Libertatem Magazine - Issue 24 [Jan 2017]

MAST HEAD LIBERTATEM MAGAZINEEdition 24ISSN: 2395-4418www.libertatemmagazine.comFounders: Ankita Ranawat & Rahul Ranjan Content Creators: Saakshi Sharma, Vaibhav Sharma, Vaisakhi Muddana, Shubham Patel, Adit Kesarwani,Editor In-chief: Swarnabh Dutta Prateek Mago, Prithwish RoyAdvisory Editors: Dr. Howard Williamson, Dr. AhmadGhouri, Dr. Dabiru Patnaik, Dr. Rachana Choudhary, Asst. From the Courtroom: Piyush Agnihotri, Swarnalee Halder,Prof. Silky Mukherjee, Dr. Harmik Vaishnav, Asst. Prof. Shashank Mishra, Peri PratimaOwais Hasan Khan, Asst. Prof. Victor Nayak, Shhaurya Sah,Fr. Peter Ladis, Adv. Asim Pandya, Adv. Jayesh Patel Igniting Minds: Jaya Gurnani, Suyash Jain, Akanksha Sikri, Jane Maria TomySenior Editor: Smriti Brar Graphics Designer: Haba CristianEditorial Associate: Sarthak Sonwalkar, Nada Faruqi Partner Relations: Shristi MathurAssociate Editor: Rachana K, Aishwarya Dhakarey,Shreeyash Uday Lalit, Nimisha Srivastava, Apurva Taran,Pragalbhi Joshi, Pragya Dhoundiyal, Anushka Jain, RitishaMukherjee, Anchit Bhandari, Somya Stuti, Richa SankhlaDistributed By: Apple NewsStand, Google Play Newsstand, Amazon Kindle, Joomag Publishers, ReadWhere Newsstand,Magzter Newsstand2 Issue 24

CONTENT CONTENT 1620 0802 14A R T I C L E S COVER--STORYThe Remaking of Benami TATA’s Corporate Feud gets FROM THE COURTROOM...2602Transaction Act, 1988.................... 16Murkier............................................Judicial Act ivism or Russian Involvement in US06Judicial Overreach......................... 20President ial Elect ion...................08Triple Talaq....................................Promoters and sellers beware : EDITORIAL IGNITING MINDS..........2612wrongful......................................... THE TREND OF RISING RIGHT-WING14Rahul Gandhi Fiasco...................... 24PARTIES.......................................... Issue 24 3

The Remaking of BenamiTransaction Act, 1988by Shubhendra ChakraI n order to curb the accumulation of black money in Transactions (Prohibition) Amendment Act, 2016 was the country, Modi Government has taken a historic passed from both the houses of the parliament and came step by demonetizing the higher currency notes into effect from 1st November, 2016. It is quite interestingfrom the circulation. It is not the only step which has been to note that the parent act of 1988 had only 9 sectionstaken by the Government in this regard, as Benami whereas the amendment act has 71 sections which isTransaction Amendment Act, 2016 has also been passed actually 8 times more than the previous act.with effect from 1st November in order to cut the flow ofblack money from real estate market. The dual move taken The new amendment act was passed in order to curb theby the Government was only to make sure that the money infirmities in the act but the most pertinent things are theshould be in circulation and illegalize all form of cash appointment of Executing Authority, definition of Benamiaccumulation. In this thought process, I am not going to Property/Transaction, and the confiscation of thediscuss the demonetization issue, but it is actually the property. The 2016 act has defined ‘Benami property’ as‘Benami property’ which will become the center piece of any property which is the subject matter of a Benamithe paper. transaction and also includes the proceeds from such property. Benami Transaction has been defined underThe Benami transaction Act was introduced in the year Section 2(9) which defines it as “A transaction or an1988 by an ordinance which was later repealed through arrangement (a) where a property is transferred to, or isthe Benami Transactions (Prohibition) Act, 1988. The held by, a person, and the consideration for such propertypurpose of bringing such an act was to curb the Benami has been provided, or paid by, another person; and (b) thetransactions and matters related thereto. The act was property is held for the immediate or future benefit, directcriticized for the half-hearted effort as it did not provide for or indirect, of the person who has provided thethe specific provisions in regard to the confiscation of consideration, OR a transaction or an arrangement inproperty or an appellate authority or the procedure in respect of a property carried out or made in a fictitiousregards to the serving of notice etc. and all these name; OR a transaction or an arrangement in respect of ashortcomings made the entire act toothless and adjunct to property where the owner of the property is not aware of,act against the perpetrators. In order to act against the or, denies knowledge of, such ownership OR a transactionBenami transactions, the government had brought an or an arrangement in respect of a property where theamendment bill in the year 2011 but it was lapsed due to person providing the consideration is not traceable or isthe dissolution of the house in 2012. Later, The Benami fictitious.4 Issue 24

BENAMI TRANSACTION ACT, 1988Under the 1988 act, the property bought for the benefit of 7.Confiscated properties are to be managed andwife or unmarried daughter cannot fall under the purview disposed of by officers of the rank of Income-tax Officerof the act, but under the 2016 Amendment act, the who will be designated by the Central Government asadditional clauses have been made in order to enlarge the Administrators.scope of the definition. The act has exempted theproperties which are held in fiduciary capacity or by HUF Thirdly, the provisions of S. 24 require that the Initiatingor for the benefit of spouse/children or for the lineal Officer will initiate proceedings under the Act by issuing aascendants or descendants. The class of exemption notice to the person who is believed to be the benamidarprovided under the act is very wide enough to include and serving a copy thereof on the beneficial owner. Thealmost everyone in the definition and it looks like Initiating officer can also provisionally confiscate thegovernment is trying legalize the hoarding of Black Money property for a period of 90 days, if the officer thinks thatin the market by exempting a majority of population from the benamidar may try to dispose of the property. After theits ambit. The counter argument to this is that since the proceedings initiated by the initiating officer, theproperty can only be acquired from the known source of adjudicatory authority will give the opportunity to theIncome and therefore even if the definition has been concerned and will hear their side, if authority is notenlarged, it will not legitimize the hoarding of black money satisfied then it will pass an order for the confiscationas ultimately that person has to justify as to where he gets under Section 27 of the Act otherwise they will release thethe liquidity to purchase that property. property. If the benamidar is aggrieved by the order of the adjudicating authority, he or she can appeal before theThe second part is about the regularity mechanism which appellate authority established under the act. It isspecifically deals with the Benami Transactions/Property, pertinent to note that even the initiating officer canwhich was clearly absent in the parent act of 1988. Under challenge the order of the adjudicating authority beforethe Amendment Act, four authorities have been the appellate authority within 45 days from the date ofmentioned as Initiating officer, Approving Authority, order.Administrator and Adjudicating Authority so as to takeproper steps against the impugned property. Different All in all, the steps taken by the Government are quite boldroles have been specified to all the authorities and after and decisive but they are not meant to tackle the hoardingthe decision of the adjudicating authority, the decision will of the Black Money in the country. I am not sure about thebe binding and confiscation proceedings will be proceeded Demonetization move but the Amendment could be madethereafter. much stronger. If we see the amendment act in a subjective way, it has led to legalize the black money in theThe following procedure is proposed for determination real estate sector if a person is able to prove the ‘knownand related penal consequences in the case of a prohibited source of income’ which can be done quite easily with theBenami transaction:- help of a reputed Chartered Accountant. Secondly, giving a free hand to the initiating officer with regard to the 1.Proceedings for enquiring into an alleged initiation of the proceeding without giving a chance toBenami transaction are to be initiated by the Initiating other party is quite arbitrary. The Act is silent as how theOfficer; initiating officer will receive the officer and what steps he or she has to take after they receive the information? 2.The Initiating Officer will refer the case to the Thirdly, property will be confiscated by the order of theAdjudicating Authority set up under the proposed Bill; adjudicating authority under Section 27 of the Act but is it not against the principle that ‘one is considered innocent 3.The Adjudicating Authority, after providing an unless proven guilty’ because of the fact that there areopportunity of being heard to the alleged Benamidar, the three appeals left to the Benamidar while proven guilty bybeneficial owner, any interested party including a banking the adjudicating authority. Fourthly, whether it would becompany and any other person who makes a claim in feasible to suggest for a separate appellate authorityrespect of the property, will pass an order within one year, wherein there are more than half the courts vacant? Lastly,holding the property to be a Benami property or whether this Act would have a retrospective operationotherwise; from the date of the parent act i.e. 1988 or it will apply prospectively? Because if it is going to apply prospectively, 4.An appeal against the order of Adjudicating then what about the acts done between 1988 to 2016 andAuthority will lie with the Appellate Tribunal set up under if it applies retrospectively, then this very amendmentthe proposed Bill; would violate the settled principles of law. I am not sure whether this act will achieve the desired results but at 5.An appeal against the orders of the Appellate least this government is trying to do something againstTribunal shall lie with the jurisdictional High Court; black money in the country. 6.After the order of adjudicating authoritybecomes final, it shall confiscate the properties heldBenami; Issue 24 5

JUDICIAL ACTIVISM OR JUDICIAL OVERREACH Judicial Activism or Judicial Overreach by Shreyan AcharyaINTRODUCTION of the Indian Premier League, which was widely promoted, and brought the elite classes under one spectrum. TheThe game of the colonial rulers has made path-breaking flow of money was uncalculated, and this was the majorachievements in modern India. Yes, it is directed towards business opportunity in the field of sports. The stadiumsthe growing influence of cricket in India; the country lives flooded with the presence of spectators, big endorsementsand breathes cricket since times immemorial. The 2011 ICC were involved, young talents were promoted, but all thisCricket World Cup made a huge impact, and further glamour hid the conspiracy. The practices of spot-fixingboosted the popularity of the game. Cricket, unlike any started to be undertaken, allegations of money launderingother sport, has gained vast popularity in India, but it is were often raised. This led to the judicial activism tonot yet safe from the influence of money and politics. The reform the game. The Bihar Cricket Association filing theissue of political intervention in the sporting activities has case against the practice of spot-fixing was a majorhindered the growth of sports in the country, and has breakthrough. The absconding of Lalit Modi and variousmade it uncompetitive at the international level. allegations cleared the picture, and led to the constitution of the three member committee under the chairmanshipThe allegations of fixing, spot-fixing, match-fixing and of former Chief Justice of India, R. M. Lodha, famouslycorruption have made the youth of the country sceptical to known as the Lodha Committee.opt for it as a profession. The gentlemen’s sport has beencontaminated due to the ongoing corrupt and OVERVIEW OF THE RECOMMENDATIONSunscrupulous activities and influential people have used itas a means to find lucrative business opportunities. The The Hon’ble Supreme Court of India constituted thegrowing political influence has been challenged on various committee to provide recommendations for thespheres, but in the forefront, judicial activism challenged reformation of the game. The sole purpose of thethis political intervention. The story began with the advent6 Issue 24

