Indian Judicial Service and Indian Legal Service on the anvil - TOI News

The Centre is finalising creation of two new all-India services -- Indian Judicial Service (IJS) and Indian Legal Service (ILS) -- to fulfil its promise to create 15,000 additional courts by 2012 and meet the demand for services of legal professionals from various departments of the Union and state governments.

"We will create two all-India services -- IJS and ILS -- mainly aimed at capacity building at the lower levels of judiciary and to provide professional legal advice to various departments," law minister M Veerappa Moily told TOI.

Though he was tight-lipped about the timeframe of the plan, the minister said the IJS would help attract talent from all over the country for appointment at the sessions judge level.

The ministry's Vision Document prepared last year had promised creation of 15,000 posts of judges for two years to tackle the huge backlog of nearly 2.5 crore cases in the trial courts. But, with that apparently not working out, the government is keen to add to the number of nearly 17,000 existing trial court judges by creating the IJS.

Explaining the need for ILS, the law minister said there was dearth of professional legal hands in various departments of the state governments and the Centre when it comes to seeking legal opinion on various day-to-day issues.

"On complex and constitutional issues, the Centre has the Attorney General, Solicitor General and a team of additional solicitors general to seek opinion from. The states too have the advocate general and a team of legal professionals. But they being required to attend the courts daily hardly have time to give opinions on all issues on the plate of various departments. Hence, creation of an all-India legal service would fill the void," he said.

The first law commission had proposed setting up of an All India Judicial Service, but the proposal was shot down in the law ministers' meeting in 1960. The All India Services Act, 1951, was amended in 1963 to include five more services other than IAS, IFS and IPS. However, by the Constitution 44th Amendment in 1976, it was provided in Article 312 that Parliament may by law provide for creation of one or more all-India service (including an All-India Judicial Service) common to Union and states.

A decade later in 1986, the law commission by its 116th report by then chairperson D A Desai to the Centre proposed a detailed draft of an All-India Judicial Service saying "what was considered unnecessary in 1946, after a lapse of three decades became a compelling necessity. And it does not require long arguments or a detailed analysis to reach the conclusion that a service organisation on an all-India level attracting talent from whole country would provide more competent service than the service organized at state level".

It is to be seen whether after 25 years of the law commission recommendation and several departmental proposals, the Centre would be able to put in place the two new all-India services.


Read more: Govt to create two new all-India services to meet legal demand - The Times of India http://timesofindia.indiatimes.com/india/Govt-to-create-two-new-all-India-services-to-meet-legal-demand/articleshow/6873044.cms#ixzz14nWV5omj

Transformation via Mobile Internet - www.economist.com

Mobile internet in emerging markets - How the mobile internet will transform the BRICI countries

BUYING a mobile phone was the wisest $20 Ranvir Singh ever spent. Mr Singh, a farmer in the north Indian state of Uttar Pradesh, used to make appointments in person, in advance, to deliver fresh buffalo milk to his 40-odd neighbours. Now his customers just call when they want some. Mr Singh’s income has risen by 25%, to 7,000 rupees ($149) a month. And he hears rumours of an even more bountiful technology. He has heard that “something on mobile phones” can tell him the current market price of his wheat. Mr Singh does not know that that “something” is the internet, because, like most Indians, he has never seen or used it. But the phone in his calloused hand hints at how hundreds of millions of people in emerging markets—perhaps even billions—will one day log on. 

Only 81m Indians (7% of the population) regularly use the internet. But brutal price wars mean that 507m own mobile phones. Calls cost as little as $0.006 per minute. Indian operators such as Bharti Airtel and Reliance Communications sign up 20m new subscribers a month.

In other developing countries, too, there are many more mobile phones than internet connections. In Brazil, Russia, India, China and Indonesia (the so-called BRICI countries), there are 610m regular internet users but a staggering 1.8 billion mobile-phone connections, according to the Boston Consulting Group (BCG). In a report called “The Internet’s New Billion”, BCG predicts that by 2015 there will be 1.2 billion internet users in these countries—dwarfing the total in America and Japan (see chart).

These new internet users will mostly log on via their mobile phones. This tends to be cheaper and easier than any other option. In Brazil, fixed-line broadband is often prohibitively expensive; in Russia, where it can be much cheaper, it is often unavailable. In India, where infrastructure is always a headache, it is hard to get a good basic landline, let alone broadband.

Poor people seldom have personal computers. In the BRICI countries, whose combined population is more than 3 billion, there are only 440m PCs. Many people use internet cafés, but these are inaccessible to rural folk. A connection in your pocket is far more convenient. 

Hordes of Indians will start using their mobiles to access the internet early next year when third-generation (3G) services, which allow subscribers to access the web, arrive. Kunal Bajaj, India director of Analysys Mason, a British consultancy, expects the take-up to be as fast—and as revolutionary—as it has been for mobile phones. “The telecoms companies have seen what happens when they drop prices. They’ve already tasted blood. The price wars will be just as aggressive,” he says.

The stakes are high. In developing countries, every 10 percentage-point increase in mobile-phone penetration yields an extra 0.81 percentage points of annual economic growth, according to a 2009 World Bank study. The mobile internet could be even more powerful. The unemployed will search for jobs online. Farmers in remote areas will find customised advice on crop planting.
The drawback of the internet is that you have to be literate to use it. That is a huge problem in India, where the literacy rate is only 60% (in China and Russia, it is over 90%). Mr Singh, the farmer, cannot read, so he cannot send text messages. He says he often needs help dialling numbers correctly, too.

