Introduction
After Independence in the year, 1947 India was introduced to a mixed economy model. In the mixed economy model both the public and private sectors co-exist. The main intention behind the same was to ensure the effective role of Government in the economy. When in 1991 under the leadership of P.V. Narsimharao the New Economic Policy was introduced to us, it opened the doors of the Indian market to the whole world. This was the time when India was introduced to the global players in every market one can ever think of. At this time the MRTP Act, 1969 was governing the Indian private sector but due to its limited scope, there was a need for its successor. The Raghavan Committee which was made to come with a solution came up with a new Act. i.e. Competition Act, 2002. Since the inception of the Act, there have been numerous times when there was a question raised related to jurisdiction. One of the most discussed and frequently raised questions of jurisdiction as between the Patents Act, 1970 and the Competition Act, 2002.

IPR and Competition Act, 2002
The Competition Act was made with the intention of ensuring fair trade and to prevent anticompetitive practices with minimal intervention from the side of government. Therefore, the main agenda of the Competition Act, 2002 is to ensure that there are no anti-competitive practices like anticompetitive agreements, abuse of dominance or combinations which are in contravention of the Act and are carried out. The main intention behind the laws relating to Intellectual property rights is to encourage innovation by protecting the innovator and by giving incentives to the innovator. Thus, giving an exclusive monopoly rights for a limited period to the innovator so as to enjoy the fruits of his innovations which later will come in public domain. Therefore, it can be established that the rights enumerated in IPR related law will be concerned with the interest of innovator whereas the Competition Act is concerned with the interest of consumers and fair competition. Thus, creating a basic clash between these Acts.

Patents Act, 1970 vs Competition Act, 2002
Section 3(5)(b) of the Competition Act clarifies that nothing contained in section 3 of the Act which deals with “anti-competitive agreements” should encroach the rights available to a person under Patents Act, 1970. Thus enabling the person to enter into agreements that benefit him exclusively. But if we concentrate on the wordings of section 3(5), it also includes the word “reasonable” and thus empowering the CCI to find whether the condition imposed is satisfying the demand of the word “reasonable”. Thus, creating a route to interfere with the Patent Act.
It is not just that the cross-connection between the acts is limited to clear wordings of section 3(5) but the main clash rises with the wordings of section 4 of the Competition Act. Section 4 of the Competition Act deals with “Abuse of dominant position”. Therefore, if there is an abuse of dominant position by an enterprise or a group then the same will fall into the purview of the Competition Act, 2002. But the topic of abuse has also been taken care of by section 83(f) the of Patents Act, 1970 which ensures that there should not be any abuse of patent right which unreasonably restrains trade. Thus enabling the Patents Act to look into the matters related to abuse.
Now the main question arises that what will happen if there is abuse in relation to patents that are affecting the market? Where should the jurisdiction lie? Whether the matter should be governed under the Patents Act or Competition Act?

Telefonaktiebolaget Lm Ericsson (Publ) Vs. Competition Commission of India And Another
The issue related to Jurisdiction was deeply dealt with in the case of Telefonaktiebolaget Lm Ericsson (Publ) Vs. Competition Commission of India And Another.
In this case, the arguments on which the Petitioners placed their reliance on was mainly revolving around that the CCI does not have the jurisdiction on matters related to Patents because the Patent Act, 1970 being a special Act should prevail over the Competition Act, 2002 which is a general Act. It was also argued that the Patent Act already covers the aspect related to abuse of patents and thus there was no need for the intervention of CCI. In reply to which the counsel on behalf of CCI said that “the provisions present in the Competition Act are in addition and not in derogation of any law”. It was also contended on behalf of the CCI that the CCI is not concerned with the grant and exercise of rights of the patent but is more concerned to ensure the compliance of section 3 and section 4 of the Act. While arguing by the side of respondents it was said that “a non-obstante clause was a well-recognized device for giving an overriding effect to certain legislative provisions” and to substantiate this argument the decision of the Supreme Court in the case of Union of India v. G.M. Kokil was referred.
It was observed in this case that facially there might appear a contradiction among the Acts but there is no actual contradiction when reading carefully. It was held that as there is no irreconcilable repugnancy between both the Acts and in absence of any irreconcilable conflict between the two legislations, the jurisdiction of CCI cannot be ousted in regards with abuse of dominance.
Therefore, in this case, the court came to the conclusion that the jurisdiction of CCI under the Competition Act, 2002 cannot be ousted by Patents Act, 1970 and thus, in this case, the Jurisdiction of CCI prevails.
View Post

Introduction
Modi Government took the most valiant decision in the 70 years of the history of the Republic of India to remove the contentious provision of Article 370 from the Constitution of the world’s largest democracy. As per Article 370, the state of Jammu & Kashmir will have its own Constitution and Indian Constitution will have no application in the state except two provisions of Article 1 and 370. The Ministry of Law and Justice issued a notification titled The Constitution (Application To Jammu And Kashmir) Order, 2019 overriding the Order of 1954 and removed Article 370 of the Indian Constitution. 

Raja Hari Singh was the Hindu ruler of the Muslim majority princely state of Kashmir. When India got independence from Britishers, the Hindu ruler determined to remain independent and remained neutral with India and Pakistan. However, when Pakistan supported the invasion of Kashmir through the incursion of its army and local tribal people, Maharaja altered his mind and decided to take the aid of India. On 26 October 1947, he signed the instrument of accession with Dominion of India in return of military aid. The present situation of Kashmir is turmoil as the heaven of earth is under the control of both India and Pakistan.

