LIBERALISATION OF DEFERRED PAYMENT UNDER FOREIGN EXCHANGE MANAGEMENT ACT

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Deferred payment is an arrangement where the borrower is allowed to start making payments at some specified time in the future. Such kinds of measures are often used in retail settings where a person buys and receives an item with the assurance to begin making payments at a future date.

Prior to amendment

Deferred payments in share purchase transactions between non-resident buyers and resident sellers required prior approval of the Reserve Bank of India (RBI) till recently.

Additionally, authorized dealer banks in India were allowed to open escrow accounts toward payment of share purchase consideration, but the escrow account could be operational for a limited period of only six months. In all other cases of opening/maintaining of escrow accounts for FDI related transactions, prior approval from the RBI was necessary.

Amendment

The amendment provides that in a transaction involving purchase of shares of an Indian company by a non-resident buyer from a resident seller, or vice-versa, the consideration may be paid on a deferred basis subject to the following conditions:

  • The deferred component of consideration must not exceed 25% of the total consideration.
  • Such deferred payment must be made within a maximum period of 18 months from the date of the share transfer agreement.

 

Conclusion

This recent amendment by RBI to permit deferment of purchase consideration and relaxing escrow requirements in cross border share purchase transactions is a positive step towards promoting the ease of doing business in India and encouraging investment into India.

 

Sanchayeeta Das

Associate

The Indian Lawyer & Allied Services

 

ARBITRATION PROCEDURES AND PRACTICE IN INDIA

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Commercial arbitration is the process of resolving business disputes between or among transnational parties through the use of one or more arbitrators rather than through the courts. It requires the agreement of the parties, which is usually given via an arbitration clause that is inserted into the contract or business agreement. The main objective of having an arbitration proceeding is to solve the dispute as fast as possible, which also has a binding effect, without going to the Court of law and getting engaged in the long-drawn judicial procedure.

Arbitration proceedings in India are conducted under the Arbitration and Conciliation (Amendment) Act, 2015 (the Act). The Act is based on the UNCITRAL model law. This ensures that there is a certain level of uniformity in the law.

India is a party to the New York Convention. It has exercised both the reciprocity and commerciality reservations. However, notification is required in the official Gazette in relation to each specific country. Not all countries that have ratified the New York Convention have been notified in the official Gazette of Government of India.

TYPES OF ARBITRATION PROCEDURE: There are two main types of arbitration procedures. These are:

  • Ad- Hoc Arbitration
  • Institutional Arbitration

 

  1. AD-HOC ARBITRATION

Ad-Hoc Arbitration can be defined as a procedure of arbitration where a tribunal will conduct arbitration between the parties, following the rules which have been agreed by the parties beforehand or by following the rules which have been laid down by the tribunal, in case the parties do not have any agreement between them.

  1. INSTITUTIONAL ARBITRATION

In the case of Institutional Arbitration, the disputing parties submit their issue to an institution that has been designated to administer the arbitrational process. The institution then arbitrates the dispute according to the rules laid by them in front of the parties.  The institute selects a panel which administers the whole process.

All the institutes do not provide the same type of services. Some institute just provide the rules on which the procedure will be based (London Maritime Arbtration Association). Other provide a roster of arbitrators to the parties but do not appoint the arbitrators themselves (Society of Maritime Arbitrators in New York).

Certain institutions administer the whole process of arbitration i.e. (International Court of Arbitration of the International Chamber of Commerce).

CONFIDENTIALITY:  There is no provision for confidentiality of arbitrations under Indian law but an agreement on confidentiality may be included in the arbitration agreement.

HOW LONG DO ARBITRAL PROCEEDINGS USUALLY LAST?

This depends upon the arbitrators, the parties and also the complexity of the matter. The 2015 Amendment aims to reduce the time consumed in arbitral proceedings, inter-alia by specifying an upper limit of 1 year from the date of constitution of the arbitral tribunal, for completion of proceedings and making of an award. Parties can consent to extend this period by a further 6 months only, after which an application is required to be made to the Court.

