THE COMPANIES ACT, 1956

I. OBJECTIVES AND POLICIES: 3.1 The Companies Act, 1956, has been in force for the last 41 years. The Act confers a variety of powers on the Central Government and the Company Law Board to monitor, regulate and control the affairs of the companies. The provisions of the Act which are important from this angle are discussed in the following paragraphs. 3.2 Management of the Companies 3.2.1 To ensure better management of companies, the Central Government accord approval for the appointment and reappointment of persons as Managing Directors, Whole-time Directors or Managers of a public limited or private limited company which is a subsidiary of a public limited company, under Section 269 read with Section 388 of the Companies Act. In 1988, the Government dispensed with the requirement of the approval for appointment of managerial personnel in respect of cases which fulfil the conditions as prescribed in Schedule XIII of the Act. This Schedule can be modified to suit the changing needs of the time and circumstances in keeping with this policy of regulation by exception. 3.3 Control Over Companies 3.3.1 The Companies Act empowers the Central Government to inspect the books of accounts of a company, to direct special audit, to order investigation into the affairs of a company and to launch prosecution for violation of the Companies Act, 1956. Books of accounts and other documents of the companies are inspected by the officers of the Directorate of Inspection and Investigation authorised for this purpose under Section 209A of the Companies Act and the Registrars of Companies. These inspections are designed to find out whether the companies conduct their affairs in accordance with the provisions of the Companies Act, to see whether any unfair practices prejudicial to the public interest are being resorted to by any company or a group of companies and to examine whether there is any mismanagement which may adversely affect interest of the shareholders, creditors, employees and others. Wherever inspection reports disclose any information that may be of interest to other Departments or agencies like the Ministry of Commerce, Central Board of Direct Taxes, Enforcement Directorate, State Government or Provident Fund Authorities, such information is passed on to them and suitable corrective action is initiated. When contraventions of the provisions of the Companies Act are detected, action is taken for filing prosecution for such violations of the provisions of the Companies Act. 3.3.2 Sections 235 and 237 of the Companies Act empower the Central Government to order investigation into the affairs of a company under certain circumstances. The Company Law Board is also empowered to consider application of members for conducting investigation into the affairs of a company. These powers to order investigation arise in circumstances where the business of a company is being conducted with intent to defraud its creditors, or for unlawful purposes, or in a manner oppressive to any of its members or that if the company was formed for any fraudulent or unlawful purposes. 3.3.3 The punitive provisions of the Act are also exercised by the Department and the companies are prosecuted for committing default in filing their documents or for contravening the provisions of the Act. The Companies (Amendment) Act, 1988, has introduced a new Section 621A empowering the Company Law Board and the Regional Directors to compound offences. The power to compound is not exercisable in relation to offences which are punishable either with imprisonment only or with imprisonment and fine. 3.4 Protection of Shareholders/Consumers' Interest 3.4.1 For affording greater protection to shareholders, Section 205A has been incorporated in the Companies Act, whereby unpaid or unclaimed dividends are to be kept in a separate account for three years by the company concerned. Thereafter, if these dividends still remain unpaid or unclaimed, these are to be transferred to the account of the Central Government which make necessary payments to the shareholders concerned upon an application duly made by them. 3.4.2 The interests of the consumers are also sought to be taken care of under the provisions of the Companies Act. Approval of the Central Government is required to be obtained under Section 294AA in regard to the sole selling agency agreements which may be entered into by the

companies having paid-up capital of Rs. 50 lakhs or more. This is to ensure that the cost of commodities sold to the consumers through these agreements is not inflated by avoidable additional expenditure on the part of the companies concerned. 3.4.3 Cost Accounting Records Rules are prescribed under Section 209(1)(d) of the Companies Act, for companies engaged in production, processing, manufacturing and mining activities. These are designed to bring cost consciousness among the companies to ensure the best use of resources by them with a view to reduce cost of production and in turn to provide cheaper goods to the consumer. 3.4.4 The interest of the public in general in the matter of keeping deposits with the companies has also been taken care of in the Companies Act. Under section 58A of the Act, the Department has framed the Companies (Acceptance of Deposits) Rules, 1975. Under these Rules companies are required to advertise and publish their financial accounts for the information and guidance of the public at the time of inviting the deposits. If a company fails to repay any deposit or part thereof in accordance with the terms and conditions on such deposit, the Company Law Board may direct the company to make repayment of such deposit or part thereof forth with or within such time and subject to such conditions as may be specified in the order. 3.4.5 Section 529 and 530 of the Companies Act provide that the dues of workers would rank pari passu with those of secured creditors in the event of closure of a company. This is intended to protect the interest of the workers of a sick company. 3.5 Inter-Corporate Loans and Investments 3.5.1 Section 370 of the Companies Act regulates inter-corporate loans and Section 372 regulates inter-corporate investments. Section 370 lays down that the aggregate of loans made by a company (lending company) to all bodies corporate shall not, without the approval of the Central Government, exceed such percentage of the aggregate of the subscribed capital of the lending company and its free reserves as may be prescribed. Section 372 permits the Board of Directors of a Company (the investing company) to invest in the shares of any other bodies corporate not exceeding such percentage of the subscribed capital and free reserves of the investing company as may be prescribed. 3.6 Company Law Board 3.6.1 The Central Government has constituted an independent Company Law Board with quasi-judicial powers with effect from 31.5.1991. The Board has its Regional Benches at Mumbai, Calcutta, Chennai and New Delhi besides the Principal Bench at New Delhi. The matters falling under Sections 235, 237, 247, 248, 250, 397/398, 408 and 409 and under Chapter VI of Part VI of the Companies Act, 1956 are dealt with by the Principal Bench at New Delhi. The Regional Benches are mainly concerned with Sections 17, 58A, 111 and 113. The maximum number of applications received by Regional Benches fall under Section 58A(9) of the Companies Act for giving directions to the companies to refund public deposits on their maturity. During the period from 1.4.1996 to 31.12.1996, 815 applications under Section 58A(9) were disposed of by the Regional Benches of the Company Law Board. 3.6.2 The constitution of CLB is as follows:1. Justice P.K. Majumdar, Chairman 2. Shri S. Balasubramanian, Vice Chairman 3. Shri C.R. Mehta, Member 4. Shri A.R. Ramanathan, Member 5. Shri K.K. Balu, Member 6. Shri C.R. Das, Member II. ADMINISTRATION OF THE COMPANIES ACT COMPANY PETITIONS: 3.7 Particulars of petitions/ applications received and disposed of by the various Benches of Company Law Board for the year 1996-97 (April, 1996 to December, 1996) are given in Table 4.1.

