Saturday, March 14, 2015

COMPANY LAW

Issue of Equity Shares with Differential Rights


The Companies (Share Capital and Debentures) Rules 2014 (“Rules”) comes into force on the date of publication into official gazette. These Rules govern:

(a)      All listed companies
(b)      All private companies
(c)      All unlisted public companies

The Rules however, cannot be in conflict with any other provision in this regard issued by SEBI.

 The equity or ordinary shares do not have voting rights, fixed rate of return and they are not entitled to get capital on winding up before paying up of preference share holder. So, after paying up the dividends to the preference shareholders, equity shareholders are entitled to entire profits. Under the Rules, a company limited by shares may issue equity shares with differential rights (voting and dividends or otherwise) after fulfilment of the following conditions:
  • A clause to that effect in article of association
  • Authorisation by ordinary resolution in general meeting
  • The shares with differential rights cannot exceed 26% of the total post issue paid up capital including equity shares issued with differential rights at any time.
  • Companies should have consistent record for past three years for distributable profits.
  • Preceding three financial years, there should not be defaulted on any financial statements or annual returns.
  • No default in payment of declared dividends to its shareholders
  • No default in redemption of matured preference shares or debentures or deposits that have become due.
  • No default in repayment of term loan of financial institution/scheduled banks/state level financial institutions
  • The company has not been penalised by any court or tribunal for any offence under the following under the following Act:
(i)           RBI Act, 1934
(ii)         SEBI Act, 1992
(iii)       SEBI Contract Regulation Act, 1992
(iv)       FEMA Act, 1999

Conclusion


The issuance of shares with differential voting rights has not been so well used in India so far. Though the mechanism is important to raise the capital but has been misused by promoters to have complete control over the company. Section 86 of the New Companies Act permit issuance of the shares with differential rights subject to Rules. However, shares with differential voting rights can rescue them in the duration of take-overs

This article is contributed by Jyoti Srivastava, Partner Legal Imperials, Head Litigation Desk and the article is only informatory in nature and does not advise for or against the subject to its readers in any manner.

Wednesday, March 11, 2015

NEWS SNIPPETS

MARCH 12, 2015


Supreme Court on Armed Forces Tribunal

The Hon'ble Supreme Court has stated that an appeal against the order passed by the Armed Forces Tribunal cannot lie before the High Court but only before the Supreme Court. The apex court observed that jurisdiction of the AFT was in substitution of civil court and High Court.

Wednesday, February 4, 2015

Laws relating to Domestic Workers


Introduction

The domestic workers are those workers who work for ‘private households’ without clear terms and conditions of an employment which are unregistered in any book and excluded from the scope of labor legislations generally. Domestic workers comprise a significant part of workforce in India and most of them are women but being part of the unorganized sector employment, they are amongst the most vulnerable groups of workers.


The tasks performed by domestic workers are not recognized as ‘work’ in terms of legal definition. The hired domestic workers ease burden of individual households by undertaking household chores in return for ‘remuneration’. The tasks performed include the care of children and the elderly, cooking, driving, cleaning, grocery shopping, running errands and taking care of household pets, particularly in urban areas. Domestic workers in India continue to struggle for visibility and recognition.

Domestic workers are actually part of ‘care economy’ and are rendering services for part which was initially taken-care by women of the house. There is no dedicated law for domestic workers which define the term. However, this class of workers fall under the unorganised sector, so they are mainly governed by the Unorganised Sector Worker Social Security Act, 2008 provides the wage workers to include domestic workers. The definition of wage workers is as follows:

  • A person employed in the domestic sector for remuneration in the unorganised sector[i]


  • The person can be employed as domestic worker by the employer (one or more employer) or by the Contractor.


  •  The remuneration is paid by the domestic worker either in cash or kind.


