Foreign cos are not bound to do CSR in India, says legal

expert Shardul Shroff

Inconsistency between rules and the actual Company Law
Foreign companies are not bound to undertake corporate social responsibility (CSR) activity in India, Shardul Shroff,
Managing Partner, Amarchand & Mangaldas, a leading law firm, has said.
This is even as the rules framed under the new company law extended the CSR provisions to foreign companies,
Shroff said at an event on Companies Act, organised by KPMG in association with Indo-Canada Business Chamber
here on Tuesday.
There is inconsistency between the rules and the main statute (Companies Act), which has mandated CSR spend by
certain companies, Shroff noted.
India is the only country in the world that has legislated CSR and required CSR spend equivalent to 2 percent of net
profit for certain companies. But there is no penalty if the provisions were not complied with.
Shroff highlighted that Section 135the provision in the new company law that deals with CSRapplies CSR only to
domestic companies.
Although the rules had extended it to foreign companies, this was prone to challenge as the main Act sought to cover
only domestic companies.
All the changes that are coming through the rules, which may affect the definition in some sense, are not lawful. If
ever challenged by a foreign company in court, then the Court would tend to uphold the challenge, Shroff said.
Rakesh Nangia, Managing Partner, Nangia & Co, a firm of chartered accountants, said the main Companies Act talks
only about Indian companies when it came to CSR.
On whether a branch office or a project office of a foreign company is authorised to do CSR, Nangia said it doesnt
look likely and they will have to get Reserve Bank of India (RBI) approval on this count
Nangia also said the wholly-owned subsidiaries of foreign companies can give money for charitable activities to only
those companies that are Foreign Contribution Regulation Act (FCRA) compliant.
We are advising our clients (foreign companies) to approach Home Ministry and get clearance or seek clarifications.
They should ensure that the entities to which they donate funds are FCRA compliant
US steps in to nip in bud Modi legal wrangle, says he enjoys
immunity
NEW YORK: Prime Minister Narendra Modi will have total immunity from legal proceedings in the US
that have been initiated by human rights activists, the Obama administration said on Friday even as the
Indian leader arrived in New York to a purported US court order pertaining to the 2002 Gujarat riots.

Radical Sikh activists who have been carrying out a legal campaign in US to shame the Indian government
for perceived human rights excesses attempted to embarrass Modi ahead of his arrival in New York by
initiating legal action, resulting in a court order seeking his response to the 2002 communal riots in
Gujarat. But the Obama administration stepped in to assure the visiting leader that he's safe from any
legal wrangle even as he landed in New York.

Senior Obama administration officials previewing the visit said in a teleconference that as a visiting head
of government, Modi enjoyed complete immunity for the duration of the visit not only from court
proceedings, but also from being personally served or handed court summons. "While we cannot
comment specifically on this lawsuit, I can tell you that as a general legal principle, sitting heads of
government enjoy immunity from suits in American courts," one official said.
"Sitting heads of government also enjoy personal inviolability while in the United States, which means
they cannot be personally handed or delivered papers or summons to begin the process of this," the
official said, adding that, "as a matter of treaty, heads of delegation to the UN General Assembly enjoy
immunity while in New York to attend the UN event."

Although touted by an excitable media as the court issuing "summons" to the Prime Minister, the order by
a district court in New York only enjoins the Indian Prime Minister to respond within 21 days after he is
served notice, and in no way affects his US programme or his visit. Indian government sources say the
action, which they suspect is supported by "forces inimical to India," is only aimed at embarrassing the
Prime Minister on his first visit to the US in 14 years.

