Legislative and Regulatory Update

You now have the option of customizing your manupatra round-up. This means that you get updates on the areas of interest that you select. You may change your preferences at any time you wish to. If you do not customize your round up you will continue to get the updates on all areas

 

To customize your round-up now click here.

_____________________________________________________________________

India Centric Online Legal & Business Database

Bringing forth new efficiency and unparalleled results to research efforts.

In This Issue

[No.167]

 August 20, 2006
Supreme Court
High Courts
IRDA
RBI
SEBI
International Cases & News

To keep you informed about the latest Legislative and Regulatory information manupatra.com publishes this e-roundup highlighting the recent changes brought about by the Notifications/Acts/Bills /Ordinances etc.

About manupatra.com

http://www.manupatra.com/ provides comprehensive and easy to use legal and related information over the Internet. Our database covers Central Laws, Judgments of Supreme Court and High Court (full text of the judgments from 1950 onwards ), Orders of Tribunals, Bills, Notifications, Circulars and more

Key features of manupatra are

Content is derived from reliable primary and secondary sources
Database is updated on a daily basis
Electronic Ready Reckoner to view the judgments under a particular section of an Act / Subject
Powerful search engine with user friendly interfaces
Search in any one court/year or multiple courts/year
Hyper-linking of documents

Updated modules on WTO, Anti Dumping, Arbitration, Investment Destinations Abroad, Capital Markets, Taxation, Environment, Cyber & IT Laws, IPR, Corporate Laws, Industrial Policies, Foreign Trade, Forex & Banking and more

 

 

For subscription to manupatra.com or for more details please log onto http://www.manupatra.com/ or call us at 0120 2531811 or send an email to : contact@manupatra.com

If at any stage you wish to stop receiving the e-roundup please click here to unsubscribe.

 

 

Supreme Court

  • Anand Regional Co-op. Oil Seedsgrowers Union Ltd v. Shaileshkumar Harshadbhai Shah

Respondent was working as an Assistant Executive with the Appellant Cooperative Society. On an allegation that he had committed misconduct, a disciplinary proceeding was initiated against him and he was found guilty of the alleged misconduct. Punishment of dismissal from service was imposed upon him. An industrial dispute was raised before the labour court, which ruled that the punishment imposed on the concerned workman was excessive or exorbitant. The labour court directed that the respondent be reinstated with 25% backwages. A writ petition was filed against this by the appellant and the High Court ruled that the labour court did not commit any illegality in passing the award in question and, thus, no interference therewith was called for and hence the present appeal. The appellant contended that in view of the nature of duties performed by the Respondent, he does not fall within the definition of 'workman' as contained in Section 2(s) of the Industrial Disputes Act, 1947 and that the labour court committed a manifest error in exceeding its jurisdiction under Section 11A of the Act in interfering with the quantum of punishment. Held, industrial courts do not interfere with the quantum of punishment unless there is sufficient reason to warrant interference. In view of the feet that the First Respondent succeeded in the labour court and the High Court, the interest of justice would be subserved if the award of the labour court as affirmed by the High Court is substituted by a direction that the First Respondent shall also be given the benefit of voluntary retirement scheme from the month in which the other workmen were given the benefit thereof. Appeal allowed in part.

  • Arun Nivalaji More V. State of Maharashtra

The appellant while working as a licensed commission vendor in the catering unit at Bhusawal Railway Station got absented from duty and reported back for work after more than two months. He gave an application giving reasons for his absence from duty. In this application, he stated that he had gone home on account of illness of his wife and subsequently he was arrested by police in connection with some criminal case and after being released on bail he had reported for duty. An enquiry was conducted into the matter. Upon enquiry, it was found that the appellant was accused of an offence under Section 302 IPC and released on bail. His licence was therefore cancelled. Upon serving the notice of termination of licence to the appellant, the appellant entered the Railway office and stabbed an officer killing him. The appellant, in his statement under Section 313 Cr.P.C., denied to have inflicted any knife blow upon the deceased. He was sentenced to 7 years rigorous imprisonment by the Sessions Judge under Section 304 Part I IPC against which an appeal was preferred. The High Court dismissed the appeal and altered his conviction under Section 302 and sentenced him to life imprisonment against which the present appeal lies. Held, the offence committed by the appellant is under Section 302 IPC and not under Section 304 Part I IPC as held by the learned Additional Sessions Judge. The High Court was therefore perfectly correct in allowing the appeal filed by the State and altering the conviction of the appellant from Section 304 Part I IPC to that under Section 302 IPC. Appeal dismissed