What is Article 370?
Article 370 of the Indian Constitution gave special autonomous power to the state of Jammu and Kashmir. It is a 'temporary provision' under Part XXI of the Constitution of India, which deals with "Temporary, Transitional and Special Provisions." It states that all the provisions of the Constitution which gave power to the central government would be applicable in the valley only after the consensus of state legislative assembly. This temporary provision was made till the adoption of the state Constitution but unfortunately, the legislature itself dissolved without any amendment to Article 370. 

In 2018, Kumari Vijayalakshmi Jha vs Union of India & Anr, the Supreme Court has ruled that Article 370 has acquired permanent features in the Indian Constitution. Similarly, in the State Bank of India v Santosh Gupta, the Supreme Court gave the same ruling of a permanent feature.  India needs Jammu & Kashmir government's nod for applying laws in the state except in the case of defense, foreign affairs, finance, and communications. The laws of the state in case of fundamental rights, property and citizenship are totally different from the rest of India. The concurrence was only provisional as the ratification of the Constituent Assembly is required. This article can only be scrapped after the ratification of the State Constituent Assembly. The state has the full legitimate power to make laws in relation to welfare measures, cultural measures, personal law, and procedural law. 

Power of President and Scrapping of Article 370
As per Article 370, the President has the power to apply other provisions of the Constitution subject to certain modifications as President by order may specify due to Article 370. He can’t issue any order without the consent of the state legislature. 

The President issued The Constitution (Application to Jammu and Kashmir) Order, 2019 which superseded the Constitution (Application to Jammu and Kashmir) Order, 1954. The person recognized by the President of India on the advice of the State Legislative Assembly will be now known as Governor of Jammu and Kashmir which formally referred to as Sadar-i-Riyasat of Jammu and Kashmir. It added a clause in Article 367 which now states that Constituent Assembly is now State Legislative Assembly. The Constitution of the state is now referred to as Constitution only. The Government of the valley will include the Governor acting on the advice of the Council of Ministers. 

As per Article 370(3), the President may, by public notification, declare that this article shall cease to be operative or shall be operative only with such exceptions and modifications and from such date as he may specify: Provided that the recommendation of the Constituent Assembly of the State referred to in clause (2) shall be necessary before the President issues such a notification. Since June 2018, under Article 92 of the Constitution of Jammu and Kashmir, the valley was under Governor’s rule as BJP ended its coalition with PDP. After 6 months in December 2018, the state was under President Rule which is Article 356 of the Indian Constitution. It implies that the power of the state government means the power of the Central government. It means the Government wrote an order to itself for “concurrence” and President signed the order.

Legal Challenges to President Order 
The President has overreached his power entrusted to him under Article 370(1)(d). Article 370 is basically a temporary provision that was added to integrate Jammu and Kashmir into the Union of India. Only two Articles i.e. Article 370(1)(c) and 370(1)(d) deals with the application of the Indian Constitution into the valley. Article 370(1)(c) states that Article 1 and Article 370 shall be applicable to the state. Article 370(1)(d) states that President may by order specify that other provisions of the Constitution will be applied in the state with such “modifications”. 

As per Article 370(1)(d), President is required to take concurrence of Jammu & Kashmir Government before issuing such notification. Similarly, Article 370(3) requires the recommendation of Jammu & Kashmir Constituent Assembly if President declares whole Article 370 inoperative. Since the concurrence of Jammu & Kashmir Government is required but the Legislature is dissolved and was under President Rule, this was effectively dispensed with. The Government has cleverly interpreted Jammu & Kashmir Constituent Assembly as Jammu & Kashmir Legislative Assembly so that Jammu & Kashmir Legislative Assembly can abrogate Article 370 which was not done by Constituent Assembly. The President has overreached its power what is defined in Article 370 as per Keshavandana Bharti Case, the Constitution heads cannot use the powers to do what Constitution has never meant.

Conclusion
The matter of the special status of Jammu & Kashmir was debatable throughout the 70 years of independence of the country. Because of this special status, Kashmiri people have no feeling of nationalism as separatists continue to create violence in the valley and asserted to people that they are not part of India. This is a fallacy as per Article 3 of the Constitution of Jammu & Kashmir, the state is an integral part of India. The valley which is described as the heaven of the earth has no investment or industrial development because of terrorism which has created fear among investors. Hence, it can be said that the removal of Article 370 can bring peace and order in the state and can bring a feeling of nationalism among Kashmiri people.

References
  1. The Constitution (Application To Jammu And Kashmir) Order, 2019 (The Gazette of India, 5 August 2019) <http://egazette.nic.in/WriteReadData/2019/210049.pdf> as accessed on 11 August 2019.
  2. Mehr Gill, ‘Explained: The significance of 1846 in the modern history of Jammu and Kashmir’ (The Indian Express, 10 August 2019) <https://indianexpress.com/article/explained/explained-the-significance-of-1846-in-the-modern-history-of-jammu-and-kashmir-5895021/> as accessed on 11 August 2019.
  3.  (2017) 2SCC 538. 
  4. Article 370, The Constitution of India, 1950.
  5. Jeet H Shroff, ‘Four Reasons Why Not President Order Is Not Kosher, Yet’ (The Hindu Business Line, 6 August 2019) <https://www.thehindubusinessline.com/opinion/three-reasons-why-the-presidential-order-on-kashmir-is-not-kosher-yet/article28836245.ece> as accessed on 11 August 2019.


