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• Thursday, January 26th, 2017

IoT And Smart Cities Forum Of India

Internet of things (IoT) and smart cities are two of the most contemporary technology developments around the world. India has embraced both these concepts with warmth and enthusiasm. Nevertheless, we at Perry4Law Organisation (P4LO) have felt that there is little research material built around the concepts of IoT and smart cities in India. This is more so regarding techno legal research materials for IoT and smart cities in India.

We have already launched the Smart Cities Cyber Security in India Daily, Techno Legal Centre of Excellence for Internet of Things (IoT) in India (TLCOEIOT), etc to cover IoT and smart cities related issues of India and other jurisdictions. The Centre of Excellence for Cyber Security Research and Development in India (CECSRDI) and Centre of Excellence for Digital India Laws and Regulations in India (CEDILRI) would also extend their techno legal expertise in this regard.

In order to further expand the techno legal resource centre of Perry4Law Organisation (P4LO) in the fields of IoT and smart cities, we have also launched a dedicated and exclusive techno legal IoT and Smart Cities Forum of India. It is a goldmine for national and international IoT and smart cities stakeholders as it is covering all possible techno legal issues of IoT and smart cities at a single place.

The IoT and smart cities forum of India is covering areas like cyber law, privacy, data protection, cyber security, cyber forensics, e-discovery, techno legal regulatory compliances for IoT and smart cities entrepreneurs, cyber law due diligence compliances, cloud computing, open source software and hardware, etc as applicable to national and international IoT and smart cities stakeholders.

IoT would be used for virtually everything in the near future making them vulnerable to cyber attacks. Data theft, identity theft, cyber crimes and cyber attacks would be normal and privacy protection would be a serious challenge. IoT would also be connected to cloud computing infrastructures raising further privacy and data protection issues. All these issues have already been covered at the IoT and smart cities forum of India.

To make the discussion even more comprehensive, we have also launched another discussion forum known as PTLB LPO Discussion Forum. The LPO Discussion Forum is serving twin purposes of spreading awareness about techno legal regulatory compliances of IoT, smart cities, cyber law, cyber security, cloud computing, etc on the one hand and outlining the procedure to avail the techno legal services of PTLB on the other. Interested stakeholders can avail techno legal services of PTLB after establishing the client attorney relationship with PTLB/Perry4Law. Reading of Frequently Asked Questions (FAQs) is strongly recommended by us in this regard.

In short, if you a national or international IoT or smart city stakeholders interested in doing business in India, it is imperative to subscribe and read the IoT and smart cities forum of India. In case you need techno legal services of TLCOEIOT or PTLB, please feel free to contact us in this regard and comply with the conditions mentioned at the contact point. We would be more than happy to help you in your journey to success.

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• Sunday, June 26th, 2016

Procedure For Obtaining A Domicile Certificate In IndiaReserve Bank of India (RBI) has recently released the Payment and Settlement Systems in India: Vision-2018 document. Among other things, the vision document intends to introduce a responsive regulatory framework for online payment industry of India and a customer liability framework to help resolve cyber fraud. The vision document has also expresed an intention to ensure contemporary and technology driven regulations in India. Perry4Law Organisation (P4LO) welcomes these positive steps on the part of RBI.

In order to ensure that regulations keep pace with the developments in technology impacting the payment space, the global level developments in technology such as distributed ledgers, blockchain etc. will be monitored, and regulatory framework, as required, will be put in place by the RBI.

Further, the payments eco-system is dynamically evolving with the advancements and innovations taking place, particularly in the area of FinTechs. In order to provide a platform for innovators to showcase their models to the industry, particularly in the areas of interest to payment systems and services, the Reserve Bank has organised an innovation contest through the Institute for Development and Research in Banking Technology (IDRBT). Learnings from such interfaces will also be used as inputs for policy adaptations.

RBI’s Deputy Governor H.R. Khan has recently informed that a group of experts will be constituted to study blockchain technology from a perspective of a evolving a more decentralised financial system and promoting cashless economy. The group would be small and draw its members from RBI, the Hyderabad-based Institute for Development and Research in Banking Technology and outside.

The legality of Bitcoin in India is a “grey area” and dealing in Bitcoin may be legal or illegal depending upon the way they are handled by the concerned individual or organisation. India is still discussing the legality or illegality of Bitcoin as RBI has to come up with a conclusive regulatory framework in this regard. The crucial question is whether Bitcoin use, websites and businesses are legal in India? There is no conclusive answer to this question as on date and the safest bet is to ensure techno legal compliances for Bitcoin businesses in India. The prominent of these compliances is the cyber law due diligence (pdf) that most of the e-commerce businesses and Bitcoin websites are not complying with.

Perry4Law Organisation (P4LO) wishes all the best to RBI and is committed to extend its techno legal expertise to help studying and implementation of Bitcoin and Blockchain technologies and other forms of online payment mechanisms in India.

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• Sunday, October 04th, 2015

Procedure For Obtaining A Domicile Certificate In IndiaAt Perry4Law, we are very frequently approached to assist our clients in obtaining a domicile certificate for various purposes. Many times we have to explain the difference between a domicile certificate and a residence certificate as the legal requirements and the use of these two certificates are totally different.

We have explained in a seperate post titled “how to obtain a domicile certificate in India” about various aspects of a domicile certificate and the rules and reguations applicable for the same. Perry4Law Organisation (P4LO) has also requested the Central Government to frame a techno legal framework for domicle in India. We believe that the domicile policy of India must be formulated by Central Government as soon as possible due to the present Digital India project and ever opening economies around the world.

India is a quasi federal nation and it is governed by a single citizenship or domicile system. Indian Constitution provides that every citizen of India shall have a single domicile throughout the territories of India. No state in India can insist upon a separate domicile other than the national domicile as conferred by Indian Constitution.

