Bimonthly Legal Tablet Volume 2 Issue 6 November 05, 2012

Notifications, Circulars (September – October, 2012)

A.P. (DIR Series) Circular No. 25 dated September 07, 2012 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘Overseas Investment by Indian Parties in Pakistan’

Overseas direct investment by Indian parties in Pakistan shall henceforth be considered under the approval route under Regulation 9 of the Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2004.

A.P. (DIR Series) Circular No. 29 dated September 12, 2012 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘Overseas Direct Investment by Indian Parties –
Rationalization’

Guidelines relating to submission of Annual Performance Report (‘APR’) stand amended. An Indian
party, which has set up/ acquired a Joint Venture (‘JV’) or Wholly Owned Subsidiary (‘WOS’)
overseas in terms of the Regulations contained in the Foreign Exchange Management (Transfer or
Issue of Any Foreign Security) (Amendment) Regulations, 2004, shall submit, to the designated
Authorized Dealer every year, an APR in Form ODI Part III in respect of each JV or WOS outside

India and other reports or documents as may be specified by the
Reserve Bank from time to time, on or before 30th of June every year.
The APR so required to be submitted has to be based on the latest
audited annual accounts of the JV/WOS, unless specifically exempted
by the Reserve Bank. Further, the exemption granted for submission of
APR based on the un-audited accounts of the JV/WOS subject to the
terms specified in A.P. (DIR Series) Circular No. 96 dated March 28,
2012 shall continue.

A.P. (DIR Series) Circular No. 31 dated September 17, 2012 issued by
the Reserve Bank of India, Foreign Exchange Department regarding
‘Establishment of Liaison Office (LO)/ Branch Office (BO)/ Project
Office (PO) in India by Foreign Entities – Clarification’

In terms of Notification No. FEMA 95/2000-RB dated July 02, 2003,
general permission is granted to a foreign company to open project
office in India provided it has secured from an Indian company, a
contract to execute a project in India, and subject to satisfying certain other criteria. It has been clarified that permission to establish offices, in India by foreign Non-Government Organizations/ Non-Profit
Organizations/ Foreign Government Bodies/ Departments, by whatever name called, are under the Government Route as specified in A.P. (DIR Series) Circular No. 23 dated December 30, 2009. Accordingly, such
entities are required to apply to the Reserve Bank for prior permission to establish an office in India, whether Project Office or otherwise.

A.P. (DIR Series) Circular No. 32 dated September 21, 2012 issued by
the Reserve Bank of India, Foreign Exchange Department regarding
‘Foreign Investment in Single-Brand Product Retail Trading/ Multi-
Brand Retail Trading/ Civil Aviation Sector/ Broadcasting Sector/
Power Exchanges – Amendment to the Foreign Direct Investment Scheme’ 

FDI up to 100% is now permitted in Single-Brand Product Retail Trading by only one non-resident entity, whether owner of the brand or otherwise, under the Government route subject to the terms and
conditions as stipulated in Press Note No. 4 (2012 Series) dated September 20, 2012 issued by the Department of Industrial Policy & Promotion, Ministry of Commerce & Industry, Government of India
(‘DIPP’).

FDI up to 51% is now permitted in Multi-Brand Retail Trading under the Government route, subject to the terms and conditions as stipulated in Press Note No. 5 (2012 Series) dated September 20, 2012 issued by
DIPP. Foreign airlines are permitted FDI up to 49% in the capital of Indian companies in Civil Aviation Sector, operating scheduled and non-scheduled air transport, under the automatic/Government route subject to the terms and conditions as stipulated in Press Note No. 6 (2012 Series) dated September 20, 2012 issued by DIPP.

FDI limits in companies engaged in providing Broadcasting Carriage Services under the automatic/Government route have been reviewed and the same would be subject to the terms and conditions as stipulated in Press Note No. 7 (2012 Series) dated September 20, 2012 issued by DIPP.

FDI up to 49% is permitted in Power Exchanges registered under the Central Electricity Regulatory Commission (Power Market) Regulations, 2010, under the Government route, subject to the terms and
conditions as stipulated in Press Note No. 8 (2012 Series) dated September 20, 2012 issued by DIPP. 

