India Business Bulletin - April 2024

General Updates

The Telecom Regulatory Authority of India ("TRAI") releases Consultation Paper on 'Inputs for formulation of National Broadcasting Policy – 2024

The TRAI has released a consultation paper requesting for public inputs, to be taken into consideration for formulating the National Broadcasting Policy. The aim of the Consultation Paper is to establish India as a "Global Content Hub" by highlighting relevant concerns that are commonly encountered in the broadcasting sector. The primary focus of the Consultation Paper would be to deal with policies, regulations and strategies for increasing the contribution to economy through universal reach, innovation and R&D, creation of jobs, development of skills and promotion of start-ups. Additionally, need for a stronger public service broadcasting, problems with different media and entertainment industry segments, prevention of and actions against piracy, guaranteeing content security, socio environmental responsibilities are also covered in the paper, among other issues/points/concerns.

Advisory from the Ministry of Commerce and Industry on 'health drinks' issued

The National Commission for Protection of Child Rights ("NCPCR") has concluded that there is no definition of a 'health drink' under the Food Safety and Standards Act, 2006. Following this, the Ministry has issued an advisory for e-commerce companies / portals to remove drink and beverages products from the cate gory of health drinks from their respective platforms.

Deadline extended for registration of charitable trusts

To facilitate a smoother compliance procedure, the Central Board of Direct Taxes ("CBDT") has extended the deadline till 30 June 2024 for charitable and religious trusts for furnishing registration and any subsequent renewal application.

Rules revised for Green Credit Programme ("GCP")

The Ministry of Environment, Forest and Climate Change has clarified that the focus under GCP should be on restoring ecosystem over tree planting. Under the GCP, individuals, industries and local bodies are incentivized for their voluntary environmental actions across different sectors, such as tree plantation, water and waste management, sustainable agriculture, reduction of air pollution and mangrove conservation.

Age limit on health insurance purchase removed

The Insurance Regulatory and Development Authority of India has abolished the age restriction for purchasing health insurance plans. Earlier the age limit was 65. This will be a huge relief for the senior citizens.

E-commerce platforms asked to set up Open Network for Digital Commerce ("ONDC") storefronts

ONDC is an open source platform launched with an aim to democratise e-commerce in India and bring small businesses online. As per a recent notification, the Government of India has asked Amazon and Flipkart to set up ONDC storefronts on their home page – which will help businesses to expand operations, facilitate deliveries and address any issues / delays.

India-Mauritius Double Tax Avoidance Agreement ("DTAA") amended

DTAA between the two countries has been revised and key amendment includes change in the preamble to specify the intention of the tax treaty; addition of provision for satisfying the principal purpose test condition; requirement to notify each other upon compliance of the provisions regarding implementation of DTAA.

Corporate Law Updates

Revised Secretarial Standard-1 (''SS-1") and Secretarial Stand ard-2 (SS-2") have been notified by the Institute of Company Secretaries of India ("ICSI").

The ICSI has revised the secretarial standards pertaining to board meetings (SS-1) and general meetings (SS-2), to align them with the current provisions of the Companies Act, 2013, and the rules made thereunder ("Act"). Effective from 1 April 2024, SS-1 and SS-2 are mandatory standards for all companies except One Person Company ("OPC") which have only one director, and companies registered under section 8 of the Act.

Briefly, the following revisions (but not limited to) have been under taken, with most amendments made to align the standards with the provisions of the Act:

a) The exemptions provided to a section 8 company and the specific exemptions given to private companies (as per notifications dated June 5, 2015, and June 13, 2017) shall be available only if they have not committed any default in filing their financial statements or annual return with the Registrar of Companies.

b) In addition to OPCs and dormant companies, startup entities can now also hold one board meeting in each half of a calendar year, with more than ninety (90) days gap between the two meetings.

c) Independent directors (where appointed in any company) are now required to hold at least one meeting in a financial year without the attendance of non-independent directors and members of the company's management (instead of meeting once in every calendar year).

d) Proof of delivery of sending and delivery of the drafts of the circular resolution and any other necessary papers shall be maintained by the company for such period as may be decided by the board, but not less than three (3) years from the date of circulation of such resolution.

e) In case of public companies, the appointment of director(s) in a casual vacancy shall be also subsequently approved in the immediate next general meeting.

