This article is written by Wardah Beg, student, Faculty of Law, Aligarh Muslim University.

Introduction

You may have found full grown adults stoning and harming stray dogs, shooting innocent birds and leaving completely harmless animals to starvation and death, or seen companies illegally experimenting their products on animals, animals being mistreated and harmed for entertainment in zoos and parks, men carrying an unimaginable number of cattle in a cart or truck, beating them and overloading them, and wondered if there is an end to this cruelty regime. There is only so much that a person can do for protection of animals in the absence of laws. India has a fair repertoire of animal protection laws that, with certain amendments can completely change the scenario of how animals are treated in India.

For a wide-scale action to be taken, it is important for us to acquaint ourselves with the existing animal protection laws, so that loopholes can be filled-in, and the laws can be made to be properly applied. Below is a list of animal protection laws in India:

Animal Protection under The Indian Constitution

The Constitution of India recognizes the lives and welfare of animals by making it a fundamental duty of the citizens of India to respect and treat all living creatures with compassion.

• Animal rights are protected under the Constitution of India. Article 51A(G) makes it a fundamental duty upon every citizen of India to protect wildlife and have compassion for all living creatures.
• According to Article 48, the State has the duty to organize agriculture and animal husbandry on modern, scientific lines and to take steps for preserving and improving breeds, prohibiting slaughter of cows and calves and other milch and draught cattle.
• Article 48A provides that the State also has a duty to protect, safeguard and improve the forests and wildlife of the country.
• In List II (State List), Seventh Schedule, it is provided that the State has the power and authority to:

14 Preserve, protect and improve stock and prevent animal diseases, and enforce veterinary training and practice.

• In List III (Concurrent List), it is provided that both the Centre and the State have the power and authority to:

17 Prevent cruelty to animals.

17B. Protect wild animals and birds.

• Under the Eleventh Schedule (Article 243 G), the Panchayati Raj institutions have the duty and authority to deal with matters relating to:

4. Animal husbandry, dairying and poultry.
5. Fisheries

Animal Protection Laws

The Prevention of Cruelty to Animals Act, 1960 is the Central Legislation regarding animal protection in India. The object of the Act is to prevent the infliction of unnecessary pain or suffering on animals.

The Wildlife Protection Act, 1972 is another Central Act that provides for the protection of wild birds, animals, plants, etc.

Other laws are found in the following Rules: Dog Breeding and Marketing) Rules, 2017, Prevention of Cruelty to Animals (Regulation of Livestock Markets) Rules, 2017, Prevention of Cruelty to Animals (Regulation of Livestock Markets) Rules, 2017 Prevention of Cruelty to Animals (Care and Maintenance of Case Property Animals) Rules, 2017, Animal Birth Control (Dog) Rules 2001, etc.

Laws relating to street animals

• Killing, maiming, poisoning or rendering useless of any animal is punishable by imprisonment for up to two years or with fine or with both, under Section 428 of the Indian Penal Code, 1860. Under Section 429 of the Code, the term is 5 years and is applicable when the cost of the animal is above 50 Rs.
• Section 11 of the Prevention of Cruelty to Animals Act provides that if any person allows, or himself beats, kicks or tortures, in any way, any animal subjecting it to unnecessary pain and suffering will be liable to pay a fine of upto 50 Rs. In case of repetition of the offence, the fine will increase or an imprisonment for 3 months will be granted.
• The Animal Protection (Dogs) Rules, 2001 provide for rules relating to pet and street dogs.

Laws relating to Work Animals/Cattle

Chapter III of the Prevention of Cruelty to Animals Act deals with “Cruelty to animals generally” According to Section 11, the following acts are punishable by fine upto Rs. 25-100 and a maximum of three months of imprisonment on repetition of the said acts.

• anybody who employs any unfit animal, suffering from wound, infirmity, sores or an animal of an old age, to work. -Section 11 (b)
• anybody who carries any animal subjecting it to pain or suffering. – Section 11 (d)
• keeps an animal in a cage or any other such confinement which is not sufficiently big enough as to let the animal move freely. -Section 11 (e)
• any owner of an animal who allows his animal, affected with a contagious or infectious disease to die in any street. -Section 11 (j)
• any person who offers for sale an animal that is suffering from pain due to mutilation, starvation, thirst, overcrowding or ill-treatment. -Section 11 (k)
• In October 2014, non binding guidelines called National Code of Practices for Management of Dairy Animals in India were released by the government in consultation with an NGO named World Animal Protection.

Laws relating to Wild Animals

The chief laws relating to wildlife in India are found in the Wildlife Protection Act, 1972. The Act prohibits the killing, poaching, trapping, poisoning, or harming in any other way, of any wild animal or bird.  It also provides for establishment of Wildlife Advisory Boards in every State.

• According to Section 2 (37) of the act, wildlife includes any animal, aquatic or land vegetation which forms part of any habitat, thus making the definition a wide and inclusive one.
• Section 9 of the Act prohibits the hunting of any wild animal  (animals specified in Schedule 1, 2, 3 and 4) and punishes the offense with imprisonment for a term which may extend to 3 years or with fine which may extend to Rs. 25,000/- or with both.
• The Act allows the Central and State Government to declare any area ‘restricted’ as a wildlife sanctuary, national park etc.  Carrying out any industrial activity in these areas is prohibited under the Act.
• Section 48A of the Act prohibits transportation of any wild animal, bird or plants except with the permission of the Chief Wildlife Warden or any other official authorised by the State Government.
• Section 49 prohibits the purchase without license of wild animals from dealers.

Laws relating to Aquatic Animals

The Wildlife Protection Act is applicable to aquatic animals too. Protection of marine species in India is done through creation of Marine Protected Areas (MPA).

• Schedule 1-4 of the Wildlife Protection Act provides a list of all the protected marine species, for e.g seahorse, giant grouper, hermatypic corals, organ pipe, fire coral, sea fans, etc.
• Schedule III protects all species of sponges and Schedule IV comprises of a wide variety of mollusks.
• Dolphins have been recognized as the national aquatic animal of India and find themselves placed in Schedule I. India has banned use of dolphins for commercial entertainment, thereby placing a ban on establishment of any ‘dolphinarium’ in the country.

Laws relating to Birds

Birds, too, are protected under the Wildlife Protection Act, 1972 (WLPA) and in Prevention of Cruelty to Animals Act (PCAA), alongwith land and aquatic animals.

• Section 11 (o) of the PCAA  provides for punishment of any person who promotes or himself takes part in any shooting match/competition where animals are released from captivity for shooting.
• Under Section 16 (c) of the WLPA,  it is unlawful to injure or destroy wild birds, reptiles, etc. or damaging or disturbing their eggs or nests. The person who is found guilty of any of this can be punished for upto 7 years in jail and be made to pay a fine of upto Rs 25,000.

Laws relating to Zoo Animals

Laws relating to zoo animals are also found in The Wildlife Protection Act.

• Section 38A of the Act provides for establishment of a Central Zoo Authority by the Central Government, which has the following functions:

     – specifying the minimum standards for keeping of animals inside the zoo.

      -recognize or derecognize zoos.

      -recognize endangered species and assign responsibilities to zoos for their captive                breeding, etc.

• According to Section 38 H, no zoo is allowed to function in India without recognition of the Central Zoo Authority.
• The CZA provides the guidelines that are necessary for Establishment & Scientific Management of Zoos in India. These include rules like providing sufficient area, healthcare, freedom of movement, a naturalistic environment to the animals, etc.

Laws relating to Pets

A lot of laws relating to pets are found in Section 11 of the Prevention of Cruelty to Animals Act. The punishment, as mentioned above, for any of these offences is upto Rs 100, and three months imprisonment in case of repetition of the offence.

• Any person, who is the owner of an animal, negligently or intentionally chains a dog in close confinement, habitually
• Any owner who fails to provide his animal with sufficient food, drink or shelter- Section 11 (h)
• Any person who, without any reasonable cause, abandons an animal in such a situation where the animal is bound to suffer pain due to starvation or thirst- Section 11 (i)
• Any owner of an animal who consciously allows an infected, diseased or disabled animal to go into any street without any permit or leave the animal to die in any street- Section 11 (j)
• Any person intimidating another person and preventing him/her, who is the owner of a pet, from keeping or taking care of his/her pet can be held liable under Section 503 of the IPC.

Laws Relating to Animals used for the purpose of entertainment

• No animal can be used for the purpose of entertainment except without registering under The Performing Animals Rules, 1973.
• Chapter V of the PCAA deals with performing animals.
• Section 26 of the PCAA provides for punishment for any person who uses any animal for the purposes of entertainment/performance with a fine of upto Rs 500 or with an imprisonment of upto three months or with both.

Laws relating to testing or experiment on animals

Millions of animals, especially white mice, guinea pigs, rabbits, monkeys, etc. are used for experimentation all over the world, and suffer and die with great pain in this process. Use of animals for experimentation in the cosmetic industry amounts to grave cruelty.

• Through the Drugs and Cosmetics Rules (Second Amendment) 2014, animal testing for cosmetic products was prohibited all over India.
• Any person who violates the Act is liable for punishment for a term which may extend from 3 to 10 years or shall be liable to a fine which could be Rs.500 to Rs.10,000, or both.
• According to Rule 135B of the Drugs and Cosmetic (Fifth Amendment) Rules 2014, no cosmetic that has been tested on animals shall be imported into the country.
• A committee, established under the provisions of Prevention of Cruelty to Animals Act–The Committee for the Purpose of Control and Supervision of Experiments on Animals (CPCSEA) released the Breeding of and Experiments on Animals (Control and Supervision) Rules, 1998 (amended in 2001 and 2006) that regulate the experimentation on animals.
• Dissecting and experimenting on animals in schools and colleges is banned in India, under the PCCA.

How can you take action?

Now that we have a quiver full of laws in our hands to shoot, let us look at how we can use them and make a formal complaint against violation of animal rights, and where:

Sending a Legal Notice: You can either send a legal notice to the individual/group of animal abusers yourself through a lawyer, or report the matter to an NGO which would do that for you. In case no action is being taken by the abuser even after sending the notice, you can file an official complaint.

Getting a Wildlife Case Registered: An offence report is known by different names in different states, such as Preliminary Offence Report (POR), Offence Report, First Information Report (FIR), Seizure Intimation, etc. However, to make the reports uniform, it is advised that the report be called Wildlife Offence Report (WLOR). It is prepared under Section 50(4) of the Wild Life (Protection) Act, 1972. This can be filed by anyone generally.

Though, to file a ‘complaint’, one needs to approach a magistrate and make an allegation orally or in writing. One can approach a forest officer, who can further file a complaint to the magistrate. According to Section 55 of the WLPA, the following persons can file a complaint to the magistrate:

1. The Director of Wildlife Preservation or any other officer authorized on his behalf, who is authorised by the Central Government, Members of Central Zoo Authority or Member-Secretary of Tiger Conservation Authority, Director of the concerned Tiger Reserve.
2. Chief Wildlife Warden
3. Any person who has given another person/group a notice of at least sixty days, of his intention to make a complaint.

Arrest by an individual: Offences under the Wildlife Protection Act are non-bailable and cognizable offences. Under Section 43 of the CrPC, an individual can arrest an offender who has committed a non-bailable and cognizable offence or is a habitual offender, and hand him/her over to the police.

Getting the authorities to actually take action

It is very possible that a person may be very passionate about reporting a certain incident or just generally about animal welfare, and  may want to take action, but the concerned authorities may not cooperate with them. This gets very demotivating, which is why a lot of people think of exercising animal welfare as a very futile job. To get the authorities to actually take action, make sure you do the following:

• Make friends with lawyers and journalists: both of them, sometimes in exchange of money and sometimes pro bono, will help you get your case through.
• Meet people in NGOs and try to help the aggrieved animal or get an abuser reprimanded with the help of established NGOs. Previously, NGOs have fought and won many cases in courts, and are a powerful force altogether.
• If the authorities are not taking action when it is urgent, try to call or write to higher authorities, politicians, etc.
• Gather people. Organize a peaceful protest or demonstration.
• File a grievance on the website of Animal Welfare Board of India.

Conclusion

Although a lot of very elaborate and specific animal protection laws have been passed in India, they are often not properly implemented. It is so because concerned citizens and NGOs do not often emphasize on taking the legal pathway to accomplish results. At the same time, it is imperative to realize that the legislation that we currently have in India is not sufficiently strong and reasonable so as to make great change. The general anti-cruelty parts in Section 11 of the PCAA can be made a lot more effective by increasing the punishment and fine to some extent.

The laws can be made more stringent and all-encompassing so that animals of all kinds, be it street animals, wild animals and animals residing in all types of habitat are protected and preserved.

The post Animal Protection Laws in India appeared first on iPleaders.

This article is written by Uzair Ahmed Khan, pursuing Diploma in Entrepreneurship, Administration and Business Laws, Student of Teerthanker Mahaveer University, Moradabad

Introduction

According to the World Bank’s Doing Business Report India leapfrogged to the 77th rank in the world and became the top-ranked country in South Asia for the first time and third among the BRICS. The report clearly states the improvements in business policies and due to this people are more and more inclining towards the business sector.

The Government of India is daily focusing on new business policies to make business easier for everyone and also inclining more and more people towards business. One of the main reasons behind all this is when more and more people start doing business it will ultimately boost the economy of the nation.

What is the Government eMarketplace? (GeM)

Government eMarketplace is an online portal created for the procurement of buying and selling of goods and services to the government. It was launched on 9 August 2016 by the Commerce and Industry minister. Procurement on Gem is authorized by General Financial Rules by making several changes in the government rules. Gem is one of the bold steps taken by the government with the objective to transform the way in which the procurement of goods and services is taken by the government ministers and departments, Public sector undertakings and other supreme bodies of central government.

Key highlights of Government eMarketplace

–   Currently, it consists of 34,006 buyer organizations.

–   It has 206,407 sellers and service providers.

–   It has 837,882 available products on the portal.

–   It offers 5,715 types of services.

–   There are 30,871 different MSE sellers and service providers.

Advantages of Government eMarketplace

Features of Government eMarketplace

The features of government eMarketplace are followed as-

Transparency

Government eMarketplace offers transparency by eliminating human interface in vendor registration, order placement, and payment processing to a great extent.

 Efficiency

Another feature of Government eMarketplace is that it is very efficient. The direct purchase on GeM can be done in a matter of minutes and the entire process is an online end to end integrated with online tools for accessing the price reasonability.

 Safe and Secure

Another important or useful feature of Government eMarketplace is that it is very safe and secure. All the documents on GeM are E-signed at various stages by the buyers and sellers. The precedent of the suppliers is verified online and automatically through Aadhar, PAN and MCA21 databases. GeM does a 100% online verification of all vendors irrespective of the value of procurement.

Potential

Another feature of government eMarketplace is that it has the potential to support make in India. On Government eMarketplace it is easy for the government buyers to procure make in India and small scale industries goods very easily because of the filters for selecting the goods which are preferential market access and those which are manufactured by small scale industries.

Savings to the Government

All the above features such as transparency, efficiency, and ease of use of the Government eMarketplace has resulted in a substantial reduction in prices on GeM in comparison to the rate contract, direct purchase rates, and tender. On GeM the average prices are 15% to 20% and in some cases even up to 56%. GeM is also performing demand aggregation for items that are to be acquired by the state or central government departments.

If we closely observe the graph of GeM than we can witness that the GeM would eventually emerge as the National Public Procurement Portal keeping tuned in to the global best practices. However, most of the countries like South Korea, Singapore, the UK, and the USA etc have a single National Public Procurement Portal and as a result, yearly savings of billions of dollars are made in public procurement, besides giving a fillip to the domestic business.  

How Government eMarketplace and SWAYATT is helpful to startups?

The government of India on 19th February 2019 launched “StartUp Runway” and “SWAYATT” (Start-ups, Women and Youth Advantage Through e-Transactions) on Government eMarketplace. The startUp Runway is a unique concept initiated by Gem to promote entrepreneurship through innovation.

SWAYATT is launched to bring together the key stakeholders within the Indian entrepreneurial ecosystem to Government e-Marketplace the national procurement portal.

The main aim of these programs to provide an opportunity to lean and agile startups who cannot reach out to government buyers. With the help of Startup Runway, the startups can reach to the universe of government buyers by offering products and services that are unique in design, concept process and functionality through StartUps Runway corner easily.

According to the Department for Promotion of Industry and International Trade only certified Startups are invited to offer their products or services for procurement on Government eMarketplace.

The objective of StartUp Runway

• Enable Startups to introduce their unique innovations to government and PSU buyers.
• Assess utility and market acceptability of startup products/services.
• Ultimately spur hyper-local job-creation and wealth generation to achieve inclusive growth by way of helping startups.

Objectives of SWAYATT

• It will promote inclusiveness by catapulting various categories of sellers and service providers.
• Take proactive steps to facilitate the training and registrations of such specific categories of manufacturers and sellers.
•     To develop women entrepreneurship and encourage participation of the MSME sector and Start-ups in public procurement.

What are the major benefits for StartUps on GeM?

There are 2 major benefits for StartUps on GeM and they are-

• Exemption from submitting earnest money deposit.
• Relaxation of prior turnover and prior experience.

Important Points to remember

StartUp Runway shall be anchored and operated by DPIIT (Department for Promotion of Industry and Internal Trade) and supported by GeM SPV.

StartUp Runway at GeM does not certify a Product/Service to be innovative/unique as defined by DPIIT (earlier DIPP) or any other authority.

This is only a facilitation corner for the Products/Services which are being claimed as innovative/unique by the Startups and not availed earlier by any Government Department/Ministry.

This program covers all offerings created indigenously with the exception of products/services belonging to Heavy Plant & Machinery, Medicines, Agricultural Chemicals, Foods, Farm & Fishery Goods, Weapons, Firearms, Explosives, and Oils.

Innovation Categories for Startups on GeM

1.   Artificial Intelligence
2.   Big Data and Analytics
3.   Fintech, Block-chain
4.   Advanced Manufacturing and Robotics [Next Gen IoT, 3D Printing]
5.   Agritech
6.   Health and Life Sciences [Biopharma, Medtech, Digital Health]
7.   Cybersecurity
8.   Cleantech
9.   Edutech
10.   Gaming [Mobile and eSports]
11.   Advertising Technology
12.   Consumer Electronics.

The process of Application on GeM

1. Registering the Startup on GeM

The first step will be taken by the applicant is to register as a seller or service provider on GeM. it is mandatory for a startup registration to have a DIPP number.

2. Registering Products and Services in Startup Runway

The second step is startups shall login using their newly registered or already existing GeM login credentials. Startups having a valid DIPP number will see a #startupindia blinking logo on the dashboard.

Clicking on #Startupindia logo will open a form which needs to be duly completed by Startup for further evaluation.

3. Screening of Products / Services

The screening will be done by a competent committee based on the basic sanity of information provided (in 7 days).

4. Notifying the Buyers of the new Products and services

Screened products or services will be made directly available to the buyers of relevant ministries or departments. Potential buyers can opt for Trials of such Products or Services.

5. Feedback from Buyers

The buyer shall provide feedback regarding the product with respect to their utility, uniqueness of design, process, concept and price reasonability.  The timeframe for product trial is 15 days and service trials from 8 to 16 weeks.

6. Listing of Products / Services on GeM

On feedback evaluation, innovative products with 3 or more ratings from at least 3 buyers, can be listed for all the buyers in the regular GeM.

Conclusion

The StartUps Runways and SWAYATT launched by the Ministry of Industry and Commerce on Government eMarketplace literally helped in boosting the business sector by encouraging peoples from the vulnerable background who don’t get any support. Due to the help of this platform people from vulnerable backgrounds are earning properly by providing their product or services to the government.

If you have any innovative product or service idea then you may register your startup on GeM with this link and start doing business with registered government buyers and also gets certain exemptions on the platform.

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.                    

The post What are Government eMarketplace (GeM) and SWAYATT (Startups, Women and Youth Advantage Through eTransactions) and how is it helpful to startups?. appeared first on iPleaders.

This article is written by Jagdish S. Kaisare, pursuing a Diploma in Entrepreneurship Administration and Business Laws, from Lawsikho. He is a fourth-year law student at Alliance School of Law, Alliance University.

To be a successful stockbroker, one must remember two quotes concurrently! One by Churchill, who said, “You have to lose many a battle to win the War” and the other by Soros, who said, “It’s not important whether you are right or wrong, it is more important how much you lose when you are wrong and how much you make when you are right”.

Leonardo DiCaprio’s depiction of Jordan Belfort, a million-dollar stock broker in the blockbuster movie “The Wolf of Wall Street” was well appreciated. However, in reality, we have successful traders like Sir Warren Buffet, Sir Rakesh Jhunjhunwala, Sir Ramesh Damani etc. who have built a fortune by trading in the stock market.

The story of Sir Rakesh Jhunjhunwala is personally very inspiring for me. A Chartered Accountant by profession, he entered into the markets in 1985 and began trading. His first trade was Tata Tea, that he bought for Rs. 43 and sold at Rs. 143. His next big deal was Sesa Goa, which was a game-changer for him. Today, he is widely regarded as the king of stock markets in India and his portfolio is worth over Rs. 20,000 crores, and consists of Titan, Lupin etc.

Another inspiring story is of, Sir Ramesh Damani who commenced his journey in the 1990s. His most famous investment was in Infosys. He believes in long term investing and suggests one to prepare an exit strategy before making the investment.