3.10.2 During April to December, 1996, 1450 applications received for approval of appointment of Cost Auditors in compliance with the Section 233B(2) of the Companies Act were

processed by the Department. The total fee collected on these applications amounted to Rs.6,53,160/-. 3.11 Inspections 3.11.1 Section 209A of the Companies Act, 1956, empowers the Registrar of Companies and the officers of the Central Government who have been authorised in this behalf to undertake inspection of the books of accounts and other records of companies. In all 151 inspections were conducted during the year 1995-96 and 105 during the period April to December, 1996. 3.11.2 The material brought out in the inspection reports was made use of for taking action under the provisions of the Companies Act. In certain cases prosecutions were also launched on the basis of findings contained in the inspection reports. Besides, cases involving non-compliance of provisions of the Companies Act including inadequate maintenance of statutory records noticed during such inspections were also taken up with the companies for necessary remedial action. In addition, information of interest to other Government Departments-agencies as brought out in the inspection reports was also communicated to them for suitable action. 3.12 Loans to Directors and Relatives 3.12.1 Section 295(1) of the Companies Act provides that every public limited company or a private limited company which is a subsidiary of a public limited company, shall obtain prior approval of the Central Government before giving any loan or giving any guarantee in connection with the loans to directors, relatives of the directors or to a private limited company or a firm in which directors of the company are interested. 64 such applications, including 30 applications brought forward from the previous year, were considered during April-December, 1996. Of these, 20 applications were approved, 15 were rejected, 23 were withdrawn/ closed and 6 remained pending as on 31st December, 1996. 3.13 Inter-Corporate Loans 3.13.1 Section 370(1) of the Companies Act provides that every public limited company or a private limited company, which is a subsidiary of a public limited company, shall obtain prior approval of the Central Government for making any loan to other bodies corporate in excess of the prescribed limits. 3.13.2 During April-December, 1996 fifty five applications including 25 brought forward from the previous year were considered by the Central Government under Section 370 for grant of loans in excess of the prescribed limits to the other bodies corporate. Of these, 21 were approved, 9 were rejected, 15 were withdrawn/closed and 10 were pending as on 31st December, 1996. 3.14 Inter-Corporate Investments 3.14.1 Under Section 372 of the Companies Act, 1956 for making inter corporate investments in excess of the limits prescribed therein, the Central Government considered during April to December, 1996, 598 applications including 223 applications brought forward from the previous year. Of these, 287 applications were approved, 198 were rejected, withdrawn/closed and remaining 113 applications were pending as on 31st December, 1996. 3.15 Miscellaneous Applications 3.15.1 During the period 1.4.96 to 31.12.96, 4 applications under Section 399(4) of the Act, relating to authorization to make applications under Section 397 and 398 had been received. These applications are pending as on 31.12.96. 3.16 Investors Protection 3.16.1 The Investor Protection Cell set up in the Department of Company Affairs is fully computerised and provides a suitable mechanism for redressal of investors grievances. Complaints received from the investors in the Cell are processed immediately by referring them to the concerned companies for speedy remedial action. An acknowledgment is issued to the complainant automatically. Subsequently, action taken as informed by the company is also communicated to the complainant. The Computer Software is designed to take care of Administrative requirements thereby reducing the processing time to the minimum. 3.16.2 The Department has processed 11,346 complaints during the period from 1.4.1996 to 31.12.1996 and out of which, 9,934 complaints were satisfactorily redressed. Penal action was also initiated against 114 companies during this period, on the basis of investors complaints relating to nonrefund of application money, nonreceipt of share/debenture certificates, non registration of transfer of

shares, etc. 3.17 Appointment of Auditors in Government Companies 3.17.1 During April - December, 1996, 220 advices were received from the Office of Comptroller and Auditor General of India for appointment of auditors in Government Companies. 82 advices were brought forward from the previous year. Of the 302 advices considered, all advices were disposed and there was no advice pending as on 31.12.96. 3.18 Annual General Meeting by Government Companies 3.18.1 During April - December, 1996, 231 applications were received from Government Companies for extension of time for holding Annual General Meetings and 38 for change of venue for such meetings under Section 166(1) and 166(2) of the Act respectively. All these applications were disposed of.

FOREIGN EXCHANGE REGULATION ACT,(FERA) 1973

[As amended by the Foreign Exchange Regulation (Amendment) Act, 1993](Act 29 of 1993) An Act to consolidate and amend the law regulating certain payments, dealings in foreign exchange and securities, transactions indirectly affecting foreign exchange and the import and export of currency, for the conservation of the foreign exchange resources of the country and the proper utilisation thereof in the interests of the economic development of the country. BE it enacted by Parliament in the Twenty-fourth Year of the Republic of India as follows :. Definitions 2. In this Act, unless the context otherwise requires, (a) "Appellate Board" means the Foreign Exchange Regulation Appellate Board constituted by the Central Government under sub-section(1)of section 52; (b) "authorised dealer" means a person for the time being authorised under section 6 to deal in foreign exchange; (c) "bearer certificate" means a certificate of title to securities by the delivery of which (with or without endorsement) the title to the securities is transferable; (d) "certificate of title to a security" means any document used in the ordinary course of business as proof of the possession or control of the security, or authorising or purporting to authorise, either by an endorsement or by delivery, the possessor of the document to transfer or receive the security thereby represented; (e) "coupon" means a coupon representing dividends or interest on a security; The provisions of F.E.R. (Amendment) Act, 1993 (hereafter referred to as Act 29 of 1993) came into force on the 8th day of January 1993. (f) "currency" includes all coins, currency notes, banks notes, postal notes, postal orders, money orders, cheques, drafts, traveller's cheques, letters of credit, bills of exchange and promissory notes; (g) "foreign currency" means any currency other than Indian currency; (h) "foreign exchange" means foreign currency and includes (i) all deposits, credits and balances payable in any foreign currency, and any drafts, traveller's cheques, letters of credit and bills of exchange, expressed or drawn in Indian currency but payable in any foreign currency; (ii) any instrument payable, at the option of the drawee or holder thereof or any other party thereto, either in Indian currency or in foreign currency or partly in one and partly in the other; (i) "foreign security" means any security created or issued elsewhere than in India, and any security the principal of or interest on which is payable in any foreign currency or elsewhere than in India; (j) Deleted by Act 29 of 1993 (k) "Indian currency" means currency which is expressed or drawn in Indian rupees but does not include special bank notes and special one-rupee notes issued under section 28A of the Reserve Bank of India Act, 1934; (l) "Indian custom waters" means the waters extending into the sea to a distance of twelve nautical miles measured from the appropriate base line on the coast of India and includes any bay, gulf, harbour, creek