Domicile is different from residence. A person may be resident in India but he may not be domiciled in India. To make a residence a domicile, the residence must be accompanied with an intention to make that residence permanent. Similar rule applies if such a person is resident outside India. The crucial criterion is the intention of the person and this intention is decisive in determining the domicile status of such person.

While approaching the Central Government for obtaining a domicile certificate, it is imperative that various documentary proofs reflecting the intention of the applicant to obtain the domicile of India must be duly submitted.

There is no set procedure or formalities to obtain a domicile certificate in India and every case has to be decided by the Central Government on its own facts and circumstances. Obtaining a false or illegal domicile certificate is a punishable offence in India and it can have serious legal consequences.

We have developed our own techno legal procedure to assist our client in obtaining a domicile certificate. It is differnet for citizens and non citizens of India and seperate procedure is applicable for seperate individuals. If you need a domicile certificate for succestion or taxation related issues, please contact us in this regard.

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• Thursday, July 02nd, 2015

Praveen Dalal-Managing Partner Of Perry4Law And CEO Of PTLBThere are lots of myths about Aadhaar project that have been deliberately spread by Indian government so that it can continue to impose the same upon Indian masses. What is most surprising is the fact that Indian government is so adamant about this project that it has not even cared to follow the directions of Supreme Court of India.

Clearly, the Narendra Modi government is deliberately and maliciously indulging in “contempt of court” that must be taken note of by the Supreme Court of India. In fact, now the Supreme Court must vehemently protest the establishment of National Judicial Appointments Commission (NJAC) as it’s “Existence and Independence” is in real danger, warns Praveen Dalal.

He observes that opposing NJAC by the Supreme Court makes sense if we analyse the negative developments in the past and present like Section 66A of Information Technology Act, 2000, Aadhaar, Digital India, etc. In short, India is moving towards being a “Totalitarian State” and this must be immediately stopped by the Supreme Court of India, opines Praveen Dalal. So bad is the position that Aadhaar has become the worst e-surveillance instrumentality abused by Indian government so far.

In this post, Praveen Dalal has elaborated the dangers that Aadhaar project is posing to the democracy and fundamental rights of Indian citizens. The persistent use of Aadhaar by Indian government even at the cost of contempt of court and prohibition by the Supreme Court of India shows that Indian government is well committed to violate the civil liberties of Indian citizens. In fact, the Digital India project has become the biggest digital panopticon of human history as Indian government has illegally linked the same with the illegal and unconstitutional technology names Aadhaar, says Dalal.

Aadhaar Project was visualised as a public good project but it ended up being a project that is violating various Constitutional and Statutory Provisions. The Constitutional Validity of the Aadhaar Project has been questioned before the Supreme Court of India. In another related case, the Supreme Court of India has held that the Aadhaar cannot be made compulsory for availing Public Services. Similarly, the Supreme Court has also restrained UIDAI from transferring any Biometric Information of any person who has been allotted the Aadhaar number to any other Agency without his consent in writing (PDF).

Just like Congress Government even the BJP Government has declared that it would bring and ensure a Legal Framework for Aadhaar. However, till the writing of this Article, no news about a Legal Framework for Aadhaar is available. As a result the position on the date is that Aadhaar is operating without any Legal Framework and Parliamentary Oversight.

Aadhaar Project in its “Current Form” is suffering from many “Illegalities and Infirmities”. For instance:

(1) Aadhaar has been made “Mandatory and Exclusive” for availing many Public Services in India despite Supreme Court’s Interim Order and Constitutional Prohibitions.

(2) Aadhaar Project is not supported by any Legal Framework and is not subject to “Parliamentary Oversight”.

(3) Aadhaar Project is violating various “Civil Liberties” like Privacy Rights of Indians.

(4) Aadhaar Project is “Grossly Weak” on the fronts of Cyber Security and Data Security.

(5) Aadhaar is not “Full Proof and Tamper Proof” and it can be “Obtained Illegally” and in Wrong Name.

(6) The “Authentication Mechanism” of Aadhaar Project is also faulty and in many cases gives “False Negative Alarms”.

(7) The present Practices and Methods adopted by Indian Government and its Agencies for Biometric Collection of Indians/Residents is Unconstitutional.

(8) Even “Clubbing/Merging” of Biometric Data of Aadhaar and National Population Register (NPR) has “Serious Constitutional Ramifications” and the same should not be done.

(9) Absence of Encryption Policy of India (PDF) to safeguard Biometrics Data, etc.

If we add the “Unaccountable Intelligence Related Exercises” of Indian Government, its Agencies and Foreign Partners like United States, the list is too bulky to be discussed here. Suffice is to say that the Aadhaar Project is suffering from many “Vices and Illegalities”. These include Civil Liberties Violations, Unconstitutional E-Surveillance Issues, Data Security and Cyber Security Issues, Compulsory Nature of Aadhaar, Unaccountable Intelligence Agencies, Foreign E-Surveillance Threats, Telecom Security Issues, Integration with Surveillance projects like NATGRID, Unconstitutional Biometrics Collections, etc.

All these aspects make the Aadhaar Project an Unconstitutional Project that was required to be Scrapped by the Modi Government. Alternatively, all these Constitutional Infirmities and Illegalities were required to be “Eliminated” by the Modi Government before allotting further funds to Aadhaar Project. There cannot be a “Third Option” for the Modi Government and wasting precious “Public Money” on Unconstitutional Project like Aadhaar “Can Never Be Justified” even by the Standards of the “Fancy Words and Empty Promises” made by the Congress and BJP Governments regarding Aadhaar Project.

Not only this, the entire situation has also raised “Serious Questions” about the “Real Intentions” of Indian Government vis-à-vis Aadhaar Project. The “Present Form” of Aadhaar Project and the behaviour of Indian Government regarding Civil Liberties have definitely negated the theory of Welfare Project as projected by both Congress and BJP Government. But if Aadhaar Project is not a Welfare Project what is its purpose and true nature?

