COMPANIES ACT, 1956

BUSINESS
 A business is an organization that uses economic
resources or inputs to provide goods or services to
customers in exchange for money or other goods
and services.
BUSINESS ENTITY
 A business entity is an entity that is formed and
administered as per commercial law in order to
engage in business activities, charitable work, or
other activities allowable. Most often, business
entities are formed to sell a product or a service.
 TYPES OF BUSINESSES
 Service Business - Service type firms offer professional skills,
expertise, advice, and other similar products. Examples of service
businesses are: schools, repair shops, hair salons, banks, accounting
firms, and law firms.

 Merchandising Business - This type of business buys products at

wholesale price and sells the same at retail price. They are known
as "buy and sell" businesses. - Grocery stores, convenience stores,
resellers
 TYPES OF BUSINESSES
 Manufacturing Business - Unlike a merchandising business, a
manufacturing business buys products with the intention of using
them as materials in making a new product. Thus there is a
transformation of the products purchased. Manufacturing
businesses combine raw materials, labor, and factory expenses in
production.

 Hybrid Business - Hybrid businesses are companies that may be

classified in more than one type of business. A restaurant, for
example, combines ingredients in making a fine meal, sells a cold
bottle of wine, and fills customer orders.
 Nonetheless, these companies may be classified according to their
major business interest.
FORMS OF BUSINESS
ORGANIZATIONS
 Sole Proprietorship – single owner

 Owner remains personally liable for

lawsuits filed against the business
 No state filing required to form a sole
proprietorship or no registration
required
 Easy to form and operate, least costly
 Owner reports business profit and loss
on their personal tax return
FORMS OF BUSINESS
ORGANIZATIONS
 Partnership

 Partners remain personally liable for lawsuits

filed against the business
 Usually no state filing required to form a
partnership/ Registration not compulsory
 Easy to form and operate.
 Owners report their share of profit and loss in
the company on their personal tax returns.
 Active Partners and Sleeping Partners
FORMS OF BUSINESS
ORGANIZATIONS
 C Corporation

 Independent legal and tax structures separate

from their owners.
 Help separate your personal assets from your
business debts.
 No limit to the number of shareholders.
 Taxed on corporate profits and shareholder
dividends.
 Must hold annual meetings and record
meeting minutes.
FORMS OF BUSINESS
ORGANIZATIONS
 S Corporation

 Independent legal and tax structures separate

from their owners.
 Help separate your personal assets from your
business debts.
 Owners report their share of profit and loss in
the company on their personal tax returns.
 Limits on number of shareholders
 Must hold annual meetings and record
meeting minutes.
 Board of Directors actually run the company
 FORMS OF BUSINESS
ORGANIZATIONS
 Limited Liability Company

 Independent legal structures separate from their owners.

