In this article, Jitika, pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata discusses the applicability of limitation act in insolvency proceedings

Introduction

What is Limitation Act?

The word ‘limitation’ is defined as a restraint, restriction or a limiting rule, or in legal terms, it is the specifically stated time period, at the expiry of which, the victim parties cannot approach the court for any remedy or justice. Once the period of limitation is elapsed, any right to seek relief is extinguished.

In India, this statute of limitation is termed as Limitation Act which was adopted in 1963. According to the Section 2 of Limitation Act, 1 963, “period of limitation” is defined as the period set for any suit, appeal or the application as prescribed by the respective Schedule. A Schedule, under the Limitation Act, 1963 is mainly based on the description of suits. The time from which the period begins to start is also clearly specified in the Schedule. The Act sets a period of time in which a legal action must be taken, starting from the time the cause of action arises, up to which the cause of action is done. With 137 descriptions, the suits are divided into three divisions.  According to the description of the suit, the time for the starting of the limitation period differs from suit to suit. It can be from 10 days up to the time of 30 years. (India Code, Limitation Act, 1963)

What is IBC?

A situation in which a debtor cannot pay his creditor back is known as Insolvency and when a legal declaration is made for Insolvency, it is known as bankruptcy.

Not every business can make it, which necessitates the process of corrective measures. The Insolvency and Bankruptcy Code enacted in 2016, ensures a certainty in the process of insolvency, the course to be followed to resolve the matters, and once bankruptcy has been determined, having the course of action to be followed to settle that issue as well. It makes a very clear differentiation between bankruptcy and insolvency — the former being a long-term notion on the business, while the latter is the short-term incapacity to meet liabilities during the ordinary course of businesses. The IBC works to consolidate and amend the laws related to reformation and insolvency resolution of corporate persons, individuals and partnership firms in a time and in a manner for maximum valuation of assets of these persons, to encourage entrepreneurship, to set up IBBI (Insolvency and Bankruptcy Board of India), as well as other matters connected. (Ministry of Corporate Affairs, Insolvency and Bankruptcy Code, 2016)

The Point Of Contention

Since the conception of the code, it has been made use of by more than a few creditors to claim their monies or debts. With so many cases related to the matter, it is not unexpected to have questions raised. The code has gone through amendments to resolve the issues. But still several matters persist. One of the main issues which have been in mainstream is the applicability of Limitation Act on IBC. What actually forms the point of dispute is the matter of time-barred debts. This question has been raised in number of cases. There is no specific provision which makes the act applicable on IBC.

Case Laws

National Company Law Tribunal

One of the first decisions of NCLT, so as to discuss the admission of time-barred debt was the decision of the adjudicating authority in the case M/s. Prowess International Private Limited v. Action Ispat and Power Private Limited. In the held decision, the Bench said that the provisions of the Limitation Act would be made applicable to proceedings under the I&B Code, and any claim that was barred by time, being unenforceable, could not be deemed by the NCLT

Similarly, in M/s Deem Roll -Tech Limited vs. R.L. Steel & Energy Ltd and Sanjay Bagrodia vs. Satyam Green Power Pvt., the NCLT (Shah, 2017) Delhi held that the provisions of Limitation Act would be applicable to the IBC.

In the Deem Roll Case, the question about the initiation of CIRP for a time-barred claim was put forwarded before the Principal Bench of NCLT. The bench took the view that the period of limitation would be applicable because the claim made by the operational creditor was barred by the limitation act i.e. of 3 years. And therefore cannot be made the basis for evoking IBC before the Tribunal. A similar view was taken by the NCLT Bench in the Sanjay Bagrodia Case. By the plain reading of the Subsection 6 of section 60, IBC, it was again held that the Limitation Act is applicable on the proceedings under IBC, 2016.

However, in Machhar Polymer Pvt. Ltd. v. Sabre Helmets Pvt. Ltd. and PCI Ltd. Vs. Ashimori India Pvt. Ltd., the Tribunals have affirmed that the Limitation Act would not be applicable to IBC. It was also observed by the Bench that the delays and the laches will also have to be accounted for. (Sharma, 2018)

The Case of Neelkanth Township and Construction Pvt. Ltd. Vs. Urban Infrastructure Trustees Ltd. An appeal was filed by Neelkanth Township & Construction Pvt. Ltd. (corporate debtor) against the order of the National Company Law Tribunal (NCLT) which allowed the commencement of insolvency proceedings on the action of Urban Infrastructure Trustees Ltd (the financial creditor).  The latter had subscribed to the optionally convertible debentures (OCDs) issued by the Neelkanth Township & Construction Pvt. Ltd. Which matured in years 2011, 2012 and 2013. The Appellant challenged the order on numerous grounds, one of which was that, that the time-barred debt cannot be enforced by the filing of an application for CIRP (Corporate Insolvency Resolution Process). It was contended that the claim of the respondent is time-barred as the Debenture Certificates were due for redemption back in the years 2011, 2012 and 2013 respectively; the limitation period of 3 years for seeking the remedy for the debenture certificates had already expired. Therefore, the application filed in the year 2017 is time-barred.

National Company Law Appellate Tribunal

The NCLAT Bench had dismissed the appeal on the basis that there is nothing on the record to prove that provisions of the Limitation Act would apply to the I and B Code and held that that in the absence of any provision in I & B code, the Limitation Act, 1963 would not be applicable to initiation of CIRP. The bench further added that the IBC is related to the commencement of Corporate Insolvency Resolution Process, and is not the Act for the money claim recovery.

If there is a debt which includes interest and there is a default of debt and having a continuous course of action, the argument that the claim of money by Respondent is barred by Limitation cannot be accepted. This ruling of the NCLAT is in agreement with the propounded purpose of the Code i.e. it is not a medium or a tool for the debt recovery but it is a platform for reestablishing and revival of businesses which cannot be denied just because the claim is time-barred and there cannot be default in the respect of the same. The decision of the Tribunal and the Appellate Tribunal was challenged by the Petitioner in the Supreme Court of India. Further ambiguity was created by the decision of the Hon’ble Supreme Court. The Supreme Court dismissed the appeal on the basis that there was no merit in the appeal, therefore there was no reason to interfere with NCLAT Judgment. The answer to the question of applicability of the act on the code has been left open-ended by the Apex Court.

The same disputation was again raised in the case of Black Pearls Hotel Pvt. Ltd v. Planet M Retail Ltd. The issue whether or not the period of limitation prescribed under Limitation Act 1963 is applicable to I and B code 2016 was examined by the National Company Law Appellate Tribunal. The NCLT had dismissed the application of Insolvency mainly on the basis that the debt was time-barred under the Limitation Act. The NCLAT said that if the Limitation Act was even made to be applicable, then the period would only be initiated from December of 2016.

Furthermore, another NCLAT judgment in the case Speculum Plast v. PTC Techno, November 2017 had addressed the ambiguity while holding that the Limitation Act is not applicable to I&B Code. Restating the non-applicability of the Limitation Act, the NCLAT had relied on the decision of the Apex Court in M/s. Innoventive Industries Ltd. vs. ICICI Bank & Anr. It was held that the IBC is a complete code in itself, as clearly evident by the Legislative intent, the Statutory framework and as well as the principles driving the design of the said Code. And since IBC is considered a special law and a complete code in itself, even after the absence of an express omission of the Limitation Act, courts can examine its provisions to assess whether or not the Limitation Act is essentially excluded as held in Hukumdev Narain Yadav v. Lalit Narain Mishra.  (NCLAT, New Delhi, 2017)

Though the judgment on the Speculum Case had been stayed by the Supreme Court in an appeal filed against the NCLAT, on January 10, 2018, in matter of B K Educational Services Private Limited v. Parag Gupta.

The NCLT, in this case, held that documents submitted by Applicants were not justifiable for the purpose of extending the limitation. So, the amounts as stated by the petitioner are not legally recoverable. Although the liability sum which was given on 25 February 2015, it was at liberty to be recovered. The NCLT held that there were no need of further actions and had disposed of the application. The order was challenged by the Financial Creditor, who appealed against the NCLT order before the NCLAT. Opposed to the NCLT order, the NCLAT held that the Limitation Act provisions were not applicable for the commencement of Corporate Insolvency Resolution Process (CIRP) under the Code and further passed the order to accept the application for initiation. Resultant upon this, the Apex Court had stayed the order of the NCLAT dated 7 November 2017. The Supreme Court held the provisions of the Limitation Act applicable for initiation of Corporate Insolvency Resolution Process. (B.K Educational Services Pvt Ltd v. Parag Gupta And Associates, 2018)

Conclusion

As we observed above, that applicability has been interpreted on the warrant of each case which has led to the perplexity. Due to the confusion in this regard, on 16 November 2017, the Insolvency Law Committee was set up, which deliberated on the above issue and agreed that the intent of the Code is not to give a new lease of life to debts which are time-barred.

The Committee on the basis of observations gave the recommendation that it would be fitting to insert a particular section about the application of the Limitation Act to the Code, under which the Limitation Act would be on a case to case basis. However, in the lack of such explicit provisions in the Code, the creditors would get a right to make an application for time-barred debts too. Which necessitated for more clarity relating to entry under the Limitation Act as it is imprecise and criteria is not recommended, which once again leaves the issue ambiguous. (Novojuris, 2018)

At the end, it is necessary to for the Adjudicating Authority to make the interpretations of the respective statutes in such a way, so as not to make the provisions superfluous. It is, after all, imperative to respect the legislative intent and not to render any of the provision redundant.

In this article, Akash Kori discusses the cyber laws in India.

Introduction

Cybercrime refers to crime in which a computer is the object of a crime (hacking, phishing, spamming) or used as a tool for committing an offence such as child pornography, hate crimes etc. Cybercriminals may use a computer to gain access to personal information, trade secrets or for any other malicious purposes (See Here). Cybercrime can be first-rate described as those offences which are dedicated against individuals or companies of individuals with a criminal reason to deliberately harm the recognition of the victim or reason bodily or intellectual harm to the victim without delay or indirect usage of present day telecommunication networks including the internet.

In a simple manner, we are able to say that cyber crime is illegal acts wherein the computer is either a device or a target or each. Cyber crimes can involve criminal activities which might be conventional in nature, such as robbery, fraud, forgery, defamation and mischief, all of which are questionably to the Indian penal code (IPC). The abuse of computer systems has additionally given a start to a gamut of new age crimes which might be addressed by the Information Technology Act, 2000. The time period ‘cybercrime’ can discuss with offenses inclusive of criminal past against information, infringement of content and copyright, fraud, unauthorized access, child pornography and cyber-stalking. Cybercrimes in effect cover an extensive variety of assaults on individuals and organizations alike. These crimes can also encompass something from an individual’s emotional or financial state to a nation’s protection.

There are fundamental classes that outline the makeup of cybercrimes. The first of those that aim on computer networks or gadgets including viruses, malware, or denial of service attacks. The second one relates to crimes which might be facilitated through computer networks or gadgets like cyber-stalking, fraud, identity-robbery, extortion, phishing (junk mail) and robbery of categorized information.

Cyber crimes have increased to embrace sports that go international borders and might now be considered a worldwide epidemic. The global felony device ensures cyber criminals are held responsible for the international criminal courtroom. Law enforcement organizations are confronted with specific challenges and the anonymity of the internet only complicates the problems. There are problems with accumulating proof, cross-jurisdictional troubles and miscommunication associated with reporting.

To a great extent it is well known that victims of net crimes are often indisposed to record an offense to authorities. In some cases, the man or woman or business enterprise won’t also be aware against the law has been committed. Despite the fact that facilities for reporting incidents of cybercrime have advanced in recent years, many victims remain reluctant due basically to embarrassment.

Global cooperation is essential if an effective reaction is to be located against international cyber crime. No state can assume to productive fight the problem alone. Many computer based crimes are initiated ‘offshore’ and this offers considerable demanding situations to any international locations law enforcement groups. It’s far essential that companies from around the world, formulate actionable plans to dig up, chase, and execute cyber criminals.

Cyber Crime In India

When the internet was developed, the founding fathers of the internet hardly had any inclination that the internet should rework itself into an all pervading revolution which might be misused for criminal activities and which required regulation. Nowadays, there are many annoying things going on in our online world. Due to the anonymous nature of the internet, it’s miles viable to interact into an expansion of criminal activities with impunity and those with intelligence, have been grossly misusing this element of the internet to sustain criminal activities in our online world.

Cyber law is crucial as it touches nearly all aspects of transactions and sports on and regarding the internet, the world huge net and cyberspace. To begin with, it may appear that a cyber law is a totally technical area and that it does not have any bearing to maximum activities in cyberspace. But the actual fact is that not anything can be in addition than the reality. Whether we recognize it or no longer, every action and every reaction in our online world has a few criminal and cyber legal views.

Information technology has unfolded for the duration of the arena. The computer is used in each and each quarter in which cyberspace provides equal possibilities to keen on financial growth and human improvement. As the consumer of cyberspace grows increasingly more numerous and the range of online interplay expands, there is enlargement within the cyber crimes i.e. Breach of online contracts, perpetration of online torts and crimes etc. Due to these outcomes, there has been a need to undertake a strict regulation via the cyberspace authority to alter criminal activities referring to cyber and to provide higher administration of justice to the victim of cybercrime. Inside the modern-day cyber technology, global it’s miles very an awful lot necessary to alter cyber crimes and most importantly cyber law ought to be made stricter inside the case of cyber terrorism and hackers.

Does Cyber Law Concern Me?

