conscientia - qplspl · years and, therefore, it loses its efficacy as a deterrent to wrongdoing....

CONSCIENTIA - QUI PRIOR MONTHLY JOURNAL Issue 1 June

Qui Prior Law Associates

Q u i P r i o r L a w

A s s o c i a t e s

D - 1 6 / D , H a u z K h a s ,

N e w D e l h i – 1 1 0 0 1 6

+ 9 1 1 1 2 6 5 3 7 6 1 5

6 / 2 1 / 2 0 1 4

Omer Naaz – Editor

Qui Prior is delighted to bring to you its second series of

Newsletter named CONSCIENTIA.The word Conscientia means knowledge shared with others. Qui Prior has

initiated this newsletter as a part of its endeavor to share latest developments in the field of law with its valued clients. Conscientia will try to encapsulate legal

developments, court rulings and other regulatory developments for the benefit of its clients. Our upcoming

editions will be covering developments in the field of Media, Telecom, Food, IPR, Cyber Laws, Retail and Consumer Protection laws and any development

pertaining to other laws. We look forward for the suggestions and comments from our valued readers to

make this Newsletter more meaningful.

Thanks - Naaz

CONSCIENTIA

CONSCIENTIA - QUI PRIOR MONTHLY JOURNAL | Issue1 JUNE 2


CONSCIENTIA (Qui Prior Monthly Journal)

June 2014

Corporate Governance & The Companies Act, 2013

By Ankit Singh

Some of the key laws in India date back

more than 50 years and have not kept pace with the changing contours of the

economy. In addition, enforcement

through the court system takes many years and, therefore, it loses its efficacy

as a deterrent to wrongdoing.

On August 30, 2013, India enacted the Companies Act, 2013 (the “New Act”), which has replaced the more than 50-year old Companies Act, 1956. Not all the provisions of the New Act will come into force immediately as a number of them require the Government of India to draft rules and regulations for their implementation.

The New Act is seen as an important step in bringing Indian company law closer to global standards and in improving the ease and efficiency of doing business in India. It touches on areas such as corporate governance, corporate social responsibility, auditor rotation and investor protection, all in an attempt to strengthen internal controls. When the New Act is fully implemented, it will have a direct bearing on the way companies are governed in India –

In This Issue Almost one million companies are registered in

India which were being governed by a 50 year old Companies Act 1956. As India stages, a platform for foreign investors it was the need of hour to provide a landmark legislation to earn the trust of foreign investors and provide a efficient legal system for Corporates. Ankit Singh puts forth a detailed annotations about Corporate Governance & the Companies Act, 2013

Does the Ad-cap Regulation serve the very purpose for which it was notified? As Shakespeare said ‘To be, or not to be, that is the question’, Anupam Alok discusses different facets about Ad cap regulation, which is on its way to the market.

Can the arrangement between various operators to share spectrum for 3G services be beneficial for customers and state or it will hamper the interest of customers along with national revenue. Haritha Komuravelli throws light on a recent TDSAT judgement on INTRA CIRCLE 3G ROAMING

A mobile phone can give you much more then

just communication. The Radiations emited through can be absorbed by human body constantly and can cause a great deal of harm. Karuna Sharma talks about Regulations on SAR (Self Absorption Rate) Value in India

News National and International

Facts, Quotes and Maxims



improving corporate governance in a manner that, it is hoped, will reduce misconduct at and by Indian companies. The New Act holds out the possibility of reducing the risk of corrupt practices, although in some ways it also potentially increases such risks in certain respects. The principal risk in this regard arises out of newly mandated Corporate Social Responsibility (“CSR”) programs.

The main features of the new law in this regard are set out below.

Corporate Governance and Corporate Social Responsibility

Public companies will now be required to have independent directors on their boards, with publicly listed companies required to have at least one-third independent directors. Such directors may not be given any stock options and they cannot serve more than two five-year terms. In addition, nominee directors will not be regarded as independent. These provisions are significant as the lack of independent directors and/or their true independent character has always been perceived as a central reason for most corporate frauds. Indian companies are generally promoter controlled and there is no tradition of independent directors challenging the decisions of the promoter. The New Act attempts to remedy this issue.

The New Act codifies the duties of directors,

specifically, the duties to act in good faith, to avoid any direct or indirect conflict of interest with the company, and to exercise due diligence and reasonable care in decision-making.