Source - http://www.economist.com/node/16944020?fsrc=nlw|pub|11-17-2010|publishers

Trademark - Descriptiveness and Registration - from - Legal Blog.in

The Division Bench of the Delhi High Court has held that a descriptive word cannot be registered as a trademark. The decision was rendered in the matter Marico Ltd. v. Agro Tech Foods.

Marico, which uses the expressions “losorb” and “Lo-sorb” for its product Saffola and Sweekar, had filed the injunction application stating that it has coined the word and got the registration of it. However, the court held that the word was a common descriptive expression and while rejecting the appeal, held as under;

19. Our conclusion is that we have in fact totally failed to appreciate the argument as raised on behalf of the appellant. Surely, when rights are claimed over a word mark as a trademark and which word mark is in fact a mere tweak of a descriptive word indicative of the kind, quality, intended purpose or other characteristics of the goods, it is not open to urge that although the respondent is using the descriptive word mark in fact only as a part of sentence as a description (and even assuming for the sake of argument only the descriptive word mark in itself) alongwith another independent trademark, yet the use of descriptive words are to be injuncted against. How can it at all be argued that though the respondent is in fact shown to be using the disputed word(s) only with a descriptive intendment, yet, such use should be taken not in a descriptive manner but as a trademark. If we permit such an argument to prevail then what will happen is that what cannot be directly done will be indirectly done i.e., whereas the appellant is not entitled to succeed in the infringement action because the use by the respondent is in furtherance of its statutory rights of the user of the words which are descriptive of the kind, quality, intended purpose or characteristic of the goods, yet, merely because the appellant states that the respondent is using the same as a trademark, the same should be taken as infringement of the trademark of the appellant. Not only the plaintiff has no exclusive rights whatsoever to the trademarks because they are such which fall within the mischief of Section 30(2)(a), the respondent/defendant is always fully justified and entitled to use the descriptive words in any and every manner that it so chooses and pleases to do. If there are no rights of the plaintiff to exclusive user of the trademark then where does arise the question of disentitlement of a defendant to use the trademark of the appellant inasmuch as any person who adopts a descriptive word mark does so at its own peril in that any other person will also be fully entitled to use the same in view of a specific statutory rights thereto, and there are various other statutory rights including that under Section 30(2) (a), and which is what is being done by the respondent in the facts of the present case and its rights being further stronger because of the use alongwith the simultaneous use of its trademark "Sundrop". In the facts and circumstances of the present case, Section 30(2)(a) clearly applies in entitling the respondent to use the expression "WITH LOW ABSORB TECHNOLOGY" because that is only a descriptive use by normal English words in the English language indicative of the kind, quality, intended purpose of characteristic of the goods. There is no use of the expression "bonafide" in Section 30(2)(a) as is found in Section 35, and we do not propose to import in Section 30(2)(a) the expression "bonafide" because the subject matters of the two Sections i.e. Section 32(a) and Section 35 are though common on certain limited aspects, however the two sections do in fact operate in separate fields. Also looking at the issue in another way, "bonafide" aspect can in a way be said to be very much included in Section 30(2)(a) because the use of words which indicate their relation to the goods for the kind, quality, intended purpose or other characteristics etc. of the goods, is clearly only a bonafide user of the same and which "bonafideness" does not have to be additionally proved. In fact, there is ordinarily not only no lack of bonafides in using the normal descriptive word, and on the contrary there is in fact malafides of a plaintiff in adopting otherwise a descriptive word mark and for which adaption there is ordinarily an absolute ground for refusal of registration of the trademark. There is no malafides of the respondent as alleged by the appellant because the respondent is using the expression "LOW ABSORB" as part of a sentence in a descriptive manner and the respondent is also prominently using its own trademark "Sundrop", an aspect we have repeatedly referred to otherwise in this judgment. Merely because the respondent used "TM" earlier after the expression "LOW ABSORB TECHNOLOGY" is not such as to wipe out statutory rights/defences of the respondent. We are also of the opinion that once the person, against whom a suit is filed on the ground of infringement of a trademark which is in fact a descriptive word, then, if a defendant is using his own word mark as a trademark prominently in addition to the descriptive word mark which the plaintiff claims to be his trademark, nothing further is required to show the bonafides of the defendant against whom infringement of a registered trademark is alleged. In the facts of the present case, we have already adverted to in detail the prominent use by the respondent of its independent trademark "Sundrop", and, the fact that the expression "LOW ABSORB" is being used only as part of the sentence which reads "WITH LOW ABSORB TECHNOLOGY".

20. We may however note that when two identical trademarks are used by two parties in the market, or that a use of a descriptive word by a defendant can be confused with the trademark of a plaintiff, then a Court is always entitled to ensure that such distinction is brought or conditions are imposed qua the two identical or deceptively similar trademarks by imposing such conditions of use on both or either of the parties so that a third vital/important stakeholder in these Intellectual Property Rights (IPR) disputes viz. the public, is not in any manner deceived/confused and whose rights are not prejudicially affected. This has been held by us in a recent judgment in Cadila Healthcare Ltd. Vs. Diat Foods (India) decided on 29.9.2010, in which this Court (speaking through Sanjay Kishan Kaul, J) has relied upon another Division Bench judgment of this Court in the case of Goenka Institute of Education and Research Vs. Anjani Kumar Goenka & Anr. AIR 2009 (Delhi) 139: 2009 (160) DLT 417 as also Section 12 of the Act and held the entitlement of a Court to issue directions to ensure that there is no confusion in the public with respect to two separate products which are sold under identical or deceptively similar trademarks. Of course, in this case of Cadila Healthcare Ltd. use by the respondent/defendant was not as a trademark but only in the descriptive sense, and yet, to avoid confusion to the public, directions were issued. Similar would be the entitlement of a Court afortiorari when two parties use same or deceptively similar descriptive word marks as trademarks.

