Bimonthly Legal Tablet Volume 4, Issue 6, November 10, 2014

NOTIFICATIONS, CIRCULARS (September – October, 2014)

RBI
A.P. (DIR Series) Circular No. 25 dated September 03, 2014 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘External Commercial Borrowings (ECB) in Indian Rupees

With a view to providing greater flexibility for structuring of ECB arrangements, it has been decided that recognized non-resident ECB lenders may extend loans in Indian Rupees subject to the following conditions:

  1. The lender should mobilize Indian Rupees through swaps undertaken with an Authorised Dealer Category-I bank in India.
  2. The ECB contract should comply with all other conditions applicable to the automatic and approval routes as the case may be.
  3. The all-in-cost of such ECBs should be commensurate with prevailing market conditions

Hedging arrangement for ECBs denominated in Indian Rupees extended by non-resident equity-holders shall continue to be governed by the provisions of AP (DIR Series) Circular No. 63 dated December 29, 2011.

A.P. (DIR Series) Circular No. 31 dated September 17, 2014 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘Foreign Direct Investment (FDI) in India – Issue of equity shares under the FDI Scheme against legitimate dues

In terms of paragraph 2(4) of Schedule 1 of Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000, an Indian company under the automatic route may issue shares/ convertible debentures to a person resident outside India against lump-sum technical know-how fee, royalty External Commercial Borrowings (ECBs) (other than import dues deemed as ECB or Trade Credit as per RBI guidelines) and import payables of capital goods by units in Special Economic Zones subject to certain conditions like entry route, sectoral cap, pricing guidelines and compliance with the applicable tax laws.

The extant guidelines for issue of shares/ convertible debentures under the automatic route have been reviewed in consultation with the Government of India and, accordingly, it has been decided to permit issue of equity shares against any other funds payable by the investee company, remittance of which does not require prior permission of the Government of India or Reserve Bank of India under FEMA, 1999 or any rules/ regulations framed or directions issued thereunder, provided that:

  1. The equity shares shall be issued in accordance with the extant FDI guidelines on sectoral caps, pricing guidelines etc. as amended by Reserve bank of India, from time to time;

Explanation: Issue of shares/ convertible debentures that require Government  approval in terms of paragraph 3 of the said Schedule 1 or import dues  deemed as ECB or trade credit or payable against import of second hand machinery  shall continue to be dealt in accordance with extant guidelines;

ii. The issue of equity shares under this provision shall be subject to tax laws as applicable to the funds payable and the conversion to equity should be net of applicable taxes.

All the other conditions for issuance of equity shares under the automatic route and Government approval route shall remain unchanged.

A.P. (DIR Series) Circular No. 36 dated October 16, 2014 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘Foreign Exchange Management Act, 1999 (FEMA) Foreign Exchange (Compounding Proceedings) Rules, 2000 (the Rules) – Compounding of Contraventions under FEMA, 1999

In partial modifications to A.P. (DIR Series) Circular no. 117 dated April 4, 2014 and the Foreign Exchange (Compounding Proceedings) Rules, 2000 notified by the Government of India, as amended from time to time, regarding delegation of powers to the Regional Offices of the Reserve Bank of India to compound the contraventions of FEMA, it has been decided to delegate further powers to Regional Offices as under:

S. No FEMA Regulation Brief Description of Contravention
1. Regulation 10 A (b)(i) read with paragraph 10 of Schedule I to FEMA 20/2000-RB dated May 3, 2000 Delay in submission of form FC-TRS on transfer of shares from Resident to Non-Resident.

 

2. Regulation 10 B(2) read with paragraph 10 of Schedule I to FEMA 20/2000-RB dated May 3, 2000 Delay in submission of form FC-TRS on transfer of shares from Non-Resident to Resident.

 

3. Regulation 4 of FEMA 20/2000-RB dated May 3, 2000 Taking on record transfer of shares by investee company, in the absence of certified form FC-TRS.

