Arbitration is the current flavour of the legal and corporate world. And it does come in various flavours, one has domestic arbitration, institutional arbitration, ad hoc arbitration, international arbitration, forced arbitration, sole arbitrator arbitration, three member arbitration, named arbitration and arbitration by an expert, current employee, retired judge or as per mutual understanding.

What started as a alternate to complex court proceedings dominated by complex legal language and pitfalls and became the favoured child in the tri-family of alternate dispute resolution mechanism, the other two being mediation and conciliation has now grown up to encompass various countries, legal processes, territorial jurisdictions and trans national laws and become even more complex and complicated than law of any nation could ever aspire to be. Thus we now have internation arbitration counsels spending every billable hour trying to distinguish between the fine line of lex arbitri and lex fora and slice it with law of countract versus the law of arbitration mixed healthily with law of land of arbitration and law of land of execution.

Arbitration truly is the weapon of choice of corporates and thus  NBFIs and credit card companies created the perfect proceedure of speedy recovery of disputed debts by process of forced arbitration by process of having the arbitration take place beyond the territorial jurisdiction of occurance and having a helpful arbitrator giving quick and benovalent awards in their favour.

No wonder, out of the blue, the common man has suddenly shown his back to  the favoured child of ADR mechanism and various checks and statutes are being created to rein in the process of arbitration.

The government too, at least in India, has shown it’s favour to mediation as can be seen from various hoardings one sees outside police stations, electricity boards and such. The corporate world, not to be outdone, too is doing its bit by advertising arbitration through lobby groups, arbitration associations etc.

The question is, whether all this has helped? Or the attempts of various arbitration associations, councils have merely slowed the inevitable death of a giant.

Unless arbitration professionals, wake up, take the responsibility, take charge and cure the ills that face the process; only time will tell.

Meghna Sankhla

Managing Partner, Sankhla & Associates

Introduction

A trade mark or trademark or trade-mark is a distinctive sign or indicator used by an individual, business organization, or other legal entity to identify that the products or services to consumers with which the trademark appears originate from a unique source, and to distinguish its products or services from those of other entities Trade Mark is a part of Intellectual Property Rights law or right which also include Trade Mark, Patents and Copyrights.

A trade mark is designated by the following symbols:

* ™ (for an unregistered trade mark, that is, a mark used to promote or brand goods)

* ℠ (for an unregistered service mark, that is, a mark used to promote or brand services and is thus distinct from Trade Mark)

* ® (for a registered trademark or Trade Mark)

A trade mark or trademark is one of the elements of Intellectual Property Right and is represented by the symbol TM or ® or mark is a distinctive sign or indicator of some kind which is used by an individual, business organization or other legal entity to identify uniquely the source of its products and/or services to consumers, and to distinguish its products or services from those of other entities. A trademark is a type of intellectual property, and typically a name, word, phrase, logo, symbol, design, image, or a combination of these elements. There is also a range of non-conventional trademarks comprising marks which do not fall into these standard categories. Some questions are usually asked, which can be how do you trademark, what is trademark, how to trademark, what are trade names, trademarks etc. This article seeks to answer few of the questions.

The term trademark is also used informally to refer to any distinguishing attribute by which an individual is readily identified, such as the well known characteristics of celebrities. When a trademark is used in relation to services rather than products, it may sometimes be called a service mark, particularly in the United States. A service mark is a recent entrant to the domain of Intellectual Property Right or IPR which as already stated include copyrights and patents.

Trademarks are symbols, designs, or any form of identification that helps people recognize a brand. The owner of a certain trademark receives rights if that trademark is registered, these rights protect his brand from being copied and distributed illegally. The agency which registers the trademark gives people trademark rights and receives different financial advantages.

Violation of Trade Marks

The owner of a registered trademark may commence legal proceedings for trademark violation to prevent unauthorized use of that trademark. However, registration is not required. The owner of a common law trademark may also file suit, but an unregistered mark may be protectable only within the geographical area within which it has been used or in geographical areas into which it may be reasonably expected to expand. The process to protect trade mark is different from

protective measures taken for other forms of IPR (Intellectual Property Rights) like patents and copyright.

Two types of remedies are available to the owner of a trademark for unauthorized use of his or her mark or its imitation by a third party. These remedies are:

1. An action for infringement’ in case of a registered trademark; and

2. An action for passing off’ in the case of an unregistered trademark

While former is a statutory remedy, the latter is a common law remedy. In an action involving infringement or passing off, a court may grant relief of injunction and/or monetary compensation for damages for loss of business and/or confiscation/destruction of infringing labels and tags etc.

Although registration of trademark is prima facie an evidence of validity of a trademark, yet the registration can not upstage a prior consistent user of trademark, for the rule is ‘priority in adoption prevails over priority in registration’.

Trade mark Law in India

The Indian law of trademarks is enshrined the new Trade Marks Act, 1999 came into force with effect from September 15, 2003. The old Trade and Merchandise Marks Act, 1958 was repealed at the same time. The new Trademarks Act of 1999 is in line with the WTO recommendations and is in conformity with the TRIPS Agreement to which India is a signatory.

India has declared certain countries as convention countries, which afford to citizens of India similar privileges as granted to its own citizens. A person or company from a convention country, within six months of making an application in the home country, applies for registration of the trademark in India. If such a trademark is accepted for registration, such foreign national will be deemed to have registered his or her trademark in India, from the same date on which he or she made application in the home country.

Foreign Investors and Registration of Trade Mark in India

Registration of trademarks is one of the important protections that businesses should avail in India. Many foreign and domestic Applicants have been able to successfully register their marks in India. Indian courts have upheld many of those registrations and granted favorable decisions to rights holders.

Protecting the trademarks

The trademarks can be protected by business houses if they adopt the following ways.

If their trademark is available for use, then immediately apply for the registration. The rights holder should also consider hiring a watching service to monitor the trademark journals in order to alert them to any published, deceptively similar trademarks or descriptive trademarks that might be of concern. Should the rights holder own a trademark that has been used and has acquired goodwill and reputation, it is advisable that along with filing of the trademark application in India, they should also make press releases, publish cautionary notices and advertise the mark to ensure that the relevant section of the public is aware that they are entering the Indian market and are protecting their trademark from any kind of third party violation.

Recent case laws

Ranbaxy Laboratories Limited vs. Anand Prasad & Others The appellant was the registered proprietor of the mark ‘FORTWIN’ and had been using the mark since 1975. The respondent applied for registration of the mark ‘OSTWIN’. Both the marks related to pharmaceutical compositions in respect of treatment of bones.

The appellant brought an action against the respondent stating that the mark is deceptively similar. The IPAB held that the prefixes are ‘FORT’ and ‘OST’ while both the marks end with the suffix ‘WIN’. It was further held that since the rival goods are also pharmaceutical goods it might lead to serious consequences due to deception or confusion in the minds of the public. Hence on the possibility of harm being caused to common person the appeal was allowed

Amul wins trade mark case in Gujarat High Court, (Sep 24, 2007)

Amul has won the trade mark case in Gujarat High Court and no one else can use it. The Kaira District Co-operative Milk Producers Union Ltd. and GCMMF had filed trade mark infringement cases, against two local shop owners Amul Chasmaghar and its partners and Amul Cut Piece Stores in the District Court, Anand.

The District Court, Anand passed an order dated 25 April 2007, ruling that it was a clear case of infringement and restrained the two from using the Amul trademark. Amul Chasmaghar had challenged this interim injunction in the Gujarat High Court. The Gujarat High Court ruled the decision in favor of Amul, terming the order passed by the trial court as true, correct, legal and in consonance with the facts of the case, as well as in accordance with the provisions of the Trade Marks Act 1999.