  • Atyant Pichhara Barg Chhatra Sangh and Anr v. Jharkhand State Vaishya Federation and Ors

This appeal raises important questions of law with respect to reservation in professional educational institutions for the Extremely Backward Classes in the State of Jharkhand. The State of Jharkhand had alloted 73% reservation for appointments in Government services by adopting the Bihar (Scheduled Castes, Scheduled Tribes and Backward Classes) Reservation Act with certain modifications vide notification. Similarly a notification specifying reservations in professional educational institutions was issued by the Government of Jharkhand. Later, the State of Jharkhand issued notification superseding earlier notifications whereby quotas were reduced to 50% from 73% and a division was made between the Backward and Extremely Backward Classes in consonance with a High Court order. This action of the government was challenged by the appellants. The respondent State argued that the Central Government adopted the policy of clubbing the Extremely Backward Classes with the Backward Classes and the same was adopted by the State of Jharkhand. Held, it does not justify Jharkhand following the same policy. Jharkhand Government should look into the facts and circumstances that are peculiar to it by appointing an Expert Commission or a Body as has been provided for in the Mandal Commission's case which can inquire into the representations/complaints made over under inclusion and over-inclusion and make binding recommendations. Matter therefore remitted to the State Government for undertaking a deep study and research by a Special Committee of Experts.

High Courts

Madras

  • B. Nageswara Rao vs. The Commandant, Disciplinary Authority, Central Industrial Security Force, N.L.C. Unit

The petitioner was dismissed from service on allegations of misconduct and misbehaviour while on duty by the first respondent. An enquiry was conducted into the matter and the petitioner was found guilty of charges raised against him by the enquiry officer. The decision of the first respondent was confirmed by the second and third respondent. Upon appeal by the petitioner, the Appellate Authority confirmed the decision of the Disciplinary Authority. A revision was preferred against the order of the Appellate Authority which was also turned down and hence the present petition. Petitioner contended that Rule 34 (5) of CISF Rules, providing for a Defence Assistant to defend the case effectively for the petitioner, was not adhered to by the respondents which in turn vitiated the entire proceeding. Therefore the impugned order of removal was violative of Articles 14, 16 and 21 of Constitution. The petitioner also contended that the punishment imposed on him was grossly disproportionate to the charges framed. Held, impugned orders suffer from procedural irregularity, perversity and with noncompliance of principles of natural justice as Defence Assistant was not provided to the petitioner as contemplated under Rule 34(5) of CISF Rules and hence the entire proceeding was vitiated and have to be interfered with. Allegations, even if proved, do not call for any severe punishment much less removal of petitioner from service. The impugned orders were therefore quashed and the writ petition was allowed.

  • The General Secretary, ICF Labour Union/IR vs. Government of India rep. by the Secretary, Ministry of Labour

In the present case, a dispute was raised under Section 2(k) of the Industrial Disputes Act, 1947 by the petitioner Union challenging transfer of an employee “G.Sridhar” before the Assistant Labour Commissioner. Conciliation proceedings initiated before the Assistant Labour Commissioner failed. The matter was then placed before the Ministry of Labour, the first respondent, which refused to refer the issue relating to the transfer of employee in question for adjudication on the ground that the transfer of an employee is the prerogative right of the management. The present writ petition is filed under Article 226 of Constitution to quash the said order of the first respondent and to refer the issue relating to the transfer of the employee in question for adjudication to the Central Government Industrial Tribunal-cum-Labour Court, Chennai. The petitioner Union contended that the first respondent cannot pre-judge the issue and cannot pass the impugned order refusing to refer the matter to adjudication proceedings in labour court. Power under Section 10(1) of Industrial Disputes Act nowhere contemplates deciding of dispute on merits by first respondent and it is only administrative power. Therefore, first respondent bound to refer matter for adjudication. The contention raised by respondents 2 and 3 was that the transfer was only based on administrative interest and that the same was not with mala fide intention. Held, first respondent bound to refer disputes raised by petitioners, as disputes cannot be adjudicated by first respondent on merits. Whether petitioners are entitled to adjudication of disputes in their favour or not is to be decided only by the Industrial Tribunal and not by the first respondent. Impugned order was therefore set aside and writ allowed.