View Post

The Narendra Modi led government has always shown keen interest and support in promoting entrepreneurship in India. With the idea of easing businesses in India, “Startup India, Stand -up India policy was legislated and then amended the exchange control regulations in January 2017. The notification now allowed startups to issue convertible notes, which was immediately after an amendment rolled out under the Indian company law excluding convertible notes from the purview of deposits to ease compliances for start-ups. The present article only provides a general idea of the subject matter and the opinions are purely personal and expert’s advice should be sought in special circumstances where the application of the discussed laws could vary. 

Relevant Terms and Concepts
  1. Convertible Notes: An instrument issued by a start-up company evidencing receipt of money which is initially treated as debt and then it is convertible into such number of equity shares of such start-up company within a period 5 years from the date of issue, upon occurrence of specified events, as per the other terms and conditions agreed to and indicated in the instrument. 
  2. Start-up: Start-up companies include a company wherein 5 years have not elapsed from the date of its incorporation and its turnover for any of those years does not exceed Rs. 25 crores. The company is working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property. Therefore, entities that fall outside this definition would be unable to avail of the benefits of the Notification of being able to issue convertible notes. 
  3. Persons Eligible To Purchase Convertible Notes: Individuals / Entities resident outside India may purchase convertible notes issued by an Indian start-up, for an amount of Rs. 25 lakhs or more in a single tranche. However, a start-up company engaged in a sector where foreign investment requires government approval can issue convertible notes to a non-resident only with the approval of the Government. Holders of the convertible notes are allowed to transfer the same to third parties, provided, such transfer complies with the pricing guidelines issued by the RBI. Non-Resident Indians may acquire convertible notes on non-repatriation basis in accordance with the applicable regulations under the Foreign Exchange Management Act, 1999.
  4. Persons Barred From Purchasing Convertible Notes: Citizens of Pakistan or Bangladesh, or entities registered in/incorporated in these countries cannot purchase convertible notes in Indian entities. A start-up company issuing convertible notes to a person resident outside India shall receive the amount of consideration by inward remittance through banking channels maintained by the person concerned in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016, as amended from time to time. The start-up company issuing convertible notes shall be required to furnish reports as prescribed by Reserve Bank. 
  5. Reporting Convertible Notes: Start-ups issuing convertible notes are required to file Form CN within 30 days of issue. Residents buying or selling convertible notes are also required to file Form CN within 30 days of the transfer. Format of Form CN has not yet been prescribed.
Prior to this notification; start-up would raise funds by way of any compulsorily or optionally convertible capital instruments, the start-up had to go through the valuation of its shares which was unfair and difficult to its unknown profit and actual assets and liabilities along with the method of valuation adopted. Traditionally, it was an established rule that ambit of “capital” extended to equity shares, fully and mandatorily convertible preference shares and fully and mandatorily convertible debentures under the existing Foreign Direct Investment Policy. This FDI policy was further subject to certain exemptions where investments from foreign investors by way of any other instrument or optional conversion or repayment like a loan, fall under the purview of External Commercial Borrowings regulated under the Foreign Exchange Management (Borrowing and Lending in Foreign Exchange Regulations), 2000 (ECB Regulations). 

With the objective of simplifying the process of foreign investments into Indian recognised start-ups and in consonance with the 2016 notification, the Reserve Bank of India issued a notification on 10 January 2017 amending the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2016 ("RBI Regulation"). By virtue of this, recognized start-ups are now allowed to issue Convertible Notes to foreign investors without having to arrive at valuations. 

Comment 
India is a developing nation with home to the third-highest number of tech start-ups in the world. With this new policy, is the emerging hope and support in establishing these start-ups in their initial and critical phase. It is a way to help them venture out for new opportunities with domestic and foreign investors. Convertible debts was initially a limited concept and were treated as ECBs which was only available to specific companies for effective interaction with RBI approved and enrolled non -resident companies. With the coming of this new notification, issuance of convertible notes is considered as foreign direct investment resulting in better networking for funds. 

Acknowledgment of Convertible Notes as a capital investment instrument is certainly a positive move to make the procedure of speculations into Indian companies is a boon. Though, it is relevant to take note of that the favorable position is accessible just for perceived startups, which implies that non-perceived new businesses or companies which are not recognized startups are as yet not permitted to issue Convertible Notes as a capital instrument under the RBI Regulation or as a non-deposit under the Rules. Along with this, the minimum requirement of 25 Lakhs becomes quite a burdensome and discriminatory in nature and such threshold should be done away with.

Another major drawback is that, at the time of conversion of the convertible notes to equity shares, the investment would be dependent on the valuation of shares at that time. The ambiguity of converting it at a discounted rate is tough in order to keep it in the purview of relevant laws and guidelines regulating convertible notes by non -resident investors/companies. 

Lastly, the notification regarding the amendment to the principal regulation of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000  permitting issuance of ‘Convertible Note’ by start-up companies to a person resident outside India (i.e. other than individuals who are citizens of Pakistan or Bangladesh or an entity which is registered/incorporated in Pakistan or Bangladesh) continue to have a lot of grey areas. It is silent on the question of the receipt of the foreign investment in lieu of the issuance of a new instrument of convertible notes. Since convertible notes play as a debt for the next five years and thus vital to the subscribers as the option of not converting to equity shares and keeping it for future purposes, unlike the other capital instruments. 

