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NRI Investment (Part Two): Investment In Stock Market, shares, bonds and IPOs

NRIs are allowed to purchase shares or convertible debenture of an Indian Company through stock exchanges, under the portfolio investment scheme (PIS) of the Reserve Bank of India (RBI)  on repatriation and /or non-repatriation basis. As per the RBI guidelines, NRIs looking to invest in shares of Indian companies are required to approach any of the designated banks authorized by it under PIS to open a NRE/NRO account for routing investments.

NRI/PIO can invest in other securities as well namely

  1. Dated Government securities (other than bearer securities) or treasury bills.
  2. Units of domestic mutual funds.
  3. Bonds issued by a public sector undertaking (PSU) in India.
  4. Shares in Public Sector Enterprises being disinvested by the Government of India.

Indian equity market is a highly remunerative platform for NRI investors. It produced striking returns in 2017 after two disappointing years in a row. In 2017, Nifty 50 gave 28.6 % return compared to 3% in 2016 and a negative return of 4% in 2015. Furthermore, in 2017, Mid-cap and Small-cap gave higher returns when compared to Large-cap stocks with BSE Mid-cap and Small-cap giving  48% and 60% returns respectively. Additionally, the recent fall in the value of rupee may have been a great cause of concern for many investors, but the community of NRIs is one such that has certainly rejoiced from the said on-goings. On a year-to-year basis, the American dollar has been growing swiftly. One dollar was equivalent to Rs. 63.6697 in the beginning of 2018 and as of the beginning of 2019, it is already valued at 71.10 INR. Needless to say, things are looking up NRIs looking to invest or already invested in Indian Stock Exchange. Furthermore, Buying blue-chip Indian equities that are known to offer secure investment at higher returns is much more lucrative than investing in similar shares listed with major foreign stock markets. 

Present note seeks to address the following issues pertaining to NRIs investing in  Indian stock exchange –

  1. Step by Step procedural guide; and
  2. Frequently raised queries
  • Step by Step procedural guide
  • Step 1 – Open an NRE Account

As per the Reserve Bank of India and Indian Government Rules, NRIs can open 3 types of bank accounts namely –  

  1. Non-Resident Externa (NRE) Account
  2. Non-Resident Ordinary (NRO) Account
  3. Foreign Currency Non-Resident Account (FCNR)

Of the above mentioned, NRIs can utilize NRO and NRE accounts to invest in Indian stock market. In order to invest in stocks, NRIs first need to remit funds in INR to their NRO/NRE accounts held at designated banks. Additionally, the remittance has to be made through routine banking channels such as online banking, demand drafts, cheques or wire transfer. In certain cases, the investor may be required to annex a Foreign Inward Remittance Certificate (FIRC) issued by a foreign bank.  The purpose of annexing FIRC is merely to ensure that the funds being remitted by the NRIs are coming from a legal or regular income abroad. This requirement prevents utilization of funds for money laundering or any other illicit business/transaction involving foreign currency in India.

  • Step II – Open demat Account

Every individual intending to invest in the Indian Stock exchange needs to open a De-materialized (Demat) Account. A demat account can be opened with the assistance of the investor’s bank or reputed stock brokerages that provide such facilities or through any asset management company.

The reason that holding a demat account is compulsory for anyone looking to invest in Indian stock market is due to the simple fact that companies no longer issue paper certificate of the shares that an investor buys. Instead, shares are now held electronically in demat accounts.

  • Step III –  Trading Account

A trading account is compulsory for individuals looking to invest in Indian stocks. The trading account will have to be of a bank or Asset Management Company or stock brokerage company. The investor’s NRE/NRO accounts are required to be linked with their demat account and trading account for them to be able to seamlessly transact in the Indian stock exchange.

Additional Requirements/Information –

  • KYC Requirement

As per the RBI and Indian government laws, all financial transactions in India including stock trading is to be mandatorily governed by the Know Your Customer (KYC) Regulations. The formalities required to be completed for KYC include –  

  • Copies of India passport (NRIs)/foreign passport (OCI). The copies shall include pages wherein the individual’s picture, passport number, date of issuance and finally, permanent address appear.
  • Residence proof of residence country such as place of residence/ work permits.
  • Correspondence address of residence country.
  • Aadhar Card

Under existing rules of Unique Identity Development Authority of India (UIDAI), NRIs are not compulsorily required to apply for Aadhar card. However, if they have lived in India for 182 days or more, they may apply for an Aadhar and utilize the same for KYC.

  • Permanent Account Number (PAN) Card

NRIs need not mandatorily avail the Permanent Account Detail or PAN issued by Income Tax Department of India. However, A PAN card is mandatory if the investments from stock trading is taxable as per Indian laws. An application for PAN can easily be made online.

Note: Holding a PAN and Aadhar makes the KYC process easier as it saves the hassle of performing KYC manually, using passport and hence it is at times recommended that despite their non-compulsory nature, willing investors do the needful to have them.

  • Subscribing to IPOs

NRIs can buy Initial Public Offerings (IPOs) through a designated bank, Asset Management Company or Stock brokerage company. The application for IPOs has to be done through NRO/NRE account linked to the respective demat and trading account.  Kindly note that certain companies may have a cap for NRI investors which should be inquired on a case to case basis.

  • Stock Trading at BSE and NSE

Indian law prohibits investors from directly trading in BSE and NSE stocks and hence an arrangement needs to be entered into between the willing investor and a stock brokerage company. By means of such agreements, investors basically empower the company to trade on their behalf. Notably, such agreements need to be notarized to avoid future disputes. Generally, a sub-broker is assigned by the stock broker in order to personalize the services being rendered and to further advice the investor on Indian stock market. An investor may also gain access of their user account and password to deal in stocks on their own.

  • Proxy Investments

Investors have the option of authorizing an individual to trade on their behalf by means of a Power of Attorney. The investor will be required to provide relevant certificate to the designated banks/asset management company/brokerage company to proceed with proxy investment.

  • Frequently raised queries
  • How can NRIs Invest in Indian shares?

Ans – As state earlier, NRI’s wishing to invest in shares in India are required to approach any of the designated bank branch authorized by RBI. A designated bank branch is a branch of a dealer bank that has been authorized by RBI to conduct the business under Portfolio Investment Scheme (PIS) on behalf of NRIs and all transactions (sale/purchase) are to be routed through such designated branch. The designated branch will then open a NRE (Non Resident External) /NRO (Non Resident Ordinary) account under the scheme for the purpose of routing Investments.

  • What is a portfolio investment scheme?

Ans. Portfolio Investment Scheme is an RBI scheme under which NRIs can purchase and/or sell shares/convertible debentures of Indian companies on stock exchanges.

  • What are the documents required to be collected from Investor to open a NRI/PIO/OCI trading account and other formalities to be taken care of while registering NRI/PIO/OCI Clients?

Ans. Following is a list of documents required while registering NRI/PIO/OCI individuals –  

  • Document ensuring status of entity
  • In case of Indian passport – Valid passport, Place of birth as India, Valid Visa – Work/Student/employment/resident permit etc.
  • In case of foreign passport : Valid passport and any of the following
    • Place of Birth as India in foreign passport
    • Copy of PIO / OCI Card as applicable in case of PIO/OCI
  • PIS Permission Letter from the respective designated bank
  • PAN Card
  • Overseas Address Driving License/ Foreign passport /Utility Bills/Bank statement (not more than 2 months old)/ Notarized copy of rent agreement/ leave & license agreement/ Sale deed.
  • Photograph of Investor.
  • Proof of respective bank accounts & depository accounts.