I’m sure the above stories may have inspired you to become a stock broker. The immediate question now is, how to become a stock broker?

Introduction

At the outset, it is important to delve into the concept of  “stock market”. “Stock Market” is a secondary marketplace that facilitates the trade of financial securities. Stock Markets and Stock Exchange are term that can be used interchangeably. India’s major stock exchanges are the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSC). They are regulated and governed by the Securities and Exchange Board of India (SEBI) which was constituted under the Securities and Exchange Board of India (SEBI Act, 1992.

A stock broker a category of licensed intermediary who trade securities listed on the exchange for a commission. Another category of licensed intermediary is the sub broker, who is essentially a person not being a member of a Stock Exchange per se but acts on behalf of a member stock broker. In other words, he is an agent to a stock broker. Stock brokers and sub brokers are expected to stay abreast of the market and owe a fiduciary duty to protect the interests of his clients.

Both the intermediaries essentially perform the role of an agent and are governed by the Securities Exchange Board of India Act, 1992, Securities Exchange Board of India (Stock Brokers and Sub Brokers) Regulations 1992, Securities Contracts Regulation Act, 1956, Conduct Regulations, 1992, various rules and regulations and directives of SEBI and the stock exchange of which he is a member. A stock broker ought to be registered under Section 12 of the SEBI Act, 1992.

 How does the stock market work?

A company is that intends to go public lists its share in the primary market via initial public offering. The investors are encouraged to bid for the shares, and they are then accordingly allotted. Further, these shares are traded in the secondary markets. Stock exchanges facilitate the secondary market trade. It is here that a stock broker plays a vital role. They act as intermediaries between the investor who wishes to sell his stock and the buyer who wishes to buy the stock. They broker the deal for a commission. Once the order is placed, the exchange then facilitates the transfer of ownership of the shares by a process called settlement.

How to be a Stock Broker?

In order to apply for registration, a person has to meet the eligibility criteria laid out by the SEBI.

1.   Registration

The SEBI has introduced a common registration certificate for different market segments.  Approval has to be obtained from the stock exchange and the clearing corporation. In order to register, the entity is required to apply via the regulator through the respective stock exchange in the manner prescribed. The entity would be issued a certificate bearing a unique registration number. The applicant has to meet the “Fit and Proper” Criteria set by the SEBI.

2.   Fees

Upon SEBI’s approval of the application, the Broker has to pay membership fees to the exchange on which he intends to trade. Sub Brokers also need to pay a similar amount.

3.   Base Minimum Capital Deposit

Upon securing membership, a base minimum capital deposit as prescribed has to be paid as security with the stock exchange. For stock brokers doing proprietary trading without algorithm, the deposit is Rs. 10 lakhs. For stock brokers trading without algorithm, on behalf of clients, it is 15 lakhs. For those doing both, the deposit is Rs. 25 lakhs. Lastly, for stock brokers doing algorithmic trading, the deposit is Rs. 50 lakhs.

Those brokers not having nationwide presence, the deposit requirement would be 40%.

4.   Test and Training

Upon submitting an application, one may have to secure certification from the National Institute of Securities Markets, created by the National Stock Exchange of India.

For more information, one can visit the link provided here (https://www.sebi.gov.in/legal/circulars/apr-1992/registration-of-brokers_19382.html)

Functions of a Stock Broker

The Stock Broker/Sub Broker ought to display his registration details on his website and on all official documents which can be cross-verified on the SEBI website.

The Securities Exchange Board of India (Stock Brokers and Sub Brokers) Rules and Regulations 1992 in Schedule II provides for the code of conduct of the stock brokers. The apex court in the case of Securities & Exchange Board of India v Kishore R. Ajmera (AIR 2016 SC 1079) held that,

“The code of conduct for stock brokers, inter alia, lays down that the stock-broker shall maintain high standards of integrity, promptitude and fairness in the conduct of all investment business and shall act with due skill, care and diligence in the conduct of all investment business. The code also enumerates different shades of the duties of a stock broker towards the investor, details of which are not being extracted herein except to say that all such duties pertain to the high standards of integrity that the stock-broker is required to maintain in the conduct of his business”

The stock broker ought to enter into a contract with a sub-broker, which, lays out the duties and responsibilities of both parties.

Liability of a Stock Broker

Chapter VI of the Conduct Regulation, 1992 deals with the liability for contravention of the provision of the Act/Regulations. It provides that, a stock broker or sub-broker who indulges in fraudulent and unfair trade practices relating to securities, who fails to exercise due skill, care and diligence and contravenes the provision of the Act/ Regulations shall be liable for monetary penalty specified under Chapter VIA of the Act and/or Penalties specified under Chapter V of the SEBI (Intermediaries) Regulations 2008, including suspension, cancellation of registration etc.

Practical Guide to Starting a Stock Broking Business

This section will cover the practical aspects ranging from approximate capital requirements to statutory formalities.

 What does it take to be a stock broker?

Like the stock market legend, Sir Rakesh Jhunjhunwala, once said, “a good trader requires qualities like knowing what and how much to risk, knowing when and how to take a loss, discipline, control over emotion and tremendous conviction”.

According to Sir Rakesh Jhunjhunwala, the top ten commandments for trading are:

•         Be realistic
•         Pursue trading as full-time profession
•         Know the rules
•         Never aspire to be the market’s master. Rather, be its slave.
•         Leverage your skill
•         Have a broad idea of direction
•         Don’t be afraid to make a mistake
•         Play Seen’, not Blind’ for market opportunities
•         Assess risk
•         Pyramid your profit
•         Trading can only be learnt, not taught.

Capital Requirements

1. The entity, other than a proprietorship concern, will first require registering with the Ministry of Corporate Affairs. It would require a one-time capital investment of approximately Rs. 20,000 to Rs. 25,000 depending upon fees of the chartered accountant/company secretary and stamp duty of the respective state.
2. The stock broker might have to pay the one-time base minimum capital deposit (explained above). Further, a sub-broker may have to pay a one-time deposit amount ranging from Rs. 25,0000 to Rs. 3,00,000 depending on the broker.
3. The stockbroker/sub-broker would also require a capital investment of approximately 7-10 lakhs for infrastructure, computers, workstations, televisions and ancillary expenditure.

Other Registrations

Apart from the SEBI requirements, a stock broker will require registration with tax authorities, goods and service tax registration, intellectual property registration like a trademark, shops, and establishment registration.

Conclusion

To conclude, India’s market is among the best-regulated markets in the world. India’s accounting standards are closer to International standards. The SEBI has made corporate governance guidelines, trader regulations stringent. Despite that, stock broker plays a pivotal role in the stock market. They are indispensable for trade. However, despite the shift to electronic trading, there is a need for greater integration with International markets in terms of capital flows, products, and processes. There is a need to introduce new, cutting edge financial products.

 Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.                    

The post What Registrations do you require to start a Stock Broking Business? appeared first on iPleaders.

This article is written by Hitansh Sharma, graduated from the Government Law College, Mumbai in 2017 with a B.L.S. LL.B. degree, here he discusses medical negligence.

Important questions answered based on Supreme Court decisions

With medical litigation on the rise in the country, the subject of medical negligence has assumed tremendous importance. Here are some questions on the subject we have answered for you, based on the rulings of the country’s apex court. We have also included, at the end, a summary of a few interesting cases decided recently by the apex court.

What is negligence and when can a professional be held liable for negligence?

It is a breach of duty caused by omission to do something which a prudent and reasonable man would do, or doing something which a prudent and reasonable man would not do. The essential components of negligence are three: ‘duty’, ‘breach’ and ‘resulting damage’. As observed by the Supreme Court in the case of Jacob Mathew vs. State of Punjab and Anr. (2005), professionals like lawyers, doctors, architects and others may be held liable for negligence on one of two findings: either he was not possessed of the requisite skill which he professed to have possessed, or, he did not exercise, with reasonable competence in the given case, the skill which he did possess.

What is the law on medical negligence in India?

In India, one can normally sue a doctor and hospital/nursing home vicariously for negligence under law of torts, law of contracts, criminal law, consumer protection law and constitutional law. An aggrieved party can also approach the Ethics Committee of the Medical Council of India or the state medical councils against the professional misconduct of a doctor.

Is a patient a ‘consumer’ and does a doctor render ‘service’ under the consumer protection law?

In the case of Indian Medical Association vs. V.P. Shantha and Ors. (1995), the Supreme Court has held that service rendered to a patient by a medical practitioner (except where the services are rendered free of charge to a patient), by way of consultation, diagnosis and treatment, both medicinal and surgical, fall under the ambit of the Consumer Protection Act, 1986 and doctors can be sued for deficiency in service.

What is the standard of care expected from a doctor?

The Supreme Court in the case of Dr Laxman Balkrishna Joshi Vs. Dr Trimbak Bapu Godbole and Anr. (1968) held that a doctor has a duty of care in deciding whether to undertake a particular case, a duty of care in deciding what treatment to give and a duty of care in the administration of that treatment. A breach of any of those duties gives a right of action for negligence to the patient. A doctor is expected to exercise a reasonable degree of care, neither the very highest nor a very low degree of care and competence judged in the light of the particular circumstances of each case is what the law requires.

What about the burden of proof and is the opinion of an expert important in such cases?

The Supreme Court observed in the case of Nizam Institute of Medical Sciences vs. Prasanth S. Dhananka and Ors. (2009) that in a case involving medical negligence, once the initial burden has been discharged by the complainant by making out a case of negligence on the part of the hospital or the doctor concerned, the onus then shifts on to the hospital or to the attending doctors and it is for them to satisfy the court that there was no lack of care or diligence. On expert opinion, the Supreme Court in the case of Malay Kumar Ganguly vs. Sukumar Mukherjee and Ors. (2009) noted that the opinion must be based on a person having special skill or knowledge in medical science. Whether such evidence could be admitted or how much weight should be given to it, lies within the domain of the court.

What does not constitute medical negligence?

From the decisions of the Supreme Court in Jacob Mathew case, Malay Kumar Ganguly case and in Kusum Sharma and Ors. vs. Batra Hospital and Medical Research Centre and Ors. (2010), we can draw the following:

1. Mere deviation from normal professional practice or mere accident is not necessarily evidence of negligence.
2. An error of judgment on the part of a professional or simply because a patient has not favourably responded to a treatment given by a physician or a surgery has failed is not negligence per se.
3. A doctor cannot be held negligent merely because his conclusion differs from that of other professional doctor or merely because the doctor chooses one acceptable course of action in preference to the other one available.
4. Just because a professional looking to the gravity of illness has taken a higher element of risk to redeem the patient out of his/her suffering which did not yield the desired result may not amount to negligence.

What precautions should a doctor/hospital/nursing home take?

The Supreme Court in the case of Martin F. D’Souza vs. Mohd. Ishfaq (2009) and Malay Kumar Ganguly case listed down the following precautions:

1. Current practices, infrastructure, paramedical and other staff, hygiene and sterility should be observed strictly and no prescription should ordinarily be given without actual examination. Full record of the diagnosis, treatment, etc. should be maintained.
2. A doctor should make his own independent analysis including tests and investigations and not rely on patient’s version. Further, a doctor should not experiment unless necessary and even then he should ordinarily get written consent from the patient informing him/her about the admitted risk. An expert should be consulted in case of any doubt.

What view has been taken by the Supreme Court in recent cases on this subject?

Analysis of 3 recent cases decided by the Supreme Court:

Case 1: Supreme Court refuses to grant compensation as there was no evidence to show any unexplained deviation from standard treatment protocol: In the case of Vinod Jain vs. Santokba Durlabhji Memorial Hospital and Anr. (decided on February 25, 2019), Mrs Sudha Jain was suffering from oesophageal cancer and was admitted to the hospital for the case of chills and fever and re-insertion of nasal feed tube which was dislodged. After the necessary treatment, the patient was discharged from the hospital. However, after a few days, she went into the coma and passed away. It was argued by Mr Jain that his wife was discharged prematurely despite her serious condition and an antibiotic was given orally which required intravenous administration. The Supreme Court found that the oral administration of antibiotics and the discharge was justified by the doctor considering her condition at the time and hence, no compensation was awarded.  

Case 2: Supreme Court enhances compensation in the case of medical negligence which reduced a child to vegetative state: In the case of Shilaben Ashwinkumar Rana vs. Bhavin K. Shah and Anr. (decided on February 4, 2019), after a surgical procedure, a child of about 2.5 years of age suffered physical and mental abnormality leading to the vegetative state. Before the Supreme Court, the mother of the child prayed for adequate compensation to meet the expenses for ensuring qualified nursing care of her child in the vegetative state. The Supreme Court observed it was a case of medical negligence as necessary precautions were not taken by the doctors knowing the post-surgery complication that was usual in the case at hand. The Supreme Court granted a total compensation of Rupees 17 lakhs, taking note of the tragic state of a family with a disabled child.

Case 3: Supreme Court holds that law should take a patient-centric approach and limited compensation cannot be granted just because the deceased was a housewife: In the case of Arun Kumar Manglik vs. Chirayu Health and Medicare Private Limited and Anr. (decided on January 9, 2019), Mrs Madhu Manglik was admitted to the hospital for the treatment of dengue. However, on the same day of admission, she died due to cardiac arrest. It was argued by the husband of the deceased that standard treatment which is given to the patients of dengue was not given in this case. The Supreme Court held that timely treatment was not given to the patient and the standard of reasonable care expected of doctors at the hospital was not met. It was observed that the contribution made by a homemaker to a family has an economic equivalent. Compensation of Rupees 15 lakhs with interest was directed to be paid by the hospital to the aggrieved.

The post Medical Negligence and the Law appeared first on iPleaders.

This article is written by Apekshya Koirala, pursuing a Diploma in Entrepreneurship, Administration and Business Law, from Lawsikho. She is a BBA LLB 5th year student, School of Law, Sharda University.

Introduction

Before the enactment of Good and Service Tax (GST), accounting and tax professionals were authorized to file returns on behalf of the taxable person which prevailed in the indirect tax regime. Mostly Chartered Accountant (CA), Advocates and Sales Tax Practitioners used to perform the above mentioned task. With the new GST law, it seeks to formalize this modus operandi between the taxable person and the person filing returns on behalf of him by developing three-way association between a taxpayer, GST practitioner and GSTN transparent. Hence, GST practitioner is a person approved by the Central or State Government to perform certain activities on behalf of a taxpayer. As per section 2(55) of CGST Act, GST practitioner means any person who has been approved under section 48 to act as such practitioner. A registered taxable person may authorize an approved GST practitioner to furnish information on his behalf to the government. Rule 24 and 25 of the Returns rule prescribe the manner in which GST practitioner is approved. In addition to this, it lays down the eligibility conditions, their duties and obligations, the order of rejection of the application of enrolment, list of authorized GST practitioner (GSTP), authorization letter and withdrawal of authorization also. The GSTPs enrolled on the GST Network under sub-rule (2) of Rule 83 and covered by clause (b) of sub-rule (1) of Rule 83, i.e. those meeting the eligibility criteria of having enrolled as sales tax practitioners or tax return preparer under the existing law for a period not less than five years, are required to pass the said examination before 31.12.2018 in terms of the second proviso to Rule 83(3).

The functions of GST Practitioner are listed below:

• Filing of an application for fresh returns
• Filing of an application for amendment and cancellation of a registration
• To furnish details of an outward or inward supply
• To furnish monthly, quarterly, annual or final GST returns
• To make payment for credit into electronic cash ledger
• To file a claim for refund
• To represent the taxpayer under any proceeding under the act
• To file an appeal to the First Appellate authority

How to apply to be a GST Practitioner?

Under Rule 83, an electronic application may be made in FORM GST PCT – 01 under a common portal either directly or through a Facilitation Centre notified by the Commissioner for enrolment as GST practitioner by any person who is:

1.  a citizen of India;
2. is  of sound mind;
3. not adjudicated as insolvent;
4. has not been convicted by a competent court for an offence with imprisonment not less than two years.

Required Qualifications

1. He is a retired officer of the Commercial Tax Department of any State Government or of the Central Board of Excise and Customs, Department of Revenue, Government of India, who, during his service under the Government, had worked in a post not lower in rank than that of a Group-B Gazetted officer for a period of not less than two years;
2. He has enrolled as a sales tax practitioner or tax return preparer under the existing law for a period of not less than five years;
3. He has passed,

• He is a Graduate or Post-graduate degree or its equivalent examination having a degree in Commerce, Law, Banking including Higher auditing, or business administration from any Indian University established by any law for the time being in force; 
• A degree examination of any Foreign University recognized by any Indian University as equivalent to the degree examination mentioned in sub-clause (i)
• Any other examination notified by the Government for this purpose
• Any degree examination of an Indian University or of any Foreign University recognized by any Indian University as equivalent of the degree examination and has also passed any of the following examinations, namely: –

    Final examination of the Institute of Chartered Accountants of India;

    Final examination of the Institute of Cost Accountants of India;

    Final examination of the Institute of Company Secretaries of India.

A GST practitioner is required to file following forms:

• Form GST PCT 1 it is an application form for enrolling as GST practitioner
• GST PCT 2 is a form issued by authorizing officer which certifies enrolment of GST as a practitioner
• GST PCT 3 is a form for the purpose of seeking additional information as required for the purpose of enrolment and it is also a form through which a show cause notice is issued to GST practitioner for misconduct
• GST PCT 4 is a form which conveys rejection order of an enrolment application. This form also state disqualification of GST practitioner for misconduct.
• GST PCT 5, this form provides list of all GST practitioners which is maintained on the GST portal
• GST PCT 6, form authorizing GST practitioner by a taxable person on the GST portal
• GST PCT 7 it is a form which states withdrawal of authorisation of a GST practitioner by a taxable person as on the GST portal.

The National Academy of Customs, Indirect Taxes and Narcotics (NACIN) has been authorized for conducting examination for enrolment of GST Practitioner (GSTP)vide Notification No 24/2018- Central Tax dated 28.05.2018 by the Finance Ministry.

The Ministry of Finance has mandated passing of examination by a person seeking to be enrolled as GST Practitioner. A person seeking registration as GSTP must clear GSTP examination before 31st of December, 2018. The examination will be conducted twice in a Year as per schedule published on official website of NACIN. This notice will also be published on common portal, GST Council Secretariat and all leading English and Regional newspapers.

The first examination for such GSTPs has already been conducted on 31.10.2018. The next examination for them shall be conducted on 7.12.2018 from 1100hrs to 1330 hrsat designated examination centres across India.

Registration for GST Practitioner (GSTP) Examination

The eligible candidate must register himself on the online website as specified by NACIN. To register himself, he should pay registration fee as prescribed in the same website. The applicant can choose an examination centre located across the nation as designated by NACIN. Any kind of related information is available on the common portal of the Board.

Validity of GST Practitioner License

The GST practitioner license would be valid until it’s cancelled by the relevant authority.

A person seeking for GST practitioner license through tax return preparer or the sales tax practitioner route are required to pass the examination conducted by the GST Authority within one year from the implementation of GST.

The enrolment as GST practitioner will become possible only if the candidate passes the examination with due marks to be conducted by National Academy of Custom, Indirect Taxes and National Academy of Narcotics.

Online registration process

• There is a very easy way in which a qualified person can enrol himself.  Firstly, visit the online GST Portal www.gst.gov.in .

• Thereafter, he has to click on ‘Services’ and then to Registration and choose new registration, form there the user will be directed to registration page.

• Here, in this page click on New registration, and then from the dropdown option select GST practitioner.

• Select the appropriate State and District, enter your Name, PAN, Email Id and mobile no in the provided column.

• Enter captcha code and then finally choose proceed option

• Once the validation is successful the user will be redirected automatically to OTP verification page.

• Then the OTP is sent in registered mobile number or  email id, enter it and proceed further.

• A unique TRN would be generated automatically and click on Proceed.

• Now, enter the TRN and captcha code and again click on proceed.

• An OTP will be sent in registered mobile no, enter this OTP in provided column and then click on proceed.

• Then all the required details need to be properly given in provided column boxes and required documents should be uploaded properly in pdf. And jpeg. Format.

• After completion, click on proceed in the verification page.

For the successful submission of application form, there are two ways that needs to be performed;

• Application can be successfully submitted through DSC token.

• Evc and E- signature – enter both the OTP sent on your mobile number and email id and your email id, the mobile number should have been linked with the Adhaar and then click on the submit button.

After completion of the above-mentioned process, success message appears and within 15 days from the date of submission an acknowledgement mail would be sent on one’s official mail id.

Roles/Responsibilities of GST Practitioner

• File GSTR 1 AND GSTR 2
• Furnish GSTR 3 AND GSTR 9
• File a claim for refund after confirmation from registered person
• Make deposit for credit into electronic cash ledger
• File an application for amendment or cancellation of registration after confirmation from registered person
• Appear as an authorised representative.
• GST practitioners are required to prepare statements once authorized; they must affix the digital signature of the taxable person on the same once the statements have been confirmed and verified – the taxable person receives a confirmatory text message/email which he must confirm
• It is the responsibility of the taxable person to ensure that all the information furnished is correct and accurate to the best of his knowledge – in case of absence of confirmation by the taxable person, it will be considered as confirmed.
• In case the taxable person wishes to withdraw consent and authorization is given to the GST practitioner, he may do so by way of Form GST PCT-7.

