In this blogpost, Pramit Bhattacharya, Damoradram Sanjivayya National Law University writes about the issue of Child Trafficking in India. The post looks into the international instruments ratified by India, internal laws of India, which battles the problem of trafficking and the law enforcement in India against child trafficking.

Child trafficking can be defined as the process of illegally transporting, transferring, or harboring a person below the age of 18 years, for the purpose of exploitation. This problem is prevalent in most developing countries due to porous borders and weak domestic laws to counter the issue. There are various causes of child trafficking like lack of employment, poverty, low level of education, a breakdown of social structure, etc. child trafficking is a violation of the mental and physical integrity of a child. Child trafficking is very dynamic, with the traffickers employing new methods every day to lure a child away from his home and then sell him in the market. Child trafficking includes physical and sexual violence, and it violates the right of a child to grow up in a healthy environment. In India too, the number of such incidences have gone up, although the exact figures are not known.

Child Trafficking in India

India if often considered as a destination, source, and transit country for trafficking of human beings. Still it is very difficult to get the exact statistics and comprehensive of the numbers and the extent to which the issue has grown. According to a study, it has been found that almost 400 districts in India are affected by the issue of child trafficking. It is also estimated that 90% of the trafficking is done internally, and the victims are used for forced labor. The children who are a victim of trafficking are exploited in various ways like forced to work as agricultural and industrial workers, beggars and domestic servants. The girl child is more vulnerable to trafficking. Girls are mainly trafficked for the purpose of prostitution and forced marriage. The porous borders of are considered to be one of the prime reasons for an increase in the rate of trafficking. In such situation, cross-border trafficking becomes easy, and girls from Nepal and Bangladesh are often trafficked into India. ECPAT International has estimated that, every year around 1, 50, 000 children and women are trafficked into (or through) India from South Africa. It has also been estimated that around 2, 00, 000 girls have been trafficked into India from Bangladesh and Nepal in the last seven years. Even though the incidents of trafficking is very rampant, there still does not exist a law which regulates the return of the trafficked victims from India to Nepal or Bangladesh. Only a few concerned organization and NGOs have helped the victims of trafficking to return to their own country by working in collaboration with the partner organization in that country.
Crossing the border between India and Nepal, and India and Bangladesh has become an easy and routine affair for many. The bribe system at the borders is also very well structured, in which the authorities are involved, they help a lot of people to cross the terrain. Further, a multiple passport system makes it easier for the traffickers to push Bangladeshi girls into the brothels of Kolkata. These girls are then further sorted and branded and then sent to Mumbai, Delhi, and Agra.

International Instruments ratified by India

India is a signatory to the Anti-Trafficking Protocol. The protocol was signed by India on 12th of December, 2012. This is a huge step forward towards eliminating the trafficking of human beings. This protocol not only seeks to prevent trafficking and protecting the victims, but it also has provisions to punish the traffickers. India has also ratified the Suppression of Traffic of Person and Exploitation of the Prostitution of Others, 1949, the Convention on the Rights of the Child, and the Convention on the Elimination of All Forms of Discrimination against Women. India is also a party to the two protocols to the Convention on the Rights of the Child
• Convention on the involvement of a child in armed conflicts.
• On the sale of children, child pornography and child prostitution.
India has also ratified the Convention on Preventing and Combating Trafficking in Women and Children for Prostitution, which has been introduced by the South Asian Association for Regional Cooperation (SAARC) in 2002.

Anti-trafficking Law in India

The Indian Constitution has prohibited trafficking in human beings and force labor expressively, and both these activities are punishable. Article 23 (1) states that human trafficking and forced labor is punishable and if anyone who violates this Article will be punished according to the law. The Directive Principles of State policies are also important in this regard. Article 39 (2) of the Constitution states that health and strength of men and women and tender age of children is not to be exploited, and citizen should not be forced into activities which are not suitable according to their age and strength due to any economic and financial necessity. Article 39 (f) also places an obligation upon the state to direct its policies in such a manner that children get the facilities and opportunities to grow up in a healthy environment, and their childhood is protected against material and moral abandonment and exploitation.
The main legal instrument to prevent trafficking in human beings in India is the Immoral Trafficking Prevention Act, 1956. This statue is supplemented by various other statutes such as the Indian Penal Code. The IPTA is focused on the issue of trafficking especially for the purpose of prostitution. The Act states that running of brothels is restricted. Detaining a person for the sake of prostitution, living on the earnings of a prostitute, etc. is also outlawed through this Act. The Act also provides for rescue and rehabilitation of victims of trafficking. But the main focus of the Act is for girls and women but does it does not especially focus on child victims of trafficking. The statute criminalizes the act of trafficking, but the definition of trafficking has been provided nowhere in the Act. The Indian Penal Code also supplements the Act. It has various provisions which impose a penalty on the criminal who kidnaps, abducts or sell or buy minors for the purpose of prostitution, forced labor, slavery, etc. moreover, sexual activities with a child, who is under the age of sixteen, even with the child’s consent amounts to rape.
India also has the Juvenile Justice (care and Protection of Children) Act, 2015 which outlaws employing a child for the purpose of begging, cruelty towards a child, forcing a child into dangerous work or hazardous employment, etc. The Act also provides a framework for providing education, vocational training, care, protection, treatment, etc. to vulnerable children who may get exploited if not provided with legal support.

