I. INDIA CONTINUES TO REMAIN A DESIRED DESTINATION FOR FDI AND FII: FINANCE MINISTER P. CHIDAMBARAM
"Increased Domestic Production of Oil, Coal & Restraining Gold Consumption can Contain CAD; India Continues to Remain a Desired Destination for FDI and FII - P. Chidambaram"
The Union Finance Minister, Mr. P. Chidambaram, while addressing the agenda of the meeting, 'The Current Account Deficit- Implications and Measures to Contain the Deficit' of the Parliamentary Consultative Committee of the Ministry of Finance said the present two major concerns are the extent of Current Account Deficit (CAD) and it's financing. Therefore the only way to contain CAD than to draw from the reserves is by increasing the country's domestic production of oil & coal and limiting the consumption of gold since we are heavily dependant on import of items like oil, coal and gold, for which we must introduce appropriate policies for long term measures.
For overcoming the situation, the Union Finance Minister stated that the government is keeping a track at the FDI caps to see whether the same is serving any purpose and will be re-examined if not. He further informed that despite the difficulties faced by the country, the Government was able to finance the CAD and also added that an amount of around US $ 3 billion has been deposited in the forex reserves in the year 2012-13. He was confident that the CAD will be again financed this year without taking anything from the reserves of the country and that efforts have been made to increase the productive activities in the country by reviving stalled projects. For this purpose the Ministry has compiled a list of about 215 stalled projects, where the banks have already funded more than Rs. 7 lakh crores.
The Minister observed that as the world economies are in recession including all European economies except Germany and where USA is showing some positive signs of revival, however, as far as India is concerned, Mr. P. Chidambaram said it continues to remain a desired destination for FDI and FII.
II. ENFORCEMENT OF MADRID PROTOCOL IN INDIA
India has adopted the Madrid Protocol which enables an applicant to file application for the registration of a trademark in more than one designated countries of his choice. With a notification issued by the Trademarks Registry of India on 8th July, 2013, the long awaited provisions related to Madrid Protocol have come into force in India. Consequently, the provisions of Trademarks (Amendment) Act, 2010 and Trade Mark (Amendment) Rules, 2013 are implemented from 8th July, 2013 which enable and facilitate the international registration of trademarks under the Madrid protocol. The major benefit of this enactment is that from now onwards, any person or legal entity who has an effective and bona fide trade establishment in India and has got a trademark registered in India or has applied for a trademark in India, can apply for an international registration of his trademark. The applicant can also mention the designated countries in the international registration Form MM2 in which he wants to protect his trademark.
III. AMENDMENT OF COMPANIES (DIRECTORS INDENTIFICATION NUMBER) RULES, 2006
Notification No. G.S.R. 173(E) dated March 15, 2013. The Central Government, in exercise of the powers conferred by clauses (a) and (b) of sub-section (1) of section 642 read with section 266A, 266B, 266D and 266E of the Companies Act, 1956 (1 of 1956) has notified the Companies Director Identification Number (Amendment) Rules, 2013, thereby amending the Companies Director Identification Number Rules, 2006.
In the Companies (Directors Identification Number) Rules, 2006, after rule 7, the following rule is inserted, namely: -
Rule 8: Cancellation or Deactivation of DIN
The Central Government or Regional Director (Northern Region), Noida or any officer authorized by the Regional Director, upon being satisfied on verification of particulars of proof attached with the application received from any person seeking cancellation or deactivation of DIN, in case -(a) the DIN is found to be duplicate (b) the DIN was obtained by wrongful manner or fraudulent means; (c) of the death of the concerned individual;(d) the concerned individual has been declared as lunatic by the competent Court; (e) if the concerned individual has been adjudicated an insolvent;
In the above situations, the allotted DIN shall be cancelled or deactivated by the Central Government or Regional Director (NR), Noida or any other officer authorised by the Regional Director (NR): Provided that before cancellation or deactivation of DIN under clause (b), an opportunity of being heard shall be given to the concerned individual.
