Friday, February 27, 2015

A brief appraisal of the Indian Maritime System and its laws

India’s geographical position has contributed to it becoming an increasingly important seafaring nation for the world. India has had a glorious maritime history and tradition much before the rise of European maritime powers. Indian ships sailed across many seas for the purpose of carrying on trade mainly with Asia and Middle Eastern countries. Since the advent of British Rule, the development of indigenous shipping industry was discouraged because of preferential treatment given to British shipping. The British navigational laws and maritime jurisdiction was very restrictive, and hence, it hindered the growth and development. Indian shipping industry gradually disintegrated from the High Seas.
The British law was applicable to Indian ships trading in international sea voyages as these ships were required to be registered under U.K. Merchant Shipping Act and therefore, technically they were British Ships although registered in India. The Indian Merchant Shipping Law was vague and imprecise in that time. Between the years 1938 to 1947, the following legislation on merchant shipping were held the field (a) The Bombay Coasting Vessels Act, 1938 (b) The Indian Registration of Ships Act, 1841 (as amended in 1950); and (c) The Indian Merchant Shipping Act, 1923. The first of the three enactments referred to above dealt with regulations of seagoing vessels. The 1841 act embodied in it provisions relating to registration of sailing vessels. Both these enactments had, however, been so modeled as to apply only to small coasters and sailing vessels. The third Act, namely, the Indian Merchant Shipping Act, 1923 was fairly comprehensive. Indian Merchant Shipping Law consolidating the provisions of the earlier two acts was supplemented by passing of the Seamen (Litigation) Act, 1946 and Control of Indian Shipping Act, 1947. This Act had, however, only consolidated the laws on merchant shipping and it did not revise the law and therefore, was found wanting in many respects.
Immediately after the independence, to suit the requirements of a maritime country like India, the Merchant Shipping Act, 1958 was passed by the Indian Parliament. This Act had made good the main deficiency in the earlier laws that they did not provide for registration of what may be termed as Indian Ships. Certain enabling provisions were also incorporated in the Act to accelerate the pace of development of shipping in the post independence period. This Act is divided into 24 parts, each part dealing with specific aspects of merchant shipping like registration of ships , sailing vessels and fishing vessels, National Shipping Board, manning of ships, engagement, discharge and repatriation of seamen and apprentices, safety of passenger and cargo ships, control of Indian ships and ships engaged in the coasting trade, collisions, prevention and control of pollution of the sea by oil from ships, limitation of ship-owner’s liability, civil liability for oil pollution damage etc.
The Merchant Shipping (Amendment) Act, 2014 was passed recently wherein Maritime Labour Standards have been revised along with various other parts of the Merchant Shipping Act, 1958. Numerous Merchant Shipping Rules have been enforced by the Indian Government from time to time since 1960, and the most recent one being The Regulation of Entry Ships into (Ports, Anchorages and Offshore facilities) Rules, 2012. The Indian Carriage of Goods by Sea Act, 1925 [ as amended in the year 2000]; The Multimodal Transportation of Goods Act, 1993 (as amended in December, 2000); The Registration of Multimodal Transport Operators Rules, 1992 & MTD Rules, 1994; The Inland Vessels Act, 1917; The Indian Ports Act, etc have been passed in view of regulating the Indian maritime system.
The admiralty laws of different countries depend on its strategic maritime placement. It is not rooted in the country’s civil law system, although it substantially derives from it. This is because Admiralty laws have been made while considering the international aspect and the undergoing changes within several countries. Every country has a unique universal feature depending on their admiralty laws, and such features have to be given serious deliberations by admiralty courts throughout the world while considering any matter. Admiralty jurisdiction as a concept has been difficult to incorporate on an international basis, but just as important too.
If a suit is filed against a foreign ship which is owned by a foreign country having no business setup in India, it will be liable to be proceeded against on the admiralty side of the High Court and the cause of action will be said to have arisen by reason of a tort or a breach of obligation of carriage of goods from a port in India to a foreign port. In the past, statutory admiralty jurisdiction was held only by the High Courts of Calcutta, Madras and Bombay, however, later on by a judgment of Supreme Court, since the High Courts had Original and Appellate jurisdiction, as well as possessing inherent and plenary powers, the High Court was said to have unlimited jurisdiction, including the jurisdiction to determine their own powers.
After India attained independence, the Indian Parliament has so far not exercised its powers to make laws with respect to Admiralty and thus the three Indian High Courts were to apply Admiralty laws as it was applied by the English Court of Admiralty as defined in the Admiralty Court Act, 1861. The scope and nature of the Admiralty jurisdiction exercised by the High Courts in India have been examined and ascertained in various cases, the significant ones being - Kamlakar v. The Scindia Steam Navigation Co. Ltd; Rungta Sons Ltd. v. Owners and Master of Edison; National Co. Ltd. v. M. S. Asia Mariner.
The judicial sovereignty of this country is manifested in the jurisdiction vested in the High Courts as superior courts. The fact that the High Court continues to enjoy the same jurisdiction as it had immediately before the commencement of the Constitution, as stated in Art. 225, does not mean that a matter which is covered by the Admiralty Court Act, 1861 cannot be otherwise dealt with by the High Court, subject to its own Rules, in exercise of its manifold jurisdiction, which is unless barred, unlimited.
The admiralty jurisdiction of the High Court was further consolidated by the Supreme Court of Judicature (Consolidation) Act, 1925 so as to include various matters such as any claim "for damage done by a ship", and claim 'arising out of an agreement relating to the use or hire of a ship'; or 'relating to the carriage of goods in a ship'; or "in tort in respect of goods carried in a ship".
The admiralty jurisdiction of the High Court was further widened by the Administration of Justice Act, 1956 so as to include not only the claims specified under Section 1(i) of Part I but also any other jurisdiction which either was vested in the High Court of Admiralty immediately before the date of commencement of the Supreme Court of Judicature Act, 1873 (i.e. November 1, 1875) or is conferred by or under an Act which came into operation on or after that date on the High Court as being a court with admiralty jurisdiction and any other jurisdiction connected with ships vested in the High Court apart from this section which is for the time being assigned by rules of court to the Probate, Divorce and Admiralty Division.
Sub-section (4) of Section 1 removed the restriction based on the ownership of the ship. By reason of Clauses (d), (g) and (h) of the said Section the jurisdiction in regard to question or claims specified under Section 1(i) included any claim for loss of or damage to goods carried in a ship, any claim arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of a ship.

