from the chairman · 6. reasoned decisions or speaking orders the principle of audi alteram partem...

March, 2015 3 NIRC-ICSI Newsletter

From the Chairman

Professional Development Programs:

On 21st February, 2015 NIRC-ICSI organised one day seminaron the topic "MERGERS & ACQUISITIONS - A Catalyst forCorporate Growth" at Hotel Intercontinental EROS, New Delhi.We have invited expert speakers to deliberate on the subject.Approx. 300 Members have attended the seminar. I take thisopportunity to express my sincere gratitude to the guest speakersfor sharing their expert knowledge with the delegates of theseminar.

Members Assistance Committee:

Friends this year NIRC-ICSI has constituted Members AssistanceCommittee for the purpose of resolving various professionalissues and queries of the members. This Committee has organisedan Interactive Session amongst members on 23rd February, 2015at NIRC premises for discussing professional issues faced by themembers. I take this opportunity to thank the members whoparticipated in the interactive session and also take thisopportunity for requesting other members to participate in thesesessions with their suggestion and ideas.

On 1st March, 2015, The Institute jointly with NIRC-ICSI hasorganised a National program on "Talk on Union Budget" atHotel Intercontinental EROS, New Delhi. Mr. Pawan K. Kumar,IRS, Commissioner of Income Tax was the Chief Guest on theoccasion and Mr. Gourav Vallabh, Professor of Finance, XLRIJamshedpur, Dr. Girish Ahuja, Eminent Tax Expert. Mr. VLakshmikumaran, Founder & Managing Partner,Lakshmikumaran & Sridharan, Attorneys were the guest speakerson the occasion. Members grabbed this golden opportunity oflistening to expert speakers of the program in large numbers andthe program was a grand success. I take this opportunity toexpress my sincere gratitude to the guest speakers of the programfor sparing time and sharing their expert knowledge with thedelegates.

On 5th March, 2015 NIRC-ICSI has organised Holi Milan atNIRC premises. Shri Hazari Lal Chauhan, Member LegislativeAssembly of Delhi, Patel Nagar Constituency was the Chief Gueston the occasion and Shri Ankush Narang, Vice President, AamAdmi Party Youth Wing was the Guest of Honour on the occasion.Kavi Sammelan was the special attraction of the celebrations.Members' present enjoyed the celebrations to the fullest. Thesetypes of social programs provide opportunity to members todevelop the feeling of belongingness and brotherhood.

On 7th March, 2015 NIRC-ICSI celebrated International Women'sDay and has organised a conference on the topic "WOMENSAFETY & EMPOWERMENT" at Scope Complex, Lodi Road,New Delhi. Hon'ble Justice Ms. Mukta Gupta, Judge, Delhi HighCourt was the Chief Guest, Dr. Pinky Anand, Additional SolicitorGeneral of India was the Guest of Honor and Ms. Ketki Arora,COO, Femella Fashions was the Guest and Ms. Ranjana Agarwal,Director, ICRA Ltd. was the Keynote speaker on the occasion.There was galaxy of expert speakers on the subject. The programwas very well appreciated by the members and the students. Iwish to place on record my sincere thanks & gratitude to theguests and guest speakers of the program for sparing time andsharing expert knowledge with the delegates of the program.

On 15th March, 2015 NIRC-ICSI organized a Study Session onthe topic "Secretarial Audit" at Technia Institute of AdvancedStudies, Delhi. CS Ranjeet Pandey, Central Council Member, ICSIwas the Guest Speaker on the occasion. I take this opportunity tothank Mr. Pandey for sparing his time and sharing his intellectwith the delegates of the session.

Campus Placement:

On 2nd March, 2015 NIRC-ICSI organised Campus Placementat NIRC premises for the students searching for the training. Wehave got amazing response both from the recruiters and thestudents. About 32 corporates and PCS /Law firms participatedin the campus. Through this message, I take this opportunity torequest you to kindly join hands with NIRC for the benefit of thestudents and in turn for the growth & development of ourprofession by participating in the forthcoming campus placementsorganised by NIRC. I take this opportunity to thank all therecruiters for participating in the campus placement.

24*7 Helpdesk:

NIRC-ICSI in its endeavour to provide best possible services tovarious stakeholders is regularly taking various new initiatives.In this direction, I am very happy to inform you that NIRC hasstarted 24*7 helpdesk service for the various stakeholders of theInstitute. Through this initiative the queries of the stakeholderscan be resolved 24*7 with a MIS report being generated to observethe action taken on various queries. To avail the services youmay dial 011-49343000. I request you to take maximum benefitof this service and give your valuable suggestions for furtherimprovements.

In order to provide whatever help is sought by members, NIRC-ICSI is also in the process of creation of dedicated email id forreceiving the queries of members - [email protected] take this opportunity to request the members to send theirqueries and concerns on this id and we shall endeavour to resolvethe same.

Forthcoming Programs:

On 27th March, 2015 NIRC-ICSI jointly with the Institute isorganising a National Seminar on "Secretarial Audit" at Hotel LeMeridien, New Delhi. On the same day after the NationalProgramme, NIRC-ICSI is organising HR Conclave with theobjective to provide a platform to the CEO/HR Heads ofcorporates to interact with leading Company Secretaries andcome out with stimulating ideas where HR Professionals andCompany Secretaries can work together to assist the Board forefficient and effective governance of the Company. This HRconclave will also give an opportunity to members to know aboutthe multi faced role a Company Secretary plays in the changedparadigm of corporate world.

NIRC will also organise Master classes for the members and asoft skills development program for the students during themonth of March, 2015. Study Sessions are also being organizedat different corners of Delhi. The details of these programs arepublished hereinafter elsewhere in the newsletter for yourreference. I request you to kindly join these programs in largenumbers in order to keep the morale and motivation level high ofthe organising team to conduct more and more qualityprofessional development programs.

I look forward for your continued involvement & support for thebetterment & development of the profession. I request you tokindly feel free to interact with me at [email protected].

With kind regards,

Yours sincerely,

CS NPS Chawla

Chairman, NIRC-ICSI

[email protected], [email protected]: 9958535300


Corporate Membership


CSBF


Announcement

CORPORATE COMPLIANCE EXECUTIVE CERTIFICATE FOR STUDENTSThe Institute launched the ‘Corporate Compliance Executive Certificate’ in terms of Chapter IVA (Regulation 28A &28B) of the Company Secretaries Regulations, 1982 on 4th October, 2013.

