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Subject- Business and Corporate Law

Mr. Rashmiranjan Panigrahi, (Lecturer in Finance)

Unit-III -: WORKMEN’S COMPENSATION ACT

This Unit consists of following things -:

Workmen compensation act

Sick industries companies act

WORKMEN’S COMPENSATION ACT

3.1.1. Introduction to the Act

The Workmen’s Compensation Act, 1923 is one of the earliest labor welfare and social security

legislation enacted in India. It recognizes the fact that if a workman is a victim of accident or an

occupational disease in course of his employment, he needs to be compensated.

The Act does not apply to those workers who are insured under the Employees’ State Insurance

Act 1948. Section 53 of the Employees’ State Insurance Act provides:

An insured person or his dependents shall not be entitled to receive or recover whether from the

employer of the insured person or from any other person any compensation or damages under the

Workmen’s Compensation act 1923 or any other law for the time being in force or otherwise in

respect of an employment injury sustained by the insured person as an employee under this Act.

3.1.2. Objectives of the Act

The Workmen’s Compensation Act, aims to:

1) Provide workmen and/or their dependents some relief or to consider compensation payable

by an employer to his workmen in case of accidents arising out of and in the course of

employment and causing either death or disablement of workmen as a measure of relief and

social security.

2) Provide for payment by certain classes of employers to their workmen compensation for

injury by accident.

3) To enable a workmen to get compensation irrespective of his negligence.

4) It lays down the various amounts payable in case of an accident, depending upon the type and

extent of injury. The employer now knows the amount of compensation he has to pay and is

saved of many uncertainties to which he was subject before the Act came into force.

3.1.3. Scope of the Act

1) The Act is confined to industries which are more or less Organized.

2) The workmen whose occupation is hazardous should be Included within the scope of this Act.

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3.1.4. Features of the Act 1) Act provides for cheaper and quicker mode of disposal of disputes through special

proceedings than possible under Civil Laws.

2) Act provides compensation to workmen for injury caused by accident and occupational

disease arising out of and in the course of employment.

3) The Act is applicable to apprentices also.

4) Procedure for settlement of claim is through Commissioners.

3.1.5. Definitions 1) Commissioner [Section 2 (1) (b)]: Commissioner means a Commissioner for Workmen’s

Compensation appointed under Section 20.

2) Compensation [Section 2(1) (c)]: Compensation means compensation as provided for by this

Act.

3) Dependent [Section 2(1) (d)]: Dependent means any of the following relatives of a deceased

workman, namely:

i) A widow, a minor, legitimate or adopted son, an unmarried legitimate or adopted

daughter or a widowed mother; and

ii) If wholly dependant on the earnings of the workman at the time of his death a son or a

daughter who has attained the age of 18 years and who is infirm;

iii) If wholly or in part dependant on the earnings of the workman at the time of his death:

a) A widower,

b) A parent other than a widowed mother,

c) A minor, illegitimate son, an unmarried illegitimate daughter, or a daughter legitimate

or illegitimate or adopted if married and a minor or if widowed and minor,

d) A minor brother or an unmarried sister or a widowed sister if a minor,

e) A widowed daughter-in-law,

f) A minor child of a pre-deceased son,

g) A minor child of a pre-deceased daughter where no parent of the child is alive, or

h) A paternal grandparent if no parent of the workman is alive.

4) Employer [Section 2(1) (e)]: Employer includes any body or persons whether incorporated

or not and any managing agent of an employer and the legal representative of a deceased

employer and when the services of a workman are temporarily lent or let on hire to another

person by the person with whom the workman has entered into a contract of service or

apprenticeship means such other person while the workman is working for him;

5) Managing Agent [Section 2(1) (f)]: Managing agent means any person appointed or acting

as the representative of another person for the purpose of carrying on such other person’s

trade or business but does not include an individual manager subordinate to an employer;

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6) Minor [Section 2(1) (ff)]: Minor means a person who has not attained the age of 18 years;

7) Disablement: Disablement means loss of capacity to work or to move. Disablement of a

workman may result in loss or reduction of his earning capacity. In the latter case, he is not

able to earn as much as he used to earn before his disablement. Disablement may be partial,

or total. Further Partial disablement may be permanent, or temporary.

i) Partial Disablement [Section 2 (1) (g)]: This means any disablement as reduces the

earning capacity of a workman as a result of some accident. Partial disablement may be

temporary or permanent.

a) Temporary partial disablement means any disablement as reduces the earning capacity

of a workman in any employment in which he was engaged at the time of accident

which resulted in such disablement.

b) Permanent partial disablement is one which reduces the earning capacity of a

workman in every employment which he was capable of undertaking at the time of

injury.

ii) Total Disablement [Section 2 (1) (l)]: It means such disablement, whether of a temporary

or permanent nature, as incapacitates a workman for all work which he was capable of

performing at the time of the accident resulting in such disablement. It refers to that

condition where a workman becomes unfit for every type of work and is not able to get

job anywhere due to that disablement.

Total disablement is deemed to result from every injury specified in Part I of Schedule I

or from any combination of injuries specified in Part II thereof where the aggregate

percentage of the loss of earning capacity, as specified in Part II against those injuries,

amounts to 100 per cent or more.

Where an employee becomes unfit for a particular class of job but is fit for another class

which is offered to him by the employer, the workman is entitled to claim compensation

only on the basis of partial disablement and not total disablement.

8) Qualified Medical Practitioner [Section (2) (i)]: Qualified medical practitioner means any

person registered under any Central Act or an Act of the Legislature of a State providing for

the maintenance of a register of medical practitioners or in any area where no such last-

mentioned Act is in force, any person declared by the State Government by notification in the

Official Gazette to be a qualified medical practitioner for the purpose of this Act;

9) Wages [Section 2(1) (m)]: Wages includes any privilege or benefit which is capable of being

estimated in money other than a traveling allowance or the value of any traveling concession

or a contribution paid by the employer of a workman towards any pension or provident fund

or a sum paid to a workman to cover any special expenses entailed on him by the nature of

his employment.

10) Workman [Section 2(1) (n)]: Workman means any person (other than a person whose

employment is of a casual nature and who is employed otherwise than for the purposes of the

employer’s trade or business) who is:

i) A railway servant as defined in section 3 of the Indian Railways Act 1890 not

permanently employed in any administrative district or sub-divisional office of a railway

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and not employed in any such capacity as is specified in Schedule II, or

a) A master seaman or other member of the crew of a ship.

b) A captain or other member of the crew of an aircraft.

c) A person recruited as driver, helper, mechanic, cleaner, or in any other capacity in

connection with a motor vehicle.

d) A person recruited for work abroad by a company and who is employed outside India

in any such capacity as is specified in Schedule II and the ship aircraft or motor

vehicle or company as the case may be is registered in India or;

ii) Employed in any such capacity as is specified in Schedule II

whether the contract of employment was made before or after the passing of this Act and

whether the contract is expressed or implied oral or in writing; but does not include any person

working in the capacity of a member of the Armed Forces of the Union; and any reference to a

workman who has been injured shall where the workman is dead includes a reference to his

dependants or any of them.

3.1.6. Workmen’s Compensation

[A]. Employer’s Liability for Compensation [Section 3]

An employer is liable to pay compensation to a workman:

1) For personal injury caused to him by accident, and

2) For any occupational disease contracted by him.

