Legislative and Regulatory Update

 

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In This Issue

[No.48]                                                                        April 30, 2003

International
SEBI
Department of Company Affairs
CBDT
CBEC Excise Tariff
CBEC Excise Non Tariff
CBEC Customs Tariff
CBEC Customs Non Tariff
Service Tax
Department of Economic Affairs
RBI
DGFT
Department of Commerce
Secretariat of Industrial Assistance
Department of Industrial Policy
Ministry of Personnel, Public Grievances and Pensions
Ministry of Railways
Supreme Court

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International Legal News

Cases 

Source:westlawinternational.com

  • Intellectual Property: Presence of another's trademark in post-domain path of a URL did not violate trademark law.

The presence of the plaintiff's "laptraveler" trademark in a uniform resource locator (URL) post-domain path for a retail website operator's portable-computer-stand web page was not likely to cause confusion among consumers regarding the source of the web page or the source of a competing product sold by the operator on that page, as required to support a trademark infringement claim. The Third Circuit noted that, because post-domain paths do not typically signify source, it is unlikely that the presence of another's trademark in a post-domain path of a URL would ever violate trademark law. The case marked the first time a circuit court had considered the issue.

Interactive Products Corp. v. a2z Mobile Office Solutions, Inc.

  • E-Commerce: Website's ratings of health care providers as basis for personal jurisdiction -- Certiorari Denied.

Denying certiorari, the United States Supreme Court let stand a Ninth Circuit decision that a Colorado-based operator of an Internet web site, which purported to rate home health care providers in various states, was subject to personal jurisdiction in Washington in a home health care provider's defamation action. The operator purposefully interjected itself into the Washington state home health care market through its intentional act of offering ratings of Washington medical service providers, the Ninth Circuit found. The operator was aware that its ratings of Washington home health care providers would be of value primarily to Washington consumers. Though the operator gleaned its information from various public sources, including the federal government, the information was obtained originally from Washington sources, and the allegedly defamatory rating received by the plaintiff provider on the operator's web site concerned Washington activities of a Washington resident. Finally, the brunt of harm allegedly suffered by the provider occurred in Washington, where it was incorporated and had its principal place of business. Thus, the Ninth Circuit concluded, the effects of the operator's out-of-state conduct were felt in Washington, the home health care provider's claims arose from that out-of-state conduct, and the operator could reasonably expect to be called to account for its conduct in the forum where it understood the effects of its actions would be felt. 

Healthcare.Com, Inc. v. Northwest Healthcare Alliance, Inc.

  • Computers and online services: Presence of another's trademark in post-domain path of a URL did not violate trademark law.

The presence of the plaintiff's "laptraveler" trademark in a uniform resource locator (URL) post-domain path for a retail website operator's portable-computer-stand web page was not likely to cause confusion among consumers regarding the source of the web page or the source of a competing product sold by the operator on that page, as required to support a trademark infringement claim. The Third Circuit noted that, because post-domain paths do not typically signify source, it is unlikely that the presence of another's trademark in a post- domain path of a URL would ever violate trademark law. The case marked the first time a circuit court had considered the issue.

Interactive Products Corp. v. a2z Mobile Office Solutions, Inc.

  • Judgment: Collateral estoppel did not apply to another court's rulings construing same patents.

Collateral estoppel did not apply in a patent infringement case to bind the district court to claim constructions in rulings on partial summary judgment by another district court in a case involving the same patents. The other case ended in an extrajudicial settlement without complete adjudication even as to liability. There was no evidence that an evidentiary hearing was conducted to construe the patent claims before the summary judgment orders were issued, and the other court did not put the parties on notice that the orders could have preclusive effect.

RF Delaware, Inc. v. Pacific Keystone Technologies, Inc.

News

  • A Los Angeles federal judge ruled on Friday that distributing software that enables consumers to swap copyrighted music and movies over the Internet is not infringement. The court tossed a suit filed by movie studios, record labels and music publishers against three companies -- Grokster Ltd., StreamCast Networks Inc. and Kazaa BV -- that distribute peer-to-peer file-sharing software. Granting the defendants' motion for summary judgment, the Judge  made a sharp distinction between the software at issue and the services provided by now-defunct Napster Inc.

  • A divisive dispute over public access to a piece of Mormon-owned land in the heart of Salt Lake City could go before the U.S. Supreme Court next fall. A ruling in Corporation of the Presiding Bishop of the Church of Jesus Christ of Latter-day Saints v. First Unitarian Church of Salt Lake City, No. 02-1350, could also establish new rules for First Amendment activity on publicly accessible private property nationwide. The case is one of dozens the Supreme Court will consider at its private conference May 15 to determine whether or not to grant review. Cases the Court agrees to hear will be argued in the fall.

