MANIPUR – POLITICAL CRISIS

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Manipur, one of the most beautiful north-eastern States, has come to a situation of crisis with shortage of essential commodities, frequent bandhs, clashes and curfews. The normal life of people in Manipur has become paralyzed.

All these started when three controversial Bills were passed by the Okram Ibobi Singh Government in August last year. It prompted violent protests, killing some people and also injuring many others.

The creation of these three Bills started when there was a demand by the Meiteis in the valley to introduce a permit for any outsider wanting to visit the State. It is called the Inner Line Permit and is granted by the State Government. The Inner Line Permit is an official and obligatory travel document issued by the Government of India to allow inward travel of an Indian citizen into a protected area for a limited period. So, anyone residing outside the State who is not a native will need it to enter Manipur. This Permit was introduced to ensure that the hill States were protected. The plan behind this was to prevent non-tribals from settling there and disturbing the fragile demography.

To fulfill this demand, the three Bills were passed.

The first Bill, Manipur People’s Protection Bill, considers Manipuris as those whose names appear in the 1951 Census. The tribals fear losing the land their parents or grandparents left behind just because of unavailability of records. They fear that they would be excluded as most of these areas were inaccessible at that point of time and documentation was very poor.

The second Bill, the Manipur Land Revenue and Land Reforms Bill (Seventh Amendment), is in direct violation of Section 371C of the Indian Constitution which prohibits purchase of tribal land by non-tribals. Their main fear is that if they lose their land, then they will have nothing to hold on to because they are mostly into agriculture.

The third Bill, the Manipur Shops and Establishments (Second Amendment), also is feared as it will allow expansion of business in tribal areas. This will bring in outsiders to establish shops and after a few years, they will be in charge because of their money power.

Though the Bills have been passed by the assembly, the President has not yet given his assent.

 

Sanchayeeta Das

Legal Associate

The Indian Lawyer

IMPORTANCE OF NUCLEAR SUPPLIERS GROUP MEMBERSHIP TO INDIA

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Nuclear power is a large-scale energy-producing technology that can be used for both civil and military purposes. In 1974, India conducted a nuclear weapons test, at Pokhran, Rajasthan, becoming the first ever country outside the member nations of the United Nations Security Council to do so. When other countries opposed to the nuclear test, in 1974 the Nuclear Suppliers Group (NSG) was formed as an export control regime amongst nuclear supplier countries in order to keep a check on the international nuclear proliferation through implementation of two sets of Guidelines, one for nuclear exports and the other for nuclear-related exports. Amongst these, membership of Nuclear Non-Proliferation Treaty (NPT), which puts restrictions on conducting any further nuclear tests, is only a guiding principle and not a mandatory requirement while deciding on a country’s application for membership at NSG. For instance, France, a non-signatory of NPT, was made a member of NSG.

Joining the NSG will give India better access to low-cost, clean and renewable nuclear energy which is essential for its economic growth and for which a unanimous approval of all 48 members is a prerequisite. But India could manage to get support only from countries like USA, UK, Switzerland, Japan and few others whereas other member nations like Turkey, Ireland, Austria and New Zealand have opposed its entry into NSG.

Until now, the non-renewable process of nuclear power generation involved burning of radioactive heavy metals such as uranium which is not very abundant on earth and burning of fossils, which resulted in emission of greenhouse gases such as carbon dioxide. With the aim to combat climate change, in the year 2014, Bhabha Atomic Research Centre (BARC) came up with a next-generation nuclear reactor which would process the nuclear power in a renewable and environment friendly manner by using thorium-plutonium as its fuel, instead of uranium and fossils. India is rich in thorium reserves but lacks other natural resources such as plutonium which has to be imported. Moreover, the use of nuclear power plants to generate electricity will reduce the use of coal-fired power plants, which will result in reduction of air pollution. But for this, it is essential that India gets recognition at NSG as a member.

NSG membership would provide India the following advantages:

  1. A platform to propose the idea of plutonium trade for its clean and green nuclear energy programme. An early adoption of thorium technology would give India enormous energy independence and security. It will also give India access to technology, know-how, equipments and materials required for setting up of nuclear power plants.
  2. With access to advanced and eco-friendly technology and know-how, India will be in a position to give effect to its Make in India programme by commercializing the manufacture of nuclear power equipments. This will encourage innovation and efficiency in manufacture of high technology and low cost equipments.
  3. While importing the foreign technology and equipments, India could also export its indigenous technology and expertise on peaceful and safe use of nuclear energy to member nations of NSG. This would prove to be beneficial for other nations and revenue generating for India.

 

Harini Daliparthy

Legal Associate

The Indian Lawyer

SUPREME COURT ON CAUVERY DISPUTE

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The issue regarding water distribution from river Cauvery between States of Karnataka and Tamil Nadu (including the Union Territory of Puducherry) was heard in appeal by Supreme Court on 2nd September 2016. After recording the arguments from both sides, the SC on 5-9-2016 held that the Supervisory Committee, constituted under notification dated 22.05.2013, shall pass the final order with regard to whether water shall be released by the State of Karnataka to the State of Tamil Nadu and if it shall, then what quantity of water be released. Until the Committee passes the final order in this regard, the Supreme Court had directed the State of Karnataka to release 15 cusecs of water per day for the sustenance of the ‘samba’ crops and in interest of the farmers in the State of Tamil Nadu and the Union Territory of Puducherry.

