Any 'THIRD PERSON' other than an Intermediary could also be held liable for "Front Running": Securities Appellate Tribunal (SAT)

In a landmark judgment (Vibha Sharma & Anr. v. SEBI) passed by the Securities Appellate Tribunal (SAT) on 4^th Sept. 2013, the tribunal has held that even a “third person” other than an intermediary could also be held liable for ‘front running’ under SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (“FUTP Regulations”). This case is of immense importance as SAT has finally clarified the position of law on matters concerning front running by third persons. Also, the ruling of SAT in the instant case is significant for the reason that SAT had on the contrary, in 2012, in the case of "Dipak Patel" held that only intermediary could be held liable for the offence of front running and not third person under the FUTP regulations.

Now, before moving on to discuss the reasoning of the tribunal, let’s first comprehend what exactly is “front running”. Front running means buying or selling of securities ahead of a large order so as to benefit from the subsequent price move. This denotes persons dealing in the market, knowing that a large transaction will take place in the near future and that parties are likely to move in their favour[1]. Now, this can be best understood through an illustration: Stockbrokers and traders often have access to inside information regarding the investment plans of their firm. Brokers and traders might be lured to use this insider information to make investments that benefit them personally. Suppose a stockbroker at an investment bank has learned that his bank's executive board will purchase 100,000 shares of Company XYZ stock in the coming week. Knowing that this large purchase will push up the price of the stock, the stockbroker purchases 100 shares of Company XYZ for his personal account, hoping to profit from the price jump.

Now, we shall discuss the facts, arguments advanced by both the parties and the tribunal’s reasoning for holding the appellants guilty of ‘front running’.

SEBI Updates: Circular on Investor Grievance Redressal Mechanism

In order to make investor grievance redressal mechanism at Stock Exchanges more effective, Securities and Exchange Board of India (“SEBI”) has decided to shorten the time taken for the proceedings as well as to give monetary relief to the investors. Further, it has been decided to provide monetary relief to the investor. Vide circular dated October 28, 2004, SEBI had notified Comprehensive guidelines for Investor Protection Fund/ Customer Protection Fund at Stock Exchanges. Further, other two circulars, dated August 11, 2010 and January 20, 2010, had notified Arbitration Mechanism and Investor Grievance Redressal Mechanism respectively. The latest circular [favourable to investors], dated September 26, 2013 has the following important features:

         

(Image Source: Smart Business Solutions)

Ø  ØStock Exchanges shall ensure that all complaints are resolved at their end within 15 days. The correspondence with the Member & investor (who is client of a Member) may be done on email.

Ø  ØWhere the matter is not resolved, the conciliation process will start. The Investor Grievance Redressal Committee (IGRC), while resolving the dispute amicably, should adopt a two-fold approach: (i) Consumer Related Complaints - Direction to the Member to render required service; (ii) Trade Related Complaints - an order concluding admissibility of the complaint or otherwise.

Section 27 of the Arbitration and Conciliation Act, 1996 is an 'Enabling Provision' : Supreme Court

Section 27 of the Arbitration and Conciliation Act, 1996 (“1996 Act”) provides that an arbitral tribunal, or a party with the approval of the arbitral tribunal, may apply to the court for assistance in taking evidence. On Monday, the Supreme Court of India (“Supreme Court”), in the case of Delta Distilleries Limited v. United Spirits Limited & Ors,[1] has to deal with the scope of Section 27 of the 1996 act. In this post, I am explaining the relevant parts of the judgment.

(Image Source: Smooth Transitions Law Blog)

Facts: In the present case, a judgment of the Bombay High Court (“High Court”) had been challenged wherein an arbitration petition, filed by United Spirits Limited (“Respondent” before the Supreme Court), was allowed. The arbitration petition had sought to invoke the powers of the court under Section 27 of the 1996 Act. The Respondent had filed arbitration petition before the High Court when Delta Distilleries (“Appellant” before the Supreme Court”), on being ordered by the arbitral tribunal, refused to produce sales tax assessment orders. It was the contention of the appellant that such orders were highly confidential and cannot be produced before the arbitral tribunal.  Further, it was contented, for the first time before the High Court, that appellant was not in possession of those sales tax orders. The contention was rejected by the High Court. Apart from these contentions, it was further submitted on behalf of the appellant that at the highest, an adverse inference can be drawn against him under Order 21, Rule 11 of Code of Civil Procedure (“CPC”). Reliance was also placed on some other acts which do not deal specifically deal with the 1996 Act.