  • The nature of employment of a domestic worker may be home based/temporary/casual worker/migrant workers/ workers employed in household/domestic workers


  • The monthly wage of wage worker is notified from time to time by the Central Government or State Government


A.       Legislations for Domestic Workers

There remains an absence of comprehensive, uniformly applicable, national legislation that guarantees fair terms of employment and decent working conditions as extended to workforce in organised sector. Domestic workers should however be guaranteed the same terms of employment as enjoyed by other workers. Policymakers, legislative bodies and people need to recognize the existence of an employment relationship in domestic work as well. Such a view would see domestic workers as not just “helpers” who are “part of the family” but as employed workers entitled to the rights and dignity that every employment brings with it considering the fact that they are contributing significantly.

The several legislations for benefits of the domestic workers are:

(a)      Unorganized Sectors Workers Social Security Act, 2008

                        i.         The Act provides for giving benefits of various social security schemes to workers in unorganised sector including the domestic workers.
                      ii.         The Act provides for social security benefits to domestic  workers from time to time through schemes formulated by Central and State Governments
                     iii.         The Constitution of National Social Security Board/State Social Security Board for Unorganised Worker.
                    iv.         The Registration of Unorganised Worker including domestic worker if he is 14 years of age and is employed in unorganised sector for deriving benefits of social security.

(b)      Sexual Harassment against Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013 and

The definition of ‘aggrieved women’ includes women in unorganised sector including domestic worker. The employer under this Act means one who benefits from that employment is an employer.

(c)       Minimum Wages Schedules notified in various states refer to domestic workers.

Since the State Government has power to fix/revise minimum wages for schedule employment. Since domestic workers fall under the purview of the State Government, Some of the State Government has included them under the category of scheduled employment.

B.        Problems in Enforcing Labour Law for Domestic Workers

Implementations of the labor laws such as minimum wages and regularized working hours, which are essential elements of any kind of work, also remain a challenge for domestic workers. The Unorganized Sector Workers Social Security Act, 2008 (“Act”) governing the domestic workers social security primarily provides that these workers are excluded from the benefit of following important legislations:

(a)      The Workmen Compensation Act, 1925: The aforesaid Act provides for payment of compensation for injury by class of employers. The Act however, excludes casual workers from the definition of workmen.

(b)      The Industrial Dispute Act, 1947: The Act provides for investigation and settlement of Industrial dispute and explicitly does not include any domestic services.

(c)       The Employees State Insurance Act, 1947: The Act provides for benefits during sickness, injury, maternity for factories which excludes the domestic workers from purview of any such benefits.

(d)      The Employees Provident Fund and Miscellaneous Provisions Act, 1952:  The umbrella legislations for future of the industrial workers after their retirement and for their dependents in case of death.

(e)      The Maternity Benefit Act, 1961: Extends benefit to factory, mines or plantations, shops and establishment with 10 or more workers to protect the rights of women while she is at home for child birth and care. The benefits are even extended to those who are not in regular employment.

(f)       The Payment of Gratuity Act, 1972: Payment of lump sum amount in return of the service rendered to the employer applicable to factories, mines, oil fields, plantations, ports, railways, shops and establishments employing more than 10 people.


C.        Important Changes to empower a Domestic Worker

a.   Providing fundamental principles and rights for collective bargaining and freedom of association: to enable the domestic workers reach an agreement to regulate their work conditions.

b.   Effective abolition of child labour in domestic work: The Child Labour (Prohibition and Regulation) Act, 1986 now prohibits employment of child labour in domestic work as also the conduct rules governing government employees. India is home to highest number of child labourers. Although the Constitution guarantees free and compulsory education under the Right to Education Act, 2009, to children between the age of 6 to 14 and prohibits employment of children younger than 14 in any hazardous environment, child labour is present in almost all sectors of the Indian economy. They work in several unorganized sectors like zari, hotel, dhabas and homes besides, factories like brass industry, fire factory, lock making etc Several thousands of children are engaged in child domestic labour which is an invisible form of child labour.  Children in domestic work are not only losing on their precious childhood but also on their right to education. Setting up of minimum age for domestic employment would further help in preventing child labour.

(c)  Education and Training of a Domestic Worker: The laws should be strengthened to encourage that their employment should ensure their further training and education.

(d) Safe and humane conditions of work: The law should ensure effective protection from all abuses and harassment of a domestic worker.