ELIGIBILITY FOR AWARD OF CORPORATE COMPLIANCE EXECUTIVE CERTIFICATE

A person who –

• is currently registered as a student of the Company Secretaryship course of the Institute;

• has completed at least one group of the Intermediate/Executive Programme Examination of the CompanySecretaryship Course, and

• has completed a training of Six months under Regulation 28A of the Company Secretaries Regulations, 1982,which may include skill oriented practical /class room training for two weeks.

PROCEDURE

An eligible student may apply for award of Corporate Compliance Executive Certificate by submitting an applicationin specified format (available on the website of the Institute www.icsi.edu ), after making payment of a fee of ¹ 2000(two thousand only), either in cash (at counters of the Institute across the county) or by way of Demand Draft infavour of ‘The Institute of Company Secretaries of India’ payable at New Delhi.

STATUS OF HOLDER OF CORPORATE COMPLIANCE EXECUTIVE CERTIFICATE

• The student who is awarded Corporate Compliance Executive Certificate of the Institute shall be entitled to usethe descriptive letters “Corporate Compliance Executive”.

• The grant of Certificate of Corporate Compliance Executive Certificate shall not confer on the CorporateCompliance Executive the rights of a member, nor entitle him to claim membership of the Institute.

VALIDITY OF CERTIFICATE

• The Corporate Compliance Executive certificate is valid for a period of three years (financial years) and isrenewable on completion of four Programme Credit Hours (PCH) and payment of requisite fee as the Councilmay determine from time to time.

OTHER DETAILS

• The student shall have to complete the course of Corporate Compliance Executive Certificate including thetraining requirements within the registration period.

• The student having awarded the Corporate Compliance Executive Certificate may continue to pursue the regularCompany Secretaryship course if he so desires.

• Except to the extent provided in this Chapter IVA (Regulations 28A & 28B) of the Company SecretariesRegulations, 1982 or as decided by the Council from time to time, regulations in Chapter IV and VI relating to‘Registered Students’ and ‘Examinations’ shall mutatis-mutandis apply to the ‘Corporate Compliance ExecutiveCertificate Course’.

• A student after having awarded the Corporate Compliance Executive Certificate shall secure four ProgrammeCredit Hours (PCH) for renewal of Corporate Compliance Executive Certificate.

• There shall be no exemption from training.

Brochure and application form are available at CCEC section on website of the Institute www.icsi.edu. For queriesplease write at [email protected] or contact on phone number 011-45341049.


COMPANY SECRETARIES BENEVOLENT FUNDMEMBERS ENROLLED REGIONWISE AS LIFE MEMBERS OF THE COMPANY SECRETARIESBENEVOLENT FUND DURING THE PERIOD 20/01/2015 TO 20/02/2015

S.No. Name Mem. No.

1. SH. JATIN PHUTELA FCS - 7759

2. MR. BIPIN VIVEK ACS - 354763. MR. VINOD CHANDRA MAMGAI ACS - 301184. MR. DEEPAK KUMAR VERMA ACS - 372055. MR. JAYANT SHANTARAM JOSHI ACS - 385056. MS. CHARU JINDAL ACS - 384637. MR. CHANDER SHEKHAR ACS - 384558. MR. SURENDRA KUMAR BEHERA ACS - 384879. SH. R P SHARMA ACS - 187

10. MR. PREM KANT JHA ACS - 3645011. MR. YATISH BHARDWAJ ACS - 2993212. MR. PRAKASH ACS - 3848913. MS. PAYAL SONI ACS - 3779514. MS. BHARTI ADWANI ACS - 3862015. MS. SHIKHA SHARMA ACS - 31183

The Latin maxim audi alteram partem, one of the mostcherished and sacrosanct principles of law, has evolvedfrom three simple Latin words to mean that no personshall be condemned, punished or have any property orlegal right compromised by a court of law withouthaving heard that person. Simply, this principle meansthat "hear the other side too", or "hear the alternativeparty too". It is a principle that no person should bejudged without fair hearing in which party is given theopportunity to respond to the evidence against them. Itis considered a principle of fundamental justice or equityin most legal systems. This principle is sine qua non ofevery civilized society.

It covers various stages through which administrativeadjudication passes starting from notice to finaldetermination and broadly includes:-

1. Right to notice

2. Right to present case and evidence

3. Right to rebut adverse evidence

(i) Right to cross examination

(ii) Right to legal representation

4. Disclosure of evidence to party

5. Report of enquiry to be shown to the other party

6. Reasoned decisions or speaking orders

The principle of audi alteram partem wasacknowledged by the Apex court in the landmark caseof Maneka Gandhi v. Union of India, 1978 SCR (2) 621,wherein the Court held as follows:

"These observations would justify the authority toimpound the passport without notice but before anyfinal order is passed the rule of audi alteram partemwould apply and the holder of the passport will have tobe beard. I am satisfied that the petitioner's claim thatshe has a right to be heard before a final order under s.10(3) (c) is passed is made out."

After the abovementioned observation of the ApexCourt, the rule of audi alteram partem has become anintegral part of the Indian Judicial System.

Contributed by: Mr. Adarsh Tripathi, Advocate

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

AUDI ALTERAM PARTEM

Legal Lingo


Article

We have received the following Queries from a bank

The following credit facilities have been granted toone of our constituents for acquiring rated debtsecurities in primary & secondary market. Primarysecurity stipulated is pledge over debt securitiesrated "A" and above from any of the SEBI registeredrating agency

Nature of Facility Limit

Line of Credit Rs.100.00 Crores

Also note the following Drawing Power Mechanismfor the said facility

1. Any bond which is not traded for more than 60days will not be reckoned for Drawing Power.2. Drawing Power to be derived based on thevalue of the bonds on monthly basis.3. Drawing Power to be reinstated on everytransaction of bond pledge/unpledge.4. The disbursement will be done as DemandLoans for a specific period either as bullet or intranches as per the requirement of our constituents.

Considering the recent development in CompaniesAct, we request you to advise us on the following

a) Whether on such a pledge, charge is requiredto be registered with ROC?b) If, yes please advise registration of chargemechanism, considering the DP mechanismallowed in the account and also advise advantageof the pledge been registered with the ROC.c) Is any other precautions/safeguards necessaryto protect Banks' interest?

For better understanding of the requirements orotherwise on the need for registering a charge onpledge of debt instruments, we trace below theprovisions of the earlier Act viz., the Companies Act,1956 and the parallel provisions in the CompaniesAct, 2013.

Background

(i) Companies Act, 1956 was very clear vide S. 125that a pledge was outside the ambit of S. 125 and,therefore, no charge was to be registered on a pledge.

