Deal · 2020-03-11 · Theme: Knowing The Competition Law Sets You In The Right Direction Competition LAW SUMMIT2014 13th December, 2014 Hotel Taj Mahal, New Delhi Must Attend For

India’s No. 1 Legal and Corporate Awareness Magazine

LEGAL MEDIA GROUP ` 70 | US $7 | £5www.legalera.in | December 2014 Vol. V Issue X

RIGH

T IS

MIGH

T

68P.

BY THE PEOPLE. FOR THE PEOPLE. OF THE PEOPLE.

Pg. 16

Pg. 22

Pg. 28

Pg. 34

What’s theDeal?

Movers&Shakers

Scheme, 2014

A close look at

Securities Fraud in India:

as an Investigator and Enforcer

SEBIThe Depository Receipts

Pg. 40

Where Brand Protection

Falls Short

3 www.legalera.in | legal era | December 2014

Letterfrom editor

The past quarter-of-a-century has seen rapid changes in global financial markets including deregulation, the emergence of newer products and blurring of boundaries between financial intermediaries among others.

The forces of liberalisation and innovation have brought several advantages in the form of reduced costs of financial intermediation, newer ways of mobilising domestic and international savings, and an ever-expanding menu of financial assets and liabilities to choose from.

At the same time, this has posed newer, more complex challenges. For instance, individual institutions now face greater risk of mismanagement leading to illiquidity or insolvency. With growing interdependence between markets and institutions, there is greater risk of propagation of disturbances through the financial system a.k.a. systemic risk. With greater freedom, asset prices have become more volatile, rendering the task of stabilising the economy even more difficult.

Speaking of India, we will continue to gain from increased integration with global financial markets, however, the trick is to do so in a way that does not expose the domestic economy to wide fluctuations while accessing capital flows which are caused by sudden swings in confidence.

Ashok K. RaizadaEditor-in-Chief

A combination of factors such as uncertainty, an

enormous increase in data processing power brought

on by the computer revolution, and growing

securitisation has fuelled the growth of financial

capital markets, resulting in both macro- and micro-

economic benefits

CapitalMarketsEconomy

And The

Theme: Knowing The Competition Law Sets You In The Right Direction

CompetitionLAW SUMMIT2014

13th December, 2014 Hotel Taj Mahal, New Delhi

Must Attend For CXO, CEO, CFO, GC, CS and Law Firm Practising Competition Law

Knowing The Competition Law Sets You In The Right Direction

Key Discussion Areas•CompetitionLawIssuesInIndia:IndustryCaseStudies

•CompetitionLawCompliance:Whyisitnecessary?

•Anti-CompetitiveAgreementsandAbuseofDominance

•CompetitionLaw:AGlobalPerspectiveWithCaseStudies

•CompetitionIssuesandIntellectualPropertyRights

üAntitrust&CommercialLawyers

ü In-HouseCounselüGeneralCounselü LawFirmPartners&Associates

ü CEO&COO

ü CA&CSü CorporateProfessionalsüEnforcementOfficialsüAcademicsinvolvedinAntitrust&TradeLaw

üLawyers

Delegate Profile

on Team registration and other benefits

In-House Team Gets a Discount of

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Leaders Addressing The Forum From

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Sanjeev Gemawat Vice President-

Legal & Secretarial DLF Rentco Group

S. RamaswamyExecutive Vice

President, Group General Counsel

Escorts Ltd.

Anand PathakManaging

Partner P&A Law Offices

Prathiba M. SinghSenior AdvocateDelhi High Court

Dev BajpaiExecutive Director

Legal and Company Secretary Hindustan

Unilever Limited

B. GopalakrishnanLegal Advisor

and Head - Legal Operations Group,

Asset Reconstruction Company (India) Ltd.

Amitabh Lal DasDirector & Head of Legal, Compliance

and RegulatoryMax Life Insurance

Shukla WassanExecutive Director–

Legal & CSHindustan Coca-Cola

Beverages Ltd.

Confirmed Speakers

Dr. Akhil Prasad Country Counsel

Boeing International Corporation, India

Debolina PartapGeneral Counsel and Vice President Legal

Wockhardt Group

Avirup BoseExpert in Competition

Law Competition Commission of India

Anny TubbsGeneral Counsel

CompetitionUnilever Legal Group

Rajinder Sharma General Counsel

Samsung

Dr. Geeta GouriFormer Member

Competition Commission of

India

Nirmala SitharamanMinister of State

for Commerce and Industry (Independent

Charge)

Ramji Srinivasan Senior Advocate

Supreme Court of India

Lalit BhasinPresident

Society of Indian Law Firms (SILF)

Dhanendra KumarChairman

Competition Advisory Services

India LLP

Ashish ChandraGeneral CounselSnapdeal.com

Srivals Kumar General Counsel

& Vice President - Legal Flipkart.com

Murali NeelakantanGlobal General

CounselCipla Limited

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What’s theDeal?

28

32 34

16 Spotlight

The Scheme, in order to safeguard the interests of domestic investors, attempts to implement control over fluctuations in price at which fresh securities are issued, against which potential depository receipts are to be issued

The year 2014 has been a remarkable year. A year synonymous with the trend-breaking election it hosted. A coming of age year for a new India. A year when young India entered business in droves and thrived. A year when start-ups and big businesses grew and possibly overshadowed all other interests.

Coming as they do at a time when MNCs have been complaining about arm-twisting tactics employed by Indian tax authorities to squeeze more tax revenue out of them...

SEBI has within itself facets of the executive, legislature and judiciary. The article traces important cases tackled by the SEBI in the last quarter of a century and attempts to answer the question...

Outlook

Zoom In

Let’s Uphold

The Depository Receipts Scheme, 2014

A close look at

After Vodafone, Shell Escapes From The Jaws Of

Income Tax as an Investigator and Enforcer

Securities Fraudin India: SEBI


Contents44

47

48 52

40

03 Editor’s Note

10 Reader's Note

12 World @ Glance

14 Nation @ Glance

26 Milestones

56 Policy Update

58 Book Review

60 Legal Precepts

61 Mind-Boggling

64 Fun ‘n’ Frolic

66 Open Bar

Reg

ular

s

Take on Board

Barely Legal

Let’s Uphold Zoom In

Insights

At a time when most sectors of the Indian economy are opening up to global competition, shouldn’t the legal sector follow suit? …

We all know that many of our laws are archaic and behind the times we live in. Ahead of the winter session of Parliament, we at Legal Era have put together a wish-list of laws that need immediate scrapping...

The body has issued a discussion paper on 9th May, 2014, seeking comments from stakeholders for a review of the regulations that were notified on 10th June, 2009

The recent attempt by the Delhi High Court to draw a dividing line between “FORCIBLE” sexual intercourse that amounts to rape and “FORCEFUL” sexual intercourse that does not amount to rape, has the potential to increase the scope for subjectivity and misuse in the country’s already vague rape law

The article makes a case for brand protectors to be a step ahead of infringers in order to restore public confidence and promote economic growth

Forced or Forceful

Brand Protection

Falls Short

Where

LegalGiveLiberalisation

A Chance

!unk emJ

Delisting Regulationsseeks Review of

– A Dangerously Ambiguous Distinction


Reader's

Note

Knowing the basics of law and individual rights is a must,

The content of your magazine interests me. Good work

Reading your articles on law and business makes me realise that how often we overlook the importance of these in our life.

although I am yet unaware of the self rights the country has to offer. I am not from a legal background nor am I a corporate employee; I am a B.Com student who is interested in gathering knowledge

about nation, laws and politics

Vansh Agarwal, Mumbai

Your magazine always keeps me updated about the upcoming events conducted by Legal Era. I have visited your website

quite a few times for events updates in the legal domain. The magazine content is very informative and the language spoken

by your magazine is easy to understand.

It seems Legal Era is trying hard to make legal reformation in the market! The team is doing a good job. I like all the sections of the

magazine. Reading articles written by experienced lawyers is a good source to gain and share knowledge.

The first time I came across the magazine I thought it was not my cup of tea; however, the simple language and informative nature

changed my percept

Sandeep Chatterjee, Pune

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Lately I have realised that the magazine follows a theme for every month. The themes are varied laws and I personally think it is a good

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“The woods are lovely, dark and deep. But I have promises to keep, and miles to go before I sleep.” - Robert Frost

Theme: Litigation v/s Arbitration - Vision 2020

Justice (Retd.) A. P. Shah Chief Justice

Delhi High Court

Fali Nariman Senior Advocate, Supreme Court of

India

Shri Ravi Shankar Prasad

Minister of Communications & Information Technology

Chief Guest Guest of Honour Keynote Address By

Inaugural New System to grow Effective Arbitration in India or India as the centre for resolving disputes: legislatIve changes past, present & future

Session 1: 100 Smart Ways To Tackle Construction Disputes

Session 2: Arbitration in India - A Litigant’s Nightmare Why & Till When

Session 3: Foreign Arbitral Awards Challenges

Session 4: Supportive Judiciary Is A Must To Grow India As A Centre For International Commercial Arbitration. Are We Lacking It?

Session 5: International Experts Panel On Dispute Resolution - Ways To Deal With Dispute Resolution Globally

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Contact +91-9819002345 +91-9967255222 +91-8879635571/72For Speaking, Sponsorship Opportunities & Delegates Registration

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Rajinder Sharma General Counsel

Samsung

Sanjeev Gemawat Sr. Vice President-Legal

& Secretarial DLF Rentco Group

Badrinath DurvasulaVice President & Head

LegalLarsen & Toubro

Parag P. Tripathi Senior Advocate


Shishir Dholakia Senior Advocate


Dr. Akhil PrasadCountry Counsel

IndiaBoeing

Girish Gokhale Former Legal Head

JSW

Sherina Petit Partner

Norton Rose Fulbright

Justice Rajiv Sahai EndlawJudge

Delhi High Court

Justice ManmohanJudge

Delhi High Court

Kabir DuggalAssociate

Curtis

John FellasPartner

Hughes Hubbard & Reed LLP

Ganesh Chandru Advocate & Solicitor

Singapore

Lalit BhasinPresident

The Society of Indian Law Firms (SILF)

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World @ Glance


LegaL updates from across the gLobe

united states of america

US chemical giant Dow has dodged justice again by failing to comply with an Indian court summons over the catastrophic 1984 gas leak in Bhopal which left thousands dead and many more with chronic and debilitating illnesses. For 13 years, Dow has denied that it has any responsibility towards the victims and survivors of Bhopal. In a letter to Amnesty International earlier this year, a Dow official stated that efforts to involve the corporation in Indian court proceedings were “without merit” and tried to distance Dow from its wholly owned subsidiary Union Carbide Corporation (UCC).

In 2001, Dow acquired UCC, the US-based multinational that was a majority owner of the company that operated the Bhopal plant at the time of the leak. UCC has also repeatedly ignored orders to appear before the Indian courts to answer criminal charges concerning the disaster. The summons – the third issued to Dow, on 4 August this year – made it clear that, as UCC’s sole owner, Dow has a responsibility to ensure UCC faces these claims. The court has ordered another summons notice to be issued on 22 November and the hearing has been rescheduled for 14 March, 2015.

This year marks the 30th anniversary of the Bhopal disaster. An estimated 22,000 people died following the leak and more than 570,000 were exposed to damaging levels of toxic gas. Many people in Bhopal still suffer from serious health problems. Pollution from the abandoned site has contaminated the local water supply and poses an ongoing threat to the health of surrounding communities. Amnesty International’s Secretary General Salil Shetty will next month visit Bhopal for the 30th anniversary of the disaster on 2-3 December, to show solidarity with the efforts of survivors and activists who have fought against injustice for three decades.

U.S. President Barack Obama and Chinese President Xi Jinping announced both countries will curb their greenhouse gas emissions over the next two decades. Under the agreement, the United States would cut its 2005 level of carbon emissions by 26-28% before the year 2025. China would peak its carbon emissions by 2030 and would also aim to get 20% of its energy from zero-carbon emission sources by the same year.

“As the world’s two largest economies, energy consumers and emitters of greenhouse gases, we have a special responsibility to lead the global effort against climate change,” Obama said in a joint news conference with Xi.

The announcement marks the first time China has agreed to peak its carbon emissions, according to the White House. Jinping is calling for “an energy revolution” that would include broad economic reforms addressing air pollution.

Jinping said both sides were committed to working toward the goals before the United Nations Climate Conference in Paris next year.

The announcement could put climate change back on the G20 agenda, said researcher David Holmes of Monash University in Australia.

The goals laid out by Obama and Jinping were not as ambitious as some hoped, said Lo Sze Ping, CEO of the World Wildlife Fund Beijing.

But “what’s important is that both these two large emitters are taking the responsibility to act and work together to resolve the problem, not the numbers or targets themselves,” he said.

The White House said the ultimate target is to “achieve deep economy-wide reductions on the order of 80% by 2050.”

dow chemicaL a no-show in court hearing over bhopaL disaster

us and china enter into cLimate change deaL

Thursday, 13th November 2014

Thursday, 13th November 2014

International


africa europe

Ugandan Court has issued an arrest warrant for Joseph MagandaziYiga, the proprietor of the land dealership Jomayi Property Consultants over a sh87m debt owed as accumulated commission to a land broker Andrew Maviiri.

The warrant was issued by the assistant registrar of the execution and bailiffs division of the High Court in Kampala, Muhammad Kasakya.

The warrant dated November 6, says, “This serves to request every Police officer of the Uganda Police Force to ensure that the execution is done in an orderly manner.”

It adds that Yiga must also pay costs for the services of the bailiff Musa Luwambya, who operates under the trading name Madrilo Associates, Court Bailiffs and Auctioneers.

The warrant expires on December 6, a day on which the court is expected to be informed on whether the warrant has been executed or reasons for failure, in the event that it fails.

The debt stemmed from an accumulated commission that Yiga failed to advance to Maviiri after purchasing over 400 acres of land at BulobaKisamula on Mityana road in 2007.

The European Court of Justice has said member states can deny certain payments to unemployed EU citizens who move to that country just to claim benefits.

The court said Germany was right to deny an unemployed Romanian woman a particular allowance because she showed no sign of seeking work.

Politicians in several member states have promised to crack down on what they call “benefit tourism”. Meanwhile German MEP Manfred Weber, the leader of the main conservative group in the European Parliament, told the media that the decision proved EU countries could “avoid social benefits tourism without violating the free movement of citizens”.

The ruling only relates to non-contributory benefits, where the claimant does not make a contribution through the tax system. The ruling relates to a case involving a Romanian woman and her son living in Germany who had been denied access to a non-contributory subsistence allowance from its social security system.

The court said the defendant did not have sufficient financial resources to claim residency in Germany after an initial three months, so she could not claim that the rules excluding her from certain benefits were discriminatory.The EU court said there was no discrimination involved in denying a citizen from another EU country access to a non-contributory benefit which is available to German citizens.

The European Commission said it has consistently stressed that freedom of movement is about the right of circulation, not about an unrestricted right to claim benefits - and the European Court has confirmed this.

ugandan court has issued an arrest warrant for Joseph magandaziYiga

ecJ: members can curtaiL ‘benefit tourism’

Monday, 10th November 2014

Wednesday, 12th November 2014

DISCLAIMER: It may be noted that the Legal Era edition publishes select news pieces collated from various sources, based not necessarily on their timeliness and topicality but their interest to you.

Nation @ Glance


HigH Court & tribunal news around tHe nation

“Gone are the days when the medical profession was regarded as service to society. Nowadays, most hospitals are run like businesses rather than as a service,” said a division bench of Justices V. M. Kanade and Anuja Prabhudessai, Bombay High Court, expressing displeasure over the commercialisation of medical professions. “Every one of us has suffered at the hands of doctors at one point or the other, least is said the better, when it comes to what the doctors do and what they should do,” said the bench.

Bombay High Court

Hospitals are to be regarded as serviCe to soCiety and not businessTuesday, 11th November, 2014

The observations were made during the hearing of two petitions challenging the purported practice of detaining patients adopted by some hospitals for recovery of their dues. The court also expressed suspicion regarding the increasing use of laboratory and other tests prescribed by doctors for aiding diagnosis.

The court was hearing the petition of a Kurla resident, Trevor Britto, who alleged that Prachin Healthcare Multi-specialty Hospital at Panvel had refused to discharge his injured bus driver, Chandrakant Pawar. Advocate Rui Rodrigues, who represented an association of doctors, said the situation has changed because the medical profession has come under the purview of the Consumer Protection Act, 1986, and doctors have now become liable as service providers.

