Sunday, 31 January 2016

Powers of the President of the India

Executive Powers - Article 53

1.       All executive powers of the Union are vested in the President and shall be exercised by him either
directly or through subordinate officers in accordance with the Constitution.
2.       The President appoints the Prime Minister and other ministers; and they hold office during his pleasure.
3.       The President appoints the Attorney General of India, Comptroller and Auditor General of India, the Chief Election Commissioner and other Election Commissioners, the Chairman and Members of the UPSC, the Governors of the states, the Chairman and the members of the Finance Commissions etc.
4.       The President can appoint a commission to investigate into the conditions of SCs, STs and OBCs.
5.       The President of India can grant a pardon to or reduce the sentence of a convicted person for one time, particularly in cases involving punishment of death.

Legislative Powers
1.       The President addresses the Parliament at the commencement of the first session after the general election and the first session of each year.
2.       The President can summon or end a session of the Parliament and dissolve the Lok Sabha.
3.       He can also summon a joint sitting of both the houses of Parliament which is presided over by the Speaker of the Lok Sabha.
4.       The President can appoint a member of the Lok Sabha to preside over its proceedings if both the positions of Speaker as well as Deputy Speaker are vacant.
5.       He also can appoint any member of the Rajya Sabha to preside over its proceeding when both the Chairman’s and Deputy Chairman’s office fall vacant.
6.       He can nominate 12 members to the Rajya Sabha with extraordinary accomplishments in literature, science, art and social service and two members to the Lok Sabha from the Anglo-Indian Community.
7.       President’s prior recommendation or permission is needed for introducing bills in the parliament involving expenditure from Consolidated Fund of India, alternation of boundaries of states or creation of a new state
8.       When a bill is sent to the Parliament after it has been passed by the parliament, the President can give his assent to the bill or withhold his assent to the bill or return the bill (if it is not a Money Bill or a Constitutional Amendment Bill) for reconsideration of the Parliament.
9.       When a bill passed by a State legislature is re-served by the Governor for consideration of the President, the President can give his assent to the bill, or withhold his assent to the bill or direct the Governor to return the bill (if it is not a Money bill) for reconsideration of the State Legislature.
10.   President can promulgate ordinances when both the Houses of the Parliament are not in session. These ordinances must be approved by the Parliament within the six weeks of its reassembly. The ordinance can be effective for a maxi-mum period of six months and six weeks – Article 123

Emergency Powers of the President
The President can declare three types of emergencies:

1. National Emergency: Article 352
National emergency is caused by war, external aggression or armed rebellion in the whole of India or a part of its territory. President can declare national emergency only on a written request by the Cabinet Ministers headed by the Prime Minister and the proclamation must be approved by the Parliament within one month. National emergency can be imposed for six months. It can be extended by six months by repeated parliamentary approval, up to a maximum of three years.
Under national emergency, Fundamental Rights of Indian citizens can be suspended. The six freedoms under Right to Freedom are automatically suspended. However, the Right to Life and Personal Liberty cannot be suspended.

State Emergency or President’s Rule: Article 356
A State Emergency can be imposed in a State if that state failed to run constitutionally i.e. constitutional machinery has failed.

Such an emergency must be approved by the Parliament within a period of two months. It can be imposed from six months to a maximum period of three years with repeated parliamentary approval every six months.

During such an emergency, the Governor administers the state in the name of the President. The Legislative Assembly can be dissolved or may remain in suspended animation. The Parliament makes laws on the 66 subjects of the state list. All money bills have to be referred to the Parliament for approval.

Financial Emergency: Article 360
President can proclaim a Financial Emergency if financial stability or credit of India or any part thereof is threatened. This proclamation must be approved by the Parliament within two months.

Financial Powers
1.       A money bill can be introduced in the Parliament only with the President’s recommendation
2.       The President lays the Annual Financial Statement i.e. the Union budget before the Parliament.
3.       President can make advances out of the Contingency Fund of India to meet unforeseen expenses
4.       The President continues a Finance commission after every five years to recommend the distribution of the taxes between the centre and the States.