Law Enforcement in India

The government has undertaken various initiatives to combat the issue of trafficking in children. These initiatives have been undertaken on the basis of the recommendation of the National Commission for Women, Central Advisory Committee on Child Prostitution, the Supreme Court and various other non-governmental organization who have been battling the issue for years. One of the nodal Ministry of Government of India, the Ministry of Women and Child Development, which deals with various issues relating to women and children, also came up with the National Pan of Action to Combat Trafficking and Commercial Sexual Exploitation of Children and Women in the year 1998 to tackle the issue of trafficking. The Ministry of Women and Child Development has also directed the Secretaries of Department of Women and Child. Development at the state level to hold regular meetings of the state Advisory Committee constituted under the National Plan of Action to Combat Trafficking and Commercial Sexual Exploitation of Children and Women. The meetings should be regarding governing of the initiatives undertaken by the Ministry to rescue, prevent, rehabilitate and repatriation those people who are victims of human trafficking. The Ministry has also undertaken a study in collaboration with UNICEF on the rescue of child victims of trafficking. They also formulated and introduced a protocol pre-rescue, rescue and post-rescue operations of children who are entangled in the dark world of trafficking.
The Indian government also enacted a central nodal cell to combat the issue of trafficking. This nodal cell enforces the anti-trafficking law in India. A protocol was also issued in 2008 by the Ministry of Labor and Employment to prevent, rescue, repatriate and rehabilitate victims of trafficking. The very ironic fact is that in the year 2006, around 1600 child labor violations were reported and around 700 people were arrested in connection to child trafficking, but no one was convicted.

Concluding Remarks

Human trafficking is a very sensitive issue and to address the issue a comprehensive strategy is needed. The aim of the government should be towards social reintegration and rehabilitations of the victims. The need of the hour is to enact more stringent laws. At present, the sanctions against the issue of trafficking are very lenient. Human Right Activist and NGOs fight a very tough battle against the problem without much support from the government. The crisis is too big for the Human Rights Activists and NGOs to tackle alone. The government should also address the issue in a much more dynamic manner. There is also an urgent need to unify the procedures and the laws to tackle the problem. Cooperation at the regional and the national level will also help the legislature to introduce laws which are at par with international standards.

In this blog post, Harsha Asnani, student, NIRMA University, Ahmedabad writes about what are charitable trusts and how are they taxed.

Charitable purpose includes relief of the poor, education, medical relief, preservation of environment and preservation of monuments or places or objects of artistic or historic interest, and the advancement of any other object of general public utility. In cases where the purpose of the settler is to create benefits for his or her family members and indirectly extend that benefit to the general public then such trusts cannot be termed as charitable trusts. Under the Income Tax Act, 1961, the taxes that are imposed over charitable institutions and trusts depend upon the kind of income or revenues that they receive. Section 11 – 13 of the Income Tax Act, 1961 are the major provisions according to which the taxes are imposed over the income of the trust i.e. capital gains, from house, property or any other income. Following are the types of income that trusts receive and the corresponding level of taxes that are imposed over them. Following are the different kind of incomes:

1. Voluntary Contribution;
2. Income from Property held under Trust;
3. Capital Gains from Trust Property;
4. Anonymous Property.

The income which is received through way of voluntary contributions shall be either for the corpus or otherwise will be appropriated against the expenses to compute the taxable income. In case of trusts which are registered, certain benefits of tax relaxation are given to the registered trusts. In cases where the trusts are not registered, it may lose such benefits.

Tax Exemptions under Section 10 of Income Tax Act, 1961

Under Section 10, there are certain trusts which are entitled to total tax exemption. Such trusts include those which are formed for any of the activities related to sports, education, scientific research, professions, or promotion of khadi and village based industries, hospitals etc. and are notified as charitable or religious institutions.

Tax exemptions under Section 11 of Income Tax Act, 1961

According to Section 11, any income, profits or gains obtained by a trust from a property held by the trust established wholly for the purposes of religious or charitable nature shall not be included in the total income of the trust. Since such income shall not constitute to be a part of the trust’s income, therefore, it shall not be taxed. According to section 13, there are certain situations where the tax exemptions under section 11 are not applied. Such instances include where income earned from the property held under the trust of private religious nature and does not endure benefit for the public, entire income of a charitable trust which is established for a particular religion, community or caste, income of those charitable trust whose funds do not get invested in the modes specified under section 11(5).

