Environmental Legislation - ICSI

Environmental Legislation - The Role of CS in Practice and Employment

VOL 51 | NO. : 06 | Pg. 1-156 | June 2021 | `100/- (Single Copy)ISSN 0972-1983

THE JOURNAL FOR GOVERNANCE PROFESSIONALS

Annual Subscription

The Council Contents

Mode of Citation: CSJ (2021)(06/--- (Page No.)

‘Chartered Secretary’ is generally published in the first week of every month. n Non-receipt of any issue should be notified within that month. n Articles on subjects of interest to company secretaries are welcome. n Views expressed by contributors are their own and the Institute does not accept any responsibility. n The Institute is not in any way responsible for the result of any action taken on the basis of the advertisements published in the journal. n All rights reserved. n No part of the journal may be reproduced or copied in any form by any means without the written permission of the Institute. n The write ups of this issue are also available on the website of the Institute.

Printed & Published byThe Institute of Company Secretaries of India‘ICSI House’, 22, Institutional Area, Lodi Road, New Delhi - 110 003. Phones : 41504444, 45341000, Grams : ’COMPSEC’ Fax : 91-11-24626727 E-Mail : [email protected] Weblink : http://support.icsi.eduWebsite : http://www.icsi.edu

Editor : Ashok Kumar Dixit

Vol. : LI n No.06 n Pg 1-156 n JUNE-2021

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�

President

Nagendra D. Rao

Vice President

Devendra V. Deshpande

Members (in alphabetical order)

Dr. Ahalada Rao Vummenthala

Anil Gupta (Govt. Nominee)

Ashish Garg

Balasubramanian Narasimhan

Chetan Babaldas Patel

Deepak Kumar Khaitan

Gyaneshwar Kumar Singh (Govt. Nominee)

Hitender Mehta

Dr. (Ms.) Madhu Vij (Govt. Nominee)

Manish Gupta

Manoj Pandey (Govt. Nominee)

Niraj Preet Singh Chawla

Praveen Soni

Ramasubramaniam C.

Ranjeet Pandey

S Santhanakrishnan (Govt. Nominee)

Vineet K. Chaudhary

Secretary

Asish Mohan

Chairman

N. P. S. Chawla

Members (in alphabetical order)

Dr. Ahalada Rao Vummenthala

Amit Kaushal

Anil Gupta

Ms. Aastha Gupta

Chetan Nayak k

Dr. D. K. Jain

G. R. Bhatia

H. M. Dattatri

Dr. (Ms.) Madhu Vij

Manoj Bisht

Puneet Handa

Vasudev Rao Devki

Vivek Hegde

Editor & Publisher

Ashok Kumar Dixit

Legal Correspondent

T. K. A. Padmanabhan

Editorial Advisory Panel06

®ISSN 0972-1983

[ Registered under Trade Marks Act, 1999 ]

Environmental Legislation - The Role of CS in Practice and Employment

VOL 51 | NO. : 06 | Pg. 1-156 | June 2021 | `100/- (Single Copy)ISSN 0972-1983


PAGE 04 – FROM THE PRESIDENT

PAGE 23 – ARTICLES

PAGE 107 - LEGAL WORLDPAGE 117 – FROM THE GOVERNMENTPAGE 129 – NEWS FROM THE INSTITUTEPAGE 145 – MISCELLANEOUS CORNERPAGE 146 – GST CORNER

PAGE 151 – ETHICS IN PROFESSION

PAGE 152 – CG CORNER

PAGE 153 – START UP INDIA

JUNE 2021 | 3 CHARTERED SECRETARY

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Dear Professional Colleagues,

W hile ech time we ponder over the ongoing situations, where on one hand our mind are bogged and boggled by the impact the pandemic has had on our lives and

on those we call our brethren, our hearts are filled with greater hope, gratitude and prayers towards the Lord Almighty seeking calmness, peace and tranquility. It is at this juncture that it seems apt to reconnect with the ancient scriptures for wisdom and strengthening of our belief in the fact that no matter what the circumstances, the good shall always prevail.

One such ancient scripture which holds popularity amongst the masses and especially amongst us professionals is the Shrimad Bhagavad Gita, the discourse of knowledge and wisdom from Lord Shri Krishna to Arjuna in the battlefield of Mahabharata. Given the fact that the words of this Scripture come to befit any and every scenario, it only seems apt to revisit the pages so as to understand our connections with the nature and the significance of building them.

It is in the tenth Chapter that deals with Vibhūti Yog or Yog through appreciating the infinite opulence of God that Arjun seeks knowledge as to how should one find oneness with the Supreme Lord. Although the reply is spread out over many verses, the crux of the same lies in the fact that the Lord himself claims to reside in the sun and the moon, the trees and the mountains, the animals and the birds, the air and the water bodies.

Ah_mË_m JwSm>Ho$e gd©^yVme`pñWV: &Ah_m[Xü _Ü`§ M ^yVmZm_ÝV Ed M &&20&&

(O Arjun, I am seated in the heart of all living entities. I am the beginning, middle, and end of all beings.)

ENVIRONMENT LEGISLATIONS: HEIGHTENING ROLE OF GOVERNANCE PROFESSIONALS

_mVm ^y[_: nwÌmoh§ n¥[Wì`m:&Z_mo _mVm n¥[Wì`¡ Z_mo _mVm n¥[Wì`¡&&

(The Earth is my mother and I am her child. Salutations to mother earth. Salutations to mother earth)

Hailing from the land of vedas, hailing from the nation where touching of mother earth in reverence, along with the above salutations from the AtharvaVeda mark the beginning of our normal days, the pedestal at which we place the nature and environment.

The celebration of the World Environment Day on the 5th of June, although maybe a reiteration of the commitment of environmental protection, the world over; yet for us in the heart of this nation, the day marks the celebration of seeking God and godliness in everything surrounding us. Although the environmental legislations have been put in place for the past so many decades, it is these times which while seeming wanton have accorded us the opportunity to pursue good governance not only in other areas of legislation but in this arena as well and not to mention, with greater diligence.

dºw$_h©ñ`eofoU [Xì`m ømË_[d^yV`:&`m[^[d©^y[V[^cmo©H$m[Z_m§ñËd§ ì`mß` [Vð[g&& 16&&

H$W§ [dÚm_h§ `moqJñËdm§ gXm n[a[MÝV`Z²&Ho$fw Ho$fw M ^mdofw [MÝË`mo@[g ^JdÝ_`m &&17&&

[dñVaoUmË_Zmo `moJ§ [d^yqV M OZmX©Z &^y`: H$W` V¥[á[h© ûm¥ÊdVmo ZmpñV _o@_¥V_² &&18&&

(Dear Lord Krishna ! Please describe to me your divine opulences, by which you pervade all the worlds and reside in them. O Supreme Master of Yog, how may I know you and think of you. And while meditating, in what forms can I think of you, O Supreme Divine Personality? Tell me again in detail your divine glories and manifestations, O Janardan. I can

never tire of hearing your nectar.)

4 | JUNE 2021 CHARTERED SECRETARY

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Yours Sincerely

CS Nagendra D. RaoPresident, ICSI

Amongst all these expectations, are entrenched the roles of professionals hailing from various backgrounds in their varied capacities as regards a large base of multifarious stakeholders. As Governance Professionals, while a part of our profile pertains to the efficient and diligent compliance with the laws, the other part involves playing a significant and effective role in the decision making at Board levels. Environment legislations are no different, rather in light of the paradigm shift being witnessed at a global level towards environmental sensitization and a more sustainable approach being solicited from corporates globally on this front, as well as the transference in the reporting from financial to non-financial, it is not just the ‘Business Responsibility’ that has increased but the responsibility of professionals too has enhanced by many degrees.

Although the Business Responsibility Reporting or BRR has been a part of reporting culture under SEBI for quite a while, the same is expected to garner greater support from stakeholders, and hence the responsibilities of professionals especially the Company Secretaries being multiplied.

While, as an Institute having always propagated the agenda of constant knowledge upgradation, skill updation and scaling all the opportunities available, if the future was to be foreseen, it would indeed rest upon our shoulders to assist, guide and handhold our corporates towards making not just environment friendly but ecosystem sustainable decisions. For as the old proverb goes, “We do not inherit the earth from our ancestors, we borrow it from our children”.

LAUNCH OF MCA21 V3: A MUCH MORE ROBUST INTERFACE Where on one hand the deliberation has been on strengthening our roots as mankind, it is indeed imperative that the road ahead is chalked and paved in sync with our growing needs. This statement although would be equally validated in all spheres of human activity, yet would be of much greater significance as and where governance and even so good governance is concerned. Over the past decade or so, an understanding that has dawned upon all of us commonly is that good governance and ease of doing business are two sides of the same coin. Even further, what binds the two together is the strength, dynamism and flexibility of technology. Some of the most important parameters which build up a nation’s position on the Ease of Doing Business Index find their very foundation relayed in the foothills of technology. And it is with this very intent that the Ministry of Corporate Affairs had conceived the thought, idea and ideology of revamping and refurbishing the very first medium of interaction between the Regulatory Authority and its various stakeholders, i.e., the MCA21 web portal. It gives me immense pleasure to share that in the Phase-I, the upgraded version of MCA website, was launched at the hands of Shri Anurag Singh Thakur, Hon’ble Minister of State for Finance and Corporate Affairs in the presence of Shri Rajesh Verma, Secretary, MCA and Shri Manoj Pandey, Joint Secretary, MCA and CCM (Govt. Nominee), ICSI at a Webinar organized by the ICSI. Congratulating the Ministry and all the Officers on this wondrous measure undertaken towards the fulfillment of our national agenda of promoting ease of doing business, I am sure that the same shall indeed be of great assistance and support to our professional fraternity in dispensing with their duties, roles and responsibilities.

APPROVAL OF UNION CABINET TO ICSI MOUs: EXPANDING BOUNDARIES For an Institute with a vision to be a global leader in promoting good corporate governance the need to have relations perfected with

international governance institutions and entities gains supremacy prima facie. In view of the same and in achievement of our very vision, the Institute of Company Secretaries of India has signed various Memorandum of Understanding (MoUs) with International Associations with similar objectives.

It is indeed a moment of great delight to share that the Union Cabinet, chaired by the Hon’ble Prime Minister, Shri Narendra Modi, has granted post facto approval to the Memorandum of Understandings (MoUs) entered into by the Institute of Company Secretaries of India (ICSI) with The Institute of Chartered Secretaries and Administrators (ICSA), UK and The Chartered Institute for Securities & Investment (CISI), UK. On behalf of all the Company Secretaries, both in India and abroad I would like to convey our sincere thanks to Ministry of Corporate Affairs for providing all the support and gratitude to the Government of India for granting approval for such associations.

CAPACITY BUILDING INITIATIVES: MARCHING AHEAD IN TOGETHERNESS A professional institution such as ours is only as good as its Brand Ambassadors, i.e., its members and students. For us, each one of the 65,000 members and 3,00,000 students spread across the entire nation are unequivocally significant. Just as the Mother Earth, the nature, the environment surrounding is witnessed to be in ever so giving stance and posture, the Institute while aligning its initiatives with the same thought has endeavored to alight the path of its stakeholders. Their growth, both personal and professional is a noteworthy aspect for us to undertake initiatives in that direction. And while we have been organizing webinars for both these stakeholders on various topics of professional and academic interest as well as personal health and wellness, the agenda has been to strive for more.

It is with this intent that the Institute has been continuing its Bi-weekly Academic interaction between students and Expert Faculties and its own Academic Officers which has been garnering much appreciation. Besides, to further the academic interests and knowledge pursuits of our members, the Institute is intending to re-launch its Webinar Series on Companies Act and SEBI Regulations under the umbrella of EEE 2.0 or the Enable, Evaluate and Excel – Webinar Series.

Getting back to the point from where we started; Andy Goldsworthy said and I quote, “We often forget that we are nature. Nature is not something separate from us. So when we say that we have lost our connection to nature, we have lost our connection to ourselves.” That said, the ongoing times while moving towards hope and positivity and to fresh beginnings once again seek the forging of stronger connections and deeper ties both with the outside nature and with our own selves on the inside. A self-introspection is what shall provide as a clearer insight into our strengths and weaknesses and the ways in which they can help us in realization of our professional goals with ease and grace.

To put in finality, the idea and intent is to keep the growth in process and our journeys ahead in motion. As true professionals at the very core, it shall require not just individual but our combined effort to come out on the other side of the pandemic, not just undaunted but completely future ready; and hence our thought,

Together we can. Together we will.

With warm regards,


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ICSI INITIATIVES UNDERTAKEN DURING THE

MONTH OF MAY, 2021INITIATIVES FOR MEMBERSUNION CABINET APPROVES MoUs ENTERED WITH ICSA, UK AND CISI, UK

The Union Cabinet, chaired by the Hon’ble Prime Minister, Shri Narendra Modi, has granted post facto approval to the Memorandum of Understandings (MoUs) entered into by the ICSI with The Institute of Chartered Secretaries and Administrators (ICSA), UK and The Chartered Institute for Securities & Investment (CISI), UK. ICSI had signed a MoU with the Chartered Governance Institute (CGI) (formerly known as ICSA) UK, in 1998, to provide reciprocal exemptions to subjects as well as training requirements to each other’s members. The MoU was supplemented in 2018 and has been extended to CGI divisions in Australia, Canada, Hong Kong/China, Malaysia, New Zealand, Singapore, Zimbabwe, Southern Africa and UK. The MOU with the CISI [erstwhile Securities & Investment Institute (SII)] was signed in the year 2008 making ICSI members directly eligible for the CISI membership which provides them with a better access and opportunity in the international capital and financial markets. The MoUs will nurture and sustain the two-way flow of knowledge and professional potential. Along with providing a range of collaborative activities, the MoUs augment ICSI’s international footprint and accentuate its efforts in providing its stakeholders with opportunities sans boundaries. The details of the MoUs are available at https://www.icsi.edu/international-perspective/

ICSI SPECIAL COVID-19 ASSISTANCE CORPUS ICSI Special Covid-19 Assistance Corpus was launched with a dedicated Corpus Fund of Rs.10,00,00,000/- (Rupees Ten Crore only) for providing a one-time financial assistance of maximum Rs. 5,00,000/- to the dependent (s) / legal heir(s) of a member of ICSI, in case of his/her unfortunate demise during the period from 1st April, 2020 to 31st March, 2022 on account of Covid infection and medical complications arising therefrom.

The Scheme is applicable for current members (as on the date of demise) who were not life members of CSBF and for those life members of CSBF who had completed 60 years of age on the date of demise. In case of life members of CSBF who had completed 60 years of age on the date of demise, the claim shall be limited to Rs. 2 lakh (the balance amount of Rs. 3 lakh could be claimed from CSBF).

REVISED LIMITS OF CSBF

Medical reimbursement limits under CSBF for those affected by Covid-19 have been enhanced w.e.f. 1st May, 2021. Members and / or their declared dependents who have tested COVID positive and have incurred expenses related to treatment for COVID in hospital (private/government/military) or under home quarantine/isolation shall be eligible for reimbursement as under:

� For life members of CSBF - Limit enhanced from Rs. 75,000/- to Rs. 1,50,000/- for self and declared dependents.

� For life members of CSBF who have not completed 3 years of subscription – Limit enhanced from Rs. 50,000/- to Rs. 1,00,000/- for self and declared dependents.

� For Company Secretaries who are non-members of CSBF - Limit enhanced from Rs. 50,000/- to Rs.1,00,000/- for self only.

As per existing Bye Laws of CSBF, the annual income criteria for deserving cases (i.e. annual income upto Rs. 7.5 lakh during the previous Financial Year) will remain the same.

Members who have not yet become the member of CSBF are requested to become a life member by remitting a one-time subscription of Rs. 10,000/- through Institute’s portal (http://www.icsi.edu) with ‘Form-A’ duly filled in and signed available at the link: https://www.icsi.edu/csbf/home. Contribution to the CSBF can be made through http://www.icsi.in/ICSIDonation/ as contribution to CSBF qualifies for deduction under Section 80G of the Income Tax Act, 1961.

GROUP INSURANCE POLICY A customized Group Insurance Policy for hospitalization due to Covid-19 (Digit Illness Group Insurance Cover) was launched in association with Go Digit General Insurance Ltd. w.e.f. 15th May, 2021 for ICSI members, students, employees and their families. Cover duration - one year with 30/60 days pre/post hospitalization periods. Age group covered - 18-55 years. The policy could be purchased till 30 days from the launch date.

MANDATORY CPE CREDITS FOR THE YEAR 2020-21 – COMPLETE WAIVERConsidering the difficulties posed by the pandemic and in order to facilitate the members in fulfilling the mandatory requirement of CPE Credits for the year commencing 1st April, 2020 to 31st March, 2021, the Council of the Institute had extended the last date for obtaining the mandatory CPE credits by the members till June 30, 2021. Furthermore, in view of the ongoing circumstances and situations, the Central Council at its 276th (Special) Meeting held on 5th May, 2021 has decided to grant complete waiver of the shortfall in the CPE Credit Hours (both structured & unstructured) for the Financial Year 2020-21.

ICSI UDIN AMNESTY SCHEME, 2021 – EXTENDED The Institute considering the challenges being faced due to global pandemic COVID-19 and taking into account the genuine cases where default has happened, and the defaulting PCS are willing to rectify the default and disclose the details and hence a UDIN Amnesty Scheme be released wherein a PCS may:


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SI� Generate UDINs missed earlier,� Modify UDIN details recorded at the time of generation,� Complete online process through STP Mode, � Revoke the UDINs not used,

while having immunity from disciplinary proceeding and without fees.

The window was initially kept open from 20th April, 2021 upto 15th May, 2021. Keeping in view the persisting pandemic situation in the country, the ICSI UDIN Amnesty Scheme - 2021 has been extended till 15th June, 2021.

ICSI eCSIN AMNESTY SCHEME, 2021 – EXTENDEDDue to the widespread of COVID-19 pandemic and the lockdowns imposed, there have been genuine cases where default has happened and the defaulting members are willing to rectify the default and disclose the details. In view of the same, the eCSin Amnesty Scheme-2021 has been put in place wherein members may:� Generate the eCSin, if not yet generated;� Rectify the eCSin details recorded at the time of generation

for appointment;� Update information in the eCSin generated ;� Revoke eCSin if employment already ceased;The members applying under ICSI eCSin Amnesty Scheme, 2021 shall be granted immunity from the applicability of the provisions of the eCSin Guidelines in respect of the eCSin for which request under this Amnesty Scheme has been made and disciplinary proceedings shall not be initiated or entertained in this respect. The Scheme was made effective from April 20, 2021 to May 15, 2021. However, in view of the ongoing situation, the ICSI eCSin Amnesty Scheme - 2021 has been extended till 15th June, 2021.

FORMATION AND RENEWAL OF STUDY CIRCLESICSI has been creating knowledge upgradation avenues for members by promoting formation of Study Circles across the country.� A new Study Circle namely “B.T. Road Study Circle of the

ICSI” was formed under EIRC for the financial year 2021-22. � Further, renewal of the “New Udaan Bhawan Study Circle

of ICSI” under NIRC has been approved for the financial year 2021-22.

REPRESENTATIONS SUBMITTED During the month, following representations were submitted to various Regulatory Authorities:� Request to include Company Secretary in Practice under

Regulation 45(3) of the SEBI (LODR) Regulations, 2015 submitted to the SEBI on May 13, 2021.

� Request to relax the time gap between two board / Audit Committee meetings of listed entities owing to the Second Wave of CoVID-19 pandemic submitted to the SEBI on May 17, 2021.

� Request for relaxation in levy of additional fees in filing of certain forms under the Companies Act, 2013 & LLP Act, 2008 on May 19, 2021.

WEBINARS CONDUCTEDDuring the month, the following Webinars were conducted with the intent of knowledge enhancement and upgradation of our members:� Associate Partner in the webinar organised by the PHD

Chamber of Commerce and Industry on the theme “Indirect Tax Relief Measures in view of Covid Pandemic” on Thursday, May 13, 2021.

� Webinar on the theme COVID-19 Mental Health and Wellness during the pandemic held on Friday, May 14, 2021.

� Webinar on launch of New Version (V3) of the website of Ministry of Corporate Affairs in the presence of senior officers of MCA on May 24, 2021.

� Supporting Partner in the webinar organized by ASSOCHAM Southern Region on the theme “Recent Decisions of the Supreme Court/Tribunals and Appellate Tribunal and Pre-packaged Insolvency Resolution Process under IBC for MSMEs” on Saturday, May 29, 2021. President, ICSI was the eminent speaker in the webinar.

CRASH COURSES LAUNCHEDICSI continuously endeavors to ensure that its members’ knowledge stay up to date with changing times. The pace of change is probably faster than it’s ever been and this is a feature of the new normal that we live and work in. Keeping this motive, the ICSI has come up with two Crash Courses, on the topics such as Related Party Transactions & Business Responsibility Reporting (Batch-2). More than 260 candidates have registered so far cumulatively in both the crash courses.

ONLINE TRAINING PROGRAMME FOR EMPANELMENT OF PEER REVIEWERSOnline training programme for empanelment of Peer Reviewers was organised on Saturday, the 8th May, 2021. Around 110 members participated in the training programme. The participants will be empanelled as Peer Reviewer subject to the fulfilment of criteria mentioned in the Guidelines for Peer Review of Attestation and Audit Services by Company Secretaries in Practice.

ICSI SOCIAL CONNECTIn these critical times with surge in COVID pandemic, several humanitarian initiatives were taken. Members were sensitised about registering themselves on ICSI Social Connect portal for plasma donation. Members were urged to inform how they may be of help to others in need for arranging hospital treatment, oxygen, medicines, vaccine, medical equipment, food, COVID/medical insurance, isolation centres, plasma, etc. Information shared by the members have been hosted on Institute’s website as ICSI COVID Heroes.

Members were sensitised about the benefits of becoming a life member of CSBF where COVID related medical expenses are also reimbursable in addition to other benefits.


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ICSI ICSI INSTITUTE OF INSOLVENCY

PROFESSIONALS� Pre-Registration Educational Course

Pursuant to Regulation 5(b) of the IBBI (Insolvency Professionals) Regulations, 2016, individuals are eligible to register themselves as Insolvency Professionals (IP) only after undergoing through the mandatory 50 hours Pre Registration Educational Course from an Insolvency Professional Agency after his/her enrolment as a Professional Member.ICSI IIP jointly with the other three Insolvency Professional Agencies conducted Pre-Registration Educational Course online from 26th April, 2021 to 2nd May, 2021.

� Workshops organized

® Workshop on ‘Analysis of Supreme Court Judgements w.r.t. IBC’ on 8th May, 2021.

® Workshop on ‘Immunities accessible for Insolvency Professionals under IBC’ on 15th May, 2021.

® Workshop on ‘Valuation under IBC’ on 22nd May, 2021.

® Workshop on ‘Asset Reconstruction Companies w.r.t IBC: Need of the hour’ on 29th May, 2021.

INITIATIVES FOR STUDENTSTEMPORARY RELAXATION FOR COMPLYING WITH PRE-EXAM TEST & ONE DAY ORIENTATION PROGRAMME- JUNE, 2021 SESSIONThe Institute has given temporary relaxation to the students to comply with Pre-Exam Test & One day Orientation Programme to enable them to enroll for June, 2021 Session by 25th March, 2021 (without late fees) and 9th April, 2021 (with late fees) without checking the status of compliance with the aforesaid requirements. Such relaxation is being allowed subject to the condition that the students shall comply with the requirement of Pre-Exam Test & One day Orientation Programme by 16:00 Hours, 31st July, 2021.

BI-WEEKLY PHONE IN / VIDEO INTERACTIVE SESSIONS FOR STUDENTS OF ICSIThe Institute of Company Secretaries of India has created a unique platform to deliberate upon crucial aspects of modules and subjects and clarify academic queries of students in a streamline manner by Academic Officers and Expert Faculties. The details of the sessions conducted during the month of May, 2021 are as under:

Session Date Subject9th 4th May, 2021 Banking Laws and Practice

10th 6th May, 2021 Securities Laws and Capital Markets

11th 11th May, 2021 Insolvency Law and Practice12th 13th May, 2021 Secretarial Audit, Compliance

Management & Due Diligence13th 18th May, 2021 Multidisciplinary Case Studies14th 20th May, 2021 Advanced Tax Laws

15th 26th May, 2021 Jurisprudence, Interpretation & General Laws

16th 27th May, 2021 Intellectual Property Rights - Laws and Practice

The video recordings of the sessions are available on the Academic Portal of the Institute under video lectures https://www.icsi.edu/bi_weekly_sessions_for_students/?edit_off=true

4TH ICSI SAMADHAN DIWAS HELD ON 12TH MAY, 2021The Samadhan Diwas is an initiative by the ICSI towards on-the-spot solution of the grievances of the trainees and trainers.The ICSI had successfully organized the Fourth Samadhan Diwas on Wednesday, 12th May 2021. The focus area of this Samadhan Diwas was TCC (Training Completion Certificate). In the Samadhan Diwas students got opportunity to present their case to the Director (Training & Placement), ICSI along with other officials of the Directorate of Training. More than 40 students had attended and got the solutions on the spot.

RE-OPENING OF ONLINE WINDOW FOR SUBMISSION OF CS EXAMINATION FORM FOR JUNE 2021 EXAM SESSION (NOW POSTPONED AND FRESH DATES ARE YET TO BE ANNOUNCED)

In view to facilitate the students who could not submit the exam form and are desirous of appearing in June 2021 exam session, an online window for the submission of exam form for June 2021 session for Foundation/Executive /Professional Programme examinations was re- opened from 15th May, 2021 to 22nd May, 2021.

PROVISIONAL REGISTRATION IN EXECUTIVE PROGRAMME FOR CSEET PASSED CANDIDATES

ln view of the difficulties faced by the students who have already passed CSEET and awaiting the results of 10+2 examination, it has been decided to allow such students to seek provisional registration to the Executive Programme subject to the submission of proof of passing 10+2(12th) examination within six months from the date of such provisional registration to the Executive Programme.

COMPANY SECRETARY EXECUTIVE ENTRANCE TEST (CSEET)To test the aptitude of the candidates required for the profession of Company Secretaries, Company Secretary Executive Entrance Test (CSEET) has been introduced as the qualifying test for registration to Executive Programme through the Company Secretaries (Amendment) Regulations, 2020. Various initiatives were taken for the CSEET students:� CSEET conducted on 8th May, 2021 through remote

proctored mode

On account of Covid-19 Pandemic restrictions and undertaking necessary precautions, the Institute successfully conducted the May CSEET on 8th and 10th May 2021 respectively through REMOTE Proctored mode instead of conducting the same from Test Centers. Candidates were allowed to appear for the test through their own laptop/ desktop from home/ such other convenient place.


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candidates of May session

In view of continuing health crisis in the country due to spread of Covid-19 Pandemic, the Institute decided to give the facility to the CSEET candidates to opt out from CSEET held on 8th May 2021 to CSEET to be held in July 2021 and granting them benefit of carrying forward the credit of CSEET fee paid for the May 2021 Session to July, 2021 Session.� CSEET(July session) will be held on 10th July, 2021 July 2021 Session of CSEET will be held on 10th July, 2021 through remote proctored mode. Students can register upto 15th June, 2021 for CSEET which is the next cut-off date of CSEET registration. Registration can be done at https://smash.icsi.in/Scripts/CSEET/Instructions_CSEET.aspx� Commencement of online CSEET classes

Most of the Regional/Chapter Offices have commenced classes for the students appearing in CSEET to be held in July 2021. Interested students can click at the link to contact Regional/Chapter offices: https://www.icsi.edu/media/webmodules/websiteClassroom.pdf� Mock tests for Candidates appeared in May CSEET.

The Institute conducted three mock tests for the candidates who appeared in May 2021 session of CSEET. The Mock tests which conducted on 4th, 5th and 6th May 2021 respectively.

COMMENCEMENT OF CRASH COURSE/REVISION CLASSES Regional/Chapter Offices of the Institute are conducting Crash Course/Revision Classes for the students of Foundation/Executive/Professional Programme appearing in June 2021 exam. Interested students can contact the nearest Region/Chapter to join the classes. Details of Regional/Chapter offices are available at https://www.icsi.edu/media/webmodules/websiteClassroom.pdf

ONLINE DOUBT CLEARING CLASSES Online doubt clearing classes are being conducted for the students appearing in June 2021 exam for all stages, all subjects and students of both new and old syllabus. The online classes are being conducted in particular for the students appearing in June 2021 examination; however other students of the Institute can also join the classes. The classes are being taken by renowned and distinguished faculties with enriched teaching experience. The students can submit their queries through Google link which will be sent to them after registration. They can also interact live with the faculties through the chat box during the classes. Students are required to register at the following link to attend the classes https://tinyurl.com/uz7j7jf

CLARIFICATION REGARDING ELIGIBILITY OF STUDENTS WHOSE REGISTRATION HAS LAPSED /WILL LAPSE, FOR JUNE 2021 SESSION OF EXAMINATION (NOW POSTPONED & FRESH DATE YET TO BE ANNOUNCED)

Due to Postponement of June 2021 session of examination, it is clarified that students whose registration at the time of submitting their enrolment request for June 2021 Session

of Examination were valid, they all will be treated eligible to appear in the CS June 2021 Examination without seeking De-novo Registration, irrespective of the dates when the said examinations are actually being conducted. The said facility is only for appearing in June 2021 Examination.

STUDENT COMPANY SECRETARY, CS FOUNDATION E-BULLETIN AND CSEET E-BULLETIN

The Student Company Secretary e-journal for Executive/ Professional programme students of ICSI, CS Foundation course e-journal for Foundation programme students of ICSI and CSEET e-bulletin covering the latest update on the subject on the CSEET have been released for the month of May, 2021. The journals are available on the Academic corner of the Institute’s website at the link: https://www.icsi.edu/e-journals/

RECORDING OF VIDEO LECTURES ICSI is recording video lectures of eminent faculties for the students of ICSI which help them to prepare for the examination. Students of the Institute can access recorded videos available on the E-learning platform by logging in to https://elearning.icsi.in

Login credentials are sent to all registered students at email. After successful login, go to “My courses” or “My Communities” section, where you will find the recorded videos and other contents.

IMPORTANT LINKS FOR STUDENTS To facilitate and update the students, a list of important links at the website of the Institute has been compiled. Students can go through the links given below to get all important details:

� For Student Services related updates: https://www.icsi.edu/media/webmodules/Student_Services_links.pdf

� For Academic updates: https://www.icsi.edu/media/webmodules/Academic_links.pdf

� For Training related updates: https://www.icsi.edu/media/webmodules/Training_Links.pdf

� Info Capsule- A Daily update for members and students, covering latest amendment on various laws for the benefits of our members and students available at https://www.icsi.edu/infocapsule/

IT RELATED INITIATIVES � The Institute’s Website (www.icsi.edu) has been migrated

to Cloud Services successfully to enable smooth services to ICSI Stakeholders.

� Email System has been migrated to Microsoft O365 Cloud services successfully.

� Procured 4 latest Servers for ICSI Data Centre to strengthen the ICSI IT Infrastructure.

� Procured latest CISCO WebEx meeting suite for cater Webinar/meeting/Virtual class sessions for ICSI stakeholders.


ICSI Congratulates Ministry of Corporate Affairs on the launch of MCA21 Version 3.0 at the hands of Shri Anurag Singh Thakur,

Hon’ble Minister of State for Finance & Corporate Affairs.


Glimpses of ICSI Webinars

WEBINAR ON“RECENT DECISIONS OF THE SUPREME COURT/TRIBUNALS AND

APPELLATE TRIBUNAL AND PRE-PACKAGED INSOLVENCY RESOLUTION PROCESS UNDER IBC FOR MSMEs” ORGANIZED BY ASSOCHAM ALONG

WITH ICSI ON 29TH MAY, 2021



WEBINAR ONWEBINAR ON “DIRECTORS’ REMUNERATION” ORGANIZED BY THE ICSI - BENGALURU CHAPTER AND BANGALORE CHAMBER OF INDUSTRY AND

COMMERCE ON 29TH MAY, 2021

WEBINAR ON“GST IMPACT ON SOFTWARE SERVICES AND IPR” ON 29TH MAY, 2021

WEBINAR ON“LAUNCH OF NEW VERSION (V3) OF THE WEBSITE” OF MINISTRY OF

CORPORATE AFFAIRS ON 24TH MAY, 2021



WEBINAR ON “SILVER JUBILEE FOUNDATION DAY CELEBRATION” BY NASHIK

CHAPTER OF WIRC OF ICSI ON 21ST MAY, 2021

WEBINAR ONCELEBRATION OF 22ND FOUNDATION DAY OF ICSI-CCGRT

ON 19th MAY, 2021

WEBINAR ON “POSITIVE THINKING- KEY TO A HEALTHY LIFESTYLE”

ORGANIZED BY NIRC OF ICSI ON 17TH MAY, 2021

Speaker: Sis BK Shivani



WEBINAR ON“MENTAL HEALTH & WELLNESS DURING THE PANDEMIC”

ON 14TH MAY, 2021

WEBINAR ON“INAUGURAL SESSION OF FIRST ONLINE CLDP” ORGANIZED BY ICSI-

CCGRT ON 10TH MAY, 2021

WEBINAR ON “OPPRESSION AND MISMANAGEMENT (IN-DEPTH ANALYSIS OF THE RECENT

TATA-CYRUS MISTRY JUDGEMENT PASSED BY THE HON’BLE SUPREME COURT OF INDIA AND ITS IMPACT ON COMPANY LAW JURISPRUDENCE”

ORGANIZED BY CHANDIGARH CHAPTER OF NIRC OF ICSI ON 1st MAY, 2021

Speaker: Dr. Vibhuti Sharma, Senior Counsellor


The Samadhan Diwas is an initiative by the ICSI towards on the spot solution of the grievances of the trainees and trainers. The ICSI had successfully organized the Fourth Samadhan Diwas on Wednesday, 12th May 2021. The focus of this Samadhan Diwas was TCC (Training Clearance Certificate). In the Samadhan Diwas, students got opportunity to present their case to the Institute. More than 40 students attended and got the solutions instantly.

In addition to above, the pending matters of the students’ in the following areas were also heard and resolved .

1. Issues relating to Switchover from Old training to New Training Structure

2. Pending registration in Classroom EDP, e-EDP, e-MSOP

3. Instant issue of sponsorship letters for Practical Training

4. Exemption related matters in Practical Training

5. Resolving the issues of Training Completion Certificate

The students appreciated the efforts of the institute for creating a platform for direct interaction with the ICSI officials to solve their matter on the spot.

Team ICSI

ICSI Conducted 4th Samadhan Diwas on Wednesday, 12th May 2021


Call for Articles for publication in Chartered Secretary Journal – August 2021

Call for Articles

Unearthing Corporate Frauds – The ever-increasing role and scope for Governance Professional

Any and every law, rule and regulation have always been put in place to regulate a certain area and arena of human life and activity. The Companies Act, 1956 followed by the Companies Act, 2013 along with their Rules have governed and regulated the corporate arena creating a sense of security for all the stakeholders. It was for the reiteration of this very intent that the roles and responsibilities of various professionals had been adequately outlined and defined. However, with expanding territorial boundaries and usage of technology and other new techniques to give effect to crimes, corporate scandals have still been haunting the corporate world. What is more significant is the fact that these frauds while requiring the government to pass effective laws have increased the responsibility of auditors. Not only companies but the statutory auditors as well as governance professionals have been bound by the laws including the corporate governance guidelines and procedures, so that chances of fraudulent activities can be reduced.Given the ever-increasing role of Governance Professionals, we are pleased to inform that the August 2021 issue of Chartered Secretary Journal will be devoted to the theme “Unearthing Corporate Frauds- The ever-increasing role and scope for Governance Professional” covering inter alia the following aspects:• Analysis of the major areas of frauds.• To examine role of top management in fraudulent practices.• Analysis of the efficacy of various laws and rules passed for enhanced corporate governance.• Role and importance of financial statements in investment decision making.• Corporate Governance Policies.• Legislative Framework of Corporate Governance in India.And many more…Members and other readers desirous of contributing articles may send the same latest by Monday, July 19, 2021 at [email protected] for considering in the August 2021 issue of Chartered Secretary.The length of the article should ordinarily be between 2,500 - 4,000 words. However, a longer article can also be considered if the topic of discussion so demands. The articles should be forwarded in MS Word format. All the articles are subject to plagiarism check and will be blind screened. Direct reproduction or copying from other sources is to be strictly avoided. Proper references are to be given in the article either as a footnote or at the end. The rights for selection/rejection of the article will vest with the institute without assigning any reason.We look forward to your co-operation in making this initiative of the Institute a success.

Regards, Team ICSI


Articles in Chartered Secretary

Guidelines for Authors1. Articles on subjects of interest to the profession of company secretaries are published in the Journal.2. The article must be original contribution of the author.3. The article must be an exclusive contribution for the Journal.4. The article must not have been published elsewhere, and must not have been or must not be sent

elsewhere for publication, in the same or substantially the same form.5. The article should ordinarily have 2500 to 4000 words. A longer article may be considered if the subject so

warrants.6. The article must carry the name(s) of the author(s) on the title page only and nowhere else.7. The articles go through blind review and are assessed on the parameters such as (a) relevance and

usefulness of the article (from the point of view of company secretaries), (b) organization of the article (structuring, sequencing, construction, flow, etc.), (c) depth of the discussion, (d) persuasive strength of the article (idea/ argument/articulation), (e) does the article say something new and is it thought provoking, and (f) adequacy of reference, source acknowledgement and bibliography, etc.

8. The copyright of the articles, if published in the Journal, shall vest with the Institute.9. The Institute/the Editor of the Journal has the sole discretion to accept/reject an article for publication in

the Journal or to publish it with modification and editing, as it considers appropriate.10. The article shall be accompanied by a summary in 150 words and mailed to [email protected]. The article shall be accompanied by a ‘Declaration-cum-Undertaking’ from the author(s) as under:

Declaration-cum-Undertaking

1. I, Shri/Ms./Dr./Professor........................... declare that I have read and understood the Guidelines for Authors.2. I affirm that:

a. the article titled”............” is my original contribution and no portion of it has been adopted from any other source;

b. this article is an exclusive contribution for Chartered Secretary and has not been/nor would be sent elsewhere for publication; and

c. the copyright in respect of this article, if published in Chartered Secretary, shall vest with the Institute.d. the views expressed in this article are not necessarily those of the Institute or the Editor of the

Journal.3. I undertake that I:

a. comply with the guidelines for authors,b. shall abide by the decision of the Institute, i.e., whether this article will be published and/or will be

published with modification/editing.c. shall be liable for any breach of this ‘Declaration-cum-Undertaking’.

Signature

40 OCTOBER 2019 I CHARTERED SECRETARY

Articles in Chartered Secretary

Guidelines for Authors1. Articles on subjects of interest to the profession of company secretaries are published in the Journal.2. The article must be original contribution of the author.3. The article must be an exclusive contribution for the Journal.4. The article must not have been published elsewhere, and must not have been or must not be sent

elsewhere for publication, in the same or substantially the same form.5. The article should ordinarily have 2500 to 4000 words. A longer article may be considered if the subject so

warrants.6. The article must carry the name(s) of the author(s) on the title page only and nowhere else.7. The articles go through blind review and are assessed on the parameters such as (a) relevance and

usefulness of the article (from the point of view of company secretaries), (b) organization of the article (structuring, sequencing, construction, flow, etc.), (c) depth of the discussion, (d) persuasive strength of the article (idea/ argument/articulation), (e) does the article say something new and is it thought provoking, and (f) adequacy of reference, source acknowledgement and bibliography, etc.

8. The copyright of the articles, if published in the Journal, shall vest with the Institute.9. The Institute/the Editor of the Journal has the sole discretion to accept/reject an article for publication in

the Journal or to publish it with modification and editing, as it considers appropriate.10. The article shall be accompanied by a summary in 150 words and mailed to [email protected]. The article shall be accompanied by a ‘Declaration-cum-Undertaking’ from the author(s) as under:

Declaration-cum-Undertaking

1. I, Shri/Ms./Dr./Professor........................... declare that I have read and understood the Guidelines for Authors.2. I affirm that:

a. the article titled”............” is my original contribution and no portion of it has been adopted from any other source;

b. this article is an exclusive contribution for Chartered Secretary and has not been/nor would be sent elsewhere for publication; and

c. the copyright in respect of this article, if published in Chartered Secretary, shall vest with the Institute.d. the views expressed in this article are not necessarily those of the Institute or the Editor of the

Journal.3. I undertake that I:

a. comply with the guidelines for authors,b. shall abide by the decision of the Institute, i.e., whether this article will be published and/or will be

published with modification/editing.c. shall be liable for any breach of this ‘Declaration-cum-Undertaking’.

Signature

40 OCTOBER 2019 I CHARTERED SECRETARY


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Company Secretaries are our New Eco-WarriorsMrs. Almitra H. Patel

T his article highlights the many areas where a CS can shape company policies. Many eco-friendly moves unexpectedly end up saving costs and improving profits

as well as the environment. Six sustainability targets are described: becoming water-neutral by capturing and storing rainwater and surface runoff equal to the firm’s annual freshwater consumption, plus use of recycled wastewater. It describes ways towards net-zero energy consumption by reduced use of electricity and fossil fuels, plus funding of adequate renewable-energy capex and opex. Minimise use of materials and generation of waste and pollution. Most importantly, it addresses the mandatory requirement of EPR, Extended Producer Responsibility, and ways to comply with the various Rules on this.

SEBI and Sustainability Reporting in India - Embracing the FuturePradeep Ramakrishnan & Surabhi Gupta & Ishita Sharma

A sustainability report is used to communicate company’s performance on indicators based on relevant environmental, social and governance issues. Non-

financial, sustainability reporting provides an opportunity to businesses to communicate in an open and transparent way with stakeholders. SEBI was one of the early adopters of sustainability reporting for listed entities amongst global peers. The filing of the Business Responsibility Report (BRR) containing ESG (Environment, Social and Governance) disclosures was first introduced for the top 100 listed entities (by market capitalization) in 2012. The same has now been revamped considerably by SEBI in line with the NGRBCs. The new format is called the Business Responsibility and Sustainability Report (BRSR) and marks a significant improvement in the way in which Corporate India looks at sustainability reporting. This article provides a snapshot of the major changes envisaged by the BRSR.

Envisioning Company Secretaries as Champions of Environment ProtectionUsha Ganapathy Subramanian

D ecades of industrialization with indiscriminate use of fossil fuels and unsustainable lifestyle have led to climate change and environmental degradation. With

rising temperature and environmental disasters serving as a wake-up call, governments the world over have enacted legislations to take control of the situation. Various international organizations and think-tanks have been

discussing on measures to counter climate change and have been encouraging environmental, social and governance (ESG) initiatives by corporates. In India too, we have a plethora of environmental laws to rein in environmental degradation and to promote sustainable development. Major requirements include obtaining consent from State Pollution Control Board for emission of pollutants in air or water, providing information on actual or apprehended discharge beyond standard emission levels, getting environmental clearance for certain projects, and making disclosures in respect of compliance with terms of such approvals. Supporting provisions in corporate and securities laws also mandate compliance with environmental laws. Under the Companies Act, 2013, directors have the duty to ensure compliance with all applicable laws and Company Secretaries should facilitate such compliance. Various disclosure requirements are also designed to nudge the companies to migrate to sustainable ways of doing business. The Ministry of Corporate Affairs has issued National Guidelines on Responsible Business Conduct to provide impetus to corporates to take ESG initiatives. Company Secretaries have the opportunity in bringing about this transformation by ensuring compliance with environmental laws as well as by guiding the boards in adopting environment-friendly policies and processes.

Evolution of Environment Protection Laws in India and Challenges AheadHema Gaitonde

T he foundation of environment governance on a global scale was laid at the United Nations (UN) Conference held in the year 1972 in Stockholm. Further, the UN

Sustainable Development Goals (SDGs) 2030 adopted in the UN Summit 2015, created a vision for all the nations of the world to work towards a safe ecosystem. This article is basically about manner in which the environment law evolved in India, over the years, under the impact of the various international agreements/protocols and standards. In spite of several environmental legislations and government incentives, India today is being ranked very low on the environment protection index in the world. Besides strict implementation of law, a basic behavioral change is required. The people of India and the business entities operating here, need to be totally committed to the cause of creating a safe, sustainable and resilient environment. We have to proceed by applying the ethos of” Vasudhaiva Kutumbakam” meaning the entire ecosystem is my family and I am responsible for its protection.

Rio Conference- A Milestone in Environmental ProtectionAnil Kumar Dubey

R io Conference or Earth Summit, a major International Conference, puts the environmental protection on the centre stage of the of the international diplomacy and

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discourse. This conference has produced many tangible outcomes in the form of Rio Declaration, Convention on Biological Diversity, Forest Principles and United Nation Framework Convention on Climate Change (UNFCCC). This summit has led the evolution many important environmental principles like Common but Differentiated Responsibilities (CBDR), Polluter Pays Principle, Precautionary Principle etc. Indian Judiciary has taken the lead in implementing the principles of the Rio Conference in the development of the environmental jurisprudence at the domestic level. Journey from Millennium Development Goals (MDGs) of 2000 to the Sustainable Development Goals (SDGs) of 2015. The Rio +20 outcome also contained other measures for implementing sustainable development, including mandates for future programmes of work in development financing, small island developing states and more.

Environment Protection, Regulatory Framework and Role of Company SecretariesVasumathy Vasudevan

W orld Environment Day is celebrated on June 5 every year. On this occasion, it is important to highlight the compliance of Environmental Laws and understanding

of its Regulatory Framework. Environmental Law covers the entire ambit of the Environmental Protection Act, Water Act and Air Act. This Article is an attempt to throw light on the regulatory framework and the role of the Company Secretary in compliance of various laws, regulations governing Environment Protection, proper maintenance of factories surrounding, timely submission of the Returns under the said acts and rules framed there under and timely intimation to the department about any incident or accident occurred in factories.

Landmark Judgements of National Green Tribunal (NGT): Strengthening the Environmental Protection Regime in the CountryPradeep Kumar Ray

T he National Green Tribunal Act, 2010 enables the creation of a National Green Tribunal (NGT) for the effective and expeditious disposal of cases relating to

environmental protection, conservation of forests and other natural resources including enforcement of any legal right relating to environment and giving relief and compensation for damages to persons and property in line with the provision of protection of life and personal liberty under Article 21 of Part III of India’s constitution. Accordingly, NGT was formed in 2010 as a dedicated jurisdiction in environmental matters to provide speedy environmental justice and help reduce the burden of litigation in the higher courts. Since its inception,

it has been strengthening the environmental protection regime in the Country. In this article, the authors critically analyse all relevant aspects, year wise landmark judgements and five topmost judgements that created history in an effort to discern the trends in environmental jurisprudence in India.

Environmental Regulation - Awareness and ActionGeetika Garella

T he Earth needs to be protected if the ecology and economy are to prosper. Environmental Protection is extremely significant in today’s age of climate change

and in the wake of the Covid-19 pandemic, it is a substantial starting point to initiate the process of getting the economy back on track by ensuring complete adherence to the environmental laws. Environmental legislation and resulting environmental agreements have grown internationally to address the danger of global climate change thus placing a heavier burden on nations with respect to environment protection. Environmental Regulation in India has been a combination of statutes, common law, treaties, conventions, regulations, and policies pertaining to various aspects of the Environment. The Company Secretary is the transformative solutions provider who can handhold communities, corporations, individuals, and governments to recognise the environment regulation and take the appropriate actions for the fulfilment of the same.

Part -II

POSH AT WORKPLACE – Its Impact and Influence in CorporatesKrish Narayanan

T he Government of India passed a legislation considering the need and importance to prevent the women from sexual harassment at workplace

called as PoSH Act, 2013. The ILO and CEDAW have come out with certain principles on upholding the right of women and empowerment precedent to this law. The Honourable Supreme Court of India tested the validity of the provisions of IPC under different cases, directed the union of India to pass a separate legislation under vishaka guidelines. The object of Prevention, Prohibition, and redressal mechanism on sexual harassment at workplace considered as an outcome of good governance. This act defines, workplace, aggrieved women, sexual harassment, and penalties to ensure safety and quality environment. It laid emphasis on employer for constitution of committees to receive complaints, conduct enquiry and action taken by the authorities concerned. The employer has to preserve modesty, dignity and self-respect of women in all strides of the organization.

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Prevention of Sexual Harassment at Workplace (POSH) Act, 2013Sumit Kochar & Shivam Gera & Akanksha Dave

M illions of employees are entering the workforce today due to greater access to education and jobs. Unfortunately, some suffer through sexual harassment

at work. As a result, we must fight to eliminate workplace sexual harassment since employees have the right to work in a secure and safe atmosphere. Much of the harassment that employees face at work isn’t “Sexual” in content or design. This article tries to highlight the measures that tend to spontaneously increase in sexual harassment cases from different time perspectives. The Hon’ble Supreme Court recognised and dealt with the practise of all forms of sexual harassment at work for the first time in the case of Vishaka Judgement and set up various guidelines for formation of a separate Complaints Committee for redressal, penalties and false and frivolous complains in every company under POSH Act. Further, we have highlighted the impact of POSH Act on the corporate through the pros and cons of the POSH Act. Despite the fact that the POSH Act has been in place since 2013, there is still a dearth of information about the consequences of sexual assault and how to respond to it. The POSH Act’s proper implementation involves not only the creation of an environment in which women may openly express their problems and get justice, but also the refinement of males against workplace harassment of women.

POSH at Workplace – Its Impact and Influence in CorporatesNachiket Sohani

T he Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 came into effect in the year 2013. It aims

to provide protection against sexual harassment of women at workplace and to prevent and redress the complaints of sexual harassment and for any incidental matters. It also changed the perspective of society towards the working women resulting in criminalization of certain offences towards the women. The Act also requires every organization to formulate a policy on prevention of sexual harassment at workplace against women and to constitute committee to address the instances of workplace sexual harassment against women. The Companies Act, 2013 also requires certain disclosures under the Act. Internationally, the United Nations General Assembly also recognizes workplace sexual harassment of women as a serious offence by observing June 19 of each year as the International Day for the Elimination of Sexual Violence in Conflict.

PART-III

Important Learnings from the Judgment of the Hon’ble Supreme Court in Civil no. 440-441 of 2020Vadapalli Srinivas

I n their Judgment, the Hon’ble Apex Court dealt with history of Oppression, Mismanagement and Unfair Prejudice in England and the change of language and

the consequential change of parameters for an enquiry relating to oppression and mismanagement from 1951 to 1956 and from 1956 to 2013 in India. It is observed by the Apex Court that while the conduct of the Company’s affairs in a manner that warrant interference should be “present and continuing” under the 1913 Act and 1956 Act, the conduct could be even “past or present and continuous” under the 2013 Act. It is further observed that under the 2013 Act, conduct prejudicial to any member or prejudicial to public interest or prejudicial to the interest of the company are all added together. It is held that “small shareholders” are different from “minority shareholders” and that the right to claim proportionate representation is available only to “small shareholders” and not to “minority shareholders”. The Judgment is very elaborate, and, in this article, an attempt is made to some of the important observations of the Apex Court.

Risk Management and The Recent Amendments in The SEBI Listing RegulationsSudhakar Saraswatula

R isk is inherent in every business and risk and reward go hand in hand. Risk is omnipresent and all pervasive in any walk of life, more so in the business. The ability of

the managers and their knowledge towards risks play a very critical role in how systematically risks are handled by the organization. The survival of an organization depends upon its ability to anticipate and prepare for the change proactively rather than waiting for the change to happen and then to react to it. The etymology of the word “Risk” may be traced to the Latin word Rescum, which means Risk at Sea. The objective of Risk Management is neither to prevent nor to prohibit from taking any risk but to ensure that the risk is consciously taken with adequate preparation and consciousness with appropriate risk mitigation measures in place before hand.

CSR in context of Bhagavad Gita!Makarand Joshi

S atvik Dana means charities for right cause, right person, and right time with proper process and without any expectation in return. Bhagavad Gita elaborates Satvik,

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Rajas and Tamas charities and destiny arising out of such charities. Recent changes in Section 135 and corresponding rules are actually pushing a corporate to a do a very well thought, well processed CSR without even any remote economic or other benefit in return. There would be corporates which will implement these provisions in true sense and there would be some which will try to somehow meet the letter without adhering to its true intent. If implemented in letter and spirit it will not only help to fulfil the Sustainable Development Goals set by UN but at individual and corporate level also it will forward such person/ entity. This validation we get when we reconcile modern concept of CSR and teachings of Lord Shree Krishna in Bhagavad Gita. This article is trying to throw light on these aspects.

Transfer Pricing and Advance Pricing Agreements in IndiaDr. Rajiv V Shah & Ravisankar G.

T ransfer pricing has become an integral part of international trade today, mainly due the encouragement to international trade and the subsequent spread of

multinational corporations (MNCs). However, this has also led to the possible fear of tax arbitrage, or the transfer of profits to economies having lower tax rates, thus reducing the overall tax liability of the MNC and reducing the tax collection of the country where the profit should have been taxed. To overcome this, many countries have evolved an Advance Pricing Agreement (APA) programme whereby the transfer price of goods and services between related organizations is pre-decided amongst taxpayers and tax authorities, thereby providing all concerned parties with certainty in connection with the transfer price of cross-border transactions between group entities. This article also looks at the growth of the APA programme in India with the number of APA applications filed from 2012-13 to 2018-19 with details of classification, time periods and average processing time per application. It finds that the APA programme can contribute significantly to the reduction of transfer pricing disputes by anticipating and pre-empting them in a mutually agreeable manner.

Moving from Human Resource Management to Human Asset Management: A Key to Competitive AdvantageDr. Manish B. Raval & Dr. Ashish B. Gorvadiya

B y misapprehension, we call it Human Resource Management. In reality, it should be Human Asset Management. Because the people should

be treated like assets not like resources. Out of all the factors of production, human is the only factor which keep other factors in motion. If human is not treated satisfactorily, they may make all the other factors of production useless. If human is treated like resource,

he will be exploited, but if he is treated like an asset, he will be protected. When we see something as an asset our perspective towards it is transformed considerably in a constructive manner. So, the firms should treat its employees as an asset rather than resources. If the organization is managing its employees in excellent manner, it is very much easy for it to gain competitive advantage. If the organization has competitive advantage in terms of its employees, no other firms can beat it.

“The Pre-Pack” - New Insolvency Regime For Micro, Small and Medium Enterprises (MSMEs)Introduced by GovernmentPalak Atul Manek

T he Micro, Small and Medium Enterprises (MSME) sector has emerged as a highly vibrant and dynamic sector of the Indian economy over the last five decades.

It contributes significantly in the economic and social development of the country by fostering entrepreneurship and generating large employment opportunities in our country. But the current COVID-19 pandemic has substantially disrupted the operations of these MSME due to their dependence on the cash economy that is severely hit by the lockdown, the physical non-availability of workers and restrictions in the availability of raw material and transport infrastructure. So, in order to resolve the financial distress in MSMEs, on 4th April,2021, centre has issued an Ordinance to introduce Pre-packaged Insolvency resolution process for corporate entities classified as MSMEs. This law has been introduced to provide an “Efficient Alternative Insolvency Resolution Process”. In this article, The Author has given a brief idea and features of this new insolvency regime introduced by centre to provide quick and value-maximizing outcome for stressed MSMEs.

