Legislative and Regulatory Update

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[No.89]                                                                            June 20, 2004

International

SEBI

Department of Telecommunication

RBI

DGFT

Ministry of Road, Transport and Highways

Supreme Court

High Courts

 

 

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International Legal News

Cases

Source: Westlawinternational.com

§         Insurance: Insurer could pursue equitable subrogation action against negligent houseguest.

A homeowners' insurer had a right of subrogation against a houseguest who accidentally burned down the insureds' vacation home that was equitable, and not statutory, in nature. The statute governing the subrogation provision of a standard form of fire insurance failed to provide the insurer with a direct, and inviolate, right of subrogation and merely provided that the insurer could require the insured to assign any rights to the insurer. The insurer, which paid $132,505 in damages to the insureds, could pursue its equitable subrogation action against the negligent houseguest. The insureds could have pursued their own negligence action against the houseguest, who benefited by the insurer's payment of a debt truly owed by him. These were matters of first impression.

Wasko v. Manella

§         Judicial Administration: Administrative misconduct of justice of the peace warranted removal from office.

Removal from office was warranted for a justice of the peace who failed to timely and properly receipt, deposit, and account for monies received by the court in more than a thousand instances occurring over a period of more than five years, and who failed to timely execute the business of the court involving approximately 22,000 instances of unprocessed citations. Aggravating the judge's misconduct was the fact that he persisted in his misconduct in the face of numerous administrative directives to change his conduct.

In re Rose

§         Labor and Employment: City was not entitled to cost-of-living adjustments paid in connection with Heart and Hypertension Act claim.

The Connecticut Second Injury Fund was not required to reimburse a city and its workers' compensation insurer for cost-of-living adjustments paid to a claimant in connection with her claim arising under the Heart and Hypertension Act. The benefits under the Act were intended as a "special bonus" to paid police officers and firefighters and were not workers' compensation benefits for purposes of the provision of the Workers' Compensation Act governing reimbursement by the Second Injury Fund. This was a matter of first impression.

Bergeson v. City of New London

§         Legal Services: Statute requiring referendum on bar unification violated separation of powers.

A New Hampshire statute requiring the State Bar Association to conduct and be bound by a referendum of its membership on the issue of unification violated constitutional separation of powers. The referendum might result in the effective repeal of the requirement, imposed by the New Hampshire Supreme Court, that all lawyers practicing in the State be members of a state bar association. The legislature usurped the inherent authority of the judicial branch to regulate the practice of law, which included the authority to determine whether unification of the bar was advantageous.

In re Petition of New Hampshire Bar Ass'n

§         Litigation: Developer could not recover attorney fees in construction defects case after case was settled.

A residential real estate developer had no right to recover attorney fees as part of its costs incurred in an underlying action against it by homeowners for construction defects, after the developer tendered its defense to subcontractors. The developer was not a prevailing party in the litigation, inasmuch as the developer and the subcontractors had paid the homeowners in exchange for a mutual releases of liability.

Bramalea California, Inc. v. Reliable Interiors, Inc.

§         Civil Rights: Absence of fixed deadline for grant of demonstration permit did not invalidate ordinance.

The absence of any fixed deadlines for grant or denial of permit applications for conduct of demonstration on public property did not render the content-neutral ordinance violative of the First Amendment. Additionally, the eight month delay in processing an animal rights advocacy organization's application for permit to conduct a demonstration at the 2002 Winter Olympics did not violate the organization's First Amendment rights where the city acted on permit roughly two and a half months before the Olympics began.

Utah Animal Rights Coalition v. Salt Lake City Corp

§         Family Law: Grandparents rebutted presumption father acted in best interests of children.

Grandparents in a custody dispute with the father over two children rebutted the due process presumption that a parent acts in the best interests of the child. That evidence was the grandparents' role as primary caretakers to the children after their mother's death, the father's denial of contact between the children and grandparents by moving the children to Montana in violation of a court order, and the present risk to the children that granting custody to the father would be detrimental to them.

In re Marriage of O'Donnell Lamont

§         Family Law: Minor biological father responsible for child support, even though child was a result of mother's criminal act.