A.P. (DIR Series) Circular No. 35 dated September 25, 2012 issued by
the Reserve Bank of India, Foreign Exchange Department regarding
‘Establishment of Liaison Office (LO)/ Branch Office (BO)/ Project
Office (PO) in India by Foreign Entities – Reporting Requirement’

In addition to the reporting requirement contained in A.P. (DIR Series) Circular No. 6 dated August 09, 2010 read with paragraph 5(i) of A.P. (DIR Series) Circular No. 24 dated December 30, 2009, all new entities setting up LO/ BO/ PO shall also:
i. submit a report containing information in the Annex to
A.P. (DIR Series) Circular No. 35 dated September 25, 2012 within 5 working days of the LO/ BO/ PO becoming functional to the DGP of the State concerned in which the LO/ BO/ PO has established its office.
ii. a copy of the report as per the said Annex shall also be
filed with the DGP concerned on an annual basis alongwith a copy of the Annual Activity Certificate/ Annual Report (as the case may be).
iii. a copy of report thus filed as above shall also be filed with the AD
by the LO/ BO/ PO concerned.

A.P. (DIR Series) Circular No. 36 dated September 26, 2012 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘FDI in India – Allotment of Shares to person resident outside India under Memorandum of Association (MoA) of an Indian Company –
Pricing Guidelines’

Where non-residents (including NRIs) make investment in an Indian
company in compliance with the provisions of the Companies Act,
1956, by way of subscription to Memorandum of Association, such
investments may be made at face value subject to their eligibility to invest under the FDI scheme.

Press Note No. 9 (2012 Series) issued by the Government of India,

Ministry of Commerce and Industry, Department of Industrial Policy and Promotion

The Government of India has decided to permit NBFCs (i) having foreign investment above 75% and below 100% and (ii) with a minimum capitalization of US$ 50 million, to set up step down subsidiaries for specific NBFC activities, without any restriction on the
number of operating subsidiaries and without bringing in additional capital. Accordingly, paragraph 6.2.24.2(1)(iv) of Circular 1 of 2012 -Consolidated FDI Policy, effective from April 10, 2012 is amended.

A.P. (DIR Series) Circular No. 44 dated October 12, 2012 issued by the Reserve Bank of India, Foreign Exchange Department regarding
‘Foreign Exchange Management (Deposit) Regulations, 2000 – Loans to Residents/third parties against security of Non-Resident (External) Rupee Accounts [NR (E) RA]/ Foreign Currency Non Resident (Bank) Accounts [FCNR (B)] Deposits’

It has been recommended that banks may sanction Rupee loans in India or foreign currency loans outside India to either the account holder or a third party to the extent of the balance in the NRE/FCNR (B) account subject to margin requirements. The existing position in this regard has been reviewed and not the banks may grant loans against NR(E)(RA) and FCNR(B) deposits either to the depositors or the third parties as under:

* The term ‘loan’ shall include all types of fund based/non-fund based facilities.
** In case of FCNR deposits, the margin requirement shall be notionally
calculated on the rupee equivalent of the deposits in accordance with para
9(2) of Schedule 2 of Foreign Exchange Management (Deposit) Regulations,
2000.
Further, the facility of premature withdrawal of NRE/FCNR deposits shall not be available where loans against such deposits are to be availed of. Other conditions as regards grant of loan against NRE/FCNR deposits shall remain unchanged.

A.P. (DIR Series) Circular No. 45 dated October 22, 2012 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘Facilities for Persons Resident Outside India – FIIs’

It has now been decided to allow FIIs to approach any AD Category I bank for hedging their currency risk on the market value of entire investment in equity and/or debt in India as on a particular date subject to the following conditions:
The eligibility for cover may be determined on the basis of a valuation certificate provided by the designated AD category bank along with a declaration by the FII to the effect that its global outstanding hedges plus the derivatives contracts cancelled across all AD category banks is within the market value of its investments.
The FII should also provide a quarterly declaration to the custodianbank that the total amount of derivatives contract booked across AD
Category banks are within the market value of its investments. The hedges taken with AD banks other than designated AD banks, have to be settled through the Special Non-Resident Rupee A/c maintained with the designated bank through RTGS/NEFT.

