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BY THE PEOPLE. FOR THE PEOPLE. OF THE PEOPLE. www.legaleraonline.com | November 2017 Vol. VIII | Issue VII
JUSTICE R. BANUMATHI JUSTICE GITA MITTAL JUSTICE DR. MANJULA CHELLUR JUSTICE INDIRA BANERJEE JUSTICE PRATHIBA M. SINGH INDIRA JAISING INDU MALHOTRA MEENAKSHI ARORA VRINDA GROVER PINKY ANAND
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Bar & Bench ZIA MODY MANJULA CHAWLA MANISHA SINGH NINA GUPTA BHASIN SHWETA BHARTI PALLAVI SHROFF Damini Marwah DEBOLINA PARTAP NEERA SHARMA SHUKLA WASSAN
Women in Law
Open Bar Cyber-Security A Big Reality, Time To Face It Aakriti Raizada Sharma
A
recent global survey has found about 43 percent of cyber-attacks to be targeted at small and medium enterprises (SMEs), with only 14 percent of them equipped to deal with such risks. According to the findings, nearly 60 percent of SMEs are forced to shut shop within six months of a cyber-attack. Small and medium retailers face the biggest challenge in terms of updating their hardware at multiple locations without losing sight of productivity and staying abreast of the latest technology so as to tackle increasingly sophisticated techniques used by hackers. Founder & Managing Editor Legal Era Magazine, Legal Media Group
Research revealed that over the past one year, in UK alone, as many as 875,000 SMEs had already faced cyber-attacks, with London-based companies being the worst affected. In India, 91 percent of SMEs were found to believe that they were at risk because of the complexity of business and IT, notwithstanding the country’s status as global information technology services’ leader and as one of the fastest-growing economies in the world. This is because a majority of Indians are yet to see a computer in their lifetime. It is also because India fares poorly in terms of cyber-security, with companies here continuing to be easy prey for cyber-criminals. So much so that in a 2016 APAC study, it emerged that Indian SMEs had been the most vulnerable to cyber-attacks in the three-year period between 2013 and 2016. India can ill-afford cyber-attacks which cost the country more than $4 billion, with the number only set to inflate to $20 billion over the next 10 years. Part of the problem is that Indian companies tend to place cyber-security very low in their list of priorities, which must change. Rather than being sitting ducks for cyber-criminals, our companies must gear up for vulnerabilities by keeping up with technological changes and updating their operating systems, browsers, anti-virus software, whatever it takes. Legal Era believes in creating awareness and will publish expert articles on cyber crimes and the challenges in the next edition. Keep your eye on. Kindly share your opinions/feedback at editor@legalera.in www.legaleraonline.com
| Legal Era | November 2017
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BY THE PEOPLE. FOR THE PEOPLE. OF THE PEOPLE.
Legal Media Group November 2017 | Volume VIII | Issue VII First published in March 2010 Legal Era aims to provide “in the trenches” editorial that gives Common Man, Law Students, Lawyers, Business Leaders and Corporate Managements a detailed outlook of the current legal scenario.
Contents 24 COVER STORY
JUSTICE R. BANUMATHI JUSTICE GITA MITTAL JUSTICE DR. MANJULA CHELLUR JUSTICE INDIRA BANERJEE JUSTICE PRATHIBA M. SINGH INDIRA JAISING INDU MALHOTRA MEENAKSHI ARORA VRINDA GROVER PINKY ANAND
Law Firms & In-House
November 2017
Bar & Bench
ZIA MODY MANJULA CHAWLA MANISHA SINGH NINA GUPTA BHASIN SHWETA BHARTI PALLAVI SHROFF Damini Marwah DEBOLINA PARTAP NEERA SHARMA SHUKLA WASSAN
Women in Law 54 Take on Board
Opportunities In
Defense Manufacturing
As Government Unveils Strategic Partnership Model Fostering constructive partnership with the Indian private defense industry is considered not just a sound economic option but a strategic imperative to minimize dependence on imports and infuse self-sufficiency in defense manufacturing; however, only time will tell if the strategic partnership model has the desired effect
Regulars 03 Open Bar 08 Readers’ Notes 10 World @ Glance 14 Nation @ Glance 18 Top Stories 22 Within the Circle 74 InJuncture 82 Highlights 86 Policy Update 88 Legal Precepts 92 Fun 'n' Frolic 94 Mind-Boggling
November 2017 | Legal Era | www.legaleraonline.com
58 INSIGHTS RIGHT IS MIGHT
Current
Risk Management Position In
LEGAL MEDIA GROUP
BY THE PEOPLE. FOR THE PEOPLE. OF THE PEOPLE.
62
In Focus
Whistleblower
Protection Reforms: A model for India and Australia
The risk management function is set to become increasingly important over the next decade where shareholders will look to add value to their business and protect customers
66
OUTLOOK
Carry Cash Risk Your Reputation!
As a rule, individuals should only travel with large amounts of cash when it is absolutely necessary, otherwise using the banking system wherever possible
Australia has proposed a whistleblower protection model which can act as a blueprint for other common law countries, including India, which seek to enhance protections to those who blow the whistle on corporate misconduct and corruption
70 BARELY LEGAL
DOWNSIDE PROTECTION:
NOT MERELY A LIP SERVICE ANYMORE Indian courts are strongly heading towards an approach that discourages Indian parties from using regulatory compliances as a defense for resisting contractual obligations
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World @ Glance Legal Updates From Across The Globe
United States of America EQUIFAX TARGETED BY MALWARE Monday, October 16, 2017
Confirming that its systems were not compromised and that the reported issue did not affect its consumer online dispute portal, Equifax said, “The issue involves a third-party vendor that Equifax uses to collect website performance data and that vendor’s code running on an Equifax website was serving malicious content. Since we learned of the issue, the vendor’s code was removed from the webpage and we have taken the webpage offline.”
Once again, Equifax, which is a consumer credit reporting agency (oldest of the three largest credit agencies) that collects and aggregates information on over 800 million individual consumers and more than 88 million businesses worldwide, appears to be a target of yet another attack. Equifax took down one of its customer assistance website pages as its cyber security team investigated another possible breach. According to security analyst Randy Abrams, the site redirected some visitors to download a fraudulent update for Adobe Flash that would infect the user’s computer with Malware.
Earlier, Equifax had announced that a security breach released information of approximately 143 million customers, including names, birth dates, Social Security numbers, addresses, and possibly even driver’s license numbers. Equifax said that it discovered the breach on July 29 and believes that the unauthorized access occurred from mid-May through July. Following that initial announcement, Equifax released information that an additional 2.5 million Americans may have been affected by the massive breach, bringing the total to 145.5 million people. Notably, the breach happened because of a mistake by a single employee. In this regard, Equifax’s then Chairman of the Board and Chief Executive Officer Richard F. Smith had apologized to the members of the House Energy and Commerce Committee and the American people for the security lapse.
HEALTHCARE EXECUTIVE ORDER ISSUED: TRUMP Monday, October 16, 2017
On October 12, an executive order was signed by US President Donald Trump, making the buying of more forms of health insurance at potentially cheaper costs, easier for the people. The order recognized three main areas of priority: allowing small business access to association health plans (AHP), expanding use of short term, limited-duration insurance (STLDI), and expanding health reimbursement arrangements (HRA). Under AHPs, small business will be able to come together, even across state lines, to provide less regulated, cheaper health care for employees. Opposition leaders have condemned Trump’s actions. Senate Democratic leader, Chuck Schumer, stated “Having failed to repeal the law in Congress, the President is November 2017 | Legal Era | www.legaleraonline.com
ravaging the system.” Specialists have stated that this could dismantle comprehensive coverage for the sick and lower classes in the country, contrary to the goals set out within the executive order itself.
International DRUG TRANSPARENCY BILL SIGNED BY CALIFORNIA GOVERNOR Wednesday, October 11, 2017
On October 9, Jerry Brown, California Governor, signed a bill aimed at making drug prices for both public and private health plans more transparent. The California Office of Statewide Health Planning and Development, beginning October 1, 2018, will be needed to collect data from manufacturers and report to the California Research Bureau, mentioning changes in manufacturing and distribution, including increased drug prices. For all prescription drugs, Senate Bill No. 17 requires all qualified pharmacies to report, (1) “the 25 most frequently prescribed drugs;” (2) “the 25 most costly drugs by total annual plan spending;” and (3) “the 25 drugs with the highest year-over-year increase in total annual plan spending.” Upon allowing legislators to review the impact of drug costs on healthcare premiums in California, information from health plans and insurers will be gathered and reported to California’s Congress. Primarily, the bill targets large and highly profitable manufacturers by imposing on them strict reporting responsibility:
A manufacturer of a prescription drug with a wholesale acquisition cost of more than forty dollars ($40) for a course of therapy shall notify each [qualified] purchaser if the increase in the wholesale acquisition cost of a prescription drug is more than 16 percent, including the proposed increase and the cumulative increases that occurred within the previous two calendar years prior to the current year. The notice required by subdivision (a) shall be provided in writing, at least 60 days prior to the planned effective date of the increase.
SUIT FILED AGAINST TRUMP’S ADMINISTRATION OVER BIRTH CONTROL REGULATIONS Thursday, October 12, 2017
Attorney General Bob Ferguson contends that the administration’s action violates both, the First and Fifth Amendment. The Establishment Clause of the First Amendment stops an individual from imposing their religion on those who do not hold the same beliefs, according to the complaint. The complaint further states that, as only women may have their contraception coverage denied, the action violates the Equal Protection Clause of the Fifth Amendment.
On October 9, Washington’s attorney general reported that he would sue President Trump’s administration over its rollback of an ObamaCare requirement that employers include birth control coverage in their health insurance plans. “President Trump’s contraception rules are unfair, unlawful, and unconstitutional,” Attorney General Bob Ferguson said in a statement. “I refuse to let President Trump disregard our laws and our constitution in an effort to deny women access to contraception.”
The provisions of the Affordable Care Act (ACA), which guarantees contraception coverage at no additional cost to any patient, are also desecrated, contended Ferguson. Furthermore, he mentions that, ACA prohibits any regulation that: Creates any unreasonable barrier to the ability of individuals to obtain appropriate medical care, ... impedes timely access to health care services, ... or limits the availability of health care treatment for the full duration of a patient’s medical needs. Ferguson asserts the Trump administration violated these provisions by granting employers the right to deny coverage. www.legaleraonline.com
| Legal Era | November 2017
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World @ Glance
Asia MICROSOFT PRESIDENT SAYS NORTH KOREA BEHIND WANNACRY CYBER ATTACK Monday, October 16, 2017
Microsoft President and Chief Legal Officer Brad Smith stated that North Korea was responsible for the devastating WannaCry ransomware attack that affected 47 NHS trusts. With a high level of confidence, Smith said that he believed that Pyongyang was behind the attack which impacted 200,000 computers in 150 countries around the world. According to Smith, “all observers in the know” now believe that North Korea stole the technology needed to create the exploit from the US’ National Security Agency before unleashing it on the world. Notably, the WannaCry ransomware attack struck where computers were running outdated software, infecting numerous machines worldwide. Reportedly, Smith said, “I think over the last six months, we’ve seen threats come to life, unfortunately, in new and more serious ways. The problem has become bigger. We need governments to come together as they did in Geneva in 1949 and adopt a new digital Geneva Convention that makes clear that these cyber attacks against civilians,
especially in times of peace, are off-limits and a violation of international law.” Smith then said that Microsoft was not to blame for the infection of systems using older operating systems, especially, in this case, the obsolete Windows XP, for which the company ended mainstream support in 2014.
KHATM-I-NABOOWAT DECLARATION IN ELECTIONS ACT 2017 RESTORED, NA PASSES BILL Wednesday, September 27, 2017
The words in Form-A “I solemnly swear” had been replaced with “I believe” in a clause relating to a candidate’s belief in the finality of the prophethood of Prophet Muhammad and it had been made not applicable to non-Muslim candidates.
On October 5, the National Assembly passed the Elections Reforms Amendment Bill 2017, recorded by Law Minister Zahid Hamid that amends, the recently-passed Elections Act 2017 to restore a Khatm-i-Naboowat oath in which, lawmakers are required to take back to its original state. On October 3, Parliamentarians had pointed out that the wordings of Form-A, submitted at the time of election by candidates, had been changed into a declaration form instead of an affidavit, which puts a candidate under oath. November 2017 | Legal Era | www.legaleraonline.com
Sections 7B and 7C of The Conduct of General Elections Order, 2002, relating to the status of Ahmedis, had also been deleted from Elections Act 2017. Section 7B says that the status of Ahmedis remains as stated in the Constitution of Pakistan, while section 7C states that if an enrolled voter’s belief in the finality of Prophet Muhammad’s prophethood argues, they shall have to sign a declaration stating so, failing which their “name shall be deleted from the joint electoral rolls and added to a supplementary list of voters in the same electoral area as non-Muslim”. On October 4, changes were accepted by Speaker National Assembly Ayaz Sadiq as “a clerical error” after parliamentary leaders decided to restore the declaration and sections to their original form. Read more: http://www.legaleraonline.com/news/khatm-inaboowat-declaration-in-elections-act-2017-restored-na-passesbill
International
Europe ANTI-TERRORISM BILL APPROVED BY FRANCE PARLIAMENT Friday, October 06, 2017
Through judicial approval, the police would have the authority to raid private property and restrain people’s movements if they suspected a threat to national security. Furthermore, no judiciary approval would be needed before shutting down places of worship or setting up security zones when there is an alleged threat to national security.
On October 3, the lower house of the French parliament voted 415-127 to authorize an anti-terrorism bill that would increase police surveillance powers and allow authorities to close places of worship that are suspected of being a threat to national security.
“The anti-terrorism law... will give the state only extraordinary powers of something that we don’t even have a proper definition of. This law will dismantle France,” said Yasser Louati, a leading French human rights and civil rights activist. Louati stated that the state of emergency for the past two years has not changed “anything in the country” and has proven to be “ineffective and insufficient”.
United Kingdom WITHDRAWING LIFE SUPPORT SYSTEMS DO NOT NEED COURT PROCEEDINGS: UK COURT OF PROTECTION Wednesday, October 04, 2017
The UK Court of Protection has clarified that decisions to withdraw life support treatment to patients in Permanent Vegetative State (PVS) or Minimally Conscious State (MCS) need not always be taken with judicial approval. It was held that if the decision was taken on agreement between doctors and family members in accordance with the professional guidelines, Court intervention was not a mandatory requirement. The Court of Protection in the United Kingdom is created under the Mental Capacity Act, 2005 to determine issues pertaining to welfare and best interests of persons under mental incapacity. The Court was dealing with the case of a lady who was suffering from a rare neurological disorder called Huntington’s disease, which rendered her in a ‘Minimally Conscious State’. The Court proceedings were initiated for permission to withdraw the Clinically Assisted Nutrition and Hydration (CANH) given to the patient on the ground that it was not in her best interests to continue the treatment. After considering the testimonies of her mother, other family members and doctors, Justice Peter Jackson of the
Court of Protection reached the conclusion that it was not in the patient’s best interest to continue the CANH, and permission was accorded to withdraw the same. The Court stated that a decision on such a matter should be guided by the following considerations under the Mental Capacity Act :• Where a person is unable to make a decision for herself, there is an obligation to act in her best interests Read more: http://www.legaleraonline.com/news/withdrawinglife-support-systems-do-not-need-court-proceedings-uk-courtof-protection
DISCLAIMER: It may be noted that the Legal Era edition publishes select news pieces collated from various sources, based not necessarily on their timeliness and topicality but their interest to you. www.legaleraonline.com
| Legal Era | November 2017
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Nation @ Glance Nation @ Glance High Court & Tribunal News Around The Nation
Bombay High Court
`5 LAKH IMPOSED FOR RE-ARGUING CASE WITH DIFFERENT LAWYERS: BOMBAY HC Friday, October 13, 2017
challenged before the higher court but liberty is sought to present a review petition. The higher court, with greatest respect, is informed that certain points or arguments, allegedly crucial to the case and going to the root of the matter were either not canvassed or canvassed but not considered. Such an argument is raised before the Hon’ble Supreme Court of India at the instance of the aggrieved parties by a counsel instructed by an advocate who had no opportunity to argue the matter before this court.” Case Background A `5 lakh cost was imposed on petitioners reminding them about the limitations of a review jurisdiction by the Bombay High Court. A bench of Justice SC Dharmadhikari and Justice MS Sonak observed that lately litigants try to go behind binding orders of the high court by canvassing arguments before the Supreme Court that do not give the entire or true picture of the case, and all this is done taking advantage of the liberty granted by the Supreme Court to file a review. Dismissing the review petition, at the very outset of this 20-page order filed by Radhakrishna Co-operative Housing Society Limited and Eco Struck Developers, the court noted:
“It is most unfortunate and we must bring this to the notice of all concerned that routinely, review petitions are filed in this court, after the orders under review are unsuccessfully
Tenants/occupants of the concerned property applied to MHADA for acquisition saying that they would maintain and repair the said property. As soon as the charitable trust that originally owned the property was no longer in the picture, the occupants then appointed a developer. In 2007, the Charitable Trust challenged it, which was rejected by an order dated December 7, 2007. Then, the co-operative society formed by the occupants/tenants of the said property and the developers sought to get out of the acquisition that already took place in 1992. However, it was noted by the high court that petitioners, who had approached this court earlier, pleaded before the apex court that no purpose was served by acquiring the property as “the respondents have failed to offer any amicable solutions to the tenants/occupants on account of lack of funds”.
REPEATEDLY WATCHING A CHILD WITH SEXUAL INTENT OFFENSIVE UNDER POCSO: BOMBAY HC Monday, September 11, 2017
If a person with sexual intent repeatedly or constantly follows or watches or contacts a child either directly or through other means, then he can be said to have committed an offense defined under Section 11 of the POCSO Act, as stated by the Bombay High Court. Manju Tejbal Vishwakarma, the victim’s mother filed the writ petition and Valji Vadher, the accused challenged the proceedings ongoing against him in the special court established under the POCSO Act. An FIR was reported against both of them under Section 11 of the POCSO Act at Daman. The victim minor girl had said in her statement recorded on February 5, 2016, that the accused Valji Vadher always used to see her with ‘bad intent,’ Justice A M Badar noted this while hearing the petition.
The court observed: “Watching a female child with sexual intent comes under the mischief covered by Section 11 of the POCSO Act. Therefore, it cannot be said that there November 2017 | Legal Era | www.legaleraonline.com
are no sufficient grounds to proceed against accused Valji Vadher for the offense as defined by Section 11 and made punishable under Section 12 of the POCSO Act.”
The court, therefore, declined the plea of quashing the FIR against Vadher and decided to dispose of the writ petition.
national
Delhi High Court
NOTICE ISSUED ON DISQUALIFICATION OF PRIVATE CO. DIRECTORS: DELHI HC TO CENTRE Thursday, October 12, 2017
On October 10, the Delhi the central government in notifications, disqualifying companies for non-filing of continuous financial years.
High Court issued notice to a petition filed against two directors of private limited financial statements for three
Apart from disqualification from the said companies, the directors would also be barred from being designated as directors in any other company for a period of 5 years. The Bench of Acting Chief Justice Gita Mittal and Justice C Hari Shankar also stayed the impugned notifications with regard to the petitioners Sushen Mohan Gupta and other directors.
The petition sought relief on grounds that the said disqualification of directors under Section 164 (2)(a) of the Companies Act, 2013, without granting them the opportunity to be heard, was unreasonable, unjust, arbitrary, illegal and unconstitutional. The petition, filed by Advocate Manish Jain, states,
“The gross effect of the said section is such that it can lead to a situation of vacuum within the various companies, as the directors disqualified would not be in a position to appoint a new director which in turn would lead to instant stalling of business activities in various companies that might
severely affect the economy as a whole.� Furthermore, it was contended that Section 274 of the Companies Act 1956 was limited to dealing with disqualification of directors of public limited companies. Only after the Companies Act, 2013 came into effect; the directors of private limited companies were brought within the ambit of disqualification for the first time. Therefore, the new provision ought to have a prospective effect and not a retrospective one. Read more: http://www.legaleraonline.com/news/notice-issuedon-exclusion-of-private-co-directors-delhi-hc-to-centre
Jharkhand High Court
SPECIAL DRIVE TO DISPOSE 500 PENDING TRIAL COURT CASES: JHARKHAND HC Monday, September 11, 2017
assigned these cases to 77 judicial officers of all 24 districts, including Ranchi, Jamshedpur, Bokaro and Dhanbad.
