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In This Issue

[No.58]                                                                            August 10, 2003

International
SEBI
Department of Company Affairs
CBDT
CBEC Excise Tariff
CBEC Excise non Tariff
CBEC Customs Tariff
CBEC Customs non Tariff
Department of Economic Affairs
RBI
Ministry of Coal
DGFT
Department of Commerce
Department of Industrial Policy
Department of Consumer Affairs
Ministry of Personnel, Public Grievances and Pensions
Press Information Bureau
Supreme Court

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International Legal News

Cases

Source: Westlawinternational.com

  • Insurance: Surrogate child born to primary insured's wife was not a covered "natural child" under health policy.

Under South Carolina law, a child born to a surrogate mother was not the "natural child" of her husband, and thus the child was not a covered dependent under a health insurance policy naming the husband as the primary insured. The term "natural child" referred only to biological children of the insured.

Mid-South Ins. Co. v. Doe

  • Bid-Rigging: Alleged passing of bid quote to competitor was not Sherman Act violation.

An unsuccessful bidder for the heating, ventilating and air conditioning portion of the Green Bay Packers' football stadium renovation project failed to allege an antitrust injury, as required for a restraint of trade claim under Sherman Act § 1. The bidder claimed that the general contractor and successful bidder engaged in a bid rigging conspiracy involving disclosure of the claimant's bid to the favored bidder and allowance of a second bid. Any injury was strictly to the unsuccessful bidder, as there was no overall increase in the cost of the project arising from favored bidder's meeting or beating the unsuccessful bidder's quote.

Phillips Getschow Co. v. Green Bay Brown County Professional Football Stadium Dist.

  • Computers and online services: Internet advertising did not cause trademark confusion.

For purpose of determining the likelihood of confusion, in a trademark infringement case, the "GLOW KIT" trademark, used with anti aging products, would be deemed distributed through different marketing channels, than allegedly infringing "GLOW" trademark, used with cosmetics, even though both were advertised on the Internet. The advertising was directed at distinctly different markets.

Glow Industries, Inc. v. Lopez

  • Endangered Species: Management plan for endangered species was not arbitrary or capricious and satisfied ESA requirements.

The United States Forest Service's management plan for an endangered species of woodpecker was neither arbitrary nor capricious and satisfied the requirements of the Endangered Species Act. Thus, the plan had to be approved on judicial review under the Administrative Procedure Act (APA). The plan provided for the establishment of a program of mid-story hardwood removal, based upon the woodpeckers' need for a relatively open forest habitat, and also provided for the preferred method of removal of mid-story vegetation where possible. In addition, the plan allowed for the preservation of old-growth pine trees needed by the woodpecker for nesting, and created habitat management areas encompassing approximately 41 percent of the state's national forests.

Sierra Club v. Peterson

  • Trade Secrets: Plaintiff had burden of proof in misappropriation of trade secrets action.

The court held that an aerospace manufacturer had the burden of proof to show that a subcontractor used the manufacturer's trade secrets in an improper means when developing an in-flight refueling system. The subcontractor alleged that it had reverse engineered and independently developed the device. The court declared that the subcontractor did not have the burden of proving its claims, but rather that the manufacturer retained the burden of proof. The court reasoned that the subcontractor's arguments were not new matters or affirmative defenses, but were rather evidence that it did not improperly use manufacturer's trade secrets. Furthermore, it was not impossible for the manufacturer to prove improper use, and there were no policy considerations which would support granting the manufacturer greater protection. Thus the manufacturer retained the burden of proof.

Sargent Fletcher, Inc. v. Able Corp.

News

  • Microsoft has apologized to Simon Grainger, a British gentleman from Merseyside, whom it had accused of stealing e-mail addresses of its customers and sending them junk emails or 'spam'. Microsoft admitted that it was a case of mistaken identity and legal action had been taken on the basis of the background of misuse of a domain name registered in his name.

  • Justice Anthony Kennedy of U.S Supreme Court on Saturday in his speech to American Bar Association, urged the association to ask the Congress to repeal federal mandatory minimum sentences and "let the judges be judges". Judge Kennedy believes there is a need for guidelines but federal mandatory sentences, in many cases are unwise and unjust.

