This freely downloadable e-book is a ready reckoner of legislations and good practices related to prevention, prohibition and redressal of sexual harassment of women at workplace.
This freely downloadable e-book is a ready reckoner of legislations and good practices related to prevention, prohibition and redressal of sexual harassment of women at workplace.
One of the quick ways to shut down a company, when non-operational over a period of time, was through a process called Fast Track Exit (FTE). In its place, under the Companies Act, 2013 has brought in a process called Removal of Names of Companies from Register (Section 248 of Companies Act, 2013), with effect from 26 December 2016.
On 26 December 2016, Ministry of Corporate Affairs (MCA) issued a Notification notifying Section 248, 249, 250, 251 and 252 of Companies Act, 2013 (Chapter XVIII). This chapter deals with Removal of Names of Companies from Register of Companies.
These are some measures to ensure that there are no fraudulent applications for removal of name, including ensuring there is no intention to deceive creditors or defraud any person.
Though the company has been dissolved and its name removed from the ROC’s registers and intimation provided to tax authorities, it has to be noted that liabilities, if any, continues on every director, key officer, members of the company continues and may be enforced as if the company had not been dissolved.
This is the major difference between the process as described above and winding up through NCLT.
With detailed rules, process, forms and guidance, the Government has provided much clarity. The rules also provides for clear timelines for statutory bodies to respond. It would have been nice if timelines were established for disposal of application by the ROC as well. The expenses of opting this route of shutdown has marginally gone up, due to newspaper notification to be published.
Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 came into force from December 2013. Earlier, we had written a brief about the Act, constitution of the Internal Complaints Committee (ICC).
In this presentation, we are capturing the compliances that organizations should comply with.
Authors: Saumya Kakar, Associate and Sohini Mandal, Junior Partner.
In order to take forward and accelerate the agenda of the “Ease of Doing Business” and “Make in India”, the Commercial Courts, Commercial Division and Commercial Appellate Division of the High Court’s Act, 2015 (the “Act”) has been promulgated, which provides for the constitution of Commercial Courts and the establishment of Commercial Divisions and Commercial Appellate Divisions in the High Courts to adjudicate Commercial Disputes for achieving the motive of swift and speedy enforcement of contracts, recovery of monetary claims and compensation for damages suffered to increase investment and economic activity in our country.
The key features of the Act are as follows:
In light of the key features stated above it is evident that the Act is a laudable piece of legislation and a step in the right direction but there are issues unaddressed/unclear in it, which are highlighted below:
“Justice delayed is justice denied” – The Act is inarguably a big step to curb this inefficiency of Indian judicial system. The Delhi High Court was the first off the blocks designating four of its benches as Commercial Divisions. It added two more benches to the Division followed by the High Court of Bombay designating judges for the Commercial Divisions. Despite the drawbacks, setting up of Commercial Courts/Divisions will accelerate economic growth, improve the image of the Indian justice system and enhance investors’ confidence in the country’s dispute resolution culture.
Authors: Saumya Kakar, Associate and Sohini Mandal, Junior Partner
The Government introduced the Insolvency and Bankruptcy Bill, 2015 in Parliament on Monday (21/12/15). The current bankruptcy code in India and contains archaic laws and is spread out over multiple legislations. Due to this, India was ranked as the 136th best country for ease of conducting insolvency proceedings, as per the World Bank ranking earlier in 2015. Further, it is ranked as the 130th best country for ease of doing business, as per the same rankings (out of 180 countries). This Bill seeks to streamline the law according to global standards, making it easier to wind up or liquidate a company (both voluntarily and involuntarily), attract investment, promote entrepreneurship and push India higher in World Bank rankings. It has also been certified as a Money Bill, preventing the Rajya Sabha from stalling it, and providing for its quicker passage (a more detailed explanation of Money Bills is given at the end of the article). The important features of the Bankruptcy Code are as follows:
1.) It will amend and consolidate all bankruptcy laws and rules prevalent in other legislations (Companies Act, 2013, Sick Industrial Companies Act, 1985, and the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002) to become the overarching bankruptcy law.
2.) It covers individuals, companies, limited liability partnerships and partnership firms.
3.) It lays down a time limit within which the proceedings must be completed – 180 days from the date of admission of the application. This period can be extended by 90 days by the relevant authority, if it determines that “the case is of such complexity that an orderly corporate insolvency resolution process cannot be completed within one hundred and eighty days.”
4.) This time limit can be cut down to 90 days through a fast-track procedure available for some key categories.
5.) It provides for insolvency professionals who will specialize in helping sick companies. It also provides for information utilities that will collate all information about debtors to prevent serial defaulters from misusing the system.
6.) It seeks to establish an Insolvency and Bankruptcy Fund.
