Bimonthly Legal Tablet Volume 4, Issue 4, July 05, 2014

NOTIFICATIONS, CIRCULARS, (May – June, 2014)

RBI
A.P. (DIR Series) Circular No. 127 dated May 02, 2014 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘Foreign Direct Investment (FDI) in India – Reporting mechanism for transfer of equity shares/ fully and mandatorily convertible preference shares/ fully and mandatorily convertible debentures’

On a review, it has now been decided;

  1. To rationalise the existing procedure, in cases where the NR investor including an NRI acquires shares on the stock exchanges in terms of the A.P. (DIR Series) Circular No. 38 dated September 06, 2013, the investee company would have to file form FC-TRS with the AD Category-I bank.
  2. To rationalise the existing procedure, in cases where the NR investor including an NRI acquires shares on the stock exchanges in terms of the A.P. (DIR Series) Circular No. 38 dated September 06, 2013, the investee company would have to file form FC-TRS with the AD Category-I bank.
  3. The AD banks shall continue to comply with the consolidated reporting requirement as stipulated in terms of Para 6.4 of A. P. (DIR Series) Circular No. 16 dated October 04, 2004.

These directions will become operative from the date of this circular. All the other terms and conditions of the A.P. (DIR Series) Circular No. 16 dated October 04, 2004, A.P. (DIR Series) Circular No. 63 dated April 22, 2009 and A.P. (DIR Series) Circular No. 38 dated September 06, 2013 shall remain unchanged.

A.P. (DIR Series) Circular No. 128 dated May 09, 2014 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘External Commercial Borrowings (ECB) Policy: Re-schedulement of ECB – Simplification of procedure

In terms of A.P. (DIR Series) Circular No.33 dated February 09, 2010, AD Category – banks are permitted to approve changes/ modifications in the drawdown/ repayment schedule of the ECBs already availed, both under the approval and the automatic routes, subject to the conditions. However, any elongation/ rollover in the repayment on expiry of the original maturity of the ECB requires the prior approval of the Reserve Bank.

As a measure of simplification of the existing procedures, it has been decided to delegate the power to the designated AD Category – I bank to allow re-schedulement of ECB due to changes in draw-down schedule and/ or repayment schedule with the following conditions:

  1. Changes, if any, in all-in-cost (‘AIC’) is only on account of the change in average maturity period (‘AMP’) due to re-schedulement of ECB and post re-schedulement, the AIC and the AMP are in conformity with applicable guidelines. There should not be any increase in the rate of interest and no additional cost (in foreign currency / Indian Rupees) should be involved.
  2. The re-schedulement is allowed only once, before the maturity of the ECB.
  3. If the lender is an overseas branch of a domestic bank, the prudential norms applicable on account of re-schedulement should be complied with.
  4. The changes on account of re-schedulement should be reported to DSIM through revised Form 83.
  5. The ECB should be in compliance with all applicable guidelines related to eligible borrower, recognised lender, AIC, AMP, end-uses, etc.
  6. The borrower should not be in the default/ caution list of RBI and should not be under the investigation of Directorate of Enforcement.

The facility will be available for ECBs raised both under the automatic and approval routes. Provisions of this Circular do not apply to FCCBs. The modification to the ECB policy will come into force with immediate effect. All other aspects of the ECB policy shall remain unchanged.

A.P. (DIR Series) Circular No. 129 dated May 09, 2014 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘External Commercial Borrowings (ECB) Policy – Refinance/ Repayment of Rupee loans raised from domestic banking system

In terms of the relevant circulars, eligible Indian companies are permitted to refinance/ repay the Rupee loans, raised by them from the domestic banking system, by raising ECB from recognised lenders, subject to conditions. Further, as per Circular DBOD.No.BP.BC.107/ 21.04.048/2013-14 dated April 22, 2014 issued by the Department of Banking Operations and Development (‘DBOD’) of RBI, repayment of Rupee loans availed of from domestic banking system through ECBs extended by overseas branches/ subsidiaries of Indian banks is not permitted.

The issue has been examined and it has been decided that eligible Indian companies will not be permitted to raise ECB from overseas branches/ subsidiaries of Indian banks for the purpose of refinance/ repayment of the Rupee loans raised from the domestic banking system in respect of the following:

  1. Scheme of take-out financing: Reference A.P. (DIR Series) Circular No. 04 dated July 22, 2010.
  2. Repayment of existing Rupee loans for companies in infrastructure sector: Reference A.P. (DIR Series) Circulars Nos. 25 and 111 dated September 23, 2011 and April 20, 2012 respectively.
  3. Spectrum allocation: Reference A.P. (DIR Series) Circulars Nos. 28 and 54 dated January 25, 2010 and November 26, 2012 respectively.
  4. Repayment of Rupee loans: Reference A.P. (DIR Series) Circulars Nos. 134, 26, 78 and 12 dated June 25, 2012, September 11, 2012, January 21, 2013 and July 15, 2013 respectively.

