by LFIAdmin | Jan 3, 2024 | Uncategorized
By Ritabh Singh, Final Year student at the Government Law College, Mumbai
ritabhsingh44@gmail.com | Jan 03, 2024
INTRODUCTION
A trademark can simply be understood as a word, letter, shape of an object etc. which denotes a certain enterprise and which distinguishes it from other entities. To provide an example, the MNC Apple Inc. has trademarked the word “Apple” and the logo of a bitten apple [1](in its class of goods and services) which distinguishes it from its competitors. A trademark is an intellectual property, meaning it has been creatively invented to be used specifically by its inventor unless he sells the rights therein to a third party.
Trademarks have served an important function not only for companies but also for general consumers. It facilitates the creation of an association between the provided goods or services by the company and the general consumers. This association then furthers the value and reputation of the company.
Having a registered trademark also protects the created brand as it disallows other entities to use the trademark. Thus, once a trademark is registered with the relevant authority, other companies cannot use the trademark. To continue with the above-provided example, other companies, especially competitors, cannot use the trademark “Apple” for their activities, thereby protecting the value created by Apple.
STATUTORY DEFINITION
The Trade Marks Act of 1999 governs the law relating to trademarks in India. The following are the relevant definitions –
1. Section 2(m) : “mark” includes a device, brand, heading, label, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination of colours or any combination thereof;
2. Section 2(za) : “trade mark” means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include the shape of goods, their packaging and combination of colours;
A trademark is infringed when an entity, not being the registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which is identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered and in such manner as to render the use of the mark likely to be taken as being used as a trade mark [2].
TYPES OF TRADEMARKS
Trademarks can be generic, suggestive, fancy, arbitrary and descriptive. Generic and descriptive trademarks are difficult to register as they are of a general nature and have no distinct or secondary meaning. They simply describe the product or service provided by the company and use extremely common words as their mark. In contrast, fancy and arbitrary trademarks are registered much more easily and the use of them by other entities does not usually stand in court. Such trademarks are already unique as they may be invented words or may have no connection with the product or service at all or may also suggest a relation with the product or service, but do not describe it [3].
Generic and descriptive words are usually not registered as trademarks. However, some trademarks, even though being of a generic character, tend to develop a unique character in the psychology of general consumers and these consumers start associating that generic trademark with one entity only. The courts take into account certain elements while deciding if a particular generic trademark has attained a distinct meaning [4].
FACTORS MAKING A GENERIC TRADEMARK UNIQUE
It is well misunderstood that a generic word may never acquire distinctiveness and therefore may never be registered. This misconception has been answered by various courts in various judgements. The courts have held that where it is argued that a generic word has acquired distinctiveness, the burden of proof lies on the user of such mark to prove its distinct character.
The most important factor which makes a generic trademark unique is when a consumer having reasonable prudence develops a secondary meaning for the generic word and deeply associates it with the product or service rendered by the company. Only when a generic trademark acquires a distinct identity can it become a unique trademark [5]. A commonly used word can become uncommon in the eyes of the consumers, after which protection by the way of a registered trademark is awarded to the user.
The following are arguments in favour of proving a generic word has attained distinctiveness –
1. Huge market & investments in promotion [6] – If it is shown that a generic trademark is being used to describe a product or service rendered by a company having a huge consumer base and a substantial amount of money has been spent in the promotion of the trademark, it can be argued that the generic word being used to describe the product and service has acquired uniqueness due to the vast number of consumers of the same. The goodwill and reputation enjoyed by the company play a crucial role in the propoundment of this argument.
2. Addition of a unique prefix or suffix [7] – When a unique word is used as a prefix or suffix to a generic trademark, the entire trademark may acquire uniqueness and acquire a distinct identity. Such addition mixes the general word with unique words, thereby making the created word distinct. The interplay of words may result in trademark distinctiveness.
3. Long and exclusive use – When a generic trademark has been exclusively used for a long time, it can be argued to have created a unique identity in the eyes of the generic public. The general public, due to the long and exclusive use of a generic word by a company, has started associating that word only with such a company thereby granting it uniqueness.
4. No competition – If, in a particular class, a company does not have any competition and is the only provider of a good or service, the company may use a generic word as its trademark. The same logic can apply where the goods and services provided by different companies are substantially different and the mark is registered under different classes.
5. Not visually, phonetically or deceptively similar to any other mark [8]- Where a generic word is not visually, phonetically or deceptively similar in any manner to any other registered trademark, it can be argued that the word itself has developed a unique character and begs protection.
The convincing point for the court is that the generic and common word is no longer generic or common and cannot cause any confusion in the eyes of any man with reasonable prudence. Such a word has developed its own uniqueness and is well associated with the company by general consumers [9].
CONCLUSION
It will finally be the decision of the court to decide if a generic word has attained distinctiveness. The court carefully examines the facts and circumstances of each case and then decides the case on merits. In particular, the courts are careful about not creating a monopoly in favour of the user which then directly affects competition. The court also checks if the word can cause confusion in the minds of the general public. Lastly, courts may also issue stringent conditions in the use of a generic word as a registered trademark for its appropriate use and for ensuring healthy competition.
Endnotes
[1] https://www.apple.com/in/
[2] Ref to relevant provisions of the Trade Marks Act, 1999, specifically sec 29.
[3] M/S Matrimony.Com Limited v. Kalyan Jewellers India Ltd. 13th March 2020
[4] Hatsun Agro Product Ltd. v. Arokya Food Products (2016)
[5] Info Edge (India) Pvt Ltd vs. Shailesh Gupta 98 (2002) DLT 499
[6] DFL Limited v. Sohum Shoppe Limited (2015)
[7] Prem Ratan Rathi vs. Ashish Iron Trading Co (2013)
[8] Amritdhara Pharmacy vs. Satya Deo Gupta (1963)
[9] Lazmikant V. Patel vs. Chetanbhai Shah (2002)
by LFIAdmin | Dec 23, 2023 | Uncategorized
DHRUTI KAPADIA, DOCTORATE STUDENT AND MEDIATOR
23rd Dec, 2023
Conflicts often take place across the globe. There are often deep marks left behind from which we see history repeat itself, and we see conflicts occurring frequently. With this, we can see how mediation plays a vital role as one of the mechanisms under the wheel of Alternate Dispute Resolution for resolving disputes. There are different fractions of conflict and conflict occurs at every level of life. It’s not only limited to individuals, but also organizations and has truly captured the world.
The stakeholders often find it challenging to apologize, say it at the workplace, or say it in their own house where spouses fight or parents fight with their children. When it comes to apologizing, there is the self-realization of self-improvisation, and it becomes a leg back option for most of the stakeholders due to which it leads to solid ego issues and many a times the relationships bitter up.
Only if, culturally, we adapt to admit mistakes and to let go of the past and move forward, we find resolution and peace. This process will heal the stakeholders, not only mentally but also emotionally, under which the overall personality of the stakeholders can change to be better human beings. Therefore, when it comes to the strategy of resolving disputes, the smooth process of accepting the wrong and curing it would come forward, and there would be better opportunities for the stakeholders in the global world to progress.
Also, if conflict management together is taught in school, where children start understanding how to handle their conflicts and to come to amicable solutions with their classmates or with their parents or their teachers, they will grow up to be better human beings with the vision to take care of a situation in the global world. They will develop the ability of resolving disputes which would bring effective solutions in a fast track mode and build good relationships not only with conflicting individuals but also with the public at large who would then consider them equipped enough to come up with innovative solutions which can bring a win-win situation for everyone around them.
The same generation holding out to be the nation’s future will always see themselves as good mediators if they are taught to resolve conflicts, from the very inception of their school days, which often is missed out. Hence, a progressive nation must visualize and ensure mediation requires no learning age. Still, it is essential to teach every individual how to actually mediate and also participate in peace-making agreements at all stages in life and to know the positive approaches on how to resolve their conflicts. Therefore, the mindset of our nation’s future should be cultivated in a positive approach way so that as they grow up as individuals, they will know how to negotiate, how to act and react with their society and also how to gain benefits by using strategic thinking instead dealing with life in a destructive manner.
Therefore, the training on how to mediate would be essential if one starts realizing that mediation is social healing; if one has entered into a conflict or has a big community of disputes, which could be emotionally draining, it could cause commercial loss and have a negative impact on society.
There are situations where mediation cannot be resorted to and the disputes are so intense that litigation is the only process and option for the parties to get justice. In such a situation, if an opportunity comes up to understand that there will be significant loss for long years and the parties will drain themselves, then with proper advisors and systemic strategies, there can be applied a strategy at some stage to introduce mediation which can open doors to an amicable solution.
There have been instances of family disputes, property disputes and commercial disputes which have built good, progressive and peaceful ways of dispute resolution by coming to a conclusive settlement through mediation, which can be enforceable by law. The prolonged battles of arguments have closed with amicable solutions, and not only that, with such excellent solutions that result in the stakeholder’s relationships being improved. This shows that mediation is the way for the parties to heal themselves socially and which allows them to rebuild the relationships damaged due to the conflict.
