by Zen Webnet | Nov 2, 2020 | Blog
While the Information & Broadcasting Ministry (“Ministry”) is responsible for content on television and print industry, they have not yet prescribed any specific law for content regulation on online services. In the absence of any regulatory framework, each platform regulates itself. In the wake of such a situation, the Digital Entertainment Committee of the Internet & Mobile Association of India (“IAMAI”) released “Universal Self-Regulation Code for Online Curated Content Providers” on September 4, 2020 (“Code”) superseding the codes issued in January 2019 and February 2020. The Code of Online Curated Content Providers (“OCCPs”) has been jointly developed by companies carrying on business in India and the organizations that sign on to this Code, commit to (i) making reasonable efforts and acting in good faith to ensure that content offered on their respective services in India is in line with the principles laid out herein; and (ii) conducting themselves in a responsible and transparent manner. The Code provides that there is user-generated content and on the other hand there is curated content.
The objectives of this Code are to: (i) empower consumers to make informed choices on age-appropriate content; (ii) protect the interests of consumers in choosing and accessing the content they want to watch, at their own time and convenience; safeguard and respect creative freedom of content creators and artists; (iii) nurture creativity, create an ecosystem fostering innovation and abide by an individual’s freedom of speech and expression; (iv) provide a mechanism for complaints redressal in relation to content made available by respective OCCPs; and (v) provide an escalation mechanism for redressal of complaints relating to content made available by respective OCCPs.
The OCCPs will enable consumers to make an informed choice about the licensed video content they engage with or the video content they create through self-declarations. Each OCCP will empower consumers by adhering to a process set-out herein for to dealing with complaints concerning content hosted by such OCCP. OCCPs will also receive complaints forwarded by any authority/body/department/nodal agency of the Government of India (including, the National Consumer Helpline of India, Ministry of Information & Broadcasting, Ministry of Electronics & Information Technology and Ministry of Communications) directly or through the Digital Content Complaint Council (“DCCC”).
The signatories to this Code will not make available the content which promotes and encourages disrespect to the sovereignty and integrity of India, represents a child engaged in real or simulated sexual activities or any representation of the sexual parts of a child for primarily sexual purposes, which promotes and encourages terrorism and other forms of violence against India or its institutions, and that has been banned for exhibition or distribution by online video service. The Code seek to protect the consumers’ ability to choose content that they may deem to be appropriate for their viewing to ensure a clear and transparent disclosure system by providing: (i) Age classification/maturity ratings on the subject matter treatment of themes; (ii) A content descriptor or a guidance message specific to each content/programme that indicates and informs the viewer about the nature of the content and advise on viewer discretion; and (iii) Parental and/or access control.
All signatories agree on a two-tier complaint redressal mechanism for ensuring compliance to the Code: (i) Tier-I at the OCCP level; and (ii) Tier-II at the industry level. All signatory OCCPs’ agree to internally appoint/institute, as part of their operational systems, a dedicated person/team/department referred to as the Digital Content Complaint Forum (“DCCF”) to receive and address any consumer related concerns and complaints in relation to content of the respective providers and provide the contact details with name, designation and e-mail address of the DCCF on its website and/or on its online platform. The Code shall set up a separate body under the IAMAI known as the Online Curated Content Providers Governing Council (“OCCP Governing Council”). The Governing Council shall be governed by the “OCCP Council Charter”. Every founding member of OCCP shall nominate one representative in the OCCP Governing Council, decisions would be made by a simple majority. The DCCC shall be Tier-II, which shall be a nine member body consisting of a chairperson (a retired Judge of the Supreme Court or a High Court) and eight other members.
