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Bimonthly Legal Tablet Volume 2 Issue 1 January 05, 2012

Bimonthly Legal Tablet : Volume 2 Issue 1

Bimonthly Legal Tablet

Volume 2, Issue 1, January 05, 2012

Q. Have you heard aboutthe lawyer’s word processor?
A. No matter what font you select, everything
comes out in fine print.

Law & Policy
: The Land Acquisition, Rehabilitation andResettlement Bill, 2011
: The Right of Citizens for Time Bound
Delivery of Goods and Services and
Redressal of their Grievances Bill, 2011
: The Public Interest Disclosure and
Protection to Persons Making the
Disclosure Bill, 2010
: The Judicial Standards and Accountability
Bill, 2010
: The Civil Liability for Nuclear Damage Bill,2010
: The Cable Television Networks
(Regulation) Amendment Bill, 2011
: Draft National Telecom Policy,2011
: The Draft National Pharmaceutical PricingPolicy, 2011
: Legal Pronouncements
: Arbitration Law
: Company Law
: Competition Law
: Analysis
: Substantive law vs. Curial law : in
international commercial arbitration
: Business News

Law & Policy

The Land Acquisition, Rehabilitation and Resettlement Bill, 2011

The Land Acquisition, Rehabilitation and Resettlement Bill, 2011 was introduced in the Lok Sabha on September 07, 2011. The Bill proposes a unified legislation for acquisition of land and adequate rehabilitation mechanisms for all affected persons and replaces the Land Acquisition Act, 1894. The

provisions of the Bill relating apply in cases of acquisition of land by the appropriate Government, (a) for its own use and control, (b) to transfer it for the use of private companies for public purpose, and
(c) on the request of private companies for immediate use for public purpose.

The Right of Citizens for Time Bound Delivery of Goods and Services and Redressal of their Grievances Bill, 2011

The Bill seeks to lay down an obligation upon every public authority to publish citizens charter stating therein the time within which specified goods shall be supplied and services to be rendered and provide for a grievance redressal mechanism for non-compliance of citizens charter. The Bill makes it compulsory for every Ministry and Department to act within 30 days on complaints from the public, failing which an appeal could be filed with a higher authority. This authority will have to dispose of the
appeal within 30 days. Every public authority is required to appoint a ‘Grievance Redress Officer’. The Bill seeks to impose a penalty on the ‘Grievance Redress Officer’ if any complaint is not addressed within the stipulated timeframe.

The Public Interest Disclosure and Protection to Persons Making the Disclosure Bill, 2010

The Whistleblowers Protection Bill was passed by the Union Cabinet of August 09, 2010. The Bill is officially known as the Public Interest
Disclosure and Protection to Persons Making the Disclosure Bill, 2010. The Bill aims to protect the whistleblowers from any discrimination or victimization at their workplace. The Bill provides for concealing the identity of a citizen who discloses information about the misuse of power and money. Those who reveal the identity of the whistleblower will be held liable and penalized by the Central Vigilance Commission. Furthermore, the Bill provides for addressing complaints against public sector employees and employees of the Central and the State Government.

The Judicial Standards and Accountability Bill, 2010

The Bill seeks to lay down judicial standards and provide for
accountability of judges. The Bill makes it mandatory for every judge to make a declaration of his assets and liabilities within 30 days from the date on which the judge makes and subscribes an oath or affirmation to enter his office. The judges will be required to declare their assets and liabilities and also that of their spouse and children. The Bill establishes the National Judicial Oversight Committee, the Complaints Scrutiny Panel and an investigation committee. Any person can make a complaint against a judge to the Oversight Committee on grounds of ‘misbehaviour’. The Oversight Committee may issue advisories or warnings to judges, and also recommend their removal to the President.

The Civil Liability for Nuclear Damage Bill, 2010

The Bill provides for civil liability for nuclear damage and specifies
procedures for compensating victims through a no-fault liability regime.

It seeks to fix no-fault liability on operators and gives them a right of recourse against certain persons. Every operator is required to take out insurance policy or such other financial security or combination of both, covering the operator’s liability. The Bill further specifies who can claim compensation and the authorities who will assess and award compensation for nuclear damage.

