ECONOMIC & LABOUR LAWS
Q.1 With reference to the relevant legal enactments, write short notes :
(i) Exempted Categories under the Importer-Exporter Code (IEC) Number:
1. Importers covered by Clause 3(1) and exporters covered by Clause 3(2) of Foreign Trade (Exemption from application of Rules in certain cases) Order, 1993.
2. Ministries/Departments of the Central or State Government.
3. For personal use not connected with trade or manufacture or agriculture.
4. Export or Import from/to Nepal and Myanmar provided the CIF value of a single consignment does not exceed Indian Rs.25,000/-
Conclusion: However, the exemption for obtaining IEC is not applicable for the export of Special Chemicals, Organisms, Materials, Equipments and Technologies (SCOMET) except in the case of exports by Ministeries/Departments of the Central/State Government.
(ii) Know Your Customer (KYC) Guidelines:
RBI issued guidelines on KYC Standards – Anti Money Laundering (AML) Measures. It enables the banks to know and understand their customer and their financial dealings to be able to serve them better and manage its risks prudently. It also prevents banks from being used to launder money.
Need for KYC arises:
(i) To establish the identity of the client and
(ii) Verifying identity by using reliable source of document for joint-holders/individuals as well and for non-individuals – verify their legal status, identity of authorized signatories, identity of beneficial owners and controllers.
Four key elements of KYC Policy:
1. Customer Acceptance.
2. Customer Identification Procedures.
3. Monitoring of Transactions.
4. Risk Management.
(iii) Anti-competitive Agreements: Section 3(1) of the Competition Act, 2002, provides that no enterprise or association of enterprises or person or association of persons shall enter into any agreement in respect of production, supply, distribution, storage, acquisition or control of goods or provision of services, which cases or is likely to cause an appreciable adverse affect on competition. Section 3(2) of the Competition Act, 2002, declares that any anti competitive agreement within the meaning of sub-section 3(1) shall be void.
The position under the MRTP Act is distinct as only restrictive clauses of agreements are dubbed as void instead of the whole agreement as such.
Section 3(3) provides that following kinds of agreements entered into between enterprise or association of enterprises or person or association of persons including “cartels”, engaged in identical or similar goods or services which:
1. determining trade prices;
2. limits/controls production, supply, markets, investment/provision of services;
3. share market or source of provision of services by way of allocation of geographical area of market; and
4. results in bid rigging or collusive bidding.
Shall be presumed to have an appreciable adverse effect on the competition and onus to prove otherwise lies on the defendant.
Section 3(4) of the Competition Act, 2002 provides that any agreement including:
1. tie-in agreement;
2. exclusive supply agreement;
3. exclusive distribution agreement;
4. refusal to deal;
5. resale price maintenance.
Shall be an agreement in contravention of sub-section (1) if such agreement causes or is likely to cause an appreciable adverse effect on competition.
(iv) Minimum Resale Price Maintenance: (mrpm)
Resale price maintenance is a restrictive trade practice under clause (f) of Section 33(1) of the MRTP Act, 1969 and accordingly any agreement containing any clause stipulating resale price maintenance is registrable.
Resale price maintenance is a form of price fixing and the practice whereby a manufacturer sets the price at which a retail shop, which he does not own, must resell his products to the public, or to a wholesale business, he does not own must resell that product to retailers, is termed as resale price maintenance.
When RPM is enforced, the price of goods becomes uniform at all points.
However, mrpm is prohibited u/s 39 and 40 of the Act.
Section 39(1) provides that any condition of a contract for the sale of goods by a person to a wholesaler or retailer or any agreement between wholesaler or retailer relating to such sale shall be void in so far as it purports to establish for the establishment of minimum prices to be charged on resale of goods.
It is only that portion in the agreement which contains provisions for minimum resale price maintenance which would be void and the rest of the agreement would not be effected by this provision.
Not only it is statutorily declared void and unenforceable at law, it also gives rise to criminal liabilities and is punishable with imprisonment or fine or both u/s 51 of the Act. It covers only sale of goods under the Sales of Goods Act.
(v) Contents of Complete Specification: Every complete specification is required to:
(a) fully and particularly describe the invention and its operation or use and the method by which it is to be performed;
(b) disclose the best method of performing the invention which is known to the applicant and for which he is entitled to claim protection;
(c) end with a claim or claims defining the scope of the invention for which protection is claimed; and
(d) be accompanied by an abstract to provide technical information on invention.
(vi) Principal Display Panel:
Principal display panel has been defined under Section 2(w) which means the total surface area of the Package, where the information is required to be given. Rule 7 specifies the area, size letter, etc., of the principal display panel in different cases.
Q.2 Distinguish between the following: [June 2009, 5x3 = 15]
Seizure
Confiscation
It is an initial step and a precautionary measure. Ownership of the property in goods whether as essential commodity, packing, vehicle, etc., remains with the owner and only physical possession is taken over which can be done only after an Order and following principles of natural justice by Authorities and may be returned. It is a quasi judicial process as ownership of the property and physical possession in goods whether as essential commodity, packing, vehicle, etc., is taken away which can be done only after and Order and following principles of natural justice.
Confiscation of essential commodities is a sharp weapon which the Act has provided to the Central Government u/s 6A of the Act.
On confiscation, Government can dispose the goods.
Order can be appealed within 1 month to State Government Authority.
COB License
Industrial License
…is required when a SSI exceeds the prescribed investment in plant and machinery by way of natural growth and continues to manufacture small scale reserved items.
Also, if exemption from industrial licensing granted for any item is withdrawn, the industrial undertakings manufacturing such items required COB license.
An application to SIA, Dept. of Industrial Policy and Promotion alongwith a crossed DD of Rs.2,500/- to be submitted …is a written permission from the Government to an industrial undertaking to manufacture specified articles listed in Schedule I and includes details like location and capacity etc.
Industrial license is required when:
1. For establishing New Undertaking.
2. For manufacturing New Articles in an Existing Undertaking.
3. For carrying on business without regtrtn.
4. For Carrying on business after the revocation of certificate of registration.
5. For Carrying on business by an industrial undertaking to which the act became applicable.
6. For change in location.
7. For effecting substantial expansion.
Invention
Patentable Invention
Section 2(j) defines invention as to mean a new product or process involving an inventive step and capable of industrial application. Section 2(l) defines term new invention as to mean any invention or technology which has not been anticipated by publication in any document or used in the country or elsewhere in the world before the date of filing of patent application with complete specification, i.e., the subject matter has not fallen into public domain or that it does not form part of the state of the art.
Q.3 Provisions- Trade Marks Act,1999 regarding infringement of registered trade marks. [Dec. 2008, 5x1 = 5]
Answer:
Infringement of Registered Trademarks (Section 29):
Registered trademark -- used by a person who is not entitled to use -- by law and infringed if:
1. Mark is identical and used in relation to similar goods or services.
2. Mark is similar to registered trademark and there is an identity or similarity of goods or services covered by the trademark.
3. Trademark is identical and is used in relation to identical goods and services and such use is likely to cause confusion on party of the public or likely to be taken to have association with registered Trademark.
Registered trademark -- used by a person -- deemed to be infringed if:
1. Mark not registered, if identical or similar to registered Trademark though used in relation to goods and services not similar to those for which trademark is registered.
2. If registered trademark has a reputation in India.
3. Use of trademark, without due course, would take unfair advantage or detrimental to the distinctive character or repute of registered trademark.
Q.4 Global initiatives in the prevention of money laundering.
Answer: [June 2009, 5x1 = 5]
Global Initiatives: The Vienna Convention also called the “United Nations Convention against Illicit Traffic in Narcotic Drugs & Psychotropic Substances, 1988” declared to criminalize money laundering by member states and established that domestic bank secrecy provisions should not interfere with international criminal investigations.
The creation of The Financial Action Task Force (FATF), 1989 set up by the G-7 countries and has representatives from 24 OECD countries. Its main task include:
1. Monitoring and reviewing members progress in applying counter-measures to Money Laundering.
2. Promoting adoption of measures by Non-member countries.
Recommendations of Financial Action Task Force (FATF):
1. Money Laundering – A criminal offence and extraditable offence.
2. Modalities of disclosure of Financial Institutions.
3. Confiscation of proceeds of crime.
4. Promoting International co-operation in investigation of Money Laundering.
Three Areas of United Nations Global Programme to combat Money Laundering:
(a) Technical co-operation by creating awareness, institution building and training.
(b) Research & Analysis to provide key information to devise efficient and effective countermeasures strategies.
(c) Establishment of Financial Investigation Services for law enforcement.
Q.5 The insured (since deceased) had taken out four life policies with double accident benefits, premium payable half-yearly.
When the third premium fell due, an agent of the insurer met the insured and took a bearer cheque towards the premium payable by him in respect of the policies.
Although, cheque was encashed immediately, it was not deposited with insurer for 3 months.
In the meantime, the insured met with a fatal accident and died.
The widow filed a claim for payment of the sum assured.
The insurer pleaded that the insurance agent had no implied authority to collect the premium. Will the widow succeed in her claim ? [June 2009, 5x1 = 5, June 2008, 5x1 = 5]
Answer: No Deficiency of Service on Part of LIC:
Dismissing the appeal, the Supreme Court held that the agent had no express authority to receive the premium on behalf of the Corporation.
** Regulation 8(4) expressly prohibited the agents from collecting premiums.
Therefore, no case had been setup by the complainant before the State Commission that the Corporation by its conduct had induced the policyholders including the insured, to believe that the agents were authorized to receive premiums on behalf of the Corporation. Nor was there any material on record that lent support to this contention. In the facts of this case, there was no room to invoke the doctrine of apparent authority underlying Section 237 of the Indian Contract Act.
Q.6 What are the restrictions on the acceptance of foreign contribution by organizations of political nature under Foreign Contributions (Regulation) Act, 1976 ? [June 2009, 5x1 = 5]
Mention the provisions of FCRA, 1976 -- Exemptions from accepting foreign contributions. [Dec. 2008, 5x1 = 5]
Destitutes Rehabilitation (India), an NGO devoted to the cause of ameliorating the lot of destitutes and the needy, has been offered a contribution of $5,000 by an American foundation. Mention the provisions of the Foreign Contribution (Regulation) Act, 1976 regulating the receipt of foreign contribution by an organisation pursuing a definite social, cultural, economic, educational or religious programme. [Dec. 2007, 5x1 = 5]
Aditya, a director of Amex Ltd., visited Germany thrice in 2005 on invitations and free air-tickets, board and lodging extended to Amex Ltd. by the Chamber of Commerce and Industry, Germany. Has Aditya or the company contravened the provisions of the Foreign Contribution (Regulation) Act, 1976 ? Mention relevant provisions. [June 2006, 5x1 = 5]
Answer:
Restrictions on Acceptance of FC by Organizations of Political Nature (S-5 of FCRA Act,76)
Cndn 1: The organization of a political nature as notified by Government,
not being a political party --
has to get the prior approval of the Central Government
before accepting Foreign Contribution.
Cndn 2: No person resident of India and person resident outside India
shall without prior approval of the Central Government:
Accept FC or acquire or
agree to acquire FC on behalf of any organization of a political nature, or
Deliver to any person who is likely to deliver Foreign Contribution to any organization of a political nature.
Examples of Organization of a Political Nature: Trade unions, student bodies/associations, RSS, Congress Seva-Dal, Jammat-e-Islami Hind and other as specified in Official Gazette.
Restrictions on Acceptance of FC by Cultural Organization (Section 6 of FCRA Act, 1976)
Cndn 1: Should not be of Political nature;
Cndn 2: Registered with Central Government, if not treat it as “offence”.
Cndn 3: Received only through specified branches or accounts of Bank.
Cndn 4: Maintain details of contributions, its source, manner of receipt and purpose for which it is utilized and send intimation of receipt of Foreign Contribution within 60 days of receiving.
Cndn 5: Prior permission of C.G. in Form FC-4 for unregistered associations.
Note: Candidate for Election receiving Foreign Contribution shall intimate at any time within 180 days before the date he is duly nominated – intimation to Central Government of amount, source, manner, etc.
Exemptions -- for Accepting Foreign Contributions (Section 4)
1. Salary, wages, payment in ordinary course of business by Foreign Source; or
2. Payment in course of International Trade/Commerce; or
3. Agent of Foreign Source w.r.t. transactions of Foreign Source with Government; or
4. Gift or presentation, as a member of delegation, if as per Central Government regulations; or
5. Foreign Contribution received from relative with prior permission from Central Government. No prior permission is required if maximum value is upto Rs.8000/- p.a. but intimation of amount, source, purpose and utilization of such amount to Secretary to Government of India, Ministry of Home Affairs, New Delhi.
6. Remittances received, in the ordinary course of business through any official channel as per FEMA (Section 8).
Foreign Hospitality:
Section 2(1)(d) provides that any offer made by a foreign source (not being a purely casual one) for providing a person with costs of travel to any foreign country or free boarding, lodging, transport or medical treatment.
Section 9 prohibits acceptance of foreign hospital by certain persons except with the prior permission of the Central Government.
Accordingly no member of a Legislature, Office bearer of a political party, Judge, Government Servant or Employee of a Corporation shall, while visiting any country outside India accept, without the prior permission of the Central Government any foreign hospitality.
However, it is not necessary to obtain any such permission for an emergent medical aid needed on account of sudden illness contracted during the visit outside India.
But where such hospitality has been received, the person who is receiving is under an obligation to intimate Central Government within 1 month from the date of receipt of such hospitality and the source and manner in which such hospital was received by him.
General exemption from seeking prior permission of C.G. for receiving Foreign Hospitality:
1. Members of delegation – Central Government sponsored.
2. Government servants/Corporation employees visiting in pursuance of a bilateral agreement subject to approval to Department of Economic Affairs and/or for attending training programmes.
Q.7 Write a note on regulatory framework for environmental protection in India.
Answer: [June 2009, 5x1 = 5]
In 1986, the Government enacted the Environment Protection Act to provide for the protection and improvement of environment and the prevention of hazards to human beings, other living creatures, plants and property.
Chapter III of the Act, comprising Sections 7 to 17 contains provisions for the prevention, control and abatement of environmental pollution.
1. Standards of Emission
2. Obligation to Furnish Information
3. Power to Enter, Inspect, Take Samples etc.
4. Environmental Laboratories
5. Offences and Penalties
6. Environmental Clearance and Location of Industries
7. Requirements and Procedure for seeking Environment Clearance for Projects
8. Environmental Audit
Conclusion: The National Environment Appellate Authority Act, 1997 was enacted which intends to hear appeals with respect to restriction of areas in which any industries, operations or processes shall not be carried out or shall be carried out subject to certain safeguards under the Environment (Protection) Act, 1986.
Q.8 Write notes on the following:
(i) Dependent: Section 2(6A) of ESI Act, 1948, dependent means the following relatives of a deceased insured person namely:
(a) A widow, a minor, an unmarried daughter, a widowed mother;
(b) A legitimate or adopted son or daughter, if wholly dependent on the insured person at the time of his death, who has attained the age of 18 years;
(c) If wholly or partly dependent on the earnings of the insured person at the time of his death:
1. a parent other than a widowed mother;
2. a minor illegitimate son, an unmarried illegitimate daughter;
3. a minor brother or an unmarried sister or a widowed sister if a minor;
4. a widowed daughter-in-law;
5. a minor child of a pre-deceased son;
6. a minor child of a pre-deceased daughter where no parent of the child is alive;
7. a paternal gland parent if no parent of the insured person is alive.
(ii) Procedure for Fixing and Revising Minimum Wages as per Section 5 of Minimum Wages Act, 1948:
First Method as per Section 5(1)(a) Second Method as per Section 5(1)(b)
This method is known as ‘Committee method’. The appropriate Government may appoint as many committees as it considers necessary to hold enquiries and advise it in respect of such fixation or revision as the case may be. After considering the advice, the Government shall by notification in the Official Gazette fix or revise the minimum rates of wages which shall come into force from such date and if no date is specified, wage rates shall come into force on the expiry of 3 months from the date of issue of such notification. This method is known as ‘Notification method’. When fixing minimum wages under Section 5(1)(b), the appropriate Government shall by notification in the Official Gazette publish its proposals for the information of persons likely to be effected and specify a date not less than 2 months from the date of notification. The Government consider the representations received and also consult the Advisory Board constituted under Section 7 and thereafter fix or revise the minimum rates of wages by notification in the Official Gazette. Minimum wage rates can be revised with retrospective effect.
