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Authored by Lakshmi Rengarajan

Promoters of listed companies that do not expeditiously redress investor complaints will have their shareholding frozen as per SEBI’s circular SEBI/HO/OIAE/IGRD/CIR/P/2020/152 dated 13th August 2020, (to be effective from 1st September 2020) in respect of complaints specified in List 1 below.

By this circular, SEBI has shifted the responsibility of monitoring the complaint redressal to the designated stock exchange (“DSE”), in respect of complaints received on the SCORES platform (“Scores”), that are not redressed within a period of 30 days of its receipt. The DSE is now empowered to decide if the compliant has been redressed adequately.

In cases where the DSE views that a complaint is not adequately redressed, or is pending for more than 30 days, the DSE is required to give a reminder to the company to resolve within another 30 days and file an Action Taken Report (“ATR”).

If by the 60th day there is no redressal/ATR, then the DSE is empowered to impose a penalty of Rs. 1,000/- for each day of delay in redressal. Where the penalty is not paid within 15 days of the notice for payment and/or no ATR filed for the complaint, then DSE is to escalate it to the promoters of the company for compliance within the 86th day of receipt of the complaint.

Even after escalation to the promoters, there is no resolution/payment of the penalty, then DSE will intimate the depositories where the promoter/promoter group shares are held to freeze not just their holding in the defaulting company, but also their other shareholding.

With respect to companies having pending complaints exceeding 20 or value of which is more than Rs.10 lakhs, the DSE is required to transfer the matter to SEBI for further actions.

Company will be treated as compliant, and the demat accounts of the promoter will be unfrozen only upon the redressal of the complaint and the payment of the outstanding fines.

LIST – 1

Nature of complaints for which the circular is applicable

1. Non updation of address /Signature or Corrections etc

2. Non-receipt of Bonus

3. Non receipt of Dividend

4. Non receipt duplicate debt securities certificate

5. Non-receipt of duplicate share certificate

6. Non receipt of fractional entitlement

7. Non receipt of interest for delay in dividend

8. Non receipt of interest for delay in payment of interest on debt security

9. Non receipt of interest for delay in redemption proceeds of debt security

10. Non receipt of interest for delay in refunds

11. Non receipt of interest on securities

12. Non receipt of redemption amount of debt securities

13. Non receipt of refund in Public/ Rights issue

14. Non receipt of Rights Issue form

15. Non receipt of securities after conversion/ endorsement/ consolidation/ splitting

16. Non receipt of securities after transfer

17. Non receipt of securities in public/ rights issue

18. Non receipt of shares after conversion/ endorsement/ consolidation/ splitting

19. Non receipt of shares after transfer

20. Non receipt of shares after transmission

21. Non receipt of shares in public/ rights issue (including allotment letter)

22. Non-receipt of interest for delay in dispatch/credit of securities

23. Receipt of refund/ dividend in physical mode instead of electronic mode

24. Receipt of shares in physical mode instead of electronic mode

25. Demat/Remat

Rule based governance of Indian companies was ushered in by the Companies Act, 2013 and the related rules. The rules even went to the extent of prescribing matters to be stated by directors if they were to attend meetings by video conferencing. The rules traversed into areas that the law did not, and at times the law stated matters that were increasing duplication of information.

One such requirement was to append an “Extract of Annual Return” in the board’s report. This only contributed to the size of the annual reports of companies by adding some 10 pages. The primary information in an extract of annual return was the information about shareholding pattern and indebtedness of the Company.

For listed companies, the information about shareholding is  already available in public domain. For unlisted and private companies, the information on the format provided by MCA had more NIL’s than data, which only resulted in companies having to use more paper!.

The Companies Law Committee [“2016 CLC”], by its report in February 2016, recommended to omit the provisions relating to extract of annual return, and suggested to provide the annual return on the website of the company, if it has one, and provide the weblink in its board’s report. With email annual reports becoming the norm, access from such electronic documents to the data contained in the annual return to a shareholder becomes easy.

This recommendation of the 2016 CLC, found way into the Companies (Amendment) Act, 2017, which also received the Presidential assent on the 3rd January 2018.

However MCA chose to notify the provision amending this on the 28th August 2020, well after most of the listed companies had finished holding their AGM after sending the annual reports.

With this, the enactment does away with the concept of “Extract of Annual Return”, and any format prescribed by the rules for this is beyond the scope of the law.

But there seems to be a conundrum in the minds of the decision makers in the MCA with regard to the extracts, and despite the law doing it away, instead of deleting the provision prescribing the format for the “extracts”, MCA has chosen to retain the provision in the rules and also added a proviso to that rule, and the language of which has now added a new dimension into discussion, what about companies that have no web-site?

It is now a settled law, that the delegated legislation cannot go beyond the statute, and since, the provision in sub-section (3) of section 92 of Companies Act, 2013, that mandated an extract of annual return to be in the format prescribed and form part of the board’s report, stands replaced with the new provision, it would be sufficient compliance for companies that do not have a website, to file it with the registrar of companies within 60 days of their annual general meeting.

One has to thank MCA for contributing to the environment by doing away with this requirement, so that all companies – listed, unlisted public companies and private companies can reduce the size of their board’s report.

Authored by R. Padma Akila

In the matter of:  Insider Trading in the scrip of Indiabulls Real Estate Limited (“Company” / “IBREL”) Date of the order: 10.07.2020

Provisions invoked:

Section 12A[1] (d) and (e) of SEBI Act, 1992, read with Regulation 4(1)[2] of SEBI (PIT) Regulations, 2015

Facts of the case:

1. SEBI, on analysing the trading activity in the scrip of the Company had found the trading pattern of its CFO (“Noticee”), suggesting that he may have sold 10,000 shares (on 12.06.2017) of the Company, on the basis of unpublished price sensitive information (UPSI).

2. The alleged UPSI in this case was the decision to sell 4.25 Crore shares held by its promoter entity IBREL IBL Scheme Trust (“Trust”) to raise funds for its ongoing businesses and general corporate purposes.

3. The decision to sell the shares held by the Trust (the sole beneficiary of the Trust was the Company) was taken at a meeting of the operation committee of the Company on 08.06. 2017, which was attended by the Noticee, as an invitee.

4. When the information about the sale of shared by the promoter Trust became public (on 22.06.2017), the scrip fell by 9.80% on NSE and 9.76% on BSE in a single day.

Noticee’s defence:

1. He was not a `Connected Person’ as the decision to sell the shares was taken by the Trust, and that he had no relationship with the Trust.

2. He had obtained pre-clearance from the compliance officer of the company before selling the shares.

3. He had sold the shares received on the exercise of the ESOP provided by the Company.

4. The sale of his shares was not “motivated” by any information/UPSI, and he had wanted to sell the shares in 2017, to generate liquidity, but got to sell it only then.

Decision of the AO:

1. The AO, after considering the submissions of the Noticee, and the information available from the investigation (which were also shared with the Noticee) recorded the following findings:

(a) The information about the sale of shares by the Trust, was UPSI, which originated on 08.06.2017, the date the operations committee of the Company authorised the trustees of the Trust to sell the shares, and that it remained UPSI till 22.06.2017.

(b) The CFO of the Company was a `Connected Person’, and hence an `Insider’ within the meaning of the SEBI (PIT) Regulations, 2015, and he was in possession of the UPSI, having attended the meeting of the operations committee, where the UPSI emerged.

2. Regulation 4(1) of the SEBI(PIT) Regulations, 2015, makes it clear that a trade executed by an `Insider’ while being in possession of UPSI shall be presumed to be motivated by the knowledge of such UPSI, and the legislative note to Regulation 4(1), reaffirms the same.

3. The AO’s orders states that the only way to prove the insider’s innocence against the violation of Regulation 4(1) would be by establishing that any of the circumstances under the proviso (i), (ii) or (iii) [as it stood at the time of the purported offence] had existed for the insider to trade while being in possession of UPSI.

4. With respect to the Noticee, proviso (i) wasn’t applicable as he wasn’t a promoter; proviso (ii) [as it stood then, and now proviso v] was also not applicable to him, as he is an individual; proviso (iii) [as it stood then, and now proviso vi] – the sale by him was not pursuant to a trading plan.

5. The application for pre-clearance was made by him only on 12th June 2017, wherein he had declared that he did not possess any UPSI. Clause 6 of the Code of Conduct specified under Schedule B read with Regulation 9(1) and (2) of the SEBI (PIT) Regulations, 2015 says that no designated person shall apply for pre-clearance of any proposed trade if such designated person is in possession of UPSI, even if the trading window is not closed.

6. The AO concluded that, clearance received on the basis of misrepresentation of a vital fact, is neither a valid clearance nor a valid defence.

7. The AO also drew reference to SEBI’s Guidance Note dated August 24, 2015 on SEBI (PIT) Regulations 2015[1], where it was made clear that the sale of shares received through the exercise of ESOP was not an exception to the general rule under Regulation 4(1) and thus was not a valid defence.

[By amendment to the PIT Regulations, 2015 w.e.f. 01.04.2019, the exercise of ESOP has been incorporated as a defence in proviso (iv) in Reg. 4(1)]

8. The Noticee had violated Section 12A (d) and (e) of SEBI Act, 1992 read with Regulation 4(1) of the SEBI (PIT) Regulations, 2015 and has been imposed with a penalty of Rs. 10,00,000 for his violation of Regulation 4(1) of the SEBI (PIT) Regulations, 2015.

Regulatory issues that are to be noted from this decision of AO
1. To bring a charge on an insider, it would suffice that he traded when in possession of UPSI.

2. It is for the person so charged to show that one of the 6 situations specified in the proviso to sub-regulation (1) of regulation 4, of the PIT Regulations, 2015, are applicable to him.

3. Pre-clearance obtained on the basis of misrepresentation of vital fact, is not a valid clearance/defence.

4. It is only the exercise of ESOP while in possession of UPSI which is exempt and not sale of the shares exercised under ESOP.

[1] 12A. No person shall directly or indirectly—

(d) engage in insider trading;

(e) deal in securities while in possession of material or non-public information or communicate such material or non-public information to any other person, in a manner which is in contravention of the provisions of this Act or the rules or the regulations made thereunder;

[2] 4(1) states that “No insider shall trade in securities that are listed or proposed to be listed on a stock exchange when in possession of unpublished price sensitive information”, Provided that the insider may prove his innocence by demonstrating the circumstances including (i), (ii) or (iii) along with an explanatory note stating that a trade conducted by an insider while being in possession of an UPSI shall be presumed to be motivated by the knowledge of such UPSI

[1] Paragraph quoted by the AO from SEBI’s guidance “the Exercise of ESOPs shall not be considered to be “trading” except for the purposes of Chapter III of the Regulations. However other provisions of the Regulations shall apply to the sale of shares so acquired”.

Authored by Aishwarya Lakshmi VM.

Applicant: Way to Wealth Brokers Pvt. Ltd. Date of the guidance: 20.07.2020

Factual Background

(i) The Applicant is a stockbroker registered with SEBI. They have received a proposal from a listed company to fund the RSU (Restricted Stock Unit) issued by the listed company to its employees, to enable the employees to exercise the RSUs without paying for the same upfront.

(ii) The amount that will be funded by the Applicant is the face value of the share plus the additional perquisite tax @ 36% of the fair value.

(iii) Within two days of receipt of credit of the shares in the DP A/c of the employee, the Applicant will sell the RSUs to the extent of cashless funding plus transaction charges and cover the amount spent by them.

Guidance sought

In the light of the contemplated transaction, the Applicant sought informal guidance as to whether as a SEBI registered broker they are eligible to fund RSUs and if yes, to what maximum extent.

Provisions Involved

Regulations 9(2) of SEBI (Share Based Employee Benefit) Regulations, 2014.[i]

Informal Guidance by SEBI

(i) Interpreting Regulation 9(2) which allows cashless funding of ESOS or SAR and corresponding adjustment with sale proceeds, SEBI in the informal guidance stated that if the listed company permits, the Applicant may fund the cashless transaction at the exercise price, and adjust the same against the sale proceeds of some or all of the shares.

(ii) Also, SEBI went on to state that the SBEB Regulations do not have any maximum limit on amount per unit/security that may be funded.

The letter of SEBI can be read at:

As per the Informal Guidance [Scheme] 2003 of SEBI, the guidance provided is applicable only to the Applicant, and is should not be construed as a conclusive decision or determination of any question of law or fact by SEBI, and is also not an Order u/S 15T of SEBI Act, 1992.

[i] Regulation 9(2), SBEB: No person other than the employee to whom the option, SAR or other benefit is granted shall be entitled to the benefit arising out of such option, SAR, benefit etc.

Provided that in case of ESOS or SAR, under cashless exercise, the company may itself fund or permit the empaneled stock brokers to fund the payment of exercise price which shall be adjusted against the sale proceeds of some or all the shares, subject to the provisions of the applicable law or regulations.


Authored by Aishwarya Lakshmi V. M.

Applicant: RS Software (India) Ltd. Date of the guidance: 17.09.2019

Factual Background

(i) R S Software (India) Ltd. had started an employee Trust in the name ‘R S Software Employee Welfare Trust’ with the objective of aiding the employees in the form of medical facilities, scholarships, housing etc.

(ii) The Trust acquired shares of the company from October 2012 to January 2013 and held 4.47%. However, pursuant to the proviso to Reg. 3(12)[i] of SEBI (Share Based Employee Benefit) Regulations, 2014 there was a regulatory obligation on the Trust to sell the shares.

(iii) The Promoters (40.47% holding), Executive Directors and Independent Directors [two persons, each of them holding 0.27% and 0.19%] of the Applicant Company were desirous of acquiring the shares held by the Trust, through the stock exchange.

Guidance sought

(i) Whether shares held by the Trust if purchased by the Promoters or Promoters Group or Independent Directors of the Company will be within the limits and not in contravention of SEBI (SAST) Regulations, 2011 and SEBI (PIT), Regulations 2015 and SEBI (LODR) Regulations, 2015?

(ii) Whether the purchase of shares by way of Block Deal through the Stock Exchange is in compliance with the relevant Regulations as these are being acquired on the grounds of regulatory requirement?

(iii) Whether Regulation 5 of the SEBI (PIT) Regulations, 2015 puts any restraint on this transaction?

Provisions Involved

a. Regulation 3(2) of SEBI (SAST) Regulations, 2011.[i]

b. Regulation 16(1)(b)(vi)(c) of SEBI (LODR) Regulations, 2015.[ii]

c. Regulations 3, 4 and 5 of SEBI (PIT) Regulations, 2015.[iii]

Informal Guidance by SEBI

(i) With regard to the compliance of SEBI (SAST) Regulations, SEBI in its guidance stated that the Promoter group may acquire the shares without making a public announcement of an open offer, provided that the overall acquisition does not exceed 5% of Voting Rights of the Applicant company in a financial year.

(ii) As regard the compliance of and SEBI (LODR) Regulations, the guidance stated that the Shareholding of Independent directors together with their relatives should not be 2% or more of the total voting rights in the Applicant.

(iii) As regard, the query on compliance of SEBI (PIT) Regulations, and whether block deal is a safe harbour to prove their innocence, the guidance observed that the proviso (ii) in Reg. 4(1) of SEBI (PIT) Regulations, can be a safe harbor only when the block deal is done without being in breach of Reg. 3 and both the parties had made a conscious and informed decision. The guidance concluded that a person will be treated as an insider for all purposes and has to demonstrate his innocence in case he trades while in possession of UPSI.

(iv) The guidance also stated that the SBEB Regulations do not stipulate the purchase of shares by the Promoters as the compliance. Hence, the purchase via block deal cannot be regarded as statutory compliance.

(v) Regulation 5 is regarding formulation of Trading Plan. Since purchase of shares by the promoters is not a regulatory requirement, the query becomes redundant.

The letter of SEBI can be read at:

As per the Informal Guidance [Scheme] 2003 of SEBI, the guidance provided is applicable only to the Applicant, and is should not be construed as a conclusive decision or determination of any question of law or fact by SEBI, and is also not an Order u/S 15T of SEBI Act, 1992.

[i] This provision required un-appropriated inventory of shares not back by stock options acquired from the stock market to be appropriated before FY 2015 or after disclosing to the stock exchange within a period of 5 years (i.e) 27th October 2019.

[i] Regulation 3(2) of SEBI (SAST) Reg., 2011: No acquirer, who together with persons acting in concert with him, has acquired and holds in accordance with these regulations shares or voting rights in a target company entitling them to exercise twenty-five per cent or more of the voting rights in the target company but less than the maximum permissible non-public shareholding, shall acquire within any financial year additional shares or voting rights in such target company entitling them to exercise more than five per cent of the voting rights, unless the acquirer makes a public announcement of an open offer for acquiring shares of such target company in accordance with these regulations:

Provided that such acquirer shall not be entitled to acquire or enter into any agreement to acquire shares or voting rights exceeding such number of shares as would take the aggregate shareholding pursuant to the acquisition above the maximum permissible non-public shareholding.

[ii] Regulation 16(1)(b)(vi)(c) of SEBI (LODR) Reg., 2015: “independent director” means a non-executive director, other than a nominee director of the listed entity who, neither himself, nor whose relative(s) holds together with his relatives two per cent or more of the total voting power of the listed entity.

[iii] Regulation 4 of SEBI (PIT) Reg., 2015 – Proviso to Reg. 4 specifies instances that can be shown by a person alleged to have engaged in Insider Trading, and proviso (ii) reads as – “the transaction was carried out through the block deal window mechanism between persons who were in possession of the unpublished price sensitive information without being in breach of regulation 3 and both parties had made a conscious and informed trade decision;

Provided that such unpublished price sensitive information was not obtained by either person under sub-regulation (3) of regulation 3 of these regulations.

Authored by Aishwarya Lakshmi VM

Applicant: Mirza International Ltd. Date of the guidance: 10.06.2020

Factual Background

(i) The Managing Director of the Company who individually holds 11.27% shares in the company is desirous of gifting his shares to his daughters. The daughters are married and leading a separate life, away from the father.

(ii) The daughters who are prospective recipients of the shares do not want themselves to be falling within the ‘Promoter/Promoter Group’ definition of SEBI (LODR) Regulations, 2015 since it would attract Trading Window restrictions.

Guidance sought

The daughters are seeking reclassification of their status from ‘Promoter/Promoter Group’ to ‘Public’.

Provisions Involved

Regulations 31A of SEBI (LODR) Regulations, 2015.

1. Analysis of Definition: As per the definition of ‘Promoter Group’ [Reg.2(1)(pp) of SEBI (ICDR) Regulations, 2018][i] the daughters of the promoter are immediate relatives and they already fall under the ‘Promoter Group’ irrespective of the fact they are married an leading a separate life or not.

2. Effect of Gift: As per Regulation 31A (6) of SEBI (LODR) Regulations, 2015[ii] in case of gift of shares by the Promoter, immediately on such event, the recipient of such gift shall also be classified as ‘Promoter/Person belonging to the Promoter Group’. Hence, upon gift the daughters will still be under the ambit of ‘Promoter Group’.

3. Satisfaction of the Conditions relating to Reclassification: As per Regulation 31A (3)(b)(i) of SEBI (LODR) Regulations, 2015[iii] upon reclassification the promoter who is seeking reclassification along with the persons related to such promoter shall not together hold more than 10% of the total voting rights of the company. Since, the total voting rights would be greater than 10% (i.e., 11.27 %) they cannot reclassify themselves to the ‘public’ category.

The letter of SEBI can be read at

As per the Informal Guidance [Scheme] 2003 of SEBI, the guidance provided is applicable only to the Applicant, and is should not be construed as a conclusive decision or determination of any question of law or fact by SEBI, and is also not an Order u/S 15T of SEBI Act, 1992

[i] Regulation 2(1)(pp), ICDR: “Promoter Group” includes:

  1. i) The Promoter,
  2. ii) An immediate relative of the Promoter (i.e., any spouse of that person, or any parent, brother, sister or child of the person or of the spouse); and …

[ii] Regulation 31A(6), LODR: In case of transmission, succession, inheritance and gift of shares held by a promoter/ person belonging to the promoter group:

(a) Immediately on such event, the recipient of such shares shall be classified as a promoter/ person belonging to the promoter group, as applicable

[iii] Regulation 31A(3)(b)(i), LODR: The promoter(s) seeking re-classification and persons related to the promoter(s) seeking re-classification shall not:

(i) together, hold more than ten percent of the total voting rights in the listed entity;

(ii) exercise control over the affairs of the listed entity directly or indirectly…


SEBI has released a Consultation Paper, proposing three (3) options, with respect to listed companies that have a resolution plan approved by the NCLT, in respect of the minimum pubic shareholding (“MPS”) in such companies, and also suggestions of additional disclosures by such companies pursuant to the approved resolution plan.

Here we look at the proposed options and also the present relaxations to listed companies that have an approved resolution plan. The present exemptions have been given to ensure revival of the corporate debtor pursuant to resolution plan, and also to provide any listing gains over the next three years to shareholders of corporate debtor.

Existing regulatory relaxations:

a. Relaxations have been provided from all provisions of Chapter V of the SEBI (Issuer of Capital and Disclosure) Requirements, 2018 (‘ICDR Regulations’) pertaining to preferential issue such as conditions for eligibility, pricing, conditions for consideration and allotment, etc. except lock-in provisions.

  • This results in the shares being allotted through a preferential issue, to the successful Resolution Applicant, to be under lock-in for a period of at least 1 year (for allotment more than 20% of the total capital of the company).

b. Relaxation has also been provided in Regulation 3(2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (‘Takeover Regulations’).

  • This allows the successful Resolution Applicant to breach minimum public shareholding norms.

c. With respect to fall in public shareholding below the present 25%, due to implementation of the resolution plan approved under IBC, 2016, the relaxation under SCRR is as follows:

(i) In cases where the public shareholding falls below 10 percent, then such listed company shall bring public shareholding to at least 10 percent within a period of eighteen months, and to 25 percent within three years from the date of such fall.

(ii) In cases where the public shareholding falls below 25 percent, but is above 10 percent, such listed company shall bring its public shareholding to 25 percent within three years from the date of such fall.

d. Relaxation has also been granted from applicability of delisting regulations in case of delisting arising out of resolution plan approved under the IBC, 2016. The minimum value that the shareholder can receive in such cases is the liquidation value, or the price at which existing promoters/ shareholder are being granted exit.

  • It is possible in case of delisting under the resolution plan, the shareholders may not get sufficient/any value as compared to the potential value that may be realised over a period of time after the implementation of the resolution plan if the shares continue to remain listed.

Concerns pertaining to permitting such exemptions:

a. Allowing lower limit for minimum public shareholding in post- CIRP cases, resulted in an instance where the public shareholding was extremely low, and the less floating stock hampered the efficiency in the price discovery process of the scrip, and thereby volatility in the scrip, which in turn resulted in increased surveillance measures.

b. Any increased surveillance measures may act as a deterrent for a successful Resolution Applicant to continue the listing of the scrip.

c. In case, the resolution plan involves allotment to the successful Resolution Applicant, who will be the new promoter, then in terms of Regulation 167(1) of the ICDR Regulations the shares are to be locked-in for a period of at least 1 year, which will not facilitate dilution of promoter shareholding to achieve immediate compliance with at least 10 percent public shareholding.

In light of the above, SEBI is now considering recalibration of the threshold for minimum public shareholding norms, and in its Consultation Paper (inviting comments on the same by 18th September 2020), has proposed the following options:

Options proposed for MPS in the consultation paper:

a. The Resolution Applicant to achieve MPS of 10% within 6 months, and 25% in 3 years from the date of breach in MPS;

b. Mandate post CIRP listing to be with a minimum of 5% MPS, and require them to achieve 10% MPS in 12 months, and in 36 months from the date of breach of MPS reach 25% public shareholding;

c. Mandate 10% MPS at the time of relisting after approval of resolution plan, and be allowed a period of 3 years to reach 25% public shareholding.


Generally, in case of issuance of preferential shares to the Resolution Applicant under the resolution plan, such shares would be under lock-in for at least 1 year in terms of ICDR Regulations. SEBI has proposed doing away with the lock-in period of 1 year for the Resolution Applicant, to the extent of complying with the MPS norm.


Under the IBC, while the order approving the Resolution Plan is a public document, the plan is not made available to the public. Hence, SEBI in the Consultation Paper has proposed standardising the disclosures, including details of funds infused, amounts paid to creditors, impact on the investors such as revised Price to Earnings ratio, Return on Net Worth, and also the resolution plan without the confidential information and commercial secrets.

Authored by Shrutakeerti

This is in continuation to our article on the highlights and salient features of the Consumer Protection Act, 2019, (‘Act’), and we now delve into the offences and penalty provisions of the Act.

The basic and primary mechanism under the Act is to restore justice to the complainant in the form of liquidated damages or replacement of goods/services and for certain offences, punitive damages may also be awarded to the consumer. However, the Consumer Protection Act, 2019 is not in its entirety a civil legislation as it provides for retributive justice in the form of imprisonment, and also constitutes a central regulatory authority for protection of consumer rights.

Central Consumer Protection Authority

The Act establishes a Central Consumer Protection Authority (CCPA) for the purpose of regulating matters relating to the violation of rights of consumers, unfair trade practices and false or misleading advertisements that are prejudicial to the interests of public and consumers.

Power to investigate

CCPA is empowered to investigate complaints relating to the violation of consumer rights, unfair trade practices or false or misleading advertisements, which can be initiated in 3 ways:

i. Suo-motu investigation by CCPA;

ii. On complaint received by CCPA or to the District Collector;

iii. On directions from the Central Government.

Orders post investigation:

The CCPA is empowered to order recall of unsafe goods and services (Section 20), order discontinuance of unfair trade practices and misleading advertisements, prohibit the endorser from making any endorsement of a product or service for a certain time period, impose civil penalties on manufacturers/endorsers/publishers of misleading advertisements (Section 21). The penalty that can be imposed on a manufacturer or endorser or publisher for false and misleading advertisements can extend to Rs.10,00,000 and for subsequent contraventions, the penalty can extend to Rs.50,00,000.

While determining the quantum of the civil penalty that is to be imposed against offenders the CCPA has to take into consideration:

a) the population and the area impacted or affected by such offence;

b) the frequency and duration of such offence;

c) the vulnerability of the class of persons likely to be adversely affected by such offence; and

d) the gross revenue from the sales effected by virtue of such offence.

Safe harbour for brand endorsers and advertisement publishers

The defence that a brand endorser in a misleading advertisement, and that a publisher of a misleading advertisement can take to avoid monetary penalty is specified in Act.

For an endorser – if due diligence had been exercised by him to verify the veracity of the claims made in the advertisement regarding the product or service being endorsed by him;

For a publisher – if he had published the false or misleading advertisement in the ordinary course of his business. However, this defence would not be available to the publisher, if he had previous knowledge about the order passed by the CCPA regarding the withdrawal or modification of such advertisement.

e) Other offences and penalties:

Section 72(1) Failure to comply with order of District/State/ National Commission Imprisonment- period of not less than 1 month extendable upto 3 years (or) fine- not less than Rs. 25,000/- upto Rs.1,00,000/- (or) both
Section 88 Failure to comply with order of CCPA under s.20, 21

A complaint can be filed by the Central Consumer Protection Authority or any officer authorised by it in this behalf.

Imprisonment which may extend upto 6 months (or) fine which may extend upto Rs. 20,00,000/- (or) both
Section 89 False and misleading advertisement, by any manufacturer or service provider


A complaint can be filed by the Central Consumer Protection Authority or any officer authorised by it in this behalf.

Imprisonment which may extend to 2 years (and) fine which may extend to Rs. 10,00,000/-

Subsequent offences – imprisonment which may extend to 5 years and with fine which may extend to Rs.50,00,000.


Section 90(1)(a) Manufacture for sale, or storing, selling or distributing or importing products containing an adulterant, but does not result in an injury to the consumer Imprisonment which may extend to 6 months (and) fine which may extend to Rs. 1,00,000/-
Section 90(1)(b) Manufacture for sale, or storing, selling or distributing or importing products containing an adulterant, causing injury but not grievous hurt to the consumer Imprisonment which may extend to 1 year (and) fine which may extend to Rs. 3,00,000/-
Section 90(1)(c) Manufacture for sale, or storing, selling or distributing or importing products containing an adulterant, causing injury resulting in grievous hurt to the consumer Imprisonment which may extend to 7 years (and) fine which may extend to Rs. 5,00,000/-

Such an offence shall be cognizable and non-bailable


Section 90(1)(d) Manufacture for sale, or storing, selling or distributing or importing products containing an adulterant, resulting in death of consumer Imprisonment not less than 7 years which may extend to life imprisonment (and) fine not less than Rs. 10,00,000/-

Such an offence shall be cognizable and non-bailable


Section 91(1)(a) Manufacturing for sale, or storing, selling or distributing or importing spurious goods, causing injury not amounting to grievous hurt to the consumer Imprisonment which may extend to 1 year (and) fine which may extend to Rs. 3,00,000/-
Section 91(1)(b) Manufacturing for sale, or storing, selling or distributing or importing spurious goods, causing injury resulting in grievous hurt to the consumer Imprisonment which may extend to 7 years (and) fine which may extend to Rs. 5,00,000/-

Such an offence shall be cognizable and non-bailable


Section 91(1)(c) Manufacturing for sale, or storing, selling or distributing or importing spurious goods, resulting in death of the consumer Imprisonment not less than 7 years which may extend to life imprisonment (and) fine not less than Rs. 10,00,000/-

Such an offence shall be cognizable and non-bailable

Compounding of offences:

An offence punishable under Section 88 and 89 of the Act is compoundable on payment of such amount as may be prescribed (such amounts cannot exceed the maximum amount of fine imposed under the Act). However, the option to compound the offence is not available to a repeat offender committing the same or similar offence within 3 years from the date the first offence was compounded.

With the rapid growth of internet and dilution of geographical boundaries, marketing of products and services through websites and domain names are becoming an increasingly important mode of brand building and channels of commerce for trademark owners. Domain name/website names forms an essential part of the trademark assets and represent the virtual address of an organisation in the internet space in relation to its brand that is the subject matter of such domain name.

The domain names indicating source from Indian jurisdiction is “.IN”. For example, domain name of the official intellectual property website owned by Indian Government is “”. In the recent years India has witnessed various cases of people unlawfully holding websites containing trademark of others, commonly referred to as “cybersquatting”, in relation to the .”IN” domain names. The Indian Domain Dispute Resolution Policy (INDRP) was formulated and is administered by the National Internet Exchange of India (NIXI), for filing of any cybersquatting complaints pertaining to “.IN” domain names held by any cyber squatter and the decisions based on the outcome of such proceedings are binding and enforceable under the provisions of the Arbitration and Conciliation Act, 1996 as arbitral awards.

In order to succeed in a complaint under the INDRP the complainant being the trademark owner has to prove the existence of all the three following essential elements in respect of the .IN domain under dispute:

a. the domain name of the Respondent is identical or confusingly similar to a name, trademark or service mark in which the Complainant has rights;

b. the Respondent has no rights or legitimate interests in respect of the domain name; and

c. the domain name has been registered and is being used in bad faith

On receiving complaint from the Complainant, NIXI shall appoint an arbitrator out of the list of arbitrators maintained by the registry, who shall conduct the arbitration proceedings in accordance with the Arbitration & Conciliation Act 1996 as amended from time to time and also in accordance with the INDRP and the Rules made thereunder. The arbitrator shall forward its decision on the complaint to NIXI within sixty calendar days of commencement of the arbitration proceedings.

Under the INDRP, the remedies available to a complainant pursuant to any proceeding before an arbitrator shall be the following:

(i) cancellation of the domain name held by a third party or

(ii) the transfer of the disputed domain name registration to the complainant.

(iii) Costs as may be deemed fit may also be awarded by the Arbitrator

INDRP has been very effective in disposing of cases pertaining to domain name disputes including those owned by well-known personalities, public figures and world-renowned brand owners. Some of the notable domain name decisions under the INDRP include well-known brands such as,,,, etc

In India it is common practice for brand owners to engage third parties as domain name registration service providers who sometimes may wrongfully hold back the domain name and may also get their name entered as the “Registrant” (owner) of the domain name in the “whois” data. An INDRP action may be pursued, in those peculiar instances against such “Registrants”. However, in such cases it may become difficult for the complainant to establish the third essential element of the INDRP pertaining to- “the Registrant’s domain name has been registered in bad faith”, as the said domain name has been registered under the behest or express authorisation of the complainant itself. Accordingly, in such instances it is important for brand owners and complainants to carefully strategize and record the various correspondences exchanged with such “cybersquatters” that would go a long way in establishing “bad faith” of the respondent in the registration and usage of the domain name, which will eventually help the complainant in a successful INDRP action.

In the light of the COVID-19 pandemic situation prevailing in the country, the CGPDTM has decided to conduct show cause hearings for trademark matters pursuant to the Trademarks Rules, 2017, through video conferencing and in this regard, a public notice was issued on 26th August 2020 that has requested the Applicants and Trademark Agents/Attorneys to give their consent and confirm their participation for hearings through video conferencing. Accordingly, Applicants/Trademark Agents/Attorneys have been directed to provide their consent by sending an email to with the subject “consent for Show-cause Hearing through Video Conference” on or before 05/09/2020. If no such consent is provided, it is to be noted that the Applications will be kept in abeyance to schedule hearing in-person as and when hearing with physical presence are commenced in the future. This is indeed a good initiative of the CGPDTM that will go a long way in reducing the backlog of the trademarks that have been pending in the examination stage since the lockdown situation in the country owing to the pandemic.

The CGPDTM has been issuing public notices[1]  as part of the Trademark Journals bearing numbers 1928 to 1939, published since 20th July 2020, intimating closure of the opposition window for the Trademarks published in the said Journals and thereby allowing the unopposed trademarks published under the said journals for registration. It is to be noted that the limitation period for filing of trademark oppositions advertised in the aforesaid journals end beyond March 15th 2020. In this regard, it is pertinent to note that the Hon’ble Supreme Court had taken suo moto cognizance of the pandemic situation prevailing in the country since March 2020 and had passed orders directing an extension of all statutory limitations in respect of all proceedings, under general law or special laws since 15th March 2020. The said order continues to be effective until further orders of the Hon’ble Supreme Court. Accordingly, it will be interesting to see if the legality of the aforesaid public notices issued by the CGPDTM, closing the opposition windows, will be challenged in the light of the above referred order of the Hon’ble Supreme Court granting time extensions on all statutory limitations, despite the fact that the limitation period for the trademarks published thereunder fall beyond the effective date of the Supreme Court order viz., 15th March 2020. It is also further pertinent to note that the CGPDTM was earlier directed by the Hon’ble High Court of Delhi in a writ petition filed by the INTELLECTUAL PROPERTY ATTORNEYS ASSOCIATION (IPAA) to withdraw one of its earlier public notice dated 18th May 2020, as the same was found to be violative of the aforesaid order of the Hon’ble Supreme Court and in pursuance of the same the CGPDTM had issued a public notice dated 19th June 2020 withdrawing the 18th May 2020 public notice.

Though the said initiative by the CGPDTM benefits the larger group of stakeholders for seeking registration without further delay, however, the same being violative of the order passed by the Apex Court in respect of extension of statutory limitations, the Proprietors may face the risk of their registrations being invalidated as and when the aforesaid public notices issued by the CGPDTM are successfully challenged before and struck down by a Court of law.

[1]  Public Notice dated 20/07/2020

Public Notice dated 27/07/2020

Public Notice dated 03/08/2020

Public Notice dated 10/08/2020

Public Notice dated 17/08/2020

Public Notice dated 24/08/2020

Vide this notification, CSR Rules and Schedule VII of the Act has been amended, to enable the R&D expenditure incurred by companies in R&D of Covid-19 vaccine, drug(s) and medical devices in their normal course of business, to account it as CSR expenditure, for financial years 2020-2021, 2021-2022 and 2022-2023, so long as these companies carry out their R&D in collaboration with the institutes or organisation mentioned in item (ix) of Schedule VII to the Act- such as Central/State Government/Public Sector Undertaking funded incubators, IITs, National Laboratories established by certain Central Government Departments – Department of Biotechnology, AYUSH etc.

In addition, such companies, should specify the details of the activity carried out on such research and development, in their CSR report as part of their Board’s Report to the shareholders.

Ministry of Corporate Affairs (MCA) vide aforementioned circulars had enabled conducting general meetings of members through video conference (VC) or through other audio-visual means (OVAM).