The changes to the ECB policy will come into force with immediate effect. All other aspects of the ECB policy shall remain unchanged.

A.P. (DIR Series) Circular No. 130 dated May 16, 2014 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘External Commercial Borrowings (ECB) from Foreign Equity Holder – Simplification of Procedure

As per the extant ECB policy, ECBs from direct foreign equity holders (‘FEHs’) are considered both under the automatic and the approval routes, as the case may be. ECBs from indirect equity holders and group companies and ECBs from direct FEH for general corporate purpose are, however, considered under the approval route. Further, any request for change of the ECB lender in case of FEH requires RBI’s approval.

As a measure of simplification of the existing procedure, it has been decided to delegate powers to AD banks to approve the following cases under the automatic route: 

  1. Proposals for raising ECB by companies belonging to manufacturing, infrastructure, hotels, hospitals and software sectors from indirect equity holders and group companies.
  2. Proposals for raising ECB for companies in miscellaneous services from direct/ indirect equity holders and group companies. Miscellaneous services mean companies engaged in training activities (but not educational institutes), research and development activities and companies supporting infrastructure sector. Companies doing trading business, companies providing logistics services, financial services and consultancy services are, however, not covered under the facility.
  3. Proposals for raising ECB by companies belonging to manufacturing, infrastructure, hotels, hospitals and software sectors for general corporate purpose.ECB for general corporate purpose (which includes working capital financing) is, however, permitted only from direct equity holder.
  4. Proposals involving change of lender when the ECB is from FEH – direct / indirect equity holders and group company.

Other aspects of the ECB policy such as eligible borrower, recognized lender, permitted end-use, amount of ECB, all-in-cost, average maturity period, pre-payment, ECB liability equity ratio, refinance of existing ECB, reporting arrangements, etc. shall remain unchanged.

A.P. (DIR Series) Circular No. 131 dated May 19, 2014 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘Overseas Direct Investments – Limited Liability Partnership (LLP) as Indian Party

On a review, it has been decided to notify a Limited Liability Partnership (‘LLP’), registered under the Limited Liability Partnership Act, 2008 (6 of 2009), as an ‘Indian Party’ under Regulation 2(k) of Notification No. FEMA.120/RB-2004 dated July 07, 2004. Accordingly, an LLP, may henceforth undertake financial commitment to/ on behalf of a JV/ WOS abroad in terms of the extant FEMA provisions under Regulation 6 (and regulation 7, if applicable) of the said Notification. Necessary amendment to the said Notification has been issued, which is effective from the date of publication in the Gazette, i.e., May 07, 2014.

The AD banks shall report the financial commitment/s undertaken by an LLP in Form ODI Part I and II and also other reporting (APR, disinvestments, etc.) as per the extant reporting requirements.

A.P. (DIR Series) Circular No. 138 dated June 03, 2014 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘Liberalised Remittance Scheme (LRS) for resident individuals-Increase in the limit from USD 75,000 to USD 125,000

It has now been decided to enhance the existing limit of USD 75,000 per financial year (April-March) to USD 125,000 with immediate effect. Accordingly, AD Category –I banks may now allow remittances up to USD 125,000 per financial year, under the Scheme, for any permitted current or capital account transaction or a combination of both.The Scheme should not be used for making remittances for any prohibited or illegal activities such as margin trading, lottery, etc.. All other terms and conditions shall remain unchanged.

A.P. (DIR Series) Circular No. 139 dated June 05, 2014 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘Foreign investment in the Insurance Sector – Amendment to the Foreign Direct Investment Scheme

Annex B of Schedule 1 to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 (the ‘Principal Regulations’), notified vide Notification No. FEMA. 20/2000-RB dated May 3, 2000, as amended from time to time, specifies entry route, sectoral cap and other conditions for sectors/activities in which FDI is permitted. In terms of the said Schedule, FDI up to 26% is permitted under automatic route in insurance sector.

The extant FDI policy for insurance sector has since been reviewed. Accordingly, effective from February 04, 2014, foreign investment by way of FDI, investment by FIIs/FPIs and NRIs up to 26% under automatic route shall be permitted in insurance sector subject to the conditions specified in the Press Note 2 (2014 Series) dated February 04, 2014.

