under section 35 of the Specific Relief Act, 1963 the declaration made under section 34 by any court will only be binding on the parties to the suit or any persons claiming through them respectively as a declaration under section 34 is a right in Personem and not a right in Rem. (SNP Shipping Service Pvt Ltd  vs. World Tanker Carrier Corporation) AIR 2000 BOM 34.

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In this article, Pradipta Nath discusses Payment of Gratuity to contract labors in India.

In India, we find employers often depute outsourced deputies at their organizations. Those deputies are often called as ‘Contract labours’ and in India and the said is guided under the Act called as ‘THE CONTRACT LABOUR (REGULATION AND ABOLITION) ACT, 1970.

Be it an Establishment or Office or Factory or any where workers are employed, the CLRA Act applies. But on the other hand the implementation of this Act is delegated onto the hands of the Appropriate Government. For easy understanding, an Appropriate Authority may be the Central Government or the State Government. Different State forms their State specific rule for the CLRA’s Applicability. The below furnished CLRA applicability table can be referred for our easy view, though the applicability is always subjected to amendments.

As per the applicability of CLRA is concerned there arise no dispute or a meager on
the below aspects like:-

1. EPIF
2. ESIC
3. Maternity Benefit
4. Payment of Wages
5. Minimum Wages
6. Labour Welfare Fund
7. Professional Tax
8. Payment of Bonus

The main reason as to why there arise little some concerns on extending benefits based upon the above Acts, is because of S. 21 under the CLRA Act. The section basically enumerates the responsibility of the Principal Employer.

But where the case comes into the ‘Payment of Gratuity’ to the contract labours, the mater get complicated as in most of the cases the principal employer do not take the responsibility for the gratuity payment and in the opposite side the Contractors are incapable to afford the payment of gratuity to the workmen as normally in most of the cases contractors income is based upon the ‘commission’ on the total monthly bill amount.

In this article we will try to find out the answer on whether the Principal employer is obliged to pay the gratuity amount to its contract labour or not?

In order to find out the answer, the followings are taken into consideration: –

1. Analysis of S. 21 of CLRA Act.
2. Employer definition under the Payment of Gratuity Act.
3. Employee definition under the payment of Gratuity Act.
4. Wages definition under the CLRA Act.

21 of CLRA Act

Section 21 (4) of the Contract Labour (Regulation and Abolition) Act, 1970 (CLRA), mandates that a principal employer is responsible for the payment of ‘wages’ to a contract employee in the event of a contractor’s failure to pay within the stipulated timelines or in the event of a contractor making a short payment. The principal employer then has the ability to recover the amount paid as ‘wages’, from the contractor.

In The Superintending Engineer vs Appellate Authority on 18 July, 2012, the Hon’ble Madras High Court held that the “it is clear that it will be the basic responsibility, under Sec. 21(4) of the Contract Labour Act, of the petitioner to make the payment of gratuity and the petitioner will have a right to recover that sum from the third respondent contractor”.

Link: https://indiankanoon.org/doc/182458868/

Whereas, in Cominco Binani Zinc Ltd. vs Pappachan on 28 December, 1988, The Hon’ble Kerala High Court held that, “The principal-employer’s liability to pay wages is recognised in Section 21(4) of the Contract Labour (Regulation and-Abolition) Act, 1970 as well. If the contractor fails to pay the wages the petitioner will be bound to pay the same. The wages due to the workmen does not include bonus or gratuity. This is made clear by the definition of wages in the Industrial Disputes Act and Payment of Wages Act. While defining the term “wages”, the above mentioned Acts specificially excludes bonus and gratuity from its purview”.

Link: https://indiankanoon.org/doc/1387153/

In Senior Regional Manager, Food Corporation of India, Calcutta Vs. Tulsi Das Bauri and Others, The Apex held that Section 21 postulates the responsibility for payment of wages. Under Sub-section (1) a contractor shall be responsible for payment of wages to each worker employed by him as contract labour and such wages shall be paid before the expiry of such period as may be prescribed. Under Sub-section (4), in case the contractor fails to make payment of wages within the prescribed period or makes short payment, then the principal employer shall be liable to make payment of wages in full or the unpaid balance due, as the case may be, to the contract labour employed by the contractor and recover the amount so paid from the contractor either by deducting from any amount payable to the contractor under any contract or as a debt payable by the contractor. That liability has been prescribed under Sub-section (2) thereof which says that every principal employer shall nominate a representative duly authorised by him to be present at the time of disbursement of wages by the contractor and it shall be the duty of such representative to certify the amounts paid as wages in such manner as may be prescribed…..the principal employer is required to pay the wages. The term ‘wages’ includes the balance of wages or arrears thereof”.