(e)  Written Contract: Terms and conditions of employment as far as possible should be governed by a written contract including-annual leave, name and address of the employer and worker, duration of contract, hours of work, probation period, termination period, weekly rest period etc.

(f)  Minimum wage coverages to domestic workers.

(g) Regulations of Placement Agencies:  Regulation of placement agencies and establishing their roles and responsibilities as well as defining their relationship with domestic workers to avoid harassment at their end of innocent domestic workers. Their role is important as most of the migrant workers depend upon them. Eg. Delhi provides for compulsory registration of placement agencies.

Conclusion

Nevertheless, particular laws in which the inclusion of domestic workers would be crucial are the Minimum Wages Act, Equal Remuneration Act, Shops and Establishment Act (for regulation of placement agencies), Contract Labour Act, Inter-state Migrant Act, and Employee Compensation Act, and the Abolition of Bonded Labour Act etc. and any other suitable legislation which exists or may be notified in future  So far, seven states in India have notified minimum wages to the domestic worker while some states have constituted welfare boards for domestic workers and some states are working for increasing access of welfare schemes to these workers. This needs to be extended to whole of India. Additionally, there is a need for a comprehensive legislations to protect the rights of domestic workers and to define their duties.

[This article is contributed by Adv. Jyoti Srivastava (Partner) Head Litigation, Legal Imperials ]





[i] Unorganised Sector: means an enterprise owned by an individual or self- employed for production of goods, sale of goods and providing services and the number of workers is less than 10.

Monday, January 26, 2015

NEWS SNIPPETS


News Snippets


1.         Enhancing the Pecuniary Jurisdiction of Delhi Courts

The Delhi High Court Amendment Bill, 2014 seeks to amend section 5 of the Delhi High Court Act, 1966 and section 25 of the Punjab Courts Act, 1918 for the purpose of enhancing the pecuniary jurisdiction of the Delhi High Court and eleven District Courts in NCR from Rupees Twenty Lakhs to Rupees Two Crores. Pecuniary jurisdiction of Delhi is provided in Punjab Courts Act, 1918. Enhancement of pecuniary jurisdiction would provide the justice at the doorstep of the litigant. Out of the 24 High Courts in India, 20 High Courts do not have original civil jurisdiction in India. This would also minimize the cost of litigation as well for litigant.


2.         Shram Suvidha Portal     

Ministry of Labour & Employment, Government of India and the State Governments enforce more than 44 labour laws in their respective spheres. There have been requests from various stakeholders for ensuring simplification of formats, ease of compliance, transparency in inspections and speedy redressal of grievances. In order to address these concerns Ministry of Labour & Employment has developed a single unified Web Portal for:
·        Online registration of units
·        Reporting of inspections
·        Submissions of Annual Returns; and
·        Redressal of Grievances

This portal will facilitate ease of reporting at one place of various labour laws consolidated information of Labour Inspection and its enforcement. It will enhance convenience of reporting, transparency in Labour Inspection and monitoring of Labour Inspections based on key performance indices and provide an effective Grievance Redressal System.

As an initiative on pilot basis, the Ministry has selected the Chief Labour Commissioner (Central) organization, the Employees State Insurance Corporation (ESIC), Employees Provident Fund Organisation (EPFO) and Directorate General of Mines Safety (DGMS) covering 16 Labour Laws. State Governments would join this Unified Single Web Portal subsequently.

About the Web Portal
  • The web portal is being developed and maintained by the National Informatics Centre (NIC).
  • This integrated portal will operate through common Unique Labour Identification Number (Shram Pehchan Sankhya) for each Establishment.
  •  The employers will be allotted Labour Identification Number (LIN) after registration on web portal.
  • The enforcement agency will upload the data of inspection on the web portal which will be updated periodically.
  •  This web portal will provide for filing of single harmonized annual return by the employers.
 