  • Wal-Mart Stores Inc. and other retailers are suing the credit card makers Visa USA and MasterCard International over their debit card policies and allege that the plastic titans conspired to strangle competition from other credit card companies. The last round of pretrial rulings from U.S. District Judge John Gleeson sided with the retailers.MasterCard International reached a last-minute settlement with Wal-Mart Stores Inc. and thousands of other retailers just before this lawsuit was set to go to trial and this leaves only  Visa USA as the only remaining defendant in the closely watched lawsuit.

  • Wal-Mart Stores Inc. has agreed to pay a $750,000 penalty to resolve a government lawsuit that said the company failed to report safety hazards from defective exercise "glider" machines.

  • Philip Morris USA will appeal in Illinois state court the $10.1 billion  verdict it was ordered to pay in a class action lawsuit over "light"  cigarettes after a judge denied the company's motion to overturn the  verdict, it said on Thursday .

  • A federal judge rejected a constitutional challenge  by Verizon Communications Inc., which is trying to avoid turning over the names of  two of its Internet subscribers suspected of illegally offering free  music for downloading. U.S. District Judge John D. Bates, who ruled against Verizon in January in the same case, determined that First Amendment protections concerning anonymous expression do not conflict with the 1998 Digital Millennium Copyright Act

  • Senator Ron Wyden, D-Ore., has introduced a bill that would give the Federal Trade Commission power to establish labeling ruled for digital media that limit the ability of consumers to copy, distribute or back up content. The bill, as introduced applies to producers and distributors of digital content, not electronic devices that might be used in viewing or listening to it. It also would not apply to analog recordings. A narrower but similar bill sponsored by Rep. Dick Boucher, D-Va, would require notices for copy-protected CDs.

  • The U.S. Supreme Court rejected an appeal by Kentucky of a ruling that barred the display of a large granite monument with the Ten Commandments on the state Capitol grounds in Frankfort. Without comment, the justices let stand a federal appeals court ruling that the display would violate church-state separation under the U.S. Constitution's First Amendment. The governor in 2000 signed into law a resolution adopted by the state legislature that required placement of the monument, which is more than six feet tall and almost four feet wide, outside the Capitol.

  • A Los Angeles judge formally denied a request  by Sony Pictures Entertainment to seal proceedings in a lawsuit brought by comic book publisher Marvel Enterprises Inc. over last year's blockbuster film "Spider-Man." But the judge put off a decision on Sony's motion to refer the litigation to a court-appointed "referee" -- usually a retired judge who would be chosen by the two sides to handle the case in an expedited manner.

  • The Supreme Court refused to consider an Internet-era case that asked which courts should handle lawsuits against people for information they put on the World Wide Web. The question keeps coming up as more operators of Internet sites are taken to court for things like defamation or invasion of privacy. . .The attorney for Healthgrades.com said that the company, which operates out of Colorado, should not be forced to go to trial in Washington [state]. . .The Supreme Court has considered some Internet cases. But so far, justices have not been willing to consider a cyberspace legal boundary issue: Where can lawsuits involving the Web be filed?

  • New York AG Eliot Spitzer and the SEC has announced a settlement  that will require 10 Wall Street firms to pay $1.4 billion and adopt reforms for issuing overly bullish stock research reports to win investment banking business. The settlement amount is among the highest ever imposed by securities regulators, and Citigroup's $400 million share of the deal is the highest ever imposed on an individual firm.

SEBI

Secondary Market Division

  • Renewal of Recognition of Ludhiana Stock Exchange Association Limited U/S 4 of Securities Contracts (Regulation) Act, 1956

Notification No .SO472(E) Dated 25.04.2003 : The Securities and Exchange Board of India, has granted, renewal of recognition to Ludhiana Stock Exchange Association Limited for a further period of one year commencing 28th day of April 2003 and ending on the 27th day of April, 2004 in respect of contracts in securities. 

  • Amendments to the Bye-Laws of OTC Exchange of India

Notification No. SO461(E) Dated 21.04.2003 : Amendment has been made by incorporating a new clause 15 after clause 14 of Chapter XIV-B of the Bye-laws:

"15. Maximum Liability from Investor Protection Fund:

The ceiling on the amount of individual claim by investors due to default of a Member/Dealers of OTCEI is restricted to Rs, 50,000A, that would be met out of Investor Protection Fund."

  • Scheme for introduction of Exchange Traded Interest Rate Derivative Contracts 

Circular No. SMDRP/DC/Cir-16/2003/04/19 Dated 19.04.2003 : SEBI, in consultation with the Government and the Reserve Bank of India (RBI) has decided to introduce Exchange Traded Interest Rate Derivative Contracts in the Indian Securities Market. It has also been decided that to begin with, futures contracts shall be introduced on a Notional Government Security with a 10 year maturity and a Notional Treasury Bill with a maturity of 91 days or three months. 

