ISSN 0972-2874

VOLUME NO. XXIII 12 DECEMBER 2006

EDITORIAL ADVISORY CENTRAL COUNCIL

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Edited, printed and published
(In alphabetical order) PREETI MALHOTRA (MS.) by N.K. Jain for the Institute of
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H I G H L I G H T S
l From the President 03
l Academic Guidance 05
l Legal World 20
l Students Services 23
l Schedule of Academic Development Programmes 28
l Schedule of Training Orientation Programme 28
l Students Quiz 30
l News and Announcements 32
l 35 Years of CS on CD-ROM 40

Student Company Secretary 1 December 2006

 TRAINING ORIENTATION PROGRAMME
As per Company Secretaries Regulations, 1982 (amended
from time-to-time) every student apart from passing the final
examination of the Institute is also required to possess the
practical experience and undergo practical training or be
exempted therefrom before becoming eligible to the Associate
Membership of the Institute. Students who do not possess
practical experience are required to undergo compulsorily 15
months Management/Apprenticeship training.
Most of the students commencing training are not aware of
the significance and methodology of training, business
environment, corporate culture, communication and
behavioural aspects. Keeping in view the above factors, the
Council of the Institute has decided that students requiring to
undergo training should compulsorily attend five days Training
Orientation Programme (TOP) before they are sponsored for
training. It has also been decided that henceforth students
will be sponsored for training in the companies or with company
secretaries in practice as per the following schedule.

Activities Session1 Session 2 Session 3 Session - 4

Registration of students January 1 to March 01 to June 01 to September 01 to
for 15 months Training January 10 March 10 June 10 September 10
Organisation of TOP January 15 to March 15 to June 15 to September 15 to
January 24 March 24 June 24 September 24
Campus Interview January 25 to March 25 to June 25 to September 25 to
January 31 March 31 June 30 September 30
Commencement of February 01 April 01 July 01 October 01
Training Onwards Onwards Onwards Onwards
Completion of April 30* June 30* September 30* December 31*
Training Next Year Next Year Next Year Next Year
* If the student avails extra leave, the training will be extended accordingly.
Training Orientation Programme is a part of the 10. Usefulness of reading newspapers
Management/Apprenticeship training and is based on Guru 11. Self-assessment
Shishya Parampara. Training Orientation Programme will not SWOT analysis
only expose the students to the business environment and Career prospects
corporate functioning but would also help them in acquiring
Personality
the desired skill and confidence.
12. Writing of curriculum vitae
The Regional Councils will organize the Training Orientation
Programme from 15th to 24th of the four fixed months i.e. 13. Interview Techniques
January, March, June & September. 14. Career Planning
For effective interaction and participation, not more than 15. Computer-Internet/E-mail
40 students would be enrolled in each TOP. A fee of Rs. 400/ 16. File management
- per participant will be charged. 17. Organisation structure, role and functioning of Competition
The following topics will be included in the programme : Commission of India, CLB/NCLT, ROC, Stock Exchange,
SEBI, RBI, DRT
1. Importance of Training
18. Usefulness of Professional Development Programmes.
2. Personality Development- Dress Code & How to carry
oneself 19. Code of Conduct
20. Future Prospects
3. Time Management
For helping the students to identify Companies or Company
4. Meaning of Professionals
Secretaries in practice for undergoing training, the Regional
5. Office Culture Councils would also arrange Campus Interviews, immediately
6. Communication Skill on conclusion of each TOP for on-the-spot selection of
Writing ability candidates. Such Campus Interviews will be organized during
Drafting of letters the four fixed months from March 25 to 31; June 25 to 30;
Speaking ability September 25 to 30 and January 25 to 31.
All students intending to commence Management/
7. Group discussion, Drafting of Minutes, Notices,
Apprenticeship training are advised to contact the respective
Resolutions etc.
Regional Councils for enrolling themselves for TOP. Only on
8. How to qualify professional examination successful completion of TOP, students would be sponsored
9. Managing under crisis for training by the Institute.

Student Company Secretary 2 December 2006

 FROM THE PRESIDENT

The test of a first-rate intelligence is the ability to hold

two opposed ideas in mind at the same time and still retain the ability to function.
F. Scott Fitzgerald
Dear Students,
You are the master architect of your professional career and to remain competitive in the global market place, you have to be
always on the learning curve and continuously move up keeping track of legislative reforms, technical developments and
changes in the business world, understanding their impact on your professional duties and responsibilities and successfully
emerging as professionals par excellence right at the point of your completing the Company Secretaryship Course.
As the time is fleeting, you must be earnestly busy in preparing for the December 2006 examinations. I am confident that you
must have made thorough preparations to achieve the desired success. Wishing you good luck for the examinations, my
advice to all of you is: be positive, consistent and composed while writing the examinations. You should be fully confident and
equipped in terms of subject clarity, latest amendments, legal decisions and legal provisions. Moreover, communicate your
answers effectively giving proper explanations and quote relevant legal provisions wherever necessary. Further, I would like
to reiterate that you should lay emphasis on improving your communication skills. Needless to mention that in professional
examination, standards set are high and the expectations from the candidates are equally on the higher pedestal. So you are
expected to be well-versed in terms of knowledge and writing as well as in presentation skills.
Friends, the Institute is constantly making efforts to seek new recognitions for the CS qualification. In this context, I am
pleased to inform you that University of Bikaner, Rajasthan has accorded recognition to Company Secretaryship qualification
as equivalent to Post Graduate Degree for the purpose of registration for Ph.D in the disciplines of Commerce/ Management/
Law. Osmania University, Hyderabad has accorded recognition to the CS qualification as equivalent to M.Com Course and
treated it as allied to MBA for the purpose of pursuing Ph.D in Business Management.
As you are already informed, in pursuit for excellence and to identify, foster and reward the culture of evolving globally
acceptable standards of Corporate Governance among Indian companies, the Institute instituted the ICSI National Award for
Excellence in Corporate Governance in the year 2001. Likewise, this year also the Institute started the process of organizing
the ICSI National Award for Excellence in Corporate Governance, 2006. In this context, the Jury consisting of corporate
leaders and eminent personalities under the Chairmanship of Honble Justice Shri V N Khare, Former Chief Justice of India,
met on November 11, 2006 to decide the winners of the ICSI National Award for Excellence in Corporate Governance and
Life Time Achievement Award for Translating Excellence in Corporate Governance into Reality. The function to confer the
Awards for the year 2006 has been scheduled on December 23, 2006 at ITC Hotel Park Sheraton and Towers, TTK Road,
Alwarpet, Chennai. The Award Function will be preceded by a Panel Discussion on Corporate Governance for Corporate
Performance. Shri T S Krishna Murthy, Chief Election Commissioner of India (Retd.), has very kindly consented to be the
Moderator and Shri Arun Jain, Chairman & Managing Director, Polaris Software Lab Limited, Dr. K. C. Chakrabarty, Chairman
& Managing Director, Indian Bank, Shri K. Raghavendra Rao, Managing Director, Orchid Chemicals & Pharmaceuticals Ltd.,
Shri L. Lakshman, Chairman & Managing Director, Rane Holdings Limited, Shri Rajnikant Patel, Managing Director & CEO,
Bombay Stock Exchange Ltd. have agreed to be the panelists.

Student Company Secretary 3 December 2006

Friends, I am pleased to inform you that the Institute celebrated its Foundation Day on December 4, 2006 at Scope
Convention Centre, Scope Complex, Lodi Road, New Delhi. Shri Wajahat Habibullah, Chief Information Commissioner,
Central Information Commission, delivered the Foundation Day Lecture on the theme Promoting Professionalism Through
Right to Information Act.
In his opening remarks, he quoted Mahatma Gandhi as saying that the real Swaraj will come not by the acquisition of
authority by a few but by the acquisition of capacity by all to resist authority when abused. Referring to Right to Information
Act, he said democracy required an informed citizenry and transparency of information which were vital to its functioning and
also to contain corruption and to hold governments and their instrumentalities accountable to the governed.
Shri Wajahat Habibullah analysed and explained the important provisions of the Right to Information Act and enlightened the
audience by quoting various decisions of the Commission involving issues that have cropped up on the subject so far.
While concluding his address, he quoted the decision of the Supreme Court in State of U.P v Raj Narain wherein the
Supreme Court observed that The people of this country have a right to know every public act, everything that is done in a
public way, by their public functionariesto cover with veil of secrecy the common routine business, is not in the interest of
public.
On this note, I would like to conclude by stating that there is no alternative to diligence. Success always touches the feet of
those who strive hard. Always aim at achieving excellence in every task you undertake.

With best wishes,

Yours sincerely,

Kolkata (H M Choraria)
December 13, 2006 choraria123@vsnl.net

Student Company Secretary 4 December 2006

 ACADEMIC GUIDANCE
ACADEMIC GUIDANCE
STUDY UPDATES
HUMAN RESOURCES MANAGEMENT
AND INDUSTRIAL RELATIONS
RELATIONS
(HRMIR)
MOTIVATION AND MORALE; CREATING CONDUCIVE
WORKING ENVIRONMENT1
(Lesson No. 7 (Part A)
To be incorporated in the study Material)
MOTIVATION AND MORALE
Motivation is the force that drives a person to action. Motivation
is an important function which a manager has to perform for getting
things done from his employees. Managers orders and instructions
carry no meaning unless they are effectively followed and
implemented by their subordinates. The subordinates shall follow
these instructions only if they are both able and willing to do so. The
creation of willingness in the subordinates to perform tasks that will
lead to achievement of organisatonal goals is motivation. The
purpose of motivation is to create conditions in which people are
willing to work with zeal, initiative, interest and enthusiasm so that
the goals of an organization are achieved effectively.
Motivation is a complex task because the factors that motivate
an individual to work are themselves very complex and complicated.
Financial incentives may be important for one worker while non -
financial incentives may be important for the other. The manager
must, therefore, be well equipped in the skills of determining as to
what motivates the human behaviour. In fact, motivation is an aspect
of management where managers themselves need to be trained
before they motivate their subordinates to execute the organizational
tasks as per their orders and direction.
Motivation has been defined by various management thinkers.
Some of the definitions are given below:
Scott: Motivation is a process stimulating people to action to
accomplish desired goals.
Gibson: Motivation may be defined as the state of individuals
perspective which represents the strength of his or her propensity
to exert effort toward some particular behaviour.
Weihrich and Koontz: Motivation is a general term applying to
the entire class of drives, desires, needs, wishes, and similar forces.
To say that managers motivate their subordinates is to say that they
do those things which they hope will satisfy these drives and desires
and induce the subordinates to act in a desired manner.
Steers and Porter: Motivation is the force that energizes
behaviour, gives direction to behaviour and underlines the tendency
to persist.
FEATURES OF MOTIVATION
The definitions of the motivation discussed above highlight an
important aspect of motivation; that it is the internal need of the
human being that activates his behaviour in a given direction in the
hope of some reward (financial or non financial). The main features
of motivation are:
l It results from a felt need. Motivation triggers behaviour impel-
ling a person to action.
1. Prepared by Archana Kaul, Assistant Director, ICSI.
Student Company Secretary
l It is goal oriented. Motivation is a driving state that channels
behaviour in to a specific course that is fulfillment of a felt need.
l
It sustains behaviour in progress. It persists until the satisfac-
tion or reduction of a need state occurs.
Further, motivation is a personal and internal feeling. The feeling
arises from needs and wants. Human needs are unlimited. Fulfillment
of one set of needs gives rise to other needs. Therefore, motivation
is a continuous process. Since needs are interrelated, a person
cannot be partly motivated as he is a self contained and inseparable
unit.
IMPORTANCE OF MOTIVATION IN MODERN
ORGANIZATIONS
The success of an organization ultimately depends on how
effectively mangers are able to motivate their subordinates. Effective
motivation succeeds not only in having an order accepted but also
in gaining a determination to see that it is fulfilled efficiently and
effectively. In the words of Allen, poorly motivated people can nullify
the soundest organization. The following points bring out the
importance of motivation in modern organizations:
a. Productive use of resources: Modern organizations work
through physical, financial and human resources. The uti-
lization of physical and financial resources depends on
the willingness of people to work. Motivation enables peo-
ple to convert physical and financial resources into useful
products. It helps management to get the best out of hu-
man as well as non-human resources.
b. Increased efficiency and output: Motivation enables peo-
ple to work enthusiastically. As we all know, performance
is a product of not merely ability to do a task but the will-
ingness to do the same with zeal and enthusiasm. Moti-
vation bridges the gap between the ability to work whole-
heartedly, to increase the overall efficiency and output.
Thus, ultimately, helps in reducing the cost of operations.
c. Achievements of goals: Motivation causes goal-directed
behaviour. It helps people to move in a desired direction
and earn rewards. In organizations where managers try
to understand the need of employment and institute ap-
propriate incentive systems, accomplishment of goals is
very easy. If people are not properly motivated, no useful
purpose can be served by planning, organizing and staff-
ing functions.
d. Development of friendly relationships: Motivation brings
employees closer to the organization. The needs of em-
ployees are met through attractive rewards, promotional
opportunities, etc. Employees begin to take more interest
in organizational work. Their morale is high. They begin
to think that the enterprise belongs to them and the inter-
ests of the enterprise are their interest and there is no
difference between them. This helps in developing cor-
dial relations between management and workers.
e. Stability in workforce: Attractive motivational schemes
satisfy the needs of employees. As a result, commitment
to organizational work increases.
Employees do their tasks loyally and enthusiastically. They are
not tempted to leave the organization. This means reduced employee
turnover. Further, satisfaction on the job means reduced
absenteeism. Employees attend to their work regularly and sincerely
so as to earn rewards. The organization benefits because it is able
to maintain a stable workforce. The skill and competence of
employees continue to be available to the organization. This
enhances the image of the firm and helps it to secure the service of
competent people.
5 December 2006
 S e lf
A c tu alis atio n
N e ed