In my personal opinion, Aadhaar in its present form has no Welfare Elements attached to it whatsoever but is an “Endemic E-Surveillance Project” that is operating well beyond the Constitutional Protections, Parliamentary Oversight and Judicial Scrutiny. The sole purpose seems to be to club the Biometric Details of Indian Citizens/resident with other “Centralised Databases” like National Intelligence Grid (NATGRID) Project of India, Central Monitoring System (CMS) Project of India, Internet Spy System Network and Traffic Analysis System (NETRA) of India, Crime and Criminal Tracking Network and Systems (CCTNS) Project of India, etc. Gradually, both Biometrics and Non Biometrics based details and data would be clubbed with the DNA Databank of India that Indian Government would definitely go for in the near future.

It is for You to decide whether You wish to give Your Children a “Free and Transparent India” or You wish Your Children to be a Guinea Pig or Lab Rat for Indian E-Surveillance Projects like Aadhaar that are clearly Illegal and Unconstitutional.

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• Tuesday, April 07th, 2015

Digital India, Online Pharmacies And Healthcare Laws In IndiaDigital India is the pet project of Narendra Modi government and it has high hopes with the same. However, Digital India is suffering from many shortcomings and this is making the entire project vulnerable to judicial interventions. Just like the Supreme Court of India had to interfere in the Aadhaar and section 66A cases, the Supreme Court of India may also have to interfere with the implementation of Digital India project.

The biggest problem with the Digital India project is that it lacks a clear cut policy and implementation plan. There is neither a legal framework nor a parliamentary oversight of the Digital India project. India is also notoriously infamous for its e-surveillance activities and violation of civil liberties in cyberspace. There are no dedicated privacy and data protection laws (PDF) in India as well. In short, there is no transparency, accountability and legal recourse available against the misdeeds and wrongs committed by Indian government and its agencies while implementing the Digital India project.

While these conditions are not at all acceptable in other nations yet this is just ignored in India by Indian citizens except by few privacy loving citizens. Take the example of healthcare laws of India that are simply outdated, irrelevant and ill suited to meet the objective of Digital India. Fields like e-health, m-health, telemedicine, etc require dedicated techno legal framework that is missing in India. As a result, healthcare industry and healthcare entrepreneurs of India are presently acting more on the side of violation than compliances.

Another area of concern pertains to unauthorised and illegal operation of online pharmacies in India. As on date, there are very complicated sets of legal requirements for establishing online pharmacies in India and for online sale of prescribed medicines in India. We have no dedicated laws for opening of online pharmacy stores in India but different laws of India govern different legal aspects of the same. There are numerous legal risks associated with online selling of medicines in India and all online pharmacies that intend to operate in India mist strictly follow various regulatory provision related to this field. As on date online pharmacies in India are violating various applicable laws of this field.

Digital India intends to give a boost to use of information and communication technologies (ICT) for public delivery of services. However, we at Perry4Law Law Firm believe that use of ICT for healthcare industry and services in India without appropriate regulatory environment would be counterproductive in the long run. It is in the interest of patients, hospitals and healthcare service providers that a techno legal framework must be established by Indian government as soon as possible. The process of constituting the National E-Health Authority (NeHA) of India is the correct approach to embrace Digital India project. We expect more such initiatives on the part of Indian government in near future.

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• Sunday, March 15th, 2015

It Took India Almost 10 Years To Realise That Women Empowerment Is Possible Through ICTThe year was 2006 when Praveen Dalal suggested the use of ICT for Women Empowerment in India (PDF).  However, it took almost 10 years for India to realise that women empowerment is possible though ICT.  Narendra Modi government has finally appreciated this fact and has introduced the Digital India project covering this aspect as well. However, there are many limitations and shortcomings of Digital India project of India as on date and with these limitations and shortcomings the effect of Digital India would not be as conducive as anticipated.

Of all facts one fact is very frustrating and discouraging and that would also defeat the Digital India project in the long run. According to Praveen Dalal, mandatory e-governance services in India are needed that are presently missing. This is also one of the main reasons explaining why e-governance has failed in India.

Another reason is that Indian government is very slow in accepting suggestions and recommendations that can be game changer for India. For instance, if the suggestions of Praveen Dalal were accepted in the year 2006 itself, women empowerment in India would have a totally different meaning today in India. Platforms like MyGov have little significance if the suggestions provided by public are not accepted and acted upon.

However, in many cases Indian government accepts the suggestions and recommendations of public. For instance, many of the suggestions of Perry4Law Organisation (P4LO) regarding technology companies were accepted by the then Congress government.

The present BJP government is also open to public suggestions and inputs. However, how much they would be accepted depends upon the policies and strategies of Modi government. If Modi government is looking towards positive and image making inputs only, that would not be a fruitful exercise. Modi government must also keep in mind the shortcomings and weakness of its policies and projects. Censorship of posts and tweets and manipulation of news and search results is definitely not the right approach in this regard.

As far as Digital India and Aadhar projects of India are concerned, Praveen Dalal has compiled a list of aspects that Digital India and Aadhaar project must take care of in order to be successful. Now it is for the Modi government to consider the same and apply them to strengthen Digital India project wherever applicable and relevant. There is no sense in waiting for another 10 years to provide even the most basic e-delivery of services to Indian citizens.

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• Monday, March 09th, 2015

Techno Legal Updates Of India 09-03-2015 By PTLB

This is a roundup by Perry4Law’s Techno Legal Base (PTLB) of the recent national and international events, news and views. The roundup includes fields like cyber law, cyber security, digital India, skills development and trainings, e-mail policy of India, censorship by Google and Twitter of dissenting digital India related topics, etc.

