In this article, Utkarsh Sharma of RGNUL discusses what is judicial overreach with 5 leading cases on the issue.

5 Examples of Judicial Overreach in India

The role of Judiciary has always been under attack, majorly from the legislative branch, which feels that the courts are crossing their power and have become an extra-constitutional lawmaking body. They argue that the job of the judiciary is to interpret laws and not to make them and the judiciary in many stances have overlooked the legislative authority.

Judicial Activism Vs. Judicial Overreach

Many times these two terms are used by the people as synonyms, but we need to understand that these two words signify different meanings. There is a very thin line between judicial activism and judicial overreach, as when the activism crosses its limit and starts becoming judicial adventurism it takes the form of Judicial overreach. Whether the action is activism or overreach is based on the perception of the individuals. But the judiciary has always argued that due to legislative and executive underreach they have to step in and pass the directions.

Examples of Judicial Overreach

• Imposition of Patriotism in National Anthem Case.

The Supreme Court on December 2016, passed its judgment in the case of Shyam Narayan Chouksey v. Union of India, which makes it mandatory, that:

1. All the cinema halls in India shall play the National Anthem before the feature film starts.
2. All present in the hall are obliged to stand up to show respect to the National Anthem.
3. The entry and exit doors shall remain closed prior to the National Anthem is played or sung in the cinema hall so that no one can create any kind of disturbance.
4. The doors can be opened after the National Anthem is played or sung.
5. The National Flag should be displayed on the screen while the National Anthem is played in the hall.

A case of Judicial Overreach

1. Neglected the Bijoe Emmanuel Case – The court in the order have not referred to the landmark judgment in Bijoe Emmanuel case. In this case. In this case, three children were expelled from the school in Kerala for not singing the National anthem because their religion did not permit them to join any rituals except in their prayers to Jehovah. The court had ruled that there is no legal provision that obliges anyone to sing the anthem and ordered the school to take back three children it had expelled. The court has ignored the situations where the people may not be able to stand up for physical reasons, intellectual or religious reasons because they may consciously believe that their religious beliefs, prevent them from standing up.
2. Ignored the Uphaar Tragedy Case – In ruling that entry and exit doors be closed while playing the National Anthem, the Supreme Court ignores its own earlier judgment in the Uphaar tragedy case where the court had held that under no circumstances should the doors in a cinema be shut from the outside.
3. Implementation Issues – This order will face implementation issues as who will count how many people are standing and how many are sitting while the anthem is playing? Who will see if one can’t stand up due to physical problems or some other reasons? And then, what if there is an emergency? What if somebody urgently needs to go to the washroom?
4. Goes beyond the Prevention of Insults to National Honour Act, 1971 – The direction goes beyond the Prevention of Insults to National Honour Act, 1971, which says that no film, drama or show of any sort can have the National Anthem as part of the show.

• Proactive Censorship in case of Jolly LLB 2

In this case after the certification of the movie Jolly LLB 2 by the Central Board for Film Certification (CBFC), a petition was filed claiming that the film was in violation of Section 5B of the Cinematograph Act, 1952, which deals with the prevention of the certification of films that involve defamation or contempt of court. The Bombay High Court admitted the petition and appointed a committee to report. The Court also gives Committee the power to suggest the changes. After the recommendations by the committee, the Court ordered to cut four scenes from the movie and also directed the CBFC to re-certify the film. The reasoning given by the Court was that this was defamatory to the lawyer’s profession.

A case of Judicial Overreach

1. Unnecessary Interference – The Cinematograph Act, 1952 which deals with the provisions relating to the certification of films and makes it very clear that only the Board of Film Certification has the power to censor movies and suggests the cuts with an appeal lying to an Appellate Tribunal and under the Act, the Government also has revisional powers. Under the Cinematograph Act, the Courts have no power to certify, modify, or refuse certification of films.
2. Violation of Article 19(2) – The order of the court is seen as a restriction on freedom of speech and expression as provided under Article 19(2) of the Constitution. And as it also states that only a law can impose reasonable restrictions. It is pertinent to note that an order of a court does not come under the law for the purposes of Part III of the Constitution which defines fundamental rights. Thus, it can be said that the Bombay High Court’s order mandating excisions in Jolly LLB2 was passed without any authority.
3. The committee was Illegal – The Bombay High Court’s decision to set up a committee was not legal and without jurisdiction. The finding of contempt on the basis of trailer goes against a range of Supreme Court judgments that make it clear that films have to be seen as a whole. In fact, this was the exact reason that the Delhi High Court dismissed the PIL against Jolly LLB 1. The Committee acts as an entirely fresh censor board, and thus reduces the statutory Board itself to a nullity.
4. Contradicting order against the Delhi High Court Judgement – In 2013 also Jolly LLB 1, ran into legal trouble. A PIL was initiated in the Delhi High Court, asking the Court to direct the Film Certification Board to cancel the license. The Court, in this case, dismissed the PIL, as they find nothing of “public interest” in it, and also said that it would be premature as it had been filed purely on the basis of trailers. A further appeal to the Supreme Court was also dismissed with Justice Lodha memorably remarking, “if you don’t like it, don’t watch it.”

• Liquor Ban

In the Supreme Court, ruling on a PIL which was about road safety, has banned the sale of liquor at retail outlets, as also in hotels, restaurants, and bars, that are within 500m of any national or state highway.