Post-5th September, 2016 order of the Supreme Court, agitations were seen across cities of State of Karnataka including Bangalore, Mandya, Mysore and Hassan which had paralysed the daily lives of citizens and destroyed public and private properties causing huge loss of life and money. Therefore, modification of the order dated 5-9-2016 was sought for by the State of Karnataka on 12-9-2016.

In the appeal made to Supreme Court on 12-9-2016, the Court held that agitation can never be the ground for seeking modification of an order. It is the duty if the Executive to maintain law and order in the State and see that the order of the Court is complied with. It is also the duty of the citizens to obey the same. In the event there is any public objection or grievance, they shall take recourse to legal remedies and not take it out on streets.

State of Tamil Nadu claimed that they would be requiring 50 thousand million cubic feet water for the purpose of sustained relief until the Supervisory Committee passes the final order. But releasing such huge quantities of water at one time would leave the State of Karnataka with scarcity of drinking water and water for irrigation. Therefore, it held that the State of Karnataka shall release 12000 cusecs of water per day and the said direction, shall remain in force till 20th September, 2016.

Though the matter was directed to be listed on 16th September, 2016, but as there is difficulty, the matter has been listed on 20th September, 2016 at 2.00 p.m.

 

Harini Daliparthy

Legal Associate

The Indian Lawyer

DEBENTURE TRUSTEES’ ROLE UNDER SARFAESI AMENDMENT ACT, 2016

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Recently, the Parliament has received the assent of the President for the Enforcement of Security Interest and Recovery of Debt Laws and Miscellaneous Provisions (Amendment) Act, 2016 (The Act). The Act has introduced several amendments to the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), Recovery of Debts due to Banks and Financial Institutions Act, 1993 (RDDBFI Act) and other incidental laws. While the Bankruptcy Code provides for collective action of creditors, the Amendments to the SARFAESI Act and other Acts seek to streamline the processes of creditors individually taking action against the defaulting debtor.

 

THE KEY POINTS OF THE AMENDMENT ACT ARE:

 

  1. The Act provides registration of creation, modification and satisfaction of security interest by all secured creditors and provision for integration of registration systems under different laws relating to property rights with the Central Registry so as to create Central database of security interest on property rights.

 

  1. The Act provides for the creation of two new Central Registries/Databases to help quickly and efficiently cross-checking the various properties against a debtor’s name at the time of a default. One Registry maintains a record of all transactions involving secured loans. The other Central Database maintains a record of all property registered under different systems in the Country (immoveable, moveable, intangible).

 

  1. The Act gives powers to the Reserve Bank of India (RBI) to regulate and monitor the activities of Asset Reconstruction Companies (ARC’s) in a changing business environment. The RBI may carry out audits and inspections in ARC’s, and even penalise them in cases of non-conformance with RBI guidelines.

 

  1. The Act removes the stamp duty on assignment of loans by banks and financial institutions in favour of Asset Reconstruction Companies (ARC’s) as long as the asset/property is being transferred for the purpose of securitisation or reconstruction.

 

  1. The Act enables non-institutional investors to invest in security receipts.

 

  1. The Act gives specific timeline for taking possession of secured assets against which a loan had been provided, upon a default in repayment with the assistance of the District Magistrate. The Act provides that this process will have to be completed within 30 days by the District Magistrate.

 

  1. The Act gives priority to secured creditors, after registration of security interest with the Central Registry, in repayment of debts.

 

  1. The Act empowers the District Magistrate to assist the banks to convert their outstanding debt into equity shares and hold a stake of 51% or more in the company, thereby taking over the management of a company in case of default of the company to repay its loans.

 

  1. The Act allows the Debt Recovery Tribunal (DRT) to restore a secured asset or management of a business to the borrower, after examining facts related to the case.

 

  1. The Act includes Debenture Trustee in the definition of secured creditors.

 

DEBENTURE TRUSTEE – A debenture trustee is a person or entity that serves as the holder of debenture stock for the benefit of another party.

DEBENTURE TRUSTEE AS SECURED CREDITORS – Definition of secured creditor under the Amended SARFAESI Act:

Section 2(1) (zd) defines – “secured creditor” means—

  • any bank or financial institution or any consortium or group of banks or financial institutions holding any right, title or interest upon any tangible asset or intangible asset as specified in clause (l);
  • Debenture Trustee appointed by any bank or financial institution; or
  • an asset reconstruction company whether acting as such or managing a trust set up by such asset reconstruction company for the securitisation or reconstruction, as the case may be; or
  • Debenture Trustee registered with the Board appointed by any company for secured debt securities; or
  • any other trustee holding securities on behalf of a bank or financial institution,

 

in whose favour security interest is created by any borrower for due repayment of any financial assistance.

Since the definition of “secured creditor”, as amended, includes a Debenture Trustee for debt securities, the enforcement will be carried out by the Debenture Trustee. In case of secured debentures, the Debenture Trustee is the holder of security interests, which he holds in trust for the debenture holders.

Under this Amended Act, If there is a default in repayment and the debt is qualified as non-performing asset in nature. The Debenture Trustee being a secured creditor can take enforcement action under section 13(2) of the SARFAESI Act.