(ii) By a clarification in the year 1960, the Dept. ofCompany Affairs as MCA was then known, hadclarified that a pledge need not be registered withthe RoC. However, in the same breath it wasmentioned that if such registration is insisted upon,then the RoC has to register subject to a conditionthat all subsequent modifications should also besought to be registered.(iii) It was a general practice then that pledges byand large were not sought to be registered by thefinanciers for the simple reason that the possessionof the security in the case of a pledge was alwayswith the financier.(iv) Section 77 of the Companies Act, 2013 hasreplaced S.125 of the Companies Act, 1956. Whilethe Companies Act, 1956, vide section 125(4)(e) gavein detail those charges to which Section 125 wouldapply and had specifically excluded charge onpledge on any movable property, Section 77 of theCompanies Act, 2013 is now bereft of such details.(v) However, the draft rules which was hosted bythe MCA on its site for public comments, had videRule 6.1(3) strangely retained the provisions ofsection 125(4)(e) of the Companies Act, 1956 givinga message that the intention of the legislature andthe government of the day was to exempt pledgefrom the clutches of charges.(vi) Again, the Companies (Registration of Charges)Rules 2014 which came into effect on 1.04.2014 hastotally dropped Rule 6.1(3) of the draft rules andthe substantive portion of section 77 remainedgiving directions that every company has to seekregistration of charge on any of its property, assetsor any of its undertakings whether tangible orotherwise. No exemption has been given for apledge. Further, if the company does not seek suchregistration, the Act has sought to penalize thecompany and its officers severely formulated underthe relevant rules.

(vii)It is all the more strange that item no.8(a) of FormNo. CHG-1 formulated under the relevant rulescontains an appendix against the item "MovableProperty" including the words "(not being pledge)"

*Views expressed by the Author are solely his own view and the Firm, NIRC of ICSI does not accept any responsibility.

CHARGE ON PLEDGE OF DEBT SECURITIES–CS S.Srinivasan*


Article

In view of what has been stated above, it was notvery clear whether the framers of the final rules haveconsciously omitted to give in detail those assetswhich are to be under charge for the purpose ofregistration and that whether pledge remainsoutside the ambit of charge.

Normally, any statute that is enacted is preceded bya "Statement of Objects and Reasons" for introducingor amending a particular section in the Parliament.This helps in understanding the intent of the law inletter and spirit. Such statement of object andreasons while enacting the Companies Act, 2013 didnot contain any intent on the subject of registrationof the charges on pledge. However, the Report onthe Standing Committee on Finance in theParliament on Companies Bill, 2009 has filled in thevacuum and has been the base for the present Act.

Accordingly, Clause 69 of the Bill introduced aclause by which all charges were to be compulsoryregistered with the RoC without any exceptionswhich has by and large been incorporated in thepresent Act.

It would be interesting to note that the suggestionsof the Confederation of Indian Industries thatBanker's lien, other statutory liens and pledge ofshares be specifically excluded from registrationrequirements was turned down by the Ministrygiving reasons "that the provisions in the Billpropose to provide that every charge on the propertyof the company should be registered with the RoC toenable the Registry to have complete picture aboutsolvency and credit worthiness of the company. Theprovisions of the existing Act on this matter havebeen reviewed in the Bill keeping in view therecommendations of the Irani Committee and otherinputs".

The Irani Committee has not specially exempted"Pledge" from the ambit of registration of charges.Therefore, it appears that there has been a consciousimplicit omission of the exemption of registration ofcharges on pledge in the Companies Act, 2013, aswas exempted by the Companies Act, 1956, then.

When such was the intention at the time ofintroduction of the Bill, we fail to understand why:

(i) the Draft Rules retained the exemption whichwas given in the Companies Act, 1956; and

(ii) the Form No. CHG-1 contains an appendix toitem no.8(a) in respect of "Movable Property"including the words "not being pledge".

Be that as it may, and keeping what has beendescribed above in the backgrounder as a prelude toour discussion, we hereby address each of yourqueries.

1. Your Query:

Whether a pledge of Debt Securities which are tradedby your constituent on a demat mode or otherwisein the primary and secondary market and acceptedby you as securities for a line of credit in the form ofshort term loan of Rs 100 Crores granted to them isrequired to be registered with the RoC?

Our Reply:

Yes. In view of what has been stated in thebackgrounder, it seems that the intention of thelegislature appears to be a conscious implicitinclusion of pledge in the basket of securitiesnecessary to be registered with the RoC for reasonsthat it would enable the Registry to have a completepicture about solvency and credit worthiness of thecompany.

Therefore, the Charge on Pledge of Debt Securitiesin your favour has to be registered with RoC just likeany other charge.

Again, such registration would complete the exerciseof "Perfection". In law, "Perfection" relates to theadditional steps required to be taken in relation to asecurity interest in order to make it effective againstthird parties and/or to retain its effectiveness in theevent of default by the grantor of the security interest.Generally speaking, once a security interest iseffectively created, it gives certain rights to the holderof the security and imposes duties on the party whogrants that security. However, in many legal systems,additional steps --perfection of the security interest-- are required to enforce the security against thirdparties such as a liquidator. Hence, the need forRegistration with the RoC

2. Your Query:

If yes, please advise registration of chargemechanism, considering the DP Mechanism allowedin the account and also advise advantage of pledgebeen registered with the RoC.


Article

Our Reply:

Mechanism:

Operating on the DP mechanism by your constituentis a dynamic phenomenon wherein the extent ofcharge on the debt instruments tends to vacillate. Itis impractical to register a charge on the pledge of adebt instrument or modify/satisfy the same for everytransaction even as it is hypothetically the idealthing to do. However, though as per your sanctionedterms, the disbursement will be done as DemandLoans for a specific period either as bullet or intranches as per the requirement of your constituents,the registration of the charge on the pledge ofinstruments should not be based on disbursementbut on the company creating a charge on the overallline of credit of Rs. 100 Crores.

Charge registration in the case of Pledge of debtsecurities as in the instant case is similar toregistration of charge on working capital limits ornormal term loan advances. That means every timethe working capital reduces or increases within theoverall limit, particulars of modification is notsought to be registered. Similar is the case with theterm loan, when particulars of modifications are notsought to be registered as and when there is areduction in the outstandings.

Advantages:-

For your bank

The biggest advantage of registering a charge on apledge with the Registrar of Companies is publicnotice.

