Wednesday 22 August 2012

Pending List for Trademark Registration

                                                     Pending List for Trademark Registration

As on 31st March, 2012, the Trademarks Registry has;

(i) 2,38,944 applications pending at the examination stage
(ii) 2,74,963 applications pending at the objection stage
(iii) 1,35,874 applications pending at the opposition stage
  • Registration of Trade Marks is a quasi judicial process which tends to be time consuming as it involves a number of steps, inter alia, examination of application, show cause hearings and completion of opposition proceedings. In addition, backlog has also arisen because of approximately 100% increase in the applications filed since 2001-02 and due to lack of adequate manpower Registration agencies have been requested to hasten the recruitment process in order to fill up the vacant posts in the Trade Marks Registry. Other steps such as introduction of free search facilities and digitization of records, streamlining of office procedure have been taken with a view to improve efficiency and transparency and thereby hasten the process of registration.
  • This information was given by the Minister of State of Commerce and Industry, Shri Jyotiraditya M. Scindia in a written reply in the Rajya Sabha today.
Source: Minister of State of Commerce and Industry
With Regards
Prakash Verma
Follow us @ True Governance League 
                                                                             *********

Merger and Acquisition Policy – Telecom Sector


Merger and Acquisition Policy – Telecom Sector

The Finance Ministry has requested the Department of Telecom to provide maximum security to lenders in the event of termination of licence and incorporate suitable clause in the draft tripartite agreement. Communications have been received from Finance Ministry which, among others states the following:
  • It would be necessary to expedite assignment of the spectrum allotted to operators in favour of lenders;
  •  Permit a suitable stand still period for consultation with secured lenders before cancellation of telecom license assigned in favour of lenders in the event of default/breach of terms of allotment by the operator;
  • Incorporate a suitable clause in the Tripartite Agreement (for assignment of License) to provide for termination payment to lenders of an amount equivalent to lower of the license fee mobilized or secured loan outstanding in the event of termination of license allotted to an operator;
  •  There should be tripartite agreement between the Government of India, the lender and the borrower to ensure that the lender’s interests are duly taken care of even in the case of force majeure.
  •  In case of default by the borrower, the bank should have unfettered right to sell, transfer, assign, exchange or otherwise dispose of the spectrum free of any restraining conditions.
  •  In case of cancellation/revocation/voluntary surrender of telecom licence before full satisfaction of dues to the lender, whatsoever may be the reason, the title/right to spectrum should be with the lenders.
  • There shall be credible valuation methodology for valuing spectrum, to reflect the true realisable value of the spectrum for the purpose of treating it as security.
  • There shall be a robust formula/ methodology for finding the market price of spectrum together with a margin which has to be prescribed/ laid down to take care of the downward fluctuations in prices before spectrum can be treated as a tangible security.
Government has decided that the existing Tripartie agreements in Unified Access Service (UAS) licenses be modified appropriately to include ‘spectrum’ in order to achieve the desired objective in consultation with the Department of Legal Affairs and the Department of Financial Services. Further, in the event of default by a licensee entailing auction of spectrum, financial institutions/agents be allowed to conduct auction in consultation with the Department of Telecommunications and in accordance with such guidelines as may be laid down for the purpose by the Department of Telecommunications. It would be open to financial institutions to request the licensor to conduct the auction without prejudice to their rights.  

Broad guidelines announced through Press release dated 15.02.2012 in respect of intra-service area merger of CMTS/UAS licences are given here.