1) Personal Injury: Personal injury includes:

i) Must have been caused during the course of his employment; and

ii) Must have been caused by accident arising out of his employment.

An accident alone does not give a workman a right to compensation. To entitle him to

compensation at the hands of the employers the accident must arise out of and in the course

of his employment. The language in Section 3 shows that injury is caused by accident and not

‘by an accident’. So the injury should be caused by accident by some mishap, unexpected or

unforeseen.

The personal injury caused to the worker must have resulted in total or partial disablement of

the workman for a period exceeding three days or it must have resulted in the death of the

worker.

The injury should not have been caused by accident which is directly attributable to:

i) The workman having been under the influence of drink or drugs at the time of the

accident;

ii) Willful disregard of instruction relating to safety precautions given by the employer;

and/or

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iii) The willful disregard of the usage of the safety device or safety guard provided for the

purpose of securing safety of the workman by the employer.

2) Occupational Disease: Section 3(2) of the Act also recognizes that the workman employed

in certain types of industries of occupation risk exposure to certain occupational disease peculiar

to that employment. This section states that the contracting of any of these occupational diseases

shall be deemed to be:

i) An injury by accident within the meaning of the Act and compensation is payable to the

workman who contracts such disease;

The types of employment which exposes the workman to occupational disease as well as the list

of occupational diseases are contained in Schedule III of the Act.

Schedule III is divided into three parts, viz., A, B and C. No specific period of employment is

necessary for a claim for compensation with respect to occupational diseases mentioned in

Part A. For diseases specified in Part B the workman must be in continuous service of the

same employer for a period of six months in the employment specified in that part. For

diseases in Part C the period of employment would be such as is specified by the Central

Government for each of such employment whether in the service of one or more employers.

If a workman employed in any employment mentioned in Part C of the Schedule II contracts

any occupational disease peculiar to that employment, the contracting whereof is deemed to

be an injury by accident within the meaning of Section 3 and such employment was under

more than one employer then all the employers shall be liable for the payment of

compensation in such proportion as the commissioner in the circumstances may deem just.

[B] Amount of Compensation [Section 4]

Section 4 of the Act prescribes the amount of compensation payable under the provisions of the

Act. The amount of compensation payable to a workman depends on:

1) The nature of the injury caused by accident.

2) The monthly wages of the workman concerned, and

3) The relevant factor for working out lump-sum equivalent of compensation amount as

specified in Schedule IV (as substituted by Amendment Act of 1984).

There is no distinction between an adult and a minor worker with respect to the amount of

compensation.

New Section 4 (as substituted by the Amendment Act of 1984) provides for compensation for:

1) Death;

2) Permanent total disablement;

3) Permanent partial disablement; and

4) Temporary disablement – total or partial.

1) Compensation for Death: Where death results from an injury, the amount of compensation

shall be equal to 50 percent of the monthly wages of the deceased workman multiplied by the

relevant factor, or Rs. 85,000 whichever is more.

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The formula for calculating the amount of compensation in case of death resulting from an

injury will be as follows:

50 Monthly wages Relevant factor or ` 80,000 whichever is more.

100

2) Compensation for Permanent Total Disablement: Where permanent total disablement

results form an injury, the amount of compensation payable shall be equal to 60 percent of

the monthly wages of the injured workman multiplied by the relevant factor, or Rs. 90,000,

whichever is more.

The formula for calculating the amount of compensation in case of permanent total

disablement resulting from an injury will be as follows:

60 Monthly wages relevant factor or `90,000 whichever is more.

100

3) Compensation for Permanent Partial Disablement:

i) In the case of an injury specified in Part II of Schedule I, such percentage of the

compensation which would have been payable in the case of permanent total disablement

as is specified therein as being the percentage of the loss of earning capacity caused by

the injury; and in other words, the percentage of compensation payable is proportionate to

the loss of earning capacity permanently caused by the scheduled injury. Thus, if the loss

of earning capacity caused by an injury specified in Part II of Schedule I is 30 percent, the

amount of compensation shall be 30 percent of compensation payable in case of

permanent total disablement.

ii) In the case of an injury not specified in Schedule I such percentage of the compensation

payable in the case of permanent total disablement as is proportionate to the loss of

earning capacity (as assessed by the qualified medical practitioner) permanently caused

by the injury.

4) Compensation for Temporary Disablement: A half monthly payment of the sum whether

total or partial results equivalent to 25% of monthly wages of the from the injury workman to

be paid in the manner prescribed.

5) Compensation to be Paid when due and Penalty for Default: Section 4A provides for the

payment of compensation and the penalty for default. It provides that compensation shall be

paid as soon as it falls due. Section 4 mandates employer to pay compensation amount as

soon as it falls due to victim or his or her legal heirs.

However, where the employer does not accept the liability for compensation to the extent

claimed, he shall be bound to make provisional payment based on the extent of liability

which he accepts, and such payment shall be deposited with the Commissioner or made to the

workman, as the case may be, without prejudice to the right of workman to make any further

claim.

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[C] Distribution of Compensation/Procedure for Compensation [Section 8]

Section 8 of the Act provides for the deposit of the compensation before the Commissioner, as

also to the distribution of compensation by the Commissioner. Section 8 lays down following

rules with regard to distribution of compensation:

1) No payment of compensation in respect of workman whose injury has resulted in death, and

no payment of lump sum as compensation to a woman or a person under a legal disability,

shall be made otherwise then by deposit with the Commissioner, and no such payment made

directly by an employer shall be deemed to be a payment of compensation.

2) Any other sum amounting to not less than ten rupees which is payable as compensation may

be deposited with the Commissioner on behalf of the person entitled thereto.

3) The receipt of the Commissioner shall be a sufficient discharge in respect of any

compensation deposited with him.

4) On the deposit of any money under sub-section (1), as compensation in respect of a deceased

workman the Commissioner shall, if he thinks necessary, cause notice to be published or to

be served on each dependant in such manner as he thinks fit, calling upon the dependents to

appear before him on such date as he may fix for determining the distribution of the

compensation. If the Commissioner is satisfied, after any inquiry which he may deem

necessary, that no dependant exists, he shall repay the balance of the money to the employer

by whom it was paid.

5) Compensation deposited in respect of a deceased workman shall, subject to any deduction

made under sub-section (4), be apportioned among the dependants of the deceased workman

or any of them in such proportion as the Commissioner thinks fit or may, in the discretion of

the Commissioner, be allotted to any one dependant.

6) Where any compensation deposited with the Commissioner is payable to any person, the

Commissioner shall, if the person to whom the compensation is payable is not a workman or

a person under a legal disability, and may, in other cases, pay the money to the person

entitled thereto.

7) i) Where any lump sum deposited with the Commissioner is payable to a woman or a person

under a legal disability, such sum may be invested, applied or otherwise dealt with for the

benefit of the woman, or of such person during his disability, in such manner as the

Commissioner may direct.

ii) Where a half-monthly payment is payable to a person under legal disability, the

Commissioner may pay it to any dependant of the workman or to any other person whom

the Commissioner thinks best fitted to provide for the welfare of the workman.