Additional formalities include – In case of NRI/PIO/OCI client, registration documents require self-attestation and not by that of a power of attorney holder. Additionally to that, In case of in-person verification of NRI/PIO/OCI client, the DB will obtain from such clients: the KYC attested documents, attested by one of the following – Indian Embassy/Consulate general in the residence country of the client, Notary Public, Court, Magistrate, Judge or Local banker.  

  • What is the ceiling of investments under PIS?

Ans.  

  1. NRIs can invest up to 5% of the paid-up capital/paid-up value of each series of debentures of listed Indian companies through designated Authorized Dealers (AD) on repatriable or non-repatriable basis under PIS
  2. It is not allowed that the aggregate paid-up value of shares/convertible debentures  purchased by all NRIs exceeds 10% of the total paid-up capital/ value of each series of debentures of the company.
  3. The aggregate ceiling of 10% can further be increased to 24% but only by means of a special resolution to that effect by the General Body of the Indian Company.
  • How are payments for stocks purchased on stock exchange to be made by NRIs?

Ans.

  1. Repatriation basis – Payment for shares/debentures on repatriation basis needs to be made by way of inward remittance of foreign exchange either through normal banking channels or out of the funds held in NRE/Fixed Deposit Foreign Currency (FCNR) bank accounts maintained in India.
  2. Non-repatriation basis – In addition to the modes mentioned above, NRIs can utilise the funds in their NRO accounts to purchase shares on non-repatriation basis.
  • How can NRIs/PIOs remit sale proceeds?

Ans.

  1. Repatriable – proceeds of repatriable investments may be credited to NRE/FCNR(B)/NRO accounts of the NRI/PIO
  2. Non-repatriable – Proceeds of non-repatriable investments can only be credited to NRO account.
  • Can shares purchased under PIS be transferred to other private arrangements?

Ans. Shares purchased on stock exchange can only  be sold on stock exchange. Such Shares cannot be transferred either by way of sale under private arrangement or by way of gift to a person residing in India or otherwise without prior approval of RBI (exception: NRIs can gift such shares to their relatives as defined in Section 6 of Companies Act, 1956 or to a charitable trust duly registered under the laws in India).

  • Are intra-day transactions permitted in cash segment?

Ans. No. NRI investors are required to accept delivery of shares purchased are required to give delivery of shares sold and hence short selling is not permitted.

  • Is trading in currency derivative segment allowed for NRIs/PIOs?

And. No. Only “a person resident in India” as defined in section 2(v) of FEMA Act 1999 can participate in currency derivative segment of the Exchange.

  • Can a trading account be opened for NRIs who have been allotted shares under Employees Stock Option Scheme (ESOP) Scheme?

Ans. Listed companies have the grant to issue stocks under ESOPs to its employees or to the employees of its JV or wholly owned subsidiary abroad who are NRIs (exception: Citizens of Pakistan). The only purpose for which trading accounts for persons residing outside India can be opened   is for selling of shares acquired under ESOP Scheme.

  • What is the monitoring mechanism in place for NRI investments?

Ans. RBI monitors other investment position of such individuals with listed companies, as reported by designated banks, on a day to day basis. When the total holdings of NRIs/FIIs under PIS reaches the cap of 2 % below the sectoral cap, RBI issues a notice, also referred to as a caution list, to all designated branches cautioning that any further purchases of shares of the given Indian company will compulsorily  require prior approval of RBI.

Once the shareholding by such investors reaches the ceiling / sectoral cap /statutory limit, RBI places the company on a ban list. Once that happens, no NRI can purchase the shares of the company under PIS. List of caution/banned RBI scrip is available at http://www.rbi.org.in/scripts/BS_FiiUSer.aspx

  • If NRIs eventually becoming residents of India, are they required to change the status of their holding from non-resident to resident?

Ans. Yes it is compulsory for such individuals to inform regarding the change in status to the designated dealer branch through which they had invested in the PIS and the Depository Participant (DP) with whom they had opened the demat account. Eventually, a new demat account in the resident status will have to be opened and securities will have to be transferred from the NRI demat account to the resident demat account and finally the NRI demat account will have to be closed.

  • In case a non-resident Indian becomes a resident India or conversely, will they be required to open a new trading account?

Ans. Yes. The Trading member will be required to open a new trading account which needs to be uploaded with the new category code (01 – Resident Individual) & (11 – NRI) as may be applicable on case to case basis.

 

NRI Investment (Part One): Investment In Mutual Funds

If a person spends more than 182 days living outside India, their status changes to that of a non-residential Indian or NRI. If such individuals wish to invest in Mutual Funds (MF) in India, they first need to convert their savings/salary account to non-resident ordinary or NRO account. This step merely changes the status  of the account while the account continues to operate the same. An NRI will also be required to do a fresh MF KYC (know your customer). Pertinently, no special approval of RBI is required for NRI’s to be able to invest in MF’s in India. Investments can be done on a non-repatriation basis through an NRO account or Non Resident Rupee (NRE) account/Foreign Currency Non-Repatriable (FCNR) account whereas to be able to invest on a repatriable bases,  an NRE savings account or FCNR account is required.

All NRI investments in India are governed by Foreign Exchange Management Act, 1999 (FEMA) apart from being required to mandatorily comply with Securities and Exchange Board of India (SEBI) regulations and Foreign Direct Investment (FDI) policy. Presently, NRIs are allowed to invest both directly and indirectly through multiple routes whereas NRIs and persons of Indian origin (PIO) are allowed to invest in India Companies under portfolio investment schemes routes (PIS). NRI’s and PIO’s are also allowed to – purchase mutual funds; invest in private equity funds; use offshore FPI route; invest in debentures of Indian companies and government securities.

As of 2018, SEBI has eased norms for NRI’s based on Khan Panel’s recommendations and thereby they are now allowed to invest as FPI’s if a single holding is under 25% and a ground holding is under 50% in funds.  The committee had recommended that NRIs, OCIs and resident Indians should be permitted to hold non-controlling stakes in FPIs and there should be no restriction on them managing offshore funds. Notably, the panel has suggested more sweeping changes on account of which a high powered committee has been set up by SEBI to come up with suggestions that would facilitate in the merging of  NRI and PIS routes with that of FPI’s and to subsequently have one investment avenue for all NRI’s.

NRIs and mutual funds

Mutual Funds investment by NRI’s have to be in adherence to FEMA. Indian investment market comes with higher interest rates and hence, even the risk averse NRI’s can certainly befit out of it. NRI’s can start with equity funds, debt funds or hybrid funds.

  • Mutual fund regulations for NRI
  • KYC

There are two requirements for NRIs to start investing in MFs in India: PAN Card and rupee-designated NRO or NRE bank account. The documents needed to complete the one-time KYC process include: PAN card copy; passport copy (front and back page); foreign address proof, an Indian address proof (cancelled cheque or bank statement from NRE or NRO account); person of Indian origin or Overseas Citizen of India (OCI) certificate- needed for investors who are not Indian citizens.

  • FIRC (Remittance Certificate)

Foreign Inward Remittance Certificate needs to be annexed in case payment for MF has been made by a cheque or draft. In case the same is not possible, a letter from bank confirming the source is considered sufficient.