Link: https://www.legalcrystal.com/case/662861/senior-regional-manager-food-corporation-india-calcutta-vs-tulsi-bauri

In Hindustan Steel Works Construction Ltd. Vs. Commissioner of Labour and ors. The Apex held that, “the term ‘wages’ for the purpose of Section 21 of the Contract Labour (Regulation and Abolition) Act, 1970, means contractual wages which are payable under the terms of employment as between the contractor who is the employer and the contract labourers who are his employees. ‘Wages’ would also include, inter alia, any remuneration which the contractor is required to pay under any award or settlement between the parties or under an order of the Court. By reason of Section 21 of the Contract Labour (Regulation and Abolition) Act, 1970, the principal employer is required to nominate a representative to be present at the time of disbursement of wages by the contractor to the contract labour employed by him, in order to certify that the contractor has paid these wages. And similarly a duty is cast on the contractor to ensure that the disbursement of wages takes place in the presence of the authorised representative of the principal employer. The purpose of keeping the representative of the principal employer present is obviously to ensure that the contractor makes full payment of wages to each worker employed by the contractor as contract labour. These wages are the wages which the contractor has to pay to his workers in terms of the agreement of employment, or any award, settlement etc. If the contractor does not pay these wages to his workmen engaged by him as contract labourers, then under Sub-section (4) of Section 21 the principal employer becomes liable to make good the difference and recover this amount which the principal employer has paid to the workmen of the contractor, from the contractor, (Vide Gujarat Electricity Board v. Hind Mazdoor Sabha and Ors. : (1995)IILLJ790SC and R.K. Panda and Ors v. Steel Authority of India and Ors. : [1994]3SCR1034”.

Further also held that, “the contractor cannot recover any such additional amount from the principal employer under section 21(4)”.

Link: https://www.legalcrystal.com/case/673258/hindustan-steel-works-construction-ltd-vs-commissioner-labour

Thus on analyzing the above contentions, the two commons can be drawn:-

1. Principal Employer is liable for disbursement of wages to the Contract Labours.
2. In case the Contractor is unable to make payment of wages, the Principal Employer can and in sequence it can recover that payment from the contractor.

The next, may we discuss on the definition of ‘Employer’ under the Payment of Gratuity Act.

Employer’ under the Payment of Gratuity Act

On analyzing S. 2 (f) of the Payment of gratuity Act it is found that the legislature did not put a distinction between an employer and a principal employer has not been recognized anywhere in the Payment of Gratuity Act 1972. As per Sec 2 (f) (iii) of the Act, employer means any person who has ultimate authority over the affairs of the establishment.

From the ‘Payment of Gratuity’ point of view, it is the mandate upon the ‘Employer’ to pay gratuity to the employees who suffice S. 4(1) read with S. 2 (c).

(D.B.R. Mills Ltd. Vs. Appellate Authority)

Link: https://www.legalcrystal.com/case/428645/d-b-r-mills-ltd-vs-appellate-authority

And for certain, contractors who are responsible only for supplying or providing for manpower do not owe to qualify as an ‘Employer’ under S. 2(f) of the Payment of Gratuity Act and at the same time only the ‘Principal Employer’ do have control over the affairs of the business.

‘Employee’ definition under

Section 2 (e) of The Payment of Gratuity Act, states that employees means the person employed on wages to do any skilled, semi-skilled, or unskilled, manual, supervisory, technical or clerical work, but deliberately excluded the Apprentice appointed under the Apprentice Act.

Thus even in this case also the legislature do not segregated the Contract Labours or Company payroll employees in respect to Gratuity payment.

Hence an employee whether on-roll or through contractor, will be eligible for the payment of Gratuity upon substantiated S. 4 (1) read with S. 2(c).

Wages under the CLRA Act

Section 21 of the CLRA, envisages the responsibility for payment of Wages to the Contract Labours. Now let see the definition of Wages under the CLRA Act.