ENFORCEMENT:

DOMESTIC AWARD: An arbitral award is enforceable after the time for making an application to set aside such an award has expired (90 days). However, the court may grant a stay on the operation of the arbitral award on a separate application made for that purpose. The party intending to enforce the award can file an execution petition before the Civil Court. The award is enforced in the same manner as a decree of the court under the Code of Civil Procedure, which provides the framework for the execution of arbitral awards.

FOREIGN AWARD: A foreign arbitration award is enforceable in India under Part II of the Arbitration Act, if it is passed in a jurisdiction/country governed by either the New York Convention or the Geneva Convention. The process for enforcement of a foreign award is similar to that of a domestic award.  The Arbitration Act does not provide any limitation for the enforcement of a foreign award.

 

Parul

Senior Associate

The Indian Lawyer & Allied Services

 

MEDICAL NEGLIGENCE

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“Negligence is the rust of the soul that corrodes through all her best resolves.” – Owen Feltham

Doctors are considered akin to God for their ability to save lives and infuse hope in ailing patients. However, sometimes the doctors, we rely upon, fail to heal our lives and instead the health of the patient worsens. In the case of medical negligence, the doctor will be held liable for certain medical malpractices and a patient can sue for any form of mistreatment.

Even though, a doctor does not assure his patient of a positive result, a medical professional impliedly assures his patient that he possesses the requisite skill and while treating the patient, he would use reasonable “standard of care”. The “standard of care” is defined as what a reasonably prudent medical provider would or would not have done under the same or similar circumstances.

Medical negligence also known as medical malpractice is improper, unskilled, or negligent treatment of a patient by a physician, dentist, nurse, pharmacist, or other health care professional. It is punishable under various laws such as torts, IPC, Indian Contracts Act, Consumer Protection Act, etc. As per Moni v. State of Kerala[1] In the case of medical man, negligence means failure to act by the standards of reasonably competent medical men at the time. There may be one or more perfectly proper standards, and if he conforms to one of these proper standards, then he is not negligent.”

Therefore, it involves three elements of negligence: (a) a legal duty to exercise due care on the part of the treating; (b) breach of the said duty; and (c) resulting damage.

The Supreme Court had ruled in Anuradha Saha’s Case[2] that: “The patients, irrespective of their social, cultural and economic background, are entitled to be treated with dignity, which not only forms their fundamental right but also their human right.”

DUTY OF CARE

When a doctor attends his patient, he owes him certain duties of care. Those are:

  • A duty of care in deciding whether to undertake this case.
  • A duty of care in deciding what treatment to give.
  • A duty of care in administrating that treatment is properly given.

 

A breach of any of these duties gives a right of action for negligence to the patient. A breach of duty is committed by a doctor when he does not perform the standard of care.

NEGLIGENCE (CIVIL OR CRIMINAL)

Negligence in India can be of both civil and criminal nature. Charges of medical malpractice can be brought under the normal civil courts and criminal courts or the consumer forum.

The court in the case of Syad Akbar v State of Karnataka[3] considered that there is a distinction between negligence actionable under tort (civil) and under criminal law and established that, to be actionable under criminal law, the negligence should be extremely gross or of a very high degree.

In Jacob Matthews’s case[4], the Supreme Court further held that: “Criminal liability would arise only if the doctor did something in disregard of the life and safety of the patient.”

Thus, to impose criminal liability under the provisions of Indian Penal Code, 1860, it is necessary that the death should have been the direct result of a rash and negligent act of the accused, and the act must be the proximate and efficient cause without the intervention of another’s negligence.

RES IPSA LOQUITOR

It is derived from the Latin word “res ipsa,” which means “the thing speaks for itself.” Res ipsa loquitur allows plaintiffs to use circumstantial evidence to infer negligence. This principle comes into operation only when there is proof that the occurrence was unexpected, that the accident could not have happened without negligence on the part of the doctor and the circumstances conclusively show that only the doctor is liable. In other words, when the act speaks for itself and no evidence is required.