Tax Exemption under Section 12 of the

Incomes that are Non-Taxable

The incomes that are excluded from the computation of taxable income of trust or society are as follows:

1. Income which is derived from the property that is held under the authority of trust with the purposes which are wholly charitable or religious in nature.
2. Income which is kept aside to the extent that does not exceed 25% of the total income received in lieu of the property.
3. In cases of charitable trusts, specifically those formed before 1^st of April, 1961, income which is acquired from the property which is held partially for religious or charitable purposes within India
4. In furtherance of the above case, the income which is set apart to a certain extent and which does not exceed twenty five percent of the total income.
5. In cases of income that is obtained from a trust created before 1^st April, 1952 for charitable purposes and spent outside India.
6. Income made by way of voluntary contributions towards the corpus of the trust.
7. Charitable trusts created for the benefit of any of the socially and economically backward castes such as Scheduled Castes, Scheduled Tribes or women or children.

Trusts are allowed to set apart or accumulate some of the funds from received from voluntary contributions for certain purposes. The resultant benefit obtained by the trust is that the so deducted amount is not considered as the part of previous year’s income and therefore not taxed.

Procedure for calculation of taxable income

In order to know the amount of tax that is to be imposed on the trust the first step is to know the taxable income. Income of the trust majorly includes voluntary contributions received by the trust. The part of the income which is exempted under Section 11 and 12 would not be included in the amount of taxable income. In order to get this benefit of exemption, it is necessary that the trusts registered themselves under Section 12AA. This can be done by writting an application in Form 10A within one year from the date of setting up of the trust.

Taxation of a Private Trusts

Private Trusts are those that are created for the benefit of all or any of the family members or estates or for preservation of any of the property for future purposes. The tax exemptions that are received by a trust formed for charitable or religious purpose do not necessarily get applied in the case of private trusts. Since private trusts are independent entities, their income is only available to its beneficiaries; therefore the structure of income determines the pattern in which they are taxed. The structure of taxation is of two types. In cases of specific trust, where the individual beneficiary’s share in the profit is known then the income that s in hand of the beneficiary shall be taxed. Such tax although is levied on the beneficiary but it is collected from the trustee. Whereas in cases of discretionary trust, where the income of the beneficiaries is not known, the income in the hand of trustees becomes taxable.

Taxability of certain incomes under the Income tax Act

The income obtained from the trust property is divided into three parts.

1. The income which is used for charitable purposes. The first 15 percent of such income is exempted from taxation. Other 85 percent is exempted in the following manner:
2. According to Section 11(1), the part of the income which is applied for charitable purposes in India is exempted for the following purposes:

• Purchase of capital asset
• Repayment of loan for purchase of capital asset
• Revenue Expenditure
• Donation received (this exemption only applies to those trusts which are registered under section 12AA or under section 10(23C).

2. Income which is deemed to be applied for charitable purposes in India, is exempted if it is applied for the following purposes:

• Income which is applied for charitable purposes in India
• Submission of a declaration by the assessee to the assessing officer that the so received income shall be applied for charitable purposes

3. In any other case where, the income shall be exempted only in the following cases

• Such income is applied in charitable purposes in the immediately succeeding year
• Submission of a declaration by the assessee to the assessing officer that the so received income shall be applied for charitable purposes in the immediately succeeding year

Income which is not applied for charitable purposes- According to section 11(2), such income gets exempted if it is accumulated for specific purposes in India subjected to the following conditions:

1. If the assessee notifies the assessing officer that the purpose and period (not exceeding five years) of such accumulation before the assessment is completed
2. Accumulated amount is deposited in the specified form.
3. In case of capital gains, according to section 11(1A) the capital gains received from the transfer of property shall be taxed in two ways. Firstly, the entire capital gain can be exempted in case the cost of new asset is greater than or equal to the net consideration from asset sold. Secondly, in case if the cost of new asset is less than net consideration from the asset sold, then the extent of exemption shall be equal to the cost of new asset.

• According to Section 115BBC, in case of anonymous donations, either five percent of total of such donations or Rs. 1,00,000 whichever is higher gets exempted. The remaining income is taxable at the rate of 30 percent. There are certain instances where such income from anonymous donations is not taxed such as in case if the donation is received by a trust which is set up wholly for religious purpose and a few other exeptions.

In this blogpost, Pramit Bhattacharya, Student, Damodaram Sanjivayya national Law University writes about the concept of simple mortgage. The post highlights the essential ingredients of a mortgage. The post also looks into the rights which the mortgagor and mortgagee  have been given under the law.

Section 58 of the Transfer of Property Act[1] defines mortgage. According to this section, mortgage means a transfer of interest in a specific immovable property. This transfer of property can be done to secure payment of any existing or future debt, any advance or money which has been advance which has been forwarded by the way of a loan, or for the performance of any agreement which may give rise to any pecuniary or monetary liability. The person who transfers the property is known of the mortgagor. The person to whom the property is transferred is known as the transferee. A mortgage also includes mortgage money, which can be defined as the principal sum along with the interest, the payment of which has been secured for the time being. The instrument which is used by the parties to effect the transfer is known as the mortgage deed.[2]

The following are the essentials of a mortgage-[3]

1. Transfer of Interest

In simple words, a mortgage can be defined as a transfer of interest in some specific immovable property. It is the mortgagor who has the overall interest in the property. But he does away with a part of interest in the property while transferring the property to secure the mortgage amount. When the parties agree to enter into a mortgage, the interest of the mortgagor in the property reduces to the extent which has been passed on to the mortgagee. The ownership of the mortgagor is also temporarily reduced until he repays the loan he has secured. When the property is transferred to the mortgagee, he gains the right to recover the amount of loan which he has forwarded to the opposite party.

