Friday, October 31, 2014


In a highly interesting and novel development in the IP world, recently, internationally acclaimed actor and cultural icon Rajinikanth had approached the Madras High Court to primarily stay the release and screening of the Hindi film ‘Main Hoon Rajinikanth’. This is among the few instances where a celebrity has invoked personality rights and its protection against infringement (One other such instance was Titan Industries v. Ramkumar Jewellers, where the Delhi High Court recognized the personality rights of Mr. Amitabh Bachchan and Ms. Jaya Bachchan in the context of misleading advertisements)
Personality rights are rights that individuals have over their name, image, reputation, likeness or other unequivocal aspects of their identity, as well as information connected with them. In the event that an unauthorised third party seeks to benefit commercially from such reputation or information, a case may be made for rights violation.
The concept of personality rights is based on the idea that every individual should have control over commercialising their persona. Stars invest a great deal of hard work and talent in acquiring their status and are entitled to reap the benefit of their efforts. There are two facets to this concept. One is the right to publicity – to prevent one’s name, likeness or any facet of one’s ‘image’ from being commercially exploited without authorisation or compensation, somewhat like a trademark. It is a transferable, licensable, even descendible right that outlives the celebrity and can be exploited by their heirs. The second facet of this right is the right to privacy – the right to be left alone and to prevent the representation of one’s personality without permission.
Following are some of the laws which are associated with personality rights.
Right to privacy under article 21 of the constitution
The Apex Court of India has, time and again, expanded the scope of Article 21 to include various other essential fundamental rights and the Right to Privacy has been incorporated into this list of fundamental rights by the passing of the landmark judgment in the R. Rajagopal vs. State of Tamil Nadu case.
Trademarks Act, 1999
While a trademark in a name or a corporate name is the most commonly recognised form of intellectual property, other forms emanating from a personality and duly recognised under the Indian trademark legislation have not been exploited at all. A prime example is the recognition of sound marks under Section 2(1)(zb) of the act. The voices of a host of celebrities, including actors, sportspersons, politicians and singers, are mimicked in order to promote products, services and events through various media. However, this provision is little known and so little used.
Copyright Act 1957
Rights such as moral rights and performers’ rights which have some elements of personality in them are protected by this statute. However, as applied at present, such rights are devoid of any aspect of branding that might be attached to a personality.
Common law rights against passing off
In the absence of any specific law on personality rights, one remedy is to claim passing off against any party which attempts to impersonate a right. India is increasingly recognising and extending this concept to encompass personality rights

Finally, India has started to acknowledge the concept of personality rights; however the law pertaining to personality rights is still at a nascent stage in India. Many States in USA have recognised this right to publicity as a distinct right under the head "Celebrity Rights". Its high time India should adapt a distinct legal status for personality rights and to take stringent efforts to protect the image and status of well-known personalities of the country like various other countries of the world. 

Thursday, October 30, 2014

Why and when do courts pierce or lift the corporate veil ???

A company is a distant legal person, an entity different from its members. Consequently, a corporate veil is drawn between the company and its members or the public itself. It is a general rule that a company has a “separate legal identity”, and all its transactions will be in its own name. This curtain or partition between the company and its members is based on this important principle of company law which regards a company as separate from its members and hence, courts generally do not attempt to go behind that curtain to see who in fact the real beneficial owners of the company are.
When the corporate forms are not adhered to by them and are being misused, then in order to expose the true character of the persons responsible for the same; the courts have the power to lift or pierce this corporate veil.
What are the exceptional cases in which the corporate veil can be lifted?
1.    Fraud or improper conduct: When company has been used as a medium for committing fraud or improper conduct or to carry out fraudulent trading, the courts have resorted to lifting the corporate veil.

2.    Protection of revenue: When a company takes advantage of the corporate veil for evasion or tax and other duties, it is necessary to lift the veil and find out what the real transactions are.

3.    Determination of the enemy character: Companies do not have a nationality. But the people responsible for the workings of the company have a nationality. During times of war, transactions among multi-national companies are suspended in order to ascertain whether the persons behind the veil are a friend or an enemy.

Daimler Co. Ltd vs. Continental Tyre and rubber Co.(Great Britain) Ltd.
 In this case, a company was incorporated in England for the purpose of selling their tyres manufactured in Germany by a Germany company. Its majority shareholders and all the directors were Germans. On declaration of war between England and Germany in 1914, the persons in control of its affairs became alien enemies and accordingly the company was declared to be an enemy company. During the war period the company filed a suit to recover a trade debt, which was dismissed by the court and observed that such payment would be a trading with an enemy company and to allow alien enemies to trade under the corporate facade will be against public policy.