In my opinion, another amendment would be carried out in the External Commercial Borrowing Policy to answer these questions for the desired and greater effect. 

References
View Post

Introduction
The need of the hour is to prepare suitable strategies for environmental education for saving our environment. Environment education denotes a study of the environment and its dynamics of environmental degradation and its various forms, factors degrading the environment and its impact on man’s life.

Environmental education is a process to promote the awareness and understanding of the environment, its relationship with a man and his activities. Environment education is education ‘about’ the environment, ‘from’ the environment and ‘for’ the environment.

According to the report of a conference of African Educators at Nairobi (1968) “Environmental Education is to create an awareness and understanding of the evolving social and physical environment as a whole, its natural, man-made, cultural, spiritual resources together with the rational use and conservation of these resources for development.”

Outside India
The Philippines
The Philippines has passed a landmark new law that requires all high school and college students to plant at least 10 trees if they want to graduate school or college. This Filipino law which could enable 175 million new trees to be planted each year and 525 billion trees in one generation is just the kind the world needs as it is only beginning to recognize and combat climate change.

Gary Alejano, a representative of The Philippines’ Magdalo Party, was the principal author of this legislation. He said that every year, the Philippines has over 12 million students graduating from elementary school, nearly five million students graduating from high school, and almost 500,000 graduating from college. Thus each year, at least 175 million trees would be planted if the new Filipino law is implemented properly.

“Even with a survival rate of only 10 percent, this would mean an additional 525 million trees would be available for the youth to enjoy when they assume the mantle of leadership in the future,” said Alejano, as per a report by The Independent.
  • How will the new law requiring students to plant trees be implemented?
The higher education department of the Philippines government will be in charge of implementing the bill to ensure tree plantation by students in order to graduate.

As per CNN’s Philippines news service, the trees will be planted in certain protected areas, existing forests, in mangroves, military ranges, selected urban areas, and abandoned mining sites.
The Philippines government also said that the chosen plant species should be appropriate for each location, topography and the climate of the area. Moreover, indigenous plant species will be preferred.
  • Why does the Philippines need such a law to encourage tree plantation?
Even though the entire world is suffering from climate crisis a major part of which is humanly propagated, the Philippines is one of the countries which is severely deforested. The total forest cover in the country dropped from a healthy 70% to as low as 20% in just the 20th century. A lack of forest cover plays havoc with the climate and increases the risk of floods and landslides to a large extent. Illegal logging is also a major problem faced in the Philippines.

Apart from the obvious benefits of increasing forest cover which would raise the carbon-absorption, the government hopes that the new Filipino law requiring students to plant trees will also bring more awareness about the environment for future generations and pave the way for better ecological initiatives.

In India
Assam: As the sun rises, scores of children with bags full of books and smiles on their faces walk through the lanes of Pamohi to reach a school situated in the pristine woods of the capital city of Assam.

The children, however, do not come to this school only with bags full of books. They bring with them polythene bags full of plastic waste as the only form of fee which this school accepts. Unbelievable as it may sound, the Akshar School in Guwahati has the kind of fee structure where children deposit at least 10 to 20 plastic items per week, with a pledge to not burn plastic.

“We wanted to start a free school for children, but stumbled upon this idea after we realized a larger social and ecological problem brewing in this area. I still remember how our classrooms were filled with toxic fumes every time somebody in the nearby areas burnt plastics. Here it was a norm to burn waste plastic to keep warm. We wanted to change that and so we started encouraging our students to bring their plastic waste as school fees,” said Parmita Sarma.

Parmita Sarma and Mazin Mukhtar founded The Akshar School in June 2016. The school has been giving formal education to more than 100 children belonging to an economically backward category. According to The North East Now, the school has designed the curriculum fundamentally for poverty-stricken children. Not only do they teach children lessons on Science, Geography, and Mathematics, but they also provide vocational skill training so that they can become skilled professionals by the end of the course.
  • How did the idea of Akshar School come into being?
Earlier in 2013, when Mazin Mukhtar came to India from New York for a school project, he got in touch with Parmita Sarma, who was a Social Work student at the Tata Institute of Social Sciences (TISS) and was already working in the education sector. Parmita was already doing work in the education sector, and she also had plans to start a school. When they met, their goals were so overlapping that they decided to start Akshar together. The students earned Rs 150 – Rs 200 per day at the stone quarries. According to Parmita, they could never match that monetarily, so instead, they proposed a mentorship peer-to-peer learning model, where the older students teach the younger ones and in return get paid in toy currency with which they can buy snacks, clothes, toys, shoes from the nearby shop. The older students teach younger children every day at Akshar, which serves two purposes – one, it makes them feel valued and important; second, they can have fewer teachers.
  • What does the school teach students?
With the help of the students, the school also educates the community about the harmful effects of burning plastic. They teach the villagers to recycle the waste and become agents of change. As a result of the school’s initiative, more and more families in the village have started participating in the recycling drive and spreading awareness.

With the help of teachers, the students make numerous construction materials with plastic waste. The students have already created some eco-bricks with the waste material and built some plant guards in the school premises. They also wish to build boundary walls, toilets and some pathways which will help the children go from one place to another when the school campus is waterlogged, with the help of eco-bricks.