2. Existence of a Specific Immovable Property

There should be an existence of a specific immovable property. The specific immovable property should be mentioned in the mortgage deed. The reason behind mentioning a specific property is that in case the loan cannot be repaid by the mortgagor, the Court can attach that property and the mortgagee is able to receive his money from the sale proceeds. For instance, X has four different plots of land in Delhi. It should be specifically mentioned in the deed that which plot is he mortgaging. Otherwise, the deed would be invalid.

3. Securing the payment of Loan

In the case of a mortgage, the transaction done is for repaying any loan or performing any obligation. When an agreement for a mortgage is complete, the mortgagor and the mortgagee assumes the roles of a debtor and a creditor respectively.

In the case where the debtor secures a loan from the creditor by mortgaging a specific immovable property but specifies a condition in the mortgage deed that the creditor cannot sell the specific property before the loan is repaid, then it will not be considered as a mortgage at all. This is because there is no transfer of interest in this case. There is a basic difference between sale and mortgage. In the case of a sale, the entire interest in the property is transferred i.e. “transfer of rights.” But in the case of a mortgage, only the interest in the property is transferred for a specific period. There are three very crucial features of a mortgage-

1. After the loan has been repaid by the mortgagor, he can claim his right to the property.
2. In case the mortgagor defaults in payment of the loan, the mortgagee acquires the right to sell the property and recovers the amount of the loan.
3. When the debt has been repaid completely, the mortgagee gives up the interest he had in the property. The interest in the property reverts to the mortgagor.

Rights of the Mortgagor[4]

1. Right of Redemption

The mortgagor has the right to get back the property he has transferred if-

• He has repaid the loan on the due date.
• His right to get back the property has not been quashed by any party to the contract or the Court.

When the property has been redeemed by the mortgager, he also gets the right to get back all the legal documents which are related to the property. He also gets the right to get back the possession of the immovable property.

2. Accession to Mortgaged Property

If in the case when the property was with the mortgagee, and the mortgagee has made any changes or alteration in the property, then when the mortgage money is paid back, the mortgager gets the property back along with all the alterations that have been made by the mortgagee in respect to the property.

3. Right to Transfer the Property to Third Party

If at the repayment of the loan, the mortgager instead of taking back the possession of the property, instructs the mortgagee to transfer the property to some third person, the mortgagee is bound to transfer the property to such third person.

4. Right to Inspection and production of documents

Even though the documents relating to the mortgaged property is in the possession of the mortgagee, the mortgagor is entitled to inspect and keep the records of all the documents which are with the mortgagee.

Rights of Mortgagee[5]

1. Right to Sue for Mortgage Money

The mortgagee can sue the mortgagor for mortgage money in the following cases-

• In a situation where the property mortgaged is insufficient, or partly destroyed or damaged, and the mortgagor has not provided any further security to the mortgagee.
• Where the mortgagor, through personal covenant takes up the liability to pay the loan amount to the mortgagee.
• In a case where the mortgagee has the right to security but the mortgagor is not able to pay any security.
• When, due to the mistake of the mortgagor, the mortgagee is denied his total or partial right in the mortgaged property.

2. Right of Sale

Upon the non-payment of the mortgage amount, the mortgagee is entitled to sell the land by filing a suit and obtaining a decree from the court. Section 69 of the Act[6] also states that the mortgagee can sell the mortgaged property without filing a suit and without taking the permission of the Court subject to conditions provided in the provision.

3. Right of Foreclosure

The mortgagee also has the right to bar the mortgagor from claiming the property back by moving to the Court and filing a suit. In a case of a mortgage, the right of foreclosure can be claimed by anomalous mortgage and conditional sale.

4. Right to Possession

The mortgagee is legally entitled to take the possession of the property in case the loan amount is not repaid.

5. Right to Accession

If any alteration is made to the property by the mortgagor, the mortgagor is entitled to both the property along with the alteration made as security.

Sub-mortgage

A mortgage takes the form of a sub-mortgage when the mortgagee uses the property which is in his possession to take a loan himself. The mortgaged property is considered as the property of the mortgagee till the amount of loan is not paid back. He can, therefore, get an advance by further mortgaging the already mortgaged property. The mortgagee gets all the legal rights which a mortgagee gets in the case of a mortgage. He also has the right to get his loan repaid and can sue for payment. He can also take the mortgaged property as security.

Simple Mortgage

In the case where the property is not delivered to the mortgagee, but still the mortgagor makes himself liable to pay the loan amount, it is known as a simple mortgage.[7]The mortgagor states in an express or implied manner that in case the loan is not repaid, the property can be used to recover the amount of the loan. In the case of a simple mortgage, the mortgagee cannot liquidate the property without seeking permission from the Court. In case of default the mortgagee can-

1. Apply to the Court for the sale of the property.
2. File a suit for recovery of the money without attaching the property of the mortgagor.