Delhi High Court rejects the applicability of ‘HOT NEWS’ Doctrine in India

In a landmark case (Akuate Internet Service & Anr v. Star India & Anr.) ,decided on 30th August 2013, concerning the applicability of ‘hot news’ doctrine in India, the Delhi High Court replied in negative and concluded that hot news doctrine does not apply in India. The basic question before the Court was ‘is there a copyright or any other kind of right, such as right to protect ‘hot news’ in the scores in a cricket match’?

[Image Source: SpicyIP]

Background

In 2012, by an Agreement, BCCI granted exclusive broadcasting rights to Star TV to disseminate the information/content emanating from the cricket matches. Also, other copyrights emanating from recording of the live match too were assigned which included the right to record, reproduce, broadcast, etc. Later on, Cricbuzz, Idea Cellular and ONMOBILE started SMS services providing contemporaneous ball-by ball coverage of live cricket matches. Star TV India (plaintiff) filed three suits against Piyush Agarwal (Cricbuzz), Idea Cellular and ONMOBILE (Defendants)

Issues

Now, the main point of dispute in the instant case was the ‘mobile distribution rights’ granted by BCCI (Board of control for cricket in India) to STAR TV. These rights were a part of the exclusive broadcasting rights and other related rights in respect of cricket matches such as right to record, reproduce and broadcast the match events. The plaintiff objected to the defendants’ dissemination of ball-by-ball and minute-by-minute match information and alerts through live score cards, score alerts and match updates.

“Invention” under Patents Act, 1970 : An Overview and Analysis

(Important note: Though this post is fairly long, it thoroughly discusses the concept of “invention” under Patents Act, 1970. Starting from the basic understanding of the concept, the post culminates its discussion on the landmark decision of the Supreme Court of India in Novartis AG v. Union of India)

Invention: A historical background prior to the enactment of Patents Act, 1970

In 1947, when India was released from rule of British Government, the country was still dominated with a patent regime favourable to multinationals abroad. Though much has changed since then, Indian patent jurisprudence is still witnessing ups and downs. To the core of the patent law lies an ‘invention’ which, according to Black’s Law Dictionary, means an act or operation of finding out something new. Defining this ‘something new’ has, even in 21^st century, remains the most problematic issue under Indian patent law.

(Image Source: 123RF.com)

The old patent regime, which was governed by Indian Patents and Designs Act, 1911 (“Old Act”), defined an invention as ‘any manner of new manufacture and includes an improvement and an alleged invention’.[1] According to the Old Act, term ‘manufacture’ included ‘any art, process or manner of producing, preparing or making an article, and also any article prepared or produced by manufacture’.[2] That is, in order to qualify as an invention under the Old Act, there should have been an existence of a new art, process or manner of producing.......any article prepared or produced by manufacture.

By not defining what is ‘new’, the definition had provided space for the existence of ambiguity. Could minor changes be considered as ‘new’, and hence, sufficient for patent protection? A similar problem still exists under the Patents Act, 1970 (“1970 Act”) while defining 'inventive step'. While the definition of invention under the Old Act did not provide that the patented invention should be useful, the Supreme Court of India (“Supreme Court”), in Bishwanath Prasad Radhey Shyam v. Hindustan Metal Industries, stated that courts have generally held that an invention must be useful.[3]Under the 1970 Act, it was provided that an invention should be useful (originally enacted definition).