or tidal river;.(m) "money-changer" means a person for the time being authorised under section 7 to deal in foreign currency; (n) "overseas market", in relation to any goods, means the market in the country outside India and in which such goods are intended to be sold; (o) "owner", in relation to any security, includes any person who has power to sell or transfer the security, or who has the custody thereof or who receives, whether on his own behalf or on behalf of any other person, dividends or interest thereon, and who has any interest therein, and in a case where any security is held on any trust or dividends or interest thereon are paid into a trust fund, also includes any trustee or any person entitled to enforce the performance of the trust or to revoke or vary, with or without the consent of any other person, the trust or any terms thereof, or to control the investment of the trust moneys; (p) "person resident in India" means (i) a citizen of India, who has, at any time after the 25th day of March, 1947, been staying in India but does not include a citizen of India who has gone out of, or stays outside, India, in either case-- (a) for or on taking up employment outside India, or (b) for carrying on outside India a business or vocation outside India, or (c) for any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period; (ii) a citizen of India, who having ceased by virtue of paragraph (a) or paragraph (b) or paragraph (c) of sub-clause (I) to be resident in India, returns to, or stays in, India, in either case -(a) for or on taking up employment in India, or (b) for carrying on in India a business or vocation in India, or.(c) for any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period; (iii) a person, not being a citizen of India, who has come to, or stays in, India, in either case -(a) for or on taking up employment in India, or (b) for carrying on in India a business or vocation in India, or (c) for staying with his or her spouse, such spouse being a person resident in India, or (d) for any other purposes, in such circumstances as would indicate his intention to stay in India for an uncertain period; (iv) a citizen of India, who, not having stayed in India at any time after the 25th day of March, 1947, comes to India for any of the purposes referred to in paragraphs (a), (b) and (c) of sub-clause (iii) or for the purpose and in the circumstances referred to in paragraph (d) of that sub-clause or having come to India stays in India for any such purpose and in such circumstances. Explanation - A person, who has, by reason only of paragraph (a) or paragraph (b) or paragraph (d) of sub-clause (iii) been resident in India, shall, during any period in which he is outside India, be deemed to be not resident in India; (q) "person resident outside India" means a person who is not resident in India; (r) "precious stone" includes pearl and semi-precious stone and such other stone or gem as the Central Government may for the purposes of this Act, notify in this behalf in the Official Gazette; (s) "prescribed" means prescribed by rules made under this Act; (t) "Reserve Bank" means the Reserve Bank of India;.(u) "security" means shares, stocks, bonds, debentures, debenture stock, Government securities as defined in the Public Debt Act, 1944, savings certificates to which the Government Savings Certificates Act, 1959 applies, deposit receipts in respect of deposits of securities, and units or sub-units of unit trusts and includes certificates of title to securities, but does not include bills of exchange or promissory notes other than Government promissory notes; (v) Deleted by Act 29 of 1993 (w) "transfer", in relation to any security, includes transfer by way of loan or security. Classes of officers of Enforcement 3. There shall be the following classes of officers of Enforcement, namely:(a) Directors of Enforcement; (b) Additional Directors of Enforcement; (c) Deputy Directors of Enforcement; (d) Assistant Directors of Enforcement; and (e) such other class of officers of Enforcement as may be appointed for the purposes of this Act. Appointment and powers of officers of Enforcement 4. (1) The Central Government may appoint such persons as it thinks fit to be officers of Enforcement.

(2) Without prejudice to the provisions of sub-section (1), the Central Government may authorise a Director of Enforcement or an Additional Director of Enforcement or a Deputy Director of Enforcement or an Assistant Director of Enforcement to appoint officers of Enforcement below the rank of an Assistant Director of Enforcement. (3) Subject to such conditions and limitations as the Central Government may impose, an officer of Enforcement may exercise the powers and discharge the duties conferred or imposed on him under this Act. Entrustment of functions of Director 5. The Central Government may, by order and subject to such conditions and limitations as it thinks fit to impose, authorise any officer of customs or any Central Excise Officer or any police officer or any other officer of the Central Government or a State Government to exercise such of the powers and discharge such of the duties of the Director of Enforcement or any other officer of Enforcement under this Act as may be specified in the order. Authorised dealers in foreign exchange 6. (1) The Reserve Bank may, on an application made to it in this behalf, authorise any person to deal in foreign exchange. (2) An authorisation under this section shall be in writing and (i) may authorise transactions of all descriptions in foreign currencies or may be restricted to authorising dealings in specified foreign currencies only; (ii) may authorise dealings in all foreign currencies or may be restricted to authorising specified transactions only; (iii) may be granted to be effective for a specified period, or within specified amounts; (iv) may be granted subject to such conditions as may be specified therein. (3) Any authorisation granted under sub-section (1) may be revoked by the Reserve Bank at any time if the Reserve Bank is satisfied that, - (i) it is in the public interest to do so;or (ii) the authorised dealer has not complied with the conditions subject to which the authorisation was granted or has contravened any of the provisions of this Act or of any rule, notification, direction or order made thereunder: Provided that no such authorisation shall be revoked on the ground specified in clause (ii) unless the authorised dealer has been given a reasonable opportunity for making a representation in the matter. (4) Any authorised dealer shall, in all his dealings in foreign exchange and in the exercise and discharge of the powers and of the functions delegated to him under section 74, comply with such general or special directions or instructions as the Reserve Bank may, from time to time, think fit to give, and, except with the previous permission of the Reserve Bank, an authorised dealer shall not engage in any transaction involving any foreign exchange which is not in conformity with the terms of his authorisation under this section. (5) An authorised dealer shall, before undertaking any transaction in foreign exchange on behalf of any person, require that person to make such declarations and to give such information as will reasonably satisfy him that the transaction will not involve, and is not designed for the purpose of, any contravention or evasion of the provisions of this Act or of any rule, notification, direction or order made thereunder, and where the said person refuses to comply with any such requirement or makes only unsatisfactory compliance therewith, the authorised dealer shall refuse to undertake the transaction and shall, if he has reason to believe that any such contravention or evasion as aforesaid is contemplated by the person, report the matter to the Reserve Bank. Money-changers 7. (1) The Reserve Bank may, on an application made to it in this behalf, authorise any person to deal in foreign currency. (2) An authorisation under this section shall be in writing and -(i) may authorise dealings in all foreign currencies or may be restricted to authorising dealings in specified foreign currencies only; (ii) may authorise transactions of all descriptions in foreign currencies or may be restricted to authorising specified transactions only; (iii) may be granted with respect to a particular place where alone the money changer shall carry on his business; (iv) may be granted to be effective for a specified period, or within specified amounts; (v) may be granted subject to such conditions as may be specified therein.