As per provisions of Companies Act 2013, all special resolutions are required to be filed with the Registrar of Companies (ROC) within 30 days of passing of the resolution.  In respect of resolutions, both ordinary or special resolutions, passed using the VC or OVAM facility (meetings held pursuant to the above circulars), the time limit for filing with the Registrar of Companies (ROC) has been extended to 60 days from date of passing such resolution.  The resolution to be filed with ROC has to be accompanied by a declaration to the effect that the company has complied with the process and instructions mentioned in the circulars along with other provisions of the act and the rules.

Authored by Ammu Brigit

Patanjali Ayurveda Limited (Patanjali) along with Divya Pharmacy Limited in its recent press conference launched ayurvedic medicines claiming to be the first ayurvedic cure medicines with 100% recovery within seven days for Covid-19. Taking notice of this announcement, Ministry of Ayurveda, Yoga, Neuropathy, Unani, Siddha and Homeopathy (Ministry of AYUSH) instructed Patanjali to stop advertisements, and sought from it the name and composition of the medicines, site/hospital where the research study was conducted, protocol, sample size, Institutional Ethics Committee (IEC) clearance, Clinical Trial Registry-India (CTRI) registration, result data of the study. In the context, in this article we look into the legal position with regard to the research, manufacturing and advertising of Ayurvedic medicines in India.

Manufacturing of Ayurvedic Medicines

Under section 33EEC of Drugs and Cosmetics Act,1940 (DCA) read together with Part XVI of Drugs and Cosmetics Rules 1945 (DCR), a person intending to manufacture any ayurvedic medicine should obtain appropriate license after fulfilling the conditions of license under DCA and DCR.

The AYUSH ministry taking note of the gap in DCR as it does not contain specific regulatory provision requiring conduct of clinical trials for Ayurveda, Siddha, Unani and Homeopathic drugs (AYUSH Drugs), and recognising the need for scientifically generated clinical data for validation and credibility of drugs for Covid-19, came up with a notification dated 21st April 2020.

Under this notification, the AYUSH Ministry required scientists, researchers, clinicians of any recognised systems of medicine under Indian Medicine Central Council Act 1970 (IMCC Act), National Medical Commission Act, 2019 (NMC Act), and Homeopathy Central Council Act 1973 (HCC Act) undertaking research on cure or prevention of Covid-19 through Ayurveda, Siddha, Unani and Homeopathy systems (“AYUSH System”) for Covid-19 to generate evidence of their claim. The notification without being exhaustive of the areas of research, included the following too within the ambit of generation of evidence: (i) intervention during quarantine, (ii) research on asymptomatic and symptomatic cases of Covid-19, (iii) public health research, (iv) survey, (v) lab based research etc.

According to this notification, it is necessary to obtain IEC approval; register with CTRI for conducting clinical trial and have statistical justification for sample size; conduct clinical research complying with AYUSH and ICMR guidelines for clinical research and Good Clinical Practices; comply with National Ethics Guidelines for Bio-Medical and Health Research on Human Participation; have an  AYUSH registered practitioner or expert as a part of the study team, at each site. The notification has also required those conducting research and clinical trials to keep the Ministry of AYUSH informed about the research development and outcomes.

The Ministry of AYUSH by an order dated 28th July 2020, has centralised the power to verify results of clinical trial and research study before issue by the state regulators of approval and license to manufacture after clearance by the central government. The regulators in each state are required to the applications along with the results of the trials to the AYUSH Ministry for verification and clearance.

Advertisements of AYUSH Medicines

Section 4 of the Drugs and Magical Remedies (Objectionable Advertisements Act), 1954 (DMROA)  prohibits a person to participate in the publication of any advertisement (which means any notice, circular, label, wrapper or other document, and any announcement made orally or by any means of producing or transmitting light, sound, or smoke) relating to a drug if the advertisement contains any matter which directly or indirectly give a false impression regarding the true character of the drug; or makes a false claim for the drug or is otherwise false or misleading in any material particular.

The Drugs and Cosmetics Rules, 1945 (“DCR”) was specifically amended in 2018 with respect to the advertisement of AYUSH medicines, and it now prohibits the participation of the manufacturer of AYUSH medicines or his agent in the publication of any advertisement relating to any drugs for the use of diagnosis, cure, mitigation, treatment or prevention of any disease, disorder, syndrome or condition. For any AYUSH medicine other than for the above purpose, advertisement is permitted after obtaining an unique identification number for such advertisement by making an application with the State Licensing Authority or the Drug Controller, in Form 26 E-4. This amendment to DCR implies that no manufacturer can claim therapeutic claims on AYUSH products.

Owing to the outbreak of Covid-19, the Ministry of AYUSH vide an Order dated 21st April 2020 instructed all state AYUSH regulatory authorities to stop and prevent publicity and advertisement of AYUSH related claims for Covid-19 treatment in print, TV and electronic media and take necessary actions against the agencies/persons involved in contravening the relevant provisions and the guidelines given by National Disaster Management Authority (NDMA) under the order of Ministry of Home Affairs dated 24th March 2020.


 At a time when researchers from every field of medicine are engaged in the  development of the cure for Covid-19, it is imperative to ensure that the research for such cure is carried on based on the guidelines of the government authorities and advisory bodies. It is a welcome move by the government to centralise the power to verify and clear AYUSH drugs for Covid-19, and also on its advertising to avoid dubious therapeutic claims of Ayurvedic medicines and thereby protect public health. These, together with civil penalties having been brought under the Consumer Protection Act 2019 with regard to the misleading advertisements has also become an additional legislative support to ensure that AYUSH drugs are not marketed or sold with misleading claims.

Authored by Vishaka

In a recent development, triggered by the release of a web-series titled “XXX uncensored- Season 2” that was telecasted on an Over the Top (OTT) platform,  an advisory letter dated 27th July 2020 has been issued by the Secretary to the Ministry of Defence (“MOD”), to the regional officer of the Central Board of Film Certification (“CBFC”), raising concerns on how certain movies/web-series based on “Army” theme are causing disrepute to the Indian Army. A copy of the said letter was marked to the attention of Ministry of Electronics & Information Technology (“MeitY”) and Ministry of Information and Broadcasting (“MIB”) as well. The MOD has suggested in the letter to the CBFC to direct the producers of such web-series or movies to obtain a ‘No Objection Certificate’ from MOD before airing of such movie, series, documentary etc on the public domain.

At this juncture, it is relevant to look at the detailed guidelines issued by MOD on its website pertaining to submission of proposal to the MOD for seeking assistance in connection with making of film, serial, documentary etc. The following are the highlights of the guidelines as provided by the MOD:

1. Producer of any film, TV serials or documentary which is themed around Army or requires assistance of Army in the form of location, manpower or equipments shall preliminary be required to submit a proposal in the form of an affidavit along with details as per the format provided under the guidelines, including the script, tentative schedule, details of crew and type of requirement.

2. The guidelines also require the authorised signatory responsible for the production to given an undertaking as per the prescribed format.

3. Such a proposal shall be examined by the department considering all necessary factors including the reputation of the Army.

4. Once clearance is given by the Army, the producer shall deposit a certain amount of money in lieu of the assistance provided thereunder.

5. Further, producer needs to enter into an agreement with the ADG PI covering aspects of indemnity, insurance cover and refundable bank guarantee.

6. After completion of the film or the serial or documentary, the same shall undergo two tier preview before it is made available for public domain.

It is to be noted that the said guidelines of the MOD is a system of practice envisaged by the MOD, which indirectly is also aimed at avoiding any kind of disrepute to the Army and uphold the dignity of the officials.

The letter issued by MOD raises concerns relating to both the cinematograph films and web-series. It is to be noted that CBFC is statutorily empowered under the Cinematograph Act 1952 for regulation and sanctioning of contents of only cinematograph films and is not empowered to regulate any content that is broadcasted exclusively under OTT platforms. It is pertinent to note that regulation of OTT platforms fall under the purview of MeitY and MIB and hence, CBFC will not be entitled to undertake any actions as advised by the MOD in the said letter in respect of such web series broadcast in OTT platforms.

It is to be noted that as of today there are no regulations notified either by the MeitY or the MIB to regulate the contents being broadcasted under OTT platforms. The contents and standards of the contents being broadcast on such OTT platforms in India are all primarily self-regulated by owners and operators of such OTT platform. It would definitely be interesting to see if the MeitY or MIB take the initiative and requisite steps in order to have certain statutory guidelines and regulations in place in order to regulate the OTT platforms and its contents considering the sudden rise in the viewership of such content over the OTT platforms.

Authored by Ammu Brigit

Informed consent being one of the fundamental principles of good clinical practice is a legal requirement prior to conduct of surgeries or other medical procedures by doctors/hospitals. Failure by a  doctor to obtain consent from the patient or the guardian before the conduct of an operation is a violation and is considered to be misconduct under Chapter 7 of Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations 2012.In Samira Kohli vs. Dr. Prabha Manchanda & Ors (2008 2 SCC 1) (“Samira Kohli Judgement”), the Hon’ble Supreme Court of India emphasised that importance of obtaining informed consent from the patients and how the responsibility is upon the doctor to disclose necessary information to the patient to obtain his consent. The law does not provide a standard form for obtaining consent. The known and widely accepted way of obtaining the consent from the patients or the guardian is getting signature on the pre-printed consent forms. Recently in Vinod Khanna vs. R.G Stone Urology and Laparoscopy Hospital & Ors (Order), National Consumer Disputes Redressal Commission (NCDRC) pronounced that obtaining consent in a pre-printed consent forms is an unfair trade practice.

Background and Decision

Vinod Khanna, a patient with abdominal and urologic difficulties approached Fortis Hospital, New Delhi and owing to financial difficulties then approached RG Urology and Laparoscopy Hospital (RG) for treatment. The patient could not get complete treatment for his disease and further suffered injury and complications. Pursuant to which, he filed a complaint in State Consumer Disputes Redressal Commission and the then in NCRDC.

NCRDC took reference to standard books on Surgery, Urogenital Pathology, constituted a board constituted of three independent doctors and also perused the informed consent forms taken from the patient at RG prior to the surgery and other medical records. Pursuant to which, NCRDC held that there was no deficiency of service or medical negligence on part of the both the hospitals.

Regarding Informed Consent in the Order

NCDRC particularly noticed the nature of informed consent obtained from the patient in this case and noted it to be an act of administrative arbitrariness. Quoted below is the NCRDC’s opinion on the pre-printed consent forms:

“We but note that a pre- printed and fixed ‘informed consent cum undertaking’ form, with blank spaces for limited select handwritten entries and for the signatures has been used by the hospital. The main body of the form is pre-printed and fixed. It can fit into any procedure, any doctor, and any patient, after filling up the blank spaces for the limited select handwritten entries and getting / affixing the signatures. We note this to be administrative arbitrariness and one-sided high handedness, and to be unfair and deceptive, on the part of the opposite party no. 1 (hospital), for which, though, the complainant has not been prejudiced in this particular case”.

NCDRC held that the pre-printed consent form is an unfair trade practice section 2(1) (r) under Consumer Protection Act 1986. It also instructed the hospital to deposit with Consumer Legal Aid Account of NCDRC a sum of Rs. 10 lakhs as cost for such unfair trade practice, and directed it to discontinue the use of pre-printed consent forms with immediate effect.

Impact of the Order

The NCDRC Order calling out the pre-printed informed consent form, will require doctors and hospitals to have a relook at the way their informed consent have to be structured going forward. One needs to see that the reason why NCDRC struck down the pre-printed informed consent form was that it is a form that could fit into any procedure, any doctor, and any patient. A good consent that is obtained from the patient should have information about the medical condition of the patient, the planned diagnosis, name and details of the patient, guardian and the doctor.

In Samira Kohli Judgement, the Hon’ble Supreme Court of India laid down the following with regard to the informed consent:

a. A “real and valid consent” [(i.e.)capacity and competence to consent] should be obtained from the patient prior to the commencement of the treatment, who accords consent voluntarily after being furnished with adequate information such as nature and procedure of the treatment, its purpose, benefit and effects, alternatives available, substantial risks and the adverse consequences of refusing the treatment to the patient.

b. A consent obtained for a diagnostic procedure will not act as consent for therapeutic treatment, and a consent given for a specific treatment procedure will not be valid for conducting some other treatment procedure. Any additional surgery without consent can be performed only to save the life of the patient or preserve the health of the patient.

c. A common consent can be obtained diagnosis and operative procedures which are contemplated and also for a particular surgical procedure that may become necessary during the course of the surgery.

d. The nature of the information furnished should depend upon the physical and mental condition of the patient, nature of treatment and risks and consequences attached and should be of the extent which is accepted as normal and proper by skilled and experienced men in the particular field of medicine, and the American standard for consent is not used by Indian courts as of now.

Reading together the above guidelines on informed consent by Hon’ble Supreme Court with the NCDRC’s Order which held the use of pre-printed consent forms that fits in any procedure, any doctor and any patient as an unfair trade practice, hospitals and doctors need to revisit their consent forms, re-format them so that the consents are procedure specific, and record therein the elements outlined by the Supreme Court in Samira Kohli Judgement.

Where in a particular case the procedure specific consent form would not apply, then a patient specific forms may get necessitated. Hospitals may have to commence using electronically generated specific consent forms for each patient rather than using pre-printed consent forms, so as to avoid issues like the one in the matter of R.G Stone Urology and Laparoscopy Hospital.

Authored by Ammu Brigit

The home delivery of medicines has become a necessity especially during the when everyone is staying safe at their own homes.  Do Indian laws permit the delivery of medicine at your doorstep? Is the functioning of online pharmacies adequately regulated in India? How have various courts dealt with the regulation of online pharmacies? The primary legislation which govern the sale of drugs is Drugs and Cosmetics Act 1945 (“DCA”) and its related rules. Section 18(c) of DCA read together with Rule 65 of Drugs and Cosmetics Rules 1945(‘DCR”) prohibits the manufacturing, distributing, selling, stocking, exhibiting of any drug unless an appropriate license in accordance with the conditions given under DCA is obtained.

DCA does not contain a separate provision for the online sale of drugs and therefore it can be construed that the license to sell under Rule 65 of DCR has to be procured from the licensing authority for the online sale of medicines too. However, the internet-based platforms which facilitates the sale of medicines take aegis under Information Technology Act 2000(IT Act) and have viewed themselves as they coordinate between the customers and pharmacies, and thereby an intermediary network service provider. Under section 79 of IT Act, these intermediaries are protected from any liability, for any third-party information or data made available by them.

Draft Rules with respect to E-Pharmacy

With respect to the regulation of sale of drugs through e-pharmacies in India, the Ministry of Health and Family Welfare (MoHFW) issued draft rules in relation to sale of drugs by e-pharmacy (“Draft Rules”) vide a notification dated 28th August 2018. This Draft Rules proposes a regulatory framework for any business of distribution, sale stock, exhibit or offer for sale of drugs through web portal or any other electronic mode. It mandates the registration of e-pharmacy in accordance with the procedure laid down in the e-pharmacy rules. The Draft Rules envisage delivery of medicines through online web portal or any such electronic mode only against a prescription by a Registered Medical Practitioner (RMP), and also require compliance of privacy and data protection under IT Act. However, the rules have so far remained in draft form and is yet to be notified as an amendment to the DCR by MoHFW.

Disputes and decisions

With many e-pharmacies doing business, led to few disputes by way of writ petitions arraying the government and the e-pharmacies. One such writ petition was filed by Association of Tamil Nadu Chemists and Druggists [Tamil Nadu Chemists and Druggists Association v. Union of India and Ors (WP/28716/2018) decided on 17th December 2018] for blocking the link of websites from India which is engaged in the sale of Schedule H, H-1 and Schedule X drugs in violation of Rule 65 and 97 of DCR. The petitioner contended that the online platforms continue to sell medicines through web portal even though the regulation is not passed by the Central Government. Further, the petitioner contends that the online sale of medicines would defeat the purpose of the DCA which regulates the quality and availability of drugs through prescribed pharmacists. The recalling of drugs, if it is found to have side effects, may not be possible in case of online sale of medicines as tracing the movement of medicines is difficult. The Hon’ble Madras High Court directed on 17th December 2018, the Central Government to notify the proposed amendment rules with respect to sale of drugs through e-pharmacy at the earliest not later that 31st January 2019 and also held that online portals are bound not to proceed with the online business of sale of drugs till the amended rules are published and the appropriate license is procured. However, an order was passed by Hon’ble Madras High Court on 20th December 2019 lifting of the ban of online sale of medicines till further orders.

Similarly, a writ petition was filed in the Hon’ble Delhi High Court by a dermatologist, Dr. Zaheer Ahmed [Dr. Zaheer Ahmed vs. Union of India & Ors {W.P.(C) 11711/2018}] against the online sale of medicines contending that it violated the provisions of DCA. The Hon’ble Delhi Court banned the sale of medicines online and also advised Central Government to pass the amendment rules with regard to the e-pharmacy. Pursuant to injunction order by Hon’ble High Court, the Drug Controller General of India (DCGI), through a letter dated 28th December 2018 instructed all the state regulators to ban online drug sales operating without license.

In these two judgements, the both the courts highlight the need of the Draft Rules to be notified.

Recent Notification by MoHFW on Doorstep Delivery of Medicines

Post the announcement of lockdown in March 2020, MoHFW by notification dated 28th March 2020, allowed the sale of drugs including the drugs specified in Schedule H, Schedule H1 and Schedule X (except narcotics, psychotropic and controlled substances as defined in Narcotics Drugs and Psychotropic Substances Act 1985) delivery at doorstep by any person holding a license in Form 20 (drugs other than those in Sch. C, C(1) & X), or Form 21 (drugs other than those in Schedule X) of DCA. The notification places the following conditions for delivery of Schedule H:

1. The sale to be effected based on the receipt of prescription physically or through an e-mail;

2. The license holder to submit the email id for registration with licensing authority of prescriptions are to be received through email;

3. The drugs to be supplied at the doorstep where the patient is located within the same revenue district where the licensee is located;

4. In case of chronic diseases, the medicine is to be dispensed only if it is presented to the license holder within 30 days of the date of prescription, and in acute cases, the medicine is to be dispensed only if it is presented to the license holder with 7 days of its issue;

5. The bill or cash memo shall be sent by return email and records of all such transactions shall be maintained by the license holder.


It is clear that the notification dated 28th March 2020 by MoHFW, which permits the delivery of medicines at home, helps to improve the business of a pharmacist who has a physical medical store and holds a valid license to sell the drugs. However, this notification does not contain any regulation on the intermediary web portals/platforms which provide the online sale and delivery of medicines. The need of the hour is the passing of the amendment rules to DCA in relation to the sale of medicines via e-pharmacy to regulate the intermediary service providers. A regulated e-pharmacy system would help in the smooth delivery of medicines to the needy at the right times and would also adequately complement the telemedicine practice recommended by the Medical Council of India.

The Ministry of Corporate Affairs has vide notification dated 26th May 2020 and 23rd June 2020 included the spends towards the following activities as expenditure towards CSR activities:

(i) contribution to Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES FUND); and

(ii) any amount spent for the benefit of Central Armed Police Forces (CAPF) and Central Para Military Forces (CPMF) veterans and their dependents including widows.


Ministry of Corporate Affairs (MCA) had Vide notification dated 19th March 2020 waived the requirement of physical presence of directors in the board meeting, in respect of matters which required the quorum (minimum number of directors to constitute a valid meeting) to be present in one place. This relaxation was available till 30th June 2020.

MCA had Vide notification dated 23rd June 2020 extended the aforesaid relaxation by further period of 3 months; 30th September 2020.


Amidst the COVID-19, Ministry of Corporate Affairs (MCA) vide its General Circulars No.14/2020 dated 08th April 2020 and No.17/2020 dated 13th April 2020 had, with respect to matters requiring approval of shareholders, requested the Companies, to obtain shareholders’ approval through postal ballot/e-voting till 30th June 2020, in order to avoid holding a general meeting which requires physical presence of the shareholders at a common venue and if the extra ordinary general meetings is considered unavoidable, then the said EGM was allowed to be conducted through Video Conferencing (VC) or other audio-visual means (OAVM) (“Remote EGM”), to obtain approval from the shareholders on various urgent matters.

The MCA vide its circular dated 15th June 2020 has allowed the Companies to conduct their extra ordinary general meetings through VC or OAVM till 30th September 2020.

The detailed procedure for conducting the meeting through VC or OAVM has been discussed in our blog shareholders-remotely/


 The Companies accepting deposits, are required to deposit at least 20 percent of the amount of its deposits maturing during the following financial year (Deposit Repayment Reserve), in a scheduled bank in a separate bank account. Such sum is to be transferred on or before 30th April each year.

MCA vide circular dated 24th March 2020 extended the date by which the amount of the Deposit Repayment Reserve can be transferred to a separate bank account to 30th June 2020.

The Ministry has vide its circular dated 19th June 2020 further extended the time for meeting this requirement till 30th September 2020.


The Companies which have issued Non-convertible debentures are required to invest or deposit atleast 15% of the amount of debentures maturing in specific methods of investments or deposits before 20th April 2020.

MCA had extended the date for this compliance till 30th June 2020.  It has further extended the time for meeting this compliance till 30th September 2020, vide its circular dated 19th June 2020.


The Ministry has vide its notification dated 23rd June 2020, extended the time for the independent directors to include their name in the data bank of independent directors till 30th September 2020.

As the concerts and events are conducted virtually now in the wake of COVID-19, Indian Performing Rights Society (IPRS), the registered copyright society in India for artists proposed a  new tariff scheme applicable to public performances of  live streaming of online events of musical and literary works by way of live performances or music videos and disc jockey earlier this month. According to this new tariff schemes by IPRS, any free, advertisement supported or ticketed events without sponsor and any sponsored or ticketed event with sponsor were to be charged Rs.20000/- and Rs.60000/- respectively for each event with duration of up to 2 hours. The tariff scheme further lays down the condition on the licensee to take additional applicable licenses required for the exploitation of such works.  As mentioned in the document released by IPRS, the tariff scheme was subject to the approval of the members of IPRS in the general meeting. However, there was no further statement by IPRS on whether the tariff scheme was approval in its general body meeting. As a result of which concerns were raised by the artist group on the charging of royalties for a free or non- sponsored programme.

To address the concerns raised by the artist groups, IPRS on 25th July through a press release explained that the proposed tariff scheme was subject to the approval of IPRS general body and was released ahead of its general meeting inviting comments from its stakeholders. The press release clarified the following:

1. Any live online events which is sponsored, branded, co-branded, ticketed or paid in any form should pay royalties to the authors and creators.

2. The payment of royalty is not applicable for any free events on Facebook, Youtube and Instagram which are not sponsored/branded or co-branded/paid for in way or form during the lockdown or COVID-19, classical, devotional, or folk music events.

IPRS through the press conference also informed that a revised and rationalised tariff scheme which balances the interests of the copyright owners and creators shall be released soon and highlighted that it is not charging the tariff proposed earlier.

A trademark is understood in common parlance as any word or words or a logo used in relation to any trade or business that is primarily intended to indicate source from which any goods or service offerings have originated. Trademarks also help such businesses and brand owners to differentiate their products and services from other persons and business owners.

However, over the years the concept of branding has constantly evolved owing to changing consumer choices and ease of availability of competitive products and services, which has led to brand owners innovating and infusing fresh thoughts in their branding to keep consumers engaged. This has consequentially also led to brand owners become very conscious about protection of their novel branding ideas to create exclusivity in their favour in respect of such trademarks. Brand and trademark owners have constantly tested the law relating to trademarks in seeking legal protection of these novel and unconventional trademarks and have over the years been successful in securing such protection. The trademark law has also evolved over the years to accommodate such brand and trademark protection strategies adopted by trademark proprietors.

The Trademarks Act, 1999 (the “Act”) defines the word trademark as a mark capable of being “represented graphically” and hence registration can be sought on any mark that is capable of being registered graphically. In this note we provide hereinbelow a brief overview of the kinds of unconventional trademarks that are capable of being protected under the Act. Such unconventional trademarks may be in the nature of:

a. SOUND MARKS- Sound marks, in the context of a trademark, are extremely rare. Accordingly, a trademark may consist of a sound and represented by a series of musical notes with or without words. The acceptability of a sound mark depends upon whether the sound has become a distinctive mark that even an average consumer will perceive the sound as being exclusively associated with one person. Some common and popular illustrations of such marks include the 4 bell musical note of Britannia, Yahoo’s yodel, roar of a lion in MGM productions. Recently in India Mastercard successfully secured in its favour a sound mark registration over its Mastercard acceptance tone. Also, Eicher Motors Limited has secured a registration over the thunderous engine sound of Bullet moto bikes.

b. COLOUR MARK- A colour or combination of colours, as applied to the goods or their packaging or as used in relation to their services, may be protected as a trademark, as a colour mark. This is common in relation to a particular colour combination of capsules or tablets adopted by pharmaceutical companies. Recently, Nivea Blue- Pantone 280 C has been granted protection as a in Germany as colour mark. Few other instances of colour marks are the distinctive shade of purple (Pantone 2865C) on the wrappers packaging of milk chocolates of Cadbury, green and yellow colour combination used uniquely on the tractors of Deere & Co.

c. MOTION MARKS- Any moving or animated object or logo that is adopted as a trademark, which is capable of being recognised as a unique source identifier to a particular brand owner is capable of being registered as a trademark under the Act. A popular example of a motion mark is that of the Microsoft windows logo that one notices in the opening screen of a windows PC or laptop.

d. HOLOGRAM MARKS- A hologram is a three dimensional graphical representation technique of an image that was conventionally used primarily for adding authenticity to a particular product or document as having originated from a particular source and to prevent counterfeits and fake products. In India no hologram marks have been registered until date. American Express has been able to secure a trademark registration in the USA in respect of a hologram that is applied by it on the surface of its credit cards.

There are also other instances of unconventional trademarks are: (a) Taste Marks, (b) Smell Marks, (c) Texture Marks. But these marks are today not capable of being registered as a trademark under the Indian trademark law owing to the fact that these marks are incapable of being represented graphically. Nevertheless, some jurisdictions permit registration of such unconventional marks though not capable of being represented graphically.

Few other important kinds of trademarks include Shape marks (for e.g.: Shape or outline of Coca-Cola bottle, Shape of Zippo Lighters, Triangle shape of Toblerone chocolates, etc.,)

FLUID TRADEMARKS- Another evolving area of branding that is relevant in the context of trademark laws is the increase in the usage of “Fluid Trademarks”. Fluid trademarks are marks that are based on an original popular and well-known trademark but which have been rejigged intentionally to appear as a number of variants while retaining some basic and important elements and features of the original mark in order to maintain brand recognition and source identification. Google ‘Doodle’ is the quintessential “fluid trademark”.  While its primary mark and logo remain intact, from time to time–and for one day only – Google changes its conventional, static mark for a colorful, whimsical, and often dynamic alter-ego. Some of the other famous fluid marks are Perrier bottles, Absolut Vodka, MTV Channel logo, etc.,

Authored by Aanchal M Nichani

The Consumer Protection Act, 2019 (‘Act’) came into force on 20th July 2020 and the Act aims to provide for protection of interests of consumers by introducing an effective and timebound administration and settlement of consumer disputes. The digital era and boom in the e-commerce industry had increased the challenges related to consumer protection and disputes which were not covered in the 30-year-old Consumer Protection Act, 1986. Thus, the said Act is a welcome, much needed and comprehensive move and approach by the Department of Consumer Affairs, which aims at addressing such difficulties.

Salient features of the Act:

– E-commerce:

The definition of ‘consumer’ has been widened so as to include offline or online transactions through electronic means by teleshopping or direct selling or multi-level marketing. Further, it also lays down obligations wherein every e-commerce entity is required to provide information relating to return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment, grievance redressal mechanism, payment methods, security of payment methods, charge-back options, etc. including country of origin which are necessary for enabling the consumer to make an informed decision at the pre-purchase stage on its platform.  Further, e-commerce platforms have to acknowledge the receipt of any consumer complaint within forty-eight hours and redress the complaint within one month from the date of receipt under this Act.

– Establishment of Central Consumer Protection Authority (CCPA):

The said authority shall be the central authority to regulate matters relating to violation of consumer rights, unfair trade practices and false or misleading advertisements and promote, protect, and enforce the rights of consumers.  The CCPA will be empowered to conduct investigations into violations of consumer rights and institute complaints / prosecution, order recall of unsafe goods and services, order discontinuance of unfair trade practices and misleading advertisements, impose penalties on manufacturers/endorsers/publishers of misleading advertisements.

The gazette notification for establishment of the Central Consumer Protection Authority and rules for prevention of unfair trade practice in e-commerce are under publication.

– Pecuniary jurisdiction:

i. The Act has revised and enhanced the pecuniary limits of the Consumer Forums. The District Forum shall have the jurisdiction to entertain consumer complaints where the value of the goods or services paid as consideration does not exceed one crore rupees.

ii. The State Commission Forum shall have the jurisdiction to entertain consumer disputes where the value of the goods or services paid as consideration exceeds one crore rupees and in addition, it is empowered to adjudicate complaints against unfair contracts, where the value of goods or services paid as consideration does not exceed ten crore rupees.

iii. The National Commission Forum shall have the jurisdiction to entertain consumer disputes where the value of the goods or services paid as consideration exceeds ten crore rupees and in addition, it is empowered to  adjudicate complaints against unfair contracts, where the value of goods or services paid as consideration exceeds ten crore rupees. Appeals from orders passed by CCPA shall also lie before this forum.

– Simplification of filing and adjudication process of consumer complaints:

In order to simplify the adjudication process of consumer disputes, the Act enables a consumer to file complaints electronically and file complaints in the Consumer Forums that have jurisdiction over the place of his residence or work. In addition, the amendment enables videoconferencing for hearing and deemed admissibility of complaints if the question of admissibility is not decided within the specified period of 21 days.

– Concept of product liability:

The Act introduces the concept of product liability and brings within its scope, the product manufacturer, product service provider and product seller, for any claim for compensation for any harm caused by a defective product. The Act lays down the instances a product manufacturer/ product service provider/ product seller shall be held liable.

– Alternate dispute resolution:

The Act introduces an alternate dispute resolution mechanism of mediation to simplify the adjudication process.  Under this mechanism, a complaint will be referred by a Consumer Forum for mediation, wherever scope for early settlement exists and parties agree for it.

– Penal punishments:

The Act introduces penal punishments for various offences such as:

1. On the manufacturer or service provider who causes a false or misleading advertisement to be made;

2. On any person for manufacturing for sale or storing, selling or distributing or importing products containing adulterant;

3. On any person for manufacturing for sale or for storing or selling or distributing or importing spurious goods.

Authored by Vishaka

Did you know that the song “Happy Birthday to You” that is sung indispensably at every birthday party was a subject matter of copyright and was claimed to be registered and owned by Warner/Chappell music and its affiliates dating back to 1935, which received millions of dollars as copyright royalties for the same. It was later in the 2013 that the issue was challenged and finally decided by the American courts in 2016 and the song came to public domain. Copyright vests even in the architecture of buildings at common places of public attraction and any photography of such buildings by a common passer-by or a tourist, attracts the payment of royalty to the owner of the copyright in the architectural design under Copyright Laws. But do such people actually pay royalty to the owner of such work of architecture for clicking picture of such building and is the owner entitled to demand such royalties or claim copyright infringement on such photographs or will it be construed to be fair use as an exception to Copyright Infringement? This article analyses these questions in the light of the principle of “De Minimis Non Curat Lex” (law does not concern itself with trifles and the law cares not for small things/ law will not resolve petty or unimportant dispute) and its admissibility as a valid ground of defense in matters of copyright infringement and how the Indian Courts have viewed this principle in its application to decide on issues involving copyright infringement claims

In the year 2011, when the defence of “De Minimis” was taken by the respondents in the case of Super Cassettes Industries Limited and Ors v. Chintamani Rao and Ors., in a combined order for interim relief with respect to three suits, the single bench rejected the defense and allowed interim relief of injunction on the grounds that just as the Copyright Act lays down the specific right vested in each party, the exceptions also are prescribed under the Act specifically and hence a general principle cannot be applied by the courts in the case in hand. One of the parties in the three suits, affected by the interim order preferred an appeal to the divisional bench of the Delhi High Court in India TV Independent News Service Pvt. Ltd. and Ors v. Yashraj Films Pvt. Ltd, [MANU/DE/3928/2012], in which the court, pointed out that copyright law invites the maximum trivial violations, as everyday activities, be it clicking picture of a sculpture or singing birthday songs on a birthday party, are instances of frequency with which minor violations of copyright takes place day after day, throughout the world, and that if each of such action is charged with infringement, the courts would be marooned with litigations only on such trivial violations.

The courts in India while adjudicating cases involving trivial copyright violations, have been very cautious and careful so as not to send an adverse message to the public that trivial violations are always exempted.

The Delhi High Court, laid down five factors for applying ”De Minimis” while adjudicating the matter, where a TV channel was sued for copyright violation by a Bollywood producer when the TV channel had broadcasted a chat show in which the performer/singer had sung a bit from seven songs in which the producer had copyrights. The court after referring to various foreign judgements laid down the factors to be considered on a case to case basis while applying the rule of De Minimis, viz:

    • the size and type of the harm,
    • the cost of adjudication,
    • the purpose of the violated legal obligation,
    • the effect on the legal rights of third parties, and
    • the intent of the wrongdoer.

    In the above case, the court observed that the performances from the life of a performer could not be separated and in the natural setting of a chat show if she were to sing more than a wee bit, but not substantially the full songs, as long as the singing duration is limited to a minute or so at a time, it would be a case of De Minimis use, and hence the appropriation of the lyrics would not constitute an actionable violation of the copyright in the sound recording. However, the court also observed that where in case the same show had lesser amount of discussion with the performer, and more of singing songs, then the issue would have had to be dealt differently considering the change in intention of the broadcaster, which would be construed to broadcast the sound recording to the public.

    Similarly, in 2013, in Saregama India Ltd. v. Viacom 18 Motion Pictures and Ors., the High Court of Calcutta while dealing with a question of copyright infringement in lyrics, wherein four or five words out of a famous Hindi song were rendered by the actor in the film, the Court held that there were no copyright over those four or five words, and that even by assuming that the rendition amounted to copyright infringement of the plaintiff’s lyrics, it had no impact, effect or loss caused to anybody and thus was construed as trivial, minimal and ignored by the court by application of the principle of De Minimis.

    Recently, in 2019 the Delhi High Court in Super Cassettes Industries Ltd. v. Shreya Broadcasting Pvt. Ltd, the court relied on the five factors laid down by the divisional bench of the same court in India TV case (discussed above). The court perused the cue sheets submitted by plaintiff, and found that there was atleast 500 minutes of infringement, and hence the defence of De Minimis was not accepted by the court and further compensatory damages were granted in favour of the plaintiff.

    While the Delhi High Court in the case of India TV rendered a detailed order as to the application of the principle/doctrine of De Minimis, one should also note the case of Super Cassette Industries Ltd. v. Hamar Television Pvt. Channel, (2011) wherein the single judge of the Delhi High Court, while observing that it is neither possible nor advisable to define the exact contours of fair dealing as the term is not defined in the Copyrights Act, summarised the broad principles to determine “fair dealing”, as below:

    (i) It is a question of fact, degree, and at the end of the day overall impression carried by the court;

    (ii) In ascertaining whether extracts taken from copyrighted work have been put to fair use, the extent and the length of the extracts may be relevant. Long extracts followed by short comments may in certain circumstances be unfair, while short extracts followed by long comments may be fair. In certain circumstances even small extracts, which are taken, on regular basis may point to unfair use of the copyrighted work.

    (iii) While examining the defence of fair dealing, the length and the extent of the copyrighted work which is made use of, is important, however, it cannot be reduced to just a quantitative test without having regard to the qualitative aspect. In other words, enquiry ought to be made as to whether the impugned extract forms an essential part of the work of the person in whom inheres the copyright. This may be particularly true in the case of musical works where a few notes may make all the difference

    (iv) The motive of the user shall play an important role in assessing as to whether injunction ought to be granted;

    (v) Commercial use of copyrighted work cannot simplicitor make it unfair.

    It would be important to apply the above principles for determining De Minimis also.

    Most people, engage in trivial copyright violations, which if not for the doctrine of De Minimis, would technically be construed as a violation of law. Though the application of this doctrine is not widespread among the Indian judiciary, the same can be considered as easy and quick mode to resolve trivial copyright violation disputes before the court. However, the application of this doctrine, which on the face of it appears to be a subset of “fair dealing” needs to be ascertained on the facts of each case, for it is not just the quantity of violation that is taken into consideration but all the surrounding aspects including the intention of the violating party, circumstances in which the copyrighted work is used et all. Without discounting the fact that rampant usage of the doctrine without detailed analysis may lead to injustice to the copyright holder and dilute the very purpose of the Copyright Act, well founded decisions by application of the doctrine of De Minimis to the case in hand shall help in speedy resolution of cases possessing trivial copyright infringement issues.