4.    Reduction of membership below a statutory minimum: in case, the number of members of the company has reduced below the statutory minimum and the company carries on business for more than the limitation period while the number is so reduced, then every aware member will be individually liable for the payment of the company’s debts contracted during that time.

5.    Holding or subsidiary companies: More recently, the High Court in Industrial Equity v. Blackburn [9] has held that the principle operates to prevent a holding company from treating a wholly-owned subsidiary’s profits as its own. Therefore, it can be seen that there has been, and still is, the highest authority for the separate entity concept.

In Balwant Rai Saluja vs. Air India Ltd., the question was whether workers in a statutory canteen maintained at Air India’s premises were to be treated as employees of Air India or as employees of the contractor running the canteen. The contractor, HCI, was a wholly owned subsidiary of Air India. The workers made two arguments. The learned Judges also had varying interpretations regarding the status of the HCI as a sham and camouflage subsidiary by the Air India created mainly to deprive the legitimate statutory and fundamental rights of the concerned workmen and the necessity to pierce the veil to ascertain their relation with the principal employer.

The doctrine of piercing the corporate veil is not subject to any specific guidelines. Courts have struggled for years to develop and refine their analysis of this doctrine and each new action brings a different set of facts and circumstances into the equation and a separate determination has to be made as to whether the plaintiff has provided sufficient evidence of dominion or control, improper purpose or use and the ensuing damage. At such times, the opinion of qualified experts are adhered to. Particularly, expert testimony is helpful to the judge in determining whether the corporation has been adequately capitalized for its intended purpose. 
Eventually, however, the judgment whether to disregard the corporate entity will be based upon a balance of numerous factors all or some of which are necessary but may not be sufficient to lift the veil. The bottom line being the court will lift the veil only when facing grave violation of the corporate form and not otherwise. Also the connection between the judicial pronouncements of two separate cases regarding lifting of veil of a corporate entity cannot be ascertained as every court’s view on lifting of corporate veil depends on the facts of each case.

Tuesday, October 28, 2014

“Goodwill” building for your business

Goodwill for a business is what reputation is for a person. If a business wants to sustain even in the face of recession, this asset is what helps them thrive in that tough time.  Goodwill is essentially an emotion evoked in us when we create a good bond with other person that is built with time and attention. Once goodwill is acquired, it proves significant not only as a competitive advantage, but also it is equivalent to solid cash. It is an intangible asset which can be represented in the balance sheet. Goodwill is generally built up by values like strong brand name, excellent customer relations, consistency in services, good employer-employee relations, etc.
 A simple way to describe goodwill is the difference between the current market value of the tangible assets of the business and the total value of the business. Total value of a business is determined by available cash flow and the risks associated with obtaining it. Yes, the other aspects of the business such as manufactured goods, service, market, and growth potential matter too. But how buyers evaluate and ultimately gain outlook of those aspects of the business is how much cash flow it generates.
If yours is a new business still in the process of establishing its name in the market it is never too late to start working on acquiring goodwill. What are the ways in which goodwill of the business can flourish?
v  When local popularity of the business starts growing, “word of mouth" publicity and recommendation leads to recognition of brand name and

v  Consistency in good service helps build trust amongst regular clients and creates reliability.

v  Care and respect for the customers/clients and other satkeholders shows in each and every kind of communication with them. Everything is branding. There is nothing wrong in appreciating your fans and making them feel cherished.

v  Prioritize making the customer happy. It should be the motto of the business that the customer should leave happier than he was when he had come. Be it by communication skills or by providing unexpected surprises for the clients, it is always a good investment for increasing the value of one’s goodwill.
v  Not all successful businesses care about the customers/clients after the transaction with them is concluded. Having a follow up after the purchase exhibits the extent to which the customers are valued and in turn instigates “word of mouth” publicity.

v  Being real and being fair. You have to have a brand that is completely open and transparent. If you falter (and you may at some point) then the best approach should be honestly admit inform your clients and as far as possible be realistic with your customers/clients. They know you’re human and they’ll respect you a thousand times more for being upfront and real with them. Don’t ever try to hide something or trick people. Not owning up and admitting to mistakes gives business a bad name. Make sure everything you do and offer is crystal clear.

v  Intellectual property rights : Trademark of one’s brand name is what brings in millions of customers and makes your business popular. It is more than just a sign post that brings in customers and once a brand name becomes popular, it is worth a lot. In fact, when buying a small business most of the value of the business comes not from the tangible assets, but the intangible ones.

Goodwill is all about honesty and ethics which go along with good businesses. The harmony in relations between people who come together to do something good for the society with their services, reflects on the outside too. It is not hard to build goodwill in the market as long as you know which areas to focus on and what needs to be done in order to implement them successfully.