 Separates your personal assets from your business debts
 Taxed similarly to a sole proprietorship (if one owner) or a
partnership (if multiple owners).
 No limit to the number of owners
 Not required to hold AGMs or record minutes.
 An LLC is not incorporated; hence, it is not considered a
corporation.
 Governed by operating agreements
 SOME OTHER FORMS
 Hindu Undivided Family - businesses owned by a joint family belonging
to Hindu religion. Even though Jain and Sikh families are not governed
by the Hindu law, they can still form a HUF.
 Co-Operatives – Like GCMMF etc. -A cooperative is a business
organization owned by a group of individuals and is operated for their
mutual benefit. – Owners known as members, Co-operative Banks,
Housing Co-operatives
 Dormant Company – company formed for a future project to hold assets
or IPR’s of company
SOME OTHER FORMS
 Pvt. Ltd Co - May have 2–200 shareholders;
shares are held privately and can not be offered to
public.
 Small company - A company other than a public
company whose paid up share capital is not more
than 50 lakh rupees or turnover does not exceed
two crore rupees
 Ltd. (Public Limited Company): ≈ plc (UK)
SOME OTHER FORMS
 Public Sector Unit (PSU) - Alternatively known as
Public Sector Enterprise (PSE). It may be public
limited company listed on stock exchanges with
major ownership by a state government or a
central government of India or it may be unlisted
entity with major ownership by a state
government or a central government of India.
 STEPS INVOLVED IN STARTING BUSINESS IN INDIA
REGISTRATION REQUIREMENTS:
Time to
No: Procedure Cost to complete:
complete:
1 Obtain director identification number 1 day INR 100 – Required Identity
(DIN) online from the Ministry of and Residence Proof
Corporate Affairs portal (National)
2 Obtain digital signature certificate online 3 days INR 1,500
from private agency authorized by the
Ministry of Corporate Affairs (National)
3 Reserve the company name online with the 2 days INR 500
Registrar of Companies (ROC) (National)
4 Stamp the company documents at the 1 day INR 1,300 (INR 200 for MOA +
State Treasury (State) or authorized bank INR 1,000 for AOA for every
(Private) INR 500,000 of share capital or
part thereof + INR 100 for
stamp paper for declaration
Form 1)
5 Get the Certificate of Incorporation from 5 days INR 14,133 (see comments)
the Registrar of Companies, Ministry of
Corporate Affairs (National)
6 Make a seal (Private) 1 day INR 350 (cost depends on the
number of seals required and
the time period for delivery)
7* Obtain a Permanent Account Number 7 days INR 67 (INR 60 application fee
(PAN) from an authorized franchise or + 12.36% service tax + INR 5
agent appointed by the National Securities for application form, if not
 STEPS INVOLVED IN STARTING BUSINESS IN INDIA
REGISTRATION REQUIREMENTS:
Time to
No: Procedure Cost to complete:
complete:
8* Obtain a Tax Account Number (TAN) for 7 days INR 57 (INR 50 application
income taxes deducted at source from fee + 12.36% service tax)
the Assessing Office in the Mumbai
Income Tax Department

9* Register with the Office of Inspector, 2 days INR 6,500 (INR 2000 + 3
Shops, and Establishment Act times registration fee for
(State/Municipal) trade refuse charges)
10* Register for Value-Added Tax (VAT) at 12 days INR 5,100 (registration fee
the Commercial Tax Office (State) INR 5000 + stamp duty INR
100)
11* Register for Profession Tax at the 2 days No cost
Profession Tax Office (State)
12* Register with Employees’ Provident 12 days No cost
Fund Organization (National)
13* Register for medical insurance at the 9 days No cost
regional office of the Employees’ State
Insurance Corporation (National)
INTRODUCTION
 The Companies Act, 1956, is the successor to the
Indian Companies Act of 1913
 Indian Companies Act of 1913 was passed with
the objective of consolidating and amending the
law relating to the trading companies, mainly
based upon English Companies Act of 1908.
 Very lengthy piece of legislation
 A company, an artificial person, is a legal entity,
formed by a group of persons for specific business
purpose
OBJECTIVES
 A minimum standard of good behavior and business honesty in company
promotion and management

 Provision for greater & effective control and voice in the management for
shareholders

 A fair & true disclosure of the affairs of companies in their annual published
balance sheet & profit and loss accounts

 Proper standard of accounting & auditing

 Recognition of the rights of shareholders to receive reasonable information for

exercising an intelligent judgment with reference to management

 Extensive powers to the Central Government to intervene directly in the affairs

of a company in public interest.

 More restrictions on appointment, reappointment, powers and remuneration of

managerial personnel with a view to diffuse the concentration of wealth and
economic power.
OBJECTIVES
 A ceiling on the share of profits payable to managements as remuneration
for services rendered

 A check on their transactions where there was a possibility of conflict of

duty and interest

 A provision for investigation into the affairs of any company managed in

a manner oppressive to minority of the shareholders

 Due recognition of the legitimate interest of shareholders and creditors

and of the duty of managements not to prejudice to jeopardize those
interests.