The work of three divisions of Foreign Investment Division (FID) viz. Liaison/ Branch/ Project office(LO/ BO/ PO) division, Non Resident Foreign Account Division (NRFAD) and Immovable Property (IP) Division has been transferred to FED, CO Cell, Reserve Bank of India, 6, Sansad Marg, New Delhi- 110001 with effect from July 15, 2014.

DIPP

Press Note No. 9 (2014 Series) dated October 20, 2014 issued by the Department of Industrial Policy & Promotion, Government of India, Ministry of Commerce & Industry regarding ‘Streamlining the Procedure for Grant of Industrial Licenses’

Department of Industrial Policy & Promotion

As a measure of ease of doing business, henceforth two extensions of 2 years each in the initial validity of 3 years of the Industrial License shall be allowed up to 7 years. This is in supersession of Press Note No. 5 (2014 Series) dated July 02, 2014.

It has been decided to deregulate the annual capacity for defense items for industrial license. However, the licensee shall submit half yearly production return to Department of Industrial Policy & Promotion and Department of Defence Production, Ministry of Defence in the prescribed format, to be notified separately.

The Licensee shall be allowed to sell Defence items to Government entities under the control of Ministry of Home Affairs (MHA), State Governments, Public Sector Undertakings (PSUs) and other valid Defence Licensed Companies without prior approval of the Department of Defence Production (DoDP). However, for sale of the items to any other entity, the Licensee shall take prior permission from the Department of Defence Production, Ministry of Defence.

MCA

General Circular No. 39/2014 dated October 14, 2014 issued by Government of India, Ministry of Corporate Affairs, regarding ‘Clarification on matters relating to consolidated Financial Statement’

Ministry of Corporate Affairs

It is clarified that Schedule III to the Companies Act, 2013 read with the applicable Accounting Standards does not envisage that a company while preparing its CFS merely repeats the disclosures made by it under stand-alone accounts being consolidated. In the CFS, the company would need to give all disclosures relevant for CFS only.

General Circular No. 40/2014 dated October 15, 2014 issued by Government of India, Ministry of Corporate Affairs, regarding ‘Company Law Settlement Scheme, 2014 (CLSS-2014)’

In continuation to the Ministry’s General Circular No. 34/2014 dated 12.08.2014 on the subject cited above, the Ministry has, on consideration of requests received from various stakeholders, as decided to extend the Company Law Settlement Scheme (CLSS 2014) up to November 15, 2014.

General Circular No. 41/2014 dated October 15, 2014 issued by Government of India, Ministry of Corporate Affairs, regarding ‘Company Law Settlement Scheme, 2014 (CLSS-2014) – Clarification under Section 164(2) of the Companies Act, 2013’

It is clarified that in case of companies who have filed their balance sheets and annual returns on or after 01/04/2014 but prior to launch of CLSS-2014, disqualification under Section 164(2)(a) of the Companies Act, 2013 shall apply only for prospective defaults, if any, by such companies.

The Reserve Bank of India

ALAYA LEGAL LOGO

SUPREME COURT OF INDIA CASES:

The Stock Exchange v V.S. Kandalgaonkar, MANU/SC/0876/2014

The Hon’ble Supreme Court held that the Stock Exchange, Bombay has the first and paramount lien over the security provided by a member, for any sum due to the Exchange by virtue of Rule 43 of the Stock Exchange Rules made under Section 8 of the Securities Contract (Regulation) Act, 1956. The lien possessed by the Exchange makes it a secured creditor. The Exchange would have precedence over the income tax dues which being government dues have precedence only over the unsecured creditors. 

Gulf Goans Hotels Co. Ltd. &Anr v Union of India and Ors, MANU/SC/0848/2014

The Hon’ble Supreme Court in light of Article 77 of the Constitution held that in the absence of due authentication and promulgation of the environmental guidelines, the contents thereof cannot be treated as an order of the Government and would represent only an expression of opinion. The Court further held that, it is also essential that what is claimed to be a law must be notified or made public in order to bind the citizen.