A case of Judicial Overreach

1. Unnecessary Interference – The directive principles of state policy are policy issues which should be left to the government to decide. It is not the court’s job to force the government to implement them. These orders are felt to be against the spirit of separation of powers given by our constitution. It was an administrative matter where the decision rests with state governments. The court was not the appropriate authority for such decisions.
2. Not a fit case to use Article 142 – This was certainly not a fit case to invoke the extraordinary powers of the court using Article 142, which talks about “the Supreme Court in the exercise of its jurisdiction may pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it…” In the absence of any similar notification by any of the State governments, the court extended the ban to State highways as well. It will give rise to many problems such as how to measure 500m, how to reduce the impact and what about places like Goa, these all matters requires executive knowledge and requires the accountability of the governments.
3. Lacked Evidence – No empirical evidence was present before the court that by banning liquor sale on highways will reduce the deaths. It may be noted as found by the court from the statics of 2015, that the total percentage of accidental deaths caused due to drunken driving, was only 4.2% as against the 44.2% caused by over-speeding. So, there was no empirical reasoning behind the order.
4. Loss of Revenue – The order has caused much collateral damage for the governments. For state governments, there is a massive loss in the form of revenue collection. According to various estimates by the experts, suggests that state governments could lose as much as Rs 50,000 crore per annum.The problem becomes more noticeable by the fact that at least one-half, possibly two-thirds, of retail outlets, bars, restaurants, and hotels are located within a range of 500m of national or state highways. Due to this, some states have started even denotifying state highways as municipal roads.
5. Loss of Employment – Employment and livelihoods are expected to be badly affected by the order. The loss in business for hotels, restaurants, and bars will directly affect the jobs and indirectly will reduce the jobs in enterprises that form part of their supply chains. The court had itself held the right to employment as a basic right under Article 21. However, with the order of banning the sale of alcohol along highways will make a loss of employment to lakhs of people.

• The cancellation of telecom licenses in 2G case

After the CBI registered FIR against the officials of the Department of Telecom in 2G scam case, the Supreme Court ordered to cancel 122 telecom licenses and spectrum allocated to eight companies. The Supreme Court held that the process of allocation was flawed. It further directed the government to allocate national resources through auction only.

A case of Judicial Overreach

1. Rise in Non-Performing Assets – Rising non-performing assets (NPAs) are, to some extent, the result of the judicial decision of canceling the licenses. Courts failed to consider their impact on the economy. Due to this the telecom sector is, till today, reeling under the after-effects of the judgment. The balance-sheets of public sector banks are also adversely impacted as the defaults on bank loans have increased.
2. Neglected the Role of Legislative and Executive bodies – The economic decisions of a country are the sole domain of the legislative and executive bodies and the court, in this case, overreached their power, which impacted the economy heavily. Banks are not willing to lend to operators already heavily indebted and return on investment was inadequate to repay the debts.
3. Overlooked the consequences – The sector is in a debt of around Rs 5 lakh crore. Telenor, Etisalat, and Sistema have exited. Vodafone and Idea are intended to merge. Reliance is in deep trouble and has no choice except to exit.

• Lodha Committee report on the Board of Control for Cricket in India

The Lodha Panel was set up by the Supreme Court, following the allegations of corruption, match-fixing and betting scandals in Indian cricket. The committee was set up in an attempt to bring back law and order into the BCCI and the game of cricket. The recommendations made were aimed at making the reforms and changing the year-old elite formation of BCCI that ruled the Indian cricket at central and state levels.

The key recommendations of the committee are:

1. BCCI should come under RTI.
2. Cricket betting should be made legal.
3. More than two consecutive terms for holding office positions should be barred.
4. Ministers or government servants should not hold official positions in BCCI.
5. There shall be only one post per one person.
6. Only the cricket bodies that represent states should have full membership and voting rights in BCCI.
7. Other members of the board like All India Universities, Railway Sports Promotion Board etc. should be given the status of associate members without voting rights.

A case of Judicial overreach

1. Lodha committee had no authority – The BCCI is registered and governed by the Tamil Nadu Societies Act. And it also does not take money from the government and was an was not controlled by the central or any of the state government. The BCCI president, secretary, and other office-bearers are elected on the basis of its bye-laws. So, the Lodha committee has no authority to make the recommendations. The court could have instructed that the BCCI run in accordance with the provisions of the Societies Act.
2. Not the Courts job to run Sports bodies – It is not for the court to run a sports body or to prescribe how it should be run. The autonomy of the institutions should be respected. It is in the best interest of sports that bodies that look activities in these fields are given autonomy. External interference and violation of their autonomy are not good for the developments in these areas. If they have violated the rules or otherwise shown themselves to be unfit for their positions, they should be removed through the proper prescribed procedure.
3. Flawed Recommendations – With the one state one vote rule, the court has ignored the cricket history in India going back over a century has teams participating in the Ranji Trophy from Railways and Services. They have now been given a status of associate members with no voting rights. Sticking to its strict provision of geographical territory criteria, teams like Bombay, Baroda, Saurashtra, and others will now be wiped out.

Implications of Judicial Overreach

1. It destroys the spirit of the constitution as the democracy stands on the separation of powers between the organs.
2. It creates a conflict between the legislative and the judicial system. As the message which is conveyed with these decisions among the people is of legislative inactivity.
3. When Judicial activism helps in strengthening the people’s faith in the judiciary, the very act of overreach destroys it. As it appears an act of ‘tyranny of unelected’ in a democracy where elected representatives rule.
4. It reduces the trust of the people in public institutions which can be dangerous for democracy.
5. It is a waste of Judicial time, which can otherwise be utilized for hearing various important matters relating to public importance pending before the court.

References:

• http://www.thehindu.com/opinion/op-ed/article-142-and-the-need-for-judicial-restraint/article18474919.ece.
• https://www.indiatoday.in/india/story/2g-spectrum-verdict-what-happens-now-to-122-cancelled-telecom-licenses-1113292-2017-12-21.
• http://www.firstpost.com/firstcricket/sports-news/bcci-vs-lodha-committee-all-you-need-to-know-about-conflict-leading-to-scs-historic-decision-3036764.html.
• Shyam Narayan Chouksey v. Union of India, 2017 SCC OnLine SC 129.

Does your family own a business? Are you a student or young graduate eager to contribute to your family business in a big way? We can tell you some amazing things about how 2nd or 3rd generation entrepreneurs can make large-scale difference to a family business. The new generation can make or break it, and here are some things you can bring on the table that the older generation will absolutely love you for doing.

It is indeed a privilege if you are born in a business family. However, people who do not understand, think that you are lucky because you don’t have to worry about your future job. In reality, it is a huge pressure because you have to live up to the amazing success of your previous generation. However, you have a better idea than your friends about what your future may look like. You have time on your side. While everyone is busy running around trying to score jobs and holding them down, your privilege is that you can relentlessly train yourself so that when you join your family business, you can really take it forward to the next level.