7.) It also provides for the creation of an Insolvency and Bankruptcy Board (the Insolvency Regulator) for regulating insolvency professionals, insolvency professional agencies and information utilities.
8.) The above Regulator will be comprised of the following authorities:
9.) If any of the above forums fail to complete a process of insolvency before them within the stipulated timeline (clause 3 & 4), then the President of the forum is required to record in writing the reasons for the same.
10.) The “corporate insolvency resolution process” may be initiated by the following:
11.) The Code provides for a mandatory moratorium, preventing individual creditors from taking action or selling assets, giving the courts and the company time to attempt rehabilitation. This moratorium lasts for all 180 days of the process. Previously, the Company Law Tribunal could only grant a moratorium of 120 days if it so chose – it was not mandatory.
12.) During the insolvency process, if the creditors and members resolve to voluntarily liquidate the company, then the moratorium does not apply.
Art. 110 of the Constitution of India, 1949, defines a Money Bill. As per this article, a Bill is a Money Bill if it contains only provisions dealing with all or any of six specific matters (Article 110 (1)(a) to (1)(f)), which are broadly related to:
A Money Bill can be introduced only in the Lok Sabha (Art. 109(1)), and only with the prior permission of the President. In case any question arises as to whether a Bill is a Money Bill or not, the decision of the Speaker of the Lok Sabha on this matter is final (Art. 110(3)). Once it is passed in the Lok Sabha, the Money Bill goes to the Rajya Sabha for its recommendation (along with a certificate from Speaker stating that it is a Money Bill). Unlike regular/non-money bills, Money Bills are not subject to the approval of both houses. The Rajya Sabha cannot reject or stall the Money Bill, but can only give its recommendations and return the amended Money Bill to the Lok Sabha (Art. 109). Further, as per Art. 109 (5) if the Rajya Sabha does not return the Money Bill to the Lok Sabha within 14 (fourteen) days, it is considered as passed by both houses of Parliament. If the Money Bill returns on time, the Lok Sabha can either incorporate some or all of the changes proposed by the Rajya Sabha, or reject all of them. Once the Money Bill has gone through the Lok Sabha a second time, it is deemed to be passed by both houses. Lastly, the President cannot send the Money Bill back to the Lok Sabha for consideration, as it was initially introduced with his/her permission.
In 2010, a Spaniard, Mario Costeja González approached the Spanish Data Protection Agency with a complaint against Google and a local newspaper. A Google search of his name led to an auction notice of his repossessed home on the local newspaper. Costeja claimed that since the proceedings had been resolved many years ago, the search results still being available online was a breach of his privacy. The Spanish court referred the matter to the Court of Justice of European Union. Among numerous questions considered by the EU Court, the most notable was whether individuals have a right to request that their personal data be removed from accessibility via a search engine. In a landmark judgement, the EU Court held that where the information is ‘inaccurate, inadequate, irrelevant or excessive,’ individuals have the right to ask search engines to remove links with personal information about them. The court also ruled that even if the physical servers of the search engine provider are located outside the jurisdiction, the privacy rules would apply if they have branch office or subsidiary in the Member State.
Theoretical debate on Right to be Forgotten: US v. EU
Position under EU Law
The 1995 EU Data Protection Directive contains the basis for what has evolved into the much debated right to be forgotten. Article 12 of the Directive allows a person to seek deletion of personal data once it is no longer required. Later the EC released a proposal in 2012 to unify data protection across Europe under a single law, General Data Protection Regulation. The regulation is still under consideration and is expected to be adopted soon. Under this regulation, a right to erasure is provided under Article 17 which would enable the data-subject to seek deletion of data. Under Article 17, consideration regarding data controller’s legitimate business interests may be overridden by the fundamental rights of the data subject.
Position under US Law
Ever since the Costeja judgment there has been a furore over this issue. The ideological debate on the right to be forgotten can be seen a reflective of the divergent positions of EU and US on privacy. In EU, the right to be forgotten flows from the French law right to oblivion. On the other hand, in US, the approach has been to have sector specific privacy laws such as the HIPAA and Children’s Online Privacy Protection Act rather than an all encompassing law. Further, the right to be forgotten as perceived in Costeja or the proposed regulation in EU would likely be seen as contravening on the First Amendment position on free speech in the US.
As far as search results go, the position is likely to be different in US for another reason. The Communications Decency Act, 47 U.S.C. § 230, provides immunity to search engines and other Internet access providers from any liability for linking to others’ content. The theoretical criticism of the right to be forgotten also pits it against right to privacy in that it goes one step beyond. Right to privacy is only applicable to that which is private, whoever, right to be forgotten seeks to remove what is already in the public domain legitimately.