CONCLUSIONS

21. The following conclusions thus emerge:-

(i) A mark which is sought to used as a trade mark, if, is one falling under Section 9(1)(a) to (c), then the same ordinarily ought not to be afforded protection as a trade mark.

(ii) Before the marks which fall under Section 9(1) (a) to (c) are given protection as a trade mark, the distinctiveness must of an undisturbed user of a very large/considerable number of years, with the emphasis being on discouragement on appropriation of such marks which fall under Section 9(1) (a) to (c).

(iii) A civil court in a suit filed for infringement of a registered trade mark is entitled (if there is no earlier judgment which has achieved finality in cancellation proceedings) to consider the validity of registration for the purpose of passing an interlocutory order including of grant or refusal of an interim injunction- once the objection as to invalidity of registration is taken up in the pleading/written statement.

(iv) A trademark which falls under Section 9(1) (a) to (c) cannot be registered on proposed to be used basis. Evidence on distinctiveness with respect to trade marks falling under Section 9(1) (a) to (c) should be the evidence of user evidencing distinctiveness as on the date of application for registration or at the best of evidence up to the date of registration.

(v) In infringement actions the court is entitled to consider the evidence of distinctiveness up to the date of registration for the purpose of passing any interlocutory order and not evidence showing distinctiveness post registration. However, in cancellation proceedings evidence of distinctiveness post registration of the trade mark can also be considered.

(vi) Even if there is finality to registration of a trade mark, yet the defendant in infringement action can take statutory defences under Sections 30 to 35 to defeat the infringement action.

22. In view of the above, we find that the appeal is not liable to succeed. The appellant does not have a prima facie case in its favour in view of the above discussion. The balance of convenience is in favour of the respondent who will be caused grave and irreparable injury if the injunction as prayed for is granted. The law is that as an appellate Court we should not interfere with the well reasoned judgment of learned Single Judge in terms of Skyline Education Institute (India) Private Limited Vs. S.L. Vaswani and Another (2010) 2 SCC 142. The appeal is therefore dismissed. We may state that ordinarily being a commercial matter where giant companies can afford to pay costs we would have imposed actual costs on the appellant, however, we desist from doing so because there is no authoritative pronouncement of a Division Bench of this Court on certain aspects we have dealt with in this judgment including with respect to an entitlement of a plaintiff to an infringement action with respect to a descriptive word trademark and related word marks which are otherwise such for which there is an absolute ground for refusal of registration.

International Law of Drones - From "Legalperspectives"

Viewed in multi-dimensional perspective, law follows the society. This proposition stands affirmed with the law being examined as a tool of social regulation and thus requiring adaptation such as to meet the changed social dynamics. Thus law evolves along with the evolution of law. A recent article entitled "The International Law of Drones" published by Mary Ellen OʼConnell under the aegis of American Society of International Law in this context "surveys the international law applicable to the recent innovation of weaponizing drones". Tracing the rise of drones and particularly 'attack drones' in recent times, the paper goes on to explore the need for 'special rules for drones' under International law.

In all, the paper provides interesting insights in the law-making process which culminates into rules of international standards and thus international law itself in the context of this new-found weapon of destruction. While the paper concludes that "drones have not created a revolution in legal affairs" and that "the current rules governing battlefield launch vehicles are adequate for regulating resort to drones", the paper does advocate further research to be undertaken in order

"to understand the psychological effects of deploying unmanned vehicles and the effects on drone operators of sustained, close visual contact with the aftermath of drone attacks". In all, an insightful discussion.

Source - http://legalperspectives.blogspot.com/2010/11/international-law-of-drones.html

Res Judicata and Special Statutes - From :- indiacorplaw.blogspot.com

The rapid proliferation of Tribunals in India has perhaps masked an allied, and yet facially less controversial feature of adjudication – the growth of special statutes and the creation of jurisdictional courts to resolve disputes arising out of those statutes. Facially, no constitutional vice attaches to such statutes – indeed, it is often the ordinary civil court that is designated as the jurisdictional court under the special statute. This, however, has at times obscured the important point that although the same court hears the dispute, it exercises a different type of jurisdiction. This has interesting consequences on a wide gamut of procedural and substantive stages of litigation – one of which the Supreme Court considered recently, in Md. Nooman v Md. Jabed Alam.

The issue before the Court in Nooman was whether a finding as to title in a suit for eviction operates as res judicata in a subsequent suit for declaration of title. To illustrate the implications of this judgment on the impact of findings under special statutes, it is necessary to give a somewhat elaborate account of the facts. In Nooman, a suit for eviction was instituted in 1973 in the Munsif Court in Arrah by the plaintiff. Her case was that she had acquired the suit property from her mother-in-law through a Registered Sale Deed in 1957, and relied on mutation in the revenue and municipal records to support title. The defendant tenant, her brother-in-law, ran the opposite case, claiming that the property in fact belonged to him, as it had been gifted to him by his mother. The Trial Court framed seven issues, of which Issues 3 and 4 were, respectively: “Has the plaintiff got title to the suit land” and “Is the sale deed valid…” Both parties adduced detailed evidence in support of these claims and examined witnesses.