Suggestions
  1. The school has been declared as a ‘No Plastic Zone’ which is marked at the entrance of the school. Hence the school encourages the use of alternative packaging and carrying options are being promoted. Jute bags are being increasingly used by both students and teachers keeping in mind the initiative. To discourage the use of plastic, all school stationery is provided in cloth bags instead of plastic ones. Teachers are encouraged to use jute or cloth bags to carry books.
  2. Eco policing is a program initiated by the school to involve the school students to fulfill the following objectives: (i) To create a litter-free environment. (ii) To work towards green campus and a sustainable school (iii) To create awareness amongst students regarding their environment to become responsible citizens in the future.
  3. Each class has two monitors who are in charge to switch on and off the lights and fans as and when needed to save energy and build a better future. This also helps the students to build a responsible behavior pattern.
  4. To create environmental awareness among the children from a basic level – where the backs cover of every school notebook is marked with the logo- the 3 Rs. Reduce, Reuse and Recycle. All paper used in the school is recyclable and is sent for recycling.
  5. Environment week is celebrated in the month of July with enthusiasm and fervor by our teachers and students to spread consciousness amongst the young minds and make the earth a better and a sustainable unit to live in.
Conclusion
We have to take immediate steps like this for our Environment Protection and Development by indulging Students through our Education system because if they don’t understand the value of the Environment in the Present then there is No Environment to use for them in the future. So, our Government and us, we all have to protect and improve our environment. 
View Post

Corporate Insolvency Resolution Process (CIRP) provides a legal mechanism of recovery for creditors. In the current economic environment in India, where both public and private financial institutions are struggling with bad corporate debts, it is critical to analyse and understand how the courts are enabling implementation of the CIRP in the right spirit and supporting creditors, while ensuring that debtors do not take undue advantage of the process.

Time Limit for Completion of CIRP
Section 12 of the Insolvency and Bankruptcy Code (IBC) mandates that the CIRP should be completed within 180 days from the date of admission of application to initiate the said process.

As per Regulation 40 of the Insolvency Resolution Process for Corporate Persons Regulations, 2016 (IRP Regulations), the CIRP may be extended by a maximum period of 90 days on the passing of a resolution by the committee of creditors by a vote of 66% of the voting shares.  

The Supreme Court in the case of M/s Surendra Trading Company v M/s Juggilal Kamlapat Jute Mills Company Limited stated that no extension should be given beyond the period of 270 days and the time limit prescribed under Section 12 must be strictly adhered to.    

Admission of Claims of the Creditors
On reading Section 15 of the IBC with Regulation 12 of the IRP Regulations, it may be inferred that the claims of the creditors must be admitted within the 270 days period required for completion of the CIRP. 

In practice, however, many creditors do not submit their claims within the prescribed time period and, as per law, their claims cannot be accepted. Importantly, the courts are mindful of the fact that the IBC is still relatively new and the rights of the creditors to their dues cannot be dismissed so summarily. As a result, they have in a catena of judgements sought to interpret these rules so as to provide relief to the creditors. 

Exclusion of Certain Periods by the Adjudicating Authority from the Prescribed Time Limit
It has been held in Quinn Logistics India Pvt. Ltd. v Mack Soft Tech Pvt. Ltd. and Ors. that the adjudicating authority has discretion to exclude certain specific periods of time from the maximum period of 270 days taken to complete the CIRP process. 

These time periods, if excluded, will mean that the CIRP process is not over and additional days will be given to complete it. The claims of the creditors will be accepted in such additional periods as well. 

For instance, the following periods may be excluded from the time limit prescribed under Section 12 of the IBC:
  1. The period for which the CIRP was stayed by a court of law.
  2. The period for which there was no Resolution Professional present while the CIRP took place.
  3. The period for which an order was reserved by a court of law while the CIRP took place.

In the case of Arcelor Mittal India Private Limited v Satish Kumar Gupta and Ors. the Supreme Court has laid down that where a resolution plan is upheld by the Adjudicating Authority, the period of time taken in litigation must also be excluded from the counting of the time taken to complete the CIRP. 

The court in this case also mentioned, as a side note, that the Tribunals should not be so stringent about the time taken to complete the CIRP, and must be flexible so as to accommodate the needs of the creditors. 

The judges in the case of Vikram Bajaj v Committee of Creditors Anil Special Steels Industries Ltd. relied on the Quinn Logistics and Arcelor Mittal judgements and have laid down that any delay taken in approving the Resolution Plan must also be excluded from the CIRP. 

Thus, from the aforementioned three judgments, it can be seen that depending on the circumstances, certain periods of time may be excluded from the CIRP process. 

Claims in the Books of Accounts can be Admitted even after the Expiry of Time Limit
The IBC lays down that claims of the creditors cannot be accepted after the time limit under Section 12 has expired. However, the judges in the case of Symphony Ltd. v Chhaparia Industries Pvt. Ltd. and Ors. noted an exception to the said rule. 

It was observed that even if the receipt of claims was beyond the statutorily accepted limit, the debt can still be repaid if it is mentioned in the books of accounts of the company undergoing the CIRP. The court believed that if the claim was already part of the financial records of the insolvent company, i.e., the books of accounts, then the said company is liable to repay those debts irrespective of whether the creditors made a formal claim of the same within the 270 days time period. 