Diplomatic powers
1.       International treaties and agreements are signed on behalf of the President. However, they are subject to approval of the parliament.
2.       The president represents India in International forms and affairs and may send and receives diplomats like ambassadors, high commissioners.

Military powers
1.       The President is the supreme commander of the defence forces of India
2.       The President can declare war and conclude peace, subject to Parliaments’ approval.
3.       The President appoints the chiefs of Army, Navy and Air Force.

Judicial powers
1.       The president appoints the Chief Justice of the Union Judiciary and other judges on the advice of the Chief Justice.
2.       The President dismisses the judges if and only if the two Houses of the Parliament pass resolutions to that effect by two-thirds majority of the members present.
3.       The president has the right to grant pardon.
4.       The president enjoys the judicial immunity
5.       No criminal proceedings can be initiated against the president during the term in office

6.       The president is not answerable for the exercise of his/her duties.

Saturday, 30 January 2016

Amendment in Rules regarding quoting of PAN for specified transactions

The Rules regarding quoting of PAN for specified transactions has been amended in order to curb the
circulation of black money and widening of tax base. To collect information of certain types of transactions from third parties in a non-intrusive manner, the Income-tax Rules require quoting of Permanent Account Number (PAN) where the transactions exceed a specified limit. However, persons who do not hold PAN are required to fill a form and furnish any one of the specified documents to establish their identity.

To bring a balance between burden of compliance on legitimate transactions and the need to capture information relating to transactions of higher value, the Government has also enhanced the monetary limits of certain transactions which require quoting of PAN.
As per the key changes to Rule 114B of the Income-tax Act (Mandatory Quoting of PAN) the present requirements are:-

1. Immovable property - Sale/ purchase exceeding Rs.10 lakh; and Properties valued by Stamp Valuation authority at amount exceeding Rs.10 lakh will also need PAN.

2. Time deposit - Deposits with Co-op banks, Post Office, Nidhi, NBFC companies will also need PAN; and Deposits aggregating to more than Rs.5 lakh during the year will also need PAN

3. Opening an account (other than time deposit) with a banking company - Basic Savings Bank Deposit Account excluded (no PAN requirement for opening these accounts); and Co-operative banks also to comply

4. Hotel/restaurant bill(s) - Cash payment exceeding Rs.50,000/-

5. Cash purchase of bank drafts/ pay orders/ banker's cheques - Exceeding Rs.50,000/- on any one day

6. Cash deposit with banking company - Cash deposit exceeding Rs.50,000/- in a day

7. Foreign travel - Cash payment in connection with foreign travel or purchase of foreign currency of an amount exceeding Rs.50,000/- at any one time (including fare, payment to travel agent)

8. Mutual fund units - Payment exceeding Rs.50,000/- for purchase

9. Shares of company - Opening a demat account; and Purchase or sale of shares of an unlisted company for an amount exceeding Rs.1 lakh per transaction

10. Debentures/ bonds - Payment exceeding Rs.50,000/-

11. RBI bonds - Payment exceeding Rs.50,000/-

12. Life insurance premium - Payment exceeding Rs.50,000/- in a year

13. Purchases or sales of goods or services - Purchase/ sale of any goods or services exceeding Rs.2 lakh per transaction

14. Cash cards/ prepaid instruments issued under Payment & Settlement Act - Cash payment aggregating to more than Rs.50,000 in a year
The new Rules have taken effect from 1st January, 2016

 Content Source:

Thursday, 28 January 2016

Void and Voidable marriage under Hindu law

A void marriage is a marriage which is unlawful or invalid under the laws of the jurisdiction where it is entered. A void marriage is "one that is void and invalid from its beginning. It is as though the marriage never existed and it requires no formality to terminate."