The Trial Court found for the plaintiff on Issues 3 and 4 above, but dismissed the suit because she had not proved the existence of a landlord-tenant relationship between the parties, and since it is a rule of procedure that an eviction suit cannot be converted into a declaratory suit. Appeals were dismissed. In 1979, the plaintiff filed a Title Suit against the defendant tenant, seeking declaration and recovery of possession. The parties ran exactly the same case, and the issues the Trial Court framed were, inter alia, “Has the Plaintiff got title over suit property” and “Is there any relationship of landlord-tenant”. The Trial Court once again found for the plaintiff on the title issue, and decreed the suit, finding that she had proved the landlord-tenant relationship. An appeal was filed against that judgment, and the appellate court, after reappraising the evidence, held that the plaintiff had not proved title, and dismissed the suit. The High Court reversed, finding that the judgment of the Rent Court operated as res judicata on the question of title. By the time the Supreme Court considered this question, both parties had died, and been substituted by legal representatives.

The short issue before the Supreme Court was res judicata. As is well known, res judicata is governed by s. 11 of the Code of Civil Procedure, 1908 [“CPC”], which reads as follows:

11. Res judicata.—No Court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a Court competent to try such subsequent suit or the suit in which such issue has been heard and finally decided by such Court [emphasis added].

On the face of it, this provision extends the operation of res judicata if the court that decided the issue was either competent to hear that suit, or would have been to hear the suit in which res judicata is raised. Explanation VIII goes further and provides that an issue heard and finally decided by a court of limited jurisdiction shall operate as res judicata in a subsequent suit.

The Supreme Court affirmed this conclusion, although, surprisingly, it did not refer to the provisions of s. 11 CPC. The contrary argument proceeded on the premise that the Rent Court satisfies itself only that there is prima facie title, for it is not competent to determine title except as incidental to a determination of the rights of the landlord and the tenant. This argument was rejected on the basis of Mr Justice Meredith’s observations in a 1949 decision of the Patna High Court, which are as follows:

The decision in a rent suit is not res judicata on the question of title unless the question of title had to be decided, was expressly raised, and was expressly decided between the parties and in each case it is necessary to examine carefully the decision in the rent suit before any opinion can be formed as to whether it operates as res judicata on the question of title or not. Ordinarily the decision would be res judicata only with regard to the existence of the relationship of landlord and tenant…

It is submitted that the Supreme Court was clearly correct in reaching this conclusion. It is, however, important to resist any temptation to conclude that the test advanced by Mr Justice Meredith is wider than s. 11 CPC r/w Explanation VIII, although that suggestion is not implausible on the plain language of the text. The more precise tests in the test above are best seen not as supplanting or amplifying the statutory formulation, but as offering courts useful indicators of when the statutory test is likely to be satisfied.

Source - indiacorplaw.blogspot.com

Bhopal Tragedy Continues - dissidentvoice.org

The Ongoing Legacy of Bhopal: Injustice and Anti-corporate Resistance

by Paul Cochrane 

The Sambhavna Trust Clinic (STC) receives over 180 victims of the Union Carbide gas leak everyday. It has to turn away patients as it lacks the resources to treat them all. The STC refuses to take corporate donations, not wanting to play into the PR propaganda machine, and is wary of the motivations of NGOs. “We think there is a need for space free from corporate manipulation,” said Satinath Sarangi, managing trustee of the STC.

The clinic is just 400 meters away from where 40 metric tonnes of lethal Methyl Iso-Cynate (MIC) gas billowed from the Dow Chemical subsidiary Union Carbide factory in 1984, exposing over 500,000 people, instantly killing some 8,000, and causing 25,000 deaths in the past 26 years. Today, some 120,000 to 150,000 people are chronically ill from exposure to MIC, approximately 10% of Bhopal’s population.

The MIC factory is visible from the second floor of the clinic, which was purposely built in the vicinity to treat the worst affected in a highly impoverished area of the city, with 24,000 Bhopalis registered with STC for long-term care.

The list of medical conditions is long, from respiratory problems, nerve disorders, blindness, chronic obstructive pulmonary disorder, brain damage, paralysis and gastric issues, to reproductive problems and stunted growth in children. According to a 2010 paper by the American Journal of Industrial Medicine, titled “Effects of Exposure of Parents to Toxic Gases in Bhopal on the Offspring,” of women pregnant at the time of exposure, 43.86% lost their child.

“Our data are suggestive of delayed growth of the male until puberty and some slowing of growth of the female after attaining puberty,” the report further states.

Gas exposure also weakened immune systems, which has resulted in survivors more prone to die of disease, whether malaria, tuberculosis (TB), typhoid or dengue fever.

“TB is four times higher here than elsewhere in the country as the immune system is weakened, according to studies by London School of Hygiene & Tropical Medicine,” said Sarangi. “The researcher, Dr Neil Andersson, said Bhopal was like chemical aids.”

