Year 2013 witnessed many events which may rightly be called the watershed events in post-independence India. The victory of Aam Aadmi Party at the recently concluded assembly elections in Delhi is one such incident amongst many this year. Political parties were ordered to be accountable to the people under the Right to Information Act (RTI), which of course for obvious reasons did not go down well with them, irrespective of the ideological shade they represent. Lalu Prasad Yadav had not only to go to jail but also had to lose his parliamentary seat because of the Supreme Court ruling that no incumbent legislator can retain his seat if convicted in a court of law, despite frantic efforts from the ruling dispensation to salvage the situation through an ordinance which was ultimately torn and trashed by none other than Congress Vice President Rahul Gandhi. Bollywood actor Sanjay Dutt had to finally go to jail despite his battery of lawyers and stardom, with many of stalwarts urging for forgiveness for him as he had been “through a lot”.
On the economic front, FII inflows crossed a record Rs 1 lakh crore; RBI data showed highest debt-to-reserve ratio in decade; telecom subscriber base reached 90.3 crores by June; Internet users hit 74 million, the third largest user base in the world; while the World Bank was being urged to scrap ‘Doing Business’ index — India was ranked 134th in that list.
With sexual crimes against women coming more to light post-Nirbhaya incident and with the pitch against it getting shriller by the day. And, last but not the least, the downward spiral of UPA II continues as it received a very rude shock in the assembly elections. So, it can be said that 2013 has been an eventful year. This story is the story of developments in the law and policy space in this year trying to enumerate not just the what and why of the various developments, but also understanding the meaning it holds for the future.
With Parliament largely remaining dysfunctional so much so that Prime Minister Manmohan Singh had to urge the political parties to allow it to function; but it is remarkable that despite ‘ideological’ deadlocks continuing, parties still could legislate some important pieces of legislation which will have long-term impact on the nation.
The headlines read: ‘LOK SABHA PASSES LOKPAL BILL, ANNA ENDS FAST’. The same bill, which was trashed by the same ‘Gandhian’ in February 2013, has been hailed by the same person in December 2013. One wonders what has happened that has brought about this change of heart regarding the anti-corruption legislation which was earlier described as the “Jokepal”. Only time will tell as to how and why the Bill got suddenly enacted within a few days of the fast unto death of Hazare while previously many such fasts failed to cut much ice with the politicos. But one thing is ensured that now India will become corruption free!
The Law conferences circuit has been given a new boost with the legislation of all new Companies Act, 2013. It has given the conference organisers worth their salt, unprecedented opportunity to hold conferences, seminars, summits to understand the implications of the new legislations. Especially when the Ministry of Corporate Affairs (MCA) has chosen to notify only 98 sections from the new Act out of 470 odd sections and allowing rest of the provisions of the old Act to remain in force. With a MCA circular clarifying that the sections of the old Act, that correspond to those 98 sections, will cease to have effect leaving the corporates and their legal advisors to their own devices to figure out as to which all those corresponding provisions are!
After much dilly dally, the Parliament finally gave a go-ahead to the abovenamed Authority which seeks to provide for its establishment to promote old age income security by establishing, developing and regulating pension funds, to protect the interests of subscribers to schemes of pension funds and for matters connected therewith or incidental thereto.
With the enactment of Criminal Law (Amendment) Act 2013, which can also be stated to be the nation’s tribute to that hapless girl — the world knows her by her popular pseudonym ‘Nirbhaya’ — the victimization of girls or women at the hands of the sexual perverts like stalkers, acid throwers, sexual harassers and voyeurs will hopefully slowdown as it amply empowers the authorities to address such specific victimization.
Notwithstanding tight macro-economic situation and decelerating economic growth rate being slowed down by largely policy related issues. The UPA II doing very little to resolve policy deadlocks on the basis of which dignity of the citizen could beensured or restored or strengthened in true sense of the longer term. It went ahead with its pet project of guaranteeing food to the poor. A law that seeks ‘to provide for food and nutritional security in human life cycle approach, by ensuring access to adequate quantity of quality food at affordable prices to people to live a life with dignity and for matters connected therewith or incidental thereto’ despite chronic corruption remaining endemic to the executors of the scheme and the public distribution system remaining as leaky as it has always been.