E s te em N e e d

L ov e N ee d

S a fe ty N ee d s

P h ys iolog ic al N e ed

S tren gth o f N ee d

Figure 2
 ACADEMIC GUIDANCE
IMPORTANT THEORIES OF MOTIVATION
Approaches understanding motivation differ because many
individual theorists have developed their own views and theories of
motivation. They approach motivation from different starting points,
with different ideas in mind and from different backgrounds. Some
important theories are explained below.
(a) Maslows Need Hierarchy Theory: An understanding of hu-
man needs and the role played by them in directing and
shaping peoples behaviour is absolutely essential for se-
curing the desired motivation. Maslow2 , a psychologist,
developed a theory of motivation based on human needs
arranged in a particular order from the lower to the higher.
The hierarchy of needs of motive suggested by Maslow
may be shown in the following diagram and analysed in
the following manner.
S e lf
A c tu alis atio n
N e ed
E s te em N e e d
L ov e N ee d
S a fe ty N ee d s
P h ys iolog ic al N e ed
S tren gth o f N ee d
Figure 2
1. Physiological Needs: These are needs for food, water, air, cloth-
ing, shelter, rest etc. Physiological needs are the basic needs
of the organism and are essential for survival. Until such needs
are reasonably well satisfied, they remain strong, driving forces.
2. Safety Needs: Safety needs represent the second level in
Maslows need hierarchy. These relate to protection against
danger, threat and deprivation. Safety needs are more impor-
tant when a man is in a dependent relationships and fears ar-
bitrary deprivation. Since people in the organisation stand in
dependent relationship, safety needs become important in in-
formal structure.
2. A.H. Maslow, Motivation and Personality.
Student Company Secretary
Safety needs are very closely related to physiological needs;
both the needs seek continuation. Like physiological needs, safety
needs are also powerful motivators to a certain level of satisfaction
and beyond that these become insignificant. If a subordinate
provided with too much of security it may even cause loss of initiative
and creativity on his part. People therefore, need to be provided
with security up to a limit.
3. Social Needs: Next in order are the social needs. When physi-
ological and safety needs are fairly satisfied, safety needs be-
come powerful motivators. These needs are what Maslow calls
the love and affection and belongingness need.
Man is a social animal. He cannot live in isolation. While working
in a formal structure of authority-responsibility relationships, he tends
to develop a feeling of affection and respect not only for his superiors
but also for his fellow workers. He gradually becomes a part of the
informal groups which exist in the organization. In fact, the very
formation of informal groups is based upon the peoples desire to
satisfy their social needs. Man wants to share his thoughts and
feelings with others and, therefore, the need to interact with others
arises. He wants to love and respect others in turn, wants to be
loved and respected by others. Harmonious relationships amongst
those working in an organization, good natured fellow workers and
a healthy work environment can be the suitable motivators that
satisfy the social needs of an individual.
4. Ego Needs: Once physiological, safety and social needs are well
satisfied, ego needs become more important to management
and to the individual himself. Ego needs are of two kinds:
(i) Needs relating to ones self-esteem such as self-respect,
self-confidence and achievement.
(ii) Needs relating to ones reputation such as status, recog-
nition, prestige and attention.
Ego needs become powerful motivators only when all the three
lower order needs are reasonably satisfied. However, unlike
physiological, safety and social needs, ego needs can rarely be
satisfied so well, and people seek more satisfaction of these needs.
Another problem with ego needs is that since these relate to very
personal motives of individual, organisations can afford somewhat
limited avenues for their satisfaction.
Ego needs relating to reputation as outlined above may be
satisfied through promotions and allotment of status symbols to
deserving individuals in the organisation. Ego needs relating to self-
esteem may be satisfied by assigning challenges and stimulating
work the accomplishment of which will result in recognition. A feeling
should be inculcated in the subordinate that he is doing a useful job
and the job is important to the organisation.
5. Self-Actualisation Needs: These are the needs of an individual
to develop himself to the maximum of his potential. These
needs are placed at the top of the need hierarchy. There is a
strong desire of acquiring a sense of achievement and compe-
tence in every person which presents itself only after the above
four needs have been satisfied. These are the needs of be-
coming what one really wants to become. People with strong
self-actualisation needs do not wait for things to happen; they
in fact, make things happen. The inner desire to become a
doctor or an engineer or a professor or a social reformer and
actually becoming one is the satisfaction of self-actualisaiton
need. The personal and professional growth and achievement
are the motives that spark the self-actualisation needs of an
individual.
Providing challenging jobs, creating opportunities for innovation
and growth and allowing employees to participate in the managerial
6 December 2006
 ACADEMIC GUIDANCE
decision-making processes are the motivators that satisfy these
needs of an individual.
Maslows need hierarchy theory of motivation has been criticised
on the ground that it leaves no room for difference between the
individuals. For one individual, self-actualisation might be the
dominant motive guiding a large part of his behaviour, and for another
individual working under essentially the same circumstances, it may
not be so. That is, two individuals whose needs for say, food, safety
and belonging are fairly well satisfied may not necessarily be
motivated to the same extent by egoistic or self-actualisation needs.
In one study3 conducted to determine whether an increase in the
satisfaction of the type of needs serves to strengthen motives at a
higher level, it was found that no evidence in support of the theory
existed. Thus, Maslows need hierarchy is yet to gain much of the
research support.
(b) The Theory of Douglas McGregor: The late Douglas McGregor
has applied the fundamental content of the theory of Maslow
to leadership and management theory. There are certain con-
ventional assumptions relating to motivation of people in the
organisations that are widely accepted as valid even though
these provide only a part of the answer. These assumptions
are termed by McGregor as Theory X. The important assump-
tions underlying this theory are as follows:
(i) The average man by nature is indolent and has an inher-
ent dislike for work; he will not work if possible.
(ii) Dislike for work implies that people require to be directed
and controlled through active intervention by management.
(iii) It also implies that they must be persuaded, rewarded,
punished and threatened with sanctions so that they put
in sufficient efforts for accomplishing organisational ob-
jectives.
(iv) Man is inherently resistant to change and passive to or-
ganisational needs.
(v) He lacks ambition, avoids responsibility and prefers to be
led.
The above assumptions guide management behaviour and
thinking. There are managers who follow the hard approach
involving coercion and threat (usually disguised), and close
supervision and control in dealing with their subordinates.
Management can even be soft attempting to direct by being
permissive, i.e., relationship-oriented and satisfying peoples
immediate needs. Hard approach often leads to consequences like
restriction of output, militant unionism, antagonism and attempts to
thwart management objectives. Soft approach, on the other hand,
may lead to indifferent performance and abdication of management
in favour of harmony. People may, at times, develop the habit of
expecting more and giving less.
A fundamental opposition of Theory X is that it is inadequate to
consider the subject of motivation. It is to acknowledge that satisfied
need ceases to motivate any individual further. Since there exists
hierarchy of needs, man moves from satisfaction of lower needs to
the satisfaction of higher needs. Once physiological and safety needs
are satisfied, social needs, ego needs and need for self-actualisation
respectively become the most important motivators. Management
by direction and control (Theory X), regardless of its hard or soft
approach, is ineffective to motivate people whose important needs
are social and egoistic. Once lower order needs are satisfied,
3. D.T. Hall K.K. Naougain An Examination of Maslows Need Hierarchy in an
organisation. Organisational Behaviour and Human Performance, Vol. 3
(1968), Quoted by John B. Miner in Management Process-Theory, Research
and Partice.
Student Company Secretary
rewards, promises, incentives, or threats and coercion the devices
used by management under Theory X, cease to motivate people.
Having established the inadequacy of Theory X, McGregor
suggested a different theory of managing people based on more
adequate assumptions about human nature and motivation. He
labelled that attitudinal pattern of managers as Theory Y. The
important assumptions of Theory Y, described by McGregor are:
(i) Man is not inherently passive or resistant to organisational
needs.
(ii) Incentive, threat, or external control are not the only means of
motivating people to work for organisational objects.
(iii) The motivation, the potential for development, the capacity
for assuming responsibility, the readiness to direct behaviour
towards organisational objectives are all present in people. Man-
agement does not put them there. It is the responsibility of
management to make it possible for people to recognise and
develop these human characteristics for themselves.
(iv) Under proper organisational conditions and methods of opera-
tion, man will exercise self-control towards achieving his own
goals and those of the organisation.
The fundamental implication of Theory Y is that full advantage
of the personal and professional potential of employees can be taken
by motivating them to accept organisational objectives, more
particularly when their physiological and safety needs are well
satisfied. Besides, it is also true that Theory Y makes use of the
motivational techniques that are precluded by Theory X-the socio-
psychological restraints imposed by it. However, after generations
of adherence to the conventional organisational theory, shifting to
Theory Y is by no means an easy task.
In view of the above, Theory Y is preferable. However, it has to
be applied gradually. The basic problem in most of the organisations
is that of securing commitment of workers to accomplish
organisational goals. Workers commitment is directly related to the
satisfaction of their needs. Theory Y places emphasis on the
satisfaction of the needs of the workers and it does not rely heavily
on the use of authority as an instrument of command and control. It
assumes that workers exercise self-direction and self control in the
realisation of the goals to which they feel themselves committed.
Because of these reasons, Theory Y is realistic and frequently
used at different levels in most of the organisations.
THEORY Z
William Ouchi in early 80s proposed Theory Z, after making a
comparative study of American and Japanese management
practices. The Theory which is an integrative model containing the
best of both worlds, takes into account the strengths of Japanese
Management (social cohesion, job security, concern of employees)
as well as American Management (speedy decision making, risk
taking skills, individual autonomy, innovation and creativity) and
proposes a mixed US- Japanese Management system for modern
organization.The mixed/hybrid system has the following
characteristics:
Trust: The building blocks of Theory Z are trust and openness.
Trust, according to Ouchi, means trust between employees,
supervisors, work groups, management, unions and government.
The organization must work toward trust, integrity and openness.
In such an atmosphere, the chances of conflict are reduced to the
minimum
Organisation-Employee Relationship: Theory Z makes a zealous
plea for strong linkages between employees and the organization.
It argues for life time employment for people in the organization. To
ensure stability of employment, managers must make certain
7 December 2006
 ACADEMIC GUIDANCE
conscious decisions. As for instance, when there is a situation of
lay-off, it should not be followed and instead, the owners/
shareholders may be asked to bear with the losses for a short while.
To prevent employees from reaching a plateau promotions may be
slowed down. Instead of vertical progression, horizontal progressions
may be encouraged at various levels. Career paths for employees
must be laid down clearly so that employees are aware of what they
can achieve and to what extent they can grow within the organization,
over a period of time.
Structureless Organization : Ouchi proposed a structureless
organization-run, not on the basis of formal relationship,
specialization of positions and tasks but on the basis of teamwork
and understanding. He has given the example of a basketball team
which plays together, solves all problems and gets results without a
formal structure. Likewise in an organization the emphasis must
be on teamwork and cooperation, on sharing of information,
resources and plans at various levels without any friction. To promote
a system thinking among employees, they must be asked to take
turns in various departments at various levels; how their work affects
others or is affected by others. It also makes the employees realize
the meaning of words such as reconciliation adjustment give and
take, in an organisation.
Holistic Concern for Employees: To obtain commitment from
employees, leaders must be prepared to invest their time and
energies in developing employees skills, in sharing their ideas openly
and frankly, in breaking the class barriers, in creating opportunities
for employees to realize their potential. The basic objective must
be to work cooperatively, willingly and enthusiastically. The attempt
must be to create a healthy work climate where employees do not
see any conflict between their personal goals and organisational
goals.
(c) Herbergs Motivation-Hygiene Theory: This is also known as
the two factor theory and was developed by Frederick Herzberg.
He conducted a large number of interviews with a view to de-
termining the attitude of people towards their job. Those inter-
viewed were asked to describe when they felt good about their
job and when they had bad feelings about their job. It was ob-
served from the study that good feelings were generally re-
lated to intrinsic or job content factors, such as achievements,
recognition of achievement, the work itself, advancement, giv-
ing of responsibility, and the potential for growth. Since these
factors contribute to good feelings and simulate people for better
performance these are also described as the motivators.
It was also found that bad feelings about the job were for most
part related to context factors, such as company policy,
administration and supervision, interpersonal relations with peers,
interpersonal relations with subordinates, working conditions, pay
increases, the status situation, and job security. Context factors are
also known as extrinsic or hygienic factors.
The two-factor theory reinforces the belief that motivators are
the source of job satisfaction as well as effective role behaviour.
Since hygiene factors are fond related to job dissatisfaction,
management should not attempt to motivate people through these
factors. Intrinsic factors, on the other hand, are positively related to
job satisfaction and thus deserve close management attention.
Management should, therefore, attempt to make the job more
meaningful and satisfying.
In several respects the two-factor theory is closely related to the
need hierarchy approach to motivation. The extrinsic factors are
like the Maslows low-level physiological and safety needs, and must
be dealt first if dissatisfaction is not to cause difficulties. The content
factors of motivation hygiene theory of Herzberg roughly approximate
the higher level needs under Maslows need hierarchy system.
Student Company Secretary
Comparison of Maslows and Herzbergs Theories of Motivation
MASLOWS NEED HERZBERGS TWO-FACTOR
HIERARCHY THEORY
Self-actualisation Challenging work
Motivators
Achievement
Growth in the job
Responsibility
Esteem or status Advancement
Recognition Status
Affiliation or acceptance Interpersonal relations
Company policy and
administration
Maintenance
Quality of supervision
Factors
Security or Safety Working conditions
Job security
Physiological needs Salary
Personal life
Herzbergs theory assumes that intrinsic and extrinsic factors
produce altogether different motivational effects - positive and
negative. The said proposition is generally supported when the
critical incident method as used by Herzberg in developing the theory
is employed to test it. However, other research approaches fail to
confirm the theory4 . A given factor may be a source of satisfaction
for one person and dissatisfaction for another. Thus, individual
variations underlying motivational aspect of human behaviour are
not taken due cognizance of by this theory.
(e) McClellands Needs Theory of Motivation: David McClelland of
Harvard University and his co-workers have looked at certain
peculiar motivating needs of the people in many cultures and
many sections of the society. On the basis of their research,
they have grouped the responses into three categories each
representing an identifiable human motive or need. These are
need for power (n/PWR), need for affiliation (n/AFF), and need
for achievement (n/ACH). Most people have some concern for
each of these needs in their thoughts, but seldom, in the same
strength.
(i) The need for power: According to McClellands tests, most
managers have high need for power which, in turn leads
to constructive authoritarianism. The need, combined with
need for achievement or urge for excellence, can lead to
productive and satisfying results.
(ii) The need for affiliation: People with a high need for affilia-
tion usually derive pleasure from being loved and tend to
avoid the pain of being rejected by a social group. These
sort of people are often seen as ineffective go-getters prob-
ably because they are not task-oriented enough. This need
is present in most managers, but is seldom dominant in
successful individuals.
(iii) The need for achievement: People with a high need for
achievement like personal responsibility, moderate and
calculated risks, feedback on how they are doing. Unless
moderated by other needs, a high-achiever tends to
become individualistic to surpass others and succeed in
any organisation.
4. R.J. House & L.A. Vigdor, Herzbergs Dual-Factor Theory of Job Satisfaction
and Motivation; A Review of the Evidence and A criticism, in Personal Psy-
chology, Vol. 20 (1967), quoted by John BN. Miner in the Management Proc-
essTheory, Research and Practice.
8 December 2006
 ACADEMIC GUIDANCE
However, the above mentioned needs viz., n/PWR, n/AFF and leads to higher morale), there are significant points of different
n/ACH do not strongly motivate most of the people. It has been between the two. These differences have been highlighted herein
found that as many as 90 per cent of people working in an below:
organisation are not governed by these needs. Therefore, to
Motivation Morale
motivative the majority, some other needs have to be identified and
satisfied. 1. It aims at satisfying the It is an attitude of a group towards
individual needs of human the work and the work environ-
SOUND MOTIVATION SYSTEM
beings. ment.
People are stimulated to work by factors external to the 2. Motivation is normally Morale is reflected in an indivi-
enterprise. However, in order to induce people to work as they are reflected in an individuals duals attitude not only towards
able and trained to do, management must provide them with attitude towards his job. his job but also towards his
additional inducements. Since there cannot be a single source of organi-
motivation, management should devise a system of motivation, 3. High motivation leads to zation, work environment, peer
within the framework permitted by the enterprise. The following higher morale. group, superiors and
guidelines are useful in developing such a system: subordinates.
(1) A system of motivation should be so designed that it fully 4. Motivators can be positive High morale may not lead to high
integrates with human needs and is consistent with peoples or negative; both lead to degree of motivation.
motives. A motivational system not providing for satisfaction of increased level of perfor- Only positive or high morale can
human needs will not produce the desired results. While mance of workers. improve workers performance.
attempting to satisfy needs management should pay more 5. Motivation may or may not Negative or low morale is normally
attention to the unsatisfied needs, because satisfied needs fail be present in an individual, reflected in a low level of commit-
to stimulate people any further. Attempt should also be made that is, an individual may ment towards the job.
to identify and recognise individual variations underlying human or may not be motivated to Morale is always present in indivi-
behaviour. work towards the organi- duals; it only varies to the extent
(2) Since stimulus cannot be a substitute for poor selection of zational goals. of its degree. There may be high
employees, a system of motivation should be based upon proper or low morale but there is no
selection and orientation of people in the organisation. situation that represents absence
(3) It should also be productive and motivate people to work more of morale.
efficiently and according to best of their abilities and skill.
(4) A system of motivation should be flexible in the sense that it MORALE AND PRODUCTIVITY
should be changed in the light of changes in environment and Morale is frequently assumed to be associated with higher
new knowledge gained in course of time. performance, greater satisfaction and increased productivity.
Motivation has its roots in motives within the individual that However, research is yet to corroborate this. High morale may well
stimulate him to action and particular pattern of behaviour. A lack of be associated with low productivity. When an employee feels secure
knowledge about human motives will result in failure to motivate. and is able to satisfy his personal motives independent of the
Further, complications in motivating subordinates are introduced attainment of organisational objectives, he may not attach any
by the hidden motives of which people are not always consciously significant importance to his job efforts, though his morale may be
aware and as such, cause is often mistaken for effect, or vice versa. quite high. In the same way, low morale and high productivity may
However, problems in motivations should not deter management coexist. Feeling of insecurity or threat of withholding or diminution
from designing better motivational techniques, nor should its current of satisfaction may sustain better performance and higher
popularity lead the executive to believe that motivation is productivity, though under this situation morale is likely to be very
management. low. Thus productivity may only be peripherally related to morale.
MORALE It is, however, worth noting that negative correlation between
Morale is the mental attitude or bearing of a person or a group morale and productivity is based upon the notion of morale being
as regards his confidence, discipline and attitude towards his work, equal to job satisfaction. Morale in the sense of confidence and
peer group, superiors and subordinates, for the accomplishment of enthusiasm for the job performance does influence productivity
the individual and the organizational goals. It represents the level though the two need not always be positively correlated. Rensis
of satisfaction that a person derives from his work and work Likert 5 also feels that most of the studies relating to morale and
environment. Once a person joins an organization, he wants his productivity have not confirmed any co-variation of two phenomenon
individual needs to be satisfied through the satisfaction of because studies tend to focus on short-term costs. Moreover,
organizational goals. Various motivational theories emphasise on research has not yet proved either that there exists no positive
different motivators to understand and satisfy the human needs. relationship whatsoever between morale and productivity, or that
Once their individual needs are satisfied, they develop a feeling of the management can afford to overlook the problem of employee
job satisfaction and work with greater zeal and enthusiasm to perform morale without producing any adverse effects.
the organizational activities. A high morale is a reflection of this
feeling of enthusiasm and satisfaction. Morale is thus, a state of WAYS TO BUILD HIGH MORALE
mind, a synthesis of employees attitudes, behaviour and sentiments Managers must adopt measures to build up morale of their
towards various organizational groups, reflected in the effective employees. Some of the ways in which this can be done are
attainment of the overall organizational goals in terms of high described below :
productivity and higher profits. (1) Encourage workers participation: Workers participation in the
Difference between Motivation and Morale : Though motivation
and morale are closely associated with each other (higher motivation 5. Rensis Likert, The , The Human Orgnisation : its Management and Value.

Student Company Secretary 9 December 2006

 ACADEMIC GUIDANCE
decision-making processes relating to overall policies of the
organization will help in building up their morale and they will
be motivated to work towards the attainment of organizational
goals.
(2) Better work environment: The work environment, if it is enlarged
and enriched with greater and challenging job responsibilities,
will build up the employees morale and they will work with
greater enthusiasm and zeal towards the attainment of
organizational goals.
(3) Improved communication : The communication system whereby
organizational policies and procedures are communicated from
top to bottom and doubts and clarifications flow from bottom to
top improves understanding of each others view-point, boosts
up worker morale and simplifies the implementation of
decisions.
(4) Integration of individual goals with organizational goals:
Managers who integrate individual goals with overall
organizational goals look at organizational goals as a means
of satisfying individual goals and individual goals as a means
of satisfying organizational goals. This integration or
coordination of the two sets of goals leads to an increase in the
morale of workers.
(5) Sound organization structure: A sound organization structure
with well-defined tasks, authority-responsibility relationships,
span of control and leadership styles increases workers morale
and they attempt to improve upon their job performance.
(6) Employee-oriented approach: Managers should emphasise
upon employee relations more than task relationships.
Employees should be allowed to develop to their maximum
potential. Employee satisfaction will automatically lead to task
accomplishment.
(7) Job design: The jobs should be so designed that workers work
to the fullest of their capabilities and potential and derive job
satisfaction and need satisfaction out of their jobs. Challenging
and innovative jobs will help in building up the morale of workers
with high growth-needs.
(8) Development facilities: Like recreational, medical, educational,
counselling, sports and other welfare facilities enhance overall
growth and development of the employees and result in building-
up their morale to positively contribute to organizational output.
CREATING CONDUCIVE WORKING ENVIRONMENT
The most important resource of any organization is its people.
Managements basic job is the effective utilization of its human
resources for achievement of organisational objectives/goals. The
management is expected to build and maintain a conducive working
atmosphere that will not only enable the employees to achieve the
desided goals, but where every body feels free and elated to
participate.
Conducive working environment means a working environment
that is good and supportive for easy performance of duties. It should
go beyond the physical things that usually offices have like enough
space, adequate work tools like computers, desk organizers,
stationery, in and out trays, nice looking office tables and chairs
among others. While all these things are good, a conducive working
environment should embrace the working relationships between the
members of staff. For instance a supervisor/ subordinate work
relationship should be one that is comfortable and free. A subordinate
should be free to consult the boss on any work situation. Many a
times this is not so. There are instances when subordinates hesitate
Student Company Secretary
to meet the supervisor. They even ask the mood in which the boss
is before entering the office to consult. There are also bosses who
never appreciate any good work done. The only time one is invited
in the supervisors office is to be advised on what was not done well
or get a bashing. Sometimes employees dread to come to work
because they fear the office environment. Simple words like thank
you, this is good, I appreciate this, etc... can create a conducive
working environment. Employees feel more motivated and work more
constructively with one another when open communication is the
norm. In fact the manager should strive to create a working
atmosphere that is conducive to mutual respect and appreciation at
all levels, an atmosphere that not only allows employees to take
responsibility for the work they do but also encourages them to do
so; provide an atmosphere where the employees develop both their
technical and social skills. It is desirable to promote gender equality.
The culture and atmosphere of the organisation must be
conducive to flexibility, innovative work practices, and empowerment.
Trust is a vital component. Not only will managers have to ensure
that flexible benefits will not be abused, but employees must not be
made to feel disloyal, resented, or poor performers if they take
advantage of the benefits. Rather than putting an emphasis on
presenteeism, it should be shifted on to performance and results. It
is also their responsibility to inspire and empower the subordinates
in a manner that motivates them to develop intrinsic desire, drive
and commitment to accomplish the assignment.
As pointed out above, in all organizations, people are the most
critical resource and should therefore be handled with all the care
that need be. All employees need each others contribution in order
to meet the organizations goals. So organizations should create
the conducive working environment putting emphasis on the human
relationships at the workplace for better service environment.
SECURITIES LAWS AND REGULA
LAWS TION
REGULATION
OF FINANCIAL MARKETS
A. Amendments to SEBI (Disclosure and Investor
Protection) Guidelines, 2000.6
I. Lock-in on pre-IPO shares before Initial Public Offering
(IPO) held by Venture Capital Funds and Foreign Venture
Capital Investors
Till date, as per SEBI (DIP) Guidelines, 2000, pre-issue shares
of an unlisted company making an Initial Public Offering (IPO)
were not required to be locked in, if the same are held by Venture
Capital Funds (VCFs) or Foreign Venture Capital Investors
(FVCIs) registered with SEBI. However, in order to make
Indian primary market more efficient and transparent, SEBI vide
its circular SEBI/CFD/DIL/DIP/23/2006/16/10 dated October
16, 2006 amended SEBI (DIP) Guidelines decided to restrict
the benefit of this exemption from lock-in to the following:
(i) shares held by VCFs or FVCIs registered with SEBI, for a period
of at least one year as on the date of filing draft prospectus
with SEBI;
(ii) shares issued to SEBI registered VCFs/ FVCIs upon conversion
of convertible instruments during the period of one year prior
to the date of filing draft prospectus with SEBI, provided that
the period of holding such convertible instruments as fully paid
up, together with the period of holding shares resulting from
conversion, by the VCFs and FVCIs, is at least one year as on
the date of filing the draft prospectus with SEBI.
6. Prepared by Sonia Baijal, Assistant Director, The ICSI.
10 December 2006
 ACADEMIC GUIDANCE
II. Pre-Issue Publicity
Till date SEBI (DIP) Guidelines 2000 did not contain specific
provisions on pre-issue publicity made during the period prior
to filing draft offer document with SEBI. In order to regulate
pre-issue publicity by companies proposing to make a public
or rights issue, SEBI vide its circular SEBI/CFD/DIL/DIP/24/
2006/18/10 dated October 18, 2006 decided to introduce
provision ensuring that publicity made during the period
commencing from the date of approval of the issue by the Board
of Directors of the issuer company till the allotment of shares
in the issue is consistent with the past practices and does not
contain projections, estimates or any information extraneous
to the offer document.
B. Common Key Personnel between Mutual Funds and
Venture Capital Funds
In order to avoid conflict of Interest between the activities of
Mutual Funds and Venture Capital Funds, SEBI vide its Circular
SEBI/Do/VCF/CIR No.1/78911/2006 dated October 18, 2006,
decided that no Key personnel of a Mutual Fund shall be on the
Board of Asset Management Company/Investment Manager/
Investment Advisor/Investment Committee of a Venture Capital
Fund. It has been further provided that Key Personnel of a Mutual
Fund includes Chief Executive Officer (whatever his designation
may be), Chief Investment Officer, Fund Managers and Head of
other departments in a Asset Management Company.
C. FII investments in Upper Tier II Instruments
The Reserve Bank of India in its Circular dated July 21, 2006
reviewed the guidelines governing the Innovative Perpetual Debt
Instruments eligible for inclusion as Tier 1 Capital and Debt Capital
Instruments qualifying for Upper Tier II Capital. As per the
aforementioned Circular, investment by FIIs in Upper Tier II
instruments raised in Indian Rupees shall be outside the limit for
investment in corporate debt instruments, i.e., USD 1.5 billion.
However, investment by FIIs in these instruments will be subject to
a separate ceiling of USD 500 million.
In view of these changes, SEBI vide its Circular No.IMD/FII&c/
23/2006 dated September 15, 2006, provided for the following:
1. The limit of USD 500 million will be allocated among the 100%
debt and general 70:30 FIIs/ sub accounts in the following man-
ner:
Type of FIIs 100% Debt 70:30 Total Permissi-
ble limit
Limit Allocated 390 110 500
Total 500
2. A headroom of USD 20 million will be maintained for invest-
ments by general 70:30 FIIs/ sub accounts in Upper Tier II
instruments i.e. the FIIs/Sub Accounts are free to invest till the
total investment limit reaches USD 90 million. Thereafter, the
approvals for limit allocation shall be granted as per the proce-
dure. The Board reserves the right to withdraw unused alloca-
tion in case there is demand from any FII which has already
exhausted the limits, in order to enable optimum use of the
allocations.
3. The individual limits for investment in Upper Tier II instruments
will be advised to the 100% debt FIIs/ sub accounts separately.
Student Company Secretary
BANKING AND INSURANCE LAW AND
LAW
PRACTICE
BANCASSURANCE7
Introduction
The distribution of insurance products through banks is termed
as bancassurance. Bancassurance had its origin in France. The
concept now constitutes the dominant model in a number of
European and other countries and the same is fast catching up in
India as well.
Definition
According to the Wikipedia encyclopedia, Bancassurance is the
term used to describe the sale of insurance products in a bank. The
word is a combination of banque or bank and assurance signifying
that both banking and insurance is provided by the same corporate
entity. The usage of the word picked up as banks and insurance
companies merged and banks sought to provide insurance,
especially in markets that have been liberalized recently.
Need for Bancassurance
The opening up of the insurance sector and the entry of many
players in the Indian Insurance Industry, necessitated that the
insurance companies come up with innovative products at
competitive prices and create more consumer awareness about their
products.
Insurance being the subject matter of solicitation cannot be sold
off the shelf and thus, needs personal counseling and persuasion.
The limited distribution network of the insurance companies and
the huge population spread all over the country, made the traditional
distribution channels of insurance unsustainable. Moreover, the
increased competition in the industry did not allow the insurance
companies to spend heavily on their distribution channels. It was at
this point of time that the banking sector with its strong network of
branches was thought of as a potential distribution channel, useful
for the insurance companies.
Modus Operandi of Bancassurance
There are various models through which bancassurance operate
worldwide. In the integrative model the banks themselves directly
sell insurance products. The specialist model involves, specialized
personnel of the bank or the insurance company having specific
knowledge and training of insurance to sell these products. Another
model the strategic alliance model involves a simple marketing
tie-up, under which a bank takes upon itself the responsibility of
selling the insurance products of some insurance company.
In India, the RBI guidelines, provide for a maximum equity of
50% that a bank can hold in a Joint Venture with an insurance
company, subject to the condition that the bank has a net worth of
Rs. 500 crores and its capital adequacy ratio is 10% or more. The
Insurance Regulatory and Development Authority also sets
guidelines regarding eligibility of corporate agents. The Bank
employees who deal with insurance products are treated at par with
insurance agents in regard to trading and examination requirements.
Advantages of Bancassurance
To Banks
l Increased productivity of employees.
l Improvement in overall customer satisfaction by providing
customers with both services under one roof.
7. Prepared by Saurabh Jain, Education Officer, The ICSI.
11 December 2006
 ACADEMIC GUIDANCE
l Increased return on assets by building fee income through Some of the Bancassurance tie-ups in India are as under:
the sale of insurance products.
Insurance Company Bank
l Better placed to sell insurance products to customers
Birla Sun Life Insurance Bank of Rajasthan, Andhra Bank, Bank
based on their financial conditions.
Co. Ltd. of Muscat, Development Credit Bank,
To Insurers Deutsche Bank and Catholic Syrian
l The penetration of banks branches in rural areas can be Bank
utilized to sell insurance products. Dabur CGU Life Canara Bank, Lakshmi Vilas Bank,
Insurance American Express Bank and ABN
l The banks database regarding customers financial Company Pvt. Ltd AMRO Bank
conditions, investments, etc. can be used to provide
customized products to the customers. HDFC Standard Life Union Bank of India
Insurance Co. Ltd.
l Personal contact with the customers gives the banks an ICICI Prudential Life Lord Krishna Bank, ICICI Bank, Bank
upper hand in selling the insurance products. Insurance Co Ltd. of India, Citibank, Allahabad Bank,
To Customers Federal Bank, South Indian Bank, and
Punjab and Maharashtra Co-operative
l All services are available under a single roof. Bank.
l Greater convenience as to payment of premium and Life Insurance Corpora- Corporation Bank, Indian Overseas
answers to queries. tion of India Bank, Centurion Bank, Satara District
Central Co-operative Bank, Janata
l Easy settlement of claims through the banking channels. Urban Co-operative Bank, Yeotmal
l Availability of customized products as per individual needs. Mahila Sahkari Bank, Vijaya Bank,
Oriental Bank of Commerce.
Bancassurance in India
Met Life India Insurance Karnataka Bank, Dhanalakshmi Bank
In India, the concept of bancassurance is of recent origin. The Co. Ltd. and J&K Bank
banking and insurance sectors being regulated by two different
SBI Life Insurance State Bank of India
entities i.e. RBI and IRDA respectively, need that the two regulators Company Ltd.
work in perfect harmony. Therefore, both of them have issued
detailed guidelines for banks entering the insurance sectors. The Bajaj Allianz General Karur Vysya Bank and Lord Krishna
Insurance Co. Ltd. Bank
broad policy guidelines are summarized hereunder.
National Insurance Co. Ltd. City Union Bank
RBI guidelines for banks entering the insurance sector
w.e.f. March 31, 2000: Royal Sundaram General Standard Chartered Bank, ABN AMRO
Insurance Company Bank, Citibank, Amex and Repco Bank.
(i) Banks having a networth of not less than Rs. 500 Crores United India Insurance South Indian Bank
and a CRAR of not less than 10%, having a reasonable Co. Ltd.
level of Non-performing Assets can enter into joint ventures
with insurance companies with risk participation, provided Conclusion
further that they have a net profit for the last three The huge untapped insurance market in India has opened new
continuous years. vistas for bancassurance. The market will witness new and innovative
(ii) In case the banks, are not eligible to enter into JVs under products pouring in from all sides. The integration of the banking and
(i) above then the banks have an option of investing upto insurance sectors would put the customer database maintained by
the banks to more productive and dynamic uses in the sense that it
10% of their networth or Rs. 50 crores, whichever is lower.
would enable insurance companies to come up with more customized
(iii) Banks can also undertake insurance business as agents and tailor made products for the customers.
of insurance companies on a fee basis with no-risk Overall, the customer stands to gain as a plethora of insurance
participation. products are likely to come his way at very competitive prices. All
IRDA (Licensing of Corporate Agents) Regulations, said and done, the final success of bancassurance in India is
2002, for bancassurance: dependent upon how closely the banking and insurance industry are
able to understand each others business models and seize the
(i) Any bank selling insurance is to have a Chief Insurance
opportunities presented to them and weed out the differences that
Executive (who shall be a whole time employee of the bank)
are likely to crop up.
to handle all the insurance activities.
(ii) The bank personnel engaged in insurance business are WTO - INTERNATIONAL TRADE, JOINT
required to undergo mandatory training at the institute VENTURES AND FOREIGN COLLABORATIONS
accredited by IRDA and pass the examination conducted ANTI-DUMPING CASES
by the authority.
TIONS AND DECISIONS8
INVESTIGATIONS
INVESTIGA
(iii) Commercial banks, including cooperative banks and 1. IMPOSITION OF ANTI DUMPING DUTIES
regional rural banks may become corporate agents for one
Anti Dumping Investigation concerning Import of
insurance company.
Acrylic Fibre from Belarus
(iv) Banks are not allowed to become insurance brokers. In this case, the Designated Authority concluded that Acrylic
(v) Every bank shall be guided by code of conduct specified fibre has been exported to India from subject country below the
in section 9 of IRDA (Licensing of Corporate Agents) 8. Compiled by Vinay Kumar Sanduja, Assistant Education Officer under the
Regulations, 2002. guidance of Dr. SK Dixit, Joint Director, The ICSI.