A festering wound

The MIC gas leak in Bhopal ranks as one of the world’s worst industrial accidents, and is a glaring case of justice denied. It is a tragedy, and one that has been made far worse than it ever should have been by the criminal negligence of Union Carbide/Dow Chemical (UC/DC) and the Indian authorities. Both parties (the Indian government and Indian stakeholders had a 49.1% stake) have downplayed the number of deaths, the number of victims and withheld information on what happened that fateful night at the factory, as well as locking survivors into decades of legal battles in their quest for compensation. UC/DC absconded from its legal charges in India and the CEO at the time, Warren Anderson, has not been extradited from the US to India to face charges brought against him – an effigy of him is burned every year on the anniversary of the tragedy in Bhopal. On top of all of this, there has not been a thorough clean up of the MIC’s factory, its surroundings and the ponds full of toxic sludge.

When compensation has come, it has been woefully inadequate. UC/DC paid out just $470 million in compensation, which the Indian government then sat on for years earning interest before reluctantly doling out the money in 2004. Survivors got just 25,000 Rupees ($555) each, of which many had already spent significant amounts on doctors, lawyers, transportation and bribery to get their cases to court. Compare that to the amount the US government forced BP earlier this year to stump up for the Gulf oil spill – $20 billion.

“There is clear double standards and racism. Dow Chemical has accepted the charges against Union Carbide in the US, whereas in Bhopal they say they are not liable. And there are many parallels with the BP oil spill. Information was similarly suppressed there,” said Sarangi. “What has happened here in Bhopal is a guidebook for how to escape corporate liability,” he added.

As Sanjay Verma, a baby at the time of the leak who survived due to his sister wrapping him tightly in blankets (the other 8 members of his family died of gas exposure), said: “Wounds heal over time, but in Bhopal the wounds get worse.”

It is also a lingering wound for Dow Chemical’s “brand name” through its refusal to deal honestly with the tragedy. The disaster, which has become synonymous with Bhopal, is forever a black mark against Dow. You can run, but you can’t hide.

Bhopal has become a clarion call for activists and the anti-globalization movement, a poster of the “true face of globalization” and the dark side of the “new world economy” where a multi-billion dollar company can get away with murder in a country where 80% of the population lives on less than $0.50 a day and through connivance with a government ready to pander to foreign companies in the ceaseless desire for capital. It is as crystal clear a case as you can get of profit before people.

Yet while Bhopal shows that while a crime can be committed and go essentially unpunished, it won’t be forgotten. It is a simmering issue with Indians and many around the world. Indeed, Verma, a local fixer, said he assists on average two journalists every month and dozens during the lead up to the anniversary. Bhopal is that rare thing, a continuous, ongoing media story.

“The Bhopal issue is still very potent, that even after so many years Bhopal is still a crack in the system, and lays bare corporations and government lackeys for what they truly are,” said Sarangi.

A blow to US-India relations?

Bhopal is complicating US-India relations. In August, Delhi passed a law that could make nuclear power companies liable for damages in the advent of an accident, which has become a concern for US nuclear players eager to get in on India’s 123 Nuclear Agreement with the US that was signed in 2008 to develop civilian nuclear power.

Indian politicians, including the right wing BJP party, want the Bhopal tragedy to be raised with Barrack Obama when he visits India this coming week. Even if it is not broached, Bhopal will be a cloud over the president’s first visit to India. Four leftist political parties, activists and survivors of the gas leak will descend on the capital to picket Obama, and have called for a “a countrywide day of protest” on Nov. 8, for “justice for the victims of the Bhopal Gas accident” along with withdrawing troops from Afghanistan and ending funding to Israel. “We are going to Delhi to be heard at Obama’s visit,” said Sarangi.

But while issues of terrorism, strengthening bilateral ties and the usual mumbo-jumbo will be on the table when Obama visits, business will of course get a top billing.

“Obama is coming with the largest ever entourage of business representatives to get deals in India, but there has not been a single step to ensure that companies should abide by the law of the land or listen to the courts,” said Sarangi. He added that the United States-India Business Council (USIBC) will do what it can to prevent such laws being applied to US companies and for Anderson to not be extradited. “The USIBC has played a prominent role in the continued injustice of Bhopal,” he said.

Getting Anderson into an Indian dock seems unlikely. He is 89 and retired, and with no Mossad-like agency to track him down like members of the SS guilty of Holocaust atrocities and crimes against humanity, Anderson can continue his pampered existence in the Hamptons. Moreover, it would set a bad precedent if the US handed him over. It would mean that could happen again, opening a Pandora’s Box for corporations and management wanted for breaking laws around the world. Moreover, as the financial pundits say, it would discourage US and foreign investment in India.

“No Hiroshima, No Bhopal, We Want to Live” is carved under a sculpture to the victims of the gas leak outside the UC factory. Let us hope not, but while pressure will continue to be put on the US government and Dow Chemical, the system is still operating to the mantra “business as usual” and India is keen to strengthen its ties with Washington. But the momentum is still there and the Bhopal tragedy refuses to go away.

Although there are very few positives in the aftermath of the Bhopal gas tragedy, lately there have been some developments. In June, a court sentenced seven former Union Carbide employees, all Indian, to two years in prison and fined 100,000 Rps ($2,100) each. The former Indian arm of Union Carbide was convicted of negligence and fined 500,000 Rps ($10,600). Some 26 years later, it is a case of very overdue justice, even if not severe enough, as activists rightly point out.