So here is the big question. What should I learn so that I can make a noticeable and appreciable difference to my family business? At iPleaders, we have been lucky to observe many young people who had a family business background pursue our courses, especially Entrepreneurship Administration and Business Laws course and make remarkable contributions to their family businesses that completely changed the destiny of those businesses. Therefore, we had the fortune of seeing the development of some young scions of family businesses.

In this article, we will not only share some case studies regarding this but also tell you where you should aim to achieve this goal.

Before we go further, let me tell you a story of a student from the very first batch of the course. We cannot use her name as she has requested anonymity for the purpose of this article, as she does not want to come across as immodest to her family. She belongs to a family that has been exporting Lucknow Chikan works for more than 4 generations. Coming from a conservative background, getting herself a law degree was in itself a challenge. However, she managed to get one and to get a deeper perspective took up the Diploma course in Entrepreneurship Administration and Business Laws while she was in 3rd year of the law college. It was after taking up this course she realized that her family has been exporting the cloth through an exporter (middleman), who takes a significant cut just because he has an export license. She was able to get an export license directly in the name of her family business, cutting out the middleman. This meant a significant increase in the margins of profit. Although in her family women were previously not involved in the business much, now she is always consulted before important decisions. That is the power of knowing the law and regulations! What you can do with it when you have it I really cannot predict, but I cannot wait to see what happens.

A family business, however big or small can always be made better. Do you think Ambanis would have been successful enough had they just stuck to what Dhirubhai started? It’s all about value addition and adding a fresh perspective to what already exists. You can do it too. Here is a list of ideas you can help your family business with.

1# Help them with getting more capital

Can you imagine the kind of acceleration you can bring to the family business if you are able to raise a lot of capital? Every business needs more capital, but very few can actually access it. Capital can come in form or debt or investment. How will it be if you can help your family business to raise investments to expand further and faster? How about getting working capital loans at a very low-interest-rate? Can you ensure that the control of your family is not diluted, by an investment, by being vigilant about the paperwork?

The likeliness of business to grow significantly increases with more capital. However, raising capital for a family business is always a dilemma for most of the businessmen as they do not want any intervention in their business by a third party. Most of the family business does not accept private equity as private equity firms demand a certain stake in an exchange of the investment. In such a situation, is debt a better option? Or is equity an option at all?

As per a survey by PWC global, 76% of the family business owners said, “to grow significantly they would rely on their own capital, rather than relying on banks, external investors who might want a measure of control.” If your family business is running on the same orthodox mindset, how can you convince them to get external funding?

Shobana Kamineni, Vice Chairperson, Apollo Hospitals says, “We were one of the first Indian firms to get PE funding in the late ‘90s when India first opened up to foreign direct investment. But we thought about it carefully before we did it: we sat down as a family to discuss it because we knew things were going to change radically, and we’d have to be even more accountable, and willing to adapt. We also knew that PE works to a very different timescale to families: PE houses are looking for a quick return on their money.”

The above statement by Shobana has a great deal of insight to offer. First of all, you need to figure out the basic reason for which the funding is needed. Once you have figured that out, you need to figure out is it going to be patient funding or short term. You need to figure out whether you have a capital structure that can be accessed for future opportunities. Once you have figured that out, you need to figure out whether you want to go to the capital market or other private investment. As a legal advisor, you need to ensure that the terms of funding ensure that the source remains secure even if there is a change in the circumstances, both within the firm and outside market. You can also suggest PE funding from an investor who is backed up by family offices. These days a lot of family offices are interested to fund family businesses as these setups often meet PE investment criteria.

In fact, you might be in a position to negotiate the deal on behalf of your company, if you knew how to negotiate investment agreements or term loan agreements. Make sure that you know so much about these processes, terminology, and regulations, that you become the default person in the family who is approached for clarifications and help.

Just an idea for you here. You can actually include a buy/sell agreement where the PE firm can plan to exit using a predetermined timeline or an exit formula. This would ensure 100% control back to your family at a later point in time. In the end, you could actually find your family business and not compromise on the stake of your family in the business. All it would require is a partner which shares the same values as your family business.

Here are some courses that may be useful for you:

Investment law and institutional finance course – investment as well as loan from financial institutions

Due diligence process – due diligence will be conducted before every big investment or loan disbursal.

Corporate finance – knowledge of how the finance world works can be advantageous to a family business.

How to negotiate a term sheet for entrepreneurs – before any PE investment they first give you a term sheet. Negotiating it well is a critical task.

Foreign direct investment course – a specialized course on how FDI works and regulations.

How to list your company is foreign stock exchanges – This is for companies looking to go public.

2# Could you make more money from import/export?

If your family business is already into importing/exporting, great. If they are not, you may want to explore if there are export-import opportunities. Import and export can lead to new revenue generation and reduction in costs. Imports are important to procure goods that are either not available in India or are comparatively cheaper in other countries. Importing goods could add quality and variety to your family business and can be an effective cost-cutting/investment technique. Exports, on the other hand, is tapping into an altogether new geographical area which can add significantly to the scale of business and eventually profits. However, do you know all the compliances or requirements that you need to have in place for starting to import or export? Can you guide your family on it?

The very first thing you need for getting into import/export business is an Import Export Code  (IEC) issued. IEC is required in all the cases of import/export except if your business falls under the list of prohibited goods/services. It is actually pretty easy to get an IEC registered. All you need to do is go and register on DGFT website and apply for IEC with the following documents :

1. Company’s/Personal PAN Card
2. Photograph of the applicant
3. Copy of canceled cheque from the current account.

After obtaining the import/export certificate you need to apply for Registration Cum Membership Certificate (RCMC) from the concerned Export Promotion Council for getting authorization to import/export or any other benefits. The best part about the process is, it is hassle-free and takes maximum a week to get this authorization. Once this is done, you can freely import/export your good unless it falls under restricted, prohibited or state trading enterprises. However, you need to also ensure that you are well acquainted with various kinds of duty that are levied on such import/export and the process of valuation for the same. There are also a lot of regulations and procedures, knowing which will provide you with a serious advantage in exim business. You can rapidly gain practical knowledge about exim laws and regulations by taking up courses like these which can enable you to know much more about making your family business truly global.

3# Can you recommend franchising as an option?