JUDICIAL ACTIVISM OR JUDICIAL OVERREACHcommittee was to examine the issues of spot-fixing and the court. But, the Bench headed by Chief Justice T. S.other unscrupulous activities, and provide valuable Thakur, rejected the petition by stating that no errorrecommendations so that an efficient mechanism could be apparent was found in its judgment. The Board thereafterestablished to tackle the menace. The committee was welcomed majority of the recommendations, but disputedheaded by former CJI R. M. Lodha, along with two other upon some points such as One State One Vote, Cooling offmembers, Justice Ashok Bhan and R. V. Raveendran. The period for three years, age limit of 70 years etc. The mattercommittee conducted extensive research to ensure the was further heard, but the Court, adamant in its opinion,purity of the game, and laid down some warned the BCCI to “fall in line otherwise we will make yourecommendations. One of the prime recommendations fall in line”. The statement received mixed reactions. As thewas to reduce the political influence, and restructure the supporters of the judgment called it the determined andfunctioning of the BCCI. The Committee primarily independent judiciary, others stated it as judicialrecommended to bring the Board within the ambit of Right overreach. But, in the public opinion, the judiciary isto Information, to make it more citizen friendly, and the simply trying to bring out the clean image of the game. Theappointment of auditors to make the accounts of the BCCI attempt to revolutionise the game can often be related toknown to the general public. The Committee also stressed the ideas of the revolutionaries like ‘people talk aboutupon the establishment of One State One Vote, which change, but they are accustomed to the system, and if anywould bring the non-cricketingstates of the country in the change comes they start to tremble’.framework of the decision making, Such is the state of the present dayand would also lead to the system. The independence of thepromotion of the sport. game from political intervention was always talked about, but anThe major recommendation was attempt at the same is labelled asrelated to the menace of Spot- judicial overreach.fixing, and regulation of the affairsof the Indian Premier League. But the Apex Court seems to bePertaining to the first aspect, the determined and has not allowedCommittee emphasised upon the any delay. It has taken seriouspromulgation of the legislation to cognizance of the non-compliance.regulate such activities, and also The Lodha Panel alsoprovided a forward-looking recommendation to legalise recommended banks to stopbetting. With respect to the Indian Premier League, the disbursing funds to the Board and start sacking office-Committee recommended for the establishment of the bearers owing to continuous non-compliance. The ApexIndian Premier League Council, and separate the bodies to Court had warned of perjury and contempt proceedingsensure its independence. The Hon’ble Apex Court against Anurag Thakur for non-compliance of the order ofwholeheartedly welcomed the recommendations, as these the court. The Hon’ble Judge cautioned that any attemptwere also widely applauded by the public. The attempt to mislead the court and delay the process would bewas to rejuvenate the cricketing spirit in the country by considered contempt of court. The Hon’ble Judge furtherproviding it with the sanctity it earlier had. The stated that freedom does not mean to wilfully non-complyrecommendation changed the wind, and it was a step with the order of the court. But, the long-standing disputeforward to reform the game. But, this led to another took the drastic turn on Jan 2, 2017, when the Hon’blecontroversy between the political camps on one hand and Court finally took a step having far-reaching effect bythe judiciary on the other. Some considered it to be ordering the removal of Anurag Thakur for being defiantjudicial overreach. It was very evident that the decision of and stalling on the reforms recommended by the Panel.the Hon’ble Supreme Court of India to implement therecommendations of the Lodha Committee was not CONCLUSIONappreciated by the Board, and this led to the emergence ofa chain of events widening the gap between the Board and The issue has not been resolved yet, but the drastic andthe Court. bold steps of the Court have surely raised many eyebrows. The Court has presented its determined will and authority,BCCI V COURT and has clearly indicated that any obstruction to disobey the law of the land would not be tolerated and strictThe judgment of the Hon’ble Court was seen as a new measures will be taken. There are murmurs that if thedawn for cricket in India. But, the political spectrum Court is willing to interfere in the affairs of the Board, thenindulged into dilatory practices to delay the process. The the Court must regulate it by breaching the autonomy ofrichest board of the world didn’t want to lose the grip the Board. But, the actual fact is not about judicialupon the affairs, and filed review against the judgment of activism or judicial overreach, but the core crux lies upon the reformation of the game in a bid to uphold its sanctity. Issue 24 7

TRIPLE TALAQTriple Talaqby Shubham PatelINTRODUCTION When it comes to the conflict between personal laws and the modern concepts of rights, Triple talaq is theA healthy, stable and functional family is the most basic unfortunate crown jewel in the conflicts, where there haveand integral part of a well-functioning society; and healthy been several cases which are decided and are still pendingsocieties develop to create a healthy nation. In India where before various court in this regards. A petition questioningspirituality and air can be placed at almost analogous the constitutional validity of the triple talaq and halalapositions; religion, beliefs and the power to have a say in marriage among other things is pending before thereligious matters are very vital and sensitive issues. Hon’ble Supreme Court. A recent judgment in which the Hon’ble Allahabad High Court made certain observationsIndia is the most, and if not most then, probably one of the related to the status of triple talaq made its way in themost culturally diverse country in the world. While there is news.a lot to cherish about this diversity in India, it also raisescertain concerns when it comes to converge of equal PERSONAL LAWS ANDtreatment, fundamental rights and freedom of religion. For RIGHTS – INTERFACEa welfare and a progressive state guaranteeing basichuman right as well as ensuring freedom of religion can be There was a recent wave where several progressive anda tenacious task. What comes with this diversity is the forward looking judgments were given by various courts inresponsibility to ensure that the equilibrium between relation of personal laws which have gone redundant andrights and the right to profess religion is maintained. In by means of such judgments, rights of women wereIndia, most of the aspects related to religion are governed recognized in the areas which were specifically prohibitedby personal laws. We have a superfluity of personal laws by their respective personal laws.which are governed by Ancient texts and other primarysources. A ground for discrimination and differentiation The history of most of the religions show that dissolutionarises when the pedestal, at which women are placed, in of marriages is always unwanted and a process which isthese texts, is taken into consideration.8 Issue 24

TRIPLE TALAQgenerally sought to be avoided and it was with only slow MUSLIM LAWS – CONCEPT OF DIVORCEand gradual legislative intervention that separation isadopted and acknowledged as a concept. The Indian The word talaq is derived from Arabic and means ‘freeingsociety still perceives divorce or talaq as a social taboo, as or undoing the knot.’ Unlike other beliefs, in Muslimthere is a very slow reckoning with the fact that not all the Community dissolution of the marriage had a very liberalmarriages work, moreover with the fact that if they do not approach from the very onset of the religion. The religionwork people can move forward with individual lives emphasized on individual freedoms and provided for exitsinstead of trying to carry that non-working and from the marriages by means of talaq, to bring an end toburdensome relationship forward. painful relationships. This is majorly because of the reason that the marriages amongst Muslims are more of civilThe case which came in from of the Hon’ble Allahabad contracts in nature than a sacrament. Such marriages inHigh Court was a writ petition. Whether the challenge of legal essence remain a contract, but it can undoubtedly beunconstitutionality in respect of a personal law can be said that such a contact has spiritual and moral overtonessustained in the court of law is also a moot question. Prof. and undertones attached to it. The right to seek divorce isFaizan Mustafa puts it in the following way, a writ court can at the option of both male and female. Talaq is thoughdeclare a ‘law’ unconstitutional, but the question is kept as a matter of last resort when all the possiblewhether the Muslim Personal Law (which is without attempts of arbitration and conciliation between thelegislative interference) comes under the meaning of parties have came to an end and no possible remedyArticle 13 of the Constitution of India. Only a ‘law’ can be which can help the marriage sustain is available. However,challenged in a court of law, and the power of judicial the concept of triple talaq comes to be seen as a peculiarreview can be used if the ‘law’ is in contravention of and oppressive practice where men unilaterally enjoy thefundamental rights. Explicit abolition of untouchability right to divorce his wife without any chance ofunder Article 17 indicates that the framers of the reconciliation or arbitration.constitution intended to exclude personal laws from thedefinition and ambit ‘law’ under Article 13. [See More, The extremes to which this practice was taken to withProf. Faizan Mustafa, Live Law, Triple Talaq: advancement in information technology makes thisConstitutionality & Banning, 16/12/2016] practice even more horrific and gender-biased. Issue 24 9