(iii) Scope and Applicability of the Payment of Bonus Act, 1965:
1. Factory having 10 or more employees with the aid of power.
2. Other establishments having 20 or more employees, in case of other profit-making establishments.
Note: If less than 20 employees, minimum 2 months notice to be given in Official Gazette by Appropriate Government to bring it under the purview of the Act.
3. Public Sector Establishment (in which 40% or more of paid-up share capital is held by Government/RBI/Corporation & Government Company), only if its in competition with Private sector and income out of competition is 20% or more of Gross Income for that year.
(iv) Obligations of the Principal Employer: If the prescribed amenities like canteens, rest rooms and other facilities, first aid box are not provided by the contractor within the prescribed time, then such amenities shall be provided by the principal employer within such time as may be specified. According to Section 20(2), all expenses incurred by the principal employer in providing the amenity may be recovered by him from contractor. Thus every Principal Employer should ensure that the employment of contract labourer is registered under the Act irrespective of the fact Contract labourers are hired with or without his knowledge.
Duties of Principal Employer:
(a) Main register of contractors.
(b) Ensure health, safety and welfare of contract labourers.
(c) Provide amenities if contractor fails to do so and recover the same from the Contractor.
(v) Retrenchment under the Industrial Disputes Act, 1947: Retrenchment means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include:
(a) Voluntary retirement of the workman; or
(b) Retirement of the workman on reaching the age of superannuation, if contract of employment contains a stipulation in that behalf; or
(c) Termination of the service of the workman as a result of non-renewal of contract of employment; or
(d) Termination of service of the workman on the ground of continued ill-health.
Section 2(oo) defines retrenchment as “to end, conclude or cease”.
(a) Discharge of surplus labour/staff by employer;
(b) On LIFO basis and preference to retrenched employees in case of fresh appointments.
Note: 1. Retrenchment of employees in continuous service for 1 year or more requires 1
month notice or 1 month salary along with compensation.
2. Retrenchment of more than 100 workmen requires prior approval of Central Govt.
Principles laid down by the Supreme Court with regard to retrenchment: The retrenchment should be bona fide and there should no victimization or unfair labour practice on the part of the employer. The following principles laid down in (Case Law: Workmen of Subong Tea Estate vs. Subong Tea Estate)
1. The management can retrench its employees only for proper reasons.
2. It is for the management to decide the strength of its labour force and the number of workmen required.
3. Management can retrench its employees if number of employees exceeds the reasonable and legitimate needs of the undertaking.
4. Workmen may become surplus on the ground of rationalization or on the group of economy reasonably.
5. When there is a dispute in regard to the validity of the retrenchment, it would be necessary for the tribunal to consider whether the impugned retrenchment was justified for proper reasons.
(vi) Occupier under the Factories Act, 1948: Section 2(n) defines the term “Occupier” as a person who has ultimate control over the affairs of the factory and includes a Partner (if partnership firm), a Director (if company), any person appointed to manage affairs in a Government company.
General duties of an ‘Occupier’:
1. Every occupier shall ensure health, safety and welfare of all workers.
2. Provisions of sub-section (1) include:
(a) Maintenance of plant and systems to ensure safety and without risks.
(b) Use, handling, storage and transport of articles and substance to ensure safety and without risks.
(c) Maintenance of all place of work to ensure safety and without risks.
(d) Monitoring working environment in the factor to ensure safety and without risks.
Q.9 Distinguish between the following:
(i) ‘Lay-off’ and ‘lock-out’ under the Industrial Disputes Act, 1947.
(iii) ‘Young person’ and ‘adult’ under the Factories Act, 1948.
Answer: [June 2009, 5x3 = 15]
(i) Lay-off: Lay-off means the failure, refusal or inability of an employer to give employment due to the following reasons to a workman who has not been retrenched:
(a) Shortage of coal, power or raw materials;
(b) Accumulation of stocks;
(c) Break-down of machinery;
(d) Natural calamity;
(e) For any other connected reason as per Section 2(kkk)
Lock-out: Lock-out means the temporary closing the place of employment or suspension of work, or the refusal by employer to continue to employ any number of persons employed by him as per Section 2(l).
Differences between Lay-off and Lock-out:
1. In lay-off, the employer refuses to give employment due to reasons specified in Section 2(kkk) whereas in lock-out, there is deliberate closure of the business and employer locks out the workers not due to any such reasons.
2. In lay-off, the business continues, whereas in lock-out, the place of business is closed down for the time being.
3. In a lock-out, there is no question of any wages or compensation being paid unless the lock-out is held to be unjustified.
4. Lay-off is the result of trade reasons whereas lock-out is a weapon of collective bargaining.
5. Lock-out is subject to certain restrictions and penalties but it is not in case of lay-off.
(ii) ‘Arbitration’ and ‘adjudication’ of disputes under the Industrial Disputes Act, 1947.
Adjudication as a method of resolution of industrial disputes. [June 2007, 5x1 = 5]
(ii) Arbitration (Court of Inquiry under Section 6):
(a) An adhoc body appointed by appropriate Government by Notification in Official Gazette.
(b) A fact-finding machinery only for matters referred by appropriate Govt.
(c) It has to report within 6 months of commencement and has to publish the report within 30 days of receipt.
Voluntary reference of disputes to Arbitration under Section 10A:
1. Where any industrial dispute exists and the same has not yet been referred for adjudication to Labour Court, Tribunal or National Tribunal, then by a written agreement between the employer and worker be referred to arbitration.
2. The arbitration agreement shall be signed and shall be made in such form and manner as prescribed.
3. A copy of the Arbitration agreement shall be forwarded to the appropriate Government within 1 month from date of such receipt and shall within 1 month publish in the Official Gazette.
4. The Arbitrator shall investigate and submit appropriate award signed by him.
Adjudication: The disputes are ordinarily referred to adjudication on request only when conciliation efforts fail in the following cases:
1. Illegal/irregular strike/lock-out.
2. Res sub judice or any other legal remedy not available.
3. Whereas in case of individual ID, when legality/propriety action is questioned and there is victimization.
4. Unfair labour practice as per Schedule V;
5. Violation of Standing Order in force.
6. Principles of natural justice not followed.
7. Conciliation machinery reports injustice.
Types of Industrial Adjudication:
(a) Compulsory Adjudication on reference by Government to Boards/Court/Tribunal as per Schedule II or III or National Importance.
(b) Optional Adjudication on voluntary reference by workmen/employer in writing. Remedies under Section 10 or 10A of ID Act.
(c) Adjudication of a claim by Workman if entitled to money/benefit.
Three Tire Structure are entrusted with duties to hold adjudication proceedings expeditiously and to submit “award” as soon as practicable:
Labour Courts as per Section 7.
Industrial Tribunal as per Section 7A and
National Tribunal as per Section 7B
(iii) Adult: Adult has been defined in Section 2(a) means a person who has completed his 18th year of age.
Adolescent: Adolescent has been defined in Section 2(b) means a person who has completed his 15th year of age but has not completed his 18th year.
Young Person: Young person has been defined in Section 2(d) means a person who is either a child or an adolescent.
Q.10 With reference to the relevant legal enactments write short notes on the following:
(i) Delayed payments to micro and macro enterprises
(ii) Star Export Houses
(iii) Salient features of the Special Economic Zones Act, 2005
Write a short note on ‘special economic zones’ (SEZs). [Dec. 2006, 3x1 = 3]
Explain the concept of ‘special economic zone’ (SEZ). [June 2007, 5x1 = 5]
(iv) Legal metrology
(v) Well-known trade mark
(vi) Competition policy [Dec. 2008, 3x7 = 28]
Answer: [June 2008, 3x1 = 6] [Dec. 2007, 3x1 = 3]
(i) Delayed Payments to Micro and Macro Enterprises: Section 15 of the Micro, Small and Medium Enterprises Development Act, 2006 provides that where any supplier, supplies any goods or renders any services to any buyer, the buyer shall make payment on or before the appointed day (which is the day following immediately after the expiry of a period of 15 days from the date of acceptance/deemed acceptance). However, in no case the period agreed upon between the supplier and the buyer in writing should exceed 45 days from the day of acceptance. Section 16 provides that in case the buyer fails to make payment of the amount to the supplier, the buyer should pay compound interest with monthly rests to the supplier on the amount from the appointed day at 3 times of the bank rate notified by the RBI. In case of any dispute regarding payment of any amount, Section 18 entitles the parties of the dispute to make a reference to the Micro and Small Enterprises Facilitation Council.
(ii) Star Export Houses: The Foreign Trade Policy provides that Merchant as well as Manufacturer Exporters, Service Providers, Export Oriented Units (EOUs) and Units located in SEZs, Agri Export Zone (AEZ’s), Electronic Hardware Technoloogy Parks (EHTPs), Software Technology Parks (STPs) and Bio-Technology Parks (BTPs) shall be eligible for applying for status as Star Export Houses.
A Star Export House is eligible for the following facilities:
1. License/Certificate/Permissions etc., on self-declaration basis.
2. Fixation of Standard Input Output Norms (SION) within 60 days.
3. Exemption from compulsory negotiation of documents through banks.
4. 100% retention of foreign exchange in EEFC A/c.
5. Enhancement to Advance Authorisation for annual requirements.
6. Priority long term finance can be availed.
7. Letter of Undertaking (LOU) instead of Bank Guarantee.
8. 360 days normal repatriation period.
9. Two start export houses as per the Guidelines specified by Dept. of Revenue.
10. Additional facilities for fast clearances.
(iii) Salient Features of the Special Economic Zones Act, 2005:
1. Matters relating to establishment of SEZ and for setting up of units therein, including requirements, obligations and entitlements;
2. Matters relating to requirements for setting up of off-shore banking units and units in International Financial Service Center in SEZ.
3. The fiscal regime for developers of SEZs and units setup therein.
4. Single window clearance mechanism at the Zone level.
5. Establishment of an authority for each SEZ set up by the Central Government to impart greater administrative autonomy; and
6. Designation of special courts and single enforcement agency to ensure speedy trial and investigation of notified offences committed in SEZs.
(iv) Legal Metrology: Legal Metrology is the name by which the law relating to weights and measures is known in international parlance. Legal metrology can be defined as that part of metrology which deals with units of measurement, methods of measurement and measuring instruments in so far as they concern statutory, technical and legal requirements which have the ultimate object of assuring public guarantee from the point of view of security and of appropriate accuracy of measurements. The coverage of legal metrology varies from country to country.
(v) Well-known Trademark: In terms of Section 2(1)(zg) of the Trademarks Act, 1999, a well known trade mark in relation to any goods or services means a mark which has become so to the substantial segment of the public which uses such goods or services such that the use of such mark in relation to other goods or services would be likely to be taken as indicating a connection in the course of trade or rendering of services between those goods or services and a person using the mark in relation to the first-mentioned goods or services.
(vi) Competition Policy: The basic purpose of Competition Policy is to preserve and promote competition as a means of ensuring efficient allocation of resources in an economy. Competition policy typically has two elements: one is a set of policies that enhance competition in local and national markets. The second element is legislation designed to prevent anti-competitive business practices with minimal Government intervention i.e., a competition law. Competition law by itself cannot produce or ensure competition in the market unless this is facilitated by appropriate Government policies. On the other hand, Government policies without a law to enforce such policies and prevent competition malpractices would also be incomplete.
Q.11 Distinguish between the following:
(i) ‘Relevant geographic market’ and ‘relevant product market’.
‘Relevant market’ and ‘relevant geographic market’ under the Competition Act, 2002. [Dec. 2008, 5x1 = 5]
(ii) ‘Small scale industrial undertaking and ‘ancillary industrial undertaking’.
‘Small scale undertaking’ and ‘ancillary industrial undertaking’.
[Dec. 2007, 5x1 = 5]
(iii) ‘Current account transactions’ and ‘capital account transactions’.
Current account transactions. [Dec. 2007, 3x1 = 3]
[Dec. 2008, 5x3 = 15]
Answer:
(i) Relevant Market (Section 2(r)): It means the market, which may be determined by the Commission with reference to ‘relevant geographic market’ or ‘relevant product market’ with reference to both the markets.
Relevant Geographic Market (Section 2(s)): It means a market comprising the area in which the conditions of competition for supply of goods or provision of services or demand of goods or services are distinctly homogeneous and can be distinguished from conditions prevailing in neighbouring areas.
Relevant Product Market (Section 2(t)): It means a market comprising of all those products or services which are regarded as interchangeable or substitutable by the consumer, by reasons of characteristics of products or services, their prices and intended use.
(ii) Small Scale Industrial Undertaking: An industrial undertaking in which the investment in fixed assets in plant and machinery, whether held on ownership terms or on lease or on hire purchase, does not exceed Rs.1 Crore.
Ancillary Industrial Undertaking: An industrial undertaking which is engaged in manufacture of parts, components, sub-assemblies, tooling or intermediates, rendering of services and undertaking supplies or renders not more than 50% of its production or services to one or more other industrial undertaking (SSI) and whose investment in fixed assets in plant and machinery, does not exceed Rs.1 Crore.
An Ancillary industry should allocate minimum 50% of their production to be given to parent industry and balance to be supplied to SSI.
(iii) Capital A/c Transactions: Capital account transaction has been defined under Section 2(e) of the FEMA, 1999 to mean any transaction which alters the assets or liabilities, outside India of persons resident in India or assets or liabilities in India of person resident outside India and includes the transactions specified in Section 6(3) of the Act and includes following transactions by person resident in India or persons resident outside India:
(a) Transfer or issue of security or foreign security by prescribed persons;
(b) Borrowing or lending of foreign exchange or rupees or deposits;
(c) Export or import or holding of currency or currency notes;
(d) Dealing in immovable property (also leased for more than 5 years).
Current A/c Transactions: Current account transaction has been defined under Section 2(j) of the FEMA, 1999 to mean a transaction other than a capital account transaction and includes:
(a) Payment for foreign trade, other current business, services and short term facilities in the ordinary course of business;
(b) Payments for interest on loan and as income from investment;
(c) Remittances abroad for living expenses and expenses for foreign travel, education and medical care of parents, spouse and children.
Q.12 State the provisions of the Environment (Protection) Act, 1986 relating to the offences by companies. [Dec. 2008, 5x1 = 5]
Answer: [June 2007, 5x1 = 5]
Offences by Companies: Section 16 of the Environment (Protection) Act, 1986 deals with offences by the companies and provides that where any offence has been committed by a company, every person who, at the time the offence was committed, was directly in charge of, and was responsible to, the company for the conduct of the business of the company, and the company itself, shall be deemed to be guilty of the offence and shall be liable to be proceeded against. When an offence has been committed by a company, and it is proved that the offence was committed with the consent or connivance of any director, manager, secretary or other officer of the company, such director, manager, secretary or other officers shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Q.13 Write notes on the following :
(i) ‘Employment injury’ under the Employees’ State Insurance Act, 1948.
Bahadur, an employee deputed by the management to participate in a football match, met with an accident resulting in his death while on his way to the playground. Is it an ‘employment injury’ under the Employees’ State Insurance Act, 1948 ? [June 2007, 3x1 = 3]
(ii) ‘Prohibition of employment of contract labour’ under the Contract Labour (Regulation and Abolition) Act, 1970.
(iii) ‘Philosophy’ behind the enactment of the Minimum Wages Act, 1948.
(iv) ‘Manufacturing process’ under the Factories Act, 1948.
Ghee brought from various customers is sampled chemically, analysed and packed in tins for transportation to the head office of the company for sale in the market. Does it amount to manufacturing process under the Factories Act, 1948 ? [June 2009, 4x1 = 4]
A small-scale establishment uses materials, like sleepers, bolts, nuts, etc., for supply to the railway department for laying tracks. Is the establishment carrying on ‘manufacturing process’ ? [Dec. 2006, 3x1 = 3]
(v) Matters within the jurisdiction of industrial tribunals constituted under the Industrial Disputes Act, 1947.
(vi) Tests for determination of ‘industry’ under the Industrial Disputes Act 1947.
Answer: [Dec. 2008, 5x6 = 30]
(i) Employment Injury under ESI Act, 1948: Employment injury under Section 2(8) of the ESI Act, 1948 means “a personal injury to an employee caused by accident or an occupational disease arising out of and in the course of his employment, being an insurable employment, whether the accident occurs or the occupational diseases is contracted within or outside the territorial limits of India”. There should be a nexus between the circumstances of the accident and the employment. Therefore, each case has to be decided on its own facts. It is sufficient if it is proved, that the injury to the employee was caused by an accident arising out of and in the course of employment no matter when and where it occurred.
