Mentoassociates.com – Legal Articles

The labour law, at present in India, is not highly favouring employees drawing handsome salary, working in IT and other related fields. The applicable labour laws do not assure the job security of skilled employees, particularly who work mainly in managerial, administrational and supervisory roles. In the absence of specific contracts which protect the interest of employees, employers continue to adopt a hire and fire policy. The present discussion includes within its ambit IT Sector and other higher level employment.

In Karnataka almost all IT and other major companies come under the definition of ‘commercial establishment’ and hence The Karnataka Shops and Commercial Establishment Act, 1961 is applicable to the employees working in them.

As per sec-39 of the said Act, an employer can remove or dismiss an employee who has put in at least 6 months of continuous service only for a reasonable cause and after issuing one month notice or giving him salary instead. This means that if an employee has put in less than 6 months of service an employer can terminate him at his will.

If, after an enquiry, it had come to the notice of employer that there is some misconduct on the part of the employee, then the employee is not entitled for notice or salary in lieu of notice.

An employee who is removed or dismissed from his service shall have the right of appeal before the Assistant Commissioner of Labour within 30 days from the date on which the order of removal or dismissal was communicated to him.

If the appellate authority finds that the employee has been removed or dismissed without reasonable cause or without proof of misconduct and if the employer does not agree to reinstate him, employee shall be entitled to compensation calculated at the rate of one month pay for every year of service. If the employee or the employer is not satisfied with the order of appellate authority they can apply for a revision of the said order by the district judge.

Other states have passed similar acts for Shops and Commercial Establishments.

The Industrial Dispute Act 1947 also deals with the termination of employees. However this Act is not applicable in the case of the following employees:
a. Employees who are employed in managerial or administrative capacity
b. Employees who are employed in a supervisory capacity and whose monthly income exceeds Rs. 10,000/- per month.

As per this Act, if an eligible employee, who had been in continuous service for not less than 1 year, then the employer can terminate him only by following the below mentioned procedure:
a. The workman to be given 1 month notice in writing indicating the reasons for retrenchment/termination or one month salary instead of notice.
b. The workman has been paid at the time of retrenchment compensation equivalent to 15 days average pay for every completed year of service.
c. Notice in the prescribed manner is served on the appropriate government authority.

In spite of what is discussed above, if there is any employment contract between the employer and employee, which provides better conditions in favour of the employee, then the same will have applicability over and above the statutory provisions mentioned before.

Section 25 of the Companies Act, 1956, provides for formation of companies for the purpose of promoting Commerce, Art, Religion, Science, Charity and other useful objects. Many people form charitable organisations in the form of companies also. In the case of companies, the statutory compliance is much more than compared to trust or a society. Hence the chances of mismanagement are less. Normally chambers of commerce and trade bodies are registered under this section. This is not a very popular form of charitable organization for common people.

Section 25 company is more stable than a society but less rigid than a trust Amendments to the objects can be made by invoking the provisions of the Companies Act, 1956.

People form a society when the members are more and the control and management is broader based. Here it is comparatively easy to change the powers and objects of the society. The managing committee is normally elected and hence a society is more democratic in its form and spirit.

The main disadvantage of the society is that it is more decentralised and more likely to have lack of stability. There is likelihood that the management may fall into the hands of undesirable persons. However the Registrars under the societies Act have sufficient powers to effectively control the society. The statutory compliances and governmental interference is more compared to a trust and less compared to a society.

The process of registering a trust is comparatively easier than registering a society or a company under section 25 of the Companies Act, 1956. The control of the trust is in the hands of a few trustees who are normally nominated and not elected. Further the number of trustees is limited. The founder of the trust, if he wishes can become a trustee also. A trust is more suited where a few people can contribute more money for charitable purposes and want a tight control on the organisation. The statutory regulations and interference is less compared to a society or a company.

The disadvantage of the trust is that the trustees cannot change easily the objects of the trust or their powers; it can be done only with the approval of the court. Further there is less democratic spirit in a trust and the same is more centralised.

The Public Gambling Act, 1867 prohibits offline gambling. Betting as such is illegal business conducted in India. Hence online betting is also not legal.
Definition of Gambling
According to List II Entry 34 of the Constitution of India-
“‘gambling’ includes any activity or undertaking whose determination is controlled or influenced by chance or accident and any activity or undertaking which is entered into or undertaken with consciousness of the risk of winning or losing (eg, prize competitions, a wagering contract) … where there is no actual transfer of goods but only payment or receipt of the difference according to the market price, which varies from the contract price.”
In short Gambling is an activity where chance decides the result more than the skill. Hence cricket betting is also a gambling and hence illegal. No bank will support such a financial activity Horse racing is the only legalized gambling sport in India.
Though there are no specific laws which prohibit internet cricket betting/predictions, a wider interpretation of the existing provisions of the IT Act, 2000 will certainly prohibit the same.
Section 67 of the Information Technology Act 2000 is extracted below
Section 67: Publishing of information which is obscene in electronic form:

Whoever publishes or transmits or causes to be published in the electronic form, any material which is lascivious or appeals to the prurient interest or if its effect is such as to tend to deprave and corrupt persons who are likely, having regard to all relevant circumstances, to read, see or hear the matter contained or embodied in it, shall be punished on first conviction with imprisonment of either description for a term which may extend to five years and with fine which may extend to one lakh rupees and in the event of a second or subsequent conviction with imprisonment of either description for a term which may extend to ten years and also with fine which may extend to two lakh rupees.

