Mentoassociates.com – Legal Articles

The Foreign Contribution (Regulation) Act 1976 regulates the acceptance and utilization of foreign contributions or foreign hospitality by people and associations in India. The act prohibits acceptance of foreign contribution by any:
a. Candidate for election
b. Correspondent, columnist, cartoonist, editor, owner, printer or publisher    of a registered news paper.
c. Judge, Government servant or employee of any corporation
d. Member of any legislature
e. Political party or office-bearer thereof.

Organizations which are not a political party, but which have a political nature can accept foreign contribution only with prior permission of Central Government.Associations like trust, society, companies etc with a definite cultural, economic, educational, religious or social program can accept foreign contribution, only if they register with Central Government. Further such associations are permitted to receive foreign contribution only through a particular branch of a bank of their choice. Such an association shall give intimation to the Central Government regarding the amount of each foreign contribution received by it, the source and manner of receipt, purpose and manner for which such foreign contribution was utilized.

Every citizen of India who receives any scholarship or stipend from any foreign source shall give intimation to the Central Government regarding the amount, source and purpose of the said scholarship or stipend. If the amount of such scholarship or stipend does not exceed Rs 36,000/- per annum, the recipient is not bound to give intimation to the central government

No member of a legislature, office bearer of a political party, judge, government servant or employee of any corporation shall, while visiting any country outside India, accept any foreign hospitality except with the prior permission of the Central government. This restriction is not applicable for receipt of emergent medical aid during such visits. Further, a member of an Indian delegation is permitted to accept a gift from a foreign source, during a foreign trip, subject to the regulations made by the Central government in this regard.

A foreign hospitality shall mean any offer made by a foreign source, for providing a person with the costs of travel to any foreign country or with free board, lodging, transport or medical treatment. A foreign source does not include NRIs but the same shall include PIOs.Associations, organizations, trusts, societies etc. receiving foreign contribution shall maintain proper accounts in that regard.

Acceptance of salary, wages or other remuneration by a person, from any foreign source by way of payment in the ordinary course of business transacted in India is not prohibited by the Act.

THE PAYMENT OF BONUS ACT, 1965  AND THE PAYMENT OF BONUS RULES, 1975

Application:It shall apply to (a) every factory; and (b) every other establishment in which twenty or more persons are employed on any day during an accounting year. An establishment to which this Act applies shall continue to be governed by this Act notwithstanding that the number of persons employed therein falls below twenty.

Definition of employee:“Employee” means any person, other than an apprentice, employed on a salary or wage not exceeding, three thousand and five hundred rupees, per mensem in any industry to do any skilled or unskilled, manual, supervisory, managerial, administrative, technical or clerical work for hire or reward.

Eligibility for bonus:Every employee shall be entitled to be paid by his employer in an accounting year, bonus, provided he has worked in the establishment for not less than thirty working days in that year.

Payment of minimum bonus:Every employer shall be bound to pay to every employee in respect of the accounting year, a minimum bonus which shall be 8.33 per cent of the salary or wage earned by the employee during the accounting year or one hundred rupees, whichever is higher, whether or not the employer has any allocable surplus in the accounting year.

Payment of maximum bonus:Where in respect of any accounting year, the allocable surplus exceeds the amount of minimum bonus payable to the employees under that section, the employer shall, in lieu of such minimum bonus, be bound to pay to every employee in respect of that accounting year, bonus which shall be an amount in proportion to the salary or wage earned by the employee during the accounting year subject to a maximum of twenty percent of such salary or wage.

Time-limit for payment of bonus:All amounts payable to an employee by way of bonus under this Act shall be paid in cash by his employer, within a period of eight months from the close of the accounting year:

Application of Act to establishments in public sector:If in any accounting year, an establishment in public sector sells any goods produced or manufactured by it or renders any services, in competition with an establishment in private sector, and the income from such sale or services or both is not less than twenty percent of the gross income of the establishment in public sector for that year, then, the provisions of the Act shall apply in relation to such establishment in public sector as they apply in relation to a like establishment in private sector.

Reference of disputes under the Act:Where any dispute arises between an employer and his employees with respect to the bonus payable under this Act or with respect to the application of this Act to an establishment  in public sector, then, such dispute shall be deemed to be an industrial dispute within the meaning of the Industrial Disputes Act, 1947.