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8) The Commissioner may, on account of neglect of children on the part of a parent or on

account of the variation of the circumstances of any dependant, or for any other sufficient

cause, vary his earlier orders regarding distribution or investment of compensation. But no

such order prejudicial to any person shall be made unless such person has been given an

opportunity of showing because why the order should not be made.

9) Where the Commissioner varies any order under sub-section (8) by reason of the fact that

payment of compensation to any person has been obtained by fraud, impersonation or other

improper means any amount so paid to or on behalf of such person may be recovered as an

arrear of land revenue.

3.2 Sick Industrial Companies Act (SICA)

Sick industrial unit is defined as a unit or a company (having been in existence for not less than five years)

which is found at the end of any financial year to have incurred accumulated losses equal to or exceeding

its entire net worth. The net worth is calculated as sum total of paid up capital and free reserves of a

company less the provisions and expenses, as may be prescribed. An industrial unit is also regarded as

potentially sick or weak unit if at the end of any financial year, it has accumulated losses equal to or

exceeding 50 per cent of its average net worth in the immediately preceding four financial years and has

failed to repay debts to its creditor(s) in three consecutive quarters on demand made in writing for such

repayment.

3.2.1 The two basic factors which may result in sickness of an industrial unit are:-

Internal factors are those which arise within an organization. They include:- Mismanagement in various functional areas of a company like finance, production,

marketing and personnel;

Wrong location of a unit;

Overestimation of demand and wrong dividend policy;

Poor implementation of projects which may be due to improper planning or managerial

inefficiency;

Poor inventory management in respect of finished goods as well as inputs;

Unwarranted expansion and diversion of resources such as personal extravagances,

excessive overheads, acquisition of unproductive fixed assets, etc.;

Failure to modernize the productive apparatus, change the product mix and other elements

of marketing mix to suit the changing environment;

Poor labour-management relationship and associated low workers' morale and low

productivity, strikes, lockouts, etc.

External factors are those which take place outside an organization. They include:- Energy crisis arising out of power cuts or shortage of coal or oil;

Failure to achieve optimum capacity due to shortage of raw materials as a result of

production set-backs in the supply industries, poor agricultural output because of natural

reasons, changes in the import conditions, etc.

Infrastructural problems like transport bottlenecks;

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Credit squeeze;

Situations like market recession, changes in technology,etc;

International pressures or circumstances, etc.

Industrial sickness may be caused by a combination of all such factors. It has several adverse

consequences on the economy as a whole. Some of which may be enumerated as follows:-

It leads to loss of substantial revenue to the Government and enhances its public expenditure;

It locks up necessary resources and funds in the sick unit. This also increases the non-performing

assets (NPAs) of banks and financial institutions;

It leads to loss of production and productivity in the economy;

It aggravates the problem of unemployment in the economy;

It vitiates the industrial atmosphere and leads to worker-management disputes, strikes, lock-outs ,

etc;

It undermines the public confidence in the functioning of the organised sector in the country which

in turn affects the overall investment climate of the economy.

In the light of the above consequences of sickness and its growing incidence by size, region and industry

followed by its far-reaching adverse socio-economic effects, the Government has been taking many steps

and remedial measures in order to tackle this problem in India. The most significant measure has been the

enactment of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA).

3.2.2 Sick Industrial Companies (Special Provisions) Act, 1985

The most important piece of legislation dealing with industrial sickness was the Sick Industrial

Companies (Special Provisions) Act, 1985 (SICA). It applies to industrial undertakings both in the

public and private sectors. SICA pertains to the industries specified in the First Schedule to the Industries

(Development and Regulation) Act, 1951, (IDR Act) subject to the exceptions specified in the Act.

SICA, including any rules or schemes made there under, had overriding provisions over other laws except

the provisions of the Foreign Exchange Regulation Act, 1973 and the Urban Land (Ceiling and

Regulation) Act, 1976.

The basic rationale of enacting SICA was to determine sickness in the industrial units. It also aimed at

expediting the revival of potentially viable units so as to make the investments in such units profitable. At

the same time, to ensure the closure of unviable units so as to release the investments locked up in such

units for productive use elsewhere.

Thus, the broad objectives of SICA were:-

Timely detection of sick and potentially sick companies.

Speedy determination by a body of experts of the preventive, ameliorative, remedial and other

measures which need to be taken with respect to such companies.

The expeditious enforcement of the measures so determined and for all matters connected

therewith or incidental thereto.

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UNIT –V- SECURITY AND EXCHANGE BOARD OF INDIA

This unit consist of following things -:

5 .1-SEBI act

5.2- Trademark act

5.3-Information Technology act

5.4-. Indian companies act

5.1 SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI) ACT

SEBI (Securities And Exchange Board of India) is the regulator for the securities market in India. The

key objective of SEBI is to encourage healthy and organized growth of the securities market in India and

to provide investor protection. It was formally set up by The Government of India in 1988 and given

statutory powers in 1992.

In 1988 the Securities and Exchange Board of India (SEBI) was established by the Government of India

through an executive resolution, and was subsequently upgraded as a fully autonomous body (a statutory

Board) in the year 1992 with the passing of the Securities and Exchange Board of India Act (SEBI Act)

on 30th January 1992. In place of Government Control, a statutory and autonomous regulatory board

with defined responsibilities, to cover both development & regulation of the market,

and.independent.powers.has.been.setup.

5.1.1 THE IMPORTANT OBJECTIVES OF SEBI ACT

1. Investor Protection: Without active investors, the capital market is worthless. For that reason, it is

essential to safeguard the interests of the investors. The protection of the interests of investors implies

shielding them from erroneous information provided by the businesses, lowering the likelihood of

default, etc. Thus, the top objective of the SEBI (Securities And Exchange Board of India) is to offer

security to the investors.

2. Regulation of Stock Markets: SEBI regulates the stock markets to ensure that effective services are

offered to all the parties involved like brokers, merchant bankers, and other intermediaries to promote

professionalism. Moreover, it also has to ensure fair practices.

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3. Checking for Insider Trading: Insider trading means the trading of a company’s securities by

individuals (like directors, promoters, etc) with access to non-public information about the company.

These people have access to secret information about the company. This harms the interests of the

common investors. In a number of countries insider trading is illegal. The reason being that it is unfair to

other investors who do not have access to the information. Quite a few steps have already been taken to

check insider trading by SEBI.

4. Control over Financial Intermediaries: It is essential to keep close track of the activities of the

brokers and other intermediaries in order to regulate the capital markets. Since its creation, SEBI

(Securities And Exchange Board of India) has been working towards the achievement of its objectives

with commendable zeal. The advancements in the securities markets like capitalization requirements,

margining, establishment of clearing organizations etc. has decreased the risk of default. In a nutshell,

we can say that the objectives of SEBI are to protect the investors, regulate stock exchanges & financial

intermediaries and encourage healthy growth and development of capital market in India.

Since its inception SEBI has been working targeting the securities and is attending to the fulfillment of

its objectives with commendable zeal and dexterity. The improvements in the securities markets like

capitalization requirements, margining, establishment of clearing corporations etc. reduced the risk of

credit.

5.1.2 PURPOSES AND AIMS OF SEBI ACT

The Securities and Exchange Board of India (SEBI) set up in 1988 was given statutory recognition in

1992 on recommendations of the Narasimham Committee. Among other things, the Board has been

mandated to create an environment which would facilitate mobilization of adequate resources through

the securities market and its efficient allocation.