Student Company Secretary 12 December 2006

 ACADEMIC GUIDANCE
normal value. The domestic industry has suffered material injury,
which has been caused by the dumped imports from subject country.
Considering necessary to impose definitive anti-dumping duty
on the imports of subject goods, the Authority recommended
imposition of anti dumping duty on the imports of Acrylic fibre.
Authority recommended the amount of anti-dumping duty equal
to the margin of dumping or less, which if levied, would remove the
injury to the domestic industry. After comparing the landed price of
imports with non-injurious price of the domestic industry, determined
for the period of investigation, definitive anti-dumping duties were
recommended to be imposed on Acrylic fibre originating in or
exported from the subject country falling under the Schedule I of
Customs Tariff Act.
The Designated Authority recommended that the landed value
of imports for the purpose to be the assessable value as determined
under the Customs Act, 1962 and all duties of customs except duties
levied under Section 3, 3A, 8B, 9 and 9A of the Customs Tariff Act,
1975.
Anti-dumping Investigation Concerning Imports of
Cellophane Transparent Film (CTF) from China (New
Delhi, July, 2006)
In this case, the Designated Authority concluded that the subject
goods originating in or exported from China have been exported to
India below its normal value, resulting in dumping. The domestic
industry has suffered material injury, caused by imports of subject
goods from China. Considering it necessary to impose definitive
anti-dumping duty on imports of subject goods originating in or
exported from China, the Designated Authority recommended the
amount of anti-dumping duty equal to the margin of dumping or
lower so as to remove the injury to the domestic industry accrued
on account of dumping.
Anti-dumping Investigation Concerning Import of
Chloroquine Phosphate from China (New Delhi: 15th
July, 2004)
In this case, the Designated Authority concluded that subject
goods in all forms originating in or exported from PR have been
exported to India below its normal value. The domestic industry has
suffered material injury; caused by dumping of the subject goods
originating in or exported from the subject country.
Accordingly, the Designated Authority recommended that the
definitive anti dumping duty be imposed on all imports of Chloroquine
Phosphate originating in or exported from China. The anti dumping
duty be imposed from the date of notification to be issued in this
regard by the Central Government on the imports of Chloroquine
Phosphate falling under Chapter 29, Custom Sub-heading 293921
of the Customs tariff originating in or exported from the subject
country.
Designated Authority further recommended that the landed value
of imports for the purpose to be the assessable value as determined
by the Customs under the Customs Act, 1962 and all duties of
customs except duties under sections 3, 3A, 8B, 9 and 9A of the
Customs Tariff Act, 1975.
Anti-Dumping Investigation Concerning Imports of
Pentaerythritol from China and Sweden. (February 2,
2006)
In this case, the Designated Authority concluded that subject
goods originating in or exported from subject countries have been
exported to India below its normal value and the domestic industry
has suffered material injury which was caused by dumped imports
of subject goods originating in or exported from the subject countries.
Student Company Secretary
The applicant domestic industry in its disclosure statement
submitted that anti dumping duties may be levied in terms of fixed
amount since the cost and prices of the subject goods varied
significantly within the injury period and increased compared to the
prevailing cost and prices during the Period of Investigation (POI)
and at the same time dumping was still continuing beyond the post
POI. They also argued that the raw material prices have increased
globally over the injury period therefore, imposition of duty on
reference price basis would not be able to address the injury to the
domestic industry. It was also submitted that in the investigations
relating to Canada, Japan and Taiwan on the same product, the
anti dumping duty was imposed on the fixed amount and the deviation
at this stage was not desirable.
One of the exporter submitted that since the volume and price of
each of the exporters from the subject countries was substantially
different it would not be fair for the Authority to recommend any
determinative anti-dumping duty on the basis of a NIP guided uniform
reference price. They further submitted that uniform anti-dumping
duty was not fair generally to cooperating exporters and rewards
non-cooperation and extend the benefit of lower margin to the non-
cooperating exporters.
On examination of the arguments made by the interested parties,
the Authority felt it appropriate to consider and recommend the duty
on the fixed amount based on the lower of the margins determined
in investigation. Accordingly, the Authority recommended the
amount of anti dumping duty not exceeding the margin of dumping
or the margin of injury whichever is less and, which if levied, would
remove the injury to the domestic industry. For the purpose of
determining injury, the authority recommended that the landed value
of imports was compared with the non injurious selling price of the
applicant company determined for the period of investigation.
The Authority recommended that the final anti dumping duties
be imposed from the date of issue of notification by the Central
Government on all imports of Pentaerythritol falling under chapter
29 of Custom Tariff Classification Act 1975, originating in or exported
from China and Sweden.
Anti-dumping Investigation Concerning Imports of
Propylene Glycol from the European Union, Singapore,
Korea and USA.(New Delhi, the 20th August 2004)
In this case, the Designated Authority concluded that the subject
goods have been exported to India from the subject countries below
its normal value and the Domestic Industry has suffered material
injury which was caused cumulatively by the dumped imports from
Subject Countries.
Accordingly, the Authority recommended the imposition of
definitive anti dumping duties from the date of notification to be
issued by the Central Government on all imports of propylene glycol
falling under Custom Heading 29053200 originating in or exported
from subject countries.
The Authority recommended that the landed value of imports for
the purpose shall be the assessable value as determined by the
Customs under the Customs Act, 1962 and all duties of customs
except duties under sections 3, 3A, 8B, 9 and 9A of the Customs
Tariff Act, 1975.
2. WITHDRAWAL OF PROVISIONAL DUTIES
Anti-dumping Investigation Concerning Imports of Ball
Bearings (up to 50 mm bore dia) from China, Poland,
Russia and Romania. (New Delhi, March 19, 2004)
In this case, the Designated Authority concluded that subject
goods have been exported to India from subject countries below
their normal value resulting in dumping, however, the domestic
13 December 2006
 ACADEMIC GUIDANCE
industry has not suffered material injury as a result of the dumped
imports.
In view of the above, the Designated Authority recommended
withdrawal of the provisional duties in terms of the provisions of
Rule 18(4) of the Anti Dumping Rules. Designated Authority also
recommended that the provisional duties already imposed or
collected, if any, be refunded.
3. NO MATERIAL INJURY DOMESTIC INDUSTRY
Anti-dumping Investigation Concerning Imports of
Citric Acid originating in or Exported from China, Korea
and Ukraine - Final Findings. (25th August 2005)
In this case, the domestic industry claimed that the material injury
has been caused by the dumped imports and put forward arguments
in support of their claim for causal link between dumped imports
from subject countries and injury suffered by them. However, the
responding exporters argued that the domestic industry has failed
to bring arguments with evidence regarding causality due to dumped
imports. The arguments of the interested parties were examined
and found that the domestic industry has shown improvement in
production, capacity utilization, sales, profitability and the inventory
of the subject goods. The profitability of the industry as per unit sale
of the subject goods has shown improvement and return on capital
employed has also improved. Though the margin of dumping from
subject countries and price undercutting were found to be significant,
the overall performance of the industry has shown improvement.
In view of this, the Designated Authority concluded that the
Domestic Industry has not suffered material injury.
4. NO THREAT OF MATERIAL INJURY
Anti-dumping Investigation Concerning Imports of
Coated Paper Including Paper and paper boards of 80
GSM and above from the European Union and Indonesia.
(New Delhi, the 15th December 2004)
In this case, the domestic industry argued that the factors
enumerated in Article 3.7 of the Agreement on Anti-Dumping need
to be analysed separately to gather an idea about the likely impact
on the domestic industry because of dumped imports. However,
the other interested parties commented that there could either be
an allegation of injury or allegation of threat of injury as the two are
mutually exclusive.
It was also argued that the applicant had failed to submit sufficient
information about the condition of the domestic industry in a threat
of injury situation in order to demonstrate how the future imports
were likely to cause the condition of the domestic industry to change.
It was also added that the information relevant for a threat of injury
case is substantially different from the information required for
establishing material injury. It had been further added that in view of
the failure of the applicant to provide the overall trends and
projections affecting the likely conditions of, and the impact of imports
on the entire domestic industry including profit levels, market share,
return on investment, capacity utilization, growth etc., there was no
reasonable basis for focusing any threat of injury to the domestic
industry.
The Designated Authority examined the contentions of interested
parties and noted that the applicant is bound to supply the most
recent information on all injury parameters and other details to enable
the Authority to analyse the likely future impact in the threat of injury
determination. The Authority also examined all the parameters listed
in article 3.7 of the Anti Dumping Agreement to examine the impact
on domestic industry from the threat of material injury.
After the verification of the sole cooperating exporter from EU
Student Company Secretary
and Indonesia, it was held that the exporters do not have a very
significant disposable capacity of the subject goods. The Designated
Authority also noted that their exports to other countries have risen
much more than exports to India during the injury period as compared
to previous year. With regard to dumped imports on prices, the
Authority held that the price effect in terms of price undercutting
and price underselling were not considered as contributing to the
injury to the domestic industry. Though there was a little price
depression during the injury determination period, there was no price
suppression. Thus, in view of the evidence available, the price
reduction was not considered imminent which may affect the
profitability of the domestic industry.
With regard to the inventories of the product under consideration,
the authority noted that these had not increased significantly during
the injury determination period and were largely stable. With regard
to examining the factors for the threat of material injury, it was stated
that the factors other than those set out in article 3.7 itself would
necessarily be relevant to the determination of threat of material
injury. It was further noted that an analysis of the consequent impact
of the imports was required in a threat of material injury determination
and that in making a determination regarding the threat of material
injury, the investigating authority must conclude that material injury
would occur in the absence of anti dumping duty. The authority noted
that WTO Anti Dumping Agreement imposed stringent conditions
for the threat of injury determination such as the fact that such
determinations must be based on facts not merely on allegation,
conjecture or remote possibility and that change in circumstances
which would create a situation in which dumping could cause injury
must be clearly foreseen and imminent.
The authority after examining all the arguments made by
interested parties concludes as to how the future will be different
from the immediate past such that the situation of no present material
injury will change in the imminent future to a situation of material
injury in the absence of measures. Hence, in view of the above, the
authority concluded that the domestic industry does not suffer from
the threat of material injury because of the dumped imports from
the subject countries.
5. TERMINATION OF INVESTIGATION
Anti-Dumping Investigation Concerning Imports of
Certain Compressors from China and Malaysia
(13th July, 2005)
In this case, the Designated Authority having regard to the
Customs Tariff Act, 1975 as amended in 1995 and the Customs
Tariff (Identification, Assessment and Collection of Anti-Dumping
Duty on Dumped Articles and for Determination of Injury) Rules,
1995, initiated an investigation vide notification dated 19th July 2004,
into the alleged dumped imports of Certain Compressors from China
and Malaysia. The investigation was initiated on the basis of a written
application received from M/s BPL Engineering Ltd, Hyderabad,
(BPL) on behalf of domestic industry, alleging dumping of Certain
Compressors originating in or exported from China and Malaysia.
The Authority issued a public notice dated 19th July 2004 initiating
Anti-Dumping investigations concerning imports of Certain
Compressors classified under Custom Code and in the Indian Trade
Classification based on Harmonized system of the Customs Tariff
Act, 1975 and under ITC HS Classification Rule, originating in or
exported from China and Malaysia. The product under consideration
in the present case was Low temperature application compressors
of a kind used in refrigerating equipment.
Substantial response/information to the questionnaire/notification
was filed by the exporters/producers from China and a number of
14 December 2006
 ACADEMIC GUIDANCE
other exporters, Importers and users of the subject goods whose
views were taken into account at various stages of the investigation.
The Authority conducted further investigation into the dumping,
injury, and causal link between dumping and injury and also
conducted public hearing on 2nd June 2005. The Authority also
conducted verification of information submitted by the domestic
industry, as well as, by the cooperating producers and exporters.
Due to exceptional circumstances, the Central Government, in terms
of the powers conferred under Rule 17 (1) of the Anti dumping Rules,
extended the time period for completion of the investigation till 18th
January 2006.
The BPL vide their letter dated 5th July 2005 made a written
submission before the Authority requesting termination of anti
dumping investigations concerning imports of the subject goods from
China and Malaysia. Therefore, in terms of Rule 14 (a) of the
Antidumping Rules, the Designated Authority terminated the
investigation and all proceedings connected with the case.
Anti-Dumping Investigation Concerning Imports of
Metallurgical Coke from Japan (New Delhi, 14th May,
2004)
In this case, the Designated Authority, having regard to the
Customs Tariff Act 1975 as amended in 1995 and the Customs
Tariff (Identification, Assessment and Collection of Anti-Dumping
Duty on Dumped Articles and for Determination of Injury) Rules,
1995, initiated an investigation vide notification dated 20th March
2003, into the alleged dumped imports of metallurgical coke from
Japan. The investigation was initiated on the basis of a written
application received from Indian Metallurgical Coke Manufacturers
Association (IMCOMA), on behalf of domestic industry, alleging
dumping of Metallurgical Coke originating in or exported from Japan.
The Authority issued a public notice dated 20th March, initiating
Anti-Dumping investigations concerning imports of Metallurgical
Coke classified under Custom Code of Schedule I of the Customs
Tariff Act, 1975 under ITC HS Classification Rule originating in or
exported from Japan.
Response/information to the questionnaire/notification filed by
the exporters/producers from Japan also by a number of importers
and users of the subject goods, were taken into account at various
stages of the investigation.
After completion of preliminary investigation into dumping, injury
and causal link between the dumped imports from the subject country
and injury suffered by the domestic industry, the authority notified
its preliminary findings on 14 th October 2003, recommending
imposition of anti dumping duty on reference price basis. The
reference price was recommended by the authority on the basis of
lesser duty principles.
The Authority conducted further investigation into the dumping,
injury, and causal link between dumping and injury and also
conducted public hearing, verification of domestic industry, as well
as, foreign exporters data. Due to exceptional circumstance, the
Central Government, in terms of the powers conferred under Rule
17 (1) of the Anti dumping Rules, extended the period for completion
of the investigation till 20th September 2004.
The petitioners vide their letter dated 12th May 2004 made a
written submission before the Authority withdrawing their request
for imposition of the anti dumping duty on imports of the subject
goods from Japan. The petitioners in their written submission inter-
alia submitted that :
(i) as responsible corporate citizens of India the petitioners wish
to bring to the notice of the authority the drastic changed cir-
Student Company Secretary
cumstances in Metcoke market in the post POI period. China
being the largest supplier of metallurgical coal and coke glo-
bally (dominating about 90% of global trade) has clamped up
its supplies in the global market due to its own domestic de-
mand. As a result of which the prevailing price from Japan (if
material is available) is far in excess on FOB basis. This how-
ever, in the opinion of the petitioners, highlights the extent of
dumping resorted to by China and Japan during the POI, not-
withstanding their request for withdrawal of the petition.
(ii) Japan has no known source of metallurgical coal and was dump-
ing the product (Metcoke) in India by leveraging the price dif-
ferential between its suppliers and prevailing price in India.
(iii) Japan with no coal resources of its own is unable to continue
to dump into India in the short run.
(iv) They are fully aware that it is settled law in India and in
international jurisprudence that data pertaining to the POI alone
is relevant in an anti dumping investigation and post POI
developments have no bearing on the case. However, as
responsible corporate citizens they do not want the Government
to put in place a levy, which in todays term will have no impact.
(v) Their withdrawal of the request for imposition of Antidumping
Duty is without prejudice to their contentions raised in the peti-
tion and their future rights to approach the Authority for imposi-
tion of Antidumping Duty against Japan if the situation so arises.
Therefore, in terms of Rule 14 (a) of the Anti dumping Rules, the
Authority terminated the investigation and all proceedings connected
with the case.
Anti-dumping Investigation Concerning Imports of
Nylon Filament yarn from China, Chinese Taipei,
Malaysia, Indonesia, Thailand and Korea RP ( New
Delhi, the 3rd July 2006)
In this case, the Designated Authority concluded that the subject
goods have been exported to India from the subject countries below
its normal value and the domestic industry has suffered material
injury. However, no injury has been caused in respect of imports of
Nylon flame retardant yarn, Nylon air texturised yarn, Nylon 66 and
Nylon 11 yarn, Nylon 170/24 and 280/14 denier yarn used for hook
and loop tape fasteners, Nylon 6 monofilament, U.V treated yarn
wherever their landed price was higher than Rs.172.per Kg. D. The
injury had been caused cumulatively by the dumped imports from
subject countries.
Considering it necessary to impose definitive antidumping duty
on all imports of subject goods from subject countries in order to
remove the injury to the domestic industry, the Authority
recommended the amount of anti dumping duty equal to the margin
of dumping or less, which if levied, would remove the injury to the
domestic industry. For the purpose of determining injury, the landed
value of imports was proposed to be compared with the non-injurious
price of the petitioner company determined for the period of
investigation.
At the stage of the preliminary findings, the Authority
recommended one benchmark for different types of product under
consideration. It was heavily argued that this was not proper and
interested parties argued for a number of different benchmarks.
However, the Authority noted that it would not be feasible to
recommend a number of different benchmarks for the reason that
all types of products were exported by all the companies. In fact, a
number of exporters exported only few types of the product, whereas
the number of products produced and sold by the Foreign Producers
in their home market and domestic industry in Indian market was
fairly large.
15 December 2006
 ACADEMIC GUIDANCE
Having examined all relevant consideration, the Authority was
of the view that the most appropriate form of duty in the facts and
circumstances of the case was fixed amount of anti dumping duty.
Accordingly, the Authority considered it appropriate to recommend
fixed form of anti dumping duties.
Anti-dumping Investigations Concerning Imports of
Penicillin-G from China into India (New Delhi April,
2006)
In this case, the Designated Authority having regard to the
Customs Tariff Act, 1975 and the Customs Tariff (Identification,
Assessment and Collection of Anti Dumping Duty on Dumped
Articles and for Determination of Injury) Rules, 1995, received an
application from M/s. Southern Petro Chemical Industries
Corporation alleging dumping of Penicillin-G from China.
In this case the product under consideration Penicillin-G was
being dumped in the Indian market by the exporters from China.
The name penicillin can either refer to several variants of penicillin
available, or to the group of antibiotics derived from the penicillin.
There were three more producers of Penicillin-G in India, out of
which one had closed the plant and two had suspended the
production.
The applicant claimed that the goods produced by them are like
articles to the goods originating in or exported from the subject
country. Penicillin-G produced by the domestic industry and imports
from China were comparable, technically and commercially
substitutable in terms of characteristics such as physical and
chemical characteristics, manufacturing process and technology,