Many people do not seriously indulge in the process of mediation and also abuse the process to delay litigation. However, if the stakeholders genuinely want to resolve their dispute, mediation is the best method of Alternate Dispute Resolution as it will help them achieve commercial benefits, emotional benefits and mental peace as it will save time, money and energy. The experience of re-building relationships can crop out positively for future perspectives as well.
This social healing can help society stay connected. Also, whenever and wherever there is a war, there is always a possibility that conflict management is taken care of and peace is brought through the mediation process. Moreover, the intervention of peace-making bodies such as the United Nations can be helpful.
“World peace must develop from inner peace. Peace is not just the mere absence of violence. Peace is, I think, the manifestation of human compassion.” ― Dalai Lama XIV.
The peace building process truly starts when one starts realizing that violence is not the solution to anything, as destructive modes can only destroy human lives. There have been many wars due to conflicts related to resources, and to date, the impact of those wars remain. It is not only the entire nations’ conflict with global competition, but also individual conflicts, that need to be taken care of to achieve the ultimate solution of peace. It is imperative to realize that mediation plays a vital role in social healing of stakeholders and has the capability to achieve universal peace and abstinence from wars.
by LFIAdmin | Sep 3, 2023 | Uncategorized
By Sandip N. Vimadalal, Advocate & Solicitor and assisted by Ritabh Singh, Articled Clerk
sandipvimadalal@yahoo.com| Sept 3, 2023
INTRODUCTION
1. There is lot of ambiguity and unawareness in the minds of tax and legal practitioners and parties involved, about the applicability of Goods and Service Tax (“GST”) in respect of transactions relating to tenanted premises (residential and non-residential) under the provisions of The Central Goods and Service Tax Act, 2017 (“the Act”) and the Notifications, Circulars etc. issued under the Act.
2. Generally, transactions with respect to tenanted premises are:-
(i) Surrender of tenancy rights by the tenant to the landlords, whereby the tenant surrendering the tenancy rights receives the consideration.
(ii) Transfer of tenancy rights by the outgoing tenant in favour of the incoming tenant with the consent of the landlord, wherein the incoming tenant is paying consideration to the outgoing tenant as also to the landlord.
(iii) Creation of fresh tenancy in respect of the premises by the landlord in favour of the tenant against payment of premium/consideration.
The above transactions take place by execution and registration of certain writings such as Surrender Deed, Deed of Transfer of Tenancy Rights, Agreement for Tenancy etc.
RELEVANT LAW
3. It is necessary to examine certain provisions of the Act as also Notifications/Circulars issued under the Act.
(A) Section 7 of the Act defines “Supply” as follows:-
“7(1) For the purposes of this Act, the expression “supply”
includes–
(a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business;
(b) ………………….; and
(c) the activities specified in Schedule I, made or agreed to be made without a consideration; and
(d) the activities to be treated as supply of goods or supply of services as referred to in Schedule II.”
(B) Item 2 of Schedule II of the Act prescribes “tenancy” as “supply of services” which is as follows:
“2. Land and Building
(a) any lease, tenancy, easement, license to occupy land is a supply of services;
(b) any lease or letting out of the building including a commercial, industrial or residential complex for business or commerce, either wholly or partly, is a supply of services”.
Thus, any lease, tenancy, easement, license to occupy land or building is a supply of services.
(C)(i) Central Board of Indirect Taxes and Customs (“CBIC”) has clarified that transfer of tenancy rights against the consideration in the form of tenancy premium is a supply of service liable to GST as the same is in form of lease or renting of immovable property which is declared to be a service under item 2 of Schedule II the Act. It is further clarified that though transfer of tenancy rights is subject to stamp duty and registration charges, however, it would not preclude the transaction from the scope of “supply” and from payment of GST. Thus, it cannot be treated as sale of land or building in terms of item 5 of Schedule III of the Act.
(ii) The last three lines of para 5 of the said clarification [1] makes specific reference that “As regards services provided by outgoing tenant by way of surrendering the tenancy rights against consideration in the form of a portion of tenancy premium is liable to GST”.
(D)(i) Entry at SL No. 12 of Notification No. 12/2017 – Central Tax (Rate) dated 28th June, 2017 [2] issued by Government of India, Ministry of Finance (Department of Revenue) reads as under:-
(ii) Thus, the services as referred above are exempted.
ANALYSIS
4. The activity of transfer of tenancy right or creation of tenancy right (which also includes lease, tenancy, easement and license) against consideration in the form of tenancy premium is a supply of service liable to GST.
5. The surrender of tenancy rights where landlord pays premium to the tenant for giving up the right to use/occupy the premises is considered as giving up of right in the property which may attract GST. However, it can be well argued that surrender of tenancy rights does not fall within the scope of the expression “Supply” referred in Section 7(1)(a) of the Act.
6. The term “residential dwelling” in terms of the normal trade parlance, as per which it is a residential accommodation, but does not include hotel, motel, inn, guest house, camp-site, lodge, house boat, or like places meant for temporary stay. Therefore it could be inferred that a residential dwelling is a residential accommodation meant for permanent or longer stay and does not include guest house, lodge or like places [3].
7. The service by way of renting of residential dwelling for use as residence is exempt except where the residence dwelling is rented to a registered person. The registered person is a supplier having an aggregate taxable supply of goods or services exceeding Rs. 20 lakhs [4]. The effect of explanation to Entry at SL No. 12 is as under:-
(a) “A” has rented residential dwelling to “B” who is an unregistered person under the Act. This transaction is exempted from GST.
(b) “A” has rented a residential dwelling to “B”, who is a registered person. If the registered person is an individual and can show that the residential unit is taken in his personal capacity for use as his own residence and the payment for the rent is made on his own account, it can be contended that such transaction is exempted from applicability of GST, for e.g.
(c) “A” has rented residential dwelling to M/s. XYZ, a proprietary firm of “B” and which firm is a registered person. This is transaction is not exempted from GST.
(d) However, in the event “A” has rented residential dwelling to “B” (who is also the proprietor of M/s. XYZ, a registered entity) but such renting is on the personal capacity of “B” for his own residence and not that of his proprietary concern, such renting is exempted from GST provided nothing on account of the proprietary firm is being undertaken from such residential dwelling.
8. The services provided by outgoing tenant by way of surrendering the tenancy rights against consideration (either to the landlord or to the incoming tenant or to both), irrespective whether it is residential or non-residential, may be liable to GST.
9. (i) It can also be contended that the person letting out the premises to students for residential use (hostel) will not fall within the meaning of “services by way of renting of residential dwelling for use as residence” contemplated under SL No. 12 of Service exemption notification dated 28th June, 2017 [5].
(ii) Under entry at SL No. 13 as referred in the said Notification No. 12/2017, renting of certain premises by charitable or religious trust as referred therein below the prescribed limit are exempted from GST.
10. The supply of services referred in item Nos. (4), (5) and (8) above shall be liable to GST PROVIDED the same is by a person in the course or furtherance of business.
FURTHERENCE OF BUSINESS
11. (i) Section 2 (17) of the Act defines “business” as under:-
“(17) “business” includes –
(a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit;
(b) any activity or transaction in connection with or incidental or ancillary to sub-clause (a)” [6];
(ii) The GST shall be applicable on the “supply” of services provided the same are “in the course or furtherance of business”.
(iii) If the supply of services is not directly or incidentally in the course of furtherance of business, it will not attract GST.
(iv) In the case of M/s. Panacea Biotech Ltd. Vs. Commissioner of Trade and Taxes [7] it has been observed by the Hon’ble Delhi High Court that “But the selling of used cars cannot by any stretch of the imagination be characterized as “ancillary” or incidental to the business of a pharmaceutical company. It is not shown that the cars were of a special character e.g. air conditioned vehicles especially designed to store and ferry pharmacy products”. It was further observed “However, the assesse never held them for the purpose of sale and purchase but for using them. After their use, having regard to lapse of time, and their wear and tear, the assesse decided to replace them. These cars were then sold. Their sales in a sense are twice removed from the business of the Assesse. They can not be call “incidental” or “ancillary” to the manufacture and sale of pharmaceutical products, which the assesse is engaged in.”
(v) CBIC has by its press release dated 13-07-2017 stated that “Even though the sale of old gold by an individual is for a consideration, it cannot be said to be in the course or furtherance of his business (as selling old gold jewellery is not the business of the said individual), and hence does not qualify to be a supply per se”.
(vi) The isolated transactions of tenancy (such as surrender of tenancy, transfer of tenancy) by the supplier who is not in the business of buying and selling of tenancy rights (irrespective of whether it is residential or non-residential) may not be considered as in the course or furtherance of business and should not attract GST. This is an arguable issue which depends on the facts and circumstances of each case.
(vii) If the owner/landlord (“supplier”) has let out many premises in the building to various parties, it may be considered in the course or furtherance of business.
(viii) If the owner buys one or more properties and in turn lets it out, the transaction may be considered in the course or furtherance of business.
(ix) The tenant who is not engaged in the business of acquiring and transferring/surrendering tenancy rights, surrendering the tenancy rights may not be termed as “in the course of business” of the tenant.