Authored by Sri Vidhya Kumar

Micro, Small and Medium Enterprises (“MSME”s) have always been in focus as they contribute about 29% in the GDP of India. With Government of India (“GoI”) focussing on self-reliance, the Ministry of Micro, Small and Medium Enterprises notified on 26th June 2020 (“Notification”), a comprehensive document laying down classification criteria and form & procedure for registration of enterprises in the micro, small and medium enterprises categories.

Classification criteria

The Notification does away with the distinction between manufacturing sector and services sector, and a composite criteria taking into account both investment in plant and machinery and turnover has been introduced.

The table below depicts the classification criteria.

           Composite criteria for manufacturing and services sector
                 Both these conditions to be satisfied
Classification Investment in Plant & Machinery/equipment Turnover
Micro Enterprise ≤ Rs. 1 crores/10 million ≤ Rs. 5 crores/ 50 million
Small Enterprise ≤ Rs. 10 crores/100 million ≤ Rs. 50 crores/500 million
Medium Enterprise ≤ Rs. 50 crores/500 million ≤ 250 crores/2500 million

Computation of investment in plant and machinery or equipment and turnover

The Notification read with the provisions of the Micro, Small and Medium Enterprises  Act, 2006, explains what is to be taken and not be taken for computing the amount of investment in plant & machinery / equipment, and aligns the meaning of the term plant & machinery to the Income-tax Rules.  It is the Income-tax Act, 1961, that defines the term “Plant”, and there is no definition found in the Income-tax Rules for the term “plant and machinery” or even “machinery”.  Whether this would lead to any litigation, one would have to wait to see them.

Having said this, the Notification is clear on the inclusions and exclusions while computing the total investment in plant & machinery/equipment. The cost of all tangible assets (other than land and building and furniture and fittings) are to be included, and the amount of taxes/GST paid on the asset, cost of pollution control equipment, research and development, industrial safety devices are to be excluded.

Also, the investment amount would be determined based on the gross block that is shown in the books of accounts of the enterprise as had been clarified by the Ministry of MSME, by its Office Memorandum (OM) F. No. 12(4)/2017-SME dated March 8, 2017.  So, it would not be the written down value of the plant and machinery/equipment at the end of each year, but only their original cost that will be taken into account for the computation.

Also, for the purpose of determining turnover, only domestic sales is to be taken into account and the export turnover is to be excluded.

Udyam (hindi term for “enterprise”) registration of enterprises

 Unlike the earlier change in the year 2015 introducing Udyog Aadhar Memorandum (“UAM”), when it was not necessary for those enterprises that were registered under the Entrepreneurship Memorandum-II (“EM-II”), under the present Notification, it is necessary for all existing enterprises that have registered under EM-II and UAM to once again register on the portal This registration can be done from the 1st July 2020. [The portal is not accessible as this piece is being written and is being readied for the new udhayam registration].

All existing registered enterprises are required to once again register themselves on this portal, and their present registration will be valid only till 31st March 2021.

Registrations to start with will be based on self-certification basis and going forward the eligibility for an enterprise to remain in its category will be determined by data analytics.

Use of big data

Since, the classification of an enterprise as micro, small or medium is based on the investment the enterprise has made in plant and machinery/equipment, and also the turnover it generates, both being dynamic, the information of gross block of plant and machinery furnished by it in its income-tax return (“ITR”), and turnover in the return filed under the Goods and Services Tax Act, will be used for determining the enterprises’ eligibility to continue in the category, by linking these return to Udyam registration.

Income-tax return and GST returns

While existing enterprises when they register afresh on the portal, are required to furnish details of their ITR and also GST returns for the previous financial year, new enterprises that do not have prior ITR, the computation of their investment in plant and machinery/equipment will be based on self-declaration. The self-declared information will be valid till the enterprise files its first income tax return, after which the same will be linked to the income tax return and GST return filed by the enterprise.

Intimation of change in category

An enterprise that crosses the limits under either criterion will then be placed in the next higher category of enterprise, but for it to be able to move down, then it would have to satisfy both the criteria. This computation will be based on the ITR and also GST returns. When there is a change in status of the enterprise based on its returns, then a communication will be sent to the enterprise about their change in status.  The change from one category to the other will be only after the end of the financial year, and even in case of crossing of either of the limits during the year, the enterprise gets to maintain its category, till the end of that year.

Determination of export turnover

Since, export turnover is not taken into account for computation of turnover, the ITR / GST returns will provide information to GoI for computation purposes.


Electronic filing of information and returns to GoI commenced when the Ministry of Corporate Affairs introduced MCA21, which was sometime in the year 2006. Over a period of time, e-filing initiative has been stepped up and GoI is now using data analytics of information filed with different authorities in order to determine status of enterprises.

Also, since there are many benefits that are being given to MSMEs, with data getting linked to ITRs and GST returns, to avail these benefits, an enterprise needs to be compliant on both these statues and it should not come as a surprise, when information from these returns will be provided on a `need-to-know basis’ to lenders and other financial institutions as presently financial information from MCA21 is limited to corporate form of organisations and does not include proprietorships and partnerships.

Authored by Aanchal M Nichani

Insolvency and Bankruptcy Code (Amendment) Ordinance, 2020

On 5th June, 2020, the Insolvency and Bankruptcy Code (Amendment) Ordinance was promulgated to amend the provisions of the Insolvency and Bankruptcy Code (“Code”). The rationale for the said amendment is to prevent corporate persons experiencing financial distress on account of the unprecedented Covid-19 situation from being pushed into insolvency proceedings.

New Section 10A

The said ordinance enables the government to notify a period of 6 months to a maximum of one year, during which the initiation of corporate insolvency resolution process (“CIRP”) under Sections 7, 9 and 10 of the Code, for any default in payment to creditors, arising on or after 25th March 2020 can be suspended (‘Suspension Period’). This is done by way of inserting a new section 10A in the Code, which has the effect that no application shall ever be filed for initiation of CIRP for a default occurring during the Suspension Period. However, if the default in payment occurred prior to 25th March 2020, there is no bar on invoking the provisions of the Code.

The insertion of Section 10A provides for a permanent immunity against initiation of insolvency proceedings against any debtor committing a default of payment of debts from 25th March 2020 for the period that may be notified (i.e) a minimum period of 6 months and a maximum one year. This step by the government will act as a breather for debtors who are unable to meet their debts given the on-going Covid crisis.

Areas that would get settled with judicial intervention

The language adopted in the newly inserted provision adds ambiguity with respect to defaults that are committed during the Suspension Period and continue beyond the Suspension Period, or if the new provision will act as a blanket and permanent immunity against such defaults. The Ordinance also fails to address the aspect of initiation of insolvency proceedings against personal guarantors of corporate debtors, while corporate debtors are exempted/protected under the said ordinance. It is only judicial interpretation and precedents that will settle these questions.

Avenue for closure by Corporate Debtor themselves

The Ordinance also prevents filing for insolvency proceedings by corporate applicants under Section 10 of the Code. As an alternative, corporates will now have to consider winding up proceedings under the Companies Act, 2013 if they are insolvent, and voluntary liquidation under the Code, if they are solvent.

Personal liability of Directors

The Ordinance also limits the power of a Resolution Professional, during the Suspension Period, to be able to file an application seeking an order from NCLT, to require the director of a corporate debtor to be personally liable for the liabilities of the corporate debtor, if such director knew that the CIRP could have been avoided by the corporate debtor, if he had not exercised reasonable due diligence as a director, in minimising the potential loss to creditors.

Protection from CIRP

The Ordinance does act as a saviour to corporates, from initiation of CIRP, who are battling and struggling to cope with the unprecedented situation and can now breathe a sigh of relief, and enables the promoters to hold on to their companies, and not be pushed into insolvency for defaults committed during the Suspension Period. Just as any other enactment, judicial interventions when these provisions are called into question, as situations that may arise due to Covid are not within comprehension of everyone today, will test the extent of protection the amendments under this Ordinance has sought to provide.


The provisions of Section 10A with respect to defaults occurring during the Suspension Period deal with suspension of initiation of CIRP of the debtor company. It is not the end of the road for creditors, who can still avail alternative legal recourse remedies such as:

a. Financial creditors may pursue restructuring/rearrangement schemes, initiate actions under the SARFAESI Act, 2002, and

b. Operational creditors can explore options such as reference to arbitration if terms of the agreement permit for the same, filing of summary suits, civil suits for recovery of debts, dispute resolution mechanism provided under Section 18 of the Micro, Small and Medium Industries, Act, 2006.

The CGPDTM had issued a Public Notice dated 18th May 2020 with respect to due dates for completion of various acts/proceedings, filing of reply/document, payment of fees, etc. In the said Public Notices the CGPDTM notified that the deadlines falling between 15.03.2020 and 17.05.2020 stand extended to 01.06.2020. It is worthwhile to note that the Hon’ble Supreme Court of India vide its order dated 23rd March 2020, took suo moto cognizance of the difficulties and challenges faced by litigants in filing petitions/appeals /suits and other proceedings within the timelines laid down by various Statutes extended the limitation prescribed under the General Law or the Special Law with effect from the 15th March 2020 until further orders. While this was the case the Public Notice issued by the CGPDTM, which extended the deadlines falling between 15th March 2020 and 17th May 2020 only until the 1st June 2020 was felt to be grossly violative of the aforesaid orders of the Hon’ble Supreme Court and hence aggrieved by these Public Notices the validity of the same was challenged before the Hon’ble High Court of Delhi by the INTELLECTUAL PROPERTY ATTORNEYS ASSOCIATION (IPAA) vide a writ petition. Consequently the Hon’ble High Court of Delhi vide its interim order dated 21st May 2020 stayed the operation of the aforesaid Public Notice and issued notice to the CGPDTM. The said matter came up for hearing on the 17th June 2020 through video conferencing and the Hon’ble High Court of Delhi vide its order dated 17th June 2020 confirmed the continued operation of its earlier interim order dated 21st May 2020 staying the Public Notice of the CGPDTM and thereby directed the CGPDTM to take necessary steps by issuing appropriate notifications on its website intimating the public of the stay of operation of its earlier Public Notice. Consequentially the CGPDTM has issued a Public Notice dated 19th June 2020 withdrawing the Public Notice dated 18th May 2020 and thereby the timelines/periods for the completion of various acts/proceedings, filing of any reply/document, payment of fees, etc. falling due after 15.03.2020, shall be the date as decided/ordered by the Hon’ble Supreme Court. On the above similar lines, the Copyright Office has also issued a Public Notice dated 19th June 2020 withdrawing its earlier public notice and thereby confirming that the timelines for completion of various acts shall be as ordered by the Hon’ble Supreme Court.

The definition of “Drugs” under Section 3(b)(iv) of the Drugs and Cosmetics Act 1940 (“DCA”) also includes medical devices intended for internal or external use in the diagnosis, treatment, mitigation or prevention of disease or disorder in human beings or animals, as may be specified from time to time by the Central Government by the notification of Official Gazette. The definition of medical devices given under Medical Devices Rules 2017 (“MDR”), which is consistent with the definition of drugs under DCA, also includes such devices notified by Central Government from time to time as “Drugs”. Further, the Ministry of Health and Family (“MOHFW”) based on the recommendation of the Drugs Technical Advisory Board, which recommended proposal to notify surgical gowns, surgical drapes and incision drapes as “drugs” under the provisions of Section 3(b)(iv) of DCA issued a notification under the provisions of Section 3 (b) (iv) of the DCA, on 11th February 2020, stating that-

“All  devices including an instrument, apparatus, appliance, implant, material or other article, whether used alone or in combination, including a software or an accessory, intended by its manufacturer to be used specially for human beings or animals which does not achieve the primary intended action in or on human body or animals by any pharmacological or immunological or metabolic means, but which may assist in its intended function by such means for one or more of the specific purposes of: 

    • diagnosis, prevention, monitoring, treatment, or alleviation of any disease or disorder;
    • diagnosis, monitoring, treatment, alleviation, or assistance for, any injury or disability;
    • investigation, replacement or modification or support of the anatomy or of a physiological process.
    • supporting or sustaining life;
    • disinfection of medical devices; and
    • control of conception

     will be construed as “drugs” within the meaning of the provisions of the DCA.”

    This notification has been made effective from 1st April 2020. This notification would imply that, effective from 1st April, 2020 each medical device need not be specifically notified by Central Government pursuant to the definition of “drugs” under the DCA in order to be regulated under DCA and MDR. The implication of this notification is that all medical devices with the intended function as listed above will fall under the purview of DCA and MDR.

    Simultaneous to this notification which regulated all medical devices under DCA, the Central Government introduced Medical Devices Amendment Rules 2020. This Amendment requires the manufacturers and importers to register all medical devices (except the medical devices already notified and regulated) on the Online System for Medical Devices, the online portal established by Central Drugs Standard Control Organisation (CDSCO). This registration is voluntary for a period of eighteen months from the date of commencement of the amendment i.e. till 30th September 2021, after which the registration becomes mandatory.

    Further, the Drugs Controller General of India, CDSCO, Directorate General of Health Services under the MOHFW has issued an advisory notice dated 22nd May 2020 advising the manufacturers of Personal Protection Equipment (PPE) Coveralls to voluntarily consider getting themselves registered with the CDSCO, as a benchmark for their quality management system. This note also states that the PPE is an important medical device for healthcare professionals and in handling of COVID-19 patients.

    On a conjoint reading of the above definition of “drugs” under the DCA, the definition of “medical devices” under the MDR, the notification dated issued by the MOHFW and the advisory note issued by the CDSCO, the inclusive nature of the notification and the broad terminology employed therein stating that a “device” includes any “instrument, apparatus, appliance, implant, material or other article” used “for the prevention of a disease”, gives sufficient grounds to interpret that any article or material such as a  PPE or N95 masks will also be construed to be a “medical device” under the MDR and thus fall within the purview of the provisions of the DCA and the MDR. The amendments to DCA and MDR to construe medical devices as drugs and its regulation has come into effect amidst the spread of the pandemic COVID -19 in India, the subsequent increase in the demand of PPEs and the increase in the number of domestic manufacturers of medical devices especially PPEs. The government has filled the gap in the regulatory framework with respect to the regulation of all medical devices, begetting the manufacture and sale of quality medical devices and effective healthcare.

Authored by Shyamolima Sengupta & Saisunder N.V

In the recent judgement of Imagine Marketing Pvt Ltd v. Exotic Mile, the plaintiffs who are  owners of the trademark “BOAT” in relation to electronic gadgets and such as earphones, headphones, speakers etc., sought permanent injunction restraining the defendants for use of their mark “BOULT” claiming it to be deceptively similar to the plaintiffs registered trademarks BOAT /boAt, and hence amounting to infringement of the plaintiffs trademark and copyright as well as passing of the goods of the defendant’s as that of the plaintiffs.

The plaintiff claimed that the reason for adoption of the word “BOAT” as its brand name ‘boAt’ is that “when you take a boat, you leave everything behind, you plug into a new zone”. The plaintiff thus also adopted the tagline ‘Plug into Nirvana’. The plaintiff had also obtained copyright registration in the mark/logo  and alphabet ‘A’ in ‘boAt’ – , displaying a boat within the letter ‘A’. The plaintiff had also secured registration for the trademarks boAts, with the stylized ‘A’, boAt along with the word ‘nirvana’ in class 9, 11 and 35. The plaintiff claimed that it had put in a lot of effort and investment to promote and advertise its products under the boAt trademark by entering into contracts with various celebrities as its brand ambassadors and were also the licensing partner to various sporting events.

The plaintiff submitted that they first learnt about the defendant’s trademark in February 2019 when the plaintiff received an email from Myntra regarding a customer complaint of the defendant’s product. Thereafter, the plaintiff has been regularly receiving complaints by emails from various customers and distributors regarding sub-standard quality of defendant’s products which have been reported to the plaintiff as plaintiff’s products, clearly evidencing that the customers were getting confused between the plaintiffs and defendant’s products. The defendant was selling its product on the same platform on which the plaintiff was selling its products i.e. Amazon and Myntra.

The plaintiff alleged that the defendant had dishonestly adopted the trademark BOULT which is phonetically and deceptively similar to that of the plaintiffs mark BOAT, with the same opening and closing syllables as well as the logo ‘A’ despite the fact that the defendant’s brand name BOULT does not have the letter ‘A’. In addition, the defendant had also adopted the tagline i.e. ‘UNPLUG YOURSELF’ which is deceptively similar to the plaintiff’s tagline ‘PLUG INTO NIRVANA’. Apart from that the defendant also copied the names of the plaintiffs product like ‘Boult BassBud’ which is deceptively similar to that of plaintiffs product ‘boAt BassHeads’. It was also claimed that by adopting and using the elements of the plaintiff’s registered trademark, the defendant was trying to piggyback on the plaintiff’s goodwill and popularity.

The defendant had argued that it is a proprietorship firm engaged in the business of audio gadgets specializing in headphones and speakers and have started its operation in the year 2017. The defendant submitted that they coined and adopted the trademark/trade name, BOULT and BOULT AUDIO ‘’ in the year 2017 which were also registered in their favour under Class 9. As regards logo they submitted that their trade name ‘BOULT AUDIO’ was mentioned in the logo. The defendant contented that there is no similarity between the two marks and that the trademark of the plaintiff, if any that is used in a standalone manner is actually, which is completely different from the plaintiff’s logo and the defendant’s logo. Further the tagline of the plaintiff and defendant are also not similar, the only common word being ‘PLUG’ which is common to trade. The defendant also claimed that since the defendant was selling its product under the trademark BOULT since the year 2017, plaintiff was not entitled to any injunction in view of the delay.

The Court while ruling in favour of plaintiff in the matter held as under:

1. The Court rejected the defendant’s plea regarding delay in filing of the suit for the reasons that firstly in a case of dishonest adoption mere delay in bringing the action is not sufficient to defeat the claim of grant of injunction, as also, the delay if any by the plaintiff in bringing the action for injunction does not amount to acquiescence by the plaintiff. The Court relied on Supreme Court’s judgement in Midas Hygiene Industries (P) L td. Vs. Sudhir Bhatia & Ors wherein it was held that mere delay in bringing the action is not sufficient to defeat the grant of injunction. Further reliance was placed on the case of M/s. Hindustan Pencils Pvt. Ltd. V. M/s. India Stationery Products Co. & Anr wherein the Delhi High Court held that inordinate delay would not defeat an action for the grant of a temporary injunction especially where the use by the defendant of the mark was fraudulent.

2. The Court noted that plaintiff was the prior user of the trademark BOAT for similar goods and had an established market when the defendant’s son acted as a consultant for a distributor of the plaintiff’s product even as per its own submission. Thus, the defendant was aware of the mark of the plaintiff.

3. The Court considered the phonetic similarity in the rival marks and held defendant’s mark BOULT to be deceptively similar to the plaintiff’s mark ‘BOAT’. In this connection, the Court placed reliance on the Supreme Court judgement Chinna Krishna Chettiar v.Shri Ambal and Co., Madras & Anr wherein it was held that the resemblance between the two marks must be considered with reference to the ear as well as the eye. Also, reliance was placed on the judgement of Encore Electronics Ltd. v. Anchor Electronics and Electricals Pvt. Ltd. wherein the Court considered the mark ‘Anchor’ to be similar to ‘Encore’ and held that “The overall impression conveyed by a mark as a whole, has to be assessed in evaluating whether the mark of the Defendant is deceptively similar to the mark of the Plaintiff. Phonetic similarity constitutes an important index of whether a mark bears a deceptive or misleading similarity to another. The phonetic structure indicates how the rival marks ring in the ears”.

4. The Court also observed that the class of users of the products sold by the plaintiff and defendant were from all sections of the society including children as well. Accordingly, BOAT and BOULT being quite phonetically similar, a consumer would not have a correct complete and reflection when he goes to buy the product whether the product is of BOAT or BOULT because of the first two and the last alphabet of the two words being the same. Further, the logo of the two products is also similar in the form of a triangle. The tagline also uses the word PLUG in both so as to cause a deception. In this regard, the Court relied on the judgement in Hindustan Sanitaryware (supra) wherein it was held that a mark has to be looked into as a whole and on looking at it as a whole, if there is a phonetic similarity resulting in every likelihood of deception the plaintiff would be entitled to grant of injunction. The Court decided to overlook the defendant’s usage since 2017 and also the expenses invested in promotion and advertising given the dishonest intentions in adoption of the mark ‘BOULT’, the logo containing the alphabet ‘A’, the tagline as well as deceptively similar product names along with similar get up and colour scheme for its products and packaging.

Accordingly, the Court decided in favour of the plaintiff by granting an interim injunction and restraining Exotic Mile from using the trademark ‘BOULT’ as well as the tagline ‘UNPLUG YOURSELF’ until the disposal of the suit.

Authored by Shyamolima Sengupta & Saisunder N.V

Heraclitus, the well-known Greek philosopher rightly said that- “The only constant in life is the change”. These thoughtful words have become more relevant than ever in today’s rapidly growing markets, where consumer behavior is ever-changing, which is attributable largely to the availability of information readily on any aspect of procurement and also further because of the plethora of product and service choices in the market. This ever-changing landscape in consumer choices and behavior has also led to innovation in branding of products and services and has challenged the conventional principles of branding that a trademark should be static to become stronger.

It is in this context that “Fluid Trademarks” have come into existence as a dynamic marketing tool and are becoming an increasingly popular mode of branding where brand owners adopt novel ways to grab the attention of their consumers by way of a brand rejuvenation in order to retain consumer engagement but nevertheless bearing in mind the all-important aspect and fundamental purpose of trademark viz., “Source Identification”.

Fluid trademarks are marks that are based on an original popular and well-known trademark but which have been rejigged intentionally to appear as a number of variants while retaining some basic and important elements and features of the original mark in order to maintain brand recognition and source identification. While browsing and surfing through the internet, we often encounter many popular traditional trademarks / brands in different variations. These are the new age trademarks as they are eye catching and ever changing which are created more likely to attract the public’s attention in the commercial space in this digital era. These marks prove to be a big hit for the brand owners to connect with people with the changing trends in the market and by customizing the traditional marks as per the current occasion, festival, season, weather, etc. to leave a message.

Fluid marks can take several forms, including logos, graphic symbols, verbal elements, or a combination thereof (i.e. any type of identifier that qualifies as a trademark). Google ‘Doodle’ is the quintessential “fluid trademark”.  While its primary mark and logo remain intact, from time to time–and for one day only – Google changes its conventional, static mark for a colorful, whimsical, and often dynamic alter-ego. Some of the other famous fluid marks are Perrier bottles, Absolut Vodka, MTV Channel logo, etc.

It is pertinent to mention that people should not confuse fluid trademarks as daily updates or family of marks or mere presenting a mark in different colours. The different ways in which a traditional trademark can be represented as a fluid trademark are (a) by ornamenting the trademark, (b) changing background of the trademark, (c) filling a frame like the icons of the television channels, (d) employing moving designs and (e) adopting multiple and ever-changing designs.

Why do companies go for Fluid trademarks?

    • Fluid marks are more eye catching than a mark that stays the same.
    • To maintain interest in the brand. Capture consumer attention – particularly online.
    • Strengthen brand awareness by interacting with consumers.

    While fluid trademarks present a novel way of marketing their trademarks to sustain customer engagement and interest in a brand, such trademarks also present a challenge to brand owners from a legal perspective in terms of their protection under the trademark laws. Some of the potential challenges for a brand owner in using fluid trademarks are as under:

      • There is risk of cancellation based on a claim of abandonment if the original mark is not used as registered.
      • It is not cost-effective to have all the variants of the mark registered.
      • In case the trademark owner has not applied for trademark protection for its variants, he cannot initiate a procedure when a third party uses one or more signs that correspond to these variants. The protection only extends to his registered underlying mark.

      Accordingly, it is important for brand owners to bear in mind the following important legal aspects from a trademark protection perspective while adopting fluid trademarks as a branding tool:

        • It is prudent to first register the original trademark, as it may not be practical to register every single variant especially since they have a very short shelf life that serve a limited purpose.
        • Marks should already be established marks with a history of use and consumer recognition, so that the trade and public can understand and relate to the variant form.
        • The primary mark should be used continuously and uninterruptedly.
        • The main characteristics of the original mark should remain intact in the variant mark; otherwise the trade and public may fail to recognize it in its variant form, thus defeating the purpose of the marketing strategy.
        • It is essential to conduct due diligence before adopting the respective fluid theme to avoid imitating other’s existing brand/concept/idea.
        • Protecting each variation through copyright registration, when appropriate.
        • The variant marks can also be protected as Series trademarks.


        The trademarks perform as a source identifier by extensive usage. However, in the rapidly changing world, the brand owners adopt every possible approach to keep up with the competition and grab the consumer’s attention. The fluid trademarks though help to popularize the mark by adopting a new and trending approach, it should be used wisely in the Indian market given that the concept of fluid trademarks is yet to be tested in the Indian Courts and can be safeguarded only though common law protection and by placing reliance on the original registered mark. If used judiciously, the owners can make most out of the same for their brands.

        “If we don’t change, we don’t grow. If we don’t grow, we aren’t really living” – as quoted by Author Gail Sheeshy.


Authored by Sharadaa

Letter of Undertaking (LUT) is a document submitted by the exporter in order to export goods or services without payment of taxes under the Goods and Services Tax regime.

On due consideration of the difficulties faced by the exporters in submission of an LUT for exporting goods/services without payment of tax in the earlier tax regime, the Central Board of Excise and Customs vide Notification No. 37/2017 – Central Tax dated 4th October, 2017 extended the facility of LUT to all registered exporters subject to certain conditions and safeguards.

The following are to be noted upon furnishing an LUT:

1) Eligibility to export under an LUT:

All registered suppliers who intend to export goods or services without payment of integrated tax except:

i. person(s) prosecuted for an offence under GST Act or any of the existing laws and

ii. the amount of tax evaded in such cases exceeds Rs. 250 lakhs

2) Validity of an LUT:

An LUT shall be valid for the whole financial year in which it is tendered. It must be tendered fresh for every financial year.

3) How and when to furnish an LUT?

Through Form RFD-11 on GST portal (, before exporting the goods/services. No document needs to be physically submitted to the jurisdictional office.

4) Time period for acceptance of an LUT

An LUT shall be deemed to have been accepted as soon as an acknowledgment bearing Application Reference Number (ARN) is generated on furnishing the same online.

5) Declarations given in an LUT

a) To export goods/services without payment of Integrated Goods and Service Tax (IGST) within the time specified in rule 96A(1) of CGST Rules

b) To observe all the provisions of the GST Act and Rules, in respect of export of goods/services

c) In the event of failure to export the goods/services, to pay IGST along with interest @ 18% p.a on the tax unpaid, from the date of invoice till the date of payment

6) Consequences of non-compliance of export within the specified time under rule 96A(1) of CGST Rules

An exporter has an option to export goods/services without payment of IGST under an LUT. However:

    • if the goods are not exported out of India within three months from the date of issue of invoice for export; or
    • if the exporter has not received payment for the services rendered, within one year from the date of issue of invoice for export

    then such exporter shall be bound to pay IGST due along with interest @ 18% p.a within a period of 15 days.

    Also where the goods/services are not exported within the time specified in rule 96A(1) of CGST Rules and the registered person fails to pay IGST along with interest, the facility of export without payment of tax under an LUT shall be deemed to have been withdrawn. Subsequently, post payment of IGST due along with interest, the facility of export under an LUT shall be restored.

    7) Application to Special Economic Zone (SEZ):

    All the above provisions with regards supply of goods and/or services without payment of IGST under an LUT shall apply in respect of supply of goods and/or services to SEZ developer or SEZ unit


    Export of goods/services is an integral part of foreign currency inflow into the Indian economy. Relaxing the cumbersome and time-consuming process of manual application of LUT and extending the facility to all registered tax payers is a welcome move which facilitates increasing the foreign currency inflow into the economy and availability of additional working capital to the individual exporter. Thus, a win-win situation to both the economy and the individual exporter.

Authored by Lakshmi Rengarajan



Under the current scenario of COVID-19 pandemic and the consequent lockdown, various business organisations are facing severe impact on the performance as there is restriction on the operation of its activities.

SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 (“LODR”) requires listed companies to intimate the stock exchange, the events or information which are deemed to be material (Para A of Part A of Schedule III) and the events which will be considered material based on the application of the criteria for determination of materiality of events/information (Para B of Part A of Schedule III).

Disruption of operations of any one or more units or division of the listed entity due to natural calamity (earthquake, flood, fire etc.), force majeure or events such as strikes, lockouts etc., will be considered as a material event, based on the application of criteria of materiality.


One of the criteria for determination of materiality of an event is whether the omission of disclosure of an event or information is likely to result in significant market reaction if the said omission came to light at a later date.


Based on this, most of the listed entities have made disclosures, primarily intimating shutdown of operations owing to pandemic and resultant lockdowns. However the listed companies have not disclosed the financial impact of the disruption in operations, which may be considered material based on the criteria specified above.

Also Para C of Part A of Schedule III requires the listed entity to disclose any information exclusively known to the listed entity, which may be necessary to enable the holders of securities of the listed entity to appraise its position and to avoid the establishment of a false market in securities.

The financial and operational impact of COVID-19 pandemic on a listed entity’s business, as and when it crystallises to the management, may be an information which is likely to result in a significant market reaction, if disclosed at a later date and hence the listed entity is advised to disclose the same, as and when the management becomes aware of the impact.


SEBI has issued an advisory on disclosure of material impact of COVID-19 to listed entities under LODR vide circular SEBI/HO/CFD/CMD1/CIR/P/2020/84 dated 20th May 2020 (“SEBI Circular”) encouraging them to evaluate the impact of the COVID-19 pandemic on their business, performance and financials, both qualitatively and quantitatively, to the extent possible and disseminate the same to the Stock Exchange, to ensure that all the investors have access to timely, adequate and updated information.

The SEBI Circular provides guidance on the matters which can be covered under disclosure with respect to impact of COVID-19 Pandemic:

1. Impact of the COVID-19 pandemic on the business;

2. Ability to maintain operations including the factories/units/office spaces functioning and closed down;

3. Schedule, if any, for restarting the operations;

4. Steps taken to ensure smooth functioning of operations;

5. Estimation of the future impact of COVID-19 on its operations;

6. Details of impact of COVID-19 on listed entity’s –

    • capital and financial resources;
    • profitability;
    • liquidity position;
    • ability to service debt and other financing arrangements;
    • assets;
    • internal financial reporting and control;
    • supply chain;
    • demand for its products/services;

    7. Existing contracts/agreements where non-fulfillment of the obligations by any party will have significant impact on the listed entity’s business;

    The Circular further suggests that the company may disclose further material updates on a regular basis and provide the impact of the COVID-19 on their financial statements along with the financial statements submitted with the Stock Exchange.


    A listed entity, as and when it becomes aware of the impact of COVID-19 Pandemic on its financial position and business, is required to disclose the same to the stock exchanges and in this regard, SEBI has provided guidance on the matters which may be covered under disclosure with respect to impact of COVID-19 Pandemic.

Authored by N. Umayaparvathi

With the lockdown declared across the country spread across four versions and 60 days, one question that was constantly raised was whether tenants are entitled to claim waiver/suspension of payment of rent. The Delhi High Court, in a recent judgment in Ramanand v. Dr. Girish Soni (decided on 21.05.2020), addressed the issue and set out certain parameters to be considered while deciding whether a tenant could claim exemption from payment of rent on account of the lockdown, and the same is discussed in this article.

Factual background:

The Petitioner (Tenant), a dentist, having possession of premises under lease deed from 1st February 1975, for a rent of Rs. 300/- per month, was vide order dated 18th March 2017 (of the Rent Controller appointed under the Delhi Rent Control Act) ordered to vacate the premises, which on appeal to Rent Control Tribunal was upheld. The Tenant filed the instant revision petition before the Delhi HC (Court), and Court had stayed the eviction order subject to the condition that the Tenant would pay a sum of Rs. 3.5 lakhs per month as rent with effect from October 2017. It was also set out that any default in payment would vacate the stay granted and entitle the Landlord to execute the order of eviction.

In these circumstances, the Tenant had moved an urgent application for suspension of payment of rent during the lockdown period on the ground that the pandemic and lockdown are force majeure beyond the Tenant’s control.

Analysis and decision:

The Court dismissed the urgent application after considering several important aspects of law pertaining to the issue of suspension of payment of rent.

Force majeure and frustration

The Court while holding that the rights and obligations of parties would primarily be governed by the contract set out an inclusive list of 5 kinds of lease agreements, for which the issues of waiver/suspension of rental dues would be decided differently. The Court, relying on Energy Watchdog i, reiterated the trite principle that if a contract contains a force majeure clause, it would be examined in light of section 32 of the Indian Contract Act, 1872 and not section 56.

Therefore, if the Tenant is able to prove that the agreement contains a provision providing for exemption from payment of tenant due to a force majeure event, the same would be considered.

If, however, the contract does not contain a force majeure clause or an exemption clause, section 56, which deals with frustration of contract, could be invoked. Section 56 however, does not apply to completed transfers as in the case of a lease which is a completed conveyance and therefore, section 56 cannot be invoked by a tenant to claim suspension of rental payments. In coming to this conclusion, the Court was aided by the decision of the Hon’ble Supreme Court in Raja Dhruv Dev Chand ii, where in a petition seeking refund of rent paid owing to non-utilisation of land in light of the 1947 partition, it was held that

“A covenant under a lease to do an act which after the contract is made becomes impossible or by reason of some event which the promisor could not prevent unlawful, becomes void when the act becomes impossible or unlawful. But on that account the transfer of property resulting from the lease granted by the lessor to the lessee is not declared void.”

The Court thus, relying on the above decision, T. Lakshmipathiiii, Energy Watchdogiv and Leela Venturev, concluded that section 56 of the Indian Contract Act, 1872 would not apply to lease agreements.

Transfer of Property Act

While the provisions of the Transfer of Property Act, 1882 govern tenancies and leases in the absence of a contract, section 108 (B)(e) of the Act, which deals with rights and liabilities of lessor and lessee, recognises force majeure. Section 108 (B)(e) provides that where a property is, due to force majeure conditions, wholly destroyed or rendered substantially and permanently unfit for the purposes for which it was let, the lease may, at the option of the lessee be void.

The Court took into account decisions in Raja Dhruvvi (where it was held that temporary non-use by the tenant would not entitle the tenant to invoke the provision of force majeure under the Transfer of Property Act), T. Lakshmipathivii (citing Woodfall’s Laws of Landlord that even destruction of the entire building would not affect continuance of the lease or the lessee’s liabilities under the same, unless expressly provided so in the contract), and Shaha Ratansi Khimjiviii (Lease is not merely lease of the building, but also of the site as such), and Sangeeta Batraix (Mere sealing of the premises or such similar temporary non-utilisation of premises would not entitle a party to invoke the provision), while concluding that provision in force majeure in Transfer of Property Act contemplates only situations where the property is rendered permanently unfit for use and situations such as non-utilisation due to lockdown do not confer any right on the Tenant to claim exemption.

Suspension of rent

On the question of suspension of rent, the Court considered precedentsx to conclude that suspension of rent would depend on the nature of the contract and the terms contained therein.


The Court devised the following criteria to consider whether a tenant could claim suspension of rent payment amidst the lockdown:

i. Nature of the property

ii. Financial and social status of the parties

iii. Amount of rent

iv. Other factors such as the fact that the Tenant in this case was an “unauthorised occupant” in light of the eviction order

v. Contractual conditions

vi. Protection under executive orders such as those issued by various Ministries of the Government providing protection to certain categories of citizens.

Considering the facts that the Tenant in the instant case had been paying a paltry sum of rent till the order enhancing the rent amount to Rs. 3.5 lakhs, which in itself was less compared to the prevalent rates, that the Tenant did not intend to vacate the property, that there was no provision in the contract providing for such suspension of rental payments and that the Tenant was not covered by any protective order issued by the Government for exemption of rent, the Court rejected the application for suspension of rent. The Court however opined that postponement or relaxation in schedule of payment may be granted considering the circumstances.