Fact that a child resulted from the criminal sexual act of mother in having sexual intercourse with biological father when he was 14 years old did not absolve biological father from the responsibility to pay child support, according to a Michigan Court of Appeals. The Court emphasized that child support was imposed to satisfy the needs of the child, rather than to benefit a custodial parent, and stated that the issue was not whether the father was, or could have been, a consensual participant in the sexual activity.

L.M.E. v. A.R.S.

§         Social Security: Children posthumously conceived by in vitro fertilization were eligible for children's benefits.

Children posthumously conceived by in vitro fertilization were eligible for child's insurance benefits under the Social Security Act. Conception was achieved using the sperm of the insured, the mother's late husband. The children who resulted were "children" within the Act's broad definition. The children's parentage was undisputed. Further, the children were legitimate under the applicable state law. Thus, the Act's dependency criterion was met.

Gillett-Netting v. Barnhart

§         Legal Services: Attorney could not enforce oral charging lien against client's recovery.

An attorney filed an action against several parties to enforce a charging lien he obtained from a former client. The trial court sustained defendants' demurrers, and the Court of Appeal reversed on the ground the lien did not have to be in writing. The Supreme Court reversed the Court of Appeal. The Supreme Court held that by acquiring an oral charging lien against the client's future judgment or recovery, the attorney acquired an interest that was adverse to the client. Accordingly, the attorney could not enforce the lien where he did not comply with Rule of Professional Conduct requiring the client's informed written consent to the attorney's acquisition of an interest adverse to the client.

Fletcher v. Davis

§         Torts: Statement wrongfully identifying someone as homosexual is not defamatory per se.

A statement wrongfully identifying someone as homosexual is not defamatory per se under Massachusetts law. Such a statement no longer imputes criminal conduct. If court was to agree that calling someone a homosexual is defamatory per se, it would, in effect, validate that anti-homosexual sentiment and legitimize relegating homosexuals to second-class status.

Albright v. Morton

News

§         Deadlock On EU Constitution Feared

EU leaders are struggling to finalise a constitution and choose a new European Commission chief in Brussels. The exercise would require a "handful of issues" to be settled before the EU's first constitution could be agreed although there is expected a risk of stalemate, with disagreements over the formula for majority voting. No one, as of now, has enough support yet for the job of commission head. The search for a successor to current President Romano Prodi is becoming increasingly polarised, with Britain on one side and the French and Germans on the other.

§         Mayor To Spend 30 Years In Jail For Genocide

A former Rwandan mayor, Sylvestre Gacumbitsi, has been sentenced to 30 years in prison for organising the slaughter of 20,000 people during the 1994 genocide. Gacumbitsi led the massacre of thousands of people sheltering in Nyarubuye Church, which was one of the worst events in the genocide. He distributed weapons and urged ethnic Hutus to kill and rape their Tutsi neighbours which led to the killing of some 800,000 Tutsis and moderate Hutus in 100 days in 1994.

§         Algerian Government Defends Editor's Jailing

The Algerian government has specifically denied trying to silence the independent media in the country with the jailing of a newspaper editor fiercely critical of the authorities. The justice minister insisted that Mohamed Benchicou, editor of Le Matin newspaper, had been jailed for financial wrongdoing and that the same has got nothing to do with freedom of expression or politics. Benchicou was jailed on accusation of violating Algeria's laws on money transfers abroad but regarded by some as a warning to the private press.

§         Tobacco Company Ordered To Recall Cigarettes

Famous tobacco company Brown & Williamson has been strictly ordered to recall thousands of cigarette packets after an advertising campaign was found to target children. This has come in the wake of Justice Charles Ramos ruling that the company, owned by British American Tobacco, was trying to attract young customers with its hip-hop based ads. The company has agreed to abide by the judges ruling.

§         Ukraine MPs Call For Impeachment Over Murder Of Opposition Journalist

A parliamentary committee in Ukraine has recommended that the president should be impeached over the murder of an opposition journalist. President Leonid Kuchma, who has repeatedly denied any part in the murder, has immunity from prosecution. Journalist Georhiy Gongadze, who wrote for a news website, was killed in 2000 but no-one has yet been charged. The journalist, who crusaded against corruption in Ukraine, was abducted from Kiev and his decapitated body was later found in woods outside the capital.

