Preach Law

Who can file a complaint against a company, procedure to file a complaint

Who can file a complaint against a company? Procedure to file a complaint and where a complaint can be filed ? Registrars of Companies (ROC) appointed under Section 396 of the Companies Act 2013 (whiz 609 of the Companies Act, 1956) which covers various States and Union Territories that are conferred with the primary duty of registering LLPs and companies established in the respective states and the Union Territories and to ensure that such companies and LLPs comply with statutory requirements under the provision of the Act. These offices are available for inspection by members of public on payment of the prescribed fee, and its function is to maintain the registry of records, relating to the companies registered with them. The Central Government administer control over these offices through the respective Regional Directors. In the case of certain defaults, companies can file a complaint with ROC or the Ministry of Corporate Affairs. Who can file a complaint against a company? Any aggrieved person against a company or an investor can file a complaint with the Registrar of the Company or the Ministry of Corporate Affairs. Steps required to file a complaint. While filing this online form on MCA website, one has to enter the Corporate Identity Number (CIN) of the company. On MCA Website click on MSA Services > Complaints, there you will find an option of Create Investor Complaint, click on that it will provide you with Investor Complaint Form. Fill in all the necessary information and submit your complaint online. The first and foremost thing an aggrieved person should do is to file a complaint with the Investor Grievance Cell of the company. It is quite common that the investors or the company don’t respond to these complaints frequently. It is not a problem, in such case follow the below-mentioned steps to elevate your problem if one does not get a response. The best way to do this is to file a complaint directly with the Ministry of Corporate Affairs (MCA). One has to fill in the form as per the guidelines mentioned in the form and provide all the mandatory data as required. Once done with the form fill up, one has to complete the Check Form and Pre-scrutinize the form. While doing this, the internet connection must be proper, and he/ she must be connected with the MCA21 portal Then log in to MCA21 portal using the registered user login id. Once logged into the MCA21 portal, use the E- form upload functionality under the E- Forms tab on the portal, to upload the Investor Complaint Form Once the form is uploaded, the complainant must note down the Service Request Number for any future endeavour These are the steps that need to be followed to lodge a complaint against the investor of a company. Given that we can say that the form is very detailed with the types of complaint. It provides a good scope of complaints. For instance, it contains, Shares or dividend, Debentures or bond, Fixed deposits (non-receipt of amount), Miscellaneous non-receipt, Director aggrieved by his cessation in the company, Non-filing of return of cessation of a director in Form 32, Others like the complaint of serious nature. Thus, we can say that one can competently file a complaint with this form. How and where to file a complaint in the case where a person is aggrieved by a fraud committed by a company or a person connected with it. If a person is aggrieved by a fraud committed by a company, then such person can report the complaint with Service Fraud Investigation Office. “The Government in the backdrop of major failure of non-banking financial institutions, phenomenon of vanishing companies, plantation companies and the recent stock market scam had decided to set up Serious Fraud Investigation Office (SFIO), a multi-disciplinary organization to investigate corporate frauds. The Organization has been established and it has started functioning since 1st October, 2003. The SFIO normally take up for investigation only such cases, which are characterized by: Complexity and having inter-departmental and multi-disciplinary ramifications; Substantial involvement of public interest to be judged by size, either in terms of monetary misappropriation or in terms of persons affected, and; The possibility of investigationleading to or contributing towards a clear improvement in systems, laws or procedures. The SFIO shall investigate serious cases of fraud received from Department of company Affairs There are no specific legislations or Act governing the functioning and jurisdiction of SFIO. Thus, Companies Act 1956 guide its operation.  Investigations used to be carried out under section 235 and 237 of the Companies Act,1956. Under these provisions, the Central Government (under section 235) or the Tribunal/Company Law Board/Court (under section 237) could order investigationof any company or group of Companies by the SFIO. But after the enactment of Companies Act, 2013, SFIO has been guided by this Act, and it follows the scope and statutory status of this Act. The investigation into the affairs of a corporate by Central Government has been enlarged to include cases involving ‘Public Interest” and also on request from any Department of Central/State Government. The procedure followed in decision-making process, which also includes channels of supervision and accountability: Firstly, the investigation is carried out as per the Companies Act. Then the Investigation Officer (IO) (i.e., the officer of SFIO) is appointed by the Government The active officer group consists of the Director, SFIO in consultation with the IO. They assist the IO as required; they give advice in the respective specialized areas so that the problem could be solved by considering its multifaceted angles. IO acts as a lead supervisor for all the team working on the matter After completion of the investigationthe investigation officer submits the investigation report to the Central Government in the Ministry of Corporate Affairs. The Director of the office is the Head of the Department of SFIO. This was done to make the functioning of the office more effective. Under himthere is an administration division headed by a Deputy Director. Limitation and norms of Investigation are enumerated below: The Central Government demarcate the