  • Avanti Motor Corp, a small Georgia-based automaker has reached out of court settlement with General Motors Corp. over the design of its Studebaker XUV, which looked too much like GM's Hummer H2. A more streamlined rather than boxy look, a larger slant to the windshield, the removal of hood latches and vents and larger side windows will now be features of Studebaker XUV. Boxy look is a distinguishing feature of Hummer H2.

  • 55 million dollars have been offered by the Archdiocese of Boston to settle more than 500 sex abuse lawsuits against the clergy, within archdiocese. This offers comes a week after Archbishop Sean Patrick O'Malley was installed as head of the nation's fourth-largest diocese. Offer for the settlement is aimed at resolving claims of men and women who claim they were abused as children by the clergy within the Boston archdiocese while church leaders routinely ignored the misdeeds. Approximately more than 1,000 children have been abused over four decades.

  • A website by the name of "www.WhiteHouseForSale.com" has been launched by Public Citizen, a consumer advocacy organization founded by Ralph Nader in 1971 to track wealthy donors who contribute to President Bush's re-election campaign.

  • ebay, an online auction house has been ordered by a Federal judge to pay 29.5 million as damages to Thomas G. Woolston for stealing his ideas. eBay infringed on Woolston's patents, which presented a way for people to buy items over the Internet for a fixed price. Specifically, the jury said that eBay's "Buy It Now" option, which allows auction surfers to do the same thing, infringed on Woolston's ideas.

  • In the trial of Michael Patterson accused of murdering his wife Kathleen Patterson, the jury has allowed the use of computer evidence. Jury will hear about his sexual interest in men, homosexual pornography found on his computer and his contact by e-mail with a male prostitute.

  • California Supreme Court announced on August 7th that it will not consider legal challenges to the process and election will be conducted as per the schedule. The decision came as a blow to Democratic Gov. Gray Davis, who had asked the state's top court to delay the voting until the March presidential primary, arguing that the October date did not give election officials enough time to prepare and could cause voting rights problems.

SEBI

Secondary Market Division

  • Corrigendum to Circular no SEBI/SMD/SE/13/2003/10/04 dated April 10, 2003

Circular No. SEBI/MRD/SE/14855/2003/06/08 Dated 6.08.2003 : In partial modification, the earlier point 5 which stated as:-

“The Exchange shall maintain a register wherein the brief particulars of the records destroyed alongwith the certification regarding the date and mode of destruction”. 

is replaced by:-

“The Exchange shall maintain a register wherein the brief particulars of the records destroyed shall be entered, alongwith the certification regarding the date and mode of destruction”.

Depositories and Custodian

  • Shifting of specified Companies to Normal Rolling Settlement Mode

Circular No. MRD/DEP/Cir- 22 /2003 Dated 01.08.2003 : As per the information provided by both the depositories 165 more companies have established connectivity with both the depositories. Out of these 145 companies as per annexure ‘A’ (serial no. 1 to 145) have established connectivity with both the depositories on or before March 31, 2003. It has therefore been decided that these scrips shall trade in the normal rolling settlement mode of the stock exchanges with immediate effect.

Department of Company Affairs
  • Companies (Central Government’s) General Rules and Forms (Third Amendment) Rules, 2003 

Notification No. GSR580(E) Dated 24.07.2003 : Rule 10B has been substituted which revises the amount of remuneration by way of fee for each meeting of the Board of Directors or a committee thereof. The new amount to be as follows:

(a) Companies with a paid-up share capital and free reserves of Rs. 10 crore and above or turnover of Rs. 50 crore and above - Sitting fees not to exceed the sum of twenty thousand rupees.

(b) Other companies - Sitting fees not to exceed the sum of ten thousand rupees.

