India updates

Employment & Benefits

Contributed by Shardul Amarchand Mangaldas & Co
Haryana government makes compliance with Standing Orders Act mandatory for other registrations
  • India
  • 21 August 2019

The Haryana state government recently issued a notification under the Standing Orders Act and introduced a new requirement for principal employers and contractors to file an undertaking of compliance with the act. While the 2019 notification aims to ensure the effective enforcement of the act, employers may perceive the move to require compliance a condition precedent to obtaining registration under other labour laws as a roadblock.

Keeping up with the times: EPF goes digital
  • India
  • 10 July 2019

The employees' provident fund is a social security fund comprising contributions from employers and employees, which are paid to employees on their retirement. The entire process is administered by the Employees' Provident Fund Organisation (EPFO), which is a statutory body established by the Ministry of Labour and Employment. To keep up with digitisation, the EPFO recently updated the process under which subscribers can withdraw and transfer provident funds.

Casting a wider net – ESI rates amended
  • India
  • 03 July 2019

The Employees' State Insurance (ESI) (Central) Rules 1950 were recently amended to reduce the required rates of contribution to the statutory fund maintained by the ESI Corporation for the provision of sickness and health benefits. The aim of this change is to cast a wider net by expanding social security coverage to a larger part of the population. However, news reports indicate that – as is often the case – the change has come under criticism.

To compete or not to compete – that is the question
  • India
  • 19 June 2019

Non-compete restrictions are the tool most commonly used by employers to protect their proprietary interests following the end of an employment relationship, particularly in the case of C-suite employees. However, non-compete restrictions which apply beyond the term of an employment relationship are generally unenforceable in India. That said, this does not mean that employers have no recourse whatsoever.

Supreme Court rules on whether special allowances constitute basic wages for purposes of PF contributions
  • India
  • 24 April 2019

The Supreme Court recently examined whether certain components of an employee's overall salary are subject to provident fund (PF) contributions. As the Supreme Court has clarified that special allowances paid to employees must be included in the calculation of PF contributions, employers should review and analyse their current salary structures to determine any increase in PF liabilities.


Energy & Natural Resources

Union Budget 2019: e-vehicle manufacturing incentives
BDO LLP
  • India
  • 05 August 2019

On the back of its new electoral mandate, the Modi Sarkar 2.0 government recently presented its first budget, which proposes a number of amendments regarding electric vehicle (e-vehicle) manufacturing. Among other things, the government has proposed reducing the goods and services tax on e-vehicles, providing an additional income tax deduction on interest paid on loans taken to purchase e-vehicles and waiving customs duty on e-vehicle parts.


Insolvency & Restructuring

Status of 'other' creditors under Insolvency and Bankruptcy Code 2016
  • India
  • 08 September 2017

The Reserve Bank of India recently directed several banks to start insolvency resolution proceedings against a list of identified companies, including Jaypee Infratech Limited, a leading real estate development company. The case has highlighted the need for the Insolvency and Bankruptcy Code 2016 to recognise a wider class of creditors that can initiate an insolvency proceeding and participate meaningfully in such process. It has also emphasised the important role that financial creditors play.


Insurance

Contributed by Tuli & Co
Sorout Mushroom Farm v National Insurance Co: sanctity of insured's appointment of surveyor
  • India
  • 23 July 2019

In a recent case, the National Consumer Disputes Redressal Commission (NCDRC) provided some useful guidance in relation to a claim assessment by an Insurance Regulatory and Development Authority licensed surveyor. The NCDRC dismissed the insured's contentions, stating that, among other things, the insured had failed to provide the relevant documentation to the surveyor. Thus, the insured had been unable to take advantage of his own wrongdoing.

Account aggregators: financial information sharing framework
  • India
  • 16 July 2019

The account aggregator ecosystem was introduced to solve the problems of data portability in the insurance sector, among others. However, the question of whether the business model is viable will largely hinge on the successful implementation of the consent architecture envisaged under the Master Directions Non-Banking Financial Company – Account Aggregator (Reserve Bank) Directions and the terms of the contractual arrangements which are entered into with the various regulated entities.

Draft guidelines address conflict of interest situations
  • India
  • 18 June 2019

The Insurance Regulatory and Development Authority recently issued the Exposure Draft on Insurance Regulatory and Development Authority of India (Conflict of Interest) Guidelines 2019, which seek to provide guidance on the conflicts of interest that arise between insurers and other insurance companies or intermediaries which have the same directors.

Supreme Court's recent take on non-disclosure and misrepresentation
  • India
  • 21 May 2019

The Supreme Court recently ruled in a case between Reliance Life Insurance and the wife of an insured party who had died of a heart attack. Reliance had repudiated the respondent's claim due to the suppression of material facts by the insured, who had failed to provide details of a second policy with another insurer. In its decision, the Supreme Court considered the nature of the disclosure made by the insured and the validity of the ground for repudiation of the claim.

Regulatory sandbox proposed for insurance sector
  • India
  • 14 May 2019

The Insurance Regulatory and Development Authority recently issued the Report of the Committee on the Regulatory Sandbox in the Insurance Sector in India, which proposes to establish a sandbox environment in the insurance sector. According to the report, the sandbox will facilitate innovation in the Indian insurance sector and provide an ecosystem to foster the experimentation required to increase insurance penetration in the market and benefit policyholders. However, reservations remain.


Intellectual Property

Contributed by Saikrishna & Associates
Newly recognised tool for effective and expedient resolution of technical matters
  • India
  • 05 August 2019

The Delhi High Court recently recognised, for the first time, the merit of applying Section 20 of the Evidence Act 1872 in technical IP matters. This decision may have far-reaching consequences in the IP world, as it could eliminate the controversy surrounding infringement suits which involve complex technical questions and help the courts to reach a finding by relying on the opinion of an expert agreed on by both parties.

Moral rights: can authors waive their special rights?
  • India
  • 18 March 2019

The Copyright Act specifically addresses authors' special rights, which comprise the right to claim authorship of a work and the right to prevent any distortion, modification or mutilation of a work which would be prejudicial to the author's reputation. While jurisprudence on moral rights is still relatively limited, a few foundational cases are emblematic of India's approach and the associated legal issues.

Is extraterritorial application of Copyright Act possible?
  • India
  • 23 May 2016

In Banyan Tree Holding v A Murali Krishna Reddy the Delhi High Court clarified the importance and scope of the special jurisdiction provision (ie, Section 62 of the Copyright Act 1957). However, there seems to be a school of thought that Section 62 vests Indian courts with untrammelled long-arm jurisdiction even in strictly extraterritorial situations.

Special jurisdiction provisions: how special are they?
  • India
  • 23 November 2015

The Supreme Court recently issued its much-anticipated decision in IPRS v Sanjay Dalia. The case considered the interpretation of the special jurisdiction provisions in Section 62 of the Copyright Act and Section 134 of the Trademarks Act. The court held that if a cause of action arises at the place where the plaintiff's principal office is located, it cannot rely on Section 62 or Section 134 to institute a suit where its branch office is located.

Trademark infringement remedies available under Companies Act 2013
  • India
  • 13 July 2015

A streamlined framework for rectification of a company name is now available under the Companies Act 2013. Under the new act, the registered proprietor of a trademark can apply for rectification of a company name that is identical to or too closely resembles the registered trademark. In addition, the owner of an unregistered trademark which is used as a company name may use Section 16(1)(a) of the act as an alternative remedy to a passing-off suit.