The Amended SARFAESI Act introduces a proviso to section 13(2) is as follows:

“Provided that—

  • the requirement of classification of secured debt as non-performing asset under this sub-section shall not apply to a borrower who has raised funds through issue of debt securities; and

 

  • in the event of default, the Debenture Trustee shall be entitled to enforce security interest in the same manner as provided under this section with such modifications as may be necessary and in accordance with the terms and conditions of security documents executed in favour of the Debenture Trustee.

 

In case of debt securities, If the debentures issued or invested are not in the books of the trustee at all. Therefore, the question of such debentures or debt securities being an Non-Performing Asset in the books of the trustee does not arise. It is in the light the proviso of sub-section (2) provides that the classification as an Non-Performing Asset in the books of the secured creditor will not be applicable. The Debenture Trustee can take action as provided under the security documents.

 

DEFAULT – The Amendment Act inserted Sub-clause (ii) in the definition of default as follows:

Section 2 (1) (j) “default” means—

  • non-payment of any debt or any other amount payable by the borrower to any secured creditor consequent upon which the account of such borrower is classified as non-performing asset in the books of account of the secured creditor; or

 

  • non-payment of any debt or any other amount payable by the borrower with respect to debt securities after notice of ninety days demanding payment of dues served upon such borrower by the Debenture Trustee or any other authority in whose favour security interest is created for the benefit of holders of such debt securities;

 

ENFORCEMENT OF SECURITY INTEREST BY DEBENTURE TRUSTEE

 

A Debenture Trustee has to send two notices for the enforcement of security interest, one for constituting default under Section 2(1)(j)  and the other for demanding payment in terms of section 13(2) under the SARFAESI Act. The steps, for enforcement of security interest by a Debenture Trustee, are:

 

  1. There has to be a default as defined under Section 2(1)(j) on scheduled payment, as per the terms of issue of the debentures.

 

  1. The Debenture Trustee has to serve a notice demanding payment. This is a 90-days’ notice, required in terms of section 2(1)(j) to constitute a case of default.

 

  1. If, after 90 days of abovementioned notice, the demanded payment is not settled by the issuer/borrower then the Debenture Trustee may serve a notice in terms of section 13(2), demanding payment within 60 days of the notice. This notice has to satisfy all the requirements of Section 13(2), including the details of the secured asset, etc.

 

  1. If, after service of the second notice under section 13 (2), the issuer/borrower does not pay the amount demanded in the notice, the Debenture Trustee may take the measures mentioned in section 13 (4).

 

The Amendment to the SARFAESI Act gives Debenture Trustees a strong right on the enforcement possibilities and widens the scope the role as Debenture Trustees hold the security interest for and on behalf of the debenture holders. Now after the Amendments the Debenture Trustees will play a significant role in enforcement of security interests which goes beyond identifying such stress situations which may jeopardise the security interests they hold and taking timely and appropriate action in that regard.

 

Parul

Senior Associate

The Indian Lawyer

 

 

 

RESISTING ARREST

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When we imagine a person resisting arrest, the mental image that comes to mind is that of a person violently thrashing around and physically resisting an officer who is simply attempting to handcuff him or her.

Resisting arrest is a criminal charge against an individual who has committed, depending on the jurisdiction, at least one of the following acts:

  • Fleeing a police officer while being arrested.
  • Threatening a police officer with physical violence while being arrested.
  • Physically struggling to free oneself from being restrained (handcuffed or put into the police vehicle).
  • Attacking a police officer while being arrested.
  • Providing an officer with false identification (either verbally or by presentation of a false official document, i.e. a fake ID).

 

But it is to be kept in mind that not all arrests are lawful and based upon probable cause. However, an attempt at resisting arrest can lead to additional charges including criminal charges.

In most cases, resisting arrest heads on to other add-on charges. After all, legal administration had to have a reason to arrest the suspect in the first place that caused him or her to resist. In many states, these charges may be called “resisting officer with violence” and “resisting arrest without violence” or similar terminology.

In many jurisdictions, resisting arrest is considered a criminal act. This is usually punishable by upto a year in jail along with added penalties such as fines, community service and probation. These penalties are in addition to the charges that the defendant may face due to the original charges for which the person was being arrested.

A resisting arrest charge is very subjective in nature. It generally relies on the law enforcement officer’s determination that the defendant is resisting being arrested.

In order to avoid being charged with a resisting arrest, the suspect may make an effort to act peacefully and respectfully so that there is no room for charges of this nature to arise. A criminal defense lawyer may be able to challenge an unlawful arrest without putting the defendant’s freedom at stake with resisting arrest charges.

However, in some cases, a person may face resisting arrest charges due to unclear language. The individual may not understand what the law enforcement officer is saying or may not ever be aware that the law enforcement officer is talking to him or her. Individuals who know that they are innocent may resist arrest because they know that that they are innocent. A person may believe that the law enforcement officer has made a mistake or has the wrong person. He or she may believe that the cop is discriminating against him or her. In some jurisdictions, if the arrest is considered to be unlawful then the resisting arrest charges will be dismissed.