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nLMJ 06: 06: 2021 It is not conceivable that when a direction for purchase of shares is given by the Court under s. 402 and consequent reduction in share capital is to be effected the procedure, prescribed for reduction of share capital in ss. 100 to 104 should be required to be followed in order to make the direction effective.[SC]

nLW 39: 06: 2021 After approval of the Resolution Plan by the Adjudicating Authority, all such claims that are not part of the


From The Government P-117Other Highlights P-129

v NEWS FROM THE INSTITUTE

v MISCELLANEOUS CORNER

v GST CORNER

v ETHICS IN PROFESSION

v CG CORNER

v STARTUP INDIA

n Clarification on offsetting the excess CSR spent for FY 2019-20

n Clarification on spending of CSR funds for ‘creating health infrastructure for COVID care’, ‘establishment of medical oxygen generation and storage plants’ etc.

n Relaxation on levy of additional fees in filing of certain Forms under the Companies Act, 2013 and LLP Act 2008

n Relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013

n Gap between two board meetings under section 173 of the Companies Act, 2013 (CA-13) - Clarification

n Disclosure of the following only w.r.t schemes which are subscribed by the investor:a. risk-o-meter of the scheme and the

benchmark along with the performance disclosure of the scheme vis-à-vis benchmark and

b. Details of the portfolio

n Format of compliance report on Corporate Governance by Listed Entities

n Enhancement of overall limit for overseas investment by Alternative Investment Funds (AIFs)/Venture Capital Funds (VCFs)

n Relaxation from compliance to REITs and InvITs due to the COVID -19 virus pandemic

n Notification under the Bilateral Netting of Qualified Financial Contract Act, 2020

n Procedure for seeking prior approval for change in control of SEBI registered Portfolio Managers

n Business responsibility and sustainability reporting by listed entities

n Relaxation in timelines for compliance with regulatory requirements by Debenture Trustees due to the COVID-19 pandemic

Resolution Plan shall stand extinguished. [NCLAT]

nLW 40: 06: 2021 The impugned order of the High Court allowing the Respondent No. 1 to operate the account without making good the amount of Rs 32.50 lakhs to be placed in the account of the Corporate Debtor cannot be sustained.[SC]

nLW 41: 06: 2021 It is clear from the reading of the contract that the parties had intended to transfer business from appellant to respondent during the contractual period. This agreement was not meant as a lease or license for the respondent to conduct business. [SC]

nLW 42: 06: 2021 UPPTCL has no power and authority and or jurisdiction to realize labour cess under the Cess Act in respect of the first contract by withholding dues in respect of other contracts and/or invoking a performance guarantee.[SC]

nLW 43: 06: 2021 Sub-section (5) of section 80-IA cannot be pressed into service for reading a limitation of the deduction under sub-section (1) only to ‘business income’.[SC]

nLW 44: 06: 2021 Having examined the allegations and response of GNIDA thereon, for the reasons elaborated in the succeeding paras, the Commission is of the considered opinion that no interference is warranted in the matters.[CCI]

nLW 45: 06: 2021 The Commission is of the view that prima facie a case of contravention of the provisions of Section 3(4) and Section 4 of the Act is made out against Tata Motors, and the matter requires to be investigated. [CCI]


ARTICLES1

n COMPANY SECRETARIES ARE OUR NEW ECO-WARRIORSn SEBI AND SUSTAINABILITY REPORTING IN INDIA - EMBRACING THE FUTUREn ENVISIONING COMPANY SECRETARIES AS CHAMPIONS OF ENVIRONMENT PROTECTIONn EVOLUTION OF ENVIRONMENT PROTECTION LAWS IN INDIA AND CHALLENGES AHEAD n RIO CONFERENCE- A MILESTONE IN ENVIRONMENTAL PROTECTIONn ENVIRONMENT PROTECTION, REGULATORY FRAMEWORK AND ROLE OF COMPANY SECRETARIESn LANDMARK JUDGEMENTS OF NATIONAL GREEN TRIBUNAL (NGT): STRENGTHENING THE ENVIRONMENTAL PROTECTION

REGIME IN THE COUNTRYn ENVIRONMENTAL REGULATION - AWARENESS AND ACTIONn POSH AT WORKPLACE – ITS IMPACT AND INFLUENCE IN CORPORATESn EVOLUTION AND IMPACT OF THE PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE (POSH) ACT, 2013n POSH AT WORKPLACE – ITS IMPACT AND INFLUENCE IN CORPORATESn IMPORTANT LEARNINGS FROM THE JUDGMENT OF THE HON'BLE SUPREME COURT IN CIVIL NO. 440-441 OF 2020

[TATA CONSULTANCY SERVICES LIMITED (APPELLANTS) VERSUS CYRUS INVESTMENTS PVT. LTD AND ORS (RESPONDENTS)]n RISK MANAGEMENT AND THE RECENT AMENDMENTS IN THE SEBI LISTING REGULATIONSn CSR IN CONTEXT OF BHAGAVAD GITA!n TRANSFER PRICING AND ADVANCE PRICING AGREEMENTS IN INDIAn MOVING FROM HUMAN RESOURCE MANAGEMENT TO HUMAN ASSET MANAGEMENT: A KEY TO COMPETITIVE ADVANTAGEn “THE PRE-PACK” - NEW INSOLVENCY REGIME FOR MICRO, SMALL AND MEDIUM ENTERPRISES (MSMEs) INTRODUCED BY

GOVERNMENT


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INTRODUCTION

C ompany Secretaries are powerful influencers in their organisations. The rising cost of fiscal non-compliance has boardrooms attentively following their advice. This

habit makes boardrooms also listen carefully to CS advice on sustainability issues and environmental compliance also, much of it now mandated by legislation or court rulings. So, a CS is the new Eco-Warrior in many firms.

This article highlights the many areas where a CS can shape company policies. Many eco-friendly moves unexpectedly end up saving costs and improving profits as well as the environment. They also improve company morale, efficiency, productivity and even market value when achievements are communicated well, as Marico does.

How to begin?

Define your objectives and goals in the areas you want to tackle, like use of water, power, fuel, packaging, and reduction in waste, pollution and carbon footprint.

Measure current consumption levels of each of these per crore of sales value or tonnage of product. Benchmark the current levels and monitor progress.

Set Targets for incremental annual reduction in each area. No company begins by knowing exactly how it will achieve the targets, but merely defining a target at the Board level, for reduction or improvement, defines a goal and creates corporate commitment down the line, triggering creativity, kaizen and innovation to achieve it.

Company Secretaries are our New Eco-Warriors

Mrs. Almitra H. Patel, MS MIT USA Member, Supreme Court Committee for SWM. National Expert, Swachh Bharat [email protected]

This article highlights the important role that Company Secretaries can play in moving corporate policies towards sustainability goals. It describes how to define ecofriendly objectives, benchmark targets which are measured per crore of sales, set targets all down the line, reduce the company’s impact on the environment and then effectively communicate the outcomes for enhanced employee and shareholder satisfaction and brand building.

Reduce the use of water, power, fuel, water, packaging. Reducing waste, wastage and pollution yields tangible savings and an immediate addition to profits too.

Communicate the targets, reduction methods and results achieved up to the Board and down through all levels, as well as to shareholders. This builds company morale, team spirit and brand value.

1. BE WATER NEUTRALi. Collect your firms’ data on annual freshwater consumption

of factories or offices. Set small annual reduction targets. This will save money too.

ii. Spend CSR funds to progressively capture annual rainfall equal to your annual consumption, by desilting of local ponds or construction of tiny check-dams to store water all along dry or low-flow streams and tributaries. This helps with drought-proofing as well as flood-control. The excavated silt also improves farm fertility.

iii. Maximize reuse of wastewater from existing or new sewage treatment plants (STPs) and effluent treatment plants (ETPs).

iv. Keep different effluent streams separate for ease and economy of treatment. Handling diluted streams of mixed effluents and sewage is technically difficult and costly.

v. Immediately stop the abhorrent and criminal malpractice of drilling reverse borewells in the ground to pour in pollutants as a way to save treatment costs. This is a moral imperative.

ARTICLES PART - I


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LE2. AIM TO BE CARBON-NEUTRALi. Carbon neutrality is achieved by calculating

a carbon footprint and reducing it to near zero through a combination of efficiency measures in-house and supporting external emission reduction projects.

ii. Reduced power consumption is the easiest way. Instal movement sensors in toilets, conference rooms and wherever lights are not regularly switched off when leaving.

iii. Set air conditioner temperatures at a comfortable 25oC, not cooler. As much as 40% of Mumbai’s power consumption is just for ACs!

iv. Use energy efficient ACs, fans, refrigerators when buying or replacing them, and LED lighting.

v. Minimise CO2 emissions from avoidable air travel and long commuting. Work-from-home has taught us how. Move towards Electric Vehicles whenever the opportunity arises.

vi. Instal rooftop solar if space and sunlight permits, either with or without net-metering.

vii. CSR funds for solar pump sets, off-grid rural power, or a share of a solar farm. Aim to annually generate renewably as much power as you consume annually.

viii. Replace coal with biomass briquettes, fossil fuel with biofuels or ethanol-blended vehicular fuels. Minimise gen-set use. Consciously keeping carbn reduction in everyones consciousness will point to many small options that add up.

ix. When designing new buildings, demand natural lighting, cooling, or heating to build in power-saving features.

x. Encourage a re-look at power usage in manufacturing, transport, and distribution, and while purchasing items requiring power inputs.

3. MINIMIZE USE OF MATERIALSi. Set and monitor targets to consciously reduce the quantity

and weight of packaging.

ii. Set targets for recycled content in what you buy and what you sell, to save virgin material.

iii. Buy products in bulk or refills when possible. Use both sides of paper. Avoid using disposables. Have water-dispensers to refill water-bottles or glasses and avoid creating mountains of PET bottle waste. It all saves pennies too.

iv. Minimise construction remodeling that generates demolition waste. Reuse as much as possible. Publicise and celebrate all big and small improvements and successes.

4. MINIMISE WASTE

i. All post-producer waste saved is pure profit.

ii. Follow and enforce at every location the Solid Waste Mangement Rules 2016 obligation for every individual and firm to keep their biodegradable (Wet) waste free of plastics etc. to enable composting, and hand over all non-biodegradable (Dry) waste free of organics for efficient recycling. Deputy Commissioner Mr. Ramdas Kokare has made four towns almost zero-waste-to-landfill by strict enforcement of this rule. In Kalyan-Dombivli Municipal Corporation (pop 18 lakhs) this strictly segregated waste earns his city royalty on the clean dry waste collection contracted out.

iii. Minimise food waste through starting or supporting food banks for the homeless.

5. MINIMISE POLLUTION

i. Be proactive, in your own interest.

ii. Totally eliminate PVC from your ecosystem! It is 57% chlorine, generating deadly dioxins when burnt, because rexine, flex banners, vinyl standees etc. are non-recyclable and not permitted as alternate fuel in cement plants or incinerators. For this reason, NGT in its 2 Jan 2017 Order in OA199/2014 in Direction 18 required the MOEF and States to phase out the use of short-life PVC. Why wait?

iii. Phosphorus (P) in synthetic detergents promotes the growth of aquatic plants like algae and water-hyacinth that have choked all our urban and rural surface waters. The US and Canada, observing this in Lake Erie, has capped P at 2.2% since 1973 to protect surface waters and Europe soon followed suit. Our MOEF still has not. So only now has the NGT finally acted. Its 12 March 2021 Order in OA 125/2017 directed that The State PCB itself may lay down standards for phosphorus instead of waiting for notification. BIS has also issued a notification for limiting

Company Secretaries are powerful influencers in their organisations. The rising cost of fiscal non-compliance has boardrooms attentively following their advice. This habit makes boardrooms also listen carefully to CS advice on sustainability issues and environmental compliance also, much of it now mandated by legislation or court rulings. CS can shape company policies. Many eco-friendly moves unexpectedly end up saving costs and improving profits as well as the environment. They also improve company morale, efficiency, productivity and even market value when achievements are communicated well.



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LEP in household laundry detergent powders and bars. So, Company Secretaries should ensure compliance by their purchase departments in sourcing low-phosphorus detergents.

iv. The Solid Waste Management Rules 2016 in Rule 17 (3) says Manufacturers or brand owners, or marketing companies of sanitary napkins and diapers shall explore the possibility of using all recyclable materials in their products. So let purchase departments use their bulk purchase clout to demand fully compostable Sani pads and disposable diapers, even at slightly higher cost. Increasing collective demand will reduce the price difference over time.

v. Use your purchasing power for good. Opt for unbleached or only peroxide-bleached toilet paper and tissues (to avoid dioxin pollution during chlorine bleaching at paper mills), order liquid soaps free from microbe-killing Triclosan and herbal toilet cleaners free of microbe-killing phenyl/phenol and bleach (to allow the decomposing of human waste in septic tanks as intended) and save costs and pollution from emptying septic tanks of undigested human waste.

vi. Use compostable packaging for toxic products.

vii. Auction e-waste separately from other scrap for safe recycling by authorized agents. Pay them for the safe recycling of lamps, as throwing broken glass into mixed waste injures waste-workers, including your own.

viii. Replace hazardous PU Foam with Non-Isocyanate Polyurethane (NIPU) which is recyclable and does not entail huge haz-waste incineration costs.

ix. Demand bulk snack foods packed in recyclable packaging to minimize non-recyclable Multilayer Packaging (MLP) choking dumpsites and landfills. Avoid packing your own products in MLP and PVC films.

6. EPR EXTENDED PRODUCER RESPONSIBILITY

This is the single most important statutory responsibility of every manufacturer or marketer of products and clearly a Company Secretary’s duty to ensure compliance.

Follow and enforce at every location the Solid Waste Mangement Rules 2016 obligation for every individual and firm to keep their biodegradable (Wet) waste free of plastics etc. to enable composting, and hand over all non-biodegradable (Dry) waste free of organics for efficient recycling.

Product take-back for responsible recycling was mandated first in India for lead-acid batteries. In the Solid waste Management Rules 2016, see Rule 17 : Duty of manufacturers or brand owners of disposable products and sanitary napkins and diapers [to] provide necessary financial assistance to local authorities for establishment of waste management system.

Rule 17 (2) : All such brand owners who sell or market their products in such packaging which are non-biodegradable shall put in place a system to collect back the packaging waste generated due to their production.

Sadly, very few firms follow this rule or do more than token collection to state half-truths in their balance sheets. Today, more than ever, it is in the interest of the health and safety of every member of society, every loved member of a family, to minimize disease caused by mounting waste. Please do your bit.

In the Plastic Waste Management Rules 2016, Rule 9: Responsibility of Producers, Importers and Brand Owners, [they] shall work out modalities for waste collection system based on Extended Producer Responsibility and involving State Urban Development Departments, either individually or collectively, through their own distribution channel or through the local body concerned.

EPR does not mean that a firm should collect back only its own packaging waste which is often hard to sort out from mixed packaging waste. It is really important to follow the spirit of these two Rules. You know how much packaging material you purchase, and which ends up on the street. Set incremental targets to physically or financially support the take-back or management or recycling of an equivalent weight or value of municipal waste. Doing this in every sales region, and being seen to behave responsibly, will earn great goodwill for your firm and brand.

And bring tremendous personal satisfaction for you as a Company Secretary who is making a difference. CS



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SEBI and Sustainability Reporting in India - Embracing the Future

Pradeep Ramakrishnan*, FCS General ManagerSecurities and Exchange Board of [email protected]

Surabhi Gupta*General ManagerSecurities and Exchange Board of [email protected]

Ishita Sharma* AGMSecurities and Exchange Board of [email protected]

“The biggest trends in sustainability today are science-based targets for greenhouse gases and water, designing and propelling a circular economy and greater transparency into company operations, as driven by customers and ESG investors. All three of these trends will be impactful, but the circular economy may have the greatest potential for positive impact as it will shift paradigms of production and consumption. Creating a widespread circular economy may also be the most challenging of these goals as it requires enormous changes in attitudes and behaviors.”

- Bruce Klafter, Vice President, Corporate Social & Environmental Responsibility, Flex Ltd.

INTRODUCTION

T he principles of sustainability are made up of 3 key pillars - social, environmental and social; more commonly known as people, planet and profit. Sustainability

reporting is a tool to increase transparency and accountability in the issues that traditional financial reporting is not dealing with. It primarily focuses on the organization's environmental and social performance along-with its impact on various sustainability issues. Sustainability reporting involves assessment and reporting of material risks and opportunities arising out of environmental and social factors. Such increased transparency on risks and opportunities leads to better decision making, which helps build and maintain trust of the investors and stakeholders in such businesses and improves the reputation of the organization.

I. GENESIS OF SUSTAINABILITY REPORTING FOR LISTED ENTITIES IN INDIA Non-financial, sustainability reporting provides an opportunity to businesses to communicate in an open and transparent way with stakeholders. SEBI was one of the early adopters of sustainability reporting for listed entities amongst global peers. The filing of the Business Responsibility Report (BRR) containing ESG (Environment, Social and Governance) disclosures was first introduced for the top 100 listed entities (by market capitalization) in 20121 through the listing

*The views expressed are the personal views of the authors

agreement as per the disclosure requirement emanating from the ‘National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business’ (NVGs) which were issued by the Ministry of Corporate Affairs (MCA) in 2011. These guidelines contained nine comprehensive principles to be adopted by companies as part of their business practices and a structured business responsibility reporting format requiring certain specified disclosures, demonstrating the steps taken by companies to implement the said principles. The requirement for filing the BRR was progressively extended to the top 500 listed entities from the FY 2015 – 162 and to the top 1000 listed entities from the FY 2019 – 2020.

II. FROM NVGs TO THE NGRBCs

In December 2018, the National Guidelines on Responsible Business Conduct, 2018 (NGRBCs)3, which were an improvement over the NVGs were issued as a means of nudging businesses to contribute towards wider development goals. The NGRBCs were issued to keep pace with the global developments, such as the adoption of the Paris Agreement on Climate Change4 & the United Nations Guiding Principles on Business and Human Rights (UNGPs) and the commitment of nations to achieve the UN Sustainable Development Goals (SDGs).

1https://www.sebi.gov.in/legal/circulars/aug-2012/business-responsibility-reports_23245.html

2https://www.sebi.gov.in/legal/circulars/nov-2015/format-for-business-responsibility-report-brr-_30954.html3https://www.mca.gov.in/Ministry/pdf/NationalGuildeline_15032019.pdf4https://climateactiontracker.org/countries/india/pledges-and-targets/


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LEThe NGRBCs urge businesses to conduct business responsibly and sustainably and also encourage and support their value chain partners to follow the same principle. Like the NVGs, the NGRBCs are articulated as a set of nine principles accompanied with attendant core elements. The NGRBCs enunciate the thrust of the SDGs and yet remain true and specific to the Indian context.Accordingly, to finalize the Business Responsibility Reporting (BRR) formats for listed and unlisted companies under the NGRBCs, the Committee on Business Responsibility was constituted in 2019 comprising of SEBI, MCA, and other professional institutes. Deliberations with NITI Aayog, sustainability heads of large businesses, and, representatives from the MSME sector contributed to the process. The Committee examined the NGRBC-BRR framework within the broader context of UNGPs, SDGs, and released its report in August 20205.

III. DRIVERS FOR A REVISED SUSTAINABILITY REPORTING FRAMEWORK - TOWARDS THE BRSRThere are two main driving forces seeking greater accountability for the social and environmental impacts of companies through disclosures - stakeholder groups including investors and Governments / regulators.Increase in sustainable investing

In recent years, investors have been increasingly factoring the environmental and social footprint of companies in their investment decisions. This stems from a growing awareness that sustainability issues can put the performance of companies at risk. Blackrock, one of the world’s largest asset managers with an AUM of over 7 trillion dollars, while pushing for high quality and consistent sustainability disclosures from companies has stated that climate risk is investment risk and climate transition presents a historic investment opportunity. Globally, investors are increasingly disposed to vote against management and board directors when companies are not making sufficient progress on sustainability-related disclosures and the business practices and plans underlying them. In fact, the Institutional Investor Survey 2021 from Morrow Sodali, a leading strategic service provider, reveals that institutional investors with assets under management of USD 29 trillion unanimously confirm that climate change and ESG (Environmental, Social and Governance) risks

and opportunities played an increasingly important role in their investment decisions and their evaluation of portfolio companies.6

“……. underscores how the focus on ESG continues to intensify. The institutions surveyed see a clear link between ESG performance and good financial performance, and they want companies to improve their engagement and reporting on these topics”

- From the Institutional Investor Survey 2021 from Morrow Sodali

The increased focus on ESG performance of companies is reflected in the increase in total assets and inflows in sustainable funds. The COVID pandemic has also accelerated the shift to sustainable investing. Worldwide, the total assets in sustainability funds have increased from USD 550 billion at the beginning of 2018 to USD 1,652 billion at the end of December 2020, an increase of 200% in the past 3 years (equating to a CAGR of 44%). While funds in India contribute only around 0.08% of the global assets in sustainable funds, it is interesting to note that out of the 9 ESG themed funds in India, 7 were launched after January 2020. In fact, in the last quarter of 2020, ESG fund assets in India doubled from the previous quarter to USD 1.3 billion7.

Do companies with better ESG profiles outperform others?There is also data and evidence that supports that over the long term, purposeful, sustainable and socially responsible companies with better ESG profiles outperform their peers. A study done by Morningstar8 of nearly 4900 funds domiciled in Europe including 745 sustainable open-ended

The NGRBCs were issued to keep pace with the global developments, such as the adoption of the Paris Agreement on Climate Change & the United Nations Guiding Principles on Business and Human Rights (UNGPs) and the commitment of nations to achieve the UN Sustainable Development Goals (SDGs).

6https://morrowsodali.com/news-events/articles/climate-change-tops-the-agenda-for-institutional-investors-in-20217 https://www.morningstar.com/lp/global-esg-flows9https://www.morningstar.in/posts/58587/esg-stocks-outperform-wider-market.aspx

5 https://ies.gov.in/pdfs/Report-Committee-BRR.pdf



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LEfunds and ETFs found no performance trade-off associated with sustainable funds. Further, over the 10 years through 2019, nearly 59% of surviving sustainable funds across the categories have beaten their average surviving traditional counterpart.

There are also other studies available on the relationship between ESG and returns.9 The above chart is one of those. As back as 2017, Deutsche Bank performed an analysis of more than 2,000 empirical studies dating back to the 1970s and found that about 90% of the studies suggested that ESG investing provides superior returns to passive investing.10 In 2018, a study from Axioma showed that “a majority of portfolios weighted in favour of companies with better ESG scores outperformed their benchmarks by between 81 and 243 basis points in the four years to March 2018.11

From shareholder to stakeholder primacy

The philosophy of responsible business is based on the principle of business being accountable to all its stakeholders, who are increasingly seeking businesses to be responsible and sustainable towards their environment and society. Business leaders have been compelled, and have also found it to be in their interest, to reimagine the role of businesses in the society and not view them merely as economic units for generating wealth. In August 2019, 181 CEOs signed the Statement on Purpose of a Corporation at the Business Roundtable declaration in US, committing to lead their companies for the benefit of all stakeholders – customers, employees, suppliers, communities and shareholders.

It is thus being recognized that an excessive focus on profits to the neglect of communities, nature and environment can be self-defeating in the long run. This has also been reinforced by the COVID pandemic. The performance of a company must be measured not only on the return to shareholders, but also on how it achieves its environmental, social, and good governance objectives. Companies looking to be seen as highly valued are now keen to demonstrate their ESG performance. Consistent and comprehensive reporting is useful to companies to better demonstrate their sustainability objectives, position and performance resulting into long term value creation. Regulatory endeavourRegulators around the world are also increasingly requiring ESG disclosures, on a mandatory basis. The UK and

New Zealand have announced their intention to introduce mandatory climate related disclosures based and the TCFD framework. The European Union has also adopted a proposal to introduce more detailed reporting requirements based on the development of EU sustainability reporting standards. The USA Securities and Exchange Commission has recently announced its intention to enhance its focus on climate-related disclosures.

Amongst Asian jurisdictions,

� Hong Kong has mandated disclosures on board statement and significant climate issues that impact the issuer, while Key Performance Indicators (KPIs) can be disclosed on ‘comply or explain’ basis;

� Taiwan has mandated sustainability disclosures for companies above a certain threshold of paid-up capital and

� Singapore has also introduced sustainability reporting on a ‘comply or explain’ basis since June 2016.

While India had mandatory ESG reporting since 2012, the reporting framework needed to be reviewed, especially in view of the global developments and the introduction of the NGRBCs, which had replaced the NVGs. It was also observed that there is a multiplicity of sustainability reporting standards and frameworks, such as the SASB (Sustainability Accounting Standards Board), TCFD (Task Force on Climate Related Financial Disclosures), CDSB (Climate Disclosure Standards Board), GRI (Global Reporting Initiative) and IIRC (International Integrated Reporting Council) etc. and the lack of a single, comprehensive framework made comparison on ESG issues challenging for investors and other stakeholders.

IV. KEY FEATURES OF THE BRSR

“The first rule of sustainability is to align with natural forces, or at least try not to defy them.”

- Paul Hawken, American Environmentalist

The performance of a company must be measured not only on the return to shareholders, but also on how it achieves its environmental, social, and good governance objectives. Companies looking to be seen as highly valued are now keen to demonstrate their ESG performance. Consistent and comprehensive reporting is useful to companies to better demonstrate their sustainability objectives, position and performance resulting into long term value creation.

9 https://sealawards.com/esg-investing-returns/ - Sustainability, Environment, Achievement an Leadership Awards10https://www.forbes.com/sites/moneyshow/2017/08/16/socially-responsible-investing-earn-better-returns-from-good-companies/#59351886623d11 https://www.ft.com/content/f99b0399-ee67-3497-98ff-eed4b04cfde5



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LEPursuant to an extensive stakeholder consultation12 and a benchmarking exercise with internationally accepted disclosure frameworks, SEBI vide Circular dated May 10, 202113 introduced the new sustainability related reporting requirements. The new report is called the Business Responsibility and Sustainability Report (BRSR) and it shall replace the existing Business Responsibility Reporting (BRR). While the BRR format largely sought qualitative information, the BRSR lays considerable emphasis on measurable, quantifiable and standardized disclosures on ESG parameters to enable comparability across companies, sectors and time.

The BRSR seeks disclosures from listed entities on their performance against nine principles of the NGBRCs. Further, reporting under each principle is divided into essential and leadership indicators. The essential indicators are required to be reported on a mandatory basis while the reporting of leadership indicators is on a voluntary basis. However, listed entities should encourage to report on the leadership indicators also. The BRSR is accompanied with a guidance note to enable the companies to interpret the scope of disclosures.Some of the key disclosures sought in the BRSR are given below:

1. Disclosure of sustainability related risks and opportunities

The BRSR seeks disclosure of entity’s material environment and social related risks and opportunities, rationale for identifying the same and approach to mitigate or adapt to the risks along-with financial implications of such risks and opportunities.This information is critical for understanding the resilience of a company’s business. International disclosure standards such as the TCFD and GRI also recommend disclosure of information on climate related risks and opportunities. As per the recommendations of TCFD, climate related risks can include risks related to transitioning to a low carbon economy, such as regulatory risk, technology risk etc. as well as risks related to the physical impact of climate change. On the other hand, limits on greenhouse gas (GHG) emissions can also create opportunities for organizations as new technologies and markets are created. This is especially the case for organizations that can use or produce energy and energy-efficient products more effectively.

2. Disclosure of sustainability related goals / targets and performance

The BRSR not only captures the current performance of the reporting entity on sustainability related parameters, but also seeks to capture how the entity views and prioritizes sustainability including its goals & targets and performance against the same.

Towards this end, the BRSR also seeks a statement by the director responsible for the BRSR on ESG related issues highlighting the vision and strategy for managing the significant

environmental, and social impacts of the organization and outlook on the organization’s main challenges and targets. This statement will also enable investors to view the company from the lens of the management.

3. Environment related parameters

Treat the earth well: it was not given to you by your parents, it was loaned to you by your children. We do not inherit the Earth from our Ancestors, we borrow it from our Children.

— Ancient Indian Proverb

a. Globally, investors are of the opinion that ESG risks and opportunities play a greater role when investing and engaging with companies, climate change being at the top of their ESG agenda.14

b. Recognising the importance of climate change and related aspects and keeping in mind the factors affecting it the BRSR seeks granular details of performance of the entity on environment related parameters in quantifiable and measurable terms. For instance, the essential indicators include disclosures on:

i. Resource usage: Energy consumption, water withdrawal and consumption;

ii. Air emissions: Scope 1, Scope 2 Green-house gases (GHG) and air pollutant emissions;

iii. Waste management: Quantum of hazardous and non-hazardous waste generated, re-used and recycled along-with waste management practices;

iv. Compliance with Extended Producer Responsibility (EPR) plan submitted to Pollution Control Boards

c. Further, leadership indicators include disclosures on:

i. Energy consumption mix through renewable & non-renewable sources, water discharge

ii. Water withdrawal, consumption and discharge in areas of water stress

iii. Scope 3 GHG emissions

iv. Reclaimed products (as % of products sold)

v. Impact on bio-diversity

4. Social related parameters

a. Employees / workers related i. It is often said that people are a company’s greatest

asset, thus employee welfare information is a key component of ‘social’ disclosures. While the BRR sought information on number of employees, training on safety & skill upgradation and number of complaints relating to child labour, forced labour, involuntary labour and sexual harassment; the BRSR additionally seeks information on new parameters, including:

� Employee and worker turnover rates, by gender

� Welfare measures for permanent and other

12https://www.sebi.gov.in/legal/circulars/may-2021/business-responsibility-and-sustainability-reporting-by-listed-entities_50096.html13https://www.sebi.gov.in/reports-and-statistics/reports/aug-2020/consultation-paper-on-the-format-for-business-responsibility-and-sustainability-reporting _47345.html 14 https://corpgov.law.harvard.edu/2020/03/25/institutional-investor-survey-2020/



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LEthan permanent (i.e. contractual / casual / temporary) employees and workers, such as health insurance, accident insurance, maternity / paternity benefits, day care facilities etc.

� Accessibility of workplaces in terms of the Rights of Persons with Disabilities Act, 2016

� Median wages paid to each category – Board, KMPs, other employees and workers

� Occupational health and safety management systems adopted by the entity

� Safety related incidents at the work-place

ii. The BRSR has also strengthened the disclosures on the value chain of listed entities. For instance, information has been sought on the assessment of value chain partners for: health & safety practices, working conditions, child labour, forced labour, discrimination at workplace, environmental impact etc. and corrective action taken from any risk / concern arising from such assessment.

b. Community related

To enable companies to demonstrate the action taken for the welfare of the society, the BRSR seeks granular disclosures on:

Essential indicators

i. Social Impact Assessments (SIA) of projects,

ii. Information on projects where Rehabilitation and Resettlement is being undertaken including districts, no. of project affected families and amount paid to them,

Leadership indicators

i. Corporate Social Responsibility (CSR) projects undertaken in districts designated as ‘aspirational districts’ along-with amount spent thereof

ii. Beneficiaries of CSR projects including number and percentage belonging to vulnerable and marginalized groups

iii. Benefits derived and shared from the intellectual properties owned or acquired, on the basis of traditional knowledge

c. Consumer related

The basic aim of a business entity is to provide goods and services to its consumers that are safe to use, and in a manner that recognizes the freedom of choice of customers.

The BRSR thus includes disclosures on products carrying information on safe & responsible usage, number of consumer complaints on unfair trade practices, advertising, etc., product recalls due to safety issues, cyber security and risks related to data privacy, amongothers.

5. Engagement with stakeholders

In addition to information on internal & external stakeholders identified by entities and the process for identification, the BRSR additionally seeks disclosure on how the feedback from stakeholder consultation is provided to the Board and used to support the identification and management of environmental, and social topics.

This disclosure will be useful for companies to demonstrate the outcomes of stakeholder engagement.

V. A BRIEF COMPARISONThe table below shows gives the salient differences between the BRR and the BRSR, for ease of comparison:

Table: Comparison between BRR and BRSR

S. No. Type of disclosure BRR Disclosures introduced in the BRSR

1. Forward looking perspective

No specific requirement • Director’s statement highlighting ESG related challenges, targets and achievements

• Disclosure of any goals or targets set by the entity along-with timeline and performance against those targets

2. Environment and social risks and opportunities

Does the company identify and assess potential environmental risks?

Entity’s material environment and social related risks and opportunities, rationale for identifying the same and approach to mitigate or adapt to the risks along-with financial implications.



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LE Metrics and Targets3. Environment related � Strategies / initiatives

undertaken to address issues of climate change

� Mechanism adopted by entities for recycling products and waste

� Compliance with environmental laws


� Resource usage: Energy consumption, water withdrawal and consumption

� Air emissions: Scope 1, Scope 2 Green-house gases (GHG) and air pollutant emissions

� Waste management: Quantum of hazardous and non-hazardous waste generated, re-used and recycled along-with waste management practices

� Compliance with Extended Producer Responsibility (EPR) plan submitted to Pollution Control Boards

� Performance-Achieve-Trade (PAT) Scheme of the Bureau of Energy Efficiency


� Energy consumption mix through renewable & non-renewable sources, water discharge

� Water withdrawal, consumption and discharge in areas of water stress

� Scope 3 GHG emissions � Recycled or reused input material to total material used� Reclaimed products (as % of products sold) � Impact on bio-diversity

4. Social related a. Employees � Work-force

� Diversity

� Safety & skill up-gradation training to employees

� Percentage of employees that are part of a recognized employee association

� Complaints on child labour / forced labour / involuntary labour / sexual harassment and discriminatory employment

� Employee and worker turnover rates, by gender� Welfare measures for permanent and other than

permanent (i.e. contractual / casual / temporary) employees and workers

� Accessibility of workplaces in terms of the Rights of Persons with Disabilities Act, 2016

� Median wages paid to each category – Board, KMPs, other employees and workers

� Occupational health and safety management systems adopted by the entity

� Safety related incidents at the work-place along-with data on rehabilitation of affected employees / workers

� Performance and career development reviews� Return to work and Retention rates of employees /

workers b. Community � Information on projects

undertaken for community development, amount spent thereof and impact

� Procurement of goods and services from local & small producers

Essential indicators� Social Impact Assessments (SIA) of projects� Information on projects where Rehabilitation and

Resettlement is being undertaken including districts, no. of project affected families and amount paid to them

� Input material sourced from MSME / small producers and from local districts


� Corporate Social Responsibility (CSR) projects undertaken in districts designated as ‘aspirational districts’ along-with amount spent thereof

� Beneficiaries of CSR projects including number and percentage belonging to vulnerable and marginalized groups

� Benefits derived and shared from the intellectual properties owned or acquired, on the basis of traditional knowledge



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c. Consumer � Pending consumer complaints

� Information on product labels

� Cases on unfair trade practices, irresponsible advertising and/or anti-competitive behaviour

� Consumer survey/ consumer satisfaction trends


� Product recalls due to safety issues, � Cyber security and risks related to data privacy� Mechanisms in place to receive and respond to

consumer complaints and feedbackLeadership indicators

� Steps taken to inform and educate consumers about safe and responsible usage of products and/or services

� Information relating to data breaches:

a. Number of instances of data breaches along-with impact

b. Percentage of data breaches involving personally identifiable information of customers

d. Human Rights Policy of the company on human rights cover only the company or extend to the Group/Joint Ventures/ Suppliers / Contractors/ NGOs/ Others

� Training on human rights issues and policy(ies) of the entity

� Mechanisms in place to redress grievances related to human rights issues

� Assessments undertaken on human rights issues and corrective measures thereof

5. Governance related � Whether the policy relating to ethics, bribery & corruption cover only the company or extends to value chain partners

� Membership of trade and chamber or association

� Public policy positions advocated by the entity

� Stakeholder mapping

� Brief details of anti-corruption or anti-bribery policy

� Action taken for charges of bribery or corruption

� Fines/ penalties / action taken by regulatory authorities on any of the principles along-with corrective action taken thereon

� Complaints received in relation to conflict of interest of directors and KMPs

� How feedback from stakeholder consultation is provided to the Board and used to support the identification and management of environmental, and social topics

VI. THE ROAD AHEAD“The greatest threat to our planet is the belief that someone else will save it.” - Robert Swan (British), the first man to walk to both the North and South Poles

During the past few years there has been a gradual shift of by companies to include more than just financial performance data. Environmental, Social and Governance (ESG) analysis, sustainability data, disclosures regarding risks and opportunities are being increasingly reported. There is, therefore, a need for a more comprehensive framework of reporting which can bring in standardization in reporting.

The BRSR is a significant improvement over the existing BRR and a noteworthy step towards bringing sustainability reporting at par with financial reporting. The BRSR is presently applicable to the top 1000 listed entities (by market capitalization). In order to give time to companies to adapt

to the new requirements, the reporting of BRSR is voluntary for FY 2021 – 22 and mandatory from FY 2022 – 23. However, companies are encouraged to be early adopters of the BRSR, thus being at the forefront of sustainability reporting. Going forward, as companies adapt to the new reporting requirements, some issues for consideration will be the need for having sector-specific disclosures and considering assurance requirements for ensuring the quality of sustainability reporting.

As we seek to move forward from the economic pain and inequality caused by the COVID-19 pandemic, we face a great challenge ahead where companies will need to embrace a form of capitalism that recognizes and serves all their stakeholders. The companies that embrace this challenge – that seek to build long-term value for their stakeholders – will help deliver long-term returns to shareholders and build a brighter and more prosperous future for the world. CS



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INTRODUCTION

T he more challenges we face, the wiser we become. During this pandemic, people have come to terms with the fact that individual well-being, both physical as well

as economic, depends on societal well-being. Perhaps, with this awakening and wisdom, it would be apt to address the next inevitable challenge awaiting us – climate change. World over, there has been a lot of activism in this respect, urging governments and individuals to take action to counter climate change and its ill effects. The consequences of inaction are varied and far-ranging: temperature increase, rising sea levels due to melting polar ice caps, uneven precipitation patterns, increase in risk of catastrophes like floods and droughts, increasing threat to biodiversity, increased exposure to particulates in air, and of course, the resultant economic losses1. Under this situation, it is important that corporates reduce their carbon footprint and move towards sustainable ways of doing business. Company Secretaries, as governance professionals, are aptly positioned to drive this transformation, not only by ensuring compliance with environmental legislation but also by encouraging boards to include sustainable development goals in their governance policies and business processes.

BACKGROUNDThe English Poet Samuel Taylor Coleridge famously wrote “Water, water, everywhere, nor any drop to drink”; although this was written in the context of the plight of seafarers, this

Envisioning Company Secretaries as Champions of Environment Protection

Climate change may make the planet uninhabitable in the not-so-distant future unless we act with urgency to counter the effects of global warming and protect our environment. In this article we delve into how the environmental laws seek to protect the environment and prevent abuse of natural resources, the provisions under corporate laws relevant to the subject, and an introduction to the framework for ESG reporting in India. Company Secretaries should not only enable ease of doing business, but should metamorphose into governance professionals promoting sustainable ways of doing business

Usha Ganapathy Subramanian, ACSPractising Company [email protected]

phrase best describes the dire consequences of climate change. In this context, the citizens who dutifully pay their taxes look to the government of the day to drive the response of the State and the society at large to protect the environment from further deterioration or damage.

The duty of State to protect environment is enshrined in the Constitution of India under Part IV - Directive Principles of State Policy under Article 48A, which provides that the State shall endeavour to protect and improve the environment and to safeguard forests and wild life of the country. The evolution of environmental legislation in our country has been taking place in response to environmental disasters, in furtherance of the commitment under international accords and agreements, and to keep up with societal and business transformation. In this article, the major provisions under some of the environmental laws are discussed.

THE WATER (PREVENTION AND CONTROL OF POLLUTION) ACT, 1974

The Water (Prevention and Control of Pollution) Act, 1974, as stated in its long title, provides for prevention and control of water pollution, the maintaining or restoring of wholesomeness of water and for the establishment of Boards for the aforesaid purposes.

� Sections 3 and 4 provide for the establishment of Central Pollution Control Board and State Pollution Control Boards respectively. The State Boards are vested with various powers under the Act. They can require any person in charge of any establishment where any industry, operation or process, or treatment and disposal system is carried on, to furnish required information. The Boards can take samples of water for analysis, and have powers of entry, inspection, search and seizure. They are empowered to take emergency measures in case of pollution of any stream, well or land. They can also issue directions to any person, officer or authority including closure of industry, stoppage of supply of electricity, etc.

� Section 24 lays down prohibition on knowingly causing or permitting any poisonous, noxious or polluting matter determined in accordance with such standards as may be laid down by the State Board to enter, directly or indirectly, into any stream or well or sewer or on land; or knowingly causing or permitting to enter into any stream any other matter which may impede the proper flow of water, which may lead to aggravation of pollution.

1 The Organisation for Economic Co-operation and Development, Climate change: Consequences of inaction https://www.oecd.org/environment/climate-change-consequences-of-inaction.htm


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� As per section 25, previous consent of the State Board is required for establishing or even taking steps to establish any industry, operation or process, or any treatment and disposal system or any extension or addition thereto, which is likely to discharge sewage or trade effluent into a stream or well or sewer or on land; or for bringing into use any new or altered outlet for the discharge of sewage; or for beginning to make any new discharge of sewage.

� Under section 31 of the Act, intimation should be given forthwith to the State Board and other authorities by the person in charge if any poisonous, noxious or polluting matter is being discharged, or is likely to be discharged into a stream or well or sewer or on land due to accident or other unforeseen act or event.

THE AIR (PREVENTION AND CONTROL OF POLLUTION) ACT, 1981

The Air (Prevention and Control of Pollution) Act, 1981, provides for prevention, control and abatement of air pollution. The Preamble to the Act explains that this Act has been enacted to implement the decisions which were taken at the United Nations Conference on the Human Environment held at Stockholm in June, 1972 in respect of preservation of quality of air and control of air pollution. This Act empowers the Central and State Pollution Control Boards established under the Water (Prevention and Control of Pollution) Act, 1974 to implement the various provisions under this Act too.

� Under section 19, the State Government is empowered to declare by notification air pollution control areas in consultation with the State Pollution Control Board. In such areas, the State Government in consultation with the State Board may prohibit by notification the use of fuels other than approved fuels, appliance other than approved appliance, and burning of materials other than fuels.

� Section 21 of the Act prohibits any person from establishing or operating any industrial plant in an air pollution control area without obtaining the previous consent of the State Board. The section also mandates every person to whom the said consent has been given to further comply with conditions like installation and operation of control

equipment in good running condition, erection of chimney, wherever necessary, and other conditions specified by the State Board.

� Under section 22 of the Act, no person operating any industrial plant, in any air pollution control area shall discharge or cause or permit to be discharged the emission of any air pollutant in excess of the standards laid down by the State Board.

� Section 23 contains a parallel provision similar to section 31 of the Water (Prevention & Control of Pollution) Act, 1974 in respect of furnishing of information relating to the emission of any air pollutant into the atmosphere in excess of the standards laid down by the State Board occurs or is apprehended to occur in any area.

THE ENVIRONMENT (PROTECTION) ACT, 1986

In the wake of the Bhopal Gas Tragedy in 1984, which was a jolt to the machinery of environment protection in the country, a major revisit of environmental laws was required. The Environment (Protection) Act, 1986 was passed to strengthen the enforcement of environment protection measures. As stated in the preamble to the Environment (Protection) Act, 1986, the Act was enacted to implement the decisions in respect of environment and prevention of hazards, which were taken at the United Nations Conference on the Human Environment held at Stockholm in June, 1972. The Act, which is an umbrella legislation in respect of environment protection, empowers Central Government to take measures for the protection of environment, including but not limited to, co-ordination of actions by State Governments, laying down standards for quality of the environment, laying down standards for emission or discharge of environmental pollutants, restriction on areas where industrial operations shall not be carried on, procedures for handling of hazardous substances and inspection of premises.

� Section 7 prohibits discharge or emission of environmental pollutants by any person carrying on any industry, operation or process in excess of prescribed standards.

� Section 8 prohibits handling of hazardous substances except in accordance with the procedures prescribed.

� Section 9 mandates furnishing of information to authorities in case of discharge of environmental pollutants in excess of prescribed limits or whenever it is apprehended that such discharge may occur due to any accident. The person responsible for such discharge and the person in charge of such place shall take all steps to mitigate or prevent environmental pollution as a result of such discharge, and forthwith intimate the fact of such occurrence and render all assistance to the authorities in this regard.

� Various rules have been issued in exercise of the powers under the Act – including Environment (Protection) Rules, 1986, Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2008, Manufacture, Use, Import, Export and Storage of Hazardous Micro-organisms, Genetically/Engineered Organisms or Cells Rules, 1989, etc.

It is important that corporates reduce their carbon footprint and move towards sustainable ways of doing business. Company Secretaries, as governance professionals, are aptly positioned to drive this transformation, not only by ensuring compliance with environmental legislation but also by encouraging boards to include sustainable development goals in their governance policies and business processes.



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� Rule 5 of the Environment (Protection) Rules, 1986 provides for prohibitions and restrictions on the location of industries in various areas and the carrying on of processes in different areas. In pursuance of this rule, Environmental Impact Assessment (EIA) Notification, 2006 was notified requiring prior environmental clearance from the Central Government or as the case may be, by the State Level Environment Impact Assessment Authority for the activities specified in the Schedule to the Notification. This requirement is in respect of all new projects, for expansion and modernization of existing projects, and for changes in product mix.

� The industries mentioned in Schedule to the EIA Notification, inter alia, include: mining, nuclear power, chemical fertilizers, pesticides, petrochemicals, waste management facilities, etc. All projects are categorized into A and B categories depending on specified threshold criteria. Those projects falling under Category A are required to obtain clearance from the Ministry of Environment, Forest and Climate Change, Central Government and those falling under Category B, from the State Environment Impact Assessment Authority (SEIAA).

� Further, for the purpose of post-environmental clearance monitoring, half-yearly compliance reports are required to be submitted in respect of the prior environmental clearance terms and conditions on 1st June and 1st December every year. Such compliance reports shall be public documents.

� Rule 14 of the Environment (Protection) Rules, 1986 requires every person carrying on an industry, operation or process requiring consent from the Pollution Control Boards to submit environmental statement for every financial year ending on 31st March, in Form V to the concerned Board on or before 30th September.

THE PUBLIC LIABILITY INSURANCE ACT, 1991

The long title of the Public Liability Insurance Act, 1991 mentions that the Act provides for public liability insurance for the purpose of providing immediate relief to the persons affected by accident occurring while handling any hazardous substance.

� Section 3 of the Act provides that in case of death or injury or damage to property resulting from an accident, the owner shall be liable to give relief.

� As per section 4, every owner shall take out, before he starts handling any hazardous substance, one or more insurance policies providing for contracts of insurance whereby he is insured against liability to give the aforesaid relief.

THE NATIONAL GREEN TRIBUNAL ACT, 2010The National Green Tribunal Act, 2010 was passed for establishment of a National Green Tribunal for the effective and expeditious disposal of cases relating to environmental protection and conservation of forests and other natural resources. The preamble to the said Act mentions that the Act is passed to implement the decisions taken at the United Nations Conference on Environment and Development held at Rio de Janeiro in June, 1992 calling upon the nations to provide effective access to judicial and administrative proceedings, including provision of remedy for victims of pollution and environmental damage. As per the Act, the Tribunal has jurisdiction over all civil cases where a substantial question relating to environment is involved and such question arises out of the implementation of the enactments specified in Schedule I to the Act, which includes the Water (Prevention and Control of Pollution) Act, 1974, the Air (Prevention and Control of Pollution) Act, 1981, the Environment (Protection) Act, 1986, the Public Liability Insurance Act, 1991, etc. The heads under which compensation can be claimed include death, disability, loss of wages due to disability, medical expenses for treatment of injuries, damages to private property and other matters given in Schedule II to the Act.

PROVISIONS IN CORPORATE LAWSWhile the environmental laws themselves are armed with penal provisions for contravention, corporate laws especially Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 also contain provisions that drive compliance with environmental laws and further the cause of environmental conservation.

COMPANIES ACT, 2013Board’s Report

The Board’s Report is a comprehensive set of disclosures mandated under Section 134 of the Companies Act, 2013 to be given by the boards of directors to the members annually. The Directors’ Responsibility Statement, one of the components of the Board’s Report, includes a statement that the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Hence, it is imperative that all companies design, implement and monitor a system of processes to ensure that all applicable laws, including environmental laws, are complied with.

The Board’s Report also requires disclosure in respect of conservation of energy. Disclosure is required on steps taken or impact on conservation of energy, steps taken for utilizing alternative sources of energy and capital investment on energy conservation equipment. This disclosure can possibly open up discussion on environmental aspects during general meetings.



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LEAs per Section 204 of the Act, Secretarial Audit Report in Form MR-3 given by a Company Secretary in Practice shall be annexed with the Board’s Report for certain classes of companies – listed companies, public companies having paid-up capital of Rs. 50 crores or more or having turnover of Rs. 250 crores or more, and companies having outstanding loans or borrowings from banks and public financial institutions of Rs. 100 crores or more. The Secretarial Auditor is required to report on the compliance with laws applicable to the company (including relevant environmental laws) while reviewing the Compliance Management System of the Company. Section 134 further provides that in case of any qualification, reservation, disclaimer or adverse remark in the Secretarial Audit Report, the Board’s Report must carry the explanations or comments by the Board in response thereto. These provisions ensure that the boards remain responsible for compliance with all applicable laws, including environmental laws.

DUTIES OF DIRECTORS AND COMPANY SECRETARY

Section 166 of the Act directly lays responsibility on the directors for environmental preservation by providing that a director of a company shall act in good faith in order to promote the objects of the company for the benefit of its members as a whole, and in the best interests of the company, its employees, the shareholders, the community and for the protection of environment. Further, Section 205 of the Act, which describes the functions of Company Secretary, provides that the Company Secretary shall report to the Board about compliance with all laws applicable to the company.

CORPORATE SOCIAL RESPONSIBILITY

Section 135 of the Act read with the rules thereunder, mandates compliance with Corporate Social Responsibility (CSR) requirements in case of every company including its holding, subsidiary and a foreign company having its branch office or project office in India having net worth of Rs.500 crores or more, or turnover of Rs. 1,000 crores or more, or net profit of Rs. 5 crores or more during the immediately preceding financial year. Companies falling under this net are required to spend in every financial year at least 2% of the average net profits of the preceding three financial years towards CSR activities. Such CSR activities must relate to the areas specified in Schedule VII to the Act. Schedule VII contains, among others, a series of areas relating to environment protection, namely, ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining quality of soil, air and water including contribution to the Clean Ganga Fund set-up by the Central Government for rejuvenation of river Ganga.

Further, in respect of implementation of CSR activities, preference is required to be given to the local areas where the company operates. However, it must be remembered that activities to fulfil statutory obligations (including under environmental laws) cannot be treated as CSR expenditure. Hence, CSR activities must be of a nature beyond fulfillment of legal obligations, which arise to the company as part of its regular business operations. These provisions encourage

corporates to contribute towards environmental conservation over and above compliance with terms of Pollution Control Board consent or other requirements under environmental laws.

ESG REPORTING IN INDIA AND SEBI REGULATIONS

Various international organizations and regulators have recommended reporting of environmental, social and governance initiatives (ESG initiatives) taken by corporates. The notable reporting frameworks have been developed by the Climate Disclosure Standards Board, the Global Reporting Initiative, the Sustainability Reporting Standards Board, the Task Force on Climate-related Financial Disclosures and the International Integrated Reporting Council.

On similar lines, the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business were issued by the Ministry of Corporate Affairs in 2011, keeping in mind the Indian scenario. These guidelines provide for nine principles– ranging from ethics, transparency and accountability to provision of goods and services that contribute to sustainability to protection of environment, along with core elements to realize these principles, and a business responsibility reporting framework.2 Adherence to these guidelines is voluntary.

SEBI vide its circular dated 13th August, 2012, took the initiative to provide for reporting under the aforesaid framework in the form of Business Responsibility Report, 2 National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business https://www.mca.gov.in/Ministry/latestnews/National_Voluntary_Guidelines_2011_12jul2011.pdf

Section 166 of the Act directly lays responsibility on the directors for environmental preservation by providing that a director of a company shall act in good faith in order to promote the objects of the company for the benefit of its members as a whole, and in the best interests of the company, its employees, the shareholders, the community and for the protection of environment. Further, Section 205 of the Act, which describes the functions of Company Secretary, provides that the Company Secretary shall report to the Board about compliance with all laws applicable to the company.



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as a mandatory requirement, perhaps on a pilot basis, for the top 100 listed entities based on market capitalization. Now, under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, inclusion of Business Responsibility Report as part of the Annual Report circulated to shareholders is mandated for the top 1000 companies by market capitalization as on 31st March of every financial year. The suggested format was specified vide circular dated 4th November, 2015 rescinding the earlier 2012 circular.

Recently, the Ministry of Corporate Affairs has issued the National Guidelines on Responsible Business Conduct (NGBRC) revising the earlier voluntary guidelines in line with United Nations Sustainable Development Goals and ‘Respect’ pillar of the United Nations Guiding Principles for Business and Human Rights.3 Following this, SEBI has issued circular dated 10th May, 2021 to bring the earlier ESG reporting in line with the present NGBRC and has renamed the reporting as Business Responsibility and Sustainability Reporting. Guidelines have also been issued to corporates to understand the scope of disclosures. Reporting under each principle under the NGBRC has been divided into essential indicators (mandatory reporting) and leadership indicators (voluntary reporting). This new reporting is applicable with effect from the financial year 2022-23 for the top 1000 listed companies as per the SEBI circular.

3National Guidelines on Responsible Business Conduct http://www.mca.gov.in/Ministry/pdf/National Guildeline_15032019.pdf

It is evident from the above discussion that Company Secretaries play a vital role in compliance with environmental laws. In fact, Company Secretaries, being the trusted advisors to boards, are in the right position to spearhead the change required. While many corporates have actively been engaging themselves in CSR initiatives and sustainability reporting long before these were mandated, a large part of the corporate sector is yet to wake up to the harsh reality of climate change. We have the responsibility to create awareness on the importance of transitioning to sustainable ways of doing business. The transition may involve some costs initially, but it is the only way businesses and economies can survive, thrive and be truly sustainable in the longer run. Further, if a company adopts such practices early on and communicates its initiatives to its stakeholders in the form of sustainability reporting, it is likely that it will enjoy an enhanced brand image.

CONCLUSION A verse from Atharvaveda goes: Matha Bhumi: Putro(a)ham Prthivya: - the Earth is my Mother and I am her son. It is our foremost duty as well as right to preserve Mother Nature and respect her benevolence in every walk of life. In our role as conscience keepers of the corporate world, we must not only comply with environmental laws but also uphold the true spirit of environmental conservation and sustainable development. If every nation, every business and every individual understand the gravity of climate change and take action, it is possible to reverse the effects of climate change, and our posterity would find the Earth a better place to live in. CS



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INTRODUCTION

I ndia has always been committed to the cause of environment protection and the laws have evolved over the years, under the influence of global agreements/

protocols and standards. However , there is a long way to go and there are many challenges.Global Conventions/ Protocols/Standards and how they became part of the fabric of India’s Environment Laws

The last decade of the 20th century saw an increase in awareness about environment protection. The industrial development and the effect it had on the ecosystem, was being studied by several countries and they felt a need for international cooperation on the environment issue. This led to global conferences where international treaties and protocols were signed and they became binding on the nations. Besides this, countries also agreed to follow certain guiding principles voluntarily for environment protection. The developed countries which had emission control systems in place were expected to help the developing countries for establishing such systems, so that the entire world can benefit, leading to overall sustainable development. These global conventions had a major impact on the evolvement of environment laws in India.The United Nations Conference on Environment held at Stockholm in 1972 was the first world conference to bring the environmental issues to the forefront at the international level and thus marked the start of a dialogue between the industrially developed and the developing countries in the matter of economic growth, air and water pollution and the well-being of the human beings in general. It marked the beginning of the United Nations Environment Program (UNEP) for coordinating the responses on the environment issues. This Conference led

Evolution of Environment Protection Laws in India and Challenges Ahead

Hema Gaitonde, FCSPractising Company [email protected]

Indian culture has since ancient times, recognised the inseperable bond between man and nature and the need for environment protection. Our festivals have always emphasised on how each element of nature plays an important role in the life of the living beings. We depend on the nature for our existence, and it is our duty to ensure that our activities are directed towards sustainability and conservation of the nature. It is of utmost importance that the business entities, while carrying on their businesses, should focus on reducing their carbon footprints /emissions and should make a positive impact on the society and the ecosystem.

to the enactment of several important environment legislations in India. The Water (Prevention and Control of Pollution) Act 1974 was passed for prevention and control of water pollution and maintenance and restoring the water quality. This was India’s first attempt to deal with the environment issue from a legal perspective. The Air (Prevention and Control of Pollution) Act, 1981 was passed for the prevention, control and abatement of air pollution.

In order to give effect to the decisions made at the Stockholm Conference of 1972, the Government of India, by way of amendment to the Constitution of India in 1976 provided for the protection and promotion of the environment, and introduced Articles 48-A and 51-A (g) in the Directive Principles of State Policy and the Fundamental Duties respectively. Article 48-A of the Indian Constitution states that “the State shall endeavour to protect and improve the environment and to safeguard the forest and wildlife of the country”. Article 51-A (g) of the Constitution of India states that “It shall be the duty of every citizen of India to protect and improve the natural environment including forests, lakes, rivers and wildlife and to have compassion for living creatures”. Article 21 of the Constitution is about the Fundamental Right to Life. The Right to live in a healthy environment arises from this Article 21.

At the Montreal Protocol 1987, the nations agreed to an accelerated ‘phaseout schedule’ for production of harmful substances that lead to depletion of the ozone layers. In order to support the protocol, the Ministry of Environment & Forests (MoEF), Government of India has formed an Ozone Cell and constituted a steering committee to implement the Montreal Protocol provisions.

In 1992, at the United Nations Conference on Environment and Development (UNCED) in Rio de Janeiro, Brazil, 178 countries of the world adopted Agenda 21, a comprehensive plan of action to build a global partnership for sustainable development to improve human lives and protect the environment.The Rio Declaration emphasized on the duty of the countries towards sustainable development and the right of the human beings for a healthy and productive life. It highlighted how different social, economic and environmental factors are interdependent and evolve together.

In 1992, India ratified the Basel Convention on movement of hazardous waste and included some of its provisions in The Indian Hazardous Waste (Management and Handling) Rules. The Convention aimed at minimising the generation of hazardous wastes and prohibition of shipment of such waste to countries which are unable to dispose of the hazardous waste in an environment-friendly manner.


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LEIn 2002, the United Nations World Summit on Sustainable Development, in Johannesburg, South Africa. focused on sustainable development and environmental preservation. This Summit reaffirmed the global community’s commitments to poverty eradication and the environment, and further built on Agenda 21of the RIO Conference (with modified targets and timetables). An important outcome of this summit was the Johannesburg Declaration on Sustainable Development, an international agreement on the environment and sustainable development.

The Kyoto Protocol which was adopted in the year 1997 and came into effect from the year 2005, made it binding on the developed countries to reduce the greenhouse gas emission, to provide financial resources and transfer of technology to the developing nations and also focused on establishment of a Clean Development Mechanism. There was emission reduction target set for 37 industrialized nations, first for the period 2008- 2012 and then for the second commitment period of 2013-2020. In order to reaffirm its continued commitment to climate action, India ratified the protocol in the year 2017. The protocol incentivized several firms in India to retrofit their pollution plants with newer technology in the hope of earning carbon credits.

In the G20 Pittsburgh Summit 2009, it was decided to make efforts towards phasing out the inefficient fossil fuels subsidies which encourage wasteful consumption. The Durban Climate Summit 2011 focused on climate change issues and on cutting down of carbon emissions by all countries. The decision to set up a Green Climate Fund was taken, to help the world’s developing nations to invest in clean energy. It was unanimously agreed that the countries would put in more efforts to reduce pollution and global warming.

The United Nations has designated June 5 as the World Environment Day, to encourage celebration of the relation between man and nature and to help raise awareness on environment issues. The theme for World Environment Day 2021 is “Ecosystem Restoration.”