“Special Reasons” for Death Penalty under Section 354(3) of Code of Criminal Procedure

Under Section 354(3) of the Code of Criminal Procedure, 1973 (“Code”), the court has to provide ‘special reasons’ before death sentence can be awarded to a convict. In a recent case (Deepak Rai v. State of Bihar), a three-judge bench of the Supreme Court of India (“Supreme Court”) has clarified as to what constitutes “special reasons” under the Code. In the instant case, the appellant-accused, along with other accused, burnt seven persons alive which included a man, his wife and his five children. The incident took place when the deceased man, along with his wife and children, was sleeping at his house. Though the deceased man was burnt alive by putting kerosene over him, his wife and children were fire trapped inside the room which they were sleeping in. It had been pointed out in the judgment that the appellant had committed the crime after the deceased man refused to withdraw a theft case against him.

(Image Source: Fatih University MUN Website)

In this post, I am culling out the relevant part wherein court has discussed Section 354(3) of the Code. The judgment is fairly long and it discusses a number of cases where death penalty has been awarded and rejected. The case involved two main issues: (i) whether the reasons assigned the courts below, for awarding death sentence, are ‘special reasons’, and (ii) whether the impugned matter falls into the category of ‘rarest of rare crimes’. In this post, it is the first issue which I am dealing with.

Overview of SEBI Notification on 'Angel Funds" and Investors

Recently, Securities and Exchange Board of India (“SEBI”) had notified amendments to SEBI (Alternative Investment Funds) Regulations, 2012 (“AIF Regulations”) which seek to insert new provisions for “Angel Funds”. The amendments will play an important role especially since they intend to provide a framework for angel funds and angel investors. In this post, I am highlighting the important features of the “Amendments”, i.e., Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2013].

(Image Source: Growing Business Website)

What are Angel Funds: According to the newly inserted regulation 19A, an “Angel Fund” is a sub-category of Venture Capital Fund under Category I – Alternative Investment Fund (“AIF”). The definition of “Venture Capital Fund”, provided under Regulation 2(1)(z) of AIF Regulations, has been amended accordingly.

As per the amendments, Angel Funds can only be raised by issuing units to angel investors. The corpus of an Angel Fund shall be of at least ten crore rupees. In addition to this, up to a maximum of three years, Angel Funds shall accept an investment of not less than Rs. 25 lakhs (Of Course, through angel investors only!)

Companies Act, 2013: Independent Directors

In this post, important changes relating to introduction of Independent Directors (IDs) in the new Companies Act, 2013 would be discussed. [For an analysis & discussion of M&A and Corporate Restructuring in the ‘new act’, kindly click here].

Now, the primary role of corporate governance is always to ensure the independence of the board of directors (BOD) in a company. Independent directors on the board predominantly enhance the monitoring and supervising of the management and the promoters of a company. Thus is turning immensely helps in protecting and safeguarding the interests of the public shareholders. The new Companies Act, 2013 on one hand bestows independent directors with greater say in corporate governance & on the other hand places greater demand from them. Now, the relevant provisions concerning IDs in the new act are Section 149, 150 and Schedule IV. The primary features concerning Independent directors (IDs) in the new Companies Act, 2013 are as follows-

Number of Independent Directors

The new Companies Act, 2013 requires all the listed companies to have at least 1/3rd independent directors on their board. But this provision of the Act is a slight departure from clause 49 of the listing agreement. Clause 49 of the Listing agreement issued by SEBI requires that at least 50% of the Board of Directors (BOD) must comprise of Independent Directors in case the chairperson is in an executive capacity or a promoter or related to a promoter. Now, one thing which must be noted is that the listed companies will be required to comply with the more onerous of the two requirements, while others can merely comply with the company law. The consequences of violation may also be different under company law and securities regulation i.e. under clause 49 of the listing agreement.

Earlier "Adverse Remarks" can be considered for Compulsory Retirement

Even if the adverse remarks/record were made in the past, it can be taken into account for determining the 'overall performance' of an employee. This view has been taken by the Supreme Court of India (“Supreme Court”) in the case of Rajasthan State Road Transport Corp. & Ors. v. Babu Lal Jangir, decided on 16^th September, 2013. In this case, the pertinent question which arose for consideration was – whether the adverse entries/record of an employee, being not made in ‘immediate paste’, can be taken into consideration for ordering a premature/compulsory retirement? Answering the question in affirmative, the Supreme Court noted that while considering the premature retirement of an employee, it is the entire service record which is taken into consideration.

