In this article, Janvi Ahuja of SLS Hyderabad discusses how to stop illegal sand mining.

How to stop illegal sand mining?

Introduction

Sand is a mineral as defined under Section 3(e) of Mines and Minerals Development and Regulation Act, 1957 (MMDR Act). This act empowers government and state to make any laws to prevent illegal mining.

Sand mining is a practice that is used to extract sand, mainly through open pit. This demand is exalting at alarming rates a result of ever increasing building construction projects and other infrastructural development. In the view of high demand there is illegal means for sand extraction. Sand mining is also done on beach, inland dunes and dredged from ocean beds and river beds. Sand mining is done to extract minerals such as Rutile, Ilmenite and Zircon which contain useful elements Titanium and Zirconium. The main sources of sand are agricultural fields, riverbeds and floodplains, coastal and marine sand, lakes and reservoirs. These mineral occur with ordinary sand, which is dug up, the valuable minerals are separated in water by the virtue of different densities. In India estimate consumption of cement is 324 million tons, and for each tonne of cement, the building industry needs about 6 to 7 times more tons of sand and gravel.

The problem is serious in the case of river in the south western coast of India, especially in Kerala, where rivers are small with limited bed resources.

How to differentiate whether Mining is Legal or Illegal

The sand mining activities carried out is cluster of 5 hectares and above, it has graded approval by District Level. For clusters between 5 to 50 ha, approval is with State Environment Impact Assessment Authority. For area above 50ha, the approval process lies with the MoEFCC and its expert committees. but the draft notification does not mention how procedural accountability and legal compliance would be attributed. The draft notification gives mine owners to seek environmental approval both at individual and cluster level.

Guidelines for carrying out sand mining activities legally  

1. The prospecting mining operation should be under licence or lease- the lease conditions should be contrary to the rules.
2. after the end of lease period, there needs a renewal of lease for continuing mining.
3. Exceeding the lease area, comes under illegal mining of this act.
4. After a premature termination of lease, there is a need for seeking permission from State Government for the operative mechanism of section 4(A)(1) of MMDRA, 1957.

District level committee has powers to terminate the lease or cancel it, after consulting it with Central Government where it is expedient in the interest of regulation of mines and minerals development, preservation of natural environment, control of flood, prevention of pollution, or to avoid danger to public health or communications or to ensure safety of buildings, monuments or other structure or for such other purpose it may deem fit. But this rule is not exhaustive there are other authorities which might govern the rule like Ministry of Environment, Forest and Climate Change and National Green Tribunal (NGT).

Regulating Sand Mining

There have been several attempts by state and center government and judiciary to restrict illegal sand mining, most notably the Supreme Court order in 2012 that banned all sand mining, including that on land less than five hectares, without the approval of Environment and Forest (MoEF). NGT in 2013 issued notices against violators of SC orders, existing mining leaseholders to get environmental clearance from MoEF, giving them 3 months time to do so. Sand mining is regulated by The Mines and Minerals (Development and Regulations Act, 1957. According to the Section 4(A) (2) where the state government is in the opinion that it is exponent in the interest of regulation of mines and minerals development, preservation of natural environment, control of flood, prevention of pollution or to avoid danger to public health, or to ensure safety of building, state government may deem fit, can, by any order, in respect of any minor mineral, make premature termination of prospective license or mining lease with respect to the area or any part thereof covered by such lease.

Consequences of illegal sand mining

To assess the impact of mining and remedial measure be assessed through monitoring. This requires mid course correction, it will provide data to evaluate the upstream and downstream effect of mining. The consequences of mining have been worse due to increased needs of minerals.

Un-regulated sand mining has resulted in the erosion of riverbanks resulting in increased flooding and causing a severe threat to biodiversities in Punjab.

Several mangrove forests had been destroyed by illegal construction to storage docs, roads and other infrastructure to facilitate easy transfer of sand from the river. This made Mumbai and other neighbouring regions more vulnerable to floods.

Livelihoods of local fishermen were being threatened by the sand barge which often destroys their net. Yet they do not register an official complain.

India’s Struggle to stop unauthorized sand mining

India’s sand mining problem is so prevalent that it has developed into black market, that continues to exploit millions of tons of commodity annually, in the open loot of the riverbeds, canals and beaches sand is being drained by illegal means. According to Geological Survey of India, riverbeds mining cause several alterations to the physical characteristics of both the river and the riverbeds, which severely affect the ecological system of river plants and animals.

According to India’s construction industry Development council, this guides the government on construction policy, which says that the country consumes 500 million tons of the commodities annually and that’s only the legally recorded amount.

According to a report on ABC Foreign Correspondents, India’s sand business employs over 35 million people and is valued at well over $126 billion per annum. The supply problem could partially be attributed to the environmental limitations imposed to protect ecosystem or due to the existence of illegal means to create a supply chain.

How do you report and where do you report

For illegal sand mining, one can complain to police station or can inform environment ministry, or can complain to complain board online by sending the details where the mining takes place. if one is found being involved in illegal sand mining he might face harsh punishment.

Section 47 of MMDRA, 1957 says that any person contravening the provision of these rules shall be punishable with imprisonment for a term which may extend to one year, or with fine which may extend to INR 5000/- or with both in case of continuing contravention with an additional fine extend to 500/- for every day during which such contravention continues after conviction for such contravention.

One can file a Public Interest Litigation (PIL) in the court or can report to Ministry of Environment & Forest National River Conservation Directorate or one can complain to Air (prevention and control of pollution Act, 1974. A complaint can be made to National Green Tribunal https://ngtonline.nic.in/ngtonline or a person can notify his state government about illegal mining through an online application or by sending a mail.

Even the police now have powers to cache hold on illegal sand mining, they have the power to seize illegal sand mined or transported sand. They can be booked under IPC section 379 of theft, which includes removal of sand, which was distinct from the offence of mining without permission under special enactment.

It is the duty of police investigator to investigate if the mining is done according to the rules, or if the case is reported to the ministry of forest it is their duty to investigate in the matter, to check that does the lease holder comply with the statutory provisions or not,  if the mining is legal or not, if it is illegal they may take further actions against the party.

What if illegal sand mining has done personal damages to you?

Personal damage can be fatal and non-fatal permanent Damage. If there is a personal injury a person can recover loss of wage, by applying a law of negligence. If there is a loss of wage some evidence needs to be presented White v. Breedon.

Guidelines framed by Geographical Survey of India

Following geo-scientific considerations are suggested to be taken into account for sand/ gravel mining:-

1. Abandoned stream channels on terrace and inactive floodplains may be preferred rather than active channels and their deltas and floodplains. Replenishment of groundwater has to be ensured if excessive pumping out of water is required during mining.
   
2. Stream should not be diverted to form inactive channel,
   
3. Mining below subterranean water level should be avoided as a safeguard against environmental contamination and overexploitation of resources,
   
4. Large rivers and streams whose periodic sediment replenishment capacity are larger, may be preferred than smaller rivers,
   
5. Segments of braided river system should be used preferably falling within the lateral migration area of the river regime that enhances the feasibility of sediment replenishment,
   
6. Mining at the concave side of the river channel should be avoided to prevent bank erosion. Similarly meandering segment of a river should be selected for mining in such a way as to avoid natural eroding banks and to promote mining on naturally building (aggrading) meander components,
   
7. Scraping of sediment bars above the water flow level in the lean period may be preferred for sustainable mining,
   
8. It is to be noted that the environmental issues related to mining of minerals including riverbed sand mining should clearly state the size of mine leasehold area, mine lease period, mine plan and mine closure plan, along with mine reclamation and rehabilitation strategies, depth of mining and period of mining operations, particularly in case of river bed mining.
   
9. The Piedmont Zone (Bhabbar area) particularly in the Himalayan foothills, where riverbed material is mined. This sandy- gravelly track constitutes excellent conduits and holds the greater potential for groundwater recharge. Mining in such areas should be preferred in locations selected away from the channel bank stretches. Areas where channel banks are not well defined, particularly in the braided river system, midstream areas should be selected for mining of riverbed materials for minimizing adverse effects on flow regime and instream habitat..
   
10. Mining of gravelly sand from the riverbed should be restricted to a maximum depth of 3m from the surface. For surface mining operations beyond this depth of 3m (10 feet), it is imperative to adopt quarrying in a systematic bench- like disposition, which is generally not feasible in riverbed mining. Hence, for safety and sustainability restriction of mining of riverbed material to maximum depth of 3meter is recommended.
    
11. Mining of riverbed material should also take cognizance of the location of the active channel bank. It should be located sufficiently away, preferably more than 3m away (inwards), from such river banks to minimize effects on river bank erosion and avoid consequent channel migration.
    
12. Continued riverbed material mining in a given segment of the river will induce seasonal scouring and intensify the erosion activity within the channel. This will have an adverse effect not only within the mining area but also both in upstream and downstream of the river course. Hazardous effects of such scouring and enhanced erosion due to riverbed mining should be evaluated periodically and avoided for sustainable mining activities.
    
13. Mineral processing in case of riverbed mining of the sandy gravelly material may consist of simple washing to remove clay and silty area. It may involve crushing, grinding and separation of valueless rock fragments from the desirable material. The volume of such waste material may range from 10 to 90%. Therefore, such huge quantities of mine wastes should be dumped into artificially created/ mined-out pits. Where such tailings / waste materials are very fine grained, they may act as a source of dust when dry. Therefore, such disposal of wastes should be properly stabilized and vegetated to prevent their erosion by winds,
    
14. Identification of river stretches and their demarcation for mining must be completed prior to mining for sustainable development.
    
15. The mined out pits should be backfilled where warranted and area should be suitably landscaped to prevent environmental degradation.
    
16. Mining generally has a huge impact on the irrigation and drinking water resources. 

Steps taken by Government to curb illegal sand mining practices

A round-the-clock complaint cell has been set up at the Collectorate Control Room for the public to register complaints regarding illegal sand mining in the district. The cell will function for registering complaints. Appropriate directions will be given by the Additional District Magistrate (ADM) to revenue squads formed to check the illegal practice.

Tahsildars have been asked to conduct raids, seize vehicles that engage in the illegal activity and bring them to the notice of District Collector.

The Circle Inspector/Sub Inspector has been asked to take necessary steps to control the illegal activity by conducting raids as per the information received from the control cell.

Conclusion

Sand mining contributes to construction of buildings, infrastructure development, it helps in extracting minerals and provides both economic and social benefits. However, intensive sand mining with disregard to environmental protection erodes these gains and creates a series of environmental problems. The regulatory agenda prepared for sand mining is passive and these make enforcement difficult and complicated. Lack of clear guidelines for dealing with sand mining operations coupled with inability of the regulatory authorities’ results in unscrupulous sand mining activities and environmental degradation.

Even though there are no specific guidelines followed as if now, but it is suggested that local municipalities come up with bylaws to help preserve the ecological beauty of their areas. Environmental awareness training should be conducted for the communities in the vicinity of the extraction sites, there should be a clear check maintained on the bodies, so that there is fear of illegal sand mining. This will help in monitoring and enforcement of the bylaws made for the development of the society. Studies focusing on the impacts of sand mining on water quality, and the land affected by it, they should also monitor the damage caused due to sand mining to workforce. This will help the community and the government authorities to know and understand the nature and severity of impacts of sand mining on water quality in area.