ISO 14001The ISO 14001 is an internationally agreed standard on environment management system which guides business entities to meet their environment obligation, reduce negative impact of its activities on the environment and make their business sustainable. This standard is an important benchmark for the industries to develop efficient systems, which helps in environment protection while carrying out their business. Following the standard will help improve their resource efficiency, meet legal obligations, reduce costs, increase stakeholder’s confidence and trust, thereby increasing business opportunities. Several ISO 14001compliant companies in India, have been proudly highlighting their responsible business conduct to their stakeholders.

LEGAL FRAMEWORK FOR ENVIRONMENT PROTECTION IN INDIAIn India, we initially had two Acts viz: The Water (Prevention and Control of Pollution) Act 1974 and The Air (Prevention and Control of Pollution) Act 1981 for prevention, control and abetment of water and air pollution. The Water Pollution Act represents India’s first attempts to comprehensively deal

with environmental issues. This Act prohibits the discharge of pollutants into water bodies beyond a given standard. It was amended in 1988 to conform closely to the provisions of the Environment Pollution Act, 1986.The Air (Prevention and Control of Pollution) Act 1981 seeks to combat air pollution by prohibiting the use of polluting fuels and substances, as well as by regulating appliances that give rise to air pollution. Establishing or operating of any industrial plant in the pollution control area requires consent from State Boards. The Boards are also expected to test the air in air pollution control areas, inspect pollution control equipments and manufacturing processes. National Ambient Air Quality Standards (NAAQS) for major pollutants have been notified which prescribe specific standards for industrial, residential, rural and other sensitive areas. Industry-specific emission standards have also been developed for iron and steel plants, cement plants, fertilizer plants, oil refineries and the aluminium industry. Complementing the above Acts, we also have the Wild life Protection Act, 1972 for wildlife protection and the Atomic Energy Act of 1982 containing legal provisions for control over radioactive substances or radiation generating plant in order to prevent radiation hazards and ensure safe disposal of radioactive wastes. All these Acts have been amended, as required, from time to time in line with international protocols, so as make them proactive towards environment protection.

The Forest (Conservation) Act, 1980 was enacted for the conservation of forests and regulating diversion of forestlands for non-forestry purposes. State governments cannot de-reserve any forestland or authorise its use for any non-forest purposes without approval from the Central Government.

The Bhopal Gas Tragedy is considered to be one of the worst man-made tragedies. It led to the enactment of the Environment Protection Act,1986 (EPA). This enactment acted like an umbrella legislation and provided a holistic approach to the issue of environment protection. The Act empowered the Central Government to coordinate the activities of the various central and state authorities established under the previous laws. Several rules for waste management and conservation of nature were notified under the EPA it; some of which are listed below:

The Kyoto Protocol which was adopted in the year 1997 and came into effect from the year 2005, made it binding on the developed countries to reduce the greenhouse gas emission, to provide financial resources and transfer of technology to the developing nations and also focused on establishment of a Clean Development Mechanism. There was emission reduction target set for 37 industrialized nations, first for the period 2008- 2012 and then for the second commitment period of 2013-2020.



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LE� Environment Protection Rules, 1986� Hazardous Wastes (Management and Handling) Rules in

1989 � The Biomedical Wastes (Management and Handling)

Rules, 1998 � Municipal solid wastes (Management and handling)

Rules, 2000 � Batteries (Management and Handling) Rules, 2001� Wetlands (Conservation and Management) Rules, 2010� Biomedical Waste Management Rules, 2016� Construction and Demolition Waste Management

Rules.2016� E-Waste Management Rules, 2016� Hazardous and other Wastes (Management and

Transboundary Movement) Rules, 2016� Plastic Waste Management Rules, 2016

In addition to the above the Factories Act, 1948 has provisions regarding responsibilities of the occupier relating to the hazardous processes.

The Principle of Absolute liability was first introduced in 1986 by the Hon’ble Supreme Court (SC) in its landmark judgement in the Oleum Gas Leak case. SC felt that the principle of Strict Liability arising out of the Ryland v. Fletcher case was not enough to protect the citizens’ right. Many industries got away easily by taking the help of the exceptions under the Strict Liability Principle. As per the principle of Absolute Liability, if any person or enterprise is involved in an inherently dangerous or hazardous activity, that person or enterprise is strictly and absolutely liable to compensate all those who are affected by the accident and this liability will not be liable to any exceptions. They cannot escape by showing that they have taken all possible care and there is no negligence on their part.

The National Environment Tribunal Act, 1995 is an Act to provide for strict liability for damages arising out of any accident occurring while handling any hazardous substance and for the establishment of National Environment Tribunal for effective and expeditious disposal of cases arising from such accident, with a view to grant relief and compensation for damages to persons, property and the environment.

Regulations relating to vehicular traffic and rules for proper packaging, labelling and transportation of hazardous goods are covered under The Motor Vehicles Act, 1988. The Amendment to this Act in 2019, allowed the Central Government to order for recall of a vehicle of any make and model, if it poses a threat to the environment, the driver or the public at large. This brought in accountability in the auto industry and made them more sensitive to the environment standards and the risks to general public at large. The Central Government has also instituted the Bharat stage emission standards (BSES) to regulate the output of air pollutants from compression ignition engines and Spark-ignition engines equipment, including motor vehicles. The Central Government has mandated that every vehicle manufacturer ( two-wheeler and four-wheeler), ought to manufacture, sell and register solely BS6 (BSVI) vehicles from 1 April 2020.

ECOMARK, a scheme for accreditation and labelling of environmentally friendly products was introduced by the Government in the year 1991. Products which were ecologically safe and conformed to the standards prescribed by the Bureau of Indian Standards (BIS) would bear this certification mark This scheme is an incentive to the producers and importers to reduce the adverse environmental impact of their product. Consumers can easily identify such products and make informed and environmentally safe decision.

The Biological Diversity Act, 2002 (BDA) was enacted under the United Nations Convention on Biological Diversity signed at Rio de Janeiro in 1992. It provides for the conservation of biological diversity, sustainable use of its components. Certain areas which are rich in biodiversity and encompass unique ecosystems are identified and designated as biosphere reserves, to facilitate its conservation. All restrictions applicable to protected areas like National Park & Sanctuaries are also applicable to these reserves.

The National Green Tribunal has been established under the National Green Tribunal Act 2010 for effective and expeditious disposal of cases relating to environmental protection and conservation of forests and other natural resources and for giving relief and compensation for damages to persons and property.

The Companies (Corporate Social Responsibility) Rules, 2014 prescribed under the Companies Act, 2013 help integrate social and environmental concerns with the company operations and encourage corporates to undertake activities which inter alia include environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining quality of soil, air and water. Many corporates have voluntarily taken up several green initiatives under the CSR projects. Creating oxygen hubs by converting non-forest areas into forest areas, afforestation programs, save-the-bird campaigns, creating shelters for home-less animals including taking care of their food and medical needs, tree plantation campaigns are some such examples.

Vision 2030 -United Nations Sustainable Development Goals (SDGs)

The United Nations Sustainable Development Goals (SDGs) 2030 is a charter for all the countries to map their road towards sustainable development. In the year 2015, several countries under the guidance of the UN, finalized the SDGs with a target to achieve them by 2030, which became a vision for all the countries. This involved the announcement of a Universal Agenda with the 17 Sustainable Development Goals with 169 associated targets. One of the important goals was to save the planet, through sustainable consumption and production, managing its natural resources and taking urgent action on climate change to support the needs of the present and future generations. At the UN Summit 2015, it was agreed by the countries that they would work to implement the agenda at the global and regional levels, and reduce the negative impacts of urban activities and of chemicals which are hazardous for human health and the environment. Safe use of chemicals, the reduction and recycling of waste and more efficient use of water and energy were some other objectives to be achieved.



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LESome of the specific environment related goals/targets are given below:� Ensure healthy lives and promote well-being for all at all

stages.� Ensure availability and sustainable management of water

and sanitation for all.� Ensure access to affordable, reliable, sustainable and

modern energy for all.� Built resilient infrastructure, promote inclusive and

sustainable industrialisation and foster innovation.� Make cities and human settlements inclusive, safe,

resilient and sustainable.� Ensure sustainable consumption and production pattern.� Take urgent actions to combat climate change and its

impact.� Conserve and sustainably use the oceans, seas and

marine resources.� Protect, restore and promote sustainable use of terrestrial

ecosystems, sustainably managed forests, combat desertification and halt and reverse land degradation and halt biodiversity loss.

� Strengthen the means of implementation and revitalise the global partnership for sustainable development.

GOVERNMENT INITIATIVES IN INDIAThe Government of India (GoI) is strongly committed to the 2030 Agenda and it has put the SDGs at the core of India’s development agenda. The National Institute for Transforming India (Niti Ayog) was formed in the year 2015 as a premier policy “Think Tank” of the GoI, for providing directional and

policy inputs and for providing technical advice to the Centre and the States. India’s approach to climate action has been proactive, ambitious and forward-looking. Some of the initiatives of the GoI to support the SDGs and to promote energy efficiency are listed below:� Considering the size and population density in India, GoI,

through Niti Ayog, has taken several steps to localise the global SDGs at subnational levels by creating awareness, setting up detailed review mechanisms and operationalizing dashboards, improving data collection systems etc.

� India adopted the National Action Plan on Climate Change (NAPCC) in 2008 comprising of eight National Missions, which inter alia include promoting solar energy; sustainable economic growth along with reduction in energy and carbon intensity of the economy; protecting, restoring and enhancing India’s green cover in response to the climate change; sustainable growth of agriculture sector.

� Perform, Achieve and Trade (PAT) scheme by Bureau of Energy Efficiency (BEE), is a market-based compliance mechanism where the energy savings achieved by notified industries are converted into tradable instruments called Energy Saving Certificates (ESCerts).

� Energy audit plays an important role in energy management and conservation. It has been made mandatory for certain class of companies by the BEE. Other entities can take up energy audit voluntarily.

� Renewable Energy Certificate (REC) is a market-based instrument to promote renewable energy and facilitate compliance of renewable purchase obligation. An energy generating company engaged in the generation of electricity from renewable energy sources shall be eligible to apply for registration for issuance of and dealing in REC, subject to certain conditions.

� Sectoral incentives like feed-in tariffs (Fit), generation-based incentives (GBI) and accelerated depreciation (AD) for solar and wind electricity.

� The Green Energy Corridor Project was launched to synchronize electricity produced from all renewable energy sources with conventional power stations in the grid.

� National Smart Cities Mission to promote cities that provide core infrastructure, clean and sustainable environment and give a decent quality of life to their citizens through the application of ‘smart solutions’. The focus is on sustainable and inclusive development by creation of replicable models which act as lighthouses to other aspiring cities.

� Pollution related problems of the coal-based power stations, which happen to be the mainstay of India’s power generation are being addressed through several strategies to promote environmentally sustainable power generation like formation of SPVs for Afforestation, Fly Ash Utilisation Action Plan, Clean Deposit Mechanism etc.

� Green Skills Program focuses on developing skills among the youth in the environment and forest sector.

� Several Missions like Swachh Bharat Abhiyan, Namami Gange Yojana have been launched to encourage the people of India to be part of the mission.

The United Nations Sustainable Development Goals (SDGs) 2030 is a charter for all the countries to map their road towards sustainable development. In the year 2015, several countries under the guidance of the UN, finalized the SDGs with a target to achieve them by 2030, which became a vision for all the countries. This involved the announcement of a Universal Agenda with the 17 Sustainable Development Goals with 169 associated targets. One of the important goals was to save the planet, through sustainable consumption and production, managing its natural resources and taking urgent action on climate change to support the needs of the present and future generations.



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LE� E-filings of petitions/applications etc and E hearings at

the courts has reduced use of paper to a large extent.

� Encouraging sustainability reporting: One of the important steps in this direction is the SEBI LODR amendment which has introduced the concept of Business Responsibility and Sustainability reporting (BRSR) in place of Business Responsibility Reporting (BRR). The BRSR seeks disclosures from top 1000 listed entities (based on market capitalisation) on their performance against the nine principles of the ‘National Guidelines on Responsible Business Conduct’ (NGBRCs). This is voluntary for 2021-22 and has been mandatory from 2022-23. The intent of the amendment is to enable companies to engage more meaningfully with their stakeholders, to encourage them to look beyond financials and to highlight the social and environmental impacts.

The need of the hour is to work towards a circular economy system. This is in contrast to the linear economy which operates on the model of “take, make and throw”. A circular economy is an economic system which aims at eliminating waste and putting the resources to use continually. The main aim is to keep products, equipment and infrastructure in use for longer period by reusing, repairing, refurbishment, recycling, thereby reducing waste, pollution and carbon emission.

POSITIVE IMPACT OF THE LEGISLATIONS AND GOVERNMENT INITIATIVESThe government initiatives towards sustainable development have started showing positive results. Solar installed capacity in India has increased by about 13 times from 2.63 GW to 34.62 GW between March 2014 and March 2020. The share of non-fossil sources in installed capacity of electricity generation increased from 30 per cent in March 2014 to 36 per cent in March 2020. The country has leapfrogged from Bharat Standard IV to Bharat Standard VI for vehicle emission norms. There is also a strong push for the use of zero-emission vehicles by introducing multiple policy interventions and incentives. India has already operated a commercial flight fully on biofuel; blending of 20 per cent ethanol in petrol is targeted by 2030. (Source: The Niti Ayog publication “INDIA VNR 2020 Decade of Action- Taking SDGs from Global to Local”). In the past few years, many solar energy start-ups have been putting in efforts to innovate in the renewable energy space to reduce the use of exhaustible resources and to provide cost-effective solar-solutions for making the people self-dependent for their power usage. People are becoming more conscious about environment issues and are coming together to implement sustainable solutions. Several Corporates are coming forward to take up their responsibility towards the society and the environment. The public-private partnership is extremely important for the entire exercise to be successful.

ENVIRONMENT PROTECTION – OUR FUNDAMENTAL DUTY

The government initiatives and the several legislations are showing positive results in the field of environment protection. However, much more needs to be done at the grass root levels. India ranks as low as 168 out of 180 countries assessed on the

Environment Protection Index 2020 by the Yale University for environment health and ecosystem viability.

Protection of the environment is the moral and fundamental duty of every citizen of India. Unless the society is constantly made aware of the seriousness of the issue of environment pollution and the harm caused to the ecosystem due to certain human activities, the current scenario may not change. It is necessary to bring about a behavioural change where people are encouraged to take more responsibility to protect the environment. Common man has to be sensitized about the need for their contribution towards the building a safe eco-system. Strict laws with severe penal provisions should be implemented. Unless every citizen takes it as his /her personal responsibility to save the environment, having a plethora of laws will be of no use.

Climate change and global warming are burning issues which call for strong action. Each corporate has to keep this in mind while carrying on their activities. They can play a major role in reducing carbon footprints and environment emissions, thereby protecting the planet. Basic safety standards must be adhered. Corporates should adopt cleaner production methods, promote use of energy efficient devices and environment friendly technologies along with use of renewable energy. They should explore sustainable alternatives and engage with its stakeholders to broaden the understanding of environmental priorities and to initiate actions on key environmental challenges. Corporates can play a major role in water management, since they use water on large scale and also are major source of water pollution. Effluent treatment plants should be set up and treated water should be put to use for permissible purposes. The waste management system can be extended to the neighbouring areas by the business entity by starting a community waste management program. Waste collection kiosks can be set up along with spreading awareness about proper waste disposal. Building sustainable supply chains, employee training at all levels, holding public awareness programs to sensitise the stakeholders and guiding them to make sustainable choices, are some of the strategies which corporates could follow to meet their environment objectives. Commercial buildings including malls must do regular inspection of all equipments, power down all equipments during off- hours, use of energy efficient lighting and use of only basic lighting and air conditioners, when there is low occupancy. Every business entity must list their environment goals and build strategies to achieve them.



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Work from home which has become the new normal should be continued where-ever possible, thereby reducing the traffic, air and noise pollution. Electronic maintenance of records with suitable backup at government and private offices should be encouraged. Besides, there are many measures that should be followed at micro level by each of us. They have to be ingrained within us in such a manner that it becomes a routine, whether at home or at office or any public place, for example switching off electronic appliances while not in use, taking prints only when required, use of motion -sensors, following the 3Rs- reduce, recycle and reuse, zero waste life style, use of bicycles/bikes instead of personal cars, taking care of our surroundings. Every possible effort has to be put in, to conserve our depleting resources, to reduce the effect of global warming and to keep the surroundings clean. Construction of green buildings and use of green packaging should be promoted.

Government could create a spirit of competitiveness among the businesses by holding competitions and announcing prizes based on their environment friendly initiatives. India can have an Environment Protection Index for its business entities. The top ranked entities will earn the stakeholders’ trust and confidence and other entities will be encouraged to put in efforts in that direction. Start-ups using best energy practices and those exploring use of renewable energy should be encouraged.

SUSTAINABLE DEVELOPMENT-CHALLENGES AHEADA sustainable way of life might seem to be a costlier option for a developing country like ours. Large population is another challenge for India. However, in the long term this is the only best option for mankind. The industrially developed nations are in a position to adopt environment friendly technology and use environment friendly resources. The developing and underdeveloped countries are finding it difficult to meet the environment targets since most of their citizens opt for cheaper and easily available products, leading to creation of more waste and environment pollution. Government may have to announce more subsidies to promote environment friendly products, use of environment friendly inputs and technology.

Plastic has always been a severe threat to the natural ecosystem. Just when we have learnt to reduce the consumption of single-use plastics, we found ourselves in the

middle of COVID-19 pandemic. What started as a health crisis also got converted into a major threat to the environment. The single use PPE kits, masks, hand gloves and the bio waste generated during the pandemic, cannot be recycled due to fear of contamination. Hence it either goes into land filling or is incinerated, leading to increase in environment pollution. Many a times the masks and gloves are wrongly disposed in the public places. The COVID-19 vaccine vials and the syringes will create a huge medical waste, which needs to be disposed properly. We can also see that demand for plastic for packaging has gone up during the course of last year.

Use of biofuels is still not very popular since greater number of biofuels are needed to meet the same energy demand generated by fossil fuels. Further the progress is still needed in the field of biofuels if they are to be used for mechanical purposes.

Government is taking several steps for improving the infrastructure in the cities; for example, the costal roads, the metro railways, bridges etc. to improve connectivity. This is likely to have adverse impact on the ecosystem since it involves landfilling, cutting of trees etc. and will increase the pollution. A proper strategy to reduce the adverse impact on the environment has to be worked out in detail, in advance.

We, as professionals, are better placed since we are aware of the legal framework, the standards (global and national) for environment protection and the Government initiatives for a safe ecosystem. In addition to compliance, we should draw the attention of the management and emphasise from time to time, on the importance of being responsible corporate citizen of India. We can advise the management to form committees for promotion of environment protection. Besides coming up with innovative ideas, the sustainability measures, safety procedures, environment friendly technologies which are being followed by other business entities or other countries globally, could be studied and taken up for implementation by such committees. Professionals with expertise in the relevant fields can support the Government in setting up systems which will help build a circular economy.

We must realise that the whole ecosystem is our family and we need to respect and take care of it by applying the ethos of “Vasudhaiva Kutubakkam.” CS

REFERENCES: 1. https://sdgs.un.org/2030agenda2. https://www.un.org/en/conferences/environment/

stockholm1972

3. https://in.one.un.org/page/sustainable-development-goals

4. https://www.beeindia.gov.in

5. https://en.wikipedia.org/wiki/Circular_economy6. http://www.moef.gov.in7. https://www.sebi.gov.in/legal/circulars8. http://niti.gov.in/index.php/reports-sdg



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INTRODUCTION

U nited Nations General Assembly by its Resolution 44/228 of 1988 has decided to convene United Nation Conference on Environment and Development (1992). Initially it was

known as “Earth Summit” and later it came to be known as “Rio Conference”. It was a major United Nations conference held in Rio de Janeiro from 3 June to 14 June 1992. It was attended by 172 Governments. Before the Rio Conference, United Nation convened UN Conference on the Human Environment, 1972 at Stockholm from 5th June to 12th June 1972 was major international environmental conference. Every year 5th June is celebrated as “Environment Day” to commemorate the UN Conference on the Human Environment, 1972. This Article aims to explore the impact of the Rio Conference on the development of the International Environmental protection regime. Indian Constitution places great importance on the Environmental Protection and theme of the environmental protection is recognised in Part-III (Fundamental Rights), Part-IV (Directive Principles of State Policy) and Part-IVA (Fundamental Duties).

Rio Conference- A Milestone in Environmental Protection

Anil Kumar Dubey, FCSPracticing Company SecretaryRegistered Valuer (SFA)KolkataEmail: [email protected]

Environment’s Protection is sine qua non for the survival of the Humanity. With the increasing anthropogenic activities and deteriorating environmental conditions like the depletion of Ozone layers and increase in the environmental temperature due to Greenhouse Gases. Earth Summit was major human intervention to save the Humanity and this summit has produced a series of other developments in the direction of Environmental Protection.

1. Rio Declaration on Environment & Development:

Rio Declaration on Environment and Development consisted of 27 principles intended to guide future sustainable development around the world. Some Scholars have regarded the Rio Declaration as “Third Generation Human Rights.” These principles are as follows:

Sl. No. Principles

1 The role of humans2 State sovereignty3 The Right to development4 Environmental Protection in the Development Process5 Eradication of Poverty6 Priority for the Least Developed7 State Cooperation to Protect Ecosystem8 Reduction of Unsustainable Patterns of Production and

Consumption9 Capacity Building for Sustainable Development10 Public participation11 National Environmental Legislation12 Supportive and Open International Economic System13 Compensation for Victims of Pollution and other

Environmental Damage14 State Cooperation to Prevent environmental dumping15 Precautionary principle16 Internalization of Environmental Costs17 Environmental Impact Assessments18 Notification of Natural Disaster19 Prior and Timely Notification20 Women have a Vital Role21 Youth Mobilization22 Indigenous Peoples have a Vital Role23 People under Oppression24 Warfare25 Peace, Development and Environmental Protection26 Resolution of Environmental Disputes27 Cooperation between State and People


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Agenda 21 is yet another outcome of the 1992 Rio Conference. It is the “Voluntary” action plan of the United Nations (UN) related to sustainable development. Agenda 21 is dynamic programme. This 40-point document was a comprehensive blueprint of action to be taken globally, nationally and locally by organizations of the UN, governments, and major groups in every area in which humans directly affect the environment. For implementation of these points a Commission on Sustainable Development was established as a high-level forum on sustainable development. The United Nations Division for Sustainable Development acts as the secretariat to the Commission and works ‘within the context of’ Agenda 21. Agenda 21 is grouped into 4 sections.

3. Convention on Biological Diversity (CBD)

Convention on Biological Diversity is a legally binding document, which came as an outcome of Earth Summit in Rio de Janeiro on 5 June 1992 and entered into force on 29 December 1993. It is commonly known as “Biodiversity Convention”. The Convention can be hailed as a landmark from several points of view. It is the first time that biodiversity, as such, is comprehensively addressed, and the first time that genetic diversity is specifically covered in a binding global treaty. It is also the first time that the conservation of biodiversity



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LEis recognized as the common concern of humankind the treaty is a landmark in the environment and development field, as it takes for the first time a comprehensive rather than a sectoral approach to conservation of the Earth’s biodiversity and sustainable use of biological resources. It recognizes the vital point that both biodiversity and biological resources should be conserved for reasons of ethics, economic benefit and indeed human survival. The Convention, however, goes beyond the conservation of biodiversity per se and the sustainable use of biological resources, to encompass such issues as access to genetic resources, sharing of benefits from the use of genetic material and access to technology, including biotechnology. The fact that biological diversity is unevenly distributed around the globe is also recognized in the Convention. The North, biologically poorer, has depleted its biodiversity reserves over time, but such reserves are still found in the biologically rich South. If biodiversity is to be conserved, this imposes a heavier burden on the South, at a time when the use of biological resources is of paramount importance for developing countries in achieving development. The Convention recognizes that this burden, in turn, can only be alleviated by additional contributions (not only financial) from the industrialized North and through increased partnership between both developed and developing countries.

The Convention on Biological Diversity is a framework agreement in two senses. In the first sense, it leaves it up to individual Parties to determine how most of its provisions are to be implemented. This is because its provisions are mostly expressed as overall goals and policies, rather than as hard and precise obligations. As per Convention, the main decision making is delegated at the national level. Instead, the emphasis in the Convention on Biological Diversity is to place the main decision-making at the national level. With regard to the provisions on conservation and sustainable use, the focus on action at the national level is emphasized by two crucial articles—article 1 which sets out the Convention’s objectives, including the conservation of biological diversity and the sustainable use of its components, and article 6 which requires each Party to develop national strategies, plans or programmes for conservation of biodiversity and sustainable use of biological resources. It will often be the case that the Parties will have to go beyond the substantive provisions in the later articles to achieve the overall objectives in article 1. The later articles set out the policies to be followed. Article 8 sets out the major policies for effective in-situ conservation of biological diversity, giving Parties a set of goals against which to match their own laws and policies. Article 9 does the same for ex-situ conservation, article 10 for sustainable use of biological resources and article 14 for environmental impact assessment. These goals are buttressed by less detailed commitments on research and training (article 12) and on education and awareness (article 13). The articles on access to genetic resources (article 15) and access to and transfer of technology (article 16), complex and imprecise as they are, also leave much to each Contracting Party to decide regarding their implementation. The financial articles (article 20, 21 and 39) were, to an extent, purposely left vague for the Conference of the Parties to later clarify. That the Convention is a framework agreement is evident in the second sense because emphasis is placed on the possibility for the Conference of the Parties to further negotiate annexes and protocols.

Access-related issues were some of the thorniest in the negotiation of the CBD. Developing countries made certain demands of their own in order to take convention obligation. Three types of access were discussed in the CBD: access to genetic resources; access to relevant technology, including biotechnology; and access for the providing States to benefits ultimately gained from the use of genetic material in the development of biotechnology. The objectives of the CBD may summarised as Conservation of biological diversity; Sustainable use of its components; and fair and equitable sharing of benefits arising from genetic resources. On 29 January 2000, the Conference of the Parties to the Convention on Biological Diversity adopted a supplementary agreement to the Convention known as the Cartagena Protocol on Biosafety. The Protocol seeks to protect biological diversity from the potential risks posed by living modified organisms resulting from modern biotechnology. 10th Conference of Parties to the Convention on Biological Diversity in 2010 adopted the Nagoya Protocol. The strategic plan which is outcome of the Nagoya Protocol is “Aichi Target”. It includes 20 headline targets, organized under five strategic goals that address the underlying causes of biodiversity loss, reduce the pressures on biodiversity, safeguard biodiversity at all levels, enhance the benefits provided by biodiversity, and provide for capacity‐building.4. Forest Principle

Forests cover approximately 30 per cent of the Earth’s land surface and provide important ecosystem goods and services, including food, fodder, water, shelter, nutrient cycling, air purification, and cultural and recreational amenities. Forests also store carbon, provide habitat for a wide range of species and help alleviate land degradation and desertification. Forest Principle are not legally binding in nature. Forest Principle is the informal name of the “Non-legally Binding Authoritative Statement of Principles for a Global Consensus on the Management, Conservation and Sustainable Development of All Types of Forest.”

The guiding objective of these principles is to contribute to the management, conservation and sustainable development of forests and to provide for their multiple and complementary functions and uses. These principles apply to all types of forests, both natural and planted, in all geographical regions and climatic zones.

5. United Nation Framework Convention on Climate Change (UNFCCC)

The Earth’s climate has always changed and evolved. Some of these changes have been due to natural causes but others can be attributed to human activities such as deforestation and to atmospheric emissions, from, for example, industry and transport, which have led to gases and aerosols being stored in the atmosphere. They are known as greenhouse gases (GHGs) because they trap heat and raise air temperatures near the ground, acting like a greenhouse on the surface of the planet.

According to Article 2, the Convention’s ultimate objective is “to achieve, in accordance with the relevant provisions of the Convention, stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic [originating in human activity] interference with the climate system”. This objective is qualified in that it



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“should be achieved within a time frame sufficient to allow ecosystems to adapt naturally to climate change, to ensure that food production is not threatened and to enable economic development to proceed in a sustainable manner”.

The Convention does not state a limit for total anthropogenic GHG emissions which would have to be respected to reach the objective. Nor does it indicate the level of total GHG concentrations beyond which “dangerous anthropogenic interference with the climate system” would occur. Estimates of where these levels lie evolve continually with scientific advances and are complicated by the political need to take into account the changing ability of societies to adapt to climate change. Another important factor is that stabilizing atmospheric concentrations of GHGs near current levels would actually require a steep reduction of current emissions. This is because, once emitted, GHGs remain in the atmosphere for a considerable length of time: carbon dioxide, for instance, stays in the climate system, on average, for a century or more.

UNFCCC is itself not legally binding and does not set mandatory limits on greenhouse gas emissions for individual countries and contains no enforcement mechanisms. However, it was projected legally binding agreement as its protocols would set the emission targets and legally binding enforcements. One such important protocol is the Kyoto Protocol of 1997, which is legally binding. The protocol is so famous that it is now a misnomer to UNFCCC itself. Having received the instrument of ratification by a minimum of 50 parties, the convention entered into force on March 21, 1994. The ratification of the UNFCCC means ratification of the voluntary “non‐binding aim” to reduce atmospheric concentrations of greenhouse gases with the goal of “preventing dangerous anthropogenic interference with Earth’s climate system.” The above action was primarily targeted at the industrialized countries, so that they stabilize the emissions of greenhouse gases at 1990 levels by the year 2000. Accordingly the Industrialized countries were places in a separate category. The parties of the UNFCC are grouped into three categories:

a) Annex‐I Countries;b) Annex‐II Countries; andc) Developing Countriesa. Annex- I Countries:

The industrialized countries and the countries whose economies were in transition in 1992 were kept in Annex‐I countries. This group comprises the 40 nations & one organization (European Union).b. Annex-II Countries:

The Developed countries which play a financial role in the development of the developing countries and pay the cost for the development in the developing countries were placed in Annex II countries. There are 23 countries placed in the Annex-II countries. It is to be noted that Annex-II countries is sub-group of Annex-I countries.

c. Developing Countries

The Developing countries, as per the UNFCCC, are not required to reduce emission levels unless developed countries supply enough funding and technology for their developmentSome Important Environmental Principals: Rio Conference:a. Common but Differentiated Responsibilities (CBDR)- It

implies that all the states are responsible for environmental destruction but not equally. The principal balances, on the one hand, the need for all states to take responsibility for global environmental problems and, on the other hand, the need to recognize the wide differences in levels of economic development between states. Principle 7 of the Rio Declaration reads as follows:

“States shall cooperate in a spirit of global partnership to conserve, protect and restore the health and integrity of the Earth’s ecosystem. In view of the different contributions to global environmental degradation, states have common but differentiated responsibilities. The developed countries acknowledge the responsibility that they bear

in the international pursuit of sustainable development in view of the pressures their societies place on the global environment and of the technologies and financial resources they command”.

The CBDR principle promotes equity considerations in international environmental law. CBDR principle undertakes that all states shall cooperate to protect the environment and restore ecosystems. It also implies that our generation has a responsibility towards future generations. CBDR responsibilities proceed from inequalities across states be it in capacities, socioeconomic situations or historical, current and future contributions to global environmental problems.

b. Polluter Pays Principle (PPP)

Rio Declaration does not specifically recognise PPP. However, principle 16 of the Rio Declaration reads as follow:

“the National authorities should endeavour to promote the internalization of environmental costs and the use of economic instruments, taking into account the approach that the polluter should, in principle, bear the cost of pollution, with due regard to the public interest and without distorting international trade and investment.”

Convention on Biological Diversity is a legally binding document, which came as an outcome of Earth Summit in Rio de Janeiro on 5 June 1992 and entered into force on 29 December 1993. It is commonly known as “Biodiversity Convention”. The Convention can be hailed as a landmark from several points of view. It is the first time that biodiversity, as such, is comprehensively addressed, and the first time that genetic diversity is specifically covered in a binding global treaty.



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to the persons who ought to pay it and also who have the ability to pay it. It talks about the internalization of environmental costs i.e. Polluter is economically liable for their activities.

Indian judiciary has applied this principle in following cases ( the list is indicative):

a. Indian Council for Enviro-Legal Action vs. Union of India [ 2011(8) SCC 161].

b. Vellore Citizens Welfare Forum vs. Union of India [AIR 1996 SC 2715].

c. M.C Mehta vs. Union of India [ AIR 1987 SC 965]. d. The Forward Foundation vs. State of Karnataka & Ors.

[Application No. 222 of 2014 decided on 4th May, 2016].

e. Ankur Gutkha vs. Indian Asthama Care Society & Ors [ Special Leave to Appeal (Civil) Nos. 16308, 16314, 16317 decided as on 7.12.2010].

f. S. Jagannath vs. Union of India & Ors. [Writ Petition No. 561 of 1994 decided on 11.12.1996].

g. Tirupur Dyeing Factory Owners Association vs. Noyyal River Ayacutdats Protection Association & Ors.

c. Precautionary Principle:

Principle 15 of the Rio Declaration deals with the Precautionary Principle. Principle 15 reads as follows:

“In order to protect the environment, the precautionary approach shall be widely applied by States according to their capabilities. Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation.”

Article 3.3 of the UNFCCC read as follows:

“The Parties should take precautionary measures to anticipate, prevent or minimize the causes of climate change and mitigate its adverse effects. Where there are threats of serious or irreversible damage, lack of full scientific certainty should not be used as a reason for postponing such measures, taking into account that policies and measures to deal with climate change should be cost-effective so as to ensure global benefits at the lowest possible cost.”

The Principle is based on the recognition that a false prediction that a human activity will not result in significant environmental harm will typically be more harmful to society than a false prediction that it will result in significant environmental harm.

Indian judiciary has applied this principle in following cases (the list is indicative):

a. Sudiep Shrivastava & Ors. vs. Union of India [Original Application 470/2015 decided on 08.08.2015].- NGT Principle Bench.

b. Arjun Gopal & Ors. Union of India [ WP No. 728 of 2015 decided on 23.10.2018]- Hon’ble Supreme Court.

c. Yogindra Mohan Sengupta & Ors. Union of India [Application No. 121 of 2014 decided on 16.11.2017]- NGT Principle Bench.

d. State of Tamilnadu & Ors. vs. State of Kerala & Ors. [SLP No. 13955 of 2012 decided on 07.05.2014]- Hon’ble Supreme Court.

e. Rajeev Suri vs. Ministry of Urban Development [ Application No. 134 of 2014 decided on 13.01.2015]- NGT Principle Bench.

f. The Forward Foundation vs. State of Karnataka & Ors. [Application No. 222 of 2014 decided on 4th May, 2016].

g. Tirupur Dyeing Factory Owners Association vs. Noyyal River Ayacutdats Protection Association & Ors. [Civil Appeal No. 6776 of 2009 decided on 6.10.2009] Hon’ble Supreme Court.

CONCLUSIONInternational environmental law making is very complex and outcome of hard geopolitical, economic and strategic considerations. International Law making is based on the principle of the balancing of the interests of all interested parties. Other factors, which play a significant role in environmental international law making, are the competing interests and differentiation in the legal position of developed and developing States, i.e. the competing interests and differentiation are reflected in the principle of common but differentiated responsibilities. Rio Conference brought the sense of urgency and attention of the International Stakeholders that environmental issues deserves in the 21st Century. It is expected that International stakeholders will strive hard to work as per the spirit of the Rio Conference. CS

REFERENCES:1. www.un.org2. www.iucn.org3. www.digitallibrary.un.org4. www.unfccc.int

“In order to protect the environment, the precautionary approach shall be widely applied by States according to their capabilities. Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation.”



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INTRODUCTION

S ection 204 (1) of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 provides that the

following class of companies shall annex with its Board’s Report made in terms of sub-section (3) of Section 134, a Secretarial Audit Report, given by a Company Secretary in practice, in such form as may be prescribed:

1. every listed company;

2. every public company having a paid-up share capital of fifty crore rupees or more; or

3. every public company having a turnover of two hundred fifty crore rupees or more.

The Company Secretary should ensure that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with all applicable laws including Environmental laws.

A Secretarial Auditor is required to report and provide details of specific events and actions that occurred during the reporting period having major bearing on the affairs of the company in pursuance of above referred laws/ rules & regulations.

SCOPE OF SECRETARIAL AUDIT AS DECIDED BY THE COUNCIL OF ICSI

As per ICSI communication dated December 22, 2014 Consultation Meets were held with the Corporates (through Company Secretaries in employment) as well as Company Secretaries in practice and taking into consideration the views emerging therefore, the Council of the ICSI at its 226th

Environment Protection, Regulatory Framework and Role of Company Secretaries

Vasumathy Vasudevan, FCSPractising Company Secretary & Insolvency ProfessionalV. Vasumathy and Associates, [email protected]

At the verge of World Environment Day being celebrated on 5th of June every year, it is important to discuss various laws governing Environment Protection, Regulatory Framework and the Role of Company Secretaries, which is dealt in the Article.

Meeting held on November 21, 2014 decided on the Scope of Secretarial Audit which includes, inter-alia;

� Reporting on compliance of “Other laws as may be applicable specifically to the company”, which shall mean all the laws which are applicable to specific Company for example

® for Banks - all laws specifically applicable to Banking Industry;

® for Insurance companies - all laws specifically applicable to insurance industry;

® for a company in the petroleum sector - all laws specifically applicable to petroleum industry; likewise

® for companies in the pharmaceutical sector, cement industry etc.

� Examining and reporting whether the adequate systems and processes are in place to monitor and ensure compliance with general laws like labour laws, competition law and environmental laws.

ENVIRONMENTAL LAWS

As much as the Government, companies – especially in the manufacturing industry shall take responsibilities with regard to protecting and improving the quality of the environment and preventing and abating environmental pollution and complying with the standards for emission or discharge of environmental pollutants from the industries – curbing air, water and land pollution. For example, it shall be important to examine whether adequate systems and processes are in place to monitor and ensure compliance with the following pertaining to water laws:

(i) The Company is not discharging the contaminated water at the public drains / rivers. The company has efficient water treatment plants at its factory premises (if applicable);

(ii) The Company has been disposing the hazardous waste as per applicable rules;

India’s economic development propelled by rapid industrial growth and urbanization is causing severe environmental problems that have local, regional and global significance. Recognising the need for regulating the factors which are affecting environment, Government of India has established an environmental, legal and institutional system to meet these challenges within the overall framework of India’s development agenda and international principles and norms.


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LELEGAL FRAMEWORK

India has an elaborate legal framework with number of laws relating to environmental protection. Key national laws pertaining to Environmental Protection include the following:

� Environment (Protection) Act, 1986 read with The Environment (Protection) Rules, 1986;

� Water (Prevention and Control of Pollution) Act, 1974 read with Water (Prevention & Control of Pollution) Rules, 1975;

� Water (Prevention and Control of Pollution) Cess Act, 1977;

� Air (Prevention and Control of Pollution) Act, 1981 read with The Air (Prevention & Control of Pollution) Rules, 1982;

� Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2008;

� The Public Liability Insurance Act, 1991;

� The Biodiversity Act,2002;

� The National Green Tribunal Act,2010;

� Plastic Waste Management Rules, 2016;

� Bio-Medical Waste Management Rules, 2016;

� Construction and Demolition Waste Management Rules, 2016;

� E-waste Management Rules, 2016;

� The Batteries (Management and Handling) Rules, 2001.

ENVIRONMENTAL LAW

What is Environmental Law and why it becomes very critical for the company because of any kind of serious or critical non compliance in Factories? Environmental Law covers the entire ambit of the Environmental Protection Act, Water Act and Air Act. Non compliances under this head are straight invitation for the factory to shut down or serious penalty and fines on Occupier. Proper maintenance of factories surrounding, timely submission of the Returns under the said acts and rules framed there under, timely intimation to the department about any incident or accident occurred in factories.

Compliances w.r.t. few of the aforesaid laws are given in brief below.

Compliances w.r.t. Environment (Protection) Act, 1986 read with The Environment (Protection) Rules, 1986;

The Environment (Protection) Act, 1986 authorizes the Central Government to protect and improve environmental quality, control and reduce pollution from all sources, and prohibit or restrict the setting and /or operation of any industrial facility on environmental grounds.

The Company Secretary shall ensure that a company has complied with the following requirements under the Environment (Protection) Act, 1986 read with The Environment (Protection) Rules, 1986.

1. The Company does not discharge or emit or emit any environmental pollutants in excess of such standards as prescribed under Rule 9 of the Environment (Protection) Rules, 1986;

2. Central Government or any officer empowered by it in this behalf have taken samples of air, water, soil or other substance from any factory, premises or other place in such manner as may be prescribed for the purpose of analysis;

3. Any person empowered by the Central Government has carried out inspection for determining whether any provisions of this Act or the rules made thereunder or any notice, order, direction or authorisation served, made, given or grated under this Act is being or has been complied with.

4. Compliance with safeguard measure as prescribed for handling any hazardous substance.

5. In case of discharge of environmental pollutant in excess of prescribed standard, the Company should give intimation of the fact of such occurrence or apprehension of such occurrence to all the relevant authorities or agencies.

6. The Company shall submit an environmental audit report for the financial year ending March 31 in Form V to the concerned State Pollution Control Board on or before 13th day of September.

Compliances w.r.t. Water (Prevention and Control of Pollution) Act, 1974 read with Water (Prevention & Control of Pollution) Rules, 1975:

The Water (Prevention and Control of Pollution) Act, 1974 read with Water (Prevention & Control of Pollution) Rules, 1975 have been enacted with the objective of prevention & control of pollution in India. The Act aims at the maintaining or restoring the wholesome nature of water for the establishment of Boards and to vest them with such powers so as to enable them to carry out the purposes of the Act.

India’s economic development propelled by rapid industrial growth and urbanization is causing severe environmental problems that have local, regional and global significance. Recognising the need for regulating the factors which are affecting environment, Government of India has established an environmental, legal and institutional system to meet these challenges within the overall framework of India’s development agenda and international principles and norms.



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LEThe Company Secretary shall ensure that a company has complied with the following requirements under the Water (Prevention and Control of Pollution) Act, 1974 read with Water (Prevention & Control of Pollution) Rules, 1975:

1. The State Board or any officer authorised by it in this behalf have taken samples of water from any stream or well or of any sewage or trade effluent passing from any plant or vessel or over any place into any such stream or well.

2. Prior consent of the State Board under Section 25 is taken to set up any industry / plant / process which is likely to discharge sewage of trade effluent into stream or well or sewer or on land or bring into use any new or altered outlets for the discharge of sewage or begin to make any new discharge if sewage.

3. Ensure that the company does not receive any notice / order from the State Board restraining the company from polluting the water in any stream or well.

Compliances w.r.t. Air (Prevention and Control of Pollution) Act, 1981 read with The Air (Prevention & Control of Pollution) Rules, 1982:

The Air (Prevention and Control of Pollution) Act of 1981, or the Air Act, in short, was a law passed by the Parliament of India to prevent and control the harmful effects of air pollution in India.

The Company Secretary shall ensure that a company has complied with the following requirements under the Air (Prevention and Control of Pollution) Act, 1981 read with The Air (Prevention & Control of Pollution) Rules, 1982:

1. Prior consent should have been obtained from the State Pollution Control Board for any industrial plant in an air pollution control area.

2. The Company does not discharge or cause or permit to be discharged the emission of any air pollutants in excess of such standards laid down by the State Board under Section 17 1) (g).

3. The Company should comply with the following conditions as may be laid down in the consent by the State Board, namely:

(i) Installation and operation of the control equipment;

(ii) Alteration or replacement of the existing control equipment, if any;

(iii) Proper Maintenance of the Control Equipment; and

(iv) Erection or re-erection of Chimney, as may be necessary.

4. The State Board or any officer authorised by it in this behalf have taken samples of air or emission from any chimney, flue or duct or any other outlet for the purpose of analysis.

5. Ensure that the company does not receive any notice / order from the State Board restraining the company from discharging or causing or permitting to be discharged the emission of any air pollutants.

Compliances w.r.t. Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 20081:

India has enacted laws to ensure that there is no import of the hazardous wastes from any country to India for disposal. The import of hazardous waste from any country shall be permitted only for the recycling or recovery or reuse.

The Company Secretary shall ensure that a company has complied with the following requirements under the Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2008:

1. The Company generates the hazardous waste in its establishment and engaged in handling of hazardous wastes as specified in the Schedules to the Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2008.

2. The Occupier who shall be properly authorised to handle hazardous wastes, shall take adequate steps for safe and environmentally sound handling of hazardous wastes generated in the establishment.

3. The Occupier shall prepare and submit to the State Pollution Control Board, an Annual Return containing the details specified in Form 4 on or before the 30th day of June for the financial year to which the return relates.

4. The Occupier shall make an application for renewal of authorisation in Form 1, before its expiry to the State Pollution Control Board.

List of Projects Requiring Environmental Clearance from the Central Government 2

The following Projects require Environment Clearance from the Central Government; the Company Secretary shall ensure that the same is taken as required:

Nuclear Power and related projects such as Heavy Water Plants, Nuclear Fuel.

River valley projects including hydel power, major irrigation and their combination including flood control.

Ports, harbours, airports (except minor ports and harbours).

Petroleum refineries including crude and product pipelines.

Chemical fertilizers (nitrogenous and phosphatic other than single super phosphate).

Pesticides (Technical). Petrochemical complexes (Both Olefinic and aromatic) and

Petrochemical intermediates such as DMT, Caprolactam LAB etc. and production of basic plastics such as LLDPE, HDPE, PP, PVC.

Bulk drugs and pharmaceuticals. Exploration for oil and gas and their production,

transportation and storage.

1 https://cpcb.nic.in/rules/2https://www.icsi.edu/media/webmodules/Guidance_note_on_Secretarial_Audit_Release_1.4.pdf



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LESynthetic rubber. Asbestos and asbestos products. Hydrocyanic acid and its derivatives: (a) Primary

metallurgical industries (such as production of Iron and Steel, Aluminium, Copper, Zinc, Lead and Ferro Alloys), (b) Electric arc furnaces (mini steel plants).

Chloralkali industry. Integrated paint complex including manufacture of resins

and basic raw materials required in the manufacture of paints.

Viscose staple fibre and filament yam. Storage batteries integrated with manufacture of oxides of

lead and lead antimony alloys. All tourism projects between 200-500 meters of High

Water Line and at locations with an elevation of more than 1,000 metres with investment of more than Rs. 5 crores.

Thermal Power Plants. Mining Projects (major minerals) with leases more than 5

hectares. Highway Projects.Tarred roads in Himalayan and or Forest areas. Distilleries. Raw Skins and Hides. Pulp, Paper and Newsprint Dyes. Cement. Foundries (individual). Electroplating. Meta amino phenolIndustries which require Industrial Licensing Coal and Lignite

Petroleum (other than crude) and its distillation products.

Distillation and brewing of alcoholic drinks.

Animal fats and oils and their preparations

Cigars and cigarettes of tobacco and manufactured tobacco substitutes.

Asbestos and asbestos-based products.

Plywood, decorative veneers and other wood based products such as particle board, medium density fibre board, and block board.

Leather

Tanned or dressed fur skins.

Paper and Newsprint except bagasse based unit. (i.e. except units based on minimum 75% pulp from agricultural residues, bagasse and other non-conventional raw materials).

Electronic aerospace and defence equipment all types. Industrial explosives including detonating fuses, safety

fuses, gun powder, nitrocellulose and matches, explosives; pyrotechnic products; matches; pyrophoric alloys; certain combustible preparations.

Drugs and Pharmaceuticals (according to Drug Policy) Entertainment electronics (VCRS, colour TVs, CD players,

tape recorders). (iv) List of Polluting Industries: Primary metallurgical producing industries viz.. zinc, lead,

copper, aluminium and steel. Paper, pulp and newsprint. Pesticides / insecticides. Refineries. Fertilizers. Paints. Dyes. Leather tanning. Rayon. Sodium / potassium cyanide. Basic drugs. Foundry. Storage Batteries (lead acid type). Acids / alkalies.Plastics. Rubber - synthetic. Cement. Asbestos. Fermentation industry. Electroplating industry.

CORPORATE SOCIAL RESPONSIBILITY (CSR) AND SUSTAINABILITY

Section 135 of the Companies Act, 2013 makes it mandatory for certain class of companies to constitute a Corporate Social



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LEResponsibility (CSR) Committee of the Board with at least one independent director.

While the Committee has been entrusted to formulate and recommend Corporate Social Responsibility Policy of the company in line with schedule VII of the Act, the Board of directors are required to ensure that company spends in every financial year atleast 2% of the average net profits of the company made during the three immediately preceding financial years in pursuance of its CSR policy.

Where the company fails to spend such amount, the Board is required to specify in its report the reasons for not spending the amount .

The company secretary can play a very significant role in the development of CSR values and policy for an organisation and also in implementation of various other laws / guidelines important from society perspective like environment laws.

FDA, Drugs and Cosmetic Laws, Warehouse Compliance:

For Logistic Companies and E-commerce platforms, complying with the basic requirement of all this applicable laws become very important. Lack of knowledge and experience can put company into huge amount of losses. FDA, Drugs and Cosmetics Laws are not that easy to comply with. Registration process of the Company, Proper storage of food items and medicine in Warehouses, at proper temperature, no distribution activities of expired products, it becomes headache for Compliance Officer to monitor each and every provision to comply with.

Apart from ensuring compliance under various laws by the Company, keeping the environmental laws in mind, a Company Secretary can be of help to the Board in certain crucial areas such as project planning by helping the Board in the following:

� Identification of Project.

� Selection of location for the project and advising on various incentives available.

� Selection of land, search of titles, and getting required approvals for carrying out industrial / commercial activities on such land.

� Advising on size of the project, drawing schedule of implementation and follow up from the stage of conceiving of project up to the commencement of commercial production.

� Advising on expansion and modernization.

SEBI compliances on Business Responsibility and Sustainability Reporting:

SEBI has, on May 10, 2021 issued a Circular containing the format of the Business Responsibility and Sustainability Report (“BRSR”).The BRSR is a notable departure from the existing Business Responsibility Report (“BRR”) and a significant step towards bringing sustainability reporting at par with financial reporting3. This has been done through an amendment to Regulation 34 (2) (f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The BRSR seeks disclosures from listed entities on their performance against the nine principles of the ‘National Guidelines on Responsible Business Conduct’ (NGBRCs) and reporting under each principle is divided into essential and leadership indicators. The essential indicators are required to be reported on a mandatory basis while the reporting of leadership indicators is on a voluntary basis. The SEBI circular says that listed entities should endeavour to report the leadership indictors also.

Filing of the BRSR is mandatory with effect from the financial year 2022-2023, for the top 1000 listed companies (by market capitalization) and shall replace the existing BRR. Filing of BRSR is voluntary for the financial year 2021-22.

The Company Secretary shall ensure that the company is able to, through the BRSR disclosures achieve the purpose of the BRSR i.e. quantitative and standardized disclosures on ESG parameters to enable comparability across companies, sectors and time.

EXPRESSION OF AUDIT LIMITATION

In case, either due to restrictions or circumstantial limitations, necessary information cannot be accessed by the secretarial auditor which may /may not have impact on the report of the Auditor, in such cases, the auditors should mention such limitation in the Secretarial Audit Report.

A dispensation with such an independent secretarial audit could well lead to significant problems for the company and its stakeholders. The risks of non-compliance with these many laws and regulations include failure to adopt proper environment law compliance and policies which are reviewed periodically and if not complied, could give rise to governmental and civil liability. CS

3https://www.sebi.gov.in/legal/circulars/may-2021/business-responsibility-and-sustainability-reporting-by-listed-entities_50096.html

Business Responsibility and Sustainability Report (“BRSR”) is a notable departure from the existing Business Responsibility Report (“BRR”) and a significant step towards bringing sustainability reporting at par with financial reporting. This has been done through an amendment to Regulation 34 (2) (f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company Secretary shall ensure that the company is able to, through the BRSR disclosures achieve the purpose of the BRSR i.e., quantitative, and standardized disclosures on ESG parameters to enable comparability across companies, sectors and time.



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Landmark Judgements of National Green Tribunal (NGT): Strengthening the Environmental Protection Regime in the Country

The infamous ‘Bhopal Gas Tragedy’ and ‘Oleum Gas Leak’ cases had compelled India to evolve a robust mechanism for environmental protection, conservation of natural resources and providing judicial and administrative remedies to the victims of the pollutants and other environmental damage. From the year 1995, many efforts made but not fructified. Lastly NGT formed in the year 2010, and since then through its landmark judgements. it has strengthened the environmental protection regime in the Country.

Pradeep Kumar Ray, FCSCompany SecretaryNew [email protected]

“Environmental Pollution is an incurable disease. It can only be prevented.”

….Barry Commoner (American Great Cellular Biologist)

INTRODUCTION

A lot of pressure had been imposed on the natural sources of the environment due to the expansion of the industries, transportation and increasing urbanisation

and there are pending cases related to the environment in other courts. Moreover, India being a member of the United Nations Conference on Human Environment was called upon to provide very effective, judicial and administrative proceedings and to redress the liabilities regarding National laws for the victims in relation to environmental pollution and damage.

NEED FOR ENVIRONMENTAL COURTS

The need to establish special environmental courts for continuous monitoring and speedy disposal of cases relating to the environment was first emphasized by the Supreme Court of India in 1986 in the Bhopal gas tragedy and the Oleum Gas Leak case. Moving a step forward in June 1992, India during the summit of United Nations Conference on Environment and Development , vowed the participating states to provide judicial and administrative remedies to the victims of the pollutants and other environmental damage.

NATIONAL ENVIRONMENT APPELLATE AUTHORITY (NEAA)

The Parliament passed the National Environmental Tribunal Act, 1995 but it was never implemented. Subsequently, the National Environment Appellate Authority Act, 1997 was enacted under which the National Environment Appellate Authority (NEAA) was set up. There were several problems in its functioning. In 2003 the Law Commission of India emphasized to set up a separate tribunal for environmental cases, Accordingly, the NEAA which was functioning till October 2010 was replaced by the National Green Tribunal (NGT) under the National Green Tribunal Act, 2010.

NATIONAL GREEN TRIBUNAL ACT, 2010

In order to ensure the right to life, and a healthy environment enshrined under Article 21 of the Indian Constitution the National Green Tribunal Act, 2010 came into force on 02 June, 2010 with objectives of expeditious disposal of civil cases in relation to environmental protection and conservation of forests and other natural resources.


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LE NATIONAL GREEN TRIBUNAL (NGT)

NGT is a specialized body set up under the National Green Tribunal Act (2010) for effective and expeditious disposal of cases relating to environmental protection and conservation of forests and other natural resources. With the establishment of the NGT, India became the third country in the world to set up a specialized tribunal environmental for environmental protection, only after Australia and New Zealand, and the first developing country to do so.

The National Green Tribunal is set up to achieve following objectives

� To provide for strict liability which can be imposed after one indulges in environmental damages or accidents related to hazardous substances.

� To provide better relief and compensation with regards to the damages to persons, property and the environment

BENCHES OF THE NGTThere is a Principal Bench of the NGT in New Delhi and four regional benches in Pune (West), Bhopal (Central), Chennai (South) and Kolkata (East). Each Bench has a specified geographical jurisdiction in a region. These are ‘co-equal benches’ i.e. the principal bench is not ‘higher’ in a judicial hierarchy than the other benches. Further, a mechanism for circuit benches is also available.

ORDERS OF THE NGTSection 15 stipulates that the Tribunal may, by an order, provide,-

1. Relief and compensation to the victims of pollution and other environmental damage arising under the enactments specified in the Schedule I

2. For restitution of property damaged;

3. For restitution of the environment for such area or areas, as it may think fit

The relief and compensation and restitution of property and environment referred above shall be in addition to the relief paid or payable under the Public Liability Insurance Act, 1991. To avail any compensation or relief or restitution of property or environment, application shall be made within a period of five years from the date on which the cause for such compensation or relief first arose. Delay of filing may be condoned for a period not exceeding sixty days on sufficient grounds.

POWERS OF NGT

Section 19 of the Act gives the Tribunal powers to regulate its own procedure. Additionally, the Tribunal is not bound by procedure under the Code of Civil Procedure, 1908 or the Indian Evidence Act, 1872 and is guided by principles of natural justice. However, the Tribunal is vested with the powers of a civil court under the Code of Civil Procedure for discharging its functions.

TRIBUNAL TO INVOKE CERTAIN PRINCIPLESAs per section 20, the Tribunal shall, while passing any order or decision or award, apply

� the principles of ‘Sustainable Development,

� the ‘Precautionary’ principle and

� the ‘Polluter Pays’ principle.

In many occasions, the Tribunal has followed the principles of ‘Natural Justice’ and Principles of ‘Circular Economy’.

IMPORTANT LANDMARK JUDGEMENTS OF NGTNGT’s last ten years of journey was too much challenging. In spite of drawbacks, it has been progressive in its approach towards environmental protection in general and the rights of marginalized people in particular. With the passage of time, on different occasions, through its different benches, it has pronounced various landmark judgements fearlessly. It has not only come down heavily against microstructures but has also challenged the big corporate sectors and the central and state governments for not following environmental regulations. These are highlighted herein below:

YEAR 20121. In Prafulla Samantray v. Union of India, POSCO (a

steelmaker company) signed a MoU with the Odisha government to set up steel project. The NGT suspended order and this was considered a radical step in favour of the local communities and forests.

2. In Almitra H. Patel vs. Union of India case, the NGT gave judgment of complete prohibition on open burning of waste on lands, including landfills – regarded as the single biggest landmark case dealing with the issue of solid waste management in India.