A.P. (DIR Series) Circular No. 140 dated June 06, 2014 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘Foreign investment in India – participation by registered FPIs, SEBI registered long term investors and NRIs in non-convertible/redeemable preference shares or debentures of Indian companies

In terms of Schedule 5 to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 (the ‘Principal Regulations’) notified vide Notification No. FEMA.20/2000-RB dated May 3, 2000, as amended from time to time, SEBI registered Foreign Institutional Investors (FIIs), Qualified Foreign Investors (QFIs), registered Foreign Portfolio Investors (FPIs) and long term investors registered with SEBI, may purchase, on repatriation basis, Government securities and non-convertible debentures (NCDs) / bonds issued by an Indian company subject to such terms and conditions as mentioned therein and limits as prescribed for the same by RBI and SEBI from time to time. The present limits for investments by FIIs/FPIs, QFIs and long term investors registered with SEBI in corporate debt stands at USD 51 billion.

Further, in terms of A.P. (DIR Series) Circular No. 84 dated January 6, 2014, an Indian company is permitted to issue non-convertible/redeemable preference shares or debentures to non-resident shareholders, including the depositories that act as trustees for the ADR/GDR holders by way of distribution as bonus from its general reserves under a Scheme of Arrangement approved by a Court in India under the provisions of the Companies Act, as applicable, subject to no-objection from the Income Tax Authorities.

On review, it has now been decided to allow registered Foreign Institutional Investors (FIIs), Qualified Foreign Investors (QFIs) deemed as registered Foreign Portfolio investors, registered Foreign Portfolio Investors (FPIs), long term investors registered with SEBI – Sovereign Wealth Funds (SWFs), Multilateral Agencies, Pension/ Insurance/ Endowment Funds, foreign Central Banks to invest on repatriation basis, in non-convertible/redeemable preference shares or debentures issued by an Indian company in terms of A.P. (DIR Series) Circular No. 84 dated January 6, 2014 and listed on recognized stock exchanges in India, within the overall limit of USD 51 billion earmarked for corporate debt. Further, NRIs may also invest, both on repatriation and non-repatriation basis, in non-convertible/redeemable preference shares or debentures as above.

A.P. (DIR Series) Circular No. 145 dated June 18, 2014 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘Annual Return on Foreign Liabilities and Assets Reporting by Indian Companies – Revised format

A.P. (DIR Series) Circular No.133 dated June 20, 2012 stipulates that all Indian companies which have received FDI and/or made FDI abroad in the previous year(s) including the current year, should file the annual return on Foreign Liabilities and Assets (FLA) in the soft form to the Reserve Bank by July 15 every year.

In order to collect information on Indian companies’ Outward Foreign Affiliated Trade Statistics (‘FATS’) as per the multi-agency global ‘Manual on Statistics of International Trade in Services’, the FLA return has been modified marginally and is made available on the RBI website.

A.P. (DIR Series) Circular No. 146 dated June 19, 2014 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘Export and Import of Currency: Enhanced facilities for residents and non-residents

As per Regulation (3) of Foreign Exchange Management (Export and Import of Currency) (Amendment) Regulations, 2009and A.P. (DIR Series) Circular No. No. 39 dated September 6, 2013,any person resident in India may take outside India or having gone out of India on a temporary visit, may bring into India (other than to and from Nepal and Bhutan) currency notes of Government of India and Reserve Bank of India notes up to an amount not exceeding INR 10,000/-.

In view of the evolving economic conditions and with a view to facilitating travel requirements of residents travelling aboard as well as non-residents visiting India, it has been decided to allow all residents and non-residents (except citizens of Pakistan and Bangladesh and also other travellers coming from and going to Pakistan and Bangladesh) to take out Indian currency notes up to INR 25,000/- while leaving the country.

Accordingly, any person resident in India:

  1. may take outside India (other than to Nepal and Bhutan) currency notes of Government of India and Reserve Bank of India notes up to an amount not exceeding INR 25,000/-; and
  2. who had gone out of India on a temporary visit, may bring into India at the time of his return from any place outside India (other than from Nepal and Bhutan), currency notes of Government of India and Reserve Bank of India notes up to an amount not exceeding INR 25,000/-.

Any person resident outside India, not being a citizen of Pakistan and Bangladesh and also not a traveller coming from and going to Pakistan and Bangladesh, and visiting India:

  1. may take outside India currency notes of Government of India and Reserve Bank of India notes up to an amount not exceeding INR 25,000/- while exiting only through an airport.
  2. may bring into India currency notes of Government of India and Reserve Bank of India notes up to an amount not exceeding INR 25,000/- while entering only through an airport.

A.P. (DIR Series) Circular No. 151 dated June 30, 2014 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘Remittances to non-residents – Deduction of Tax at Source

A.P (DIR Series) Circular No. 56 dated November 26, 2002 read with A. P. (DIR Series) Circular No. 3 dated July 19, 2007 deal with the procedure to be followed in respect of deduction of tax at source while allowing remittances to the non-residents.