Wyeth Holdings Corp. & Anr. vs. Sun Pharmaceuticals Industries Ltd. In this case the plaintiff whose former name was American Cynamid Company and who was the proprietor of the trademark ‘PACITANE’ registered the mark in Class 5 of Pharma goods. The respondent was using the mark ‘PARKITANE’ with respect to similar goods. The plaintiffs filed a suit for infringement and passing off and sought various reliefs including interim injunction against the defendant for using the mark ‘PARKITANE’.

The Court held that in both the cases the goods are similar, being pharmaceutical preparations for treatment of Parkinson’s disease, the customers buying these goods are the same and the trade channels are the same. Since the defendants did not show any search of the Register before adopting the impugned mark, prima facie adoption of the mark was not honest. Further, the Court held that despite protests, if the defendants have chosen to continue to sell the products, it cannot be said to be acquiescence by the plaintiff. Therefore the Court held that injunction is to be granted in favour of the plaintiff.

The Court further held that in case of pharmaceutical products, the test is of possibility of confusion and not probability of confusion. The plaintiffs have been in the field since 1950 and as such the balance of convenience is in their favour. The Court granted injunction in favour of the plaintiffs.

Conclusion

In conclusion it can be drawn that Indian Trade Mark Law must me updated frequently keeping in pace with the dynamic and new methods of Trade Mark infringement. Both Courts and Enforcement authorities must be well equipped and be trained for efficient disposal of cases relating to Intellectual Property which with Trade Mark also include Patent and Copyright.

Article by Sankhla and Associates Team

INTRODUCTION

The role of media in safeguarding human rights is as important as that of the judiciary. Human rights refer to the “basic rights and freedoms to which all humans are entitled.” Examples of rights and freedoms which have come to be commonly thought of as human rights include civil and political rights, such as the right to life and liberty, freedom of expression, and equality before the law; and economic, social and cultural rights, including the right to participate in culture, the right to food, the right to work, and the right to education.

“All human beings are born free and equal in dignity and rights. They are endowed with reason and conscience and should act towards one another in a spirit of brotherhood.”

Human rights violations occur when any state or non-state actor breaches any part of the treaty or other international human rights or humanitarian law. Media plays a vital role in everyone’s life. It solves their problems. Media is something that is must for today. It helps and provides vital information to the people. Media is considered to be the 4th pillar of the society. The other three being legislative, executive and judiciary. It definitely plays an important role in the welfare of the society. Media has a constructive role to play for the society. Media plays an important role in the society. They help us to know current affairs on the spot. They put their lives in danger during a terrorist attack or a natural disaster, just to inform us about it. It is partly because of them that there is awareness spreading in the society. It is the media who shape our lives. Without media our lives are incomplete. Without the media, it would have never been possible for us to become so much advanced. Human Rights which existed as mere theorical debate during the pre-Second World War have now become a practical goal of many modern Nation-states across the world. Today, the leaders of the world recognized the need to inculcate the indicators of human rights protections and practice as an input for development. So, In safeguarding human rights media plays a very important role.

Human Rights which existed as mere theorical debate during the pre-Second World War have now become a practical goal of many modern Nation-states across the world. Today, the leaders of the world recognized the need to inculcate the indicators of human rights protections and practice as an input for development. Human rights violations occur when any state or non-state actor breaches any part of the UDHR treaty or other international human rights or humanitarian law. In regard to human rights violations of United Nations laws. Article 39 of the United Nations Charter designates the UN Security Council (or an appointed authority) as the only tribunal that may determine UN human rights violations. Companies, NGOs, political parties, informal groups, and individuals are known as non-State actors. Non-State actors can also commit human rights abuses, but are not generally subject to human rights law other than under International Humanitarian Law, which applies to individuals. Also, certain national instruments such as the Human Rights Act 1998 (UK), impose human rights obligations on certain entities which are not traditionally considered as part of government (”public authorities“).

Multinational companies play an increasingly large role in the world, and are responsible for a large number of human rights abuses. Although the legal and moral environment surrounding the actions of governments is reasonably well developed, that surrounding multinational companies is both controversial and ill-defined. Multinational companies’ primary responsibility is to their shareholders, not to those affected by their actions. Such companies may be larger than the economies of some the states within which they operate, and can wield significant economic and political power. No international treaties exist to specifically cover the behavior of companies with regard to human rights, and national legislation is very variable

HUMANRIGHTS VIOLATION

Human rights violations occur when any state or non-state actor breaches any part of the UDHR treaty or other international human rights or humanitarian law. In regard to human rights violations of United Nations laws. Article 39 of the United Nations Charter designates the UN Security Council (or an appointed authority) as the only tribunal that may determine UN human rights violations.

Human rights abuses are monitored by United Nations committees, national institutions and governments and by many independent non-governmental organizations, such as Amnesty International, International Federation of Human Rights, Human Rights Watch, World Organisation Against Torture, Freedom House, International Freedom of Expression Exchange and Anti-Slavery International. These organisations collect evidence and documentation of alleged human rights abuses and apply pressure to enforce human rights laws. Only a very few countries do not commit significant human rights violations, according to Amnesty International. In their 2004 human rights report (covering 2003), the Netherlands, Norway, Denmark, Iceland and Costa Rica are the only (mappable) countries that did not (in their opinion) violate at least some human rights significantly.

There are a wide variety of databases available which attempt to measure, in a rigorous fashion, exactly what violations governments commit against those within their territorial jurisdiction. An example of this is the list created and maintained by Prof. Christian Davenport at the University of Maryland.

Wars of aggression, war crimes and crimes against humanity, including genocide, are breaches of International humanitarian law and represent the most serious of human rights violations. When a government closes a geographical region to journalists, it raises suspicions of human rights violations.

The role of media in safeguarding human rights is as important as that of the judiciary, National Human Rights Commission (NHRC) Chairman and former Chief Justice of India Justice M.N. Venkatachaliah in on seminar delivered that : “We have a limited notion of human rights. The meaning of human rights transcends mere abuse of power. Even bad drinking water that impairs people’s health and efficiency is a violation of rights,” Justice Venkatachaliah said. He added that the role of media in highlighting the cause of human rights, “should include issues such as literacy, health, family relationships and not mere abuse of authority”.

He [1]also cautioned that self-regulation is necessary in both media and judiciary. He remarked that politicians had become brokers of people’s anger and the media has failed to notice that. Citing a sample study conducted by the Commission that 78 per cent of the total deaths of prison inmates, most of them undertrials, had been due to pulmonary tuberculosis caused by the unhygienic, ill-ventilated and overcrowded jails, he said, “The media must address such unsung issues.” Advocate General, Punjab, H.S. Mattewal, said that poverty and crime are the underlying causes of all human rights violations.

Responding to an observation made by retired Supreme Court judge, Justice Kuldip Singh, that the Punjab government had failed in its promise to constitute a commission for looking into violations of human rights during terrorism. Mattewal pointed out that under Section 36 of the PHRA, [2]the commission could not take up cases over an year old.

THE MEDIA AND HUMAN RIGHTS

Until a decade ago, the word ‘media’ was synonymous with the word ‘the press’, which in turn was synonymous with newspapers. However, the Iraqi invasion of Kuwait in 1991, which led to the first Gulf War between America and Iraq, gave birth to the cable television network, and became a springboard for the Cable News Network (CNN) founded by Ted Turner of the Media Corporation. This was followed with the advent of the Internet, which has virtually revolutionized the scope and the reach of the media across the globe.

In India, the Press played a crucial role during the freedom struggle. The role played by great statesmen like Bal Gangadhar Tilak, Mahatama Gandhi and Pandit Jawaharlal Nehru is unparalleled, thanks to the zeal with which they devoted to their respective newspapers - Kesari, Harijan and National Herald. They succeeded despite the repeated efforts made by the British regime to curb their writings by charging and then sentencing them in one sedition case after another.