References

• http://www.sbs.com. au/yourlanguage/punjabi/en/article/2017/03/28/indias-struggle-illegal-sand-mining
• https://timesofindia.indiatimes.com/india/Centre-issues-guidelines-on-sustainable-sand-mining-proposescrackdownonillegalminers/articleshow/48893532.cms?utm_source=newsletter&utm_medium=referral&utm_campaign=digest_section
• http://iasscore.in/national-issues/illegal-sand-mining-steps-taken-by-government-of-india-
• http://envfor.nic.in/sites/default/files/Final%20Sustainable%20Sand%20Mining%20Management%20Guidelines%202016.pdf
• http://pib.nic.in/newsite/PrintRelease. aspx?relid=155423
• http://pib.nic.in/newsite/PrintRelease. aspx?relid=155423
• http://www.downtoearth.org.in/news/flouted-with-impunity-58736
• http://www.livemint.com/Politics/fzIGEppWpXkfPJkRtubt6M/Govt-panel-finds-evidence-of-illegal-sand-mining.html
• https://yourstory.com/2016/09/illegal-sand-mining/
• http://heinonline.org/HOL/LandingPage?handle=hein.journals/geojintl39&div=32&id=&page=

In this article, Ambika Kajal discusses Transfer Pricing Disputes in Offshore Jurisdictions.

Transfer Pricing

The price set for a transaction within a business group (controlled transactions), i.e., between the parent company and an affiliate or between related entities within the industry group, is known as the transfer price. Transfer pricing is the most important tax dispute faced by MNCs (UNCTAD 1999). ”The problem addressed by the transfer pricing rules is the absence of market friction in transactions between controlled persons and the resulting need to verify prices in such transactions for income tax purposes and, if necessary, to adjust for that absence” (Rosenbloom 2005).

Transfer pricing is termed as the pricing of the intermediate products or services supplied by one or more related units to other entities within the same company group.

The transaction value of a good or service between related enterprises may not always reflect market values. Transfer pricing refers to the distortion between transaction values and market values (OECD 2008).

Associated Enterprise

Associated Enterprises has been described in Section 92A of the Income Tax Act. The primary criteria to determine an AE is the participation in management, control or capital (ownership) of one enterprise by another whereby the participation may be direct or indirect or through one or more intermediaries, control over the entity may be direct or indirect.

International Transaction

International Transaction has been described in Section 92B of Income Tax Act. International Transaction” means a transaction between two or more associated enterprises (AE), either or both of whom are non-residents, in the nature of lease, purchase or sale, etc., of tangible or intangible asset, or provision of services, or lending or borrowing money, or any other related transaction having an impact on the profits, income, losses or assets of such enterprises,

It shall include an arrangement or mutual agreement between two or more associated enterprises (AE) for the allocation of, or any contribution to, any cost or expense incurred or to be incurred in connection with a benefit, service or facility provided or to be provided to any one or more of such enterprises.[1]

Arm Length Principle

This valuation principle applies to commercial and financial transactions between related companies. It says that transactions should be valued as if they had been carried out between unrelated parties, each acting in his own best interest. It is a condition that the parties to a transaction are independent and on an equal footing.[2] This definition is provided in OECD, 2006, Annual Report on the OECD Guidelines for Multinational Enterprises: Conducting Business in Weak Governance Zones, OECD, Paris.

TRANSFER PRICING – METHODS

Section 92C of Income Tax Act states the methods which are to be used in the computation of Arm’s Length Price.

Rule 10C of the Indian Income Tax Rules (1962)

While selecting the appropriate method, Assessee is to give regard to the nature of transaction or series of a transaction, or

The class/classes of Associated Enterprises (AE) entering into the transaction and the functions performed by them taking into account the tangible or intangible assets employed or to be employed and risks (losses) assumed by such enterprises, or

The availability, reliability of data required for application of the method and other relevant factors as the Board may prescribe.

Methods are

1. Comparable Uncontrolled Price Method (CUP)
2. Resale Price Method (RPM)
3. Cost Plus Method (CPM)
4. Profit Split Method (PSM)
5. Transactional Net Margin Method (TNMM)
6. Any other methodology prescribed by the board.

TRANSFER PRICING DEFINED IN INDIAN LEGISLATION

The Finance Act 2001 came up with a critical introduction with effect from Assessment Year of 2002-2003, relating to detailed Transfer Pricing regulations (Section 92 to 92F of the Income Tax Act, 1961).

(CBDT) Central Board of Direct Taxes has introduced some rules (Rule 10A to 10E) which related to Transfer Pricing

Applicability

Some conditions need to be fulfilled for applicability

• Firstly, There must be an international transaction.
• Secondly, such international transaction must be between two or more associated enterprises, either or both of whom are non-residents.

Documentation

Return

13 Different types of documents are to be maintained. These are-

(1) Enterprise-wise documents

• Detailed description of the enterprise,
• Defining relationship with other associated enterprises,
• Nature of business carried out.

(2) Transaction-specific documents

• Substantial information regarding each transaction,
• Description of the functions performed by each party,
• Assets employed and risks assumed by each party involved in the transaction,
• Economic & Market Analysis etc.

(3) Computation related documents

• Describe in details the method considered for calculation,
• Actual working assumptions, concerning policies, etc.,
• Adjustment made to transfer price,
• Any other relevant data, documents relied upon for determination of arm’s Length price, etc.

A report from a Chartered Accountant in the prescribed form giving details of transactions is required to be submitted within a specific time limit.

PROVISIONS RELATED TO TRANSFER PRICING IN DIFFERENT COUNTRIES

USA

Legal Position

Internal Revenue Services, Internal Revenue Code 482, 6038A, 6038C, 6062(e)-(n)

Pricing Method Allowed

Best Method among CUP, Resale Price, Cost Plus, CPM, Profit Split

Documentation

Return

• A tax payer is required to maintain extensive contemporaneous documentation.
• Returns in Forms 5471 and 5472 have to be filed.

Penalty

20% and 40% penalty for underpayment of tax is levied.

United Kingdom

Legal Position

Schedule 28AA mentioned in the Income and Corporation Taxes Act, 1988 and Section 12B of the Taxes Management Act 1970 guide transfer pricing in the UK. Inland Revenue Department manages the affairs. Guidance Notes in Inland Revenue Tax Bulletin 37 & 38 have also been published in public.

Applicability

It relates to transactions made between a UK body corporate and another body corporate, partnership or unit trust under common control, in a transaction or some transactions. Where the parties are not under common control, Schedule 28AA may still apply as between a Joint Stock Company and one or both of two 40% shareholders.

Pricing Method Allowed

Most reasonable methods like CUP, Resale Price, Cost Plus, Profit Split, TNMM is used for computation. Preference is given to Transaction based method over profit-based method.

Documentation

Return

Contemporaneous documentation is needed. The tax payer should keep all such records as may be required for the sole purpose of helping him to make and deliver a correct and complete tax return. The absence of it is tantamount to negligence, exposing the tax payer to substantial penalties.

Apart from Annual Return showing compliance with any APA, no other return is required to be submitted.

Penalty

Up to 100% of any additional tax due as a result of transfer pricing adjustment where the tax payer is negligent.

LEGAL PROCEDURE FOR TRANSFER PRICING DISPUTES SETTLEMENT

• The Central Board Of Direct Taxes published certain guidelines in 2015 to the income tax authorities in link with the Transfer pricing regulations.
• After the permission of the commissioner is granted, the assessing officer has the power to refer any transaction (whether international or domestic) in the previous year to the transfer pricing officer (TPO), to calculate the arm’s length price of such the transaction.
• After examining the evidence and taking into account all relevant data at his disposal, the TPO shall pass an order concerning the arm’s length principle (ALP) in the domestic or international transaction in question.
• On receipt of the statement from transfer pricing officer, the AO (assessing officer) computes the total income of the assessee after taking into consideration the ALP so determined by the transfer pricing and prepares a draft order which is sent to the assessee.
• Now the assessee has to either obey or objection to the draft order within 30 days of having received the draft order of the assessing officer.
• Following the receipt of the reply(acceptance or rejection) of the assessee, the AO passes a final order within 30 days.
• Subsequently, appeals against the AO order can be made in the appellate forums beginning with the hierarchy of Commissioner of Income Tax (Appeals) [CIT(A)], then Income Tax Appellate Tribunal (ITAT), ultimately High Court and Supreme Court, the guardian.

Dispute Resolution Panel

During earlier times, if the assessee wanted to object the assessment order, he had the only one option to approach the Commissioner of Income Tax Appeal.

After the establishment of Dispute Resolution Panel (DRP), the assessee has an additional option to approach DRP against the Draft Order issued. Finance Act introduced DRP mechanism, in 2009, as an alternative option to first appellate authority (Commissioner of Income-tax (Appeals) [CIT(A)]).

The purpose of introduction of mechanism was speedy disposal of pending disputes and to promote the growth of foreign investment. It has collegium consisting of three Commissioners of Income-tax constituted by the CBDT for meeting the purpose.

After receiving the objections from assessee, the DRP conducts hearings and passes a direction to the AO within nine months who, in turn, pass the final order within one month as per the directions of the DRP.

If an assessee is not satisfied or contented with the order of DRP, he can then appeal to the appellate authorities like the income tax appellate tribunal -ITAT, High Court and Supreme Court.

Case analysis on

Bharti Airtel Limited vs. ACIT (ITAT Delhi)

ISSUE: Whether a transaction about corporate guarantee which does not result in any profits, incomes, losses of the enterprise can come under the ambit of an ‘international transaction’ u/s 92B(1) and is subject to transfer pricing?

Bharati airtel issued a corporate guarantee to Deutsche Bank in place of its associated enterprise (AE), Bharti Airtel (Lanka). The guarantee was for repayment of the working capital facility. The assessee claimed that since it didn’t bear any cost on the issuance of such guarantee, and such guarantee was given as a part of the shareholder activity. Therefore, no transfer pricing adjustment can be made.

The TPO gave the view that as the enterprise had benefited, the ALP has to be calculated with the help of CUP method at a commission income of 2.68% plus a markup of 200 bp. The DRP upheld this by relying heavily on the retrospective amendment to s. 92B which specifically included guarantees in the definition of “international transaction.” Assessee appealed to the Tribunal which HELD:

(i) An assessee company extends assistance to the AE, which does not cost anything to the parent company. Also, particularly for which the company would not have been able to realize money by giving it to some other entity during the regular business, such assistance does not lead to any fluctuation of its profits, income, losses. Therefore, it is not covered by the definition of international transaction u/s 92B (1).

VODAFONE CASE (INDIA) (Call options case)

The case revolved around the sale of the call centre business of Vodafone, to Hutchison. Whereas, the tax agencies demanded capital gain tax for the said transaction.

In this transfer pricing case, Vodafone contended in the Bombay High Court that the Income Tax Department had no jurisdiction because the said transaction was not an international transaction and thus, did not attract any tax.

JUDGEMENT: The High Court gave judgment in favour of Vodafone company. The court reversed the decision of the tax tribunal that the recasting of the framework agreement between the taxpayer and Indian business partners was to be treated as a transfer of call options by the assessee to its Parent entity or unit merely because the latter was a confirming party.