Note: Mere road accident on a public road while employee was on his way to place of employment cannot be said to have its origin in his employment in the factor. (Case Law: ESIC vs. Francis De Costa).
(ii) Prohibition of Employment of Contract Labour: Section 10(2) of the Contract Labour (Regulation and Abolition) Act, 1970 empowers the appropriate Government to prohibit employment of contract labour in any process, operation or other work in any establishment by issuing a notification in the Official Gazette. However, the Government shall consult the Central Board or State Board before issuing any notification under Section 10 in relation to an establishment, the appropriate Government shall regard to the conditions of work and benefits provided for the contract labour in that establishment and other relevant factors such as:
Cndn 1: whether process, operation or other work incidental or necessary for the industry, trade, business, manufacture or occupation that is carried on in the establishment;
Cndn 2: whether it is of perennial nature;
Cndn 3: whether it is done through regular workmen in similar establishment;
Cndn 4: whether it is sufficient to employ considerable no. of whole time workmen
(iii) Minimum Wages Act, 1948: The philosophy of the Minimum Wages Act and its significance in the context of conditions in India, has been explained by the Supreme Court in Unichoyi vs. State of Kerala as follows:
“Minimum Wages Act purports to achieve is to prevent exploitation of labour and for that purpose empowers the appropriate Government to take steps to prescribe minimum rates of wages in the scheduled industries. The policy of the Act is to prevent the employment of such sweated labour in the interest of general public and so in prescribing the minimum rates, the capacity of the employer need not to be considered. What is being prescribed is minimum wage rates which a welfare state assumes every employer must pay before he employs labour”.
(iv) Manufacturing Process under Factors Act, 1948: Section 2(k) of the Factories Act, 1948 defines ‘manufacturing process’ which means:
1. making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking-up, demolishing, or otherwise treating or adopting any article or substance with a view to its use, sale, transport, delivery or disposal;
2. pumping oil, water or sewage or any other substance;
3. generating, transforming, transmitting power;
4. composing types for printing, printing by letter-press, lithography, photogravure or other similar process or book-binding;
5. constructing, reconstructing, repairing, refitting, finishing or breaking up ships or vessels;
6. preserving or storing any article in cold storage.
Processes held to be Manufacture:
(a) composing for printing;
(b) sun-cured tobacco leaves into cigarette;
(c) peeling, washing of prawns;
(d) raw film-trapping and adapting sound fit to be screened.
Processes which are not Manufacturing:
(a) Exhibition of film;
(b) Industrial school imparting training;
(c) Manufacturing not for sale;
(d) Packaging of final products;
(e) Transportation, on Contract basis;
(f) Preliminary process of packing raw materials;
(g) Receiving news from various sources on reel in newspaper office;
(h) Generation and transformation of electricity.
Dec, 2006: The establishment is carrying on a manufacturing process as per the decision of the Supreme Court in the case of Lal Mohammed vs. Indian Railway Constructions Co. Ltd. The Apex Court in this case has held that in construction of railway, use of raw materials like sleepers, bolts, loose fails etc., to adaptation of their use for ultimately laying down railway line constitutes a manufacturing process.
(v) The IIIrd Schedule of the Industrial Disputes Act, 1947 deals with matters within the jurisdiction of Industrial Tribunals.
1. Wages, including the period and mode of payment;
2. Compensatory and other allowances;
3. Hours of work and rest intervals;
4. Leave with wages and holidays;
5. Bonus, profit sharing, provident fund and gratuity;
6. Shift working otherwise than in accordance with standing orders;
7. Classification of grades;
8. Rules of discipline;
9. Rationalization;
10. Retrenchment of workmen and closure of establishment; and
11. Any other matter that may be prescribed.
(vi) Tests for Determination of Industry: Triple test
I (a) Where there is (i) systematic activity, (ii) organized by co-operation between employer and employee, (iii) for production or distribution of goods and services calculated to satisfy human wants and wishes;
(b) Absence of profit motive or gainful objective is irrelevant wherever the undertaking is public, joint, private or other sector;
(c) Nature of the activity with special emphasis on the employer-employee relations;
(d) If the organization is a trade or business, it does not cease to be one because of philanthropy animating the undertaking.
II Undertaking must suffer a contextual and associational shrinkage, so also, service calling and the like. This yields the inference that all organized activity possessing the triple elements although not trade or business, provided the nature of activity, viz., the employer-employee basis, bears resemblance to what we find in trade or business.
III Application of these guidelines should not stop short of their logical reach by invocation of creeds, cults or inner sense of incongruity or outer sense of motivation or resultant of the economic operations.
Q.14 Distinguish between the following:
(i) ‘Principal employer’ and ‘immediate employer’ under the Employees’ State Insurance Act, 1948.
(ii) ‘Individual dispute’ and ‘industrial dispute’ under the Industrial Disputes Act, 1947.
(iii) ‘Partial disablement’ and ‘total disablement’ under the Workmen’s Compensation Act, 1923. [Dec. 2008, 5x3 = 15]
A worker after an accident became partially disabled and could not do his earlier work. However, the employer offered him another kind of job which he could do without any difficulty. Despite the offer of another job, the worker demanded compensation for partial disablement. Will he succeed ? [June 2008, 3x1 = 3]
A workman, who was a carpenter, had to get his left arm amputated from elbow in an injury caused in the course of employment. The company paid compensation towards partial permanent disablement. The workman demanded compensation claiming it to be total disablement. Will the workman succeed ? [Dec. 2008, 4x1 = 4]
A driver of a bus was involved in an accident which impaired the movement of his left hand. He claimed compensation for permanent total disablement under the Workmen’s Compensation Act, 1923. The employer contested the claim stating that the driver is capable of performing other duties. Will the driver succeed ? [June 2007, 3x1 = 3]
Immediate Employer Principal Employer
Section 2(13) of ESI Act, 1948 defines “immediate employer” means: A person who has undertaken the execution on the premises of a factor or an establishment to which this Act applies or under the supervision of principal employer or his agent, of the whole or any part of work which is ordinarily part of the work of the factor or establishment of the principal employer or is preliminary to the work carried on, and includes a person by whom the services of an employee who has entered into a contract of service with him are temporarily lent or let on hire to the principal employer and includes a contractor. Section 2(17) of ESI Act, 1948 defines “Principal employer” means:
(a) In a factory, owner or occupier of the factory and includes the managing agent of such owner or occupier, the legal representative of a deceased owner or occupier and where a person has been named as the manager of the factor;
(b) In any establishment under the control of any department of any Government in India, the authority appointed by such Government in this behalf or where no authority, Head of the Department;
(c) Any other establishment, any person responsible for the supervision and control of the establishment.
(ii) Industrial Dispute: Section 2(k) defined industrial dispute as:
(a) any dispute or difference between employers and employers or workmen and employers or workmen and workmen;
(b) which is connected with employment or non-employment or terms and conditions of employment;
(c) with conditions of labour of any person;
Individual Dispute: Till the provisions of Section 2A (dismissal, etc., of an individual workman to be deemed to be an industrial dispute) were inserted in the Industrial Disputes Act, 1947, it has been held by the Supreme Court that an individual dispute is not industrial dispute. But it can develop into industrial dispute when it is taken up by the union or substantial number of workmen. (Case Law: Central Province Transport Service vs. Raghunath Gopal Patwardhan). There should be community of interest to develop into an industrial dispute.
Partial Disablement Total Disablement
Partial disablement means “where the disablement is of a temporary nature, such disable as reduces the earning capacity of a workman in any employment in which he was engaged at the time of the accident resulting in the disablement and, where the disablement is of a permanent nature, such disablement as reduces his earning capacity in every employment which he was capable of undertaking at that time. [Section 2(1)(g)] Total disablement means “such disablement, whether of a temporary or permanent nature, as incapacitates a workman for all work which he was capable of performing at the time of the accident resulting in such disablement provided that permanent total disablement shall be deemed to result from every injury specified in Part I of Schedule I or from any combination of injuries specified in Part II thereof where the aggregate percentage of the loss of earning capacity, amounts to 100% or more [Section 2(1)(l)]
Q.15 With reference to relevant legal enactments, write short notes on the following:
(i) Term of patent
(ii) Collective trade marks
(iii) Resale price maintenance. [Dec. 2008, 3x3 = 9]
Answer:
(i) Patent: Patent for any invention granted under the Act:
(a) For article or process of making an article;
(b) By applying ideal or principle.
Essential Ingredients of a Patent:
1. Novelty. 2. Lack of obviousness.
3. Utility. 4. Inventive step.
5. Industrial application and marketability.
6. No prior knowledge or use. 7. Sufficiency of description.
(ii) Collective Trademarks:
(a) A mark which distinguish the goods or services of members of Association of Persons (not partnership) from others;
(b) Where the Association of Person is the proprietor of Trademark;
(c) Association ensures compliance of certain quality standard members use marks when they comply with it;
(d) Registration belonging to group or association of persons and use reserved for members;
(e) Indicate trade in connection with the organization.
Q.16 Distinguish between the following:
(i) ‘Association’ and ‘political party’ under the Foreign Contribution (Regulation) Act, 1976.
(ii) ‘Registered proprietor of a trade mark’ and ‘registered user of a trade mark’ under the Trade Marks Act, 1999.
Write short note on Registered user. [June 2007, 3x1 = 3]
(iii) ‘Foreign exchange’ and ‘net foreign exchange earnings’ under the Foreign Exchange Management Act, 1999. [Dec. 2008, 5x3 = 15]
Answer:
(i) Association: Section 2(1)(a) defined “Association” means an association of individuals, whether incorporated or not, having an office in India and includes a society, whether registered under the Societies Registration Act, 1860, or not, and any other organization, by whatever name called.
Political Party: Section 2(1)(g) defined “Political Party” means an association or body of individual citizens of India which is or is deemed to be registered with the Election Commission of India as a political party under the Election Symbols (Reservation and Allotment) Order, 1968, or which has set up candidates for election to any Legislature, but is not so registered or deemed to be registered under the Election Symbols (Reservation and Allotment) Order, 1968.
(ii) Registered Proprietor: Section 51 empowers the Registrar to require the proprietor to confirm at any time during the continuation of registration as registered user, whether the agreement, of which registered user was registered is still in force.
Registered User: Section 49 provides for registration as registered user and largely corresponds to Sections 49 and 52 of the Trade and Merchandise Marks Act, 1958. Section 50 deals with the power of the Registrar to vary or cancel registration as registered user on the ground that the registered user has used the trade mark otherwise than in accordance with the agreement or in such a way as to cause or likely to cause confusion, or deception or the proprietor/registered user misrepresented or has failed to disclose any material facts for such registration or the stipulation in the agreement regarding the quality of goods is not enforced or the circumstances have changed since the date of registration, etc.
(iii) Foreign Exchange: According to Section 2(n), the term ‘foreign exchange’ has been defined to mean foreign currency and includes deposits, credits, balance payable in foreign currency, drafts, travellers cheques, letters of credit, bills of exchange expressed or drawn in Indian currency but payable in any foreign currency. Any draft, travellers cheques, letters of credit or bills of exchange drawn by banks, institutions or persons outside India but payable in Indian currency has also been included in the definition of foreign exchange.
Net Foreign Exchange Earnings: Net Foreign Exchange Earning (NFE) is calculated cumulatively for a period of 5 years from the commencement of production according to the prescribed formula. SEZ unit should be a positive Net Foreign Exchange Earner.
Q.17 What are the conditions for making investment in the financial services sector in an overseas entity by an Indian company ? [Dec. 2008, 4x1 = 4]
Answer:
As per Regulation 7, an Indian Company seeking to make investment in an entity engaged in the financial services sector also is required to fulfill the following additional conditions:
Cndn 1: be registered with the appropriate regulatory authority in India for conducting the financial sector activities;
Cndn 2: have earned net profit during the preceding 3 financial years from the financial services activities;
Cndn 3: have obtained approval for investment in financial sector activities abroad from regulatory authorities concerned in India and abroad; and
Cndn 4: have fulfilled the prudential norms relating to capital adequacy as prescribed by the concerned regulatory authority in India.
Q.18 Mention the specified details and documents to be furnished by a company/body corporate issuing Foreign Currency Convertible Bonds (FCCBs) to the Reserve Bank of India. [Dec. 2008, 3x1 = 3]
Answer:
Approval of Reserve Bank of India:
An application together with necessary documents should be made in Form ODI submitted through their Authorised Dealer. RBI takes into account the following factors while considering such applications:
(a) Prima facie viability of the JV/WOS outside India;
(b) Contribution to external trade and other benefits which will accrue to India through such investment;
(c) Financial position and business track record of the Indian party and the foreign entity;
(d) Expertise and experience of the Indian party in the same or related line of activity of the JV/WOS outside India.
Q.19 Mention the rights considered as intellectual property by the Convention establishing World Intellectual Property Organisation, 1967.
Answer: [Dec. 2008, 5x1 = 5]
Similar to property rights in movable and immovable property, intellectual property is also characterized by certain rights as well as limitations such as right to use and licence and also limited duration in the case of copy rights and patents. Intellectual property is divided into two branches, namely industrial property and copyright. The Convention establishing Word Intellectual Property Organisation, 1967 provides that the intellectual property shall include rights relating to:
literary, artistic and scientific works;
performances of performing artists, phonograms and broadcasts;
inventions in the field of human endeavour;
scientific discoveries;
industrial designs;
trademarks, service marks, commercial names and designations;
protection against unfair competition; and all other rights resulting from intellectual activity in the industrial, scientific, literary or artistic fields.
Q.20 What are the provisions of the Patents Act, 1970 regarding patents of addition ? [Dec. 2008, 5x1 = 5]
Answer:
Patents of Addition: Section 54 provides that where an application is made for a patent in respect of any improvement in or modification of an invention described or disclosed in the complete specification, namely the main invention and the applicant also applies, the Controller may, if the applicant so requests, grant the patent for the improvement or modification as a patent of addition. Section 55 deals with the term of patents of addition and provides that a patent of addition is granted for a term equal to that of the patent for the main invention and renewal fees shall be paid only if patent of addition becomes an independent patent, as if the patent had been originally granted as an independent patent. Section 56 deals with validity of patents of addition provides that the grant of a patent of addition shall not be refused and a patent granted as a patent of addition shall not be revoked or invalidated on the ground only that the invention claimed in the complete specification does not involve any inventive step having regard to any publication or use of the main invention described in the complete specification relating thereto.
Q.21 Define ‘deficiency in service’ as contained in the Consumer Protection Act, 1986. [Dec. 2008, 3x1 = 3]
[June 2009, 3x1 = 3]
Sangeetha filed a complaint against a bank where her ornaments kept in the bank’s locker were found missing and sought compensation through the Consumers Disputes Redressal Forum against the deficiency in service by the bank. The bank submitted a certificate recorded by the custodian of the bank on the day Sangeetha had operated the locker which stated that all lockers operated during the day had been checked and found properly locked. Will Sangeetha succeed in her claim? [Dec. 2008, 5x1 = 5]
Sangeetha will succeed in her claim. The facts of the case are similar to that of Punjab National Bank vs. K.B. Shetty. In this case, the ornaments kept in the banks locker were found lost through the certificate recorded by the custodian of the bank on the day the customer operated the locker stated that all lockers operated during the day have been checked and found property locked. The National Commission, held that the bank guilty of negligence and therefore, liable to make good the loss.
Girish, while taking a loan from a bank, gave FDR of his family friend Neena as a guarantee against the loan received. The bank adjusted the said FDR amount when Girish defaulted the loan repayment. Neena claimed return of money from the bank contending that she is a third party and it was ‘deficiency in service’ on the bank’s part. Will Neena succeed ? [Dec. 2007, 5x1 = 5]
Neena will not succeed. The present problem is similar to the case of Mrs. Anumati vs. Punjab National Bank, decided by the National Commission. In this case, the National Commission held that there shall be no deficiency in service where the bank takes conscious decisions to adjust the fixed deposits of the joint holders against the loan taken by a third party when the FDR has been mortgaged as guarantee for loan.