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Law of Adverse possession

Law of Adverse Possession Introduction The term “adverse possession” in common parlance refers to a legal principle that grants title to someone who resides on or is in possession of another person’s land. The property’s title is granted to the possessor as long as certain conditions are met including whether they infringe on the rights of the actual owner and whether they are in continuous possession of the property. Adverse possession is sometimes called squatter’s rights, although squatter’s rights are a colloquial reference to the idea rather than a recorded law. Several questions are raised by an owner of the property like if a person has purchased a property for investment and if someone takes possession of it, what will be the legal rights of the owner? Will the Court provide the remedy to a person who is the owner of the property for eg. a house on which some other person has claimed his right to adverse possession? How to get the occupied property vacated in one day? All the above questions are answered in the Landmark judgment of the Supreme Court in Poona Ram vs. Moti Ram (D) Th. Lrs. on 29.01.2019 Landmark Judgement in Poona Ram vs. Moti Ram (D) Th. Lrs. on 29.01.2019 Brief facts of the Case: Moti Ram had filed a suit over an immovable property over which he claimed the possessory title, which seemed merely based on his prior possession of the property for several years. However, Moti Ram had no documents to evidence his possession of the same. Poona Ram submitted his title deeds to the suit property, having thus claimed a better title to the suit property. The Trial Court decreed the suit in favour of Moti Ram, but the First Appellate Court reversed the order of the Trial Court and held that Poona Ram in lieu of title deeds had proved his title over the suit property in question. However, in the Second Appeal, the High Court of Rajasthan restored the order of the Trial Court and observed that Poona Ram was not able to prove his title over the property on two grounds: claim for a better title or disposition of Moti Ram’s title over the property, Moti Ram not being in possession of suit property, but Moti Ram had possessory title to suit property based on his long-term possession. It is based on this observation that Poona Ram approached the Apex Court. Final Judgement: The Hon’ble Supreme Court in the judgment observed that a person who asserts possessory title over a particular property will have to show he is under settled or established possession of the said property. Therefore, the Supreme Court, in the present case in light of the above submission had to observe whether Moti Ram had better title over the suit property and whether he was in settled possession of the property, which required dispossession as per law. The Hon’ble Court, while addressing the stance under Section 64 of the Limitation Act, wherein a suit for possession of immoveable property based on previous possession and not on title, if brought within 12 years from the date of dispossession, opined that such a suit is based on possessory title as opposed to proprietary possession has also elaborated on the term “settled possession” holding that such possession over the property which has existed for a long period and such effective possession of a person without a title would entitle him to protect his possession, similar to that of a true owner. The Hon’ble Supreme Court discussed the above issue by relying upon the following landmark judgments: In Nair Service Society Ltd vs. K.C Alexander, AIR 1968 SC 1165, wherein the Court held that a person in possession of land in the assumed character of the owner and exercising peaceably the ordinary rights of ownership has a perfectly good title against the entire world except for the rightful owner. In such a case, the defendant must show in himself, or his predecessor a valid legal title and probable possession before the plaintiff’s possession, and thus be able to raise a presumption prior in time.  The crux of the matter is that a person who asserts possessory title over a particular property will have to show that he is under settled or established possession of the said property. But merely stray or intermittent acts of trespass do not give such a right against the true owner. Settled possession means such possession over the property which has existed for a sufficiently long period, and has been acquiesced to by the true owner. A casual act of possession does not have the effect of interrupting the possession of the rightful owner. A stray act of trespass, or a possession that has not matured into settled possession, can be obstructed or removed by the true owner even by using necessary force. Settled possession must be effective, undisturbed, and to the knowledge of the owner or without any attempt at concealment by the trespasser. There cannot be a straitjacket formula to determine settled possession. Occupation of a property by a person as an agent or a servant acting at the instance of the owner will not amount to actual legal possession. The possession should contain an element of animus possidendi. The nature of possession of the trespasser is to be decided based on the facts and circumstances of the case The Supreme Court has also observed in this matter that Moti Ram as rightly observed by the First Appellate Court has not been able to prove with any documentary evidence that he was in actual possession of the suit property much less continuous possession. Actual Possession is “having physical control of any object or real property”. Therefore, it is clear that for the establishment of possessory title over the property, it is fundamental to establish the act of actual possession over the suit property, and thereafter the plea of continuous possession can be claimed to further the cause of the possessory title. The Supreme Court rightly overruled the judgment of the High Court of Rajasthan for the fact that the