CSR will be mandatory for a company with a net worth of INR 500 crores (approximately US$ 90 million) or more, a turnover of INR 1,000 crores (approximately US$ 180 million) or more, or net profits of INR 5 crores (approximately US$ 0.9 million) or more during any financial year. Any company meeting these thresholds will be required to spend annually at least 2% of its average net profits of the preceding three financial years on social and charitable causes.

This is a highly innovative provision, but it could also lead to certain forms of bribery in which Indian could be tempted to use CSR spending to benefit politicians in power by conducting CSR activities in their constituencies – a form of indirect lobbying.

Auditor Rotation

The New Act provides for mandatory auditor rotation for listed and other prescribed companies every five years depending on whether the auditor is an individual or a firm. In addition, there will be a cooling-off period of five years after completion of such a term during which the auditor cannot be re-appointed.

Approval of the appointment of auditors by the

shareholders at every annual general meeting of the company will be made mandatory.

A company‟s auditor may not directly or indirectly render any internal audit, investment advisory, management or similar services to the company, its holding company or its subsidiary

Further, the auditor will be required immediately

to report to the central government upon reasonable suspicion of any offence involving fraud that is being or has been committed against the company by its officers or employees. Presumably, this will include cases in which company funds are being diverted in violation of the company‟s internal controls for making corrupt payments, although the final contours of this auditor reporting duty in specific cases will remain to be seen.

“[The CSR mandate] is a highly innovative provision, but it could also lead to certain forms of bribery in which Indian Corporates could be tempted to use CSR spending to benefit politicians in power”

These provisions assume great significance in light of certain recent corporate accounting scams like the multi-million dollar Satyam scandal, in which the U.S. Securities and Exchange Commission (“SEC”) took action against five Indian affiliates of an international



audit firm that served as independent auditors of Satyam Computer Services Limited. The SEC found that the auditors had repeatedly conducted deficient audits of Satyam‟s financial statements and enabled accounting fraud to go undetected for several years. Although the Indian authorities filed criminal charges against the partners of the audit firms involved, they did not have legislation to regulate auditor conduct – a situation that has now been addressed.

Enforcement

“Class action” lawsuits will be introduced for the first time in India. The New Act provides that a class of members or depositors, in specified numbers, may initiate proceedings against the company if they are of the opinion that its affairs are being carried out in a manner unfairly prejudicial to the interests of the company, members or depositors. This is seen as a huge step in empowering investors to challenge prejudicial behavior. However, it is hoped that Indian courts will be judicious in entertaining these petitions as this provision could be misused for frivolous litigation.

Fraud will be made a new ground for seeking the winding up of a company.

The new law grants additional statutory powers to the government‟s investigative arm, the Serious Fraud Investigation Office (“SFIO”), to tackle corporate fraud. It also proposes the establishment of special courts for speedy trials. These measures are an attempt to create an agency similar to the Serious Fraud Office in the United Kingdom, to provide teeth to the Indian government‟s efforts to tackle serious fraud and corrupt practices. However, what remains to be seen is if true independence and the necessary infrastructure and resources are given to this body.

Although the new law is attempting fundamentally to change the way companies are governed in India, in reality there may be delays before these changes are actually implemented. Nonetheless, despite the fact that other legislation more

centrally targeted to bribery, such as the Lokpal Bill (as well as the Whistleblowers Protection Bill), remains stalled in the Indian national legislature, the passage of the New Act is potentially a significant vehicle for positive change as well as a source of potential new burdens and risks. Among other things, company boards will need to be mindful not only of the risks of mandatory CSR spending, but also the risks posed by mandatory auditor rotation. If a company has had a truly independent, vigorous, and well-staffed independent audit team, the loss of expertise in the manner in which the company operates could have a negative impact. Both audit firms and companies will doubtless be working hard to address these risks. ________________________________

INTRA CIRCLE 3G ROAMING JUDGEMENT by Haritha Komuravelli

In India frequencies for 3G spectrum were allocated to mobile operators in an auction by Department of Telecommunications (DOT). In February 2010, DOT issued a notification for the auction of 3G spectrum and owing to limited availability of the spectrum, a natural resource; no operator was able to get the spectrum in pan India i.e. in all 22 circles. This led to a situation, operators that were having 2G spectrum in any particular circle, they were not allocated 3G spectrum in the same circle. After the rollout of the obligations of the license, operators made bilateral arrangements among themselves to utilise the spectrum available to one Operator in one circle by the other Operator and vice versa. This arrangement was not done in clandestine manner but with the proper intimation to Telecom Regulatory Authority of India (TRAI),



Department of Telecommunications (DOT) and a copy of the agreement was sent to TRAI by the Operators. Union of India (UOI) questioned the validity of intra circle 3G roaming arrangement entered between the Telecommunication Operators and issued notices to stop the intra circle 3G roaming services.