CBDT
  • Income-Tax (14th Amendment) Rules, 2003 

Notification No. 189/2003 Dated 01.08.2003 : 1. Sub rule 1A has been inserted after in Part VI in Rule 29C 

"(1A) A declaration under sub-section (1C) of section 197A by an individual resident in India, who is of the age of sixty-five years or mores at any time during the previous year and is entitled to a deduction from the amount of income-tax on his total income referred to in section 88B shall be in Form No. 15H and shall be verified in the manner indicated therein"

2. In Appendix II Form 15H has been inserted.

  • Income-Tax (13th Amendment) Rules, 2003 

Notification No. 185/2003 Dated 31.07.2003 : In part VIA, rule 37E has been substituted,

"37E. Every person collecting tax in accordance with the provisions of section 206C shall, in respect of the period ending on 30th September and 31st March in each financial year, deliver or cause to be delivered to the income-tax authority referred to in rule 37F, the return for collection of tax in Form No.27E.";

2. In Appendix II Form 27E has been substituted for Form 27

  • Income-Tax (12th Amendment) Rules, 2003

Notification No. 184/2003 Dated 31.07.2003 : 1. In Part VI, in rule 30, sub-rule (1) has been substituted.

2. In Rule 37 the Table has been substituted.

  • Income-Tax (11th Amendment) Rules, 2003

Notification No. 183/2003 Dated 31.07.2003 : In Appendix II Form 27 has been substituted.

  • Electronic Furnishing of Returns of Income Scheme, 2003

Notification No. 181/2003 Dated 25.07.2003 : Central Board of Direct Taxes has specified the Electronic Furnishing of Returns of Income Scheme, 2003 to be effective from 25.07.2003 which is applicable to an individual having income under the head "Salaries" and not having any income under the head "Profits and gains of business or profession", who is assessed or assessable to tax at Ahmedabad, Bangalore, Chennai, Delhi, Hyderabad, Kolkata and Mumbai.

  • Income-Tax (10th Amendment) Rules, 2003

Notification No. 180/2003 Dated 25.07.2003 : In Rule 67, sub-rule 2 which relates to investment pattern, has been substituted.

  • Cost Inflation Index specified for the Financial Year 2003-2004

Notification No. 179/2003 Dated 24.07.2003 : The Cost Inflation Index for the financial year commencing on the 1st day of April, 2003 and ending on the 31st day of March, 2004 has been specified and for that purpose amendment has been made in the notification of the Government of India in the Ministry of Finance (Department of Revenue), Central Board of Direct Taxes number S.O.709(E), dated the 20th August, 1998, inserting S.No. 23 specifying 463 as the index.

CBEC Excise Tariff
  • Central Excise - Delay in issue of Adjudication order/Appellate order after personal hearing - regarding 

Circular No. 732/48/2003-CX Dated 05.08.2003 : Board has observed that often there is delay in issue of Adjudication/Appellate orders in cases where personal hearing has already been concluded. In certain cases the issue of orders has taken substantially longer periods even after conclusion of personal hearing. It has been directed that in all such cases where personal hearing have been concluded it is necessary to communicate the decision immediately or within a reasonable time of 5 days. Where for certain reasons, the above time limit can not be adhered to in a particular case, the order should be issued within 15 days or at most one month from the date of conclusion of personal hearing. 

  • Revised Central Excise Audit Manual- regarding

Circular No. 731/47 /2003-CX Dated 01.08.2003 : D.G. (Audit) has now prepared a comprehensive revised updated version of Audit Manual which has been approved by the Board and is being issued. The manual intends to provide guidance to the officers in the performance of the task of auditing the units from the point of view of Central Excise. The revised manual incorporates the experience gained since the issue of earlier manuals and mentions important aspects requiring the attention of the auditors.

CBEC Excise non Tariff
  • Central Excise Valuation (Determination of Price of Excisable Goods) Amendment Ru1es, 2003

Notification No. 60/2003 NT Dated 05.08.2003 : In the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, in rule 8, for the words “one hundred and fifteen per cent” the words “one hundred and ten per cent” have been substituted.

CBEC Customs Tariff

  • Eligibility of BOPP films under notification No. 25/99-Cus. Dated 28.2.1999 - Sl. Nos. 52 and 44 

Circular No. 70/2003 Dated 06.08.2003 : A doubt has been raised whether notification No.20/200l-Cus., which inserted the explanation under Sl.No.52 of the notification No.25/99-Cus. is applicable retrospectively or only prospectively and whether the explanation inserted under Sl.No.52 of the notification vide notification no. 20/2001-Cus., also applied to Sl.No.44 of the notification prior to 1.3.2003. The matter has been examined and it has been held in a number of judgments that the explanation inserted in a notification will have prospective effect only. Further, the explanation would apply to entry at sl. no. 52 only and not to sl. no. 44 of notification  No. 25/99-Cus dated 28.2.99. The BOPP films would be eligible for exemption under notification no.25/99-Cus. sl. no. 44 only w.e.f. 1.3.2003, i.e. the date on which the requisite explanation was inserted vide notification 28/2003-Cus. dated 1.3.2003.