 Enforcement of the performance of their duties by those engaged in the

management of public companies or of private companies which are
subsidiaries of public companies by providing sanctions in the case of
breach and subjecting the latter also to the more restrictive provisions of
law applicable to public companies.
 AMENDMENTS
 The Companies Act, 1956 has been amended from time to time
in response to the changing business environment. These
amendments include:-
 The Companies (Amendment) Act, 2000
 The Companies (Amendment) Act, 2001
 The Companies (Amendment) Act, 2002
 The Companies (Amendment) Act, 2006
 The Companies (Amendment) Act, 2013
 The Companies (Amendment) Act, 2015
 The Companies (Amendment) Act, 2017
CLASSIFICATION OF COMPANIES
 Unlimited companies – a co. not having any limit
on the liability of its members is termed as
unlimited company. Members of such co. are liable
for all its trade debts without any limit.
 Guarantee companies – the liability of members is
limited by a fixed sum beyond which they cannot
be called upon to contribute
 Limited companies –
… Private limited

… Public limited
..Private Co. – a co. which has a minimum paid up
capital of one lakh rupees and which has not less
than 2 and not more than 50 members. Prohibited
from inviting public to subscribe for any shares or
debentures
..Public company – not a private co. and has
minimum paid up capital of 5lakh rupees and
minimum of 7 members
 Government companies – central or state
government holds not less than 51% of paid up
capital
 Holding and subsidiary companies – when a
company has control over another, it is known as
a holding company, and the company so controlled
is regarded as a subsidiary company
FORMATION OF COMPANIES
 Name of the company
 Memorandum of association
… The promoters of company are required to draw up
a Memorandum of Association

… Informs its stakeholders its permitted range

… Contains fundamental conditions upon which the

company is incorporated

… States
 Name of the company

 State in which registered office is to be situated

 Main objects of the company

 Articles of association – contains rules,
regulations for the internal management of the
affairs of the company
… Contains provisions relating to matters such as
 Rights of shareholders

 Variation of these rights

 Alteration of capital

 General meetings and proceedings

 Voting rights of members

 Directors, their appointment, remuneration,

qualification etc.
 For registration of a company following
documents shall be presented to the Registrar of
the state
… Memorandum of the company

… Its articles

… The agreement, if any, which the company proposes

to enter into with nay individual for appointment
as its managing or whole – time director
BOARD OF DIRECTORS

 Supreme management body

 Limited co. not less than 3
 Any other not less than 2
AUDIT COMMITTEE
 Not consist of less than 3 directors. 2/3rd of total
number of members shall be directors
 The auditors and Director – in – charge of finance
shall attend and participate at meetings of
committee
 Recommendations - binding on the board
 If board does not accept any recommendations, it
shall record the reasons and communicate the
same to shareholders
 Investigation by central government
 Winding up of companies
… By the National Company Law Tribunal

… Voluntary
REVIVAL AND REHABILITATION
 Dealt with Board for Industrial and Financial
Reconstruction established under Sick Industrial
Companies Act, 1985
… Reporting of industrial sickness

