India: New Legislation - January 2015- July 2015

The Coal Mines (Special Provisions) Act, 2015

On September 24, 2014, the Supreme Court cancelled the allocation of 204 coal blocks allocated by the Ministry of Coal under the Coal Mines (Nationalisation) Act, 1973 on grounds of arbitrariness in the allocation process. The Coal Mines (Special Provisions) Act, 2015 ("Coal Mines Act") which was notified on March 30, 2015 lays down the process for allocation of the coal blocks which were cancelled by the Supreme Court order.

The coal blocks are categorised into three categories, Schedule I, Schedule II and Schedule III. Schedule I consists of the 204 mines cancelled by the Supreme Court, Schedule II consists of 42 mines of the 204, which are under production. Schedule III comprises of mines with specified end uses e.g. power, iron and steel, cement and coal washing.

Key provisions of the Coal Mines Act are as follows:

  • Allocation process: Schedule I mines may be allocated by way of either public auction or allocation. Government, private and joint venture companies are eligible to bid for the coal blocks under Schedule I. Schedule II and Schedule II mines are to be allocated by way of public auction. Any government company, private company or a joint venture with a specified end-use is eligible to bid for these mines.
  • End use: Coal mined from Schedule I blocks can be used for captive consumption, sale or for any other purpose as specified in the mining lease.
  • Prior allottees: Prior allottees are not eligible to participate in the auction process if: (i) they have not paid the additional levy imposed by the Supreme Court; or (ii) if they are convicted of an offence related to coal block allocation and sentenced to imprisonment of more than three years. Prior allottees are to be compensated for land as per the registered sales deed value together with 12% simple interest from the date of purchase or acquisition and for mine infrastructure as per the value indicated in the audited balance sheet of the previous financial year.
  • Authority: An authority is to be set up by the Central Government to conduct the process of auction and allotment, executing the vesting and allotment orders and for collecting and apportioning the auction proceeds to the relevant State Governments.

Public Premises (Eviction of Unauthorised Occupants) Amendments Act, 2015

The Public Premises (Eviction of Unauthorised Occupants) Amendments Act, 2015 ("Public Premises Act") was notified on March 13, 2015. It amends the Public Premises (Eviction of Unauthorised Occupants) Act, 1971. The primary objective of the Public Premises Act is to bring the properties of Delhi Metro Rail Corporation ("DMRC") and other Metro Railway property which may come up in future and also the properties of New Delhi Municipal Council ("NDMC") within the ambit of the Public Premises Act. The Public Premises Act extends the definition of public premises to include premises of companies in which at least 51% shares are owned by the central government and partly by one or more state government (including subsidiaries of these companies), and which carry on the business of public transport, including metro railways and premises belonging to the Municipal Corporation of Delhi or any Municipal Committee or notified area Committee.

Time bound processes for determining whether premises are in unauthorised occupation are laid down. If the Estate Officer is satisfied that premises are in unauthorised occupation, he may order the eviction of the premises, which should be done within 15 days from the order. If an Estate Officer receives information that a person is in unauthorised occupation of the premises, he must make an order within 7 days of receiving this information, directing persons who have occupied the premises to show cause as to why they should not be evicted. When a person is in arrears of rent payable, the Estate Officer may order that he pay rent or damages, after issuing a notice asking the person to explain why such as order should not be made. The explanation must be provided within 7 days of the notice. The Public Premises Act states that every appeal to the Estate Officer's orders must be disposed of as quickly as possible.

The Insurance Laws (Amendment) Act, 2015

The Insurance Laws (Amendment) Act, 2015 ("Insurance Act") was notified on March 20, 2015. Its key features are as follows:

  • Increase in foreign investment limit: The maximum foreign investment (including direct and indirect foreign direct investment as well as foreign portfolio investment) permitted in the equity shares of an Indian Insurance Company have been increased from 26 % to 49%. Foreign investment is under the automatic route up to 26% and under the approval route above 26% till 49%. Foreign portfolio investment has been defined to include investments by foreign institutional investors, qualified financial investors, foreign portfolio investors and non-resident investors. The increase in foreign investment in the insurance sector is applicable to insurance brokers, third party administrators, surveyors, loss assessors and other insurance intermediaries appointed under applicable IRDA regulations.
  • Control and ownership: The ownership and control of an Indian Insurance Company must remain with Indian residents. Indian ownership is defined to mean more than 50% of the equity share capital being held by Indian residents. Control is defined to include the right to appoint majority directors on the board of the company or to control the management or policy decisions, including by virtue of shareholders or management rights or shareholder agreements or voting agreements.
  • Control and ownership: The ownership and control of an Indian Insurance Company must remain with Indian residents. Indian ownership is defined to mean more than 50% of the equity share capital being held by Indian residents. Control is defined to include the right to appoint majority directors on the board of the company or to control the management or policy decisions, including by virtue of shareholders or management rights or shareholder agreements or voting agreements.
  • Access to capital market: Public sector undertakings in the insurance sector are permitted to raise funds from the public, provided that government stake in such entities shall not be diluted below 51 per cent.
  • Regulation of health insurance business: The health insurance sector has been recognised as a distinct sector, subject to separate regulation.
  • Enhancement of regulator's powers: The Insurance Regulatory and Development Authority of India has been given the power to make rules on matters such as management fees, commissions and composition of the insurance company's investment portfolio.
  • Re-insurance business: Foreign re-insurers are now permitted to set up branches in India. Re insurance' is defined to mean "the insurance of part of one insurer's risk by another insurer who accepts the risk for a mutually acceptable premium".
  • Appeals process: The securities appellate tribunal has been designated the appellate authority for quasi-judicial and administrative rulings of the IRDA (as opposed to the central government earlier).