Deadline for providing comments on Digital Competition Bill ("Bill") extended

The Ministry of Corporate Affairs has extended the deadline to 15 May 2024 for stakeholders to provide comments on the Bill. The key features of the Bill includes Banning practices like steering, self referencing and predatory pricing; Introduction to the concept of Core Digital Service, Systemically Significant Digital Enterprises and their eligibility criteria, obligations and exemptions; Appeal procedure before National Company Law Appellate Tribunal etc.

Labour Law Update

Supreme Court of India clarified on the definition of workman

The Apex Coury of India has recently while deciding a dispute in volving eligibility of the Respondent as "Workman" under Industrial Disputes Act 1947 ("Act") has ruled that mere absence of power to appoint / dismiss / hold disciplinary inquiries against other employees, would not and could not be the sole criterion to determine the applicability of the Act. The Respondent who was appointed as "Senior Manager(B2) - Sales" and had total annual pay of Rs. 22,00,000 (US$ 27,600 approximately) was held not to be a workman under the Act.

Intellectual Property Updates

Trademark allowed to be renewed after nearly 40 years of failure to pay renewal fees

The Bombay High Court upheld the rights of the Petitioner to renew their lapsed trademark, based on the fact that the Registrar had failed to provide sufficient notice to the Petitioner before the due date of the renewal of his/her trademark. This paved the way for a number of applicants to seek remedial action if their trademarks have been similar ly removed, without following due process of law.

Plaintiff secures ex-parte ad interim injunction in a case of reverse passing off

A suit was brought against the Defendant alleging refurbishment and rebranding of Plaintiff's old Hard Disk Drives (HDDs) – where Plaintiff's marks were removed to repackage said HDDs under the Defendant's mark. Results of an investigation confirming the Plaintiff's claims was submitted to establish a prima facie case against the Defendant.

The High Court of Delhi recognized these facts as an instance of reverse passing off i.e., where the opposite party sells the first party's products under its own brand name after removing the first party's trademarks thereby misleading consumers in the process.

Given the above, it was held that the Defendant had falsely attributed the origin of Plaintiff's products, leading consumers to believe that the product came from the Defendant rather than the Plaintiff - harming Plaintiff's reputation and goodwill. Such activities of the Defend ant were accordingly restrained.

Case Laws

Promotional trailer does not create contractual relationship

Setting aside a decision of the National Consumer Disputes Redressal Commission, the SC held that a promotional trailer is unilateral in nature and its purpose is to encourage customers / viewers to purchase tickets to a movie. The trailer does not create a contractual relationship between the producer and consumer / audience. Additionally, non-inclusion of a song in the final movie, which was featured in the trailer, does not qualify as "deficiency of service" under the Consumer Protection Act, 2019 ("Act") due to the absence of a contractual relationship. Neither does it qualify as "unfair method / unfair and deceptive practice" under the Act nor does it make any false or misleading representation.

An agreement regarding jurisdiction of Courts not contrary to public policy clarified by the Delhi High Court ("DHC")

The DHC has ruled that it is a settled principle that in case where two or more Courts have jurisdiction under Civil Procedure Code, 1908 to try a suit and both the parties have agreed for an exclusive jurisdiction clause – the same is neither forbidden by law nor contrary to public policy.

Dissenting opinion of a judge in Arbitration Award not an essential part of Tribunal Award

It has been upheld by DHC that limitation period will be calculated from the date on which the majority members declared/published the arbitral award. The opinion of the minority of arbitrators does not carry weight while determining the validity and enforceability of the Award. In case when majority of the arbitrator signed the award – the same is valid and enforceable under the law.