A high-level meeting was called by the ACJ to secure continuous presence of witnesses in at least these 500 cases so that they may be fast-tracked, according to the HC. Chief Secretary of Jharkhand, Secretary Home Department, Director General of Police and Law Secretary are participants in the discussion. The state government also informed its additional public prosecutors to be ready for tackling the cases. A special drive has been initiated for disposal of over 500 cases pending in trial courts by Acting Chief Justice of the High Court of Jharkhand by January next year. A day-to-day hearing of these fast-tracked cases shall be done, which are related to law and order issues in the state. The first list of 362 cases pending in trial courts for day-today hearing in the courts had been stated in a press release issued by the high court Acting Chief Justice DN Patel has
This was the third initiative taken by the ACJ in recent days to reduce pendency of cases in the state. A special drive is underway for disposal of cases under the Negotiable Instrument Act. By now, total 12,028 cases have been disposed of in these two special drives. These disposals are over and above the daily work of the trial courts, like bail applications, anticipatory bail applications, stay and injunction applications, appeals and other proceedings of the courts. www.legaleraonline.com
| Legal Era | November 2017
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Nation @ Glance Nation @ Glance
Tribunal
SUBMIT REPORT ON STEPS TAKEN TO CLEAN GANGA: NGT TO CENTRE Monday, October 16, 2017
the edge of the river between Haridwar and Unnao) and prohibiting dumping of waste within 500 meters from the river. The bench further made it clear that in the event of non compliance, it will be compelled to pass coercive orders.
A bench of the National Green Tribunal (NGT), headed by Justice Swatanter Kumar, has asked the Centre as well as state governments of Uttar Pradesh and Uttarakhand to file a status report on the Ganga cleaning in the stretch between Gomukh and Unnao. The green panel also passed several directions including a ‘No Development Zone’ (an area of 100 meters from
“All the counsels appearing for their respective clients will inform these directions to them. Copy of this order, also, be sent to DG of National Mission for Clean Ganga; Secretary, Ministry of Water Resources and Secretary, Ministry of Environment, Forest and Climate Change for compliance,” the bench said. In its July 13 order, the green panel laid out the ‘way ahead’ and shared ‘a new perspective’ for cleaning and rejuvenating Ganga river in the next two years with a string of directions, including an announcement of `50,000 as environmental compensation for throwing any kind of garbage into the river.
Allahabad High Court
DECLARATION OF LAND ACQUISITION WITHIN A YEAR OF PUBLICATION IN OFFICIAL GAZETTE: ALLAHABAD HC Monday, October 16, 2017
A declaration of land acquisition under Section 3(D) of the National Highways Act, 1956 must be made within one year of the date of publication of a notification in the Official Gazette, and not the date of publication of the same in the newspapers, as ruled by the Allahabad High Court.
The case relates to the acquisition of land on National Highway-25, the declaration for which was published in the Official Gazette in December 2012. As per Section 3A (3) of the Act, the notification is required to be published in two newspapers as well, and the same was done on February 27, 2013. A declaration of acquisition under Section 3D is required to be made within one year of the notification under Section 3A.
Pranjal Mehrotra, preferred a writ seeking a direction to the ADM to sign off on a fresh 3A (1) notification.
The petitioners, represented by Senior Advocate RK Ojha, attacked this communication in a writ filed in the High Court on February 18, 2014. In response, the NHAI, described by
Read more: http://www.legaleraonline.com/news/declaration-ofland-acquisition-be-made-within-a-year-of-publication-allahabad-hc
On January 27, 2014, the Project Director of the National Highways Authority of India (NHAI) had sent a message to the Additional District Magistrate (ADM) claiming that the declaration under Section 3D (1) of the Act cannot be issued for the reason that a period of one year has already lapsed.
November 2017 | Legal Era | www.legaleraonline.com
In front of a Division Bench of Justices Dilip Gupta and Dinesh Kumar Singh-I, Ojha contended that the period of one year must be calculated from the date of publication of the notification in two newspapers. He also debated that the time period between filing the writ petition and its decision ought to be excluded, as there was no temporary order staying the proceedings.
national
Madras High Court FUNDAMENTAL RIGHT TO CONDUCT PUBLIC MEETINGS UPHELD: MADRAS HC Monday, October 09, 2017
further, that anti social elements may take advantage of the situation and indulge in anti social activities.”
The Madras High Court has ruled that people have a fundamental right to hold public meetings, and the same cannot be done away with merely on the apprehension of a law and order situation arising, in an order passed by Justice MS Ramesh. The High Court was approached by a social organisation by the name of Arappor Iyakkam last week when police authorities declined it permission to conduct a public meeting aimed at protesting corruption in the state. The petitioner’s application to direct the said meeting was reverted to with a show cause notice on why permission should be granted. Detailed representations were made highlighting the right to freedom of speech and expression and peaceful assembly. The petitioners, through their counsel V Suresh, were compelled to approach the High Court after the said representation did not yield any satisfactory response. Justice Ramesh observed that permission to hold the meeting was denied based on: “...some reliable information that the petitioner was attempting to instigate people and create law and order problems under the guise of conducting the meeting and
The Court was of the opinion that the fundamental rights to free speech and expression as well as the right to assemble peacefully cannot be altogether done away with on such apprehensions alone. The learned judge observed, “The legal proposition that Article 19 (1) (a) of the Constitution of India guarantees every citizen, the fundamental right of freedom of speech and expression and Article 19 (1) (b) confers the right to assemble peacefully and without arms is well established and not in dispute… ... I do not endorse the reasoning of the respondents for rejecting the petitioner’s request for the simple reason that the police department has been created only for the purpose of tackling the above problems.” He considered that if there were justifiable dreads regarding a possible law and order situation arising out of the conduct of the public meeting, reasonable conditions could be imposed to counter and control the same. “Since it is the fundamental right of the petitioner to conduct such a meeting, if at all, the respondent is of the view that they intend to instigate people and thereby create law and order problem, it was always open to them to permit the petitioner to conduct the meeting by imposing conditions. ... Likewise, if the respondents had apprehended that anti social elements may infiltrate the public and indulge in anti social activities; adequate protection can be extended during the course of the meeting to ensure that such incidents are thwarted. While that being so, the rejection order may not be justified.” Read more: http://www.legaleraonline.com/news/fundamentalright-to-conduct-public-meetings-held-madras-hc
DISCLAIMER: It may be noted that the Legal Era edition publishes select news pieces collated from various sources, based not necessarily on their timeliness and topicality but their interest to its readers.
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Top Stories GUIDELINES FOR ACCORDING SENIOR DESIGNATION TO LAWYERS ISSUED: SC Thursday, October 12, 2017 which would gather all information of a candidate who would be considered for confirming of senior designation by the permanent committee. The committee would also include a representative of the bar and Attorney General in case of apex court and Advocate General in case of high courts, apart from the CJI and seniormost SC/HC judge.
On October 12, the Supreme Court issued a bunch of guidelines, including the setting up of a permanent committee led by the Chief Justice of India to accord senior designation to lawyers. The committee would include a seniormost apex court judge or a high court judge, as the case may be in the committee besides the CJI, said a threejudge Bench headed by Justice RanjanGogoi.
The bench also consisting Justices R F Nariman and Navin Sinha proposed setting up of a permanent secretariat
While deciding the issue of designating a lawyer as senior advocate, the committee would also consider aspects such as number of years put in the practice, judgments in cases to which a lawyer has been a part, the pro bono litigations, and the test of personality.
The bench also made it clear that the permanent secretariat will put the name of candidates being considered for senior designation on the website for inviting suggestions of stakeholders. It said after the names are considered and approved by the permanent committee, the name will be put before the full court which will decide to accord senior designation to an advocate either unanimously or by majority through secret ballot.
CONVICTS ALLOWED TO INHALE FRESH AIR AND MAINTAIN FAMILY BONDS: SC Thursday, October 05, 2017 The Supreme Court, in a recent ruling, has directed courts to imbibe a “humanistic approach” while adjudicating the matters relating to parole or furlough to those serving long jail terms. A bench of Justice A K Sikri and Ashok Bhushan claimed that convicts too must breathe fresh air and should be allowed to keep family ties if the convict shows a tendency to reform. The bench asked the government to update rules for furlough and parole. It further claimed, “The archaic rules governing parole and furlough should be updated as this is the need of the hour.” There is an essential and urgent need for updating these rules, thereby including comprehensive provisions to provide suitable guidelines to those who have to contemplate such applications for grant of parole. The bench clarified that the person should stay in the jail but be released for such time to maintain his links with family and society. This will also allow him to solve his personal and family problems, if any. The court also explained that the reason for granting parole to keep in touch with his family is also one of the objectives behind punishment that was a reformation of convicts. One of the other objectives of this theory is that even convicts of great offenses have the right to breathe fresh air. November 2017 | Legal Era | www.legaleraonline.com
A parole is defined as the conditional release of prisoners on the basis of their good conduct. Though they are expected to constantly report to the authorities for the period they are set out and furlough is defined as a brief release from the prison which is given in cases of long-term imprisonment. This order came on the plea of Asfaq, who is serving life term in connection with cases lodged under TADA for his role in serial bomb blasts that took place in five trains on December 6, 1993. Asfaq has moved the apex court on the denial of parole by the authorities. The Supreme Court though upheld the order of Rajasthan High Court with a direction that he may apply for a fresh plea seeking parole after some time.
Top Stories SC TO EXAMINE LESS PAINFUL PROCEDURES FOR DEATH SENTENCE OF CONVICT Tuesday, October 10, 2017 capital punishment must be carried out so as to inflict minimum possible suffering to convicted prisoners; the court, over a PIL filed by advocate Rishi Malhotra, passed the order.
Malhotra argued that they had also favored other procedures for executing the death sentence, addressing to various law commission reports.
On October 6, the Supreme Court observing that a convict facing death must die in peace and not in pain, agreed to examine whether execution of death sentence by hanging could be replaced by other less painful procedures like by injecting lethal injection or shooting.
The government and Parliament could look for other less painful options to execute death sentence and issued notice to the Centre to revert to a petition seeking that Section 354(5) of Criminal Procedure Code, which prescribes execution of death sentence and says that a death convict shall be hung by the neck till he is dead, be declared unconstitutional and invalid, as said by a bench of Chief Justice DipakMisra and Justices A M Khanwilkar and D Y Chandrachud. Alleging that the present method for execution of death sentence is not only barbaric, inhuman and cruel but also against the resolutions embraced by the United Nations Economic and Social Council (ECOSOC) which states that
“The ultimate conclusion arrived by the law commission was that developed as well as developing countries have replaced execution by hanging by intravenous lethal injection or shooting which is most acceptable and humane method of executing death sentence involving less pain and suffering to a condemned prisoner,” he said.
He vied that death by shooting was legal in the country as the Army Act, Navy Act and Air Force Act say a court martial shall, in its discretion, direct that a death convict shall suffer death by being hung by the neck until he is dead or shall suffer death by being shot to death. Agreeing to decide feasibility to replace hanging as mode of death, the bench said evolution of modern science had opened the door to explore other less painful methods to execute death sentence which should be examined.
“It is contended by him (petitioner) that a convict, whose life has to end because of the conviction and the sentence, should not be compelled to suffer the pain of hanging. He has referred to the 187th report of the Law Commission,” the bench said.
4 WEEKS TO SHOW STEPS TAKEN TO ENHANCE SECURITY IN COURTS: SC TO CENTRE Monday, October 09, 2017 The Centre has been granted four weeks’ time by the Supreme Court to place on record the steps that have been taken to enhance security in the Courts. Justice S.A. Bobde and Justice L. Nageswara Rao, in a case involving the murder of a witness who had refused to turn hostile, issued the order. The witness was shot dead while he was being escorted by the police to the lock-up. The incident had alarmed the Apex Court, which had, in an earlier order observed, “We have no doubt that such incidents pose a grave threat to the security of courts and interfere with the administration of justice. It seriously affects the willingness of witnesses to state the truth.”
The Court had then issued notice to the Centre, inviting suggestions on making the Courts secure through CISF or any other agency. It had also sought its response on framing of guidelines for witness protection. www.legaleraonline.com
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Top Stories MERE DELAY IN INFORMING ABOUT VEHICLE THEFT CANNOT RENDER INSURANCE CLAIM REJECTED: SC Thursday, September 07, 2017 The decision of the insurer to reject the claim has to be based on valid grounds and rejection of the claims on purely technical grounds in a mechanical manner will result in loss of confidence of policy-holders in the insurance industry, observed a bench comprising Justice R K Agrawal and Justice S Abdul Nazeer. On grounds that there has been a hold up of eight days in informing the insurer about the theft occurred, the claim was rejected.
The condition regarding the delay shall not be a shelter to repudiate the insurance claims which have been otherwise proved to be genuine, the bench observed. In Om Prakash vs. Reliance General Insurance, the Supreme Court has observed that though the owner has to inform the insurer immediately after the theft of the vehicle, this condition should not bar settlement of genuine claims, particularly when the delay in intimation or submission of documents is due to unavoidable circumstances.
If the reason for delay in making a claim is convincingly explained, it cannot be rejected on the basis of delay. It is also necessary to state here that it would not be fair and reasonable to reject genuine claims which had already been verified and found to be correct by the investigator, the bench said. The court also argued that the Consumer Protection Act focuses at providing better protection of the interest of consumers and it is a beneficial legislation that deserves liberal construction. This commendable object should not be forgotten while considering the claims made under the Act, the bench said while setting aside the National Commission order.
PROCEDURE FOR APPOINTMENT OF JUDGES MADE PUBLIC: SC Saturday, October 07, 2017 For the first time in history, the seniormost Supreme Court judges will appoint or transfer judges, with their reasons openly in public. The Supreme Court collegium system is a panel of the country’s top five judges including the Chief Justice of India. The panel has decided that its discussions and recommendations for the first time will be put up on the Supreme Court’s website. The collegium system of judges appointing judges has been condemned over the years by the government with the system checking the transparency and the accountability of such judicial appointments. However, many reforms too have been suggested as the eminent jurists believed that collegium lacks transparency. National Judicial Appointments Commission (NJAC), which would comprise of the Law Minister and two eminent persons chosen by a separate panel including the Chief Justice, the Prime Minister and the Leader of Opposition were introduced by the Parliament in 2015. But NJAC was annuled by the Supreme Court, which felt the government too would have a say in deciding judges and the independence of the judiciary, would be dissolved. November 2017 | Legal Era | www.legaleraonline.com
The Supreme Court’s collegium system has been in controversy over a judge resigning after being passed over for elevation recently; the decision of the panel to go public can remove the differences in the system. In the Justice Jayant Patel example, who ordered a CBI investigation into the 2004 Ishrat Jehan encounter killing in Gujarat, was not promoted to Karnataka Chief Justice despite being seniormost in the state. Moreover, he was transferred to the Allahabad High Court, where he dropped to third in seniority.
Top Stories FUTURE RETAIL BUYS HYPERCITY FOR $100 MN Friday, October 06, 2017 1.24 million square feet. In the financial year ended March 2017, the company posted revenue of `1,191 crore, up from `1,035 crore the year before. K Raheja group company Shoppers Stop Ltd said it will sell its 51.09% stake in Hypercity for `79.18 crore in cash and `255.4 crore in shares to Future Retail, in a separate filing. Raheja family and group companies holds the remaining stake in Hypercity.
On October 5, Kishore Biyani-led Future Retail Ltd agreed to acquire K Raheja Corp group company Hypercity Retail (India) Ltd for `655 crore ($100 million) in a cash-and-stock deal. `155 crore will be paid in cash by Future Retail and issue shares worth `500 crore. 9.31 million shares at `537 a piece will be shared by the company, higher than its closing price at the BSE of `527.65. The transaction will strengthen Future Retail’s presence in the hypermarket segment. Hypercity was set up in 2004 and operates 19 hypermarket stores with a total area of
Approvals from stock exchanges and the Competition Commission of India will be needed, and the transaction is likely to be completed in three to five months’ time. The company operated 235 Big Bazaar hypermarkets, 54 Fbb outlets and 538 EasyDay stores as of March 2017. It also operated seven Foodhall stores, 30 Ezone electronic outlets and 37 furniture stores under the HomeTown brand, according to an analyst presentation. In total, it operated 901 stores in 240 cities across India. The acquisition of Hypercity is in line with Future Retail’s plan to expand its chain of hypermarket stores, in three to five years’ time, to 350.
RIDER TO TRANSFER JUDGE WAIVED: SC COLLEGIUM Thursday, October 05, 2017 The transfer of a Karnataka high court judge by the Supreme Court collegium, which led to his resignation, wasn’t its only controversial transfer recommendation. Led by Chief Justice of India Dipak Misra, the collegium transferred five judges, including Justice Jayant Patel, who put in his papers in protest. While Justice Patel’s second transfer was against his consent, the collegium, also comprising Justices J Chelameswar, Ranjan Gogoi, Madan B Lokur and Kurien Joseph, allowed the request of another HC judge to return to his parent cadre, Andhra Pradesh, waiving a condition attached to his elevation in 2013. The collegiums headed by CJIs Altamas Kabir and P Sathasivam received an undertaking from Naidu, then a lawyer, that he was willing to be posted in three HCs other than Andhra’s in 2012-13. Rumors that Naidu had professional links with the advocate son of Justice Chelameswar, and was related by marriage to Andhra CM Chandrababu Naidu surfaced. At the time, Naidu’s candidature faced opposition not just from members of the collegium, but also from the government, which returned his name after the SC recommended it. The government had raised objections to Naidu’s name by Justice A R Dave, and asked the SC to reconsider. But
the collegium stuck to its stand, pointing out that nowhere did the in-house objection hint anything remotely adverse about the candidate’s integrity. It maintained that, at best, Justice Dave’s objections were his “subjective views”. It repeated the recommendation but went by the opinion given by one of its members, Justice G S Singhvi, and made the appointment conditional on Naidu agreeing to be posted outside the Andhra HC. It asked him to give “unconditional consent” to the choice of three HCs instead of just the Madras HC, as he had initially indicated. It was only after Naidu consented to be posted anywhere among the HCs of Kerala, Karnataka and Madras that the collegium cleared his name and recommended it to the government for appointment. www.legaleraonline.com
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Within The Circle Divestment
HINDUSTAN UNILEVER SELLS 50% STAKE IN KIMBERLY-CLARK LEVER TO KIMBERLY-CLARK CORP On September 29, 2017, India’s largest Fast Moving Consumer Goods company Hindustan Unilever Limited (HUL) has entered into a share purchase agreement with Kimberly-Clark Corporation, U.S.A. (KCC) for divestment of HUL’s 50% shareholding in Kimberly-Clark Lever Private Limited (KCL) in favor of KCC. In 1995, a 50-50 joint venture was formed between HUL and KCC known as KCL for baby and child care and feminine care products in India under the brands ‘Huggies’ and ‘Kotex’ respectively. Vaish Associates acted as the external legal counsels for Hindustan Unilever Limited. Vaish Associates advised HUL on all facets pertaining to the sale of shares which involved drafting, negotiating and finalizing of definitive agreements. With a heritage of over 80 years in India, HUL is the market leader in Indian consumer products with presence in over 20 consumer categories such as soaps, detergents, shampoos, skin care, toothpastes, deodorants, cosmetics,
tea, coffee, packaged foods, ice cream, and water purifiers. HUL is a subsidiary of Unilever PLC. Kimberly-Clark Corporation is a global company dealing in essentials through product innovation and building our personal care, consumer tissue and K-C Professional brands. It is primarily engaged in the manufacturing and marketing of a wide range of products mostly made from natural or synthetic fibers and deals in brands like Huggies, Scott, Kleenex, Cottonelle and Kotex.
M&A
DLF’S CYBER CITY RENTAL ARM SELLS STAKE TO GIC FOR $1.9BN associates Mukul Sharma and Navin Kumar, principal associates, Ishita Khandelwal and Sumi Saikia. Partners Mrinal Kumar and Avnish Sharma and senior associate Shrutikirti Kumar worked collaboratively as the real estate team while the competition law team was led by partners Shweta Shroff Chopra and Manika Brar, and includes associates Supritha Prodaturi and Akkriti Bhatt. The other parties acting for DLF in the deal were Ernst & Young, who acted as the transaction advisor along with Morgan Stanley, and JP Morgan as the financial advisors. Realty Major DLF Limited has entered into an agreement to sell a stake of 33.34% in its rental arm, DLF Cyber City Developers Limited (DCCDL) to Reco Diamond Private Limited, an associate of the Singapore sovereign wealth fund, GIC Group, in a multi-stage transaction for an aggregate value of US $1.9 billion. Shardul Amarchand Mangaldas (SAM) advised and acted on behalf of DLF Ltd, led by its transaction team headed by Delhi-based executive chairman Shardul Shroff, and partner Akila Agrawal, along with senior November 2017 | Legal Era | www.legaleraonline.com
AZB & Partners acted as the legal advisor to GIC whereas Wadia Ghandy represented as legal advisor on real estate matters. The deal, estimated at a gross value of $1.9bn (`11,900 crores), involves a combination of secondary purchase of equity shares by the GIC affiliate for around $1.4bn (`8,900 crores) and two rounds of buyback for $0.5bn (`3,000 crores), to give effect to the agreed commercial terms. It is expected to conclude by November 2017.