Replying to the plea, the Medical Council of India (MCI) filed an affidavit stating that the MCI Act is applicable only to registered medical practitioners and not to hospitals and clinics. Therefore, the MCI has no control over them.

Calcutta High Court

Kerala HigH Court refuses to intervene in ‘Kiss of love’

submission. “This is not a kiss fest. It is a gathering of likeminded people to protest against moral policing. We are independent thinkers and this is a gathering of Facebook users,” they said, adding young and old couples, parents and youngsters were all welcome to participate in the event, which is a platform to protest against moral policing.

Rahul said though they approached the police four days back with a request for permission to conduct the event, they were yet to receive any intimation allowing or denying permission.

Pointing out that kissing and hugging was only a form of agitation they had chosen to raise awareness against moral policing, Rahul said it was precisely due to the novel form of protest they had adopted that so much heat had been generated. “Isn’t everyone talking about the event?” he asked.

“Because we selected this form of protest, everyone is discussing it. We want to create an awareness against moral policing,” they said.

Kuriakose said the group would next focus their attention on creating awareness about AIDS.

A day after the Kerala High Court refused to intervene, organisers of the controversial ‘Kiss of Love’ protest today said they would go ahead, even as they were yet to get permission from the police. Stressing that it was “not a kiss fest” but a gathering of like-minded people to raise awareness against moral policing, they said they would focus next on creating awareness about the deadly AIDS.

‘Free Thinkers’, a group of social networking website Facebook users, is organising the programme tomorrow at the Marine Drive grounds to protest against moral policing. The organisers expect about 700-1000 people to participate.

“There is no question of backtracking. The protest will be held as scheduled at 5 PM at the venue with participants holding placards,” Rahul Pasupalan, IT professional and short film maker and Jijo Kuriakose, a researcher and member of ‘Free Thinkers’, a Facebook group, told reporters here. Yesterday, the organisers had received a shot in the arm with the Kerala High Court refusing to interfere with the event after the state government assured action would be taken in the event of any illegal activities. Two petitions seeking to prohibit the event were disposed by the court recording the government’s

Tuesday, 4th November, 2014

National


Madras High Court

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legal assistance team. MHAA noted that the Centre had already appointed a counsel on behalf of the Union government, and requested the Centre to use its good offices to speed up the fishermen’s release.

Some advocates shouted slogans against the Sri Lankan Government as a group of them entered the hall of the First Bench headed by Chief Justice Sanjay Kishan Kaul, who condemned the act of the advocates.

The Madras High Court Advocates Association (MHAA) boycotted court proceedings demanding that the state government appoint a counsel to defend the five fishermen sentenced to death by a court in Sri Lanka on drug smuggling charges.

The Association said the boycott was ‘near total’. An MHAA General Body meeting on November 7 passed a resolution for the one-day boycott. The Association decided to extend legal assistance to fishermen by appointing a

MHaa boyCotts Court proCeedingsTuesday, 11th November, 2014

DISCLAIMER: It may be noted that the Legal Era edition publishes select news pieces collated from various sources, based not necessarily on their timeliness and topicality but their interest to you.

A division bench of the Gauhati High Court set aside the order of Nagaland assembly Speaker Chotisuh Sazo disqualifying three NCP legislators who merged with the BJP. T.M. Lotha, Imtilemba Sangtam and Mmhonlumo Kikon were disqualified as members of the 60-member assembly by the speaker Aug 25.

Nationalist Congress Party supremo Sharad Pawar had also written to Sazo to immediately disqualify the three members on the ground that the NCP has not merged with the Bharatiya Janata Party.

Gauhati High Court

gauHati HC quasHes disqualifiCation of 3 nCp legislatorsThursday, 13th November, 2014

However, the division bench of the high court comprising Chief Justice (acting) K.S. Rao and Justice Ujjal Bhuyan termed Sazo’s order disqualifying the three erstwhile NCP legislators as “illegal”.

“The court has set aside the Nagaland assembly speaker’s order and held the disqualification of the three erstwhile NCP legislators illegal in as much as per the mandate of paragraph 4 (2) of the 10th schedule of the Constitution,” S.S. Dey, the legal counsel of the three BJP legislators, told media.

Dey said the court said that the the three erstwhile NCP legislators joining the BJP was a “valid merger of their original political party”.

Legislator Kikon told IANS that the court’s order has proven the “arbitrary decision of the speaker wrong”. After the High Court order, the number of BJP MLAsin the 60-member assembly has gone up to four. The BJP is supporting the Naga People’s Front-led Democratic Alliance of Nagaland (DAN) government headed by T.R. Zeilang.


Spotlight

What’s theDeal?

Bangalore-based Madrat Games raised close to $1 Mn in funding from Flipkart India founders Sachin Bansal and Binny Bansal,

along with founders of IT outsourcing firm Global Logic - Rajul Garg, Sanjay Singh, Manoj Agarwal.

Madrat founded by IITians Rajat Dhariwal, Manuj Dhariwal and Madhumita Halder launched its first game Aksharit, a Hindi version on the lines of Scrabble in 2010, which was piloted across states like Rajasthan, Madhya Pradesh and others. However, lacking follow-ups from these schools, the company forged partnerships with retailers like Shoppers Stop, Hamleys and Central for distribution in 2012.

Blume Ventures and US-based First Light Ventures funded the start-up in 2012 infusing INR 3 Cr in the company to build its retail presence. The start-up has so far launched a portfolio of 70 board games that are

sold through 2,000 retailers across India and also lists on marketplaces like Flipkart and Amazon.

Some of its games include Let’s Shop, Madrat Antakshari, My Toy Factory, The Great Expedition and Mars Maths. The company competing with the likes of Funskool had a turnover of INR 3 Cr for the last fiscal and had reached a milestone of one lakh sales on September 2013. It has two facilities in Bangalore which ship 20K games a month. The company further plans to expand globally in the Middle East and Europe.

Offline Games Start-up Madrat Secured Funding From Flipkart Founders, Others


The year 2014 has been a remarkable year. A year synonymous with the trend-breaking election it hosted. A coming of age year for a new India. A year when young India entered business in droves and thrived. A year when start-ups and big businesses grew and possibly overshadowed all other interests.We bring you our pick of the deals that seated 2014.

Spotlight

Bharat Electronics and Thales are forming a JV to design, develop, market, supply and support civilian and select defence radars for India and global markets. Bharat Electronics will hold a majority 74% stake in the JV, BEL-Thales Systems Limited, with the residual stake resting with the French Technology firm.

Initially, the company will provide solutions for air surveillance, including Air Traffic Management radars, and select ground-based military radars and later move on to the defence electronics domain. State-run Bharat Electronics is the dominant supplier of radar, communication and electronic warfare equipment to the armed forces in India through its 9 manufacturing units and 2 research units.

Recently, L&T Technology Services had picked up 74% of the equity capital of L&T Thales Technology Services, the Indian subsidiary of Thales, a global technology firm that provides products services for the aerospace, defence, transportation and security markets.

Bharat Electronics, Thales Form JV For Defence Radars

Ratan Tata, Chairman Emeritus of Tata Sons, has picked up a minority stake in the Delhi based online marketplace, Snapdeal.com. The investment size and stake remain undisclosed. The investment follows the strategic tie-up with affordable housing company Tata Value Homes wherein the ecommerce company will sell apartment units from Tata Value Homes projects spread across Bangalore, Chennai, Pune, Mumbai and Ahmedabad.

Jasper Infotech owned Snapdeal, founded in 2010 by Kunal Bahl and Rohit Bansal, started as a group buying site featuring heavily discounted deals on local services, and later pivoted to a marketplace model.

Earlier this year, it raised $100 Mn from a group of five investors - PremjiInvest (through PI Opportunities Fund), Temasek Holdings Advisors India Pvt. Ltd (through Dunearn Investment), BlackRock (through Pan Asia Opportunities Master Fund and Optimum International Fund), Hong Kong based asset management company Myriad (through Myriad Opportunities Master Fund Limited) and hedge fund Tybourne (through Tybourne Equity Master Fund) valuing it at $ 1 Bn.

Ratan Tata Buys Into Snapdeal

In February, the online company had raised about `8,300 Mn in the round led by eBay. It had touched a GMV of $1 Bn and was planning to add 10 new categories over the next few months, as it attempted to touch $2 Bn. It currently offers over 5 million products across 500-plus categories from over 50,000 sellers on its website.

The $3 Bn ecommerce market has been seeing investors pouring in with Flipkart India recently raising a whopping $1 Bn in a round led by Singapore’s GIC. Also, Infosys co-founder Narayan Murthy had ventured into e-commerce through a JV with Amazon through his investment firm Catamaran Ventures.


Spotlight

AdPushup, an A/B testing platform has secured $632K in an angel round through the deal making platform LetsVenture.com. This round of investment was led by Kima Ventures, Paras Chopra (Founder, Wingify/VWO), Amit Ranjan (Co-founder, SlideShare). Other angels who particpated include Jonathan Boutelle, Yahoo principal data engineer Sachin Arora, Avlesh Singh, Sameer Parwani Founder of Coupon Dunia, Zishaan Hayath, Krishna Jha, Ashim Mehra, Ravi Srivastava, Subham Gupta, Vikram Kapur, and Sunil Kalra.

Started last year by Ankit Oberoi and Atul Agarwal, AdPushup is a platform which allows web publishers and bloggers to check which ad can make most of the revenue after creating and testing different ads placements, size and types.

Funded by Accel Partners LetsVenture was launched in 2013 by Shanti Mohan, Sanjay Jha and Manish Singhal with an initial capital of `30 lakhs to start the operations. It is an online curated platform to connect startups and early stage investors to make fund raising easy for startups. Recently, two startups, an online exam preparation site Test Book and software solutions provider to the restaurants, Posist had raised funding from the portal. Also, Flip Class and Delhi-based startup Bluegape had raised `15 Mn through LetsVeture.com.

AdPushup Raises Funds Through LetsVenture.com

The only listed coaching class, MT Educare Limited, is planning to sell its Mangalore pre-university college campus. The company is seeking approval of its shareholders for the sale which is likely to fetch the company `70-75 Cr. The company plans to infuse the proceeds for both organic and inorganic growth.

The company plans to sell and lease the property back.Mahesh Pre-University College (PUC) at Mangalore was inaugurated in February 2013 to provide coaching to students for state engineering and medical entrance examinations. The 75,000 sqft structure has 40 classrooms which can accommodate 3,000 students, 4 laboratories and various staff and discussion rooms. The total capex earmarked inclusive of movable assets would be about `60 Cr and company has already invested `50 Cr.

Established in 1988, MT Educare is an education services provider in School, Science and Commerce streams across Maharashtra and has operations in other states like Tamil Nadu, Karnataka and Gujarat. It also offers coaching for national level examinations like the JEE Advanced and Mains for engineering, NEET for medical, CPT/IPCC/CA Final for commerce, and CAT/CMAT for MBA aspirants.

In 2012, it had sold its Pre-school division to Tree House Education and Accessories Limited. MT Educare has over 200 coaching centres spread across 125+ locations, with a faculty strength of over 1,000. On a consolidated basis, MT Educare’s net profit rose 10.5% to `5.37 Cr on 32.1% growth in net sales to `48.81 Cr in Q3 December 2013 over Q3 December 2012. Recently in this space, Everest Edusys And Solutions Pvt Ltd had raised `5.7 Cr in Series A round from Lok Capital and Chennai Angels; K2 Learning had raised `8 Cr in angel funding to develop tablet labs in 100 colleges.

MT Educare To Sell Mangalore PUC Campus

Mcleod Russel India Acquires Vietnam Tea Factory

BM Khaitan Group’s Mcleod Russel India, the world’s largest black tea producer has forayed into the green tea business by acquiring a tea processing factory in Vietnam. The deal which was executed by the company’s step down subsidiary Phu Ben Tea Company was valued at $820K, the company said in a filing with BSE.

In Phu Ben, the company produces over 4 million kg of black tea at its plantations apart from sourcing from other producers and exports close to 6 mn kg of processed black tea.

McLeod Russel began planting tea in India in 1869 and manages forty-eight tea estates in the Assam Valley and five in the Dooars region of West Bengal, three factories in Vietnam, six estates in Uganda and Gisovu estate in Rwanda. Mcleod produces about 100 million kg of tea a year from these tea estates. The company also has two blending units one each in Dubai (2 tonnes) and Nilpur (40 tonnes). The company had a topline of `486.53 Cr with a PAT of `1283.66 Cr for the Q3 of FY14. Last year, Kolkata-based Goodricke Group was looking to acquire some tea estates in Assam.


Spotlight

Wingify, the startup providing conversion rate optimization (CRO) tool has acquired American startup Concept Feedback which provides website feedback from certified experts in design, usability and strategy. The financial details of the deal were not disclosed.

The acquisition enhances and augments Wingify’s flagship product Visual Website Optimizer (VWO). Post the buy, Concept Feedback will continue to operate independently, however, its offerings will be integrated with Wingify’s VWO.

Concept Feedback founded by Andrew Follett serves the brands enabling them to increase their conversion by providing access to a community of website design and user experience (UX) experts. The 26,000 men strong expert community provides feedback on website design, usability, copy, strategy and a variety of other aspects that affect the conversion rates.

Apart from providing A/B testing solutions, Wingify Software founded by Paras Chopra in 2007 also boasts of its flagship feature – IdeaFactory. IdeaFactory is a curated library having more than 300 testing ideas and case studies for website optimization and conversion tracking. Over 3,700 brands in 75 countries are said to be using Wingify’sSaaS offerings. The clientele name include Rackspace, General Electric, Cleartrip, Microsoft and BharatMatrimony.

Webpage Optimization Startup Wingify Buys US-Based Concept Feedback

Delhi-based Zomato Media, has raised $60 Mn in a fresh round of funding led by Vy Capital and majority shareholder, Info Edge. The round also saw participation from Sequoia Capital India.

The funds were raised giving Zomato a post money valuation of $660 Mn (c.INR 40 Bn). Existing shareholder Info Edge (India) has made an additional investment of an amount of about `1.85 Bn in the shares of Zomato.

Sanjeev Bikhchandani-led Info Edge would be subscribing/purchasing equity shares and convertible preference shares which would maintain its holding in the company at 50.1% on a fully converted and diluted basis. Since inception, Info Edge has invested a total of `3.27 Bn in the company.

The latest round of funding takes the total funds raised by the six-year-old startup to $113 Mn. The funding would be taken to further strengthen its global presence in the existing markets with a large part of it going towards strategic acquisitions and product development.

Zomato founded by Deepinder Goyal and Pankaj Chaddah, began as a menu card aggregator where menu cards were scanned and provided on their website. However today, the company has broadened its offerings to include searching restaurants based on location, dishes and serves as social platform wherein the users share reviews and follow each other’s activities. It is also planning to come up with a payment gateway on its app.

It also offers information like opening hours and services offered including take-away, dine-in, and home delivery. It was recently planning to raise close to $200 Mn targeting a billion dollar valuation.

Zomato Media Raises $60 Mn In Fresh Round Of Funding Led By Vy Capital And Majority Shareholder, Info Edge

PremjiInvest To Buy Stake In Future Lifestyle

PremjiInvest is investing in Future Lifestyle Fashion Limited through PI Opportunities Fund-I by picking up 1.55 Cr equity shares at `80.5 per share, the company said in a BSE announcement. The fashion apparel is also issuing 3.1 Mn shares aggregating to `24.99 Cr and 1.86 Cr CCD’s aggregating to `149 Cr on a preferential basis to Ryka Commercial Ventures Private Limited, promoter group company.

Future Lifestyle Fashions (FLF), the fashion apparel, accessories and associated products arm of Kishore Biyani-owned Future Group, is gearing up to tap overseas markets like the Gulf, Sri Lanka, Japan and the UK with some its brands like Scullers, Clarks, Urban Yoga, to mention a few. It has made investment in companies which owns/manages fashion brands like Turtle, Celio, Clarks, Mother Earth, Tresmode, Mineral, etc. Recently, it acquired 27.5% stake in Resource World Exim Private Limited under the brand Desi Belle in India. In February this year, Myntra Designs Private Limited had raised $50 Mn in a financing round led by Premji Invest, along with new and existing investors. PI has been investing in companies in sectors such as textiles, healthcare, and hospitality.