The Cable Television Networks (Regulation) Amendment Bill, 2011

The Bill amends the Cable Television Networks (Regulation) Act, 1995
and repeals the Cable Television Networks (Regulation) Amendment
Ordinance, 2011. The Bill provides for registration of all cable operators.

The Bill empowers the Central Government to make it obligatory for every cable operator to transmit or re-transmit programmes of any channel in an encrypted form through a digital addressable system. The Central Government is further empowered to specify names of Doordarshan channels or channels operated by or on behalf of the Parliament, to be mandatorily carried out by the cable operators in their cable service.  

Draft National Telecom Policy-2011

The Policy seeks to, inter-alia, develop a robust, state-of-the-art telecommunication network providing seamless coverage with special focus on rural and remote areas bridging digital divide. The Policy has the vision ‘Broadband on Demand’ and envisages leveraging telecom infrastructure to enable all citizens and businesses to participate in the Internet and web economy thereby ensuring equitable and inclusive development across the nation. The Policy provides for creation of technology neutral ‘Unified Licenses’, which is envisaged in two separate categories – the ‘Network Service Operator’ and ‘Communication Network Service Operator’, which is licensed to maintain converged networks for delivering various types of services like, Voice, Data, Video, broadcast, IPTV, VAS etc., in a non-exclusive and non-discriminatory manner.

The Draft National Pharmaceutical Pricing Policy, 2011
The Policy seeks to put in place a regulatory framework for pricing of drugs so as to ensure availability of required medicines – ‘essential medicines’ – at reasonable prices even while providing sufficient opportunity for innovation and competition to support the growth of industry, thereby meeting the goals of employment and shared economic well being for all. It lays down and discusses in detail the three key principles for regulation of prices, namely; (i) essentiality of drugs; (ii) market based pricing; and (iii) control of formulations prices only.

Legal Pronouncements

Mohammed Tariq Sultan vs. Hong Kong & Shanghai Banking Corporation
Ltd. MANU/CO/0086/2011

Charging different rates of interest from the customers over a period of time is dependant upon a number of factors and cannot be said to be anti- competitive unless some evidence is produced to the contrary. The Competition Commission held that there is no contravention of provisions of section 3 and 4 of the Competition Act.

Pitambar Books Pvt. Ltd Delhi vs. Primary Education Department and others; Case no. – 53/2011, Dated: 30.11.2011

The Competition Commission observed that a conscious choice of opposite parties as a procurer as regards mode of selection of a vendor through a process of open tender cannot be termed as anti-competitive only for reasons that it has chosen to invite tenders from parties belonging to certain specific geographic areas. The exercise of consumer choice per se will not mean that harm is caused to the competition in the market.

Durga Charan Rautray vs. State of Orissa & anr. MANU/SC/1279/2011

The Supreme Court held that even after receipt of payment on the
preparation of the final bill, it was open to the Appellant to seek redressal of his disputes by way of arbitration even though he hadn’t raised any objections.

Employees Provident Fund Commissioner vs. Esskay Pharmaceuticals Limited 2011(6) UJ3800(SC)

The Supreme Court has observed that “the effect of inserting Section 529A in the Companies Act in 1985 is only to expand the scope of the dues of workmen and place them at par with the debts due to secured creditors and there is no reason to interpret this amendment as giving priority to the debts due to secured creditor over the dues of provident

fund payable by an employer. After the amount due from an employer
under the EPF Act is paid, the other dues of the workers will be treated at par with the debts due to secured creditors and payment
thereof will be regulated by the provisions contained in Section
529(1) read with Section 529(3), 529A and 530 of the Companies Act.”

Reva Electric Car Company P. Ltd.VsGreen Mobil MANU/SC/1396/2011

The Supreme Court has held that under Section 16(1)of the Arbitration and Conciliation Act, 1996 the legislature makes it clear that while considering any objection with respect to the existence or validity of the arbitration agreement, the arbitration clause which formed part of the contract, has to be treated as an agreement independent of the other terms of the contract. Section16 (1) (b) further provides that even if the arbitral tribunal concludes that the contract is null and void, it should not result, as a matter of law, in an automatic invalidation of the arbitration clause.

