In this article, Akshaya Babu Vaddiraj pursuing M.A, in Business Law from NUJS, Kolkata discusses Data Protection Laws In India.

INTRODUCTION

The term ’Data’ is often used in synonymous with the terms ‘information’. Data is nothing but systematic collection of information and storage of the same over a period of time on a particular branch of knowledge or in respect of a particular field of activity such as date on usage of chemicals and fertilizers by farmers, data on functioning of Government run hospitals, data on consumption of alcohol, data on road traffic on a particular section of the road, data on student activities in a college or university. Like-wise data can be any information which is collected either in physical form or in electronic form. Further data can be public data or private data. Public data is such information which is available in the public domain like newspapers, televisions and such other public domains, Govt. offices, or with mass media or data that is available or accessible to all without any restrictions. Private data is basically data relating to private persons which can be individuals, institutions, organizations, companies or any other entity.

The issue of protection of data is as old as the collection and possession of data. If data which is personal or which is privy to a particular person under law of the land, such persons are entitled to own, retain and deal with it as they feel it appropriate. The law relating to owning and possessing of movable property will equally apply to private data. However, there is an issue as to the ownership of private data which is in intangible form. Similarly, there are issues as protection of private data which are intangible forms like computer data base, electronic data, mails and such other information. The issue of protection of data has become more relevant with the advent of new technologies like internet, mobiles, televisions, computers and such others in modern technologies which communicate and transmits data in a split of seconds.

Though the technology advancements vis-à-vis data, data mining are truly advancement of human beings, but the flip side of this technological advancement is misuse and abuse of data when private data / privileged data / confidential data is stolen, plagiarized, pilferage, copied and misused in such other unauthorized manners, the real owner/beneficiary of such data would be a looser and this is where the state has to step to provide legal framework for protection of data of people who own it or who are legally entitled to use or deal with it appropriately for their  requirements. The Constitution of India protects individual liberty and also protects right respect to hold the property. Further, the Constitution also ensures right to livelihood and liberty to all its citizens. Thus if you look at data as a private property of citizens such data is required to be protected under the legal framework of the country.

Prevalent Laws governing data protection in India

In India, as of now there is no specific law in relation to data collection, storage, data mining and data protection. There are certain legislation and subordinate legislation which covers this subject. Amongst these Laws important ones are:

1. Constitution of India
2. Indian Contract Act, 1872
3. Information Technology Act, 2000 and rules made thereunder
4. Indian Penal Code, 1860 and
5. Copy Right Act

CONSTITUTION OF INDIA

The Constitution of India recognized right to privacy which in other words is a right to have a privacy of data. One of the basic features of our Constitution is that it guarantees civil liberties to the citizens of India in the form of certain Fundamental Rights. Now a citizen owning private data will be considered as data as his private property to eke his livelihood and therefore protection of such database falls within the reach of the means of Right to  Livelihood under  Article  21  of the  Constitution of  India.  Right to Livelihood of a citizen cannot be taken away except by a due process of law. Further our existing legal framework recognizes citizens’ right on his /her property, without any restrictions and state cannot deprive the right to have private property except by due process of law. The Right to have data protection of a citizen thus can be well considered within the scope of Fundamental Rights under Article 21.

INDIAN CONTRACT ACT, 1872

Indian Contract Act is generally based on the common law principles and the Contract Act provides space to the parties to a contract to have appropriate clauses in the contract for protection of data like confidentiality clause, confidentiality etc.

INFORMATION TECHNOLOGY ACT, 2000

Information Technology Act, 2000 is one piece of legislation that was brought in by the Parliament to provide a legal framework for entire virtual eco system such as e-commerce, electronic contracts, e-mails and so and so forth. Today after more than 15 years of passing of this Act, the e-commerce has grown by leaps and bounds in all aspects of business and also in the working of the Governments and aslo in spheres of life working and it is likely to grow at a further rapid pace in future. Under such circumstances the Information Technology Act, 2000 has become more relevant than ever as it covers various aspects of applications of Information Technology. One of the activity which is covered under this Act is Data Protection. The Information Technology Act provides framework to stop misappropriation of computer network systems, database and imposes heavy penalties in the Act against Cyber Crimes.

Section 43 A of the Information technology Act explicitly provides that “Where a body corporate, possessing, dealing or handling any sensitive personal data or information in a computer resource which it owns, controls or operates, is negligent in implementing and maintaining reasonable security practices and procedures and thereby causes wrongful loss or wrongful gain to any person, such body corporate shall be liable to pay damages by way of compensation to the person so affected”

Further Section 72 A provides that “Punishment for disclosure of information in breach of lawful contract. -Save as otherwise provided in this Act or any other law for the time being in force, any person including an intermediary who, while providing services under the terms of   lawful contract, has secured access to any material containing personal information about another person, with the intent to cause or knowing that he is likely to cause wrongful loss or wrongful gain  discloses, without the consent of the person concerned, or in breach of a lawful contract, such material to any other person, shall be punished with imprisonment for a term which may extend to three years, or with fine which may extend to five lakh rupees, or with both”

Thus every person who is possessing or dealing with personal data or information as an obligation to be not to be negligent and as an obligation to have reasonable security practices and procedures thereby no wrongful Laws or wrongful gain takes place to any person.

Further, the Government of India notified a new set of rules named the Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011 under the Information Technology Act with an objective to ensure reasonable security practices and procedures. The  Companies and other body corporates and other organizations have to follow and comply with these Rules while handling sensitive personal data.

Salient features of these Rules

• Rule 3 of these rules provides a list of things which are considered as sensitive personal data such as financial information of the individuals, sexual orientation of the individuals, credit or debit card information
• As per Rule 4 Companies and other body corporates shall have to provide a privacy policy for dealing with personal information and sensitive data and it also requires that the policy should be available on the website of the body corporate. The policy shall include all the necessary details for e.g. type of personal data collected, statements of practices, purpose of collection, provisions related to disclosure and security practices
• In Rule 5 states various provisions are detailed which govern the collection of information by the
• The Companies and other body corporates shall not collect sensitive personal data without obtaining consent in writing or by fax or e-mail form the provider regarding the purpose for which the data is being
• Any personal information or sensitive data shall not be collected unless and until it is for a lawful purpose and the collection is necessary for the fulfillment of that particular
• The provider shall be made aware of the facts as to the information collected, its purpose, its recipients and the agencies that are collecting and retaining the
• The information collected shall be used only for the purpose for which it is collected and shall not be retained for a period longer than which is required.
• However, the Companies and other body corporates shall not be responsible for the authenticity and reliability of any personal data or sensitive
• The provider shall be given an option to opt out of providing such information along with an option to withdraw his consent to the collection at any later stage as
• The Companies and other body corporates shall keep the data secured and it shall designate a grievance redressing body for any discrepancies arising in
• Rule 6 requires that the Body Corporate shall seek the consent of the concerned provider before disclosing the sensitive data to a third party, unless such disclosure was agreed by the parties through any
• However, such information can be shared without any prior consent with government agencies mandated under law or any other third party by an order under the law, who shall be under a duty not to disclose it
• Rule 8 clarifies that a company or other body corporate shall be considered to have complied with reasonable security practices if they have implemented and documented the standards of these security
• Rule 8 (2) mentions the name of one such ISO security standard for data protection. However, any person or agency that are following any code of best practice other than that mentioned in rule 8(2) shall get their code duly approved by the Central
• The Companies and other body corporates and agencies who have implemented either ISO standards or any other standard duly approved by the central government shall be considered to have implemented security measures provided that such codes have been audited on a yearly basis by independent auditors approved by the

Limitations of IT Rules

The above Rules though are step towards having specific law for data protection but are not comprehensive enough.  These  Rules deals with only protected data as defined in the Rules. There is no comprehensive legislation governing and regulating every activity relating to data and have stringent provisions for protecting the data.

INDIAN PENAL CODE ACT, 1860

Indian Penal Code Act, 1860 as amended essentially is a penal law that has been in enforced in the country to prevent data theft. Indian Penal Code has amended data as part of the definition of ‘movable property’ thereby the misappropriation or theft of data now constitute an offence within the meaning of Indian Penal Code.

COPY RIGHT ACT, 1957

Under the Copy Right act, 1957 as amended computer database is included in the definition of literary work and thereby copying of computer database amongst infringement of Copy Rights Act which attracts criminal remedies.

As can be seen from the above legislation that the legal provisions relating to data protection are spread over in various legislations, there are several legislations to these legislations. There is no comprehensive legislation with respect to data protection. Therefore in the recent judgment of the Hon’ble Supreme Court in the case of Justice K. Puttaswamy Vs. Union of India, Supreme Court   noted  that  Government  of   India   appointed  a   Committee   under   the

Chairmanship of Justice B.N. Sri Krishna, which is working towards drafting a legislation for data protection and the committee is expected to submit a draft legislation to Government of India.

RECENT SUPREME COURT JUDGMENT ON DATA PROTECTION LAWS

Data protection laws in India have assumed a high legal sanctity and importance in the light of the fact that in its recent judgment, the 9 judge bench of the Hon’ble Supreme Court in the case of “Justice K. Puttaswamy Vs. Union of India” (Judgment was delivered on 24.08.17) it was held that “Right to privacy is protected as intrinsic part of the right to life and personal liberty under Article 21 of the India Constitution and part of the freedom guaranteed by part III of the Constitution”. Thus, the Hon’ble Supreme Court recognized Right to Privacy as a Fundamental Right.

One of the important consequence of recognizing Right to Privacy as a Fundamental Right is any action of the State or any private party to intrude or threatens to intrude into the privacy of an individual will be a breach of Fundamental Right if such action is not permitted by law. Further such law has to withstand the test of aligning with the basic structure of the Constitution. Taking this analogy further, data of an individual or data of a person is private to that person and such person is entitled to have protection of that privacy. It is this issue which the Supreme Court was deliberating in another matter relating to the challenge to the Aadhaar Card Scheme initiated by the Government of India. As it can be seen in the recent times Aadhaar Card Scheme is a program initiated by the Government of India under UIDAI Act (‘The Aadhar Law)’, whereby the Government is empowered to make Aadhaar Card compulsory for every citizen irrespective of the age, caste, creed or any other consideration. The Aadhaar law empowered the Government to make every activity like opening of bank account, purchasing of properties, admissions to schools and colleges, purchasing of gold ornaments, applying for job, applying for any subsidies from Government, even for buying an air travel ticket the Aadhaar has been made mandatory. All banks in the Country have been instructed to coordinate and ensure that PAN Card and Aadhaar Card are coordinated in a symmetry, uniformity is brought in to avoid duplicate and fake identity cards. The Government also under this Law is proposing to ensure that even for exercising Right to Vote in the Country having the Aadhaar Card is mandatory. Thus, under this Aadhaar Law, the Government is attempting to bring all prevalent identity cards like Voter Id card, PAN Card and such other cards brought under one umbrella of Aadhaar card. The justification the  Government gives for Aadhaar card is to prevent  tax evasion and various other reasons which are stated to be in public interest. However, the Aadhaar Card Scheme came under challenge in the Supreme Court stating that Aadhaar Law is infringing Fundamental Right of the citizens as every citizen has to share his or her private information to the Government compulsorily and the citizens are not sure of the protection of their private data. This challenge in a series of writ petitions provoked the Hon’ble Supreme Court to deliberate further as to see whether the right to privacy is a fundamental right framework of the Constitution of India. During the arguments in the Aadhaar case, it was argued that Right to Privacy is not a Fundamental Right as has been held by Supreme Court way back in 1954 in the case of M.P. Sharma Vs. Satish Chandra. This judgment was a judgment passed by a Bench of the Supreme Court consisting of 8 judges as to 1954, M.P. Sharma case, the Aadhaar Bench referred to the Chief Justice recommending to constitute a 9 Judge Bench to give their opinion as to whether Right to Privacy is a Fundamental Right or not.