The Central Board of Direct Taxes (CBDT) has revised the existing instructions to be followed while allowing remittances to the non-residents, with effect from October 1, 2013. It has issued Income Tax (14th Amendment) Rules, 2013 vide Notification No. S.O 2659(E) dated September 2, 2013 on furnishing of information under Section 195(6) of the Income Tax Act, 1961 and prescribed the rules and forms to this effect.

Reserve Bank of India has reviewed the policy relating to issue of instructions under Foreign Exchange Management Act, 1999 (FEMA), clarifying tax issues. It has now been decided that Reserve Bank of India will not issue any instructions under the FEMA, in this regard. It shall be mandatory on the part of Authorised Dealers to comply with the requirement of the tax laws, as applicable.

DIPP

Press Note No. 4 (2014 Series) dated June 27, 2014 issued by the Department of Industrial Policy & Promotion, Government of India, Ministry of Commerce & Industry regarding ‘Switching over from NIC 1987 to NIC-2008’

Department of Industrial Policy & Promotion

As per extant usage, National Industrial Classification-1987 (NIC-1987) version is applicable for the purpose of classification of activities in respect of industrial license/IEM proposals submitted to the Department of Industrial Policy & Promotion. It had been decided to switch over to the NIC-2008, which is an improved version providing a more contemporary industrial classification system in the light of changes in the structure and composition of the economy, changing user requirements and compatibility with international standards. The upgradation to NIC-2008 will assist new business, being more investor friendly and internationally-attuned, as compared to the previous version of NIC Code.

MCA

General Circular No. 20/2014 dated June 17, 2014, issued by the Government of India, Ministry of Corporate Affairs regarding ‘Clarification with regard to voting through electronic means – reg.’

Ministry of Corporate Affairs

Section 108 of the Companies Act, 2013 read with Rule 20 of the Companies (Management and Administration) Rules, 2014 deal with the exercise of right to vote by members by electronic means (e-means). The provisions seek to ensure wider shareholders participation in the decision making process in companies. Corporates and other stakeholders while appreciating the new approach have drawn attention to some practical difficulties in respect of general meetings to be held in the next few months.The suggestions received from the stakeholders have been examined. It is noticed that compliance with procedural requirements, engagement of Depository Agencies and the need for clarity on matter like demand for poll/ postal ballot etc. will take some more time. Accordingly, it has been decided not to treat the relevant provisions as mandatory till 31stDecember, 2014. The relevant notification in this regard is being issued separately.

General Circular No. 23/2014 dated June 25, 2014, issued by the Government of India, Ministry of Corporate Affairs regarding ‘Clarification relating to incorporation of a company i.e. company incorporated outside India’

In this regard, attention has, in particular, been drawn to the absence of the deeming provision of Section 4(7) of the Companies Act, 1956 in the Companies Act, 2013 (‘New Act’). The matter has been examined in the Ministry in light of sections 2(68), 2(71) and 2(87) of the New Act and it is clarified that there is no bar in the New Act for a company incorporated outside India to incorporate a subsidiary either as a public company or a private company. An existing company, being a subsidiary of a company incorporated outside India, registered under the Companies Act, 1956, either as private company or a public company by virtue of section 4(7) of that Act, will continue as a private company or public company, as the case may be, without any change in the incorporation status of such company.

General Circular No. 24/2014 dated June 25, 2014, issued by the Government of India, Ministry of Corporate Affairs regarding ‘Clarification with regard to holding of shares in a fiduciary capacity by associate company under section 2(6) of the Companies Act, 2013’

In continuation of the General Circular No. 20/2013 dated 27.12.2013, it is clarified that the shares held by a company in another company in a ‘fiduciary capacity’ shall not be counted for the purpose of determining the relationship of ‘associate company’ under section 2(6) of the Companies Act, 2013.

General Circular No. 25/2014 dated June 26, 2014, issued by the Government of India, Ministry of Corporate Affairs regarding ‘Clarification on applicability of requirement for resident director’

Section 149(3) of the Companies Act, 2013 (‘Act’) requires every company to have at least one director who has stayed in India for a total period of not less than 182 days in the previous calendar year. Government has received requests from stakeholders for clarification with regard to applicability of these provisions in the current calendar/financial year.

It is clarified that the ‘residency requirement’ would be reckoned from the date of commencement of section 149 of the Act, i.e., 1st April, 2014. The first ‘previous calendar year’ for compliance with these provisions would, therefore, be Calendar year 2014.The period to be taken into account for compliance with these provisions will be the remaining period of calendar year 2014 (i.e. 1st April to 31st December). Therefore, on a proportionate basis, the number of days for which the director(s) would need to be resident in India, during Calendar Year 2014, shall exceed 136 days.