Deal Corner Acquisition
ZEE ACQUIRING 9X MEDIA FOR `160 CRORE Zee Entertainment Enterprises (ZEE), which is Subhash Chandra-promoted, is acquiring 9X Media from private equity firm Rivendell PE LLC, earlier known as New Silk Route, and other shareholders for a total cash consideration of `160 crore. Punit Goenka, MD & CEO, ZEE, said, “Continuing with our strategy of expanding into regional markets and niche genres, we are pleased to announce this acquisition which strengthens our music portfolio. Music is an integral component of the consumer’s entertainment pie and we will offer our consumers a wider array of choices through these channels.” 9X Media operates five music channels - 9XM (Hindi), 9X Jalwa (Hindi), 9X Jhakkas (Marathi), 9XO (English) and 9X Bajao (Hindi). Shardul Amarchand Mangaldas & Co advised Zee with a team led by Partner Jay Gandhi along with Principal
Associate Arun Jerome and Associate Natalee Nanda. Economic Laws Practice acted for 9X Media and Rivendell PE LLC and the team was led by Partners Sujjain Talwar and Aakanksha Joshi along with Senior Associate Amruta Kelkar and Associate Tarini Menezes.
Acquisition
GIC AND K RAHEJA CORP FORM JV TO ACQUIRE 3-ACRE LAND AT WORLI (“JV”) shareholding to acquire a 3-acre land parcel from Siemens at the prime location of Worli, off Dr Annie Besant Road, for approximately US $94 million (INR 6.1 billion), last December. The joint venture company that bought the land parcel is Whispering Heights Real Estate Pvt Ltd. AZB & Partners advised GIC on the entire transaction. Sai Krishna Bharathan and Ananya Sharma were the concerned partners for this deal.
Affiliates of GIC, Singapore’s sovereign wealth fund, and K Raheja Corp Group (“KRC”); one of India’s leading real estate developers, have entered into a 50-50 joint venture
The date of signing of the deal was on December 30, 2016 and the deal completion happened on September 21, 2017. The joint venture plans to develop a landmark office development in the city of Mumbai. A KRC entity will provide support services for development and management of the asset.
Acquisition
BLACKSTONE BUYS 49% XANDER STAKE IN PUNE REALTY PROJECT Roughly 49% stake of Xander Group has been sold in Pune’s International Convention Centre (ICC), a mixed-use project of Panchshil Realty, to private equity giant Blackstone Group. Xander Group had picked up the stake through one of its PE funds in 2010 for roughly `500 crore. Blackstone has now paid somewhere between `1,100 and `1,200 crore for the asset. AZB & Partners acted for Xander with a team led by Partners Hardeep Sachdeva and Ravi Bhasin along with Senior Associate Devina Gupta and Associate Apoorva Sharma. Cyril Amarchand Mangaldas advised Blackstone
and the team included Corporate Partners Reeba Chacko and Shishir Vyattaden, Real Estate Partners Namrata Kolar and Mridul Kumbalath and Competition Partner Anshuman Sakle. www.legaleraonline.com
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COVER STORY
We Salute… T he first-ever Indian woman in law, Cornelia Sorabjee, graduated as far back as in 1897, cleared the pleaders’ exam of the Allahabad High Court in 1899, and was recognized as Barrister in 1923, after the law barring women from practising was altered. In the decades that followed, an increasing number of women entered the legal profession, so much so that today, they enjoy a prominent presence in this sphere as they do in all other walks of life. Statistically speaking, there were a reported over 20,000 female members of the Bar Association of India in 2014, holding good positions in their chosen fields of specialization. The growing number of women in law has also been due to the fact that the legal industry itself has witnessed a sea change in the past decade or so, especially on the transactional side, where a burgeoning number of law firms are offering a relatively gender-neutral organizational alternative to women lawyers desirous of pursuing a corporate legal career. Yes, this is an important phase in the history of the Indian legal profession, particularly for women, and it is exhilarating to see a smattering of women unraveling unparalleled success, serving as inspiration not only for aspiring women lawyers in India but also across the globe. As they say, however, the more things change, the more they remain the same! And so it is that the litigation side continues to be male-dominated and while Anna Chandy went on to become the first woman judge of an Indian High Court as early as 1959, it wasn’t until four decades later that
Justice M. Fathima Beevi became one of only six women to have made it to the highest court of the land. In a similar vein, the country saw its first woman Additional Solicitor General, i.e., Indira Jaising, not before 2009. Even today, the High Courts of Delhi and Mumbai are the only ones to have women Chief Justices. Forget higher echelons of the judiciary, there are less women advocates in the whole of India than there are men advocates in the state of Uttar Pradesh alone. The reasons for a dwindling number of women lawyers making it to top- or even mid-level positions are many. Aside of a clutch of women who have broken the glass ceiling so to speak in this profession, a majority continue to grapple with gender biases and discriminatory practices (even if they don’t seem so on paper); yawning wage gaps; and having to walk the tightrope between professional and familial & personal obligations. Then again, the very same qualities that have endeared women to their traditional duties of home and hearth, i.e., sensitivity, strength, and compassion are the ones that are most likely to push them towards the zenith in this vocation. A fact recognized by no less than Margaret Thatcher, former British Prime Minister and Barrister, when she famously said, “Any woman who understands the problems of running a home will be nearer to understanding the problems of running a country.” In this edition of Legal Era, we celebrate some formidable women in law, who, despite being proud to be women, have carved a niche in an otherwise male stronghold…
Women in Law November 2017 | Legal Era | www.legaleraonline.com
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JUSTICE R. BANUMATHI Judge, Supreme Court of India
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ustice R. Banumathi is not only highly qualified and experienced but also is an empathetic judge known for her fair judgments. Currently, a Judge of the Supreme Court of India, Justice Banumathi has earlier served as Chief Justice of Jharkhand High Court. Her long, professional journey commenced in 1988, when she joined the Tamil Nadu Higher Judicial Service as a direct recruit District Judge. As a Sessions Judge, she dealt with a number of landmark cases that are applauded even today in Tamil Nadu and headed a one-person commission on police excesses by STF in Chinnampathy village, Coimbatore district, in 1995-1996. Her work sought recognition, and she was elevated as Judge of the Madras High Court in 2003. In November 2013, she was not only transferred to the Jharkhand High Court but also appointed as the Chief Justice of that court. As Chief Justice, she dealt with many important cases, including a ban on Jallikattu or the bull-hugging sport. Justice Banumathi banned Jallikattu stating that the act was a cruelty to the animal more than it posing a threat to humans. The verdict paved the way for formulating regulations relating to Jallikattu. In August 2014, Justice Banumathi stepped up to becoming Judge at the Supreme Court of India, after her name was recommended for the post by then Chief Justice of India Rajendra Mal Lodha. She is the second woman Sessions Judge to rise to the country’s highest court. Her judgment and contribution to the Nirbhaya gang-rape case are much remembered where a 113-page judgment was passed against the accused, firmly standing the grounds for severe punishment to the convicts.
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JUSTICE GITA MITTAL Chief Justice, Delhi High Court
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ustice Gita Mittal is currently the Chief Justice of Delhi High Court. She supervises a division bench hearing writ petitions arising out of orders of the Central Administrative Tribunal and other service matters. She started her legal practice in 1981, and ever since, there has been no looking back for her. She has had an illustrious legal practice in all courts and other judicial forums and was appointed Additional Judge of the Delhi High Court in 2004. Within a short span of 2 years, she was confirmed as permanent Judge of the Delhi High Court in 2006. As a Judge, Justice Gita has presided over several jurisdictions, including heading a division bench hearing criminal appeals involving life and death sentence references; matters of the Armed Forces; Cooperative Societies; Criminal Contempt References; Criminal Appeals; Death References; Company Appeals; Writ Petitions; and Letters Patent Appeals relating to the Armed Forces. An important escalation in Justice Gita’s career graph came when she was appointed as a single judge Tribunal under the Unlawful Activities (Prevention) Act, 1967 in February 2008 to examine the government ban on activities of the Students of Islamic Movement in India (SIMI). As sensitive as the subject was, Justice Gita dealt with it with utter grace and just means. Justice Gita was awarded the ‘Distinguished Alumna Award’ in 2008 from the Vice President of India. Moreover, many national and international forums have recognized her talent and invited her to speak on various topics such as gender issues, impact of incarceration on women, corporate laws, and women’s rights. A fighter and a survivor, Justice Gita says all her achievements have come to her only with a pinch of salt.
November 2017 | Legal Era | www.legaleraonline.com
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JUSTICE DR. MANJULA CHELLUR Chief Justice, Bombay High Court
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ustice Dr. Manjula Chellur is the Chief Justice of the Bombay High Court. She is the first woman advocate of Bellary. Justice Manjula joined the Karnataka Judicial Service as District Judge in April 1988. She got her fellowship on Gender and Law in 1997 at Warwick University, UK. She was appointed the first woman Judge of the Karnataka High Court in February 2000 and was soon promoted as permanent Judge there. She was also the Executive Chairperson of the Karnataka State Legal Services Authority and took keen interest in the welfare of transgenders and organized seminars throughout the State of Karnataka. In recognition of her outstanding contribution in the field of law, the Karnataka State Women’s University, Bijapur, conferred an honorary doctorate on Justice Manjula in March 2013. She assumed the office of Chief Justice of Calcutta High Court in August 2014 and became 37th and the first ever woman Chief Justice of Calcutta High Court.
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JUSTICE INDIRA BANERJEE Chief Justice, Madras High Court
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ustice Indira Banerjee assumed charge as the Chief Justice of Madras High Court on 5 April, 2017.
On 8 August, 2016, she assumed charge as the seniormost Judge of the Delhi High Court and was the Executive Chairman of the Delhi State Legal Services Authority. She was Chairperson of the Calcutta High Court Legal Services Committee for several years and officiated as the Executive Chairperson of the West Bengal Legal Services Authority from 9 October, 2015 till her transfer as a Judge of the Delhi High Court. In July 2013, she was nominated to undergo training in Judicial Administration at the Civil Services College, Singapore. Justice Banerjee had been a Member of the Committee of Good Governance of the West Bengal Judicial Academy for almost a decade. She was also the Treasurer of the Calcutta Chapter of the Indian Law Institute. She is a Member of the General Council and the Executive Council of the National University of Juridicial Sciences, Kolkata. She enrolled as an Advocate on 5 July, 1985 and had an extensive practice both in the Original Side and Appellate Sides of Calcutta High Court in all branches of law, except Criminal Law. After 16½ years of practice, she was appointed Permanent Judge of Calcutta High Court on 5 February, 2002. She is a Resource Person of the National Judicial Academy, Bhopal and other Judicial Academies. Justice Banerjee was born on 24 September, 1957, in Calcutta. She studied at Loreto House, Calcutta, after which, she graduated from Presidency College, Calcutta, with an Honours in History. She studied Law at Calcutta University College of Law.
November 2017 | Legal Era | www.legaleraonline.com
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JUSTICE Prathiba M. Singh Judge, Delhi High Court
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levated as permanent Judge of the Delhi High Court on May 15, 2017, Justice Prathiba M. Singh was formerly a leading Intellectual Property (IP) lawyer with the distinction of having handled landmark cases across all areas of Intellectual Property Rights (IPR). As Managing Partner of Singh & Singh, she advised clients and handled cases relating to commercial disputes, arbitration, telecom, broadcasting laws, media laws, writs, regulatory issues, and education. She regularly appeared before the Hon’ble Supreme Court of India and was appointed Amicus Curiae by the Delhi High Court to streamline the work of the Copyright Office, among other accomplishments. Justice Prathiba was designated Senior Advocate by the Delhi High Court in December 2013. A member of various professional bodies and a recipient of a slew of awards and accolades, Justice Prathiba completed her five-year law course from University Law College, Bangalore. She graduated as a 1st Rank holder from Bangalore University and also represented India at the Philip C Jessup Moot Court Competition in Chicago, USA. Justice Prathiba was offered the ODASSS scholarship by the Cambridge Commonwealth Trust to study LL.M at the University of Cambridge (U.K.). She enrolled with the Bar in 1991. The Prathiba M. Singh Scholarship for LL.M students has been instituted at the University of Cambridge beginning 2013.
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INDIRA JAISING Advocate, Supreme Court of India
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ndira Jaising is an advocate of the Supreme Court of India. She is an Indian lawyer noted for her legal activism in promoting human rights causes.
Indira has argued several cases in relation to discrimination against women, including Mary Roy’s case, which led to the grant of equal inheritance rights for Syrian Christian women in Kerala, and Rupan Deol Bajaj, the IAS officer who prosecuted KPS Gill for outraging her modesty. Incidentally, this was one of the first cases of sexual harassment that was successfully prosecuted. Among others, Indira also argued the case of Githa Hariharan, in which the Supreme Court held that under the Hindu law, the mother was also the ‘natural guardian’ of her minor children, so that the children could also bear the name of the mother. She is Founder Secretary of ‘The Lawyers’ Collective’, an organization that provides legal funding for underprivileged sections of Indian society.
November 2017 | Legal Era | www.legaleraonline.com
COVER STORY
INDU MALHOTRA Senior Counsel, Supreme Court of India
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ndu Malhotra is a Senior Counsel practising in the Supreme Court of India for the past 30 years. Born to a father who too was Senior Advocate in the Supreme Court of India, Indu joined the legal profession in 1983, starting off as Lecturer in Political Science at Delhi University. Later, she was qualified as Advocate-on-Record in the Supreme Court. She was appointed as Standing Counsel for the State of Haryana in the Supreme Court from 1991 to 1996. She represented various statutory corporations such as the Securities Exchange Board of India (SEBI), Delhi Development Authority (DDA), Council for Scientific and Industrial Research (CSIR), and Indian Council for Agricultural Research (ICAR) before the Supreme Court. In 2007, she was designated as Senior Advocate by the Supreme Court of India. She became the second woman to be designated by the Supreme Court after a gap of over 30 years. Indu has authored three editions of a commentary on law and the practice of arbitration and conciliation and has a specialization in the law of arbitration.
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MEENAKSHI ARORA Senior Advocate, Supreme Court of India
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eenakshi Arora, Senior Advocate in the Supreme Court of India since 1985, brings to the table over 29 years of experience and expertise in the field of litigation and is considered one of the leading counsels in the country. In 1984, Meenakshi got enrolled at the Bar, and since 1986, she has been practising law at the Supreme Court of India. In 1989, she qualified and became Advocate-on-Record at the Supreme Court. For a brief period, she also worked with Goodwin and Soble, an international law firm based in Washington DC. In 2010, her name was recommended by judges’ collegium for elevation as Judge of the Delhi High Court; however, she later withdrew her consent from the judgeship. She was more inclined towards working as Advocate and doing
November 2017 | Legal Era | www.legaleraonline.com
concrete work for the women of the country. She was also the standing counsel for the Election Commission of India. In September 2013, a full bench of Supreme Court headed by then Chief Justice of India P. Sathasivam designated her as Senior Counsel/Senior Advocate, being only the fifth woman to be designated so. A golden feather in her cap got placed when she became a member of the Gender Sensitization and Internal Complaints Committee of the Supreme Court. She was one of the prominent advocates whose persistent efforts led to the framing of the Vishakha Guidelines, which later culminated into the legislation of the Sexual Harassment of Women at Workplace Act, (Prevention, Prohibition and Redressal), Regulations, 2013.
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VRINDA GROVER Advocate, Supreme Court of India
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rinda Grover is a lawyer, researcher, and human rights and women’s rights activist based in New Delhi, India. As a lawyer, she has appeared in prominent human rights cases and represented women and child survivors of domestic and sexual violence; victims and survivors of communal massacre, extrajudicial killings, and custodial torture; sexual minorities; trade unions; and political activists. She is profound and immensely passionate about her work. A believer in the principle that justice should reach everyone and not just privileged Indians at the top rungs, Vrinda has appeared for victims in prominent cases such as the Soni Sori rape-torture case, the 1984 anti-Sikh riots, the 1987 Hashimpura police killings, the 2004 Ishrat Jahan case, and the 2008 anti-Christian riots in Kandhamal. She has contributed significantly to drafting of the 2013 Criminal Law Amendment to the law against sexual assault; the Protection of Children from Sexual Offences Act, 2012; and the Prevention of Torture Bill, 2010, a law for protection from Communal and Targeted Violence; among others. Presently, Research Fellow at the Nehru Memorial Museum & Library, Delhi, Vrinda serves in several international human rights’ organizations.
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PINKY ANAND Additional Solicitor General of India, Supreme Court of India
November 2017 | Legal Era | www.legaleraonline.com
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Describe your journey as a leading woman lawyer? I decided to become a lawyer as a fresh graduate. I think the major motivation came from the fact that I was an active member of the political scene in the Delhi University. I was brought into politics at the level of Delhi University when I was at the Campus Law Centre. I was the first woman secretary in the Delhi University Students’ Union and had full opportunity to engage in social activism.
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inky Anand is an Indian lawyer designated as Senior Advocate and is also a politician. She is currently the Additional Solicitor General of India at the Supreme Court of India. In 2007, Pinky was designated as Senior Advocate, and in 2014, she was appointed as Additional Solicitor General of India. She is the second woman lawyer to be appointed to this post after Indira Jaising was appointed in the UPA 2 tenure. Pinky represented the French government in the famous case of Clemenceau against genetically modified food in India, etc. She was also Arbitrator with the Indian Council of Arbitrations. According to Pinky, her life-changing court case was when she, then a novice in law, appeared against reputed Jurist L. M. Singhvi and eventually won. Pinky is considered an expert in the field of constitutional law, property, private international law, family law, environmental law, and corporate law. She was Head of All-India Legal Cell at BJP and is former Additional Advocate-General for the State of Uttarakhand.
I chose law as I appreciated its independent professional status. It has not always been an easy journey. When I joined the profession, it was predominantly maledominated. I was fortunate to have the tutelage of the best from my professors at Harvard Law School and Lady Shri Ram College. I was lucky to have received the best in education and support, especially from Mr K K Luthra, Senior Advocate, during my initiation into the profession. Not having any family in this line, I had to learn the ropes the hard way. Starting from the Trial Courts, I made my way upwards. I would advise others to use the same path. I love the challenges of law. What I find exciting is the unchartered territories; issues that impact large cross-sections of society; constitutional issues; emerging issues. There are so many cases that I have been involved with that I find it difficult to enumerate. To name a few, the triple talaq case, the case of the French ship Clemenceau brought into India for ship breaking; the Khushboo matter which became path-breaking for freedom of speech; framing of guidelines for good Samaritans in accident cases; legalizing e-rickshaws; bringing drinking water to Delhi; effectively doing away with the pernicious practice of Devdasis: amplifying the dimensions of domestic violence laws, strengthening family planning policies in India; the SEBI case where recently judgment was pronounced upholding the SEBI amendments, paving the way for efficient and active disposal of cases; the constitutional case of Arjun Munda CM which led to his becoming the CM; delimitation cases; and scores of others.