The Delhi High Court has provided much needed clarity on when reduction of or exemption from payment of rent by tenants could be granted. The Court has also set out in clear terms that there is no inherent right to claim suspension of payment of rent by tenants in light of Covid – 19, and that each case has to be considered on the basis of the relevant contract as well as the circumstances of each case. While acknowledging that it would be difficult to provide a straitjacket formula, the Court has set out some extremely significant criteria which might come to the aid of courts while deciding similar issues. The judgment might thus provide a useful yardstick/benchmark against which courts might decide the implications of the lockdown on rental payments.


i Energy Watchdog v. CERC & Ors (2017) 14 SCC 80

ii Raja Dhruv Dev Chand v. Raja Harmohinder Singh & Anr., AIR 1968 SC 1024

iii T. Lakshmipathi and Ors. v. P. Nithyananda Reddy and Ors., (2003) 5SCC 150

iv Supra i

v Hotel Leela Venture Ltd. v. Airports Authority of India, 2016 (160) DRJ 186

vi Supra ii

vii Supra iii

viii Shaha Ratansi Khimji & Sons v. Kumbhar Sons Hotel Pvt. Ltd. & Ors., (2014) 14 SCC 1

ix Sangeeta Batra v. M/s VND Foods & Ors., (2015) 3 DLT (Cri) 422

x Raichurmatham Prabhakar and Ors. v. Rawatmal Dugar, (2004) 4 SCC 766; Surendra Nath Bibran v. Stephen Court, AIR 1966 SC 1361Aranya Hospitality Management Services Pvt. Ltd. v. K. M. Dhoundiyal & Ors. [Arb. A. (Comm.) 6/2017, decided on 21st March, 2017]


Authored by Ammu Brigit


the delivery of health care services, where distance is a critical factor, by all health care professionals using information and communication technologies for the exchange of valid information for diagnosis, treatment and prevention of disease and injuries, research and evaluation, and for the continuing education of health care providers, all in the interests of advancing the health of individuals and their communities”.

~ World Health Organisation on what is Telemedicine

Amidst the outbreak of the pandemic COVID-19 and the consequent lockdown in India, when social distancing from one another is mandated, the Medical Council of India (MCI) has encouraged the doctors and health workers to practice telemedicine, whenever appropriate, to provide healthcare services, and Board of Governors (BoG) of MCI has in March 2020, issued the Telemedicine Practice Guidelines (“Guidelines”) as part of the Indian Medical Council (Professional Conduct, Etiquette  and Ethics Regulation 2002 under the Indian Medical Council Act 1956 (“IMC Act”).

Overview of the Guidelines:

The Guidelines comprehensively set out the standards, norms and procedures to be followed by any person who has enrolled in the State Medical Register or the Indian Medical Register under IMC Act ( “Registered Medical Practitioner/RMP”) while practising telemedicine in India through any mode of communication viz video, audio or text based communication either for exchange of information in real time or in synchronous modes for first consults or for follow up patients.  The Guidelines mandates RMPs to complete an online training session to be provided by BoG within three years of date of notification of the Guidelines.

Professional judgement, medical ethics and privacy:

The Guidelines underlines that the core of telemedicine practice is the professional judgement skill of an RMP to decide whether the remote consultation is sufficient or in person consultation is required. The Guidelines insists that, in general, RMP should also advice for an in person consultation in all cases of emergency. Specifically, when an alternative in person care is available, consultation through telemedicine should be avoided in case of an emergency and should be limited to first aid, life saving measures, advice on referral and counselling. However, if alternative care is not possible, then RMP may provide consultation to best of their judgement. The Guidelines also highlights the need to uphold medical ethics and the practice of applicable laws and principles of privacy, confidentiality while handling the personal records of the patients during telemedicine.

Electronic Infrastructure:

The Guidelines exclude any specification to a hardware or software, infrastructure or maintenance, data management systems involved, use of digital technology involved for remotely conducting surgeries, other aspects of telehealth such as research, evaluation and continuing education, consultations provided outside India.  Further, the Guideline specifically bans technology platforms based on artificial intelligence from counselling or prescribing medicines to patients. However, such platforms could help RMP in the evaluation of a patient.

Prescription of medicines:

The Guidelines lays down the step by step procedure to be followed by an RMP starting with the identification of the appropriate mode of communication for telemedicine till the prescription of medicines to the patients. The Guidelines allows RMP to prescribe medicines to the patient through telemedicine consultation with certain restrictions depending on the type of consultation. The Guidelines categorises the medicines to List O, List A, List B and Prohibited List depending on the safety of the medicines, mode of communication used by the RMP for telemedicine and the prohibitions placed by Drugs and Cosmetics Act 1940 and  Narcotic Drugs and Psychotropic Substances Act 1985.

The Guidelines set out the names of the drugs categorised as per each list in Annexure -1 to the Guidelines. It is pertinent to note that prescribing medicines without appropriate diagnosis by RMP will amount to professional misconduct. RMP must prescribe medicines as per Indian Medical Council (Professional Conduct, Etiquette and Ethics Regulation 2002 and not in contravention with Drugs and Cosmetics Act and Rules. According to the Guidelines, RMP can appropriately charge for the consultation provided using telemedicine and can also provide an invoice for the same to the patient


We have seen several telemedicine initiatives were taken by the government departments in collaboration with the private hospitals in India and also saw the development of several technology platforms which connected doctors and patients virtually. Prescription without diagnosis was also questioned in Deepa Sanjeev Pawaskar And Anr vs The State Of Maharashtra (2018 SSC Online Bom. 1841). The Hon’ble High Court of Bombay held that a doctor couple was guilty of criminal negligence for the death of patient after prescribing her medicines through telephone without diagnosis. In this case, the negligence of the doctors was in the inability of the doctor to determine the right diagnosis for a follow up patient of the doctor even though the patient contacted her through phone. The judgement of the High Court was not against the practice of telemedicine. If the Guidelines were in force at the time of this incident, the act of the doctor would have amounted to misconduct for prescribing medicine without proper diagnosis, and may not have been criminal negligence. This judgement also called for the standardisation of the procedure to be adopted while the RMPs and the health workers adopt telemedicine practice for diagnosis. The release of the Guidelines by Indian Medical Council has created given a legal identity to the telemedicine practice in India which will help the medical fraternity in India to impart their accumulated knowledge and resource legitimately to people in need at a distance especially during spread of a pandemic.

Authored by Aneeruth Suresh & Adit N Bhuva

The Government of India (“GoI”) has reviewed and amended the Foreign Direct Investment (FDI) policy to curb opportunistic takeovers/acquisitions of Indian companies, consequent to Covid-19 pandemic, and the GoI has vide Press Note No. 3 (2020 series) dated 17th April 2020 (hereinafter “PN3”) and has revised the FDI policy to this effect.

In this article, we examine the FDI policy amendment, and the areas that are desired to be addressed either by the GoI and/or Reserve Bank of India.

Present Position in FDI Policy

The FDI policy in India is structured in such a way that certain foreign investments are covered either under automatic route or under the approval route (i.e. prior approval of GoI is required before the foreign investment is made). The factor to determine whether a foreign investment is covered under automatic route or government route (“Entry Route”) is based on either the geographical origin of the investment, or on the sector in which the foreign investment is being made.

Prior to PN3, investments that had the following geographical origins were covered under the government route:

(i) By a citizen of Bangladesh or an entity incorporated in Bangladesh;

(ii) By a citizen of Pakistan or an entity incorporated in Pakistan. (It is to be noted that investment from Pakistan in defence, space, atomic energy and sectors prohibited for foreign investment is not allowed even under approval route)

PN3 modification to FDI Policy

With PN 3, the GoI has increased the coverage of the investment from geographical origin, which was earlier limited to Bangladesh and Pakistan, to cover all countries that share land border with India. While the Press Note does not specify the countries that share a land border with India, as per the information made available by Department of Border Management, Ministry of Home Affairs, GoI, the following are the seven countries with whom India shares its land borders, viz: China, Pakistan, Bangladesh, Nepal, Myanmar, Bhutan and Afghanistan.

Instances when prior permission will be required under PN3

a. Direct investments into an Indian company, either from citizens or entities from the aforementioned countries, require prior approval of GoI.

b. The need for prior approval of GoI, under the press note, would extend to investments from entities from other geographical locations too, if the beneficial owner of such entity is a citizen of any of the above-mentioned seven countries.

c. The present language of PN 3 indicates, that if the beneficial owner, even though not a citizen of the seven countries that share land border with India, but is a resident (situated) in any of those countries would also require prior permission from GoI.

d. When there is a share transfer from an existing shareholder to an entity/individual to another, which will result in the shares getting transferred to those covered under (a) to (c) above.

Effective Date:

The changes made in PN 3 was made effective from the date of amendment to the relevant regulations under Foreign Exchange Management Act, 1999 by the RBI.

RBI has since made amendment to Foreign Exchange Management (Non-debt Instrument) Rules, 2019 by way notification no. S.O. 1278(E) dated 22nd April 2020 (“RBI Notification”).

Issues that need to be addressed

1. Neither PN 3, nor the RBI Notification list out countries, and for this one would have to refer to information made available by Department of Border Management Ministry of Home Affairs. Two geographies that have a China connect, viz: Hongkong and Taiwan, fall into a unique category. Hongkong falls under the category of “One Country, Two Systems”, and is a “Special administrative region” of “People’s Republic of China”, which is recognised by GoI. So, it appears that investments from Hongkong will also be covered by PN 3 and RBI Notification.

2. However, Taiwan, which is also known as Republic of China, may stand in a different footing, given the relationship between India and Taiwan, and investments from Taiwan may not be restricted by PN 3 and RBI Notification.

3. The terms “Beneficial Owner”, “Beneficial Ownership” used under this PN3 are not defined nor they are defined under the Foreign Exchange Management Act, 1999 read with the RBI Notification. There are other enactments that define the term “Beneficial Owner”.

a. Prevention of Money Laundering Act, 2002:

Rule 9 of the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 read with the Master Direction – Know Your Customer (KYC) Direction, 2016 as on 1st April 2020, defines “Beneficial Owner” to identify an individual behind an entity opening an account with a bank.

As per this, a “Beneficial Owner” is a natural person(s) who act(s) on his/her own or together or along with any juridical person, and lays down two criteria for determining the beneficial owner:

(i) Based on certain rights in the investing entity; or

(ii) Based on threshold on stakes held in the investing entity.

An individual will be considered as beneficial owner of an entity investing in the Indian Company,

(A) if such Individual has the right to appoint majority of the directors or to control the management or policy decisions, whether by way of

(i) shareholding;

(ii) management rights;

(iii) shareholders agreements; or

(iv) voting agreements.


(B) If such individual owns 25% of shares or capital or profits of the body corporate investing in the Indian Company or in case, the entity investing is a non-body corporate (i.e., partnership firm, unincorporated association, body of individuals, Trust), the individual should own 15% of the non-body corporate.

b. Companies Act, 2013:

The other law which uses the term beneficial owner is Companies Act, 2013 and it defines the term “Significant Beneficial Owner (SBO)”. This term is used in the context of identifying an individual holding significant interest indirectly, in an Indian Company.

Under the Companies Act, for an individual to be considered as a Significant Beneficial Owner amongst other criterion, two conditions have to be satisfied:

(i) The individual should hold more than 50% stake in the entity registered outside India, that is proposing to invest, or 50% stake in the ultimate holding company of that investing entity; and the other is

(ii) The investing entity should hold in the Indian Company more than 10% of the share capital, or voting rights, or right to dividend or significant influence.


Although it seems the definition of the beneficial owner under Prevention of Money Laundering (Maintenance of Records) Rules, 2005, can be taken to identify the beneficial owner of an investment in an Indian Company, it is still left to different interpretations as the same is not explicitly defined in the PN3.   Hence the Government of India/RBI should clarify the term beneficial owner/ beneficial ownership.

With the Government of India giving a thrust on ease of doing business, it is only important that it clarifies on the matters relating to the threshold of beneficial ownership, threshold investment from the land border countries that require prior approval of GoI, and also the position of investment from Taiwan and Hongkong, so as to avoid delays in investment in the Indian companies that receive the investment.

Please feel free to contact us in case of clarification or any assistance required in Foreign Exchange Laws. Email ids: and

Authored by Aanchal M. Nichani

A writ petition was filed before the Hon’ble Delhi High Court by the Intellectual Property Attorneys Association (IPAA) against the Controller General of Patents, Designs and Trademark (CGPDTM) with respect to the public notice dated 04.05.2020 issued by the office of the CGPDTM in the backdrop of the nation-wide lockdown enforced by the Government of India owing to the COVID-19 pandemic. The said notice stated that ‘the due dates, with respect to timelines/periods prescribed under the IP Acts and Rules administered by the O/o CGPDTM towards completion of various acts/proceedings, filing of any reply/document, payment of fees, etc. in the matters of any IP applications filed with the offices under the administrative control of O/o CGPDTM, falling due during the lockdown period, shall be 18th May, 2020’.

The IPAA led by Senior Advocate C.M. Lall, had placed reliance on an order dated 23.03.2020 passed by the Hon’ble Supreme Court wherein the Hon’ble Court had taken suo-moto cognizance of the challenges and difficulties likely to result from the on-going COVID-19 crisis and had ordered that the period of limitation in all proceedings before courts/tribunals, irrespective of the limitation prescribed under the general law or special law whether condonable or not shall stand extended w.e.f. 15th March 2020 until further orders. The said order was passed in exercise of the powers granted under Article 142 read with Article 141 of the Constitution of India and declared that the said order shall be binding on all courts/tribunals and authorities.

The Senior Counsel on behalf of IPAA argued that the public notice dated 04.05.2020 issued by the Office of CGPDTM is contrary to the order passed by the Supreme Court as the said order is clear with respect to general and special law whether condonable or not and that the same is binding upon the Office of the CGPDTM w.e.f from 15th March 2020. Further, it was also argued that the public notice that fixes the due date towards completion of various acts/proceedings, filings, payment of fees etc. as 18th May 2020 creates an onerous burden on the litigants as well as advocates and it was also further contended that the Office of CGPDTM has not taken into account the difficulty that the litigants and advocates would be faced with in order to ensure all filings that were due between 15th March 2020 until 17th May 2020 to be done on 18th May 2020.

The Hon’ble Delhi High Court acknowledged, observed and held that the order passed by the Supreme Court is binding on all courts/tribunals under Article 144 of the Constitution of India and thus, no authority/court/tribunal can act contrary to the said order. Further, it was also held that the extension of limitation commences from 15th March 2020 and not 23rd March 2020. Further, Hon’ble Delhi High Court also agreed with the contention of IPAA that the due date of 18th May 2020 to complete all acts/filings that were initially due between 15th March 2020 and 17th May 2020 is an extremely short window and deadline.

In light of the above, the Hon’ble Court was pleased to suspend the operation of the public notice dated 04.05.2020 and also directed the Office of CGPDTM to act in accordance with the order dated 23.03.2020 of the Hon’ble Supreme Court and thus, disposed the subject writ petition.

The aforesaid order of the Hon’ble High Court of Delhi comes as a much-needed respite to all litigants and advocates in the IP fraternity who may be potentially affected by notice of the Office of CGPDTM wherein it would have been a herculean task to mobilise efforts, files, documentation and resources to be able to ensure all acts/filings are done by 18th May 2020.

Authored by Ammu Brigit

In a recent interesting judgement, the Hon’ble High Court of Madras had, in a suit for copyright infringement and permanent injunction filed by Indian Record Manufacturing Co. Ltd., (the “Plaintiff”), against a reputed reputed Indian music composer Mr. Illaiyaraja, permanently injuncted Mr. Illaiyaraja from infringing the Plaintiff’s copyrights in certain musical works and sound recordings that were composed by him for various producers and which were incorporated in cinematograph films.

While passing the aforesaid judgement the High Court confirmed the principles that a cinematographic film is a combination of many copyrightable works and that a producer of the film is the first owner of the copyright in all copyrightable works including the sound recordings and musical works forming part of the cinematograph film in the absence any contract to the contrary with the music director or composer.

The issue of ownership over copyright in such musical and sound recordings is clear in cases where the producer takes the assignment of the copyright from the creators/authors of such work viz., the music director or composer, for creating a cinematographic film. But what happens in case where there is no express written contract or agreement between the producer and the music director regarding the assignment of copyrights in musical works or sound recordings created for use in cinematograph films? Who is the first author and owner of such works in the absence of an express assignment agreement inter-se the producer and the music director? Are the rights of the music director co-extensive with that of the producer in such instances? These were some of the issues that the Hon’ble High Court of Madras was faced with while deciding the aforesaid matter and the judgement pronounced by Madras High Court helps us to understand the aspect of copyright ownership over musical works and sound recordings incorporated in a cinematographic film in the light of the provisions of the Copyright Act 1957 and the amendments thereon.


The Plaintiff claiming to be a reputed musical production and distribution company, acquired the rights over certain musical works and sound recordings contained in different cinematographic films (in respect of which the music was composed by Mr Illaiyaraja, the 2nd defendant), from producers of such cinematographic films through written agreements and thus claimed exclusive ownership over such works with a right to exploit it on a stand-alone basis and has been exploiting it in various forms right from its assignment.

Later, Ilaiyaraja, the 2nd defendant claiming to be the owner of the copyright over such musical works and sound recordings, in his capacity as the creator of the musical works, undertook to sell the copyright in the musical work used in these cinematographic films (which was already assigned by the producers of the films to the Plaintiff) to Agi Music Sdn Bhd., the 1st defendant. In the above background the Plaintiff filed a suit for copyright infringement and permanent injunction against the defendants.

Important claims of the Plaintiff:

The Plaintiff stated that the claim of the 2nd defendant is ex-facie incorrect for he is not the owner of the copyrights in respect of the films for which he has composed the music. He had composed the music only on being engaged by the producers and not independently. As such the producers of the respective films are the first owners of the copyrights of the musical works and sound recordings contained in the films. The 2nd defendant as composer cannot claim right over it.

Important claims of the 2nd defendant:

The 2nd defendant denying the Plaintiff’s claim that the producers of the films are the first owners of the musical works and sound recordings stated that in the absence of any agreement between the music composer/2nd defendant and the producers of the films, injunction cannot be granted in favour of the Plaintiff based on the agreement between the Plaintiff and the producers. He further contended that where even assuming that the producers have acquired copyright in the musical works from the 2nd defendant who is the author or composer, the copyrights held by the producer in such works cannot impeach or trench upon the copyright of the composer/author, which is an independent right. It was further argued that the film producer’s right is restricted to reproduce or assign the film for exhibition and that the copyright of the film producer is a composite right as a whole and cannot be disintegrated and assigned in pieces. Once, the musical work is disintegrated, then the ownership vest with the author of the musical work who in this case is the 2nd defendant.


To understand the legal position vis-à-vis the copyright ownership of musical work used in cinematographic film, we need to analyse important certain provisions in the Copyright Act 1957 and the amendments thereon(“Act’). The word cinematographic film is defined as a work of visual recording and includes a sound recording accompanying such visual recording. Further, according to Sections 2(d)(ii) and 2(d)(v) of the Act, the author of a musical work is the composer and the author of a cinematographic film or sound recording is the producer of such film and the sound recording, respectively. Further, as per proviso (b) to Section 17 of the Act, the first owner of a cinematographic film made is the person at whose instance such cinematographic film is made for a valuable consideration, unless there is a contract to the contrary.

For creating a cinematographic film, a producer engages, for a valuable consideration, a music composer to compose the music for the film. Thus, through the engagement, the composer composes the musical works for use in a cinematograph film at the instance of the producer and thus the producer becomes the owner of the musical work by virtue of the provisions of  Section 2 (d) (v) read with proviso (b) to Section 17 of the Act. A producer combines literary, dramatic, artistic work and sound recording together along with the performance of the performers to create a cinematographic film and the producer becomes the author and first owner of the cinematographic film, unless a contract to the contrary exists with such performers and individual artists.

Thus, going by the above interpretation and arrangement of the provisions of the Act, the songs or music in a film is the combination of musical work, lyrics and sound recordings. The producer can sell the entire audio rights to a music company and in turn the music company will have the right to exploit such audio works. This means that the musical work, lyrics and sound recordings incorporated in a cinematographic film can be exploited on a stand-alone basis by the first owner of the cinematographic film i.e. the producer. The separation of the musical work from a cinematographic film does not give rise to a separate copyright to the music composer and therefore a music composer cannot claim individual copyright on a musical work incorporated in a cinematographic film. Thus, the Hon’ble High Court of Madras held that in the absence of any contract to the contrary, the film producers of the cinematograph films are the first owners of the copyright over the musical works and sound recordings used in the cinematograph films and the music composer cannot claim any independent copyright over the same. It further held that the in view of the proviso(b) to Section 17 of the Act, the right of the film producers as owner will certainly override the right of the music composer as the author in respect of musical works and sound recordings used in such cinematograph films.

The Court while passing the order in the instant matter and arriving at its decision herein relied upon the order passed by the  Hon’ble Supreme Court in the matter of Indian Performing Society Ltd vs. Eastern Indian Motion Pictures Association and Others and also further relied upon another earlier decision of the Hon’ble Madras High Court in the matter of Agi Music Sdn. Bhd., represented by Agilan Lechaman Managing Director Vs. Ilaiyaraja and Other, whereunder it was rightly held that the right of the composer or the lyricist in the musical works and the lyrics used in a sound recording forming part of a cinematograph film, can be defeated by the producer of a cinematograph film in view of proviso (b) to section 17 of the Act.


By demonstrably drawing difference between an author of a work and owner of a work and reading together the definition of cinematographic film, Section 2(d) and 17(b) of the Act, Madras High Court brings a clarity that that each copyrightable work incorporated in a cinematographic film does not create independent ownership to each copyrightable work contained in a cinematographic film and hence the ownership of the musical work incorporated in a cinematographic film lies with the producer and not with the composer given there is no contrary agreement between the producer and the composer. The only unique and special right that lies with the composer is the moral rights over the musical work composed by him for a cinematographic film governed by Section 57 of the Act.

Authored by Vishaka. S


Be it an affordable daily-use product such as an energy drink endorsed by Indian Cricketer Virat Kohli or an expensive commodity such as gold or diamonds endorsed by top Indian actors like Amitabh Bachchan or Aishwarya Rai, people in India are largely influenced by celebrity endorsed products and its consumption in daily households are nothing to be surprised of. In a country like India with people worshipping celebrities such as actors, cricketers or even politicians as “larger than life” figures, in this article we shall briefly take a look at the position and framework of laws prevalent in India that deals with the protection of rights of celebrities and famous personalities, which is also otherwise called personality rights or celebrity rights.

Personality Rights- Statutory Recognition

However, there is no separate codified law in India dealing with personality or celebrity rights (“Personality Rights”) and the position and development of such rights and laws in India is still at a nascent stage largely governed by judicial pronouncements of courts. However, the most important statutory provision governing Personality Rights is contained and governed as part of the fundamental right of Right to Life guaranteed under Article 21 of the Constitution of India. Other statutory provisions broadly governing and protecting Personality Rights can be found under the Intellectual Property law such as the Copyright Act 1957, where moral rights are attributed only to authors and performers which comprises of actors, singers, musician, dancer, etc. As per the relevant provisions of the Copyright Act, 1957, the Authors or the Performers have the right to be given credit or claim authorship of their work and have a negative right restraining others from causing any kind of damage to their work which consequently disrupts their reputation. Under the context of the Intellectual Property Law, Personality Rights are construed as property of well-known public figures which cannot be misused or misappropriated by any-one. Also, Personality Rights can be protected to some extent by relying on the provisions of Section 14 of the Indian Trademarks Act, 1999, which prohibits use of personal names. That apart Personality Rights are also protected under the common law remedy of passing off and that of Law of Torts protecting against the tort of disparagement, libel or slander.

Judicial Recognition of Publicity Rights

The common law right of publicity recognises the commercial value of a photograph or representation of a prominent person and protects his proprietary interest in the profitability of his public reputation or persona. The courts in India, by applying common law right of publicity in various instances, have been able to adjudicate upon cases wherein the Personality Rights of public figures have been in question or have been incidental to the case. Since the terms such as “Celebrity”, “famous Personality” or “publicity rights” have not been defined under any statute, the question of who is a celebrity and whether the said person in question is entitled to get his/her publicity rights enforced is subjective that depends on case to case basis. Personality Rights, being a very wide concept have been interpreted by courts in different scenarios to enforce the rights of celebrities. In Shivaji Rao Gaikwad vs. Varsha Productions, the Madras High Court dealing with a case filed by the reputed Indian Actor Mr. Rajinikanth observed that although there is no definition of “Personality Right” under any Statute in India, courts in India have recognised the same in various judgements, which are further dealt as under.

In Titan Industries Ltd. vs. Ramkumar Jewellers, the Delhi High Court in 2012 defined a celebrity as “a famous or a well-known person and is merely a person who “many” people talk about or know about” and further went on to lay down that “The right to control commercial use of human identity is the right to publicity.”  In the Instant case, the photograph of Indian actors Mr. Amitabh Bachchan and his wife Ms. Jaya Bachchan which was exclusively captured with respect to endorsement of Plaintiff’s jewellery product, was used unauthorizedly by the Defendant for his jewellery product. The Court while granting a permanent injunction against the Defendant elucidated that identity of a famous personality or celebrity can be used in advertisement for commercial purpose, but subject to the respective personality’s consent and approval regarding the time, place and nature of usage.

It is interesting to note that the said personality or publicity rights are specific and attributable only to “individuals” and not to corporate bodies irrespective of them being construed as legal person in eyes of law. In the case of ICC Development (International) Ltd. vs. Arvee Enterprises and Ors, the plaintiff contended that commercial “identity” or “persona” of ICC Events vests entirely and exclusively in the plaintiff and that they own publicity rights in all ICC Cricket events which have commercial value. The defendants were wrongfully exploiting the “persona” and “identity” created by the plaintiff and thus making unlawful gains, while stressing that the right of publicity not only protects publicity values of human beings, but also the publicity values in non-living objects that are made popular through efforts. The Delhi High Court denying the contention observed that although all forms of appropriation of a property of legal entities are protected sufficiently under laws, including Copyright Law, affording personality rights to a corporate would defeat the basic concept of “persona”. Relying on various foreign decisions wherein most of the foreign courts have refused to grant publicity rights to non-living entities, the High Court laid down the following:

“The right of publicity has evolved from the right of privacy and can inhere only in an individual or in any indicia of an individual’s personality like his name, personality trait, signature, voice, etc. An individual may acquire the right of publicity by virtue of his association with an event, sport, movie, etc. However, that right does not inhere in the event in question, that made the individual famous, nor in the corporation that has brought about the organization of the event. Any effort to take away the right of publicity from the individuals, to the organiser {non-human entity} of the event would be vocative of Articles 19 and 21 of the Constitution of India. No persona can be monopolised. The right of Publicity vests in an individual and he alone is entitled to profit from it.”

In 2017, in the case of Gautam Gambhir vs D.A.P & Co. & Anr, the famous Indian cricketer had contended that his name which was protectable under the trademark law owing to his well-known status in the public, was used as a tag line to the chain of restaurants owned by the Defendants owing to which it was alleged that there was confusion in the minds of the public as to the Plaintiff’s association with the said chain of restaurants amounting to deception and personality rights of the Plaintiff being illegally violated. The Delhi High Court while declining the injunction sought by the cricketer, held that there was nothing on record to prove that the Defendant was trying to pass-off his restaurant as one owned by the Cricketer as there was no representation of the Cricketer to the public, be it his picture, photo or even poster, both in the defendant’s restaurant as well in its social media pages, so as to cause any confusion in the minds of the public. In-fact the Defendant has posted his own pictures to associate his “own” identity to his restaurant. Hence the High Court held that neither did the plaintiff cricketer’s name was commercialised, nor was there any loss of goodwill in his field and thus dismissed the suits and the applications. This case shows that although involving a famous personality and a widely known public figure, unless unjust enrichment on a celebrity’s Personality Rights are proven, the suit would fail to stand the test of “publicity rights”.

Personality Rights and Domain Name disputes:

Apart from the traditional cases involving the reputation of famous personalities directly in question, it is very interesting to note that the Delhi High Court in 2011 dealt with the confluence of domain name disputes and personality rights. In the Instant case of Arun Jaitley v. Network Solutions Private Limited and Ors., the famous erstwhile politician Mr. Arun Jaitley had filed a suit seeking permanent injunction against the defendants from misuse and immediate transfer of the domain name WWW.ARUNJAITLEY.COM, on the grounds that the name being personal name of the plaintiff is associated only with him and carries enormous goodwill and reputation and further that the fame and achievements of the Mr. Jaitley added value to his name which identifies the persona of the politician  and a leader world known, while the defendants were attempting to unlawfully monetise on the domain name containing the plaintiff’s name.  In addition to the protection under trademark law and regulations pertaining to domain name disputes, the High Court observed that “the name of Mr. Arun Jaitley, falls in the category wherein it besides being a personal name has attained distinctive indicia of its own. Therefore, the said name due its peculiar nature/ distinctive character coupled with the gained popularity in several fields whether being in politics, or in advocacy, or in part of emergency protest, or as leader or as debator has become well known personal name/ mark under the trade personal name/ mark under the trade mark law which enures him the benefit to refrain others from using this name unjustifiably in addition to his personal right to sue them for the misuse of his name.”[Sic.]

The High Court in the said case made a very crucial and notable observation that popularity or fame of individual will be no different on the internet than the reality. This opens up a wide possibility of enforcement of publicity rights of well-known people in the internet platforms which is the need of the hour considering the growth in commercial activity on the internet defying boundaries.

In 2015, the Delhi High Court in Tata Sons Limited & Anr vs Aniket Singh while dealing with a similar case of domain name dispute involving the famous person Mr. Cyrus Paillonji Mistry, chairman of Tata group, granting a decree in favour of the plaintiff, observed that India has finally begun to address the multi-dimensional concept of Personality Rights and held that commercialisation of personality rights by person not authorised to do so should amount to right to sue for such embezzelement.

False endorsement by Celebrities

While the celebrities are protected from commercial misuse of their name and personality, there have also been instances where the consumers are misled owing to false advertisements or endorsements by such personalities. While on one side Indian courts have considered recognition of Personality Rights, the Government has realised the imminent need to also protect the consumers in large from false and misleading advertisement of products endorsed by such personalities. As a result of same, to find a balance to the scale, the Amendment to the Consumer Protection Act of 2019 was passed to keep a check on the misleading advertisements and endorsements of consumer products by imposing penalty on the endorser as well. It will be interesting to see the fallout of this legislation in the light of the increasing endorsement deals involving famous personalities and celebrities.


The increase in the commercialism and consequent increase in number of high-value endorsement deals being signed by famous personalities signifies that tremendous value is attached to such endorsements. On the other hand, as rightly pointed by the Delhi High Court in the case of D.M. Entertainment Pvt. Ltd. vs. Baby Gift House and Ors. , in a free and democratic society, where every individual’s right to free speech is assured, the over emphasis on a famous person’s publicity rights can tend to chill the exercise of such invaluable democratic right. While courts need to strike a balance between protection of high valued rights of personalities and democratic right of individuals in society, it is also equally responsible to protect the interest of the consumers as well from any kind of misleading advertisements and endorsements. After all, consumer is the king!

Authored by Aanchal M. Nichani

With the advent of social media platforms, emerged a new vocation – social media influencer, who with their following and reach on social media attempt to influence and sway a viewer/consumer towards purchasing or refraining from purchasing a product available in the market. Most brands and companies make utmost commercial use of the fan following base and reach these social media influencers enjoy in order to promote their product.

The recent legal battle between Marico Limited (‘Brand Owner), the owner of the branded edible coconut oil ‘Parachute’ and Abhijeet Bhansali (‘Social Media Influencer’), a youtuber running a Youtube channel under the name ‘Bearded Chokra’ has thrown light on the questions of law with respect to the caution and responsibility to be exercised by social media influencers vis-à-vis right freedom of speech and expression. It has also clarified the position of law relating to disparagement vis-à-vis defamation in the context of various videos uploaded in social media by social media influencers to express their views on products or services offerings of third parties.


The Brand Owner was aggrieved by the Social Media Influencer’s claims and statements about its branded coconut oil, published on his channel in the popular social media platform Youtube (‘Impugned Video’), and approached the Bombay High Court, that the Impugned Video disparaging and denigrating its brand, and sought for an injunction against the Social Media Influencer, restraining him from

(i) publishing or broadcasting or communicating to the public the Impugned Video;

(ii) disparaging or denigrating the Brand Owner’s branded coconut oil or any other product of the Brand Owner or the Brand Owner’s business; and

(iii) Infringing the registered trademarks of the Brand Owner.

Plaintiff’s contentions:

It was the Brand Owner’s case that the Social Media Influencer had an intention to malign, disparage, slander the goods and spread malicious falsehood, and the Impugned Video was a targeted attack and that provided incorrect information and deceives the viewer into believing that the tests conducted by the Social Media Influencer substantiate the claim that the Brand Owner’s product is of inferior quality. It was further contended that creation and publication of videos on the platform was the occupation of the Social Media Influencer and thus, his review cannot be equated with any other review of any ordinary consumer. In addition, the Brand Owner also alleged that the Social Media Influencer had unauthorizedly used the Brand Owners registered trademark in course of his trade which is contrary to the honest practices in industrial or commercial matters.

Defence of the Social Media Influencer:

The Social Media Influencer denied intention to malign, and that the contents of the video are true, and constitute his bonafide opinion and that he is protected under the right to freedom of speech and expression. It was further contended that the three ingredients for making out a case of tort of disparagement of goods/slander of goods, viz: i) the statement must be false; ii) the statement must have been made with malice; and iii) the Plaintiff must have suffered special damage, have not been satisfied by the Brand Owner, and that he was neither a trader/manufacturer nor a rival of the Brand Owner’s goods and hence, the tort of disparagement of goods/slander of goods is not applicable to him.

Findings, reasoning and decision of the Court:

The Court recognised and acknowledged the extent, reach, power and ability of social media influencers to sway the public, and their opinion over a particular product. The Court said that a social media influencer cannot deliver statements with the same impunity available to an ordinary person and that such influencers bear a higher burden to ensure that there was a degree of truthfulness in their statements.

The Court while holding that the Impugned Video was false and the statements made therein were with malice, thereby satisfying the first two ingredients for the tort of disparagement/slander of goods, observed no material was produced by the Social Media Influencer that the statements made by him were true, and that he had neither conducted any tests to substantiate his claims, nor the articles relied upon by the Social Media Influencer indicate that the statements made by him in the Impugned Video were true. Further, the Court also took into account the several comments of the public who expressed their decision to stop purchasing the Brand Owner’s product after watching the Impugned Video and hence, the impact of the Impugned Video on the reputation of the  product and the damage caused to the Brand Owner cannot be underestimated and held that the third ingredient of special damages suffered by the Plaintiff was also satisfied.

With respect to the contention of right to freedom of speech, the Court held that the Social Media Influencer created all the videos with a commercial purpose of earning revenue and thus, the publication of the Impugned Video is a commercial activity and his “opinion” amounts to commercial speech. The Court further went on to hold that the fundamental right to freedom of speech and expression is not an unfettered right and that despite commercial speech being part of the fundamental right guaranteed under Article 19(1)(a) of the Constitution of India, such right cannot be abused by any individual to malign or disparage the product of another as is done in the instant case. The Court also observed that the Defendant under the garb of educating/bringing the true facts to public cannot provide misleading information to disparage the Plaintiff’s product. Also, the unauthorised use of the Plaintiff’s registered trademarks by the Defendant in a manner that is detrimental to its distinctive character or reputation cannot be in accordance with the honest practices in industrial and commercial matters.

The Court directed the Defendant to take down the video from Youtube or any other social media platform or medium.

However, before parting with the judgement, the Court cautioned that social media influencing is one of the most impactful and effective ways of marketing and advertising and thus, possess a responsibility to ensure what they are publishing is not harmful or offensive.

Appeal before the Division bench of Bombay High Court

The Appellant challenged the order passed by the single bench of the Bombay High Court which eventually lifted the injunction and stayed the operation of the order passed by the single bench and allowed the Impugned Video to be published subject to certain modifications.

The Division Bench further went on to hold that there is a clear difference between facts and opinions. The Bench held that when a person asserts a matter of fact, he cannot be restrained from expressing himself, because if he fails to make good the facts asserted, damages are awarded. However, incase of opinions and subjective issues, a different yardstick applies and if the statement is defamatory, an injunction must follow. The Court further went on to analyse what would amount to an expression opinion, simple or mixed and what would amount to a fact and also observed that freedom of speech gets primacy over reputation. The Court clarified that in the context of the video made by the Social Media Influencer on the product of the Brand Owner, the Social Media Influencer has expressed an opinion based on certain facts expressly disclosed in the video and hence the same is to be construed as the Social Media Influencer having exercised his freedom of speech and expression based on facts expressly disclosed that is not to be construed as disparagement and hence an action for the same does not lie therein against the Social Media Influencer. Accordingly, the division bench stayed the operation of the impugned judgement of the single bench and allowed the Social Media Influencer to continue making the video available for public viewership subject to certain disclaimers as was agreed to be replaced by the Social Media Influencer in the video.