TRIPLE TALAQOn the other hand, it is claimed that the pronouncement talaq unconstitutional,of triple talaq in one sitting should be deemed as one talaq says no personal lawand it was dismissed by the Prophet himself, and even the board is aboveHoly Qur’an does not permit it. [Mohammad Azeemullah, Constitution, 08/12/2016]The Wire, Islam Does Not Sanction Triple Talaq in OneSitting, 20/10/2016] According to a survey conducted by theTHE JUDGMENT AND AFTERMATH – Bharatiya Muslim MahilaA COMMENT Andolan (BMMA) 92.1% of the respondents to theThe Hon’ble Allahabad High Court in the case of Hina and survey voted in support ofAnother v. State of U.P and Ors., made certain invalidating the practice ofobservations. The factual matrix of the case was, the triple talaq. [Prabhash Kpetitioner was the second wife who sought protection Dutta, India Today, Triplefrom the constant harassment of the police as well as from talaq: What is behindthe mother of the first wife of her husband. Her husband, Allahabad High Courtalso one of the petitioners, had divorced his first wife just judgement, 08/12/2016].to marry another time, the divorce was given to marry oneother time. The court dismissed the petition and made TRIPLE TALAQ –certain remarks about the cruel and inappropriate nature INTERNATIONALof triple talaq. It also noted that the personal laws cannot PERSPECTIVEclaim supremacy over the rights granted by theconstitution although, at the same time, refrained from Several countriesrecording the findings in the judgment and left the throughout the world havequestions related to the validity of marriage and divorce very different set of lawsopen. with regard to triple talaq and other aspects ofNow the question is that whether without recording a marriage and divorcefinding should judge make such sweeping observations, related to Muslim Personalparticularly when the similar matter is pending before the Laws. In countries likeHon’ble Supreme Court for adjudication. [Prof. Faizan Turkey, Indonesia, Iraq,Mustafa, Live Law, Triple Divorce: Constitutionality & Iran and BangladeshBanning, 16/12/2016] unilateral divorce which gave an arbitrary power to the men are banned legallyThus, in essence the scope and meaning of the observation whereas in places like Egypt, Sudan, Jordan, Tunisia,of the court was radically different from what the media Morocco, Pakistan and Bangladesh the practice of tripleportrayed it to be. There was no judgment, as a judgment talaq has been banned.determines the rights and obligations of the parties. Moreover, women in several of these countries enjoy muchREACTIONS better rights in terms of marriages and divorce than in India, like in Turkey and Iran both male and female enjoyAfter the said judgment the media went frenzy depicting it similar rights for seeking divorce, and in Indonesia,in a way that the court has held that triple talaq is Malaysia and Brunei even second marriages are banned.unconstitutional. These deviations clearly are inklings towards the fact thatThe observation of the Court was both well received and the interpretation of Shariat Laws can be changed, andcriticized at equal fronts. The groups representing and they are not as static and constant as are claimed by some.demanding a more liberal and modern approach toreligion welcomed it and deemed it an important step CONCLUSIONwhereas the conservatives and All India Muslim PersonalLaw Board reacted by saying that talaq is a part of Sharia The recent uproar on the question of triple talaq poseslaw so it should not be interfered with. According to them various questions at the forefront. The first and foremostdivine Sharia laws regarding marriage, divorce and being the way it is ‘used’ or rather misused by the people,adaptation cannot be modified or altered by any person or the case present before the Hon’ble Allahabad High Courtauthority also they opposed the views of the government is undoubtedly a glaring illustration. The other, and stillin regards of triple talaq and Uniform Civil Code. [Ruchi significant questions are, firstly, the reactions from variousDua, India Today, Allahabad High Court calls triple corners of the society, and secondly the question is about10 Issue 24

TRIPLE TALAQthe way information is portrayed by the media to the and conservatives, one of which is always going to becommon masses, most of whom rely completely on the displeased, come what may.information provided in the newspapers or televisionshows. The final question which though is not in effect related to the present case, is of a great significance, as the mediaThe question to the first question seems convincingly has a very important role to play in the day to day life of aanswered through a catena of pronouncements from common man, these situations make it more clear thatvarious courts, all of which take into account the biased there is a need for media houses to first verify the degreenature of the institution of triple talaq. The Hon’ble of the claims they put forward, especially when they relateSupreme Court has expressed its concerns towards the to legal field.arbitrary nature as follows, “A divorce given unilaterally bythe husband is especially peculiar to Mahomedan law. In At last, while regulating fundamental rights and personalno other law has the husband got a unilateral right to laws, which often claim immunity as they come underdivorce his wife by a simple declaration”. At the same time Right to Religion, it should always be kept in mind that thethere is a large number of judgments which makes it clear hegemony of personal laws is not allowed to trample withthat an arbitrarily pronounced talaq would not be or supersede the fundamental rights, as expressed in theconsidered proper, and the proper method for talaq is that words of Dr. B.R. Ambedkar,“I personally do not understandfirstly a chance should be given to arbitration and why religion should be given this vast expansive jurisdictionreconciliation and when all such attempts fail then only so as to cover the whole of the life and to cover thetalaq would be effected. legislature from encroaching upon them. After all what are we having this Liberty for? We are having this liberty in orderThe second question seems to be pretty convincingly to reform our social system. We are having this Liberty toanswered with the fact that, there cannot be a uniform bring about a cessation in the inequalities, discriminationsreaction expected as the two extremes exist i.e. the liberals and other things which conflict with our fundamental rights.” Issue 24 11

Promoters and sellers beware: wrongful Representation and WarrantiesBharat Anand and Satish Padhi. Corporate Practice Group, breach of which gives rise to a claim for damages but not aKHAITAN & Co. right to reject the goods and treat the contract as repudiated. The said definition specifically applies to an acquisitionINTRODUCTION transaction where there is sale of shares. The distinction between representation and warranty has been surmised byRepresentation and warranties are intensely debated during the Madras High Court in All India General Insurance Co v. S Pnegotiation of M&A contracts. Serious consequences can arise Maheswari (“All India General Insurance”, AIR 1960 Mad 484)due to a poorly negotiated representation and warranties wherein the Court stated that, “Warranties are representationspackage. In the context of a typical M&A transaction, which are made the basis of the contract whereas arepresentations and warranties contain statements made by representation is not strictly speaking a part of the contract orthe seller as to the quality, condition, value or nature of the of the essence of it, but rather something preliminary and in thebusiness/ entity that the buyer is acquiring from the seller. nature of an inducement to it.”Furthermore, these representations and warranties aregenerally backed by the seller’s acknowledgment that the DOES THE SELLER HAVE A DUTYbuyer is entering into the transaction in reliance of such TO DISCLOSE?provisions. This ensures that a buyer can claim breach of theacquisition agreement and seek a remedy against the seller The explanation to Section 17 of the Indian Contract Act, 1872for its losses if the representations and warranties turn out to provides that mere silence is not fraud, unless there is a dutybe untrue. This buyer/seller dynamic raises several interesting to speak, or unless it is equivalent to speech. Therefore, therequestions. For example: is no general duty to disclose facts which are or might be equally within the means of knowledge of both parties. The •Is a duty cast upon the seller to disclose all material principle has been aptly stated by Slade J in Banquefacts to the buyer? Financiere de la Cite SA v. Westgate Insurance Co. Ltd ([1989] 2 All ER 952) wherein it has been observed that: “There are •Is there any difference between the consequence of countless cases in which one party to a contract has in thebreach of representation and breach of warranty? course of negotiations failed to disclose a fact known to him which the other party would have regarded as highly material, •What kind of losses can a buyer recover under if it had been revealed. However, the law leaves that otherIndian law? party without a remedy.” •Importantly, does due diligence of the target However, in transactions involving contracts uberrima fides orcompany dilute the representations and warranties made by where one party stands in a fiduciary relationship with thethe seller? other, there is a legal and equitable duty on the parties, not only to state whatever is stated, but also disclose the sameThis article focuses on answering a few of such questions and with utmost completeness. Other than that, there is nooutlines the approach taken by Indian Courts while obligation to disclose at all in transactions which do not fallinterpreting representations and warranties, thereby within the recognised class; as was held in Haji Ahmed Yarsuggesting some key negotiating strategies. Khan v. Abdul Gani Khan (AIR 1937 Nag 270).SETTING THE LEGAL FRAMEWORK DUE DILIGENCE BY BUYER: DOES IT DILUTE REPRESENTATIONS ANDThe terms representation and warranty are not defined in the WARRANTIES?Indian Contract Act, 1872 (“Contract Act”). However,through a series of case laws, the phrase “representation” has Interestingly, the Contract Act states that: “If consent wasbeen understood to be a statement made by way of a positive caused by misrepresentation or by silence, fraudulent withinaffirmation, based upon knowledge that the facts the meaning of Section 17, the contract, nevertheless, is notrepresented either do or will exist, or a mere declaration ofbelief or expectation that such facts do or will exist. Whereas,the Sale of Goods Act, 1930 defines a “warranty” as astipulation collateral to the main purpose of the contract, the12 Issue 24