Monday, October 27, 2014

Would you ask your chauffeur to fly your private jet?

Probably not. Then why do people (whether entrepreneurs, Individuals, companies and partnerships) resort to assigning their crucial legal work to Financial Consultants or Chartered Accountants? Is it really helping them cut cost? Or is it exposing them to increased, if not unlimited, liability?
Recently, it has become customary for entrepreneurs to get their legal work done by their Financial Consultants or Chartered Accountants. This is mainly because they get to save money as the CA is not authorized to do legal work and hence, charges far less than what a lawyer would charge for the same. Since every company is required to appoint a CA mandatorily, whereas appointment of a lawyer is optional. But what they fail to realize is that the most crucial legal work requires a set of skills and aptitude which a CA would not possess. The quality of the work correlates the quantity of fees charged by them, which is low. When drafting new agreements or joint ventures essential to the business, the best of legal services must be availed of. By giving such work to your financial consultant, you are not only jeopardizing your business transactions, but also putting the entire company at risk. The CA or the FC will only copy-paste clauses from an old agreement without thinking if they are applicable or not, as well as, he will fail to add new clauses which might be important to add as it is case specific.
Financial Consultants are equipped to handle accounts and develop financial strategies and all the operations which constitute “financial services”. These financial services are widely different from “legal services”. Overlapping of the financial and legal services will only cause havoc and chaos for sure, if not sooner then later. Hence, it is advisable that one should refrain from assigning their legal work to CAs. In the long run, such a practice can prove fatal to your business and instead of saving costs you are exposing yourself to failed ventures and unlimited liabilities.

Entrepreneurs assigning such legal work to unqualified non legal persons are only digging a ditch for themselves to fall into. When the time comes and a dispute arises, maybe the arbitration clause would be missing, or the lack of fine tuning in the contract would later lead to bigger issues and hence, huge losses can be incurred by the company. Is it worth saving lawyer’s fees at the cost of humongous risks being associated with it? 

Friday, October 17, 2014

How to develop the right persona of a successful lawyer?

Achieving success in the profession of law requires one to carry certain traits. The field of law is as competitive as any and there are no exceptions to it. But a lawyer does not have one area of practice to look after. He has to develop his knowledge as and when different types of cases come to him, especially at the start of his career, when he is still finding his way. However, developing a new trait takes time and practice and of course, a love for the profession of law.
Here are some of the traits that a lawyer has to acquire and nurture in order to be successful in the field of law.
1.    Hard work and determination are your best friends – On the outset, becoming successful in any field requires high level of fortitude and hard work. When starting up your career, only hard work is noticed, talent comes later.
2.    Having a flexible, innovative or creative mind – According to a lawyer, anything and everything is possible. Thinking out of the box will bring solutions to problems which at first might seem impossible to solve.
3.    Having the willpower to come back from the ashes – One thing no professional lawyer should forget is that failure will come often. You will be struck down more times than you can get up, but developing that resolve to come back with self-respect and proving your point is important.
4.    High degree of cross-cultural sensitivity and awareness – Ours is a diverse country and a balance between different cultures must be maintained. A lawyer has to handle sensitive matters and controversial issues diplomatically to avoid legal complications between parties.
5.    A passion for excellence and an eye for detail – The most admirable trait in a lawyer is perfection of his work. An eye for detail matters a lot in the legal profession because sometimes it is all about reading between the lines to predict any future disputes.
6.    Intellectual curiosity and a dedication to learning – A lawyer has to be genuinely interested in the goings on of other areas of work where their clients come from. Law is omnipresent, and so must be a lawyer’s range of knowledge. This comes only when there is an inane drive to learn new things and have a curious mind.
7.    Genuine desire to help people – A lawyer’s basic job profile is to help his clients. It is what he is best at doing. Helping people find justice or simply to get out of trouble is what a lawyer lives for!
8.    Multitasking – Even though it’s considered a women’s area of expertise, but it is something which a lawyer has to pick up. Most successful law firms in Mumbai have lawyers who are working on 20 cases at a time and remembering all the dates and client meetings along with managing files and papers requires nothing short of a miracle.
9.    Humility and not comparing yourself with others’ success – Humble attitude or modesty are always appreciated in any field of work. Only thing worse than being a loser is being a abysmal winner. Success shouldn’t get into one’s head or it will be his downfall sooner or later.

Tuesday, October 14, 2014

Is plagiarism a copyright infringement?