A.P. (DIR Series) Circular No. 46 dated October 23, 2012 issued by the Reserve Bank of India, Foreign Exchange Department regarding ‘Supply of Goods and Services by Special Economic Zones (SEZs) to Units in
Domestic Tariff Areas (DTAs) against payment in foreign exchange’

It has been decided to allow ADs to sell foreign exchange to a unit in the DTA for making payment in foreign exchange to a unit in the SEZ for the services rendered by it (i.e. a unit in SEZ) to a DTA unit. It may, however, be ensured that there is an enabling provision of supplying these
goods/services by the SEZ unit to the DTA unit and for payment in foreign exchange for such goods/ services to the SEZ unit, in the Letter of Approval (LoA) issued to the SEZ unit by the Development
Commissioner(DC) of the SEZ.

SUPREME COURT JUDGEMENTS:

ARBITRATION LAW:
Bharat Aluminium Co. Vs. Kaiser Aluminium Technical Service, Inc (CIVIL APPEAL NO.7019 OF 2005)

The Hon’ble Supreme Court in the present case has overruled Bhatia International Vs. Bulk Trading S.A. & Anr., (2002) 4 SCC 105 on the basis that Part I of the Arbitration Act, 1996 does not apply to foreign-seated arbitrations. The Court held that Part I of the Arbitration Act, 1996 is applicable only to all the arbitrations which take place within the
territory of India and in a foreign seated international commercial
arbitration, no application for interim relief would be maintainable under Section 9 or any other provision, as applicability of Part I of the Arbitration Act, 1996 is limited to all arbitrations which take place in India. Similarly, no suit for interim injunction simplicitor would be maintainable in India, on the basis of an international commercial arbitration with a seat outside India.

Hindustan Copper Ltd. Vs. Monarch Gold Mining Company Ltd. (MANU/SC/0860/2012)

The Hon’ble Supreme Court has confirmed the preposition that the Chief justice or his delegate has a judicial authority while deciding petition under Section 11 of the Arbitration and Conciliation Act, 1996. The Supreme Court has held that the Chief justice or his delegate apart from appointing an arbitrator to adjudicate disputes between the parties also has a right to adjudicate other important prepositions such as whether or not there is any arbitration agreement between the parties? The Hon’ble Court has also held that the function of the Chief Justice or Designate Judge in consideration of the application under Section 11 is judicial and such application has to be dealt with in its 

entirety by either Chief Justice himself or the Designate Judge and not
by both by making it a two-tier procedure.

CRIMINAL LAW :
Shri Sudarshanacharaya Vs. Shri Purushottamacharya & Anr.
(CRIMINAL APPEAL NO.1351 OF 2012 Arising out of SLP (Crl.) No. 1288 OF 2011)

The Hon’ble Supreme Court has held that it is neither advisable, nor feasible, nor judicially permissible to draw or prescribe an outer limit for conclusion of all criminal proceedings. The criminal courts are not
obliged to terminate trial or criminal proceedings merely on account of lapse of time. Such time-limits cannot and will not by themselves be treated by any court as a bar to further continuance of the trial or
proceedings and as mandatorily obliging the court to terminate the
same and acquit or discharge the accused.

Manharibhai Muljibhai Kakadia and Anr. Vs. Shaileshbhai Mohanbhai Patel and Ors (MANU/SC/0819/2012) The Hon’ble Supreme Court has held that in a criminal proceeding
where a complaint against the accused is dismissed by the trial court at the stage of Section 202 of the Criminal Procedure Code, 1973, i.e. without issuing notice to the accused, the person alleged as an accused has a right to appear and be heard before the revision court if the Complainant approaches the superior court by filing a revision petition under section 401 the Criminal Procedure Code, 1973. The Hon’ble Court has made it clear that no orders should be passed by the revision court in absence of the person alleged as accused. However, Hon’ble Court has also held that if in case the complaint of the complainant is remitted back by the revision court to the trial court then the person alleged to be accused would have no right to participate in the proceedings nor they would be entitled to any hearing of any sort whatsoever by the trial court until the notice is issued in accordance with law.