PROMOTERS AND SELLERSvoidable, if the party whose consent was so caused had the LOSSES RECOVERABLE FOR BREACH OFmeans of discovering the truth with ordinary diligence”. REPRESENTATIONS AND WARRANTIES:In World Sport Group (India) Pvt. Ltd vs The Board of Control for The difference in remedies available in case of breach ofCricket in India (Arbitration Petition No. 978 of 2010 decided representations and warranties have been stated by theon 20-12-2010), the Bombay High Court observed that the Madras High Court in All India Insurance. The Court observedmere placing of a document on record of a company, society that: “In the case of a warranty materiality or immateriality ofor other such organisation does not lead to the conclusion the fact warranted signifies nothing. Its incorrectnessthat every officer thereof had the means of discovering the constitutes a defence to an action on the policy, even though ittruth merely by virtue of the document being on the records. be not material and be made in perfect good faith. But, in theIt was surmised that what constitutes ordinary diligence must case of a representation, the insurer can avoid the policy onlydepend on the facts of each case. by proving that the statement is false and fraudulent or that it was false and material to the risk. In other words, it is only aIn Infiniteland Ltd. v. Artisan Contracting Ltd (2005 EWCA Civ material misrepresentation that can avoid a policy if the truth791) the parties had entered into a share sale agreement for of the facts contained in the representations be not warrantedthe purchase of three group companies of the seller. It was by the policy.”alleged that the seller has overstated the profits of one of thecompanies which exaggerated the payment consideration As per Section 19 of the Contract Act, the contract is voidableunder the agreement. Due diligence was carried out on behalf at the option of the party who was induced byof the purchaser by a chartered accountant. Clause 7.4 of the misrepresentation. Normally, there are two remediestransaction document provided that “the purchaser’s rights in available to a party one being to elect to rescind the contract;respect of breach of warranty should not be affected by any the other to seek enforcement of representation, and insistinvestigation made by it or on its behalf into the affairs of any upon being placed in the same position as if the contractgroup company (except to the extent that such investigation were performed.gives the purchaser actual knowledge of the relevant facts orcircumstances)”. The Court held that the due diligence carried In a claim for damage, the contract is left intact, and the suitout by the chartered accountant gave the purchaser actual is to enforce it and substitute monetary damages forknowledge of the misrepresentation, which was outside the performance whereas in a suit for rescission, the object is topurview of Clause 7.4, and hence the warranties cannot be avoid performance of the contract. Therefore, any orderconsidered to have been breached. Before the decision in made on rescission has its object in restoration of the partiesInfiniteland, it was widely acknowledged that a seller was to their original position; the idea being restitution inrequired to provide warranties about the company whose integrum and the parties to be restored to status quo ante.shares were being sold, any disclosures that he made toqualify those warranties had to be sufficiently clear and In rescinding a contract, the courts act on the principle that,detailed to enable the potential breach of warranty to the as the transaction ought never to have been made, theattention of the purchaser, as was laid down in Levison v parties are to be placed, as far as possible, in a situation inFarin, [(1978) 2 All ER 1149] and Daniel Reeds Ltd v EM-ESS which they would have stood, if there had never been anyChemists Ltd, [(1995) CLC 1405]. such transaction. The broad principle has been laid down in numerous case laws as being: “No man can at once treat theFurther, in New Hearts Ltd v. Cosmopolitan Investments Ltd contract as avoided by him, so as to resume the property which[(1997) 2 BCLC 249], the share purchase agreement he has parted with under it, and at the same time keep theincorporated a clause which stated that: “It is hereby agreed money or other advantages which he has obtained under it.” Aand acknowledged by the parties that the Warranties (. . .) are similar principle has been incorporated under Section 30 andgiven by the Vendor subject to matters fairly disclosed (with Section 40 of the Specific Relief Act, 1963.sufficient details to identify the nature and scope of the matterdisclosed) in the Disclosure Letter in respect of which matters While normally under a claim made due to wrongfulthe Vendor shall have no liability to the Purchaser.” It was held inducement through misrepresentation, the courts havethat merely providing documents that might bring the awarded damages which are merely restitutory in nature butpurchaser’s attention to a matter was insufficient and that in instances where the wrongful representation and warrantythe particular breach must be expressly brought to the is linked to the performance of a contract, the court mayattention of the purchaser. award compensation as well relying upon Section 75 of the Contract Act which permits a party rightfully rescinding aGiven the above, regardless of whether extensive due contract to compensation for any damage which he hasdiligence has been undertaken by a buyer, there is sustained through the non-fulfilment of the contract. Whilerecognition that matters outside the disclosure letter may awarding the compensation, courts apply the principles laidsometimes well weaken the buyer’s remedies under the down in Section 73 of the Contract Act which permits a partyContract Act. to claim for direct and consequential losses sustained during the performance of the contract. Therefore, promoters and sellers have to be very careful before making any representations and warranties as they may be liable for compensation in addition to damages which are merely restitutory in nature. Issue 24 13

MAST HEADRahul Gandhi FiascoThe Darker Side of Democracy by Shubhendra ChakraT he incident of 1st and 2nd November, 2016 In this scenario, it is quite important to define as to what had marked the unprecedented chain of the term ‘arrest’ means because Supreme Court in the case events which led to the arrest of MPs and of Union of India v. Padam Narain Aggarwal [(2008) 13 SCC even the Chief Minister and Deputy Chief 305] remarked that the term “arrest” has neither been defined in the Code of Criminal Procedure, 1973 nor in theMinister of Delhi. It has not been seen in the history of Penal Code, 1860 nor in any other enactment dealing with offences, so does that vacuum give the power to arrest andIndian Politics that a leader be arrested or detained detain anyone without the procedural safeguards?without the due process of law. The condition became The word “arrest” is derived from the French word “arrater” meaning “to stop or stay”. It signifies a restrainteven worse as the family members of the deceased (Ram of a person. “Arrest” is thus a restraint of a man's person, obliging him to be obedient to law. “Arrest” then may beKishan Grewal) were also detained and beaten but the defined as “the execution of the command of a court of law or of a duly authorized officer”. So if we look into thequestion needed to be asked is: why did all this happen? present scenario regarding the detention/arrest of the Rahul Gandhi and others, it can very well be said that itWas there a threat to National Security, or was there a was the execution of the command of the senior police official who authorized to restrain them from entering andthreat to the Public order and tranquility? meeting the family members of the deceased.Before we proceed to the legal aspect of the arrest or Under the Law of the Land, The Arrest of a person can bedetention, it is pertinent to know the factual aspect as to done according to the Code of Criminal Procedure, 1973what led to this situation? On the afternoon of 1st whereby Section 41 empowers a police officer to arrest anyNovember, 2016, an ex-serviceman Ram Kishan Grewal person without warrant. Section 42 deals with the powerwas protesting against the non-implementation of One of a police officer to arrest any person who in the presenceRank One Pension Scheme and demanded to meet the of such police officer has committed or has been accusedDefense Minister Mr. Manohar Parrikar in order to present of committing a non-cognizable offence and refuses to givehis case regarding the uniform implementation of the his name and residence or gives a name or residencescheme. In order to protest against the non-availability of which such officer has reason to believe to be false.minister, he consumed salfas tablet and allegedly Section 43 enables a private person to arrest any personcommitted suicide. The condition deteriorated after all the who in his presence commits a non-cognizable offence, orleaders like Rahul Gandhi, Arvind Kejriwal, Manish Sisodia is a proclaimed offender. Section 44 deals with cases ofetc. were detained while they were trying to meet the arrest by a Magistrate. Section 46 lays down the manner offamily members of the deceased outside Ram Manohar arrest.Lohia Hospital. All the leaders were subsequently releasedbut why were they detained in the very first place? In the case of Joginder Kumar v. State of U.P., [(1994) 4 SCC 260] the Court stated that no arrest can be made becauseIn our Constitutional Democracy, no one can be detained it is lawful for the police officer to do so. The existence ofor arrest without the due process and procedureestablished by law which is incorporated under Article21and 22 of the constitution and as well under theprovisions of the Code of Criminal Procedure after thelandmark judgment of D K Basu v. State of West Bengal. Itis pertinent to note that our country is not a police stateand there is always a system of checks and balances onthe three organs of the state.14 Issue 24

RAHUL GANDHI FIASCOthe power to arrest is one thing. The justification for the when the arrested/detained person isexercise of it is quite another. The police officer must be transferred from one place ofable to justify the arrest apart from his power to do so. detention to another.Arrest and detention in police lock-up of a person cancause incalculable harm to the reputation and self-esteem 3.Such intimation should also beof a person. It would be prudent for a police officer in the sent when additional charges thaninterest of protection of the constitutional rights of a those already existing are leveledcitizen and perhaps in his own interest that no arrest against the arrested/detained Member.should be made without a reasonable satisfaction reachedafter some investigation as to the genuineness and bona 4.Such intimation should also befides of a complaint and a reasonable belief both as to the given when nature of the custodyperson's complicity and even so as to the need to effect changes i.e. detention which may bearrest. Denying a person his liberty is a serious matter. lead to subsequent arrest or custody change between police remand andIn the present situation, all the detainees were holding the judicial remand.constitutional office and their duty towards the citizens ismuch higher than any ordinary citizen. The law provides 5.Similarly intimation aboutfor the procedural safeguards regarding the conviction and release has to be givenarrest/detention of the MPs, whereby arrest of the by the concerned authority in aconstitutional elective has to be done according to a set prescribed format.procedure and arresting them without the due process oflaw is the violation of the constitutional rights of the The arrest or detention by the authorities has to bedetainees. According to rule 229 of the Rules of Procedure intimated to the speaker of the house by way of post whichand Conduct of Business in Lok Sabha; should contain the charge against the accused, time ofimmediate intimation regarding arrest, arrest, place of detention and other factors which led todetention, conviction or release on bail of the arrest of the M.P. The report should also be given to thea member of the Lok Sabha is required. Secretary, Ministry of Home Affairs and to a range deputyWhen a member is arrested or after commissioner of police with a copy to the assistantconviction, released on bail pending an inspector general of police.appeal or otherwise released, such factshall be intimated to the Speaker by the All in all, the events of the November 1st and 2nd were theauthority concerned in the appropriate dark days in the constitutional democracy, not becauseform. As per the standing order no. 153 of that the Rahul Gandhi or the Chief Minister of Delhi were2013, the following guidelines were given arrested but because of the arbitrary and mala fide arrestwith regard to the arrest and detention of and detention of the accused against the principles of thethe Member of Parliament. Constitution. India, being the largest democracy, cannot act in contravention of the settled principles of law and 1.Such intimation should contain violate the fundamental rights of anyone without followingdetailed grounds for arrest/detention. the due process. It is also that, these events showed us the grim face of reality as India being an elected Democracy 2.Intimation should also be given still can, very well, inhibit the autocratic side of the Governance without changing the robe of democracy. Issue 24 15

COVER STORYTATA’s Corporate The Battle for the control of the TATA Group of Companies just got murkier with the tussle between the stalwartFeud gets Ratan Tata and evicted Chairman Cyrus Mistry having entered the third month. The preceding events saw the division between the companies in favour of and opposing Mistry’s candidature become wider. While most of the enterprises in the Group like Tata Steel have backed the ouster of Mistry; others like Indian Hotel Company and Tata Chemicals have backed his being at the helm of affairs. The quintessential aspect of the corporate scuffle will be the decision taken at the Extraordinary General Meetings (EGMs) scheduled inCMurkiOer VERbyVaibhavSharma16 Issue 24