The broad guidelines in respect of intra-service area merger of CMTS/UAS licences will, inter-alia, include:
  • For determination of market power, market share of both subscriber base and Adjusted Gross Revenue of licensee in the relevant market shall be considered. The entire access market will be the relevant market for determining the market share, and  will no longer be classified separately as ‘Wire line’ and ‘Wireless’.
  • Merger up to 35% market share of the resultant entity will be allowed through a simple, quick procedure. However, there may be a need to consider cases of merger beyond 35% market share in certain circumstances without breaching the 25% cap on GSM spectrum/ 10 MHz for CDMA spectrum holding in any service area. Recommendation of TRAI that such cases will be considered up to a market share of 60% has been taken note of.  In order to ensure clarity on the circumstances and extent to which merger above 35% limit would be permissible, detailed transparent criteria will be prescribed/ adopted after receipt of TRAI’s recommendations and after due consultation with the appropriate authorities.
  • Consequent upon the merger of licences in a service area, the total spectrum held by the Resultant entity shall not exceed 25% of the spectrum assigned, by way of auction or otherwise, in the concerned service area in case of 900 and 1800 MHz bands. In respect of 800 MHz band, the ceiling will be 10 MHz. In respect of spectrum in other bands, relevant conditions pertaining to auction of that spectrum shall apply.
  • If, as a result of the merger, the total spectrum held by the resultant entity is beyond the limits prescribed, the excess spectrum must be surrendered within one year of the permission being granted. Government may prescribe the band which will be required to be surrendered in accordance with spectrum refarming policy to be announced separately.
  • The substantial equity and cross holding of the Resultant entity shall be in conformity with the provisions of the UAS licence.
  • The duration of licence of the resultant entity in the respective service area will be equal to the higher of the two periods on the date of merger. This does not however entitle the resultant entity to retain the entire spectrum till the expiry of licence period.
  • In case of renewed validity beyond the original validity of any of the merged entity, holding of spectrum in 800/900 MHz band shall be subject to the applicable spectrum refarming guidelines to be announced in future w.e.f the deemed date of extension of merging entity having lesser validity of licence at the time of merger or the date of spectrum refarming guidelines whichever is later.
  • Issues related to spectrum price, to be paid by the resultant entity, would be decided separately. The same shall also apply in case of renewal of wireless operating licence, post merger.
  • On the merger of the two licenses, the AGR of the two entities will also be merged and the license fee will be therefore levied at the specified rate for that service area on the resultant total AGR. Similarly, for the purpose of payment of the spectrum charge, the spectrum held by the two licensees will be added /merged and the annual spectrum charge will be at the prescribed rate applicable on this total spectrum. However, in case of holding of spectrum for various technologies by the entity subsequent to Merger, spectrum charges & license fee etc. or any other criterion being followed by the licensor shall be applicable as in case of any other UAS/CMTS licensee.
  • Existing provisions in the UAS licence relating to Lock-in period for sale of equity/merger shall continue.
This was stated by Shri Milind Deora, the Minister of State in the Ministry of Communication and Information Technology in response to a written question in Lok Sabha today.
Source:- Ministry of Communication and Information Technology

With Regards
Prakash Verma


                                                                        ******                            

Saturday 18 August 2012

PREPAYMENT FEES IN LOAN TRANSACTIONS




It is common practice for loan agreements to provide for a fee/ premium where a loan is repaid earlier than its contractual due date. The said fee is designed to compensate the lender/s for the loss of anticipated income from the transaction and is usually expressed as a percentage of the principal amount prepaid. While the loan agreement sets out the circumstances in which the prepayment fee will be payable, usually it is in cases of voluntary prepayment by the borrower and does not include situations where the prepayment is compulsory/ mandatory, e.g. acceleration of the loan due to occurrence of an event of default etc.

While this should normally be easily decipherable from the loan agreement itself, a recent decision of the English High Court (QBD/ Commercial Court) in the matter of Aston Hill Financial Inc v African Minerals Finance Ltd, [2012] EWHC 2173 (Comm.) demonstrates that  a potential area of difficulty may arise where the loan agreement is not clear on this matter.

Brief Facts 

A facility agreement was executed on February 4, 2011 for a loan of upto US$ 500,000,000 for the development of Phase I of Tonkolili iron ore project in Sierra Leone. On February 11, 2011, the lenders disbursed US$ 417,700,000 to the borrower, African Minerals. On January 31, 2012, it was announced that Standard Bank Group had agreed to refinance the original loan. A syndicated facility led by Standard Bank was signed on February 3, 2012. 

The borrower noted that pursuant to Clause 8.3 of the loan agreement, it was obliged to prepay the loans with any finance proceeds promptly after receipt of such funds and asked for detail as to (among other things) the amount required to prepay the Facility in full on a daily basis from February 7, 2012 to February 9, 2012 inclusive. The facility agent replied by a letter of the same date, stating that the outstanding loan amount of $417,000,000 and details of the accrued interest but making clear that 'any other amounts that may be due under the Finance Documents are not included in this notice'.