Individuals who face resisting arrest officers should seek immediate legal assistance from a criminal defense lawyer. A lawyer may be able to assess the situation and raise all defenses to show that the defendant was in fact not resisting arrest as accused. Rather than fighting criminal charges based on resisting, a lawyer may be able to fight for the defendant’s rights due to an unlawful arrest.

 

Sanchayeeta Das

Legal Associate

The Indian Lawyer

 

 

LIBERALIZATION OF INDIAN LEGAL SERVICES SECTOR

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India has been putting in efforts to liberalize its legal services sector in order to allow foreign law firms and lawyers the right to operate in India. The global integration in the legal profession would also help India in increasing its share in the global services trade. Few Indian firms have set up their branches across other jurisdictions like UK and US, likewise, post-liberalization, the foreign firms and lawyers will be allowed to set up their branches in India and employ Indian lawyers or enter into partnerships with Indian firms, provide legal advice on foreign law, etc.

Basically, legal services in India cover activities such as counseling done by solicitors, drafting and pleading done by advocates and notarial activities done by public notaries under Advocates Act 1961; advisory and arbitration. The legal service, like many other professional services, is a sector where regulatory barriers are rather high. But the NDA led government has relaxed the foreign direct investment (FDI) norms in many sectors such as defence, banking, railways, civil aviation, broadcasting, construction and medical devices, so if the FDI norms in the legal service sector are also relaxed, the liberalization of this sector would act as an accelerator for international investment in India.

But liberalizing the legal services market will have its own pros and cons in the following areas:

Costing:

  • Pros- Although both the foreign firms and Indian firms may charge similar fees from their respective clients and may pay similar salaries to their respective employees, but the expenses involved in travel, building the infrastructure, etc of the foreign firms can be avoided by the Indian firms. As a result the overall cost incurred by Indian firms would be comparatively lesser.
  • Cons- But when it comes to specialized advisory services like legal services for 3G licensing etc. foreign law firms may charge a premium price.

 

Quality:

  • Pros– With entry of foreign firms and lawyers into Indian legal services market, the Indian firms will strive to become more competent by expanding the range of services they provide, employ more and best talent which may include partnerships with foreign legal professionals and provide better quality services to clients.
  • Cons- With the potential growth in competition, Indian firms might need to make their presence more prominent in   the Indian market. But the Advocates Act 1961 does not permit Indian firms to advertise or solicit their work     in any form of media unlike foreign firms which are allowed to advertise in an extensive and flexible manner. As a result, it will create a non-level playing field unless the Bar Council of India (BCI) amends its rules.Moreover, the probability of Indian firms expanding their range of services by getting into partnerships with foreign firms and lawyers would be less because the foreign entrants may not always prefer to use the services of Indian lawyers alone and they would want to bring in experts from different places.

 

Areas of Interest:

  • Pros– It has been observed that foreign law firms and lawyers mostly engage in providing services with regard to corporate documentation, mergers and acquisitions, advisory work on public and private international law, and all other kinds of non-litigation work. Whereas, a majority of Indian legal professionals and firms engage in litigation work. So their areas of interest won’t clash with each other
  • Cons- To permit the foreign firms and lawyers to provide services in their area of interest in India, the lawyer has to be admitted by BCI as an advocate as per the Advocates Act 1961. However, due to the prevailing law which disallows foreign lawyers to practice in India liberalizing the legal service sector will have obstacles for the Government.

 

The US and the UK have been pushing India to open up the legal services sector to foreign firms. But if this sector is made open to one country then it has to open up to other member countries of World Trade Organization (WTO) because the “most favored nation” clause of the General Agreement on Trade in Services (GATS) does not allow favoring any country. As a result there would be ease of access for lawyers coming from different member states, with different backgrounds and training, which could lead to deterioration in the quality of legal services provided in India and it might also undermine the authority of the BCI. Currently the entire question of liberalizing this legal sector is uncertain and only time will tell whether the Indian legal sector will accept the advent of foreign legal professionals and law firms in India.

 

Harini Daliparthy

Legal Associate

The Indian Lawyer

 

ESTABLISHING A FOREIGN ENTITY IN INDIA

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India is the fastest growing economy in the world with a target market of over 1.25 billion population which is the second highest in the world thus, making it desirable for lots of foreign entities to explore, enter and develop their businesses. The Government has also made it easier for foreign entities by developing proactive policies in Foreign Direct Investment. The Government has made changes in the Foreign Exchange Management Act (FEMA), Reserve Bank of India Rules and the Companies Act 2013. All changes have been made with the sole intention of making India a good investment destination and purpose of ease of doing business in India.

A foreign entity can establish its business in any of the following options:

Joint Venture (JV): Creating joint ventures is the most preferred practice among foreign entities to establish business in India. In a joint venture both the parties exercise control over the new enterprise and share revenues, expenses and assets. It can be done with any of the business units available in India. The end result is a new enterprise where two or more units come together to achieve a commercial objective. The joint venture is done for a specific business purpose and for a limited time period. To undertake business activities in India, a foreign company can invest equity in an existing Indian company through a joint venture agreement.

Wholly Owned Subsidiary Company (WoS): wholly owned subsidiary is a company in which a foreign entity makes 100% direct investment in India through automatic route. This is considered as the easiest and the preferred route by the foreign entities for establishment of their business in India. A wholly owned subsidiary company can be formed as a private limited or public limited company. A wholly owned company has more flexibility to conduct business in India as compared to liaison office or branch office. In these companies funding can be done via equity, debt and internal accruals. Indian transfer pricing regulations apply on such transactions.