§         Sri Lanka To Impose 100% Land Tax

Sri Lanka is planning to re-impose a 100% tax on foreigners buying land in view of the locals being priced out of the domestic market. The step is being taken in the wake of resentment and house prices having risen as expatriates from India, Hong Kong, Singapore and Europe buy holiday homes. Also, the sales do little to boost Sri Lanka's economy.

§         Living Wills Will Get Legal Backing

The government in Briton is planning to introduce a law to give people a clear legal right to draw up so-called "living wills" as some 2m Britons are unable to make decisions for themselves. The wills would enable people to spell out what medical care they want if they become seriously ill and are unable to make their own decisions. The proposals are outlined in a new Mental Capacity Bill, which was published recently. It is pertinent to note that the courts already recognise living wills but the Bill aims to enshrine the right to draw one up in law.

§         Saddam Could Face Death Penalty

Saddam Hussein could face the death penalty if found guilty by a war crimes tribunal. Salem Chalabi, the head of the Tribunal said that Iraqi law permitted execution for murderers, but a current coalition-imposed moratorium on capital punishment would have to be lifted. Hundreds of Iraqis have been flocking to submit evidence against their former rulers.

§         China Faces Child Trafficking Menace

The leader of a gang involved in buying and selling 120 baby girls has been sentenced to death by a court in China. Two other members of the group were given life imprisonment for their part in the trafficking of babies in the impoverished central province of Henan. However, there is no word on the fate of the girls, sold between 1998 and 2003. The Chinese authorities believe thousands of women and children are trafficked every year. Many of them are forced into marriage or sexual slavery, or are used as servants. Every effort is being made to curb the problem.

§         Corruption Costing Very Expensive To Indonesia

Indonesia has lost $2.35bn in the past two years due to corruption, as per the attorney general's office. The figure is derived from known cases investigated by the authorities - 108 cases have been pursued in the first four months of this year alone. Cases range from misuse of state funds by officials to simple bribery. Corruption is endemic in Indonesia, but with a presidential election looming, candidates are all promising to tackle the problem.

SEBI

Secondary Market Division

§         Transaction Work Flow for Straight Through Processing and Standard Messaging Formats

Circular No: SEBI/DNPD/Cir-25/04 Dated 10.06.2004: The SEBI, with a view to protect the interests of investors in securities and to promote the development of and to regulate the securities market, vide the above circular and in consultation with the STP centralised hub, STP service providers and the STP users has prescribed the transaction work flow for the STP system which shall be followed by all institutional investors on a mandatory basis from July 1, 2004. The circular sets down the guidelines on the issuance of a contract note in electronic form in the prescribed format and the method of sending it by the broker, custodian and the institutional investor. It also clarifies that if a message is sent using the STP centralised hub framework from one user to another user, then the confirmation / rejection for such a message shall also be sent using the STP centralised hub framework.

Department of Telecommunication

TRAI  

§         Directive on Auto Roaming Services to All Pre-paid Subscribers

Press Release NO. 41/2004 Dated 16.06.2004: In view of representations received by TRAI from some pre-paid subscribers that they are being charged for auto-roaming services even though they do not want to avail the roaming and also the fact that there is ambiguity in the mind of the subscribers for the SMS charges while roaming, the TRAI vide Press Release No. 41/2004 Dated 16.06.2004 issued a directive to all Cellular Mobile Service Providers (CMSPs) to inform the subscriber through SMS whenever they roam into another license area that they will be charged for the roaming facility only if they choose to either make or receive a call while roaming. Further, that any fixed charges for roaming such as roaming rental should not be charged unless roaming is activated. The SMS to inform the customer of the above conditions shall not be charged.