K.N. Govindan Kutty Menon Vs.C.D. Shaji MANU/SC/1412/2011

The Supreme Court has held that there is no restriction on the power of the
LokAdalat to pass an award based on the compromise arrived at between the parties in respect of cases referred to by a criminal court under Section 138 of the Negotiable Instruments Act. By virtue of the deeming provision it has to be treated as a decree capable of execution by a civil court.

Grid Co. Ltd. and another verses Sri Sdananda Doloi and others MANU/SC/1506/2011
Supreme Court has asked courts not to interfere in the decisions of
managements on contractual employments unless the termination of such services is arbitrary.


Substantive Law vs. Curial Law : In International Commercial Arbitration

Law of arbitration as it has developed globally, recognizes that there is a difference between the law of contract and the law governing the conduct of the Arbitral Tribunal. Parties are empowered to nominate which national laws will govern either or both these divisions. In international commercial arbitration, it has become a practice that parties agree upon a substantive law and on curial law. Parties are free to choose substantive law applicable to the contract, curial law applicable to arbitration proceedings and the judicial seat of arbitration. Such choice can be express or by implication Substantive law is the law governing the contract while the curial law is the law governing the arbitration proceedings between the parties to the dispute.

In international commercial arbitration, it has become a practice that parties agree upon a substantive law and on curial law. Parties are free to choose substantive law applicable to the contract, curial law applicable to arbitration proceedings and the judicial seat of arbitration.

The Arbitration and Conciliation Act 1996 (hereinafter called A&C Act) applies to arbitrations which are held in India between Indian nationals and to international commercial arbitrations whether held in India or out of India. Part 1 of the A& C Act covers all hues of international commercial arbitration The Supreme Court in its various judgements has held that the provisions of Part I of the Act would apply to all arbitrations including international commercial arbitrations and to all proceedings relating thereto. Further where such arbitration is held in India, the provisions of Part I would compulsorily apply and the parties are free to deviate to the extent permitted by the provisions of Part I. In the case of international commercial arbitrations held out of India, provisions of Part I would apply unless the parties by agreement, express or implied exclude all or any of its provisions.. Therefore a question arises as to whether part 1 of the A& C Act is excluded either expressly or impliedly by choosing procedural law other than A & C Act for conducting arbitration proceedings. Following the dicta of the Supreme Court and the various High Courts with reference to choice and applicability of substantive and curial law with specific reference to conflict of laws in international commercial arbitrations, the following propositions emerge:

1. Parties have the freedom to choose the substantive law governing the
international arbitration agreement as well as the curial /procedural law governing the conduct of such arbitrations and the judicial seat of arbitration.

2. Where there is no express choice of law governing the contract as a whole or the arbitration agreement in particular, there is, in the absence of any contrary indication, a presumption that the parties have intended that the proper law of the contract as well as the law governing the arbitration agreement are the same as the law of the country in which the arbitration is agreed to be held.

if the language of the arbitration clause clearly suggests that all
the three laws of substantive, curial and law relating to the
conduct of arbitration are laws of another country, then parties to the international commercial arbitration have impliedly excluded application of Part I of the Arbitration and Conciliation Act 1996.

3. Where the proper law of the contract is expressly chosen by the
parties, such law must, in the absence of an unmistakable intention to the contrary, govern the arbitration agreement which is a part of such a contract.

4. The governing law of the contract is the proper law of the contract and unless otherwise provided, such law governs the whole contained in a separate agreement. However the law of the place of arbitration may have its relevance in regard to procedural matters.

5. In order to determine the curial law in the absence of an express
choice by the parties, it is first necessary to determine the seat of arbitration by looking into the agreement.

6. A claim may be arbitrable under the law governing the arbitration agreement and under the lex arbitri (i.e. law of the place of arbitration but not under the law of the place of enforcement).

7. The effective conduct of an international commercial arbitration may depend upon the provisions of the law of the place of arbitration.

8. The choice of a particular place of arbitration may have important and unintended consequences. This is because the law of that place may confer powers on the courts or on the arbitrators that were not expected by the parties.

