Legal & Industry Updates - August 2023
SPECIAL EVENTS
Webinar on India’s New Data Protection Law, August 29, 2023
The team at Ivy Law participated in a webinar on “India’s New Data Protection Law” organized by Ikigai Law. The key highlights of the webinar was the recent update on the Digital Personal Data Protection Bill, 2023 and its impact on the consumers as well as big technology companies. A comprehensive discussion persisted including the bill's major problems with regard to the public's views and its potential pitfalls. The webinar emphasized on various terms like “data” and “processing” of digital personal data within India. The obligations of the fiduciaries and the rights and responsibilities of the data principal were also deliberated upon.
LEGAL & INDUSTRY UPDATES
Rajya Sabha Passes the Advocates (Amendment) Bill, 2023 (“Advocates Bill”) (source)
The Rajya Sabha, on 3rd August, 2023, has passed the Advocates Bill, with the aim to repeal the Legal Practitioners Act, 1879, and to amend the Advocates Act, 1961 and thereby regulate the legal profession through a single act namely the Advocates Act, 1961. The Advocates Bill further provides that every high court and district judge can frame and publish list of touts (those who procure clients for legal practitioner in return for any payment) who would be excluded from entering the court premises, and any violation of this provision would entail punishment with imprisonment up to three months or a fine upto INR 500, or both.
Digital Personal Data Protection Act, 2023 (“DPDP Act”) (source)
The Ministry of Law and Justice, on 11th August, 2023, has passed the DPDP Act after finally been granted the President of India’s assent. The DPDP Act lays down the manner in which companies should process users' data, gives Central Government (“CG”) the power to seek information from firms and issues directions to block content on the advice of a data protection board appointed by CG to handle grievances of individuals around personal data privacy if data fiduciaries or firms using personal data fails to address individuals’ complaints. It further allows users to correct their personal data and thereby aims to protect the privacy of Indian citizens while proposing a penalty of upto INR 250 crores on entities for misusing or failing to protect digital data of individuals.
The Minister of Home Affairs Overhauls the Indian Penal Code, 1860 (“IPC”), Criminal Procedure Code, 1898 (“CrPC”) and the Indian Evidence Act, 1872 (“IE Act”) (source)
The Minister of Home Affairs, on 11th August, 2023, has introduced three bills in the Lok Sabha namely, the Bharatiya Nyaya Sanhita Bill, 2023, Bharatiya Nagarik Suraksha Sanhita Bill, 2023, and the Bharatiya Sakshya Bill, 2023 in order to replace the IPC, CrPC and the IE Act, respectively. As many as 313 changes have been proposed in the three criminal laws with the objective to safeguard constitutional rights and deliver justice. They key highlights of the new bills are:
a new provision on mob lynching is introduced which would be punishable by seven years imprisonment or life imprisonment or death penalty;
enabling speedy justice through video trials, e-filing of First Information Reports;
expanding the definition of sedition;
bringing corruption, terrorism and organised crime under the penal laws, introducing community service and solitary confinement as new forms of punishment and holding trials in the absence of an accused;
expanding the scope of offence against women pertaining to sexual intercourse by employing “deceitful means” as well as considering sexual exploitation of women on the pretext of marriage, job, promotions, a crime.
Union Cabinet Approves Outlay of INR 14,903 crore for Expansion of the Digital India Programme (source)
The Union Cabinet, on 16th August, 2023, has approved a five year extension (FY2021–22 to FY2025–26) as well as expansion of CG's flagship Digital India programme, with funding totalling INR 14,903 crore. The expansion has preserved cybersecurity as a key focus by providing cybersecurity training to 2.65 lakh people, thereby making it easily accessible, low cost and affordable. 5.25 lakh Information Technology workers would also receive upskilling as part of the expansion. Further, 1,200 start-ups in tier 2 and tier 3 cities are expected to receive some of the total investment as funding and three centres of excellence for research on the application of artificial intelligence in healthcare, agriculture, and sustainable living would also be established.