Authorities under the act:a.   Inspectors

Penalty:If any person contravenes any of the provisions of this Act or any rule or fails to comply with any direction or requisition, then he shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to 1000 rupees or with both.

Act not to apply to certain classes of employees: Nothing in this Act shall apply to: (i) Employees employed by the Life Insurance Corporation of India;(ii) Seamen as defined in the Merchant Shipping Act, 1958 (iii) Employees registered or listed under any scheme made under the Dock Workers (Regulation of Employment) Act, 1948, and employed by registered or listed employers;(iv)Employees employed by an establishment engaged in any industry carried on by or under the authority of any department of the Central Government or a State Government or a local authority;(v) Employees employed by—  (a) The Indian Red Cross Society or any other institution of a like nature;  (b) Universities and other educational institutions;  (c )  Institutions (including hospitals, chambers of commerce and social welfare institutions) established not for purposes of profit;(vi)Employees employed through contractors on building operations;(viii)  Employees employed by the Reserve Bank of India;(ix) Employees employed by—    (a) the Industrial Finance Corporation of India;(b) any Financial Corporation or any Joint Financial Corporation established under the State Financial Corporations Act, 1951 (c)  The Deposit Insurance Corporation;(d) The National Bank for Agriculture and Rural Development;(e) The Unit Trust of India;(f) The Industrial Development Bank of India;(fa) the Small Industries Development Bank of India (ff) the National Housing Bank;(g) any other financial institution (other than a banking company),being an establishment in public sector, which the Central Government may, by notification in the Official Gazette, specify, (xi) Employees employed by inland water transport establishments operating on routes passing through any other country.

Maintenance of registers:Every employer shall prepare and maintain the following registers, namely:–(a) a register showing the computation of the allocable surplus in Form A;(b) a register showing the set-on and set-off of the allocable surplus,  in Form B;(c)  a register showing the details of the amount of bonus due to each of the employees, the deductions under sections 17 and 18 and the amount actually disbursed, in Form C.

Annual returns:Every employer shall send a return in Form D to the Inspector so as to reach him within 30 days after the expiry of the time limit specified in section 19 for payment of bonus.

THE   PAYMENT OF GRATUITY ACT, 1972 AND THE   PAYMENT OF GRATUITY (CENTRAL) RULES, 1972

1) Application: To every factory, mine, oilfield, plantation, port, railway company, shops and establishments (where 10 or more persons are employed).

2) Eligibility: Gratuity to be paid to an employee after termination of his service, if has rendered continuous service of not less than 5 years. If termination is due to death or disablement, then 5 years service is not required.

3) Rate: 15 days wages for every completed year of service. For seasonal establishments, at the rate of 7 days wages for each season. The maximum gratuity amount shall not exceed Rs 3,50,000/-.

4) Duties of employer:a. To obtain insurance for his liability for payment towards gratuity.b. To register the establishment with the Controlling authority (Form A).c. To ensure each employee who has completed one year of service makes a nomination.d. To keep in his safe custody, every nomination, fresh nomination or alteration of nomination.e. To pay gratuity to an employee within 30 days from the demand. Any dispute regarding quantum etc., to deposit the amount with the controlling authority.f. To intimate the closure of the establishment, to the controlling authority, before 60 days of the closure. Form C.g. To intimate changes in name, address, employer, nature of business etc to the Controlling authority. Form B.h. To display a notice at main entrance, in English and language understood by the majority of the employees, specifying the name of the officer to receive notices on behalf of the employer, under the act.      i. To display an abstract of the act and rules in English and language understood by the majority of the employees in a place near the main entrance.

5) Duties of Employees:a. Each employee who has completed one year of service shall make a nomination, within 30 days of the completion of one year service.b. If family is present, then the nomination shall be made to a family member and not to a third party. No family, nomination can be to third parties; when family comes, cancel third party and nominate family member.c. To apply for gratuity within 30 days of it becomes payable.

6)Authorities:a.      Controlling authority(Assistant labor Commissioner) b.     Appellate authority( Regional labour commissioner)

7) Punishments for Employers:a.      Making false statement or false representation: Imprisonment up to 6 months or fine up to 1000 rupees or both.b.     Contravention of any provisions of the act or rules: Imprisonment up to 1 year or fine up to 1000 rupees or both.