9. Pragmatism would prompt that curial law should invariably
correspond to where the seat of arbitration is located.

In conclusion it can be said that when substantive law has been agreed by the parties unless contrary is shown, it is presumed that parties would not agree to contrary with respect to curial law. Further if the language of the arbitration clause clearly suggests that all the three laws of substantive, curial and law relating to the conduct of arbitration are laws of another
country, then parties to the international commercial arbitration have
impliedly excluded application of Part I of the Arbitration and Conciliation
Act 1996.

Business News

November 9, 2011 – The government plans to allow companies with outstanding secured loans to be converted into limited liability
partnerships, a more flexible corporate structure. A circular is being prepared by the corporate affairs ministry in order to give some clarifications to the third and fourth schedule of the LLP Act (Limited Liability Partnership Act) As per the circular due to be issued, companies with unsecured loans will no longer require creditors consent in writing for conversion into LLPs. Instead of seeking permission from individual creditors, such companies will just need to issue a notification or an advertisement. The circular will clarify that a minor cannot be a partner in an LLP.

November 10, 2011 – 1. Land Acquisition Bill unlikely to come up in the winter session.
2. The Govt. has done away with automatic approval of foreign direct investment (FDI) in the existing pharmaceutical companies. For any merger or acquisition, the overseas investor will have to seek permission from the Foreign Investment Promotion Board (FIPB). After six months it will be the Competition Commission of India (CCI) which will vet such deals.
3. DLF gets stay on CCI’s Rs. 630 crore penalty. The Competition Appellate Tribunal will hear the final arguments in the second week of February.

November 11, 2011 – 1. Jack Palmer vs. Infosys: In a blow to Infosys, a US Federal Judge ruled against arbitration. The case whose proceedings started in February charges Infosys with large scale visa fraud. The case will now be decided in court.
2. Supreme Court has held that a director of a firm cannot be held liable for the wrongs committed by his company unless it is proved that he was involved in the irregularities. Also a former director cannot be prosecuted in a case of bouncing of a cheque if it has been issued by the Company after he ceased to be on its board member.

November 17, 2011 – 1. The Pension Fund Regulatory and Development

Authority Bill 2011 has been cleared by the cabinet and will be placed in
the winter session of the parliament.
2. Starting April 1,2012, the validity period of cheques, pay orders and
demand drafts or bankers cheque will be three months instead of six
3. RBI in a separate notification has clarified that in joint fixed deposits, the signature of even one depositor should be considered sufficient for payment of proceeds on maturity.

November 18, 2011 – 1. Government expects to unveil new telecom policy in January.
2. Union shipping Ministry plans to issue notifications on ships which are over 25 years old.

November 19, 2011 – New radiation emission guidelines for mobile phones and telecom towers finalised by the government stipulate emission levels for hand sets sold in India and make it compulsory for these levels to be displayed on phones and retail outlets. The new guidelines are expected to be formally announced by telecom minister Kapil Sibal shortly.

• Delhi High Court asked CCI to probe whether the All India Chess Federation is abusing its dominant position by prohibiting players associating themselves with other chess federations.
• Supreme Court dismisses a special leave petition filed by Times Now
seeking relief against a High Court decree in a defamation suit.
• Information Technology companies in South Asia may not be adequately
prepared to adopt cloud computing and deal with changes it can impose
on their approach to managing Information Technology, says a study by
Symantic Corp.

November 20, 2011 – The Government notified the implementation rules
for the civil liability for Nuclear Damage Act which gives operators the right to seek compensation from suppliers for a limited period of five years and not for the entire lifetime of a reactor.

November 23, 2011 – 1. Mumbai High Court has ruled that the Income Tax department cannot deny benefits of deduction to the assesse company on the ground that they must directly employ ten or more workers in their establishments.
2. RBI said today that non-resident investors will be allowed to invest upto USD 10 billion in IDF’S.
3. RBI said that it was removing the limit of 100 million placed on net supply of foreign exchange in the market through rupee swaps.