  • Amendment to Notification No. 23/2002 dated 01.03.2002 

Notification No. 123/2003 Dated 01.08.2003 : In the said notification, in the Table, against S.No.5A, for the entry in column (2), the entry "1511 90" has been substituted.

  • Amendment to Notification No. 49/96 dated 23.07.1996 

Notification No. 122/2003 Dated 01.08.2003 : In the said notification, in the Table, against S.No. l, in column (2), in item (I), for the words, figures and letters "and 51/96-Customs, dated the 23rd July, 1996", the words, figures and letters ",5l/96-Customs, dated the 23rd July, 1996 and 121/2003-Customs, dated the 1st August, 2003" have been substituted.

  • Exemption to equipments and consumable samples imported into India, by the Inspection Team of the Organization of Prohibition of Chemical Weapons, from the whole of customs duty 

Notification No. 121/2003 Dated 01.08.2003 : Central Government has exempted all the equipments and consumable samples falling under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India, by the Inspection Team of the Organization of Prohibition of Chemical Weapons, from the whole of the duty of customs leviable thereon which is specified in the said First Schedule and from the whole of the additional duty leviable thereon under section 3 of the said Customs Tariff Act, subject to certain conditions.

  • Eligibility of Blank Intra Ocular Lenses under notification No. 21/2002-Customs

Circular No. 69/2003 Dated 31.07.2003 : It is clarified that Blank Intra Ocular Lens falls in the category of “Intra-Ocular lens” is eligible for the benefit of notification No. 23/98-Cus dated 2.6.98 (Sl. No. 247 List 23, item 12).

  • Operationalisation of the Provision of Chapter X A of the Customs Act, 1962- Issuance of SEZ Rules and Regulations- Reg 

Circular No. 68/2003 Dated 30.07.2003 : As envisaged in the Chapter XA of the Customs Act, 1962, the Special Economic Zone Rules, 2003 and Special Economic Zone (Customs Procedure) Regulations, 2003, have also been notified. (Ref: notification Nos. 52/2003-Customs (NT) and 53/2003-Customs (NT), both dated 22-7-2003). These SEZ Rules and Regulations will also come into force with effect from 15th August, 2003.

  • Amendment to Notification No. 23/2002 dated 01.03.2002 

Notification No. 119/2003 Dated 29.07.2003 : In the said notification, in the third proviso, for the figures and words "1st day of August, 2003", the figures and words "1st day of October, 2003" have been substituted.

  • Amendment to Notification No. 21/2002 dated 01.03.2002

Notification No. 118/2003 Dated 29.07.2003 : In the said notification, in the proviso, in clause (c), for the figures and words "1st day of August, 2003", the figures and words "1st day of October, 2003" have been substituted.

  • Delay in release of Telegraphic Release Advice (TRA) Under Advance License/DEPB/DFRC Schemes - reg. 

Circular No. 67/2003 Dated 28.07.2003 : It has been decided in partial modification of the earlier instructions issued in respect of grant of TRA under Advance License/DFRC License/DEPB License etc. Schemes from time to time that for the purpose of grant of TRA, the Custom House at the port of registration of the license shall not ask for invoice/packing list/bill of lading (Airway Bill) and shall issue the TRA on the basis of value of import goods as declared by the license holder.

  • Disposal of Hazardous Waste - Public Interest Litigation in WP No. 675/1995 in the matter of Research Foundation for Science, Technology & Natural Research Policy Vs Union of India and Others - Reg 

Circular No. 66/2003 Dated 28.07.2003 : As regards disposal of the hazardous waste the Ministry of Environment and Forests has clarified that hazardous waste lying in the ports/ICDs/CFSs could be disposed of only after the matter is finally heard and disposed of by the Court and till such time the status- quo has to be maintained. Hence, the disposal of hazardous waste lying in ports/ICDs/CFSs should not be done till the outcome of writ petition.