Regarding newly incorporated companies it is clarified that companies incorporated between 01.04.2014 to 30.09.2014 should have a resident director either at the incorporation stage itself or within 6 months of their incorporation. Companies incorporated after 30.09.2014 need to have the resident director from the date of incorporation itself.

The Reserve Bank of India

SUPREME COURT OF INDIA CASES:

Major SaurabhCharan and others etc. v Lt. Governor, NCT of Delhi and others etc. MANU/SC/0429/2014

The Hon’ble Supreme Court putting rest to one of the Delhi media highlighted case of this year, case better known as the nursery admission matter held that “it was not permissible for the Administration to alter the basis of admission after the admission process had started and further having participated in the selection process the criteria for selection could not have been questioned by unsuccessful participants.”

Pramati Educational & Cultural Trust & Ors v Union of India & Ors. MANU/SC/0419/2014

The question came before the Hon’ble Supreme Court that, whether clause (5) of Article 15 of the Constitution so far as it relates to “private unaided” educational institutions is valid and whether or not it violates the basic structure of the Constitution.

The Hon’ble Supreme Court has held that the Constitution (Ninety-third Amendment) Act, 2005 inserting clause (5) in Article 15 of the Constitution and the Constitution (Eighty-Sixth Amendment) Act, 2002 inserting Article 21A of the Constitution does not alter the basic structure or framework of the Constitution and are constitutionally valid. It was further held that the Right of Children to Free and Compulsory Education Act, 2009 is not ultra vires Article 19(1) (g) of the constitution. However the Court held that the 2009 Act insofar as it applies to minority schools, aided or unaided, covered under clause (1) of the Article 30 of the Constitution is ultra vires the constitution.

SubrataRoy Sahara v Union of IndiaMANU/SC/0406/2014

The Hon’ble Supreme Court held that “The submission made by the learned counsel for the petitioner, that this Court was obliged to comply with the procedure contemplated under Section 51, and Rules 37 and 40 of Order XXI, of the Code of Civil Procedure, 1908, before ordering the arrest and detention of the petitioner (and the other contemnors) is devoid of any merit, because Section 51 of the Code of Civil Procedure, 1908 and the other allied provisions referred to above, are not applicable to actions emanating out of the SEBI Act. So also, rule 6 of Order XIII of the Supreme Court Rules, 1966, has no applicability, with reference to the SEBI Act.”

Dr. Subramanian Swamy v Director, CBI &Anr. MANU/SC/0417/2014

The Supreme Court while declaring Section 6-A(1) the Delhi Special Police Establishment Act,  1946 and part of Section 26(c) of the Central Vigilance Commission Act, 2003 as invalid and violative of Article 14 of the Constitution held that “where challenge is laid to the constitutionality of  a legislation on the bedrock or touchstone of classification, it has to be determined in each case by applying well-settled two tests: (i) that classification is founded on intelligible differentia and (ii) that differentia has a rational relation with the object sought to be achieved by the legislation. Each case has to be examined independently in the context of Article 14 and not by applying any general rule.”

COMPETITION COMMISSION OF INDIA’S CASES

Mr. Om Datt Sharma v M/s. Adidas AG &Ors., Case No. (10/2014)

The Competition Commission of India has held that the differences between the terms of two franchisee agreements entered by a franchisor with two different parties, at different times, cannot be termed as abusive unless they are discriminatory within the meaning of section 4(2) (a) (i) and 4(2) (a) (ii) of the

Competition Act, 2002. Also, since the commercial arrangements may undergo a change over a period of time a manufacturer is not be obligated to follow a single template agreement throughout its existence.

This holds right even in cases where a franchisor appears to be a dominant group in the relevant market.

Mr. Ashish Ahuja v Snapdeal.com through Mr. Kunal Bahl, CEO & Ors. MANU/CO/0056/2014

The Commission observes that the insistence by SanDisk that the storage devices sold through the online portals should be bought from its authorized distributors by itself cannot be considered as abusive as it is within its rights to protect the sanctity of its distribution channel. In a quality-driven market, brand image and goodwill are important concerns and it appears a prudent business policy that sale of products emanating from unknown/ unverified/ unauthorised sources are not encouraged/ allowed. The conduct of SanDisk in issuing such circular can only be considered as part of normal business practice and cannot be termed as abuse of dominance and cannot be considered to be in violation of the provisions of Sections 3 and 4 of the Competition Act, 2002.

2nd May, 2014

  • The Supreme Court asked the government to notify within three weeks a Special Investigation Team, comprising two former judges of the top court, which will explore ways to recover black money and also initiate investigation and prosecution of those who are found stashing away money illegally whether at home or abroad. The Supreme Court said Former judge MB Shah will be the SIT chairman and Arijit Pasayat the vice-chairman.
  • Data Security Council of India (DSCI), a body set up by Nasscom, will offer cyber forensics certification in India in collaboration with ISC2 (ISC-squared). Cyber forensics refers to the process of extracting information and data from computers to serve as evidence for civil purposes or to prove and legally prosecute cyber crime.