Plagiarism and copyright are two such concepts which are most likely to be mistaken of being synonymous to each other. It is important to remember that the two are not the same. People who are victims of copyright infringement bring plagiarism under the ambit of copyright infringement, which is wrong and here’s why:
Copyright infringement
Copyright protection is a governed by a statute called Indian Copyright Act, 1957, which protects literary, dramatic or musical works such as books, plays, lyrics, etc. by disallowing their unauthorized reproduction, translation or adaptation. This right vest only on the copyright holder who usually is the author of the work.
Copyright infringement is a legal wrong in respect of which a civil suit may be instituted to seek the grant of a permanent injunction to restrain further infringement, damages, the rendition of accounts of profit, and the delivery of the infringed copies of the work.
Section 63 of the Copyright Act penalizes copyright infringers with imprisoned for between six months and three years and to be fined between fifty thousand and two lakh rupees or both, while Section 63A enhances the penalty for second and subsequent convictions.
Plagiarism is more of an issue of ethics than of law. Plagiarizer blatantly copies another author’s work and declares it to be his original work. It doesn’t matter if the work of the original author is copied word by word, as much as it matters that his idea or his concept is stolen from him without giving him any due. It may be considered copyright infringement in some cases, but not always. For example, one can say that he has written “The sound of music”. He is not infringing any copyright but he is denying the author’s attribution to his work. Since “The sound of music” is a public work and is not protected by copyright, this is called plagiarism and not copyright infringement.
The section 57 of the Indian Copyright Act, 1957 renders the author a “Special Right” to be attributed for their work. It is a moral right, perpetual, independent of copyright, and remains unaffected by transfers of copyright ownership. Thus, the right to attribution recognized by statute could be considered equivalent to the right not to be plagiarized. 

The difference is?
Not all plagiarisms are copyright infringements and not all copyright infringements are plagiarisms. One can plagiarize almost anything, including works which are not protected under copyright act, such as works which are publicly available for use. Whereas, copyright infringement can happen only when copyright of the work exists. Also, one can plagiarize a work even when he has obtained permission from the copyright holder to use his work, hence causing no copyright infringement.
Copyright infringement is about hurting only one individual who is the copyright holder, whereas, plagiarism not only hurts the author who may or may not be the copyright holder as well as the people who are lied to about the origin of the work.

Hence, plagiarism is a serious offence, but it is not always illegal just like it is not always a copyright infringement.

Monday, October 13, 2014

How to hire the right law firm for your company?

Whether it is a start-up company or owning a successful business, one faces a myriad of worries as an entrepreneur. Among these worries, hindrance caused to business from the legal perspective is one which shouldn’t be taken lightly. For start-up companies, lawyers are needed right from the incorporation process and even for drafting and executing one’s first operating contract. The trick is to find and hire the best and most trustworthy legal professional who can cater to your needs economically.

First off, there are certain matters which the proprietor can handle without spending money on a lawyer, provided he does his homework properly. Matters such as: writing a business plan, acquiring a domain name, handling audits, etc. can be handled by a layman if he takes proper care. However, in matters such as; employees suing on grounds of discrimination or hostile work environment, clients suing for breach or specific performance of contract, merger and acquisition matters, etc. professional legal advice is a must.

How does one hire the right law firm to aid in such matters?

Many factors have to be considered when hiring a law firm. Two main sectors of legal practice involve Litigation and Non-litigation.

Litigation lawyers are trained in handling suits of civil or criminal liabilities which do tend to come up in most big businesses. Non-litigation lawyers are those who handle transactional matters such as agreements, ventures, etc. at one time or the other, every company needs both kinds of lawyers. In which case, one can either hire a law firm that provides both the kinds of legal services, or one can hire different law firms for different types of legal service depending on their specialization.

For start-up companies, small assignments such as agreements, it is better to approach boutique law firms who have experienced professionals to personally handle your case, since big law firms give such small assignment to fresh associates for experience.

The next step is to identify the right kind of law firm according to one’s requirement. The best option is “hitting the web”. Researching the firm is a must; looking at their past record, their specialization, their success rate, testimonials, reputation, etc. A good R&D on a law firm before speaking to them is important. Not only the law firm, but it is also equally important to find out the backgrounds and experience of the partners and associates of the firm.

Once convinced of a particular law firm, one should approach them only after preparing a lot of questions, such as-
·        How many similar matters have you handled?
·        Which lawyer will be in charge of this case?
·        How will I be kept informed about the progress of the case?
·        How will I be charged for your services?
·        How can I reach you after normal business hours?
·        What are the minimum billing increments?

One should not leave the first meeting with the law firm with any sense of ambiguity on one’s mind, no matter how silly the doubt is. This is because normally the client is asked to sign the engagement letter to appoint the law firm after the “get-to-know” meeting, and signing an engagement letter will bind one to it and no doubts can be solved to one’s satisfaction after that, neither can any negotiation be made afterwards.