COVER STORY TATA SONS ACCUSED MISTRY OF WEAKENING GROUP STRUCTURE The feud took an ugly turn when both the groups (Tata Sons Management and Cyrus Mistry) were engaged in an unceremonious war of words. On 11th December, the Tata Sons contended that Cyrus Mistry had weakened the management structure of the firm. It also accused Mistry of misleading the selection committee which was setup for choosing the Chairman in the year 2011. He was also charged with retracting on his promise of distancing himself from the Shapporji Group of Companies, thereby raising the doubts of conflict of interests. Mistry is also blamed for concentrating all power in his hands by systematically trying to reduce the representation of the Tata Sons in the executive boards of the Tata Group of Companies. It pointed out that Mistry had in 2015 changed the Governance Guidelines Framework of the Group. As per the amended Guidelines, an employee must, upon his resignation from the Tata Sons quit from the non- executive membership of other Tata firms as well. It thus, contended that in pursuance of the above norm Mistry must himself quit from the post of Director of the Tata firm voluntarily. In an unpreceded instance of mudslinging, Mistry retaliated by saying the conduct of Ratan Tata had led to the erosion of the core values ofthe month of December. It is set to Securities and Exchange Board of the Tata Group. While accusing Ratanadversely impact the TATA Sons’ India (SEBI) asked the stock markets Tata’s actions of maligning Tata Sons’image as being India’s most trusted to write to the Tata Group of reputation, he said that theconglomerate. Companies and peruse the allegations against him of power transactions for want of non- concentration were baseless. He evenALLEGATIONS OF compliance with the listing contested that the management of Tata Sons had not been able to regulations of the Board. It directed furnish any reasonable cause for hisCORPORATE GOVERNANCE the audit panel of the Tata Sons to conduct an impartial probe in this ouster even after seven weeks from matter on 1st December. It is the 24th October decision. pertinent to note that serious claims made by Mistry as regards the MISTRY REMOVED FROM involvement of Corporate Governance TCS’S BOARD departures have adversely affected the largely angelic image of the Tata The streak of the removal of Cyrus Sons, hitherto unheard of being Mistry from the Board of Directors of associated with such ignoble the Tata firms continued with him corporate misfeasance.The former Chairman of the Tata Sonssent an email to the board of thecompany and alleged fraudulenttransactions on the part of theprevious Chairman Ratan Tata. Heaccused Tata of unethical practicesand conflict of interest during his stintas the Chairman. In pursuance of theserious allegations of flouting of theSTORYCorporateGovernancenorms, Issue 24 17

COVER STORY removed first from the Boards of Tata Steel and Tata Motors, which was succeeded by his departure from being a Director of Tata Chemicals on 24th December. The ousted Director is expected to take legal recourse for seeking justice from the courts. MISTRY INITIATED LEGAL ACTION AGAINST TATA SONSbeing unseated from his post of few supporters of Cyrus Mistry who The former Chairman of Tata Sons,Director of Tata Industries on 12th had come at loggerheads with the Cyrus Mistry on 19th DecemberDecember. It is important to note that management of Tata Sons since the surprised everyone by announcing hisprior to him being shown the door at removal of Mistry. Mr. Wadia filed the resignation from the Boards of TataTata Industries, he was also the said suit due the notice issued by the Motors, India Hotel Company, Tatachairman of the company. He also Tatas to remove him from the Power and Tata Chemicals. He hadceases to be the chairman as the Directorship of the Tata Group been in the recent past involved in amajority at the Extraordinary General companies. Wadia who was been on fierce tussle with the management ofMeeting favoured his removal. It was the Board of Tata Steel, Tata Motors Tata Sons over his being removedfollowed by Mistry being evicted from and Tata Chemicals till 24th December from the Directorship of the TataDirectorship of Tata Consultancy took the notices to be damaging his Group of Companies. He said that heServices (TCS). The expulsion of Mistry reputation. He also stated that the had quit voluntarily in the bestfrom the Board of TCS was an easy allegations levied against him by the interests of the companies, but wouldmanoeuvre for the Tata management Tata Sons were unsubstantial, false, continue his quest for justice. He then,as the Tata Sons owns a whopping motivated and defamatory in nature. on 20th December filed a suit in the73.26% stake in the company. It also He said that, he being an independent National Company Law Tribunalsecured a major fillip for the Tata director, had the right to raise the (NCLT) against the Tata Sons allegingmanagement as the question of TCS questions against the management oppression and mismanagement. HeDirectorship was vital for because the companies have been said that he had decided to shift gearsstrengthening Mistry’s claim of his recording substantial losses. In the and take legal recourse for upholdingremoval from Tata Sons’ course of a fortnight, Wadia was the virtues of rule of law and equity.Chairmanship The Tata Sons responded that it hadbeing unjust. maintained the highest standards of corporate governance in all itsWADIA FILEDDEFAMATIONSUIT AGAINSTTATA SONSThe corporatebattle got evenmore complexwhen Nusli Wadia,the Chairman ofthe Wadia Groupfiled a Rs.3,000crores defamationsuit against theTata Sons. Wadiahas been one of the18 Issue 24

COVER STORY consent of the management. Mistry responded that the notice was a mere request by the Tata Sons and he would respond only in the court of law. WHAT HAPPENS IN 2017?transactions and termed the outcome rules. It accused that Mistry The corporate battle between theas unfortunate. On 21st December, compromised the secrecy of the management of Tata Sons had badlyMistry filed a plea for interim relief company documents by making the affected the reputation of the Tatabefore the NCLT for restraining Ratan sensitive data public pertaining to Group. The feud had seen the level ofTata, the present Chairman of Tata board meetings and financial slugfest to hit an ebb when theSons from attending meetings of the information. The legal notice served management of Tata Sons and MistryTata companies. He also sought that by Tata Sons alleged that Mistry had were locked in a filthy war of wordsthe Tata Sons be restrained from deliberately attached the vital and cross allegations of corporateremoving Cyrus Mistry from the confidential information of the governance violations. It was followedDirectorship of the companies. He conglomerate to his petition by Nusli Wadia slapping a defamationprayed before the Tribunal for submitted to the National Company suit against Tata Sons for removingdirecting the Tata Sons not to issue Law Tribunal. It contended that Mistry him from the post of Director of theany securities which resulted in acted in complete violation of the companies. The former Chairman,adversely affecting the paid up capital confidentiality undertaking to the Cyrus Mistry also took legal recourseof the petitioner. The Tribunal Tata Sons and had infringed the Tata and filed a petition before thehowever, refused to hear the plea and code of conduct. The Tata Sons also National Company Law Tribunalgave time to Tata Sons to file its reply asked Mistry to return all the accusing Tata Sons of oppression andto the petition. classified papers in his possession mismanagement. Ratan Tata had on relating to the company. In its legal 24th December termed the legal suitTATA SONS SUED MISTRY notice dated 29th December, Tata as a move to tarnish his personalFOR BREACH OF Sons demanded Mistry to sign an reputation and that of the Group asCONFIDENTIALITY undertaking within 48 hours that he well. He also thanked the will not disclose any sensitive shareholders for their gratitude andThe Boardroom drama took a drastic information of the company in the continuous support to the Group. Inturn when on 27th December, the Tata future. The notice alleged that Mistry response, Tata Sons gave a legalSons sued its former Chairman Cyrus had wrongfully and dishonestly taken notice to Mistry to not disclose theMistry of breach of confidentiality the sensitive information out of the confidential information of the company premises without the company and return the documents in his possession. On 30th December Ratan Tata acknowledged the prodigious support of the employees of the Tata Group and called the Boardroom tussle to be a wilful and well-orchestrated attempt to subvert the core values of Tata Group. The outcomes of the legal suits filed by Mistry, Wadia and Tata Sons would take time to fructify, but the imbroglio has definitely dented the aura of trust and holiness associated with the Tata Group. It will be in the best interests of one of India’s oldest and most trusted conglomerates that the differences between the top brass are amicably settled rather than pursuing the current legal recourse, the outcome of which is bound to get filthier and ignoble. Issue 24 19

COVER STORYRussian Involvement INTRODUCTIONin US Presidential Hillary Clinton who appeared to be an experienced politician and Mr. Donald Trump, who is popular for his rhetoric Elections: speeches, sometimes appearing to be crude and contradictory talked about totally different ideas in determining the role of America in international jurisdiction. As Clinton is having a liberal approach in maintaining international relations, Trump had “First America” approach. The CIA in a secret assessment had stated that the Russian were involved in 2016 Presidential Elections, helping Mr. Trump win. [Secret CIA Assessment says, Russia was trying to help Trump An overview with regard to key Policy ChangesCOVERbyAditKesarwani20 Issue 24

COVER STORY hit list of the intelligence agencies’ radar. Politicians of both the parties have expressed their strong disapproval of the U.S. adversary, where Mr. Trump had bluntly rejected such claims that Russia was involved in such an action for their benefit, and looking at Clinton, she contended that Trump was encouraging Russia. But on the other side, many of the republicans have accepted the intelligence and law official’s claims relating to this incident. Both the parties have claimed for an investigation into the said incident, and the letter had been signed by the top officials of the nation [Russian hacking and the 2016 election: What you need to know, CNN] OVERVIEW OF THE POLICY CHANGES One thing was pretty much clear from the campaign of the Republican and Democrats, that the next President would directly or indirectly impact the countries and their economies which have trade relations with the U.S. By the newly developed economic relations and ties, it is very much predicable that relations between India and the U.S. will be less affected as compared to China and Russia. Trade with China and Russia would be drastically affected by the appointment of the new President.win White House, Washington Post]. RUSSIAN INVOLVEMENT IN Mr. Trump’s assertion is that U.S. hadThe US government earlier in October THE U.S. PRESIDENTIAL entered into horrible tradepublicly announced the involvement ELECTIONS agreements with various nations,of Russia in hacking the Democratic especially China. [U.S. elections – Impact on India, China and Russia, Huffington Post]. Moreover, he also asserts that either he will re-negotiate the terms of NAFTA or will break it. Till now, no such policies have been declared for India in the due course. Quoting several World Bank reports and analysis, he said that India will be the fastest growing economy in the next three to five years surpassing China, and therefore there is no need to have improved trade agreements with India.National Committee’s e-mails. This CIA allegations were based on its mostresulted in public release of recent analysis performed by thethousands of e-mails, which included intelligence on the hacking, statingdamaging revelations about the that the Russian hackers breachedDemocratic Party including the HillaryGOP individuals and organizationsClinton campaign, the party’s before the elections. There were also allegations that some of the entitiesSTORYnominee. were connected to the Russian government spreading fake news about Clinton. Investigators also found out digital footprints of the individuals having relations with the Russian government, who were on the Issue 24 21