Examples include: leaving behind abdominal pack in the abdomen post operation (Aparna Dutta v. Apollo Hospital Enterprises Ltd.[5]) or the amputation of a leg instead of being put in a cast to treat the fracture etc.

This doctrine is only a rule of evidence and is applicable in the domain of civil law and not criminal law.

BURDEN OF PROOF

The burden of proof lies on the complainant. The accused person will be presumed innocent until proof beyond reasonable doubt is adduced by the prosecution. In Kanhaiya Kumar Singh v. Park Medicare & Research Centre[6] it was held that negligence has to be established and cannot be presumed.

DEFENCE

Defences for the accused doctors are available under the provisions of Indian Penal Code, 1860. Where:

  • The offence is done by accident or misfortune and without any criminal intention or knowledge in a manner with proper care and caution.
  • A doctor cannot be accused of an offence if she/he performs an act in good faith for the patient’s benefit and does not intend to cause harm even if there is a risk, and the patient has explicitly or implicitly given consent.

 

 

Parul

Senior Associate

The Indian Lawyer & Allied Services

 

References:

[1] Moni vs State Of Kerala [SA.No. 832 of 2000(G)]

[2]Kunal Saha v. AMRI (Advanced Medical Research Institute) (2006) CPJ 142 NC

[3] Syad Akbar vs State Of Karnataka ,  1979 AIR 1848, 1980 SCR (1) 25

[4] Jacob Mathew v. State of Punjab (A.I.R 2005 SC 3180)

[5] Mrs. Arpana Dutta vs Apollo Hospitals Enterprises ltd, Madras, [2002 ACJ 954, AIR 2000 Mad 340, (2000) IIMLJ 772]

[6] Kanhaiya Kumar Singh vs Park Medicare & Research Centre III (1999) CPJ 9 (NC)

 

SETTING ASIDE AN ARBITRAL AWARD

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Not everyone takes defeat in their stride. So whenever an arbitral award goes against one of the parties to the dispute, he seeks a way of setting it aside. An award can be set aside only on the grounds mentioned in the Arbitration and Conciliation Act, 1996.

Earlier arbitration in India was lengthy and complex affairs. The arbitral process was also largely dependent on individual arbitrators due to a lack of formal rules and the fact. Arbitrations were also plagued with uncertainty because of various judicial decisions which expanded the scope of challenges to awards and judicial interference in the arbitral process. This uncertainty led to lengthy court proceedings arising from arbitrations and further ambiguity regarding the means by which final awards could be executed. These drawbacks hindered arbitration as an effective means of dispute resolution.

Setting aside of an award under Section 34 of the Arbitration and Conciliation Act, 1996: An award can be set aside if,

  1. a party was under some incapacity; or
  2. the arbitration agreement was not valid under the governing law; or
  3. a party was not given proper notice of the appointment of the arbitrator or on the arbitral proceedings; or
  4. the award deals with a dispute not contemplated by or not falling within the terms of submissions to arbitration or it contains decisions beyond the scope of the submissions; or
  5. the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties; or
  6. the subject matter of the dispute is not capable of settlement by arbitration; or
  7. the arbitral award is in conflict with the public policy of India.

 

Limitation of Time: Section 34(3) provides that an application for setting aside an award shall not be entertained by the Court if it is made after three months have elapsed from the date on which the applicant had received the arbitral award.

The Arbitration and Conciliation (Amendment) Ordinance, 2015: In order to rectify these issues, Parliament passed the Arbitration and Conciliation (Amendment) Act which came into force on October 23 2015. The Amended Ordinance, 2015 has introduced significant changes to the Act. It is certainly a positive step towards making arbitration speedy, efficacious and a cost effective remedy which have been affecting arbitrations in India. With these amendments, arbitrations in India are sought to be made more user-friendly and cost effective. Furthermore, the ambit for judicial interpretation is narrowed and fair certainty has been brought to the Act. Persons who were earlier wary of Court intervention may now heave a sigh of relief.