A voidable marriage is a marriage which can be canceled at the option of one of the parties. The marriage is valid but is subject to cancellation if contested in court by one of the parties to the marriage. The validity of a voidable marriage can only be made by one of the parties to the marriage; thus, a voidable marriage cannot be annulled after the death of one of the parties. A voidable marriage exists until it has been annulled by the courts.

Void marriage (Section 11 of Hindu Marriage Act, 1955) - A marriage will be a void marriage if:
1.      If either party has a spouse living at the time of the marriage
2.      If the parties are within the degrees of prohibited relationship
3.      If the parties are sapindas of each other

Voidable marriage (Section 12 of Hindu Marriage Act, 1955) - Any marriage shall be voidable and may be annulled by a decree of nullity on any of the following grounds, namely:-
1.      If the marriage has not been consummated owing to the impotency of the respondent
2.      If at the time of the marriage, either party is incapable of giving a valid consent of it in consequence of unsoundness of mind

3.      If at the time of the marriage, either party though capable of giving a valid consent has been suffering from mental disorder of such a kind or to such an extent as to be unfit for marriage and the procreation of children

4.      If at the time of the marriage, either party has been subject to recurrent attacks of insanity or epilepsy
5.      If the consent of the petitioner was obtained by force or by fraud as to the nature of the ceremony or as to any material fact or circumstance concerning the respondent

6.      If the respondent was at the time of the marriage pregnant by some person other than the petitioner
In a void marriage, the parties do not acquire any status of husband and wife as such it does not confer any mutual rights and obligations upon the parties. On the other hand, in a voidable marriage the parties acquire status of husband and wife and it confers mutual rights and obligations upon the parties for all purposes until a decree of court annuls it.

In a void marriage, either of the parties to the marriage may marry again without getting a decree declaring the marriage void. The offence of bigamy is not attracted. On the other hand, as the voidable marriage is valid unless avoided, neither of the parties can marry again without obtaining a decree of nullity of marriage or else the offence of bigamy is attracted.

In void marriage, neither of the parties acquire right of inheritance on the death of other party when succession opens. On the other hand, in case of voidable marriage, either of the parties acquire right of inheritance on the death of other party when succession opens, if the marriage is not annulled.

Wednesday, 27 January 2016

Standard Operating Procedure for the examination of Good Samaritans

The Central government on 21st January 2016 notified a standard operating procedure (SOP) on how
to 'respectfully' deal with good Samaritans and bystanders who rush road crash victims to hospitals or inform police. The SOP says no such person must be asked to reveal personal details, including full name, address and phone number unless he/ she volunteers to become an eyewitness.

Every year 1.4 lakh people die in road crashes in India and government reports suggest that at least 50% of the fatalities can be averted if the victims are admitted to a hospital within the first one hour of a crash, called the 'golden hour'. Many of these lives could have been saved, if they had received timely help. But due to the apathy of society many people just passed by people as they lay in critical conditions. This apathy is mostly due to people being scared of police and legal proceedings hence hesitating to get victims the help they require.

The Government issued the following standard operating procedure, namely:—
1.       The Good Samaritan shall be treated respectfully and without any discrimination on the grounds of gender, religion, nationality, caste or any other grounds.

2.       Any person who makes a phone call to the Police control room or Police station to give information about any accidental injury or death, except an eyewitness may not reveal personal details such as full name, address, phone number etc.

3.       Any Police official, on arrival at the scene, shall not compel the Good Samaritan to disclose his / her name, identity, address and other such details in the Record Form or Log Register.

4.       Any Police official or any other person shall not force any Good Samaritan who helps an injured person to become a witness in the matter. The option of becoming a witness in the matter shall solely rest with the Good Samaritan.

5.       The concerned Police official(s) shall allow the Good Samaritan to leave after having informed the Police about an injured person on the road, and no further questions shall be asked if the Good Samaritan does not desire to be a witness in the matter.

Examination of Good Samaritan by the Police
In case a Good Samaritan so chooses to be a witness, he shall be examined with utmost care and respect and without any discrimination on the grounds of gender, religion, nationality, caste or any other grounds.