3. In Adivasi Majdoor Kisan Ekta Sangthan v. Ministry of Environment and Forests, the petitioners argued that the

Section 19 of the Act gives the Tribunal powers to regulate its own procedure. Additionally, the Tribunal is not bound by procedure under the Code of Civil Procedure, 1908 or the Indian Evidence Act, 1872 and is guided by principles of natural justice. However, the Tribunal is vested with the powers of a civil court under the Code of Civil Procedure for discharging its functions.



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LEenvironmental clearance had been granted to the project without properly conducting a public hearing as stipulated by the EIA Notification 2006. The NGT observed a few insignificant procedural lapses in conducting the public hearing and viewed it as a mockery of a public hearing, one of the essential parts in the process of deciding whether to grant an environmental clearance. It was, in fact, a classic example of violation of the rules and the principles of natural justice. Accordingly, the Tribunal considered it appropriate to declare that the public hearing conducted in the case was invalid.

4. In T. Murugandam v. Ministry of Environment & Forests wherein the importance of proper analysis and collation of data and application of mind was stressed upon by the NGT. Questions of the jurisdiction of the Tribunal have also been fairly recurrent.

YEAR 20131. In Samata v. Union of India, the Tribunal relaxed the

concept of locus standi to allow a wider base of people to approach it with regard to environmental concerns. It was found that in the relevant provisions the term ‘aggrieved persons’ would include not just any person who is likely to be affected, but also an association of persons likely to be affected by such an order and functioning in the field of environment.

2. In the above case, the other issue was whether the public hearing had been conducted if the Environmental Impact Assessment (EIA) report had not been published in the local language. The Tribunal found that there was no such requirement imposed. It mandated the Expert Appraisal Committee to act in light of the public’s larger interests and work to balance developmental and environmental concerns.

3. In Uttarakhand floods case, the Alaknanda Hydro Power Co. Ltd. was ordered to compensate to the petitioner. Here the NGT directly relied on the principle of ‘polluter pays’.

4. In Jeet Singh Kanwar v Union of India case, the petitioners challenged the environment clearance, which was ordered for installing the coal-fired power plant. NGT observed that if that environmental clearance is not resulting in excess environmental degradation then the project involved can be continued. But further, the tribunal gave the award regarding the illegality of the environment clearance due to consequences.

5. In Diversion of forests in the Tara, Parsa and PEKB coal blocks case, the Forest Advisory Committee (FAC) had rejected the proposal in its recommendations to the Central Government. However the latter went against the recommendations and gave its approval. The tribunal scrutinized not only the validity of the Government’s rejection but also the report submitted by the FAC.

YEAR 2014

1. In the K.K Royson case, the NGT emphasized the importance of the principles of ‘precautionary principle’ and ‘sustainable development’. Again there was relaxation

of locus standi requirements. It held that where the matter concerned the ecology and the environment, everybody was directly or indirectly affected and thus the right to initiate action could not be limited only to persons who were actually aggrieved. Other issues that the Court examined in this case were that of an unqualified agency giving approval and of the requirements of conducting public hearing according to the EIA Notification, 2006.

2. In Vardaman Kaushik v Union of India case, the Tribunal observed the problem of a growing population in Delhi and ordered to set up an action plan and directed that

� Vehicles more than 15 years old not be allowed to ply or be parked on the roads;

� Burning plastics and other like materials be prohibited; � A web portal and a special task force be created; � Sufficient space for two way conveyance be left on all

market-roads in Delhi; � Cycle tracks be constructed; that overloaded trucks

and defunct buses not be allowed to ply; � Air purifiers and automatic censors be installed in

appropriate locations. � A fine of Rs. 1000 be levied on all cars parked on

metalled roads and that multi-level parking be construed in appropriate areas.

3. In Braj Foundation v Govt. of UP, the petitioner claimed that that the government should make the MOU for the forestation of Vrindavan and the government tried to show the issue was just an invitation to treat instead of a contract, the NGT gave guidelines to the government that it is the duty of it to promote afforestation. One of the significant aim was to create a 100-meter long belt on both the sides of Braj Parikrama route as ‘No Development Zone’ where no new Ashrams, Hotels, Buildings and Industrial Units will be permitted except shelters for pilgrims to protect them from the rains, scorching sun and cold weather.

4. In Kalpavriksh v. Union of India, the Tribunal ruled that its jurisdiction extends to all civil cases which raise the substantial question of environment and arise from the implementation of the Acts stated in Schedule I of the NGT Act. For this purpose the term ‘implementation’ must neither be too constrained nor too expansive nor keep in view all the Notifications, Rules and Regulations promulgated under the Act.

5. The Tribunal at its own motion against the Ministry of Environment & Forests held that wildlife is a part of environment and any action that causes damage or is likely to cause damage to wildlife, could not be excluded from the purview of the tribunal. The Tribunal has also given detailed directions in decisions involving contamination and pollution of river waters.

6. In Krishan Kant Singh v. National Ganga River Basin Authority the Tribunal gave a range of time bound and specific directions to the polluting industrial units as well as the Municipal authorities who were asked to allow the former to comply with directions.



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LE7. In M.P. Patil v. Union of India, the Tribunal examined

the details of the basis on which environmental clearance obtained by the NTPC. It was found that NTPC was guilty of misrepresenting facts to obtain the EC. The tribunal stressed on the importance of a Rehabilitation and Resettlement Policy that adequately took into consideration the needs of those affected by the project. In determining who would fall within the ambit of such persons, the tribunal chose an expansive definition instead of restricting it only to the land owners in the region. Finally, it was reiterated that the burden of proving that the proposed project was in consonance with goals of sustainable development was on the party proposing the project.

8. The Tribunal has banned petrol vehicles over 15 years old

YEAR 20151. The NGT ordered that all diesel vehicles over 10 years

old will not be permitted to ply in Delhi-NCR. It passed strict orders against any illegal construction activity that emanated dust in the air. The tribunal also gave 20 hours to the government and the agencies concerned to ensure that all entry points of Delhi have units to check pollution levels, weight and age of any vehicle entering Delhi.

2. In Manoj Misra v. Union of India, the Tribunal gave a set of twenty eight directions, ranging from prohibition on dumping debris to restricting silviculture and floriculture activities, in the interest of protecting and restoring the River Yamuna.

YEAR 20171. The Art of Living Festival on Yamuna Food Plain was

declared violating the environmental norms, the NGT panel imposed a penalty of Rs. 5 Crore.

2. In another case, the NGT had imposed an interim ban on plastic bags of less than 50-micron thickness in Delhi because these were causing animal deaths, clogging sewers and harming the environment.

YEAR 20191. Major Railway Stations Having Potential Of Causing

Pollution Are Not Beyond Environmental Laws Of Land. (Saloni Singh & Anr. vs. Union of India & Ors. Application No.141/2014)

2. The NGT by an order dated 29.11.2019 directed all State and Union Territories to ensure that 100 percent in-situ remediation of sewage, by March 31, 2020, of the water which flows in rivers across India. (Application no. 673/2018 on News item published in “The Hindu” titled “More river stretches are now critically polluted: CPCB”)

3: To ensure that political parties don’t use plastic banners/hoardings during elections, the NGT has directed the Election Commission of India, Chief Electoral Officers of all States, Union Territories and Central Pollution Control Board to monitor the advisories issued to political parties asking them to avoid use of plastic during elections particularly banner/hoardings. W. Edwin Willson vs.

Union of India & Ors (Application No. 32/2019)

4. The NGT has directed the states and Union Territories, to install within one year, assessed Ambient Air Quality Monitoring Stations (AAQMS), which would be connected to a National Portal, connected to server of Central Pollution Control Board (CPCB), and data will be displayed on real time basis. (Dr. Gautam Ghosh vs. State of West Bengal & Ors.)

5. Passing order against water pollution by Tanneries at Jajmau, Kanpur, Uttar Pradesh and water pollution at Rania, Kanpur Dehat & Rakhi Mandi, Kanpur Nagar, Uttar Pradesh, the NGT directed UP Government to Pay RS 10 Crore as environmental compensation for causing damage to the environment by permitting discharge of untreated sewage, containing toxic Chromium, into ‘River Ganga’ (Application No. 985/2019 and 986/2019)

6. The NGT held that Industrial Development Cannot be done at on the graves of human beings and at the cost of air and water quality and directed the Haryana government to shorten the period of inspection of polluting factories and the Central Pollution Control Board (CPCB) to follow the same in19 other states, with similar policy, regarding inspections. (Application No. 639/2018 in Shailesh Singh vs. State of Haryana & Ors.)

7. Upon its own motion against State of Karnataka, the NGT sought explanation from Karnataka officials and warns for failing to protect three highly contaminated lakes, in Bengaluru city from contamination (Application No. 125/2017)

8. Ground water is scarce and not unlimited. There is no guaranteed right to continue to draw ground water for commercial purposes without any permission,” the NGT observed while dismissing an appeal in M/s India Glycols Limited vs. Central Ground Water Authority & Ors.

9. The NGT directed the Central Pollution Control Board (CPCB) to prepare new environment plan for country (Shree Nath Sharma vs. Union of India & Ors.)

10. The NGT directs CPCB to issue Guidelines on management of Waste Tyres and Restricted their Import (Social Action for Forest & Environment (SAFE) vs. Union of India & Ors.)

11. Even if consent to operate is not required, action must be taken when pollution is caused. The NGT directed the Uttar Pradesh Pollution Control Board, to stop polluting activities and recover compensation on ‘polluter pays’ principle from, poultry farms being illegally operated in Shamli district (Application No. 501/2019 Sundr vs. Ministry of Environment & Forest & Ors.)

12. The NGT directed the CPCB (Central Pollution Control Board) toplace a review and ‘action taken’ report for ensuring enforcement of E-Waste (Management) Rules, 2016 and the Environment (Protection) Act, 1986 (‘EW Rules’) by 31st January, 2020 (Application No. 512/2018 Shailesh Singh vs. State of UP & Ors.)

13. The NGT Directed Pollution Board to provide a report and lay down appropriate guidelines for the



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management and monitoring of environmental norms by dairies in India by undertaking a study in that matter (Application No. 46/2018 and 1083/2018 Nuggehalli Jayasimha Vs Government of NCT of Delhi and Residents of C2 Block Aya Nagar vs. Govt. of NCT of Delhi)

14. Violators of law cannot be allowed to have a free run at the core of environment and public health. Inaction by the statutory authorities is at the cost of Rule of Law, which is the mandate of the Constitution and is necessary for meaningful enforcement of legitimate constitutional rights of citizens and basic duty of a welfare State under the Constitution.” (Application No. 1038/2018 on news item published in “The Asian Age” titled “CPCB to rank industrial units on pollution levels”)

15. The NGT has come down heavily on the Central Government and State Governments of Punjab, Haryana and Uttar Pradesh for failing to stop crop residue burning, leading to Air Pollution in the NCR region. (Application No. 666/2018 Smt. Ganga Lalwani vs. Union of India & Ors.)

YEAR 20201. In Assam Oil Well Fire case, NGT directed Oil India

Limited to deposit Rs 25 Crores in connection to a massive fire which exploded from OIL’s Baghjan well and constituted Committee for probe.

2. When the news of a pregnant wild elephant allegedly killed in Silent Valley Forest in Kerala had generated huge outrage, the NGT took cognizance and registered a suo motu case.

3. In chemical gas leak case at Vizag in Andhra Pradesh, the NGT took suo motu cognizance against South Korean company LG Polymers, the environment law defaulters and held that it has the power and jurisdiction to institute suo moto proceedings against environment law defaulters. Such actions against defaulters are not illegal.

4. The NGT has decided to consider measures for improving the air quality in as many as 18 States and Union Territories, in addition to Delhi NCR and expanded the scope of proceedings in a batch of petitions seeking remedial action against pollution by use of fire crackers.

YEAR 20211. In January, 2021 the NGT has taken following decisions:

(a) It issued directions for the implementation of E-Waste (Management) Rules, 2016 after observing that there were huge gaps in the compliance by the State Pollution Control Boards and local authorities, breaching their obligation of of ensuring pollution free environment.

(b) It observed that plastic pens are covered under the meaning of “plastic” as provided in Rule 3(o) of



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2. In March, 2021 the NGT has taken following decisions:

(a) In Manoj Mishra v. Union of India & others, upon application by South Delhi Municipal Corporation (SDMC), the NGT held that DJB has to ensure supply of treated water with adequate pressure and wherever piped supply is not available, to supply such water by tankers. The DJB is in the process of providing pipe network from STP to the parks. But till such pipelines are laid, there is need for tankers for supply of water to 5357 parks.

(b) The NGT has asked Uttar Pradesh Chief Secretary to comply with Tribunal’s previous orders to evolve mechanism to deal with discharge of untreated sewage, on recommendations of the Yamuna Monitoring Committee (YMC). The order has been issued in a plea filed seeking directions to take remedial action to prevent untreated sewage or effluent.

(c) The NGT has directed the that the Environmental Clearance (EC) granted to Uppur Thermal power plant is liable to be kept in abeyance till fresh appraisal is conducted by the government. It has directed suspension of work till a revised Environmental Clearance received.

FIVE LANDMARK NGT JUDGMENTS THAT CREATED HISTORYWithin the short span of 10 years, the Tribunal has given some landmark judgments that changed the course of environmental law and environmental protection in India. These are briefly cited as follows:1. Even a Foreign National Can Approach the NGT: Any

person can file a proceeding related to the environmental dispute, Ms. Betty’s application is maintainable without regards to the question of her nationality (Ms. Betty C. Alvares vs. The State of Goa and Ors. Order dated 14 February, 2014)

2. Applying the Principles of ‘Circular Economy’: In Almitra H. Patel & Ors. vs. Union of India and Ors. [order dated 15 February, 2000] the Tribunal noted the requirement of conversion of this waste into a source of power and fuel to be used for society’s benefit, taking into consideration the Principles of ‘Circular Economy’ and issued over 25 directions besides the following:

a. Every state and UT to implement the Solid Waste Management Rules, 2016 immediately and prepare an action plan in terms of the Rules within 4 weeks.

b. The Central Government, state governments, local bodies and all citizens to perform their respective obligations under the Rules without any delay.

c. Ensure proper segregation before processing of waste in energy plants.

d. The provision of buffer zones around plants and landfills as required become mandatory.

e. Absolute segregation has been made mandatory in waste to energy plants and landfills should be used for depositing inert waste only and are subject to bio-stabilization within 6 months.

f. A complete prohibition on open burning of waste on lands, including at landfills.

3. Invoking ‘No Fault Liability’ principle under Section 17(3) of the National Green Tribunal Act, 2010

The Tribunal held that damage to the property as alleged by the applicants was incurred as a result of flood water, which brought along soil and muck, entering residential premises. Although the 2013 Uttarakhand floods were the result of a cloud burst, the damage caused to the residential area was not the result of Act of God. Invoking the principle ‘No Fault Liability’ is justified, which made the Respondent No. 1 liable to pay the claimed compensation along with Rs. 1 lakh each to the applicants along with costs. (Srinagar Bandh Aapda Sangharsh Samiti & Anr. vs. Alaknanda Hydro Power Co. Ltd. & Ors. Order dated 10 January, 2018)

4. The ‘Polluter Pays’ principle invoked

In Samit Mehta vs. Union of India and Ors. order dated 23.08.2016, the case was held to involve questions of public importance and significance of environmental jurisprudence. The Tribunal found that negligence could be attributed to Respondents 5, 6, 7 and 11 and elements of mens rea were to be found. It directed Respondents 5, 7 and 11 to pay environmental compensation to the tune of Rs. 100 crores to the Ministry of Shipping, GOI, which is one of the biggest compensation amounts ever paid by a private entity against environmental damage done. Further, Respondent 6 was asked to pay a compensation of Rs. 5 crores.

5. Victory for Birds, Loss for Massive Hydro Power Project

In Save Mon Region Federation and Ors. vs. Union of India and Ors. Order dated 14 March, 2013, the Tribunal very proactively suspended the Environmental Clearance granted to the Project. The Tribunal Directed the EAC to make a fresh appraisal of the proposal for environmental clearance grant and asked the Ministry of Environment and Forest to make a separate study on the protection of the said bird.

CONCLUSION

American Biologist Sylvia Earle says, “It is the worst of times, but it is like best of times because we still have a chance”. We have the chance to make the environment a better place to live. In this scenario, the Tribunal must be given more autonomy and its scope be widen for effective protection of environment in balance with human developmental activities. More teeth be provided to it for speedy redressal of environmental grievances. More professionals and lawyers should be encouraged to specialize in environmental law and assist the tribunal to provide justice in the matters related to the environment. A time is awaited when our environment will be given most importance through the medium of law pertaining to it. CS



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“The Earth is what we all have in common.” - Wendell Berry

INTRODUCTION

T he Thirteenth Goal of the seventeen Sustainable Development Goals (SDGs), officially known as ‘Transforming our world: the 2030 Agenda for Sustainable

Development’, that all United Nations Member States have agreed to achieve by 2030, is ‘Climate Action’. Global warming, excessive carbon dioxide levels in the atmosphere, extreme weather changes etc. are all premonitions of disaster waiting to strike the planet and disrupt normal life as we know it. To add to the deteriorating climate change situation, the persisting Covid-19 pandemic has accelerated the downward spiral of climate emergency and economic slowdown.

Environmental Protection is extremely significant in today’s age of climate change and in the wake of the Covid-19 pandemic, it is a substantial starting point to initiate the process of getting the economy back on track by ensuring complete adherence to the environmental laws. Environmental legislation and resulting environmental agreements has grown internationally, a significant one being the United Nations Framework Convention on Climate Change (UNFCCC), signed by most countries in 1992 to address the danger of global climate change thus placing a heavier burden on nations with respect to environment protection. India too ratified the UNFCCC on 1st November 1993. The Earth needs to be protected if the ecology and economy are to prosper. Period.

Environmental Regulation - Awareness and Action

Geetika Garella, ACS Gopal Chopra & AssociatesNew [email protected]

“Vasudhaiva Kutumbakam” the Sanskrit phrase of the ancient Hindu text “Maha Upanishad”, translates to mean “the world is one family”. This phrase best underlines the rationale of paying utmost attention to environment protection and conservation. In turn, the environmental regulation ensures that the environment prospers and translates into prosperity for the world as a whole. Herein lies the importance of Awareness of Environmental Regulation and Action in regard to it.

ENVIRONMENTAL REGULATION IN INDIA

The importance of the Environment and the need for its protection is mentioned even in the age old Hindu scriptures and texts. Environment Protection is enshrined in the Constitution of India, the fundamental and supreme law of the country, as a duty of both the Government and the people of the nation. Article 48A of the Constitution of India lays down that it is the duty of the Government to protect and improve the environment and Article 51A(g) casts a fundamental duty on every citizen of India to protect and improve the natural environment.

‘Environment’ includes in its ambit not only protection of environment, but also preservation and conservation of flora, fauna, forests and wildlife and prevention and control of pollution. Therefore, Environmental Regulation in India has been a combination of statutes, common law, treaties, conventions, regulations and policies pertaining to various aspects of the Environment. Additionally, landmark judgements pertaining to environmental issues in India have set judicial precedents for the same.

Environment being a large subject and including various sub-subjects in its gamut, a number of organisations, authorities, tribunals and boards work together to administer and regulate the environment sector. The Ministry of Environment, Forest and Climate Change (MoEFCC) of the Government is the Ministry responsible for all Environmental matters in the country and it also serves as the nodal agency in the country for all international matters pertaining to the Environment. The Central Pollution Control Board, Wildlife Crime Control Bureau, National Afforestation and Eco-Development Board, the National Biodiversity Authority, the National Green Tribunal and many more organs of the Government all work together and cater to safety and security of different aspect of the environment.

The present legislative framework on environment broadly consists of the umbrella legislation The Environment (Protection) Act 1986; The Water (Prevention and Control of Pollution) Act, 1974; The Air (Prevention and Control of Pollution) Act, 1981; The Biological Diversity Act, 2002; The Indian Forest Act, 1927; The Forest (Conservation) Act 1980 and The Wildlife (Protection) Act 1972. There are several other enactments, which complement the provisions of these basic enactments. Moreover, apart from the legislative measures, various National Policies also guide the Environment sector, for e.g. National Conservation Strategy and Policy Statement on Environment and Development, 1992; National Forest Policy,1988; Policy Statement on Abatement of Pollution, 1992 and National Environment Policy, 2006.


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It was the United Nation’s first major conference on international environment issues viz. ‘United Nations Conference on the Human Environment (UNCHE)’, held at Stockholm, Sweden in June 1972 which led to the birth of India’s Environment (Protection) Act 1986 (EPA 1986). India participated in the UNCHE and thereafter passed the EPA 1986, ‘an act to provide for the protection and improvement of environment and for matters connected therewith’.

The EPA 1986 and the rules made thereunder viz. the Environment Protection Rules 1986 (EPR 1986) came into force on 19th November 1986. Although the EPA 1986 was a small Act comprising of just four Chapters and twenty-six Sections, however, it made a tremendous change in the environment protection scenario in India by giving powers to the Central Government to plan and execute nationwide pollution control programs; to lay down standards for environment quality and for emission/discharge of environmental pollutants; to restrict areas of operations for industries; to lay down procedures and safeguards for prevention of accidents and for handling of hazardous substances; to carry out examinations, inspections and investigations for prevention, control and abatement of pollution. In view of this environmental standards and emission standards are in place for various industries. The EPR 1986 lay down the procedures for setting standards of emission or discharge of environment pollutants; the instances when Government can prohibit and restrict location of industries in certain areas; procedure for taking samples; environmental laboratories and their functions etc.

As per section 2(e) of the EPA 1986, ‘Hazardous substance’ means ‘any substance or preparation which, by reason of its chemical or physio-chemical properties or handling, is liable to cause harm to human beings, other living creatures, plants, micro-organism, property or the environment’. Management of hazardous substances involves rules and regulations pertaining to management of hazardous waste, e-Waste, solid waste, plastic waste, bio-medical waste, construction & demolition waste, batteries waste; fly ash utilization; chemical safety etc.

Accidents involving hazardous substances and insurance coverage for such is provided under the Public Liability Insurance Act, 1991 (PLIA 1991). Where death or injury to

a person (other than workman) or damage to any property has resulted from an accident, the owner shall be liable to give relief for such injury, death or damage. The Act applies to all owners associated with the manufacture, processing, treatment, package, storage, transportation by vehicle, use, collection, destruction, conversion, offering for sale, transfer etc. of hazardous substances.

ENVIRONMENTAL IMPACT ASSESSMENT

Environmental Impact Assessment (EIA), as the name suggests, is an assessment of the impact of an activity on the environment. The significance of EIA first came to prominence when it was stated as Principle 17 in the Rio Declaration on Environment & Development, the resultant document of the United Nations Conference on Environment and Development: “Environmental impact assessment, as a national instrument, shall be undertaken for proposed activities that are likely to have a significant adverse impact on the environment and are subject to a decision of a competent national authority”.

Vide EIA Notification No. S.O. 60(E) dated 27th January, 1994, environmental clearance became mandatory for projects listed in Schedule I of the Notification. Thereafter, a new EIA notification No. S.O. 1533 (E) dated 14th September, 2006 issued in supersession of the 1994 notification mandated prior environmental clearance from Central Government or the State Environment Impact Assessment Authority (SEIAA), duly constituted by the Central Government, as the case may be, for the following types of projects:

“(i) All new projects or activities listed in the Schedule to this notification;

(ii) Expansion and modernization of existing projects or activities listed in the Schedule to this notification with addition of capacity beyond the limits specified for the concerned sector, that is, projects or activities which cross the threshold limits given in the Schedule, after expansion or modernization;

(iii) Any change in product - mix in an existing manufacturing unit included in Schedule beyond the specified range”.

Projects listed in the Schedule of the above notification include various projects such as mining of minerals, river

Environmental Protection is extremely significant in today’s age of climate change and in the wake of the Covid-19 pandemic, it is a substantial starting point to initiate the process of getting the economy back on track by ensuring complete adherence to the environmental laws.



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LEvalley projects, thermal power plants, nuclear power projects and processing of nuclear fuel, petroleum refining industry, chemical fertilizers, physical infrastructure (highway, ports, harbours and airports etc.), building and construction projects etc. All projects and activities are broadly categorized in to two categories - Category A and Category B, based on their potential impact on the environment. Projects require prior environmental clearance, depending on their placement in the Category in the Schedule to the notification, either from the Central Government on the recommendations of an Expert Appraisal Committee (EAC) or from the State/Union territory Environment Impact Assessment Authority (SEIAA) which bases its decision on the recommendations of a State or Union territory level Expert Appraisal Committee (SEAC).

The stages in the environmental clearance process will vary depending on the category of the project in the Schedule to the Notification. Projects in Category A require mandatory prior environmental clearance from the Central Government. Projects in Category B undergo screening process and are classified as Category B1 projects (Mandatorily requiring EIA Report) and Category B2 projects (Not requiring EIA Report).

In general, the following aspects are involved in the EIA process: (i) Screening to scrutinise an application seeking prior environmental clearance; (ii) Scoping to determine detailed terms of reference addressing all relevant environmental concerns for the preparation of EIA Report; (iii) Public Consultation whereby concerns of persons who have a stake in the possible environmental impacts of the project or activity are ascertained; (iv) Appraisal viz. detailed scrutiny by the EAC or the SEAC.

Apart from preparation and submission of detailed EIA Report and Environment Management Plan (EMP) for a project, appearance before the concerned EAC or SEAC may also be required.

COASTAL REGULATION ZONES

Vide Notification No. S.O 114 (E) dated 19th February, 1991, the Central Government declared coastal stretches as Coastal Regulation Zone (CRZ) and restrictions were imposed on the setting up of industries and expansion, operations and processes of the industries in these Zones. Thereafter Notification S.O 19(E) dated 6th January 2011, was issued in supersession of the 1991 Notification with respect to CRZ.

Many activities became prohibited or regulated in CRZ viz. discharge of untreated wastes and effluents; dumping of city or town waste; dumping ash or any other waste from thermal power stations; land reclamation, bunding or disturbing the natural course of sea water; mining activities; harvesting or drawal of ground water; construction activities etc.

For the purpose of monitoring and enforcement, ‘Coastal Zone Management Authority’ (CZMA) has been constituted in various states. Projects requiring CRZ clearance need to apply to the concerned State or Union Territory CZMA.

POLLUTION CONTROL

Pollution in India is becoming a major cause of concern and coupled with the rising population, it is wreaking havoc

on the ecology of the nation. Legislations contain stringent provisions for control of all types of pollution – air, water, noise, industrial, vehicular, hazardous waste, radioactive waste, The Ministry of Environment, Forest and Climate Change frames and notifies standards for emissions or discharge of environmental pollutants viz. air pollutants, water pollutants and noise limits, from industries, operations or processes.

Actions for control of air pollution is undertaken under various provisions of Air (Prevention and Control of Pollution) Act, 1981 and the Environment (Protection) Act, 1986. The Government may be notification declare any area as pollution control area and place restrictions on establishment and operation of industries in such air pollution control area without previous consent. Under section 2(a) of Air (Prevention and Control of Pollution) Act, 1981 noise is defined as air pollutant. As per the Noise Pollution (Regulation and Control) Rules, 2000, restrictions can be placed on the use of loud speakers/public address system, use of horns, sound emitting construction equipment and bursting of fire crackers. The Rules also lay down the Ambient Air Quality Standards in Respect of Noise.

The Water (Prevention and Control of Pollution) Act, 1974 is the basic legislation to control water pollution. The Act prohibits the discharge of pollutants into water bodies beyond a given standard, and lays down penalties for non-compliance. The Act prohibits poisonous, noxious or polluting matters, sewage or trade effluent being disposed of in streams, well, sewer or on land.

Complementing the above legislations, the Atomic Energy Act 1982 deals with radioactive waste and the Motor Vehicles Act 1988 deals with the vehicular traffic etc. Some aspects of vehicle emission have also been specified in EPA 1986.

The Central Pollution Control Board (CPCB) established under the Water (Prevention and Control of pollution) Act, 1974, is the apex organisation for pollution control. While performing the functions as laid down under The Water (Prevention & Control of Pollution) Act, 1974, and The Air (Prevention and Control of Pollution) Act, 1981, the CPCB also has a wide scope of activities which it performs under the Environment (Protection) Act 1986. It also co-ordinates the activities of the State Pollution Control Boards.

Various National programs, schemes and measures are launched by the Government from time to time to tackle pollution viz. Abatement of Pollution Scheme; Common Effluent Treatment Plant Scheme; National Clean Air Program (NCAP) in January 2019; A Commission for Air Quality Management in NCR and adjoining areas set up in 2020 etc.

BIODIVERSITY, FOREST CONSERVATION AND WILDLIFE

Forests are the lifeline of the planet and they provide various environmental services. India’s legislative framework for Forestry sector comprises of acts, rules and regulations for the same, the principal ones being The Indian Forest Act 1927, The Forest (Conservation) Act 1980 and The Wildlife (Protection) Act 1972. Policy framework for the same includes The Wildlife Conservation Strategy 2002 and The National Forest Policy 1988, the principal aim of which is to ensure environmental stability and maintenance of ecological balance.



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LEThe Indian Forest Act, 1927 consolidates the law relating to forests, the transit of forest-produce and the duty leviable on timber and other forest-produce. Under the Act, the State government may also constitute any land as a ‘reserved forest’, ‘village forest’ or ‘protected forest’ and do certain actions with respect to such forests.

The Forest (Conservation) Act, 1980 which came into force w.e.f. October 25, 1980, makes prior approval of Central government necessary for dereservation of reserved forests and for diversion of forest land for the non-forestry purposes. Despite being a small Act of just five sections, it has succeeded in controlling the indiscriminate use of forest land.

The National Compensatory Afforestation Fund Management and Planning Authority (National Authority), which came into force on 30th September, 2018, manages and utilises the Fund created at the National level under the public account of India, for the purpose of the Compensatory Afforestation Fund (CAF) Act, 2016.

The Wildlife (Protection) Act, 1972 is an Act enacted for protection of wild animals, birds and plants and for connected matters. The Act prohibits hunting of wild animals unless otherwise permitted; grants protection to specified plants, empowers the Government to declare areas as a wildlife sanctuary, national park or closed area and enforce a ban on carrying out any industrial activity inside these areas etc.

India’s Biological Diversity Act, 2002 was a result of the Convention on Biological Diversity (CBD), a multilateral treaty, entered into force on 29 December 1993. The Act was enacted for the purpose of conservation of biological diversity, sustainable use of its components and fair and equitable sharing of the benefits arising out of the use of biological resources, Institutional mechanism of National Biodiversity Authority (NBA), State Biodiversity Boards (SBBs) and Biodiversity Management Committees (BMCs) was created for the implementation of the Act.

NATIONAL GREEN TRIBUNAL

The National Green Tribunal (NGT) was established on 18th October, 2010 under the National Green Tribunal Act, 2010 (NGT Act 2010) “for effective and expeditious disposal of cases relating to environmental protection and conservation of forests and other natural resources including enforcement of any legal right relating to environment and giving relief and compensation for damages to persons and property and for matters connected therewith or incidental thereto.”

Vide Notification F. No. 17(4)2010-PL/NGT(Vol.IV) dated 10th August 2017, The Tribunal has five places of sitting viz., the Principal Bench at New Delhi and Zonal Benches at Pune, Kolkata, Bhopal and Chennai. The National Green Tribunal (Practices and Procedure) Rules 2011 lay down the procedural aspects with respect to filing applications and appeals at the National Green Tribunal.

Under Section 14(1) of the NGT Act, 2010 the Tribunal shall have the jurisdiction over all civil cases where a substantial question relating to environment (including enforcement of

any legal right relating to environment), is involved and such question arises out of the implementation of the enactments specified in Schedule I to the Act. The Tribunal also has appellate jurisdiction under section 16 of the NGT Act, 2010.

The enactments specified in Schedule I to the NGT Act 2010 include: The Water (Prevention and Control of Pollution) Act, 1974; The Forest (Conservation) Act 1980; The Air (Prevention and Control of Pollution) Act 1981; The Environment (Protection) Act 1986; The Public Liability Insurance Act 1991; The Biological Diversity Act 2002.

The NGT may provide relief, compensation and restitution, by an order, as follows:

(a) relief and compensation to the victims of pollution and other environmental damage arising under the enactments specified in the Schedule I to the NGT Act 2010 (including accident occurring while handling any hazardous substance);

(b) for restitution of property damaged;

(c) for restitution of the environment for such area or areas, as the Tribunal may think fit.

CONCLUSION

The Company Secretary is the transformative solutions provider who can handhold communities, corporations, individuals, and governments to recognise the environment regulation and take the appropriate actions for the fulfilment of the same so as to live up to the United Nations 2021 World Environment Day’s theme “Generation Restoration” in true letter and spirit. CS

BIBLIOGRAPHY :a. Ministry of Environment, Forest and Climate Change

http://moef.gov.inb. Central Pollution Control Board http://www.cpcb.nic.inc. United Nations Framework Convention on Climate

Change https://unfccc.int/d. National Green Tribunal http://www.greentribunal.gov.in/

The Company Secretary is the transformative solutions provider who can handhold communities, corporations, individuals, and governments to recognise the environment regulation and take the appropriate actions for the fulfilment of the same so as to live up to the United Nations 2021 World Environment Day’s theme “Generation Restoration” in true letter and spirit.



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1. INTRODUCTION – AN ANALYSIS ON CASES RELATING TO INDIAN WOMEN WORKERS

H uman rights are women’s rights and women’s rights are human rights. Let us not forget among those rights are the right to speak freely and the rights to be heard –

Hillary Clinton

Establishing women’s right with empowerment is one of the most important factor that has been discussed in developing countries. A country’s empirical results in protection of women’s right is achieved by the content of education, economic participation of women, anti-poverty and economic opportunity available for women, which increases their empowerment. The essential objective of women empowerment and right is to fully engage them in economic life and achieve sustainable growth for the betterment of the nation. By providing basic facilities to women with education and training the process of protecting women’s right is established. A recent survey shows that women are 31.43% more empowered in urban regions. An unsafe workplace can lead to general impairment of women employee’s psychological well-being and reduce productivity. In recent times workplaces witnessed number of instances of women harassment leading to higher employee turnover rates. A good statute with stringent action makes workplaces safer, removes the fear and discomfort of employees, increases employee satisfaction thereby reduces employee turnover and saves corporates from

POSH AT WORKPLACE – Its Impact and Influence in Corporates

Krish Narayanan, FCSManagement Consultant [email protected]

The need of hour is to protect the Modesty, Equality, Dignity, Brevity, Universality, Safety (MEDBUS) of women and to redefine the women empowerment and right as responsible citizens of this country. POSH Act brings together the employers, governments and other institutions in combating any discrimination/harassment of women at their work place with redressal mechanism. This act empowers the government to take all measures including constitution of Committees and legal action on the offender and to act on the information available. The accuracy and intelligence of women and good work culture resulting in their performance, value addition and development of the organisation should be well taken care of. The achievement is reached by all embracing the religion of friendship through good conduct and behaviour in the workplace particularly educating the younger generation in the positive strides of the development.

costs associated with sexual harassment. The international organisations like ILO, UNIFEM and CEDEW are working hard to define the circumstances and factors of harassment and the measures to thwart the same in the larger interests of women empowerment and right to freedom of working.

In India, the early developments in the law on prohibition of sexual harassment at workplace, there was no statutory remedy that directly addressed workplace sexual harassment except under Indian Penal Code, 1860. The Section 354 (Outraging the modesty of a woman) and Section 509 (Insulting the modesty of a woman) of Indian Penal Code was used for sexual harassment cases. Women who were sexually harassed at the workplace had to face hardships even in filing a complaint with police authorities to get justice.

The relevant Indian Penal Code had been tested in the case of Rupan Deol Bajaj vs. K.P.S. Gill (1995), where a senior IAS officer was sexually harassed by a superior officer and the recourse to the limited provisions of the IPC under Section 354 and Section 509 was not found sufficient by the High Court. This gap in the law was very apparent and the need for further reforms on sexual harassment was obvious. It was in the light of prevailing instances the Supreme Court of India set aside the judgement in the Rupan case.

Similarly, Bhanwari Devi case (1992), a dalit woman who was a social women employed with the rural development programme of the Government of Rajasthan was gang raped. This case highlighted the extent of sexual harassment at workplace which warrants legal remedy on such incidents. It has revealed the hazards that working women face in the workplace and struck a chord with strong legal framework to curb such incidents. The Supreme Court issued directions to the Union of India for a law based on framed guidelines to combat sexual harassment at workplace. This was followed by vishaka guidelines as outcome of another case by the Apex court.

India is labour (women) intensive country and it is mandatory on the part of our governments as employment generators and safeguarding the labour force particularly women labour from exploitation, intimidation and other evils of the society. The following are the data on labour force engaged from periodic labour force survey (PLFS-2018-19) conducted by Union of India


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Industry segment Percentage of workers Rural Women Urban WomenAgriculture 71.1 7.8Mining & Quarrying 0.2 0.2manufacturing 9 24.5Electricity, Water etc 0.2 0.5Construction 6 4.1Trade, Hotel and Restaurant

4.2 13.8

Transport, Storage & Communication

0.2 3.6

Other services 9.1 45.5Total 100 100(Min. of Statistics - AR)

2. EVOLUTION AND FACETS OF POSH ACT

The evolution of protection of women from sexual harassment starts in the early 1820. The Convention on the Elimination of all Forms of Discrimination Against Women (CEDAW) is an international treaty adopted in 1979, passed an international bill of rights for women, it was later ratified by 189 member-states to determine the modalities in treating the sexual harassment of women at work place. This was followed by UN initiative under CEDAW and landmark judgements of the Honourable Supreme Court of India which directed the avenue for dynamic legislation passed into an historic statute called POSH Act, 2013.

The Supreme Court of India, as guardian of our constitution interpret the legislature in favour of women rights and appeasement delivered landmark judgements setting a milestone in women empowerment. The judiciary in India on the high esteem as watch dog of democracy to support the

other two wings in the policy decision making. In Vishaka Vs State of Rajasthan (1997) case, the SCI issued guidelines to the central government based on facts to pass an enactment to prohibit sexual harassment at workplace. This judgement commissioned that employer is under onus to ensure safety measures for women employees with conducive working conditions.

The central government has enacted the Sexual Harassment of women at workplace (Prevention, Prohibition and Redressal) Act (the PoSH Act), 2013 to create a safe and secure workplace, free from sexual harassment, for women. This statute is based on Vishaka guidelines, applicable to women working both in organised and unorganised sectors which establishes a redressal mechanism for the disposal of their complaints against harassment. It defines “sexual harassment at the workplace” in a comprehensive manner, to cover circumstances of implied or explicit promise or threat to a woman’s employment prospects or creation of hostile work environment or humiliating treatment, which affects health or safety of the aggrieved women.

The Government of India has also provided the ‘Sexual Harassment electronic Box’ (SHe-Box), which is a ‘single-window’ access to every female worker, to register complaints around sexual harassment. The complaints submitted to ‘SHe-Box’ are directly routed to the concerned authorities for further action which will enable aggrieved women subjected to sexual harassment to access the SHe-Box to record their complaints. This will work in parallel to PoSH act having a positive impact on employees and on the organization, in fostering an environment to weed out the sexual harassment of women in the workplace.

The PoSH Act has the objective of making workplaces safer for women by preventing, prohibiting and redressing acts of sexual harassment at the workplace. This act was passed with the legal binding to prevent women against sexual harassment at the workplace. The aim is to redress the exploitation of women and sexual harassment at workplace under the sections of the act, with mandatory procedure for treating such offence by the employer failing which attract penalties and fines as prescribed. The PoSH act prohibits such activities which shall be considered unwelcome if the woman expresses her discomfort upon the commission of the notified acts, or does not consent to them. This statute further extends to cover certain circumstances construe to be sexual harassment if they are connected with any of the acts or behaviour mentioned in that section. Section 2(n) defines, “Sexual harassment” includes any one or more of the following unwelcome acts or behaviour whether directly or by implication of certain acts.

1. Physical contact and advances; or2. A demand or request for sexual favours ; or3. Making sexually coloured remarks; or4. Showing pornography; or5. Any other unwelcome physical, verbal or non-verbal

conduct of sexual nature.

The PoSH act is applicable to all employers including engaging women in their houses and dwellings, hospitals and nursing homes and such other premises under this Act. As per sec.2



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3. IMPORTANT PROVISIONS WHICH MANDATES EMPLOYER UNDER POSH ACT

PoSH act is to prevent women from Sexual Harassment at the workplace as an outcome of good governance. The important provisions contained in this act shall be equivocally applied to all women employees in every sector. Though this act cares and concern for the right of aggrieved women for their freedom of expression, it benefits employer in establishing a safe and quality work environment.

a) Provision of a safe working environment in the workplace: The employers shall be responsible for ensuring that the workplace is safe for its employees. The employer should ensure measures to protect their women employees providing safer environment free from exploitation. This will become applicable to both employees and non-employees who might enter the workplace. This mandate is not limited to the official workplace alone and includes any vehicle used by the company or by third-party sites visited by the employees.

b) Constitution of an Internal Complaints Committee in every workplace with more than 10 employees: sec.4. The Internal Committee (IC) is one of the two redressal bodies under this Act. Any employer of a workplace with 10 or more employees is required to constitute an IC. This committee shall be responsible for hearing and redressing any complaints pertaining to sexual harassment in such workplace. The committee will conduct enquiry and bring out the facts of the case before any decision is taken on sexual harassment at workplace.

c) Constitution of the Local complaints Committee in every District: sec. 6. The workplaces with 10 or more employees are required to constitute ICs, similar to employees working at other places shall get protection under the PoSH act. This act also requires the constitution of a Local Committee (LC) in every district which is responsible for hearing and redressing complaints of sexual harassment from workplaces that may have fewer than 10 employees. The LC also redresses complaints in the case such complaint is against the employer of a workplace themselves.

d) An in-depth inquiry into all complaints of sexual harassment: sec.11. The IC/LC, as the case maybe, is required to conduct an inquiry into every complaint of sexual harassment in accordance with the provisions of

the service rules applicable to the respondent within ninety days (90 days) from the submission of the complaint. Upon completion of an inquiry, the IC/LC is required to prepare a report of its findings. If the allegations of sexual harassment are proved, the IC/LC may recommend the employer or the District Officer to take action against the accused.

e) Organisation of workshops and awareness programmes at regular intervals for sensitising the employees with the provisions of the Act: The PoSH Act places a duty upon each employer to organise periodic sensitisation workshops for all their employees so that they are well versed with the provisions of the statute, the organisation’s redressal procedures and the consequences of engaging in acts that constitute sexual harassment. Such workshops and training sessions must be organised by experts on capacity building and awareness in PoSH sensitisation aspects.

f) Punishment for false and malicious complaint and false evidence: sec.14(1) The PoSH Act takes into cognizance, false and malicious complaints and provides for strict action against them. If the IC/LC finds that an allegation is proved to be an offence and punishable crime in nature, recommend to the employer for such punishments under this act.

‘Aggrieved women’ under the Act. (GOI handbook)

The PoSH Act has the objective of making workplaces safer for women by preventing, prohibiting and redressing acts of sexual harassment at the workplace. This act was passed with the legal binding to prevent women against sexual harassment at the workplace. The aim is to redress the exploitation of women and sexual harassment at workplace under the sections of the act, with mandatory procedure for treating such offence by the employer failing which attract penalties and fines as prescribed.



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“As corporations are key players in the global economy they can and must play a vital role in securing and protecting women’s rights and unleashing women’s economic capacity. More than ever before, private sector leadership is essential. Because corporations affect capital flows, employ so many people and affect so many communities, they can exert tremendous influence and they can set an example.” Inés Alberdi, Executive Director of UNIFEM.

United Nations has come out strongly in protecting the women’s rights in the global economy with emphasis on corporates in capacity building, developing leadership qualities, providing awareness, equal opportunities to women and measures to identify and grow potential entrepreneurs.

UN Principles on women empowerment by corporates are

1. Establish high-level corporate leadership for gender equality.

2. Treat all women and men fairly at work – respect and support human rights and non-discrimination. Ensure health, safety and well-being of all women and men employees.

3. Promote education, training and professional development for women.

4. Implement enterprise development, supply chain and marketing practices that empower women.

5. Promote equality through community initiatives and advocacy.

6. Measure and publicly report on progress to achieve gender equality.

7. Impact in corporates and the need for protection

The women at work should be free from any discrimination, harassment and other factors of inequality in any organisation. The vision in building up the nation vests with women’s right and empowerment in all strides of corporates. The women leaders in the corporates, private or public sector or in governments exert their importance by value addition to the organizations they work for. The victim or the aggrieved women should come forward in reporting such heinous attempts and identify the culprits for punishments and such other action as the authorities decide. If they do not report such harassment and digest themselves will show the culprits ray of hopes to continue such crimes with others spoiling the objectives of the law and corporates. The aggrieved women should be firm, valiant and not bothered about the threats in reporting to get justice. The following reasons of reporting and non- reporting to corporates act on the principles of PoSH act.

Reporting Data on Sexual harassment at Work Place

Reasons %ageNot Reporting 60Reported to HR, Internal Committee 25

Reported Anonymously 8Reported to Police 2Reported by colleagues, Heads, and others 5Total 100

Reasons for Not Reporting

Reasons %ageGossips, apathy 12To be Resolved on its own. 18Feared retaliation, Victimisation 15Afraid of criticism, Self-Protection, etc. 25Embarrassment, fear of losing status 30Total 100

In spite of the encouragement by the corporates ensuring protection and freedom of work and expression, women are handicapped by certain factors which are obstacles in their growth and development.

a) Socio-economic factors

It is essential to assess the impact of different socio-economic and demographic factors on women’s right with empowerment. The revealing factor that most socio-economic and demographic variables have significant impacts on the current scenario, causes significant variations in the status



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The women at work should be free from any discrimination, harassment and other factors of inequality in any organisation. The vision in building up the nation vests with women’s right and empowerment in all strides of corporates. The women leaders in the corporates, private or public sector or in governments exert their importance by value addition to the organizations they work for.

of women’s right to freedom and expression, with increased wage differential in particular, decreasing the probability of women being empowered.

b) Personal and family factors

The women in the modern age will have to fight for their rights and freedom in the family front as well in their personal denigration. Unless statutes like POSH act have been passed by the governments, it is very difficult to establish quality standards of living for women by corporates with freedom from all quarters (earnings, investment, power to retain the rights). The employer should understand to act on the women’s “individual or collective living experiences,” which include:

� Education, training and skills development

� Culture, customs and Commonly used traditions

� Access to property, assets and financial assistance

� Social protection and safe and quality living

� Gender inequality, discriminatory and social norms.

c) Psychological and other factors

The psychological myth of women are considered as weaker sex which should be dispensed with women-power in the society. The self-confidence and power of the women in fighting against the discrimination of whatsoever in nature should be supported and well taken care of by the Corporates in addition to the initiatives of the Government. The women should be considered as equal to men in doing any work and compensated equal to that of men which is of prime importance. Similarly women should be encouraged to stand up and fight against the atrocities and harassments legally in a congenial manner. It is not only the responsibility of the corporates but also the collective responsibility of the society in the protecting the rights of women in all perspectives. Since the womenfolk plays an important role in the spectrum of everyone’s life as respectable in society, the corporates should protect their rights with due recognition and freedom of living.

5. ROLES AND RESPONSIBILITIES OF THE EMPLOYER

“The best thermometer to the progress of a nation is treatment of its women” - Swami Vivekananda.

The legal restrictions to women’s formal employment should be removed and women employees should have been encouraged access to financial assistance that often remain out of reach. The policy of the governments as employer should focus on keeping girls in school by providing measures for safe transportation and facilities thereby increasing recruitment of trained female teachers. In the education sector, the governments are considered major employers with initiatives can be developed for women that combine vocational training and life skills such as the ability to manage challenges and advocate for their rights. India have come closer to parity at the primary level in removing the obstacles on significant gaps in secondary schooling. This has resulted in an increase at entry into secondary school and also wages for women increase by 15 to 25 percent.

These measures could help women employees outnumber men in facing challenges in the informal sectors. The governments should ensure and monitor that employers adhere “recognition, reduction, and redistribution” of care and congenial work environment for women labour laws in force and protecting them against harassment with PoSH acts. The policies of corporates should transform ingrained cultural attitudes about women ability to work and raise above board in creating value addition to them. The women centric organisations like Tea, Coffee Plantations and critical segments like watch manufacturing they should be allowed to work without harassment or discrimination by enforcing PoSH act. Similarly upholding economic freedom and financial inclusion by providing platforms to echo their rights are tobe established. Equal opportunities should be provided in preservation of their modesty and self-respect. The impact on corporates due to sexual harassment at work place affect their productivity, efficiency and organisational image etc. The factors of impact on corporates industry wise, age wise and cost wise are given as an explicit data available.

Industry Wise distribution of data

Sexual harassment at work place (Industry wise)

Name of Industry %age

Communication and IT 35

Construction and Infrastructure 25

Transportation and Utilities 8

Education and health services 15

Manufacturing sector 7

Unorganised and other sectors 10

Total 100



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Age wise distribution of data

Sexual Harassment at work place age wise persons

Age wise Segment %age

16-24 20

25-34 40

35-44 25

45-55 10

>55 5

Total 100

Cost wise distribution of data

Cost of employer on Sexual harassment at workplace

Cost factors %age

Job turnover/attrition 12Sick Leave/man hours lost 10Individual Productivity 25Organisation Productivity 45Legal and other factors 8

Total 100

The women at work should be able to understand the initiatives of the corporates by a collective action and leadership, enable them to raise up to the situation and challenge any power-centric hierarchy. When women are over-represented in the least profitable occupations, economic policies should prohibit workplace discrimination and support women in decent work with standard working hours. The discriminatory gender norms starts from formal institutions by garnering the support of men to change prevailing attitudes towards women and girls. The corporates should strive hard in establishing ambitious goals for women empowerment at all levels, commitment to women welfare through a system of grievance handling and collectively plan for protection of women’s rights. The determination of corporate responsibilities are based on the following.

� Commitment to protect the welfare and rights of women employees

� Installing Anti-Sexual Harassment policy with display of anti-sexual harassment posters and notices which accentuates the legal consequences in the organisation

� Developing the ways of informal leadership and smaller groups to ensure the dignity and modesty of the women employees are preserved

� Training and educating women employees thereby sensitizing them with provisions of law, to work in a congenial atmosphere.

� Creating empowerment and confidence levels of women employees to meet any situation.

� Educating women employees understand their position, status and importance in the organisation.

� Conducting anti-sexual harassment audits for review, report and redressal activities based on the policy.

� Formulating annual reports to be submitted to internal Complaints Committee and to the District Officer.

� Adhering the compliances under the law to achieve greater efficiency getting the support from all.



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6. CONCLUSION- FINDINGS AND SUGGESTIONS“Workplace violence and sexual harassment present a significant barrier to women accessing and progressing through the labour market, and therefore ILO will never stop working to eradicate it.” Abuse of Power and Authority, ILO further said that there are generally two types of sexual harassment:

� Quid pro quo – a person is under pressure to engage in sexual activity to keep her job or advance her career.

� Hostile work environment - the conduct creates an environment that is hostile, humiliating and intimidating for the recipient.

Small surveys in Asia-Pacific countries indicate that 30 to 40 per cent of women workers report some form of verbal, physical or sexual harassment. The PoSH Act is indisputable which gives relief and protection to many working women in India. The sexual harassment at workplace is a crime which shall become punishable under the provisions of the act. It strengthens and gives confidence to women employees with legal right to express the atrocities of discrimination or harassment and removal of such incidents in India. This law has empowered women and prohibits them from exploitation and acts as a platform to voice their concerns. The aim is to eradicate discriminations and harassments and to create a safety space for women employees. The observations made in the applicability of the law in practice are:

� The object of the Act is, protection, prevention and redressal on sexual harassment at work place complaints.

� The purpose of the Act is to ensure highest levels of modesty of the women employed

� The process under this act is not to find fault with co-employees or for any victimisation or enemity or hatred being created.

� The action taken should be fair, unbiased, justifiable by the parties concerned without infringement on the organisational purposes

� The IC/LC shall recommend criminal action if that act found to be heinous or barbaric acts by taking cognizance of the offence under IPC and other laws.

ILO mandate on social justice, violence against women in the workplace is at odds with its goal of full and productive employment and decent work for all women and men in conditions of freedom, equity, security and human dignity. The PoSH act is passed to fulfil such measures by providing protection, prohibition and redressal on harassments thereby ensuring equality and decent work atmosphere in corporates. And moreover effective compliance with the PoSH act by the employer makes workplaces safer, displaces the fears and discomfort of employees, increases employee satisfaction, reduces employee turnover and saves companies from other costs associated with sexual harassment. Above all, the dignity, modesty and self-respect of women employees are at high spirits with social justice, harmony of working. CS

REFERENCES :

Webliography : Wikipaedia, revlevant websites, ILO, UN, UNIFEMWebsite of Ministry of Women and Child Welfare, Ministry of statistics etc : Sexual Harassment at Workplace (Prevention, Prohibition and Redressal) Act,2013Source: https://www.indiabudget.gov.in/economicsurvey/doc/vol2chapter,https://www.hrw.org/report/2020/10/14/no-metoo-women-us/poor-enforcement-indias-sexual-harassment-lawReference journals, Research articles, Study materials and books etc



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INTRODUCTION“You can tell the condition of a nation by looking at the status of its women” — Pandit Jawaharlal Nehru

T he days of male dominance in the workplace and males being the sole earners of the family are long gone, the paradigm shift in the workplace which has now come to

incorporate women has brought a radical shift in the status of women across the globe. With these changes taking place at a rapid pace, instances of women facing sexual harassment at the workplace have also seen a tremendous rise.

Workplace sexual harassment as an issue has come to transcend National borders. The widespread prevalence of this ghastly practice is a testament to the fact that even though women have been assimilated at the workplace, the other half of humanity still faces a unique, debilitating set of challenges which demand instant rectification. Sexual harassment can be understood as an affront to a person’s fundamental right to Right to Equality, Right to Life and Dignity which are enshrined under Article 14, 15 and 21 of the Constitution of India (‘Constitution’). The impact of sexual harassment at the workplace can hardly be overstated, the consequences range from creating and fostering a toxic hostile work environment to having far fetching detrimental consequences on the state of the victim’s mental health.

It wouldn’t be incorrect to assert that such instances wreak havoc in the victim’s personal life and carry innumerable unquantifiable negative impacts. Under the edifice of the Constitution, women are guaranteed the right to profession

Evolution and Impact of the Prevention of Sexual Harassment at Workplace (POSH) Act, 2013

Sumit KocharCorporate LawyerPartner at Dolce Vita Trustees [email protected]

Shivam Gera, ACSSenior Associate at Dolce Vita [email protected]

Akanksha DavePrincipal Associate at Dolce Vita [email protected]

Workplace sexual harassment is a violation of a woman’s right to equality, life, and liberty. It fosters an unstable and unfriendly work atmosphere that discourages women from working, so jeopardising their social and economic empowerment as well as the objective of inclusive growth. With this in mind, the Indian Parliament enacted the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act 2013, which is undoubtedly a pleasant piece of legislation that protects women working in both the organised and unorganised segments of industry from sexual harassment of any kind.

as per Article 19 (1)(g). The Constitution safeguards women’s right to seek active public employment and this right is significantly curtailed by the practice of sexual harassment at the workplace. Further, Article 21 of the Constitution safeguards the Right to life of an individual, this includes the Right to seek gainful employment. Further, the Preamble of the constitution enshrines “Equality of status and opportunity”. The menace of Sexual Harassment at workplace vitiates these provisions in a sweeping manner. The practice strips women of their dignity, their right to earn and their fundamental human rights.

The Hon’ble Supreme Court of India (‘Supreme Court’) sought to address the matter in the Case of Vishakha v. State of Rajasthan1 (‘Vishaka Judgement’) where the Supreme Court laid down comprehensive guidelines to tackle the evil of sexual harassment at workplace. The judgement was scarcely followed and poorly implemented across the jurisdictions which created the need of legislative intervention.

To effectively counter and address the menace posed by Sexual Harassment at the workplace, the Indian Legislative authorities rolled out the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (‘POSH Act’). Subsequently, the Government drafted rules under the POSH Act titled Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013. Additionally, in the same year the government also brought forth the Criminal Law (Amendment) Act, 2013 which criminalised the offences of Stalking, Voyeurism and Sexual Harassment. 11997 6 SCC 241: AIR 1997 SC 3011


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THE VISHAKA JUDGEMENTThe Vishaka judgement relates to a case of a brutal gang rape of a Dalit woman named Bhanwari Devi, in the year 1992. The victim was employed in the State Governments rural employment program. The ghastly act took place when the victim opposed the practice of child marriage in the region. In a Public Interest Litigation, Vishaka along with other women’s rights groups sought to enforce the Fundamental rights under Articles 14, Article 19 and Article 21 of the Constitution. The occurrence of this incident brought to light the hazardous conditions of work that women have to face, on a daily basis. It further highlighted the urgent need of legislative intervention to safeguard the rights of women. During the case, the Supreme Court, in an unprecedented move took stock of the situation and acknowledged sexual harassment

at the workplace as an affront to ones fundamental rights. The Court relied on the Convention on Elimination of All Forms of Discrimination against women, which was brought forth by the United Nations General Assembly, which India was a signatory to. The guidelines in this case were laid down under Article 32 of the Constitution to act as a safeguard against such incidences until an appropriate legislation was passed by the Parliament. These guidelines were to be followed by all employers, both in the Public and Private sector.

The guidelines laid down in this case were the following:-

1. It shall be the duty of the employer of the workplace to proactively prevent such instances from taking place at the place of work and to provide with adequate methods for the resolution and settlement of such cases.