Karnataka

  • Vikrant Tyres Limited represented by its General Manager (Personnel) vs. Mysore Division Hotel Worker's Union represented by its President

The petitioner company is engaged in the manufacture of tyres and has a canteen. The canteen was run and managed by a contractor who was murdered outside the factory gate. After the murder of the contractor, some of the workmen employed by the contractor were arrested. Thereafter, the contract with the contractor was terminated by the petitioner and workmen engaged by the contractor were barred from entering into the factory premises. The petitioner claimed that there was no relationship of ‘master and servant’ between the petitioner and the said workmen. The workmen raised a dispute alleging illegal termination and sought reinstatement in the petitioner’s canteen apart from other benefits. The dispute was referred to the labour court for adjudication which passed an award directing reinstatement of workmen of the canteen contractor in the services of the petitioner company with 50 per cent back-wages and with continuity of service. Aggrieved by the said award, the present petition is filed by the petitioner company. Petitioner contended that labour court erred in holding that an employer - employee relationship existed between the workmen of the canteen contractor and the petitioner. By providing facilities to the workmen of the canteen contractor, the petitioner was merely complying with statutory duties under enactments; that by itself do not bring about employer-employee relationship as is clear from agreement clauses. The respondents on the other hand contended that there is a statutory obligation on the part of the petitioner company to maintain the canteen under Section 46 of Factories Act. A reading of Section 2(1) of Factories Act along with Rules 93 and 99 of Factories Rules clearly indicate that the occupier is responsible for the canteen and its workers — Held, in the instant case, on admitted facts, since workmen are employees of statutory canteen, they fall under the category of employees. Therefore having regard to the facts and circumstances of the case, held workmen to be employees of the petitioner management. Petition was therefore dismissed.

Insurance Regulatory and Development Authority

  • Draft revised File & Use Guidelines for General Insurance Products

Notice No. IRDA/GI/Detariff/06 Dated 09.08.2006: The Insurance Regulatory and Development Authority vide the above notification notifies the draft outlining the revised “File & Use guidelines” for general insurance products for compliance by general insurers. It outlines the various steps to be taken by the insurers in the proposed de-tariffied regime to ensure that the products developed by them comply with the File & Use guidelines. The guidelines takes note of the present move away from tariffs and the comments of insurers on the earlier draft of these File & Use guidelines. Accordingly, these guidelines supersede all previously issued guidelines and are issued under the authority of Section 14(2)(i) of the IRDA Act, 1999 and section 34(1)(c) of the Insurance Act, 1938. As per these guidelines, an insurance product also includes a plan of insurance designed to meet the requirements of a client or class of clients. Also, products which are currently tariff but which will be underwritten with modified rates after the tariffs are removed should be filed under these guidelines after 30 September 2006. These guidelines shall come into effect on 30 September 2006.

RBI

Press Release

  • Standard Chartered Bank authorised as Primary Dealer

Press Release No. 2006-2007/153 Dated 31.07.2006: The Reserve Bank of India vide the above notification notifies that “Standard Chartered Bank” has been authorised to undertake Primary Dealer business in government securities. The same is effective from August 01, 2006. Accordingly, the authorization given to Standard Chartered- UTI Securities India Private Limited as Primary Dealer is withdrawn. The Reserve Bank had announced in its Annual Policy Statement 2005-06 that the permitted structure of Primary Dealership business would be expanded to include banks, which fulfill certain minimum eligibility criteria. Accordingly, guidelines have been issued to all Scheduled Commercial Banks (excluding RRBs), on eligibility conditions for undertaking Primary Dealership business departmentally.

  • RBI takes April 1 2005 as the base date for Variations in Monetary and Banking Data for 2005-06

Press Release No. 2006-2007/140 Dated 28.07.2006: It is notified herewith vide the above press release by the Reserve Bank of India that it has been decided to take April 1, 2005 as the base date for 2005-06 for calculation of variations of monetary and banking data on a financial year basis. The Reserve Bank publishes the data on monetary and banking aggregates and their variations on a fortnightly basis on alternate Fridays. Conventionally, variations in banking data for a particular financial year are in relation to the last reporting Friday of the previous financial year. Thus, variations during 2005-06 are conventionally calculated from March 18, 2005 which was the last reporting Friday of 2004-05 i.e., the previous financial year. This results in the incorporation of data for an additional fortnight in the variations in monetary and banking aggregates for 2005-06 in relation to the same aggregates for 2006-07. For meaningful comparison of variations in monetary/banking variables in 2006-07 with those of 2005-06 on a financial year basis, therefore, the Reserve Bank has decided to take April 1, 2005 as the base date for 2005-06.