Yes, Cyber Law concerns me. Cyber law is any law that applies to the internet and internet associated technologies. Cyber law is one of the most recent areas of the criminal system. That is because internet technology develops at any such rapid tempo. The cyber law offers legal protections to people involved with the use of the internet. This consists of both agencies and normal residents. An expertise cyber regulation is of the utmost significance to every person who uses the net. Cyber regulation has also been known as the “regulation of the net.”

Cybercrime And Cybersecurity

The idea that a Criminal group ought to electronically take control of flight manage device or power grid – Yes it is possible.

As the whole thing connects to the internet we emerge as increasingly more liable to cybercrime. In February, the sector observed out that the Cabana criminal organization had stolen up to INR 64, 15, 50,000 /- from banks round the arena during the last two years, hacking into their systems, transferring cash out, and having bank ATMs mechanically dispense cash that they then picked up from the machines.

Inside the beyond decade, advances in communications technology and the “informatization” of society have converged as never earlier than in human records. This has given upward push to the industrialization of a type of crime where the commodity—private records—actions always too quick for traditional regulation enforcement techniques to keep tempo.

The extraordinary scale of the problem threatens the ability of the authorities to reply—with more than a hundred and fifty,000 viruses and other varieties of malicious code in international stream and 148,000 computer systems compromised in step with day. At the equal time, the authorities have greater records on crook hobby at their disposal than ever before and also have an opportunity to harness this information in ways that make intelligence improvement and research greater streamlined and cost-powerful.

Beginning Of The Cybercrime Era

It is simply that the democratization of technology offers the one same gear to folks that might use them for sick, and lots of us don’t realize just how susceptible we are and how much greater inclined, we come to be as we tie the entirety to computer systems. “What most people don’t quite understand is that we are in the first seconds of the first minutes of the first hours of the internet revolution, and there may be an exquisite change coming in this century.”

“These days some of these computers are hackable, which means that the 21st-century current global that we’re constructing is a digital residence of playing cards that may come crashing down at any second. We need to defend it because right now, we do not have a backup plan.”

It isn’t always unusual for teens and younger humans to get worried in cybercrime sports at an early age. Many do it for a laugh without realizing the consequences in their movements – but the consequences may be excessive. Cybercrime isn’t a victimless crime and is taken extraordinarily critically through regulation enforcement. The teens that come to be involved in cybercrime often have an ability set that would be put to an effective use. Abilities in coding, gaming, computer programming, cyber safety or whatever it-associated is in excessive demand and there are numerous careers and possibilities available to all of us with a hobby in those areas.

Consequences

Young humans getting concerned with cyber crime ought to face.

• A go to and warning from the police, in addition to a penalty fine.
• Arrest and prison sentencing for severe offenses.
• Their computers being seized and being avoided from having access to the internet.

Many children may have an energetic interest in coding and programming, spend loads of time online and have impartial studying materials; those are all signs and symptoms of a wholesome and effective hobby in computing and extraordinarily valuable competencies to be endorsed to expand – but in a lawful way.

Terrorist, Hackers, Crackers & Jurisdictional Issues

Hackers tend to be more of a nuisance than a danger. Most of the time, they try unauthorized access to networks just to mock, for the challenge, or to put networks to a test. Crackers, however, are criminal hackers that also try unauthorized access to networks, but have malicious intents. Cyber terrorists are people that use cyber terror to achieve political or social change.

With motives, it is not in all likelihood that terrorists would rent crackers. However, it is not impossible for terrorists to benefit hacking competencies something motivation or purpose leads one individual (or a set) to hack into a community gadget, be it hacking, cracking or terrorism, the same jurisdiction problems are present to the investigator and to the choose. Obtaining evidence of the motion, detaining the suspects and supplying them to a courtroom can simplest to be executed with brief response and the ideal worldwide equipment.

Cyber Attack Threat Types

Threat 1

One or more outlander (worthless persons) who seek access to base or restricted area or get undercover to perform an unauthorized act such as demolishment or theft.

Threat 2

The particular group authorized access to a base or restricted area or asset, seeking to steal or remove an item of authorized property from the installation.

Threat 3

An anonymous individual seeking to perform an act of sabotage, data tampering, or wrongful destruction or otherwise destroy government property or impair mission accomplishment.

Threat 4

An anonymous individual or group seeking to make a political statement (anti military, anti defence, antinuclear, and so forth, by causing adverse broadcast, usually non violent in nature, to grip the military service).

Threat 5

An anonymous individual in theorizing action seeking access to a naval installation to commit an act of violence (sabotage, bombing, hostage abduction, murder, arson or theft of sensitive matter including nuclear weapons, ammunition and explosives, and so forth.

Cyber Terrorists

For Cyber Terrorists this is a good desirable quality or feature, it helps them to make something better or more likely to succeed:

•           Affects substantial amount of citizens.
•           They can be Anonymous.
•           It is ultra-cheap than conventional methods
•           Its activity is very puzzled to study
•           They can attack remotely from any part of the country zone
•           This can be utilized to affect large number of MNCs and targets.

How legal system deals with Cyber Terrorists

The majority use passwords which might be based on personal analysis and are easy to bear in mind. However, that still makes it simpler for an attacker to wager or “crack” them.

Even though willed misspelling a diction (“callerrrt” rather than “call”) can also provide a few safeties in opposition to dictionary attacks, an even better technique is to rely upon a series of phrases and use grip techniques, or mnemonics, that will help you flashback a way to decode it.

As an example, rather than the password “locomotive” use “LocO|\/|oT|ve” for another example “my personal stuff” use, “me#//personalstuff123P”, although, is to use a mixture of numbers, special characters, and each lowercase and capital letters.

The following preventative strategies are supposed to assist our public and personal companions proactively search for emails trying to mislead users into “clicking the hyperlink” or establishing attachments to apparently real websites:

• Links should never be clicked in emails, in case you think email is authorized, whether from a third party exchange or primary exchange, go to the web page and go online at that moment itself. Any notification that carrier transmitted was referenced inside the electronic mail email, if valid, can be available via regular go browsing.
• Never open the attachments commonly, retailers will never send emails with attachments. If there is any doubt, hold the store directly and ask whether email with the attachment was dispatched from them.
• Do not give out confidential information over the phone or in an email until completely sure. “Social engineering” is a procedure of spoofing people into providing confidential records to seemingly trusted marketers who become malicious actors. If contacted over the cell phone by a person claiming to be a store or agency, no longer convey out your confidential analysis.

Other Conspicuous hand to guard yourself from cyber attacks:

• Set cozy passwords and, keep away from the use of common words, phrases, or private records and update frequently.
• Maintain your personal device’s computer’s browser, anti-virus and different essential software up to date. Protection updates and patches are available without spending a penny from predominant groups.
• Be fishy of strange hyperlinks or requests dispatched via email or textual content message. Do no longer click on unknown links or answer odd questions sent to your mobile tool, without thinking about or considering.

Cyber Crime Attacks Addressed By IT Act, 2000 & IPC

Cyber Crimes under IT ACT 2000

• Sec. 65, Tampering with Computer Source Documents.
• Sec. 66, Hacking Computer Systems and Data Alteration.
• Sec. 67, Publishing Obscene Information.
• Sec. 70, Unauthorized Access of Protected Systems.
• Sec. 72, Breach of Confidentiality and Privacy.
• Sec. 73, Publishing False Digital Signature Certificates.

Special Laws and Cyber crimes under the IPC include:

• • Sending Threatening Messages by Email, Indian Penal Code (IPC) Sec. 503.
  • Sending Defamatory Messages by Email, Indian Penal Code (IPC) Sec. 499
  • Forgery of Electronic Records, Indian Penal Code (IPC) Sec. 463
  • Bogus Websites & Cyber Fraud, Indian Penal Code (IPC) Sec. 420
  • Email Spoofing, Indian Penal Code (IPC) Sec. 463
  • Web-Jacking, Indian Penal Code (IPC) Sec. 383
  • Email Abuse, Indian Penal Code (IPC) Sec. 500

There are also cyber crimes under the Special Acts, which include:

• Online Sale of Arms Under Arms Act, 1959
• Online Sale of Drugs Under Narcotic Drugs and Psychotropic Substances Act, 198

Types Of Cyber Attacks- A Look Inside Cyber Terrorist Toolkits

When a criminal is making an attempt to hack a corporation, they may not reinvent the wheel until they clearly need to: they may draw upon a commonplace arsenal of attacks which might be regarded to be enormously powerful. Right here’s a top level view of some of the maximum commonplace sorts of attacks seen these days.

• Credentials Reuse

Account credentials are leaked from one internet site, and due to the fact individuals have used the equal or comparable passwords on a couple of web sites, the ones accounts get compromised too. It is referred to as a password reuse attack, and it is turning into more and more common.

• Cross-Site Scripting (XSS)

Cross-web page Scripting (XSS) refers to client-side code injection attack in which an attacker can execute malicious scripts (additionally, typically known as a malicious payload) right into a legitimate internet site or internet software. XSS is amongst the most rampant of internet software vulnerabilities and takes place while an internet software uses invalidated or uuencoded user input within the output it generates.

If an attacker can misuse a XSS susceptible on a web net web page to execute arbitrary JavaScript in an individual browser, the security of that internet website or internet software and its individual has been compromised – XSS isn’t the individual trouble, like a few different safety vulnerabilities, if it’s affecting your individual, it’s going to have an effect on you.

• Denial of Service (DoS) & DDoS attack – Distributed Denial of Service

DoS A kind of attack on a community this is designed to carry the network to its knees by flooding it with idle visitors. Many DoS attacks, along with the Ping of loss of life and Teardrop assaults, make the most obstacles within the TCP/IP protocols. For all recognized DoS attacks, there are softwares which fixes system administrators. However, like viruses, new DoS attacks are continuously being dreamed up via hackers.

DDoS is short for distributed Denial of service. DDoS is a kind of DOS attack in which multiple compromised systems, which might be frequently infected with a Trojan, are used to goal a single device causing a Denial of provider (DoS) attack. Sufferers of a DDoS attack encompass each the quit targeted system and all structures maliciously used and managed via the hacker within the allotted attack.

Difference Between DoS And DDoS Attacks

A Denial of service (DoS) assault is different from a DDoS attack. The DDoS attack makes use of more than one computer systems and internet connections to flood the focused useful resource. DDoS attacks are frequently international attacks, allotted via botnets.

• Malware

In case you’ve ever seen an antivirus alert pop up on your Computer display, or in case you’ve mistakenly clicked a malicious email attachment, then you definitely have had a close call with malware. Attackers love to apply malware to advantage a foothold in individuals’ computers—and, therefore, the workplaces they work in—due to the fact it may be so powerful.

“Malware” refers to numerous types of harmful software program, which includes viruses and “ransomware”. As soon as malware is injected pc, it can wreak all varieties of havoc, from taking control of your system, to tracking your movements and keystrokes, to silently sending all kinds of private information from your Personal Computer or network to the attacker’s domestic base.

Attackers will use an expansion of strategies to get malware into your personal computer, but at a few stage it frequently calls for the user to take an action to install the malware. This may encompass clicking a hyperlink to download a document, or establishing an attachment which could look innocent (like a word file or PDF attachment), however, surely has a malware installer hidden within.

• Phishing

Phishing is a fraudulent attempt, generally made via email, to steal your private records. In a phishing attack, an attacker may additionally send you an email that looks to be from a person you believe, like your boss or an organization you do commercial enterprise with. The e-mail will seem valid, and it’s going to have some urgency to it (e.g. fraudulent hobby has been detected to your account). Inside the e-mail, there can be an attachment to open or a link to click. If you click the link, it could ship you to a valid-looking website that asks for you to log in to get admission to an essential report – besides the website is certainly an entice used to seize your credentials while you try to log-in.

• Session Hijacking and Man-in-the-Middle Attacks

The session between your pc and the faraway web server is given a completely unique session identification, which must stay private between the two parties; but, an attacker can hijack the session through shooting the session identity and posing as the computer making a request, letting them log in as an unsuspecting user and advantage gains admission to unauthorized records on the web server. There are a number of techniques an attacker can use to steal the session identity, which includes a cross-website scripting attack used to hijack session IDs.

An attacker also can prefer to hijack the session to insert themselves between the inquiring for computer and the faraway server, pretending to be the alternative party inside the session.

• SQL Injection attack

SQL stands for “structured query language”; it is a programming language used to communicate with databases. Among the servers that save crucial records for websites and offerings use square to control the data in their databases. SQL injection attacks especially this type of server, the usage of malicious code to get the server to disclose records it generally wouldn’t. This is particularly complex if the server department deposits private individual’s records from the internet site, consisting of credit score card numbers, usernames and passwords (credentials), or different personally identifiable information, which might be tempting and money making objectives for an attacker.

Cyber Law And Intellectual Property

Intellectual belongings are an extensive class of regulation regarding the rights of the proprietors of intangible merchandise of invention or creativity. As an example, IP regulation grants distinct rights to share owners of artistic works, Technological inventions, and symbols or designs. Subcategories of IP regulation encompass patent, copyright, Trademark, and change secrets and techniques. IP attorneys work in litigation, licensing, generation transfer, project capital, IP asset control, and trademark and patent prosecution. IP is a hastily expanding field that gives growing process possibilities for legal professionals. In 1985, 32% of the Marketplace cost of S & P 500 businesses changed into primarily based on intangible property, mainly a few shapes of intellectual Belongings. In 2005, those belongings represented almost 80% of the same businesses’ marketplace fee. 1 IP, Therefore, plays an increasing number of essential positions in commercial enterprise; correspondingly, its regulation and observe has an ever-larger region in government, nonprofits, and academia. There are numerous sub-specialties of IP regulation, inclusive of patent, copyright, trademark, alternate secrets, and Generation switch, and many roles that lawyers can play in each.