2. It defined the act of sexual harassment as; (1) contacts which are physical in nature , (2) demanding sexual favours, (3) remarks which are sexual in tone, (4) showing sexually explicit material, such as pornography, (4) any other forms of unwelcome, verbal or non-verbal acts.

3. Employers shall take steps to avert instances of sexual harassment by :

1. Prohibiting all forms of sexual harassment by means of notifying and publishing in an appropriate manner.

2. The rules and regulations of Public sector bodies and Governmental organisations must encompass regulations and guidelines pertaining to sexual harassment and shall provide penalties for the commission of the same.

3. The working conditions for the employees must be sound with respect to concerns pertaining to health, hygiene, and leisure. The working environment must not be hostile towards women.

4. Women in the workplace must not have reasonable grounds to believe that the working environment is prejudiced against her

4. Where any such act takes place within the workplace, and the act committed is an offence under the Indian Penal Code or any other statute, the employer shall take the appropriate steps to report to the authorities. The employer shall also ensure that the victim is not discriminated against during the process. Moreover, the victim should be offered the option to seek her own transfer or transfer of the perpetrator.

5. Where the act committed amounts to misconduct under the defined service rules, appropriate disciplinary action must be taken by the employer.

6. A complaint redressal committee must be put in place which appropriately disposes of with the complaint in a time bound manner. Such committee must be headed by a woman and must also consist of a member from an NGO or any organisation which versed with the matter of Sexual Harassment.

7. Employees of the organisation must be provided with an adequate avenue for raising issues pertaining to sexual harassment.

To effectively counter and address the menace posed by Sexual Harassment at the workplace, the Indian Legislative authorities rolled out the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (‘POSH Act’). Subsequently, the Government drafted rules under the POSH Act titled Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013. Additionally, in the same year the government also brought forth the Criminal Law (Amendment) Act, 2013 which criminalised the offences of Stalking, Voyeurism and Sexual Harassment.



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female employees by highlighting the guidelines in a prominent manner.

9. In instances where the act of sexual harassment is perpetrated by an outsider or a third party, the employer should take adequate steps to protect and support the victim.

POST VISHAKA DEVELOPMENTS1. Apparel Export Promotion Council v. A.K Chopra2

The Vishaka Judgement opened doors for more discourse on the topic of sexual harassment at the workplace, the topic which had been sheltered under a garb for the longest time started to get the attention that was warranted, given the severity of the matter. After the Vishaka Judgement, the first case that dealt with the topic of sexual harassment at workplace was the case of Apparel Export Promotion Council v. A.K Chopra. The Supreme Court’s judgement in this case echoed the judgement in the Vishaka judgement. The Supreme Court found a superior officer of the Apparel Export Promotion Council guilty of sexually harassing a female employee and upheld the dismissal of the officer. The judgement in this case, widened the scope of sexual harassment and ruled that physical contact between the parties was not a pre-condition for upholding charges against sexual harassment. In the judgement the Supreme Court stated the following :

“sexual harassment is a form of sex discrimination projected through unwelcome sexual advances, request for sexual favours and other verbal or physical conduct with sexual overtones, whether directly or by implication particularly when submission to or rejection of such conduct by the female employee was capable of being used for affecting the employment of the female employee and unreasonably interfering with her work performance and had the effect of creating an intimidating or hostile work environment for her.”

2. Medha Kotwal Lele & Ors v. Union of India & Ors 3

In this case, the Supreme Court took cognisance of a letter highlighting a series of cases where the Vishaka Judgement’s guidelines were not being implemented in the correct manner. The Supreme Court converted the letter into a Public Interest Litigation and began monitoring the implementation of the Vishaka Judgement’s guidelines across the country by mandating states to submit affidavits detailing the manner in which the Vishaka Judgement’s guidelines were being implemented. The Supreme Court in this matter stated

“the implementation of the Vishaka Guidelines has to be not only in form but also in substance and spirit so as to make available safe and secure environment for women at workplace in every aspect and thereby enabling working women to work with dignity, decency and due respect.”

Subsequently, dissatisfied with the manner of implementation of the guidelines the Supreme Court stated that an individual who is aggrieved with the implementation of the guidelines had the right to approach the concerned High Court.

3. Sapna Korde Nee Ketaki v. State of Maharashtra and Ors4

In this case, the High Court of Bombay overruled the decision of an Internal Complaints Committee (‘IC’). The IC had stated that the conduct of the accused amounted to mis-behaviour instead of sexual harassment. Overruling the decision of the IC, the High Court stated that the act of using abusive and unprofessional language amounted to sexual harassment as it led to the workplace being a hostile environment for the woman as well as affecting the mental health of the woman.

4. D.B Singh v. State of Jammu and Kashmir5

The High Court of Jammu and Kashmir in this case have laid down that filing a complaint under the POSH Act does not bar the complainant from initiating judicial proceedings and seeking criminal action against the perpetrator solely as a result of the fact that the case has been heard by an IC.

Moreover, in the case of Usha Padmini and Ors v. State of Karnataka and Ors6, the High Court of Karnataka laid down that initiating judicial action against a person where the IC has already investigated the matter and found that the claims of sexual harassment do not stand, the Court would not find it just to do so. In this particular, no new evidence and Information was brought on record in order to substantiate the claims of sexual harassment.

PROVISIONS OF THE POSH ACT Definition of the term “Sexual Harassment”

Given the Severity of the issue, Section 354A was introduced by the Criminal Law (Amendment) Act, 2013 in Indian Penal Code, 1860 (‘IPC’) which defined acts which would be construed to be as Sexual Harassment. These include: 1. Physical contact and advances of involving unwelcome

and explicit sexual overtures; or 2. a demand or request for sexual favours; or3. making sexually coloured remarks; or

2 (1999) 1 SCC 7593 (2013) 1 SCC 297

4 2019(1) Bom CR (Cri)4155 MANU/ JK/76/20196 MANU/KA/0584/2019



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conduct of sexual nature

Prior to the enactment of the amendment, there was a lacuna pertaining to laws related to sexual harassment. However, there were sections within the IPC which dealt with similar offences such as Section 94, Section 354 and Section 509 which dealt with Obscene acts and song, assault or criminal force to women with the intent to outrage her modesty and Words, gestures or acts intended to insult the modesty of women respectively. Although these provisions addressed key issues but failed to serve the purpose of dealing with the various nuances of sexual harassment. ‘Sexual Harassment’ has been defined in the POSH Act in accordance with the SC’s ratio decidendi in the ‘Vishaka Judgment’. According to the POSH Act, “sexual harassment” involves unwanted sexualised conduct, both explicitly or implicitly, including inappropriate physical touching, claims or demands for sexual gratification, passing sexual comments, exposing pornographic material and several other undesirable sexual tinted verbal, nonverbal or physical actions.

As we can see from the concept of ‘sexual harassment’ in the POSH Act, it has been broadened to include both overt and indirect sexual behaviours that can include written, verbal or even physical acts. The main distinction is that the behaviour is undesired and unwanted by the receiver. It entails coerced sexual abuse, a type of sexual extortion. In a common case of coercive abuse, the perpetrator, who is in a position of authority, pressurises a subordinate member of staff for intimate attention in return for promotion or the possibility of negative career implications.

The term also mentions having a ‘intimidating, aggressive, or unpleasant working conditions.’ An illustration might be a workplace in which a female worker is subjected to derogatory remarks regarding her physical appearance, causing her to experience humiliation and therefore not be able to work effectively. While certain types of, sexual misconduct such as sexual harassment, are clearly inappropriate and disturbing, and may only need to manifest one time to be considered “harassment,” others could be difficult to identify.

Since we must maintain a delicate balance while measuring a “hostile work environment”, it should be an independent board’s responsibility to determine whether or not the abuse endured by the employee is serious enough to establish such a work climate. Furthermore, deciding what constitutes’ sexual harassment’ is dependent on the precise evidence and setting wherein the behaviour transpired.

Who is an Employee?

The ambit of the term “employee” has been given a fairly broad definition, which encompasses regular, temporary, ad hoc employees along with persons involved on a daily wage basis (either directly or via an agent), labourers employed on a contractual basis, probationers, apprentices and trainees, irrespective of whether the principal employer has knowledge of such employment, whether the employment is on a voluntary basis or on some other basis and whether the employment is on a implied or express basis.

What is a workplace?

The Vishaka Judgement’s Guidelines envisaged a workplace to be of the nature of a traditional office, nonetheless, acknowledging the deficiencies in the erstwhile definition the POSH Act has come to recognise that sexual harassment at the workplace is not confined to the physical place of employment but also includes the “extended workplace”. The POSH Act now includes within the ambit of the definition of Workplace any and all sites which an employee is required to visit during the course of the employment, which includes commuting in the mode transport provided for by the employer.

In Saurabh Kumar Mallick v. Comptroller & Auditor General of India7, the victim who was a senior woman officer had alleged sexual harassment on a junior officer. In the course of the departmental inquiry, the respondent contended that he could not be accused of the offence of sexual harassment at the workplace by virtue of the fact that the incident did not occur at the place of employment but within the premises of the official cafeteria. Moreover, the respondent alleged that since the complainant was a senior officer, as a result the official could not exploit the complainant for any sort of “favours”. The High Court of Delhi while dealing with the matter held that the contentions of the respondent were “clearly misconceived”. In its judgement the courts expanded the ambit of the workplace and provided guidelines for construing the meaning of the term “workplace”. These guideline are:-

1. Considering the proximity of the alleged place of occurrence of sexual harassment form the place of work;

2. Considering whether the management exercises control over such a place, where the incident has occurred; and

3. Whether the place can be considered to be an extension of the workplace and whether it’s contiguous to the actual place of work.

In its decision, the courts upheld that the official cafeteria of the workplace falls within the ambit of the workplace.

7Decided on May 9, 2008 [Citation not available]

we must maintain a delicate balance while measuring a “hostile work environment”, it should be an independent board’s responsibility to determine whether or not the abuse endured by the employee is serious enough to establish such a work climate. Furthermore, deciding what constitutes’ sexual harassment’ is dependent on the precise evidence and setting wherein the behaviour transpired.



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The POSH Act mandates that each organisation with more than 10 employees is supposed to have IC which shall investigate matters pertaining to sexual harassment which are brought to its attention. Where such a committee is not set up, the organisation shall be liable to pay a fine under the POSH Act. Constitution of IC:

The IC shall consist of the following members to be nominated by the employer, namely: -a. a Presiding Officer who shall be a woman employed at a

senior level at workplace from amongst the employees:b. not less than two Members from amongst employees

preferably committed to the cause of women or who have had experience in social work or have legal knowledge;

c. one member from amongst non-governmental organisations or associations committed to the cause of women or a person familiar with the issues relating to sexual harassment:

Provided that at least one-half of the total Members so nominated shall be women.

LOCAL COMMITTEE

The Government at the District level is required to institute a “Local Committee” (‘LC’) whose objective shall be to hear complaints pertaining to sexual harassment from the unorganised sector and from organisations which don’t have an IC. The role of the Local Committee warrants special relevance in the case of sexual harassment of domestic workers or where the complaint is issued against the employer itself.

COMPLAINT REDRESSAL MECHANISM The complainant is required to file the complaint pertaining to sexual harassment within a period of 3 months of the occurrence of the incident and where multiple incidents have occurred, the complaint shall be filed within 3 months of the latest incident. Further, the complaint must be accompanied with 6 copies of all the supporting documents along with the names of the witnesses to the incident to the IC or LC. It is crucial to record and register the complaint as soon as possible so as to not dilute the credibility of the complaint. However, if there is a delay in the submission of the complaint, the delay must be justified to the IC or LC in writing. Where the IC or LC finds that the justification for the delay is reasonable, it has the powers to grant extension to the complainant in instituting proceedings against the respondent.Further, the POSH Act also enables friends, co-workers, relatives, psychiatrists and psychologists to file the complaint, in the event that the complainant is unable to file the complaint herself owing to incapacity of a physical or mental nature or as a result of death.

Further, efforts can be made to resolve the matter between the parties by way of conciliation, on the request of the complainant. Conciliation is essentially an informal process which provides for the resolution of a dispute between the parties. The option to initiate conciliation lays at the hands of the woman. The woman may choose to opt for conciliation by making a formal request to the Internal Committee before initiating inquiry proceedings.

PENALTIES AND COMPENSATION UNDER THE POSH ACT

The POCH Act lays down the following penalties in the event that an employee is found guilty of sexually harassing a fellow female employee:-

1. Punishment in the lines of the service rules of the Organisation.

2. In the event that the organisation does not have a Service Rules in place, it may initiate disciplinary proceedings against the perpetrator which may entail furnishing a written apology to the victim, reprimanding the perpetrator, terminate any promotions which may be due, withhold any increments or raise in pay, order the perpetrator to under go counselling session, instruct the perpetrator to undergo community service or terminate the perpetrator from their position; and

3. Deduct an amount from the respondent’s salary for the compensation of the victim.

The compensation payable envisaged under the POSH Act, to the complainant shall be determined on the lines of the following factors:-

The trauma in terms of mental and emotional suffering inflicted on the complainant;

1. Loss of career advancements or other such opportunities as a result of the sexual harassment;

2. The expenses incurred on the complainant by means of seeking medical treatment. Such as physical medical care or psychiatric care;

3. The monetary status of the perpetrator; and

4. The feasibility of meting out such payment, either in a lump sum manner or in instalment.

FRIVOLOUS AND FALSE COMPLAINTS

Keeping in mind the prospects of the provisions under the POSH Act being potentially misused, the POSH Act also provides for provisions dealing with “false or malicious” complaints. The POSH Act provides for such eventualities by laying down that, in the event that IC or LC finds that the complaint registered is untrue or has been fabricated or misleading information had been provided in order to sway the decision in the favour of the complainant, the IC/LC is entitled to initiate disciplinary proceedings against the complainant as per the Service rules of the organisation. Further, if the organisation does not have its own service rules then the disciplinary action can entail initiating disciplinary proceedings against the perpetrator which may entail furnishing a written apology to the victim, reprimanding the complainant, terminate any promotions which may be due, withhold any increments or raise in pay, order the perpetrator to under go counselling session, instruct the complainant to undergo community service or terminate the perpetrator from their position. However, the POSH Act clarifies that the inability to substantiate the charges does not equate to a false or a malicious complaint.



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Given the mandate created by the POSH Act, there has been an enhanced sensitivity towards the concept of sexual harassment and sexual mis-conduct within the workplace in companies across the country. Any occurrence of any such incidents can carry far fetching consequences on the goodwill and reputation of the organisation, moreover the costs of litigations and compensation can also prove to be financially burdensome for companies.

Pros

� Confidentiality: Sections 16 and 17 of the POSH Act expressly forbid the publication of any material relating to the investigation of the complaint, including conciliation hearings and ICC guidelines. The POSH Act expressly states that information on workplace sexual harassment is excluded from the provisions of the Right to Information Act of 2005.

� Employer’s Duties and Obligations: The POSH Act cast various duties and obligations on the employer which inter-alia involves initiating action under IPC, providing a safe working environment, promoting a gender sensitive workplace, and organising workshops and awareness programmes.

� Powers of IC/LC: As per Section 11(3) of the POSH Act the IC and LC shall, while inquiring into a complaint of workplace sexual harassment, have the same powers as vested in a civil court under the Code of Civil Procedure, 1908 when trying a suit in respect of: summoning and enforcing the attendance of any person and examining him on oath; requiring the discovery and production of documents; and any other matter which may be prescribed.

� Service Rules: The fact that the service rules apply to the POSH Act in terms of penalising the complainant for making a fake complaint and/or penalising the victim on rightful complaint indicates that it is considered misbehaviour under the service rules that apply to the organization’s workers.

� Penal Provisions for Non-Compliance: A monetary penalty of up to INR 50,000 can be levied on an employer who fails to form an IC or fails to comply with the POSH Act’s requirements. If the same offence is committed again, the penalty will be doubled, and the company will be de-registered and all statutory business licences will be revoked. However, it is uncertain which business licences are being discussed in this situation. It’s also worth noting that all POSH Act offences are non-cognizable.

� Scope of Appeal: The appeal clause enshrined in Section 18 of the POSH Act is one of the most important tools for preventing misuse of the legal system. If the respondent is not content with the ICC’s recommendations/findings in the complaint, he or she has the right to appeal under section 18 of the POSH Act and related service laws. The appeal must be filed within ninety days of the date of the recommendation.

Cons

� Not Gender Neutral: This POSH Act is geared toward women. According to some studies, almost 5% of male employees was subjected to sexual abuse at work. The POSH Act only refers to women as aggrieved parties, and it makes no mention of men as aggrieved parties. There are no clauses in this act that address sexual abuse of men or transgender people. Furthermore, the act uses the term “respondent” in the meaning of respondent, but the lawmakers are silent on whether the individual or suspect may be a woman or a transgender person.

� Limitation on Complaint Filing: There is a fixed deadline for filing a complaint under the POSH Act. According to Section 9 of the POSH Act, a report must be lodged with the ICC within three months of the date of the incident, or within three months of the last incident in the case of a series of incidents (extendable up to six months when required). Though this may reduce frivolous complaint but given that sexual harassment is such a serious occurrence in the victim’s life, the limited time span should be extended further to allow the victim to recover from the ordeal and file a complaint.

� Complaint redressal and reporting mechanism: The POSH Act fails to protect those women who were employees of the organisations at the time of sexual harassment but were terminated for one cause or another before they had a chance to file a complaint. The POSH Act expressly states that the person who has been sexually harassed, or someone she authorises, must file a formal report with the IC. According to the POSH Act, the company is not required to respond to an anonymous report. Furthermore, employees have the most difficulty distinguishing between sexual harassments and other types of harassment.

CONCLUSIONThe POSH Act filled a void with respect to dealing with the offence of sexual harassment at the workplace. At the current juncture, India is a young country which is seeing unprecedented numbers of women joining the workforce. Given such a scenario, it becomes imperative that the human rights of women in the workforce are adequately protected. Sexual harassment at the workplace exists as a plague in modern society which hampers the growth and career prospects of women at the workplace. It is pertinent that employers are sensitised with respect to the nuances of sexual harassment at the workplace, moreover it is crucial that employers are informed about the legislative framework regarding the matter, various manners in which sexual harassment at the workplace can be prevented and dealt with in an effective manner. Employers can also educate their IC staff on the specifics of the POSH Act and investigative procedures on a regular basis. Despite the fact that the POSH Act has been in effect since 2013, there remains a lack of understanding about the implications of sexual assault and how to address it. The successful enforcement of the POSH Act necessitates not only the development of an atmosphere in which women can freely express their grievances and receive justice, but also the sensitization of men against the treatment of women at work. CS



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Nachiket Sohani, ACSAssistant Manager, NSDL e-Governance Infrastructure [email protected]

In today’s world, both men and women, for the purpose of either employment or self-employment, are required to visit their workplaces. This is because globalization has resulted in drastic changes in the status of women worldwide resulting in the larger entry of women in the mainstream workforce of India. Under these circumstances, sexual harassment at workplace has also increased. Women have become victims of sexual harassment at their workplace and instances of workplace harassment of women have increased rapidly. These developments resulted in the enactment of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 which aimed to provide protection against sexual harassment of women at workplace and to prevent and redress the complaints of sexual harassment and for matters connected therewith or incidental thereto.

INTRODUCTION

W orkplace sexual harassment is a form of gender discrimination which results in violation of the fundamental rights of the woman to equality under

Articles 14 and 15 of the Constitution of India and her right to life and to live with dignity under Article 21 of the Indian Constitution and right to practice any profession or to carry on any occupation, trade or business with includes a right to a safe environment free from sexual harassment.

EVOLUTION OF THE LAWIn 1997, the Supreme Court of India, in its landmark judgement in Vishaka v. State of Rajasthan [AIR 1997 Supreme Court 3011], for the first time recognized and addressed the issue of Sexual Harassment at workplace as a systematic discrimination against women. This judgement required every organization to incorporate mandatory provisions relating to prevention of sexual harassment at workplace and also laid down guidelines to be adopted at the workplace. In compliance with the requirements of the said order, every corporate entity was required to formulate a policy on prevention & redressal of sexual harassment.

ENACTMENT OF LAW The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“Act”) was passed by the

Government of India on April 23, 2013. The Government also subsequently notified the rules under the Act titled the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013 (“Rules”) on December 9, 2013. In the same year, the Criminal Law (Amendment) Act, 2013 (“Criminal Law Amendment Act”) was promulgated which criminalized offences such as sexual harassment, stalking and voyeurism.

APPLICABILITY AND SCOPEThe Act is applicable to every workplace, establishment, company or organization employing ten (10) or more employees whether full time or part time or interns or consultants, irrespective of its location or nature of industry.

IMPORTANT DEFINITIONS AND TERMS UNDER THE ACTSection 2 (a) - Aggrieved womanIt means— (i) in relation to a workplace, a woman, of any age whether

employed or not, who alleges to have been subjected to any act of sexual harassment by the respondent;

(ii) in relation to dwelling place or house, a woman of any age who is employed in such a dwelling place or house

Section 2(g) – EmployerIt means— (i) in relation to any department, organisation, undertaking,

establishment, enterprise, institution, office, branch or unit of the appropriate Government or a local authority, the head of that department, organisation, undertaking, establishment, enterprise, institution, office, branch or unit or such other officer as the appropriate Government or the local authority, as the case may be, may by an order specify in this behalf;

(ii) in any workplace not covered under sub-clause (i), any person responsible for the management, supervision and control of the workplace.

(iii) in relation to workplace covered under sub-clauses (i) and (ii), the person discharging contractual obligations with respect to his or her employees;


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household who employs or benefits from the employment of domestic worker, irrespective of the number, time period or type of such worker employed, or the nature of the employment or activities performed by the domestic worker;

Section 2(o) – Workplace

It includes —

(i) any department, organisation, undertaking, establishment, enterprise, institution, office, branch or unit which is established, owned, controlled or wholly or substantially financed by funds provided directly or indirectly by the appropriate Government or the local authority or a Government company or a corporation or a co-operative society;

(ii) any private sector organisation or a private venture, undertaking, enterprise, institution, establishment, society, trust, non-governmental organisation, unit or service provider carrying on commercial, professional, vocational, educational, entertainment, industrial, health services or financial activities including production, supply, sale, distribution or service;

(iii) hospitals or nursing homes;

(iv) any sports institute, stadium, sports complex or competition or games venue, whether residential or not used for training, sports or other activities relating thereto;

(v) any place visited by the employee arising out of or during the course of employment including transportation by the employer for undertaking such journey;

(vi) a dwelling place or a house;

Section 2(n) – Sexual harassment

It includes any one or more of the following unwelcome acts or behaviour (whether directly or by implication) namely: -

(I) physical contact and advances; or

(II) a demand or request for sexual favours; or

(III) making sexually coloured remarks; or

(iv) showing pornography; or

(v) any other unwelcome physical, verbal or non-verbal conduct of sexual nature;

Section 3(2) - Prevention of sexual harassment

The following circumstances, among other circumstances, if it occurs, or is present in relation to or connected with any act or behaviour of sexual harassment may amount to sexual harassment: —

(i) implied or explicit promise of preferential treatment in her employment; or

(ii) implied or explicit threat of detrimental treatment in her employment; or

(iii) implied or explicit threat about her present or future employment status; or

(iv) interference with her work or creating an intimidating or offensive or hostile work environment for her; or

(v) humiliating treatment likely to affect her health or safety.However, the following are acceptable and not considered as instances of sexual harassment:

i. Performance counselling ii. Social interaction iii. Showing concern iv. Encouragement v. Polite compliment vi. Friendly conversationSection 4 - Constitution of Internal Complaints Committee

Every employer of a workplace shall, by an order in writing, constitute a Committee to be known as the Internal Complaints Committee (“IC”) which shall consist of the following members to be nominated by the employer, namely: —

(a) a Presiding Officer who shall be a woman employed at a senior level at workplace from amongst the employees:

(b) At least two members from amongst employees preferably committed to the cause of women or who have had experience in social work or have legal knowledge;

(c) one member from amongst non-governmental Organisations or associations committed to the cause of women or a person familiar with the issues relating to sexual harassment:

Section 5 read with Section 6 – Constitution of Local Complaint Committee

Every District Officer shall constitute in the district concerned, a committee to be known as the ‘Local Compliant Committee’ to receive complaints of sexual harassment from establishments where the IC has not been constituted due to less than ten workers or if the compliant is against the employer himself.

POSH at Workplace – its Impact and Influence in Corporates


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Reporting Procedure

The reporting of any offence under the Act is prescribed by the Rules as issued by the Government from time to time, which is as follows:

1. Any complaint/grievance should be reported to IC through any of the following:

a. Reporting Manager

b. Functional Head

c. Business Head

d. Business HR/Regional HR

e. People Engagement Manager (PEM)

1. According to Rule 7 of the Rules, the Complaint needs to be filed, in writing (6 copies) along with supporting documents and the names and address of witnesses, preferably within three months from the date of occurrence of the alleged incident or the date of last incident (in case of a series of incidents).

2. The IC shall handover one copy of the Complaint to the accused person within a period of seven working days of receipt of the compliant and give him the time not exceeding ten days to respond. Before commencing enquiry, IC may and at the request of aggrieved women, take steps to settle the matter through conciliation. No monetary settlement shall be made as a basis of conciliation.

3. Where settlement has been arrived through conciliation, IC shall record the settlement so arrived at and forward the same to the Company to take appropriate actions and provide the copies of the same to the parties.

4. After settlement, no further inquiries shall be conducted by IC. In case no settlement is agreed between the parties, IC shall proceed with the inquiry proceedings. IC shall complete the inquiry within a period of three months after registration of complaint. The parties shall not be allowed to bring in any legal practitioner to represent them in their case at any stage of the proceedings before the IC. IC shall provide every reasonable opportunity to

the complainant and accused for putting forward and defending their respective case.

5. According to Rule 7(5) of the Rules, the IC shall have the right to terminate the inquiry proceedings or to give an ex-parte decision on the complaint if the complainant or accused fails without sufficient cause, to present herself or himself for three consecutive hearings. For conducting the inquiry, a minimum of three members of IC including the President/Chairperson are required. After completion of an inquiry, IC shall provide its report to the company and the parties within 10 days from completion of inquiry. In case allegation is not proved, no action is required to be taken in the matter.

6. In case the allegation is proved, IC shall recommend the company to:

i. take action for sexual harassment as a misconduct in accordance with service rules or manner as may be prescribed;

ii. deduct from the salary or wages of the respondent such sum as it may consider appropriate to be paid to the aggrieved woman or to her legal heirs having regard to the (a)mental trauma, pain, suffering and emotional distress caused to the aggrieved woman;(b) loss in the career opportunity due to the incident of sexual harassment; (c) medical expenses incurred by the victim for physical or psychiatric treatment;(d)the income and financial status of the respondent; and (e) feasibility of such payment in lump sum or in instalments. The company shall act upon the recommendations of IC within 60 days of receipt from IC.

1. The disciplinary action by the company may include a written apology, warning, reprimand or censure, withholding of promotion, withholding of pay rise or increments and termination of employment.

2. In case any such conduct amounts to specific offence under the Indian Penal Code or under any other law, the company may initiate appropriate action in accordance with the law by lodging a complaint with the appropriate authority.

3. In case of any malicious/false allegations or false evidence or where documents produced are found to be forged / misleading, the ICC may recommend to the company to take appropriate action against such person, in accordance with the service rules or in such manner as may be prescribed.

Section 18 – Appeal

Any person aggrieved from the recommendation made by IC/Local Compliant Committee, may appeal to the appellate authority notified by the respective State Government under the Industrial Employment (Standing Orders) Act, 1946.

Confidentiality

The contents of the complaint, the identity and addresses of the aggrieved woman, respondent and witnesses, any information relating to conciliation and inquiry proceedings, recommendations of the IC and the action taken by the

Every District Officer shall constitute in the district concerned, a committee to be known as the ‘Local Compliant Committee’ to receive complaints of sexual harassment from establishments where the IC has not been constituted due to less than ten workers or if the compliant is against the employer himself.



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Section 19 – Duties of employer

Every employer is required to carry out the following duties so as to ensure there is no offence of sexual harassment at workplace with women: -

a. Provide a safe working environment at the workplace which shall include safety from the persons coming into contact at the workplace;

b. Display at any conspicuous place in the workplace, the penal consequence of sexual harassments; and the order constituting the IC Members. Further, where the offices or administrative units of the workplace are located at different places or divisional or sub-divisional level, the IC shall be constituted at all administrative units or offices.

c. Organize workshops and awareness programmes at regular intervals for sensitizing the employees with the provisions of the Act and orientation programmes for the members of the Internal Committee in the manner as may be prescribed.

d. Provide necessary facilities to the IC for dealing with the complaint and conducting an enquiry.

e. Assist in securing the attendance of respondent and witnesses before the Internal Committee.

f. Make available such information to the IC as it may require having regard to the complaint made.

g. Provide assistance to the woman if she so chooses to file a complaint in relation to the offence under the Indian Penal Code or any other law for the time being in force.

h. Cause to initiate action, under the Indian Penal Code, 1860 or any other law for the time being in force, against the perpetrator, or if the aggrieved woman so desires, where

the perpetrator is not an employee, in the workplace at which the incident of sexual harassment took place

i. Treat sexual harassment as misconduct under the service rules and initiate action for such misconduct.

j. Monitor the timely submission of reports by the IC.

Section 26 - Penalty for non-compliance with provisions of Act

An employer can be subjected to a penalty of up to Rs.50,000/- if the employer:

i. Fails to constitute Internal Complaints Committee;

ii. Fails to act upon recommendations of the Complaints Committee; or

iii. Fails to file an annual report to the District Officer where required; or

iv. Contravenes or attempting to contravene or abetting contravention of the Act or Rules.

Where an employer repeats a breach under the Act, the employer shall be subject to:

i. Twice the punishment or higher punishment if prescribed under any other law for the same offence;

ii. Cancellation/Withdrawal/Non-renewal of registration/license required for carrying on business or activities.

INDICATIVE COMPLIANCES APPLICABLE UNDER THE ACTFollowing is the indicative list of compliances that every applicable organization is required to carry out in order to ensure compliance with the requirements of the Act and Rules:

Sr. No. Particulars Time limit Actions required to ensure compliance

1. To formulate an Anti-Sexual Harassment Policy (“Policy”) for the organization

Immediate Policy to be formulated in compliance with the Act.

2. To constitute an Internal Complaints Committee Immediate An ‘Internal Complaints Committee’ (“IC”) to hear and redress grievances pertaining to sexual harassment. The constitution of IC is prescribed under the Act.

3. Annual Report sent by the IC to the employer and District Officer containing details of the sexual harassment proceedings

Annually (for each calendar year)

To be furnished in the prescribed format.

4. Disclosure in the Director’s Report (in case of a company registered under the Companies Act, 1956 or Companies Act, 2013, as the case may be)

Annual (at the time of preparing Directors’ Report)

a. A statement to be included in Directors’ Report that the company has complied with provisions relating to the constitution of Internal Complaints Committee under the Act;

a. the number of complaints received, disposed of, pending more than ninety days, number of workshops or awareness programme against sexual harassment carried out during the year



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Immediate To incorporate in the employment contracts/ HR policy/ Sexual harassment policy.

6. Issue certificate from the employees to evidence compliance

Periodic The certificate should be in the form of a declaration which states that the employee has not experienced any incident of sexual harassment in the organization.

7. Display of posters/ notices in prominent places in the premises of the organization informing employees about zero-tolerance towards sexual harassment

Immediate Posters with graphics can be prepared. The posters must also contain the information of the members of the IC.

8. To conduct workshops and seminars to inform the employees about their rights

Periodic The format in which the workshops/ seminars can be decided by the organization

9. Capacity-building programmes for the members of IC

Periodic Training should be given to members of IC for conducting sexual harassment proceedings

10. Informing new joinees about the zero-tolerance policy towards sexual harassment

Need based The new joinees in the organization should be given sufficient training and information on what constitutes sexual harassment

11. Prohibition from using the information technology assets for indulging in sexual harassment

Immediate In the changed circumstances due to the pandemic a lot of organizations are working from home. The trend might even continue in the longer run. Therefore, sufficient modifications/ additions should be made in the new and existing any Policy to incorporate situations to cover instances of sexual harassment via information technology.

12. Monitoring the performance and functioning of the IC

Periodic Necessary knowledge is to be imparted including information as to amendments and judgments on the law

13. Assistance to be given to the aggrieved employee to initiate criminal complaint in the police station

Need based Guidance to be given to employee as to how to proceed with the filing of a FIR

14. Implementation of gender-neutral policies to afford adequate protection to male employees as well

Non- mandatory Guides for male and transgender employees and formulation of gender-neutral versions of the sexual harassment policy

15. Policy to be made applicable to all the offices including the main branch of the organization

Immediate Sufficient knowledge between branches of the organization should be ensured to guarantee compliance at all levels

INTERNATIONAL RECOGNITIONThe United Nations General Assembly adopted an international treaty at its Convention held in 1979 on the Elimination of all Forms of Discrimination Against Women (CEDAW). This treaty was instituted on September 3, 1981 and has been ratified by 189 states. India ratified this treaty on June 25, 1993. It recognizes protection against sexual harassment and the right to work with dignity are universally recognized human rights.

On June 19, 2015, the United Nations General Assembly proclaimed June 19 of each year the International Day for the Elimination of Sexual Violence in Conflict, in order to raise awareness of the need to put an end to conflict-related sexual violence, to honour the victims and survivors of sexual violence around the world and to pay tribute to all those who have courageously devoted their lives to and lost their lives in standing up for the eradication of these crimes.

CONCLUSION:The world has changed drastically ever since women started working. The traditional society discouraged women to work but today’s society provides equal opportunities of work for both men and women. This in turn resulted in increase in offences relating to sexual harassment of women at workplace. Many countries including India had to enact laws to prevent such offences. But the instances of offences relating to sexual harassment of women at workplace still occur. The time has come to create awareness against such offences by educating the people at large and also devising a mechanism which could provide timely imparting justice to the victims. The success of the implementation of the Act not only depends on the Government but also with every individual who visit their workplace. In a corporate organization, the success of implementation of the Act depends on the united efforts of all the departments, divisions, branch offices, manufacturing units, top management officials, employees, etc. CS



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INTRODUCTION

“A shareholder puts his money into a company on certain conditions. The first of them is that the business in which he invests shall be limited to certain definite objects. The second is that it shall be carried on by certain persons elected in a specified way. And the third is that the business shall be conducted in accordance with certain principles of commercial administration defined in the statute which provide some guarantee of commercial probity and efficiency. If shareholders find that these conditions or some of them are deliberately and consistently violated and set aside by the action of a member and official of the company who wields an overwhelming voting power, and if the result of that is that, for the extrication of their rights as shareholders, they are deprived of the ordinary facilities which compliance with the Companies Acts would provide them with, then there does arise, in my opinion, a situation in which it may be just and equitable for the Court to wind up the company.”

- Lord President of the Session (Lord Clyde) in Baird v Lees

T he Hon’ble Supreme Court quoted the above passage in their Judgment in the above case. The Hon’ble Supreme Court delivered its judgment in the above case on 26th

March, 2021. The Judgement covers very important aspects

Important Learnings from the Judgment of the Hon'ble Supreme Court in Civil no. 440-441 of 2020[Tata Consultancy Services Limited (Appellants) versus Cyrus Investments Pvt. Ltd and Ors (Respondents)]

In the Civil Appeal titled as “Tata Consultancy Services Limited versus Cyrus Investments Pvt. Ltd and ORS.”, the Apex Court, inter alia, dealt at length with Prevention of Oppression and Mismanagement under Sections 241 and 242 of the Companies Act, 2013. It is held that “small shareholders” are different from “minority shareholders” and that the right to claim proportionate representation is available only to “small shareholders” and not to “minority shareholders”.

Vadapalli Srinivas, FCS Navi [email protected]

relating to management of affairs of a Company. Some of the observations given in the article are reproduced verbatim as they are in the Judgment while some observations are stated in simple form.

A. Chapter XVI of the Companies Act, 2013 deals with Prevention of Oppression and Mismanagement. For the purpose of this article, a reference to Section 241 and Section 242(1) of the Act, 2013 is helpful.

241. Application to Tribunal for relief in cases of oppression, etc.

(1) Any member of a company who complains that—

(a) the affairs of the company have been or are being conducted in a manner prejudicial to public interest or in a manner prejudicial or oppressive to him or any other member or members or in a manner prejudicial to the interests of the company;

or

(b) the material change, not being a change brought about by, or in the interests of, any creditors, including debenture holders or any class of shareholders of the company, has taken place in the management or control of the company, whether by an alteration in the Board of Directors, or manager, or in the ownership of the company’s shares, or if it has no share capital, in its membership, or in any other manner whatsoever, and that by reason of such change, it is likely that the affairs of the company will be conducted in a manner prejudicial to its interests or its members or any class of members, may apply to the Tribunal, provided such member has a right to apply under section 244, for an order under this Chapter.

(2) The Central Government, if it is of the opinion that the affairs of the company are being conducted in a manner prejudicial to public interest, it may itself apply to the Tribunal for an order under this Chapter.

242. Powers of Tribunal: (1)If, on any application made under section 241, the Tribunal is of the opinion—

ARTICLES PART - III


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(a) that the company’s affairs have been or are being conducted in a manner prejudicial or oppressive to any member or members or prejudicial to public interest or in a manner prejudicial to the interests of the company;

and

(b) that to wind up the company would unfairly prejudice such member or members, but that otherwise the facts would justify the making of a winding-up order on the ground that it was just and equitable that the company should be wound up,

the Tribunal may, with a view to bringing to an end the matters complained of, make such order as it thinks fit.

B. The corresponding provisions relating to Prevention of Oppression and Mismanagement existed under Chapter VI of the Companies Act, 1956. The original words “Company Law Board” have been substituted by “Tribunal” under the Companies (Second Amendment) Act, 2002. For the purpose of this Article, Section 397 of the Companies Act, 1956 is quoted hereunder:

397. APPLICATION TO TRIBUNAL FOR RELIEF IN CASES OF OPPRESSION:

(1) Any members of a company who complain that the affairs of the company are being conducted in a manner prejudicial to public interest or in a manner oppressive to any member or members (including any one or more of themselves) may apply to the Tribunal for an order under this section, provided such members have a right so to apply in virtue of section 399.

(2) If, on any application under sub-section (1), the Tribunal is of opinion-

(a) that the company’s affairs are being conducted in a manner prejudicial to public interest or in a manner oppressive to any member or members; and

(b) that to wind up the company would unfairly prejudice such member or members, but that otherwise the facts would justify the making of a winding up order on the ground that it was just and equitable that the company should be wound up;

the Tribunal may, with a view to bringing to an end the matters complained of, make such order as it thinks fit.

C. The Hon’ble Apex Court delivered its judgement on 26th March 2021 in the famous case of Tata Consultancy Services Limited (Appellants) versus Cyrus Investments Pvt. Ltd and Ors (Respondents). An attempt is made to highlight some of the notable observations of the Hon’ble Apex Court, having regard to the Company Law.

D. Under Section 153C (4) of the Companies Act, 1913, Section 397(2) of the Companies Act, 1956 and under Section 242(1) of the Companies Act, 2013, the court is ordained, generally to pass such orders “with a view to bringing to an end the matters complained of.” Therefore, at the stage of granting relief in an application under these provisions, the final question that the Court should ask itself is as to whether the order to be passed will bring to an end the matters complained of.

E. An analysis of the provisions of Section 241(1)(a) read with clauses (a) and (b) of Section 242(1) shows that a relief under these provisions can be granted only if the Tribunal is of the opinion –

(1) That the Company’s affairs have been or are being conducted in a manner-

a. Prejudicial to any member or members OR

b. Prejudicial to public interest OR

c. Prejudicial to the interests of the Company OR

d. Oppressive to any member or members AND (2) That though the facts would justify the making of a

winding up order on the basis of just and equitable clause, such a winding up would unfairly prejudice such member or members.

F. That failed business decisions and the removal of a person from Directorship can never be projected as acts oppressive or prejudicial to the interests of the minorities, is too well settled.

G. A person who tries to set his own house on fire for not getting what he perceives as legitimately due to him, does not deserve to continue as a part of any decision making body (not just the Board of a Company).

H. In a petition under Section 241 of the Companies Act, the Tribunal cannot ask the question whether the removal of a Director was legally valid and / or justified or not. The question to be asked is whether such a removal tantamount to a conduct oppressive or prejudicial to some members. Even in cases where the Tribunal finds that the removal of a Director was not in accordance with law or was not justified on facts, the Tribunal cannot grant a relief under Section 242 unless the removal was oppressive or prejudicial.

I. In cases where the removal of a Director has been carried out perfectly in accordance with law but as a part of larger design to oppress or prejudice the interests of some members, only in such cases the Tribunal can grant a relief under Section 242.

J. The Company Tribunal is not a labour court or an Administrative Tribunal to focus entirely on the manner of removal of a person from Directorship.



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Under Section 241 of the Companies Act, the Tribunal cannot ask the question whether the removal of a Director was legally valid and / or justified or not. The question to be asked is whether such a removal tantamount to a conduct oppressive or prejudicial to some members. Even in cases where the Tribunal finds that the removal of a Director was not in accordance with law or was not justified on facts, the Tribunal cannot grant a relief under Section 242 unless the removal was oppressive or prejudicial.

K. The Post of Executive Chairman is not statutorily recognized or regulated while the post of a Director is. The proviso to Section 179(1) prohibits the Board from exercising any power that could be exercised by the Company only in a General Meeting. The designation of a person as Executive Chairman, is not one of the functions to be performed in a general meeting under the Act. [Companies Act].

L. Sections 241 and 242 of the Companies Act, 2013 do not specifically confer the power of reinstatement. The following words at the end of sub-section (1) of Section 242 “the Tribunal may, with a view to bringing to an end the matters complained of, make such order as it thinks fit” cannot be interpreted as conferring on the Tribunal any implied power of directing reinstatement of a director or other officer of the Company who has been removed from such office.

M. Sections 241 and 242 do not permit the Tribunal to read into the Sections, a power to make an order for reinstatement which is barred by Section 14 of the Specific Relief Act, 1963.

N. Tribunal cannot make an order enforcing a contract which is dependent on personal qualifications such as those mentioned in Section 149 (6) of the Companies Act, 2013.

O. For invoking Section 241, it is necessary that the affairs of the Company should have been conducted or are being conducted in a manner oppressive or prejudicial to some of the members. Section 241 (1)(a) provides for a remedy, only in respect of past and present conduct or past and present continuous conduct. It is impermissible in law to stretch Section 241 (1) (a) to cover the likelihood of a future bad conduct. Section 241 is not intended to discipline a Management in respect of a possible future conduct.

P. A person who willingly became a shareholder and thereby subscribed to the Articles of Association

and who was a willing and consenting party to the amendments carried out to those Articles, cannot later on turn around and challenge those Articles. The same would tantamount to requesting the Court to rewrite a contract to which he became a party with eyes wide open.

Q. The Tribunal has the power under Section 242 to set aside any amendment to the Articles that takes away recognized proprietary rights of shareholders. But this is on the premise that the bringing up of amendment itself was a conduct that was oppressive or prejudicial.

R. Affirmative voting rights for the nominees of institutions which hold majority of shares in companies have always been accepted as a global norm.

S. Whenever an institution happens to be a shareholder and a notice of a meeting either of the Board or of the General Body is issued, it is but normal for the institution to have an idea about the stand to be taken by them in the forthcoming meeting.

T. The Statute confers upon the members of a company limited by shares, a right to vote in a general meeting, proportionate to their shareholding. Section 152 containing the provisions for the appointment of Directors, does not confer any right to proportionate representation on the Board of any company, be it public or private. However, Section 151 enables “a listed company” to have one Director elected by small shareholders in such manner and on such terms and conditions as may be prescribed. [“Small shareholders” means a shareholder holding shares of nominal value of not more than twenty thousand rupees or such other sum as may be prescribed]. Thus, the right to claim proportionate representation is available only to “small shareholders” and not to “minority shareholders”.

U. The Incorporation of a Private Limited company under the old Acts, the Deeming provisions under Section 43 (A) of the Companies Act, 1956 with effect from 01.02.1975 and the removal of the deeming provisions under Section 43 (A) by Act 53 of 2000 and absence of any deeming provisions under the Companies Act, 2013 similar to Section 43 (A) under the 1956 Act have been elaborately discussed and it is concluded by the Apex Court that Tata Sons is a Private Limited Company.

V. The Apex Court referred to their own judgment in “Ram Parshotam Mittal vs. Hillcrest Realty” wherein it is held that “it is not the records of the Registrar of Companies which determines the status of the Company”. The status of the company is determined by the Articles of Association and the statutory provisions.

W. The Court observed: “a company, however small, however domestic, is a company and not a partnership or even a quasi-partnership”. The Judgment is very extensive and touches upon very crucial aspects of the Companies Act and even discusses the evolution of the Company Law over a period of time in India as well as abroad and various case laws. CS



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INTRODUCTION

R isk is inherent in every business and risk and reward go hand in hand. Business is associated with different types of risks depending upon the nature of business and

they are to be controlled and managed. Without risk neither there is any gain nor growth and hence one should never be averse to risk taking. In the words of Mark Zuckerberg “The biggest risk is not taking any risk... In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks.”

However, management and control of risk is very important. To manage the risk, one has to assess and take calculated risk by working out the risk mitigation measures. Risk management begins with the risk identification, analyzing the risk factors, making assessment of the risk and mitigation of the Risk. Unlike an event management risk management is a continuous process of identifying, evaluating, and assessing the inherent and potential risk, adopting the methods for its systematic reduction in order to sustainable business development. In the present dynamic business environment, the management of various types of risks have gained utmost importance. It is essential to the success of any organization to understand the risk management and to learn and develop the ability to manage such risks.

RISK MANAGEMENT

As per Oxford dictionary Risk Management means “the forecasting and evaluation of financial risks together with the identification of procedures to avoid or minimize their impact.” Risk management encompasses the identification, analysis, and response to risk factors that form part of the life of a business. Effective risk management means attempting to control, as much as possible, future outcomes by acting proactively rather than reactively. Therefore, effective risk

Risk Management and The Recent Amendments in The SEBI Listing Regulations

Sudhakar SaraswatulaVice-President (Corporate Secretarial), Reliance Industries Limited [email protected]

COVID-19 pandemic has reinforced the need for a robust risk management framework. Considering this SEBI has amended Listing Regulations inter-alia providing the constitution and composition of the Risk Management Committee and functioning of the same.

management offers the potential to reduce both the possibility of a risk occurring and its potential impact.

Risk management is the process of making and carrying out decisions that will minimize the adverse effects of risk on an organization. However, by focusing attention on risk and committing the necessary resources to control and mitigate risk, a business will protect itself from uncertainty, reduce costs, and increase the likelihood of business continuity and success.

Risk Management is a part of the corporate strategy and is a key management tool to safeguard the business assets for its use for productive purposes. Risk Management is a logical and systematic process of establishing the context, identifying, analysing, evaluating, treating, monitoring and communicating risks associated with any activity, function or process, in a way that enables an organisation to minimise losses and maximise opportunities. An effective risk management focuses on identifying and assessing possible risks.

Risk may be controllable or uncontrollable. In other words, the systematic risk which stands at macro level is not controllable, but the unsystematic risk which is at micro level is controllable with the risk mitigation techniques. Risk may be broadly segregated as Financial Risk and Non-financial Risk.

� Financial Risk includes Market risk, Credit risk, Liquidity risk, Operational Risk, Legal Risk and Country Risk.

� Non-Financial Risk do not have any immediate financial impact on the business, but its consequences are very serious and later may have the financial impact. This type of risk may include, Business/Industry and Service Risk, Strategic Risk, Compliance Risk, Fraud Risk, Reputation Risk, Transaction risk, Disaster Risk.

Different types of risks exist in the business according to the nature of the business and they are to be controlled, managed and mitigated. Due to rapid changes, various types of risks have emerged viz. compliance risk, legal risk, country risk, operational risk and to ensure the survival, viability and sustainability of business, management of the various types of risks have gained utmost importance.

To mitigate the various types of risks, which a business entity faces, a proper risk management process should be in force. It is a continuous process and is applied across the organization. It is basically the identification of risk areas, assessment thereof, evaluating the impact of such risk, development of risk mitigation techniques, establishing the sound internal control process and continuous monitoring thereof, setting of standards for each process and abnormal variances to be vetted.


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RISK IDENTIFICATION

Risk identification is the first stage of the risk management strategy and it should be a continuous process. With experience and over a passage of time new risks can be identified which need to be mitigated. Correct risk identification ensures effective risk management. If risk managers do not succeed in identifying all possible losses or gains that challenge the organization, then these non-identified risks will become non- manageable. The first task of the risk management is to classify the corporate risks according to different types.

The results of risk identification are normally documented in a risk register, which includes a list of identified risks along with their sources, potential risk responses and risk categories. This information is used for risk analysis, which in turn will support creating risk responses.

RISK ANALYSISAfter identification of the risk parameters, the second stage is of analyzing the risk which helps to identify and manage potential problems that could undermine key business initiatives or projects. To carry out a risk analysis, initially one has to identify the possible threats and then estimate the likelihood that these threats will materialize. The analysis should be objective and should be industry specific.

RISK ASSESSMENTThe next step after identifying the risk, is to have an assessment of each of the risk in quantitative and qualitative terms.

RISK MITIGATIONThe final step after assessment of risk is risk mitigation. Risk mitigation is defined as taking steps to reduce adverse effects. Risk mitigation is the process by which an organization introduces specific measures to minimize or eliminate unacceptable risks associated with its operations. Risk mitigation measures can be directed towards reducing the severity of risk consequences, reducing the probability of the risk materializing, or reducing the organizations exposure to the risk.

RISK STRATEGYThe risk environment is constantly changing and developing and has become a dynamic and an ongoing one. Suitable tools need to be identified to assist with the task of keeping the risk strategy up to date. A key tool is the use of ongoing Control and Risk Self-Assessment (CRSA) procedures.

RESPONSE TO RISKSResponse to risks usually takes one of the following forms:

� Avoidance: A business strives to eliminate a particular risk by getting rid of its cause.

� Mitigation: Decreasing the projected financial value associated with a risk by lowering the possibility of the occurrence of the risk.

� Acceptance: In some cases, a business may be forced to accept a risk. This option is possible if a business entity develops contingencies to mitigate the impact of the risk, should it occur.

ROLE OF THE BOARD OF DIRECTORS IN RISK MANAGEMENT

Board members need to have a good understanding of the risk management, and they have to learn and gain fair amount of knowledge to review company risk management systems and analyze business specific risks. The Board shall be responsible for framing, implementing and monitoring the risk management plan for the company. Boards should perform a formal review of risk management systems, at least once in a year. As part of the annual review, boards should review risk oversight policies and procedures at the Board and Committee levels and assess the risk on an ongoing basis. Risk oversight is the responsibility of the entire Board and the same can be achieved through a review mechanism which inter-alia could include:

� Developing policies and procedures around risk those are consistent with the organization’s strategy and risk appetite.

� Taking steps to foster risk awareness.

� Encourage an organizational culture of risk adjusting awareness.

� Maintenance of a Risk Register.

� A compliance certificate on the identification of risks and establishment of mitigation measures.

Board should ensure integrity of essential reporting and monitoring systems and should ensure clear lines of responsibility and accountability throughout the organization. Board should also establish an efficient internal audit system directly reporting to either Risk Management Committee or to the Audit Committee. However, the board should retain final responsibility for oversight of the company’s risk management system.

Risk Management is a part of the corporate strategy and is a key management tool to safeguard the business assets for its use for productive purposes. Risk Management is a logical and systematic process of establishing the context, identifying, analysing, evaluating, treating, monitoring and communicating risks associated with any activity, function or process, in a way that enables an organisation to minimise losses and maximise opportunities.



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RESPONSIBILITY OF RISK MANAGEMENTCompanies Act, 2013 (‘the Act’) provides for development and implementation of a risk management policy for the company including identification of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company. Risk management policies of the company should reflect the company’s risk profile and should clearly describe all elements of the risk management and internal control system and any internal audit function. A company’s risk management policy should clearly describe the role, responsibilities and accountabilities of the Board of Directors, Risk Management Committee and Audit Committee. Section 134(3)(n) of the Act, provides that Board’s report shall include ‘a statement indicating development and implementation of a risk management policy for the company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company’. However, the Act has not mandated constitution of the Risk Management Committee.

According to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’) the key functions of Board of Directors of a company includes establishment of a Risk policy, Systems for Risk Management and they shall have the ability to ‘step back’ to assist executive management by challenging the assumptions underlying the risk appetite. The Listing Regulations also provides for the company to lay down procedures to inform the Board about the risk assessment and minimization procedures. The Board shall be responsible for framing, implementing, and monitoring the risk management plan for the company. The Management Discussion and Analysis section of the annual report shall include discussion on Risks and related concerns of the company.

AMENDMENT TO SEBI LISTING REGULATIONSSEBI has constituted Uday Kotak Committee in June 2017 with an objective to improve upon the standards of Corporate Governance of the listed entities and within a short span of four months the Committee submitted its Report on October 5, 2017. Considering the fact that given the dynamic business environment, to consider, identify mitigate and to resolve the risk, an active risk management committee is imperative

and in view of the increasing relevance of cyber security and related risks, the role of risk management committee should specifically cover this aspect, Uday Kotak Committee proposed certain amendments to the role of Risk Management Committee. Based on such recommendations the following amendments were made to Listing Regulations with respect to the Risk Management Committee

� The requirement of constitution of Risk Management Committee was extended from the top 100 listed entities to the top 500 listed entities on the basis of the market capitalization.

� Role of Risk Management Committee should cover the specific aspect of cyber security risk

� The Risk Management Committee was mandated to meet at least once a year.

COVID-19 pandemic has reinforced the need for a robust risk management framework. Considering this and the multitude of risks faced by the listed entities, risk management has emerged as a very important function of the Board of Directors. In light of the increasing importance of the risk management function, SEBI vide its notification dated May 05, 2021 has amended the Listing Regulations and these regulations shall be applicable from the date of their publication in the official gazette i.e. May 06, 2021. SEBI (Listing Obligations and Disclosure Requirements) (second amendment) Regulations, 2021, amended Regulation 21 under which the listed entities which have listed their specified securities are under an obligation to constitute a Risk Management Committee. The amended Regulation 21 provides regulations with regard to Risk Management Committee as under

CONSTITUTION OF RISK MANAGEMENT COMMITTEEThe Board shall constitute a Risk Management Committee. The provisions of this regulation shall be applicable to the top 1000 listed entities, determined on the basis of market capitalization, as at the end of the immediate previous financial year. To start with the Listing Regulations provided for constitution of the Risk Management Committee for the top 100 listed entities, which has been extended to the top 500 listed entities and is now made applicable to the top 1000 listed entities. Considering the importance of having the Risk Management Committee the Listing Regulations are gradually increasing the applicability of these provisions to the listed entities.



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COMPOSITION OF RISK MANAGEMENT COMMITTEEThe Risk Management Committee shall have a minimum of three members with majority of them being members of the Board of Directors, including at least one independent director and in case of a listed entity having outstanding SR equity shares, at least two thirds of the Risk Management Committee shall comprise independent directors. As against this prior to the amendment of this regulation, majority of the members of the Risk Management Committee shall consist of members of the Board of Directors and in case of a listed entity having outstanding SR equity shares, there is no change as such. Considering the growing importance of Risk Management Committee inclusion of one independent director has been made mandatory. Certainly, the mandatory induction of an independent director strengthens the composition of the committee.

The Chairperson of the Risk management committee shall be a member of the board of directors and senior executives of the listed entity may be members of the committee. This is the only committee under the Listing Regulations which is permitted to have members other than the Board of Directors.

MINIMUM NUMBER OF COMMITTEE MEETINGSThe Risk Management Committee shall meet at least twice in a year. To start with when the committee has to meet was left to the companies and subsequently based on the Kotak Committee recommendation, one meeting in a year was made mandatory which is now mandated to have at least two meetings in a year. Risk management is very critical for any organization and the mandate that the committee shall meet at least twice in a year is an essential and welcome feature.

QUORUM FOR COMMITTEE MEETINGSThe quorum for a meeting of the Risk Management Committee shall be either two members or one third of the members of the committee, whichever is higher, including at least one member of the board of directors in attendance. Previously the quorum requirement was not stipulated by the Listing Regulations.

TIME PERIOD BETWEEN TWO MEETINGSThe meetings of the risk management committee shall be conducted in such a manner that on a continuous basis not more than one hundred and eighty days shall elapse between any two consecutive meetings. This provision clearly ensures that at least one meeting shall be held in every half year.

ROLE AND RESPONSIBILITIES OF RISK MANAGEMENT COMMITTEEThe board of directors shall define the role and responsibility of the Risk Management Committee and may delegate monitoring and reviewing of the risk management plan to the committee and such other functions as it may deem fit. Such other functions shall specifically cover cyber security. However, the role and responsibilities of the Risk Management Committee shall mandatorily include the performance of functions specified in Part D of Schedule II of Listing Regulations as under:The role of the committee shall, inter alia, include the following:

(1) To formulate a detailed risk management policy which shall include:

(a) A framework for identification of internal and external risks specifically faced by the listed entity, in particular including financial, operational, sectoral, sustainability (particularly, ESG related risks), information, cyber security risks or any other risk as may be determined by the Committee.

(b) Measures for risk mitigation including systems and processes for internal control of identified risks.

(c) Business continuity plan.

(2) To ensure that appropriate methodology, processes and systems are in place to monitor and evaluate risks associated with the business of the Company.

(3) To monitor and oversee implementation of the risk management policy, including evaluating the adequacy of risk management systems.

(4) To periodically review the risk management policy, at least once in two years, including by considering the changing industry dynamics and evolving complexity.