(3) Any authorisation granted under sub-section (1) may be revoked by the Reserve Bank at any time if the Reserve Bank is satisfied that -( i) it is in the public interest to do so; or (ii) the money-changer has not complied with the conditions subject to which the.authorisation was granted or has contravened any of the provisions of this Act or of any rule, notification, direction or order made thereunder: Provided that no such authorisation shall be revoked on the ground specified in clause (ii) unless the money-changer has been given a reasonable opportunity for making a representation in the matter. (4) The provisions of sub-sections (4) and (5) of section 6 shall, in so far as they are applicable, apply in relation to a money-changer as they apply in relation to an authorised dealer. Explanation - In this section, "foreign currency" means foreign currency in the form of notes, coins or traveller's cheques and "dealing" means purchasing foreign currency in the form of notes, coins or traveller's cheques or selling foreign currency in the form of notes or coins. Foreign Exchange Regulation Act, (FERA), 1973 controls India s foreign exchange control regime. Comprehensive amendments have been made to FERA, especially with respect to foreign investment, to add strength to the liberalizations announced in the economic policies. FERA provisions that imposed restrictions on locally incorporated companies with foreign equity holding in excess of 40 per cent (known as "FERA companies") have been removed. Such companies are now permitted to operate in India without any special restrictions, effectively placing them on par with wholly Indian owned companies. Foreign exchange controls have been substantially relaxed. Effective from August 20, 1994, India announced its movement to Article VII status in the IMF: the Indian Rupee is now fully convertible on the current account. For authorized foreign investors, the Indian Rupee is already convertible on the capital account. Full capital account convertibility is expected in the coming years. Although the Indian foreign exchange market is not yet fully developed, a variety of instruments have been introduced in the recent past. The dollar rupee forward market is very active, and firms have access to cross-currency options.

FEMA
The Foreign Exchange Management Act (1999) or in short FEMA has been introduced as a replacement for earlier Foreign Exchange Regulation Act (FERA). FEMA became an act on the 1st day of June, 2000. FEMA was introduced because the FERA didn t fit in with post-liberalisation policies. A significant change that the FEMA brought with it, was that it made all offenses regarding foreign exchange civil offenses, as opposed to criminal offenses as dictated by FERA. The main objective behind the Foreign Exchange Management Act (1999) is to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments. It was also formulated to promote the orderly development and maintenance of foreign exchange market in India. FEMA is applicable to all parts of India. The act is also applicable to all branches, offices and agencies outside India owned or controlled by a person who is a resident of India. The FEMA head-office, also known as Enforcement Directorate is situated in New Delhi and is headed by a Director. The Directorate is further divided into 5 zonal offices in Delhi, Mumbai, Kolkata, Chennai and Jalandhar and each office is headed by a Deputy Director. Each zone is further divided into 7 sub-zonal offices headed by the Assistant Directors and 5 field units headed by Chief Enforcement Officers. Updated details of FEMA notifications are given below. If you can t find what you are looking for, fill in the form on the right and our representative will get in touch with you at the earliest. Authorized dealers? From authorised dealers or money changers one can purchase foreign exchange.

Banks certified by the RBI to transact in foreign exchange and foreign securities are also referred to as authorized dealers. How much currency is allowed for a business tour? USD 25,000 is permitted for a business tour to any country, with the exception of Nepal and Bhutan. Requirements in excess of this amount require permission of the RBI. No foreign exchange is permissible for journey to Nepal and Bhutan. Can additional foreign exchange be taken for a medical trip abroad? Upto USD 100,000 is allowed for medical treatment overseas. Requirements over and above this will be sanctioned on the basis of an approximation by a doctor or hospital in India or overseas. How much forex is permitted for studies abroad? Since students studying abroad are treated as NRIs, all rules applicable to NRIs apply to them as well .They are also entitled to receive forex upto USD 100,000 from relatives towards the cost of their studies. How much foreign exchange is permitted for persons traveling abroad for employment? Upto USD100, 000 is allowed from any authorised dealer on the basis of self-declaration. How much foreign currency can an emigrant take? Upto USD100, 000 on self- declaration basis is permitted to meet initial expenses in the adopted country. No foreign exchange remittance outside India is permitted to earn points or credits for immigration. Such outward remittances have to be supported by the RBI. How much foreign currency can be sent as a gift to a person residing overseas? One can send upto USD 5,000 a year, though amount exceeding this requires permission from the RBI. How much foreign exchange can be carried by a person visiting India? Unlimited foreign exchange is allowed .In case the total value of cash instruments currency notes and travellers cheques - exceeds USD 10,000; a Currency Declaration Form has to be presented to the customs officials on arrival at the airport. Can a non-resident accept local hospitality from a resident? Yes. Can resident Indians open foreign currency accounts in India? Yes, EEFC Accounts and RFC Accounts can be kept by resident Indians. In the EEFC account maintained with a bank, residents are allowed to keep 50% of foreign currency remittances received from abroad which can be used for current account transactions and approved capital account transactions as specified by the RBI. In the RFC Accounts, returning Indians (ex-NRIs), can hold and maintain foreign currency. These funds are free from restrictions on use outside India. A RFC (Domestic) Account can also be maintained by resident Indians for receiving payments for services abroad, or proceeds of export of goods abroad, or received as gifts from relatives outside India. Can resident Indians hold possessions outside India? Yes, as per Section 6 of the Foreign Exchange Management Act, 1999, if such assets were purchased, held or owned during their residence outside India or inherited from a person who was resident outside India. Can an individual repatriate funds a second time during a calendar year? Repatriation is allowed only upto a limit of USD 25,000 in a calendar year, and no further remittances are permitted, even if the same funds have been remitted back to India. How are shares transferred from NRIs to Resident Indians and vice versa? Transfer from Non-Resident to Non-Resident: Transfer by way of sale: A person resident outside India can sell his shares or convertible debentures in the following manner: y The sale can take place provided the receiver does not have any venture in India in the same business y A NRI may sell the shares and convertible debentures possessed by him only to another NRI. y An NRI can sell his shares through an authorised broker in India

