Legal & Industry Updates - July 2020
SPECIAL EVENTS
Ivy Law in Association with MyLawman Conducted a Workshop on 'Drafting of Non-Disclosure Agreements - Interactive Learning on Legal Framework & Drafting', July 11 & 12, 2020
Kaveri Kumar, Founder and Head of Corporate Practice, Ivy Law, was the keynote speaker. The key highlights of the workshop consisted of elucidating the importance of executing an NDA, different types of confidential information, legal framework applicable to confidentiality, legal measures that can be taken by companies to protect confidential information, legal remedies available for breach of confidentiality obligations and drafting of different clauses pertaining to an NDA. The workshop was an interactive session, where several questions were answered by Kaveri, pertaining to contractual provisions and protections provided in NDA's, recourse available to companies for breach of confidentiality obligations etc.
Leadership Virtual Summit '20 Foreseeable Future: Winning the Covid-19 War, July 17, 2020
The team at Ivy law participated in a Leadership Virtual Summit, conducted by Economic Times. The summit focused on the new changes and business transformations undertaken by the industry in the midst of a pandemic. Deliberations were held on raising capital at lower rates, reducing debt, enforcing provisions like force majeure to counter disruption in commercial operations and supply chains, evolving regulations to support digital transactions, tackling bankruptcy, and corporate restructuring. The industry's adoption of big data, artificial intelligence and other technologies to automate and standardize the processes were also the focal point of discussion.
LEGAL & INDUSTRY UPDATES
Special Liquidity Scheme for Non-Banking Finance Company’s (NBFCs) & Housing Finance Company’s (HFCs) (source)
As per the circular issued by Reserve Bank of India (RBI) on July 1st, 2020, a special liquidity scheme of Rs. 30,000 crore is launched through a special purpose vehicle in the form of SLS Trust (“Trust”), set up by SBI Capital Markets Limited (“Scheme”). The Scheme aims to improve the liquidity position of NBFC’s as well as HFCs. Any NBFC including microfinance institutions registered with RBI (excluding those registered as Core Investment Companies) and any HFC registered with the National Housing Bank, complying with the conditions pertaining to capital adequacy ratio, percentage of net non-performing assets, net profit requirements, investment grade rating, not reported under SMA-1 or SMA-2 category, will be eligible to fundraise funding from the Scheme. The period of lending by the Trust shall be for a period of up to 90 days. The financing would be used by the NFBCs/HFCs only to repay existing liabilities and not to expand assets. This facility is a part of the Government of India’s and RBI’s efforts to alleviate the concerns of the market participants on the availability of funds to the sector.
Expert Committee Invites Public Comments on Non-Personal Data Framework (source)
As per the press release, issued by the Ministry of Electronics & IT on July 23rd, 2020, the Expert Committee on Non-Personal Data Governance Framework has invited feedback from the public to participate in the ongoing consultation on a draft report being prepared by the expert committee, to deliberate on framing rules for non-personal data governance. The expert committee has touched upon several emerging and innovative ideas on non-personal data, such as attempts to define ‘Non-personal Data’, introduce the concept of community data, the appropriate rights and privileges over this data by defining three categories – Public, Community and Private, defining a new concept called ‘Data Business’, introducing open access meta-data registers, consent for anonymisation of data, sensitivity of non-personal data, defined purposes for data sharing as sovereign purpose, core public interest purposes and economic purposes. The last date of providing inputs is scheduled for August 13, 2020.
Private Participation for the Operation of Passenger Train Services (source)
As per the press release issued by the Ministry of Railways (“MoR”) on July 1st, 2020, MoR has invited Request for Qualifications, for private participation in operating passenger trains. The project would entail a private sector investment of about Rs 30,000 crores. The majority of trains will be manufactured in India. The private entity shall be responsible for financing, procuring, operation, and maintenance of the trains. There would be a substantial reduction in journey time. The objective of this initiative is to introduce modern technology rolling stock with reduced maintenance, reduced transit time, boost job creation, provide enhanced safety, provide world-class travel experience to passengers, and also reduce the demand-supply deficit in the passenger transportation sector. The concession period for the project shall be 35 years. The private entity will pay to Indian Railways fixed haulage charges, energy charges as per actual consumption, and a share in gross revenue determined through a transparent bidding process.
Government Invites Comments on the Draft Code on Wages (Central) Rules, 2020 (source)
As per the notification issued by the Ministry of Labour and Employment (“MoLE”) on July 7th, 2020, the government is inviting public comments on the draft Code on Wages (Central) Rules, 2020 (“Wage Rules”). MoLE invited comments on the draft Wage Rules for a second time in eight months with minimal changes to the previous draft that was made public in November 2019. Once the Wage Rules are notified, the following rules/provisions will be superseded: (i) Payment of Wages (Procedure) Rules,1937; (ii) Payment of Wages (Nomination) Rules, 2009; (iii) Minimum Wages (Central) Rules, 1950; (iv) Minimum Wages (Central Advisory Board) Rules, 2011; (v) Ease of compliance to maintain registers under various Labour Laws Rules, 2017, Section 29 (Power of Central government to make rules) and Section 30 (Power of appropriate government to make rules) of the Minimum Wages Act, 1948 and section 26 (Rule making power of appropriate government) of the Payment of Wages Act, 1936, (vi) Payment of Bonus Rules, 1975; (vii) Equal Remuneration Rules, 1976; and (viii) Central Advisory Committee on Equal Remuneration Rules,1991. The Wage Rules will universalize the provisions of minimum wages and timely payment of wages to all employees, irrespective of the sector, and wage ceiling. At present, the provisions of both the Minimum Wages Act, 1948 and Payment of Wages Act, 1936 apply to workers below a particular wage ceiling working in scheduled employments only. The government has, however, reversed a controversial clause that had sought to increase the minimum number of daily hours for workers to qualify for minimum wages and other provisions of the law from eight to nine hours.