The detailed roundup is as follows:

(a) Online Card Games: Online card games in India are still legally risky in the absence of any clear cut position from the Supreme Court of India and Indian government. The issue is pending before the Supreme Court of India and it may take some more years before the issues would be finally resolved. As on date, the online card games websites in India are in limbo and in state of legal uncertainty.

(b) Skills Development: The need to develop skills in India has been reiterated once again by PTLB especially for the law enforcement and intelligence agencies of India. There is also a possibility that United States agencies like FBI would train Indian intelligence officials for cyber terrorism and related issues. PTLB believes that online skills development methods must be developed by Indian government to meet its skills development objectives.

(c) Censorship By Google And Twitter: In a bizarre incidence, the dissenting tweets and posts regarding digital India were censored by both Google and Twitter repeatedly. PTLB condemns these censorship activities of Google and Twitter and hope that both of these companies would respect civil liberties in cyberspace in the future.

(d) Internet Safety Campaign: In a welcome move, Indian government has decided to launch an Internet safety campaign. We at PTLB welcome this move of India government. At the same time we also recommend that school children in India must be suitably educated about cyber issues so that they do not become victims of cyber criminals.

(e) Digital India: In a complete U turn, Indian government has shown little respect to civil liberties in cyberspace. Not only Indian government is censoring Aadhaar related critical views but even opinions reflecting the shortcomings of digital India project have been censored. By clubbing the digital India project with Aadhaar, Indian government has made digital India the digital panopticon of India.

(f) E-Mail Policy Of India: Indian government has finally enforced the e-mail policy of India. As per the notified e-mail policy, using private e-mail services have been banned for official communications in India. This is a good step in the right direction and PTLB welcomes the same.

(g) First CISO Of India: Dr. Gulshan Rai has been appointed the first chief information security officer (CISO) of India. PTLB welcomes this move of Indian government as it would go a long way in strengthening of cyber security of India. This CISO position would operate directly under the PMO.

PTLB hopes that this update would be useful to our readers and all the stakeholders. Please revisit this website and other blogs of PTLB for more updates.

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• Friday, July 25th, 2014

Twitter Updates Of Perry4Law And PTLB 25-07-2014Through this latest initiative, Perry4Law and Perry4Law’s Techno Legal Base (PTLB) would share crucial tweets of Perry4Law and PTLB. We hope our readers would find this initiative of Perry4Law and PTLB useful. Constructive discussions, criticism, suggestions, etc are welcome and they may be shared at the respective tweet itself.

The tweets are solely attributable to and are opinion of the person making the same and there is no endorsement by either Perry4Law or PTLB or any of its Partner/Associate/Affiliate etc of such tweet. These tweets are strictly personal opinion of the person making the same.

We wish to share the following tweets (from latest to older one) for the date 25-07-2014:

(1) Modi Govt Is Holding Public Money In “Fiduciary Capacity” As Trustee For Future Generation. Wastage On Aadhaar- Source: CLPIC.

(2) Silence Of Narendra Modi Is Endorsement Of Illegal Central Monitoring System (CMS) By Him- Source: CSRDCI.

(3) Why Indian Central Monitoring System Is Dangerous And How It Works?- Source: CLPIC.

(4) National Counter Terrorism Centre Of India The Problems and Solutions- Source: CECSRDI.

(5)  National Cyber Security Policy Of India 2013 (NCSP 2013)- Time To Revise- Source: CECSRDI.

(6) Lawful And Constitutional Interception Law In India Is Needed- Source: CECSRDI.  

(7) Intelligence Agencies Of India Need Parliamentary Oversight- Source: CLPIC.

(8) Is Indian Government Serious About Privacy Laws In India?- Source: Techno Legal Thoughts.

(9) Internet Telephony And VOIP Service Providers Must Establish Servers In India Now- Source: CECSRDI.

(10) Cyber Security Laws In India Needed- Source: CECSRDI.

(11) Cyber Law Due Diligence In India- Source: CECSRDI.

(12) What Happened To The E-Mail Policy Of India Ordered By Delhi High Court- Source: Privacy Laws In India.

(13) The Regulations And Guidelines For Effective Investigation Of Cyber Crimes In India Are Still Missing- Source: CECSRDI.

(14) Cyber Security Best Practices In India: The Problems And Solutions Approach- Source: CECSRDI.

(15) What Happened To The Legislation Mandating Strict Cyber Security Disclosure Norms In India?- Source: CECSRDI.

(16) Cyber Security Obligations Of Directors Of Indian Companies- Source: CSRDCI.

(17) Who Will Protect The Critical ICT Infrastructures Of India?- Source: CSRDCI.

(18) India Is A Sitting Duck In The Cyberspace And Civil Liberties Protection Regime- Source: CSRDCI.

(19) Crisis Management Plan For Preventing Cyber Attacks On The Power Utilities In India- Source: CSRDCI.

(20) National Cyber Coordination Centre (NCCC) Of India Facing Deadlock- Source: CSRDCI.

(21) Privacy Is Your Human Right Not A Government Charity- Source: Privacy Laws In India.

(22) Privacy Is Your Right Not A Charity And National Security In India Is A White Lie Not A Reality- Source: Privacy Laws In India.

(23) India Justifies Its Preferential Market Access (PMA) Policy For Domestic Telecom Equipments Manufacturers- Source: CECSRDI.

(24) Department of Electronics and Information Technology advisory on PMA bidding norms- Source: Economic Times.

(25) Tor Project Working to Fix Weakness That Can Unmask Users- Source: Computer World India.

(26) Narendra Modi Government’s Small Reforms With Big Impact- Source: Economic Times.

(27) Proposed National Telecom Security Policy Of India 2014 Must Be Balanced And Constitutional- Source: Telecom Laws Blog.

(28) Telecom Security Policy Of India 2014 And Unconstitutional E-Surveillance Issues- Source: Telecom Laws Blog.

(29) The NPR Exercise Has Its Own “Demerits And Constitutional Issues” And They Must Be Resolved First- Source: Privacy Laws In India.