2.       In case a Good Samaritan chooses to be a witness, his examination by the investigating officer shall, as far as possible, be conducted at a time and place of his convenience such as his place of residence or business, and the investigation officer shall be dressed in plain clothes, unless the Good Samaritan chooses to visit the police station.

3.       Where the examination of the Good Samaritan is not possible to be conducted at a time and place of his convenience and the Good Samaritan is required by the Investigation Officer to visit the police station, the reasons for the same shall be recorded by such officer in writing.

4.       In case a Good Samaritan so chooses to visit the Police Station, he shall be examined in a single examination in a reasonable and time-bound manner, without causing any undue delay.

5.       In case the Good Samaritan speaks a language other than the language of the Investigating Officer or the local language of the respective jurisdiction, the Investigating Officer shall arrange for an interpreter.

6.       Where a Good Samaritan declares himself to be an eye-witness, he shall be allowed to give his evidence on affidavit, in accordance with section 296 of the Code of Criminal Procedure, 1973 (2 of 1974) which refers to Evidence in Formal Character on Affidavit.

7.       The complete statement or affidavit of such Good Samaritan shall be recorded by the Police official while conducting the investigation in a single examination.

8.       In case the attendance of the Good Samaritan cannot be procured without delay, expense or inconvenience which, under the circumstances of the case, would be unreasonable, or his examination is unable to take place at a time and place of his convenience, the Court of Magistrate may appoint a commission for the examination of the Good Samaritan in accordance with section 284 of the Code of Criminal Procedure, 1973 (2 of 1974) on an application by the concerned.


Tuesday, 26 January 2016

The Emergence of the Constitution of India

India i.e. Bharat is a Union of States.  It is a Sovereign Socialist Democratic Republic with ath November 1949 and came into force on 26th January 1950 with a democratic government system, completing the country's transition toward becoming an independent republic. 26 January was chosen as the Republic day because it was on this day in 1930 when the Declaration of Indian Independence (Purna Swaraj) was proclaimed by the Indian National Congress as opposed to the Dominion status offered by the British Regime.
parliamentary system of government.  The Republic is governed in terms of the Constitution of India which was adopted by the Constituent Assembly on 26

The Constitution declares India a sovereign, socialist, secular, democratic, republic, assuring its citizens of justice, equality, and liberty, and endeavors to promote fraternity among them.
The Constitution was drafted by the Constituent Assembly, which was elected by the elected members of the provincial assemblies. The 389 member Constituent Assembly took 2 years, 11 months and 18 days to complete its historic task of drafting the Constitution for Independent India. 

During this period, it held eleven sessions covering a total of 165 days. Of these, 114 days were spent on the consideration of the Draft Constitution. On 29 August 1947, the Constituent Assembly set up a Drafting Committee under the Chairmanship of Dr. B.R. Ambedkar to prepare a Draft Constitution for India. While deliberating upon the draft Constitution, the Assembly moved, discussed and disposed of as many as 2,473 amendments out of a total of 7,635 tabled. The first temporary 2-day president of the Constituent Assembly was Dr Sachchidananda Sinha. Later, Rajendra Prasad was elected president of the Constituent Assembly. The members of the Constituent Assembly met for the first time on 9 December 1946 in the Constitution Hall which is now known as the Central Hall of Parliament House.

As to its composition, members were chosen by indirect election by the members of the Provincial Legislative Assemblies, according to the scheme recommended by the Cabinet Mission. The arrangement was: (i) 292 members were elected through the Provincial Legislative Assemblies; (ii) 93 members represented the Indian Princely States; and (iii) 4 members represented the Chief Commissioners' Provinces. The total membership of the Assembly thus was to be 389. However, as a result of the partition under the Mountbatten Plan of 3 June, 1947, a separate Constituent Assembly was set up for Pakistan and representatives of some Provinces ceased to be members of the Assembly. As a result, the membership of the Assembly was reduced to 299.