Various Telecommunication Operators (Vodafone, Airtel, idea, etc) filed petitions before the division bench of the Telecom Disputes Settlement and Appellate Tribunal (TDSAT). After the hearings, Tribunal was unable to deliver the final order as the matter was concluded with a split judgment, even DOT itself opined that the roaming arrangement executed between the Operators does not amount to sharing of spectrum, mean while the Tribunal passed an interim order and the operators continued to enjoy the inter-arrangements under the interim protection. Subsequently DOT asked the operators to stop the services provided, through arrangements and issued show cause notices to the Operators, who continued their intra circle roaming agreements and also imposed penalties. The operators approached High Court and the Court directed all the Operators immediately to discontinue the bilateral arrangement entered between them for providing 3G services to their subscribers. When the High Court refused to grant stay against the order of penalties imposed by DOT, then one of the Operators approached Supreme Court where it restored the protection against the penalty order issued by DOT, and with the order of the Supreme Court, the High Court granted the same relief to other Operators. With the interim relief granted to the Operators, the 3 operators (Vodafone, Airtel & idea) filed petitions in the newly formed Tribunal by challenging the penalty order imposed by DOT against them for entering into intra circle 3G roaming arrangement.

The Tribunal informed, it will look into the core issue of the matter “whether it is valid and permissible for a non-3G operator in a circle to

enter into an arrangement with a 3G operator in the same circle by means of a bilateral agreement to enable the subscribers of the former to roam over and use the 3G network of the latter.” After all the parties put forth their arguments. The defence (UOI) contended that the intra circle 3G bilateral roaming arrangement are not covered under the provisions of UAS license and an operator having 2G license cannot provide the 3G services by way of roaming facilities; it cannot accept customers for 3G services in circles where it failed to win the 3G spectrum.

TRAI made its recommendations that the Intra circle roaming arrangements entered between the operators were violative of terms and conditions of the license as a 3G service is a separate and a valuable service, and it is not an extension or continuation of 2G spectrum. Further it was recommended that by way of this bilateral agreements, operators are acting as Mobile Virtual Network Operators (MVNO) which is not permissible in India and this also leads to revenue loss for the Government.

According to operators, they entered into intra circle roaming arrangements both in the telecom circles where they obtained the 3G spectrum and also in those circles where they failed to obtain the 3G spectrum services. Whereas UOI castigated that the operator only as seekers of the services (i:e only as they failed to obtain the 3G services) and failed to address the issue from the perspective of the service providers who obtain the 3G spectrum in certain circles.

Later the Tribunal clarified that rather than going to point that the rights of petitioners were of contractual or permissible, it held point of consideration is „limits of the rights’. It clarified that there are no separate 2G and 3G service licenses and further that the entities with 3G spectrum would necessarily need to have an unified Access Service (UAS) or Cellular Mobile Telephone Services (CMTS) licence and also said that the restriction does not come from scope of licenses but range of services permissible under it. It also invalidated the



argument that 2G operators in order to employ 3G technologies for delivering 3G services must have a separate licence than its existing 2G licence. Tribunal held that it is an extension of 2G services, when there is absence of 3G services the subscribers will fall automatically into 2G services. Tribunal held that, simply on the notice of disclaimer, Government cannot dismiss the answers given to the queries raised by the bidders before the auction and it felt that the narrative of 2G operators as MVNO is quite unkind and grossly inaccurate. Tribunal refused to agree with the TRAI‟s speculations about the loss of revenue to the government, it felt that the gross revenue of the Government would also increase by permitting intra circle 3G roaming with complete and better utilization of 3G spectrums. By allowing the bilateral arrangement between the operators, it not only increases the gross revenue of provider and seeker but also increase the gross revenue of the Government by sharing a percentage in the gross revenue of the license holders. The Tribunal held that the penalty orders imposed by DOT are unsustainable and finally hold that the intra circle 3G roaming arrangement does not violate any UASL provisions and invalidated the orders and communications issued by DOT against the matter. It also clarified that the other operators can enter into the similar agreements/arrangements.