(30) Cyber Security Of Banks In India Needs Strengthening- International Legal Issues Of Cyber Security.

(31) Intelligence Agencies Reforms In India Are Urgently Needed- International Legal Issues Of Cyber Security.

(32) Cyber Security Challenges Before The Narendra Modi Government- Source: International Legal Issues Of Cyber Security.

(33) National Security Policy Of India: Some Techno Legal Suggestions- Source: International Legal Issues Of Cyber Security.

(34) National Counter Terrorism Centre Of India Must Be Constituted- Source: Source: International Legal Issues Of Cyber Security.

(35) Narendra Modi And BJP Must Have Scrapped Aadhaar Instead Of Adopting Double Standards. Following Congress Steps- Source: CLPIC.

(36) Time To Scrap Aadhaar Project Has Come- Source: Ground Report.

We hope our readers would find these updates useful. We would share more of our tweets in the near future.

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• Wednesday, May 07th, 2014

Supreme Court Of India Holds That Section 6A Of DSPE Act Requiring Prior Sanction Of Central Government To Prosecute Senior Bureaucrats Is UnconstitutionalOn 17-12-2013 a three Judge Bench of Supreme Court of India held that that no approval from the Centre is required by the Central Bureau of Investigation (CBI) to prosecute senior bureaucrats in court-monitored corruption cases. Now a Constitution Bench (5 Judge) of Indian Supreme Court has held that Section 6A of the Delhi Special Police Establishment Act (DSPE Act), which granted protection to joint secretary and above officers from facing even a preliminary inquiry by the CBI in corruption cases, was violative of Article 14. From now onwards, no prior sanction would be mandatory for the CBI to conduct a probe against senior bureaucrats in corruption cases under the Prevention of Corruption Act.

A Constitution Bench comprising Chief Justice R.M. Lodha and Justices A.K. Patnaik, S.J. Mukhopadhaya, Dipak Misra and Ibrahim Kalifulla, while allowing the petitions filed by BJP leader Subramanian Swamy and the Centre for Public Interest Litigation, held that Section 6A of DSPE Act, which granted protection to joint secretary and above officers from facing even a preliminary inquiry by the CBI in corruption cases, was violative of Article 14.

Welcoming the court order, CBI Director Ranjit Sinha told The Hindu: “It is a landmark judgment that will empower the agency in the investigations into several cases pending due to the provision that has now been struck down by the Constitution Bench. We had for long been of the view that inquiry against senior officials need not require any prior permission.”

Writing the judgment, the CJI said, “Corruption is an enemy of [the] nation and tracking down a corrupt public servant, howsoever high he may be, and punishing such person is a necessary mandate under the PC Act, 1988. The status or position of a public servant does not qualify the person from exemption from equal treatment. The decision-making power does not segregate corrupt officers into two classes as they are common crime doers and have to be tracked down by the same process of inquiry and investigation.”

The Bench said, “Section 6A of the DSPE Act granting protection to one set of officers is directly destructive and runs counter to the object and reason of the PC Act, 1988. It also undermines the object of detecting and punishing high-level corruption. How can two public servants against whom there are allegations of corruption or graft or bribe taking or criminal misconduct under the PC Act, 1988, be made to be treated differently because one happens to be a junior officer and the other a senior decision maker?”

“The provision in Section 6A impedes tracking down the corrupt senior bureaucrats as without previous approval of the Central government, the CBI cannot even hold preliminary inquiry much less an investigation into the allegations. The protection under Section 6A has propensity of shielding the corrupt,” the Bench added.

Observing that there could not be any protection to corrupt public servants, the Bench said, “The aim and object of investigation is ultimately to search for truth and any law that impedes that object may not stand the test of Article 14. Breach of rule of law, in our opinion, amounts to negation of equality under Article 14. Section 6-A fails in the context of these facets of Article 14.”

Like almost any other judgement dealing with cases of corruption in high places, Tuesday’s order is related to the Supreme Court’s December 1997 ruling in the Vineet Narain v. Union of India case related to the Jain hawala scandal, involving payoffs to politicians by four Jain brothers who facilitated illegal foreign exchange transactions (termed hawala). That ruling, like Tuesday’s, sought to reduce the interference of the government in investigations of politicians and bureaucrats by CBI.

This is the third time the apex court has overturned a legislative action to fetter the CBI from inquiring against senior babus. On December 18, 1997, the court had struck down the “single directive” provision in Vineet Narain judgment. However, the “shield” for bureaucrats was restored when the Centre promulgated an ordinance on August 25, 1998. While SC’s intervention saw the provision deleted from the ordinance, the NDA government, headed by the BJP, on September 12, 2003 inserted Section 6A in the DSPE Act, which governs the CBI, to debar the agency from inquiring against top bureaucrats for corruption charges without prior permission of the Centre. It was challenged in 2005 by Subramanian Swamy and NGO “Centre for Public Interest Litigation”.

“It is very sad that this section was reintroduced even after the court’s decision in the hawala matter. This shows the extent to which both BJP and Congress governments were willing to go to prevent the prosecution of corrupt officials and offer them protection,” said lawyer Prashant Bhushan.” The Supreme Court maintained its view from the Vineet Narain v. Union of India case that “However high you may be, the law is above you”.

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• Wednesday, April 09th, 2014

Takeda Pharmaceutical And Eli Lilly Ordered To Pay A Combined $9 Billion In Punitive Damages For Cancer Risks From Actos MedicineThe case of Actos (Pioglitazone) Products Liability Litigation MDL No. 2299 (PDF) is part of the Multidistrict litigation system of United States (U.S.). When cases having a common question to be decided are scattered under different Districts of U.S. they may be consolidated and transferred to a single District for better results and effective justice delivery.