Important Forms:

a.     Form A: Notice of opening

b.    Form B: Notice of changes in Form A.

c.    Form C: Notice of closure of establishment

d.    Form F : Nomination

e.     Form G : Fresh nomination

f.      Form H: Modification of Nomination

g.    Form I: Application of gratuity by an employee

h.    Form J:  Application of gratuity by  a nominee

i.      Form K: Application of gratuity by a legal heir

j.      Form U: Abstract of the act and rules

With the introduction of SARFAESI Act 2002, it has become easy for banks and other financial institutions to recover loans advanced from defaulting borrowers. If a borrower has taken a loan by giving some collateral security and if he defaults in the repayment of the said loan, then the bank or the financial institution can take the possession of the collateral security, in most cases an immovable property and then manage or even sell the same to recover the debt after issuing a 60 days notice. The borrower is forbidden form approaching the civil court or other authorities against any such actions. However, after the said action by the bank, the aggrieved party can approach the Debt Recovery Tribunal against such an action.
Some of the defenses against the action of banks under the SARFAESI Act include:
a) Non-issuance of 60 days notice
b) Non-classification of the account as Non Performing Asset.
c) If the collateral security is an agricultural land, then   proceedings under SARFAESI Act is not permitted.
d) Action of the bank  barred by Limitation Act, 1963
e) Non delivery of Possession notice to the borrower.
f) Non publication of Possession notice in the news paper.
g) Non service of notice of 30 days, for sale of the secured assets after taking possession of the same.
h) If the amount due is less than 20 percent of the principal amount and interest thereon.

A Cheque bounce case normally takes an average of one year to complete the proceedings before trial court. The following are the important stages in a cheque bounce case.
1) Filing of complaint: The complaint need to be filed before the jurisdictional magistrate within 30 days from the accrual of the cause of action. The complainant need to be present before the magistrate at the time of filing. The original documents need to be shown to the magistrate. If prima-facie a case is made out, the magistrate will post the matter for sworn statement.
2) Sworn Statement: At this stage, the complainant needs to enter the witness box and give further details regarding the case. If the magistrate is satisfied that there is some substance in the case of the complainant, then he will issue a summons to the accused.
3) Appearance of Accused: On receipt of summons, the accused need to appear in the court. If he does not appear in the court, the court will issue an arrest warrant against him. After appearance, the accused is supposed to take a bail from the court with or without sureties. If the accused is unable to furnish a surety then he can deposit a cash security, instead of surety. This cash security is refundable to the accused after the conclusion of the case.
4) Recording of Plea: In the next stage, the court will ask the accused as to whether he has committed the offence or not. If the accused admits the guilt, the court will immediately give him punishment. If he pleads innocence, the court will post the matter for evidence.
5) Evidence: The Complainant has to furnish his evidence, normally by way of affidavit; this is known as examination-in-chief. He needs to produce all documents in support of his case like bounced cheque, dishonor memo, copy of notice etc. Later complainant will be cross examined by the accused. If there are other witnesses in support of the complainant, then their evidence also has to be recorded.
6) Statement of the Accused: After the Complainant side evidence is over, the court will put some questions to the accused regarding his guilt. An accused needs to give his version to the same.
7) Defence Evidence: After the Accused statement the court will give an opportunity to the accused to leave his evidence. The accused can also produce documents in support of his case, as well as witnesses in his support. Accused and his witnesses will be cross examined by the complainant. After this, the case is posted for arguments.
8) Arguments: Both the Complainant and the accused will submit their arguments before the court. They can also furnish judgments of high courts and Supreme Court in support of their case. Normally a written argument containing a gist of the oral argument is also furnished to the court.
9) Judgement: After the arguments, case is posted for judgement. If the court finds that the accused has committed offence, he will be punished with fine or imprisonment. If he is innocent, the court will acquit him. If accused is convicted, then he needs to suspend his sentence, for a period of 30 days with in which time, he can file an appeal before the sessions court.