VALUE TO BE ADOPTED
12. (a) An important issue arose before the Authority for Advance Ruling, GST [8] wherein the Applicant [9] brought up the issue of “Whether the Value to be adopted (for payment of GST/Central Tax) is the guidance value (i.e. Ready Reckoner Value) or sale consideration, particularly when guidance value fixed by the local authority is more than sale value”. It has been interalia observed and ruled by the Authority as under:-
(i) As per Section 15(1) of the Act the value of supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both, including the non-monetary consideration, if any, where the supplier and the recipient of the supply are not related and the price is sole consideration for supply.
(ii) From the above, it is clear that the Act contemplates to treat the transaction value as the value of supply unless the same is rejected and the value determined as per Section 15 of the Act. It does not contemplate to consider a guidance value prescribed under another legislation to be deemed to be the value of the supply, unless the transaction value itself is disputed and found not acceptable under Section 15 of the Act. In the latter case, the determination of the value of such supply shall be made as per the provisions of Section 15 of the Act.
(b) Explanation under Section 15 of the Act describes the related persons.
(c) Thus, the value of Supply of Goods or Services shall be on the transaction value (and not the guidance value or ready reckoner value) PROVIDED the recipients of the supply are not related and the price is the sole consideration for supply.
CONCLUSION
(i) As discussed above, certain transactions in respect of residential tenanted premises are exempted from applicability of GST and certain transactions are not.
(ii) The provisions in respect of commercial tenanted premises need careful application of mind considering the facts and circumstances of the transaction to conclude if GST is applicable on the same or not.
(iii) Lastly, GST is applicable on the transaction value mentioned in the instrument and not on the guidance value unless the parties are related persons.
[1] vide Circular No. 44/18/2018-CGST dated 02-05-2018
[2] read with Circular No. 44/18/2018 – CGST dated 2nd May, 2018; Notification Nos. 04 and 05 of 2022 CT (Rate) dated 13th July, 2022; and Notification No. 15/2022 CT (Rate)
[3] as observed by the Authority for advance ruling in KAR ADRG 25/2023 dated 13-07-2023
[4] Ref: Section 2(94), Section 22 to 25 of the Act
[5] as also observed and held by The Authority for Advance Ruling, GST in the case of Srisai Luxurious Stay LLP (No. KAR.ADRG 25/2023 dated 13th July 2023)
[6] Sub-sections (a) and (b) of Section 17 of the Act are almost similar to the definition of “business” under Delhi Sales Tax Act, 1975
[7] WP (C) No. 4717/2011 & CM No. 9555/2011
[8] under KAR ADRG 09/2022 dated 14-03-2022
[9] M/s. Pankaj Enterprises
THE VIEWS OF THE AUTHOR UNDER THIS ARTICLE ARE PERSONAL AND ARE NOT IN THE FORM OF AN OPINION
by LFIAdmin | Aug 29, 2023 | Uncategorized
By Dhruti Kapadia, Counsel, Solicitor, AOR and Certified Mediator
kapadiadhruti@gmail.com| Aug 30, 2023
INTRODUCTION
Mediators while mediating often encounter racial, cultural and other forms of diversity in their mediating sessions. The essential key points which one must understand, especially mediators, is that during their mediating sessions, they must keep in mind the identity of the parties involved and from which cultural backgrounds they come from.
Human beings tend to evolve based on culture around them and the same is a complex subject to understand and explicate. Culture itself is interconnected with the psychology and personality of an individual. There often are certain cultural differences between the parties involved in mediation sessions which lead to unfavourable results. It is vital for mediators to accept such challenges and inculcate additional skills to assist the parties involved to reach a point where they can freely express themselves, for which a mediator must understand the values and beliefs of the parties involved.
IMPORTANT INGREDIENTS OF A SUCCESSFUL MEDIATION
(A) Sense of awareness
It is important to understand that mediation can never be culture free. It is essential that at the inception of the mediation session, the background, cultural beliefs, values and the mind-set of both the parties should be studied and analysed by the mediator based on which relevant and essential strategies should be made for the mediation sessions. What would and would not be a relevant and appropriate question to ask the parties is to be pre-determined by the mediator as both parties are under the influence of culture, which plays a sociological role in their mind.
(B) Communication Styles
Communication style as a whole would imply an express verbal and non-verbal behaviour flowed out during the sessions of mediation. There are sometimes certain difficulties in direct communication due to the cross culture language barrier. It, thus, becomes essential to cut the gap out and to bring the parties closer by having them understand what the other side is stating. For this purpose, it would be necessary for the mediator to either be a good interpreter or bring one along with him/her, or to have an additional facilitator who would be able to communicate directly with the parties. This would ensure smooth communication between all parties during the sessions of mediation. Unless there is free, fearless and open communication between all parties, the mediation usually fails.
Another core issue having paramount importance which arises during mediation and is expected while conducting mediation sessions is that of parties apologizing to each other. Irrespective of the country or region the parties belong to or how they have been cultured, tendering a heartfelt apology will repair certain grievances faced by either party and will made the mediation session more constructive. The important element of an apology is how sincere the party is with their apology and with the same sincerity, how can the apology be delivered in a most cultured way and in a way that the other party would really feel that the apologizing party has admitted, regretted and has guilted up for the wrong they have committed. In some cases, tendering an apology also satisfies the ego of the other party. The party being apologized to must feel the genuineness of the apology tendered. The very first step is to acknowledge the mistake, to accept it and to express remorse for it, which only requires words like “I am sorry for…..” or “I apologise for…..”.
It is imperative to note how an apology is made. The worst way in which one could ever apologise is by tendering an apology in an impersonal way, without any affection and by just putting an email to apologise. This usually does not work.
In global disputes, different countries and the citizens thereof have their own method and practice on how an apology is made and how it is accepted. These concepts must be borne in mind and practicing mediators must conduct their mediation sessions for resolving disputes after understanding such differences so that neither party gets offended. Both parties must attempt to understand how the entire session is conducted and must bear in mind the traditions and the cultures they belong to and also how they would be expecting each other’s apology. All parties should also bear in mind that no mediation really succeeds without tendering an apology and that the same plays an important role in the success of a mediation session.
CONCLUSION
Apology, in short, is a moral process because it touches the core existence of what is right and wrong and it further confirms that a norm of right behaviour has been broken which is why an apology is necessitated. It is morally and moreover culturally engraved that the person who tenders his apology also then exposes himself to consequences of his wrongful act.
Culture cannot be separated from a mediation session at any point of time because it is deeply and psychologically engraved in every human mind. The social impact and encouragement of maintaining relationships could be a useful and the conclusive point of any mediation session as, in the end if the disputes between the parties get resolved, then every party walks home a winner.
by LFIAdmin | Jun 25, 2021 | Uncategorized
By Raagini Raghu
16jgls-rraghu@jgu.edu.in | June 25, 2021
Can the Maternity Benefit Act and Transgender Persons (Protection of Rights) Act be interpreted harmoniously to provide maternity benefit to transgender pers?
The Maternity Benefit Act, 1961 ensures that women in the workforce are given a paid maternity leave for a certain period before and after child birth. This is an important piece of legislation which safeguards and accounts for the primary care giving role women have in society in the dual life they lead. Women are involved in reproductive labour in the private sphere and productive labour in the public sphere. However, it is often argued that the role a mother plays in the life of a child is not limited a female woman. It can be fulfilled by any person irrespective of their sexual orientation. This would require the definition of woman in the Maternity Benefit Act to be interpreted broadly to include individuals of different sexual orientations. Transgender people have the right to have a child as well and the Maternity Benefit Act is silent on whether the legislation would apply to all genders across the spectrum. The newly introduced Transgender Persons (Protection of Rights) Act, 2019 prohibits people and establishments from discriminating against a transgender person and imposes an obligation on employers and establishments to not discriminate against transgenders in any matter relating to employment.
The ILO Constitution is enshrined with principles of equality and non discrimination. The most relevant international labour law standard is the ILO Discrimination (Employment and Occupation) Convention, 1958 (No. 111). India ratified this convention on 3 June, 1960. The ILO Convention 111 defines “discrimination” as “any distinction, exclusion or preference made on the basis of sex, religion, political opinion, national extraction or social origin, which has the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation” and “other distinctions, exclusions or preference which has the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation.” The ILO Convention 111 not only prohibits discrimination but also requires national policy to undertake a “proactive and positive approach” towards equality of opportunity and treatment in employment and occupation.
International human rights standards have condemned discrimination based on sexual orientation. The discrimination of a person on the grounds of sexual orientation was recognised as a human right violation in Toonen v Australia where ‘sex’ was interpreted to include “sexual orientation”. In 2011 the UN Human Rights Council expressed their “grave concern at acts of violence and discrimination against individuals because of their sexual orientation and gender identity”. The Yogyakarta Principles are internationally recognised human rights standards related to sexual orientation and gender identity. The principles seek to ensure equality for all irrespective of sexual orientation and gender identity and have been followed by Indian courts. This puts an obligation on individual states to protect individuals from discrimination based on sexual orientation.