Yogendra Pratap Singh v Savitri Pandey & Anr.MANU/SC/0843/2014

The Hon’ble Supreme Court overruled its earlier decision in Narsingh Das Tapadia’s case and upheld its decision taken in Sarav Investment& Financial Consultancy case and held that “no complaint can be maintained against the drawer of the cheque before the expiry of 15 days from the date of receipt of notice because the drawer/accused cannot be said to have committed any offence until then.”

Anvar P.V. v P.K. Basheer and others.MANU/SC/0834/2014.

The Hon’ble Supreme Court while interpreting section 59, 65A and 65B of The Indian Evidence Act, 1872 overruled its earlier decision in ‘State (NCT of Delhi) v. NavjotSandhu alias Afsan Guru’ and held that, “an electronic record by way of secondary evidence shall not be admitted in evidence unless the requirements under Section 65B of the Evidence Act are satisfied. Thus, in the case of CD, VCD, chip, etc., the same shall be accompanied by the certificate in terms of Section 65B obtained at the time of taking the document, without which, the secondary evidence pertaining to that electronic record, is inadmissible.”

Swan Gold Mining Ltd. v Hindustan Copper Ltd.MANU/SC/0849/2014

The Hon’ble Supreme Court held that “an award can be set aside if it is contrary to fundamental policy of Indian law or the interest of India, or if there is patent illegality. The interpretation of the contract is matter of the Arbitrator, who is a Judge, chosen by the parties to determine and decide the dispute. The Court is precluded from re-appreciating the evidence and to arrive at different conclusion by holding that the arbitral award is against the public policy.”

Prakash v B.R. Sampath Kumar, MANU/SC/0850/2014

The Hon’ble Apex Court held that “once an agreement to sell is legal and validly proved and further requirements for getting such a decree is established then the Court has to exercise its discretion in favour of granting relief for specific performance… subsequent rise in price will not be treated as a hardship entailing refusal of the decree for specific performance …however, the increase in the price of property may be considered alongwith other facts and circumstances of the case and while granting decree for specific performance, condition may be imposed to compensate the owner of the property”.

Chairman cum Managing Director Indian Oil Corporation Ltd. and Ors.v SunitaKumari&Anr.  2014 (10) SCALE 649

The question for consideration was whether, on the cancellation of the allotment of a dealership/distributorship for petroleum products in favour of the first ranked or first empanelled candidate, there is an automatic allotment in favour of the second ranked or second empanelled candidate, subject to fulfillment of the conditions of allotment.

The Hon’ble Apex Court held that if the allotment is tainted due to political connections or patronage or other extraneous considerations, the entire selection process gets vitiated and not one selection or allotment. When the entire selection process is vitiated then there is no question of going down the list of empanelled candidates. The Court also clarified that if an individual selection is cancelled on merits, such as lack of eligibility or erroneous calculation of marks that is cancellation for reasons other than political considerations or patronage or other extraneous considerations, then the entire selection process would not be vitiated.

Kamaljit Singh vSarabjit Singh, Civil Appeal No. 8410 of 2014, MANU/SC/0744/2014

The Hon’ble Supreme Court held that the courts below fell in error holding that the landlord who was an NRI was obliged to prove his title to the property, even if the tenant admitted the existence of jural relationship. It held that the tenant was estopped under section 116 of The Evidence Act who was occupying a property of a non-resident Indian. Section 13-B of the East Punjab Urban Land Restriction Act, 1949 is a beneficial provision intended to provide a speedy remedy to NRIs who return to their native places and need property let out by them for their own requirement.

M/s. Bhagwati Vanaspati Traders v Senior Superintendent of Post Offices, Meerut, MANU/SC/0902/2014

The Hon’ble Supreme Court held that when an authority had issued a national saving certificate which they could not have issued, the authority cannot be allowed to enrich themselves, by retaining the deposit made. If the irregularity is curable, the authorities should devise means to regularize the irregularity, if possible.