(Image Source: Thomas Carroll Group Website)

Facts: The respondent, Babu Lal Jangir, joined the services of the appellant, Rajasthan State Road Transport Corporation (“Corporation”), on the post of driver. On the recommendation of Screening Committee and Review Committee, an order was passed against the respondent thereby ‘compulsory retiring’ him from the service. Against this order, respondent filed a writ petition before the High Court of Judicature for Rajasthan (“High Court”). Through counter-affidavit, it was submitted by the appellant (appellant before the Supreme Court, i.e., Corporation) that the service record of the respondent showed a dismal performance, and hence, the order of compulsory retirement was justified. However, The single judge of the High Court held the order of compulsory retirement arbitrary on the ground that the impugned acts of misconduct, which showed dismal picture of performance, pertained the period 12 years prior to the order of retirement. This view of the single judge was upheld by the division bench of the High Court. Hence, the matter came before the Supreme Court.

Director 'may' be held liable for the penalty imposed upon the Company

Today, Delhi High Court has pronounced a judgment (Ved Prakash v. Union of India & Ors.) wherein an issue, regarding the liability of director for the acts of the company, had arisen. One significant question that had arisen in the petition was - whether the penalty imposed upon the Company can be recovered from its Directors?

Facts: The petitioner, in the instant case, claimed to be the Director of M/s. Hitkari China Limited (“Company”). The Company, in 1997, received an advance licence for import of certain goods subject to the condition that the company would fulfil the export obligations of Rs. 1,24,25,099/-. Since the company failed to discharge this obligation of export, a penalty of Rs. 2,51,81,335/- was imposed on it. When penalty was not paid, a recovery notice was sent to the Govt. of NCT which, in turn (via. Asst. Collector), issued a notice to four persons (including the petitioner) requiring them to deposit the amount of Rs. 2,51,81,335/-. It is this notice against which the petitioner filed this writ petition before the Delhi High Court.

Section 138, Negotiable Instruments Act: An Agent can file a Criminal Petition

A three-judge bench of the Supreme Court of India (“Supreme Court”) has clarified the position regarding the filing of criminal petition through the holder of power of attorney for an offence under Section 138 of Negotiable Instruments Act, 1881 (A.C. Narayanan v. State of Maharashtra & Anr). The present case, which consisted of a set of two criminal appeals,  involved the issue whether, under Section 138 and 142 of NI Act, a criminal petition can be filed by a person through a power of attorney. While section 138 of NI Act makes one liable for dishonour of cheque, section 142 of NI Act provides for the conditions before a court can take cognizance of the offence under Section 138.

(Image Source: Queensland Family Law Practice)

The present matter was heard by the Full Bench of the Supreme Court when a reference was made by a division bench of the Court. According to the division bench, there was a difference of opinion amongst various High Courts as also the decisions of the division benches of the Supreme Court in M.M.T.C. and Anr. vs. Medchl Chemicals & Pharma (P) Ltd. and Anr [2002 (1) SCC 234] and Janki Vashdeo Bhojwani and Anr. vs. Indusind Bank Ltd. and Ors [2005 (2) SCC 217]. In M.M.T.C. case (supra), it was held by the Supreme Court that no court can decline to take cognizance on the sole ground that the complainant was not competent to file the complaint. On other hand, in Janki Vashdeo case (supra), it was held by the Court that under Order 3, Rules 1 and 2 of the Code of Civil Procedure, 1908 (“CPC”), the holder of power of attorney cannot depose for the principal for the acts done by the principal.

Companies Act, 2013: What's in the box for Mergers & Amalgamations (M&A) and Corporate Restructuring?

The Companies Bill, 2012 has finally become the Companies Act, 2013. See the official Gazette Notification here. Further, we already had an overview of the Companies Bill, 2012 here. But it must be noted that all the substantive sections are yet to be notified in due course of time by the Central Government. Only section 1 of the Act has come into effect, and section 1(3) provides:-

This section shall come into force at one and the remaining provisions of this Act shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint and different dates may be appointed for different provisions of this Act and any reference in any provision to the commencement of the Act shall be construed as a reference to the coming into force of that provision.