Vodafone India Services (P) Ltd. v Union of India (issues of shares case)

The facts of Case – Vodafone India issued equity share to Vodafone Holding (Outside India) at a premium, and the same is mentioned in 3CEB in tax audit report.

JUDGEMENT: The Bombay High Court gave judgement in favor of Vodafone in accord with the petitioner’s submissions and held that issue of shares to holding company is a capital receipt and does not come under the ambit of the word ‘income’ under the act.

Maruti Suzuki Ltd v Commissioner of Income Tax [2016]

HELD: Delhi High Court stated that AMP expenses incurred cannot be framed and categorized as an international transaction under the Indian transfer pricing rules and regulations, unless the revenue can establish that the AMP spend was dictated by the foreign associated enterprise, for and on its behalf. The High Court rejected the submission of the revenue department that the mere fact of incurring AMP expenses should be considered as an inference of the existence of an international transaction.

First Blue Home Finance Ltd. v. ACIT

HELD: If an international transaction of capital nature doesn’t lead to the generation of any income itself, but the resultant transaction has an impact on the income of the taxpayer. And, if is not at arm’s length, it would invoke the provisions of chapter X and will have to satisfy the provisions of Chapter X of the Income Tax Act. If provisions are not satisfied, it will attract penalty concerning transfer pricing.

ESSAR GROUP CASE (INDIA – 2014)

ISSUE: Whether the transfer pricing provisions apply to the issue of shares.

HELD: The court held that the provisions do not apply to the issuance of shares. Vodafone case relied heavily for judgment.

Shell case (Royal Dutch Shell Group) (INDIA)

CONTENTION OF SHELL COMPANY: Equity infusion by a foreign parent company into an Indian subsidiary or enterprise cannot be taxed under the head of ” income ”.

Shell India also objected that the transfer pricing decision of tax authorities had its basis on an incorrect interpretation of the tax rules and regulations and was bad in law because the international transaction was a capital receipt on which income tax cannot be implicated.

JUDGEMENT: The Bombay High Court decided in favor of Shell India. It supplemented the principle that no income tax liability can be put on a foreign parent company’s funding of a local subsidiary through the issue of shares.

The honourable court set aside the transfer pricing adjustment of ₹17,920 crore.

The High Court rulings of VODAFONE and SHELL rest the tax controversy around capital infusion by foreign parents into their Indian enterprises.

TRANSFER PRICING DISPUTES IN OTHER COUNTRIES

All cases of foreign courts give us a glimpse of how law concerning a legal topic is applied whether strictly or liberally. These judgments have persuasive values for Indian courts. The example of a few landmark cases are given below:

AMAZON CASE (USA) (Transferring of intangibles and other issues)

FACTS

Amazon US transferred the following intangible assets: software and other technology needed to operate Amazon’s European websites, marketing intangibles, such as trademarks, trade names, and domain names and customer lists and other information concerning the Amazon’s European customers.

The Luxembourg subsidiary or enterprise made buy-in payments to Amazon of millions over seven years in exchange for the use of the intangibles. The subsidiary was also told to make annual cost-sharing payments for compensating Amazon. The amount was utilized for ongoing intangible developmental costs.

To determine the buy-in amount, Amazon preferred the comparable uncontrolled transaction (CUT) method for valuing each group separately.

The IRS contended that the buy-in payment was not arm’s length. Tax agency applied a DCF methodology to the expected cash flows from the European business to arrive at its valuation.

JUDGEMENT

Amazon.com Inc won a US Tax Court case, fending off IRS transfer pricing adjustments relating to a cost-sharing agreement (CSA) buy-in payment. The transfer pricing adjustments would have substantially increased the amazon’s taxable income by more than a billion in 2005 and 2006.

Following the similar ratio dictated in the case of Veritas Software Corp. v. Commissioner, 133 T.C. 297.

Taking the Side of Amazon, the Tax Court rejected the IRS’s recalculation, terming it as arbitrary, and unreasonable. The court said that the CUT method, used by Amazon, was the best method to calculate the CSA buy-in payment.

EATON CORPORATION & SUBSIDIARIES V. COMMISSIONER, (T.C.) (2017)

HELD

US tax court held that IRS, revenue department abused its discretion in cancelling two unilateral Advanced Pricing Agreements (APAs) between Eaton Us subsidiaries and foreign subsidiaries. APAs were related to intangible assets etc.

The court was of the view that APA revocation or cancellation must be rare. It must be the last step taken. APA is a nonadversarial method against the traditional one. It aims at reaching peaceful consensus regarding the proposed set of transactions. It gives time to the parties to meticulously set the terms and conditions in abidance of law. Only 11 APA has been revoked from 1995 till 2015.

The importance of APA must be realized in solving complex pricing transfers. APA must be encouraged as an alternative to solve possible transfer pricing disputes. IRS must not abuse its discretion. Also, Court held that APA cannot be reviewed by Law of Contract principles.

CHEVRON CASE (AUSTRALIA TAKING A STRICTER VIEW REGARDING INTER COMPANY LOANS)

A credit facility, established in 2003, Chevron’s unit in Australia paid an interest of 9 % to another subsidiary that put to use the group’s investment grade credit rating to take a loan in the US at 1.2%. This led to hefty profits for the subsidiary of A$1.1bn between 2004 to 2008, which were not taxed in both the countries (Australia or the US).

The Australian Tax Office argued that the terms and conditions of this loan allowed Chevron to claim excessive interest deductions which led to a reduction in its tax bill in Australia.

JUDGEMENT: Chevron lost the landmark case, and Federal Court ruled in favour of the Australian Taxation Offices. The tax agency had claimed that the US energy group owed A$340m ($256m) in tax, penalties, and interest, as a result of an inter-company loan to finance a massive gas project off the coast of Western Australia.

The Chevron litigation amplifies an intensifying crackdown on corporate tax avoidance.

CHANGES BROUGHT TO ENSURE REDUCTION IN NUMBER OF TRANSFER PRICING DISPUTES

India has introduced new rules that aim to provide certainty to multinationals further and reducing transfer pricing litigation.

(CBDT) Central Board of Direct Taxes revamped the rules called the safe harbour rules, introduced in 2013, under which income tax authorities do not put up a question mark on the pricing of dealing between international multinational parent companies and a related party such as their subsidiaries.

Tax experts say changes are in line with the Multilateral Convention of Base Erosion and Profit Shifting (BEPS). India has taken up the principles for acceptability of management fee from BEPS Action 10, and even though India has not yet adopted the BEPS Action 10 report about low value added service charges, it has partly aligned itself to the report tabled by the Organisation for Economic Cooperation and Development.

ADVANTAGES OF THE SAID RULES

• To reduce transfer pricing disputes
• To provide certainty to taxpayers,
• Safe harbour margins with industry standards and
• To enlarge the scope of safe harbour transactions

ADVANCED PRICING AGREEMENT (SECTION 92CC)

APA programs are structured so that the taxpayers can willingly pre determine the possible TP disputes in an honorable and stable manner, as an optional means to the traditional assessment process preferred by tax authorities.

An APA supplements the taxpayers with greater confidence concerning their TP methods. The basic foundation laid down for APA is to support ethical resolution of transfer pricing issues before positions become well-established. APAs can be one-sided, two-sided, or bilateral.

As long as the taxpayer does not breach the terms and the conditions laid down in the APA, the concerned tax authorities do not scrutinize the enclosed transactions of the said agreement.

ADVANTAGES OF APA IN THE PRESENT SCENARIO

It is a profitable thing to acquire an APA. APAs provide better assurance on the transfer pricing method. As an effect, they provide some relaxation from the possibility of risk and APA assists the financial reporting of possible tax liabilities.

APAs also considerably lessen the incidences of double taxation and costs associated with audit defence and TP documentation preparation.

PENALTIES

The provisions related to the transfer pricing matters in the Income-tax Act, 1961 are mentioned hereunder :

The penalty for failure in keeping and maintaining the required information and document in respect of the ” international transaction”.

271AA: If any person does not keep and maintain any such concerned information and document as required by section 92D(Sub-section 1 or sub-section 2), he is liable to pay the penalty.

The Assessing Officer or the Appeals Commissioner may order the person who entered into the international transactions, to pay a sum equal to the 2% of the value of each such transaction.

The penalty for failure to furnish information or document under subsection 3 of section 92D.

271G: If a person who has taken part in an international transaction and fails to provide any such information or document concerning the said transaction, as required by sub-section (3) of section 92D, he has to pay a hefty penalty.

The Officer or the Appeals Commissioner may direct that such person shall pay a sum equal to 2 % of the value of the international transaction for each such failure of producing the document.

The penalty for not furnishing a report under section 92E :

271BA: If any person fails to present a report from a chartered accountant as mentioned in section 92E, the Assessing Officer may order that such person shall pay a sum of one lakh rupees.

Tax authorities can levy stringent penalties in India and taxpayer can avoid them by proper planning and also avoid greater tax risk.

CONCLUSION

Countries are signing agreements to come up with more uniform standards of transfer pricing. Transfer pricing is a way of avoiding tax which is practiced by most of the big companies. Transfer pricing needs more stringent rules and even stricter authorities to keep a check o companies inflating the bills and getting out of the clutches of the legal system.

[1] https://indiankanoon.org/doc/131072984/ (Last visited:30^th August, 2017)

[2] https://stats.oecd.org/glossary/detail.asp?ID=7245 (Last Visited : 30^th August, 2017)

In this article, Mishika Bajpai discusses how effective is the legal aid service in India.

The exposition of A.V. Dicey propounded in 1885 still holds true today, because Rule of Law reflects a person’s sense of justice and order. While the court is possessed with the power to prevent acts of interference of justice, it is equally dutiful towards the protection of the rights and interests of every litigant and indeed, the public in general. Judiciary plays a special role in the society and “as the guarantor of justice, a fundamental value in a law-governed State, it must enjoy public confidence if it is to be successful in carrying out its duties. [1]

Further, it is undeniable, that the administration of justice is the court’s duty alone, rather this administration also requires the able efforts of a resourceful and a competent lawyer, who, as an officer of the court ought to assist the court to the best of his knowledge and competence. Thus, a truly stable system of administration can only be achieved when all the stakeholders in the legal system are taken care of. Any form of denial of the same would defeat the purpose of judicial proceedings and circumvent the fair trial guarantees.

Right to Legal Aid – A Constitutional Commitment

Legal aid was introduced by way of the Forty-Second Amendment under Article 39A, of the Constitution of India. It obligated the State to provide free legal aid, by introducing legislation and to promote justice equality before law. This constitutional promise reads as under –

“The State shall secure that the operation of the legal system promotes justice, on a basis of equal opportunity, and shall, in particular, provide free legal aid, by suitable legislation or schemes or in any other way, to ensure that opportunities for securing justice are not denied to any citizen by reason of economic or other disabilities.”

Every person who has to file and defend a case becomes entitled for legal services under the Legal Services Authorities Act, 1987 if that person is–

1. A member of a Scheduled Caste or Scheduled Tribe;
2. A victim of trafficking in human beings or begar as referred to in Article 23 of the Constitution;
3. A woman or a child;
4. A mentally ill or otherwise disabled person;
5. A person under circumstances of undeserved want such as being a victim of a mass disaster, ethnic violence, caste atrocity, flood, drought, earthquake or industrial disaster; or
6. An industrial workman; or
7. In custody, including custody in a protective home or in a juvenile home
8. Of in a psychiatric hospital or psychiatric nursing home within the meaning of clause (g) of section 2 of the Mental Health Act, 1987; or
9. A person whose annual income less than nine thousand rupees or such other higher amount as may be prescribed by the State Government, and less than twelve thousand rupees or such other higher amount as may be prescribed by the Central Government if the case is before the Supreme Court.