On the same day, the lenders' solicitors responded to the borrower, notifying it that if the prepayment was made before February 10, 2012 (the first anniversary of the Closing Date), the borrower was required to pay the prepayment fee referenced in Clause 8.8(d). The letter went on to state that Clauses 8.3 and 8.5 of the Facility were not mutually exclusive and that, as the borrower was aware, prepayment fees were included to compensate the lenders for early repayment of the loan. The letter (i) noted that in this case, the lenders negotiated and agreed the prepayment fee with the defendant in order to ensure that they would be properly compensated for their costs of funds and risks incurred by virtue of entering into the Facility; (ii) stated that the defendant was seeking to obtain more favourable terms by refinancing the loans; and (iii) stated that the failure of the defendant to pay the prepayment fee in the event the Facility was prepaid on or before the first anniversary of the Closing Date would constitute a breach of a contract.

On February 8, 2012 the borrower prepaid the full amount outstanding under the Facility of US$417,700,000. Such prepayment included a prepayment of US$291,100,000 to the claimants in respect of the full principal amounts outstanding in respect of their loans to the defendant under the Facility
.
Relevant provisions

It is pertinent at this time to cast a quick glance at the relevant provisions of the Aston Hill loan agreement:
(a) Clause 8.3(a) (Disposal Proceeds and Finance Proceeds) stated that "The Borrower shall prepay, and the Parent shall ensure that the Borrower prepays, the Loans in an amount equal to the amount of Disposal Proceeds or Finance Proceeds promptly upon receipt of any Disposal Proceeds or Finance Proceeds by any member of the Group."

(b) Clause 8.5 (Voluntary Prepayment of the Loan) stated that "The Borrower, if it gives the Facility Agent not less than five Business Days' (or such shorter period as the Majority Lenders may agree) prior notice, may prepay the whole or any part of the Loan (but, if in part, being an amount that reduces the Loan by a minimum amount of $100,000,000)."

(c) Clause 8.8(c) stated that "On prepayment of all or any part of the Loans pursuant to Clauses 8.5 (Voluntary prepayment of the Loan), the Borrower shall pay to the Facility Agent (for the account of each Lender) a prepayment fee on the date of such prepayment, in the following amount: (i) 6 per cent. of the amount prepaid or repaid if the prepayment is made on or before the first anniversary of the Closing Date; and (ii) thereafter, no prepayment fee will be payable."

Court's decision

The court found that the principles of construction are well established and was not in dispute. The lenders/ claimants and the borrower/ defendant sought to rely upon the passage in Rainy Sky SA v. Kookmin Bank [2011] 1 WLR 2900; [2011] UKSC 50 at [21] to [30]. Thus, it was common ground that it is necessary when construing a commercial contract to strive to attribute to it a meaning which accords with business common sense and to have an eye on the commercial consequences of a particular construction; and that: "If there are two possible constructions, the court is entitled to prefer the construction which is consistent with business common sense and to reject the other".

The court however found it difficult to come to a decision as the wording was unclear and ambiguous. The two prepayment clauses are difficult to reconcile. While the decision to refinance the original loan was a voluntary decision on the part of the borrower, especially since the Standard Bank facility was more competitively priced. The prepayment could not have happened in the absence of refinancing arrangements contracted to by the borrower. It is therefore attractive to categorize the prepayment as voluntary, with the result that the lender would be entitled to the prepayment fee. On the other hand, Clause 8.3 envisages that if the borrower issues new equity or incurs new debt, prepayment becomes mandatory to the extent of the proceeds received by the borrower.

The court ultimately accepted the latter interpretation and held that the prepayment made was mandatory under Clause 8.3 and hence, no prepayment fee was due. The case highlights the need for clarity around prepayment provisions in loan agreements. From a lender's perspective, this decision is an unattractive precedent as it is more than probable that a borrower interested in prepaying an existing loan would seek to do so from a capital infusion or a new loan (both, in this case, being grounds for mandatory prepayment and hence, not liable to a prepayment fee). 