Equipment Source Codes to be Shared: Department of Telecommunications (DoT) (source)
As reported by Economic Times, the Department of Telecommunications (DoT) has allayed concerns regarding the need to share source codes of software deployed in telecom gear. Earlier, DoT had asked a telecom equipment maker, Ericsson to share source codes for network equipment as a security standard, which received apprehension from the equipment maker. Ericsson stated that it is highly questionable if a review of the source code was to verify that the supplier’s software is free from malicious software, which would be impossible. Also, Ericson added that the telecom network could be compromised through a weakness in configuration and operations for which tests are not aimed. DoT addressed the concerns raised by Ericson and clarified, seeking source codes and reviewing them would not breach any intellectual property rights or any commercially valued information. Also, DoT stated the tests were to be conducted at designated third party centers and only the finding and reports of the tests were to be shared with DoT. Thus, there will be no harm in sharing source codes which may only be provided to accredited security tests labs and not to DoT.
Implementation of New Provisions of the Consumer Protection Act, 2019 (source 1, source 2)
As per the notification issued by the Ministry of Consumer Affairs, Food and Public Distribution (“MoCA”) on July 15th, 2020 certain provisions of the Consumer Protection Act, 2019 (“CPA”) have come into force on July 20th, 2020. These provisions pertain to establishment of a Consumer Protection Council, establishment of a District Consumer Disputes Redressal Commission, provisions pertaining to product liability and other miscellaneous provisions. Further, as per the notification issued by MoCA on July 23rd, 2020, provisions pertaining to the establishment of a Central Consumer Protection Authority, offences and penalties pertaining to non-compliance with the direction of the central authority, false or misleading advertisements etc., have also been enforced. Definitions of ‘central authority’, ‘direct selling’, ‘direct general’, ‘e-commerce’ and ‘regulator’ have also been brought into force. Allied rules such as the Central Consumer Protection Council Rules, Consumer Disputes Redressal Commission Rules, and Appointment of President & Members in State, District Commission Rules, Mediation Rules, Model Rules, E-Commerce Rules, Consumer Commission Procedure Regulations, Mediation Regulations and Administrative control over State Commission & District Commission Regulations are also to be notified under the provisions of CPA.
Consumer Protection (E-Commerce) Rules, 2020 (source)
MoCA on July 23rd, 2020, notified the Consumer Protection (E-Commerce) Rules, 2020 (“Consumer E-Rules”), allied with CPA. The Consumer E-Rules apply to (a) all goods and services bought or sold over digital or electronic network including digital products; (b) all models of e-commerce, including marketplace and inventory models of e-commerce; (c) all e-commerce retail, including multi-channel single brand retailers and single brand retailers in single or multiple formats; and (d) all forms of unfair trade practices across all models of e-commerce. The Consumer E-Rules stipulate the duties of the seller and various e-commerce entities. As per the Consumer E-Rules, every e-commerce entity is required to provide information relating to return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment, payment methods, the security of payment methods, charge-back options, including country of origin, which are necessary for enabling the consumer to make an informed decision at the pre-purchase stage on its platform. Further, e-commerce platforms are required to acknowledge the receipt of any consumer complaint within forty-eight hours and redress the complaint within one month from the date of receipt.
Draft E-Commerce Policy Seeks to Set Up Regulator, Restrict Data Storage (source)
As reported by Economic Times, the Department of Promotion of Industry and Internal Trade (DPIIT) is finalizing the new draft of e-commerce policy that provides for regulation on issues such as security, law and order, law enforcement, taxation and safety of individuals, to enable the government to have speedy access to data flowing on e-commerce platforms in the country. E-commerce companies that store or mirror Indian user’s data overseas will be subject to periodic audits, as per the draft e-commerce policy. Country of origin and value addition in India will have to be specified by e-commerce entities for imports and exports, respectively. The policy also proposes to prohibit the cross-border flow of information about defense, medical records, biological records, cartographic data, and genome mapping without appropriate authorization. In a radical change from the earlier draft, the new proposed e-commerce policy proposes a legislation to protect users under the age of 18 years who are unable to enter into valid contracts with their e-commerce service providers and hence at risk as they cannot enforce their rights against such companies.
OTT Content Under the Purview of I&B Ministry (source)
As reported by Economic Times, the Information & Broadcasting Ministry (I&B) is proposing to bring the content being streamed on several over the top (OTT) platforms under its purview. At present, OTT platforms fall under the domain of the Ministry of Information and Technology. Out of the five media platforms, print, radio, TV, films, and OTT, the first four are regulated; however, OTT is unregulated.
IndusInd Bank to Pay Rs 20 Lakh to a Private Company for Cyber Fraud Losses (source)
As reported by Economic Times, IndusInd Bank has been ordered to pay Rs 20.55 lakh to a company, for losses suffered due to a cyber-fraud. The order was issued by adjudicating officer (I.T), Government of Maharashtra under the Information Technology Act, 2000. The company fell victim to a cyber-fraud after it responded to a phishing email that had the same domain name as of the bank.
Government to Announce Insolvency Relief for Micro, Small and Medium Enterprise’s (MSMEs) (source)
As reported by Economic Times, MSME’s will soon get relief under section 240A of the Insolvency and Bankruptcy Code due to disruption caused by coronavirus. The Ministry of Corporate Affairs is finalizing a special insolvency resolution, to provide relief to the MSMEs and the same will be notified in due course.
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.