Lastly, one should always be in contact with their lawyer and develop good relations with them. A long lasting client is always well appreciated and valued. This is helpful in times when one needs legal assistance for matters outside the usual business area, one can get good recommendations and contacts from their usual lawyers.

Friday, October 10, 2014

Why should Indians invest in IPR?

The creation of new goods and services with changing times is the key to economic activity and the blindingly rapid speed in which technology is advancing, a country needs to have innovation as its main priority. India is such a country; being at the brink of its development, technological know-how is a must in order to achieve success.

India is the fastest growing economy in the world today. The spirit of innovation has been running wild especially after the Prime Minister, Narendra Modi’s “Make in India” policy was introduced; wherein he strived to create an environment which encouraged Indian companies to create, research and manufacture their products and innovations within India. In order to align with the prime minister’s goals, secure IPR protections have to be consistently enforced.

What are the main arguments against IPR which leads to mistaken assumptions about it?
Exaggerating the costs for acquiring and maintaining IPR and the risks that come along with. This is completely untrue; IPR is very much cheap and easy to acquire.

Assuming that the Government policies are constricted and inert regarding IPR (which they are not). It is all for the benefit of the person who holds the rights to his intellectual property.

IPR is anti-competitive; rather it is a combination of transparency and certainty which incites competition.

IPR imposes unwarranted encumbrances and unfairly extorts value from developing countries. In order to protect one’s intellectual property, may it be a patent or a copyright, some responsibilities such as renewing your patent, licensing, etc. is not an unfair burden.
Such arguments have been made in the past to discourage potential innovators, but it is successfully used as a ploy to gain leverage in trade negotiations too which just goes to show that it isn’t a serious critique. Innovation is a large and complex process and intellectual property is just one factor of it; an important one.

President Pranab Mukherji had said, “Innovation is increasingly recognized as the currency of the future. India’s innovation bottom line is not very encouraging as the number of patent applications filed in countries like US and China is roughly 12 times more than that of India. We should step up our expenditure on research to pursue innovation in a big way. The private sector should also increase their share of spendings to levels prevalent in countries such as Japan, US and South Korea.”

India stands to benefit the most by having more dynamic and robust IP laws. There is a great demand not only among Indian innovators, but also foreign investors who are eager and excited by Modi’s vision to foster a knowledge-based economy conforming to global standards. This is because the extent to which a country protects its Intellectual Property Rights determines how well they perform in the new economic environment.

The international system is moving towards markedly stronger IPRs and when viewed from the context of economic globalization, a country like India is on its way to significantly strengthening its IPR regime as we approach the next generation of technology and innovation.

Thursday, October 9, 2014

Indian Media & Entertainment Sector’s Endeavour in the Global Market

The Indian media and entertainment (M&E) sector is very vibrant and exciting and most susceptible to tremendous growth. It is slowly starting to create an impact on the global economy as well as bringing India into the focus of the biggest economies for the purpose of investment. The industry is predicted to bring a turnover of 2.27 lakh crore by the year of 2018. India already has a self-sufficient agricultural sector and a fast-growing industrial base; if India stabilizes the financial sector with the help of RBI and the Government, there is nothing that can beat the world’s third largest economy from overtaking the first two.

Just like the banking and finance sector keeps expanding and creating millions of new jobs along with joint effort by the government, the same way, the media and entertainment industry is increasing by acquiring quantitative and qualitative business results. Our reputation is attributed by our innovation and success. Recognition in the global market is the key to growth, and we are just starting to get it. Not only Indian films are getting a phenomenal response but also the television entertainment sector is slowly recognizing its true potential. Companies like ZEE Entertainment is growing fast and have an ambitious outlook. Even their new motto, “Vasudhaiva Kutumbakam- The world is my family” where they have promoted familial and harmonious relations between India and Foreign countries, is a brilliant marketing idea.

India has a lot of stories to tell and the world is eager to listen, if we portrayed it in the best way possible. Most of the major television shows in U.S.A. have at least one Indian character in it; this is because of demand and recognition of potential. Moreover, there are shows that are entirely made on an Indian theme, such as “Outsourced” or “The Mindy Project”, not to forget the extremely complicated Private investigator, Kalinda Sharma, on the hit legal show “The Good Wife”.  Indians are becoming more prominent in business, more prominent in the music industry too. We've always been predominantly engineers and doctors, but the world is seeing us in other facets of life now. China made its first movie about India and shot in India called, “My Amazing Trip to India”, which just shows our augmenting popularity.

International recognition is leading to companies like AMD (Advanced Micro Devices) which is a technology company, wants to collaborate with the Indian Film Industry in order to share their technology related to graphics and visual effects with us as well as get ideas from us to solve software related problems. India knows how to be cost-effective, evidencing from the recent successful ISRO mission, and we are known for it throughout the world.