  • Redemption

After deducting taxes, the Asset Management Company (AMC) credits the corpus (investment + gains) one gets after fund redemption. The AMC may transfer the corpus via cheques as well. If an NRI wishes to and has hence opted for non-repatriable investment, some banks allow the redemption to be credited to NRO/NRE account.

  • Procedure for investment

As stated earlier, the first step for NRI’s to be able to invest in India is to open an NRO account, NRE Account or FCNR account with an Indian bank as the asset management companies in India cannot accept investments made by foreign currency.

Below are some of the methods of investment that can be opted from:

  • Self/Direct

NRIs can themselves undertake normal debiting and crediting transactions for ordinary banking channels. The application  containing the required KYC details must  indicate that the investment is on a repatriable or non-repatriable basis. In case the bank requires in-person verification, the same can be done by visiting an Indian embassy in the NRI’s resident country.

  • Through Power of Attorney

Another common and easy method that can be employed is to have someone else invest on behalf of an NRI. Mutual fund companies allow power of attorney (PoA) holders to invest on behalf of an NRI and to also take other decisions pertaining to their investments. Pertinently, signatures of both the NRI investor and PoA have to be mandatorily present on the KYC documents to make the investment.

  • Tax implications

The gains from equity mutual funds are tax-free for an investment of over 1 year. Tax is deducted at the source (by the bank) on the profits/capital gains earned on the invested amount for holdings exceeding one year. Currently, 10% LTCG tax is deducted. For a lesser period, 15% short term capital gain tax is deducted.

In case of debt funds, banks add the gains (made in less than 3 years) to the income of the investor. Holding the fund for more than a period of 3 years results in 20% tax on the gains with indexation benefit. If an investor has not opted for indexation, the tax will only be 10%.

Pertinently, India has signed double taxation avoidance treaties with multiple countries including the Unites States of America and Canada and hence, NRIs do not have to pay double tax when they invest in India.

  • Benefits of mutual fund (MF) investments –
  • Easily manageable online:

Investors can easily buy, redeem, switch, transfer or withdraw MF online from the comfort of their homes in their residence country. Investors also receive  periodic account statement (CAS) via email. Additionally, asset management companies post portfolio disclosures online to keep all investors informed.

  • Rupee appreciation increases the scope for profit:

Appreciation of INR value with respect to that of resident country’s currency leads to more profit for the foreign investor. For instance if an NRI invests 1000 units of a foreign currency at an exchange rate of Rs. 100 for 1 such unit. An investor can reap good benefits even if value of rupee depreciates. Furthermore, NRI’s and PIO’s can get similar benefits by investing in India-based MF in their residence country.

  • List of fund houses that accept investments from NRIs based in US and Canada
  • Birla Sun Life Mutual Fund
  • SBI Mutual Fund 
  • UTI Mutual Fund
  • ICICI Prudential Mutual Fund
  • DHFL Pramerica Mutual Fund
  • L&T Mutual Fund
  • PPFAS Mutual Fund
  • Sundaram Mutual Fund

Appointment Of Arbitrators By Indian Public Sector Undertaking: An Overview  

India’s Public Sector Undertakings (“PSU”) are involved in a large number of disputes as the same is a natural corollary of being a major contributor to an economy’s GDP.  Appointment of an arbitrator for matters involving PSU’s has forever been heavily debated amongst various Courts and academics because of the fact that PSU’s have been notorious for appointing their current or former employees as Arbitrators. How the same affects independence and impartiality of arbitral proceedings merits little explanation.

Independence and impartiality constitute the very foundation for sound Arbitral proceedings. The impartiality of an arbitrator resonates the most with the quality of the arbitral award eventually passed. Another germane issue that is preserved by an equitable arbitrator is that party autonomy in arbitratral proceedings is preserved, which by far, is the most imperative feature of the entire arbitration machinery. Before the Arbitration and Conciliation (Amendment) Act, 2015 Amendment Act“) came into being, the law was straight about the fact that disputes have to be referred to the named arbitrator and the named arbitrator alone and a party had only a small window to take the defensive that the named arbitrator is impartial. Before the Amendment Act came into being, an arbitrator’s appointment could be challenged if there were circumstances “that give rise to justifiable doubts as to his independence or impartiality“, however, the Act did not lay down any statutory guidance on what these ‘circumstance’ were and hence the same had to be decided on a case to case basis which prevented streamlining of this gaping issue.

Considering this issue caused plenty of ruckus in court rooms, a strong necessity was felt to amend the law in this regard.

Amendments to the Arbitration Act 1996

The Law Commission of India (“Commission“) submitted its’ 246th Report (“report”), recommending pathbreaking amendments to the Arbitration and Conciliation Act 1996 (“1996 Act“). The reasons mentioned by the Commission were aimed, inter alia, at making settlement of disputes through arbitration, cost and time effective.

The commission in the report also addressed the issue of “neutrality of arbitrators” as the same is highly crucial for effective arbitration proceedings. Consequently, two schedules were added to the Amendment Act namely: The Fifth and the Seventh Schedule that contain 34 and 19 grounds respectively, adopted from the IBA Guidelines on Conflict of Interest in International Arbitration, 2010. 

  • Fifth Schedule serves as a “guide” in determining whether justifiable doubts as to arbitrators’ independence and impartiality exist or not as under Section 12(1)(a) of the Act.
  • Seventh Schedule contains ‘ineligibility’ grounds. If the arbitrator is found to fall within any of the 19 categories specified, he would be deemed ‘ineligible‘ for appointment pursuant to Section 12(5) of the Act or, if already appointed, his appointment would be void (parties may opt to waive the sub-section and therefore the Seventh Schedule but only by means of an express written agreement, once the dispute has arisen).

Following are some of the modes of Appointment of arbitrators by PSU’s along with their status post the Amendment Act:

  1. Sole arbitrator is a ‘named person’ (within the disputing Government entity/PSU  –  Invalid

The “named person” is usually an officer occupying a high post or designation and was the most commonly found arbitrator appointment procedure in PSU contracts. The legality of these clauses was recognized by the Supreme Court but in the pre-amendment era. However, presently, these clauses are no longer permissible under Section 12(5) read with Entry 1 of the Seventh Schedule. As already stated, the parties can opt out of the application of Schedule Seven by an expressly written agreement and only once some dispute has arisen.  

  1. Sole arbitrator is a ‘named person’ outside the disputing PSU, but is employed within the general Government apparatusValid

Such clauses are valid as the arbitrator is not directly related to the disputing PSU but rather, is employed with a Government Department or a different PSU. As long as none of the other grounds listed in the Fifth and Seventh Schedule are not attracted, the eligibility of the arbitrator stands good in the eyes of law.

  • Either sole or party-nominated arbitrator is a former employee of the disputing PSUValid

There has been some uncertainty surrounding to this issue as various courts have taken dissenting stands for instance:

  • Delhi Court has held that the appointment of current and/or retired employees of one of the disputing party as arbitrators would “definitely give rise to justifiable doubt[s] as to his independence and impartiality”. Contrarily,
  • Punjab and Haryana High Court has held that former employees are not de-facto barred from being arbitrators under the Act, given: (i) they do not have any other past business relationship with the party; and (ii) no justifiable doubts as to their impartiality exist or have been raised by the party aggrieved.
  • The Madras High Court and the Delhi High Court have taken similar stand (retired official cannot be barred from being appointed as an arbitrator), although on different grounds.