Motor Vehicles (Amendment) Act, 2015

The Motor Vehicles (Amendment) Act, 2015 ("MV Amendment Act") was notified on March 19, 2015.The purpose of this legislation is to bring e-carts/e-rickshaws within the purview of the Motor Vehicles Act, 1988. The term "e-cart/e-rickshaw" is defined as follows: "e-cart or e-rickshaw" means a special purpose battery powered vehicle of power not exceeding 4000 watts, having three wheels for carrying goods or passengers, as the case may be, for hire or reward, manufactured, constructed or adapted, equipped and maintained in accordance with such specifications, as may be prescribed in this behalf.

The MV Amendment Act gives the parliament the power to make rules and regulations in relation to specifications of e-carts and for driving licenses in relation to the same.

The Mines and Minerals (Development and Regulation) Amendment Act, 2015

The Mines and Minerals (Development and Regulation) Amendment Act, 2015 ("MMDRA Amendment Act") was notified on March 26, 2015. It amends the provisions of the Mines and Minerals (Development and Regulation) Act, 1957. Its key provisions are as follows:

  • New Schedule: A new, fourth schedule has been added to the MMDRA which includes bauxite, iron ore, limestone and manganese ore as notified minerals.
  • Prospecting license-cum-mining lease: A new category of mining license, i.e. the prospecting license-cum-mining lease, has been created, which is a two stage-concession for the purpose of undertaking prospecting operations (exploring or proving mineral deposits), followed by mining operations.
  • Maximum area for mining: The central government is empowered to increase the area limits granted to a lessee for mining, instead of the earlier practice of providing additional leases.
  • Lease period: For all minerals other than coal, lignite and atomic minerals, mining leases shall be granted for a period of 50 years, and all mining leases granted for such minerals before the amendment, shall be valid for 50 years. On expiry of the lease, instead of being renewed, the leases shall be put up for auction.
  • Lease extensions: Any lease granted before the commencement of the amendment will be extended: (i) up to March 31, 2030 for minerals used for captive purpose and up to March 31, 2020 for other minerals, or (ii) till the completion of renewal period, or (iii) for a period of 50 years from the date of grant of such lease, whichever is later.
  • Auction of notified and other minerals: The MMDRA Amendment Act states that state governments shall grant mining leases and prospecting license-cum-mining leases for both notified and other minerals. Prospecting license-cum-mining lease for notified minerals shall be granted with the approval of central government. All leases shall be granted through auction by competitive bidding, including e-auction.
  • Transfer of mineral concessions: The holder of a mining lease or prospecting license-cum-mining lease may transfer the lease to any eligible person, with the approval of the state government, and as specified by the central government. The state government has to convey its permission/refusal within 90 days of receiving the notice, failing which the transfer will be considered approved. Only mineral concessions granted through auction are eligible for transfer.
  • Institutions: A District Mineral Foundation ("DMF") and a National Mineral Exploration Trust ("NMET") are to be established, by the state government for the benefit of persons in districts affected by mining related operations and by the central government for regional and detailed mine exploration, respectively. Licensees and lease holders are required to pay the DMF an amount not more than one-third of the royalty prescribed by the central government, and the NMET two percent of royalty.

Citizenship (Amendment) Act, 2015

The Citizenship (Amendment) Act, 2015 ("Amendment Act") was notified on March 10. 2015. It amends certain provisions of the Citizenship Act, 1955. Its key provisions are as follows:

  • Citizenship by registration and naturalisation: Under the Citizenship Act, a person may apply for citizenship by registration if they or their parents were earlier citizens of India, and if they resided in India for one year before applying for registration. A person may apply for a certificate of naturalisation if they have resided in India or have served a government in India for a period of 12 months immediately preceding the date of application. The Amendment Act permits the central government to relax the requirement of 12 months' stay or service up to 30 days if special circumstances exist.
  • Registration of Overseas Citizens of India: The Amendment Act provides certain additional grounds for registering for an Overseas Citizen of India card viz. (i) a minor child whose parent(s) are Indian citizens; or (ii) spouse of foreign origin of an Indian citizen or spouse of foreign origin of an Overseas Citizen of India cardholder subject to certain conditions; or (iii) great-grandchild of a person who is a citizen of another country, but who meets the conditions stipulated (for example, the great-grandparent must be a citizen of India at the time of commencement of the Constitution or any time afterwards). Further, if special circumstances exist, the central government is empowered to register a person as an Overseas Citizen of India cardholder even if she/he does not satisfy any of the listed qualifications.
  • Persons from Pakistan/Bangladesh: The Amendment Act extends the provision declaring persons who are/have been a citizen of Pakistan or Bangladesh/ any other country which is notified by the central government ineligible to apply for Overseas Citizenship of India to persons whose parents/grandparents/ great-grandparents were citizens of any of the above countries.
  • Merger of Overseas Citizen of India and Persons of Indian Origin schemes: The Amendment Act provides that the central government may notify that Persons of Indian Origin cardholders shall be considered to be Overseas Citizen of India cardholders from a specified date.
  • Renunciation and cancellation of overseas citizenship: The Act provides that where a person renounces their overseas citizenship, their spouses shall also cease to be an Overseas Citizen of India. Further, the Amendment Act allows the central government to cancel the Overseas Citizenship of India card which is obtained by the spouse of an Indian citizen or Overseas Citizen of India cardholder, if: (i) the marriage is dissolved by a court, or (ii) the spouse enters into another marriage even while the first marriage has not been dissolved.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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