RBI

§         Reconciliation of Relief or Savings Bond, Appendix IV Statements

Circular No: CO.DT.13.01.299/H.7295 /2003-04 Dated 15.06.2004: The RBI had stipulated vide paragraph 1.7 of Memorandum of Procedure (MOP) that the designated branches of Agency banks should submit a statement showing the amount of subscription received and the Bond Ledger Accounts opened in their books during the month in Part A - Appendix IV on a monthly basis to the PDO of jurisdiction and to their controlling office. In order to facilitate reconciliation of subscription amount received and remitted to Government of India and related bonds issued, the RBI vide Circular No: CO.DT.13.01.299/H.7295 /2003 Dated 15.06.2004 states that the Link Cells of Agency banks at Nagpur / the Main branch of SBI at Nagpur, should sort the branch-wise data of the Appendix IV according to branches falling within the jurisdiction of a particular Public Debt Office and should submit Appendix IV statement in respect of all branches on a monthly basis in soft and hard copy to the Public Debt Office of jurisdiction besides submission of the above statement to CAS, Nagpur for the purpose of claiming brokerage / commission. Henceforth, the agency bank branches should discontinue sending Appendix IV directly to PDO of jurisdiction. The circular also states that in case of non-submission of the requisite data within the 15th day of the following month by the Link Cells / SBI Main branch at Nagpur to the Public Debt Office jurisdiction, a penalty of Rs.500/- per day would be levied and recovered from the bank by CAS, Nagpur for each day of delay beyond the above date.

§         PPF 1968 - Payment of Turnover Commission on Interest Liability as on 31st March

Circular No: CO.DT.No.15.02.001/H.7376 /2003-04 Dated 16.06.2004: The RBI vide circular letter No.GA.31.12.002/1710/1992-93 dated 2nd April 1993 advised the agency banks to desist from the practice of claiming Turnover Commission on the amounts included in interest credit and interest debit scrolls dated 31st March each year but during the course of inspection by the officials of the Chief Controller of Accounts, Ministry of Finance, it was observed that some agency banks had claimed turnover commission on interest amounts on the receipt side as well as on payment side. Vide the above circular, the RBI reiterates that no turnover commission is payable to the agency banks on the above transactions and that the agency banks should issue necessary instructions to the branches concerned to ensure that claims for turnover commission under PPF 1968 on the amounts of the interest credit and interest debit scrolls dated 31st March each year are not submitted to Reserve Bank of India offices / CAS, Nagpur in future.

§         Risk Weight for Exposure to Public Financial Institutions

Circular No: DBOD.BP.BC. 91 /21.01.002/ 2003-04 Dated 15.06.2004: Vide circular DBOD.BP.BC.103/21.01.002/98 dated October 31, 1998 the RBI issued guidelines on risk weights on investment in bonds/ debentures of select PFIs at 20 per cent. Banks were also advised that exposures to corporates, which are guaranteed by select PFIs, would tantamount to exposure on those PFIs for capital adequacy purposes and would consequently attract a risk weight of 20 per cent. The RBI vide Circular No: DBOD.BP.BC. 91 /21.01.002/ 2003-04 Dated 15.06.2004 advises the banks that with effect from April 1, 2005, exposures to all PFIs would attract a uniform risk weight of 100 per cent towards credit risk.

§         Issue of Long term Bonds by Banks

Circular No: DBOD.BP.BC. 90 /21.01.002/ 2003-04 Dated11.06.2004: At present, banks are allowed to issue long-term subordinated debt in the nature of unsecured redeemable bonds, which qualify for Tier II capital. In the context of gradual conversion of term lending institutions into banks and with a view to giving boost to infrastructure lending, and as announced in paragraph 115 of the Annual Policy Statement for the year 2004-05 dated May 18, 2004, the RBI vide Circular No: DBOD.BP.BC. 90 /21.01.002/ 2003-04 Dated 11.06.2004 reiterates that banks will be allowed to raise long-term bonds with a minimum maturity of five years to the extent of their exposure of residual maturity of more than five years to the infrastructure sector. It is intended that banks should have first provided assistance to such infrastructure projects before raising resources through bonds.