The Maternity Benefit Act safeguards the interests of women who enter the public sphere of organised labour. There are two kinds of labour, productive and reproductive labour. The latter is said to be limited to women in their households while the former is said to be more fruitful and ‘transformative’. The Maternity Benefit Act dispels this myth by allowing women to enter the workforce and ensure that they fulfil their primary care giving role while engaging in gainful employment. It allows women to undertake a dual role. This special protection given to women must not be limited to only women. Instead, the Maternity Benefit Act must be gender neutral. The legislation is inefficient if it identifies any one sex who can be involved in care giving labour. In his judgement in Mini TK v Senior Divisional Manager, LIC, Kozhikode Justice A Muhamed Mustaque has elucidated the crucial role of a mother in the upbringing of her child especially in the child’s formative years. He likens a woman to a goddess in a family which is the backbone of society. At the same time the judgment highlights that “motherhood has become a contentious issue in the modern society” because economic and competing market interests override “the notions of culture and social justice like gender equity.” Mini TK had taken extra leave to take care of her autistic child, the court reversed her employers decision to dismiss her from service for taking maternity leave above the maximum period available due to her “compelling circumstance”. Her compelling circumstance was her duty towards her autistic child who needed extra care. The court stated that an employer had an obligation to “protect her personhood as a mother”. It was held that, “motherhood is not an excuse in employment but a right which demands protection in the given circumstances.” The court looked at the unique situation of women from the perspective of fundamental rights and abided by international human rights commitments. International conventions like the UDHR, ICESCR, ICCPR, CEDAW are to be followed when States do not explicitly denounce their obligations to use as a guidance to interpret fundamental rights. The court noted constitutional principles must be interpreted in purview of the dynamic nature of society. Women were no longer confined to the private sphere but had the right to enter the public sphere for gainful employment while fulfilling their duty as a mother towards their child. Therefore, women were not be discriminated against men in matters of employment and their fundamental right to motherhood was to be protected and upheld.
The courts have interpreted the Maternity Benefit Act liberally to provide maternity benefit to a commissioning mother in a surrogacy arrangement. In Rama Pandey v Union of India the court used the “updating principle” to account for new ways to procreate with advances in science. The other principle used was the “dynamic process of enactment”. Justice Rajiv Shakdher has cited Bennion on Statutory Interpretation, 5th Edition and stated that while it is the duty of judges to give effect to the will of the Parliament, they are not to interpret the statute mechanically, instead judges refine and polish the legislation. The updating principle was used to conclude that even a commissioning mother is entitled to maternity benefit as she is the principle care giver of the child. The commissioning mother was not denied maternity benefit because she did not carry the child. At the same time, except for government civil servants, there is no labour law that provides paternity leave. Government civil servants are given paternity leave for fifteen days before the expected date of delivery or upto six months after the birth of the child. During paternity leave the employee is paid leave salary at the rate immediately preceding the leave period. Although the judgment in Pooja Jignesh Doshi v State of Maharashtra stated that the commissioning father is entitled to paternity leave in a surrogacy arrangement it was not elucidated further. Even while using an “updating principle” the Indian courts have limited motherhood to a female and a family is limited to a unit with heterosexual parents.
In KS Puttaswamy v Union of India the Supreme Court held that procreation and sexual orientation are inherent to the dignity of an individual which requires constitutional protection. The Indian Constitution guarantees equality and traditionally courts have held that women should not be discriminated against men in matters of employment. However, the gender equity upheld by courts have so far been limited to the gender binary of ‘men’ and ‘women’. Since national policy must be in tune with international convention such as the ILO Convention 111 and also in line with international human rights standards laid down by the UN OHRC and Yogyakarta Principles, Indian legislation and judgements must reflect inclusivity of transgenders. Transgenders have the right to choose a gender of their choice. They also have the right to motherhood. The Maternity Benefit Act must be interpreted broadly so as to extend maternity benefits to transgenders who also have the right to motherhood and gainful employment.
The Transgender Persons (Protection of Rights) Act, 2019 aims to protect the rights of transgender persons and ensure their welfare. By way of Section 9, it has introduced a provision for non discrimination in any matter relating to employment by an establishment. A transgender man can give birth naturally. Some transition in order to give birth. A transgender individual can also adopt or have a baby via a surrogate. In line with the decision in KS Puttaswamy transgender individuals have the right to a family, marriage, procreation and sexual orientation. It is related to the inherent dignity of an individual which the Indian Constitution protects under Article 21. At the outset, the Maternity Benefit Act provides paid maternity leave and aims to achieve social justice by accounting for reproductive labour. Courts can use dynamic interpretation to “update the construction of an enactment” to account for changes that have occurred since the original enactment of the statute. Social conditions have previously persuaded courts to apply the updating principle and while doing so the original principles which were envisaged by the wording are followed. If Motherhood is possible with a surrogacy arrangement and adoptive parents are akin to a commissioning parents, there is no reason why it should be denied to transgenders. Therefore, the Act must protect the interest of transgender individuals as well. In light of the new Transgender Persons (Protection of Rights) Act which explicitly prohibits discrimination in matters of employment, maternity benefit must apply to transgender individuals as well.
Section 9 of the Transgender Persons (Protection of Rights) Act is not exhaustive, it prohibits discrimination of transgenders in ‘any matter relating to employment’. In Municipal Corporation of Delhi v Female Workers (Muster Role) maternity benefit was extended to all employees including daily wage employees whose names were not on the muster roll as “social justice demands the removal of socio economic inequalities”. Since maternity benefit would improve the working conditions of the workers it is a matter relating to employment. The sexual orientation of an individual is not pertinent to whether he or she is given maternity benefits. If a transgender individual and a woman seek maternity benefit from their employer and only the woman is given maternity benefit there could be only one reason for the difference in outcome. The employer has discriminated against the transgender employee on the basis of sex. This is because if an employer discriminates an employee for being transgender then that individual is being discriminated for being a man or a woman which is a discrimination based on sex. In Bostock v Clayton County, Georgia sexual orientation discrimination which led to the firing of a transgender employee for being transgender was considered to be an unlawful discrimination. The Indian Constitution and ILO Constitution guarantees equality before the law and also explicitly states that individuals cannot be discriminated on the basis of sex. Therefore, denial of maternity benefit to a transgender individual based on their sexual orientation is an unlawful discrimination.
It is important to support transgender individuals so that they can discharge their duties to their fullest potential in their workplace. They would benefit from an inclusion of a provision in the Maternity Benefit Act for giving maternity benefit to transgenders since they belong to a vulnerable class of society and require special protection. In National Legal Services Authority v Union of India the Supreme Court emphasised the need for legal protection of transgender persons in education, employment, healthcare, state activity such that they enjoy the same benefits as any other citizen of this country. Often the payment of maternity benefit causes a strain on the employee which is why the ILO has also suggested a ‘model of social insurance’ to guarantee maternity benefit to employees in a workplace. The amount paid as social insurance is the amount which would have been paid if the leave was not taken. Social insurance is usually funded by the employer or workers or both and with government subsidy. This model has been implemented in the Employees State Insurance Act, 1948, however, it is limited to certain establishments. If this scheme is made more prevalent maternity benefits would become more accessible to individuals despite their sexual orientation as opposed to the current scenario where the employer pays the entire amount. It will also prevent employers from discriminating against individuals based on their sexual orientation at the time of hiring by not employing those who would seek maternity benefits.
In conclusion, the right to motherhood is not limited to a female woman for which the Maternity Benefit Act must be interpreted from the purview of the Constitution of India, ILO Convention 111 and international human rights standards. Transgenders should not be discriminated against based on their sexual orientation and deprived of maternity benefits. The dynamic interpretation of the Maternity Benefit Act when read along with the Transgender Persons (Protection of Rights) Act would prevent discrimination against transgenders in a workplace and provide them maternity benefits. Transgenders have a right to improved working conditions which will help them reach their fullest potential at work. This includes maternity benefit. Dynamic interpretation will help include within the purview of the Maternity Benefit Act a transgender individuals ability to give birth naturally or commission a surrogate or adopt and even expand the definition of family unit beyond heterosexual parents and children. Law needs to evolve with an evolving society and the introduction of the Transgender Persons (Protection of Rights) Act warrants the inclusion of right of transgenders to motherhood and maternity benefit under the Maternity Benefit Act.
by LFIAdmin | Jun 8, 2021 | Uncategorized
By Nazaqat Lal, Advocate & Solicitor, Bombay High Court
nazaqat_lal@hotmail.com | June 08, 2021
Family arrangements have long been recognised by the law and are increasingly being used in estate planning. Recently, an amendment to the Maharashtra Co-operative Societies Act, 1960 [1] included a family arrangement executed by persons entitled to inherit the property of a deceased member, as one of the documents on the basis of which, a society would transfer the right, title and interest of the deceased member in such flat.
The first question that falls for consideration is what is meant by ‘family’ for the purpose of family arrangements and consequently, who can be party to a family arrangement? In Kale & Ors. vs. Deputy Director of Consolidation & Ors. [2], a landmark judgment on family arrangements, these questions were answered by the Supreme Court of India as under.
“9. …That is why the term “family” has to be understood in a wider sense so as to include within it fold not only close relations or legal heirs but even those persons who may have some sort of antecedent title, a semblance of a claim or even if they have a spes successionis so that future disputes are sealed for ever and the family instead of fighting claims inter se and wasting time, money and energy on such fruitless or futile litigation is able to devote its attention to more constructive work in the larger interest of the country.
….