Regulations

  • Central Listing Authority (Amendment) Regulations, 2003

Notification No. SO443(E) Dated 17.04.2003 : In Regulation 6, the proviso has been omitted.

  • Securities and Exchange Board of India Signs IOSCO Multi-Lateral MOU

Press Release No. PR 94/2003 Dated 22.04.2003 : Securities and Exchange Board became a signatory to the IOSCO Multi-Lateral Memorandum of Understanding. The Multi-Lateral Memorandum of Understanding sets forth the intent of IOSCO members with regard to mutual assistance and the exchange of information for the purpose of enforcing and securing compliance with the respective Laws and Regulations of the jurisdictions of the members.

Department of Company Affiars
  • Private Limited Company and Unlisted Public Limited Company (Buy-back of Securities) Amendment Rules, 2003 

Notification No. GSR348(E) Dated 23.04.2003 : In Schedule-II, after clause (xx), the following clause has been inserted,

"(xxi) The debt equity ratio for Housing Finance Companies, as may be specified by the National Housing Bank being the regulator in consultation with the Central Government.".

  • Simplified Exit Scheme – Clarifications on some issues

Circular No. 16/2003 Dated 17.04.2003 : With reference to General Circular No 13/2003 dated 25.3.2003 and General Circular No 15/2003 dated 9.4.2003 regarding Simplified Exit Scheme, clarifications/amplifications on certain issues have been sought for effective implementation of the scheme. These issues have been examined in the Department and clarifications have been issued in this regard.

CBDT

  • Notifications under the Income Tax Act, 1961

Notification No. 81/2003 to No. 91/2003 Dated 16.04.2003 : The following have been approved Income tax Act, 1961

Breach Candy Medical Research Centre, Mumbai Approved U/S 35(1)(ii) 

M/s Madras School of Economics, Chennai Approved U/S 35(1)(iii) 

M/s The Childs Trust Medical Research Foundation, Chennai Approved U/S 35(1)(ii) 

India Heritage Research Foundation, New Delhi Approved U/S 35(1)(iii) 

Central Power Research Institute, Banglore Approved U/S 35(1)(ii) 

Thakur Research Foundation,New Delhi Approved U/S 35(1)(iii) 

M/s Kalyani Gorakshan Trust, Maharashtra Approved U/S 35(1)(ii) 

M/s New Tirupur Area Development Corporation Ltd ,Chennai Approved U/S 10(23G) 

M/s Bharti Mobile Ltd ,New Delhi Approved U/S 10(23G) 

M/s Kakinada Seaports Ltd, Chennai Approved U/S 10(23G) 

M/s Tata Teleservices Ltd,New Delhi Approved U/S 10(23G)

CBEC Excise Tariff

  • Proposed for inclusion in Audit Report of the CAG of India (Indirect Taxes) for the year 2001-2002 - Handling of appeal cases in Central Excise Department - comments regarding. 

Circular No. 26/710/2003 Dated 23.04.2003 : It has been observed that deficiencies and inadequacies in the manner of filing appeals are repeatedly diluting the department’s case before various appellate fora. Accordingly, it is desired that a close watch should be maintained in respect of appeals pending before the Appellate Authorities. The appeals filed by the Department should be proper and complete in all respect adhering to the legal provisions in toto. Control Registers in respect of orders in original passed by various Adjudicating Authorities viz AC/DC, Joint/Additional Commissioner and Commissioners and appeals filed before all Appellate Authorities should invariably be maintained by the Commissioners for proper monitoring of the review of all orders. 

  • Central Excise-Storage of goods outside factory premises -Waiver of Merchant overtime charges 

Circular No. 25/709/2003 Dated 23.04.2003 : It is the view of the Board that in current era of liberalisation and simplification of law and procedures the emphasis is on self-assessment by the assessee. Therefore, the recovery of merchant overtime charges in such cases are no longer warranted. The Jurisdictional Commissioner shall, however, impose any other condition which he deems fit for the safeguard of revenue before granting permission for storage of non-duty paid excisable goods outside factory premises of the assessee.

  • New Central Excise Registration Procedure for Powerloom Weavers/Hand Processors/ Dealers of Yarns and Fabrics/ Manufacturers of Ready Made Garments 

Circular No. 24/708/2003 Dated 23.04.2003 : Board has reviewed the entire process of Registration with a view to resolve the reported difficulties and provide a simple, transparent and hassle free Registration process. As a further measure of trade facilitation, Board has introduced a simpler application Form exclusively for Registration of Powerloom Weavers/ Hand Processors/ Dealers of Yarns and Fabrics/ Manufacturers of Ready Made Garments who are now required to pay duty or follow Central Excise procedures on account of changes in the Finance Bill, 2003-04. The purpose is to allow the textile sector to carry on their activities with minimum interference from the department as they have been doing all along. All officers have been instructed to extend maximum help to trade in grant of Registration and to educate the members of the trade in respect of the new Central Excise procedures. 