Thus, the substantive sections would be notified by the Government later. Now, I would be delineating, in this post, the key provisions relating to Mergers & Acquisitions in the new Companies Act, 2013. The new Companies Act, 2013 has sought to streamline and make M&A more smooth and transparent. The newly added provisions have made it easier for companies to implement ‘Schemes of Arrangement’ (mergers & acquisitions (M&A), de-merger, corporate debt restructuring etc) and at the same time impose checks & balances to prevent abuse of these provisions.

Now, the key provisions relating to M & A transactions and corporate restructuring are as follows-

Counsel must exhibit circumspection in the number of cases they cite: Supreme Court

Today, a division bench of the Supreme Court of India (“Supreme Court”) has made an important observation (Rashmi Metalinks Ltd. & Ors v.Kolkata Metropolitan Development Authority & Ors.) regarding the plethora of cases cited by the counsels. The Court observed that:

                                       “This Court, and even more so the High Court as well as the subordinate courts have to face lengthy arguments in each case because of the practice of citing innumerable decisions on a particular point of law. The correct approach is to predicate arguments on the decision which holds the field......”

(Image Source: Wikipedia)

The problem, according to the bench of Justice T.S. Thakur and Justice Vikramajit Sen, is not with the cases which deal with different questions of law. But, the main problem arises when each of the cited cases deals with the same question of law in the same manner. Senior Advocates K.V. Vishwanathan and A.M. Singhvi had appeared for the appellants and the respondents respectively. Both of them relied heavily on numbers on judgments of the Supreme Court which, in the opinion of the Court, were similar in nature. According to the court:

"Extra-Marital Relationship" may not amount to "Cruelty" under Section 498A, Indian Penal Code, 1860

In an important case (Pinakin Mahipatray Rawal v. State of Gujarat) where the question whether ‘extra-marital relationship’ could be considered as ‘cruelty’ under Section 498A of the Indian Penal Code, 1860 (“Penal Code”) had arisen, the Supreme Court of India (“Supreme Court”) has answered the question in negative. The case involved a situation where the deceased, wife of Accused-1 (“A-1”), had committed suicide following an alleged extra-marital relationship between A-1 and his colleague, Accused 2 (“A-2”). On being tired by the lower court, A-1 was convicted under Section 498A and 306 of the Penal Code. While A-2 and A-3 (‘Mother of A-1”) were acquitted of various alleged offences, A-1 was also acquitted of offence under Section 304B.

(Image Source: Storyline Blog)

Section 498A provides for the offence of cruelty by the husband or his relatives and Section 306 of the Penal Code provides for the offence of ‘Abetment of Suicide’. It was the case of the prosecution that the deceased had taken the step of committing suicide because of the alleged extra-marital relationship between A-1 and A-2. This relationship, according to the prosecution, had amounted to cruelty under Section 498A of the Penal Code. Though there was no evidence of any physical harm to the deceased, the prosecution rested its case on the basis of mental cruelty, as can be derived from explanation to Section 498A. With respect to the abetment of suicide, prosecution had relied on Section 113A of the Indian Evidence Act, 1872 (“Evidence Act”) where a presumption can be made that the husband or his relatives has abetted the suicide if the same takes place within 7 years of marriage.

Securities Law Amendment Ordinance, 2013: Why SEBI should use its new power with much restraint & caution

As we have already discussed here the wide powers conferred upon SEBI by the virtue of Securities Law Amendment Ordinance 2013, I shall be discussing, in this post, as to why the newly unfettered powers granted to SEBI must be exercised with great caution and restraint. Further, the powers which are handed over to SEBI by way of an Ordinance are sought to be vested permanently by the Parliament. Thus, an analysis of some anomalous amendments emanating in Securities Law Amendment Ordinance 2013 would follow now.