… Inquiry

… Turnaround of viable sick company

… Rehabilitation scheme
 COMPANIES ACT (AMENDMENT),
2013
 One of the most significant legal reforms in recent times is the
enactment of the Companies Act, 2013 (2013 Act) which
overhauled the erstwhile Companies Act, 1956 (1956 Act).
 Though the 2013 Act was a step in the right direction as it
introduced significant changes in areas of disclosures, investor
protection, corporate governance, etc.,
 there were multiple instances of conflicts and overreach within
the legislation leading to difficulties in its implementation.
 In fact, since its enactment, more than 100 amendments have
been made to the 2013 Act.
 COMPANIES ACT (AMENDMENT),
2017
 Associate company - The Amendment Act widens the definition of
'significant influence' by, (a) referencing, control of 20% of the total
voting power as opposed to the total share capital; and (b)
including participation in (and not only control of) business
decisions.
 The Amendment Act defines the term 'joint venture' as a joint
arrangement whereby parties that have joint control of the
arrangement have rights to the net assets of the arrangement.
 The concept of associate company has assumed additional
significance with its inclusion in the definition of 'financial year',
allowing companies which are associates of foreign companies to
make an application to align their financial years with the
financial years of such foreign companies.
 COMPANIES ACT (AMENDMENT),
2017
 Holding Company - The Amendment Act has therefore introduced an
explanation to the definition of holding company to clarify that a
holding company includes any body corporate.
 Subsidiary - The Amendment Act has changed the criteria to control of
'voting power' instead of control of 'share capital'.
 (a) Issue at a Discount - Issue of shares at a discount to face value was
prohibited under the 2013 Act. The Amendment Act permits companies
to issue shares at a discount to its creditors under a statutory resolution
plan or debt restructuring scheme in accordance with any guidelines,
directions or regulations specified by the Reserve Bank of India (RBI).
 (b) Issue of Sweat Equity Shares - Under the 2013 Act, sweat equity
shares could not be issued within 1 year of commencement of business
of the company. The Amendment Act seeks to remove this restriction.
 COMPANIES ACT (AMENDMENT),
2017
 (c) Private Placement Process - The Amendment Act has substantially revised
the provisions on issuance of shares through a private placement process with a
view to make the provisions reader friendly.
 (a) Public Offer - he 2013 Act listed matters that needed to be stated in the
prospectus while making a public offer, resulting in an overlap between the
2013 Act and the requisite SEBI regulations. The Amendment Act seeks to omit
the provisions that require specific matters to be stated in the prospectus and
proposes that the company should provide such information as required by the
SEBI in consultation with the Central Government.
 (b) Liability for Misstatement in the Prospectus – directors not liable if
misstatement given by an expert
 (c) Relaxation in Filing of Returns - Every listed company was required to file a
return with the RoC with respect to change in the number of shares held by
promoters and top 10 shareholders of such company, within 15 days of such
change. The Amendment Act has done away with this requirement with a view
to simplify compliance.
 COMPANIES ACT (AMENDMENT),
2017
 (a) Key Managerial Personnel–The Amendment Act expands the definition of
KMP by giving the board of directors the power to designate an officer of the
company, who directly reports to a director in whole time employment of the
company, as a KMP.
 (i) Resident Director - i.e., a director who has stayed in India for a total period of
not less than 182 days during the previous calendar year. The Amendment Act
seeks to modify the residency requirement, by making it applicable to the
current financial year instead of the previous calendar year.
 (i) Independent Director - The Amendment Act permits an independent director
to have limited pecuniary relationships with the company without
compromising his independence, such as receiving remuneration as an
independent director and having transactions with the company not exceeding
10% of his total income.
 (ii) Number of Directorships (earlier 20), (excludes directorship in dormant
companies to arrive at number of 20)

 (iii) Alternate Director (in case of absence of director for 3 months, now not
allowed)
 COMPANIES ACT (AMENDMENT),
2017
 (iv) Disqualifications for Appointment of a Director - The Amendment Act
provides that a newly appointed director of a company in default should not
incur such disqualification for a period of six months from his appointment,
which gives him an opportunity to rectify the defect and avoid this
disqualification within such period.

 (vi) Resignation of Director - the 2013 Act, also required the resigning director
to forward a copy of his resignation, along with reasons, to the RoC within 30
days of the resignation. The Amendment Act makes such filing optional for the
resigning director.
 (c) Forward dealing by Whole-time Director and KMP T he Amendment Act has
deleted this restriction.
INDUSTRIAL DEVELOPMENT &
REGULATION ACT - 1951
 In order to provide the Central Government with
the means to implement its industrial policies,
several legislations have been enacted.
 The main objectives of the Act are:
… To empower the Government to take necessary steps
for the development of industries;
… To regulate the pattern and direction of industrial
development
… To control the activities, performance and results of
industrial undertakings in the public interest.
THE INDIAN CONTRACT ACT, 1872
 The bulk of the transactions in trade, commerce and
industry are based on contracts. The Indian Contract
Act,1872 is the governing legislation for contracts.
… It lays down the general principles relating to
… The formation and enforceability of contracts
… Rules governing the provisions of an agreement and offer
… The various types of contracts including those of indemnity
and guarantee, bailment and pledge and agency.

 It also contains provisions pertaining to breach of a

contract.
 INDUSTRIAL DISPUTES ACT - 1947
 It is the main legislation for investigation and
settlement of all industrial disputes.
 The Act enumerates
… The contingencies
 When a strike or lock-out can be lawfully resorted to
 When they can be declared illegal or unlawful

… Conditions for laying off, retrenching, discharging or

dismissing a workman
… Circumstances under which an industrial unit can be
closed down
… Several other matters related to industrial employees
and employers.
INDIAN TRADE UNION ACT – 1926
 The Act deals with the registration of trade
unions, their rights, their liabilities and
responsibilities as well as ensures that their funds
are utilized properly.
 It gives legal and corporate status to the
registered trade unions.
 It also seeks to protect them from civil or criminal
prosecution so that they could carry on their
legitimate activities for the benefit of the working
class.
 PRESENTATION

ON

FEMA, 1999
Thursday, November 7,
Business Environment 41
2019
 FOREIGN EXCHANGE

Foreign exchange is the system or process of

converting one national currency into another and of
transferring money from one country to another.

