Tag Archives: LexCounsel

ILN Today Post

Changing Landscape of the E-Commerce Sector vis-à-vis the FDI Policy

E-commerce has seen exponential growth in India since the issuance of press note 2 of 2000 by the Government of India permitting 100% foreign direct investment (“FDI”) in Business to Business (B2B) e-commerce activities. With the growth came deviations and the Government received many complaints about certain marketplace platforms violating the policy by influencing the price of products and indirectly engaging in inventory based model, which is not otherwise permitted. The Government issued another press note dated December 26, 2018 (“Press Note”) to introduce certain changes to the FDI policy in the e-commerce sector. Coming into effect from February 1, 2019, this Press Note has had far-reaching implications on e-commerce entities (with FDI) operating in India, requiring them to significantly overhaul their existing business model to comply with the current FDI Policy. Reportedly various e-commerce giants like Amazon sought an extension for compliance with this Press Note, however, no such extension was granted, and this Press Note became effective on February 1, 2019.

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Supreme Court Re-Affirms the Entitlement of Teachers to receive Gratuity

The Hon’ble Supreme Court of India, in its judgment pronounced on January 7, 2019 in the case of Birla Institute of Technology vs. State of Jharkhand [Civil Appeal No. 2530 of 2012] (“BIT Case”), had held that teachers were not employees for the purposes of Payment of Gratuity Act, 1972 (“PG Act”) and therefore not entitled to receive gratuity. We had discussed the implications of the BIT Case in our earlier article titled ‘Payment of Gratuity to Teachers’.

Interestingly, on January 9, 2019, the Hon’ble Supreme Court, suo moto listed the matter and stayed the operation of its judgment in the BIT Case stating that the court had not been apprised of the retrospective amendment to the definition of “employee” in the PG Act vide the Payment of Gratuity (Amendment) Act, 2009 (“PG Amendment Act”). The Hon’ble Supreme Court observed that:

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Supreme Court Re-Affirms the Inclusion of Allowances for Determining Provident Fund Contributions

The Hon’ble Supreme Court of India vide its judgment passed on February 28, 2019 in the case of The Regional Provident Fund Commissioner (II) West Bengal vs. Vivekananda Vidyamandir and Others (clubbed with certain other civil appeals) has re-affirmed the position concerning treatment of allowances for determining the provident fund contribution.

The common question of law which was raised by the appeals for determination by the Hon’ble Supreme Court was whether the special allowances paid by an establishment to its employees would fall within the ambit of the expression ‘basic wages’ under section 2(b)(ii) read with section 6 of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (“EPF Act”), for computation of deduction towards provident fund contribution.

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BACK DOOR ENTRY OF THE DEFAULTING PROMOTERS – INAPPLICABILITY OF SECTION 29A OF INSOLVENCY & BANKRUPTCY CODE

With the introduction of the Insolvency & Bankruptcy Code, 2016 (“Code”), there has been a flurry of litigation before the National Company Law Tribunals (“NCLT”) and the National Company Law Appellate Tribunal seeking initiation of corporate insolvency resolution process with respect to companies in default of debt. The Code being a new legislation is not without loopholes. As a result, the Code has already undergone amendments within a short span of time to eliminate such ambiguities and achieve the real objective of the Code.

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AN OVERVIEW OF DATA PROTECTION LAWS IN INDIA AND EUROPEAN UNION

Communication, transfer, storage and use of data (and often sensitive, confidential and personal data) has become part and parcel of today’s digital transactions. While electronic transactions are quickly becoming an easier and efficient way of transacting as opposed to the traditional offline paper work, they are not without the risk of hacking, data theft and other cybercrimes. Data protection has therefore become a multi-jurisdictional issue in this borderless digital world, and countries around the world have developed regulatory frameworks to specifically address and protect against loss of privacy.

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MINIMISING CORPORATE LIABILITY OF DIRECTORS

Top three things to consider in India with regard to director liabilities / reporting to the board?

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SUPREME COURT: LAWYERS CAN ISSUE BANKRUPTCY LAW NOTICES AND BANKER’S CERTIFICATE IS NOT MANDATORY

Judgment: Macquarie Bank Limited (“MBL”) v. Shilpi Cable Technologies Ltd. (“SCTL”).

Forum: The Supreme Court of India (“SC”).

Judgment delivered on: December 15, 2017

Act/Law: The Insolvency and Bankruptcy Code, 2016 (“Code”).

Ratio: Firstly, lawyers can issue notice(s) under Section 8 of the Code, on behalf of the operational creditor they represent.

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NEW RBI NORMS ON PREPAID PAYMENT INSTRUMENTS

The Reserve Bank of India (“RBI”) has issued various guidelines from time to time on issuance and operations of Prepaid Payment Instruments (“PPIs”) in India. PPIs are defined as payment instruments that facilitate purchase of goods and services, including financial services, remittance facilities, etc., against the value stored on such instruments, and can be classified under three types viz. (i) Closed System PPIs, (ii) Semi-closed System PPIs, and (iii) Open System PPIs.

In view of the numerous technological innovations, progress in fintech and the use of PPIs growing at an exponential rate, RBI with the aim to foster innovation and competition, safety, security, and customer protection, has issued a fresh set of directions relating to issuance and operations of PPIs on October 11, 2017, in the form of RBI (Issuance and Operation of Prepaid Payment Instruments) Directions, 2017 (“Master Directions”). These Master Directions are applicable to PPI Issuers, System Providers, and System Participants, and are effective immediately. Existing authorised PPI issuers have, however, been allowed till December 31, 2017 to comply with the revised requirements (except where otherwise specified in the Directions).

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Security interests over moveable assets

Security interests over movable property can be created by way of mortgage, pledge, hypothecation, lien and charge.However, mortgage is usually a method of creating security interest over immovable properties, and its only in certain specified cases that it is coupled with a mortgage on moveable properties thereon. This article provides a brief introduction to some of the more commonly used security interests for moveable properties (being pledge, hypothecation, lien and charge). 

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ICCA recognizes Ms. Seema Jhingan as one of India’s Trusted Corporate Lawyers in its publication – ‘The Vanguards’

We are pleased to announce that Ms. Seema Jhingan, has been recognized as one of India’s Trusted Corporate Lawyers of 2017 by the Indian Corporate Counsel Association (ICCA) in its publication – ‘The Vanguards’ (as attached together with her published profile), with forwards from the Department of Legal Affairs, Ministry of Law and Justice and the Department of Commerce, Ministry of Commerce and Industry.

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