  • Office Memorandum -Procedure to be followed for availing Ad-hoc exemption under Section 5A(2) of the Central Excise Act, 1944 

Circular No. 23/707/2003 Dated 16.04.2003 : In order to bring uniformity and simplicity in processing applications for ad-hoc exemptions, the procedure detailed below is required to be observed. 

The application for ad-hoc exemption will be filed along with the following documents. 

a) The document indicating that the institution is registered as a charitable organization and rendering services on 'free' or 'no loss no profit' basis. 

b) A certificate issued by the concerned district authorities certifying the charitable nature of the organization and the fact of rendering services on 'free or' no loss no profit' basis. 

c) A certificate indicating the details of equipments sought to be procured along with the price and duty amount sought to be foregone. 

d) Nature and details of funding along with the name and other details of institutional donor donating the equipments to the charitable organisation.

e) Any other details deemed fit by applicant for processing of his application in terms of circular cited above.

CBEC Excise Non Tariff

  • CENVAT Credit (Ninth Amendment) Rules, 2003 

Notification No. 39/2003 NT Dated 25.04.2003 : In rule 9A, in sub-rule (4), for the figures and words “25th day of April, 2003”, the figures and words “ 2nd day of May, 2003” have been substituted. 

  • Amendments to Notification No. 35/2001 Dated 26.06.2001

Notification No. 38/2003 NT Dated 22.04.2003 : 1. In clause (1) of paragraph 1, for the words and figure “Annexure-1”, the words and figures “Annexure-1 or Annexure-1A, as the case may be”, have been substituted;

2. Annexure-1A specifying Form A-2 being the Application Form for Central Excise Registration of Powerloom Weavers/Hand Processors/Dealers of Yarns and Fabrics/Manufacturers of Ready Made Garments, has been inserted.

  • Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) (Amendment) Rules, 2003

Notification No. 37/2003 NT Dated 17.04.2003 : In rule 6,

1. before the Explanation, the proviso relating to return of the subject goods being defective or damaged or unsuitable or surplus to the needs of the manufacturer, has been inserted.

2. in the Explanation, for the words ‘during transport from the place of procurement to the manufacturer’s premises’, the words ‘during transport from the place of procurement to the manufacturer’s premises or from the manufacturer’s premises to the place of procurement’, have been substituted.

  • CENVAT Credit (Eighth Amendment) Rules, 2003 

Notification No. 36/2003 NT Dated 16.04.2003 : In rule 9A, in sub-rule (4), for the figures and words "15th day of April, 2003", the figures and words "25th day of April, 2003" have been substituted.

CBEC Customs Tariff

  • Standard set of guidelines for appointment of Custodian of EPZs/ICDs/CFSs

Circular No. 37/2003-Cus. Dated 28.04.2003 : It has been provided at Sl.No. 6 of the Annexure to the Board’s Circular No.128/95-Cus. dated 14.12.1995 that for the proper discharge of duties, the custodian shall execute a bond equal to the value of the goods likely to be stored in the premises for a period of 30 days, supported by a bank guarantee or a Government bond or cash deposit equivalent to 10% of the value of goods. Following representations from trade and industry, the matter has been examined by the Board and it has been decided that the custodians would, henceforth, be required to execute a bond equal to only the average duty involved on the goods likely to be stored in the premises for a period of 30 days, supported by a bank guarantee or a Government bond or cash deposit equivalent to 10% of such duty. 

  • Novel Modus Operandi for availing undue DEPB benefit

Circular No. 36/2003-Cus. Dated 25.04.2003 : Commissioner of Customs (Import), Mumbai has reported a novel modus operandi adopted by M/s. Sweety International Pvt. Ltd. & M/s. Trend Setters, Coimbatore by Export of coloured water in the guise of printing ink (industrial grade) on the basis of forged documents showing examination and supervision under Central Excise authorities for availing undue DEPB benefit.

  • Verification of supplementary DEPB scrips issued in terms of DGFT PN No. 62 dated 17.2.2003 

Circular No. 35/2003-Cus. Dated 25.04.2003 : It has been decided that in all cases where the original DEPB scrips was duly verified by Customs in terms of DOR Circular No.14/99-Cus. dated 15.3.99 at the time of allowing clearance of goods against it, re-verification of the supplementary DEPB scrip need not be done. In all such cases Customs would only cross-check the details of original DEPB scrip and export consignments as given in the supplementary DEPB scrip with their record and after ascertaining the genuinity of such supplementary DEPB scrip, clearance of imports against such supplementary DEPB scrips would be allowed as usual. 