In this backdrop, the 9 Judge Bench of the Supreme Court had unanimously held that Right to Privacy is a Fundamental Right and part and parcel of Article 21 of the Constitution. The important ramification of this judgment is the executive and the State cannot intrude into Fundamental Rights of the Citizen without due process of Law meaning thereby Right to Privacy of a citizen cannot be taken away by the State without due process of Law. In other words no Government Official, no authority will have a right to question or demand personal details of individuals except as provided in Law.

The following are the pertinent conclusions drawn by the Hon’ble Supreme Court after reviewing and examining the law relating to privacy across the Globe and also in India:

1. Life and personal liberty are inalienable rights. These are rights which are inseparable from a dignified human existence. The dignity of the individual, equality between human beings and the quest for liberty are the foundational pillars of the Indian Constitution;
2. Life and personal liberty are not creations of the These rights are recognised by the Constitution as inhering in each individual as an intrinsic and inseparable part of the human element which dwells within;
3. Privacy is a constitutionally protected right which emerges primarily from the guarantee of life and personal liberty in Article 21 of the Elements of privacy also arise in varying contexts from the other facets of freedom and dignity recognised and guaranteed by the fundamental rights contained in Part III;
4. Judicial recognition of the existence of a constitutional right of privacy is not an exercise in the nature of amending the Constitution nor is the Court embarking on a constitutional function of that nature which is entrusted to Parliament;
5. Privacy is the constitutional core of human dignity. Privacy has both a normative and descriptive function. At a normative level privacy sub-serves those eternal values upon which the guarantees of life, liberty and freedom are founded. At a descriptive level, privacy postulates a bundle of entitlements and interests which lie at the foundation of ordered liberty;
6. Privacy includes at its core the preservation of personal intimacies, the sanctity of family life, marriage, procreation, the home and sexual orientation. Privacy also connotes a right to be left alone. Privacy safeguards individual autonomy and recognises the ability of the individual to control vital aspects of his or her life. Personal choices governing a way of life are intrinsic to privacy. Privacy protects heterogeneity and recognises the plurality and diversity of our culture. While the legitimate expectation of privacy may vary from the intimate zone to the private zone and from the private to the public arenas, it is  important  to  underscore  that  privacy  is  not  lost  or  surrendered merely because the individual is in a public place. Privacy attaches to the person since it is an essential facet of the dignity of the human being;
7. This Court has not embarked upon an exhaustive enumeration or a catalogue of entitlements or interests comprised in the right to privacy. The Constitution must evolve with the felt necessities of time to meet the challenges thrown up in a democratic order governed by the rule of law. The meaning of the Constitution cannot be frozen on the perspectives present when it was adopted. Technological change has given rise to concerns which were not present seven decades ago and the rapid growth of technology may render obsolescent many notions of the present. Hence the interpretation of the Constitution must be resilient and flexible to allow future generations to adapt its content bearing in mind its basic or essential features;
8. Like other rights which form part of the fundamental freedoms protected by Part III, including the right to life and personal liberty under Article 21, privacy is not an absolute right. A law which encroaches upon privacy will have to withstand the touchstone of permissible restrictions on fundamental rights. In the context of Article 21 an invasion of privacy must be justified on the basis of a law which stipulates a procedure which is fair, just and reasonable. The law must also be valid with reference to the encroachment on life and  personal liberty under Article 21. An invasion of life or personal liberty must meet the three-fold requirement of (i) legality, which postulates the existence of law; (ii) need, defined in terms of a legitimate state aim; and (iii) proportionality which ensures a rational nexus between the objects and the means adopted to achieve them; and
9. Privacy has both positive and negative content. The negative content restrains the state from committing an intrusion upon the life and personal liberty of a citizen. Its positive content imposes an obligation on the state to take all necessary measures to protect the privacy of the
10. Decisions rendered by this Court subsequent to Kharak Singh, upholding the right to privacy would be read subject to the above
11. Informational privacy is a facet of the right to privacy. The dangers to privacy in an age of information can originate not only from the state but from non-state actors as well. We commend to the Union Government the need to examine and put into place a robust regime for data protection. The creation of such a regime requires a careful and sensitive balance between individual interests and legitimate concerns of the state. The legitimate aims of the state would include for instance protecting national security, preventing and investigating crime, encouraging innovation and the spread of knowledge, and preventing the dissipation of social welfare benefits. These are matters of policy to be considered by the Union government while designing a carefully structured regime for the protection of the data. Since the Union government has informed the Court that it has constituted a Committee chaired by Hon’ble Shri Justice B N Srikrishna, former Judge of this Court, for that purpose, the matter shall be dealt with appropriately by the Union government having due regard to what has been set out in this judgment.

Conclusion

The above-mentioned judgment is the best thing to happen for Indian law as it paves the way and lays the benchmark for all future laws and executives actions which interfere / intrudes into the privacy of citizens which includes protection of their data as well.

In this article, Arnav Srivastav elaborates on Top ten places in Delhi to intern for content writing.

Writing isn’t as easy as it seems. Just ask me, and I’ll cry a thousand rivers! But those tears reflect a heavy metric of hard-work and due diligence, which also give you divine satisfaction. In simple and plain words, writing is a form of expression, a tool to relay to the reader your feelings and opinions on a subject. It isn’t just anyone’s cup of tea. At times it can be really hard and tedious to conjure up words and form cohesive sentences. Writing, at best is an art, and like everything else, to learn something, you need someone to learn it from. Content writing, as a profession, is picking up at a brisk cadence in contemporary times. Many companies are now deferring to the learned ambit of professional content writers to get the job done. The emphasis is exclusively on getting the most high-quality, yet, appealing articles for their websites. As a culmination of the same, the demand for young, hard-working interns has also augmented. Internships are an amazing opportunity for youngsters to get hands-on experience, and also earn while they learn and have fun. Delhi is a melting pot of eclectic cultures and burning new ideas. It is the ideal place for a young and ambitious individual to learn, while also having the time of their life. Here we present to you the 10 best places in Delhi to internship for content writing.

Learning Brothers

Learning Brothers specialize in the development of custom learning solutions, content digitization, and implementation of learning ecosystems. [1]The firm uses industry, domain, and technology experience to quickly identify needs and develop a learning solution plan. It is quickly becoming a leading hotspot for aspiring writers to come together and share their enthusiasm for writing. Apart from the great learning experience, the internship also entails eye-catching stipend, ranging from Rs. 5,000 to Rs. 10,000. Their sole criteria for accepting applications are content writers who are specialized and have the capability in providing relevant content. A prefect destination for you to grow!

Qualification:  English (Hons) , BBA ,MBA ,MA , BA.

ClikLawyer

Legal drafting is perhaps the most important asset for a lawyer. Superior drafting skills ensure an inherent advantage over other competitors. One thing is for given: if you intern at ClikLawyer, you’ll come out a drafting paragon. Out of many tasks appointed, few are preparing drafts on Criminal Complaints, Copyright and Trademark registration along with SAAS and T&amp, C agreements for websites. The torrential research work that awaits you is beyond your comprehension! Even though it is a lot of work, you get to learn in tremendous amounts the skill that is required to draft legally sound and correct verses. A great learning experience for you!

Know more about ClikLawyer internship. Click here ClikLawyer

Contact:  011-395-85700

Charming Label

If there’s one thing that embellishes your personality, it is charm. The efficacious power to woo people with your words is rare, and takes a lot of hard-work to develop. This place has charm even in its name! Charming Label offers a paid internship to willing students and professionals. The experience is research-oriented, with an extensive job for the interns to learn about different commodities, which should be complimented with excellent writing skills. The pay is anywhere around Rs. 3,000 to Rs. 4,000.

Women on Top

Magazines are a fun and interactive way to converse with your reader. With glossy pages and alluring images, they become an effective tool to impart your opinion of the society. The Women on Top magazine is an emerging magazine in Delhi, all set to launch its first e-magazine launch. The not-for profit organization seeks to revolutionize content writing for its female readers. It is looking for eager individuals who have a passion for creative writing and think out of the box. In a fun-learning environment, you are bound to have the time of your life, with the firm also providing you with a Work Certificate. Don’t miss this chance!

The Viral Stuff

The Viral Stuff is the home of the most viral content on the web. Right from new and cool gadgets, to the latest happening around the world, the Viral Stuff is an all compassing milieu for an inquisitive reader. Their vast horizons require a heavy metric of writers, which is why they open up internship chances for budding writers. Founded by alumni of prestigious technical colleges of India like IITs and DCE, the firm offers a paid internship program, which can be availed by almost anyone willing to write.

Tidings Central

In the information burden age, the team of young journalists at Tidings Central aims to put the news in a broader context, provide in-depth analysis of a wide range of issues that matter to the electorate and educate the masses, from a bird’s eye view. With social media now entrenched in the minds of young and old alike, the way influx of new technology is influencing our lives, with everyone being able to voice their opinion, it has become imperative to objectively identify the tectonic shifts in the social development of our country, unlike many who indulge in be fooling and cajolery of any particular ideology.[2] Even though the internships are unpaid, the experience you have working and collaborating with people from different walks of life is priceless.

Contact: [email protected]

HT Digital Streams Limited

What if someone told you that you could earn as much as Rs. 10,000 just writing for a reputed institute like Hindustan Times? You would think they are bluffing. But I am not! HT Digital Streams Limited provides multi-media content management services. They indulge in various forms of content writing, and handsomely pay you a bucket load of money. Selected intern’s day-to-day responsibilities include selecting and submitting relevant tags/keywords against each article present on the online panel. A brilliant opportunity for you to earn money and invaluable learning experience!

Happily Unmarried

Happily Unmarried is India’s coolest youth lifestyle brand. This super-awesome site is looking for interns in the fields of content writing and design. If you use clichés and are not creative, this internship is not for you. Happily Unmarried is offering a paid internship if you are willing to work for long hours.[3] The opportunity awaits you, with its arms open. Your move now, chief.

Contact: 0172 519 1555

Wedding Affair

The wedding game is pretty strong in India. Almost everything is associated with weddings, which apparently the miser uncles and aunties don’t abstain from spending on. It is surprising to know, that there is an organization that is employing writers to make the most important day of a person’s life worth every memory that have associated with it. The internship is a paid one, with a suitable opportunity for you to earn some fine buck and embellish your CV with an internship at one of India’s emerging wedding magazines!

Contact: (011)41650833/34/35

Orange Octopus

Orange Octopus – an after School Activity Centre for Children is a bridge between your child’s home and school, comprising of out of the box fun and “learning through play” activities to boost every facet of a child’s overall development. Orange Octopus holds the vision to pioneer the concept of bringing the best to children in a unique way and to help each child master various skills in a fun filled way. They are offering exciting internship opportunities to young and ambitious interns to get valuable experience and knowledge of content writing. They expect the following from their interns:

• Update and write content for the Social Media platforms.
• Form mailers and customized messages for the clients.
• The candidate would be involved in developing promotional activities and organising events/ summer camp for the Centre.

The internship is a paid one. So pull up your socks and get ready to have an experience of a life time!

Contact: 8527770736

iPleaders

iPleders is an initiative which is drastically moving toward its goal of providing good quality legal education. iPleaders teaches you essential practical tools which are not taught in a law school. iPleaders blog is one of the most read legal blogs in India. One way or the other you must have come across the term, “Access to Justice,” iPleaders blogs is converting this term into practicality. Started in 2011, the online blog has catapulted to national fame, becoming one of the most read legal blogs in the country. Its professional and adroit team of skilled individuals has worked day and night to make iPleaders a household name in the legal arena. They offer paid internships for willing content writers, upto Rs. 5000. Do not miss this glorious opportunity to live your dreams!

Contact: 011 3313 8901

Know more about iPleaders internship. Click here –> iPleaders

References

[1] At, http://www.makeintern.com/internships-content-writing-in-delhi-at-learning%20brothers-3744

[2] At, http://www.makeintern.com/internships-content-writing-in-delhi-at-tidingscentral-3952

[3] At, http://www.dfordelhi.in/top-10-internship-opportunities-delhi-cant-afford-miss/

In this article, Parth Sarthy Kaushik discusses Financial Resolution of Banking Institution in India.