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Acknowledgement Of Debt

Acknowledgement Of Debt Acknowledgement Of Debt ‘Acknowledgement’ generally means acceptance or admission of something that exists. Section 18 of the Limitation Act, 19631 uses the term ‘acknowledgement’ to mean an admission of an existing liability in lieu of which the period of limitation is extended. A perusal through section 18 of the Limitation Act indicates certain conditions to be fulfilled in order to emphasize acknowledgement. They are: It may be clarified that ‘acknowledgement’ under section 18 of the Limitation Act and ‘promise to pay’ under section 25(3) of the Contract Act, 1872 are different even though both have the effect of creating a fresh limitation period. Where section 18 grants a fresh period of limitation only in cases where acknowledgement is before expiry of limitation period; section 25(3) comes to the rescue in cases where period of limitation has already expired6. However, can we treat an acknowledgement of liability as a promise to pay? In affirmatively answering the question the Delhi High Court has held that any written acknowledgment after the confirmation of the balance amount can safely be treated as a promise to pay and not mere acknowledgement7. It is to be noted that an acknowledgement of liability may be unilateral or bilateral8. A unilateral acknowledgment would, in most cases, be more reliable and convincing, because if the debtor makes a conditional or unconditional acknowledgment in the absence of a creditor, it cannot be urged by him as in the case of a bilateral agreement that it was obtained by any kind of fraud, coercion, threat, inducement or promise9. Effect of acknowledgement in case of Guarantee: An acknowledgment by a principal-debtor does not bind the surety10 but it has also been held that acknowledgements by the principal-debtor also keep the limitation saved against the surety11. In any case, where the surety has specifically empowered the principal-debtor to give consent on behalf of the surety in respect of all matters concerning the debt, the acknowledgement of liability given by the principal-debtor is binding on the surety, even though he has not signed the acknowledgements12. Documents that constitute ‘acknowledgement’ vis-à-vis section 18 of the Limitation Act: E-mails acknowledging the debt constitute a valid and legal acknowledgement of debt though not signed as required under Section 18 of the Limitation Act13. If an acknowledgment is sent by an ‘originator’ to the ‘addressee’ by e-mail, without any intermediary, it amounts to electronic communication by e-mail which is an alternative to the paper based method of communication and is legally recognized by the Information Technology Act, 2000. Debentures are documents which either create debt or acknowledge it14. In modern commercial usage, a debenture denotes an instrument issued by the company, normally – but not necessarily – called on the face of it a debenture, and providing for the payment of, or acknowledging the indebtedness in, a specified sum, at a fixed date, with interest thereon. It usually–but not necessarily–gives a charge by way of security, and is often–though not invariably–expressed to be one of a series of like debentures15. Therefore, debentures are ‘acknowledgment’ under the purview of section 18 Limitation Act, 1963. Balance sheets are an admission of indebtedness and sufficient acknowledgment under the Indian Limitation Act16. The limitation period is calculated from the date it is signed17. In the case of a company, Section 215(i)(ii) of the Indian Companies Act, 1956 requires that every balance sheet shall be signed on behalf of the Board of Directors by the managing agent, secretaries and treasurers, manager or secretary, if any, and by not less than two directors of the company one of whom shall be a managing director where there is one. Section 133 (i) (ii) of the Indian Companies Act, 1913 also provided that the balance sheet should be signed by two directors or, when there were less than two directors, by the sole director and by the manager or managing agent (if any) of the company. Without such authentication, an admission of liability in a balance sheet will not be authorised and will not amount to an acknowledgment of liability within the meaning of Section 19 of the Limitation Act, 190818. Cheque given by a debtor to pay his dues is an acknowledgement, even though the Cheque is dishonoured19. An acknowledgement of a payment made in the written statement in an earlier suit operates as an acknowledgement within the meaning of Section 18 of the Limitation Act20. In a suit for redemption of a mortgage, acknowledgement of liability must be made by the mortgagee whereas in a suit for foreclosure of mortgage, acknowledgement muse b made by the mortgagor21. This reflects that an acknowledgement must be made by the person against whom the liability is sought. An insufficiently stamped document which contains an admission of liability can be relied upon only for the purpose of extending limitation period22. There are documents which do not constitute an acknowledgement of liability under the Limitation Act. Issuance of TDS certificate does not amount to the acknowledgment of liability23 as TDS certificate is primarily to acknowledge the deduction of tax at source. Also, C – Forms are not due acknowledgement of debt24 as there is no acknowledgement of a present and subsisting liability. This is because no intention to acknowledge a liability can be inferred from the contents of the C form. Also, one cannot establish a jural relation of debtor and creditor from the contents of the C form. Similarly, a letter in reply to a demand notice cannot be held as acknowledgment as long as it does not admit the liability. Date from which limitation period is calculated 18(1) of Limitation Act, 1963 provides that the fresh period of limitation shall be computed from the time when the acknowledgment was so signed. In view of Section 12(1) of the Limitation Act and Section 9(1) of General Clauses Act, 1897 it was held that the day on which acknowledgment is made will have to be excluded in computing the period of limitation25. In case of

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Due Diligence in Real Estate Transactions