Conclusion - The Tribunal‟s order will be a boost for expansion of 3G services and the sharing of spectrum among the operators will promote the growth of Telecommunication in the country. With the clarity in the rules of operations and flexible mechanism, Telecom sector will attract more FDI‟s as recently Government of India allowed 100% FDI‟s in this sector. It can also help in generating the national revenue by sharing a percentage in gross revenue of Service providers. The intra circle 3G roaming arrangement between the operators will also lower the charges due to competitive market structure which would benefit the customers, thus this arrangement

not only beneficial to the operators and providers but also to the common man and the state.

________________________________

REGULATION ON SAR VALUE IN INDIA - By Karuna Sharma

SAR i.e. specific absorption rate is defined as the power absorbed per mass of body tissue

when exposed to a radio frequency (RF) electromagnetic field and has units of watts per kilogram (W/kg). It is an indication of the amount of radiation that is absorbed by a body whilst using a cellular phone, the higher the SAR rating the more radiation that is absorbed into the body.

All mobile devices emit certain amount of RF radiation when transmitting wireless signals. A mobile device‟s SAR rating is used to estimate the amount of RF radiation absorbed by a user‟s body when using the handset.

Various studies and reports have been published about the negative biological and health effects of this wireless radiation, even at exposure levels hundreds or thousands of times lower than current safety standards. The reported effects include cancer (especially brain tumors), impaired brain and nervous functions, sperm damages, behavioral problems in children, to list a few.

As a precautionary measure and concern to the health hazards from long-term exposure to wireless radiation, many governments adopted a precautionary approach on this issue and have



recommended measures to minimize wireless radiation exposure of their citizens.

The Indian government‟s new SAR regulation also came in a context of heightened international concerns on the health consequences of wireless radiation.

India has adopted the most stringent FCC norms for mobile handsets. It has come out with norms wherein all the new design of mobile handsets shall comply with the SAR values of 1.6 W/kg averaged over 1 gram of human tissue, which was made effective from 1st Sept. 2012.

As per the new norms, the mobile handsets with designs, which were compliant with 2.0 W/kg, averaged over 10 gram of human tissue, were allowed to continue and co-exist up until 31st August 2013 only. With effect from 1st Sept. 2013, only the mobile handsets with revised SAR value of 1.6 W/kg are permitted to be manufactured or imported in India.

Now it is mandatory for all mobile manufacturers to provide SAR value information on the mobile handsets just as IMEI (International Mobile Equipment Identity) is displayed on all handsets. This information on SAR values is required to be made available to the consumer at the point of sale of the handset. The manufacturers in India shall provide self-declaration of SAR value of the handset.

As per Indian Government norms, manufacturer‟s mobile handset booklet shall contain safety precautions and all cell phone handsets sold in the market in India shall comply with relevant standards and shall be available in hand free mode.

The Regulatory Authority shall be checking the mobile handset manufactured and sold in India or imported from other countries on random basis for compliance of SAR limit. SAR Test Laboratory is being set up in Telecom Engineering Centre for testing of SAR value of mobile handsets imported/ manufactured in India. Also more suitable amendments in the Indian Telegraph Rule under Indian Telegraph

Act 1985 are being enacted in support of ensuring compliance of new SAR values for handsets. The DoT is proposing to change the status of mobiles from consumer goods so that they can be included in the Telegraph Act and can be screened at local labs before going on sale. A Telecom Testing & Security Certification centre would be setup for finalizing the testing norm, while the Bureau of Indian Standard will formulate product standards for mobile devices.

Press Information Bureau, Government of India released guidelines for SAR value in India to be followed by all handset manufacturers with effect from 1st September 2012. India has joined the list of the select few countries in the world to have stringent EMF (Electromagnetic Frequency) Radiation Standards, established in the interest of public health, for mobile towers and mobile handsets.

The following are the highlights of the Standards:

Mobile Towers (EMF Radiation Norms)

EMF (Electromagnetic Frequency) exposure limit (Base Station Emissions) has been lowered to 1/10th of the existing ICNIRP exposure level, effective 1st Sept. 2012.