However, the appointment of a former employee is not categorically contrary  to the Amendment Act. Entry no. 1 in the fifth schedule and entry no. 1 in the seventh schedule are identical and they read as following: “Arbitrator’s relationship with the parties or counsel – 1. The arbitrator is an employee, consultant, advisor or has any other past or present business relationship with a party. “It is clearly conceivable that the language of entry 1 indicates at a distinction. The bar in section 12(5) is to a person who is currently engaged as an employee, consultant, or advisor. There is no bar against a former employee, consultant, or advisor. The words “or has any other past or present business relationship with a party” does not include a former employee, consultant, or advisor of the party in its ambit as the word “other” refers to a relationship other than that of an employee, consultant, or advisor. Hence, the bar is applicable in respect of a person who has had a business relation with a party other than as an employee, consultant, or advisor. Furthermore, Entry no. 31 of the Fifth Schedule states as following: “The arbitrator had been associated within the past three years with a party or an affiliate of one of the parties in a professional capacity, such as a former employee or partner.”. The use of expression “former employee” indicates that if the proposed arbitrator has ceased to be an employee of the disputing party within the window of three years, there would be justifiable doubts to the independence or impartiality of the arbitrator and not otherwise.  Additionally, is no such absolute bar as under the Seventh Schedule.

Voestalpine Schienen GmbH V Delhi Metro Rail Corporation Ltd (“Voestalpine case”)

Question before the Hon’ble Supreme Court – Validity of appointment of retired government employees as an arbitrator from a panel maintained by the disputing PSU.

The Court held that the mere fact that an individual has earlier rendered services to the disputing party would not de-facto malign the sanctity of such experienced and qualified individual’s independence. The Court further observed that for this very reason, the amendment act did not categorically bar the appointment of such individuals as arbitrators. The Court further observed that empaneling such experienced personnel’s serves the critical requirement of having the technical aspects of the dispute effectively resolved. The Court further observed that the respondent (PSU) should strive to empanel more and more experienced personnel’s, while constituting a panel of people who could be appointed as an arbitrator so as to give more choices to the other party while selecting an arbitrator.

  • Arbitration clause provides for selection of the arbitrator by an ‘appointing authority’ who is a senior official of the disputing PSUValid

This practice is acceptable as long as the arbitrator eventually appointed is not in contravention of the conditions laid down in the amendment act. Traditionally, the persona designate would appoint a senior officer or departmental officer of the disputing PSU itself but the same is no more an acceptable practice in light of the amendment act.

  • Arbitrator is appointed from a panel maintained by the disputing PSU Valid

As already discussed, this is an acceptable mode of appointment as long as the Supreme Court guidelines in the in the Voestalpine case are followed.

The Court laid down two pertinent requirements for appointment of arbitrators from a panel maintained by a PSU:

  • First, the panel must be ‘broad based’. For instance: individuals from other government PSUs and government undertakings that are unconnected with the disputing parties; individuals of high repute from the private sectors; other individuals from the legal community; and
  • Second, the other party should have the leeway to opt from the ‘broad based’ panel, rather than a small short-list as in instant case. The Court in the instant case struck down that portion of the arbitration clause which required the PSU to prepare a short list of five arbitrators. This direction removes any apprehension of the Government picking its favourites.

Takeaways

While there is still some uncertainty surrounding this issue, PSU’s still need to take another look at the appointment process in their contracts to ensure that they are not in contravention with the Act due to their traditionally acceptable practices of appointment of arbitrators. Furthermore, both, domestic and foreign parties who are looking to enter into contracts with Indian Government entities and PSUs must take effective steps to inform themselves of the amended conflict of interest norms, to ensure that the arbitrator appointment process in their contract is enforceable and the purpose of the amended act, i.e. cost and time effective dispute redressal, is secured to the utmost extent by avoiding such avoidable court proceedings at the very inception of arbitral proceedings itself.

Academic Pursuit V/S The Issue Of Political Correctness

“If a country is to be corruption free and become a nation of beautiful minds, I strongly feel there are three key societal members who can make a difference. They are the father, the mother and the teacher.” – Dr. A.P.J. Abdul Kalam

In the life of a student, living in the practical realm is of utmost necessity. A student will only be able to develop when he or she can skim through the theoretical studies and have pragmatic inter linkage thereto. In fields like medicine and law especially this pragmatic approach towards the subjects is indefeasible.

Thus, when an M.B.B.S student is given to tackle practical situations during the course as  a part of the curriculum, the same facilitates and develops the cognitive faculties to an extent that aids the receptivity of the student towards the real life situations as and when they arise. Likewise, goes for an LLB student, you cannot keep law out of society. Law and society are integrally interlinked. The course of legal studies in India or all over the world for that matter is more or less case study based. It is an accepted practice, to give law students situational based questions and leave to them to give the answers by applying the relevant provisions of law to those situations and frame an appropriate answer.

The Bar Council of India has time and again revised directions to the law institutions holding that legal education cannot be imparted through channels where there is no interaction inter se the teachers and students, no classrooms, no requirement for attendance and no practical exposure. Law is one of such courses where academic education is considered incomplete without practical exposure be it through internships or moot courts or otherwise. The students who eventually are going to deal with the rights, duties and lives of the people when they become lawyers have to be trained with the practical exigencies and hand-holdings by their seniors, and, this is why not just the students are required to undertake internships but even practicing lawyers and sitting judges are often called upon by the Universities for judging moot courts which forms part of the basic tenets of the modus of imparting legal education.

Recently, a lot of controversy arose when such a situational based question was given in the December, 2018 End term Examination of the University School of Law and Legal Studies, IP University College, Law of Crimes Paper; the question read as,

“Ahmed, a Muslim kills a cow in a market in the presence of Rohit, Tushar, Manav and Rahul, who are Hindus. Has Ahmed committed any offence?”.

This question is ordinarily seen by any law student would make his or her mind skim through the relevant provisions of the criminal legal regime, like section 153-A, 295-A IPC or even section 298 of the IPC, or other provisions of the Prevention of the Cow Slaughter Act (of the respective states). Pursuant to this paper, the esteemed University who by virtue of teaching law is expected to act in a rationale manner actually ended up issuing an Office Order dated December 20, 2018 against the teachers who had framed the said question thereby debarring them from getting involved in the task of setting up and moderation of question papers for a period of six semesters from thereon. In addition to this, making optimum use of this situation for bringing politics into the picture the Deputy CM on January 1, 2019 issued an order stating :

This is a serious matter where the basic spirit of the Constitution of India is being violated. This cannot be allowed. Merely issuing press release or barring the responsible person from making the question papers for few semesters would not be sufficient. Responsibility should be fixed and responsible persons to be terminated immediately. Cover up exercise cannot be tolerated after such a huge lapse.”

Subsequent to this order, the University called for a Board of Management Meeting citing the agenda to be to discuss the  termination of the Assistant Professors. The professors therefore had approached the Honorable High Court of Delhi, wherein the learned counsels representing the Assistant Professors put-forth arguments before the Honorable Court, thereby refuting the allegations of inciting communal violence and stated that the sole purpose of asking this question was to check the understanding of the students with respect to the criminal legal regime in light of the application of the relevant provisions of law. The question was framed in a fashion that it had to be answered on basis of the case laws and provisions of law, no personal opinion of the students or any person in any manner was ever sought. And, when there is no independence granted to the student to express their opinion on the situation and when the students were well constrained within the frame of the legal provisions and the case laws, how can the same be said to be inciting communal violence. The Honorable Delhi High Court thereafter, accepting the contentions of the counsels representing the professors granted an interim stay in their favor thereby putting at halt any kind of termination or adverse action against the professors sought to be taken by the University. Thus, the Delhi High Court in the true sense upheld the echelons of justice and ensuring that justice was not denied.

