Important Central Legislations Notified In 2018: A Snapshot
With the onset of the new year, here is a round-up of the laws that were notified in 2018:
With the onset of the new year, here is a round-up of the laws that were notified in 2018:
The Prevention Of Corruption (Amendment) Act, 2018 (Act No. 16 of 2018)
The Act amends the Prevention of Corruption Act, 1988. Here are some of the changes brought by the Act:
- • It makes bribery a direct offence, but a person who is compelled to give a bribe will not be charged with the offence if he reports the matter to law enforcement authorities within seven days. Further, a public servant will not be charged with taking a bribe if he proves that he did not 'perform his public functions dishonestly'. However, the term is not defined and hence, the circumstances under which a public servant's actions would qualify as 'honest' is unclear.
- • It redefines the provisions related to criminal misconduct to only cover two types of offences: (i) fraudulent misappropriation of property; and (ii) illicit enrichment (such as amassing of assets disproportionate to one's known sources of income). This is in contrast to the previous provision, which included six types of offences including: (i) abuse of position; (ii) use of illegal means; (iii) disregard to public interest.
- • It stipulates that prior sanction needs to be obtained from the relevant government or competent authority, before a police officer conducts any investigation into an offence alleged to have been committed by a public servant.
This provision has been challenged before the Supreme Court by the Centre for Public Interest Litigation (CPIL), which has alleged that it dilutes the law. The petition alleges that the amendment is the third attempt by the Centre to introduce a provision which has already been held to be unconstitutional by the Apex Court twice.
The petition also challenges removal of Section 13 (1) (d) (ii) (criminal misconduct) from the Prevention of Corruption Act, which made it an offence for a public servant to abuse his position and thereby give some pecuniary or other advantage to anyone else.
Therefore, earlier, the abuse of position by a public servant resulting in obtaining anything valuable or pecuniary advantage for any person (including himself) was adequate to prove the offence of criminal misconduct. There was no need to prove bribery or quid pro-quo.
An Overview On The Prevention Of Corruption (Amendment) Act 16 of 2018 [Part-II] by Justice V. Ramkumar
When Repeal Comes In Disguise Of An Amendment by Amit Vashist
The Criminal Law (Amendment) Act, 2018 (Act No. 22 of 2018)
The Act replaces the Ordinance promulgated by the Central Government in April 2018, in wake of the public outcry over Kathua incident of rape and murder of a minor girl.
It makes the rape of a girl below the age of twelve years an offence punishable with death. To this end, it amends provisions of Indian Penal Code(IPC), Code of Criminal Procedure, Evidence Act and Protection of Children from Sexual Offences Act (POCSO).
The Act enhances the punishment of rape of a woman to a minimum of ten years imprisonment from seven years imprisonment. Further, rape of a woman aged 16 years is treated as an offence separate from the rape of a woman aged 12 years. The former attracts a minimum punishment of 20 years imprisonment, and the latter is punishable with death penalty.
The amendments to CrPC mandate completion of investigation within a period of two months, and bar grant of anticipatory bail to persons accused of raping minors.
You may read: Death For Child Rape: Parliament Passes Criminal Law Amendment Bill by Apoorva Mandhani
The Fugitive Economic Offenders Act, 2018 (Act No. 17 of 2018)
The Bill was introduced in the budget session during March, in wake of the Nirav Modi-Mehul Choksi scam.
It allows a person to be declared as a fugitive economic offender (FEO) if: (i) an arrest warrant has been issued against him for any specified offences where the value involved is over Rs 100 crore, and (ii) he has left the country and refuses to return to face prosecution.
In order to declare a person an FEO, an application is required to be filed in a Special Court (designated under the Prevention of Money-Laundering Act, 2002) containing details of the properties to be confiscated, and any information about the person's whereabouts. The Special Court will require the person to appear at a specified place at least six weeks from issue of notice. Proceedings will be terminated if the person appears.