In 1940, Richard and Maurice opened a small drive-in cafe in San Bernardino, California. This family business offered a 25-item menu. While they were doing sufficient for themselves, they decided to close down and opened 8 years later, with a changed and cheaper menu and faster delivery. Neil Phoenix, walked into the store and liked the concept and decided to become its first franchise owner at $1,000 dollars. In 1954 another milkshake machine salesman appeared on board, and said to himself, “this idea can be sold anywhere, anywhere.” This led to him taking the business franchising rights and the current restaurant has more than 31,000 franchises in 119 countries. The family business, now a fast food franchising giant is none other than McDonalds.

You don’t have to be a fast food supplier or a garment or cosmetic supplier to be able to franchise. You can practically franchise almost any business that has a good reputation or remarkable core product. Major brands like Kidzee, Delhi Public School, Dr. Lal’s Path Lab, Subway, Nike, Adidas are examples of franchise businesses. It is actually a simple yet very effective process to expand your organization and profits.

The very first requirement for expanding yourself is a registered trademark, under which your business would run. Once the trademark is registered, you need to simply execute written franchise agreements covering all important aspects of the business.

Imagine you enter into a franchise agreement and the franchisee after learning your practices, your trade secrets and organizational structure decide to exit the franchise and start something of his own. Will that not be a total betrayal and a loss of revenues? What if the franchisee starts to underreport revenues so that you get less money? What if they start providing services of pathetic quality and damage your brand as a result? A well drafted and properly negotiated franchise agreement can save you from all those hurdles. A classic franchise agreement should necessarily include the following clauses :

1. Proprietary marks or trademarks the franchisee can use
2. Licenses or permissions the franchisee must obtain or can use from the franchisor
3. Operation standards
4. Quality standards
5. Training and assistance from the franchisor and its use.
6. Consideration for granting franchisee
7. Franchise license fee
8. Marketing assistance from Franchisor and its use.
9. Products or Services that can be offered by the Franchisee
10. Franchisee obligations
11. Franchisor obligations
12. Terms of the franchise agreement
13. Tenure of the franchise agreement
14. Non-compete clause
15. Non-disclosure clause

The Entrepreneurship Administration and Business Laws course in the best place to learn the skills you will need to successfully run and grow a franchise model business.

4# Most businesses can gain massive competitive advantage by entering into better contracts

Contracts have a very important role to play in any organization. Small family businesses generally run on goodwill and rapport with its vendors or clients. In many situations, these businesses suffer massively, in case one of the parties denies his duty. A friend who runs a printing business in Bhopal entered into a business deal to print material worth 10 lakhs. He started the printing work on the assurance that payment shall be done once the assignment is complete. However, mid-way he was told to discontinue the assignment. He could not claim any compensation in absence of a contract.

Imagine, what power you can hold by executing a contract which will bind the other party and they can’t escape by twisting the terms. The best part about implementing a contract is that you have all the terms in black and white and once the agreement is signed and entered into, no one can deny those terms, make false claims, allege wrong facts or put new obligations on you, provided that the contract is well drafted.

In India, many people don’t think contracts are useful because it can take a lot of time and money to enforce a contract which often does not make sense practically. However, with the advent of technology and business now you have really amazing solutions like justiceinsitute.in and xjudges.com where you can start an arbitration online at a minimum cost and very little time. The threat of enforcement itself often helps to prevent a breach of contract. You can practically protect yourself from a plethora of issues like labor and employee, IP protection, competition, and non-disclosure etc. by entering into well-drafted contracts that can be enforced with low-cost thanks to online arbitration.

Remember, a contract is the biggest tool in the hands of the business. Can you be the master of perfecting the art to use it? Even Steve Jobs said that every modern man must learn how to read a contract. This is definitely true about every modern business person or even a professional.

Here is a course where you can learn about how to draft and negotiate contracts.

Here is a specific course on technology contracts.

You can also opt for this course of Arbitration.

5# Improve compliances and licenses

Did you know that companies with better corporate governance and compliance regime receive a premium on the stock exchange because investors prefer such stocks? Such companies are less risky, whether private or public. You can help your family business to develop a strong culture of corporate governance and compliance. Your business should have access to a comprehensive list of laws and regulations that apply to you so that you can identify ahead of time all the troubles that your business might get into. Also, a good idea will be to create a compliance handbook. Isn’t prevention better than cure? Here are some of the facts that can blow your mind :

1. Every 2nd business receives an Income Tax Notice for non-compliance.
2. 3 out of 7 companies find a place in the defaulters’ list of ROC for non-compliances.
3. India is the 7th most non-compliant country in the world.

A case study by Taxmantra recounts how a company which was incorporated in 2007, incurred a huge liability of 80,000-90,000 by simply forgetting to file financial statements with the ROC, which could have been easily done in Rs. 900 per year on timely submissions. Can you help your family business with compliance? Here is a list of some of the laws you need to ensure your company is compliant with :

1. Companies Act and Rules
2. Tax and GST compliances
3. Labour and Employee Compliances
4. Intellectual Property Laws
5. SEBI and RBI compliances

Apart from all these compliances, there will also be a list of licenses that you would need to effectively run your business. It is your duty to ensure that all these licenses are up to date, and timely renewed.

Apart from these, there are a couple of other ways you can ensure that your family business is progressing and well protected. You can ensure that your business’s IP is well protected, the tax benefits are availed well in time, and government’s programmes and initiatives are benefitted from.

However, all of this cannot be achieved in a day. You need to be patient, and open to learning. Remember, joining a family business is a greater responsibility than a job because here your actions will directly affect the business and your family too.  You need to be constantly updated and be well aware of all relevant issues. Being a business owner is a tough job.

This article is written by Ramanuj Mukherjee, CEO and Co-Founder at iPleaders.

Do you know that feeling? It’s like there are some great things you want to do in your life. Maybe you want to buy an expensive thing for yourself. Maybe you want to take a bit of risk and start a new company instead of working for your boss. Maybe you want to dedicate your life to music, cricket or something similar. However, your parents, wife or somebody else will not allow you. Maybe you want to do some crazy and bold work that will change the industry you work in, but your boss doesn’t approve of your plans. Hence, you never get to do it. You grudgingly continue with your life just the way it always was, and the grand plan just a daydream. It’s a lollipop that you suck on from time to time, but you will never do it because of your parents. Or wife. Or boss. Or the local politicians. Maybe someday….