The above categorisation ensures that the opportunities for securing justice, are not denied to any citizen, by reason of economic or other disabilities. Legal aid assistance is thus, premised on the two contingencies that the party is unable to pay for the legal assistance and it is in the interest of justice that the party may receive legal assistance, nonetheless.

Legal Services Authorities Act, 1987

Amendments were also introduced in the Advocates Act, 1961, for instance by providing for constitution of legal aid committees. Our Apex Court has, thereunder, constituted a Supreme Court Legal Services Committee (SCLSC) under Section 3A of the Legal Services Authorities Act, 1987 (as amended by the Legal Services Authorities (Amendment) Act, 2002) to ensure free legal aid to the weaker and marginalised sections of the society approaching the Supreme Court.

Headed under the Chairmanship of a sitting judge of the Supreme Court of India, the committee includes such other members possessing such experience and qualifications prescribed by the Central Government, and nominated by the Chief Justice of India. The panel at SCLSC comprises of competent lawyers on record with certain minimum number of years of experience who handle the cases in the Supreme Court.

Upon receiving completed application forms along with the requisite documents, the SCLSC refers the matter of the applicant to one of the Screening Committee’s for scrutiny and evaluation as to whether the litigant is entitled for legal aid and whether prima facie case is made or not. Under the aegis of National Legal Services Authority (NALSA), the SCLSC also organises Lok Adalats (People’s Court) in the Supreme Court premises for different categories of matters such as property requisition, financial disputes, and matrimonial issues.

The Lok Adalat takes up matters which may be pending before the Hon’ble Supreme Court. This provides for yet another way of uncomplicated, free of cost and amicable way of settling disputes. Similarly, there is the Delhi State Legal Services Authority which constituted Committee in High Court of Delhi called High Court Legal Services Committee under Section 8A of the Legal Services Authorities Act 1987. It has opened 137 Legal Services Clinics i.e. 104 Legal Services Clinics in Gender Resource Centres in association with Mission Convergence, 09 Legal Services Clinics in Colleges and Universities, 24 Legal Services Clinics in JJBs, CWCs, All India Legal Aid Cell on Child Right, Central Jails in Delhi and Observation Homes.

Flip side of the coin

Despite such flexibility and mechanisms in place, the underfunded legal aid only receives hollow support. The issue, though fortified by the aforementioned provisions for the benefit of indigent litigants, is only bolstered with insubstantial legal services. This may be the resultant of inattention that is faced by the bar which is rarely incentivised for providing the much-needed legal support. Because legal aid counsels and panellists are remunerated insufficiently, the standard of legal aid service never receives its well-deserved attention and assistance. This in fact worsens in the lower courts. In reality, the legal aid fees that a lawyer merits would be impossible to make a decent living. Those who do take work and accept it for meagre remittances are the young and inexperienced ones. The entire system of justice delivery is therefore, eschewed of its benefits when there is missing deployment of meaningful legal services.

The onerous responsibility of a lawyer to provide free legal assistance to indigent applicants cannot be overlooked in light of the right to access courts and due process. Therefore, while importance ought to be assigned to applicants approaching the court, one cannot forego the other side of the coin i.e. the assistance. Since lawyers play a key role in conducting judicial proceedings, from preparing briefs to presenting arguments, any oversight of this inseparable relationship of the legal community and lawyers can cripple the entire system of justice. This is when we bring in the concept of quid pro quo which could become a legally accepted way of providing rightful remuneration to committed advocates in lieu of the services provided by them to their litigants.

For instance, the Supreme Court has adopted the stance and allowed the levy of additional court fee in respect of appeals and revisions to appellate authorities (other than civil and criminal courts). The Court not only gave legal sanction to the additional court fee which was in fact meant for a Legal Benefit Fund operated under the Kerala Legal Benefit Fund Rules, 1991, but also observed that this fund would essentially provide efficient legal services for the people. Since the purpose of the fund was to be utilised for providing competent legal services, this amounted to quid pro quo. The additional court fee was perceived to be levied for an effective, efficient and robust legal assistance. Moreover, it had direct nexus to the laudable objective sought to be achieved in the context of services available to the public at large seeking redressal before the courts.

While, the above provisions of legal assistance to the indigent parts of our society are reassuring, legal aid is mostly deprived of commensurate legal services. Such supplementary funds could be reasonably utilised by courts in order to recompense lawyers assisting litigants with meagre financial means. This can be beneficial when neither the state would be willing to subsidise nor would the litigant be able to bear the costs. This way even experienced lawyers would not resist in carrying out the demanding responsibility. There is no gainsaying that a sound stable system of administration is not only a harbinger of justice but is also a common law right stirring effective access to it. The above is only a step towards attaining access to justice and fair trial even if one does not have the means to pay for it. The goal is not only to palliate the issue of inconsequential legal aid services but to additionally provide commensurate services by supplementary funding by the Court itself towards legal aid assistance and its far-reaching consequences.

In this article, Janvi Ahuja of SLS Hyderabad discusses how should I complain against illegal construction to MCD and get the property sealed.

Introduction

Illegal construction is building or doing a construction work which is not authorized or legally valid. This illegal construction is the consequence of urbanization, overpopulation and expanding slum areas and shanty towns. Even the Delhi High Court observes that illegal construction is rampant in national capital and needs to be stopped. Public officials need to ensure that the law is strictly complied with. Judicial notice can be taken of the fact that when a building is illegally constructed, it impacts not only the physical enjoyment of the property of the neighbors but also results in illegal intervention in water circulation and the sewage system, which has been rampant in the city. The development in the city has to abide by the statutory master plan of the city. This was observed in a PIL by All India Anti-Corruption and Crime Prevention Society.

Illegal and unauthorized construction has made Delhi a dangerous city to live. There is a need to unify the three municipal bodies as the splitting of MCD into three had not improved the situation. Pulling up the three municipal corporations of Delhi, a bench at HC said that the court was flooded with PIL against illegal and unauthorized construction which showed no regulation was being followed by civic bodies. The need to unify MCD’s was observed, MCD reunification had not improved the situation. There is a need to unify the truncated MCD’s, to get rid of illegal and unauthorized construction going out.

Order of demolition and stoppage of buildings or works in certain cases and appeal.

Where the erection of any building or execution of any work has been commenced, or is being carried on, or has been completed without or contrary to the sanction referred to in section 336 or in contravention of any condition subject to which such sanction has been accorded or in contravention of any of the provisions of this Act or bye–laws made thereunder, the Commissioner may, in addition to any other action that may be taken under this Act, make an order directing that such erection or work shall be demolished within such period not exceeding thirty days as may be specified in the order, by the person at whose instance the erection or work has been commenced or is being carried on or has been completed and on the failure of that person to comply with the order, the Commissioner may himself cause the erection or the work to be demolished and the expenses of such demolition shall be recoverable from such person as an arrear of tax under this Act.

Provided that no such order shall be made unless the person has been given an opportunity of being heard.

Which all places comes under the preview of MCD

Municipal Corporation of Delhi is an autonomous body which is one of the three municipalities in the national capital territory of Delhi, others being National Delhi Municipal Council and Delhi Cantonment. Within its jurisdiction is some most densely populated area in the world. It has unique distinction of providing civic services to rural and urban villages, resettlement colonies, regularized unauthorized colonies, slum settlement etc.

Municipal Corporation of Delhi covers 12 Zones which are spread across three smaller municipal corporations:

1. City
2. Karol Bagh
3. Sadar Paharganj
4. Civil Lines
5. Narela
6. Rohini
7. Central Delhi
8. South Delhi
9. West Delhi
10. Najafgarh
11. Shahdara South
12. Shahdara North

Intervention by Common Cause

The High court of Delhi has issued directions to Municipal Corporation of Delhi for removing illegal construction, encroachments of public land and commercial establishments from residential area. The Act may be called as Delhi Laws (Special provision) Act, 2006 which prohibits illegal and unauthorized construction. A notice can be issued by local authorities for initiating action against the categories of unauthorized development referred in subsection (1) shall be deemed to have been suspended and no punitive action shall be taken till one year.

Institutional Structure and Regulation

Since there is already a move in India to bring in a Construction Law, it may now be a good idea to speed it formulation and then further enactment. This would essentially form the legal basis for the entire construction sector and would be essentially a compendium of all laws which have direct impact on construction business with necessary revisions to reflect latest developments and international best practices. This would further pave the way for declaring the construction activities as an industry.

How to check whether the property I am purchasing is built legally or not

1. Check for the clear title papers.
2. Check a proper sales deed (to know that the property has a clear title).
3. Check for the power of attorney.
4. Check to see if it is approved by leading bank.
5. Check for the construction area and sanctioned area (so as to know if the construction is illegal or not in accordance with the plan.
6. Check for the encumbrance certificate (it contains details of previous registrations which can be availed from sub registrar’s office.
7. Check if the property has a registered society (in case it’s not a new construction).

What if the illegal construction already did some personal damage to you? Can you claim Compensation for the damage?

If the lease area is constructed illegally or without the permission of the society and causes damage to person, that damage may be factual or non-factual the owner is liable to compensate the parties to such damage. and in the case where local authority fails judiciary will come to rescue of affected party. A petition can be filed under Article 226 of Constitution of India in high court against the state and municipal corporation if they owe some compensation to the aggrieved party. you can claim for liquidated damages with a proof of harm caused, and negligence on the part of the owner. The owner of the illegal construction is legally liable to pay demolition cost and charges, and you can recover for damages suffer and the loss caused due to the act.

What to do when threatened by the parties involved in illegal construction

If an illegal construction is going on and you have filed a complaint in MCD, and without taking any action they dispose off your complaint, and the illegal construction owner is threatening you and warning you to stay away from their work, and you feel that they are powerful, your family is under pressure and scared the you can lodge a fir against that construction owner and the file a petition under 226 of constitution of India against MCD in Delhi High Court and a complaint about illegal construction in the form of PIL.

Where to lodge a complaint about illegal construction

Every city has some municipal corporation act, if any unauthorized construction takes place notice is issued to encroacher as to why the illegal construction should not be demolished, an opportunity is given to the shop owner/ resident to file a reply. Only then the reasoned order is passed, then the option is available to the resident owner to move to the court and obtained stay against demolition. Also a legal notice can be issued to municipal corporation and claiming damages for loss caused due to the property.

Making a complaint online

Lodging an online complaint is a tough job, as the grievance they face is not properly registered. There is an online portal launched by state government for launching complains of illegal sand mining. the main issue arises in filing this complaint is that many people there are uneducated. so there is another system of filing a complaint one can request to local administrative body to come into action to stop the unauthorized act of construction. A complaint can be made online and offline, the procedure is entirely transparent, right from reporting complaint to disposal action. An online complaint is filed through whatsapp (858 888 7773) or calling a toll free number (1533) or a complaint can be mailed or texted. MCD Commissioner K. S. Mehra said: “Since Internet is required to access Facebook, which has a limited spread in the community, we have tied up with an organisation at the Foundation for Innovation and Technology Transfer (FITT) at Indian Institute of Technology, Delhi, to develop a voice application through which any mobile user can post their complaints on the MCD Facebook page.”