The authorities also decided to provide further compensation to those that lost a relative in the tragedy – although not to survivors – of 1 million Rps ($22,000). The issue now is whether people will get that amount, and what they are due.

Bring back the dead

Shamshad Begum lives in a one-room house down a small alleyway off Union Carbide Road, which flanks the MIC factory. When the gas escaped from the factory at five past midnight on December 2, 1984, Begum ran with her husband and two daughters, leaving her mother in law and young son behind as they weren’t able to move. “Bodies filled the roads. The gas was a blue colour, my throat felt bitter and we were all choking. I felt like I wasn’t going to survive, I was going to die, and I thought it better to die than breathe. My daughter’s eyes turned red, like a flame,” she said.

Her mother-in-law died that night, her son the next day. In the following years, she lost three children during pregnancy. A second son died in 1988, her eldest, married daughter is sick all the time, and her 15 year old daughter suffers from lung problems – yet she doesn’t want her to know – while her husband died three years ago from gas related side effects. “I’ve lost half of my family due to the disaster,” she said. “My husband got 25,000 Rps for the death of his mother. But in the end, when he was dying, he suffered a lot; what is 25,000 Rps?”

Without a husband or son to earn money, Begum struggles to survive on a widow’s pension of 150 Rps ($3.33) a month and renting out the next door room to migrant labourers for 400 Rps ($8.88) a month. Begum is hopeful that she will be given the 1 million Rps in compensation for her husband’s death and be entitled to a further million for the death of her mother in law so she can move away from Bhopal to live in “a clean and healthy place.” But Indian bureaucracy is not helping matters. “We submitted original death certificates and documents years ago, and now they want the originals again, but they have them, so there’s more paper work to do to get them back. They are delaying everything,” she said.

“I want to give a message, that corporations shouldn’t be allowed to operate that kill people and make them sleep forever,” said Begum. “I would tell them [UC/DC], give us the people back who died from our families, not compensation, give them back to us.”

A poisoned soil waste dump

For visitors and the press to enter the abandoned Union Carbide factory they need to get permission from the Deputy Collector (Gas Relief) in Bhopal, which typically takes 24 hours. This must be presented to the policemen at the entrance to the factory who then guide visitors around the site. Locals however do not need such paperwork, they can simply walk into the compound from the slums that surround the factory to scavenge for wood, graze their livestock or relax in the shade of the vegetation. The crumbling factory, offices and buildings aside, it is green and lush place, full of trees and tall grass. Chipmunks scurry about and birds twitter in the tree tops. It resembles a park in the middle of a city. But as a stencil on the outside wall of the factory states under a skull and cross bones, this is a “poisoned soil waste dump”.

One of the laboratories is totally open, the windows smashed and no locks on the doors, while bottles of chemicals are stacked up covered in cobwebs. A photojournalist last year moved one of the bottles for a shot of the label; he was later hospitalized for coming into contact with a dangerous chemical.

Visitors are warned not to touch anything and immediately after the tour wash their clothes and footwear. There is plenty of toxic waste and dust around, and the steel structure of the factory is slowly disintegrating along with the vats and containers that held lethal chemicals.

At one end of the complex is a “serious contaminated zone,” which still reeks of chemicals. Only now is a wall being built to ostensibly keep people out, but there are plenty of gaps for locals to enter. And despite the wall, there are toxic ponds outside of the complex where people take livestock to drink, wash clothes and around which children play. The mud is also dug up to use as flooring for dwellings.

On the sides of the ponds, the black plastic lining used to contain the sludge is visible, UC having used a process of solar evaporation for the waste. In the dry season, the earth is covered in a thick white coating. This waste has entered the ground water and polluted the drinking water. Most water pumps have been turned off, but some remain and the government has been lax about getting piped clean drinking water to residents that live on what is a huge toxic dump.

One building inside the complex houses 350 metric tonnes of chemicals rotting away, locked but not sealed from the elements. What the impact is of storing these chemicals in the compound is not known. But the whole area, the vegetation included, is contaminated, according to research by Greenpeace. The site should be torn down and the waste safely disposed of, and not in the way the authorities did in the past when it transported 40 tonnes of waste to an incinerator in a nearby town without telling the residents. Not designating the area a contaminated zone is akin to the Ukrainian government letting people continue to live right beside the Chernobyl nuclear power plant.

Nearly 26 years after the disaster, there is still no justice and no environmental clean up, while victims continue to die from exposure and children continue to suffer. Bhopal is an issue that won’t go away until justice is finally achieved.

Source - http://dissidentvoice.org/2010/11/the-ongoing-legacy-of-bhopal-injustice-and-anti-corporate-resistance/

End of BCI as we know it? Law min’s draft Bill to create lawyers’ super-watchdog | News | Legally India

End of BCI as we know it? Law min’s draft Bill to create lawyers’ super-watchdog | News | Legally India

The law ministry has proposed a new statute that partly supplant the functions of the Bar Council of India (BCI) with a new super-regulator called the Legal Services Board that will oversee the regulation of legal practice, client service, legal education and make it obligatory for lawyers to provide free legal aid.

The Legal Services Board would be established under a new Act called the Legal Practitioners (Regulations and Maintenance of Standards in Professions, Protecting the Interest of Clients and Promoting the Rule of Law) Act, 2010, which was published on the law ministry's website last week.

