Friday, August 8, 2014

CORPORATE LAW - Old And New >>>radical ?


Sebi finds 22 PSUs violating norms; SBI files for settlement


Looking back, at the point in time when MAOCARO happened to be changed and replaced by CARO, the pros and cons of the change was subjected to a critical /analytical study in interested circles. In a published article –, The Hindu Business Line : MAOCARO to CARO its writer wrote saying, in effect, that the opportunity could have been seized and exploited to “simplify” the auditor’s report. May be, that is an angle sounding attractive hence may have to be borne in mind , if so minded, before the new proposal is given a shape and finally brought into being, for whatever it is worth. Provided that is believed to help in any improvement, as aspired from circles having independent and impartial outlook towards the widely and loudly clamoured for,- the ultimate aim of ‘good governance’ in corporate sector.


<> As is expected to be known, whenever an extant law (specially, if it is the complete code, as herein) that comes to be repealed and replaced by an entirely new law(code), problems (legal cum practical) do inevitably arise,. That is precisely the object behind in incorporating in the new code itself suitably framed 'Miscellaneous' provisions for easy and expeditious resolution;  through mainly administrative instructions, in the name of public circulars, directives, and the like.For one such instance, refer Sec 297 and 298 of IT Act, 1961,by which the erstwhile, decades old, 1922 Act came to be repealed.

Subject to looking up again, it is believed that , the “transitional provisions”  found a mention in the previous comment, though said to be not exhaustive, do provide the safety-valve / holds the key for letting off the steam, to prevent any otherwise possible but  validly objectionable retroactive operation of the new law.


Repeal 72 obsolete laws, recommends law panel

The Law Commission on Friday gave an interim report to the ministry of law and justice, recommending repeal of 72 of 261 laws it has identified ...


The Companies (Removal Of Difficulties) Seventh Order - dated 4th Sept 2014

“In the case of a Government company or any other company owned or controlled, DIRECTLY OR INDIRECTLY, by the Central Government, or by any State Government or Governments, OR PARTLY BY the Central Government and PARTLY BY ONE OR MORE State Governments,..”
On the first blush, one is left with a serious doubt whether the substituted provision, in terms, is adequate to remove in a wholesome manner, rather take care of all possible or conceivable difficulties bound to be faced with. Such a doubt arises if due regard be had to the inherent clumsiness/lack of clarity surrounding the words in BOLD FONT and the wisdom gathered through past experience and disputes centered on such words conventionally used in certain other statutes; for instance, the law or income-tax.
Over to, besides law pundits at large, the concerned authorities, for an in-depth application of mind / prudent deliberation, sooner than later.
Further, on a quick reflection, the other crucial words, -OWNED or CONTROLLED , too may be recalled to be so deficient as amenable to varying interpretation,leading to like controversies; reference is to issues which surfaced in the wake of Vodafone and certain other topical cases, and the ensuing long drawn litigation.


 Guest Post: Guarantee Against Loan from Banks and Financial Institutions

Aug 3


Wilful lenders

< It is impossible to ignore the timing of United Bank of India’s declaration that Kingfisher Airli... »

india inc. - inked in indelible BLACK ?

India Inc's debt troubles

The debt pile of Indian companies .

Posted: 22 Aug 2014 04:25 AM PDT
Last week’s Schumpeter column in the Economist carries a provocative idea that involves a complete relook at the way boards of companies are structured and operated. It borrows a proposal from an article titled “Boards-R-Us: Reconceptualizing Corporate Boards” authored by two leading US corporate law academics. The column summarizes the proposal as follows:

In the May edition of the Stanford Law Review Stephen Bainbridge of the University of California, Los Angeles, and Todd Henderson of the University of Chicago offer a proposal for fixing boards that goes beyond tinkering: replace individual directors with professional-services firms. Companies, they point out, would never buy legal services or management advice from people only willing to spare a few hours a month. Why do they put up with the same arrangement from board members? They argue for the creation of a new category of professional firms: BSPs or Board Service Providers. Companies would hire a company to provide it with “board services” in the same way that it hires law firms or management consultants. The BSP would not only supply the company with a full complement of board members. It would also furnish it with its collective expertise, from the ability to process huge quantities of information to specialist advice on things such as mergers.