Source: ICL

Thanks with Regards
Prakash Verma
Cont. Id: Prkverma@gmail.com

Sunday 12 August 2012

Banks to Issue of Multicity / payable at ALL Branches cheques by CBS

                                                                  RBI's Update:-
RBI has directed to Banks to Issue of Multicity / payable at ALL Branches cheques by CBS enabled banks:

PFA the Direction of RBI:-

Issue of multicity / payable at all branches cheques by CBS enabled banks

1. As you are aware, various Core Banking Solutions (CBS) implemented in banks marked a paradigm shift in Customer Services. Customers of a branch are now the bank's customers as they can access their accounts from any branch for defined purposes. The new opportunities offered by CBS have enhanced customer service by way of offering various payment products and channels resulting in speedy movement of funds across the country. Leveraging the CBS, banks have started issuing “payable at par” / “multi-city” cheques to select customers with separate transaction codes (29, 30 and 31) by putting in place infrastructure for processing such cheques at all CBS enabled branches.

2. In this regard, Reserve Bank of India had suggested vide its circular DPSS. CO. No. 644 / 03.01.02 / 2007-08 dated October 31, 2007, that the facility of “payable at par” / “multi-city” cheques should be made available by all the CBS enabled banks to all the eligible and requesting customers taking into consideration the availability of CBS in more than 35, 000 bank branches at that time.

3. On a review of the practice followed by banks in this regard, it has been observed that banks are issuing these types of cheques differently. While a few banks are issuing “payable at par” / “multi-city” cheques with value cap, some other banks issue these cheques as per category of account (High Net-worth Customers). Instances of levying intersol charges when such cheques are cleared at other than the base branch city have also come to our notice.

4. Taking into consideration the availability of processing infrastructure for clearing outstation cheques at all clearing locations across the country and to bring about further efficiency in cheque clearing, all CBS enabled banks are hereby advised to issue only “payable at par” / “multi-city” CTS 2010 Standard cheques to all eligible customers. Appropriate Board approved risk management procedures based on risk categorization of accounts may also be put in place. Since such cheques (payable at par) are cleared as local cheques in clearing houses, customers should not be levied extra charges. The updated Board approved policy of banks in this regard may be placed on the web-site of banks, customers notified and a copy thereof forwarded to us.

5. The above instructions are issued under Section 18 of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007).

With Regards
Prakash Verma 
E. ID: prkverma@gmail.com
Find us @ True Governance League 

Tuesday 7 August 2012

Latest Judicial Cases - Supreme and Delhi High Court


                                                              Latest Judicial Cases:-


1. Jainendra Singh Vs. State of U.P. Tr. Prinl. Section Home and Ors. - Jul 30 2012 (Supreme Court)

Issue
Indian Penal Code - Sections 34, 147, 148, 149, 307, 323, 324, 325, 326, 336, 380, 427, 506, 596

Synopsis
The main issue was whether the services of a Constable in the Police Department be terminated who concealed certain relevant facts which he was called upon to disclose after his selection was finalized and after order of appointment was issued by placing him on probation. It was found that the Appellant was involved in a criminal case for an offence falling under Sections 147, 323, 336, Indian Penal Code which was pending in the Court at the time of his selection though subsequently he was acquitted by the competent Court. Since the Appellant concealed his involvement in a criminal case, the Senior Superintendent of Police passed orders terminating his appointment/ services on that ground. Aggrieved by the said termination order, the Appellant approached the High Court by filing a Writ Petition and by the challenged order the High Court declined to interfere with the order of termination holding that the Appellant consciously concealed the important information in order to secure employment and subsequent acquittal. It was laid down as a preposition of law that suppression of material information which a candidate was called upon to furnish and which he failed to do, such concealment would result in serious consequences. It was also not appropriate to the nature of service for which such recruitment was made and the State would be well within its powers to resort to cancellation of such appointment when the appointee was under-going probation in order to ensure cleanliness in the service. It was held that when a criminal case under Sections 148/ 323/ 380/ 427/ 596, Indian Penal Code was filed against the Respondent and it was pending in the Court, it would not be appropriate to appoint the Respondent as a constable. Surely, the authorities entrusted with the responsibility of appointing constables were under duty to verify the antecedents of a candidate to find out whether he was suitable for the post of constable and so long as the candidate had not been acquitted in the criminal case of the charges under Sections 148/ 323/ 380 / 427/ 596 IPC, he could not possibly be held to be suitable for appointment to the post of constable. 