The Protection of Human Rights Act 1993 was amended in the year 2006 with an objective for better protection of human rights and for matters connected therewith or incidental thereto. Human rights are rights relating to life, liberty, equality and dignity of the individual guaranteed by the constitution or embodied in the International Covenants and enforceable by Courts in India. These are more basic than the fundamental rights and are available even to foreigners in India.
The Act provides for the constitution of a National Human Rights Commission at the centre. The National Commission shall consist of a chairperson and 4 members. A secretary general will act as the CEO of the National Commission. The head quarter of the National Commission is at Delhi.
At the state level, the act also provides for the constitution of a State Human Rights Commission. The same consists of a
chairperson and 2 members. A secretary shall act as the CEO of state commission. In Karnataka the state commission is at Bangalore.
The act also provides for the setting up of human rights courts by the state governments for providing speedy trial of offences relating to violation of human rights. These human rights courts are provided with special public prosecutors for the purpose of conducting cases in the human rights matters.

The functions of the Human Rights Commission are as follows:
a. Inquire, suo motu or on a petition presented to it by a victim or any person on his behalf ( or on a direction or order  of any Court) into complaint of
i. Violation of human rights or abetment thereof; or
ii. Negligence in the prevention of such violation by  a public  servant;
b.Intervene in any proceedings involving any allegations of violation of human rights pending before a court with the approval of  such court.
c.Visit, notwithstanding anything contained in any other law for the time being in force, any jail or other institution,  under the control of the state Government, where persons are detained or lodged for purposes of treatments, reformation or protection,  or the study of the living conditions of the inmates thereof and make recommendations thereon to the government.
d. Review the safeguards provided by or under the constitution or any law for the time being in force for the protection of human rights and recommend measures for their effective implementation.
e. Review the factors, including acts of terrorism, that inhibit the enjoyment of human right and recommend appropriate remedial  measures;
f.  Study treaties and other international instruments on human rights and make recommendation for their effective   implementations;
g. Undertake and promote research in the field of human rights.
h. Spread human rights literacy among various sections of society and promote awareness of the safeguard available for the  protection of these rights through publications, the media, seminars and other available means.
i.  Encourage the efforts of non-governmental  organizations and institutions working in the field of human rights;
j. Such other functions as it may consider necessary for the promotion human rights.
The Commission shall, while inquiring into a complaint, have all the powers of a civil court trying a suit under the Code of civil  procedure, 1908
The Commission may, for the purpose of conducting any investigation pertaining to the inquiry, utilize the services of any officer or investigation agency of the Central Government or any State Government with the concurrence of the Central Government or the State Government as the case may be.

If at any stage of the inquiry, the Commission-
a)  consider it necessary to inquire, into the conduct of any person or,
b)  is of the opinion that reputation of any person is likely to be prejudicially affected by the inquiry, It shall give to that person a reasonable opportunity of being heard in the inquiry and to produce evidence in his defense.

The above Act was enacted by the Indian Parliament with an intention to provide effective provisions for the maintenance and welfare of parents and senior citizens. According to this Act, senior citizens who are unable to maintain themselves can make an application against their children for maintenance. If a senior citizen is a childless person, he can file an application against his relatives for maintenance.

The obligation of the children or the relatives to maintain a senior citizen extends to the needs of such senior citizens, so that such parents may lead a normal life.

If a person being relative of a senior citizen and is having sufficient means and is in possession of property of the senior citizen or if he would inherit the property of such senior citizens, then he is liable to maintain such senior citizens.

A senior citizen can file an application for maintenance to the maintenance tribunal. If he is incapable of making the application himself, he can authorize any organization or person to do the needful.

The tribunal is empowered to grant interim maintenance to senior citizens, during the pendency of proceedings before it. An application for maintenance shall be disposed off, in the normal course within 90 days from the date of service of notice and in exceptional cases, the tribunal may extend the said period, once for a maximum period of 30 days.

An application for the maintenance may be filed against one or more persons. The allowance for maintenance and for expenses for the proceedings may be passed from the date of the order or even from the date of filing the application. If the children or relative fails to pay maintenance to a senior citizen, then the tribunal can issue a warrant against them and send them for imprisonment for a term which may extend to one month or until payment, if sooner made which ever is earlier. The proceedings against the children and a relative shall be taken before the tribunal in a district where they resides or resided last.