The amendment seeks to:

  • make arbitration in India a quicker and more streamlined process;
  • reduce interference by the courts;
  • make India a more attractive destination for foreign investors; and
  • improve the ease of doing business in India

 

Section 34 has been amended to give a conclusive definition to the term “public policy” and includes:

  1. If the making of the award was affected by fraud or corruption.
  2. If it is in contravention to basic notions of morality or justice.
  3. If it is in conflict with the fundamental policy of India.

 

Explanation 1 to the term ‘public policy of India’ substituted in Section 34(2)(b): As per the new amendment, an award passed in an international arbitration, can only be set aside on the ground that it is against the public policy of India if, and only if, – (i) the award is vitiated by fraud or corruption; (ii) it is in contravention with the fundamental policy of Indian law; (iii) it is in conflict with basic notions of morality and justice.

Explanation 2 inserted in Section 34(2)(b): The test as to whether the award is in contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.

Insertion of new sub section (2A) in Section 34: The present amendment has clarified that the additional ground of “patently illegality” to challenge an award can only be taken for domestic arbitrations and not international arbitrations. Further, the amendment provides that the domestic awards can be challenged on the ground of patent illegality on the face of the award but the award shall not be set aside merely on the ground of an erroneous application of law or by re-appreciation of evidence.

Insertion of new sub section (5) in Section 34: The new Act also provides that an application for setting aside of an award can be filed only after issuing prior notice to the other party. The party filing the application has to file an affidavit along with the application endorsing compliance with the requirement of service of prior notice on the other party.

Insertion of new sub section (6) in Section 34: A period of one year has been prescribed for disposal of an application for setting aside an arbitral award.

Amendments to Section 36: Mere filing of application for setting aside an arbitral award would not render that award unenforceable unless the court grants an order of stay on the operation of the said award on a separate application made for that purpose.

 

Parul

Senior Associate

The Indian Lawyer & Allied Services

 

DEFAULTED LOAN

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“Some debts are fun when you are acquiring them, but none are fun when you set about retiring them.” – Ogden Nash

 

Recently, The Parliament has passed “the Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Bill” by voice vote. The Bill, approved by Lok Sabha in first week of the August, 2016 and cleared by Rajya Sabha on 10th of August, 2016, amends four laws – the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest of 2002, the Recovery of Debts due to Banks and Financial Institutions Act 1993, the Indian Stamp Act 1899 and the Depositories Act 1996.

The Bill empowers banks to confiscate security in the case of loan default, a development that assumes significance in view of the episode surrounding industrialist Vijay Mallya. In recent times, the banks have been busy with a spate of legal cases to declare Vijay Mallya and Kingfisher Airlines as wilful defaulters.

RBI norms allow banks to classify a borrower as a wilful defaulter if he defaults in loan payment despite having the capacity to pay or has diverted the funds or has defaulted in repayment and has also disposed of assets given as security without the bank’s knowledge. However, the Bill will not apply to loans for agricultural land as well as student loans.

WHEN A DEFAULTED LOAN AMOUNTS TO CRIMINAL LIABILITY
A default to honour commitments to repay borrowed funds amounts to a breach of contract. Any breach of contract to repay debt is not a crime. The only right of the aggrieved party is to approach the civil court to attach and sell securities or other unencumbered properties and recover the defaulted loan. Mere breach of contract cannot give rise to criminal prosecution under the provisions of The Indian Penal Code, 1860. If it is established that the intention of the accused was dishonest at the time of entering into an agreement, then the liability will be criminal and the accused will be guilty of cheating. But if all that is established is that the representation made by the accused has not been kept, criminal liability cannot be fastened on the accused and the only right the complainant acquires is a money decree for the defaulted loan.

Hence, in cases where borrowers have commenced business or manufacturing activity with loans from banks and if a default is due to a downturn in the economy, or failure of the business enterprise, or defect in product, or glut in the market, or any other similar reason, then such defaults will not amount to cheating.