In the course of time the jurisdiction of the High Courts vested in all the divisions alike. The Indian High Courts after independence exercise the same jurisdiction.

Monday, February 23, 2015

Globalization and labor standards in India.

Globalisation is the new buzzword that has come to dominate the world since the nineties of the last century with the end of the cold war and the break-up of the former Soviet Union and the global trend towards the rolling ball. The frontiers of the state with increased reliance on the market economy and renewed faith in the private capital and resources, a process of structural adjustment spurred by the studies and influences of the World Bank and other International organisations have started in many of the developing countries. Also Globalisation has brought in new opportunities to developing countries. Greater access to developed country markets and technology transfer hold out promise improved productivity and higher living standard. But globalisation has also thrown up new challenges like growing inequality across and within nations, volatility in financial market and environmental deteriorations. Another negative aspect of globalisation is that a great majority of developing countries remain removed from the process. Till the nineties the process of globalisation of the Indian economy was constrained by the barriers to trade and investment liberalisation of trade, investment and financial flows initiated in the nineties has progressively lowered the barriers to competition and hastened the pace of globalisation.

Globalization is an important factor behind the high rate of labor standards in India. The economic liberalization policies, the economic and market growth and the trends of globalization have really made India into a vast consumer market which has increased demand to a great extent. All these factors have positively affected the rate of labor and employment in the country. It was in the 1990s that the economic liberalization policies were first undertaken by the government. The shift towards these open market policies really did a lot to bring about a change and make the country into a vast consumer market. The Gross Domestic Product as well as the exports started increasing significantly. This shift towards the consumer market and the demand supply chains led to the growth of various sectors which provided the scope of employment in the country. The open market economy also gradually led to the growth of the private sector which provided ample employment scope for the skilled workforce. 