Transfer by way of Gift: NRIs can gift to resident Indians as under: y Any person be located in outside India, can present stocks or convertible debentures to any person resident outside India; provided the receiver does not have an existing tie up in India in the same business. y A NRI may gift his shares and/ or convertible debentures to another NRI only y Any person residing overseas may gift shares and/or convertible debentures to a person resident in India. Transfer from Resident to Non-Resident: Transfer by sale- General Permission A resident Indian may sell shares and convertible debentures of any Indian company whose business falls under the Automatic Route, to any person living outside India subject to the sectoral limits. y Any Indian company that proposes to sell shares or convertible debentures should not be involved in extending any financial service; y The sale should not fall within the ambit of the provisions of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997; and y Pricing procedures, documentation and reporting requirements for such a deal must be as per requirements of the RBI. Transfer by way of gift: An Indian resident who proposes to gift to a person resident outside India is required to make an application to the Central Office of Foreign Exchange Department, Reserve Bank with details of 1) Name and address of the involved parties transferor and transferee 2) Relationship between the two, and 3) Reasons for gifting What procedure is to be followed in case the transfer does not fall into any of the above categories? In such cases, an application to the RBI has to be made with y A copy of FIPB approval. y Consent/approval letter from transferor and transferee stating the number of shares, name of company in which investment is to be made and the rate at which the transfer is to be made. y Details of equity participation in the company by residents and non-residents. y All approvals and copies of FC-GPR from RBI pertaining to existing shares of the non-residents. y In case the seller is an NRI or an OCB, the copies of RBI approvals of the shares held on repatriation or non-repatriation basis. y In case the shares by the non-resident are under the SEBI Takeover Regulations, an Open Offer document filed with SEBI y A Chartered Accountant needs to certify the value of shares in a Fair Valuation Certificate as per guidelines y If the shares are unlisted, the fair value has to be calculated as per the former Controller of Capital Issue/s. Can the savings and income earned in India be repatriated? Yes, except where NRIs invest expressly in non-repatriable schemes. Dividends earned on foreign investments can be remitted without restriction. Can Foreign Currency Convertible Bonds (FCCBs) be issued by Indian companies? Yes, in compliance with the Scheme for Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism),1993 provided the External Commercial Borrowing guidelines of the RBI are adhered to. Can Preference Shares be used as a route to foreign investment? Yes. Proposals for such investments, which are considered as part of share capital, are filtered either through the automatic route or FIPB depending on the specific case.

Can investment be made by NRIs in unlisted shares issued by an Indian company? Yes. Is a foreigner allowed to establish a partnership/proprietorship concern in India? No. Only NRIs/PIOs are allowed to set up a partnership or proprietorship business in India on a nonrepatriation basis. Can rights shares issued by Indian companies be offered to foreigners at a discount? Yes, provided the rights shares are offered at par to residents as well. Foreign Technical Collaboration How are payments made for foreign technology transfer under the Automatic Route of RBI? Such payments are subject to: y a maximum of US$2 million; y Royalty upto 5 % for domestic sales and 8 % for exports, with no bar on the duration of the payments. y The royalty limits are exclusive of taxes and are calculated as per standard conditions. y The royalty is worked on the basis of the net ex-factory sale price of the product. y Payments are made through authorised banks What is to be done in cases where the Automatic Route of RBI for technology transfer does not apply? The Ministry of Commerce, Department of Industrial Policy and Promotion, is referred to in such cases. What is the procedure for foreign firms to establish a Liaison office in India? RBI approval is required to set up office in India by a foreign company. How does a foreign company obtain RBI sanction to start a Liaison Office in India? y The Liaison Office operates as a channel of communication between its overseas Head Office and parties in India. No business activity in India is permitted, and neither can it earn any income in India. The liaison office meets its expenses through inward remittances of foreign exchange from its Head Office abroad. y To open a liaison office, an submission in form FNC-1 along with relevant documents is made to Foreign Investment Division, Foreign Exchange Department, Reserve Bank of India, Central Office, Mumbai. y Consent to set up a liaison office at the outset is given for 3 years, which can be subsequently extended by the RBI s Regional Office y An annual Activity Certificate from a Chartered Accountant has to be presented at the Regional Office of the RBI, verifying that the Liaison Office is engaged in only those activities which are allowed by the RBI. How is a Project Office set up? y Foreign companies have been granted General Permission by the RBI to open Project Offices in India provided they have secured a contract for a project from an Indian company y the project is funded wholly by remittance from overseas; or y the project is funded by a bilateral or multilateral International Financing Agency; or y the project has been agreed to by a suitable authority; or y The Indian company awarding the contract has been extended a Term Loan by a financing institution y In case the above conditions are not met, or if the foreign company is established in Pakistan, Bangladesh, Sri Lanka, Afghanistan, Iran or China, such requests are sent to the Central Office of the Foreign Exchange Department of the RBI at Mumbai for sanction.

How is a Branch office set up? RBI permits foreign companies in the manufacturing and trading business to set up Branch Offices in India: y To represent its parent company to conduct business in India y To undertake research work in its area of business y To trade on a wholesale basis y To encourage possible technical and financial tie-ups between Indian companies and overseas companies. y Offering professional or consultancy services y Offering IT and software services y Giving technical sustenance to the products supplied by the parent company. Branch offices are not permitted to carry out manufacturing, processing and trading activities on their own. An Activity Certificate from a Chartered Accountant has to be submitted annually to the Central Office of FED. For annual remittance of income, Branch Offices may submit required documents to a bank. The track record of the Applicant Company, its existing trade relations with India and financial position of the company are taken into account by the RBI while scrutinizing the application.