S.80 of the Companies Act, 2013 categorically statesthat where any charge on any property or assets of acompany or any of its undertaking is registered u/s77, any person acquiring such property, assetsundertaking or part thereof or any share or interesttherein shall be deemed to have notice of the chargefrom the date of registration.

For the Company

By erring on the right side (if one takes that stand)by registering the charge, the Company and itsofficers can avoid penalties prescribed under the Actwhich are quite severe.

3. Your Query

Is any other precautions/safeguards necessary toprotect Bank's interest?

Our Reply:

The following are the precautions/safeguards whichyour bank as chargeholder must take:

a. Ensure that there is a power in theMemorandum of Associations for the Company topledge its securities.b. Ensure that the Company has passed anappropriate Board Resolution to borrow monies andto give authority to pledge the securities and alsoauthority to the Company's officials to instruct theDP for pledging and unpledging the securities.Ensure that e-form MGT 14 has been filed with theRoC.c. Ensure that the Company has passed anappropriate Member's resolution to borrow moniesin excess of its paid-up capital and filed e-form MGT14 with the RoC.d. Ensure that a search of record of charges inrespect of your constituent as on date is conductedto ascertain if there are existing charges in favour ofany other lender prior in time on the same securitiesthat are being pledged with your bank, howeverremote such possibility may be.e. As per RBI guidelines, loan or advances canonly be made on the security of the company's assetsthe market value of which should not be at any timeless than the amount of such loan or advances.Therefore, your bank has to monitor yourconstituent's account on a continuous basis suchthat the market value of Debt Instrument which aretraded does not go below Rs. 100 Crores at any givenpoint of time (Sec. 5(n) of the Banking RegulationsAct, 1949)f. Ensure that the Company has executed anappropriate "Agreement for Pledge of Securities".Stamp duty is payable as per the Stamp Act asapplicable in the State in which the agreement isexecuted.g. Ensure that while filing form no. CGH-1, itemno.8(b) in column "others" is filled up to indicatepledge along with the nature of the document.h. Ensure that in case the total credit limitsenjoyed by the company exceed Rs. 50 crores a VigilMechanism is set up by the company and details ofthe establishment of such mechanism is displayedin the company's website, if any, and also in therelevant board's report.


Earlier, the concept was of promoting 'Made in India', i.e.use of products and services Made in India. But eversince, the Modi led BJP-Government/Regime has comeinto power, the new buzzword is 'Make in India'. Makingan India of our dreams is what probably is what the hopeand target of is.

What exactly is 'Make in India'?

'Make in India' is an initiative of the Government of India,to encourage companies to invest in the manufacturingsector in India. It was launched by Prime Minister, ShriNarendra Modi on 25 September 2014. Prime Minister Sh.Modi had hinted towards the ini t iat ive in hisIndependence Day speech of 15 August 2014.

The major objective behind the initiative is to focus on25 sectors of the economy for job creation and skillenhancement. Some of these sectors Some of thesesectors are automobiles, chemicals, IT, pharmaceuticals,textiles, ports, aviation, leather, tourism and hospitality,wellness, rai lways, auto components, designmanufacturing, renewable energy, mining, bio-technology,and electronics. The initiative hopes to increase GDPgrowth and tax revenue. The initiative also aims at highquality standards and minimizing the impact on theenvironment. The initiative hopes to attract capital andtechnological investment in India.

Image Source: http://www.makeinindia.com

AND IT WAS A 'MAKE IN INDIA' BUDGET…

Under the initiative, brochures on the 25 sectors and aweb portal were released. Before the initiative waslaunched, foreign equity caps in various sectors had beenrelaxed or removed. The application for licenses was madeavailable online. The validity of licenses was increasedto 3 years. Various other norms and procedures werealso relaxed.

Foreign Direct Investment India has already marked itspresence as one of the fastest growing economies of theworld. It has been ranked among the top 3 attractivedestinations for inbound investments. Since 1991, theregulatory environment in terms of foreign investmenthas been consistently eased to make it investor-friendly.

Intellectual Property Facts The Indian government hastaken several ini t iat ives to create a conduciveenvironment for the protection of intellectual propertyrights of innovators and creators by bringing aboutchanges at legislative and policy level.

In addition, specific focus has been placed on improvedservice delivery by upgrading infrastructure, buildingcapacity and using state-of-the-art technology in thefunctioning of intellectual property offices in the country.This measure has resulted in sweeping changes in IPadministration within the country.

New Initiatives The Make in India program includes majornew initiatives designed to facilitate investment, fosterinnovation, protect intellectual property, and build best-in-class manufacturing infrastructure.

National Manufacturing The need to raise the globalcompetitiveness of the Indian manufacturing sector isimperative for the country's long term-growth. TheNational Manufacturing Policy is by far the mostcomprehensive and significant policy initiative taken bythe Government. The policy is the first of its kind for themanufacturing sector as it addresses areas of regulation,infrastructure, skill development, technology, availabilityof finance, exit mechanism and other pertinent factorsrelated to the growth of the sector.

Source: Make in India Website

http://www.makeinindia.com/

Article

–CS Reema Jain*

*Views expressed by the Author are solely his own view and the Firm, NIRC of ICSI does not accept any responsibility.


Backed by campaigns to boost the Indian economy, theindustry and investors have had very high expectationsfrom Budget, especially given the pro-business stepswhich were taken up by the new government in the last 9months of their tenure till date. The economic activity atpresent is highly influenced by the reforms expected fromthe Narendra Modi-led NDA government and a majoradvantage is that the investor sentiments has grownhighly optimistic, basis the boost to the manufacturingsector and opening up of avenues for businesses andskill development. Business confidence is also high, andas the industry had expected real reforms from and bythe government and which had already been made clearby the vision document of the Modi led NDAgovernment. This was made even more clear and wasfurther justified with the announcement of Skill India andMake in India initiatives.

The Budget has indeed been the ideal starting point forbreathing life into the prime minister's dream of makingIndia a world-class manufacturing hub, where bothmultinationals and Indian corporations make - and makemore - in India. Reforms to ease environmental clearancesand a move towards single-window clearances ofprojects; fresh export promotion policies; and reductionsin excise duties coupled with exemptions, where some ofthe basic agendas and have been incorporated andbrought forward into the arena by Mr. Finance Ministerin this Finance Bill laid by him on February 28, 2015.

The recent Budget has proposals that are expected tohelp manufacturing units cut costs as well as access creditand skilled manpower.

Specific Proposals towards Make in India in the Budget

1. Reduction of customs duty on inputs and parts.

2. The broad emphasis on making it easy to do

business and infrastructure.