(5) To keep the board of directors informed about the nature and content of its discussions, recommendations and actions to be taken.

(6) The appointment, removal and terms of remuneration of the Chief Risk Officer (if any) shall be subject to review by the Risk Management Committee.

The Risk Management Committee shall coordinate its activities with other committees, in instances where there is any overlap with activities of such committees, as per the framework laid down by the board of directors.

Though the Board of Directors are empowered to define the role and responsibilities of the Risk Management Committee, the Listing Regulations have stipulated the major functions which are to be included.

Companies Act, 2013 (‘the Act’) provides for development and implementation of a risk management policy for the company including identification of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company. Risk management policies of the company should reflect the company’s risk profile and should clearly describe all elements of the risk management and internal control system and any internal audit function



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POWERS OF THE RISK MANAGEMENT COMMITTEEThe Risk Management Committee shall have powers to seek information from any employee, obtain outside legal or other professional advice and secure attendance of outsiders with relevant expertise, if it considers necessary

DISCLOSURE OF COMPOSITION OF COMMITTEE IN ANNUAL REPORTThe composition of the Risk Management Committee shall be disclosed in the Corporate Governance section of the annual report and the following details shall be disclosed(a) brief description of terms of reference(b) composition, name of members and chairperson(c) meetings and attendance during the year

ACTION TO BE TAKEN BY THE LISTED ENTITIES TO COMPLY WITH THE AMENDED PROVISIONS� The listed entities which have fallen under Regulation 21

shall constitute a Risk Management Committee

� The listed entities to review the Committee composition and make necessary changes if so required

� To review and amend the Risk Management Policy wherever required

� The Terms of reference of the Risk Management Committee to be amended in line with quorum requirement, role of the Committee, minimum number of meetings of

the committee to be held, gap between two meetings of the Committee and Powers and Responsibilities of the committee.

� To disclose the composition of the Committee in the annual report of the listed entity

Though the amendments came into force effective May 6, 2021 no timelines were determined by which the compliance with the amended regulations is to be ensured. Considering the requirement of filing the quarterly return of Corporate Governance under Regulation 27 of the Listing Regulations, ideally the compliance is to be ensured by the end of the first quarter i.e. end June 2021

CONCLUSIONBusinesses evolve and are exposed to changing dynamics of the external environment. Hence it is important to have the risk oversight function, as one of the areas of responsibility of the board of directors of any enterprise. It is very important for the Board of Directors to have a separate committee to support its function depending on the complexities of the business enterprise and the complexities associated with its transactions and events. The risk management committees have an important role to play in the overall risk governance framework. Apart from monitoring the company’s strategic-risk profile on an on-going basis, such committees would also be responsible for defining the company’s overall risk appetite; approving major transactions above a company’s risk threshold, and establishing limit structures and risk policies for use within individual businesses. The amended provisions of Regulation 21 of the SEBI Listing Regulations are very essential and crucial for the Risk Management Committee. CS



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INTRODUCTION

O n 22 January 2021 provisions of the Companies (Amendment) Act 2019 and 2020 amending section 135 of the Companies Act, 2013 (the Act) and

corresponding amendments in the Companies (Corporate Social Responsibility - CSR) Rules 2014 became effective. Since these amendments became effective, many different questions were raised by some friends such as (a) if company does COVID tests/ vaccinations for employees of its group companies will it be considered as CSR? (b) if company gifts some medical equipment to some private hospital will it be considered as CSR? (c) if company runs COVID Vaccine drives for its distributors would that be considered as CSR? When I was trying to answer these questions it reminded me about wisdom as old as minimum 5000 years on this subject. Yes, you are right! I am referring to guidance given by Lord Shree Krishna on the subject of spending for the needy (Dana). Even after 5000 years those statements still act as torch bearer for entire human kind and particularly Corporate Wold, only thing is we will have to read it in context!

TYPES OF CHARITIES IN BHAGAVAD GITA

In 17th Adhyaya, Lord Shree Krishna describes 3 types of charities which are as follows –

XmVì`[_[V `X²XmZ§ Xr`Vo@ZwnH$m[aUo &Xoeo H$mco M nmÌo M VX²XmZ§ gm{ÎdH§$ ñ_¥V_² &&17.20&&

Meaning – Charity given out of feeling of duty, without any expectation of return, at the proper time and place and to worthy person in considered to be in the mode of goodness.

`Îmw àË`wnH$mamWª \$c_wX²{Xí` dm nwZ: &Xr`Vo M n[apŠcï§ VX²XmZ§ amOg§ ñ_¥V_² &&17.21&&

CSR in context of Bhagavad Gita!

Makarand Joshi, FCSPractising Company [email protected]

Recent change in Section 135 and corresponding rules is laying down best practices and is channelizing CSR in a more policy-process driven social work. There is very close resemblance of teaching of recent CSR amendments and Satvik Dana in Bhagavad Gita. This article elaborates teachings of Bhagavad Gita and connects it to various styles/approach in which a corporate try to do CSR and subsequent logical outcome of that.

Meaning – Charity performed with expectation of some return or with a desire of fruitive results or in grudging mood is said to be charity in the mode of passion.

AXoeH$mco `X²XmZ_nmÌoä`íM Xr`Vo &AgËH¥$V_dkmV§ VÎmm_g_wXmöV_² &&17.22&&

Meaning – Charity performed at an impure place, at an improper time to un worthy person or without proper attention and respect is said to be done in the mode of ignorance.

For understanding meaning of these shlokas, we first need to understand about three modes [Triguna] which are explained in Gita.

THREE MODES

Bhagavad Gita in 5th Shloka of 14th Adhyay says -

gÎd§ aOñV_ B[V JwUm: àH¥$[Vgå^dm: &[Z~ÜZpÝV _hm~mhmo Xoho Xo[hZ_ì``_² &&14.5&&

There are three modes (Triguna) and these modes influence behaviour/ conduct of every human being. There are following three modes -

1. Mode of goodness (satva)2. Mode of passion (raja)3. Mode of ignorance (Tama)

Which one out of 3 modes is dominant mode in personality of human being determines the thinking, behaviour of that person. Further his/ her conduct will decide his/her destiny. For example, person with dominant mode of goodness will be always be surrounded by wise people (14.14), person with dominant mode of passion will always be surrounded by greedy people (14.15) and person with mode of ignorance will be surrounded by people with qualities of animals (14.15). Mode of passion is born of unlimited desires (14.07) and the result of mode of ignorance is madness, blunder and excess sleep etc. (14.08).

In 17th Adhyay, Lord Shree Krishna describes three different types of diet, sacrifice/ work, austerity, charity in context of 3 modes i.e. mode of goodness/ passion or ignorance. Lord Shree Krishna narrates that the way a human being eats (Aahar), does work without expectation/ sacrifice (Yadnya), practices austerity (Tap) and does charity (Dana), he will acquire dominance of these three modes in his personality. Characteristic of persons/ entity dominated by any of these three modes and result of their behaviour/ destiny is explained below:


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by purposeSustainable success, peace and Happiness Wisdom

Mode of Passion Lot of buziness Greed Endless wish for pleasure Sorrow and griefMode of Ignorance Blind attachment Indiscipline Erratic behaviour Confused Egoistic

Having understood the concept of 3 modes, its impact on behaviour and destiny and how 3 different ways of charity determine the mode which is dominating our personality, let us understand how these are closely connected with CSR.

CHARITY PERFORMED IN MODE OF GOODNESS [SATVIK DANA] AND CSR

Corporate is concept of modern world which has separate legal entity (and destiny as well!). As a responsible citizen, corporates are expected to meet its obligation towards society and environment as a duty and not as favour. Modern concept of CSR is manifestation of charity performed in the mode of

goodness! If we see the expectation of section 135 of the Act read with Companies (Corporate Social Responsibility) Rules, 2014 we will be surprised to see close resemblance of 5000 year old principles and modern CSR Principles!

Let’s compare expectations of Gita and CSR provisions –

XmVì`[_[V `X²XmZ§§ Xr`Vo@ZwnH$m[aUo &Xoeo H$mco M nmÌo M VÔmZ§ gmË[ËdH§$ ñ_¥V_² &&17.20&&

Meaning – Charity given (1) out of feeling of duty, (2) without any expectation of return, (3) at the proper time and (4) place and to (5) worthy person in considered to be in the mode of goodness [Satva].

Expectation of Gita Expectation of CSR Rules Section Rule

Charity as his duty Doing CSR to the extent of minimum 2% of profits every year is mandatory

135(5), (6) -

Since it is duty (obligation) non-performance of it attracts penalty provisions

135(7) + 450 -

Charity without expectation Definition of CSR specifically excludes activities • In normal course of business or deriving marketing benefits• Benefiting employees of the Company • Meeting statutory obligations of the Company

- Rule 2(d)

Charity at Right place / Cause Activities should be carried out in India1 except activities for training of Indian Sports personnel representing any State or Union territory at national level or India at International Level

- Rule 2(d)

Preference should be given to local area First proviso section 135(5)

-

CSR Activities should permissible under Schedule VII of the Act2

CSR Activities should be permissible as per CSR Policy of the Company

135(3) & (4) -

Activities making measurable positive impact under impact assessment

- Rule 8 (3)

Activities for social cause and not for profit. Profits made in pursuance of CSR activities should be ploughed back for CSR

- Rule 7 (2)

Charity at right time Company needs to undertake CSR activities and spend 2% of its average profits of last 3 years on those activities each year

135(4) + 135(5)

-

Companies once triggers compliance of mandatory CSR will have to continue for minimum 3 years, even if subsequently its performance is down and is not meeting thresholds under section 135(1)

135(1)

135(5)

Rule 3(2)

CSR Committee and Board of Directors of the Company needs to approve Annual Action Plan and plan activities for the whole year

- Rule 5(2)

1 As per UN, India needs to invest in social development goals to ensure inclusive growth2 Schedule VII covers all thrust areas which are identified by UN in Social Development Goals.



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LECharity to right person Activities benefiting employees is not considered as CSR - Rule 2(d)

Contribution of any amount directly or indirectly to any political party is not considered as CSR

- Rule 2(d)

Implementation Agency should have valid registration under section 12A and 80G of Income Tax Act, 1961 Or an entity established by Centre or State Government

- Rule 4(1)

Implementation Agency should be registered with Ministry of Corporate Affairs

- Rule 4(2)

Only non-profit distributing entity is allowed to act as Implementing Agency

- Rule 4(1)

International Organisation is not allowed to act as Implementing Agency.

- Rule 4(3)

In short, CSR provisions of the Act are actually laying down minimum standards of best practices while doing CSR which are very close to mode of goodness described in Gita. In fact Lord Shree Krishna explains secret of sustainable success, peace and happiness in 16 Adhyay – 23 Shloka as follows -

`… emñÌ[d[Y_wËg¥Á` dV©Vo H$m_H$maV…&Z g [g[Õ_dmßZmo[V Z gwI§ Z nam§ J[V_²&&16.23&&

Meaning of ‘Shastra’ here is scientific processes which are prescribed and/ or evolved as best practices over the period, arising out experience or teachings of wise people/ institutions. One who does not follow (best/ prescribed) processes and acts according to his own whims will not get sustainable success, peace and happiness and vice versa. In short if CSR is done as per prescribed / best practices/ processes will give sustainability, peace and happiness.

CSR performed in mode of Passion [Rajas Dana]

`Îmw àË`wnH$mamWª \$c_w[Ôí` dm nwZ: &Xr`Vo M n[apŠcï§ VÔmZ§ amOg§ ñ_¥V_² &&17.21&&

Meaning – Charity performed with expectation of some return or with a desire of fruitive results or in grudging mood is said to be charity in the mode of passion.

Any company doing CSR with a passion to derive some material benefits for itself is a CSR performed in a mode of passion. Some examples of CSR done in mode of passion can be as follows –

1. When company feels doing CSR is not its duty and it is unnecessary burden

2. When company undertakes CSR activities to derive benefit from it like –

� promotion or penetration of its products to masses

� disposing slow moving items freely as CSR

� activities fetching loyalty of distributors/ suppliers/ service providers to the company or Group

� activities benefiting its/ groups employees/ contract labour / temporary labour

� activities giving political mileage

� activities which are actually statutory obligations

� activities developing supply chain or distribution channel

� activities indirectly benefiting promoters and promoter group

� activities indirectly benefiting expansion of market for the Company

� activities attributed towards changing habits of masses to benefit company products / services

3. When Company undertakes activities without following proper process and are blinded with motive to derive benefits

There can be many examples of such attempts to undertake CSR activities to directly/ indirectly benefit the Company economically. However, we need to remember that activities (a) benefiting employees (b) activities in normal course of business (c) activities supported by the companies on sponsorship basis for deriving marketing benefits for its products / services are specifically excluded from term CSR. Companies would also be cautious about the fact that section 135(7) makes violation of section 135(5) an adjudicatable non-compliance. This means penalty levying power is going

As a responsible citizen, corporates are expected to meet its obligation towards society and environment as a duty and not as favour. Modern concept of CSR is manifestation of charity performed in the mode of goodness! If we see the expectation of section 135 of the Act read with Companies (Corporate Social Responsibility) Rules, 2014 we will be surprised to see close resemblance of 5000 year old principles and modern CSR Principles!



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to be with Ministry of Corporate Affairs (MCA) and any such penalty levied on the Company can certainly bring disrepute and can cause much higher losses and thereby grief/ stress.

CSR performed in mode of Ignorance [Tamas Dana]

AXoeH$mco `ÔmZ_nmÌoä`ü Xr`Vo &AgËH¥$V_dkmV§ VÎmm_g_wXmöV_² &&17.22&&

Meaning – Charity performed at an impure place, at an improper time to unworthy person or without proper attention and respect is said to be done in the mode of ignorance.

Any company doing CSR through wrong implementing agency/ at wrong time /at wrong place/ for wrong person without following proper process/ diligence or without giving respect to the cause is CSR in the mode of Ignorance. Some examples of such CSR are as follows –

1. Drawing cheques in the name of implementing agencies in last few days of the financial year and claiming it as spend in the annual report without giving time for implementation and without verifying utilisation towards CSR activities [wrong time/ wrong process]

2. Disbursing amount towards CSR without verifying 12A, 80G certificate of Implementing Agency [wrong process / lack of diligence]

3. Disbursing CSR amount to Implementing Agency which is not registered with MCA [wrong process / lack of diligence]

4. Disbursing CSR amount to Implementing Agency for undertaking project which is not approved in Annual Action Plan by CSR Committee and by the Board of Directors of the Company [wrong process / no respect for the process or cause]

5. Satisfying about utilisation of disbursed amount based on certification provided by implementing agency itself. This indicates absence of adequate process and lack of respect for the cause.

6. Disbursement of further amount towards CSR without verifying whether earlier disbursed amount has been utilised in the manner and for the purpose specified by CSR Policy and Annual Action Plan. [Lack of diligence, monitoring and respect for the cause]

7. Engaging Implementing Agency which does not have credentials to carry out project approved by CSR Committee [lack of diligence]

8. Manipulation and mis-representation of administrative expenditure as project Cost (lack of Monitoring)

9. Engaging Implementing Agency whose office bearers are charged with moral turpitude [lack of diligence]



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LE10. Implementing Agencies resorting to corrupt and

fraudulent practices in order to complete the project (lack of monitoring)

11. Implementing Agencies are in turn engaging entities, which are owned by promoters of the donor company or implementing agency, for actual undertaking projects. (Conflict of Interest and Lack of Monitoring)

If company does not verify correctness of registration of 12A and 80G or registration with MCA and provides details in Boards Report, it may be considered as mis-representation on the part of the Company. If Implementing Agency engages any entity for undertaking project which is related party to the donor company it would be related party transaction with donor company and requires necessary compliance like approval of audit committee of the donor company. If the transactions are entered without proper processes, it would trigger adjudication process under section 188 of the Act and may trigger disqualification and/ or vacation of Directorship for the concerned Director. This may also trigger personal liabilities to Directors and Key Managerial Persons of the Company under section 447 and 448 of the Act. In nutshell, if proper processes are not followed by the Company and its management it might give sleepless nights and unnecessary stress and result in financial loss by way of penalty.What are benefits of CSR with proper processes [under mode of Goodness]?

In 18th Adhyay Lord Shree Krishna gives formula for success -

A[YðmZ§ VWm H$Vm© H$aU§ M àwW[½d_² &[d[dYmíM àwWŠMoïm X¡d M¡dmÌ nÝM__²&&18.14&&

This rule can be applied in any aspect. We will discuss it in context of CSR. Success / Destiny depend on 5 factors. (1) Our Vision/ Mission/Goal = CSR Policy/ Annual Action

Plan (2) the one who does or who is responsible for it = CSR

Committee/ Board/ KMP (3) the means / tools / techniques = tools / techniques which

Company uses for identifying, implementing, monitoring CSR Projects

(4) various / numerous efforts which the Company/Management take in this regards

(5) our luck which also originated from our own deeds!!!

Here luck means the destiny which gets manifested based on the modes of conduct – goodness/ passion/ ignorance from

which one operates. As mentioned above one who follows proper processes for right cause, right time and does CSR through right person and for right person and does as duty and not derive any economic or other benefit will always get sustainable success. Effective implementation and monitoring of CSR program will

� help companies in mitigating risks like Fraud risk, Reputational risk, Corruption risk, Statutory and Regulatory risk

� such companies will have no mis-match between schedule VII- CSR Policy - Annual Action Plan – Actual project undertaken and money utilised

� these companies will always be able to avoid conflict of interest position and thereby will eliminate any legal risks to promoter/ directors and Key Managerial Persons

� Impact Assessment of these Companies will always reflect impressive results

� Admin overhead will always be within 5% of the total CSR spent

� These companies will attract only genuine implementing agencies

� People working in such organisation would always be surrounded by great minds, will be respected in society/ community. Even if there are any inspections Key Managerial Persons will not lose peace

CONCLUSION

Though Gita is 5000 year old guidance, it is relevant now and will be so even for eternity. We just need to read it in context. As far as sustainable development is concerned, even UN was concerned about it and hence the concept of Sustainable Development Goals emerged providing blueprint for peace and prosperity for people and the planet, now and into the future. A corporate culture of integrity has a positive effect on CSR and the leadership and vice versa. Same was shared by Lord Shree Krishna in Gita when he says that how your behaviour and destiny depends on what you eat, what you work/ sacrifice, how effective are your charities for the real cause. Story can be told from both sides, (1) Company/ management which are influenced by mode of goodness will do CSR as per their nature OR (2) Company which practices CSR as per mode of goodness will have destiny which is narrated above!!! CS

One who follows proper processes for right cause, right time and does CSR through right person and for right person and does as duty and not derive any economic or other benefit will always get sustainable success.



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INTRODUCTION TO TRANSFER PRICING

W hen two entities engage in a transaction relating to exchange of goods or services, a consideration is usually transferred by the party enjoying the benefits.

This consideration is called the “price” of the good or service. However, if the same transaction occurs between two related parties, called Associated Enterprises (AE), located in different tax jurisdictions (countries), then the consideration in this scenario is called the “transfer price”. Transfer Pricing has become an important part of financial management because corporates have become multi-national, thus spreading their transactions to all the countries where they are present. Along with the expansion comes the complexity wherein different countries have different and distinct tax legislations. A particular country might tax a specific transaction at a higher rate, whereas another country might tax the same transaction at a lower rate.

Transfer Pricing and Advance Pricing Agreements in India

Transfer Pricing related tax issues commonly faced by MNCs can sometimes become a hurdle in the smooth functioning of international trade. The Advance Pricing Agreement (APA) programme could potentially help in increasing the business-friendly image of an economy by using the income-tax department as a catalyst in the growth process. This article tries to understand how India’s APA programme has developed over the years since its inception.

Dr. Rajiv V ShahProfessor,T A Pai Management Institute,[email protected]

Ravisankar G.T A Pai Management Institute,Manipal,[email protected]

A Multinational Corporation (MNC) can try to exploit this complexity by designing or planning their transaction structure in a beneficial fashion, leading to a form of tax arbitrage. This eventually means that an affected country might lose its revenue from taxes because of such strategies. This phenomenon is described by the Organization for Economic Co-operation and Development (OECD) as “Base Erosion and Profit Shifting” where MNCs shift their profits from higher tax jurisdictions to lower tax jurisdictions, thus eroding the tax base of higher tax jurisdiction. An example of such arrangements is given below:

The Double Irish, Dutch Sandwich Model

The model depicted above has been adopted by many large MNCs to reduce their tax liabilities. This model’s flaws were scrutinized by the European Union and under its pressure the Irish government has closed the loopholes. In addition, companies with similar existing structures have been advised to dismantle them by 2020.

MECHANICS OF THE MODEL

1. The US parent company sets up a subsidiary in Ireland and provides license to all its Intellectual Properties (IP) to the Irish subsidiary in return for royalty. Further, it allows the Irish company to be controlled and managed from Bermuda.

2. Now the Irish subsidiary sets up two more subsidiaries of its own- one in Netherlands and one in Ireland. Then it sublicenses the IP to its subsidiary in Netherlands which again sublicenses the IP to the Irish company which handles all the non-US based operations as shown in the diagram above.


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If a client from Asia wants its advertisement to be posted on Company X’s online platform. It pays $ 100 for the same. Now as Company X has all its IP located at Irish Opco, it provides the service out of Irish Opco. Then, Irish Opco books revenue of $ 100, retains a small part to cover operating expenses and pays everything to Dutch Holdco as royalty. The Dutch Holdco also retains a very small portion and pays everything to Irish/ Bermudian Holdco as royalty. It is the Irish/ Bermudian Holdco that retains maximum revenue after paying royalty to US parent company and books the maximum profits.

This model is effective because of the following three important factors:

1. The Irish government taxes the corporates at a rate of 12.5%. However, as per the Irish law if a company is established in Ireland but controlled from elsewhere, it will become the tax resident of the nation from where it is controlled. Hence, the control is shifted to Bermuda so that Irish/ Bermudian Holdco becomes tax resident of Bermuda and pays tax at the Bermudian rate which is nil.

2. The Irish/ Bermudian Holdco does not directly involve in operations because if it did, the “Controlling Foreign Corporation” rule will apply, where US authorities will claim that the Irish entity is controlled by owners from a non-Irish jurisdiction, hence the profits will be taxed in US.

3. The Irish/ Bermudian Holdco sandwiched a Dutch Holdco between itself and the Irish Opco because royalty payment made between Netherlands and Ireland do not attract withholding tax as per the Double Taxation Avoidance Agreement (DTAA) between the nations. If the Irish/ Bermudian Holdco were to receive the payments directly from the Irish Opco it would have attracted withholding tax.

Therefore, through this setup, a sizeable portion of Company X’s revenue is taxed at 0% and all the transfers within the structure avoids the withholding taxes. There are many different such legal arrangements possible to reduce tax expense, but it potentially leads to Base Erosion and Profit Shifting. Hence, governments around the world along with OECD are taking concrete steps to confront these practices.

TP IN THE INDIAN CONTEXTIn the case of India, regulations with respect to Transfer Pricing (TP) were introduced in India vide Finance Act, 2001 through The Income-tax Act, 1961 read along with Income-tax Rules, 1962. Further, the Indian tax authorities refer to OECD Guidelines and United Nations Transfer Pricing (UNTP) Manual as well for TP related matters from time to time. The OECD Guidelines and UNTP Manual guide the actions, while sections 92 to 92F of the Act lay down the key regulations regarding TP.

Section 92(1) of the Act states: “Any income arising from an international transaction shall be computed having regard to the Arm’s Length Price (ALP).” This section lays the foundation for all other sections relating to TP. It states that if an international transaction between AEs result in an income, the same should be calculated and priced at Arm’s Length.

Section 92F(ii) of the Act describes ALP as any price which is applied or proposed to be applied for uncontrolled transactions between persons other than AEs, in an uncontrolled situation, i.e., the fair market value of a transaction. Section 92A of the Act defines AEs. As per section 92A, two entities become AEs if:� One entity participates directly or indirectly or through

intermediaries in the management or control or capital of the other entity, or

� When both the companies have a common party, who participates directly or indirectly or through intermediaries in the management or control or capital of them at the same time.

The other key sections relating to TP are:

� 92B – International transaction� 92C – Computation of ALP� 92D – information and documentation� 92E – Accountant’s report� 92F – Definition of certain terms relevant to computation

of ALPThere have been many amendments and additions to the TP regulations since their introduction in 2001. These amendments have made the regulations more robust by reducing the scope for interpretation. However, there are many cases where the taxpayers and the tax authorities end up in disagreement leading to lengthy litigations. This is mainly due to non-consensus in procedural aspects like usage of a particular method to calculate ALP, selection of comparable, etc.

ADVANCE PRICING AGREEMENTS There is an important tool that can help reduce the litigations relating to TP by proactively addressing the disagreements before the transactions happen. It is known as “Advance Pricing Agreements (APAs)”.

Transfer Pricing has become an important part of financial management because corporates have become multi-national, thus spreading their transactions to all the countries where they are present. Along with the expansion comes the complexity wherein different countries have different and distinct tax legislations. A particular country might tax a specific transaction at a higher rate, whereas another country might tax the same transaction at a lower rate.



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LEMNCs are involved in close to a third of all international trade. Application of transfer prices to international transactions would decide the revenue, income and tax for each of the MNC’s locations and AEs. There is a conflict in the desire of MNCs to reduce tax liability as well as tax litigations. Similarly, there could be a conflict among different economies about the taxation of the transactions as one economy’s benefit could be the reason for another’s loss in terms of tax revenue. This creates tax uncertainty which has been identified as one of the main concerns for MNCs. In view of the rapid growth of foreign trade through MNCs, there is potential for various tax conflicts over the topic of transfer pricing. Stability can be provided if there is a mechanism to anticipate and resolve the potential transfer pricing issues before the cross-border transaction occur, or before disputes arise in connection with these transactions. The Advance Pricing Agreement (APA) programme is one such mechanism where the transfer price of goods and services between related organizations is pre-decided between taxpayers and tax authorities, thereby attempting to provide taxpayers with certainty in connection with the transfer price of cross-border transactions between group entities. The APA programme aims to enable taxpayers to voluntarily and proactively prevent disputes arising from these transactions in a cooperative manner and has been operational in countries such as Canada, USA, UK and Japan for more than 25 years.

An APA provides certainty relating to the tax impact and outcome of the international transactions of MNCs and other taxpayers. There is a mutual agreement to the ALP and pricing mechanism in advance, for the concerned transactions. This could lead to multiple cost efficiencies. For the taxpayer, compliance costs of tax provisions and costs of appeals and other disputes during the life of the APA could reduce. For tax departments and authorities, administration, monitoring and audit costs are reduced. The reduction of avoidable audit (scrutiny) actions could reciprocally lead to more trust and faith in the system. Financial reporting of accurate tax liabilities is also streamlined and facilitated. The chances of double

taxation can also be reduced due to the communication and coordination among multiple tax authorities in some cases. APAs could be especially useful in transfer pricing issues in areas such as payment of royalty, information technology services and ITES, agency services and commissions, purchase of finished/ semi-finished goods, IPR issues, intra-group transactions, business restructuring decisions, supply chain and procurement transactions, administrative overhead allocations, contract manufacturing and commodity trading.

LEGAL BASE FOR APA PROGRAMME IN INDIAThe APA programme was introduced in India by the insertion of sections 92CC and 92CD in the Income Tax Act vide the Finance Act, 2012. With these sections becoming effective from July 2012, the Central Board of Direct Taxes (CBDT) was provided the legal basis to enter into APAs for a maximum period of five years with taxpayers in respect of international transactions between AEs. The scope of these APAs was to determine the ALP or to specify the manner of determining the ALP. With the insertion and notification of rules 10F to 10T in the Income Tax Rules, the APA scheme was operationalized in August 2012.In 2014, it was decided that the APAs could be rolled back to a maximum of four years prior to the first year of the APA period. This rollback referred to a retrospective application of the specific agreement subject to certain conditions. This provided the taxpayer with certainty on transfer pricing related issues for a maximum of a nine-year block, if the rollback was chosen. The roll back provisions were announced in 2014 and the rules regarding the same were notified in March 2015, thereby amending the APA Scheme.

CLASSIFICATION OF APAsAPAs in India are classified as multilateral or bilateral, and unilateral. In multilateral or bilateral APAs, the parties in addition to the taxpayer involved could be the CBDT and the tax authorities of one or more countries. Unilateral APAs are usually between the taxpayer and the Indian tax authority, i.e., the CBDT only. During the period between July 2012 and March 2019, a total of 1155 APA applications have been filed in India. Of these applications, 944 (about 82%) are currently classified as unilateral APAs and the remaining 211 are currently classified as bilateral/ multilateral APAs. This current classification may not tally with previous figures as many applications are initially filed as unilateral but later, the taxpayers may wish to convert them into bilateral APAs. (A net of 42 APAs have been converted from unilateral to bilateral APAs up to 2019). The table below gives a year-wise breakup of these current figures:

The Advance Pricing Agreement (APA) programme is one such mechanism where the transfer price of goods and services between related organizations is pre-decided between taxpayers and tax authorities, thereby attempting to provide taxpayers with certainty in connection with the transfer price of cross-border transactions between group entities. The APA programme aims to enable taxpayers to voluntarily and proactively prevent disputes arising from these transactions in a cooperative manner and has been operational in countries such as Canada, USA, UK and Japan for more than 25 years.



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Of the total applications till March 2019, 240 unilateral and 31 bilateral applications adding up to a total of 271 applications, have been converted into agreements. Through these signed agreements, a total of 1779 years of tax certainty has been created, which includes 477 years relating to roll back periods. According to a CBDT estimate, if the proportion of cases which could potentially face disputes is taken as 50%, almost 890 litigations can be believed to have been avoided. This is because tax assessments and litigations & appeals are done on an annual basis in India.

However, an area of concern from an administrative perspective could be the average time taken to process the agreements. For example, in 2018-19, 41 unilateral agreements were signed, which took an average time of 45.22 months per agreement. Of these, 41 agreements, only 2 were signed within 12 months and 1 was signed in a time period of 13- 24 months. 15 agreements took a time between 37-48 months. While this processing time is less than that taken by some other countries, it could create a stumbling block for achieving the overall aim of clarity of tax implications and reduction of bureaucratic hurdles in the process.

CONCLUDING REMARKS

The APA programme in India can be a part of the solution to the Transfer Pricing related tax issues commonly faced by MNCs. It is a step in the direction of creating an economy which is perceived as business friendly and where the tax

department could be a catalyst in the growth process. The programme in India has picked up good learnings in the form of best practices from countries which have implemented their programmes a few decades earlier. It has the potential to lead to more seamless international integration for the economy and create confidence among MNCs to look at being a more focused part of the Indian growth story. CS

REFERENCES:1. Advance Pricing Agreement (APA) Programme of India,

Annual Report 2018-19 (2019), Central Board of Direct Taxes, Government of India

2. Advance Pricing Agreement (APA)- A welcome step in transfer pricing disputes, 2016, Neeraj Bhagat & Co., Chartered Accountants

3. Becker, J., Davies, R. B., & Jakobs, G. (2017). The economics of advance pricing agreements. Journal of Economic Behavior & Organization, 134, 255-268.

4. GoI, Income Tax Act, 19615. GoI, Income Tax Rules, 1962

6. https:// tpguidelines.com/tag/double-ir ish-dutch-sandwich/

7. ht tps: / / taxguru. in/ income-tax/advance-pr ic ing-agreements.html



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INTRODUCTION“Nothing we do is more important than hiring people. At the

end of the day, you bet on people, not strategies.”- Lawrence Bossidy

“In order to build a rewarding employee experience, you need to understand what matters most to your people.”

- Julie Bevacqua“To win the marketplace, you must first win the workplace.”

- Doug Conant“Employees engage with employers and brands when

they’re treated as humans.”- Meghan Biro

Moving from Human Resource Management to Human Asset Management: A Key to Competitive Advantage

If human is treated like resource, he will be exploited, but if he is treated like an asset, he will be protected. When we see something as an asset our perspective towards it is transformed considerably in a constructive manner. In this article, the author is concerned about adopting the right perspective towards the human and how treating the human as an asset can give competitive advantage to a firm.

Dr. Manish B. RavalAssistant ProfessorSDR Bapu Mahila Home Science & Lt. M. J. Kundaliya English Medium Mahila Commerce College, [email protected]

Dr. Ashish B. GorvadiyaSupervisor Instructor Industrial Training Institute, [email protected]

A ll the quotations mentioned above show the importance of the people in the business. The first quote is from Lawrence Bossidy, CEO, AlliedSignal. According to

him hiring the people in the business is the most important task out of all. The people of your business can make you win or lose. However effective strategies you have prepared, they are of no use if your people are not satisfied with you. Ultimately, the business has to bet on the people, not on the strategies, because the strategies are to be executed by the people. If your people are not satisfied with you, they will make the sharpest strategy a rubbish. The second quote is from Julie Bevacqua, Chief Revenue Officer of Rise. According to her, if a company wants to build the rewarding employees experience, the company must first understand what matters the most to employees. If the senior management takes care of the likes, dislikes, emotions, objectives and ambitions of the employees, then the employees will be helpful to achieve the organizational goals. The third quote by Doug Conant, President and CEO, Campbell Soup Company say that a company can be successful in the marketplace only if it is successful in the workplace. It means that if you take care of your workers, they will take care of all other things. The words of Meghan Biro, CEO, Talent Culture Recruitment Agency, are very inspiring. According to him, the employees must be treated like humans and not like machines. Unlike machines, they have emotions, ambitions, likes and dislikes. If the management is concerned about them, they will feel associated with the firm and this attachment and bondage will make organizational goal achievement easier.

All these quotations show the importance of human element in the organization. By misapprehension, we call it Human Resource Management. In reality, it should be Human Asset Management. Because, the people should be treated like assets not like resources. Out of all the factors of production, human is the only factor which keep other factors in motion. If human is not treated satisfactorily, they may make all the other factors of production useless. If human is treated like resource, he will be exploited, but if he is treated like an asset he will be protected. When we see something as an asset our perspective towards it is transformed considerably in a constructive manner.

In this article, the author is concerned about adopting the right perspective towards the human and how treating the human as an asset can give competitive advantage to a firm.


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LERESOURCE Vs. ASSETAccording to Dictionary.com, resource means a source of supply, support or aid especially one that can be readily drawn upon when needed. Whereas, asset means a useful and desirable thing or quality. It means anything of value which an organization or an individual can benefit from. Seemingly, both of them may look alike, but there is a thin line of difference between them. Now, in order to make it clearer, let’s understand the following differences:

Resource AssetResource may be available in plenty.

Asset is always scarce.

Resource may be wasted or used unwisely.

Asset is always used wisely.

Resource may be exploited. Asset is protected.Resource may or may not give return.

Asset will always be rewarding.

Resource should be used sparingly.

Assets should be used caringly.

When a firm sees its employees as resource, it sees the machine side, but when it sees them as asset, it sees the human side. When the firm treats its employees as resource, it might try to exploit them, but when it treats them as asset, it will be always caring and will make good effort to protect them. The firm which sees employees as resource, is not able to consider the skill, talent and the humanitarian aspect of the employees and is rather more concerned about getting the work done anyhow.

When the employees are treated as assets, they feel valued. If employees get the impression that their organization is more concerned for them, they feel attached, they feel a bondage with the organisation. Such employees are more productive, satisfied, contend and confidents. A satisfied employee means a satisfied customer and a satisfied customer brings profit to the organization.

CONVERTING HUMAN RESOURCE INTO HUMAN ASSET TO GAIN COMPETITIVE ADVANTAGEAs discussed above, the Human Element of the organization should not be treated as resource rather should be treated as asset. In order to make employees asset, following practices should be implemented by the organization. If these practices are adopted, the competitive advantage of the organization will be enhanced.

1. Be Selective in Recruitment

Being selective in recruitment means carefully selecting the right employee for the right job. Highly qualified employees are more productive as compared to poorly qualified employees. Being selective in recruitment also sends a signal that the organization has high expectations from the employees and candidates also feel that they are joining an elite organization. Such qualified and productive employees become asset for the organization and they create a competitive advantage.

2. Training and Development

Sir Richard Branson, the Enigmatic Founder of Virgin Group Ltd. Say “Train people well enough so they can leave. Treat them well enough so they don’t have to.” His words rightly express the importance of training and humanitarian treatment to employees. If employees are trained for skill development, they become more productive. With the help of proper training, employees are able to perform their job more competently. Besides that, proper training also shows organization’s commitment towards employees. In such a committed atmosphere, the employees feel attached and they don’t feel of leaving the organization. Such employees become long term asset for the organization.

3. Cross Cultivation

Besides training for a particular task for which the employees are hired, they should be cultivated for multiple skills. Providing cross training or cultivating multiple skills in the employees make their job more interesting and the organization gains flexibility in scheduling the work. When someone is absent, the other one can easily be placed in his position and the work does not stop. The tasks can be easily accomplished and the routine does not get disturbed.

4. Offering Better Pay

Offering higher wages than that paid by the competitors attract competitive and qualified candidates. Besides that, the employee turnover ratio is also reduced. Paying higher wages sends a signal that the organization values its employees. Such employees remain long term and become valuable asset for the organization.

5. Offering Incentives

The employees who are competent and with their competence have contributed for the organization’s productivity and profitability should be offered incentives. Ultimately, the profit that the organization earn is because of the efforts of such competent employees and the top-level management alone should not enjoy this profit. A share should be given to these employees. Such practice is considered fair and just. Employees feel valued and they become dedicated.

When the employees are treated as assets, they feel valued. If employees get the impression that their organization is more concerned for them, they feel attached, they feel a bondage with the organisation. Such employees are more productive, satisfied, contend and confidents. A satisfied employee means a satisfied customer and a satisfied customer brings profit to the organization.



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6. Job Security

When employees feel guaranteed that they will not be laid-off even in the trying time, it sends signal of organizations commitment for its people. The employees become more committed, loyal and dedicated for the organization. Such employees, when are protected in their tough time, become invaluable asset when organization passes through difficult time. According to Mary Kay Ash, “If you are good to your staff when things are going well, they will rally when times go bad.” These words truly explains the importance of good treatment and job security of the employees.

7. Offering Ownership

Organization may give ownership interest to the employees by offering them the company’s shares or profit sharing. When employees are offered such ownership in the company, their goals are aligned with the organizational goals and they make more efforts for achieving the goals. Such employees become invaluable asset for the organizational growth.

8. Participative Decision Making

The organization should adopt the practice of participative decision making for the issues concerned with the employees. When employees are included in the decision-making process, they feel importance in the organization. The research shows that employees’ participation in the management increases their satisfaction as well as their productivity.

9. Promotion Opportunities

Instead of filling the vacant positions from the out-side, they should be filled from within by promoting eligible and competent employees. Opportunity of promotion offers employees the incentive for doing their job in the best manner. They employee remain with the organization for long term and feel satisfied.

10. Providing Sense of Equality

The discrimination between top-level management and the employees should be minimized by establishing equality. Removing reserved parking spaces, executive dining room, special wash-rooms, etc. creates the sense

of equality among the employees. This fills the employees with the thinking that all are working towards common goal.

CONCLUSIONIn order to stay ahead in the competition, the business needs to develop competitive advantage. If the organization is managing its employees in excellent manner, it is very much easy for it to gain competitive advantage. If the organization has competitive advantage in terms of its employees, no other firms can beat it. If the organization treats its employees as an asset, its employees are more satisfied and satisfied employees create stronger competitive advantage. So, the employees should be treated as asset rather than resources to get such stronger competitive advantage. The term Human Resource Management should be replaced by the term Human Asset Management to show the importance of human element in the organization. To end with the words of Ratan Tata written in the letter on the occasion of 178th Birth anniversary of Tata Group founder Jamsetji Nusserwanji Tata showing the importance of Human Asset in the organization, “You bring your zeal, your vigour, your integrity and, most importantly, your hard work. It is because of you that we can derive and obtain the opportunity and privilege to serve our community and through that, our nation.” CS

REFERENCES:

� https://economictimes.indiatimes.com/news/company/corporate-trends/ratan-tata-writes-to-group-employ-ees-calls-them-inheritors-custodians-of-tata-trusts/ar-ticleshow/57445701.cms?utm_source=contentofinter-est&utm_medium=text&utm_campaign=cppst

� https://economictimes.indiatimes.com/news/company/corporate-trends/ratan-tata-writes-to-group-employees-cal ls- them-inher i tors-custodians-of- tata- t rusts/articleshow/57445701.cms?from=mdr

� https://risepeople.com/blog/10-inspiring-quotes-for-hr-professionals/

� https://codepattern.net/Blog/post/employee-a-resource-or-an-asset



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INTRODUCTION

W e all know that COVID 19 pandemic has impacted businesses, financial markets and economies all over the world, including India and has impacted the

business operations of micro, small and medium enterprises and exposed many of them to the financial distress. we also know that Micro, small and medium enterprises are critical for India’s economy as they contribute significantly to its gross domestic product and provide employment to the sizable corporate structures.

Whereas it is considered necessary to urgently address the specific requirements of micro, small and medium enterprises relating to the resolution of their insolvency, due to their unique nature of businesses and simpler corporate structures and to provide an efficient alternative insolvency resolution process ensuring quicker, cost-effective and value maximizing outcomes for all the stake-holders which is in a manner less disruptive to the continuity of their businesses and which preserves jobs.

So, in order to achieve above objectives, The Insolvency and bankruptcy code (Amendment) Oridnance,2021

“The Pre-Pack” - New Insolvency Regime for Micro, Small and Medium Enterprises (MSMEs) Introduced by Government

Palak Atul Manek, ACAPartnerM.P.SUTARIA & [email protected]

“THE PRE-PACK” - New Insolvency regime for Micro, Small and Medium Enterprises (MSMEs) Promulgated Through Insolvency and Bankruptcy Code (IBC) Amendment Ordinance,2021 by Central Government.

dated.04/04/2021 came out with a “PRE-PACKED INSOLVENCY RESOLUTION PROCESS FOR CORPORATE PERSONS CLASSIFIED AS MSMEs” within two-weeks of the lifting of a one-year suspension of the insolvency proceeding against Covid-related defaults, amid heightened possibilities of a rise in bad loan cases. It shall come into force at once.

WHAT IS PRE PACKAGED INSOLVENCY RESOLUTION PROCESS?In simpler term, A pre-pack plan is the resolution of the debt of the distressed company through an agreement between secured creditors and investors instead of a public bidding process.

A pre-packed insolvency in Indian framework context is an arrangement where the resolution of a company’s business is negotiated with a buyer before the appointment of an insolvency professional. A Pre-packed insolvency resolution process is basically in the nature of One-time settlement with the lenders before NCLT.

Pre-packs are a form of restructuring that allows creditors and debtors to work on an informal plan and then submit it for approval. This means the incumbent management typically retain the control until its final deal.

In pre-pack Insolvency process, the debtors will continue to control and run their enterprise till resolution happens. Whereas, in normal Corporate Insolvency resolution process (CIRP), the resolution professional (RP) comes in and takes over control on the day of admission of application of corporate insolvency resolution process (CIRP).

WHAT IS THE DEFINTION OF MSMEs?

As per the sub-section (1) of the section-7 of the micro, small and Medium Enterprises Development Act,2006, MSMEs are classified in the following manner w.e.f.01/07/2020

Particulars Micro Enterprises Small Enterprises Medium Enterprises

Investment in Plant and Machinery/ Equipment

Less than or equal to Rs.1 crore Less than or equal to Rs.10 crore Less than or equal to Rs.50 crore

AND AND AND AND

Turnover Less than or equal to Rs.5 crore Less than or equal to Rs.50 crore Less than or equal to Rs.250 crore


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IMPORTANT POINTS REGARDING PRE-PACKAGED INSOLVENCY RESOLUTION PROCESS FOR MSMEsThe pre-packaged insolvency process has been introduced by government under Chapter III-A (Section-54 A to section-54 P) of Insolvency bankruptcy code,2016.

The objective of introducing the pre-pack insolvency scheme is that it is cost-effective mechanism and quickens the process for resolution of MSMEs.

At present, It is only available to corporate person classified as the Micro, small and medium enterprises (MSMEs) under sub—section (1) of section-7 of the micro, small and Medium Enterprises Development Act,2006 with the defaults up to Rs. 1 crore. The central government by notification dated.09/04/2021 specifies Rs.10 lakhs as the minimum amount of default for the matters relating to the pre-packed insolvency resolution process of corporate debtor specified under chapter III-A of the IBC,2016.

Pre-pack for MSMEs is a hybrid corporate rescue process, which blends elements and virtues of both formal and informal insolvency proceedings.

The initiative is based on a trust model and the amendments honour the honest MSME owners by trying to ensure that the resolution happens and the company remains with them.

The Pre-packed Insolvency plan simply provides that where committee of the creditors after considering the feasibility and viability of resolution plan submitted by the corporate debtor accepts the same and such resolution plan provides for impairment of any claims owned by the corporate debtor, the committee of creditors in such case may require the promoters of the corporate debtors (CD) to dilute their share-holding or voting or control rights in the corporate debtors.

If no such dilution is proposed, then COC will be required to record the reasons before approving such resolution plan. This recording of the reason has been made mandatory because there has been seen during the CIRP that the resolution plans approved by committee of creditors

(CoC), has given less emphasis on the realization to be made to operational creditors.

Corporate debtors remaining in possession is a global best practice in Pre-packaged Insolvency resolution process (PPIRP). So, the existing management shall remain intact and the control of the company shall remain with the promoters/management of the company only and not taken over by the lenders in the Pre-packaged insolvency resolution process. THIS IS THE BIGGEST RELIEF TO THE PROMOTERS OF THE COMPANY.

Application for initiating pre-packed insolvency resolution process may be made in respect of a corporate debtor, who committed default referred to in section- 4 of the Insolvency and Bankruptcy code,2016 subject to the following conditions, that

(a) it has not undergone pre-packaged insolvency resolution process or completed corporate insolvency resolution process, as the case may be, during the period of three years preceding the initiation date;

(b) it is not undergoing a corporate insolvency resolution process;

(c) no order requiring it to be liquidated is passed under section 33 of IBC,2016;

(d) it is eligible to submit a resolution plan under section 29A of IBC,2016;

(e) the financial creditors of the corporate debtor, not being its related parties, representing such number and such manner as may be specified, have proposed the name of the insolvency professional to be appointed as resolution professional for conducting the pre packaged insolvency resolution process of the corporate debtor, and the financial creditors of the corporate debtor, not being its related parties, representing not less than sixty-six per cent. in value of the financial debt due to such creditors, have approved such proposal in such form as may be specified:

Provided that where a corporate debtor does not have any financial creditors, not being its related parties, the proposal and approval under this clause shall be provided by such persons as may be specified;

(f) the majority of the directors or partners of the corporate debtor, as the case may be, have made a declaration, in such form as may be specified, stating, inter alia, —

(i) that the corporate debtor shall file an application for initiating pre-packaged insolvency resolution process within a definite time period not exceeding ninety days;

(ii) that the pre-packaged insolvency resolution process is not being initiated to defraud any person; and

(iii) the name of the insolvency professional proposed and approved to be appointed as resolution professional under clause (e);

(g) the members of the corporate debtor have passed a special resolution, or at least three-fourth of the total number of partners, as the case may be, of the

A pre-packed insolvency in Indian framework context is an arrangement where the resolution of a company’s business is negotiated with a buyer before the appointment of an insolvency professional. A Pre-packed insolvency resolution process is basically in the nature of One-time settlement with the lenders before NCLT.



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Key requirement to be fulfilled for initiating Pre-pack insolvency plan for MSMEs

i. Proposal of a resolution professional (RP) for MSME by its financial creditors(not related parties) representing at-least 10% of value of the total financial debt.

ii. Approval of the proposed resolution professional by financial creditors at least 66% of the value of total financial debt.

iii. Declaration from the majority of the directors or partners of the MSME stating that- a) Pre pack insolvency process application will be filed within 90 days. B) that pre- pack insolvency process application is not initiated to defraud anyone. C) the name of the approved resolution professional (RP).

iv. Approval for Pre-pack insolvency process from the share-holders or partners of the MSME by passing a special resolution or at least 3/4th. of the total number of partners, as the case may be, of corporate debtors.

v. Formulation of the Base Plan by the MSME for its revival / restructuring and submission of the plan to the financial creditors.

vi. Approval for Pre-packed insolvency plan from financial creditors (not related parties) representing at least 66% in value of the total financial debt.

vii. Filing of the pre-packed insolvency process application.

To file for pre-pack insolvency, the MSME debtor will require the approval of unrelated financial creditors accounting for at-least 66% of dues.

Honest promoters will be allowed to submit the base plan for resolution, which will be then put to competitive bidding through Swiss Challenge. The corporate debtor shall obtain an approval from its financial creditors, not being related parties, representing not less than sixty-six per cent in value of the financial debt due to such creditors, for the filling of an application for initiating pre-packed insolvency resolution process.

IBC,2016 currently stipulates a maximum of 270 days for completion of the entire CIRP. But, As per sub-section (1) of section-54D of the chapter III-A of the insolvency and bankruptcy code,2016 the pre-packed insolvency resolution process shall be completed within a period of one hundred and twenty days from the pre-packaged insolvency commencement date.

A per sub-section (1) of section-54L of the chapter III-A of the IBC,2016 if the adjudicating authority is satisfied that the resolution plan as approved by committee of creditors meets the requirements laid down in IBC,2016, it shall within 30 days of the receipt of such resolution plan, by order approve the resolution plan.

So, it is clear that Pre-pack resolution plans should be submitted within 90 days and the NCLT will have another 30 days to approve such plan.

Interestingly, the disposal of a pre-pack application has been given priority over the Corporate insolvency resolution process (CIRP) application for the same stressed MSME under section-7 ,9 and 10 of the IBC subject to the certain conditions. As per section-11A of the Insolvency and bankruptcy code, 2016 where an application filed under section-54C of chapter III-A of the IBC, 2016 (Application for Pre- packed insolvency process) is pending, the adjudicating authority shall pass an order to admit or reject such application, before considering any application filled under section-7 or section-9 or section-10 during the pendency of such application under section-54C , in respect of the same corporate debtor. So, the provisions relating to pre-pack applications are prospective and overriding in that aspect.

Where an application under section 54C is filed within fourteen days of filing of any application under section 7 or section 9 or section 10, which is pending, in respect of the same corporate debtor, then, notwithstanding anything contained in sections 7, 9and 10 of the IBC,2016 the Adjudicating Authority shall first dispose of the application under section 54C.

Where an application under section 54C of the chapter III-A of the IBC,2016 is filed after fourteen days of the filing of any application under section 7 or section 9 or section 10, in respect of the same corporate debtor, the Adjudicating Authority shall first dispose of the application under sections 7, 9 or 10 of the IBC,2016.

The provisions of the section-11A of the IBC,2016 shall not apply where an application under section 7 or section 9 or section 10 is filed and pending as on the date of the commencement of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2021.”.

As per section-54F of the Chapter III-A of the Insolvency and bankruptcy code,2016 the resolution professional shall conduct the pre-packaged insolvency resolution process of a corporate debtor during the pre-packaged insolvency resolution process period.

The resolution professional shall perform the following duties namely-

a. Confirm the list of claims submitted by the corporate debtor under section-54G.

b. Inform the creditors regarding their claims as confirmed under above clause-(A).

c. Maintain an updated list if claims, in such manner as may be specified.

d. Monitor management of the affairs of the corporate debtors.



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of breach of any of the obligations of the board of directors or partners, as the case may be, of the corporate debtors, under the provisions of the chapter III A and the rules and regulations made thereunder.

f. Constitute the committee of creditors and convene and attend al its meetings.

g. Prepare the information memorandum on the basis of the preliminary information memorandum on the basis of the preliminary information memorandum submitted under section-54G.

h. File applications for the avoidance of transactions under chapter III or fraudulent or wrongful trading under chapter VI of IBC,2016.

The key difference between pre- pack insolvency process and normal corporate insolvency resolution process (CIRP) is that the existing management retains the control in case of pre-packs while a resolution professional takes control over debtors as a representative of financial creditors in the case of normal Corporate insolvency resolution process (CIRP).

A pre-pack insolvency resolution process introduces by the central government also provided for adequate protection to ensure the provisions were not misused by the errant promoters. The pre-pack mechanism allows for a swiss challenge for any resolution plans which proved less than full recovery of dues for operational creditors as per sub-section (5) of section-54K of the Chapter III-A of the Insolvency and bankruptcy code,2016.

Under the swiss challenge mechanism, any third party would be permitted to submit a resolution plan for the distressed company and the original applicant would have to either match the improved resolution plan or forego the investment.

THE UNIQUE FEATURES OF THE PRE-PACKAGED INSOLVENCY RESOLUTION PROCESS a. It only applies to the Micro, small and medium

enterprises (MSME) debtors. b. It can be initiated only by the debtor. c. It involves pre-pack (i.e.)- MSME has to approach its

financial creditors along with a base resolution plan and obtain their approval before formally initiating pre-packed insolvency resolution process.

d. It is a debtor in -possession regime. e. The MSME debtors has to submit a base resolution

plan against which competing plans are evaluated and one plan is finally selected. The MSME can improve the base resolution plan submitted earlier.

f. NCLT has a limited role in Pre-packed insolvency resolution process.

g. PIRP must be completed within a period of 120 days from the pre-packed insolvency commencement date.

SUMMARYThe pre-packaged insolvency resolution process is like

pre-packaged food which can be opened and used. It may prove a big platform to MSMEs which are facing financial difficulties due to this COVID-19 pandemic. It also provided for adequate protection to ensure that the provisions are not misused by the errant promoters. Pre-packs will help corporate debtors to enter into consensual restructuring with lenders and address entire liability side of the company. It is an appropriate remedy for overburdened NCLT cases, and it usually takes less time than litigation. If pre-pack is correctly introduced, the issue of litigation delay and cost saving can be effectively addressed. Fairness, openness and the resolution of disputes among the different stakeholders are all made possible by a pre-packaged insolvency resolution process. In summation, the ordinance is a welcome step at this juncture but it’s implementation in future will tell us if this ordinance meets its objectives and if so, in what measure! CS

A pre-pack insolvency resolution process introduces by the central government also provided for adequate protection to ensure the provisions were not misused by the errant promoters. The pre-pack mechanism allows for a swiss challenge for any resolution plans which proved less than full recovery of dues for operational creditors as per sub-section (5) of section-54K of the Chapter III-A of the Insolvency and bankruptcy code, 2016.



LEGAL WORLD

2n COSMOSTEELS PRIVATE LTD v. JAIRAM DAS GUPTA & ORS [SC]

n REGIONAL PROVIDENT FUND COMMISSIONER v. VANDANA GARG & ORS [NCLAT]

n SANDEEP KHAITAN v. JSVM PLYWOOD INDUSTRIES LTD [SC]

n MANGALA WAMAN KARANDIKAR (D) v. PRAKASH DAMODAAR RANADE [SC]

n UTTAR PRADESH POWER TRANSMISSION CORPORATION LTD & ORS v. CG POWER AND INDUSTRIAL SOLUTIONS & ORS [SC]

n COMMISSIONER OF INCOME TAX-I v. M/S RELIANCE ENERGY LTD [SC]

n CONFEDERATION OF REAL ESTATE DEVELOPERS’ ASSOCIATION OF INDIA v. GREATER NOIDA INDUSTRIAL DEVELOPMENT AUTHORITY [CCI]

n NEHA GUPTA v. TATA MOTORS LTD. & ORS [CCI]


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CorporateLaws

Landmark Judgement

LMJ 06: 06: 2021COSMOSTEELS PRIVATE LTD v. JAIRAM DAS GUPTA & ORS [SC]

Civil Misc. Petition No. 7962 of 1977 in Civil Appeal No. 1347(N) of 1977

Desai, D. A. Beg, M. Hammedullah & P. N. Bhagwati, JJ. [Decided on 16/12/1977]

Equivalent Citations: 1978 AIR 375; 1978 SCR (2) 422; 1978 SCC (1) 215; (1978) 48 Comp Cas 312.

Companies Act,1956- sections 397,398 402 read with sections 101 to 104- buyback of shares and resultant capital reduction- court ordered buy back of shares by a company- whether procedure prescribed under sections 101-104 to be complied with?

Brief facts: This miscellaneous petition by Interveners raises a short but interesting question in the field of Company Law. The appellant company was ordered to buy back the shares from one Gupta group , at the determined value, in a petition relating to oppression and suppression of minority under sections 397-98. The intervenor, claiming to be a creditor of the Company, raised a question that as the buyback of shares results in capital reduction, the procedure prescribed under sections 101-104 would have to be followed and notice thereof to be given to all creditors of the company.

The question of law was whether when on a direction given by the Court, while granting relief against oppression to the minority shareholders of the Company, to the Company to purchase the shares of some of its members which would ipso facto bring about reduction of the share capital because a Company cannot be its own member, is it obligatory to serve a notice upon all the creditors of the Company ?

Decision: Application dismissed.

Reason: It was conceded that the procedure prescribed in sections 100 to 104 is not required to be followed where reduction of share capital is necessitated by the direction given by the Court in a petition under- ss. 397 and 398. Section 77 leaves no room for doubt that reduction of a share capital may have to be brought about in two different situations by two different modes. Undoubtedly, where the Company has passed a resolution for reduction of its share capital and has submitted it to the Court for confirmation the procedure prescribed by ss.