In 1978, the Government introduced ‘The Press Council Act - 1978’ to ‘preserve the freedom of the press and also for maintaining and improving the standards of newspapers and news agencies .in India’. This Act has to some extent helped the Press to be more transparent and also simultaneously be accountable.

The first major case of human rights violations ever to have been reported in the media, is the story of the blindings of prisoners in Bhagalpur jail and which threw light on the alarming state of affairs in the jail. Thereafter in mid eighties, Sheela Barse’s investigative story on the condition of exploitation and abuse of female inmates of Arthur Road Jail in Mumbai, also in Sunday, resulted in an enquiry into the condition of prisons all over Maharashtra.

The printed media has played a significant role during the last twenty-five years or so in reporting the violation of human rights. However, of late the printed media has been receiving stiff competition from television with the advent of news channels such as Star News, Zee TV and Aaj Tak were thrown to air.

“ This healthy competition between print and electronic media has compelled them to carve out a new kind of readership and/or viewership in other areas such as fashion, cuisine, health care, real estate, environment, sports etc. While defending the latest trends, the media say, “we cater for the demands of our readers and viewers.”

Modernization of media, worrying trend for human rights activists

But one fears that in the entire modernization and revolution process of the Indian media, human rights might take a back seat. This fear is further compounded due to the constant changes in the global economic pattern, which began with the introduction of the WTO six years ago. The recently concluded US-led war on Iraq is also going to change the financial and economic equations around the globe, in which ‘human survival’ might assume more importance than ‘respect for the human rights’.

Although the concept of ‘human rights’ came into existence way back in 1948 with the UN’s Universal Declaration to that effect, in India the National Human Rights Commission Came into existence forty-five years later, in 1993, with ‘The Protection of Human Rights Act [3]’. The State Human Rights Commission has came into existence barely two years ago and is still in the embryonic stage.

One might wonder why the enactment of a nationwide law was delayed for 45 years? Well, no such necessity was felt as many of the Articles of the Universal Declaration of Human Rights have already found place in the Fundamental Rights enshrined in our Constitution.

The Indian Constitution is one of the classical documents of its kind and has been drafted in such a systematic and simplified manner that is easy to understand, even for a layman. This speaks the volumes for the vision and energy of Dr. Babasaheb Ambedkar whose efforts in the making of the Indian Constitution were quite gigantic.

However, when it comes to the reporting of the human rights-related incidents, the newspapers devote very little space to them, unless the incidents it self is a very newsworthy and has national importance. Newspapers seldom make a serious effort to follow up such stories, which they report with a greater zeal in the beginning.

A CLIMATE FOR PROFESSIONALISM AND RESPECT FOR HUMAN RIGHTS

Journalists need to work in professional and social conditions where they are free to resolve ethical dilemmas alone and where they can make professional decisions on editorial content. This is a prerequisite for good journalism not just in the world over. This type of editorial independence should exist both in publicly owned and privately owned media, irrespective of ownership. Actions to support independent journalism should build on the following principles:

(i) public scrutiny of the exercise of power is essential in a democracy;

(ii) law related to journalism and media should be consistent with international standards and only elaborated after the fullest consultation with journalists;

(iii) independent organisations of journalists are best able to defend media freedom;

(iv) media professionals have a duty to work to the highest standards and should accept

responsibility to set up structures for effective self-regulation.

Strengthening Media Professional Organisations

Media professionals (journalists, publishers, broadcasters) in India have the expertise, the talent and commitment to build new and lasting structures in all media. They are best able to identify obstacles to press freedom, to define solutions to media problems and to implement strategies for media development. Indian media professionals must be closely involved in the implementation of media training and assistance programmes. Too often, well-intentioned interest groups, particularly in the field of human rights and development seek to represent the needs of media. Journalists must be able to speak for themselves.

A Comprehensive, Integrated and Accountable Strategy

Strategies for media development and assistance in the region must be long term, they must tackle all obstacles to media freedom (covering legal conditions, professional and social organisation, training and media development) and they must involve all media professionals. In addition, the allocation and disbursement of public funds must adhere to the principles of transparency and accountability.

Media is the part of civil society. By “civil society” we normally mean all those organisations outside the state, the family and the market. This includes charities, community groups, professional associations, women’s organisations, advocacy, faith, self-help and recreational groups, academia, business and trade associations, employers’ associations and trades unions. The term “fourth estate” was, devised because of the very fact that the media are so difficult to characterise. Generally outside civil society are those media established in pursuit of political power or profit and market share. But the boundaries are fuzzy. Some of these governmental and commercial broadcasters do broadcast significant educational and non-party-political information that is of great public service.

Perhaps the concept of the “social entrepreneur” is helpful here. This refers to organizations and individuals who address civil society’s social, democratic, economic and environmental needs in traditional non-profit ways, but who [4]make use of innovative, entrepreneurial and private sector approaches to deliver new and better services to their audiences. Public sector and even some commercial broadcasters could be described as social entrepreneurs, delivering knowledge and information that genuinely contributes to democracy and development.

Well and truly within the civil society sector are the growing number of community radio stations, who serve local communities, often in their indigenous language and from a civil society organization base such as a faith group or NGO.Increasingly perhaps we will see the growth in community internate broadcasters too.

THE MEDIA AND DEVELOPMENT

Civil society wants media that go beyond political dogma and entertainment to educate and inform the whole nation, free from government interference and commercial pressure. They want the media to help create a knowledgeable, entrepreneurial and confident society able to address and achieve development goals, particularly the Millennium Development Goals. Investment in the capacity of the free press, broadcasters and other media should be a high priority because they are best placed to communicate economic, social and environmental information and develop an educated public. In this way an informed consensus can be built around the difficult choices that are inevitable on the road to economic stability.

Strengthened media are also needed in order to deliver freedom of expression and freedom of information about the way citizens are being governed. These are fundamental building blocks of democracy, development and human rights as set out in the Indian Charter for Human and Peoples’ Rights.

ROLE OF MEDIA.

The violation of human rights, no matter in which sphere of life they occur, essentially takes place because ‘human values’ are not recognized in the first place. The importance of the human rights needs to be taught from the primary level in schools, when children are the right age to absorb them.

Police are often accused of violating human rights, but sadly, no effort is made by the home department to include the subject in the curriculum of police training academies. Here lies an opportunity to train policemen about the importance of respecting and observing human rights and the consequences of the breaching them.

The media can play a pivotal role by way of building up public opinion, and also by impressing on the government the need to incorporate the subject of human rights, both in schools and also in police training academies, and also in the training institutes for municipal councils, corporations and other revenue departments.

It is the duty of the government to provide its citizens with unpolluted air. But, if the local authority is going to give building construction permission in a ‘green zone’ or for the construction of a chemical plant in the area nearby to residential locality, then it would definitely be a violation of human rights. The de-reservation of plots for housing projects in metropolis is a huge scam, taking place with utter disregard to the human rights, but it is seldom reported in the media.

The priority of the Press

It is a common experience, at least in the big cities like Mumbai and Pune, that matters relating to de-reservation of plots by the builders, or the violation of environmental norms by the companies are rarely reported, as the reporting about their misdemeanors might deprive the newspapers of potential advertisements.

The print media these days is undergoing lots of changes, thanks to the challenges thrown up by the electronic media. Time was when the editor was ‘The Boss’ of the newspaper and it was he who used to call the shots with the management. Now a newspaper is treated like any other manufacturing product, with the marketing (also known as ‘Response’) department at the helm of affairs. The editor is being reduced to a ‘hired labourer’, working purely on a contract basis.

Such a sea change in the attitude of the management of some of the newspapers means that they are unlikely to antagonize the government by reporting stories relating to the violation of human rights, lest these stories rob them of the advertisements issued by the Directorate of Audio and Visual Publicity (DAVP). This is a dangerous trend from the human rights activists’ point of view.