A tenant entered into a lease agreement of a flat for use as residential house. After occupying the flat, the tenant demanded of the landlord to effect some repairs and re-paint the building. The owner refused on the ground that there was no such clause in the lease agreement. The tenant filed a complaint in the Consumer Disputes Redressal Forum for ‘deficiency in service’. Will he succeed? [June 2007, 5x1 = 5]
Avtar made a complaint to the Consumer Disputes Redressal Forum that the Regional Provident Fund Commissioner had not settled his provident fund dues within the period stipulated in the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 and for the ‘deficiency in service’. He also claimed damages for non-settlement of the dues within the stipulated period. The Regional Provident Fund Commissioner in his reply contended that there was no hiring of service for consideration since he was performing a statutory function. Will Avtar succeed ? [June 2007, 5x1 = 5]
Chhote Lal, a customer of a bank, while waiting to deposit cash of Rs.45,000 at the bank counter was robbed of his bag containing cash by a person who confronted him with a revolver. The bank security guard did not catch the person even when he was alerted by Chhote Lal. Chhote Lal filed a complaint with the District Forum against the bank for deficiency in service and sought relief. Will he succeed ? [Dec. 2006, 5x1 = 5]
Facts of this problem are similar to Col. D.S. Sachar (Retd.) vs. Punjab and Sind Bank, wherein petitioner visited the Bank to deposit an amount of Rs.45,000/- in his current account. However, before he could deposit that amount, a miscreant allegedly snatched it from the petitioner inside the bank premises and fled away leaving him flabbergasted.
In this case, setting aside the order of State Commission, National Commission observed that ensuring safety of the money to be deposited and/or withdrawn inside the bank premises is impliedly part of the service which the bank renders to its customers.
It was held that bank was deficient in service in view of the fact that bank’s gunman and/or any other employee made no attempt whatsoever to approach the snatcher of the money. Hence, bank was directed to pay the amount of Rs.45,000 to the petitioner with interest and cost.
In view of the aforesaid case law, Chotelal will succeed in claiming compensation against bank for deficiency in service Under Consumer Protection Act, 1986.
A CT scan machine is installed in Daya Ram Charitable Trust and Diagnostic Centre. 80% of the patients are required to pay charges for the services rendered by the trust whereas 20% patients are provided free services. On a complaint against the trust for deficiency in service, it contended that the trust did not engage in profit-making activity on a large scale. Will it succeed ? [June 2006, 5x1 = 5]
A complaint can lie against the Daya Ram Charitable Trust and Diagnostic Centre for deficiency of service. Facts of the case are similar to that of Kalpavruksha Charitable Trust vs. Toshnival Brothers (Bombay) Pvt. Ltd. In the present problem Daya Ram Charitable Trust and Diagnostic Centre cannot claim to be consumer u/s 2(d) of Consumer Protection Act, 1986 in view of the fct that machinery was purchased for commercial purposes, every patient who takes advantage of services of CT Scan Machine has to pay fot it, services rendered are not free, only 20% patients are provided free service. Thus, machinery has been used for commercial purposes and hence complaint can lie against the trust for deficiency of service.
Kajol purchased 2,000 units from a leading mutual fund in 1999 on monthly income scheme. On maturity, the mutual fund sent account payee cheque dated 1st September, 2005 in favour of Kajol at her address lodged with the mutual fund through registered post. The registered post letter was not returned undelivered and the mutual fund believed that the letter containing the cheque was duly delivered to Kajol. On 19th November, 2005, Kajol asked for payment of the maturity amount and was informed that the cheque was delivered and encashed through a co-operative bank. Kajol files a complaint against the mutual fund for deficiency in service and seeks relief. Will she succeed ? [June 2006, 5x1 = 5]
Kajol can claim refund of amount due on maturity for units purchased in a Mutual Fund Scheme as there is failure on the part of Mutual fund to make the payment due to Kajol. Mutual Fund can be held liable for deficiency in service. Hence Kajol will succeed in her action for deficiency of service.
National Commission in Unit Trust of India vs. K. Devi and other held that the applicant is liable to refund maturity value with interest at 12% and cost Rs.1,000. UTI has committed deficiency of service, UTI can retrieve balance from the bank which is their internal matter.
Answer:
Deficiency of Service: As per Section 2(1)(g), Deficiency means “any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service”. Failure to maintain the quality of performance required the law or failure to provide services as per warranties given, by the provider of the service would amount to ‘deficiency’. (Case Law: Divisional Manager, LIC of India vs. Bhavanam Srinivas Reddy), the National Commission observed that default or negligence in regard to settlement of an insurance claim would constitute a deficiency in service on the part of the insurance company and it will be perfectly open for the aggrived consumer to approach the Redressal Forums to seek appropriate relief.
Q.22 Answer the following:
(i) Mention five important entitlements allowed by foreign trade policy to the units established in the Special Economic Zone (SEZ).
(ii) What are the general powers of Central Government for protecting and improving the quality of the environment and for preventing, controlling and abating environmental pollution under the Environment (Protection) Act, 1986 ? [June 2007, 5x1 = 5]
Explain the provisions of the Environment (Protection) Act, 1986 regarding prevention, control and abatement of environmental pollutant in excess of prescribed standards. [Dec. 2007, 5x1 = 5]
(iii) Rohit sought admission to a law college affiliated to EXCEL University. The university refused to provide LL.B Degree Certificate to Rohit on completion of the course on the ground that the qualifying examination on the basis of which Rohit was admitted in the LL.B course in the college has not been recognised by it. Rohit has filed a case in the Consumer Disputes Redressal Forum against the university and claimed relief. Will Rohit succeed ?
(iv) What is meant by ‘copyright’ in the case of a computer programme ? When is a copyright infringed under the Copyright Act, 1957 ?
Anwer: [Dec. 2008, 5x4 = 20]
(i) Entitlements of Foreign Trade Policy to EOU/EHTP/STP/BTP:
1. Exemption from Income Tax under the provisions of Section 10A and 10B of I.T. Act, 1961.
2. Exemption from industrial licensing for manufacture of items reserved for SSI sector.
3. Export proceeds are allowed to be realized within 12 months.
4. Allows to retain 100% of its export earning in EEFC A/c.
5. The Unit is not required to furnish bank guarantee at the time of import or for jobwork in DTA, where such unit has a turnover of Rs.5 crores or more and the unit is in existence for atleat 3 years and having an unblemished track record.
6. 100% FDI investment permitted through Automatic Route similar to SEZ units.
Entitlements of Foreign Trade Policy to SEZ:
1. Exemption from Income Tax under the provisions of Section 80IA of I.T. Act, 1961.
2. Import or procure goods without payment of Customs or Excise duty.
3. Exemption from Service Tax.
4. Exemption from CST.
5. 100% FDI investment permitted through Automatic Route.
(ii) Powers of Central Government:
1. To appoint and authorize, officers and authorities, to perform functions under the Act.
2. Co-ordination of actions of State Government, Officers and Authorities.
3. For Prevention, Control and Abatement:
a. Planning and execution of nation wide programs;
b. Laying standards for emission or discharge;
c. Laying procedures and safeguards for prevention of accidents;
4. Examination, inspection, investigation and Research of process or plant or operations.
5. Power of entry, search and seizure.
6. Collection and dissemination of information through Laboratories, Institutions and publication of manuals, guides, etc.
7. Power to issue directions, after giving an opportunity of being heard, in cases of closure or prohibition or regulation or stoppage.
8. Power to take samples and analyse as per Section 10:
a. Step 1: Notice to be given before taking samples;
b. Step 2: Samples should be taken before Occupier;
c. Step 3: It should be signed by the person taking sample and occupier;
d. Step 4: Take 2 sealed samples, one for the concerned person and other will be sent to Environmental Laboratory for testing;
e. Step 5: Laboratory will give ‘Report of Analysis’ signed by Government Analyst.
9. Power to make rules to standardize methods for sampling and analysis of various types of pollution, lays down standards for quality of environment analyse samples, periodic report to Central Government.
10. Such other matters as the Central Government deems necessary or expedient for the purpose of securing the effective implementation of the provisions of the Act.
Conclusion: Section 7 prohibits carrying on of any industry, operation or process which discharges or emits any environmental pollutant in excess of prescribed standards. Section 8 prohibits a person from handling or causing to be handled any hazardous substance except in accordance with prescribed procedures and standards. Section 9 obliges certain persons to provide information to authorities and agencies in cases where the discharge of any environmental pollutant is in excess of prescribed standards. Section 10 empowers the Central Government to authorize persons to enter and inspect. Section 11 deals with taking of samples and Section 12 authorizes the Central Government to establish environmental laboratories. Section 15 deals with penalties and Section 16 contains provision in respect of offences by companies and Government Departments.
(iii) Deficiency in Service on part of Educational Institution: The case is similar to (Case Law: Sreedharan Nair N. vs. Registrar, University of Kerala), the National Commission observed that this is a clear case of deficiency on part of University. A compensation of Rs.50,000/- was awarded to complainant.
(iv) Meaning of Copyright in case of a Computer Programme:
1. To do any of the acts specified in respect of a literary, dramatic or musical work:
(a) Reproducing the work in any material form which includes storing in any medium by electronic means;
(b) Issuing copies of work to public which are not already in circulation;
(c) Performing the work in public or communicating to the public;
(d) Making any cinematograph film or sound recording in respect of work;
(e) Making any translation or adaptation of the work.
2. To sell or give on commercial rental or offer for sale or for commercial rental any copy of the computer programme.
Infringement of a Copyright: Section 51 of the Copyright Act, 1957 contemplates situation in which a copyright shall be deemed to be infringed:
1. Doing anything without license, for which other owner has exclusive rights;
2. Permitting for profit without license, any place to be used for communication to public (infringement of copyright in work);
3. sale or hire or distributing or exhibiting in public or importing any infringing copies for other than personal use;
4. Piracy.
Not Infringements:
(a) Making sound or visual recording for private use of such persons solely for purpose of bonafide teaching and research;
(b) Use, consistent with fair dealing of excerpts of performance or broadcasting in reporting of current events for bonafide review, teaching or research;
(c) Other activities under Section 52 does not constitute infringement.
Q.23 Discuss the following:
(i) Personnel policies. [Dec. 2006, 5x1 = 5]
(ii) Certification of draft standing orders under the Industrial Employment (Standing Orders) Act, 1946.
Important matters which are to be provided in standing orders under the Industrial Employment (Standing Orders) Act, 1946 [Dec. 2007, 5x1 = 5]
Payment of subsistence allowance to a suspended workman under the Industrial Employment (Standing Orders) Act, 1946. [June 2006, 5x1 = 5]
The workmen, who had participated in an illegal strike, did not resume their duties which affected production in the units. The employer dismissed these workmen under the standing orders. Is the employer’s action justified ?
[Dec. 2008, 3x1 = 3]
A worker was placed under suspension and disciplinary proceedings were initiated against him. The proceedings could not be completed in 90 days after which the suspended worker demanded increase in subsistence allowance under the Industrial Employment (Standing Orders) Act, 1946. Will he succeed ? [June 2008, 3x1 = 3]
(iii) Benefits to an insured person under the Employees’ State Insurance Act, 1948. [Dec. 2008, 5x3 = 15]
Answer:
(i) Personnel Policies: Personnel policies are statements of management’s intention in regard to industrial relations. They constitute a business philosophy for the guidance of the human-relations and provisions of the enterprise. Such policies, once formulated and developed must be according to set rules and regulations of the organization. Positive discipline refers to creation of an attitude and organizational climate in which employees willingly confirm to rules and regulations.
(ii) Certification of Standing Order:
Step 1: Send 5 copies of Draft Standing Order within 6 months to “Certifying Officer”, who is the Labour Commissioner;
Step 2: Certifying Officer forward a copy to Trade Union or Workmen;
Step 3: Objection is acceptable within 15 days;
Step 4: Opportunity of being heard to Trade Union or Workmen, thereafter make amendments and certify;
Step 5: Copies of Certified Standing Orders will be send within 7 days to Employer and Workers representatives;
Step 6: SO Becomes effective on expiry of 30 days from the day of sending copies.
Step 7: If appeal is preferred, on expiry of 7 days from the day of sending copies of Order by the Appellate Authority to employer and representatives.
Note: Every subsequent amendments to Standing Order be made retrospectively.
Important matters to be provided in the Standing Orders:
Standing Orders means the Rules relating to the service conditions and related matters have to be provided in the Standing Orders under the Schedule to the Act:
Classification of workmen.
Manner of intimating to workmen about periods and hours of work, holidays, pay-days and wage rates.
Shift working.
Attendance and late coming.
Conditions of applying and the authority which may grant leave and holidays.
Requirement to enter premises by certain gates and liability to search.
Closing and reopening of industrial establishment, temporary stoppage of work and the rights and liabilities of the employer and workmen arising therefrom.
Termination of employment and notice thereof to be given by employer and workmen.
Suspension or dismissal for misconduct.
Means of redress for workmen against unfair treatment by employer or his agents or servants.
Payment of Subsistence Allowance: As per Section 10A of the Industrial Employment (Standing Orders) Act, 1946 on suspension, a workmen is entitled to subsistence allowance @ 50% of his last drawn wages prior to suspension for the first 90 days of suspension and @75% of such wages for the remaining period of suspension, if delay in completion of disciplinary proceedings against such workmen is not directly attributable to the conduct of such workman. If case of any dispute regarding the subsistence allowance payable to a workman, the workman or the employer concerned may refer the dispute to the Labour Court constituted under the Industrial Disputes Act, 1947 and its decision shall be final and binding on the parties.
(iii) Benefits under the ESI Act, 1948: According to Section 46 of the ESI Act, the insured persons and their dependants are entitled to the following benefits:
(a) Periodical payments in case of sickness certified by medical practitioner;
(b) Periodical payments to an insured workman in case of confinement or miscarriage or sickness arising out of pregnancy; premature birth of child;
(c) Periodical payment to an insured person suffering from disability as a result of employment injury;
(d) Periodical payment to such dependants of insured person who dies as a result of an employment injury;
(e) Medical treatment for and attendance on insured persons;
(f) Payment of funeral expenses on the death of insured person at the prescribed rate of Rs.1,500/-
Note: 1. Right to receive benefits is not transferable or assignable. When a person receives benefits under this Act, he is not entitled to receive benefits under any other enactment.
2. An insured person is not entitled to receive more than one benefit for the same period, e.g., benefit of sickness cannot be combined with benefit of maternity or disablement, etc.
Q.24 With reference to relevant legal enactments, write short notes on following:
(i) Element of ‘novelty’ in an invention
(ii) Project exports
(iii) Predatory pricing [June 2008, 3x4 = 12]
Answer:
(i) Element of ‘novelty’ in an Invention:
Section 2(l) defines term new invention as to mean any invention or technology which has not been anticipated by publication in any document or used in the country or elsewhere in the world before the date of filing of patent application with complete specification, i.e., the subject matter has not fallen into public domain or that it does not form part of the state of the art.
(ii) Project Exports: An “Export Promotion Capital Goods” (EPCG) authorisation can be issued for import of capital goods for supply to projects notified by the Central Board of Excise and Customs wherein the basic customs duty on imports is 10% with a CVD of 16%. The scheme covers manufacturer exports with or without supporting manufacturer or vendor, merchant exports tied to supporting manufacturers and service providers.
(iii) Predatory Pricing: Section 33(1)(j) of the MRTP Act, 1969 relates to any agreement to sell goods at such prices as would have the effect of eliminating competition or a competitor. It is called predatory pricing which is selling below the cost of production so as to eliminate a competitor from competition, though in cases of very slugging demand, sale below cost may be necessitated to prevent losses from getting aggravated.
Q.25 State, giving reasons in brief, whether the following statements are true or false:
(i) An export oriented unit (EOU) can export goods manufactured by it through another export oriented unit (EOU).
(ii) Unfair trade practices include offering gifts/prizes for promotional contests.
(iii) Tie-up arrangements hardly serve any purpose beyond suppression of competition.
(iv) The term of copyright in published literary works and cinematograph films is 60 years.
(v) A patent is granted for a definite period. [June 2008, 3x5 = 15]
Answer:
(i) Export through other Exporters: An EOU/EHTP/STP/BTP unit may export goods manufactured by it through other exporter including EOU/EHTP/STP/BTP unit subject to the following conditions:
Goods are produced in the EOU/EHTP/STP/BTP unit concerned.
The level of NFE or any other conditions continue to be discharged by the EOU/EHTP/STP/BTP unit concerned.