3. Dealing with Black Money and introduction of

Benami Property Transaction Bill.

4. Customs duty cuts on 22 items that will make it

cheaper for Indian companies to import parts

to manufacture products

5. A higher duty on importers of commercial

vehicles, from 10% to 20%, so as to protect

domestic makes and give them a thrust.

(However, those vehicles imported in

completely knocked-down condition will

attract 10 per cent as before.)

6. Facilitating cheaper technology transfer to

small businesses by more than halving the rate

of income tax on royalty and fees for technical

services to 10%.

7. Recasting excise duty structure on certain

goods so as to to boost the manufacture of

products such as tablet PCs and leather

footwear.

8. Launch of National Skills Mission to

consolidate skill initiatives spread across

several ministries.

9. Deen Dayal Upadhyay Gramin Kaushal Yojana

to enhance the employability of rural youth

10. Proposal to set-up MUDRA Bank (Micro Units

Development Refinance Agency) to ease out the

difficulties of small businesses in accessing

credit.

11. Tax breaks for Alternative Investment Funds

12. The standard ad valorem rate of duty of excise

(that is, Cenvat) is being increased from 12 per

cent to 12.5 per cent. This only means that other

rates of duty like six per cent or 2.5 per cent in

different chapters also will not attract education

cess.

13. The deferment of GAAR (General Anti-

Avoidance Rules).

14. The clarity on non-applicability of minimum

alternate tax (MAT) on foreign institutional

investors

15. Pass-through status for alternative investment

funds (AIFs)

Article


16. A proposed new bankruptcy law, by doing

away with SICA and BIFR

17. The proposed reduction in taxation of companies

from 30% to 25% over the next 4 years.

18. Policy stance favoring investments in productive

assets such as equities (by encouraging pension

savings), and away from assets such as gold.

19. Measures to curb the use of cash in real estate

transactions and the general effort to stamp out

the use of black money

Some other piece of good news towards 'Make in India'

Tax Free Bonds are back?

As expected one of the key areas of focus this year wasinfrastructure spending. Along with an incremental

expenditure of Rs.70,000 crore by the government in

infrastructure projects for 2015-16, the finance ministerproposed establishing National Investment and

Infrastructure Fund with an annual flow of Rs.20,000 crore.

In another attempt to boost the infrastructure sector,finance minister has proposed to bring back the tax-free

bond.

Tax-free bonds are secured, redeemable, non-convertible

debentures issued by government entities to individuals

and institutional investors to mobilize funds needed forprojects in the infrastructure development sector. These

are long-term in nature with maturity periods ranging from

10 to 20 years and the interest earned on these bonds istax free for the holder.

The interim budget of 2014, the last one for the Congress-

led government, was silent on these bonds. We haven'tseen fresh money being raised through these bonds so

far in FY15. The proposed issue of such bonds in Budget

2015 can restart this product. Investors

looking for regular income will find use for these bonds.

Foreign investors can bring in large funds for these bondsbut since they may have to pay tax on these bonds in

their own countries, the interest from them isn't high.

Infrastructure Hogs the Limelight

Clear direction to improve ease of doing business and

develop infrastructure. Sustained commitment to housingwill boost demand for dwelling units, and rationalization

of REIT operations will help ailing real estate companies

improve cash flows. New projects in roads, ports, railwayswith new public-private partnership models and with

clearances in place, will revive interest and widen base of

construction firms. It will also improve demand for capitalgoods, cement and steel.

However, there were certain sectors/ industries whichfailed to however, go forward on the Make in India front.

These included the defence sector, Gem & Jewelry and

Luxury & Lifestyle. Despite all the above, and a high rateof service tax of 14% along with an extra 2% towards

Swachh Bharat Cess, burdening the tax-payer, it though

shall have an immediate impact on the finances and monthlybudgets of every household, it shall however, go forward

in streamlining towards the upcoming GST regime w.e.f.

April 1, 2016.

"2015 Budget will further reignite our growth engine,signalling the dawn of a prosperous future."

- Narendra Modi

Prime Minister Narendra Modi lauded and applauded theBudget, calling it a 'progressive, positive, practical,

pragmatic and prudent' one. The Budget 2015 had a

distinct focus on farmers, youth, poor, neo-middle classand the 'Aam Nagrik'. It delivers on growth, equity & job

creation, Bankruptcy law, Accidental insurance, Wealth

Tax Abolishment, Moving towards GST, FMC mergingwith SEBI. It is in light of the positives brought forward

by it, one which will take our economy closer to

Development, Magnanimous Development!

Article


Compliance Checklist

COMPLIANCE CHECKLIST FROM 1ST MARCH TO 10TH APRIL, 2015Compliance Checklist

Central Excise Related Compliance

S. No. Activities Sections/Rules/

Clauses, etc.

Acts/Regulations

etc.

Compliance

Due Date

To whom to be

submitted

1. Last Date for payment of Excise

Duty Non SSI units (February)

*(in case of Payment through

Internet banking)

Rule 8 Central Excise

Rules, 2002

05th

March

*06th

March

Central Excise

Authorities

2. Monthly Return of information

relating to Principal Inputs

(February, 2015) (Form No. ER-6)

Rule 9A CENVAT Credit

Rules, 2004

10th

March Central Excise

Authorities

3. Filing of Return of Central Excise

and Cenvat Credit for the month of

February, 2015 (Form No. ER-1)

(Non SSI Units)

Rule 12 / Rule

9(7)

Central Excise

Rules, 2002/

CENVAT Credit

Rules, 2004

10th

March

Central Excise

Authorities

4. Monthly Excise return by EOU for

the month of February, 2015

(Form No. ER-2)

Rule 17(3) Central Excise

Rules, 2002

10th

March

Central Excise

Authorities


Duty Non SSI units (March)


Rules, 2002

31st March Central Excise

Authorities


Duty SSI units for the Quarter

ended 31st March


Rules, 2002

31st March Central Excise

Authorities

7. Monthly Return of information

relating to Principal Inputs

(March, 2015) (Form No. ER-6)

Rule 9A CENVAT Credit

Rules, 2004

10th

April Central Excise

Authorities


and Cenvat Credit for the month of

March, 2015 (Form No. ER-1)

(Non SSI Units)

Rule 12 / Rule

9(7)

Central Excise

Rules, 2002/

CENVAT Credit

Rules, 2004

10th

April

Central Excise

Authorities

9. Monthly Excise return by EOU for

the month of March, 2015 (Form

No. ER-2)

Rule 17(3) Central Excise

Rules, 2002

10th

April

Central Excise

Authorities


and Cenvat Credit for the Quarter

ended 31st

March, 2015 (Form No.