DIFFERENT ROLES OF MEDIA IN HUMAN RIGHTS.

Media is really an important object in the society now a days. Without the media, it would have never been possible for us to become so much advanced. Though sometimes it becomes too intrusive, but still I think it plays a very important role in our society. It helps us to know about how the poor people are being exploited by the richer ones, how the students are being abused by the teachers, how the brutal fathers are killing their own baby in its mother’s womb as it is a girl. Had the media been not there we would have never been able to know a bit about all these.

The main important functions of the media are entertaining, educating and informing the society. For the society to cope in this technologically dependent era, they need to be media saturated. Today, media is considered the fourth pillar of the state all over the world, first and foremost British Member of Parliament Lord Macaulay had given this status to the media, in any country, the governing body has a significant position, then religious leaders have second position, after that general public has third position and media have fourth position. In any republican government system, there must be three administrative bodies, 1- Parliament, 2- Administrative department, 3- Judiciary body. In the absence of any of these three bodies, the government can not run systematically, but now it is felt that one body more is necessary to be with them, that is media, this body is considered more important these days, it plays an important role as an informative bridge between governing bodies and general public, in absence of media general public cannot know about what kind of bills and acts are passed in the parliament, and what are their positive and negative effects in the society, if media person close their eyes the government officials will do what they want, so media plays a very important and impartial role between government activities and general public, so much so that it is said that the freedom of media is the guarantee of success of republic government.

The Mass Media is an unique feature of modern society. It’s development has accompanied an increase in the magnitude and complexity of societal actions and engagements, rapid social change, technological innovation, rising personal income and standard of life and the decline of some traditional forms of control and authority. There is an association between the development of mass media and social change, although the degree and direction of this association is still debated upon even after years of study into media influence. Many of the consequences, either detrimental or beneficial, which have been attributed to the mass media, are almost undoubtedly due to other tendencies within society. Few sociologists would refuse the importance of the mass media, and mass communications as a whole, as being a major factor in the construction and circulation of social understanding and social imagery in modern societies. Therefore it is argued that the mass media is used as “an instrument”, both more powerful and more flexible than anything in previous existence, for influencing people into certain modes of belief and understanding within society.

CONCLUSION

Media plays an important role in today’s world. Through media we can get information in few minutes. But we should not see just one side of the coin as there are many good and bad things considering both the sides of the same coins. According to me, MEDIA in true sense acts as a connectivity bridge between people worldwide. It makes us aware about what all is happening in this world. It is only due to media which we are able to be safe from being involved in various dangerous activities.

Media plays a very important role in our lives, it is because of media that we are all aware of what is happening around us. Not only does it bridges the gap between the government and the the general public but it also provides us with the information about what is happening in the other parts of the world, the new technologies that is being developed, about inventions, disasters and almost everything. It is because of media that any kind of information is just one click away. When we talk about media, we are not talking about the electronic media only, it includes newspapers, magazines, radio, internet etc. Though it is true that electronic media is more prevalent and it has greater impact on the masses, but the role of other media cannot be neglected.

Property and gold has been consistent investment for most individuals. The only difference has been that unlike gold property is an expensive investment. In India property prices have risen sharply with foreign investment coming in from overseas in the property segment as well as construction sector. Unfortunately many unscrupulous builders and fly by night operators also entered the fray claiming to be colonisers, builders with fancy names and fancier projects. It has not helped that most people are not aware of the laws, regulations and conveyances which regulate and protect the purchaser. It is also an unfortunate fact, that the transactions in real estate industry, at least in India, cannot be regularised, due to payment issues in black and white. The government has sought to curb this menace by imposing circle rates in different territories and areas, but the same has not been effected, being without  application of mind.

Even as date, despite the real estate and construction industry having matured and reaching its peak, the transactions are still not well organised, with many legal owners and loopholes that are exploited by unscrupulous wheeler dealers, may they be real estate agents, sellers, builders, colonisers or even buyers and consumers. Penny pinching is rampant in the industry, creating copycat situations of a particular draft of conveyance for a particular deal being used in all other and wrong situations, deals and projects. This practice of not involving professionals may they be legal counsels, draft men, or tax consultants have created situations where the buyer and in many situations the seller being stuck with precarious legal and tax issues in their hands. The situation becomes even more grave when either the buyer or seller expires and the legal heirs discover grave lacuna in the conveyance documents which cannot be easily rectified.

Real estate involves both land and building. Lands are of of many kinds and have different laws pertaining to different kind of land. It would be foolhardy to take an agricultural land in the same scale and footing as that of residential, industrial, Lall Dora, commercial, institutional or otherwise. The same holds true for properties who derive their existence, usage and right primarily from the kind of land they are built upon. The usage of land can be changed in some instance and may further be changed procedurally by the government for the general benefit of society and people at large and as per changing requirements and usage. A clear example of the same can be taken to be flat and apartments being allowed to be built on residential plots and the government allowing sale and registration of the same on either the floor basis as well as flat basis.

In India the primary act governing the real estate can be taken to be The Transfer of Property Act, 1882. It is pertinent to note that this act has not been overhauled since 1882 and is thus hopelessly outdated. Unfortunately for a layman, this act is by no means the be all and end all of understanding the real estate laws. Apart from local laws, income tax laws, the general clauses act, the foreign exchange laws, inheritance laws, rent laws, state amendments have all to be understood. The safest way thus to purchase and invest in the property should be to engage a competent legal professional to undertake document and deed verification and undertake title search of the property. The same can be done for the entire chain of ownership where so required so as to protect the investor from being cheated by unscrupulous people or entering into a bad deal inadvertently.

Author

Kapil Sankhla, Advocate is Managing Partner at Sankhla & Associates, Law Firm, having their office in New Delhi, India. The firm Deals with Corporate and Commercial laws and has clients in field of realty, construction, hospitality, retail and aviation. Please visit www.sankhla.in for further details.

This article is copyright of Sankhla & Associates, who reserve complete right over the same. Please contact the author if you wish to republish the same or part thereof.