INTELLECTUAL PROPERTY RIGHTS (IPR)

Intellectual property rights are legal rights, which result from intellectual activity in the industrial, scientific, literary and artistic fields. These rights give statutory expression to the moral and economic rights of creators in their creations. Intellectual property rights safeguard creators and other producers of intellectual goods and services by granting them certain time-limited rights to control the use made of those productions. These rights also promote creativity and the dissemination and application of its results and encourage fair-trading, which contributes to economic and social development

Trade Mark
A Trademark is any sign which can distinguish the goods and services of one trader from those of another. A sign includes words, logos, colours, slogans, three-dimensional shapes and sometimes sounds and gestures. A trademark is therefore a "badge" of trade origin. It is used as a marketing tool so that customers can recognise the product of a particular trader. To be registrable in India it must also be capable of being represented graphically, that is, in words and/or pictures. Changes In The Indian Trade Mark Law A new Trademark regime has been introduced in India since September 15, 2003. The new Trade Marks Act, 1999 has many innovative features: [1] Service Marks: A mechanism is now available to protect marks used in the service industry. Thus businesses providing services like computer hardware and software assembly and maintenance, restaurant and hotel services, courier and transport, beauty and health care, advertising, publishing, educational and the like are now in a position to protect their names and marks. [2] Collective Marks: Marks being used by a group of companies can now be protected by the group collectively. [3] Well-known marks: Marks, which are deemed to be well known, are defined. Such marks will enjoy greater protection. Persons will not be able to register or use marks, which are imitations of well-known trademarks. [4] Enlarged scope of registration: Persons who get their marks registered for particular goods in a particular class and commence using their marks can sue and prevent other persons from

(i) Using the same or similar marks even for different goods falling in other classes; (ii) Using the same or similar marks even only as part of their firm name or company name; (iii) Using the same or similar mark only in advertising or on business papers; (iv) Importing or exporting goods under the said trade mark; (v) Unauthorized oral use of the said trademark. [5] Stringent punishment: Punishment for violating a trademark right has been enhanced. The offence has now been made cognizable and wide powers have been given to the police to seize infringing goods. At the same time the power of the Courts to grant ex parte injunctions have been amplified. [6] Appellate Board: An appellate board (IPAB) has been constituted based in Chennai for speedy disposal of Appeals and rectification applications. [7] Expedited procedure: Mechanisms have been set in place for expediting search and registration by paying five times the normal fee. [8] Enhanced renewal period: Registered trademarks need to be renewed every ten years. [9] License agreements do not need to be compulsorily registered. [10] Marks may include the shape of goods. [11] Marks may include a combination of colors. 1. Legal Basis y The Trade Marks Act, 1999 y The Trade Marks Rules, 1959. The law is based mainly on the United Kingdom Trade Marks law and provides for the registration of trademarks which are being used, or which will be used, for certain goods to indicate a connection between them and some person who has the right to use the marks with or without any indication as to the identity of the person. Registered users. The Central Government can refuse the registration of a registered user if it is against the public interest or the development of industry, trade or commerce in India. Before doing so the Central Government must disclose the facts and circumstances on the basis of which it proposes to refuse the registration of a registered user and give the applicant an opportunity of a hearing. y Marking of goods: The law does not prescribe that a registered trademark, when used by its proprietor, be described as such on the goods to which it is applied nor does it require that the proprietor identity be disclosed. Where a mark is used by a registered user, however, goods must be marked in such a way as to disclose the identity of the registered proprietor and the fact that the mark is being used by the registered user by permission of the registered proprietor. All goods imported into or manufactured or assembled in India may be required to be marked in such a way as to indicate their country of origin. Under Section 117 of the Act, the Indian Government will, from time to time, issue notifications specifying the manner in which the goods are to be marked. y Rectification for non-use: The Register may be rectified (removal of a mark) in respect of a registered mark and one of the grounds for applying for rectification is the non-use of a mark for a period exceeding five years and one month before filing of the rectification application unless there are special circumstances excusing non-use. y Infringement: Suits may be filed against the infringement of registered marks and in any suit, registration may be regarded as valid in all respects even years from the date of registration. Unregistered trademarks with

reputation in India or internationally well-known trademarks, can be protected against misuse in a passing off action.

Patents
A Patent is a legal monopoly, which is granted for a limited time by a country to the owner of an invention. Merely to have a patent does not give the owner the rights to use or exploit the patented invention. That right may still be affected by other laws such as health and safety regulation, or the food and drugs regulation or even by other patents. The patent, in the eyes of the law, is a property right and it can be given away, inherited, sold, licensed and can even be abandoned. As it is conferred by the government, the government, in certain cases even after grant or even if it has been, in the meantime, sold or licensed, can revoke it. y A Patent gives an inventor the right for a limited period to stop others from making, using, selling or importing an invention without the permission of the inventor. That is why patent is called a "negative right" y Patents are generally concerned with functional and technical aspects of products and processes and must fulfill specific conditions to be granted. y Most patents are for incremental improvements in known technology - evolution rather than revolution. The technology does not have to be complex. y Patent rights are territorial; an Indian patent does not give rights outside of India. y Patent rights last for up to 20 years in India and in most countries outside India. y Depending on where you wish your patent to be in effect, you must apply to the appropriate body. In India, this is The Indian Patent Office. There are various Patent Offices around the world. Alternatively, a Patent Agent can apply on your behalf. 1. Legal Basis y The Patents Act 1970, as amended by The Patents (Amendment) Act 2005. y The Patents Rules, 2003, as amended by The (Amendment) Rules 2006. 2. Filing Application Any person, even if he or she is a minor, may apply for a patent either alone or jointly with any other person. Such persons include the inventor, or his assignee or legal representative in the case of an ordinary application or, in the case of a priority application, the applicant in the convention country or his assignee or his legal representative. A corporate body cannot be named as an inventor. Foreigners and nationals not living in India need an address for service in India for this purpose. They may appoint a registered agent or representative whose address for service can be the address for service in India. y Place of filing: An application for patent must be filed at the Patent Office branch within whose territorial jurisdiction the applicant resides or has his principal place of business or domicile. A foreign applicant must file in the Patent Office branch having jurisdiction over the place where his address for service is located. y Priority: Priority can be claimed from the earliest corresponding application in a convention country, provided that the Indian application is filed within twelve months of the priority date. Multiple and partial priorities are allowed. y Specification: A priority application must be filed with a complete specification in the first instance but a non-priority application may be filed with either a provisional specification or a complete specification. Where a provisional specification is filed in the first instance, a complete specification must be filed within twelve months. Where two or more provisional specifications have been filed, the specifications may be cognated and all the subject matter may be incorporated into a single complete specification to be lodged within twelve months of the date of the earliest filed provisional specification. y Naming of inventor(s): As regards non-priority applications, the inventor(s) must be named in the application form. As regards priority applications, a declaration as to inventorship must be filed with the application or within a maximum period of six months.