Telecom Enforcement Resource & Monitoring (TERM) Cells have been entrusted with the job of conducting audit on the self-certification furnished by the Service Providers. TERM Cell will carry out test audit of 10% of the BTS site on random basis and on all cases where there is a public complaint.

Telecom Engineering Centre (TEC) has revised the Test Procedure for measurement of EMF for verification of EMF compliance for BTS towers in accordance with new standards.

For non-compliance of EMF standards, a penalty of Rs. 5 lakhs is liable to be levied per BTS per Service Provider.

The BTS site details i.e. self-certification, registration with TERM Cell, test results etc. is proposed to be provided on DoT web site for General Public information.

National SAR standards from Telecom Engineering Centre are being finalized.



Measuring Instruments:

DoT is procuring EMF radiation measuring instruments for TERM cell units.

Outsourcing for EMF radiation measurement for BTS towers is also being considered. Guidelines to State Government

Department of Telecommunication has released Guidelines covering BTS Towers so that some consistency is evolved on setting up of BTS towers.

Guidelines for Consumers

Guidelines for consumers on Mobile handset usage have been issued and hosted on DoT Web site (http://www.gov.dot.in) for general public awareness.

a. Hold the cell phone away from body as much

as possible.

b. Use a headset (wired or Bluetooth) to keep

the handset away from your head.

c. Do not press the phone handset against your

head. Radio Frequency (RF) energy is

inversely proportional to the square of the

distance from the source -- being very close

increases energy absorption much more.

d. Use speaker mode on cell phone and limit

the length of mobile calls.

e. Use text as compared to voice wherever

possible.

f. When your phone is ON, do not carry it in

chest/breast or pants pocket. When a mobile

phone is ON, it automatically transmits at

high power every one or two minutes to

check (poll) the network.

A booklet addressing possible queries from mobile telecom users on radiation-related issues along with other informative inputs is also being placed on DoT website.

From 1st Sept, 2012, TEC revised the Test Procedure for measurement of EMF elaborating the methodology, calculations, measurements and report formats for verification of EMF compliance for BTS towers in accordance with new standards. This is applicable for all Mobile Service Providers and Term Cell Units to verify compliance.

Department of Telecom and Department of Science & Technology in collaboration with ICMR, MOEF & Min of Science & Technology is conducting a scientific study in India-specific context to derive norms based on credible scientific evidence taking into account diversity of Indian social context.

Department of Telecommunications, Ministry of Communications & IT has ensured that the new EMF Radiation standards are implemented through close co-ordination with the industry.

The guidelines formulated by the Government shall be providing the best possible Telecom services across the country without compromising on public safety and /human health.

________________________________



TRAI’S AD-CAP REGULATION- TO BE OR NOT TO BE by Anupam Alok

The Supreme Court on 6th December, 2013 ruled that the TDSAT has no power to interfere in the Telecom Regulatory Authority Authority‟s (TRAI) recommendations1. The result of the Supreme Court‟s ruling was clearly reflected in the decision of the Telecom Disputes Settlement Authority of India‟s(TDSAT) in the matter of 12 Minutes Advertising Cap contested between the Broadcaster‟s and TRAI where the TDSAT dismissed the case filed by News Broadcaster‟s Association (NBA) and other broadcasters.

TRAI notified its Standards of Quality of Service (Duration of Advertisements in Television Channels) Regulations (hereinafter referred to as the “Ad-cap Regulation”) in May 2012 with the primary objective of striking a balance between giving a consumer a good TV viewing experience, and protecting the commercial interests of broadcasters. After the Ad-cap Regulation was notified, the broadcasters throughout the country were supposed to decrease their ad time in a phased manner and were to adhere to the 12-minute cap starting 1stOctober, 2013. While the three big networks including Star, Zee and Viacom 18 which receive Subscription Revenues from their MSO‟s started following the diktat, while the smaller channels and media companies, which have to pay carriage fee to its MSO‟s for the continued and uninterrupted broadcast of their channels, fearing major losses in their business, appealed to sector tribunal TDSAT for relief on the following grounds:

1. That it was outside the jurisdiction of TRAI as it is akin to content regulation;

2. That rule 7 (11) of the Cable Television Networks Rules eclipses the power given to

1BSNL V/s. TRAI, SC, CA No. 5253/ 2013

TRAI through the notification dated 9th Jan 2004;

3. That it is against the fundamental right of freedom of speech and expression guaranteed under Article 19(1) (a) and (g) of the Constitution;

4. That it is contrary to the TRAI‟s earlier recommendations dated 1.10.2004, which stated that “there should not be any regulation, at present, on advertisements on both free to air and pay channels”];

5. That rather than regulating the advertisements, the focus should be on successful implementation of the digitization of the cable TV sector;

6. That any restriction on advertisements would have the impact of sharp increase in subscription charges;

7. That Limited availability of advertising time will imply jacking up of advertisement rates by many folds and this will be detrimental to the small and medium enterprises (SMEs);

8. That advertisement increases the consumption of goods and services which then drives the growth of employment and economic development.