The purposes and aims of SEBI are as follows:

Regulating the business in stock markets and other securities markets.

Registering and regulating the working of stock brokers and other intermediaries

associated with the securities markets.

Registering and regulating the working of collective investment schemes including

mutual funds.

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Promoting and regulating the self-regulatory organizations.

Prohibiting fraudulent and unfair trade practices relating to securities markets.

Promoting investors' education and training of intermediaries of securities markets.

Prohibiting insider trading in securities.

Regulating substantial acquisition of shares and takeover of companies.

Performing such functions and exercising such powers under the provisions of the Capital

Issues (Control) Act, 1947 and Securities Contracts (Regulations) Act, 1956, as may be

delegated to it by the Central government.

5.1.3 FUNCTIONS OF SEBI

Section 11 of the Securities and Exchange Board of India Act.

Regulation Of Business In The Stock Exchanges

A) A review of the market operations, organizational structure and administrative control of the

exchange

All stock exchanges are required to be Body Corporate.

The exchange provides a fair, equitable and growing market to investors.

The exchange’s organization, systems and practices are in accordance with the Securities

Contracts (Regulation) Act (SC(R) Act), 1956

B) Registration and Regulation of the Working of Intermediaries

Regulates the working of the depositories [participants], custodians of securities, foreign

institutional investors, credit rating agencies and such other intermediaries

SEBI (Mutual Funds) Regulations, 1996 lays down the provisions for the appointment of the

trustees and their obligations

Every new scheme launched by a mutual fund needs to be filed with SEBI and SEBI reviews the

document in regard to the disclosures contained in such documents.

Regulations have been laid down regarding listing of funds, refund procedures, transfer

procedures, disclosures, guaranteeing returns etc

SEBI has also laid down advertisement code to be followed by a mutual fund in making any

publicity regarding a scheme and its performance

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SEBI has prescribed norms / restrictions for investment management with a view to minimize /

reduce undue investment risks.

SEBI also has the authority to initiate penal actions against an erring MF.

In case of a change in the controlling interest of an asset management company, investors should

be given at least 30 days time to exercise their exit option.

C) Registration and Regulation of Mutual Funds, Venture Capital Funds & Collective Investment

Schemes

AMFI-Self Regulatory Organization-'promoting and protecting the interest of mutual funds and

their unit-holders, increasing public awareness of mutual funds, and serving the investors'

interest by defining and maintaining high ethical and professional standards in the mutual funds

industry'.

Every mutual fund must be registered with SEBI and registration is granted only where SEBI is

satisfied with the background of the fund.

SEBI has the authority to inspect the books of accounts, records and documents of a mutual fund,

its trustees, AMC and custodian where it deems itnecessary

D) Promoting & Regulating Self Regulatory Organizations

In order for the SRO to effectively execute its responsibilities, it would be required to be structured,

organized, managed and controlled such that it retains its independence, while continuing to perform a

genuine market development role

E) Prohibiting fraudulent and unfair trade practices in the Securities Market

SEBI is vested with powers to take action against these practices relating to securities market

manipulation and misleading statements to induce sale/purchase of securities.

F] Prohibition of Insider Trading

Stock Watch System, which has been put in place, surveillance over insider trading would be further

strengthened.

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G) Investor Education and the training of Intermediaries

o SEBI distributed the booklet titled “A Quick Reference Guide for Investors” to the

investors

o SEBI also issued a series of advertisement /public notices in national as well as regional

newspapers to educate and caution the investors about the risks associated with the

investments in collective investment schemes

o SEBI has also issued messages in the interest of investors on National Channel and

Regional Stations on Doordarshan.

H) Inspection and Inquiries

I) Regulating substantial acquisition of Shares and take-overs

J) Performing such functions and exercising such powers under the provisions of the Securities

Contracts (Regulation) Act, 1956 as may be delegated to it by the Central Government;

K) Levying fees or other charges for carrying out the purposes of this section

L) Conducting Research For The Above Purposes

SEBI has been vested with wide-ranging powers. Firstly, to oversee constitution as well as the

operations of mutual funds including presentation of accounts, following the decision to allow the entry

of private sector and joint sector mutual funds. Secondly, all stock exchanges in the country have been

brought under the annual inspection regime of SEBI for ensuring orderly growth of stock markets and

investors' protection. Thirdly, with the repealing of the Capital Issues (Control) Act, 1947, in May 1992,

SEBI has been made the regulatory authority in regard to new issues of companies. An amendment to

the SEBI Act (1992) carried out March 25, 1995 has empowered SEBI to register and regulate new

intermediaries in the capital market. With this empowerment, all intermediaries associated with the

securities market are now regulated by SEBI. Fourthly, with effect from 1995, the SEBI has been

empowered to impose penalties on different intermediaries for defaults

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5.1.4 ROLE/CONTRIBUTION OF SEBI IN INVESTOR PROTECTION:

(1) Issue of guidelines: SEBI has issued guidelines to companies (bringing new issues in the market)

mutual funds, portfolio managers, merchant bankers, underwriters, lead managers, etc. These guidelines

are for bringing transparency in their operations and also for avoiding exploitation of investors by one

way or the other. SEBI has introduced a code of advertisement for public issues for ensuring fair and

truthful disclosures. In order to reduce the cost of issue, the underwriting is made optional on certain

terms. These steps are also for the protection of investors. SEBI keeps watch on all intermediaries and

see that they follow the guidelines in the right spirit. It also takes panel actions when the guidelines are

not followed. These steps give protection to investors.

(2) Public interest advertisements: SEBI issues public interest advertisements to enlighten investors on

the basic features of various instruments and minimum precautions they should take before choosing an

investment. The SEBI desires to create awareness among investors about their rights and about remedies

if problem arise. It has published some booklets for the information and guidance of

investors.

(3) Dealing with complaints of investors: The investors can make complaints to SEBI

if they face problems relating to their investment in industrial securities and financial

assets. SEBI receives thousands of complaints relating to non-receipt of refund

orders, allotment letters, non-receipt of dividend or interest and delays in the transfer

of shares and debentures. SEBI is making efforts to solve such complaints through

appropriate measures. SEBI is keen to solve the complaints of investors and wants to protect their

interests. It is committed to co-operating with various consumer redressal forum in this regard.

Although, a large number of complaints reaching SEBI are being redressed, still a

large number of complaints remain unredressed.

(4) Investor education: SEBI is aware that investor education is important for his protection. It

encourages the formation of investor associations that disseminate information through news letters.

More than nine such associations are registered with SEBI. SEBI is bringing out two monthly

publications for the investors.

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These are:

(a),SEBI- Market Review,

(b) SEBI News-letter. These publications are for the education, guidance and protection of investors.

(5) Investor surveys: SEBI has also conducted surveys in respect of investment and opportunities for

the benefit of small investors. The findings of the surveys are given wide publicity so as to provide

proper guidance to investors regarding their investment decisions.

(6) Introduction to stock invests: SEBI has introduced stock invest as a new instrument useful while

submitting application for shares. This new instrument introduced through the co-operation of banks

gives protection to investors as they get interest on the application money till the allotment of shares.