According to Jairam Ramesh, the Union Minister for Rural Development, the new Land Acquisition Law will come into effect along with its rules by January 2014. With the legislation of the new law, now it can be hoped that the high handedness of the state in playing with the issue of just and fair compensation and also state-facilitated resettlement will ultimately do justice to the voiceless and marginalized millions who hitherto had continued to be deprived of their property without dignity.
The adoption of the Constitution of India was largely a declaration of the solemn resolve that India would no longer be guided by any historical tradition unless it conformed to the logic of humanism. And over the years Indian democracy and secularism have remained founded on the notion of consent as the foundation of all human interaction, be it electoral choices or religious beliefs or choice of a calling. The Supreme Court has discharged this solemn duty towards humanism on which all human rights/fundamental rights are based with requisite seriousness and expediency. But in delivering the judgment on Section 377 IPC, it somehow faltered on that democratic, secular and humanist promise held out by the Indian Constitution which seeks to ensure right of every individual to exercise a choice as long as it does not hurt the interest of the others. So, the decision of the apex court in this case has denied its own tenet that sky is the limit of our powers to reach injustice.
When the court is monitoring corruption cases, the CBI does not require the government’s sanction to prosecute senior civil servants, ruled the Supreme Court in major corruption cases like 2G telecom spectrum and coal block allocation scams. The specific issue before the apex court was the applicability of Section 6A of the Delhi Special Police Establishment Act, 1946, (DSPE Act) to an inquiry or investigation monitored by a constitutional court. To that the Supreme Court held that the approval of the central government is not necessary under Section 6A of the DSPE Act in a matter where inquiry/investigation into the crime under the Prevention of Corruption Act is being monitored by it.
The Supreme Court tirade against the ruling elite continued as it directed all the states to restrict the number of VIPs using the red beacon on their cars and give the facility only to heads of the executive, the legislature and the judiciary, and those holding constitutional posts. The concerned Bench also directed the states to amend the Motor Vehicle Rules to restrict the use of the red beacon and impose an exemplary fine on those who misused it.
The Arushi double murder mystery, which had caused a stir in the life of the nation, finally reached a logical conclusion in November. The CBI court held the parents of the girl guilty for her and their servant’s murder and sentenced them to life imprisonment. The case, that saw multiple twists and turns, has been speculated to be an instance of honour killing by the couple owing to their daughter’s ‘liaison’ with their 45-year–old servant Hemraj. Other important case which had shaken the conscience of the nation, the Nirbhaya case, also achieved conclusion of trial with all the four adult accused being given death penalty for the heinous crime.
While in July, the Supreme Court went on to quash the National Eligibility cum Entrance Test (NEET) for admission in medical colleges. The NEET, a single entrance-cum-eligibility test for admission in all medical colleges in India has been done away with on the ground of lack of jurisdiction (powers) of the Medical Council of India to conduct single entrance examination and force it on government and private medical colleges. In October, the Delhi High Court questioned the power of the All India Council for Technical Education (AICTE) to conduct entrance examinations for admission to business schools, and quashed the one conducted in September. AICTE, the Court held, did not have the authority to regulate MBA courses as they didn’t fall under “technical education” as defined in the AICTE Act.
In cases wherein preliminary inquiry ends in closing of the complaint, a copy of the entry of such closure must be supplied to the first informant forthwith and not laterthan a week. It must also disclose reasons in brief for closing the complaint. The Supreme Court further held that the police officer cannot avoid his duty of registering offence, if cognizable offence is disclosed. Action must be taken against officers who do not register FIR if the information received by him/her discloses a cognizable offence. The scope of preliminary inquiry is not to verify the information but to ascertain whether it reveals any cognizable offence.
While on the one hand, the Supreme Court refused to give patent law protection to Novartis’ Glivec in April on the grounds that it is not a new medicine, but an amended version of a known compound, hence it was a case of evergreening which is not permissible. The Supreme Court said Glivec does not satisfy a patent’s “novelty” requirement as per the Indian Patent Law. On the other hand, the Intellectual Property Appellate Board (IPAB) upheld the grant of compulsory licence (CL) to the Hyderabad based NatcoPharma Limited, a generic drug maker, to produce and market Nexavar, a patented cancer drug of multinational pharma major Bayer Corporation. Thereby determination of patent jurisprudence was arrived at.
