Mentoassociates.com – Legal Articles

Chapter I of Part II of the Arbitration and Conciliation Act, 1996 (Sections 44 to 52) deals with the recognition and enforcement of foreign arbitral awards under the New York Convention (1958) by Indian courts. On the whole, Indian  Courts have a pro-enforcement stand making  India an arbitration-friendly jurisdiction, aligning with global arbitration standards.

Section 44 defines a foreign award as an arbitral award arising from disputes of a commercial nature, made in a country that is a signatory to the New York Convention and notified by the Indian government. As per Section 45, if a party initiates a legal suit despite an arbitration agreement, the court must refer the parties to arbitration, unless the agreement is invalid. Again Section 46 says that a foreign award is considered binding and can be relied upon in any legal proceedings in India.

The Enforcement Procedure of a foreign award is dealt in Sections 47 to 49. As per Section 47 a party seeking enforcement must submit:

1. The original or certified copy of the award.
2. The original or certified arbitration agreement.
3. A certified translation if the award is in a foreign language.

As per Section 48, the Courts may refuse enforcement of a foreign award only on limited grounds, similar to Article V of the New York Convention, including:

1. Lack of proper notice to a party.
2. Incapacity of parties or invalid agreement.
3. Award beyond the scope of arbitration.
4. Violation of natural justice or improper procedure.
5. Award set aside in the country where it was made.
6. Violation of Indian public policy (e.g., fraud, corruption, or fundamental legal principles).

As per Section 49, if no valid objections are raised under Section 48, the award is deemed a decree of an Indian court and is enforceable as a domestic court judgment.

As per Section 50, an appeal can be filed against a court decision refusing enforcement of a foreign award but not against a decision allowing enforcement. Section 52 clarifies that other laws and treaties concerning foreign awards remain unaffected.

• The Micro, Small and Medium Enterprises Development Act (MSMED) (hereinafter referred to as Act) provides a very quick and effective means of money recovery for micro and small enterprises. Section 15 to 25 of chapter V of the act covers the same. These special privileges are for micro and small enterprises. A small enterprise growing to medium can also avail these remedies for getting the delayed payments. 

• A small enterprise, if engaged in manufacture or production of goods, is one where the investment in plant and machinery is more than 25 lakh rupees but does not exceed 5 crore rupees. In the case of an enterprise engaged in providing services, it will be treated as a small enterprise where the investment is more than 10 lakhs rupees but does not exceed 2 crore rupees. 

• A micro enterprise is an enterprise engaged in the manufacture and production of goods and where the investment in plant and machinery does not exceed 25 lakh rupees. In the case of an enterprise engaged in providing or rendering of services, for a micro enterprise, the investment in equipment shall  not exceed 10 Lakh rupees. 

• As per section 15 of the act, if a supplier supplies any goods or renders any services to any buyer, the buyer shall make payment on or before the date agreed upon between him and the supplier in writing or when there is no agreement in this behalf, before the appointed day. Here a supplier means a micro or small enterprise. As per section 2(b) of the act, the appointed day means the day following immediately after the expiry of the period of 15 days from the day of acceptance or the day of deemed acceptance of any goods or services by a buyer from a supplier. The period agreed between the supplier and buyer, in writing, shall not exceed 45 days from the day of acceptance or the day of deemed acceptance.

• As per section 16 of the act, if a buyer fails to make payment of the amount to the supplier as required under the act, the buyer shall be liable to pay compound interest with monthly rests to the supplier on that amount from the time of the appointed day or from the date immediately following the date agreed upon at 3 times the bank rate notified by RBI. If the claimant has received the principal already, the claim can be filed for interest alone. 

• As per section 18 of the act, if a supplier has a dispute with a buyer, in regards to any amount due, he may make a reference to the micro and small enterprises facilitation council (MSEFC)(hereinafter referred to as Council). On receipt of a reference, the council shall either itself conduct conciliation in the matter or refer the matter for conciliation to an institution providing ADR(Alternate Dispute Resolution ) services. The provisions of the delayed payments under the act, are not applicable to foreign buyers. Even a government department as a buyer can be proceeded against in the council. 

• MSME Samadhan portal is a portal where micro and small enterprises can file their applications online regarding delayed payments. For the purpose of applying to the MSEFC, the micro or small enterprise shall have a valid UDYAM registration. The application filed online will be forwarded automatically to the concerned MSEFC which will take action on the application. The claim should be submitted in hard copy also. 

• To file an application on MSME samadhan portal, work order is compulsory. In case the purchase order is oral, an affidavit to that effect is to be submitted. A legal notice by the supplier to the buyer is not necessary before filing the case in the council. 