Copyright

That is the main shape of IP cyber regulation. Copyrights offer protection to nearly any piece of IP you could transmit over the internet. This may encompass books, song, movies, blogs, and much extra.

Patents

Patents are normally used to guard an invention. Those are used on the net for two most important motives. The primary is for new software. The second is for new online commercial enterprise strategies.

Trademarks & Service Marks

Trademarks and carrier marks use the identical online as they’re within the real world. Logos may be used for websites. Carrier marks are used for web sites that provide services.

Trade secrets and techniques

Trade mystery laws are used to guard more than one type of IP. This includes formulation, patterns, and methods. Online organizations can use exchange mystery protections for many reasons. However, it does not save you opposite engineering.

Domain disputes

This is related to logos. Specially, domain disputes are approximately who owns an internet deals with. For example, the person who runs an internet site might not be the individual that owns it. Additionally, because domains are cheap, some people purchase multiple domain names hoping for a big payday.

Contracts

The majority does not assume contracts observe on-line. This is not the case. For instance, when you check in for a website, you commonly must agree to terms of carrier. That is a contract.

Privateness

Online corporations are required to shield their consumer’s privacy. The specific law can rely on your enterprise. Those laws emerge as extra crucial as more and more data is transmitted over the net.

Employment

Some employee settlement terms are connected to cyber regulation. This is especially proper with nondisclosure and noncompete clauses. Those clauses at the moment are frequently written to consist of the net. It could additionally encompass how employees use their company e-mail or other digital assets.

Defamation

Slander and libel regulation has additionally wished updating because of the internet. Proving defamation has changed into now not altered substantially; however, it now consists of the internet.

Data retention

Handling statistics are a number one challenge in the internet age. An area in which this has emerged as a big difficulty is in phases of litigation. In court cases, it’s far now common to request electronic facts and bodily records. But, there aren’t any cutting-edge legal guidelines that require retaining digital statistics for all time. This is not true for bodily records.

Jurisdiction

Jurisdiction is a key part of the court docket case. Cybercrime has complex this problem. If a cybercriminal places in Minnesota and their victim is placed in North Carolina, which kingdom has jurisdiction? Distinctive states have exceptional guidelines about this difficulty. Also, it is able to depend upon in what court docket, federal or kingdom, a case turned into field.

Protecting IP can be tough over the net. An example of this would be the popularity of pirated movies and song. Each business that is based on the net desires to develop strategies for shielding their IP. Governments can also take part in this technique. In 1999, India did just this by updating their IP laws.

Cyberlaw- Terms And Laws

• Statistics technology regulation

Those laws confer with digital statistics. It describes how this record is amassed, stored, and transmitted.

• Cyber regulation/net regulation:

Those laws cover utilization of the net. That is a more modern legal regime. Many legal guidelines can be undefined and vague.

• Computer law

This covers large legal vicinity. It consists of both the net and legal guidelines related to laptop IP.

There had been many countries that have attempted to fight cybercrime with cyber laws:

Computer misuse act 1990 (Great Britain)

This law is primarily centered on information and computer structures. It includes three sections. Section 1 makes a specialty of the unauthorized use of a laptop (hacking). Segment 2 covers situations where a section 1 violation has come about and similarly offenses are in all likelihood. Phase 3 is for when a computer is altered illegally. This is generally due to a virus or denial of provider act.

It acts of 2000 (India) This act is centered on records era. This law, both outlines offenses like hacking and trojan assaults, as well as possible solutions. One phase outlines using digital signatures to improve cybersecurity. Some offenses can compound. This increases their ability punishment.

The center east and Asia

Nations across these regions use combinations of cyber laws. In certain international locations, these laws are used to save you citizens from gaining access to positive information. Different legal guidelines associated with cyber law that have been passed by means of countries around the arena encompass digital signature legal guidelines, records era recommendations, and records technology legal guidelines.

Cyber law has additionally been used to create privateness. That is in particular genuine inside the USA. U.s. Legal guidelines which have been used to establish net privacy include the following:

• Warren and Brandeis.
• Reasonable Expectation of Privacy Test.
• Privacy Act of 1974.
• Foreign Intelligence Surveillance Act of 1978.
• Electronic Communication Privacy Act.
• Driver’s Privacy Protection Act.
• Gramm-Leach-Bliley Act.
• Homeland Security Act.
• Intelligence Reform and Terrorism Prevention Act.

Movement: Cyber Law

Cyber law is growing in significance every single year. This is because cybercrime is growing. To combat these crimes, there were current trends in cyber regulation.

Developing recognition of these issues will be a number one focus of governments and cyber law organizations in the very close to future. India, as an instance, funded cyber trend studies initiatives in each 2013 and 2014. Similarly, India held a worldwide conference associated with cyber law in 2014. This turned into supposed to promote cognitive and international cooperation.

In this blog post, Akanksha Misra, of Symbiosis Law School, NOIDA discusses the basics a law student needs to know before doing an internship in litigation.

Litigation Internship

Before doing an internship, there are certain things that law students need to be well aware of. There are students who go forward with their internship without knowing the basics which gives them a hard time when they are struck with various doubts and as the time goes by it only makes it troublesome. So it is always better to catch up with the necessary information which would only make your internship smoother and without burden. This information consists of the working of the court, as well as about your personal goals and reasons for opting for the internship.

The following points need to be kept in mind by any law student intending to work at a district court-

1. Basic Substantive And Procedural Laws

Before the internship begins, it is important to have some knowledge about the Procedural Law- the procedures of the court, that is, the methods, practice and procedure followed by the courts for cases. This is a step by step process which determines the procedure of all the lawsuits and how a case is to proceed in order to achieve the justice desired. For example- Criminal Procedure Code, Civil procedure Code, Evidence Act. An intern needs to be aware of the working of the court and the format of the proceedings such as filing of a plaint, Vakalatnama, written statement, replication, the framing of issues and final hearing and so on.

Substantive Law also needs to be taken into account where the student needs to go through the statutory law which defines the rights, duties and liability of the people. It is generally concerned with the facts of the given cases and thus helps in either helping or suing somebody. The rights and wrongs of the cases are measured which later helps to decide the case. Indian Contract Act, 1872 and Indian Penal Code, 1860 are some substantive laws. Knowing a few basics of these are essential to understand and aid the learning of a law student to know.

2. Hierarchy And Structure

The judiciary in India follows a vertical system of administering justice. The court hierarchy begins with the Supreme Court at the top, followed by the High Court at the state level and District Courts at the district level & other judicial bodies.

The apex court in the hierarchy is the Supreme Court of india located in New Delhi. It is the highest judicial forum and the final court of appeal. It also acquires the power of constitutional review. Citizens can directly approach the court for any violation of their fundamental rights. Articles 124 to Article 147 fixes the jurisdiction and composition of the SC. It enjoys power in form of various jurisdiction- original, appellate and advisory jurisdiction. This court consists of the Chief Justice of India and 30 sanctioned other judges.

Followed by the Supreme court, each Indian State has its own High Court. They are governed by Article 141 of the Constitution of India. There are 24 high courts in India which take care of their region. The appointment of judges of HC is being executed by the President of India with the consultation of the Chief Justice of India, the Chief Justice of the respective High Court and the governor or the lieutenant governor. The number of judges in High Court is mainly dependent on the higher number of either the average of an organization of main cases for the last years as per the average nationally calculated or the average rate of main cases disposed of per judge per year in the respective high court.

There are various levels involved in the structure of a district court. There are different courts involved based on the nature of the case- District and Sessions, where for the civil cases the court is called the District Court, and for the criminal cases, it is called Court of Sessions. The District and Sessions Judge is referred to as the District judge when presiding over a Civil case and Sessions Judge when taking over a criminal case. Below the court of the District Judge are the courts of Sub-judge, Additional Sub-Judge and, Munsif Courts, which are located in the sub-divisional and district headquarters. Most of the cases are filed in the Munsif Court. On the other hand, the courts below the Sessions court are that of Judicial Magistrate (First Class) and Judicial Magistrate (Second Class).

3. Jurisdiction

The Courts have been categorized on the basis of various types of jurisdiction such as-

• Subject Matter Jurisdiction– Only the courts dealing with the said subject can deal with such cases. For example- Family Court is competent to decide matters and make orders in relation to family law.
• Territorial Jurisdiction– This type of jurisdiction refers to the court’s authority and power over cases and events arising in or involving persons residing within a particular geographical territory. For example- there are three District level courts in the Delhi region- Patiala Court, Karkardooma and Tis Hazari. These courts are on a horizontal level, i.e., have the same powers but are divided territory wise. Cases pertaining to South Delhi, New Delhi and West Delhi go before Patiala House, North Delhi cases to the Tis Hazari and East Delhi cases to Karkardooma.
• Pecuniary Jurisdiction– Pecuniary jurisdiction refers to the ability of a Court to hear matters depending upon the valuation of a particular case. This jurisdiction divides the court on a vertical basis. Currently, suits amounting from Rs. 1 to Rs. 20,00,000 lie before the district court. Above this amount, the suits lie to the High court.
• Original Jurisdiction and Appellate Jurisdiction- Original Jurisdiction of a court is the power to hear a case for the first time whereas Appellate Jurisdiction refers to the power of a high court in order to review a lower court’s decision. In case of district courts, they exercise the original and appellate jurisdiction in the civil and criminal cases arising in their district. Appeals from its subordinate courts lie to the District Court. Article 226 of the Constitution of India vests in the High Court the power to issue writs for the restoration of fundamental rights. It also extends to the matters of admiralty, probate, matrimonial and contempt of cases. On the other hand, the Supreme Court exercises original jurisdiction exclusively to hear the cases of disputes between the Central Government and State Government or the interest of the States.

4. Courts and few things to know!

SUPREME COURT

Supreme court is known for its professional and cordial environment. There is a whole different pride while walking into the lanes of this top court which receives cases with more intense nature. Anyone looking forward to a future in litigation wishes to practice at the Supreme Court of India because there is an honour that comes along with it. While interning here, one would thoroughly enjoy observing the proceedings and getting to know the judges’ response to the advocate’s argument.

For those intending to intern at the Supreme Court should know that there are two types of advocates on can intern under- Advocate on record (AOR) and Senior Advocate (SR). There are also different ways to apply to them, either through applying for it directly (mail or visit) or personal contact. It is also important for one to know that securing an internship under an AOR is comparatively easier than a Senior Advocate. This is because SRs are generally busier due to a number of cases and there is usually no vacancy so if one is hoping to intern under them, it is better to apply 6 months to even a year in advance.

HIGH COURT

There is not much difference between interning at the Supreme Court or High court and it is similar in a lot of ways. It is a magnificent and an ever vibrant experience to intern at the High Court. It is necessary to complete all the required formalities to avail the monthly pass and conform to the protocol. The official timings of the high courts are from 10 AM to 5 PM. One of the biggest advantages of interning here is that it helps in learning the varied skills of advocacy by observing some of the top advocates put forward their arguments. One may also get to interact with the lordship which would help understand their perspective and gain a judicial insight.

DISTRICT COURT

From my personal experience, most district courts do not offer the best work environment and you would wonder where you have arrived. There are endless chambers in a line of various advocates. Surrounding the chambers are roadside stalls of typists, notary, stationers, etc. Inside the court building, one would come across families waiting for the court proceedings of their loved ones to begin, police officers taking criminals in handcuffs, and of course advocates with their case files and other documents in their black coats. There is a distinct uniqueness to the place as most are in a rush and others waiting patiently for the seemingly never-ending court proceedings. There are many judges who are very hardworking and dedicated but there are also those who take frequent leaves and thus shift the court hearings to a future date.

Opportunity is often lost for networking due to the absence of fellow interns unless one is interning under a very sought after advocate. But of course, during the internship, one would connect with advocates and judges who would offer a lot to learn from. One’s internship experience would depend a great deal on the advocate they are interning under. It means whatever the intern is going to learn is from the sole advocate. If the advocate is encouraging and helps you know the basic things in a positive manner, it is going to be a great experience for you. But if quite the contrary, it can be very unfulfilling and major chunk of time would be consumed in just observing the court proceedings and reading of cases. Thus, the basic knowledge of the procedural and substantive law is necessary for the interns to know about.

The working of most district courts in India is in the State’s regional language except in the courts of Delhi. This may be difficult in the learning process for some interns as the technical law terminologies may seem hard in the regional language.

5. Personal Goals And Reasons

The important thing to know for every intern is to know why one wants to do a litigation internship. Reasons may differ from learning the law from the bottom level (in case of district court) to just securing an internship because it is needed. But before any internship, one must clearly define their goals and why they intend to intern at the court. For the first litigation internship, a district court is the best place because you can learn the reality of the law and can get to know the journey of the cases from the beginning and how to go all the way up. Internships help one understand the types of cases that are dealt with, their nature and the obstacles faced by advocated to get the best results out of the trial for their client. One would understand the hierarchy of the courts and their working, the attitude of the judges while dealing with the cases.

How to prepare for a litigation internship?

The importance of a litigation internship cannot be denied. It is of utmost value as it helps in gaining practical knowledge and insight into the legal world. As discussed, it is always better to know a few basics of what we want to move forward with and as in our case- a litigation internship. The best way to prepare for your internship is by gaining the fundamental knowledge of that field and this can be achieved by doing online courses.

How do Online Courses help in the preparation?

With the advent of technology, the ways of imparting education have changed immensely. There are now creative ways to help in the learning process of an individual and help them get well educated with great knowledge. The online courses are popular because they use creative ways to aid learning which eventually makes learning enjoyable. One also get to learn all they need from the finest in the industry equipped with decades of professional experience which is a big advantage because the knowledge and perception they provide is invaluable. Along with this, one learns all the critical skills with regular tests, case studies, and practical legal insights.