The business of companies is directed primarily by The Companies Act 1956, as amended from time to time. A company being a juristic person is headed by it’s Board of Directors.  Directors are agents of the Company in transactions they enter into on behalf of the Company, though they are not agents for individual shareholders or members. A director may be an employee, a servant or even a “worker” of the Company. He occupies the position of a trustee, though he is not a trustee in the strict sense in respect of the Company’s properties and funds.
Director’s liability arises because of their position as agents or officers of the Company as also for being in the position of trustees or having fiduciary relation with the Company or its shareholders.
Some of these liabilities are in contract, some are in tort, some are under the criminal law and others are statutory, i.e., under the Companies Act, 1956 and other laws. The courts have, in deciding the liability of Directors, taken into consideration a director’s position as a whole.
Contractual Liability: -
Directors are bound to use fair and reasonable diligence in discharging the duties and to act honestly, and act with such care as is reasonably expected from him, having regard to his knowledge and experience.
In R.K. Dalmia and others v. The Delhi Administration it was held that “A director will be personally liable on a company contract when he has accepted personal liability either expressly or impliedly. Directors are the agents or the trustees of a Company.”
Express liability will usually arise only when a director has personally guaranteed the performance of a contract. Implied liability will arise when a director signs a contract for the Company or mentioning the name but failing to add the vital word “limited” or its abbreviation. This rule rests on the ordinary principle of agency that where an agent enters into a contract without disclosing that he is acting as agent he accepts personal liability. In the case of Penrose v. Martyr a bill was addressed to a company and omitted the word “Limited” in describing it. The defendant (Secretary to the Co.) signed the acceptance and was held to be personally liable by the Court of Exchequer Chamber.
As far as fiduciary duties/obligations are concerned, any breach by any director would visit them with liability. Our Supreme Court has considered this issue of fiduciary liability. It has been observed in Official Liquidator vs. PA Tendulkar.
Pre- Incorporation Liability- A Company cannot make a contract before it is incorporated because, before incorporation, it has no legal existence. Therefore, a Company after incorporation cannot ratify a contract previously made. It must make a fresh contract. But, those who act on behalf of the unincorporated company may find themselves personally liable. In Kelner v. Baxter the Court of Common Pleas held that where a person purports to sign a contract as agent, but has no principle in existence at the time, he is personally responsible.
Liability of Directors for Torts of the company: -
Directors as such are not liable for the torts or civil wrongs of their company. To make a person liable for a tort, e.g. for negligence, trespass, nuisance or defamation it must be shown that he was himself the wrongdoer or that he was the employer or principal of the wrongdoer in relation to the act complained of, or that the tort was committed on his instructions.
Civil Liability to the Company- director’s liability to the Company may arise where
(1) the directors are guilty of negligence,
(2) the directors committed breach of trust,
(3) there has been misfeasance and (4) the director has acted ultra vires and the funds of the company have been applied for such an act.
A director is required to act honestly and diligently applying his mind and discharging his duties as a man of prudence of his ability and knowledge would do. It has been explained in the duties of directors as to what is standard or due care and diligence expected from him as explained by Justice Romer in Re City Aquintable Fire Insurance Company.
Any willful misconduct or culpable negligence falls within the category of misfeasance. It was held in Duomatic Ltd, Re-
“A director has to act in the way in which a man of affairs dealing with his own affairs with reasonable care, and circumspection could reasonably be expected to act…..”
Therefore, Directors would decidedly be liable for omitting to do what they could have done in the circumstances.
A Director is liable to make good with interest all amount paid from time to time out of the funds of the company for the purchase of shares of the company. He is not entitled to spend money for a purpose not covered by the Memorandum of Association although such payment is sanctioned by the Board of Directors and by the majority of shareholders. A shareholder can maintain an action against the director to compel them to restore to the company its funds employed in transactions that the directors have no authority to enter into. The funds of the company cannot be used by the Directors to pay their litigation costs, although these would not have been incurred if they had not been directors. A Director will, however, not be liable for any such unlawful act if he had no knowledge of such payments.
Liability of co-director’s defaults: -
A director is bound by the maxim delegatus non-potest delegare. Shareholders appoint him because of their faith in his skill, competence and integrity and they may not have the same faith in another person. It was held in the case of J.K. Industries v. Chief Inspector of Factories that the directors being in control of the company’s affairs cannot get rid of their managerial responsibility by nominating a person as the occupier of the factory. The rule is, however, not inflexible. The Act or Articles of Association of the Company may make a delegation of functions to the extent to which it is authorized. Also, there are certain duties, which may, having regard to the exigencies of business, properly be left to some other officials. A proper degree of delegation and division of responsibility is permissible but not a total abrogation of responsibility. A director might be in breach of duty if he left to others the matters to which the Board as a whole had to take responsibility. Directors are responsible for the management of the company and cannot divest themselves of their responsibility by delegating the whole management to agent and abstaining from all enquiries. If the latter proves unfaithful, the liability is that of the directors as if they themselves had been unfaithful.
Tax Liability:-
Under Section 179 of the Income Tax Act 1961, when any private company is wound up and the tax assessed cannot be recovered, then every person who was a director of the private company shall be jointly and severely be liable for the payment of such tax. Where the bank account of a Director was frozen for recovering income tax dues of the Company, it was held in Gurudas Hazra v. P.K.Chowdhury that it was for the Director to show that the default on the part of the company was not attributable to any breach of duty on his part. The case of Peter J R Prabhu v. Asstt Commissioner of Commercial Taxes stated that apart from any provisions of the taxing statute, arrears of the tax amount are not to be recovered from the directors personally.
Directors with unlimited liability:-
The liability of the directors like the shareholders is limited to the extent of the shares held by them remaining unpaid. A limited liability can make the liability of any or all of its directors unlimited. A provision to this effect has to be contained in the Memorandum, that a person who becomes director after incorporation of such a clause will have unlimited liability.
Misleading Prospectus-
A director is liable to compensate a person who has subscribed shares on the faith of a prospectus, which contained untrue statement. The Director should compensate every such subscriber for any loss or damage he may have sustained by reason of such untrue statement in an action in tort and also under section 62 of the Act to pay compensate. If the Director discovers a mistake in the prospectus, it is his duty to specifically point it out. The Director may also have to face criminal prosecution for untrue statement in the prospectus. He may be imprisoned for two years and fined Rs.5000.
Inducement to invest-
The Directors are liable to criminal prosecution for inducing or attempting to induce a person by statement or even forecast which is false or misleading to enter into or to offer to enter into any agreement to buy shares of the company. They shall be punishable with imprisonment for a term which may extend to five years, or with fine which may extend to Rs.10,000, or with both.
Maintenance of proper books of accounts: -
Where directors manage a company then each director shall be responsible (if there is no managing director) that the company should maintain and keep proper books of account. Default or non-compliance will make the Director punishable with imprisonment for a term not exceeding six months or fine of Rs.100 or both. In the event of winding up, failing to keep proper accounts will make him punishable with one-year imprisonment and for falsification of book imprisonment for eight years.
Annual General Meeting: -
Directors must hold the meeting even though the accounts are not ready or the company is not functioning or the management of the business is vested in the Central Government. The holding of the meeting must be within the period of 15 months after the preceding annual general meeting (AGM). The Board of Directors shall at the meeting lay a balance sheet and a profit and loss account for the financial year. For default, the Directors are liable to be punished with imprisonment for a term of six months and fine of Rs.1,000.
Liability on winding up: -
A Director of a company in liquidation must co-operate with the liquidator in realizing the assets of the company and distributing them among the creditors and contributors of the company. If they fail to do so they are liable to imprisonment, which may extend to five years and fine.
Therefore, Directors are liable for theft of the company’s property or for false accounting. Directors are liable to prosecution on several issues. There are more than 150 sections dealing with criminal or penal liability of the Directors and other officers of the company. Some of these provisions have been listed and explained above.
Special statutory protection against liability: -
The Act extends special protection against a liability that may have been incurred in good faith. A good illustration here will be to cite an early case of Claridge’s Patent Asphalt Co, Re where the Court said that the Directors were acting for the benefit of the company and took the best advice from the company’s solicitor and thus were not held liable. The Bombay High Court in the case of Gautam Kanoria v. Astt. ROC also granted relief to the Directors where the AGMs could not be held and annual returns could not be filed due o the takeover of the company by the Government and the matters being beyond their control. The totality of the circumstances has to be examined for considering whether relief is to be allowed or not. It was also observed in Om Prakash Khaitan v. Shree Keshariya Investment Ltd that it would be proper to relieve directors of consequences of defaults and the breaches unless they are directly involved in the acts or omission complained of or have otherwise not acted honestly or reasonably or have financial involvement in the company.
Conclusion: -
Accountability is an important element of Board effectiveness. There should be some mechanism for evaluating the performance of the directors. The extent of liability of a director would depend on the nature of his directorship. In applying the general equitable principles to company directors, four separate rules have emerged. They are (1) that directors must act in good faith in what they believe to be the in the best interest of the company (2) they must not exercise powers conferred upon them for purposes different from those for which they are conferred. (3) that they must not fetter their discretion as to how they shall act and (4) that without the informed consent of the company, they must not place themselves in a position in which their personal interests or duty to other persons are liable to conflict with the duties to the company. Three propositions in regard to the duties and responsibilities of directors:
(1) a director need not exhibit, in the performance of his duties, a greater degree of skill than may reasonably be expected from a person of his knowledge and experience
(2) a director is not bound to give continuous attention to the affairs of his company, his duties being of an intermittent nature to be performed at periodical board meetings or committee meetings.
(3) in respect of such duties as may be properly left to some other official having regard to the exigencies of business or the articles of association of the company, a director is, in the absence of grounds for suspicion, justified in trusting that official to perform such duties honestly.
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Introduction:

The Guidelines as outlined below provides a general background on the subjects of Laundering money and terrorist financing summarizes the main provisions of the applicable laundering money and anti-terrorist financing legislation India and provides guidance on the practical implications of the Act. The Guidelines also sets out the steps that a registered intermediary and any of its representatives, should implement to discourage and identify any money laundering terrorist financing activities. These Guidelines are intended for use primarily by intermediaries registered under Section 12 of the SEBI Act, 1992. While it is recognized that a “one-size-fits-all” approach may not be appropriate for the securities industry in Country, each registered intermediary should consider the specific nature of its business, organizational structure, type of customers and transactions, etc. when implementing the suggested measures and procedures to ensure that they are effectively applied. The overriding principle is that they should be able to satisfy them that the measures taken by them are adequate, appropriate and follow the spirit of these measures and the requirements as enshrined in Prevention of Money laundering Act Act, 2002

Back Ground:

The Prevention of Money laundering Act, 2002 has come into effect from 1stJuly 2005. Necessary Notifications / Rules under the said Act have been published in the Gazette of India on 1stJuly 2005 by the Department of Revenue, Ministry of Finance, Government of India

As per the provisions of the Act, every banking company, financial institution (which includes chit fund company, a co-operative bank, a housing finance institution and a non-banking financial company) and intermediary (which includes a stock-broker, sub-broker, share transfer agent, banker to an issue, trustee to a trust deed, registrar to an issue, merchant banker, underwriter, portfolio manager, investment adviser and any other intermediary associated with securities market and registered under section 12 of the Securities and Exchange Board of India Act, 1992) shall have to maintain a record of all the transactions; the nature and value of which has been prescribed in the Rules under the PMLA. Such transactions include:

All cash transactions of the value of more than Rs 10 Lacs or its equivalent in foreign currency. All series of cash transactions integrally connected to each other which have been valued below Rs 10 lakhs or its equivalent in foreign currency where such series of transactions take place within one calendar month.

All suspicious transactions whether or not made in cash and including, inter-alia credits or debits into from any non monetary account such as d-mat account, security account maintained by the registered intermediary.

It may, however, be clarified that for the purpose of suspicious transactions reporting, apart from ‘transactions integrally connected’, ‘transactions remotely connected or related’ should also be considered.

What is money laundering?

Money laundering involves disguising financial assets so that they can be used without detection of the illegal activity that produced them. Through money laundering, the launderer transforms the monetary proceeds derived from criminal activity into funds with an apparently legal source.

Policies and Procedures to Combat Money Laundering and Terrorist

Financing:

These Guidelines have taken into account the requirements of the Prevention of the Money laundering Act, 2002 as applicable to the intermediaries registered under Section 12 of the SEBI Act. The detailed guidelines have outlined relevant measures & laundering procedures to guide the registered intermediaries in preventing money and terrorist financing. Some of these suggested measures and procedures may not be applicable in every circumstance. Each intermediary should consider carefully the specific nature of its business, organizational structure, type of customer and transaction etc. to satisfy itself that the measures taken by them are adequate and appropriate to follow the spirit of the suggested measures and the requirements as laid down in the PML Act, 2002.

Obligation to establish policies and procedures:

International initiatives taken to combat drug trafficking, terrorism and other organized and serious crimes have concluded that financial institutions including securities market intermediaries must establish procedures of internal control aimed at preventing and impeding money laundering and terrorist financing. The said obligation on intermediaries has also been obligated under the Prevention of Money laundering Act, 2002. In order to fulfill these requirements, there is also a need for registered intermediaries to have a system in place for identifying, monitoring and reporting suspected laundering or terrorist financing transactions to the law enforcement authorities.

Procedures for Anti Money Laundering:

Each registered intermediary should adopt written procedures to implement the Anti Money Laundering provisions as envisaged under the Prevention of Money laundering Act, 2002. Such procedures should include inter alia, the following three specific parameters which are related to the overall ‘Client Due Diligence Process:

a. Policy for acceptance of clients

b. Procedure for identifying the clients

c. Transaction monitoring and reporting especially Suspicious

Transactions Reporting (STR)

What is a Money Laundering offence?

Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of offence of money laundering.

Person includes:

Laws regarding anti money laundering procedures

• The Prevention of Money Laundering Act 2002 (PMLA 2002)
  it forms the core of the legal framework put in place by India to combat money laundering. PMLA 2002 came into force with effect from July 1, 2005. It imposes an obligation on banking companies, financial institutions and intermediaries to verify the identity of clients maintain records and furnish information to FIU-IND.
• Foreign Exchange Management Act, 1999 it prescribes checks and limitations on certain foreign exchange remittances.
• Benami Transactions (Prohibition) Act, 1988 it prohibits transactions in which property is transferred to one person for consideration paid or provided by another person.
• The Narcotics Drugs and Psychotropic Substances Act, 1985 it provides for confiscating sale proceeds acquired in relation to any narcotic drug or psychotropic substance and any goods used to conceal such drugs. It provides for forfeiture of any illegally acquired property.
• The Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act, 1988 it authorizes detaining persons to prevent illicit traffic in narcotic drugs and psychotropic substances.
• Know-Your-Customer Guidelines it was introduced by The Reserve Bank of India to banks in India to reduce financial frauds and identify money-laundering transactions. The obligations imposed by these guidelines were reduced in October 2007 to allow foreigners and non-resident Indians to receive cash payments of up to $3,000 from money changers. Acceptable identity documentation was also expanded to allow money changers to accept a wider class of documents as evidence of a business relationship.
• Guidelines for anti-money laundering measures The Securities and Exchange Board of India (SEBI) has published guidelines for capital market intermediaries under the PMLA 2002. The guidelines concern all intermediaries registered with SEBI — a grouping that includes institutional investors, brokers and portfolio managers.

“In November 2006, India’s Insurance Regulatory and Development Authority issued anti-money laundering guidelines that exempt general insurance companies from the need to comply with certain entry-level checks on customers.”

On 17 April 2008, India finalized amendments to broaden the reach of its AML laws. The amendments will extend these laws to bring international credit card transactions, money transfers, and offences with “cross border implications” within their ambit. The amendments allow for “single criminality”, whereby a transaction only needs to be illegal in India, and not in the other state involved, in order to risk prosecution for money laundering offenses. The amendments will also expand the reach of the anti-money laundering laws to include casinos, credit card companies, and money changes. It has been reported that India’s Union Cabinet has approved the amendments for introduction to parliament.

Under what circumstances is a lawyer under obligation to report?

Currently, there is no specific law obliging a lawyer to report a money laundering offence

Lawyer’s responsibility?

No current obligations for client identification and verification

Client’s identification and verification

Indian lawyers normally do so, but not because there is any obligation. Section 12 of the PMLA 2002, requires every banking company, financial institution and intermediary to verify and maintain the records of the identity of all its clients, as prescribed by Rule 9 of the Rules notified by Notification No.9/2005

Conclusion

The Act is a first step towards a comprehensive legislation for preventing Money Laundering and has placed India on equal footing to its international counterparts. Another best part is that it has also included the banks and financial institutions, which channelize Money Laundering activities, within its ambit, by imposing certain obligations upon them.

Meaning- Limited Liability Partnership:

Limited Liability Partnership (LLP) is also known as Professional Association, in which the liability of the investor/partner is limited to the amount invested by him/her in the business.

Nature- Limited Liability Partnership:

LLP has elements of partnerships and corporations. In an LLP, all partners have a form of limited liability, similar to that of the shareholders of a corporation. However, the partners have the right to manage the business directly, and a different level of tax liability than in a corporation.