• If the conciliation under section 18 is not successful, the council shall either itself take up the dispute for arbitration or refer it to an institution or centre providing ADR services. For the purpose of this conciliation and arbitration, the jurisdiction of the MSEFC or the Alternate Dispute Resolution centre will be the supplier’s jurisdiction and the buyer can be located anywhere in India. Every reference to MSEFC under section 18 shall be decided within a period of 90 days from the date of making such a reference. An award passed by the MSEFC can be executed under section 36 of the arbitration and conciliation act, 1996.

• If a person wants to set aside the decree, award or order passed by the MSEFC, then they can file the application before the jurisdictional court under section 34 of the Arbitration and Conciliation Act 1996. If it is by the buyer, then he needs to deposit 75% of the amount in terms of the decree award or the order as a condition for filing the setting aside application. Furthermore, the court considering the application to set aside the decree, award or order, shall order a reasonable percentage of the amount deposited to be paid to the supplier. 

• As per section 22 of the act, where any buyer is required to get his annual accounts audited, under any law, such buyer shall furnish several information about the principal and interest amount due to any supplier at the end of each accounting year and several other connected information. If anybody intentionally contravenes the provisions of section 22, he shall be liable with fine which shall not be less than 10 thousand rupees. 

• If the buyer is claiming rejection of goods for quality deficiencies, then the rejection should be genuine within 15 days of the receipt of the goods and its immediate communication to the supplier. 

ISSN is an internationally accepted unique eight digit code used for identifying newspapers, magazines and other print or electronic periodicals. It was developed in the 1970s by the International Organization for Standardization (ISO). ISSN serves as an identification mode and is not indicative of any information such as place of origin, content of the periodical, quality/standard of information etc. It is a numeric code that does not have any intrinsic meaning. ISSN also does not confer title or IP of any nature.
Since ISSN is an identification mechanism, all issues of the periodical, magazine will have the same number. As opposed to ISBN (International Standard Book Number) which changes for each book, even if in a series, ISSN remains constant.

The assignment of the ISSN is done by the National Centre ISSN and for countries that do not have such centre, the International Centre ISSN, Paris assigns the number. The Indian National Centre for ISSN is located in New Delhi.

An application should contain the name of the periodical, frequency of publication, intended start date, name and address of publisher. For existing publications, a copy of the relevant issue along with details of the publisher will have to be furnished. Application and allocation of ISSN is currently free of cost.

Asked, what is the use of the ISSN when it does not confer right or title, it can be equated to having an UID in the digital or periodic world.

Authored by:
Naqsha H Biliangady
Advocate

Section 27 of INDIAN CONTRACT ACT, 1872, declares agreements by which any one is restrained from exercising a lawful profession, trade or business of any kind as void.
An exception is provided while selling of goodwill of a business. Accordingly one who sells the good-will of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits; so long as the buyer, or any person deriving title to the good-will from him, carries on a like business therein, provided that such limits appear to the Court reasonable, regard being had to the nature of the business.
The Supreme court has in Superintendence Company of India ( P ) Ltd . vs . Sh . Krishan Murgai reported in AIR 1980 SC 1717, held that post service restraints are void under section 27 of the Indian Contract Act. In the given case there was a negative covenant not to serve anywhere else or enter into competitive business in similar lines. Supreme Court held that restriction contained is restraint of trade and therefore illegal and unenforceable under Section 27.
In Niranjan Shankar Golikari vs. The Century Spinning and Mfg . Co . Ltd , reported in AIR 1967 SC 1098, Supreme court has held that negative covenants which are operative during period of contract do not fall under Section 27.
In VV Sivaram and Ors . vs . Foseco India Limited reported in 2006(1)Kar LJ 386, Karnataka high court held that disclosure of confidential information after cessation of employment by an employee can be restrained and the same is not hit by section 27 of the Indian Contract Act..