Which Online Courses will benefit law students looking forward to an internship?

There are various online courses offered by top universities and organizations. Some of them have been mentioned below-

1. Diploma in Entrepreneurship Administration and Business Laws by Lawsikho

The Diploma in Entrepreneurship Administration and Business Laws course is an online 12-month long immersive program designed by National University of Juridical Sciences (NUJS), Kolkata and iPleaders to equip you with practical skills for the world of corporate law. This course is co-created, reviewed and constantly improved by an industry-academia panel. This course would build your ability to write and communicate in a way that showcases your expertise, expands your network and impresses recruiters. This course would help one help in the area of business litigation.

To know more about this course,

• LawSikho Diploma in Entrepreneurship Administration & Business Laws | Fee: INR 20,000 | Course Duration: 1 Year | Seats: 20 | To enroll: click here.
• LawSikho Diploma in Cyber Law, Fintech & Technology Contracts | Fee: INR 15,000 | Course Duration: 1 Year | Seats: 20 | To enroll: click here.
• LawSikho Diploma in M&A, Institutional Finance & Investment Laws (Including PE and VC Transactions) | Fee: INR 20,000 | Course Duration: 1 Year | Seats: 20 | To enroll: click here.
• LawSikho Diploma in Advanced Contract Drafting, Negotiation & Dispute Resolution | Fee: INR 20,000 | Course Duration: 1 Year | Seats: 20 | To enroll: click here.
• LawSikho Diploma in Intellectual Property, Media & Entertainment Laws | Fee: INR 15,000 | Course Duration: 1 Year | Seats: 20 | To enroll: click here.

How to ace your litigation internship?

In case you have the desire in you to make the most of every internship and show your amazing skill set, then it is possible to achieve through the ‘Ace Your Internship’ Certification Course. This course is made to help the law students achieve and succeed in the area of Corporate law and will enable them to secure corporate internships or get ahead in corporate litigation. This programme would help you acquire all the skills and knowledge base to reach great heights in the corporate area of practice. The course has been intelligently structured with the huge amount of detail from drafting an effective CV to the interview preparation- All in one! There will be weekly exercises to help you tackle the problem areas and get better in just five months.

The biggest advantage of this course is that it would help you perform a lot better than other interns. This would make a huge difference in the beginning of your professional career by helping you perform extraordinarily well so that you can get a job offer.

This is a highly recommended course, so do read more about it here.

Top 5 Litigation Internship in Delhi

1. Karanjawala & Co.

It is an eminent litigation firm based in Delhi. It is best known for its litigation work but has other practice areas as well such as Arbitration, Dispute Resolution and, Transactional and Corporate Advisory.

Some of the tasks for the interns would involve case law research and drafting a written statement, notices, memorandum of appeal, etc. As it is a litigation firm, interns would get to observe courtroom matters as well as the corporate culture. The firm takes up civil as well as criminal cases.

To apply, one can send their CV at [email protected]

The firm usually offers a stipend of Rs. 5000/- for a duration of 4 weeks.

2. Maheshwari and Co.

Maheshwari and Co. is a full-service law firm in Delhi. It is one of the fastest growing and leading Litigation and Dispute Resolution law firms. It has the experience in all types of Civil, Criminal and Corporate Litigation.

They have a structured internship programme The main tasks of the interns would generally involve law research.

Interested students can send their resume along with cover letter to the firm at [email protected]. Apply at least 45-30 days in advance from the date of commencement of the internship. Read more about their internship programme here.

There is no stipend offered as it is an unpaid internship for undergraduate, graduate and doctorate students.

3. Senior Advocate Harish Salve

Harish Salve is a senior counsel at the Supreme Court of India and a former Solicitor General of India. He is one of the premier lawyers and has also been awarded one of India’s highest accolades, the Padma Bhushan.

It is a great place to intern at where an intern would get to research and take notes of the court proceedings. It can be an of an immense learning experience as one would be exposed to some of the high profile cases in the country and would also get to see the strong work ethic of a top lawyer of the country!

To apply for the internship, mail your CV along with the cover letter to [email protected].

4. Chamber of Salman Khurshid

Salman Khurshid is a highly respected and renowned Senior Advocate. Chamber of Salman Khurshid was grounded in 2014 which has a team of associates who are highly efficient at providing legal representation across wide jurisdictions. The chamber deals with all kinds of matters pertaining to Supreme Courts to the lower courts.

The Chamber’s internship programme aims to provide students with the skill set to achieve successful legal career and become highly abled law practitioners. Interns are given work according to their area of interest. Their main tasks include research work pertaining to Constitutional Law to Company Law. There are briefing sessions convened by Mr. Khurshid where interns are also given a chance to make an argument and validate their stands. Mooting sessions are also conducted for interns to gain a trial experience of the court proceedings. Apart from this, interns also attend the court proceeding and get to observe the amazing opportunity to see Mr. Salman Khurshid argue.

For the purpose of applying, one can send their CV at [email protected]

A Stipend of Rs. 10,000/- is provided immaterial to the duration.

5. Chambers of Advocate Ram Jethmalani

Ram Jethmalani is a Senior Advocate at the Supreme Court of India. He has also served as the Union Law Minister and as Chairman of the Bar Council of India. As a lawyer, he has represented a wide number of cases which has raised controversy as well as earned accolades.

Main tasks for the interns include research work on matters listed for the following day. Also, conferences take place where the arguments to be taken up are presented and interns are required to attend the same. One would also get to see Mr. Jethmalani argue cases and the hard work & efforts that he puts in for the cases.

One can apply by sending their CV to [email protected]

Top 5 Litigation Internship in Mumbai

1. Dinesh D. Tiwari & Associates

Dinesh Tiwari & Associates, was established in the year 2008, with the objective of accomplishing its client’s expectations by targeting excellence in the quality of its work. At present, the firm is dealing in a variety of Civil & Criminal Litigation not only in Mumbai but all over the country.

Main tasks for the interns would involve drafting, observing court proceedings of High Court of Bandra, Metropolitan Magistrate Court, etc., attending client meetings and also visit Police Stations and Crime Investigation Department.

To apply, send a mail with your CV at [email protected]

One can expect a stipend here.

2. Kanga & Co.

Kanga & Co. was established in 1890. It is a highly respected and professionally managed law firm with its base in Downtown Mumbai. It has a large and active litigation department which has the experience in handling a variety of cases including both commercial and constitutional matters. It also works in the areas of direct and indirect taxation, real estate and banking.

Interns should expect reading work, drafting and lots of research work. Interns are also given the experience to handle and go for court hearings and also attend meetings of the client and advocates which provides a great exposure. It is a terrific place to learn if you are really interested.

To intern, send your internship application to [email protected]

Short term interns may get a stipend of Rs. 1500 for an internship period of 1 month whereas long-term interns may receive about Rs. 5000.

3. Shardul Amarchand Mangaldas & Co (SAM & Co)

SAM & Co is one of India’s leading full-service law firms. It has a pan-India presence and has been at the top of major headline transactions and litigation in all segments of the industry. It has a strong competition practice with the track record of successfully helping their clients through their largest transactions and high stake litigation. The firm’s experience also covers a wide range of areas relating to solvency and bankruptcy cases. It also offers a broad range of advisory and litigation services in the areas of direct as well as indirect taxes.

Interns get to work on write-ups, reading case files, briefing, researching along with some clerical work. Court visits are seldom so one should not expect much of that.

They generally take interns for a period of 2 weeks.

Apply by sending a mail along with CV at [email protected]

4. Brus Chambers

Situated in the coastal city of Mumbai, Brus chambers is a top tier law firm in India known for its best shipping work since 2010. It is recognized by several international bodies as the ‘Best Shipping Law Firm’ and is preferred by international and local clients. It also has a strong commercial litigation which includes all contractual and commercial disputes. It is known for its aggressive and result oriented litigation but it also encourages out of court settlements.

The tasks for the interns mostly includes of getting familiar with the shipping laws which would help to draft and relate to cases, proofread legal documents, attend conferences and court matters with partners. One would get a good learning in the area of PIL, Company and Commercial matters by interning here.

To apply, send them a mail with CV at [email protected]. It may be followed by a telephonic interview which would involve questions on past experience and area of interest.

A stipend may be given.

5. Chambers of Mihir Desai, Bombay HC

Mihir Desai is a well-known face in the criminal law world. He is a human rights lawyer specializing in cases involving mass murders, riots, fake encounters, police brutality and genocide probes. He has been practicing criminal matters at the Bombay High Court, Mumbai and the Supreme Court of India. He is also the co-founder of Indian People’s Tribunal and Human Rights Law Network(HRLN).

Interns are allotted work according to their area of interest and doubts are thoroughly cleared by junior lawyers. Mr. Desai also reviews the progress of each intern. Main tasks of the interns would include drafting reports & petitions, research case laws, observe court proceedings and attend client counselling sessions.

Should an intern expect a stipend?

The stipend is dependent on the policy of that organization or institution that one intends to intern under. There are paid as well as unpaid internships but it should not be the ultimate factor for securing an internship. Internships should solely be based on your area of interest and the valuable learning it would provide.

Conclusion

One cannot deny the importance of a litigation internship. It is one of the most rewarding and helpful experience as one learns the intricacies of law and it aids their learning process immensely. Just working and observing can help one to learn all about the procedure and functioning of the law and can accommodate one with the realities of the legal world. It is going to be a rewarding and great learning experience so definitely aim for an internship in litigation.

In this article, Neha Verma pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata discusses the legality of bitcoin mining in India

Introduction

Currency is basically a money system which is generally used and is also considered as a legal tender in the country. Every country has its own currency system consisting of paper money and coins which are in physical form and the banks of the country are the centers for transactions of currency.

What is a bitcoin?

“Bitcoin” is the first of its kind digitalized payment system used worldwide where transactions are decentralized and happen without any intermediaries. Bitcoin is a cryptocurrency as it uses a strong cryptography system and codes to secure and carry out financial transactions. It was created as a new currency on 3rd January 2009 by a person going by the alias Satoshi Nakamoto. Bitcoin has been created as a “peer-to-peer” network eliminating any intermediaries in between and the bitcoin transactions are verified by using cryptography by network nodes. The record of all bitcoin transactions is kept in a “blockchain” which is a publicly distributed ledger for bitcoin transactions.

Bitcoin mining

Bitcoin mining is a complex computing and mathematical process by which the bitcoin miners bring new bitcoins into the world and it is also a process of verifying and adding bitcoin transactions to the public ledger i.e. blockchain. The bitcoin mining process involves assembling a block of recent bitcoin transactions and attempting to solve computationally tough puzzles.

Regulatory framework governing Bitcoin in India

Is mining bitcoin legal in India?

Bitcoin is not recognized as legal tender or as currency by Government of India and Reserve Bank of India which means that bitcoin cannot be used in India to buy or sell anything or for any financial transaction. Furthermore, the Reserve Bank of India has prohibited all banks and regulated entities from dealing in or settling virtual currencies transactions. However, from a legal standpoint, bitcoin mining is neither legal nor illegal in India because there is no law or legislation in India which governs or recognizes bitcoins. There is no Act, law or legislation defining what a bitcoin is or for regulating bitcoin in India or prescribing any penalties or prosecution for dealing in or mining bitcoins in India.

However, while individuals or entities can mine bitcoins in India but they cannot use such bitcoins for transactions and they cannot deal in or get any services for their bitcoin business or operations from any banks and other regulated financial institutions. Moreover, any individual and entity carrying out any bitcoin-related work in India shall be doing it at their own personal risk as bitcoin has not been given legal recognition in India.

The various laws prevalent in India which are applicable to currencies circulating in India have been outlined below.

Coinage Act, 2011

Coin as defined in Section 2(a) of the Coinage Act, 2011 means a coin made of metal or any other material which is recognized as legal tender and stamped and issued by the Government or any authority empowered by the Government for this purpose which includes one-rupee note issued by Government and a commemorative coin. However, the term “coin” expressly does not include postal orders, credit and debit card and e-money issued by any financial institution, post office or bank. Therefore, bitcoins are not coins as per Coinage Act, 2011 and hence are not covered by it.

Securities Contracts (Regulation) Act, 1956

Section 2(h) of Securities Contracts (Regulation) Act, 1956 defines the term “securities” according to which ‘securities’ include:

1. Shares, stocks, scrips, bonds, debenture stock or other marketable securities of like nature of any body corporate inclusive of derivative, units or any other instrument issued to investors in mutual fund scheme, units or any other instrument issued to investors in a collective investment scheme and security receipt as defined in SARFAESI Act;
2. Government securities and instruments notified as securities by Central Government;
3. Rights or interest in securities.

The two most important points in considering any instrument as security is that it should have been issued by a body corporate and such issue should have been backed by any underlying assets of the body corporate. In case of bitcoin both these conditions are not satisfied and therefore bitcoins cannot be treated as securities as defined in SCRA.

Foreign Exchange Management Act (FEMA)

All foreign transactions in India are regulated by the Foreign Exchange Management Act. “Currency” as defined under the Foreign Exchange Management Act means and includes all money orders, postal orders, cheques, bill of exchange, postal notes, currency notes, traveller’s cheque, letter of credit, credit cards and such other instruments as notified by the Reserve Bank of India. As RBI has specifically prohibited bitcoin and other virtual currencies, therefore, bitcoins cannot be considered as currency and FEMA shall not be applicable to it.