The Act also allows authorities to provisionally attach properties of an accused, while the application is pending before the Special Court. Upon such confiscation, the FEO or any company associated with him may be barred from filing or defending civil claims. This has been claimed as problematic, as barring these persons from filing or defending civil claims may violate Article 21 of the Constitution of India.
The Act also does not require the authorities to obtain a search warrant or ensure the presence of witnesses before a search. This removes the safeguards listed under other laws such as the Code of Criminal Procedure.
The Specific Relief (Amendment) Act, 2018 (No. 18 of 2018)
The Act brings in significant amendments to the Specific Relief Act, 1963. One of the major features of the amendment is that it takes away the discretionary power of courts in ordering specific performance of contract, by stating that specific performance of contract should be compulsorily enforced by the Court.
As per Section 10 of the Act (as it stood before amendment) specific performance of contract 'may' be enforced by the Court in its discretion. As a result of wide discretionary powers, the courts often award damages for breach of contract as a general rule and grant specific performance as an exception.
The amendment wholly substitutes Section 10 by stating that specific performance of a contract shall be enforced by the court. Similar discretionary power of Courts as per Section 11 in granting specific performance in relation to trusts is also taken away by the amendment, by making it compulsory even for trusts.
The effect of the amendment will be that the plaintiff can seek specific performance of contract as a matter of course, without having to prove special circumstances. The amendment also introduces the concept of "substituted performance", enabling a party to get the contract performed by a third party at the cost of defaulting party.
You may read: Parliament Passes Specific Relief Amendment Bill Making Specific Performance of Contract Compulsorily Enforceable by Manu Sebastian
The Companies (Amendment) Act, 2017 (No. 1 of 2018)
This Act introduced the second round of amendments to the Companies Act, 2013, with the first one being made in 2015. It broadly seeks to strengthen corporate governance standards, initiate strict action against defaulting companies and help improve ease of doing business in the country. Here are a few of the major changes introduced by the amendment:
- • The amendments align the Act with various rules and regulations of the SEBI and the RBI. For instance, Sections 194 and 195 of the Act, which dealt with insider trading and forward dealing, have now been omitted since the SEBI regulations are wide enough to cover all instances of such frauds.
- • One of the amendments clarifies Section 149 (6) of the Act, which stipulates that one of the various disqualifications for becoming an independent director is that such person has "pecuniary relationship" with "the company, its holding, subsidiary or associate company, or their promoters, or directors".
- The amendment states that this pecuniary relationship excludes the remuneration to such director or having transaction not exceeding 10% of his total income or such amount as may be prescribed.
- • The amendments introduce the concept of levying quantum of penalty, taking into consideration the size of company, nature of business, injury to public interest, nature and gravity of default, repetition of default, etc.
- • It also simplifies the private placement process, by doing away with separate offer letter details to be kept by company and reducing number of filings to Registrar. It also restricts the company from utilising the money raised through private placement unless allotment has been made and return of allotment has been filed with the Registrar.
The Negotiable Instruments (Amendment) Act, 2018 (No. 20 of 2018)
The amendment introduces Section 143A in the principal Act for interim compensation up to 20% of the cheque amount to the complainant during the trial proceedings.
It also introduces Section 148 in the Act, empowering the appellate court to direct deposit of a minimum of 20% of the cheque amount in appeal by the drawer against conviction, within a period of sixty days. This amount can be released to the complainant and has to be returned to the accused if the appeal is allowed.
The Act lowers the pecuniary jurisdiction of Commercial Courts from Rs. 1 Crore to Rs. 3 lakhs. It also includes a special chapter, Chapter IIIA, to lay down procedure for pre-institution mediation and settlement of commercial disputes. All disputes, which do not contemplate urgent interim relief, have to compulsorily undergo this mediation process. Hence, a suit cannot be instituted without exhaustion of mediation process.
The Act clarifies that the changes will apply only to cases filed on or after the commencement of the amendment Act.