RBI has introduced the concept of ‘wilful defaulter’ and the following categories of borrowers are treated as wilful defaulters:

  • Unit defaulting inspite of having the capacity to pay; or
  • Diversion of funds; or
  • Transfer or disposal of assets given as security without the knowledge of the bank.

 

The Companies Act, 2013, has created a new offence of fraud in relation to the affairs of a company, which provides that any act or omission, concealment of any fact or abuse of position committed by any person with intent to deceive or to injure the interest of the company or its shareholders or creditors, whether or not there is a wrongful gain or loss, can be investigated by Serious Fraud Investigation Office (SFIO) established under the Companies Act and any violation is punishable with imprisonment of up to 10 years. Cases of wilful defaults can, therefore, be entrusted to the SFIO to investigate whether such default amounts to serious fraud under the provisions of the Companies Act.

 RIGHTS AS A LOAN DEFAULTER, AND HOW ONE CAN SET THE SITUATION RIGHT

STEPS TO BE TAKEN: There must be reason why you have not paid your EMIs for a few months. You may have lost your job, you may have had an emergency which consumed all your savings, you may have paid a huge amount on your education, for your home, or some other urgent requirement. Whatever may be the reason, if you are unable to make your payments, you could consider one of these many options –

  • Defer your payments
  • Reduce your EMI
  • Restructure the loan
  • One-time settlement

 

BENEFIT OF DOUBT GIVEN TO THE DEFAULTER: All borrowers are provided the opportunity and have the right to approach the bank if there is any difficulty in repaying the instalments and to choose an option to restructure their debt to enable a smooth repayment process.

Preliminary notices are sent to the borrower mentioning the amount overdue with interest and penal interest. If the bank has reason to believe that the customer is wilfully delaying the repayment, or if the customer has not come forward with a definite plan of action to repay the dues, the bank can opt for legal proceedings. If there is a guarantor, the bank might approach him, as according to the guarantor agreement, he is supposed to pay the loan when the applicant defaults.

THE REPERCUSSION OF DEFAULT: There are two major repercussions of failing to repay your debts –

  1. All credit-related information of loan owners and Credit Card users is sent to credit rating agencies. They know your credit history, end to end. This will make taking loans in the future difficult.
  1. The property which was used as collateral for the loan can be repossessed and later auctioned by the lender after following due legal process.

 

 

Parul

Senior Associate

The Indian Lawyer and Allied Services

 

PERMISSIBLE ADVERTISEMENT BY A MEDICAL PROFESSIONAL

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“No doctor can make high claims about any procedure.”

Soliciting of patients directly or indirectly by medical professionals is unethical under the Medical Council of India (MCI) Rules and Regulations.

The Indian Medical Association (IMA) has issued a Press Release earlier this year to all its 2.5 lakh members warning them not to advertise “No Cure No Payment” or “Guaranteed Cure” stating both are violations of Medical Council of India (MCI) Code of Ethics Regulations, 2002 as well as Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954.

According to Drugs and Magic Remedies Act, advertisements by doctors are prohibited in any media. The Code of Ethics laid down by Medical Council of India states that advertisements or promises of “Guaranteed Treatment” cannot be made by doctors.

The Press Release comes in the wake of the ongoing case against a doctor couple running an In Vitro Fertilisation (IVF) clinic in Mumbai whose licenses were suspended by the Maharashtra Medical Council (MMC). The Advertising Standards Council of India had filed a complaint against a doctor couple with MMC in 2014. The MMC has suspended the licenses of that doctor couple for three months for putting up advertisements following complaints that they were promised guaranteed pregnancy on their clinic website and even offered refund if the treatment failed, which is a violation of medical ethics under the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002.

Madhya Pradesh Medical Council (MPMC) has also issued warning notices to city’s nearly 50 prominent doctors for advertising and promoting their skills. The action was taken on the complaints lodged with the Council against the doctors. MPMC is a quasi-judicial body that works as a watchdog for the medical profession. Council’s Chairman, Dr G S Patel said, “It is unethical that doctors are advertising their skills through various means. They are regularly featuring themselves in advertisements claiming to cure infertility, diabetes, obesity and other conditions. Summons have been issued to warn that such activities cannot be tolerated.”