Spotlight

A social movies platform, FilmySphere has raised $100K from unknown angel investor based in the US for equity which is little over 3% stake. Proceeds from the latest round will be deployed into marketing strategies as well as for grabbing new talent for editorial purpose.

Founded in 2013 by Ganesh HS and Gaurish S Akki, FilmySphere is a platform which allows movie fans to follow their favourite celebrities, movies and discover upcoming talent auditions and jobs across films industry.

It also fills the gap between the aspirants who wants to work in the film industry and production houses who can post jobs and requirement for particular film on the company newly launched platform Talentsphere.

FilmySphere uses the Facebook social graph to identify friends already on the platform and analyse which movies they’re watching, their favourite celebrities and movies, including reviews posted by them.

At initial point, the company focussed on Kannada, Tamil and Telugu films and now till next year, it will head towards the Marathi, Hindi, Bengali and Hollywood industry.

Apart from its online activities which are based in Bangalore, the team also travels to different places to interview celebrities and now it is looking to set up three mini production houses for the same.

It also plans to do a five-day programme where selected new talents will get a mentoring opportunity from feature film actors and directors with a chance to work in their movies.

It is also building customised business pages for the entertainment industry and also offers camera on hire for upcoming talents for their short films. The company claims to have 22,000 pageviews on a monthly basis from India, including the US, the UAE and Indonesia among others.

US-Based Angel Investor Backs FilmySphere

India Inclusive Innovation Fund has been launched by The National Innovation Council and the Ministry of MSME with an initial corpus of `500 Cr to solve the problems of citizens at the base of the economic pyramid in India.

The government will be contributing `100 Cr and the remaining will come from banks, insurance companies and overseas financial & development institutions. Having a life of 9 years, the fund aims to increase its corpus up to `5,000 Cr over the next two years. 50% of the fund will be deployed to enterprises that fall in the MSME stage.

The fund approved by the Union Cabinet will be registered under SEBI’s Alternative Investment Fund Category I guidelines and will invest in innovative ventures that are scalable, sustainable, profitable across sectors like healthcare, food, nutrition, agriculture, education and skill development, energy, financial inclusion, water, sanitation employment generation, etc.

IIIF would also partner the entire ecosystem in this space including incubators, angel groups and also public research and development programmes and laboratories to support the commercialisation and deployment of socially relevant innovative technologies and solutions.

The government would not be involved in the day-to-day operations of the fund, and it would be entrusted to an asset management company. Recently, Unicap Venture Fund, unit of the Delhi-headquartered Unicap Advisory, had launched a MSME focussed fund with a corpus of 200 Cr. Also, Samridhi Fund, created by Department for International Development (DFID) in partnership with SIDBI, had invested `1.9 Cr in Shikhar Dairy.

Government Floats India Inclusive Innovation Fund

Coromandel International Limited is entering into a JV with Yanmar Company Limited (Japan) and Mitsui & Co. (Asia Pacific) Pte. Ltd for manufacturing and marketing of farm mechanisation equipment, the company said in a BSE announcement. The capital contribution in the venture would be Coromandel (40%), Yanmar (40%) and Mitsui (20%) and the estimated capital cost of the project is `40 Cr.

The JV provides for setting up a manufacturing facility for manufacture of rice transplanters and will be engaged in sales and after-sales services of other Yanmar brand machinery as per the agreement between the parties. Initially, the venture will sell imported machinery and is proposed to indigenise certain components over a period of time to decrease the cost of production.Murugappa Group company sells sprayers and drip irrigation equipment through its retail outlet. It has clocked a turnover of `s8560 Cr during FY 2012-13.

Coromandel, Mitsui & Yanmar Enters Into JV For Mechanisation Equipment


Spotlight

Integrated Logistics solutions provider, Apollo Logi Solutions, has picked up a majority stake in Dubai-based Clarion Shipping for over `2,000 Mn. The exact deal size and stake was not ascertained, however, Raaja Kanwar, vice-chairman and managing director at Apollo International, cited the equity valuation of the company to be `4,000 Mn.

The buy provides Apollo access to over 20 countries in Clarion’s kitty taking its total geographical presence to over 100 countries. Founded in 1996 by NRI Aniyan Kutty, Clarion is a global ocean and air freight forwarder and is the owner of the single largest storage facility located at the Jebel Ali Free Zone in Dubai, the UAE. Clarion had clocked revenues of `3,600 Mn with an operating profit of `400 Mn in FY14.

Led by Raaja Kanwar, Apollo Logi Solutions is aiming to be a billion dollar company by 2020 and has earmarked $200 Mn for its inorganic growth. It is expecting to post revenues of $200 Mn with a 10-12% operating profit this fiscal. Operating as a subsidiary of Apollo International Limited, the company is part of the Apollo Tyres Group.

Apollo Logi Solutions Acquires Majority Stake In Dubai's Clarion Shipping

Pathfinder Publishing Private Limited, which owns and runs student community and career counselling platform Careers360, has raised over `60 Mn in its first round of funding from a group of five angel investors led by Manipal Group Chief Ranjan Pai and education firm Career Launcher founder Satya Narayanan R. Venture capitalist Mahesh Murthy (founding partner of SeedFund) also participated in this round.

However, the other two financial investors’ details were not disclosed. Careers360 which identifies with the likes of Shiksha and HTCampus will receive mentoring from new investors who have expertise in areas such as finance, digital media and education. The five-year-old firm plans to use the proceeds to expand its business by hiring talent and enhancing its technology as the company seeks to build an education marketplace (mycareers360), connecting students with the right career-oriented courses.

This would be an independent marketplace which would enable students to evaluate, compare, and purchase products and services on quality, suitability and price.Maheshwari Peri who is also currently the publisher of Outlook Publishing, the group behind Outlook and Outlook Business magazines, even though he left the group in 2008, after 16 years, founded Careers360 in 2009 along with his friend and MD of Netcore Solutions, Rajesh Jain infusing `40 Mn of which INR 36 Mn was his personal investment.

The Delhi-based company which has turned profitable in the first quarter of 2013 was aiming a turnover of `100 Mn. Currently, 76% of its revenue comes from advertisements and the remaining 24 % is sourced through students. Peri, however, is aiming for a 50:50 mix between the two streams. The education market in India will be worth `5.9 Tr in 2014-15 as against `3.33 Tr in the 2011-12 fiscal year, according to India Ratings.

Career Counselling Portal Careers360 Secures Angel Funding

Delhi-based SocialCops, a social analytics & reporting app has raised $350 K (c.`21 Mn) in a seed round from 500 Startups, Rajan Anandan, Manoj Menon and other angels. The funding will be used for further product development and to add more clients to their base.

Founded in 2012 by Varun Banka, Prukalpa Sankar and Harjoben Singh, SocialCops is a smartphone app that allows users to report simple problems in their locality like garbage dumps, pot holes simply by uploading photographs and sharing their location. Its platform is trying to address social issues by collaborating with NGOs and public administration. The web application will show all the feeds regarding complaints from all over the city which can be filtered by complaint type, location, etc.

The administration and NGOs have a separate dashboard where they can track all complaints and review them. Also, users will be able to check the status of their Social Complaints and share any complaint on Facebook and Twitter.

500 Startups is an early-stage seed fund and incubator program investing primarily in consumer and SMB internet start-ups. It has a portfolio of 15 companies in India and is looking to invest in multiple sectors like financial services, payments, software-as-a-service, gaming and education on mobile and web.

SocialCops Secures Seed Funding From 500 Startups, Others

Challenged by attrition at the top deck and a declining share in the market place, Tata Motors, India’s largest automobile company in revenues, saw senior executives exiting from key positions. Rajesh Bagga, senior VP legal at Tata Motors was one among those. At Tata Motors, he was Global Head for Human Resources, Employee Relations, SHE, CSR, Admn and Global General Counsel.

He jumped from Tata Motors to its rival Reliance ADA Group as President and Group General Counsel. At Reliance, he is managing legal issues, reputation and regulatory risk in Group Corporations and developing systems and resources for driving compliance among others.

He specialises in Managing Risk, People Development, Consumer and Marketing Law,

IPR, Indirect Taxation, Industrial Relations and Restructuring.


La teral Moves

As they say, change is the only constant. Sometimes it is necessary to step out of your comfort zone to better your career. Legal Era takes a look at some of the important career moves in the industry this year.

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Challenged by attrition at the top deck and a declining share in the market place, Tata Motors, India’s largest automobile company in revenues, saw senior executives exiting from key positions. Rajesh Bagga, senior VP legal at Tata Motors was one among those. At Tata Motors, he was Global Head for Human Resources, Employee Relations, SHE, CSR, Admn and Global General Counsel.

He jumped from Tata Motors to its rival Reliance ADA Group as President and Group General Counsel. At Reliance, he is managing legal issues, reputation and regulatory risk in Group Corporations and developing systems and resources for driving compliance among others.

He specialises in Managing Risk, People Development, Consumer and Marketing Law,

IPR, Indirect Taxation, Industrial Relations and Restructuring.


Lateral Moves

Tata Senior Executive Rajesh Bagga joins Reliance1

Ernst & Young (EY India) executive director Amit Bhagat joined PricewaterhouseCoopers (PwC) as a partner in the indirect tax practice since September with his team of 12 indirect tax professionals – including two associate directors, a director and managers.

Bhagat said that though each of the “Big Four” (KPMG, EY, PwC and Deloitte) already had indirect tax practices, he would aim to build PwC’s practice at the pan-India level, hire the best talent, increase visibility in the market and offer the highest quality services.

Bhagat started his career as a lawyer in 1998 at litigation firm JB Dadachandji, which he said was a “legendary law firm” at the time. He moved to EY as a senior executive in 2003.

Economic Laws Practice (ELP) has hired Bharti Airtel general counsel Jyoti Pawar to head its telecommunications, media and technology practice (TMT) in Delhi.

Pawar started her career with Mulla & Mulla Craigie Blunt & Caroe in Mumbai in 1992, joining GE Capital India as Vice President, Legal and Compliance in 2000. In 2008, as Senior Vice President, Legal and Compliance at GE Money Financial Services, she joined Bharti Airtel as Director, Legal and Regulatory, India and South Asia.She graduated from GLC Mumbai in 1992 and qualified as an English Solicitor in 2003.

ELP managing partner Rohan Shah, who had been heading the firm’s TMT practice until now, said in a press release that Pawar had “built an outstanding reputation as a legal professional and as a real force in the telecom sector”.

Trilegal counsel Rachika A Sahay has joined global oil and gas services company Weatherford as its sole legal counsel in India.

Sahay had been at Trilegal since graduating from NLIU Bhopal in 2005, followed by a Master’s degree at the London School of Economics in 2007, and specialised in corporate and projects, infrastructure and energy at the firm.

Speaking on the occasion, she said: “It was a very good opportunity and the idea would be to focus on one practice area, and I had been doing some oil and gas matters at Trilegal.”

Amitabh Lal Das, General Counsel, Yahoo India resigned to join Max India Life Insurance. Prior to Yahoo, Das was working with Sapient India and even before that with Kochhar & Co in Delhi. A graduate from Campus Law Centre, Delhi University, he has also worked with senior lawyers from Delhi High Court and the Supreme Court of India. Amitabh will be joining Max Life Insurance as the Director and Head – Legal, Compliance and Regulatory.

E&Y ED joins PwC with a team of 12

ELP hires Bharti Airtel GC Jyoti Pawar to head the TMT practice

Trilegal counsel Rachika Sahay joins oil & gas services giant Weatherford as India legal head

Amitabh Lal Das joins Max Life

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With more than 25 years of corporate experience in top notch companies of the country with primary experiences in M&A, Legal, Tax, Regulatory, Ethics and Compliance etc., Rajinder Sharma, General Counsel, Dupont quit and moved to Samsung Electronics as Deputy General Manager.

He has been an active participant and contributor to various government committees like IMA DDA study on JJ Clusters, BIS committee on setting standards (a legislative process), Ministerial Committee on Tax, Central Excise Grievance Committee, Parliamentary Committee on Food Safety, Legal

Reforms Committee of Indo American Chambers etc. as well.

Rajinder Sharma, GC, Dupont moves to Samsung

La teral Moves


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Sapan Gupta, Standard Chartered Deputy Head of Legal has now moved to Bajaj Finance. He has joined Bajaj Finance as its first Chief Legal Officer. He will be reporting directly to the non-banking financial company’s (NBFC) CEO. Also, he will be responsible for setting up the formal legal function.

Besides this, he will oversee the legal disputes on behalf of the company. When contacted by media, he confirmed his new role. Prior to Standard Chartered in 2008, he was at Sidley Austin in New York, later HSBC India, ICICI Bank, and Tata Housing and Development. His work will encompass finance and corporate as well as overseeing legal disputes.

Verus has hired former Dua Associates and Tatva Legal Manager Siddharth Bhavnani as a partner in Delhi. He joined the office from 1 October, specialising in M&A, joint ventures and real estate.

Bhavnani obtained his undergraduate in law from the University of Leicester in 2006, and then worked at Dua Associates, joined the Dua breakaway Tatva Legal in 2010, and returned to Dua again in 2012. He left Dua in May 2014, taking a short break before joining Verus. Verus was started in 2011 by four NUJS Kolkata alumni who had been working in courts and law firms.

DLA Piper Singapore and India group partner Biswajit Chatterjee, has joined Squire Patton Boggs to co-lead its India practice alongside partner Dharmendra Nair who is based in London. Chatterjee was promoted in 2011 and later formally designated as co-head of the India group. He holds several years of India-based experience of having worked with P&A Law Offices.

Amarchand Mangaldas partner Abhimanyu Bhattacharya, who resigned in July, has now joined Khaitan & Co as expected. Although Amarchand Mumbai partner Vandana Shroff said in July that Bhattacharya would be required to serve six months of garden leave, it is understood that the period has been reduced to around four months by mutual agreement between the firms.

StanChart legal deputy Sapan Gupta joins Bajaj Finance as 1st CLO

Siddharth Bhavnani joins Verus as Delhi Partner

Biswajit Chatterjee joins Squire Patton Boggs to co-head its India practice

Abhimanyu Bhattacharya joins Khaitan

Naveen Raju, a 1996 batch student of the National Law School of India, succeeded Nirmala Gill at Mahindra & Mahindra. Naveen graduated from the National Law School, Bangalore in 1996. He started his career at ACC from where he moved to Crompton Greaves for a short stint and then to Reliance Industries Limited. At RIL, Naveen was Head Legal of its oil and gas business for the past 14 years. He lead the team that supported many large transactions including RIL’s multibillion dollar project for development of the KGD6 block, its Shale Gas investments in the US and sale of stake in its domestic business to BP. At Mahindra, Naveen takes charge as General Counsel & Sr. Vice President - Group Legal Services and is based out of the Worli office.

Naveen Raju replaces Nirmala Gill at Mahindra & Mahindra

Madhurima Mukherjee, who had left Luthra & Luthra a year ago, has joined AZB & Partners in Delhi as a capital markets partner, according to reliable sources. Mukherjee has been active in the Increasing Diversity by Increasing Access (IDIA) scheme during her sabbatical. She was not reachable for comment at the time of going to press. Mukherjee’s husband Gautam Saha is a partner in AZB Delhi’s corporate team.

AZB Delhi ropes in ex-Luthra Madhu Mukherjee as cap markets partner

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Mi lestones


Latest Verdicts from the apex coUrt

Centre to furnish names of illegal oCCupants of government bungalows

harassment of women in the 21st Century inConCeivable: sC

Saturday, 8th November, 2014

Saturday, 8th November, 2014

A Supreme Court bench headed by Chief Justice H. L. Dattu asked the government to furnish details of Type 6, 7 and 8 accommodations before the winter session of Parliament, which is likely to begin on November 24. The court directed the Centre to furnish the names of persons occupying the top three categories of government accommodation in Delhi. Besides other details of the bungalows, the apex court also asked the Centre to share details of those who are staying on an unauthorised basis.

However, the Centre in its affidavit, submitted that many of the former Ministers and MPs who were reportedly living without authorisation have vacated their premises. It said that former ministers Pawan Kumar Bansal, A Raja, Dayanidhi Maran, S M Krishna, Mukul Wasnik, C. P. Joshi and Mukul Roy have vacated the premises recently.