The Tribunal however, (post-judgment of the Supreme Court in the matter of BSNL V/s. TRAI)said the matter does not fall under its jurisdiction and ruled:

“In light of the judgment of the Hon’ble Supreme

Court, the Tribunal does not have the

jurisdiction to entertain a challenge to the

regulations framed by TRAI under section 36 of

the TRAI Act. In this view the appeal is not

maintainable and dismissed.”

Pursuant to the Supreme Court‟s ruling followed by the TDSAT‟s dismissal the broadcasters chose to knock the doors of the High court of Delhi where they managed to obtain an interim



relief in the form of a stay in the imposition of the Regulations until the matter is decided by the High Court. The matter is still pending before the High Court of Delhi and up for final hearing on the 15th of July, 2014.

No matter what the forth coming judgment of Delhi High Court rules, for now it can be opined that an attempt to impose the Regulations was a bad move by TRAI, especially in light of the fact that implementation of Digital Addressable System is yet to be accomplished and the media companies are still paying huge carriage fee for the continued and uninterrupted broadcast of their Channels.

An attempt to regulate the duration of advertising may sound like a good idea to enhance viewing experience, but the same would have a major impact on the mid tier and smaller media companies, as Advertising is the one and only source of income for these companies. In fact, less advertising coupled with carriage fee for the broadcast of their channel could have a catastrophic effect on the smaller channels and media companies. A regulation of the duration of Advertising would not only lead to utmost chaos in the broadcasting industry, but also the smaller players in the market who would not be able to advertise their products due to the manifold increase in advertising costs and hence a violation of their rights under Article 19(1)(g) of the Constitution of India.

Thus, in the present state, the Ad-cap Regulation does not serve the very purpose for which it was notified. Even though it may enhance the TV viewing experience for the viewers, but it will remain far from protecting the interests of the broadcasters for whom advertising is the only source of revenue.

________________________________

NATIONAL NEWS

RAVI SHANKAR PRASAD, INDIA’S NEW MINISTER FOR LAW & JUSTICE,IT AND TELECOM – INITIAL KNOCKS:

Senior BJP leader and party spokesperson Ravi Shankar Prasad was named the new law & justice, telecom and IT portfolios minister in the Narendra Modi cabinet. Born on August 30, 1954, in Patna, Prasad, a lawyer and politician, was deputy leader of opposition in the Rajya Sabha. In the past, Prasad has held positions of minister of state in the ministry of coal and mines, law & justice and information & broadcasting in the previous Atal Bihari Vajpayee-led NDA government Talks about changes in Telecom Regulations Immediately after Ravi Shankar Prasad took the charge as Telecom minister. He said „Foreign investors should have faith in Indian Telecom Market after 100 % FDI has been allowed by UPA –II government. Prasad said, "FDI must be quickened into India under a transparent regime, which is assured and stable." Top telecom department bureaucrats gave a two-hour presentation on telecom issues earlier in the day. Only Vodafone has came out to own completely a local entity among foreign telecom investors. Other investors like Sistema and Telenor also own majority of stake in local JVs but have not raised their stakes further while NTT Docomo has decided to exit its JV with Tata Tele Services. India being among the fastest growing telecom market has failed to



attract global investors in recent auctions. “That the government will provide stable policies such that foreign investors don't face any uncertainty”, he said.

He sought details under litigation sector from DOT. The communications ministry will also adopt a "softer regulatory mechanism" and that "dialogue" will be used to sort out issues of litigation, Prasad said. He also said retrospective taxes should be avoided, as India needs foreign investments.