• Download Complaint Letter (DOC format)- h
• ttps://www.complaintletter.net/preview/Illegal_Construction_Complaint_Letter

Complain to police

What if your complaint has fallen on deaf ears. If you have requested a local administrative body to come into action to stop the unauthorized act of construction but the local body is not taking any action, and they are allowing them to carry on unauthorized construction by becoming mere spectators. Then the complain about it to police and municipalities. They will surely look at it. You need to make sure that immediate action takes place to stop ongoing illegal construction and to demolish unauthorized structure that they have already built.

How can an appeal be made at MCD tribunal

Appeal at MCD Tribunal is to be filed in the format prescribed under the DMC AT (Procedure) Rules, 1986. Appeal at MCD Tribunal can be filed against any demolition/ ceiling order in MCD which falls within the ambit of Section 344, 347, 349 of the MCD Act. At present, the MCD Tribunal is located at Tis Hazari District Courts in Delhi and the court follows the procedure prescribed under the MCD Act for staying or quashing any demolition /ceiling order in MCD within the parameters prescribed under the law.

Process:

1. The copy of the order of demolition or sealing passed by the MCD/NDMC is to be annexed at first if the same has been received otherwise exemption for the same is to be sought from the court specifically.
2. An advance copy of the appeal before the Appellate Tribunal MCD is to be served on MCD either at the office of the Chief Legal Officer or through the post.
3. One extra set of the Appeal before the Appellate Tribunal MCD is also to be filed.
4. Registration fees for the Appeal before the Appellate Tribunal MCD of Rs 100/- is to be paid in cash at the office of the Registrar.

How are Illegal and unauthorized property sealed

Illegal construction in Delhi is targeted. And to ensure that builders do not dupe innocent people, municipalities demolished the property. Not only this central zone of civic agency demolishes several property that are carried on by owners and are illegal. After a complaint is filed, the authorities go for investigation, and then is it deems that the property is illegally or unauthorized then a reasonable time is given to them, time being a letter to the registrar is sent to them, ensuring the owner of the property can’t sell them. After a reasonable time if a person is unable to prove him right then the property can be confessed.

Power to seal unauthorized construction

Delhi High Court said that it is High time officials enforce the law, High Court declined to order a CBI probe and demolition of illegal construction, observing that it would do so only when correct and complete picture is brought before it.

The directions to seal the unauthorized construction was given during the hearing of PIL by People All India Anti-Corruption and Crime Prevention Society, which had sought direction to the authorities to demolish 75 illegal constructions in the south Delhi Municipal Corporation.

The bench at the High Court said that the commissioner shall not prepare any report against the illegal construction without hearing the owner of the property. “citizens must follow the law and officials must do their duty,” the court said adding that the construction that is not according to the law will not be protected from demolition at any cost.

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

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References

• https://timesofindia.indiatimes.com/city/delhi/hc-enforce-law-on-illegal-construction/articleshow/59377495.cms
• http://www.thehindubusinessline.com/news/real-estate/unauthorised-constructions-have-made-delhi-dangerous/article9803056.ece
• https://en.wikipedia.org/wiki/Municipal_Corporation_of_Delhi#MCD_zones_and_employee_list
• http://siteresources.worldbank.org/INTSARREGTOPTRANSPORT/1858446-1195115524464/22256832/MainReportNov08_final-withdisclaimerJune09.pdf
• http://www.commoncause.in/publication_details.php?id=361
• https://www.kaanoon.com/13363/notice-period-before-demolishing-illegal-construction
• http://www.thehindu.com/news/national/other-states/illegal-properties-in-unauthorised-colonies-get-a-breather/article7453769.ece
• http://www.hindustantimes.com/delhi-news/now-report-unauthorised-constructions-online/story-melJFsmg1XHLwnEL4wmzDI.html
• http://www.hindustantimes.com/delhi-news/10-illegal-properties-sealed-7-demolished/story-GifpbT9ctQwOvO16pQdJpL.html
• http://indiatoday.intoday.in/story/delhi-reduced-to-slum-hc-forms-panel-on-illegal-construction/1/955399.html
• http://www.smartmoneygoal.in/blog/documents-to-check-avoid-fraud-buying-house-property/

In this article, Janvi Ahuja of SLS Hyderabad discusses why it is a terrible idea to not address and resolve problems of your upset customers if you are in a law practice.

Introduction

A lawyer is one who is licensed by Bar council of India to practice law, and whose obligation is to uphold the dignity of law, and also to protect the client’s right. A lawyer is one who is certified by Indian National Bar Association (INBA) which regulates the lawyers. A lawyer is also called an Attorney. He is one who has strived to attain the highest level of skills, to improve the law and the legal profession, and to exemplify the legal profession ideals of public service.

What is a Lawyer’s Job?

A Lawyer’s job is not as simple as it seems to be, his daily task depends on his client’s need and whether he is specialized in that area. A lawyer is bound by some norms of Court, he has to work according to the court proceedings, and simultaneously convince his clients to work accordingly. The work of a lawyer is not limited to the court but it continues beyond the bars, a lawyer has a duty to listen to his client and to make a consensus between the parties. The work varies with the field, from criminal law to divorce law, to patent law, navigating the legal system on the behalf of clients. A lawyer’s job includes counselling of clients about legal options and tries to provide their parties complete justice.

Some other tasks:

• Attend the court hearings, and doing the preparations beforehand.
• Drawing up of contracts and other legal documents.
• Explaining the laws and giving general legal advice.
• Researching and gathering Evidence
• Analyzing legal Documents.
• Supervising Legal Assistants.
• Bringing the party to Negotiation

Lawyers advertising largely depends on word of mouth

In today’s world where we have Internet and emails, people seeking a lawyer still gets the attorney name from a trusted acquaintance in a face to face, or phone conversation. When a lawyer promises a client to take up his case then they promise to bind themselves to give their best, besides this a lawyer assure the client to bring him justice. A word of mouth is most powerful advertising and biggest compliment. In the midst of working on and managing cases, going to the court, managing staff, and many other hats the law firm owners and managers wear, they forget to focus on their client relationship and to encourage referrals through word of mouth.

When people are in a need of a lawyer they often ask their family and friends rather than trusting an advertisement, word of mouth referrals are more likely to be successful because they seem natural and organic.

Why a lawyer should entertain his/her clients religiously?

If you keep your clients happy and satisfied, they will most likely refer your service to other family or friends or colleagues. The existence of a durable relationship between lawyer and a client can make and break an individual’s case. A client’s satisfaction is most important for a lawyer, it is a most valued performance indicator, it builds the level of trust between a client and the lawyer, it shows the extent to which the client feels heard and understood by the lawyer.

It further highlights that the client gets value for their money. It is a responsibility of lawyer to take the case of the client in serious mode and make the client’s experience a positive one. Beginning to think about a client relationship management strategy that is going to help you build loyalty and improve your firm’s reputation, it is the first and very important step in growth of firm. When a lawyer has a client they should not just involve in work and not just talk when his client comes to office. Take a few minutes to talk about their lives and how they’re doing. It may not be your job description, but it helps your client see you as a person and not just an intimidating attorney. A lawyer should treat his client as a God, because a client is the one because of which he is earning for his livelihood. Clients are like bread and butter, if there are no clients there is no bread and butter. Even after a lawyer’s job is complete he should be in touch with his client, just because his client doesn’t have an open case doesn’t mean you should ignore them. Send a monthly or a quarterly newsletter to keep them up to date on your services. That will build your reputation in the eyes of the client.

Why is it important for a lawyer to resolve the problem of upset customers?

A lawyer job is to deal with his clients, it is the client which makes him employed as the clients pay the lawyer, and without clients there will be no lawyer. A lawyer should know how to handle their clients and how to counsel them. Client counselling is an art and a basis for establishing a good career in law. When dealing with a client a lawyer needs to maintain strong professional relationship in order to get closed to client, to build a trustworthy relationship and to bring them to a comfort zone.

A Lawyer-client relationship is a fiduciary relationship. Lawyers are problem solvers, they act as a help to the client in case of a dispute. A client’s perspective of thinking might differ from the opposite party, it may create dispute, but this does not means that they end up their professional relationship. It is the duty of lawyer to console his client to negotiate with his spouse to bring back the matrimonial relation. It all depends on the lawyer that how effectively he conveys his message to clients and brings them to consensus.

There are many responsibilities a lawyer has, which goes beyond court trial. A lawyer is a hope for their clients. When a client comes to a lawyer, he comes with a belief that the lawyer will do something to provide him justice. A client comes with a firm faith in the lawyer, believing that the lawyer ensures them a proper administration of Justice. There are two main task of a lawyer that is to protect the dignity of law and to protect clients right. So a lawyer is bound to resolve to problems of the upset customers. As when a customer is satisfied he believes in law, and the justice mechanism.

What should a lawyer do when the client is annoying and makes frequent visits and phone call?

It is a common lament among lawyers: “clients constantly call and ask me the same questions. I am tired of repeating myself, what to do? The answer is to understand and manage the client’s anxiety, communicating proactively, and training clients. For a client a case is a big thing for him, a criminal case, divorce, and a lawsuit are all stressful and can affect the client’s entire life, family or business. This creates an anxiety which results in repeated calls from clients and creating disturbance of lawyers. But the clients who are constantly calling does not have an intention to cause trouble to you, they just want to end the problem in a smooth and steady manner. A client might think that that the time give to his case is not enough, or the set expectations are not fulfilled regarding your availability.

When you prepare for a new client introduce them to a new policy and definitions of legal terms, make them aware of the court proceedings and the expected time a case may take, this will prepare a client mentally and they might not disturb you unnecessary. The client call is an opportunity for a lawyer to gain his trust and confidence. Clients who call constantly are engaged and looking for their answers. Instead of treating it as a nuisance, think how to improve your work to give your best to your clients. Setting clients expectation at the outset of the engagement, supplying the written information, giving regular updates and employing proactive communication practices can help combat clients anxiety and reduce calls, but some hand holding just goes with the ‘trusted advisor’ territory. Consider it a cost of doing business.

How should a lawyer tackle situations where a case is slipping out of hand? What should a lawyer do to uphold his faith on clients in such situations.

Think like a client, a client approaches you to settle his case in his favor, or the case may be. And he trust you, this is the reason he approached you. So now if the situation is slipping out of your hand it is your duty to make assure your client that he will give his best to bring him justice. A client comes to you for what you do, but also for who you are. The clients stay for what they want, which means we have to consistently meet their needs and fulfil our commitments we make to them. In a situation where the lawyer feels the case is slipping out of their hand, they must disclose the facts to their clients and must make sure that they are giving their best. Explain the client what is going wrong and assure them that you will bring back the case in his favor. It is important to uphold the client’s faith to maintain them as a client.

The golden rule of trust

• Make decision Promptly- no one trusts indecisiveness
• Respect Opinion- You don’t have to agree, but do show respect for differing views.
• Walk the talk- Don’t overpromise and underdeliver
• Communicate- keep channels of communication open, even when there is not much to report.

Duty to the client.