When IAMAI wrote to the Ministry for guidance and seeking support in implementing the Code, the Ministry expressed its displeasure and wrote a letter to IAMAI asking them to look at other existing self-regulatory models like the Broadcasting Content Complaints Council and News Broadcasting Standards Authority, as the Code needs improvements in a lot of aspects like, having provision for independent third-party monitoring, prescribing a definitive Code of Ethics and list of prohibited contents. The existing self-regulatory models can provide the guiding principles for developing a credible self-regulatory and grievance redressal mechanism for OTT. Post this letter, now onus is on the IAMAI to revise the Code so that it has the necessary support
Authored by
Neeraj Dubey, Partner – Corporate Law
by Zen Webnet | Sep 26, 2020 | Blog
The Central Government had constituted the second National Labour Commission headed by Mr. Ravindra Varma, which presented its report in 2002 and recommended that all the central labour laws must be combined into four or five codes. Though 12 central labour laws have already been repealed since 2014, the remaining 29 were subsumed into four codes, which were presented before the Parliament in 2019. They were then referred to the Parliament’s Committee on Labour, which suggested 100 changes in the original drafts, of which 74 were incorporated in the revised three Bills and were finally passed by the Parliament on September 24, 2020.
These codes have been introduced to balance the interests, rights and obligations of employees and the employers; bring down the multiple licensing & paperwork hassles for companies, boost new industrial investment, including foreign investments, and provide a competitive advantage to India in the global economy. The fourth code, The Code on Wages, 2019 (“Wage Code”) was passed last year subsuming The Payment of Wages Act, 1936, The Minimum Wages Act, 1948, The Payment of Bonus Act, 1965 and The Equal Remuneration Act, 1976.
The Industrial Relations Code Bill, 2020 (“IR Code”): subsumes The Trade Unions Act, 1926, the Industrial Employment (Standing Orders) Act, 1946, and Industrial Disputes Act, 1947. The IR Code introduces stringent conditions restricting the rights of workers to strike across industry by mandating issuance of a 60 days strike notice, increases the threshold relating to layoffs & retrenchment in industrial establishments having 300 workers, raises the threshold for requirement of a standing order, introduces fixed term employments for contract workers, and introducing re-skilling fund, amongst others.
The Code on Social Security Bill, 2020 (“SS Code”) subsumes The Employees’ Compensation Act, 1923, The Employees’ State Insurance Act, 1948, The Employees Provident Fund and Miscellaneous Provisions Act, 1952, The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959, The Maternity Benefit Act, 1961, The Payment of Gratuity Act, 1972, The Cine Workers Welfare Fund Act, 1981, The Building and Other Construction Workers Welfare Cess Act, 1996, and The Unorganised Workers’ Social Security Act, 2008. The SS Code extends the reach of ESIC & EPF, includes self-employed and workers from unorganized sector, introducing gratuity for fixed term employee, creation of national database of unorganized sector for targeted delivery of SS, and the creation of a National Social Security Board which will take on the responsibility of formulating suitable schemes for unorganised workers, gig workers and platform workers, among others.
The Occupational Safety, Health and Working Conditions Code Bill, 2020 (“OSH Code”): subsumes The Factories Act, 1948, The Plantations Labour Act, 1951, The Mines Act, 1952, The Working Journalists and other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955, The Working Journalists (Fixation of Rates of Wages) Act, 1958, The Motor Transport Workers Act, 1961, The Beedi and Cigar Workers (Conditions of Employment) Act, 1966, The Contract Labour (Regulation and Abolition) Act, 1970, The Sales Promotion Employees (Conditions of Service) Act, 1976, The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979, The Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981, The Dock Workers (Safety, Health and Welfare) Act, 1986, and The Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996. The OSH Code mandates free annual health check-up for workers and issuing appointment letter to all workers
While the critics suggest that the Codes would instil job insecurity, encourage hire-fire system of employment in India and may also breed unrest amongst working class, the supporters find that the codes are beneficial as they provide for, among other aspects: (i) Compulsory facility for Helpline for redressal of problems of migrant workers; (ii) Provision for accumulation of one day leave for every 20 days worked, when work has been done for 180 days instead of 240 days; (iii) Equality for women in every sphere: Women have to be permitted to work in every sector at night, but it has to be ensured that provision for their security is made by the employer and consent of women is taken before they work at night; (iv) Provision of “Social Security Fund” for 40 Crore unorganized workers; (v) Pay parity to women workers as compared to their male counterparts; (vi) In the event of death of a worker or injury to a worker due to an accident at his workplace, at least 50 % share of the penalty would be given. This amount would be in addition to Employees Compensation; (vii) The Inspector will now be made Inspector–cum-Facilitator by the introduction of Random, Web Based Inspection System, which possibly be a step to end the Inspector Raj; and (viii) Finally, the manifold increase in penalties would act as a deterrent for non-compliance. The Codes have been introduced with the intention that they would lead to growth of industry, employment, income, balanced regional development and will bring more disposal income in the hands of workers. Hopefully, these codes would promote peaceful and harmonious industrial relations for a better working environment for both employers and workers.