Features of Simple Mortgage-

• No Transfer of Property

In the case of a simple mortgage, the property is not delivered to the mortgagee. The mortgagee can recover his money by obtaining a money decree from the Court.

• Personal Liability

In the case of a simple mortgage, two types of liabilities can arise- liability with regards to mortgaged property. The mortgagee has the option to either attach the mortgaged property to recover the money, or he can also sue the mortgagor personally for repayment. The presence of a personal covenant is essential in case of a simple mortgage.

• Adverse Possession

If a trespasser disposes the mortgagor and takes possession of the property, that property can also be mortgaged. Transferring such a property does not take away the legal rights of the mortgagee. Adverse possession comes into play only when the mortgagee who is entitled to take possession of the property doesn’t take the possession of the property in reasonable time.

Concluding Remarks

In the case of a simple mortgage, the presence of a personal covenant is necessary. The mortgagor takes personal liability for the repayment of the loan, and the mortgaged property acts as security for the mortgage. If the mortgagor is unable to pay the loan, then the mortgaged property may be attached. In such situation, consent of the court is required to liquidate the property.

[1] http://ecourts.gov.in/sites/default/files/TRANSFER%20OF%20PROPERTY%20ACT.pdf

[2] Section 58(b), Transfer of Property Act, 1882

[3] http://www.lawyersclubindia.com/forum/Types-of-Mortgage-8944.asp#.Uyc18c6adFx

[4] sjecnotes.weebly.com/uploads/5/2/5/1/5251788/mortgage.doc‎

[5] Ibid.

[6] Power of sale when valid

[7] Simple Mortgage is used to notify all mortgage deeds where the debtors binds himself through a personal covenant and gives his property as security to the creditor. Jangi Singh v chander (1908) ILR 30 All 390

In this blogpost, Harsha Asnani, student, NIRMA University, Ahmedabad writes about what are the laws that govern infringement of trademark and passing off in India. The author further writes about the conditions when a person can be said to infringing a trademark or committing the tort of passing off, legal actions and remedies in cases of infringement and the cases which do not come under the ambit of infringement of trademarks.

Trademark has been defined as a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include the shape of goods, their packaging, and combination of colours.[1] Once a trademark gets registered and validated, no person other than the owner of proprietary rights of the trademark has the exclusive authority to use the trademark in relation and vice versa.[2] However, the exclusive right to the use of the trademark shall be subject to certain conditions and limitations.

What is infringement of Trademark

To know more about Trademark infringement please visit

Infringement of trademarks as per Section 29 of the Trademarks Act, 1999 is defined as a use of a mark, by an unauthorised or an authorised person or a person who is not the registered proprietor, which is identical or deceptively similar to the trademark in relation to the goods or services in respect of which the trademark is registered. In simple words, it is defined as the violation of exclusive rights that are attached to a registered trademark without the permission of the registered owner or licensees. The courts have time and again assumed that similarity of two marks and the kind of goods and services results in causing confusion in the minds of general public. They may take an undue advantage of enjoying the hard-earned reputation of the registered trademark. In order to have a successful claim against a person infringement of trademark, what needs to be proved is that the infringing trademark is deceptively similar or identical to the registered trademark.

When can a person be considered as infringing a trademark

A registered trademark is said to be infringed in case of the following situation:

1. If the mark in dispute is identical with or deceptively similar to the registered trademark and is in relation to the same or similar goods or services;
2. If the identical or similar mark can cause confusion in the minds of general public to have an association with the registered trademark
3. If the registered trademark is used as a part of trade name or business concern for goods and services in respect of which the trademark is registered
4. If the trademark is advertised and as a result it takes unfair advantage or is contrary to the honest practices or is detrimental to the distinctive character and reputation of the registered trademark.
5. If the registered trademark is used in the material meant for packaging or labelling of other goods or as a business paper without due authorization of the registered user.

According to Section 103, a person is said to be applying for a trademark wrongfully in the following conditions:

1. If falsification of trademark has been committed;
2. If any trademark has been falsely applied to goods and services;
3. Makes, possesses or disposes of any instrument with the object and purpose of falsifying a trademark;
4. Falsely indicates name of the country or place where the goods have been made or the name or address of the person who is responsible for its manufacturing;
5. Alters or tampers with the indication of origin that is applied or required to be applied to a product.

The punishment for infringement of trademarks as a result of falsification shall not be less than six months but which may extend to three years and with fine which shall not be less than fifty thousand rupees but which may extend to two lakh rupees. Provided that the alleged offender has not committed such falsification based on the following grounds:

1. All reasonable precautions were taken against commission of such falsification and that at the time of commission of the alleged offence there was no genuine reason to suspect the genuineness of the trademark
2. That he had acted innocently
3. On demand of the prosecutor, such necessary documents of the manner and person from whom the goods were received.