The Reserve Bank of India (“RBI”) Sets Guidelines for Penal Charges on Loan Defaults (source)
RBI, on 18th August, 2023, has published a circular outlining the procedures for penalising loan accounts by banks. The new recommendations were created as a result of observations that many banks apply penal rates of interest, over and beyond the applicable interest rates, in cases of borrower defaults or non-compliance with the conditions of credit facility approval. As per the circular, penalties for the borrower's failure to comply with the terms and conditions of a loan contract would be handled as "penal charges" rather than "penal interest," which would be added to the rate of interest imposed on loans. Penal charges cannot be capitalised, so no additional interest can be calculated on them.
RBI to Develop Platform to Boost Seamless Digital Loans for Frictionless Credit (source)
In light of growing digitalization in India, RBI is on the verge to create a technological platform targeted at improving the seamless digital flow of credit by enabling a smooth flow of vital digital data to lenders. The platform would facilitate non-collateral Micro, Small and Medium Enterprises (“MSMEs”) loans and Kisan Credit Card loans up to INR 1.6 lakh per borrower, among others, through participating banks to enhance credit penetration into underserved areas. The platform further aims to create a shared space for various central and state government entities, banks, credit information companies, digital identity authorities, etc., to share data for credit appraisal, thereby bringing transparency, efficiency, cost reduction, faster disbursement, and scalability to the lending process.
CG Floats Draft National Deep Tech Startup Policy (“NDTSP”) (source)
CG has put out a draft NDTSP proposing changes across nine themes including access to funding, strengthening the intellectual property regime, sustaining deep tech startups, ease regulatory requirements and enabling shared infrastructure and resource sharing. The policy seeks to bolster research and development in deep tech start-ups, which would further work on fundamental and technical problems, unlike firms that monetise technology with distinguished business models. Moreover, NDTSP calls for a more multi-pronged approach to protect Indian interests by providing a coordinated, comprehensive push to optimally engage with international partners and multilateral institutions.
CG to Roll out New Law on Digital Competition to Regulate Big Technology (“Tech”) Companies (source)
CG is planning a separate digital competition law instead of tweaking the recently amended Competition Act, 2002, in order to regulate big Tech companies. An official committee, led by the Ministry of Corporate Affairs, would examine the need for ex-ante regulatory mechanisms for digital markets through a separate law and study international best practices. However, large multinational Tech companies have expressed their disagreement with the concept of ex-ante regulations in India and according to them, since the existing Competition Act, 2002 has already been revised earlier to address modern issues and manage fair trade concerns across various sectors, there is no need to amend it again.
Proposed National Electronic-Commerce (“E-Commerce”) Policy in Final Stages, to be Presented at the Top Level of CG (source)
The proposed national e-commerce policy, developed by the Ministry of Commerce and Industry, s in its final stages, with the Department for Promotion of Industry and Internal Trade having a thorough discussion on the same with various representatives of e-commerce companies. The proposed policy is expected to be presented to the top level of CG wherein all stakeholders' interests, including those of investors, manufacturers, MSMEs, traders, retailers, startups, and customers, would be taken into account, with the goal to develop plans for creating an environment that is favourable for the sector's inclusive and harmonious growth through the adoption of modern technologies, a streamlined regulatory framework for ease of doing business, supply chain integration, and increased exports.
Rajya Sabha Clears the Pharmacy (Amendment) Bill, 2023 (“Pharmacy Bill”) (source)
The Rajya Sabha, on 10th August, 2023, has passed the Pharmacy Bill, with the aim to amend the Pharmacy Act, 1948 which regulates the practice and profession of pharmacy. The Bill looks at the insertion of new section 32C (Special provision relating to Person registered or qualified under Jammu and Kashmir Pharmacy Act, 2011) wherein anyone who is registered as a pharmacist under the Jammu and Kashmir Pharmacy Act, 2011 or possesses prescribed qualifications would be deemed to be registered as a pharmacist under the Pharmacy Act, 1948 and the same would be contingent upon the person submitting an application for registration within a year of the amendment coming into force, and further paying a prescribed fee.