Important Committees of the Constituent Assembly & its Chairman

1.       Drafting Committee - B.R. Ambedkar
2.       Committee on the Rules of Procedure - Rajendra Prasad
3.       Steering Committee - Rajendra Prasad
4.       Finance and Staff Committee - Rajendra Prasad
5.       Ad hoc Committee on the National Flag - Rajendra Prasad
6.       States Committee - Jawaharlal Nehru
7.       Union Powers Committee - Jawaharlal Nehru
8.       Union Constitution Committee - Jawaharlal Nehru
9.       Credential Committee - Alladi Krishnaswami Ayyar
10.   House Committee - B. Pattabhi Sitaramayya
11.   Order of Business Committee - K.M. Munsi
12.   Committee on the Functions of the Constituent Assembly - G.V. Mavalankar
13.   Advisory Committee on Fundamental Rights, Minorities and Tribal and Excluded Areas - Vallabhbhai Patel
14.   Minorities Sub-Committee - H.C. Mookherjee
15.   Fundamental Rights Sub-Committee - J.B. Kripalani
16.   North-East Frontier Tribal Areas and Assam Exluded & Partially Excluded Areas Sub-Committee - Gopinath Bardoloi

17.   Excluded and Partially Excluded Areas (Other than those in Assam) Sub-Committee - A.V. Thakkar

Sunday, 24 January 2016

Difference between Partnership and Joint Hindu family

1. Formation - The basis of Partnership firm is a contract between persons whereas a Hindu undivided family is created by status i.e., a person becomes its member by virtue of his being born in the particular family.

2. Addition of a new partner or member - When a new partner has to be introduced into a partnership firm, consent of all the partners is needed for the same whereas no such consent is needed for the addition of a member into the joint Hindu family. A person becomes the member of the family on being born in that family.

3. Mutual agency - There is mutual agency between the partners of a particular firm, and the act done by any of the partners binds the firm whereas there is no such mutual agency between the members of a joint Hindu family. The Karta of the joint Hindu  family  has all  the powers  to act  on the  behalf  of the family  and he is the only  person  who can  represent  the family.

4. Liability - The liability  of a partner  is not  only  joint  liability or limited to his  share  in the partnership  business, the liability  is several  liability   also. Such liability is unlimited and even a partner’s personal property can be attached for the partnership debts. On the other hand, the liability of the coparceners, on the other hand, is limited only to the extent of their shares in the family business.

5. Minor - A minor cannot become a partner in a firm, he can be admitted only for the benefits whereas a person becomes a coparcener right from his birth.

6. Limit on number of persons - There is a limit on the number of partners in a firm, i.e., 10 in banking business and 20 in any other business whereas there is no limit on the number of coparceners in joint Hindu family.

7. Dissolution - In the absence of any agreement to the contrary, partnership is dissolved on the death of any partner whereas joint Hindu family continues to operate even after the death of a coparcener.

8. Governing Law - A partnership is governed by the provisions of the Indian Partnership Act, 1932 whereas a joint Hindu family business is governed by Hindu law.

Thursday, 21 January 2016

Doctrine of Holding Out

Partnership by Holding Out is also known as partnership by estoppels. Holding out is merely application of the principle of estoppel which is a rule of evidence wherein a person is prevented or estopped from denying a statement he made or existence of facts that he makes another person believe. In simple terms, if a person represents that he is a partner of a particular firm, he is estopped from denying this representation later on. The doctrine of holding out has been provided under section 28 of the Indian Partnership Act, 1932. Section 28 reads as:

Holding Out - (1) Anyone who by words spoken or written or by conduct represent himself, or knowingly permits himself to be represented, to be a partner in a firm, is liable as a partner in that firm to anyone who has on the faith of any such representation given credit to the firm, whether the person representing himself or represented to be a partner does or does not know that the representation has reached the person so giving credit.

(2) Where after partner's death the business continued in the old firm-name, the continued use of that name or of the deceased partner's name as a part thereof shall not of itself make his legal representative or his estate liable for any act of the firm done after his death.”