functions and uses, product specifications, pricing, distribution and
marketing of the goods. Therefore, for the purpose of investigation
the Penicillin-G produced by the applicant was treated as like articles
of Penicillin-G imported from subject country within the meaning of
the Anti Dumping Rules.
The preliminary scrutiny of the application revealed certain
deficiencies, which were subsequently rectified by the applicant.
The applicant was thereafter considered as properly documented.
The Authority on the basis of sufficient evidence submitted by the
application decided to initiate investigations against alleged dumping
of imports of Penicillin-G from China. The Authority notified the
Embassy of the subject country about the receipt of dumping
allegation before proceeding to initiate investigations in accordance
with sub-rule 5(5) of the Rules.
The Authority issued a Public Notice dated 16th January, 2006
initiating Anti-dumping investigations concerning imports of
Penicillin-G classified under Schedule I of the Customs Tariff Act,
1975 originating in or exported from subject country.
The Authority forwarded a copy of the Public Notice to the known
exporters and importers and gave them an opportunity to make
their views known in writing within forty days from the date of the
letter. A request was also made to Director General Commercial
Intelligence and Statistics (DGCI&S) and Central Board of Excise
and Customs (CBEC) for arranging details of imports of subject
goods from subject country. The copies of the non-confidential
application were also provided to the known exporters and the
Embassy of the subject country in accordance with Rule 6(3).
The Embassy of the subject country was informed about the
initiation of the investigation in accordance with Rule 6(2) with a
request to advise the exporters/producers from their country to
respond to the questionnaire within the prescribed time. A copy of
the letter, non-confidential application, and questionnaire sent to
the exporters was also sent to the concerned Embassy along with
the name and addresses of the exporters.
Student Company Secretary
The exporters questionnaire along with market economy
questionnaire was sent to all the known exporters/producers from
China and Bureau of Foreign Trade (BOFT), Ministry of Commerce,
China. The Authority made available the non-confidential version of
the evidence presented by various parties in the form of a public file
kept open for inspection by the interested parties.
Investigation was carried out for the period starting from 1st
October 2004 to 30th September 2005 (12 months) i.e. the period of
investigation (POI). The Authority held a public hearing on 20th April
2006 to hear the interested parties orally, which was attended by
applicant, representatives of the importers, exporters and interested
parties. The parties attending the public hearing requested the
Authority to examine the request of the domestic industry for
termination of investigation under Rule 14 of Anti dumping Rules.
The applicant domestic industry vide their letter dated 2nd March,
2006 requested the Designated Authority to treat the application
filed by them for Anti-dumping investigations against Penicillin-G
originating in or exported from China withdrawn and terminate the
investigation.
In view of the request of the domestic industry under Rule 14(a)
of Anti Dumping Rules, the Designated Authority terminated
investigation concerning imports of Penicillin-G originating in or
exported from China.
TAXATION
TAX LAWS/DIRECT/INDIRECT T
LAWS/DIRECT/INDIRECT AXES9
TAXES
[In the Punjab & Haryana High Court] Commissioner of Income
Tax Versus Abhishek Industries Ltd. [2006] 286 ITR 1 (P&H)
Adarsh Kumar Goel and Rajesh Bindal JJ. August 4, 2006
Facts:
Abhishek Industries Ltd., a public limited company, filed its return
for A.Y. 1993-94 showing its income as Nil. Subsequently a revised
return was filed declaring a loss of Rs.4,53,07,410. The assessment
was completed assessing the loss at Rs.96,81,213 by disallowing
interest u/s.36(1)(iii). The assesse borrowed capital and claimed
deduction of interest. Also the assesse advanced interest free loan
to its sister concern for non business purpose. In the appeal before
CIT (Appeals) the disallowance of interest on account of interest
free advances given to sister concerns for non business purposes,
the appeal of company was allowed. The tribunal dismisses the
appeal of the Revenue and the case comes before the High Court.
As on March 31,1993 secured loans outstanding in the books of
the company amounted to Rs.25,40,04,090 and the interest liability
of Rs.2,26,64,944 was partly charged to Profit & loss Account and
partly capitalized as pre-operations expenses. The Assessing Officer
noticed that the company had advanced a large amount of money
to its sister concern. The company had claimed that there was no
nexus between borrowing and loan given without interest.
The interest free loan was advanced by the company before the
commencement of production and also after the commencement of
production. The Assessing Officer disallowed the interest on the
advances to the sister concern as not allowable u/s 36(1)(iii). The
said provision read as follows-
The deductions provided for in the following clauses shall be
allowed in respect of the matters dealt with therein, in computing
the income referred to in section 28- the amount of the interest paid
in respect of capital borrowed for the purposes of the business or
profession.
9. Prepared by Mamta Goel, Asst. Education Officer, The ICSI.
16 December 2006
 ACADEMIC GUIDANCE
Issues: Whether assesse be allowed deduction of interest being
paid on the loan raised to the extent it has been advanced to its
sister concerns without interest?
Decision: Held, that the share capital is meant to be used for
business purpose. If the share capital, according to assesse, was
surplus and it could part with the same to its sister concern for non-
business purpose without any interest, there was no need to raise
the loans to that extent and the amount of such share capital should
have been utilized for the project/ business itself. In case the assesse
had not advanced loans to its sister concern on interest free basis.
The interest being paid by the assesse on the working capital could
have certainly been saved to that extent.
The borrowings of the funds by the company to that extent was
not for the purpose of business and there was nothing on record to
suggest that amounts were advanced to the sister concern to
advance some business object.
Accordingly, the amount of interest arising thereon was reduced
from the value of the assets and was added to the income
respectively by holding that raising of loan by the assesse to the
extent the same has been advanced interest free to the sister
concern, was not allowable under section 36(1)(iii) of the Act.
2006(202) E.L.T.3 (S.C.), Baraka Overseas Traders Vs. Director
General of Foreign Trade, Dated 11.09.2006
Facts:
Baraka overseas traders had applied for the advance licences
under no norms category and obtained the same from Joint DGFT,
Hyderabad under EXIM Policy 1997-2002. The licencee filed
application, requesting for an endorsement of transferability after
fulfilment of the stipulated export obligation. The DGFT refused the
request as the license should be obtained under norms category
and also a writ petition in the High Court against the order of DGFT
was dismissed.
Issues: 1) Whether the norms category and no norms category
under Duty Exemption Scheme have any effect on the endorsement
of transferability of advance licences? (2) Whether the grant of
licence creates certain rights to licensee? (3) Whether the
endorsement of transferability of licences be done by DGFT?
Decisions: (1) Under the Duty Exemption Scheme the only
difference between the norms category and no norms category is
that where the standard input/output norms have been published,
the application is to be given to the Licensing Authority and where
they have not been published, the application is to be given the
Advance Licensing Committee. Under clause 7.19(a) of Duty
Exemption Scheme contained in the EXIM Policy 1997-2002, a
duty free licence, except Special Imprest Licence and /or materials
imported against it, is transferable after the completion of export
obligation and endorsement of transferability by the licensing
authority. Now the new EXIM Policy 2002-2007 has come into force.
However, a perusal of the same shows that broadly there is no
difference between the scheme of 1997-2002 and that of 2002-2007.
Thus it is evident that all duty free licenses are transferable, whether
they belong to the norms category or no norms category.
2) The grant of a license certainly creates rights in favour of the
licensee, and if the Licensing Authority was of the opinion that the
license obtained by misrepresentation, then a show cause notice
should have been given to the appellant, as well as opportunity of
hearing. The deprivation of such right without a hearing is violation
of natural justice.
3) As the Baraka Overseas traders obtained license, it is entitled
to certain rights including that of hearing. As per Duty Exemption
Student Company Secretary
Scheme under EXIM Policy 1997-2002 and that of 2002-2007 the
license is transferable whether it is in the norms category or no
norms category.
It was held by Court in Union of India & Others V. Chowgule &
Co. Ltd. &
Others,2003(2)SCC 641 that even under the new policy, the
appellant who had an accrued right under the old policy was entitled
to the benefits under the new policy.
The DGFT was directed to endorse the transferability of the
licenses as requested by the licensee.
2006 (202) E.L.T. 37 (S.C.) IN THE SUPREME COURT OF INDIA,
Indian Oil Corporation Ltd., Versus Collector Of C. Ex., Baroda
Decided on 02.08.2006
Facts: M/s. Indian Oil Corporation Ltd., is engaged in the refining
of Crude petroleum which leads to manufacture of various petroleum
products. It produces Reduced Crude Oil (RCO) or Low Sulphur
Heavy Stocks (LSHS) which are captively consumed by the company
in the thermal power plant located within the refinery area for
generation of electricity which in turn is largely used in the refinery
for producing various petroleum products and also sold to various
agencies.
The company claimed exemption for RCO/LSHS which had been
captively consumed based on exemption notification. The Customs,
Excise & Gold (Control) Appellate Tribunal held that thermal power
station where LSHS consumed not covered by refinery and upheld
denial of exemption as per entry 34 of Notification No.75/84 which
reads as follows:
"______________________________________________________
Sl. Description Rate of Intended use/
of goods Duty Condition
34 Low Sulphur Nil Intended for use as fuel in a refinery
Heavy Stock Explanation- Refinery means a
refinery wherein refining of crude
petroleum or shale or blending of
non- duty paid petroleum products
is carried on.
"
Issues: 1) Whether the exemption be available to company on
the fuel, LSHS, produced during refining under entry 34 of exemption
Notification No. 75/84?
2) What is the effect of C.B.E. & C. clarificatory circular on
exemption?
Decision: The Central Board of Excise & Customs circular reads
as under:
Eligibility of concession under Notification Nos. 74/63- C.E.,
dated 18.05.63 & 353/77-C.E., dated 16.12.77.
In suppression of the Boards instructions contained in F.No.
3565-CX-3 dated 16.09.67 it has been decided that since generation
of electrical energy (electricity as an intermediate product is
incidental in the process and manufacture of petroleum products
falling under T.I. Nos. 6 to 11AA the exemption contained in the
Notification No.352/77-C.E., Dt 16.12.77 as amended by Notification
Nos. 131/80-C.E., Dt 23.08.80 and 41/82-C.E., dt 28.02.82 would
be available to the quantity of intermediate product electricity. The
exemption contained in this notification will however not be available
to that quantity of petroleum products which is used in the generation
of electricity which, in turn, is not used in the process and
manufacture of petroleum products. [emphasis supplied]
The entry No.34 of Notification No.75/84 read with the above
17 December 2006
clarificatory circular clearly says that the company would be entitled
to the benefit of exemption on LSHS to the extent it is used in Thermal
Power Plant located with in the refinery area for generating electricity
which in turn is used in the process of manufacture of petroleum
products.
The exemption shall not be available in respect of RCO/LSHS
used in the generation of electricity which in turn is not used in the
process and manufacture of petroleum products.
[2006] 286 ITR 637 (Karn), RECON MACHINE TOOLS P. LTD. v.
COMMISSIONER OF INCOME TAX
Facts: Recon Machine Tools P. Ltd., a manufacturer of machinery
equipment, entered into an agreement with a firm (providing
professional or technical services) for a royalty at five percent. The
same royalty payment was claimed by assessee as deduction but
disallowed by the Assessing Officer on the grounds that the
agreement was only a sham to take funds of the assessee in the
garb of royalty payment to the partners or directors of the firm. The
firm rendered services not only to the assessee but also to others.
Subsequently the allowance was granted but restricted to two percent
only against five percent.
Issues: Whether the arbitrary fixation of royalty payment was
justified, when the transaction was held to be genuine, by invoking
provisions of section 40A(2) of the Income Tax Act,1961?
Decision: It was revealed from the facts that an agreement was
entered into by the assessee with the firm for five percent charges
on the professional services rendered by the firm. Section 40A(2)
of the Income-tax Act reads as follows:
(a) Where the assessee incurs any expenditure in respect of
which payment has been or is to be made to any person referred to
in clause (b) of this subsection and the Assessing Officer is of opinion
that such expenditure is excessive or unreasonable having regard
to the fair market value of the goods, services or facilities for which
the payment is made or the legitimate needs of the business or
profession of the assessee or the benefit derived by or accruing to
him there from, so much of the expenditure as is so considered by
him to be excessive or unreasonable shall not be allowed as a
deduction.
(b) The persons referred..
The invoking of section 40A(2) was not possible as the findings
of the Assessing Officer with regard to the transaction being sham
is uncalled for and is also unsustainable on the facts and
circumstances of the case, the reason being the firm rendered
services not only to the appellant but also to others and has a
separate and independent status on its own.
Held, the agreement with the consultants being genuine had to
be accepted. Five percent royalty as claimed by the assessee could
not be termed arbitrary or unreasonable particularly taking into
consideration the professional expertise being provided to the
assessee by the firm. Therefore, the reduction from five percent to
two percent is an arbitrary reduction and hence set aside by the
court.
[2006]286ITR598(Guj.), Patel Brass Works V Commissioner of
Income- Tax, 16.01.06
Facts: Patel Brass Works, a registered firm, is engaged in the
business of manufacturing spare parts of diesel engines. It entered
into a contract for purchase of machinery worth Rs.10,09,000/- with
M/s. Godrej Boyce Mfg. P. Ltd. to expand the business and paid
Rs.1,16,000/- as earnest money. Subsequently the order was
cancelled and supplier returned Rs.36,000/- after deducting
Student Company Secretary
Rs. 80,000/- as cancellation charges. The amount of Rs.80,000/-
was claimed by it as a short-term capital loss.
Issues: Whether the amount of Rs.80,000/- deducted by supplier
as cancellation charges be claimed by the firm as short term loss
and allowed a deduction for the same?
Decision: It is noted that the firm had entered into a contract for
purchase of machinery and the contract was in subsistence till the
point of time the firm cancelled the contract. Section 45 of the Income
Tax Act,1961 reads as follows-
Any profits or gains arising from the transfer of a capital asset
effected in the previous year shall be chargeable to income
tax under the head Capital gains and shall be deemed to be the
income of the previous year in which the transfer took place.
The term transfer as per section 2(47)(ii) of the Act reads as-
transfer, in relation to a capital asset, includes, the
extinguishment of any rights therein
For the purposes of extinguishment of any rights, existence of a
capital asset is a must. The term capital asset under section 2(14)
of the Income Tax Act, 1961 reads as follows-
capital asset means property of any kind held by an
assessee..
The definition stipulates existence of property of every description
and such property must be held by an assessee. The only right that
the assessee had till the point of time it cancelled the contract was
to seek performance of the contract from its suppliers. This could
not be termed to be a capital asset.
Held that, the concluded contract between the firm and the
supplier through the exchange of letters was not a capital asset in
the hands of the assessee and there was no transfer whatsoever
within the meaning of section 2(14). Therefore the assessee was
not rightin law in holding that the assessee was not entitled to
deduction of Rs.80,000/- as short-term loss.
Commissioner of Income Tax vs. General Insurance Corporation
[2006]286ITR232 (SC) 25.09.06
Facts: General Insurance Corporation, an insurance company,
filed a return of income for assessment year 1991-92 of Rs.
58,52,80,850. The Assessing Officer disallowed besides other
expenses an amount of Rs. 1,04,28,500 incurred as revenue
expenditure towards stamp duty and registration fees paid in
connection with the following-
(i) the increase in authorized share capital from Rs.75 crores
to Rs.250 crores
(ii) the issue of bonus shares
In his view, the expenses incurred were towards a capital asset
and, therefore, the expenses could only be attributable towards the
capital expenditure.
Issues: Whether the expenditure incurred towards stamp duty
and registration fees in connection to issue of bonus shares is capital
or revenue in nature?
Decision: The increase in the paid up share capital by issuing
bonus shares may increase the creditworthiness of the company
but that does not mean that increase in creditworthiness would be a
benefit or advantage of enduring nature resulting in creating a capital
asset.
The section 37 of Income Tax Act,1961 reads as follows:
Any expenditure (not being expenditure of the nature described
in sections 30 to 36 and not being in the nature of capital expenditure
or personal expenses of the assesse), laid out or expended wholly
and exclusively for the purposes of the business or profession shall
18 December 2006
 ACADEMIC GUIDANCE
be allowed in computing the income chargeable under the head
Profits and gains of business and profession.
The issue of bonus shares by capitalization of reserves is merely
a reallocation of companys funds. There is no inflow of fresh funds
or increase in the capital employed, which remains the same. As
illustrated in the following hypothetical example, the capital employed
remains the same (i.e., Rs.600) both pre and post issuance of bonus
shares:
Sl. Particulars Pre- bonus On bonus Post bonus
No. issue Rs. issue Rs. issue Rs.
1 Pre-paid share 100 100+100=200 200
capital
2 Reserve 500 500-100=400 400
3 Total 600 600 600
Held that as the total funds available with the company will remain
the same and the issue of bonus shares does not result in change
in the capital structure at all, the expenditure on issuance of bonus
shares is revenue expenditure.
Commissioner of Income-Tax v. P.D. Singhania [2006] 287 ITR
19 (ALL) 17.08.06
Facts: Mr. P. D. Singhania, an individual, resided in his own
house and was not paying any rent. The assessee claimed
exemption under section 10(13A) of the Income Tax Act, 1961 to
the extent of Rs. 4800/- for the assessment years 1978-79 and 1979-
80. The Income-tax Officer had rejected the claim.
Issues: Whether, on the facts and in the circumstances of the
case, the assessee is entitled to exemption under section 10(13A)
of the Income-tax Act, 1961?
Decision: The provisions of Section 10(13A) of the Income tax
Act, 1961 are as follows:
(13A) any special allowance specifically granted to an assessee
by his employer to meet expenditure actually incurred on payment
of rent (by whatever name called) in respect of residential
accommodation occupied by the assessee, to such extent as may
be prescribed having regard to the area or place in which such
accommodation is situate and other relevant considerations.
Explanation- For the removal of doubts, it is hereby declared
that nothing contained in this clause shall apply in a case where-
(a) the residential accommodation occupied by the assessee
is owned by him; or
(b) the assessee has not actually incurred expenditure on pay-
ment of rent (by whatever name called) in respect of the
residential accommodation occupied by him.
With the insertion of Explanation to Section 10(13A) by the
Taxation Laws (Amendment) Act, 1984, with retrospective effect
from 1-4-1976 it is clear that in order to claim deduction under Section
10(13A) of the Income-tax Act,1961 the assessee should not reside
in the accommodation owned by him and the expenditure for
payment of rent should have been actually incurred.
Held, that the assessee was residing in his own house and there
was no payment of rent and hence, the provisions of clause (13A)
of Section 10 were not attracted. In view of the introduction of the
Explanation to Section 10(13A), the assessee was not entitled to
claim the benefit of the Section 10(13A).
Student Company Secretary
ATTENTION ALL STUDENTS APPEARING IN
THE CS INTERMEDIATE EXAMINATIONS FROM
JUNE, 2007 SESSION ONWARDS
COMPULSORY COMPUTER TRAINING SCHEME
In the Company Secretaries Regulations, 1982, for regulation 40, the
following regulation shall be substituted, as published in the Gazette of
India(Extra Ordinary) vide Notification No. ICSI/710/1(M)/1 dated 3rd May,
2006.
40 Admission to the Intermediate Examinations -
No candidate shall be admitted to the Intermediate examination unless
he/she :-
- (a) is a registered student and produces a certificate from the head of
the coaching administration ( by whichever name designated) to the
effect that he has undergone satisfactorily a course of postal or oral
tuition for the Intermediate examination; and
- (b) has successfully completed computer training program as may
be specified from time to time by the Council and in the manner so
specified or exempted there from;
- (c) applies with such examination fee as may be determined by the
council from time to time so as to reach the Secretary, in accordance
with the directions given by the Council.
In terms of the aforesaid amendment in the Company Secretaries
Regulations, 1982, all students are required to successfully undergo a
Compulsory Computer Training Programme for becoming eligible for