What kind of legal action and remedies can be taken against infringement of Trademarks

Whenever a trademark is said to be infringed, both civil and criminal action can be brought about. The complaining party can either file a criminal complaint. The Trademark Act, 1999 recognises infringement of trademarks as a cognizable offence i.e. a police complaint can be lodged, and the infringers can be prosecuted directly. Even the courts are empowered with the authority to suo moto conduct raids and seizure operations. On the other hand, a civil action can also be brought about against such infringements. A suit can be initiated depending on whether the trademark is registered, pending or unregistered. Since trademark infringement is a continuing offence, there is no limit on the time period for filing a suit. The court of competent jurisdiction can give the following remedies[3] if the infringements are successfully proved:

1. Injunction/stay against the use of trade mark;
2. Appropriate Damages;
3. Handing over of accounts and profits;
4. Appointment of a local commissioner by the respective court for custody or sealing of infringing material and accounts. The court can even go up to the extent of granting injunctions and directing the custom authorities to withhold the infringing material from being shipped or being disposed so that the proprietary interest of the owner gets protected;
5. An application under Order 39 rule 1 & 2 of CPC for grant of temporary or ad interim ex-parte injunction. Interim orders are generally ex-parte or after notice.

What does not amount infringement of trademarks in India?

Section 30 of the Trademarks Act, 1999 lays down the certain conditions wherein a trademark cannot be said to have been infringed. Such conditions can be used by the alleged infringer as defences in suits for infringement of trademark and hence escape his liability. These conditions include:

1. When any person makes use of a trademark in accordance with honest practices in industrial or commercial matters;
2. When such use is not in pursuit of taking undue advantage or proves to be detrimental to the distinctive character or repute of the trademark.
3. Use of a mark for the indication- Whenever any trademark is used in order to indicate the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services or any other characteristics of goods or services.
4. Use of mark which is outside the scope of registration- When trademarks are registered, there are certain cases where they are subjected to certain conditions and limitations. Whenever the alleged infringement is under the ambit of those limitations, then it does not constitute to be a case of infringement of trademarks.
5. Implied consent – Whenever the infringed use of a trademark is in the continuance of the permitted use by the original proprietor who has subsequently not removed or obliterated it, in such cases the use cannot be said to be an infringement.
6. Use of trademark in relation to parts and accessories
7. Use of trademarks identical or similar to each other

What is Passing Off

Passing is recognised as a common law tort which is used to protect and enforce unregistered trademarks in India. Like protection of trademarks, Passing off also prevents a person from misrepresenting its goods and services from that of the other. The concept of passing off has emerged in the recent past. It has extended its ambit from goods to businesses and services. Today it is even applied to many forms of unfair trading and competition.

There are three elements of passing off popularly known as the classical trinity. These include Reputation, Misrepresentation and damage to goodwill. Common law courts have come up with a few basic characteristics of passing off which include the following:

1. Misrepresentation
2. Made by a person in the course of trade
3. To prospective or ultimate consumers of goods and services
4. To injure the business or goodwill of the other person
5. It causes actual damage to the person by whom the action is brought about.

Whenever such a case of passing off is brought before a court of law, it generally goes to the extent of deciding issues such as firstly, nature of mark, secondly, degree of resemblance, thirdly, whether the misrepresentation has resulted into causing confusion in the minds of people and ultimately causing loss to the plaintiff, fourthly, nature of goods, fifthly, similarity in the nature, character and performance of the goods of rival mark, sixthly, class of purchasers, their education and intelligence level, seventhly, mode of purchasing and surrounding circumstances.

[1] Section 2(1)(zb), Trademarks Act, 1999.

[2] 28

[3] http://www.legalservicesindia.com/article/article/trademark-infringement-and-remedies-1740-1.html

In this blogpost, Harsha Asnani, student, NIRMA University, Ahmedabad writes about the major key amendments that have been brought to the Companies Act, 2013 by an enactment of an amendment in the year of 2015.

In the year of 2013, the Indian Government had received various suggestions from the industrial stakeholders to make certain amendments in the Companies Act, 2013. In lieu of the same, the Companies (Amendment) Act had been passed in the year of 2015 after it received its assent from the both the Houses of the Parliament and assent from the President of India. Although the amendment has taken care of a lot of concerns but a few still need to be addressed by the Government.[1] In order to maintain the consistency between the amended and the rules, the Ministry of Corporate Affairs has also issued relevant amendments in the CA 2013 (namely, the Companies (Share Capital and Debenture) Second Amendment Rules, 2015, the Companies (Declaration and Payment of Dividend) Secondment Amendment Rules, 2015, the Companies (Incorporation) Second Amendment Rules, 2015, the Companies (Registration of Charges) Amendment Rules, 2015 and Companies (Registration Offices and Fees) Second Amendment Rules, 2015).