An advocates duty is as important as that of a judge. Advocates have large responsibility towards the society. A client’s relationship with his/her advocate is underlined by utmost trust. An advocate is expected to act with utmost sincerity and respect, his conduct should be diligent and should conform to the requirements of the law. A lawyer is under an obligation to uphold the law and to ensure that the public justice system is enabled to function at its full potential.

• An advocate is bound to accept any brief in the court or tribunal or before any other authority, in case he is his client.
• An advocate shall not ordinarily withdraw from engagement, once accepted, unless there is a reasonable cause or sufficient notice given.
• It is the duty of client to fearlessly uphold the interest of his client by all fair and honourable means.
• He shall defend the person accused of a crime regardless of his personal opinion as to the guilt of accused, bearing in mind that he is loyal to the law which requires that no man should be convicted without adequate evidence.

References

• https://www.indianbarassociation.org/
• https://learn.org/articles/What_Does_a_Lawyer_Do.html
• https://www.totaljobs.com/careers-advice/job-profile/legal-jobs/lawyer-job-description
• https://www.actlawsociety.asn.au/public-information/the-lawyerclient-relationship
• http://www.legalblog.in/2011/05/duties-and-conduct-of-advocates-supreme.html
• http://www.unitedworld.in/school-of-law/client-counselling-a-young-law-students-experience/
• http://www.lawsociety.com.au/community/thelawyerclientrelationship/
• http://www.lawtechnologytoday.org/2016/03/word-mouth-powerful-advertisement/
• https://lawyerist.com/clients-call-too-much/
• https://www.legalmarketingblog.com/tag/client-satisfaction/
• https://www.attorneyatwork.com/golden-rules-building-client-trust/

In this article, Sarthak Modi of ILS Law College Pune how to obtain a Liquor license in Mumbai.

Liquor license in Mumbai

Liquor is a nontoxic liquid which contains Ethyl Alcohol. It is produced by distillation of grains, fruit, or vegetables that have already gone through alcoholic fermentation. All liquids containing alcohol are known as liquor. There are mainly three types of liquor produced for consumption in India.

• Indian Made Foreign Liquor (IMFL) – This term is used to determine western-style hard liquors such as whisky, rum, vodka, etc., which are manufactured in India.
• Beer
• Country Made Liquor – These are indigenous recipes such as fenny, toddy etc.

A liquor license is a permit to sell alcoholic beverages. States don’t want just anyone selling liquor. That is the reason they require restaurants and businesses to apply for a liquor license. Purchasing, possessing, transporting, and consuming liquor without a valid permit is an offence under the Bombay Prohibition Act, 1949. In Mumbai the excise department issues licence for buying and selling of Liquor.

The licenses can be broadly classified into two

• Wholesale Liquor License – means a person holding a licence in Form C.I.W. II under these rules to sell duty paid country liquor by wholesale. TOD/III under the Maharashtra Country liquor Rules, 1973, to sell country liquor by retail.
• Retail Liquor License – “ retail licence ” means a person holding a licence in Form C.L.III or C.L./F.L/

General guidelines for obtaining Liquor license

What Specific class of License you want?

Wholesale Liquor License

1. Wholesale license for wine : Trade and Import Licence for removal a custom frontier.
2. Licence authorising the storage and wholesale sale of duty paid country liquor to retail shop.
3. Wholesale sale of foreign Liquor.

Retail Liquor License

1. Permit room license
2. Club License
3. Beer Shoppe Licence
4. Mild Liquor and wine bar License
5. Wine bar License
6. Wine Shoppe License

Determine whether you need an on license or an off license

1. You will need a license if the liquor you sell is intended to be consumed on the premises. Examples of businesses needing a license include bars, restaurants etc
2. You need an off license if you don’t intend alcohol to be consumed at the place of selling it. Examples of businesses that require an outside license include liquor stores, grocery stores and drug stores.

Start as early as possible

• If you intend to open a pub or restaurant serving alcohol, it is important that you start your liquor license as early as possible.
  To get approval for a liquor license it takes time in some places as long as a year. Therefore, this should be one of the first considerations when planning your new business venture.

• Complete the required form and provide any required documentation.
• The application will contain details about your business and your personal background.
• Details of your age, your business experience, and a clean personal record may affect the state’s decision to grant you a license.
• You must also include a number of important documents in your application. These include: a certificate of incorporation, a partnership agreement, your company’s constitution, a copy of your proposed food menu, photos or drawings of the exterior of the building and a floor plan of the interior, a code compliance certificate, a copy of the title certificate for the premises.
• Renew your liquor license annually. You must renew your liquor license on an annual basis, which means you have to pay a renewal fee.
  
• Keep in mind that if you stay with your local agency during the year, you may be entitled to a reduced fee.
• Be aware that your license can be revoked. Understand that your license may be revoked if you violate your local agency’s terms of service. Ordinary offenses include the sale of alcohol to a minor, the supply of alcoholic drinks to customers and to stumble an employee on the premises.

Conditions under which authority grants license

Section 34 – Vendor’s licenses

1. The government may, according to rules or a written order give an official permission to give a vendor license for the sale of foreign liquor.
   
2. An entrepreneurial license is granted under the following conditions:
   

(i) The stock of foreign liquor from the licensee (except for disposal at the store) will be held by him at 12 godowns approved by the government.

(ii) The license holder pays all leases, costs and expenses related to warehouses and surveillance.

Section 35 – Hotel licenses

The government may, by rules or an order in writing, authorize an officer to grant licenses to the managers of hotels to sell foreign liquor to the holders of permits under this Act:

Provided that the government is satisfied that such a hotel usually has a sufficient number of staff members eligible to hold permits.
Such licenses are issued under the following conditions:

1. Liquor will be sold to the permit holders living or boarding at the hotel.
   
2. Consumption of liquor sales will not be allowed in any of the rooms of the hotel to which any member of the public has access.
   
3. The hotel license holders must pay the expenses of any officer of the excise institution, if any, for the grant and control of permits on the premises or for the supervision of the issue and consumption of foreign liquor in the hotel.

Wholesale License

• The procedure to obtain wholesale licence for selling liquor is mentioned in Part-III of Bombay Prohibition Act ,1949.
• Anyone who wants to obtain the wholesale licence shall make an application to the Commissioner through the Superintendent of the district in which he desires to establish a warehouse for the purpose of storing the country liquor.
• Then superintendent shall verify the particulars given therein and satisfy himself that the building or rooms of the warehouse for the purpose of sale of liquor conform to the requirements of rule 15.
• The requirements of warehouse premises are also mentioned in the act.

Renewal of bar/shop license

In Mumbai City Restaurants with Grade 1 have been given the facility of obtaining the Bar Licence i.e. Permit room licence for “ON- Consumption” and FL II licences have been given to the shops to sale sealed Bottles for “OFF- Consumption”. The duration of these licences is for one year.

Under what Rule/Act the license is issued

Bombay Foreign Liquor Rules 1953. The license is issued under the Rule 24, 44, 47 and Special Permit Rules 1952 for Beer Bars.

How to Apply

Any person desiring to renew a license shall, thirty days before the date of expiry of license, apply for renewal thereof. Every application shall be accompanied by a challan, evidence of payment of application fee of Rs.25/- and renewal fees as fixed by the State Govt. from time to time.

What documents are to be submitted along with the application

• The licensee desiring to renew the license should apply in the prescribed form along with Rs.1/- Court fee stamp.
• Application fee of Rs.25/- in challan
• Licence fee challan as fixed by the State Govt. from time to time
• Income tax/Sales Tax clearance certificate or affidavit.
• Partnership Deed copy or Declaration regarding no change in the Partnership or status of the institution
• Documents regarding Ownership/Tenancy of the premises
• Licence in Original

License for purchasing, consuming and transporting alcohol

• If a person in Maharashtra is buying alcohol than he needs to be a major (i.e. above 18); as per Bombay Prohibition Act, 1949 Section-18. However he cannot consume the alcohol, because the consumption age in Maharashtra is 25 (as per Bombay Prohibition Act,1949- Part VI-A Rule 70D).
• Such a law becomes difficult to enforce as there are very limited ways to ensure that any person who is under 25 do not consume the alcohol.
• Even if he is caught with alcohol he cannot be punished if he is above 18.
• If an individual wants to buy alcohol he first need to get a license from the government.
• He needs to show that license to the vendor before making a purchase.
• A person is allowed to possess only 12 units of alcohol at a time.

Cost of obtaining liquor license

• The temporary club licence or party permit fees for bigger parties (more than 100 people) is Rs15,000. But smaller parties (below 100 people) is Rs10,000.
• For temporary club licences for liquor parties in smaller towns, such as Navi Mumbai, where the population is below 20 lakh, the mandatory licence will cost Rs10,000 for above 100 members and Rs7,000 for below 100 members.
• As per excise department rules, the FL-4 licence is needed to host a private liquor party in a flat or at a resort that presently costs Rs13,000 across cities in the state.
• Consumers must have this licence even if they are drinking with friends in an apartment or a house party organizer can be booked for illegal possession of liquor if he does not have permission to host the party.
• While only if a few friends are together, the consumer should at least have a Rs5 daily drinking permit.
• License fee for permit rooms is Rs. 544,000 and that for beer shops is Rs.150,000.

Digitalisation of Licensing process

• The state excise department also has an online portal and an app ‘excise.maharashtra.gov.in’ to grant liquor consumption permits.
• the permit could be obtained by simply keying your Aadhar Card number on the website or the app.
• A digital permit will be provided within few minutes of the application. The applicants can even check the application status online.
• Those applying for liquor permits must be aged 25 and above.
• A one-day drinking for foreign liquor costs Rs 5, country liquor costs Rs 2 whereas the annual permit costs Rs 100 and a lifetime one costs Rs 1,000.
• One can apply only one permit in a day.
• Earlier, applicants needed to go to the excise office to submit documents and pay fees, for getting the drinking permits.

Places where Liquor shops are prohibited

• The Supreme Court in December 2017 had banned the sale of liquor within 500 metres of state and national highways across the nation from April 1,2017 but this order does not prohibit licensed establishments within municipal areas.
• No liquor shop should be established in municipal corporations and municipalities within a distance of 50 metres from an existing place of worship or educational institutions and that a minimum distance of 100 metres should be maintained between such places in all other local bodies .
• No liquor shop should be established within 100 meters of a hospital.

Penalty

Possession, consumption, or transportation of alcohol in Maharashtra without a permit can get you fined to Rs 50,000 and/or a prison sentence of up to five years.

This was all about how to get Liquor license in Mumbai. Do you have anything to add to the procedural aspect of how to get a Liquor license in Mumbai? Comment below and let us know.

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References

http://mumbaicity.gov.in/htmldocs/liquor.htm

https://www.lawfarm.in/question/licence-for-liquor-store

http://wineshoplicense4sale.blogspot.in/2014/08/wine-shop-license-in-maharashtra-mumbai.html

In this article, Raghav Ajmera of Shri Navalmal Firodia Law College, Pune discusses how to get a license to set up a liquor store in Delhi.

Introduction

Delhi is among the few cities in India which is famous for its nightlife. We all know that alcohol is the most consumed intoxicant around the world. The sale of alcohol usually takes place at liquor stores, bars, pubs, discos, clubs and restaurants. As compared to the other states Delhi comparatively has a cheap alcohol rates with a high demand for it. But to set up a liquor store it is not as easy as a setting up a general store. To operate a liquor store you need to have a license which allows you to sell alcohol in the country. To get a license for a liquor store it can take up to a year.