appearing in the CS Intermediate Examinations from June, 2007
examinations onwards.
The Institute, in compliance of the aforesaid amendments, has tied
up with M/s NIIT through which 70 hours of computer training shall be
provided to the students/members of the Institute in all Centres of NIIT all
over the country. To undergo this course, a student/member has to
approach any NIIT Centre on all India basis. To take admission, he/she
has to deposit the requisite fees at the respective NIIT Centre and fulfill
the formalities as per the requirements of the Computer Training Centre.
The list of NIIT Centres including detailed course contents, module
details and topic-wise time duration etc. have been published on the
website of the ICSI i.e. www.icsi.edu under FAQ.
Salient features of the course in brief : -
Title of the Understanding Information Technology in Corporate
Course Environment.
Duration of the 70 Hours
Course
Fee Rs.3000 per participant for General Category &
Rs.2500 per participant for SC/ST Category
Note : Service Tax as per the GOI rules applicable
from time to time shall be paid in actual by the
participant
A student can be exempted from undergoing the course on the basis
of his existing qualification/degree in the computer field subject to the
conditions that he or she enrolls himself/herself for an online exemption
test (to be conducted by NIIT) at any of the NIIT Centre on all India bases
and successfully clears the test. A fee of Rs.450 plus Service Tax, etc.
per student is payable for online test which is applicable for a maximum
of TWO attempts within a period of one month.
The Course is open to all the students and members of the ICSI.
Computer Training will be compulsory and pre-requisite for all the
students intending to appear in the Intermediate Examination from
December, 2007 session onwards. No student will be allowed to appear
at the Examination to be held from December, 2007 session onwards
unless he/ she successfully completes the Computer Training.
However, a student may be permitted PROVISIONALLY to appear in
the June, 2007 session only without completing the computer training
with the condition that, he/ she will complete the Computer Training
before seeking enrollment to Final Examinations.
19 December 2006
 LEGAL WORLD
LEGAL WORLD
Compiled by T.K.A. Padmanabhan, FCS, Advocate, New Delhi.
CORPORATE LAWS
LW(S) 71.12.2006
SBI MUTUAL FUND V. VIKAS WSP LTD. [(2006) 71 SCL 368(P&H)]
Hemant Gupta, J. [Decided on 23.02.2006]
Companies Act- Winding up- Non payment of dividend and
interest thereon- Whether constitutes debt for the purposes of
winding up- Held, Yes.
Brief facts: The petitioner filed petition under sections 433(e) and (f)
seeking winding up of the respondent company alleging that the
respondent, after having declared dividend for the years2000 01,
failed to remit the said amount which was a debt due and payable by
the respondent to the petitioner and, thus, it was liable to be wound
up. Though the respondent company had paid entire amount of
dividend pendency of petition, the petitioner alleged that the
respondent company, having failed to pay dividend for more than
three years, was liable to pay interest at the rate of 12 percent per
annum for the period, during which the amount of dividend remained
unpaid. On the other hand, the respondent company contended that
for payment of interest, it could not be wound up.
Decision: Petition admitted.
Reason: Though the respondent alleged in the written statement that
the dividend voucher was dispatched, yet in the additional affidavit, it
took up a stand that the original dividend warrant was feared to have
been burnt. Apart from the fact the stand was contradictory, it was
apparent that the respondent had not disputed the liability to pay the
dividend. The affidavit filed by it did not show that the amount of
unpaid dividend or claim was deposited in a special account. What
was pleaded was that the amount was deposited in the special account
known as unpaid dividend account in the form of current account.
However, the respondent had not even disclosed the name of the
bank, account number or produced any account statement of the
said account. Thus, it was apparent that the respondent had not
complied with the requirement of section 205A and, therefore, on
account of default, it was liable to pay interest at the rate of 12 per
cent per annum from the date of such default. Therefore, the
respondent was unable to satisfy the debt due and payable to the
petitioner and, thus the petition was liable to be admitted.
LW(S) 72.12.2006
MOTOROLA INDIA (P.) LTD., IN RE [(2006) 71 SCL 444 (P&H)]
Hemant Gupta, J. [Decided on 30.03. 2006]
Companies Act- Sections 391-394- Scheme of amalgamation-
Disclosure of material facts- CBI case against officers of the
company not disclosed in the explanatory statement- whether
fatal to the scheme- Held, No.
Brief Facts: A company petition was filed by the transferee company
and four transferor companies, seeking sanction of their amalgamation
scheme, after the same was unanimously approved by their respective
board of directors, and, thereafter, by all concerned. However, the
RD opposed that petition on various grounds, one of which was that
registration of FIR by the CBI against transferee-company had not
been disclosed in the explanatory statement.
Decision: Objection overruled.
Reason: The objection that material facts and the like information
such as registration of FIR by the CBI had not been disclosed which
was a necessary pre-terms of section 391 (2), was unfounded. Though
it was the stand of the transferee company that the FIR was not
registered against it but against its chief executive in his individual
capacity, yet the fact remained that registration of a FIR by itself was
Student Company Secretary
not such a fact, which was required to be disclosed in the proposed
scheme. With the FIR registered, the investigating machinery was
set in motion to find out the veracity of the allegations contained in
such FIR. It was only on completion of investigation, prima facie,
that it could be said that there was allegation of misfeasance, which
might be a relevant fact to be disclosed in the proposed scheme.
Therefore, the non-disclosure of the FIR in respect of some allegations
against the former country manager of the transferee company was
not material fact, the consequence of which could be passed on the
transferee company.
LW(S) 73.12.2006
ANUPAMARANI SATPAL SHARMA v. ANAND STEEL WORKS (P)
LTD.[ (2006) 71 SCL (CLB)] C.D.Paik, Member. [Decided on
16.06.2006]
Companies Act- Sections 397&398- Non filing of statutory returns
and statutory demand- Whether tenable grounds for
mismanagement- Held, No.
Brief Facts: The respondent was a family company. The petitioner,
along with another petitioner filed petition under section 397/398
alleging mismanagement in its affairs in as much as the company did
not file its annual returns and balance sheets for 1999 2000 to 2001
2002; that the working of the company was not properly done; and
that the company had not paid the dues of State Electricity Board
and other tax demands made by the statutory authorities. The
petitioner, therefore, prayed for appointment of an administrator or
special officer to take possession and charge of assets and properties
of the company and to appoint an independent firm of chartered
accounts to accountants to investigate into the accounts and affairs
of the company.
Decision: Petition dismissed.
Reason: In the instant case, the petitioner came to know about the
alleged mismanagement in the company in 2001 and filed the petition
in 2002. That short delay could not be considered as an inordinate
delay. Though the petitioner had pleaded that there was just and
equitable ground under section 433(f) for winding up of the company,
the petitioner had failed to establish that effect. The petitioner had
alleged that the company and R-2 and 3 had violated the provisions
of the Act by not filing annual returns and balance sheets for three
years. However, the Registrar of Companies and against the company
and its directors. Assuming that the company had not be a ground
for action under section 397/398 on the petition filed by the petitioners.
No doubt, there were certain demands made by the statutory
authorities against the company but the company had challenged
those not be a ground for action under section 397/398. Further, the
petitioner was holding majority shares in the company and she could
call for an extraordinary general meeting of the company on requisition
to remove and appoint directors of the company. If the company
failed to hold AGM in terms of section 166, the petitioner could apply
to the CLB under section in terms of section 166; the petitioner could
apply to the CLB under section 186 to hold the annual general meeting
of the company. Though the alternative remedies were available to
the petitioner, she had not availed the same but filed the petition
under section 397/398, which had no merit and accordingly dismissed.
LW(S) 74.12.2006
GOWRI SPINNING MILLS (P) LTD. v. ASST. PROVIDENT FUND
COMMISSIONER & ANR [(2006)134 Comp Cas 33 (Mad)] A.P.Shah
C.J, D.Murgesan & R.Sudhakar, JJ. [Decided on 10.10.2006]
Section 22 of SICA read with EPF Act- Recovery of PF contribution
from a sick company- company resisting recovery under the
SICA- Whether section 22 of the SICA applicable to EPF Act.
Issue: Facts are immaterial in this case. The important issue decided
in this case was whether section 22 of the SICA applicable to the
recovery of employers contribution of provident fund.
20 December 2006
 LEGAL WORLD
Decision: Section 22 of the SICA not applicable to EPF Act.
Reason : Sick Industrial Companies (Special Provisions) Act, 1985,
and the Employees Provident Funds and Miscellaneous Provisions
Act, 1952 are special statutes. Whereas the object of enactment of
the 1985 Act was to provide for the revival and rehabilitation of sick
industrial companies, the object of the 1952 Act was to provide social
security to employees. The contribution of the employee and the
employer towards provident fund is not a tax due. It is also not an
amount recoverable under a contract. The moneys, which have been
deducted from the wages of the employees as well as the amounts,
which the employer is required to pay as its contribution, belong to
the employees and constitute their rightful and just entitlement for
the eventual payment of provident fund benefits.
The provisions of section 22(1) of the 1985 Act have no application
to the provident fund dues and the provisions of the 1952 Act would
not come with in the purview thereof. The provident fund and other
dues payable under the 1952 Act are part of the legitimate statutory
settlement of the workers. An account which is required to be
maintained in the name of each member of the provident fund contains
the contribution of the employee, the employer as well as the interest,
which has been credited. An employer cannot refuse to comply with
the statutory mandate to pay the contribution made by the employee
as also his share. Although the object of the 1985 Act is laudable, it
should not deprive the hard earnings o f the employees. It does not
and cannot stay the recovery of money to which the employees are
entitled by way of social security.
LW(S) 75.12.2006
J.B.EXPORTS LTD. & ANR v. BSES RAJDHANI POWER LTD.
[(2006) 134 Comp Cas 106 (Del)] Markandeya Katju CJ. & Madan
B. Lokur, J. [Decided on 03.03.2006]
Piercing of corporate veil- Electricity connection in the name of
subsidiary while holding company using the connection- Whether
sub letting- Held No.
Brief Facts: Appellant No.1 is the holding company of appellant No.2.
Appellant No.2 was the registered consumer of electricity, using the
electricity load for the premises. After becoming the subsidiary of
appellant No.1, Appellant No.2 stopped business activity of its own.
The respondent sent a show cause notice to appellant No.2
demanding sub letting charges and load violation charges. The single
judge upheld the notice on the issue of sub letting. The appellants
appealed to the Division bench.
Decision: Appeal allowed.
Reason: The purpose of the principle of separate corporate
personality is to encourage and facilitate industrialization, not to
obstruct it. Hence, a mechanical interpretation of the principle of
corporate personality is to be avoided, as it may frustrate the very
purpose for which it was mad viz. to promote growth of industries.
Consequently, the doctrine of piercing the corporate veil of corporate
personality should be adopted not merely in cases of fraud or evasion
of legal obligations but also in a large number of cases where it would
promote the growth of industry. In this way, both the principle of
corporate personality as well as its exception, viz the doctrine of
piercing the veil of corporate personality would serve a common
complementary purpose, namely to promote industrialization.
It was not the case of the respondent that its bills were not being
paid or that any fraud had been committed. The entire share of
appellant No.2 belonged to appellant No.1. It was only appellant
No.1, which conducted its operations and business in the premises
in question. The electricity connection had later in fact been
transferred in its name formally. Under these circumstances the
Student Company Secretary
principle of piercing the veil of corporate personality should be applied.
A sub letting could be done by A in favor of B but when A and B were
both treated as the same entity by applying the principle of piercing
the veil of corporate personality, there was no question of sub letting.
GENERAL LAWS
LW(S) 76.12.2006
PRASHANT GOEL v. STATE & ANR [134 (2006) DLT 221)
A.K.Sikri,J. [Decided on 2.8.2006]
Negotiable Instruments Act, 1881- Section 138 & 142- Dishonour
of cheque- Condonation of delay in filing complaint- Whether
the accused is entitled to receive notice of the condonation of
delay application- Held, Yes. Procedure to deal with such belated
complaint laid down.
Brief Facts : The respondent No.2, herein had filed a complaint under
Section 138 of the Negotiable Instruments Act against the petitioner
on the basis of dishonour of the cheque issued by him. As on the
date of filing of the said complaint it was admittedly time barred.
Because of this reason, complainant had also prayed for condonation
of delay. The Trial Court condoned the delay and issued summons to
the petitioner. The accused petitioner challenged this summoning
order before the High Court.
Decision : Petition allowed.
Reason : It may be noted that when Section 138 was added, there
was no provision for condonation of delay in filing the complaint under
the said provisions. This power to the MM to condone the delay has
been conferred by amendment made vide Negotiable Instrument
(Amendment and Miscellaneous Provisions) Act, 2002. Thus, the
Magistrate is now entrusted with the power to condone the delay.
Therefore, when the complaint is filed, which is time barred and along
with the complaint an application for condonation of delay is preferred,
appropriate procedure would be to first issue notice only in the
application to the other side without taking cognizance of the
complaint. On notice being issued and after hearing the parties, if the
Court comes to the conclusion that there is no ground to condone the
delay then application for condonation of delay is to be dismissed
which will entail in dismissing of complaint as well as barred by
limitation.
On the other hand if the Court is of the opinion that there are
sufficient grounds to condone the delay and delay is condoned then
the MM can condone the delay which will have the effect of the
complaint as initially filed and the learned MM can deal with the
complaint in accordance with procedure contained in Section 200,
Cr.P.C. to other side before condoning the delay.
The impugned summoning order is set aside. The learned Trial
Court is directed to first decide the issue of limitation after giving an
opportunity of hearing to the accused petitioner.
LW(S) 77.12.2006
ALL INDIA ITDC WORKERS UNION & ORS. v. ITDC & ORS. [JT
2006 (9) SC 585] Dr.AR.Lakshmanan & A.K.Mathur, JJ. [Decided
on 31.10.2006]
Constitution of India- Writ jurisdiction- Disinvestment policy-
ITDC hotel units- ITDC hived off hotel units to affront companies-
Shares of held by the Government in these companies sold to
private parties- Workers challenging the sale- Whether
sustainable- Held, No.
Brief facts: The respondent Public sector corporation (PSU) divested
several of its hotel units in pursuant to the disinvestment policy of the
Government of India. As per the scheme each hotel of the Corporation
was converted into a private company and the Governments stake
in this affront company was sold to private party. Workers belonging
to these divested units challenged the sale of hotel units made by the
respondent corporation.
21 December 2006
 LEGAL WORLD
Decision: Petition dismissed.
Reason: We have given our thoughtful consideration to the rival
submissions made by the respective counsel appearing for the
respective parties. In our opinion, the present writ petitions filed by
the employees merits to be dismissed. Since disinvestments was a
policy decision of the Government of India. This Court also has held
that the said policy decision should be least interfered in judicial review
and that the Government employees have no absolute right under
Article 14, 21 and 311of the Constitution of India and that the
Government can abolish the post itself. In the present case, the
petitioners are not government servants and are merely employees
of a public sector undertaking. This apart, the service conditions of
the petitioners are being protected under the new management on
the disinvestments of the Hotel and the fact that other hotels are also
in an advanced stage of disinvestments in pursuance of the policy
decision taken by the Government of India for disinvestments of the
hotel units. We see no reason to interfere with the afore said decision.
In case ultimately the petitioners are aggrieved by a by aspect of
terms of reference and formalization of agreement and completion of
disinvestments it is always open to the petitioners to approach the
courts for redressal of their grievances.
LABOUR LAWS
LW(S) 78.12.2006
BEED DISTRICT CENTRAL CO-OPERATIVE BANK LTD. v. STATE
OF MAHARASHTRA & ORS [JT2006 (9) SC 260] S.B.Sinha &
Dalveer Bhandari, JJ [Decided on 29.9.2006]
Payment of Gratuity Act, 1972- Section 4- Bank had own gratuity
scheme- Employees opted for it- Bank paid gratuity according
to the scheme upon their retirement-Later they claimed gratuity
based on the Gratuity Act- Whether permissible- Held, No.
Brief facts: Appellant bank had its own gratuity scheme. Certain
employees opted for this scheme and got gratuity upon their
retirement. Later they claimed gratuity based on the Payment of
Gratuity Act, 1972. The bank refused and the employees approached
the High Court, which ruled in their favour. The appellant bank
challenged the order of the High Court before the Supreme Court.
Decision: Appeal allowed.
Reason: Applying the Golden Rule of interpretation of Statute, to us
it appears than the question should be considered from the point of
view of the nature of the scheme as also the fact at the parties agreed
to the terms thereof when better terms are offered, a woman takes it
as a part of the package. He may volunteer therefore, he may not,
Sub Section (5) of Section 4 of the 1972 Act provides for a right in
favour of the workman. The workman concerned may exercise such
a right. He need not necessarily do it. It is the right of individual
workman and not all the workmen. When the expression terms
have been used, ordinarily it mush mean all the terms of the contract.
While interpreting even a beneficent statute, like Payment of Gratuity
Act, we are of the opinion that either contract has to be given effect to
or the statute. The provisions of the Act envisage for one scheme. It
could be segregated. Sub-section (5) of Section 4 of the 1972 Act
does not contemplate that the workman would be at liberty to opt for
better terms of the contract, while keeping the option open in respect
of a part of the statute. While reserving his right to opt for the
beneficent provisions of the stature or the agreement, he has to opt
for either of them and not the best of the terms of the statute as well
as those of the contract. He cannot have both. If such an interpretation
is given, the spirit of the Act shall be lost.
We are, therefore, of the opinion that the workman cannot opt for
both the terms. Such a construction would defeat the purpose for
which Sub-Section (5) of Section 4 has been enacted. For the reasons
afore mentioned the impugned judgment cannot be sustained, which
is set aside accordingly.
Student Company Secretary
CLARIFICATION REGARDING HINDI MEDIUM
Queries are often being received by the Institute with regard
to the option of medium for pursuing the Company Secretaryship
Course.
It is clarified that the students may opt for pursuing the course
in English/Hindi medium. However, the study material at present
is available in English medium only. In any case, the students
can enjoy the facility of submitting their response sheets to the
test papers under the Postal Tuition Scheme in English or Hindi
medium. Similarly, they can opt to write the Institutes main
examination in English or Hindi Medium.
As regards writing of examination, the option is to be
exercised while filling up the examination form as and when the
students intend to appear in the examination. This option is to
be exercised on group wise basis and not on individual basis.
Answering to test papers and writing examination partly in
English and partly in Hindi medium is not permissible.
E-MAIL ADDRESS OF THE STUDENTS
Those students who are having e-mail address may communicate
the same to the Students Services Section at dss@icsi.edu which
will facilitate quick and economic communication from the Institutes
side. The e-mail address may be sent in the following format.
Name :
Registration No. :
E-mail Address :
Attention Students!
REVISION OF EXAMINATION FEE FROM DECEMBER, 2006
The Examination Fee stands revised from December, 2006
session of examination as under :
1. Foundation Exam : Rs. 875 (Lumpsum)
2. Intermediate Exam : Rs. 900 (Per Group)
3. Final Exam : Rs. 750 (Per Group)
UNIFORMITY IN SIGNATURES
It has been observed that some of the enrollment applications/
letters received from the students are either unsigned or bear
different signatures from time to time.
All the students are, therefore, advised to maintain uniformity
in their signatures on all the correspondence with the Institute
including students identity card, enrolment application and
attendance sheet provided in the examination hall at the time of
writing the examination.
ATTENTION STUDENTS!
Fee Concession to Physically Handicapped
The Council of the Institute has decided to grant 50%
concession in payment of Registration/Examination Fees by the
candidates belonging to Physically Challenged (including
blindness) category with effect from 1st July 2006. For availing
the aforesaid benefit, such applicants/students will be required
to submit a certificate issued by the Medical Supdt. of a State/