Recently, in Karnataka, amendment of The Goonda Act, 1985 has been awaiting the Governor’s accent. It seeks to cover habitual offenders in digital crimes who continually disrupt the public order. This will be a big step towards solving the main problem of copyright issues which are rampant here. Fear of committing cyber crimes and piracy will greatly benefit the M&E industry and increase our revenue and achieve our ambitious goals. 

Wednesday, October 8, 2014

Whistle-blowing: A tool for refining Indian Corporate Governance Standards.

Corrupt practices going on in corporate sector of India has been targeted by the Companies Act, 2013 and SEBI. SEBI has strengthened the effect of the whistle-blower mechanism and made it mandatory in all listed companies for their employees and directors. For ensuring better Corporate Governance Standards via precision and transparency, the market watchdog, SEBI’s Market Advisory Committee has recommended companies to make this mechanism available to all employees and stakeholders of the company.

Section 177 of the Companies Act, 2013 prescribes for the formation of an Audit Committee wherein the sub-section (9) and (10) provide for a vigil mechanism to be present for the directors and employees to rely upon for reporting any misdeeds or corrupt practices by their senior colleagues which they need to report.

Some companies have taken the news within its true spirit, such as BHEL. Bharat Heavy Electricals now have an official policy pertaining to the mechanism of Whistle-blowing which ensures that the identity of the whistle-blower will remain undercover in order to avoid their victimization. Not only the whistle-blower but also the identity of any person who helps in the investigation will be kept undercover. However, such protection will not be provided in cases where the information provided is found to be false or motivated or vexatious. This was supported by SEBI as they said that the mechanism of whistle-blowing should encourage employees for disclosures of malpractices as well as avoid fraudulent accusations made to harass the management.

Whistle-blowing hasn't been very popular in the Indian corporate world up until now and the culpability could be attributed to the politics in the management of companies and the employees’ vulnerability. This will no longer be an issue as long as the complaint is carefully drafted by mentioning specific and verified information and addressed to the concerned authority which may be the audit committee.

Not only is it a matter of moral to report misdeeds taking place in a company, but if the precedent of Infosys is to be relied upon, the whistle-blower would get a portion of Settlement in malpractice suit which arises from his complaint. An American employee of Infosys brought a lawsuit against the company when he witnessed a widespread visa fraud. The US Attorney of Texas mentioned to news reporter that he will be “amply and justly rewarded”.

The mechanism of whistle-blowing is taken very seriously in global legislations such as The Public Interest Disclosure Act, 1998, in the UK (which protects whistle blowers from victimization and dismissal) and the Sarbanes Oxley Act, 2002 (which provides for the protection of whistle blowers and is applicable even to employees in public listed companies). It seems that SEBI has taken such precedents seriously and is reared up to deter such offences in the future.

Tuesday, October 7, 2014

Survival of the Fittest: The Redesigning of the Indian Corporate Arena.

“It is not the strongest species that survive, nor the most intelligent, but the one which is most responsive to change.” - Charles Darwin.

There have been tremendous changes in the Indian corporate arena in the past few months since the passing of the New Companies Act, 2013 on 9th August, 2013 ("New Act)". 

The New Act focuses a lot on the lines of socio economic goals of our country and it is sure to bring about a positive result towards development of Indian Companies as time passes. The new act is intended to improve corporate governance, fight fraud, increase investor protection and simplify the process of creating and closing a business. Corporate lawyers said the new legislation recognizes the increased sophistication of business dealings and more clearly defines many aspects of corporate governance.

The New Act is even shorter than the Companies Act, 1956. It has 470 Sections separated in 29 Chapters and 7 Schedules compared to old Act which had 658 Sections divided in 13 Parts and 15 Schedules. Several new topics have been included by the New Act some of which are:
Small company
Associate Company
Auditing Standards
Global Depository Receipt
Independent Director
Key Managerial

Some key changes that will help strengthen our economy and reduce the problems faced by our corporate world on which the old 1956 Act proved to be ineffective are as follows:

1. Incorporation of a Company

The laws regarding incorporation have been made more stringent and for good reason. Section 447 of the New Act prosecutes any person who is responsible for furnishing false or incorrect information about the company either to the ROC during incorporation or in the prospectus in order to induce people to invest money in the company for fraud. It is a non-compoundable offence which can have either a civil or a criminal liability.

2. Democracy of Shareholders

The New Act has introduced a new concept of class action suits with a view of making shareholders and other stakeholders, more informed and knowledgeable about their rights

3. Management and meetings

It is a mandatory requirement for a company to appoint a Managing Director/CEO/Manager and in their absence, a Whole Time Director as well as a Company Secretary.
Some of the express duties of the Directors are; to bring accountability in the functioning of the management and finding out any cases of negligence if occurred. As per section 103 of the New Act the quorum required to be present in shareholders meetings has been increased, and hence, so has the level of participation and interaction amongst the shareholders and the Company.