Legal Due Diligence in Real Estate Transactions: Its Significance and Methodology Introduction Real estate is one of the fastest growing sectors in India evidenced by a sharp increase in real estate transactions involving buying, selling, leasing and financing of properties. In addition to transactions in urban areas, we have also witnessed large scale procurement of land from individuals in villages close to the urban, industrial and commercial centres. Similarly, there has also been an increase in leasing (both short and long term) of commercial office space. The increase in real estate transaction values combined with the growing participation of the organized sector in real estate has resulted in heightened awareness of the risks involved and, consequently, the need for ensuring that the risks are identified and minimized in such transactions. ‘Legal due diligence/ title search’ of real property (be it of vacant tracts of land or of constructed residential/ commercial/ industrial properties) is clearly the mode for achieving these objectives. A due diligence exercise is probably the most important aspect of a transaction involving real estate immediately following a broad understanding of the commercials. This process has the potential of not only impacting the commercials but also determining the feasibility of the transaction itself. While the commercials often pay high importance to expedite the conclusion of a transaction, it is critical in the interests of the players to provide adequate time and attention to a detailed due diligence of the property involved. It is important to realize issues such as title, permitted use, legality of construction, encumbrances and easements which have the ability to impact the very nature of the property and its suitability to the commercial needs of the transaction. Need for conducting and scope of legal due diligence of real property: Due diligence is conducted mainly to verify the ownership of title over the property and any encumbrances over the property, so as to protect one against pre-existing claims over the property. Such claims could either affect the ability of the transferor to transfer the property or could attach themselves to the property even after it is transferred. The primary objective of a due diligence is therefore to gather information. The extent and type of due diligence to be undertaken by the purchaser’s lawyer will depend on the following: The risk profile and business objectives of the purchaser/ lessee; The type of real asset involved; Nature of the real estate transaction (i.e., whether it is a purchase, long term/ short term lease, mortgage or financing of the real property, The time frame for completion of the transaction; and Whether the purchaser is looking at obtaining third party financing either pre-transaction or post-transaction. In case of a prospective purchase, a lease of the property or real estate financing, a title search is performed primarily to answer three questions: Does the owner/ lessor have sufficient authority/ interest/ right to enter into the transaction involving the property in question? Do any liens exist on the property which needs to be discharged before the consummation of the transaction in question? These could be in the nature of mortgages, charges, acquisitions, unpaid taxes, litigation, easements and other assessments. What is the nature of restrictions on the use of the property? Apart from undertaking title search/ due diligences for purchase or lease of properties, a title search/ due diligence is also performed when an owner wishes to mortgage the property with any bank, financial institution or a lender. Such bank/ financial institution/ lender may require the owner to submit a due diligence report of the property or may conduct such diligence on its own. Type of Due Diligence/ Title Search: Depending upon the nature of the transaction, the property involved and the objective of the participants, a due diligence can be divided into two broad categories: Full search; and Limited search. Full Search: A full search is usually done while giving a title certificate of the property in instances of sale/ resale/ long term lease transactions and for transactions that involve obtaining of financing by mortgaging the property in question. In a full search, the search regarding status of ownership of the property is generally conducted for a period preceding thirty (30) years (or more) from the date on which the seller in question came to acquire the property. It also includes a detailed search of all aspects relating to the history of that property such as the status of encumbrances over the property, the status of disputes relating to the property, the applicable regulations and the status of compliance of such applicable regulations relating to the property in question. Limited Search: A limited search is generally conducted in transactions where the property is taken on lease for a short term (usually under 9 years). In such instances, the period for which the preceding ownership of the property is traced is generally restricted to fifteen (15) years (or less) from the date on which the current owner of the property came to acquire the property. Unlike full searches, in a limited search, the search relating to the history of the property may be limited to restricted aspects such as recent title history, encumbrances on the property, disputes related to the property etc. Steps involved in conducting such due diligence/ title search: In order to conduct title search / title verification, the following aspects would require to be examined: a) Legal capacity of the present owner of the property (whether the person is legally capable of entering into a binding contract for sale or lease of the property or for mortgaging the property); b) Nature of current owner’s right over the property, and whether such right is transferrable; c) Source of right or title of the current owner; d) Legality of the construction; e) Encumbrances over the property; and f) Whether the property is a part of any acquisition process. We shall now elaborate each of the above and highlight the need to examine these aspects. Step 1: Legal capacity of the seller: It

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Security Cheque Answerability

The Challenge Regarding Security Cheques: Answerability and Consequences as Per NI Act, 1881 INTRODUCTION: A division bench of the Apex court in a recent case observed that, “Cheque issued as security for financial deal cannot be considered as worthless piece of paper”. The statement was made in pursuance of establishing the legal obligation of a dishonored cheque which had the character of a security cheque. The Apex Court through its decisions in recent years has made its position amply clear regarding cheques which qualify as security and the same is being discussed hereunder. The Root Of The Problem: Security Cheques: A Security Cheque can be defined as a cheque issued to a payee as security or surety for availing the option of drawing the same in an instance where the drawer fails to fulfill the future obligations arising from a business deal or any other such transactions. Security cheques are thus issued in furtherance of a financial obligation and acts as a surety for the person accepting such cheque. A Post-Dated Cheque[i] is a form of a crossed or account payee bearer cheque but post-dated to meet the said financial obligation at a future date. Post-dated cheque is furnished by the drawer for a future date, the purpose of furnishing such a cheque is to ensure that the person encashing the cheque does so after the date mentioned on the cheque and not on the date the cheque was made. Ever so often, post-dated cheques are used as securities in various business transactions and other such obligations. Post-dated cheques can be issued for any purpose i.e. to secure a loan, to serve as an advance or security or for discharge of a legally enforceable debt. The primary objective behind the enactment of the Negotiable Instruments Act, 1881 (“NI Act”) was to engender binding and authoritative rules of law relating to negotiable instruments so that the claims upon mercantile instruments could be equated with ordinary goods, passing from hand to hand.[ii] The Apex Court while laying emphasis on the commercial nature of the Act observed that the provisions under the Negotiable Instruments Act are aimed to, “facilitate the activities in trade and commerce, making provision of giving sanctity to the instruments of credit which could be deemed to be convertible into money and easily passable from one person to another. In the absence of such instruments, the trade and commerce activities were likely to be adversely affected as it was not practicable for the trading community to carry on with it the bulk of the currency in force.”[iii] Dishonouring a post-dated cheque attracts culpability under Section 138[iv] of the Negotiable Instruments Act (NIA), 1881. It is pertinent to note that post-dated cheques having a definite amount specified on them are within the ambit of Section 138, and even a blank post-dated cheque may qualify as dishonouring a cheque due to insufficiency of funds, it is immaterial that the cheque may have been filled in by any person other than the drawer.[v] The court in the case of Bir Singh v. Ramesh Kumar[vi] remarked that “a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted.” Furthermore, Section 138 of the act is governed by the presumption provided under the subsequent section i.e,, 139 that the court presumes that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability. The term debt included a sum of money promised to be paid at a future date by reason of a present obligation.[vii] Tracing The Judicial Precedent: Erstwhile, the Madras High Court[viii] adjudicated upon a case regarding the furnishing of a security cheque and the liability that it entailed on the accused as per Section 138 of the NIA. The Court held that when the parties to the suit entered into a contract with a clause regarding the security cheque, there was no subsisting liability or debt which is why the contract itself makes it clear that the cheque had to be handed over as a security. The Court further explained that when the cheque was handed over, there was no legally enforceable debt or other liability. Thus, the Court was of the view that as an undated cheque having been given only as security, the provision of Section 138 of the NIA would not be attracted. The case of Somnath vs. Mukesh Kumar[ix], held that the accused would not be held liable under section 138 of the aforementioned act wherein the cheque in question had been issued qua a time barred debt. Moreover, in the case of Indus Airways Private Limited v Magnum Aviation Private Limited[x] (Indus Airways Case), the Apex Court clarified its position wherein a security cheque was issued in the form of advance payment of a purchase order, however, on the subsequent cancellation of the purchase order, the security cheque was dishonoured. By way of the aforementioned judgment, the term legally enforced debt or other liability was emphasised upon, also particularly the fact that there should be a legally enforceable debt or other liability subsisting on the date of drawal of the cheque. Thus, in the Indus Airways case, it was held that a Post-dated cheque issued in order to make an advance payment could not qualify as cheque for discharge of debt however there may be liability subsisting under the Contract act but a case of dishonouring of cheque as per Section 138 cannot be made out. Recent Trend: The Supreme Court in the past five years has adjudicated upon cases of security cheques and post-dated cheques (having