"Steps being taken 2 address frivolous & malicious attempts 2 distract attention from the visit of
@PMOIndia to US," Syed Akbaruddin, spokesman of India's external affairs minister tweeted as soon as
the Modi touched down at JFK airport.
N-liability law boomerangs, spooks
domestic suppliers
Indrani Bagchi, TNN | Sep 22, 2014, 03.53AM IST

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NPCIL plans to build 16 new power plants in the 12th five-year plan. It might be tough if Indian
suppliers get cold feet. The law has anyway frozen out all foreign suppliers.
NEW DELHI: Indian nuclear authorities are facing a unique
problem - domestic companies are unwilling to supply
components for nuclear power plants, which could spark a crisis
sooner or later.

In August, Nuclear Power Corporation of India Limited (NPCIL)
put out tenders for components for the new 2,800 MWe
Gorakhpur Haryana Anu Vidyut Pariyojana (nuclear power plant).
For the second time in a row, NPCIL received less than tepid
response from Indian supplier companies because everyone
wants the government to exempt them from the 2010 nuclear
liability law that subjects suppliers to unlimited nuclear liability.

In a letter to NPCIL, L&T, one of the biggest players in the nuclear
sector, said it would only enter the bidding if the government
clarified that suppliers would not be bound by the offending
clauses in the liability Act. Other nuclear suppliers like Godrej &
Boyce (who TOI spoke to) said they had the same reservations
about the law. These are big Indian players who have helped build
domestic nuclear power capacity particularly in the decades when
India was under nuclear sanctions.
Suhaan Mukherji, who is advising Indian nuclear companies in
their silent battle against the government, said, "Such provisions
creating unlimited liability (both in time and costs) impair the
ability of long-standing and bonafide Indian nuclear
manufacturers. The law is a deterrent for historical and
committed domestic nuclear industry suppliers/manufacturers,
but it also encourages unplanned/inexperienced but huge risk-
appetite fly-by-night suppliers to take part in contracts. Such
participation is unfortunate and can be devastating in the rare
event of nuclear incident. Therefore, private sector shall either put
in conditional bids, ask for indemnity or liability from NPCIL, or
not bid at all."

NPCIL plans to build 16 new power plants in the 12th five-year
plan. It might be tough if Indian suppliers get cold feet. The law
has anyway frozen out all foreign suppliers.

The nuclear liability law was intended to tie foreign suppliers
down to a liability regime because the government did not want a
repeat of the Bhopal gas tragedy. The law succeeded in scaring
away foreign suppliers. In addition, it has crippled domestic
industry. Realising that there may be a crisis brewing, in 2011, the
government hurriedly framed a set of rules and regulations aimed
at limiting the time and cost factor of liability claims. This was
done just days before Manmohan Singh was to meet Barack
Obama in Bali.

The contentious clauses in the law are 17 (b) which says the
operator (NPCIL) has the right to recourse against suppliers in
case of a nuclear accident and clause 46 which says suppliers can
be sued under any other Indian law as well as by anyone.

The rules have added to the confusion. While one clause in the
rules limits supplier liability, it can easily be challenged in court,
because the rules go against the law as it has been framed. For
instance, Rule 24(1) aims to limit the amount of liability within
which the operator can make a right of recourse against a
supplier, but this clashes with Section 17(a) of the liability law.

It is not clear whether the BJP government can do much about
supplier liability either. Addressing her first press conference,
foreign minister Sushma Swaraj was clear that the supplier
liability clause would stay. "We (BJP) put it there, we are not
going to change it," she said.

Kaustubh Shukla of Godrej & Boyce said Indian companies should
not even qualify for the law. Indian companies supply
components to NPCIL which are "designed and built to their
specifications". NPCIL, he said, is in full control of the product it
orders. That should absolve the company of liability. M V Kotwal,
head of L&T's nuclear business, said Indian companies only want
the government to follow international norms.

The liability law is also believed to be contrary to India's
obligations under international law. India signed on to the
Convention for Supplementary Compensatory (CSC) in 2010, but
hasn't been able to ratify it. Ratification would instantly put India
in violation of the international treaty. The UPA government
became acutely aware of the mess it had landed in, but lacked the
political capital to resolve it.