Well, if you are waiting for permission from other people to take care of yourself, to take risk, to make art, to make world shattering movies, to be a champion, to be an iconoclast, to stand up and be counted, then isn’t that ironic? If you cannot face the people who love you, care for you, associate with you or hire you, and show them why you need to take that risk, or make a bold move or take that foreign trip or play cricket at the expense of studies, or whatever it is that you want to do, then who else are you going to convince in the world?

Why do people who wait for permission of other people do not take things in their hand and just do it? After all, didn’t all the successful icons of human history just do that?

Would Narendra Modi be Prime Minister of India if he didn’t run away from home to join politics, leaving behind a wife from a marriage that was forced upon him? Did he wait for the permission from his family to do so?

Did Gandhi wait for his wife’s permission and father’s blessing to start working with indigo farmers in Champaran and launching a satyagraha against the Government in a remote place in Bihar? I guess not.

Did Satyajit Ray wait for his teachers to tell him what he should do with his life? Which teacher could have told him to become a great filmmaker who will tell the real stories of India on celluloid?

When I told my parents that I want to be a lawyer, they were very upset. My father was disappointed like I have never seen him. My parents named me after the famous mathematician Srinivas Ramanujan. They wanted me to be a scientist. Or at least an engineer. A doctor would have been some sort of acceptable compromise. However, I refused to write even the WBJEE though they pleaded with me. I refused. They tried all the possible tricks in the books available only to Indian parents, and all of it failed because my clarity was not going to be muddled.

I was clear, I want to study law. I was clear that it is a good career and it seemed like the sort of thing I will like to train myself into. I won them over eventually. My father even paid for me to go to a tuition for law entrance tests. However, when push came to shove, I made it clear that I am ready to leave the house and live on my own if needed, but I am going to study law one way or the other.

When I decided to quit a well paying law firm job to start my own startup company, with nothing more than my last paycheck in my pocket, they were scared. So was I. They tried to convince me to work for a year or two more and save up some cash before I jump headfirst into the very uncertain world of startups. I told them that I am not asking for their permission, but I called to inform them of my decision. I told them I know what I am doing and I will be fine. They found assurance in my self-assuredness.

You may think that this is a matter of being old enough or successful enough to do as you please. However, it is really not. It is about whether you take your own decisions or look at others to give you permission. Does it really matter if you are young or old? I have seen young children do things without waiting for anyone’s permission. I have seen old people, after a lifetime of worldly experience, still waiting for permission from others to do what they want to do, deserve to do or dream to do.

I resolved this issue with permissions quite early. When I was a kid, still at the age of 14, I wanted to go for a trek. I wanted to take my sister with me too. My parents were mortified. They never went on a trek themselves. To them the idea that two of us, although with a larger group, will go through forests for days and live in tents was crazy because they never had this experience themselves. They refused permission.

Over the next two weeks, I and my sister coaxed, educated and convinced my parents, one at a time, until they were relatively open to the idea. Then we had them meet the organizers, and eventually won the right to go for our first camping cum trekking trip of our life.

Yes, even kids do not have to wait for anyone’s permission for what they really want to do. They get it, one way or the other. And there are lots of well qualified adults waiting on the sidelines of their own life because someone said no.

My father told me an amazing story. When he got his first salary (in the government job, at the age of 30, a job that he held till he retired at 62), he went and bought a pair of expensive shoes for himself. When he came home, his father (my grandfather) asked him what did he do with the money. When my father told his father that he spent most of it on a shoe, my grandfather rebuked him and told him to be a responsible person. His joy of buying the shoes he always wanted to buy was snuffed out, replaced with guilt. While I understand the pragmatism of that move, I believe this is why my father never spent any money on himself in the rest of his life. He does not enjoy a meal at a 5 star hotel today even though his children, relatively well off, would take him there if he finds out how much it costs. He just cannot appreciate expensive gifts. He lived his life as if he was forever denied permission to enjoy luxury in his life.

Everyone has a different story, but it is worth looking if you are waiting for permission in some area of your life. Or perhaps, maybe you are living your life as if you have been denied permission forever. We all have some of those. I was denied permission by my mother to learn dancing. She thought it will “ruin me”, whatever that may mean. Even today at a party if I see a good dancer, I feel a pang of jealousy, but I have never taken the initiative to actually learn dancing.

My mother is not around to stop me from joining a dance class. It is just in my head. However, it is much more difficult when you have to actually, formally, get the permission to do what you want to do. The key is to not wait for the permission for your action.

What are you doing to get to the yes? What are you ready to give up to get to the yes? To what extent will you do to achieve your dreams?

We meet, talk to and counsel many law students and young lawyers who want to be successful lawyers. They have really big dreams. They want to be top corporate lawyers, entrepreneurs, judges and movers and shakers of the legal industry.

However, when we ask them what they are doing to achieve those goals, they rarely have much to say. They are usually just following the usual law school flow of life, not really going to extra mile a day towards achieving their dreams.

If I tell you that we offer some courses that can help you to go that extra mile towards becoming a great lawyer, would you check it out? If I say it will cost a few thousand rupees and 4 hours a week of your time, will you be ready to go so far to make your dreams come true?

If yes, do check out onlinecourses.nujs.edu. You don’t need anybody’s permission to learn more, to acquire new skills, to apply them or to become successful as a lawyer. If you are really good at it, you will be hired. By employers, by clients. Why should you wait to become good at what you want to do eventually?

In this article, Utkarsh Sharma of RGNUL discusses Guidelines for Computer-Related Inventions in India.

The Guideline for the Examination of Computer-Related Inventions has been issued by the Office of the Controller General of Patents, Designs, and Trademarks. For many years, the regime of Computer-Related Inventions in India has remained unclear, as Section. 3(k) of the Patents Act 1970, excludes the patentability of computer programmes per se. But with the introduction of these guidelines, manufacturing, and investment have now become new buzzwords in the Indian business vocabulary. The initiatives of government such as Digital India and Make in India campaigns have also contributed in a great way. These campaigns worked for creating a welcoming environment for foreign corporations seeking to invest and manufacture in India. These foreign players generally remain concerned about the IP rights protection in India.