On December 29, 2011, the United States Judicial Panel  on Multidistrict Litigation transferred 11 civil action(s) to the United States District Court for the Western District of Louisiana for coordinated or consolidated pretrial proceedings pursuant to 28 U.S.C. 1407, assigned to the Honorable Rebecca F. Doherty. The case involves parties like Takeda Pharmaceutical Company and Eli Lilly and Company. These companies have been accused of hiding the fact that their Actos diabetes medicine has potential cancer causing risks.

Now Takeda Pharmaceutical and Eli Lilly have been ordered to pay a combined $9 billion in punitive damages after a federal court jury found they hid the cancer risks of their Actos diabetes medicine in the first U.S. trial of its kind.

Osaka, Japan-based Takeda was ordered to pay $6 billion by the jury yesterday in Lafayette, Louisiana. Indianapolis-based Eli Lilly, Takeda’s partner, was ordered to pay $3 billion. However, as per the terms of the agreement between Takeda and Eli Lilly, the former would indemnify the latter for any litigation costs arising due to the medicine.

However, according to legal experts, this award will probably be reduced because the U.S. Supreme Court has said punitive verdicts, imposed for bad conduct, must be proportional to the awards of compensatory, or actual, damages that underlie them. The court has said that in limited cases, punitive awards that amount to ten times a compensatory award would be acceptable. Of the 10 largest U.S. punitive verdicts previously awarded against corporations, all were either reversed or substantially reduced. None were paid at the amounts assessed by the juries. Takeda and Lilly officials have also confirmed that they would appeal against the jury’s verdict.

The jury earlier awarded $1.5 million in compensatory damages to former Actos user Terrence Allen, who blamed the drug for his bladder cancer. Allen alleged in his lawsuit that Takeda executives ignored or downplayed concerns about the drug’s cancer-causing potential and misled regulators about its risks to protect billions in sales.  Takeda didn’t provide a specific warning about Actos’ cancer risks until 2011, seven years after experts said the bladder-cancer link became clear and 12 years after the drug went on the U.S. market.

However, what may be troublesome for Takeda is the fact that Takeda officials intentionally destroyed documents about the development, marking and sales of Actos. The company ditched files of 46 former and current employees, including those of top executives in Japan and U.S. sales representatives. Because Takeda failed to properly protect the Actos documents, Doherty penalized the company by instructing jurors they could infer that the files may have buttressed Allen’s claims the company wrongfully hid the medication’s health risks. “The breadth of Takeda leadership whose files have been lost, deleted or destroyed is, in and of itself, disturbing,” Doherty wrote in a January ruling that opened the door for jurors to hear about the destroyed documents.

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• Monday, March 17th, 2014

Health, Food And Medicine Related Legal Compliances In IndiaThe laws pertaining to food, health and medicines are fast changing but the businesses dealing in them are very slow in adapting with them. As more and more businesses are making their online presence felt, the food and health laws are frequently violated. When e-commerce model is used to sell food, health and medicines in an online environment, many complicated techno legal issue arise.

For instance, fields like online pharmacies, ayurveda, healthcare technology, nutraceuticals, e-health, m-health, telemedicine, etc require compliance with techno legal requirements as prescribed by various legislations of India. These include compliance with laws like Prevention of Food Adulteration Act, 1954 and Rules 1955 (PDF), Food Safety and Standards Act, 2006 (PDF), information technology act, 2000, etc.

When business is done through e-commerce mode, cyber law, cyber security and data security compliances are also required to be taken care of. Internet intermediary liability and cyber law due diligence (PDF) must be taken care of beforehand before launching a website in these fields. The position has become so clear now that cyber due diligence cannot be ignored by Indian companies anymore.

For instance, take the example of Target Corporation that faced cyber attacks and data breach recently. For reasons best known to Target, it failed to take remedial action in this regard. Now target is facing litigation threats around the world and it may be prosecuted in India as well very soon for failing to comply with techno legal requirements of applicable Indian laws.

The position is fast changing in developed nations. The European Union has even suggested measures to strengthen privacy and data rights of its citizens. India also cannot ignore these issues anymore and sooner or later regulatory authorities would question the non compliance on the part of food, health and medicine websites operating in India.

Clinical establishments operating in India are also required to comply with the requirements of the Clinical Establishments (Registration and Regulation) Act 2010 (PDF) and the Clinical Establishments (Central Government) Rules 2012 (PDF). Further, Recommendations on Electronic Medical Records Standards in India (PDF) have also been prescribed that have to be followed and complied with by Indian clinics and healthcare professionals of India.

The legal risks for developer and owners of food, healthcare and medicine related websites cannot be ignored. Further, mobile medical devices and handsets and their respective applications must also be in strict conformity with Indian laws. Medical device makers, software providers and medical fraternity of India must also keep in mind the encryption laws of India and cloud computing related compliances of India.

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• Sunday, March 02nd, 2014

Tamil Website Savukku Now Available With Proxy URLs Making The Proposed Blocking Of Website RedundantRecently the Tamil website Savukku was ordered to be blocked by Madras High Court. Although the process has not been completed yet the website is available with proxy URLs making the entire judicial exercise redundant. This is how technology works and the judiciary must also keep this aspect of technology in mind while ordering blocking of websites.

The website in dispute is now also available under proxy URLs in varying forms of the name of the HC judge who gave the order. This practically means that even if the department of electronics and information technology (DeitY) blocks the disputed website, the same would be openly available and accessible to public at large. Further, if the website is blocked at the server level, the owner of the website can reload the contents if he maintains a data backup.

Another problem in this regard is the conflict of laws in cyberspace that would make the order of the Madras High Court redundant. For instance, if the disputed website is rehosted on a server located in a foreign jurisdiction, the order of the Court may not be enforced so readily. Even if the order is enforced it would take considerable period of time making the entire exercise futile.