ER-3) (SSI Units)

Rule 12(1)

Second Proviso

Central Excise

Rules, 2002

10th

April

Central Excise

Authorities

Service Tax Related Compliances


Clauses, etc.

Acts/Regulations

etc.

Compliance

Due Date

To whom to be

submitted

11. Pay Service Tax in Challan

GAR – 7, collected for the month

of February 2015 by persons other

than individuals proprietors and

partnership firms. *(in case of

Payment through Internet banking)

Section 68 Read

with Rule 6

Finance Act, 1994

Service Tax Rules,

1994

05th

March

*06th

March

Service Tax

Authorities

12. Pay Service Tax in Challan

GAR – 7, collected for the month

of March 2015 by All assesses

Section 68 Read

with Rule 6

Finance Act, 1994

Service Tax Rules,

1994

31st March Service Tax

Authorities



Income-tax Related Compliances


Clauses, etc.

Acts/Regulations

etc.

Compliance

Due Date

To whom to be

submitted

13. Contractor’s Bill / Advertising /

Professional service Bill - TDS

collected for the previous month

Section 194J (February)

Section 194C

Section 194J

Income-tax Act,

1961

07th

March Income Tax

Authorities

14. Monthly payment of TCS

(February, 2015)

Section 206 Income-tax Act,

1961

07th

March Income Tax

Authorities

15. TDS from Salaries for the previous

month (February 2015)

Section 192

Income-tax Act,

1961

07th

March

Income Tax

Authorities

16. Deposit TDS from salaries for the

previous month in Challan No.281

(February)

Section 192

Income-tax Act,

1961

07th

March

Income Tax

Authorities

17. Pay Advance Tax Section 211 Income-tax Act,

1961

15th March Income-Tax

Authorities

18. Last date for filing belated return

for the AY 2013-14 (PY 2012-13)

139(4) Income tax Act,

1961

31st March Income tax

Department

19. Last date for filing revised return

for the AY 2013-14 (PY 2012-13)

139(5) Income tax Act,

1961

31st March Income tax

Department

20. Due date of filing Wealth Tax

Return in respect of previous year

in case of assessees who have

failed to file return on due dates

Section 14 Wealth Tax Act,

1957

31st March Income-Tax

Authorities

21. Contractor’s Bill / Advertising /

Professional service Bill - TDS

collected for the previous month

Section 194J (March, 2015)

Section 194C

Section 194J

Income-tax Act,

1961

07th

April Income Tax

Authorities

22. Monthly payment of TCS (March,

2015)

Section 206 Income-tax Act,

1961

07th

April Income Tax

Authorities

23. TDS from Salaries for the previous

month (March 2015)

Section 192

Income-tax Act,

1961

07th

April Income Tax

Authorities

24. Deposit TDS from salaries for the

previous month in Challan No.281

(March)

Section 192

Income-tax Act,

1961

07th

April

Income Tax

Authorities

Company Law/LLP Related Compliances

25. Repay the deposits accepted

before the commencement of

Companies Act, 2013 or part

thereof or interest due thereon

which remains unpaid on

commencement or become due at

any time there after

Section 74 Companies Act,

2013

31st March Registrar of

Companies

RBI Related Compliances

S.

No.

Activities Sections/Rules/

Clauses, etc.

Acts/Regulations

etc.

Compliance

Due Date

To whom to be

submitted

26. Monthly return (NBS-6) on

exposure to capital market

Para 13B

NBFC Prudential

Norms (Reserve

Bank) Directions,

1998

07th

March RBI

27. Monthly Return on Important

Financial Parameters

DNBS (RID)

C.C.

No.57/02.05.15/

2005-06 dated

Sep 6, 2005

Circular

07th

March RBI



28. Reporting of actual transactions of

ECB in form ECB-2 within 7

working days (February)

ECB Rules FEMA, 1999 09th

March RBI through

Authorized

Dealer

29. Monthly statement of short term

dynamic liquidity in Form ALM-I

DNBS

(PD).CC.No.15

/02.01/2000-

2001 dated June

27, 2001

Circular 10th

February RBI

30. Monthly return (NBS-6) on

exposure to capital market

Para 13B

NBFC Prudential

Norms (Reserve

Bank) Directions,

1998

07th

April RBI

31. Monthly Return on Important

Financial Parameters

DNBS (RID)

C.C.

No.57/02.05.15/

2005-06 dated

Sep 6, 2005

Circular

07th

April RBI

32. Reporting of actual transactions of

ECB in form ECB-2 within 7

working days (March)

ECB Rules FEMA, 1999 08th

April RBI through

Authorized

Dealer

33. Monthly statement of short term

dynamic liquidity in Form ALM-I

DNBS

(PD).CC.No.15

/02.01/2000-

2001 dated June

27, 2001

Circular 10th

April RBI

Economic, Industrial & Labour Law Related Compliances


Clauses, etc.

Acts/Regulations

etc.

Compliance

Due Date

To whom to be

submitted

34. Monthly payment of Provident

Fund (PF) (Non Corporate)

(a) Paragraph 38

of Employees

Provident Funds

Scheme, 1952

(b) Section 418 of

the Companies

Act, 1956

(a) Employees’

Provident Funds

and Misc.

Provisions Act,

1952 (b)

Exempted Scheme

15th

March Provident Fund

Authorities

Trustees of

Provident Fund

35. File monthly return for

employees leaving / joining

during the month of February

(Form No.5)

Pragraph 20(2)

read with

Paragraph 36(1)

& (2)

The Employees

Pension Scheme,

1995 (For

exempted

establishments

under Employees

Provident Fund

and Misc.

Provisions Act,

1952)

15th


Commissioner

36. i) File monthly Return of

employees entitled for

membership of Insurance

Fund (Form No.2(IF))

ii) File monthly Return for

members of Insurance Fund

leaving service during the

month of February (Form no.

3(IF))

iii) File monthly return of

Paragraph 10 The Employees

Deposit Linked

Insurance Scheme,

1976 (For

exempted

establishments

under Employees

Provident Fund

and Misc.

Provisions Act,

15th


Commissioner



members joining service

during the month of February

(Form no.F4(PS))

1952)

37. Payment of ESI contribution for

the previous month

Regulation 31

Employees’ State

Insurance Act,

1948 and

Employees State

Insurance (Gen.)