COMPETITION COMMISSION OF INDIA’S CASES

Indian Sugar Mills Association and Ors.v Indian Jute Mills Association and Ors. (MANU/CO/0092/2014)

The Information under section 19(1)(a) of the Competition Act, 2002 was filed by Indian Sugar Mills Association, National Federation of Co-operative Sugar Factories Ltd. and All India Flat Tape Manufacturers Association(collectively ‘Informants’) against Indian Jute Mills Association (IJMA) and Gunny Trade Association (GTA) (‘Opposite Parties’) respectively alleging an anti-competitive agreement between the members of IJMA and GTA with respect to fixing of sale price of jute packaging material by issuing of Daily Price Bulletin (DPB) by GTA for jute bags for the members of IJMA and the GTA to follow.

The Commission found itself in agreement with the findings of the Directorate General (DG) regarding the existence of a tacit agreement by way of action in concert by the members of GTA under the aegis of GTA todetermine and control the price by publication of GTA, DPB and as the transacted prices were followed by the members of the GTA and IJMA the Commission held the impugned acts/conduct of IJMA and GTA to be in contravention of the provisions of section 3(3)(a)/ 3(3)(b) read with section 3(1) of the Act. The Commission issued a cease and desist order against the associations and imposed a penalty on IJMA andGTA @ 5% of the average turnover of the last three years. The Commission also imposed penalties on the persons who were members of the Executive Committee of IJMA and the Executive Committee and the DPB Sub-Committee of GTA @ 5% of the average income of the last three financial years.

The Commission also noted that the provisions of the Jute Packaging Materials (Compulsory Use in Packaging Commodities) Act, 1987 placing statutory requirement on the sugar mills to undertake sugar packaging using jute bags only was against the principle of competitive neutrality as the entities manufacturing matching products were denied market access. Such a policy further not only restricted the choice of customers like sugar mills but it also led to escalating the cost which is ultimately borne by the end-consumers. Accordingly, the Commission expects the Government of India to re-assess the current market situation for removing the market distortions arising out of such policy.

In re: Collective boycott/refusal to deal by the Chemists & Druggists Association, Goa (CDAG), Glenmark Company and Wockhardt Ltd. (MANU/CO/0086/2014)

M/s Varca Druggist & Chemists and others had filed an Information with the then Director General (Investigations & Registrations), Monopolies and Restrictive Trade Practices Commission against Chemists & Druggists Association, Goa, (‘CDAG’ / the ‘Opposite Party No. 1)’) for its alleged anti-competitive practices. After repeal of the Monopolies and Restrictive Trade Practices Act, 1969, the said case was transferred to Competition Commission of India. The Commission passed an order under Section 27 of the Competition Act on 11.06.2012. Subsequently, the Commission was informed by Mr. Mario Vaz (the ‘Informant’) that CDAG had not complied with the above said order of the Commission and was restraining pharmaceutical companies such as M/s Glenmark Pharmaceuticals Limited (‘Opposite Party No. 2’) and M/s Wockhardt Limited (‘Opposite Party No. 3’) from doing business with his company. It was alleged that under the guidance of CDAG, all stockists of the Opposite Party No. 3 appeared to have formed a cartel and stopped receiving goods from the Opposite Party No. 3 so as to compel it to stop dealing with the Informant. It was also alleged that under the influence of CDAG, the Opposite Party No. 2 and the Opposite Party No. 3 stopped supplies to the Informant.

Commission observed that CDAG clearly disregarded the Commission’s order dated 11.06.2012 and indulged in anti-competitive conduct. By forcing pharma companies to discontinue supply through non-authorized stockist like the Informant, it continued to carry on its anti-competitive practices. Further, it forced pharmaceutical companies like M/s Glenmark Pharmaceuticals Limited and M/s Wockhardt Limited to follow its mandate by threatening the other stockists in Goa to stop taking supplies or suspend receiving supplies from them till such time they stopped supplies to the informant. The Commission directed CDAG to seize and desist from indulging in theanti-competitive practices and imposed a penalty of INR 10,62,062/-, calculated at the rate of 10% of the average receipts of CDAG for three financial years.