The act provides for the regulation of depositories in securities and matters connected there with.
The act provides for registration of depositories from the Securities and Exchange Board of India (Board). Before obtaining the registration certificate, the depository has to satisfy the Board that it has adequate systems and safeguards to prevent manipulations of records and transactions.
A depository shall enter into an agreement with one or more Participants as its agent. A person can enter into an agreement with a Depository through a Participant to avail the services of the Depository. The person who has entered into an agreement with the depository shall surrender the certificate of security to the issuer who in turn shall cancel the certificate of security and substitute in its records the name of the depository as the registered owner and inform the depository accordingly. The depository shall thereafter, enter the name of the person who had the surrendered the certificate of security as the beneficial owner in its records.
Every depository shall, on receipt of intimation from a participant, register the transfer of security in the name of the transferee. All securities held by a depository shall be dematerialised and shall be in a fungible form.
The depository shall be deemed to be the registered owner for the purposes of effecting transfer of ownership of security on behalf of a beneficial owner. The beneficial owner shall be entitled to all the rights and benefits and be subjected to all the liabilities in respect of his securities held by a depository.
A beneficial owner may with the previous approval of the depository create a pledge or hypothecation in respect of a security owned by him through a depository.
If a beneficial owner seeks to opt out of a depository in respect of any security he shall inform the depository accordingly. The depository shall on receipt of intimation make appropriate entries in its records and shall inform the issuer.
Any loss caused to the beneficial owner due to the negligence of the depository or the participant, the depository shall indemnify such beneficial owner. Where the loss due to the negligence of the participant is indemnified by the depository, the depository shall have the right to recover the same from such participant.
The Board has power to call for information and enquiry from any issuer, depository, participant or beneficial owner with respect to any security. Further the Board has the power to issue directions to any person associated with the securities market.
Penalties are imposed under section 19A to G for failure of performance or contravention of orders, direction etc of the Board by various players in the security market. Adjudicating officers adjudge the penalties.
Section 20 of the act provides for punishment for various offences. Only sessions courts can try an offence under this act. Section 22A deals with composition of offences and section 22B deals with immunities.
Appeals against the order of Board or adjudicating officers shall lie to Securities Appellate Tribunal. The act ousts the powers of civil court with respect to matters empowered to the Securities Appellate Tribunal. Any person aggrieved by any decision or order of the Securities Appellate Tribunal may file an appeal to the Supreme Court within sixty days from the date of communication of the decision or order.
Depository shall, with the previous approval of the Board, make bye-laws consistent with the provisions of the Act and the regulations.

The Securities and Exchange Board of India Act, 1992(herein after referred to as Act) established a Board called Securities and Exchange Board of India (hereinafter referred to as Board) with its head office at Mumbai. The Board consists of a chairman and 8 members.
Under section 11 of the act, the Board has wide and extensive powers to protect the interest of investors and to regulate the securities market.
Section 11AA of the act defines ‘Collective Investment Schemes’.
Under section 11 B of the act, the Board has power to issue directions and under section 11 C of the act, the Board has investigation powers.
Section 12 of the act provides for the registration of stock brokers, sub brokers, share transfer agents, bankers to an issue, merchant banker, underwriter, portfolio manager, investment adviser and such other intermediaries.
Section 15 A to 15HB provides for heavy penalties which may run to lakhs or crores of rupees for various failures and defaults like failure to furnish information, return etc.
Section 15K to 15 S of the act provides for establishment, composition, staff, qualification, tenure, salary, filling up of vacancies, resignation and removal of presiding officers and members of Securities Appellate Tribunal. Any person aggrieved by an order of the Board or an adjudicating officer may prefer an appeal to the Tribunal within 45 days from the receipt of the said order from the Board or the adjudicating officer.
Section 15Y and section 20A ousts the jurisdiction of civil courts with regard to matters empowered to Board, adjudicating officers or Tribunal under the act.
Any person aggrieved by an order of Tribunal may file an appeal to Supreme Court within 60 days from the receipt of order.
Section 24 deals with punishments for various offences under the act. Section 24A provides for composition of offences.

REGISTRAR OF NEWSPAPERS
Printing and publishing of newspapers and periodicals within India are governed by the Press and Registration of Books Act, 1867 and the Registration of Newspapers (Central) Rules, 1956.The Registrar of Newspapers or the Press Registrar maintains a register of newspapers and periodicals published in India.
The Office of the Registrar of Newspapers for India is headquartered in New Delhi, and has three regional offices at Calcutta, Mumbai and Chennai to cater to the needs of publishers in all corners of the country.

LEGAL STEPS TO START A NEWS PAPER
1. As a first stage, the applicant needs to go for title verification of the Publication. The title verification application needs to be filed before the jurisdictional District Magistrate. The District Magistrate will get the title verified from RNI.
2. After receiving the title verification letter from RNI, the applicant needs to file a declaration for authentication before District Magistrate. The declaration is in Form No.1.
3. Once the declaration is authenticated by District Magistrate, the newspaper needs to be published within 6 weeks if it is published once a week or oftener than that. In case of any other periodicity, the first issue should be published within 3 months from the date of authentication.
4. After the first issue is published, the applicant needs to file an application for registration. The application shall annex the following documents:
a. Title verification letter.
b. Authenticated declaration.
c. An affidavit for no foreign tie-up.
d. First issue and latest issue of the publication
e. Content intimation/ confirmation in the prescribed form.
f. Certificate intimating appointment of the printer.