Authored by
Neeraj Dubey, Partner – Corporate Law
by Zen Webnet | Sep 23, 2020 | Blog
Genesis
The Company Law Committee under the Chairmanship of Mr. Injeti Srinivas was constituted with the mandate to recommend re-categorization of certain “acts” punishable as compoundable offences to “acts” carrying civil liabilities and improving the in-house adjudication mechanism. The recommendation of this Committee became the basis of the Companies Amendment Bill 2020 (“CAB 2020”) as introduced by the Ministry of Finance and passed by the Lok Sabha on September 19, 2020.
Major Changes
1. De-criminalization: The CAB 2020 proposes 72 amendments to the Companies Act, 2013 (“Act”) to decriminalise those defaults which could be determined objectively, lack any element of fraud or do not involve larger public interest and all minor procedural or technical lapses been converted into civil wrongs. The CAB 2020 has re-categorized at least 23 out of 66 compoundable offences under the Act to be now dealt with an in-house adjudication framework. These measures are aimed at providing relaxation to corporates, reducing consequences of certain harmless non-compliances for companies and creating a greater ease of doing ethical business. It will also boost confidence of the investors as the fear of imprisonment will be reduced.
2. Enabling provisions for Central Government: The Central Government has been delegated substantial powers:
(i) To exclude, after consultation with the SEBI, certain class of companies from the definition of “listed company”, mainly for listing of debt securities. Though the Act read with the SEBI (Issue and Listing of Debt Securities) Regulations, 2008 indicates that even certain private companies are permitted to list debt securities on a recognised stock exchange but stringent compliances was not encouraging private companies to opt this route. This has now been addressed as ‘the provisions applicable to other listed companies’ under the Act would cease to be applicable for such listed private companies.
(ii) To reduce the number of days from existing 15 days available to the shareholder to accept the offer under the rights issue as per Section 62 of the Act that provides that 15-30 days is required to be given for acceptance of such an offer.
(iii) To allot auto-generate a neutral name and issue a fresh certificate of incorporation binding a company to use such new name if it fails to follow RD order. If the name of a company coincided with a registered trademark, upon application by such registered trademark, the RD was empowered to issue an order directing the Company to change the name within 6 months, which has now been reduced to 3 months.
(iv) To exempt foreign listed companies (prescribed class of public companies to list permitted securities on stock exchange in permissible foreign jurisdictions) from provisions of Chapter III (Prospectus/Allotment of Securities/Private placement), Chapter IV (Share Capital and Debentures), Section 89 (Declaration in respect of beneficial interest in share), Section 90 (Significant beneficial ownership), Section 127 (Punishment for failure to distribute dividends) and Chapter XXII. Rules will also be prescribed for this.
(v) To exempt application of the provision related to significant beneficial ownership under Sections 90(1) and 89 of the Act.
(vi) To allow certain classes of Indian public companies to directly list classes of securities (as may be prescribed) in foreign jurisdictions, which is likely to help start-ups to tap overseas markets for raising capital.
(vii) To prescribe rules for selected class of unlisted companies (except for large unlisted companies who have availed loans above a threshold (to be specified) from banks and financial institutions) to prepare (interim) financial results based on prescribed periodicity and format, obtain approval of Board and complete audit/limited review in prescribed manner and file a copy of the same with ROC within a period of 30 days from the end of relevant period, as may be prescribed, thereby relaxing the SEBI LODR regulations.
(viii) To provide exemption from filing certain resolutions by NBFCs as mandated under Section 117(3)(g) read with Section 179(3)(f) of the Act. Now, apart from banking companies, the NBFCs and Housing Finance Company have been allowed exemption from the requirement of filing resolution with respect to grant of loans or provide guarantee/security in respect of loan.