Thursday, November 7,
Business Environment 42
2019
AN INTRODUCTION TO FERA

 The FERA deals with laws which relate to foreign exchange in

India.
 The laws were made to manage foreign investments in India.
The FERA has is origin at the time of Indian independence.
 In the beginning ,it was a temporary arrangement to control the
flow of foreign exchange.In1957 that was made permanent.

Thursday, November 7,
Business Environment 43
2019
  In 1973, FERA was amended.

 FERA consists of 81 complex sections.

 Under FERA any offence was criminal one which

included imprisonment as per code of criminal
procedure,1973.

Thursday, November 7,
Business Environment 44
2019
 OBJECTIVES
 Prevent the outflow of Indian currency.
 To regulate dealings in foreign exchange and
securities.
 To regulate the transaction indirectly affecting
foreign exchange.
 To regulate import and export of currency.
 To regulate employment of foreign nationals.
 To regulate acquisition, holding etc of immovable
property in India by non-residents.

Thursday, November 7,
Business Environment 45
2019
 PROVISIONS
 Regulation of dealing in foreign exchange .
 Restrictions on payments.
 Restrictions regarding assets held by non-
residents and import & export of certain currency.
 Duty on person entitled to receive foreign
exchange and payment for exported goods.
 Restriction on establishment of place of business
in India.
 Restriction on immovable property.

Thursday, November 7,
Business Environment 46
2019
OBJECTIVES AND MAIN
PROVISIONS
MAIN PROVISIONS
 FERA empowered RBI to regulate or exercise
direct control over activities of foreign companies
in India.
 Trading, commercial and industrial activities in
India of persons resident abroad and foreign
companies were regulated by FERA
 No person shall, except with the permission of
RBI, receive in India or send out of India any
gold, jewellery, Indian currency or foreign
currency.
 FROM FERA TO FEMA
 With the advent of liberalization and
privatization, approach of government towards
foreign capital was not restrictive in nature.
 The word “management” was used in place of
“regulation”
 FEMA replaced FERA in 1999.

Thursday, November 7,
Business Environment 48
2019
INTRODUCTION
 Union Budget 1997 – 98 replaced Foreign
Exchange Regulation Act (FERA) by Foreign
Exchange Management Act (FEMA).
Foreign Exchange Regulation Act, 1973
 Main objective - to prevent the outflow of Indian
currency and to maintain proper checks on the
inflow on foreign exchange due to India.
 FOREIGN EXCHANGE MANAGEMENT ACT,
1999
 FEMA was enacted in 1999 and was enforced on 1st
January 2000.
 It is applicable to whole of India.
 Reasons contributing to enactment of FEMA.

… Liberal EXIM Policy

… Increased inflow of foreign investment
… Foreign exchange reserves had
increased
… Commitment of government to WTO
… Penalty provisions of FERA were very
strict

Thursday, November 7,
Business Environment 50
2019
 OBJECTIVES OF FEMA
 To facilitate the external trade and payment.
 To promote an orderly maintenance of the foreign exchange
market in India.
 Regulation of foreign capital in India.
 To regulate foreign firms, employment, business and
investment of non-residents.

 To regulate payments to be made in

international market
 To regulate import and export of currency
 To conserve foreign exchange resources of the
country so that the same could be utilized for
economic development of the nation

Thursday, November 7,
Business Environment 51
2019
 SALIENT FEATURES OF THE ACT
 Dealing in foreign exchange.
 Full freedom to person resident in India to hold or
transfer any foreign securities or immovable
property situated outside India.
 A person resident outside India is also permitted
to hold shares, securities and property acquired
by him while he was resident in India.

Thursday, November 7,
Business Environment 52
2019
 MAJOR PROVISIONS OF FEMA
 Dealing in foreign exchange, etc.

 Holding of foreign exchange, etc.

 Current account transactions

 Capital account transactions

 Export of goods and services

 Realization and repatriation of foreign exchange

 Exemption from realization and repatriation in certain cases.