1. A company can be voluntarily wound up under the following circumstances:
a. If the period fixed for the duration of the company has expired and company passes a resolution for winding up in a general meeting.
b. If the company passes a special resolution to wind up voluntarily.

2. When a company has passed a resolution for a voluntarily winding up it shall within 14 days give a notice of the resolution in the official gazette and also in some newspaper. A voluntary winding up is deemed to have commenced from the time when the resolution of voluntary winding up is passed by the company. A company shall cease all its all business activities once a winding up process is commenced.

3. The directors of the company or the board of directors shall make a declaration to the effect that they have made a full enquiry into the affairs of the company and that the company has no debts or that it will be able to pay its debts within 3 years from the commencement of the winding up process. This declaration needs to be made within 5 weeks immediately preceding the date of passing of resolution for winding up and the same needs to be delivered to the Registrar for registration before the date of resolution. The declaration needs to be accompanied by a copy of the report of the auditors of the company.

4. The winding up where a declaration is made and delivered to the Registrar is known as “A Members voluntary winding up” and winding up in which the declaration is not made and delivered is known as “A creditors voluntary winding up”.

PROVISIONS APPLICABLE TO MEMBERS VOLUNTARY WINDING UP:
1. The company in general meeting shall appoint one or more liquidators for the purpose of winding up the affairs and distributing the assets of the company. On the appointment of the liquidator all the powers of the Board of directors and of the managing director and whole time directors shall cease, except for the purpose of giving notice of appointment of the liquidators to the Registrar.

2. The company shall give notice to the registrar of the appointment of the liquidator within 10 days of the appointment.

3. The Liquidator has powers to transfer whole or part of the business or property of the winding up company to another company.

4. If the Liquidator is of the opinion that the company is not able to pay its debts in full within the period stated in the declaration under Sec.488 than he shall summon a meeting of the creditors and shall lay before the meeting a statement of assets and liabilities of the company.

5. If the winding up process is continuing for more than 1 year, then the liquidator shall call a general meeting of the company at the end of each year and present an account of his acts and dealings and of the conduct of the winding up during the preceding year.

6. Once the affairs of the company are fully wound up, the liquidator shall make up an account of the winding up and call a general meeting of the company to lay the account before it. The meeting shall be called by advertisement published in the official gazette and in some newspaper. Within one week after the meeting the liquidator shall send to the registrar and the official liquidator a copy each of the account and shall make a return to each of them of the holding of the meeting. The registrar shall register the account and the returns forthwith.

7. The official liquidator on receiving the account and return shall make a scrutiny of the books and papers of the company and if found that the affairs of the company have not been conducted in the manner prejudicial to the interest of its members or to public interest than he shall make a report to that extent to the tribunal and the company shall stand dissolved. If the finding of the official liquidator is otherwise, the tribunal can direct the official liquidator to make further investigation into the affairs of the company.

8. On the receipt of the report of the official liquidator on further investigation the tribunal either make an order that the company stands dissolved or make such other order.

1.As per Section 353 of The Karnataka Municipal Corporation Act 1976, the owner or occupier of every place, where trade/business as mentioned in Schedule X of the said act are carried on and which are within the limits of the Corporations shall apply and obtain from the said corporation, a license (Trade Certificate). Without the said certificate such trades cannot be carried on in such places. As per this provision, either the business owner or the premise owner can apply and get the trade license. However if the occupier of the premise (the business owner who is occupying the premise on rent or lease) applies to the corporation, having satisfied all other eligibility, the corporation cannot refuse the same saying that the same will be issued only in the name of the owner of the premise.

2. Schedule X of the Karnataka Municipal Corporations Act 1976 lists the trades and industries which require a trade licence from the concerned municipal authorities. In Bangalore, BBMP issues trade licences to various shops and industries within its jurisdiction. The health department of BBMP is in charge of these matters. The health officer of BBMP can close a trade premises which does not have a trade licence.

3. The Licence issued expires on 31st March each year. The application for renewal needs to be done before last day of February each year. For renewal of trade licence, an affidavit on a Rs. 100/- stamp paper needs to be filed. The said affidavit shall state that trade will continue to be carried on as per regulations and other laws in force.

4. If a person has multiple trades in the same premises, then he needs to pay a compounded fee equal to twice the highest fee payable for the trades or commodities he is dealing in.

5. Apart from the trade licence fee, a separate fee needs to be paid for using power or generator. One needs to pay either for the sanctioned power load or generator whichever is of higher capacity.