The Act increases the salary of the Chief Justice of India from the current Rs. 1 lakh to Rs. 2.80 lakhs per month. It further increases the salary of Supreme Court judges and high court chief justices from the current Rs. 90,000 to Rs. 2.50 lakh per month. High court judges, who currently get Rs. 80,000 per month, will now draw a monthly salary of Rs. 2.25 lakhs per month.
The hike will apply from the month of January, 2016, which makes it beneficial to judges retired recently, as well. The amendment, which is in line with the 7th Pay Commission for officers of all-India services, received President's assent on 25th January, 2018.
The Payment of Gratuity (Amendment) Act, 2018 (No. 12 of 2018)
The amendment increases the ceiling of the amount of gratuity payable to employees from Rs.10 lakhs to Rs.20 lakhs. Under the Act, gratuity is payable on termination of employment upon an employee completing at least five years of continuous service.
The State Banks (Repeal And Amendment) Act, 2018 (No. 19 of 2018)
The Act seeks to repeal two Act: (i) State Bank of India (Subsidiary Banks) Act, 1959, and (ii) State Bank of Hyderabad Act, 1956. These Acts established the State Bank of Bikaner, State Bank of Mysore, State Bank of Patiala, State Bank of Travancore, and State Bank of Hyderabad. These banks were subsidiaries of the State Bank of India (SBI).
It also amends the State Bank of India Act, 1955 to remove references related to subsidiary banks.
The Act was passed consequent to the Union Cabinet granting its approval in February 2017, which allowed the SBI to acquire these subsidiaries.
The Act provides for re-issuance of acquisition notice to the property owner (or a person interested in the property) by the Central government when acquiring a requisitioned property, in order to give them adequate opportunity of being heard. This would be irrespective of any past court orders or judgments setting aside any past notices for acquisition. However, the re-issuance of notice will not apply to cases where the compensation has already been awarded and accepted by the claimants.
The amendment further stipulates that in case where a notice has been re-issued, the property owner (or a person interested in the property) will be entitled to an interest on the compensation payable to them. The interest will be calculated for the period from when the first notice was issued till the date of the final payment of compensation. This interest will be the same as the annual rate of interest, prevalent at any relevant time, on the domestic fixed deposit offered by the State Bank of India.
Such enhanced compensation will be awarded only if: (i) the acquisition notice has been re-issued, and (ii) the land is being acquired for the purpose of national security and defence.
GST amendment Acts
Four Acts relating to Goods and Service Tax were passed: The Central Goods And Services Tax (Amendment) Act, 2018, The Integrated Goods and Services Tax (Amendment) Act, 2018, The Union Territory Goods and Services Tax Act, (Amendment), 2018 and The Goods and Services Tax (Compensation to States) Amendment Act, 2018.
The amendments seek to simplify the procedure for filing returns, and raise the turnover threshold for composition scheme to Rs 1.5 crores. According to Union Minister Piyush Goel, the amendments will help MSME sector and small scale traders.
The Insolvency and Bankruptcy Code (Amendment) Act, 2017 (No. 8 of 2018)
The Act replaces the Ordinance promulgated in November, 2017. Here are some of the changes introduced:
- • It amends the definition of a resolution applicant as a person who submits a resolution plan after receiving an invite by the insolvency professional to do so.
- • It specifies that an insolvency professional will only invite those resolution applicants to submit a plan, who fulfil certain criteria laid down by him (with the approval of the committee of creditors), and other conditions which may be specified by the Insolvency and Bankruptcy Board.
- • It inserts ten classes of persons who have been declared as ineligible from submitting a resolution plan.
- • It prohibits the committee of creditors from approving a resolution plan submitted before the promulgation of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017, where the plan has been submitted by a person ineligible to be a resolution applicant.
- • It prohibits the insolvency professional from selling the movable or immovable property of the debtor in case of liquidation to any person who is ineligible to be a resolution applicant.
- • It also inserts a provision to specify that a person contravening any provisions of the Code, for which no penalty has been specified, will be punishable with a fine ranging between one lakh rupees to two crore rupees.