  • Standard set of guidelines for appointment of Custodian of EPZs/ICDs/CFSs

Circular No. 34 /2003-Cus. Dated 24.04.2003 : In the recent past, a number of new ICDs/CFSs have been developed by the public sector as well as private sector agencies and many more such facilities are in the pipeline. For smooth, speedy and effective disposal of Customs work in ICDs/CFSs/EPZs, it has been decided that in addition to the guidelines provided in the Annexure to the Circular No.128/95, dated 14.12.1995, the custodian shall provide further facilities as prescribed.

  • Administrative control over ICDs /CFSs 

Circular No. 33 /2003-Cus. Dated 24.04.2003 : Requests have been received for framing a policy on the administrative control of ICDs/CFSs . The matter has been examined by the Board. It has been decided that the administrative control of ICDs/CFSs would be with the territorial Commissioners of Customs. However, where an ICD/CFS does not fall within the territorial jurisdiction of any Commissioner of Customs, the territorial Commissioner of Central Excise will have administrative control over it.

  • Warehousing-Grant of extension of warehousing period by Chief Commissioners under Section 61 of the Customs Act, 1962 

Circular No. 32 /2003-Cus. Dated 07.04.2003 : It has been decided that the request for waiver of interest in case of re-export of capital goods may be considered favourabley, if on clearance, such goods could not be installed, commissioned and used due to the facts that the goods were found defective or sub-standard, and therefore unfit for usage. Chief Commissioners have, therefore been, requested to consider/decide such requests for waiver of interest in the light of Board's aforesaid decision in the matter. 

  • Administrative Control over Export Oriented Units (EOUs)/Special Economic Zones– Instructions  

Circular No. 31 /2003-Cus. Dated 07.04.2003 : It has been decided that in the port cities, the administrative control over all the EOUs including EHTP and STP units falling within the territorial jurisdiction of Commissioner of Customs shall be with the Commissioner of Customs. At other places, the administrative control over EOU/EHTP/STP units shall be with jurisdictional Commissioner of Central Excise. The only exception will be in respect of Bangalore Customs. The Commissioner of Customs, Bangalore will continue to have administrative control over all such units within his territorial jurisdiction. As regards Special Economic Zones, the administrative control would continue to be with the jurisdictional Commissioner of Customs. Further, in case of new Special Economic zone that are likely to come up in future, the administrative control shall be exercised by the jurisdictional Commissioner of Customs.

CBEC Customs Non Tariff
  • Commissioner of Customs, Air Cargo Complex, IGI Airport, New Delhi, appointed to act as Commissioner of Customs, Ahmedabad for purpose specified

Notification No. 29/2003 NT Dated 23.04.2003 : Central Board of Excise and Customs has appointed the Commissioner of Customs, Air Cargo Complex, IGI Airport, New Delhi, to act as Commissioner of Customs, Ahmedabad for the purpose of adjudicating the matters relating to Show Cause Notices pertaining to M/s. KDH International, 2646-49 Bank Street, Karol Bagh, New Delhi and M/s. Monika Overseas, F-1/5 Model Town, Delhi, issued vide DRI. F. No. 50D/95/99-CI, dated the 11th February, 2003 by the Additional Director General, Directorate of Revenue Intelligence, ‘D’ Block, I.P. Estate, I.P. Bhavan, New Delhi.

  • Commissioner of Customs, Kandla appointed to act as Commissioner of Customs, Chennai/ Commissioner of Customs (Imports), Mumbai for the purpose specified 

Notification No. 28/2003 NT Dated 23.04.2003 : The Central Board of Excise and Customs has appointed the Commissioner of Customs, Kandla to act as Commissioner of Customs, Chennai, or, as the case may be, Commissioner of Customs (Imports), Mumbai, for the purposes of adjudicating the matters as specified.

Service Tax
  • Non levy of service tax on export of services - Regarding

Circular No. 5/56/2003-ST Dated 25.04.2003 : It has been clarified that the Service Tax is destination based consumption tax and it is not applicable on export of services. Export of services would continue to remain tax free even after withdrawal of notification no. 6/99 dated 9.4.99. Further it is clarified that service­ consumed/provided in India in the manufacture of goods which are ultimately exported, no credit of service tax paid can be availed or reimbursed at present as inter-sectoral tax credit between services and goods are not allowed.

  • Internet telephony services - clarification

Circular No. 3/54/2003-ST Dated 21.04.2003 : Even if the licences to Internet Telephony Service Providers are issued under section 4 of the Indian Telegraph Act, 1885, the two way voice communication is made possible through data transfer over the Internet. As per Section 65(19), 1994, the term "on-line information and database access and/or retrieval" means providing data or information, retrievable or, otherwise, to a customer in electronic form through a computer network. Accordingly, it is to confirm that Internet Telephony Services fall under the category of online information and database access and/or retrieval services.