The export orders so procured are executed within the parameters of EOU/EHTP/STP/BTP schemes and goods are directly transferred from the unit to port of shipment.
Fulfillment of NFE by EOU/EHTP/STP/BTP units in regard to such exports are reckoned on the basis of the price at which the goods are supplied.
All export entitlements including recognition as status holder would accrue to the exporter in whose name foreign exchange earnings are realized.
(ii) Offering of Gifts or Prizes: Section 36A(3)(a) deals with the unfair trade practices relating to offering of gifs or prizes with the intention of not providing them or creating an impression that something is being given free of charge when it is fully or partly covered by the amount charged in the whole transaction. According to Section 36A(3)(b), the conduct of any contest, lottery, game of chance or even game of skill would be an unfair trade practice if it was done for the purpose of promoting the sale, etc., or any business interest resulting in loss or injury to the consumers by eliminating competition or otherwise.
(iii) Tie-up Arrangements: The meaning of tie-up arrangements has been defined under Section 33(1)(b) of the Competition Act, 2002 which provides that whereby a seller agrees to sell a product or service only on the condition that the buyer agrees to buy another (tied item) from the seller or not to buy the tied product from any other supplier. Such arrangements are generally used to push the sale of a slow-moving and less in demand product alongwith a more popular product or for introducing a new product in the market.
(iv) Terms of Copyright:
1. Literary, dramatic, musical or artistic works enjoy copyright protection for the life time of the author + next 60 calendar years.
2. Broadcasting organization: Year of Broadcasting + next 25 calendar years.
3. Performers: Year of performance + next 50 calendar years.
(v) Term of Patent: 20 years from the date of filing.
Q.26 Distinguish between the following:
(i) ‘Person’ and ‘authorised person’ under the Foreign Exchange Management Act, 1999.
(ii) ‘Political party’ and ‘an organisation of political nature’ under the Foreign Contribution (Regulation) Act, 1976. [June 2008, 4x2 = 8]
Answer: [June 2007, 5x1= 5]
Authorised Person Person
Section 2(c): The term authorized person is defined to include an authorized dealer, money changer, offshore banking unit or any other person for the time being authorized to deal in foreign exchange or foreign securities. Section 2(u): The term person includes an individual, HUF, a company, a firm, an AOP or BOI whether incorporated or not; any agency, office or branch owned or controlled by such persons. Even every artificial juridical person not falling with above categories has been treated as person.
Organization of Political Nature: An organization of a political nature notified by the Government, not being a political party means such organization as the Central Government may by notification in the Official Gazette, having regard to the activities of the organization or the ideology propagated by the organization or the programme of the organization or the association of the organization with the activities of any political party.
Q.27 Explain the powers of the Central Government to prohibit receipt of foreign contribution under the Foreign Contribution (Regulation) Act, 1976.
[June 2008, 4x1 = 4]
What are the powers of the Central Government to prohibit receipt of foreign contribution under the Foreign Contribution (Regulation) Act, 1976?
Answer: [June 2007, 5x1 = 5]
Powers of the Central Government to Prohibit Receipt of Foreign Contribution: The Central Government has been empowered by Section 10 of FCRA Act, 1976 to:
Prohibit any association or person not specified in Section 4 from accepting any foreign contribution.
Require any association specified in Section 6(1) to obtain prior permission of the Central Government before accepting any foreign contribution.
Require any association or person, not specified in Section 6, to send intimation within such time and manner as may be prescribed as to the amount, source, manner, purpose and utilization of such amount.
Require any person, not specified in Section 9, to obtain prior permission of the Central Government before accepting any foreign hospitality.
Require any person, not specified in Section 9, to send intimation within such time and manner as may be prescribed as to the receipt of any foreign hospitality, amount source, manner in which such hospital is received.
Q.28 Mention briefly powers of the Competition Commission of India under the Competition Act, 2002. [June 2008, 3x1 = 3]
Mention the important factors which the Competition Commission of India will take into consideration for determining whether an agreement has an ‘appreciable adverse effect’ on competition. [June 2007, 5x1 = 5]
Answer:
Duties, Powers and Functions of CCI: As per Section 18 of Competition Act, 2002:
(a) To eliminate practices having adverse effect on competition.
(b) To promote and sustain competition.
(c) To protect interests of consumers and
(d) To ensure freedom of trade carried on by other participants in Indian markets.
Important Factors which CCI take into consideration whether determining any agreement has “appreciable adverse effect” on competition:
1. creation of barriers to new entrants in the market;
2. driving existing competitors out of the market;
3. foreclosure of competition by hindering entry into the market;
4. accrual of benefits to consumers;
5. improvements in production or distribution of goods or provision of services;
6. promotion of technical, scientific and economic development by means of production or distribution of goods or provision of services.
Note: The first 3 factors are anti-competitive while latter 3 factors deal with benign effects.
Q.29 (i) Define the term ‘service’ as contained in the Consumer Protection Act, 1986. Are railway passengers and telephone subscribers ‘consumers’ under the Consumer Protection Act, 1986 ? Refer to decided case law.
(ii) Name the persons who can make an application for the sealing of patent under the Patents Act, 1970.
(iii) Mention the remedies for infringement of copyrights under the Copyright Act, 1957. [Dec. 2008, 3x1 = 3]
(iv) What are the acts which do not amount to infringement of a trade mark under the Trade Marks Act, 1999 ? [June 2008, 5x4 = 20]
Answer:
(i) Service under Consumer Protection Act, 1986: Service has been defined in Section 2(u) which means “service of any description which is made available to potential users and includes the provision of services in connection with industrial, commercial, banking, communication, education, financing, insurance, chit funds, real estate, transport, storage, material treatment, processing supply of electrical or other energy, boarding, lodging, entertainment, amusement, construction, repair, conveying of news or information and advertising.
(ii) Sealing of Patent: Section 25(2) of the Patents Act, 1970 deals with opposition to grant of patent and entitles any interested person to give notice of opposition, to the Controller in the prescribed manner at any time after the grant of patent but before the expiry of a period of 1 year from the date of publication of grant of a patent.
(iii) Remedies for infringement of copyrights under the Copyright Act, 1957: Section 55 provides for the civil remedies for infringement of copyright and entitles the owner of the copyright to all such remedies by way of injunction, damages, accounts and otherwise as may be conferred by law for the infringement of copyright.
Q.30 Discuss the following:
(i) Industrial unrest. [Dec. 2007, 5x1 = 5]
(ii) Object and scope of the Industrial Disputes Act, 1947.
Answer: [June 2008, 5x2 = 10]
(i) Industrial Unrest: Industrial unrest refers to the discontent or dissatisfaction lurking in the disturbed minds of labourers about certain lapses at the working place or about their wages or security or employment etc. Labourers are always hopeful that their causes of discontent or unrest can be eliminated by their collective strength. Hence they form their own organizations and resort to certain measures with which they try to gain their ends.
Two categories of causes of Industrial unrest are notified:
1. Intangible Causes: Man seeks to satisfy his wants but the path that he followed in search for satisfaction is a complex one, due to human nature. Different people have different attitudes towards the same fact.
2. Tangible Causes: These include demand for increase in wages, bonus, etc, demand for re-instatement of any dismissed worker; demand for greater facilities, demand for recognition of a trade union, political cuases leading to general agitation, etc.
(ii) Scope of Industrial Disputes Act, 1947: The ID Act is one of the prominent labour legislations. The Supreme Court laid down following objectives of the Act in the (Case Law: Workment of Dimakuchi Tea Estate vs. Dimakuchi Tea Estate):
1. To harmonise industrial relations between the employer and workmen.
2. For prevention, investigation and settlement of disputes.
3. Prevention of illegal strikes and lock-outs.
4. Relief to workmen in the matter of lay-off and retrenchment.
5. Promotion of collective bargaining.
Q.31 With reference to relevant legal enactments, write short notes on following:
(i) Company Secretary as patent agent.
(ii) Reliefs which a Consumer Disputes Redressal Forum can grant to an aggrieved consumer.
(iii) Environment impact assessment and management plan.
(iv) ‘Regulation of combinations’ under the Competition Act, 2002.
Mention the provisions of the Competition Act, 2002 relating to regulation
of combinations. [Dec. 2006, 3x1 = 3]
Answer: [Dec. 2007, 3x5 = 15]
(i) Company Secretary as Patent Agent: Section 126(1) of the Patents Act, 1970 provides that a person shall be qualified to have his name entered in the register of patent agent, if he is a citizen of India completed 21 years of age and has obtained a degree in science, engineering or technology from any university established under law in the territory of India or possesses such other equivalent qualifications as the Central Government may specify in this behalf and in addition has passed qualifying examination for this purpose. A person shall also be qualified under Sec. 126(1)(c)(iii), if he has functioned for a period of not less than 10 years, either as an examiner or discharged functions of the controller under Section 73 of the Act or both, but ceased to hold any such capacity at the time of making the application for registration.
(ii) Remedies/Reliefs under Consumer Protection Act, 1986: According to Section 14(1) of the Act, the District Forum/State Commission/National Commission may pass one or more of the following orders:
1. To remove defects in goods pointed out by the appropriate laboratory.
2. To replace the goods with new goods of similar description.
3. To return to the complaining the price, or charges paid by the complainant.
4. To pay such amount awarded by it as compensation to the consumer for any loss or injury suffered by him due to negligence of the opposite party.
5. To remove deficiencies in services in question.
6. To discontinue the unfair trade practice or restrictive trade practice.
7. Not to offer the hazardous goods for sale or to withdraw such goods being offered for sale.
(a) To stop manufacture of hazardous goods and to desist from offering services which are hazardous in nature;
(b) To pay such sum caused by it that loss or injury has been suffered by a large number of consumers and it is to be noted that minimum amount so payable shall not be less than 5% of the value of such defective goods sold or services provided.
8. To provide for adequate costs to parties.
(iii) EIA and MP: Ministry of Environment and Forests restricts location of industry, mining operations, cutting of trees, in certain areas and person wishing to undertake these operations shall comply with the following conditions:
Cndn 1: Environment Impact Assessment Notification (EIAN) given by Impact Assessment Agency of Central Government (which covers highly polluting industry) for setting up or expanding the unit.
Cndn 2: Prepare Environment Management Plan for prevention, elimination or mitigation of adverse impacts right from inception of project and license is granted on that basis.
1. Projects like pesticides, bulk drugs, asbestos, mining, distilleries, foundries, raw skins, dyes and electroplating which are highly polluting in nature requires prior approval of Central Government and mandatory public hearing irrespective of the investment limits.
2. Projects like Oil & Gas, petro refinery, nuclear power, thermal power, requires prior approval of Central Government and mandatory public hearing only if it exceeds the investment limit of Rs.50 Crores.
3. Other projects and projects in “green belt” or “no industry zones” requires approval of the State Government.
Note: For mandatory public hearing, an application to be made to “State Pollution Control Board’ along with Executive Summary (i.e., a public document); then
(a) It will be advertised in 2 newspapers;
(b) Public hearing by a panel consists of representatives of the Board, State Government and Department of State on one side;
(c) District Collector, 3 representatives of Local Bodies and 3 citizens of locality on the other side;
(d) The exemption from Public Hearing granted if it is for strengthening highways, mining projects with least upto 25 hectares, units in EPZ/SEZ and modernization of irrigation projects. Small industries are exempted where investment upto Rs.1 crore.
(iv) Regulation of Combinations: Section 5 of the Competition Act, 2002 provides that acquisition of one or more enterprises by one or more persons or merger or amalgamation of enterprises shall be a combination of such enterprises and persons which are above the certain prescribed size in terms of (a) assets or (b) turnover.
Section 6 of the Competition Act, 2002 provides that any person or enterprise entering into a combination with causes or is likely to cause an appreciable adverse effect on the competition within the relevant market in India and if such a combination is formed, it shall be void. However, in terms of Section 6(4), provisions relating to Regulation of Combinations shall not apply to share subscription or financing facility or any acquisition, by a public financial institution, foreign institutional investor, bank or venture capital fund, pursuant to any covenant of a loan agreement or investment agreement.
Q.32 State, giving reasons in brief, whether the following statements are true or false:
(i) The Copyright Board has power to limit the user of copyright to any particular territorial area.
(ii) Every person carrying on industry is required to submit an environment audit report.
(iii) Foreign contribution can be accepted as an agent of a foreign source.
(iv) Release of foreign exchange for studies abroad in a prestigious university is without any limit.
(v) After the National Environment Tribunal makes an award, an application is required to be made to the court to make it executable as a decree of a civil court.
(vi) The term ‘industrial property’ is a collective name for rights referring to the commercial or industrial activities of a person. [Dec. 2007, 3x6 = 18]
Answer:
(i) Incorrect: The Copyright Board has no power to limit the user of copyright to any particular territorial area.
(ii) Incorrect: Rule 14 of the Environment Protection Rules provides that every person carrying on an industry, operation or process requiring consent under Section 25 of the Water (Prevention and Control of Pollution) Act, Section 2 of the Air (Prevention and Control of Pollution) Act, Hazardous Waste (Management and Handling) Rules, is required to submit an Environment Audit Report.
(iii) Correct: Section 8 of the FCRA, 1976 allows a person to accept foreign contributions as an agent of foreign source in relation to any transactions made by such foreign source with Government.
(iv) Incorrect: As per Rule 5 of FEM (Current A/c Transactions) Rules, 2000, prior approval of the RBI is necessary for a transaction included in Schedule III of the said rules. Accordingly release of foreign exchange for studies abroad in excess of the estimates from the Institution abroad or US$1,00,000 per academic year, whichever is higher requires prior approval of RBI.
(v) Incorrect: Section 23 provides that an award made by the National Environment Tribunal shall be executable by the Tribunal as a decree of a civil Court and for this purpose the Tribunal shall have all the powers of a Civil Court.
(vi) Correct; Industrial property right is a collective name for rights referring to the commercial or industrial activities of a person. These activities may include the industrial or commercial interests. They may relate to manufacture, new designs or model and distinctive marks for goods etc.
Q.33 Distinguish between the following:
(i) ‘Foreign contribution’ and ‘foreign hospitality’.
Restrictions on acceptance of foreign hospitality. [Dec. 2006, 3x1 = 3]
(ii) ‘Restrictive trade practice’ and ‘unfair trade practice’.[Dec. 2007, 5x2 = 10]
Answer:
(i) Foreign Contribution: Foreign contribution means the donation, delivery or transfer made by any foreign source:
(i) Of any article, not being an article given to a person as a gift for his personal use, the M.V. of such article in India, on the date of such gift, does not exceed Rs.1,000/-
(ii) Of any currency, whether Indian or foreign;
(iii) Of any foreign security as defined in clause (i) of Section 2 of the FEMA, 1999.
Restrictive Trade Practice Unfair Trade Practice
It is a Trade Practice which may have the effect of preventing, distorting or restricting competition in any manner and in particular which obstruct the flow of capital into the stream of production or which tends to bring about price manipulation conditions of delivery to the effect the flow of supplies in the market relating to goods or services in such a manner as to impose on the consumers unjustified costs or restrictions. MRTP Act requires registration of certain agreements relating to restrictive trade practice. MRTP Act, 1969 defines the unfair trade practice as to mean a trade practice which for the purpose of promoting the sale, use or supply of any goods or provision of services adopts any unfair method or deceptive practice. The unfair trade practices include deceptive advertisements or false representation, bargain sales, offering gifts/prizes and conducting promotional contests, non-compliance of goods with prescribed standards, etc.
Q.34 Mention the provisions of the Foreign Exchange Management Act, 1999 regarding acquisition and transfer of immovable property outside India.
Answer: [Dec. 2007, 5x1 = 5]
Acquisition and Transfer of Immovable Property Outside India:
1. The RBI while exercising the powers conferred under Section 6(3)(h) and Section 47(2) of the FEMA, 1999 prescribed regulations in respect of acquisition and transfer of immovable property outside India.
2. A person resident in India is prohibited from acquiring or transferring any immovable property situated outside India without general or special permission from the RBI. However, this prohibition is not applicable to a person resident in India who is a national of a foreign state.
3. A person resident in India may acquire immovable property outside India by way of a gift or inheritance from a person who was resident outside India in terms of Sec. 6(4) of FEMA.
4. A person resident in India may acquire immovable property outside India by way of purchase out of foreign exchange held in Resident Foreign Currency (RFC A/c) maintained in accordance with the Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2000.