Payment and Settlement Systems Act, 2007

All payment systems in India are regulated by the Payment and Settlement Systems Act, 2007 which defines “payment system” as a system which helps in making payment from a payer to a beneficiary which includes payment, clearing or settlement service or all services but does not include stock exchange. It includes systems which help in the smart card, debit card, credit card operations, money transfer or similar operations. Payment systems are regulated by RBI and as RBI has specifically restricted banks and financial institutions from dealing in bitcoins or providing services related to bitcoin, therefore, bitcoin cannot be considered as a payment system. Also, bitcoin cannot act as payment getaway from payer to beneficiary and therefore should not be considered as the payment system in India.

Government of India’s stand on bitcoins

Indian Government has not been an admirer of growing craze for virtual currencies and the finance ministry of India has likened cryptocurrencies like bitcoin to Ponzi schemes as they are not backed by any asset. Time and again the Government has cautioned banks, individual and entities from dealing in virtual currencies as they possess high financial risk, are unsecure, not regulated by any intermediary and are prone to hacking.

In his budget speech the Finance Minister, Mr. Arun Jaitley stated that cryptocurrencies are not regarded as legal tender by the Government and that the Government would take all steps to ensure that cryptocurrencies and crypto assets are not used in the payment system and also not used for financing illegitimate activities. The Ministry of Finance has also stated that although bitcoins are referred to as coin they have no physical attributes of a coin and therefore they are neither currency nor coin.

Although the Government has come down heavily on cryptocurrencies it has shown appreciation for blockchain technology which they believe can immensely help in strengthening the digital economy. The finance minister has also shown his inclination towards adopting blockchain technology for developing a strong digital platform in the country.

The Indian Government is believed to be coming out with a framework to regulate bitcoins and other cryptocurrencies by this year-end.

Reserve Bank of India on Bitcoins

RBI has repeatedly warned individuals, entities and banks from dealing or trading in virtual currencies including bitcoin. RBI has issued public notices to this effect in December 2013, February 2017 and December 2017. Recently on 6th April 2018 RBI issued a circular to all banks and other entities regulated by RBI prohibiting them from dealing in any virtual currencies and from providing any services to any individual or entity from dealing in or settling virtual currencies. These entities have also been prohibited from giving loan against virtual tokens, maintaining accounts, trading, clearing, registering virtual currencies, transfer or receipt of money in accounts related to virtual currencies and accepting virtual currencies as collateral.

Any regulated entity already engaged in these services have been asked to exit from such businesses within 3 months from the date of circular. Due to the potential and financial risk associated with bitcoins and other cryptocurrencies RBI has taken a tough stand on this issue and has outrightly prohibited the banking and financial system of the country from trading or dealing in such securities.

RBI is the final regulatory authority for all currencies and financial institutions, therefore, all virtual currencies shall be regulated by it and given recognition only if RBI recognizes it.

Case laws

In April 2018, an Ahmedabad based Company Kali Digital Eco-Systems Pvt Ltd which acts as a cryptocurrency exchange popularly known as “CoinRecoil” filed a petition in Delhi High Court against the Reserve Bank of India, Ministry of Finance and GST council, challenging the RBI circular which had asked all regulated entities including the Banks not to provide any services to an individual or business dealing in digital currencies. The RBI circular was challenged on the ground that it does not differentiate between persons or entities dealing with virtual currencies and those who are in involved in settling virtual currencies.  The Company has also pointed out that the RBI circular has failed to properly define what a ‘virtual currency’ is and any clear definition of virtual currency is not provided in any other legislation also because of which classification of virtual currencies becomes unreasonable. This matter is presently subjudice.

In Shailesh Bhatt case also known as bitcoin extortion case, Shailesh Bhatt a real estate developer was kidnapped and detained illegally and was forced to transfer his bitcoins worth Rs. 12 crores to his kidnappers. The matter is subjudice as of now. This is the first of its kind bitcoin extortion case in India.

Conclusion

In recent times, the public interest in bitcoins as an investment and payment system has increased multifold as bitcoin is the first cryptocurrency of the world and is easy to trade in and maintain. There is no central agency or intermediary which controls or regulates the mining of bitcoins or the transactions in bitcoin which makes bitcoin an unsecured payment system. The blockchain technology in which public ledger of bitcoin transactions are maintained is impressive and has the potential to strengthen the digital economy. Many countries have completely banned cryptocurrencies including bitcoins yet they have very well adapted and utilized the blockchain technology for their digital transactions. In India, both the Government and the RBI have looked down up any cryptocurrency being utilized for payment and therefore the RBI issued a circular prohibiting a financial institution from providing services for bitcoin transactions and to individuals or entities working in the virtual currency segment. India has not expressly declared bitcoins to be illegal and have not made any legislation to regulate Bitcoin transactions, therefore, bitcoin mining and other activities are still being undertaken in India although at a very small scale.

This article is written by Kashish Khattar, Amity Law School, Delhi [IPU], currently enrolled in the Ace your Internship course at Lawsikho.

Introduction

The smart contracts were first talked about by Nick Szabo in a research paper that he published back in 1995. They mainly have 3 distinct features:

1. They are executed, negotiated and coded in a blockchain technology.
2. They are mainly made of yes-no and if-then terms.
3. They are authenticated by third party miners who are paid in a cryptocurrency like Etherium.

The concept of smart contracts is a modern and undefined one right now in our country. It can be simply be said as a form of digital contract that is able to implement itself, without the help of any middlemen. Smart contracts along with blockchain technology propose to eliminate the needs of Banks and other third parties which are needed to execute the “consideration” part of the contracts.

Basically, it is a part of the program that stores the rules of negotiations of a contract, checks the contract to automatically verify it and then by the end of it, executes it. It is an easy way of the transaction without any third party being involved in the transaction.   

A smart contract is based on a program, unlike a traditional contract which is drafted with the help of human beings. Smart contracts just like the regular contracts define strict rules and consequences of non-performance of the contract. They use certain information as the input, process using the code wrt the regulations. Then move on to take necessary actions that are required to obtain the result.

Smart contracts are legally enforceable as they introduce rights, duties, obligations and remedies to all the parties to the contract and hence are these are legally enforceable as contracts. It fulfils all the conditions of contract law and works efficiently with blockchain technology. Smart contracts cannot be modified easily, the obligations are computer coded. The obligations cannot be modified or amended and the parties will have to code the contract from the scratch.

How do they actually work?

As the terms and conditions have to be encoded in the program, smart contracts are mainly formed around contracts which are based on an ‘if-then situation’ – if x happens then y obligation will be enforced. Smart contracts with these features are best suited for industries like the insurance and the financial services sector.

They are easier to make as there are non-operational clauses involved in these type of contracts. Non-operational clauses are mainly ambiguous and open to various interpretations. Such as good faith obligations and uncertain jurisdiction clauses. They are also self-executory, and hence, self-enforcing kind of contracts. The obligations that are put into the program will be enforced and cannot be stopped midway.

There will be a permanent, time-stamped and irrevocable record of the transaction formed on the blockchain, it is accessible to all the participants in the transaction. The identity of all the parties will remain confidential because all the identification, negotiation and execution is done in code.

Smart Contract over Traditional Contracts

1. Smart contracts are easy to understand and comprehend. It ensures authentication and helps in preventing all kinds of frauds.
2. In a traditional contract, there will always be a risk factor of the parties not fulfilling their part of the contract. This is not the case in Smart Contracts, as a sanction is needed for the performance of the contract.
3. Traditional Contracts can always end up in litigation which can go on for years. Smart contracts ensure that the parties are legally averse to crimes such as cheating and fraud.
4. Smart Contracts have a minimal chance of being wrong due to the intervention of computer codes. Traditional contracts are drafted and executed by human beings. The degree of legal exposure will always be greater in traditional contracts.
5. Smart Contracts are self-regulated. Traditional contracts can be regulated by a court of law if any kind of dispute arises.
6. Smart Contracts nullify the role of banks and third parties, so they are practically cost effective. Complex traditional contracts may involve a team of lawyers which may cost a fortune to the client.
7. Traditional contracts, first have to be drafted, then executed and then if the need arises a remedy has to be given by a court of law which can take a lot of time. A smart contract, on the other hand, ensures speedy execution and remedy.

Legality of Smart Contracts around the World

1. Firstly, Smart Contracts have to fulfil all the basic essentials of a contract. There must be an offer, acceptance, consideration, lawful subject matter, consideration and parties competent to contract etc. The arguments concerning smart contracts can be of dual layered. First of the evidentiary value of it in courts and whether the digital signature of blockchain technology will be considered valid as an authentication of an electronic agreement.
2. In the United States, 47 states in 1999 adopted the Uniform Electronic Transactions Act (“UETA”). The UETA regulates e-contracts, records and signatures etc. It says that the e-contracts are valid and the use of a digital signature will be deemed valid for providing consent. Arizona in 2017, has passed special regulations recognising the blockchain tech. Vermont and Nevada followed by passing laws recognising smart contracts and their execution through blockchain tech.

Regulation of Smart Contracts in India

• The concept of Cryptocurrency was shunned by the Finance Minister in his budget speech this year where he categorically rejected the legal tender of cryptocurrencies. But he in the same speech praised the blockchain technology and issued strong support to the blockchain tech as a whole. Plus, the RBI in it’s circular this year titled withdrew bank supports from virtual currency exchanges.
• Further, there are no rules regulating self-contracts. In a typical fashion with no regulations in sight. They will be regulated by the Indian Contract Act (“ICA”)  and the IT Act, 2000 (“IT Act”) and the Indian Evidence Act, 1872.
• A contract to be enforceable in India should fulfil all the basic essentials such as offer, acceptance, consideration, lawful subject matter, consideration and parties competent to contract etc. The blockchain can be programmed in such a way that the payment is mechanised as to the needs of the specific smart contract. The non-performance and non-payment of contract can also be put into check. The smart contracts only work when both the parties have to approve to sanction performance of the contract. The stamping and registration of a contract can also be put into check if the government is also made a party to the contract in the blockchain tech. Think of contracts without any paperwork.
• The IT Act does allow contracts to be validated by the use of electronic signatures. It has placed various regulations on how to obtain a digital signature. Under S35 of the act, it has been specified that the digital signature can only be validated by the government. This does not help the cause of smart contracts where a hash key is used as unique identifier and authenticator produced by the Blockchain technology to validate a smart contract.
• Also, the evidentiary value of smart contracts is put into question under the Evidence Act, 1872 because the specific provisions only make those digital records admissible whose authentication is done by a valid digital signature obtained in consonance with the IT Act.

Commercial Use of Smart Contracts and Blockchain Technology

One of the examples can be, State Bank of India has recently launched BankChain, a platform based on Blockchain made by a consortium of 27 banks, which would proposed to share e-KYC information of all the customers within the consortium. This would save the whole consortium a whole lot of time and effort. Plus, it would ensure there are no leakages in the process.

The government has plans in the pipeline in reforms to the agriculture with blockchain involving quality check, productivity check and nullifying the role of intermediaries in the process of the Agriculture sector.

Smart contracts can revolutionise securities markets, where placing of a purchase order when certain conditions are met, the code can automatically release payments. Syndicated Loans and various banking transactions will get easier with the help of the new age technologies.

Smart contracts can be used in all spheres of lives, from payment gateways to electricity bills, everything will be revolutionised.

Smart contracts and Blockchain can even ease the process of the property transfer agreements. The relevant parties can become the parties to the process, for example – the buyer, the seller, the govt which has to be paid the stamp duty. The process of registration of the documents, notary go all out of the door when the smart contracts come into effect full fledgedly.

Impact on the Legal Industry

The legal sector has to always adapt to the changing needs of the clients. Starting from negotiation to coding the smart contracts, everything can be done by a law firm. The teams just have to update themselves with the basic knowledge of all smart contracts, blockchain technologies and cryptocurrencies. Collaboration with the startup sector and the software firms which deal mainly with these forums is a must.

Conclusion

It would be interesting to see as to how the market evolves with the changing times. The government is expected to come up with some kind of rules and regulations governing the smart contracts and blockchain technology. Smart contracts seem like a fantastic opportunity, especially for the government to stop leakages in various sectors and departments. Smart contracts taking over the traditional contract is bound to happen in the near future. It’s simplicity, low cost are some of the factors that make it a bestseller already.

In this article, Shreyanshi Maheshwari of Symbiosis Law School, NOIDA discusses how to hire a good lawyer. This is one question that always comes to a person’s mind when he/she is in a need to hire a lawyer for him/her. This article is providing a solution to hire a good lawyer.

Introduction

If you are looking to hire a lawyer, you’ll find no shortage of legal talent. India holds 18% of the world’s population and 0.1% approx 1.3 million of it are lawyers as per a right to information (RTI) response by the Bar Council of India (BCI) to Delhi-based advocate Kush Kalra, with an average annual growth rate between 2007 and 2011 of around 4 percent.

There are so many advocates out there practicing law in courts on a daily basis. With so many lawyers out there, it becomes more important that you choose a right one for you. But how will you choose a right one for you or how will you get to know that the one you have chosen is right for you? Choosing a wrong advocate can be disastrous, so you must do a good and quality research before choosing an advocate for you. This article will give you an idea that what all points you should keep in your mind while searching for an advocate for yourself.

Who is an Advocate?

An advocate is a professional in the field of law who fights on your behalf using ethical, reasonable and cost-effective means. He is a person learned in law and have a license to practice law. In India, the term “lawyer” is often used in place of “advocate”, but the official term is “advocate” as prescribed under section 2(1)(a) of The Advocates Act, 1961.

For the definition of “advocate” under The Advocates Act, 1961 (see here).

Types of Advocates

Section 16 of The Advocates Act, 1961 states that there shall be two classes of advocates, that is, senior advocates and other advocates. If the Supreme Court or a High Court wants to designate a lawyer as a senior advocate because of the opinion that by the virtue of his ability [standing at the Bar or experience in law or special knowledge] he deserves such distinction that they can do so with his consent.