3. NCLAT Benches: The cap of 11 members on the number of members in NCLAT has been removed. NCLAT, in addition to the matters under the Act is also empowered to hear matters under Competition Act, 2002 and IBC 2016. The cap on members was creating a bottleneck and now NCLAT can have benches.
4. Remuneration to non-executive directors: In case of inadequate profits made by a company, Section 197 of the Act read along with the Schedule V provides for computation mechanism of remuneration payable to managerial personnel, which has now been extended to non-executive directors, including independent directors.
5. Producer Company: Reintroduced the concept of a body corporate comprising of farmers and agriculturists who work in cooperation with each other to promote better standards of living and gain easier access to credit, technology, market etc. from 1956 Act.
6. CSR provisions: The companies which have CSR spending obligation up to Rs. 50 lacs shall not be required to constitute CSR Committee and to allow eligible companies under Section 135 of the Act to set off any amount spent in excess of their CSR spending obligation in a particular financial year towards such obligation in subsequent financial years.
Authored by
Neeraj Dubey, Partner – Corporate Law
by Zen Webnet | Aug 26, 2020 | Blog
The proposal of Finance Ministry, department of Financial Services to relax the punishment w.r.t offences falling under various Acts which at present are punishable with both imprisonment and fine by making them compoundable offences i.e. wherein the Adjudicating authority as defined under the respective Act can decide the penalty to be imposed if anybody found to be liable for such offences, will definitely is another step from the Government towards ease of doing business as at times the default(s) may arisen due to omission not necessarily a deliberate attempt to cause fraud. The relaxation proposed is also in line with announcement by Hon’ble Finance Minister in her fifth series of announcement in series of announcement(s) made in Atamnirbhar Abhiyan.
The change in punishment includes changes in SARFAESI Act, LIC Act, Negotiable Instruments Act, Payment and Settlement Act, etc. ”
The present paper put forward for comments, is in also in line with earlier amendments approved by Cabinet wherein it relaxed the provisions of Companies Act, 2013 wherein more than 50 changes were proposed in Companies Act, 2013 including omitting certain offences (Compoundable) which were technical defaults.
The deterrent of imprisonment definitely works and reduces the chances of offences however for somebody who with no mala-fide intent have caught in such offences due to omission will have to suffer and run through long judicial process before actually the decision is made. We all are aware the quantum of cases at present the courts are dealing with and to decide a particular case the minimum time period if we may count is approximately two (2) years considering the stages involved.
Moreover, if the punishment for such offence is imprisonment then even if such offence is due to omission one has to suffer the consequences as there is no other alternative available to make it good. The decimalization of offences will reduce the process as well as give ease to make the default good by paying monetary fine.
The decriminalization of offences will also be a welcome move not only for domestic business but will also help in proving further ease in doing business in India and attracting foreign investors, as for them minor offences with major punishment acts is a cause of worry and a demotivated factor to invest especially in case of investment in Company where in some cases each and every officer in default is made liable.
Authored by
Daizy Chawla
Managing Partner, S&A Law Offices
by Zen Webnet | Jun 8, 2020 | Blog
Justice delayed, justice denied is one of the fundamental jurisprudence of law. Magna Carta of 1215 recognizes “To no one will we sell, to no one will we refuse or delay, right or justice.” The speedy justice system is one of the fundamental requirements of any society. Keeping that in mind, when the Courts were overburdened with cases and the average time required for deciding a lis increased substantially (apart from various other reasons also including the cost-effectiveness), steps were taken to decrease the burden of Courts. Various specialized Tribunals/Commissions were established under law. Similarly, Alternate Dispute resolution (ADR) came up as a future of traditional dispute resolution system. Arbitration is the most integral part of ADR. Pre COVID-19 era, Arbitration was treated as the future of Dispute Resolution. Now post COVID-19 era, there is a need to find out the future of Dispute Resolution as well as Arbitration.
The future of Litigation and ADR post-COVID-19 can be seen from two angles, i.e., (i) the ways adopted to make the adjudication process much more user friendly and contactless (as far as practicable) and (ii) to adopt other ways to provide faster relief to the parties. So broadly speaking, one is the technical aspect of adjudication and the other is the intellectual aspect.