The question with respect to freedom of speech and expression and social responsibility and obligation of social media influencers is a very subjective issue and needs to be viewed on a case-to-case basis and hence is more likely will remain to be an on-going legal battle between Social Media Influencers and Brand Owners!

Authored by Vishnu Ravi Shankar


A Founder’s Agreement (“Agreement”), while not mandatory, is an essential element of a startup that is founded by more than one person. The customary entity for a startup in India is a private limited company.

Co-founders come together for a variety of reasons, which include bringing together each person’s unique skillsets, connections and network. Co-founders could be friends, family or just professional acquaintances who, together, see a vision that they would like to achieve with each other’s help and contributions.

Irrespective of the level of prior intimacy among the co-founders, it is always advisable to lay down in clear terms the working relationship between the parties, which would in turn ensure smooth and efficient function of the business. The terms and the draft of an Agreement are usually agreed to prior to incorporation of the company and this agreement is signed either simultaneously with the incorporation process or prior to the incorporation process, and the company is incorporated after its execution.

Matters to be covered

It is important that the Founder’s Agreement covers the following aspects

1. Roles and responsibilities: As each founder brings their own skillset, experience and expertise to the table, it is important to set out the broad working relationship between the parties in terms of roles and responsibilities. Usually, designations are assigned for each co-founder and each co-founder is broadly responsible for their own division and the buck stops with them. Business divisions may include operations, technology, sales and marketing, finance, etc., and the founders may choose the title that will best describe their role.

2. Business strategy and long-term vision: The company’s goals would need to be clearly defined in a more specific manner than the business objects stated in the Memorandum of Association (“MOA”) of the company. This should ideally include both the short-term goals and long-term vision for the business. There may be a consensus on a broad business plan in the Agreement along with broadly defining certain milestones for the company, which may be in terms of revenue or targets and a more detailed version of the business plan (which includes these milestones) may be prepared subsequently and updated from time to time.

Where the founders join together with a goal and the strategy is yet to be evolved, then it would suffice if the goal were laid down.

3. Ownership structure: For a private limited company, ownership is defined by shares held in the company.

(i) Founder Shareholding: Depending on each founder’s role and contribution, shareholding percentage can be determined on initial subscription of shares via contribution to the initial paid-up capital of the company, and the same should be recorded in the agreement.

(ii) ESOP pool: The founders can also decide on the extent of shareholding that they desire to be set aside for an employee stock option pool (“ESOP”). ESOP is used to incentivise future hires of the company, who may even be credited as a co-founder.

The detailed terms of the ESOP, including the eligibility criteria, vesting schedule and number of stock options, is covered under a separate scheme approved by the board and the shareholders of the company, which can be structed after the company is incorporated at an appropriate time.

4. Decision making arrangement:

(i) Board meetings: A private limited company needs to have a minimum of 2 directors on the board and a maximum of 15 directors (this number can be increased by way of a special resolution). Depending on the number of directors on the Board, the agreement should spell out the quorum required for each meeting of the Board and if required, some major decisions would need the presence and approval of all directors on the Board. Co-founders may also consider the presence of an independent director on the Board in a non-executive capacity who may be an industry expert or mentor/advisor, whose decisions and input would come in handy from time to time, especially in a deadlock resolution situation.

(ii) Shareholder meetings: For shareholder meetings, each equity shareholder gets a vote and for these meetings as well, depending on the number of shareholders, a quorum should be spelt out in the agreement. It should be noted that, as per the Companies Act, 2013 (“Act”), certain specific decisions require approval of the shareholders by way of a special resolution including but not limited to amending the memorandum or articles of the company, increase in authorized share capital, reduction of share capital, buy-back of shares, certain borrowings, related party transactions, etc. A special resolution requires three times more votes cast in favour of that item of business in such shareholders meeting than votes against such item.

(iii) Other business decisions: For other business decisions that do not require board or shareholder approval, especially decisions related to day-to-day operations, the power to make such decisions can lie with the founders and senior management depending on their designation and role in the business and what business division they are responsible for. Some of these decisions can be taken by the founder heading the relevant business division, while for some other decisions that are general in nature and pertain to the business as a whole (such as those related to administration, budgets, office-related, etc.), a committee may be set up consisting of the founders and certain senior management personnel to decide on these general matters.

5. Salary and compensation: Until the company reaches a certain level of revenue or is able to attract external investment, founders can expect to receive a minimal level of compensation. However, it may be prudent to set out a compensation plan setting baseline compensation and accounting for future growth of the company. In addition, the Agreement can spell out the expenses of the founders that are covered by the company as a business expense, which may also include some additional perks to overcome the minimal compensation in the initial phase of the startup. The Agreement should also cover the signatories of the bank accounts of the company and how differing amounts of expenditure require differing levels of sign-offs from the founders of the company.

6. Procedure for transfer of ownership:

(i) Lock-in period: Founders should agree on the mechanism for restriction on transfer of shares held by each of them. To begin with, there may be a lock-in period decided during which the founders are not permitted to transfer their shares in the company. Possible exception to transfer during the lock-in period could be transfer of a limited percentage of shareholding to relatives (as defined under the Act) and transfer with the prior written consent of all other founders.

(ii) Right of First Refusal: Upon expiry of the lock-in period, in the event any of the founders wish to transfer a part or their entire shareholding in the company due to a voluntary exit (either full or partial), the other founders should have a right of first refusal whereby such transferred shares should be offered to the other founders first and only upon their refusal to purchase all or part of offered shares, can the transferring founder sell such shares to a third party.

7. Anti-dilution protection: In some cases, certain founders, especially a founder holding a significantly lower stake than others, may need to be protected from dilution of their shareholding percentage in the company. Anti-dilution protection arises in the event of future investment in the company by way of infusion of share capital that would result in a dilution of the stake of all founders. Founders holding a minority stake which is intended to be protected from dilution should ensure that a mechanism is in place in the Agreement that involves either further issuance of shares to such minority founders at the lowest possible price or transfer of shares by the other founders to such minority founders in order to help maintain their shareholding percentage in the company.

8. Protection of intellectual property of the business: For all the intellectual property created by the co-founders that are capable of being protected and registered under applicable law, it is imperative that the legal ownership of such intellectual property be vested in the name of the company and not in the name of any of the individual founders. In addition to the Agreement, the founders may also enter into employment agreements/ service contracts with the company and this IP protection should be detailed thereunder as well. Further, this protection should extend to all other employees, consultants and contractors of the company and this concept of ‘work made for hire’ should be enunciated clearly in their respective agreements with the company.

9. Non-compete: An important clause in the Agreement is the non-compete that (i) ensures that founders dedicate their entire working time towards their role in the company and not engage in other business activities, and (ii) precludes founders from engaging in a competing business (which should be a defined term in the Agreement) in any capacity whatsoever post their exit from the company for a certain limited period of time. This would also be covered in detail in the employment agreements/service contracts that founders may enter into with the company.

10. Indemnity for Directors: To the extent permitted by the Act and applicable law, indemnity may be provided to directors in the event of any loss that they may suffer as a result of their discharge of duties towards the business. Under the Act, there is no restriction on a company indemnifying its directors in this regard.

11. Removal of a founder: In the unfortunate events of death, disability, under performance, breach of law, sexual harassment, misappropriation of funds, etc., involving any of the founders, a mechanism should be detailed on the procedure for the exit/ removal of the founder. In the event of death or disability, there may a severance package provided to the founder or his/her legal heirs. More importantly, in these events and in all other circumstances involving the founder committing an act of moral turpitude, there should be a mechanism in place whereby the shareholding held by such founder is bought out either by the company or the other founders at the lowest possible discounted value.

12. Dispute resolution mechanism: The Agreement should set out a methodology of settling disputes among founders in relation to the terms of the Agreement and the business. In the event the founders are unable to settle disputes among themselves in an amicable manner, a mechanism may be introduced in the Agreement for appointment of an independent third party mediator to help settle the dispute. If this fails, arbitration is a preferred method of dispute resolution between the founders because of its benefits as compared to litigation.

All the terms of the Agreement must be incorporated into the Articles of Association (“AOA”) of the company either by way of amendment (if the company is already incorporated) or at the time of drafting the AOA of the company prior to incorporation. In addition to the terms of the Agreement, it is also recommended that the AOA grant the company the power and authority to issue shares on a preferential basis and to issue different types of instruments including the various types of preference shares, debentures, etc., in order to accommodate future investment in the company. The broad business objects of the company are set out in its MOA.


Co-founding a business can be compared to a marriage. Since founding a business is a serious, long-term commitment, it is important to have the roles and responsibilities and working arrangement clearly defined. When founders get together, they usually do not envision or discuss separation, but it happens in a lot of cases and it is better to be prepared for that eventuality. To ensure continuity of the business and at the same time, strengthen each founder’s commitment to the business, a Founder’s Agreement is a fundamental step in every entrepreneur’s journey.

Authored by CS Priyadharshini

The entire world is crippled by Covid-19 and many are grasping at straws to shorten the diagnostic time by way of rapid test diagnostics kits, ventilators and other equipment to handle the scarcity at hospitals and of course a vaccine. To confront these challenging times, many inventors are coming up with novel ideas to address the shortage of medical supplies and also preventive measures.

In this article we address the precautions that an inventor needs to take if he intends to protect the intellectual property associated with his Covid-19 device or vaccine.

Reasons why an invention has to be protected

Any invention adds value to the society by way of introducing advanced domain-specific technology. Once the inventor secures his rights over his invention, he can license it to others so that a larger section of the society benefits from his invention, and he can also realise the monetary value of his contribution to the society at large. This would enable the inventor to make sure that his Covid-19 related invention is used in the way he had thought about it and any suggestion for modification that comes from a third party is also addressed and validated by him.

Precautions to be taken

It is crucial for the inventors to be aware of the strategy to protect their invention before it hits the road. Here are some of the key aspects that are to be studiously followed when an invention is in place but not yet protected.

Do’s:   Once you have an invention that is novel, which is one of the factors that determine the patentability and forms the crux of a patent, it is important that an application for patent is filed which could be either a provisional specification or a complete specification of the invention:

1. Based on the stage the invention is in, the inventor may choose to file any of the following two applications:

a) Provisional Specification: This is filed to secure a priority date for the invention when the invention is still an idea and is in its formative stages. This application should be followed by a complete specification within 12 months of filing of the provisional specification.

b) Complete specification: This is filed when the invention is complete and ready to be used in the industry with its probable variations.

The Indian Patent Office has enabled electronic filing, enabling Patent Attorneys to file the applications online to protect your inventions.

2. After the complete specification is filed with the respective patent office, it is then followed by filing of the application in other countries, if the inventor desires to protect the invention in other countries too.

3. Where the inventor proposes to engage a vendor to provide materials to him for putting together the prototype, it is advised that the inventor enter into a non-disclosure agreement with the proposed vendor and thereafter disclose any details that is to be shared with that vendor.


Do not take any of the following action, unless you have at-least filed a provisional specification:

a) Do not rush to publish the details of the invention in any platform whether it is a newspaper, scientific journal, social media or any online portal. This would disqualify the grant of patent as it becomes prior-art.

b) Do not present the invention in any webinar or conference.

c) Do not email details of the invention to others or disclose by other means without a confidentiality agreement in place.


The above approach will protect the intellectual property of the inventor and when the patent is granted, the inventor will be the exclusive owner of the invention for 20 years.

Since time is of essence in the current scenario, inventions that could help tackle the current situation have to be made use of immediately without delay by ensuring that the invention is first protected, and the patent office makes it possible with having provided online filing of applications.

Amidst the COVID-19, Ministry of Corporate Affairs (MCA) vide its General Circulars No.14/2020 dated 08th April 2020 and No.17/2020 dated 13th April 2020 has, with respect to matters requiring approval of shareholders, requested the Companies, to obtain shareholders’ approval through postal ballot/e-voting till 30th June 2020, in order to avoid holding a general meeting which requires physical presence of the shareholders at a common venue. The Company is required to send notice by e-mail to all its shareholders who have registered their email with the Company or depository/depository participant.

MCA has also clarified that, till 30th June 2020, the Companies which are proposing to obtain the approval of the shareholders through Postal Ballot, the voting can be done only by way of remote e-voting.

If holding of an EGM is considered unavoidable, then the said EGM has to be conducted through video conferencing (VC) or other audio-visual means (OAVM) (“Remote EGM”), to obtain approval from the shareholders on various urgent matters.

This video conferencing (VC) Facility is available only to the EGM’s conducted between 8th April 2020 and 30th June 2020.

PROCESS FOR CONDUCTING REMOTE EGM: In addition to compliances under the provisions of the Act, the following procedures should also be followed by the companies when conducting the EGM through this VC Facility.


Companies which are required to provide* or has opted for remote e-voting

Companies which are not required to provide for remote e-voting

Facility to be provided to the shareholders

(EGM to be conducted only in unavoidable circumstances)

VC or OAVM (“VC Facility”)

VC or OAVM (“VC Facility”)

Mode of sending the Notice for Remote EGM to the shareholders

Only by email

Only by email

Pre requisites

  • Ensure the convenience of participants in different time zones to attend the EGM

  • Ensure two-way communication in the VC Facility

  • Participants should be able to pose questions during the meeting and can also send questions via mail before the meeting to the e-mail address of the company.

  • VC Facility must allow at least 1000 members to participate on first come first serve (FCFS) basis

  • The Condition of FCFS not applicable to

    • Shareholders holding 2% or more

    • Promoters,

    • institutional investors,

    • directors,

    • key managerial personnel,

    • chairpersons of audit committee, nomination and remuneration committee, stakeholder relationship committee; and

    • auditors

  • Remote e-voting should be provided in accordance with the provision of the Act

  • Ensure the convenience of participants in different time zones to attend the EGM

  • Ensure two-way communication in the VC Facility

  • Participants should be able to pose questions during the meeting and can also send questions via mail before the meeting to the e-mail address of the company.

  • VC Facility must allow at least 500 members to participate on FCFS or the number of members, whichever is lower.

  • The Condition of FCFS not applicable to

    • Shareholders holding 2% or more

    • Promoters,

    • institutional investors,

    • directors,

    • key managerial personnel,

    • chairpersons of audit committee, nomination and remuneration committee, stakeholder relationship committee; and

    • auditors

  • Company shall take adequate measures to maintain the confidentiality of the password and privacy associated with the designated e-mail address provided in the notice of EGM.

  • Contact all the members whose e-mail address is not registered with the company to obtain their registration before issuing the notice.

  • Where the contact details could not be obtained as above, then the company shall immediately issue a public notice (at least 3 days prior to issue of EGM notice) by way of advertisement in at least one English and at lease on vernacular newspaper where the registered office of the Company is situated (Preferably both newspapers have electronic editions)

Disclosures in notice of Remote EGM

In addition to disclosures required under companies act,
Additional disclosures in the Notice to be provided:

  • Clear instructions on how to access to the VC Facility and participate in the meeting.

  • Provide assistance for use of technology by helpline numbers through registrar / share transfer agent / technology provider or otherwise

Notice by Listed Company

  • Necessary intimation to stock exchanges should be made.

In addition to disclosures required under companies act,
Additional disclosures in the EGM Notice to be provided:

  • Clear instructions on how to access to the VC Facility and participate in the meeting

  • Provide assistance for use of technology by helpline numbers through registrar / share transfer agent (if any) / technology provider or otherwise

  • To provide designated e-mail address to which votes are to be sent when a poll is required to be taken at the meeting.
    (Due safeguard shall be taken by the company with regards to the authenticity of the e-mail address and other details of members).

Disclosures in the Public Notice

Additional Disclosure in public notice

The advertisement by way of public notice published in the English and vernacular newspaper shall in addition to the items mentioned in the Act shall also state that;

  • EGM is convened through VC Facility in compliance with the General Circular 14/2020 dated 8th April 2020 and the Circular 17/2020 dated 13th April 2020.

  • Date and Time of EGM to be held through VC Facility

  • Confirmation on availability of the EGM notice on the website of the Company and the stock exchange

  • Manner in which the members holding shares in physical form or have not registered their email address with the company may vote in remote e-voting or e-voting at the meeting.

  • Manner of registering the email address with the company for the members who have not registered their email address

Disclosures in public notice (if applicable)

  • A statement that the Company intends to conduct EGM in accordance with Act and these Circulars

  • A Statement that the Company will send notices to all its members by e-mail at least 3 days after this public notice;

  • E-mail address and telephone number to which members may contact to get their e-mail address registered

Display of EGM Notice – Website

Copy of notice of the meeting should be displayed in the website of the company, if any.

Copy of notice of the meeting should be displayed in the website of the company, if any.

At the EGM – time for keeping the VC Facility open for members to join

  • VC Facility for joining the meeting shall open at least 15 minutes before the time scheduled for the meeting and will remain open till 15 minutes from the start of the meeting.

  • The Chairman shall satisfy himself and record before considering the business that all efforts feasible have been taken by the company to enable the members to participate and vote in the meeting.

  • VC Facility for joining the meeting shall open at least 15 minutes before the time scheduled for the meeting and will remain open till 15 minutes from the start of the meeting.

  • The Chairman shall satisfy himself and record before considering the business that all efforts feasible have been taken by the company to enable the members to participate and vote in the meeting.


Attendance of members through the VC Facility shall be counted for the purpose of quorum.

Attendance of members through the VC Facility shall be counted for the purpose of quorum.

Manner of Voting

Prior to the meeting: by remote e-voting as per the instructions provided in the meeting notice.

During the meeting (the members who have not voted through remote e-voting can vote during the meeting):

The Chairman shall ensure that the e- voting facility is available for the purpose of voting at the EGM.:

Prior to the meeting: Not applicable

During the meeting: Voting will be by show of hands, unless a poll is demanded.

When poll is demanded, members can cast their vote on resolutions by sending emails through the email address registered with the company.

The mails shall be sent only to the designated email provided in the notice of the EGM.

Adjournment of the meeting, if required.


If the counting of votes requires time, the meeting may be adjourned to declare the results.


  • Specific person mentioned in the articles to be appointed as chairman of the meeting (or)

  • if there is no specific person named in the Articles then

  • If members present through VC Facility is less than 50 – members present shall elect one among themselves to chair the meeting, or demand for poll for election of chairman

  • If members present is more than 50 – chairman be appointed by poll conducted through e-voting during the meeting.

  • Specific person mentioned in the articles to be appointed as chairman of the meeting

  • if there is no specific person named in the Articles then

  • If members present through VC Facility is less than 50 – members present shall elect one among themselves to chair the meeting, or demand for poll for election of chairman

  • If members present is more than 50 – chairman be appointed by poll.


Since the meeting is conducted through the VC Facility, the physical presence of the member is dispensed with. Hence there is no requirement of proxies.

Since the meeting is conducted through the VC Facility, the physical presence of the member is dispensed with Hence there is no requirement of proxies.

Representative of the member

Representatives of the President of India or Governor of the State or a body corporate may be appointed in accordance with the provisions of the Act to attend and vote at the meeting held through VC Facility.

Representatives of the President of India or Governor of the State or a body corporate may be appointed in accordance with the provisions of the Act to attend and vote at the meeting held through VC Facility.

Mandatory presence of Independent Director

At least one Independent Director (if any), should attend the meeting

At least one Independent Director (if any), should attend the meeting

Mandatory presence of auditor

Auditor or their authorised representative, who is qualified to be the auditor should attend the meeting.

Auditor or their authorised representative, who is qualified to be the auditor should attend the meeting.

Institutional Investors

Institutional investors who are members should be encouraged to attend and vote at the meeting.

Institutional investors who are members should be encouraged to attend and vote at the meeting.

Filing of Resolutions with the Registrar of Companies (“ROC”)

  • All the resolutions passed at the meeting shall be filed with the ROC within 60 days of the meeting

  • The filing shall confirm the compliance of this circular along with the provisions of the Act.

  • All the resolutions passed at the meeting shall be filed with the ROC within 60 days of the meeting

  • The filing shall confirm the compliance of this circular along with the provisions of the Act.

Maintenance of Recorded transcript of the EGM

  • The Recorded transcript of the meeting shall be maintained in the safe custody of the Company

  • In case of Public Company, the recorded transcript should be posted on the website of the Company, if any as soon as possible

  • The Recorded transcript of the meeting shall be maintained in the safe custody of the Company

  • In case of Public Company, the Recorded transcript should be posted on the website of the Company, if any as soon as possible

* The companies which has listed its equity shares in the recognised stock exchange and are having more than or equal to 1000 shareholders are required to provide e-voting facility in their EGM;

**In case of notice calling an EGM was issued prior to the circular and if the members provide their consent to hold the EGM at a shorter notice, then the Company may issue a fresh notice at a shorter duration containing the disclosures required to be made under this circular.

Authored by Aanchal M. Nichani

The National Company Law Appellate Tribunal (‘NCLAT’) recently in the matter of Flat Buyers Association Winter Hills – 77, Gurgaon v. Umang Realtech Pvt. Ltd. (through IRP & Ors.) took a practical approach bordered on survival of the business and satisfying the interests of the stakeholders involved and introduced the concept of reverse corporate insolvency resolution process (‘CIRP’).

Background of the case:

Mrs. Rachna Singh and Mr. Ajay Singh (Allottees) had moved an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (‘IBC’) for initiation of CIRP of M/s. Umang Realtech Pvt. Ltd., a real estate company involved in constructing flats/ apartments and the said application was admitted by National Company Law Tribunal (‘NCLT’), Principal Bench, New Delhi.

Once an application for CIRP of the Corporate Debtor is admitted and an IRP is appointed, it is the duty of the IRP/RP to keep the Corporate Debtor as a going concern. However, in case of a real estate infrastructure company, the only business is to build and complete flats/projects and thus, maintaining the Corporate Debtor as a going concern is a hurdle that is almost impossible to cross. Given the grave situation, most real estate companies are pushed into liquidation and the same does not serve any benefit to the company or its creditors.

Difficulties faced in following the regular process of CIRP in real estate infrastructure companies:

1. The allottees (homebuyers) come within the meaning of ‘financial creditors’ and possess voting rights for approval of any resolution plan. However, the issue with respect to the same is the lack of commercial knowledge or expertise to assess the ‘viability’ or ‘feasibility’ of the Corporate Debtor, unlike that of the financial institutions/ banks/ NBFCs.

2. Another difficulty faced is that of distribution of assets of a real estate infrastructure company. The assets of such company are none other than the apartments/flats that are being constructed by them for the allottees. Normally the banks/financial institutions/NBFCs also would not prefer to take the flats in lieu of the money lent by them and on the other hand, the unsecured creditors (homebuyers) have a right over the flats being constructed by the company.

3. As a normal practice, while approving a resolution plan, the Committee of Creditors tend to take a ‘haircut’, but the same is not possible in case of flats/ apartments.

Concept of Reverse Corporate Insolvency Process:

In the instant case, one of the promoters – ‘Uppal Housing Pvt. Ltd.’ agreed to remain outside the CIRP but agreed to act as a lender to maintain the Corporate Debtor as a going concern and complete the ongoing project in order to ensure that the CIRP process reaches success and the allottees take possession of the flats/apartments without any third party intervention.

As part of its order, the Hon’ble NCLAT directed and set out a time bound schedule, mode and manner in which the infusion of funds will be made by Uppal Housing Pvt. Ltd. and the balance payments by the allottees and also a schedule within which the project shall be completed and possession be handed over to the allottees.

The Hon’ble NCLAT had referred to the judgement passed by the Apex Court in the landmark Swiss Ribbons case, wherein it held that the IBC is an economic legislation which deals with economic matters and in the larger sense deals with the economy of the country as a whole and that any denial of the right to experiment is fraught with serious consequences to the nation. In light of the aforesaid observation of the Hon’ble Supreme Court, the NCLAT has experimented as to whether during CIRP the resolution can reach finality without approval of any third-party resolution plan.

The Hon’ble NCLAT has approached the matter differently and has experimented and worked in the reverse and allowed the promoter to stay out of CIRP and infuse funds for completion of the project and issued directions, a time bound schedule, mode and manner of the same to ensure that there is a win-win for both the corporate debtor and the allottees, by reaching a resolution without approval of any third-party resolution plan.

Observations of the Hon’ble NCLAT:

1. Corporate Insolvency Resolution Process if initiated against a real estate infrastructure company by the allottees or financial institutions/banks/NBFCs or operational creditors of one project, the said CIRP shall be restricted to that particular project and cannot affect any other project(s) of the same real estate infrastructure company in other places where separate plan(s) have been approved by different authorities. The assets of that particular project only can be maximised for balancing the interest of the creditors of that project and any other allottees or other financial creditors or operational creditors of other projects cannot file any claim before the IRP/RP.

2. A secured creditor such as ‘financial institutions/banks’ cannot be provided with flats/apartments being the assets of the Corporate Debtor by preference over the allottees (unsecured financial creditors) for whom the project has been approved. However, while satisfying the allottees, they may agree to opt for another flat/apartment, or another tower and their agreements can be modified to this extent by the IRP/RP with the counter signature of the promoter and allottee.

3. The prayer of allottees asking for refund cannot be allowed by the NCLT or NCLAT. However, after offering allotment, it is open to the allottee to request the IRP/RP/Promoter, whoever is in-charge to find a third party to purchase the allotted flat/apartment and thus, receive back the money invested by the said allottee. It is also possible for the allottee to arrive at an agreement with the promoter (not corporate debtor) for refund of the amount upon completion of the flat/project or during completion of the project.


The order passed by the Hon’ble NCLAT introducing the concept of reverse CIRP in case of real estate infrastructure companies has provided much needed respite to such real estate companies and also simultaneously provides for a time bound plan that works towards completion of the project and provides possession to the allottees.

The Reserve Bank of India (RBI), vide A.P. (DIR Series) Circular No. 27 dated 1st April 2020, has increased the period of realisation and repatriation of the export proceeds to India in respect of the export of goods or software or services, from 9 (nine) months to 15 (fifteen) months from the date of such corresponding exports.

The RBI has made the above relaxation in pursuance of the representations received from various Exporters Trade bodies owing to the current outbreak of pandemic COVID-19 and it is to be noted that it is applicable only in respect of those exports that are made on or before 31, July 2020.

It is to be noted that the above mentioned relaxation shall not be applicable for those export of goods/services to the warehouses established outside India by the respective exporters and the timelines for realisation and repatriation of the export proceeds in respect of such exports shall remain unchanged i.e. fifteen(15) months from the date of shipment of such exports.

Further, the said extension of six (6) months will enable the exporters to realise their receipts, especially from COVID-19 affected countries and also provide sufficient scope for the exporters to negotiate their export contracts with the corresponding buyers abroad in order to realise the export proceeds within the extended timelines.

As the circular does not explicitly mention the date from which the relaxation would become applicable, it can be construed to be applicable from 1st April 2020, i.e. exports made on or after 1st April 2020, being the date of the circular. Nevertheless, it is advisable that the exporters approach their respective AD Category-1 banks to seek the clarity as to whether this extension of timelines will be applicable even for those export of goods/software/services occurred prior to the date of this circular i.e. 1st April 2020.

Authored by: Adit N Bhuva & Sri Vidhya Kumar.
NAME OF THE SCHEME:  Companies Fresh Start Scheme 2020.

PURPOSE OF THE SCHEME:  To provide Companies with an opportunity to make good any filing related defaults, irrespective of duration of default and make a fresh start as a fully compliant company.



Waiver Additional filing fees waived for the period of delay.


Immunity Immunity from the launch of prosecution or proceedings pertaining to the delay associated with filings of belated documents.


Withdrawal the Registrar of Companies shall withdraw the prosecutions pending (in respect of only such defaults for which immunity is granted); and the proceedings of adjudication of penalties (in respect of only such defaults for which immunity is granted) under Section 454 of the Companies Act, 2013.


DURATION OF THE SCHEME:  1st April 2020 to 30th September 2020


SCHEME APPLICABLE TO:   Any Company which has made a default in filing any documents, statements, returns, etc including annual statutory documents, viz, DIR-3 KYC/DIR-3 KYC-WEB/e-form Active, on the MCA-21 registry.



    • Companies against which actions for final notice for striking off the name u/s 248 of the Act has already been initiated by the Designated authority.
    • Companies which have already filed for striking off the name of the company from the Register of Companies
    • Companies which are amalgamated.
    • Companies which have filed applications for obtaining Dormant Status under section 455 of the Act before this Scheme
    • Vanishing companies
    • Where any increase in authorised capital is involved (Form SH-7)
    • All charge related documents (CHC-1, CHG-4, CHG-8 and CHG-9)


    • File returns with Registrar of Companies before 30th September 2020.
    • Make application for immunity in Form CFSS-2020 after the closure of this scheme, i.e., 30th September 2020 and after the belated returns filed under this scheme are taken on record / approved by the RoC.
    • Application for immunity has to be made before six (6) months from the date of closure of the scheme.


If Appeal filed If Appeal not filed
Withdraw the appeal – The applicant shall before making an application for issue of grant of immunity certificate with the RoC, withdraw the appeal and furnish proof of such withdrawal along with the application for grant of immunity. Extension of time to file such appeal


In case the last date for filing the appeal against the order of the adjudicating authority (with respect to delayed filing) under section 454(6) falls between 1st March 2020 to 31st May 2020, a period of 120 additional days is allowed with effect from such last date to all companies and their officers for filing the appeal before the concerned Regional Directors.

NA During the additional period, prosecution for non-compliance of the order of the adjudicating authority shall not be initiated against the companies or its officers.

Authored by Aanchal M. Nichani

On 24th March 2020, the Central Government by notification, revised the threshold limit of the amount of default for the applicability of the provisions of the Insolvency and Bankruptcy Code, 2016, from Rs. 1 Lakh to Rs. 1 crore.

The said revision in the threshold has come in the wake of the on-going crisis and battle with the Covid-19 outbreak. The intention of the said notification is to ease out the pressure on small sized companies and MSME and not drive them into insolvency and bankruptcy.  In this article we examine the impact of the revision in threshold of default.

Brief analysis of the notification:

The notification has been passed by the central government in exercise of the powers conferred by proviso to Section 4 of the IBC whereby the minimum amount of default has been increased from Rs. 1 lakh to Rs. 1 crore.

It is a settled law that any amendment to a legislation shall be prospective and not retrospective unless specified. Thus, the said revision in the threshold of the amount of default under IBC that has been given effect to by a notification dated 24.03.2020 shall only be prospective and not retrospective. The said notification shall not affect any pending applications filed before the NCLT. The notification shall impact only those applications that have not been filed with the NCLT as on 24.03.2020.

However, given the threat of Covid-19 and the resultant lockdown, circulars have been passed with respect to closing of filing counters and subsequent closing of NCLT. However, what happens in a scenario wherein the Operational creditor had issued the demand notice and was ready to file the application under Section 9 of the IBC but was unable to do so owing to the closure of the filing sections and NCLT, is yet to unfold.

Impact of the notification on revision of threshold under IBC on operational creditors:

The apparent impact on operational creditors is that most operational creditors may not have an outstanding operational debt of Rs. 1 crore or more and thus, the main criteria for applicability of IBC provision is not met. Further, it is unlikely that there would be any employee who is yet to receive an outstanding from his employer that equals to Rs. 1 crore or more and thus, such employee (operational creditor) also does not find recourse under the provisions of IBC.

As per Section 7 of the Code, a financial creditor may file an application by itself or jointly with other financial creditors against a corporate debtor which means that the amount of default shall include not only that of the applicant but also any other financial creditor. Thus, a financial creditor may satisfy the minimal requirement of threshold of amount of default either individually or along with defaulted debts of other financial creditors.

However, the scenario is very different with respect to filing of an application by an operational creditor. Under the Code, an operational creditor is required to meet the threshold of amount of default individually as there is no provision for operational creditors to file a joint application of combined debts against the corporate debtor. Given the nature of debts due to operational creditors, it is unlikely that individual operational debts would equal or exceed Rs. 1 crore and thus, the said notification in effect wipes out majority of this class of creditors from seeking resolution under the provisions of the IBC.

Operational creditors are already on a weak footing in case their application is admitted by the National Company Law Tribunal owing to their position/rank in the waterfall mechanism and thus, their main attempt at filing an application is to arrive at a possible settlement with the corporate debtor and recover part of their dues, if not the entire amount.

Given the revised threshold, operational creditors may have to consider options that were available pre-IBC period:

a. Refer the matter to arbitration if the agreement permits the same; or

b. pursue remedy through civil courts, which are already having a backlog in disposing off cases

c. Refer the matter to be dealt with under the dispute resolution mechanism provided under Section 18 of the MSMED Act, provided the body/entity has obtained a registration under the said Act.


Nevertheless, the effort of the government to assist and support small-sized companies and MSME in this troubled hour, is commendable as the said revision of threshold on the amount of default shall not only ease out the pressure on small sized companies and MSME who are already in economic distress but also reduce the applications that are filed by operational creditors as a mere pressure tactic and in hope of a possible settlement with the corporate debtor in order to recover their dues, which goes against the basic tenet and objective of the Code. Needless to say that, as a result of the aforesaid filing of frivolous suits, the National Company Law Tribunals are clogged and this notification shall in all probability de-clog the tribunals of the overwhelming number of applications being filed under the provisions of the Code.

In many of our foreign trips, we often buy some newly launched electronic or electrical products which are either not yet available/launched in our country or are offered at higher prices. While such procurements are intended for personal use or consumption, the concept of “Parallel Imports” in the context of trademark laws means the procurement of goods from the trademark owners or their authorized personnel through legitimate trade channels in a different market (mostly in a different country) and thereafter importation of such goods without the knowledge of the trademark owners of such products for sale to the general public in a different market.

It is also called as ‘Grey Market’ sales owing to the reason that such imported goods are offered for sale in the country of its import through trade channels not specifically permitted by the trademarks rights holder or the trademark owner in such markets. While such products are not counterfeit, pirated or duplicate products, but they are offered for sale in a market place through trade channels that are not authorized by the trademark rights holder or owner. Accordingly, the moot question that arises in such matters is whether such parallel imports tantamount to infringement of trademarks of the trademark owner in the country of import.

In order to understand the legal aspects surrounding the permissibility or legality of parallel imports under the trademark laws in India, it is important to also understand the principle or doctrine of territorial exhaustion of rights from the perspective of sale of products by a trademark owner or rights holder in a particular territory.

The principle of territorial exhaustion of rights vis-à-vis the trademark owner in relation to sale of products under its trademark means that, once the goods are in the first instance legitimately purchased by another person in a particular territory or market from a trademark rights owner or his authorized person, the rights of the trademarks owner to prevent further sale of such goods is exhausted after such first sale. This is so because the title in the goods has passed on to the purchaser and that the title of the trademark owner in such goods has been exhausted after the sale. The doctrine of territorial exhaustion as explained above can be categorized as: National Exhaustion, International Exhaustion or Regional Exhaustion [as in the case of a specific region such as European Economic Areas].

Doctrine of International Exhaustion means that once the goods have been legally sold by the trademark owner or his authorized person in any international market, such sale leads to an exhaustion of the rights of the trademark owner to prevent further sale of such goods anywhere internationally. Doctrine of National Exhaustion means that once the goods have been legally sold by the trademark owner or his authorized person in a domestic market, such sale leads to an exhaustion of the rights of the trademark owner to prevent further sale of such goods anywhere in the domestic market, but however, he still has a right to prevent any parallel import of such similar goods bearing his trademark in the domestic market.

Territorial exhaustion of rights of a trademark owner can be national, internal or regional exhaustion.

Legal position under the Indian Trademarks Act, 1999 with regard to Parallel Imports and Doctrine of territorial exhaustion of rights

Time and again in cases involving parallel imports in India, the Courts have always clarified the question of whether Indian trademark law adopts the doctrine of international exhaustion or national exhaustion of rights in the light of the provisions of Section 29 (infringement of trademarks) and Section 30 (limits on effect of registered trademark) of the Trademarks Act, 1999 (the ‘Act’). Following are the relevant clauses in these sections to understand the judicial and statutory position pertaining to doctrine of territorial exhaustion of rights in India:

Section 29 (1) of the Act – “A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which is identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered and in such manner as to render the use of the mark likely to be taken as being used as a trade mark.”