Describe the challenges that you have faced as a leading woman lawyer? As I said, at the time when I entered the profession, it was a male bastion. There was only a smattering of women, and that too, at junior levels. Women had just started to come out in the light and flourish throughout the country. It was only the beginning. Not only that, law at that time was not considered a desirable profession, being rather exacting in most ways. Today of course, law is the most-sought-after profession. I was in any case not only the first lawyer, but the first professional in my family. I hail from a business family and had no silver spoon or lineage advantage. I had to chart my own course. Women lawyers were hardly at the top of the profession or preferred. The general mindset placed women as amateurs. I will be honest to say that in my case, recognition came easy - it was never a real battle. You needed to prove your seriousness and commitment and somehow that worked. I consider myself blessed that fate has been kind. I was a debater and speaker at all levels, which helped me along the way. Positions of importance were given at all stages, academic, extra-curricular, political, professional. I got an opportunity to hone my skills. Living in Delhi, it was the notion for a change that propelled me to excel in the field. I chose to start working with women-centric laws because at the time, they needed to be developed. The mindsets needed to be changed. It warms my heart to see that the changes that I envisioned all those years ago have come to pass today, and I consider myself fortunate to have played a part in precipitating them. www.legaleraonline.com
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Zia Mody Founder And Managing Partner, AZB & Partners
November 2017 | Legal Era | www.legaleraonline.com
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ia Mody established the Chambers of Zia Mody in 1984, which then became AZB & Partners in 2004. The firm has offices in Mumbai, Delhi, Bengaluru and Pune with an integrated team of approximately 400 legal professionals. One of India’s foremost corporate attorneys, Mody worked as corporate associate at Baker & McKenzie, New York, for five years before moving to India to set up her own practice. Mody passed her law degree from the University of Cambridge in 1978 and was enrolled as an Advocate with the Bar Council of Maharashtra & Goa in 1978. She did her LL.M from Harvard Law School and was then admitted as a member of the New York State Bar by examination in 1980. Mody is an internationally acclaimed lawyer who sits on the Boards of global organizations such as HSBC Asia Pacific, International Council for Commercial Arbitration (ICCA) and so on. Back home, she has served on committees constituted by bodies such as the Confederation of Indian Industry (CII), the Ministry of Corporate Affairs, SEBI and RBI among others. Among the umpteen awards and accolades Mody has received, she won “Professional of the Year, 2017” at the inaugural UK-India Awards and has been listed by Forbes India as one of India’s 10 most powerful women in 2013, 2014 and 2015.
Describe your journey as a leading woman lawyer? The journey has been a difficult one but in hindsight, extremely satisfying. It is also important that India could produce women lawyers who have made a mark, although they are unfortunately very few in number.
Describe the challenges that you have faced as a leading woman lawyer? The challenge I faced as a young counsel in the Bombay High Court was basically being possibly one of the only women counsels who actually argued. The nervousness with which I prepared had a lot to do with the fact that I was one of these only women whose voice was being heard. Firstly, I did not like to lose. Secondly, I had to be over prepared. And thirdly, I could not handle any one making fun of me!!
Describe the milestone cases/matters that form the silver lining of your career? I would say that the milestone cases in my career were during my earlier years as a junior counsel when I got the opportunity to argue many public interest litigation matters on my own since clients had no money to pay for a senior lawyer. When it comes to corporate M&A, one of the milestone matters for me is the global acquisition by Tata Steel of Nat Steel across several jurisdictions. That was one of India’s first ODIs and also remains with me as a matter I learnt much from.
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MANJULA CHAWLA Co- Founding Partner, Phoenix Legal
November 2017 | Legal Era | www.legaleraonline.com
COVER STORY Describe your journey as a leading woman lawyer?
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anjula Chawla is a Founding Partner of Phoenix Legal. Her practice concentrates on areas of strategic corporate investments, corporate finance and restructuring, mergers & acquisitions, joint ventures, and general corporate and commercial matters. She is also involved in complex litigation and dispute resolution matters. Among a handful of professionals who chose to become a corporate lawyer at a time it was unheard of, Manjula, has assisted many multinational companies, including Fortune 500 companies, in establishing their presence in India since the early years of liberalization. She advises her clients on a wide range of issues including anti-corruption laws, competition law, corporate governance, exchange control laws, data privacy and protection, outsourcing, intellectual property protection, labor and employment, and real estate. She is experienced in handling litigation and arbitration matters arising out of commercial contracts on behalf of her international clients. She has structured, negotiated and drafted a wide range of business transactions for foreign investors and multinational corporations over the years. Among other achievements, Manjula has written extensively in Indian and international journals and contributes every year to the World Bank’s Doing Business in India project. She is the winner of several awards and honors, more notable among them being the National Law Day Award – 2000 conferred on her by the then Union Law Minister for “Excellence in Corporate Law and for unique contribution in bringing foreign exchange into India” and being featured in the 100 Legal Luminaries of India, a publication of Lexis Nexis, which throws light on some of the most illustrious legal minds in India.
I started as a litigator as most of my peers did at that time. However, I found my right place when, soon after economic liberalization in 1991, I moved to corporate law and started advising on cross-border transactions. The journey involved a lot of hard work and dedication but for the most part, l was enjoying what I was doing. Also, there was excitement in becoming a part of the changing economic climate, and working for world famous multinational companies, which were entering India for the first time. The last few years have been spent in building Phoenix Legal, which I co-founded along with three brilliant lawyers. Next year, we will be celebrating 10 years of the firm and are in the process of putting some big plans in place to take the firm to the next level. So, the journey is still on.
Describe the challenges that you have faced as a leading woman lawyer? Honestly, I did not face any particular challenge or discrimination, being a woman lawyer. The profession of law is demanding and I believe that the challenge to maintain a work-life balance is equally good for men as it is for women lawyers. The challenge was really the transition from court practice to corporate law practice in 1993, as it was at a time, when there were hardly any corporate lawyers around and I had literally no idea what this practise was all about. There were no conventional briefs or cases and everything was about deals, FIPB approvals and commercial advice. There were hardly any precedents to follow, or lawyers who could guide. I had to learn pretty much on my own. There was a complete shift in the work culture and the nature of legal advice. The clients not only needed legal advisory support but also practical solutions and I realized that I had to understand their industry and wear a business cap. I also had to learn to keep up with different time zones over faxes and telephone calls. Also came the liberalization that you cannot do all the work yourself. It was challenging to make sure that junior lawyers are also able to provide quality advice and communicate it with clarity in a timely manner, which was expected from corporate clients across the globe. A lot of time was spent in training and mentoring juniors and managing work streams. Over the years, the corporate practice has taken in all this, but not way back in 1993.
What are the cases you would say form the silver lining of your career? There is no one case or deal, which can be said to be a silver lining in my career. There were many cross-border deals done over a period of time, particularly from 1995 to 2001, where I became the sole point of contact for foreign clients and was managing all aspects of the transaction for them from the start to the closing. There were a string of innumerable deals in a variety of sectors such as telecom, chemicals, IT, automotive and power. A few transactions that instantly come to mind and I think added greatly to the growth in my career include acting for one of the shortlisted bidders for purchase of Government stake in VSNL, Lubrizol USA on a joint venture with Indian Oil Corporation, Pray on Rupel SA in acquisition of chemical plants in Gujarat, Johnson Controls Inc in acquiring stake in Amara Raja Batteries and joint venture with a TATA group company, Ford Motor company on demerger of Visteon, Panasonic Corporation joint ventures with Videocon, Intel on acquisition of start-ups and Air Liquide in several of its acquisitions.
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MANISHA SINGH Founder Partner, LexOrbis
November 2017 | Legal Era | www.legaleraonline.com
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Describe your journey as a leading woman lawyer?
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anisha Singh, Founder Partner, LexOrbis, India’s premier Intellectual Property law firm providing end-toend IP services and solutions is a distinguished lawyer with over 20 years of experience. Manisha founded LexOrbis in 1997 with a set of like-minded lawyers to bring an international perspective to Indian intellectual property right laws that were in the process of being integrated with International IP systems post signing of the TRIPS agreement by India in 1995. Manisha worked closely with policy makers, the judiciary and other stakeholders to establish a robust and level-playing IP regime in India and continues to work on critical and high-stake policy-related cases. Manisha is ranked among the leading IP and dispute resolution lawyers, and is known for her proactive, out of the box, business-oriented counseling and representation. Her in-depth understanding and knowledge of all aspects of IPR is reflected in her prolific, academic and research-based writing in renowned publications worldwide as well as her public speeches and commentaries. A member of many significant IP forums and professional bodies in India and abroad, Manisha studied law from Campus Law Centre of Delhi University after completing her Master’s degree in Economics.
The journey has been so challenging but fulfilling. When I started my career with a general practice firm around 20 years back, the economic spectrum of the country was undergoing a paradigm shift, particularly with the introduction of the New Economic Policy of 1991 and consequent opening up of the economy for multi-national corporations. Around the same time, India signed the TRIPS Agreement and committed to amend national IP laws to make them compliant with international standards. The IP laws and system in India at that stage were designed to serve local players who very sparsely using the system. At that stage, I, along with my other founder-partners, conceptualized setting up a specialized IP practice firm with the fine blend of legal acumen and technology expertise to assist international players interested in protecting and enforcing their IP assets in India. Though, we were abreast ourselves with international standards and applied them in our firm, the ecosystem in which we were operating was not geared to such a service model. It was also very difficult for us at that stage to motivate and inspire young engineers and scientists to take up and pursue law as a profession. Being a woman, my comments and positive criticism on the system and proposals for improving the same, initially, were not taken seriously by most. But I continued to tread my path and today, I am witnessing the system not only responding to what we used to argue a decade ago but also playing an active role in implementing systems which are transparent, user-friendly and respect the ingenuity of the human mind. To witness those changes in the Indian IP system is indeed very fulfilling.
Describe the challenges that you have faced as a leading woman lawyer? I faced the same social cultural challenges as a lawyer which any other woman professional would have faced. Most important was the general attitude of officials and those in higher positions and at times, the judiciary as well, of not giving serious audience to women professionals and making one or the other attempt to trivialize the thought process mostly on the pretext that such thoughts were “impractical”. I faced the same issue both externally and internally in the firm. In the beginning, this was very disturbing and annoying but slowly, I learned how to tackle it. That also helped me to improve my articulation with a touch of firmness. In 1990 and early 2000, most of the clients, particularly the legal heads of Indian companies were also not very confident about engaging women business lawyers. The expertise of women lawyers was perceived within the field of matrimonial laws or other social laws but not anything to do with economy, business or technology. However, this mindset has dramatically changed in the last decade or so and I am happy that I have more than 50% women professionals working with LexOrbis and many more as client representatives.
Take us through some of the cases you may describe as the silver lining of your career. There are many. I am proud of arguing many cases which resulted in grant of valuable patents for my clients in India in the field of telecommunications, software and life sciences. Some of the leading trademark, patent and design litigations also added a feather to my cap. I am also proud to have a team of 65 dedicated and highly credible attorneys now working with LexOrbis and we are growing exponentially. I am also happy that we could make LexOrbis a professional organization and one of the most sought-after law firms for lawyers, engineers and scientists.
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NINA GUPTA BHASIN Senior Partner, Bhasin And Company, Advocates, Delhi And Mumbai
Bhasin & Co., Advocates November 2017 | Legal Era | www.legaleraonline.com
COVER STORY Describe your journey and challenges as a woman professional? Like everyone else, the first people I opened my eyes to on this planet were my loving and caring parents. My mother Savitri Gupta was my mentor and best friend till the end of her journey in 2012, and my father B. Gupta, who himself is an advocate of eminence, is my inspiration, first guru and guide. Both my parents played a very supportive role in my life and inspired me to study law. It was all in the family as my grandfather Kunwar Khush Waqt Rai was also an advocate and Member of Parliament.
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s Senior Partner, Bhasin and Company, Advocates, Delhi and Mumbai, Nina Gupta Bhasin is in charge of Supreme Court litigation. She also specializes in labor and employment laws; aviation law; domestic and international arbitration; constitutional law; real estate; IT laws; incorporation of companies in India; banking law; and medicolegal cases. She advises the likes of Microsoft, Accenture, and Nokia apart from leading Indian business houses. Appointed an arbitrator by the International Chamber of Commerce, Ms Bhasin is Vice President of the Delhi Chapter of the Society of Indian Law Firms. A recipient of several awards and accolades, she also provides pro bono legal services to the poor and needy. Ms Bhasin has a degree in economics (honors) from Lady Shriram College, Delhi, and LLB from the Law Faculty, Delhi University. She has over 38 years of experience and has held the position of Member Executive of the Supreme Court Bar Association.
By following in the footsteps of my grandfather, father and my sister, Bina Gupta, who is presently an Advocate-on-Record of eminence, I completed law in 1979 and before even waiting to be enrolled at the bar; I joined Bhasin and Company as a junior. From here onwards began a new chapter in my professional life. I was lucky to have a senior like Dr. Lalit Bhasin who believed in giving full independence to his juniors to hold the steering wheel but at the same time keeping his foot on the brakes. Initially in 1979, I started working in the Labor department of our Firm and in 1980, I moved on to look after suits and writ matters in Delhi High Court. An air crash of Boeing 707, Air India, completely changed my path as I was asked to move to Bombay to take charge of the matter on behalf of Air India relating to a statutory Commission of Inquiry presided by late Justice Sawant of Bombay High Court. In these proceedings, I got the opportunity to brief late Goolam Vahanvati who later became Attorney General of India. While in Bombay, I was told by Dr. Bhasin to set up an office in Bombay which I was able to do in 1982. With the setting up of the office under the guidance and resourcefulness of Dr. Bhasin, I was able to develop good clientele for my Bombay Office. I got God-sent opportunities to travel around the world on work relating to consultancy on Indian Laws and arbitration in the London Court of Arbitration. With the handling of briefs relating to air accidents on behalf of Air India, Indian Airlines, Vayudoot and Pawan Hans, soon I developed a reputation of an expert on disaster management and this was followed by my getting a chance to handle the most tragic air accident ever in aviation history being that of the mid-air collision of a Saudi Arabian aircraft with Kazakhstan aircraft over Charkhidadri. I was extremely fortunate to work with eminent senior counsel like Fali S Nariman, Soli J Sorabjee, Nani Palkhivala, Ram Jethmalani, KK Venugopal, Ashok Desai, late Anil Divan, MC Setalwad, I M Chagla, Rafiq Dada, RF Nariman, Harish Salve, Arun Jaitley and Mukul Rohatgi. I have had the opportunity to advise big business houses, multinational companies, banks and financial institutions, public sector companies and presently, I am heading the Supreme Court ligation department of the Firm. I have been appointed as an arbitrator by the International Chamber of Commerce to arbitrate on international disputes. I also happen to serve the bar in the Executive of Supreme Court Bar Association and presently, I am Vice President of the Delhi Chapter of the Society of Indian Law Firms. In 2016, I was honored by Legal League Consulting with the ’Woman of Substance Award’. Recently, I have also been bestowed with “Exceptional Woman of Excellence Award” by All Ladies League and Women’s Economic Forum. My all time Guru and husband Dr. Lalit Bhasin gave me the platform of his Firm from where I started my professional journey 38 years back. Fortunately, I have only beautiful memories of success and contentment to look back at. For me, my work is passion and irrespective of the financial status of my client, I believe in working with the same zeal and dedication on all my assignments. As they say, lawyers never retire. I want to work and wear my robes till God decides to take me away in his chariot into his world of bliss.
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SHWETA BHARTI Senior Partner, Hammurabi & Solomon
November 2017 | Legal Era | www.legaleraonline.com
COVER STORY Describe your journey as a leading woman lawyer?
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hweta Bharti is Senior Partner at Hammurabi & Solomon, a leading full-service law firm in India, and possesses nearly 16 years of experience in litigation and dispute resolution. Shweta has represented clients in all facets of corporate litigation and strategy. Shweta is Chairperson of the Environmental Law Committee of Inter-Pacific Bar Association (IPBA), General Secretary of the Society of Women Lawyers (SOWL), and a very active member at various other international forums, including the International Bar Association (IBA), Organization for Economic Co-operation and Development (OECD), Society of Indian law Firms (SILF) and I-Tech Law. Shweta holds a LLB and a MBA and is the recipient of several awards and accolades, the most recent being “Women Leader in Legal” by the Indian Women’s Convention, 2016. Shweta also provides free legal assistance to the poor and destitute through various NGOs and other organizations.
The journey so far has been very exciting and I look forward to even more interesting times in future. Post Law College, as a new entrant into the field of litigation, being a first-generation lawyer, there were challenges galore. However, I found the judges very encouraging and supportive of young lawyers and that gave an opportunity to a new entrant like me to articulate my arguments and present the same rather effectively. I also got the opportunity to work with the best in the industry which expedited my learning curve which also helped me learn the nuances of law and its effective implementation. In today’s scenario, being a woman lawyer has undergone a paradigm shift, and we are more accepted by clients, fellow lawyers and judges. The legal profession is no longer looked upon as a male bastion and some of our illustrious woman lawyers have not only broken the glass ceiling but have proved the contrary with their strength, grit and determination.
Describe the challenges that you have faced as a leading woman lawyer? As a woman lawyer, even after the change in scenario, the situation remains extremely challenging, and the tasks ahead are humungous. The clients are from all segments of society and while those who have evolved or come from an educated family background are more accepting of woman lawyers, there still exists a segment of clients for whom this will take time as there is still a lack of trust and faith. During the discharge of our duties, we are also required to travel outstation to smaller towns and cities, to the District and Munsif Courts, where women lawyers are accepted very little and thus, there is a necessity for more women lawyers to not only join the profession but also practice in these District and Munsif Courts in order for women to gain more acceptance and admiration. The other real challenge that I foresee as a woman lawyer is to fix the leaky pipeline. We lose a major part of the female workforce post marriage, child birth and child rearing. Working from home is still a considerably alien concept for the legal industry, and thus women find it extremely difficult to overcome hurdles of family obligations while continuing to discharge their professional obligations. Speaking for myself, I had my share of hassles that a working woman has to go through and being a mother of two growing girls, I had to insulate myself from the day-to-day rigmarole of falling short of familial expectations. There have been days when my children would be sick, needing me besides them and I would have an urgent hearing to attend for which the client had engaged me and was looking to me for delivery. There have been moments of guilt, pain and sacrifice, which have made me more balanced, more rational and more pragmatic as an individual. I firmly believe in the 3P’s - patience, perseverance and persistence which pave the way to success and these cuts across gender.
Which are the cases you would say form the silver lining of your career? There have been various milestone cases that not only gave me an opportunity to emerge as a lawyer but also excel in the field of Law. While growing up in the profession, I have had my share of burning the midnight oil, as there are really no shortcuts to success and no substitute for hard work. At the onset of my career, there have been cases where the Petition would be drafted overnight, presented before the Court in the morning for listing on the same day at 2.30 PM and filing before lunch, so the matter could be taken up for hearing at 2.30 PM with orders in hand by 4.30 PM. These cases were not only challenging but also a great learning experience. We handled various infrastructure disputes having ramifications on all National Highway projects. We also handled a major joint venture dispute related to a foreign company trying to set up base in India, which was vehemently resisted by the local Indian partner, which led to a slew of inter se litigations between parties. We also successfully handled various international arbitration disputes under the aegis of ICC, LCIA, SIAC, etc., which exponentially enhanced my learning curve.
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PALLAVI S. SHROFF Managing Partner, Shardul Amarchand Mangaldas
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allavi S. Shroff is the Managing Partner of Shardul Amarchand Mangaldas; the National Practice Head of Dispute Resolution at the firm; and mentors the Competition Law practice. Pallavi has been closely involved with some of the largest and most challenging litigation and arbitration cases in India with regard to energy, infrastructure, natural resources, mergers & acquisitions, legislative and policy-related matters. She appears regularly before the Supreme Court and the High Courts of India, and in arbitrations, mediations and international legal disputes. She also regularly advises and represents international and national clients on various aspects of Competition Law. Pallavi has over 34 years of extensive experience in Litigation, Arbitration and Competition Law. Her broad and varied representation of public and private corporations and other entities before legal institutions have earned her national and international acclaim. She is the only Indian lawyer listed as a ‘Highly Regarded Individual’ in the Who’s Who Legal 2016 for her acumen in Litigation. She is highly ranked and acclaimed by various other publications and ranking institutions for her acumen and thought leadership. She is a member of the Supreme Court Bar Association and the Delhi High Court Association among others.
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Damini Marwah General Counsel, Axis Bank Limited
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s General Counsel, Axis Bank Limited, Damini Marwah specializes in restructuring and the turnaround of non-performing assets, and brings a strong understanding of Indian regulatory and strategic matters.
During Damini’s term with Axis Bank Limited, the Legal Department has actively contributed towards development of key legislation in the Banking and Finance sector, and has proactively participated in various high-level meetings involving legal and industry experts to discuss and shape key policy and legislative developments in the Banking and Finance sector. Damini’s wideranging experience enables her to offer insights on transactions from a variety of perspectives. Damini has close to two decades of experience and has worked extensively in project finance, corporate finance, structured finance and private equity. She has a strong reputation in India in the debt financing, restructuring and insolvency space. In the recent past, Damini has contributed as key participant at high-level industry debates and think-tank meetings on the recently enacted Insolvency and Bankruptcy Code, 2016. She was awarded “Rising Corporate Counsel” by Legal League Consulting at the Leadership Excellence Award, 2017.
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DEBOLINA PARTAP General Counsel And Vice President Legal, Wockhardt Group
November 2017 | Legal Era | www.legaleraonline.com
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Describe your journey as a leading woman lawyer?