SEBI

Mutual Fund

  • Filing of Annual Information Return to be filed by Mutual Funds

Circular No: SEBI/IMD/CIR No.8/73580/06 Dated 04.08.2006: The above circular has been issued by SEBI with reference to the Annual Information Return (AIR) required to be filed by Mutual Funds under Section 285 BA of the Income-tax Act. The said circular is issued with a view to protect the interests of investors in securities and to promote the development of, and to regulate the securities market. As per the said provisions, the trustees of Mutual Funds or such other person duly authorized by the trustees in this behalf have to report specified financial transactions in electronic media to Income Tax Department giving PAN of the transacting parties in an Annual Information Return (AIR). The Directorate of Income Tax (Systems) has stated that though the returns were filed as prescribed, there were several errors which were common to most mutual funds such as not mentioning PAN of several transacting parties, or mentioning invalid PAN, entering incomprehensible/incomplete names of transacting parties, incomplete postal addresses, wrong PIN codes, etc. SEBI therefore notifies that AIRs constitute an important source of information to Income Tax Department and, as such, it is imperative that the data furnished to them is complete and accurate in all respects. It is therefore advised to re-check the accuracy of the data furnished by offices dealing in Mutual Funds and ensure that all the data is correct and submit a Supplementary Information Report, if need be.
International Legal Cases and News

Cases

Civil

  • Ephraim Tekle, a minor, by and through his guardian ad litem, Lily Tekle v. United States of America; Garo Torossian; Keith Boden; Charles Mccalmont; Thomas Jankowski; David M. Hawkes, all agents and employees of the Internal Revenue Service

The plaintiff-appellant in the present case, a minor, by and through his mother and guardian ad litem filed a complaint against the defendants, seeking declaratory relief and damages under the Federal Tort Claims Act and for alleged civil rights violations. The complaint stemmed from an incident at the plaintiff’s home when federal agents came to arrest the plaintiff’s parents on suspicion of narcotics trafficking and tax-related offenses. The agents handcuffed the minor plaintiff and kept their guns pointed on the minor throughout the incident even though he was not a suspect in the case. The trial court granted summary judgment in favor of the defendants on the basis that they did not violate the plaintiff’s constitutional rights and that, even if they did, they were entitled to qualified immunity. The present appeal is directed against the findings of the trial court. Held, the proposition that police may not inflict pain on non-suspects detained during a search, in the absence of any law enforcement reason, should be so obvious to reasonable officers that qualified immunity cannot shield them. A policeman ought to know that he is not constitutionally entitled to hurt people for no reason. The judgement of the trial court was therefore reversed.

Criminal

  • Richard Adams Hovey v. Robert L. Ayers, JR Acting Warden, California State Prison at San Quentin

The petitioner-appellant, convicted for kidnapping and murdering an 8-year-old girl, seeks relief from his conviction and sentence of death for first degree murder during the course of the kidnapping. The petitioner contended that his trial had been inundated with errors as he was denied due process right to be present at a mid-trial hearing and that there was ineffective assistance by the Counsel at the guilt and penalty phases. The petitioner contended that the Counsel failed to investigate his mental condition at the time of the murder and adequately prepare his penalty-phase expert witness. The trial court ruled in favour of the respondents and hence the present appeal. The United States Court of Appeals for the Ninth Circuit held that the district court correctly rejected petitioner’s claims in holding that none of the alleged errors alone or cumulatively is sufficient to merit reversal of petitioner’s conviction. However, district court erred in concluding that deficient performance of Counsel during penalty phase did not prejudice petitioner’s trial. Therefore, judgement by trial court affirmed in part and reversed in part.