Modelled on the lines of the Legal Services Board in the UK, the statement of objective reads that it would make provision for “the regulation of persons who carry out the activities of legal practitioners”, establish an ombudsman and a scheme for complaints against the professionals and set out the rules of the provision legal services free of charge.

As proposed in the current form, the Act consists of six chapters with Chapter Three dealing with the constitution of the Board in Part I, the consumer panel in Part II and ombudsman in Part III. The relationship between the Board and the bar councils is discussed under Part II of Chapter IV, with the board having the power to direct the bar councils to take actions and to publicly censure the councils for their acts or omissions. The draft Act is silent on detailed rules of ethics or the practice of law in India by foreign lawyers.

“The BCI has not been towing the law ministry's line. They are trying to clip its wings,” commented one Indian law firm partner with knowledge of the draft.

Bar Council watchdog or replacement?

The new Board would exercise supervisory jurisdiction over all the Bar Councils including the BCI as per sections 29, 30, 31, 32, 33 and 34 of the draft Act and “may do anything calculated to facilitate, or incidental or conducive to, the carrying out of any of its functions”.

Notwithstanding the Advocates Act 1961 the Board “must” also assist in the “maintenance and development of standards” in relation to the education and training of legal professionals and “regulation approved by the [BCI] in relation to the activities of the advocates”.

Widened legal profession?

The 1961 Advocates Act’s definition of “practice of law” was famously examined in the Lawyers Collective case in late 2009 and held to include not just court-based legal work, although it stepped short of deciding whether chartered accountants, company secretaries, in-house counsel or legal process outsourcing (LPO) companies practised law.

But the new draft Act widens its own application from just advocates under the 1961 Act to the newly defined term “Legal Professionals”, which it states also includes tax practitioners, trademark and patent services and “other professional services where legal issues are involved”.

Ombudsman for complaints and board

One of the unique aspects of the proposal are that for the first time an ombudsman would be appointed to investigate complaints against lawyers in India. Currently disciplinary proceedings against lawyers are handled by state bar councils. Under the proposal the ombudsman would be able to publish and recommend reports that would be forwarded to the state bar councils for action.

The Legal Services Board would have a chairman who would be appointed by the President of India in consultation with the Chief Justice of India (CJI) and the chairman of the BCI, a member-secretary appointed by the Central Government in consultation with the CJI and the BCI chairman, and Central Government-chosen members representing various parts of the nation who would be appointed by the Government in consultation with the CJI and BCI’s Chairman.

The Board may appoint a chief-ombudsman and regional ombudsmen, with state ombudsmen being selected from district court judges.

Duty to give free legal aid

Under section 27 “every Legal Practitioner shall be duty bound to give free legal services to the financially weaker consumers/clients who fall just above the income levels prescribed under Section 12(h) of the Legal Services Authorities Act, 1987”.

Government to fund

The new Board’s administrative expenses including remuneration of its staff would be funded from the Indian government’s Consolidated Fund of India, with drawings needing to be authorised by Parliament. The Board may also be entitled under the Act’s section 11 “as the case may be” to a share of the Rs 25 stamp duty charged to advocates filing vakalatnama in court.

By contrast, the BCI and state bar councils receive no government money at all but have only been funded through money received by admitting law colleges, certain stamp duties and fees of advocates’ enrolment. For the BCI, law college admissions have traditionally made up a large share of its revenues.

Consultation period

The proposal is currently at a nascent stage with the ministry’s department of legal affairs having invited recommendations to the draft within 30 days from all stakeholders including the public at large, members of the legal fraternity and academicians. The draft would be placed before the Parliament for further discussion and debate only after receiving the desired feedback.

Click here to download the full draft Bill and proposal.

Court allows assignment of debts between banks - International Law Office

Court allows assignment of debts between banks - International Law Office

In ICICI Bank India Ltd v Official Liquidator of APS Star Industries Ltd(1) the principal question for consideration by the Supreme Court in a batch of civil appeals was whether the assignment of debts between banks was an impermissible activity under the Banking Regulation Act 1949 and whether, as a result, all executed contracts of assignment of debts were illegal.

Facts

In Civil Appeal 8393/2010 a deed of assignment was executed between Bank A and Bank B, whereby Bank A, as the assignor, agreed to sell and assign to Bank B (the assignee) all debts, together with interest on an 'as is, where is' basis. Bank B, in turn, had agreed to acquire the said debts on an 'as is, where is' basis. In consideration of Bank B paying the purchase price to Bank A for the purchase of the debts, the assignor had agreed to assign absolutely to the assignee on an 'as is, where is' basis, without the assignee having any recourse to the assignor. Consequently, Bank B became the full and absolute legal owner of the debts and, as such, the only party legally entitled to receive the repayments of debts.

Pursuant to the execution of the deed of assignment, Bank B initiated a company application in certain winding-up proceedings pending before the Company Court against one of the borrowers of Bank A, with the aim of being substituted in place of the original secured creditor, Bank A. The company application for substitution was moved at a stage of the provisional/final winding-up proceedings. In its application, Bank B maintained that according to the Banking Regulation Act, read with the relevant Reserve Bank of India Guidelines of July 13 2005, the sale and purchase of debts could be sold by loaners and purchased by banks or financial institutions as assignees. Since winding-up proceedings were pending before the Company Court at various stages, including the stage of disposing of the properties of the liquidated company, Bank B submitted that it had approached the Company Court to be substituted in place of the original secured creditor for the purposes of claiming relief.