Regulations, 1950

21st March ESIC

Authorities

38. Monthly return of Provident

Fund for the previous month

(February) Provident funds

Paragraph 38 of

Employees’

Provident Act,

1952

Employees

Provident Funds

and Misc. Scheme,

1952

25th


Authorities

39. Monthly return of Provident

Fund for the previous month

with respect to International

Workers.

Paragraph 36 The Employees'

Provident Funds

Scheme, 1952

25th


Authorities

Stock Exchange / Listing Compliance


Clauses, etc.

Acts/Regulations

etc.

Compliance

Due Date

To whom to be

submitted

40. 1. Every person, who together

with persons acting in concert

with him, holds shares or voting

rights entitling him to exercise

twenty-five per cent or more of

the voting rights in a target

company, shall disclose their

aggregate shareholding and

voting rights as of the thirty-first

day of March, in such target

company

2. The promoter of every target

company shall together with

persons acting in concert with

him, disclose their aggregate

shareholding and voting rights as

of the thirty-first day of March,

in such target company.

Regulation

30(1)

Securities and

Exchange Board

of India

(Substantial

Acquisition of

shares and

takeovers)

regulations, 2011

09th

April

(within seven

working days

from the end of

each financial

year)

(a) every stock

exchange where

the shares of the

target company

are listed; and

(b) the target

company at its

registered office.

Depositories


Clauses, etc.

Acts/Regulations

etc.

Compliance

Due Date

To whom to be

submitted

41. Submit monthly statement on

substitution of names of

depositories in the previous

quarter.

Regulation 54(5) SEBI

(Depositories &

Participants)

Regulations, 1996

07th March

Depositories

42. Submit monthly statement on

substitution of names of

depositories in the previous

quarter.

Regulation 54(5) SEBI

(Depositories &

Participants)

Regulations, 1996

07th April

Depositories

43. Quarterly certificate for demat/

remat of shares done during

previous quarter

Regulation

54(5) read with

NSDL Circular

No.

NSDL/SG/015/

99

SEBI

(Depositories &

Participants)

Regulations, 1996

07th

April Depositories



Note : While every care has been taken in the preparation of this Compliance Check List for the Month ofMarch, 2015, to ensure its accuracy at the time of publication, NIRC - ICSI assumes no responsibility for anyerrors which despite all precautions, may be found therein. Members are requested to check the latest positionwith the original sources before acting upon on the information published in this newsletter. Neither this Newsletternor the information contained herein constitutes a contract or will form the basis of a contract. The materialcontained in this document does not constitute/ substitute professional advice that may be required before actingon any matter.

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

44. Submit a quarterly report for

grievances of the beneficial

owners related to depository

services

Regulation 53B read with NSDL Circular No. NSDL / JS/029/2003

SEBI(Depositories and Participants) Regulations.

07th April

Depositories NSDL

LIGHTER SIDE OF THE PROFESSION

"Paramjeet Singh,how come your married life is so happy?"

"It became happy only from the day, I started following the Guru Mantra."

"What is that Guru Mantra?"

"While at home, use capacity utilization of one's Intelligence only @ 50%."

"Even after 4 years of retirement,why you have not relieved the Secretary to the

Chairman?"

"Because we have not been able to get proper replacement."

"What is the speciality about him?"

"Besides being the Secretary, he also works as his Masseur to massage his ego."

—CS PARAMJEET SINGH, [email protected]

Members may send their contribution for this column at e-mail [email protected] for publication in theNIRC Newsletter-Insight. Decision of the Editorial Board of Newsletter in this regard will be final.


News From NIRC

PROFESSIONAL DEVELOPMENT & TRAINING PROGRAMSNEWS FROM NIRC

Date Program Chief Guest(s)/Guest of Honour(s)/Speakers/members Present

20.2.2015 Meeting of Regional Council Members of NIRC with Chapter Chairmen of Northern Region

CS Atul H Mehta, CS Mamta Binani, CS Ranjeet Pandey, CS Vineet Chaudhary, Office Bearers & Regional Council Members of NIRC-ICSI along-with representatives of Chapters of Northern Region

21.2.2015 One Day Seminar on the topic “Mergers & Acquisitions – A Catalyst for Corporate Growth”

Mr. Lalit Kumar, Partner,JSA, Mr. Satwinder Singh, Partner, Vaish Associates & Central Council Member, ICSI, Mr. Nitin Savara, Partner, EY, Mr. Rajiv Singh, Founder, Explico Consulting, Mr. Sanjay Vasudeva, Partner, SC Vasudeva & Co.

23.2.2015 Members Assistance Committee - Meeting of members for discussion on various issues concerning the professional interest

CS NPS Chawla, CS Ranjeet Pandey, CS Manish Gupta, CS Dhananjay Shukla & CS Pradeep Debnath

1.3.2015 Joint program with ICSI on Union Budget 2015-16 Chief Guests: Mr. Pawan K. Kumar IRS Commissioner of Income Tax Mr. Gourav Vallabh, Professor of Finance, XLRI Jamshedpur Mr. V Lakshmikumaran, Founder & Managing Partner Lakshmikumaran & Sridharan Attorneys Dr. Girish Ahuja, Eminent Tax Expert CS NPS Chawla & CS Vineet Chaudhary

2.3.2015 Campus Placement for Students

3.3.2015 Inauguration of 207th MSOP

Chief Guest: CS Narender Kumar, CFO VLCC Health Care Ltd. CS Manish Gupta, CS Dhananjay Shukla & CS Pradeep Debnath

5.3.2015 Holi Milan & Kavi Sammelan for Members Chief Guest: Shri Hazari Lal Chauhan, Member, Legislative Assembly of Delhi, Patel Nagar Constituency Guest of Honour: Shri Ankush Narang, Vice President, Aam Admy Party Youth Wing

7.3.2015 Conference on WOMEN SAFETY & EMPOWERMENT

Chief Guest: Hobn’ble Justice Ms. Mukta Gupta, Judge, Delhi High Court Guest of Honour: Ms. Pinky Anand, Additional Solicitor General of India Ms. Ketki Arora, COO, Femella Fashions, Ms. Ranjana Agarwal, Director, ICRA Ltd.,Mr. Vipul Srivastava, Advocate, Ms. Anita Sehgal, Life Coach and Clinical Hypno – therapist & Healer, Mr. Rajesh Arora, GM (Legal), CS Britannia Industries Ltd., Banglore, Mr. Sanjeev Kumar, Director, Ministry of HRD

15.3.2015 Study Session Meeting CS Ranjeet Pandey


LEGAL UPDATES

Whether either party to the proceedings can invokethe jurisdiction of the Chief Justice under Section 11(6)of the Arbitration and Conciliation Act, 1996, when ajudicial authority once declined to refer the disputepending before it to the Arbitrator and when it becamefinal.??