6. The various trades and industries are mentioned in Schedule X of the Act and the applicable fees are also mentioned.

7. BBMP has also setup special trade health licence clinics which functions from 1st Feb to 15th Feb every year where renewal applications are accepted and processed. These clinics function under the various zones. New applications for trade licence should be handed over only at the BBMP range offices.

8. Documents required for the trade licence are as follows:
i) Property owner’s consent letter.
ii) Property tax paid receipt.
iii) NOC from the neighbours.
iv) Building Plan of the trade premises.
v) Occupancy Certificate.
vi) Khata Certificate.

9. Normally the inspection of the premises will be done within 3 working days. Maximum time period for the issuance of trade license is 7 days.

1. What are the circumstances in which a partnership firm is compulsorily dissolved?

A. A firm is dissolved-
       a) By the adjudication of all the partners or of all partners but one as insolvent or,
       b) By the happening of any event which makes it unlawful for the business of the firm to be carried on or for the      partners to carry it on in partnership.

2. What are the contingencies on the happening of which a partnership firm is dissolved?
 
A. Subject to contract between the partners a firm is dissolved –
a) If constituted for a fixed term, by the expiry of that term
b) If constituted to carry out one or more adventures or
    undertakings by the completion thereof.
c) By the death of a partner.
d) By the adjudication of a partner as an insolvent.

3. What is meant by partnership at will?
A. Where no provision is made by contract between the partners for the duration of their partnership, or for the determination of their partnership, the partnership is said to be at will.

4. How can a partnership at will be dissolved?
A.Where the partnership is at will the firm may be dissolved by any partner giving notice in writing to all the other partners of his intention to dissolve the firm.

5. For a partnership at will when is the firm treated as dissolved?
A. The firm is dissolved as from the date mentioned in the notice as the date of dissolution or, if no date is so mentioned, as from the date of the communication of the notice.

6. What are the circumstances in which a court can dissolve a partnership firm?
A. At the suit of a partner, the Court may dissolve a firm on any of the   following grounds, namely:
a) That a partner has become of unsound mind.
b) That a partner, other than the partner suing, has become in any way    permanently incapable of performing his duties as partner.
c) That a partner, other than the partner suing, is guilty of conduct which is likely to affect prejudicially the carrying on of the business.
d) That a partner, other than the partner suing, willfully or persistently commits breach of agreement relating to the management of the affairs of the firm or the conduct of its business, or otherwise so conducts himself in matter relating to the business that it is not reasonably practicable for the other partners to carry on the business in partnership with him.
e) That a partner, other than the partner suing has in any way transferred the whole of his interest in the firm to a third party.
f) That the business of the firm cannot be carried on save at a loss.
g) On any other ground which renders it just and equitable that the firm should be dissolved.

7. What is the extent of liability of partners for acts done after dissolution?
A. After the dissolution of a firm, the partners continue to be liable as such to third parties for any act done by any of them which would have been an act of the firm if done before the dissolution until public notice is given of the dissolution.

8. What are the instances where the authority of the partner to bind the firm and mutual rights and obligations of the partner continue even after dissolution?
A. After the dissolution of a firm the authority of each partner to bind the firm, and the other mutual rights and obligations of the partners, continue notwithstanding the dissolution, so far as may be necessary to wind up the affairs of the firm and to complete transactions begun but unfinished at the time of the dissolution, but not otherwise.
                 
9. Can a partner carry on similar business using firm’s name?
A. After a firm is dissolved, every partner or his representative may in the absence of a contract between the partners to the contrary, restrain any other partner or his representative from carrying on a similar business in the firm name or from using any of the property of the firm for his own benefit, until the affairs of the firm have been completely wound up.

            Provided that where any partner or his representative has bought the goodwill of the firm, the said partner can use the firm name.

10. What is meant by goodwill of a firm?
•It is the value of reputation and connection which a firm establishes over time due to its integrity, efficient services to customers, quality of its products, industry etc.
•It is a commercial rather than a legal term.
•Supreme Court has held that the goodwill is an intangible asset of a firm. It is the whole advantage whatever it may be of the reputation, and the connections formed with the customers together with the circumstances which make the connections durable. 
 

11. Can a partner who has bought the goodwill of the firm, use the firm name after dissolution of firm.
A.Yes.

12. What happens to a partnership firm of 2 partners when one of the partners resigns?
A. It gets dissolved.

13.Under what circumstance the individual asset of a partner becomes a partnership firm asset?
To be treated as partnership firm property, the individual property of a partner needs to be explicitly agreed by the partner to be brought in as a partnership asset.
Even if a partner uses his personal property to do business of the firm, it does not become a property of a firm unless he specifically agrees to do so.