IV. RBI'S CIRCULAR CLARIFYING THE EARLIER CIRCULAR DIRECTING NBFCs NOT TO BE PARTNERS IN PARTNERSHIP FIRMS
Notification No.DNBS(PD).255/CGM (CRS) 2013 dated June 11 , 2013
The Reserve Bank of India, having considered it necessary in public interest and being satisfied that, for the purpose of enabling the Bank to regulate the credit system to the advantage of the country, it is essential to amend the Non-Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 (hereinafter referred to as the said Directions), contained in Notification No. DNBS.192/DG(VL)-2007 dated February 22, 2007, in exercise of the powers conferred by Section 45JA and Section 45L of the Reserve Bank of India Act, 1934 (2 of 1934) and of all the powers enabling it in this behalf, and hereby directs that the said Directions shall be amended with immediate effect.
In para 19A, of the said Directions under the title, "NBFCs not to be partners in partnership firms", after sub-para(2) the following sub-para shall be inserted, namely:-"(3) In this connection it is further clarified that;
a. Partnership firms mentioned above will also include Limited Liability Partnerships (LLPs).
b. Further, the aforesaid prohibition will also be applicable with respect to Association of persons; these being similar in nature to partnership firms."
NBFCs which had already contributed to the capital of a LLP/Association of persons or were a partner of a LLP/Association of persons are advised to seek early retirement from the LLP/Association of persons. This direction of the RBI has come in the backdrop of RBI having coming across some NBFCs which have large investments in / contributed capital in partnership firms.
V. RBI ON EXTERNAL COMMERCIAL BORROWINGS (ECB)
ECB Policy for 3G spectrum allocation
The Reserve Bank of India (RBI) vide RBI/2012-13/543 A.P. (DIR Series) Circular No. 114 dated June 25, 2013 has decided that External Commercial Borrowings (ECB) window for financing 3G spectrum Rupee loans which are still outstanding in telecom operator's books of accounts, will be open upto March 31, 2014.
Under the existing guidelines relating to ECB for spectrum allocation, the payment for spectrum allocation may initially be met out of the Rupee resources by the successful bidders, to be refinanced with a long term ECB, under the approval route, subject to the condition that ECB should be raised within 12 months from the date of payment of the final installment to the Government.
2. ECB for working capital under Civil Aviation Sector till 31st December, 2013
The Reserve Bank of India (RBI) vide RBI/2012-13/545 A.P. (DIR Series) Circular No. 116 dated June 25, 2013 has reviewed and decided that the scheme of availing of ECB for working capital for civil aviation sector will continue till December 31, 2013. It has been clarified by the RBI that availing of ECB shall be subject to the condition that all other aspects of the ECB policy shall remain unchanged.
3. Discontinuance of facility for availing ECB in Renminbi
The Reserve Bank of India (RBI) vide RBI/2012-13/546 A.P. (DIR Series) Circular No. 117 dated June 25, 2013 has reviewed the scheme of ECB in Renminbi (the official currency of the People's Republic of China) and decided that the scheme may be discontinued with effect from the date of issue of this circular.
Under the extant guidelines, Indian companies in the infrastructure sector are allowed to avail of ECB in Renminbi (RMB) under approval route subject to an annual cap of USD one billion pending further review. The RBI has mentioned that since the facility of ECB in Renminbi (RMB) had remained unused so far, it has decided to discontinue the same.
4. RBI Broadened the end uses of ECB
The Reserve Bank of India (RBI) vide RBI/2012-13/552 A.P. (DIR Series) Circular No.119 dated June 26, 2013 has decided to bring into force with immediate effect the modifications, that include the following as a part of import of capital goods by the companies for the use in the manufacturing and infrastructure sectors as permissible end uses of External Commercial Borrowings (ECB) under the automatic / approval route as the case may be applicable: (a) import of services;(b) technical know-how; and (c) payment of license fees.