In the recent case the parties were carrying on thebusiness in the name and style of partnership firmconstituted under the partnership deed. Said partnershipdeed provide for resolution of dispute by means ofarbitration. Dispute arose application under section 11of the Arbitration and Conciliation Act- Tribunalterminated said arbitration proceeding - Hence, instantappeal - Under sub-S. 2. of Section 32 of Act providesthat the arbitral Tribunal should issue an order for thetermination of the arbitral proceedings. The questionwhether the mandate of the arbitrator stood legallyterminated or not could be examined by the court (AnilS/o Jagannath Rana and Ors Versus Rajendra S/oRadhakishan Rana and another, on 18th December, 2014Supreme Court Of India DOJ 18/12/2014 CA.No 11604of 2014)

Facts of the case

" The Partnership firm namely, M/s. RanaSahebram Mannulal and others had filed suitagainst Appellants (Anil s/o Jagannath Rana andothers) in pursuance to the partnership business.

" The Plaintiffs sough declaration to the effect thatthey should be declared as valid partners andowners and possessors of the suit land to particularextent as claimed. Further, declaration was soughtto the effect that the said property to be the propertyof Partnership Firm also the declaration was alsosough to the effect that, registered sale deedsregarding land situated in Aurangabad, to be nulland void and should not affect and not to be bindingupon Plaintiffs. Further, another declaration soughtto the effect that the properties to be declared to bethe properties of Partnership Firm as the saidproperties are purchased from the nexus and income

Legal Updates

of the partnership firm. Moreover, perpetualinjunction is claimed against the defendant etc. whoso ever claims on their behalf, restraining thempermanently from alienating and creating interestover suit properties.

" Also, the recovery of profit accrued from thewhole sale kerosene business run through thePartnership firm was claimed from the First to ThirdDefendant as from three years back to the filing ofsuit along with 18% of annual interests.

" The Appellant/Defendants filed an applicationfor dismissal of the suit under S9A of CPC, 1908 forwant of jurisdiction as the Partnership deedcontained arbitration clause and hence the disputeswere liable to be resolved in terms of the Act. Theapplication essentially, was to be treated as anapplication under Section 8(1) of the Act. Theapplication was opposed by the plaintiffs.

The Objection raised by Plaintiffs was considered bythe Trial Court and upheld the objection by holding thatthe dispute between the parties was within thejurisdiction of the Court and not required to be referredto the Arbitration under any law. Thus, the suit wasproceeded further, the parties examined their respectivewitnesses and during such period, the Respondent inthis case, approached to the Chief Justice of Bombay HighCourt with Arbitration Application No. 12/2013 andsought appointment of an Arbitrator as per conditionsgiven under Partnership deed.

The High Court after ignoring the objection to anapplication held that the appointment of arbitrator isnot prohibited by sub-section (3) of Section 8 of theArbitration and Conciliation Act, 1996 during course oflitigation pursuant to agreement. Considering this theCourt found it expedient to appoint proper person asArbitrator in pursuant to clauses of the partnership deedto entertain dispute between the parties." The major issuethat raised here was whether either party to theproceedings can invoke the jurisdiction of the ChiefJustice under Section 11(6) of the Arbitration and


Legal Updates

Conciliation Act, 1996, when a judicial authority oncedeclined to refer the dispute pending before it to theArbitrator and when it became final.

Judgment

The Court observed that, the said application filed bythe Respondents under Section 11 of the Arbitration andConciliation Act, 1996 (the Act) was nothing but anabuse of process. The partnership firm was itself beingFirst Plaintiff in the special suit. The application, firstly,filed by the Appellants seeking the matter to be referredto the arbitrator, and the same was opposed by theRespondents. Similarly, at the time when the suit wasat the final stage, the Respondents had soughtappointment of an Arbitrator under the provisions ofthe Act. After having approached to the Civil Court andalso after having opposed the application to arbitrationand also when the decision of the Court in that regardhaving become final, the Respondents was not entitledinvoke the jurisdiction under Section 11(6) of the Act.Thus, this situation attracted the principle of issueestoppel. Further, the Court had pointed that, thoughthere is pending an application as to appointment of anArbitrator before the judicial authority, the provisionsof Section 8(3) of the Act is permitting the parties tocommence and continue the arbitration proceedings andthe Tribunal is free to pass its award, this is what havebeen provided under the provisions of Section 8(3) ofthe Act.

In the present case, the fact that the suit was institutedby the Partnership Firm and some of the Respondents,thereafter the order was passed by the Civil Court to the

extent that the dispute was well within its right andjurisdiction so as to try and dispose of the said suit,even though the objection regarding the existence of aarbitration clause under the Partnership deed, the samehad become final and after these circumstances, theparties can never be permitted legally to invoke thejurisdiction of Hon'ble Chief Justice of High Court, undersection 11(6) of the Act. This will attract the principle ofres judicata.

The Court held that, the judge of High Court wronglypassed the order under Section 11 of the Act, when CivilCourt was dealing dispute and Arbitration clause wasalready denied by the Court. Hence the Court set asidethe impugned order of High Court and allowed theappeal with certain costs.

Conclusion

Hon'ble Supreme Court of India in this judgment hasvery critically pointed the scope of Section 8(3) of theArbitration and Conciliation Act, 1996 being anancillary issue. As such, in the present matter the Courthas rightly, explained the importance of the principleof estoppels, when parties have approached to the civilcourt and opposed the reference to Arbitration underSection 8(1) of the said Act and the decision of the Courtin that regard having become final, as such theRespondents could not invoke jurisdiction underSection 11(6) of the Act.

Compiled by:

-–CS Manish Gupta

CHAPTERS OF NIRC-ICSIAgra, Ajmer, Allahabad, Alwar, Amritsar, Bareilly, Bhilwara, Bikaner, Chandigarh, Dehradun,Faridabad, Ghaziabad, Gurgaon, Jaipur, Jalandhar, Jammu, Jodhpur, Kanpur, Karnal-Panipat,Kota, Lucknow, Ludhiana, Meerut, Modinagar, Noida, Shimla, Sonepat, Srinagar, Udaipur,Varanasi & Yamuna Nagar.

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

from the chairman · 6. reasoned decisions or speaking orders the principle of audi alteram partem...

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