An article published in “The Indian Express” on December 12, 2019 cited a statement made by the Education Minister that, “How could such a reprehensible question with a communal overtone be framed for an LLB exam?” Such a reaction is seriously questionable and condemned especially, when a similar question formed part of the GGSIPU End Term Examination paper on the Law of Crimes during November-December 2016 also. The question then read as,

“ ‘X’ a Mohammedan kills a cow in an open place in the presence of 4-5 Hindus. What offence did he commit?”

Thus, the rage raised in pursuance to the 2018 paper was certainly unneeded and uncalled for and is a sheer demonstration of exploitation of academic institutions of our country for political ends at the hands of the ruling government.

This is not the first time that political manifestations have been made keeping the gun on the shoulders of academic institutions, the difference just being that earlier such attacks were made on the administrative domain of the institutions like the case of JNU, and this time a targeted attempt was made to disrupt the academic affairs of an Institution.

This leaves the public with a question as to whether at all is there any academic freedom in our country, or is the country to be governed as per the whims and fancies of the government thereby being a mere facilitator for the political gains of the few. The scholars, teachers should be vested with the freedom to not only teach but also frame the most suited questions relevant to the subjects freely. These time and again attempts from the government’s side to interfere with the affairs of the Academic Institutions whether be in the ordinary executive and administrative sphere or the academic sphere (like in the present GGSIPU case) should be condoned. The Government should not be given the liberty to exploit these Institutions for their political gains. May be, the routinely interference of the government with the affairs of JNU has  provided them with a leeway to now even hamper the academic sphere, but this certainly shall be condoned in strict sense.

The teachers form the building blocks of the nation due to the responsibility vested in them to train and educate the children of the country who are the future of the nation. Setting up and moderation of the question papers infact, should be considered to be as a part of the right to dignity of the teaching profession, and actions debarring teachers from being part of the paper setting team should be strongly discouraged, especially, in light of situations like the present one wherein there is a clear attack intended solely for the purpose of deriving political mileage.

Eugene Vinaver, Professor of French Language and Literature at the University of Manchester, in an address to the faculty of the University stressed on the uniqueness of the University as public institution and observed:

“That the condition under which academic work can prosper can never be equated with the political structure of a state or the administrative structure of an army or, for that matter, the rational structure of a large concern. Efficiency in all such enterprises requires within certain limits the abandonment of equality. In an academic body, on the contrary, efficiency is strictly proportionate to the degree of individual freedom, for such is the nature of human intellect that when its freedom is violated, destruction ensues.”

Academic freedom here is required to be distinguished from University autonomy, the former relates to the professional freedom of the teaching fraternity in the matters of prescribing the syllabus and curriculum, conduct of examinations, teaching, valuation etc., whereas the latter majorly relates to the university being a self governing institution making decisions  for its affairs.

Furthermore, it is extremely imperative for us to ponder over that every human has two key roles to be played in a society, the first one being discharging the obligations as a citizen, and, the second one being, discharging responsibility as a functionality, when functioning in the professional domain does not mean that the person is not sensitive as a citizen, there certainly is that sense of sensitiveness, however, due to the demand of the functionality which is required to be discharged requires the person to undertake decision making or conduct certain activities which may be peculiar to the discharging of obligations qua the profession and the same cannot be adjudged as insensitive by the society. A judge as a human being in the shoes of a citizen might not even want to kill a mosquito, however, the profession demands him to even levy death penalty on the offenders, thus, while discharging this professional responsibility one can’t target judge on grounds of being insensitive. Likewise, it is unfair to target the professors by raising such controversies when all that they are doing is discharging their professional obligations. If posed with constant   fear of criticism in this manner, how can a law professor be expected to teach, when they know they would be targeted with political criticism. This act in fact compromises the principles of academic freedom to a large extent. Under such circumstances, how can the teachers even be expected to discuss case laws and teach sections like 153A, 124A, 295A of the IPC, 1860. Thus, in order to impart the ideology behind these sections it is imperative for the teachers to hold discussions in this respect and for better clarity on the ingredients thereof, to even deliberate using the existing case laws. And, the need to preserve this right to them is necessary. There has to be certain threshold of academic freedom required to be maintained.

It is of utmost necessity that now, we as a nation initiate taking a stand for protecting the academic institutions of our nation and prevent them from being exploited at the hands of the few and ensure that their sanctity is well preserved, maintained and protected. It is further important for us to ensure that the profession of teaching remains as noble as it has ever been and at the same time it is for us to ensure that utmost independence is given to the teachers to not only, frame whatever kind of questions they deem fit for imparting the best of knowledge to their students, but also, for using the best of the ways for imparting education and  for independence to use the best of their capabilities to develop the scientific temper, humanism and the spirit of inquiry and reform among the individuals as well enshrined under our Indian Constitution as well.

Highlights Of The Arbitration & Conciliation (Amendment) Bill, 2018

The stride to make India a hub for International Commercial Arbitration and to make Arbitration a preferred mode for dispute resolution, led to the first amendment in the Arbitration and Conciliation Act, 1996 (“Act”) on 23.10.15. The amendments made in the Arbitration and Conciliation (“Amendment”) Act, 2015 (“Amendment Act, 2015”) brought commendable changes to tackle several issues such as making arbitration more cost-effective and less time-consuming. It, however, failed to tackle certain fundamental issues such as the importance of institutional arbitration centres in today’s day and age of there being predecessors, playing key role in resolution of disputes through arbitration, such as of International Chamber of Commerce, The London Court of International Arbitration, Singapore International Arbitration Centre, Hong Kong International Arbitration Centre etc. Another pertinent lacuna was the applicability of the Amendment act on Court proceedings initiated prior to 23.10.15

In order to address and tackle the above impediment, New Delhi International Arbitration Centre Bill, 2018 was introduced in the Parliament on 5 January 2018. The Arbitration & Conciliation (Amendment) Bill, 2018 (“bill”) seeks to implement the suggestions made by the High-Level Committee (“HLC”), chaired by Justice Srikrishna. The recommendations intend to firstly, to do away with certain loopholes left unplugged in the first round of amendments in the Amendment Act, 2015, and to further make India a hub for International Commercial Arbitration by promoting Institutional Arbitration. The HLC had inter alia recommended that the International Centre for Alternative Dispute Resolution should be taken over, with a complete restructuring of its governance and further be re-branded as a center of national importance for arbitration.

Amendments proposed in the bill

The core objective of the bill is to promote institutional Arbitration by setting up an independent statutory body to govern all the arbitration matters in India i.e. both domestic and international.

Following are the core changes intended to be brought through the present bill:

Establishment of Arbitration Council of India (“ACI”)

  • ACI is to be presided over by a Judge of the Supreme Court or Chief Justice or Judge of any High Court or any other eminent person, which would include eminent academicians etc. and other government nominees as well. It will be entrusted with grading arbitral institutions and accrediting arbitrators. Apart from creating a conducive ecosystem for Arbitration, mediation, and conciliation, it will be given a task of creating and maintaining a depository of all the arbitral awards.
  • The HLC recommendations also propose to incentivize institutions who aren’t performing well. The same is intended to promote competition and to meet the expected exponential demand for such institutions.
  • For the aforesaid purpose, the ACI will be required to formulate proper norms and guidelines to ensure the establishment, maintenance, and operation, and to further set a standard with respect to all arbitration related matters.