The global financial crisis of 2007-08 not only exposed the limitations of resolution frameworks in many countries (like the USA) but also forced the government to bail out a large number of failing banks. In an increasingly unified global financial system, the failure of institutions such as Federal Deposit Insurance Corporation (USA) in dealing with the problem of bankruptcy in the banking system culminated in the global economic crash. Therefore, after the economic crash of 2007-08, many countries started taking note of the loopholes in their resolution regimes and have begun strengthening their resolution capabilities in order to protect the economy in general and customers of financial service providers in specific, in times of financial distress.

In India, a sharp increase in the gross non-performing assets of banks has been a cause for alarm for quite some time now. This has once again raised questions about the risk-taking ability of Indian banks and triggered the discussion on failures of the banking system in India. If banks are unable to keep adequate capital to absorb their losses arising out of NPAs, it is likely that such banks would eventually fail to meet their obligations to depositors, and such failure on part of banking institutions can prove to be catastrophic for the economy.

The above scenario has shifted the focus on the Narsimhan Committee’s recommendations on banks’ consolidation. However, these recommendations were made with a view to improving the efficiency and productivity of public sector banks. The committee did not address the scenario where the banking institutions (public or private) eventually fail to perform their activities and meet their obligations to depositors. Thus, in the discussion for making banks stronger and larger, one major issue has been largely ignored i.e. the need for a specialized resolution regime for failing banking institutions.

Current framework for financial resolution

At present, the Banking Regulation Act, 1949 provides wide-ranging powers to the Reserve Bank of India to deal with the scenario where banks fail to meet their obligations to depositors and others. RBI carries out the financial resolution of banks with a view to protecting the interest of the depositors. The Deposit Insurance and Credit Guarantee Corporation (DICGC), which is a wholly owned subsidiary of the Reserve Bank, requires banking companies to insure deposits up to Rs. 1 lakh per depositor and in the event a banking company goes into liquidation, this amount is paid back to the depositor. However, any amount in excess of Rs. 1 lakh is not insured. Further, deposits with NBFCs are not covered by this.

The Banking Regulation Act provides two methods for the financial resolution of banking companies namely amalgamation (including reconstruction) and winding-up.

Amalgamation

This option is usually resorted to enhance the size and operational strength of smaller banks in order to make them competitive with larger banking institutions or to protect the interest of depositors by securing the proper management of those banks which are facing the risk of failure to meet their obligations. Therefore, the merger of banks is more of a preventive measure.

As per the scheme of the act, merger of banking companies can either be voluntary (under Section 44A) or, forced/reconstruction (under Section 45).

In case of a voluntary merger, shareholders of concerned banks are required to first approve the scheme of merger by a two-thirds majority which is then placed before the RBI for final approval. While, in a forced merger (or reconstruction), RBI makes an application to the Central Government for imposing a moratorium on the concerned bank. Thereafter RBI is required to prepare a scheme for reconstruction or merger of such bank with any other bank (transferee bank).

As per the merger scheme, the transferee bank takes over all the assets and liabilities of the transferor bank. Furthermore, all contracts, deeds, bonds, agreements and other legal documents entered into by the transferor bank before the merger remains in full effect against the transferee bank.

Further, with the aim to protect the interest of creditors of a banking company, the Act provides that no court shall sanction a compromise or arrangement between a bank and its creditors unless it is certified by the Reserve Bank.

Winding-Up

This option deals squarely with the situation where a banking company is unable to meet its obligations to depositors. As per Section 37, the concerned High Court can order for winding up of a banking company if:

• Such company is unable to pay its debts – As per Section 38(4) of the Act, a banking company shall be deemed to be unable to pay its debts if it has refused to meet any lawful demand made at any of its offices or branches within two working days, if such demand is made at a place where there is an office, branch or agency of the Reserve Bank, or within five working days, if such demand is made elsewhere, and if the Reserve Bank certifies in writing that the banking company is unable to pay its debts; and
• An application for its winding up has been made by the Reserve Bank of india.

The Reserve Bank can also make an application under Section 38 if it has been directed by the Central Government to do so by an order under Section 35 (4)(b) of the Act.

As per Section 38 (3), in addition to the above scenario, the RBI may make an application for winding up of a banking company, if:

1. The bank has failed to comply with the capital adequacy norms or any other requirements of the Banking Regulation Act;
2. The bank no longer has RBI’s permission to continue its banking operations in India;
3. The bank is prohibited from receiving new deposits; or
4. The continuance of banking company is prejudicial to the interests of its depositors.

After the High court has passed an order for winding up the banking company, an official liquidator (notified by the central government) is appointed for carrying out the liquidation process. The liquidator is obligated to satisfy all the debts and liabilities in the following order:

1. Every claimant entitled to preferential payment under section 327 of the Companies Act, 2013.
2. Every secured and every unsecured creditor.
3. Every depositor in the savings bank account.
4. Every other depositor.

Furthermore, in terms of Section 44, no banking company is permitted to be wound up voluntarily unless RBI has certified that the concerned company is able to pay all its debts to its creditors as they accrue.

It is pertinent to note that while the Banking Regulation Act provides RBI with extensive powers to wind-up or amalgamate a bank, these powers are very limited in scope as the Act is applicable only to scheduled commercial banks, and other categories of banks such as cooperative banks (which are wound up on the directions of the Registrar of Cooperative Societies) and certain public sector banks whose statutes prohibit such actions by RBI (like Section 45 of the SBI Act, 1955) have a different framework for financial resolution. This makes the present legal framework very disorderly and inadequate in dealing with the instance of insolvency/bankruptcy of banking companies.

Drawbacks of the present framework

It is against this backdrop that, last month, the Central Government introduced The Financial Resolution and Deposit Insurance (FRDI) Bill, 2017.

In order to cause minimal disruption in the financial system while providing an effective resolution regime, the proposed Bill seeks to address the following limitations of the present framework:

Multiple authorities – As financial firms (like universal banks) are increasingly operating under conglomerates, no single regulator is capable of taking a comprehensive view of the risks and optimal resolution strategies for such conglomerates, which prevents the development of specialized resolution capabilities of any regulator.

Different laws for similar entities – The Banking Regulation Act, 1949 deals with only scheduled commercial banks, but there are specific legislations which deal with public sector banks that have been created under special statutes.

Risk of forbearance– The dual role of the regulator (like RBI) delays the resolution process as regulators are more interested in the revival of the failing institutions. Therefore, a resolution regime independent of the sectoral regulators is necessary for the effective resolution in a time-bound manner.

Limited instruments– The resolution instruments provided to the RBI are limited (i.e. amalgamation or winding up).

Proposed framework

The Financial Resolution and Deposit Insurance Bill, 2017 seeks to remedy the above situation by providing a specialized mechanism for dealing with the issues arising out of insolvency & bankruptcy of banking companies (in addition to other financial institutions such as NBFCs, pension funds, and insurance companies etc.). The proposed Bill along with the recently enacted Insolvency and Bankruptcy Code, 2016 (which does not cover financial institutions dealing with public money) will provide an all-inclusive resolution mechanism for the Indian economy. Note that companies which do not accept deposits from the public will continue to be governed by Insolvency and Bankruptcy Code, 2016.

The FRDI Bill envisages the creation of an independent financial resolution corporation (FRC) having representatives from financial regulators and central government along with other independent experts. As per the draft bill, Deposit Insurance and Credit Guarantee Corporation (DICGC) will cease to exist and all of its activities will be carried out by the FRC.

Also, it provides for resolution instruments such as portfolio transfers, bail-in (i.e. utilizing the existing resources of the failing institution by converting its debt into equity) and run-off (i.e. continuation of liability for present policies while not allowing to take new business), in addition to the already available instruments like amalgamation and winding-up. Thus, enabling FRC to provide speed, transparency, and predictability through procedural clarity, and in a manner that protects the interest of all the stakeholders (including the consumers).

In view of the above, it is hoped that the proposed Bill, when implemented, will not only improve the financial stability of the country by ensuring the continuity of important financial services but will also promote the ease of doing business in India by decreasing the time and costs involved in the resolution of financial institutions in general and banking companies in specific.

In this article, Mansi Saxena, discusses exit Strategies for Private Equity Investors.

INTRODUCTION

For periods private equity (PE) is the motorist of growth. Evolution and Productivity are the chief goals of this industry. Private equity is capital that is not noted on a public exchange and invest in established industry which are not performing well or going through bankruptcy. There are primarily five systems of PE, Venture Capital, Growth Capital, Leveraged Buyout, Mezzanine Debt and Distressed Debt. Private equity are the firms which are composed of funds and investors that directly invest in private company or acquire the ownership of a company through institutional and retail investors. But on the other hand there is Venture Capital which is a form of private equity, which invest in a new enterprise and unknown technocrat, who possesses innovative ideas to develop new product, but lacks his own capital which is essential to turn his ideas into successful commercial venture. Venture Capitalist comes to his rescue by providing risk bearing capital, which is widely known as Venture Capital. These Institutional and retail investors provide capital for the private equity, and the capital can be utilized to endowment new technology, expand working capitals or to coagulate a balance sheet.

Venture Capital may be broadly defined as long-term investment in business which has potential for significant growth and financial returns. This is usually provided in the form of equity apart for conditional loans and conventional loan. Venture Capitalist is thus not financier only, but bears the risk as well.[1] Private equity organizations are the firms which increase assets from foundations which comprises, insurance companies, pension funds & others. These also include wealthy individual. The money is then invested in buying and selling businesses.

VENTURE CAPITAL/PRIVATE EQUITY FUND IN INDIA

Venture Intellect, 2015 so far has stood the best year for ‘exits’ by the Private Equity and Venture Capital investors. The Private Equity organizations departure their funds in a company through routes like an initial public offering, selling to another private equity firm, a trade sale or a company buy-back. Sector-wise, companies in the Telecom, Media & Entertainment industries and IT & ITES, BFSI, have managed the list of successful departures till July this year[2]. Private Equity investors have also gained ironic earnings so far this year by selling their stakes in publicly listed Banking, Insurance industry (BFSI), Financial Services and companies. Private Equity and Venture Capital investors also sold shares worth USD 1.9 billion in already listed via the public markets, in the first half of 2015. With number of Private Equity-backed Initial Public Offerings picking up, the exits via Public Market Sales route is expected to exceed the previous high by year end[3].

EXIT ROUTES FOR PRIVATE EQUITY/ VENTURE CAPITAL

Private equity investors and venture capital investor, at the time of their entry are already ready with their exit plan an investors never plan a long term or forever mutual relationship with the company. An exit strategy is a prospect plan that is achieved by a venture capitalist to discharge a position in a monetary benefit or dispose of palpable commercial assets once sure prearranged criteria for either has been met or exceeded. Private equity/Venture Capital investors, at the time of entrance, must be very vibrant about their exit decisions. In fact, information of exit options is a necessary concomitant of entry. Profits collecting to private equity depositors pivots on their footings of exit and therefore the investors want to be prepared right at the outset. An exit policy may be made for the purpose of exiting a non-performing investment or ending a business that is not upbringing profits. In this case, the purpose of the exit strategy is to limit losses. An exit stratagem may also be executed when an asset or business venture has encountered its profit objective

A latest growth that has made private equity investors cheer, is the Bombay High Court decision in Holdings Ltd. v. Shyam Madanmohan Ruia[4]. Different decisions of various courts in the past, the High Court in this decision has upheld the enforceability of all private arrangements including a ROFR and ROFO and the principle of the sanctity of consensually executed shareholder agreements[5].

MODES OF EXITS

Initial Public Offering this is the usually preferred route. Private equity investors will have a right to bid their shares for sale under an IPO and then exit

Initial Public Offering

Once the bonds of the investee company are listed on the stock exchanges and are cited at a premium, the venture capitalist offers his holdings for public auction through public matter. The profits of an Initial Public Offering are ostensible is advanced valuation can be attained so long as the markets are buoyant, administration will cooperate since they can remain in operative control and the investor can select to advantage from a longer term shareholding in the company. The main difficulty is that valuation is dependent on prevailing market conditions. An Initial Public Offering involves substantial transaction costs; the transaction entails, watchful planning and the practice takes long to implement, during which period, a drastic change in market changes may warrant abandonment of the project.