The process of filing returns by a GST practitioner can only be initiated if the GST practitioner has been authorized to do so by the taxable person. The details of such authorization are maintained on the common GST portal. Once a GST practitioner has been authorized to conduct activities on behalf of a taxable person, he may prepare statements, furnish information and then get the same verified and confirmed by the taxable person.

Conclusion

With the implementation of GST Act, various arenas of practice have emerged, out of these areas, it also created scope for an individual to become a GST practitioner. Any individual after fulfilment of required qualification and passing of an examination can register himself to be a GSTP. It gives autonomy to a licensed GSTP to file various forms on behalf of his clients, wherein he can also make deposit for credit into electronic cash ledger. The practitioner can on the prior approval of his client file for a refund claim, serve an application to make an amendment or cancellation of the registration. This in itself has created an independent form of practice thereby, making it a very lucrative form of a profession. Not only that, the GST Practitioner under his own discretion can choose to be a taxpayer’s consultant by either accepting or rejecting taxpayer’s application from the online list of engaged taxpayers in his account. Besides these advantages GST Practitioner can also offer offline services such as; by helping taxpayer to generate e waybill for movement of goods, issuance of tax invoices, delivery challan, cancellation and provide them with new updates occurring around GST.

 Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.                    

The post Who is GST Practitioner and How one can become a GST practitioner? appeared first on iPleaders.

This article is written by Ramanuj Mukherjee, CEO, LawSikho.

HR managers can make or break a company. They are custodians of a company’s culture, morale, productivity and its biggest resource – people.

But when HR managers make mistakes, things go for a toss. Especially legal mistakes.

Take the example of Tehelka. Or even more recently Viral Fever. Thriving companies went from rising stars of the industry to obscurity, thanks to HR failures. Sexual harassment and toxic workplace behaviour was not reigned in, which led to total disaster eventually.

Even before that there was the Maruti saga.

In 2012, our favourite car manufacturer Maruti Suzuki Ltd was in news for the dubious working conditions provided to its workers. It was an example meant for textbooks.

HR managers made and implemented misconceived labour policies and ignored complaints. Lack of positive enforcement of ethics and laws led to the unprofessional approach of managerial staff towards labourers. This led to violent protests that led to the murder of an HR manager following by shutting down of Manesar factory of Maruti for a long time.

Being a great HR manager is not just about the human aspect of the business, they are also expected to enforce the black letter of labour, industrial, social security and other employment laws.

If you are not an HR manager, you are welcome to read, but please, please, send this across to at least one HR manager you know and respect. This would be valuable for them.

Lawyers should read it because it would help you to understand some fundamental things about labour and employment law practice so read on.

Here are 20 solid reasons why HR managers with leadership ambitions should seriously consider acquiring practical knowledge of labour, employment and industry laws.

#1

HR managers with labour law qualifications get promoted faster and get paid more

Good HR skills plus knowledge of Industrial laws, labour and employment laws make a very powerful combination. These laws are not just complex obstacles. These laws also represent a unique opportunity.

There are very few HR leaders who understand the rules of the game, and if they do, it makes them indispensable to higher management. Those HR managers also make better decisions, frame better policies and deal with external agencies and regulators much better, helping them to climb the corporate ladder faster than the rest.

#2

HR managers are the first level of defense against potential labour and employment law cases

Who is the first person we go to for a minor disturbance or a significant turmoil at the workplace?

If HR is doing his or her job right, it will be the HR department.

They are the ones who keep an eye on retention failures, nepotism, corruption, high attrition, employment contracts etc. They are also tasked with legal compliance related to employment.

If there are potential legal risks with respect to employees, which can lead to cases later, HR managers can identify, flag, escalate and address them.

Similarly, if there are reasons for labour department or other government bodies to take the wrong kind of interest in the organization, HR managers are in a position to report such things upwards rapidly and the organization can then take necessary steps.

It is the job of HR managers to interact with people all the time. They get to know things that other managers or executives will never know. And there lies their superpower!

HR managers can save the company from falling through hidden legal traps.

But for that they need to be trained enough to spot these clouds of trouble from a distance.

#3

HR managers have to handle raids and labour inspections

Disgruntled employees complain against the company.

Jealous competitors pay off labour inspectors to trouble your company.

An overzealous manager mistreats some employees or forgets to enforce safety mechanisms as the focus is too much on production goals.

Or the labour department sends an emissary for a routine inspection.

Who would be in the front line dealing with such situations? Senior HR managers of course.

Notices under various Labour Laws are issued to the employer on the spot for compliance of irregularities detected during the course of the inspection.

You can refer to this checklist to know how risks of non-compliances are categorized and evaluated by the labour inspector.

Let’s take the example of the Factories Act. If you go through Karnataka State rules supplementing the Act, you will find over 80 compliance obligations are cast on the occupier of the factory.

It is the duty of the HR manager to analyze such rules, prepare action points, comply with the directions and report of the labour inspector within 15 days of submission of the report, otherwise you might invite unwarranted legal risks in the form of penal sanctions and prosecutions.

This is just one law, you may have to comply with another 20 such labour laws. And that is why it is a great thing if you are comfortable with labour laws and India’s legal system.

#4

Managers can stop sexual harassment from happening at the workplace

In a post-me-too world, sexual harassment is a big danger to every organization. It is not enough to just comply with laws, but companies must be seen to be taking a proactive stance if they do not want to face a huge backlash from social media and possible boycott and disruption of work.

Employees are now opening up on social media with their allegations even before taking the formal recourse available to them. Not only does it pose a threat to the company’s perception in the eyes of the public but also causes hindrances in conducting a proper investigation with regard to the allegation too.

An HR manager has to ensure that not only the provisions of the POSH Act are complied but also mitigate the reputational risks involved for the company. He needs to put in place well defined social media and anti-harassment policies too.

The priority is prevention at all costs. And if it still happens, HR manager has to handle things with a deftness that requires them to understand the law, public policy and media strategy.

#5

HR managers have to ensure compliance with a large number of labour laws

There are more than 41 central labour and employment statutes in India.

If that was not enough, you are also expected to navigate state laws. In some cases, rules to central level legislations have been passed by the state government.

For example, the Factories Act, 1948 is uniform legislation applicable nationwide but state governments have passed rules to the Act.

Sometimes, the state rules of one state are not available in another state. The absence of an online repository makes it difficult to obtain a consolidated set of state rules applicable to different states.

Usually, there are at least 14-16 labour and employment statutes applicable to a particular organization. An HR manager has to ensure compliance through the identification of the applicable labour laws, compliance planning, building reporting structures to discover non-compliance and handle fall outs of non-compliance.

#6

HR managers have to negotiate employment contracts, especially with senior employees

Are you aware of the infamous spat between ex-CEO Vishal Sikka and Infosys? There were major issues with regard to Mr. Sikka’s Employment Agreement.  

In Sikka’s case, there was a provision for severance pay equal to 24 months. The resulting amount was not paid in full which lead to arbitration.

HR managers help in negotiating better contracts to avoid such embarrassments.

Forget better contracts, they have to negotiate the contract. Sometimes lawyers may be brought in to vet a contract, but most of the substantial conditions of employment have to be negotiated.

For example, a release of claims clause, a structured compensation clause with emphasis on performance-based criteria, a well-defined non compete clause are some of the ways in which HR managers ensure better employment contracts.

Likewise, business situations like mergers warrant for special considerations with reference to the top-level executives like drafting a golden handshake clause or a gardening leave clause. Likewise, you may want to insert a clawback clause in some other cases.

#7

HR managers have to come up with and enforcement critical policies

I was speaking to an HR manager of a reputed company while the me-too wave was on. He was considering drafting a dating policy.

Let me put up an interesting question, how will you deal with unused vacation time in case the employee quits? Do you require a vacation payout policy for such a case?

Gone are the days wherein an HR manager’s job was restricted to drafting a standard code of conduct and code of ethics. HR managers need to be proactive in responding to workplace situations that arise and draft policies accordingly. Drafting policies has not remained a mere copy paste job.

Still, most HR managers are not trained to do such work and copy paste is exactly what they resort to.

#8

HR managers have to handle disciplinary proceedings and hand out penalties and punishments

To give you an example, we have laws that classify certain acts as misconduct. In case an enquiry is initiated against an employee, it is the HR manager’s duty to facilitate the long drawn enquiry process from issuing the notice to the employee until the adjudication of the matter.

There are many laws under which different kind of enquiries and hearings have to be held. HR managers also need to understand the principles of natural justice for such proceedings. They need to prepare document trails, preserve records and evidence, hire external experts to investigate or conduct hearings and then enforce decisions.

#9

HR managers have to ensure document keeping and maintenance of records, failing which organization can be at great risk

One reading of the Factories Act along with the supplementary rules will let you know the number of statutory registers from muster rolls to display of notices that an employer has to keep. Failure to perform his obligations can bring about penal consequences in the form of fines, abolishing of licenses and prosecution.

But it’s not just statutory compliance. Even attendance record or an email written by an HR manager or employee can be critical evidence and misplacing the same can lead to grave problems.

There may be a disciplinary hearing, and the minutes of the same not being kept or preserved may lead to very serious repercussions.

HR managers deal with these issues almost every day, whether they realise or not.

#10

HR managers help labour lawyers to build their cases

The HR manager is the best person to know the genesis of an employee related controversy. They also usually have the relevant documents, records and paperwork. He or she would have factual clarity that is very much needed to build either a case or a defence by a lawyer.

External counsels, as well as in-house legal counsel, often relies on the expertise and accuracy of the HR’s work to win their cases.

A good HR manager can be a very effective ally of the lawyers of the organization.

#11

Mistakes by HR manager can be very costly to the organization

Suppose you as an HR manager hire someone aged 55 for a sales position under a 2-year contract subject to removal on the ground of failure to perform duties.

In the first year, you notice unsatisfactory performance on the part of the employee but stay lenient on him.

His boss goes to the extent of giving favourable feedback to the employee in the company’s annual performance review to encourage him to do better. Everyone knows that criticism does not inspire people, after all.

Now, after one month the sales department is suddenly forced to fire the employee. The next thing you know that there is a lawsuit filed against the company for breach of terms of the contract, unfair treatment and discrimination.

How would you show that the dismissal was not arbitrary and vindictive?

The HR cannot let such things pass. A mistake by the HR can be very destructive, especially because such mistakes become part of an organization’s DNA over time, exposing it to tremendous risk.

#12

Even a letter or email written by HR manager can be used against the organization

In July 2016, A Microsoft HR team member had sent an invitation to the interns for the company’s annual party event. In an attempt to look hip and grab the attention of the youth,

The email included slangs and a phrase like “HELL YES TO GETTING LIT ON A MONDAY NIGHT.”

The company became a subject of ridicule and trolling on social media. It caused reputational damage to the company so much so that the company had to issue an apology saying the email was “poorly worded and not in keeping with our values as a company.”

Therefore HR managers not only need to be careful with addressing issues that might arise out of their written word but also take care of the brand message and corporate culture their company represents.

Do you think this was bad? Worse things happen when HRs don’t draft their mails carefully. Companies have paid millions in fines and compensations to employees and government for such mistakes.

What if a mail sent to prospective employees was found to be a violation of a non-solicitation agreement?

What if there was inaccurate legal jargon in a mail for dismissal that the lawyer of the employee latches on to and exploits?

What if there was a mail trail that indicated a policy was being relaxed when that was not actually intended but the HR manager forgot to add that disclaimer?

Such things have happened time and again, which is why it is a great idea to spend time honing your drafting and make it precise. This is another benefit of learning the law.

#13

HR managers will now play a critical role in data protection as laws are becoming stringent

A Virginia based company that bills itself as “the choice provider of cybersecurity services to the federal government” — reported a breach of employee tax data which was handed directly to fraudsters after someone inside the company got caught in a phisher’s net.

It’s alarming to see a cybersecurity company facing data privacy issues. You may say that, data security is an IT issue but hang on. It’s mostly a people issue. It’s far easier to get data from people than from behind the proverbial firewall.

HR managers have a role to play in data privacy. Their role is not limited to defining a data privacy policy alone. In the wake of GDPR, HR managers have to understand data laws and become a partner in enforcing them. Compliance is an ongoing process and employees are also required to be trained in this regard on a continuous basis.

#14

HR managers go on to become directors at the board level, and for that knowledge of corporate governance is essential

What’s common between Mr Shrinivas Kandula, the chairman of Capegemini India and Nigel Travis, the CEO of Dunkin’ Donuts? What about Mary Barra, CEO of General Motors and Anne Mulcahy who was CEO of Xerox for 10 years?

Well, they have started in HR roles before moving up the ladder.

Leadership is about transforming an institution, and if you want to have a sustainable transformation, you need to develop leaders who will continue the journey after you. HR is an essential part of that kind of generative leadership.

Surely all HR managers have the secret desire to move up the chain and become board members or even CEO. You know what could help in that journey? Apart from everything else, a solid knowledge of the law will be a great aid. Start with labour law but move towards learning corporate governance laws eventually.

It’s not easy, but adding such disparately different skills can actually increase your chance of moving upstairs.

#15

HR managers have to prevent malpractices such as employees running away with equipment, data or confidential information or misuse the same

Suppose an employee working under the supervision of a chief marketing officer is quitting.

Now he may have the company’s laptop, client list, confidential trade information.

How do you ensure that such equipment or information is not misused?

Well, many companies just write an email to the employee at the time of quitting that they are barred from sharing confidential information.

However, in today’s day and age, that might not be enough. It is the HR manager’s responsibility put in place exit memos covering for situations that not only reaffirm the terms of employment that were agreed upon but also instructs the employee to deposit equipment,  frame non-compete and non-solicitation terms, delete information representing engagement with the company on social media etc.

And then if such rules are broken, HR managers have to take leadership in enforcing those rules through legal routes.

#16

HR managers have to know local laws and keep themselves updated with amendments

The Modi government has an agenda of simplifying labour laws. While no sweeping reforms have been made, some of the recent amendments have changed the nature of the game.

Take the Payment of Wages Act, for instance. The ceiling of salary, with respect to which employees it apply to, has been raised recently to INR 24,000, bringing a large number of employees under its umbrella and companies for whom it has suddenly become very relevant.

Similarly, a very interesting situation has presented itself after the recent amendments of the Maternity Benefits Act as women have to be given 6 months of paid holiday when they get pregnant while they are employed.

Given that churn of employees leaving is high in the private sector, and employees often leave within 1 or 2 years of joining a job, it has very cumbersome for employers who don’t expect employees to stay beyond a year or two, to hire married women. Legal claims of maternity benefits being denied as well as companies looking to defend themselves against such claims are suddenly on the rise.

In a recent landmark ruling, the Supreme Court has decided on the question of allowances to be included in the salary for the purpose of PF calculation which will have a significant bearing on the take-home salary of the employees.

HR managers need to keep abreast with such amendments and developments all the time.

#17

HR managers may even have to hold senior management level people accountable, a very risky proposition

In 2016, there was a lawsuit filed by an employee of Yahoo Inc. against the CEO of the company Marissa Mayer alleging arbitrary use of the performance review process. Now, the question arises that to what extent can the HR manager hold the senior management accountable in such cases?

What if there is a sexual harassment complaint against top-level executive in your organization? What if an employee blows the whistle against a senior level official in case of major accounting fraud?

What if the HR managers had the guts to guide the senior management better in the famous Maruti labour controversy at the Manesar plant?

HR managers who are well trained in labour and employment laws can confidently and assertively deal with such tricky situations.

#18

HR managers have to ensure social security benefits actually reach the employees and ensure that the social security laws are implemented

Employees are unaware of the social security benefits accruing to them.

There are over 64,000 crore rupees unclaimed provident fund dues lying with the government.

The people to whom that money is owed do not know how to do the necessary paperwork.

It is a similar thing with gratuity, accident benefits, compensation under different statutes. We have an article on gratuity related laws in India on iPleaders blog, which is read by over 1000 people a day.

Such facts and figures tell us that somewhere there is an anomaly in following the procedure in either depositing or collection of the amount in the name of social security.

What if basic paperwork is missing, in such a case how will you enforce your claim? Social security welfare forms the crux of labour laws and employment laws.

HR managers need to ensure social security laws applicable to your organization are not driven for the sake of compliance but the employee benefits accruing under them actually reach the employees without any hassle.

And what can I say about the number of directors who have seen the insides of jail due to PF frauds and HR managers who have lost jobs and face over the same!

#19

HR can mitigate risks of litigation through diligence and precautions

Do you know when Steve Wozniak had quit Apple, he was barred from working with the Company’s design agencies under a clause in the employment agreement?

For a company like Apple which leverages on its brand image, a non solicit and non compete clause is extremely important.

However, under section 27 of the Indian Contract Act, 1872, agreements in unreasonable restraint of trade is violative of the Constitution.

In this light, an HR manager’s role in drafting an employment agreement which effectively protects the Company’s interests without going outside the contours of law is extremely important.

Everything the HR does can reduce or increase legal risks for a company.

The question is whether the HR understands the full spectrum of consequences or not. And to have the right kind of understanding, knowledge of law is critical.

#20

As they shift industries, laws applicable can drastically change, requiring HR managers to rapidly adopt

Imagine, you are the HR head of a large MNC conglomerate with diverse operations across multiple locations.

At one moment you might be dealing with employee issues sitting in your Corporate office in Mumbai. At another instance, you might get a sudden phone call that there have been issues with contract labourers, strike at the Jamshedpur factory of the Company.

It’s not easy.

What is worse is when you have worked in manufacturing for 15 years and kind of got familiar with all the laws, and then have to shift to a software company or media company. Or even a conglomerate that deals with 15 different industries. But the packages are far better in such places!

HR managers need to be versatile and learn new laws and regulations quickly. That is the demand of the time.

Where do you learn all these things?

Of course, we have a solution for you. There is only one course in the world that addresses each of these concerns, and that is available on this link. The batch closes soon, so hurry up. You can do the course from the comfort of your home/ or even during commute.

If you are a lawyer or non-HR person and read it till here, do me a favour and forward this mail to an HR manager.

Thanks and all the best!

The post 20 reasons Why HR Managers must learn Labour Law appeared first on iPleaders.

This article is written is by Wardah Beg, student, Faculty of Law, Aligarh Muslim University.

Introduction- The need to extract deleted data

We exchange an unbelievable amount of data every day, in the form of texts, audio clips, pictures, videos, gifs, etc on social media like WhatsApp, Facebook, Instagram and other numerous platforms. One might, after having deleted their data voluntarily or by mistake, feel the need to extract it back, for instance, to prove someone’s online misconduct in the court or for other personal reasons. Such digital and electronic evidence is admissible in the courts, and lawyers of aggrieved parties do make the most of such evidence.

Evidentiary value of chat transcripts

Chat transcripts, screenshots, etc can be used as evidence in court proceedings. A certificate, as prescribed under Section 65 B (4) of the Indian Evidence Act, 1872 is presented along with the chat transcripts, data records, pictures, etc.

Can such data be extracted

Yes, there have been cases where such data has been extracted by law enforcement agents and used in court cases. Though there is a question of how much of it can actually be retrieved by an individual seeking it for himself, or with the help of authority.

Even though Facebook tells you how once you have deleted something, it is gone forever and becomes irretrievable, it is essentially false, as the founder himself confessed. Once anything has been done on the internet, it leaves a digital footprint, and even if it may seem to have extinguished apparently, it can still, albeit with much difficulty, be retrieved.

To preemptively clear the misconception about third party softwares and apps (fonedog, fonepaw, DecipherText etc.)  circling around, it is better in the interest of user’s safety that these apps are not trusted with one’s personal data. Secondly, it can lead to further irrevocable loss of data.

Extracting Deleted Data from Facebook

The first step to try if one wants to access their deleted data from Facebook, is by trying to download a copy of their data from Facebook.  This includes your personal messages on Facebook, status updates, photos, etc. This can only be done if you still have an account on Facebook, and did not permanently delete it.

Facebook has not made clear what data exactly is stored and what gets deleted once a person deletes their account. According to the company, all the personal information of a person gets deleted and only log data is stored permanently, and since it is in store, it is obvious that it can be accessed, and can also be of help to a person in their case.

According to a report by The Guardian, Facebook also stores a user’s personal information like Contact details, call logs, etc. Many people have reported that the zip file of their personal data that they downloaded from Facebook contained this information. Consumers have questioned this and Facebook has been severely criticized, especially in the aftermath of the Cambridge Analytica scandal. According to the company, it stores this data to generate relevant content. For instance, address books are stored so that it can find who among one’s family and friends is on Facebook. However, it is unclear if this data can be retrieved from Facebook, even by Law Enforcement agencies, since this information is not actually ‘uploaded’ on or is relevant to Facebook. Here is a list of the data that can be downloaded as a ‘copy’ from Facebook. This includes very specific data like the places you’ve checked into, place you last logged into Facebook from, the events you attended, your likes, you religious and political views, friends you have removed, and even your facial recognition data.

Information for Law Enforcement Agencies

The aforementioned steps were for when a user of Facebook needs to extract details of his/her own account. But, depending upon the urgency and severity of the case, sometimes, the government of a country may want to extract details of a suspect.

Law Enforcement Agencies can approach Facebook in the initial stages of a criminal investigation through this portal. A one-hour access can be obtained by signing in with an official, government issued email address. Once access has been granted, the portal can be used for an hour for making preservation requests and record requests. To make such a request the official will have to submit details like Case Number, User ID/Vanity URL/Email address of the account that has to be preserved, and a PDF/JPG/PNG copy of the legal documents related to the case.