5. RBI is empowered to permit a company incorporated in India to acquire immovable property to have overseas offices for its business and for residential purpose of its staff subject to such terms and conditions as it considers necessary. A person resident in India who has acquired immovable property outside India as above may transfer it by way of gift to his relative who is a person resident in India.
Q.35 State the obligations of banking companies, financial institutions and intermediaries under the Prevention of Money Laundering Act, 2002.
Answer: [Dec. 2007, 5x1 = 5]
Section 13 states that, in the course of any inquiry, if the Director finds that a banking company, financial institution or an intermediary or any of its officers has failed to maintain or retain records in accordance with the provisions of this Act, he may, by an order, levy a fine on such banking company, financial institution or intermediary which shall not be less than Rs.10,000/- but may extend to Rs.1,00,000/- for each failure. Section 15 empowers the Central Government to prescribe, in consultation with the RBI, the procedure and the manner of maintaining and furnishing information for the purpose of implementation of the provisions of the Act.
Q.36 Attempt the following:
(i) Sukhwinder, a farmer in Punjab, purchased a tractor to till his lands. During the idle time, he let it on hire for tilling the lands of others. Explain the meaning of ‘consumer’ under the Consumer Protection Act, 1986 and state whether Sukhwinder is a ‘consumer’ under the said Act.
(ii) Explain the provisions of the Patents Act, 1970 regarding restoration of lapsed patents.
(iii) What are the requisites for conferring copyright protection to works of international organisations ? [Dec. 2007, 5x3 = 15]
International copyright [June 2007, 3x1 = 3]
Answer:
(i) Consumer: A person is a consumer under the Consumer Protection Act, if:
(i) Goods/services are availed for a consideration which has been paid in full;
(ii) Goods should not be for re-sale for commercial purpose.
(iii) Any beneficiary of goods/services is also deemed to be a ‘consumer’.
Conclusion: It is clarified that “commercial purpose” does not include use for the purpose of earning livelihood or self employment. (Case Law: Bhupendra Jang Bahadur Guva vs. Regional Managers & Others), the National Commission held that a tractor purchased to till the land by the purchaser and let out during idle time would not amount to commercial use.
(ii) Restoration of Lapsed Patents: Section 60 of Patents Act, 1970 provides that where a patent has ceased to have effect by reason of failure to pay any renewal fee within the period prescribed under Section 53 or within period as may be allowed under Section 142(4), the patentee or his legal representative and where the patent was held by two or more persons jointly, then with the leave of the Controller, one or more of them without joining the others, may within 18 months from the date on which the patent ceased to have effect, make an application for the restoration of the patent. Section 61 provides that, any person interested may give notice to the Controller on the following grounds that:
(a) The failure to pay the renewal fee was not unintentional; or
(b) There has been undue delay in making the application.
(iii) International Copyright: The following are the requisites for conferring copyright protection to works of international organizations:
1. The work must be made or first published under the direction or control of the international organization.
2. There should be no copyright in the work in India at the time of making or first publication of the work.
3. If the work is published in pursuance of an agreement with the author, such agreement should not reserve the author any copyright in the work or any copyright in the work should belong to the organization.
Q.37 Attempt the following:
(i) What are the important heads under which compensation for damages may be claimed under the National Environment Tribunal Act, 1995 ?
(ii) Under the ‘salary saving scheme’ of LIC of India, employees of a company have taken insurance policies and the premium due on each policy is collected by the company from the salaries of the employees and sent to LIC of India. LIC of India neither issued any separate receipts nor used to issue any premium notices to the employees. When the widow of a deceased employee made a claim to the LIC of India on the death of her husband, LIC of India repudiated the claim on the ground that four instalments of the premium have not been paid. The widow approached the Consumer Disputes Redressal Forum for redressal. Will she succeed ? [Dec. 2007, 5x2 = 10]
Answer:
(i) The National Environmental Tribunal Act, 1955 lists out the following heads:
1. Death
2. Permanent, temporary, total or partial disability or other injury or sickness.
3. Loss of wages due to permanent, temporary, total or partial disability.
4. Medical expenses incurred for treatment of injuries or sickness.
5. Damage to private property.
6. Expenses incurred by the Government or any Local Authority in providing relief, aid and rehabilitation to the affected person.
7. Expenses incurred by the Government for any administrative or legal action including compensation for environmental degradation and restoration of the quality of environment.
8. Loss to Government or any Local Authority arising out of activity causing any damage.
9. Claims on account of any harm, damage or destruction to the fauna including milch and drought animals and aquatic fauna.
10. Claims on account of any harm, damage or destruction to the flora including aquatic flora, crops, vegetables, trees and orchards.
11. Claim on account of any harm or damage to environment including pollution of soil, air, water, land and eco-system.
12. Loss and destruction of any property other than private property.
13. Loss of business or employment or both.
14. Any other claim arising out of any activity of handling of hazardous substances.
(ii) Yes, the widow of deceased employee will succeed. (Case Law: Delhi Electric Supply Undertaking vs. Basanti Devi), the Supreme Court held that since the burden of collecting premium and remitting it to Corporation was on the employer, it was not for the employee to intimate the Corporation about non-remittance of the premium. The Supreme Court further held that the employer had implied authority to collect premium on behalf of the Corporation. There was no gain saying the fact that if the employer had after deducting the stipulated amount from the employees salary failed to remit the premium to the Corporation. It was the fault of the agent of the Corporation. Hence LIC is liable to make payment under the policy.
Q.38 Discuss the following:
(i) Scope of industrial relations
(ii) Privileges of a registered trade union. [Dec. 2007, 5x2 = 10]
Answer:
(i) The scope of industrial relations is very wide and it includes:
(a) Establishment and maintenance of good personnel relations in the industry.
(b) Ensuring manpower development.
(c) Establishing a closer contact between persons connected with industry and between management and workers.
(d) Creating a sense of belongingness in the minds of management.
(e) Creating a mutual affection, responsibility and regards for each other.
(f) Stimulating production as well as industrial and economic development.
(g) Establishing good industrial climate and peace and miximising social welfare.
(ii) Privileges of a Registered Trade Union:
1. Immunity from Criminal Proceedings: According to Section 17, no office-bearer or member of a Registered Trade Union shall be liable to punishment under Section 120B(2) of IPC, in respect of any agreement made between the members for the purpose of furthering any such objects of the Trade Union as specified in Section 15, unless the agreement is an agreement to commit an offence.
2. Immunity from Civil Suits in certain Case: As per Section 18 of the Act,
(a) Such act includes some other person to break a contract of employment; or
(b) It is in interference with the trade, business or employment of some other person; or
(c) It is interment with the right of some other person to dispose of his capital or his labour as he wills.
3. Enforceability of Agreement: Section 19 of Trade Union Act, 1926 says that notwithstanding anything contained in any other law for the time being in force, agreement between the members of a registered trade union shall not be void or voidable merely by reason of the fact that any of the objects of the agreement are in restraint of trade.
Q.39 With reference to relevant legal enactments, write short notes on the following:
(i) Industrial Entrepreneur Memorandum
(ii) Water pollution
(iii) Objectives of the Competition Act, 2002 [June 2007, 3x3 = 9]
Answer:
(i) Industrial Entrepreneurial Memorandum (IEM):
1. Information by de-licensed industries;
2. Industries, if exempt from licensing;
3. Shall file Part A of IEM to Entrepreneurial Assistance Unit (EAU) of Secretariat of Industrial Assistance (SIA), Department of Industrial Policy and Promotion under Ministry of Commerce.
4. Part B of IEM filed after commencement of commercial production.
(ii) Water Pollution:
1. such contamination of water; or
2. such alteration of physical/chemical/biological properties of water; or
3. such discharge of any sewage or trade effluent; or
4. of any other liquid or solid substance into water;
5. as may or is likely to create a nuisance; or
6. render such water harmful to public health or to domestic, commercial, etc; or
7. other legitimate uses or to life of animals and plants or of aquatic organisms.
(iii) Objectives of Competition Act, 2002:
1. To consider the economic development;
2. To prevent adverse effect on competition;
3. To promote and sustain competition;
4. To protect interest of consumers;
5. To ensure freedom of trade carried on by other participants in Indian market;
6. Incidental and connected matters and are achieved through appointing CCI.
Q.40 State, with reasons in brief, whether the following statements are true or false:
(i) All ‘inventions’ are patentable.
(ii) A ‘trade practice’ does not include a single or isolated action of any person in relation to any trade.
(iii) The Monopolies and Restrictive Trade Practices Act, 1969 seeks to regulate ‘trade practices’ and not ‘trade’.
(iv) The three-tier machinery for the redressal of consumer disputes and grievances under the Consumer Protection Act, 1986 is ‘quasi-judicial in nature’.
(v) A certification trade mark is a ‘trade mark’ under the Trade Marks Act, 1999. [June 2007, 3x5 = 15]
Answer:
(i) What are not Inventions:
1. If its use in contrary to law;
2. Mere discovery of new form of known substance or of living thing, or non-living thing;
3. Aggregation of property by mere mixture;
4. Re-arrangement or duplication of known devices functioning independently;
5. Method of agriculture or horticulture;
6. Process of medical treatment of human or animals or plants to render free of disease or increase their economic value;
7. Inventions based on traditional knowledge;
8. Inventions relating to atomic energy;
9. Frivolous or claims anything contrary to well established natural laws;
10. Intended use or commercial exploitation is prejudicial to plant, health, environment, etc.
11. Computer program (can be copyrighted)
12. Literary or artistic work (can be copyrighted)
(ii) Trade Practice [Section 2(u)]: “Trade Practice” means any practice relating to carrying on of any trade and includes:
(a) Anything done by any person which controls or affects the price charged or the method of trading, any trader or any class of traders;
(b) A single or isolated action of any person in relation to any trade.
(iii) Monopolistic Trade Practice – Illegal: Trade Practice, which has or likely to have any of the following effects in goods or services:
1. Unreasonable increase in price;
2. Unreasonably preventing or lessening competition;
3. Limiting technical development or capital investment;
4. Unreasonable deterioration of quality;
5. Unreasonable increase in Cost of Production;
6. Unreasonable increase in profits;
7. Preventing or lessening competition by unfair methods or deceptive practices.
(iv) Pecuniary Jurisdiction of Forums:
Forum/Commission Value/Compensation
District Below Rs.20 lakhs
State Rs.20 lakhs to Rs.1 crore
National Beyond Rs.1 crore
(v) Certification of Trademark: According to Section 2(1)(e), a trademark used in addition to users own trademark; certified by some Competent Person, in respect of certain characteristics of goods, like ISI mark.
1. Mark capable of distinguishing goods or services;
2. In connection with which it is used, in the course of trade;
3. Which are certified by proprietor of the mark (BIS in case of ISI);
4. In respect of origin, quality, etc. from goods or services, not so certified as such;
5. Proprietor of certificate in himself will not deal with the goods.
Q.41 Distinguish between the following:
(i) ‘Letter of intent’ and ‘industrial licence’.
(ii) ‘Intellectual property’ and ‘industrial property’. [June 2007, 5x2= 10]
Answer:
(i) ‘Letter of Intent’ and ‘Industrial Licence:
(ii) Intellectual Property: The term intellectual property relates to the creations of human mind and human intellect, this property is called Intellectual property. In other words, intellectual property relates to pieces of information which can be incorporated in tangible objects at the same time in an unlimited number of copies at different locations anywhere in the word.
Industrial Property: Industrial property is a kind of intellectual property and relates to creation of human mind, eg., inventions and industrial designs. In addition, industrial property includes trademarks, service marks, commercial names and designations, including indications of source and appellations of origin, and the protections against unfair competition.
Q.42 Attempt the following:
Mention the conditions subject to which a patent is granted under the Patents Act, 1970. [June 2007, 5x1 = 5]
Answer:
1. Form of Application and Provisional and Complete Specification:
(a) By true and first inventor either by himself/assignee/legal representative;
(b) By employer – invention in the course of employment;
(c) By original patent holder – for “Patent of Addition”;
(d) Not Eligible – employees in defence/railways/research establishments.
2. Contents of Specification
3. Publication of Applications
4. Request for Examination
5. Examination of Application
6. Search for Anticipation by Previous Publication and by Prior Claim
7. Consideration of the Report of Examiner by Controller
8. Power of Controller to refuse or require amended Application in certain matters
9. Power of Controller to make Orders respecting Date of Application and Cases of Anticipation
10. Potential infringement
11. Substitution of Applicants
12. Time for Putting Application in order for Grant
Q.43 (i) Mention the provisions of the National Environment Tribunal Act, 1995 relating to compensation for death, injury to a person and damage to property and environment.
(ii) Discuss the provisions of the Trade Marks Act, 1999 regarding assignment and transmission of registered trade marks. [June 2007, 5x2 = 10]
Answer:
(i) Major Provisions of the National Environment Tribunal Act, 1995:
1. Compensation for death, injury and damage arising out of any accident occurring while handling any hazardous substance;
An application to be made to Collector within 5 years.
2. Compensation on ‘strict civil liability’;
Penalty: Imprisonment upto 3 years or fine upto Rs.10 lakhs or both.
(ii) Assignment and Transmission of Registered Trademarks (Section 37 – 43):
Any registered or unregistered Trademark, with or without good of the business, the following trademarks cannot be assigned or transmitted:
1. Exclusive rights to more than 1 person for same goods or services causing confusion (or) exclusive rights to 1 person in part of India and same to other in other part of India;
2. In case of Trademark without goodwill, no application to Registrar is made for advertisement directions and 6 months have passed;
3. Certification of Trademark (but it can be assigned/transmitted with the consent of Registrar);
4. Associated Trademark (but it can be assigned/transmitted in whole);
Q.44 Discuss the following:
(i) Lay-off Compensation
(ii) Employee Welfare [June 2007, 5x2 = 10]
Answer:
(i) Lay-off Compensation:
a. If 50-100 employees are laid-off, then the Workmen who are in the service for more than 1 year may be compensated with 50% of Basic Pay + D.A. or by giving Alternate Employment.
Note: If Alternate employment is refused, no compensation will be paid.
b. In all other cases (i.e., less than 50 or more than 100 employees) or in case of Seasonal Establishment, lay-off requires prior approval of the Central Government.
Note: Lay-off can be half-day also and the employees may be asked to come in II half of the day.
(ii) Employee Welfare:
1. Washing facilities
2. Storing and drying clothing
3. First aid
4. Canteen
5. Shelter, Rest room, Lunch room
6. Creche
Q.45 With reference to relevant legal enactments, write short notes on of the following:
(i) Principles governing temporary injunction
(ii) Powers of the RBI to compound contraventions of foreign exchange transactions.
(iii) Secrecy of certain inventions [Dec. 2006, 3x3 = 9]
Answer:
(i) Principles Governing Temporary Injunction: Courts take into account the following well settled principles governing temporary injunction:
Cndn 1: Primary face case
Cndn 2: Irreparable Injury
Cndn 3: Balance of Convenience
(ii) Rule 4 of the Foreign Exchange (Compounding Proceedings) Rules, 2000 empowers the RBI to compound only quantifiable contravention committed by any person of the provisions of Section 7 or 8 or 9, or Third Schedule to the Foreign Exchange Management (Current Account Transactions) Rules, 2000 in the following manner:
(a) where the sum involved in such contravention is Rs.5,00,000 or below, by the Assistant General Manager of the RBI;
(b) where the sum involved in such contravention is more than Rs.5,00,000 but less than Rs.20,00,000 by the Deputy General Manager of India;
(c) where the sum involved in the contravention is Rs.20,00,000 or more but less than Rs.50,00,000 by the General Manager of RBI; and
(d) where the sum involved in such contravention is Rs.50,00,000 or more, by the Chief General Manager of the RBI.
(iii) Secrecy of Certain Inventions: Chapter VII of the Patents Act, 1970 containing Sections 35 - 40 in relation to secrecy of certain inventions. These sections empower the Central Government to use such inventions for security of the Country and also empower it to prohibit the publication of the information relating to such inventions by any person.