Since then, the job prospect in India has really grown up over the years Prior to the economic liberalization policies, employment in India was mainly based on the government and public sector. Most of employment used to be generated in various government enterprises, banks, financial organizations and public sector units. This led to high scale red-tapism, License Raj and other problems of workforce. The standard of labor significantly started getting worse and there were constant labor problems, lockouts, strikes and so on. Due to all these factors, the overall work culture and the labor situation in India suffered a set back.

In India, In order to make conditions more friendly for investors, there is a need for adaptability. Labour legislation, such as the Indian Disputes Act and Contract Labour (Regulation and Abolition) Act, are now under debate, along with issues concerning special economic zones.

With more companies operating internationally, the impact on various business functions and labour laws in India is becoming more pronounced. Globalization, and the need to attract foreign investment, inevitably leads to an attack on a workers’ rights by diluting existing labour standards, as trans-national corporations (such as the World Bank, the World Trade Organization, and the International Monetary Fund) concede to the demands of Multinationals. This dilution of stringent labour standards and strong resistance to any strengthening of workers’ rights (which sometimes become an obstacle to competitiveness in the global economy) is becoming prevalent in India since the beginning of the reforms in the early 1990s, there have been demands from industry for liberalization in the stringent labour regulatory framework. With huge expansion in cross border capital, trade technology and information flows becoming a defining feature of the Indian economy, addressing labour concerns for making conditions more investor friendly would be the next rational step.

Wednesday, February 18, 2015

Laws related to Money laundering in India

Money Laundering is a global menace that cannot be contained by any nation alone. The Prevention of Money Laundering (Amendment) Bill 2011 was necessitated to bring prevention of money laundering legislation on par with global norms. The said Bill is still pending for approval in the Parliament.
The Financial Action Task Force on Money Laundering (FATF) an intergovernmental body established by the G-7 Summit in Paris in 1989 and responsible for setting global standards on anti-money laundering and combating financing of terrorism defines money laundering as the processing of criminal proceeds to disguise their illegal origin in order to "legitimize" the ill-gotten gains of crime."
India became the 34th country member of the Financial Action Task Force in 2010. India is also a signatory to various United Nations Conventions which deal with anti money laundering and countering financing of terrorism.
India has criminalized money laundering under both the Prevention of Money Laundering Act, 2002 (PMLA), as amended in 2005 and 2009, and the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act), as amended in 2001.
In India, before the enactment of the Prevention of Money Laundering Act 2002, a number of statutes addressed scantily the issue of money laundering, albeit without any major affect. These statutes were:
  • The Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974,
  • The Income Tax Act, 1961,
  • The Benami Transactions (Prohibition) Act, 1988,
  • The Indian Penal Code and Code of Criminal Procedure, 1973,
  • The Narcotic Drugs and Psychotropic Substances Act, 1985,
  • The Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act, 1988.
The Prevention of Money Laundering Act 2002 is sought to be further amended by The Prevention of Money Laundering (Amendment) Bill, 2011 hereinafter referred to as the 'Bill', which has been introduced by the President of India, Mr. Pranab Mukherjee when he was the Minister of Finance in Lok Sabha on December 27, 2011.
  1. The Bill proposes to introduce the concept of 'corresponding law' to link the provisions of Indian law with the laws of foreign countries.
  2. It also adds the concept of 'reporting entity' which would include a banking company, financial institution, intermediary or a person carrying on a designated business or profession.
  3. The Bill expands the definition of offence under money laundering to include activities like concealment, acquisition, possession and utilization of the proceeds of crime.
  4. The Prevention of Money Laundering Act, 2002 levies a fine up to Rupees five lakhs. The Bill proposes to remove this upper limit of fine as it is a meager amount compared to the vastness of the amount of black money hoarded away.
  5. The Bill seeks to provide for provisional attachment and confiscation of property of any person for a period not exceeding 180 days if the authority has reason to believe that the offense of money laundering has taken place.
  6. The Bill proposes to confer powers upon the Director to call for records of transactions or any additional information that may be required for the purposes of investigation.
  7. The Director may also make inquiries for non-compliance of the obligations of the reporting entities.
  8. The Bill seeks to make the reporting entity, its designated directors on the Board and employees responsible for omissions or commissions in relation to the reporting obligations.
  9. The Bill states that in the proceedings relating to money laundering, the funds shall be presumed to be involved in the offence, unless proven otherwise.
  10. The Bill proposes to provide for appeal against the orders of the Appellate Tribunal directly to the Supreme Court within 60 days from the communication of the decision or order of the Appellate Tribunal.
  11. The Bill seeks to provide for the process of transfer of cases of the Scheduled offences pending in a court which had taken cognizance of the offence to the Special Court for trial. In addition, on receiving such cases, the Special Court shall proceed to deal with it from the stage at which it was committed.
  12. The Bill also proposes to bring all the offences mentioned under Part A of its Schedule to ensure that the monetary thresholds do not apply to the offence of money laundering.