y Information of corresponding applications in other countries: It is necessary at the time of filing a patent application in India, to inform the Controller of the details of all corresponding applications in other countries and to undertake to keep the Controller so informed up to the grant of the Indian application. Failure to do so could result in the refusal of the application in case it is opposed, or even revocation of a patent in proceedings before the High Court. 4. Patent Publication Publication takes place 18 months from the date of the application. Urgent publication is possible on request on payment of fees. On and from the date of publication of application for patent and until the date of grant of a patent in respect of such application, the applicant will have the like privileges and rights as if a patent for the invention had been granted on the date of publication of the application. 11A[7] y Pre-Grant opposition of patent application : After publication but before the date of grant by way of representation, anyone may file opposition to the grant of a patent. y Publication of subject matter: The grant of an application is published in the official journal and is notified therein for post Grant opposition. A patent can be revoked within one year after grant by postgrant opposition proceedings before the Controller of Patents . y Revocation of a patent:It is possible on the grounds of prior publication anywhere in the world, public use or knowledge in India, lack of novelty with regard to the subject matter, obviousness, lack of inventiveness, ambiguity, insufficiency of description of the invention, fraud, false suggestion or representation that the person named as the inventor is not the true inventor, lack of utility, non-patentability of subject matter (e.g. food, drug or medicine per se, atomic energy, mere admixture, mere arrangement of known devices, process of testing, method of agriculture or horticulture, process of medicinal treatment), failure to furnish or falsity in material particulars of information regarding corresponding applications in other countries supplied to the Controller or that the invention is contrary to law or morality. y Restoration: A lapsed patent may be restored if an application for restoration is made within one year of the date of lapsing of the patent, provided it can be shown that the lapsing of the patent was unintentional and that there was no undue delay in making the application for restoration. y Working of patents: Every patentee and every licensee is required to furnish within three months from the end of the calendar year in which the patent is granted, a statement as to the extent to which the invention has been worked in India on a commercial scale in the preceding year. Non filing of this statement is a criminal offence. y Compulsory licenses: After three years from the date of sealing of a patent, an interested party may apply to the Controller for the grant of a compulsory license alleging that the reasonable requirements of the public with respect to the invention have not been satisfied or that the invention is not available at reasonable price. If the Controller is satisfied that a prima facie case for an applicant for compulsory license has been made out, he shall serve notice on the patentees who, if they so desire, may oppose the application for compulsory license. y Marking: It is not compulsory but advisable as otherwise damages may be difficult to recover in cases of infringement. The invention may be marked with the word Patented or Patent accompanied by the number and year of the patent. y Infringement: An infringement suit may be instituted by a patentee or his exclusive licensee. Every ground for revocation is available as a defense and revocation can be counter claimed in infringement proceedings. The Court may grant relief in respect of a valid claim or claims even though one or more other claims in the suit may be held to be invalid. Relief may include damages and costs as awarded by the court. A suit

for injunction may be instituted and damages recovered in cases where there have been groundless threats. Any person may institute a suit for declaration as to non-infringement of a patent. Onus of proof of non-infringement lies with the defendant. Some countries, such as the USA, which may be a large potential market for your software, have a more liberal approach to software patenting and often grant patents for software, which would be excluded in India and other countries. Deciding whether or not a particular computer program is patentable is a complex issue and advice from a Patent Agent may help to determine which is the most effective form of protection available. Copyright Registration: Copyright Registration in India gives the creators of a wide range of material, such as literature, art, music, sound recordings, films and broadcasts, economic rights enabling them to control use of their material in a number of ways, such as by making copies, issuing copies to the public, performing in public, broadcasting and use on-line. It also gives moral rights to be identified as the creator of certain kinds of material and to object to its distortion or its mutilation. (Material protected by copyright is termed a "work".) However, copyright does not protect ideas, names or titles. The purpose of copyright law in India is to allow copyright registrants to gain economic rewards for their efforts and so encourage future creativity and the development of new material which benefits us all. Copyright material is usually the result of creative skill and/or significant labour and/or investment and without protection, it would often be very easy for others to exploit material without paying the creator. Most uses of copyright material therefore require permission from the copyright owner. However there are exceptions to copyright, so that some minor uses may not result in copyright infringements. Copyright protection is automatic as soon as there is a record in any form of the material that has been created. Under the Indian Copyright Act there is a provision to register copyright although this is voluntary. Owner of Copyright y In the case of a literary, dramatic, musical or artistic work, the general rule is that the author, i.e. the person who created the work, is the first owner of the economic rights under copyright. However, where such a work is made in the course of employment, the employer is the first owner of these rights, unless an agreement to the contrary has been made with the author. y In the case of a film, the principal director and the film producer are joint authors and first owners of the economic rights and similar provisions as referred to above apply where the director is employed. y In the case of a sound recording the record producer is the author and first owner of copyright; in the case of a broadcast, the broadcaster; and in case of a published edition, the publisher. Copyright is, however, a form of property which, like physical property, can be bought or sold, inherited or otherwise transferred, wholly or in part. So, some or all of the economic rights may subsequently belong to someone other than the first owner. In contrast, the moral rights accorded to authors of literary, dramatic, musical and artistic works and film directors remain with the author or director or pass to his or her heirs on death. Copyright in material produced by a Government department belongs to the Government of India. Copyright owners generally have the right to authorise or prohibit any of the following things in relation to their works: y Copying of the work in any way eg. photocopying / reproducing a printed page by handwriting, typing or scanning into a computer / taping live or recorded music. y Issuing copies of the work to the public. y Public delivery of lectures or speeches etc. y Broadcasting of the work, audio / video or including it in a cable programme. y Making an adaptation of the work such as by translating a literary or dramatic work, transcribing a musical work and converting a computer program into a different computer language or code.