Section 29 (6) of the Act – “For the purpose of this section, a person uses a registered mark, if, in particular, he —

(a) affixes it to goods or the packaging thereof;

(b) offers or exposes goods for sale, puts them on the market, or stocks them for those purposes under the registered trade mark, or offers or supplies services under the registered trade mark;

(c) imports or exports goods under the mark; or

(d) uses the registered trade mark on business papers or in advertising.

Thus, it is clear from the above that any unauthorized import or export of goods would be considered as infringement of the owner’s trademark.

Section 30 of the Act contains, so to say, the exceptions to infringement or defences available to a person against whom an infringement action is alleged.

Section 30 (3) of the Act – “Where the goods bearing a registered trade mark are lawfully acquired by a person, the sale of the goods in the market or otherwise dealing in those goods by that person or by a person claiming under or through him is not infringement of a trade by reason only of

(a) the registered trade mark having been assigned by the registered proprietor to some other person, after the acquisition of those goods; or

(b) the goods having been put on the market under the registered trade mark by the proprietor or with his consent.

Further Section 30 (4) of the Act states that “Sub-section (3) shall not apply where there exists legitimate reasons for the proprietor to oppose further dealings in the goods in particular, where the condition of the goods, has been changed or impaired after they have been put on the market”.

On a plain reading of Section 30 (3) it can be interpreted that the goods once legally acquired, the trademark owner cannot forbid from further sale of the goods in any market. However, the important question that had to be clarified by the Indian courts in various matters filed before it in the context of deciding trademark infringement issues in the light of parallel imports, was whether the word “market” as used by the legislature in this section means the national or international market. Alternatively, the legal question that was to be decided by the Indian courts was whether the Indian trademark law recognized the doctrine of international exhaustion of rights or the national exhaustion of rights.

The landmark judgement in this regard was delivered on appeal by the division bench of the Hon’ble High Court of Delhi against an order of the Single Judge, in the case of Kapil Wadhwa and Ors. Vs. Samsung Electronics Co. Ltd.  on 3rd October 2012 (Samsung Electronics Co. Ltd. is hereinafter referred to as “Samsung” and Kapil Wadhwa and Ors. hereinafter referred to as “Appellants”), which dealt with in great detail the concept of parallel imports as well as doctrine of exhaustion of territorial exhaustion of rights of the owner of a trademark in the realm of the statutory framework under the Indian trademark laws.

The brief facts in the matter was that Samsung being the brand owner and the registered proprietor of the mark ‘SAMSUNG’ in India, accused the Appellants for importing Samsung’s products namely, printers without their permission and selling the same in the Indian market at a cheaper price and thereby infringing their registered trademark. In order to determine whether the same may be construed as an infringement, the Court had analyzed the provisions of Sections 29 and 30 of the Trademarks Act, 1999. The important issues considered by the Court were:

1. Whether India follows National or International exhaustion as per Section 30?

In the judgement of the Single Bench dated February 17, 2012, it was held that that Section 30 (3) of the Indian trademark act recognises only the doctrine of National Exhaustion. Thus, the Defendants were restrained from importing, exporting and dealing in printers and their ink cartridges/toners bearing the trademark SAMSUNG.

However, the order of the Single Bench was set aside on appeal by the Division Bench of the Hon’ble High Court of Delhi on appeal and held that the term ‘the market’ contemplated by Section 30(3) of the Trade Marks Act, 1999 means the international market and in holding so relied upon the Statement of Objects and Reasons of the Trade Mark Bill 1999 placed before the Indian parliament at the time of passing the legislation, India’s communications at the Uruguay Rounds and report of the Standing Committee on the Copyright (Amendment) Bill, 2010 which suggested India’s support for international exhaustion principles.

Accordingly, it was held that the trademark legislation in India adopts the Doctrine of International Exhaustion of Rights.

2. Whether parallel importation of goods into India is permissible?

The singe judge in its original judgement dated February 17, 2012 held that the import of goods into India without the permission of the registered proprietor of the Trade Mark is governed by Section 29 of the Trade Marks Act 1999 and this flows from a conjoint reading of Section 29(1) and Section 29(6) which require it to be held that when a person uses a Trade Mark in the course of import or export of goods, the same would be under the registered Trade Mark and thus the act of import is in clear and explicit terms of the two provisions, and would be infringement when import is made without the consent of the registered proprietor of the Trade Mark. Further, Section 29(1) does not distinguish between the import of genuine and non-genuine goods. Thus, imports, whether of genuine or non- genuine goods would amount to infringement if not effected by the consent of the registered proprietor of the Trade Mark or the permissive right holder of the Trade Mark.

On appeal it was argued by Samsung that it was also entitled to prohibit such parallel import and sales of “SAMSUNG” branded products in India by virtue of the provisions of Section 30 (4) that limits the exceptions to infringement of trademarks granted under Section 30 (3) and further argued that allowing such parallel imports would prejudice the rights of Samsung as a trademark owner that can potentially lead to a situation where counterfeit and duplicate goods are also pushed into the Indian market through illegitimate channels and hence by virtue of the provisions of Section 30 (4) it was entitled to restrict such parallel imports.

However, the Division Bench in its judgement dated October 3rd 2012 stated that Section 29 has to be read with Section 30 (a) and (b) and observed that –

“There is no law which stipulates that goods sold under a trade mark can be lawfully acquired only in the country where the trade mark is registered. In fact, the legal position is to the contrary. Lawful acquisition of goods would mean the lawful acquisition thereof as per the laws of that country pertaining to sale and purchase of goods. Trade Mark Law is not to regulate the sale and purchase of goods. It is to control the use of registered trademarks”.

The division bench of the Hon’ble High Court of Delhi, turned down the above arguments of Samsung by stating that curtailing such parallel imports will deny the Indian consumers access to original products at competitive prices and that the provisions of trademark laws are not intended to regulate the sale and purchase of goods but merely to protect the trademark and proprietary rights of trademark owners against misuse of its trademark, which misuse has not occurred in the instant matter.

It further held that since the word “market” as used under Section 30 (3) and 30 (4) means the “international market” and not merely the “Indian market”, and further since the Indian trademark law recognises the doctrine of international exhaustion, Samsung will not be entitled to prevent the parallel import of its products in India and further, permitted the sale of such printers under the condition that the Appellants shall prominently display in their showrooms that the product sold by them have been imported from abroad and that Samsung does not give any warranty qua the goods nor provide any after sales service and that the warranty and after sales service is provided by the Appellants personally.

It is to be noted that the same principle was also followed in the case of Western Digital Technologies Inc. vs. Mr. Ashish Kumar & Anr. in its judgement dated 20th October 2016, with respect to parallel importation wherein the Defendants were conducting parallel imports of genuine goods of the Plaintiff through unauthorised channels. The Plaintiff held registrations for their trademarks in India, which they had also registered with the Customs Authorities under the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 to prevent the import of infringing goods bearing the said trademarks.

However, based on the ratio of the landmark judgement passed by the Hon’ble High Court of Delhi in the Samsung case, the parties agreed to amicably resolve the matter and the Defendant agreed to place permanently and affix a label on the imported products to show that the goods have been imported and are not supported by an authorized warranty of the Plaintiff.

From the above, it can be concluded that the Trademark law in India allows parallel imports by acknowledging the concept of international exhaustion of rights of the owner as seen from the above cases. However, it is pertinent to note that the trademark owners’ rights are still intact if the goods which are being imported are counterfeit and not genuine goods. The cases of parallel imports are on a rise and, therefore, in order to protect the interests and rights of the brand owners, the Government has also initiated various steps including to stop import of counterfeit products by the Custom Authorities (to read more on how to record your IPs with the custom authorities, please read our article at this link- (

While one may argue that the said Novel Corona Virus situation that has turned into a global pandemic can be treated as a force majeure event that has happened beyond the control of the contracting parties, it may be a good idea to have such pandemic and epidemic situations also defined and specifically carved out as a force majeure event in order to avoid unnecessary disputes and interpretational issues. Accordingly, it is advisable to clearly define the word ”Pandemic” or “Emergency Epidemic”. Suggestive definitions of the same can be as under:

“Emergency Epidemic” means cases of an illness, sickness or condition, affecting living beings, whether communicable or noncommunicable, caused by bioterrorism, pandemic influenza, or any novel and highly fatal infectious agents or biological toxins that has been declared as such by any governmental or regulatory authority.

“Pandemic” means an epidemic disease that occurs throughout a very wide geographical area, usually several countries or continents, and usually affecting a large proportion of the population.

Further, suggestive language of the clauses related to performance excuse owing to Force Majeure events based on the above definitions can be drafted as under:

“Excusable Delays and Force Majeure. Any delay hereunder shall be excused to the extent approved in writing by the parties. Any delay in the performance by either party hereto of its obligations hereunder shall be excused when such delay in performance is due to any cause or event of any nature whatsoever beyond the reasonable control of such party, including without limitation any act of God; any fire, flood or weather condition; any earthquake; any Emergency Epidemic or Pandemic; act of a public enemy, war, insurrection, riot, explosion, terrorist attack or strike; provided, however, that written notice thereof must be given by such party to the other party within thirty (30) days after the occurrence of such cause or event.”

A. Extension of time for filing GST Returns:

Date for filing GST returns due in the months of March, April and May 2020 have been extended and the same have been permitted to be filed by the last week of June 2020 (Staggering of dates for various states as already in place shall apply – notification in this regard is yet to be given by the Central Board Indirect Taxes and Customs)

Entities having aggregate annual turnover less than Rs. 5 crores can take full benefit of the above relaxation in due date since they will not be charged any interest, late fee or penalty for filing the returns within the extended due date.

Entities having aggregate turnover of Rs. 5 crores are only given a relaxation of about 15 days from the above actual due dates. However, in case of any delay beyond this relaxed 15 days, the interest that will be charged has been reduced to 9% p.a, as opposed to the existing 18% p.a. In addition, they will not be charged any late fee or penalty for filings done till the extended due date.

B. Extension of time to opt for Composition Levy Scheme:

Eligible registered taxpayers who wished to opt for Composition Levy Scheme under GST for the FY 2020-2021 were allowed to do so by making an application in Form GST CMP-02 on the GST common portal on or before the 31st of March 2020. This date has now been extended and the application to opt for Composition levy scheme may be made on or before the 30th of June 2020.

C. Date for payment under Sabka Vishwas Scheme extended:

The Sabka Vishwas Scheme, 2019 was introduced to resolve all disputes relating to the erstwhile Service Tax and Central Excise Acts, which are now subsumed under GST as well as 26 other Indirect Tax Enactments. The due date for this was 15th January 2020, which was later extended to 31st March 2020. Due to the situation now prevailing due to Covid-19, this has now been further extended and taxpayers who wish to avail the benefits under this scheme may do so by 30th June 2020.

Also, no interest will be levied for payments made during this period under this scheme, irrespective of the amount under dispute.

D. Due date of GST annual return for FY 2018-2019 extended:

The time limit for furnishing annual return (Form GSTR 9/GSTR 9A) for the FY 2018-2019 has been extended to 30th June 2020. The notification in this regard by the Central Board Indirect Taxes and Customs can be accessed at

E. Customs clearance shall operate 24×7:

Irrespective of the lockdown, till the 30th of June 2020, Customs clearance shall operate 24×7 with a view to remove difficulties that any importer/exporter may face.

SEBI has granted following relaxations from compliance stipulations specified under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR”) to the listed entities:

    Frequency Due within Due Date Extended date Period of relaxation
a Regulation 7(3) relating

to compliance

certificate on share

transfer facility

Half yearly 1

month of

the end of

each half

of the






May 31,


1 month
b Regulation 13(3)

relating to Statement of

Investor complaints

Quarterly 21 days

from the

end of






May 15,





c Regulation 24A read

with circular No


9 dated February 8,

2019 relating to

Secretarial Compliance


Yearly 60 days

from the

end of the






June 30,


1 month
d Regulation 27(2)

relating to Corporate

Governance report

Quarterly 15 days

from the

end of the





May 15,


1 month
e Regulation 31 relating

to Shareholding Pattern

Quarterly 21 days

from the

end of the





May 15,





f Regulation 33 relating

to Financial Results

Quarterly /


45 days

from the

end of the








June 30,


45 days
g Regulation 40(9) relating to Certificate from Practicing Company Secretary on timely issue of share certificates Half Yearly 1 month of the end of each half of the financial year April 30, 2020 May 31, 2020 1 month
h Regulation 44(5) relating to holding of AGM by top 100 listed entities by market capitalization for FY 19-20 Annual Within a period of 5 months from the date of closing of the financial year August 31, 2020 September 30, 2020 1 month
i The nomination and remuneration committee, stakeholders relationship committee and the risk management committee is required to meet atleast once in year. Yearly March 31, 2020 March 31, 2020 June 30,2020 3 months


j. Relaxation from publishing in newspapers:

Regulation 47 of SEBI (Listing Obligations and Disclosures Requirement) Regulations, 2015 provides for events which have to be published in newspapers. SEBI has exempted the listed companies from publishing the advertisements in newspapers as required under regulation 47 for all events scheduled till May 15, 2020.

k. Relaxation of the operation of the SEBI circular no. SEBI/HO/CFD/CMD/CIR/P/2020/12 on Standard Operation Procedure dated January 22, 2020

The above circular is with respect to the Standard Operating Procedure (SoP) on imposition of fines and other enforcement actions for non-compliances with provisions of the SEBI (LODR) Regulations, 2015. The effective date of operation of this circular was from compliance periods on or after March 31, 2020. However SEBI has extended it to the compliance periods ending on or after June 30, 2020. Hence the earlier SoP circular dated May 3, 2018 would be applicable till June 30, 2020.

S.No. Category Present requirement Relaxation
1 Relaxation with respect to Directors and Meetings:
a Gap between two board meetings (for unlisted companies) Presently the gap between two board meetings cannot exceed 120 days. The Ministry has provided a one-time relaxation for the gap between two board consecutive board meetings, which may extend to 180 days. This relaxation is applicable till next 2 quarters i.e., till 30th September 2020.


b Gap between two board /audit committee meetings (for listed companies) – as per SEBI (LODR) Regulations, 2015 Presently the gap between two board/audit committee meetings cannot exceed 120 days. The listed entities are exempt from observing this maximum stipulated time gap between 2 meetings for the meetings held

or proposed to be held between the period

December 1, 2019 and June 30, 2020.

c Companies to whom independent director is applicable the Independent directors are required to hold at least one meeting without the attendance of non-independent directors and members of the management the Ministry has relaxed the requirement of holding the Independent directors meeting for Financial year 2019-20.


d Relaxation with respect to resident director: Presently every Company is required to have at least one director who stays in India for a total period of not less than 182 days during the financial year. Considering the current travel restrictions, the Ministry has relaxed this requirement for the financial year 2019-20.
2 Companies (Auditor’s Report) Order, 2020:


The Ministry had notified Companies (auditors Report) Order, 2020 prescribing the matters to be reported by the statutory auditors of certain class of Companies. The said matters were required to be reported by the statutory auditor in its auditor’s report for the financial year 2019-20 To ease the burden on companies and their auditors for the financial year 2019-20, the Companies (Auditor’s Report) Order, 2020 is made applicable from financial year 2020-21 instead of financial year 2019-20.


3 Companies accepting deposits The Companies accepting deposits, are required to deposit at least 20 percent of the amount of its deposits maturing during the following financial year (Deposit Repayment Reserve), in a scheduled bank in a separate bank account. Such sum is to be transferred on or before 30th April each year. Considering the COVID-19 situation the Ministry has extended the date by which the amount of the Deposit Repayment Reserve can be transferred to a separate bank account to 30th June 2020.


4 Companies having outstanding non-convertible debentures:


The Companies which have issued Non-convertible debentures are required to invest or deposit at least 15% of the amount of debentures maturing in specific methods of investments or deposits before 20th April 2020. Considering the COVID-19 situation the Ministry has extended the date of meeting this compliance till 30th June 2020.


5 Newly incorporated companies


A Newly incorporated entity is required to file declaration of commencement of business within 180 days of incorporation. Considering the COVID-19 situation the Ministry has provided an additional period of 180 days for meeting this compliance.


A series of Public Notices have been issued by the Indian IP and Copyright office over the past few days in relation to cancellation of all hearings as under:

A. Notice dated March 16, 2020, of the Trade Marks Registry:

 The Indian Trade Marks Registry has notified that all trademark hearings between the period of 17th March, 2020 and 15th April, 2020, stand adjourned and that such hearings will be rescheduled in due course of time. The public notice of the Controller General of Patent, Design and Trademarks can be accessed at:

B. Notice dated 16th March, 2020, of the Copyright Office:

 The Registrar of Copyrights has announced that all hearings scheduled between March 17th 2020 and March 31st 2020, have been adjourned and will be rescheduled in due course of time. The public notice can be accessed at:

C. Notice dated March 19, 2020, of the Patent Office:

  • All in-person hearings before the Indian Patent and Designs Office scheduled on or before April 15, 2020, has been changed to Video Conferencing (VC) hearings. It has further been stated that in case the applicant is unable to agree for the VC hearing, the hearing shall be adjourned to a date later than 15th April, 2020. It also clarifies that, hearings post-April 15, 2020 shall remain unchanged.
  • The Indian Patent Office has further also stated that any delay in transmitting or resubmitting documents to the Patent Office will be condoned or the relevant timeline extended on a petition for such condonation of delay or extension not later than one month from the date when such Novel Corona Virus outbreak ceased to exist.

The public notice of the Controller General of Patent, Design and Trademarks can be accessed at:

D. Updated Public Notice dated 25th March 2020, of the Patent Office:

 The Indian Patent Office has issued an updated Public Notice on the 25th March 2020 cancelling all the Video Conference hearings scheduled between 23rd March 2020 and 14th April 2020, in the wake of wide spread pandemic of Novel Corona virus and lockdown situation prevailing in the country. Further dates of rescheduled hearings will be communicated shortly.

The Controller General of Patent, Design and Trademarks has on the 25th March 2020 issued a Public Notice that all the IP Offices in India shall remain closed from the 25th March 2020. It has further extended all deadlines and due dates in respect of filing of documents in any matter that falls due during this period of closure until the date of next day on which the offices re-open.

While this notice issued by the Controller General of Patent, Design and Trademarks definitely benefits the concerned stakeholders and grants a time extension during this period of crisis but there may be several practical issues that may arise as and when the offices re-open given the voluminous filings that can potentially be made by various stakeholders to comply with the deadlines for multiple matters falling on the same day viz., the date on which the offices re-open.

In this regard it is to be noted that as mentioned earlier the Hon’ble Supreme Court of India has vide its order dated 23rd March 2020 ordered that a period of limitation in all such proceedings, irrespective of the limitation prescribed under the general law or Special Laws whether condonable or not shall stand extended w.e.f. 15th March 2020. While it may be inferred from the order of the Hon’ble Supreme Court that the extensions of limitations as granted thereunder also applies to deadlines even under the special enactments such as the IPR enactments and the Rules framed thereunder, it would have really benefitted the stakeholders of the IPR fraternity if the Controller General of Patent, Design and Trademarks had aligned the time extensions granted under its aforesaid notice, to the directions issued by the Hon’ble Supreme Court, by stating that all limitation periods shall stand extended until further directions in order to avoid confusion at a later point in time. The public notice of the Controller General of Patent, Design and Trademarks can be accessed at

The Hon’ble Supreme Court of India by its order dated 23rd March 2020 has, in a writ petition taken suo moto cognisance of the situation arising out of the challenge faced by the country and the resultant difficulties that may be faced by litigants across the country in filing their petitions/applications/suits/ appeals/all other proceedings within the period of limitation prescribed under the general law of limitation or under Special Laws (both Central and/or State).

In an unprecedented move and in exercise of its powers power under Article 142 read with Article 141 of the Constitution of India the Hon’ble Supreme Court, in order to obviate the difficulties faced by lawyers and litigants, ordered that a period of limitation in all such proceedings, irrespective of the limitation prescribed under the general law or Special Laws whether condonable or not shall stand extended w.e.f. 15th March 2020 till further order/s to be passed by Supreme Court in the suo moto proceedings. This order is binding on all Courts/Tribunals and authorities in India.

This order of the Hon’ble Supreme Court is indeed a welcome initiative that will ease the hardships faced by lawyers and litigants across the country during these times, with a national lockout having been declared from 25th March 2020 till 15th April 2020.

Business continuity is essential even in these extra-ordinary times of Covid-19. To keep off the pandemic the essential requirement is social distancing.  To enable social distancing and still at the same time ensure continuation of business, the Ministry of Corporate Affairs (MCA) has waived the requirement of physical presence of directors in the board meeting, in respect of matters which required the quorum (minimum number of directors to constitute a valid meeting) to be present in one place.

BOARD MEETING AND QUORUM REQUIREMENT:  Vide notification dated 19th March 2020, MCA has permitted items of business that hitherto required presence of quorum of the board/committee at one place, viz:

  • approval of the annual financial statements;
  • approval of the board’s report;
  • approval of the prospectus;
  • audit committee meetings for consideration of financial statement including consolidated financial statement, if any, to be approved by the board.
  • approval of the matter relating to amalgamation, merger, demerger, acquisition and takeover.

PERIOD TILL WHEN RELAXATION IS AVAILABLE: 19th March 2020 to 30th June 2020. With this notification, all the business items can be transacted through video conference, without any restriction.

The Ministry of Corporate Affairs (“MCA”) has issued an advisory on preventive measures to contain the spread of COVID-19

Work from home policy

To COntain the VIrus by staying InDoors, the MCA has directed companies and LLPs, to put in place an immediate plan to implement the “Work From Home” policy as a temporary measure till 31st March 2020, by when the positions will be reviewed.

For whom applicable – Companies and LLPs, their headquarters and field offices.

Recommended methodology of interaction

a. Video conference or other electronic/telephonic/computerised means.

b. Minimise physical interactions by having staggered timings for essential staff.

c. Preventive measures issued by public health authorities to be strictly followed.

Filing of CAR with MCA

        1. MCA proposes to deploy a web-form CAR (Company Affirmation of Readiness towards COVID-19).
        2. Date on which web form will be available: 23rd March 2020.
        3. Person signing: The web-form to be signed by authorised signatory of the company.
        4. Due date: MCA has given the date as “23rd instant”.

The Office of the Minister of Corporate Affairs tweeted: “Reports that Company Affirmation of Readiness (CAR) will pose an additional compliance burden on companies are not accurate. The form is a simple Yes/No on the adoption of ‘work from home’. It is a confidence building measure during a public health emergency. #IndiaFightCorona”, and further clarified by another tweet “The Company Affirmation of Readiness (CAR) is only an appeal to companies to join hands to contain the #Coronavirus disease through social distancing. #IndiaFightsCoronavirus”

Link to the advisory –

Authors: Sri Vidhya Kumar & Lakshmi Rengarajan
Ministry of Corporate Affairs has amended Companies (Incorporation) Rules 2014 on 6th February 2020, for facilitating “Ease of Doing Business” and introduced web-based forms, SPICe+ and AGILE-PRO replacing the existing e-Form SPICe and AGILE.

Reserve Unique Name (RUN) application Web based Reserve Unique Name (RUN) application

After amendment, RUN application can be used only for making application for change in name of the existing company.

Web based application through Part-A of SPICE +
AGILE services Goods and Services Tax registration

Employees Provident Fund Organisation registration

Employees State Insurance Corporation registration.

Application can be made for availing following registrations through AGILE-PRO

Goods and Services Tax registration

Employees Provident Fund Organisation registration

Employees State Insurance Corporation registration

Professional Tax registration

Opening of a bank account

Declaration from the first subscribers and first directors The declaration has to be filled in separately for each subscriber and director in physical mode Single electronic form containing details of all the subscribers and directors and the declaration to be signed electronically by each subscriber and director.


Author: N.V. Saisunder
Recently, in August 2019 The Arbitration & Conciliation (Amendment) Act, 2019 (“the 2019 Amendment”), which amends the Indian Arbitration & Conciliation Act, 1996 (“the Act”), came into force. This amendment was made pursuant to the Government of India’s intention to make India a hub for domestic and international arbitration by bringing in changes in law for faster resolution of commercial disputes.
Some of the key highlights brought in by the 2019 Amendment is as under:

    1. Establishment of Arbitration Council of India: New Sections 43A to Section 43M, makes provision for constitution of Arbitration Council of India (“Council”). The Council shall take necessary measures to promote and encourage arbitration, mediation, conciliation and other alternative dispute resolution mechanism in the country and is also tasked with the responsibility of framing policy guidelines for the establishment, operation and maintenance of uniform professional standard in respect of matters relating to arbitration. The Council of India shall frame policy for grading the arbitral institutions in order to ensure satisfactory levels of conduct of arbitrations and conciliations in the country.


    1. Revamped procedure for Appointment of Arbitrator – Section 11: The following revamped procedure has been prescribed for appointment of arbitrators under the 2019 Amendment:

      • Supreme Court of India is now tasked with the responsibility of designating the arbitral institution for appointment of arbitrator (s) in international commercial arbitration matters, whereas the High Courts will designate arbitral institutions within their respective jurisdictions for appointment of arbitrators in cases of domestic arbitrations. In case there is no arbitral institution within jurisdiction of a High Court, such High Court can maintain a panel of arbitrators to perform the functions of arbitral institution.
      • The arbitral institutions to be designated by Supreme Court or the High Court would be those which have been graded by the Council.
      • The arbitral institution is mandated to dispose of an application for appointment of arbitrator within 30 days from the date of service of notice on the opposite party.


      1. Timelines under the 2019 Amendment in relation to conduct of proceedings and passing of award:

        • The 2019 Amendment has introduced new Section 23 (4), which provides that a statement of claim and statement of defense shall be completed within a period of six months from the date the arbitrator received notice of appointment.
        • Further the time period of one year for making of the arbitral award as provided under Section 29A(1) shall be construed to have begun from the date of completion of pleadings (statement of claim and statement of defense) only. Therefore, the time period of one year for making of award shall commence irrespective of non-completion of pleadings within the said period. Accordingly, if the pleadings are completed before six months as mentioned hereinabove, the time period of one year for making of an award shall commence forthwith the completion of the pleadings.


        1. Amendment to Section 34 clarifies that at the stage of challenging the award, the court will not see any material other than records of the arbitral tribunal based on which an award was passed. Accordingly, it implies that the parties must rely on the records before the arbitral tribunal alone at the time of challenge of an award before a court of law.


        1. Confidentiality of the Arbitration Proceedings: New Section 42A and 42B states that the arbitrator, the arbitral institution and the parties to the arbitration agreement must maintain confidentiality of all arbitral proceedings except the award where its disclosure is necessary for the purpose of implementation and enforcement of award and further protects the arbitrators from any legal proceedings against acts done in good faith.

        The 2019 Amendment definitely aims at removing various shortcomings and difficulties under the previous enactments. The mandatory time frames for filing and completion of pleadings and passing of awards are indeed a welcome measure that will add more certainty to the conduct and conclusion of the arbitral proceedings in India. The 2019 amendment is definitely a welcome move and will increase the quality and volume of matters of arbitration in India.

Author: N.V.Saisunder
Recently the Hon’ble High Court of Delhi vide its order in December 2019, in an infringement suit filed by Ferrero S.P.A, (“Ferrero”) an Italian manufacturer of chocolates and confectioneries, declared the trademark “KINDER JOY” as a well-known trademark in India. Ferrero S.P.A filed a suit of infringement suit and passing off before the Hon’ble High Court of Delhi against Kamco Chew Food Private Limited’s product “KAMCO MOTU PATLU- Biscuit Ball with Choco & Milk Rabdi (“Kamco”) on the grounds that it was infringing the KINDER JOY trademark and trade dress. Ferrero alleged that Kamco had copied, the following elements of the Kinder Joy chocolate product:

  • Egg shape of the product;
  • Colour scheme of the packaging;
  • Graphical elements on the packaging; and
  • Presentation of the contents.

Based on Ferrero’s submissions regarding the various similar and deceptive aspects of the trade dress between its KINDER JOY Product and that of Kamco’s products, the court, in its order dated December 18, 2019, concluded that Kamco’s products were deceptively similar to those of Ferrero. In view of the prima facie case of trademark and trade dress infringement and passing off made out by Ferrero against Kamco, the court granted a permanent injunction against Kamco and further awarded the costs of the suit around INR 2 million against Kamco. Lastly, the court also declared Ferrero’s KINDER JOY a well-known mark in India.
It is interesting to note that the new Trademark Rules which came into effect in the year 2017 formally created provisions and procedures that enables trademark proprietors to make applications for recognition of their trademarks as well-known trademarks in India. Under the Trademark Act and Rules the Registrar of Trademarks is empowered to include a trademark as a well-known trademark inter-alia if a particular mark has been recognised as such by a court of law in any proceedings before it. That apart the Registrar of Trademarks also has a discretionary power to declare a well-known trademark based on a formal application made by a proprietor of a trademark under the Act and the Rules.

Author: N.V.Saisunder
Recently in December 2019, the Delhi High Court confirmed vide its order that not all Computer Programs are hit by the bar on patenting under the provisions of Section 3 (k) of the Indian Patents Act, 1970 (the “Act”), where such computer programs demonstrate a technical effect or technical contribution. Section 3 of the Act enlists the various matters that are not construed to be an invention within the meaning of the Act and specifically Section (k) states that- a mathematical or business method or a computer programme per se or algorithms”, is not patentable under the Act.
The brief background in this matter is that the petitioner was a national of Tunisia and had filed a patent application seeking grant of patent for a “method and device for accessing information sources and services on the web”. The claims in the patent consisted of both method claims and device claims. The application was refused by the Patent Office inter-alia on the grounds that some claims were hit by the provisions of Section 3(k) of the Act and that the other claims lacked novelty. An appeal before the IPAB was also dismissed and the IPAB opined that the patent application did not disclose any ‘technical effect’ or ‘technical advancement’ and hence does not qualify for a grant of patent under the Act. Based on the above rejections, the Petitioner moved the High Court and argued that his patent application was an invention within the meaning of the Act and that it advanced an efficient database search strategy, more economical use of memory etc. It was contended that this constituted the “technical effect” and hence the rejection of the patent by the Patent Office and the IPAB was in contravention to the law and the relevant guidelines.
While passing its order the Hon’ble High Court noted that the bar on patenting was in respect of `computer programs per se….’ and not on all inventions which were based on computer programs. The court further observed that:
“In today’s digital world, when most inventions are based on computer programs, it would be retrograde to argue that all such inventions would not be patentable. Innovation in the field of artificial intelligence, blockchain technologies and other digital products would be based on computer programs, however the same would not become nonpatentable inventions – simply for that reason. Thus, the effect that such programs produce including in digital and electronic products is crucial in determining the test of patentability.”
Accordingly, it stated that the patent applications in the field of computer programs would have to be examined in a manner to see if they result in any ‘technical contribution’.
The Court further clarified that the words ‘per se’ were incorporated in Section 3 (k) to ensure that genuine inventions in the field of computer programs are not refused patents. Based on the above ratio, the Court directed the Patent Office to re-examine the Petitioner’s application in the light of the present order, various judicial precedents, practices of patent offices as well as the Guidelines on Computer Related Inventions. It will be interesting to see how the Patent Office continues to examine patent applications made in respect of Computer Related Inventions (CRI’s) in India and its effect on Open Source Software Lobbyists across the globe.

Ministry of Corporate Affairs vide its notification dated 3rd January 2020, has modified the rules relating to secretarial audit. The audit which was applicable only to listed and unlisted companies with a threshold of Rs. 50 crores paid-up capital or Rs. 250 crores turnover, has by this amendment been modified to be applicable even for private limited company, if ….Read more


[Author: Shyamolima Sengupta]


Intellectual Propriety Rights (IP Rights) holders are under constant threat of counterfeit products in the market, which is increasing exponentially with growing technology and increase in cross-border commerce between countries. Interestingly, such counterfeit goods may not always be manufactured and circulated for trade and commerce in the domestic market but may also enter illegally through the customs frontiers of a country. Therefore, it is crucial for IP Rights holders to keep a close watch and take appropriate and timely action against imports that can potentially be infringing on the rights of such IP Rights holders.


With an intention to protect the IP Rights of proprietors in India and also to honour India’s international commitments under the TRIPS (Trade Related Aspects of Intellectual Property Rights) Agreement, the Government of India has framed the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 [as amended from time to time] (“Rules”). These Rules are aimed to prevent counterfeiting and infringing goods from surreptitiously being imported into the Indian markets. IP Rights holders can now record their IP Rights i.e. trademark, designs, copyright and geographical indication (excluding patents) online, through the Indian Customs IPR Recordation Portal (

Procedure for recordal of IP rights with the Customs

The IP rights holder will have to file separate applications for its respective trademark, design, copyright and geographical indication through the above referred online portal. Upon registration on the portal, a unique user name (ID) and a password will be created and thereafter the duly filled-in form along with the necessary documents must be submitted online. Subsequently, a Unique Temporary Registration Number (UTRN) will be provided to the IP Rights holder. The said UTRN along with the physical copy of documents, print-out of the online form and statutory fees of Rs. 2000 must be filed at the Customs Office of the IP Right holder’s choice which has an IPR cell. The IP Right holder may choose any Customs Officer as per their convenience. The IP Right holder need not have to file multiple applications for different ports as a single application covers multiple ports.

Documents to be filed with the Application Form

  • Proof of ownership of the IP rights and copies of the corresponding registration certificates.
  • Images of genuine goods (for trademarks and designs).
  • Images of infringing goods (if applicable/available).
  • A statement regarding the scope of the IP right sought to be recorded.
  • Details regarding differentiating features of genuine and infringing goods.
  • Statement of grounds for suspension of infringing goods (if applicable).
  • The Importer Exporter code (IEC code) of the rights holder and other authorized importers.
  • In case of geographical indications – description of the GI and geographical area of production.
  • Customs Tariff headings of the applicable goods (if available).
  • An indemnity bond indemnifying the Customs authorities against all liabilities and expenses on account of suspension of clearance of allegedly infringing goods.
  • The General Bond or Centralized Bond: Such bond to be executed by the IP rights holder in order to bear the cost towards destruction and detention charges of the infringing goods.**
  • Power of attorney authorizing the person who is filing the application.
  • Demand draft of Rs. 2000 in favour of the Commissioner of Customs of the opted location.

** General Bond + Consignment Specific Bonds: –

Rights Holder need to provide consignment specific Bond of an amount equivalent to 110% of the value of the detained goods, along with security, in the form of a bank guarantee or fixed deposit, equivalent to 25% of the bond value at the port of interdiction.


Centralized Bonds: –

The IP Right holder may alternatively file a Centralized Bond (which will be a running bond) for a value that is sufficient in their judgment, to correspond to value of suspected allegedly infringing goods, all over India. The particulars of the Centralised Bond will be uploaded online and applicable to all the ports in India with an online facility of debit and credit. This security amount would then be used against future interdictions of goods that infringe the Right holder’s IP. The IP Right holder would have the ability to “top up” the Centralised Bond at any time without the worry of needing to produce a Consignment-specific Bond in a short time period when infringing goods are interdicted. Customs will debit the applicable amount (equivalent to 110% of the value of the detained goods) along with a security equivalent to 25% of the bond value from the Centralised Bond Account. In case of inadequate balance, the same can be supplemented by the Rights Holder by executing a supplementary bond with necessary security at the Customs Office where registration has taken place. A Centralized Bond account can cover one or more rights registered by a rights holder with the Customs.

The Customs office will scrutinize the documents within 30 days of the online filing and may call upon the IP rights holder to furnish additional documents/information if required. Upon satisfaction, the office shall issue the Unique Permanent Registration Number (UPRN) and formally record the IP rights with the Customs authorities. Accordingly, import of allegedly infringing goods intended for sale or use in India of the recorded IP rights shall be deemed as prohibited under Section 11 of the Customs Act, 1962.

Type of goods to be prohibited

Subject to conditions and procedures as specified in the Rules, import of the following goods are prohibited:

      1. goods having applied thereto a false trademark as specified in section 102 of the Trademarks Act, 1999;
      2. goods having applied thereto a false trade description within the meaning of clause (i) of sub-section (1) of section 2 of the Trademarks Act, 1999;
      3. goods made or produced beyond the limits of India and intended for sale, and having applied thereto a design in which copyright exists under the Designs Act, 2000;
      4. goods having applied thereto a false Geographical Indication within the meaning of section 38 of Geographical Indications of Goods (Registration and Protection) Act, 1999;
      5. goods which are prohibited to be imported by issuance of an order issued by Registrar of Copyrights under section 53 of the Copyright Act,1957.