What are Computer-Related Inventions (CRIs)?

In the recent years, the Office of the Controller General of Patents, Designs, and Trademarks has issued multiple sets of guidelines interpreting the scope of computer-related inventions and their protection in India.

As per the Guidelines for Examination of Computer-Related Inventions by the office of the Controller General of Patents, Designs, and Trademarks, the computer Related Inventions are defined as those that involve:

• The use of computers
• Computer networks
• Other programmable apparatus.
• Inventions with one or more features that are realized wholly or partially by means of a computer programme.

Legal Nature of the Document

These guidelines by the office of the Controller General of Patents, Designs, and Trademarks do not constitute any rulemaking. In case if there is any conflict between the provisions of the Patents Act, 1970 or the Rules made thereunder and guidelines, the said provisions of the Act and Rules will prevail over these guidelines. These guidelines are subject to revision from time to time based on interpretations by Courts of law, statutory amendments and valuable inputs from the stakeholders. The merits of such guidelines being binding on the patent applicants are questionable since they neither supersede the Act nor the precedents. However, one can argue that these guidelines may be binding on the patent examiners. Nevertheless, these guidelines have significant practical implications. The examiners of the patents are expected to follow these guidelines while examining CRI. Therefore, they are rational while issuing examination reports, granting or rejecting patents to CRI will likely be in line with these guidelines. These guidelines act as an indirect reflection of the government’s stand on the patentability of the CRIs.

What are the requirements to determine the patentability of CRIs?

In order to make the computer-related invention patentable, one needs to understand various requirements, which are needed to be followed:

• Novelty – It is understood from the meaning of the word novelty, which means, the quality of being new, original, or unusual. It is the foremost requirement to determine the patentability of any invention. The criterion to judge the novelty can be understood from various provisions of:    
  1. Indian Patents Act, 1970
  2. Chapter 08.03.02 of the Patent Manual, 2008.
• Inventive Step – In accordance with the provisions of section 2(1)(ja) of The Patents Act, 1970,  “inventive step” means a feature of an invention that involves technical advance as compared to the existing knowledge or having economic significance or both and that makes the invention not obvious to a person skilled in the art.

Supreme Court of India on inventive step:

Hon’ble Supreme Court in Biswanath Prasad Radhey Shyam vs Hindustan Metal Industries Ltd (AIR 1982 SC 1444), the following points need to be objectively judged to ascertain, looking at the invention as a whole, whether the invention does have an inventive step or not:

1. Identify the “person skilled in the art”, i.e competent craftsman or engineer as distinguished from a mere artisan.
2. Identify the relevant common general knowledge of that person at the priority date.
3. Identify the inventive concept of the claim in question or if that cannot readily be done, construe it.
4. Identify what, if any, differences exist between the matter cited as forming part of the “state of the art” and the inventive concept of the claim or the claim as construed.

• Industrial Applicability – Industrial Applicability has been defined in section 2(1)(ac) of Indian Patents Act, 1970 as “capable of industrial application”, in relation to an invention, means that the invention is capable of being made or used in an industry. The invention is required to be of industrial applicability or industrial application. It should have workability and usefulness in the industrial application to be eligible for the patent.
• Sufficiency of Disclosure – The requirement of “What” (is the invention) and “How” (to perform it) must be satisfied. The complete disclosure of invention must be made to meet the requirements of Indian Patent Act, 1960. The description made must be unambiguous, clear, correct and accurate.

Things to be kept in mind while making a Claim

• The claims should clearly define the scope of the invention.
• The specification should be clear and succinct and the claim should be fairly based on the matter disclosed in the specification.
• The claim should be explained such that, to ascertain the substance of the claim without wholly relying on the forms and types of the claims.

What all is not patentable?

According to the guidelines issued by the office of the Controller General of Patents, Designs, and Trademarks, below mentioned are excluded from patentability under Computer-Related Inventions (CRIs):

• A mathematical or business method or a computer programme per se or algorithms.
• A literary, dramatic, musical or artistic work or any other aesthetic creation whatsoever including cinematographic works and television productions.
• A mere scheme or rule or method of performing mental act or method of playing a game.
• A presentation of information.
• The topography of integrated circuits.

How to determine the excluded subject matters relating to CRIs

The below mentioned are excluded from patentability and if one’s claim falls in any of the below-mentioned categories, it will not be patentable.

• Claims directed as “Mathematical Method”
  • Mathematical methods, like a method of calculation, formulation of equations, finding roots of numbers and all other similar acts of mental skill are, not patentable.
  • Mere manipulations of an abstract idea or solving purely mathematical problem/equations without specifying a practical application also attract the exclusion under this category.
  • Below mentioned does not come under exclusion:
    i. Encoding
    ii. Reducing noise in communications/electrical/electronic systems
    iii. Encrypting/ Decrypting electronic
• Claims directed as “Business Method”
  • The claims drafted not directly as “business methods” but apparently with some unspecified means are held non-patentable.
  • If the claimed subject matter specifies an apparatus and/or a technical process for carrying out the invention(even partly), the claims shall be examined as a whole.
  • When a claim is “business methods” in substance, it is not to be considered a patentable subject matter.
  • Mere presence of words like, “enterprise”, “business”, “business rules”, “supply chain”, “order”, “sales”, “transactions”, “commerce”, “payment”, etc. in the claims may not lead to conclusion of an invention being just a “Business Method”.
  • If the subject matter is essentially about carrying out business/ trade/ financial activity/ transaction and/or a method of buying/selling goods through the web (e.g. providing web service functionality), the same should be treated as a business method and shall not be patentable.
• Claims directed as “Algorithm”
  • A set of rules or procedures or any sequence of steps
  • Any method expressed by way of a finite list of defined instructions, whether for solving a problem, And
  • Whether employing a logical, arithmetical or computational method, recursive or otherwise, are excluded from patentability.
• Claims directed as “Computer Programme per se”

Claims directed at are not patentable.

• • Computer programmes
  • Set of instructions
  • Routines and subroutines.
  • Computer programme products
  • Storage Medium having instructions
  • Database
  • Computer Memory with the instruction stored in a computer-readable medium.