However, Indian companies take heart from PM Narendra Modi's
'Make in India' promise, hoping he has the political capital to
amend this restrictive law passed by the UPA government. Arghya
Sengupta, from Vidhi Centre for Legal Policy, suggests a change
that can be made without disturbing the spirit of the law.

"It must be made expressly clear that there is no liability that is
borne by operators and suppliers, whether Indian or foreign,
apart from the liability under this Act. This would insulate
suppliers from unquantifiable amounts of tort liability which will
make continuing in the business unsustainable. At the same time,
such deletion would have no adverse impact on victims, as they
would continue to get compensation speedily under the Act," he
said.

Legal tangles hurdle to commissioning couples
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TOPICS
crime, law and justice
laws


medical specialisation
reproduction


social issue
social issues (general)
Experts call for regulations to check baby breeding cartels and child trafficking
German couple Jan Balaz and Susan Anna were able to take their twins Nikolas and Leonard, born to a surrogate
mother in India in 2008, home after a two-year legal struggle. The twins were stateless citizens with neither German
nor Indian citizenship. German authorities refused visas to the twins because surrogacy is not recognised in that
country, and Indian rules did not permit adoption; it was only after the intervention of the Central Adoption
Resources Agency (CARA) that the twins were permitted to go home in 2010.
In the case of Baby Manji Yamada, also born to an Indian surrogate in July 2008, legal tangles arose after the
Japanese commissioning parents divorced and the baby could not leave the country without either an Indian or
Japanese nationality. The issue was resolved when the Japanese Government issued a one-year visa on humanitarian
grounds, after the Indian Government granted a travel certificate in September in line with a Supreme Court
direction.
Cases such as these are flagged by legal experts and social activists as perils of not having a fail-safe legal system to
protect the rights of surrogate mothers, newborns and even the commissioning parents. Loosely drawn-up legal
contracts for surrogate mothers become the first hurdle in protecting the rights of the women and the newborns, says
Shamina Shafiq, member of the National Commission for Women (NCW). There should be a legal framework ; the
contracts should be exhaustive, covering aspects like how much money should be paid, what the provisions will be if
the child born has a disability, should the identity of the commissioning parents be kept secret, she says.
Advocate Ranjit Malhotra who specialises in private international law and has co-authored a book Surrogacy in India
says there is a need to create exclusive specialist forums to deal with issues of parentage, nationality, issuance of
passports, grant of visas .
There is a need for corresponding amendments to the Births and Deaths Registration Act, 1969 and The Citizenship
Act, 1955. Also, there should be mechanisms to check the credentials of commissioning parents. Home study reports
mandated under CARA guidelines in inter-country adoptions could well possibly be applicable in cross border
surrogacy arrangements.
Mr. Malhotra also pitches for the proposed legislation to provide for mediation and arbitration, in the event of
disputes. The Indian Council of Medical Research (ICMR) and Medical Council of India (MCI) should contemplate
some sort of surrogacy regulators, he suggests.
Currently, there are no guidelines for dealing with mishaps or death of the surrogate mother or the child. There are
also no legal provisions to deal with issues like a surrogate mother wanting to undergo an abortion or sex selection
leading to termination of pregnancy or invoking Article 21 of the Constitution to refuse to part with the child.
Our research shows that there are many unscrupulous practices that are carried out like sex determination, using
multiple surrogates for the same commissioning parents and even customising babies, says Ranjana Kumari,
director, Centre for Social Research. Advocating adoption, she says: It is a $ 3 billion industry and regulation in India
long delayed.
Echoing her view, Mr. Malhotra said, The proposed legislation should prohibit simultaneous multiple forum
shopping in different jurisdictions, expressly also prohibiting use of two surrogate mothers, whether in India or
abroad leading to two surrogate children born at the same time. It should also address the issue of baby breeding
rings and cartels, which are part of illegal cross border migration networks, he says.