For Section 16 of The Advocates Act, 1961 (see here)

The Advocates Act, 1961 has a provision for two classes of advocates, that is, senior advocates and other advocates. However, the Supreme Court in the exercise of its rulemaking power made a provision for the third class of advocates, that is, advocate on record.

How to hire a good Lawyer – Question to ask yourself before hiring an Advocate

Do I need a Lawyer?

I. Interpret your problem carefully before thinking of hiring a lawyer.

Start with the basic question “Do I need a lawyer?”. Sometimes it’s good if you know that is there a need to find an advocate for yourself or not. If a lawsuit is filed against you, or you are charged with some crime, or if you need a divorce, then, it’s good to have an advocate for yourself. Advocates are not just for criminals or for the ones stuck in the litigation process. Qualified Lawyers also provides advice and knowledge to the people who just want to talk to them as an expert or an adviser.

II. Ask yourself and people around you that is it possible and reasonable to solve the problem on your own.

Many times, you may be able to solve the matter on your own without any advocate’s help. For example, if an online company has done wrong with you, so if it has a customer care helpline, you can talk to them regarding your grievance. On the other hand, sometimes it’s better to take an advocate’s advice as they protect you from contacting the wrong person so that you don’t do something that will hurt your case later.

III. Determine how important your situation is

If you are charged with a crime or if you are in a legal suit as a defendant, there is an immediate need to contact an advocate. Even in cases where your right is infringed and you are injured you should seek advice from an advocate as soon as possible, as delaying may jeopardize your right to seek relief in the court of law.

Even if you are seeking legal help merely to avoid future problems, it’s never too early to start up your legal search for an advocate.

What qualities should you look for in your potential Advocate?

Comfort

The first and foremost quality is that you should feel comfortable in the presence of your advocate. A comfortable and frank relationship helps you in sharing the relevant information about your case openly, honestly and completely. A lawyer can’t assist you without knowing each and every detail related to the case.

Record

Before going to a meeting with the advocate you should do a research about the advocate on the internet. You should go through the online reviews and comments about the advocate’s services. So you should look for a person whose records relating to his services are good and that there are no complaints, misconduct charges, or malpractice accusations against him.

Experience

It’s not essential to find a person who is an expert in your particular field but it’s better if you find a person who is either specialized in your field or hold some kind of experience in the field that your problem is connected to. For say if you have a business related problem than its better to find a person who has specialization in business law rather than going for a person who has the maritime law as his/her specialization.

Understanding

Be sure that the advocate is willing to understand your problem. Whether your problem is big or small but the lawyer should understand what you expect out of him and what is your vision for the future of your case.

Ability to communicate

You should look for a person who can make you understand each and every word that he is speaking and the one who uses a language that is easy for his clients to understand. If the advocate is speaking in the legal language and is least bother to explain the terms that he/she is using then you should probably look for some other person. How to hire a good Lawyer is a difficult to answer question, however, the folllowing discussed points might help you in making an informed choice.

Availability

You should look for a person who is available for you when you need him. The advocate should be available for meetings at your convenience, not according to his/hers. He should quickly reply back to the emergency calls or messages.

Rapport

Your advocate should be a person with whom you can get along with. Good relationship ensures a better relationship and more positive results in future.

A reasonable and clear fee structure

Fees of advocates fluctuate according to location, size, and prestige of the advocate or his/her firm as well as advocates experience. A good advocate is clear, honest and reasonable with his/her fee structure. So you should look for a person who charges you a price worth the case.

Questions to ask your potential Advocate

I. How long have you been practicing law?

The first question that you should ask any advocate before hiring is that what is his expertise and whether he is a long-serving advocate or just a beginner. Who can handle your legal issues better it all depends on the case and circumstances. But, it’s for you to decide whom you want to hire as your advocate, the one with the experience or the one who is fresh out of a law school.

II. What type of cases do you generally handle? What percentage of your practice deals with the (practice area to which the client’s problem is concerned)?

You should also know the advocate’s expertise and what amount of his work deals with the area that your legal issue is concerned with. For example, if you need help with a case related to your company than your priority may be to seek a corporate lawyer who has worked on similar corporate cases.

III. Who are your regular clients?

This is an important question that is often overlooked by the clients while hiring advocates for them. For example, if you have a legal issue related to adoption but the advocate that you are meeting with represents only corporations, then he/she may not be the best choice for you.

IV. How many similar cases to mine you have represented?

This is not the time to sit back and act shyly. You must feel free to ask about the past record of the advocate that how many similar cases to yours he has handled and what number of cases he had won or settled.

V. What special training or knowledge other than your law school degree you possess that might help in my case?

Cases like DUI and patent cases requires specialization and knowledge for effective representation of the case. Ensure that your case fits into the category that the advocate holds specialized training or knowledge in.

VI. What is your fees and costs, and what is the billing procedure? Who will handle my case?

It’s important for you to know that whether or not you’ll be able to afford the advocate’s services and what is the procedure in which you are required to pay. You must also ask for the payment options available.

It’s also important for you to ask who’ll handle your case. Whether a portion or whole of the case will be handled by paralegals or legal assistants. If yes, then ask to reduce the costs.

VII. Are there any other means to solve my legal issue?

You should ask the advocate that whether or not there are any other means such as arbitration or some other out of the court settlement through which your legal issue can be solved. A good and ethical lawyer will always inform you about the less expensive and time-consuming means if available.

VIII. What are the probable outcomes of my case?

Advocates are no fortune tellers so they will never guarantee a specific result. However, they should be able enough to tell you the likely outcome of your case through its preliminary assessment.

IX. What will be your strategy in my case?

An advocate should provide an outline of the possible ways in which the case can be handled and then explain that why they have chosen a particular plan, with all its positives and negatives.

X. How long will this case take?

While discussing the strategy of the case, the advocate should give you an estimated time in which the case will get resolved. You should keep in mind that the advocates don’t control the speed of the process and therefore they can’t make any promises regarding when the case will get over.

XI. How will we communicate with each other?

You should have a comfortable client-attorney relation from the beginning and that you will communicate to each other on a regular basis. Make sure to exchange your contact information and decide the ways in which the communication will take place.

XII. What is my role in the preparation of the case?

It is very important to figure out that what are the things that you should and should not be doing to help your advocate. For example, many times you are capable to provide documents and background information, but your advocate will usually tell you to not speak to the witnesses or do any legal work with respect to the case. You should know how you can help and you should make sure to follow the instructions given by your advocate.

What to do if you do not have the financial capacity to hire a top-notch lawyer? How to find a good lawyer in such cases?

Whether you want to create a will or you want to get a divorce, it’s always advisable to take care of legal matters with the help of a lawyer. In legal matters, you need someone who understands the laws prevailing in your state to help you with the paperwork and to appear with you in the court. But how to find a good lawyer when you don’t have the financial capacity hire one. Lawyers can be very expensive, but there are several ways in which you can hire a decent lawyer if you have low income. You can contact a legal aid society, find an independent pro bono lawyer, or arrange a payment plan that works for your budget.

Method 1- Finding free legal help

• Look into state-funded legal aid programs

There are a large number of legal aid programs that are being operated on State grants. Legal aid programs employ lawyers and paralegals to offer free legal services to the people who are eligible to avail them. To qualify for availing legal aid, your income must be below a certain amount. The definition of “low income” may vary from state to state. In some of the States, it should be below the state poverty line.

• Find a local pro bono program

Free legal help through pro bono programs is often offered by the Bar Associations. People who qualify for free legal advice are matched to the Lawyers who are willing to work for free or on ‘pro bono’ basis. There are various non-profit organizations who are working to provide free legal help to the one in need. In order to qualify for such program, you may be asked to prove that your income is below a certain amount. These programs are also offered by local Bar associations and private law firms.

• Contact a self-help legal clinic

Free self-help clinics are designed in many states to provide for free legal advice to anyone who asks. Some of the clinics accept questions in person, while others ask it to be submitted online. The questions that are answered either by the Lawyers or by Paralegals. In most of the cases, the process is kept confidential. Self-help legal clinics are good if you want your question to be answered and your queries regarding the procedure or methods in which you have to proceed with your case to be answered. However, it does not provide you with a lawyer who can help you with your case.

• Call a legal hotline

People in specific situations such as victims of domestic abuse can take advice from legal hotlines. Sometimes, the advice is free of cost and sometimes they charge a very low fee. You can search for a legal hotline in your state, and find one that will appropriate advice to you in your situation.

• Look for a local law school that is having a legal clinic offering free legal services

Legal clinics are being run by many law schools in order to give the students a practical experience of the profession. These law schools clinic can take up general civil or criminal matters or take up a particular type of matter, such as a domestic violence clinic. In these clinics, legal help is generally offered by the law students under the supervision of experienced law professors. The law students are no licensed advocates but are supervised by their experienced law professors who make sure that everything on the case is done correctly.

• Get a Lawyer appointed by Court

If you are accused in a criminal case, you have a right to an advocate. If you can’t afford to hire a private advocate, you may get a court-appointed defense advocate. You are needed to provide information about your income in order to show that you are unable to hire a private advocate.

Method 2- Finding a suitable payment plan for yourself

• Look for a sliding-fee program

If your income is too high to qualify for free legal services that you may opt for a sliding-fee program with affordable advocate fees. This program is designed by each State to help people with moderate income handle issues without having to pay a huge sum of money. You can find such program in your State by contacting your State’s bar association or by searching online.

• Work out a payment plan with an advocate

Some lawyers will work out a payment plan so that you are not needed to pay all the fees at once. You may opt for a plan to pay in installments or on monthly basis until the amount you owe has been paid. It depends on the will of an advocate that he wants to provide for such payment plan or not. Before going to an advocate’s office you should contact him/her and ask whether he/she will accept a payment plan.

• Decide whether you can pay a contingency fee or not

A contingency fee means that you have to pay the advocate only when the result of the case is in your favor. If the case is lost you don’t need to pay the advocate’s fee. Contingency fee arrangement percentage may vary but 30-40% is common. However, in this arrangement, you may be responsible for expenses even if you do not owe fees. Make it clear with the advocate that you are responsible for what expenses.

• Consider hiring a young advocate

Young advocates who are new to the profession are up to date with the current legal developments, but they may have less number of clients. This means that they have much more time to devote to your case. They may also charge less as they are less in demand as they have few years of experience. Young lawyers are also in a need to make their name in the profession. Therefore, they spend a lot of energy to represent you as efficiently as they can.

• Consider paying in property or barter

Payment can also be accepted by a lawyer in the form of a property, as long as that property is not a part of the case you are asking him/her to take up. Many lawyers do accept barter services, such as web design or accounting, in exchange for their representation. But make sure to get the property/barter agreements in writing with all the terms clear.

Method 3 – Consider the hiring process

• Interview several options

Try to interview several candidates to represent you. Irrespective of your low income, you are entitled to representation that you believe serves your interest in the best possible way. You should be comfortable with your advocate and interview them before hiring them helps you determine that. You should ask about the fees and payment procedure, ask who will do the work, ask about his/her qualifications, etc. and accordingly make your decision.

• You should ask questions about the arrangement

You should have a clear understanding of the terms on which you are hiring the advocate. In other words, you should know that, what they will do for you? What if they are unable to resolve the case in the way you desire it to be resolved? What will you pay? And what will be the method of payment? Clarify what exactly you will be charged for.

• Agree to a set rate

A set rate means that you know what amount you need to pay and when you have to pay it. So, if a rate is fixed you can proceed with the case with some relaxation in your mind. Be sure to clarify any hidden expenses at this rate. Usually, the client is responsible for such expenses.

• Offer to do work that you can do yourself

Some of the expenses can be avoided if you yourself take over the charge of some work that you can do yourself such as, copying, the filing of papers, etc. Ask your attorney if he/she can allow you to volunteer when possible to cut costs.

Method 4 – Avoid bad lawyers

Most of the advocates are genuine and ethical providing good representations to their clients, but there are always a few who are looking for an opportunity to scam you or to cheat you. Keep a proper check of this while choosing a lawyer for you.

• Don’t hire a lawyer who has solicited you

You should not hire a lawyer who has contacted you without your permission or expressed interest. It is against the professional code and conduct of the lawyers to contact you if you have not expressed interest in his/her service, or given him a permission to contact you. Do not hire an advocate who pressurizes you to enter into any sort of agreement with him.

• Enquire about the lawyer’s background and credentials

You should verify your lawyer’s background with the local or state bar association. You can verify the information that your lawyer has provided you and check whether he/she has any record of ethics violations or disciplinary actions against him/her. If any record of that sort is available against him/her, you should avoid hiring him/her.

• Avoid hiring an unethical advocate

If an advocate encourages you to do something illegal or unethical, avoid hiring him. Never choose to hire an advocate who makes unethical offers themselves. Also, try to avoid lawyers who make promises about a specific result for your case if you hire him/her.

Conclusion

There are situations in everyone’s life when there is an urgent need for legal help. In India, finding, selecting, and hiring of an advocate who is perfect to represent you or advice you is an art in itself. There are several situations from criminal prosecution to divorce when advocates come into the picture. An advocate is a person who gets you justice. Therefore, it is very important for you to choose the right advocate for yourself.

This was all about how to hire a good lawyer. What are your thoughts on how to hire a good lawyer? Comment below and share your views with us.

In this article, Snigdha Pandey, Marketing Associate at iPleaders discusses the must Have Skill Sets For An In-House Counsel In The Media & Entertainment Industry.

We all remember our first day at our first jobs. It is all about listening to your reporting manager and trying to cram as much as possible -names, departments, way to the bosses’ cabins, pantry and restrooms;  and most importantly the study/research materials!