4. Audit and Auditors

Appointment of individual auditors or auditor firms has been restricted to one term of 5 years and two terms of 5 years respectively. A gap of at least 5 years is required to pass before the same auditor can be reappointed by the company. Specific duties and powers of an auditor have been enumerated in section 143 whereas  Section 144 prohibits him from rendering certain services for e.g. accounting and book keeping, internal audit, investment banking services, management services, etc.

5. Fast track merger

The New Act provides a shorter route for merger of two small companies or a holding and its subsidiary company or other classes of companies. If no objections have been made for such schemes by the Official Liquidator or the Registrar, power is given to the Central Government to approve such schemes.
Mergers between Indian companies and foreign companies with prescribed jurisdictions are now allowed with the prior approval of RBI.

6. Sick Company

The designation of being a sick company can be given to any company; hence it is no longer restricted to an Industrial Unit. The only criteria involved is that the company should be unable to pay more than 50% of its debts resulting in application made either by the company itself or the creditors of more than 50% of secured debts, for the company to be declared a Sick Company.

7. One Person Company

The New Act introduces a new type of entity to the existing list i.e. apart from forming a public or a private limited company, the New Act enables the formation of a new entity a ‘one-person company’ (OPC). An OPC means a company with only one person as its member. The Companies Act 1956 requires minimum two shareholders and two directors in case of a private company

8. National Company Law Tribunal

The New Act, introduced National Company Law Tribunal and the National Company Law Appellate Tribunal to replace the Company Law Board and Board for Industrial and Financial Reconstruction. They would relieve the Courts of their burden while simultaneously providing specialized justice.

Many more minor changes have been made by the New Act which contribute to creating a better scenario for the Indian corporate arena. As mentioned by Charles Darwin, a system must be open to change if it needs to survive. Indian socio economic growth does not depend only upon survival, but it depends on thriving by optimizing the circumstances to bring out the best results; and the New Act is a big step towards achieving our goals.

Monday, October 6, 2014

Do Indian laws support “gender stereotypes”?

Do Indian laws support “gender stereotypes”?

Our Indian society is said to be male-oriented. It is a patriarchal society that we live in. India, being a secular country, has separate laws for people belonging to different religions. These laws were made keeping in mind the ancient customs and usage of the society since the dawn of our civilization. This is because we still respect the laws and customs which were laid down by our predecessors and worship them. The practice in most religions since ancient times was such that, when looked at from modern perspective, are gender-biased. Hence, some of the Indian laws may seem to be gender-biased too. No doubt that most of the misogynistic customs have been made illegal in India such as dowry, sati, child marriage, etc. It is another question whether those laws have been effectively implemented.

Much has been said and done about the serious issues of “Gender Inequality”, but not much heed has been paid to the less serious matter of “Gender Stereotypes” which has its own impact in our society.
Let us introspect on some “gender stereotypes” which we see amongst Indian people resulting from our culture and customs:

v  The Right to pursue a career vis-à-vis the right of equality :  The way our socio- eco environment is even in the 21st century in many cases women are expected to give up their vocation after marriage or majority of the times after bearing children. Women have proved to be better managers and in many cases better entrepreneurs too, however still they are made to sacrifice their career once they are married. This is mainly seen in our country most of the people have the benefit of living in a joint family and that would assist women to share home responsibilities and manage work or career more efficiently but it has exactly been the opposite. This cannot be resolved by enacting legislations but can only be changed with the evolution of our society and mindsets.

v  Women aren’t encouraged to tackle the issue of sexual harassment openly and seeking help if need be. Women are expected to be gentle, calm and graceful rather than being vocal forward about her views: The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, there are also the guidelines provided by the Supreme Court in Vishaka vs. State of Rajasthan, etc. have been enacted to protect women from being harassed. Women throughout the world are being harassed, and this issue isn’t something which is just going to vanish on its own, and that is why women need to learn how to tackle this problem or she will always be a victim of harassment. Parents teach their girls to ignore whistles that may come their way while walking on the road, or a seemingly harmless brushing of body parts against anyone. However, sometimes silence is taken as an affirmation by people who propagate sexual harassment. A line should be drawn between what kind of behavior is better left ignored and what kind of behavior needs to be reacted to. When such a line is crossed, she should react appropriately. That is where the laws come into the picture.