• In India, the laws governing alcohol which regulates the sale and buy of alcohol varies from state to state. They vary because the subject of alcohol is included in the state list which comes under the seventh schedule of the constitution of India.
• The excise department in Delhi regulates the liquor head. For the consumption of alcohol, there is a legal age for every state which is known as the consumption age.
• Consumption age is that age when a person can consume alcohol.

In Delhi, as per the Delhi Excise Act, 2010-SECTION 23 and Delhi Liquor License Rules, 1976 the legal age to consume alcohol is 25.

What is a liquor license?

A liquor license refers to the license which is required to sell alcohol at a certain place. It is produced by a legal authority. The liquor is supplied by the L-1 licensee to the holders of L-2, L-3, L-4, L-5, L-19 and L-19 A, L-52, L-53 licences in the National Capital Territory of Delhi. Every state has its different rules and regulations governing the sale of alcohol.

Kinds of Liquor available in Indian market

There are two types of liquor available in the Indian market.

1. Indian made foreign liquor (IMFL): It refers to ‘Hard Liquor’ manufactured in the country.
2. Imported foreign liquor (IFL): This refers to the liquors which are produced outside of India and later on imported to India. IFL is usually expensive than the IMFL.

Implementation of liquor laws in India

In Constitution of India, Article 47 it has been clearly mentioned that “The State shall endeavour to bring about a prohibition of the consumption except for medicinal purpose of intoxicating drinks and of drugs which are injurious to health.” In India there are 5 states where there is a strict ban on sale, purchase and consumption of alcohol.

Types of Licenses required to serve liquor

There are several rules which are called Delhi Liquor Licence Rules, 1976 which states about the types of licenses required to serve liquor in Delhi and alo describes the do’s and don’t to provide safe and quality liquor to the consumers in Delhi. There are 5 categories under which the license to sell the kinds of liquor are mentioned, those categories are as follows:

• Indian made foreign liquor (IMFl)

• Country liquor

• Denatured & Special Denatured Spirit

• Rectified spiri

Liquor licenses are of different kinds. These kinds of licenses are subject to sale of liquor at various places like the retail shops, bars, hotels, restaurants, pubs, clubs, and discos. For instance, if a person wants to sell liquor as a wholesaler then he/she need to obtain the license L-1 which prescribes the ‘Wholesale licensee of Indian Made Foreign Liquor’.

Granting of License

Grant of L-1 License

This is in regarding the granting of all liquor license for the wholesale vending to the company or a society or a partnership firm or proprietorship firm provided the applicant owns distillery/breweries/manufacturing units/bottling plants. The applicant has to follow the terms and conditions prescribed by the authority.

Grant of L-3 License

To get this license the state government issues tenders which are being issued to the distilleries or bottling plants which must be licensed by the state government or central government if the bottling plants follow the terms and conditions.

Grant of L-6 License

The L-6 license is in regarding the license for retail vend of foreign liquor/beer are granted only to selected undertakings of the Delhi government namely DTTDC, DSIDC, DSCSC and DCCWS. Any proposal in respect of premises for opening of a vend would come from above Corporations.

Grant of L-9 (Previously L-52 D)

The state government for the purpose of retail sale of various brands of Indian liquor and foreign liquor grants the license in collaboration with L-1. There are certain terms and conditions which are mandatory to be done after which only a person gets granted a license.

Grant of L-10

Licenses in form of L-10 is also for the purpose of retail sale of various brands of Indian liquor and foreign liquor as approved by the competent authority but the terms and conditions is not same as the L-9.

Grant of P-10 and P-13

This is in regard to the temporary license for service of liquor in parties/ functions/ conferences. The terms and conditions of the temporary license varies for the residences, For Licensees allowed for onside Consumption Hotels/Clubs/Restaurants, at any other premises.

Grant of L-15 and L-16

The authority grants licenses to the hotels holding star classification and approval of department of tourism, Govt. of India which are necessary for the conditions for grant of license. The guidelines laid down by the authority needs to be fulfilled.

Grant of L-17 and L-18

This is given to the independent restaurants approved by Department of Tourism, Govt. of India. One of the mandatory terms and condition is that the restaurant should be in a commercial area with an adequate parking space.

Grant of L-28

This is granted to a club registered with the registrar of firms/registrar of cooperative societies for service of the foreign liquor to it’s members. Any eligible club can apply here in accordance with the terms and conditions prescribed by the authority.

Grant of L-29

This is granted for service of Liquor/Beer at a club/mess whose membership is exclusively for Government Servants and which does not follow commercial rates and rules. The documents/procedure required for granting L-29 License is similar to the grant of L-28 license.

Apply online for liquor license

This is the world of technology where the work should be done on one click and same has been introduced by the Delhi government. The government of Delhi launches the portal to apply online for wine and beer shop/liquor license in Delhi. Now after the introduction of the portal there is no need for a person to visit the excise department.

The online liquor license program is launched by Delhi chief minister in excise department. This decision was taken by the Delhi government to make the work easy for the people applying for liquor license.

You can visit the official portal for apply online in Delhi for liquor license.

Choosing the right business structure

The purpose of setting up of any business structure is a person should shield themselves from liability and protect their assets from creditors. These days some of the business structure are very common and some of them are sole proprietorship, partnership, limited liability company (LLC), and corporation. Whatever the structure you’ll choose will help you to increase your money and assets and decrease your liability. For instance, if we choose the option of setting up a sole proprietorship we’ll have to invest it on our own and all risk should be suffered by us and also all the profits to be shared by the sole proprietor himself.
Paperwork, licenses and business permits are required to operate a business. The sole proprietorship is the best suited business form.

Legal framework and licensing required for setting up a liquor store in Delhi.

Part A – Understanding what type of license you need

Get knowledge of your state liquor laws

Every state in India has its own rules and regulations regarding the consumption, purchase and sale of alcohol. Before applying enquire as much as you can at your nearby liquor shops regarding the terms and conditions prescribing the regulations also you can go to the authority granting licenses.

• Every state has an Alcoholic beverage control (ABC) that governs the conditions of the sale, purchase, consumption and distribution of alcohol.
• Some of the states have license quotas which limits the number of places to sell alcohol within the state at any point of time.

Find out if you need an on-license or an off-license

There are two types of licenses which is required by the premises that offers liquor.

• The on-license refers to the kind where the alcohol is sold and consumed in the same premises. This type of license includes bars, restaurants, discos, etc.
• The off-license refers to the kind where the alcohol is consumed outside the premises. These are usually shops.

Figure out the specific kind of license you need

• Tavern license: It might be required in some states by business organisations that serves food but enjoy half of the benefits from the sale of liquor.

• Beer and wine: Some smaller restaurants are allowed only to sell smaller drinks like beer and wine and are not allowed to sell hard drinks.

• Restaurants: This helps and enables the sale of liquor in the premises which also helps in the profits of the restaurant.

Part B – Navigating the application process

Step 1 – Start as soon as possible

In case if you are thinking to open a bar or a restaurant serving alcohol you should be two steps ahead from all the events because getting a liquor license is not an easy job.

Step 2 – Consider the cost

The cost of obtaining the liquor license may vary from state to state and also from case to case. In some of the cases the price is very low but sometimes the price may go very high. Unfortunately because of the license quotas you may have to buy the license from an existing bar, liquor store, or restaurant.

Step 3 – Write a clear outline of business you are running

As explained in the above part -A you need to determine what kind of business you are running so that you may get the license accordingly.

• So as part of your application you need to write down what kind of business you would be running and whether you ought to sell liquor on your premises.
• You should also mention what kind of liquors you would be serving. Whether it is wine, beer or hard drinks or all the three.

Step 4 – Fill in all the necessary forms and complete the required documentation

Whatever asked in the form should be properly filled with the necessary information.

• The application should be prescribed with your personal details, business experience, your age, and your clean personal image.
• With your personal documents you also need to attach a personal agreement, a certificate of incorporation, with a municipal corporation approved building plan, a code compliance certificate and a copy of the certificate of title for the premises.

Step 5 – Be prepared to defend your proposal

After giving your documents and everything, a notice will be posted in the proposed area of business, including your name and sort of permit you are applying for.

• This notice must be publically displayed for a particular time in your area. During this time, anyone from the local community can come forward and contest your application.
• Depending upon the state or city laws you may also be required to post an announcement of your liquor license application in the local newspaper, and in some places, reach out to local neighborhood organizations such as schools, places of worship and nearby parks.
• If there are no objections to your application, local government will proceed with reviewing your application as normal.If there are objections, you may be called forward to defend your proposal at a public hearing, before a final decision is made.

Part – C Maintaining your liquor license

Renew your license yearly

If you wish to maintain your liquor license, you will need to renew it yearly by paying a certain amount of fees.

• If you stay at a good standing in your locality throughout the year, you may be entitled to reduction in fees.

Be aware that your license can be revoked

Your license can be revoked if you go against the rules and regulations of the authority.

• It can be revoked if you sell alcohol on dry days, or sell alcohol to minors or not incorporate according to the guidelines by the authority.

Conclusion

India is amongst the biggest manufacturer of liquor around the world. With time the consumption of liquor has increased and it is not a good thing. There have been instances where a person not having the legal capacity is drinking and which is not good for a country’s future. The process to get a liquor license is not an easy job it has very hindrances and obstacles also it requires a lot of capital but it is a profitable business. As per Delhi excise rules, no person can stock more than 18 liters of liquor, wine, cider, alcopop and beer and 9 liters of Indian and foreign alcohol (rum, whiskey, vodka, gin) at home or for parties.

References

• https://blog.ipleaders.in
• https://www. wikihow.com
• http://delhi. gov.in/wps/wcm/connect/doit_excise/Excise/Home/Frequently+Asked+Questi
• http://www.delhi. gov.in/wps/wcm/connect/doit_excise/Excise/Home/Licences/Licences
• https://blog.ipleaders.in/liquor-laws/

In this article, Leepakshi Rajpal of SLS Hyderabad discusses the primary difference between criminal and civil negligence.

Introduction

Negligence is both civil as well as criminal wrong. This blog will initially explain the theoretical part of negligence followed by what people actually face in the real-life scenario. It is vital for us to know and understand that the concept of negligence is derived out of the basic word that we all have been subject to.

Understanding the concept of Negligence in law

So, we commence with the meaning of the word negligence which means “carelessness”. So it is basically a situation where one person is injured or is harmed due to the carelessness of the other person. The other person does not harm directly but due to an act that he committed negligently is the tort of negligence committed. It is when one person owes another person, the duty of care, which means that any other ordinary person would have taken care if he would have been there in his place, therefore negligence is where due to the failure of one person to take care, another person suffers harm, damage, injury or loss. Sometimes, situations arise in which there exists no contractual relationship between two parties, neither written nor implied. These situations are civil in nature and where there exists a contractual relationship that is where the concept of the criminal liability arises. For example in a case where doctor is treating a patient in the surgical room, if the patient has signed the contract where it is mentioned that the doctor will not be liable in case of death, then there exists a contract but if the patient dies not because of the disease but because of the negligent act that the doctor committed then it is criminal negligence.