Major Highlights of the amendment

Following are the major highlights of the amendment made to the Companies Act:

1. No Minimum Paid up Capital – Earlier the business organisations which wanted to take up a company as the preferred form of business organisation had to fulfil the requirement of minimum paid-up share capital of not less than Rs. Five lakhs in case of public company and Rs. One lakh in case of private companies by way of Section 2(71) and 2(68) respectively. However, after the recent amendment, this requirement is scrapped, and a company can go ahead with its incorporation without fulfilling this criterion.
2. Commencement of business – Earlier, according to Section 11, before the company could commence its business, the director of the respective company was required to fill up a declaration with the Registrar of Companies, that every subscriber of the memorandum has paid the amount that he or she had pledged to or was required to and hence the share capital of the company is not less than the amount which has been prescribed by the statute. With the passing of the amendment, Section 11 stands to be omitted. Therefore, the director is no longer obliged to provide such a declaration. As a consequence to this, the fillings to be made by companies in India have reduced.
3. Common seal – An amendment has been made in section 12 subsequent to which the requirement of making a common seal has now become optional. Due to this changes have been made accordingly with regard to authorization for execution of documents. An earlier common seal was required in several financial instruments such as the bill of exchange, share certificates etc. With the amendment in the requirement of the common seal, several sections such as section 9, 22, 46, 223 which mandate common seal in the Companies Act have been amended.
4. Contravention of Section 73 and 76- A new section has been inserted in the Companies Act via Section 76A. It lays down punishment in case any of the following situation arises:

• Where a company has invited or accepted on its own or on behalf of any other person in a manner that is in contravention to the manner mentioned in Section 73 or 76;
• If the company fails to pay the part of deposit or interest within the time mentioned in Section 73 or 76.

The punishment that shall be levied is as follows:

• The company shall be punishable and will have to pay a fine of least one crore rupees and not more than ten crore rupees along with the payment of interest and deposit.
• Every officer who is liable for this default shall be punishable with a term which may extend to seven years along with fine which may range between twenty-five lakhs to two crore rupees.

5. Reporting by the auditor in respect of fraud – The Company law (Amendment) Act has taken the provision under section 143(12) by placing an obligation on the board of directors to now include all the details in respect of the frauds of which the auditors have reason to believe have been committed. Also, an enabling provision created via this amendment is that a fraud can be reported to the Central Government if it has crossed a threshold.
6. Obtaining copies of the board resolution – As per the newly amended law, no person shall be entitled to obtain or inspect copies of the resolution of the board that are filed with the registrar. As per the earlier law, certain resolutions such as all special resolutions, resolutions for terms of appointment of managing director, winding-up resolutions, resolutions in relation to the sale of undertaking / borrowings, etc. Could be obtained for inspection purposes. However, with the change in the legal position, this access has been limited.
7. Dividend Declaration – The new amendment has inserted a new proviso in the Companies Act according to which the company cannot declare a dividend for its shareholders unless the losses or depreciation of the previous years are not carried forward or written off against the profit of the current year.
8. Related Party Transactions – According to section 188 of the Companies Act, 2013, before a company enters into a contract or agreement with a related party , it has to fulfil certain prescribed conditions and with the consent of the Board of Directors through the passing of a resolution at the board meeting. With the amendment, the changes that have been brought to this section are that firstly, the word special has been omitted. Now the resolution could be passed with a resolution and not necessarily with a special resolution. Secondly, earlier a special resolution was required to be passed in case of related party transactions between the holding and subsidiary company.  This amendment has removed this requirement as well as a condition that the accounts of the subsidiary company are consolidated with the subsidiary company.
9. Loan to directors – Under the Companies Act, section 185, a company give loans, guarantees and securities to its directors or other persons in whom the interest of the directors lie. However, with the amendment, certain additional exceptions have been inserted to this section according to which nothing contained in Section 185 shall apply to loans or guarantees given by the holding company to the subsidiary company and guarantee given by the holding company in respect of the loan of its subsidiary company by a bank or financial institution.
10. Special Court – Earlier according to section 435 and 436, the Central Government had the power to set up courts which shall be empowered to try offences mentioned under the Companies Act, 2013. However, with the amendment coming into force, the special courts shall no longer have the jurisdiction to try all the offences mentioned the Companies Act, 2013. Now, they shall try only those offences which are punishable with imprisonment up to two years. The jurisdiction of trying all other offences shall now remain with the Metropolitan Magistrate or the Magistrate of First Class.

[1]http://www.mondaq.com/india/x/410320/Corporate+Commercial+Law/Companies+Amendment+Act+2015+Key+Highlights

In this blogpost, Harsha Asnani, student, NIRMA University, Ahmedabad writes about the essentials of a charitable trust, who can form a religious or charitable trust, who can be a trustee or beneficiary in a trust, requirements for establishing a trust, what is a trust deed and essential clauses of a trust deed.

Essentials to form a charitable trust

A charitable trust can be formed in a number of ways. Any public or religious institution can be formed as a trust or society or such company which is registered under section 25 of the Companies Act. In cases where such charitable institute is formed by one or more persons, it takes the form of a trust. Trusts can be settled by a person under a trust deed or will. Such person is referred to as the settler. When such a number increases to seven, the institution can also be referred to as a society. Such charitable institutions can also be incorporated as companies. When such companies get engaged in the business of promotion of culture or commerce etc., they get registered as non –profit companies.