It has also been seen in the case of SBI v ARGL that the IRP even after submission of Resolution Plan and completion of the CIRP has been espoused with the duty to accept and collate more claims. Thus, the time limit is not sacrosanct and can be adjusted. 

The Union Cabinet Extends the CIRP Time Limit to 330 Days
The original intent of the lawmakers who drafted the IBC was that the time limit under Section 12 be strictly followed. The reason for such a fixed cap was to ensure that the CIRP process does not get unnecessarily prolonged and that the creditors make a conscious effort to make their claims well in time. 

However, they were not able to anticipate that there might be certain hinderances in the CIRP process, which could cause it to get delayed. The courts stepped in and laid down that all such delays must be excluded from the counting of the 270 days time period. The courts had observed that such time limits cannot be mandatory but only directory. It is indeed essential to ensure speedy disposal of the CIRP, but in the process, the claims of a creditor cannot be ignored. 

The makers of the IBC were not happy with the various loopholes in the law and the subsequent interpretations by the courts as it has led to inordinate delays in the completion of the CIRP process. Moreover, according to news reports, more than one-third of the ongoing CIRP cases have exceeded the time limit of 270 days. 

Therefore, the Union Cabinet has recently approved a new time limit for the completion of CIRP. This time limit is of 330 days and is inclusive of any delay in litigation and other judicial processes. The aim of the Union Cabinet in making this change is to maintain the sanctity of the timelines and to maximize the outcomes envisioned in the code. The lawmakers clearly seek to ensure speedier resolution of cases involving corporate debtors. 

All ongoing cases will be covered under the new amendment. A company could be sent for liquidation, if the resolution process takes more than 330 days. The only thing which now remains to be seen is whether the intent of the drafters gets materialised in the judgments of the courts, or whether the courts find any room for expansive interpretation beyond the intent of the lawmakers.

View Post

The world saw the effects of the 2008 financial crisis, where banks began to impose stricter laws against consumer lending. Quick and simple loans became tough to acquire. Even those with a good credit history found it challenging to acquire loans. As the loan approval processes became longer and the criteria for credit assessment tighter, it opened the door to alternative financing, bringing about the rise of the peer-to-peer (P2P) lending space.

P2P lending these days has a huge focus on technology, utilizing online platforms to connect borrowers and investors. By incorporating the use of technology into finance, credit approvals and loan processes have been made quicker and more efficient. With that, P2P lending has seen a steady growth globally and has been recognized as one of the fastest growing areas in alternative financing. How long will this growth continue?

The Growth of P2P Lending
Since its concept originated back in 2005 with Zopa in the UK, P2P lending has grown at an astonishing pace. In 2016 alone, P2P lending generated more than $200 billion worth of investments worldwide. The concept helps the under-served or under-banked individuals and businesses access alternate sources of financing, connecting individuals which have a surplus of cash to business owners who are looking for loans. These loans are then packaged in the form of investments for these individuals to fund.

What was previously considered as simply a form of alternative finance has begun entering the mainstream. Despite the fact that the P2P lending industry has yet to fully mature, it has shown great promise and potential for growth in the future.

Thus far, the industry has been progressing consistently. As default rates stabilize, and recognition increases, the P2P market is seen to continue its steady growth.

Global Recognition and Projections
Globally, the P2P lending market has started to become recognized for its potential and growth. While the industry has yet to fully mature, it has already created high volumes of investment opportunities internationally. Possibly due to the inherent financing gaps and borrowers’ increased interest in seeking out alternative sources of financing.

The concept of P2P is viewed differently around the world. For instance, Canada and UK regulate P2P platforms as an intermediary, while in France and Germany, it is regarded as similar to banks. In the US, however, regulations vary from state to state. For China, having the largest P2P lending market globally, they have practically integrated P2P lending to become a staple in their financing scene.

Despite these differences, one thing in common for P2P lending worldwide is their growth projections. Transparency Market Research suggests that the opportunity in the global P2P market will be worth $897.85 billion by the year 2024, from $26.16 billion in 2015. It is also predicted to hit about 45% of the global share market by 2020.

Challenges For The Industry
As promising as the P2P lending market might seem right now, there are still several nooks and crannies that need to be worked out for this young industry to reach its fullest potential.

Fraudulent risks may dissuade investors from trusting their money with P2P lending platforms. Despite its popularity, P2P lending is still viewed as an alternative source of investment. Thus, investors might not be too willing to invest with such platforms. Statistics by the Chinese Banking Regulatory Commission showed that out of the 4,127 P2P lending platforms at the end of June 2016, 1,778 were suffering from problems such as Ponzi schemes. Therefore, investors should choose platforms that have safeguards in place against such risks. One example would be Funding Societies, who engage a third-party escrow agency to handle all funds from investors.

Loan default rates pose a huge threat to the market. The industry would have to work a way between regulating interest rates and the ability to make repayments. Ensuring that they continue to uphold a stringent credit assessment criteria and keep default rates as low as possible. For instance, Funding Societies, Southeast Asia’s ’s leading P2P lending platform, has the lowest default rate in its region at 1.3%.

Competition from banks and other financial institutions would limit the volume of loans that the industry has access to. Traditionally, business owners would look to acquire funds from banks rather than considering alternative solutions, like P2P lending. They might not even consider taking up a loan with P2P lending platforms, considering the comparably higher interest rates that comes attached to P2P loans. As a result, P2P lending platforms might lose out on a market share of borrowers. Although P2P lending currently targets businesses who are under-served and under-banked, there could potentially be a partnership in the long run between the two, working out how they can mutually support each other’s field of work.