Department of Economic Affairs
  • Change in Location of Debts recovery Tribunal, Pune

Notification No. GSR320(E) Dated 08.04.2003 : The Central Government has notified the change in the location of Debts recovery Tribunal, Pune w.e.f. 3rd April, 2003 from the place as specified.

RBI

  • Foreign Exchange Management Act, 1999 - Providing housing loan in rupees to NRIs/PIOs 

Circular No. A.P.(DIR Series) Circular No.95 Dated 26.04.2003 : Reserve Bank has been receiving requests from certain institutions seeking permission for grant of loans to Non-Resident Indians for renovation/repairs/improvement to residential accommodation owned by them. The matter has been examined and it is now clarified that authorised dealers/housing finance institutions approved by the National Housing Bank may grant loans to Non-Resident Indians (NRIs)/Persons of Indian Origin (PIOs) for purpose of repairs/renovation/ improvement of residential accommodation owned by them in India.

  • Export of Goods and Services -Export of goods on promotional grounds 

Circular No. A.P.(DIR Series) Circular No.94 Dated 26.04.2003 : Authorised Dealers are aware that Reserve Bank considers applications for grant of GR waiver from recognised and well established exporters for export of various items free of cost to the overseas buyer for export promotion. With a view to facilitate expeditious disposal of such applications, it has now been decided that authorised dealers may henceforth consider such requests for export of goods free of cost, for export promotion upto 2 per cent of average annual exports of the applicant during the preceding three years subject to a ceiling of Rs.5 lakhs.

  • Relaxation to trade and industry in the State of Jammu & Kashmir 

Notification No. DBOD. BP. BC. 97 / 21.04.012/ 2002- 2003 Dated 24.04.2003 : It has been decided that the concessions/ credit relaxations to borrowers/ customers in the State of Jammu & Kashmir as laid down in Circular No. DBOD. BP. BC. 143/ 21.04.012/ 92 dated 18 June 1992 will continue to be operative for a further period of one year i.e. upto 31 March 2004.

  • Guidelines on sale of financial assets to Securitisation Company (SC)/ Reconstruction Company (RC) (created under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002) and related issues 

Notification No. DBOD No.BP.BC. 96/ 21.04.048/ 2002-03 Dated 23.04.2003 : The whole process of asset reconstruction and matters related thereto has to be initiated with due diligence and care warranting the existence of a set of clear instructions which shall be complied with by all banks/ FIs so that the process of asset reconstruction proceeds on smooth and sound lines. The need for some healthy and uniform guidelines has been further necessitated by the fact that there is no prior experience in this area. Accordingly, a set of guidelines to be followed by banks/ FIs has been formulated and furnished in the Annexure. The guidelines may be placed before the bank's/ FI’s Board at the next meeting and appropriate steps may be taken for their implementation.

  • The Securitisation Companies and Reconstruction Companies (Reserve Bank) Guidelines and Directions, 2003 

Notification No. DNBS.2/CGM(CSM)-2003 Dated 23.04.2003 : The Reserve Bank of India, having considered it necessary in the public interest, and being satisfied that, for the purpose of enabling the Reserve Bank to regulate the financial system to the advantage of the country and to prevent the affairs of any Securitisation Company or Reconstruction Company from being conducted in a manner detrimental to the interest of investors or in any manner prejudicial to the interest of such Securitisation Company or Reconstruction Company, it is necessary to issue the guidelines and directions relating to registration, measures of asset reconstruction, functions of the company, prudential norms, acquisition of financial assets and matters related thereto, has issued to every Securitistion Company or Reconstruction Company, the guidelines and directions as specified.

  • Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Issue of final guidelines and directions 

Notification No. DNBS. PD. CC. 1/ SCRC / 10.30/2002-2003 Dated 23.04.2003 : The Bank is in the process of framing a set of standard guidelines in the matter of takeover of the management, sale or lease of whole or part of the business of the borrower. Securitisation Companies and Reconstruction Companies have, therefore, been advised to refrain from exercising the measures of take over of management, sale or lease of the borrowers' business as provided for in Section 9 of the Act, until guidelines in this regard are notified by the Reserve Bank of India. As regards enforcement of security interest, Securitisation Companies and Reconstruction Companies may follow the Security Interest (Enforcement) Rules, 2002 notified by the Government of India as also the relevant provisions in the Act.

  • RBI cancels licence of the Dhana Cooperative Urban Bank Ltd., Eluru, Andhra Pradesh 

Press Release No. 1093/2002-03 Dated 24.04.2003 : The Reserve Bank of India has cancelled the licence of The Dhana Cooperative Urban Bank Ltd., Eluru, Andhra Pradesh to carry on banking business. The bank is precluded from transacting the business of `banking' as defined in the Banking Regulation Act, 1949 (As applicable to Co-operative Societies) and it will not be in order for it, among other things, to accept deposits from public and allow withdrawals by cheque, draft, order or otherwise.