The mutual legal assistance treaty (MLAT) is also not fruitful in all cases. Recently United States refused to serve Indian summons upon U.S. companies and this problem is often faced during conflict of laws in cyberspace. Although some development in this field has taken place after the establishment of Indo-American Alert, Watch and Warn Network for real time information sharing in cyber crime cases yet the position has remained the same so far.

India urgently needs a techno legal framework to manage cyberspace issues in general and conflict of laws in cyberspace in particular. Otherwise the judicial decision would not serve any purpose at all.

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• Friday, December 20th, 2013

Avoidance Of Tax By Certain Transactions In SecuritiesPerry4Law and Perry4Law’s Techno Legal Base (PTLB) have already discussed the legal issues pertaining to transfer pricing laws in India. We have also discussed avoidance of income-tax by transactions resulting in transfer of income to non residents.

In this article we would discuss a related concept that results in tax evasion by mode of certain transactions in securities.

Section 94 (1) of the Act provides that where the owner of any securities (in this sub-section and in subsection (2) referred to as “the owner”) sells or transfers those securities, and buys back or reacquires the securities, then, if the result of the transaction is that any interest becoming payable in respect of the securities is receivable otherwise than by the owner, the interest payable as aforesaid shall, whether it would or would not have been chargeable to income-tax apart from the provisions of this sub-section, be deemed, for all the purposes of this Act, to be the income of the owner and not to be the income of any other person.

Explanation.-The references in this sub-section to buying back or reacquiring the securities shall be deemed to include references to buying or acquiring similar securities, so, however, that where similar securities are bought or acquired, the owner shall be under no greater liability to income-tax than he would have been under if the original securities had been bought back or reacquired.

Section 94 (2) of the Act provides that where any person has had at any time during any previous year any beneficial interest in any securities, and the result of any transaction relating to such securities or the income thereof is that, in respect of such securities within such year, either no income is received by him or the income received by him is less than the sum to which the income would have amounted if the income from such securities had accrued from day to day and been apportioned accordingly, then the income from such securities for such year shall be deemed to be the income of such person.

Section 94 (3) of the Act provides that the provisions of sub-section (1) or sub-section (2) shall not apply if the owner, or the person who has had a beneficial interest in the securities, as the case may be, proves to the satisfaction of the Assessing Officer-

(a) That there has been no avoidance of income-tax, or

(b) That the avoidance of income-tax was exceptional and not systematic and that there was not in his case in any of the three preceding years any avoidance of income-tax by a transaction of the nature referred to in sub-section (1) or sub-section (2).

Section 94 (4) of the Act provides that where any person carrying on a business which consists wholly or partly in dealing in securities, buys or acquires any securities and sells back or retransfers the securities, then, if the result of the transaction is that interest becoming payable in respect of the securities is receivable by him but is not deemed to be his income by reason of the provisions contained in sub-section (1), no account shall be taken of the transaction in computing for any of the purposes of this Act the profits arising from or loss sustained in the business.

Section 94 (5) of the Act provides that sub-section (4) shall have effect, subject to any necessary modifications, as if references to selling back or retransferring the securities included references to selling or transferring similar securities.

Section 94 (6) of the Act provides that the Assessing Officer may, by notice in writing, require any person to furnish him within such time as he may direct (not being less than twenty-eight days), in respect of all securities of which such person was the owner or in which he had a beneficial interest at any time during the period specified in the notice, such particulars as he considers necessary for the purposes of this section and for the purpose of discovering whether income-tax has been borne in respect of the interest on all those securities.

Section 94 (7) of the Act provides that where-

(a) Any person buys or acquires any securities or unit within a period of three months prior to the record date;

(b) Such person sells or transfers-

(i) Such securities within a period of three months after such date; or

(ii) Such unit within a period of nine months after such date;]

(c) The dividend or income on such securities or unit received or receivable by such person is exempt, then, the loss, if any, arising to him on account of such purchase and sale of securities or unit, to the extent such loss does not exceed the amount of dividend or income received or receivable on such securities or unit, shall be ignored for the purposes of computing his income chargeable to tax.

Section 94 (8) of the Act provides that where-

(a) Any person buys or acquires any units within a period of three months prior to the record date;

(b) Such person is allotted additional units without any payment on the basis of holding of such units on such date;

(c) Such person sells or transfers all or any of the units referred to in clause (a) within a period of nine months after such date, while continuing to hold all or any of the additional units referred to in clause (b), then, the loss, if any, arising to him on account of such purchase and sale of all or any of such units shall be ignored for the purposes of computing his income chargeable to tax and notwithstanding anything contained in any other provision of this Act, the amount of loss so ignored shall be deemed to be the cost of purchase or acquisition of such additional units referred to in clause (b) as are held by him on the date of such sale or transfer.

Explanation.-For the purposes of this section,

(a) “Interest” includes a dividend;

(aa) “Record date” means such date as may be fixed by-

(i) A company for the purposes of entitlement of the holder of the securities to receive dividend; or

(ii) A Mutual Fund or the Administrator of the specified undertaking or the specified company as referred to in the Explanation to clause (35) of section 10, for the purposes of entitlement of the holder of the units to receive income, or additional unit without any consideration, as the case may be;

(b) “Securities” includes stocks and shares;

(c) Securities shall be deemed to be similar if they entitle their holders to the same rights against the same persons as to capital and interest and the same remedies for the enforcement of those rights, notwithstanding any difference in the total nominal amounts of the respective securities or in the form in which they are held or in the manner in which they can be transferred;

(d) “Unit” shall have the meaning assigned to it in clause (b) of the Explanation to section 115AB.

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• Friday, December 20th, 2013

Avoidance Of Income-Tax By Transactions Resulting In Transfer Of Income To Non ResidentsSo far Perry4Law and Perry4Law’s Techno Legal Base (PTLB) have discussed the legal issues pertaining to transfer pricing laws in India. In this post we would discuss a related concept that results in tax evasion by transferring income to non residents.