4th May, 2014

  • By ruling on April 17 that the Comptroller and Auditor General (CAG) can go through the books of private sector telecom companies, the Supreme Court has sharply widened the powers of the country’s apex audit body.

5th May, 2014

  • The government has sought a relaxation in the Reserve Bank of India’s borrowing limit for Exim Bank to allow the export finance institution to play a bigger role in lending to bigticket, export-oriented projects. Exim Bank has asked for a 50% increase in the borrowing limit to 15% of its net owned funds, or NOF. Besides this, it has asked for a $10-billion line of credit from forex reserves to support high value project exports from India.

6th May, 2014 

  • The Supreme Court upheld the constitutional validity of the Right to Education Act, which mandates that 25 per cent seats in all schools be reserved for the economically disadvantaged.  

7th May, 2014

  • The Supreme Court struck down a clause in The Delhi Special Police Establishment Act 1946which barred the CBI from probing corruption cases against Central government babus above the rank of joint secretary without a prior nod from the government saying it was discriminatory as it treated officers as per their status. “Classification which is made in Section 6-A on the basis of status in government service is not permissible under Article 14 as it defeats the purpose of finding prima facie truth into the allegations of graft, which amount to an offence under the Prevent of Corruption Act, 1988.”
  •  The Reserve Bank of India (RBI) said that children above 10 years can open and operate savings bank account without the help of their parents or guardians.

8th May, 2014

  • The Reserve Bank of India (RBI) in a major relief to retail borrowers, directed banks not to levy any penalty on individual borrowers for pre-paying floating rate loans.
  • The Supreme Court dismissed case filed against the commissioning of the Kudankulam nuclear plant in Tamil Nadu on safety grounds.
  • The Gujarat High Court dismissed petitions against SEBI’s notification which had made it mandatory for Regional Stock Exchanges (RSEs) to have a minimum net worth of Rs 100 crore and an annual turnover of Rs 1000 crore.

12th May, 2014

  • Apple will launch theiPhone 5c 8GBmodel in India by early June to shore up volumes and bump its average selling price (ASP). The product was first launched in Europe and China a little over a month ago and is yet to hit the shelves in the US
  • The US Court of Appeals decided in favour of Oracle that it can copyright parts of the Java programming language, which Google used to design its Android smartphone operating system.

13th May, 2014

  • India plans to rebut British telecom operator Vodafone’s arbitration notice under India-Netherlands bilateral investment promotion and protection agreement saying that the pact does not cover taxation issues
  • The Supreme Court has given its nod to the controversial JalMahal tourism development project near Jaipur’s Mansagarlake with certain modifications in the 2005 lease deed, executed by the state government and scrapped by the Rajasthan High Court in 2012.
  • The Reserve Bank of India (RBI) allowed branches and overseas subsidiaries of Indian banks to sell structured financial and derivative products in established financial centers even if these products are not permitted in India.

14th May, 2014

  • The Court of Justice of the European Union said Google must listen and sometimes comply when individuals ask the search giant to remove links to newspaper articles or websites containing information about them. The ruling applies to EU citizens and all search engines in Europe, including Yahoo and Microsoft’s Bing.
  • The AllAssamMedia Employees Federation (AAMEF) welcomed Supreme Court’s directive for a CBI probe into the multi-crore Saradha scam in Assam, West Bengal, Odisha and Tripura and appealed for compensation for media employees of the group. 
  • The Competition Commission of India ordered a fresh probe against Google for alleged abuse of its dominant position in the online search advertising space.

16th May, 2014

  • A new bench will hear the case involving two Sahara Group companies that have been asked to pay about Rs 24,000 crore to market regulator SEBI (Securities and Exchange Board of India) to be returned to investors in their schemes.
  • The Supreme Court passed a limited mining ban on Odisha, which produces over 50 per cent of the country’s iron ore and manganese, affecting only those who have been operating on deemed renewals for a second time and beyond.The ban affects only 26 companies who were on their second renewal.

17th May, 2014

  • Apple Inc and Google Inc’s Motorola Mobility unit have agreed to settle all patent litigation between them over smartphones, ending one of the highest-profile lawsuits in technology. 
  • Google confirmed that it has bought a startup specializing in using smartphones to translate signs, billboards or other written words in real time. Quest Visual and the technology built into its Word Lens application will become part of a Google team devoted to developing translation features and services. 