Sale of Enterprise to another Company

Venture capitalist and Private Equity can recover his investments in the investee company by selling the holdings to outsider who is interested in buying the entire enterprise from the entrepreneur.

Sale of Enterprise to another Company

Venture capitalist and Private Equity can recuperate his investments in the investee company by hawking the holdings to outcast who is attracted in purchasing the entire enterprise from the entrepreneur.

Buy back of Shares by the Promoters

In terms of the agreement entered into with the investee company, promoters of the company are given the first opportunity to buy back the shares held by the venture capitalist and PE, at the prevailing market price. In case they refuse to do so, other alternatives are resorted to by the venture capitalist.

In decision of the Bombay High Court in Niskalp Investments and Trading Co.Ltd. v. Hinduja TMT Ltd.[6] , a buy-back or put option of shares of a public company, whether listed or unlisted, can be construed to be a transaction in securities, not being on a spot delivery basis (as required under the Securities Contract Regulation Act, 1956 or SCRA) and hence void and unenforceable[7].

Liquidation of the Investee Company

If the investee corporation does not become profitable and grieves losses, the venture capitalist and Private Equity options to recover his investment by negotiation or settlement with the businessperson. Failing which the salvage is done by means of winding up of the enterprise through the court.

Self-liquidating Process

In case of debt financing by the venture capitalist and Private Equity, the process is self-liquidating in nature, as the major amount, along with interest is realized in payments over a specified period of time.

Sale to New Venture Capitalist

A venture capitalist and Private Equity can vend his equity properties in the enterprise to a new venture capital company, who might be attracted in buying the possession portion of the venture capital. Such sale may be suffering sale by the venture capitalist to realize the moneys and exit from the enterprise.

CONCLUSION

The exit strategy is the most important while planning to invest in any of the organization, organizing and recording the exit terms achieves a focus-driven operation of the investee company and if all goes well, one will see private equity investors arrive, alter and departure happy. One can surmise that considering the pros and cons of the numerous exit routes, while bearing in mind the nature and reasons of the private equity investor is critical to achieve the expected return on exit. The great is the exit than the better is the return on investment for a venture capital and private equity investors.

References

[1] Unit 18 Venture Capital, Fund Based Services, IGNOU

[2] http://www.slideserve.com/davis/private-equity-the-latest-in-indian-financial-resource

[3] THE HINDU Article “Exits earn Private Equity and Venture Capital investors record $6 bn in India”

[4] Appeal No. 855 of 2003 decided on 1-9-2010 (Bom)

[5]http://www.supremecourtcases.com

[6] (2008) 143 Comp Cas 204 (Bom)

[7] http://www.supremecourtcases.com

In this article, Samyukta Ramaswamy pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, discusses the compliance required for starting a Transport and Logistics Company.

Introduction

In present day, the occurrence of many rapid changes in the realm of the business sector has made the market increasingly complex and unstable, which has had a concomitant effect on companies and other organizations resorting to making changes in their organizational structure as well as their business processes in order to combat stiff competition and stay in the race. The primary focus while changing the organizational strategy is on the extensive use of party logistics, which when coupled with the usage of modern tools of information technology as well as the integration of supply chain, facilitates the outsourcing of logistics operations, consequently enhancing customer satisfaction and simultaneously enabling companies and other organizational bodies to concentrate on their core competencies and other crucial areas of organization not coming within the ambit of outsourcing. Logistics management plays a crucial element in determining the profitability and the overall success of a company. In most of the developed economies, logistics management is a booming industry that accounts for the ever-increasing proportion of the Gross National Product. Furthermore, it is often employed as a weapon by big market-oriented companies in their struggle to stay in the competition at both the domestic and international level.

This article is an attempt to first understand fully the concept of a logistics company and its working mechanism, paying particular attention to third-party logistics, to which genus transportation companies form a part of.

What are logistics companies

According to Council of Logistics Management, “Logistics is that part of the supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information from the point-of-origin to the point-of-consumption in order to meet customer requirements.”[1] Companies that are engaged in these logistics contracts usually engage in activities such as warehousing, transporting and distribution of goods, designing and planning supply chains, designing facilities, and certain aspects of customer service.

The outsourcing of logistics is a recent trend observed in the management sector in the last twenty five years, and outsourcing of logistics contracts is currently very cutting-edge. The term ‘outsourcing’ is to a large extent used in the context of activities that are coordinated previously within a single firm that is now being allocated to subsequent different firms where there is a coordination of activities spanning the boundaries of those firms.[2] It lays emphasis on the inter-organizational coordination of activities of several firms thereby causing an integration across the boundaries of several firms, which in turn helps in building concrete business relationships. Such companies that are primarily engaged in outsourcing focus on a limited part of activity pattern in which it is involved in, thereby substantially improving their performance. In addition, this specialization further gives rise to benefits in the undertaking of the remaining in-house activities of the firm.[3] Furthermore, outsourcing, to a large extent also improves the utilization of resources in the network, and this is by far its main advantage. These contracts utilize to the maximum extent, the investments of external suppliers, specialized capabilities and innovation that would otherwise be extremely expensive or simply impossible to achieve internally.[4]

At this juncture, it is also necessary to mention that the increasing popularity of the IT sector has contributed largely to almost all of the logistics activities. These activities at present, have become automated, thereby improving the quality of service and enhancing customer satisfaction, and simultaneously proving to be extremely cost-effective and flexible. The tremendous use of Information Technology has further aided in the improvement of logistics companies.[5]

These logistics companies thus form a part of outsourcing logistics contracts by acting as external logistics service providers offering single or multiple logistics activities working on a contractual basis. From the point of the service provider, these types of outsourcing contracts provides solutions to both simple and advanced logistical problems, while from the customer’s viewpoint, the outsourced activities and the degree of outsourcing varies with a wide margin.

What are third-party logistics Companies

As was earlier mentioned, third-party logistics companies, commonly referred to as 3 PL Companies or integrated logistics[6], act as an external logistics service provider offering single or multiple logistics activities to its customers on a contractual basis. To put it simply, third-party logistics involves the use of an external company that performs the logistics activities that have traditionally been performed internally. The Council of logistics management has defined third-party logistics as “Outsourcing all or much of a company’s logistics operations to a specialized company.”[7]

However, the term ‘Third-party logistics’ has no uniform definition and is open to interpretation. While some having a broad and inclusive definition, others have a more narrow and exclusive definition. In light of the same, many academicians have put forward their own definitions with regard to third party logistics. According to Stank and Maltz, 3 PL is “a firm that produces goods and services that it does not own”.[8] Bergland defines 3 PL as a “logistics service company providing service on behalf of a shipper responsible for the management, transportation and warehousing of goods.”[9]Yet another definition was put forward by Sink and Langley stating that a 3 PL was an “external organization performing all or a part of a producer’s or consumer’s logistical functions.”[10] It can thus be concluded that the primary aim of a 3 PL company is to perform all its related functions that its producer does not want to manage.

The industry first developed in the 1970s with the advent of globalization and the increasing demand for Information Technology. The widespread application of Information Technology proved to be a vital element in third-party logistics as it integrated the logistics service provider with his clients.[11] Consequently, with the business environment becoming increasingly competitive, firms, in order to reduce costs increasingly began resorting to outsourcing their logistical functions to 3 PL’s. Thus, the first generation of 3 PLs was introduced in the 1970s and 80s which included warehousing, transportation, shipping and brokerage contracts. In order to increase customer satisfaction and further reduce costs, 3 PL consolidated their transportation and warehousing contracts and expanded to provide value-added services as well, which widely came to be known as the second generation 3 PL’s during the period 1980 and 1990. This period comprised mostly of asset and non-asset based companies having an increasing number of services to offer. The third generation 3 PL’s was introduced onwards from 2000 which was predominantly internet-based with an increase in supply-chain integration.[12] Today outsourcing logistical functions has become a widespread practise followed by almost all entities all across the globe.

Advantages and Limitations of 3 PL Companies

In recent times, 3 PL companies have expanded their services to include more complex activities and customer services than just mere warehousing and transportation. Studies have shown a large number of companies entering into 3 PL contracts which effectively handle complex supply chain management thereby obtaining a competitive edge over their competitors in terms of time and cost efficiency. Furthermore, outsourcing logistic functions to 3 PL’s helps reducing logistics costs such as inventory and transportation and allows the firm to concentrate on its core competencies. It improves the customer service level, increases efficiency, stability and flexibility, while at the same time reducing conflicts and reciprocating mutual goals.[13] Additionally, 3 PL providers also integrate the entire supply chain process through Advanced Information Technology services by having a tremendous impact on the coordination of logistics activities and sharing of information within an organization.[14] Lastly, third party logistics also increases the productivity of the firm by large margins at the same time also improving the expertise, market knowledge and the data accessibility of the firm.

On the other hand, logistics outsourcing particularly that of 3 PL, while having its benefits, has also witnessed a number of pitfalls. In some cases, it has been argued that logistics outsourcing has become a source of corporate failure and a disappointment.[15] This can be attributed primarily due to service performance, disruption to inbound flows, inadequate expertise of the provider and employee quality, and their inability to provide services to the needs of special products and effectively handle emergencies.[16] Another drawback is that in most cases, outsourcing companies have difficulty in estimating the true costs of their own operations as a result of which they have unrealistic expectations of cost reductions. What companies fail to take into account is that outsourcing of logistics activities have other consequences other than reduction of costs and increased efficiency; it affects the total pattern of activities of which the outsourced activity forms a part.[17] Lastly, it is also a perceived notion that many of the drawbacks mentioned above are a consequence of a lack of proper understanding in the relationship between the logistics service provider and the outsourced firm, that is caused to a large extent by the potential risks that buyers face that may result in losing control of their logistics operations.

Transport Companies

Transport companies are one of the companies that employ third-party logistics. These companies essentially contribute to the transportation of goods from one location to another thereby facilitating the easy accessibility of a particular company’s goods while at the same time increasing customer satisfaction in the process.

According to Council of Logistics Management, “Logistics is that part of the supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information from the point-of-origin to the point-of-consumption in order to meet customer requirements.”[18] From this definition, it can clearly be seen that logistics outsourcing and transportation go hand in hand. These kind of contracts involve all channels and modes of transport including trains, roads, shipping and freight management and also by air.

How to start a transport and logistics company?

Starting one’s own transport and logistics company, requires experience in the chosen industry one is working in, before anything else. Experience is extremely valuable as it helps one understand the business thoroughly and also helps in establishing a strong networking system with other companies who may become future clients. Secondly, always play to your strength. It is extremely important to establish oneself in an area where your knowledge and business relationships are thorough. This could include clients, geographical area etc.

The first step in starting a transport and logistics company is to get sufficient funding and investment. In order to do that, it is important to first identify the niche services that you wish to target and draft an investment plan based on it[19], and convince potential investors that you have the capability to make your company run at a profit. The second requisite for starting a transport and logistics company is to procure the equipment necessary to run the company depending on the nature of the work. For instance, purchasing loading equipment for transporting freight like ships, trucks, airplanes etc., cargo, and shipments etc. out of the capital of the company. The third is to obtain the necessary licenses for the company to begin functioning and satisfy the requisite registration and compliance requirements. In India, registration with the International Air Transport Association (IATA), Air Cargo Agent Association of India (ACAAI) is necessary for companies acting as freight forwarders.[20] Sometimes, it also becomes necessary to become members of industry forums like CII Institute of Logistics to raise logistics industry related issues. Other important registrations in India include Director General of Foreign Trade’s (DGFT) registration, acquiring registration with the Income Tax Department, the Registrar of Companies and other related Government Departments.[21]

References

[1] K. Dhayanidhi et. al., The Use of Third Party Logistics Services- A Literature Review, 1 International Journal of Operation System and Human Resource Management 27, 30 (2011).