  • Acceptance of self-declaration as to the non-availment of Cenvat facility for extending the duty drawback 

Circular No. 65/2003 Dated 28.07.2003 : In order to safeguard revenue and to rule out the possibility of any mis-declaration by the exporters, it is considered necessary that the declarations given by the exporters be selectively picked up and sent to the jurisdictional Central Excise field formations for random verification. Commissioner of Customs has been advised to devise procedure for selection of such declarations and forwarding the same to the Central Excise field formations. Any instances of mis-declaration noticed pursuant to the Central Excise verification reports should be dealt with stringently and meted out exemplary punishment.

CBEC Customs Non Tariff
  • Indore Special Economic Zone, Madhya Pradesh specified as special economic zone

Notification No. 61/2003-N.T. Dated 01.08.2003 : Central Government has specified Indore Special Economic Zone at Indore in the State of Madhya Pradesh as a "special economic zone".

  • Sitapura Special Economic Zone,Rajasthan specified as special economic zone

Notification No. 60/2003-N.T. Dated 01.08.2003 : Central Government has specified Sitapura Special Economic Zone at Jaipur in the State of Rajasthan as a "special economic zone".

Department of Economic Affairs
  • Notification No. GSR585(E) to No. GSR592(E) Dated 25.07.2003 : Central Government has issued the following amendment rules and schemes

Rules

Post Office Savings Bank General (Amendment) Rules, 2003

Post Office Savings Bank General (Amendment) Rules, 2003

Post Office Recurring Deposit (Second Amendment) Rules, 2003

Post Office Time Deposit (Second Amendment) Rules, 2003

National Savings Certificates (VIII Issue) (Second Amendment) Rules, 2003

National Savings Certificates (VIII Issue) (Third Amendment) Rules, 2003

Kisan Vikas Patra (Second Amendment) Rules, 2003

Schemes

Specified Undertaking of the Unit Trust of India (Management of Schemes, Assets, Investment, Term of Office, Fees, Allowances and Conditions of Appointment of Advisers and Miscellaneous Provisions) Scheme, 2003

The Public Provident Fund (Amendment) Scheme, 2003

RBI

  • Guidelines for Consolidated Accounting and Consolidated Supervision 

Notification No. DBS.FID No. C-5 / 01.02.00/2002-03 Dated 01.08.2003 : With reference to Circular DBS.FID No. C-7 / 01.02.00/2002-03 dated September 2, 2002 forwarding the draft guidelines for Consolidated Accounting and Consolidated Supervision of the FIs and in the light of the comments received, and the views expressed at the meeting held with the select FIs on December 20, 2002, the guidelines and the final guidelines have been reviewed. The guidelines would be implemented with effect from the year commencing from April 1, 2003 (July 1, 2003 in case of National Housing Bank - NHB).

  • Wilful Defaulters and action there against

Notification No. DBOD. No. BC.DL. 7 /20.16.003/2003-04 Dated 29.07.2003 : It has been brought to notice that banks/FIs do not have grievance redressal mechanism in respect of borrowers classified as wilful defaulter. The matter has been reviewed by and it has been decided that the banks/FIs should take the specified measures in identifying and reporting instances of wilful default.

  • Amendments in Regulations and Directions

Notification No. DNBS (PD) C.C. No. 28 / 02.02 / 2002-03, No. DNBS. (PD). CC. No. 29 /02.01/2003-04 to No. DNBS.173/CGM(OPA)-2003 Dated 01.08.2003 :

Amendment to RBI Regulations for NBFCs Safe custody of liquid asset securities in an exclusive demat account 

Amendments to Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998

Amendments to Residuary Non-Banking Companies (Reserve Bank) Directions, 1987 

Amendments to Reserve Bank of India (Non-Banking Financial Companies) Returns Specifications, 1997 

Amendments to Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998 

Amendments to NBFC Regulations –Exposure to infrastructure facility

Ministry of Coal
  • Extension of Period for Acquisition of Lands as Specified in Notification No. SO 1803 Dated 17.07.2001

Notification No. SO857(E) Dated 25.07.2003 : Central Government has specified a further period of one year commencing from the 28th July, 2003 as the period within which the Central Government may give notice of its intention to acquire specified lands or any rights in or over such lands.