The above shall however, be subject to the following conditions:
(i) There should be a duly signed agreement between the service provider and the borrower company;
(ii) The original invoice raised by the service provider as per the payment schedule in the agreement should be duly certified by the borrower company;
(iii) Declaration by the importer that the entire expenditure on import of services will be capitalised;
(iv) Declaration by the importer that entire expenditure on import of services forms part of project cost; and
(v) AD category - I bank has to ensure the bonafides of the transaction
Further, all other aspects of the ECB policy, such as eligible borrower, recognized lender, end-use, all-incost ceiling, average maturity period, prepayment, refinancing of existing ECB and reporting arrangements etc. shall remain unchanged.
VI. TAS INSETTLE PATENT LITIGATION MATTER WITH HOFFMANN-LA ROCHE
Intas Pharmaceutical limited, drug manufacturer based in Ahmadabad, India and it's wholly owned subsidiary United States based Accord Healthcare Inc. has entered into settlement with pharmaceutical giant Hoffmann- La Roche to resolve pending patent litigation regarding XELODA tablets, generically known as Capecitabine tablets which are used in cure of metastatic breast and colorectal cancers. Hoffmann-La Roche had filed patent infringement suit against Accord Healthcare and Intas Pharmaceutical, upon its submission to the U.S. Food and Drug Administration (USFDA) of an Abbreviated New Drug Application (ANDA) for a generic version of Xeloda tablets.
As per the settlement and license agreement between the Hoffmann-La Roche and Intas, Roche will grant a license to Accord to enter into US market a generic version of Xeloda tablets ahead of its patent exclusivity period and the patent infringement suit instituted by the Roche will be dismissed. Further terms and conditions of the agreement are kept confidential.
VII. BUYBACK OR PREPAYMENT OF FCCBS TO BE CONTINUED TILL 31ST DECEMBER, 2013
The Reserve Bank of India (RBI) vide RBI/2012-13/544 A.P. (DIR Series) Circular No. 115 dated June 25, 2013 has reviewed and decided that the existing scheme of Buyback / Prepayment of Foreign Currency Convertible Bonds (FCCBs) under the approval route which had expired on March 31, 2013, may be continued till December 31, 2013. Thereafter, the same shall stand discontinued, considering the developments in the global financial markets as stated in the circular.
VIII. RBI ENHANCES TIME LIMIT FOR REPORTING UNDER EXPORT OF GOODS AND SERVICES - PROJECT EXPORTS
Reserve Bank of India (RBI) vide RBI//2012-13/548 A.P. (DIR Series) Circular No.118 dated June 26, 2013 has increased the time limit in terms of which an exporter undertaking Project Exports and Service contracts abroad will submit form DPX1, PEX-1 and TCS-1 to the Approving Authority (AA). The existing guidelines required exporters to submit the forms within 15 days of entering into contract for grant of post-award approval. With the issue of this present circular the time limit has been extended and the exporters will be now be required to submit the forms within 30 days of entering into contract for grant of post-award approval.
IX. SUPREME COURT GRANTS RELIEF IN POWER THEFT CASE
The Hon'ble Supreme Court pronounced a recent judgment on 25 June 2013 wherein it has provided relief to those who are facing Power theft cases. The Supreme Court declared that in any pending case related to the power theft, such consumer's electricity supply cannot be disconnected. Justice AK Patnaik while heading the Vacation bench ordered the BSES to restore Power supply within 48 hours at the premises of the concerned consumer /aggrieved who is a resident at Vasant kunj, New Delhi. The court said that it was the duty of the Power company to supply electricity to all owners in all premises.
On the issue, of the power company's refusal to grant a meter connection in the name of the consumer, as the consumer was not the owner of the premises, but was facing such a situation from 2010 and whose power was disconnected, the court clarified that power should be restored in the new consumer's name, event if the original consumer did not want the connection subject to formalities and payment by the New consumer.
The Supreme Court further stated that "If a landlord does not pay up, the tenant has to be given power connection. We don't want any dispute to come in the way of supply of electricity". The court observed that-section 43 of the electricity Act obliges a power company to supply electricity to an owner or an occupier on request.
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