Friday, February 13, 2015

Complying with Corporate Social Responsibility

CSR policy honours the triple bottom line: people, planet, profit. It’s like a corporate conscience, integrating the public interest in corporate decision making by encouraging community growth and development and voluntarily eliminating practices that harm the public, regardless of legality.

A bare reading of the new CSR rules may indicate simplicity and reader-friendliness. But close analysis of the fine print leaves ample room for ambiguity at various places.

Corporate Affairs Minister Sachin Pilot pointed out that the process of finalization of the rules included extensive consultations with all stakeholders. Putting to rest speculations and apprehensions that did the rounds in the aftermath of the draft rules, the final rules bring in greater clarity on aspects relating to the formulation of the CSR committee, the need to effectively monitor the implementation of the CSR policy and the manner of undertaking CSR activities. The Board will play a very crucial role in overseeing the implementation of the programmes. Here’s a closer look at some of the key developments that companies need to make note of-
While the Companies Act prescribes a specific method for computing net profits and the CSR contribution, the CSR rules take a step backwards in carving out exclusions from the net profit so calculated. Most shockingly, one of the exclusions provides that the profits of a branch of an Indian company located outside India cannot be merged into the profits of the parent company for the purpose of computing the two per cent contribution. This exclusion goes against the very mandate of Section 135 and is, to that extent, ultra virus.
The Companies Act, 2013, defines CSR activities to mean an identified set of activities set out in the separate schedule to the Act. However, a reading of the definition in the rules indicates that the list of CSR activities provided in the rules (which also includes the schedule activities) is only illustrative and not exhaustive. At the same time, an overall reading of the rules strongly suggests that the scheduled activities alone will be considered for the purpose of CSR. Whether or not social activities falling outside the purview of the schedule form a part of CSR activities still remains doubtful.
Another aspect of ambiguity in the new law that was expected to be corrected through the rules was the 'local area preference'. The Act provides that a company should give preference to the local area in which it operates for CSR spending. How would this work if a company has more than one operational office in the same city, or even otherwise? Is the location of a factory, as opposed to the corporate office, the target of preference?
The CSR rules have rightly excluded contributions directly or indirectly made to a political party from the scope of CSR activity. But, what about contributions made to institutions affiliated with one or more politicians or those located in a constituency represented by a politician who has some form of regulatory supervision or leverage over that company? What about activities/institutions being run under the trusteeship or office of a politician?
Another aspect of the rules that may be abused is the carve-out made in respect of CSR activities undertaken 'only' for the benefit of the employees and their families. Could the intent of the legislation have been to mean activities undertaken 'primarily' to benefit the employees? If a company undertakes a project primarily but not exclusively benefiting its employees, should that be considered CSR activity?
Amid various practical difficulties which may have to be encountered at least in the initial phases of implementation of the new CSR provisions, the initiative of the government is no doubt appreciable. The new provisions may be viewed as the result of the changing corporate philosophy in India and worldwide which entrusts the responsibilities on corporate giants towards social welfare of the population which comprise of their present or prospective employees, customers or other stakeholders in varied roles.

Thursday, February 12, 2015

Education in India: Is it suitable for the minds of our youth?

A generation of great thinkers can make a lot of difference not only for the country in which they are born, but also impact the entire world. The society’s outlook towards learning and character building is what it takes to define the attitude of the youth. The future of any country depends upon its young generation. India still being a developing country and not a developed nation as yet needs a strong education system to churn out smart professionals and reinstate the level of knowledgeable wealth our country can offer the world.