(7) Disclosures by companies: SEBI has introduced norms for disclosure of half yearly

unaudited results of companies. It has also revised the format of prospectus to

provide more information to investors. It also insists that every share application. Form

is accompanied by an abridged prospectus. The provisions relating to disclosures are

for the information and protection of small/average investors.

(8) Code regarding takeovers: SEBI has now issued code regarding takeovers of

companies, mergers and amalgamations. It has introduced regulations governing

substantial acquisition of shares and takeovers and lays down the conditions under

which disclosures and mandatory public offers have to be made to the shareholders.

Here, the purpose is to protect the interests of investors even when they are not

directly party to such takeovers.

5.1.5 POWERS OF SEBI

In order to achieve the objectives of the Act, many powers have been conferred on SEBI. There have

been a number of security scams in the Country involving loss of crores of rupees to small and innocent

investors. The Government of India constituted a Joint Parliamentary Committee to probe these scams.

There is a feeling in many quarters that SEBI enjoys very limited powers and hence it is unable to

regulate the security market.

(I) Power to Seek Information. Section 11 of the SEBI Act, 1992 alas amended by the Amending Act

of 2002 confers a very important power on SEBI to seek information and records from any bank or any

other statutory authority or board or corporation established either by central, state or local government.

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In other words, SEBI can now seek such information that would enable it to know the route through

which the funds have been siphoned off. Earlier, it was not possible for SEBI to do so, resulting in

hampering of investigations against offenders.

(II) Powers of Inspection: The new section 11(2) inserted by the Securities and Exchange Boars of

India (Amendment) Act 202 empowers SEBI to conduct inspection of books, registers, documents and

records of any listed company or public company intending to get its securities listed. Such an

inspection can be conducted by SEBI when it has reasonable grounds to believe that the particular

company has been indulging in insider trading or indulging in fraudulent and unfair trade practices

relating to the securities market. It is interesting to note that this is the first time that inspection powers

have been given to SEBI and that should help the regulator in conducting speedy and effective

investigation.

(III) Powers of Civil Court Exercisable by SEBI: The SEBI shall have the same powers as reverted in

a civil court under the code of Civil Procedure, 1908 while trying a suit, in respect of the following

matters:

(a) The discovery and production of books of account and other documents, at such place and such time

as may be specified by the SEBI.

(b) Summoning and enforcing the attendance of persons and examining them on oath;

(c) Inspection of any books, registers and other documents of any person referred to in

section 12, at any place.

(d) Inspection of any book, or register, or other document or record of the company;

(e) Issuing commissions for the examination of witnesses or documents.

(IV) Powers of SEBI Where an Inquiry or Investigation is Ordered: SEBI may take any of the

following measures, either pending investigation or inquiry or on the completion of such investigation or

inquiry:

(a) Suspend the trading of any security in recognized stock exchange.

(b) Restrain person from accessing the securities market and prohibit any person associated with the

securities market to buy, sell or deal in securities.

(c) Suspend the office bearers of any stock exchange or self regulatory organizations from holding such

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position.

(d) Impound and retain the proceeds of securities in respect of any transaction which is under

investigation.

(e) Attach after passing of an order on an application made for approval by the Judicial Magistrate of

first class having jurisdiction for a period not exceeding 1 month, one or more bank accounts of any

intermediary or any person associated with the securities market in any manner involved in violation of

any of the provision of this Act, or the rules of the regulations made there under. However, only the

bank accounts or any transaction entered therein so far as it relates to the proceeds actually involved in

violation of any of the provisions of this Act, or the rules or the regulations made there

under shall be allowed to be attached.

(f) Direct any intermediary or any person associated with the securities market in any manner not to

dispose of or alienate any asset forming part of any transaction which is under investigation.

(g) Power to regulate or prohibit issue of prospects, offer document or advertisement soliciting money

for issue of securities.

(V) Power to Issue Directions: SEBI may make an enquiry if it is satisfied that it is necessary

(i) In the interest of investors, or orderly development of securities market; or

(ii) To prevent the affairs of any intermediary being conducted in a manner detrimental to the interest of

investors or securities market; or

(iii) To secure the proper management of any such intermediary or person. After making such inquiry as

it deems fir, SEBI may, for protection of interests of investors, issue such directions, as it deems fit, to

(i) Any person or class of persons referred in section 12.

(ii) Any person associated with the securities market.

(VI) Power of Search and Seizure: A new section 11C has been introduced in the principal Act by the

Securities and Exchange Board of India (Amendment) Act 202 which covers the power of search and

seizure. This arms SEBI where it has reasonable grounds to believe that transactions in securities are

being dealt with in the capital market in a manner detrimental to the interest of the securities market, to

order investigation and also issue directions for the production of books and other relevant records,

which may be kept in the custody of the investigation authority.

(VII) Power to Order Cease and Desist: Section 11D, a new section inserted by the

securities and Exchange Board of India (Amendment) Act 2002 empowers SEBI to issue a cease and

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desist order, where necessary. It provides that if the Board finds, after causing

an inquiry to be made, that any person has violated, or is likely to violate, any provisions of this Act, or

any rules or regulations made there under, the Board may pass an order requiring such person to cease

and desist from committing or causing such violation.

(VIII) Power of SEBI Under SCRA: Following are the powers enjoyed by the SEBI under the

Securities Contracts Regulations Act, 1956.

(i) To grant recognition to a stock exchange.

(ii) To withdraw recognition of any stock exchange in the interest of the trade.

(iii) To require every stock exchange to furnish periodical returns of day to day affairs.

(iv) To approve any stock exchange to make bye – laws.

(v) To super said the governing body of a recognized stock exchange.

(vi) To suspend the business of a any recognized stock exchange for a limited period.

(vii) To compel listing of securities by public companies.

5.1.6 Steps taken by SEBI to improve Stock Market and Capital Market

To introduce improved practices and greater transparency in the stock markets and capital markets in the

interest of healthy capital market development, a number of steps have been taken by SEBI during

recent years. The important steps are;

1. SEBI has drawn up a programme for inspecting stock exchanges. Under this programme,

inspections in of some stock exchanges have already been carried out. The basic objective of

such inspections is to improve the functioning of stock exchanges.

2. SEBI has introduced a number of measures to reform the primary market. The objective is

to strengthen the standards of disclosure, introduce certain procedural norms for the issuers and

intermediaries, and remove the inadequacies and systemic deficiencies in the issue procedures.

For example, an advertisement code has been laid down to ensure that the advertisements are fair

and do not contain statements to mislead the investors; a system of appointing SEBI

representatives to supervise the allotment process has been introduced to minimize malpractices

in allotment of oversubscribed issues; prudential norms have been laid down for rights issues,

etc.

3. The process of registration of intermediaries such as stock brokers and sub-brokers has

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been provided under the provisions of the Securities and Exchange Board of India Act,

1992. The registration is on the basis of certain eligibility norms such as capital adequacy,

infrastructure etc. According to the SEBI (Stock Brokers and Sub-Brokers) Rules 1992

announced on August 20, 1992, no person can act as a stock-broker for the purpose of

buying/selling or dealing in securities, unless he holds a certificate granted by SEBI and

conditions for grant of such certificates have been laid down in the rules. SEBI issued regulations

relating to stock-brokers and sub-brokers in October 1992 which, inter alia, cover registration of

brokers and sub-brokers, their general obligations and responsibilities, procedures for inspection

of their operations and actions to be initiated in case of default.