The Tamil Nadu Medical Council, in May, 2016, took a resolution warning doctors against advertising online. The Council is asking all doctors to withdraw their names from online registries, and remove any advertisements with their names, photographs, speciality and contact details, as this violates the Medical Council of India’s Code of Ethics Regulations, 2002.

Last Year, Maharashtra Medical Council had issued show-cause notices to 40 doctors for putting up advertisements on print, TV and social media. After a hearing, some doctors were issued warning letters and some were suspended. The Medical Council of India too had taken suo moto action against many Delhi hospitals for putting up advertisements.

Delhi Medical Association Member Dr. Anil Bansal maintained that these advertisements by large hospitals hits small medical units and private practitioners who aren’t with these establishments. “The power of advertising can’t be underestimated and it does create an impression that private hospitals are better and offer more than what is available at Government established hospitals, which may not be the case always. Doctors and hospitals announcing successful surgeries, procedures etc, though informative, are also surrogate advertising. Medical advertisement rules need to be re-looked into.”

WHAT IS ALLOWED

As per the Medical Council of India (MCI) Code of Ethics Regulations, 2002, a doctor is permitted to advertise regarding the following:

 

  • A medical practitioner is however permitted to make a formal announcement in press regarding the following:
  1. On starting practice.
  2. On change of type of practice.
  3. On changing address.
  4. On temporary absence from duty.
  5. On resumption of another practice.
  6. On succeeding to another practice.
  7. Public declaration of charges.

 

  • An institution run by a Doctor for a particular purpose such as a maternity home, nursing home, private hospital, rehabilitation centre or any type of training institution can be advertised mentioning the name of the institution, type of patients admitted, type of training and other facilities offered and the fees.

 

  • A clinic should contain only name, qualifications, name of medical college, name of university, titles and name of speciality, and state medical council registration number.

 

Parul

Senior Associate

The Indian Lawyer and Allied Services

GOODS AND SERVICES TAX: THE ROAD AHEAD

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The Goods and Services Tax (GST) is going to replace all the existing State and Central indirect taxes with one single levy. Currently the States collect VAT, Sales Tax, Luxury Tax, Entertainment Tax and many other taxes. This is expected to unify the tax rates across all States, converting the country into one unified market where any trader can buy or sell goods and services from anywhere and still pay the same cost. This will not only boost the businesses but also prove beneficial to consumers who will see the prices of commodities coming down. It will also make Indian goods and services more competitive globally which can be leveraged by Indian businesses to their advantage.

The Constitution (One Hundred and Twenty-Second Amendment) Bill, 2014, will again have to go to the LokSabha, since the Bill that had been passed on 6, 2015 in LokSabha underwent amendments to reach consensus.

Among the first tasks ahead is the drafting of the Central and State GST laws that will again be required to be passed in the Parliament and ratified by more than 50% of the State Legislatures.

Another issue is whether the GST legislation should be a money bill or a financial bill. If it is proposed to be a money bill thenRajyaSabha can only discuss and not vote on it.

Following a presidential consent, the amendment will take effect. These formalities apart, the parliament will have to pass relevant bills for a Central GST and an integrated GST, while the States will have to enact their own legislations for a State GST. This is because the GST regime will involve the imposition of Central and State levies at identical rates.

Adapting to a particular cap rate will play a vital role; otherwise the GST rate can easily lead to an increase in India’s income inequality. Since the proposed rate itself has become a matter of hot debate and the variation among the various recommended rates by experts and stakeholders range from around 15.5 per cent to as high as 26 per cent.

States also have to be eased with some concrete proposals on the ground that their sovereign authority to impose taxes on goods will not be diluted in any manner by the unified tax regime, and provisions will be made by the Centre when they are in dire needs during emergencies.