1. Section 35 deals with secrecy directions relating to inventions relevant for defence purposes.
2. Section 36 provides for periodical review of secrecy directions.
3. Section 37 deals with consequences.
4. Section 38 deals with revocation.
5. Section 39 prohibits residents from applying for patent outside India without the prior permission.
6. Section 40 deals with liabilities.
Q.46 “Every trade practice, which is in restraint of trade, is not necessarily a restrictive trade practice.” Comment. [Dec. 2006, 3x1 = 3]
Answer:
Every trade practice, which is in restraint of trade, is not necessarily a restrictive trade practice. Section 2(o) of MRTP Act, 1969 provides the definition of ‘restrictive trade practice’ being an exhaustive and not an inclusive, is result oriented, i.e., the term restrictive trade practice has been defined to mean a trade practice which has, or may have, the effect of preventing, distorting or restricting competition in any manner and in particular:
(i) which tends to obstruct the flow of capital or resources into the stream of production; or
(ii) which tends to bring about manipulation of prices, or conditions of delivery or to effect the flow of supplies in the market relating to goods or services, in such a manner as to impose on the consumers unjustified costs or restricts.
Q.47 Mention the classes of capital account transactions which are permissible to the persons resident in India under the Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000.
Answer: [Dec. 2006, 3x1 = 3]
Classes of Capital Account Transactions of Persons Resident in India
1. Investment in foreign securities by a person resident in India.
2. Foreign currency loans raised in India and abroad by a person resident in India.
3. Transfer of immovable property outside India by a person resident in India.
4. Guarantees issued by a person resident in India in favour of a person resident outside India.
5. Export/import or holding of currency or currency notes.
6. Loans and overdrafts by a person resident in India from a person resident outside India.
7. Maintenance of foreign currency accounts in India and outside India by a person resident in India.
8. Taking out of insurance policy by a person resident in India from an insurance company outside India.
9. Loans and overdrafts by a person resident in India to a person resident outside India.
10. Remittance outside India of capital assets of a person resident in India.
11. Sale and purchase of foreign exchange derivatives in India and abroad and commodity derivatives abroad by a person resident in India.
Conclusion: However, w.e.f. 5th February, 2004, a resident individual may draw subject to the provisions of Act or rules or regulations or directions or orders made or issued thereunder, from an authorized person, a foreign exchange not exceeding US$ 25,000 per calendar year for a capital account transaction specified in Schedule I, where the such drawal exceeds US$ 25,000 per calendar year, the limit specified in the regulations relevant to the transaction shall apply with respect to the drawal. It is to be noted that no part of the foreign exchange of US$ 25,000 drawn under aforesaid mentioned points can be used for remittance directly or indirectly to countries notified as non-co-operative countries and territories by Financial Action Task Force (FATF) from time to time and communicated by the RBI to all concerned.
Q.48 Write a brief note on ‘competition advocacy’ under the Competition Act, 2002.
Answer: [Dec. 2006, 3x1 = 3]
Competition Advocacy: Section 49 of the Competition Act, 2002 envisages that while formulating a policy on the competition, the Central Government may seek the opinion of CCI on possible effect of such a policy on the competition. On receipt of such a reference, the Commission is required to give its opinion to the Central Government, within 60 days of making such a reference and the latter may formulate the policy as it deems fit. The role of the Commission is advisory and the opinion given by the Commission is not binding upon the Central Government in formulating such a policy. The Commission has also been assigned the role to take prescribed suitable measures for:
(a) promotion of competition advocacy;
(b) creating awareness about the competition; and
(c) imparting training about competition issues.
Q.49 (a) Elaborate the powers of copyright owner in the event of infringement of his rights under the Copyright Act, 1957.
(b) State any five important grounds on which the grant of patent can be opposed under the Patents Act, 1970. [Dec. 2006, 5x2 = 10]
Answer:
(a) Section 58 entitles the owner of the copyright to initiate proceedings for the possession of infringing copies and other materials related thereto. In this context, the section clarifies that all infringing copies of any work in which copyright subsists and all plates used or intended to be used for the production of such infringing copies shall be deemed to be the property of the owner of the copyright.
(b) Section 25(1) stipulates the following grounds for opposition to grant of patent:
1. The applicant for the patent wrongfully obtained the invention or any part thereof from a person under or through whom he claims;
2. The invention so far as claimed in any claim of the complete specification
a. has been published before the priority date of the claim in any specification filed in pursuance of an application for a patent;
b. is claimed in a claim of a complete specification published on or after the priority date of the applicants claim and filed in pursuance of an application for a patent;
c. was publicly known or used in India before the priority date of that claim.
3. The subject of any claim of the complete specification is not an invention or is not patentable under the Act.
4. The complete specification does not sufficiently describe the invention or the method by which it is to be performed;
5. The applicant has failed to disclose to the Controller, the required information in which any material particular is false to his knowledge;
6. In the case of a convention application, the application is not made within 12 months from the date of the first application for protection of the invention made in a convention country by the applicant or a person from whom he derives title, but on no other ground.
Q.50 A newly-wedded couple Anand and his wife Anjali had gone to Kathmandu for their honeymoon. They could not return in time to attend the reception as the airline authorities failed to inform them about cancellation of their return flight. They lodged a complaint with the consumers’ forum for grant of compensation. However, the airline authorities pleaded that the mistake was on the part of their agent whom the airlines authorities had informed about the cancellation of the flight. Will they succeed in getting compensation? Give reasons in support of your answer. [Dec. 2006, 5x1 = 5]
Answer:
In the case of (Case Law: M/s. Indian Airlines, Delhi & Others vs. S.N. Seth & Others), the Continental Travel Service (Delhi) Pvt. Ltd., an agent, of Indian Airlines issued confirmed ticket from Lucknow to Delhi on a day when there was no flight. Setting aside the order of the State Commission and dismissing the appeal with cost NCDRC held that it is a clear case of deficiency in service for which Indian Airlines, the principal is liable.
The National Commission held that travel agent is the agent of the Indian Airlines and it acts on behalf of its Principal, the Indian Airlines. If for any negligent act of agent loss is caused to the third party principal is certainly liable. By issuing air ticket on behalf of the Indian Airlines a contract has been entered into between Customer and Indian airlines. In such circumstances principal would certainly be bound by the terms of the contract.
NCDRC relied on Supreme Court decision in (Marine Container Services South Pvt. Ltd. vs. GO Garments), wherein SC observed that Contract Act applies to the complaints filed under the Consumer Protection Act, 1986. The Supreme Court observed that “We are not a little surprised to read that the Contract Act does not apply to complaints filed under the Consumer Protection Act. The Contract Act applies to all the litigants before the Commission under the Consumer Protection Act included. Whether in proceedings before the Commission or otherwise, an agent is entitled to invoke the provisions of Section 230 of the Contract Act and, if the facts found support him, his defence based thereon cannot be brushed away.
In view of the aforesaid decision, Anand and Anjali can succeed in their claim for compensation against Airline Authorities under Consumer Protection Act for deficiency in service. As the agent acted negligently, Airline Authorities are liable as principal for the loss to third party.
Q.51 (a) Enumerate the main provisions of the Public Liability Insurance Act, 1991.
Objective of the Public Liability Insurance Act, 1991. [Dec.2008, 3x1=3]
(b) Describe briefly the procedure to be adopted when a sample of water from any trade effluent, which is passing from any plant into a stream or well, is taken for analysis under the Water (Prevention and Control of Pollution) Act, 1974. [Dec. 2006, 5x2 = 10]
Answer:
(a) Purpose of Enactment: The Public Liability Insurance Act, 1991 has been enacted for the purpose of providing immediate relief to the persons affected by accidents occurring while handling any hazardous substance and for other incidental and connected matters.
Purpose of Enactment: The Public Liability Insurance Act, 1991 has been enacted for the purpose of providing immediate relief to the persons affected by accidents occurring while handling any hazardous substance and for other incidental and connected matters.
Major Provisions of the Act
Section 2 - Definitions
Section 3 - Liability to give Relief
Section 4 - Compulsory Insurance: Insurance for maximum Rs.37,500 including medical expenses of Rs.12,500 in case of death and total disablement; (Rs.6000 to Third Party and Rs.1000 p.m. for 3 months, in case of partial disablement and medical expenses of Rs.12,500/-)
Section 5 - Verification and Publication of Accident: Collector verifies any occurrence of accident within any jurisdiction.
Section 6 - Application for Claim for Relief
(a) Inviting application claiming for relief;
(b) Application can be made by proper owner or authorized representative;
(c) In case of death, legal heirs of the deceased.
Section 7 - Award of Relief of the Act: Inquiry shall be conducted after giving an opportunity of being heard; pass an ‘award’ determining the amount to Collector; the insurer shall deposit the same within 30 days of award to Collector; Collector transfers such amount to relief fund and pays relief to claimants out of relief fund.
Section 7A - Establishment of Environment Relief Fund
Section 9, 10 and 11 - Power to Call for Information, Entry and Inspection etc.: Section 12 - Power to give Directions
Section 14-18 - Offences and Penalties
(b) Section 21(3) of Water (Prevention and Control of Pollution) Act, 1974 provides that when a sample of any sewage or trade effluent is taken for analysis, the person taking the sample shall:
(a) serve on the person who is incharge of the plant or vessel or in occupation of the place or any agent of such occupier, a notice, then and there in such form and manner as may be prescribed, of his intention to have it so analysed;
(b) divide the sample into two parts in the presence of the occupier or his agent;
(c) each part to be placed in a container which shall be marked, sealed and signed by both the person;
(d) send one container forthwith to the laboratory established or recognized by the Central Board, in case such sample is taken from any area situated in the Union Territory, and in any other case, to the laboratory established or recognized by the State Board; and
(e) on the request of the occupier or his agent, send the second container to Central Water Laboratory in case such sample is taken from any area situated in the Union Territory and in any other case, to the State Water Laboratory.
Q.52 Discuss the following:
(i) Contract of apprenticeship
(ii) Industrial discipline [Dec. 2006, 5x2 = 10]
Answer:
(i) Contract of Apprenticeship: As per Section 4 of the Apprentices Act, 1961, before undergoing any apprenticeship training, there should be a contract between the employer and the person intending to be engaged as an apprentice. If a person is a minor, then his guardian shall enter into a contract with the employer. The contract may contain such terms and conditions as may be agreed to by the parties to the contract. In case, the Central Government after consulting the Central Apprenticeship Council makes any rule varying the terms and conditions of apprenticeship training of any category of apprentices undergoing such training then the terms and conditions of every contract relating to that category of apprentices and subsisting immediately before the making of such rule shall be deemed to have been modified accordingly.
(ii) Industrial Discipline: Discipline is basic to the successful accomplishment of maximum co-operation and conducive normal employee behavior and orderliness that ultimately benefits the industry and the people working in industry.
The major objectives of Industrial discipline are:
(i) get co-operation of subordinates within the framework of company’s policy for fulfilling the goals of the company;
(ii) to reform the offender causing displeasure, deter others from making the same mistake.
Discipline may be classified into two types:
(i) Enforced discipline or negative discipline and
(ii) Self imposed or positive discipline
Under negative-discipline, persons are forced to obey orders to perform their task according to set rules and regulations of the organization. Positive discipline refers to creation of an attitude and organization climate in which the employees willingly confirm to rules and regulations.
Personnel Policies:
(i) Policy on recruitment and selection;
(ii) Policy on manpower planning and development;
(iii) Policy on industrial relations;
(iv) Policy on communication with employees at all levels;
(v) Policy on grievance handling.
Q.53 With reference to relevant legal enactments, write short notes on the following:
(i) Industrial undertaking
(ii) Surrender of patents
(iv) Money laundering
(v) Deemed exports. [June 2006, 3x6 = 18]
Answer:
(i) Industrial Undertaking: Section 3(d) of Industries (Development & Regulation) Act, 1951, defines industrial undertaking means any undertaking pertaining to a scheduled industry carried on in one or more factories by any person or authority. If the number of workers is less than 50 (with aid of power) or 100 (where no power is used), it will not be a factory or undertaking for the purpose of this Act. The basic feature expected to be present is the existence of factory which carry on some manufacturing process.
(ii) Surrender of Patents: Section 3 of the Patents Act, 1970 deals with surrender of patents and entitles the patentee to surrender the patent at any time by giving notice to the Controller in the prescribed manner. The Controller on receipt of such an offer is under an obligation to advertise the offer in the prescribed manner. Any person interested give notice to the Controller of Opposition to the surrender, within the prescribed period after such an advertisement, and where any such notice is given the Controller shall notify the patentee. If the Controller is satisfied after hearing the patentee and any opponent desirous of being heard that the patent may properly be surrendered, he may accept the offer and by orders, revoke the patent.
(iii) Money Laundering: Money laundering is the process of criminal proceeds to disguise its illegal origin. Terrorism, illegal arms sales, financial crimes, smuggling, and activities of organized crime, including drug trafficking and prostitution rings, generate huge sums. Embezzlement, insider trading, bribery and computer fraud also produce large profits and create an incentive to legitimize the ill-gotten gains through money laundering. When a criminal activity generates substantial profits, the individual or group involved in such activities route the funds to safe heavens by disguising the sources, changing the form, or moving the funds to a place where they are less likely to attract attention. The prevention of Money Laundering Act, 2002 deals with the problem of money laundering in India.
(iv) Deemed Exports: Deemed Exports means those transactions in which the goods supplied do not leave the country and the payment for such supplies is received either in Indian Rupees or in free foreign exchange. Deemed exports are eligible for benefits in respect of manufacture and supply of goods. These include advance licence for intermediate supply, deemed export/DFRC or DFRC for intermediate supply, deemed export drawbacks and exemption from terminal excuse duty in certain cases.
Q.54 Define the terms ‘acquisition’, ‘competition’ and ‘cartels’. [June 2006, 6x1 = 6]
With reference to relevant legal enactments, write short notes on Cartels.
Answer: [Dec. 2006, 3x1 = 3]
Acquisition: Section 2(a) of the Competition Act, 2002 defines the term acquisition as to mean, directly or indirectly, acquiring or agreeing to acquire shares, voting rights or assets of any enterprise or control over management or control over assets of any enterprise.
Competition: The term “Competition” is not defined in the Act.
Cartels: Section 2(c) of the Competition Act, 2002 defines cartels as to include an association of producers, sellers or distributors, traders or service providers who by agreement amongst themselves, limit or control or attempt to control the production, distribution, sale or prices or trade in goods or provision of services.
Q.55 Mention any six functions of Development Councils set-up under the Industries (Development and Regulation) Act, 1951. [June 2006, 3x1 = 3]
Answer:
The Industries (Development & Regulation) Act, 1951 assigns following functions to Development Council:
1. Recommending targets for production, coordinating in programmes and reviewing progress from time to time.
2. Suggesting norms of efficiency with a view of eliminating waste, obtaining maximum production, improving quality and reducing costs.
3. Recommending measures for full utilization of installed capacity and for improving work in the industry, particularly the less efficient units.
4. Promoting arrangements for better marketing and helping in devising a system of distribution and sale of produce of the industry.
5. Promoting standardization of products.
6. Assisting the distribution of controlled materials and promoting arrangements for obtaining materials for the industry.
Q.56 Discuss the exemptions from the provisions relating to holding, realisation and repatriation of foreign currency under the Foreign Exchange Management Act, 1999. [June 2006, 4x1 = 4]
Answer:
Exemptions under Section 4
Realization and Repatriation: Section 8 imposes conditions on the person resident in India to make all reasonable efforts to realize and repatriate foreign exchange due or accrued as per the directions of the RBI. However, Section 9 provides some exemptions from the above provisions under certain circumstances. Accordingly, possession of foreign currency and coins by any person and foreign exchange acquired from employment, business, trade, vacation, services, etc., to a certain limit specified by RBI is permitted.
Q.57 Briefly mention the policy initiatives taken by the government to pave way for consumer protection in the country. [June 2006, 3x1 = 3]
Answer:
In India, there a number of general enactments, other than the law of torts, which ultimately aimed at protection of consumer interests. However, the Consumer Protection Act, 1986 is a special legislation providing for better protection of interest of the consumers. This Act provides for simple, quick and easy remedy to consumers under a three-tier-quasi-judicial redressal system at the Distrct, State and National levels. To make the Act more effective and meaningful, necessary changes have been brought by Consumer Protection (Amendment) Act, 2002 which came into force w.e.f. 15th March, 2003.
.
Q.58 (a) State the grounds under which registration of a trade mark can be refused.
(b) Mention the inventions which are not patentable under the Patents Act, 1970.
[Dec. 2008, 5x1 = 5]
Answer: [June 2006, 5x2 = 10]
(a) Grounds for Refusal of Trademark:
(I) Absolute grounds for Refusal of Registration of Trademark (Section 9(1)):
Common or non-distinctive, in the market place, at the time of registration:
Devoid of any distinctive character;
Consists exclusively of marks or indicating used in trade to designate quality, quantity, intended purpose, etc.