Next, the official will be required to submit what the request is being made through, for example- search warrant/court order, etc. Then, select the nature of the case, for ex. Child abuse, sexual harassment, terrorist activity, assault, theft, etc. The request can then be sent, and an official email will be received on the provided email address when the files are ready. According to Facebook, this can take at most 2-4 weeks. We will discuss emergency requests later in this write-up.

A note: It is suggested that the official makes sure that the request is spelt out in detail, because some very specific data, like metadata of a picture, that could be relevant in one’s case is not usually sent by the company unless it is specifically asked for.

Facebook has provided the following guidelines for law enforcement agents for extraction of data:

Preservation of Data

According to Facebook, they do not preserve account details or records unless it has been asked through a formal legal process. In case the authority wants Facebook to preserve data for a criminal investigation, it will preserve it for 90 days by default, but this can be extended using the law agency portal link provided above.

Emergency Requests

For an emergency request, where there is an imminent threat to someone, the official can submit the request through the same portal, specifying the severity and urgency of the situation. Moreover, according to Facebook, “In emergencies, law enforcement may submit requests without legal process. Based on the circumstances, we may voluntarily disclose information to law enforcement where we have a good faith or reason to believe that the matter involves imminent risk of serious physical injury or death”

Broad Requests

According to Facebook, they do not accept very wide or ambiguous requests, so it is advised to specify exactly what is being asked for.

Testimony

Facebook does not provide testimony support. But, a certificate can be acquired by submitting the request through the portal.

Cost-reimbursement

It may charge a certain sum per request. These fees can be waived by Facebook in case of emergency requests, or requests where there is a case of harm caused to a child etc.

Request by post

In case such a request has to be made through post, here is the official postal address for doing so, though it may take a longer time to receive data through post:

1 Hacker Way Menlo Park

CA 94025

United States

Extracting Deleted Data from WhatsApp:

• The first method a user can try to retrieve lost or deleted data, is through restoring data that is automatically stored on drive. This is only uploaded if the user had selected the option to backup to drive automatically or had manually backed up. Usually, WhatsApp backs up data by default every night at 2 a.m.
• When that method does not work, you can try connecting your phone to a PC and following these steps:

1. Open the disk of your Android and go to Whatsapp> Media
2. Here, you will find your images, audios and videos

• Or, a user can request their own account information from WhatsApp, by following these steps:

1. Open Whatsapp. Go to Settings > Account > Request Info
2. Click on Request Report.
3. The request will be sent to Whatsapp and you will receive a file with details associated to your account.

This is why it is easier for police and law enforcement agencies to access user data when they physically possess the suspect’s mobile phone. As in the case of Facebook, WhatsApp records can also be retrieved by law enforcement agencies by contacting the company. Here is the portal. The rules and process is similar, too, as the company is owned by Facebook.

Posting a request will take time, therefore it is recommended to reach out through the portal. In any case, the postal address is:

WhatsApp Inc.

1601 Willow Road

Menlo Park, California 94025

United States of America

The data that is given by the company, in contrast with Facebook, is way less. Whatsapp is known only to have shared metadata with police officials, like what numbers has a person been in contact with, and for what duration, IP addresses etc. The details, on the whole, around what exactly WhatsApp can and does share with legal authorities are not clearly specified anywhere.

Another loophole that can be used by an aggrieved party is that of Whatsapp’s policy of sharing user’s data with Facebook, since WhatsApp does share some of user’s important data with Facebook, it definitely must lie in Facebook’s possession. But this can only help when a user is on both the platforms.

According to WhatsApp spokesperson Carl Hoog, who visited India in 2017, the contents of Whatsapp messages are not accessible by anyone except the sender and the receiver, due to WhatsApp’s end-to-end encryption. Nevertheless, the metadata provided by the company could prove extremely useful in some cases. It has reportedly helped the the US Government reveal a cocaine and methamphetamine racket, and also helped reveal an ISIS affiliated terrorist in the US.

Cyber forensic tech and data retrieval

According to Nikhil Khandekar and Sachin Sathe, founders of a firm named Prevoyance Forensic Technologies, deleted data from nearly all popular social media platforms can actually be retrieved, as long as it is not overwritten They claim that they can restore this data, and though this may be encrypted data, they have special softwares to decrypt it. The firm has helped police departments and agencies in Nagpur solve cases relating to theft, etc. They have also helped private persons find missing persons, lost devices, etc.

Authorities to approach

According to Facebook’s Government Requests Report, the Government of India is the second country after the United States to make the most requests for reports and account details. Even in the first half of 2017, it made 9,853 requests to Facebook for data, and upto 6,324 times in the first half of 2016.

As mentioned above, in the cases of Facebook and WhatsApp, the same will work for other social media platforms. It is suggested that a user takes initial possible steps themselves to retrieve their own data, because the legal pathway to it is long and tedious. In case the matter is urgent, it is suggested that an application be filed to the court requesting the court and the concerned police officer or other officials from any other investigative agency to to order the concerned social media company to produce the needful records.

Extracting data from Internet Service Providers (ISPs)

Legal extraction of IP addresses and other information relating to an IP address, such as timestamps, textual data, pictures, videos, etc. is retrievable through one’s ISP. An IP address is a set of four numbers (generally), that is assigned to every device that signs up internet services. Internet Service Providers have a log of all the activities of an IP user that subscribed to him.

An IP address contains the following data:

-who is the owner and operator of the network address,

-what is the associated domain name/ computer name,

-current geolocation,

-email addresses, etc.

The Indian Police has tracked down criminals using this method to extract information relating to an IP Address. For instance, in 2011 the Cyber Crime Investigation Cell (CCIC) of Mumbai police was able to trace a runaway boy after tracing the boy’s online activity. They traced the IP address from where he had uploaded a status and tracked the boy’s location down. There have been various such cases where investigation departments of the police have been able to find missing persons and criminals.

ISP License

Registered companies in India apply for ISP licenses in India. The Licensor, as in the case of UASL licenses, is the Government of India.

• According to Clause 30.1 of the license, the Government has the right to inspect all the sites used by an IP user. The company is required to provide the necessary facilities for doing so.
• Under Clause 34.8, the ISPs are required to maintain logs of all the data of all the users connected and all the services they use, for example, mailing services. All of this data should be accessible by the Telecom Authority in real time.
• According to Clause 34.12 the ISPs shall make a database of all its users and their data with a password controlled access that is available for authorized agencies to access at all times.
• Clause 34.22 makes it mandatory for the ISP to provide any required information of the subscriber to the government at any instant.
• Such data is required to be stored by the ISP for a mandatory period of 1 year, and can be disposed of, after that, unless the Government asks for it to be preserved.
• The current geographical location of the subscriber is to be provided to the government whenever asked for.

Provisions in IT Act

• Section 69 of the IT Act provides the government with power to issue directions for interception, monitoring or decryption of information through a computer resource.
• Section 69 B of the Act contains provisions as to how this can be done. According to Section 69 B (1) the Central Government has the power to authorize any agency to collect data from any computer source, by carrying a notice out in the Official Gazette of India.

ISP Data extraction by Police

Section 91 of the CrPC empower the courts or any officer in charge of a police station to ask anybody for any document or any other ‘thing’, or summon any person with such a document or thing in the court. Therefore, data extraction through IP address is a great way of tracking a person’s online activity and make the criminal investigation easier.

An aggrieved individual or group can also file an application to the court where their case is already being heard, for extraction of IP data. The application will move in this direction.

You > Court > Police > Internet Service Provider (ISP)

In case of any additional information, clarifications or corrections, drop me a mail on mirzawardahbeg@gmail.com

The post Extracting Deleted Data from Social Media Platforms and Internet Service Providers (ISPs) appeared first on iPleaders.

This article is written by Ramanuj Mukherjee, CEO, LawSikho.

Listen, a lot of you have been waiting for a long time to take one course or the other. Some of you have exams coming up, or just a busy spell at work so you can’t start a course right now.

Normally I have no problem with that. You should do the course when you are ready. However, just wanted to give you a heads up. Prices are going up from 15th April. It’s a substantial increase. We already announced the increase about 20 days back.

If you want to do the course later for some reason, no problem. Buy it now before the price goes up, and let us know by dropping a mail so that we keep it on record and let you join the course in a later batch. It could be a batch of your choice, no problem. We will even give you access to material immediately, but you can start classes later with a later batch.

After 15th, if you request us to let you join at the old price, I will not be able to help.

I am making it as easy for you as possible to join.

If you are going to take a course, the window from today to 14th April is the best. I do not want you to pay several thousands extra on a course given that you have been on our mailing list for so long.

Let me know if you need any help or have any question at all. We would be happy to answer them. You can call us on 011-4084-5203.

Here are the courses of which prices will be going up:

Diploma:

Diploma in Intellectual Property, Media and Entertainment Laws

Diploma in Cyber Law, Fintech Regulations and Technology Contracts

Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution

Diploma in M&A, Institutional Finance and Investment Laws (PE and VC transactions)

Diploma in Entrepreneurship Administration and Business Laws

Executive certificate course:

Certificate in Labour, Employment and Industrial Laws for HR Managers

Certificate Course in Companies Act

Certificate Course in Insolvency and Bankruptcy Code

Certificate Course in Advanced Corporate Taxation

Certificate Course in Advanced Civil Litigation: Practice, Procedure and Drafting

Test Preparation

• Judgment Writing and Drafting Course for Judicial Services 

The post Very Important: LawSikho Price Alert appeared first on iPleaders.

This article is written by Udita Gupta, pursuing Diploma in Entrepreneurship, Administration, and Business Laws, from Lawsikho. She is a Gujarat National Law School Alumni.

It is essential for a country’s economy that its securities market have robust health. The more well developed a country’s securities market, the better are the chances of economic growth and development.

Beginning of Securities market

The earliest stock exchange was set up in Amsterdam in 1602 and it was involved in buying and selling of shares for Dutch East India Company. Prior to this, brokers existed in France dealing with government securities. It must be noted that the first real stock exchange started in Philadelphia in the United States during the late 18th century. Later, the New York Stock Exchange became popular and Wall Street became the hotspot of brokerage activities. Earlier stockbrokers were largely unorganised, but later most of them joined hands to form institutions and organisations.

Security Trading in India goes back to the 18th century when East India Company began trading in loan securities.

Derivatives market have been functioning in India in some form or the other for a long time. Corporate shares with the stock of Bank and Cotton presses started being traded in the 1830s in Mumbai with Bombay Cotton Trade Association being the first to start future trading in 1875 in the arena of commodities trading and by the early 1900s, India had one of the world’s largest futures industry. Going back to 1850s the roots of stock exchanges in India sprouting when 22 stockbrokers began trading opposite the Town Hall of Bombay under a banyan tree. The tree is still present in the area and is known as Horniman Circle.

This trading continued till a shift to banyan trees at the Meadows Street Junction, which is now known as Mahatma Gandhi Road, a decade later. The shift was an ongoing one and number of brokers gradually increased finally settling in 1874 at what is known as Dalal Street. The group of 318 people came together to form “Native Shares and Stock Brokers Association” and the membership fee was Re 1. This association is now known as Bombay Stock Exchange (BSE) and in 1965 it was given permanent recognition by the Government of India under the Securities Contracts (Regulation) Act (SCRA), 1956. BSE is also the oldest stock exchange in Asia and it is been 144 years since it has been formed. Following its formation, Ahmedabad stock exchange came into operation in 1894 trading in shares of textile mills. Another development in the history of stock exchanges began with the Calcutta stock exchange opening up in 1908 and began trading shares of plantations and jute mills. It was followed by Madras Stock Exchange starting in 1920.

Post-independence Era and Reforms in the market

There were a series of reforms in the stock market between 1993 and 1996 which further lead to the development of exchange-traded equity derivatives markets in India.

There was a certain element of trading system called “badla” involving some elements of forwards trading which had been in existence for decades. This practice led to the growth of undesirable market practices and to check this development it was prohibited off and on till it was banned in 2001. In the 1980s stock broking services were restricted only to the wealthy class who could afford them. With the spread of the Internet, stock broking became accessible.

In the 1990s stock market witnessed a steady increase of stock market crises. An aspect of these crises were market manipulation on the secondary market. Following are the incidents which prompted the development of the stock market:-

1. 1992: Harshad Mehta – The first “stock market scam” was one which involved both the GOI bond and equity markets in India. Thereafter, manipulation was based on inefficiencies in the settlement system in GOI bond market transactions. An inflation came about in the equity markets and market index went up by 143% between September 1991 and April 1992 and the amount involved in the crises was Rs 54 billion.
2. 1994: MS Shoes – Here the dominant shareholder of the firm, took large leveraged positions through brokers at both Delhi and Bombay stock exchanges, to manipulate share prices prior to rights issue. After the share prices crashed, broker defaulted and BSE shut down for three days in a consequence.
3. 1995: Sesa Goa – Another episode of market crises for the BSE, was the case of price manipulation of the shares of Sesa Goa. This was perpetuated by two brokers, who later failed on their margin payments on leveraged positions in the shares and the exposure was around 4.5 million.
4. 1995: Bad deliveries of physical certificates: When anonymous trading and the nationwide settlement became the norm by the end of 1995, there was an increasing incidence of fraudulent shares being delivered into the market. It has been the expected cost of encountering fake certificates in equity settlement in India at the time was as high as 1%.
5. 1997: CRB. C.R. Bhansali created a group of companies, called the CRB group, which was a conglomerate of finance and non-finance companies. Market manipulation was an important focus of group activities. The non-finance companies routed funds to finance companies for price manipulations. The non-finance companies were tasked with sourcing funds from external sources, using manipulated performance numbers. The CRB episode was particularly important in the way it exposed extreme failures of supervision on part of RBI and SEBI. The amount involved in the episode was Rs 7 billion.
6. 1998: BPL, Videocon and Sterlite – This is an episode of market manipulation involving the broker that engineered the stock market bubble of 1992, Harshad Mehta. He seems to have worked on manipulating the share prices of these three companies, in collusion.
7. 2001: Ketan Parekh. This was triggered by a fall in the prices of IT stocks globally. Ketan Parekh was seen to be a leader of the episode, with leveraged positions on set of stocks called the “K10 stocks”. There are allegations of fraud in this crisis with respect to an illegal badla market at the Calcutta Stock Exchange and banking fraud.

The above instances have had a disruptive effect on the market that is(i) pricing efficiency (ii) intermediation between households investing in shares and firms financing projects by issuing shares which was resolved by reform measures by the government.

In the post-independence era, the BSE dominated the volume of trading. However, the low level of transparency and undependable clearing and settlement systems, apart from other macro factors, increased the need for a financial market regulator, and the SEBI was born in 1988 as a non-statutory body. Later it was made a statutory body in 1992.

Thereafter, in 1952 cash settlement and options trading were prohibited by the government and derivatives trading shifted to informal forwards market. At present, the government allows for markets based pricing mechanism and shows less scepticism towards derivatives trading. The prohibition on futures trading of many commodities was lifted starting in the early 2000s and national electronic exchanges were created. In the 1980s stock broking services were used only by wealthy class who could afford them. With the rise of the Internet, stock broking services became accessible to even the common man. Major organisations became involved in stock broking activities. 

Although in the wake of Harshad Mehta scam in 1992, there was a pressing need for another stock exchange large enough to compete with BSE and bring transparency to the stock market. It leads to the development of the National Stock Exchange (NSE). It was incorporated in 1992, became recognised as a stock exchange in 1993, and trading began on it in 1994. It was the first stock exchange on which trading was conducted electronically. In response to this competition, BSE also introduced an electronic trading system known as BSE Online Trading (BOLT) in 1995.

Thereafter, BSE launched its own sensitivity index, the Sensex, known at present as the S&P BSE Sensex, in 1986 with 1978-79 as the base year. This is an index of 30 companies and is a benchmark stock index, measuring the overall performance of the exchange. Equity derivatives were introduced by exchange in 2000. Index options launched in June 2001, stock options in July 2001, and stock futures in November 2001. India’s first free-float index, BSE Teck, was launched in July 2001.

Its competitor, NSE launched its benchmark exchange, the CNX Nifty, now known as Nifty 50, in 1996. It comprises of 50 stocks and functions as a performance measure of the exchange. In terms of electronic screen-based trading and derivatives, it has left behind its competitor BSE by introducing first of its kind products and services.

Stock exchanges at present

After the incorporation of BSE and NSE, 23 stock exchanges were added not including the BSE. However, at present, there are only seven recognised stock exchanges which are:-

1. Calcutta Stock Exchange Ltd.
2. Magadh Stock Exchange Ltd.
3. Metropolitan Stock Exchange of India Ltd.
4. India International Exchange (India INX)
5. NSE IFSC Ltd.

Thus, from the times when buyers and sellers had to assemble at stock exchanges for trading the dawn of IT has made the operations at stock exchange electronic and stock markets have become paperless. Trading facilities can be accessed from home or office on phone or Internet. Hence, with new products and services, rampant growth in stock trading can be foreseen.

The post Evolution of Securities and Investment Laws in India appeared first on iPleaders.

This article is written by Harsh Jain, Senior Associate, LawSikho.

All of us have our struggles and aspirations in our life, no matter how successful or not so successful we are.

And all of us wonder, kya apna time ayega?

I am also one of the strugglers. Even I have some dreams and I want to transform them into a reality.

The best way to make your dreams come true is to align yourself with people who have similar dreams.

Thankfully, I found people who share my dreams or are at least aligned with my dreams. Those people are my colleagues at LawSikho. It started with Ramanuj sir and Abhyuday sir, but then, one by one, an amazing team assembled to work on a vision we all now share. We have some crazy ideas through which we want to change the current situation in the legal education sector of India. We are just getting started, and we are far, far, far away from our destination. We do not even know what we will encounter in our way or how long will it take. However, we believe that “Apna time ayega”. And that’s all we need to keep our faith in the work.

There are various categories of people who think “Apna time ayega”. Yes, you read it correctly. Various categories. All of us have a different kind of approach towards this phrase.

There are some who think “Kya Apna time ayega”, while others pray to god “Apna Time Kab Ayega”, some others just dream about this and say “Ek Din Apna Time Ayega”, others struggle and say “Apna Time Kabhi Nahi Ayega”, some say “If I get these facilities and opportunities, then Apna Time Ayega”, and few others just blame that “Because of so and so person, because of my birth in a poor or a middle-class family or because of not getting exposure to a good college or because of the system of India, I lost all hope, but maybe Apna Time Ayega”.

But there is another category. They say, “Apun Apna Time Layega”.

The “Kya Apna Time Ayega?” types

Those who think “Kya Apna Time Ayega?” that is “Will my time come someday” have a doubt on their capabilities or don’t have any. They can’t achieve anything until either they themselves start building confidence in themselves or find some good mentor who can give some confidence to them but also keep them focussed on the goal. During mentoring students in Dream Job Boot Camp and while coaching Judiciary and legal competitive exam aspirants, I found that these kinds of people have very unstable and fluctuating confidence. Sometimes they are very confident that they can do anything in life, while within some hours they are into some kind of depression that they can’t do anything in life. They need regular (sometimes daily and sometimes multiple times daily) confidence building, coaching and management. They need to build a very positive environment around them that can keep reinforcing their positive thought patterns and discourage negativity.

The “Apna Time Kab Ayega?” types

Those who think “Apna Time Kab Ayega?” i.e. “When my time will come?”, are just sitting idle and think that one day their time will come running to them by itself. They are living on the hope of a miracle. They don’t do anything. They don’t even want to do anything. But, they think that one day, their time will also come. I feel very sorry for these people. Even I believe in luck. But luck also works for those who make some efforts for themselves. These kinds of people rarely achieve anything in life. They need a huge push to get where they want to reach. Mentoring them is also a difficult task. No matter how much you push them, they’ll rarely make any efforts.

These kinds of people can further be divided into two categories. First are those who are privileged. They have all the comforts in life. They never had to struggle for anything they wanted. Their parents provided everything to them. Whenever they get scolded from their parents, they think “One day even my time will come”. They only take any initiative when they get some shock. It is usually stoppage of support from the parents or some mishap that moves them into some kind of action.

The second category is those who don’t have anything. No money, no family support, no background of a great college or big city, lack of resources etc. They basically blame lack of resources every time for their situation in life. These kinds of people need a mentor who can bring their inner strength out of them. Once they realize that even they are capable of achieving something, they can do wonders.

Same is the situation of other categories. Most of them wait for god or luck to do something in their life. They blame situations, city, parents, poverty, college, background etc. for all that is happening with them.

I remember one of my Judiciary students. He always blamed his father for not giving him money and support to study in a good coaching centre. Another student was one step ahead. She never sat in the real exam. Why? Just because she thought that she was not prepared enough. However, she always wanted that she gets selected miraculously in the judiciary exam.

The “Aapun Apna Time Layega” types

This is the last category. The probability of success of this category of people is highest. They are self-motivated. They are determined to do anything for success. They do not only taste success themselves, but they help others like them to achieve it.

Are there such people in your environment? That’s good because their enthusiasm and spirit are infectious. Catch the bug yourself if you haven’t already.

