Mentoassociates.com – Legal Articles

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.

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) THE EMPLOYEES PROVIDENT FUND AND MISCELLANEOUS PROVISION ACT, 1952.
It applies to every establishment which is a factory engaged in any industry specified in Schedule-I of the act and in which 20 or more persons are employed. The Central Government by notification can bring in any other establishments employing 20 or more persons or less than 20 persons under the purview of this act.
FACTORY means any premises where a manufacturing process is being carried on with or without the aid of power.
The Central Government can add any other industry under Schedule-I for the purposes of this Act.
This act shall not apply to any establishment registered under the Co-operative Societies Act, 1912 or under any other Co-operative Society laws, employing less than 50 persons, and working without the aid of power.
The appropriate government may by notification in official gazette exempt any establishment from the operation of all or any of the provision of any scheme under this act.
(2) THE MATERNITY BENEFIT ACT, 1961
This act applies to every establishment being a factory, mine, plantation (private as well as Government) and to every establishment wherein persons are employed for exhibition of equestrian, acrobatic and other performance.

This Act also applies to every shop or establishment in which 10 or more persons are employed.

Nothing contained in this Act shall apply to any factory or other establishment to which the provisions of ESI act, 1948 apply.

The appropriate Government has powers to exempt an establishment or classes of establishment from the provisions of this act or any rule there under.

(3) THE CHILD LABOUR (PROHIBITION AND REGULATION) ACT 1986
The occupations and processes from which children are prohibited to be employed or permitted to work are listed in Part A and B of the Schedule under this Act.

The Part 3 of this Act will apply to those establishments where the occupation and processes mentioned in schedule to the Act are not applicable.

(4) THE PAYMENT OF WAGES ACT, 1936
This Act applies to persons employed in any factory (as defined under Factories Act, 1948) and to persons employed upon any railway directly or through a sub-contractor. This act also applies to persons employed in an industrial or other establishment specified in section 2 clause (ii) sub clauses a to g of the act.

This Act is applicable only to persons whose wages do not exceed Rs.6500/- per month.

(5) THE INDUSTRIAL DISPUTES ACT, 1947
Under this act “Industry” means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft or industrial occupation or avocation of workmen.

“Industrial dispute” means any dispute or difference between employers and employers, or between employers and workmen, or between workmen and workmen, which is connected with the employment or non-employment or the terms of employment or with the conditions of labour, of any person.

“Industrial Establishment or Undertaking” means an establishment or undertaking in which any industry is carried on.

“ Workman” means any person ( including an apprentice) employed in any industry to do manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person:-

i) who is subject to the Air Force Act, 1950 or the Army Act, 1950 , or the Navy Act., 1957; or
ii) who is employed in the police service or as an officer or other employee of a prison, or
iii) who is employed mainly in a managerial or administrative capacity, or
iv) who, being employed in a supervisory capacity, draws wages exceeding one thousand six hundred rupees per month or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.

(6) THE EQUAL RENUMERATION ACT, 1976
The term employer under this act has the meaning assigned to it in Sec.2 (f) of the payment Gratuity Act, 1972.

(7) FACTORIES ACT, 1948
1) Under this act “Factory” means any premises where
i) 10 or more workers are working or were working on any day of the preceding 12 months and in any part of which a manufacturing process is being carried on with the aid of power.

ii) where 20 or more workers are working or were working on any day of the preceding 12 months and where a manufacturing process is being carried on with out the aid of the power.

2) The term factory does not include a mine, a mobile unit belonging to the armed forces of the Union, the railway running shed or a hotel, restaurant or a eating place.

(8) WORKMEN’S COMPENSATION ACT 1923
Under this act workman is defined under section 2 (n). Workman is any person who is:
i) a railway servant, as defined in Sec (3) of Indian Railways Act, not permanently employed and not employed in any capacity as specified in Schedule 2.

ii) a master seaman, or other member of the crew of the ship,
iii) a captain or other member of the crew of an aircraft.
iv) a person, recruited as a driver, helper, mechanic, cleaner or any other capacity in connection with a motor vehicle.
v) a person recruited for a work abroad by a company and who is employed outside India in any such capacity as specified in Schedule 2 and the ship, aircraft or motor vehicle or the company is registered in India.
vi) a person employed in any capacity as specified in Schedule 2 of the act but does not include any person working as a member of the armed forces of the Union.
vii) The Schedule 2 of the act gives a list of persons who are workmen as per the act.

(9)THE EMPLOYMENT EXCHANGES (COMPULSORY NOTIFICATION OF VACANCIES) ACT 1959:

This act applies to all public sector establishments and private sector establishments where 25 or more persons are employed. Agriculture, horticulture, domestic service and skilled office work etc do not come under the purview of this act.

(10) THE PAYMENT OF BONUS ACT 1965

This act applies to every factory and every other establishment in which 20 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 even if the number of persons employed is below 20.

In certain cases the act will be applicable to establishments in public sector .If a public sector establishment derives income by the sale of any goods produced or renders any services and if the said income is not less than 20% of the gross income of the establishment for that year, then provisions of the act will apply to that establishment.

This act is not applicable for the following employees:-

1. Employees of LIC.

2. Seamen.

3. Employees registered under any scheme under Dock Workers (Regulation of Employment) Act 1948.

4. Employees of Central or State Government industries.

5. Employees of Indian Red Cross Society or University or educational Institutions or non profit Institutions.

6. Employees of RBI.

7. Employees of Industrial Finance Corporation of India, State financial corporation, Deposit Insurance Corporation, NABARD, UTI, IDBI, SIDBI, NHB.

8. Employees of Inland Water transport establishments operating on routes passing through other countries.

(11) THE PAYMENT OF GRATUITY ACT, 1972

This act applies to every factory, mine, oil field, plantation, port, Railway Company, shops and establishment where 10 or more persons are employed.

12) THE MINIMUM WAGES ACT, 1958

The Part I and II of the Schedule attached to this Act lists the employments for which the appropriate government can fix the minimum wages payable to employees.

(13) THE KARNATAKA SHOPS AND COMMERCIAL ESTABLISHMENTS ACT, 1961

This Act applies for Shops and Commercial establishments in the State of Karnataka.

Commercial Establishment means a commercial or trading or banking or insurance establishment, an establishment or administrative service in which persons employed or mainly engaged in office work, a hotel, restaurant, boarding or eating house, a cafe or any other refreshment house, a theatre or any other place of public amusement or entertainment and includes such establishments as the State Government may by notification declare to be a commercial establishment for the purposes of this Act.

Shop means any premises where any trade or business is carried on or where services are rendered to customers and includes offices, storerooms, godowns, or warehouses, whether in the same premises or otherwise, used in connection with such trade or business, but does not include a commercial establishment or a shop attached to a factory where the persons employed in the shop fall within the scope of the Factories Act, 1948.

(14) THE EMPLOYEES STATE INSURANCE ACT, 1948:

This act shall apply to all factories (including Government factories) other than seasonal factories.

“Factory” means any premises including the precincts thereof:

i) whereon 10 or more persons are employed  or were employed for wages on any day of the preceding 12 months and in any part of which a manufacturing process is being carried on with the aid of power or is so ordinarily  carried on, or.

ii) Wherein 20 or more persons are employed or were employed for wages on any day of the preceding 12 months and in any part of which a manufacturing process is being carried on with the aid of power or is ordinarily so carried on, but does not include a mine or railway running shed.

The appropriate government has the power to exempt factory or establishment or class of factories or establishments or person or class of persons from the operation of the act.

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.