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Intellectual Property Due Diligence

IPR (Intellectual Property Rights)Due Diligence in India IPR Due Diligence in India In any corporate transaction involving acquiring a business or a stake therein, the acquirer conducts due diligence of the targets’ assets and liabilities, in order to derive comfort that the business is as has been informed to the acquirer and to analyze the risks of the business, as currently conducted. With the help of an appropriate due diligence exercise, the acquirer weighs the assets, liabilities and potential risks associated with the transaction, analyze the extent to which any liabilities or risks could be minimized, and finally negotiate the total value for the transaction. Intellectual property (IP) due diligence: IPR Due-diligence is an integral part of the legal due diligence process as often tremendous worth is associated with the intangible assets of the business particularly in contemporary times. Accordingly, IP due diligence involves analyzing the intangible assets of a business, checking valid intellectual property rights subsisting therein and scope of their protection, analyzing the risks involved with respect thereto and in turn, assessing their potential value. While the target or seller of the business tends to view IP diligence as something that has to be suffered as part of the transaction, it need not necessarily be so. Finding of a buyer from an IP due diligence, particularly if shared or discussed with the seller, gives valuable insight to the seller on the gaps and lacunae in the IP ownership or usage rights. This provides the seller with opportunities for plugging the gaps, further protecting and/or documenting their intangible assets properly as well as mitigating the liabilities and potential risks, if any, in relation to their intellectual properties. All this will be particularly useful learning if the transaction does not go through. Even if the transaction does go through, the learning will help the seller as such issues often tend to be seen in other businesses being carried on by the seller. It may also be useful to seller in relation to starting a new business. To a prospective buyer / investor, it gives a holistic understanding of the strength of the target’s intellectual properties and the value associated with the same. Ignoring aspects of intellectual property during the due diligence process can cost a buyer / investor dearly. The Volkswagen-Rolls Royce deal1 of 1998 should be seen in this regard, where Volkswagen was interested in acquiring the assets of Rolls Royce and owning the brands Rolls Royce and Bentley. Volkswagen acquired the assets of Rolls Royce Motor Cars Ltd for $790 million. The irony of the acquisition deal was – till the closure of the transaction, Volkswagen was not aware that it had merely acquired the factory, facilities and rights to make and sell Rolls Royce and Bentley vehicles for a period of 5 years, and also rights to use the marks Bentley and Rolls Royce; and not the ownership over the name and brand Rolls Royce. Apparently, the brand Rolls Royce was owned by parent company, Rolls Royce Plc., by virtue of prior agreements and the parent company was more interested in granting license and subsequently transferring ownership to a competing group, BMW. After 5 years from the period of acquisition, BMW became the exclusive right holder of Rolls Royce brand and acquired rights to manufacture Rolls Royce vehicles. By not being careful about assessing the state of intellectual property ownership relating to Rolls Royce, Volkswagen paid superfluous amounts for the returns it received from the deal. This case is one of the best examples (albeit a glaring and extreme one) to show how undermining the role of IP due diligence during a commercial transaction can lead to unprecedented losses to the buyers / investors. Just as IP due diligence forms an integral part of an M&A transaction, it is equally required for other transactions, viz., joint ventures, investment (PE/VC) transactions, project finance, issuance of new stocks and securities and the like. An appropriate IP diligence helps setting an agenda for treating relevant IP rights, assessing the risk involved in relation to the target’s IP assets and strategizing to resolve the issues. Every business is different from the other and will have a different set of requirements for analyzing the target’s assets and liabilities. However, here below are discussed general requirements in an IP due diligence exercise for mostly all corporate transactions: Identification of relevant ‘protected’ and ‘protectable’ subject matters under IP laws: In all businesses, trademarks and brand names are considered substantial IP rights. If a business is software / technology / product based, its new products, technologies, designs, unique business methods, and the like would constitute its principal IP-protectable subject matter. The same would give rise to patent rights, design rights, copyrights and/or trade secrets as its other important IP apart from trademarks. However, in a product-retail business or a service-oriented business, including through e-commerce portals for end customers who are the general public, brand identities become the most important IP. The first and foremost requirement in the process is to understand the nature of target’s business and identify intangible subject matters relevant to the business that is the subject matter of the investment or acquisition. The subject matters could be ‘protected’, i.e., either by way of registration or by any other recognized means; for example, fixation in a tangible form for copyright accruement. Or they would be ‘protectable’ under IP laws. The target would have taken some measures to protect some of its subject matters under IP laws. But it might not have even identified other subjects as protectable. It is for this reason that the first step of IP due diligence is identification of protected and protectable subject matter. Analysis of IP rights over the subject matter (status check): Once it is clear as to what subjects will be relevant for the transaction, the next requirement is to check the specific IP rights that have been accrued / registered in favour of or are required to be registered by the target. Not only it