Central Government Hospital to this effect.
22 December 2006
 STUDENTS SERVICES
STUDENTS SERVICES
REGISTRATION AND POSTAL TUITION
1. CANCELLATION OF REGISTRATION
Registration of students registered upto and including the month
of January, 2002 stands terminated on expiry of five-year period on
31 st December, 2006 leading to the following immediate
consequences :
(a) Supply of Student Company Secretary bulletin will be discon-
tinued from January, 2007 onwards.
(b) Response sheets will not be accepted even if submitted and
coaching completion certificates will not be issued (after the ex-
piry of registration period)
They are advised to apply for registration de novo/extension of
registration as per the guidelines published in this bulletin.
2. CHANGE OF ADDRESS
Change of address, if any, should be intimated to the Institute by
sending a separate letter in this regard. While intimating the change
in their mailing address, the students are advised to invariably quote
the PIN CODE number alongwith the student registration number,
name and full postal address with city, state in capital letters.
PIN CODE is required to be mentioned for quick delivery of the
mail. Students may, therefore, check up the computerised mailing
address as printed on the Student Company Secretary bulletin.
In case, it does not carry or carry the wrong PIN CODE number,
the same may be intimated immediately quoting student registration
number and full postal address with Postal Index Number so that it
could be incorporated in the computerised mailing list.
3. STUDENTS IDENTITY CARD
All the students appearing in the examination must hold Identity
Card in the manner prescribed by the Institute, if not already obtained
at the time of seeking registration. For obtaining the Identity Card,
students are advised to obtain a proforma from the Headquarters/
Regional Offices of the Institute and send it again to the Institute duly
filled up and attested as per instructions given in the prospectus/
registration letter.
Students who have so far not obtained Identity Cards are
advised to write to the Institute immediately. The students should
carry their Identity Cards without fail for appearing in the Institutes
examination. If the Identity Card already issued has been lost or
mutilated, student should send a request for obtaining duplicate
Identity Card together with the mutilated Identity Card/Identity Card
proforma duly filled in and attested together with Rs. 50/- towards
duplicate Identity Card fee.
4. COMPULSORY ENROLMENT FOR FINAL COURSE
Students who have passed/completed both groups of Intermediate
examination are advised to seek compulsory enrolment for undergoing
coaching for the Final course on payment of Rs.4200/- towards postal
tuition fee. While applying for Final Enrollment, students are advised
to invariably quote their Registration Number and Complete Postal
Address with Pin Code for prompt action in the matter.
Please note that a student is admitted to the final examination
only after a minimum period of nine calendar months has elapsed
since his/her passing the Intermediate examination and subject to
completion of coaching and fulfillment of other requirements.
5. ISSUE OF ADMISSION CERTIFICATES FOR
DECEMBER, 2006 EXAMINATION
The admission certificates for December, 2006 examination have
been sent by ordinary post to all the eligible students. Similarly,
students who have not been admitted on account of non-completion
Student Company Secretary
of postal or oral tuition or any other reason such as late submission
of application, cancellation of registration, etc. have also been informed
accordingly. Simultaneously, the Admit Card Extracts have also been
uploaded in the website of the Institute viz. www.icsi.edu.
All the students are hereby advised to carefully check up the
particulars viz. Name, Centre, Medium, Group, Exemptions granted,
etc. shown in the Admit Card Extracts which are available on the
website of the Institute. If they come across any discrepancy and/or
non-availability of Admit Card on the website, it should at once be
brought to the notice of Mr. T P Balasubramanian, Administrative
Officer (Tel. 011-41504444 Extn. 515) for verification/ rectification.
While the requests for duplicate Admission Certificates are
promptly being attended to by the Headquarters, students may, as
per their convenience, also download Admit Card Extract from the
website of the Institute which alongwith the Student Identity Card
issued by the Institute will hold good for appearing in the CS
Examinations.
Alternatively, the students may approach Regional /Chapter/
Satellite Chapter Offices for issue of duplicate Admission Certificates
from 21st December, 2006 onwards.
6. CLARIFICATION REGARDING PAPERWISE
EXEMPTION
(a) The paperwise exemption is granted only on the basis of spe-
cific request received in writing from a registered student along
with the attested photocopies of marks sheets for all parts of the
Degree/examination (on the basis of which the paperwise ex-
emption is sought) and the exemption fee @ Rs. 100/- per pa-
per. It is one time payment and not to be remitted for availing of
paper wise exemption in every session of examination during
the validity of registration period.
(b) The application for claiming paperwise exemption must reach
the Institute on or before the last date for submission of enrol-
ment application i.e. 25th March and 25th September for June
and December examinations respectively and with a late fee of
Rs. 100/-, the application can be accepted upto 9th April and 10th
October respectively.
(c ) The paperwise exemption once granted holds good during the
validity of registration period or passing/completing the exami-
nation, whichever is earlier.
(d) The paperwise exemption is cancelled only on receipt of a spe-
cific request in writing from the student concerned on or before
the last date for submission of the enrolment application. If any
candidate appears in the exempted paper(s) of examination with-
out receiving the written confirmation from the Institute, but by
making personal representation, appeal, request, etc., at the
Examination Centre at the last moment, his/her appearance in
such paper(s) shall automatically be treated as cancelled.
(e) It may be noted that candidates who apply for grant of paper
wise exemption or seek cancellation of paper wise exemption
already granted, before the last date of submission of enrolment
applications for a particular examination, must see and ensure
that they receive written confirmation from the Institute at least
15-20 days prior to the commencement of the examination.
Candidates who would presume automatic grant or cancellation
of paper wise exemption without obtaining written confirmation
on time and absent themselves in any paper(s) of examination
and/or appear in the exempted paper(s) would do so at their
own risk and responsibility and the matter will be dealt with as
per the above guidelines.
(f) Exemption once cancelled on request in writing shall not be
granted again under any circumstances.
(g) The candidates who have passed either group of the Intermedi-
ate/Final examination under the old syllabus, may claim the
paperwise exemption in the corresponding subject(s) of new
23 December 2006
 STUDENTS SERVICES
syllabus indicating the basis of exemption as APO in the ap-
propriate column of the enrolment application.
(h) In case the paperwise exemption has already been granted on
the basis of qualification or the candidates is eligible for grant of
exemption on the basis of securing 60% or more marks, a pho-
tocopy of the letter/marks-sheet issued by the Institute should
be enclosed with the enrolment application while claiming such
exemption, failing which the same may not be granted for the
ensuing examination.
(i) No exemption fee is payable for availing paperwise exemption
on the basis of APO or on the basis of securing 60% or more
marks in the Institutes examination.
(j) Paperwise exemption fee is payable only when the exemption is
to be availed on the basis of qualification(s) specified for the
purpose.
EXAMINATION
1. DECEMBER, 2006 EXAMINATION
The next examinations for the Foundation Course, Intermediate
and Final, scheduled in December, 2006 will be held from Tuesday,
the 26th December, 2006 to Wednesday, the 03rd January, 2007, as
per the Time-Table and Programme published on the last cover page
of this issue
The list and addresses of the examination centers is also published
elsewhere in this issue.
NOTE:
(i) *Aurangabad and Bareilly Examination Centres opened for
June, 2006 and December, 2006 sessions only purely on an
experimental basis and their continuance will be subject to
review and minimum number of students taking the
examination.
(ii) The Institute reserves the right to withdraw any examination
centre at any stage without assigning any reason.
2. USE OF CALCULATORS IN EXAMINATIONS
Candidates are allowed to bring and use their own battery operated,
noiseless and cordless pocket calculators with not more than 6
functions, 12 digits and 2 memories. Exchange or lending/borrowing
of calculators among students is forbidden in the examination hall.
3. HINDI AS AN OPTIONAL MEDIUM OF WRITING
EXAMINATION
Candidates are allowed to use Hindi as an optional medium for
writing all papers of the Foundation (except: English & Business
Communication paper), Intermediate and Final examinations on
the following conditions:
(i) option of Hindi Medium for writing the examination is to be
exercised for all papers of an examination OR a particular group
of examination, and not for any individual paper(s) in the
enrolment application form each time for appearing in the
examination;
(ii) option of medium for writing examination once exercised is
irrevocable for that particular session of examination;
(iii) answer books of candidates who write part of papers/answers
in one medium and the remaining part in other medium are liable
to be cancelled without any notice;
(iv) candidates who have exercised option of Hindi medium in their
examination enrolment form for writing Foundation examination
and Group-I of Intermediate examination will be provided
Question Papers printed both in English and Hindi version
(except for English & Business Communication paper,
Student Company Secretary
7. IMPORTANT
While making any correspondence regarding examination, the
students are advised to quote the following particulars for taking
prompt action :
i) Name in full (ii) Student Registration number (iii) Stage of
examination (Intermediate/Final) (iv) Group opted (v) Centre opted
(vi) Particulars of fee remitted, i.e. Demand Draft (printed) number,
date , amount, name of the bank and its branch (vii) Date and mode
of despatch of enrolment application and their complete address with
PIN code, telephone number, mobile number or e-mail address.
In case of any specific problem/complaint regarding registration,
post-registration, students services and postal/oral coaching, students
may contact personally or write to Sohan Lal, Joint Director and for
academic guidance and suggestions, if any, students may write to V
K Aggarwal, Principal Director, at the Institutes address.
which will be printed/required to be answered in English
only). The Question Papers for Group-II of the Intermediate
examination and all papers of Final examinations will be printed
in English version only;
(v) if a candidate writes his/her answers in Hindi medium without
exercising such an option in the enrolment application form, he/
she may not be given credit for his/her answers;
(vi) candidates opting Hindi medium for the examination must write
HINDI MEDIUM in bold letters on the top of the cover page of
Answer Book No.1, 1B, as the case may be; and
(vii) candidates opting Hindi medium for the examination may write
answers to practical questions, headings, quotations, technical
and legal terms, sections, rules, etc., in English medium, if they
so desire.
4. IMPORTANT INSTRUCTIONS TO EXAMINEES
Candidates enrolled for appearing in the December, 2006
examinations are advised to carefully read and observe the
Instructions to Examinees printed on the Admission
Certificate (Roll Number) and enclosures thereto, and also
on the Question Papers and Answer Books. However,
attention of candidates is especially invited to the following
instructions:
(i) on receipt of Admission Certificate (Roll No.), first of all, the
candidates must verify carefully the entries appearing therein.
Discrepancy/error, if any, in the Admission Certificate concerning
spellings of his/her name, stage of examination and examination
centre; medium of writing the answers, subject of examination
in which exemption was sought/shown, etc., should, at once, be
brought to the notice of the Shri Sohan Lal, Jt. Director (Students
Services) well on time before commencement of the examination;
(ii) candidates are required to bring daily to the Examination Hall
their Admission Certificates and Student Identity Cards failing
which they may not be allowed admission to the Examination
Hall and/or to appear in the examination;
(iii) before attempting to write answers in the answer book, each
candidate must write his/her Roll Number on the special
slip affixed to Answer Book Nos. 1, 1-B and 1-C, date of
examination, stage of examination, name of the paper, etc.
against the relevant columns on the first page of the main
answer book and also on the top of Question Paper;
(iv) candidates must attempt questions in accordance with the
directions given on each Question Paper. If the questions
are attempted in excess of the prescribed number, only the
questions attempted first upto the required numbers will
be valued and awarded marks and the remaining questions
will be ignored;
24 December 2006
 STUDENTS SERVICES
(v) Questions relating to graph/prcis should be attempted only on
graph/prcis sheets appended as last page to the Answer Book
wherever required. Do not write your roll number on the Graph/
Prcis Sheets and additional Answer Book No. 2. The additional
answer book(s) used, if any should be fastened along with the
main answer book. Candidates who fail to observe this
instruction will be penalised;
(vi) each question should start on a fresh page and sub-
question(s) be attempted consecutively;
(vii) while attempting a fresh question/sub-question, candidates
should distinctly mention respective question number against
the answer in bold capital letters with coloured sketch pen/
different colour ink and underline the same (e.g. ANS. TO Q.
NO. 3(A) on the left-hand side margin of the answer book and
also simultaneously mark (X) in the table provided on the cover
page against the respective question number;
(viii) candidates must not, for any reason whatsoever, tear out any
page(s) from the Answer Book or leave any blank page or unused
spaces in between the pages. If such spaces are left score
them out. If a candidate uses more than one answer book, he/
she should, indicate on the cover page of main answer book,
the total number of answer books;
(ix) candidates are expected to write precise and to the point
answers to questions set in for the examinations in neat
and legible handwriting citing relevant provisions of the Act/
rules quoting case laws, etc., in support of the answers
wherever applicable;
(x) no candidate shall leave/be allowed to leave the Examination
Hall; (i) within first one hour of commencement of
examination (ii) during last 15 minutes of examination
timing; (iii) without signing the attendance sheet; and (iv)
without properly handing over his/her answer books to the
Invigilator on duty;
(xi) a few minutes prior to the time of conclusion of examination
or before handing over the answer books to the supervisory
staff, candidates must re-check and ensure that they have
filled up relevant particulars on the cover page of Answer
Book Nos. 1, 1-B and 1-C, as the case may be, and properly
tied up all the additional answer book(s) No.2 along with
the main answer book;
(xii) candidates should strictly adhere to the instructions being
given by the Invigilator(s)/Supervisors in the Examination
Hall;
(xiii) candidates are strictly forbidden to carry with them into
the Examination Hall any book or printed/handwritten
material, notes, pager, mobile phone, etc., OR to talk or
converse inter se with other candidates in the Examination
Hall;
(xiv) candidates are further strictly forbidden to copy from the answer
papers of any other candidate nor allow their answers to be
copied nor give nor attempt to give nor obtain nor attempt to
obtain irregular assistance of any description. It will be the
responsibility of each and every candidate to ensure that his/
her answers are not copied by another candidate. Failure to do
so will invite stern disciplinary action and penalty for adoption of
unfair means;
(xv) no candidate shall leave his/her seat in the examination hall
during the course of examination without the specific
permission of the Invigilator on duty for any reason
whatsoever;
Student Company Secretary
(xvi) on completion of examination or expiry of the prescribed
examination timing, the answer book(s) must be handed
over immediately to the Invigilator on duty and Invigilators
signature be obtained in the relevant column of
acknowledgement printed on the Admission Certificate in
token of handing over the answer books.
(xvii) it shall be the personal responsibility of the candidate
concerned to properly hand over his/her answer book(s) to
the Invigilator on duty in the Examination Hall and obtain
acknowledgement therefor. Any representation regarding
omission to handover the written answer book(s) or not
obtaining the acknowledgement from the Invigilator at the
time of handing over his/her answer book(s) for any reason
whatsoever will not be entertained after the conclusion of
that particular session of examination;
(xviii) candidates are warned that any attempt to misbehave in any
manner or create disorderly scene in and around the examination
hall or harass or bodily harm the staff deployed for the conduct
of examination will be viewed seriously and severely punished;
and
(xix) any attempt or act of violation of Instructions to Examinees
shall be viewed seriously and entail disciplinary action under
the Company Secretaries Regulations, 1982.
In our endeavour to provide prompt and efficient services to the
student community, the overall status of all the registered students
of the Institute has been uploaded to the website of the Institute
viz. www.icsi.edu. The information can be accessed as under:
. Visit the Home Page
. Click on the tab 'Overall Status' under the Group
'Students'
. Enter Full Registration Number
. Press Tab Key
. Wait for the name to appear on the adjacent field
. Click on the tab 'Go'
The students may verify the particulars contained therein viz.
Student's Name, Father's Name, Date of Birth, Qualification, Paper-
wise Exemption (if any), Complete Postal Address with City, State
and Pin Code, Postal/Oral Coaching Status, etc. In case, they
come across any discrepancy and! or need any clarification/
additional information/service, a written request may be sent to
us by E-Mail as per the details given below:
1. Query regarding Registration Status/
Issue of Study Material, etc. for
(a) Intermediate Course ss_reg@icsi.edu
(b) Foundation Course ss_fond@icsi.edu
(c) De-novo/Extension/Final Enrollment ss_post@icsi.edu
2. Query regarding non-receipt of ss_misc@icsi.edu
Registration Letter/ldentity Card/
Student Company Secretary Bulietin/
CS Foundation Course Bulletin, etc.
3. Query regarding paperwise exemption ss_enrol@icsi.edu
4. Query regarding Coaching ss_coaching@icsi.edu
Completion Certificate/Suggested
Answers and Response Sheet status
5. Query regarding issue of Admission dss@icsi.edu
Certificate/Roll No. for Examinations, etc.
25 December 2006
 STUDENTS SERVICES
COMPANY SECRETARIES EXAMINATION- 18. DELHI (SOUTH) GURU HARKRISHAN PUBLIC SCHOOL
DECEMBER, 2006 (ADJOINING GURDWARA B-BLOCK)
ADDRESSES OF EXAMINATION CENTRES B BLOCK, KALKAJI, NEW DELHI110019
S. EXAMINATION CENTRE ADDRESS 19. DELHI (WEST) TECHNIA INSTITUTE OF ADVANCED
NO. CENTRE STUDIES, INSTITUTIONAL AREA,
1. AGRA ST. JOHNS COLLEGE, M. G. ROAD MADHUBAN CHOWK, ROHINI
AGRA 282002 DELHI 110085.
2. AHMEDABAD SHRI H. K. ARTS COLLEGE, OPP. 20. DUBAI CONSULATE GENERAL OF INDIA
HANDLOOM HOUSE, ASHRAM ROAD DUBAI - U.A.E.
AHMEDABAD380009.
21. ERNAKULAM ST. ALBERTS COLLEGE, BANERJI
3. ALLAHABAD COLONELGANJ INTER COLLEGE, 51, ROAD, ERNAKULAM, KOCHI 682 018
TAGORE TOWN, ALLAHABAD211002
22. FARIDABAD VIDYA MANDIR PUBLIC SCHOOL
4. AMBALA SHRI ATMANAND JAIN COLLEGE, JAIN SECTOR 15-A, FARIDABAD 121007
COLLEGE ROAD, AMBALA CITY
HARYANA - 134002 23. GHAZIABAD SHAMBHU DAYAL (P.G.) COLLEGE
OPP. M.M.G. HOSPITAL, G. T. ROAD
5. AURANGABAD MANIKCHAND PAHADE LAW COLLEGE GHAZIABAD - 201001
SAMARTH NAGAR, AURANGABAD-
431001 24. GURGAON ALPINE CONVENT SCHOOL, BEHIND
JALVAYU TOWERS, SECTOR 56,
6. BANGALORE ST JOSEPHS INDIAN COMPOSITE GURGAON - 122003
JR. COLLEGE, 2, VITTAL MALLYA ROAD
BANGAORE - 560001 25. GUWAHATI GUWAHATI COMMERCE COLLEGE, R.G
BARUAH ROAD,GUWAHATI - 781021
7. BAREILLY MANOHAR BHUSHAN INTER COLLEGE
NAINITAL ROAD, BAREILLY 243001 26. HYDERABAD WESLEY POST GRADUATE COLLEGE
145 Mc INTYRE ROAD, OPP. ANAND
8. BHILWARA SMT.SUSHILA DEVI MATHUR KANYA THEATRE, SECUNDERABAD - 500003
MAHAVIDYALAYA, MAHILA ASHRAM,
PATHIK NAGAR, BHILWARA - 311001 27. INDORE DEVI AHILYA ARTS & COMMERCE
COLLEGE, 8/1, USHA GANJ, JAORA
9. BHOPAL GOVT. MAHARANI LAXMI BAI GIRLS COMPOUND,INDORE - 452001
(AUTONOMOUS) COLLEGE, (NR. GOVT.
S. V. POLYTECHNIC COLLEGE), 28. JAIPUR UNIVERSITY COMMERCE COLLEGE
BHOPAL 462002. JAWAHAR LAL NEHRU MARG
JAIPUR - 302004
10. BHUBANESWAR B. J. B. (AUTONOMOUS) COLLEGE,
LEWIS ROAD, BHUBANESWAR751014 29. JAMMU GOVT. SPMR COLLEGE OF
COMMERCE, CANAL ROAD, OLD
11. CHANDIGARH I.S. DEV SAMAJ GIRLS SENIOR UNIVERSITY CAMPUS, JAMMU -180001
SECONDARY SCHOOL, SECTOR 21-C,
CHANDIGARH - 160022 30. JAMSHEDPUR MRS. K.M.P.M. INTER COLLEGE,
MAIN ROAD, BISTUPUR, JAMSHED-
12. CHENNAI DR. MGR JANKI COLLEGE OF ARTS PUR-831001
(SOUTH) & SCIENCE, 11 & 13, DURGABAI
DESHMUKH ROAD, R A PURAM 31. JODHPUR ONKARMAL SOMANI COLLEGE OF
CHENNAI - 600028 COMMERCE, OPP. KAMLA NEHRU
NAGAR, CHOPASANI HOUSING
13. CHENNAI (WEST) SRI RKM SARDA VIDYALYA GIRLS HR. BOARD, JODHPUR - 342009
SEC. SCHOOL, 134, USMAN ROAD (NR.
PANAGAL PARK), T. NAGAR, 32. KANPUR KANPUR VIDYA MANDIR MAHILA (PG)
CHENNAI 600 017. MAHAVIDYALAYA, 7/147, SWAROOP
NAGAR, KANPUR 208002.
14. COIMBATORE PSG COLLEGE OF ARTS & SCIENCE,
CIVIL AERODROME POST, 33. KOLKATA METROPOLITAN INSTITUTION (MAIN)
COIMBATORE - 641014 (NORTH-MI) 39, SANKAR GHOSH LANE,
15. DEHRADUN GOVERNMENT GIRLS INTER COLLEGE KOLKATA 700006.
22, RAJPUR ROAD, DEHRADUN-248001 Allocation of Examinees:
16. DELHI (EAST) NUTAN VIDYA MANDIR (a) Morning Session
SENIOR SECONDARY SCHOOL,G.T.B. (i) Final Examination All examinees.
ENCLAVE, DILSHAD GARDEN, (ii) Foundation Examination Remaining examinees.
DELHI - 110093 (b) After-Noon Session
(i) Intermediate Examination Both Groups : All examinees.
17. DELHI (NORTH) JVSD GIRLS SR. SEC. SCHOOL, D-II
LINK ROAD, (NEAR BAGGA PETROL 34. KOLKATA ANGLO-ARABIC SECONDARY
PUMP - HANUMAN STATUE), KAROL (NORTH-AASS) SCHOOL, 46/7, MAHATMA GANDHI
BAGH, NEW DELHI - 110005 ROAD, KOLKATA 700 009