As also for resolution of disputes, the role of the GST Council, which will be chaired by the Union Finance Minister, has to be clearly defined. This is another issue over which consensus is still elusive.

The necessary Information Technology infrastructure, too, has to be set up. Towards this, a non-Government private limited company has been constituted “Goods and Services Tax Network” (gstn.org).

The major alarming area for the States will be to prevent revenue loss at any cost. In this regard, the empowered committee of finance ministers uses a concept Revenue Neutral Rate (RNR). RNR is the uniform rate which when applied will leave all the States with the same revenue as before. Therefore, no State will lose by accepting GST. In order to nullify the fear of States, RNR might be loaded with every possible existing tax (excise duty, octroi etc.). This is going to escalate RNR and hence it might increase inflation in the economy and job losses in the unorganized sector.

Mayan Singh Raghuvanshi

Senior Associate

The Indian Lawyer

NON-DISCLOSURE AGREEMENT

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A non-disclosure agreement (NDA) is a legal contract between at least two parties who want to keep confidential information that they share with one another and want to restrict access of the same by third parties. It is also known as a confidentiality agreement (CA), confidential disclosure agreement (CDA), proprietary information agreement (PIA), or secrecy agreement (SA). An NDA creates a confidential relation between the parties to protect any type of confidential and proprietary information or trade secrets.

TYPES OF NDA

A non-disclosure agreement (NDA) may be classified as unilateral, bilateral, or multilateral.

Unilateral NDA

A unilateral NDA is also known as a one-way NDA. It involves two parties where one party i.e. the disclosing party anticipates disclosing certain information to the other party i.e. the receiving party and requires that information to be kept protected from further disclosure.

Bilateral NDA

A bilateral NDA is also known as mutual NDA or a two-way NDA.  It involves two parties where both parties anticipate disclosing information to one another that each intends to protect from disclosure to third parties. This type of NDA is necessary in case of businesses which are considering some kind of joint venture or merger.

Multilateral NDA

A multilateral NDA involves three or more parties where at least one of the parties anticipates disclosing information to the other parties and requires that information to be protected from further disclosure. This type of NDA eliminates the need for separate unilateral or bilateral NDAs between two parties. For example- a single multiparty NDA entered into by three parties who each intended to disclose information to the other parties could be used in place of three separate bilateral NDAs between the first and second parties, second and third parties, and third and first parties.

A multilateral NDA can be advantageous but due to the complexities involved in negotiations parties may find it difficult to enter into such an NDA.

CONTENT

The non-disclosure agreement requires a party to maintain information in confidence when that information has been directly supplied by the disclosing party. However, it is sometimes easier to get a simple agreement signed by the receiving party which requires them to keep the information safe and secure. Some common issues addressed in an NDA include:

  • Outlining the parties to the agreement.
  • The definition of what is confidential, i.e. the information to be held confidential.
  • The disclosure period.
  • The law and jurisdiction governing the parties.
  • Types of permissible disclosure.

 

USE OF NDA IN INDIA

The use of non-disclosure an agreement is on the rise in India and is governed by the Indian Contract Act, 1872. Use of an NDA is crucial in many circumstances, such as to bind employees who are developing patentable technology if the employer intends to apply for a patent. Non-disclosure agreements have become very important in the light of India’s growing outsourcing industry.  In India, an NDA must be stamped to be a valid enforceable document.

Sanchayeeta Das

Associate

The Indian Lawyer & Allied Services

STRATEGIC FORCES COMMAND EXEMPTION FROM THE AMBIT OF RIGHT TO INFORMATION ACT

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Strategic Forced Command (SFC) which is also sometimes known as Strategic Nuclear Command, forms part of India’s Nuclear Command Authority (NCA which is responsible for command and control decisions regarding India’s nuclear weapons programme). It was created on 4th of January, 2003 by Vajpayee Government. Air Marshal Teja Mohan Asthana became its first commander-in-chief.  It is responsible for the management and administration of the country’s tactical and strategic nuclear weapons stockpile.