Detention of goods and consequent process

In case where any goods purportedly infringing upon recorded IP rights are detained at the customs frontiers of India, the Deputy Commissioner of Customs or Assistant Commissioner of Customs, shall inform the importer and the right holders (or their Authorized Representatives) by speed post/ email of the suspension of clearance of the goods and shall state the reasons for such suspension. At this stage, the IP rights holder or its Authorized Representative shall, in order to join the proceedings under Rule 3, execute a Specific Bond indemnifying the Custom authorities and provide documentary proof of the validity of UPRNs. The IP right holder’s Authorized Representative is then provided with photographs/ serial numbers of the products/ samples of the products for examination, testing and analysis to assist in determining whether or not they are infringing (under Rule 8).

If the IP rights holder fails to join the proceedings within the given time period, the infringing goods shall be released to the importer. The prescribed time period for IP Rights holder to join the proceedings in respect of non-perishable goods is ten working days extendible by another ten working days, whereas it is just three working days extendible by four working days in case of perishable goods. If the IP rights holder attends the proceedings and the Customs officials conclude that the goods are indeed infringing on the IP right holder’s recorded IP rights and there is no legal proceeding pending, the infringing goods will be seized and thereafter destroyed under intimation to the IP right holder, in accordance with the provisions provided in the Customs Act. The cost of such detention and destruction shall be borne by the IP right holder. Customs Authorities are also entitled to suo moto, suspend the clearance of the imported goods, if there is prima facie evidence or reasonable grounds to believe the goods are infringing on the IP Rights of any third party.

Amendment to the rules in 2018- Patent rights excluded from the purview of the rules:

It is pertinent to note that the Rules were amended vide a notification of the Department of Revenue, Ministry of Finance in the year 2018 and pursuant to which the following two important changes have been brought into effect:

    1. ‘Patent Rights’ have been excluded from the purview and scrutiny of Customs authorities. Accordingly Custom Authorities no longer have the jurisdiction to scrutinize imports of any products/goods on the ground that such products/goods may be infringing on any Indian patent. In the light of such amendments to the Rules, enforcement of patent rights at the Customs frontier/ border is possible only through an order of the Court whereby specific injunction against import of infringing products is obtained by the patents right holder.
    2. An amendment to Rule 5 of the Rules has been brought in, mandating the requirement of a notice by the IP Rights holder to the customs authorities, in case of any order of amendment, cancellation, revocation or suspension of their subsisting IP Rights by a court of law.

The amendment regarding exclusion of ‘Patent Rights’ from the purview of the Rules was necessitated considering the fact that any assessment of a potential patent infringement would require a detailed method of assessment of a technical nature of the relevant goods/products, and the same method of limited scope of enquiry as in the case of Trademarks and Copyrights was found to be not sufficient in order  for the customs authorities to form an opinion on potential patent infringements arising out of certain imports. This amendment is a welcome change since the custom authorities do not possess the necessary training and expertise to analyse the specifics of a registered patent.

Further, the second amendment mandating the requirement of a notice by the IP Rights to customs authorities, would ensure that frivolous infringement claims are not an unnecessary hurdle to genuine trade and persons holding expired or revoked IP Rights are mandated to inform the customs authorities as such and this directly ensures that trade and business does not get affected by suspension of clearance of imported goods where no IP Rights subsist.


It is undoubtedly a great initiative by the government to set up such a user-friendly platform to encourage the IP Rights owners to record their IP Rights with the Customs office and thereby fight together against cross-border counterfeiting and infringement of IP Rights in India. Thus, the IP Rights owners need to be vigilant and ensure to take such pro-active measures to record their IP Rights with the Indian customs authorities.

[Author: Ms. Sharadaa C]


No fixed place of Business in India and yet wish to effect supplies of taxable goods or services from any state/union territory in India? Goods and Services Tax (GST) legislation has a remedy.


GST provides temporary registration to persons who wish to effect taxable supplies occasionally from any place in India. Such persons may either be a casual taxable person or a non-resident taxable person. Few points to be taken note of in this context are as follows:

  Casual Taxable Person Non-Resident Taxable Person:



One who has a registered (fixed place) of business in one state in India but wants to effect supplies from some other state in which he does not have ant fixed place of business.

One who is a foreigner and occasionally wants to effect taxable supplies from any state in India



Compulsory registration. No threshold limit

Compulsory registration. No threshold limit

Time period for making application for registration

Atleast five days prior to commencement of business

Atleast five days prior to commencement of business

Form for registration GST REG-01 GST Reg-09
Details to be mentioned for registration

Part A – declare PAN, email ID and Mobile number

On validation of the same, a Temporary Reference Number (TRN) will be generated using which Part B of the application can be filled and submitted with the GST department.

Electronically submit an application, along with self-attested copy of his valid passport, for registration

In case the non-resident taxable person is a business entity incorporated or established outside India, the application for registration shall be submitted along with its tax identification number or unique number on the basis of which the entity is identified by the Government of that country or its PAN, if available.

The application for registration made by a non-resident taxable person must be signed by authorised signatory who shall be a person resident in India having a valid PAN.


Provisions of the Foreign Exchange Management Act, 1999, need to be complied with before effecting supplies, with regard to establishment of place of business in India.

Also, the provisions of Companies Act, 2013 needs to be complied with for having established a place of business in India.

Advance Deposit of Tax:

Advance deposit of tax shall be made for an amount equivalent to the estimated tax liability

Advance deposit of tax shall be made for an amount equivalent to the estimated tax liability



On successful verification of the details submitted, the person or the business entity will be provided with a temporary reference number by the GST portal for making the advance deposit of tax for an amount equivalent to the estimated tax liability of such person for the period for which the registration is sought.


The supplies can be effected only after:

  • the estimated tax liability paid is credited to the electronic cash ledger of the casual taxable person or non-resident person and
  • on the issuance of the certificate of registration.



The certificate of registration issued shall be valid for the period specified in the application or 90 days from the effective date of registration, whichever is earlier.

The validity period of 90 days can be extended by a further period not exceeding 90 days. The extension will be allowed on making an application in Form GST REG-11 and after payment of the additional estimated tax liability for the period for which the extension is sought.



Casual Taxable Person Non-resident Taxable Person
Return Purpose Due date Return Purpose Due date
Form GSTR 1

Details of outward supplies of goods or services

On or before the 10th of the following month

Form GSTR 5

Details of outward and inward supplies and payment of tax

Within 20 days after the end of a calendar month or within 7 days after the last day of the validity period of registration, whichever is earlier

Form GSTR 3B

Payment of tax

To be filed before the 20th of the following month



The casual taxable person or non-resident taxable person is eligible for the refund of any balance of the advance tax deposited after adjusting the tax liability.  The balance in the advance tax deposited can be refunded only after all the returns have been furnished, in respect of the entire period for which the certificate of registration granted had remained in force.

[Authors Mr. Saisunder and Ms. Srividya Sundaresan]

The provisions of Section 25 of the Trademarks Act, 1999 (“Act”), r/w Rules 58-61 of the Trademark Rules, 2017 (“Rules”) cast certain obligations on the registered proprietor and the Registrar of Trademarks vis-à-vis three R’s (renewal, restoration and removal) of registered trademarks.

The basic principles associated with the renewal and restoration of trademarks have remained consistent despite amendment (over a period of time) to the rules. In this article we look into the timelines associated with renewal and restoration of trademarks, and a recent decision setting out the law with regard to removal of trademarks.

Scenarios and timelines associated with renewal:

The following scenarios are contemplated under the law with respect to renewals:

Sl.No Scenario Timeline for filing renewal application Applicable format Rule reference
1. Application by Registered Proprietor Not more than one year prior to expiration of the last registration Form TM-R Section 25 (1) and (2) r/w Rule 57
2. Reminder by Registrar Registry is required to send notice at the address of service, not more than six months before the expiration of registration RG-3 or O-3 under the erstwhile Rules Section 25 (3) r/w Rule 58
3. Mark registered only 6 months prior renewal date Within six months after the actual date of registration Form TM-R Rule 58 (2)
4. Date of registration is after the due date of renewal Within six months after the actual date of registration Form TM-R Rule 58 (3)
5. Renewal after expiration of registration Proprietor can make an application within 6 months from the date of expiry of registration to registrar for renewal, and pay a surcharge along with the normal fee payable. Form TM-R proviso to Section 25 (3) r/w the proviso to Rule 59

Note: Along with application, the fee for renewal is also to be paid.

Restoration of trademarks after expiry of timelines for renewal:

Where the renewal of a trademark has not been carried out as contemplated under the Scenario in sl. Nos. [1] and [3 to 5] of the table above, then a proprietor is entitled to have his registered trademark restored by making an application for restoration. This application is to be made within a period of one year from the expiration of the registration. [Section 25 (4) r/w Rule 60]

Removal of a Mark by The Registry:

A mark can be removed by the Registrar, only after the satisfaction of all the procedural conditions and any removal to the contrary will be bad in law and void.

The Hon’ble High Court of Delhi in Gopal Ji Gupta Vs Union of India and Ors.[i],  looked into the aspect of removal of a trademark without issuing RG-3 (erstwhile O-3) notice intimating due date for renewal.

The application for registration of the Petitioner’s mark was filed on 15th June 1987 and was due for renewal during 1994. (The period of validity of trademark was increased from 7 years to 10 years under the present statute). The mark was published in the trademark journal on 16th December 1995 and registered only during 1998 (which was post the actual renewal due date).

The Petitioner first filed the renewal request in 2001. His efforts to ascertain status of his mark went futile, as the date of expiry of the mark was not informed to the Petitioner.

Sometime during 2015, the Petitioner noticed from the status page of the trademark website, that the mark was due for renewal and filed the renewal request on June 08, 2015 but the same was dismissed and fee was refunded by the Registrar of Trademarks on the ground that the renewal request was time barred. The Petitioner sought the Court’s directions to set aside the order of dismissal of the renewal application and allow the renewal of his trademark.

The Court while deciding in favour of the Petitioner decided the following issue:

Whether a renewal request can be denied by the Registrar of Trademarks without issuing the notice stipulated under Section 25 of the Act?

The Court held that a trademark can be removed only if the Registrar has complied with the requirements of issuing notice under Section 25(3) of the Act.

It also held that when a trademark, which is universally identified as intellectual “property”, is to be removed from the register such removal has the effect of divesting the registered proprietor of his property rights in the mark and hence a proprietor can be divested of his property rights in the registered mark only in the manner prescribed under the Act and the Rules. The principles enshrined in the Constitution of India applicable to tangible property would also apply to intangible intellectual property and such principles bar a person from being deprived of his property save in the manner prescribed by law.

The Court relied on the principles from an earlier decision in Union of India and Ors. vs. Malhotra Book Depot[ii] MANU/DE/0562/2013 wherein it was held as under:

  • that the Registrar could remove the Trademark from the Register and advertise the factum of removal in the Journal only after a Notice in Form O-3 had been issued;
  • that the removal of the registered Trademark from the Register entails civil consequences for the registered proprietor of the mark;
  • mere expiration of the registration by lapse of time and the failure of the registered proprietor of the Trademark to get the same renewed, by itself, does not lead to the conclusion that the same can be removed from the register without complying with the mandatory procedure of issuing notice in form O-3;
  • that the plea of the Registrar that the application for restoration and renewal of the mark was beyond the time prescribed in Section 25(4) and Rule 69 could not be accepted because the removal of the mark from the Register was not in terms of Section 25(3) r/w Rules 67 & 68 [Rules 58, 59, 60 and 61 of Trademark Rules, 2017 are pari materia Rules 64, 65, 66 and 67 of the Trademark Rules 2002];
  • mere lapse of the time does not result in its removal and Notice in Form O-3 (RG-3 under the new Rules) is required to be given;
  • since the Notice in Form O-3 had not been given prior to the removal of the mark, the application seeking its restoration and renewal could not be said to be barred by time.


The above decision casts an obligation on the Registrar of Trademarks to issue notice of renewal to the proprietor as required under Section 25 of the Act. Also, it is equally important for the registered proprietor to record and maintain accurate information concerning its address for service with the Registrar, as it will enable receipt of official correspondence from the Registry in a timely manner and not run the risk of being removed.

[i] MANU/DE/0998/2019

[ii] MANU/DE/0562/2013

[First published in Lexology on 3rd October 2019. To read Article in Lexology Click here]



The National Company Law Appellate Tribunal (“NCLAT”) vide its order dated 23.09.2019 passed in the matter of Vinayaka Exports and another Vs. M/s. Colorhome Developers Pvt. Ltd., overturned the decision of the National Company Law Tribunal, Chennai Bench (“NCLT”) dismissing an application filed by two financial creditors under Insolvency and Bankruptcy Code (“Code”) owing to the pendency of a civil suit and pre-existing dispute between the parties.


Two financial creditors who had lent a sum of Rs. 82 million and Rs. 20 million filed an application seeking commencement of insolvency resolution process on the corporate debtor M/s. Colorhome Developers Pvt. Ltd., who had also issued two promissory notes for the aforesaid sums. The corporate debtor had also executed a mortgage deed dated 05.06.2015 in favour of one of the financial creditors.

The corporate debtor claimed before NCLT that the aforesaid amounts were disbursed to the sole proprietorship of the managing director of the corporate debtor prior to its incorporation, and that it was not as a loan to the corporate debtor.

Further, it was brought to light that there are court proceedings such as criminal complaints filed by the corporate debtor and civil suits before various forums are pending between the financial creditors and the corporate debtor.


The NCLT observed that there are disputes between the financial creditors and the corporate debtor and there are proceedings against them in various forums in matters relating to the present petition. It also observed that, in the statement of accounts, the name of the sole proprietorship concern and the corporate debtor is used interchangeably, and that there is no segregation of the amounts paid by both the entities from which the liability can be drawn clearly.

For above reason, the Tribunal took that view that the petition is liable to be dismissed under Section 5(6) and Section 5(6)(a) of the IBC, 2016, construing the pending civil suit as pre-existing dispute in the amount of debt between both the parties.

Section 5(6) of the IBC, defines in an inclusive way the term “dispute”, to include a suit or arbitration proceedings relating to (a) the existence of the amount of debt; (b) the quality of goods or service; or (c) the breach of a representation or warranty.


The aggrieved financial creditors appealed before Appellate Tribunal, which dealt with the appeal in depth and relying on the promissory notes executed by the corporate debtor and also mortgage deed as security for the said debt, the NCLAT disagreed with the view of NCLT that there is no segregation of the amounts paid by the sole proprietorship and the corporate debtor, and held the existence of the debt that is due and that there is a default in repayment of the same.

The Appellate Tribunal read into paragraphs 27, 28, 29 & 30 of the Supreme Court decision in Innoventive Industries Limited v. ICICI Bank and Anr., wherein the Supreme Court has dealt in the great detail and clearly demarcated the difference between the criteria to be considered for admission of an application filed by a financial creditor and that by an operational creditor.

The NCLAT, while setting aside the order of NCLT, with directions to pass orders to admit the corporate insolvency resolution process on the corporate debtor, observed that it is only in an application filed by an operational creditor, can the corporate debtor raise the defence of the existence of a pre-existing dispute, or record of the pendency of a suit or arbitration, at the time of responding to the demand notice that is issued by the operational creditor. NCLAT also held that there is no provision for raising the defence of existence of such dispute by the corporate debtor in an application by a financial creditor, and hence the NCLT is not entitled to look into the same, and all NCLT is required to satisfy itself for admitting corporate insolvency resolution process on a corporate debtor in an application filed by a financial creditor is whether there is a debt that is due and payable, and that there has been a default with respect to the same.

[First published in Lexology on 19th September 2019. To read Article in Lexology click here]






Section 31D was introduced into the Indian Copyright Act, 1957 (the “Act”) in the year 2012. This Section was introduced in compliance with Article 11(2) and 134 of Berne Convention, Article 9(1) of the TRIPS Agreement and Article 15(2) of the Rome Convention (for sound recordings) and deals with statutory licensing for broadcasting of literary and musical works and sound recordings. Section 31D of the Act read with Rules 29 and 30 of the Copyright Rules 2013 enables broadcasting organisations to broadcast or perform any literary or musical works and sound recordings by issuing a prior notice of such intention to broadcast the said works and by paying royalty to the rights holder, as fixed by the Intellectual Property Appellate Board (IPAB).


Since the introduction of Section 31D in the Act, divergent views started emerging on the aspect of whether Section 31D covers within its ambit, statutory licensing vis-à-vis internet broadcast and streaming services as well. This was owing to the fact that the scheme of provisions under Section 31D read with Rules 29 and 30 of the Copyright Rules 2013 does not explicitly include references to the term “internet broadcasting” in the context of statutory licensing.

While the opinion of legal and industry experts on the matter seemed to be divided, the Department of Industrial Policy and Promotion (DIPP) through an office memorandum (OM) dated 5th September 2016, sought to clarify the scope of section 31D, by construing that the term ‘any broadcasting organisation desirous of communicating to the public’ as appearing under the said Section, may not be restrictively interpreted to cover only radio and television broadcasting and thereby also purported to include within its fold internet broadcasting and streaming services by attempting to read down the provisions of Section 31D along with the definitions of ‘communication to the public’ and ‘broadcast’. The said clarification was sought to be provided through the OM owing to the reason that the definition of “broadcast” read with “communication to the public” ex facie appears to include all kinds of broadcasts including internet broadcasting and streaming services.

In the above background, the recent launch of the audio streaming platform Spotify in India had once again brought the scope of statutory licensing under Section 31D of the Copyright Act into the limelight wherein Spotify made an application to the IPAB for seeking a statutory license on musical works and sound recordings from Warner Chappell Music Limited in relation to its operation of internet music streaming broadcast services. However, a recent interim order of the Bombay High Court in April 2019 in the matter of Tips Industries Ltd v. Wynk Music Ltd & Others, seems to put to rest the divergent views that had emerged on the subject matter, wherein the Bombay High Court categorically held that the OM lacked statutory validity and hence cannot override the provisions in Section 31D and further held that internet music streaming and broadcast services are not covered under the statutory licensing contemplated under Section 31D.


We analyse here the above judicial developments concerning the ambit of statutory licensing contemplated under Section 31D.

Warner Chappell Music Limited v. Spotify AB

The Swedish company Spotify Technology S.A has launched its audio streaming platform Spotify in India this year (2019). Prior to its launch in India, the company started negotiations with music companies including Warner Chappell Music Limited (WCM) for obtaining licenses over the various music labels on which WCM holds licensing rights. However, obtaining licenses from WCM was not a smooth ride for Spotify. Spotify was unable to strike a deal with WCM, and consequently the following events transpired:

  • Spotify invoked the provisions of Section 31D of the Act as the way out to secure the streaming and broadcasting rights over the music owned by WCM in its streaming platform in India and filed for a public notice under Sec. 31D with IPAB to invoke the statutory licensing provisions under the said section.
  • Spotify also deposited 5,28,000 Euros with the Copyright Office as an advance royalty in relation to the exploitation of such rights on its audio streaming platform in India.
  • WCM sought for an injunction at Bombay High Court to stop the exploitation of its music by Spotify inter-alia on the grounds that the provisions of Section 31D does not apply to internet broadcasting service providers.
  • The Bombay High Court passed an interim order whereby it directed Spotify to deposit 6.5 crores with the court and to keep a record of the use of WCM owned works, the advertisement and subscription revenue earned by Spotify until final disposal of the matter.
  • The Court also instructed Spotify not to proceed with IPAB application for issuing the statutory licensing for four weeks from 26th February 2019.
  • Immediately upon the interim order passed by Bombay High Court, Spotify launched its internet audio broadcast and streaming services in India that also included WCM owned works.

Tips Industries Ltd v. Wynk Music Ltd & Others

The Bombay High Court also recently ruled upon a very similar matter in the case of Tips Industries Ltd v. Wynk Music Ltd & Others (“Wynk”). Wynk, an internet audio streaming platform also recently invoked the provisions of Section 31D for grant of statutory licenses for internet broadcasting of the works owned by Tips Industries Ltd (Tips), when it failed to negotiate with Tips for securing the license over certain works. Tips filed an infringement suit against Wynk and also challenged Section 31D in Bombay High Court. One of the important issues that was considered in this matter was whether internet broadcasting and the rental and download option provided by Wynk in its platform comes under the definition of “communication to public” and thereby does statutory licensing regime under section 31D also cover internet streaming services. While the counsel of Wynk relied on the OM issued by DIPP, which clarified that the definition of “broadcast” included internet broadcasting also, the Court held that such OM of the DIPP lacked statutory validity and hence cannot override the provision in Section 31D.

The Court while issuing an interim injunction in favour of Tips held that Section 31D was an exception to copyright and must be strictly interpreted and further opined that statutory licensing under Section 31D applies only to television and radio broadcasting and not internet broadcasting. Though the above matter is yet pending for a final disposition, it is likely that a final judgement will flow from the principles contained therein.


In the light of the above statutory provisions and judicial interpretations that have flown therefrom, the Department for Promotion of Industry and Internal Trade (DPIIT) has now proposed an amendment only to the Copyright Rules and not the provisions of Section 31D, in order to widen the ambit of statutory licenses that are currently restricted to television and radio broadcasting. It will be interesting to see whether this will actually stand the test of law, given that the Bombay High Court has already observed that statutory licensing under Section 31D does not apply to internet broadcasting services.

In our view, there is an urgent need for the principal Act to also be amended to cover internet broadcasting services, rather than trying to stretch the existing law, via delegated legislations, to internet media and streaming services. Such an amendment needs to take into account the genuine rights of the copyright owners, and the larger public interest involved in communication of such works to internet users by the internet broadcast service providers.

[First published in World Intellectual Property Review on 19th September 2019. To read Article in WIPR click here]





Background and recognition of “first-to-use” principle

Indian trademark law follows the “first-to-use” principle and accordingly the rights of prior user of a trademark is recognised to be superior to that of a registered proprietor and even registered proprietors cannot interfere with the rights of an unregistered prior-user. This has been re-asserted by Indian courts in several judgements from time to time.

While undoubtedly a registered proprietor in India, enjoys exclusive rights over his trademarks and such registration also affords protection against counterfeiting and infringement, however, in order to claim such exclusivity and protection, the element of “Usage” of trademarks becomes vital not only for registration but also for enforcing one’s rights over infringing marks or while defending any cancellation petition filed against a trademark for alleged non-use. This article provides an insight into the aspect of importance of trademark usage in India from a statutory and judicial perspective.

Relevance of usage during trademark prosecution

Under the Trademarks Act (the “Act”), an applicant, of a trademark, is required to establish continuous usage of the trademark by submitting an usage affidavit along with evidence such as – advertisement, publicity materials, trade evidences, customer feedback, testimonials, etc.

Filing of usage related documents assists not just in establishing owner’s bonafide and prior usage rights over the trademark, but also the distinctiveness acquired by the trademark , thereby enhancing the ground for registering the trademark.

Judicial take-on what constitutes usage of trademarks

Courts and Tribunals in India have interpreted usage of trademarks in their various judgments, and an indicative list of what is considered as usage of trademark is provided hereinbelow:

  • Actual usage on goods and services;
  • When there is no actual use on goods or its sale, any promotional material can be construed as use;
  • In Hardie Trading Ltd. vs Addison Paint and Chemicals Ltd., the Hon’ble Supreme Court in 2003 analysed the aspect of “usage” under the Act and stated that “to the use of a mark in relation to goods, shall be construed as a reference to the use of the mark upon, or in any physical or in any other relation whatsoever, to such goods” and thereby held that use may be other than physical and it should not be merely limited to physical use on the goods or to sale of goods bearing the trademark.
  • Use of one of the associated trademarks equivalent to use of another;
  • Use of trademark for export trade as given;
  • Use of trademark by a registered user or through licensing;

However, an exception to the “first-to-use” principle is the doctrine of “Recognition of Well-known Trademarks”. In the landmark judgement of N.R. Dongre and Ors. Vs. Whirlpool Corpn. and Ors., the Supreme Court in 1996 recognised trans-border reputation enjoyed by a trademark proprietor despite lack of any sales and registrations of their marks in India.

Statutory risks associated with non-usage of trademarks

While demonstrating usage of the trademarks may seem to be a procedural requirement during trademark prosecution, it assumes greater significance during enforcement and cancellation proceedings vis-à-vis such trademarks.

The importance of continuous usage of a trademark is compounded owing to the fact that under Section 47 of the Act, where a trademark is not in continuous use for a period of 5 years from the date on which the trademark is entered in the register of trademarks (the “Register”), the registration of such trademark may be removed from the Register for non-use, based on an application by a third party. Accordingly, it is pertinent to note that if the trademark is being applied on a proposed to be used basis in India, it is imperative to commence using the trademark at the earliest to avoid such removal from the Register for non-use.


Thus, trademark protection in India requires owners to continuously use their trademarks by maximising their promotion and advertisement through all platforms. Most importantly, such continuous usage of trademarks also helps in protecting trademarks so as to ensure easier enforcement against infringement and counterfeiting.

[The article was authored by Ms. Srividhya & Ms. Nagalakshmi]

A well – informed board is a key to the success of any organisation. This is achieved with a correct combination of skill, talent, and experience. This is where the independent directors play a vital role in the success of the organisation by sharing their experience and knowledge.


The evolution of the concept of Independent Directors can be traced back to 1998, when the Confederation of Indian Industry (CII), under the chairmanship of Mr. Rahul Bajaj framed a task force to design a voluntary corporate governance code, viz., “Desirable Corporate Governance Code”, which highlighted the importance of having independent director on the Board of the company, and over the period of years was discussed by various committees and which resulted in subsequent amendments to Companies Act and listing regulations.


The report of Kumar Mangalam Birla Committee on Corporate Governance agreed that the “material pecuniary relationship which affects independence of a director” should be the litmus test for independence.

In the Companies Act, 2013, the concept of materiality has got codified to exclude remuneration that the independent director receives from the company and his business transactions with the company that is upto 10% of his income. Also, the materiality concept is not limited to the company, but extends to the company’s promoters, its subsidiaries, associate companies or holding company.


  • i. Remuneration –
    • – sitting fees – upto Rs.1 Lakh per meeting for attending the board and committee meetings.
    • – commission – upto 1% of the net profits of the company.
    • – The Board may take Directors and Officers Insurance for all the independent directors of such quantum of risks as may be determined by the Board of Directors

    It is pertinent to note that a person can be a director / independent director of upto ten public companies and in upto 8 listed companies.

  • ii. Liability
      An Independent Director shall be held liable only in respect of such actions of the company which had occurred:

    • a. with his knowledge;
    • b. attributable through processes of board of directors;
    • c. with his consent or connivance;
    • d. where he has not acted diligently


Responsibility walks hand in hand with capacity and power. Certain obligations on being an independent director are;

  • – The independent directors are to hold a meeting amongst themselves at-least once each year, where they meet without the presence of other directors; they are required to review the performance of non-independent directors and board as a whole including chairperson of the company;
  • – Assess the quality, quantity and timeliness of flow of information between the management and the board for effective performance of the Board;

Adhere to the code of conduct, laid down by the board.

The statute lays emphasis that an independent director should be a person who possesses adequate amount of skills and knowledge and expertise related to the company’s business. Recent amendment to the Companies Act (which shall come into force with effect from 1st December 2019), is a step to ensure that an independent director is a person of requisite knowledge and skill. Brief on how an independent director has to register his name in the data bank to act as an independent director is given below.

1 Authority to conduct the exam The Indian Institute of Corporate Affairs (“IICA”) at Manesar is designated to maintain databank of Independent Directors and conduct online proficiency examination.
2 Application by existing independent directors On or Before 28th February 2020 Make an application to IICA for inclusion of name in databank
3 Application by a person who intends to get appointed as independent director Before Appointment Make an application to IICA for inclusion of name in databank
4 Application for inclusion of name and time period At the option of the applicant One year
Five years
Life time
5 Online Proficiency Exam Within 1 year from inclusion of name in the databank. Pass an online proficiency exam conducted by IICA.
6 Pass Criteria 60 % or above
7 Number of attempts Within the period of one year from the date of inclusion of name in the databank There is no limit on the number of attempts.
8 Syllabus for the test Company Law, securities law, basic accountancy, and such other areas relevant to the functioning as independent director.
9 Consequence of not clearing the exam Name shall be removed from the databank and he cannot continue as an Independent Director.
10 Esemption from exam Any individual who has experience of 10 years or more as a Director or Key Managerial Personnel in a listed company or in an unlisted company which has paid capital of 10 crores or more.
Note: Such individual shall take steps for inclusion of his or her name in the databank.
11 Change in particulars of Directors Within 30 days of change in particulars Make changes through web-based framework.
12 Renewal of Application Within 30 days from expiry of original period of application Renewal can be made for further period one year, five years or life-time at the option of the director
13 Consequence of Non-renewal Name shall be removed from the databank and an individual cannot continue as an Independent Director.





The Government of India has notified the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 (hereinafter “New FDI Rules”), to supersede Foreign Exchange Management (Transfer of Issue of Security by a person resident outside India) Regulations, 2017 (erstwhile FEMA 20 Notification) and Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2018.

The said New FDI Rules is now the governing legislative framework for Foreign Direct Investments (FDI) in India w.e.f. 17th October 2019. It sets out distinction between Debt and Non-debt instruments, by defining what non-debt instruments are.

The “Non- Debt Instruments” is defined as

  • all investments in equity instruments in companies and LLPs;
  • all instruments of investment recognised in the FDI such as convertible debentures;
  • investment in units of Alternative Investment Funds (AIFs), Real Estate Investment Trust (REITs) and Infrastructure Investment Trusts (InvIts);
  • investment in units of mutual funds or Exchange-Traded Fund (ETFs) which invest more than fifty per cent in equity;
  • junior-most layer (i.e. equity tranche) of securitisation structure;
  • acquisition, sale or dealing directly in immovable property;
  • contribution to trusts; and
  • depository receipts issued against equity instruments.

The New FDI Rules is a welcome step to avoid the conflicts between various regulations, policies, guidelines etc. regarding the FDI and clearly sets out the rules for foreign investment in India under various sectors. In pursuance of the said New FDI Rules, the RBI has notified Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019 [”New Regulations”] w.e.f the same date as above, regulating mode of payment, remittance of sale proceeds and reporting requirements for investment in India by a person resident outside India for each Non-Debt Instruments including Convertible Notes [“CN”] issued by Indian Start-up Companies. The New Regulations also specifically lays down the reporting requirements for any downstream investment made by any Indian company qualifying as indirect foreign investment pursuant to the New FDI Rules.

The reporting requirements include filing forms including FC-GPR, FLA, FC-TRS, ESOP, Form CN etc., wherein the format, periodicity and manner of such reporting shall be prescribed thereunder or by RBI, if any required. All reporting shall be made through or by an Authorized Dealer bank, as the case may be. Any delay in reporting shall attract the late submission fee, which may be decided by RBI in consultation with the Central Government.

[First published in World Intellectual Property Review on 24th May 2019. To read Article in WIPR Click here]






Infringement of trademarks takes various forms such as counterfeits and cybersquatting. One another way of infringement is when a corporate name is identical with or too nearly resembles another trademark.

The provisions of sections 20 and 22 of the erstwhile Companies Act, 1956 was amended vide Trademarks Act, 1999, to recognise bona fide rights of registered trademark proprietors and to provide safeguards against infringements.

Section 20 provided for the government not to allow companies to be incorporated with names that closely resembled trademarks. Section 22 carried the intention further and empowered the government to pass orders either Suo moto or on application made by a registered proprietor, against companies that had been incorporated or had come into existence with a name similar to that of registered trademarks.

Position under Companies Act, 2013

With the coming into force of the Companies Act, 2013, sections 4 and 16 correspond to the erstwhile sections 20 and 22 of the previous act Section 4(2), empowers the Registrar of Companies (“Registrar”) to preclude companies from incorporation of or registration with names, the use of which constitutes an offence under any law.

Section 4 read with rule 8(2) of the Companies (Incorporation) Rules 2014 stipulates that where the name of a new company or an existing company that proposes to change its name, includes a trademark, then such corporate names are undesirable names and incapable of being reserved as a corporate name.

Prior to grant of approval for reserving a name, the Registrar conducts a search in the database of the Indian Trademarks Registry and when the proposed name is identical to a trademark on the record of the registry, the Registrar denies approval of the proposed name irrespective of the difference in the line of business activity.

The aforesaid process curbs incorporation or change of a company name that infringes on trademarks to a large extent. In addition, section 16 provides remedy to registered trademark proprietors to make an application to the government against a company incorporated/registered with a name identical or similar to its registered trademark, within three years of incorporation of or change of name of the company, and seek a direction for rectification of name where such company’s name is identical with or too nearly resembles a registered trademark.

Based on an order, the company shall take necessary corporate actions to change its name within a period of six months of such direction. The new act also has penal provisions for failure to comply with the direction and also for repeated defaults.

The new act has brought down the prescription to registered proprietors under section 16 to three years of the incorporation of or change of name of company, as against the five years of coming to the notice of the registered proprietor under the old act. The powers granted to the government here are delegated to the Regional Director, in the Ministry of Corporate Affairs.

Additional remedy

The power to seek rectification of company name under section 16 of the new act is an additional remedy and is without prejudice to registered proprietor’s right to file an infringement suit against infringing corporate name under section 29(5) of the Trademarks Act. Hence, even after lapse of the three years limitation period, a proprietor can file an infringement action under section 29(5) of the Trademarks Act.

For an infringement action to be successful under Section 29(5) the following three factors must co-exist:

  • The plaintiff’s mark is a registered trademark.
  • The defendant is using the plaintiff’s registered trademark as part of his trade name or business.
  • The defendant’s business is in respect of goods or services in respect of which the trademark is registered.

The above principles have been laid down and confirmed by various High Courts in Kamdhenu Ispat v Kamdhenu Pickles and Spices and Ors decided in 2010, Skipper v Akash Bansal and Ors decided in 2017 and Exxon Mobil Corporation and Ors v P.K. Sen decided in 2018.


Brand owners are granted rights under the realm of company law to safeguard their trademarks from being registered as a corporate name by third parties, and this can be pursued by them as an effective measure to thwart infringement.

[First published in World Intellectual Property Review on 4th April 2019. To read Article in WIPR click here]





Scope of liability of e-commerce service providers as ‘Intermediaries’ in the context of sale of counterfeit products under Indian Laws

The Indian B2C e-commerce market is growing exponentially and the rapid digitalization is fuelling its further growth. Most e-commerce platforms in India are a marketplace, and they are to deal with the menace of counterfeit or infringing products, and this article examines the scope of liability of e-commerce service providers in case of sale of counterfeit goods through their platforms.

The statutory provision that lays down the framework to decide the liability of e-commerce platforms is contained in Section 79 of the Information Technology Act, 2000. Section 79 is a provision that is applicable for `intermediaries engaged in transactions by means of electronic data interchange and other means of electronic communication and includes by reference ‘online-market places’. In this article, `intermediary’ and `e-commerce platform’ are used interchangeably.

Section 79 lays down the safe harbour principles exempting an intermediary in certain cases. The intermediary is not liable in two situations, viz: (a) if its function is limited to provide access to a communication system over which the information made available by third party is transmitted or hosted; (b) if it does not initiate or select the receiver of the information, and does not modify the information.

The intermediary is made liable if it is an active participant or is contributing in the commission of the unlawful act or where the intermediary fails to expeditiously take down information or data or link upon receiving information.

A review of the judgments on Section 79 shows that e-commerce platforms have been exempted from copyright infringement and violation of design rights when content has been uploaded by users.

In the context of sale of infringing or counterfeit products through e-commerce platforms, the courts have analysed the factors as to whether sale of counterfeit products amounts to ‘use’ of a mark under Section 2(2)(c) of the Trademarks Act, 1999, or ‘falsification of a mark’ or ‘false application of a mark’ under Sections 101 and 102 of the Trademarks Act, 1999, and when answered in the affirmative, leads to the e-commerce market place not being entitled to the exemptions granted under Section 79.

In this regard, the courts have held that the important test when an e-commerce platform is to be exempted from liability, is to determine that it does not have an active participation in the selling process in relation to the sale of counterfeit / infringing goods.

In Christian Louboutin SAS Vs. Nakul Bajaj and Ors., decided in 2018, the Delhi High Court enumerated about 26 tasks to determine whether there is an active participation by the e-commerce site. Some of them are:

  • Identification of the seller and providing details of the seller
  • Providing authenticity guarantees;
  • Providing quality assurance after reviewing the product;
  • Promoting the product amongst its dedicated database of customers;
  • Accepting an order on a particular payment gateway promoted by the platform;
  • Packaging the product with its own packing, instead of the original packing of the trademark owner or changing the packaging in which the original owner’s product is sold;

The above principle was followed by the High Court of Delhi, in other recent judgements too: L’Oreal Vs. Brandworld and Ors., Skullcandy Inc. Vs. Shri Shyam Telecom and Ors., both decided in 2018, and Luxottica Group S.P.A. & Anr Vs. Mify Solutions Pvt Ltd & Ors., decided in 2019 and held that if the business model of an e-commerce site responds in the affirmative to a large number of elements enumerated above and the 20 others, it crosses the line from being an intermediary to an active participant, and thereby become liable for infringement of trademarks in view of its active participation.