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ebolina Partap joined pharma and healthcare major Wockhardt in August 2006. In her current role as General Counsel and Vice President Legal, she is responsible for IP and litigation management, legal compliance, all corporate legal work, and transactions management among others. She advises top management on legal risks; settles complex insolvency petitions filed against the organization; and settles intricate derivatives suits filed against the group globally. Partap is one of the few general counsels globally who handles forensics and data analytics. Partap got a gold medal in her masters of law. She started her career in a bank in 1993. A recipient of a slew of awards and accolades, in 2017, Partap was awarded best individual for outstanding achievement inhouse and her team won the best innovations and strategies team of the year among others.
My journey as a woman lawyer has been very enriching. My most effective days were my first two years after college, where I learned the basics of court procedures, both civil and criminal and the art of arguing matters before the judiciary. Any lawyer who wants to be truly successful must have grounding in court work and litigation practice. Only then can they foresee risks and advise on strategies to management and negotiate good commercial transactions. I have never stopped reading. Even after 24 years into the profession including corporate, I have always remained a student and shall always remain. One must never part with humility. Some of the biggest learnings I have had are from my juniors, especially in the field of intellectual property law. A leading woman lawyer should not harbor gender bias. It is presence of mind even more than knowledge that is more important and appreciated in the lawyer’s career. I always try to tell my colleagues and young budding lawyers not to disconnect themselves from reading and traveling. Reading would not only include law but other spheres too. These are the greatest teachers.
Describe the challenges that you have faced as a leading woman lawyer? I have always seen challenge as an opportunity. And I got plenty of opportunities. The biggest one for me was to maintain a work-life balance and excel in both spheres. This envisaged taking along with you all the people who are with, without and around you with equal importance. Another challenge for me was to work with newer and newer generations. To understand their mindset is very challenging because it does not work like us. Knowledge challenge is very small compared to people challenge. With new laws getting enacted now and then, it is indeed a stretch to keep abreast with precision.
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COVER STORY
Neera Sharma Chief Legal Officer, Sistema Shyam TeleServices Limited
November 2017 | Legal Era | www.legaleraonline.com
COVER STORY
Describe your journey as a leading woman lawyer?
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s Chief Legal Officer, Sistema Shyam TeleServices Limited, since 2008, Neera Sharma advises the company on the entire gamut of legal, regulatory and compliance matters. Sound commercial acumen, a strong grip on technical issues, the ability to conduct highly productive meetings while keeping them reasonably brief, the ability to imbibe good leadership qualities, good negotiating and mediating skills, and a problem-solving and proactive approach are some of the endearing qualities that have made Ms Sharma a role model for her colleagues and peers. A true business lawyer, Ms Sharma has a well-rounded legal experience of nearly two decades having worked with leading lights such as DCM Limited, HCL, Idea Cellular Limited, Emaar MGF Land Private Limited, HFCL Infotel, and Dishnet Wireless Limited (Aircel). Ms Sharma has a Bachelor’s degree in law from Punjab University and has completed her MBA in Finance from Amity Business School. She is a founder-member of Indian Corporate Counsel Association.
Whenever somebody asks me this question, I go into flashback and relive all my struggling moments and sometimes I wonder how being a small town girl, I came so far, breaking all boundaries, making my own path, empowering myself. Yes, empowering myself, every woman on this earth has immense strength, we all just need to recognize and utilize that. My journey till now has been a roller coaster ride and promises to continue to be exhilarating. Trying to cover a place for oneself in a profession where men outnumber women by far has its own set of challenges and at the end of it, I feel I always empathize more with issues that are unique to women. I hail from Ludhiana Punjab, have done my Law degree from Punjab University, an MBA-Finance from Amity Business School, and also completed a specialized course in Cyber Law & Labour Law from the Indian Law Institute. I have a rich experience of working for mediumsized companies and also, a lot of startups including Emaar MGF, Aircel and then, SSTL (MTS India) happened to me. Starting from scratch is not only full of unknown challenges but it is also a time when one has limited resources at one’s end and lots of work at the other end. The best phase in any organization is when you are the one who makes the rules of the game & also works on them. I started my career with DCM Limited and then worked with HFCL, HCL, IDEA, AIRCEL, and EMAAR MGF. During my career, I came across the best of seniors and peers & till date, have very good professional relationships, wherever I worked. My mother being a housewife always inculcated in us the importance of becoming a professional & being financially independent. My father has always supported me in all spheres, whether I wanted to play Table Tennis or wanted to switch from science to law or move base from one city to the other city. I have traveled across many states within India and countries across the globe for work. It’s always been a very interesting journey so far and I hope it will continue to be the same.
Describe the challenges that you have faced as a leading woman lawyer? Apart from the challenges like gender bias, proving yourself at every step which I have been able to manage, the biggest challenge for me today is to balance my personal and professional life. Being a board member and General Counsel of the company, for every task, you need to travel an extra mile. Your work timings are 24x7, 365 days and you can’t say no to any challenge which comes across. It could be that women juggle a lot more things than the men - family, home & work and are always under harsher scrutiny to see where they miss. Striking the right work-life balance has been tough. It is impossible to achieve this balance, though it is something that you have to be thinking of all the time in order to get it right. Due to this stress, your mind is never at rest. Speaking of my very own experience, on many occasions, I was on the brink of quitting my job due to all these pressures but my parents always mentored me and stood by me to continue my successful professional journey and made me understand that work-life balance is a challenge that never goes away in its entirety. The magnitude differs at different points of time.
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COVER STORY
SHUKLA WASSAN ED - Legal & Corporate Affairs, South Asia, Hindustan Coca-Cola Beverages Pvt Ltd
November 2017 | Legal Era | www.legaleraonline.com
COVER STORY
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hukla Wassan is the Executive Director Legal & Corporate Affairs, South Asia of Hindustan Coca-Cola Beverages Pvt Ltd and Chairperson of International Beverages Pvt. Ltd, Bangladesh, Bottlers Nepal Limited and Bottlers Nepal (Terai) Limited, Nepal, subsidiaries of The Coca-Cola Company plc. Shukla is a member of The Coca-Cola Company Bottling Investment Group Women’s Advisory Counsel and a Founder-Member of the Indian Corporate Counsel Association. Shukla has had a rich and diverse career spanning over three decades, where she has been a part of the Corporate Management Team of multinational companies like Reckitt Benckiser, Xerox India & Max New York Life Insurance Co. Her wide-ranging areas of expertise include Joint Ventures, Strategic Alliances, Fund Structuring, Intellectual Property, Indirect Taxation, Competition Law and Corporate Governance & Compliances. A prominent speaker at seminars and international conferences; a Committee Member of various industry forums; Shukla is a law graduate from Calcutta University and a Fellow Member of the Institute of Company Secretaries of India. She is a recipient of several awards and accolades, the most recent being ‘Corporate Lawyer of the Year’ by the Annual Women in Compliance Awards-2017 organized by C5 Communications Limited (formerly known as Euroform) a subsidiary of C5 Group Inc., UK.
Describe your journey as a leading woman lawyer? I have been fortunate to work in organizations, each having different complexities and challenges. The changing regulatory and legal scenario further attributed to the complexity. This, by default, taught me to be agile, flexible, taking accountability including being result-oriented within the ambit of law and ethical practices. Emotional intelligence, astuteness and being empathetic have helped me get into the thick of things and emerge a winner and be accepted as a business partner more than just a legal professional.
Describe the challenges that you have faced as a leading woman lawyer? I have never experienced an obstacle that was solely the result of being a female. Generally, I have been the only woman in the room but I have never viewed that as an obstacle. I have always been accepted by all my seniors and peers as a professional, and they have never differentiated against me for being a woman. My biggest challenge, at times, has been juggling between my work and home commitments.
Which are the cases you would say form the silver lining of your career? As mentioned earlier, every organization I worked with presented different challenges in different environments. Each of these experiences has helped shape me to be what I am today.
She is a Law graduate from Calcutta University and a Fellow Member of Institute of Company Secretaries of India.
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TAKE ON BOARD
Opportunities In
Defense Manufacturing As Government Unveils Strategic Partnership Model Fostering constructive partnership with the Indian private defense industry is considered not just a sound economic option but a strategic imperative to minimize dependence on imports and infuse self-sufficiency in defense manufacturing; however, only time will tell if the strategic partnership model has the desired effect
November 2017 | Legal Era | www.legaleraonline.com
TAKE ON BOARD
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he Indian Government’s policies in the last few years have gradually moved in the direction of making the defense manufacturing sector more attractive for private entities. This sector has been traditionally dominated by public sector utilities. In an attempt to simplify the regulations involving defense sector and to project India as an attractive destination for defense manufacturing, a series of policy level changes have been notified: • FDI policy for the defense sector has been reviewed and as per the revised policy, composite foreign investment up to 49% is allowed under the automatic route and beyond 49% with government approval.
• The Defense Products List for the purpose of issuing Industrial Licenses (ILs) under the IDR Act has been revised and most of the components, parts, sub-systems, testing equipments, and production equipments have been removed from the List, so as to reduce entry barriers for the industry, particularly the small & medium segment.
Vasanth Rajasekaran Partner Phoenix Legal
Sukrit Seth Senior Associate Phoenix Legal
Saurabh Babulkar Associate Phoenix Legal www.legaleraonline.com
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TAKE ON BOARD • Validity of Industrial License granted under the IDR Act has been increased from 3 years to 15 years with a provision to further extend it by 3 years on a case-tocase basis. • To establish a level-playing field between the Indian private sector and the public sector, anomalies in excise duty / custom duty (now GST) have been removed. As per the revised policy, all Indian industries (public and private) are subject to the same kind of excise and custom duty levies. • The Exchange Rate Variation protection has been allowed on foreign exchange component to all Indian companies, including private companies in all categories of capital acquisitions, so as to create a level playing field between the Indian and foreign industry. • In order to encourage indigenous design, development and manufacturing of defense equipment, the Defense Procurement Procedure 2016 (‘DPP 2016’) introduced a new category of capital procurement - Buy Indian-IDDM (Indigenously Designed, Developed and Manufactured). As per the DPP 2016, preference will be given to ‘Buy (Indian-IDDM)’, ‘Buy (Indian)’ and ‘Buy and Make (Indian)’ over the ‘Buy (Global)’ categories of capital acquisition. As a further push for increasing private participation, promoting indigenous production and housing of critical technologies, the Government has recently released the ‘Strategic Partnership’ model by adding the seventh chapter under the DPP 2016, thereby allowing Indian private players to play the strategic partner role for critical Indian defense programs.
Strategic Partnership: The Model The strategic partnership model seeks to identify a few Indian private companies as Strategic Partners (‘SPs’) who would initially tie up with a few shortlisted foreign Original Equipment Manufacturers (‘OEMs’) to manufacture big-ticket military systems. In the initial phase, the selection of SPs would be confined to only four segments and only one SP will generally be selected per segment: a) Fighter Aircraft. b) Helicopters. c) Submarines. d) Armored Fighting Vehicles / Main Battle Tanks. The SP is expected to play the role of a system integrator by building an extensive eco-system comprising development partners, specialized vendors and suppliers, in particular, those from the MSME sector. The Strategic Partnership model enables an Indian private sector entity to partner with the Ministry of Defense (MoD), to make necessary long-term investments in manufacturing infrastructure, an eco-system of suppliers, November 2017 | Legal Era | www.legaleraonline.com
Recent initiatives by the Government provide India an opportunity to change the status quo and become a key player in the global defense industry skilled human resources, R&D for modernization and upgrades as well as and other capabilities, besides production of equipment. The overall aim is to progressively build indigenous capabilities in the private sector to design, develop and manufacture complex weapon systems for the future needs of the Indian Armed Forces. This will be an important step towards meeting broader national objectives, encouraging self-reliance and aligning the defense sector with the ‘Make in India’ initiative of the Government. In order to ensure that the chosen platform for manufacturing meets all the operational requirements of the Armed Forces and to access advanced and appropriate technologies, the SP will need to enter into relevant tieups with foreign OEMs to cover manufacturing, transfer of technology, assistance in training skilled human resources and other support. Such partnerships or tie-ups between SP and OEM may take the form of joint ventures (JV), equity partnerships, technology-sharing, royalty or any other mutually acceptable arrangement between the companies concerned, subject to the ownership conditions indicated above. As per the Policy, the applicant company has to be an Indian Company owned and controlled by resident Indian citizens. The management of the applicant company should be in Indian hands with majority representation on the board of directors. Further, a company shall be considered as ‘Owned’ by resident Indian citizens if more than fifty percent (50%) of the capital in it is directly or beneficially owned by resident Indian citizens and/or Indian companies, which are ultimately owned and controlled by resident Indian citizens. This implies that the maximum permitted FDI (both direct and indirect) shall be forty nine percent (49%). Any subsequent change in shareholding
TAKE ON BOARD pattern/ownership of the SP shall require prior approval of MOD. In terms of ensuring quality, it is provided that the OEM will be jointly responsible along with the SP for certification and quality assurance of platforms supplied to MOD. The Policy lays down a broad procedure for selection of SP: a) Issue of expression of interest (“EOI”) to Indian private companies for selection of SP in an identified segment seeking details of Minimum Qualification Criteria; b) Submission of response to EOI by applicant companies, indicating inter alia choice for segments in which they wish to participate; c) Evaluation of companies based on prescribed Minimum Qualification Criteria; d) Segment-wise verification of segment specific criteria; e) Shortlisting of companies that meet the Minimum Qualification Criteria, for issue of segment-wise request for proposal; f) Issue of segment-wise request for proposal with Defense Acquisition Council (‘DAC’) approval to short-listed companies based on the segment option submitted by them in EOI response; g) Submission of techno-commercial offer in response to request for proposal by companies, in collaboration with one of the shortlisted OEMs, or in exceptional cases, with two OEMs in segments with diverse platforms; h) Opening and evaluation of technical offer of companies; i) Conduct of field evaluation trials and staff evaluation; j) Opening of commercial offers of companies that are technically compliant with the request for proposal, segment-wise; k) Selection of Strategic Partner having the lowest bid, segment-wise, with DAC approval; l) Commencement of contractual negotiations; m) Finalization and signing of contract. The Policy notes that - an appropriate institutional and administrative mechanism for effective implementation of Strategic Partnerships will be set up within MOD, the development of such institutional and administrative mechanism is yet to be undertaken.
Industry Reaction Recent initiatives provide India an opportunity to change the status quo and become a key player in the global defense industry and have been lauded by Industry. These initiatives present opportunities for foreign OEMs to enter India and local companies to collaborate and design, develop and showcase their engineering strength. This will also further India’s objective to create jobs, catalyze technology development, and transform India into a self-reliant nation with export capabilities in the defense sector. Encouraged by initiatives taken by the Government, even big Indian conglomerates with no real defense experience have made an entry. For instance, the Adani Group, has tied up with Saab AB, which produces the Gripen fighter jets, to bid for a multibillion-dollar deal. The significant interest manifested from companies such as Boeing, SAAB and Lockheed Martin in partnering with Indian private companies and otherwise having advanced discussions for establishing their manufacturing centers in India, is a positive sign for the Indian defense manufacturing industry and a step closer to India’s growing attractiveness as a defense sourcing hub. The Strategic Partnership policy provides that, ‘only one Strategic partner will generally be selected per segment’ so that it ‘maintains focus on a core area of expertise’. Industry has voiced its concern with respect to the same, and has requested for appropriate changes in the Policy. As per news reports, the government is likely to bring a change in this, which will allow the applicant company to be selected in more than one segment identified for strategic partnership. The foreign OEMs have raised concerns with respect to protection over propriety technology since they will have minority shareholding in the JV as the FDI cap is 49% and have sought governmental protection.
Conclusion The Indian government recognizes that opening up of the defense sector to private sector participation will help Foreign OEMs to enter into strategic partnerships with Indian companies and leverage the domestic markets as well as aim at global markets. Besides helping in building domestic capabilities, this will also bolster exports in the long term. Fostering a constructive partnership with the Indian private defense industry is considered not just a sound economic option but a strategic imperative to minimize dependence on imports and infuse self-sufficiency in defense manufacturing.
Disclaimer – The views expressed herein are strictly personal to the author(s) and should not be construed as a legal opinion. The author(s) is not responsible or liable for any loss or damage caused to anyone due to any interpretation, error, omission pertaining to this article. www.legaleraonline.com
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INSIGHTS
Current
Risk Management Position In
The risk management function is set to become increasingly important over the next decade where shareholders will look to add value to their business and protect customers November 2017 | Legal Era | www.legaleraonline.com
INSIGHTS
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his article covers the current risk management position in India and looks into the future from an opportunities’ point of view in the area of risk management. Key points discussed in the article are drivers of risk management, current corporate governance practices, challenges in the implementation of risk management and emerging future opportunities. The article looks into the present risk management position and advocates that there are plenty of opportunities in this field in time to come.
Corporate Governance Guidelines Human existence is fraught with future uncertainties and managing the same in your own way is not something new, however, in recent times, with successive failure of businesses across the globe, there is greater focus on management of risk. The series of changes made to corporate governance guidelines across the globe is a testimony of the seriousness shown by different regulatory authorities. Some of the recent changes brought up by regulatory authorities across the globe are risk-based capital provision in the banking and insurance sector. The focus of different regulatory bodies has increased on setting up of Risk Management Committees and strengthening the role of these committees in providing risk oversight. It has been realized that risks cannot be eliminated but can only be managed, so their identification is a key step in the process of risk management. The recent changes in corporate governance guidelines made in Indian financial institutions are as follows: • IRDA (Insurance Regulatory and Development Authority) - 2016 Corporate Governance Guidelines are sharper and have described the objectives of risk management committee. The guidelines also state that certain positions cannot be helped by the same individual due to conflict of interest. • Reserve Bank of India - governs the risk management activities for Indian Banks. • SEBI (Security Exchange Board of India) - 2015 Corporate Governance Guidelines for listing companies. In 2017, SEBI has issued a circular on Board evaluation. • Company Laws - 2013 Company law requires having risk management assessment by the Board.
What is risk management? Risk management is a proactive step of identification of risks, assessing their impact, and preparing an action plan should such risks occur in reality. Risk management is not just about identifying the risks; management action is an integral part of the process. Stressing the same point, the Chinese President quoted while addressing the National Financial Conference that “Failure to detect financial risk is a breach of duty; spotting risks without addressing them, a refusal to perform the duty”. It is important to understand that risk management through a silo approach is no longer sufficient where risk
Sonjai Kumar Vice-President (Business Risk) Aviva India Life Insurance management is performed by a few departments only. In the Enterprise Risk Management (ERM) concept, risk management is performed across the organization where every employee is a risk manager. The silo approach to risk management does not work as risks are highly correlated and cannot be segmented and managed independently. There is also a higher cost of management of risk if handled independently as the benefit of diversification does not come into force.
What does risk management do? In business, risk identification not only helps in proactive action but also helps in giving risk diversification, better risk transfer to the third party, better allocation of capital, and enhancing the value of the Company including stabilization of flow of income. • Diversification effect - Many risks are correlated, so, managing one risk also helps in reducing another risk. In the insurance sector, when the lapse risks (policyholder leaving the portfolio earlier than expected) are reduced, this helps in reducing the claim risks as well. • Better risk transfer - Identification of risks helps in identifying those risks which the Company may not manage and need transfer to the third party. Example, derivative products. • Better allocation of capital - Risk management helps in the better deployment of capital based on the riskreturn ratio. • Impact on the valuation of the Company - For listed Companies, risk management helps in improving the share price and overall valuation of the Company. • Reduce earnings’ volatility - Reducing earnings’ volatility helps in stabilizing the steady flow of income. It is imperative that risk management facilitates benefits to organizations which practice it; however, it has been seen that there are practical challenges in the Indian market in its implementation. www.legaleraonline.com
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INSIGHTS Challenges in the Indian Market
The ERM in India is a relatively new concept where its implementation in some sectors has been made to meet minimum regulatory requirements. There are challenges in fully implementing ERM across different financial sectors; some of those challenges are discussed below: • Risk culture is not mature in India to fully implement the ERM; the behavior towards acceptance of risk has an element of reluctance; this may be driven by the attitude of not accepting the existence of risk. Such attitude could further be the output of audit mindset where audit findings are considered as a gap in the process. More research is needed in this area to find out the real reasons. The point to understand is that risk identification is not a gap because identifying the risks only help in locating the pitfalls that may come in the way of achievement of the business objective. Risk management is not a deterrent but an enabler. • The current business culture in India focuses on rewards based on year-on-year growth of the business; western markets, on the contrary, have elements of effectiveness of risk management as well as the growth factor in the reward structure. Such inclusion of controls will not only help in boosting the bottom line but also in creating the right risk culture within the organization. • Very few business organizations in India are using statistical models to project future scenarios and apply stress testing to look into the anticipated future and preempt the risks. Scenario and Stress Testing (SST) is becoming a very strong tool to assess the resilience of the business against various economic and demographic variables. • Currently, in many organizations, strategy and risk management are not integrated which results in strategy failing. Strategic risk management helps in keeping the strategy agile based on emerging market conditions. • Apart from these technical gaps, there are also shortages of qualified risk professionals; this is further aggravated by lack of quality risk management institutions to deliver risk education. Many B-Schools in India are yet to include risk management courses in their core curriculum. This however, is prevalent globally. • Most of the corporate governance guidelines issued in recent years have strengthened the role of the Board in providing risk management oversight. The 2008 economic crisis highlighted many gaps in providing risk oversight at the Board level that may be used as a reference point.