Liaison Office: Liaison office means a business office which acts as a channel of communication between the head office (outside India) and parties in India. A liaison office can not undertake any commercial activities and cannot earn any income in India. The expense of this office is entirely met by its parent company through inward remittances received in convertible foreign exchanges. The main role of such offices is limited to collecting information about possible market opportunities and providing information about the company and its products to the Indian customers, promoting import export from/to India. The liaison offices are setup under the jurisdiction of RBI. The companies seeking to establish liaison office in India are not allowed to acquire immovable property in India however they can take any property on lease for a period not exceeding five years. The permission for establishment of a liaison office is given for three years initially and it can be renewed thereafter. These offices are not permitted to involve into activities such as entering into any contracts with Indian residents, borrowing funds, trading, etc.

Project Office: Project offices are temporary project or site offices which are setup by foreign companies to execute specific projects in India. Project offices can be setup by the foreign companies which are awarded any contract by an Indian company. They are setup by the permission of RBI on specified conditions. Project offices are not allowed to undertake any work other than the work related to the project for which they are established. There are certain conditions prescribed by RBI which are required to be fulfilled for setting up of project offices. These are:

  1. The project should be funded directly by inward remittance from abroad.
  2. The project is funded by bilateral or multilateral international financing agency.
  • The project should be cleared by appropriate authority.
  1. The company in India awarding the contract has been granted a term loan by a public financial institution or a bank in India for the project.

If any of the above conditions are not met, then in such case the foreign company has to approach RBI for approval. The project office can repatriate profits earned by it after completing the project once it clears all the payment of taxes in India and fulfills all other conditions. A project office is treated as an extension of a foreign company in India and taxed at the rate applicable to foreign companies.

Branch Office: Branch office is an extension of a foreign company involved in business of trading or manufacturing. Any company incorporated outside India engaged in business of trading or manufacturing is permitted to open a branch office in India on basis of specific approval from RBI. There are several activities which a branch office is permitted to do, they are:

  1. Export or import of goods.
  2. Providing professional or consultancy services.
  • Researching in the areas in which its parent company is engaged.
  1. Promoting technical and financial collaborations between Indian companies and its parent company or overseas group company.
  2. Acting as buying/selling agent of its parent company in India.
  3. Providing technical support for the products supplied by its foreign company.
  • Rendering services in developing software and information technology in India.

There are some activities which branch offices are not allowed to undertake like, retail trading activities of any nature, manufacturing activities whether directly or indirectly. However foreign companies are given permission by RBI to undertake manufacturing and service activities through branch offices in India’s Special Economic Zones (SEZs). A branch office is considered suitable for foreign companies which are interested in setup of temporary office in India and do not have long term plans for operation in India.

Limited Liability Partnerships (LLPs): Limited Liability Partnerships have been allowed 100 percent FDI through automatic route in the recent reforms of FDI making it easier for foreign entities to develop their business in India. Prior to changes in FDI policies the investment in LLPs required government approval which made LLP incorporation by foreign entities a long, difficult and expensive process which therefore was not considered as a good option for establishing business in India but after the latest relaxations in the FDI rules any foreign national or entity can easily register and establish a small business in India.

In conclusion a foreign entity can establish its business by joint ventures, wholly owned subsidiaries and LLPs in the forms of creating a new entity in India can setup its business; whereas liaison, branch and project offices are the means through which an already setup brand can establish itself in India. All the reforms made by the Indian Government target ease of doing business in India.

Mayank Singh Raghuvanshi.

Senior Associate

The Indian Lawyer and Allied Services

SPECIAL LEAVE PETITION

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“An unjust law is itself a species of violence. Arrest for its breach is more so.”Mahatma Gandhi

 

Under Article 136, the Constitution of India gives power to the Supreme Court to grant special permission or leave to an aggrieved party to appeal against an order passed in any of the lower courts or tribunals in India.

MEANING OF SPECIAL LEAVE PETITION

Special leave petition (SLP) means that an individual takes special permission to be heard in appeal against any high court/tribunal verdict. Thus it is not an appeal but a petition filed for an appeal. So after an SLP is filed, the Supreme Court may hear the matter and if it deems fit, it may grant the ‘leave’ and convert that petition into an ‘appeal’. SLP shall then become an Appeal and the Court will hear the matter and pass a judgment.

SLP CAN BE PRESENTED UNDER FOLLOWING CIRCUMSTANCE

  • It can be filed against any judgment or decree or order of any high court /tribunal in the territory of India, or
  • It can be filed in case a high court refuses to grant the certificate of fitness for appeal to Supreme Court of India.

 

TIME LIMIT TO FILE SLP

  • It can be filed against any judgment of a high court within 90 days from the date of judgment, or
  • It can be filed within 60 days against the order of a high court refusing to grant the certificate of fitness for appeal to Supreme Court.

 

WHO CAN FILE SLP

Any aggrieved party can file an SLP against the judgment or order of refusal of grant of certificate.