It was held that it was appropriate to refer the above mentioned issue to a larger Bench of this Court for an authoritative pronouncement so that there would be no conflict of views and which would enable the Courts to apply the law uniformly while dealing with such issues.
Registry was directed to place all the relevant documents before the Hon'ble the Chief Justice for constitution of a larger Bench.

2. Jayanti Kumari Nayak Vs. State of Orissa and Ors. - Jul 31 2012 (Supreme Court) 

Issue
Service Law

Synopsis
The Respondent made an allegation that despite due selection he was not allowed to work and appellant was put in his place. An appeal was made before the Director and it was decided by an ex-parte order that Respondent be allowed to work. A Writ petition was filed by the Governing Body. The argument raised by the Governing Body was that intimation regarding date of hearing was received a day after the hearing. The Court however found it to be false as Telegram was sent for giving notice of hearing. Thus, the Writ was dismissed with liberty to Governing body to file an application before Director for review. Respondent No. 4 challenged the order of the Director before the High Court in Writ Petition. The High Court allowed the writ petition. The High Court noticed the earlier proceedings between the parties and further that in the previous writ petition filed by the Governing Body of the College, the Court had left it open to the Governing Body to file an application before the Director for review of his earlier order. It was held that the Director had no power to review and its earlier order had become final and it could not be changed by him on the basis of a petition for recall of that order. The High Court pronounced that the order of the Director was final. It, accordingly, allowed the writ petition. Against the order of the High Court the Appellant filed an appeal to this Court. It was held that in the first round High Court gave liberty to Governing body to file a petition for review however in the second round it held Director to be having no power of review. Thus, matter was not properly dealt with and was postponed to Director for fresh consideration. All previous orders were set aside. Different proceedings arising from earlier orders, pending before courts were also abated. The appeal was disposed of by the Director by an ex parte order holding that the action of the General Body in prohibiting the applicant (respondent No.4 in the present appeal) from discharging his duties was illegal and requested the Secretary of the Governing Body to allow respondent No.4 to perform his duties as a lecturer in the college. It was held that the matter was not properly dealt with and at the same time there were materials to suggest that respondent No.4 was able to obtain the ex parte order from the Director on the basis of a document, the genuineness of which was doubtful. 

Thus all the previous orders passed both by the High Court and the Director were set aside and remit the case to the Director to consider the matter afresh after hearing respondent No.4, the Governing Body of the College and the appellant and pass a fresh order on his appeal in accordance with law.

3. The Oriental Insurance Company Ltd. Vs. Siby George and Ors. - Jul 31 2012 (Supreme Court)

Issue
Workmen's Compensation Act, 1923 - Sections 3, 3(1), 3(5), 4, 4(2), 4(3), 4A, 4A(1), 4A(2), 4A(3), 19
 

Synopsis
The Commissioner for Workmen's Compensation, Ernakulam directed for payment of simple interest at the rate of 12% per annum from the date of the accident. The Appellant's appeal was dismissed by the Kerala High Court as barred by limitation. Against the order of the High Court the Appellant filed the special leave petition in which notice was issued "limited to the interest". The main issues in this matter was when did the payment of compensation under the Workmen’s Compensation Act, 1923 become due and accordingly what was the point in time from which interest would be payable on the amount of compensation as provided under Section 4A(3) of the Act. It was stated that Sub-section (3) of Section 4A was in two parts, separately dealing with interest and penalty in Clauses (a) and (b) respectively. Clause (a) provided the levy of interest, with no option, in case of default in payment of compensation, without going into the question regarding the reasons for the default. Clause (b) provided for imposition of penalty in case, in the opinion of the Commissioner, there was no justification for the delay. Before imposing penalty, however, the Commissioner was required to give the employer a reasonable opportunity to show cause. As per Sub-section (3) it was clear that payment of interest was a result of default in payment without going into the reasons for the delay and it was only in case where the delay was without justification, the employer might also be held liable to penalty after giving him a show cause. Therefore, the delay in payment of the amount due was unjustified was required to be recorded only in case of imposition of penalty and no such finding was required in case of interest which was to be levied on default per se. Section 3 of the Act dealt with the employer's liability for compensation. Sub-section (1) of that section provided that the employer was liable to pay compensation if "personal injury was caused to a workman by accident arising out of and in the course of his employment." It was held in Pratap Narain Singh Deo v. Srinivas Sabata that an employer was liable to pay compensation as soon as the personal injury was caused to the workmen by the accident which arose out of and in the course of employment. Thus, the relevant date for determination of the rate of compensation was the date of the accident and not the date of adjudication of the claim. 