Difference- Limited Liability Partnership and Limited Partnership:

Limited Liability Partnerships (LLP) are distinct from limited partnerships, in that limited liability is granted to all partners, not to a subset of non-managing “limited partners”. As a result the LLP is more suitd for businesses where all investors wish to take an active role in management.

LLP- General View:

LLP laws exist in various developed countries like the UK, the US, Australia and Singapore. Introduction of LLP laws in some countries results from the need of professional firms who not only want the tax benefits and traditional structure of a partnership but also the protection from unlimited liability.

In the United States, each individual state has its own law governing their formation. Limited liability partnerships emerged in the early 1990s popular among professionals, particularly lawyers, accountants and architects.

An obligation of a partnership incurred while the partnership is a limited liability partnership, whether arising in contract, tort, or otherwise, is solely the obligation of the partnership. A partner is not personally liable, directly or indirectly, by way of contribution or otherwise, for such an obligation solely by reason of being or so acting as a partner.

As in a partnership or limited liability company (LLC), the profits of an LLP are distributed among the partners for tax purposes, avoiding the problem of “double taxation” often found in corporations.

In the U.K, LLPs are governed by the LL .Pact. A UK Limited Liability Partnership is a Corporate body - that is to say, it has a continuing legal existence independent of its Members, as compared to a partnership which may (in England and Wales they do not) have a legal existence dependent upon its Membership.

A UK LLP is tax transparent or pass-through for tax purposes, that is to say it pays no tax but its Members do in relation to the income or gains they receive through the LLP.

There is in fact no requirement for the LLP agreement even to be in writing because simple partnership-based regulations apply by way of default provisions.

It has to date been closely replicated by Japan and by the financial centers of Dubai and Qatar. It is perhaps closest in nature to the limited liability company although it may be distinguished from that entity by the fact that the LLC, while having a legal existence independent of its Members is not technically a corporate body because its legal existence is time limited and therefore not “continuing”.

Limited liability partnerships were introduced in Japan in 2005 during a large-scale revamp of the country’s laws governing business organizations. Japanese LLPs may be formed for any purpose (although the purpose must be clearly stated in the partnership agreement and cannot be general), have full limited liability and are treated as pass-through entities for tax purposes. However, each partner in an LLP must take an active role in the business, so the model is more suitable for joint ventures and small businesses than for companies in which investors plan to take passive roles. Japanese LLPs may not be used by lawyers or accountants, as these professions are required to do business through an unlimited liability entity.

A Japanese LLP is not a corporation, but rather exists as a contractual relationship between the partners, similarly to an American LLP.

A limited liability partnership is a form of organisation which PROTECTS a partner’s assets from limitless liabilities. In LLP, every partner will be an agent of the partnership and not of the other partners,

It promises perpetual succession and a distinct legal identity were it to become law. Further, it requires only a minimum of two partners, having no cap on the maximum number of partners a firm can have.

Limited Liability Partnership: An Indian Prospective

Due to the legal stipulation of unlimited liability among partners, Indian partnerships are mostly restricted to family members and persons who know each other thoroughly. LLP being a form of partnership having characteristics of a company will limit liability in the case of business failure or professional negligence.

Characteristics of LLP Bill, 2008:

1. The LLP will be an alternative corporate business vehicle that would give the benefits of limited liability but would allow its members the flexibility of organizing their internal structure as a partnership based on an agreement.

2. The LLP Act does not restrict the benefit of LLP structure to certain classes of professionals only and would be available for use by any enterprise which fulfills the requirements of the Act.

3. While the LLP will be a separate legal entity, liable to the full extent of its assets, the liability of the partners would be limited to their agreed contribution in the LLP. Further, no partner would be liable on account of the independent or un-authorized actions of other partners, thus allowing individual partners to be shielded from joint liability created by another partner’s wrongful business decisions or misconduct.

4. LLP shall be a body corporate and a legal entity separate from its partners. It will have perpetual succession. Indian Partnership Act, 1932 shall not be applicable to LLPs and there shall not be any upper limit on number of partners in an LLP unlike an ordinary partnership firm where the maximum number of partners cannot exceed 20.

5. The taxation of LLPs shall be addressed in the Income Tax Act, 1961 which regulates taxation of all form of entities.

6. Provisions have been made for corporate actions like mergers, amalgamations etc.

7. While enabling provisions in respect of winding up and dissolutions of LLPs have been made, detailed provisions in this regard would be provided by way of rules under the Act.

8. The Act also provides for conversion of existing partnership firm, private limited company and unlisted public company into a LLP.

By passing the Limited Liability Partnership Bill, 2008 the Indian Partnership has been put to a par with foreign firms.

Concept Limited Liability Partnership:

The LLP Bill has facilitated creation of a new corporate structure that will boost growth in the economy, particularly in professional advisory services in accounting, legal and insurance industries. LLPs make it easier for investors and professionals to jointly do businesses that involve greater risk.

Concept of LLP- Winding Up & Dissolution:

• The partner has fiduciary duties towards LLP and other partners. He should account to the LLP any profit or benefit derived in the conduct and winding up of the LLP activities or use of property and should refrain from competing with the LLP in the conduct or winding up of the LLP.

• A partner’s economic rights in the LLP are freely transferable. A transfer in whole or in part of a partner’s transferable interest is permissible and does not by itself cause the partner’s disassociation or a dissolution and winding up of the LLP. The transfer does not entitle the assignee to participate in the management or conduct of the LLP’s activities nor access to information concerning the LLP’s transactions.

• Winding up of an LLP may be either voluntary or by the Company Law Tribunal.

• Dissolution: An LLP can be dissolved by agreement of the members. When LLP becomes insolvent, creditors can initiate winding up proceedings. In the winding up of LLP, past and present members are liable to contribute to the extent they have agreed to do in the LLP agreement.

Conclusion:

Need of a LLP:

Introduction

Radio Frequency Spectrum is a limited natural resource. Spectrum basically refers to a collection of various types of electromagnetic radiations of different wavelengths. In India the radio frequencies are arbitrarily confined between 9kHz and 3000 GHz and are being used for 40 different types of services like fixed communication, mobile communication, broadcasting, radio navigation, radiolocation, fixed and mobile satellite service, aeronautical satellite service, radio navigational satellite service etc.

Some of the important and typical characteristics of the radio frequency Spectrum are as below.

1. Radio frequency spectrum does not respect international geographical boundaries as it is spread over a large terrestrial area.

2. Use of radio frequency Spectrum is susceptible to overlapping interference and requires the application of complex engineering tools to ensure interference free operation of various wireless networks.

3. Unlike other natural resources, radio frequency spectrum is not consumed upon its usage. It is also liable to be wasted if it is not used optimally and efficiently. Radio frequency spectrum usage is therefore to be shared amongst the various radio services and must be used efficiently, optimally and economically in conformity with the provisions of national and international laws.

The limitation of the radio frequency spectrum is mainly due to the following factors.

1. Propagation characteristics of different types of radio waves.

2. Availability of technology and equipment for different types of radio frequency spectrum applications.

3. The suitability of frequency bands for specific applications

Allocation of Spectrum

The International Telecommunication Union (ITU) at the World Radio communication Conferences allocate Spectrum frequencies for the use of various countries. Allocations are made on a regional basis and for different types of services. It is mandatory for all administrations to adhere to these allocations. For the purpose of spectrum allocation, each member country submits its proposals to ITU, based on their requirements and priorities for opening of the bands. During the conference all the proposals are discussed and decisions are taken for opening of the bands for new services or extension of the existing bands. These decisions are reflected in the International Frequency allocation Table of radio regulation and other regulatory provisions for use of bands, which forms the basis for allotment by the member countries. Need for spectrum allocation

Spectrum Allocation is necessary in order to ensure interference free operation for each radio service. Each frequency band is shared amongst various radio services but the sharing is possible only with the use of similar systems. Sharing is also possible by way of geographical separation, time-sharing and through technical solutions like smart antenna and intelligent radio system.