Student Company Secretary 26 December 2006

 STUDENTS SERVICES
Allocation of Examinees: 53. RAJKOT LT. M.J. KUNDALIYA ENGLISH MEDIUM
(a) Morning Session MAHILA COMM. COLLEGE, KASTURBA
(i) Foudation Examination First 300 examinees. ROAD, OPP. JAIN DERASAR,
(b) After-Noon Session RAJKOT - 360001
(i) Intermediate Examination Group-I : All examinees.
(ii) Intermediate Examination Group-II : All examinees. 54. RANCHI D.A.V. JAWAHAR VIDYA MANDIR
SHYAMALI, POST DORANDA,
35. KOLKATA JODHPUR PARK BOYS SCHOOL,
RANCHI - 834002
(SOUTH) JODHPUR PARK, KOLKATA700068.
55. SHIMLA S.D. SENIOR SECONDARY SCHOOL
36. LUCKNOW NATIONAL P.G. COLLEGE, 2, RANA SHIMLA - 171001
PRATAP MARG, LUCKNOW - 226001
56. SURAT SIR KP COLLEGE OF COMMERCE
37. LUDHIANA GOVT. COLLEGE FOR BOYS, CIVIL
SPB VANIJYA VIDYA BHAWAN, ATHWA
LINES, LUDHIANA - 141001
LINES, SURAT - 395001
38. MADURAI THE AMERICAN COLLEGE,
TALLAKULAM POST, MADURAI - 625002 57. THANE K. G. JOSHI COLLEGE OF ARTS,
N.G. BEDEKAR COLLEGE OF COMM.,
39. MANGALORE S. D. M. LAW COLLEGE CHENDANI, BUNDAR ROAD,
MANGALORE - 575003 THANE - 400601

40. MEERUT N.A.S. COLLEGE, E.K. ROAD, 58. TRIVANDRUM GOVT. ARTS COLLEGE THYCAUD
MEERUT - 250002 POST, THIRUVANANTHAPURAM-
695014
41. MUMBAI (CG) SYDENHAM COLLEGE OF COMMERCE
AND ECONOMICS, B. ROAD, 59. TIRUCHIRAPALLI ST. JOSEPHS COLLEGE (AUTONO-
CHURCHGATE, MUMBAI 400020 MOUS), TEPPAKKULAM (POST)
42. MUMBAI (GTK) SMT. PN DOSHI WOMENS COLLEGE TIRUCHIRAPALLI - 620002
OF ARTS (SNDT COLLEGE), RATAN 60. UDAIPUR M.V. SHRAMJEEVI COLLEGE, JRN
BAUG, CAMA LANE, GHATKOPAR
RAJASTHAN VIDYAPEETH, NEAR
(WEST), MUMBAI - 400086
TOWN HALL, LINK ROAD,
43. MUMBAI (JOG) GOVT. OF MAHARASHTRA I.Y. UDAIPUR- 313001
COLLEGE OF ARTS, SCIENCE AND
61. VADODARA FACULTY OF LAW, M.S. UNIVERSITY OF
COMMERCE,JOGESHWARI (EAST),
MUMBAI - 400060 BARODA, NEAR RAILWAY STATION,
SAYAJIGANJ, VADODARA - 390002
44. MYSORE SBRR MAHAJANA PRE-UNIVERSITY
COLLEGE, JAYALAKSHMIPURAM, 62. VARANASI M.G. KASHI VIDYAPEETH, UNIVERSITY
MYSORE - 570012 CAMPUS, VARANASI 221002

45. NAGPUR HISLOP COLLEGE, TEMPLE ROAD, 63. VIJAYAWADA SATAVAHANA COLLEGE,
CIVIL LINES, NAGPUR - 440001 SITARAMAPURAM, ELURU ROAD
VIJAYAWADA 520002
46. NASHIK BYK COLLEGE OF COMMERCE
COLLEGE ROAD, NASHIK - 422005 64. VISAKHAPATNAM VISAKHA GOVT. DEGREE COLLEGE
(WOMEN), OLD JAIL ROAD,
47. NOIDA GOVERNMENT INTER COLLEGE VISAKHAPATNAM 530020.
SECTOR 12, NOIDA - 201301
65. YAMUNA NAGAR D.A.V. COLLEGE FOR GIRLS
48. PANAJI S.S.DEMPO COLLEGE OF COMMERCE JAGADHARI ROAD, YAMUNA NAGAR -
AND ECONOMICS, SERRA BUILDING 135001
(NEAR A.I.R.), ALTINHO, PANAJI- 403001
49. PATNA MAGADH MAHILA COLLEGE, NORTH
GANDHI MAIDAN, PATNA - 800001 PROHIBITION ON CARRYING MOBILE PHONES
50. PONDICHERRY BHARATHIDASAN GOVT. COLLEGE TO EXAMINATION VENUE
FOR WOMEN, MAHATMA GANDHI
ROAD, MUTHIALPET, PONDICHERRY- Candidates intending to appear in the Company Secretaries
605003 examinations may note that carrying of Mobile phones, pagers or
any other communication devises are strictly prohibited into the
51. PUNE MIT JUNIOR COLLEGE, MIT SCHOOL premises where Company Secretaries examinations are
CAMPUS, 127/1/A PAUD ROAD, conducted. Candidates are, therefore, advised not to bring any
PUNE - 411038 such prohibited items to the examination venue, as the Institute
and/or the Examination Centre Staff shall not be responsible for
52. RAIPUR SCHOOL OF STUDIES IN COMPUTER safekeeping of any such item(s). Infringement of these instructions
SCIENCE, PT. RAVI SHANKAR SHUKLA shall tentamount to adoption of unfair means and entail disciplinary
UNIVERSITY, RAIPUR 492010 action.

Student Company Secretary 27 December 2006

 SCHEDULE OF ACADEMIC DEVELOPMENT PROGRAMMES (ADP)
Every student of the Institute who has been sponsored for 15 months training either in a company or under a Company Secretary in Practice is
compulsorily required to attend and complete 25 Hours Academic Development Programme (ADP). The duration of each ADP would be eight hours
and those who have attended three such programmes would be deemed to have attended 25 Hours ADP.
Fee Rs. 250/- per participant
The Schedule of ADPs proposed to be organized by EIRC & NIRC is as under :
Organised by Day & Date Venue of the Contact Address
Programme
EIRC of 18.02.2007 EIRC Premises Executive Officer, EIRC of the ICSI, ICSI-EIRC Building, 3-A, Ahiripukur 1st
the ICSI Lane, Kolkata-700019 Tel. : 22832973/ 22816541/22816542 Fax : 22816542
E-mail : eiro@icsi.edu
NIRC of 06.01.2007 NIRC Premises Executive Officer, NIRC of the ICSI, ICSI-NIRC Bldg., Plot No. 4, Prasad
the ICSI Nagar Institutional Area, New Delhi-110005 Tel. : 25763090/25767190/25816593
Fax No. : 25722662 (STD Code No. 011) E-mail : niro@icsi.edu/icsi@eth.net

SCHEDULE OF TRAINING ORIENTATION PROGRAMMES (TOP)

Organised by Day & Date Venue of the Programme Contact Address
EIRC of 06.02.2007 EIRC Premises Executive Officer, EIRC of the ICSI, ICSI-EIRC Building, 3-A, Ahiripukur 1st
the ICSI to Lane, Kolkata-700019 Tel. : 22832973/22816541/22816542
10.02.2007 Fax : 22816542(STD Code % 033) E-mail : eiro@icsi.edu
Bbubaneswar Second week Chapter Premises Bhubaneswar Chapter Office ICSI Building, Plot No. 70, VIP Colony, IRC Village
Chapter of of January, Bhubaneswar-751015 Tel. : 2552282 (STD Code : 0674)
EIRC of ICSI 2007 E-mail : bhubaneswar@icsi.edu
SIRC of 08.01.2007 SIRC Premises Deputy Director SIRC of the ICSI, SIRC-ICSI House No. 9, Wheat Crofts
the ICSI to Road, Nungambakkam, Chennai-600034 Tel. : 044-28279898/28268685
12.01.2007 Fax No. : 044-28268685 E-mail : icsisirc@md3.vsnl.net.in/siro@icsi.edu

STATUS OF TRAINING
(Period from 1-11-2006 to 30-11-2006)
15 Months Training with Company/Company Secretary in Practice and 03 Months & 15 days Practical Training
STAGE-I STAGE-II
Biodata of the students sent to the companies/company Students sponsored for training
secretaries in practice for consideration
APPLICATIONS CASES
Pending Received Forwarded for Pending Pending Received No. of students Pending
Training as on during the consideration as on as on during who have actually as on
Type 31.10.06 month (upto 30.11.06) 30.11.06 31.10.06 the month taken for training 30.11.06
(upto 30.11.06)
15 Months in 05 25 22 08 05 30 29 6
Companies
15 Months with NIL 30 19 11 NIL 42 35 07
CS in Practice
3 Months in NIL 55 55 NIL
Company/
15 Days in
Optional Area
2. Exemption
1. Number of applications pending as on 31.10.2006 : 15
2. Number of applications received for exemption : 38
3. Number of exemptions granted : 43
4. Number of pending applications as on 30.11.2006 : 10

Student Company Secretary 28 December 2006

LIST OF THE COMPANIES REGISTERED FOR
IMPARTING TRAINING DURING THE MONTH OF
OCTOBER 2006
Region
Northern Region
Shree Nirman Limited
4, Scindia House
New Delhi-110001
Anjani Technoplast Limited
A-4, Hosiery Complex
Phase-II, Extn.
Noida-201304
Suncity Projects Pvt. Ltd.
N-49, First Floor,
Connaught Place
New Delhi-110001
Southern Region
S-Lon Manekya Plastichem Pvt. Ltd.
Plot # 5, Belavadi Industrial Area
Hunsur Road,
Mysore-570018
Caterpillar India Private Limited
RMZ NXT Campus, I A-3rd Floor
Whitefield, Bangalore-560066
Dhanvantri Enterprises Pvt. Ltd.
RS No. 19/6, Mylam Road,
Sedarapet, Pondicherry-605111
Western Region
ADF Foods Limited
C-23/24, Acme Industrial Estate
3rd Floor, Sewree Bunder Road,
Sewree (East), Mumbai-400015
Ventura Textiles Limited
313, Midas, Sahar Plaza
J.B. Nagar, Andheri (East)
Mumbai-400059
LIST OF PRACTISING MEMBERS REGISTERED FOR
THE PURPOSE OF IMPARTING APPRENTICESHIP
TRAINING DURING THE MONTH OF OCTOBER, 2006
1. K. VENKATA CHALAMA REDDY
12-2-823/C/56, Flat No. 102
Sidddev Urvgi Apartments
S.B.I. Colony, Mehdipatnam
Hyderabad-500028
2. J. JOHN OHILVI
No. 51A, East of Medical College
Asaripallam, Nagercoil-629201
3. SHARAD TYAGI
B-67, IIIrd Floor, Soami Nagar
New Delhi-110017
4. MS. SANJANA JAIN
409-A, V.S. Pathik Nagar
Bhilwara-311001
5. SURYA PRAKASH JETHLIA
1-A-23, R.C. Vyas Colony
Shiv Mandir Lane
Bhilwara-311001
6. NEVILLE K. DAROGA PCSA-1414
N-29, 4th Floor, Godrej Baug
Off Nepeansea Road
Training Stipend Mumbai-400036
Period (Rs.) 7. PRADEEP KUMAR LAMBA PCSA-1415
F-6, J.K. Complex
15 and 03 Months Suitable Opp. Petrol Pump, Gorakhpur
Practical Training Jabalpur-482001
15 Months Suitable 8. M. MANJUNATHA REDDY PCSA-1416
Training # 42/2, 6th Cross, 6th Main
Near Playground, Malleshwaram
Bangalore-560003
15 Months Suitable
Training
REFERENCER-ICL AND ICSP
The Institute has brought out a Referencer containing updates
of Company Law and Company Secretarial Practice in the light
15 Months 2500 of MCA-21 (emergence of e-governance era). The Referencer is
available at the Study Updates section of website and at the Head
Training
Office, Regional Offices and Chapter Offices. The Students may
procure the Referencer free of cost by sending a self-addressed
envelope of size of 10"x8" plus flap with prepaid postage stamps
15 Months 8000- of Rs. 5/- addressed to Mr. Harish Joshi, Desk Officer, The Institute
Training 10000 of Company Secretaries of India, C-37, Sector-62, Institutional
Area, Noida, (U.P.). Students are advised to procure the said
15 and 03 Suitable Referencer and update their study materials accordignly.
Months
Practical ATTENTION STUDENTS!
Training
Applicability of Latest Finance Act and other changes for
Company Secretary December 2006 Examination.
15 Months Suitable
DIRECT TAXES
Training
All the students may kindly note that for the December 2006
Examination session, in respect of Direct Taxes, the applicable
Assessment Year shall be 2006-07 (Previous year 2005-06).
15 Months Suitable Thus, they are advised to study Finance Act, 2005 for
Training December 2006 examination. Further, as per the syllabus, students
are required to update themselves about all the Circulars,
Clarifications, Notifications issued by CBDT & Central Government,
which come in to effect on or before six months prior to the date of
the respective Examination.
Gift Tax Act has been excluded from the scope of examination
from June 1999 session onwards unless otherwise informed.
PCSA-1409 INDIRECT TAXES
Students appearing in the Tax Laws (Indirect Tax portion to the
extent of topics covered in the syllabus) and Direct and Indirect
Taxation-Law and Practice (Indirect tax portion) paper of the
Intermediate and Final Courses respectively may take note of the
following changes applicable for December 2006 Examination:
PCSA-1410 1. All changes made by the Finance Act, 2006.
2. All Circulars, Clarifications/Notifications issued by CBE&C/
Central Government which became effective six months prior
to the date of examination.
PCSA-1411
ATTENTION STUDENTS
PCSA-1412 SECRETARIAL, MANAGEMENT AND SYSTEMS
AUDIT (FSMSA)
PCSA-1413 On Page (iii) of Secretarial, Management and Systems Audit
2006 series, the opening words of fourth paragraph reading
as The changes made upto June, 2002 may be read as The
changes made upto June 2006.