COVER STORYAs far as India is being concerned, it is Billion which is being exported to the whom it could negotiate it further.said that India’s remarkable growth U.S. Furthermore, Trump had strongrate is based on various factors. views on immigration, i.e. the grant of As it was pointed out in some ofNumerous jobs have been created H-1B visas, which is very important for Trump’s speeches maintainingand many of the corporations are the Indian software market as our friendly relations with Russia, onehaving their hiring plans. Also, there highly talented employees are being reason might be for reducinghad been substantial increase in the hired by the U.S. companies. Many of international commitments relatingsalary in government jobs; the the big I.T. corporations send their to US-NATO allies. He has alwaystechnical industry is attracting more employees on temporary basis to the challenged the validity of such alliesforeign investments in new products, U.S. for some projects on the H-1B and got to the extent of saying thatmaking the service industry more visas, which Trump is planning to many of the allies does not deserve toaccessible. scrap off. Eventually we can say that be a part of it. Russia has an interest scrapping of H-1B visa is a very big in this breakdown in that way that itTrump’s election will also hit India, as step and there is a strong possibility will regain its power and influencehe has expressly pointed out that they of this, or a hike in fees of such type of over the European countries. Suchare outsourcing work to Indians, while visas can also be presumed. type of step would be heavilythe U.S. has a high unemployment criticized on the internationalratio. He proposed 15% tax on Russia is another key player for the platform by the European countries ascompanies who outsource their work U.S. as Americans and European well as in the USA, in the sense that inin other countries and 20% tax for sanctions are making it worse for the maintaining good terms with Russia,importing goods and services. One of country to sustain, and their military USA surrendered it’s future.the major area of concern for India, is involvement is an important concernthat our software industry is over their economy. As Russia wants Moreover, it has been said that Trumpdisproportionately dependent upon to free itself of all the sanctions, and would like to re-establish the entirethe U.S. exports. Currently India’s resolve the economy problem, it is in government contracts with othersoftware services accounts for USD 82 dire need of a U.S. president, with countries including military establishment between the two22 Issue 24

countries. It has also been predicted in Japan and South Korea. The newly involves grave concern of both thethat U.S. will try to have more elected president would also cut countries i.e. Russia and U.S. Barrackextensive cooperation with Russia in down the financial aid provided to the Obama in such regard, retaliating onSyria, in curbing out the ISIS and all U.S. allies in the Middle Eastern the move of Russia involving into theirother such groups. countries. Presidential elections said that it is something to investigate rather thanAmong other major probable changes Trump also cleared his intention for merely thinking that whether it which have been intensifying the bilateral affected or not. presumed after the communications with Moscow as it Trump’s victory may lead to ease out the sanctions After assuming the White House from regarding the change which were introduced by Russia after 20 January 2017, Trump seems to in foreign policy, is annexing Crimea and aggression plan a quick play on implementing his the one regarding the against Ukraine. campaign promises, which includes a implementation of reduction of U.S. engagement with the slogan “America In other areas, Trump had shown other countries and withdrawal from First” The approach serious change in the U.S. policy. support for free trade. It may also be he overviewed during During his campaign, he was highly expected that the new president will the election critical of actions to mitigate climate be seen as a very difficult partner to campaign was of the change and he was of the view of negotiate on terms of common point nature of reducing reviewing the climate change policy. It and that less U.S. engagement in international tension is expected that Trump and his solving global problems will adversely and of looking after administration will try to undermine affect international relations. It also their country i.e. the the Paris climate agreement, which poses a risk that Russia will fill the U.S. involvement in would weaken the relationship place left after a U.S. withdrawal, as tackling the global between the EU and the U.S., and with he is in desperate need of removing problems and helping developing countries, including the the sanctions being imposed and other nations in least-developed countries most wants to regain its power and regards to their vulnerable to climate change. The influence amongst the European economic, political most radical potential step would be nations. It is worthy to note the risk and security matters. if the U.S. were to withdraw from the associated while formulating the There is a strong group of signatories of the agreement, team of administration. That may be possibility of which is possible in November 2019, the moment when other countries reduction of the U.S. three years after its entry into force. test the assertiveness of the new U.S. defence involvement government and its willingness to in the world at large CONCLUSIONS take action. In short, Trump’s win is and we may very more likely bring risk and uncertainty soon witness a Despite the prevailing contentions, in the international forum as well as in reduction in the the allegations made, proved, the U.S.! military involvement disproved, it is a matter which Issue 24 23

THE TREND OF A senior friend from college who is nowRISING staying in Australia narrated a story aRIGHT-WING couple of days back that evoked a fieryPARTIES quest in me that refuses to die. She is aCREED OF visibly Muslim woman who wears the headscarf. That day'PROTECTIONISM'VIS-À-VIS RELIGIOUS as she was commuting on Sydney trains after work, aBIGOTRY middle-aged man sat behind her and started saying Jesus'by NADA ZAIM FARUQI name aloud and she in her heart said, \"Peace be upon24 Issue 24 him\" (this is how Muslims address the Prophets) until his chanting became uncomfortable. As she ignored him and spoke to her father back home she realized that he was mimicking her. She hung up the call and ignored him which was followed by him hurling the choicest of abuses at her like, \"You are a terrorist\", \"Bloody Muslim\", etc. The rest, she said, she couldn't reproduce. As much as stories like this one reflect the sheer sense of \"individualism\" in the onlookers on whose watch people are harassed without them batting an eyelid, they also seem to spit right in the faces of those minorities that are \"the other\" to make them realize that they do not matter. If this was not bizarre enough, there are also people out there, well-exposed and fairly well-read included, that completely write off such incidents as \"media creation,\"

EDITORIAL\"artificial hype\", etc. Their answer to the ongoing insanity happened to be a billionaire showman with a highlyis: log out and take a deep breath. In this age of tainted reputation seemed to be looking for a good timeinformation which hit a new low in 2016, with Brexit and on the political stage before bowing out with a hurrah. TheDonald Trump rising to power in the United States of news media laughed at, and ridiculed, him for yet anotherAmerica which was preceded by the rise of far-right in of his cheap publicity stunts… But looking back with theother nation-states such as India itself; that has also been benefit of hindsight, the reality television buffoon wasn'ttermed by the Oxford Dictionary as \"post-truth\", the clear playing pranks but, in actual fact, playing on the sensitivelines of distinction between the oppressor and the chords of a racist America.\" Speaking of the role of racismoppressed, victim and the perpetrator, ruler and the and religious bigotry, he writes: \"But racism and religioussubject, seem to have blurred. In this context, how does bigotry may be surprise news only to those with little or noone understand the rise of right-wing parties across knowledge of the people, the so-called pioneers, who hadnations? Where exactly did those cracks lie in the previous initially settled the New World. Those who came fromparties' rule that led the intellectually paralyzed ones to Europe in the 17th century to settle in the new land,take over the reins of nation-states? Frustration arising out claimed it in the name of God. The slogan was that it hadof the fear of losing one's identity coupled with deep- been given to them to build a 'New Jerusalem' a 'shiningseated anger; was a potent mix in this rather recurring city on the hill' that would be the beginning of a new era ofpattern of right-wingers taking over. Religion, amidst all Christian domination. So inspired by their dogmaticthis, plays the role that it is least supposed to do: religious beliefs were those early settlers that they did notcapitalizing on public fear. Karamatullah K. Ghauri in his call themselves immigrants or settlers but \"pilgrims.\"article \"Fascism Knocking at America's Door\" published in Endowed with their God-given sanction, the 'pilgrims'a fortnightly The Milli Gazette in its issue of 1-15 December, slaughtered the Native Americans, the so-called Red2016, writes: \"Trump's candidacy had started as nothing Indians, with a ferocity that could only be described asmore than a joke. A reality television man who also bestiality and utter savagery. Millions of the natives were decimated with impunity because the Christian clergy gave a blank cheque for that slaughter. The church justified the blood-letting in the name of purging the God- gifted land of the uncivilized 'heathens.'\" We see how religion is used as a tool to perpetuate atrocities and annihilate a class of humans that are seen as sub-humans by the fellow humans themselves. It is both interesting and shocking, in a single breath, to realize how the role of religion has been tampered with by people that rely solely on their base instincts. Samuel P. Huntington in his book \"The Clash of Civilizations and the Remaking of the World Order\" writes: \"In the late 1980s the communist world collapsed, and the Cold War international system became history. In the post-Cold War world, the most important distinctions among peoples are not ideological, political, or economic. They are cultural. Peoples and nations are attempting to answer the most basic question humans can face: Who are we? And they are answering that question in the traditional way human beings have answered it, by reference to the things that mean most to them. People define themselves in terms of ancestry, religion, language, history, values, customs, and institutions. They identify with cultural groups: tribes, ethnic groups, religious communities, nations, and, at the broadest level, civilizations. People use politics not just to advance their interests but also to define their identity. We know who we are only when we know who we are not and often only when we know whom we are against.\" This sense of the 'other' and finding ways to justify the crudeness of this creed by putting up the façade of 'protectionism' is being perpetuated and instilled in our psyches for more chaos, more cries, more loss of life and limb and more money and political mileage. This is not the World we want. Not on our watch. Issue 24 25