They never wait for an opportunity to come to them. They create an opportunity. Even I am from a small city and from a non-NLU background. But I never blamed my background for that. Now I am mentoring people from NLUs all over India during their internships at Lawsikho as well as during our Dream Job Boot Camp. I am trusted at my work, I excel in all criteria and keep improving my standards continuously.

Technically I should have applied for a job. Any normal and sensible person will do that only. People look for job and salary. I looked for my dream. The result was that now our students are getting great jobs because of the mentoring provided by our team of which I am a part.

It’s started with a shift in my mindset. I just came out of my comfort zone of blaming the situation. Instead of applying for a job, I applied as an intern at Lawsikho where I could see my dreams getting successful in future. I worked hard at the right place and at the right time. I have not achieved my dreams yet. But now we are working as a team together to achieve that.

We are in the process of launching our super 12 programs, where we will select 12 candidates from India and will convert them into a super lawyer. They will be taught how to write, how to build their CV, how to draft, how to market themselves, how to build connections, how to get good jobs, how to build their own practice and reputation, how to choose what  they should do in their life, how to research, how to speak in courts or at some seminar or conference, where, what and how to learn when they get new matters or tasks or situations during their jobs or practice or in life, how to manage their juniors and teams, how to manage their clients, how to live a healthy life, how to manage their stress, how to spread legal education to others, and much more.

Generally, in small colleges, there are no regular classes, teachers don’t have the knowledge, and even if they have the knowledge, they don’t prefer to take classes. Even students are not interested in studies. They just want a degree. I utilized this time to study and teach my fellow students and juniors. Slowly I became popular and not only the seniors but also my lecturers started coming to me for studying. One of my lecturers later became a Judicial officer and got married to my other student.

I didn’t stop here. I never waited to get perfect and do something. I created my own facebook page and WhatsApp group and started connecting with students for teaching them. Now, I have a reputation all over India and people from all over the country started shooting random questions from random laws to me. This helped me to revise everything every day without even studying specifically.

I was not satisfied with this also. I knew that in many judiciaries there is judgement writing paper. The problem is that there is no coaching available for preparation of judgement writing. Even if the coaching is available, they call some good judges to take a few sessions who tell them all the complicated things which must be included while legal drafting. However, they don’t know the academic side of this exam. As a result, students don’t know how to deal with such questions in exams. People tell them what are the major things which they should include in a judgement. But they don’t give them proper exercises and feedback on the solutions of the submissions. As a result, they are blank about how to attempt these questions in the actual examination.

I knew this is a big problem to deal with. I wanted to do something in this regard, but I needed a big platform for this. A platform where I can help a large number of students. What could be better than Lawsikho?

So we launched a judgement writing course. In the course, we teach all the legal drafting which comes in the legal competitive exams through practical exercises similar to those which we get in exams, concept sessions and personal feedback to every student. In my next article, I will write about what are the major problems faced by a student while attempting legal drafting questions in competitive exams and how to deal with them. Although you will be well equipped to attempt your exams after that, if you want similar exercises and proper feedback on those exercises in addition to a detailed concept session on each topic with exam perspective, you can take our Judgment Writing and Drafting Course for Judicial Services.

You can also contact me at 7568795773 for personal guidance regarding these exams.

Take action. You got to bring in your good days with your dedication, vision and hard work.

We can help you. Here are the LawSikho courses that can make a difference:

Diploma

• Diploma in Intellectual Property, Media and Entertainment laws 

• Diploma in Cyber Law, Fintech Regulations and Technology contracts 

• Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution 

• Diploma in M&A, Institutional Finance and Investment Laws (PE and VC transactions) 

• Diploma in Entrepreneurship, Administration and Business Laws 

Executive Certificate Courses

• Certificate in Labour, Employment and Industrial Laws for HR Managers

• Certificate Course in Advanced Criminal Litigation & Trial Advocacy 

• Certificate course in Companies Act 

• Certificate course in Insolvency and Bankruptcy Code 

• Certificate Course in Advanced Corporate Taxation 

• Certificate Course in Advanced Civil Litigation: Practice, Procedure and Drafting 

Test Preparation

• Judgment Writing and Drafting Course for Judicial Services 

The post Kya apna time ayega? appeared first on iPleaders.

This article is written by Srishti Chawla, a 5th-year student at Amity Law School, Noida

Introduction

It is already known that the Indian law of torts is based on the English common law. Thus, the law relating to negligence is adopted and modified by the courts of India on the principles of justice, equity and good conscience. The term Negligence is derived from the Latin word negligentia, which means ‘failing to pick up’. In the general sense, the term negligence means the act of being careless and in the legal sense, it signifies the failure to exercise a standard of care which the doer as a reasonable man should have exercised in a particular situation. Negligence in English law emerged as an independent cause of action only in the 18th century. Similarly in Indian law, the IPC, 1860 contained no provision for causing the death of a person by negligence which was subsequently amended in the year 1870 by inserting section 304A.

Definition of Negligence

According to Winfield and Jolowicz, Negligence is the breach of a legal duty of care by the plaintiff which results in undesired damage to the plaintiff.

In Blyth v. Birmingham Water Works Co, Negligence was defined as the omission to do something which a reasonable man would do or doing something which a prudent or reasonable man would not do.

It can be characterized in three forms-

Nonfeasance: It means the act of failure to do something which a person should have done. For example, failure to carry out the repairs of an old building when it should have been done.

Misfeasance: It means the act of not doing an action properly when it should have been done properly. For example, Doing the repairs of an old building but doing so by using very poor quality materials creating a major probability of a collapse which injures people.

Malfeasance: It means the act of doing something which should not have been done in the first place itself. For example, using products that are not allowed and combustible to carry out the repairs of an old building, therefore, converting the building into a firetrap leading to an accident.

Illustration

Z, An owner of a big dog requests his friend X to take care of the dog while he is away. X leaves the dog unattended who attacks a passerby badly injuring him. Here it will be said that the act occurred due to the negligence of X.

In the general sense, the extent of liability in tort is determined by the number of damages a party has incurred. Consequently, in criminal law, the extent of liability is determined by the amount and degree of negligence.

How is Criminal Negligence Different from Civil Negligence?

• Criminal negligence is said to take place when a person acts in a particular way which is an extreme departure from which a reasonable person would act in a similar or same circumstance. The difference in civil negligence is that the conduct may not be seen as a radical departure from the way a reasonable person would have responded.
• Civil negligence occurs when a person fails to exercise ordinary care or due diligence but criminal negligence relates to a conduct that is considered so extreme and rash that it is a clear divergence from the way an ordinarily prudent person would act and is considered to be more than just a mistake in judgment or distraction.
• In civil negligence, there is a lesser burden of proof because the plaintiff in such a case only has to prove that it is most likely that the defendant was negligent. But in criminal negligence, the plaintiff has to prove “beyond a reasonable doubt” that the defendant was negligent which is the highest standard of proof which means that the evidence is so strong that there is no other logical explanation besides the fact that the defendant acted with criminal negligence.
• The punishment for a person who was liable in a civil negligence case only extends to the extent of damage caused to the plaintiff i.e compensation for the damages.
  In criminal negligence cases, the punishment is much more serious and can be convicted for a prison term, fine and probation supervision. Example the punishment for criminal negligence amounting to death under section 304A of IPC can extend to 2 years of jail and fine or both.
• For example, if someone driving a vehicle under the influence of drugs and alcohol and caused the death of an individual, it would amount to criminal negligence since this is considered extreme carelessness on their part.
  But if a housekeeper in an office is mopping the floor and has forgotten to keep a ‘wet floor’ signboard, any accident that occurs would amount to civil negligence as there was only a lack of due diligence on the part of the housekeeper but not extreme neglect.

Essentials of negligence

To commit the tort of negligence, there are primarily 6 main essentials that are required. An act will be categorized as negligence only if, all the conditions are satisfied namely –

1) Duty Of Care

It is one of the essential conditions of negligence in order to make the person liable.
It means that every person owes, a duty of care, to another person while performing an act. Although this duty exists in all acts, but in negligence, the duty is legal in nature and cannot be illegal or unlawful and also cannot be of moral, ethical or religious nature.

In the case of Stansbele vs Troman(1948), A decorator was engaged to carry out decorations in a house. Soon after The decorator left the house without locking the doors or informing anyone. During his absence, a thief entered the house and stole some property the value of which the owner of the house claimed from the decorator. It was held that the decorator was liable as he was negligent in leaving the house open and failed his duty of care.

2)The Duty must be towards the plaintiff

A duty arises when the law recognizes a relationship between the defendant and the plaintiff and requires the defendant to act in a certain manner toward the plaintiff. It is not sufficient that the defendant owed a duty of care towards the plaintiff but it must also be established which is usually determined by the judge.
In the case of Bourhill v. Young (1943) the plaintiff who was a fishwife got down from a tram car and while she was being helped in putting her basket on her back, a motor-cyclist after passing the tram collided with a motor car at a distance of 15 yards which was on the other side of the tram. The motorcyclist died instantly and the plaintiff could not witness the accident or the dead body since the tram was standing between her and the place where the accident occurred. She had only heard the sound of the collision and once the body had been removed from the place of accident, she visited the place and saw some blood which was left on the road. As a reaction to this incident, she suffered a nervous shock and gave birth to a still-born child of 8 months because of which she sued the representatives of the deceased motorcyclist. It was held that the deceased had no duty of care towards the litigant and therefore she could not claim any damages from the deceased’s representatives.

The case of Donoghue v. Stevenson (1932) has evolved the principle that we each have a duty of care to our neighbor or someone we could reasonably expect to be affected by our acts or omissions. It was held that, despite no contract existed between the manufacturer and the person suffering the damage an action for negligence could succeed since the plaintiff was successful in her claim that hat she was entitled to a duty of care even though the defective good i.e a bottle of ginger beer with a snail in it was bought, not by herself, but by her friend.

3)Breach of Duty to take care

It’s not enough for a plaintiff to prove that the defendant owed him a duty of care but he must also establish that the defendant breached his duty to the plaintiff. A defendant breaches such a duty by failing to exercise reasonable care in fulfilling the duty. In other words, the breach of a duty of care means that the person who
has an existing duty of care should act wisely and not omit or commit any act which he has to do or not do as said in the case of Blyth v. Birmingham Waterworks Co, (1856). In simple terms, it means non-observance of a standard of care.

In the case of Ramesh Kumar Nayak vs Union of India(1994), The post authorities failed to maintain the compound wall of a post office in good condition on the collapse of which the defendant sustained injuries. It was held that postal authorities were liable since that had a duty to maintain the post office premises and due to their breach of duty to do so, the collapse occurred. Hence they were liable to pay compensation.

In the case of Municipal Corporation of Delhi v. Subhagvanti (AIR 1966)
A very old clock tower situated right in the middle of a crowded area of Chandni Chowk suddenly collapsed thereby causing the death of many people. The clock tower was 80 years old although the normal life span of the clock tower should have been 40-45 years. The clock tower was under the control of The Municipal Corporation of Delhi and they had a duty of care towards the citizens. By ignoring to repair the clock tower, they had breached their duty of care toward the public and were thereby liable

4)Actual cause or cause in fact

In this scenario, the plaintiff who is suing the defendant for negligence has the liability to prove is that the defendant’s violation of duty was the actual cause of the damages incurred by him.
This is often called the “but-for” causation which means that, but for the defendant’s actions, the plaintiff would not have incurred the damages.
For example, When a bus strikes a car, the bus driver’s actions are the actual cause of the accident.

5)Proximate cause

Proximate cause means “legal cause,” or the cause that the law recognizes as the primary cause of the injury. It may not be the first event that set in motion a sequence of events that led to an injury, and it may not be the very last event before the injury occurs. Instead, it is an action that produced foreseeable consequences without intervention from anyone else. A defendant in a negligence case is only responsible for those damages that the defendant could have foreseen through his actions.
In the case of Palsgraf vs Long Island Railroad Co(1928), A man was hurrying while trying to catch a train and was carrying a packed item with him. The employees of the railway saw the man who was attempting to board the train and thought that he was struggling to do so. An employee on the rail car attempted to pull him inside the train while the other employee who was on the platform attempted to push him to board the train. Due to the actions of the employees, the man dropped the package. Which had contained fireworks, and exploded when it hit the rails. Due to the explosion, the scales fell from the opposite end of the station and hit another passenger, Ms. Palsgraf, who then sued the railway company. The court held that Ms. Palsgraf was not entitled to damages because the relationship between the action of the employees and the injuries caused to him were not direct enough. Any prudent person who was in the position of the railway employee could not have been expected to know that the package contained fireworks and that attempting to assist the man the railcar would trigger the chain of events which lead to Ms. Palsgraf’s injuries.

6)Consequential harm to the plaintiff

Proving that the defendant failed to exercise reasonable care is not enough. It should also be proved that the failure of the defendant to exercise reasonable care resulted in damages to the plaintiff to whom the defendant owed a duty of care.

The harm may fall into the following classes:-
a.) Bodily harm
b.) Harm to the reputation
c.) Harm to property
d.) Financial Loss
e.) Mental Harm.

When such damage is proved, the defendant is bound to compensate the plaintiff for the damages occurred.

In the case of Joseph vs Dr. George Moonjely(1994) The Kerela high court awarded damages amounting to Rs 1,60,000 against a surgeon for performing an operation on a 24-year-old girl without following proper medical procedures and not even administering local anaesthesia.

Res ipsa loquitur

Res ipsa loquitur is a Latin phrase that means “the thing speaks for itself.”
It is considered to be a type of circumstantial evidence which permits the court to determine that the negligence of the defendant led to an unusual event that subsequently caused injury to the plaintiff. Although generally the duty to prove that the defendant acted negligently lies upon the plaintiff but through res ipsa loquitur, if the plaintiff presents certain circumstantial facts, it becomes the burden of the defendant to prove that he was not negligent.

This doctrine arose out of the case of Byrne vs Boadle(1863)
The plaintiff was walking by a warehouse on the road and suffered injuries from a falling barrel of flour which rolled out of a window from the second floor. At the trial, the plaintiff’s attorney argued that the facts spoke for themselves and demonstrated the warehouse’s negligence since no other explanation could account for the cause of the plaintiff’s injuries.

Thus the following are the three essential requirements for the application of this maxim-

1)The thing causing the damage must be under the control of the defendant or his servants
2)The accident must be such as would not have happened in the ordinary course of things without negligence.
3)There must be no evidence of the actual cause of the accident.

Defenses available in a suit for negligence

1)Contributory negligence by the plaintiff

Contributory negligence means that when the immediate cause of the damage is the negligence of the plaintiff himself, the plaintiff cannot sue the defendant for damages and the defendant can use it as a defense. This is because the plaintiff in such a case is considered to be the author of his own wrong. It is based on the maxim volenti non fit iniuria which states that if someone willingly places themselves in a position which might result in harm, they are not entitled to claim for damages caused by such harm.

The plaintiff is not entitled to recover from the defendant if it is proved that-

1)The plaintiff by the exercise of ordinary care could have avoided the consequence of the defendant’s negligence.
2)The defendant could not have avoided the consequence of the plaintiff’s negligence by an exercise of ordinary care
3)There has been as much want of reasonable care on the plaintiffs part as on the defendants part and the former cannot sue the latter for the same.

The burden of proving contributory negligence rests on the defendant in the first instance and in the absence of such evidence, the plaintiff is not bound to prove its non-existence

In the case of Shelton Vs L & W Railway(1946), while the plaintiff was crossing a railway line, a servant of the railway company who was in charge of crossing shouted a warning to him. Due to the plaintiff being deaf, he was unable to hear the warning and was consequently injured. The court held that this amounted to contributory negligence by him.

2) An Act of God

An Act of God is a direct, violent and sudden act of nature which by any amount of human foresight could have been foreseen and if foreseen could not by any amount of human care and skill have been resisted. Thus such acts which are caused by the basic forces of nature come under this category.For example storm,tempest,extraordinary high tide,extraordinary rainfall etc.

If the cause of injury or death of a person is due to the happening of a natural disaster, then the defendant will not be liable for the same provided that he proves the same in the court of law. This particular defence was talked in the case of Nichols v. Marsland (1876) in which the defendant had a series of artificial lakes on his land. There had been no negligence on the part of the defendant in the construction and maintenance of the artificial lakes. Due to unpredictable heavy rain, some of the reservoirs burst and swept away four country bridges. It was held by the court that the defendant could not be said to be liable since the water escaped by the act of God.

3) Inevitable Accident

An inevitable accident can also be called as a defense of negligence and refers to an accident that had no chance of being prevented by the exercise of ordinary care, caution, and skill. It means a physically unavoidable accident.

In the case of Brown v. Kendal (1850) the plaintiff’s and defendant dogs were fighting and their owners attempted to separate them. In an effort to do so, Defendant beat the dogs with a stick and accidentally injured the Plaintiff, severely injuring him in the eye. The Plaintiff brought suit against the Defendant for assault and battery. It was held that the injury of the plaintiff was as a result of an inevitable accident.

Conclusion

Negligence as a tort has evolved from the English law and accepted by the Indian law as a substantially important tort. As discussed negligence is of two types, civil and criminal and each has various repercussions. In order to prove that an act was negligent, it is necessary to prove all the essentials namely duty, breach of duty, damages and actual and proximate cause. An important maxim regarding negligence i.e Res Ipsa Loquitur is used by the courts when a negligent act cannot be explained. Also, the defences in a suit for negligence can be used by the defendant to defend himself from a suit issued by the plaintiff.

The post Negligence In Law Of Torts appeared first on iPleaders.

This article is written by Ramanuj Mukherjee, CEO, LawSikho.

Clients will always come to you with something out of syllabus. That’s why the idea of training lawyers involve teaching them how to think like a lawyer.

You need to deal with questions that you have never thought of before and develop the skill to find the right answer or come up with arguments in unexpected situations.

There are two ways we do this in lawsikho courses.

First, we give you two exercises every week that require you to solve a real-life problem. However, every month, one exercise is to write an article on a topic that we give to you.

This topic is not something you can read from the study material and reproduce. You have to go and do your own research. You have to learn to frame issues. You need to learn how to find answers to legal questions you have not encountered before by reading up relevant law, synthesizing different arguments which are often conflicting in nature and learn to present everything in a way that is persuading.

To enable this, we have extra classes from time to time, training our students on how to write, how to publish and even how to use these articles to strengthen your network. They also get personal feedback on what they write and get to improve their writing skills.

How would it be if you could write an article and publish every month, starting in April? Would that improve your CV? Could that help you to land new clients or impress future recruiters?

Could it help you to become a thought leader in your chosen field of law?

We also emphasize on publishing these articles our students write. Most publish on iPleaders blog.

See some of the articles our students have written recently and published:

Analysis of the Recent Case Laws on Definition and Scope of Financial Debt

Should Insolvency Professional Beware- Examination and Analysis of Disciplinary Actions against IPs

Comparative Analysis of the laws on Insolvency before and after the enactment of the Insolvency and the Bankruptcy Code

Role of NCLT in Promoting the Interests of Banks and Financial Institutions

Sedition Law in India – A brief discussion

Everything you need to know about Intestate Succession

What is GAAR and How Does it Impact M&A Transactions

Corporate Social Responsibility in India: Triumphs and Failures

What is Transfer Pricing? Why is it important?

Settlement of cases post initiation of Insolvency Resolution Process: Case law analysis pre and post the inclusion of Section 12A in IBC

Want to join us and experience the amazing and pathbreaking courses we offer at LawSikho?

Prices are going up by 15-20% from 15 April. Take advantage of last financial years prices by enrolling right away.

Check out the courses here:

Diploma

• Diploma in Intellectual Property, Media and Entertainment laws 

• Diploma in Cyber Law, Fintech Regulations and Technology contracts 

• Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution 

• Diploma in M&A, Institutional Finance and Investment Laws (PE and VC transactions) 

• Diploma in Entrepreneurship, Administration and Business Laws 

Executive Certificate Courses

• Certificate in Labour, Employment and Industrial Laws for HR Managers

• Certificate Course in Advanced Criminal Litigation & Trial Advocacy 

• Certificate course in Companies Act 

• Certificate course in Insolvency and Bankruptcy Code 

• Certificate Course in Advanced Corporate Taxation 
• Certificate Course in Advanced Civil Litigation: Practice, Procedure and Drafting

Test Preparation

• Judgment Writing and Drafting Course for Judicial Services 

The post How do we train Students to think like a Lawyer appeared first on iPleaders.

The article is written by Bhavna Singh, Fairfield School of Law, Kapashera affiliated to Indraprastha University, Delhi.

An agreement enforceable by law is a contract but it is not mandatory that all the contracts are made by the parties and with the proper procedure which includes an offer, acceptance, and consideration. Sometimes contracts are made in the form of obligations imposed by courts. These contracts are called Quasi-contracts. Chapter 5 of the Indian Contract Act, 1872 deals with quasi-contracts.

What is Quasi-Contract?

A contract when parties have not previously decided obligations on each other is a quasi-contract. These contracts come in existence when there is a dispute with regards to payment for goods and for services provided. The aim of these contracts is to prevent one party from getting unfair benefit which he doesn’t deserve. Quasi-contracts works on the maxim “No man must grow rich out of other’s loss”. It follows the principle of justice, equity and good conscience. Quasi Contracts are generally known as constructive or implied-in-law contracts.