4. Through an order under the Securities Contracts (Regulations) Act, 1956, SEBI has

directed the stock exchanges to broad-base their governing boards and change the

composition of their arbitration, default and disciplinary committees. The broad basing of

the governing boards of the stock exchanges would help them function with greater degree of

autonomy and independence so that they become truly self regulatory organizations.

5. Merchant banking has been statutorily brought under the regulatory framework of SEBI.

The merchant bankers have to be authorized by SEBI. They will have to adhere to stipulated

capital adequacy norms and abide by a code of conduct which specifies a high degree of

responsibility towards inspectors in respect of the pricing and premium fixation of issues.

6. SEBI issued regulations pertaining to "Insider Trading" in November 1992 prohibiting

dealings, communication or counseling in matters relating to insider trading. Such

regulations will help in protecting and preserving the market's integrity, and in the long run

inspire investor confidence in the market.

7. SEBI issued a separate set of guidelines for development financial institutions in September

1992 for disclosure and investment protection regarding their raising of funds from the

market. As per the guidelines, there is no need for promoter's contribution. Besides,

underwriting is not mandatory. Moreover, free pricing is permitted subject to consistent track

record for three years and credit rating is compulsory for debentures and bonds of more than 18

months.

8. SEBI has notified the regulations for mutual funds. For the first time mutual funds are

governed by a uniform set of regulations which require them to be formed as trusts and

managed by a separate asset management company (AMC) and supervised by a board of

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trustees or trustee company. The SEBI (Mutual Fund) Regulations also provide for an approval

of the offer documents of schemes by SEBI. The regulations prescribe minimum amount to be

raised by each scheme. A close ended scheme with a fixed size of mutual fund must raise a

minimum of Rs. 20 crore and open ended scheme of Rs. 50 crore. The entire subscription

amount must be refunded within six weeks of the closure of the scheme in case the amount

collected by the scheme falls short of the prescribed amount. There will also be certain

investment restrictions for AMCs. The advertisement code prescribes norms for fair and truthful

disclosures by the mutual funds in advertisements and publicity materials. The regulations are

intended to ensure that the mutual funds grow on healthy lines and investors' interests are

protected. On January 30, 1997, SEBI allowed mutual funds to mention an indicative return for

schemes for fixed income securities with certain disclosures to draw investors' attention.

9. To bring about greater transparency in transactions, SEBI has made it mandatory for

brokers to maintain separate accounts for their clients and for themselves. They must

disclose the transaction price and brokerage separately in the contract notes issued to their

clients. They must also have their books audited and audit reports filed with SEBI.

10. SEBI has issued directives to the stock exchanges to ensure that contract notes are issued

by brokers to clients within 24 hours of the execution of the contract. Exchanges are to see

that time limits for payment of sale proceeds and deliveries by brokers and payment of margins

by clients to brokers are complied with. For ensuring the fulfilment of deals (safety of the deals)

in the market and protecting investors, SEBI has introduced capital adequacy norms for brokers.

11. The 'Banker to the issue' has been brought under purview of SEBI for investor protection.

Unit Trust of India (UTI) has also been brought under the regulatory jurisdiction of SEBI.

12. With a view to expediting the process of dematerialization of securities and settlement of

transactions in the depository, SEBI, on October 22, 1997, decided that with effect from January

15, 1998, settlement of trades in the depository would be compulsory for domestic financial

institutions, banks, mutual funds and foreign institutional investors (FIIs) having a minimum

portfolio of securities of Rs. 10 crore as on their latest balance sheet. In the interest of small

investors, SEBI has allowed investors with very small holding to sell in the stock exchange in

physical form under a special scheme. Such securities are then dematerialised by the buyers.

13. SEBI has exempted infrastructure firms from certain norms while floating a public issue.

In particular, they would be exempted from the requirements such as, making a minimum public

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offer of 25 per cent of equity, five shareholders per Rs. one lakh of offer, and minimum

subscription of 90 per cent.

14. The Companies (Amendment) Ordinance (October 31, 1998 and January 7, 1999) allows

companies to buy back their own shares subject to regulations laid down by SEBI. The new

Sections (77A and 77B) in the Ordinance lay down the provisions/restrictions concerning buy

back of shares. A company can finance its buy back out of (/) its free reserves, (ii) the securities

premium account or (Hi) proceeds of an earlier issue other than fresh issue of shares made

specifically for buy back purposes.

15. SEBI has dispensed with the requirement to issue shares with a fixed par value of Rs. 10

and Rs. 100 and has given freedom to companies to determine the par value of shares

issued by them. Companies with dematerialised shares have been allowed to alter the par value

of a share indicated in the Memorandum and Articles of Association. The existing companies,

which have issued shares at Rs. 10 and Rs. 100 can avail of this facility by consolidating/splitting

their existing shares.

16. In order to popularize the book building mechanism for public issues, SEBI modified the

existing framework for book building. It is optional for investors to use either the existing

framework or the modified framework. Public issues are now being floated by many companies

adopting the book-building route

17. SEB’s regulations for Collective Investment Schemes (CIS) were notified on October 15,

1999.4 Under the SEBI Act and Regulations framed thereunder, no person can carry on

any CIS unless he obtains a certificate of registration from SEBI. All existing collective

investment schemes were required to apply for registration by December 14, 1999. An existing

scheme which does not obtain registration from SEB shall have to wind up and repay the money

to the investors.

18. In keeping with international best practice, SEBI introduced compulsory rolling settlement

in ten select scrips on January 10, 2000. Since then more scrips have been brought under

compulsory rolling settlement in a phased manner. In June 2000, SEBI introduced derivatives

trading. The product spectrum for trading in equity derivatives was widened in 2001-02. As far

as internet trading is concerned, SEBI has prescribed minimum technical standards to be

enforced by the stock exchanges for ensuring safety and security of transactions via the internet.

19. An Ordinance promulgated on October 28, 2002 gave the following four powers to SEBI:

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(i) SEBI can search an entity's premises and seize documents; (ii) It can impound cash proceeds

and securities connected to any transaction it is investigating and can even freeze bank accounts;

(iii) Regardless of the nature or scale of market violation, SEBI could earlier fine an offender a

maximum of Rs. 5 lakh. The Ordinance increased this limit manifold — in market manipulation

or insider trading violations, to Rs. 25 crore or three time the profits made by the entity

concerned, whichever is higher and for other violations like non-disclosures, up to Rs. 1 crore;

and (iv) The size of the SEBI Board has been increased. The idea behind this is to move from

individual-based to group-based decision making, thereby reducing the possibility of errors or

bias. Moreover, insider trading and market manipulation has been defined clearly. The

Ordinance was followed by the Securities and Exchange Board of India (Amendment) Act, 2002

adopted in December 2002.

20. In November 2002, SEBI approved the establishment of a 'Central Listing Authority'

which would centralize the listing function that currently takes place at the exchange level.

21. In August 2007, SEBI decided that companies issuing debentures and the respective

debenture trustees/stock exchanges shall disseminate all information regarding debentures

to investors and general public.

22. In August 2007, SEBI issued guidelines for overseas investment by VCFs (Venture Capital

Funds).