Education system in India still lacks that power to become an asset in the country’s progress. Education system in India is handled by both public and private sector. Many schools, colleges and universities are funded by the government but still many drawbacks have been pointed out in these institutions. Even many basic institutions meant to provide primary education do not meet the standards set by the government neither are they checked upon by the government regarding the way they are run. Children in villages and smaller towns do not have an easy access to primary education. They have to struggle really hard in order to obtain primary education which is their right like travelling long distance in tough conditions. Many girls are especially denied education in many parts of the country. Such schools lack basic and necessary facilities that a school should have like toilets and even roof over the school building in some cases.

If these basic amenities such as proper education are not met by the government as well as the institutions how do we expect our country to become a super power. Even the higher education system is no different. There is lack of administration in the universities itself. Strict rules made by the universities are not followed by the college authorities themselves let alone the students. Many universities have not maintained their level when it comes to education meted out to the students.

The poor quality of education in our country is not just due to the lack of facilities and administration but also because of the poor quality of teaching. The teaching methods lack depth which fails to explain the concept itself. The teaching in schools and colleges is based on rote learning. There is no emphasis on originality.  Education in India has become only exam based. When schools and colleges do not adopt proper teaching methods, students enrol themselves in private classes and tutorials which has become a money making business nowadays. It has as a matter of fact grown into huge and separate industry.

Another reason for poor quality of education is poor quality of teachers in government schools and colleges. Government institutions are unable to attract good quality of teachers because of lack of teaching facilities and low salaries. Due to poor quality of teaching in government institutions many of the people belonging to middle class send their children to private schools which are unaffordable by the people belonging to the lower middle class.

There should be equality in terms of the education given to the children irrespective of the gender and the social strata they belong to. If there is no equality in the system then the real potential of the children will remain untapped.

Another aspect that pulls our education system backwards is that it has been associated with the stigma of sexual harassment and ragging of children in schools and colleges. Many instances have been reported about sexual assaults and ragging of students even in the elite schools and colleges. These institutions are not considered safe any more for children. Parents are scared to send their children to schools fearing such things. Our laws need to be strict and stringent to tackle such issues with competence. Also implementation of these laws is equally important.

The government should make some strict policies regarding maintaining the level of education meted out to the students. Policies should also be made in order to keep in check about the facilities given to students as well as the teachers. All the malpractices should be dealt with stringent laws and punishments immediately. If these policies are regulated by the government and are checked upon from time to time then only can we expect the youth of India to flourish. In order to “Make in India”, our youth needs to acquire the right guidance and knowledge from our education system for turning our country into a superpower.

Thursday, February 5, 2015

Media’s Complexity with Obscenity

Media brings the world to our doorstep. Its purpose is to keep us updated regarding all the goings-on in the world, with the current affairs as well as the technology and advancement of science along with social and economic issues. Media adds to our knowledge and gives us more information. With the advent of new technologies and easy accessibility to the social media as well, each and every piece of news is being churned out and discussed in such detail that it borders on obsessiveness. Due to cut throat competition between every branch of media and to get the most viewers, readers, TRP'S, etc, there is a need for speed for getting stories, lucrative and captivating stories for which there is often a dereliction of duty at the end of media people. Classic news is hardly available on any news channel these days.

We all know the importance of being up to date with the current affairs of the world. But who is to say that what we are watching on TV is actually the information we should be aware of, or just the media’s way to get more viewers with no real regard for the story they are featuring. Who is to make such a differentiation between information, misinformation and disinformation?

Our Indian Constitution has guaranteed a fundamental right to freedom of speech and expression under Article.19 (1) (a), which is repeatedly exploited by the media to broadcast/publish obscene or indecent news. Accompanying the provision of Article 19 (1) (a), Constitution has also made provision imposing reasonable restrictions in the interest of the sovereignty, integrity, public decency, morality, etc under Article 19 (2), and this aspect of the law is highly overlooked by media before publication of content that has proven to be inadequate.