Let’s take a look at an example of Quasi Contracts

Seema bought a cake. The shop seller promised to deliver it to Seema’s home. Later, a delivery boy delivered the cake to Megha’s house. Megha, believing that it is her birthday gift, consumed the cake. Seema and Megha were not in a binding contract but here the court may impose an obligation on Megha to return or pay for the cake.

Case Law

Mahabir Kishore & Ors vs State Of Madhya Pradesh on 31 July, 1989

In the above mentioned case the appellant firm was allotted contract for manufacture and sale of liquor for the year of 1959 and for the subsequent period from 1st January, 1960 to 31st March, 1961 for 2,56,200 and 4,71,900 respectively by the M.P. Govt. who also charged 7-1/ 2% over the auction money as mahua and fuel cess. The writ petition challenging the government’s right to charge this 7-1/ 2% were pending in the M.P. High Court, the Govt. announced that it would continue to charge it. Later, in two cases Madhya Pradesh High court decided that charging of 7-1/ 25 is illegal. Even after the judgments govt. continued charging 7-1/ 2%. The appellant came to know about the judgment in September 1962. In 1964 the appellant gave notice to govt. to refund all the sum charged by the govt. In such a condition, there is a fictional contract between govt and appellant that govt. is liable to pay for all the damages suffered by the appellant.

Theory of Implied Contract

Quasi-contracts are generally based on the theory of implied contracts. Implied contracts are not written contracts, they come into existence due to the action of the parties.

Illustration

A buys a refrigerator from B. The implied contract between A and B is that the refrigerator is fit to keep food cool. If the refrigerator is not capable of doing that then A is entitled to either return it or change it with any other working refrigerator.

Theory of Unjust Enrichment

Quasi-contracts are based on the theory of unjust enrichment, which says that nobody must enrich or get benefited at the expense of others. If such a condition arises then the person who got benefited must pay to the other.

Illustration

A bought a laptop from B. while doing online payment A mistakenly added a wrong account number and the whole amount for laptop got transferred to C’s account. C got benefited at the expense of A, or we can say that C got unjustly enriched at the expense of A.

Let’s take a look at the situations defined in Indian Contracts Act, 1872 when can Quasi Contract be made.

Section 68 to 72 deals with these conditions

Section 68

Claims for necessaries supplied to a person incapable of contracting, or on his account

Section 11 of the act says that every person is allowed to enter into a contract who is of the age of majority, who is of sound mind and not disqualified from contracting from any law to which he is subject.

What is the majority age?

Section 3(1) of The Majority Act, 1875 says that every person who is domiciled in India shall attain the age of majority after completing the age of eighteen years.

In simple words, a person who hasn’t attained the age of majority/ is a minor or a person who is of unsound mind can’t enter into a contract but under some circumstances, these incapable persons are liable to fulfill the conditions of a contract which actually arose due to consequences of a quasi-contract.

Section 68 of the Act says that if a person supplies some life necessaries to a person who is incapable of entering into a contract then the supplier is entitled to be reimbursed from the property of that incapable person.

Case Law

Nash Vs Inman

In the above-mentioned case, a minor ordered eleven fancy waistcoats. The tailor after supplying the same came to know that the minor already had sufficient waistcoats and the coats wouldn’t be counted as the necessaries. In such condition, the tailor is not entitled to be reimbursed as he failed to prove that the clothes were actually ordered by a minor.

Sometimes the minor is also bound to reimburse for the expenses made by a person that he is legally bound to support.

Example

A minor has a wife who is a minor as well additionally she is not capable to pledge her credits by herself. The minor husband is liable to pay for all the necessary expenses done by the wife. Minor parents are also liable to take care of their children.  

Section 69

Reimbursement of the person paying money due by another in payment of which he is interested

Section 69 says that if a person pays an amount which another person is bound to pay then the first person is entitled to be reimbursed by the other person.

Illustration

A buys a house for one lakh Rupees, but because of lack of money, A pays an amount of fifty thousand rupees. Later, A’ s sister B pays the remaining amount. B is entitled to be reimbursed by A.

Section 70

Obligation of person enjoying benefit of non-gratuitous act

Article 70 of the Act says that if a person lawfully does something for another person or delivers something to a person without an intention to do such act out of ‘kindness’, and another person enjoys the benefit thereof, the latter is liable to pay for the benefit he has enjoyed.

Principle behind this section is that no person shall enjoy the benefit of any other person’s property. If one does then he/she is bound to pay for the benefit.

Illustration

-A, a salesman leaves some biscuits at the door of B. B believing that as his own consumes all the biscuits. B is liable to pay for all the biscuits.

-A saves B’s house from fire. A is not entitled to be compensated from B as the circumstances show that B has acted gratuitously.

Section 71

Responsibility of finder of goods

Section 71 says that if a person finds something which he knows belongs to someone else, the person has the same responsibility as that of a bailee.

Who is a bailee?

Section 148 of The Indian Contract Act, 1872 says that a bailment is a contract where one person delivers goods to another person for some purpose.

The person delivering the goods is the bailor and the person who is receiving the goods is the bailee.

A bailee has no ownership on the goods, however, it is his responsibility that he shall deliver back the goods when all the requirements defined in the contract have been fulfilled.

Illustration

Radha came to Seema’s home for a house party. While using the washroom she kept her expensive ring on the washbasin and forgot to take it back after using the washroom. Later, Seema found it. Here Seema has the same responsibilities as a bailee does. She is responsible to return the ring to its owner.

Section 72

Liability of a person to whom money is paid, or thing delivered, by mistake or under coercion

Section 72 says that a person is liable to pay if money has been paid or something has been delivered to him by mistake or under coercion (forcefully).

Illustration

Ram and Radha jointly owe hundred rupees to Rekha, Ram alone pays the sum to Rekha. Later, Radha without knowing this fact pays a hundred rupees again to Rekha. Rekha is bound to return hundred rupees back to Radha.

Conclusion

Quasi Contracts are implied contracts which are not made due to the proper procedure provided in the Indian Contract Act, 1872. These are the obligations imposed by the court. If someone is getting enriched by the expense of others. The enriched person is liable to pay.

The post What is Quasi Contract? appeared first on iPleaders.

This article is written by Kaushal Kumar, pursuing Diploma in Cyber Law, Fintech Regulations and Technology Contracts offered by Lawsikho as part of his coursework.  Kaushal works as Senior Manager at Genpact.

Someone posts a cover song on YouTube.This happens thousands of times a month. And whether the video is a live band performance or a boy singing from his high chair, most of these cover songs are posted without the song’s copyright holder’s permission – in other words, they violate someone’s copyright.

If the copyright owner complains, YouTube can remove your video. And if you are a repeat offender, your YouTube channel – and all its data – can be permanently deleted. In rare cases, you may even be sued for copyright infringement.

You can obtain licenses to post the music and an accompanying video to avoid problems. This is what you need to know about the copyrights of music and the type of licenses you need.

Copyright Laws for Music

Songs are copyright – creative works are protected. To copyright songs or copyright music, songwriters only need to record their compositions in a tangible way, including on paper, film, tape or digital media. Copyright must not be registered and the work must not include a copyright symbol.

This means that any recorded song is protected (or once was) by copyright. Its creators – composer and lyricist – hold the original copyright in a musical composition, but songwriters typically transfer their copyrights to a music publisher who helps promote the song to administer royalty payments and enforce copyright.

Song copyright gives its owners a group of rights, including the right to publicly perform the song, produce a song – based derivative work, reproduce the song, distribute copies and publicly display the song.

Song copyright gives its owners a group of rights, including the right to publicly perform the song, produce a song – based derivative work, reproduce the song, distribute copies and publicly display the song. You can’t perform or distribute them legally on YouTube for all other songs unless you get a license.

Cover Song Licensing

Once a musical work has been published, anyone can obtain a mechanical license to record a cover version of the song. When copies or recordings are distributed for sale or rent to the public, a song is “published.”There is no publication of a live performance.

If you pay a royalty fee based on estimated revenue from your cover song, the copyright owner of the song must give you a mechanical license. A mechanical license can be obtained from the Harry Fox Agency or other authorized agency.  Harry Fox Agency is a provider of rights management and collector and distributor of mechanical license fees on behalf of music publishers in the United States. HFA has over 48,000 music publishing clients and issues the largest number of licenses for physical and digital formats of music.

The mechanical license only covers your YouTube cover’s audio portion. You will need a synchronization license, also called a “sync” license, to post the video with the song. You must negotiate a copyright holder sync license. Although copyright owners must grant mechanical licenses, they do not have to give you a sync license, nor is there a fixed license fee.

Nearly no one who creates cover song videos jumps through the hoops to secure the appropriate license before posting these videos to YouTube. Are they being prosecuted? Do you have your videos smacked with a notice of copyright infringement or a request for a take-down? Yes, from time to time. But for the most part, no.

Why not? YouTube has developed a monetization system to enable rights holders and content creators to circumvent the usual licensing process for covering song videos. But before we get into that, let’s talk about the license you need to secure if you want to make sure that your cover song video was published by the book, on the up-and-up, and was completely legit and legal.

As discussed above we need a sync license.

Some of the many rights granted to a composition’s publisher are:

•         the right to decide who can “synchronize” the song with images
•         the right to determine the circumstances in which the song is “synchronized”
•         and the right to set monetary compensation conditions

You can pair their composition with moving images in your cover song video by obtaining a sync license (or synch license) from the song publisher.

Note that the owners of sound recordings also have the same rights, but since you make your own version of an existing song, you don’t have to deal with any entity that owns the master recording. You only have to negotiate with the publisher.

What if my song is a slideshow or a single still image? Yes, it’s still considered a video in the eyes of the law – and you still need a sync license.

Since the publisher holds all the cards, they can ignore your application for a sync license. You can be told to go on a hike. They can say, sure you can post our song’s cover video as long as you pay us a billion dollars. Or they can be reasonable and give you permission as long as you meet some realistic criteria and pay them an agreed upfront fee or an ongoing royalty division (or both).

It’s like a lot of work. It’s for most artists, especially YouTubers, who create a new cover song video every week. So this next method of licensing is useful.

The good news is that many music publishers have already agreed with YouTube to use their songs in exchange for a portion of the YouTube ad revenue. You can find out if the song you want to use is already agreed by contacting the music publisher directly.

Consequences of Posting a Cover Song without a License

The copyright holder depends on the consequences of posting a cover song without a music license.

Some copyright owners don’t care about YouTube covers – they increase the exposure of a song and can introduce the music of the songwriters or original performers to a new audience. If fans post songs, a band probably won’t risk alienating them by taking their videos down.

Other copyright owners object to their work’s unlicensed use. A few years ago, Prince famously had YouTube remove a video that showed a toddler dancing to one of his songs.

If the owner of the copyright objects, YouTube may remove your video or negotiate a deal for the owner of the copyright to earn revenue from advertisements on YouTube.If YouTube removes the copyright video, it will also strike your YouTube channel.YouTube will delete your channel, videos, subscribers, likes, views and comments after multiple strikes. It can be devastating if you’ve worked hard to grow your channel.

YouTube cover songs are fun and can give up – and – coming musician’s great exposure. Before you post a cover song, however, it’s important to understand the licenses that you need to do legally. And before you spend a lot of time and money recording your music video, it’s wise to get those licenses.

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.                    

The post How to Publish a Cover Version of a Song on Youtube appeared first on iPleaders.

This article is written by Rajeev Awasthi, pursuing a Diploma in M&A, Institutional Finance and Investment laws (PE and VC transactions) from LawSikho.

Introduction

The Indian tax and regulatory framework provide different routes to carry out M&A transactions in India. The Companies Act of 1956 provided the concept of mergers and acquisitions. The merger and acquisition channel is undertaken when two or more profit entities combine their assets and liabilities into a new entity or into one of the existing entities either to support the business, to make the business more profit yielding, acquisition of technologies, access to more diversified sectors or global markets etc. The provisions relating to merger and amalgamation are detailed in sections 391 to 396A in Chapter V of Part VI of the Act. The sections 390 to 394 of the Companies Act 1956, deals with the schemes of arrangement or compromise between an entity, its creditors and/or its shareholders.

It is to be noted that under the Companies Act 2013, provisions have been made to have a single forum in the form of National Companies Law Tribunal (“NCLT”) to approve of all merger, acquisition and de-merger schemes. The NCLT is yet to be set-up and until it is formed such power to approve schemes lies with the High Courts.

According to the report published in Grant Thornton’s Annual DealTracker, the Indian private equity and venture capital. According to the report in the first half of 2018, there were more than 600 deals worth more than $75 bn, double the half-yearly revenue compared to the same period last year. The dealmakers recorded over 200 M&A transactions valued at over $65 bn, which is double growth compared to the same period last year. The telecom sector led the M&A activity: The Bharti-Indus merger ($14.6 bn) and the Reliance Jio-RCom merger ($3.8 bn). This was followed by the E-commerce sector which saw the Walmart-Flipkart deal ($16 bn).

Applicable Laws

The governing laws depend on the parties involved in the transaction. If both the acquirer and acquiree are located in India, they will be governed by Indian Law. However, in case one party is located offshore, the parties can mutually agree to a jurisdiction offshore.

For an acquisition finance transaction involving a non-resident party, the most important legal rules are the:

• Foreign Exchange Management Act 1999 and its related rules and regulations.
• Foreign investment policy of the Government of India notified through various press notes.

For listed companies, the applicable laws are the:

• Securities and Exchange Board of India Act 1992 (SEBI Act) and its related rules, regulations and guidelines.
• SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011 (Takeover Code).
• SEBI (Issue of Capital and Disclosure Requirements) Regulations 2009 (ICDR Regulations).
• SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (LODR Regulations).
• Indian Contract Act, 1872.

For acquisitions financed through debt, the applicable laws include the:

• Transfer of Property Act 1882.
• Securitization and Reconstruction of Financial Assets and Enforcement of Security Act 2002 (SARFAESI Act).
• Recovery of Debts due to Banks and Financial Institutions Act 1993.
• Old Companies Act.

• Income Tax Act 1961.

Different types of creditors defined under the Insolvency and Bankruptcy Code, 2016

The Insolvency and Bankruptcy Code is aimed at protecting the interests of small investors and makes the process of doing business a cumbersome-less process. The introduction of IBC has not only made the distinction between different types of investors clearer but also simplified the process of resolution and liquidation of corporate debtors.

A ‘creditor’ is a person to whom debt is owed. A debt is a liability or obligation in respect of a claim, due from any person.

The IBC has coined the concept of ‘Financial Creditor’ and ‘Operational Creditor’ that is distinct from the Companies Act of 2013 which did not classify the term ‘Creditor’ in detail.

The section 5(7) of IBC, defines a ‘Financial Creditor’ as “a person to whom a financial debt is owed and includes a person to whom such debt has been legally assigned or transferred”. The financial debt has been classified under section 5(8) of IBC as a debt along with interest if any which is disbursed against the consideration for time value of money.

The section 5(20) of IBC, defines an ‘Operational Creditor’ as any person to whom an operational debt is owed which has been legally assigned or transferred. The Operation debt is defined as a debt in respect of the provision of goods and services. The expression includes all the trade creditors whom the corporate debtor contracts as part of its operations and services.

Step by Step Process

1. A meeting of creditors and members is called by making an application with the NCLT. Along with the below set of information:

• • latest financial position of company
  • auditor’s report of the company
  • any pending investigation or enquiry against the company
  • Not less than 3/4th of the creditors should provide consent to the corporate debt restructuring.

2. Once the NCLT calls a meeting of the creditors and shareholders, a notice has to be dispatched to the registered address of the creditors and shareholders individually with

• • Details of compromise or scheme of arrangements statement.
  • Valuation Report copy.
  • Effect of such scheme on creditors, shareholders etc.

3. Voting by Polls or through electronics means: At least 3/4th of the creditors and shareholders’ present in the meeting and voting should approve of the scheme. After which the auditor of the company has to file a certificate with NCLT confirming the accounting treatment in accordance with Sec. 133 of Companies Act, 2013.
4. Under section 230(9) of Companies Act, 2013 NCLT has the power to call off the meeting with creditors, if 90% of these crediotrs approve of the scheme by way of affidavit.

Inter-creditor Agreements

1. These are governed by the Indian law and the borrower is not included.
2. This arrangement provides for the rights and arrangements of various classes of creditors.
3. The agreement lays out the ranking and the sharing of proceeds between various lender groups, voting by lenders, waivers and decisions including decisions in relation to defaults.
4. All payments made by borrower and shared amongst the class of creditors in a pro-rata basis.

Role of creditors and shareholders under Merger Provision

1. The companies involved in the merger make an application before the Company Court which is a specific bench of the High Court and which has jurisdiction over the company to call meeting of its respective shareholders and/or creditors.
2. A meeting of the creditors/ shareholders of the merging entities is held.
3. If more than 3/4th of the creditors and shareholders’ present and voting in this meeting are in favor of the merger, and if such merger is sanctioned by the Court then it becomes binding on all the creditors or shareholders of the company.

Schemes of Compromise or Arrangement under The Companies Act, 1956 (Sec. 390-394)

1. The creditors are divided into appropriate classes to achieve at settlement and each classes consent to scheme is obtained.
2. The scheme must be approved by majority in number and 75 per cent in value of creditors in each class present and voting at the meeting.
3. After approval from each class of creditor, the Court must approve of the scheme.
4. It is a time consuming process as the court has to hear all the objecting creditors.

Corporate Debt Restructuring Governed By The Reserve Bank Of India

1. This scheme applies to companies which have obtained financing from several banks and have outstanding debts of more than Rs. 100 million (US$ 2 million).
2. The re-structuring can be carried out by creditors within 90 days (and extended up to 180- days) of submitting the matter to the restructuring process.
3. It becomes binding on all creditors if 75 per cent of the lenders by value and 60 per cent by numbers agree to the scheme.
4. The CDR guidelines additionally offer exit options to any creditor who does not agree to the restructuring. A dissenting creditor has the provision to sell his/ her stake to any majority creditor at a price to be agreed, or to any other lender who agrees to be bound by the terms of the restructuring. This system is purely contractual and operates on the basis of a creditor-debtor agreement and inter-creditor agreements.

Provisions provided to Creditors under the Bankruptcy Code vs. SARFAESI Act

1. Under the Bankruptcy Code, 75% of the Creditors must approve of a sale of business while, under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act 60% of the secured creditor’s approval is required.
2. Secured and Unsecured Creditors are not distinguished under the Bankruptcy code on voting rights in the committee

Existing Powers of Creditors and Proposals

The Companies Act of 2013 empowers the Creditors to approve any scheme of merger or amalgamation if a specific threshold is met, which is 3/4th of the aggregate creditors of the target company. The Act does not distinguish between unsecured and secured or financial and operational creditors.

1. A creditor with an outstanding debt of at least 5% of the total outstanding debt of the amalgamating company can object to the merger scheme before the National Company Law Tribunal. During mergers, the amalgamating company should ensure that it passes all its assets and liabilities to the merged company which in this case should be inclusive of trade dues to the operational creditors.
   1. Reliance Communications and Aircel Limited merger (role of creditors with less than 5%debts): According to a report from Debtwire, a plea was filed with the appellate tribunal by a group of small creditors to block the scheme of arrangement for the merger of Reliance Communications’ wireless business with Aircel Limited. In this case the NCLT’s order dated August 14, 2017 was challenged with NCLAT. The filing with NCLAT was against NCLT’s decision of upholding the appeal on the grounds that the appeal was made by a consortium of 14 creditors including the appellant Thomas Cook (India) Ltd. Who combined had less than 5% claims against either of the companies objecting from the proposed merger. To arrive at its decision NCLT cited Section 230 of Companies Act, 2013 (discussed above: minimum threshold of creditors against a debtor should be 5% to object of a scheme of arrangements). The conflict in judgment provided by NCLT and decision of creditors to move to NCLAT occurred that the creditors were of the view that the consortium of 14 creditors believed that the 5% threshold should not be applicable to the creditors as Section 230 covers the procedures for scheme meeting for shareholders and creditors. However, the NCLT hearing was based on the citation that the scheme was already approved by the shareholders of the two companies and thus the 5% threshold would be applicable. It can be noted here that if NCLAT also objects to the plea of the consortium of creditors, they can still move up to Supreme Court to challenge the scheme of merger.  (Read full case filing to NCLT here.) The appeal was later withdrawn (see NCLAT’s principal bench’s order here). However, this case was important study since, it shows that no matter what size of creditors, it can be ugly if such consortium of creditors are permitted to object from such schemes.
2. The Insolvency and Bankruptcy Code of 2016, empowers the operational trade creditors with a minimum payment amount default of Rs. 1 lakh to initiate the corporate insolvency process against a merging corporate debtor. However, if the debtor disputes this by filing an arbitration reference the claims of operational creditors under the code become pointless.
   • The NCLT currently lacks sufficient powers to examine whether the disputed debts by the corporate debtor is genuine. The operational creditor becomes ineligible to pursue an insolvency resolution process due to such disputed debt claims raised by the corporate debtor.
3. Under the current scheme the operational creditors are provided no representation in the committee of creditors which approves the insolvency scheme of the corporate debtor. To protect the interests of operational creditors as a separate class it becomes important to provide them sufficient representation based on certain thresholds.
4. Citing the Mobilox Innovations Private Limited v. Kirusa Software Private Limited resolved by the Supreme Courts orders, in case the unsecured operational trade creditors are able to prove a default in the payment of trade dues, they may choose to file a civil suit under the Code of Civil Procedure to recover such dues. However, such a process is time-consuming and tedious.
5. In case the operational trade creditor is able to prove that corporate debtor has prevented distribution among creditors by means of a criminal breach of trust or dishonest or fraudulent removal or concealment of property. In such situations, the operational creditor can initiate criminal action seeking arrest of key managerial personnel of corporate debtor.
6. There have also been cases where clarity has been brought out whom to classify as a Financial Creditor. In the Nikhil Mehta & Sons (HUF) & Ors. v. M/s AMR Infrastructures Ltd. (NCLT Delhi) case, the NCLAT overturned the decision of NCLT and ruled that the even the buyer of Real Estate under an ‘Assured return’ plan will be classified as a ‘Financial Creditor’ for the purpose of Insolvency and Bankruptcy Code. Such class of Financial Creditors would, therefore, be eligible to initiate corporate insolvency process against the corporate debtor, which in this case was the AMR Infrastructures Ltd., in lieu of non-payments of Assured returns and non-delivery of the residential unit. The NCLT’s reason for overturning the appeal was the citation of the fact that the agreement between the builder and appellant was ‘pure and simple agreement of sale and purchase of a piece of property and has not acquired the status of a financial debt as the transaction does not have consideration for the time value of money. The NCLT held, that disbursal of monies ‘against the consideration for the time value of money’ which is a pre-requisite for the debt to qualify as a ‘financial debt.