Marks become customary in current language or establish trade practices.
Certain marks prohibited under Emblems and Names (Prevention of Improper Use) Act, 1950.
Consists exclusively of shape or which is necessary to obtain technical result or which gives substantial value to the goods.
Note: 1. Trademark as a whole to be distinctive to be registered.
2. If a mark acquired distinct character as a result of use or well-known
Trademark before application cannot be refused on any ground.
(II) Relative Founds for Refusal of Registration of Trademark:
Trademark identical or similar to earlier trademark.
Single colour cannot be registered but a combination of colours can be registered.
Likely confusion, in case of similar goods.
Shall not be registered if earlier trademark is well known.
In case of Honest Concurrent use, but conditions are not fulfilled.
Use of name of living or dead persons within 20 years without Consent.
(b) Inventions not Patentable: Section 3 of the Patents Act, 1970 provides that the following are not inventions and hence not patentable:
1. If its use is contrary to law.
2. Mere discovery of new form of known substance or of living thing, or non-living thing.
3. Aggregation of property by mere mixture.
4. Re-arrangement or duplication of known devices functioning independently.
5. Method of agriculture or horticulture.
6. Process of medical treatment of human or animals or plants to render free of disease or increase their economic value.
7. Inventions based on traditional knowledge.
8. Inventions relating to atomic energy.
9. Frivolous or claims anything contrary to well established natural laws.
10. Intended use or commercial exploitation is prejudicial to plant, health, environment, etc.
11. Computer program (can be copyrighted).
12. Literary or artistic work (can be copyrighted).
Q.59 (a) Describe the powers of the National Environment Appellate Authority.
(b) State briefly the principles of sustainable development.
[June 2006, 5x2 = 10]
Concept of sustainable development [June 2008, 3x1 = 3]
Write a brief note on the principles of sustainable living.
Answer: [Dec. 2006, 5x1 = 5]
(a) Powers of the National Environmental Appellate Authority: Section 12 of the National Environment Appellate Authority Act, 1997 conferred the following powers:
1. Summoning and enforcing the attendance of any person and examining him on oath.
2. Inquiring the discovery and production of documents.
3. Receiving evidence on affidavits.
4. Subject to the provisions of the Indian Evidence Act, 1872 requisitioning any public record from any office.
5. Issuing summons for the examination of witnesses or documents.
6. Reviewing its decisions.
7. Dismissing a representation for default or deciding it exparte.
8. Setting aside any order.
9. Any other matter which may be prescribed by the Central Government.
(b) Sustainable Development: Sustainable development refers to the interdependence of environmental, social and economic systems and promotes equality and justice through people empowerment and a sense of global citizenship.
1. Polluter Pays Principle: This is one of the core principles of sustainable development. This recognizes that the polluter should pay for any environmental damage caused and the burden of proof otherwise lies with the polluter.
2. Precautionary Principle: This principle urges a willingness to take action in advance of scientific proof of evidence of the need for the proposed action on the grounds that further delay could prove ultimately most costly to society, nature and selfish and unfair to future generations.
3. Preferable Futures: This principle includes those which we positively hope for and work to create. In context of sustainable development, a preferable future includes a cleaner environment, a sustained level of economic development but not involving excess waste and pollution, and the protection of natural resources and biodiversity.
Q.60 Discuss the following:
(i) Principles governing domestic inquiry.
(ii) Social security. [June 2006, 5x2 = 10]
Answer:
(i) Principles Governing Domestic Inquiry:
(a) The enquiry should be conducted by an unbiased person.
(b) He should conduct enquiry impartially, objectively and fairly.
(c) The employee should be given a fair opportunity to defend himself.
(d) If any criminal proceeding is pending against the employee, the Enquiry Officer need not wait for the completion of those proceedings. (Case Law: Kushal Bhim)
(e) Preliminary enquiry is fact finding and differs from domestic enquiry.
(f) Proper procedure, rules and regulations, principles of natural justice should be followed while conducting enquiry.
(g) The enquiry officer should report whether changes are proved or not.
(ii) Social Security: In India, social security measures draw their strength from the Directive Principles of State Policy under the Article 41 of the Constitution, which inter-alia, enjoins upon the State, to strive to promote the welfare of the people by securing and protecting, as effectively as it may, a just economic and social order. The principal social security legislations are:
1. The Employees State Insurance Act, 1948.
2. The Employees Provident Funds & Miscellaneous Provisions Act, 1952.
3. The Maternity Benefit Act, 1961.
4. The Payment of Gratuity Act, 1972.
5. The Workmen’s Compensation Act, 1923.
Q.61 Attempt the following stating relevant legal provisions:
(i) Muskan Theatre is maintaining a canteen and a cycle stand through private contractors. Regional Director, ESI Corporation sent notices to the management of the theatre for contribution of the employees engaged in the canteen and cycle stand. The management contends that they are not employees but are the workmen of the contractor. Hence, the management is not liable. Will the management succeed in its contention ?
(ii) Rajat, a workman in a factory, had no vision in his left eye but the defect was not visible. Later, during welding operations, accidentally, a spark hit his blind eye. He lost his eye-ball and the blindness became visible. Though, there was no physical disability, he lost his employment because the defect became visible. Has the accident caused any disablement ? Is the employer liable to pay any compensation ?
(iii) The workman of Bharat Chemicals went on go-slow strike to compel the management to concede to their demands. The management contended that go-slow is a serious misconduct and initiated disciplinary action against the erring workmen. Is the action of the management justified ?
(iv) An employer failed to pay his contribution under the Employees’ State Insurance Act, 1948. After 6 years, the ESI Corporation issued a demand notice for payment of arrears of contribution. The employer contended that the arrears of contribution beyond 5 years are not recoverable. Will the employer succeed ?
(v) Rohit lost his mental balance as a result of an injury by accident and committed suicide. Is the employer liable to pay compensation under the Workmen’s Compensation Act, 1923 ? [June 2009, 4x5 = 20]
Q.62 Attempt the following stating relevant legal provisions and case law, if any :
(i) A contractor made short payment of wages to a worker employed by him as contract labour. The worker sought the amount due from the principal employer.
Will he succeed ?
(ii) The services of workmen engaged on casual basis for doing a particular urgent work were terminated after the completion of the said work. Workmen sought compensation as the termination amounted to retrenchment. Will they succeed ?
(iii) Workmen of an electricity generation station claimed that their unit is covered under the definition of ‘factory’ considering the process of transforming and transmission of electricity generated at the power station as a ‘manufacturing process’. Will their claim succeed ?
(iv) An employee contended that subsistence allowance given during the period of his suspension should be included in his total wages for the purpose of calculation of bonus entitlement. Will he succeed ?
(v) The company declined to pay gratuity to a deceased employee’s wife stating that the employee had worked for two years only whereas eligibility for receiving gratuity accrues only if he served for a period of five completed years of continuous service. Will she succeed ?
(vi) An establishment discontinued deduction towards contribution to provident fund from its employees’ salary and stopped remitting contribution of its share of provident fund when the number of its employees on rolls fell to fifteen. Do the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 cease to be applicable to the establishment under such circumstances ? [Dec. 2008, 4x6 = 24]
Q.63 Attempt following stating relevant legal provisions & decided case law, if any:
(i) All the partners of a firm were in full-time employment and worked in the premises of a factory. They sought all the benefits as entitled to the workers under the Factories Act, 1948. Will they succeed ?
(ii) A workman while returning home after duty was murdered by miscreants within the premises of the employer. The miscreants had no relationship with the employer. The deceased workman’s wife sought compensation from the employer. Will she succeed ?
(iii) The employees of a bank went on strike for a portion of a day. The bank deducted wages against the amount due to them in a month treating the period of strike as absent from duty. There was no provision in the contract of employment for deduction of wages for the period for which the employees refused to work although work was offered to them. Is the bank justified in deducting their wages?
(iv) In a factory, the canteen was run by a contractor who used to bring his workers for working in the canteen. These workers later on claimed that they were entitled to salary and other monetary benefits like other regular employees of the factory. Will they succeed ?
(v) A contractor was entrusted with the repairs of a defective chimney of a company. A workman engaged by him was injured while carrying out repairs in the premises of the company. The workman claimed compensation from the company. Will he succeed ?
(vi) After appointment of employees on regular rolls, a bank found, on scrutiny, that one of such employees was irregularly appointed. His appointment was thus, terminated. The aggrieved employee approached the court against the action of termination by the bank. Will he succeed ? [Dec. 2008, 3x6 = 18]
Q.64 Attempt the following:
(i) Rajesh made a complaint before the Consumer Disputes Redressal Forum for seeking compensation against the State Electricity Board contending that due to fluctuations and fall in electricity voltage in his small scale industrial unit, he suffered production loss. Will he succeed ?
(ii) Mention the salient features of the Supreme Court judgement in the matter of M.C. Mehta and Another vs. Union of India and Others (1987) relating to liability for pollution.
(iii) After the date of booking for purchase of a car, Rakshit was asked to pay differential amount of increase in the central excise duty at the time of delivery of the car. Rakshit refused to pay the amount and moved the Consumer Disputes Redressal Forum. Will he succeed ? [June 2008, 5x3=15]
Q.65 Attempt following stating relevant legal provisions and decided case law, if any:
(i) The workers in a factory went on sit-down strike resulting in stoppage of work. The management sought the help of the police and removed them forcibly when they refused to vacate the premises and indulged in violence. Later on, the organisation dismissed those workers. The workers claimed immunity from criminal action under the Trade Unions Act, 1926. Will they succeed ?
(ii) An electrician, who had to go frequently to a heating room from a cooling plant, contracted pneumonia which resulted in his death. Will it be construed as ‘physical injury’ ?
(iii) An employee was suspended, but after an inquiry, he was reinstated with full back wages. He claimed bonus for the period of suspension. Will he succeed ?
(iv) A worker went on leave. He continued to remain absent from duty even after the expiry of leave. The employer treated the ‘absence from duty without leave’ as breach of continuity of service for the purposes of the Payment of Gratuity Act, 1972. Is the employer justified ?
(v) The workers in a factory went on strike. The strike was legal. The employer deducted wages for the strike period on the ground that the legality of strike did not always exempt the workers from deduction of their wages for the period of strike. Was the employer’s action justified ?
[June 2008, 3x5 = 15]
Q.66 Attempt following stating the relevant legal provisions and case law, if any:
(i) An employee was dismissed from service for an act of misconduct. The company did not pay any bonus to the dismissed employee for the accounting year in which the dismissal took place. Is the action of the company justified?
(ii) A notice of dismissal is given by an employer to Mukesh, an employee who is in receipt of sickness benefit under the Employees’ State Insurance Act, 1948. Has the employer the right to dismiss Mukesh during the period he is in receipt of sickness benefit ? Give reasons.
(iii) While working on a machine, a worker accidentally drops a valuable testing appliance which becomes defective. The employer deducts the value of the appliance from the wages of the worker. Is the deduction justified under the Payment of Wages Act, 1936 ?
(iv) A Municipal Board entrusted electrification work of a town to State employees. A workman employed by the State received injuries while doing his work. Who is liable to pay compensation to the workman and why ?
(v) Dare Davil Ltd. has no industrial dispute pending in any labour court. In order to rationalise working conditions, it wants to change hours of work, leave with wages, and holidays. Can the company do so ?
(vi) Navratna Public Sector Undertakings have factories throughout the country. These undertakings have an impeccable record of best welfare measures and working conditions. Do these undertakings still require to appoint welfare officers in their factories ?
(vii) Efficiency Ltd. is in the process of reorganisation of its business. It is likely to result in some labour being rendered surplus. It has proposed retrenchment of economic dead weight. Can the company do so ?
[Dec. 2007, 3x7 = 21]
Q.67 Attempt the following stating relevant legal provisions and case law, if any:
(i) Rajat was suspended from service by the company. He was subsequently reinstated with full back wages. The company refused to pay bonus for the period of his suspension. Is Rajat entitled to get bonus for the period of his suspension ?
(ii) Arpit was dismissed from service for an act of misconduct. The company did not pay him any bonus. Arpit contended that he was eligible for payment of bonus for the accounting year in which dismissal took place. Will he succeed ?
(iii) Jay-Kay Ltd. employed casual workmen for a short duration of two months to execute a contingency plan of its operations. Are the casual workmen entitled for provident fund contribution from the employer ?
(iv) Kailash, a teacher in a private school having a basic salary of Rs.3,500 per month, claims gratuity from the school management when he resigned from the service after serving for a period of 12 year. Will he succeed?
(v) Cement Employees’ Union took up the case of a dismissed non-union member employee and raised an industrial dispute. The management of the company contended that the employee was not a member of any union recognised by the company and, therefore, there cannot be any industrial dispute in this case. Will the employer’s stand succeed ?
[June 2007, 3x5 = 15]
Q.68 Attempt the following stating the relevant legal provisions and case law, if any:
(i) There was a canteen and a cycle stand run by a private contractor in a theatre premises. Is the theatre owner liable to pay ESI contribution as ‘principal employer’ ?
(ii) Prem and Qureshi established a legal consultancy firm. They employed three law graduates, a stenographer and a typist to assist the firm. After five years, the services of the stenographer were terminated without assigning any reason. He raised a dispute before the Labour Court asking for reinstatement or retrenchment compensation as contemplated by the Industrial Disputes Act, 1947. Will he succeed ?
(iii) Sameer died suddenly while working in a factory. The workmen refused to resume work to express solidarity with the deceased worker. Does the action of the workmen amount to strike under the Industrial Disputes Act, 1947 ?
(iv) Rajesh was occupying service quarters of the company. After his retirement, he did not vacate the quarters. In retaliation, the company withheld the gratuity payable to him. Is the action of the company justified ?
(v) Fragile Ltd. was running in continuous losses for 5 years. As a result, the company’s financial position worsened. The company declared lay-off of 10 of its employees. The employees protested the lay-off. Is the action of the employer justified ?
(vi) A union of dock workers demanded higher wages for its members from the dock owners which was refused by the owners contending that there was stiff competition. Aggrieved by this, the union asked its members not to handle any work and this affected the trade of many producers and they brought action against the union officials for this tortuous act. Can the union officials be held liable under the Trade Unions Act, 1926 ?
[Dec. 2006, 3x6 = 18]
Q.69 Attempt the following stating the relevant legal provisions and case law, if any:
(i) A development officer of an insurance company used to remain absent from duty without leave. He was asked to show cause why he should not be removed from the service. He sent his reply. Thereupon, he was removed from the service without holding any inquiry. Is the removal justified ?
(ii) There was a dispute between the management of Daisy Mills Ltd. and its workers’ union on the issue of wage revision. During the arbitration proceedings, the workers’ union decided to go on strike. Is the decision of the workers’ union lawful ?
(iii) The workers of a factory gheraoed the factory manager at the factory premises and restrained him for 2 hours. During this period, there was no assault on the manager or any kind of criminal trespass. Will the workers be liable for having committed an offence under the Trade Unions Act, 1926 ?
(iv) The Board of directors of a company appointed its deputy general manager, who controlled the operational activities of the factory, as its ‘occupier’. The Chief Inspector of Factories (CIOF) did not approve the appointment. Can the company succeed against the CIOF for having refused to accept its senior functionary’s appointment as the ‘occupier’ ?
(v) While fixing total remuneration, the employer included travelling allowance as part of the remuneration of an employee. The employee claimed that the employer has to include travelling allowance also for the purpose of payment of contribution towards ESI fund. Will he succeed ?
(vi) Ramesh was occupying service quarters of a company at the time of retirement. He did not vacate the house after retirement. The company withheld the payment of gratuity to the retired employee on this ground. Can Ramesh claim the payment of gratuity and succeed against the employer ?
(vii) Due to accumulation of stocks, the company declared lay-off for 5 days. The workers’ union protested that it was not the legal right of the employer to lay-off the workers and that they should be paid full wages for the period of lay-off. Will they succeed in a court of law, if the employer refuses to concede to their demand?
(viii) Manmauji, an employee, was suspended for an alleged misconduct. An inquiry was conducted and the charges against him could not be proved. As a result, he was reinstated with full back wages. The employee was, however, not paid bonus for the period of suspension. Can he challenge the employer’s action ? [June 2006, 3x8 = 24]
All the best … RAGHU
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