Who can form a religious or charitable trust

Section 7 of the Indian Trusts Act, defines all such persons who are competent to create a trust.  Such persons include the following:

1. Any person who is competent to enter into a contract i.e. according to the law to which he is a subject a person should have attained the age of majority, the person should be of sound mind and such person shall not be barred or disqualified from entering into the contract by the law being in force at that time.
2. Any person on behalf of the minor with the permission of a civil court with an original jurisdiction;

Provided that the person who may create a trust is subject to the law being in force at that time and to the extent to which the author of the trust may dispose of the trust property. Not only a person but even other entities such as group or body of individuals, artificial persons such as companies, association of persons, karta representing a Hindu undivided family are competent to form a trust.

It must be noted that the trusts created under the Indian Trusts Act do not include those trusts which are created under any general law. For example, a Hindu Endowment created under the Hindu law or a wakf created under the Muslim Law do not come under the ambit of Indian Trusts Act. A trust covered under Indian Trusts Act need to be necessarily of charitable or religious in nature.

Who can be a trustee or beneficiary in a trust

In order to become a trustee, the first essential requirement is of being competent to hold a property. In cases where the trust holds an element of discretion, a person can act as a trustee only when he is competent to contract. For a trust, more than one person can be appointed as the trustee. Once a person is offered to become a trustee, it is not necessary that he or she necessarily accepts or is bound to accept the trusteeship. However, the trust cannot come to an end in case of no trusteeship. In absence of a trustee, the court may appoint a trustee for administration purposes.

On the other hand, in the case of a private trust, beneficiaries are predetermined or ascertained individuals. However, in the case of a public trust, the number of beneficiaries cannot be ascertained. They may be fluctuating.

What can be the subject matter of a trust

Through various Supreme Court judgements, it can now be ascertained that a trust is capable of holding any type of property. Section 8 of the Indian Trusts Act, 1882 deals with the subject matter of a trust. It states that the subject matter of a trust must be the property transferable to the beneficiary. However, it must not be merely beneficial interest under a subsisting trust.

In the case of J.K. Trust vs. CIT[1] and CIT vs. P. Krishna Warriar,[2] it was held that the term property as used in Section 8 is of widest nature so as to include a business undertaking in its ambit so that a running business can be made a subject matter of trust.

Requirements for establishing a trust

Unless the following elements or points are not fulfilled, a trust cannot be said to have come into existence:[3]

1. The existence or the author or settlor of the trust or someone at whose instance the trust can come into existence.
2. Clear intention of establishing a trust
3. Purpose of the trust
4. Trust Property
5. Persons who shall be the beneficiaries of the trust
6. Divested ownership by the author or settler in favor of the beneficiary of the trust.

Essentials that are needs to be fulfilled for creating valid Charitable or religious trust

Following are the elements which are required to be fulfilled to form a valid charitable or religious trust:

1. Object which is religious and charitable in nature
2. The authors must have the capacity to create trust
3. The settler before creating the trust must precisely indicate the objective with which the trust and property have been given
4. The purpose with which the trust has been created should not be against the provisions of law in force at that time.

Trust Deed – The Instrument of Trust

Trust Deed refers to that instrument through which the trust gets declared. In the case of Padha Soami Satsung v. CIT[4] it was held that for creating a trust no formal document is required. In order to avoid practical difficulties, a trust deed is created. Such instances include:

1. As the Indian Succession Act, the trust which is created by will, irrespective of whether it is private or public, or relates to movable or immovable property needs to have trust deed in writing.
2. In the case of private trusts when the subject matter is an immovable property, whose value exceeds Rs. 100.
3. In the case of public trusts, it is optional.
4. In cases where the trust is created by a society or a company, then the instrument of trust such as rules and regulations or the MOA needs to be in writing.

What are the benefits that registration of a trust deed gives?

Following are the benefits that a written trust deed bears:

1. It acts as the prima facie evidence of the trust’s existence,
2. It leads to clear specification of the objective with which the trust is created.
3. A trust deed is essential for registration so that tax exemption can be claimed under the Income-tax Act.
4. It helps in controlling, regulating and managing the working and operations of the trust.
5. It lays down various procedures that shall regulate the internal working of the trust along with appointment and removal of trustees, rights and duties of various stakeholders etc.
6. It lays down the procedures that need to be followed in case the trust gets dissolved.

Clauses of the trust deed

Following are the clauses that a trust deed should contain:

1. Preamble
2. Name of the trust by why it shall be known
3. Place of office
4. Author or settle of the trust
5. Name of the trustees
6. Beneficiaries
7. Description of the Property
8. Objectives for establishing the trust
9. Express declaration by the trustees
10. Procedure for administration of the trust
11. The procedure through which funds shall be borrowed, raised, disposed etc.
12. Procedure stating the dissolution of the trust
13. Bank account operations

What are the various laws under which a trust can be registered

Following are the laws under which a charitable trust can be registered

1. Societies Registration Act;
2. Section 25 of the Companies Act
3. Section 11, 12 and 12 AA of the Income Tax Act
4. Foreign Contribution (Regulation) Act, 1976

[1] (1957) 32 ITR 535 (S.C.)

[2] (1964) 53 ITR 176 (SC).

[3] http://www.karmayog.com/formation.htm

[4] (1992) 193 ITR 321 (SC)