DGFT

  • Amendments in the ITC (HS) Classifications of Export and Import Items, 2002-2007

Notification No. 08 (RE-2003)/ 2002-2007 Dated 24.04.2003 : The under noted item is free for export during 2003-2004 to Maldives subject to issue of no objection Certificate within the annual ceiling by the Chemical and Allied Product Export Promotion Council ( CAPEXIL) who shall monitor the ceiling and send a quarterly report to Policy Cell-III in DGFT. 

Stone Aggregate : 1,90,000 MTs

River Sand : 2,10,000 MTs 

  • Amendments in ITC (HS) Classifications of Export and Import Items, 2002-2007

Notification No. 06 (RE-2003)/ 2002-2007 Dated 21.04.2003 : A new Appendix IV to Schedule I of ITC(HS) Classification of Export and Import Items, 2002-2007, has been appended. This Appendix IV contains a list of countries which are parties to the “Montreal Protocol on substances that deplete the Ozone layer”. 

  • Condition on import of textile and textile articles as per paragraph 11 of chapter 1A: General notes regarding import policy of ITC (HS) Classification of Export and Import Items, 2002-2207

Circular No. 1/2002-2007 Dated 17.04.2003 : It is clarified that the imports of the following items of textile are exempted from the condition of production of pre-shipment certificate. 

1. Import of consignments of grey/raw textile products which are usable as raw white and 

2. Import consignments of industrial product i.e. transmission belts/pressure belts which do not come into direct contact with the human body. 

The importer shall, however, be required to give an undertaking to the concerned customs authorities to this effect at the time of imports.

Department of Commerce

  • Anti-Dumping Investigation

Notification No. 14/8/2002-DGAD Dated 09.04.2003, No. 14/36/2002-DGAD Dated 07.04.2003 and No. 14/12/2002-DGAD Dated 31.03.2003 : Final Findings regarding Anti-Dumping Investigation Concerning Imports of Ferro Silicon Originating in or Exported from the South Africa and Macedonia and Preliminary Findings regarding Anti-Dumping Investigation Concerning Imports of Ammonium Nitrate from Russia and Iran and Concerning Imports of 'X-ray Baggage Inspection Multi Energy System' (XBIS) from the European Union, have been published.

Secretariat of Industrial Assistance
  • Revision of Form for Carry-on-Business Licence

Press Note No. 1/2003 Dated 21.03.2003 : Following an exercise to simplify the Form EE and make it convenient for the entrepreneurs applying for grant of Carry-on-Business licence it has been decided that, henceforth, all applications for grant of COB licence will be accepted by the SIA in the revised format.

Department of Industrial Policy

  • Exemption to HLS Asia Limited, New Delhi from Import of Explosives Specified 

Notification No. SO452(E) and No. SO453(E) Dated 21.04.2003 : Central Government has exempted HLS Asia Limited, 109, Aurobindo Place, Market, Safdarjung Development Area, Hauz Khas, New Delhi-110016, from the provisions of Sub-rule (2) of rule 31 of the Explosives Rules, 1983 for import of the explosives as specified.

Ministry of Personnel, Public Grievances and Pensions

  • Abolition of Madhya Pradesh Administrative Tribunal 

Notification No. GSR340(E) Dated 17.04.2003 : Subject to the decision of the Supreme Court in Civil Appeal No. 5328/2002-A. K. Srivastava Versus Union of India & Others and other connected matters arising out of common Order dated the 14th May 2002 of the Madhya Pradesh High Court in WP No. 3529/2001-A. K. Srivastava versus Union of India & Others and other connected matters and in compliance of orders of Madhya Pradesh High Court, the Central Government has abolished the Madhya Pradesh Administrative Tribunal with immediate effect.

Ministry of Railways

  • Railway Services (Revised Pay) Amendment Rules, 2003

Notification No. GSR357(E) Dated 25.04.2003 : Note 6 has been inserted relating to revised pay scales of Group 'B' officers of all Organized Services other than Accounts Department of the Railways.

Supreme Court

  • Oil & Natural Gas Corporation Ltd. Vs. SAW Pipes Ltd.

The main point in issue in this case was whether the Court would have jurisdiction under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the "Act") to set aside an award passed by the Arbitral Tribunal which is patently illegal or in contravention of the provisions of the Act or any other substantive law governing the parties or is against the terms of the contract?

The Hon'ble Supreme Court held that the Court can set aside the arbitral award under Section 34(2) of the Act, if the party making the application furnishes proof that:--

(i) a party was under some incapacity, or

(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or

(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or

(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration;

The Hon'ble court further held that the Court may set aside the award:--

(i) (a) if the composition of the arbitral tribunal was not in accordance with the agreement of the parties,

(b) failing such agreement, the composition of the arbitral tribunal was not in accordance with Part-I of the Act.