Paper on Corporate Insolvency Laws in India
Posted: 08 Aug 2014 03:53 AM PDT
Professor Kristin van Zwietenhas posted on SSRN a new paper titled “Corporate Rescue in India: The Influence of the Courts”, the abstract of which is as follows:

India is poised for significant reform to its corporate insolvency laws, including the introduction of a new rescue procedure. The reforms follow two decades of sustained criticism of the law, critics complaining of lengthy delays and a range of related costs in the disposal of proceedings. This article focuses on the most notorious of India’s existing insolvency procedures, a corporate rescue procedure established under the Sick Industrial Companies (Special Provisions) Act 1985. On the eve of its repeal, the article presents the results of an investigation into how this Act operated over time, and why. Its central contribution is to report new evidence of the influence of the courts on the operation of the Act. The article reveals how key provisions of the Act were interpreted and reinterpreted by judges in attempts to rescue companies destined for liquidation, and to protect some of their stakeholders (especially employees) in the interim. The evidence of these innovations offers a new and compelling explanation for why the rescue procedure became slow and costly. Acknowledging and understanding the influence of the courts on the operation of this procedure may help to guard against India’s new corporate rescue procedure suffering a similar fate.
 Corporate Rescue in India: The Influence of the Courts” - Gives rise to Impondeeables galore ?!
law is an ass or is it any other ?

nap's Virtuous humane thoughts / critique on EVOLUTION OF HUMAN (homo sap-eon)

Sporadic Thoughts  (jottings)

THE most fundamental of all fundamentals - Fetters On Powers
Physical  (geographical) Jurisdiction ; Judicial- Civil x Criminal X Authority to enforce say AO under the respective law- IT, ST, so on) 
Sec 37 (1) Expln. .- "offense" (of what nature, civil, criminal, or any other - mens rea, culpable,
  principles of natural justice - founded on common sense
Is Corporate law  an independent AND Exclusively operable or implementable or enforceable enactment 
can a single authority do it
can a single court adjudicate/settle
property Disputes- Consumer court 0compensation for the wrong done), Specific Performance for enforcing a contract, left to the party to opt
development in law making
Development in adjudication
case to case basis -Kapadia CJI- should it be also on law to law basis - if a tax dispute only tax law not any other

UPDATING CONSTRUCTION - a modern day concept
Changes in concepts, mindset, attitude, behavioral pattern, moral x immoral, righteous x not so, depending on severity such as homicide X culpable homicide

Cross refer >

Post on SC in re. "bounced cheques"-  NOT RELATED

    Dishonour of Cheque - Section 138 of the Negotiable ...
    (c) the drawer of such cheque fails to make the payment of the said amount of ... This has been held by the Hon'ble Supreme Court of India in- ..... with a passion to provide the latest info and articles on Indian Legal System ..... after bouncing the cheque you are entitle to issue notice because it is legally recoverable debt only.

    Cheque bounce laws - Legal Service India

  1. Cheque bouncing may also give rise to cheating case rules ...

    * To reply to this comment , or see the whole conversation , click here.
    Again  >
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     QThe bench said: "In this analysis, we hold that the place, situs or venue of judicial inquiry and trial of the offence must logically be restricted to where the drawee bank is located."

    "An interpretation should not be imparted to Section 138 which will render it as a device of harassment, that is, by sending notices (about the bouncing of cheque under Section 138) from a place which has no casual connection with the transaction itself, and/or by presenting cheque(s) at any of the banks where the payee may have an account," the bench said.

    "It is also now manifest that traders and businessmen have become reckless and incautious in extending credit where they would hereto fore have been extremely hesitant, solely because of the availability of redress by criminal proceedings," the bench said referring to the rapid increase in institution of cases under Section 138 of NI Act after it was made a criminal offense.

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