Through SLP, an aggrieved party can appeal to the Supreme Court against any judgement passed by any lower court or tribunal. This leave is granted when the case involves a question of law. Mere errors of fact, mis-appreciation of evidence or even findings of fact arrived at wrongly are not grounds of appeal before the Supreme Court. The Supreme Court is only concerned with question of law i.e. if the law was correctly applied, whether the interpretation of law was in accordance with the settled principles of law etc.

The aggrieved party or the petitioner filing SLP has to give a brief synopsis of the facts and issues presented in the case along with a list of dates specifying the chronology of events pertinent to the judgement. Along with this, the petitioner has to formulate questions of law to appeal against the judgement. These questions should pertain to laws relevant to the general public as well.

Once registered and presented in the Supreme Court, the petitioner will get a hearing before the Court. Subsequently, depending on the merits of the case, the Supreme Court will issue a notice to the opposite parties who will then file a counter affidavit stating their views. It’s at this point that the Supreme Court will decide whether to grant leave to the petitioner or not. If the Court grants leave, the case is then converted into a civil appeal and will be argued afresh in the Supreme Court.

The Supreme Court can rescind or revoke the earlier judgement, modify it or allow it. The Court can also send the case back to the relevant lower court for fresh adjudication in light of principles laid down by it or on account of any issues missed out by the lower court.

Article 133–136 of the Constitution of India defines the appellate jurisdiction of the Supreme Court. Article 133 provides for civil appeals from orders of the High Court, Article 134 provides for criminal appeals and Article 136 provides for special leave petition. If a case does not fall within Article 133 or Article 134 then under Article 136 the Supreme Court may be moved and a special permission may sought to grant leave to appeal.

DISCRETIONARY POWER

Appeal to Supreme Court is not a matter of right but it is matter of privilege which only the Supreme Court will grant to any individual if there exists an important constitutional or legal issue involved. Appeals are regulated by the Constitution of India and Supreme Court Rules, 2013.

According to Article 141 of the Indian Constitution, the Supreme Court’s judgement is declared as law of the land and is binding on all courts in India.

 

Parul

Senior Associate

The Indian Lawyer

Model shops and Establishments (Regulation of Employment and Conditions of Service) Bill, 2016

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The Model Shops and Establishment (Regulation of Employment and Conditions of Service) Bill, 2016 is a welfare legislation which intends to bring equality in regulation of employment and conditions of service throughout the country. According to the Ministry of Labour and Employment, this Bill is a bold step towards employment generation. It will give a boost to employment opportunities to women as they will be permitted to work during night shifts with adequate safety and security provisions. States have been granted autonomy to adopt and modify this Bill as per their requirement, as this subject falls within the State List. This Model Bill would be applicable to shops and establishments employing ten or more workers except manufacturing units. However, the States can change this as per their needs.

The Cabinet in its meeting held on 29th June, 2016 considered the Model Shops and Establishment (Regulation of Employment and Conditions of Service) Bill, 2016 to be sent to States who will modify their individual Acts, if they so desire either by adopting the said Bill as it is or after modifying its provisions as per the requirement of that particular State/UTs. This Bill was approved by the Union Cabinet on June 29, 2016. The Bill was finalized after detailed discussions with public, through internet and with employees/labour representatives, employer’s association and State Governments through Tripartite Consultations process.

Major reforms proposed by this Bill:

Working hours: Establishments are allowed to function on all days in a year and can also decide their opening and closing timings. The Bill puts a limit that employees can work for a maximum of 9 hours a day and 48 hours a week, and upto a maximum overtime of 125 hours in a quarter. Highly skilled workers (for e.g. workers employed in IT, Biotechnology and R&D division) are exempted from these provisions of maximum working hours. This flexibility will enable the establishment to better services to their clients who cater to international customers especially in the IT sector.

Welfare provisions: A number of welfare provisions like drinking water, crèche, canteen facilities, etc. have been proposed by this Bill.

Women: The Model Bill proposes no discrimination against female employees in matters of recruitment, transfers, promotion, etc. It grants liberty to women to work in a night shift only if the employer provides facilities like night crèche, protection from sexual harassment, transportation from establishment to their residence doorstep, etc.

Leave:  The Model Bill entitles every employee 8 days casual leave, one day for every 20 days of work for every worker who has worked for 240 days in subsequent year and 8 days of paid leave for festival holidays.

In addition to the above mentioned reforms, this Model Bill would promote fair competition among the States in improving the Governance and ease of doing business. The enhancement of working hours in shops and establishments 24×7 with adequate provision for protection of the workers will give rise to requirement for additional manpower which will result in additional employment. It is expected that the Bill if adopted by State will lead to growth in jobs especially in the retail, IT, hospitality and services sector.

The Model Bill is a suggestive piece of legislation and has been finalized keeping in view the spirit of co-operative federalism. It is a much awaited reform, aimed at protecting the interest of the employees. This gives liberty to States for fine tuning the Model Bill to suit their requirements. It is indeed an applaudable step by Central Government towards employment generation. This is expected to generate competitive and challenging spirit amongst the States and create an environment which is conducive for large scale employment generation at every level, especially in smaller and medium towns. It will give a boost to employment opportunities to women as they will be permitted to work during night shifts with adequate safety and security provisions. We hope that this Model Bill would be enforced soon and sees light of the day to bring uniformity in regulation and conditions of service across the country.