ShriBijayPoddar v M/s Coal India Limited and its subsidiaries, (MANU/CO/0087/2014)

Shri BijayPoddar (‘Informant’) alleged that the terms and condition of Spot e-Auction Scheme 2007 (‘the Scheme’) introduced by M/s Coal India Limited and its subsidiaries (‘Opposite Parties’) were in contravention of the provisions of the Competition Act.  Informant further alleged that the forfeiture clause under the Scheme is arbitrary and illegal and in abuse of monopolistic power enjoyed by the Opposite Parties.

The Commission observed that the stipulations provided in clause 9.2 of the Scheme is in contravention of the provisions of Section 4(2)(a)(i) of the Competition Act whereby a buyer is saddled with penalty by way of forfeiture of EMD for non-lifting of coal after successful participation in the e-Auction without any  corresponding liability upon Opposite Parties for failure to deliver coal in respect of accepted bids. Such arrangement in the Scheme was noted to be a result of market power exercised by Opposite Parties. Accordingly, the Commission held Opposite Parties to be in contravention of the provisions of Section 4(2)(a)(i) of the Competition Act for imposing unfair conditions upon the bidders under the Scheme. Apart from issuing a cease and desist order, the Commission ordered modification of the terms and conditions of the Scheme suitably.

M/s SaiWardha Power Company Ltd. v M/s Western Coalfields Ltd.

The Information under Section 19(1)(a) of the Competition Act, 2002(‘Competition Act’) was filed by M/s. Sai Wardha Power Company Ltd. (‘the Informant’) against M/s. Western Coalfields Ltd. and M/s. Coal India Ltd. (collectively, ‘the Opposite Parties’) alleging contravention of the provisions of Section 4 of the Competition Act. In order to procure the supply of coal for its power plant, the Informant after getting linkage and letter of assurance on cost plus basis from the Opposite Parties, had entered into three Fuel Supply Agreements (‘FSAs’) for supply of coal from three different identified cost plus coal mines under the control of the Opposite Parties.  The Informant stated that the Opposite Parties enjoy virtual monopoly over production and supply of coal in India. The Informant alleged that the Opposite Parties, by abusing its dominant position, had forced the Informant to enter into one sided, anti-competitive FSAs under which the Informant had no bargaining power or power to negotiate whatsoever and in the absence of any alternative option for procurement of coal, the Informant was compelled to accept the dictated terms and conditions stipulated in the FSAs.

The Commission established that the Opposite Parties operate independently of market forces and enjoy undisputed dominance in the relevant market of “production and supply of non- coking coal to the thermal power producers in India”. The Commission further held the Opposite Parties to be in contravention of the provisions of section 4(2)(a)(i) of the Competition Act for imposing unfair conditions in FSAs with the power producers for supply of non-coking coal. Commission directed the Opposite Parties to cease and desist from indulging in the conduct found to be in contravention of the provisions of the Competition Act and to make necessary modifications in FSAs in light of the observations and findings recorded by it.

M/s HT Media Limited Informant v M/s Super Cassettes Industries Limited, (MANU/CO/0080/2014]

M/s. HT Media Limited (‘the Informant’) filed Information under Section 19(1) (a) of the Competition Act, 2002 (‘Competition Act’) against M/s. Super Cassettes Industries Limited (‘the opposite party’) alleging inter alia contravention of Sections 3 and 4 of the Competition Act.

The Informant, a leading media companies had launched an FM radio channel called Fever 104. Opposite Party is engaged in manufacture, production and publication of music and videos. The Informant alleged that the Opposite Party has abused its dominant position by (i) charging excessive amount as license fees/royalty from the Informant for grant of rights for the broadcast of the Opposite Party’s music content on Fever 104 radio station; (ii) imposing minimum commitment charges (‘MCC’) to be paid to the Opposite Party per month irrespective of actual needle hour of broadcast of the Opposite Party’s music content by the Informant and (iii) making conclusion of licensing arrangements with the Opposite Party subject to the acceptance of license fees and MCC imposed by them. The Informant alleged that such imposition of exorbitant license fees and MCC by the Opposite Party is an unfair condition imposed by it for granting license to broadcast its music content on radio under the Competition Act which limits and restricts the right of the Informant to broadcast its music content of other music companies/composers thereby limiting the choice of music for the end consumers to only the Opposite Party’s music content and results in denial of market access for other music companies (publishers, copyright societies etc.) with less market share and bargaining power.