Responsibility of SFC

It is the responsibility of the Strategic Forces Command to operationalize the orders of the NCA under the leadership of a Commander-in-Chief who is a Senior Officer. It has the sole responsibility of initiating the process of delivering nuclear weapons and warheads, after acquiring clear approval from the NCA.

The SFC manages and administers all strategic forces by exercising complete command and control over nuclear assets, and producing all contingency plans as needed to fulfill the required tasks. Since its inception, the SFC’s command, control and communication systems have been firmly established, and the command has attained a high state of operational readiness.

Right to Information Act

The Right to Information Act, 2005 mandates timely response to citizen’s requests for government information. It is an initiative taken by the Department of Personnel and Training, Ministry of Personnel, Public Grievances and Pensions to provide a – RTI Portal Gateway to the citizens for quick search of information.

Nuclear Weapons Command Not to Come Under RTI Act

Information on the country’s nuclear weapons stockpile and any details on their testing have been put out of the purview of the Right to Information (RTI) Act except for information pertaining to corruption or human rights allegations.

Adding nearly 300 more public authorities by the end of the year to the existing 500 authorities to which RTI’s can be filed online, this is an exception to the approach of the Union Government which has been actively trying to broaden the access to RTI by adding public authorities.

This is the first addition by the Narendra Modi Government since the previous UPA regime added three more in 2011 to the list of public authorities that are exempted from the purview of the RTI. The Central Bureau of Investigation (CBI), the National Investigation Agency (NIA) and the National Intelligence Grid (NATGRID) were added to the list of exempted public authorities.

Incidentally last year, a man who felt entitled after paying the modest statutory fee of Rs. 10 filed an RTI application seeking access to the nuclear launch codes. This was revealed after Vivek Kumar, deputy secretary at the Prime Minister’s Office (PMO) and an Indian Foreign Services (IFS) Officer, tweeted about the incident.

Though it was never officially confirmed, the request was presumably denied. Now that the Strategic Forces Command has been removed from the purview of the RTI, the official secrets regarding nuclear weapons cannot be invoked in the future.

 

Sanchayeeta Das

Associate

The Indian Lawyer and Allied Services

MEDICAL COUNCIL OF INDIA TO BE REPLACEDBY NATIONAL MEDICAL COMMISSION

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The Medical Sector is very important for a huge Country like India. Medical Council of India (MCI) is a statutory body for establishing uniform and high standards of medical education in India.  The MCI grants recognition of medical qualifications, gives accreditation to medical schools, grants registration to medical practitioners, and monitors medical practice in India.

A high-level panel set up by Government think-tank “Niti Aayog” has recommended replacing the MCI with a National Medical Commission (NMC).

“The idea of setting up a new body is to simplify the norms of recruitment and make the process performance based so that the medical institutes either perform or perish,”A major initiative under this is to introduce the system of exit exams for private and government medical colleges”  the official said.

Features of NMC will include the following:

  • NMC will become the main regulatory body and will take over all roles and responsibilities of the MCI.
  • The new body will have eminent doctorsand experts from related fields.
  • To suggest the direction that should be given to medical education in the country.
  • To ensure that the quality of education is at par with global standards.
  • NMC will have around 20 members and their tenure will be for 5 years.
  • It will also have members from other fields such as economics, law, to inculcate more professionalism.

 

According to Niti Aayog, the biggest change under the new system would be that its members would be selected on merit by a high powered search-cum-selection panel and would not be elected, as in the past, by MCI.
“There will be NMC chairman as well as there will be four boards- Under Graduate Medical Board, Post Graduate Medical Board, Accreditation and Assessment Board and a board for registration of medical colleges and monitoring ethics in the profession.

To set up a new institution would require that the Government frame a new law. This has been attempted several times in the past but no Government has succeeded till date. This is a much required step that will help to improve the status of medical education and standards and prevent unlawful practices in the medical profession thereby bringing in substantial improvement in quality of the medical education system.

 

Mayank Singh Raghuvanshi

Senior Associate

The Indian Lawyer and Allied Services