10. (5) The members who may be parties to the family arrangement must have some antecedent title, claim or interest even a possible claim in the property which is acknowledged by the parties to the settlement. Even if one of the parties to the settlement has no title but under the arrangement the other party relinquishes all its claims or titles in favour of such a person and acknowledges him to be the sole owner, then the antecedent title must be assumed and the family arrangement will be upheld and the courts will find no difficulty in giving assent to the same;”
The next question is the manner in which a family arrangement is to be made. A family arrangement may be made orally or in writing [3]. If made orally, the issue of registration does not arise. However, if made in writing, does it need to be registered? In Kale (supra), the Supreme Court drew a distinction between an instrument effecting, creating, or making a family arrangement and a family arrangement that was executed afterwards as a mere record of a past transaction. It held that in case of the latter, registration would not be required as such memorandum itself does not create or extinguish any rights in immovable property and therefore, would not fall within the scope of Section 17(2) of the Registration Act, 1908.
The dictum in Kale (supra) was followed by the Supreme Court in its recent judgment of Ravinder Kaur Grewal & Ors. Versus Manjit Kaur & Ors. [4] Some brief and relevant facts are as follows. A family arrangement was orally entered into in 1970. This was acted upon by the parties. Thereafter, disputes arose and therefore, it was thought necessary to reduce the terms already settled between the parties, into writing in 1988. This writing was not registered. The core issue before the Supreme Court was whether the document Exhibit P-6 was required to be registered as interest in immovable property worth more than Rs. 100/- was transferred in favour of the plaintiff. The Supreme Court held that such document was merely a memorandum of settlement, and it did not require registration.
While dealing with family arrangements, courts have leaned in favour of upholding a family arrangement and taken a liberal approach towards its execution. This is emphasized in the following paragraphs in Kale (supra).
“9. …Where the courts find that the family arrangement suffers from a legal lacuna or a formal defect the rule of estoppel is pressed into service and is applied to shut out plea of the person who being a party to family arrangement seeks to unsettle a settled dispute and claims to revoke the family arrangement under which he has himself enjoyed some material benefits…
…
38. …Assuming, however, that the said document was compulsorily registrable the courts have generally held that a family arrangement being binding on the parties to it would operate as an estoppel by preventing the parties after having taken advantage under the arrangement to resile from the same or try to revoke it…”
From the aforesaid, it becomes clear that when by virtue of a family arrangement, members of a family descending from a common ancestor or a near relation seek to bury their differences or avoid future disputes to maintain harmony in the family, such an arrangement ought to be governed by a special equity peculiar to them and would be enforced if honestly made.
[1] Section 154B-13 inserted by the Maharashtra Co-operative Societies (Amendment) Ordinance, 2019
[2] (1976) 3 SCC 119
[3] Ibid.[(Para 10(3) read with Para 10(4)]
[4] Judgment dated 31st July, 2020 in Civil Appeal No. 7764 of 2014
by LFIAdmin | May 24, 2021 | Uncategorized
By Esha Malik, Advocate
eshamalik322@gmail.com | May 24, 2021
In a recent judgement in Uttar Pradesh Power Transmission Corporation Limited v/s. CG Power and Industrial Solutions Limited, the Apex Court held that availability of an alternate remedy does not bar the jurisdiction of a High Court in entertaining a Writ Petition under Article 226 of the Constitution of India.
The Apex Court, in a Special Leave Petition filed under Article 136 of the Constitution of India by Uttar Pradesh Power Transmission Corporation Limited (“UPPTCL”), was dealing with the final order and judgement (“Impugned Order”) passed by the High Court at Allahabad (Lucknow Bench) allowing the Writ Petition filed by CG Power and Industrial Solutions Limited, inter alia, seeking directions to set aside two letter dated 2nd September, 2016 and 29th December, 2018 respectively issued by Executive Engineer, Unnao UPPTCL arising under the Framework Agreement executed between UPPTCL and M/s. CG Power and Industrial Solutions Limited for construction of 765/400 KV substations at Unnao, Uttar Pradesh. Both these two letter above sought directions to CG Power and Industrial Solutions Limited to remit labour Cess amounting to Rs. 2,60,68,814/-, computed at 1% interest of the Contract value under sections 3 (1) and 3 (2) of the Building and Other Construction Workers Welfare Cess Act, 1996 (“Cess Act”) r/w Rule 3 and Rule 4 (1), (2), (3) and (4) of the Building and Other Construction Workers Welfare Cess Rules, 1998 (“Cess Rules”).
The Hon’ble High Court vide the Impugned Order set aside the above two letters sent by UPPTCL to M/s. CG Power and Industrial Solutions Limited demanding outstanding labour Cess amounting to Rs. 2,60,68,814/- computed at the rate of 1% of the contract value as being unsustainable in law and further held that Cess could only be recovered in the manner stipulated in the Cess Act and the Rules made thereunder.
It is pertinent to note that although under the General Conditions of Contract, there contained an Arbitration Clause, the Apex Court held that it is well settled now by several judgements passed by this Court that existence of an Arbitration Clause does not debar the Court from entertaining a Writ Petition. It further held that availability of an alternate remedy does not prohibit the Court from entertaining a Writ Petition in an appropriate case particularly (i) when Writ Petition seeks enforcement of fundamental rights, (ii) where there is failure of principles of natural justice or (iii) where the impugned orders or proceedings are wholly without jurisdiction and (iv) the vires of the Act is under challenge.
It further made reference to the judgement of Harbansal Sahnia and Ors., v/s. Indian Oil Corporation Limited reported in (2003) 2 SCC 107, wherein this Court allowed the Appeal from an Order of High Court dismissing the Writ Petition and setting aside the impugned Order of High Court and Indian Oil Corporation terminating the dealership of the Harbansal Sahnia, notwithstanding the fact that the dealership Agreement contained an Arbitration Clause.
In the end, the Apex Court confirmed the Impugned Order passed by the Hon’ble Court at Allahabad, Lucknow bench and dismissed the SLP holding that UPPTCL acted in excess of its power by its acts impugned, when there was admittedly no assessment or levy of cess under the Cess Act and also further adding that “it is now well settled by a plethora of decisions of this Court that relief under Article 226 of the Constitution of India may be granted in a case arising out of contract. However, writ jurisdiction under Article 226, being discretionary, the High Courts usually refrain from entertaining a writ petition which involves adjudication of disputed questions of fact which may require analysis of evidence of witnesses. Monetary relief can also be granted in a writ petition”.
by LFIAdmin | May 20, 2021 | Uncategorized
By Milisha K. Shah, B.Com, Final CA Student,
milisha82@gmail.com | May 20, 2021
Exemptions under Income from Capital Gains under the Income Tax Act, 1961.
The following exemptions available under the head of income “Income from Capital Gains” can be used for the purpose of Tax Planning, well within the scope of the Act and without any misuse of the provisions of the Income Tax Act, 1961: –
1. Sec. 54: Exemption for Residential House Property.
(a) Eligible Assessee: Individual/Hindu Undivided Family (HUF) only.
(b) Asset to be transferred: Residential House Property (should be a Long Term Capital Gain (LTCG).
(c) Asset to be acquired: One Residential House Property in India. If the LTCG is up to Rs. 2 Crore, two Residential House Properties can be acquired.
(d) Time Limit: The Residential House Property must be purchased within 1 year before or within 2 years after the date of transfer, or constructed within 3 years after the date of transfer.
(e) Capital Gain Account Scheme (CGAS)/Deposit Scheme: The Assessee (Individual/HUF) should either acquire house property or deposit desired amount in CGAS up to the due date of filing the return. The amount deposited should be utilized for the purpose of residential House Property only. If the deposited amount is misused, then the exemption claimed earlier shall be withdrawn.
(f) Amount of Exemption: Long Term Capital Gain; or Cost of new assets/Deposit Amount, whichever is lower.
(g) Lock-in-period: The new residential house property should not be transferred within 3 years from the date of its acquisition. If it is transferred, the exemption claimed earlier shall be withdrawn and it has to be reduced from the Cost of Acquisition (COA) of the new house property, i.e. the reduced cost system is followed u/s. 54 of the Income Tax Act, 1961.
2. Sec. 54B: Exemption for Urban Agricultural Land:
(a) Eligible Assessee: Individual/HUF only.
(b) Asset to be transferred: Urban Agricultural Land which was used by the Assessee or his/her parents for a period of 2 years immediately before the date of transfer took place (can be Short Term Capital Gain (STCG) or LTCG).
(c) Asset to be acquired: Urban/Rural Agricultural Land.
(d) Time Limit: The agricultural land should be purchased within 2 years after the date of transfer.
(e) Capital Gain Account Scheme (CGAS)/Deposit Scheme: The Assessee (Individual/HUF) should either acquire agricultural land or deposit desired amount in CGAS upto the due date of return filing. The amount deposited should be utilized for the purpose of an urban/rural agricultural land only. If the deposited amount is misutilized, the exemption claimed earlier shall be withdrawn.
(f) Lock-in-period: The urban/rural agricultural land should not be transferred within 3 years from the date of its acquisition. If it is transferred, the exemption claimed earlier shall be withdrawn and it has to be reduced from the Cost of Acquisition (COA) of the new house property, i.e. the reduced cost system is followed u/s. 54 of the Income Tax Act, 1961.