 

Sanchayeeta Das

Associate

The Indian Lawyer

ENFORCEMENT OF FOREIGN AWARDS IN INDIA

 

Part II of the Arbitration and Conciliation Act, 1996 (the Act) amended by the Arbitration and Conciliation (Amendment) Act, 2015 deals with enforcement of certain foreign awards. India recognises foreign awards under the New York Convention and the Geneva Convention.

CHAPTER I – NEW YORK CONVENTION AWARDS

1.        DEFINITION OF FOREIGN AWARD

According to Section 44 of the Act a foreign award means an arbitral award on disputes arising between parties to arbitration, whether in contractual or non-contractual relationship, considered as commercial under Indian laws enacted on or after the 11th day of October, 1960. But the country must be a signatory to the New York Convention and recognised by the Central Government of India as a Convention country and the award shall be passed in the territory of another contracting country which is a reciprocating territory, i.e the Central Government of India has notified it as Convention country in its Official Gazette.

2. POWER OF JUDICIAL AUTHORITY TO REFER PARTIES TO ARBITRATION

Section 45 of the Act empowers a judicial authority to refer the parties to arbitration at the request of one of the parties or any person claiming through or under him except in the situation when the agreement is found to be void, inoperative or incapable of being performed.

3.  FOREIGN AWARD WHEN BINDING

Section 46 of the Act provides that any foreign award which would be enforceable under this Chapter shall be treated as binding for all purposes on the persons as between whom it was made. It may be relied upon by the parties in any legal proceedings in India.

4. EVIDENCE REQUIRED TO APPLY FOR ENFORCEMENT OF A FORIEGN AWARD

According to section 47 of the Act a person seeking to enforce a foreign arbitral award shall make an application to a court, i.e. high court having jurisdiction in the matter as per the provisions of the Amendment Act, 2015 and provide the original award or its certified copy; original arbitration agreement or its duly certified copy; and if the award or agreement is in a foreign language, the party seeking to enforce must produce a certified copy of a foreign award translated into English and/or any other evidence to establish that the award is a foreign award. The burden of proof is on the party seeking to enforce the foreign arbitral award to prove that it is a genuine foreign award and the aforesaid documents form a prima facie evidence to establish the same.

5. CONDITION FOR ENFORCEMENT OF FOREIGN AWARDS

  1. As per section 48 (1) of the Act, a foreign award may not be enforced in India if it is proved by the party against whom it is sought to be enforced that:
  2. the parties to the agreement were under some incapacity to perform under the law to which they were subjected to and in the absence of any mention of such law, the law of the country where the award was made, i.e. the place of arbitration, or,
  3. the agreement was invalid under the law to which the parties have subjected it and in the absence of any mention of such law, the law of the country where the award was made, or,
  • a fair trial was not conducted by the tribunal passing the award by failing to adhere to the principles of fair hearing, or,
  1. the award passed was partly or wholly beyond the scope of the arbitration agreement, in which case the part of the award exceeding the scope of submission to arbitration may be separated from rest of the award, or,
  2. the composition of the arbitral tribunal or authority and/or the procedure of its appointment was not in accordance with the arbitration agreement or in the absence of any mention of the same in the agreement, it was not in accordance with the law of the country where the arbitration proceedings were held, i.e. the place of arbitration, or,
  3. the award has not yet been made binding on the parties or has been set aside or suspended by a competent authority of the country which is either the place or seat of arbitration.

The court may call upon such party making an application under section 48 (1) to provide evidence to prove the existence of any or all of the grounds for refusal of enforcement of award as mentioned above.

  1. As per section 48 (2) of the Act, a foreign award may not be enforced in India if it is found by the court in India that:
  2. the settlement of the award is not as per Indian arbitration laws, or
  3. the enforcement of the award is contrary to the public policy of India. This defense should be construed narrowly. It has to be something more than mere contravention of law to attract this defense. An award is said to be in conflict with the public policy of India if it has been affected by fraud or corruption; or it was in violation of the of the Act; or it was in contravention with the fundamental policy of Indian law or basic principles of morality or justice.

Section 48 only provides grounds for refusal of enforcement of foreign award as mentioned in A and B and it does not permit the court to make a review of the foreign award on the merits of the case; does not permit the court to exercise its appellate jurisdiction over the foreign award; and does not permit the court to enquire as to whether some error has been committed by the tribunal while passing the foreign award.

It is further provided that if an application for the setting aside or suspension of the award has been made to a competent authority, the court may, if it considers it proper adjourn the decision on the enforcement of the award and may also, on the application of the party claiming enforcement of the award, order the other party to give suitable security.

6. ENFORCEMENT OF FOREIGN AWARDS

As per section 49 of the Act if a court decides to uphold the foreign award and enforce it then it shall be deemed to be a decree of the court and no appeal shall lie against the award so upheld except for a discretionary appeal to Supreme Court of India under Article 136 of the Constitution of India when it is a question of fundamental importance or public interest. But in the case of an award held to be non-enforceable by the court, an appeal may be allowed under section 50 (1) (b) of the Act.

The decree shall be executed, on application by the decree-holder, in accordance with the provisions of CPC by the court which passed it.