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HOW TO GET YOUR RERA ORDER IMPLEMENTED? How to execute RERA order ? Real-estate Regulatory Authority of India (RERA) authorities in states like Uttar Pradesh, Maharashtra, Haryana, Madhya Pradesh, Rajasthan and Karnataka are disposing off a large number of consumer complaints. UP-RERA itself has disposed off around 5036 orders for the refund of funds and 7242 orders for the grant of possession and RERA’s efforts have brought transparency and accountability in the real estate sector and created an environment conducive for the healthy development of the sector out of 56000 complaints filed by the home buyers Maharashtra also as on May 3, 2023 has disposed off 14285 complaint, out of 21,274 and 6,989 is in the process of hearing. But these orders are not getting implemented as enforcement is a challenge. So, how can you get your RERA order implemented? Where real-estate company technically playing fraud with the home buyers and lots of home buyers cannot understand the game plan of the real-estate company at time of booking flat, getting earnest money and further at time of agreement to sale or balance transfer or sale deed with the banking financial institution under tripartite agreement. RERA PROVISIONS: A builder is given 45 days to execute a RERA order and comply with its direction. But in many cases the orders are not complied by the developer. In such cases, buyers can again approach the RERA authority for execution. As per section 40, the RERA authority has powers to get their orders executed. Clause 1 of this section lays down, “If a promoter or an allottee or a real estate agent fails to pay any interest or penalty or compensation imposed on him, it shall be recoverable from such promoter or allottee or real estate agent, in such a manner as may be prescribed as arrears of land revenue.” Clause (2) lays down that, “If any adjudicating officer or the regulatory authority or the appellate tribunal issues any order, then in case of failure by any person to comply with such order or direction, the same shall be enforced.” After final order of the RERA complaint, Buyers can file an execution complaint and authority can issue a Recovery Certificate (RC) to get the same implemented by the district magistrate. Buyers can approach team Preach Law & Co. in case their orders are not implemented, and we will take action accordingly. We give 45 days in case of refund but the same may vary depending on the case. In some instances, RERA orders are not getting implemented where either builder has no funds to refund or other similar instances, but in that case authority have the powers to ensure buyers get justice.” Buyers take the help of lawyers to send legal notice to the builder for enforcement of the RERA order, but this should be done before making an execution application to a RERA authority. RERA orders are getting implemented in Haryana as it has different recourse to get its order implemented. Any order, whether from authority or adjudicating officer, has a three-way process to award interest, compensation or penalty: Under section 40(1), authority can issue a recovery certificate and get the RERA order enforced. It is a very fast process; Under section 40(2) in Haryana, Rera authority also has the power of civil court, so authority orders are like a civil court decree. If within the given time-period the promoter or allottee does not pay, then a recovery certificate can be issued against the defaulting party. This is also applicable for allottees and not just builders. Haryana has received 6,000 complaints. Out of these around 2,000 complaints have been dismissed, another 2,000 have been disposed off, and another 2,000 are pending with us.” PENALTY FOR FAILURE TO COMPLY: Section 63 of Rera lays down stringent provisions for non-compliance of orders. It says, “If any promoter, who fails to comply with or contravenes any of the orders or directions of the authority, shall be liable to penalty for every day during which such default continues, which may cumulatively extend up to five percent of the estimated cost of the real estate project, as determined by the authority.” Failing to comply with the order of the Rera Appellate Tribunal is a punishable offence which can lead to imprisonment up to three years or fine which may extend up to ten percent of the cost of the real estate project, as per section 64 of the Rera Act. Buyers can approach Rera authorities for getting their orders implemented in case of failure by the developer. There are provisions in the law to punish whoever fails to comply with the Rera authority orders. Written By : Krishna Kumar Mishra Previous PostNext Post