Future Opportunities The application of risk management in India is likely to rise due to regulatory requirements by different financial regulators and requirement under Company law, where the Board is to report development and implementation of risk management policies.
Risk management in India is new, but it is going to stay because all financial regulators have recommended setting up a Risk Management Committee as part of the corporate governance process. This includes the establishment of separate risk management function within the Company headed by the Chief Risk Officer. The role of risk management function is a part of the three lines of defense model, where the first line of defense is the function which runs the business and does the operational management within the Company including owning the risk and its management. The second line of defense is the risk management function that provides the oversight and challenge on the risks identified by the first line of defense. The third line of defense is the Audit function that provides the assurance on the effectiveness of the risk management process and controls. The SEBI has a listing requirement that top 100 listed companies must have a risk management committee, the 100 listed entities are determined on the basis of market capitalization at the end of the immediate previous financial year. On all the listed companies, the risk management practice of oversight is likely to increase because any adverse news about the Company may impact share price. The Reserve Bank of India issued guidelines on BaselIII reforms on capital regulation in May 2012, to the extent applicable to banks operating in India. The Basel-III capital regulations have been implemented from April 1, 2013 in India in phases and will be fully implemented by March 2019. The Basel reform is based on a capital calculation based on the risks that banks undertake, so any bank taking undue risks will have a higher capital requirement. If risks are managed well, the bank will be benefited through optimal capital requirement; and that is where risk management will add value. It can be concluded that the application of risk management in the banking sector is likely to increase manifold. Similarly, to make the insurance sector in India more resilient to internal and external changes, the insurance regulator, IRDA has set up a committee on risk-based capital which has given its report. Further communication from the insurance regulator in this regard is expected in the future. Post implementation of the risk-based capital regime in India, the application of risk management will rise as this will directly impact the shareholders’ optimization of capital. Apart from these highly regulated financial industries in India, the requirement of risk management under Company law 2013 will further increase application of risk management across different sectors. It is evident that risk management in the next decade will be a tool that shareholders will look into to add value to their business and protection of customers.
Disclaimer – The views expressed in this article are the personal views of the author and are purely informative in nature.
November 2017 | Legal Era | www.legaleraonline.com
Awards 2017-18
“Recognition of Legal Finesse, Innovation & Accomplishments� Come March 2018, and Legal Era Magazine from Legal Media Group will once again organize The Legal Era Awards 2017-18, also known as Indian Legal Awards. Now in their seventh year, Legal Era Magazine is proud to have instituted the country’s first legal awards to celebrate excellence among the legal fraternity. For more information, please visit www.legaleraawards.com
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Whistleblower
Protection Reforms: A model for India and Australia Australia has proposed a whistleblower protection model which can act as a blueprint for other common law countries, including India, which seek to enhance protections to those who blow the whistle on corporate misconduct and corruption
November 2017 | Legal Era | www.legaleraonline.com
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n my last article published on 18 May 2017, my colleague from Johnson Winter & Slattery, Tom Barnes, and I, argued the case for reforming whistleblower laws in Australia and India. Australia has now proposed a whistleblower protection model that can act as a blueprint for other common law countries, including India, who each look to enhance the protections to those who blow the whistle on corporate misconduct as a means to tackle the ever-present scourge of commercial crime, corruption and corporate illegality.
Australia’s Whistleblower Protections Review During 2017, a substantial review of Australia’s whistleblower protection laws covering the private and not-for-profit sectors has been undertaken. In September 2017, the Parliamentary Joint Committee on Corporations and Financial Services (the Joint Committee) published its Whistleblower Protections Report (the Report). The Report was a result of several months of detailed examination by the Joint Committee of whistleblower protection laws throughout Australia. The Joint Committee received over 70 submissions from regulators, private lawyers, public lawyers, non-government organizations and individuals. Almost all of the submissions, bar one, called for substantial reform.
to enhance whistleblower protections as part of global moves to target corruption. The report looked at numerous submissions which addressed the state of “corporate culture” within Australia, the perception of there being a poor corporate culture in Australia and rolling scandals that generate media and political commentary yet rarely result in any substantial reform. The importance of promoting an ethical culture of respecting those individuals who call out corporate misconduct and for action to be taken is as important in Australia as it is in India. The public in India, no less than the public in Australia, dislikes corporate misconduct and an attitude of “let’s shoot the messenger” as that is easier than dealing with the substantive issue.
A Model for Enhanced Whistleblower Protections The Joint Committee published a series of wide-ranging recommendations which set out a comprehensive framework to address the inadequacy of whistleblower protection laws in Australia and to ensure that those individuals who blow the whistle in relation to any allegations of illegality or improper behavior are themselves valued and respected.
Robert R Wyld1
The model recommended by the Joint Committee included the following key features:
1. All private sector legislation for whistleblower protection should Partner be included in a single act to ensure Johnson Winter & Slattery consistency across the private and notSydney Australia for-profit sectors. This will promote a clearer framework for whistleblowers The Joint Committee found that across the private sector: and business and be less of a regulatory burden than numerous laws covering different sectors with different Whistleblower protections remain largely theoretical requirements. with little practical effect across sectors and across industries. This was due in large part to the near impossibility under current laws in Australia of: • Protecting whistleblowers from reprisals (retaliatory action); • Holding those responsible for reprisals to account; • Effectively investigating alleged reprisals; and • Whistleblowers being able to seek redress for reprisals. The Joint Committee found significant inconsistencies existed not only between numerous Commonwealth public and private sector whistleblower laws but across different types of legislation that applied across different sectors. The Joint Committee also looked at the international initiatives
2. The definition of reportable wrongdoing and/or “disclosable conduct” should be broad, to capture the breach of any Commonwealth, State or Territory law or an industry code that has the force of law or is prescribed under a law. Any definition should not require a technical approach to defining what conduct is or is not disclosable. 3. The definition of who is a protected whistleblower needs to capture former as well as current employees, contractors and agents and those working under a former or current contract of service for supply of goods or services. In addition, there need to be appropriate protections in favor of the recipient of information so action can be taken on the complaint.
Partner, Johnson Winter & Slattery, Sydney Australia, ©2017. The opinions in this article are those of the author and do not necessarily represent the views of his firm or its clients.
1
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IN FOCUS 4. The threshold for protection should be consistent across the private and public sector and there should be no requirement that any whistleblower acts “in good faith”. The motive of a whistleblower is irrelevant to the public interest in the disclosure of corporate misconduct. The focus should be on the veracity of the complaint, not upon the character of the complainant. Professor AJ Brown of Griffith University, Queensland and a leading expert on the subject, made the point in clear terms2.
and c. external disclosure where: i. there is a risk of serious harm or death; or ii. a disclosure in the public interest has been made to an Australian law enforcement agency and after a reasonable length of time, no action has been taken by the agency.
6. Where there was any external reporting to a third party, those communications should be protected. Motives are notoriously difficult to identify and may well change in the process of reporting, for example, 7. There should be provisions for and protections in favor when an internal disclosure is ignored or results in of any individual whistleblower who sought to make the worker suffering reprisals. Because it is such an anonymous disclosure, subject a subjective and opento orders of a court that might be ended requirement, the made in terms of the giving of Protections for whistleblowers likely effect of a good admissible evidence. The Joint faith test is negative Committee recognized that the disclosing improper conduct – that workers simply confidentiality of disclosures and is essential in targeting choose not to report of the identity of a whistleblower their suspicions about were paramount and anonymous commercial crime, which is wrongdoing because reporting would bring the private invariably hidden from the public they are unsure whether sector in line with public sector or how this test would protections4. eye. The reforms proposed in be applied to their 8. There should be a Australia are already the subject circumstances. comprehensive set of remedies,
The proper tests are simply whether the disclosure is based on an honest belief, on reasonable grounds, that the information shows or tends to show defined wrongdoing.
5. In terms of how disclosable conduct should be reported, internally and/or externally, the Joint Committee recommended a tiered approach consisting of3: a. internal disclosure within an organization, which is safe and appropriate (including to a nominated hotline);
of a draft Bill (published by the Government on 23 October 2017) which are designed to substantially improve protections and impose severe sanctions for discriminating against whistleblowers in the private sector. These reforms are a great improvement in Australia and can act as a guide to where best practice reforms could apply in India
b. regulatory disclosure to the appropriate body or agency wherever a regulator exists to receive such complaints and an internal disclosure was: i. unsafe or unviable; ii. inappropriate as the organization was unlikely to act on it; and iii. was made but did not lead to satisfactory action;
both civil and criminal, for any retaliation against a whistleblower, with sanctions ranging from significant fines to terms of imprisonment. The Joint Committee considered that5: Remedies, including compensation, should be determined by the level of detriment suffered by the whistleblower and that a whistleblower should be fully reassured for simply doing the right thing, without needing to have a financial motive.
In this context, the Joint Committee believed there should be a separation of the grounds for criminal and civil liability, distinguishing between the criminal offense of reprisal and the wide range of circumstances that might give rise to civil remedies for detrimental outcomes6.
9. A reward system should be introduced in Australia. The proposed model would permit the Whistleblower Protection Agency (of which, see below), when imposing a penalty on a wrongdoer, to allocate a “reward” to any relevant whistleblower as a proportion of the penalty
Joint Committee, Whistleblower Protections Report, Canberra, September 2017 at page 77. 3 Whistleblower Protections Report, pages 89 to 98. 4 See section 28(2) Public Interest Disclosure Act 2013 (Cth). 5 Whistleblower Protections Report at page 113. 6 Whistleblower Protections Report at page 121. 7 Whistleblower Protections Report at page 138. 8 Whistleblower Protections Report at page 143. 9 Whistleblower Protections Report at page 155. 10 Whistleblower Protections Report at page 157. 11 Whistleblower Protections Report at page 156. 12 https:// www2.deloitte.com/in/en/pages/finance/articles/whistleblower-protection-in-india.html. 2
November 2017 | Legal Era | www.legaleraonline.com
IN FOCUS imposed on the employer. The range of a reward would be determined by a court (or other body), taking into account identified factors such as the extent to which the disclosure led to the imposed penalty, the timeliness of the disclosure, the extent of internal reporting lines, whether a disclosure had been made internally and/or externally with a lack of adequate response, the extent of any compensation received by the whistleblower and the overall conduct of the whistleblower. A cap on the reward, together with the relevant criteria, would mitigate the perceived negative consequences of a USstyle bounty system. On a reward scheme, the Joint Committee said this7: A reward system would motivate whistleblowers to come forward with high quality information. This information would otherwise be difficult to obtain. The committee considers that a reward system will motivate companies to improve internal whistleblower reporting systems and to deal more proactively with illegal behavior. 10. An independent Whistleblower Protection Authority should be established that had priority for the support of whistleblowers, a statutory power to investigate reprisals, the ability to undertake administrative and/or civil proceedings and overall oversight of implementation of the statutory whistleblower regime. The current approach for the Australian public sector was fragmented. In the private sector, ASIC (as the corporate regulator) has been criticized in the media as consistently failing to respond to whistleblowers. Almost all submissions to the Joint Committee, including from ASIC, recommended the creation of an independent oversight agency for whistleblowers8. The Joint Committee recognized, with some concern, what it described as the “manifest and systemic power imbalance”9 between a whistleblower and an agency, a department or an employer where any dispute arose about a disclosure. 11. The Joint Committee considered that a Whistleblower Protection Agency should be empowered to exercise the following functions10: a. Act as a clearing house for whistleblowers making public interest disclosures; b. Provide advice and assistance to whistleblowers; and c. Support and protect whistleblowers, including by: i. Investigating non-criminal reprisals in public and private sectors; and ii. Taking non-criminal matters to court on behalf of whistleblowers or on the Agency’s own motion to remedy reprisals or detrimental outcomes. 12. The Joint Committee saw several benefits in having one independent body to focus on whistleblowers. These
benefits included11: a. Having independent investigations of alleged reprisal activity across public and private sectors; b. Avoid reprisal investigations being undertaken by the agency whose conduct is under review; c. Provide a consistent approach across public and private sectors; d. Alleviate the lack of specific requirements under the Corporations Act to investigate reprisals; and e. To allow ASIC and other regulators to investigate serious misconduct revealed by the whistleblower. 13. The Whistleblower Protection Authority should submit annual reports to Parliament covering both the public and private sectors in a consistent format to facilitate comparison and an assessment of the effectiveness of whistleblower protection laws across both sectors.
Reflections on the Whistleblower Protections Model For many years, Australia has looked at whistleblowers but has done very little to protect them. The Whistleblower Protections Report is the most comprehensive review of the laws covering the public and private sectors and finally and unambiguously, lays bare the complete inadequacy of whistleblower protections in the private sector in Australia. While India has the Whistleblowers Protection Act, 2014, which provides some protections in relation to the disclosure of corruption, wilfull misuse of power or discretion or a criminal offence by a public servant, Indian law is silent on any protections for a whistleblower in the private sector. An employee or any individual is alone when a private sector whistle is blown. This is not and indeed, cannot be healthy in India’s campaign to target endemic corruption (in the public or private sectors). The absence of any protections in India in the private sector operate as a real disincentive to any disclosure and in turn, promote an unhealthy sense of entitlement and a lack of transparency and accountability upon those who seek to act improperly and/or illegally. According to Deloitte in India12: There are enough instances of retaliation against whistleblowers in corporations and government-driven organizations including some where whistleblowers are known to have lost their lives in their fight against fraud and corruption. The Australian Government as much as the Indian Government, promote the virtues of tackling corruption and corporate misconduct. Empowering and properly protecting whistleblowers goes a long way to achieving those goals consistent with the increasing demand of society to stamp out corporate misconduct.
Disclaimer – The views expressed in this article are the personal views of the author and are purely informative in nature. www.legaleraonline.com
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OUTLOOK
Carry Cash Risk Your Reputation! As a rule, individuals should only travel with large amounts of cash when it is absolutely necessary, otherwise using the banking system wherever possible
November 2017 | Legal Era | www.legaleraonline.com
OUTLOOK
W
hile we are in the age of digital payments, many individuals and Small and Medium Enterprises (SMEs) continue to conduct business in cash. This is more prevalent in cases where business dealings are carried out abroad, as a means of circumventing the notorious exchange fees of card and bank transactions. This is not illegal, and there are no strict requirements to declare large amounts of cash when traveling within Europe. However, it is unsurprising that authorities have a heightened sensitivity to the potential of cash being ill-gotten from criminality or being used to fund criminal conduct.
Kartik Mittal Senior Solicitor, Zaiwalla & Co.
Chapter 3 of part 5 of the UK’s Proceeds of Crime Act, 2002, provides for ‘recovery of cash in summary proceedings’, by clearly stating, “A customs officer, a constable or an accredited financial investigator may seize cash if he has reasonable grounds for suspecting that it is… recoverable property [derived from criminal conduct], or intended by any person for use in unlawful conduct.”1 Matters which may cause or increase an officer’s ‘suspicion’ and lead to seizure of cash include concealing the cash, the amount of cash (if large), any weak reasons for not using the banking system to transfer the money, any lack of cogency of the explanation provided at the time, and most importantly, what documentary evidence is carried with the cash to show its provenance and intended purpose. Following seizure, the seized cash may be initially detained for up to 48 hours after which, detention may be authorized by a Magistrates’ Court for a period of no more than three months2 while its origin is investigated or consideration is given to bringing (in the United Kingdom or elsewhere) proceedings against any person for an offense with which the cash is connected. That period can be subsequently extended by further application to the Court for no more than three months at a time up to a maximum of two years from the date of the first order. Within two years, any application for forfeiture must be brought. By way of case study, in early 2016, Mr. A (a respectable businessman with no previous convictions or cautions) was on his way to Italy where Section 294. The amount must be at least £1,000. A customs officer or constable may also seize cash part of which he has reasonable grounds for suspecting fall into these categories if it is not reasonably practicable to seize only that part so long as the part in question is above the minimum amount. 2 Section 295(1). 1
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OUTLOOK his family lived and where he had legitimate business interests. Whilst in Italy, he was due to undertake some transactions related to his business. Perhaps unusually by reference to common British business dealings but not in the region of Italy he was visiting, the transactions were to be carried out in cash. Having previously had money stolen from him in an inattentive moment by (most likely) another passenger, Mr. A decided to conceal the cash he was carrying in confectionery containers. It is noteworthy that the concealment could only ever have been effective against a fellow passenger and not against authorities as the cash would be obvious and visible to the authorities – as it was here and for which reason he was stopped. The money was seized from him. What then followed were litigation proceedings over a period of some 15 months which ultimately resulted in having his money returned. This case was very important to Mr. A as obviously, he stood to lose the cash concerned. However, more significantly (and a matter often overlooked), was the reputational damage which would flow from a forfeiture order, and consequential damage to business interests. It is important to consider the nature and consequence of the proceedings and the operative legal provisions. Cash forfeiture applications are not criminal proceedings, nor are they pure civil proceedings in that though the civil jurisdiction of the Magistrates Court (and on appeal the Crown Court) is engaged and the Civil Evidence Act applies, the Civil Procedure Rules do not. As a consequence, the rules in the CPR relating to evidence, disclosure and – importantly – costs, do not apply.
By way of advice, we suggest first that proper and contemporaneous business records are kept for cash transactions in a cash account and accountants kept informed of the level of cash business The ramifications of such a finding, albeit the civil standard3 is that the individual carrying the money is connected to criminality. This obviously impacts that individual’s reputation as they would essentially be accused of criminality without criminal trial protections. Further, that individual may hold an important role or may have been traveling on behalf of a company which may only trade by reason of a license. That license may be affected by connection with the criminal nature of cash, according to the finding of the Court.
It can easily cost as much or more than the money in question to recover the cash. Importantly, and in contrast to civil proceedings generally, costs do not follow the event. Costs may be granted by the Crown Court pursuant to Rule 12 of the Crown Court Rules 1982. InR. (on the application of Perinpanathan) v City of Westminster Magistrates’ Court [2010] 1 WLR 1508, the Court held that it does have jurisdiction to make a costs order only where the Respondent has acted unreasonably and/or on grounds which are not sound. The starting point is therefore that a party who successfully resists a forfeiture application will not recover their costs. It may cost more to secure the return of the cash, than the amount of cash itself.
By way of advice, we suggest first that proper and contemporaneous business records are kept for cash transactions in a cash account and accountants kept informed of the level of cash business. Individuals should only travel with large amounts of cash when there is an absolute necessity to do so. Otherwise, use the banking system wherever possible. Where it is necessary to carry cash, try to make arrangements at the destination before traveling so that you are expected (thereby being able to confirm what your intentions are). Do carry with you as much documentation as you can (i.e. a bank withdrawal receipt) to support the origin of the cash. Consider the nature of how that money is being carried and do not conceal it from authorities, a course which would create a high degree of suspicion, which would be hard to overcome if stopped.
Most importantly, the allegations are necessarily made within the applicant’s case. To succeed, the applicant must prove to the civil standard that the cash recoverable property (derived from criminal conduct), or intended by any person for use in unlawful conduct.
If the authorities do seize the cash, engage early with as much documentary support as possible. If any issue arises as to record keeping and accounting regularity, engage a forensic accountant promptly to analyze any business record and model.
Although it is well established that where criminal allegations are made in a civil case, the evidence must be examined “critically and anxiously” to ensure it meets the necessary standard of proof: Re D [2008] 1 WLR 499.
3
Disclaimer – The author of this article is Mr. Kartik Mittal, Senior Solicitor at internationally renowned London-based law firm, Zaiwalla & Co.
November 2017 | Legal Era | www.legaleraonline.com
6th Edition Two Days of Knowledge Sharing & Celebrations!