Bar council bars OU, Kakatiya law students
B V Shivashankar,TNN | Sep 29, 2014, 05.07 AM IST

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READ MORE Telangana State Bar Association|Osmania University Law College|Law University College - Kakatiya|Kakatiya Law
Students|Bar Council
RELATED
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Demand to start welfare schemes for lawyers


HYDERABAD: Jeopardizing the future of hundreds of law students and raising the hackles of the
Telangana government, the Bar Council of India (BCI) has sent letters to the Telangana State Bar
Association directing it not to enroll fresh law graduates from Osmania University Law College and Law
University College, Kakatiya as advocates.

"Letters stating that graduates (2014-15) should not be enrolled as advocates, have been sent to these
colleges and the state bar association," said N Ramachandra Rao, a BCI member.

While the punishment ostensibly comes for the non-compliance by the colleges with the Legal Education
Rules-2008, it has created heartburn among Telangana students who point out that the Andhra
University Law College was 'spared' by the BCI.

A livid TRS government has decided to take up the cudgels with education minister G Jagadish Reddy
stating that they would consider moving court after a thorough examination of the matter. "It is not
unexpected. Telangana has been getting a raw deal all along. What you are hearing is just an extension of
it. How can law colleges in Telangana be disqualified when colleges in Andhra Pradesh be allowed?" said
Jagadish Reddy.

While the faculty of the colleges and students rued that the move was authoritarian, the BCI insisted that
the colleges should have undergone the mandatory inspection for affiliation.

According to the rules, a college has to pay Rs 1.5 lakh to the BCI towards inspection fee, following which a
team is sent to inspect whether prescribed standards are being followed.

Questioning the steep fee for inspection, the Osmania University Law College had last year moved the AP
High Court, which gave an interim order, staying the payment of the inspection fee. "We collect just Rs
350 each from students as annual fee. How can the BCI expect us to pay Rs 1.5 lakh every year for their
inspection?" said Panth Naik Karmatok, principal of Osmania University Law College.

"Moreover, we have got the court stay against payment of the prescribed fee. So, the BCI's decision to
disqualify us is illegal. We will move court if need arises," added Naik.

A faculty member of the college alleged the BCI was liberal in case of the Andhra University Law College
and said the move was biased and disturbing. "The BCI must explain how the AU college is different from
our college?" he added.

Justifying the BCI's decision, Ramachandra Rao said the Andhra University Law College had paid the
inspection fee and passed the inspection. Interestingly, he pointed out that the state government has
granted an annual assistance of Rs 10 crore for Nalsar University of Law towards its infrastructure
development, while Osmania University Law College and University Law College, Kakatiya are not getting
paise. "The state government must examine this anomaly before complaining of discrimination. If the
government grants aid, then these colleges will not only pass the BCI inspection, but also be able to
produce quality law graduates," Ramachandra Rao added.

AIADMK legal team has work cut out
A Subramani,TNN | Sep 29, 2014, 02.19 AM IST

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CHENNAI/BANGALORE: A badly bruised legal team of
dethroned Tamil Nadu chief minister J Jayalalithaa has its
immediate task cut out. They are keen to file an appeal in the
Karnataka high court challenging the legality of special judge
John Michael D'Cunha's 953-page order convicting Jayalalithaa
and three others in the 65.65-crore disproportionate assets case,
and win bail.

"We may file the appeals as early as on Monday, as we hope to get
10 sets of certified copies of the September 27 verdict. They have
already been issued a set of judgment, free of cost, as per
mandatory provisions of law. Since the high court registrar is
empowered to post the matter for hearing any day before Friday,
we hope to bring it for hearing this coming week itself," said a
long-serving member of the defence team, yet to shake off the
impact of Cunha's Saturday shocker.