SAHARA GROUP ON THE WAY TO SC FOR SUBMITTING PROPERTY PAPERS DIRECTLY TO BANKS:

Sahara Group Chairman Subrata Roy has announced that the company will be moving the Supreme Court in order to submit property documents directly to banks instead of Securities Exchange Board of India (SEBI), which is the appropriate authority under the existing guidelines.

INDIA REDUCES COMPLIANCE ON PRIVATE COMPANIES:

Many of India's largest companies look set to escape audit compliance requirements as India relaxes its laws on audit of private companies.There won‟t now be any need for private companies to appoint a company secretary, subject themselves to mandatory secretarial audit or go through any pre-certification of e-forms This could have several unintended consequences.

Due to absence of pre-certification of e-forms, the chances of documents filed with the Registrar of Companies or other companies being incorrect or incomplete are higher in the absence of prior scrutiny by a company secretary.

Many big companies both in terms of turnover and capital are registered as private limited companies, so with the Company Secretary not

being compulsorily required in these big private companies it will become critical to see who will ensure the compliance of all these provisions. Private companies will escape requirements on compliance audits and the appointment of company secretaries. But, if they want to raise finance from banks, they may need to comply in order to be looked on favourably by lenders.

INTERNATIONAL NEWS

PATTON BOGGS ABANDONS CHEVRON LITIGATION AND PAYS $15M:

Ecuadorian villagers argued that Chevron had caused damage to their environment and liable to pay the damages but Chevron refused to pay the US$9.5b damages awarded in Ecuador which reduced from an original amount of US$19b - and had argued that Steven Donziger, co-counsel for the villagers alongside Patton Boggs, had fabricated evidence, coerced judges and otherwise distorted the legal process. Patton Boggs cited an important decision to settle i.e., the recent opinion of the United States District Court for the southern District of New York in the Chevron v. Donziger case includes a number of factual findings about matters which would have materially affected the firm‟s decision to become involved and stay involved as counsel here.

WHITE COLLAR CRIME CASES TO RESTART AFTER APPEAL RULING: The Court of Appeal in London overturned the decision of High court in a case in which it stopped a fraud trial involving the Financial Conduct Authority. As the Ministry of Justice cut the pay rates of legal aid by 30 percent none of the barristers came forward to represent the defendants on legal aid but the Court of Appeal in London held that the judiciary cannot intervene in disputes between the Ministry and Barristers on remuneration and unblocked the advancement of a case and given green signal to several such cases to move forward.



THE NEW CZECH PRIVATE LAW: The Czech government has significantly liberalised corporate law to make it more attractive and competitive. Based on these new principles and rules, all legal entities and their corporate bodies regulate in more detail about the operation of business corporations and cooperatives, including their organisational structure. Under this new legislation, a high prominence is put on corporate governance and it has brought a top degree of contractual freedom of shareholders and also ensures adequate protection of minority shareholders and third parties. In addition, the rules for liability of members of statutory and other corporate bodies have been specified in more details. Business corporations are obliged to revise their corporate documents and bring them in compliance with the new mandatory provisions of laws by 1 June 2014. This statutory requirement should secure that the internal life of corporations will adapt to the new legislation, and thus removing the conflict between the actual status and the situation described in the statutes, etc.

________________________________

Facts, Quotes and Maxims

IT’S TRUE, INDEED A LAW

In Vermont, women must obtain written permission from their husbands to wear false teeth.

In Kentucky, it is illegal to carry a concealed weapon more than six-feet long.

QUOTES

I learned law so well, the day I graduated I sued the college, won the case, and got my tuition back.

Fred Allen

It is the month of June The month of leaves and roses, When pleasant sights salute the eyes And pleasant scents the noses.

Nathaniel Parker Willis

LEGAL MAXIMS

Muilta exercitatione facilius quam regulis percipies: You will perceive many things more easily by experience than by rules.

Naturae vis maxima est : The force of nature is the greatest.

__________________________

CONSCIENTIA - Qui Prior Monthly journal

Qui Prior Law Associates. D-16/D, Hauz Khas,

New Delhi – 110016 Ph. +91 11 26537615

www.quiprior.com

We are very much interested in your valuable

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Disclaimer – The content in the newsletter is only for information purpose. Content is not appropriate for the purpose of making any legal decision nor does it provide any legal advise You should never delay seeking legal advice, disregard legal advice, or commence or discontinue any legal action because of information in the newsletter.

conscientia - qplspl · years and, therefore, it loses its efficacy as a deterrent to wrongdoing....

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