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5.2 Trademark ACT

A trademark is a word, symbol, or phrase, used to identify a particular manufacturer or seller's products

and distinguish them from the products of another.

For example, the trademarks "Nike," along with the Nike "swoosh," identify the shoes made by Nike

and distinguish them from shoes made by other companies (e.g. Reebok or Adidas).

Similarly, the trademark "Coca-Cola" distinguishes the brown-colored soda water of one particular

manufacturer from the brown-colored soda of another (e.g. Pepsi). When such marks are used to identify

services (e.g. "Jiffy Lube") rather than products, they are called service marks, although they are

generally treated just the same as trademarks.

Trademarks make it easier for consumers to quickly identify the source of a given good. Instead of

reading the fine print on a can of cola, consumers can look for the Coca-Cola trademark. Instead of

asking a store clerk who made a certain athletic shoe, consumers can look for particular identifying

symbols, such as a swoosh or a unique pattern of stripes. By making goods easier to identify, trademarks

also give manufacturers an incentive to invest in the quality of their goods. After all, if a consumer tries

a can of Coca-Cola and finds the quality lacking, it will be easy for the consumer to avoid Coca-Cola in

the future and instead buy another brand. Trademark law furthers these goals by regulating the proper

use of trademarks.

The first trademark law in India was passed in the year 1940 and was known as the Trade Marks Act,

1940. This law was subsequently replaced by the Trade and Merchandise Act, 1958. Thereafter the

Government of India amended this Act in order to bring the Indian trademark law in compliance with its

TRIPS obligations. The new Act that was passed was the Trade Marks Act, 1999. This Act came into

force in the year 2003(15th Sept. 2003). The Trade Marks Act, 1999 and the Trade Marks Rules, 2002,

presently govern the trademark law in India.

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The Trade Marks Act, 1999

The Trade Marks Rules, 2002

5.2.1 Salient Features of The Trade Marks Act, 1999

The new Act is called the Trade Marks Act, 1999 and is governed by the Trade Marks Rules,

2002. The Act and the Rules are effective September 15, 2003.

Shape of goods, packaging and combination of colors are now included in the definition of a

trade mark.

The definition of “trade mark” has been expanded to include services as well, making service

marks registrable in India.

Classes 35 to 42 have been included in the Fourth Schedule to the Rules which read as under :

35. Advertising, business management, business administration, office functions.

36. Insurance, financial affairs; monetary affairs; real estate affairs.

37. Building construction; repair; installation of services.

38. Telecommunications.

39. Transport; packaging and storage of goods; travel arrangement.

40. Treatment of materials.

41. Education; providing of training, entertainment; sporting and cultural activities.

42. Providing of food and drink; temporary accommodation; medical, hygienic and

beauty care; veterinary and agricultural services, legal services, scientific and

industrial research, computer programming; services that cannot be classified in other

classes

It is now possible to file multiple classification applications.

The period of registration has been enhanced from 7 years to 10 years

The Register is no longer divided into Part A and Part B. A single Register of Trade Marks shall

be maintained and all Part B registrations under the previous Act shall be included in this single

Register.

The statute now recognizes “well-known trademarks” in relation to goods and services. To

qualify, the mark should be well-known to a substantial segment of the public which uses such

goods or receives such services.

Use in India is a not a pre-requisite to establish that a trade mark is well-known

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in India.

Knowledge or recognition of the trade mark in the relevant section of the

public in India including knowledge obtained as a result of promotion of the

trade mark, is sufficient to qualify a mark to be well-known. Promotion

includes advertisements, publicity and presentation at fairs or exhibitions.

Successful enforcement of a mark or pronouncement of courts on the notoriety

of the mark is another criteria to establish a mark as a well-known trade mark.

Where the trade mark is determined to be well-known in at least one relevant

section of the public in India by any court or the Registrar, the trade mark shall

be considered to be well-known under the Act and entitled to all the benefits of

a well-known trade mark.

The statute provides enhanced protection to well-known trade marks

The statute otherwise also expands protection of trade marks in general

Bad faith in adoption constitutes a ground of rejection of a third party

application.

There is a statutory presumption of likelihood of confusion on the part of the

public if a third party adopts a mark identical to a previously registered trade

mark in respect of identical goods for which the previously trade mark is

registered.

Use of registered trade mark on business paper or in advertising may also

constitute infringement. Likewise, use of a registered trade mark as a trade name

or name of a business concern dealing in goods or services in respect of which

the trade mark is registered, also amounts to infringement.

Infringement of registered trade mark may also occur by spoken use of the work

mark.

Disparaging advertising also constitutes infringement of a registered trade mark.

The Trademark Rules , 2002

The Central Government being empowered by section 157 of the Trade Marks Act, 1999, made

Trade Marks (Application and Appeals to the Intellectual Property Appellate Board) Rules, 2003

with effect from 5th December, 2003. The procedure for applications, Forms of appeals to the

Intellectual Properties Appellate Board and the procedure of verification of such applications

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were made as provision in the First Schedule to this Rule.

5.2.2 Trademark Registration

A Trade Mark is a word, phrase, symbol, device or a combination of words, symbols and devices that

identifies and distinguishes the product of one person or one origin from those of others in the market-

place.

A trade mark is a visual representation attached to goods for the purpose of indicating their trade origin.

Trade Mark is defined as a mark capable of being represented graphically and which is capable of

distinguishing the goods or services of one person from those of others and may include shape of goods,

their packaging and combination of colors.

Unregistered Trademark

A trade mark may be registered or unregistered. An unregistered trademark is called common law mark.

Besides, the proprietor of an unregistered trademark shall not be entitled to institute any proceeding to

prevent, or to recover damages for, the infringement of an unregistered trademark. However, such

proprietor of unregistered trade mark shall have common law rights to take action against another person

for passing off goods as goods of another person or the remedies in respect thereof.

5.2.3 Functions of Trademark

A trade mark serves the purpose of identifying the source of origin of goods. Trade Mark performs the

following four functions

It identifies the product and its origin.

It guarantees its quality.

It advertises the product. The trade mark represents the product.

It creates an image of the product in the minds of the public particularly consumers or the

prospective consumers of such goods.

5.2.4 What cannot Register as Trademarks?

Trademark applications are filed in the name of the owner of the said mark, who can be,

An individual, partnership, body corporate, society, trust or any other body, which uses or

controls the use of the mark, and which determines the nature and quality of the goods/ services

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for which the trademark is to be used

Trademarks are granted not only to Indian citizens; applicants of any nationality can apply

5.2.5 Characteristics of A Good Trademark

The Trade Mark should be distinctive. Most of the trade marks acquire distinctiveness through

use.

It must be easy to spell correctly and write legibly.

It should appeal to the eye as well as the ear.

The trade mark should preferably be an invented word. In fact, the best trade mark are invented

words

It should satisfy the requirements of registration.

The trade mark, if a word or name, should be easy to pronounce and remember.

It should not belong to the class of marks prohibited for registration.

In case of device mark, the device should be capable of being described by a single word.

It should be short

It should not be descriptive but maybe suggestive of the quality of goods.