Quoted below is the rule 3 of the Information Technology (Intermediaries guidelines) Rules, 2011.

Due diligence to he observed by intermediary — The intermediary shall observe following due diligence while discharging his duties, namely: —
(1) The intermediary shall publish the rules and regulations, privacy policy and user agreement for access-or usage of the intermediary’s computer resource by any person.
(2) Such rules and regulations, terms and conditions or user agreement shall inform the users of computer resource not to host, display, upload, modify, publish, transmit, update or share any information that —
(a) belongs to another person and to which the user does not have any right to;
(b) is grossly harmful, harassing, blasphemous defamatory, obscene, pornographic, paedophilic, libellous, invasive of another’s privacy, hateful, or racially, ethnically objectionable, disparaging, relating or encouraging money laundering or gambling, or otherwise unlawful in any manner whatever;
(c) harm minors in any way;
(d) infringes any patent, trademark, copyright or other proprietary rights;
(e) violates any law for the time being in force;
(f) deceives or misleads the addressee about the origin of such messages or communicates any information which is grossly offensive or menacing in nature;
(g) impersonate another person;

Hence an Internet Service Provider can definitely block a gambling site based on the above guidelines. A broad interpretation of the above provision will certainly make online cricket betting an offence and hence illegal.

1) Procedure to obtain a trademark: An applicant who wishes to register a Trade Mark needs to make an application. The application will be allotted a Number. Thereafter the application is examined and an examination report will be dispatched to the applicant.

During examination if the application is accepted, then the same is published in the Trade Mark journal and it will await opposition from public. If there is no opposition the application will be accepted and Trade Mark will be registered in the name of the applicant. If there is opposition to the journal publication, the hearing officers will conduct a hearing and they will look into the evidence produced by the applicant and the opponent. If the application is allowed then the Trade Mark will be registered in favor of the applicant. However if opposition is allowed and the application is refused the applicant either go for a review, before the hearing officer of file an appeal before the Intellectual Property Appellate tribunal.

After the initial examination if the registrar objects the application, then he can call for the hearing of the party and based on the outcome of the hearing it can be accepted or refused. If accepted the same will be sent for journal publication and if refused the applicant can approach the Intellectual Property Appellate tribunal.

2) General Facts about Trade Marks:
a) The head office of Trade Marks registry is at Mumbai. The branch offices are at Delhi, Kolkota, Ahmedabad and Chennai.

b) At present the Trade Marks can be registered for services in addition to goods. Further collective marks owned by the association of persons can also be registered.

c) The legal requirements to register the Trade Marks under the Trade Marks Act 1999 are:
i) The mark should be capable of representing graphically.
ii) It should be capable of distinguishing the goods/services of one undertaking from those of others.

d) Trade Marks are not given on a geographical name.

e) The Trade Mark Act 1999 classifies goods and services according to the International Classification of Goods and Services; the same is produced in Schedule 4 of the Act.

3) Benefits of Registering the Trade Marks:
a) The registered owner has the exclusive right to the use of the registered Trade Mark indicated by the symbol (R)
b) He is entitled to seek relief of Infringement in case anybody infringes his trade mark.

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.

Section 13 B of Hindu Marriage Act, 1955 provides for the relief of divorce by mutual consent between a Hindu wife and husband. The conditions for filing of this petition are:

1) A Petition of this nature can be filed only after 1 year from the date of marriage.
2) Parties should have been living separately for a period of 1 year or more.

Once the Petition is filed, parties have to wait for 6 months before the court can take up further proceedings in the matter. The period of 6 months cannot be dispensed by the family court or High court. The same can be done only by the Supreme Court. Court needs to give the decision on the matter before 18 months from the date of filing of the petition.

The Petition for a mutual consent divorce needs to be filed before the jurisdictional family court where:
a. The parties got married or
b. The parties last resided together as husband and wife.
The presence of both parties will be required at the time of filing and some other important hearings.

The basic documents required for the process includes:
1) Marriage photo.
2) Marriage Invitation card.
3) Marriage Certificate.
4) Address Proof of parties.

On an average it will take about 6-8 months for the conclusion of the mutual consent divorce process.