Technical Aspect:
In the pre-COVID-19 era also, there were discussions regarding the future of Dispute Resolution and ADR and one of the possible future is using the digital platform. E-filing before the Courts is encouraged to a great extent. In Delhi High Court, there are designated e-Courts where the filing is mandatorily in electronic form. Similarly in Arbitration also, various Arbitrators are comfortable in the filing of pleadings and documents through e-mail in a readable pdf format.
Till date, although e-filing was encouraged but the carrying of physical files and physical hearings are prevalent. However, COVID-19 has posed a further challenge to this physical hearings and meetings. During the initial days of COVID-19, the adjudication of matters either before Courts or Arbitral Tribunal, are almost nil and the Courts are only taking up only the very urgent or urgent matters. But this way will lead to delayed justice, which amounts to the denial of justice. Therefore, now there is a need to find out the solution.
One of the celebrated solutions in this regard is Online Dispute Resolution (ODR). Now ODR is considered as the future of Dispute Resolution including ADR. During the COVID-19, now we have seen the Courts taking up the matters through video conferencing. Arbitral Tribunals are also taking steps towards video conferencing.
ODR is already prevalent in the International Commercial Arbitrations, where, the parties reside in different countries. Also, we have seen the recording of evidence of a witness/expert through video conferencing for any international court/arbitration matter. Therefore, although ODR was not a new development, however, the COVIDd-19 has made its implementation faster and much wide.
As per the data available in the public domain, globally, various countries have taken various steps in this regard, however, for the present article, we are concentrating only on India and the steps taken by Indian Judiciary or Governments.
Steps taken by the Indian Judiciary
It is pertinent to note that the use of technology has found judicial recognition in the State of Maharashtra vs. Praful Desai1 where it was held by the Apex Court that the term ‘evidence’ includes electronic evidence and that video conferencing may be used to record evidence. It was further observed that developments in technology have opened up the possibility of virtual courts which are similar to physical courts.
National Green Tribunal, much before COVID-19 started taking up its matters listed before the Zonal Benches through Video Conferencing.
Faced with the unprecedented and extraordinary outbreak of COVID-19, Courts at all levels must respond to the call of social distancing and ensure that court premises do not contribute to the spread of the virus.
The Supreme Court in Re: Guidelines For Court Functioning Through Video Conferencing During COVID-19 Pandemic2 took suo moto cognizance of the issue and directed that courts should adopt measures required to ensure the robust functioning of the judicial system through the use of video conferencing technologies.
Various High Courts have laid down Guidelines for on-line filing and also hearing of urgent matters through video conferencing.
Presently most of the Courts in the Country are taking matters through video conferencing and it seems that this situation will prevail for some more time. Furthermore, there is also a threat to the return of the virus every year.
Now we should appreciate the steps taken by the Indian Judiciary to start the hearings of the Urgent matters or in some cases hearing matters, however, the steps taken by the Indian Judiciary are not harmonious in nature and the respective Courts are using the technology as available to it.
However, there is no such a uniform process and there are also certain challenges, which are faced by the Lawyers throughout the Country. One of the basic examples is that in various Courts, the VC link is shared with only the Advocate on Record of the parties and that link cannot be shared further. Now, as per the practice, normally, the Advocate on Record is not the arguing Counsel and then the Arguing Counsel and the Advocate on record need to come to a place to join the VC with the same link that may pose threat to social distancing. Also, in case, where the Advocate on Record is from one state and the arguing Counsel is from another state, then there are further difficulties. Furthermore, if a party wants to intervene in a matter, then it will become difficult.
Various Courts are using various digital video conferencing platform and there is no uniformity. Also, there is surety regarding data security. Also, the petition needs to be affirmed by the Affidavit, which needs to be attested, however, till date, there is no scope for digital attestation of the affidavit.
The other problem can be trial or recording of evidence. The way, we conduct the Cross-Examination, there is a requirement of an eye to eye contact and also various things including the body language of the witness and others play a vital role while cross-examination. Furthermore, recording of evidence simultaneously is also going to be a big challenge through this online process.