Example - A introduced B as his partner to C and B knowing that he was not a partner did not object to A's representation. Here B will be liable by holding out.

Essentials of holding out

To hold a person liable as a partner by holding out, it is necessary to establish the following:
        i.            that he represented himself, or knowingly permitted himself to be represented as a partner
      ii.            Such representation occured by words spoken or written or by conduct
    iii.            the other party on the faith of that representation gave credit to the firm

No holding out in certain cases
1.      Deceased partner
2.      Insolvent partner
3.      Sleeping or dormant partner

Retired Partner – Whether liable by holding out or not?

A retired partner of the firm is liable to third parties by the principle of holding out if he allows using his name in connection with the firm

Right to lodge a caveat

‘Caveat’ means a caution or warning to the court not to issue any grant or relief without giving
opportunity to the person lodging the caveat. The object of lodging a caveat is to protect the caveator's interest who is ready to face the suit or proceedings which is expected to be initiated by his opponent. The provision of Caveat is provided in section 148A of the Code of Civil procedure, 1908.
“148A. Right to lodge a caveat— 

(1) Where an application is expected to be made, or has been made, in a suit or proceedings instituted, or about to be instituted, in a Court, any person claiming a right to appear before the Court on the hearing of such application may lodge a caveat in respect thereof.

(2) Where a caveat has been lodged under sub-section (1), the person by whom the caveat has been lodged (hereinafter referred to as the caveator) shall serve a notice of the caveat by registered post, acknowledgement due, on the person by whom the application has been or is expected to be, made, under sub-section (1).

(3) Where, after a caveat has been lodged under sub-section (1), any application is filed in any suit or proceeding, the Court, shall serve a notice of the application on the caveator.

(4) Where a notice of any caveat has been served on the applicant, he shall forthwith furnish the caveator at the caveator's expense, with a copy of the application made by him and also with copies of any paper or document which has been, or may be, filed by him in support of the application.

(5) Where a caveat has been lodged under sub-section (1), such caveat shall not remain in force after the expiry of ninety days from the date on which it was lodged unless the application referred to in sub-section (1) has been made before the expiry of the said period.”

Object of Caveat
1.       It protects the caveator's interest
2.       It prevents ex-parte orders
3.       It avoids multiciplicity of proceedings

Non-maintainability of caveat
1.       A caveat cannot be lodged with a view to support an application
2.       A caveat cannot be filed in collusion

Form of a Caveat
No form if prescribed for the Caveat in the Code of Civil procedure

Notice to the Caveator
According to the section 148-A the Court is bound to serve a notice of the application on Caveator  before passing an interim order

Time limit of Caveat
The Caveat petition remains in force only for 90 days and if during that period no case gets filed from the opposite side the Caveator has to again file a fresh caveat petition in the Court.

All India Reserve Bank Employees Association v. Reserve Bank of India, 1966 SCR (1) 25
The plaintiffs filed a caveat before the court. The court before the expiry of 90 days, issued an interim ex parte order against the plaintiffs without serving them a notice and without hearing them. The ex parte interim order was held to be bad by the Supreme Court. 

G.C. Siddalingappa vs G.C. Veeranna, AIR 1981 Kant 242

The provision regarding service of notice as contained in sub-section (3) mandatory and non-compliance with it defeats the, very object of introducing Section 148-A.

Sunday, 17 January 2016

Central Information Commission

The Central Information Commission established in 2005 is set up under the Right to Information Act
(RTI Act) is the authorised body, under the Government of India to act upon complaints from those individuals who have not been able to submit information requests to a Central Public Information Officer or State Public Information Officer due to either the officer not having been appointed, or because the respective Central Assistant Public Information Officer or State Assistant Public Information Officer refused to receive the application for information under the RTI Act.