(g) Amount of Exemption: Lower of the following: LTCG/STCG; or Cost of new assets/Deposit Amount
3. Sec. 54D: Exemption for Industrial Land and Building:
(a) Eligible Assessee: Any person under the Income Tax Act.
(b) Asset to be transferred: Compulsory acquisition of land or building which was used by the Assessee in the business of industrial undertaking for a period of 2 years immediately prior to the date of transfer (STCG/LTCG).
(c) Asset to be acquired: New land or building for industrial undertaking.
(d) Time Limit: New industrial land or building should be acquired/constructed within 3 years from the receipt of compensation due to the compulsory acquisition.
(e) Capital Gain Account Scheme (CGAS)/Deposit Scheme: The Assessee (Individual/HUF) should either acquire new asset or deposit desired amount in CGAS upto the due date of return filing. The amount deposited should be utilized for the purpose of industrial land or building only. If the deposited amount is misutilized, the exemption claimed earlier shall be withdrawn.
(f) Amount of Exemption: Lower of the following: STCG/LTCG; or Cost of New Assets/Deposit Amount
(g) Lock-in-period: The industrial land or building should not be transferred within 3 years from the date of its acquisition. If it is transferred, the exemption claimed earlier shall be withdrawn and it has to be reduced from the Cost of Acquisition (COA) of the new house property, i.e. the reduced cost system is followed u/s. 54 of the Income Tax Act, 1961.
4. Sec. 54EC: Exemption for immovable property:
(a) Eligible Assessee: Any person.
(b) Asset to be transferred: Land or Building or both (LTCG only).
(c) Asset to be acquired: Bonds redeemable after 5 years, issued by:
(i) National Highway Authority of India (NHAI); or
(ii) Rural Electrification Corporation Limited (RECL); or
(iii) Power Finance Corporation Limited (PFCL); or
(iv) Indian Railway Finance Corporation Limited (IRFCL).
(d) Time Limit: The above mentioned bonds should be acquired within 6 months from the date of transfer.
(e) CGAS: Not Applicable
(f) Amount of Exemption: Lower of the following: LTCG; or Cost of New Assets
Maximum exemption limit is Rs.50,00,000 for bonds acquired within prescribed time limit.
(g) Lock-in-period: New Assets should not be transferred/converted into money within 5 years from the date of its acquisition. If it is transferred/converted into money within 5 years, then the exemption claimed earlier shall be withdrawn and treated as LTCG in the year in which bonds are transferred/converted into money i.e. full cost system is followed u/s. 54 EC of Income Tax Act, 1961.
5. Sec. 54F: Exemption for Any Long Term Capital Asset (LTCA) (other than residential house property)
(a) Eligible Assessee: Individual/HUF
(b) Asset to be transferred: any LTCA (except residential house property)
(c) Asset to be acquired: One Residential House Property in India.
(d) Time Limit: One residential house property should be purchased within 1 year before or 2 years after the date of transfer or constructed within 3 years after the date of transfer.
(e) Capital Gain Account Scheme (CGAS)/Deposit Scheme: The Assessee (Individual/HUF) should either acquire house property or deposit desired amount in CGAS up to the due date of return filing. The amount deposited should be utilized for the purpose of residential House Property only. If the deposited amount is misutilized, the exemption claimed earlier shall be withdrawn.
(f) Amount of Exemption: (i) if net consideration is fully utilized then capital gain is fully exempt; (ii) if net consideration is partly utilized then capital gain is partly exempt as per the following formula:-
(g) Lock-in-period: New Asset should not be transferred within 3 years from the date of purchase/construction. If it is transferred then exemption claimed earlier shall be withdrawn and treated as LTCG in the year in which new house property is transferred.
Additional conditions to be fulfilled for Sec. 54F:
1. On the date of transfer of LTCA, assesse should not own more than one residential house property; and
2. Assessee should not purchase another house within 2 years or construct within 3 years after the date of transfer.
If the above conditions are not satisfied then exempt capital gain shall be treated as LTCG in the year in which such violation is done.
6. Sec. 54G: Exemption for Land/Building/Plant/Machinery while industry transfer from Urban Area to Rural Area:
(a) Eligible Assessee: Any person.
(b) Transferred Asset: Land/Building/Plant/Machinery (except furniture) in urban area of an industrial undertaking (LTCG and STCG).
(c) Asset to be acquired: New Land/Building/Plant/Machinery (except furniture) in rural area and shifting expenses.
(d) Time Limit: New asset should be acquired within 1 year before the date of transfer or 3 years after the date of transfer.
(e) Capital Gain Account Scheme (CGAS)/Deposit Scheme: The Assessee should acquire the above mentioned assets only or deposit such amount up to the due date of return filing. If it is misutilized, the exemption claimed earlier shall be withdrawn.
(f) Amount of Exemption: Lower of the following: LTCG/STCG; or Cost of new assets/Deposit Amount
(g) Lock-in-period: The new assets should not be transferred within 3 years from the date of its acquisition. If it is transferred, the exemption claimed earlier shall be withdrawn and it has to be reduced from the Cost of Acquisition (COA) of the new house property, i.e. the reduced cost system is followed u/s. 54 of the Income Tax Act, 1961.
7. Sec. 54GA: Exemption for Land/Building/Plant/Machinery while industry transfer from Urban Area to Special Economic Zone (SEZ).
All the points are the same as Sec. 54G (above). The only difference between Sec. 54 G and sec. 54 GA. u/s. 54GA, U/s. 54 G, Plant and machinery acquired in rural area should be new.
U/s. 54GA, Plant and machinery acquired in SEZ may be new or second hand.
8. Sec. 54GB: Exemption for Residential Property or Plot of Land:
(a) Eligible Assessee: Individual/HUF
(b) Transferred Asset: Residential House Property/Residential Plot of Land (LTCG).
(c) Asset to be acquired: Assessee should acquire equity shares of a “new eligible startup company” {defined u/s. 54GB(6)} upto the due date of return filing and company should acquire new plant and machinery {defined u/s. 54GB (6)(d)} within 1 year from the date of subscription of shares.
(d) CGAS:
(i) For Assessee: Not Applicable;
(ii) For eligible startup company: Company should acquire new plant and machinery or deposit desired amount in CGAS upto the due date of return filing of Assesse.
(e) Amount of Exemption:
(i) If net consideration is fully utilized, the capital gain is fully exempt.
(ii) If net consideration is partly utilized, the capital gain is partly exempt as per the following formula.
(f) Lock-in-period: If the equity shares or new plant and machinery are transferred within 5 years from the date of subscription/acquisition, then exempt capital gains taxable in the previous year of transfer of equity share by Assessee or new plant and machinery by company in the hands of eligible assesse as LTCG.
In case of a technology-driven start-up, the lock-in-period for Computer and Computer Software is 3 years and not 5 years.
The idea behind allowing these deductions is that the tax on capital gains tends to erode a substantial amount from the assessee’s income. However, an assessee has the right to plan its affairs in such a manner that may result in as minimum tax as possible. Hence, these deductions in respect of the investments made into a new capital asset, if strategically done, reduces the tax liability of the Assessee.
by LFIAdmin | May 11, 2021 | Uncategorized
By Amrutha Bawgi and co-authored by Thanmai Sree, Presidency University, Bangalore
amruthabawgi@gmail.com, thatha.thanmai@gmail.com| May 11, 2021
ABSTRACT
It is a known fact that India is a country rich in culture and history. We also know that India has been embracing western culture in recent years, whether in science, technology, education, politics, or even marriage. In India, the term “live-in relationship” has become something of a trend. Two people who live together without being married and who do not share the same obligations as a married couple. However, many people regard this as a taboo that offends Indian culture. This article discusses whether such relationships are against Indian culture and whether they are legal.
Introduction
India is a country with different religions and cultures. Different part of the country has a different culture. Indians are very conservative they abide by the rules of their Gods which again differ based on religion. In India especially Hindus treat marriage as sacramental bonding between two people. The concept of husband, wife and family is still given utmost importance in many communities of the country. Cohabitation had been a taboo since British rule.
These days younger generations are following this western culture called live-in relationship which means basically a relationship in which a man and a woman mutually decide to live together under one roof without getting married to each other. This is a common concept I western culture which is being adopted by Indians these days.
Younger generations or few set of people in the country have a really good opinion on these relationships. They believe that live relationships help them to check their compatibility before marriage. To test whether they really can stay together or whether they can adjust to their partner’s requirement. Live-in-relationship is a de facto union in which couple shares common bedroom without solemnizing marriage. It is to determine whether they could live with each other for their entire lives. And these people believe is that it does not involve families as to the way related to families in marriage. If the couple decide not to live together anymore then they mutually break up without really involving the families.
But again, there is large percent of population in the country which believes that live-in relationships are against Indian culture. Because in India especially, the Hindu religion prefers ‘One man, one wife’ as the most sacred form of matrimony. Indian believe that people should use traditional way of knowing each other that is arrange marriage, dating, texting, meeting up frequently to get to each other. But not to the cross the line drawn by the society in terms of marriage and sex [1]. Marriage is sacred bonding between a couple who have taken the marriage vows to be with each other no matter whatever happens and seek the blessings of elders. Because in the case of live-in relationship if the girl gets pregnant and they decide to break up it will lead to humiliation and troubles to the girl.