Senior advocate Meenakshi Arora, who is assisting the court as amicus curiae, told the bench that illegal occupants are capable of affording private accommodation.

The apex court had on July 18 issued notice to the Centre on illegal occupation of government accommodation which was brought to its notice by former CAG Vinod Rai. The unauthorised occupation of government accommodation is in violation of the apex court verdict delivered in July in which it had allowed authorities to use reasonable force for their eviction. It had also set up a timeframe of two months-- for the people concerned to vacate the official accommodation after the end of their entitlement period.

“If as per the Estate officer, the occupant’s case is not genuine, not more than 15 days’ time should be granted and thereafter reasonable force as per Section(5)(@) of the Act may be used,” the court had said. “It is unfortunate that the employees, officers, representatives of people and other high dignitaries continue to stay in the residential accommodation provided by the Government of India though they are no longer entitled to such accommodation,” it had said.

The Supreme Court struck down two provisions of the Cine Costume and Make-up Artist Association’s by-laws saying, “It is violative of constitutional norms.” This decision finally bore fruits to a decade-old fight of the make-up artist Charu Khurana to eliminate the gender bias in Bollywood. The memorable TV commercials Onida TV’s advertisement – ‘Neighbour’s Envy, Owner’s Pride’ – with the tailed-devil was Khurana’s work.

Expressing shock over the attitude of the artists’ association, which was registered under the trade union law, a bench headed by Justice Dipak Misra said the provisions infringe upon the rights of an individual to excel in the field.

“Harassment of women in the 21st century is inconceivable, unacceptable and untenable,” the court said while finding “no rationality” in the provision.

Till date, the Association’s rule prohibited a woman from taking up the job of a make-up artist in the film industry, however, it allowed her to become a hair dresser.

Accepting the Centre’s submission that “the attitude of the association is audacious and it also lent a deaf ear towards the issue,” the court said such restriction in fact hampers the interests of qualified persons in the industry and directed the Cine Costume and Make-up Artists’ Association (Mumbai) to delete the provisions within 10 days.

As per the by-laws of all these unions and federations, make-up artists, hair dressers, etc, are required to register themselves with their respective union like the Cine Costume and Make-up Artist and Hair Dresser Association (CCMAA).

Only a member of these associations is allowed to work as a make-up artist in the production unit in the cine industry. These federations and affiliated unions ensure that no non-member works in the production unit.

Milestones


A bench of Justices J. Chelameswar and S. A. Bobde shared its concern over the CAG’s findings that Indian artefacts have reached foreign auction houses like Sotheby’s and Christie’s and said that it will later decide the scope of probe. It was initially suggested that Calcutta High Court may monitor the probe into the affairs of Indian Museum Kolkata. The court was hearing a habeas corpus petition filed by a relative of whistleblower Sunil Kumar Upadhaya, a preservation officer of Indian Museum Kolkata, who is missing. The court had earlier sought response from the West Bengal government on the plea filed through lawyer Anirudh Sharma.

When the senior advocate Dushyant Dave informed the apex court bench that the CAG report has referred to similar discrepancies in all museums in the country, the bench said that it will later deal with the scope of probe. “There are serious complaints against the museum. We will later decide what shall be the scope of investigation,” it said. “Centre should be concerned. As a citizen of this country our artefacts are found in other countries. We share this concern in the petition,” the bench said.

sC expresses ConCern over indian artefaCts reaChing abroadSaturday, 8th November, 2014

The Supreme Court refused to pass an order restraining doctors to go on strike but hoped that they would not resort to such action which can jeopardise patients’ lives. “Being god’s agent, they should not go on strike. We can express our desire. Beyond that, positive directions cannot be issued particularly when we know it would be difficult to implement our order,” a bench headed by Chief Justice H. L. Dattu said.

Agreeing with the petitioner, NGO “People for Better Treatment”, the bench said that it cannot pass direction to restrain doctors from going on strike. “This is a PIL. Relief sought is commendable but difficult to grant. Therefore, we express our desire that doctors are saviours of life, they should not resort to illegal strikes,” it said.

The petitioner pleaded that doctors have no ethical, moral or legal right to deny treatment to ailing citizens by going on strike. The NGO submitted that while peaceful strike is a basic right in a democratic society for employees in most professions, people involved with work pertaining to vital public services cannot go on strike by holding the entire society to ransom.

The Centre after being reprimanded for taking a stand not to reveal foreign bank account holders’ names, submitted before the Supreme Court a list of 627 names of Indians having their accounts in foreign banks. Appearing for the Centre, Attorney General (AG) Mukul Rohatgi said all these accounts were held in HSBC Bank, Geneva and other banks.

The government placed three sealed envelopes - one about the communication between Indian authorities and other

doCtors shouldn't strike, but Can't restrain them

Centre gives 627 names to sC in blaCk money Case

countries on black money, second the list of names and third the status report about investigations. Referring to the second envelope, Rohatgi said it contained all the names in which more than 50 per cent people were NRIs and some were of Indian origin who had accounts in overseas banks.

Amid the Supreme Court orders, the CPI (M) criticised both UPA and NDA governments and said the court had expressed doubt about the government’s sincerity. “The Modi government’s commitment to unearth black money and take firm action against those who had illegally stashed away money abroad had come under serious question. The BJP’s stand on this issue during the election campaign had proved to be hollow rhetoric. Just as the UPA government, the Modi government too had been unwilling to come out with the information which the government had received about those holding foreign bank accounts,” a statement said. “The deadline for investigation and assessment of these accounts under the Income Tax Act is March 2015”, said Rohatgi.

Wednesday, 12th November, 2014

Tuesday, 4th November, 2014

DISCLAIMER: It may be noted that the Legal Era edition publishes select news pieces collated from various sources, based not necessarily on their timeliness and topicality but their interest to readers.

Zoom In


The Depository ReceiptsScheme, 2014

A close look at

The Ministry of Finance (“MoF”), on October 21, 2014, notified the Depository Receipts Scheme, 2014, (“Scheme”), amending and repealing the lssue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993 (“Erstwhile Scheme”), to the extent applicable to the issuance of depository receipts. The Scheme was implemented, pursuant to the recommendations of the committee to Review the FCCBs and Ordinary Shares (Mechanism) Scheme, 1993 (“Committee”), with a view to increase participation by Indian companies in overseas financial markets and to facilitate raising of capital from global investors.

Since its introduction, the Erstwhile Scheme has been amended numerous times, which at times led to anomalies, leading to confusion among market participants. For example, pricing norms which were relaxed in November 2008, created an arbitrage opportunity to structure deals, due to relevant date being linked to the board decision to issue such securities. There have also been many changes in the legal and regulatory environment in recent years, for example the notification of several sections of the Companies Act, 2013 (“Companies Act”) and partial repeal of the Companies Act, 1956 (“Erstwhile Companies Act”). The Erstwhile Companies Act did not define the term ‘global depository receipts’, which has now been defined under the Companies Act and a framework thereof has been provided under the Companies (Issue of Global Depository Receipt) Rules, 2014.

ImplementationThe Scheme, governing the issue depository receipts, shall come into force from December 15, 2014 and will be implemented by notifications or circulars to be issued by the Reserve Bank of India (“RBI”), the Securities and Exchange Board of India (“SEBI”), the Ministry of Corporate Affairs (“MCA”) and the MoF.

Classification Of Depository ReceiptsDepository Receipts are generally classified as under:

Sponsored

A sponsored issue of depository receipts is based on a formal agreement, between the foreign depository and the issuer of securities for the creation of the depository receipts. The sponsored depository receipts can be further classified as:

Zoom In


The Scheme, in order to safeguard the interests of

domestic investors, attempts to implement

control over fluctuations in price at which fresh

securities are issued, against which potential

depository receipts are to be issued

Madhur KohliPrincipal Associate

Ragini AiyerSenior Associate

Aayush MohataAssociate

Khaitan & Co.

Khaitan & Co.

Khaitan & Co.

Capital Raising: The Indian issuer deposits the freshly issued securities with the domestic custodian. On the basis of such deposit, the foreign depository then creates/issues depository receipts abroad for sale to global investors. This constitutes a capital raising exercise, as the proceeds of the sale of depository receipts eventually go to the Indian issuer.

Non-Capital Raising: In a non-capital raising issue, no fresh underlying securities are issued. Rather, the issuer gets holders of its existing securities to deposit these securities with a domestic custodian, so that depository receipts can be issued abroad by the foreign depository. This is not a capital raising exercise for the Indian issuer, as the proceeds from the sale of the depository receipts go to the holders of underlying securities.


Zoom In

Management Act, 1999 (“FEMA”), including the sectoral caps and pricing.

Further, the Scheme lays down the following restrictions, to be adhered to, pursuant to the issue of depository receipts:

a. The aggregate of the permissible securities issued or transferred to a foreign depository along with the permissible securities already held by persons residing out of India, may not be in excess of the limit of foreign holding as prescribed under FEMA.

b. The conversion from depository receipts to permissible securities and vice versa shall be subject to the limits laid down under the FEMA.

Pricing Of Permissible SecuritiesThe underlying securities issued to the foreign depository for the purpose of issuing depository receipts may not be issued at a price lesser than the price at which such underlying securities may be offered to domestic investors, as per the applicable laws. Any preferential allotment to the foreign depository for the above mentioned must necessarily be in compliance, with pricing laid down under the SEBI (Issue of Capital and Disclosure) Regulations, 2009 (“SEBI ICDR”).

With regards to ‘pricing’, the Committee in its Report recommended to the MoF that permissible securities should not be issued to a foreign depository, in order to issue depository receipts, at a lesser price than that which applies to a parallel means of issue of such securities to domestic investors under the SEBI ICDR. It was deemed that the floor price norm that governs unlisted companies and deals with calculation of the floor price on the basis of discounted cash flows was unfeasible and therefore it was recommended that the RBI should assess and consider modification of the same. The Erstwhile Scheme mandated that the provisions of the Foreign Exchange Management Act, 1999 would govern the pricing in case of unlisted companies. For unlisted companies, a SEBI registered Category-I Merchant Banker or a Chartered Accountant is required to conduct fair valuation of shares, as per the ‘discounted free cash flow method’. The Committee was of the opinion that such method may be misused to undermine the aim of the valuation itself and therefore, the RBI should contemplate amending the provision. Moreover, the Committee recommended that no enactment should mandate a particular pricing norm.

Rights Of The Depository Receipts HolderThe Scheme grants certain rights which are transferable pursuant to the transfer of underlying permissible securities on the back of which the depository receipts to the foreign depository is issued.

a. The Foreign Depository shall be entitled to voting rights, whether arising out of voting instructions or otherwise

b. The shares of a company which form, the underlying security for the issue of depository receipts shall

UnsponsoredWhere there is no formal agreement between the foreign depository and the Indian issuer, any person, without any involvement of the issuer, may deposit the securities with a domestic custodian in India. A foreign depository then issues depository receipts abroad on the back of such deposited underlying securities. The proceeds from the sale of such depository receipts go to the holders of the underlying securities. Based on whether a depository receipt is traded in an organised market or in the Over the Counter (“OTC”) market, the depository receipts can be classified as listed or unlisted.

Listed: Listed depository receipts are traded on formal exchanges.

Unlisted: The unlisted depository receipts are those which are inter-traded between parties and where such depository receipts are not listed on any formal exchanges.

EligibilityUnder the Erstwhile Scheme, a listed company can issue shares for issue of depository receipts in any jurisdiction and an unlisted company can do so in either a jurisdiction which is a member of the Financial Action Task Force on Money Laundering (“FATF”) and the securities market regulator of the jurisdiction, is a member of the International Organisation of Securities Commissions (“IOSCO”). The Scheme, however, provides for permissible jurisdictions where the depository receipts may be issued.

The Scheme envisages the following entities to be eligible to issue or transfer permissible securities to a foreign depository:

a. any Indian company, whether private or public in nature and whether unlisted or listed on a recognised stock exchange;

b. any Issuer of permissible securities; and

c. any person holding permissible securities.

The Scheme also allows for unsponsored depository receipts on the basis of underlying permissible securities only in cases where such securities are listed on an international stock exchange and where voting rights are permitted to the holder of such securities.

Modes Of IssueUnder the Scheme, the depository receipts issued on the basis of underlying equity shares may be made either through the mode of a public offering, a preferential allotment or a qualified institutional placement (“QIP”). The present QIP regulatory framework does not include Foreign Depository within the definition of a QIB, thereby disallowing any such issuance.

LimitationsThese issuances are subject to adherence to the foreign investment regime under the Foreign Exchange


Zoom In

Disclaimer – The views expressed in this article are the personal views of the authors and are purely informative in nature.

market for the underlying Indian securities. In other words, any market abuse affecting the Indian market using the depository receipts overseas will undoubtedly impact the Indian securities market and therefore, the Scheme asserts that any market abuse of the Indian securities market, only because it may be associated with depository receipts in the foreign jurisdiction, would not oust the jurisdiction of the SEBI Act, 1992. A mechanism using depository receipts to influence price and conduct sham securities transactions in India would violate section 12A in Chapter VA of the SEBI Act, 1992. The Scheme therefore deems that SEBI, being the regulator of the market for securities, is the appropriate authority to inquire into market abuse related to cross-border transactions dealing with depository receipts on the back of securities, as contemplated under the Securities Contracts (Regulation) Act, 1956.

be considered as part of the public shareholding of that particular company as is provided for, under the Securities Contract (Regulation) Rules, 1957, if:

i. the holder of such depository receipts has the right to issue voting instructions and

ii. the said depository receipts are listed on an international stock exchange.

Further, the holder of depository receipts shall have the same obligations as if it was the holder of underlying equity shares.

Obligations Under The SchemeThe Scheme, in furtherance to its objective, lays down certain obligations on the ‘domestic custodian’ of depository receipts, namely:

a. Compliance with related provisions of the Scheme with regard to issuance and cancellation of the depository receipts is to be ensured.

b. For the purpose of monitoring foreign investment limits under FEMA, to record and report to the Indian depositories, all transactions with regard to issuance and cancellation of depository receipts.

c. To provide information and data to regulatory authorities, such as the RBI, SEBI, MCA, MoF, etc., as and when required.

d. To file with SEBI, the document, which sets the terms of issue of depository receipts, issued on the back of securities, as defined under Section 2 (h) of the Securities Contract (Regulation) Act, 1956.

The Scheme further provides for Indian depositories to coordinate amongst themselves, with regard to information about the limit up to which securities may be converted into depository receipts and the outstanding securities against which depository receipts are outstanding.

Market AbuseIn an unprecedented move, the Scheme, intending to put in place safeguards, against any market manipulation or abuse, distinctly defines market abuse to be, any use, intended or otherwise, of the depository receipts, in a manner which may have the potential to cause or have caused, abuse of the Indian securities market. Further, to clarify, all the activities prohibited under Chapter VA of the Securities and Exchange Board of India Act, 1992 are brought within the definition of ‘market abuse’, under the Scheme.

The Committee in its report to the MoF noted that due to their exchangeability, the market for depository receipts in a foreign jurisdiction is directly connected with the domestic

The Scheme has synchronised the depository receipts issuance with the Companies Act and the Companies (Issue of Global Depository Receipts) Rules, 2014.It provides for sufficient safeguards while easing the process, for domestic entities, to utilise this route as a mode to raise capital, from foreign capital markets. The Scheme also intends to bring the foreign depository and domestic custodian within the regulated framework, which is a welcome change.

The significant reduction in the use of this mechanism, in recent times, prompted a need for clarity and relaxation for Indian entities to utilise the Indian equity instruments and get global market access by way of conversion. This Scheme, effectively attempts to provide for the same.

The Scheme, in order to safeguard the interests of domestic investors, attempts to implement control over the fluctuations in price at which fresh securities are issued, against which potential depository receipts are to be issued. If this is not ensured, depository receipts issued to a foreign investor against securities may be at reduced price than the corresponding issue price for the underlying securities issued to investors. The pricing is therefore being brought in line with the domestic regime and compliance with the SEBI ICDR is mandated.

The Scheme seeks to simplify and modernise the procedure and mechanism, used for the issuance of the depository receipts by Indian entities and it is to be seen if the notifications or circulars for implementation of the Scheme by RBI, SEBI, MCA and MoF complements the Scheme by laying clear regulations for implementation of the depository receipt framework.