However, the borrower company contended that the deed of assignment had not lawfully given the assignee the right to step into the shoes of the secured creditor, Bank A. The Company Court held that the rights as claimed were not acquired by Bank B through any process known in law, and that therefore Bank B could not be permitted to be substituted in place of Bank A as the secured creditor of the company in liquidation. Aggrieved, Bank B appealed to the Division Bench of the High Court. The High Court upheld the order of the Company Court on the grounds that the assignment of debts by banks was not an activity permissible under the Banking Regulation Act, and that consequently, the impugned deed of assignment was illegal and Bank B was not entitled to substitution in the place of Bank A.

Submission to Supreme Court

Bank
Before the Supreme Court, Bank A argued that neither the assignor bank nor the assignee bank had ever traded in the debts. The reasons advanced were that the assignor bank had never purchased debts in the first place and had merely advanced loans against security which was a part of its banking business. It was contended that the assignor bank had decided to dispose of the debts along with the underlying security only once the same had been adjudged as non-performing assets.(2) Insofar as the assignee bank was concerned, it was similarly argued that it had merely acquired the debt along with the underlying security and had not sold the same, as is characteristic of the aspect of trading.

It was also argued that as 'banking companies' that were still companies incorporated under the Companies Act 1956, they were juridical entities that were inherently entitled to assign their debts. Making reference to the Reserve Bank of India Guidelines, it was also argued that a perusal of its contents would clearly indicate that the activity of banking was not confined merely to the core activities enumerated in Section 5(b) of the Banking Regulation Act, but also the ancillary business of banking regarding the assignment of debts.

Borrower company
The borrower company, on the other hand, argued that the business of banking is founded on the definitions of 'banking' and 'banking company' under Sections 5(b) and (c) of the Banking Regulation Act, and which restrict the same to accepting for the purposes of lending or investment, deposits of money. Such banking business, it argued, could by no stretch include the activity of assigning debts by accepting deposits under Sections 5(b) and (c).

The borrower company further argued that the assignment of the debt to Bank B transferred not only the right to recover the debt, but also the obligations arising thereunder, "as if they were executed by the clients of [Bank A] in favour of [Bank B]". According to the borrower company, such an assignment could never carry with it the assignment of the corresponding obligations of the assignor, unless there was a novation of the contract by all parties. It was submitted that in the absence of any novation, the deed of assignment was legally unsustainable.

Decision

Business of banking
The court categorised the functions of a banking company into two parts: the core function of accepting deposits and lending, and miscellaneous functions and services.

Referring to Section 6(1) of the Banking Regulation Act, the court observed that it was clear that in addition to the core business of banking, a banking company can also engage in one or more of the forms of business enumerated in Section 6(1)(a) to (o), including:

"doing all such other things as are incidental or conducive to the promotion or advancement of the business of the company and any other form of business which the Central Government may notify."

The court held that it was clear that apart from the principal business of accepting deposits and lending, the provisions of the Banking Regulation Act leave ample scope for banking companies to venture into new businesses, subject to the regulatory oversight of the Reserve Bank of India.

The court classified the aspect of assigning non-performing assets/debts between banks as falling under Section 6(1)(a), read with Section 6(1)(n) of the Banking Regulation Act, and observed that such functions of banks are subject to the regulatory supervision of the Reserve Bank of India for the purpose of developing a healthy secondary market. The court also upheld the validity of the impugned Reserve Bank of India Guidelines issued under Sections 21 and 35A of the Banking Regulation Act, and observed that the assignment of non-performing assets between banks is a legitimate activity undertaken by banks with a view to cleaning up their balance sheets so as to raise the capital adequacy ratio.

Does assignment of debt result in assignment of corresponding obligations?
Dismissing the contention of the borrower company, the court emphasised that the debts were assets of the assignor bank, and as such could always be transferred without affecting the rights or interests of the borrower company. The court held that the High Court had erred in failing to appreciate that the assignor bank was only transferring its rights under a contract and its own asset (ie, the debt), without in any manner affecting the rights of the borrower in the contract or in the assets. On considering the relevant clauses in the impugned deed of assignment, the court held that it was manifestly clear that no obligations of the assignor were assigned to the assignee. In fact, only the account receivables in the books of Bank A were assigned.

In the circumstances, the High Court's order regarding the question of assignment of debts as an activity permissible under the Banking Regulation Act was set aside.

Comment

The judgment comes as a welcome step towards addressing some of the outstanding issues relating to the nascent asset-backed securitisation market in regard to the purchase of a pool of debts by one bank from another.

For further information on this topic please contact Manu Nair or Saanjh Purohit at Amarchand & Mangaldas & Suresh A Shroff & Co by telephone (+91 11 2692 0500), fax (+ 91 11 2692 4900) or email (manu.nair@amarchand.com orsaanjh.purohit@amarchand.com).

Endnotes

(1) Civil Appeal 8393/2010 (arising out of SLP(C) 2240/2009), with Civil Appeal 8394-8406/2010 (@ SLP(C) 2241-2253/2009), Civil Appeal 8407-8425/2010 (@ SLP(C) 2254-2272/2009), Civil Appeal 8426/2010 (@ SLP(C) 25151/2009), Civil Appeal 8427/2010 (@ SLP(C) 20617/2009).

(2) When a borrower that is liable to pay to secured creditors defaults in repaying secured debt or any instalment thereof, the account of the borrower is classified as a non-performing asset.