Fast Track Recovery under Civil Procedure Code

Fast track money recovery u/o XXXVII CPC Summary Suit – Under Order XXXVII of CPC 1908 The Code of Civil Procedure (CPC) is a procedural law that governs the legal process of civil cases in India. One of the provisions under the CPC is Order XXXVII, which deals with summary suits. A summary suit is a legal proceeding that allows a plaintiff to obtain a quick and summary judgment against the defendant.  “Order XXXVII of the CPC provides a fast-track legal mechanism for the recovery of money based on Written Contract, Bills of Exchange, Promissory Notes, and Similar Documents. It applies to certain courts including High Courts, City Civil Courts, Courts of Small Causes, and others as specified by the High Court.”. Filing of Summary Suits “Under Rule 2 of Order XXXVII, a summary suit can be instituted by presenting a plaint with specific averments that the suit is filed under this Order. The defendant is required to enter an appearance and is deemed to admit the allegations if he fails to do so. The plaintiff is entitled to a decree for the amount claimed if the defendant does not enter an appearance or fails to get leave to defend.” Procedure for Defendant’s Appearance “Rule 3 outlines the procedure for the defendant’s appearance in a summary suit. The defendant must be served with a copy of the plaint and has ten days to enter an appearance. If the defendant enters an appearance, the plaintiff must serve a summons for judgment. The defendant may apply for leave to defend the suit by disclosing facts that may be deemed sufficient to entitle him to defend.” In this blog post, we will discuss the key features of summary suits, the procedure for filing a summary suit, and the advantages and disadvantages of using a summary suit. Key features of summery suit: A summary suit is a legal action that can be taken in cases where the plaintiff has a clear and undisputed claim against the defendant. The following are the key features of summary suits: Quick disposal: A summary suit is a fast track legal proceeding, and is designed to dispose of cases quickly and efficiently. Expedited hearing: The court is required to expedite the hearing of the case, and must conclude the trial within limited time. No trial: In a summary suit, there is no full-fledged trial. Instead, the case is decided based on the pleadings and evidencesubmitted by the parties. No appeals: The decision of the court in a summary suit is final, and there is no right of appeal. However, the defendant may apply for a review of the judgment if there is an error apparent on the face of the record. Procedure for filing a summary suit To file a summary suit, the plaintiff must follow the procedure prescribed in Order XXXVII of the CPC. The following are the key steps involved in filing a summary suit: The plaintiff files a summary suit petition in the appropriate court. The petition must contain all the necessary details of the claim, including the nature of the claim, the amount claimed, and the grounds for the claim. The court will then examine the petition and decide whether the claim is a debt or a liquidated demand that arises out of a written contract, an enactment, or a guarantee. If the court is satisfied that the claim falls within this category, it will issue a summons to the defendant. The defendant must file a written statement within ten days from the date of service of the summons. The defendant must raise all their defences in the written statement, failing which they will be deemed to have admitted the plaintiff’s claim. After the written statement is filed, the court will proceed to examine the case and decide whether to grant or dismiss the summary suit. If the court finds that there is a genuine dispute, it will dismiss the summary suit and order the plaintiff to file a regular suit. If the court finds that there is no genuine dispute, it will pass a summary decree in favour of the plaintiff. Disadvantage of Summery suit: Limited scope: Summary suits are only applicable in cases where the plaintiff has a clear and undisputed claim against the defendant. No full-fledged trial: In a summary suit, there is no full-fledged trial, and the case is decided based on the pleadings and evidence submitted by the parties. Written By : Krishna Kumar Mishra Previous PostNext Post

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How to get NITI Aayog Registration Certificate ?

How to register NGO/NPO under NITI Ayog/Dapran Why NITI Aayog / Darpan Registration is Required? Registration under NITI Aayog: Now all Voluntary Organization/Non-Government Organization/Non-Profit Organization are mandatory to register under Niti Aayog / Darpan for receiving grants under various schemes of Ministries/ Departments/Government Bodies. To achieve the purpose of easy of doing business and other social benefits that contributes to the nation building activities, a dedicated Centralized Portal is made available to NGO in which they can easily enroll with Government and altogether centralized database is available with Government of India which helps them in Formation of Social welfare activities, which can be run through these NGO. Non-government Organization (NGO) are defined in three ways: Registered under Society Act Registered under Trust Act Registered under Section 8 of Company Act Who are eligible to Get Register under NITI Aayog? Any NGO which is registered as a trust/ society/ a private limited nonprofit company, under section 8 Company of the Indian Companies Act are eligible to get Registered under Niti Aayog. Whether an Individual can register under NITI Aayog? As per policy of Government of India, now Individual (person) cannot Registered himself under NITI Ayog.  What are benefits of Getting Registered under NITI Aayog: NITI Ayog/Darpan Registration is Mandatory for All NGO/ NPO as specified above, to get enrolled themselves on NITI Aayog site and get Unique Id before getting any grant from Government Departments. Ensures Transparency Become Eligible to get funding from the Government Get Assistance from the Government Stay Up-to-Date of Government Schemes Become an Authenticate NGO Access the databases of all currently active as well as the blacklisted NGOs  What is process for NITI Aayog Registration? Contact us we will help you out to get a NITI Ayog registration for your NGO. Provide Name of NGO Contact Person Mobile Number and Contact Person Mail Id. Provide Security Code sent by team during filing NITI Ayog registration. That Provide PAN Detail of NGO You will receive OTP on Your given Mobile Number and Mail id. After verification of OTP, now generate Password for further Login Purpose. Our team will fill complete application form and list of members and authorized persons. Now provide following details to proceed further. NGO Address NGO/NPO Registration authority (Under which act NGO is registered) Provide Registration Number and Upload RC Copy for Verification Purpose. Act Name and Date of Registration under this Act All other registration details, if registered Like. FCRA Registration, GST Registration Atleast 3 Members detail of Executive Committee/ Founder Members/ Office Bearers as on date of Application. Details of all Sources of Funds, received from Government bodies in Last 5 years. Detail of Key Person, who can be contacted in case of any Query. Details relating to NGO Core area of Working with state detail. This is critical part because, you will receive grant from Government Departments according to their working area. Thereafter, once form shall be submit successfully we will provide Unique Id, which will be used in Future for all correspondence purpose with Government. Written By : Krishna Kumar Mishra Previous PostNext Post