Sayed Mohd. Ahmed Kazmi Vs. State, GNCTD and
Ors.(MANU/SC/0900/2012)

The Hon’ble Supreme Court in this judgment has held that the Court of the Chief Metropolitan Magistrate is not competent toremand the accused person beyond 15 days.

Medha Kotwal Lele and Ors. Vs. Union of India (UOI) and Ors. (MANU/SC/0898/2012)

The Hon’ble Supreme Court in this judgment has issued guidelines that the statutory institutions like, The Bar Council of India, State Bar
Councils, Medical Council of India, Council of Architecture, Institute of Chartered Accountants, Institute of Company Secretaries etc. shall ensure that the Vishaka guidelines are followed by its members and employees. The apex court is promoting Vishaka Guidelines to prevent sexual harassment for women at work place.

Vishaka guidelines require the employers at workplaces as well as other responsible persons or institutions to observe them and ensure the
prevention of sexual harassment to women. The guidelines states that “It shall be the duty of the employer or other responsible persons in workplaces or other institutions to prevent or deter the commission of acts of sexual harassment and to provide the procedures for the resolution, settlement or prosecution of acts of sexual harassment by taking all steps required.”

Gian Singh versus State of Punjab and Another, Special Leave Petition (CrL) No. 8989 of 2010

The Hon’ble Supreme Court has ruled that any compromise between
victim and offender in relation to offences under special statutes like
Prevention of Corruption Act or the offences committed by public
servants while working in that capacity cannot provide for any basis for quashing criminal proceedings involving such offences.

CONTRACT LAW

Satish Batra vs. Sudhir Rawal in Civil Appeal No. 7588/2012 decided on 18.10.2012

The Hon’ble Supreme Court in the said judgment has held that the
earnest money paid or given at the time of entering into a contract is a
pledge by the party for its due performance of the contract. It further
held that the other party has a right to the deposited earnest money for
non-performance of the contract. The Supreme Court has also dealt
with the converse situation that if the other party fails to perform the
contract the depositing party can claim double the amount if stipulated
in the contract. The Supreme Court further held that it is law that part
payment made by the depositing party cannot be forfeited unless the
same is deposited as a guarantee for the due performance of the
contract. Mere part/advance payment without any guarantee to
perform the contract cannot be forfeited and will not be considered as
an earnest money. 

COMPANY LAW

Jitendra Nath Singh Vs. The Official Liquidator and Ors
(MANU/SC/0808/2012) in Civil Appeal No. 6755 of 2012, decided on 21.09.2012

The Hon’ble Supreme Court has held that the Section 529 of the
Companies Act, does not create any pari passu charge in favour of
secured creditor over all the properties or assets of the Company. The apex court has also held that a secured creditor has a charge restricted to those properties which have been specifically offered by the company to the secured creditor. The Hon’ble Court further held that the workmen’s dues, where the secured creditor opts to realize his security, the debt to the secured creditor to the extent it ranks pari passu with the workmen’s dues under Clause (c) of the proviso to Sub-
section (1) of Section 529 of the Companies Act shall be paid in priority over all other dues of the company.

THE NEGOTIABLE INSTRUMENTS ACT 1881:

MSR Leathers Vs. S. Palaniappan and Anr. (MANU/SC/0797/2012) in Criminal Appeal Nos. 261-264 of 2002, decided on 26.09.2012

The Hon’ble Supreme Court held that a prosecution based on a second or successive default in payment of the cheque amount should not be impermissible simply because no prosecution based on the first default which was followed by a statutory notice and a failure to pay had not been launched. The Hon’ble Court in the said judgment has cleared the ambiguity that the holder of a cheque sustains the right of presenting the cheque again till the same is valid. Also the holder has the right to initiate legal proceedings after the cheque has been dishonoured for
more one time and the statutory notice under section 138 of the
Negotiable Instrument Act has been sent by the holder. This means that
till the time the cheques is valid the same can be presented again and
again and every time the holder has a right to send a statutory notice to
the defaulter/drawer. If the entire purpose of underlying Section 138 of
the Negotiable Instruments Act is to compel the drawers to honour their
commitments made in the course of their business or other affairs, then
there is no reason why a person who has issued a cheque which is
dishonoured and who fails to make payment despite statutory notice
served upon him should be immune to prosecution simply because the
holder of the cheque has not rushed to the court with a complaint based
on such default or simply because the drawer has made the holder
defer prosecution promising to make arrangements for funds or for any
other similar reason.