• A literary, dramatic, musical or artistic work or any other aesthetic creation whatsoever including cinematographic works and television productions.
  • As per the procedures laid out in chapter 08.03.05.11 of the Patent Manual.
    
• A mere scheme or rule or method of performing mental act(s) or a method of playing game(s)
• • As per the procedures laid out in chapter 08.03.05.12 of the Patent Manual.
• Presentation of information
• • As per the procedures laid out in chapter 08.03.05.13 of the Patent Manual.
• Topography of integrated circuits
• • As per the procedures laid out in chapter 08.03.05.14 of the Patent Manual.

The benefits of patent protection

• Ensures the inventors to get a reasonable return on their commercially successful innovations.
• Make easier to establish fruitful business collaborations for innovation-based startups and small businesses.
• Helps in promoting the knowledge sharing through patent disclosure, itself an important driver of innovation.
• It also helps in attracting investment partners and supports business expansion.

References:

1. http://www.ipindia.nic.in/writereaddata/Portal/Images/pdf/Revised__Guidelines_for_Examination_of_Computer-related_Inventions_CRI__.pdf.
2. http://www.mondaq.com/india/x/615532/Patent/Revised+Guidelines+for+Examination+of+Computerrelated+Inventions+CRIs.
3. https://www.lakshmisri.com/News-and-Publications/Publications/Articles/IPR/guidelines-for-patentability-of-computer-related-inventions-is-this-the-final-chapter.
4. https://www.lexology.com/library/detail.aspx?g=3b6560ab-9e0f-45c7-b18a-6fff7d359324.

If you are a law student you might have been approached by that ambitious friend of yours, who is planning to open a startup or has registered one, and now is puzzled by the rigmarole of legal compliances. He probably doesn’t understand the complex legal jargon and the google’s vastness has added on to his confusion. The exorbitant costs that the lawyers might be charging to advise him are out of his budget. He can’t pay INR 15000 to draft a contract.  

He finally turns to you, in a hope that your last 5 years at law school have enabled you to help him out of this situation. Can’t you charge him INR 5000 instead and make that contract? After all, if he could learn to code and start building software while in college, surely good law students also know how to draft contracts and advise entrepreneurs, right?

Little does he know that academics in a law school is way different than application of the law in the real world. He probably is unaware that you just sat through the nights to clear your papers, and 2 out of your 5 projects were quite plagiarized. You survived viva after viva thanks to chits passed by your friends that then you passed on to others, and your ‘intellectual debates’ on social media are usually informed by newspaper reports.

Coming back to help your friend, as much as you want to do it, you realize there are just two ways to go about it. One, to either accept you don’t know about it and look like a complete fool or confuse him further so that he doesn’t call you again.

Is there a third option? Could you actually learn the practical aspects of business laws while still in college and start helping real-life entrepreneurs? Could you earn some money while doing so although you are just a college student? Have you considered that all these could give you a massive advantage when it comes to getting a job and making it big as a corporate lawyer if you want to? Given the kind of startup boom that India is witnessing right now, you can actually become a full-time startup advisor. Many law firms in the last few years have made a fortune advising on venture capital investments after all.

Anyway, let’s not get too far ahead of ourselves. Let me help you with certain basics and not so basic things that you can help your friend with and make yourself look like the legal dexter in front of your peers. And yes, if you do it well you can start earning too, like many of our students reported.

1# Incorporation of the company

You might have heard of the type of companies and about registering a company with the RoC. However, your friend probably might be sweating over even identifying what kind of entity (partnership, LLP, OPC or Pvt Ltd?) to register as he might be unaware of the risks, advantages, and costs associated with each kind of entity. It is very important that you suggest to him to register his startup as a certain type, depending on objectives and circumstances. For example, a small budget company could probably start as an LLP, or a private limited company if the goal is to seek venture capital in times to come. Here is a basic chart to get you started.

2# Co- founders agreement

In most of the cases, your startup friend must have another enthusiastic “best friend” of his partnering up with him on this ambitious project. He could be sure that this best friend has stood by him through thick and thin, and will vouch that nothing can ever go wrong with them. However, you might want to raise some questions about this, before giving him an advice on the co-founders agreement. First, remind him that co-founder conflict is the top reason for startups shutting down. Second, ask him to watch Social Network, where Mark Zuckerberg and Eduardo Saverin were great friends in college until one of them screwed the other out of Facebook. Here is a TechCrunch article by a former Y-Combinator partner that gives some practical advice on how to manage co-founder conflicts and credits it as the biggest danger for startup founders to look out for.

Let’s take an imaginary example. You and your extremely enthusiastic friend start up a business of pizza delivery. You are the chef and he has decided to take care of the rest of the work. You know he is the right choice because he has always boasted to be a perfect manager of things, and he perfectly organized the most amazing trip you and your group of friends have been to. Moreover, your friendship with him over the years has brought you guys extremely close to each other. You are working extremely hard to make it work and are coming up with new recipes every night. However, your friend is visibly not contributing as much. He has been saying “it will reach by tomorrow,”every time you ask him about the new menu and kitchen equipment for which you guys already paid. The labor he has managed to hire is overcharging and not ready to work. Marketing plans are still in form of rough papers of what you discussed with him during early planning days. What will you do? What if the business starts to run and do well but 3 years down the line he loses interest in the food business and wants to become a yoga teacher instead?

If you are a budding entrepreneur, you must have seen a not so famous, but amazing movie called Rocket Singh – Salesman of the year. For a minute imagine yourself to be the owner of the computer manufacturing company, and Rocket Singh to be your co-founder. Now imagine, looking at your business idea, while working in your company as a co-founder, he also opens up another business on the side that competes with yours. He has tapped into all your flaws and made a firm providing better services to whom you are losing your major clients. You ask him to leave your company. Can he refuse to leave? In absence of a co-founder’s agreement, can you force him to shut his firm? Or claim any damages? Do you know a way to ensure that this does not happen in the future?

Let’s take another example. You and your co-founder friend started a website to write about politically unbiased news. The sole aim of this initiative was to provide get rid of paid media reports to get rid of political polarization. The first few years went extremely smooth and you gained immense popularity in the media circuit. While you got busy with marketing and sales, your friend handled content creation and editing. However, one fine day you realized that most of the reports on your website are not unbiased at all. Your ‘efficient’ co-founder has taken a huge donation from the ruling party. Can your conscience allow you to continue with him? What can you do?