Elements or essentials of Negligence

There are few essentials of negligence that need to be fulfilled before one can claim that negligence has been committed. They are appended below:-

Duty of Care

This means that there exists a duty of care in everything you do. The action of a person is tested upon whether any prudent man would have done the same in the similar circumstances, therefore duty of care means to take reasonable care of what you are doing.

Breach of Duty of care

It is the breach of the duty of care which should be present in the negligent act, which means that if the act is done with the reasonable care and protection as any other prudent man would do, then there arises no question of the negligence being into question.

There must be an injury or harm caused

Now, the third important element that needs to be taken into consideration is that there needs to be an injury, harm or loss to the person because of the breach of the duty of care on the part of the other person. Therefore, negligent act will come to the cognizance of the court only when the injury is caused to the person.

The injury or harm caused must be as a result of the breach of duty of care

This means that the previous act of the injury being caused is complete to be called as negligent act when it done because of the breach of the duty to take care on the part of the other. So, it is when the other person fails to perform his or her duty towards the other, which any other prudent man would do in ordinary course of situation, and injury is caused to the person because of the failure to take care of the other, negligence is said to have been committed.

Defences to Negligence

Negligence can always be an appropriate trick to target anyone, therefore, there are defences available which prove that it is not always that the act has to be negligent. These defences are appended below:-

Inherent Risk

So, when we talk about inherent risk, it means when the act itself is dangerous enough that it is dangerous and any prudent man would not engage in such an act, or any other prudent man would have done the same thing as the defendant has done, therefore in such cases the defendant would not be liable of the negligence of which he is charged in the court.

For instance, when some dangerous animal approaches towards me, I run and while I Run, I take the knife from your cake shop and ruin your cakes, because of which you suffer losses and damage. So, I cannot be negligent because the animal that is running behind me is dangerous and if I do not take the knife from your cake shop, I would have died, therefore my act of picking the knife from your cake shop was not a negligent act and was an intentional act. The circumstance involved an inherent danger. Therefore, I cannot be charged with negligence.

Obvious Risk

So, in this kind of defence we talk about something that is very obvious. Where the act done by the defendant was an obvious reaction to the primary action, the defendant cannot be blamed for negligence.

For Instance, where due to the spillage of oil, I slipped holding onto you and then you got hurt, I will not be held liable for negligent act.

Voluntary Assumption of Risk

I see a gun-shot approaching towards me and I jump pushing you ahead of me, in that case, I presumed that the gun-shot is coming towards me and the sudden reaction to the presumption was me jumping at you. In that case, I will not be held liable.

Dangerous Recreational Activity

Dangerous recreational activity is when we participate in an activity for recreational purposes, but that activity is inherently dangerous and the participation in which would be a voluntary act, I will not be held liable for negligent act.

So, where I participate in a sea diving activity, and drown and die, the person who took me for sea diving will not be held liable for any negligent act or my death because it was me who went for that activity, therefore he cannot be held negligently liable for injuries caused to be or harm caused to me.

Exclusion of Liabilities

In this what happens is that the defendant tries to modify their exposure to liability by stipulating a reduction or even an exclusion from liability. Exclusion of liability means that the defendant tries to maintain a relationship with the plaintiff, so as to avoid the liability on them. Therefore, when the defendant tries to enter the premises of the plaintiff according to the will of the plaintiff that is exclusion of liability. There lies an exception to this, i.e. when the term is used in the broader sense, reliance cannot be placed upon it because it loses its essence.

Illegality

This defence means that there is illegality in the action done by both the plaintiff and the defendant, which means that there exists a common action based on illegal terms and therefore, if the plaintiff sues the defendant for causing harm negligently, then the defendant can claim that the act itself was illegal and therefore, the suit does not stand.

For instance, when both the plaintiff and the defendant together keep a tiger to tame in their house, and one day the defendant opens the cage and the tiger destroys the lawn, the plaintiff cannot sue the defendant for opening the cage of the tiger, because keeping the tiger for taming purpose or for any other purpose is illegal according to the law of the land.

Inevitable Accidents

This means that accidents which are inevitable and over which the defendant has no control of, he cannot be sued for the same.

For instance, If I am travelling through toy train and buy a ticket from the ticket counter, and that train gets de-railed in between because of which I get hurt. So, I cannot sue the ticket distributors for not informing me about the derailing, even they were not aware of this inevitable accident. Therefore, they are not liable.

Contributory Negligence

So, contributory negligence means where both the parties are involved, no one party can be blamed for it. This means that when both the parties contribute to an action, and that action turns the table for one of them, the other one cannot be sued, because it was both of them who contributed for the negligence of the act and therefore, it was contributory negligence.

Now that we know what negligence means, what its essentials are, and what its defences are, let us get into the practical aspect of the negligence and what people really face in their daily lives.

Now, negligence can be of any type but what our blog is focussing on are the major areas where people find themselves to be trapped. So negligence can be of criminal nature or civil nature. Let is discuss both of them below:-

Cases of Criminal Negligence

1. When a person is driving a car and texting at the same time, and in the meanwhile breaks someone else’s car, he is criminally negligent because the criminal laws of the land, do not allow texting and driving.
2. Similarly, in a case where a person is drinking and driving, and kills someone on the road, he can be held criminally negligent. The reason is that killing is a crime and similarly drink and driving is also a crime, therefore he can be sued and held criminally liable.
3. When a nurse in a nursing home forgets to feed the patient and the patient dies because of the negligent act of the nurse that is when the nurse can be held criminally liable because it is because of her criminal negligence that the patient is put forward for a risk to life.
4. A caregiver in a hospital who is not paying attention and who provides someone with a deadly dose of medication could be considered criminally negligent.
5. A person who is supposed to be a caretaker of the nursery and fails to take care, in lieu to which someone takes away child of another, can be held criminally negligent.
6. A doctor who prescribes additive drugs to a patient knowing that he is allergic to it can be held criminally negligent.
7. A doctor in lieu of making money from the services he provides, if exchanges the lungs of a person during a surgery or leaves a tool or any hazardous substance inside his patient’s body, is criminally negligent.
8. A parent who leaves their child of two years, at home for going to a pub can be held criminally negligent. This is because it is their breach of duty to take care which is exposing the child to substantial risk.

Procedures and Best Practices Involved in Filing of a Criminal Case

So, now that we have seen certain cases where negligence can turn into a criminal act, we need to know how to file a criminal case.

1. File an FIR – Make sure that you file an FIR with the police at the police station after the happening of the criminal event with you.
2. Vakalatnama – Once you have filed an FIR, know that the Vakalatnama has to be filed because the lawyer or the advocate will need to represent you on your behalf.
3. Investigation– the process of investigation starts after the cognizance of the case to the court and sometimes even before that if the nature of the offence is serious in nature.
4. Laying of charges – If the crime is heinous then the police will frame the charges in the police diary and then report the same to the court. The court will then decide whether to prosecute based on the witnesses and the statements provided in the court.
5. Enquiry – Inquiry will be conducted by the court to determine the guilt of the offender and if no such guilt is found, then the statements will be recorded under the Section 164 of the CRPC, where the accused will be required to say whether he feels he is guilty or not and he can admit the guilt.
6. Trial- The process of trial starts when the investigation is over and the court now needs to decide upon the facts and the evidences upon whether the accused is guilty of the offence or not.
7. Arguments– both the lawyers put forth their arguments for the determination of the guilt of the accused.
8. Judgement– The judgment is given on the basis of the arguments put forth and taking into consideration the result of all the steps involved in a criminal case.

Advocates liability for Negligence in criminal cases

Indian position on advocates liability for negligence is defined under Section 5 of the Legal Practitioner’s (Fees) Act, 1925. No legal practitioner who has acted or has agreed to act shall, by reason only of being a legal practitioner be exempted from liability to be sued in respect of any loss or injury due to any negligence in the conduct of his professional duties.

Civil Negligence

Civil Negligence can be of different kinds, just as the way criminal negligence is. There are various common day examples which prove that the negligence even in the ordinary sense can take us to courts. Some of the examples of civil negligence are as follows:-

1. A store which is very popular for the beers, and usually has a lot of traffic inside the store, holds a sale in the mid-season without any security can be held negligent in his acts.
2. A pharmaceutical company if launches a drug without testing it on the humans can be held negligent.
3. A driver who runs a stop sign and goes beyond the prescribed speed limit can be held negligent.
4. A person who owns a dog and leaves him open in the courtyard of another, and the dog destroys the garden of another. The person can be held negligent.
5. If a person who owns a dog, leaves a dog open in the playground and the dog attacks the cat of another and injures her, the person can be held negligent.
6. An office where mopping is in process and does not put a sign of wet floor, can be held negligent.
7. A company which does not gets incorporated according to the SEBI guidelines, can be held negligent.
8. A doctor who operates on the wrong patient can be considered negligent.

Ten best practices and Procedures for filing a Civil Suit on negligence

1. Filing of a suit or a plaint

This means that you actually take down time and everything involved in the civil action that happened against you, in the above context, negligence. Then you write and give a written statement of the facts and whatever happened.

2. Vakalatnama

In vakalatnama what happens is that the person filing the suit authorises the advocate on behalf of the person to file a suit and in civil cases, this is not really necessary. This is done as the requirement of the time and the need is. The person can himself go and file the case and fight the case as well, the requirement of the vakalatnama, therefore is not a compulsion.

3. Filing

In this step what happens is that you file your plaint which is a written statement with the Chief Ministerial Officer or any other officer as the requirement may be and pay the prescribed fee for filing and the procedural fee and get going with the following steps. The fees may be different according to the officers you approach to.

4. Hearing

In this stage of hearing what happens is that the judge will listen to what you want to say and what the other party wants to say and then it will ask for substantial documents supporting the case and then fix a date.

5. Written statement

Written statement means that the statement by the judge that is given for the hearing on the next date. Also, within that period of time the defendant is required to record his written statements proving himself to be free of whatever charge the plaintiff has put against him.

6. Replication by plaintiff

Replication by the plaintiff means, that the person who has put the charges against you of any civil nature, he will reply to the recorded written statement of the defendant substantiating himself in the court of law of the various practices and actions that prove himself to be the right and the defendant to be actually guilty of the charge of the civil action against him.

7. Filing of other documents

Filing of other documents mean that the other documents required to substantiate the arguments by each of the parties involved. Both the parties collect and give the collected documents for substantiating their arguments and prove that they are rightful in the court of law.

8. Framing of issues

Framing of Issues means that once the documents have been put forth across the table, the judge will now consider the issues and the parties will have to fight their case upon the issues so framed according to the substantiated documents and evidences.

9. List of witnesses

List of witnesses means that the documents that substantiated by the parties, need also to be accomplished by a witness who will prove in the court that he saw or witnessed the event happening for which the case has been filed.

10. Final Hearing

Once the witnesses, documents and issues are looked into, the judge decides as to in whose favour the judgement should be and acts as an empire in the adversary system of the Indian Courts. The judgement is either given in the form of paying damages, compensation, injunction or remuneration for the losses suffered.

Conclusion

Therefore, in the above-mentioned circumstances, different levels of negligence can be traced. Some negligence may be civil in nature while the other may be criminal in nature. If we stop doing negligent acts, we will stop tolerating them too and then only we will become careful about our actions about what we speak and what we do.