Thus, it was not open to contend that the payment of compensation would fall due only after the Commissioner's order or with reference to the date on which the claim application was made. The appeal was therefore dismissed with costs amounting to Rs. 20,000/-. The amount of cost was to be paid to the Respondents within six weeks.

4. Satpal Vs. Union of India - Aug 1 2012 (Delhi High Court)

Issue
Indian Evidence Act, 1872 - Section 32; Central Civil Services (Classification, Control & Appeal) Rules, 1965

Synopsis
It was pleaded by the Petitioner in the writ petition that he was served with a charge sheet alleging that while functioning as a driver of vehicle he misappropriated Government Stores like cement, diesel and explosives and sold the same in the village and thereby failed to maintain integrity. As per the statement of imputation to the charge sheet, it was alleged that aforesaid fact surfaced at a Court of Inquiry were recovered from the Superintendent. The petitioner also pleaded that the inquiry was initiated under the CCS (CCA) Rules 1965 on the findings by a Court of Inquiry under the Army Act. The principal three counts on which the penalty levied upon the petitioner i.e. of dismissal from service were: Firstly, that the department could either proceed against the petitioner as per the Army Act or before a Civil Forum and having chosen to proceed under the Army Act, the respondents could not opt to proceed at a Civil Forum. The second contention urged was that statement of Bhola Nath Tiwari during Court of Inquiry proceedings could not be relied at the departmental inquiry. Thirdly, that a person could not be subjected to dual jurisdiction. It was held that as long as there was procedural fairness at a domestic inquiry and as long as a witness was cross-examined, statements made by such a witness would be admissible in evidence, being relevant to the inquiry. It was stated that where statement made by a person implying the other was made in the presence of he who was inculpated and said inculpated person was granted an opportunity to cross-examine the maker of the statement, be it at a preliminary inquiry or a proceeding akin to a Court of Inquiry, such statements would be admissible in evidence at a domestic enquiry for the reason, the person inculpated had been granted a fair opportunity to test the veracity of the statement made by cross-examining the maker of the statement. On the subject of petitioner being proved to be guilty of misappropriating government property i.e. cement bags and selling the same and pocketing the ill gotten gains, the testimony of Bhola Nath Tiwari at the Court of Inquiry proceedings nailed the petitioner. The petitioner cross-examined Bhola Nath and could not destroy his credibility. On the subject of the penalty imposed, it was stated that he who steals government property or misappropriates the same, and was a government servant, must suffer the consequences and the penalty of dismissal from service would be the appropriate penalty. 

Thus, there was no merit in the petition and therefore it was dismissed.


Source: Think Legal

Regards
Prakash Verma
E Id:- Prkverma@gmail.com

http://www.facebook.com/groups/Truegovernanceleague

Friday 3 August 2012

DIRECT ENTRY TO CHARTERED ACCOUNTANCY COURSE – AMENDMENTS TO THE CHARTERED ACCOUNTANTS REGULATIONS, 1988.
This is to inform all concerned that with the issuance of the Notification No. 1-CA(7)/145/2012 on August 1, 2012, the provisions relating to Direct Entry Scheme for Graduates / Post Graduates, etc., with prescribed percentage of marks, to the Chartered Accountancy Course have come into force from August 1, 2012.

The said Notification is reproduced herein below for information of all concerned.

Interested persons/students, i.e., freshers and existing students are advised to watch for the details of registration formalities and of transitional scheme including fee
payable, registration form which will be announced/published by around August 16, 2012.

PFA the source with info :

http://220.227.161.86/27507directca17034.pdf

Regards
Prakash Verma