100 to 104 will have to be followed, if they are attracted. On the other hand, where the Court, while disposing of a petition under ss. 397 and 398, gives a direction to the Company to purchase shares of its own members, a consequent reduction of the share capital is bound to ensue, but before granting such a direction it is not necessary to give notice of the consequent reduction of the share capital to the creditors of the company. No such requirement is laid down by the Act. Two procedures ultimately bringing about reduction of the share capital are distinct and separate and stand apart from each other and one, or the other may be resorted to according to the situation. That is the clearest effect of the disjunctive or in section 77. The scheme of sections 397 and 406 appears to constitute a code by itself for granting relief to oppressed minority shareholders and for granting appropriate relief, a power of widest amplitude, inter alia, lifting the ban on company purchasing its shares under Court’s direction, is conferred on the Court. When the Court exercises this power by directing a purchase of its shares by the Company, it would necessarily involve reduction of the capital of the Company. Is such power of the Court subject to a resolution to be adopted by the members of the Company which, when passed with statutory majority, has to be submitted to Court for confirmation ? No canon of construction would permit such an interpretation in which the statutory power of the Court for its exercise depends upon the vote of the members of the Company. This would inevitably be the situation if reduction of share capital can only be brought about by resorting to the procedure prescribed in ss. 100 to 104. Additionally, it would cause inordinate delay and the very purpose of granting relief against oppression would stand self-defeated.

Viewed from a slightly different angle, it would be impossible to carry out the directions given under s. 402 for reduction of share capital if the procedure under ss. 100 to 104 is required to be followed. Under ss. 100 to 104 the Company has to first adopt a special resolution for reduction of share ,capital if its articles so permit. After such a resolution is adopted winch, of necessity must be passed by majority, and it being a special resolution, by a statutory majority, it will have to be submitted for confirmation to the Court. Now, when minority shareholders complain of oppression by majority and seek relief against oppression from the Court under ss. 397 and 398 and the Court in a petition of this nature considers it fair and just to direct the Company to purchase the shares ,of the minority shareholders to relieve oppression, if the procedure prescribed by ss. 100 to 104 is required to be followed, the resolution will have to be first adopted by the members of the Company but that would be well-nigh impossible because the very majority against whom relief is sought would be able to veto a at the threshold and the power conferred on the Court would be frustrated. That could never have been the intention of the Legislature Therefore, it is not conceivable that when a direction for purchase of shares is given by the Court under s. 402 and consequent reduction in share capital is to be effected the procedure, prescribed for reduction of share capital in ss. 100 to 104 should be required to be followed in order to make the direction effective.

A very serious apprehension was voiced that if the Court directs the Company to purchase the shares of some of its. members while granting relief against oppression, the Company would part with its funds which would jeopardise the security of the creditors of the Company and that if such a direction for reduction of share capital can be, given by the Court behind


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the back of the creditors, the Creditors would be adversely affected and therefore, it was contended that, even though, while giving direction under s. 402 directing the Company to purchase the shares of its members, it is not obligatory upon the Court to give notice to the creditors, such notice ought to be given in the interests of the creditors. This apprehension is, in our opinion, unfounded. Even when the Court is moved to confirm the resolution for reduction of share capital under ss. 100 to 104, the Court may in its discretion dispense with the procedure prescribed in that group of sections.

Undoubtedly, the Court would use the discretion only upon proof of special circumstances as contemplated by s. 101(3), but when such discretion is used, the creditors would have no opportunity to object to the reduction. The opportunity to object would thus depend upon the Court exercising its discretion one way or the other. It may be noticed that until the Company submits its resolution for reduction of share capital to the Court, the creditors have no say in the matter and, therefore, the Court is empowered to ascertain the wishes of the creditors by following the procedure prescribed in sections 101 to 104. The object behind prescribed this procedure requiring save in special circumstances as contemplated in section 101 (3), the Court to give notice to the creditors is that the members of the Company may not unilaterally act to the detriment of the creditors behind ‘their back. If such a procedure were not prescribed, the Court might, unaware of all the facts, be persuaded by the members to confirm the resolution and that might cause serious prejudice to the creditors. But such a situation would not be likely to arise in a petition under ss. 397 and 398. In such a petition the Court would be better in a position to have all the relevant facts and circumstances before it and it would be the Court which would decide whether to direct purchase of shares of the members by the Company. Before giving such a direction the Court would certainly keep in view all the relevant facts and circumstances, including the interest of the creditors. Even if the petition is being disposed of on a compromise between the parties, yet the Court, before sanctioning the compromise, would certainly satisfy itself that the direction proposed to be given by it pursuant to the consent terms, would not adversely affect or jeopardise the interest of the creditors. Therefore, it cannot be said that merely because s. 402 does not envisage consent of the creditors before the Court gives direction for reduction of share capital consequent upon purchase of shares of some of the members by the Company, there is no safeguard for the creditors.

LW 39: 06: 2021REGIONAL PROVIDENT FUND COMMISSIONER v. VANDANA GARG & ORS [NCLAT]

Company Appeal (AT) (CH) (Ins.) No. 50 of 2021

M. Venugopal & V. P. Singh. [Decided on 12/05/2021]

Insolvency and Bankruptcy Code,2016- resolution plan- creditor EPFO filing its claim before the RP- claim included in the resolution plan- later enhancing the quantum of the claim- whether maintainable-Held, No.

Brief facts: This Appeal emanates from the Order passed by the National Company Law Tribunal, Chennai Bench, whereby

the Adjudicating Authority/NCLT approved the Resolution Plan, which waves off a major portion of the Provident Fund dues owed by the Corporate Debtor. Aggrieved by the order the Provident Fund commissioner is before the NCLAT.

Decision: Appeal dismissed.

Reason: We have heard the arguments of the Learned Counsel for the parties and perused the record. Admittedly the Corporate Debtor “GVR Infra Projects Limited” has defaulted in payment of dues/damages/interest, including the employees share of contribution, since 2014, which were deducted from employees’ wages. The Appellant now claims overall dues towards the Provident Fund to the tune of ₹ 2,84,69,747/-. In contrast, Appellant’s Provident Fund claim amounting to ₹ 1,95,01,301/- had already been admitted and dealt with in the Resolution Plan.

In the instant case, the Appellant, despite filing a claim of ₹1,95,01,301/- has raised a claim of ₹ 2,84,69,797/-,i.e. much higher than the amount claimed by the Appellant in its claim before the Resolution Professional. The Appellant’s claim admitted by Respondent No. 1/RP had been considered while formulating the Resolution Plan of the Corporate Debtor. The said Resolution Plan was further approved by the Adjudicating Authority/NCLT vide its Order dated July 20, 2020, in conformity with Section 30 (2) of the I&B Code,2016 and the Rules and Regulations framed thereunder. The Appellant has not provided any reason or justification for raising the enhanced claim of ₹ 2,84,69,797/-, which is much higher than the amount claimed.

Based on the law laid down by Hon’ble Supreme Court in Ghanashyam Mishra & Sons Pvt. Ltd v Edelweiss Asset Reconstruction Company Ltd, 2021 SCC OnLine SC 313, it is clear that after approval of the Resolution Plan, the claims as provided in the Resolution Plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors including the Central Government, any State Government or any Local Authority, Guarantors and other Stakeholders. On the approval of the Resolution Plan by the Adjudicating Authority, all such claims that are not a part of the Resolution Plan shall stand extinguished. No person will be entitled to initiate continuing any proceedings regarding a claim that is not part of the Resolution Plan. The Appellants claim about Provident Fund dues amounting to ₹1,95,01,301/-, which was earlier raised at the time of initiation of CIRP and was later admitted, stood frozen and will be binding on all the Stakeholders, including the Central Government. After approval of the Resolution Plan by the Adjudicating Authority, all such claims that are not part of the Resolution Plan shall stand extinguished. No person is entitled to initiate or continue any proceeding regarding a claim that is not part of the Resolution Plan. In the circumstances as stated above, we believe that the Appeal sans merit and deserve to be dismissed.


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SANDEEP KHAITAN v. JSVM PLYWOOD INDUSTRIES LTD [SC]

Criminal Appeal No.447 OF 2021

U.U.Lalit & K.M. Joseph,JJ. [Decided on 22/04/2021]

Section 14 of the Insolvency and Bankruptcy Code,2016 read with section 482 of the CrPC- CIRP- operation of frozen bank account was allowed to be operated- whether correct-Held, No.

Brief facts:

The appeal is directed against order dated 04.02.2021 passed by the Hon’ble High Court of Guwahati. In the impugned order, the High Court has allowed an interlocutory application filed by the Respondent No. 1 to allow it to operate its bank account maintained with the ICICI Bank Bhubaneswar and to unfreeze the bank account of its creditors over which the lien has been created and the accounts frozen pursuant to the lodging of an FIR by the appellant before us. It was made subject to conditions.

Decision: Appeal allowed.

Reason: The provisions of the IBC contemplate resolution of the insolvency if possible, in the first instance and should it not be possible, the winding up of the Corporate Debtor. The role of the insolvency professional is neatly carved out. From the date of admission of application and the appointment of Interim Resolution Professional, the management of the affairs of the Corporate Debtor is to vest in the Interim Resolution Professional. With such appointment, the powers of the Board of Directors or the partners of the Corporate Debtor as the case may be to stand suspended. Section 17 further declares that the powers of the Board of Directors or partners are to be exercised by the Interim Resolution Professional. The financial institutions are to act on the instructions of the Interim Resolution Professional. Section 14 is emphatic, subject to the provisions of sub section (2) and (3). The impact of the moratorium includes prohibition of transferring, encumbering, alienating or disposing of by the Corporate Debtor of any of its assets.We have to also in this context bear in mind that the High Court appears to have, in passing the impugned order, which is an interim order for that matter, overlooked the salutary limits on its power under Section 482. The power under Section 482 may not be available to the Court to countenance the breach of a statuary provision. The words ‘to secure the ends of justice’ in Section 482 cannot mean to overlook the undermining of a statutory dictate, which in this case is the provisions of Section 14, and Section 17 of the IBC.

It would appear to us that having regard to the orders passed by the NCLT admitting the application, under Section 7, and also the ordering of moratorium under Section 14 of the IBC and the orders which have been passed by the tribunal otherwise, the impugned order of the High Court resulting in the Respondent No. 1 being allowed to operate the account without making good the amount of Rs 32.50 lakhs to be placed in the account of the Corporate Debtor cannot be sustained. The Learned Counsel

for the Appellant has also no objection in the Respondent No. 1 being allowed to operate its account subject to it remitting an amount of Rs. 32.50 lakhs into the account of the Corporate Debtor. In such circumstances, Appeal is allowed. The Impugned order is modified as follows: i. The Respondent No.1 is allowed to operate its account subject to it to first remitting into the account of the Corporate Debtor, the amount of Rs 32.50 lakhs which stood paid to it by the management of the Corporate Debtor. The assets of the Corporate Debtor shall be managed strictly in terms of the provisions of the IBC. The Appellant as RP will bear in mind the provision of Section 14 (2A) and the object of IBC. We however make it clear that our order shall not be taken as our pronouncement on the issues arising from the FIR including the petition pending under Section 482 of the Cr.P.C.ii. We also make it clear that the judgment will not stand in the way of the Respondent No.1 pursuing its claim with regard to its entitlement to a sum of Rs.32.50 lakhs and any other sum from the Corporate Debtor or any other person in the appropriate forum and in accordance with law. There will be no order as to costs.

General Laws

LW 41: 06: 2021MANGALA WAMAN KARANDIKAR (D) v. PRAKASH DAMODAAR RANADE [SC]

Civil Appeal No. 10827 of 2010

N.V. Ramana, Surya Kant & Aniruddha Bose, JJ. [Decided on 07/05/2021]

Interpretation of contract- principles to be followed- license to continue the business- contention that it was a license to occupy the premises- whether correct- Held ,No.

Brief facts: The issue involved in this appeal was with respect to the nature of the contract whether it was a license to continue the business or was it a licence to occupy the premises. This case arises out of a contract entered into between the Appellant (since deceased represented through Legal Heirs) and the Respondent. Initially Appellant’s husband was running a business of stationary in the name of “Karandikar Brothers” before his untimely demise in the year 1962. After his demise, she continued the business for some time. After a while, she was unable to run the business and accordingly decided to let the Respondent run the same for some time. Time after time, the contract was duly extended. In 1980s, desiring to start her husband’s business again, appellant herein issued a notice dated 20.12.1980 requesting the Respondent herein to vacate the suit premises by 31.01.1981.


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The Respondent replied to the aforesaid notice claiming that the sale of business was incidental rather the contract was a rent agreement stricto sensu.

In the ensuing litigation the trial court held in favour of the Appellant while the High court held that the contract was a license to occupy th3 premises and was covered under the Bombay Rent Act. Aggrieved by the same, the appellant herein filed this appeal.

Decision: Appeal allowed.Reason: Having heard both the parties at some length, at the outset before we analyse this case, we need to observe some principles on contractual interpretation. Unlike a statutory interpretation, which is even more difficult due to assimilation of individual intention of law makers, contractual interpretation depends on the intentions expressed by the parties and dredging out the true meaning is an ‘iterative process’ for the Courts. In any case, the first tool for interpreting, whether it be a law or contract is to read the same.

It is usual that businessmen often do not sit over nitty gritty in a contract. In a document the language used by the parties may have more than one meaning. It is ultimately the responsibility of the Courts to decipher the meaning of the words used in a contract, having regards to a meaning reasonable in the line of trade as understood by parties. It may not be out of context to state that the development of rules of contractual interpretation has been gradual and has taken place over century. Without going into extensive study of precedents, in short, we may only state that the path and development of law of interpretation has been a progress from a stiff formulism to a strict rationalism.

It is clear from the reading of the contract that the parties had intended to transfer business from appellant to respondent during the contractual period. This agreement was not meant as a lease or license for the respondent to conduct business.

In line with the law laid down, it is clear that the contract mandated continuation of the business in the name of ‘Karandikar Brothers’ by paying royalties of Rs. 90 per month. Once the parties have accepted the recitals and the contract, the respondent could not have adduced contrary extrinsic parole evidence, unless he portrayed ambiguity in the language. It may not be out of context to note that the extension of the contract was on same conditions.

On consideration of the matter, the High Court erred in appreciating the ambit of Section 95, which led to consideration of evidence which only indicates breach rather than ambiguity in the language of contract. The evidence also points that the license was created for continuation of existing business, rather than license/lease of shop premises. If the meaning provided by the High Court is accepted, then it would amount to Courts substituting the bargain by the parties. The counsel for respondent has emphasized much on the receipt of payment, which mentions the term ‘rent received’. However, in line with the clear unambiguous language of the contract, such evidence cannot be considered in the eyes of law.

Moreover, the contention that the aforesaid situation is covered by the Bombay Rent Act is misplaced. Once we have determined that the impugned agreement was a license for continuing existing business, Bombay Rent Act does not cover

such arrangements. Therefore, the jurisdiction of the trail court is accordingly not ousted.

In light of the above, the impugned order of the High Court cannot be sustained, and is accordingly, set aside. The decree of the trial court is restored. The appeal is allowed in the above terms and there shall be no order as to costs.

LW 42: 06: 2021UTTAR PRADESH POWER TRANSMISSION CORPORATION LTD & ORS v. CG POWER AND INDUSTRIAL SOLUTIONS & ORS [SC]

Special Leave Petition (C) NO. 8630 of 2020

U.U.Lalit & Indira Banerjee,JJ. [Decided on 12/05.2021]

Building and Other Construction Workers Cess Act- four contracts- only one contract pertain to civil construction- appellant recovered labour cess from the contract for design, engineering and supply of equipments- whether permissible-Held, No.

Brief facts: The Respondent entered into four contracts, though interlinked, with the Petitioner. The first contract was for the design, engineering, and supply of equipments, the second one was for installation and commencement and the third for the civil works construction and the fourth one for maintenance. The petitioner deducted Labour cess @ 1% from the first contract based on the report of CAG. Respondent objected to this and contented that labour cess is deductible only on the third contract i.e. civil works construction contract and not on the design and supply contract. The respondent approached the High court and got the stay order from deduction of cess. The petitioner appealed to the Supreme Court.

Decision: Petition dismissed.Reason: In this Case, there is apparently no dispute, difference or controversy between UPPTCL and the Respondent No.1 as to the true construction, meaning or intent of any part of the conditions of contract or to the manner of execution or the quality or description or payment for the same. Nor is there any dispute as to the true meaning, intent, interpretation, construction, or effect of the clauses of contract, specifications or drawings or any of them. UPPTCL has changed its stand only after the CAG report. Cess in respect of the First Contract has been deducted only in view of the audit objection raised by the Office of Comptroller and Auditor General (CAG).

In this case, the action of UPPTCL in forcibly extracting building cess from the Respondent No.1 in respect of the first contract, solely on the basis of the CAG report, is in excess of power conferred on UPPTCL by law or in terms of the contract. In other words, UPPTCL has no power and authority and or jurisdiction to realize labour cess under the Cess Act in respect of the first contract by withholding dues in respect of other contracts and/or invoking a performance guarantee. There is no legal infirmity in the finding of the High Court that UPPTCL acted in excess of power by its acts impugned when there was admittedly no assessment or levy of cess under the Cess Act.


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Even otherwise, the Cess Act and/or statutory rules framed thereunder prescribe the mode and manner of recovery of outstanding cess under the Cess Act. It is well settled that when statute requires a thing to be done in a particular manner, it is to be done in that manner alone. UPPTCL could not have taken recourse to the methods adopted by it. The impugned communications have rightly been set aside.

In our considered opinion, the judgment and order of the High Court impugned does not call for inference under Article 136 of the Constitution of India. The Special Leave Petition is, therefore, dismissed.

Tax Laws

LW 43: 06: 2021COMMISSIONER OF INCOME TAX-I v. M/S RELIANCE ENERGY LTD [SC]

Civil Appeal No. 1327 of 2021 with batch of appeals

L. Nageswara Rao & Vineet Saran,JJ. [Decided on 28/04/2021]

Brief facts: By an order of assessment dated 31.01.2005, the Assessing Officer restricted the eligible deduction under Section 80-IA of the Income Tax Act, 1961 (hereinafter “the Act”) to the extent of ‘business income’ only. On 23.03.2006, the Commissioner of Income-Tax (Appeal)-I (hereinafter “the Appellate Authority”) partly allowed the Appeal filed by the Assessee and reversed the order of the Assessing Officer on the issue of the extent of deduction under Section 80-IA of the Act. The Income Tax Appellate Tribunal (hereinafter “the Tribunal”), upheld the decision of the Appellate Authority on the issue of deduction under Section 80-IA. The High Court refused to interfere with the Tribunal’s order as far as the issue on deduction under Section 80-IA is concerned. Therefore, this Appeal by the Revenue.

Decision: Appeal dismissed.Reason:The controversy in this case pertains to the deduction under Section 80-IA of the Act being allowed to the extent of ‘business income’ only. The claim of the Assessee that deduction under Section 80-IA should be allowed to the extent of ‘gross total income’ was rejected by the Assessing Officer. The import of Section 80-IA is that the ‘total income’ of an assessee is computed by taking into account the allowable deduction of the profits and gains derived from the ‘eligible business’. With respect to the facts of this Appeal, there is no dispute that the deduction quantified under Section 80-IA is Rs.492,78,60,973/-. To make it clear, the said amount represents the net profit made by the Assessee from the

‘eligible business’ covered under sub-section (4), i.e., from the Assessee’s business unit involved in generation of power. The claim of the Assessee is that in computing its ‘total income’, deductions available to it have to be set-off against the ‘gross total income’, while the Revenue contends that it is only the ‘business income’ which has to be taken into account for the purpose of setting-off the deductions under Sections 80-IA and 80-IB of the Act. To illustrate, the ‘gross total income’ of the Assessee for the assessment year 2002-03 is less than the quantum of deduction determined under Section 80-IA of the Act. The Assessee contends that income from all other heads including ‘income from other sources’, in addition to ‘business income’, have to be taken into account for the purpose of allowing the deductions available to the Assessee, subject to the ceiling of ‘gross total income’. The Appellate Authority was of the view that there is no limitation on deduction admissible under Section 80-IA of the Act to income under the head ‘business’ only, with which we agree.In the case before us, there is no discussion about Section 80-IA(5) by the Appellate Authority, nor the Tribunal and the High Court. However, we have considered the submissions on behalf of the Revenue as it has a bearing on the interpretation of sub-section (1) of Section 80-IA of the Act. We hold that the scope of sub-section (5) of Section 80- IA of the Act is limited to determination of quantum of deduction under sub-section (1) of Section 80-IA of the Act by treating ‘eligible business’ as the ‘only source of income’.Sub-section (5) cannot be pressed into service for reading a limitation of the deduction under sub-section (1) only to ‘business income’. An attempt was made by the learned Senior Counsel for the Revenue to rely on the phrase ‘derived … from’ in Section 80-IA (1) of the Act in respect of his submission that the intention of the legislature was to give the narrowest possible construction to deduction admissible under this sub-section. It is not necessary for us to deal with this submission in view of the findings recorded above. For the aforementioned reasons, the Appeal is dismissed qua the issue of the extent of deduction under Section 80-IA of the Act.

Competition Laws

LW 44: 06: 2021CONFEDERATION OF REAL ESTATE DEVELOPERS’ ASSOCIATION OF INDIA v. GREATER NOIDA INDUSTRIAL DEVELOPMENT AUTHORITY [CCI]

Case Nos. 34, 37 & 38 of 2020

A.K.Gupta, Sangeeta Verma & B.S. Bishnoi. [Decided on 04/05/2021]

Competition Act,2002- sections 3 & 4- real estate development- agreement between the land agency and the developers- allegations by developers- allegations were found to be unfounded.


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Brief facts: It has been submitted that GNIDA has abused its dominant position in contravention of the provisions of Section 4 of the Act by way of its conduct as well as imposition of one-sided conditions on the members of CREDAI through the lease deeds. The members of CREDAI have gravely suffered at the hands of GNIDA due to the practice followed/ actions as well as in- actions of the authority.

The main grievances against GNIDA, as summarised by the CREDAI-WUP, are stated to be in relation to (i) Non-disclosure and allotment of encumbered land (riddled with disputes) to the developers and charging premium as well lease rent for the same; (ii) Demanding additional farmer compensation from the developers even though no document- the scheme, allotment letter and the lease deed stipulated such payment obligations;(iii) Demanding hefty sums of money and imposing interest and penal interest when the developers were not even given peaceful possession of the land; (iv) Non- grant of zero period when (a) the project land was not handed over to the developers; (b) failure on GNIDA’s part to execute external developmental works; (v) Complete inaction on the multiple representations by the developers; and (vi) One sided clauses in the lease deed such as (a) no liability on GNIDA of providing clear land to the developers, whereas the developers have to adhere to strict timelines; (b) no clause which grants the developer any choice to opt for cancellation and refund of the deposited amounts in the event of any deviation or breach on part of GNIDA.

Decision: Dismissed.Reason:In this backdrop, the Commission notes that the Informants are primarily aggrieved of non-disclosure and allotment of encumbered land (riddled with disputes) to the developers and charging premium as well lease rent for the same; demanding additional farmer compensation from the developers even though no document- the scheme, allotment letter and the lease deed stipulated such payment obligations; demanding hefty sums of money and imposing interest and penal interest when the developers were not even given peaceful possession of the land; non- grant of zero period when the project land was not either handed over to the developers or failure on GNIDA’s part to execute external developmental works. Also, some contractual terms are alleged to be abusive.

Having examined the allegations and response of GNIDA thereon, for the reasons elaborated in the succeeding paras, the Commission is of the considered opinion that no interference is warranted in the matters.

To begin with, the Commission proceeds to examine the issue raised by the Informants that GNIDA is demanding additional farmer compensation without there being any clause in the lease deed to this effect. In this regard, the Commission notes that there is history of litigation on this point as highlighted by GNIDA in its reply wherein it has been pointed out that as per the order passed by the Hon’ble Allahabad High Court in the case of Gajraj & Ors. v. State of U.P. & Ors., (2011) 11 ADJ 1, it was held that the Authority would determine the manner in which the extra compensation being sought would be paid and the proportion in which it would be paid. It was also pointed out

that it is the discretion of the GNIDA to determine the manner and proportion of payments to be made by the Allottees. In pursuance to this, a decision was taken in the 114th Board Meeting of the GNIDA dated 31.05.2019, that the burden of additional compensation payment shall be transferred to the Allottees. Without further delving into this aspect, the Commission is of the opinion that the issue projected by the Informants in the form of a competition law violation, is not appropriate and the Commission is not inclined to interfere on this count in the matter.

On the issue of non-disclosure and allotment of encumbered land (riddled with disputes) to the developers and charging premium as well lease rent for the same, it has been submitted by GNIDA that every trade relation relies on the principle of Caveat Emptor i.e. Buyer Beware. It was stated that every purchaser/ buyer or in this case Lessee, is expected to ensure that she must make reasonable inspection of the property being transferred. It was further submitted that the Bid Document based on which the Scheme is advertised and invitation to bid is sent out, specifies clearly that if any land that has not been resumed, is a part of the land offered, attempts shall be made to resume the same or else alternative plot would be offered. Thus, it was pointed out that such information is always in public domain that there may be certain disputed areas in the total land acquired that falls within the area being plotted and allotted. Thus, it was submitted that if the developer submits its bid for the scheme, it is presumed that such circumstances are known and consented to.

Having examined the issue, the Commission is of the opinion that so long as the information about the status of the land is transparently made available to the potential developers, as affirmed by GNIDA, in a non-discriminatory basis and there is no asymmetry of information in this regard, the buyers or developers cannot be absolved of their own lack of due diligence or otherwise consensual behaviour.

Adverting to allegations pertaining to non- grant of zero period when the project land was not either handed over to the developers or failure on GNIDA’s part to execute external developmental works, it was submitted by GNIDA that item 107/13 of 107th Board Meeting of GNIDA lays down the following conditions for grant of ZERO PERIOD: (a) If due to certain reasons GNIDA is unable to transfer possession of the allotted land to the allottee (b) Due to law and order concerns or encroachment upon the allotted land, construction work cannot be undertaken on the allotted land (c) By orders of the court, if construction work has been stayed (d) Due to Government order or by the order of Board meeting of GNIDA, lease deed could not be executed in relation to the allotted land.

That on 09.03.2016, in the 104th Board Meeting of the GNIDA, decision was taken vide Item No. 104/35 to consider to provide Zero Period to those allottees who could not be granted physical possession due to various reasons and had made representations for the same. Thereafter in the 111th Board Meeting implementation mechanism of the same were discussed. It was submitted that wherever applicable the request for Zero Period has been granted and the same had been communicated through relevant Office Orders. It was also pointed out that these decisions of GNIDA are policy decisions and the Informant was free to challenge the same at the appropriate forum. However, such decisions were not commercial/ economic in nature and that they do not raise


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any competition concern. Hence, the same, if required, should have been challenged before the appropriate courts at an appropriate time.

It is not the case of the Informant that zero period policy was an obligation flowing from the contractual arrangements. If the State or the Authority, after taking into account the unforeseen difficulties faced by the developers or the difficulties which are beyond their control, comes out with a benevolent policy to offer solace to the developers, the same cannot be held against the Authority. This is, however, not to suggest that the Authority can deviate at its sweet will or otherwise discriminate or act in an arbitrary manner in implementing such policy, yet in the facts as provided by GNIDA and the various communications on this count between GNIDA and the developers, the Commission is not persuaded to interfere with the administrative decisions flowing out of a policy which is not part of contractual obligations.

With respect to undertaking external works, it was admitted by GNIDA that work of providing external infrastructure is a part of its obligations and it was stated that GNIDA has been undertaking the external work of constructing approach roads, drains, culverts, electricity distribution facilities, transmission lines, water supply, sewerage etc. on a massive scale in the region. It was also pointed out that GNIDA has undertaken the task of fulfilling these infrastructural development works efficiently and that has ensured the creation of Greater Noida region into a world class city. It was fairly conceded that only in the case of SAG Civitech there was a delay in completion of some of these tasks. It was, however, submitted that a delay to fulfil obligations in one project may not be considered as an abusive behaviour.

External Development Charges are paid by the developer to the civic authorities for maintenance of civic amenities within the periphery of the project and the development work of this kind normally includes the construction of roads, supply of water and electricity, landscaping, maintenance of drainage and sewage systems, waste management, and any other work that is likely to benefit the project at large. Thus, the utility of development of external work needs hardly any elaboration and the same is sine qua non for an orderly and timely completion of any project. In the present case, the Commission takes on record the submissions made by GNIDA that it has been undertaking such external works as per its contractual obligations on a massive scale in the region in an efficient way and in this view of the matter, no interference is warranted.

Coming to the allegation that GNIDA demanded hefty sums of money and imposed interest and penal interest when the developers were not even given peaceful possession of the land, the Commission notes that lease deed is a document that transfers vacant and unencumbered possession of the land to the lessee, however, there may be unforeseen instances where disputes have arisen after transfer of the possession to the lessee. In this regard, the Commission takes on record the submission of GNIDA that only the unencumbered vacant land is transferred through lease deed whereas with respect to the remaining land, a supplementary lease deed is executed when the land is acquired and for all other area of land, it is clearly provided that the date of execution of lease deed shall be considered as the date of possession. Furthermore, as pointed out by GNIDA, there have been certain instances

where the land may have been encumbered and, in those cases, only the unencumbered vacant land is transferred through Lease Deed whereas with respect to the remaining encumbered land, it is transferred only when the encumbrance has been removed through a Supplementary Lease Deed. This has to be seen also in the light of the fact that the terms and conditions detailing the penalty and penal interest are laid down in a transparent manner and are also made available to the potential developers.

On the alleged one-sided clauses in the lease deed such as (a) no liability on GNIDA of providing clear land to the developers, whereas the developers have to adhere to strict timelines; (b) no clause which grants the developer any choice to opt for cancellation and refund of the deposited amounts in the event of any deviation or breach on part of GNIDA, it cannot be denied, as submitted by GNIDA, that the acquisition process is a long and complex process. The details of the amount of land that may have been acquired and the limits that could not be acquired, are all public knowledge. This information is stated to be in the public domain and easily accessible to the developers at all stages. It was pointed out by GNIDA that it only enters into the Lease Deed for the land that is acquired and in its possession. For the remaining land, as submitted previously supplementary lease deeds are executed. It is, thus, unnecessary to have any clauses that direct GNIDA to hand over possession of land.

As regards, clearing the land is concerned, GNIDA submitted that it is beyond its duties/ powers and obligations to undertake the task of management of law and order over the property of a Lessee. The District administration and local police are the appropriate authority to assist the developers. Thus, such issues of encroachment that have arisen after the land has been allotted, are not the Authority’s obligation to resolve as the OP is obligated to provide land in the manner specified in the Lease Deed and it was submitted that the same has been done. Furthermore, with regard to strict timelines for developers, it was submitted that there have been many cases where extensions have been granted to the developers upon timely payment of dues. However, it is in the interest of the home buyers i.e. the end-consumer that projects are completed in time and possession handed over accordingly. It is evident from the number and magnitude of cases filed before the Real Estate Regulatory Authority, among other forums, that the developers who have made these allegations are failing in their duty to complete construction on time and the instant information are being used as an opportunity to evade responsibility.

In view of the foregoing and the reasons placed on record by GNIDA, the Commission is of the opinion that the justifications offered by the Authority appear to have some merit and the same have to be seen and appreciated in a holistic manner. The Commission agrees that post-execution of the lease deed and transfer of possession, the developers are at liberty to take the assistance of district administration and local police to address the issues of encroachment and law and order situations. The importance of timely execution of projects needs hardly any reiteration as it is in the larger public interest that projects are completed in time and possession handed over accordingly.


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LW 45: 06: 2021NEHA GUPTA v. TATA MOTORS LTD. & ORS [CCI]

Case No. 21 of 2019 and Case No. 16 of 2020

A.K. Gupta, Sangeeta Verma & B.S. Bishnoi. [Decided on 04/05/2021]

Competition Act, 2002- sections 3 & 4- automobile sector- dealer ship agreements- Allegations found to be prima facie maintainable- investigation by DG ordered.

Brief facts:

The Informants are stated to be authorised dealers of the OP Tata Motors Ltd. The Informant has alleged that (i) the OPs dictated and restricted the finance facility as per their discretion. The finance facility was extended by Tata Capital and Tata Motors Finance to the authorised dealers as per the direction and desire of Tata Motors; (ii) OPs were also able to earn illegal income from the authorised dealers by imposing high interest rate, penal interest, other illegal charges and adjustments on the channel finance loan facility extended by them; (iii) the practice of Tata Motors to coerce its dealers to order the vehicles according to its own whims and fancies is in violation of the provisions of Section 3(4) and Section 4 of the Act; and (iv) Tata Motors has entered into separate Memorandum of Understanding (‘MOU’) with Tata Capital and Tata Motors Finance, respectively, under which in case there is an overdue in the channel finance facility loan, Tata Capital and Tata Motors Finance have the discretion to inform Tata Motors to have the supply/ off-take of CVs for sale by an authorized dealer to be suspended/ blocked. Based on the above averments and allegations, the Informants has filed the instant information against Tata entities, as detailed hereinabove.

Decision: Investigation by DG ordered.Reason: When the aforesaid market structure and share is considered, it seems that Tata Motors enjoys prima facie a dominant position in the ‘market for manufacture and sale of commercial vehicles in India’ which enables it to enjoy a position of strength to operate independently of the competing forces prevailing in the market and affect its competitors or consumer in its favour.

Specifically, the Commission notes the allegation made by the Informant(s) that Tata Motors coerced its dealers to order vehicles according to its own whims and fancies by compelling the dealers to copy-paste the list of vehicles provided by Tata Motors on dealer’s letter head and sending back the same to Tata Motors.

Here, the Commission notes that VASPL has provided a complete trail of the e-mails as evidence that ex facie suggest that Tata Motors indulged in practice of coercing the dealers to bill vehicles as per its own needs and requirement. The same may result in swarming dealers with a stock of slow-moving vehicles and may further impair the financial health of the dealer. In such a disputed scenario of foundational facts, the Commission is of the view that such practice prima facie appears to be an unfair imposition upon the dealers besides being in the nature of a supplementary obligation imposed upon the dealers, in contravention of the provisions of Section 4(2)(a)(i) and 4(2)(d) of the Act and the matter requires an in-depth investigation to ascertain the factual basis.

The Commission next notes the allegations made by the dealers that the dealership agreement provides that the dealer shall not start, acquire, or indulge in any new business (of product or services) even if it is not related to the automobile industry. In this regard, Tata Motors in its response defended the said clause on the basis that it does not seek to impose a blanket restriction on the dealer for seeking an NOC. However, looking at the overarching restriction and the actual implementation of such clauses, the Commission has no hesitation in holding that the same appears to be unduly restrictive and expansive in its coverage and interferes with the freedom of trade. Consequently, the Commission is prima facie of the opinion that such clause is an unfair imposition upon the dealers besides resulting in denial of market access to the dealers to other markets in contravention of the provisions of Section 4(2)(a)(i) and 4(2)(c) of the Act, respectively.

As regards the allegations that Tata Motors obligated dealers to raise finance/ loan from NBFCs such as Tata Capital and Tata Motors Finance and did not readily issue comfort letters for availing financing facility from other lenders, in this regard by Tata Motors, the allegations made by VASPL do not appear to be well founded. Thus, the allegation of the Informant(s) on this count remains unsubstantiated and fails.

Lastly, the Commission notes that the Informant also alleged that the dealership agreement of every dealer with Tata Motors restricts and confines to the allotted territory. The said territory could be extended or curtailed simply by oral instruction from Tata Motors. It has been highlighted that such clause in the case of the Informant had specified the Informant’s territorial limit to the districts of Nashik only. Further, the Informant has alleged that vide e-mail dated 24.11.2017 Tata Motors restricted the Informant from selling vehicle in Jalgaon district of Maharashtra. Accordingly, the Informant has alleged that the same is in nature of ‘exclusive distribution agreement’ as mentioned under the provisions of Section 3(4)(c) of the Act.

Having considered the clause and the allegations made by the Informant in connection therewith, the Commission notes that such clause has the potential to create barriers to new entrants in the restricted market besides having the consequence of foreclosing of competition by hindering entry into the market. No tangible accrual of benefits to consumers or improvements in distribution have been shown by Tata Motors. It was, however, contended by Tata Motors that in the absence of such a clause discouraging the dealers to actively sell outside the allocated territories, the dealers would not be incentivized to make investment in developing the dealership business. Moreover, it was argued that such restrictions enhance inter-brand competition as the authorized dealers would be better positioned to effectively compete with the dealers appointed by the other manufacturers within the same territory.

Having examined the rival submissions on the point, the Commission is of the considered opinion that the defence raised by Tata Motors requires a detailed investigation to ascertain the effectiveness, veracity, and validation of this plea. In the considered view of the Commission, such restriction is prima facie in violation of the provisions of Section 3(4)(c) of the Act.

Based on the foregoing, the Commission is of the view that prima facie a case of contravention of the provisions of Section 3(4) and Section 4 of the Act is made out against Tata Motors, as detailed hereinabove in this order and the matter requires to be investigated.


FROM THE GOVERNMENT

3

n CLARIFICATION ON OFFSETTING THE EXCESS CSR SPENT FOR FY 2019-20n CLARIFICATION ON SPENDING OF CSR FUNDS FOR ‘CREATING HEALTH INFRASTRUCTURE FOR COVID

CARE’, ‘ESTABLISHMENT OF MEDICAL OXYGEN GENERATION AND STORAGE PLANTS’ ETC.n RELAXATION ON LEVY OF ADDITIONAL FEES IN FILING OF CERTAIN FORMS UNDER THE COMPANIES ACT,

2013 AND LLP ACT 2008 n RELAXATION OF TIME FOR FILING FORMS RELATED TO CREATION OR MODIFICATION OF CHARGES

UNDER THE COMPANIES ACT, 2013 n GAP BETWEEN TWO BOARD MEETINGS UNDER SECTION 173 OF THE COMPANIES ACT, 2013 (CA-13) - CLARIFICATIONn DISCLOSURE OF THE FOLLOWING ONLY W.R.T SCHEMES WHICH ARE SUBSCRIBED BY THE INVESTOR:

A. RISK-O-METER OF THE SCHEME AND THE BENCHMARK ALONG WITH THE PERFORMANCE DISCLOSURE OF THE SCHEME VIS-À-VIS BENCHMARK AND

B. DETAILS OF THE PORTFOLIOn FORMAT OF COMPLIANCE REPORT ON CORPORATE GOVERNANCE BY LISTED ENTITIESn ENHANCEMENT OF OVERALL LIMIT FOR OVERSEAS INVESTMENT BY ALTERNATIVE INVESTMENT FUNDS

(AIFS)/VENTURE CAPITAL FUNDS (VCFS)n RELAXATION FROM COMPLIANCE TO REITS AND INVITS DUE TO THE COVID -19 VIRUS PANDEMICn NOTIFICATION UNDER THE BILATERAL NETTING OF QUALIFIED FINANCIAL CONTRACT ACT, 2020n PROCEDURE FOR SEEKING PRIOR APPROVAL FOR CHANGE IN CONTROL OF SEBI REGISTERED PORTFOLIO MANAGERSn BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORTING BY LISTED ENTITIESn RELAXATION IN TIMELINES FOR COMPLIANCE WITH REGULATORY REQUIREMENTS BY DEBENTURE TRUSTEES DUE

TO THE COVID-19 PANDEMIC


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01 Clarification on offsetting the excess CSR spent for FY 2019-20

[Issued by the Ministry of Corporate Affairs Vide F. No. CSR-01/4/2021-CSR-MCA dated 20.05.2021. To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-Section (ii)]

1. Keeping in view the spread of COVID-19 in India, an appeal dated 30.03.2020 was made to MDs/CEOs of top 1000 companies in terms of market capitalization, to contribute generously to “Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund” (PM CARES Fund). In the appeal, it was mentioned that such contribution may, inter-alia, include the unspent CSR amount, if any, and an amount over and above the minimum prescribed CSR amount for FY 2019-20, which can later be offset against the CSR obligation arising in subsequent financial years. The said appeal was uploaded on the website of the Ministry and sent to e-mails of the aforementioned corporates on 31.03.2020.

2. In pursuance to the said appeal, certain companies claimed to have contributed CSR funds to the ‘PM CARES Fund’ over and above their prescribed CSR amount for FY 2019-20. Several representations have been received in the Ministry for setting off the excess CSR amount spent by the companies in FY 2019-20 by way of contribution to ‘PM CARES Fund' against the mandatory CSR obligation for FY 2020-21.

3. The issues raised in the said representations have been examined in the Ministry and accordingly, it is hereby clarified that where a company has contributed any amount to ‘PM CARES Fund’ on 31.03.2020, which is over and above the minimum amount as prescribed under section 135(5) of the Companies Act, 2013 (“Act”) for FY 2019-20, and such excess amount or part thereof is offset against the requirement to spend under section 135(5) for FY 2020-21 in terms of the aforementioned appeal, then the same shall not be viewed as a violation subject to the conditions that:

i. the amount offset as such shall have factored the unspent CSR amount for previous financial years, if any;

ii. the Chief Financial Officer shall certify that the contribution to “PM-CARES Fund” was indeed made on 31st March 2020 in pursuance of the appeal and the same shall also be so certified by the statutory auditor of the company; and

iii. the details of such contribution shall be disclosed separately in the Annual Report on CSR as well as in the Board’s Report for FY 2020-21 in terms of section 134 (3) (o) of the Act.

4. This issues with the approval of the competent authority.

SHOBHIT SRIVASTAVADeputy Director

02 Clarification on spending of CSR funds for ‘creating health infrastructure for COVID care’, ‘establishment of medical oxygen generation and storage plants’ etc.

[Issued by the Ministry of Corporate Affairs Vide F. No. CSR 01/05/2021 dated 05.05.2021. To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-Section (ii)]

1. In continuation to this Ministry's General Circular No. 10/2020 dated 23.03.2020, wherein it was clarified that spending of CSR funds for COVID-19 is an eligible CSR activity, it is further clarified that spending of CSR funds for ‘creating health infrastructure for COVID care’, ‘establishment of medical oxygen generation and storage plants’, ‘manufacturing and supply of Oxygen concentrators, ventilators, cylinders and other medical equipment for countering COVID-19’ or similar such activities are eligible CSR activities under item nos. (i) and (xii) of Schedule VII of the Companies Act, 2013 relating to promotion of health care, including preventive health care, and, disaster management respectively.

2. Reference is also drawn to item no. (ix) of Schedule VII of the Companies Act, 2013 which permits contribution to specified research and development projects as well as contribution to public funded universities and certain Organisations engaged in conducting research in science, technology, engineering, and medicine as eligible CSR activities.

3. The companies including Government companies may undertake the activities or projects or programmes using CSR funds, directly by themselves or in collaboration as shared responsibility with other companies, subject to fulfillment of Companies (CSR Policy) Rules, 2014 and the guidelines issued by this Ministry from time to time.

4. This issues with the approval of competent authority.

SHOBHIT SRIVASTAVADeputy Director

03 Relaxation on levy of additional fees in filing of certain Forms under the Companies Act, 2013 and LLP Act 2008

[Issued by the Ministry of Corporate Affairs Vide F. No. 02/01/2021-CL-V dated 03.05.2021. To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-Section (ii)]

1. Requests have been received from stakeholders for relaxation on levy of additional fees for filing of various forms under the Companies Act, 2013/LLP Act, 2008/Rules made thereunder due for filing during 1st April, 2021 to 31st May, 2021 in view of the COVID-19 related restrictions and disruption. The requests have been

CorporateLaws


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examined and taking into account the difficulties which have arisen due to resurgence of COVID-19 pandemic, it has been decided to grant additional time upto 31st July, 2021 for companiesj LLPs to file such forms (other than a CHG-1 Form, CHG-4 Form and CHG-9 Form) without any additional fees. Accordingly, no additional fees shall be levied upto 31st July, 2021 for the delayed filing of forms (other than charge related forms referred above) which were/would be due for filing during 1st April, 2021 to 31st May, 2021. For such delayed filings upto 31st July, 2021 only normal fees shall be payable.


KMS NARAYANANAssistant Director

04 Relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013


1. On account of the resurgence of COVID-19 pandemic, representations have been received in this Ministry requesting relaxation of timelines related to filing of certain charge related forms. The representations have been examined and the Central Government has, in exercise of its powers under section 460 read with section 403 of the Companies Act, 2013 (Act) and the Companies (Registration Offices and Fees) Rules, 2014, decided to allow relaxation of time and condone the delay in filing forms related to creation/modification of charges as per details given in para 2 of this Circular.

2. (i) Applicability:- This Circular shall be applicable in respect of filing of Form No. CHG-1 and Form No. CHG-9 (both referred as 'form' or 'forms) by a company or a charge holder, where the date of creation/modification of charge:

a. is before 01.04.2021, but the timeline for filing such form had not expired under section 77 of the Act as on 01.04.2021, or

b. falls on any date between 01.04.2021 to 31.5.2021 (both dates inclusive).

(ii) Relaxation of time:

a. In case a form is filed in respect of a situation covered under sub-para (i)(a) above, the period beginning from 01.04.2021 and ending on 31.05.2021 shall not be reckoned for the purpose of counting the number of days under section 77 or section 78 of the Act. In case, the form is not filed within such period, the first day after 31.03.2021 shall be reckoned as 01.06.2021 for the purpose of counting the number of days within which the form is required to be filed under section 77 or section 78 of the Act.

b. In case a form is filed in respect of a situation covered under sub-para (i)(b) above, the period beginning from the date of creation/modification of charge to

31.05.2021 shall not be reckoned for the purpose of counting of days under section 77 or section 78 of the Act. In case, the form is not filed within such period, the first day after the date of creation/ modification of charge shall be reckoned as 01.06.2021 for the purpose of counting the number of days within which the form is required to be filed under section 77 or section 78 of the Act.

(iii) Applicable Fees:

a. In regard to sub-para (ii)(a) above, if the form is filed on or before 31.05.2021, the fees payable as on 31.03.2021 under the Fees Rules for the said form shall be charged. If the form is filed thereafter, the applicable fees shall be charged under the Fees Rules after adding the number of days beginning from 01.06.2021 and ending on the date of filing plus the time period lapsed from the date of the creation of charge till 31.03.2021.

b. In regard to sub-para (ii)(b) above, if the form is filed before 31.05.2021, normal fees shall be payable under the Fees Rules. If the form is filed thereafter, the first day after the date of creation/modification of charge shall be reckoned as 01.06.2021 and the number of days till the date of filing of the form shall be counted accordingly for the purposes of payment of fees under the Fees Rules.

(iv) The Circular shall not apply, in case:

a. The forms i.e.CHG-1 and CHG-9 had already been filed before the date of issue of this Circular.

b. The timeline for filing the form has already expired under section 77 or section 78 of the Act prior to 01.04.2021.

c. The timeline for filing the form expires at a future date, despite exclusion of the time provided in sub-para (ii) above.

d. Filing of Form CHG-4 for satisfaction of charges.

3. This issues with the approval of the Competent Authority.


05 Gap between two board meetings under section 173 of the Companies Act, 2013 (CA-13) - Clarification


1. In view of the difficulties arising due to resurgence of Covid-19 and requests received from stakeholders, it has been decided that the requirement of holding meetings of the Board of the companies within the intervals provided in section 173 of the Companies Act, 2013 (120 days) stands extended by a period of 60 days for first two quarters of Financial Year 2021-22. Accordingly, the gap between two


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during the Quarter- April to June 2021 and Quarter- July to September, 2021, instead of 120 days as required in the Companies Act, 2013.



06 Disclosure of the following only w.r.t schemes which are subscribed by the investor:a. risk-o-meter of the scheme and the

benchmark along with the performance disclosure of the scheme vis-à-vis benchmark and

b. Details of the portfolio[Issued by the Securities and Exchange Board of India vide Circular No. SEBI/HO/IMD/IMD-II DOF3/P/CIR/2021/566 dated 31.05.2021]

1. SEBI, vide circular no. SEBI/HO/IMD/IMD-II DOF3/P/CIR/2021/555 dated April 29, 2021, specified disclosures with regard to disclosure of (a) risk-ometer of the scheme and the benchmark along with the performance disclosure of the scheme vis-à-vis benchmark and (b) details of portfolio, which were applicable from June 01, 2021.

2. Based on the representation received from AMFI, it has been decided to extend the implementation date of the provisions of the aforesaid circular to September 1, 2021.

3. This circular is issued in exercise of the powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act 1992, read with the provision of Regulation 77 of SEBI (Mutual Funds) Regulation, 1996 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.

BITHIN MAHANTAGeneral Manager

07 Format of compliance report on Corporate Governance by Listed Entities

[Issued by the Securities and Exchange Board of India vide Circular No. SEBI/HO/CFD/CMD-2/P/CIR/2021/567 dated 31.05.2021]

1. As per the provisions of Regulation 27(2) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), a listed entity is required to submit a quarterly compliance report on corporate governance in the format specified by the Board from time to time to recognised Stock Exchange(s).

2. The format for compliance report on Corporate Governance by listed entities has been specified, as per the following annexures, vide Circular No. CIR/CFD/CMD/5/2015 dated September 24, 2015 and modified vide Circular No. SEBI/HO/CFD/CMD1/CIR/P/2019/78 dated July 16, 2019.

I. Annex - I - on quarterly basis; II. Annex - II - at the end of a financial year III. Annex - III - at the end of 6 months from the close of

financial year.

3. In order to bring about transparency and to strengthen the disclosures around loans/ guarantees/comfort letters/ security provided by the listed entity, directly or indirectly to promoter/ promoter group entities or any other entity controlled by them, it has been decided to mandate such disclosures on a half yearly basis, in the Compliance Report on Corporate Governance. The format of disclosure in this regard is specified vide Annex - IV of the said report and shall be effective from financial year 2021-22.

4. Accordingly the format for compliance report on Corporate Governance shall be as under:

I. Annex - I - on quarterly basis; II. Annex - II - at the end of a financial year III. Annex - III - at the end of 6 months from the close of

financial year. IV. Annex - IV - on a half yearly basis (w.e.f. first half year

of the FY 21-22)

5. This circular supersedes the aforementioned SEBI Circulars dated September 24, 2015 and July 16, 2019.

6. The Stock Exchanges are advised to bring the provisions of this Circular to the notice of listed entities and also disseminate the same on their websites.

7. This Circular is issued in exercise of the powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 read with Regulation 101 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

SURABHI GUPTAGeneral Manager

Complete details are not published here for want of space. For complete notification readers may log on to www.sebi.gov.in

08 Enhancement of overall limit for overseas investment by Alternative Investment Funds (AIFs)/Venture Capital Funds (VCFs)

[Issued by the Securities and Exchange Board of India vide Circular No. SEBI/HO/IMD/DF6/CIR/P/2021/565 dated 21.05.2021]

1. In terms of SEBI Circulars No. SEBI/VCF/CIR No. 1/98645/2007 dated August 09, 2007, CIR/IMD/DF/7/2015 dated October 01, 2015, and SEBI/HO/IMD/DF1/CIR/P/ 2018/103/2018 dated July 3, 2018, SEBI registered AIFs and VCFs are permitted to invest overseas, subject to an overall limit of USD 750 million.


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2. In consultation with the Reserve Bank of India, the said limit has now been enhanced to USD 1,500 million. Further, all other regulations governing such overseas investment by eligible AIFs/VCFs shall remain unchanged.

3. All other requirements, terms and conditions specified in the aforesaid SEBI Circulars shall remain unchanged.

4. This Circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.

5. This Circular is available on SEBI website at www.sebi.gov.in under the categories “Legal Framework - Circulars” and “Info for - Alternative Investment Funds”.

SANJAY SINGH BHATIDeputy General Manager

09 Relaxation from compliance to REITs and InvITs due to the COVID -19 virus pandemic

[Issued by the Securities and Exchange Board of India vide Circular No. SEBI/HO/DDHS/DDHS_Div3/P/CIR/2021/563 dated 14.05.2021]

1. SEBI is in receipt of representations from InvITs and REITs requesting extension of timelines for various regulatory filings and compliances for InvITs and REITs for the period ending March 31, 2021, inter-alia, due to ongoing second wave of the COVID-19 pandemic and restrictions imposed by various state governments.

2. After consideration, it has been decided to extend the due date for regulatory filings and compliances for InvITs and REITs for the period ending March 31, 2021 by one month over and above the timelines, prescribed under SEBI (Infrastructure Investment Trusts) Regulations, 2014 (InvIT Regulations) and SEBI (Real Estate Investment Trusts) Regulations, 2014 (REIT Regulations) and circulars issued thereunder.

3. The Circular is issued in exercise of the powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 read with Regulation 33 of InvIT Regulations and Regulation 33 of the REIT Regulations. This Circular is available on SEBI website at www.sebi.gov.in under the link “Legal Circulars”.

SABIR SAWANTDeputy General Manager

10 Notification under the Bilateral Netting of Qualified Financial Contract Act, 2020

[Issued by the Securities and Exchange Board of India vide Circular No. SEBI/LAD-NRO/GN/2021/24. dated 12.05.2021] In exercise of the powers conferred by clause (b) of Section 4 read with sub-clause (vi) of clause (o) of sub-section (1) of section 2 of the Bilateral Netting of Qualified Financial Contract Act, 2020 (30 of 2020), the Securities and Exchange Board of India hereby specifies the following entities as qualified financial market participants, which subject to the provisions as may be specified by the Securities and Exchange Board

of India, may enter into qualified financial contracts notified by any regulatory authority as specified in the First Schedule: -

1. Mutual Fund registered with Securities and Exchange Board of India; and

2. Alternative Investment Fund registered with Securities and Exchange Board of India.

AJAY TYAGIChairman

11 Procedure for seeking prior approval for change in control of SEBI registered Portfolio Managers

[Issued by the Securities and Exchange Board of India vide Circular No. SEBI/HO/IMD/IMD-I/DOF1/P/CIR/2021/564 dated 12.05.2021]

1. Regulation 11 of the SEBI (Portfolio Managers) Regulations, 2020 prescribes the conditions of registration as a Portfolio Manager. Vide SEBI (Portfolio Managers) (Second Amendment) Regulations, 2021 notified on April 26, 2021, a Sub-regulation (aa) has been inserted in the aforesaid Regulation 11. The link for the said amendment is available at https://www.sebi.gov.in/legal/regulations/apr-2021/securities-and-exchange-board-of-india-portfolio-managers-second-amendment-regulations-2021_49943.html

2. Regulation 11(aa) provides that a Portfolio Manager shall obtain prior approval of SEBI in case of change in control in such manner as may be specified by SEBI. Accordingly, it has been decided that all SEBI registered Portfolio Managers shall comply with the following in case they propose a change in control:

a. An online application shall be made to SEBI for prior approval through the SEBI Intermediary Portal (https://siportal.sebi.gov.in).

b. The prior approval granted by SEBI shall be valid for a period of six months from the date of such approval.

c. Applications for fresh registration pursuant to change in control shall be made to SEBI within six months from the date of prior approval.

d. Pursuant to grant of prior approval by SEBI, all the existing investors/ clients shall be informed about the proposed change prior to effecting the same, in order to enable them to take well informed decision regarding their continuance or otherwise with the changed management.

3. This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 read with Regulation 43 of the SEBI (Portfolio Managers) Regulations, 2020, to protect the interests of investors in securities market and to promote the development of, and to regulate the securities market.

4. The circular is available on SEBI website at www.sebi.gov.in under the categories “Info for – Portfolio Managers” and "Legal framework - Circulars".

MANASWINI MAHAPATRAGeneral Manager


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NT 12 Business responsibility and sustainability

reporting by listed entities

[Issued by the Securities and Exchange Board of India vide Circular No. SEBI/HO/CFD/CMD-2/P/CIR/2021/562 dated 10.05.2021] 1. In recent times, adapting to and mitigating climate change

impact, inclusive growth and transitioning to a sustainable economy have emerged as major issues globally. There is an increased focus of investors and other stakeholders seeking businesses to be responsible and sustainable towards the environment and society. Thus, reporting of company’s performance on sustainability related factors has become as vital as reporting on financial and operational performance.

2. SEBI vide Circular no. CIR/CFD/CMD/10/2015 dated November 04, 2015 has prescribed the format for the Business Responsibility Report (BRR) in respect of reporting on ESG (Environment, Social and Governance) parameters by listed entities.

3. In terms of amendment to regulation 34 (2) (f) of LODR Regulations vide Gazette notification no. SEBI/LAD-NRO/GN/2021/22 dated May 05, 2021, it has now been decided to introduce new reporting requirements on ESG parameters called the Business Responsibility and Sustainability Report (BRSR). The BRSR is accompanied with a guidance note to enable the companies to interpret the scope of disclosures. The format of the BRSR and the guidance note are detailed in Annexure I and Annexure II respectively.

4. The BRSR seeks disclosures from listed entities on their performance against the nine principles of the ‘National Guidelines on Responsible Business Conduct’ (NGBRCs) and reporting under each principle is divided into essential and leadership indicators. The essential indicators are required to be reported on a mandatory basis while the reporting of leadership indicators is on a voluntary basis. Listed entities should endeavor to report the leadership indictors also.

5. The BRSR is intended towards having quantitative and standardized disclosures on ESG parameters to enable comparability across companies, sectors and time. Such disclosures will be helpful for investors to make better investment decisions. The BRSR shall also enable companies to engage more meaningfully with their stakeholders, by encouraging them to look beyond financials and towards social and environmental impacts.

6. The listed entities already preparing and disclosing sustainability reports based on internationally accepted reporting frameworks (such as GRI, SASB, TCFD or Integrated Reporting) may cross-reference the disclosures made under such framework to the disclosures sought under the BRSR.

Applicability

7. In terms of the aforesaid amendment, with effect from the financial year 2022-2023, filing of BRSR shall be mandatory for the top 1000 listed companies (by market capitalization) and shall replace the existing BRR. Filing of BRSR is voluntary for the financial year 2021-22.

8. The Stock Exchanges are advised to bring the provisions of this circular to the notice of all listed entities and also disseminate the same on their websites.

9. The Circular is issued in exercise of the powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 read with Regulation 101 of the LODR.