Sep 4, 2012 – A Supreme Court order on drug price control on
Wednesday has caused confusion with some interpreting it to mean the retention of cost-based pricing which will help patients. The apex court on Wednesday asked the government not to alter the existing drug price structure, sparking speculation about the impact of thepolicy unveiled last week by the
government.

Sep 7, 2012 – The Securities and Exchange Board of India plans to relax the margin requirement for foreign institutional investors (FIIs) as part of measures to improve investor sentiment that hastaken a severebeating due to concerns over the economy and contentious tax measures.

Sep 8, 2012 – India is seeking to arm itself with the power to block Twitter and other social networking sites in select states and regions, but may find it difficult to do so as telecom companies and Internetservice providers (ISPs) say this is technologically almost unfeasible and will involve huge expenditure.

Sep 17, 2012 – The government may relax the condition of mandatory 30% sourcing from small local enterprises for foreign luxury multi-brand retailers even as the Cabinet has eased the norm only for single-brand retailers.

Sep 21, 2012 – The government notified the relaxed conditions for single-brand retail as well as the norms for allowing 49% investment by foreign airlines in Indian carriers and permitting greater foreign investment in some sections of the broadcasting sector.

Sep 22, 2012 – 1. The government has cut tax on interest earned by overseas holders of Indian debt and formalised a scheme with tax sops for equity investments, pressing ahead with reform measures to buttress an impression of policy action despite political opposition. The cut in this tax, a levy on interest earned by overseas investors in foreign-currency debt issued by Indian companies, will make it easier and cheaper for India Inc to access overseas funds and shave almost 75 basis points off their borrowing costs.

2. The telecom department may issue two separate sets of notices to
incumbent GSM operators — Bharti Airtel, Vodafone and Idea Cellular
— asking these operators to hang up on their 3G roaming pacts, and
also pay back the ‘unjust enrichment’ these companies earned from
these pacts.

Sep 23, 2012 – 1. Apple Inc has asked for a court order for a permanent US sales ban on Samsung Electronics products alleged to have violated its patents along with additional damages of $707 million on top of the billion-dollar verdict won by the iPhone maker last month. Samsung has responded by asking for a new trial. The world’s top two
smartphone makers are locked in patent battles in 10 countries as they vie for top spot in the lucrative, fast-growing market. Apple scored a legal victory over Samsung in late August when a US jury found that
the Korean firm had copied critical features of the iPhone and awarded the US firm $1.05 billion in damages. 

2. A public interest litigation (PIL) was filed in the Supreme Court on Saturday challenging the government decision to allow FDI in multi-brand retail and aviation which it said was violative of the country’sforeign exchange and insurance laws. The petition, filed by advocate Manohar Lal Sharma, is the second such PIL filed by Sharma against the government. He had earlier filed a petition drawing the top court’sattention to the coalgate
scam.

Sep 24, 2012 – 1. The Cabinet has approved the National Policy on Information Technology 2012. The policy aims to leverage information and communication technology to address the country’s economic and
developmental challenges. The policy will be notified in the Gazette shortly.

2. The policy on Foreign Investment in Power Exchange has been issued vide Press Note No. 8 issued vide (2012 series).
3. Policy on Foreign Direct Investment allowing FDI in multi brand retail trading has been issued vide Press Note No. 5 (2012) series.

4. The Department of Industrial Policy and Promotion has issued a Press Note No. 4 (2012) series amending the existing policy on Foreign Direct Investment in Single Brand Product Retail Trading.

5. The Department of Electronics has issued the Electronics and
Information Technology Goods (Requirements for Compulsory
Registration )Order 2012 bringing into force a scheme for mandatory regime of registration of identified 15 electronic products so that these products meet specified safety.

Sep 25, 2012 – 1. Mobile phone users will not have to pay roaming charges when travelling within India from next year, Telecom Minister Kapil Sibal said on Monday.

2. Mobile phone companies that win spectrum in the upcoming auction will be able to swap frequencies within the same band. This would allow 

telcos to barter frequency spots to cover up patchy network in circles where there may not be contiguous spectrum after the airwaves are allotted.