Environment

  • John R. Sand & Gravel Company V United States of America

The plaintiff–appellant leased a 158-acre tract of land in Metamora Township of Michigan for a period of fifty years in 1969 for the purpose of mining sand and gravel. The Metamora landfill, located adjacent to the plaintiff’s plant area in the leased property, came to be placed later on the National Priorities List pursuant to the Comprehensive Environmental Response Compensation and Liability Act of 1980(CERLA) due to hazardous waste buried in the landfill. The Environmental Protection Agency (“EPA”) started carrying out process for removal of the wastes at the leased property. The plaintiff filed a suit claiming compensation upon the defendant taking over the leasehold interest of the plaintiff in the property. Trial court ruled in favour of the defendants and held that the defendants were not liable to the plaintiff under the Fifth Amendment to the Constitution for the alleged taking over of plaintiff’s leasehold interest in the property in question. Held, because the plaintiff did not file the complaint within the six-year limitation period under 28 U.S.C. § 2501, the trial court lacked the jurisdiction to try the suit. Therefore, the decision of the trial court was vacated and case remanded to the trial court with instruction that it dismiss the plaintiff’s complaint.

Insurance

  • Unified Western Grocers, Inc.; Certified Grocers Of California, LTD.; Grocers Specialty Company; Alfred A. Plamann; Charles Pilliter; Daniel T. Bane; Robert M. Ling; David A. Woodward V. Twin City Fire Insurance Company, an Indiana Corporation

The question that arose in the present appeal before the United States Court of Appeals for the Ninth Circuit was whether, the Appellants, three related corporate entities and six officers and/or directors of these entities are entitled to insurance coverage for an underlying litigation brought by the bankruptcy trustee of a former subsidiary of the corporate entities. The district court granted summary judgment to the insurance company based on findings that the trustee’s complaint alleged only willful acts and sought only restitutionary relief uninsurable under California law. Held, the genuine issues of material fact still remain as to the resolution of the issues in question. Case therefore remanded to the district court for further factual development.

News

  • Extended detentions of airplanes plot suspects without charge allowed by British Judge

The Investigative Agency, Scotland Yard, was given five to seven more days to question and hold without charge 23 men currently in custody in connection with an alleged plot to bomb US planes leaving the UK for US destinations by a British Judge. The Terrorism Act of 2006 allows police to hold someone suspected of terrorist activity without charge for a maximum of 28 days from arrest.

  • Non-citizens working for US firms abroad cannot invoke civil rights law

A US Federal Appeals Court has ruled that a non-citizen cannot sue a US corporation for discrimination that allegedly occurred while he was working outside the US. The decision by the US Second Circuit Court of Appeals is significant because it means that non-citizens employed outside the country by US firms are not protected under equal rights provision of Section 1981 of US Code and also are not extended the scope of Title VII of 1964 Civil Rights Act. The case involved a black, Connecticut resident, who was deputed by his employer, AIG Insurance to work in South Africa temporarily and allegedly had discriminated against him on the basis of his race.

  • Way cleared for erasure of Ken Lay criminal record by Federal Judge

A US District Court Judge granted a request by a lawyer for former Enron CEO, Kenneth Lay, to supplant Lay's name in the court records with Lay's estate. The US probate law permits legal representative of an estate to appear on behalf of the estate. In the present case, Lay died before his sentencing date and therefore was not afforded an opportunity to exhaust the appeals process, and no final judgment has been issued. Without a final judgment entered against Lay, the court is expected to dismiss the indictment and the conviction because Lay's death renders the case moot.

  • Federal judge orders reporters to reveal source of Bonds leak

A US Federal District Court Judge ordered two reporters of San Francisco Chronicle, to reveal the source of leaked grand jury testimony they used as background for newspaper reports and a book they wrote about Major League Baseball player Barry Bonds and the steroid controversy involving the now-defunct BALCO Corporation. A separate grand jury has been convened to uncover the source of the leaked testimony transcripts. The Judge ruling in the motion to quash subpoenas by the two reporters held that as per the decision of the Supreme Court in Branzburg v. Hayes, no one may refuse to testify before a federal grand jury. The reporters had argued that the First Amendment protects the rights of journalists to protect their sources.

Disclaimer

(1) While all reasonable care has been taken to ensure that the information provided in the "round up" and on the website is fair and accurate the company and its promoters and employees shall not in any way be responsible for the consequences of any action taken on the basis of reliance upon the contents of this "round up".

(2) This is not a Spam mail. You have received this mail because you have either requested for it or someone must have suggested your name under our various referral programs. Since India has no anti-spamming law, we refer to the US directive, which states that a mail cannot be considered Spam if it contains the sender's contact information, which this mail does. In case this mail doesn't concern you, please unsubscribe from mailing list.

Feedback