Conclusion

Outlook


Coming as they do at a time when MNCs have been complaining about arm-twisting tactics employed by Indian tax authorities to squeeze more tax revenue out of them, the two verdicts may well be the beginning of the end of India’s days of tax terrorism

-By Fatima Ansari

Outlo ok


After Vodafone, Shell Escapes From The Jaws Of

Income Tax

The IT Department had added `15,000 crore and `3,000 crore, to the taxable income of Shell India Markets Pvt Ltd, the Indian subsidiary of Royal Dutch Shell Plc, for FY 2007-08 and FY 2008-09 respectively, in two transfer pricing cases. A Bombay High Court bench of justices M S Sanklecha and S C Gupte on a petition filed by Shell India Markets Pvt Ltd quashed the IT department’s `18,000-crore transfer pricing orders. Shell India Markets Pvt Ltd was represented by BMR Legal managing partner Mukesh Butani who instructed senior counsel Percy Pardiwala.

Here is a quick and easy gist of this pathbreaking tax development.

What got the ball rolling?: Shell India Markets Pvt Ltd issued 8.7 crore shares to its overseas parent company Shell Gas BV in March 2009. The shares were issued at 10 a share.

What riled the Taxman?: As per the IT Department, these new shares were issued to the parent company at an unduly cheap price. They fixed the value of a share at `183 and concluded that this violated ‘transfer pricing norms.’

Transfer Pricing?: ‘Transfer pricing norms’ require that all parent-subsidiary dealings should take place at a fair price.Transactions between group companies based in different countries should apply an arm’s length pricing. This is to ensure that a fair price - one that would have been charged to an unrelated party - is levied.

The problem?: As tax authorities felt that the fair price of one share should be `183 and not the paltry `10 at which they were issued by Shell India Markets Pvt Ltd to Shell Gas BV, Shell India was charged of under-pricing this share transfer that took place within the group by `15,220 crore. To add to this, earlier this year, the tax authorities had issued a show-cause notice adding another `3,100 crore to Shell India’s income for FY09 in another transfer pricing case, taking the total taxable income to about `18,000 crore.

What Shell has to say?: Beleaguered Shell India moved the Bombay High Court challenging these taxes. It argued that,

funding a subsidiary by issuing shares is a common practice among multi-national companies which view this as a capital transaction and out of the transfer pricing bracket. The parent company Shell Gas BV had invested $160 million in Shell India via this capital transaction to fund capital expenditure and losses incurred by the downstream business in India. The shares were issued against this capital transaction at a face value of `10 per share as prescribed by Reserve Bank of India guidelines. The IT department’s transfer pricing order of January 2013 disregarded the RBI guidelines and had re-valued it on “arbitrary assumptions’’, prompting a potential tax liability.

What the Taxman said?: The tax department argued that such a deal is a transfer pricing arrangement by which the shares issued were undervalued and hence the company is liable to pay tax on the income generated out of it.

The Court’s verdict: Issue of shares does not give rise to income and, hence, shares issued by an Indian firm to its overseas parent company are not taxable under transfer pricing provisions. On the reasoning that as there is no ‘income’ to tax, there can be no income tax demand, the Bombay High Court quashed the IT department’s tax demands against Shell India.

Significance: This is the second such case in a month’s time (earlier being the Vodafone tax victory for a similar issuance of shares to its parent company, also in the Bombay HC) in which the tax authorities have been defeated. Multinational companies have been complaining that Indian tax authorities are arm-twisting them to derive more tax revenue. Shell’s victory, together with the Vodafone verdict, may help signal to foreign investors that India’s days of “tax terrorism are now over, that is if the Central Board of Direct Taxes refrains from filing an appeal.

Disclaimer – Statements and opinions expressed in this article are those from the editorial and are well researched from various sources. The content in the article is purely informative.

“In a Taxing Act, one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about tax. There is no presumption as to tax. Nothing is to be read in, nothing is to be implied.

One can only look fairly at the language employed.” - Rowlatt J.


Securities Fraud

as an Investigator and Enforcer

in India:SEBI SEBI has within itself

facets of the executive, legislature and

judiciary. The article traces important cases tackled by the SEBI in

the last quarter of a century and attempts

to answer the question whether the Bureau has

been able to make full use of the wide-ranging

powers vested in it

Le t’s Uphold


Shantanu Mitra Counsel

Phoenix Legal

Let’s Upho ld

SEBI, per se, is one of the most empowered regulatory authorities. It has within itself facets of the trias politica as espoused by Baron de Montesquieu: the executive, the legislature and the judiciary. In its executive role, SEBI regulates a host of market intermediaries, conducts investigations of fraudulent and manipulative activities and monitors and conducts surveillance of the market systems. In its role as a legislative entity, SEBI frames rules, regulations, guidelines and circulars to govern and regulate the Indian securities markets. The quasi-judicial arm is responsible for passing of various types of orders against market participants in the Indian markets. The orders that SEBI is empowered to pass range from debarment from accessing the securities markets, disgorgement of ill-gotten gains, huge monetary penalties, cancellation of registration of market intermediaries, cease and desist orders and so on.

The natural question that arises is whether SEBI has been able to use and implement these wide ranging powers that it has been vested with in an effective manner? Has SEBI had a deterring effect on market manipulators or have market manipulators always been a step ahead of SEBI in this eternal game of cat and mouse?

The Harshad Mehta Saga To reach a definitive answer to this question, one has to examine some of the serious market manipulations which have been investigated by SEBI in the last 25 years. The SEBI Act was notified in January 1992 and in April, it was faced with the Harshad Mehta Scam. Harshad Mehta, a stock broker at BSE, along with his associates, was accused of manipulating the BSE Sensex. Though broadly the Harshad Mehta scam was a banking fraud, (as loopholes in the banking system were exploited and huge funds were drained off from inter-bank transactions), the money which the banks were defrauded of was ploughed back into the stock exchanges resulting in a phenomenal rise in the BSE Sensex. When the fraud was discovered, almost by accident, the tables turned on Harshad Mehta and the banks started demanding the monies from him. This resulted in the


Le t’s Uphold

and the banks with exposure to these securities were the worst hit. Incidentally, just a day earlier, the Sensex had risen by 177 points. SEBI initiated action against Ketan Parekh and ultimately after investigations and enforcement proceedings, debarred Ketan Parekh from accessing the securities markets till 2017. Understanding the severity of the scam, SEBI introduced measures which were to change the face of the Indian securities markets forever. The settlement cycle was reduced and the present T+2 cycle was introduced, stock exchanges were demutualised, Badla trading was banned, and exchange traded derivatives were introduced, to name a few.

The IPO TaleThe Ketan Parekh fiasco did change the face of the Indian securities markets. But it did not stop fraudsters and scamsters from coming out with innovative and manipulative schemes. The IPO irregularities scam is another case in point. The stock exchanges noticed severe irregularities in the Yes Bank IPO which hinted at the possibility of large scale off-market transactions immediately following the date of allotment and prior to the listing of shares on the stock exchanges. SEBI regulations prescribed a quota for “small investors” wishing to invest in the market. Typically, over-subscription in the retail segment of an IPO is substantially less than over-subscription in the non-retail segment for sought-after IPOs. Certain entities had cornered IPO shares reserved for retail applicants by making applications in the retail category through the medium of thousands of fictitious / benami applicants, with each application being for small value so as to be eligible for allotment under the retail category. Subsequent to the receipt of IPO allotment, these fictitious / benami allottees had transferred shares to

popping of the bubble and the Sensex, which had risen so dramatically, fell by almost 570 points, sending jitters through the system. Investigative agencies sprang into action and Harshad Mehta and his gang of operatives were charged with several criminal violations. Investigations and enforcement action followed but Harshad Mehta was out of jail on bail after some 100-odd days in custody. He subsequently set up a maze of companies which functioned as the Damayanti Group. He again managed to fuel investor imagination through one of India’s first tip dispensing website. Also, it was alleged that he managed to get hand in glove with several reputable Indian corporates and build up another bubble. Unfortunately for Harshad Mehta, this time around too, the bubble burst and the SEBI investigation that followed resulted in him being debarred for life from accessing the Indian securities markets. Sadly, the famed “Big Bull” and the “Pied Piper” of the Indian securities markets perished while in jail on the last day of 2001, after living for 9 years with the #hashtag of a scamster!

It may be argued that the Harshad Mehta scam came as a blessing in disguise as the Indian authorities took note of the serious systemic lapses which triggered the entire scam. It took a genius to exploit the loophole and Harshad Mehta perhaps conducted his operations with the flair of the master conductor of an orchestra. SEBI took note of the developments and formulated several rules and regulations to ensure that the Indian securities markets were properly regulated and monitored. The year 1992 witnessed the introduction of regulations prohibiting insider trading, regulating brokers and for merchant bankers. The years that followed saw the framing of regulations governing intermediaries to a large extent and coupled with the powers guaranteed by the SEBI Act, SEBI started grandfathering a modern, secure and regulated securities market. However, this was not to be and became apparent when the Ketan Parekh scam again shook the very foundations of the Indian securities markets.

The Ketan Parekh JoltKetan Parekh is reputed to have had Harshad Mehta as a mentor in his formative years. In 1999-2000 when Indian technology scrips were showing an upward trend, Ketan Parekh was instrumental in driving up plain vanilla technology scrips to record highs through fictitious, circular and synchronised transactions to name a few. He associated with several other stock brokers across exchanges, secured large loans from several commercial banks as well as co-operative banks, and invested heavily in his favoured basket of stocks, famously called the K-10 scrips. Allegedly, Ketan Parekh obtained loans from Global Trust Bank to the tune of approximately `250 crores and from Madhavpura Mercantile Co-operative Bank to the tune of `1000 crores. However, the alleged bear cartel comprising entities like the Nirmal Bang group, the Anand Rathi group and the Shankar Sharma group placed huge sell orders on the K-10 scrips and the Sensex crashed by 176 points. Investigations revealed that Ketan Parekh had secured the loans from various banks using inflated K-10s scrips as collateral

It must be highlighted that justice delayed is justice denied and as such, it is the duty of the

SEBI to ensure that it is in a position to complete its investigations at the earliest. There are certain steps which SEBI may resort to in ensuring that its investigations process is streamlined further. SEBI must resort to maximum use of technology in identifying fraudulent activities in the market as well as the manipulative and

fraudulent trades.


Let’s Upho ld

their principals who in turn transferred the shares to the financiers, directly or through a web of transactions that had originally made available the funds for executing the game-plan. The financiers in turn sold most of these shares on the first day of listing thereby realising the windfall gain of the price difference between IPO allotment price and the listing price. SEBI investigations also found out that the photographs attached to the benami / fictitious applications were downloaded from popular matrimonial websites. Subsequently, all IPOs which had hit the markets between 2003 and 2005 were taken up for investigations by SEBI and similar modus operandi was discovered. Proceedings were initiated against the key operators and the financiers, and inter alia, they were debarred from participating in the securities markets and called upon to disgorge ill-gotten gains. Incidentally, the role of market intermediaries was called into focus and their role was examined in detail. SEBI had prescribed Know Your Client (KYC) norms which each market intermediary was to adhere to. The entire scheme for cornering the retail portion of IPOs could not have succeeded but for the active role played by Depositories and Depository Participants facilitating the opening of numerous demat accounts in fictitious / benami names which accounts were subsequently used for making applications in various IPOs, receiving allotment and thereafter pooling the same in the demat accounts of the key operators through off-market transfers prior to or immediately after the listing and commencement of trading on the stock exchanges.This resulted in the rescinding of the then prevailing SEBI (Disclosure and Investor Protection) Guidelines, 2000 and the notification of the SEBI (Issue of Capital and Disclosure Requirement) Regulations, 2009, through which the processes of raising funds from the public was codified and given the force of law.

The Sahara SchemeThe law enforcement mechanisms of SEBI were once again put to the test in the landmark case against the Sahara companies and Subroto Roy Sahara himself. Two Sahara group companies which were privately held had taken advantage of a loophole in the Indian legal system and issued instruments to more than 50 people disregarding the fact that issue made to more than 50 people will be considered as a public issue, an activity which a private company is not permitted to indulge in. Investigations were initiated and Sahara famously claimed that since the issuing companies were private limited companies, they fell within the regulatory purview of the Registrar of Companies and were not restricted by the norms governing issues to the public, which fell within SEBI’s regulatory purview. Though SEBI had passed several orders, interim and final, Sahara moved from pillar to post, indulged in forum hopping, appealed to several High Courts, the Securities Appellate Tribunal and the Supreme Court. Subsequently, the Supreme Court took a stern view of the matter, as a consequence of which, Sahara Shree found himself behind bars. The Sahara matter, especially the way SEBI proactively and decisively took on the challenge, is laudable.

The Ponzi EmergesThe Sahara matter assumes even greater significance in the light of the outbreak of several Ponzi scheme frauds in India’s eastern states. Several companies had mushroomed and were raising monies in a similar fashion from the public at large and seeking shelter under the general defence that they had been raised by Sahara. Schemes were being floated by these companies akin to collective investment schemes but they were not submitting to the regulatory purview of SEBI by registering under the Collective Investment Scheme Regulations. The severity of this issue was highlighted with the collapse of the Sharda Group in West Bengal and the seriousness, severity and intensity of the possible implications are mind-boggling. SEBI is currently investigating the matter and hopefully the investigations will be concluded soon.

Investigations BeginThe various scams when they break always cast a shadow of doubt on the competency of SEBI to regulate the markets effectively. One of the instances which is highlighted not only by the media but also by the Securities Appellate Tribunal is the time taken by SEBI to complete its investigations in the matters and pass final orders. SEBI had taken years and years to complete its investigations into the scams perpetrated by Harshad Mehta, Ketan Parekh and associated entities, the IPO irregularities matter, the Sahara irregularities as well as the ongoing Ponzi scheme investigations. Comparisons were drawn with similar regulators like the Securities Exchange Commission of the US and the Financial Services Authority of the UK to demonstrate the speed with which their investigation and enforcement actions were concluded. Thus, we need to briefly examine in broad strokes the process and procedure followed by SEBI in conducting its investigations and enforcement actions.

A fraudulent and manipulative activity is brought to SEBI’s notice through various channels. The fraudulent and manipulative activity may be detected by the surveillance mechanisms at SEBI, BSE, NSE or any of the exchanges, brought to the notice of SEBI by any entity or intermediary, by way of a simple investor complaint, sharing of information by other authorities or agencies, direction from any authority, to name a few. On receipt of this information, investigations are initiated and information is requested from the various identified entities. If the entities from which SEBI has sought information do not co-operate, SEBI issues summons to demand the same after converting the preliminary examination into a formal investigation. Data from the exchanges, market intermediaries and other associated bodies are obtained. The trade logs and order logs are examined to identify the trades which may be fraudulent or manipulative trades. Once the trades are identified, the role of the participants and the intermediaries is looked into. The identified entities are then examined under oath and in person, firstly by requesting cooperation or otherwise by issuing summons. The entire data generated is analysed


Le t’s Uphold

(DWBIS) which are essentially infrastructure and processes for data acquisition and collection, alert generation and tracking, and research and regulatory analysis. The DWBIS is reported to be a data integration solution using SAS data warehousing and analytics technologies for fraud investigation. The system is also said to be primed to monitor and spot market malpractices, market manipulation patterns and also monitor circular trading, pump and dump scenarios, insider trading and front running practices. It is highly recommended that SEBI proactively deploys these fairly advanced systems to actively curb securities fraud and bring order to the Indian securities markets.

The enforcement proceedings initiated by SEBI after completion of the investigations also suffers from a serious flaw which needs to be addressed at the earliest. SEBI has the power to initiate adjudication proceedings against market participants, inquiry proceedings against SEBI registered intermediaries and proceedings under Section 11 of the SEBI Act. During the pendency of the proceedings, for various reasons, the officer conducting these proceedings is replaced and new officers appointed, mostly because the officer previously presiding on the proceedings has been transferred to another department. This creates a huge problem as the new officer appointed to conduct the proceedings reexamines the issue and often grants an opportunity of personal hearing to the entity. Thus, the vicious cycle of delays is again repeated. This not only severely impacts the aggrieved party, it also portrays SEBI in a dubious light to market participants. SEBI may explore ways and means to ensure that the officer presiding over a proceeding, except for retirement or resignation, must conclude those proceedings before he is transferred to another department.