Appointment of Arbitrators to be performed by institutions

Irrespective of whether the parties have opted for an institution’s rule in their agreement, the amendment is set to facilitate the appointment of arbitrators by the respective institutions only. This will lead to minimum court intervention with respect to arbitration proceedings and will further, not only expedite the process of appointment of an arbitrator, but also facilitate in appointing an arbitrator best suited for any given matter.

Timeline for completion of Arbitral proceeding relaxed for both Domestic and Commercial Arbitration

The prior period of 12 months, as per the Amended Act, 2015, for both Domestic and International Arbitration, was found to be less, since the time from the arbitrator entering into reference till the time of completion of pleadings consumes a substantial amount of time, which lead to the Amendment in Section 29A of the Act.

As per the proposed amendment in Section 29A of the Act, the time limit of 12 months for Domestic arbitration matters will start from the date the parties are done with their pleadings.

It shall also effectively exclude all international commercial arbitration matters from a set timeline for making an award.

The proposed amendment will drastically improve the quality of awards, especially with respect to more complex International Commercial Arbitration. The experience from 2015 amendment is evident that it has become a common practice for parties to seek an additional extension of 6 months for completing arbitration proceedings. The change in the time frame from the arbitrator entering into a reference to the completion of pleading will lead to eradicating the extra step.

Confidentiality provision for arbitral proceedings and immunity provision for the Arbitrator

A need was felt to extend the confidentiality provision as available for conciliation proceedings under section 75 of the Act.

  • A new section, 42A will be inserted and the same is to ensure and direct that complete confidentiality is maintained for all arbitral proceedings except the part when it comes to the award.
  • Section 42B will be inserted to protects an arbitrator from suits or other legal proceedings for any action or omission done in good faith in the course of arbitration proceedings. The same is intended to protect the arbitrators as long as the breach and omission are done in good faith.

  Despite the bill providing for confidentiality provision, the same does not contemplate the consequences of the breach thereof.

Amendment Act, 2015 to have prospective effect, unless agreed otherwise by the parties

Introduction of section 87 to clarify the much-disputed issue of whether the Amended Act, 2015 has a prospective or otherwise. Section 87 provides that unless parties agree otherwise, the Amendment act, 2015 shall not apply to the following:

  • arbitral proceedings that have commenced prior the coming into force of the 2015 Amendment;
  • Court proceedings arising out of or in relation to such Arbitral matters, irrespective of whether they commenced prior to or after the coming into force of the Amendment Act, 2015.

The following is being considered as a welcome relief since there are a host of conflicting judgments throughout the country by various High Courts.

Remarks

Though the Bill proposes several much-needed amendments, there is still a wide grey area that needs to be addressed by the legislature before the proposed bill can be passed as a comprehensive Act. Some of those issues include – uncertainty about the scope of ACI’s role and its power as the same has not been clearly defined in the Bill; Whether the institutions like ACI will make section 11 of the Act redundant; there is no clarification with respect to Indian parties wanting to opt for foreign seated arbitration while still being bound by the Indian Law; with respect to section 42A, there is no clarification as to what would happen when the proceedings progress to Section 34 and the court requisitions the record of the arbitral proceedings. Hence, further contemplation is required to ensure that the said voids are not left unfilled until the next amendment.

Critical Analysis of the Motor Vehicle Amendment Bill, 2017

Critical Analysis of the Motor Vehicle Amendment Bill, 2017

The Motor Vehicle Amendment Bill, 2017 which was passed by the Loksabha on April 10, 2017, has been stalled in the Rajyasabha for over a year despite road safety activists pushing for urgent passage of the same. The Bill is likely to be passed in the monsoon session of Parliament and its approval is of national importance for the following reasons:

(i) The Global Status Report on Road Safety, 2018 released by WHO provides that the road crash fatalities in India is at 3 Lakh, the highest in the world. Furthermore, the MoRTH’s Report, ‘Road Accidents in India, 2016 records the number of accidents in India to be.  1.46 lakh annually. This is extremely disconcerting especially considering that India only accounts for 2% of the global vehicle population. In light of the same, it is extremely pertinent to amend the existing law so as to curb the growing number of accidents and consequent fatalities.

(ii) The MV Act is three decades old and is not contemporaneous to the existing technology. Consequently, the outdated provisions of the Motor Vehicles Act, 1988 are failing to deter the increasing fatalities due to traffic violations.  Hence there is a dire need to bring in radical changes to the Law.

(iii) The new Bill is a great step towards strengthening transportation and road safety in India since roads are vital for transportation in India and carry 655 of goods and 90% of passengers.

(iv) The Proposed Bill is also the need of the hour so as to attain the UN mandate under the Brasilia Declaration to reduce road accidents up to 50 percent by 2020.

Main proposals in the Bill:

  • Introduction of a Road Safety Board

The New Bill provides for a National Road Safety Board under Section 215D. The Board has been set up with an objective to render advice to the Union as well as the State Government on aspects of road safety and traffic management including standards of road design, vehicle maintenance, road maintenance, motor vehicle standards etc.

  • Centralized Digital Licensing System

The new Bill takes into account the digital growth of the country and provides for a centralized digital licensing System which envisages the following:

  1. Section 25A provides for setting up of a  digital National Register of Driving Licenses, the identification of which would be on the basis of UID System. The Register would subsume all the State Registers and hence, would enable the maintenance of a comprehensive register of all the licenses issued in the country. To ensure the success of the register, Section 25H specifically provides that no driving licenses shall be valid unless it has been issued a unique driving license number under the National Register of Driving Licenses.
  2. The Bill also envisages the introduction of Learner’s license online and automated driving tests.

Outcome:

An online licensing system will reduce the increasing number of touts involved in obtaining a driving license.  It will also curb the practice of obtaining multiple licenses from different States which was earlier possible due to the lack of a centralized database.  Furthermore, it will help to bring in uniformity with respect to driving licenses throughout India.

  • Provisions Regarding Offences Committed by Juveniles

The Bill seeks to introduce Section 199A wherein Guardians of the Juvenile / Owner of the vehicle will be held responsible for traffic violations by the juvenile. The onus will be on the guardian/ juveniles to prove that the offense was committed without their knowledge or they tried to prevent it.  Additionally, the guardian or owner of the vehicle shall be held guilty with a fine of Rs.25000 and or imprisonment of up to 3 years. Juveniles committing traffic violations will be tried under the Juvenile Justice Act. The registration of the vehicle shall also be canceled.

Currently, there are no provisions pertaining to offenses committed by Juveniles. Allowing unauthorized person the driven vehicle imputes a penalty of Rs.1000 and or imprisonment of up to three months. Provisions of IPC are also invoked in certain instances.

The stringent provision is a result of 18738 accidents in India involving underage drivers.  (as per 2016 MORTH Report). It is pertinent to note that 5383 of the said accidents were fatal. The amendment will ensure that the vehicle owners/guardians will not allow their vehicle to be used by minors, resulting in a reduction of the number of offenses committed by juveniles.

  • Protection of Good Samaritans

The Bill seeks introductions of Section 134A to protect people who aid accident victims from criminal and civil liability, also known as good Samaritans. The section gives them an option not to disclose their identity to policy or medical personnel. This is in tune to the directions of the Honourable Supreme Court in Save Life Foundation v Union of India wherein the Honourable Court had held that civil/criminal liability cannot be imputed on any person who brings the injured person the hospital in accident cases. Similar guidelines have already been issued by MORTH, binding on all States and UTs.