Generally, in India men do not want to marry a girl who is pregnant before marriage in most cases this will lead to abortion which is again illegal. Indians try to pretend like Western people but 90% of the men are obsessed with “virginity”, they fail to think beyond that. They will easily tag a non-virgin girl as bad, because she has crossed her limit to go and live-in with a guy who wasn’t her husband. Marriage is socially and morally binding on couples so they think twice before filing divorce, but live-in relationships may or may not work.
Difference between live-in relationship and marriage
The main difference between live-in relationship and marriage is the matrimony or the wedlock, a recognized action in which both parties create a union or sign contracts which establishes certain rights and obligations. Whereas live-in relationship nature of marriage where both partners enjoy individual freedom and live in a shared household without being married to each other [2]. It involves continuous cohabitation between the parties without any responsibilities or obligations towards one another. There is no law tying them together and consequently either of the partners can walk out of the relationship, as and when, they will do so [3].
Legality of live-in relationship in India
Indian judiciary have never clearly showed whether these relationships are legal or not but neither did it deny. It focused giving justice to the parties. It decides cases depending on the circumstances and social morals.
But in these recent years there have been few landmark judgments by the judiciary which deals with live-in relationship and in some circumstances considers it as a legal relationship. In Payal Katara v. Superintendent Nari Niketan Kandri Vihar Agra and Others [4] the high court of Allahabad ruled out that a lady of about 21 years of age being a major, has right to go anywhere and that anyone, man and woman even without getting married can live together if they wish. In Patel and others case the apex court observed that live- in –relationship between two adults without formal marriage cannot be construed as an offence.
Also, the judiciary recognized the child out of these relationships legitimate if they are together for a very long time. This was decided in the case of In Radhika v. State of M.P. [5] the apex court observed that a man and woman are involved in live-in-relationship for a long period, they will be treated as a married couple and their child would be called legitimate [6].
Maintenance of Women
The Right of maintenance is granted in all the personal laws i.e., Hindu law, Muslim Law, Christianity, or Zoroastrianism. However, these rights are only applicable for a married woman i.e., the wife. None of these regions consider a live-in relationship as a marriage. Instead, if a woman lives with a man without marring that women is considered as an unchaste. But this is not the situation of the judicial system, the judicial system has made a remedy available for woman in such situations under Section 125 of the Crpc [7]. In the beginning a woman who was in a live-in relationship was not considered as a wife and was not allowed to use this provision, later on, Malimath committee report and the 8th Law commission recommended to include woman are in a live-in relationship within the purview of Section 125. In Abhijit Bhikaseth Auti v. State of Maharashtra and Others [8] the supreme court accepted this principle and asserted that marriage in a strict form need not be shown to claim maintenance under section 125 of the CrPC. Women can also seek for additional maintenance under any other law as per section 20(1) of the Protection of Women from Domestic Violence Act [9].
Maintenance of Children
The maintenance of the child born from the parents who are in a live-in relationship is also considered equally as of how a child is born out of martial relations according to the judiciary. According to Hindu law the father has to maintain the child, whereas according to Muslim law the father has no such obligation. But section 125 of the CrPC provides a legal right to children to claim for maintenance even if the personal laws do not consider them as a legitimate child.
Section 21 of Hindu Adoption Act, 1956 says that a son whether legitimate or illegitimate till the time he is minor and so long the daughter is unmarried she shall be entitled to maintenance by his/her father or from his estate of his/her deceased father. And if there is any denial of maintenance rights to children who are born out of live-in relationship it could be challenged in the court for their rights under Article 21 [10]. This decision was upheld in the Kerala High court.
In case of the woman and man separating from a live-in relation and they have a child, then the custody of the child will be decided by the court on the bases of the facts and circumstances. This was decided in the case of Gita Hariharan v. RBI [11].
Domestic Violence Act, 2005
The domestic violence Act was enforced in 2005 as an attempt to protect women from physical, mental, verbal, and economic abuse in marital relationships. In the beginning this act was only applied to the married couple according to Section 2(f) of the DV Act. Later on, the supreme court noticed the fact that the definition also includes that this not only applies to married couple but also to a ‘relationship in the nature of marriage’.
According to Section 2(f) of the Act the term “domestic relationship” means a relationship between two persons who live or have, at any point of time, lived together in a shared household, when they are related by consanguinity, marriage, or through a relationship in the nature of marriage, adoption or are family members living together as a joint family [12]. Many courts have tried to interpret the term ‘a relationship in the nature of marriage’. This issue was discussed in length in the case of Indra Sharma v. VK Sharma [13]. In this case the supreme court defined the term marriage and explained how a man and woman is recognised as husband and wife. It further laid down 8 guidelines that are to be followed to decide whether the relationship of the women and man can consider as a relationship in the nature of marriage. This term has been mentioned and explained in many other cases after these 8 guidelines were laid down. Therefore, considering all this even the Supreme Court in a couple of cases has allowed live-in relationships to be covered within the ambit of the law specified.
Conclusion
The Indian culture does not like pre-marital sex; therefore the legislature also cannot promote it, though at times the couple may express their opinions intensively personal and go against it. Thus, the judiciary has to ponder over such controversies and issues and bring a proper rule and amend the act in such a way that the women and the child born out of live-in relationship are protected and are given equal rights like a marital relationship.
[1] https://www.careerride.com/view/live-in-relationships-are-against-indian-culture-9084.aspx
[2] https://www.legallyindia.com/views/blogger/abhay-nevagi-associates?format=feed
[3] https://www.legallyindia.com/views/entry/right-of-maintenance-to-women-in-live-in-relationships
[4] AIR 2001 ALL 254
[5] ILR [2008] MP 58
[6] http://www.legalserviceindia.com/legal/article-2159-present-scenario-of-live-in-relationship-and-its-judicial-findings-an-analysis.html
[7] CrPC 1973
[8] Crl. W.P. No. 2218 of 2017
[9] DV Act, 2005
[10] Indian Constitution Of India
[11] AIR 1999, 2 SCC 228)
[12] Section 2(f), The Protection of women from Domestic Violence Act, 2005.
[13] (2013) 15 SCC 755
Bibliography
• http://www.legalserviceindia.com/legal/article-2159-present-scenario-of-live-in-relationship-and-its-judicial-findings-an-analysis.html
• https://www.legallyindia.com/views/blogger/abhay-nevagi-associates?format=feed
• https://www.legallyindia.com/views/entry/right-of-maintenance-to-women-in-live-in-relationships
• https://www.careerride.com/view/live-in-relationships-are-against-indian-culture-9084.aspx
• http:// Live-in-Relationships: The Indian Perspective, India Law Journal
• Ms. Githa Hariharan & Anr vs Reserve Bank of India & Anr on 17 February 1999 (indiankanoon.org)
• (thebetterindia.com)
• Anuja Agarwal, “Law and Live-in Relationships in India”, Economic & Political Weekly
by LFIAdmin | May 5, 2021 | Uncategorized
By Deobrat.S.Gaur, Student, University Of Petroleum And Energy Studies, Course-Bcom LLB(Hons) Specialization in Taxation Laws
deobrat11gaur@gmail.com | May, 5 2021
The tax incidence and imposition of tax is dependent upon the residential status of a person. Therefore, the identification and classification of the residence of a person is one of the first steps to be carried out in order to proceed with the assessing of income of a person. The rules for determining the residential status of a person is governed by Section 6 of Income-tax Act.
For the purpose of determination of the place of residence of the companies the concept of POEM is been introduced in Finance Bill 2015 which amended the Section 6 of the existing Income Tax Act, 1961, replacing the words stated there control and management by Place of Effective Management.
The condition for determination of residential status of the company will be on:
1) If A the company is Indian company – then it is presumed to be Resident of India
2)The foreign company- then the test of POEM is applied.
Poem is universally recognised test for the purpose of determination of the residential status of the company, which is either incorporated in a foreign Jurisdiction, as per the explanation facilitated in section 6(3) POEM mean, any place where key management and commercial decision that are of quitessential importance taken or decisions which are necessary for the conduction of a business.
Hence, foreign company is considered resident in India if the place where key management and commercial decision that are of quitessential importance taken or decisions which are necessary for the conduction of a business are taken in India. To bring to tax those companies that are incorporated outside India but controlled from India, the condition of POEM has been introduced.
CBDT issued guidelines for determining POEM by way of Circular No 6 of 2017 dated jan 23 2017 states that:-
The foreign company whose turnover is 50 crore or more , its POEM will have to be seen.
For the purpose of determination of POEM, we need to see:
A) ABOI .i.e the test which check whether the company is engaged in an active business outside India or not , and if it satisfied, then POEM is outside India
And
B) Majority of Board meeting Held Outside India:
The ABOI test lays down that, for the purpose of sound determination active business outside India following is to be analyzed:
a) The company’s passive Income is not more than 50% of its total income
b) The 50 % or more of the aggregate assets of the company are situated outside India.
c) The 50 % or more of the total no of Employees employed in the company are situated outside India , or 50% or more are not the resident in India
d) The aggregate or the total pay roll expenses of those employees are less than 50%
Passive Income would mean income generated from the Transaction where Both the sales and Purchase of good is conducted from and enterprise to its related enterprises
Income from Interest, Dividend, Rental Income , Income from Capital Gains etc..