 Provisions relating to authorised persons. i.e. authorised by RBI to deal with foreign
exchange or in foreign securities

 Power of RBI to inspect authorized person

 Contravention and penalties

 Adjudication and appeal

 Directorate of enforcement

 Miscellaneous provisions

Thursday, November 7,
Business Environment 53
2019
 SIMILARITIES BETWEEN FERA AND FEMA

 The RBI and central government would continue

to be the regulatory bodies.
 The Directorate of Enforcement continues to be
the agency for enforcement of the provisions of the
law such as conducting search and seizure.

Thursday, November 7,
Business Environment 54
2019
 DIFFERENCE BETWEEN FEMA AND FERA
Points of Comparison FEMA-1999 FERA1973

1. Content There are 49 sections out of which There were 81 sections out of which 32
12 section relate to operational part sections related to operational part and
and rest with penal provisions. rest deals with penalty, appeals etc

2. Nature Basically it is a civil law. It was considered as a criminal law.

3. Applicability The Act applies to all branches, The Act applied to all citizens of India
offices and branches outside India and to branches and agencies outsides
owned or controlled by a person India and to branches and agencies
resident in India outside India.

4. New Terms Capital account transactions, current These terms were not defined.
account transactions, persons,
services like new terms are
introduced.

Thursday, November 7,
Business Environment 55
2019
 Points of Comparison FEMA-1999 FERA 1973

5. Penalty Limited to three times Five times at the sum

the sum involved if it is involved+
quantifiable imprisonment in most
of the cases.
6. Object The object is to The object was to
encourage external control, regulate and
trade. prohibits foreign
exchange transactions.

7. Legal Help The complainant has a There was no provision

full right to take legal for legal assistance.
help from a lawyer or a
chartered accountant.

8. Definition of It has been extended to It was limited in case of

‘authorised person’ include banks, money FERA
changes etc

Thursday, November 7,
Business Environment 56
2019
FEATURES
1. Dealings in Foreign Exchange: no person shall

… Deal in or transfer foreign exchange to any person

who is not being an authorized person.
… Make any payment to or for the credit of any
person resident outside India in any manner
… Receive any payment by order or on behalf of any
person resident outside India in any manner.
… Enter into any financial transaction in India as
consideration for acquisition of any asset outside
India by any person
2. Holding of Foreign Exchange – no person resident in India
shall acquire, hold or transfer any foreign exchange or
immovable property situated outside India
3. Current Account Transactions - permitted but may be
restricted by govt. only in public interest.
4. Capital Account Transactions

A. Any person may draw or sell foreign exchange to &

from an authorized person for a capital account
transaction
B. RBI may regulate, prohibit, restrict the transfers or
borrowing & lending
c. An Indian National may transfer or invest
in foreign currency if such currency or
property was acquired by him when he
was resident outside India or inherited
from a person who was resident outside
India
D. A person resident outside India may
transfer or invest in Indian currency if
such currency or property was acquired
by him when he was resident in India or
inherited from a person who was resident
in India
5. Export to Goods and Services-
 Every exporter of goods shall furnish to RBI or
any other such authority a declaration containing
true & correct material particulars and also in
relation to payment for such services.
AUTHORISED PERSON UNDER FEMA

 The RBI may authorize any person to deal in

foreign exchange as an authorized dealer.
 An authorization may be revoked by RBI at any
time if RBI is satisfied that

… It is in public interest
… The authorized person has failed
to comply with the conditions
subject to which the
authorization was granted
 SOME EXCEPTIONS
 Regulation for Current Account Transaction:
 prohibited transactions like remittance of lottery
winnings, remittance of interest income on funds
held in Non-Resident Special Rupee (NRSR)
account scheme, etc.
 Reserve Bank approval is required for importers
availing of Supplier’s Credit beyond 180 days and
Buyer’s Credit irrespective of the period of credit.
 Authorised dealers are permitted remittance of
surplus freight/passage collections by
shipping/airline companies or their agents,
multimodal transport operators, etc. after
verification of documentary evidence in support of
the remittance.