The amendment will ensure that the people who witness the road accidents will wilfully help the accident victims without any fear of civil or criminal liability. On the flip side, the lack of provision for examination of good Samaritans may lead to people with bad intention of taking advantage of the provision.

  • Motor Vehicle Accident Fund

The Bill also envisages the setting up of a Motor Vehicle Accident Fund which provides compulsory insurance cover to all road users in India for certain types of accidents by the Government.

The need for such a fund was widely debated in the Parliament. The Government is yet to come up with a rational answer.

  • Accountability for Poor Roads

The Bill also envisages the insertion of Section 198A to impute accountability on contractors, consultants, and civic agencies for faulty design, construction or poor maintenance of roads leading to accidents.  This will result in a penalty of up to Rs. One lakh in such cases.

The new provision is a laudatory step towards improving the quality of roads in India. The provision was introduced to curb the increasing number of accidents and deaths caused due to engineering/designing fault. As per the MORTH’s Report (Road Accidents in India, 2016), 1289 accident were caused in India due to engineering faults, killing 589.

  • Provision for Recalling Vehicles with Substandard Components

Under Ss. 110A and 110B, the Bill empowers the Central Government to recall vehicles with substandard components/engines, posing a threat to the environment, the driver, occupants of the vehicle or other road users. Additionally, testing agencies or owners (comprising of a minimum specified percentage) can report defects to the central Government so that the Government can then make a recall order.  Vehicle Users who are affected by such orders are also entitled to reimburse the buyers for the full cost of the vehicle or replacement of the defective vehicle with a similar or better vehicle. Manufacturers can also be fined upto Rs. 500 crore for sub-standard products.

The insertion of S. 110Aand 110B will result in a paradigm shift in the transport industry in terms of recall of vehicles.

  • Enhancement of Fine for Several Offences:

The Bill also enhances the fine for the following offences:

  1. Minimum fine for drunk driving (From Rs. 2000 to Rs. 10000)
  2. Fine for rash driving (From Rs. 1000 to Rs. 5000)
  • Driving without a license (From Rs. 500 to Rs. 5000)
  1. Fine for over speeding ( From Rs. 500 to Rs.5000)
  2. Fine for not wearing seatbelt (From Rs. 100 to Rs. 1000)
  3. Fine for talking on a mobile phone while driving (From Rs. 1000 to Rs. 5000)
  • Fine for travelling without ticket on public transport (From Rs. 200 to Rs 500)
  • Fine for disobeying the orders of authorities (From Rs. 500 to Rs. 2000)
  1. Fine for unauthorized use of vehicles without license (From Rs 1000 to Rs. 5000)
  2. Fine for driving without license (From Rs. 500 to Rs. 5000)
  3. Fine for driving despite disqualification (From Rs. 500 to Rs. 10000)
  • Fine for not wearing helmet – (From Rs. 100 to Rs. 1000 (along with disqualification of license for three months)

The stringent penalty will result in curbing traffic violations as they will think twice before committing any offense. However, the stringent penalties will only enable in obtaining the objectives if the enforcement agencies act strictly. It is pertinent to ensure that corruption is kept at check as the increase in penalty gives opportunities to enforcement agencies to collect bribes lower amounts.

  • Introduction of New Penalties

The Bill also introduces new penalties to ensure stringent punishment which will act as a deterrent and prevent road users from driving recklessly:

  1. Fine for driving oversize vehicles would be Rs. 5000 and Rs. 1000 for LMV.
  2. Fine for aggregators (violating licensing conditions – Rs. 1,00,000
  • Fine for not giving way to emergency vehicles – Rs 10000
  1. Fine imposed on guardians of juveniles for offences committed by Juveniles ( Rs. 25,000 with 3 years’ imprisonment)
  • Categorisation of Validity Period for Vehicles

The new Bill introduces new categories for validity period of driving licence. If the driving license is issued to a person under the age of 30, it would be valid till he turns 40. If driving license is issued to a person between the ages of 30 and 50, the license would be valid for a period of 10 years. If the license is issued to a person between 50 and 55 years, it will be valid until the person turns 60. If the Dl is issued to person above 55 years, it will be valid for five years. (This can be contrasted with the current provision wherein a DL is valid for 20 years until a person turns 50, and for 5 years after the age of 50)

The new categorisation reasonably classifies validity period of driving licenses on the basis of age of individuals, thereby ensuring that people who are not physically capable of driving vehicles obtain licenses for driving.

  • Introduction of Aggregators

Currently, app based taxi services were to register themselves as taxi operator under obsolete laws requiring them to obtain permits of different kinds to operate.The new Bill seeks to introduce a concept of aggregators who have been defined as “a digital intermediary or market place for a passenger to connect with a driver for the purpose of transportation”, thereby giving statutory recognition to transport aggregators. E.g. cab service providers like Ola, Uber.

This is a laudable state as most app based taxi services were receiving flak from different State Government for not registering themselves in their respective states as taxi operators. This will not only enable these aggregators to move our of the web of legal confusion that they have been tangled in but also enable them to become a business entity by themselves.

  • Introduction of Safety Provisions
  1. The new Bill proposes amendment to S. 138 of the MV Act which confers power to the State Government to make rules for a number of specified matters. The bill envisages the insertion of sub-section (1A) which will confer power on the State Government to “regulate activities of pedestrians and non-motorised road user sin a public place.” This will empower the State Government to create cycle tracks, footpaths, NMT lanes etc to ensure safety of pedestrians.
  2. The new Bill makes it mandatory for every child to be secured by a safety belt or a child restraint system (Section 194B). If the child is not seated in a safe manner, a penalty of Rs. 1000 shall be imposed on the adult.
  • Section 129 of the Act has been amended to mandate that every child above the age of four years being carried on a motorcycle wears a helmet. The design and specification of the helmet shall be prescribed by the Central government.

The introduction of the above mentioned safety provisions would enable in improving the safety conditions for pedestrians as well as motor vehicle users in India.

  • Provisions Pertaining to Transport Vehicles:
  1. The Bill seeks to introduce Section 12(5) which enables an applicant to obtain a transport vehicle in which he has received training through an accredit school. This is as opposed to the earlier provision which mandated at least one year experience of driving a light motor vehicle before applying for a LL for transport vehicle. The said amendment has been widely criticized, as it seems to be a step backward from road safety.
  2. Section 14(2)(a) has been amended so as to increase the renewal period of transport licenses. The renewal period has been increased from 3 years to 5 years. In case of transport licenses for driving vehicles with hazardous good, the renewal period has been increased from 1 year to 3 years in addition to compliance with the conditions prescribed by the Central Government.
  • Additionally, the Bill also envisages introduction of automated fitness testing for transport vehicles with effect from 1st October, 2019.

It is pertinent to note that the Bill has not dealt with provisions pertaining to fatigue tests, training of heavy vehicle transport drivers etc. which are extremely important factors to improve road safety.

  • Disqualification of Driver’s License

Section 19 has been amended so as to enable the disqualification of the driver’s license of any person after a certain number of offences. The name of the disqualified person shall be placed in public domain until completion of a driver refresher training course from an established school.