The Securities and Exchange Board of India (“SEBI”) Seeks to Keep Regulated Entiti from Financial Influencers (“Finfluencers”) (source)
SEBI, on 25th August, 2023, released a consultation paper wherein it stated that influencers who are not registered with the applicable financial sector regulator may lack the necessary credentials or subject-matter knowledge and thus could impair investors’ interest. As per the paper, no SEBI-registered intermediaries, regulated entities or their representatives should directly or indirectly have monetary or non-monetary association for promotion or advertisement (“ad”) of their services or products with any unregistered entities including Finfluencers. Further, entities registered or regulated by SEBI or stock exchanges shall not share any confidential information of their clients with any unregistered entities and therefore registered Finfluencers must adhere to a code of conduct and rules set forth by SEBI and the enforcement agency concerned would take appropriate action, including filing case under Section 420 (Cheating and dishonestly inducing delivery of property) of the IPC.
Doctors Oppose the National Medical Commission’s (“NMC”) Directive on Prescription of Generic Medicines Rather Than Their Branded Counterparts (source)
NMC, on 2nd August, 2023, has notified the National Medical Commission Registered Medical Practitioner (Professional Conduct) Regulations, 2023, wherein it has demanded the doctors to only prescribe generic drugs to patients rather than their branded versions, failing which they would be punished accordingly. However, apprehensions have arisen regarding the efficacy and quality of these generic drugs as the medical professionals argue that their effectiveness and reliability may be compromised due to lack of standardized testing and approval procedures. They further contend that branded drugs offer greater assurance of quality. This notification has thus sparked a wave of outrage and criticism among the medical community across India. Doctors, medical groups, and healthcare organisations have therefore urged the Prime Minister as well as the Union Health Minister of India to reconsider and repeal the rule.
Over-the-Top (“OTT”) Players Might Possibly be Removed from the New Draft Indian Telecommunication Bill, 2022 (“Telecom Bill”) (source)
While the Union Cabinet has cleared the draft Telecom Bill, CG has most likely removed OTT players from the definition of telecommunication services in the Telecom Bill, giving huge relief to communication service providers such as WhatsApp and Telegram who would thus remain out of telecom regulation by requiring them to obtain a licence from CG. In the hindsight, it is considered to be amongst the most contentious issues in the Telecom Bill, with telecom service providers seeking a level-playing field with OTT applications over communication services such as voice calls, messages, etc. where operators had to incur high costs of licences and spectrum, while OTT players rode on their infrastructure to offer free services.
Various Renowned Software Companies Seek Change in Local Value Addition Norms (source)
Various reputed multinational software corporations have been pushing for a change in local value addition requirements for software, arguing that the absence of such standards prevents them from competing for government contracts. As government regulations on the procurement of software and associated services do not take into account the nature of how software and other related services are generated, enterprises that are involved in their development are denied the reasonable opportunity to compete for state-run projects and procurement. Therefore, as per the software companies, there should be uniform standards for software localisation.
The Ministry of Information & Broadcasting (“MIB”) Refrains Media Entities From Carrying Direct or Indirect Ads of Betting, Gambling (source)
MIB, 25th August, 2023, has issued a warning to all parties, including media outlets, online ad intermediaries and social media platforms, requesting them to stop airing any type of betting or gambling-related ads or promotional content as they pose significant financial and socio-economic risk for consumers, especially youth and children. MIB has specifically underlined that disregarding this warning could result in CG taking the proper legal action. As betting and gambling activities are illegal in most parts of India, consequently, advertisements and surrogate promotions for these betting platforms are similarly illegal.
Alleged Liquidity Crunch of Award Debtor Not Sufficient Cause Under Order XXI Rule 26 of the Code of Civil Procedure, 1908 (“CPC”) To Grant Stay Of Enforcement Of Award: Delhi High Court (“Delhi HC”) (source)
The Delhi HC has ruled that alleged liquidity crunch of the award debtor cannot be a sufficient cause under Order XXI Rule 26(1) (When Court may stay execution) of CPC to grant stay of the enforcement proceedings in relation to an arbitral award. The court had directed the award debtor to deposit the entire award amount of INR 165 crores, however, the award debtor sought to modify the court’s order so as to enable him to furnish bank guarantee instead of cash deposit, on the ground that the same shall lead to liquidity crunch in its company. Therefore, the court finally concluded that the bank guarantee cannot be utilised by the decree holder to compensate its loss.
Disclaimer: The updates provided in this document is not a legal opinion and does not claim to capture all legal developments related to the subject matter stated herein. It is advisable to seek legal advice for accurate applicability, prior to relying on the updates for any legal matter.