Commission held Opposite Party to be in contravention of Section 4(2)(a)(i) of the Competition Act. The Commission directed Opposite Party to cease and desist from formulating and imposing the unfair condition of MCC in its agreements and to suitably modify such unfair conditions within 3 months of the date of receipt of order. The Commission also imposed penalty at the rate of 8% of average turnover of the last three years of the opposite party amounting to INR 2,83,28,000.

1st Sept, 2014

  • The Union Ministry of Earth Sciences has asked Gujarat National Law University (GNLU) to prepare two draft laws that will lay the guidelines for deep sea mining in the Indian Ocean off India’s territorial waters, and in Antarctic Ocean. The draft laws will be called ‘Deep Seabed Mining Act’, and ‘Antarctica Act of India’. The Indian Ocean seabed is rich in precious metals and can yield natural resources of great US, China, Japan, Russia and South Korea lead this race for the natural wealth that lies untapped beneath the sea-bed. So far, India has done little for commercial exploration of the seabed despite excellent opportunities to tap nearly 1.5 million sq km of sea floor beyond its territorial waters. 
  • Retired Supreme Court and high court judges should take a two-year “quarantine period” from any posts barring that of a judicial inquiry commission, retired apex court judge K.T. Thomas said.The statement comes after Congress leaders in Kerala have been discussing whether a former chief justice of India should be appointed the governor of a state. This follows media reports that former Chief Justice of India (CJI) P. Sathasivam could succeed Sheila Dikshit, who quit last week as the state’s governor. 

2nd Sep, 2014

  • The Supreme Court refused to entertain a petition filed by Kingfisher Airlines against being declared as willful defaulter, saying it has become infructuous as the Grievance Redressal Committee of United Bank of India has already passed an order.
  • The Supreme Court ruled that review plea of a death convict against his conviction and sentence be heard in an open court by at least a three-judge bench and allowed all condemned prisoners, whose review pleas have already been decided, to approach it within a month for re-opening of their cases.

12th Sep, 2014

  • As the government prepares to bring a fresh bill in Parliament to repeal archaic laws, the Law Commission recommended revoking 72 obsolete statutes, saying there is an “urgent need” to ensure that the legal structures are responsive to challenges of changing times.One of the laws – Bengal District Act – recommended for repeal dates back to 1836. Several other laws recommended for revoking belong to period dating from 1838 to 1898. 

15th Sep, 2014

  • The government is likely to introduce long-pending amendments to the Negotiable Instruments Act, 1881, in the next session of Parliament as part of steps being taken to unclog the huge backlog of cheque-bouncing cases in the country’s courts. The amendment bill proposes the use of alternative ways to resolve disputes, lays down the procedure to be followed in such cases and suggests making electronic transactions free of cost to promote their use.

16th Sep, 2014

  • Supreme Court directive asking for the identity of ‘whistleblowers’who provided CBI chief Ranjit Sinha’s visitors’ log to lawyer Prashant Bhushan raises the possibility of an inter-agency or an intra-CBI fight and has implications for whistleblowing. Prime facie, proceedings in the apex court appeared to have gone in favour of the CBI chief. The court will continue hearing the case on September 22
  • Even as Google launched its first wave of low-cost Android One smartphones in India in partnership with domestic such as Micromax, Karbonn and Spice Monday, the telecom department (DoT) plans to pitch Telecom Standards Development Society India (TSDSI) as the apex agency to recommend Indian security standards for telecom products, including mobile devices running on Indian networks.