The appeal will have three components: First, of course, it will
seek to set aside the order of conviction and sentence passed by
the trial court; Second, it will seek suspension of the sentence and
grant of bail to the accused; third, it will seek stay on the 100-
crore fine imposed on Jayalalithaa. AIADMK is considering the
option of roping in veteran lawyer Ram Jethmalani to argue
appeals, sources said. Since there is a perception that the bail may
happen not earlier than at least a couple of weeks at the least,
sources in the defence side said Jayalalithaa was simultaneously
considering the filing of a petition seeking her transfer to any jail
in Tamil Nadu. The only reason for which the case was shifted to
Karnataka was to ensure a fair trial, and it has been achieved, he
reasoned.

What about DMK general secretary K Anbazhagan, who is the
third party intervener in the case? "We will definitely intervene in
the appeals, but not now. We will not oppose bail for the lady, as
her longer incarceration would earn her public sympathy and
goodwill. However, we will join in when the actual appeal
proceedings commence, as we enjoy legal rights in appeal
proceedings than the trial where we had only a limited role," said
a member of the DMK legal wing. Describing it as a 'tough appeal',
for the accused, he said it was a water-tight case leaving little
space for escape. In this regard, he pointed out that special judge
Cunha rejected the defence argument that they had paid income
tax for the assets in dispute, saying he would not look at the
quantity of the money earned, but the quality of the money.
Legal experts question ERC invite to
CM
Pankaj Shah, TNN | Sep 28, 2014, 01.46AM IST

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LUCKNOW: An invitation sent by UP Electricity Regulatory
Commission (UPERC) to chief minister Akhilesh Yadav finds
itself in the midst of a raging controversy.

The commission has invited the CM to "preside" over the
foundation-laying ceremony of its new building on September 29.
However, legal experts say the commission is equivalent to a civil
court and hence cannot have the CM presiding over its functions.

The invitation card sent to invitees clearly mentions that while the
foundation would be laid by Governor Ram Naik, the function
would be presided over by CM Akhilesh Yadav. UPERC chairman,
Desh Deepak Verma, will just be a 'nivedak' (proposer). The
function will be organized at Indira Gandhi Pratishthan in
Gomtinagar on Monday morning.
"The chief minister may have been invited as a chief guest, but he
cannot be asked to preside over the function. It is the chairman of
the commission who should preside over the function," said
former judge of Delhi high court, AK Srivastava. "This would
amount to politicization of a commission which is a legal body,"
he told TOI.

Former chairman of UPERC, Vijoy Kumar said the commission
should keep the state government at an arm's length even while
organizing any function. "It is against the decorum of a
commission to allow any minister or even a chief minister to
preside over its function. The commission should not have affinity
with the state government at any level. The commission is an
independent judicial body and therefore should maintain its
sanctity," he said.

The UPERC chairman, however, maintained that it was a public
function and not any judicial function. "It is only after considering
all facts that the CM has been asked to preside over the function,"
he said.

UPERC's own website explains its status. It says, "the commission
is vested with the same powers as that of a civil court under the
Code of Civil Procedure 1908 (Central Act 5 of 1908) for obtaining
information and evidence."

The commission's legal functions include power to call any person
or undertaking to produce before it documents relating to any
matter concerning the generation, transmission, distribution and
supply or use of electricity. The Commission has the power to act
as arbitrator or nominate arbitrators to adjudicate and settle
disputes arising between licensees.
Five Outdated Laws Modi
Could Scrap
ARTICLE
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LAW
MADISON SQUARE GARDEN
MODI'S U.S. VISIT
NARENDRA MODI


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ADITI MALHOTRA

CONNECT

The Supreme Court of India in New Delhi on August 27.