International Premier In-House Legal Event
November 9th & 10th, 2017 Hotel Crowne Plaza, London
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BARELY LEGAL
DOWNSIDE PROTECTION: NOT MERELY A LIP SERVICE ANYMORE Indian courts are strongly heading towards an approach that discourages Indian parties from using regulatory compliances as a defense for resisting contractual obligations
November 2017 | Legal Era | www.legaleraonline.com
BARELY LEGAL
T
wo judgments of the Delhi High Court this year have caused a paradigm shift in our approach towards investor protection. The Reserve Bank of India (the RBI) has always maintained that allowing a foreign investor to get a fixed or assured return on its equity investment in India would dilute the ‘risk’ factor, which is characteristic of an equity instrument, and make it akin to debt. With this view, the RBI traditionally opposed all kinds of optionality and finally, in 2014, crystallized the law by validating option contracts, albeit with a rider that a foreign investor cannot be guaranteed an assured exit price. Despite the restriction, exit options and pre-agreed returns on investments are, and have always been, the pivot of investment deals. Indian promoters, probably on the premise that the investor would not be able to enforce such agreements, have been generous in their promises to investors and do not shy away from guaranteeing exits based on performance milestones and other factors. The Delhi High Court has now ruled that the Indian company and its promoters would be held to their word, and protecting investment value is not merely a theoretical right. The judgments passed in the cases NTT DoCoMo Inc. v Tata Sons Limited and Cruz City 1 Mauritius Holdings v Unitech Limited are in the spirit of the current economic climate and recognize that the need of the hour is to provide a more conducive environment for foreign investments. The rulings stress that contractual commitments be honored and residents not be allowed to take cover under local law to breach commercial agreements that they have entered into with full knowledge of repercussions. A distinction has been drawn between the times of FERA, where the focus was to conserve foreign exchange, to the present-day endeavor to reinvent India as a major investment destination. The writing on the wall is clear – the defense of public policy cannot be used to wriggle out of contractual obligations! In the Cruz City case, Unitech Limited had guaranteed purchase of Cruz City’s stake in Kerrush Investments Limited (a joint venture between Cruz City and an associate company of Unitech Limited)(Kerrush) by two associate companies of Unitech, if Kerrush delayed a real estate project in India. A dispute ensued when Cruz City exercised its put option and the arbitral tribunal decided the matter in its favor. Unitech challenged the arbitral award on grounds of public policy stating that the proposed payment violated the provisions of Indian exchange control regulations. However, the Delhi High Court rejected Unitech’s contention and held that “while violation of exchange control regulations is not against the public policy of India, any remittance of the money recovered from Unitech Limited under the arbitral award would require compliance of regulatory provisions”. The Court expected Unitech to fulfill its promises even if it entailed obtaining regulatory approvals or suffering penal consequences. The Court estopped Unitech from asserting
Kosturi Ghosh Partner, Trilegal
Ipsita Chowdhury Senior Associate, Trilegal
Adhunika Premkumar Associate, Trilegal
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BARELY LEGAL a breach of FEMA after having provided unambiguous representations to Cruz City regarding enforceability of its obligations under the agreements. In the DoCoMo case, while the Court did not directly delve into the question of whether the transaction was in conflict with public policy of India, it upheld DoCoMo’s right to receive 50% of its original investment amount. In this case, Tata was required to find a buyer for DoCoMo’s shares in the event that it failed to satisfy certain pre-determined performance parameters. The arbitral tribunal unanimously ruled that Tata was liable to pay damages and recognized that the parties had deliberately linked the exit provision with breach of performance parameters, being aware that exchange control regulations may prevent performance of a simple put option. The Court upheld the award and rejected the contention of the RBI that the payment from Tata to DoCoMo was in the nature of an assured return. These cases establish a very clear intent - violation of an economic law to protect foreign exchange outflow is not sufficient ground for declining the enforcement of a foreign award on grounds of public policy. Indian parties should honor their contractual commitments and should not be permitted to hide behind their failure to obtain approvals or the lack of gravity in making a promise which they could later treat as illegal. A contrary stance would have certainly affected the faith of foreign investors in the Indian legal system. It is pertinent to note that in both these cases, the foreign arbitral awards were challenged. Under the Arbitration and Conciliation Act, 1996 (the Arbitration Act), enforcement of a foreign award can be challenged on substantial grounds if it is contrary to the public policy of India. In such a scenario, an interesting question that arises is whether the parties challenging the arbitral award would have had a better case if they had resorted to domestic arbitration. This is more so in light of the recent amendment to the Arbitration Act, which permits arbitral awards arising out of arbitrations, other than international commercial arbitrations, to be set aside if the court finds that the award is vitiated by patent illegality appearing on the face of the award. Patent illegality was brought within the ambit of public policy by the Supreme Court in the case of Oil and Natural Gas Corporation Limited v Saw Pipe Limited where it held that “if the award is contrary to substantive provisions of law or the provisions of the Act or against the terms of the contract, it would be patently illegal”. However, based on recommendations of the law commission and the judgment of the Supreme Court in ShriLal Mahal v Progetto Grano Spa, the legislators did not want the concept of patent illegality to apply to foreign arbitral awards and therefore, decided to limit the scope of the interpretation given to ‘public policy of India’ and included ‘patent illegality’ as separate ground
Indian parties should honor their contractual commitments and should not be permitted to hide behind their failure to obtain approvals or the lack of gravity in making a promise which they could later treat as illegal to set aside domestic awards. Awards have been set aside on the grounds of arbitrariness, irrationality or a perverse understanding or misreading of the materials placed before the arbitrator, or even in cases where the arbitrator has awarded damages without the parties having proved the losses suffered by it. The ambit of judicial intervention has also been restricted by the amendment which states that an award cannot be set aside merely on grounds of an erroneous application of the law or by reappreciation of evidence. This seems to indicate that the conclusion of the Court may not have been very different even if the arbitral awards in the DoCoMo case and the Cruz City case were subjects of domestic arbitrations. In conclusion, Indian courts are strongly heading towards an approach that discourages Indian parties from using regulatory compliances as a defense for resisting contractual obligations. While such a stance in laudable from an investor perspective, it urges Indian promoters to look at their contractual commitments, specially around exit provisions, with greater scrutiny. Investors are likely to use these decisions to their advantage and incorporate structures that will minimize the risk quotient in their equity investment and at least ensure a downside protection. In such cases, the Indian promoters may have very limited opportunity to negotiate against such provisions. Therefore, to adequately protect the Indian promoters against any misuse of these provisions, contracts will need to be drafted to ensure that the factors triggering exits are watertight and not subjective or ambiguous. The parties, both the investor and the promoter, need to be clear on what they have signed up for because neither will be able to back out.
Disclaimer – The views expressed in this article are the personal views of the authors and are purely informative in nature.
November 2017 | Legal Era | www.legaleraonline.com
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What they Said
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INSOLVENCY Summit 2017
"THE JOURNEY OF INSOLVENCY & BANKRUPTCY CODE: THE FOOTPRINT HITHERTO"
2017: THE YEAR OF INSOLVENCY INDUSTRY
Insolvency Summit 2017 organized by INSOL India, SIPI, and Legal Era Magazine Held in Mumbai on 22 and 23 September, the event brought together some of the best minds in business to review the 270-day journey of the Insolvency and Bankruptcy Code and discuss the way forward
A
ll roads led to Hotel Taj Mahal Palace, Mumbai, on 22 and 23 September, 2017 as the Insolvency Summit was being hosted there by INSOL India, SIPI (Society of Insolvency Practitioners of India), and Legal Era Magazine in partnership with the Insolvency and Bankruptcy Board of India. The Summit was supported by Axis Bank Ltd. and organized by Legal Era Magazine. The inaugural session of the Summit was aptly titled, “The Journey Of Insolvency & Bankruptcy Code: The
In Association with
Footprint Hitherto,” and saw Amarjit Singh Chandhiok, Senior Advocate, President, INSOL India; Sudarshan Sen, Chief General Manager, Reserve Bank of India; Dr. M.S. Sahoo, Chairperson, Insolvency and Bankruptcy Board of India; Damini Marwah, General Counsel, Axis Bank; and Ashish Chhawchharia, Partner, Grant Thornton, taking to the stage to elaborate on the idea behind the Summit and its central theme. Aakriti Raizada, Founder & Managing Editor, Legal Era Magazine, Legal Media Group, welcomed the delegates.
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Opening Plenary
(L-R): Dr. M.S. Sahoo, Chairperson, Insolvency and Bankruptcy Board of India; Aakriti Raizada, Founder & Managing Editor, Legal Era Magazine, Legal Media Group; Damini Marwah, General Counsel, Axis Bank; Amarjit Singh Chandhiok, President, INSOL India; Sudarshan Sen, Chief General Manager, Reserve Bank of India; Ashish Chhawchharia, Partner, Grant Thornton
With the hire-purchase system and easy bank loans for entrepreneurs becoming common, the number and scope of lenders and creditors has risen manifold. While lending, both private and commercial, and its recovery, is now one of the main instruments of growth, navigating multiple laws and authorities is a major roadblock. With a view to easing the system, India Inc has introduced the Insolvency Code, which is a unique piece of legislation, probably the world’s finest. This new legislation has the potential to resolve the nation’s bad debts’ problem and improve its international ranking in terms of ease of doing business. The Summit deliberates on the 270 days’ journey of implementation of the Code and attempts to identify associated opportunities and challenges so as to forge the path ahead.
Aakriti Raizada Founder & Managing Editor, Legal Era Magazine, Legal Media Group
The law endeavors to prevent insolvency; wherever it is not possible to prevent, it provides a market mechanism for orderly resolution of insolvency in a time-bound manner; where resolution is not possible, it facilitates exit wherever required.
Dr. M.S. Sahoo Chairperson, Insolvency and Bankruptcy Board of India
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What they Said The event started really very well. They were able to bring the best faculty to come and speak. I think their experiences and guidelines should help us evolve better through the Insolvency Code. We must all keep our enthusiasm as there is no magic wand in this and time will make all processes clear. Several creases have already been cleared by the courts, and as time passes and with the implementation of this law, we will be able to build a robust insolvency system.
Amarjit Singh Chandhiok
Senior Advocate, President, INSOL India
INSOL India will continue to organize such educational and knowledge-sharing programs with support from international experts. We are grateful to speakers, in particular, those who traveled from other parts of the world, for their contribution in making the Summit a great success, said Sumant Batra, Chief Mentor of INSOL India and Summit Chair.
Sumant Batra
Managing Partner & Head Insolvency & Secured Transactions Practice, Kesar Dass B & Associates
Justice S.C. Gupte
Hon’ble Justice S.C. Gupte highlighted that under the existing regime, Courts had to dabble with thirteen different legislations that dealt with the insolvency and liquidation of corporate entities, partnerships and individuals. Justice Gupte observed that the lack of specific timelines and the plethora of forums gave rise to long drawn and complicated legislations in this sphere. The IBC, which provides for a single forum for insolvency resolution of corporate persons and prescribes specific timelines for insolvency resolution and liquidation, was, in his opinion, a welcome change to the existing regime. Whilst pointing out the positive features of the IBC, Justice Gupte observed that the IBC also had certain drawbacks such as non-inclusion of operational creditors in the committee of creditors and lack of comprehensive provisions pertaining to cross-border insolvency.
Judge, Bombay High Court November 2017 | Legal Era | www.legaleraonline.com
Exclusive The Summit had the best minds come together from different jurisdictions and was a great initiative by INSOL India. IBC marks a paradigm shift in the regime around insolvency, bankruptcy and resolution of corporate debtors. The creditor in control approach will undoubtedly bring about behavioral changes in the lending landscape for the better, and we will hopefully move towards a more disciplined and limited default culture. Cross-border insolvency, RP capacity building, information utilities, group company insolvencies are some key areas which need to be developed as we move forward with the Code.
Damini Marwah
General Counsel, Axis Bank
Justice R.D. Dhanuka Judge, Bombay High Court
Hon’ble Mr. Justice R.D. Dhanuka stressed on the practical implications of the IBC on the judicial system in India. Justice Dhanuka observed that presently, there are only 11 states in which the National Company Law Tribunal has been established. NCLT benches in various states, including Maharashtra, have jurisdiction of the insolvency resolution and liquidation of corporate persons registered in more than two/three states, in addition to their other judicial functions under the Companies Act, 2013. Additionally, Justice Dhanuka observed the need for a national training institute that trains Members of the Hon’ble Tribunals in the laws of insolvency resolution and liquidation under the IBC. Justice Dhanuka urged both litigants and lawyers to assist the judiciary as far as possible so as to enable it function smoothly and in accordance with the timelines prescribed in the IBC.
It’s exciting to watch the development of the new Code, which is a forward-looking development for India. Development of the cross-border element of the Code is yet to come, but I am confident it will happen over time. It was a great event, with all senior professionals and bankers in the community learning a tremendous amount from people in India and people coming in to share their expertise, and I’m honored to be here.
James H.M. Sprayregen, P.C., Partner, Kirkland & Ellis LLP
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What they Said
Bahram Vakil
Founding Partners, AZB & Partners
Since its inception, almost a year ago, over 370 cases have been admitted under the Insolvency and Bankruptcy Code, 2016 (“Code”). In the first week of August, the National Company Law Tribunal bench at Hyderabad made history by passing the first-ever Insolvency Resolution Order and the first-ever Liquidation Order under the nascent Code. In this short timeframe, the Courts too (including the Supreme Court) have passed several very helpful judgments, especially in respect to the key definition of a “dispute” and the overriding status of the Code. Finally and most recently, in the case of Jaypee Infratech, the Supreme Court is attempting to strike a balance between protecting the interests of the homebuyers and upholding the validity of the Code. And this is just the beginning… picture abhi baki hai!
The event was wonderful, high-profile speakers, highprofile audience, so this was definitely an event to be present at the very interesting start of the new insolvency regime. Well, I think, IBC is about 280 days in practice and it has to develop. I remember in Germany when we had the new Bankruptcy Code, it took a few years to be considered as a mature tool to restructure companies in trouble. So, it will take some time, but we’re very optimistic that this will be a true success for the Indian recovery and restructuring business. I absolutely foresee progress, but it will take some time for everybody to get used to it. In the end, however, this will be an overwhelming success for the whole atmosphere for restructuring and insolvency. This is very important, and I would like to congratulate our Indian friends to have been able to achieve it.
Shailen Shah
Deal Advisory, Restructuring & Insolvency, BSRR & Co November 2017 | Legal Era | www.legaleraonline.com
Dr. Steffen Koch
Partner, hww hermann wienberg wilhelm
Lenders’ selection of IP should be based on the experience of the IP, his/her credibility and integrity, and his/her ability to mobilize resources. It shouldn’t necessarily be based on the ‘lowest bidder wins’ approach. A suboptimal selection may lead to sub-optimal results. IP professionals should regularly communicate with creditors and update them on the work done, key progress achieved and efforts involved to avoid disputes later. IP professionals should maintain the balance between charging fair fees with risk associated with the engagement.
Exclusive
Plenary Session I: 270 Days And Counting: Success Stories Under And Around IBC (L-R): Bahram N. Vakil, Founder Partner, AZB & Partners; Siby Antony, MD & CEO, Edelweiss ARC; Damini Marwah, General Counsel, Axis Bank; Ashish Chhawchharia, Partner, Grant Thornton
Plenary Session II: Earning Your Crust: How Insolvency Professionals Get Remunerated?(L-R): Shailen Shah, Deal Advisory, Restructuring & Insolvency, BSRR & Co; Dr. Steffen Koch, Partner, hww hermann wienberg wilhelm; Shagun Dubey, Consultant, RSMA; Harish Chander, Executive Vice President, Edelweiss Financial Services Ltd
Plenary Session III: Use And (Misuse) Of Ibc For Recovery Of Debt: How To Curb The Dangerous Trend? (L-R): Anju Agarwal, Director, ASC Consulting Pvt Ltd.; Aashit Shah, Partner, JSA ; Satyajit Gupta, Principal – M&A/ Corporate, Advaita Legal Attorneys and Advocates; Pooja Mahajan, Partner, Chandhiok & Associates, Advocates and Solicitors
Plenary Session IV: Acquiring Old Businesses In New Ways Or Just The New Packaging? What Kinds Of Resolution Plans Are Being Put Forward? (L-R): L. Vishwanathan, Partner, CAM; Anurag Das, Managing Partner, Rain Tree Capital; Nick Wood, Partner – Restructuring Services, Grant Thornton UK; Ashok Kumar, Director, BlackOak LLC www.legaleraonline.com
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Plenary Session V: Creditors & Debtors: Friends Or Foes - Does The Blame Game Continue?(L-R): Divyanshu Pandey, Banking and Finance Partner, J. Sagar Associates (JSA); Alok Dhir, Founder and Managing Partner, Dhir & Dhir Associates; Paul Seah, Partner, TKQP (Singapore); Dr. Steffen Koch, Partner, hww hermann wienberg wilhelm
Plenary Session VI: Pre-Packs: The Missing Player In The Game (L-R): Ashwin Bishnoi, Partner, Khaitan & Co; James H.M. Sprayregen, P.C., Partner, Kirkland & Ellis LLP; Richard Heis, Partner, KPMG UK; Paul Williams, Managing Director (Restructuring), Duff & Phelps, UK; Rudrapriyo Ray, President and Head, Structured Finance Group (SFG)
Plenary Session VII: Raising Finance – Interim & Exit – Where To Find The Money, How To Spend? (L-R): Abizer Diwanji, Partner, National Leader, Financial Services, Restructuring Services, EY India; Richard Heis, Partner, KPMG UK; Nikhil Shah, Managing Partner, A & M; Anurag Das, Managing Partner, Rain Tree Capital; Harish Chander, Executive Vice President, Edelweiss Financial Services Ltd
Plenary Session VIII: The View From The Bench - Judge’s Take On IBC Journey (L-R): Damini Marwah, General Counsel, Axis Bank; Justice S.C. Gupte, Judge, Bombay High Court; Justice R.D. Dhanuka, Judge, Bombay High Court
November 2017 | Legal Era | www.legaleraonline.com
Exclusive
Plenary Session IX: Cross Border Insolvency Law – Necessity Or An Option? (L-R): Dinkar Venkatasubramanian, Partner, Restructuring & Turnaround, Ernst & Young Private Limited; James H.M. Sprayregen, P.C., Partner, Kirkland & Ellis LLP; Ashok Kumar, Director, BlackOak LLC; David Kidd, Partner, Linklaters; T.K. Viswanathan, Chairman, Bankruptcy Law Reform Committee
Plenary Session X: Will IBC Change The Recovery/Resolution/Liquidation Judicial Landscape For The Positive? (L-R): Dhananjay Kumar, Partner, Cyril Amarchand Mangaldas; Sapan Gupta, National Practice Head - Banking and Finance, Shardul Amarchand Mangaldas; Ravindra Kadam, Senior Counsel, Bombay High Court; Venkatesh R. Dhond, Senior Advocate, Bombay High Court; Chaitanya D. Mehta, Managing Partner, Dhruve Liladhar & Co
Plenary Session XI: IBC Proceedings – Past, Present & Future (L-R): Mukul Shrawat, Member Judicial, National Company Law Tribunal, Mumbai Benches; Amarjit Singh Chandhiok, Senior Advocate, President, INSOL India
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Highlights AIRTEL FINED `30,000 FOR WRONG SIM DEACTIVATION intimidation against Airtel. Considering Rao’s complaint, Airtel informed the forum that when the company had offered to reactivate Rao’s connection, he had demanded a fancy number along with a compensation of `10 lakh. Airtel said that they were not directly liable as a smaller outlet which represented it had caused the problem.
According to Airtel, the forum had limited jurisdiction in the matter which came under the purview of the Telegraph Act, 1885 and the consumer would have to approach an arbitrator appointed by the Centre. The Hyderabad District Consumer Forum imposed a fine of `30,000 on Bharti Airtel for wrongful deactivation and porting of a SIM card without the consent of the consumer, Mr Raghavendar Rao, a resident of Balkampet, Hyderabad. The SIM card of Rao, who had been an Airtel user since 2010, was terminated in 2015. However, the card was reactivated within a week but terminated once again within two days.
Rao claimed that the termination of his card cost him a loss of `16 lakh, and therefore, he lodged a case of cheating and
In response to Airtel’s statement, the forum cited a judgment given in 2012 by the Maharashtra State Consumer Commission to state that it had the jurisdiction. It took note of the fact that Airtel had offered the consumer means to have the connection restored, which the consumer had declined. Notably, the forum took note of this fact and also the fact that Rao failed to provide proof of the losses suffered and gave a decision partially in favor of the consumer. Considering all facts of the case, the forum thus reduced the compensation claim from `16 lakh to `30,000.