5.2.6 INFRINGEMENT OF A TRADE MARK

Trademark infringement is a violation of the exclusive rights attaching to a trademark without the

authorization of the trademark owner or any licensees (provided that such authorization was within the

scope of the license). Infringement may occur when one party, the "infringer", uses a trademark which is

identical or confusingly similar to a trademark owned by another party, in relation to products or

services which are identical or similar to the products or services which the registration covers. An

owner of a trademark may commence civil legal proceedings against a party which infringes its

registered trademark.

Infringement generally The Trade Marks Act 2002 sets out certain acts which, if done without the

authorization of a registered trade mark owner, will infringe a registered trade mark. These are use of:

A sign identical to the registered trade mark on or in relation to identical goods and/or services

to those covered by the registration;

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A sign identical to the registered trade mark on or in relation to similar goods and/or services to

those covered by the registration, if such use would be likely to deceive or cause confusion; or

A sign similar to the registered trade mark on or in relation to any identical or similar goods

and/or services, if such use would be likely to deceive or cause confusion;

A sign identical or similar to the registered trade mark in relation to any goods and/or services

which are not similar to those covered by the registration, where the registered trade mark is well

known in New Zealand and use of the sign takes unfair advantage of, or is detrimental to, the

distinctive character or the repute of the mark.

Infringement Occur when someone else uses a trademark that is same as or similar to your registered

trademark for the same or similar goods/services. Trademark infringement claims generally involve the

issues of likelihood of confusion, counterfeit marks and dilution of marks. Likelihood of confusion

occurs in situations where consumers are likely to be confused or mislead about marks being used by

two parties. The plaintiff must show that because of the similar marks, many consumers are likely to be

confused or mislead about the source of the products that bear these marks.

Case-: In Ranbaxy Laboratories Ltd. Vs. Dua Pharmaceuticals Ltd.2, the plaintiff company

manufactured drugs under the trade name "Calmpose". The defendant company subsequently floated its

similar product under the trademark "Calmprose". The said two trademarks having appeared

phonetically and visually similar and the dimension of the two strips being practically the same

including the type of packing, the colour scheme and manner of writing, it was found to be a clear case

of infringement of trade mark and the ad interim injunction granted in favor of the plaintiff was

accordingly made absolute.

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Defences / Prevent to trade mark infringement

The Trade Marks Act 2002 sets out a number of defences to trade mark infringement. These include:

ation to spare parts or accessories;

mark and any use of the registered mark by the trade mark owner;

ce with honest practices of a name or place of a business or to describe the character

or quality of goods and services; and/or

Whether or not these defences will succeed will depend on the facts in each case.

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5.3 INFORMATION TECHNOLOGY ACT

An Act to provide legal recognition for transactions carried out by means of electronic data interchange

and other means of electronic communication, commonly referred to as “electronic commerce”, which

involve the use of alternatives to paper-based methods of communication and storage of information, to

facilitate electronic filing of documents with the Government agencies and further to amend the Indian

Penal Code, the Indian Evidence Act, 1872, the Banker's Books Evidence Act, 1891 and the Reserve

Bank of India Act, 1934 and for matters connected therewith or incidental thereto.

The Information Technology Act, 2000 also aims to provide the legal framework under which legal

sanctity is accorded to all electronic records and other activities carried out by electronic Information

Systems 10.2 Control and Audit means. The Act states that unless otherwise agreed, an acceptance of

contract may be expressed by electronic means of communication and the same shall have legal validity

and enforceability.

5.3.1 THE IT ACT 2000 AND IT’S OBJECTIVES

This is an Act to provide legal recognition for transactions carried out by means of electronic data

interchange and other means of electronic communication, commonly referred to as "electronic

commerce", which involve the use of alternatives to paper-based methods of communication and storage

of information, to facilitate electronic filing of documents with the Government agencies and further to

amend the Indian Penal Code, the Indian Evidence Act, 1872, the Bankers' Books Evidence Act, 1891

and the Reserve Bank of India Act, 1934 and for matters connected therewith or incidental thereto.

Objectives of the Act are:

To grant legal recognition for transactions carried out by means of electronic data interchange

and other means of electronic communication commonly referred to as“electronic commerce” in

place of paper based methods of communication;

To give legal recognition to Digital signatures for authentication of any information or matter

which requires authentication under any law.

To facilitate electronic filing of documents with Government departments.

To facilitate electronic storage of data.

To facilitate and give legal sanction to electronic fund transfers between banks and financial

institutions.

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To give legal recognition for keeping of books of accounts by banker’s in electronic form.

To amend the Indian Penal Code, the Indian Evidence Act, 1872, the Banker’s Book Evidence

Act, 1891, and the Reserve Bank of India Act, 1934.

Detail regarding Information technology act one PDF file is attached.

---------------------------------------------------------------------------------------------------------------------------

MFC –IV- Semester

Paper - (BCL)-4.5 (2010)

1. Define contingent contract. How it differ from wagering agreement? Discuss how far the

contingency may be dependent on the act of the party?

Or

What is negotiation? State the difference between negotiation and assignment. Explain and

illustrate the various classes of endorsements.

2. Critically examine the role of the competition commissioner of India in prohibiting

anticompetitive practices in the country.

Or

Who is a consumer as per consumer protection Act? Discuss the three tier consumer grievance

redresal system as per the act.

3. Define sickness as per the SICA. Trace out the procedure followed by SICA in addressing the

issue of sickness in India?

Or

What is Memorandum of Association? Discuss the objective and contest of Memorandum of

Association. How it differ from Articles of Association?

4. “EXIM policies of India since 1991 are not so effective in promoting export “Comment.

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Or

Discuss the various accounts that can be opened by foreign nationals in and outside India?

5. Explain the objectives behind formation of SEBI. Discuss the various functions performed by

SEBI.

Or

What is a trade mark? How can you register a trade mark? What happen if the trade mark is

infringed?

Paper - (BCL)-4.5 (2012)

1. State the instruments which are chargeable to stamp duty. Who should pay the stamp duty? What

is the basis of payment of stamp duty?

Or

a)”contract without consideration is void”-Comment.

b) Differentiate between three types of negotiable instruments with their relative applicability.

2. Critically examine the superiority of the competition act over MRTP Act? What do you mean by

presumed anti competitive practices and “abuse of Dominant position”

Or

a) Define the term “consumer” and “service” under consumer protection Act.

b) What do you mean by infringement of patent?

3. An industrial union in your locality has been declared sick. How sick industries companies Act

will help it to get revived? Discuss the procedure followed by SICA?

Or

Under what circumstances, a workman is eligible for compensation under workmen

compensation act? Find out the compensation amount as applicable under the act?

4. Discuss the reason for which FERA has been replaced by FEMA. What are the penalties

provisions included in the FEMA Act.?

Or

Trace out the importance of new EXIM Policy. How that Policy is Beneficial in improving upon

the Export performances of your country?

5. Examine the role of SEBI in protecting the interest of Small investors in your country?

Or

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Discuss the procedure of registration and protection of trade mark as per Trade Mark Act.

THIS IS THE MOST EXPECTED QUESTIONS FOR YOUR UPCOMING MFC-4TH

SEM

EXAM.THIS DOESN’T MEAN YOU WILL GET ALL THE QUESTION OUT OF THIS

SELECTION ONLY IN YOUR MFC-4TH

SEM EXAM

By

Mr. RASHMIRANJAN PANIGRAHI

Lecturer in Finance , ASMIT

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