FROM THE COURTROOMby Swarnalee Halder

FROM THE COURTROOM AADHAR NOT VALID PROOF LEARNING OUTCOMEOF CITIZENSHIP- CALCUTTA New passport rules have been announced by the Minster HIGH COURT of State for External Affairs, where Aadhar and E-Aadhar with date of birth is to be considered as a valid identity RANI MISTRY proof. Aadhar has been made compulsory for various transaction post demonetization. Aadhar has been made V. compulsory for Tirupati devotees who go to Tirumala hills on foot. Aadhar is now also mandatory for patients at theTHE STATE OF WEST BENGAL Outpatient Department (OPD) at Civil hospital in Gurugram. (Aadhar Card not valid proof of citizenship, SCC ONLINE CAL 8283, rules Calcutta High Court;India.com/ Dec26,2016) At the DECIDED ON 30.11.2016 same time it has been made clear by the High Court of Calcutta that Aadhar card shall not confer any right of or be proof of citizenship or domicile thereto while rejecting the claim of an accused who claimed to be an Indian citizen.FACTS LIQUOR PROHIBITION: ON STATE AS WELL AS NATIONALThe Court was considering a bail plea of a person who wasbooked under Section 14F of the Indian Foreigners Act. HIGHWAYSThe person claimed that she is an Indian Citizen that theissuance of the Aadhaar card was in view of long residence STATE OF TAMIL NADUof the petitioner in the country. V.ISSUES BEFORE THE COURT K. BALU new passport rules which were announced byMinister of State for External Affairs VK Singh on December [SSC ONLINE SC 1487,23 where AAadhar and E-AAadhar with Date of Birth will DECIDED ON 15.12.2016]now be considered as a valid identity proof.( Aadhar notvalid proof of citizenship or domicile; News 18/ December FACTS26 2016) The Apex Court was concerned over 1 lakh fatalities every Whether a mere holding of an Aadhar card grants year in road accidents and seeked to close the liquor shopscitizenship to any person beside national and state highways across the nation along with signs indicating their location. The stateHELD government is also obligated to prohibit liquor sale.The court contended Section 9 of the Aadhar (Targeted ISSUES BEFORE COURTDelivery of Financial and other subsidies, Benefits andServices) Act 2016, state that- “9. The Aadhaar number or  Day by day accidents are increasing on thethe authentication thereof shall not, by itself, confer any highways, sometimes directly linked to liquorright of, or be proof of, citizenship or domicile in respect of consumption.an Aadhaar number holder.”  Inaction of the State to remove alongside the roads which give rise to drunken driving and consequentialApart from this the petitioner also placed reliance of his fatalities.claim of his citizenship on the residence certificate issued  No concrete steps taken by the Centre to curb theby a representative of a local body. The Court also did menaceaway with this claim by holding the letter issued by therepresentative of the local body as to the residence of thepetitioner also does not, ipso facto, confer citizenship onthe petitioner.( High Court denies Aadhar as proof ofcitizenship/ Blog.scconline/Dec 28, 2016) Issue 24 27

FROM THE COURTROOM constant help of numerous legal and illegal liquor shops. As one of the pleas had said “\"India being a signatory to the Brasilia Declaration, it is imperative that policy guidelines are framed to control road accidents. Also, the excise policies of Indian states and Union territories should be amended to conform to the spirit of Article 47 r/w Article 21 of the Constitution of India,\" ( Ban sale of liquor on all National and State Highways from April 1, 2017: Supreme Court, http://www.firstpost.com/ Dec 15, 2016) NO PROVISION FOR TEMPORARY ENROLLMENT AS AN ADVOCATE IN THE ADVOCATES ACT, 1961 No response from the Centre, State and Union BAR COUNCIL OFTerritories regarding pleas seeking a direction to amend GUJRATexcise laws to ensure that no liquor is sold alongsidehighways. V. Ministry of Road Transport and Highways and said JALPA PRADEEPBHAI DESAIalmost five lakh accidents occurred last year in India,killing 1,46,000 people and leaving thrice the number [SCC ONLINE GUJ 5080.injured. DECIDED ON 25.12.2016]HELD FACTSThe Supreme Court ordered a ban of liquor shops on state The respondent petitioner applied for an appeal, who hasand national highways all over India and explicitly said applied for certificate of practice to Bar Council of Gujratthat the licenses of existing shops will not be renewed after while simultaneously rendering service at a corporation.March 31, 2017. Jalpa Pradeepbhai Desai, was not allowed to enroll as an Advocate due to her association with Gujarat IndustrialThe Court charged the Punjab government, for not doing Development Corporation as Legal Consultant. The Highthere required duty. It contended that –“Look at the Court asked the Bar Council of India to take decisionnumber of licenses you (Punjab) have given. Because the relating to her entitlement to get enrollment as anliquor lobby is so powerful, everyone is happy. The excise advocate. On finding that the Bar Council of India did notdepartment is happy, the excise minister is happy and the take any decision the Court eventually granted relief to thestate government is also happy that they are making respondent petitioner in this case by means of a Writmoney. If a person dies due to this, you give Rs one or 1.5 Petition in a single Judge bench .The Court granted her anlakh. That is it. You should take a stand which is helpful for interim relief and directed the Bar Council to grant her athe society, (Ban sale of liquor on all National, State temporary enrollment number.Highways from 1 April: Supreme CourtLEARNING OUTCOMEWith the implementation of this order the country willprobably have lower number of mishaps on the highwaywhich was happening and rapidly increasing with the28 Issue 24

FROM THE COURTROOMISSUES BEFORE COURT certificate of practice they took U-turn. hence I approached High Court,” (No Provision For Temporary The respondent petitioner contended that her Enrollment As Advocates: Gujarat HC; livelaw/Dec 25, 2016contractual service arrangement of her service with the ).The Court made it clear as to fact of what are to becorporation could not be viewed as employment. termed as employment and how a practicing lawyer as per the conduct of the Act is barred from continuing its Remuneration paid to her was not by way of membership in the Bar once finds another employment.salary, there was no employee-employer relationship. OBLIGATION OF THE The respondent petitioner has to attend office ADVOCATES TO PLACEfrom 11 AM-5Pm, which are standard hours of work. ACCURATE LAW BEFORE THE COURT: CODE OF HONOUR The respondent petitioner has a fixed salary ofRs.25000 per month. HEENA NIKHIL DHARIAHELD V.The High Court of Gujarat held that there is no provision KOKILABEN KIRTIKUMARfor grant of temporary certificate by the Bar Council for NAYAKpracticing as an advocate under the Advocate’s Act 1961.The Division Bench observed that according to the [SCC ONLINE ON 9.12.2016]contract of the corporation observed that the respondent-petitioner was a full-time salaried employee of thecorporation, she is not entitled to practice as advocate solong as she continues in such employment and was barredunder Rule 49 of the Rules. (No provision under AdvocatesAct, 1961 for temporary enrolment as an advocate;SCCOnLine/Dec 28, 2016)LEARNING OUTCOMEEven though the respondent petitioner contended “I was FACTSallowed to enroll as an advocate by BCG & BCI in 2012-2013 and they allowed me to appear All India Bar Exam but In this case the dispute is related to the estate ofwhen I cleared my exam and asked for number and Kirtikkumar Nayak. The person died in the year 2005. Issue 24 29

FROM THE COURTROOMKirtikkumar’s daughter filed a suit claiming that she is HELDentitled to a share in her father’s estate. She furtherpleaded for administration and partition of the property. The Court held that it is the duty of the Court to checkMeanwhile in the year 2006 a Testamentary Petition was whether a judgment cited, has been confirmed or set asidefiled by the widow of Kirtikkumar Nayak. The petition in appeal. The Court contended that two major decisionscontended that Kirtikumar was survived only by his wife cited by the counsel of the defendant has been set aside byand three sons. This petition was produced by the consent in appeal yet the counsel maintained that they aredefendant in this particular case once a claim for the binding precedent. The Court however did not commentproperty has been asked by Kirtikkumar’s daughter. on the limitation issue. According to the Court the issue of limitation of substantially similar issue was pending beforeISSUES BEFORE THE COURT a Full Bench of Bombay High Court. Whether kirtikkumar’s daughter is liable to get a LEARNING OUTCOMEpart in the estate. The Advocates being the torchbearer of law and the The defendant contended that since Article 113 of spokesperson of the court to common people it isthe Schedule to Limitation Act, 1963 provides for a period mandatory that they diligently solve cases and look intoof three years from date when “the right to sue accrues”, past records and provide proofs which are legal and true.the suit was barred by limitation. The Court makes it clear that t is the duty of the advocates to cross check status of judgment and place accurate law The plaintiff claimed that the suit was covered by before the Court. (Code of honor obligates advocates toArticle 65 (for possession of immovable property based on place accurate law before the Court; SCC Online, Dec 20,title) or Section 110 (a suit by a person excluded from joint 2016)family property), both of which stipulate a twelve-yearperiod limitation. (Code of honour obligates advocates toplace accurate law before the Court; SCC Online, Dec20,2016)30 Issue 24

FROM THE COURTROOMWHERE COMMUNICATION OF law.( Territorial jurisdiction of that Court arises where TERMINATION ORDER communication of termination order reaches the employee i.e. legal cause of action is completed; REACHES THE EMPLOYEE; http://scconline / Dec 19, 2016)TERRITORIAL JURISDICTION  Whether just because the Government of India has OF THAT COURT ARISES. issued its letter at Delhi would this by default give territorial jurisdiction to this Court although this letter has not been communicated to the petitioner at Delhi.P. K.S. SRIVASTAVA HELD V. The Court observed that the communication of termination is not complete until and unless a person UNION OF INDIA knows about the order of termination of services being passed, and an employee will only know about an order of [SCC ONLINE DEL 6149, termination of services only when it is communicated to DECIDED ON 1.12.2016] him, and therefore, since communication is a compulsory link and a sine qua non for arising of the cause of action,FACTS hence cause of action will only be therefore complete for filing of judicial proceedings on communication andIn a case relating to maintainability of Writ petition on the therefore the place where the communication is madeground of territorial jurisdiction of the court, the petitioner would be the place where the territorial jurisdiction wouldquestioned his termination in relation with his contractual exist, although the order of may have been passedservices with the respondent. elsewhere i.e. Delhi in the present case. (Territorial jurisdiction of that Court arises where communication of termination order reaches the employee i.e. legal cause of action is completed; http://blog.scconline.com/ Dec 19, 2016)ISSUES BEFORE COURT LEARNING OUTCOME Petitioner is the Director of Goa shipyard Limited The mere existence of anclaimed that the High order in the governmentCourt of Delhi has file does not result in ajurisdiction since the binding order for creatingtermination order has legal rights, andbeen issued by the therefore, when legalMinistry to the rights are created only onChairperson of GSL in communication and aDelhi even though the legal cause of action isletter has been complete only on suchcommunicated to him in communication, thusGoa and not in Delhi. accordingly it is the place where the order of The Ministry termination of services isdefended by saying that communicated thatthis Court did not have the would be the place whereterritorial jurisdiction as the territorial jurisdictionthe cause of action in the arises. (Termination ofpresent case is the Service: Jurisdiction Liescommunication of the At the Place Whereorder and without such Communication Hascommunication of an Been Made: Delhi HC;order to the person livelaw/Dec 3, 2016)concerned; the cause ofaction is not complete forfiling of a case in a court of Issue 24 31