The Insolvency And Bankruptcy Code (Second Amendment) Act, 2018 (No. 26 of 2018)
One of the most significant changes brought in by this amendment is that it recognizes home buyers, who have invested money in real estate projects for allotment of residential flats, as financial creditors.
The amendment also proposes to introduce special process for micro, small and medium enterprises, by introducing Section 240A. The new provision empowers Central government to issue a notification specifying special process for such enterprises.
It further states that a corporate rescue plan should get the approval of Competition Commission of India, if the plan contains a proposal for combination (as per sub-section(4) inserted in Section 31).
Additionally, the minimum percentage of votes in the committee of creditors for approval of resolution has been lowered from 75% to 66% as per amendment proposed to Section 12. Plus, the newly proposed Section 238A makes Limitation Act 1963 applicable to proceedings before the Adjudicating Authority, NCLAT, DRT and DRAT.
You may read: Insolvency Code Amendment Passed By Lok Sabha Treats Home Buyers As Financial Creditors by Manu Sebastian
The amendment inserts new section 18A, which does away with the court-imposed requirements of undertaking preliminary inquiry and of procuring approval prior to making an arrest. It also restores the unconditional ban on the grant of anticipatory bail in the event of arrest for an offence under the Act.
The amendment, in fact, expressly overrides any "judgment or order or direction of any court" in as much as it contains a non-obstante clause to that effect. This was an attempt at diluting the controversial verdict of the Supreme Court in Dr. Subhash Kashinath Mahajan v. State of Maharashtra & Anr.
It further asserts that in cases under the Atrocities Act, no procedure other than that specified under the Act and the Cr. P. C. shall apply.
The Amendment gives "constitutional status" to National Commission for Backward Classes at par with the National Commission for Scheduled Castes and the National Commission for Scheduled Tribes, in order to safeguard the interests of the socially and educationally backward classes more effectively.
This commission is supposed to have a chairperson, vice- chairperson and 3 other members, and is expected to hear the grievances of socially and educationally backward classes, a function discharged so far by the Scheduled Castes commission.
Giving constitutional status to the OBC Commission empowers it to hear grievances and their redressal—powers that had been lacking up until now.
The Act amends the National Bank for Agriculture and Rural Development Act, 1981 to allow the Central government to increase the capital of NABARD to Rs. 30,000 crore. This may be increased to an even higher amount by the Central government in consultation with the RBI, if necessary.
The Act also transfers RBI's share capital in NABARD to the Central government. The original Act had prescribed that the Centre and the RBI together must hold at least 51% of the share capital of NABARD.
It further extends the provision of credit and other facilities by NABARD to enterprises with investment upto Rs. 10 crore in the manufacturing sector and Rs. 5 crore in the services sector. Earlier this provision was limited to industries having an investment of upto Rs 20 lakh in machinery and plant.
The Homoeopathy Central Council (Amendment) Act, 2018 (No. 23 of 2018)
The Act asserts that homeopathy medical colleges set up or opened new courses before the amendment have to take recognition from the central government within a year. If they fail to do so, the medical qualifications granted to students will lose recognition under law.
The National Sports University Act, 2018 (No. 25 of 2018)
The Act establishes a National Sports University, which will be headquartered in Manipur. The University will undertake research on physical education, strengthen sports training programmes, and collaborate internationally in the field of physical education.
The Indian Institute Of Petroleum and Energy Act, 2017 (No. 3 of 2018)
The Act establishes the Indian Institute of Petroleum and Energy, Vishakhapatnam, Andhra Pradesh, and declares it an institution of national importance. The Institute aims to provide high quality education and research focussing on the themes of petroleum, hydrocarbons and energy.
The Indian Forest (Amendment) Act, 2017 (No. 5 of 2018)
The Act consolidates laws relating to forests, transit of forest-produce and the duty to be levied on them. It also amends the definition of "tree", to exclude the word "bamboos". Consequently, felling or transportation of bamboos growing in non-forest areas will not require any permits.