Copyright is infringed when any of the above acts are done without authorisation, whether directly or indirectly and whether the whole or a substantial part of a work, unless what is done falls within the scope of exceptions to copyright permitting certain minor uses of material. There are a number of exceptions to copyright that allow limited use of copyright works without the permission of the copyright owner. For example, limited use of works may be possible for research and private study, criticism or review, reporting current events, judicial proceedings, teaching in schools and other educational establishments and not for profit playing of sound recordings. But if you are copying large amounts of material and/or making multiple copies then you may still need permission. Also where a copyright exception covers publication of excerpts from a copyright work, it is generally necessary to include an acknowledgement. Sometimes more than one exception may apply to the use you are thinking of. Exceptions to copyright do not generally give you rights to use copyright material; they just state that certain activities do not infringe copyright. So it is possible that an exception could be overridden by a contract you have signed limiting your ability to do things that would otherwise fall within the scope of an exception. It is important to remember that just buying or owning the original or a copy of a copyright work does not give you permission to use it the way you wish. For example, buying a copy of a book, CD, video, computer program etc does not necessarily give you the right to make copies (even for private use), play or show them in public. Other everyday uses of copyright material, such as photocopying, scanning, downloading from a CD-ROM or on-line database, all involve copying the work. So, permission is generally needed. Also, use going beyond an agreed licence will require further permission. Design Registration in India: Patenting a Design Design means only the features of shape, configuration, pattern or ornament or composition of lines or color or combination thereof applied to any article whether two dimensional or three dimensional or in both forms, by any industrial process or means, whether manual, mechanical or chemical, separate or combined, which in the finished article appeal to and are judged solely by the eye but does not include any mode or principle of construction or any thing which is in substance a mere mechanical device and does not include any trade mark, as defined in clause (v) of sub-section of Section 2 of the Trade and Merchandise Marks Act, 1958, property mark or artistic works as defined under Section 2(c) of the Copyright Act, 1957. In India, designs are protected by two legal rights: y Registered designs and Artistic copyright Design registration in India gives the owner, a monopoly on his or her product, i.e. the right for a limited period to stop others from making, using or selling the product without their permission and is additional to any design right or copyright protection that may exist automatically in the design. 1. Legal Basis y Designs Act, 2000 ,Designs Rules, 2001 2. 'Article' under the Designs Act, 2000 Under the Designs Act, 2000 the "article" means any article of manufacture and any substance, artificial, or partly artificial and partly natural and includes any part of an article capable of being made and sold separately. 3. 'Set of article' under Designs Act 2000 If a group of articles meets the following requirements then that group of articles may be regarded as a set of articles under the Designs Act, 2000: y Ordinarily on sale or intended to be used together. y All having common design even though articles are different (same class). y Same general character. Generally, an article having the same design and sold in different sizes is not considered as a set of articles. Practical example: "Tea set", "Pen set", "Knife set" etc. 4. Essential requirements for the registration of 'Design' under the Designs Act, 2000 y The design should be new or original, not previously published or used in any country before the date of application for registration. The novelty may reside in the application of a known shape or pattern to new Subject matter. Practical example: The known shape of "Kutub Minar" when

applied to a cigarette holder the same is registrable. However, if the design for which application is made does not involve any real mental activity for conception, then registration may not be considered. The design should relate to features of shape, configuration, pattern or ornamentation applied or applicable to an article. Thus, designs of industrial plans, layouts and installations are not registerable under the Act. The design should be applied or applicable to any article by any industrial process. Normally, designs of artistic nature like painting, sculptures and the like which are not produced in bulk by any industrial process are excluded from registration under the Act. The features of the design in the finished article should, appeal to and are judged, solely by the eye. This implies that the design must appear and should be visible on the finished article, for which it is meant; Thus, any design in the inside arrangement of a box, money purse or almirah may not be considered for showing such articles in the open state, as those articles are generally put in the market in the closed state. Any mode or principle of construction or operation or any thing which is in substance a mere mechanical device, would not be registerable design. For instance, a key having its novelty only in the shape of its corrugation or bend at the portion intended to engage with levers inside the lock associated with, cannot be registered as a design under the Act. However, when any design suggests any mode or: principle of construction or mechanical or other action of a mechanism, a suitable disclaimer in respect thereof is required to be inserted on its representation, provided there are other registerable features in the design. The design should not include any Trade Mark or property mark or artistic works as defined under the Copyright Act, 1957.

5. Applying for Registration of Design The application for registration of design can be filed by the applicant himself/herself or through a professional person (i.e. patent agent, legal practitioner). However, for the applicants not being residents of India, an agent residing in India has to be employed. 6. Place of applying for Registration of Design Any person who desires to register a design shall submit the following documents to the Controller of Designs, The Patent Office at Kolkata, or at any of its branch offices at New Delhi, Mumbai and Chennai. For address and contact numbers, click here 7. Duration of the Registration of a Design and its extension The duration of the registration of a design is initially ten years from the date of registration but in uses where claim to priority has been allowed, the duration is ten years from the priority date. This initial period of registration may be extended by further period of 5 years on an application made in Form-3 accompanied by a fee of Rs. 2,000/- to the Controller before the expiry of the said initial period of Copyright. The proprietor of a design may make application for such extension even as soon as the design is registered. 8. Cancellation of Registration of a Design The registration of a design may be cancelled at any time after the registration of design, on a petition for cancellation in form 8, with a fee of Rs. 1,500/- to the Controller of Designs, on the following grounds: y That the design has been previously registered in India or y That it has been published in India or elsewhere prior to date of registration or y The design is not new or original or y Design is not registrable or y It is not a design under Clause (d) of Section 2. 9. Restoration of the lapsed design due to non-payment of extension fee within prescribed time A registration of design will cease to be effective on non-payment of extension fee for further term of five years, if the same is not paid before the expiry of original period of 10 years. However, new provision has been incorporated in the Act so that lapsed designs may be restored, provided the following conditions are satisfied:

Application for restoration in Form-4 with fee of Rs. 1,000/- is filed within one year from the date of lapse stating the ground for such non-payment of extension fee with sufficient reasons. y If the application for restoration is allowed, the proprietor is required to pay the extension fee of Rs: 2,000/- and an additional fee of Rs. 1,000/- and finally the lapsed registration is restored. 10. Piracy of a Design Piracy of a design means the application of a design or its imitation to any article belonging to class of articles in which the design has been registered for the purpose of sale or importation of such articles without the written consent of the registered proprietor. Publishing such articles or exposing them for sale with knowledge of the unauthorized application of the design to them also involves piracy of the design. 11. Penalty for the piracy of a registered Design If anyone contravenes the copyright in a design for the every contravention he/she is liable to pay a sum not exceeding Rs. 25,000/- to the registered proprietor subject to a maximum of Rs. 50,000/recoverable as contract debt in respect of any one design. The registered proprietor may bring a suit for the recovery of the damages for any such contravention and for injunction against repetition of the same. Total sum recoverable shall not exceed Rs. 50,000/- as contract debt as stated in Section 22(2)(a). The suit for infringement, recovery of damage should not be filed in any court below the court of District Judge.
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