18th May, 2014

  • In a bid to boost the mutual fund industry, market regulatorSEBIhas requested the Finance Ministry to consider various tax sops and other measures for investors and a final decision in this regard would be taken by the new government. These are part of SEBI’s efforts to incentivise and channelise household savings into long-term investment products. 
  • A new push to encrypt email, keeping messages free from government snooping, is gaining momentum.One new email service promising “end-to-end” encryption launched, and others are being developed while major services such as Google Gmail and Yahoo Mail have stepped up security measures.

19th May, 2014

  • India is likely to shortly notify safety and performance standards for cellphones deployed in domestic mobile networks under local laws, which would empower the government to “search” and “seize” goods, including cellphones, and expedite “penal measures” if products do not comply to standards.

20th May, 2014

  • The Delhi High Court restrained Procter & Gamble subsidiary from using the trademark “all around protection” and “all-rounder” in respect of its line of dental care products under the Oral-B brand.
  • In measures aimed at protecting banking consumers, the Reserve Bank is in the process of formulating strict guidelines to discourage lenders from mis-selling and to hold them accountable for all products they are offering. “From the principle of ‘caveat emptor’, Latin for ‘buyer beware’, we have to move to the principle ‘caveat venditor’, Latin for ‘seller beware.’

21st May, 2014

  • Introduction of new laws and norms, including the communication bill to replace century-old Indian Telegraph Act, security of networks, and infrastructure are among key issues the DoT has listed as priority areas for the new government.
  • The US Securities and Exchange Commission (SEC) has launched a private investigation against Wiproto ascertain the independence of its auditor — KPMG India — and the appropriateness of certain accounting entries pertaining to exchange rate fluctuation and outstanding liability accounts. 

22nd May, 2014

  • The Bombay High Court temporarily barred Bharat Chemical Products from selling mosquito repellents under the brand name ‘Good King’, saying that the name and packaging of the products appear similar to Godrej Consumer Products’ ‘Good Knight’ range of mosquito repellents

23rd May, 2014

  • The Department of Telecommunications (DoT) will once again seek the regulator’s recommendations on implementing mobile virtual network operator (MVNO) policy as it wants clarity on how to introduce this in the new unified licensing regime for national long distance, international as well as internet service provider services, all of which now fall under the unified licence (UL).
  • The Supreme Court has ruled that Indian resident beneficiaries shall not be taxed on the income of an offshore discretionary trust as long as the trustees do not distribute income to the beneficiaries.A discretionary trust is one that gives a beneficiary no right to any part of the income of the trust property, but vests in the trustees the discretionary power to pay the person what they deem fit.

26th May, 2014

  • Reserve Bank of India has directed non-banking financial companies (NBFCs) to take its prior clearance before purchasing shares of other NBFCs or companies for merger and acquisition with another entity.This rule will be applicable to both deposit taking and non-deposit accepting companies.
  • SEBI announced an increase in regulatory fees for all intermediaries and capital market activities, in several cases by up to 100% and stated that revised fee structure is essentially to help garner resources to strengthen investor awareness and education measures.
  • The Andhra Pradesh High Court vacated status quo order it had issued earlier on Sun Pharma-Ranbaxy merger process, paving way for the pharma giants to become a single entity.
  • The MCA clarified that PAN details are mandatory only for those foreign nationals who are required to possess “PAN” in terms of provisions of the Income Tax Act, 1961 on the date of application for incorporation.

27th May, 2014

  • The Delhi High Court restrained the Haryana Government from “prosecuting” Maruti Suzuki India Ltd for not having prior environment clearance (EC) for its unit in Rohtak after the company gave an undertaking that it will apply for the green nod.

28th May, 2014

  • After ensuring minimum 25 per cent public shareholding at private sector listed companies, market regulator SEBI is contemplating similar norms for PSUs, but a final decision would be taken as per views of the new government at the Centre.

29th May, 2014

  • The Supreme Court has upheld pleas by Reliance Industries BSE 0.96 % and British Gas (BG) that Indian courts should not interfere with ongoing arbitration abroad, rejecting the government’s contention that in cases involving public policy, the local judiciary has jurisdiction over arbitration that was agreed to be held in London.
  • Haryana Government waived off stamp duty on transfer of immovable property to blood relations, including children, grandchildren, spouse, brothers and sisters.

30th May, 2014

  • The Supreme Court while referring a dispute between Swiss Timing and the organising committee of the 2010 Commonwealth Games over unpaid fees to an arbitral panel, ruled that Issues related to alleged fraud in business deals can be a matter for arbitration.
  • The Supreme Court stayed the Andhra Pradesh High Court’s decision that held NIIT liable to pay tax on a contract to impart education in computer science in various schools in Andhra Pradesh.