Constitution of the Central Information Commission
Section 12(1) of the RTI Act provides for the constitution of the Central Information Commission by the Central Government. The Central Information Commission is consisted of:-
1.       Chief Information Commissioner; and
2.       Not more than 10 Information Commissioners

Appointment of the Chief Information Commissioner & the Information Commissioners
The Chief Information Commissioner and Information Commissioners are appointed by the President on the recommendation of a committee consisting of—
         i.            the Prime Minister, who shall be the Chairperson of the committee;
       ii.            the Leader of Opposition in the Lok Sabha; and
      iii.            a Union Cabinet Minister to be nominated by the Prime Minister.

Powers and functions of Information Commissions
1. The Central Information Commission/State Information Commission has a duty to receive complaints from any person - 
a.       who has not been able to submit an information request because a PIO has not been appointed ;
b.      who has been refused information that was requested;
c.       who has received no response to his/her information request within the specified time limits ;
d.      who thinks the fees charged are unreasonable ;
e.      who thinks information given is incomplete or false or misleading ;and
f.        any other matter relating to obtaining information under this law.

2. Power to order inquiry if there are reasonable grounds.

3. Central Information Commission/State Information Commission will have powers of Civil Court such as -
a.       summoning and enforcing attendance of persons, compelling them to give oral or written evidence on oath and to produce documents or things;
b.      requiring the discovery and inspection of documents;
c.       receiving evidence on affidavit ;
d.      requisitioning public records or copies from any court or office
e.      issuing summons for examination of witnesses or documents
f.        any other matter which may be prescribed.

4. All records covered by this law (including those covered by exemptions) must be given to CIC/SCIC during inquiry for examination.

5. Power to secure compliance of its decisions from the Public Authority includes-
a.       providing access to information in a particular form;
b.      directing the public authority to appoint a PIO/APIO where none exists;
c.       publishing information or categories of information;
d.      making necessary changes to the practices relating to management, maintenance and destruction of records ;
e.      enhancing training provision for officials on RTI;
f.        seeking an annual report from the public authority on compliance with this law;
g.       require it to compensate for any loss or other detriment suffered by the applicant ;
h.      impose penalties under this law; or
i.         reject the application. (S.18 and S.19)

The first Chief Information Commissioner was Wajahat Habibullah. The present Chief Information Commissioner is R. K. Mathur.

Saturday, 16 January 2016

Prevention of Money-Laundering Act, 2002

Money-laundering poses a serious threat not only to the financial systems of countries, but also to their integrity and sovereignty.  To prevent money-laundering and connected activities the legislature has enacted the Prevention of Money-Laundering Act, 2002 (PML Act).
The Prevention of Money-Laundering Act, 2002 was enacted by the Parliament in the year 2003 but it came into force with effect from 1st July, 2005.

Objective of the Act
The PML Act seeks to combat money laundering in India and has three main objectives:
1.      To prevent and control money laundering
2.      To confiscate and seize the property obtained from the laundered money; and
3.      To deal with any other issue connected with money laundering in India.

Section 3 of the PML Act defines the offence of money-laundering as “Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money-laundering.” According to section 4 of the Act the punishment for the offence of money-laundering is rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine.

It prescribes obligation of banking companies, financial institutions and intermediaries for verification and maintenance of records of the identity of all its clients and also of all transactions and for furnishing information of such transactions in prescribed form to the Financial Intelligence Unit-India (FIU-IND). It empowers the Director of FIU-IND to impose fine on banking company, financial institution or intermediary if they or any of its officers fails to comply with the provisions of the Act as indicated above.

PMLA empowers certain officers of the Directorate of Enforcement to carry out investigations in cases involving offence of money laundering and also to attach the property involved in money laundering. PMLA envisages setting up of an Adjudicating Authority to exercise jurisdiction, power and authority conferred by it essentially to confirm attachment or order confiscation of attached properties. It also envisages setting up of an Appellate Tribunal to hear appeals against the order of the Adjudicating Authority and the authorities like Director FIU-IND.