  • Registration of New Vehicles by Vehicle Dealers

Section 41 has been amended so as to enable vehicle dealers to register new vehicles. Such vehicles shall bear distinguishable registration marks. Dealers who fail to duly register a vehicle are liable to be fined up to an amount of Rs. 15000.

  • Annual Increase in Fines

Section 199B envisages an increase in the fines under the Act at the rate of ten percent on an annual basis on the first day of April every year. This has been done so as to ensure that the fines are contemporaneous with the changing times.

  • Introduction of Electronic Monitoring and Enforcement System

The Bill envisages the introduction of an electronic monitoring and enforcement of road safety under Section 136A. The Central Government shall make rules for the same and the respective State Governments shall be responsible for its implementation, as opposed to the current system wherein the monitoring and enforcement of road safety is a State subject.

The Section envisages the establishment of a robust electronic enforcement system including speed cameras, closed-circuit television cameras, speed guns and such other technology necessary for ensuring safer roads in India.

The introduction of Section 136A is a laudable step towards a better and improved road safety and infrastructure in India as it will reduce the amount of human intervention and consequently, the corruption involved.  The provision will also help in bringing in uniformity in terms of electronic monitoring and enforcement of road safety in India

  • Wider Scope of ‘Dangerous Driving’

Section 184 which deals with dangerous driving has been amended to widen the scope of dangerous driving. At present, the definition is very narrow and does not include traffic offences that lead to the most number of traffic accidents like using mobile phones, jumping traffic lights.    It now includes include the acts that are considered driving in manner dangerous to the public such as jumping a red light, violating a stop sign, use of hand-held communication devices while driving, driving against the flow of traffic, and passing or overtaking any motor-vehicle in a manner contrary to law.

The amendment will make the public more careful about traffic violations, thereby reducing the number of road accidents. The provision will also enable law enforcement agencies to penalise violators effectively.

  • National Transportation Policy

The amendment introduces Ss. 66A and 66B which empowers the Central Government to introduce A National Transportation Policy. The said Policy would be formulated after consulting with the State Governments

  • Introduction of Multiplies for Penalty

The Bill seeks to introduce the concept of multipliers for penalty (under S. 210A).  The said section will enable the State governments to increase fine in their respective States. .The multiplier cannot be less than 1 nor greater than 10.  Under S. 210B, the enforcing authority will have to pay twice the penalty corresponding to any offence.

This provision will aid the State Government to increase penalties in places where they are of the opinion that higher penalties may be required to curb to violations.

  • Enhancement of Compensation in Hit and Run Cases

The Bill proposes to amend S 161 to the effect that compensation in hit and run cases in case of grievous injury would be hiked to Rs. 50,000 and in case of death, Rs. 2 lakhs.   Currently, compensation for hit and run cases is Rs. 12,500in case of grievous hurt and Rs. 25,000 in case of death.

 India suffered from 55,942 hit and run cases in 2016 alone. The amendment would enable in decreasing the number.

  • Removal of Cap for Liability for Third Party Insurance

The 2016 Bill capped the maximum liability for third party insurance at Rs. 10 lakh in case of death and Rs. 5 lakh in case of grievous injury.  The current Bill seeks to remove the cap on liability.  This may encourage owners to start insuring their vehicles, enabling progress in the field of financial protection in toad safety.

Conclusion

The Government, through the Amendment Bill seeks to promote safe and sustainable mobility in India. The Amendment Bill is a very promising Bill considered to be the biggest reform in the Transportation Sector. The Bill proposes humungous improvement in the realm of road transportation and connectivity in India through mediums of digitalization and automation. Consequently, the Bill leaves no scope for abuse of power by intermediaries/tauts.  Additionally, the Bill recognizes that stakeholders play a significant role in its implementation and imposes liability on them at several stages, so as to achieve the process. However, the success of the Bill would largely depend on the efforts of the Central And State Governments to strictly implement the same.

New H1-B Visa Rules Favoring Advanced Degree Holders To Affect Information Technology Companies In The U.S.

A recent notification by U.S Citizen and Immigration Services (USCIS) specifying changes to the selection procedure for H1-B cap-subject has received a severe backlash from all across the globe. The proposed rules reversed the order in which H1-B beneficiaries are selected.

According to the advanced notification, the new rules governing H1-B visa will now favor applicants with higher pay and an advanced degree over other less-skilled applicants.

Earlier, advanced degree applicants holding a degree higher than masters degree from a recognized US education institution, had a separate quota of 20,000 from which applicants were picked in a lottery system. There was a congressionally mandated annual H-1B cap of 65,000 for anyone with no master’s degree. Now, USCIS has included all advanced degree holders in the lottery for the regular cap and has also changed the order in which the lottery system will be conducted. Now, the regular cap lottery would be conducted first, followed by the second lottery if there are enough remaining advanced-degree holders to meet the advanced-degree exemption.

According to a report by Press Trust of India (PTI), this policy change will lead to a hit on IT companies’ profitability as the number of HI1-B visas approved is going to get reduced. This will reduce the number of visas available to less-skilled workers employed by the Indian IT companies.

This is likely to lead to 10 percent reduction in H1-B visa approvals for regular applicants, where the applicant is without an advance degree masters or higher from US universities, rating agency Icra was quoted stating in a report by Financial Express.

 

 

High Court’s Order On Law Exam Paper Row

Last month, an examination question  regarding a Muslim slaughtering a cow in front of three Hindus caused a furor across the nation.

The aforementioned question formed a part of the Law of Crime-1 paper conducted by Guru Gobind Singh Indraprastha University (GGSIPU) on December 7. This question sparked a row of controversies when the supreme court lawyer Bilal Anwar tweeted an image of the question paper stating that the question asked in the paper dehumanized the entire community. The tweet was retweeted several times before it came under the scrutiny of politicians, lawyers, and journalists from across the country.

According to a report by The Indian Express, the university, when contacted, said that they regretted the question and decided to delete it later. They further stated that they will not evaluate the students on their answer.

Succumbing to the political pressure and without conducting a full and fair inquiry into the matter, the University passed the impugned adverse order on 20.12.2018 barring professors, Dr. Upma Gautam, and Dr. Rakesh Kumar, who had made the question paper, from setting or moderating any question paper for the next six semesters.

Thereafter, the Deputy Cheif Minister of Delhi ordered an inquiry into the matter. He passed as impugned order dated 31.12.2018 ordering the immediate termination of professors in charge of setting the question paper. In an interview to the Indian Expresses, he was quoted saying,

“It is very bizarre and seems to be an attempt to disturb the harmony of society. We won’t tolerate such misconduct. I am ordering an inquiry, and if found true, strongest action will be taken.”

In pursuance to this order, a meeting of Board of Management of the University was called to discuss the illegal termination of the professor.

Stating that the decision to terminate was in violation of Article 311 and Article 14 of the constitution, the professors approached the High Court seeking appropriate remedies.

During the hearing, the counsel for the petitioners vehemently argued that the allegations of inciting communal violence were false, as the question was asked only to check the student’s understanding of the offenses under the Section 153 and 153A of the Indian Penal Code, 1860 falling under the Unit “Offenses Against Public Tranquility” of their syllabus. They also argued that the orders dated 20.12.2018 and 31.12.2018 had a chilling effect on the scholarly independence and the right of the petitioner to carry out their professional obligations without fear.

 

The High Court, after listening to the arguments led by both the parties, finally granted interim relief in favor of the professors, setting aside the order of the university and the directions of the deputy CM, and thereby upholding the rules governing principles of natural justice.