All in all, while P2P lending is still fairly adolescent, it has shown great promise in its future. As with any market growth, there are risks. But as long as P2P platforms continue to safeguard themselves against such risks, and continue to innovate and improve, the future of P2P lending should continue to shine brightly.

Indian Scenario
The Reserve Bank of India (RBI), on October 4, issued directions for non-banking financial companies (NBFC) that operate peer-to-peer (P2P) lending platforms. According to the directions, from now on no NBFC can start or carry on the business of a P2P lending platform without obtaining a Certificate of Registration. Every company seeking registration with the bank as an NBFC-P2P shall have a net owned funds of not less than Rs 20 million or such higher amount as the bank may specify. 

There is good news for existing NBFC-P2Ps as well as because there are few players already in the market. They have been asked to apply for registration as NBFC-P2Ps within 3 months. 

These directions issued by RBI will be known as the Non-Banking Financial Company - Peer to Peer Lending Platform (Reserve Bank) Directions, 2017, and will come into force with immediate effect. 
P2P lending is a form of crowd-funding used to raise loans which are paid back with interest by bringing together people who need to borrow, from those who want to invest. It can be defined as the use of an online platform that matches lenders with borrowers to provide unsecured loans. The borrower can either be an individual or a legal person requiring a loan. The interest rate may be set by the platform or mutual agreement between the borrower and lender. 

Scope of Activities of NBFC-P2P 
Among several other things, an NBFC-P2P can: 
  • Act as an intermediary providing an online marketplace or platform to participants involved in P2P lending. 
  • Not raise deposits as defined by or under Section 45I(bb) of the Act or the Companies Act, 2013. 
  • Not lend on its own. 
  • Not hold, on its own balance sheet, funds received from lenders for lending, or funds received from borrowers for servicing loans; or such funds as stipulated in paragraph 9. 
  • Not cross-sell products except for loan-specific insurance products. 
  • Not permit international flow of funds. 

An NBFC-P2P Will Be Expected To: 
  • Undertake due diligence on the participants. 
  • Undertake credit assessment and risk profiling of the borrowers and disclose the same to their prospective lenders. 
  • Undertake documentation of loan agreements and other related documents. 
  • Provide assistance in disbursement and repayments of loan amount. 
  • Render services for recovery  of loans originated on the platform

Prudential Norms
  • The aggregate exposure of a lender to all borrowers at any point of time, across all P2Ps, shall be subject to a cap of Rs 10 lakhs. 
  • The aggregate loans taken by a borrower at any point of time, across all P2Ps, shall be subject to a cap of Rs 10 lakhs. 
  • The exposure of a single lender to the same borrower, across all P2Ps, shall not exceed Rs 50,000. 
  • The maturity of the loans shall not exceed 36 months

Fund Transfer Mechanism 
Fund transfer between participants on the P2P lending platform will happen through escrow account mechanisms. All fund transfers shall be through and from bank accounts, and cash transactions are strictly prohibited. Earlier, the RBI had issued a discussion paper on regulation of the P2P lending platform as a non-banking finance company (NBFC). Thereafter, the P2P platform has been notified as an NBFC under section 45I (f) (iii) of the Reserve Bank of India Act, 1934 as per the gazette notification published on September 18, 2017. 

Dev Raj Singh, executive director, tax and regulatory services, EY India, said, “The guidelines on borrowing and lending on P2P platform issued by RBI is a welcome step in a direction to bring the localized market of money lenders to a formal platform by making borrowing / lending through banking channels. In addition to the benefit of borrowers by giving easy access to credit, it will also benefit the small lenders by giving them an avenue to lend the surplus funds in a secured manner which will also benefit the small lenders by giving them an avenue to lend the surplus funds in a secured manner which will yield higher rate of return as compared to bank deposits. The guidelines also expressly permit the existing player to apply to RBI within 3 months for registration. The cap on the amount of borrowers / lenders, in single or in aggregate, would keep high net-worth individuals away from participating.” 
View Post
[This article was provided by Lexio Solutions. Visit them at www.lexiosolutions.ml]

Do you know that the designs of the Coca-Cola bottles are protected and cannot be imitated by another rival company? Why do you ask? Because the design of the bottle has been associated with the Company. They have the designs of all their bottles, whether the glass ones or the plastic ones, the bigger bottles or the small ones, they have all of them registered under their name.

What purpose does it serve? Well, you see, like Patents and Trade Marks, Industrial Design (more or fewer Designs) is another aspect of Intellectual Property which needs to be protected as it has a commercial value and is created by someone from an idea. Businesses do it all time to protect the design of their products from being copied by other opponents in the market and gain an unfair advantage.