A girl who emanates qualities like being “delicate” and “innocent” is the first target of an assaulter. Whereas a woman who is publicly vocal about such things is never the first choice of the attacker. In today’s world, a woman should be aggressive and straightforward just like a man if she wants to be treated equally. An educated, forward-thinking girl will not silently tolerate being harassed.

v  Women should not travel at late night: Parents won’t freak out if their son is late, but they lose their minds when their daughter is late. Every parent teaches their daughter that the best thing for them is to be home by 6-7pm or she is sure to get raped or drugged or harassed if she stays out till late. Nobody teaches their sons to never disrespect any girl in any way and to stand up for women in need. This outlook cannot be changed by any law. It can only change with the thinking of the masses.

v  Women should always let her man lead: There are some types of families which are matriarchal where the mothers of the family make the important decisions. It is an Indian saying that women bring wealth is the house. Then why can’t she lead?

v  Women should always cook for her family: Nobody can handle each and everything in life. In families of slightly liberal minded people, women are allowed to work. But they are thinking a tad bit too liberally if they assume that all the house chores can be handled by her besides handling her job. Everyone needs help and life isn’t only about working. It would do us good to unwind and relax every now and then.

v  Women should not socialise or have any friends from the opposite sex: Women in India have always been discouraged from interacting with the opposite sex. A girl’s character is questioned upon if she has a lot of “guy” friends. On the contrary women should be encouraged to have friends from the opposite sex who are respectful and loyal and they are helpful in the time of need.

     Indian laws are very “pro” women, but the same cannot be said about the Indian attitude. A law does not come to life unless it is rightfully implemented. Recently, a woman from a small village in Indore was asked to “prove” her “chastity” to her in-laws by holding red hot iron rods in her hands and the same was to be done in front of the entire village Panchayat. The woman along with her maiden family had the courage to approach the right authorities and file a case against the in-laws and the husband. They were charged with section 498 A of the IPC for  Enticing or taking away or detaining with criminal intent a married woman.

    Hence, I conclude by saying that it is not the Indian Laws which support or promote these “gender stereotypes”, rather it is the lack of proper implementation as well as lack of the right outlook towards women that promote the “gender stereotypes”. A woman is as powerful and fearsome as a man, if only she can be made to believe in herself.

Thursday, October 2, 2014

Are you really safe in Cyber Space?

 Are you really safe in Cyber Space?

In order to answer this question, we need to probe into a few important facts and dwell on its repercussions over the public in general.

According to Business Standard, Indian Government is the second highest seeker of Internet User’s Private Info from Google.Legal experts say, the increase in requests by the Indian government can be attributed to the inability of the existing cyber laws to handle such situation.

The popularity of social media sites have continued to grow rapidly among Indians in the past few years. Everyone wants to increase their friend-lists on Facebook; have more followers on Instagram; make professional contacts on LinkedIn; share their views and thoughts on Twitter. We have become dependent on social media for news updates and Entertainment, for example- YouTube. The response towards Social Media and Internet for the purpose of engagement with not necessarily only personal contacts, but also with making friends across the borders has been phenomenal. It is as convenient as clicking a virtual button of “Login”.

As good as it is to be in the know-how of technological developments and innovations which make life seem more fun and colourful, it is also important not to be ignorant of the other side of the coin. As the demand and popularity of these social media sites increases, so do the security risks which are associated with them. The main concern regarding these popular sites is that they are the first target of a hacker.
The nature of information on the internet:
 The internet allows data to be produced, collected, combined, shared, stored, and analyzed and is constantly changing and re-defining personal data.  For example, seemingly harmless data such IP address, key words used in searches, websites visited, can be accessed and its combination can be analyzed to identify individuals and learn personal information about an individual. Cyber crimes like Internet Fraud, Identity Theft, etc can have a huge impact on people’s lives as it is their personal information that is being misused.

Are we protected from these Cyber Crimes?  What are the cyber laws passed in India?
Currently, India's most comprehensive legal provisions that speak to privacy on the internet can be found in the Information Technology Act (ITA) 2000.  The ITA contains a number of provisions that can, in some cases, safeguard online privacy, or in other cases, dilute online privacy. Provisions that clearly protect user privacy include: penalizing child pornography, penalizing, hacking and fraud and defining data protection standards for body corporate. The ITA is helpful in the Commerce business, filling online forms but it is silent on taxation and payment of Stamp Duty on Electronic Documents. There are other laws such as The Personal Data (Protection) Bill which hasn’t been passed yet. The current Indian Cyber laws are proving itself to be redundant at tackling issues regarding protection of Personal information and extraction of the same from social media websites.

What steps should we take to ensure that we stay Cyber Safe?
·        Use Strong Passwords.
·        Use secure “https://” connection while accessing social media websites.
·        Keep our Antivirus software up to date and scan regularly.
·        Avoid suspicious links and emails.

·        Share only with people we know and trust.