Section 2 (h) of the CLRA Act referred the definition of wages from that of S. 2(vi) of the Payment of Wages Act. It defines the term ‘wages’  as all remuneration (whether by salary, allowances or otherwise) expressed in terms of money or capable of being so expressed, which would if the terms of employment, expressed or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment and includes, among others, “(d) any sum which by reason of the termination of employment of the person employed is payable under any law, contract or instrument which provides for the payment…”. However, it excludes “(6) any gratuity payable on the termination of employees in cases other than those specified in (d)”.

Upon analyzing this Section the following points can be taken up for further discussion: –

1. Wages definitions are same to CLRA Act with the Payment of Wages Act.
2. Wages includes any sum or amount which is payable as a result of termination of employment. On analyzing this, it is found that not only gratuity, even bonus and leave balance also covered in this line, and ought to be payable upon termination from the employment.
3. Wages definition specifically excluded the term ‘Gratuity’.
4. Section 4 (1) of the Payment of Gratuity Act states the payment of Gratuity upon termination of employment too on the below grounds: –

(a) on his superannuation, or

(b) on his retirement or resignation, or

(c) on his death or disablement due to accident or disease

Hence, by virtue S. 4(1) of the Payment of Gratuity Act, the ‘Gratuity’ by default is included in the definition of Wages under the CLRA Act.

(Superintending Engineer, Mettur Thermal Power Station, Mettur vs. Appellate Authority, Joint Commissioner of Labour, Coimbatore & Anr, 2012 LLR 1160)

Link: https://indiankanoon.org/doc/182458868/

Rule of Harmonious Construction

When there are two provisions in a statute, which are in conflict with each other, they should be interpreted such that effect can be given to both and the construction which renders either of them inoperative and useless should not be adopted except in the last resort. Bengal Immunity Co. vs. State of Bihar (1955) 6 STC 446 (SC).

Link: http://lawtimesjournal.in/interpretation-of-statutes-important-questions/

In the landmark case of B Shah v Presiding Officer, Labour Court, court applied beneficent rule of construction in construing section 5 of the Maternity Benefit Act, 1961, which makes the employer liable to pay maternity benefit to woman worker at the rate of average daily wage for the period of her actual absence immediately preceding and including the day of her delivery and for six weeks immediately following that day. The court held that Sundays must also be included and held that the Act was intended not only to subsist but also make up for her dissipated energy and take care of child. The Act was read in the light of Article 42.

Link: https://www.lawctopus.com/academike/beneficent-statutes-beneficent-rules-of-construction/#_ednref22

In construing social welfare legislation, the court should adopt a beneficent rule of construction and if a section is capable of two constructions, that construction should be preferred which fulfils the policy of the Act, and is more beneficial to the persons in whose interest the Act has been passed. When, however, the a language is plain and unambiguous, the Court must give effect to it whatever may be the consequence, for, in that case, the words of the statute speak the intention of the legisl When the language is explicit, its consequences are for the legislature and not for the courts to consider. The argument of inconvenience and hardship is a dangerous one and is only admissible in construction where the meaning of the statute is obscure and there are two methods of construction. In their anxiety to advance beneficent purpose of legislation, the courts must not yield to the temptation of seeking ambiguity when there is none.

Link:https://indiankanoon.org/docfragment/1020600/?formInput=social%20welfare%20legislation

Conclusion

From the above discussion it is clear that

1. If any welfare legislation, contemplates two meanings, then the Judiciary do interpret the cause which best serves benefit to the beneficiary or the employee.
2. Under CLRA Act, wages includes the payment which the Employees are entitled for payment at his/her termination form employment, be it called as Gratuity or otherwise.
3. Gratuity applies to both on-roll and off-roll employees, if attracts S.4 of PoG Act.
4. Under Gratuity Act Employer means the one has the ultimate control over the affairs of the Company.
5. The Principal Employer can claim or recover the gratuity amount paid to the contract labour from the Contractor.

At the end, would like to highlight, whatever the Act contemplates it is always beneficial to have a registered contract between the Principal Employer and the Contractor specifying the payment of Gratuity to the Contract Labours. This will enable to avoid any confusion and/or dispute.

After all, it is a matter of prerogative for any type of employees to get gratuity from its employer, be it ‘Principal’ or ‘Contractor’.

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