CHAPTER II – GENEVA CONVENTION AWARDS

  1. INTERPRETATION

As per section 53 of the Act a foreign award is an arbitral award on disputes relating to matters which are considered commercial under Indian laws enacted after 28th day of July, 1924 and comply with the following conditions:

  • The award is in accordance with the agreement for arbitration to which the Protocol laid down in the Second Schedule of the Act is applicable;
  • The award is with respect to the persons, one of whom is subjected to the jurisdiction of the country which has been recognised as a Convention party by the Central Government of India vide notification in the Official Gazette and the other who is subject to the jurisdiction of any other Convention country so recognised by India through notification in the Official Gazette.
  • The award has been made in any of the Convention countries so recognised by the Central Government of India vide notification in the Official Gazette and the award shall be deemed final only if no legal proceedings or appeal against such award is not pending in such jurisdictions.

2. POWER OF JUDICIAL AUTHORITY TO REFER PARTIES TO ARBITRATION

Section 54 of the Act empowers a judicial authority at the request of one of the parties or any person claiming through or under him to refer the parties to arbitration if it is satisfied about the validity of the agreement. The section is attracted only if there is an actual reference to the arbitration.

3. FOREIGN AWARD WHEN BINDING

Section 55 of the Act provides that an award which satisfies the conditions of enforceability mentioned under section 57 of the Act is enforceable and is to be treated as binding for all purposes and also on persons as between whom it was made. It may be relied upon by the parties in any legal proceedings in India. Any references to enforcing a foreign award shall be construed as including references to relying on an award.

4. EVIDENCE REQUIRED TO APPLY FOR ENFORCEMENT OF A FORIEGN AWARD

According to section 56 of the Act a party seeking to enforce a foreign arbitral award shall make an application to a court, i.e. high court having jurisdiction in the matter as per the provisions of the Amendment Act, 2015 and provide the original award or its certified copy; evidence to prove that the award has become final and is in pursuance with section 57 (1) (a) and (c); and if the award or agreement is in a foreign language, the party seeking to enforce must produce a certified copy of a foreign award translated into English and/or any other evidence to establish that the award is a foreign award.

If the award or agreement is in a foreign language, the party seeking to enforce must produce a certified copy of a foreign award translated into English. As per the Amendment Act, 2015 the application for enforcement of a foreign award will only lie to a high court having jurisdiction.

5.  CONDITION FOR ENFORCEMENT OF FOREIGN AWARDS

As per section 57 (1) of the Act, there are certain conditions for enforcement of foreign awards under the Geneva Convention, such as:

  • The award has been passed in accordance with the submission to arbitration by parties;
  • The Indian laws of arbitration allow the settlement of the award;
  • The award has been passed in accordance with the arbitration agreement by the tribunal or arbitral authority as determined by the parties mutually and according to the law governing the arbitration;
  • The award has become final in the country where it has been passed and no objections or appeal or any other proceedings are pending against it;
  • The enforcement of the award is not contrary to the public policy or the laws of India. An award is said to be in conflict with the public policy of India if it has been affected by fraud or corruption; or it is in violation of confidentiality provisions of an attempted conciliation under the Act; or it was in contravention with the fundamental policy of Indian law or basic principles of morality or justice.

As per section 57 (2) of the Act, a foreign award may not be enforced in India if it is found by the court in India that:

  1. the award has been declared null and void by courts in the country in which it was made;
  2. fair trial was not held by the arbitrator, in the sense, that the party was not given a fair opportunity to be heard or that he was not properly represented by an advocate, pending which the award has been passed;
  3. the award is beyond the scope of the submission to arbitration: Provided that if the award has not covered all the disputes submitted to the arbitral tribunal, the court may either postpone such enforcement or grant it subject to such guarantee as the court may decide.

Section 57 only provides grounds for refusal of enforcement of foreign award as mentioned in A and B and it does not permit the court to make a review of the foreign award on the merits of the case; does not permit the court to exercise its appellate jurisdiction over the foreign award; and does not permit the court to enquire as to whether some error has been committed by the tribunal while passing the foreign award.

The party against whom the award has been passed, if he proves, that there exists any other ground other than mentioned above to challenge the validity of the award, then the court, may, either refuse the enforcement of such award or postpone the proceedings and give the party sufficient time to get the award cancelled by the competent tribunal.

6.  ENFORCEMENT OF FOREIGN AWARDS

As per section 58 of the Act if a court decides to uphold the foreign award and enforce it then it shall be deemed to be a decree of the court. The Arbitration Act and interpretations by the Supreme Court provide that every final arbitral award is enforced in the same manner as if it were a decree of the court and as per section 59 of the Act appeals may lie against the order refusing to refer the parties to arbitration under section 54; refusing to enforce a foreign award under section 57. Generally, no second appeal shall lie from the order passed in the appeal under section 58 but right to appeal to Supreme Court is not barred.

 

Reference:

[1] Renusagar Power Co. Ltd. v. General Electric Co., 1994 Supp (1) SCC 644

[2] Shri Lal Mahal Ltd. v. Progetto Grano Spa, 2013 (3) ARBLR 1 (SC).

[3]Fuerst Day Lawson Limited v. Jindal Exports Limited, (2011) 8 SCC 333- It was held that no appeal including a letters patent appeal shall be allowed.

[4] Shri Lal Mahal Ltd. v. Progetto Grano Spa, 2013 (3) ARBLR 1 (SC).