Sept 26, 2012 – Ministry of Corporate Affairs has released the Companies (Central Government’s ) General Rules and Forms (Sixth Amendment )Rules 2012 to substitute the Form 23AC and Form 23ACA.

Sep 27, 2012 – 1. Foreign retailers have discovered holes in the recently
announced foreign policy for multi-brand retail and expressed apprehensions about the government’s move to make it mandatory for
them to invest $100 million, with at least half the money being compulsorily spent on back-end infrastructure, in the first three year of
operations.

2. Research In Motion’s (RIM’s) new CEO Thorstein Heins maintains that while the Canadian cellphone company will co-operate with Indian
authorities on “lawful interception” the company cannot grant access to the entire traffic on its network, especially related to enterprise customers. After a prolonged stand-off, RIM had provided access solutions to telecom operators for consumer traffic but access to corporate information remains an issue. The company has remained firm on its stand that it has not provided any access solution for its
enterprise customers to the Indian authorities, a point that was contested by the Indian telecom officials. 

3. The Central Board of Direct Taxes has released the Income-Tax ( 12th Amendment ) Rules 2012 vide Notification dated 17th September 2012 to incorporate the rule 21 AB relating to certificate for claiming relief under an agreement referred to in section 90 and 90 A and Form No. 10 FA incidental thereto. The rules shall come into force on 1st April 2013.

4. India has made it mandatory for all foreigners to furnish a tax
residency certificate of their home country to claim benefits under the double taxation avoidance agreement. The Central Board of Direct Taxes has notified the changes to the Income Tax Act prescribing a tax residency certificate.

Sep 28, 2012 – The country’s apex direct taxes body is likely to moot a proposal to exempt companies caught in the controversial retrospective tax net from paying interest and penalties, potentially paving the way for a settlement with Vodafone in the multi-billion-dollar tax dispute. A senior I-T official said the Central Board of Direct Taxes (CBDT) is
considering issuing a circular to waive off interest and penalty on the outstanding tax liabilities of such ‘taxpayers’. “A proposal to this effect is likely to be taken to the finance minister for final clearance,” he said.

2. The Income Tax department has sought the dismissal of a plea filed by tea producer McLeod Russel against state’s powers to tax transactions retrospectively. The department maintains that the state has powers to tax with retrospective effect and the amendments introduced in the Finance Bill 2012 were clarifications, and not arbitrary.

3. In response to a presidential reference seeking clarification on the 2 G judgement which had appeared to mandate auction of natural resources in all circumstances, the Supreme Court of India has held that auction is not the only permissible method of allocating natural resources across all sectors and in all circumstances. The Hon’ble Court

has further clarified that the 2G judgement was confined to spectrum and was not applicable to all natural resources.

Sep 29, 2012 – 1. Retail investors in an IPO have to be compensated if
the shares fall sharply within 3 months of listing, Sebi proposed on
Friday.

2. The department of telecommunication has directed mobile operators Bharti Airtel, Vodafone India and Idea Cellular to stop offering third-
generation voice and data services outside their licensed zones through roaming pacts. These companies have been issued show-cause and advisory notices to stop such operations, telecom secretary R
Chandrasekhar said on the sidelines of a CII conference.

Oct 1, 2012 – The telecom department will seek fresh opinion from the highest law official in the country on its plans to make it compulsory for all operators to match the upcoming auction-determined price for their existing 2G airwaves for remaining period of their licences, an official aware of the development said. The law ministry had wriggled out from giving an opinion on this earlier citing that the issue was part of the
Presidential Reference.

Oct 2, 2012 – 1. The Supreme Court has said that the Comptroller and Auditor-General had a duty to comment critically on the efficacy of policy decisions. The court rejected a PIL, seeking to rein in CAG, saying there should be no confusion over the auditor’s mandate.

2. Bharti Airtel, the country’s largest mobile phone company by revenues and customers, on Monday moved the Delhi High Court, challenging the government’s recent order that had directed telcos to stop offering third-generation voice and data services outside their licensed zones through roaming pacts.