Therefore, the need of the hour is a Robust Uniform Guideline which needs to be followed by all the Courts. The infrastructure also needs to be developed to have a uniform platform to be used by all the courts. The Guideline should also cover the aspect of e-filing, online hearings, data security, Court proceedings and especially the recording of evidence.
In respect to ADR, there is a need for the development of a policy framework that will be followed in both institutional as well as ad-hoc arbitration. In the case of institutional arbitration, that institution should also frame similar Rules in this regard following the policy guidelines. The ICC has already updated its status regarding the virtual hearing. Similarly, SIAC is also scheduling hearings through video conferencing. In India also, certain Tribunal has started hearing through video conferencing.
In arbitration, if the parties agree for a particular process, then the same has supremacy. At the same time, if the parties are not agreeable, then the Tribunal can lay down the procedure under section 19 of the Arbitration and Conciliation Act, 1996. In this regard, in cases of ad-hoc arbitration, in case one party wants to delay the process by not agreeing for virtual hearings, then the tribunal should suo-moto pass an order for virtual hearing.
Furthermore, there is a need for the amendment of various Codes and Laws to make clear legal provisions for digital hearing and e-Court system. Also, there is a requirement of laying down the penalty/punishment for contravening the new regime of Dispute Resolution and its strict compliance.
Intellectual aspect:
This shift from the traditional method of Court proceedings to this ODR, if need to be implemented for a long run, will take time. Despite all the steps taken by the Courts, the hearing of pending matters is still not there. The time required for the adjudication process has further enlarged due to COVID-19. For example, before COVID-19, even if in a matter final hearing is almost complete by the parties and only a rejoinder or sur-rejoinder argument is left, but now, there is a possibility of re-hearing of the entire matter, which will delay the adjudication process.
So, in civil cases, given that the adjudication process remains unpredictable, parties might decide to settle to conserve time and resources, by shifting to ADR formats that can be easily conducted online, like mediation and conciliation. Imagine logging into an online platform, paying a small token fee (which is far less than what litigation would cost), selecting a mediator and a hearing slot, uploading relevant documents and then attempting to resolve a dispute with the help of well-qualified mediators.
Then, if the case is settled and the mediation/conciliation proceeding took place in compliance with Sections 61-73 of the Arbitration & Conciliation Act, 1996, Section 74 would give the settlement the same effect as an arbitral award.
Therefore, mediation and conciliation pre-arbitration stage or during the pendency of arbitration need to be encouraged. However, where Government and its various departments are involved, then without a detailed Guideline as laid by the Government, it would be difficult to encourage this mediation and conciliation process.
Conclusion:
The virtual hearing may not completely stop the physical hearing and after the effect of COVID-19 goes, there will again be a situation where we will again be attending the physical hearing. However, as the effect of COVID-19 or any other similar situation, none can predict, that’s why this is the right time to upgrade the existing law and infrastructure to lay down a uniform procedure towards virtual hearing.
In view of the above, there is a need for having a detailed Guideline for the ODR System, so that there are uniformities and the difficulties faced by the lawyers or litigants, be removed. For Arbitration (until and unless it is required so extremely) it should be encouraged only document-based arbitration, as in present times, most of the cases are covered by the documentation. However, in case of a plea by a party regarding coercion or duress or oral contract, etc. limited oral evidence be permitted.
There is no doubt that all these avenues need recourse to technology and there is a requirement of technological upgrades and updates. But maybe the time has been ripe for a while for litigation and ADR to get over the aversion to technology and embrace it. This can be facilitated by continuously training all players with the necessary software. It is high time we treat this pandemic as a boon and less as an obstacle – adaptability, after all, is the simplest secret to the survival of the fittest.
Authored by
Nilava Bandyopadhyay
Senior Partner, S&A Law Offices
__________________________________
[1] (2003) 4 SCC 601
[2] SUO MOTU WRIT (CIVIL) NO.5/2020; https://main.sci.gov.in/supremecourt/2020/10853/10853_2020_0_1_21588_Judgement_06-Apr-2020.pdf