The Jury Is OutThere are so many other prominent investigations and enforcement proceedings which have been conducted by SEBI over the last 25 years which deserves mention like the Pyramid Saimira episode, the Satyam investigations, Parsoli Corporation, the DLF matter. Irrespective of the efforts undertaken by SEBI to fulfil its mandate to protect the interests of the investors, to promote the development of and regulate the securities markets, questions abound whether the Indian markets will be plagued with similar scams in the future? Whether the measures against Ketan Parekh were enough to ensure that he was kept out of the markets? Whether the investments of small investors are really safe from fraudulent and manipulative activities? Only time will tell.

and linkages are established between the various actors to the fraud. Data is also obtained regarding the flow of funds between the various parties and the fund flow data is examined in the light of the flow of securities. Additionally, call records are identified and used to corroborate the findings of the investigation. Once the investigations are complete, proceedings are initiated against the identified parties who allegedly participated in the market fraud, show cause notices are issued, replies received by the parties are reviewed, the parties are granted opportunities of personal hearing before the authority in SEBI hearing the matter and lastly an order is passed in the matter. Often, during the pendency of investigations or when the alleged fraud is noticed, SEBI passes ex-parte ad-interim orders too enforcing interim action against the concerned entities. SEBI is bound by the principles of natural justice and thus provides several opportunities to entities to either submit information, reply to show cause notices, appear for statement recording exercises or appear for personal hearing before the internal authorities. It is trite to mention, that a lot of the delays associated with the entire investigation process are because of the numerous opportunities which are granted to parties to provide information or because SEBI tries to adhere to the principles of natural justice. There have been several instances when investigations conducted by SEBI or orders passed by SEBI have been struck down by the appellate authority, namely the Securities Appellate Tribunal. In several cases, the matters are remanded back to SEBI for fresh examination for technicalities connected with the framing of the charge in the show cause notices or on grounds that SEBI has acted in contravention of the principles of natural justice. In such an event, the process recommences from the stage of issuing the show cause notice and the entire cycle is repeated again, ensuring that the proceedings stretch on.

Let’s Fast Track ItIt must be highlighted that justice delayed is justice denied and as such, it is the duty of the SEBI to ensure that it is in a position to complete its investigations at the earliest. There are certain steps which SEBI may resort to ensure that its investigations process is streamlined further. SEBI must resort to maximum use of technology in identifying the fraudulent activities in the market as well as the manipulative and fraudulent trades. The trade log and order log examination process may also be automated or processed with the help of technology, thereby reducing the timeframes involved. SEBI already has systems available with it called the Integrated Market Surveillance System (IMSS) and Data Warehousing Business Intelligence System

Disclaimer – The views expressed in this article are the personal views of the author and are purely informative in nature.

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Brand Protection

Falls Short40 December 2014 | LegaL era | www.LegaLera.in

In sights

Where

The article makes a case for brand protectors to be a step ahead of infringers in order to restore public confidence and promote

economic growth

Insigh ts


Rishi KulshresthIP Enforcement [email protected] Pinkerton (India)

A Frontier Economics study commissioned by ICC BASCAP found that the total global economic value of counterfeit and pirated products was as much as US$650 billion in 2008. This figure is expected to more than double to US$1.7 trillion by 2015, due in part to rapid increases in physical counterfeiting and piracy. In its current avatar, it is a full blown racket capable of destabilising economies. Today, counterfeiting is regularly raising funds for terrorist activities, drug pushing, prostitution apart from robbing governments of billions of rupees worth of taxes. This is in addition to the huge number of job losses and risks to public health.

The concept of brand protection in India suffers from a superficial understanding even amongst the educated strata of the country. Even under law, infringement is taught as a white collar crime.

Shortcomings:Abuse of process of Law: There is a gross abuse of the process of law by Advocates. They delay the matter by filing Exemption Applications at the initial stages before the proceedings or by resorting to the remedy of Section 482 to quash the FIR. Sometimes they allege that the FIR was fake and no police action/seizure ever took place or by invoking that the proceedings are illegal and fraudulent against the principles of natural justice or by challenging the jurisdiction of the Court or by asserting illegality in the proceedings. Too many adjournments are sought and easily granted by courts at district level and this again delays the proceedings.

Rule of not over three adjournments is neither quoted nor followed. Sometimes, the forensic laboratory report is missing, hugely delayed or vague. Half baked investigations, scrappy/deficient police charge sheets and inadequate filing of appropriate documents by police too adds to the woes of the remedy seeker and State. To top it all, witnesses are either missing or they turn hostile as the cases drag on for up to 10 yrs. Many times, procedure that the witness must be a person who witnessed the raid action is not observed. Police is empowered by section 160 CrPC to ensure that those present at the site of the raid can be forced to give evidence. But instead, many times, police puts names of other available persons as witnesses and this too makes the case weak. As they may not turn up or might turn hostile. Many times witness turns up due to court summons after taking leave from his office. But after waiting for hours in facility void courts, he realises that either the case got adjourned or he has to come again next day/date as the examination could not be completed. Witness is usually never paid any travel expenses despite the provision in the law. Witnesses have the right to be reimbursed for the travelling expenses under section 312 of CrPC, the expenditure incurred for the witness to be present in the court is borne by the court. If the case is adjourned before the witness gives his evidence,


In sights

he must be given lunch costs. (Swaran Singh v. State of Punjab C.R.L.J. 2780 SC). If the witness has been called and he is present in the court, he must be examined at any cost. The case can be adjourned without taking his evidence only under compelling conditions. (Section 309 CrPC).

Administrative Impediments (Police Authorities):The Offences under Trade Marks Act 1999, Sections 103, 104, 105 and Copyrights Act 1957 Section 63 are cognizable as per schedule I part ii (jail term of 3 yrs onwards).There is still ambiguity so police is forced to put Section 420 of IPC. Even then, sometimes the Police Officers direct the Complainant to approach the Courts by giving excuses like offence is not cognizable, they don’t have time; there is no cause of action; the offender’s premises are beyond their jurisdiction or no action can be taken as the trademark is unregistered. Under section 64(1) any Police officer, not below the rank of a sub-inspector, may, if he is satisfied that an offence under section 63 in respect of the infringement in any work has been, of copyright is being, or is likely to be committed” xxx. Copyrights Act 1957 “Quote that police officer “if he is satisfied” is very open ended and gives wide powers to the officer and this is not defined. This unfettered power gives the police officer a whole new domain to observe or to abstain.

Many times police refuses on the grounds that they want to conduct their own investigation first to establish that an offence is made out under the reported acts and sections before conducting the raid. Many times police refuses action on the grounds that the papers like power of attorney or copyright registration are not in order. They fail to appreciate 2 main grounds: (1) Registration is not a mandatory requirement for police action under Copyrights Act 1957. Copyright comes into existence as soon as a work is created and no formality is required to be completed for acquiring copyright & registration is discretionary (section 45). Section 51 of the Copyrights Act 1957 does not require mandatory registration for action against piracy. The Act simply only says that you may register (section 45 of Copyrights Act 1957). This needs immediate redressal. Colarable exercise of power by police must be controlled. Mechanical action devoid of application of mind is prohibited as per administrative law.

In a landmark judgement by Supreme Court, the verdict was declared by a five judge Constitution bench led by Chief Justice P Sathasivam. The bench, in its ruling, stated that adequate disciplinary action must be taken against all police officers who fail to register a First Information Report (FIR) on complaints against cognizable offence (Lalita Kumari V Govt. of U.P.).Police many times refuses to file FIR despite protection provided by law. Moreover false information to Police can lead to FIR against the complainant under Section 177/182 & 211 of IPC. Police officer should immediately proceed for raid on being informed that a cognizable offence is being committed irrespective of any papers etc. Other details like papers and

authority is a matter of investigation and it is required at evidence stage only.

Police must immediately proceed to the crime scene to investigate all infringement related offences without being overly concerned with the papers etc.

Truth shall reveal itself to the police in the first instance in most cases especially where infringement of well known brands is reported.

These investigations by police must result in full unearthing of the goods trail up to godowns, distributors, manufacturers/assemblers, financiers and the kingpins in most cases unlike the scenario today where in 95% cases, nothing at all gets unearthed. Upon failure, magistrates must call for case daily diary and interrogate the IO. Police must reveal as to why they utterly failed to get ahead in most cases. This is the prime reason because of which now Companies facing infringement problems always insist that a minimum seizure must happen or only manufacturers or big godowns must be targeted for raids. Companies must not spare sellers of even little number of duplicate products. Police must ensure that they uncover the entire channel of distribution up to manufacturer in each case irrespective of the size of the seizure.

In fact movies and music piracy is thriving due to this lacuna. All small street side vendors sell pirated stuff without fear because they keep just 10-12 DVDs at a time and companies do not want to stop them as their policy permits raiding only big fishes. If availability is not curtailed 100%, then pirated products will percolate from different sources. So all companies must ensure total destruction of availability including small pirates for ensuring piracy free markets. Raids are not the only solution against such small pirates.

Other Factors: • Section 66 of the Copyrights Act 1957 is seldom

invoked. This Act requires infringing material and machinery plates etc. to be released to the copyrights owner irrespective of outcome of the case (Convicted or Not).

• No proper valuation of the cost of infringing material and goods is done.

Non Deterrent Punishment: Though the Offences under the provisions of the Trademarks Act and Copyright Act 1957 are cognizable, non-bailable and non-compoundable, experience has shown that the penal provisions of the Act are non deterrent due to lack of severity, lack of convictions and abysmal enforcement by the police.

• In private complaint (Magistrate) cases, sections can be added by the Judge but even in case of police FIR, trial Court can add sections: Section 216 (1) of CrPC, any court may alter or add to any charge at any time before the judgement is pronounced. The section invests a comprehensive power to remedy the defects in the framing or non-framing of a charge, whether discovered


Insigh ts

at the initial stage of the trial or at any subsequent stage prior to the judgement. The Public Prosecutor seldom tries to point out these lacunae to the court during trial. The result is that the offender gets off easy and is not deterred. The complainaint in such cases must take the initiative. Reinvestigation application can be put up under section 173(8) CrPC before the District and Sessions Judge and under section 482 of CrPC (High Court). In most of the Copyright cases, the complainant is not called to give witness and the case gets closed on various grounds without any information to the original Complainant Company that the case/FIR has resulted in acquittal.

Defense:• “No such person shall be liable to any punishment if

he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence”. The real counterfeiter simply has to pay money to one person to bear the consequences of the offences by acting as the Manager of the firm or company and accepting the guilt.

Conclusion:

We must have a government or privately funded i.e. FICCI whistle blower reward scheme against Brand piracy to ensure it is nipped in the bud.

We also need to have a reward scheme based on number of seizures for police officers who show exemplary efficacy in controlling piracy in their areas. Private companies should hold training seminars apart from giving rewards to honest police officers so that suo motu raids on Brand pirates can increase.

We have to understand that to control piracy, you must make it a commercially unviable or losing proposition. Piracy only prospers when “REWARDS OUTWEIGH THE RISKS”.

By proper enforcement of IPR laws, constitution will make the ends of justice meet in a more meaningful manner, in line with the legislative intent at the time of framing and approving and enacting them.

Companies must also take initiative by rehabilitating the offenders caught in piracy cases under their CSR budgets. This will give an alternative to those offenders who want to stop but do not have any knowledge of any other vocation.

Today, restorative justice is largely missing. Criminal remedy of retributive justice has to be stringent enough to be a deterrent and that is absent in IPR laws of India in letter as well as in practice.

Infringers and Brand Protectors are fighting a constant battle all over the world. Each tries to outsmart the other. No form of Brand protection is ultimate. Infringers eventually find a way to circumvent the brand protection challenge. So we must keep on innovating brand protection methods and must remain one step smarter to contain piracy. This will contribute to the national economy significantly and that will also be a boon for India.

This article has come from me after combating brand infringement issues for the last 20 yrs all across India. I have conducted hundreds of “hands on” raids apart from many more through agencies in every state of India from Port Blair to Srinagar. Currently, I’m associated with “Pinkerton”, India as Brand Protection Advisor. I’m a writer on Brand Protection issues and I also train corporate sales teams on Brand Protection.

Laws at whatever level they are

taken are not dry or abstract

principles, they are for use and

service in the aid of justice... They

must be tested and examined by the

criterion of social utility and the

consensus of human instinct and

the sense of right and wrongLord Wright:

Proceedings of British Academy, Vol.xxxii.339


PhD Research scholar ( Law) at Mewar University, Chittorgarh, Rajasthan under Guidance of Professor Dr S.K. Pandey

Legal Give

Take on Board

LiberalisationA Chance


For this, they have to spend considerable sums of money. It would be much more convenient for them to get this advice on Indian soil itself.

Apart from helping businesses grow, competition will definitely improve the quality of Indian law firms. Foreign law firms will bring with them cutting-edge expertise which will help Indian firms reap the benefits, in turn helping the sector grow. Moreover, Indian lawyers will get a chance to work with foreign law firms, learn the laws and modes of other jurisdictions and widen their horizons. Legal education will also be radicalised. The young will have more career opportunities, a better work environment and competitive pay scales along with global exposure.

A competitive market is a thriving, healthy market. We need to grow and not stagnate. The Bar Council of India had filed a Supreme Court appeal in April 2012, after the Madras high court delivered a judgement in favour of status quo, which continued to allow foreign lawyers to fly-in-fly-out of India. This appeal against foreign law firms practicing in India remains stuck at the service stage two years after the Supreme Court had given 10 weeks to complete serving notices on foreign law firms. It is in our interest that a stance on the entry of foreign law firms be taken at the earliest.

Let us learn from history. Economic liberalisation did wonders for our economy, give legal liberalisation the chance to do wonders for the Indian Legal Industry.

The debatehas been on for years now. Should Indian markets be opened to foreign players in the legal arena? Would it adversely affect local law firms or the practice of law? Major law firms in India hold the view that the market should be opened up. Indian law firms have entered into referral arrangements with foreign law firms as the latter are not allowed direct access on Indian soil. This simmering debate surfaced afresh when UK law minister Shailesh Vara, during his India visit, lobbied for the entry of foreign law firms to practise non-Indian transactional law in India.

What really is the problem with liberalisation, if any? If a basic parallel may be drawn, liberalisation in the legal sector is considered bad just as it was considered bad in every other sector. Prior to the 1990s, foreign players were not allowed in India in any sector with a view to boost local players. Even now, Walmart is in a quandary to enter India (no FDI in retail). India has always feared that the foreigner will steal her dal-roti. Without considering that the foreigner will bring along bread and butter that the Indians too can share from.

This is a digital age with no boundaries. People work across the globe from within the confines of their homes and yet, foreign law firms are denied access to India. This holds India back. We must keep pace with the times. Our businesses are growing and need advice on foreign law.

At a time when most sectors of the Indian economy are opening

up to global competition, shouldn’t the legal sector follow suit?

Legal Era spoke to a cross-section of eminent lawyers to know their take on this burning issue…

Take on Boa rd


Promoting trade liberalisation in the legal services sector is in line with the objectives of job creation and increased efficiency of the legal

services sector. Moreover, it is in consonance with our obligations under the General Agreements on Trade in Services (GATS) under the WTO framework. Ergo, it is important that we take some steps forward for liberalisation of the legal services sector but without compromising the interests of advocates practising in India.

It is indisputable that liberalisation will help in capacity building of Indian lawyers and firms, especially in areas such as International Law, Investment Arbitration and other such where we lack expertise.

It is a sad reality that Indian legal professionals are not fully equipped to compete with internationally focussed lawyers and firms who have vast resources at their disposal.

With an additional objective of avoiding any potential de facto or de jure discrimination between Indian lawyers and firms and foreign lawyers and firms, it is apposite that regulatory barriers are removed in an objective and impartial manner and foreign lawyers are allowed to practice in our country, at least in the areas of international and corporate law if not domestic laws in Indian courts.

This is my personal opinion in this regard.”

Justice Deepak Verma

As a General Counsel, I strongly feel that India needs to open up its legal

Industry. Entry of foreign law firms in India for work other than practice in Indian

Courts should be encouraged as it will usher in professionalism, transparency,

exposure to international laws, better employment opportunities and also better working environment, not to forget better emoluments. The fear of many of the law firms that they will be out of reckoning is not entirely true and this should actually

spur them to improve their quality and quantity of work.”