Now the Ordinance has proposed five fundamental and essential changes to the prevailing statutory framework of securities regulations in India. The five changes, as introduced, are listed below-

I.       Giving explicit statutory recognition to the process of Consent Order.

II.    Widening of regulatory net for Collective Investment Schemes (CIS) and Ponzi Schemes

III.  According statutory approval and sanction for taking away fraudulent and ill gotten gains from the violators commonly known as disgorgement.

IV. Granting search and seizure powers to SEBI

V.    Enhancement of power to seek information pertaining to its investigative role.

Section 28(3) of Trade Marks Act Protects Infringement Only for Similar Goods: Delhi High Court

Last week, Delhi High Court had to decide a trade mark dispute where an issue had arisen with respect to the usage of two similar trademarks. In A. Kumar Milk Foods Pvt Ltd. v. Vikas Tyagi& Ors, an injunction had been sought against the defendant for restraining it from using the trade mark which had alleged deceptive similarity with trade mark of plaintiff. The plaintiff, A. Kumar Milk Foods Pvt Ltd., was the proprietor of the registered trade mark, ‘SHRIDHAR’, which had been granted for Class-29 goods such as ghee, edible oils, milk, dairy products etc. The Defendants, Vikas Tyagi and M/s. Shreedhar Dairy Products, were the proprietor of a similar trade mark, ‘SHREEDHAR’, but the same had been granted for the Class-30 Goods, i.e., Atta, Maida and Besan. Though the defendants had also sought registration of ‘SHREEDHAR’ for Class-29 goods, the application is still pending and the same has been opposed by the plaintiff.

(Image Source: Apex Law Group LLP)

In the present case, it had been claimed by the plaintiff that its trade mark had become distinctive and is associated with the above-mentioned Class-29 goods on account of its long, continuous and extensive use. The main problem of the plaintiff is the usage of trade mark, ‘SHREEDHAR’, by the defendant with respect to Class-29 goods since the same Class-29 goods are sold by the plaintiff under the trade mark, ‘SHRIDHAR’. As the impugned Class-29 goods are sold by the defendant under the trademark which is deceptively similar to that of the plaintiff, the same, according to the plaintiff, is the infringement of its trade mark. Further, it was the contention of the plaintiff that such an activity on the part of defendant has also lead to passing-off the impugned Class-29 goods as its goods. On the other hand, it has been the contention of the defendants that they have been using the trade mark, “SHREEDHAR”, since October 2003 and that their use of the trade mark was prior than that of the plaintiff. Contrary to the submissions of plaintiff, defendants submitted that it is the plaintiff which had copied its trade mark.

Bilateral Investment Treaties and their overriding effect over sovereign law

Bilateral Investment Treaties (BIT) are agreements entered into between two sovereigns with the fundamental objective of promoting investments. While such international commitments do ensure an influx of foreign capital, they often undermine the legislative framework of the countries parties to the agreements. 

In an erudite article in the The Hindu, Mr. Deepak Raju and Mr. Prabhash Ranjan have pointed out the danger of entering into such agreements in relation to hazards they pose to public health.

Key Features of The Pension Fund Regulatory and Development Authority Bill, 2013

Recently, Parliament has passed The Pension Fund Regulatory and Development Authority Bill, 2013 (“Pension Bill”) which seeks to provide for the establishment of a statutory Pension Fund Regulatory and Development Authority (PFRDA) to promote old age income security.[1] The Bill, which is divided into 10 chapters and 56 clauses, has the following key features:

Pension Fund Regulatory and Development Authority (Chapter II): The Bill provides for the establishment of the Pension Fund Regulatory and Development Authority (“Authority”) with its head office in the National Capital Region. The members of the Authority will be appointed by the Central Government and there shall be one member each from the field of economics, finance, law or administrative matters. Apart from the Chairperson, there will be three whole-time and three part-time members. While Chairperson and whole-time members will hold the office for a period of five, the tenure of a part-time should not ‘exceed’ five years.

(Image Source: Emirates 24|7)

Clause 6 of the Pension Bill provides for the conditions (five conditions in total) which can lead to the removal of the Chairperson or any other member of the Authority. If sought to be removed for acquiring interest which is prejudicial to the function as a member or for the reason that his continuance in the office is against public interest, the concerned member will be given an opportunity to be heard.