The Supreme Court, while disagreeing with the arguments of the Maharashtra government, allowed the dance girls from Mumbai bars to dance to earn their livelihood through such performing acts. The bench reasoned that we are unable to accept the presumption that the enjoyment of the same kind of entertainment by the upper classes leads only to mere enjoyment and in the case of poor classes, it would lead to immorality, decadence and depravity. Morality and depravity cannot be pigeon-holed by degrees depending upon the classes of the audience. As the Court found the approach of the state government in barring girls from dancing in bars and restaurants but interestingly allowing it in hotels with a rating of three stars or above as discriminatory
While ordering Kolkata-based AMRI hospital to pay Rs 5.96 crore for medical negligence, the Supreme Court set a new benchmark for the determination of compensation in the cases of medical negligence.
A Bench of the Supreme Court in September held that the Aadhaar card should not be mandatory for essential services such as gas connection, vehicle registration, scholarships, marriage registration, salaries and provident fund. And in October, the Supreme Court rejected the Centre’s plea to modify its order.
Hundred per cent FDI in the telecom sector, hiking it from the existing 74% while permitting more foreign money into thedefence sector subject to certain conditions. Foreign firms have also been allowed to invest up to 26% in the defence sector subject to conditions as to clearance procedure. The FDI in four areas — gas refineries, commodity exchanges, power trading and stock exchanges — have been allowed through the FIPB route. The government also approved FDI of up to 49% through automatic route in insurance and up to 100% in asset reconstruction companies. The Union Cabinet also eased investment rules for the retail sector as well to make Indian retail sector more attractive by expanding the definition of micro, small and medium enterprises (MSME) by allowing retailers to procure from them even if they have exceeded total investment of $2 million in plant and machinery. Besides 50% investment in backend infrastructure will be “restricted” only to the first tranche of $100 millon while subsequent investments into backend will be decided by the retailer. The government also redefined the term ‘control’ for such purposes.
The Reserve Bank of India released final guidelines for issuing new bank licences paving the way for corporate houses to enter into the banking sector. The RBI allowed applications for new bank licences till July 1, 2013, and did not exclude companies from any specific industry from applying for a new bank licence. Entities/groups in the private sector, entities in the public sector and non-banking financial companies (NBFCs) have been made eligible to set up a bank through a wholly owned non-operative financial holding company. The guidelines sets 49% cap on foreign holding in new banks for five years and minimum paid-up equity capital is Rs 500 crores.
SEBI Invested with powers to arrest, search and seizure: Securities Laws Amendment Ordinance to provide the regulator with the teeth to deal more effectively with corporate fraud situations. The ordinance interalia allows SEBI to pass orders like search and seizure, attachment of properties, arrest and detention of defaulters and pass disgorgement directions to recover the wrongful gains made in contravention of laws.
Put and Call options allowed: SEBI allowed for the provision of preferential clauses like “right of first refusal, tag-along and drag-along” in their shared agreements. The changes were much sought by the firms dabbling in mergers and acquisitions. These changes will help boosting the interest of foreign investors, who tend to prefer such clauses in their deals.
Share Buyback norms tightened: To safeguard the interests of public shareholders, SEBI board made it mandatory for the companies to buyback at least 50% of their repurchase offers. SEBI also added a clause that 50% of earmarked funds for buyback is utilised by the company and 25% is kept in escrow account. Companies would have to complete their buyback offers within six months. Along with that, SEBI also approved Chandrasekhar Committee’s recommendations to club various classes of foreign investors into a new category i.e., the FIIs and QFIs have been merged to form ‘Foreign Portfolio Investor (FPI)’.
Corporate Disclosure Norms Tightened: In order to curb the large-scale discrepancies in mandatory disclosures by listed firms, SEBI tightened its disclosure regulations. As per the new norms, the companies would also have to provide the details of their promoters, directors and/or key management personnel who would be held responsible for ensuring compliance with the disclosure norms, while stock exchanges have been asked to publish these details on their websites in case of defaults. And SEBI has required the stock exchanges to put in place a stronger mechanism with additional manpower to monitor adequacy and accuracy of such disclosures.
The space being less to capture the entire spectrum of changes in the law and policy domain in 2013, all in all the effort is to provide a quick view of the significant developments. The developments relating to competition law, changes regarding aviation and power sector besides other industrial sectors have not been included. But this story is believed to provide a reasonable view of the changes.
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