Legal basis for right to be forgotten:
There is a point of view that private information should be treated as a form of intellectual property and accordingly, individuals should be given the property rights to control their data which would include all ‘personally identifiable data.’ This could theoretically be a legal basis for the ‘right to be forgotten’ as deeming the data as intellectual property would make it applicable on all parties, not merely those with privity of contract. However, as mentioned above, this would involve significant speech restrictions and whether the publication is truthful or not would have no impact. This arrangement would run counter to First Amendment and defamation where truth is always a defence. This theory of right to be forgotten could also give rise to the notion that if data is treated as property, it can be traded in a ‘private data market.’
Ambiguities: Legal and Technical
What is personal data?
There are no precise definitions in the EU Regulation of where the right would apply. Personal data is broadly defined as information that can be linked, either by itself or in combination with other available information, to uniquely identify a natural person. However, it is open to interpretation whether personal data includes information that can be used to identify a person with high probability but not with certainty, for instance, an account of a person’s history, actions or performance. Neither is the Regulation clear on whether it includes information that identifies a person not uniquely, but as a member of a small set of individuals, such as a family. The difficulty is that the EU regulations and laws tend to be deliberately broad and general, to allow for a range of interpretations appropriate for many different situations. However, this poses significant technical issues without a precise definition of the data and circumstances to which the right to be forgotten shall apply.
Who can exercise the right to be forgotten?
This is another issue that needs greater clarity. Often a piece of information could concern more than one individual and in such a scenario there could be a conflict between their respective wishes on how such data or information is to be treated. A related question is how the right to be forgotten should be balanced against the public interest in accountability, journalism, history, and scientific inquiry. Would the same standards be applicable to a regular individual, a politician and a celebrity when it comes to deletion of embarrassing reports from the past? There are also no proposed regulations that could ensure neutrality by the data controllers.
What constitutes ‘forgetting?’
The strictest way of looking at what constitutes ‘forgetting’ would be deletion of all copies of data from all sources to the point that recovering the data is not possible by any means. This may prove be impractical and a weaker way to enforce the right would involve allowing the data to survive in an encrypted form, or even allowing the data to remain unencrypted but not present in a public domain.
Impact so far:
As of July 2014, Google Inc. has begun to comply with the CJEU decision. A form that allows individuals to request the removal of their personal information from Google Inc.’s search results in the local domains is available for users. Notably, for all proper name searches within local domains of EU Member States (e.g., “google.es” or “google.co.uk”), Google Inc. has added the phrase, “Some results have been removed under data protection law in Europe” at the bottom of the search results page. It is interesting though that is the case only for the local domains of the EU member states and even within these state, one can do a search on ‘google.com’ to access the unedited search results.
The idea behind the right to be forgotten definitely has considerable merit, especially in the age where information is disseminated so freely and unlike the ephemeral information pre-digital era, most data continues to remain accessible. However, the right as contemplated by EU is still at a very half baked stage in terms of how exactly it would be enforced. Significant technical and conceptual challenges remain in (i) permitting a person to identify and locate personal data about them; (ii) controlling all information derived from the data in question from which the data in question could be derived; (iii) having fixed criteria for who has the right to request erasure; and, (iv) implementing the entire process of removal of all data and derived information when an authorized person exercises the right.
 Article 12 – Member States shall guarantee every data subject the right to obtain from the controller:….(b) as appropriate the rectification, erasure or blocking of data the processing of which does not comply with the provisions of this Directive, in particular because of the incomplete or inaccurate nature of the data; (c) notification to third parties to whom the data have been disclosed of any rectification, erasure or blocking carried out in compliance with (b), unless this proves impossible or involves a disproportionate effort.
 The new proposed EU regulations define personal data in art 4 as follows: “(1) ‘data subject’ means an identified natural person or a natural person who can be identified, directly or indirectly, by means reasonably likely to be used by the controller or by any other natural or legal person, in particular by reference to an identification number, location data, online identifier or to one or more factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of that person; (2) ‘personal data’ means any information relating to a data subject.”Data protection directive, definitions in Article 2 are “(a) ‘personal data’ shall mean any information relating to an identified or identifiable natural person (‘data subject’); an identifiable person is one who can be identified, directly or indirectly, in particular by reference to an identification number or to one or more factors specific to his physical, physiological, mental, economic, cultural or social identity.”
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A Micro & Small Enterprise, in terms of MSMED Act, 2006 can now go ahead and issue shares or convertible debentures to a person resident outside India (PROI), exceeding 24% of its paid -up capital. The only conditions which need to be fulfilled is w.r.t the sectors prohibited and the maximum limits in Schedule 1 of Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000. Nonetheless, it should comply with FDI Policy, as notified by Ministry of Commerce & Industry, G.O.I., from time to time.
Further, any Industrial Undertaking, which is not an MSE and having an industrial license under the provisions of Industries (Development & Regulation) Act, 1951 for manufacturing items reserved for MSE sector, can issue shares exceeding 24% of its paid up capital with prior approval of FIPB.