November 24, 2011 – 1. The government said that no time frame can be
given for implementation of draft National Pharmaceutical Pricing Policy
2011 as it is awaiting response from concerned ministries and stake
2. The Supreme Court has asked courts to send accused persons to jail only after conviction. Supreme Court said denial of bail to an accused for an indefinite period infringed on the fundamental right to life and personal liberty.
3. The Draft Real Estate (Regulation and Development) Bill 2011 has been
attacked by the Real Estate Developers Association and has been termed
derogatory and draconian.
4. The Association of South east Asian Nations (ASEAN) is keen on inking an air services agreement with India by end of 2012.

November 25, 2011 – Government hopeful of getting Companies Bill passed in the winter session.

November 28, 2011 – 1. Ashok Chawla chairman of the country’s
Competition watchdog says the CCI will step in whenever there is abuse of
market dominance by private or state controlled monopolies.

2. FDI in retail- government clarifies sourcing rule for foreign

November 30, 2011 – The U.S Federal Trade Commission has said that
Face Book has pledged to strengthen customer consent rules on privacy
and to shut down all access to accounts deleted by customers in 30days or

December 1, 2011 – 1. Draft EU Law proposes splitting up of big audit
2. Government is working to replace the existing Person with Disability Act 1995 with a legislation for empowerment of persons with disabilities which will be in harmony with United Nations Convention on Rights of Persons with Disabilities. (UNCRPD).

December 2, 2011 – 1. Indian Companies with minority foreign ownership
will have to comply with stringent disclosure norms if they wish to set up
subsidiaries as the government seeks to plug a loophole that allows sector specific investment caps to be violated.
2. The biggest legal battle for the technology industry is playing out in a federal court in Silicon Valley where Apple is trying to stop Samsung from selling galaxy Phones and Tablets in the United States.

December 6, 2011 – Telecom Policy 2011 set to get delayed by a year. Bill to eliminate per country caps on green card put on hold.

December 13, 2011 – Cabinet passes bills relating to judicial accountability protection of whistle blowers and citizens charter.
The Companies Bill introduced in the Lok Sabha.

December 15 2011 – 1. Cabinet nod for NRI doctors to practice, teach in
2. UTV cries trademark misuse, gets Facebook page removed of agency duping aspiring actors in its name.

December 16,2011 – 1. New Companies Bill shields minority and investors firms must offer exit to dissenting shareholders.
2. Government denies plans to draft guidelines on online social media content.
3. National Manufacturing Policy gets a government push with the industry department writing to all states and select ministries to take all required measures for speedy implementation of its ambitious policy.
4. The finance ministry is set to withdraw a four month old directive that
imposed service tax on use of foreign telecom networks.
5. In late November, the Securities Appellate Tribunal (SAT) quashed an order by the Securities Exchange Board (SEBI) asking the Dalmia Group, promoters of OCL to make an open offer under the takeover regulations.
6. According to SAT, passive acquisition cannot be regarded as indirect acquisition by promoters.

December 17, 2011 – Public Sector Lender Bank of India today abolished pre-payment charges on both fixed and floating rate home loans with immediate effect.

December 18, 2011 – Union Cabinet clears National Food Security Bill.

December 19, 2011 – 1.Government to tighten laws for Nuclear Plant Operations.
2. CCI Chairman Ashok Chawla has said that the proposed exclusion of bank mergers from CCI purview is not good as other sectors may also claim such exemptions.
3. To check corporate frauds, the government today said it is making independent directors and key managerial personnel more accountable

besides strengthening the enforcement mechanism and empowering the
Serious Fraud Investigation Office. (SFIO)

December 20, 2011 – 1. The Pension Fund Regulatory and Development Authority Bill will be cleared by parliament soon.
2. Cabinet to clear Lok Pal Bill today.
3. Digitisation Bill signals growth opportunity for DTH companies.
4. New US IRS rules demand more information on foreign holdings.
5. Parliament passes the Cable Television Networks (Regulation)
Amendment Bill 2011.
6. Supreme Court has asked courts not to interfere in the decisions of managements on contractual employments unless the termination of such services is arbitrary.
7. HRD Minister Kapil Sibal moved a bill in the Rajya Sabha to amend the Copyright Act.
8. Call Centre Bill introduced in the US. It targets overseas job market.
9. India to seek Interpol help to intercept encrypted data on platforms like
blackberry, Gmail, Nokia Pushmail and Skype.
10. Parliament panel rejects bill on migration of labourers.