On my first day at work with a music label, my boss gave me two files: one marked “research and opinions” and other had the name of a fairly renowned international company. He briefly told me about the dispute in question and said “We have four days to prepare, file and get an injunction against this company. Study the materials, sit with our attorneys and get it done.” I tried my best to hide my nervousness and said: “Ok, sir.”

In the start-ups and technology age, most of my internships and assignments had taught me about product patents and trademark laws only, but this was strictly copyright. So I dove straight into the research file to gain some insights. Turns out there were only some old case laws and judgments along with a few opinions from prominent jurists!

My only other option was to resort to the bare act lying right next to me. But this was an international infringement, so did that mean I will have to rely on international laws? Where do I begin – the dispute itself or the basics of copyright law or the policies and agreements of the platforms involved? There were too many questions and no answers.

These days there are complete structured diploma courses being offered online, designed specifically for media and entertainment laws. But at that time, all I remembered were theoretical excerpts from the media and law optional subject in college, which barely helped in my predicament.

Over the next few days, I studied the concept and terminologies in copyright law, nature of usage and poured through the agreements and policies and talked to the experts and attorneys. Somehow within a week, we managed to get the injunction in our favour against the respondent company!

This was four years ago. Over these years, there are a number of lessons I’ve learnt and experiences I’ve gained from. The most important lesson perhaps has been that in-house lawyers, especially the ones working in the media and entertainment industry must have certain prerequisites as skill-sets. Here is a list of seven skills I found to be the most useful:

• Know How To Draft A Contract and Legal Notice

Merely knowing how to draft a basic agreement is not enough and all agreements need to be drafted diligently so as to protect the company from potential disputes in the foreseeable future.  

The thumb-rule for an in-house counsel is that as the agreements will be used in future dispute resolutions, there should be enough wiggle-room left for the company to adapt and make decisions as when the time arises.

Similarly, there are different kinds of notices that media and entertainment companies use. For example, apart from the usual legal notices such as demand notices and breach of contract, there are other specific legal notices that are drafted by in-house counsels. These are cease and desist notice, Digital Millennium Copyright Act (DMCA) take-down notices, etc.

Most law students and lawyers like myself may have acquired the basic contract and notice drafting skill through internships or practice after graduating from law school. But now, there are advanced online courses available, specially designed to cater to specific needs like drafting and negotiation of commercial agreements, corporate contracts, music licensing agreements, content assignment agreements, etc.

• Breeze Through Advising The Business, Legally

One of the most important and usually unspoken aspects of the job is guiding various departments such as accounts, finance, sales, marketing; and coordinating with them at different junctures.

The legal issues faced by a company come from all directions. For instance, prior to an agreement being drafted, the business team has to be advised on how to proceed with the negotiation in order to come to terms acceptable to the company. Before launching a new product, all the trademarks, design patents are to be cleared so that the product is aptly protected.

This requires constant advising and coordination with internal departments, so both the soft skills and negotiation skills of in-house counsels are tested.

• The Art Of Analysing The Dispute

Many times, for want of preparation, the lawsuit is lost. The most important aspect of a dispute is the analysis of its nature.

For instance, in a music infringement, the infringement can be of the tune, lyrics or the sound recording. But to analyse that, one may need an expert opinion to determine the same and submit their musical notations as evidence. This could help pursue the judge in their favour!

Therefore, the in-house counsels have to adhere to certain parameters to analyse the nature of the dispute. In order to analyse the same, knowledge of both the relevant laws as well as industry-knowledge is paramount.

•   Do You Know How To Negotiate? You Need To!

After a dispute comes into the picture, usually parties try to send out communications in order to resolve them through mediation or negotiation. The business teams and the in-house counsels from both sides communicate and try to reach a reasonable outcome in order to avoid unnecessarily expensive litigation. To be able to do this the in-house counsels have to be trained in effective negotiation skills.

Negotiation is a subject rarely taught at law schools. With the ultimate focus of co-curricular activities in law schools on mooting, alternate dispute resolution methods such as mediation, arbitration and negotiation find no space in the curriculum! However, not everyone decided to don the black gown and fight a battle everyday. As the trend goes, most law students opt to work in corporate law firms, or in-house for stability in job profile.

Where can they learn the art of negotiation? An easy way to to do this would be to watch negotiation videos on YouTube, read the No. 1 bestseller by Roger Fisher called ‘Getting To Yes’ (and believe me when I say that they rely on this in Harvard’s Program on Negotiation!), or maybe take the help of online courses that teach the same to you with the help of industry experts!

• Know The Basics Of Litigation

When the negotiations yield no results, the law firm and consequently senior advocates are consulted for a more detailed analysis of the dispute and possible remedies. The in-house counsels have to collect the evidence from various mediums and seek expert opinion, etc. and then brief them.

In-house counsels are the point-person for both the internal teams and senior advocates. So, they have to be able to gauge possible complications and acquire full knowledge of the dispute, while always ensuring that the company’s interests and requirements are met with.

• Educating Top Management and Internal Teams

The learning never stops for a lawyer. They have to constantly keep themselves, their top brass, and internal teams educated and updated about the latest trends and laws through white paper presentations or conducting seminars, etc.

For instance, do you think that the marketing team would know the laws that they would have to comply with while creating a TV advertisement? Is it always the job of an in-house counsel to guide them each and every time an advertisement is being created? That’s impossible. It is imperative that lawyers take sessions every once in a while with such teams and prepare list of do’s and don’ts and checklists for these teams to adhere to.

• Maintaining Management Information Systems

Doing the above-mentioned things properly is not sufficient on its own, an effective communication of the same is required through various report management systems. This helps the in-house counsels not only to record their activities, but also enables them to keep the bosses apprised of legal on-goings of the company in an effective manner.

For the same, report management systems are used. These include litigation management databases, daily/bi-weekly internal reports on activities. It helps the management in taking swift decisions about matters, based on urgency.  

There is no alternative to hard work and perseverance, but I find a structured guideline helps navigate through the journey more easily. There has to be constant learning involved at different junctures to keep up with the changing regulations, laws and technology.

We can learn something over the span of years on our own or take some help and learn effectively within few months. Whichever option we take, we must learn constantly to achieve success.

Good luck!

In this article, Sandip Ghosh, a student pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata discusses on conversion of an OPC into a Public/Private company

Introduction

What is a One person Company?

A One Person Company (OPC) is basically a hybrid structure which combines the benefits of sole proprietorship and a company form of business. A single person acts as a Director and also as the shareholder.  

Introduced under the Companies Act, 2013, Section 2(62) defines that the OPC is a Company which should have one person as its member.

A One person company is registered in the same manner as a private limited company, thereby the same provisions are followed by both.

Benefits of incorporating an OPC

One Person Company is a new structure of the business model that has been introduced. The following are the benefits regarding the same:

1. Unlike that of the sole proprietorship, there is only a limited liability of a director in an OPC.
2. The complete control of the company will be in the hands of the owner
3. Helps startup entrepreneurs to test their business model which they, later on, carry forward by converting their business with the help of venture capitalists.
4. There are also provisions for tax flexibility and concessions.

Why does an OPC need to convert into a public/private company?

In order to obtain the various features of a company, many OPCs after a while choose to convert itself into either a Private Limited Company or a Public Limited Company.

Conversion of OPC into Public or Private Limited Company

The policy behind introducing the concept of OPC is to encourage small businesses. As per Company Act 2013,  there is a requirement of conversion of OPC into public or private limited company when it triggers certain criteria such as:

1. If the paid-up share capital of the OPC hits more than INR 50 lakhs.
2. If the annual turnover exceeds INR 2 cores consecutively for last three (3) years.

The maximum time limit provided for the conversion after the OPC meets the above-mentioned criteria is of six months.

An OPC has the choice to convert itself into either a public limited or a private limited company. However, the most common mode of conversion is into a private limited company.

Steps that are to be taken during the conversion of OPC into Public or Private Limited Company

The following steps are to be followed:

On reaching a decision to convert, the said decision of conversion of an OPC must be recorded in the minute’s book.

1. The memorandum and the article of association should be amended as per the following points are given under:
   • The OPC should be subtitled with Private limited or Limited company at the end of its name.
   • In case of Private Limited Company, there should be changes required in the clause of capital if it is increased.
   • The clause of objectives should be amended if there is a requirement of additional objectives in the clause or there is a difference with the existing clause.
   • The clause in respective to subscribers need to be altered as there is a requirement of inclusions of additional members in the memorandum.
2. The Register has to be notified through the form no. INC 5 within a time limit of 30 days that the existing OPC is getting converted into either a Public or Private company as the amount of Capital (mentioned above) has triggered the requirement of conversion.
3. After receiving the notification the Register will issue a fresh notice of incorporation.

Conversion of an OPC into Private Limited Company

There are two modes of conversion:

• Voluntary Conversion

Under Voluntary Conversion, the criteria that the OPC is not allowed to convert itself into a private limited company until the expiry of two years from the date of incorporation as an OPC. The OPC must communicate its intent to convert into a private limited company within 60 days in accordance with Form INC 5 to the registrar of companies.

• Mandatory Conversion

Under mandatory conversion, if the OPC crosses the threshold limits mentioned above, it must mandatorily convert itself within two months.

Section 18, Companies Act 2013

Section 18 of the Companies Act, 2013 gives the procedure for conversion of companies already registered. It states the following points:

• The company can convert itself by altering its memorandum and articles of association.
• The Registrar of companies based on the application can issue a fresh certificate of incorporation
• The new registration shall not affect the debts, liabilities, obligations or contracts entered into previously by the company.

Also to be followed is the Companies (Incorporation) Rules, 2014.

Conversion of OPC into a Public company

The provisions mentioned under the following rules in Company Act 2013 should be kept in mind before the conversion:

• Voluntarily conversion

Key Considerations

• This type of conversion can only happen if the OPC has completed its two years of operation from the date of incorporation under Rule 3 (7) of the Companies (Incorporation) Rules, 2014.
• The name clause should be amended to exclude the name of “Private”.
• Adequate steps to increase the number of members and Directors to 7 and 3 as per the prescribed rules. (Rules from 6(6)of Company Incorporation Rules, 2014)
• The Articles of the company is required to be amended for the removal of restrictive provisions that are applicable to a private company. A new set of articles to be followed in case of Public Company.
• The Company should not be a defaulter in terms of timely submission of the financial statement or any other documents due for filing with the Registrar. (Rules 29 (1)of Companies (Incorporation) Rules, 2014)
• The Company should not be a defaulter in terms of repayment of matured deposits or debentures or interest on the deposits or debentures. (Rules 29(1) of Companies (Incorporation) Rules, 2014)

• Mandatory Conversion

 Key Considerations

• The member of the OPC must approve the conversion of OPC into Public Company.(Rule 6(3) of Companies (Incorporation) Rules,2014)
• The clause of the name which states it as “Private” is to be excluded from the memorandum.
• The number of directors is to be increased to 7 and 3 in addition to a minimum paid capital as prescribed in ( Rule 6(6) of Companies (Incorporation) Rules,2014)
• The Articles of the company is required to be amended for the removal of restrictive provisions that are applicable to a private company. A new set of articles to be followed in case of Public Company.
• The Company should not be a defaulter in terms of timely submission of the financial statement or any other documents due for filing with the Registrar.(Rules 29 (1) of Companies (Incorporation) Rules, 2014)
• The Company should not be a defaulter in terms of repayment of matured deposits or debentures or interest on the deposits or debentures. (Rules 29(1) of Companies (Incorporation) Rules, 2014).

For example, one such successful OPC in India is that of a tour and travels services firm registered as an OPC under the name of Delhi-based businessman Ankur Sharma. Mr Sharma had stated in 2014 that he looked forward to turning his company into a Private Limited Company in six-eight months. (available here )

Conclusion

As the new system of OPC has been introduced in the legal system, it aims not only to encourage young entrepreneurs to enter into the corporate world but also enhances the individual capabilities to contribute in the economic growth of the country by generating employment opportunity.

The mandatory points that are to be kept in mind during conversion

• Only a natural person who is a citizen of India is eligible to work as the member and nominee of the OPC.
• A resident of India means a person should not be residing in the country less than 182 days during the immediately preceding one financial year.
• The person should be a member of one OPC.
• The natural person as termed, if a member of one OPC becomes a member of another OPC by virtue of his being a nominee of the previous one, then he/she have to withdraw the nominee from the OPC within 180 days.

This article is written while pursuing the Diploma in Entrepreneurship Administration And Business Laws from NUJS, KOLKATA. This article discusses How to respond to a show cause notice issued on not filling of the GST returns.

Introduction

Demand and recuperation can be commenced for quick-levy, non-levy, quick paid, non-paid, faulty refund, incorrect and wrong utilization of entering tax credit. All demand and recuperation lawsuits underne GST start with the issuance of a show cause notice note. This article discusses legal provisions pertaining to show cause notice under GST act.

GST could be an immense reform for the indirect taxation in India. It is something which the country has not seen post-Independence. GST can change indirect taxation, cut back complexities, and take away the cascading impact. Experts believe that it’ll have an enormous impact on all the businesses from huge to small, and alter the way the economy functions. To under the GST and present indirect taxation system, it requires an understanding of the filing of returns and the aftermath of non-compliance. Direct taxes (e.g. income tax) are levied directly from the person who owes the responsibility. It suggests that the tax burden cannot be shifted to anyone else. The liability of an indirect taxes on the opposite hand can be shifted to a different person. So, the person liable to pay the tax will collect the tax from somebody else and then pay it to the government. The GST tax falls in this class.

Why registration is important

Under GST regime GST-registration is mandatory even for small businesses Registration is not the solution for all but and many people don’t register because they want to keep the aggregate income. Therefore It’s necessary to notice that registering only, will not solve the problem of not paying taxes. Registration means people have got themselves recognized taxation system, after registration, it becomes easy for the government to keep a check on them.