Delhi High Court directs University of Delhi to re-compute marks in LLB Entrance

In yet another case (Ram KumarJha v. University of Delhi & Ors.) of wrong answer key in an entrance exam, Delhi High Court High Court on Monday has directed the University of Delhi, respondent, for re-computing the score of the petitioner-student, Ram Kumar Jha. The petitioner, who had appeared for the entrance test (2013-14) of Faculty of Law, University of Delhi, was not satisfied with his result. On obtaining his answer sheets and copies of questions via an RTI application, the petitioner noted that answer key in respect of two questions were not correct.

(Image Source: University of Delhi Website)

Consequently, the petitioner approached the High Court for directing the respondent to rectify the answer and to take the admission of the petitioner. The High Court, while accepting the contentions of the petitioner, held that it would be failing to discharge its duty if it does not correct answers which are patently wrong:

                                       “It is  true  that ordinarily  the  Courts should  not  interfered  with  the answers  notified  by  the  examiners  but,  where  the  Court  finds  that  the answer  contained  in  the  answer  key  in  respect  of  a  particular  question cannot even be  said one of the possible correct and appropriate answers, not to speak of the most appropriate answer, the Court would be failing in its duty, if it  does not correct such patently wrong answer and leaves a wronged  candidate  remediless,  particularly  when  the  question  under consideration relates to a field of law.”

Hearing Affected Party not Necessary for "Further Investigation" under Section 26(7) of the Competition Act, 2002

Delhi High Court has recently, in South Asia LGP Company Private Limited v. Competition Commission of India & Ors, held that the affected party does not have a right of hearing before the Competition Commission of India (“Commission”) can order a further investigation under Section 26(7) of the Competition Act, 2002 (“Competition Act”).

In the present case, a complaint was made against the petitioner, South Asia LPG Company Private Ltd, by the respondent no.3, East India Petroleum Private Limited. It was alleged in the complaint that the petitioner was misusing its dominant position in the terminaling services at Vishakhapatnam Port. The relevant market under Section 2(r) of the Competition Act, as identified by the Director General, was ‘upstream and downstream terminaling services at the Vishakhapatnam Port’.

The Commission, under Section 19 of the Competition Act, may inquiry to check whether there has a contravention of the provisions contained in subsection (1) of Section 3 or subsection (1) of Section 4. The said inquiry can be initiated by the Commission either suo moto or on a reference by the government/statutory authority or on receipt of information from a person, i.e., complainant. If Commission is of the prima facie opinion that there is an alleged contravention of the provisions, it can then direct the Director General under Section 26(1) to cause an investigation into the matter.[1]In case the Director General comes to the conclusion that no contravention of the impugned provisions have been made, the complainant is provided with an opportunity to rebut such findings of the Director General under Competition Act.

Is there any Right of Representation by Counsel in an Arbitration Proceeding?

In what can be considered as an important issue for arbitration jurisprudence in India, constitutionality of the clause 15.22 of Multi-Commodity Exchange of India Ltd (MCX) has been challenged before the Madras High Court (Source: The Hindu, The Business Standard and The New Indian Express newspapers).[1] The issue is important since the impugned clause prohibits the parties to represent themselves by counsel, attorney or advocate in an arbitration proceeding.[2] Clause 15.22 of the by-law reads as:

“...15.22 Appearance by Counsel, Attorney or Advocate not permitted

In arbitral proceedings, the parties to the dispute shall not be permitted to appear by counsel, attorney or advocate.”

In the present petition, it has been contended that the impugned clause violates the right to avail the legal assistance in an arbitration proceedings. It was further contended that any award, which is made without allowing the petition to appear by a legal counsel before the arbitration proceedings, can be challenged under Section 34 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”). Under Section 34 of the Arbitration Act, an arbitral award may be set aside by the court if the party can show that it could not present the case. This comes down to the question whether, in the absence of a counsel or attorney or advocate, it can be said that the concerned party was not able to present its case before the arbitral tribunal.