  • This web portal will provide for online reporting of harmonized inspection report by inspecting officials.
  • The web portal will contribute proactively to achieve the objective of simplifying business regulations and bringing in transparency and accountability in labour inspections. 
[Source of Information: http://efilelabourreturn.gov.in/home#]



Friday, January 16, 2015

IMMIGRATION LAWS

Overseas Citizen of India

Introduction
Indian Constitution does not permit dual citizenship i.e. holding simultanously citizenship of India and that of foreign country. The following categories emerge in context of  present discussion:

NRI: He is an Indian citizen who is ordinarily residing outside India and holds an Indian Passport. All benefits are available to them subject to notifications issued by Government from time to time. They do not require visa to visit India. He  can undertake all the activities.

PIO: A person whose ancestors are Indian and he himself is foreign citizen and is holder of foreign passport. They require visa to visit India. He can undertake activities specified in his visa.

OCI: Government of India has decided to grant Overseas Citizenship of India (“OCI”). OCI was introduced by amending Citizenship Act of India, 1955 in 2005. The scheme provided for registration of OCI. The Persons of Indian Origin (“PIO”) of certain specified category as specified in Section 7A of the Citizenship Act, 1955 are eligible for registration as an OCI. The application for an OCI can be made online. The OCI however differ as they are not granted political rights or right to equality granted under article 16 of the Constitution. Persons registered as OCI are not granted the following:

  • Voting rights
  • Election to LS and RS; LA and LC
  • Holding post of President Vice President Judge of SC and HC

It is mandatory for an OCI to carry passport with Universal Visa Sticker for entry and exit from India.

The present discussion revolve around OCI.

Documentation required for an application under OCI

(a)           Proof of present citizenship

(b)           Evidence of Self or parents or grandparents being eligible to become citizen of India at the time of commencement of Constitution or evidence that they are part of the territory of India which became part of India after August 15, 1947 or evidence of copy of their passport or copy of domicile certificate issued by a competent authority or any other proof substantiating the evidence.[1]

(c)            If OCI is to be granted on the basis of birth or educational certificate, then the evidence of relationship with as parent/ grand parent.

(d)           PIO card holders are required to submit copy of their PIO card.

It is not necessary for applicant of an OCI to submit the application in person. The application can be submitted in:
  • In the country where the applicant is citizen-Indian Mission/Post
  • If the applicant is not in the country of his Citizenship –then with Indian Mission/Post where he is residing at present
  • If the applicant is in India-FRRO of Amritsar, Bangalore, Kozikode,Chennai, Kochi, Delhi Goa, Hyderabad, Lucknow, Kolkata, Mumbai Thiruvanthapuram as per the specified jurisdiction.
General Information
The general information pertaining to registration as an OCI are:

 Consequence of furnishing wrong information: Any wrong information furnished in the application to register as an OCI can result in banning of an individual in India.

Time for registration as an OCI: The time taken for registration as an OCI is generally 30-120 days depending on adverse report, if any of the applicant.

Fees of an OCI: The processing fee is the non-refundable component of the fees.

Outcome of Registration as an OCI: A registered OCI gets a registration certificate in the form of a booklet and an OCI ‘U ‘visa sticker to be pasted on foreign passport of the applicant.

Status of Citizenship after registration as an OCI: After registration as an OCI, the applicant will not loose his citizenship and such applicant who are holder of OCI for 5 years and are resident of India in one of the 5 years are eligible for Citizenship of India as well. OCI is not granted to people who are foreign nationals and who are married to people who are eligible for an OCI.

Renunciation of an OCI: The status of  OCI can be renounced as well.

Conclusion
So, it is important to note that the Indian government's Overseas Citizens of India (OCI) and Person of Indian Origin (PIO) programs are often incorrectly described as offering "dual nationality" or "dual citizenship." This is not true, as India does not recognize dual citizenship. The OCI and PIO programs do offer card holders some travel and residency privileges. 

[This blog is authored by Jyoti Srivastava Partner Legal Imperials and is informative in nature only. Please write to us info@legalimperials.com for specific queries]





[1] This includes certificate of birth or residence of self/parents/grandparents from First Class Magistrate or District Magistrate. Other proofs include agricultural land certificate, birth certificate and school certificate etc. is duly considered.