[2] Lars-Erik Gadde & Kajsa Hulthen, Logistics Outsourcing and the Role of Logistics Service Providers from an Industrial Network Perspective, at p.4 available on http://www.impgroup.org/uploads/papers/6746.pdf last seen on 25th March, 2016.

[3] J. Quinn & F. Hilmer, Strategic Outsourcing, 4 Sloan Management Review 35, 43-45 (1994) as cited in Lars-Erik Gadde & Kajsa Hulthen, Logistics Outsourcing and the Role of Logistics Service Providers from an Industrial Network Perspective, at p.4 available on http://www.impgroup.org/uploads/papers/6746.pdf last seen on 25th March, 2016.

[4] Id. at P.5.

[5] Zaryab Sheikh & Shafaq Rana, Role of Third Party Logistics Providers with Advanced IT to Increase Customer Satisfaction in Supply Chain Integration, 2 International Journal of Academic Research in Business and Social Sciences 546, 547 (2012) available at http://www.hrmars.com/admin/pics/569.pdf last seen on 25th March, 2016.

[6] Y. Sheffi, Third party Logistics: Present and Future Prospects, 11 Journal of Business Logistics 27, 28 (1990).

[7] K.Dhayanidhi et. al., supra note 2.

[8] T.P Stank & A.B. Maltz, Some Propositions on Third Party Choice: Domestic vs. International Logistics Providers, 4 Journal of Marketing Theory and Practise 45, 46 (1996).

[9] Bergland et. al., Third-Party Logistics: Is There a Future?, 10 International Journal of Logistics Management 59, 61 (1999).

[10] H.L. Sink & C.J. Langley, A Managerial Framework for the Acquisition of Third Party Logistics Services 18 Journal of Business Logistics 163 (1997).

[11] Xu Yang, Status of Third Party Logistics- A Comprehensive Review 3 Journal of Logistics Management 17 (2014).

[12] See K. Dhayanidhi et. al., supra note 2.

[13] Xu Yang, supra note 12 at P.2.

[14] Zaryab Sheikh & Shafaq Rana, Role of Third Party Logistics Providers with Advanced IT to Increase Customer Satisfaction in Supply Chain Integration, 2 International Journal of Academic Research in Business and Social Sciences 546, 551 (2012) available at http://www.hrmars.com/admin/pics/569.pdf last seen on 25th March, 2016.

[15] Boyson et. al., Managing effective third party logistics relationships: What does it take?, 20 Journal of Business Logistics 73, 81 (1999).

[16] K. Selviardis & M. Spring, Third Party Logistics: A Literature Review and Research Agenda, 18 International Journal of Logistics Management 125, 138 (2007).

[17] Id.

[18] K. Dhayanidhi et. al., The Use of Third Party Logistics Services- A Literature Review, 1 International Journal of Operation System and Human Resource Management 27, 30 (2011).

[19] For further reference, look at http://www.fibre2fashion.com/industry-article/5745/how-to-start-a-logistics-business-in-india last seen on 6th December, 2016.

[20] Id.

[21] Id.

In this article, Reeja Elizabeth Varghese pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, discusses what Structuring advice will you give a US entrepreneur who wants to expand his business in India.

For an aspiring entrepreneur, it is very important to be sure of the legal structure he is choosing for his company. Especially for a foreign national or entrepreneur, who is treading the unknown waters of the new business territory, to make a wise and well reasoned decision while zeroing his business structure. It is important to take critical legal advice and time to think, a wrong choice will significantly affect the fate of a potentially good business model.

Most viable Business structures available to a US Entrepreneur in India

Of late the Government of India has been making several lucrative pitches to foreign entrepreneur and investors to invest here. In this direction the government has tried to make several incorporation procedures for companies and entrepreneurs more relaxed and less cumbersome.

Essentially, the four types of business entity you can choose based on several factors such as liability, taxation and record-keeping are listed below.

Sole Proprietorship

It is one of the most basic and simplest forms of business structures available in India. The incorporation procedure is simple and gives maximum managerial control over the whole entity to a single individual who owns and runs the business. It is well suited for entrepreneurs who prefer to operate and work alone. Another aspect of this kind of business is the appealing taxing regime applicable to such entities because the income and expenses from the business are included on your personal income tax returns. This feature is especially attractive because any losses suffered as part of your business transactions can be offset the income earned under other heads.

However, there are few disadvantages while forming such an entity. As a sole proprietor of your business you will be personally liable for the company’s liabilities. In the event, there is a legal claim or commercial debt against your company, your personal assets shall be at risk to satisfy such claims. Another difficulty faced by sole entrepreneurs is raising capital to start the business. Banks are usually reluctant to provide financial assistance to sole proprietors.

Partnership

A partnership would usually involve at least two or more people who mutually agree to invest and share the profits and losses of the business. So if the business will be owned and run by several individual, then you can consider structuring your business in this manner.

­

There are two kinds of partnership structures; General partnership and limited partnership. A General partnership would mean that the partners manage and operate the company and assume responsibility for its debts and liabilities. In limited partnership would have both general and limited partners. A General partner would have control and liability towards the company unlike a limited partner who would act only like an investor and have no managerial control over the company and would not have the same liabilities as a general partner. It is always convenient to have a partnership entity with active partners since it is more easy to form. A limited partnership could be a good option if you plan to have several investors otherwise for a new enterprise this could mean lot of paperwork and fillings.

A major advantage of structuring a partnership business is the taxing regime. A partnership entity doesn’t pay any tax but passes it on to the partners through profits or losses. Each partner will disclose and indicate his/her share of partnership income, deduction and profits while filing their individual income tax returns. Even though partnership pays no tax, it is required to submit its income and report it on a separate informational return.

Another feature of a partnership business is that each partner can act on behalf of all other partners such as taking loans and making business decisions that will affect and be binding on all the partners provided the agreement permits. Therefore, it is always advisable to enter into a very thorough and well drafted partnership agreement considering the personal liabilities of the general partners. Incorporating a partnership could be more expensive than sole proprietorship due to the requirement of extensive accounting and legal services.

Corporation

It is by far the most complex and expensive structuring model for incorporating a business in India. Incorporating a Company would mean that it is an independent legal entity recognized under law. There should be a minimum of two shareholders and one director to form a company. Unlike the previous business structure, this one draws a line between the liability of the shareholder and its directors. One of the biggest benefits is the protection from liability onto its shareholders and director. If you incorporate a company, you are not putting your own assets at risk.

It is more easy to raise capital for a company due to its stable structure. It can raise its own money through initial public offering and sale of shares. Also, investors find business structures such as corporations more stable and reliable. A business structure like this is more suited for a more farsighted business model and venture.

However, the major drawback while incorporating a company is the high cost in forming one under the laws due to too many formalities and paperwork. A company has to follow more rigorous procedure and regulations. Each company is duty bound under law to keep a proper accounting system to be more accountable to the shareholders and  public in general.

Limited Liability Partnership

If one uses a private limited company structure with a partnership model then one forms a Limited liability Partnership. This is also recognized as a separate legal entity like a corporation.

For a US entrepreneur, a Corporation or a Limited liability partnership is most suitable keeping in mind the intention of a long-term investment and return. It is always recommended for a prospective US entrepreneur to do his homework and proceed and make decisions based on proper advice that will help to take the business in the proper direction.

In this article, Parth Sarthy Kaushik elaborates on how is merchant banking regulated in India.

Merchant banking comprises a wide set of banking activities which involves issues management by trading in securities, underwriting security issuances (e.g. an IPO), undertaking valuation of businesses and setting up and packaging M&A deals. In business parlance, it is distinguished from commercial banking, which largely revolves around accepting deposits and giving loans (nowadays, commercial banks also provide additional services such as bill payments, certificates of deposits etc.).

Securities and Exchange Board of India (SEBI) is the regulatory authority for merchant banking in India. Activities of merchant banks are regulated by the SEBI (Merchant Bankers) Regulations, 1992.

As per RBI’s Master Circular on Para-Banking activities, banks are allowed to undertake merchant banking activities through a separate subsidiary which would be required to comply with SEBI regulations. Banking Institutions performing merchant banking activities are also required to follow the requirements laid down in the  prudential exposure norms prescribed by RBI, as well as the statutory limits contained in Section 19(2) & (3) of the Banking Regulation Act, 1949.

Merchant banking can also be pursued by entities other than banks (however, they should not be NBFCs as defined under the RBI Act), provided they are registered with SEBI. In case a bank pursues merchant banking activities, it would need a banking license from RBI (to carry out banking activities) and a SEBI registration under the SEBI Merchant Bankers Regulations to carry out merchant banking business.

It is to be noted that, those banks and merchant banking subsidiaries which are performing any of the activities under Portfolio Management Scheme (or any similar scheme) are also required to comply with the provisions of the SEBI (Portfolio Managers) Rules and Regulations, 1993.

However, RBI exempts a merchant banking company from following requirements:

1. Provisions related to mandatory registration, maintenance of liquid assets and creation of reserve funds under the RBI Act, 1934;
2. Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998; and
3. Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998.

To be eligible for the above exemptions, a merchant banking company would need to fulfil the following criteria:

• It should be registered with SEBI under section 12 of the SEBI Act 1992;
• It should conduct the business of merchant banking in accordance with rules or regulations framed by SEBI;
• It should acquire securities only as part of its merchant banking activities;
• It should not be engaged in any other financial activities as mentioned in section 45I(c) of the RBI Act 1934; and
• It should not accept or hold public deposits.

[See, RBI Master Circular on Exemption from the provisions of RBI Act, 1934]

Provisions related to the registration of a merchant bank are laid down in Chapter-II of SEBI Regulations, which provides for mandatory registration to carry out the business of merchant banking in India. Following are some of the requirements which are taken into consideration for grant of certificate:

• Applicant should be a corporate body other than a Non-Banking Financial Company (as defined under the RBI Act);
• Applicant should not engage in any activity other than those connected to securities market;
• Applicant should have a minimum of two employees having prior experience in merchant banking;
• Applicant must not be related (directly or indirectly) to any other entity which is registered as a merchant banker;
• Applicant has not been found guilty for any economic offence; and
• Applicant should have a minimum capital of 5 crore rupees (for category-I merchant banker).

Many statutes and regulations require certain functions [such as valuation of shares under Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000] to be performed by SEBI registered Merchant Bankers, and hence for businesses operating in the financial sector, obtaining a merchant banking license can be a strategic advantage. Examples of some of the important functions that are performed by Merchant Bankers are given below:

1. Corporate Counselling – After conducting a detailed market analysis to evaluate feasibility of corporate policies, merchant bankers render commercial and strategic advice to improve overall efficiency of a company.
2. Project Counselling – Studying the nature and scale of investment in a business project and assisting clients with finance & procedural aspect for the successful implementation of the project.
3. Portfolio Management – Advising clients (such as Institutional Investors and high net worth individuals) on managing their investments in order to earn maximum profit in a time bound manner.
4. Issue Management – Sponsoring of corporate securities (e.g. IPOs) including marketing, compliance of listing requirements, procuring private subscription and offering securities to existing shareholders of the company.

Due to factors such as growth of primary market, increasing need of corporate restructuring and easing of FDI norms, merchant banking has never been more relevant in India. Therefore, it is very much required that the restrictive norms governing merchant banking, especially those related to capital adequacy and registration, should be relaxed in order to allow small players to enter and further expand the exclusive club of merchant bankers in India.

In this article, Anubha Singh from iPleaders elaborates on Top 10 three years law colleges in India.

While everyone is obsessed about 5 years law courses, 3 years law courses get a bit of step motherly treatment. The National Law Universities do not have 3 years courses. However, there are some 3 years law colleges that are truly reputable and has contributed way more than even any National Law University. Also, when people from different backgrounds come to do law as a career after they already got a graduate education and sometimes a few years of work experience, by virtue of their academic and professional maturity they often go on to make better lawyers.

Finding the best law college that will suit all your academic requirements is a Herculean task. While you grapple with the information loaded over internet to zero down on the best possible law college, we help you unburden the tedious task by listing out 10 best law colleges (for 3 year law.courses) of India.