Sec. 292 of the Indian Penal Code, 1860 has made a general provision in respect to obscenity and has not defined the word "obscenity" anywhere. Sub- sec. (1) of sec.292 generally speaks about sale, hire, distribution, public exhibition or circulation of any book, pamphlet, paper, drawing, painting, etc having any lascivious content, effect of which it tends to deprave and corrupt people who read, see or hear the matter contained in it to be an offence. But the loop hole in this section of IPC is that it has not defined the term "obscenity", hence, it has become very difficult to precisely state what comes under the purview of “obscenity” and what doesn’t. With each passing day, our society is evolving into a more 
receptive “modern” society while adopting the western culture and in such a time, anything can be sold in the name of changing modern lifestyle or elevation from conservative social thinking.

The term "obscenity" for a layman means something which is indecent, lewd, and offensive in behavior, expression or appearance and which creates a situation of sudden shock for the recipient and having this in mind. Obscenity is a subjective term, which might differ from individual to individual for their personal feelings and opinions concerning indecency related to a particular thing. What might be indecent for one, might not be for the other but considering this fact, it is incumbent on the legislature to interpret the term "obscenity", to avoid further assassination of morality. There needs to be a yardstick indicating a line of demarcation adequate enough to distinguish between that which is obscene and that which is not.

Many advertisements published in newspapers, magazine related to contraceptives involve picture of semi-nude women models posing in seductive gestures, soliciting and luring people to try their products. The rationale which is attached to such advertisements is that it cannot be called obscene if it carries a social message.

Such advertisements granted may carry a relevant social message, but it surely cannot justify the unnecessary photos of scantily clad models that accompany it. It proves to be inappropriate for children and young adults and only creates more mischief in their minds. Particularly for newspapers and magazines which are pursued by almost every age group, there has to be certain restrictions on publication of forcefully lewd content.

As of today, majority of the Indian society have yet to progress from the conservative social state of mind and still lack the capacity to interpret what they are presented with, in the right manner and hence, there is a need for a check over "obscenity" as well as the laws attached to it.

Monday, February 2, 2015

Have You Thought About Consideration?

Contract is the legal means of enrichment with cause. Through contract, individuals may increase their world of rights and duties. Contract is the way in which economic activities originated and survived in the world.
Consideration is something of value that a contracting party promises to the other party. In general, consideration comes in two flavors: a benefit that you promise to give the other party and a detriment that you agree to take on. A promise to pay the purchase price for a product would be an example of the former; a promise not to sue someone would be an example of the latter. The consideration is an act, forbearance, return promise, or creation, modification, or destruction of a legal relationship that is bargained for and given in exchange for the promise. Indian Law dictates that an agreement without consideration is void. This means, a purely gratuitous promise has no legal force.
When two parties enter into a contract, there are a lot of contingencies based on the communication between the two parties. Before the contract is formed, it may so happen that one of the parties change their minds. Either they decide to walk away from negotiations or demand a higher price, or maybe just decide to work with someone else. But once the contract has been formed, the parties need to abide by what they promised each other.
The law is riddled with exceptions, and consideration usually isn’t at issue in the typical business-to-business transaction. But consideration is important in a sufficient number of contexts. This post has been written to introduce the concept behind consideration and does not; in any way discuss the myriad of issues that the legal doctrine poses at various levels.
Contracts are promises that courts will enforce, but courts won’t get involved for just any promise. Courts require that the parties intend to be bound by their promises at the time of their contracting. And they require contracts to be a two-way street. That’s where consideration comes in. Each party has to bring something to the table.
In most contracts, consideration is a two-way street and the relationship must be analyzed from the point of view of each party. Each is required to provide consideration — a concept often called mutuality — or the contract fails for lack of consideration, and a party who wants to enforce the deal in court will be out of luck.
Although each party has to provide consideration, courts usually won’t delve into whether the deal is fair, so there can be a great disparity in the value of each party’s consideration.
You can see that each party is bringing something of value to the table, so there’s no question whether the contract is supported by consideration. Visualizing a transaction like this and making sure that there’s something of value going in each direction is a simple way to make sure that the contract is supported by consideration.
It is undoubtedly true that every man is by the law of nature bound to fulfill his engagements. It is equally true that the law of our country supplies no means nor affords any remedy, to compel the performance of an agreement made without sufficient consideration. Hence, it can be said that in contract, the concept of consideration has been incorporated because only consideration can provide a positive legal base for the realm of contracts.