December 21, 2011 – 1. Kapil Sibal introduces Copyright Bill.
2. Government introduces Right of Citizens for Time Bound Delivery of
Goods and Services and Redressal of their Grievances Bill.
3. Nations putting up legal barriers as Doha deal remains years away:
4. U.S Bill may impact Indian BPO Industry, may hit Convergy’s, EXL service.
5. New Companies Bill tightens regulation regarding subsidiaries.


December 22, 2011 – 1. Government withdrew the Companies Bill and
Pension Fund Regulatory and Development Authority Bill on Wednesday.
2. A trial court in the capital issued summons to U.S based Companies
such as Google, Facebook, Yahoo and 19 other websites asking them to
take down inflammatory images of some religious figures on their
3. The Competition Commission of India is now considering a suomoto investigation into whether the states virtual monopoly in the coal sector is responsible for the slow down and stagnant output.
4. Visa norms for expats working at senior positions relaxed.

December 23, 2011 – 1. The Department of Telecommunications is set to declare third generation or 3 G roaming agreements between telecom operators illegal on the ground that they breach license conditions dealing a setback to operators such as Airtel, Idea and Vodaphone which have been banking on such services.
2. Whistle Blowers Bill to include ministers, armed forces.
3. New Telecom Policy Rules likely by June 2012.
4. Bharti Airtel along with Vodaphone and Idea were issued notices by the Department of telecom to stop their 3 G roaming agreements with immediate effect as these have been termed illegal.

December 24, 2011 – 1. Insurance Regulatory and Development Authority finally junks third party motor insurance pool.
2. Government to include more farm works under MGNREGA.
3. Supreme Court ruling on Vodaphone Tax case to have global implications.
4. TDSAT restrains DOT from enforcing 3G Pact ban on Airtel, Vodaphone and Idea.

December 25, 2011 – Telecom Commission by and large accepted the
sector regulators proposal on mergers and acquisitions rules and has not 
ruled out levying a one-time fee on operators holding spectrums beyond 6.2 mega hertz, the telecom secretary has said.

December 27, 2011 – 1. Government relaxes telecom mergers and acquisition norms.
2. Environment Minister Jayanthi Natarajan said that India will not sign
any legally binding global agreement for emissions reduction.
3. A dispute over who owns the Twitter account goes to the court as a law
suit has been filed in the U.S District Court in the Northern District of
4. Government introduces money laundering bill to bring parity with global law.
5. Electronic Delivery and Services Bill introduced in the Parliament. 6. China to introduce U.S style visa rules for foreigners.
7. Parliament gives nod to Academy of Scientific and Innovative Research (AcSIR) Bill.
December 28, 2011 – 1. Whistle Blowers Bill passed in the Lok Sabha.
2. Opposition for withdrawal of The Judicial Standards and Accountability Bill 2010.
3. Bio Diversity Policy faces anti-trust probe form CCI.
4. Bill to trifurcate MCD receives President accent.

December 29, 2011 – Six sectors : oil refinery& production, mobile&
telephone, hotel & mining to loose ‘infrastructure’ status in 3 years.

December 30, 2011 – SEBI is likely to allow promoters of companies to sell
shares by auctioning the securities through stock exchanges. The proposal
will be considered at the market regulators board meeting on January 3.

Important Bills passed in the winter session of Parliament:
• The National Capital Territory of Delhi Laws (Special Provisions) Second
Bill 2011
• The Cable Television Networks (Regulation) Amendment Bill 2011
• The Juvenile Justice (Care and Protection of Children) Amendment Bill
• The Indian Medical Council (Amendment) Bill 2011
• The Company Secretaries (Amendment) Bill 2010
• The Petroleum & Minerals Pipelines (Acquisition of Right of User in
Land) Amendment Bill 2011 (passed by Lok Sabha)
• Lokpal Bill (passed in Lok Sabha) but no constitutional status

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