DGFT

§         Clarifications Regarding Import of Di Butyl Phthalate and Di Octyl Phthalate

Circular No: 38(RE-2003)/2002-2007 Dated 16.06.2004: The Directorate General of Foreign Trade received representations regarding clarification for classification of Di-Butyl Phthalate, Di-Octyl Phthalate in the ITC(HS) Classification of Export and Import Items, 2002-07. The issue was examined in consultation with the Department of Chemicals and Petrochemicals, Ministry of Chemicals and Fertilizers and the DGFT vide the above circular clarifies that the imports of Di-Butyl Phthalate, Di-Octyl Phthalate etc specifically covered at Exim Code 29.17 and shall not be cleared as Phthalate Plasticisers under Exim Code 3812.20 of ITC(HS) Classifications of Export and Import Items, 2002-07.

 

Ministry of Road, Transport and Highways

§         Land Acquisition for Widening National Highway No. 45

Notification No: SO683(E) Dated 14.06.2004: The Central Government vide notification S.O.97(E) dated 20th January, 2004 of Ministry of Road Transport and Highways declared its intention to acquire the lands specified in the Schedule annexed to that notification for the public purpose of building, maintenance, management and operation of National Highway No.45 in the stretches of land from Km.121/000 to Km.214/300 (Tindivanam - Villupuram - Trichy Section) in the State of Tamil Nadu. The Central Govt vide Notification No: SO683(E) Dated 14.06.2004 declares that the lands specified in the Schedule to this notification shall be acquired for the aforesaid purpose and that the lands specified in the Schedule shall vest absolutely in the Central Government free from all encumbrances on the publication of this notification in the Official Gazette.

Supreme Court

§         Sakshi Vs. Union of India (UOI) and Ors.

The main question which required consideration was whether by a process of judicial interpretation the provisions of Section 375 IPC could be so altered so as to include all forms of penetration such as penile/vaginal penetration, penile/oral penetration, penile/anal penetration, finger/vagina and finger/anal penetration and object/vaginal penetration within its ambit. Section 375 uses the expression "sexual intercourse" but the said expression has not been defined.

The Hon’ble Court in its esteemed opinion held that only sexual intercourse, namely, hetrosexual intercourse involving penetration of the vagina by the penis coupled with the explanation that penetration is sufficient to constitute the sexual intercourse necessary for the offence of rape has been held to come within the purview of Section 375 IPC. The wide definition which the petitioner wanted to be given to "rape" as defined in Section 375 IPC so that the same could become an offence punishable under Section 376 IPC has neither been considered nor accepted by any Court in India so far. Prosecution of an accused for an offence under Section 376 IPC on radically enlarged meaning of Section 375 IPC as suggested by the petitioner would violate the guarantee enshrined in Article 20(1) of the Constitution.

It was further held that an exercise to alter the definition of rape, as contained in Section 375 IPC, by a process of judicial interpretation, and that too when there was no ambiguity in the provisions of the enactment was bound to result in good deal of chaos and confusion, and would not be in the interest of society at large.

High Courts

Delhi

§         Sh. Harcharan Singh Vs. Bureau of Indian Standards and Ors

This petition was filed on the ground that a vacancy had to be filled on the basis of the Recruitment Rules in force as on the date of vacancy because a right accrued to a person to be considered for promotion as and when a vacancy arose and was intended to be filled up.

The Court held that Petitioner was ineligible to be promoted when the vacancy occurred and respondent as per the rules prevailing at that time could waive the eligibility norm. But before the Appointment Committee of the Cabinet had taken up the recommendation of the Select Committee pertaining to the appointment of the petitioner, the new Regulations came into force. And by the time the new regulations came into force, petitioner was not qualified under the previous regulations for appointment to the post. Therefore the petitioner had no right to be considered for promotion.

Andhra Pradesh

§         A.Kishore @ Kantha Rao V G. Srinivasulu

This reference was made by a learned single judge of the court to refer the question whether the unregistered sale deed is admissible in evidence for collateral purpose.

The Court held that an unregistered sale deed can be taken into consideration for the collateral purpose of establishing possession and nature of possession. But such lease deeds cannot be used for the purpose of proving the terms of such lease.

 

 

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