3. Investment advisors are in for tighter regulations. Finance companies that intend to offer investment advisory services will have to first seek approval from the Reserve Bank of India before approaching capitalmarket regulator Sebi’s nod for the same.

Oct 4, 2012 – The Cabinet will consider crucial changes in the Companies Bill that is already in Parliament; amendments to the competition law, pension and insurance bills that are likely to moot a higher foreign
investment in these sectors; changes in the commodities trading law; and the 12th Five-Year Plan, according to the agenda prepared for the meeting.

Oct 5, 2012 – 1. The Congress-led UPA government has unveiled a second wave of reforms, approving proposals allowing foreign investors to own up to 49% in insurance firms and pension funds.

2. Telecom minister Kapil Sibal on Thursday said that India was not in favour of governing the internet or curbing right to free speech but called for clear and transparent mechanisms to address misuse of cyber space. 

Oct 8, 2012 – 1. The government’s decision to allow foreign
supermarket chains such as Walmart and Tesco into the country does
not extend to non-store formats such as teleshopping and mail order, a
senior official in the Department of Industrial policy & Promotion, has
clarified.

2. The Central Board of Direct Taxes is considering issuing a circular
waiving interest and penalty on taxes, companies may have to pay as a
result of the controversial retrospective amendment seeking to tax the
indirect transfer of assets, the finance ministry has said, opening up the
possibility of a settlement of the long-running tax dispute with
Vodafone Plc.

Oct 11, 2012 – The Reserve Bank of India has imposed penalties on ICICI Bank and ING Vysya Bank for violating anti-money laundering and know-your-customer norms. ICICI was penalised 30 lakh and ING 55 lakh.

Oct 16, 2012 – The Supreme Court on Monday refused to countenance a plea to stay the recent press notes permitting FDI in retail, aviation,
broadcasting and power, but prodded the government to make the
necessary changes in RBI’s forex regulations to bring them in tune with
the change in policy. The apex court said the new policy had no legal
sanctity without consequent changes in the Reserve Bank regulations
and gave the government time till after the court’s Durga Puja recess to
make these changes.

Oct 17, 2012 – In a fresh diktat to Airports Authority of India or AAI on Tuesday, Ajit Singh, the union civil aviation minister has directed the airport operator to abolish the controversial airport fee at the NewDelhi and Mumbai airports.

Oct 19, 2012 – 1. The modified Land Acquisition Rehabilitation and Resettlement Bill will be brought before the Parliament during the winter session which begins on November 21,2012 according to therural development minister.

2. A government appointed expert group headed by former Delhi High Court Chief Justice AP Shah has recommended setting up of a regulatory framework comprising Privacy Commissioners at the Centre and regional levels to deal with privacy issues and mandatory destruction of telephone conversation after a specified period.

Oct 21, 2012 – 1. Foreign investors straddling the direct as well as the portfolio routes to buy stocks in India have to watch out. Any such investor using the same vehicle for both will be barred from holding more than 10% equity in a single company. The Reserve Bank of India (RBI) -— which has the last word on cross-border flows — has recently spelt this out to custodian banks which hold shares on behalf of offshore investors, senior banking sources told ET.

2. The Reserve Bank of India has considerably softened its stand on foreign direct investments that have in-built options, settling for a one-year lock in on such investments as opposed to three years it wanted earlier.

Oct 23, 2012 – The government may exempt portfolio investors from filing income tax return as part of measures to address niggles and make the country attractive for foreign institutional investors (FIIs). 

Oct 24, 2012 – An internal report of the Central Board of Direct Taxes (CBDT) on the general anti-avoidance rules (GAAR) has opposed Shome Panel’s proposal to defer its implementation by three years.

Oct 26, 2012 – Planning Commission Deputy Chairman Montek Singh
Ahluwalia has urged the government to study the full implications as
well as seek guidance from telecom regulator Trai before approving the
controversial proposal to take back all spectrum held by incumbents
such as Bharti, Vodafone and Idea in the highly-efficient 900 MHz band.

Oct 31, 2012 – The country’s competition watchdog has exonerated five
major tyre companies—Apollo Tyres, Birla Tyres, MRF, Ceat, and JK
Tyre—which control about 95% of the market, of cartelisation charges