18th Sep, 2014

  • The Securities and Exchange Board of India (SEBI) will soon issue a discussion paper on reducing the timeline for follow-on public offers (FPOs) and issue guidelines to deal with wilful defaulters given that there are no restrictions at present on such entities raising funds from the capital market.

19th Sep, 2014

  • With an aim to attract greater foreign and domestic investments into real estate, SEBI said it will soon notify norms for creation and listing of business trusts for this key sector.Two separate committees have been set-up for the specific guidelines on the issue. 

24th Sept, 2014 

  • The Supreme Court appointed Michael Kirby, a former judge of the Australian High Court, as the third arbitrator who will preside over a three-member arbitral panel which would adjudicate the cost recovery row between the Indian government and RIL on the KG-D6 block.Kirby, a former puisne judge (a judge other than the chief justice) of the Australian High Court, will head a panel which comprises two former chief justices of India -SP Bharucha, nominated by RIL and VN Khare, who has been named by the government. 

26th Sept, 2014

  • A Supreme Court bench cleared up a key ambiguity in the amended Land Acquisition Act last week by saying that delays caused by litigation would count under the legislation, a move that’s seen as positive for landowners but could mean things becoming difficult for governments at the state and Centre as they look to get projects off the ground.The clause says if physical possession of land has not been taken or compensation has not been paid to the landowner five years after the initiation of acquisition proceedings, the landowner is entitled to reclaim possession of the land. Justices FMI Kalifulla and SK Singh ruled a “plain reading” of the relevant clause made clear that it “does not exclude any period during which the land acquisition proceeding might have remained stayed on account of stay or injunction granted by any court”. 
  • The Central government’s plans to have a National Tax Tribunal to adjudicate on complicated questions of tax law will have to wait, with the Supreme Court striking down a 2005 Act that provided for the creation of such a body to take some of the load off the over-stretched high courts. The constitution bench said though Parliament was well within its powers to transfer adjudicatory functions, earlier vested in the high courts, to an alternative court or tribunal, in this case the proposed tribunal. “Exercise of such power by the Parliament would not per se violate the structure of the Constitution.” “The basic structure of the Constitution will stand violated, if while enacting legislation pertaining to transfer of judicial power, Parliament does not ensure, that the newly-created court or tribunal, conforms with the salient characteristics and standards of the court sought to be substituted.”

28th Sept, 2014

  • Telecom regulator Trai is likely to come out with recommendations on spectrum pricing for the next round of auction by the end of next month.”The recommendations are likely to come by the end of October,” a source in Trai said. The Telecom Regulatory Authority of India (Trai) in August had started the consultation process for the next round of auctions for spectrum held by mobile operators – Airtel, Vodafone, Idea and RCom – as some of their licences are set to expire in 2015-16. 

3rd Oct, 2014

  • Supreme Court has also joined the Swachh Bharat Abhiyan under the direction of Chief Justice of India H L Dattu.The campaign was started on Gandhi Jayanti in the Supreme Court Complex.

4th Oct, 2014

  • India’s intellectual property regime is fully compliant with WTO norms, the government said on Friday, two days after the two countries decided to set up a high-level working group on IPR during Prime Minister Narendra Modi’s US visit to sort out the contentious issue.The US is conducting an ‘out of cycle review’ on India’s IPR regime based on its Special 301 report. It had in April threatened to downgrade India from ‘priority watch list’ to ‘priority foreign country’, the lowest grade. The government, however, said that US agreeing to talk IPR through a bilateral mechanism is a reaffirmation of India’s stand that the issue does not need unilateral action. India has refused to be subjected to unilateral action proposed by the US under the Special 301 report, an annual report on IPR under US Trade Act. 
  • Google has notified The New York Times in the past month that links to five articles have been removed from some search results on European versions of its search engine to comply with Europe’s “right to be forgotten.”The notifications offer vivid examples of the issues involved in Europe’s decision to allow individuals some measure of control over what appears online about themselves. Of the five articles that Google informed The Times about, three are intensely personal – two wedding announcements from years ago and a brief paid death notice from 2001. Presumably, the people involved had privacy reasons for asking for the material to be hidden. The other two Times articles are less about personal details than about reputation. And it is this concern – even if the facts are fairly reported – that represents a big difference between the way Europe and the United States regulate, or do not regulate, how information is presented online. Unlike in the United States, where freedom of expression is a fundamental right that supersedes other interests, Europe views an individual’s privacy and freedom of expression as almost equal rights. 