DGFT
  • Amendment In The ITC (HS) Classifications of Export and Import items 2002-2007 

Notification No. 18 (RE-2003)/ 2002-2007 Dated 06.08.2003 : Amendments have been made in the Schedule 2 ITC(HS) Classification of Export and Import items 2002-2007.

  • Advance Licences for cloves, cardamom

Public Notice No. 21/2002-07 Dated 01.08.2003 : Amendment has been made in the Handbook of Procedures (Vol.II) regarding Advance Licences for cloves, cardamom.

Department of Commerce

  • Initiation of Sunset Review Regarding Anti-Dumping Duty Imposed on Import of Styrene Butadiene Rubber (SBR) 1900 Series Originating in or Exported from Japan, Korea RP and USA 

Notification No. 15/5/2003-DGAD Dated 30.07.2003 : Sunset Review has been initiated Regarding Anti-Dumping Duty Imposed on Import of Styrene Butadiene Rubber (SBR) 1900 Series Originating in or Exported from Japan, Korea RP and USA 

Department of Industrial Policy

  • Rolex Paper Mills Limited, Andhra Pradesh Notified as a Mill Producing Newsprint

Order No. SO871(E) Dated 31.07.2003 : Central Government has notified Rolex Paper Mills Limited, Andhra Pradesh as a Mill Producing Newsprint

Department of Consumer Affairs
  • Prevention of Food Adulteration (1st Amendment) Rules, 2003

Notification No. G.S.R. 554 (E) Dated 18.07.2003 : In Appendix B, in item A.33 relating to Packaged drinking water (other than Mineral Water), in the table, serial number 40 relating to Pesticide residues considered individually and Total pesticide residues, has been substituted.

Ministry of Personnel, Public Grievances and Pensions
  • Central Civil Services (Pension) Amendment Rules, 2003

Notification No. SO860(E) Dated 28.07.2003 : (a) In the rule 10, in sub-rule (i), after the proviso the following proviso has been inserted, namely:--

Provided further that this rule shall not apply to a member of the Central Civil Services Group 'A' who opt for special Voluntary Retirement Scheme under Rule 29 A;

(b) After Rule 29, Rule 29A relating to Addition to qualifying service under special voluntary retirement scheme, has been inserted.

Press Information Bureau
  • Steps To Boost FDI In Coal And Mining Sector

Dated 22.07.2003 : In order to attract Foreign Direct Investment in coal sector the Government have decided that the private Indian companies setting up or operating power projects as well as coal or lignite mines for captive consumption in such projects may be allowed foreign equity upto 100% provided that the coal or lignite produced by them is meant entirely for captive consumption in power generation.

Supreme Court
  • T.K. Rangarajan Vs. Government of Tamil Nadu and Ors.

Unprecedented action of the Tamil Nadu Government terminating the services of all employees who have resorted to strike for their demands was challenged before the High Court of Madras by filing writ petitions under Articles 226/227 of the Constitution. 

The Hon'ble Supreme Court held That the government employees have no fundamental, statutory or equitable/Moral right to go on strike. 

  • Javed and Ors. Vs. State of Haryana and Ors.

In this batch of writ petitions and appeals the core issues is the vires of the provisions of Section 175(1)(q) and 177(1) of the Haryana Panchayati Raj Act, 1994 Placed in plain words the provision disqualifies a person having more than two living children from holding the specified offices in Panchayats. 

The Hon'ble Supreme Court held that one of the objects of the enactment was to popularize Family Welfare/Family Planning Programme and the same is consistent with the National Population Policy. Such a provision would serve the purpose of the Act as mandated by the Constitution. A legislation by one of the States cannot be held to be discriminatory or suffering from the vice of hostile discrimination as against its citizens simply because the Parliament or the Legislatures of other States have not chosen to enact similar laws. A uniform policy may be devised by the Centre or by a State. The impugned provision was held neither arbitrary nor unreasonable nor discriminatory. Right to contest an election is neither a fundamental right nor a common law right. It is a right conferred by a Statute. There is nothing wrong in the same Statute which confers the right to contest an election also to provide for the necessary qualifications without which a person cannot offer his candidature for an elective office and also to provide for disqualifications which would disable a person from contesting for, or holding, an elective statutory office.