But if asked what a ‘Design’ actually is and why should it be protected, what would you say?
The word ‘Design’ may be defined as the “way in which something is planned and made or arranged”, but under the ambit of Intellectual Property Rights, it has a specific definition. Generally, there are some specific criteria which have to be satisfied in order for a design to be considered as a ‘Design’ under the Intellectual Property Laws. These criteria are as follows:
  1. It must contain features if shape, configuration, pattern, ornament, or composition of lines and colors;
  2. Which can be applied to any article;
  3. In two dimensional, or three dimensional, or in both forms;
  4. And have to be created by any industrial process or means whether manual or mechanical, separate or combined.
  5. And the finished article appeals to and are judged solely by the eye.
Having said that, a Design does not include something which is
  1. Any mode or principle of construction
  2. Anything which in substance is a mere mechanical device
  3. Any Trade Mark
  4. Any article of work as defined in Copyright Laws.
The definition under the US Code for Design is the simplest among all the laws in the world. Under the US Code Title 17, Chapter 13, Sec. 1301(a)(1), the definition states, “The designer or other owners of an original design of a useful article which makes the article attractive or distinctive to in appearance to the purchasing or using the public may secure the protection provided by this chapter upon complying with and subject to this chapter”

In today’s era where everything is appealing and involves creativity and aesthetics, the visual appeal of any products has become substantial. While making the product stand out from the crowd, the proprietor will also be able to restrain others imitating, or copying his original work on the article (his ‘Design’), and commercialize them in the market without his consent and giving consideration for the same. The protection of Industrial design also promotes creativity and the industrial and manufacturing sectors which can help in expanding commercial activities.

But a ‘Design’ is an Artistic work under Copyright also, right?
No, a mere design on a paper without being applied to an article will not be a Design but can fall under Copyright laws. In India, it falls under Sec 2(d) of the Copyright Act, 1957 which defines an ‘Article’ as, “any article of manufacture and any substance, artificial or partly artificial and partly natural and includes any part of an article capable of being made and sold separately”.

The Copyright Act in India excludes certain items from Sec 2(d) for the purpose of making it more clear on what an Article actually will be. This definition limits the meaning of ‘Article’ to anything which is not:
  1. Any substance or principle of construction which in substance is a merely mechanical device.
  2. Any Trade Mark
  3. Any Property
  4. Any Article work as defined under Sec 2(c) of the Copyright Act, 1957.
Who can file the Application?
Basically, under the Laws, a person who is the proprietor of the Design is eligible to file an application. The word Person in the Laws contains a set of legal entities recognized by the Law. These are:
  1. Individual
  2. Firm
  3. Partnership
  4. Corporate Body
  5. Legal Entity
Can I get a Design Registration for a Set?
Design of a ‘Set’ is registrable. In India for example, the word ‘Set’ is defined under Rule 2(e) of Design Rules 2001. It defines ‘Set’ as “a number of articles of the same general character ordinarily sold together or intended to be used together; all bearing the same design, with or without modification, not sufficient to alter the character or substantially to affect the identity thereof”. So basically, if you have to define a set, you can take a crockery set as an example.

So what cannot be protected under Industrial Design?
There are many criteria under which an article cannot be protected under the Industrial Designs, but because different countries have different criteria, there are some general ones which are listed below:
  1. Any design which is opposing the moral values of the public.
  2. Any design which describes any process of construction of an article.
  3. Designs of Books, Jackets, Calendars, Certificates, Forms, and other Documents, Dress-Making Patterns, Greeting Cards, Postcards, Stamps, Medals.
  4. Designs including flags, emblems, or signs of any country.
  5. Designs of integrated circuits.
So how can I get my Design registered?
Well, there are two types of registration in all types of Intellectual Property Registration, the first one is National which means that the registration will be applicable only within the country in which the proprietor of the company wants to get the registration. The second one is the International registration, where the registration protection will be applicable to most or all parts of the world.
  • National Registration – Let us take India for example. In India, the Registration for a Design can be applied for before the design Registry in New Delhi, or before any of the Patent Offices, subject to the geographical Jurisdiction. The process for registration in India is as follows:
  1. The application will be filed first.
  2. The Office concerned will determine if the Design is not eligible for registration
  3. If it is, the Office will issue a statement of objections (called Examination Report), and the application is obligated to respond to the report within a period of three months from the date of receipt of the report.
  4. If the response by the Applicant is not received within the time period specified, the application will be abandoned.
  5. If the response has been received, the Controller of designs determines whether an application should be refused, accepted or to be put up for a hearing based on the response of the Applicant.
  6. If the application is accepted by Controller of Designs, it will be then processed for registration.
  7. The particulars of the application, along with the article, will be published in the Official Gazette after the registration.
  8. In India, the registration of an Industrial Design will be applicable for a period of 10 years which can be renewed for an extent for up to 5 years.
  9. If you have to appeal against the decision of the Controller of Design, you will have to move to the High Court.

Industrial Design Registration Process in India, Industrial Design Registration Process India
  • International Registration – There are two different ways of getting international design protection. The first is national design application in each individual country of interest, and the second is to file an ‘international’ design application via the Hague Systems for the International Registration of Industrial Designs. The main difference between the two methods is that the Hague Systems allows you to file a single design application for design protection in any of the territories which are a party to the Hague Agreement. Otherwise, separate design applications are needed for each country for which design protection is needed. In either case, you need to file in all of your countries of interest within 6 months of first filing your design, and this can potentially be done more easily via a single ‘International’ application. Having said that, not all countries are a party to the Hague Agreement, so in some cases, you may only be able to obtain design protection via a direct national filing. The process of International registration via the Hague Systems is more or less similar to a general process of registration of the design in a country, except it covers various countries at once. For your help below is a picture of how an application is processed. In fact, I will link a WIPO presentation for you if you feel you need to have a clearer view of what’s happening around here. Good Day!


Image result for international design registration
View Post