Conclusion

To conclude the government needs to set up a mechanism to provide more transparency to the merger and amalgamation process and more law enforcement to the sector to save creditors and class of creditors from raising genuine claims which we have discussed above. Additionally, the Companies Act or Bankruptcy Code should add legal provisions to check if a corporate debtor is obligated to settle all the dues to the unsecured trade creditors before undertaking any scheme of restructuring or amalgamation.

The different reforms of the government, such as GST, IBC, RERA and Housing for All, had a visible positive effect in the first half of 2018. That said, it would take a while to see the full benefits of these reforms. The expectation is also to see a near-term return from the Housing for All scheme and PSU bank recapitalization (which would support credit growth) along with NPA resolutions. The IBC amendments recently passed by the Parliament as many distressed assets come up for sale at attractive valuations will also further support M&A. This is especially true for capital-intensive sectors such as real estate, infrastructure, power and cement. A good capital market and strong regulatory reforms, including the insolvency law, are signs of depth and maturity, and this makes the Indian market more attractive.

 Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.                    

The post Impact of Creditors in an M&A Transaction appeared first on iPleaders.

In this article, Saloni Sharma discusses Annuity taxes in India.

Introduction

Employees all over the world wish to plan their retirement in order to have a secure and safe future for their families. One such way of ensuring a steady stream of income is through Annuity which is sold by different life insurance companies in India. Annuity contract means a contract under which the issuer agrees to make payments for a period of time determined in whole or in part by reference to the life expectancy of one or more individuals. An annuity is a contract between you and the insurance company wherein you pay either a lump sum amount of money or in a series of transactions to obtain a regular payment for life either immediately or after some time. The money can also be obtained either throughout life or for some limited amount of time.

How does Annuity work?

An annuity is an insurance product and is generally used as a retirement plan by people in our country. The investor invests money as an annuity under a contract with the insurance company, the company further invests the money and pays back the returns generated by it to the investor. The investor can either make a lump sum payment or a series of payments to the company and the money so generated can either be obtained immediately after the investment (monthly, quarterly, annually or as a lump sum payment) or after a few specified years.

An annuity is also a good investment to turn a substantial lump sum into steady cash flow for the future (for example- a winning a lottery, cash prize or otherwise).

The payout of the annuity is determined by various factors like the age of the investor, the time period for investment, the payout time etc.

The individual is also often given an option to obtain the payout either lifelong or for just a few years say for example for a period of 10 years.

Rule no. 89 of the Income-tax rules states ‘For the purpose of providing annuities for the beneficiaries, the trustees shall-

• enter into a scheme of insurance with the Life Insurance Corporation established under the Life Insurance Corporation Act, 1956 (31 of 1956) [or any other insurer as defined in clause (28BB)
  of Section 2 of the Income-tax Act, 1961], or

• accumulate the contributions in respect of each beneficiary and purchase an annuity from the said Life Insurance Corporation of India [or any other insurer] at the time of the retirement or death of each employee or on his becoming incapacitated prior to retirement’.

Types of Annuity

Annuity can be of various types and may be modified according to the requirement of the investor and is classified broadly into two categories on the basis of the time he/she wishes to receive the returns.

• Immediate Annuity

The Annuity where the investor begins to receive the returns on his money immediately without any accumulation and vesting phase. This type of Annuity is ideal for a person approaching retirement soon since he begins to receive a fixed amount of money regularly.

• Deferred Annuity

The annuity where the returns are provided after the accumulation period i.e. after a certain date. These are mostly pension plans under which annuity starts only after a certain time.

This can further be divided into two phases-

• Accumulation Phase- the phase where the individual starts collecting and investing the money, it commences from the day the first investment/premium is made.
• Vesting phase- this phase commences from the day the individual starts receiving the returns or pension.

Deferred annuity is most commonly available in India in the form of pension plans by various insurance companies containing the two above-mentioned phases i.e. the accumulation phase and the vesting phase. Investors under these plans pay a premium to the company periodically until the day of their retirement (accumulation phase) and start receiving the returns soon after their retirement as soon as the vesting period starts till the time of their death.

Benefits of an annuity plan

1. Provision for a fixed income post retirement – The concept of annuity or pension plan helps the customer to get fixed amount of money every month after retirement in the form of returns on the money they deposited for the annuity plan.
2. Works as an Insurance– Certain plans also cover the provisions for health/life insurance otherwise you can opt to receive the returns anytime pre-retirement in case of an emergency. A customer must compare the various plans available to him/her while opting for a plan.
3. Tax benefits may be provided under certain plans– The individual under certain plans can also save a certain amount of taxes depending on the plan under the provision of Section 80C of the Income-Tax Act, 1961.
4. Monetary help in times of need– Many annuity plans where a lump sum payment is made (towards) for a plan the investor is also given an option to obtain lump sum returns which can be obtained anytime even before the completion of the accumulation time and before the vesting time.

Disadvantages of the Annuity plan

1. Higher returns need higher risks– An investor who wishes to gain higher returns after retirement through annuity may not be satisfied with the regular non-risky options available to him because of which he may have to opt for more risk-taking options of investments available to him.
2. Taxes on the returns- The investor in the accumulation period may not have to pay taxes but the returns received in the vesting period may be taxed.
3. More beneficial for early investors- Since the amount of returns received depend on the investing period, the investors who participate early in the plan of annuity, for example, a 26 year old investor as compared to a 35 year old investor earning the same amount of money per annum, will receive more amount of returns at the end of his accumulation period.
4. Only a marginal amount of tax is saved on the purchase of an annuity.

Various options available under the Annuity plan

There are various options with respect to the returns received investments, investment period (accumulation period), extra benefits attached to the plan etc. apart from the deferred and immediate annuity.

Some of the broad options provided to the investors are listed below:

• ‘With or Without cover’ Annuity

A cover basically means a life cover under which the family of the investor is paid lump sum amount of money in the event of his/her death. On the other hand, in case of an annuity without cover, the amount accumulated till the date of death of the investor is given to the family upon his death.

• Life annuity

Returns as pension are paid to the investor till his death. The spouse of the investor may also be paid the pension after the investor’s death if the option is so chosen.

• Guaranteed period annuity

The returns or pension is given to the investor even after his death.

• Annuity certain

Under this, the investor receives the amount for a specifically mentioned period of time. In case of death of the investor his/her beneficiary receives the sum till the mentioned time of the annuity expires.

• National Pension Scheme (NPS)

National Pension System (NPS) is a pension cum investment scheme launched by Government of India to provide old age security to Citizens of India and is regulated by Pension Fund Regulatory and Development Authority (PFRDA). National Pension System Trust (NPST) established by PFRDA is the registered owner of all assets under NPS.

SBI life- Annuity plus, HDFC New Immediate Annuity plan, ICICI Pru Immediate Annuity, LIC Jeevan Akshay, Reliance Immediate Annuity plan are some of the most popular annuity plans in India.

Provisions related to annuity taxes in India

Section 15 of the Income-tax Act 1961 mentions about the incomes that are chargeable for income-tax as ‘salary’, defined in Section 17.

• Sub-clause (ii), clause 1 of Section 17 of the Income-Tax Act 1961 considers annuity and pension to be a form of salary. Income-tax chargeable from these salaries are calculated with respect to Section 16 of the Act which states that a sum of money equal to one fifth of the individual’s salary or five thousand rupees whichever is less, is to be deducted ‘in respect of any allowance in the nature of an entertainment allowance specifically granted by an employer to the assessee who is in receipt of a salary from the government’, and a deduction of the amount of money paid by the assessee on account of tax on employment to the State or to any one municipality, district board, local board or other local authority in the State by way of taxes on professions, trades, callings, and employments shall not exceed two hundred and fifty rupees per annum.
• Under Clause C of Section 80 of the Income-Tax Act, 1961 which contains ‘deductions in respect of certain payments’ includes

• Sum paid under the contract for a deferred annuity for an individual, on the life of self, spouse or any child
• Sum deducted from the salary payable to Govt. Servant for securing deferred annuity for self, spouse or child for a payment limited up to 20% of his salary
• Contribution to notified annuity Plan of LIC (e.g. Jeevan Dhara) or Units of UTI/notified Mutual Fund. However, If in respect of such contribution, a deduction under Section 80CCC has been availed then rebate under Section 88 would not be allowable.

• Under Section 80CCC, ‘deduction in respect of contribution to certain pension funds’ it is mentioned that Deduction in the computation of his total income of up to a maximum of ₹1,50,000 may be available upon payment of premia for annuity plan of LIC or any other insurer but the premium must be deposited to keep in force a contract for an annuity plan of the LIC or any other insurer for receiving pension from the fund.

• Under National Pension Scheme (as mentioned above) any individual who is a subscriber of NPS can claim the tax deduction up to 10% of gross income under Section 80CCD (1) of the Income-Tax Act, 1961 within the overall ceiling of ₹1.5 lac under Section 80CCE. An additional deduction for investment up to ₹50,000 in NPS (Tier I account) is available exclusively to NPS subscribers under subSection 80CCD (1B). This is over and above the deduction of ₹1.5 lakh available under Section 80C of The Income-Tax Act. 1961.

• For a corporate subscriber, National Pension Scheme additional tax benefit is available under Section 80CCD(2) of the Income-Tax Act, 1961. Employer’s NPS contribution (for the benefit of the employee) up to 10% of salary (Basic + Dearness allowances), is deductible from taxable income, without any monetary limit.

• For Corporates, employer’s Contribution towards NPS up to 10% of salary (Basic + Dearness Allowances) can be deducted as ‘Business Expense’ from their Profit & Loss Account.

Conclusion

Overall, investments in Annuity are a good way to secure and plan your future financially especially for post-retirement income. A buyer has a lot of options to choose from, with respect to insurance companies and various plans offered by them in order to purchase an annuity. With the option of enrolling in The National Pension Scheme, any employee can opt for obtaining pension benefits by just creating an account, the link for the same is provided here. Although various insurance companies provide different benefits, one must keep a few aspects in mind before choosing a plan for themselves like the return rates, safety, liquidity, coverage and time period. it is also advised by various experts from time to time, to maintain an emergency corpus and not invest your entire savings in the annuity.

The post Annuity Taxes in India appeared first on iPleaders.

In this article, Saloni Sharma discusses lynching laws in India.

Introduction

‘In the first six months of 2017, 18 cow-terror attacks were reported which is 75% of the 2016 figure’ according to a report by IndiaSpend.

The Cambridge dictionary defines the term ‘vigilance’ as ‘law enforcement is undertaken without legal authority by a self-appointed group of people’.

The incidents of lynching where a group of people kill a person allegedly for an offence are usually based on some religious prejudice or rumour. The belief of one community about an issue which may not be the same in view and practice of some other community often leads to an unlawful act of mob violence. Most of the cow-related mob attacks were reported highest in states like Uttar Pradesh, Karnataka, Haryana, Gujrat, Delhi, Rajasthan and Madhya Pradesh.

There is also a popular demand by the National Campaign Against Mob Lynching (NCAML) recently to consider the instances of lynching and mob attacks as non-bailable offences with a time-bound trial and establishment of a special law to award convicts with life imprisonment and strict actions against police officials if they fail to control the situation.

Lynching

There is no present codified law against lynching in India as such, however, Sub Section (a) of Section 223 of the Criminal Procedure Code, 1973 contains the provision for persons being charged for an offense jointly when they are accused of the same offence committed in the course of the same transaction which is applicable on two or more people.

Lynching related attacks mostly include attacks by vigilantes, murder and attempt to murder, harassment, assault, gang-rape etc. The victims are often brutally beaten, chained, stripped and hanged causing grievous injuries or death.

A three-judge Bench led by Hon’ble Chief Justice of India, Dipak Misra condemned recent incidents of lynching and mob attacks against Dalit and minority community citizens of the country on 17th July 2018 and asked the Parliament to pass a law considering lynching as an offence separately and determine punishment regarding the same.

The bench commented that no individual in his capacity or as a part of a group (which within no time assumes the character of a mob) can take the law into his/their hands and deal with a person treating him as guilty. CJI is also going to issue certain directions to take preventive, remedial and punitive measures. These steps are being taken in reference to a Writ Petition (Civil) No. 754 of 2016 which was filed under Section 32 of the Constitution of India by a social activist demanding immediate and necessary action against the cow protection groups indulging in violence and removal of violent contents from the social media uploaded by the said groups. The judgement can be referred to by clicking on this link.

The Supreme court also stated that there should not be any doubt that the authorities which are conferred with the responsibility to maintain law and order in the States should make sure that vigilantism, ‘be it cow vigilantism or any other vigilantism of any perception, does not take place’. Mob vigilantism and mob violence should be prevented by the governments by taking strict action and people who ought to report such incidents instead of taking the law into their own hands.

Punishment for lynching

The legal provisions present in our country currently have no laws to deal with lynching or mob attacks, however, the punishment for mob lynching is provided under the ambit of the following laws currently-

• Section 302 of Indian Penal Code–

This section of IPC deals with punishments related to murder i.e. the person who commits murder is punished either with a punishment of death or imprisonment for life. In many cases, the convict may even be liable to penalised.

• Section 304 of Indian Penal Code–  

This section deals with punishment for culpable homicide not amounting to murder which may be

• Life imprisonment for life
• imprisonment for a term which may extend to ten years, and shall also be liable to fine in case the act is done with an intention to kill or cause injury that is likely to cause death.
• imprisonment for a term which may extend to ten years, or with fine, or with both, if the act is done with the knowledge that it is likely to cause death or the injury that is likely to cause death, but without any intention.

• Section 307 of the Indian Penal Code–

 This section deals with the punishment in case of attempt to murder. A person who    does an act with an intention or knowledge that his action may cause death would   be guilty of murder and is to be punished with imprisonment of either for a term of   up to ten years and also be liable to fine.

• Section 323 of the Indian Penal Code

This section defines the punishment for causing hurt voluntarily. Whoever, except if provoked as per section 334, voluntarily causes hurt, is bound to be punished with imprisonment which may extend to one year, or with fine (up to one thousand rupees), or with both.

• Section 325 of the Indian Penal Code

This section deals with punishment for causing grievous hurt voluntarily. Under the provision of this section, if a person, except in case of provocation (as provided for by section 335), voluntarily causes grievous hurt, is likely to be punished with imprisonment of either for a term of up to seven years and also payment of fine.

• Section 34 of the Indian Penal Code

This section highlights the punishment for Acts done by several persons in furtherance of common intention. When a criminal act is done by several persons in regard to a  common intention, each of such persons is liable for that act in the same manner as if it were done by him alone.

• Section 120 B of the Indian Penal Code

This section mentions the punishment for parties participating in a criminal conspiracy. In case the

• Conspiracy is done for an offence which is punishable with death or life imprisonment or with imprisonment for 2 years or more, the offender is to be punished in the same manner as in case of abetment of the offense.
• In case of conspiracy for an offense that is not punishable with death, life imprisonment or imprisonment for 2 years or above, the offender is liable to be punished with imprisonment for up to six months, or with fine or both.

• Section 143 of the Indian Penal Code

Section 141 defines ‘unlawful assembly’ as an assembly of 5 or more people in order to use/show criminal force or to resist the execution of law or criminal trespass etc. which is punishable under Section 143 of the code with imprisonment for up to 6 months, or with fine, or both.

• Section 147 of the Indian Penal Code

Section 146 of the code defines ‘rioting’ as an offense where an unlawful assembly or a member uses force or violence in the prosecution of a common object of the assembly. Section 147 of the code identifies every member of such an assembly guilty of the offense of rioting and is awarded imprisonment for up to 2 years, or with fine, or both. In case of rioting involving deadly weapons the punishment prescribed is for imprisonment for up to 3 years, or with fine, or both.   

• Section 149 of the Indian Penal Code-

This section identifies every member of an unlawful assembly to be guilty of an offence commit­ted in the prosecution of a common object if the members of that assembly knew to be likely to be committed in prosecution of that object.

Manav Suraksha kanoon

National Campaign Against Mob Lynching drafted a bill known as the Manav Suraksha Kanoon (MASUKA) to begin a legal conversation against lynch mobs. Prakash Ambedkar, grandson of BR Ambedkar, and activist Tehseen Poonawalla drafted a law in order to accommodate a new law regarding mob violence by amending article 21 of the constitution of India. It also mandates that the concerned SHO (Station House Officer) of the area would be suspended until a time-bound judicial probe absolves him of charges. This will also work to provide relief to the affected people and rehabilitate them and their families. To know more about MASUKA refer to this blog.

Important cases

1. In the case of Nandini Sundar and others v. State of Chhattisgarh which claimed widespread violations of the human rights of people in Dantewada District and its neighbouring areas in the State of Chhattisgarh with respect to the ongoing armed Maoist insurgency. The state government authorities in Chhattisgarh hired local tribal youth as SPOs and armed them to fight the Maoists, claiming that the practice was a right under the constitution of India to arm local tribal youth with guns to fight the battle against ‘extremist Maoists. The Supreme court observed that it is the duty of the State to strive, incessantly and consistently, to promote fraternity amongst all citizens such that dignity of every citizen is protected, nourished and promoted i.e. it is the duty of the state to prevent crime and maintain harmony in the country.
2. In the case of Mohd. Haroon and others v. Union of India and another a writ petition was filed in relation to the riots erupted in and around District Muzaffarnagar, Uttar Pradesh as a result of communal tension in the city, which forced people to abandon their homes out of anxiety and fear. The petitioners claimed that the local administration instead of enforcing the law allowed the congregation to take place negligently and failed to monitor its proceedings. It was held that the victims of mob violence cannot be discriminated against on the basis of community or religion. The relief of rehabilitation and compensation should be given to all communities. The supreme court also observed that it is the duty of the State Administration in association with the intelligence agencies of both the State and the Centre to prevent recurrence of communal violence in any part of the State. If any officer responsible for maintaining law and order is found negligent, he/she should be brought within the ambit of law.
3. In the case of Archbishop Raphael Cheenath S.V.D. v. State of Orissa and another a Writ Petition was filed highlighting the failure on the part of the State of Orissa in deploying adequate police force to maintain law and order in Kandhamal District of Orissa and in protecting its people during the assassination of Swami Laxmanananda Saraswati and others by Maoists. The court noted that the State Government should inquire into and find the causes for such communal unrest and strengthen the police infrastructure in the district to curb recurrence of such communal violence. The court also emphasised on simultaneous peace-building measures.

Conclusion

‘The law, the mightiest sovereign in a civilized society’

India has witnessed numerous lynching and mob attacks report from various parts of the country recently, most of which is as a consequence of reaction to the beef-ban orders of the government in the country. There is no doubt that the lynching activities based on identity discriminate against a whole community which violates Article 14 and Article 15 of the Constitution of India. Given the situation of mob attacks in the country presently there is a need for separate legislation and strict implementation procedures to curb the attacks and punish the wrongdoers.  

References

1. https://indiankanoon.org/doc/71965246/
2. http://www.livelaw.in/lynching-parliament-may-create-a-special-law-read-supreme-court-guidelines/
3. http://www.indiaspend.com/cover-story/86-dead-in-cow-related-violence-since-2010-are-muslim-97-attacks-after-2014-2014
4. http://lynch.factchecker.in/
5. http://www.indiaenvironmentportal.org.in/files/mob%20lynching%20Supreme%20Court%20Judgement.pdf

 

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In this article, Saloni Sharma discusses what is to be done when the police do not take any action based on the complaint.

Introduction

Article 246 of the Indian Constitution designates police forces as state-subject, i.e. the state governments have the authority to make rules and regulations for the police force under their jurisdiction, contained in their respective state manuals.

The police force is mainly entrusted with the duty of maintenance of law and order, carrying reasonable investigation, prevention, and detection of crimes. Besides civil police states also maintain their own intelligence and crime branches. All senior police posts in various states are occupied by the Indian Police Services (IPS) cadres, recruited on an all-India basis.

The Central Government maintains Central Police forces, Intelligence Bureau (IB), Central Bureau of Investigation (CBI), institutions for training of police officers and forensic science institutions to assist the state in gathering intelligence, in maintaining law and order, in investigating special crime cases and in providing training to the senior police officers of the state governments.