On the other hand, it doesn’t let people do away with the taxable income. Therefore registration discourages people to evade taxes and helps the government to collect all the taxable income.

WHAT IS GST RETURN

A return is a document which contains the details of the income which a taxpayer is required to file with the tax administrative authorities. Tax authorities use this information to calculate tax liability.

Taxable individuals and entities under GST are obliged to file several GST returns. Under GST, return filing plays a very significant role. It works as a link between the taxpayer and the government. In the GST return, the taxpayer is obliged to provide specific information e.g. the particulars of business doings, an assertion of tax liability, reimbursement of taxes and other data specified under the law.

All returns in GST are to be filed electronically and the facility is to be delivered for the manual filing of GST returns, whereby the return may be set offline and uploaded on the GSTN by the remunerator or a help center.

Under the GST law, a standard remunerator will need to furnish three times monthly and one annual return. Moreover, the law provides separate returns for a payer registered under the composition theme, payer registered as an Input Service Distributor, someone liable to deduct or collect the tax.

WHO SHOULD FILE GST RETURNS

Registered persons who are assessable under GST are required to file GST returns. Therefore, any registered entity that has not crossed the exemption limit (i.e., Rs.20 lakhs across India, aside from Northeastern and Hill states whereby its Rs.10 lakhs) is not required to file a GST return until he crosses the exemption limit. However, once the exemption limit is crossed and the remunerator begins with filing GST returns, (there’s no assessable supplied created or received throughout a period) the remunerator is supposed to file a nil return. It shows that not filing GST isn’t a choice. Without filing the return of an amount, next return can’t be filed.

According to section 37(1) of GST act “Every registered person, other than an Input Service Distributor, a non-resident taxable person and a person paying tax under the provisions of section 10 or section 51 or section 52, shall furnish, electronically, in such form and manner as may be prescribed, the details of outward supplies of goods or services or both affected during a tax period on or before the tenth day of the month succeeding the said tax period and such details shall be communicated to the recipient of the said supplies within such time and in such manner as may be prescribed”.

Provided that the registered person shall not be allowed to furnish the details of outward supplies during the period from the eleventh day to the fifteenth day of the month succeeding the tax period.

Provided further that the Commissioner may, for reasons to be recorded in writing, by notification, extend the time limit for furnishing such details for such class of taxable persons as may be specified therein.

Provided also that any extension of time limit notified by the Commissioner of State tax or Commissioner of Union territory tax shall be deemed to be notified by the Commissioner.

Now the question arises that who all are registered entities? Every person who is registered under an earlier law can take registration under GST too. Wherever a registered business is transferred to somebody, the transferee shall take registration with the impact from the date of transfer. Registration is obligatory for anyone who makes an inter-state supply of products and/or services.

Furthermore, Registration is obligatory for Casual assessable Person, Non-Resident assessable Person, Agents of a distributor, Taxpayers paying tax under reverse charge mechanism, Input Service Distributors, E-commerce operator or aggregator and their suppliers, Person supplying online data and information access or retrieval services from an area outside to someone in India, apart from a registered assessable person.

SHOW CAUSE NOTICE ON NON COMPLIANCE WITH GST RETURN?

Section 73 of CGST Act deals with issuance of show cause notice to assesses for

1. Tax is unpaid/short paid or,
2. Refund is wrongly made or,
3. Input tax credit has been wrongly availed/ utilized

for any reason, other than fraud etc. i.e., there is no motive to evade tax. The proper officer (i.e., GST authorities) will serve a show cause notice on the taxpayer. They will be required to pay the amount due, along with interest and penalty.

All assessable persons registered in the ambit of GST are needed to file GST returns timely. The date and the type of return to be filed is based on the kind of GST registration obtained by the taxpayers. Regular taxpayers registered under GST have to file 3 GST returns a month specifically, GSTR-1, GSTR-2, and GSTR-3. Casual assessable persons, non-resident assessable persons, and taxpayers registered within the Composition theme need to file different types of GST returns on the due date.

GSTR-3A

As per the rule sixty-eighth of CGST rules, GSTR-3A could be a notice for not filing GST returns issued under the GST laws. A notice in type GSTR-3A shall be issued, electronically, to a registered entity who fails to furnish return under section 39 or section 42 or section 45 or section 52. GSTR-3A is issued by the GST department when a remunerator does not file GST returns continuously.

In the initial form of GSTR-3A notice, the remunerator is given a chance to file the unfinished GST returns with a penalty or interest and regularize GST compliance. It mandates the filing of GST return even if the business is closed or there aren’t any transactions during a month. Thus, if such a notice is received from the GST department, the remunerator should file any unfinished GST returns as soon as possible. Once the GST returns are filed and liabilities are cleared, the remunerator will apply for the cancellation, if there are no dealings with the business and the remunerator desires to discontinue GST compliance.

In any case, if the remunerator regularizes GST compliance within 15 days, the GST registration would be valid. Just in case the remunerator fails to reply to the above notice, GST registration may be canceled.

What if the GST Registration is canceled

After the cancellation, the show cause notice in type GSTR REG-17 would be issued. In such case, the remunerator is required to file the due GST returns within seven days, offer a written reply to the tax office regarding the explanation for the delay in filing of GST returns and appear before the involved officer personally on the date and time mentioned within the show cause notice.

In case the remunerator isn’t able to file GST returns, a reply citing reasons for the delay in filing GST return along with a request for extension may be submitted in writing. The licensed person under GST will have to appear before the tax officer for the non-public hearing and judge on a course of action.

2nd form of GSTR-3A notice is issued after the cancellation or surrender of a GST registration if the remunerator has not filed a GSTR-10 return within three months.

In case, the above notice has been issued by the GST department, then it is advisable to file a GSTR-10 return within fifteen days in conjunction with any penalty or fines, as applicable. Just in case the remunerator fails to reply to the above tax notice, the GST department may levy extra fines or penalty on the remunerator for non-compliance.

Steps to be followed while responding to a Show Cause Notice (SCN)

Step I

This is how you receive the show cause notice on your email. Here a person gets the SCN reference number which is needed to log in GST registration.

the

Step II

After the first stage, one needs to login to GST account by accessing GST official website. but even before that, the person has to select New Registration option from SERVICES. After doing this the following screen would pop up. Here, you’ll see Temporary Reference Number which is supposed to be filled with your details.

Step III

After following the above step you need to click on proceed thereafter you’ll get an OTP on your registered email id.

This is how you get OTP on your email id:-

Step IV

After submitting OTP you’ll see the following window on your screen:-

Step V

From the above web page, you need to select Application for filing registrations from the services option. It will look like the below picture:-

Step VI

After following the above instruction, a window will appear which will look like the following picture:-

Step VII

After filling above asked information, the window that pops up will be like this:-

Here you need to click on NO to the modification in registration.

Step VIII

After clicking on No, there would be some queries on the screen. You need to answer this query and after filling all the relevant information it has to be saved by clicking on the Save option.

The above seven steps are useful when a person wants to respond to the show cause notice.

Conclusion

GST is still in its salad days in India. It has both pros and cons which are to be taken into account while giving any opinion on GST. This article gives the details about the show cause notice which is issued a person when he does not comply with GST regulations. GST registration helps the government to identify tax evaders. GST act does not let a person go without paying the tax set by the government. Moreover if paying tax is the duty of citizens, tax collection is the right of government. The government should come up with every reasonable step which helps it to exercise this right.

LawSikho has created a telegram group for exchanging legal knowledge, referrals and various opportunities. You can click on this link and join:  

https://t.me/joinchat/J_0YrBa4IBSHdpuTfQO_sA

This article is written by Tushar Verma, Geeta Institute of Law, currently enrolled in the Ace your Internship course at Lawsikho

Introduction

Condonation of Delay Scheme 2018 came into existence on 29th December 2018 so as to provide one final opportunity to the directors of the defaulting companies who due to the reason of non-filing of financial statements and annual returns were held liable and disqualified. The default with the registrar of the companies continues for three years.

What would be considered as default?

The default is considered to happen when the directors for three years consecutively fail to file financial statements or annual returns with the registrar (MCA21). They shall no longer be able to access the online registry and a list of such directors will be published on the website of the ministry. As the result of above actions, directors filed a writ with the High Court to get stay on this decision.

What are the Documents/Compliances mandatory for the company to file?

In relation to the registrar

• The holding of the board meeting is necessary for the companies within 30 days of the incorporation. Minimum 2 meetings in each half year.

• E-form MGT-7 filing of an annual return within 60 days of holding of the AGM for the period of 1st April to 31st March.

• Financial statement of the year in E-form AOC-4 showing balance sheet and profit and loss account of the company.

• Every financial year director has to disclose his interest in the entity by filing the form MBP-1
• Every year director has to file in each financial year with the company disclosure of non-disqualification.
  

  Non- Registrar Compliance

• Filing periodic returns.

• Filing of income tax return (taxed with 30% and education cess extra)

• Regulatory assessment under various laws like environmental laws, labour laws, money laundering act etc.
• Quarterly TDS returns.

Condonation of Delay Scheme 2018

Legal framework prior to the scheme

Earlier before this scheme, Ministry of company affairs had launched a scheme called company law settlement scheme, 2014. The purpose of this scheme was to provide similar results. The scheme was applicable to defaulting companies enabling them to file belated documents. Fees and increased quantum of punishment were introduced in that scheme. In the new scheme, the government has launched a more strict action to identify approx. 3,00,000 directors associated with the defaulting companies.                      

Disqualification of directors

Disqualified and aggrieved directors made certain representations to Ministry of Corporate Affairs and also approached National Company Law Tribunal and High Courts for a stay. On listening to all representations regarding the stay, the central government has introduced the Condonation of Delay scheme 2018 serving as the last opportunity to the directors of the company to make their mistakes good and regularising the compliance before 31 March 2018.

The above deadline was then extended to 30th May 2018

Background of the Scheme

• Legally, companies registered under companies act 2013 are required to file annual returns and financial statement with the Ministry of corporate affairs on http://www.mca.gov.in portal neglecting to which is an offence.
• Whereas, if we talk about Rule 14 of the Companies (appointment and qualification) rules, 2014 disqualification must be informed by all the directors of the company.
• About 3,09,614 companies were identified in September 2017 who were in default of not filing of annual returns and financial statements on the ministry online portal. As far as the provisions of section 162(2) read with 167(1)(a) is concerned these directors were barred from using the ministry website and their names were published on the website too.
• So as to provide these directors with another and final opportunity central government exercising its powers under section 403, 459, 460 of the companies act, 2013 decided to introduce “the Condonation of Delay scheme 2018”.  

Relevant points in regards to Condonation of Delay Scheme 2018

The applicability of the scheme is to companies which are in default (other than those companies whose names had been struck off from the registrar of the companies under Section 248(5) of the Companies Act 2013. If you are the company whose name is still not struck down from the registrar of the companies then:

• The DIN numbers of the directors which were disabled previously will be temporarily enabled so that directors could file the documents.

• The company in default must pay out statutory fees prescribed as per the Section 403 of the Companies Act 2013 read with Companies (registration offices and fees) Rules, 2014 for filling these overdue documents.

• Application fees for filing the E-form CODS shall be Rs. 30,000/- (nominal for the defaulting directors)

• Those directors whose name is not found by the MCA21 registry records but are involved in the default, they shall not be able to reactivate their DIN numbers and would not be able to appoint as directors of any company. (A Nice step taken by the government)
• In case the defaulting companies whose name have been struck down under the provision of Section 248 and 252 of the companies act, 2013.

Filing of the annual returns as provided under Condonation of Delay Scheme 2018

As provided by the central government from 1st January 2018 to 30th April 2018 the defaulting companies can file following documents which include annual returns and the appointment of the auditor:

• For the intimation of the appointment of the auditor Form, 23B/ADT-1 shall be filled by the company.
• Companies having share capital must file form 20B/MGT-7 for annual returns disclosure.
• If the company is not having share capital than the filing of annual accounts can be done in Form- 21A/MGT-7.
• For submission of compliance certificate to the registrar fill form- 66.
• For filing of the balance sheet and profit and loss account form 23ACA, 23AC, 23ACA-XBRL, AOC-4 (Non-XBRL)AOC-4 (CFS) and AOC-4( in- XBRL).

What should directors keep in mind in connection with the Condonation of delay scheme?

Directors must keep in mind following points so as to comply with the above scheme which are as follows:

1. Disqualified directors shall have the opportunity to revive or reactivate their DIN number for a specific period and they have to fill all the necessary overdue forms due to which their default arises. If the director is unable to make good his default than he shall be disqualified for the period of 5 years.
2. The DIN numbers of the directors associated with the defaulting companies if found still overdue and not compliant with the scheme shall remain deactivated for the rest of the period scheme continues.
3. If the names of the defaulting companies are removed from the register of the company under section 248 of the act and who have filed for the revival of the company under section 252 of the act up to the date of the scheme director’s DIN shall be re-activated only on the orders of NCLT subject to company have filed all the overdue documents.

Conclusion

Directors are advised to ensure timely compliance with filing documents regarding their company so as to reduce these kinds of hassles. The compliance procedure is not too costly but the penalties for ignoring will cause you huge penalties and even lead to imprisonment. So as to dodge the cost of compliance, companies are reluctant to hire a CA or accountant. This may not prove to be a wise decision for these companies. Directors are the managers of the company and taking this thing into consideration government can lift the corporate veil and can punish the man behind which can be seen in the Condonation of the delay scheme 2018. This is a praisable step by the Ministry in regulating the procedures of the companies.