If Aboi i.e all the 4 test laid down and Majority of Board meeting Held outside India, if both are outside India, then the company is outside India, hence a Non Resident.
CASES IN WHICH ABOI is not situated Outside India , – in such scenario The POEM will be determined after analyzing the following.
• To determine the person who is actually responsible in making the key managerial or the commercial decision
• And identification of the place where the decision are taken meaning of the term “Business Connection”.
Section 9 talks about income which is deemed to accrue or Arise in India
A relationship of business of Non- resident with Indian Territory which yields profits or gains to NR, then such income will be deemed to accrue or Arise in India. The connection between the business of NR and India is known as business connection.
Non Resident will have business connection in India if
a) If an agent or any person habitually conclude contract on behalf of Non Resident, or
b) If the agent or the person plays principal role in concluding contract on behalf of Non Resident, or.
c) If the agent or the person maintains stocks and delivers in India on instructions of Non Resident ,or
d) The agent or person habitually secures orders mainly and fully for the Non Resident,
Income from such business connection to the NR will be income deemed to accrue or arise in India, even if it arise outside, Provided the Agent should have dependent status and not the independent status
E.g. if agent has independent status where he is securing order for many Non-Resident and having independent status, then there will be no business connection, hence only if the agent secures orders mainly and fully for the Non Resident,
Explanation 2A attached to section 9(1) states applicable from 1st march 2019, significant economic presence of a particular NR in India then , the NR will have business connection in India, nature of transaction should be such that transaction in respect or good service which includes download of data etc. in respect.
The cases in which the business connection of NR will not be considered to have business connection in India
a) If the agent /person is just purchasing in India and exporting, neither selling, nor concluding any contract in India
b) If the agent or person is just collecting news and views in India , for transmission outside India
c) If the person is NR and also not a citizen he comes to India to shoot cinematographic flim or movie in India
In case of partnership, all the partners, should be Non Resident and not a citizen
In case of company all the shareholders Non Resident and not a citizen
d) If the foreign company is mining diamond outside India, and just displaying raw uncut diamond in India , in the specific zones notified by Indian government in India.
by LFIAdmin | Jun 8, 2021 | Uncategorized
By Manju Hirani,
Hirani Canadian Immigration and Consultancy Solutions Inc,
Canada
hiraniimmigration@hotmail.com, Ph:001(778) 8962567| June 08, 2021
The US News & World Report in its “2021 Best Countries Report” recently announced Canada as the best country in the world.
Canada has a very friendly attitude towards immigrants and it is one of the most popular choices for immigrants from across the world.
Canada is a safe country to live in and raise a family. Canada offers the best combination of urban life with a laid-back rural lifestyle. It is a country where you can get both professional growth as well as work – life balance. Canada offers better quality of life with more earning and more savings.
The underlying principle of Canadian Immigration Law is the belief that skilled workers are the major contributory factor for taking Canada to the path of prosperity. Foreigners with work permits and international students can easily apply for permanent residency after meeting the minimum eligibility requirements.
Skilled workers who can contribute to the Canadian economy are welcomed with open arms. The following are the requirements for immigration of skilled workers:
• Good health
• No criminal history
• Bachelor’s degree in any stream
• Minimum one years’ continuous work experience (more experience will get you extra points)
• Ability to speak, read and write English or French or both languages (language test is mandatory)
• A score of 67 points in Canada’s point based immigration selection system
• One can apply for Permanent Residence (PR) in Canada from India( with skilled work experience of minimum one year)
• If married, spouse and children under 21 years of age can also migrate along with the principal applicant
• Spouse gets right to work
• After three years, can apply for Canadian citizenship
Canada offers plenty of opportunities for those looking to migrate to the country. One can work in Canada as a Skilled Worker under the Temporary Foreign Worker Program and apply for permanent residency through the Express Entry Programs: Federal Skilled Worker, Federal Skilled Trades or Canadian Experience Class.
One can study in Canada and apply for permanent residency through the Canadian Experience Class after meeting the minimum eligibility requirements.
Another way is to immigrate through the Provincial Nominee Programs. Our provinces offer several paths for qualified immigrants looking to make Canada their home.
When you become a permanent resident of Canada, you are entitled to the same rights and privileges as a Canadian citizen except for the right to vote and the right to apply for a Canadian passport , are entitled to equal treatment and equal protection.
There are excellent schemes such as Old Age Security, Guaranteed Income Supplement, and Canada Pension Plan – all three of these programs are designed to provide financial support to workers after they reach retirement age – currently age 65. To be eligible, you have to meet specific residency requirements and to have contributed to the system by paying taxes in Canada.
Medical expenses are covered through the Canadian health care program on payment of nominal amount and in certain cases no amount is payable. These expenses include visits to emergency room, immunizations, yearly exams, etc.
All children under 18 are entitled to a free education in the Canadian Public School System, which provides world class education.
In Canada, working parents are given time off when a new baby is born or adopted. Parents can opt to take leave up to 12 months and split the leave between parents.
Canada is the perfect destination for you and your family to move to. The government of Canada believes that emigration to Canada is a major driving factor of economic growth; it welcomes the diverse traditions, rituals, and customs that immigrants bring into the cultural fabric of this evolving nation.
by LFIAdmin | May 1, 2021 | Uncategorized
By Jineshi Thakar, Advocate
jineshi1010@gmail.com | May 1, 2021
Over the years, whenever laws relating to arbitration have been discussed upon, legal concept of seat of arbitral proceedings and territorial jurisdiction of courts thereto has always been debated at length. The courts have exhaustively scrutinized the concept through its several judgments; In yet another case before the Hon’ble Apex Court, it had to juxtapose the aforesaid legal concepts in the matter of M/S. Inox Renewables Ltd. v. Jayesh Electricals Ltd.
In order to resolve the dispute amongst themselves, the Parties had mutually agreed to change the place of arbitration from Jaipur to Ahmedabad, irrespective of the specific clause as to the same, which was recorded by the Arbitrator in the award. Pursuant thereto, the Arbitrator passed an award in favour of Jayesh Electricals Ltd. Thereafter, M/S. Inox Renewables Ltd. filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996 before the Commercial Court at Ahmedabad and the judgment was passed in favour of Jayesh Electricals Ltd. M/S. Inox Renewables Ltd, thereafter filed a Special Civil Application bearing No. 9536 of 2019, before the Hon’ble Gujarat High Court, against the order of the Commercial Court, Ahmedabad which was dismissed, holding that the courts at Rajasthan would have jurisdiction to the petition under Section 34. Subsequent to the said judgment, M/S. Inox Renewables Ltd filed an appeal before the Hon’ble Supreme Court.
The Supreme Court whilst determining the issue pertaining to the jurisdiction was posed with the following propositions on behalf of Jayesh Electricals Ltd:-
(i) The place of arbitration cannot be changed without a written agreement between the parties;
(ii) The shift in the place of arbitration by mutual consent does not amount to the change in the seat of arbitration and that the same is done under Section 20(3) of The Arbitration and Conciliation Act, 1996; and
(iii) The arbitration clause shall be read independently from that of the clause pertaining to the jurisdiction of the court before which further remedies may be sought.
The Supreme Court disproved the above propositions whilst relying on the judgment of BSG SGS SOMA JV v. NHPC Limited [1] as well as Indus Mobile Distribution Private Limited v. Datawind Innovations Private Limited [3]. The Court observed that since the change in the place of arbitration was recorded with the consent of both the parties and the same remained undisputed by them, a separate agreement isn’t required to record the same. Secondly, the Court opined that the change in the venue of arbitration is by mutual consent and therefore it is as per Section 20(1) of the Arbitration and Conciliation Act, 1996 and not as per Section 20(3) and the same amounts to the seat of arbitration. The court relied on the judgment of BSG SGS SOMA JV [3] which read as under:-
“53. In Indus Mobile Distribution (P) Ltd., after clearing the air on the meaning of Section 20 of the Arbitration Act, 1996, the Court in para 19 (which has already been set out hereinabove) made it clear that the moment a seat is designated by agreement between the parties, it is akin to an exclusive jurisdiction clause, which would then vest the courts at the “seat” with exclusive jurisdiction for purposes of regulating arbitral proceedings arising out of the agreement between the parties.”
Lastly, the Court observed that the entire arbitration clause has to be read as a whole alongwith the clause pertaining to the jurisdiction of the court and further noted that, “the moment the seat is chosen as Ahmedabad, it is akin to an exclusive jurisdiction clause, thereby vesting the courts at Ahmedabad with exclusive jurisdiction to deal with the arbitration.”
The Court through this judgment highlighted distinctly that the venue of arbitral proceeding mutually agreed by the parties amounts to the seat of arbitration and hence the exclusive jurisdiction then vests with the court wherever the seat of arbitration is. The appeal was allowed and it was held by the Supreme Court that the court in Ahmadabad had the jurisdiction to deal with the Section 34 petition.
[1] (2020) 4 SCC 234
[2] (2017) 7 SCC 678
[3] supra