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Alcoholic Business in India

How to Establish Alcoholic Business in India Start a Alcohol Export Business in India? Setting up a business in India is very tough task in respect to alcoholic business either it is related to domestic or international. Generally, alcoholic business is considered a challenge and same is normally in hand of political leader or business tycoon. But, when you know the right facts, it is not difficult to keep the necessary documents and work according to the defined procedures. Under this article, we at Preach Law & Co. will cover the details of alcohol export compliance for setting up business in India in the context of alcohol/liquor beverages export and trade.  We have expert team for this industry and as per experience we will give details of the treatment of excise duty for export and trade of alcoholic beverages in India. A license or permit from concern department is necessary to start liquor business, either it is related to the manufacturing or trade. A profitable alcohol export business plan in India has a good picture at the market for international trade, and this is why many food and beverage industry includes restaurants, cafeterias, cafés, fast-food joints, pubs, delis, food manufacturing operations, catering businesses, food transportation services, hotels and more International brands are interested in understanding alcohol import compliance to set up a business in India. An export-import business, also known as international trade, which is the exchange of capital, goods, or services across international borders or territories. The Government of India occasionally has amends the formalities and procedures for establishing an export/import business in India. Advantages (IEC) Import Export Code: Registration in India Particulars Required To Register Alcohol Export Business 1. Profitable Alcohol Export Business Plan 2. Particulars Required to Register Alcohol Export Business 2.1. Company Registration 2.2. GST Registration 2.3. Import Export Code IEC) 2.4. Liquor License 2.5. Trade license 2.6. ESI Registration 2.7. EPF Registration 2.8. Trademark Registration 3. Procedure to Start Alcohol Export Business 3.1. Application to the Commissioner 3.2. Authorization to Export 3.3. Time Limit 3.4. Bond Discharge 3.5. Particulars to be Mentioned on the Container 4. A license or permit from of alcohol outside the country. Company Registration To start a profitable alcohol export business in India: First of all, you have to proof your ownership by registering a company. If you have decided to start alcohol export business as a one-Person company, you must register your company as a one person company. For partnership business, you must register as a LLP or Partnership Firm. Ltd. company. Once you register a company, you have to open a current bank account on your company name GST Registration After the company registration you must apply for GST registration and obtain a GST no. to perform the business activities. Import Export Code IEC To alcohol export in other countries you have to obtain Import Export Code IEC from the concerned department.  How To Get An IEC With DGFT With Branch Code? Import Export Code is mandatory for the movements of goods from outside the India. No person or company shall do any import or export without the IEC code, which can be obtained from the Director-General of Foreign Trade within the jurisdiction office of the company. Without IEC code, movement of goods from the country is not permitted. Listed below documents are required to Get IEC code, which are as follows:- Bank receipt/demand draft against application fee Application form in prescribed format issued by DGFT for issue of Import Export Code number Please attest the application for IEC with the bank records where you have opened current account in the name of firm to operate export import activities.  A license or permit from, of alcohol outside the country. Self attested copy of Permanent Account Number-PAN issued by income tax authorities. Passport size photographs of the applicant. If any partner or partners are non-resident interest or holding in the firm or company exists with repatriation benefits, you need to attach a self certified copy of Reserve Bank of India approval on the same. Liquor License To start alcohol export business in India, individual must obtain the Liquor license. Particulars Required For Liquor License Identity proof of applicant’s Resident proof of applicant Proof of address of principle place of business No Objection Certificate from the concerned State fire department and Municipal Corporation Filled Application form MoA and AoA of companies, if applicable Latest ITR copy Passport size photograph of applicant Affidavit declaring that applicant has no criminal history. Trade License Get a Trade license from the local authorities to perform the business activities ESI Registration Employees State Insurance which is an insurance scheme for workers working under your manufacturing unit. If you are manufacturing alcohol, in that case it is mandatory to obtain ESI registration. EPF Registration Employee’s provident fund is compulsory for business where more than 20 employees are working. Trademark Registration Register your brand name with a trademark that will protect your brand globally Procedure To Start Alcohol Export Business The export regulations prescribe the groundwork related to duties, permissions and other laws governing export transactions. Since alcohol is a subject in the state list under the 7 Schedule of the Indian Constitution, export regulations, especially duties & tariffs may vary from state to state. Listed below are the steps to be followed to export alcohol outside the country.  Application To The Commissioner. A license or permit from, of alcohol outside the country. Any producer or dealer who wishes to export alcohol must submit an application to the Commissioner. This application should specify the following items, which are as follows:- Name of consignor Consignee name Description, quantity and potency of each type of alcohol exported Export route and check post on exit from state or country. A license or permit from the appropriate excise duty of the state or union territory in which the alcohol is to be exported, which authorizes the import of alcohol outside the country. A reference to a duly executed special bond or

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