These are not imaginary situations at all. These are very common situations that I have actually seen happening in various startups.

If you haven’t done it yet, it is the time that your startup friend and his co-founder need to sit and set the rules in writing, and then seal it legally with a co-founders agreement. A co-founders agreement is a clear set of rules and understanding between the founders, in black and white, which play an extremely crucial role in safeguarding both of your friend’s, and his ventures interests.

There can be a number of issues between the co-founders. Issues like who the key contributor effectuating money generation? Who is doing more work? Or even usual policy related disagreements turning into a major fight. These are some of the issues that might not just take the company down but also ruin the relationship between two partners. A co-founders agreement can pre-empt all such circumstances.

Imagine how happy your friend will be one day when he actually has a conflict situation and your agreement saves the day. That’s how amazing reputation is built.

3# Registration with startup India

We are thankfully living in an era where most of the procedure has become online. Ask your friend to register with startup India website, and upload all the documents and submit the application. Startup India campaign is a major boost for most of the startups who are trying to establish themselves. The benefits range from permissibility for self-certification, a holiday from inspections for a period of 3 years, and a lot more.

Following are the benefits of registering your firm with the startup India campaign.

1. A registration with startup India campaign can get you rid of labor law inspection and consistency with environmental law compliance, post self-certification.
2. Funding of patent defense and rebate up to 80% of the costs of obtaining the patent. Payment of the fees of facilitator and faster IPR registration.
3. Availability of single clearance window for registrations, clearances, and approvals.
4. Manufacturing startups exempted from “turnover/prior experience without any relaxation in quality standards.”
5. Tax exemption for the first three years.

Make sure that you tell your friend about the following list of documents he needs to be ready with to ensure a hassle-free registration :

1. a) Letter of recommendation

1. A recommendation of the incubator in the DIPP format or,
2. A letter of support by the incubator in case the funding is under some government scheme or policy or,
3. A letter of recommendation by the incubator, recognized by DIPP or,
4. A letter of funding of at least 20% by incubation fund/  angel fund, private equity fund/ accelerator/angel network, duly registered with SEBI endorsing the nature of startup or,
5. Copy of the patent publication in the Indian Patent Office.
6. b) Certificate of Registration/incorporation
7. c) Statement of business (brief description of your business)
8. d) Certification by Inter-Ministerial board or recognition by DIPP (To avail tax exemptions)
9. e) Self Certification

4# Basics of Taxation

You might have studied tax, but the latest GST update might have ruined it for you and probably your faculty too. However, more than you, your startup friend might be fretting over GST. Here is all you need to tell your friend about taxes :

1. Remind them of two most important dates. 30th September of every year to file the Income-tax returns and exactly a month later, i.e., 30th October, to file the financial statements with the ROC.
2. Ask them to register on online GST portal and get a GSTN. Further, in order to ensure that the compliances are taken care of, make sure to guide them to link aadhar and pan to the account.
3. If your friend is yet to plan a startup or has started his venture after 2016, he gets a tax holiday for 3 years on his profit. Which means if its total revenue does not exceed 25 Crores, he will be exempted from paying taxes for the first 3 years of his establishment.
4. In case your friend startup has 50% of the investment through shareholding or up to 50 Lakh or investment, they will be treated as mutual funds, thereby exempting from tax.

5# Labour laws, Employment Policies and Employee Contracts

Every organization, big or small is obligated to adhere to labor laws. It is simple when you start an organization, you hire individuals to take care of various functions and tasks. Your friend regardless of the size of the organization needs to know about all the laws he will have to comply with to take services from any of these individuals.

However, here is a tip you can specifically give to your friend, that not many would be able to give. If your friend is incorporating his startup with the Start-up India initiative, he can give an express declaration under these 9 labor laws, that can exempt himself from labor inspection. This exemption can be extended for two years by merely filing a self-certified declaration for the two consecutive years.  :

1. Building and Other Constructions Workers’ (Regulation of Employment and Conditions of Service) Act, 1996
2. The Contract Labour (Regulation and Abolition) Act, 1970
3. The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
4. The Employees’ State Insurance Act, 1948.
5. The Industrial Disputes Act, 1947
6. The Industrial Employment (Standing Orders) Act, 1946
7. The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979
8. The Payment of Gratuity Act, 1972
9. The Trade Union Act, 1926

You can also guide your friend on the way to draft an attractive employee policy. Most of the start-ups engage various freelancers and consultants along with the full-time employees. A stable employee policy will cover both the parties and ensure that the organization’s and employees’ concerns are taken care of. An attractive employee policy also attracts talent and can act as a major factor for boosting an employee’s loyalty and productivity towards the organization.

It is a common practice for startups to hire from the pool of their friends. It is easier to often induct them and align them with the objective of the firm as their psyche and talents are no mystery to the founders. However, in case of non-productivity or any other issue at a later point in time, it becomes even more difficult to point it out to them. Decide for yourself, your friend has joined you for work and he is not as effective as you assumed him to be. Will you be able to point that out to him without affecting your friendship?

In order to avoid such a situation, you need to recommend your friend that there must be an employment contract and a set of policies from the very beginning of his startup. This will ensure a system of right checks and balances and the contract would do the job of eliminating awkwardness and formalizing the relationship of your friend with his friends, at least at the workplace.

There are a series of other issues like financial planning, licenses, CSR, winding up, audit compliances, IPR, winding up etc., that you need to learn and advise your friend up on. You can sign up for courses like these and become the ultimate go-to person for many people like your friend and earn extra pocket money. Deeper into the subject can also help you carve out a career in corporate law or maybe starting your own law firm for startups right after your law school.

After all, this deed of yours to help your friend in need can be your first step to something much bigger, much better, in your own career.

Just imagine what is possible, if you have the right skills and the right knowledge to help the budding entrepreneurs.

If you enjoyed this knowledge, you will definitely love to learn about business laws in a more structured way. If you want to learn more practical skills and knowledge that you can use to advise startups and other businesses, check out the syllabus of this business law course.