(ii) if the arbitral procedure was not in accordance with:--

(a) the agreement of the parties, or

(b) failing such agreement, the arbitral procedure was not in accordance with Part-I of the Act.

However, exception for setting aside the award on the ground of composition of arbitral tribunal or illegality of arbitral procedure is that the agreement should not be in conflict with the provisions of Part-I of the Act from which parties cannot derogate.

(c) If the award passed by the arbitral tribunal is in contravention of provisions of the Act or any other substantive law governing the parties or is against the terms of the contract.

 The award could be set aside if it is against the public policy of India, that is to say, if it is contrary to:--

(a) fundamental policy of Indian law;

(b) the interest of India; or

(c) justice or morality, or

(d) if it is patently illegal.

The arbitral award  could be challenged:--

(a) as provided under Section 13(5); and

(b) Section 16(6) of the Act.

  • B. Chandrasekhar Reddy (D) by Lrs. Vs. State of Andhra Pradesh

The father of the appellant late B. Chandrashekhar Reddy, the husband of appellant No. 3, filed two separate declarations under the Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings), Act, 1973. By Order dated 23.1.1977, the Tribunal held that family of late B. Chandrashekhar Reddy was entitled to hold one standard holding under the Act and the excess of 4.3360 standard holdings was held to be surplus land. Aggrieved by this Order, an appeal was preferred before the Land Reform Appellate Tribunal as LRA No. 1107/77 which was partly allowed. Aggrieved by this Order, a revision petition C.R.P. No. 7171/79 was filed before the High Court of Andhra Pradesh. However, during the pendency of the Revision, B. Chandrashekhar Reddy died and his LRs were impleaded. Pending this Revision application, there was a State amendment to Section 29 of the Hindu Succession Act whereby Section 29A was inserted. The appellants contended that they were entitled to the benefit of Section 29-A and thus an additional ground was sought to be raised in the Revision Petition. The High Court permitted them to urge the additional ground. It was urged before the Hon'ble High court that by virtue of Section 29-A of the Hindu Succession Act, the daughters of a Hindu joint family acquired rights as a co-parcener in a joint Hindu family and thus they have got right by birth; hence, they are to be treated on the same footing as major sons and it was argued that the ceiling on land should have been fixed treating them as additional members of the family. However, the High Court rejected the plea of the appellants and held that the amendment to Section 29 of the Hindu Succession Act will not alter the position and the appellants herein were not entitled to get any additional share.

The Hon'ble supreme court held that the benefit of Section 29(A) can be invoked only by major daughters if they are not married prior to the commencement of Section 29(A) of the Act. Under Section 29(A) of the Hindu Succession Act provides that the daughters acquired a right by birth as they were deemed to be treated as co-parceners of the joint family and they have got a right to seek partition of the joint family property but as regards the fixation of the ceiling, in the instant case, Section 29(A) does not confer any additional benefit to the appellant .The appeal was dismissed.

  • Punjab National Bank Vs. Indian Bank and Anr. 

This appeal is against refusal to allow amendment of the plaint, in the suit for money decree filed by the appellant against the respondents in Delhi High Court, which, later on has been transferred to the Debt Recovery Tribunal, Delhi. The plaintiff-appellant moved an application for amendment of the plaint under Order 6 Rule 17 read with Section 151 of CPC and Section 22 of the Recovery of Debts due to Banks and Financial Institutions Act. The main objection pressed by the respondent before the High Court was that the plaintiff has to decide at the time of filing of the suit as to whether the claim is to be made in Indian currency or the foreign currency. Once the plaintiff choose to claim the amount in Indian currency there was no occasion to allow the plaintiff to change its option and claim decree in terms of dollars. The other contention was that the amendment is sought after a long lapse of time, namely, 9 years so the additional financial liability resulting as a consequence of the amendment would be time barred. The Hon"ble Supreme court held that amendment can be refused when the effect of it would be to take away from a party, a legal right which had accrued to him by lapse of time and where the amendment merely clarifies an existing pleading and does not in substance add to or alter it, there is no good reason not to allow the same and even the bar of limitation would not come in the way. The amendment in the present case, is more clarificatory in nature as no new relief is sought to be added, only rupee equivalent of the dollar, is sought to be deleted and a clear prayer for decree in dollars is sought to be added. An amendment would generally not be disallowed, except (i) where a time barred claim is sought to be introduced, there too it would be one of the factors for consideration or (ii) where it changes the nature of the suit itself or (iii) it is malafide or (iv) the other party cannot be placed in the same position had the plaint been originally filed correctly, that is to say, the other side has lost right of a valid defence by subsequent amendment. The Hon'ble court held that in this case the amendment only clears the confusion, if any, as to the terms in which relief is sought. It does not revive a time bared and dead claim, nor changes the nature of the suit. In the facts and circumstances, it cannot be said to be malafide either. The appeal allowed.