Thus, so long as an e-commerce platform is a conduit or passive transmitter of the records or the information, they continue to be intermediaries exempt from liability under the Information Technology Act. The true intent of Section 79 is to ensure that the liability of intermediaries is in line with globally accepted standards and to further digital trade and economy in India.

With e-commerce growing, the Ministry of Commerce and Industry, has now circulated a draft national e-commerce policy, that prescribes various guidelines and requirements to be adhered to by intermediaries in relation to listing and sale of products through their platforms, and this will also help in reducing counterfeit products on e-commerce market places.

[First published in Lexology on 28th February 2019. To read Article in Lexology click here]






A saying goes “Geography does not define you – love does”, but the recent Amendment issued by the Ministry of Corporate Affairs defines the company by its geographical location.

On 21st February 2019, the Ministry of Corporate Affairs (Ministry) has come up with geotagging of the registered office of every company in India.

As a part of the geotagging – where a company is required to provide the latitude and longitude of its registered office in a return to be filed with the Registrar of Companies, the following additional details are also required to be given

  • Details of the directors / key managerial personnel.
  • Details of the statutory auditor of the company
  • Details of the cost auditor (if applicable)
  • Photographs of the registered office, both inside and outside along with one director / KMP in the photograph

Companies are required to file the above information sought by 25th April 2019, failing which a fee of INR 10,000/- is required to be paid.


There have been earlier instances where fraudulent companies had filed with the Registrar, the address of their registered office in buildings under construction, and other connected locations. This led to the Registrar mandating any of the following documents to be filed, while intimating the location of their registered office:

  • Title deeds of the premises of the registered office, if the premises is owned by the company; or
  • Where premises is taken on lease, a notarized copy of lease/rent agreement along with a copy of rent paid receipt not older than one month;
  • Where there is no agreement for lease/rent,
    • A letter of authorisation from the owner or authorised occupant of the premises along with proof of ownership or occupancy authorisation, to use the premises by the company as its registered office; and
    • The proof of evidence of any utility service like telephone, gas, electricity, etc. depicting the address of the premises in the name of the owner or document, as the case may be, which is not older than two months.


The Government had in 2017 used data mining and struck off about one hundred thousand companies, from the Register. In the last few years the government is leveraging technology and geotagging has been used to tag various assets created under different welfare schemes of the government. There have been instances of houses built under welfare schemes which have been geotagged and few state governments have even geotagged trees planted under certain schemes. The present move of geotagging is expected to curb shell companies and going forward it will stop the proliferation of companies which have been used for money laundering.

[First published in Lexology on 27th June 2019. To read Article in Lexology click here]






In today’s competitive world, what sets businesses apart from the rest are their novel and exceptional ideas and thus, it is extremely important that there should be free flow of ideas that are capable of commercial exploitation in order to keep businesses going. While it is pertinent to share ideas to bring the change entrepreneurs foresee, many organisations, especially start-ups possessing novel ideas, based on which their businesses are built, are worried about the loss of competitive edge when their business ideas come in to the public domain for fear of plagiarism and idea theft. More often than not many organisations, especially start-ups, which possess such novel and innovative business ideas and delivery models are faced with an important question on whether such ideas qualify as an Intellectual Property that can be statutorily protected or registered under the various Intellectual Property Laws. The simple answer to that question is that while business ideas are indeed trade secrets that have an intrinsic Intellectual Property value but at present there are no provisions in any law in India to protect trade secrets and business ideas perse.

The present statutory regime in India, offer protection to marks, logos, devices etc., as trademarks [Trademarks Act, 1999]; scientific inventions are protected as patents [Patents Act, 1970]; literary works, art, artistic works, cinematograph films, music, photographs etc., have protection as copyrights [Copyrights Act, 1957]; shapes and forms of inanimate material objects are protected by industrial designs [Industrial Designs Act, 2000]; and VLSI designs are protected by the Semiconductor Integrated Circuits Layout DesignAct,2000. Thus, any protection with respect to the business ideas has to be within the aforesaid statutes.

However, it is not that the law does not provide for any protection to businesses possessing unique and novel ideas and in this article we will analyze the ways and means available to organisations to protect their business ideas under the present statutory regime prevalent in India.

In this regard a specific discussion and understanding of the Copyright Act of 1957 (“Act”) becomes essential. Under the Act, expression of an idea in any tangible form or medium is capable of being protected. This principle has been upheld and enforced by various courts time and again in matters relating to protection of an idea under the Act, even as recent as in the year 2018 by the Delhi High Court in an appeal challenging an order of the Trial Court in the matter of Sanjay Kumar Gupta Vs. Sony Pictures Networks India P. Ltd. AIR (2018) Delhi 169.

Analysis of the relevant statutory provisions

Although, the Act does not explicitly provide that the ideas can be protected per se, the said principle can be implied by reference to the following provisions of the Act, which have been interpreted by the courts while dealing with cases relating to ideas and their protection as a Copyright in India:
a.Section 13(1) of the Act clearly lays down that the copyright shall subsist only in original literary, dramatic, musical and artistic works, cinematographic films and Sound recordings. Besides the above works, the other works in which copyright can exist are live shows or performers rights and broadcasting rights as provided under Sections 37 to 39A of the Act.
b.Section 14- A combined reading of Section 13 (hereinabove referred) with Section 14 of the Act, which enumerates the meaning of the Copyright, directs us to the underlying principle that copyright shall necessarily subsist only in a tangible form such as literary work, sound recording, dramatic, artistic works, live shows/performers’ rights et al, as prescribed under this Act.
c.Section 16 of the Act expressly clarifies that there cannot be a copyright in any work except as provided under the Act.
d.Section 51 of the Act states that a Copyright is infringed inter-alia when any person without a licence granted by the owner of the copyright or the Registrar of Copyrights under this Act or in contravention of the conditions of a licence so granted or of any condition imposed by a competent authority under this Act does anything, the exclusive right to do which is by this Act conferred upon the owner of the copyright.

These provisions have been the subject matter of interpretation by Indian courts in various Copyright infringement matters, and the courts have laid down various judicial principles from time to time in this regard. Before we look at a few case laws, it is necessary to understand some of the important principles formulated by Indian courts while dealing with copyright infringement matters in India as under.


This principle was formulated by the courts to ensure that the manifestation of an idea (i.e. an expression) is protected rather than the idea itself. The basic principle underlying the Idea-Expression dichotomy is where the courts have to draw the line between the ideas and expression of an idea, thereby to identify first as to what may constitute idea in a particular work and what is an expression of idea where the originality resides. However, such expression must be specific, which can include particular arrangement of words, designs or other forms which has been documented. Hence, it is to be understood that the Act does not protect an idea per se, but the expression of such an idea in any tangible form is recognised for protection under the Act.The expression of an idea in a tangible form is the underlying principle of the Act, and is the basic pillar relied upon by Courts in dealing with copyright matters.


This doctrine propounds that where the idea and expression are intrinsically connected and that the expression is indistinguishable from the idea, copyright protection cannot be granted. The doctrine of merger provides that when the expression is the idea, and vice-versa, and there is only one way to express the underlying idea, the idea will merge with the expression as to make them indistinguishable. Consequently, the expression becomes non-copyrightable. Applying this doctrine courts have refused to protect the expression of an idea that can be expressed only in one manner, or in a very restricted manner, because doing so would confer monopoly on the idea itself.


The following are the tests/principles considered by Courts in order to decide as to what would constitute an infringement:

  • Substantial copy

    In case of any copyright infringement, the copyright owner must prove that the infringer’s work is “substantially similar” to that of the owner’s work. Hence, the infringement test involves two important components. First, did the defendant actually copy the plaintiff’s work? And, secondly whether the copied elements are of sufficient importance under the original work that entitles the copyright owner to file an infringement action. Any resemblance between the owner’s work and the infringer’s work would not necessarily imply an instance of infringement of the owner’s work, although it may play a role in proving infringement.

  • Access

    The aspect of access to the original work of the copyright owner is also relevant in determining an infringement. The rationale behind this is that given the sufficient opportunity that the infringer had, to copy the original work in addition to the striking similarity between the two works, the evidence in hand should be indicative of copyright infringement. However, if the copyright owner is unable to show evidence of access, the court would still construe infringement, if there are striking similarities between the original work and infringing work.

  • Audience Test

    To establish infringement, the copyright owner should demonstrate that any audience would find the expression in the infringer’s work substantially similar to the original work. This principle of test is from the perspective of a third person, or a layman, the two works should seem so substantially similar that as a layman they would not be able to distinguish between the two.

Analysis of relevant case laws

A.In a landmark judgement of R.G Anand VS M/S. Delux Films & Ors. (1978) AIR 1613, the Supreme Court while dealing with the issue of copyright protection categorically laid down the principle that- “There can be no copyright in an idea, subject matter, themes, plots or historical or legendary facts and violation of the copyright in such cases is confined to the form, manner and arrangement and expression of the idea by the author of the copy-righted work, amongst other principles with respect to infringement of a copyright.”

B.In Beyond Dreams Entertainment Pvt. Ltd.(plaintiff) vs. Zee Entertainment Enterprises Ltd.(defendant) 2015(4) ALLMR 518, the Plaintiff developed a concept for a TV show which was reduced to concept notes. Thereafter, the Plaintiff approached the Defendant to produce the same and subsequently, the Defendant announced the launch of a new serial which the Plaintiff alleged, was entirely based on his concept notes. The Bombay High Court while dealing with the said matter, held that the elements of expression in the Plaintiffs’ concept notes which are protectable under copyright law are copied into the Defendants’ work, and it is not the basic plot or idea of the story, but actual concrete elements that make up the total sequence of events and relationships between major characters that are plagiarized. Thus, the fact that the Plaintiff had reduced his idea to a tangible form, i.e. the concept note, was recognized by the Court as a work in which copyright subsists and hence can be afforded the protection under the Act.

C.Similarly, in the case of Anil Gupta V. Kunal Dasgupta AIR (2002) Delhi 379– commonly known as the Swayamvar Case, the Delhi High Court laid down that an idea per se has no copyright. But if the idea is developed into a concept fledged with adequate details, then the same is capable of registration under the Act and that the Laws must ensure that persons who create an idea / concept or theme which is original are rewarded for their labour.

D.Another interesting case on this aspect was dealt with by the High Court of Karnataka in the matter of The Academy of General Education Vs. SMT. B. MALINI MALLYA, In the High Court of Karnataka at Bangalore- ILR 2008 KAR 1074, MIPR 2008 (1) 373 and MANU/SC/0146/2009 (On Appeal). The brief facts are that one Dr. Karnath had authored a literary work on a Yakshagana ballet (Folk Dance), which he called Yaksharanga, and the same was performed by the Academy of General Education without prior consent of the copyright owner and thus the copyright owner claimed an infringement of such literary work. The copyright owner had in support of the infringement claim stated that there was substantial research done and detailing that had been expressed in such literary work on the Yakshagana ballet such as the Raga, Thala, scenic arrangement, cosmetics, appearance of the actors on the stage, use of various musical instruments, gesture, posture and facial expression, duration, ornaments etc. The High Court held that the performance of the Yakshagana ballet without the consent of the copyright owner was an act of infringement of the copyright of the literary work and considered the following principles in arriving at the said judgement:

  • The Copyright Act is not concerned with the originality of ideas, but with the expression of thought and in the case of ‘literary work’, with the expression of thought in print or writing.
  • The question is not whether the materials which are used are entirely new and had never been used before, but the true question is whether the same plan, arrangement and combination of materials have been used before for the same purpose or for any other purpose.
  • There cannot be copyright in mere scenic effects or stage situations which are not reduced into some permanent form.

E.The Delhi High Court in its recent judgement in Sanjay Kumar Gupta Vs. Sony Pictures Networks India P. Ltd (2018) reiterated the principle that a concept obviously cannot be a subject matter of copyright because a concept has to be brought into the form of a literary work or dramatic work or musical work or artistic work or cinematographic work or sound recording or a performance/performer’s right or live show and only where after there will exist a copyright in the work. However, the case did not turn in favour of the plaintiff-appellant for other material reasons such as lack of originality in the concept and the fact that the said concept in question has already existed in the public domain.


Thus, it can be inferred from the above case laws and judicial principles that copyright protection extends only to expressions and an idea per se cannot be copyrighted but the expression of that idea in a tangible and concrete form, can be subject to copyright protection. Many people can have the same idea; however, the presentation of the idea may differ and the manner in which it can be expressed may decide whether the same qualifies for a copyright protection.

Further, the extent of efforts, skill and intellectual labour involved in detailing of a work assumes great significance that would help a copyright owner to establish a prima facie case of infringement against the infringer and such detailing has been acknowledged and recognised by courts in determining the rights of the copyright owner in an infringement suit.

[First published in World Intellectual Property Review on 18th February 2019. To read Article in WIPR Click here]






Trademark enforcement in every country has its complexities, and India is no different. In India, courts are vested with territorial jurisdiction, and within such jurisdictions, there are hierarchical courts with pecuniary jurisdiction.

This article is aimed at providing a quick understanding of matters relating to choice of jurisdiction available to an IP owner in light of statutory and judicial principles.

Earlier position

Before the present legislation—the Trademarks Act, 1999—the aspect of geographical jurisdiction of courts for trademark infringement and passing off actions was covered only under section 20 of the Civil Procedure Code, 1908 (CPC). Section 20 of CPC required institution of suits in the court having territorial jurisdiction of the place where the defendant resides; or carries out business; or works for gain; or where the cause of action arises. This provision continues in the statute book to date.

Additional forum of convenience

The Trademarks Act, 1999 introduced an additional forum for convenience of brand owners to initiate trademark infringement suits. As opposed to instituting a suit in the place where the defendant resides or carries out business, section 134 of the act enabled a registered trademark owner to institute a suit for infringement in a court that has jurisdiction over the place where the registered trademark owner resides or carries out business.

However, the jurisdiction relating to filing of a passing off suit would still be determined under section 20 of CPC, where such actions will have to be instituted in the place where the defendant resides or carries out business; or at the place where the cause of action arose.

Carrying out business

The term ‘carrying on business’ was construed by companies to be any place where they had a place of business and led them to initiate infringement suits at places where they had subordinate offices, sometimes inconveniencing the defendant. The Supreme Court of India in 2015 put this to rest in its decision in Indian Performing Rights Society Limited v Sanjay Dalia, explaining the interplay between section 134 of the act and section 20 of the CPC.

The court in this case said that the convenience of the registered trademark owner is the intent of section 134, and the causing of inconvenience to parties must be prevented. For a company, its principal place of business should be construed as the place where it ordinarily carries out business and, hence, it can institute a suit for infringement either at the court having jurisdiction over the place where its principal place of business is situated; or at the place where the cause of action arose.

This position was followed by the High Court of Delhi in Ultra Home Construction v Purushottam Kumar Chaubey & Ors in 2015, and again in Burger King Corporation v Techchand Shewakramani, decided on August 27, 2018. The courts in these judgments laid the rules relating to geographical jurisdiction for initiating suit for infringement and/or passing off in four scenarios under section 134 of the act.

Scenario 1:

If the plaintiff has a sole office and the cause of action arose at a different place, the place for initiating the suit for infringement is the court having jurisdiction over the sole office.

Scenario 2:

If the trademark owner has a principal office at one place and a subordinate or branch office at another place, and the cause of action arose at the place of the principal office, the venue for initiating an infringement suit is the court having jurisdiction over the principal office, not at the subordinate office.

Scenario 3:

Where the plaintiff has a principal office at one place and the cause of action arose at the place where its subordinate or branch office is located, the venue to commence a suit for infringement is the court having jurisdiction over the subordinate office, not the principal office.

Scenario 4:

If the cause of action arose at a place other than the place of the principal office and the subordinate office, the venue for instituting an infringement suit is the place of the principal office.

In all of these scenarios, a suit for passing off can be instituted either where the cause of action arose or where the defendant resides or carries on business as per section 20 of CPC.


These decisions interpreting the statutory provisions have brought clarity on the issue of choice of jurisdiction with respect to trademark infringement suits and passing off actions. With commercial courts being set up under a separate legislation, it brings into being specialised courts for trying matters related to trademarks. These judgments should enable companies to determine the appropriate jurisdiction for enforcement and protection of their brands/trademarks in India.

[First published in Lexology on 7th December 2018. To read Article in Lexology Click here]






India acceded to the Madrid Protocol for the International Registration of Trademarks (“Madrid Protocol”) and the same came into force on the July 8, 2013 in India. Trademark laws and other IPR laws are very important legislations that have a significant impact on the socio-economic and business climate in a country and the accession by India to the Madrid Protocol has undoubtedly added thrust to India’s growth story in the past few years. It is a recognized fact that India has been one of the fastest-growing economies in the world over the past decade.

Transnational corporations exploring to increase their business footprint in India have been largely benefitted by India’s accession to the Madrid Protocol and this is apparent from the fact that there has been a steady raise in the International Applications designating India under the Madrid Protocol. Not only has this increased multi-national companies from outside India filing trademark applications in India but this has also triggered Indian entities looking to expand their business presence outside India to reap the benefits of such unified system of international filing of trademark applications. Prior to India’s accession business houses had to largely depend upon the traditional system of filing either national applications or convention applications based on bilateral and reciprocal arrangement treaties that were time consuming. In this article we will discuss the various factors that a business house needs to take into account while filing trademark applications in India under the Madrid Protocol.

Though the Madrid System has simplified the trademark registration process in terms of time and cost, however, one should be aware of certain important aspects of the trademark law as well as the procedural aspects followed in India in order to reduce the chances of an application receiving provisional refusals from the Indian Trademarks Registry (“Indian TMR”) that could lead to significant delays in the process of registration of a trademark in India.

Are you using appropriate tool for conducting the Trademark Search in India?

While selecting the search tool, it has to be ensured that the results as thrown by the tool not only covers the similar trademarks that are already registered with the TMR, but it also covers the similar marks that are pending for registration. For an instance, the search results provided by the EUIPO’s TM View Search Tool, which is linked with the Indian TMR database, covers only the registered trademarks and not the trademarks that are removed due to non-renewal or pending for registration. Hence, be cautious while selecting the search tool for conducting the trademark search in India to avoid provisional refusal under Sections 9 and 11 of the Trademarks Act, 1999 (“Act”) and also opposition from the third parties. In this regard it is strongly advisable to run a preliminary search in the online database of the Indian TMR maintained in the portal with the help of a local attorney.

Check whether your Trademark attracts any of the Absolute Grounds for Refusal:

As per the Indian Trademarks Act, if a trademark is non-distinctive and/or descriptive, it falls under Absolute grounds for Refusal pursuant to Sections 9(1)(a) and 9(1)(b). However, if your Trademark has acquired distinctiveness by extensive usage in India well before the date of Application or the trademark has attained well-known status in India, the Trademark shall not be refused registration as per proviso to Section 9(1) of the Act.

Indian TMR allows co-existence of identical Trademark under same class:

Is your Trademark similar to the Trademark(s) already applied or registered in the same relevant class under which you are proposing to register?

  • The objection under Section 11 can be resolved by obtaining consent letter from the proprietor of the similar marks under the same relevant class.
  • By adducing documents proving honest, bonafide and concurrent usage of the mark.
  • By providing specific description of goods or services in the Application to differentiate your list of goods or services from that of the existing similar Trademarks.

In this context it is strongly advisable to conduct a pre-application search in India as this will help the applicant strategies the filing of the application appropriately after understanding the various issues that may probably be faced by a trademark once it is filed in India that may potentially also help in avoiding unnecessary costs and delays at a later point of time.

How to avoid provisional refusal in respect of description of goods and services?

The WIPO “Madrid Goods & Service” tool facilitates us in understanding the acceptance of the description of goods or services under relevant classes in the respective country in order to avoid provisional refusal. However, the said tool does not cover India’s list of acceptable goods or services. Like the USPTO and other IP Offices, India also has its own list of acceptable goods and services entries “TM Class” in line with Nice classification and the same can be accessed through the link

As the Indian TMR does not accept general class headings under the Nice Classifications and also the terms that are too broad or vague, it is advisable to check the proposed entries with the said ‘TM Class’ and accordingly amend the goods or services, without broadening the scope, in the International Application to avoid provisional refusal.

Wider Protection by registering a Mark without limiting its colours:

In India, if a Trademark is registered without limitation of colours (i.e., in black & white version), the registration extends for such trademark with any combination of colours. It is advisable to provide the basic Application number wherein the trademark is applied or registered in black & white while designating India in order to avail comprehensive protection.

How to claim usage in India when there is no provision in the International Application regarding usage date?

In India, ownership of a trademark is determined only on a ‘first-to-use’ basis. We observe that most of the trademarks published by the Indian TMR under the Madrid System in the Trademark Journal reflects the usage date as “Proposed to be used”. Is that due to Applicant’s or Attorney’s interpretation on Indian Trademarks Act, 1999, that the date of usage can be updated at a later date subsequent to registration of the trademark in the register of Indian TMR. Following are the facts that the Applicant should be aware in respect of usage date while designating India:

  • If the Applicant has inadvertently registered his trademark with the usage date as “Proposed to be used”, the same cannot be rectified at a later date upon registration despite the submission of adequate documents along with the Affidavit with the Indian TMR. A fresh Trademark Application with the actual usage date has to be filed with the Indian TMR to register the trademark with updated information.
  • As per the practice adhered by the Indian TMR, the date of usage as mentioned in the Trademark Application should be prior to the date of filing of Application. Though the Indian Trademarks Act does not preclude anyone from updating the usage date related information in respect of a Trademark, the Indian TMR, as a practice, does not allow the amendment of usage date in its records, if the proposed amended usage date is subsequent to the date of Application.
  • Amendment of usage date while renewing the registration of trademark is not applicable. Mere filing of requisite form along with the fee would suffice for renewal of registration in India irrespective of the fact that whether the trademark is actually in use in commerce or not.

In order to avoid above consequences, it is advisable to follow the below mentioned process to bring on record your actual commencement of usage before registering the Trademark under Madrid System:

  • Filing of “Declaration of Intent to use” along with the International Application. Applicants must provide information specified on the MM2 form (International Application) or the MM4 form (Subsequent Designation)
  • Checking the status of the International Application through Madrid Real Time Status to track the date on which the WIPO would be notifying the designated countries in respect of Application.
  • Checking the status of the Application in the Indian TMR database through the link
  • Once the status of the Trademark appears as “Marked for Examination”, immediately the requisite form needs to be filed through your Attorney in India to amend the usage date (if it is prior to the Application date) along with the Affidavit and evidences proving usage of the trademark in India.

It is pertinent to note that the aforesaid process is applicable only if the commencement of usage of the trademark in India is prior to the date of Application and sufficient documents proving the commencement of usage in India could be adduced along with the aforementioned form. On perusal of the Form and supporting documents, the Indian TMR may either directly allow the said amendment and change the usage date in its records or may fix a hearing to allow the same.

Priority Claim:

In order to claim priority in India, it is essential that the Madrid application is filed well before the six months’ time period so that the International Bureau forwards the international application to the national office within the said period, failing which the national office will not consider the priority claim and move such application without priority.

Be vigilant if the Application is under Examination Stage:

International Registrations Designating India (IRDIs) are examined at the time when national applications with the filing date same as the date of international registrations of such IRDIS, are examined. If the Indian TMR raises any objection under the absolute and/or relative grounds for refusal or directs to provide or file any information or

documents during the examination stage, the time period for replying to the provisional refusal or examination report will be one month. The Applicant may seek extension of time to file Reply letter by submitting requisite form with the Indian TMR. However, only if the Registrar is satisfied with the reasons or circumstances provided therein, the extension of time shall be allowed accordingly. If the reply letter is not filed within the stipulated time period, the Application shall be deemed to be abandoned as per the Act.

As the reply to the provisional refusal must be filed through a local representative in India and also coupled with the fact that there is no prescribed time period until which the extension can be sought as per the Act, it is advisable to engage the Attorney in India immediately on receipt of Provisional Refusal or examination report to file the appropriate reply letter within one month.

Publication and Registration

If no objection for protection of the international registration is found at examination stage or if after considering the response of the holder or after a hearing, the international registration is proposed to be accepted for protection, the particulars of the international registration shall be published in a separate part of the Trade Marks Journal and will be open to third-party opposition for a period of 4 months. On expiry of the 4-month opposition period and in absence of any opposition, the mark shall be granted protection by the Indian Trademarks Registry.


International designations are opposed in exactly the same way as national marks, that is, by filing form TM-O, together with a statement of grounds of opposition and a fee by the opponent himself (having address in India), or through a registered trademark agent or an advocate having address in India, who would represent and work on behalf of the opponent, before the Trade Marks Registry. If an opposition to protection of the international registration is received within the prescribed period after publication of an international registration in the trademark journal, the TMR shall communicate the provisional refusal based on opposition to the WIPO and dispose the opposition as per the relevant provisions of the Trade Marks Act & Rules and notify the final decision thereafter to the IB of the WIPO.

Renewal, Changes & Corrections in The International Registrations

The renewals of international registrations and amendments and corrections are done by the international bureau of the WIPO and the same shall be notified to the Indian Trademark Office by the WIPO. The registration of a mark at the International Bureau is for a period of 10 years. It is then further renewable for a further 10 years upon payment of the required fees. In case there is any objection in the corrections or amendments in the international registrations where India has been designated, the TMR office notifies its objections and in rest of cases the TMR office updates its records pertaining to international registrations concerned.

[First published in World Intellectual Property Review on 12th August 2019. To read Article in WIPR click here]





PQ: “Brand owners in India have alleged that Google has, through its AdWords service, allowed third parties to bid on trademarks.”

The confluence of IP and anti-trust laws throws a challenge to trademark owners in the realm of brand protection, and this has often led to a conflict between these two facets of law.
While IP laws grant exclusivity to IP owners, anti-trust laws inter alia define the limitations of such exclusivity.
In this article we discuss the aspect of law and the related judicial precedents in India that has arisen owing to conflict of such laws, especially in the context of AdWords search services provided by web search engine providers such as Google.

A case of abuse?

Google, through its AdWords service, allows advertisers to sponsor any “keyword” for advertisement of their products and services. Such process of sponsoring is hereinafter referred to as bid or “bid or bidding as the context may so require and the advertiser so bidding is referred to as bidder. When such a keyword is entered as a search string on Google’s search engine, the sponsored advertisement of the advertiser appears predominantly on the search results page.

Google also allows such keywords to be bid by multiple users and in such a process, the highest bidder pays Google every time the sponsored advertisement web page link is clicked by internet users.

Problems arise when a bidder starts bidding on keywords of business competitors who are the real trademark owners of such keywords. When such proprietary marks are bid upon as keywords, the brand owner’s webpage does not appear first on the Google search page. Instead, the highest bidder of the keyword appears as a sponsored advertisement in the search results, rather than the brand owner.

Brand owners in India have alleged that Google has, through its AdWords service, allowed third parties to bid on trademarks. Due to this, competitors have had an opportunity to ride on the goodwill of trademark owners, thereby hampering fair competition. Such practice was alleged as amounting to Google’s abusing its dominant position in online web and search advertising markets by imposing unfair conditions upon trademark owners in violation of section 4 of the Indian Competition Act, 2002.

Judicial precedents

This aspect was examined by the Competition Commission of India (CCI) in v Google and Ors. In this matter Google allowed bidding on the keywords “Bharat Matrimony”, which was the registered trademark of the complainant before the CCI. The CCI held that the subject keywords were descriptive of the services and hence in this context the AdWords service enables a user to include a trademarked keyword in its query.
Consequently, the user is presented not only with ads from the trademark owner but also with a broader range of ads, including ads from the trademark owner’s competitors, and hence the AdWords service promotes competition and enhances user choice. Therefore Google was not abusing its dominant position by allowing such bidding.

The CCI further opined that it is not within its domain to pronounce upon trademark infringement issues. The above decision was arrived at by the CCI in the context of a descriptive trademark being the subject matter of bidding.

In another matter, the High Court of Madras in Consim Info v Google India decided in 2012, observed that where Google, through its AdWords service, allows bidding on any coined and arbitrary words, the concerned trademark holders can claim exclusivity on such keywords, and that allowing bidding on such uniquely coined word will be a case of contributory infringement by Google.

Further, in another matter Dr Sabu Mathew v Union of India, decided in 2017, the Supreme Court observed that search service providers such as Google and Yahoo should take necessary actions in order to curb misuse of their advertisement service, wherein any advertisement that purports to violate any law should be immediately removed.

From the above decisions it can be inferred that where any keyword is a coined or an arbitrary trademark then any bidding allowed by Google on such keywords will be held to be in violation of the Trademarks Act, 1999 and hence a case of contributory infringement against which brand owners have a remedy before a court of law in India.

[First published in World Intellectual Property Review on 30th November 2018. To read Article in WIPR click here]






India has had one of the fastest-growing economies over the past decade and this has triggered a spurt in the growth of cross-border trade and commerce, with various transnational corporations establishing a business footprint here.

The growth of businesses and brands has ushered in a proactive approach that aids multinational companies in protecting their well-known trademarks in India against infringement and passing off by third parties.

This facet of trademark law pertaining to recognition and protection of well-known marks carrying trans-border reputation has been the subject matter of judicial scrutiny by IP courts in India from time to time in the context of infringement and passing off actions.

In order to harmonise national trademark laws with its international obligations under the Paris Convention dealing with protection of well-known trademarks, the Indian Trademarks Act, 1999 gives statutory recognition to the principle of well-known trademarks.

Section 11(9) safeguards trans-border reputation of trademarks by laying down that a mark can be considered well known in India even if it has not been used in India, or has been neither applied for nor registered in India. Further, section 11(10) requires the Registrar of Trademarks to protect a well-known mark against identical or similar trademarks in the process of registration. These statutory principles have been recognised by Indian courts. They have repeatedly held that traders or service providers operating on a regional level cannot take advantage of a trademark that has acquired trans-border reputation merely because it has not been registered under a particular class in which the former is dealing with.

Court cases

One of the most notable cases is Daimler Benz v Hybo Hindustan, where the High Court of Delhi in 1994 injuncted the defendants from using the mark ‘Benz’ in relation to manufacture and sale of underwear.

The High Court of Delhi in the N.R. Dongre And Ors v Whirlpool Corporation And Anr case in 1995 considered the concept of trans-border reputation of trademarks for the first time in detail and recognised the doctrine of ‘trans-border reputation’, holding that a trader could obtain an injunction in a country where it was not trading, in order to protect its reputation on the basis of extensive advertisements and publicity.

This was also affirmed by the Supreme Court of India. A host of decisions have been propounded by the courts on the basis of doctrine of trans-border reputation in favour of various well-known brands such as Carrefour, Honda, Caterpillar, Philips, and Volvo.

However, in the recent case of Toyota Jidosha Kabushiki Kaisha v M/S Prius Auto Industries Limited in 2017, involving Japanese car maker Toyota, the Supreme Court applied the doctrine of trans-border reputation in relation to the trademark ‘Prius’ of Toyota. It concluded that the trademark had not acquired a substantial degree of goodwill and trans-border reputation in the Indian market so as to be recognised as well known in India; thus, the passing off action filed by Toyota failed.

With the advent of the internet and technology development, which have diluted international boundaries, the recognition of the doctrine of trans-border reputation of trademarks in India by the Indian courts is a step in the right direction that protects the interests of transnational corporations and brand owners who are looking to expand their business presence. Such decisions are in line with the judicial trends prevalent in other developed nations on the aspect of protection of well-known trademarks based on their trans-border reputation.

In another positive change, the Indian Trademark Rules were amended in 2017 to prescribe a formal statutory procedure to make an application to the Registrar of Trademarks for recognition of a trademark as well-known in India. While the new procedure to seek a determination of a trademark as well-known may seem to eliminate the cumbersome requirement to have a trademark declared as well-known only through legal proceedings, it nevertheless increases the onus on the Registrar of Trademarks to exercise its discretionary powers in arriving at such a determination.

The amended rules, however, lack clarity on certain material aspects, such as timelines for disposing of applications, timeline and procedure for filing of objections by third parties, and timeline and procedure for appeals, if any, from the decision of the Registrar.

It would now be interesting to see how various brand owners and companies take advantage of this statutory provision to seek a determination of their trademarks being well-known—a decision that could help them in judicially enforcing their proprietary rights during infringement and passing off actions.

Vendor payments and demand notice under Insolvency and Bankruptcy Code, 2016 (the “Code”)

More often than not, businesses are faced with issue of a vendor or supplier, providing or rendering low or deficient quality goods or services and as a natural consequence, payment of invoices in respect of such deficient supply of goods and rendering of services gets disputed with a vendor and thereby the invoices remain unpaid either in full or in part.

On most occasions, the reasons for the non-payment of the invoices are internally recorded by the procurement team and the finance team may book the invoice but not make payment against the same nor convey the reason for the non-payment to the vendor.

Under the Code, if a sum of money in excess of Rs. 1 lakh is not received by an operational creditor (vendor), then he is entitled to send to his customer a demand notice in Form 3 of the Code and allow a period of 10 days for the customer to either pay the outstanding amount or to show if there is any `pre-existing dispute’ (i.e) a dispute that was in existence even prior to sending the demand notice.

Pre-existing dispute

Companies on receiving the Form 3, write to the vendor and give reasons for not effecting payment and on most occasions, the response to the Form 3 is the first instance when the company puts on record the reasons for the payment denial.

NCLT does not consider such responses to be a `pre-existing dispute’ and looks at the extent of correspondence that has been done for denial of payment prior to the response to such demand notice.

Information Utility

Recently, the first Information Utility viz: The National e-Governance Services Ltd., under the IBC has commenced its operations, which will serve as the repository of legal evidence relating to debt due by companies. – the Information Utility will accept, store and make readily available authenticated financial information submitted by creditors, which will help in establishing defaults as well as verify claims under the Insolvency and Bankruptcy Code, 2016 expeditiously, so as to facilitate completion of the insolvency resolution transactions under the Code in a time-bound manner.

The Information Utility (“IU”) has established a process, whereby a vendor of the business uploads to the IU the details of its invoices due to it and these details are sent to the customer for confirmation within a time bound manner. The customer is required to either confirm the invoice or should raise a dispute.

Vendor and Customer

It is essential for a company to adopt different processes, from the perspective of the Code, for dealing with payment due to a vendor and for payment due from a customer – which if necessary would enable the company to proceed against the customer under the Code.

Protection from Vendor action

The reasons for denial of payment towards the vendor invoices could be many. In order to be able to show the existence of a `pre-existing dispute’, it is important that the company correspond with the vendor and write to them in detail (email or snail mail or in the manner specified in the supply agreement, if entered into), and document therein the reasons as to why they are unable to effect payment for the invoice(s). When a vendor invoice comes for confirmation from the Information Utility and the company were to dispute the invoice, then it would have to mark a dispute over it and thereafter write to them as stated above, if not already done.

When such reasons are recorded, then the only methodology for the vendor to claim the amount is through a civil suit or through arbitration if there is an arbitration agreement. The NCLT will then consider it as a `pre-existing dispute’ under the Code and would thereby not admit the application, as the Code is not an enactment for recovery of money, but only a mechanism for resolving insolvency of a company.

Proactive action for successful redressal under the Code in respect of Payments due from Customer

When goods or services are rendered and even if there is no dispute in connection with the quality of the goods or services supplied, some customers do not pay. The reason for the non-payment in such cases is, either the customer has cash flow issues or the customer defaults in making payment for no specific reason. It is the second category of customers (i.e) those who do not make payment for no specific reason despite there being no defects/issues in the supply itself, against whom, one would like to take action under the Code.

One of the documents that can be enclosed as a part of the demand notice under the Code, is a certificate from an IU confirming that there is no record of dispute in connection with the operational debt. The ability to make a claim on a customer under the Code, when relationship sours, increases if there is a record of the amount with the IU and there is no record of dispute in respect of the same.

It may be a good practice for companies to start filing with the IU, details of all its invoices due from the customer company (not available if the customer is not a company under the companies act) and send it to them for their acceptance through the IU, in addition to its usual practice.


While filing of operational debt under the Code with an IU is not mandatory, the process of submitting details of debt with an IU would assist businesses to initiate Insolvency proceedings under the Code on its customers when the relationship between the two turn sour.

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