Section 93 of the Income Tax Act, 1961 deals with the provision pertaining to avoidance of income-tax by transactions resulting by transfer of income to non residents. This way income tax liability is reduced that is otherwise payable.

Section 93 (1) of the Act provides that where there is a transfer of assets by virtue or in consequence whereof, either alone or in conjunction with associated operations, any income becomes payable to a non-resident, the following provisions shall apply-

(a) Where any person has, by means of any such transfer, either alone or in conjunction with associated operations, acquired any rights by virtue of which he has, within the meaning of this section, power to enjoy, whether forthwith or in the future, any income of a nonresident person which, if it were income of the first-mentioned person, would be chargeable to income-tax, that income shall, whether it would or would not have been chargeable to income-tax apart from the provisions of this section, be deemed to be income of the first mentioned person for all the purposes of this Act;

(b) Where, whether before or after any such transfer, any such first mentioned person receives or is entitled to receive any capital sum the payment whereof is in any way connected with the transfer or any associated operations, then any income which, by virtue or in consequence of the transfer, either alone or in conjunction with associated operations, has become the income of a non-resident shall, whether it would or would not have been chargeable to income-tax apart from the provisions of this section, be deemed to be the income of the first mentioned person for all the purposes of this Act.

Explanation.-The provisions of this sub-section shall apply also in relation to transfers of assets and associated operations carried out before the commencement of this Act.

Section 93 (2) of the Act provides that where any person has been charged to income-tax on any income deemed to be his under the provisions of this section and that income is subsequently received by him, whether as income or in any other form, it shall not again be deemed to form part of his income for the purposes of this Act.

Section 93 (3) of the Act provides that the provisions of this section shall not apply if the first-mentioned person in sub-section (1) shows to the satisfaction of the [Assessing] Officer that-

(a) Neither the transfer nor any associated operation had for its purpose or for one of its purposes the avoidance of liability to taxation; or

(b) The transfer and all associated operations were bona fide commercial transactions and were not designed for the purpose of avoiding liability to taxation.

Explanation.-For the purposes of this section,

(a) References to assets representing any assets, income or accumulations of income include references to shares in or obligation of any company to which, or obligation of any other person to whom, those assets, that income or those accumulations are or have been transferred;

(b) Any body corporate incorporated outside India shall be treated as if it were a non-resident;

(c) A person shall be deemed to have power to enjoy the income of a nonresident if-

(i) The income is in fact so dealt with by any person as to be calculated at some point of time and, whether in the form of income or not, to enure for the benefit of the first-mentioned person in sub-section (1), or

(ii) The receipt or accrual of the income operates to increase the value to such first-mentioned person of any assets held by him or for his benefit, or

(iii) Such first-mentioned person receives or is entitled to receive at any time any benefit provided or to be provided out of that income or out of moneys which are or will be available for the purpose by reason of the effect or successive effects of the associated operations on that income and assets which represent that income, or

(iv) Such first-mentioned person has power by means of the exercise of any power of appointment or power of revocation or otherwise to obtain for himself, whether with or without the consent of any other person, the beneficial enjoyment of the income, or

(v) Such first-mentioned person is able, in any manner whatsoever and whether directly or indirectly, to control the application of the income;

(d) In determining whether a person has power to enjoy income, regard shall be had to the substantial result and effect of the transfer and any associated operations, and all benefits which may at any time accrue to such person as a result of the transfer and any associated operations shall be taken into account irrespective of the nature or form of the benefits.

Section 93 (4) of the Act provides that-

(a) “Assets” includes property or rights of any kind and “transfer” in relation to rights includes the creation of those rights;

(b) “Associated operation”, in relation to any transfer, means an operation of any kind effected by any person in relation to-

(i) Any of the assets transferred, or

(ii) Any assets representing, whether directly or indirectly, any of the assets transferred, or

(iii) The income arising from any such assets, or

(iv) Any assets representing, whether directly or indirectly, the accumulations of income arising from any such assets;

(c) “Benefit” includes a payment of any kind;

(d) “Capital sum” means—

(i) Any sum paid or payable by way of a loan or repayment of a loan; and

(ii) Any other sum paid or payable otherwise than as income, being a sum which is not paid or payable for full consideration in money or money’s worth.

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• Friday, December 20th, 2013

Shell India Received Transfer Pricing Order From Indian Tax AuthoritiesTransfer pricing laws of India are frequently invoked by Indian income tax department these days. The main reason for the same is to enrich government exchequers with additional revenues.

One such transfer pricing order has been received by Shell India that alleges that Shell under priced its shares to the extent of Rs 15,000 crore while issuing shares to it’s sole parent Shell Gas BV in March, 2009.

Shell India has alleged that the order was based on incorrect interpretation of Indian transfer pricing laws. In fact, Shell believes that taxing the money received by Shell India is, in effect, a tax on foreign direct investment. Shell believes that this is not only in violation of Indian law but also giving a bad signal to the international FDI community.

Considering the tax evasion reports as baseless, Shell India is now planning to challenge the order of income tax authorities strongly and is evaluating all options for redress. The company is confident of its stand as the valuation of the shares was undertaken by a certified independent valuer who assessed the value to be below Rs 10 per share and the issue was made at Rs 10 per share. Shell claims that such valuation is in accordance with the foreign investment and exchange control laws. The valuation certificates were also filed with the regulatory authorities.

At Perry4Law and Perry4Law’s Techno Legal Base (PTLB) we believe that the transfer pricing laws and valuation of the unlisted company needs further clarification from our legislature. Otherwise, litigations would keep on surfacing unnecessary.

In a listed company, the valuation is based on Securities and Exchange Board of India (SEBI) formula, which is the average of six-month or two-week share price, whichever is higher. But in unlisted companies, the valuation can be based on fair market price, or book value, or returns on share based on a certification by an independent valuer.

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