Here is a quick glance at our list

1. Faculty of Law, DU
2. Symbiosis Law College, Pune
3. Jindal Global Law School, Sonipat
4. Government Law College, Mumbai
5. ILS Law College, Pune
6. BHU Law College, Benaras
7. University College of Law, Osmania University, Hyderabad
8. Rajiv Gandhi School of Intellectual Property Law, Indian Institute of Technology, Kharagpur
9. Maharishi Dayanand Law College, Jaipur
10. Chandigarh University, Chandigarh

Faculty of Law, Delhi University

Introduction – Faculty of Law was established in 1924 and since then a great number of renowned judges, lawyers and political leaders and policy makers have passed out from this well known institute. The college currently boasts of more than 130 teachers and 7000 students for its law programs. UGC and HRD funds the institute and all its facilities. The three year LLB program is the most sought after course so much so that a second law centre had to be established in 1971 after the first one which was built in 1970.

Facilities – The course curriculum is entirely based upon case studies based on real time incidents, which are also revised by the faculty members every semester. The library offers print facilities including e-resources.

Faculty – The diverse and knowledgeable faculty is the pride of this institute. A number of professors from across the world come over here for their fellowship programs and the institute has signed MOUs with many international law firms and institutes. The faculty’s prime endeavour is to improvise the course material and keeping this in mind they have introduced branches such as IPRs, information technology, wealth management, insurance. The institute has also brought in new fields of law like intellectual property, environmental law, human rights education, gender sensitivity, uplifting women and poverty alleviation for the whole country.

Admission Criteria – Any applicant who has graduated in any discipline of knowledge from a University established by an Act of Parliament or by a State legislature or an equivalent national institution recognized as a deemed to be University or foreign University recognized as equivalent to the status of an Indian University by an authority competent to declare equivalence, may apply for a three years’ degree program (LLB) in law leading to conferment of LL.B. degree.

For general category the minimum marks for qualifying is 50%, for OBC it is 45% and for SC/ST it is 40%. There is also a further relaxation of the cut off percentage for general category in special cases of PH (physically handicapped) and ex-servicemen personnel.

Fee Structure – The fee structure for the three year LLB course is Rs 5373 for the first year and Rs 4673 for the second and third year.

Campus Recruitment Data – “Most of our students are absorbed by major law firms across the globe. Many of the eminent lawyers who practice independently are alumni of DU. Our students mostly join the likes of Director General of Doordarshan, Joint CBI director and Human Rights Director as law experts,” says Professor Rakesh Kumar who teaches media law at Law Centre 2.

Alumni – Many noted people across the legal spectrum of our country are from this institute. A few of them are Rohinton Nariman ( Judge, Supreme Court Of India), Arun Jaitley (Finance Minister of India), Kapil Sibal, Kiran Bedi, Meira Kumar (former speaker of lok sabha), Madan B. Lokur, Y.K. Sabharwal.

Contact Details – For more information you can write to them at [email protected] or call at 011-27667483.

Symbiosis Law School, Pune

Introduction – Established in 1971, Symbiosis Law School is a renowned law school started under the patronage of Dr SB Majumdar. It is registered under the Societies Registration Act, 1860 and the Bombay Public Trust Act, 1950. It was formally established in June 1977. The institute  was earlier affiliated to the University of Pune and later became a constituent of Symbiosis International University in 2002, with an enhanced degree of autonomy in teaching, learning and research. Symbiosis Law School has also been conferred with the Gold Star award by the Bar Council of India in 2013.

Facilities – Symbiosis Law School boasts of state of the art facilities which it offers it students across courses. The institute promotes extra-curricular activities to a large extent and has a gym with an aim to increase health awareness. The resource centre and the library are well equipped with all kinds of legal material. The moot court halls prepare the students well for all kinds of real time situation they might face on field.

Faculty – The institute has the best faculty that helps the students understand the basics of law and legal nuances of real time incidents. Famous Advocate Ram Jethmalani has been associated with the institute since 2003 and delivers lectures. Some of the other faculty members have visited Leibniz University of Hannover, Germany, under Erasmus Mundus and DAAD (German Academic Exchange Service) exchange programs.

Admission Criteria – The Three year LLB program in Symbiosis Law College has a total of 60 seats. The candidate should minimum have 45% marks in graduation from a recognized university. 15% and 7.5% seats are reserved for SC and ST respectively. There is an all India test conducted by Symbiosis for the LLB program that consists of two parts. The first part is written test and the second is personal interview.

Fee Structure

For Indian students:

Academic Fees (Per Annum) – Rs. 1,78,000/ and  Institutional Deposit (Refundable) Rs. 10,000/.

For international students:

Academic Fees (Per Annum) 2,67,000 (USD equivalent to INR) Administrative Fee (Non Refundable); 40,000 (USD equivalent to INR); Institute Deposit (Refundable) 10,000 (USD equivalent to INR).

Contact Details– The address details are: Symbiosis Law School,

Survey No. 227, Plot No. 11, Rohan Mithila Opposite Pune Airport, New VIP road, Viman Nagar, Pune- 411014

You can also call at- 020-66861100/18

Jindal Global Law School, Sonipat

Introduction – Founded in 2009, Jindal Global Law School is situated in Sonipat, Haryana. The institute aims at empowering its students with knowledge, skills and visions that are an intrinsic part of the legal world today.

Facilities – The institute is known widely for its global curriculum and pedagogy. The law library is stocked with extensive electronic database. The international student and faculty exchange programs that are held time to time helps in an overall growth of the student. The college campus is beautifully built along the green lands that are a nature’s beauty. And there is also a globally networked career development  and placement division that goes a long way in carving the path of success for a student.

Faculty – Many international fellowship professors are a part of the faculty at this institute. All professors mainly aim at developing a curriculum that is challenging and focuses on real time incidents so that the student gain direct exposure of the legal aspects. Professor C. Raj Kumar, the acting dean is also one of the faculty of this institute.

Admission Criteria – All information about the admission is available over the website. There are online forms that an applicant needs to register and fill out in order to fulfil the admission criteria.

Fee Structure- “The fee structure for the three year LLB course program is Rs 6,00,000 per year which amounts to a total of Rs 18,00,000,” informs Mr Anand Prakash Mishra, Head of Admissions at the varsity.”

Campus Recruitment Data – According to Mr Mishra again, “ around 25% of the students are secured by law firms. Some of the major law firms that visit the campus for absorbing students are CAM, SAM, Luthra, Trilegal and Khaitan. Amongst the international ones there are White and Keiss Litigation. Other famous firms that are a regular at the varsity are Jindal Steels and Cognizant.”

Contact Details– You can mail your queries at [email protected] or call at 0130- 4091800/801/802 and +911304091888.

For specific admission queries please contact: Mr. Anand Prakash Mishra (Head of admissions)

Telephone- 0130-4091806

Mobile- +918930110857

Government Law College, Mumbai

Introduction – Established in 1855, Government Law College is the oldest law college of Asia. It is one of the most sought after law colleges owing to its rich legacy. In 1988, an annexe building was made to house additional classrooms and library owing to heavy student ratio. This institute is known for its heritage and pedigree across the world, many renowned supreme court and high court judges have passed out from this college. The college that is now 160 years old continues to hold the top notch position in the rank of best law colleges so far and stand undefeated.

Facilities – The library of this college is known for its collection of books and treatise about law in real and old times. Some of the books available in this library are as old as 200 years. The Library also possesses the original copy of the Indian Penal Code as drafted by Lord Macaulay in the year 1886, Constituent assembly debates and the Lok Sabha and Rajya Sabha debates. Collectively, the library houses over 42,000 books. To easily access the books in the library, they are catalogued in the computer. Some of the Journals and Reports to which the library subscribes include All England Law Reporter, Chancery & Probate Division Law Reports, Lawyers Collective, U.N. Weekly News Letter, Journal of Criminal Law and several Law Reviews such as the Harvard Law Review and the Yale Law Review. Next is the Electronic Research Room (ERR) that helps students in preparing moot court presentations and research papers. The students can easily access legal databases that help them understand legislation and other practices. The college has 17 classrooms, a Mooting Room, an Auditorium, an audio-visual room and a canteen for the benefit of students. The hostel accommodation and the sports facilities have all kinds of convenient services for its students.

Faculty – The students of Government Law College has seen the likes of Dr. B. R. Ambedkar, Lokmanya Tilak, Justice M. C. Chagla, Sir Motilal Setalvad (first Attorney General of India), Sir Dinshaw Mulla, Justice Y. V. Chandrachud, Mr. Nani Palkhivala and several others who have conquered benches of the Supreme Court of India and the Bombay High Court and have gained knowledge under their guidance.

Admission Criteria – There is a common entrance test that an applicant has to give for taking admission in this institute. The test consists of questions based on legal aptitude and general knowledge. There is 50% Reservation for Reserved Categories from Maharashtra State as per the Government Resolution (G.R).

Fee Structure – The placement cell of the university informs that the fee structure for the LLB program at GLC is Rs 6270 for the first year, Rs 6000 for the second year and Rs 6500 for the third year.

Campus Recruitment Data – “GLC Mumbai’s 2016 batch has confirmed a total of 95 jobs for roughly 600 odd students in its three and five-year LLB courses, with 60 students placed via the placement cell, and 35 via candidates’ personal endeavours,” as told by Shreyansh Jain, incharge of the placement cell at the college.

Alumni– This institute boasts of a legacy of alumni. Some of them are Pratibha Patil, L K Advani, Bal Gangadhar Tilak, M C Setalvad, Mukul Rohtagi, Kareena Kapoor, A K Antony, A G Noorani, Anand Kurian, Justice S H Kapadia.

Contact Details– For more details you can visit the college at the following address:

Government Law College,

‘A’ Road, Churchgate,

Mumbai- 400 020
Or call at 022-22041707

ILS Law College, Pune

Introduction – Founded in 1924, ILS Law College was graded A+ by National Assessment and Accreditation Council (NAAC), Bangalore, in 2004. The campus is spread over 195 acres in the heartland of Pune. It was also awarded ‘SILF-MILAT Institutional Excellence Award 2013′ by Society of Indian Law Firms and Menon Institute of Legal Advocacy Training, Delhi. The institute also hold an award for ‘Best Private Education Institute 2012-13’ in the Law School Category by WCRC Leaders Asia. ILS was ranked first amongst the top ten law colleges in the country by the India Today, ORG-MARG poll survey in 2005, and by the ‘Week’ in 2006.

Facilities – The two major infrastructure parts of the institute are called Saraswati Building and Laxmi Building which are administrative block and the teaching complex respectively. The Gharpure Abhyasika commonly known as the library has almost 60,000 books, international and national journals and periodicals. The institute also has a sports complex for all indoor and outdoor games and gymnasium for its students. The intake capacity for the boy hostel is around 150 students and for the girl hostel it is 200 students. The hostel is well equipped with all facilities for the students to have a comfortable stay.

Faculty – The institute is spearheaded by Ms Vaijayanti Joshi, who also teaches the students many legal subjects. Both the teaching staff and the non teaching staff are masters in the subject and impart all practical lessons and theory to its students.

Admission Criteria – The applicant has to fill the online form which is available on the website after registration. Post that there will a written test which the student has to clear to finally get selected in LLB program at ILS, Pune.

Fee Structure – The fee structure for the three year LLB course is Rs 35,500 for the first year, Rs 32,000 for the second and third year respectively.

Campus Recruitment Data – Companies like ONGC, Desai & Diwanji, Rustomjee & Rustomjee, Price Waterhouse, Reliance, RIM, Krishna and Saurashtri come for placements regularly for LLB course students. According a report there was 65% placements.

Alumni – The noted alumni of Indian Law College, Pune are Vilasrao Deshmukh, Ramrao Adik, Rajnitai Satav, P B Gajendragadkar, S. Nijalingappa.