3rd June, 2014

  • The licence and finance wing of the telecom department has suggested amending the existing unified access service (UAS) licence to include a second performance bank guarantee of Rs 10 crore. Under the unified licence (UL) regime, which is different from UAS licence, carriers have to keep two performance bank guarantees and a financial bank guarantee. However, migration from UAS to UL has been amended such that some UAS or licences that offer voice services may continue to exist for around 10 years from now. Therefore, the department wing has suggested the change.

4th June, 2014

  • The government may not implement the delayed increase in price of natural gas with retrospective effect as it would be difficult to back charge higher bills from power and CNG consumers, an official said. A new price for all domestically produced gas, based on a formula suggested by a panel headed by C Rangarajan, was to have come into effect from April 1 but was delayed due to the general elections. 

5th June, 2014

  • The Department of Telecommunications (DoT) has rejected Vodafone India’s request to renew its licences in seven regions where they are expiring in December next year as well as to keep the associated spectrum.

6th June, 2014

  • The founders of a Scottish company called MaidSafe had a wild idea. What if you were to give the internet a makeover, changing it so that it’s absolutely safe from hackers and government snooping, but is still good for app developers and for sharing information? Thus was born the MaidSafe’s SAFE network, brainchild of David Irvine (CEO) and Nick Lambert (COO.)
  • The plan is to use the existing internet but not store your data on servers in data centers such as done by Google, Yahoo, Facebook, and every other big internet company today. Instead, everyone who joins this network would turn their PC into part of the network, allowing bits and pieces of encrypted data to be stored on all PCs.
  • The Reserve Bank of India increased the cash reserve ratio (CRR) for non-scheduled urban co-operative banks (UCBs) by 100 basis points to 4%. One basis point is equal to one hundredth of a percentage. This increase will come into effect from July 12. The move will bring non-scheduled urban co-operative banks on par with scheduled primary urban co-operative banks.

9th June, 2014

  • The government is considering significant changes in the country’s anticorruption laws to protect officials and empower them to take firm and timely decisions. It is planning to amend the Prevention of Corruption Act, 1988, to shift the onus on investigative agencies to prove that pecuniary benefits flowed to bureaucrats before booking them in graft responses.

10th June, 2014

  • A Supreme Court appointed panel arrived in Bhubaneshwar to meet state officials and representatives from the mining industry, to investigate charges of illegalities in iron-ore and manganese mining.The panel’s final report to be submitted before 30 July could have a significant influence over the course of mining or iron ore and manganese in the state, and given Odisha’s contribution to the minerals’ production, have a significant bearing on India’s iron and steel sector.

11th June, 2014

  • Mobile point of sale provider Ezetap has bagged a technology contract from the country’s largest bank State Bank of India BSE -0.21 % to launch mobile point of sale devices across India.

14th June, 2014

  • Consumers will soon be able to retain their cellphone numbers when they relocate to any part of the country, even if they change operators, after the government came one step closer to clearing the ‘one nation, one number’ plan aimed at simplifying mobile telephony for all.Telecom Commission, the highest decision-making body in the telecom department gave in-principle approval to full mobile number portability (MNP).

15th June, 2014

  • With the aim of reviving the primary market, SEBI will this week consider wide-ranging rule changes, including the size of share sales and a mandatory minimum 25 per cent public shareholding for listed PSUs.

17th June, 2014

  • The Department of Economic Affairs (DEA) will shortly come up with “a general formula” to incentivise telecom tower firms, leveraging their infrastructure status, according to telecom secretary MF Farooqui.

23rd June, 2014

  • The Reserve Bank of India directed all banks and financial institutions to provide information and documents sought by the Special Investigation Team (SIT) set up to unearth black money.
  • Legislators now in favour of giving newer shape to Companies Act, 2013. Not only the stakeholders of commercial arena but legislators of new NDA-led Government are also now in favour of giving newer shape to the Companies Act 2013.

24th June, 2014

  • Facing global pressure, Switzerland decided to relax a key legislation to make it easier to extend help to foreign countries, including India, probing cases of suspected tax crimes.The proposed revision in Switzerland’s Tax Administrative Assistance Act would do away with an existing requirement where all individuals are given prior information before any details about them are shared with a foreign jurisdiction for alleged tax crimes.

28th June, 2014

  • The RBI has said India and the US have agreed to implement a foreign tax compliance law and asked banks and financial institutions to register by this year-end to report accounts and assets held by US citizens.India and the US have agreed to implement Foreign Accounts Tax Compliance Act (FATCA), a US law that targets tax non-compliance by US taxpayers with foreign accounts.

30th June, 2014

  • In a bid to catch tax evaders, SEBI and other regulators are planning to put in place a Common Reporting Standard (CRS) for all financial institutions under their purview to facilitate an automatic exchange of suspicious trades and other information through a global pool.

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