6th Oct, 2014

  • A Supreme Court-appointed high- powered committee has recommended that names and pictures of political parties and their office bearers like presidents be not mentioned in government advertisements.Holding that there had been “misuse and abuse” of public money on such advertisements, the three-member committee headed by Professor N R Madhava Menon has framed guidelines to regulate expenditure and contents of such advertisements paid out of tax payers’ money. 
  • The US Supreme Court declined to hear gay marriage cases from five states, opening the door to more same-sex weddings while putting off a nationwide decision on the issue.The court opted not to take up cases in five states – Indiana, Utah, Virginia, Wisconsin and Oklahoma – in which state-level bans on same-sex marriage were deemed unconstitutional. 
  • The Reserve Bank may consider raising interest rates to bring down the persistently high inflation on a durable basis, suggested IMF working paper.
  • The WPI inflation dropped to a 5-year low of 3.74 per cent in August, while the retail inflation stood at 7.8 per cent.The paper said since inflation is mostly backward looking, monetary policy has to maintain a tight stance for a prolonged period of time. 

9th Oct, 2014

  • The Supreme Court refused to frame norms that would bar a superior court judge from taking up any government assignment for at least two years.The bench comprising CJI HL Dattu along with justices SA Bobde and AM Sapre dismissed a petition filed by a political activist, which referred to such post-retirement jobs as sinecures that could erode the judiciary’s independence.

10th Oct, 2014

  • The Supreme Court has agreed to hear a petition challenging a recent government circular that did away with price caps on at least 108 drugs crucial to treatment of diseases such as TB, cancer and diabetes. The National Pharmaceutical Pricing Authority (NPPA) had on September 22, 2014 withdrawn a May, 2013 circular that capped the prices of these non-essential drugs, in line with a directive from the ministry of chemicals and fertilisers.In a public interest litigation, advocate Manohar Lal Sharma contended that the September 22 circular was against public interest as it would place drugs crucial to treating diabetes, blood pressure, cancer and rabies beyond the reach of common man. He also demanded a CBI inquiry into what he claimed was the sudden turnaround in NPPA’s action.
  • The Supreme Court asked the CBI to brief it on agency probe on FIPB clearance given to controversial Aircel-Maxis deal by the UPA government.

12th Oct, 2014

  • To curb misuse of official cyber tools and attempts of phishing, the Income Tax department has rolled out a secure email system for all its employees and officers.The department has recently discontinued its existing email systems (called Lotus mail and IMail) and has issued instructions to its countrywide staff to get new email IDs prepared after “validation” of their bona fides. 

17th Oct, 2014

  • The Supreme Court has refused to restrain coal companies that have been asked to wind up their coal blocks within six months from extracting and selling coal in the market on a commercial basis. A bench headed by Chief Justice HL Dattu said, the companies could not be restrained from excavating coal during the time granted to them by the apex court for winding up operations.

29th Oct, 2014

  • The Supreme Court directed the National Green Tribunal to shut down all industries releasing untreated effluents into the Ganga unless the units take steps to prevent such discharges by March 31, 2015. A bench comprising Justice TS Thakur and Justices Adarsh Kumar Goel and R Banumathi passed the order after a detailed hearing in which the government agreed to the move.

Doc ID: 10NOV2014-42 E: contact@alayalegal.com;  T: +91 11 41674458; FAX: +91 11-26146998 ©Copyright Protected. Privileged & Confidential for private circulation only.For information purposes only. This paper is not to be construed as ‘legal advice‘. The Author(s) and the Firm disclaim any and all liability in respect of the present circulation.

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