Contact Details – For further details you can write to [email protected] or call at 020- 25656775. You can also visit the college campus at the following address:

The Principal, ILS Law College,
Law College Road (Chiplunkar Road),
Pune 411004, Maharashtra State, India.

BHU Law College, Benaras

Introduction – The law college at BHU was one of the branches of the varsity that came into being much earlier. Finally in 1964, the foundation of the new building specially dedicated to teaching law was laid by the then prime minister of the country, Shri Lal Bahadur Shastri. Mahamana Pandit Madan Mohan Malaviya, the founder of this university, served for many years as Dean of Law School. BHU law college is one of the pioneer institute to offer LLB degree in our country. The Banaras Law School was one of the six universities in India to start Clinical Legal Services. The model developed by Law School has been judged as the best model by Justice P. N. Bhagwati, former Chief Justice of India.

Facilities – The law college is designed in the similar structure as that of Harvard Law School. It consists of five distinct wings which are the academic wing, well furnished chambers of faculty members and faculty lounge made by offices of the faculty administration with more facilities like lecture theatre, classrooms and seminar rooms on the ground floor and library, moot court, classrooms on the first floor.

Faculty – The faculty members at BHU law college are senior experts in law and legislation. Along with adequate facilities for higher studies, the students at BHU law college are doing research work in the area like Law of Taxation, Constitutional Law, Personal law, Intellectual Property Rights, International Law and many more subjects. The Law school also publishes a first rate law journal in the country on annual basis. Many renowned Indian and foreign scholars contribute research papers for publication in journal. The moot court society in the college is established to inculcate skill of advocacy and love for legal profession in the law students. Professor Devendra Kumar Sharma, Dean of the university and HOD also one of the faculty member of the university.

Admission Criteria – For admission in the LLB course, the law college conducts an undergraduate entrance test (UET) during May every year. The applicant should also score minimum 50% aggregate in his/her graduation to be eligible for UET. The total seats are 230.

Fee structure – The fees at BHU law college for LLB course starts at Rs. 3850 for the first semester.

Contact Details – For further details you can mail at [email protected]. You can also call at the following numbers 0542-2307631/ 2369018/ 6701896.

University College of Law, Osmania University, Hyderabad

Introduction – Osmania University came into being in the year 1918. Finally in the year 1923, the law department was established. The university college of law was inaugurated in 1960 by the then Chief Justice of India B P Sinha. Professor G C V Subba Rao was the first principal of the college. The College has been consistently rated as the one of the Best Law College in the Country in the survey conducted by the India Today and other magazines. The College houses an Intellectual Property Rights Depository sponsored by the Ministry of Human Resources Development.

Facilities – The library of the law college is well equipped for its students. All the leading journals like the All India Reporter, Supreme Court Cases, Journal of Indian Law Institute and Indian Bar Review are subscribed regularly in the library. Foreign Journals like All England Reports, Cambridge Law Journal, Harvard Law Review and Modern Law Review are subscribed in the Main Library of the University. The college has a moot court hall essential for training the students. It has all the required facilities that are available in a court of law. About 50 students can witness the moot court proceedings at a time. There is also a sports complex with all indoor and outdoor games in the university for students to indulge into sports and extracurricular activities.

Faculty – The faculty at University College of law boasts of some luminaries of law. Dr G B Reddy, Dean Faculty of law and chairperson is also one of the faculty member at the institute. There other members are experts in legislation and teach law through real time situations.

Admission Criteria – At present there are 60 seats for LL.B three year course at the institute. The eligible candidate has to clear the LLB Common Entrance Examination (LAWCET) for that academic year to get admission into the course.

Fee Structure – The course fee for the LLB course is as follows: Rs 2900 for the first year and Rs 1835 for the rest of the two years.

Campus Recruitment Data – It is reported that due to Telangana agitation lots of company placements were lost and the faculty is planning to bring that reputation back and planning for good placements for students.

Alumni – The university college of law has produced many luminaries in different fields legislation and judiciary. They include Justice P.Jaganmohan Reddy, Justice B.P.Jeevan Reddy, Justice Shah Mohammed Quadri, Justice Sardar Ali Khan, Justice Y.Bhaskar Rao, Justice B.Subhashan Reddy, Justice B.Sudarshan Reddy, Justice G.Bikshapathi, Justice L.Narasimha Reddy, Justice G. Chandraiah, and Chief Minister N. Kiran Kumar Reddy. Senior Advocates including R.Vasudeva Pillai, P.P.Rao, V, S.Ashoka, and B.C.Jain, Statesmen including S.B.Chavan, Virendra Patil, Shiv Raj Patil, Shivaji Rao Patil Nilangekar, V.S.Rama Devi, Sripada Rao, Ch.Vidyasagar Rao, Dharam Singh and Sri A. Narasimha Reddy, the present Chairman, Bar Council of Andhra Pradesh also is a proud alumnus of this college.

Contact Details– For further information you can visit the college website: www.osmania.ac.in/lawcollege.

You can also call directly at the principal’s office on the following numbers: 91-040-27098928 or 91-040-27682368.

Rajiv Gandhi School of Intellectual Property Law, Indian Institute of Technology, Kharagpur

Introduction – This institute is first of its kind to offer specialization in Intellectual Property Right under the tutelage of IIT. The School offers a Six-Semester, Three-Year Full-Time residential programme leading to the Degree of Bachelor of Laws (Hons) in Intellectual Property Law approved by the Bar Council of India.

Facilities – The varsity is located 120 kms west of Kolkata. The library at the institute has over 350000 books and it subscribes to more than 1,600 printed and online journals and conference proceedings. The institute campus has six guest houses, a civic hospital, four nationalised banks, four schools, a railway reservation counter and a police station. The campus has a water pumping station, electrical sub-station, telephone exchange, a market, six restaurants, and a garbage disposal section for the daily needs of the residents.

Faculty – Curriculum of the Programme has been prepared based on the requirements of the Bar Council of India. In addition, several specialised courses in law and Intellectual Property Rights is offered. Many noted scholars and experts of legislation teach students at the university with the aim to raise self aware students.

Admission Criteria – Applicants are required to apply online for this course. Application fee is Rs. 2500 for General/OBC and Rs. 1250 for SC/ST candidates. Women candidates are exempted from the payment of application fees. The eligibility criteria is that the student should score first class bachelor’s degree. There is an entrance test conducted by the college for admission into this course. The questions are based on English, legal aptitude, logical reasoning and mathematics.

Fee Structure – The total fees for each semester is approximately Rs.75,000. The LLB course is of six semesters. So, the total cost comes around 4.5 Lakhs. The fees are revised periodically. Therefore, it is best to confirm it with the IIT KGP office before taking admission.

Campus Recruitment Data – Campus placements start from December 1 every year. The previous batches were recruited by global giants like General Electric, Eaton Corporation, Siemens India, Honeywell, Battelle India, Robert Bosch GmbH and Novo Nordisk primarily for IP positions. Among Indian firms, Indian Oil Corporation, Hero Motocorp, Bajaj Auto, TVS Motors, Infosys, Wipro, Tata Consultancy Services, Cognizant, Johnson & Johnson, Venus Remedies and Avesthagen among many more have extended their offers to the graduates of the school for legal and IP profiles. Tier-I law firms like Amarchand & Mangaldas, Anand and Anand, Lall Lahiri & Salhotra, Lakshmi Kumaran & Sridharan, IUS Juris, Remfry and Sagar, Nishith Desai Associates have the Law school alumni working with them.[25] Additionally Evalueserve, Pangea3, CPA Global, IP Horizons, Mindcrest and Lex Orbis have also recruited the Law school Alumni.

Contact Details– For further details on course and admission contact on [email protected]. You can also call on the available number for more details: +91 – 3222 – 282237.m

Maharishi Dayanand Law College, Jaipur

Introduction – The law college that was established in 2003 is spread over 15000 sq yds. Located in the pink city of India, Jaipur, this college aims at imparting best education in the studies of law. The college is affiliated to the University of Rajasthan and approved by the Bar Council of India.

Facilities – The computer lab at the institute are well equipped with all latest MS software and other latest programs. The Library of the college has collection of a large number of books, law Journals and Periodicals like AIR Manuals (Covering Central Acts), Rajasthan Law Weekly (RLW). Apart from the course books, reference books written by eminent authors are also available in the library. The moot courts are set up for the students at the institute to learn to prepare arguments on behalf of the plaintiff and defendant or are asked to sit as a judge and deliver judgement of the case presented before the Moot Court. Every case presented before the moot court is followed by a discussion. For participating in the moot court, the students must be dressed up as prescribed by the College for the purpose. Moot courts help the students to learn to speak with confidence and to inculcate the habit of self study and of reading the law journals and periodicals.

Faculty – Dr Sanjula Tripathi, principal is one of the faculty at the institute. Other faculty members are proficient professionals that teach students both theory of law and practical real time incidents of legal procedures and legislation.

Admission Criteria – A candidate can apply for the LLB program as mentioned in the online form. He/she might be also called for an interview with the principal as deem fit. Admission of a student to the College shall be subject to the conditions prescribed by the Ordinances/Rules of the University of Rajasthan and Bar Council of India. The student is required to furnish a TC and attested copies of all documents. The original has to be produced at the time of admission. Acceptance of application form does not guarantee admission. Admission will be made according to merit drawn on the basis of marks obtained at the qualifying examination, on number of seats determined by the college as per law which will be notified on the notice board separately.

Fee Structure – The total fees for the LLB course program at this university is Rs 58,500.

Alumni – Many students of the university have excelled in the fields of law and holds important positions in legislation across the country. Some of them are Sanjeev Jain (Additional District and Sessions Judge), Mahesh Aggarwal IPS (SP in Chandigrah), Surya Kant, Harvir Dahiya, Shailender Malik (Judge at Tis Hazari Court), Rakesh Dahiya (Judge at Karkardooma Court).

Contact Details – For further information you can write to [email protected] or

[email protected]. You can also visit the college website: www.mdlawcollegejaipur.org.

For more information you can also call the following numbers: 0141-2614918, +91-94140-48841.

University Institute of Legal Studies, Chandigarh

Introduction – The law institute at Chandigarh university is popular for its both traditional and modern approach for legal studies. University Institute of Legal Studies (UILS) is approved by Bar Council of India and it works in the pursuit of delivering excellence.

Facilities – The unique academic model of the legal studies helps students in preparing and choosing project works to suit their individual professional goals. Brain storming sessions are organized with renowned global, academic personalities are arranged to give students a distinctive edge. There is also an online academic information system (CUIMS) such as attendance, daily performance and uploading of lectures in advance. Finally there is innovative and experimental learning through practical teaching, hands on experience and project work.

Admission Criteria – In order to apply for the LLB program the candidate should at least score 50% marks in 10+2 or its equivalent examination in any stream conducted by a recognized Board / University / Council in the aggregate.

Fee Structure – The fees for the three year LLB program is 39500/- per semester.

Contact Details – For further information you can call the general helpline number at

+91-160-3051003. You can also call the college toll free number for all kinds of admission queries and course related questions; the toll free number is 1800 200 0025.

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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In this article, Ram Maroo pursuing a Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, elaborates on Ten must-have clauses in Articles of Association that are not prescribed by default under Companies Act.

Introduction

The Articles Of Association of a Company is a very important document that provides certain regulations that helps in the management of the company. It helps in the operation of the company which includes the name of the company, appointment of directors and handling of records for the purpose of the company. In other words, the Articles of Association is a set of rules that acts as a user manual for the company that helps the company to manage its day-to-day activities.

Following are the clauses which although are not prescribed by default under the companies act but must find its place in Articles of Association of every company.

Protection from Shareholder’s Interest

Shareholders are investors who has a holding in the company and the management is entitled to provide them with a value. This value is also known as the shareholder value. Many shareholders do not participate actively in the day-to-day activities of the Company and most of them also fail to attend meetings. Some of the shareholders have minority rights and the rights of these minority shareholders shall be protected regardless of anything.