Student Company Secretary 29 December 2006

 QUIZ - PRIZE WINNERS
STUDENTS QUIZ
PRIZE QUERY
XY Flight Services Limited was supplying foods and
beverages to air line companies for serving to the in-flight
passengers. The Service-Tax authorities demanded service tax
on the supplies so made. Are the supplies so made by XY
Flight Services Limited to air line companies liable to service
tax?
CONDITIONS
1. Answer should not exceed one page typed in double space.
The answer sheet should contain the name, registration number
and address of the student.
2. Last date for receipt of answer is 16th January, 2006.
3. Two prizes (a first and a second) in kind will be awarded to the
best answers and the names of the contributors will be published
in the Bulletin.
4. The envelope should be superscribed Students Query,
December 2006 and addressed by name to N.K. Jain,
Secretary & Chief Executive Officer, The Institute of Company
Secretaries of India, ICSI House, 22, Institutional Area, Lodi
Road, New Delhi-110003.
QUIZ - PRIZE WINNERS
January 2006
QUERY
Sudhir, a resident of Mumbai, was appointed a director of a
London based company. The Articles of Association of the
London based company provided for holding of qualification
shares by the Directors. Can Sudhir purchase the qualification
shares ?
WINNER
First Prize
Harish Kumar S (Regn.No. SRO331399/08/2005) C/o Chanveera
Gowda, No. 28/2, Police Colony, Magadi Road, Bangalore 560023
Second Prize
None Eligible
ANSWER
The Foreign Exchange Management Act, 1999, as amended by
the Reserve Bank of India, Foreign Exchange Management (Transfer
or Issue of Any Foreign Security) (Amendment) Regulations, 2004
{Vide Notification No. FEMA 120/ RB-2004 dated 7th July 2004 (Part
III - Regulation 24 (1 A)} clearly states that:
A person resident in India being an individual may acquire foreign
securities as qualification shares issued by a company incorporated
outside India for holding the post of a director in the company if
provided:
1. The number of shares so acquired shall be the minimum re-
quired to be held for holding the post of director and in any case
Student Company Secretary
shall not exceed 1 per cent of the paid-up capital of the com-
pany, and
2. The consideration for acquisition of such shares does not ex-
ceed the ceiling as stipulated by Reserve Bank of India from
time to time. (The present ceiling stipulated by RBI is US$ 20,000
in a calendar year).
However a person resident in India being an individual seeking to
acquire qualification shares in a company outside India beyond the
limits laid down in the proviso to clause (a) of sub-regulation (1) of
Regulation 24 shall apply to the Reserve Bank of India for prior
approval. It also provides that the person holding such qualification
shares may sell the shares so acquired, without prior approval,
provided the sale proceeds are repatriated to India through banking
channels and documentary evidence is submitted to the authorized
dealer.
Conclusion: The above regulation clearly states that Mr. Sudhir,
may acquire the qualification shares of the London Based company,
not exceeding 1 per cent of the paid-up capital of the company as
well as the limit of 20,000 USD in a calendar year being the present
ceiling limit stipulated by the RBI. If in case of the limit of qualification
shares of a director mentioned in Articles of Association of the said
company exceeding the limit of 1% of the paid up capital or USD
20,000 then Mr. Sudhir, has to apply for the approval from Reserve
Bank of India for subscription of the shares exceeding the above
limit, prior to such subscriptions.
February 2006
QUERY
A proprietary concern in India is rendering professional services
to a company abroad. The foreign company desires to allot shares
in it in lieu of the fees payable to the proprietary concern for
professional services rendered. Can this proprietary concern accept
the allotment of shares ?
WINNER
First Prize
Sunil Khichar (Regn.No. WRO395275/05/2005) C/o Nahar S. Mahala
Flat No.4, Krishnadeep Apt., Krishna Complex, Chinchpada Road,
Kalyan (East) Dist Thane, Maharashtra 421 306
Second Prize
None eligible
ANSWER
The Foreign Exchange Management Act, 1999 (hereinafter
referred to as the FEMA) governs the capital account and current
account transactions by person resident in India and person resident
out side India. Sub-section (3)(a) of section 6 of the FEMA dealing
with capital account transaction inter alia states that without prejudice
to the generality of the provisions of sub-section (2), the Reserve
Bank of India, may, by regulations, prohibit, restrict or regulate, among
others, transfer or issue of any foreign security by a person resident
in India. Further, Section 47 of the FEMA empowers the Reserve
Bank of India (RBI) to make regulations, by notification, to carry out
30 December 2006
 QUIZ - PRIZE WINNERS
the provisions of the FEMA and the rules made thereunder. Sub-
section (2) of section 47 enlists the various matters on which the RBI
is empowered to make regulations. Accordingly, pursuant to the
powers conferred by clause (a) of subsection (3) of section 6 read
with section 47 of the FEMA, RBI made the FEMA (Transfer or Issue
of any Foreign Security) Regulations, 2004 (the Regulations). These
regulations deal with transfer or issue of any foreign security by person
resident in India. The regulations are divided in three parts. Part I
contains the provisions relating to Direct Investment Outside India.
Part II provisions deal with Investments Abroad by Individuals in India.
Part 111 provisions deal with Investment in Foreign Securities other
than by way of Direct Investment. Regulation 19 of the Regulations
entitled Prior Permission of the Reserve Bank for Direct Investment
by a Proprietary Concern in India states that A proprietary concern
in India may apply to the RBI in Form ODB for permission to accept
shares of a company outside India in lieu of the fees due to it for
professional services rendered to the said company. However, the
said acceptance of the allotment of shares would be subject to the
conditions mentioned in the sub-clauses (a) and (b). Theses clauses
state that (a) the value of shares accepted from each company outside
India shall not exceed fifty percent of the fees receivable by the Indian
concern from that company and (b) the Indian concerns shareholding
in any one company outside India by virtue of shares accepted as
aforesaid shall not exceed ten per cent of the paid-up capital of the
company outside India, whose shares are accepted.
In view of the aforesaid provisions of the FEMA and the Regulations
made there under it can be concluded that the proprietary concern is
allowed to accept the allotment of shares of a foreign company with
prior permission of the RBI subject to the conditions prescribed therein.
March 2006
QUERY
A manufacturer appointed a dealer to sell its products. The
manufacturer already had a dealer in that place and his dealership
agreement was cancelled on the ground of non-perfromance. The
dealer whose dealership was cancelled complained before the
Monopolies and Restrictive Trade Practices Commission alleging that
the dealership agreement violated various provisions of the MRTP
Act. Can the MRTP Commission pass an interim order in the matter
directing the manufacturer to keep alive the dealership agreement ?
WINNER
First Prize
Digamber S. Mahajan (Regn. No. CRO323494) A-8, Madhuram
Apartments, Near Rahul Hospital, Nana Kumbhnath Road, NADIAD
(Guj.) 387 001
Second Prize
None eligible
ANSWER
Under the Monopolies and Restrictive Trade Practices Act, 1969
the MRTP Commission has been entrusted with absolute power to
pass final order after proper enquiry and investigation by Director
General of Investigation and Registration ((DGI&R)
Student Company Secretary
The MRTP Commission can initiate actions for alleged compliant
of restrictive and unfair trade practices-
l upon receiving a compliant of facts from trade association
or consumer or consumer association
l reference made to it by the Central Government or a State
Government
l an application made to it by the Direct General
l Its own knowledge or information.
Section 33 of the Monopolies and Restrictive Practices Act, 1969
requires every agreement falling within one or more of the categories
mentioned in clauses (a) to (I) of the said sub-section shall be deemed
to be an agreement relating to restrictive trade practices (RTP). The
section further casts duty on the parties to the agreement that such
agreements shall be subject to registration with Direct General of
Investigation and Registration ((DGI&R).
Section 33(1 )(a) of the Monopolies and Restrictive Practices Act,
1969 reads as -
...any agreement which restricts, or likely to restrict, by any method
the person or class of persons to whom goods are sold or from whom
goods are brought..
Hence, as per the plain reading of Section 33 read with 33 (1) (a),
it appears that the termination of dealership agreement per se falls
into RTP. Hence, with this ground in mind the aggrieved dealer has
made complaint before the MRTP Commission for violation of various
provisions of the MRTP Act.
In order to understand the legality of the case referred by the
aggrieved dealer in greater detail it is essential to understand the
term Restrictive Trade Practices [Section 2(o)] of the Act. The
Restrictive Trade Practice has been defined to mean a trade practice
which has or may have the effect of preventing, distorting or restricting
competition in any manner. The second limb of the Section 2(o) talks
about any RTP which tends to bring about manipulation of prices or
conditions of delivery or to affect the flow of supplies in the marketing
of goods or services in such manner as to impose on the consumers
unjustified costs or restrictions.
The definition of RTP as given in Section 2(o) is exhaustive and
not inclusive and is result oriented. That is to say the restriction must
have the actual or likely to have effect of restricting, distorting, or
preventing competition.
Based on the above legal background, it is clear that the
manufacturing company has terminated the dealership agreement
due to non-performance of the aggrieved dealer. The action of the
Company is in the interest to run its business in most profitable
manner. The termination of dealership on the ground of poor
performance of dealer does not mean it is for preventing, distorting
or restricting competition in the market. In Usha International Ltd.
RTP Enq. No.15/1984 dated 1.4.1986 it was held that refusal to deal
would not amount to RTP. Similar view was adopted in the case of
Minocha Button Stores (P) Ltd and other (RTP Enq No. 48 of 1984
dated 11.6.1985).
In view of the forgone conclusion, MRTP Commission can not
pass an interim order in the matter directing the manufacturer to keep
alive the dealership agreement.
31 December 2006
 NEWS AND ANNOUNCEMENTS
NEWS AND ANNOUNCEMENTS SOUTHERN INDIA REGIONAL COUNCIL
ORAL COACHING CLASSES-INTERMEDIATE/FINAL-
INSTITUTE NEWS JUNE 2007 EXAMINATIONS
CS TELECAST ON DOORDARSHAN (DD-I) State Date of Timings Fees Last date for
On 28.11.2006 a 15 minutes programme on Career as a commence- receipt of
Company Secretary was telecast between 5.30 - 5.45 P.M. on ment application
Doordarshan (DD-I) during Evening Live Show on National Intermediate 08.01.2007 6.30 A.M. Rs. 3350/- 02.01.2007
LPT Channel. Information on the CS course was aired across Group-I to per group
the country by way of an exclusive interview with N.K. Jain, (Morning) 8.30 A.M.
Secretary & Chief Executive Officer of the Institute. The
programme was coordinated by Dr. Amita Ahuja, Director (Public Intermediate 08.01.2007 6.00 P.M. Rs. 3350/- 02.01.2007
Relations & Corporate Communication). Group-II to per group
(Evening) 8.00 P.M.
CS REPORT ON ZEE-BUSINESS
Final 05.03.2007 6.30 A.M. Rs. 3350/- 26.02.2007
On 1.12.2006 a brief report on Compulsory Computer Group-I to per group
Training for CS (Inter) Students was telecast on Zee-Business (Morning) 8.30 A.M.
during all the five evening News Bulletins vide an interview
with N.K. Jain, Secretary & CEO of the Institute. The Final 05.03.2007 6.00 P.M. Rs. 3350/- 26.02.2007
programme was coordinated by Dr. Amita Ahuja, Director (Public Group-III to per group
Relations & Corporate Communication) (Evening) 8.00 P.M.
For further details contact:
SIRO of the ICSI, New No. 9, Wheat Crofts Road,
EASTERN INDIA REGIONAL COUNCIL Nungambakkam, Channai-600034
Phone : (044) 28279898; 28268685
BHUBANESWAR CHAPTER e-mail: siro@icsi.edu; icsisirc@md3.vsnl.net.in
PARTICIPATION OF CHAPTER STUDENTS IN ICSI
LIVE PANEL DISCUSSION BANGALORE CHAPTER
On 31.10.2006 the students of the Chapter visited the local IGNOU ORAL COACHING CLASSES FOR CS
Study Centre to watch the nation wide ICSI Live panel discussion on EXAMINATIONS
GD-II on Law & Practice of Arbitration from 2.30 to 3.30 P.M. During With effect from 6.1.2007 the Chapter proposes to conduct
the live panel discussion students of the Chapter raised telephonic Oral Coaching Classes for Foundation, Intermediate and Final
queries on the topic, which were clarified by the panelists. U.C.Mishra, Courses. The classes for final course would be held subject
Chapter official coordinated the programme. to enrolment of sufficient number of students. For further
details contact the Chapter office at Tel.No. 080-22261861;
ORAL COACHING CLASSES FOR FOUNDATION, 080-22286574 and 080-22287158.
INTERMEDIATE FOR 2007 EXAMINATION
THIRUVANANTHAPURAM CHAPTER
The Chapter proposes to conduct Foundation and
Intermediate (both groups) Oral Coaching Classes for June STUDY CIRCLE MEETING ON SELF CONFIDENCE
2007 examination as per the schedule given below : On 25.10.2006 the Chapter organised a study circle meeting on
Turbochange your Self Confidence at its Seminar Hall. Dr.Venugopal
Date of Commencement of Classses : From 18th Dec., 2006
S Reddiar, MBBS, MD, MRCP, ABIM, Life Skills Consultant, Iowa
Timings : Foundation : From 7.30 A.M. to 10.00 A.M. City, USA, was the speaker of the programme. Members and students
Intermediate : From 7.30 A.M. to 10.00 A.M. numbering around 60 attended the programme.
Group-I CAREER AWARENESS PROGRAMME
Intermediate : From 6.00 P.M. to 9.00 P.M. On 30.10.2006, the Chapter organised a career awareness
Group-II programme at Christian College, Kattakada, Thiruvananthapuram.
Venue: The Institute of Company Secretaries of India (ICSI), Rinu, Faculty in Commerce Department and Baiju Ramachandran,
Bhubaneswar Chapter, ICSI Building, Plot No. 70, VIP Colony, Chapter Secretary addressed the Students. The speakers highlighted
IRC Village, Bhubaneswar -751015, (1 kms. From CRPF the opportunities available for those who completed the company
Square towards Ekamra Park) Secretaryship course.
Course Fee : Rs.4,000/- for Foundation, Rs.4,000/- for
PANEL DISCUSSION ON COMPETITION ACT
Intermediate per Group On 03.11.2006 the Chapter screened an hour long CD on panel
discussion telecast in Gyan Darshan on Competition Act for the
Facilities : Expert Faculty, Well equipped class rooms, White benefit of Group Two oral coaching students. The students were
Board with newly made bench desk, 3 tests during the period benefited from the presentation. They were able to know about the
of coaching, issue of Coaching Completion Certificates, Library new provisions of the Act and update their knowledge in this regard.
& Reading Room facilities. Better parking and supply of pure TALK ON MOTIVATION TO LEARNING
water facilities. On 05.11.2006 the Chapter organised a students seminar on
For further details students may contact the Bhubaneswar, Motivation to leaning. M.S.Vishak, Consultant in Personnel
Chapter Office at the address given above with Tel.No. (0674- Management was the speaker of the programme. In his address, he
2552282). Mobile : 9937004139; E-mail : bhubaneswar delighted the students with 25 ways to motivate people. The doubts
@icsi.edu. and queries raised by the students were replied by the speaker at the
end of the session.

Student Company Secretary 32 December 2006

 NEWS AND ANNOUNCEMENTS
TV PROGRAMME ON CS COURSE IN ASIANET
The Chapter participated in a television programme on Asianet
Cable Vision Channel in Career Line Company Secretary Course
and it was telecast all over Kerala on 20.11.2006 evening. Baiju
Ramachandran, Chapter Secretary explained the role of a Company
Secretary and importance of the profession in the current economic
scenario. He also highlighted the opportunities available to anyone
who has completed the CS Course. He further explained the potential
areas for the company secretaries in employment as well as in
practice. He also enumerated in detail the course offered by the
institute and eligibility criteria, examination, training requirement etc.
The contact numbers of all the Chapters and Satellite Chapters in
Kerala were also provided during the programme.
NORTHERN INDIA REGIONAL COUNCIL
ICSI-MTMVS ORAL TUITION CENTRE
Inauguration of Intermediate Group I Oral Tuition
Classes
On 13.11.2006 the new batch of Oral Coaching Classes for
Intermediate Group I for June 2007 examination was inaugurated by
Ashok K. Jethy, Chairman, MTIM. In his welcome address Jethy
briefed the students about the contents of the CS course and
importance of the profession of company secretaries. He emphasized
that a company secretary is the pivot of the company and the students
can expect a bright future provided they work hard to achieve the
goal. V.D. Rammurti, Executive Director, MTIM in his address said
that in the present liberalized policy of the Government the company
secretaries have a very challenging role and bright prospects. He
exhorted them to acquire other supporting qualifications in commerce,
finance and law etc. so that their career opportunities further improve.
He also apprised about the importance of (Eligibility Tests) and 75%
attendance in oral coaching classes which is a must for eligibility in
appearing in the examination. Earlier J.K. Chawla, Director(PR&P)
of the Institute while introducing the speakers mentioned about
Student Company Secretary monthly bulletin of the Institute and
advised the students to read it regularly to keep themselves up to
date about the changes / amendments in study materials etc. He
also apprised the students regarding prestigious monthly journal
Chartered Secretary of the Institute which contains latest
amendments on corporate laws, notifications, legal cases, corporate
miscellany, activities of ICSI and above all, important articles on
subjects of professional interest to company secretaries. The journal,
he said, is extremely useful to the students and they can subscribe
the same at a concessional annual subscription rate of Rs.300/-
against the normal subscription rate of Rs.750/-.
CHANDIGARH CHAPTER
ORAL COACHING CLASSES FOR JUNE 2007
EXMINATIONS
The Chapter proposes to conduct Oral Coaching Classes for
June 2007 examinations for Intermediate and Final course of the
Institute from 9.1.2007 (between 5.30 and 7.30 P.M.). Fees for
each group is Rs.4,000/-. The classes will be held subject to the
availability of sufficient number of students.
For further details contact the Chapter Office at GGDSD
College, Sector 32-C, Chandigarh between 11.00 A.M. and 7.00
P.M. on all working days.
JAIPUR CHAPTER
CAREER AWARENESS PROGRAMMES IN RURAL
BELT OF RAJASTHAN
The Chapter conducted a series of Career Awareness programmes
at Rural belt of Rajasthan.
Student Company Secretary
On 25.9.2006 the programmes were held in Sikar at Shri Kalyan
Govt. College PG, Shri Krishan Satsang Girls College PG and at
Vidya Bharti Public School. Nearly 600 students participated in the
programme.
On 26.9.2006 the programmes were held at Seth Nand Kishore
Patawari Govt. College PG., Govt. Girls College UG, and at Sarswati
Public School. All situated at Neem-Ka-Thana. More than 1000
students participated in the programmes.
At Khetri the programmes were held on 27.9.2006 in the following
institutions: Govt.College UG., Vinodni College PG, Sanjivani College
of Pharmaceutical Sciences UG. and Vivekanand Public School. More
than 700 students attended the programmes.
On 28.9.2006 the programmes were held at Vyau Sainik
Academy, Khetri, Chirawa College (PG), Chirawa and M.K. Sahoo
College PG, Pilani. Around 900 students participated in these
programmes.
On 29.9.2006 the programmes were held at Seth Motilal College
(P.G), Jhunjhunu; R.R. Murarka College UG, Jhunjhunu and Seth
Gangadhar Shivbhagwan Patwari College (UG) Baggar.
The total number of students attended these Career Awareness
Programmes in 16 colleges and Schools in 8 places of Rajasthan
was more than 4000.The programmes were widely covered in local
print and electronic media. In all these programmes the head of the
Institute along with faculty members were present. All the programmes
were followed by an interactive session. I.J. Kalucha, Consultant,
the ICSI gave detailed information and counseling covering all aspects
of the profession of Company secretaries during his elaborate address.
These were followed by the address of G.C. Sharma, Executive Officer
of the Chapter Office who gave specific information and guidance
regarding the facilities being made available to the students by the
Jaipur Chapter. He also welcomed the students to approach him for
any kind of information, guidance and assistance.
ACADEMIC DEVELOPMENT PROGRAMME
On 10.9.2006 the Chapter conducted an Academic Development
Programme which was attended by 37 students. During the
programme the topics such as Personality Development,
Communication Skills and Drafting of Notices, Minutes etc. were
widely covered by the eminent faculty.
TRAINING ORIENTATION PROGRAMME
From 13.9.2006 to 17.9.2006 the Chapter organized a 5 days
Training Orientation Programme which was attended by 43 students.
The programme was inaugurated by Sanjiv Agarwal, past Chairman,
NIRC of the ICSI. In his address Agarwal emphasized the importance
of the programme as it gives practical exposure to the participants.
During the training period, different topics were covered by the expert
faculties. B.C. Meena, ROC (Rajasthan) was the Chief Guest of the
valedictory function held on 17.9.2006. He advised the participants
to be honest in their work and to work hard as there is no substitute of
hard work. He also distributed the Training Completion Certificates.
SONEPAT SATELLITE CHAPTER
ORAL COACHING CLASSES FOR FOUNDATION
AND INTERMEDIATE (BOTH GROUPS) JUNE 2007
SESSION
Oral Coaching Classes for Foundation and Intermediate
Groups I & II are likely to commence from 5.01.2007. Course
Fee: Rs.4, 000/- (Foundation and Intermediate per Group)
Timings: - 10.00 A.M. to 4.00 P.M (Monday to Saturday)
Admission on first come first served basis
For further details contact
Sonepat Satellite Chapter of NIRC of ICSI
586/24, Mission Road, Opp: Co-Op. Bank, Sonepat
Phones : 09416294056; 09896129552
33 December 2006
COMPANY SECRETARIES EXAMINATIONS DECEMBER, 2006

MORNING SESSION AFTER-NOON SESSION

9.30 AM TO 12.30 PM 1.30 PM TO 4.30 PM

GROUP-I

GROUP-I
GROUP-II

GROUP-II
GROUP-III
 Posting Date : 20/21-12-2006
Regn. No. 42947/84
COMPANY SECRETARIES EXAMINATIONS DECEMBER, 2006
TIME TABLE & PROGRAMME
MORNING SESSION AFTER-NOON SESSION
DATE AND
DAY 9.30 AM TO 12.30 PM 1.30 PM TO 4.30 PM

FINAL FOUNDATION INTERMEDIATE

26.12.2006 Advanced Company General and Commercial Laws

Tuesday Law and Practice
GROUP-I

27.12.2006 Secretarial Practice

GROUP-I
Wednesday relating to Economic Company Accounts and Cost &
Laws and Drafting Management Accounting
& Conveyancing
28.12.2006 Secretarial, Management Tax Laws
Thursday and Systems Audit
29.12.2006 Financial, Treasury Management Information Systems
GROUP-II

Friday and Forex Management & Corporate Communication

Licensed to post without prepayment at N.D.P.S.O.

30.12.2006 Corporate Restructuring English and Business Company Law

Delhi Postal Regn. No. DL(S)01/3167/2006-07-08

Saturday Law and Practice Communication
31.12.2006 Banking and Insurance Basic Economics & Company Secretarial Practice

GROUP-II
Sunday Law & Practice Business Environment
01.01.2007 World Trade Organisation
Monday International Trade, Financial Accounting Economic, Labour and
Joint Ventures and Industrial Laws
GROUP-III

Foreign Collaborations
02.01.2007 Direct and Indirect Elements of Business Laws Securities Laws and Regulation

H Licence No. U(C)130/2006-08

Tuesday TaxationLaw and and Management of Financial Markets
Practice
03.01.2007 Human Resources Information Systems and
Wednesday Management and Quantitative Techniques
Industrial Relations

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their Registration Number in all
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ICSI House, 22, Institutional Area,
SECRETARIES OF INDIA
THE INSTITUTE OF COMPANY
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Delhi.
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