National Frequency Allocation Plan: 2002.

The National Frequency Allocation Plan (NFAP) forms the basis for development and manufacturing of wireless equipment and spectrum utilization in the country. It contains the service options in various frequency bands for India and also provides the channeling plan in different bands.

Spectrum and Mobile Telephone Services:

Mobile telephone service providers in India use GSM and CDMA\technologies. GSM technology works in the frequency bands of 900 and 1800 MHz in India and CDMA technology works in the 800 MHz band. 800, 900 and 1800 MHz bands were earlier allotted to the\defiance services for their mobile communication usage. However, upon the launch of mobile communication services for public, coordination was sought from the defense department to make the spectrum available for mobile services. Since the mobile communication technologies provide international roaming facilities, it is essential to allocate spectrum in the common bands which are being used the world over. Also, the mobile handsets being used are imported hence conform to the GSM 900/1800 bands. If radio frequencies are allotted in other bands then handsets will not be compatible with it and new handsets will have to be developed which will be costlier and therefore the cost of mobile communication services will also increase.

Presently, 25 MHz spectrum in 900 MHz band (890 – 915 / 935 – 960 MHz) and 75 MHz in the 1800 MHz band (1710 – 1785 / 1805 – 1880 MHz) is earmarked for GSM services. However, out of this total 100 MHz, only 15 MHz in GSM 1800 band is available for use as the remaining 60 MHz is still to be vacated by the defense department. Also out of the total 25 MHz in GSM 900 band, a total of 20.2 MHz is available for GSM networks and Railways’ train safety systems. The minimum amount of spectrum required for launching GSM services is 2 x 4.4 MHz. Presently, the government has allotted a cumulative maximum spectrum of up to 4.4 MHz in GSM 900 and 1800 MHz band to mobile operators.

For CDMA services, 20 MHz spectrum in the 800 MHz band (824 – 844 / 869 – 889 MHz) is available. In this 20 + 20 MHz spectrum, 14 CDMA carriers of nominal 1.25 MHz each are possible for assignment to service providers. Spectrum for the roll out of 3G services (voice, data and video) will be allotted through e auction in the 2.1 GHz (1920 – 1980 / 2110 – 2170 MHz) band. However, the Spectrum required for the launch of 3G services is yet to be vacated by the defense department.

Spectrum Allotment Procedure

In the case of licensed telecom service provider’s spectrum was initially allotted in accordance with the relevant provisions of the service license agreements. However, due to an exponential increase in the number of mobile subscribers additional mobile is required by the mobile operators. Serving a larger number of subscribers requires, either a larger amount of spectrum or an increase in the number of base stations. Therefore, additional spectrum is required at some stage as a techno economic solution to meet the growth of mobile services. Department of Telecommunications has evolved guidelines for the allotment of extra spectrum, based on the justification and fulfillment of the prescribed criteria. The subscriber-based criteria have been formulated taking into account demographic characteristics of different categories of service areas, average traffic per subscriber, number of base stations in a specified area etc. Spectrum is allotted subject to completion of co-ordination and availability at a particular location.

As spectrum is a scarce resource, its equitable allotment for systems using different technologies seems to be the solution. The government while formulating its spectrum policy should try to create a flexible and technology neutral regime to allow new technologies equal access to spectrum. It should also enable market mechanisms to promote efficient use of spectrum by developing market incentives and differential pricing of spectrum in congested areas. Also auctions or fixed fee access can ensure that spectrum ‘owners’ will want to minimize the quantum of spectrum. The government may also permit public and private users to trade spectrum to allow new users access to spectrum and to provide them with possibilities to move to another non – wireless media or other frequency bands if possible. It can also mark off specific public and private use segments of spectrum and try to bring about transparency and openness in the spectrum allotment process so that this scarce natural resource is put to it optimal use in a more efficient manner

Spectrum Management Department of Telecommunication

With the proliferation of new technologies and the growing demand for telecommunication services, the demand on spectrum has increased manifold. It is, therefore, essential that spectrum be utilized efficiently, economically, rationally and optimally. There is a need for a transparent process of allocation of frequency spectrum for use by a service and making it available to various users under specific conditions.

The National Frequency Allocation Plan (NFAP) was last established in 1981, and has been modified from time to time since. With the proliferation of new technologies it is essential to revise the NFAP in its entirety so that it could become the basis for development, manufacturing and spectrum utilization activities in the country amongst all users. The NFAP is presently under review and the revised NFAP-2000 would be made public by the end of 1999, detailing information regarding allocation of frequency bands for various services, without including security information. NFAP shall be reviewed no later than every two years and shall be in line with radio regulations of International Telecommunication Union.

Relocation of existing Spectrum and Compensation:

• Considering the growing need of spectrum for communication services, there is a need to make adequate spectrum available
• Appropriate frequency bands have historically been assigned to defense & others and efforts would be made towards relocating them so as to have optimal utilization of spectrum. Compensation for relocation may be provided out of spectrum fee and revenue share levied by Government.
  • There is a need to review the spectrum allocations in a planned manner so that required frequency bands are available to the service providers.

There is a need to have a transparent process of allocation of frequency spectrum which is effective and efficient. This would be examined further in the light of ITU guidelines. For the present, the following course of action shall be adopted.

• Spectrum usage fee shall be charged.

• Setting up an empowered Inter-Ministerial Group to be called as Wireless Planning Coordination Committee (WPCC) as part of the Ministry of Communications for periodical review of spectrum availability and broad allocation policy.

Conclusion

Hotel Industry in India is seeing enormous growth lately despite roadblocks such as terrorism and lawlessness in various states. Amongst the prime reasons for the growth in demand for hotel rooms in the nation is the thriving economy despite global meltdown and development in spheres of information technology, telecommunication, retail and realty. This coupled with a relatively stable securities market, modern business concerns like malls and international style retail outlets and cheaper conversion rates is quite appealing to foreign travellers and tourists. This too has allowed the hospitality sector to keep its’ neck above the water in these trying times.

The Government of India’s Incredible India destination campaign and the “Atithi Devo Bhavah” campaign have also helped the growth of domestic and international tourism. Huge investments is streaming into India feeding the growth of infrastructure such as highways, airports, business centres, offices, malls and many international food, restaurant, hotels and retail chains. It is thus natural that there should be unprecedented interest in the hospitality, travel and tourism sector.

The hospitality, tourism, travel and retail sectors have a mutually symbiotic relationship and can be thought to be peas in a pod as they have a cascading impression on each other. It is hoped that with Commonwealth games around the corner the demand for hotels would only surge. It is for this reason numerous international hospitality brands have expressed a keen interest in the Indian hospitality sector.

The expanding aviation industry too has opened new jobs for the students of hospitality and tourism colleges.

Unfortunately India does not have a single window system for laws pertaining to the Hospitality and Tourism Industry which has become a dead weight not allowing the Industry to rise to the predicted levels. Of all the ills being faced by the industry in terms of archaic laws and threat of litigation from all quarters, the industry itself has become proactive and has adopted various measures to cull down unnecessary, time consuming and expensive litigations in cases of commercial contracts, property disputes and labour problems by incorporating resolution of disputes by alternate means. Most restaurants, hotels and other components of the hospitality industry now incorporate Mediation or Arbitration clauses or sign Arbitration Contracts while entering into any contract be it Rental, Property conveyance, franchise, sale, purchase, utilities and maintenance contracts and even labour agreements. It is worthwhile for students and professionals of the hospitality industry to update themselves to the Alternate Dispute Laws which in India are governed by the Arbitration and Conciliation Act 1996 lest they are found wanting at the time of negotiations.