FLIPKART ACQUIRES MOBILE AND IT PRODUCTS SERVICE CHAIN F1 INFO SOLUTIONS Flipkart, the Ecommerce major has acquired mobile phone and electronic products repair and services startup F1 Info Solutions as it seeks to enhance after-sales offerings. Flipkart has merged F1 Info Solutions with its subsidiary Jeeves, a third-party service provider for home appliances and furniture. F1 Info Solutions co-founder and CEO, Shammi Moza will be joining Flipkart as senior director and will continue to hold responsibility for the business, as a part of the deal. He will report to Abhijit Upadhye, vice president at Flipkart and head of Jeeves. Kalyan Krishnamurthy, CEO, Flipkart expressed that the acquisition is a big add-on for the company that would help the firm give its customers a comprehensive service ecosystem that takes care of repair and service needs. “Flipkart is the top destination for mobile phones in India and having created the market for online smartphones from scratch, we’re now taking our offerings several notches higher,” he said in a statement. Flipkart claims to have 70% market share in the online smartphone sales market with mobile phones being a hotly contested category among ecommerce players. With November 2017 | Legal Era | www.legaleraonline.com
the acquisition of F1 Info Solutions, Flipkart’s end-to-end capabilities in mobile phones would become a “critical service differentiator” compared to other ecommerce firms, the ecommerce firm said. Founded in 2012, Mumbai-headquartered F1 Info Solutions has a repair service network of 158 centers in 135 cities. The firm has close to 1,000 employees, including technicians, and handles more than 50,000 service calls every month across the country. F1 Info Solutions, which was chosen as No.1 in the Deloitte Technology Fast 50 India in 2015, recorded revenues of `76 crore and profit of `8 crore in financial year 2015-16.
Highlights $4.5BN LOAN DEAL SIGNED BETWEEN BANGLADESH AND INDIA Bangladesh Economic Zones Authority. Bangladesh will use the funds for 17 priority infrastructure projects, which include electricity, railways, roads, shipping and ports. As with previous line of credit (LoC) agreements, Bangladesh will pay an interest rate of 1% a year for 20 years, with a grace of 5 years as agreed. Mr. Jaitley said Bangladesh had developed significantly on the socio-economic front in the past seven years. “We have stood by Bangladesh’s attempts to develop and we will do so in the future. This significant agreement is a continuation of that effort.” On October 4, a $4.5-billion loan deal was signed between Bangladesh and India for developing its infrastructure, health and education. It was in the presence of Finance Minister Arun Jaitley and his Bangladesh counterpart, A.M.A. Muhith, by Bangladeshi Economic Relations Division Secretary Kazi Shofiqul Azam and Managing Director of the Export-Import Bank of India David Rasquinha that this agreement was signed. Mr. Jaitley said 17 development projects had been recognized under the deal. About $500 million will be used for setting up new economic zones for Indian and other investors as per Indian Finance Ministry officials and the
Mr. Muhith said Bangladesh and India have “excellent relations at the moment”. “They stood by us during our independence struggle. We hope they will continue to do so in the future.”
The $4.5bn deal was announced in April, whilst Prime Minister Sheikh Hasina’s visit to India. Mr. Jaitley’s trip to Bangladesh was used to finalize the agreement.
Under the agreement, Bangladesh will have to purchase 65% to 75% of the services, goods or works from the Indian market with the money to be provided under the new LoC following the precedence of the previous two nearly identical agreements.
QUICKDEL LOGISTICS SLAPS `300-CRORE LEGAL NOTICE ON SNAPDEAL A `300 crore legal notice has been sent to Snapdeal founders Kunal Bahl and Rohit Bansal, and Jasper Infotech, the entity which runs Snapdeal by Quickdel Logistics, the parent of GoJavas that had raised investment from Snapdeal. Anand Rai, who had acquired Snapdeal’s stake in GoJavas and merged it with his Pigeon Express stated that Snapdeal stopped doing business with GoJavas for the benefit of Vulcan and “stole” confidential business information such as data on employees and service vendors. Snapdeal held 49% stake in GoJavas and the founders of the company had sold it to Rai in a fire sale. “I’ve sent them a legal notice worth `300 crore for criminal breach of trust against GoJavas which resulted in erosion of value of Quickdel,” Rai said.
(FIR) with the Delhi Police against former promoters and directors of Quickdel - Praveen Sinha, Randhir Singh, Ashish Chaudhary and Abhijeet Singh followed with Quickdel’s notice.
The notice alleges the founders and the company of criminal breach of trust and siphoning off money from GoJavas to Vulcan Express, the in-house logistics firm of Snapdeal. Jasper Infotech filed a first information report
When contacted, a Snapdeal spokesperson termed Quickdel’s allegations of cheating, forgery, criminal breach of trust, conspiracy and criminal misappropriation of funds as baseless. www.legaleraonline.com
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Highlights $1.1BN RAISED BY OLA FROM TENCENT, SOFTBANK accelerate a nation on the move,” said Bhavish Aggarwal, cofounder and CEO of Ola. “Our new partners share our passion for building the future of transportation in India together and we look forward to learning and benefiting from their global perspectives and ecosystems.” Ola says that capital will permit it to make strategic investments in its supply chain and technology. The company said it is continuing to hold talks with other investors to raise a further $1 billion as part of the same funding round, to bring the total to $2 billion. Ola, India’s leading app-based taxi aggregator service, raised $1.1 billion in a fresh funding led by Chinese Internet giant Tencent Holdings Limited as it looks further to invest in new technologies to take on global rival Uber in the country.
The company’s largest investor, SoftBank, has committed to pump extra capital into Ola, given that it achieves certain goals which have been set. The Japanese investor has supported Didi Chuxing in China and Grab Taxi in Southeast Asia, giving it a keen understanding of the ride-hailing market.
Furthermore, in a statement on October 11, the round also saw participation of unnamed US-based financial investors and largest shareholder SoftBank, Ola said. However, the company did not disclose the valuation at which it has raised the fresh capital. “Our ambition is to build a globally competitive and futuristic transportation system in India that will support and
Martin Lau, President of Tencent Holdings said, “Ola’s unique local offerings are tailored to India’s burgeoning transportation needs. The strategic partnership with Ola makes it possible for Tencent to be part of the fast-growing ride-hailing space in the country. We look forward to helping Ola further develop India’s transportation solutions.”
LAVASA CORPORATION UNDER INSOLVENCY CASE FILED BY ULTRATECH On October 9, an insolvency petition has been filed by Aditya Birla group company UltraTech Cement against HCC’s Lavasa Corporation at the Mumbai bench of the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC). The case was listed for hearing earlier but the NCLT has fixed November 16 as the date for hearing again. According to the regulatory filing, the conversion will also be applicable to two subsidiaries — Warasgaon Assets Maintenance and Warasgaon Power Supply. “The lenders took notice of the fact that due to delay in implementation of the earlier joint lenders’ forum (JLF) approved structure, the project was stalled for two years and an additional interest of around `1,200 crore was accumulated, and hence, release of working capital for the project needs to be resolved on priority,” the filing added. Meanwhile, Lavasa had reported a net profit of `269 crore on the back of `609 crore in revenues in FY17.
The companies had filed the petition at the National Company Law Tribunal (NCLT), Mumbai branch to initiate insolvency proceedings against the companies under the Insolvency and Bankruptcy Code.
In September, Ericsson India had filed an insolvency case against Anil Ambani-led Reliance Communication (RCom) and DBS Bank and Standard Chartered Bank filed an insolvency case against edible oil maker, Ruchi Soya Industries Ltd.
As per the law, a person is considered to be insolvent when the party has ceased to pay its debts in the ordinary course of business, or cannot pay its debts as they become due, or is insolvent within the meaning of the Bankruptcy Code.
November 2017 | Legal Era | www.legaleraonline.com
Highlights BHARTI AIRTEL ACQUIRES TATA’S CONSUMER TELECOM BUSINESS “The merger is on a debt-free and cash-free basis,” said the companies. In effect, Bharti will get the Tata consumer mobile business virtually for free. However, Airtel will have to assume a portion of Tata’s unpaid spectrum payment liability, which is estimated to be `2,000 crore, but has to be paid on a prolonged basis.
The Tata Group quit the highly-competitive mobile telecom sector after nearly 15 years, merging its loss-making mobile business, consisting of Tata Teleservices Ltd and Tata Teleservices Maharashtra Ltd, with Bharti Airtel. As a part of the deal, the Tatas who are burdened with a debt of over `40,000 crore, will clear liabilities and dues. Following in the footsteps of Vodafone and Idea - the second and third largest telecom companies, respectively, – it agrees to merge to become No. 1 with a combined subscriber base of over 400 million, overtaking Airtel. In the last 5 years, this is the 7th acquisition for Airtel and will gain access to around 180 MHz of spectrum spread across 850 MHz, 1800 MHz, and 2100 MHz bands. Importantly, it will add Tata’s nearly 40 million mobile subscribers to its own base of 280 million customers, taking it comfortably past the 300-million mark.
“We believe today’s agreement is the best and most optimal solution for the Tata Group and its stakeholders. Finding the right home for our longstanding customers and our employees has been the priority for us,” Tata Sons chairman N Chandrasekaran said. “We have evaluated multiple options and are pleased to have this agreement with Bharti.” Bharti Airtel chairman Sunil Mittal said. “On completion, the proposed acquisition will undergo seamless integration, both on the customer as well as the network side, and further strengthen our market position in several key circles,” he said, summing that addition of Tata’s spectrum makes “an attractive business proposition.” It is believed that the deal states the beginning of a bond between the two corporates which could stretch and heighten businesses such as DTH, enterprise and undersea cable. The joint statement from the companies made a reference to this, “Tata and Airtel will work together to further explore other areas of cooperation, that will be value added for both groups.”
GOVERNMENT TO SELL 51% STAKE IN PAWAN HANS On October 13, bids from private companies, including foreign ones, were invited by the government, to buy out its entire 51 percent stake along with management control in helicopter service operator, Pawan Hans Ltd. The Miniratna PSU is under the administrative control of the civil aviation ministry and the remaining 49 percent stake is held by oil behemoth, ONGC. The government asked private players to submit the bids by December 8, in a global invitation for expression of interest. “The government proposes to disinvest its entire equity shareholding of 51 percent in Pawan Hans Ltd by way of strategic disinvestment to investors, along with transfer of management control,” it said while inviting bids. The Department of Investment and Public Assets Management (DIPAM) has already lined up a horde of PSUs for strategic disinvestment. While expression of interest (EoI) from bidders was asked for four PSUs on October 12, the same for Pawan Hans was issued on October 13.
Of the lot in question, the government plans to sell its entire stake in Hospital Service Consultancy Corporation (HSCC), Engineering Projects (India) Ltd (EPI) and National Projects Construction Corporation (NPCC) to a similarly-placed CPSE. Besides, Bridge and Roof Co will be sold to a private player. The government plans to raise `15,000 crore via strategic sales in the current fiscal out of its total disinvestment target of `72,509 crore. www.legaleraonline.com
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Policy Update INSOLVENCY BOARD AMENDS RULES, PROTECTs HOME BUYER INTERESTS The Insolvency & Bankruptcy Board of India has amended rules to command that any resolution plan for a company has to precisely state how it has dealt with the interest of all stakeholders. Protecting the interests of home buyers of real estate players such as Jaypee Infratech and some of the entities of Amrapali Group has been the main aim. The altered rules were notified by the regulator for insolvency and bankruptcy proceedings and will make sure that banks and other creditors do not escape by protecting their own interests at the expense of others who are impacted by the action. Banks are part of the creditors’ committee, the key decision-making body after a company is admitted for bankruptcy. The new law, enacted last year, seeks to speed up the resolution process in a period of 180 days, with a possible extension of 90 days, by appointing insolvency resolution professionals who will take charge of the company’s operations and prepare plan. Under the law, if the creditors’ committee agrees, it will call for applications from other interested companies to take over the company after finalizing an information memorandum. Insolvency experts said the law accommodated the arrangement being authoritative on the corporate debtor (the organization) and its workers, individuals, lenders,
underwriters and different partners associated with the determination design. But there was no obligation in the rules to give any treatment to the stakeholders other than the financial creditors (the banks) and operational creditors, which includes vendors and others who may have dues. The National Company Law Tribunal will decide on the final resolution plan, based on bids that are received, in reference to the comfort provided by the revised rules. The government and IBBI have been trying to detect solutions to ensure that the interests of home buyers hit by a surge of insolvency proceedings against builders are fully protected. It has already eased the process to file for claims and is thinking of other steps.
REPO RATE UNCHANGED AT 6%, GROWTH PROJECTION REVISED TO 6.7%: RBI The RBI, however, lowered the statutory liquidity ratio in its fourth bimonthly review of the monetary policy – the reserve requirement that commercial banks need to maintain in the form of gold or government-approved securities before providing credit to customers – by 50 basis points to 19.5 percent, with effect from October 14 fortnight. In the last one year, since the MPC was set up in October 2016, it has lowered the repo rate twice – by 25 base points each in October 2016 and August 2017. The repo rate will remain unchanged at 6 percent and the reverse repo rate will remain at 5.75 percent. However, the Central bank revised the growth projection down from 7.3 percent to 6.7 percent. On October 4, the Reserve Bank of India’s (RBI’s) sixmember Monetary Policy Committee (MPC), headed by Governor Urjit Patel, kept the repo rate – the key policy rate at which the RBI lends money to banks – unchanged at six percent, in a decision that was broadly in line with expectations. November 2017 | Legal Era | www.legaleraonline.com
Most analysts had been expecting the central bank to maintain the status quo this time, but affect a rate cut later in the financial year. Some have even been saying that the rate-cut cycle, which started on January 15, 2015 with a rate reduction to 7.75 percent from 8 percent, might have reached its end.
Policy Update STRICT KYC NORMS INTRODUCED TO KEEP eWALLETS SAFE: RBI An introduction of more strict Know Your Customer (KYC) norms for wallet users has been made by the Reserve Bank of India (RBI), in a set of fresh guidelines along with allowing interoperability and bringing in fraud detection norms to prevent fake wallet transactions - steps which will change the scope of operations for mobile wallets. Customers can now move money between wallets of different companies and banks seamlessly through Unified Payments Interface (UPI) unless they complete full KYC formalities, like they do for bank accounts. Mobile wallets, which have been consistent to a minimum KYC format (like a simple verification of mobile number) will have to convert to full KYC wallet within a year of opening it. All existing wallet users have to convert to the full KYC format by this year end. The RBI said minimum KYC wallets cannot have a balance of more than `10,000 and this can be allowed only for purchase of goods and services and not for remittances to other wallets or bank accounts. Full KYC wallets will have a limit of `1 lakh and all facilities for fund transfer will be allowed. The RBI guidelines show that only serious players with deep pockets will be able to enter the payments space. “The fact that 12 months has been given for conversion of wallets into full KYC ones shows that they have enough time to convince customers to complete KYC requirements,“ said Naveen Surya, chairman of Payments Council of India, the
industry body for payments players. “I believe, by then, the KYC for mobile numbers can be completed and Aadhaar rails might improve, making it easier to get KYC formalities done.” RBI has also increased the networth requirements for players in this space. “The higher positive networth requirement for wallets is justified because RBI is recognizing wallets as a serious financial services space, “said Vijay Shekhar Sharma, founder of Paytm. “If money will be moved across wallets of different companies, they will need that higher capital to be able to support such transactions.” RBI has also increased the limit on the amount that can be transferred from wallets to `1 lakh. It also allowed inward international remittance for wallets, with an upper limit of `50,000.
TRAI INVITES COMMENTS ON PATENT LAW AND STANDARD ESSENTIAL PATENTS stakeholders are invited to submit their comments by October 16, 2017. The paper discusses the background of the Telecommunication industry and existing concerns of the local telecom manufacturing and all government initiatives to boost local telecom manufacturing. Comments have been invited on whether the existing patent laws sufficiently address the concerns of local manufacturers and measures for supporting local telecom manufacturing industry.
A Consultation paper has been issued on promoting local telecom equipment manufacturing in India by Telecom Regulatory Authority of India (TRAI), and all
Suggestions for dispute resolution mechanism for determination of Royalty distribution on FRAND are also invited. The consultation paper is available on the TRAI site (at publications/consultation papers). www.legaleraonline.com
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Legal Precepts Pimp one who derives income from the earnings of a prostitute usually by soliciting business compare panderer
one entity. Generally, there are common features in the homes or lots governed by covenants attached to the deed. Most planned developments have...
Piracy pl: -cies 1: an act of robbery esp. on the high seas; specif: an illegal act of violence, detention, or plunder committed for private ends by crew or passengers of a private ship or aircraft...
Plat [probably alteration of plot]: a plan, map, or chart of a piece of land with present or proposed features (as lots); also: the land represented
Pirate a person who commits piracy Piti Principal, Interest, Taxes, and Insurance Piti Reserves a cash amount that a borrower must have on hand after making a down payment and paying all closing costs for the purchase of a home. The principal, interest, taxes, and insurance (PITI) reserves must... Pixel A pixel is the primary unit of color on a computer monitor or in an electronic image. Pl 1 plaintiff 2 public law Plagiarize rized-rizing [from plagiary plagiarist, from Latin plagiarius, literally, kidnapper, from plagium netting of game, kidnapping, from plaga net] vt: to copy and pass off (the expression of... Plain Meaning Rule a rule in statute or contract interpretation: when the language is unambiguous and clear on its face the meaning of the statute or contract must be determined from the language of the statute or ... Plain View 1: a location or field of perception in which something is plainly apparent 2: a doctrine that permits the search, seizure, and use of evidence obtained without a search warrant when such evidence...
Plea [Anglo-French plei plai legal action, trial, from Old French plait plaid, from Medieval Latin placitum, from Latin, decision, decree, from neuter of placitus, past participle of placre to... Plea Agreement an agreement reached at the conclusion of plea bargaining Plea Bargain The process in which the defendant and the prosecutor in a criminal case work out a mutually satisfactory disposition of the case subject to court approval. It usually involves the defendant's... Plea Bargaining the negotiation of an agreement between the prosecution and the defense whereby the defendant pleads guilty to a lesser offense or to one or some of multiple offenses usually in exchange for more... Plead pleaded or: pled also: plead [pled] pleading [Anglo-French plaider to argue in a court of law, from Old French plaid legal action, trial more at plea] vi 1: to make an allegation in an... Pleading one of the formal declarations (as a complaint or answer) exchanged by the parties in a legal proceeding (as a suit) setting forth claims, averments, allegations, denials, or defenses Pleadings in a civil case, the written statements of the parties stating their positions about the case.
Plain Clothes dressed in civilian clothes while on duty used esp. of a police officer Plaintiff [Middle French plaintif, from plaintif, adj., grieving, from plaint lamentation, from Latin planctus, from plangere to strike, beat one's breast, lament]: the party who institutes a legal action or... Plan 1: a diagram of an area of land (as a subdivision) filed in the registry of deeds see also plot plan 2: a detailed program; esp: one made under chapter 13 of the Bankruptcy Code that places... Planned Unit Development (Pud) a development that is planned, and constructed as November 2017 | Legal Era | www.legaleraonline.com
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Mind-Boggling
Legal Crossword
ACROSS 1. Death (6) 4. Examination of a body after death (4,6) 8. Legal limb? (4,3,2,3,3) 10. Free (2,5) 12. Tape statement in advance (9) 14. Patron (4) 16. India---- (4) 17. Not at hand evidence (3) 19. Broadcast (3) 21. Like some arguments (3,5) 22. Pariahs (8) 23. Law degree (3) 24. Obtain report (3) 25. Contradict (4) 26. Chairman of RNRL (4) 29. Campaign goal (4) 30. Suicide lasso (4) 32. Court room request (7) 35. Ownership of real estate by two or more
persons (7,2,6)
37. Undeviating matter (10) 38. Disciplinary action (6) Nitaa Jaggi
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5. Less risky venture (5) 6. ----------Rent Control Act,1999 (11) 8. Memorabilia (6) 11. Judge (6) 13. Lethal weapon (6) 15. Misleading clue (3,8) 16. Cue in (6)
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18. Bank account offering (8) 20. Evil intent (6) 27. Shorthand takers in court (6) 28. Check a document (4)
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31. Cheque endorser (5) 33. Ceiling on money (5)
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For answers to the Crossword & Sudoku puzzle, turn to Legal Precepts section on page no. 64
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34. Section (4) 36. Navy’s C.I.A. (3)
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