S. RamaswamyExecutive Vice President, Group General Counsel

Former Judge, Supreme Court of India


Take on Board

With a pro-business government at the helm, the timing could not have been more right to discuss this crucial issue that will affect not only the legal industry and major businesses in the country but also impact the course of FDI. With more cross-border transactions be they inbound or outbound the legal industry would boom in the field of regulatory practice, corporate advisory areas, transactional services, taxation, risk management, employment laws and many more.

Will only foreign firms gain from liberalisation or is there a mutual benefit for India too? Will liberalisation of the legal

sector help India? - Well, it will be a win-win situation for both- Indian as well as the foreign law firms. There could emerge on a large scale global Indian law firms that could find their entry in the top 20 in the world and be part of the Global Magic Circle.

I also see mergers of Indian law firms with foreign law firms, especially in small and medium size firms. This could be again beneficial for legal branding in India. Finally, a corporate consumer can enjoy the services of best in the market in a cost effective manner and yet have a choice.

With the country taking a pro-business stance, will liberalisation of the legal sector further this cause? Yes indeed! Will liberalisation jeopardise national security?-No. I think if there is liberalisation, then the Government should think of a model lawyers’ conduct for India which will bind them with a very strict confidentiality regime as also stringent consequences for national security violations, public interest, etc.

Will liberalisation impact Indian law firms positively?- Yes, Firstly with competition, quality will improve. They will have to work hard for retention of many Indian Multinationals as well as Global Multinationals who are their clients, since these entities work with global lawyers worldwide.

In all, a stretch factor for Indian law firms should enhance their performance overall and many a time for a few their approaches. Cross-border mergers of law firms also give an economic boost. Also, I see a segment of lawyers who can be bracketed under the category “LAWYERS TO LAWYERS”, which would be interesting.

Will liberalisation make a host of opportunities available for young law graduates in terms of employment and sheer range of practice areas? Yes, the sky will be the limit…”

Debolina PartapGeneral Counsel and Vice President Legal Wockhardt Group

This is inevitable as in the ‘cloud’ age, physical presence is an euphemism.

Instead of trying to block it, our effort should be to get reciprocity.”

Ashok BaratManaging DirectorForbes & Company Limited

Disclaimer – The statements and opinions expressed in this article are the personal views of the respective authorities. The content in the article is purely informative.

Barely Legal

Section 4 provides that whenever an amount exceeding `10 is found, the finder shall, as soon as practicable, give to the Collector a notice in writing. The Act even prosecutes one for finding such “treasure” and not reporting it to a revenue officer!

The Act applies to Delhi and provides that if there is a locust attack on Delhi, all adult males will be called upon to fight the invasion, with a call to arms made with drum beats. Refusing to answer the call would be a crime. Were those drum beats you just heard!

Applies to a Boeing 737. Also applies to a kite! So, a kite is also an aircraft and you need a permit to fly one!

We all know that many of our laws are archaic and behind the times we live in.

Ahead of the winter session of Parliament, we at Legal Era have put together

a wish-list of laws that need immediate scrapping. We hope Prime Minister

Narendra Modi is reading...

Indian Treasure Trove Act, 1878

East Punjab Agricultural Pests, Diseases and Noxious Weeds Act of 1949

The Indian Aircraft Act, 1934

This Act requires all officers to doff their caps in the presence of royalty despite the fact that India has not had an imperial monarch since.

The Police Act, 1861

!unk emJ


One of the criteria to become an Andhra Pradesh motor vehicle inspector is “well brushed teeth”. So, change your toothpaste, toothbrush and start brushing if your dream career is being an inspector.

Sita had to prove her innocence by test of fire. But that was then. Today’s married Indian woman need not worry. Even if she gets caught with some man, the man can get prosecuted for adultery, not her. The tables have turned and how!

According to this law, only the Indian government can deliver letters. By that token, home delivery for online shopping is illegal.

The Indian Motor Vehicles Act, 1914

Indian Penal Code, 1860 (Section 497)

Indian Post Office Act, 1898

Le t’s Uphold

Delisting Regulationsseeks Review of


Delisting of equity shares

of listed companies is regulated by SEBI (Delisting of Equity Shares) Regulations, 2009 (“Delisting Regulations”). The Delisting Regulations were notified on 10th June 2009 and replaced the erstwhile SEBI (Delisting of Securities) Guidelines, 2003. Unfortunately, the experience of various stakeholders with respect to delisting of shares under the regime prescribed under the Delisting Regulations has been less than satisfactory. Responding to representations from various stakeholders including stock exchanges,

industry bodies and investor associations, SEBI issued a discussion paper on 9th May 2014, seeking comments from stakeholders for review of the Delisting Regulations. As mentioned in the discussion paper, out of a total of 38 delisting offers made under the current regime, 10 offers were unsuccessful. While the provisions of the Delisting Offers which are thought to have impeded successful completion of these delisting offers have been discussed in detail in the discussion paper, the real reasons for failure of the current regime need to be understood and appreciated.

The body has issued a discussion paper on 9th May, 2014, seeking comments from stakeholders for a

review of the regulations that were notified on 10th June, 2009

Let’s Upho ld


Objectives of Delisting At the outset, it is important to highlight the factors which motivate Indian companies to seek to delist their shares.

Firstly, there is a historical perspective which one needs to reflect on. Previously, the Foreign Exchange Regulation Act, 1973 capped foreign direct investment in Indian companies at 40% in most industry sectors which meant that multinational companies were left with no choice but to operate through listed companies if they could not find a trusted Indian joint venture partner. Similarly, several companies promoted by Indian businessmen were widely held owing to the promoters’ inability to support the funding needs of these companies to the full extent. These Indian promoters exercised control over day-to-day affairs of these companies via the instrument of managing agency system until it was abolished in April 1970. Keeping pace with the economic and regulatory liberalisation initiatives taken by the Government of India since 1991, these two classes of promoters have gradually increased shareholdings in their listed subsidiaries in order to retain control over them and continue to be the ideal candidates for delisting offers.

Promoters opt for delisting of shares for several other reasons too, including the following:

(i) Delisting is undertaken as a precursor to restructuring of a financially under-performing company or to diversify into newer & riskier business lines.

(ii) Indian foreign exchange laws now permit overseas listing of securities without a domestic listing, which allows promoters to raise funds in overseas markets at lower rates. This has encouraged promoters to seek to delist shares from domestic stock exchanges and opt for international listings in overseas jurisdictions where disclosure and corporate norms are lax.

(iii) Delisting enables companies to save on administrative and other costs associated with maintaining listing of the company’s shares. This is a rational choice for promoters who have sufficient financial resources to support the company’s needs for the foreseeable future.

The Other Side of the Story Many of the companies who wish to delist their shares are well-run organizations with a history of delivering good returns to shareholders and hence small shareholders are naturally reluctant to part with shares of these companies. This factor is even more pronounced in the case of Indian subsidiaries of multinational companies, owing to transparency in business dealings and superior corporate governance norms adopted by them in line with those followed by their parent companies. Further, delisting of shares of well-run companies shrinks the capital market which runs contrary to SEBI’s avowed objective of strengthening and deepening Indian capital markets. Availability of good quality stocks is a necessary requirement for a strong, deep and resilient capital market. SEBI’s approach to regulation of delisting of shares appears to be biased, quite understandably, towards protecting interests of small shareholders. As is clear from

the discussion paper, this approach does not appear to have yielded the desired results.

Issues at hand The discussion paper highlights the following issues which have inhibited successful completion of delisting of shares in several deserving cases:-

• failure of Reverse Book Building Process (“RBBP”) to achieve its intended objectives

• lackofsufficientdemandfordelistingoffers

• the overall delisting process being found to be timeconsuming and inefficient

SEBI’s attention has also been drawn to attempts by certain promoters to allegedly circumvent the Delisting Regulations through questionable arrangements with a set of investors. Even if these allegations are true, one would be excused for arguing that these promoters were perhaps left with no other choice, given the high rate of failure of delisting offers under the current regime.

Proposed Solutions The central philosophy underlying a delisting regime in a developing but highly globalised market like India should be to enable the majority shareholder to gain the economic and administrative benefits of an unlisted company (via the delisting process), while ensuring a fair price for minority shareholders. Further, a delisting regime should discourage circumvention of its provisions and encourage compliance of its provisions in letter and spirit. The proposals outlined below, though perhaps not a panacea for all ills, would go a long way in achieving the philosophical objectives mentioned above.

1. Price Discovery Mechanism: The RBBP suffers from two key defects viz. (i) it does not assure certainty as regards acquisition of shares tendered by shareholders in a delisting offer, since the promoters are entitled to reject the offer if the price discovered through the RBBP is not acceptable to them; and (ii) it is biased in favour of institutional shareholders, since the delisting price is one at which the maximum number of shares are tendered. This impacts smaller shareholders who may have bid higher prices for their shares as their bids get rejected. It is logical for small shareholders to put in

Samir Oak General Manager, Group Legal Services

Tata Services Limited


Le t’s Uphold

Disclaimer – Views expressed in this article are personal and do not constitute views of the Tata group.

higher priced bids in a delisting offer, since entry price into a scrip for individual shareholders is usually more than that for institutional shareholders.

It may therefore be advisable to replace RBBP with a fixed price mechanism on the lines of that existing under the SEBI Takeover Code, where the acquirer quotes a price which he is willing to pay for the shares tendered in the offer, subject to a statutorily prescribed floor. This may be coupled with an obligation on the part of the promoter to acquire all shares validly tendered under the delisting offer. This would ensure that the delisting price reflects “willing buyer willing seller” arrangement and the delisting process guarantees certainty of exit for public shareholders participating in the delisting offer.

2. Voting Threshold for Shareholder Approval: Currently, the Delisting Regulations require approval by way of a special resolution, with at least 2/3rd of the public shareholders voting in favour, for undertaking a delisting offer. Requirement of shareholders’ approval does not serve any useful purpose, since approval of shareholders would anyway be reflected via participation in the delisting offer. However, if this requirement is to be retained, then the requirement to seek approval of 2/3rd of public shareholders ought to be diluted by prescribing approval of a majority of the public shareholders, consistent with SEBI’s circular dated February 4, 2013 with respect to schemes of arrangement.

3. Minimum Acceptance Threshold: The minimum acceptance threshold of higher of (i) 90% of share capital or (ii) 50% of offer size, as currently prescribed in the Delisting Regulations, enables large shareholders to hold the delisting process to ransom, since small shareholders adopt a dormant and non-participative approach, partly in view of the provision requiring the promoters to accept shares tendered by public shareholders even after closure of the delisting offer, for a period of one year. This situation is further compounded by Regulation 3(2) of the SEBI Takeover Code, which prohibits promoters from undertaking market purchases of shares beyond 75% of share capital. It is suggested that either the minimum acceptance threshold be reduced from 90% to 75% or the promoters be permitted to undertake market purchases of shares during the currency of the delisting offer beyond the 75% threshold, so long as the benefit of any higher price (vis-à-vis the price offer discovered via RBBP under the delisting offer) is made available to shareholders participating in the delisting offer. This will increase the probability of delisting offers being successful, while at the same time assuring a fair price to public shareholders. If the delisting offer still fails, the promoter may be required to dilute his shareholding to

75% within 12 months from announcement of the delisting offer, akin to SEBI Takeover Code provisions.

4. Provision for Exemptions: Unlike SEBI Takeover Code, the delisting regulations do not empower SEBI to exempt any specific class or company from the rigors of delisting regulations. It is generally observed that institutional investors do not have significant holdings in companies which are financially under-performing and a significant part of the shareholding of such companies is held by individual inactive shareholders. With regard to such companies, delisting offers cannot be successful under the current dispensation, given the indifference and non-participative approach of small shareholders. The situation gets compounded due to the inability of promoters to infuse equity into the company in view of the minimum public shareholding requirement of 25%. It would, therefore, make sense to include an enabling provision empowering SEBI to exempt financially weak companies and any other deserving class of companies from the rigors of Delisting Regulations, especially shareholder approval and minimum acceptance thresholds. It would be better to allow such companies to be delisted rather than expose public shareholders to the consequences of winding up proceedings.

5. Takeover-cum-Delisting Offer: Currently, SEBI Takeover Code does not permit takeover-cum-delisting offers. This results in the acquirer being required to make two offers for acquiring shares of public shareholders at different points in time, even if the acquirer’s original intent is to acquire the entire shareholding of the company. Consistent with regulations in developed jurisdictions, it would be advisable to allow takeover-cum-delisting offers, subject to upfront disclosures about the acquirer’s intention to delist the company.

6. Taxation: The sale of shares in a delisting offer may result in accrual of capital gains. In this regard, unlike in the case of capital gains arising from sale of shares on the floor of the stock exchange which are exempt from capital gains tax u/s 10(38) of the Income Tax Act, 1961, the sale of shares in a delisting offer attracts capital gains tax, which makes it financially unattractive for a shareholder to tender his shares in a delisting offer vis-à-vis selling them on the floor of the stock exchange. It may be advisable for SEBI to request the Ministry of Finance to provide a level-playing field by exempting from capital gain tax, any capital gains accruing via sale of shares in a delisting offer. Securities transaction tax could be levied & collected on sale of shares in a delisting offer as per a special mechanism to be jointly devised by SEBI & CBDT.

It is encouraging to note that SEBI continues with its practice of reviewing various regulations framed by it on a regular basis, by adopting a consultative approach. In this respect, the discussion paper on review of the Delisting

Regulations is a welcome step and one hopes that the consultation process culminates in adoption of a majority, if not all, of the proposals outlined above, thereby ushering in a progressive delisting regime.

Conclusion

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The recent attempt by the Delhi High Court to draw a dividing line between “FORCIBLE” sexual intercourse that amounts to rape and “FORCEFUL” sexual intercourse that does not amount to rape, has the potential to increase the scope for subjectivity and misuse in the country’s already vague rape law

ForcedForceful– A Dangerously

by Anusha Singh

Ambiguous Distinction

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Or


The recent judgement dated October 30, 2014, delivered by the Delhi High Court in Achey Lal v State Govt. of NCT of Delhi (CRL. A. 1534/2011), drawing a distinction between forcible sexual intercourse amounting to rape and forceful sexual intercourse not amounting to rape, has given rise to varied reactions from the legal fraternity and otherwise.

Ratio Decidendi And Grave Areas Of ConcernThe overly brief six page judgement delivered by Justice Nandrajog and Justice Mukta Gupta has acquitted the accused, a 45-year-old man in a state of

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intoxication, from charges of murder and rape of a senior citizen, aged 65-70 years, at her house at night when her husband was away.

It was held that the offence of murder punishable under section 302 of the Indian Penal Code (IPC) was not committed because it could not be established that the accused had either the intention or knowledge that the act of forceful sexual intercourse could cause death of the victim.

With respect to the offence of rape punishable under section 376 of the IPC, the question before the Delhi High Court was whether or not the victim was subjected to forcible sexual intercourse constituting rape. Since the victim had passed away, the offence of rape had to be proved beyond reasonable doubt on the basis of circumstantial evidence.

While arriving at the decision that the offence of rape had not been established on the ground that “even if sexual intercourse was forceful, it was not forcible and contrary to the wishes and consent of the deceased”, the reasoning adopted by the Delhi High Court, the facts considered relevant and the observations made are a matter of grave concern.

Victim Beyond The Age Of Menopause – Irrelevance And AbsurdityThe first point of concern is the surprising observation of the Delhi High Court that the victim was beyond the age of menopause. It is unfathomable as to how the presence or absence of the victim’s reproductive capability could even remotely be connected with the ingredients that need to be satisfied in deciding whether the offence of rape had been committed. Even though the Delhi High Court did not record any adverse observation that women beyond the age of menopause could not be raped, however, since the fact that the victim was “beyond the age of menopause” was specifically mentioned in the same sentence of the judgement that begins with the words “as regards the offence punishable under section 376 IPC…”, it is beyond doubt that the cessation of reproductive ability was taken into consideration by the Court.

In this regard, it is relevant to note the recent judgement dated 30.01.2014 delivered by the Karnataka High Court in Kumara v C S Pura Police Station (CRL. A. No.264/2012) wherein the Court held that the questions raised by counsel for the accused during the cross-examination of the victim, with respect to her age and the age at which she had menopause, were not only irrelevant but also were intended to humiliate the victim. The Court categorically stated that the learned trial Judge should not have allowed the counsel for the accused to put up these questions.