Agence France-Presse/Getty Images
If every day I can get rid of one old law, I will be most happy,
Indian Prime Minister Narendra Modi said midway through his
speech at New York Citys Madison Square Garden on Sunday.
This attempt to clear the legal statute books of outdated laws has
been on Mr. Modis to-do list since he took office in May. In August,
he appointed a committee to identify and review laws that had
been introduced as recently as 15 years ago and may have
become obsolete.
A large number of federal laws date back to the early 1800s, when
India was a colony under the British imperial rule, and are yet to be
repealed.
Here is a list of five laws in Indias Penal Code that need to be
retracted, revised or updated because they are either archaic or
problematic.
Indian Treasure Trove Act, 1878
This legislation concerning the discovery of treasure on Indian
shores came into effect more than a century ago in 1878 and
was amended two years after India gained independence in
1947, mostly to substitute phrases like the whole of British India
with all provinces of India. It lays out a specific definition of
treasure as any value hidden in soil and puts a modest value to
it: Exceeding in amount of value ten rupees ($0.16). If the
discoverer of the treasure fails to hand it over to the government,
the share of such treasure to which the finder is entitled shall vest
in Her Majesty. Its not clear what happens now that Her Majesty
has no right to take treasure from the country.
Section 377, Indian Penal Code
This infamous British-era law criminalizes unnatural sex or carnal
intercourse against the order of nature with any man, woman
or animals. While lawyers have argued over the lack of clarity on
phrases like against the order of nature, it has largely been
interpreted as a ban on gay sex.
Last year, Indias topmost court, the Supreme Court, overturned an
earlier 2009 judgment by a Delhi High Court, which struck
down Section 377, recriminalizing homosexuality. Therefore, the
law currently makes consensual sex between same-sex adults
punishable by up to 10 years in prison. There have been vociferous
calls from Indias gay community to repeal Section 377 and restore
the fundamental rights of equality and expression.
While political parties like the Congress and the Aam Aadmi Party,
made a strong pitch to decriminalize homosexuality during their
election campaigns earlier this year, the ruling Bharatiya Janata
Party appeared to show little or no support on striking the legislation
down. Rajnath Singh, the current home minister and the former
president of the BJP made headlines for terming homosexuality as
unnatural.
Section 309, Indian Penal Code
Under this section, attempting to commit suicide is a crime,
punishable with imprisonment for a one year, a fine or both. In
other words, a suicide survivor can be imprisoned. The Mental
Health Care Bill, which called for the decriminalization of suicide
attempts, was proposed to Indias parliament last year, but it still
hasnt been passed.
Suicide rates in India are as high as 35 deaths per 100,000 people,
according to a report by the World Health Organization released this
month. The reasons for suicide range from financial insecurity to
domestic violence and mental-health problems like depression.
Experts argue that criminal prosecution increases the risk of suicide
by restricting interventions.
Section 497, Indian Penal Code
This adultery law penalizes any man who has sexual intercourse
with a personwhom he knows or has reason to believe to be the
wife of another man with imprisonment for a maximum of five
years, a fine, or both. The law only goes as far as defining sexual
intercourse of a man with a married woman without the consent of
her husband as adultery. In other words, sexual intercourse with an
unmarried or divorced woman, or a widow, is not unlawful.
Also the scope of the law extends only to the man and pardons an
unfaithful wife. In fact, the law goes as far to specify that the wife
shall not be punishable as an abettor.
Laws on Alcohol Sale and Consumption
In India, alcohol is a State Subject, meaning individual states can
have their own directives on its consumption and sale. Thus, laws
governing alcohol consumptionincluding the legal drinking age
vary from state to state. Extending a centralized mandate on legal
drinking age might be a good idea because while some states like
Goa, allow 18 year olds to consume alcohol, in others, like Delhi
and Maharashtra, young people must wait until they turn 25 to
legally drink.
In some states such as Gujarat, where Mr. Modi was chief minister
for 14 years, alcohol is banned entirely. Last month, authorities in
the southern state of Kerala said they wanted to phase out almost
all sales of hard liquor in an effort to restrict consumption.
Even within that diktat, bars and liquor stores are allowed to serve
and sell wine, beer and a local brew called toddy.