PMLA envisages designation of one or more courts of sessions as Special Court or Special Courts to try the offences punishable under PMLA and offences with which the accused may, under the Code of Criminal Procedure 1973, be charged at the same trial. PMLA allows Central Government to enter into an agreement with Government of any country outside India for enforcing the provisions of the PMLA, exchange of information for the prevention of any offence under PMLA or under the corresponding law in force in that country or investigation of cases relating to any offence under PMLA.

Composition of Adjudicating Authority
The Authority comprises three Members, one each from the fields of ‘Law’, ‘Administration’ and ‘Finance or accountancy’. Further, one of the Members is appointed as Chairperson of the Adjudicating Authority.   It functions within the Department of Revenue; M/o Finance of the Central Government with its headquarters at New Delhi.

Composition of Appellate Tribunal

The Tribunal consists of a Chairperson and two other Members. The Chairman and one Member of ATFP holds additional charge of the post of Chairman and Member of Tribunal under PMLA.

Friday, 15 January 2016

Securities and Exchange Board of India – Powers and Functions

The Securities and Exchange Board of India (SEBI) was enacted on April 12, 1992 in accordance
with the provisions of the Securities and Exchange Board of India Act, 1992. The SEBI is the regulator for the securities market in India.
The preamble of SEBI Act reads as, “An Act to provide for the establishment of a Board to protect the interests of investors in securities and to promote the development of, and to regulate, the securities market and for matters connected therewith or incidental thereto

Powers and Functions of the SEBI - As per section 11 of the SEBI Act, following are the powers and functions of the Board:-
         i.            regulating the business in stock exchanges and any other securities markets;
       ii.            registering and regulating the working of stock brokers, sub-brokers, share transfer agents, bankers to an issue, trustees of trust deeds, registrars to an issue, merchant bankers, underwriters, portfolio managers, investment advisers and such other intermediaries who may be associated with securities markets in any manner;

      iii.            registering and regulating the working of the depositories, participants, custodians of securities, foreign institutional investors, credit rating agencies and such other intermediaries as the Board may, by notification, specify in this behalf;
     iv.            registering and regulating the working of venture capital funds and collective investment schemes, including mutual funds;

       v.            promoting and regulating self-regulatory organisations;
     vi.            prohibiting fraudulent and unfair trade practices relating to securities markets;
    vii.            promoting investors’ education and training of intermediaries of securities markets;
  viii.            prohibiting insider trading in securities;

     ix.            regulating substantial acquisition of shares and takeover of companies;
       x.            calling for information from, undertaking inspection, conducting inquiries and audits of the stock exchanges, mutual funds, other persons associated with the securities market, intermediaries and self-regulatory organisations in the securities market;

     xi.            calling for information and records from any person including any bank or any other authority or board or corporation established or constituted by or under any Central or State Act which, in the opinion of the Board, shall be relevant to any investigation or inquiry by the Board in respect of any transaction in securities;

    xii.            calling for information from, or furnishing information to, other authorities, whether in India or outside India, having functions similar to those of the Board, in the matters relating to the prevention or detection of violations in respect of securities laws, subject to the provisions of other laws for the time being in force in this regard:

  xiii.            performing such functions and exercising such powers under the provisions of the Securities Contracts (Regulation) Act, 1956, as may be delegated to it by the Central Government;
  xiv.            levying fees or other charges for carrying out the purposes of this section;
   xv.            conducting research for the above purposes;

  xvi.            calling from or furnishing to any such agencies, as may be specified by the Board, such information as may be considered necessary by it for the efficient discharge of its functions;
xvii.            performing such other functions as may be prescribed. 

Management of the Board
The Board consists of the following:-
(a) a Chairman;
(b) two members from amongst the officials of the Ministry of the Central Government dealing with Finance and administration of the Companies Act, 1956;
(c) one member from amongst the officials of the Reserve Bank;
(d) five other members of whom at least three shall be the whole-time members, to be appointed by the Central Government.

The present Chairman of the SEBI is Upendra Kumar Sinha