The Act also provides for a conciliation officer who can try for a negotiated settlement between the parties. Normally the order for maintenance is made on a monthly basis. The maximum monthly maintenance is Rs.10,000/- per month. The tribunal has the power to make alteration in the allowances if there is a change in the circumstances or for other reasons like misrepresentation or mistake of fact done by the applicant before it.

The Foreign Contribution (Regulation) Act 1976 regulates the acceptance and utilization of foreign contributions or foreign hospitality by people and associations in India. The act prohibits acceptance of foreign contribution by any:
a.Candidate for election
b.Correspondent, columnist, cartoonist, editor, owner, printer or publisher of a registered news paper.
c.Judge, Government servant or employee of any corporation
d.Member of any legislature
e.Political party or office-bearer thereof.

Organizations which are not a political party, but which have a political nature can accept foreign contribution only with prior permission of Central Government.
Associations like trust, society, companies etc with a definite cultural, economic, educational, religious or social program can accept foreign contribution, only if they register with Central Government. Further such associations are permitted to receive foreign contribution only through a particular branch of a bank of their choice. Such an association shall give intimation to the Central Government regarding the amount of each foreign contribution received by it, the source and manner of receipt, purpose and manner for which such foreign contribution was utilized.
Every citizen of India who receives any scholarship or stipend from any foreign source shall give intimation to the Central Government regarding the amount, source and purpose of the said scholarship or stipend. If the amount of such scholarship or stipend does not exceed Rs 36,000/- per annum, the recipient is not bound to give intimation to the central government. No member of a legislature, office bearer of a political party, judge, government servant or employee of any corporation shall, while visiting any country outside India, accept any foreign hospitality except with the prior permission of the Central government. This restriction is not applicable for receipt of emergent medical aid during such visits. Further, a member of an Indian delegation is permitted to accept a gift from a foreign source, during a foreign trip, subject to the regulations made by the Central government in this regard.
A foreign hospitality shall mean any offer made by a foreign source, for providing a person with the costs of travel to any foreign country or with free board, lodging, transport or medical treatment. A foreign source does not include NRIs but the same shall include PIOs.
Associations, organizations, trusts, societies etc. receiving foreign contribution shall maintain proper accounts in that regard.
Acceptance of salary, wages or other remuneration by a person, from any foreign source by way of payment in the ordinary course of business transacted in India is not prohibited by the Act.

Courts are empowered for appointment of receivers for the management and protection of any property. The Court can remove a person from the possession or custody of any property and can commit the said property to the custody, management and possession of the receiver, appointed by the Court. Normally the court appoints the receiver for the management of the property, when it appears to the court that the property may be mismanaged or lowered in its worth in the custody of the present possessor. The receiver may be appointed before or after decree is passed in a case pending before the court.

The following are the powers of a receiver appointed by the Court:
a) To bring and defend suits
b) To realize, manage, protect, preserve and improve   property.
c) To collect rents and profits and to apply and dispose rents and profits of the property and to execute documents as     the owner himself has.
d) Other powers, the Court deems fit.

The receiver is entitled for remuneration as fixed by the court for the services rendered by him.
The following are the duties of the receiver:
a) To furnish security if the court thinks fit, duly to account for what he shall receive in respect of the said property.
b) To submit the accounts.
c) To pay the amount due from him.
d) To be responsible for any loss caused to the property by his willful default or gross negligence.    

A transaction in which property is transferred to one person for a consideration paid or provided by another person is called Benami transaction. The Benami Transaction (Prohibition) Act, 1988, prohibits Benami transactions.
The following are not Benami transactions:
a.Purchase of property by any person in the name of his wife or unmarried daughter.
b.The securities held by a depository as a registered owner.
c.The security held by a participant as an agent of depository.

A person who enters into a Benami transaction is liable for imprisonment for a term which may extent to 3 years or with fine or with both. A real owner cannot file a suit for the property against the Benami owner. However, a coparcener in a Hindu undivided family can enforce his rights in the property which is held for the benefit of the coparceners in the family.The government can acquire all properties which are held Benami without any compensation amount being paid.When a trustee or other person in a fiduciary capacity holds property for the benefit of another person, the same cannot be said to be a Benami transaction.