Protection of Employees and Protection from Employees

The Company often faces problems with the employees who is not participating or completing the work assigned to them in an adequate manner and therefore such a clause is deemed to be a necessity in the Articles of Association of a Company. The Companies Act does not provide us with such a relief. A company usually has a lot of employees working under a same roof and the management of the company usually flows from the topmost level, delegating work to the employees working under them. In between the process, a lot of chaos may take place that may violate the corporate governance of the company. In order to avoid this such a clause is necessary.

Protection of outsiders entering into contracts with the company

Every such right shall be protected that gives the management the authority to enter into contract on behalf of the Company. Such rights cannot be violated in law. Alongside, even the Management does not have the power to misuse the rights given to them as a part of the Corporate Governance Structure. If a Company manufactures a product or enters into a contract with that of an outsider or a consumer wherein the goodwill of the company is at stake such type of contracts are not valid. The company shall follow a detailed guideline to maintain their standards when they manufacture or produce a good or a service because it is not only the company but also the consumers who would be relying on the product and would be consuming them too. If the safety standards are not met with proper and due care then the company fails to deal with the guidelines in a proper manner. Such inappropriate behaviour shall not be accepted by law.

Protection of the Public

A company shall always make products that are made with due care and caution. The products made by the Companies shall not be of hazardous nature both to the environment and to the public in general. If a Company is engaged into making such products then a proper care shall be taken by implementing certain safety guidelines and taking certain steps that would help the surroundings to be a safer place to live around. Every Company is ought to takecare of the people who are working for them and at the same time of the consumers who is willing to consume the product. Therefore, it is the responsibility of the Company to operate in a manner that does not harm the public and the surroundings.

To make Profits

It goes without saying that every company works for profit maximization. Making profits is the ultimate aim of all the companies in our surroundings. Many Companies use these profits for expanding their business, buying of raw materials for the company and paying wages to the workers or laborers. It has all been this way and the top managers of the Company work in a manner so that they are able to achieve maximum profits with minimum input. Profit maximization is a clause that has never been prescribed by the Companies Act but it has always been in the Articles of Association that sets out the rules for the Company as an individual. Hence, profitability matters the most for any company especially for a public company as most of the investors depend on the performance of the company, i.e. profits of the company.

To Promote Decision Making and Efficiency

Every Manager is said to make appropriate decisions for the smooth and efficient functioning of the Company at large. The main aim of a Manager tends to be an efficient administrator and a very good decision maker that would help the company to grow and create a brand name for the company at the same time. If the Company survives and creates a good will for its own then the Company is said to be stable. Stability is again an important aspect that is looked upon by every manager. In case a manager fails to perform his tasks in an appropriate manner and starts working for his personal gains then it leads to violation of the Corporate structure and would also call upon several proceedings which would not only make the company suffer but also would harm the reputation of the company.

Minority Shareholders rights on important decisions of the Company

The Shareholders who have a stake on the company are known as investors of the company. Many of them hold significant shares of the company and others at the same time hold minority shares. The minority shareholders must be protected at any cost. The minority shareholders shall also be given the rights that is deserved by them and shall also be involve in the active participation of the company’s day-to-day activities. If a minority shareholder feels that a particular decision is not appropriate for the company then they can step into the shoes and make the decision for and on behalf of the company.  To provide such interest to the minority shareholders this clause is necessary for the articles of association as it gives the rights to the minority shareholders to participate in the affairs of the company. When taking small or big decisions if the minority shareholders feel that these decisions are important then they can step in and make the decision. Minority shareholders should be given rights to take important decisions along with the managers of the company. The decision of the minority shareholder in consultation with the manager of the Company shall be duly respected and adhered to. They shall also be able to reap the benefits of the company and shall not be left out.

Rights to Appoint Directors and receive Information

The shareholders must have the right to appoint the directors of the Company. If a shareholder asks for any information which is important for the Company then the manager is liable to pass on such information to the shareholders for the benefit of the Company.

Prescribe Powers of the Directors

The Directors are also known as the managers of the company who looks after the working of the company. They hold a lot of power and position. At times they mis-utilize their power and starts working for personal gains. Such a clause shall be added to the Articles of Association in order to avoid such confusion and by doing so, the power of a director restricts down to general powers, which helps in the day-to-day workings and operations of the company. The powers should be prescribed, and certain powers should be provided in certain cases to one director and not to all the directors.

Issuance of ESOPs

ESOPs can only to issues to the employees when and only when it has been provided In the Article of Association of a Company. It tends to be the most significant clause in the Articles of Association of a company. The company can only issue ESOPs to the employee as per the guidelines given by The Companies Act, 2013. This clause should be mentioned in the articles of association. The structures for the issuance of the ESOPs are decided by the directors of the company by way of a meeting.

Conclusion

The clauses given above are significant clauses that hold utmost importance in the working of a Company. It also helps to build the Corporate Governance of a Company. To have a smooth and an efficient working of a company such clauses are of importance and shall be added in a manner most appropriate for the Company. To have smooth operations in the competitive market, the clauses described in this article is required for the company to avoid loopholes in their corporate governance structure. All the above clauses form significant clauses wherein a company should adopt an appropriate measure of Corporate Governance as the rules have become more stringent in cases of listed public limited companies than that of other public & private limited companies.

In this article, Vikash Shukla elaborates on the provision of Article 35A of the Indian Constitution and discusses how Article 35A is making Fundamental Right a myth in the State of Jammu & Kashmir.

“If I may say so, if things go wrong under the new Constitution, the reason will not be that we had a bad Constitution. What we will have to say is, that Man was vile.” [i]

 Dr. B.R. Ambedkar

The recent debate over the validity of Article 35A of the Constitution is nothing less than a break from the past. I was consternated to see that Article 35A is not placed in the text of the Constitution instead it forms part of the same by way of an appendix to the Constitution. Before analyzing the genus of Article 35A in the Constitution the question arises,

“Where is the power to add a provision in the Constitution?”

The only provision which acknowledges the amendment in the Constitution is Article 368. However, Article 35A was not brought by an amendment under Article 368, it was added to the Constitution by way of a Presidential Order passed under Article 370 of the Constitution. But the Question is,

“Whether the President had such Powers under Article 370 in order to add a new provision to the Constitution?”

The Constituent Assembly on 17^th October 1949 canvassed Article 370 (draft Article 306A), it was proposed by N. Gopalaswami Ayyangar in the following words:

“…. With regard to the other provisions in the Constitution, these will apply to the Jammu and Kashmir State with such exceptions and modifications as may be decided on when the President issues an order to that effect. That Order can be issued in regard to subjects mentioned in the Instrument of Accession only after consultation with the Government of the State. In regard to other matters, the concurrence of that Government has to be taken.

Now, it is not the case, nor is it the intention of the members of the Kashmir Government whom I took the opportunity of consulting before this draft was finalised – it is not their intention that the other provisions of the Constitution are not to apply. Their particular point of view is that these provisions should apply only in cases where they can apply the only subject to such modifications or exceptions as the particular conditions of the Jammu and Kashmir State may require. I wish to say no more about that particular point at the present moment. ….”

It is unambiguous from the above paragraph that the objective of the Constituent Assembly was never to grant powers, to the Legislature of Jammu & Kashmir or the President of India to devoid the residents of Jammu & Kashmir of the Fundamental Rights. In fact, the objective of Article 370 was to provide an opportunity to the State of Jammu & Kashmir to become capable of being governed by the Constitution of India, like the other states.

Article 35A was added by the President by way of the Constitution (Application to Jammu & Kashmir) Order, 1954 which provides that the State of Jammu & Kashmir will have powers, to grant special rights to the permanent residents of the State as defined by the State and the same cannot be challenged as violative of art III of the Constitution.  Thus, the Presidential order not only adds a provision in the Constitution which as per Article 370 cannot be done, but also grants protection to Article 35A of the nature as Schedule IX. A shield which cannot be penetrated as violative of any Fundamental Right enshrined in the Constitution.

The aftermath of Article 35A is such that the State of Jammu & Kashmir has formed laws which are gender discriminatory in nature. In the current sequence of events where the Supreme Court has declared the triple talaq as unconstitutional, granting the Muslim women, victory against the age old gender bias, it will undeniably be an interesting issue when the definition of permanent residents in the State of Jammu & Kashmir is hit by gender discrimination.

For e.g. if a man marries a woman who is not from Jammu & Kashmir, she automatically after such a marriage becomes a permanent resident of Jammu & Kashmir whereas if a woman marries a man who is not from Jammu & Kashmir she loses the status of permanent resident. This arbitrary law cannot be challenged as violative of Article 14 because of the protection under Article 35A as mentioned above. The special rights granted to a permanent resident are, employment under the State Government, acquisition of immovable property, settlement in the State and right to scholarship and such other forms of aid as the State Government may provide. So, if a woman from Kashmir marries a man who is not from Jammu and Kashmir or not a permanent resident of Jammu & Kashmir, she will be deprived of all the special rights under Article 35A.

In the recent petition filed by Charu Wali Khanna before the Supreme Court, she rightly argues, that she can work or own a house/property in any part of the world except in the State where her roots lie.

The word “with such exceptions and modifications” used in clause 1 of Article 370 cannot be given such wide interpretation in order to make it capable of adding a provision in the Constitution more so when this is an executive power. The scope and extent of the Judicial Review on the Executive Power has already been decided by the apex court of this country in several landmark judgments. Though, it is suggested that the Constitutional validity of the 1954 Order has already been tested by the Constitution Bench of the Supreme Court not once but twice.

Initially, in Puranlal Lakhanpal v. President of India & Ors., (1962) 1 SCR 688, the question was whether the President can change the method of electing the members of the House of People from the State of Jammu & Kashmir by way of an indirect election instead of direct election. The Court answered in the affirmative and held that the change in the method of election is only a modification.

The second challenge to the Presidential Order, 1954 was in Sampat Prakash v. State of Jammu & Kashmir and Anr., (1969) 2 SCR 365 where the issues raised were of greater constitutional importance such as the applicability of Article 370 was temporary; that the President in the guise of modification cannot add a provision in the Constitution; and once Article 368 is made applicable to the State of Jammu & Kashmir, the power of President to amend the Constitution under Article 370 does not exist. Although, these arguments were not accepted by the Constitution Bench headed by the Chief Justice Hidayatullah (as he then was). But it has been 48 years ever since and the present Petitions filed in the Hon’ble Supreme Court are from the people who claim themselves to be Kashmiri. It is perhaps the right time when the Supreme Court should intervene in order to safeguard the Fudamental Rights of the people of Jammu & Kashmir. It is also apt because in our country, it has been an age old tradition that many political problems have been solved by the Judiciary and triple talaq is a recent example which is a big step towards our old dream of Uniform Civil Code in the independent India.

The Fundamental Right’s in this Country have been bolstered by the interpretations of the Supreme Court.  The conspicuous dissenting opinion of Justice Fazl Ali that Fundamental Rights are not isolated islands has become an established law subsequently. Interpretation making freedom of press an unenumerated Fundamental Right under Article 19(1)(a) and recently the unanimous decision declaring Right to Privacy a fundamental right shows the approach and the advancement this Country has made in becoming a nation committed to human rights (inclusive of Fundamental Rights).

Nevertheless, the Supreme Court will also have to face the challenges before it. If the Court holds that Article 370 does not grant powers to the President to amend the Constitution, it would consequently make a large portion of the 1954 Order unconstitutional which is a notable change in position of law existing from the last 60 years.

The Court might have to resort to prospective overruling devised by Justice Subba Rao in Golaknath’s case. Another issue of paramount importance would be; the view taken by Justice Nariman in the triple talaq case overruling State of Andhra Pradesh v. McDowell & Co., AIR 1996 SC 1627 which held that arbitrariness alone cannot be a ground to hold a law unconstitutional. Article 35A is an excellent example of the law which is prima facie arbitrary. If the view of Justice Nariman is taken as a good law being part of the majority opinion, then Article 35A can be held unconstitutional by this itself. Though, the ambiguity lies in the question “Whether the test of arbitrariness can be applied to a Constitutional amendment or not?” depending upon the conscience of the Court to consider Article 35A a valid provision of the Constitution.