SURABHI GUPTAGeneral Manager

13 Relaxation in timelines for compliance with regulatory requirements by Debenture Trustees due to the COVID-19 pandemic

[Issued by the Securities and Exchange Board of India vide Circular No. SEBI/HO/MIRSD/CRADT/CIR/P/2021/561 dated 03.05.2021]

1. As per SEBI (Debenture Trustees) Regulations,1993 as amended from time to time and circulars issued thereunder, debenture trustees are required to perform periodical monitoring and disclose various reports/documents/certificates on Stock Exchanges and on their websites within prescribed timelines.

2. Representations have been received from debenture trustees with regard to relaxation in timelines for complying with certain regulatory provisions of SEBI Circular No. SEBI/ HO/ MIRSD/ CRADT/ CIR/ P/ 2020/230 dated November 12,2020 (“Circular”).

3. After taking into consideration the representations received from debenture trustees and the challenges arising out of the local restrictions placed by various state governments in wake of COVID-19 pandemic, it has been decided to extend the timelines for the following regulatory requirements of the SEBI circular dated November 12,2020 for the quarter/half year/ year ending March 31, 2021:

S. No.

Regulatory requirements of SEBI circular dated November 12, 2020

Extended timeline

1. Submission of reports/certifications to Stock Exchanges as per clause 2.1 of circular

July 15th, 2021

2. Following disclosures on website as per clause 4 of circular:i. Monitoring of asset cover certificate

and quarterly compliance report of the listed entity.

ii. Monitoring of utilization certificateiii. Status of information regarding

breach of covenants/terms of the issue, if any action taken by debenture trustee

iv. Status regarding maintenance of accounts maintained under supervision of debenture trustee

July 15th, 2021

3. Reporting of regulatory compliance as per clause 5 of circular

May 31st,2021

4. This circular is issued in exercise of the powers conferred upon SEBI under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 read with the provisions of Regulation 2A of the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993 to protect the interest of investors in securities and to promote the development of, and to regulate, the securities market.

RICHA G. AGARWALGeneral Manager


The Quality review Board (Board) of ICSI has been constituted by the Ministry of Corporate Affairs to make recommendations to the Council with regard to the quality of services provided by the members of the Institute; to review the quality of services provided by the members of the Institute including secretarial services; and to guide the members of the Institute to improve the quality of services and adherence to the various statutory and other regulatory requirements.With a view to carry out the above mentioned functions, the Board contemplates to avail the services of senior members of the profession as Quality Reviewers to assess the quality of services being rendered by Company Secretaries both in practice and in employment.Revised Eligibility criterion for Quality Reviewers-A Quality Reviewer shall fulfil the criteria mentioned in para I or para II:- I. An individual desiring to be empanelled: a) Be a Fellow member of ICSI; and

ANNOUNCEMENTQUALITY REVIEW BOARD OF ICSI INVITES APPLICATIONS

FOR EMPANELMENT OF “QUALITY REVIEWERS” b) Possess at least fifteen years of post-membership

experience as Company Secretary in Practice or employment in the Secretarial Department of a Company or as a combination of practice and employment in the Secretarial Department of a Company; and

c) Be currently in practice of the profession of company secretaries.”

II. An individual desiring to be empanelled a) Be empanelled Peer Reviewers and has completed

minimum 5 assignments of Peer ReviewThe Board assigns review of Quality of services rendered by the members to Quality Reviewers.For payment terms and other details please refer to Terms of Reference for Quality Reviewers available at https://www.icsi.edu/qrboard/home/ Interested persons may kindly apply in the enclosed format and send it through e-mail to [email protected]

Book Release:

On the occasion of 22nd Foundation Day of ICSI-CCGRT, as a mark of special initiative, ICSI-CCGRT has come out with one publication titled on ‘Approach to Project Finance and Understanding Financial Statements’ which is very helpful to the CS Members. Brief on book:

The Companies Act 2013 shouldered greater responsibilities by designating

Company Secretary as Key Managerial Personnel. As KMP, Company Secretary must equip himself with finance and understanding financial statements. Keeping in view the importance of topic, CCGRT released a handy book titled on ‘Approach to Project Finance and understanding Financial Statements’.Finance is life blood of every business organization. Adequate sources and effective deployment of finance will ensure the survival and development of any business organization. Therefore, to make the understanding simplified, the book

Approach to Project Finance and understanding Financial Statements

is divided into two parts. In the first part of this publication, various important aspects for preparing project reports have been discussed. In the second part, various components of financial statements and tools to interpret the same have been covered. This book provides coverage on the below mentioned topics from practical aspects – (i) Pre-project report related activities, (ii) Various components of project report, (iii) Factors affecting the proposed project, (iv) Project report preparation, presentation and submission, (v) Handling query post submission of project report, (vi) Loan agreement and other legal documentations, (vii) Mobilization of funds through financial instruments like equity shares, preference shares, debentures, bonds, etc., (viii) Deployment of funds, (ix) Understanding the structure of Financial Statements, and (x) Analysis of financial statements through various analytical tools and other non-financial factors.After going through this book, a reader will be able understand the nitty-gritty of project report preparation and understanding of financial statements. This book has been prepared in summarized and handy form considering the prevailing financial market conditions. This publication is equally important for company secretary in practice and employments.

Book your copy:

Selling Price: Rs. 350/- (plus postal charges). The publication is available for sale on the official website of CCGRT, https://www.icsi.edu/ccgrt/home/. Order can be placed through online payment of fee.


PROFORMA FOR INCLUSION OF NAME IN THE PANEL OF “QUALITY REVIEWERS” CONSTITUTED UNDER THE AEGIS OF “QUALITY REVIEW BOARD”

To,Quality Review BoardThe Institute of Company Secretaries of IndiaICSI House Photograph22, Institutional Area, Lodi Road New Delhi - 1100 003

1. Applicant’s Name Mr/Ms/Dr. (in Capital Letter)

FIRST MIDDLE LAST

2. Father’s/Husband’s Name Mr. (in Capital Letter)

FIRST MIDDLE LAST

3. Date of Birth (DD MM YYYY)

4. Institute's Membership details:

Particulars Membership Number Month & Year of membershipACS detailsFCS detailsCOP details

5. Contact details in CAPITAL letters

Residential ProfessionalAddressCityStatePIN CodePhone No With STD Code:Mobile No.E-mail Address

6. Details of academic, professional and Post Membership qualifications (Graduation onwards):

Examination Passed University / Institution

Main subjects, if any

Name of Exam Year


7. Current Occupation (indicate major area(s) in which services rendered): ________________________________________________________________________________________________

________________________________________________________________________________________________

________________________________________________________________________________________________

8. Work experience: Do you possess minimum fifteen years of post-membership experience as Company Secretary in Practice or employment in

the Secretarial Department of a Company or as a combination of practice and employment in the Secretarial Department of a Company;

(Yes/No)

9. Are you empanelled Peer Reviewers who has completed minimum 5 assignments of Peer Review. If yes, please share the below details: (Yes / No)

a. Peer Reviewer Code: ___________ b. Details of the Peer Review done:

Sl. no. Name of the Practice Unit Year of Review

Please add separate sheet, if required.

10. Details of Post Qualification Experience in Employment/Practice (if require, attach separate sheet)

Name of the Employer/s

Designation Professional Experience Work Assigned / Performed

From To

11. Are you member of Council / Regional Council / Managing Committee of Chapter, if yes; please provide the details: ________________________________________________________________________________________________

________________________________________________________________________________________________

12. Other professional achievements, if any: ________________________________________________________________________________________________

________________________________________________________________________________________________

________________________________________________________________________________________________

________________________________________________________________________________________________


13. Whether any penal action under any law has been taken/pending against you during last 5 financial years and/or thereafter? (Yes/No)

If yes, please give details thereof: ________________________________________________________________________________________________

________________________________________________________________________________________________

________________________________________________________________________________________________

14. Whether you have been charged for any criminal proceedings / cognizance of offence. If yes, please give details thereof: (Yes/No)

________________________________________________________________________________________________

________________________________________________________________________________________________

________________________________________________________________________________________________

________________________________________________________________________________________________

I hereby declare that the information given above is true and correct to the best of my knowledge and belief and that nothing has been concealed therefrom.

Place:

Date: (Signature)

(Name_________________________________)

For Office Use Only:

1. Whether complete information in the prescribed format is given:

a. a Fellow member of ICSI Yes No

b. Possess at least fifteen years of post- membership experience as Company Secretary in Practice or employment in the Secretarial Department of a Company or as a combination of practice and employment in the Secretarial Department of a Company

Yes No

c. Be currently in practice of the of profession company secretaries Yes No

d. Empanelled Peer Reviewers who has completed minimum 5 assignment of Peer Review

Yes No

2. Whether all other applicable points of the form have been filled:

Yes No

If no, give details ______________________________________________________________________________

____________________________________________________________________________________________

3. Whether applicant is to be considered for allotment of reviews:

Yes No

Remarks_____________________________________________________________________________________

____________________________________________________________________________________________

4. Reference No. allotted ………………...................


4NEWS FROM THE

INSTITUTE

n MEMBERS RESTORED DURING THE MONTH OF APRIL 2021

n CERTIFICATE OF PRACTICE SURRENDERED DURING THE MONTH OF APRIL 2021

n ATTENTION

n PAYMENT OF ANNUAL LICENTIATE SUBSCRIPTION FOR THE YEAR 2021-2022

nCHANGE / UPDATION OF ADDRESS

n PAYMENT OF ANNUAL MEMBERSHIP & CERTIFICATE OF PRACTICE FEE FOR THE YEAR 2021-2022

n OBITUARIES

n LIST OF PRACTICE UNITS PEER REVIEWED DURING MAY, 2021


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InstituteNews

MEMBERS RESTORED DURING THE MONTH OF APRIL 2021

SL. NO. NAME MEMB NO REGION

1 CS BALJEET KAUR ACS - 37621 EIRC2 CS MANOJ KUMAR PAREEK ACS - 24857 NIRC3 CS SANJAY KUMAR JOHRI ACS - 17838 NIRC4 CS AJAY KUMAR JAIN FCS - 4729 EIRC5 CS KOMAL RAJKUMAR SHAH ACS - 52903 SIRC6 CS KAVITA ACS - 35128 NIRC7 CS RAJESH RUSTAGI FCS - 2943 NIRC8 CS ASIM KUMAR SUR FCS - 4703 EIRC9 CS SUHAS KANNOTH ACS - 53403 SIRC

10 CS DAU DAYAL BANSAL FCS - 1875 NIRC11 CS DEEPALI T N ACS - 20194 SIRC12 CS MITTALI UDAYPARULKAR ACS - 46988 NIRC13 CS FALGUNI DILIPBHAI SHAH ACS - 45997 WIRC14 CS AMISHA ACS - 49300 NIRC15 CS ANISHA FALOR ACS - 49083 NIRC16 CS SIKHA DHANUKA ACS - 48636 EIRC17 CS TATHAGATA MITRA ACS - 29389 NIRC18 CS MITTALI UDAYPARULKAR ACS - 46988 NIRC19 CS KRISHNA RAMACHANDRAN ACS - 12278 SIRC

20 CS SURUCHI GERA ACS - 34235 NIRC21 CS D MURALI ACS - 21215 SIRC22 CS TWINKLE VOHRA ACS - 12718 SIRC23 CS ARADHANA VERMA ACS - 15276 WIRC24 CS SONIA ACS - 26032 NIRC25 CS PRASHANT VARMA FCS - 4321 NIRC26 CS KIRAN BALA ACS - 47397 NIRC27 CS REEMA ANUJ KATAKIA FCS - 8328 WIRC28 CS VAIBHAV SHARMA ACS - 44289 WIRC29 CS SANDEEP KUMAR AGRAWAL ACS - 13003 SIRC30 CS APOORVA BHANDARI ACS - 40839 F/NIRC31 CS SOURABH BANSAL ACS - 49529 WIRC32 CS SUGANDHA GUPTA ACS - 49944 NIRC33 CS S S AGARWAL ACS - 6177 SIRC34 CS NISHANT DEWAN ACS - 35698 NIRC35 CS PRIYADARSANI SAHOO ACS - 49031 EIRC36 CS SANJAY C AJGAONKAR ACS - 13741 SIRC37 CS PRACHI KISHORE PATHAK ACS - 57281 WIRC38 CS JAYASHREE DHIRSINGH

RAJPUTACS - 29876 WIRC

39 CS NIDHI AGARWAL ACS - 30036 EIRC

40 CS SUNIL GAJANAN JOGLEKAR ACS - 10636 WIRC41 CS PRIYANKA GULATI ACS - 23630 SIRC42 CS MONA SARDA ACS - 55433 SIRC43 CS VIJAY KUMAR JAIN FCS - 1899 NIRC44 CS MANSI MAULIK BAGADIYA ACS - 56143 WIRC45 CS RAMAN SINGH ACS - 32716 NIRC46 CS SANKET SHIVKANT SHARMA ACS - 44982 WIRC47 CS S S AGARWAL ACS - 6177 EIRC48 CS NISHANT DEWAN ACS - 35698 NIRC49 CS APOORVA BHANDARI ACS - 40839 F/NIRC50 CS PRIYADARSANI SAHOO ACS - 49031 EIRC51 CS SOURABH BANSAL ACS - 49529 NIRC52 CS SUGANDHA GUPTA ACS - 49944 NIRC53 CS PRACHI KISHORE PATHAK ACS - 57281 WIRC54 CS MANSI RAMESHKUMAR

SHETHACS - 56143 WIRC

55 CS NIDHI AGARWAL ACS - 30036 EIRC56 CS SUNIL GAJANAN JOGLEKAR ACS - 10636 WIRC57 CS VIJAY KUMAR JAIN FCS - 1899 NIRC58 CS JAYASHREE DHIRSINGH

RAJPUTACS - 29876 WIRC

59 CS MONA SARDA ACS - 55433 SIRC60 CS SANKET SHIVKANT SHARMA ACS - 44982 WIRC61 CS RAMAN SINGH ACS - 32716 NIRC62 CS REEMA ANUJ KATAKIA FCS - 8328 WIRC63 CS SANJAY C AJGAONKAR ACS - 13741 WIRC64 CS PRIYANKA GULATI ACS - 23630 SIRC65 CS ANISHA FALOR ACS - 49083 NIRC

CERTIFICATE OF PRACTICE SURRENDERED DURING THE MONTH OF APRIL 2021

SL. NO.

NAME MEMB NO. COP NO.

REGION

1 CS DEEPAK SHARMA FCS - 11129 23363 NIRC2 CS DEEPA BAJAJ ACS - 22604 17598 WIRC3 CS SUNIL SUDHAKAR

GUPCHUPACS - 17194 5494 WIRC

4 CS ALEX JOY ACS - 62531 23669 SIRC5 CS KOSHANI DEEPAK SHAH ACS - 50941 20747 WIRC6 CS MALVIKA KAPASI ACS - 52602 23465 WIRC7 CS SRIKANT MOHAN FCS - 6177 11112 SIRC8 CS POOJA KATHPAL ACS - 48664 17735 NIRC9 CS MANASY AMIT

ABHYANKARACS - 17386 17550 WIRC

10 CS MEENAL VISHWAJEET JADHAV

ACS - 51559 21880 WIRC

11 CS LEENA RONAK KARANPURIA

ACS - 52862 19489 NIRC

12 CS NILAMBARI RAMCHANDRA SHAH

ACS - 63107 23773 WIRC

13 CS POOJA MISHRA ACS - 62900 24064 NIRC14 CS SHAGUN BHARDWAJ ACS - 32399 23941 NIRC15 CS KAJOL BABANI ACS - 55092 22201 WIRC16 CS MINAL DINESH

AGARWALACS - 60033 22661 WIRC

17 CS SRIKANTA MOHANTY ACS - 39420 14982 EIRC


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CHANGE / UPDATION OF ADDRESS

The members are requested to check their professional and residential addresses and make changes, if any, online through Member Login following the given below steps:� Login to portal www.icsi.edu� Click Online services in the Menu and then click on Member� Fill the User name: Enter your membership number (e.g. A1234) and Password. In case a member does not have/

remember his/her password, he/she can get the password by clicking on the “Retrieve Password” option. The password will be sent to his/her email/mobile registered with the Institute. Alternatively, he/she may send email at [email protected] from his/her email registered with the Institute to get the password on the said email id.

� After login, go to Members Option then click on Manage Account� Then click on Change of Address and professional / residential option and click Go button� Then make changes required and Click on Submit.Members are required to verify and update their address and contact details as required under Regulation 3 of the CS Regulations, 1982 amended till date

PAYMENT OF ANNUAL LICENTIATE SUBSCRIPTION FOR THE YEAR 2021-2022

The annual Licentiate subscription for the year 2021-2022 has become due for payment w.e.f. 1st April, 2021. The last date of making payment has been extended to 30th September, 2021. The Licentiate subscription payable is Rs.1180/- inclusive of applicable GST@18%. The subscription will be paid ONLINE only using the link - http://stimulate.icsi.edu/ with your student login credentials. Log in to the link - http://stimulate.icsi.edu/ with your student credentials.Username – Will be your registration number.You may reset the new password at https://smash.icsi.in/Scripts/GetPassword.aspx and login at https://smash.icsi.in/Scripts/login.aspx and https://stimulate.icsi.edu/.Click Renew option and make the payment.For any further queries, please write to [email protected] or raise query at http://support.icsi.edu

18 CS PRANOTI SHIRISH SHINDE

ACS - 29327 23026 WIRC

19 CS ABISHEK GIYA ACS - 60172 23540 SIRC20 CS RAJ KUMAR GUPTA FCS - 6267 9315 NIRC21 CS VANDANA SHUKLA ACS - 52342 20302 NIRC22 CS VARSHA

SHRIPURUSHOTTAM MAHESHWARI

ACS - 52219 23746 WIRC

23 CS SUNKARA VENKATESWARA RAO

FCS - 10989 15718 SIRC

24 CS PANKAJ KUMAR ACS - 60137 23581 NIRC25 CS NEELAM JAYESH DESAI FCS - 10017 21902 WIRC26 CS EKTA BENIA ACS - 43551 18745 EIRC27 CS GOPASANDRA

RAMANNA MURALIACS - 50790 18489 SIRC

28 CS SONALI JAIN ACS - 42437 19533 SIRC29 CS SHAHBAZ KHAN ACS - 62299 23325 WIRC

30 CS HIMANDRI VERMA ACS - 45171 21164 NIRC

31 CS ARUNDHUTHI BOSE ACS - 50064 20216 EIRC

32 CS ARCHIT AGARWAL ACS - 30928 16595 NIRC

33 CS SHAHNAWAZ AHMAD ACS - 41534 18913 NIRC

34 CS MOHAMMAD FARHAN SIDDIQUI

ACS - 41166 15339 NIRC

35 CS MANISH SHARDA ACS - 59640 22413 NIRC

36 CS SANDHYA VENKATESAN ACS - 58670 22686 SIRC

37 CS GIRDHARI LAL JHAWAR ACS - 9271 22813 EIRC

38 CS KAKUTURU BHARGHAV TEJA

ACS - 50871 18410 SIRC

39 CS SHIPRA GUPTA ACS - 59212 22263 NIRC

40 CS RANI SONI ACS - 49193 18752 EIRC

41 CS SHRUTI MISHRA ACS - 51055 24205 EIRC

ATTENTION!

For latest admission of Associate and Fellow Members, Life Members of Company Secretaries Benevolent Fund (CSBF), Licentiates and issuance of Certificate of Practice, kindly refer to the link https://www.icsi.edu/member


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The annual membership fee and certificate of practice fee for the year 2021-22 has become due for payment w.e.f. 1st April, 2021. The last date for the payment of annual membership fee and certificate of practice fee has been extended to 30th September. 2021.

The annual membership and certificate of practice fee payable are as follows:

Particulars Associate (admitted till 31.03.2020)

Associate (admitted on or after 01.04.2020)

Fellow

Annual Membership fee* Rs. 2950 Rs. 1770 Rs. 3540Certificate of Practice fee* Rs. 2360 Rs. 1770 Rs. 2360

Entrance fee** Rs. 2360 Rs. 2360 Rs. 2360Restoration fee*** Rs. 295 Rs. 295 Rs. 295

* Fee inclusive of applicable GST@18%. ** Fee inclusive of applicable GST@18% and applicable if annual membership fee is not received by 30th September, 2021. *** Fee inclusive of applicable GST@18% and applicable if annual membership fee and certificate of practice fee is not received by 30th September, 2021

A member who is of the age of seventy years or above can claim 75% concession (automatically calculated by the system) in the payment of Associate/Fellow Annual Membership fee. They may also take the help of and visit Regional / Chapter offices for making the payment of annual membership fee and certificate of practice fee. The contact list of Regional / Chapter office is available at https://www.icsi.edu/media/webmodules/ContactList_Regional_Chapter_Offices.pdf

A member who is physically challenged can seek concession in annual membership fee @ 50%. Concession of 50% is also applicable additionally to members who are of the age seventy years or above. The member needs to submit a medical certificate to this effect for seeking this concession.

MODE & STEPS OF REMITTANCE OF FEE

The steps to make payment has been made easy and all should take note of the same. The fee can be remitted through ONLINE mode only using the payment gateway of the Institute’s website www.icsi.edu. Steps to follow:� Use Member tab on www.icsi.edu � From the drop down Select heading Annual Membership or COP Fee for FY 2021-22� At page you are NOT required to login� Enter your membership number e.g. A1234/F1234� Enter your DOB e.g. DD/MM/YYYY� Click on Search� Certificate of Practice Holders SHOULD Fill the Form D before paying Annual Membership fees.� Check the details and pay the feePayment made through any other mode is not acceptable.Please ensure the following before making online payment of annual membership fee which you will be required to comply with while making online payment of annual membership fee 1. Declaration of PAN & AADHAAR 2. Verification of your address as per Regulation 3 of the CS (Amendment) Regulations, 2020 by clicking on

the given check box 3. Declaration of eCSIN (if applicable) 4. Declaration of UDIN (if applicable) 5. Declaration of GSTIN number (optional to claim the input tax credit) For more detail kindly refer FAQs on home page of www.icsi.edu , if unclear raise query at http://support.icsi.edu

Team ICSI


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OBITUARIES

Chartered Secretary deeply regrets to record the sad demise of the following members:

CS Gopal Chalam (08.05.1955 – 11.03.2021), a Fellow Member of the Institute from Mumbai.

CS Virendra Chandrakant Bhatt (31.01.1958 – 24.11.2020), an Associate Member of the Institute from Bharuch.

CS Jitendra Tiwari (12.11.1952 – 21.04.2021), a Fellow Member of the Institute from Kolkata.

CS Pawan Bhootra (20.06.1970 – 19.04.2021), an Associate Member of the Institute from Ahmedabad.

CS Kamal Kumar Malhotra (22.05.1942 – 26.04.2021), a Fellow Member of the Institute from Delhi.

CS (Dr.) T V Ramachandran (09.04.1939 – 12.04.2021), a Fellow Member of the Institute from Pune.

CS Harishchandra Bajirao Upasani (17.05.1952 – 28.04.2021), a Fellow Member of the Institute from Thane Distt.

CS Bhavesh Ashokkumar Kinkhabwala (26.05.1978 – 10.05.2021), an Associate Member of the Institute from Ahmedabad.

CS Arun Kumar Singhal (07.07.1974 – 25.04.2021), an Associate Member of the Institute from Modinagar.

CS Yatish Bhardwaj (05.06.1984 – 01.05.2021), an Associate Member of the Institute from Gautambudh Nagar.

CS Jimisha Parth Dawda (05.05.1992 – 21.01.2021), an Associate Member of the Institute from Solapur.

CS Vahini Kashimsetty Narayanababu (27.01.1992 – 09.05.2021), an Associate Member of the Institute from Madhugiri.

CS Santosh Jindal (12.11.1961 – 30.04.2021), a Fellow Member of the Institute from New Delhi.

CS S Bhasker (15.06.1962 – 14.04.2021), a Fellow Member of the Institute from Chennai.

CS Ranjit Singh Taneja (08.04.1970 – 29.04.2021), a Fellow Member of the Institute from New Delhi.

CS Dinesh Ranjan Mishra (24.03.1970 – 02.05.2021), a Fellow Member of the Institute from Mangalore.

CS Arun Pratap Singh (01.02.1972 – 06.05.2021), a Fellow Member of the Institute from Noida.

CS Ulhas Balakrishna Shetty (15.06.1970 – 13.05.2021), a Fellow Member of the Institute from Mumbai.

CS Rahul Thakkar (28.02.1978 – 10.05.2021), an Associate Member of the Institute from New Delhi.

CS Harssh Golchaa (27.09.1986 – 27.04.2021), an Associate Member of the Institute from New Delhi.

CS Sanjeev (02.06.1987 – 03.05.2021), an Associate Member of the Institute from Delhi.

May the Almighty give sufficient fortitude to the bereaved family members to withstand the irreparable loss.

May the departed souls rest in peace.


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LIST OF PRACTICE UNITS PEER REVIEWED DURING MAY, 2021

Sl. No. Name of the PU City Year of

ReviewCertificate

No.

1 Mr. Janak A Pandya Mumbai 2019-20 1250/20212 M/s. Krupa Joisar &

AssociatesMumbai 2019-20 1251/2021

3 M/s. DSMR & Associates

Hyderabad 2019-20 1252/2021

4 M/s. U. P. Jain & Co.

Mumbai 2019-20 1253/2021

5 Mr. L. V. Shyam Sundar

Chennai 2019-20 1254/2021

6 M/s. IKR & Associates

Hyderabad 2018-19 1255/2021

7 M/s. BKJ & Associates

New Delhi 2020-21 1256/2021

8 M/s. MANK & Associates

Noida 2020-21 1257/2021

9 M/s. Madhu Lakhlan & Company

Hyderabad 2020-21 1258/2021

10 M/s. Anuj Bansal & Associates

Jalandhar 2020-21 1261/2021

11 M/s. L. D. Reddy & Co.

Hyderabad 2019-20 1262/2021

12 M/s. U. Hegde & Associates

Mumbai 2019-20 1263/2021

13 M/s. S. Hirawat & Associates

Jaipur 2019-20 1264/2021

14 M/s. Hitesh Buch & Associates

Ahmedabad 2019-20 1265/2021

15 M/s. M. Balaji Rajan & Associates

Chennai 2019-20 1266/2021

16 M/s. M. S. Buchasia & Associates

Ahmedabad 2019-20 1267/2021

17 M/s. Amit Samani & Co.

Mumbai 2020-21 1268/2021

18 M/s. Yash Mehta & Associates

Ahmedabad 2018-19 1269/2021

19 M/s. Ronak Jhuthawat & Co.

Udaipur 2019-20 1270/2021

20 M/s. Nagdev & Associates

Ulhasnagar 2019-20 1271/2021

21 M/s. Bhumika & Co. Mumbai 2019-20 1272/202122 M/s. Premal Shah &

CompanyAhmedabad 2020-21 1273/2021

23 Mr. Shalin Mukesh Patel

Vadodara 2020-21 1274/2021

24 Mr. Samsad Alam Khan

Ahmedabad 2019-20 1275/2021

Sl. No. Name of the PU City Year of

ReviewCertificate

No.

25 Ms. Nisha Agarwal Jaipur 2020-21 1276/202126 M/s. Preyansh Shah

& AssociatesVadodara 2019-20 1277/2021

27 M/s. V. Jhawar & Co.

New Delhi 2020-21 1278/2021

28 M/s. N. K. Rastogi & Associates

Delhi 2020-21 1280/2021

29 M/s. IBH & Co. Chennai 2019-20 1281/202130 M/s. SJV &

AssociatesAhmedabad 2020-21 1282/2021

31 M/s. Anant B. Khamankar & Co.

Mumbai 2020-21 1283/2021

32 M/s. K. Arun & Co. Kolkata 2019-20 1284/202133 M/s. Neville Daroga

& AssociatesMumbai 2019-20 1285/2021

34 M/s. Vikas Gaikwad & Associates

Pune 2020-21 1286/2021

35 M/s. Aabid & Co. Mumbai 2019-20 1287/202136 M/s. Pinkush

Jaiswal and Associates

Nagpur 2019-20 1288/2021

37 M/s. Santosh Singh & Associates

Mumbai 2019-20 1289/2021

38 M/s. Haresh Jani & Associates

Mumbai 2020-21 1290/2021

39 Ms. Sanjana Dattatray Hinge

Pune 2020-21 1291/2021

40 M/s. M K Ghatiya & Associates

Aurangabad 2020-21 1292/2021

41 M/s. Reena Bang & Associates

Mumbai 2020-21 1293/2021

42 M/s. M. K. Mandal & Associates

Gurugram 2019-20 1294/2021

43 M/s. M. A. Nakrani & Associates

Ahmedabad 2019-20 1295/2021

44 M/s. P. S. Dua & Associates

Ludhiana 2019-20 1296/2021

45 Ms. Sunita Mathur New Delhi 2020-21 1297/202146 Mr. Dipesh

Anupkumar MistrySurat 2019-20 1298/2021

47 M/s. Makarand Lele & Co.

Pune 2020-21 1299/2021

48 Mr. Parag Dasarwar Nagpur 2019-20 1300/202149 M/s. Sachapara &

AssociatesMumbai 2020-21 1301/2021

50 M/s. Somy Jacob and Associates

Bengaluru 2020-21 1302/2021


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Documents downloadable from the DigiLocker Platform

The National Digital Locker System, launched by Govt. of India, is a secure cloud based platform for storage, sharing and verification of documents and certificates. In the wake of digitization and in an attempt to issue documents to all the members in a standard format and make them electronically available on real-time basis, the Institute of Company Secretaries of India had connected itself with the DigiLocker platform of the Government of India. The initiative was launched on 5th October, 2019 in the presence of the Hon’ble President of India.

In addition to their identity cards and Associate certificates, members can also now access and download their Fellow certificates and Certificates of Practice from the Digilocker anytime, anywhere.

How to Access:

• Go to https://digilocker.gov.in and click on Sign Up• You may download the Digilocker mobile app from mobile store (Android/iOS)How to Login:

• Signing up for DigiLocker with your mobile number.• Your mobile number is authenticated by an OTP (one-time password).• Select a username & password. This will create your DigiLocker account.• After your DigiLocker account is successfully created, you can voluntarily provide your Aadhaar number (issued by

UIDAI) to avail additional services.

How to Access your Documents digitally:

On successful validation of credential go to “Pull Documents” in the Issued document section, select the partner name “The Institute of Company Secretaries of India” & document type “Identity Card” and enter the document details asked for to fetch the same.

We believe that this initiative shall go a long way in providing ease of access of all documents of our members and rendering them just a click away.


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Date: 25th May 2021

Sub: Last date for payment of annual membership fee and certificate of practice (CoP) fee in FY 2021-22 extended till 30th September, 2021

Dear Members,

Taking cognizance of the hardships being faced by the members due to the prevailing Covid-19 pandemic, the Institute with the approval of the Council had requested the Ministry of Corporate Affairs to consider extension in the last date for payment of annual membership fee and certificate of practice (CoP) fee in FY 2021-22 from 30th June, 2021 to 30th September, 2021.

We are happy to inform that the Ministry has been very kind to accord its approval to the request made by the Institute.

Accordingly, the last date for payment of annual membership fee and certificate of practice (CoP) fee in FY 2021-22 stands extended till 30th September, 2021.

Stay safe.

Regards,

(CS Nagendra D Rao) President, ICSI


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Date: 25th May 2021

Sub: Last date for payment of Licentiate fee in FY 2021-22 extended till 30th September, 2021

Dear Students,

Taking cognizance of the hardships being faced by the students due to the prevailing Covid-19 pandemic, the Institute with the approval of the Council had requested the Ministry of Corporate Affairs to consider extension in the last date for payment of Licentiate fee in FY 2021-22 from 30th June, 2021 to 30th September, 2021.

We are happy to inform that the Ministry has been very kind to accord its approval to the request made by the Institute.

Accordingly, the last date for payment of Licentiate fee in FY 2021-22 stands extended till 30th September, 2021.

Stay safe.

Regards,

(CS Nagendra D Rao) President, ICSI


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5MISCELLANEOUS

CORNER

nGST CORNERnETHICS IN PROFESSIONnCG CORNERnSTARTUP INDIA


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CIRCULARS

CIRCULAR NO. 148/04/2021-GST DATED 18TH MAY, 2021

Standard Operating Procedure (SOP) for implementation of the provision of extension of time limit to apply for revocation of cancellation of registration under section 30 of the CGST Act, 2017 and rule 23 of the CGST Rules, 2017 – reg.

As you are aware vide Finance Act, 2020, section 30 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST Act”) was amended and the same has been notified with effect from 01.01.2021 vide notification No. 92/2020- Central Tax, dated 22.12.2020. The amended provision provides for extension of time limit for applying for revocation of cancellation of registration on sufficient cause being shown and for reasons to be recorded in writing, by:

(a) the Additional or Joint Commissioner, as the case may be, for a period not exceeding thirty days;

(b) the Commissioner, for a further period not exceeding thirty days, beyond the period specified in clause (a) above

Consequently, changes have also been made in rule 23 and FORM GST REG-21 of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the “CGST Rules”) vide notification No.15/2021- Central Tax, dated 18.05.2021.

2. In order to ensure uniformity in the implementation of the provisions of above rule across the field formations, till the time an independent functionality for extension of time limit for applying in FORM GST REG-21 is developed on the GSTN portal, the Board, in exercise of its powers conferred by section 168 (1) of the CGST Act, hereby provides the following guidelines for implementation of the provision for extension of time limit for applying for revocation of cancellation of registration under the said section and rule.

3. As has been provided in section 30 of the CGST Act, any registered person whose registration is cancelled by the proper officer on his own motion, may apply to such officer in FORM GST REG-21, for revocation of cancellation of registration within 30 days from the date of service of the cancellation order. In case the registered person applies for revocation of cancellation beyond 30 days, but within 90 days from the date of service of the cancellation order, the following procedure is specified for handling such cases:

4.1. Where a person applies for revocation of cancellation of registration beyond a period of 30 days from the date of service of the order of cancellation of registration but within 60 days of such date, the said person may request, through letter or e-mail, for extension of time limit to apply for revocation of cancellation of registration to the proper officer by providing the grounds on which such extension is sought. The proper officer shall forward the request

to the jurisdictional Joint/Additional Commissioner for decision on the request for extension of time limit.

4.2 The Joint/Additional Commissioner, on examination of the request filed for extension of time limit for revocation of cancellation of registration and on sufficient cause being shown and for reasons to be recorded in writing, may extend the time limit to apply for revocation of cancellation of registration. In case the request is accepted, the extension of the time limit shall be communicated to the proper officer. However, in case the concerned Joint/Additional Commissioner, is not satisfied with the grounds on which such extension is sought, an opportunity of personal hearing may be granted to the person before taking decision in the matter. In case of rejection of the request for the extension of time limit, the grounds for such rejection may be communicated to the person concerned, through the proper officer.

4.3 On receipt of the decision of the Joint/Additional Commissioner on request for extension of time limit for applying for revocation of cancellation of registration, the proper officer shall process the application for revocation of cancellation of registration according to the law and procedure laid down in this regard.

5. Procedure similar to that explained in paragraph 4.1 to 4.3 above, shall be followed mutatis-mutandis in case a person applies for revocation of cancellation of registration beyond a period of 60 days from the date of service of the order of cancellation of registration but within 90 days of such date.

6. The circular shall cease to have effect once the independent functionality for extension of time limit for applying in FORM GST REG-21 is developed on the GSTN portal.

Source: https://www.cbic.gov.in/resources//htdocs-cbec/gst/Circular_Refund_148.pdf

NOTIFICATIONS

NOTIFICATION NO. 08/2021 – CENTRAL TAX DATED 1ST MAY, 2021

In exercise of the powers conferred by sub-section (1) of section 50 of the Central Goods and Services Tax Act, 2017 (12 of 2017) read with section 148 of the said Act, the Government, on the recommendations of the Council, hereby makes the following further amendments in notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 13/2017 – Central Tax, dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 661(E), dated the 28th June, 2017, namely:–

(i) In the said notification, in the first paragraph, in the first proviso, in the Table after S. No. 3, the following shall be inserted, namely: –


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(1) (2) (3) (4)“4. Taxpayers having an aggregate turnover of more than

rupees 5 crores in the preceding financial year9 percent for the first 15 days from the due date and 18 percent thereafter

March, 2021, April, 2021

5. Taxpayers having an aggregate turnover of upto rupees 5 crores in the preceding financial year who are liable to furnish the return as specified under sub-section(1) of section 39

Nil for the first 15 days from the due date, 9 percent for the next 15 days, and 18 percent thereafter


6. Taxpayers having an aggregate turnover of up to rupees 5 crores in the preceding financial year who are liable to furnish the return as specified under proviso to sub-section (1) of section 39

Nil for the first 15 days from the due date, 9 per cent for the next 15 days, and 18 per cent thereafter

March, 2021,

April, 2021

7. Taxpayers who are liable to furnish the return as specified under sub-section (2) of section 39


Quarter ending March, 2021.”.

2. This notification shall be deemed to have come into force with effect from the 18th day of April, 2021Source: https://www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-08-central-tax-english-2021.pdf


In exercise of the powers conferred by section 128 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Government, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 76/2018– Central Tax, dated the 31st December, 2018, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 1253(E), dated the 31st December, 2018, namely:–

In the said notification, after the seventh proviso, the following proviso shall be inserted, namely: –

“Provided also that the amount of late fee payable under section 47 shall stand waived for the period as specified in column (4) of the Table given below, for the tax period as specified in the corresponding entry in column (3) of the said Table, for the class of registered persons mentioned in the corresponding entry in column (2) of the said Table, who fail to furnish the returns in FORM GSTR-3B by the due date, namely:-

Table

S. No. (1)

Class of registered persons (2)

Tax period (3)

Period for which late fee waived

(4)1. Taxpayers having an aggregate turnover of more than

rupees 5 crores in the preceding financial yearMarch, 2021 and April, 2021 Fifteen days from the due

date of furnishing return2. Taxpayers having an aggregate turnover of upto rupees

5 crores in the preceding financial year who are liable to furnish the return as specified under sub-section(1) of section 39

March, 2021 and April, 2021 Thirty days from the due date of furnishing return


January-March, 2021 Thirty days from the due date of furnishing return.”.

2. This notification shall be deemed to have come into force with effect from 20th day of April, 2021.Source: https://www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-09-central-tax-english-2021.pdf


In exercise of the powers conferred by section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Government, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India in the Ministry of

Finance (Department of Revenue), No. 21/2019- Central Tax, dated the 23rd April, 2019, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 322(E), dated the 23rd April, 2019, namely:– In the said notification, in the third paragraph, after the first proviso, the following proviso shall be inserted, namely: – “Provided further that the said persons shall furnish the return in FORM GSTR-4 of the Central Goods and Services Tax


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R Rules, 2017, for the financial year ending 31st March, 2021, upto the 31st day of May, 2021.”.

2. This notification shall be deemed to have come into force with effect from the 30th day of April, 2021.Source: https://www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-10-central-tax-english-2021.pdf

NOTIFICATION NO. 11/2021 – CENTRAL TAX DATED 1ST MAY, 2021In exercise of the powers conferred by section 168 of the Central Goods and Services Tax Act, 2017 (12 of 2017) and sub-rule (3) of rule 45 of the Central Goods and Services Tax Rules, 2017, the Commissioner, with the approval of the Board, hereby extends the time period upto the 31st day of May, 2021, for furnishing the declaration in FORM GST ITC-04, in respect of goods dispatched to a job worker or received from a job worker, during the period from 1st January, 2021 to 31st March, 2021.

2. This notification shall be deemed to have come into force with effect from the 25th day of April, 2021Source: https://www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-11-central-tax-english-2021.pdf

NOTIFICATION NO. 12/2021 – CENTRAL TAX DATED 1ST MAY, 2021In exercise of the powers conferred by the second proviso to subsection (1) of section 37 read with section 168 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Commissioner, on the recommendations of the Council, hereby makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 83/2020 – Central Tax, dated the 10th November, 2020, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 699(E), dated the 10th November, 2020, namely:–

In the said notification, after the proviso, the following proviso shall be inserted, namely:-

“Provided further that the time limit for furnishing the details of outward supplies in FORM GSTR-1 of the said rules for the registered persons required to furnish return under sub-section (1) of section 39 of the said Act, for the tax period April, 2021, shall be extended till the twenty-sixth day of the month succeeding the said tax period.”. Source: https://www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-12-central-tax-english-2021.pdf

NOTIFICATION NO. 13/2021 – CENTRAL TAX DATED 1ST MAY, 2021In exercise of the powers conferred by section 164 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Government, on the recommendations of the Council, hereby makes the following rules further to amend the Central Goods and Services Tax Rules, 2017, namely:-

1. Short title and commencement. -(1) These rules may be called the Central Goods and Services Tax (Third Amendment) Rules, 2021.

(2) These rules shall come into force on the date of their publication in the Official Gazette. 2. In the Central Goods and Services Tax Rules, 2017,-(i) in sub-rule (4) of rule 36, after the first proviso, the following proviso shall be inserted, namely:- “Provided further that such condition shall apply cumulatively for the period April and May, 2021 and the return in FORM GSTR-3B for the tax period May, 2021 shall be furnished with the cumulative adjustment of input tax credit for the said months in accordance with the condition above.”;

(ii) in sub-rule (2) of rule 59, the following proviso shall be inserted, namely:-

“Provided that a registered person may furnish such details, for the month of April, 2021, using IFF from the 1st day of May, 2021 till the 28th day of May, 2021.”Source: https://www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-13-central-tax-english-2021.pdf


In exercise of the powers conferred by section 168A of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereafter in this notification referred to as the said Act), read with section 20 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), and section 21 of Union Territory Goods and Services Tax Act, 2017 (14 of 2017), in view of the spread of pandemic COVID-19 across many parts of India, the Government, on the recommendations of the Council, hereby notifies, as under,-

(i) where, any time limit for completion or compliance of any action, by any authority or by any person, has been specified in, or prescribed or notified under the said Act, which falls during the period from the 15th day of April, 2021 to the 30th day of May, 2021, and where completion or compliance of such action has not been made within such time, then, the time limit for completion or compliance of such action, shall be extended upto the 31st day of May, 2021, including for the purposes of—

(a) completion of any proceeding or passing of any order or issuance of any notice, intimation, notification, sanction or approval or such other action, by whatever name called, by any authority, commission or tribunal, by whatever name called, under the provisions of the Acts stated above; or

(b) filing of any appeal, reply or application or furnishing of any report, document, return, statement or such other record, by whatever name called, under the provisions of the Acts stated above;

but, such extension of time shall not be applicable for the compliances of the following provisions of the said Act, namely: -

a. Chapter IV;

b. sub-section (3) of section 10, sections 25, 27, 31, 37, 47, 50, 69, 90, 122, 129;


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Rc. section 39, except sub-section (3), (4) and (5); d. section 68, in so far as e-way bill is concerned; and e. rules made under the provisions specified at clause (a) to

(d) above : Provided that where, any time limit for completion of any action, by any authority or by any person, specified in, or prescribed or notified under rule 9 of the Central Goods and Services Tax Rules, 2017, falls during the period from the 1st day of May, 2021 to the 31st day of May, 2021, and where completion of such action has not been made within such time, then, the time limit for completion of such action, shall be extended upto the 15th day of June, 2021;

(ii) in cases where a notice has been issued for rejection of refund claim, in full or in part and where the time limit for issuance of order in terms of the provisions of subsection (5), read with sub-section (7) of section 54 of the said Act falls during the period from the 15th day of April, 2021 to the 30th day of May, 2021, in such cases the time limit for issuance of the said order shall be extended to fifteen days after the receipt of reply to the notice from the registered person or the 31st day of May, 2021, whichever is later.

2. This notification shall come into force with effect from the 15th day of April, 2021.Source: https://www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-14-central-tax-english-2021.pdf

NOTIFICATION NO. 15/2021 – CENTRAL TAX DATED 18TH MAY, 2021In exercise of the powers conferred by section 164 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the

Council, hereby makes the following rules further to amend the Central Goods and Service Tax Rules, 2017, namely: -

1. Short title and commencement. - (1) These rules may be called the Central Goods and Services Tax (Fourth Amendment) Rules, 2021.

(2) They shall come into force on the date of their publication in the Official Gazette.2. In the Central Goods and Services Tax Rules, 2017, -

Complete details are not published here for want of space. for complete notification readers may go on given below link.

https://www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-15-central-tax-english-2021.pdf

Source: https://www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-15-central-tax-english-2021.pdf

NOTIFICATION NO. 01/2021 – INTEGRATED TAX DATED 1ST MAY, 2021In exercise of the powers conferred by section 20 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), read with sub-section (1) of section 50 and section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Government, on the recommendations of the Council, hereby makes the following further amendment in notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 6/2017 – Integrated Tax, dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 698(E), dated the 28th June, 2017, namely:–


Table

(1) (2) (3) (4)

“4. Taxpayers having an aggregate turnover of more than rupees 5 crores in the preceding financial year

9 percent for the first 15 days from the due date and 18 percent thereafter




March, 2021,

April, 2021



March, 2021,

April, 2021




2. This notification shall be deemed to have come into force with effect from the 18th day of April, 2021Source: https://www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-1-2021-igst-english.pdf


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R NOTIFICATION NO. 01/2021 – UNION TERRITORY TAX DATED 1ST MAY, 2021In exercise of the powers conferred by section 21 of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017), read with sub-section (1) of section 50 and section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Government, on the recommendations of the Council, hereby makes the following further amendment in notification of the

Government of India in the Ministry of Finance (Department of Revenue), No. 10/2017 – Union Territory Tax, dated the 30th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 747(E), dated the 30th June, 2017, namely:–


Table(1) (2) (3) (4)“4. Taxpayers having an aggregate turnover of more than

rupees 5 crores in the preceding financial year9 percent for the first 15 days from the due date and 18 percent thereafter











2. This notification shall be deemed to have come into force with effect from the 18th day of April, 2021Source: https://www.cbic.gov.in/resources//htdocs-cbec/gst/Notification-01-2021-Union-Territory-Tax-English.pdf

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OTHER MISCONDUCT IN RELATION TO COMPANY SECRETARIES CONTAINED IN PART

IV OF FIRST SCHEDULE TO THE COMPANY SECRETARIES ACT, 1980

C hapter V of the Company Secretaries Act, 1980 deals with Misconduct. The term “professional and other misconduct” is defined under Section 22 of the Company

Secretaries Act, 1980. The two schedules - First Schedule and Second Schedule to the Company Secretaries Act, 1980 includes acts or omissions of professional and other misconduct by the members of the Institute.

Part IV of the First Schedule contains 2 clauses on acts or omissions of Other Misconduct which are applicable to Members of the Institute generally.

A member of the Institute, whether in practice or not, shall be deemed to be guilty of other misconduct under Part IV of the First Schedule, if: -

(1) he is held guilty by any civil or criminal court for an offence which is punishable with imprisonment for a term not exceeding six months;”

A member of the Institute, whether in practice or not, shall be deemed to be guilty of other misconduct, under Part IV of the First Schedule, if he is held guilty by any civil or criminal court for an offence which is punishable with imprisonment for a term not exceeding six months.

(2) in the opinion of the Council, he brings disrepute to the profession or the institute as a result of his action whether or not related to his professional work.”

If a member of the Institute in the opinion of the Council brings disrepute to the profession or the institute as a result of his act/ omission whether the same relates to his professional work or not or such act/ omission does not fall under any of the clauses of the First and Second Schedule of the Act, the member shall be deemed to be guilty of other misconduct. However, such cases are to be decided by the Council keeping in view the facts and circumstances of each case.

In the case of Lalit Agrawal Vs. ICAI (Writ Petition (C) No. 10020/2016, the Hon’ble High Court of Delhi has held that, “In view of the above, this Court is unable to accept the contention that the Board of Discipline does not have the jurisdiction to examine the alleged misconduct on the part of the petitioner. Clause (2) of Part-IV of the First Schedule to the Act is wide, and would include within its scope, any conduct that would tend to bring disrepute to the profession or the Institute. If a Chartered Accountant is found to have been guilty in outraging the modesty of a woman and/or other offences involving moral turpitude, it would not be inapposite for the Board of Discipline to also conclude that the conduct did, in fact, lower the dignity of the profession.”

In view of the aforesaid observations of the Hon’ble High Delhi, it is clear that disciplinary action can be initiated against a member of Institute for other misconduct in respect

of misconduct unrelated to the profession which brings disrepute to the profession or the Institute in terms of clause (2) of Part IV of First Schedule of Company Secretaries Act, 1980.

CASE STUDY 1

A complaint of professional or other misconduct was filed inter-alia alleging that the Respondent Company Secretary in Practice had certified Form 20B and 23 AC for year 2011 and 2012 for companies negligently. Ms. A was shown as Company Secretary on whole time basis for five companies in the year 2011 for a short period of about 7 to 10 days. Ms. B was shown as Company Secretary on whole time basis for these five Companies in the year 2012 for a short period of about 7 days. It was alleged that the appointment of Company Secretaries was made in circumvention of Section 383A of the Companies Act, 1956 and the Respondent in connivance with the companies, while certifying Form 20B and Form 23AC, glossed over this circumvention.

The Disciplinary Committee agreed that the Respondent has failed to exercise due diligence and his act has brought disrepute to the professional and the Institute and therefore the Respondent is guilty of professional and other misconduct under clause (7) of Part I of the Second Schedule and clause (2) of Part IV of the First Schedule to the Companies Secretaries Act 1980. The Disciplinary Committee decided to adjudicate the matter further.

The Respondent admitted before the Disciplinary Committee that he had adopted callous and casual approach in discharge of his professional responsibility and did not exercise required due diligence and pleaded guilty of the charges against him. After giving an opportunity of being heard to the Respondent, the Disciplinary Committee passed an Order of punishment imposing Fine of Rs. 30,000/- against the Respondent.

CASE STUDY 2

Information of professional or other misconduct was filed inter-alia alleging that the Respondent is serving as Whole-time Company Secretary in two companies simultaneously. The details were confirmed by the concerned companies as well as from MCA portal. The Council of the Institute opined under clause (2) of Part IV of the First Schedule to the Company Secretaries Act, 1980 that the act(s) of the Respondent has brought disrepute to the profession and the Institute. The Respondent pleaded himself guilty before the Board of Discipline. The Board of Discipline passed an Order against the Respondent imposing Fine of Rs. 30,000/- and Removal of name of the Respondent from the Register of Members of the Institute for a period of 3 months.


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ER Corporate governance - Irish listed companies

Companies listed on the principal Irish securities market, Euronext Dublin, are required to comply with

� the UK Corporate Governance Code (the Corporate Governance Code) and

� the Irish Corporate Governance Annex.

IRISH CORPORATE GOVERNANCE ANNEXThe Irish Corporate Governance Annex asks for meaningful, evidence-based descriptions in annual reports of how the Code is applied rather than ‘recycling’ descriptions that replicate the wording of the Code.

The Irish Annex identifies certain key recommendations for inclusion in an annual report which inter-alia include an explanation as to why the number of non-executive directors is regarded as sufficient;a description of the skills, expertise and experience of each director, including those appointed by the government; the process followed in selecting and appointing new directors; the methodology in the annual evaluations of the directors individually and collectively; the factors taken into account when determining a director’s independence; a description of the work carried out by the audit committee generally, and in relation to risk oversight more specifically; and a description of the remuneration policy, how performance elements are deferred and any clawback arrangements.

OTHER REGULATIONS GOVERNING IRISH LISTED COMPANIESOther regulations apply to public companies listed on Euronext Dublin, include

� The Euronext Dublin Listing Rules (Listing Rules). The Listing Rules set out conditions for listing and the continuing obligations that apply to companies listed on Euronext Dublin.).

� Prospectus Regulation ((EU) 2017/1129), the European Union (Prospectus) Regulations 2019 (SI 380 of 2019) (Irish Prospectus Regulations) (as amended) and the Central Bank (Investment Market Conduct) Rules 2019 (SI 336 of 2019) are the main sources of Irish prospectus law and govern the preparation and publication of prospectuses.

� Transparency (Directive 2004/109/EC) Regulations 2007 as amended (Transparency Regulations) and the Central Bank (Investment Market Conduct) Rules 2019 (SI 336 of 2019) (Transparency Rules). The Transparency Regulations and the Transparency Rules seek to enhance the transparency of information provided by issuers on a regulated market by containing certain disclosure requirements for public companies.

CSR REPORTING BY IRISH COMPANIES� Companies must disclose political donations that exceed

a certain threshold specified in the Electoral Act 1997, as amended, in their financial statements.

� Companies, other than small and micro companies, must also include information in their financial statements in relation to key performance indicators relevant to the particular business. This includes information relevant to environmental and employee matters to the extent necessary to understand the company’s development, performance or position.

� Directive 2014/95/EU on the disclosure of non-financial and diversity information by certain large undertakings and groups (Non-Financial Reporting Directive) was transposed into Irish law by the European Union (Disclosure of Non-financial and Diversity information by certain large undertakings and groups) Regulations 2017 (Non-Financial Reporting Regulations).

There are two distinct obligations introduced under the Non-Financial Reporting Regulations, namely:

� Non-financial reporting.� Diversity reporting.

Each obligation has different criteria and reporting is on a “comply or explain” basis.The non-financial statement, contained in the directors’ report, which accompanies the annual statutory financial statements, must address environmental matters, social and employee matters, respect for human rights, and bribery and corruption matters, to the extent necessary for an understanding of the development, performance, position and impact of its activity relating to these matters. Alternatively, the non-financial reporting statement can be published on the company’s website within six months of the company’s financial year end or annexed to the company’s annual return. If this option is chosen, the statement must also be attached to every balance sheet of the company that is presented to shareholders at the annual general meeting and must be signed by two directors of the company.https://thelahttps://www.pwc.ie/services/human-resource-services/insights/corporate-governance-11-requirements-for-an-irish-registered-company.htmlwreviews.co.uk/title/the-corporate-governance-review/irelandhttps://content.next.westlaw.com/9-502-2950?lrTS=20210329131426590&transitionType=Default&contextData=(sc.Default)&firstPage=true


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Startup India Seed Fund SchemeNEED FOR THE SCHEME

E asy availability of capital is essential for entrepreneurs at the early stages of growth of an enterprise. Many innovative business ideas fail to take off due to the

absence of this critical capital required at an early stage for proof of concept, prototype development, product trials, market-entry, and commercialization. Funding from angel investors and venture capital firms becomes available to startups only after the proof of concept has been provided. Similarly, banks provide loans only to asset-backed applicants. Seed Fund offered to such promising cases can have a multiplier effect in validation of business ideas of many startups, leading to employment generation.

ABOUT THE SCHEME

Department for Promotion of Industry and Internal Trade (DPIIT) has created Startup India Seed Fund Scheme (SISFS) with an outlay of INR 945 Crore to provide financial assistance to startups for Proof of Concept, prototype development, product trials, market entry and commercialization. This would enable these startups to graduate to a level where they will be able to raise investments from angel investors or venture capitalists or seek loans from commercial banks or financial institutions. The scheme will support an estimated 3,600 entrepreneurs through 300 incubators in the next 4 years. The Hon’ble Prime Minister announced the scheme on 16th January 2021 in his Grand Plenary address of Prarambh: Startup India International Summit.

GRANT TO INCUBATORS

A Grant of up to Rs. 5 (five) crore would be provided to a selected incubator in milestone-based three (or) more installments. A component of Management Fee @ 5% of Seed Fund grant to the incubator will be provisioned.

The incubators shall be responsible for providing physical infrastructure to the selected startups for regular functioning, support for testing and validating ideas, mentoring for prototype or product development or commercialization, and developing capacities in finance, human resources, legal compliances and other functions.

DISBURSEMENT

The Seed Fund will be disbursed to eligible startups through eligible incubators across India.

Seed Fund to an eligible startup by the incubator shall be disbursed as follows:

� Up to Rs. 20 Lakhs as grant for validation of Proof of Concept, or prototype development, or product trials. The grant shall be disbursed in milestone-based installments.

These milestones can be related to development of prototype, product testing, building a product ready for market launch, etc.

� Up to Rs. 50 Lakhs of investment for market entry, commercialization, or scaling up through convertible debentures or debt or debt-linked instruments.

� Not more than 20% of the total grant to an incubator shall be given as grants to start-ups by incubator.

ACTIONS INITIATED FOR IMPLEMENTATION:

� The ‘Call for Application’ for Incubators was launched on 19th April 2021 by Hon’ble Minister of Railways, Commerce & Industry, Consumer Affairs, Food & Public Distribution, Shri Piyush Goyal. The ‘Call for Application’ for Startups will be tentatively lunched by 1st July 2021. For more details, visit www.startupindia.gov.in.

� Outreach and awareness for SISFS is underway since the announcement of the Scheme and workshops with incubators (beneficiaries) from across the country is being conducted starting from the month of March 2021. As on May 24th, 2021, 10 workshops have been concluded with over 670 incubators from 36 states and UTs and 2 ministries. A dedicated team “Seed Fund Secretariat” has been formed to handhold the incubators in navigating the application process, address their queries, to screen their applications, etc.

� The Experts Advisory Committee (EAC) has been constituted on 16th March 2021. EAC is responsible for selection of incubators and monitoring of funds and is mandated to meet every quarter. This will ensure timely evaluation of applications and continuous monitoring of the funds under the Scheme.


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VOL 50 | NO. : 11 | Pg. 1-196 | November 2020 | `100/- (Single Copy)ISSN 0972-1983


COMPANIES (AMENDMENT) ACT, 2020 & RECENT LABOUR REFORMS

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BUDGET 2021 SHRI AMIT SHAH, HON’BLE UNION MINISTER OF HOME AFFAIRS, GOVT. OF INDIA

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Environmental Legislation - ICSI

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