Hence, at the very outset, it is highly unfortunate that the Delhi High Court chose to consider and record this fact without providing any basis as to its relevance to the ingredients of Section 376 IPC.

Sexual Intercourse Was Not Forcible - Worrisome Raison D’êtreThis leads to the second point of concern. The Delhi High Court held that the sexual intercourse was “not forcible” on the ground that the post-mortem report showed that the multiple injuries had been caused only on the vagina and no injuries were found on any other part of the body of the victim. Hence, as a result of absence of any outward injuries, the Court deduced the view that there was no opposition or resistance from the victim and hence the sexual intercourse was consensual.

The over simplification and myopic nature of such a view disappointingly downplays the gravity of the offence committed. Since the offence could only be established by circumstantial evidence, it should have been taken into consideration that the victim was old. It is not unimaginable that a 65-70-year-old victim may not have the requisite strength or capability to fight back against a man twenty years younger than her, so as to offer such resistance that it results in the much desired injuries on different parts of her body.

It would be useful to note the observations of the Supreme Court in Balwant Singh v State of Punjab AIR 1987 SC 1080 wherein no visible marks of violence were found on the woman’s body apart from vaginal injuries and the victim complained of pain in the hands and back of her neck. While rejecting the contention that the absence of any injury on the back of the woman or any part of her body falsified the case of rape on her, the Supreme Court reasoned that the woman being 19/20 years old could not be expected to offer such resistance as would cause injuries to her body against the forced intercourse committed by the four accused men. Applying the same logic and drawing an analogy, the 65 to 70-year-old victim could not be expected to offer such resistance to a drunkman half her age. Further, the post-mortem report confirmed alcohol in her blood, which further fortifies the victim’s incapability to resist.

The Supreme Court in the aforesaid case also categorically laid down that it could not be said that whenever resistance is offered, there must be some injury on the body of the victim. This is a sound understanding of the incident that amounts to rape under law. It is illogical and unjust to insist that only an ‘active violent resistance’ was sufficient to prove that a victim protested. While absence of bodily injuries may be one of the many indicators to be considered cumulatively so as to show lack of consent, it can never be the whole and sole factor so as to establish whether or not there was protest by the victim.

Only on the basis that there were no outward bodily injuries and in the absence of any other mitigating circumstances to indicate that the offence of rape was not committed, the Delhi High Court’s judgement is a serious cause of worry. If the multiple vaginal injuries coupled with asphyxiation


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accidental death was due to a natural cause of action, however, the Court missed out the crucial angle that such natural cause of action must result from a natural process like eating or drinking or consensual sex which does not ordinarily result in asphyxiation! If the sexual intercourse was forceful enough to cause death of the victim due to asphyxiation, does such sexual intercourse continue to remain consensual? Should it not cease to be a sexual intercourse ‘without protest’ and move towards being a sexual intercourse that is forcible, and not just forceful?

Distinction Between Forced And Forceful Sexual Intercourse - Illusory And Dangerously AmbiguousThe line between forcible and forceful sexual intercourse is very thin and the subjectivity of the issue obfuscates this so-called line of distinction sought to be drawn by the Delhi High Court. Law, legislative drafting, judgement writing and interpretation – all these constitute a playground for skilful play of words. But every such act of play impacts the very fabric of society. Sensibility and practicality demand that ‘forcible’ and ‘forceful’ must be treated alike in determining whether an offence of rape is committed. The law of rape in India can certainly do without further subjectivity and ambiguity which will only create opportunities for misuse.

resulting in death, are insufficient to prove that sexual intercourse was without consent, then only in cases where portions of intestine protrude through the vagina may be considered gruesome and alarming enough to amount to rape!

Sexual Intercourse Was Forceful - A Contradiction In TermsConnected to this is another intriguing and contradicting area of concern. The Delhi High Court held that the sexual intercourse was forceful because the post-mortem report expressly stated that death had been caused as a result of aspiration of stomach contents resulting from the forceful sexual intercourse. Let us understand the occurrence of aspiration of stomach in normal conditions. It is the entry of material such as food or stomach contents from the gastrointestinal tract into the larynx (voice box) and lower respiratory tract. When such pulmonary aspiration occurs accidentally during eating or drinking, the aspirated material is in layman’s terms referred to as “going down the wrong pipe”, and it causes asphyxiation. However, only in rarest cases does it result in death, for instance when in a state of intoxication.

Coming back to the victim who “did not protest”, the sexual intercourse was so severe and rough that she suffocated to death. Though the Delhi High Court held that the victim’s

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Policy

Policy Update

& Regulatory Updates


Policy

Under the extant guidelines relating to hedging of currency risk of probable exposures based on past performance, resident importers are allowed to book contracts up to 50 per cent of the eligible limit.

The eligible limit is computed as the average of the previous three financial years’ import turnover or the previous year’s actual import turnover, whichever is higher.

On a review of the evolving market conditions and with a view to bringing on par both exporters and importers for hedging of currency risk of probable exposures based on past performance, it has been decided to allow importers to book forward contracts, under the past performance route, up to 100 per cent of the eligible limit.

Importers who have already booked contracts up to the previous limit of 50 per cent in the current financial year, shall be eligible for difference arising out of the enhanced.

RBI notIfIed foR hedgIng undeR Past PeRfoRmance Route

elIgIBIlIty lImIt foR ecR Reduced

RBI has decided to reduce the eligibility limit for Export Credit Refinance (“ECR”) facility for scheduled banks (excluding RRBs). It has been decided by RBI to reduce the eligible limit of ECR facility from the level of 50 per cent of the outstanding rupee export credit eligible for refinance as at the end of the second preceding fortnight to 32 per cent with immediate effect.

Policy Update


a BRokeR cannot act only as meRchant BankeR

An entity registered as a stock broker cannot operate only as a merchant banker in the capital markets, the Securities and Exchange Board of India (SEBI) said. Responding to a clarification sought by stock broker Almondz Global Securities Ltd. (AGSL), the market regulator clarified that although it was also registered as a merchant banker, the company was barred in March from taking up fresh assignments as a merchant banker for a period of five years.

The regulator prohibited AGSL from taking up new assignments or getting involved in any new issue like an IPO or follow-on issue from the securities market for five years in the matter of PG Electroplast Ltd.

Later in April, SEBI also suspended AGSL as a merchant banker for six months in the matter of Bhartiya Global Infomedia. “In the present case, the activities specified by AGSL are in the nature of activities carried out by a merchant banker, therefore, AGSL (stock broker) cannot perform such activities”, SEBI said in an “interpretive letter” to AGSL, published.

centRal Bank RevIews shoRt sellIng guIdelInes The guidelines relating to short selling have been reviewed and it has been decided to permit scheduled commercial banks and Primary Dealers (PDs) in Government securities to:

(i) Execute the sale leg of short sale transactions in the OTC market, in addition to the NDS-OM platform; and

(ii) Undertake short position (face value) in any security subject to the following limits:a. Liquid securities: 0.75% (enhanced from the existing

limit of 0.50%) of the total outstanding stock issued of each security or `600 crore, whichever is lower.

b. Illiquid securities: 0.25% of the total outstanding stock issued of each security.

At no point of time, a bank/PD should accumulate a short position in any security in excess of the above mentioned limits.

(iii) In case a liquid security becomes illiquid during the period of short sale resulting in a lower short sale limit, a

bank/PD can continue to hold the already executed short position till it is closed out. Any fresh short position in such securities, however, should be undertaken within the applicable limits for illiquid securities.

(iv) The short sale position executed in the OTC market should be reported on the NDS-OM platform within 15 minutes of the execution of the trade. Banks and PDs undertaking short sale and related cover transactions should indicate the same through proper tagging on the platform.

(v) Participants may review their systems and controls to ensure strict compliance with all regulatory requirements of short sale and cover transactions. Any violation of regulatory guidelines noticed in this regard should immediately be reported to the Chief General Manager, Internal Debt Management Department, Reserve Bank of India, Mumbai.

Read More: http://www.legalera.in/news-deals/policy-alert/item/14752-central-bank-reviewed-short-selling-guidelines.html

The Securities and Exchange Board of India (SEBI) is framing rules to govern how and when promoters will be allowed to reclassify themselves as public shareholders.Multiple sources have said that a discussion paper for public comment is likely to be issued soon. The move follows instances of promoters reclassifying themselves

to meet the minimum public shareholding (MPS) norms. The scenarios in which SEBI presently allows the reclassification include the signing of a separation agreement, duly disclosed, and promoter holding falling below five per cent. The regulator will also allow reclassification on a case-to-case basis if it feels the move is appropriate.

The issue was first highlighted when SEBI disallowed a proposal by Gillette India which involved termination of the existing shareholder agreement, so that the promoters could be termed public shareholders to meet the MPS norms. Similar instances took place involving Gokaldas Exports and Balmer Lawrie. “There was a need for this review. During the implementation of the mandatory requirement of 25 per cent public holding in private listed companies, it was observed that companies attempted to comply with the MPS norms by reclassifying a part of the promoter group entities as public,” said a source. Pursuant to this, SEBI’s Primary Market Advisory Committee discussed the issue and prepared a discussion paper.

Read more: http://www.legalera.in/sebi/item/15119-sebi-to-outline-framework-for-reclassification-of-promoters.html

seBI to outlIne fRamewoRk foR ReclassIfIcatIon of PRomoteRs

December 2014 | LegalEra | www.legalera.in

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Guide to The Companies Act, 18/eA comprehensive and authoritative commentary on the new Companies Act 2013, it examines the relationship between the Companies Act 2013 and Companies Act 1956. Latest Case-law, notifications, clarifications, rules as under Companies Act 1956 has been analyzed. The edition includes cases reported in Company Cases, Company Law Journal, All India Reporter, All England Law Reports, Butterworths Company Law Cases. In-depth coverage of latest SEBI Regulations and various other Rules & Regulations including ICDR Regulations, Listing Agreement etc. issued by SEBI; and latest RBI Master Circulars including Instructions to NBFCs, Guidance on setting up of Branch Office in India etc. at appropriate places.

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DD Basu – Commentary on the Constitution of India; Vol. 3

(Covering Articles 15 to 19 (Contd.))D D Basu Commentary on the Constitution of India is a pioneering work on the Indian Constitution. It is the first authoritative work on the Constitution of India that adopted an interdisciplinary approach, examining this great document from the philosophical, sociological, political as well as legal perspectives. The series is a treatise on comparative constitutional jurisprudence. Volume 3 of this new and revised 9th edition contains a detailed discussion on Articles 15 to 18 besides providing a framework and an introduction to Article 19. The discussion on Article 19 will continue in the upcoming Volume 4. This work has been updated to include the latest cases, legislative amendments and current developments in constitutional law.

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Legal Precepts


Accomplice one who intentionally and voluntarily participates with another in a crime by encouraging or assisting in the commission of the crime or by failing to prevent it though under a duty to do so

Accord to bring into agreement

Account a record of debit and credit entries to cover transactions involving a particular item (as cash or notes receivable) or a particular person or concern

Account Payable the balance due to a creditor on a current account

Account Receivable a balance due from a debtor on a current account

Account Rendered an account presented by a creditor to a debtor for examination and settlement

Account Stated an account presented by a creditor to his or her debtor which by implied or express acceptance has been agreed upon by both parties as correct

Accountable liable [for the burglary]: obliged to accept responsibility [the bank for payment of the check]

Accounting an often court-ordered presentment or examination of accounts [a complete would be necessary to determine the nature of the expenditures "Case & Comment"]

Accounts Receivable Money due from your customers. Your accounts receivable balance equals the dollar amount of sales that you have made to your customers on credit terms but that have not yet been paid. The accounts receivable balance is an asset of your company

Accredited Investor an investor that qualifies under the Securities Act of 1933 and related Securities and Exchange Commission regulations as one having at least a specified net worth and a certain level of knowledge and experience in financial matters

Accrete to grow or become attached by accretion/ to cause to adhere or become attached

Accretion the process or a result of growth or enlargement: as the increase or extension of the boundaries of land or the consequent acquisition of land accruing to the owner by the gradual or imperceptible action of natural forces (as by the washing up of sand or soil from the sea or a river or by a gradual recession of the water from the usual watermark); also accession in which the boundaries of land are enlarged by this process compare avulsion

Accrual the action or process of accruing [claim must be brought within two years of the date of]

Accrual Accounting Income is reported in the year it is earned, and expenses are deducted in the year they are incurred

Accrual Basis Accounting An accounting method that records sales, expenses or other events at the time they occur, rather than when cash changes hands

Accrual Method the principle or method by which taxable income is calculated

Accrueto come into existence as an enforceable claim

Accumulate to add (income from a fund) back into the principal/to increase gradually in amount or number

Accumulated Earnings Tax a tax levied on the taxable income of a corporation that is accumulated by the corporation rather than distributed to shareholders and that is not retained for the reasonable needs of the business

Accumulation Trusta fiduciary relationship in which one party holds legal title to another's property for the benefit of a party who holds equitable title to the property

Accusation a formal charge of wrongdoing, delinquency, or fault [the accused shall enjoy the right to be informed of the nature and cause of the U.S. Constitution amend. Compare allegation, indictment and information

Accusatorial of, relating to, or being a form of criminal prosecution in which a person is accused of a crime and is tried in public by a judge who is not also the prosecutor. Compare adversary, inquisitorial

Mind-Boggling solutionsCrossword Sudoku

Mind-Boggli ng


For answers to the Crossword & Sudoku puzzle, turn to Legal Precepts section on page no. 60

Legal Crossword

Sudoku

Nitaa Jaggi

ACROSS1. Credentials (6)

4. ICJ of the United Nations (5,5)

8. 'Right of taking' in French (7,1,7)

10. Gradings of crime (7)

12. Bodily punishment (9)

14. Capture (4)

16. Religious group (4)

17. Competent (3)

19. Bribe (3)

21. Rule out (8)

22. Biased judgement (3,5)

23. French coin of old (3)

24. Catch (3)

25. Wound reminder (4)

26. Unaltered (4)

29. Not rich (4)

30. Weaken (4)

32. Defamation in oral form (7)

35. A vice-legal representative of a monarch (8,7)

37. Angry dispute (10)

38. Burgled goods (6)

DOWN2. Norm (3)

3. Firearm (5)

4. It’s made before hanging (4)

5. Printing proof (5)

6. Liability suit targets (4,7)

7. Commands (6)

8. Entreaty (4)

9. Investigator (8)

11. Scan a document again (6)

13. Respond (6)

15. Cops, formally (6,5)

16. Marriage partner (6)

18. Womb-to-tomb journey (8)

20. Hired assassin (6)

27. An action of conversion (6)

28. Lockup (4)

31. Gandhi’s loin cloth (5)

33. Vigilant (5)

34. Worked up (4)

36. Everyone in court (3)

9 54 8 9 2

3 5 68 5 7 1 2 39 6 5 3 7 8

3 8 6 5 2 92 7 55 1 9 8

7 1

Fu n ‘n’ Frolic


Fun ‘n’ Frol ic


Open BarTrends ThaT will shape The fuTure

Aakriti Raizada SharmaFounder & Managing EditorKindly share your opinions/feedback at [email protected]

Like with most other walks of life, the contours of the legal industry too are being redefined.

Factors such as cyclical swings in the economy, growing competition, and fluctuating demographics, attitudes and work styles have led to the emergence of newer trends that are

fast transforming the practice of law as we know it to be.

A significant development is the proliferation of online services which seek to automate legal tasks apart from allowing individuals and small businesses access to customised legal advice.

Another trend is the increasing importance attached to electronically stored information (ESI) including email, voice mail, instant messages, graphics and data stored on handheld devices.

A third is the emergence of the multi-generational workforce where managements must now walk the tightrope to keep their employees, often separated by several generations, happy and

productive.

A fourth is the rise of Legal Process Outsourcing (LPO) where legal professionals must now share the burden of their work with external vendors within and outside the country.

One more development is cross-border expansion where domestic law firms are collaborating with foreign firms to expand their global footprint.

Lastly, emergence of the virtual law office needs special mention as lawyers working remotely from their homes or any other location may well be the way to the future.


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Deal · 2020-03-11 · Theme: Knowing The Competition Law Sets You In The Right Direction Competition LAW SUMMIT2014 13th December, 2014 Hotel Taj Mahal, New Delhi Must Attend For