IGNITING MINDS by Akanksha Sikri Jane Maria

IGNITING MINDSPROFESSION TAX April 2012 except for non-resident employer/person andREGISTRATION Government departments. Non-resident employer/person/s and Government Department/s may continue to apply manually. 3. Steps to make on line application:P rofession Tax is a state-level tax that applies a) The applicant needs to log on to the web-site of the to salaried employees and professionals, Sales Tax Department, Govt. of Maharashtra at including chartered accountants, lawyers www.mahavat.gov.in and doctors. The following states impose b) On the home-page of www.mahavat.gov.in, thethis tax: Karnataka, West Bengal, Andhra Pradesh, applicant may go through the ‘Instruction Sheets for e- Services -> e-PT Registrations (PTRC and PTEC) forMaharashtra, Tamil Nadu, Gujarat, Assam, Chhattisgarh, guidance.Kerala, Meghalaya, Orissa, Tripura and Madhya Pradesh. c) Thereafter on the home page under ‘e-Services’ the applicant needs click ‘PT e- Registration’ link.Registration is mandatory within 30 days of employing d) Next, “e-Registration Information – information (forstaff in a business or, in the case of professionals, 30 days PTRC or PTEC Registration…)” page will open. Employer/person should enter/select details such as Namefrom the start of the practice. This tax needs to be of Applicant, PAN, TAN, status of applicant and Location. Applicants from Greater Mumbai should select location asdeducted from the salary or wages paid; the amount varies Mazgaon.by state but is capped at Rs. 2500 per annum. If you have e) For obtaining Registration Certificate (PTRC), for Principal place of business within the State of Maharashtraemployees in more than one state, you would need to get mentioning of TAN is optional. However, If an employer is applying for Registration certificate for places other thana Profession Tax Registration in each state. Even the rate at his principal place of business in the State of Maharashtra, then he should also enter TAN number of that otherwhich it must be paid will vary. This makes it cumbersome location for which he is making an application.for many small businesses to comply with. Do note, f) Next, an employer applying for Registration Certificate (PTRC) should select ‘Act’ as ‘PTRC Registration’ whereashowever, that many north Indian states do not levy person applying for Enrolment Certificate {PTEC) should select ‘PTEC enrolment’ as Act. Then the applicant needsProfession Tax at all. The frequency of return filing to click ‘next’.depends on the state you're in. For example, in g) The appropriate e-application for Registration in form I or for enrolment in form II under Profession Tax Act,Maharashtra, returns can be filed annually if the liability is depending upon earlier selection will open. Information in the form should be completely filled in either by enteringunder Rs. 5000, quarterly if the liability is under Rs. 20,000 in the relevant fields or selecting from drop down lists. After filling in complete information applicant should clickand monthly if it is above Rs. 20,000. However, in West “submit” button.Bengal, returns need only be filed once every year. This is h) In case the data in any of the fields is not entered, then the applicant would get error message and would bethe approach, in fact, many states are moving toward now. prompted to enter the said data.A penalty of 10% of the amount owed can be imposed in i) After completely filled application form is submitted (uploaded), acknowledgment, containing date and timeMaharashtra in case of delayed payment of Profession Tax. for attending before Registration Authority along with code/designation and address of the RegistrationA delay in obtaining the Enrollment Certificate will be Authority, will be generated. This acknowledgment can be saved on the computer and needs to be printed forcharged at Rs. 2 per day. producing before the registration authority. The employer/person should also save the filled in applicationHere is the procedure for registration in the State of form of registration or enrolment as the case may be andMaharashtra: should take printout of it.1. At present, the applications for registration andenrolment under Maharashtra State Tax on Professions,Trades, callings and Employments Tax, 1975 (ProfessionTax Act) are being made manually to the RegistrationAuthority. On the receipt of the application, it is verified bythe Registration Authority along with the documentssubmitted.2. Revised Procedure: As a step towards e-governance,the above procedure of manually submitting applicationsfor registration and enrolment is being changed. From 1stApril 2012 onwards, the application for registration (PTRC)and enrolment (PTEC) under Profession Tax Act should beelectronically uploaded in ‘Form I’ or ‘Form II’ respectively,as provided on the web-site of the Sales Tax Department,Government of Maharashtra i.e. www.mahavat.gov.in. Theremaining processes of obtaining registration/enrolmentsuch as verification of documents etc. will remain thesame.Manually filled forms will not be accepted on or after 1st Issue 24 33

IGNITING MINDSj) The proprietor, partner, karta or director, as the case may respects, after verification along with relevant documents,be, are required to sign at relevant place/places on the then Registration Authority will generate TINprint of the application so taken, and submit it to the (Registration/Enrolment Certificate Number under theconcerned Profession Tax Registration Authority at the Profession Tax Act) after verification.time of verification on given date and time along with Registration/enrolment certificates shall be printed andrelevant documents. issued to the employer/person on the appointed day. In case it is found that the applicant is eligible for granting4) Grant of Profession Tax Registration/Enrolment registration/enrolment with liability from any earlier date,Certificate: then such date will be entered by the Registration officer. In case the application is eligible for granting registration,If the application is found correct and complete in all34 Issue 24

IGNITING MINDSthen the date of uploading the application shall be 5) Defective Application: If the application is foundconsidered as the date of application for the purpose of defective, then defect memo will be issued and e-mail todetermining the effective date of Registration Certificate. applicant. The applicant needs to rectify the defects withinRegistration certificates will be sent via email and post. 30 days.The applicants need not visit MSTD offices forprocurement of Registration Certificates as the same 2. In case the applicant rectifies the defects within 30 days,would be made available on the portal in downloadable the Officer will verify and if found satisfactory then TINformat with digital signature of appropriate certifying would be generated. In this case the date of firstauthority. application would be taken for the purpose of determining the effective date of RC. 3. If the applicant does not rectify the defects shown in defect memo within 30 days, then the application shall be rejected and the temporary profile will be de-activated after 90 days. 6) Rejection of application: If the employer/person is not able to appear on appointed date and time then employer/person should obtain date and time from concerned Registration Authority within ten days. The details of Registration Authorities along with the designation and their telephone numbers are available on home page under e-Services under Instruction Sheets for e-Services-> e-PT Registrations (PTRC and PTEC). The employer/person should contact the Registration Authority whose designation appears on the acknowledgement. It may be noted that only one request for change of date shall be entertained. If the employer/person does not attend before Registration Authority on appointed date and time along with acknowledgment and copy of relevant filled in & signed application form or does not obtain appointment within next ten days, then the application shall be rejected. 7. In Mumbai, previously work of Registration/Enrolment under the Profession Tax Act was carried out at Sub Urban Vikrikar Bhavan Bandra and Vikrikar Bhavan Mazgaon. However from 1st April 2012 onwards it will be carried out at Vikrikar Bhavan, Mazgaon only. 8. Abundant care is being taken not to give appointments on public/local holidays. However, in case a public holiday/local holiday gets declared on the given date of appointment then employer/person should attend on ‘first working Friday* subsequent to the said date of public holiday/local holiday. 9. Applicants covered under Entry No. 13 of Schedule I of the Profession Tax Act i.e. holders of permit for transport vehicle granted under the Motor Vehicles Act 1988, should directly approach the concerned RTO for enrollment certificate. Such application will not be processed by the Sales Tax Department. REFERENCE LINK: http://www.mahavat.gov.in/Mahavat/index.jsp Issue 24 35

IGNITING MINDSPROFESSION TAX 8) Authorization by the Board of Directors / Partners /REGISTRATION Proprietor for the person filing the application.N ow that the GST bill is being introduced in 9) Business transaction numbers obtained from other the Parliament, service tax is in the Government Departments or Agencies limelight. Every person and entity who undertakes a business that provides Step 2:- The ST-1 Form Online Filingtaxable services valuing above Rs. 9 lakh/- have the The ST-1 form is available online in the website of Automation of Central Excise and Service Tax (ACES). Thisliability to pay service tax. But before that it is mandatory form has to be filled in by the applicant. If the Superintendent is not able to accept the information filed, he can reject the application. If till 2 days after filing of the online application, the authorities have not intimatedfor the service provider toget registered. Theprocedure for the servicetax registration is nowfairly simple after makingit online.Step 1:- DocumentsrequiredThe important documentsfor applying for theregistration are as listedbelow:-1) PAN Card Copy2) Photograph of theperson filing theapplication3) Proof of identity of theperson filing theapplication –a) PAN Card b) Voter Id /Passport Copy / AadharCard / Driving License / Idissued by CG / SG / PSUs4) Proof of possession ofthe premises to beregistereda) Lease Deed / RentAgreement / Allotmentletter from Govt. / TaxPass book (ownproperty)/ NOC from legalowner.5) Details of Main BankAccount6) Certificate ofIncorporation + MOA +AOA / Partnership Deed /Bye-laws7) List of Directors36 Issue 24

IGNITING MINDSabout any non-acceptance of the application, it can be Commissionerate by post or in person. Subsequently, thedeemed that the application have been accepted. Also, registration certificate will be issued by the department.within two days of submission the electronic service tax The time for this shall vary from person to person.registration certificate is issued. This certificate can beused for the service tax purposes till a proper registration Nevertheless, the service tax registration may be denied orcertificate is issued by the department. even revoked for the three reasons listed below:-Website: www.aces.gov.in i) The premises are found to be non-existent or not in possession of the assesseStep 3:- The Submission of Hard Copy ii) No documents are received within 15 days of theWithin seven days of the e-filing, the hard copy of the ST-1 date of filing the registration application.Form and the iii) The documents are found to be incomplete orDocuments listed above must be filed before the incorrect in any respect. Issue 24 37