In case of any injury to a person’s rights, whether civil or criminal, the basic procedure starts with the filing of a complaint or First Information Report (FIR) which is explained below:

Complaint

Clause (d), Section 2 of The Code Of Criminal Procedure, 1973 defines a complaint as ‘any allegation made orally or in writing to a Magistrate, with a view to his taking action under this Code, that some person, whether known or unknown, has committed an offence, but does not include a police report’. On receiving a complaint about a non-cognizable offence within the jurisdiction of a police station by an informant, the office in charge mentions the same in the station diary and refers the informant to the concerned magistrate. The magistrate can then order the police to start its investigation for the case. The complaint registered can be a cognizable or a non-cognizable offence.

First Information Report (FIR)

Section 154 elaborates on the concept of ‘information in cognizable cases’ which covers the provision for an FIR as under:

‘Every information relating to the commission of a cognizable offence, if given orally to an officer in charge of a police station, shall be reduced to writing by him or under his direction, and be read Over to the informant’. The information in writing should be signed by the informant and entered in a book by the officer.

A copy of the information provided is given to the informant free of cost.

If an officer in charge of a police station refuses to record the information of the informant then the person (informant) can send the substance of such information, in writing by post, to the Superintendent of Police concerned who, if satisfied that such information discloses the commission of a cognizable offence, shall either investigate the case himself or direct an investigation to be made by any police officer subordinate to him, in the manner provided by

The Code Of Criminal Procedure, 1973 and such officer shall have all the powers of an officer in charge of the police station in relation to that offence. More information on FIR can be obtained on this link.

What happens after an FIR/Complaint is filed?

After an FIR or complaint is filed, the next step is an arrest (in case of a cognizable offence) and investigation. According to clause h, Section 2 of the Criminal Procedure Code 1973, investigation ‘includes all the proceedings under this Code for the collection of evidence conducted by a police officer or by any person (other than a Magistrate) who is authorized by a Magistrate in this behalf’.

The police in order to take action regarding the case, records the statements of the witnesses, examines the evidence, collects forensic proofs and records the same in a charge sheet under Section 173 of the Criminal Procedure Code,1973. If while investigating police doesn’t find enough evidence to prove that the crime has taken place, the case can be closed after justifying the reasons for the same in the court.

How to know the status of your complaint or FIR?

The complainant can receive information about his/her complaint by entering his/her complaint/FIR number, name, district, and the police station. There are also provisions to view the registered FIR and filing a complaint online on the website. These new developments ensure easy access and transparency of the working of various organizations. To access the FIR or check the progress of the complaint the complainant can log on to the official state police website.

For example, for a complaint filed in Delhi, the complainant can log on to the Delhi police official website, click on the option for ‘citizen services’ and choose among various options like ‘view complaint status’, ‘view FIR’, ‘theft e FIR’ etc.

However, if the complainant is not able to access the progress of his complaint he can contact the senior official of the police station or file a Right to Information applies to the Station House Officer (SHO) of the police station to seek knowledge about the progress of his/her complaint. The application should contain the name and address of the complainant, Daily Diary number/FIR number, description of the information required if the information is required by post or in person etc. A sample of the RTI application can be found here.

Click here for more information on RTI application for the progress of police complaint.

No satisfactory action taken by the police yet?

If on receiving the status of the complaint after the complaint has been filed for a reasonable time, a person discovers that no action has been taken by the police on the complaint, the person can follow any of the following procedures:

Superintendent of Police or senior officer

Write an application to the Superintendent of Police concerned, by post under clause 3, Section 154 and Section 36 of the Criminal Procedure Code who in case of a cognizable offence, can either investigate the case himself or direct any police officer subordinate to him to investigate the case. The said officer herein will have the same powers as an officer in charge of the police station in relation to that case.

Magistrate

Approach the corresponding magistrate, who under the provision of clause 3, Section 156 of the Criminal Procedure Code, 1973 or any second-class magistrate empowered by the chief judicial magistrate under clause 2, Section 190 of the Criminal Procedure Code, 1973 can check on the duties and actions performed by the police. The magistrate can take cognizance of an offense as are within his competence to inquire into or try when:

• They receive a complaint of facts which constitute such offense;
• Upon a police report of such facts;
• Upon information received from any person other than a police officer
• Upon his own knowledge, that such offence has been committed.

In case the Magistrate finds that the police has not performed its duty at all, or has not done it satisfactorily, he can issue a direction to the police to take necessary action and can monitor the same. After the completion of the investigation, the police officer has to submit the charge sheet without an unnecessary delay. No action or investigation by such police officer can be questioned on the ground that he was not empowered to do so in this regard.

A magistrate can even ask to re-open the case after the submission of the final report by the police.

Criminal complaint

A criminal complaint can also be filed under Section 200 of the Criminal Procedure Code,1973 which provides for an examination of the complainant and the witness upon oath. It is written and is signed by the complainant, witnesses, and by the Magistrate.

Human Rights Commission

A complaint can be filed with the State Human Rights Commission or the National Human Rights Commission (NHRC) about the inaction of the police for the complaint filed. The National Human Rights Commission provides a facility to register and monitor the progress of the complaint online to the injured. The complaint can be filed by filling your details, victim’s details, and incident’s details, violation of human rights or negligence in the prevention of such violations, by a public servant in the complaint registration form of the National Human Rights Commission. Complaints can be made anytime by calling on the mobile number of the Commission: +91 9810298900. To know more about the National Human Rights Commission click on this link provided.

Writ petition

If none of this is of help, a person can file a writ petition in high court under the provision of Section 482 of the Criminal Procedure Code, 1973.

Conclusion

Though the above-mentioned remedies are available to a person at all times if he discovers that no satisfactory action has been taken by the police in relation to his complaint, it was observed by the honorable Supreme Court of India in case of Sakiri Vasu vs State Of U.P. And Others, 2007 that the complainant should seek and exhaust the provisions for seeking remedy under Section 36 and Clause 3 of Section 154 of the Criminal Procedure Code, 1973 before the concerned police officers, and if that is of no avail, under clause 3 of Section 156 of the code before the magistrate or by filing a criminal complaint under Section 200 Criminal Procedure Code,1973 before filing a petition in the respective high court.

The Supreme Court discouraged the practice of filing a writ petition or a petition under Section 482 of the Criminal Procedure Code, 1973 directly in the high court for a complaint of failure to register an FIR or proper investigation of the case by the police.

References

1. https://indiankanoon.org/doc/445276/
2. https://blog.ipleaders.in/fir-police-complaint/
3. http://www.delhipolice.nic.in/citizen_services.html
4. https://archive.india.gov.in/citizen/lawnorder.php?id=2
5. https://indiankanoon.org/doc/171146908/
6. http://getup4change.org/rti/4425/information-on-progress-of-police-complaint/
7. http://59.180.234.21:8080/citizen/cmpSearch.htm?stov=551N-ZPV0-PPD8-Z0NM-FORN-5DHY-O1GO-XATH

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This article is written by Raghuveer Karan Parakh, pursuing a Certificate course in Insolvency and Bankruptcy Code, from LawSikho.

Who is a Resolution Professional (“RP’)

Section 5 (27) of the Insolvency and Bankruptcy Code, 2016 (“IBC”) defines Resolution Professional to mean an insolvency professional (“IP”) appointed to conduct corporate insolvency resolution process (“CIRP”) and includes an interim resolution professional.

The term “resolution professional” is used herein for IP’s whether in the role of interim resolution professional (“IRP”) or resolution professional

IP is the new breed of professionals accredited by the Insolvency and Bankruptcy Board of India (“IBBI”) as insolvency professional (“IP”). IBBI is the regulator for the insolvency and bankruptcy resolution process and for IP’s under the Insolvency and Bankruptcy Code, 2016 (“IBC”).

Prerequisites for accreditation as IP are passing a designated examination and to undergo a specified training course. They are generally advocates or chartered accountants or company secretaries or chartered management accountants with certain minimum number of years of professional experience.

RP is appointed by the adjudicating authority (National Company Law Tribunal, or NCLT in short, in case of insolvency of corporates and Debt Recovery Tribunal in case of individuals and partnership firms). Upon admission of any corporate debtor by NCLT for corporate insolvency resolution process (“CIRP”), RP is required to take over the entire management and operation of the corporate debtor and run the whole CIRP. Powers of the existing board of directors (or the partners in case of LLP) stands suspended and vests in RP so appointed.

RP is the crucial pillar upon whom rests the insolvency and bankruptcy resolution process under IBC. RP is the critical facilitator for transition from ‘debtor in possession to creditor in control’, the hallmark of IBC – the fundamental change brought about in handling insolvency and bankruptcy resolution process under IBC.

IRP is required to be nominated by the financial creditor under section 7 or by the corporate debtor itself where it chooses to go itself for CIRP under section 10 of IBC. Such nominated insolvency professional takes over as IRP upon admission of application by NCLT unless he/she happens to have any disciplinary proceedings pending against him/her. In that case, NCLT appoints IRP recommended by IBBI. In case of operational creditor under section 9 of IBC, he/she may choose not to nominate an IP. If so, NCLT appoints one recommended by IBBI.

Resolution Professional is appointed by NCLT at the recommendation of the Committee of Creditors (“CoC”) constituted by IRP. IRP may continue as resolution professional if so approved by the CoC.

Let’s now examine the duties of an RP and how onerous or challenging those are.

Roles and duties of an RP

Let’s first look at the duties laid down under IBC. Section 18 of IBC lays down the duties of an IRP while section 20 lays down his/her powers. IRP’s core duties include:

• Protect and preserve the value of corporate debtor’s property and manage corporate debtor’s operations as a going concern (section 20)
• Take control and custody of any assets over which corporate debtor has ownership rights as per its balance sheet or information utility or depository
• Gather all information pertaining to corporate debtor’s assets, finances and operations for determining its financial position.
• Receive, verify and collate claims received from creditors in response to the public announcement
• Constitute a committee of creditors
• File information collected with information utility

Section 25 lays down the duties of an RP besides preserving and protecting the assets of the corporate debtor and to continue its business operations:

•      Take custody and control of all assets including business records
•       Represent and act on behalf of corporate debtor with third parties and exercise rights  for the benefit of corporate debtor in al proceedings – judicial, quas-judicial or       arbitration
•         Raise interim finance where needed
•         Appoint professional as needed
•         Maintain updated list of claims
•         Convene and attend all meetings of CoC.
•         Prepare information memorandum
•         Invite prospective resolution applicants
•         Present resolution plans at CoC meetings
•         File application for the avoidance of transaction where determined so.

What makes the role challenging?

Roles and duties listed above, innocuous as it may appear, in practice are not only time consuming but some are also very complex. It becomes far more challenging at least initially when the promoter group is not cooperating or even resisting which is the case more often than not.

Consider a large corporate debtor spread over multiple locations of registered office, corporate office, branches, manufacturing units and marketing set up across the country.

For IRP/RP to take charge and control of all its assets and run it as the executive chairman is in itself so demanding. Add to that : acting as the only interface between CoC and NCLT reporting to both; handling CoC meetings and members; tackling hordes of legal cases challenging various aspects of CIRP proceedings and to enforce rights of corporate debtor; identifying prospective resolution applicants; arrange data rooms and due diligence; evaluating resolution applications; liasoning with CoC members to build consensus

The biggest challenge is in having all the above and much more done in a strictly time-bound manner. The following table shows timeline for activities to be carried out by IRP/RP:

Preparation of information memorandum (IM) is one of the most important responsibilities of RP which is also the key to a successful resolution plan. This has to be done within two weeks of his appointment and not beyond 54th day from CIRP commencement date. By this document, RP is required to provide all relevant information to resolution applicants, subject to their providing the requisite undertakings, critical to getting resolution plans for the corporate debtor. Therefore, IM is often prepared with the help of technical and legal consultants, investment bankers and financial experts. Potential resolution applicants need to go into in-depth due diligence which RP has to facilitate. All these also need elaborate documentation like MoU’s etc with them with the help of lawyers and accountants requiring a substantial amount of RP’s time and involvement.

Along with these time and performance pressures, RP is required to abide by the code of conduct as laid down in the First Schedule of IBBI (Insolvency Professionals) Regulations, 2016 (“IP Regulations”) which requires him/her to act with integrity, ingenuity, independence and impartiality. RP has also to contend with complaints against him/her even for non-acceptance of claims with the threat of disciplinary proceedings under the IP Regulations. There are instances of being fined/penalized for quoting absurdly high fee.

RP has to do a tight rope walking between the pulls of time-bound performance in diverse duties and pressures of carrying all stakeholders with him/her and threat of disciplinary proceedings

RP is at the center of all actions and activities and, therefore, all challenges, suits, sometimes even physical assaults are directed at him/her who has to perform in the face of all these. RP’s are even exposed to compensation claims even after the conclusion of CIRP.

No doubt, RP cannot do it all alone. He/she has to have a team of professionals, consultants and employees but the ultimate accountability lies with RP. But resources needed for such help is restricted. RP can’t even insure himself/herself against contingencies of additional help by charging higher fees.

Conclusion

It’s not difficult to conclude from the aforesaid discussion that RP has to bear tremendous pressures and walk the tight rope. No doubt, RP’s roles and duties are excessive. But that is what RP’s profession is all about which sets it apart for most other professions.

 Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.                    

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This article is written by Abhay Pandey, Student, K.S. Saket P.G. College, Ayodhya

Introduction

The word contingent means when an event or situation is contingent, i.e. it depends on some other event or fact.

For example, making money is contingent on finding a good-paying job.

Now, the ‘contingent contract’ means enforceability of that contract is directly depends upon happening or not happening of an event.

Section 31 of the Indian Contract Act, 1872 defines the term ‘Contingent Contract’ as follows:

‘A contingent contract is a contract to do or not to do something, if some event collateral to such contract does or does not happen’.

In simple words, contingent contracts, are the ones where the promisor perform his obligation only when certain conditions are met. The contracts of insurance, indemnity, and guarantee are some examples of contingent contracts.

Illustration:- A contracts to pay to B Rs. 20,000 if B’s house is burnt. This is a contingent.

Case laws

• Chandulal Harjivandas v. CIT– In this case, it was held that all contracts of insurance and indemnity are contingent.

How is it different from wagering agreement?

1. A wagering agreement is absolutely void (S.30) while on the other hand contingent contract is a valid contract.
2. In a contingent contract, the future uncertain event is merely collateral whereas in a wagering agreement the uncertain event is a sole determining factor of the agreement.
3. In a wager, the parties are not interested in the occurrence of the event except for winning or losing the best amount while in a contingent contract the parties have a real interest in occurrence or non-occurrence of the event.
4. All wager contracts are contingent contracts, but all contingent contracts are not by way of the wager.

Essential elements of the contingent contract

After examining the definition of the contingent contract given under section 31 of the Act, the essentials of the term contingent contract are as follows:

There must be a valid contract to do or abstain from doing something

Section 32 and 33 of the Act talks about enforcement of the contingent contract on the happening or not happening of the events respectively. The contract will be valid only if it is about performing or not performing an obligation.

Illustration 1: X makes a contract with Y to buy Y’s dog if X survives Z. This contract cannot be enforced by law unless and until Z dies in X’s lifetime.

Illustration 2: X agrees to pay Y a sum of money if a certain ship does not return. The ship is sunk. The contract can be enforced when the ship sinks.

Performance of the contract must be conditional[i]

The condition for which the contract has been entered into must be a future event, and it should be uncertain. If the performance of the contract is dependent on an event, which is although a future event, but certain and sure to happen, then it’ll not be considered as a contingent contract.

The said event must be collateral to such contract

The event on whose happening or non-happening of the event on which the performance of the contract is dependent should not be a part of the consideration of the contract. The happening or non-happening of the event should be collateral to the contract and should exist independently.

Illustration: X enters into a contract with Y and promises to deliver 10 books to him. Y promises to pay Rs. 2000 upon delivery. This is not a contingent contract since Y’s obligation depend on the event which is a part of the contract(delivery of 10 Books) and not a collateral event.

The event should not be at the discretion of the promisor

The event so considered as for contingency should not at all to be dependent on the promisor. It should be totally a futuristic and uncertain event.

Illustration: X promises to pay Y, Rs. 10,000 if Y leaves Delhi for London on 31st March 2019. This is a contingent contract. Going to London can be within Y’s will but is not merely his will.    

Enforcement of contingent contract

Provisions related to the enforcement of the contingent contract are given under section 32 to 36 as follows:

Condition #1- enforcement of contract contingent on the happening of an event

The contingent contracts to do or abstain from doing something if an uncertain future event happens. However, the contract cannot be enforced by law unless the event takes place. If the event becomes impossible, such contracts become void.[Section 32]

Illustration: X promises to pay Y, Rs. 100,000 if he marries Z, the prettiest girl in the neighbourhood. This is a contingent contract. Unfortunately, Z dies in a car accident. Since the happening of the event no longer possible, the contract is void.

Condition #2- enforcement of contract contingent on an event not happening

The contingent contracts to do or abstain from doing something if an uncertain future event does not happen can be enforced when the happening of that event becomes impossible. If the event takes place, then the contingent contract is void.[Section 33]

Illustration: X promises to pay Y a sum of money if a certain ship does not return. The ship is sunk. The contract can be enforced when the ship sinks. On the other hand, if the ship returns, then the contract is void.

Condition #3- when an event on which contract is contingent to be deemed impossible if it is the future conduct of a living person

If a contract contingent upon how a person will act at a future time, the event shall be considered impossible when such person does anything which makes it impossible for the event to happen.[Section 34]

Illustration: X agrees to pay Y, Rs. 100,000 if Y marries Z. However, Z marries A. The marriage of Y to Z must now be considered impossible, although it is possible that A may die and that Z afterward marry Y.

Condition #4- contracts contingent on an event happening within the fixed time

Contingent contracts to do or not to do anything if a future uncertain event happens within a fixed time. Such a contract is void if the event does not happen and the time lapses. It is also void if before the time fixed, the happening of the event becomes impossible.[Section 35(para 1)]

Illustration: X promises to pay Y a sum of money if a certain ship returns before 1st April 2019. The contracts may be enforced if the ship returns within the fixed time. On the other hand, becomes void if the ship sinks.

Condition #5- contracts contingent on an event not happening within the fixed time

Contingent contract to do or not to do anything if an uncertain event does not happen within a fixed time may be enforced by law when the fixed time has expired, and such event has not happened, or before the time fixed has expired, if it becomes certain that such event will not happen.[Section 35(para 2)]

Illustration: X promises to pay Y a sum of money if a certain ship does not return before 31st March 2019. The contract may be enforced if the ship does not return before 31st March 2019. Also, if the ship burnt before the given time, the contract is enforced by law since the return is impossible.

Condition #6- contract contingent of impossible event void

If an agreement to do or not to do is based on the impossible event, then such agreement is void, whether the impossibility of the event is known or not to the parties to the agreement at the time when it is made.[Section 36]

Illustration: X promises to pay Y, Rs 500 if two straight lines should enclose a space. The agreement is void.

Conditions when a contingent contract becomes void

• Section 32- if the event on the happening of which the contract is contingent becomes impossible, the contract becomes void.

Illustration: Mohan contracts to pay Ram a sum of Money when Ram marries Geeta. Geeta dies without being married to Ram. The contract becomes void.

• Section 35- contingent contract to do or not to do something, if a specified uncertain event happens within a fixed time, becomes void if, at the expiration of the time fixed, such event has not happened, or if, before the time fixed, such event becomes impossible.

Illustration: Saurbh promises to pay Servesh if a certain ship returns within the year. The contract becomes void if the ship is burnt within the year.

• Section 34- if the future event on which a contract is a contingent is the way in which a person will act at an unspecified time, the event shall be considered to become impossible when such person does anything which renders it impossible that he should so act within any definite time, or otherwise than under further contingencies.
• Section 36- contingent agreement to do or not to do anything, if an impossible event happens, are void, whether the impossibility of the event is known or not to the parties to the agreement at the time when it is made.

Illustration: X agrees to pay Y, Rs. 10,000 if Y will marry X’s daughter P. P was dead at the time of the agreement. The agreement is void.

Commercial applications of contingent contracts

1. Insurance is a contract to do something if the future event occurs that will be contracted by the parties and liability will be taken by the offeror. In all Insurance like Life Insurance, Marine Insurance, Fire Insurance, and other Insurances, the Offeror promises to take the risk of the offeree against the incident to do or not to do something and for that the offeree agrees to pay a certain amount of money.
2. The contingent contract can be used in the contract of guarantee as well as the contract of warranty. Contingent guarantees generally are used when a supplier does not have a relationship with a counterparty.
3. We can use a contingent contract in negotiation. Contingent contracts normally occur when negotiating parties fail to reach an agreement.
4. We can use the contingent contract in mergers and acquisitions (M&A) as well. Depending on the M&A deal, contingent payments such as earn-outs, Seller notes, and Buyer stock may be part of the Seller’s proceeds. After the deal is finalized, these contingent payments will need continuous contact between Buyer and Seller.
5. It can also be used in the contract of indemnity.

Conclusion

What is described as ‘contingent contract’ in this topic is familiar to English law as ‘conditional contract’. For a contingent contract, there is a certain event which needs to be fulfilled. The term of these contract are certain and depend on the occurrence or non-occurrence of a future event.            

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