Thursday, November 7,
Business Environment 62
2019
 SOME EXCEPTIONS
 Regulations Relating to Capital Account Transactions:
 Foreign nationals are not allowed to invest in any
company or partnership firm or proprietary concern, which
is engaged in the business of Chit Fund or in Agri
 cultural or Plantation activates or in Real Estate business
or construction of farm houses etc.
 Detailed rules and regulations are provided on borrowing
and lending in Foreign Currency as well as India Rupee by
a person resident in India form/to a person resident
outside India either on non-repatriation or repatriation
basis.
 Authorised dealers are now permitted to grant rupee loans
to NRIs against security of shares or immovable property
in India, subject to certain terms and conditions.

Thursday, November 7,
Business Environment 63
2019
EXIM POLICY
INTRODUCTION
 Foreign exchange required for importing essential
new materials, machinery etc. and bills of imports
of developing country should be paid through its
exports.
 Strategy of import substitution (replacing
imported commodities by domestic production) and
export promotion
 The foreign trade of India is guided by the Export-
Import policy of the Government of India.
Regulated by The Foreign Trade Development and
Regulation Act 1992.
 Exim policy contain various policy decisions with
respect to import and exports from the country.
EXIM POLICY
 The Govt. of India, Ministry of Commerce and
Industry announces Export Import Policy every
five years.
 The Export Import Policy (EXIM Policy) is
updated every year on the 31st of March and the
modifications, improvements and new schemes
are effective w. e. f. 1st April of every year.
EXIM POLICY
 Exim Policy or Foreign Trade Policy is a set of guidelines and
instructions established by the DGFT in matters related to the
import and export of goods in India.
 The Foreign Trade
Policy of India is guided by the Export Import in known as in
short EXIM Policy of the Indian Government and is regulated
by the Foreign Trade Development and Regulation Act, 1992.

 DGFT is the main governing body in matters related to Exim

Policy. The main objective of the Foreign Trade (Development
and Regulation) Act is to provide the development
and regulation of foreign trade by facilitating imports into,
and augmenting exports from India. Foreign Trade Act has
replaced the earlier law known as the imports and Exports
(Control) Act 1947.
EXIM POLICY
 Indian EXIM Policy contains various policy related
decisions taken by the government in the sphere of
Foreign Trade,
 I.E., with respect to imports and exports from the
country and more especially export promotion
measures, policies and procedures related thereto.
 Trade Policy is prepared and announced by the
Central Government (Ministry of Commerce).
 India's Export Import Policy also know as Foreign
Trade Policy, in general, aims at developing export
potential, improving export performance,
encouraging foreign trade and creating favorable
balance of payments position.
OBJECTIVES OF EXIM POLICY
 To facilitate sustained growth in exports from India and import
in India.
 To accelerate the economy from low level of economic activities to
high level of economic activities by making it a globally oriented
vibrant economy and to derive maximum benefits from
expanding global market opportunities.
 To stimulate sustained economic growth by providing access to
essential raw materials, intermediates, components,'
consumables and capital goods required for augmenting
production.
 To enhance the techno local strength and efficiency of Indian
agriculture, industry and services, thereby, improving their
competitiveness.
 To generate new employment.
 Opportunities and encourage the attainment of internationally
accepted standards of quality.
 To provide quality consumer products at reasonable prices.
IMPORTANT PROVISIONS OF EXIM 2015-
2020
 I. Merchandise Exports from India Scheme
 Merchandise Exports from India Scheme has
replaced 5 different schemes of earlier FTP (Focus
Product Scheme, Market Linked Focus Product
Scheme, Focus Market Scheme, Agri. Infrastructure
Incentive Scrip, Vishesh Krishi and Gram Udyog
Yojana) for rewarding merchandise exports which
had varying conditions (sector specific or actual user
only) attached to their use.

 Now all these schemes have been merged into a

single scheme, namely Merchandise Export from
India Scheme (MEIS) and there would be no
conditionality attached to the scrips issued under the
scheme. Notified goods exported to notified markets
would be rewarded on realised FOB value of exports.
IMPORTANT PROVISIONS OF EXIM 2015-
2020
 Served from India Scheme (SFIS) has been replaced with Service
Exports from India Scheme (SEIS). SEIS shall apply to `Service
Providers’ located in India’ instead of `Indian Service Providers’. Thus
SEIS provides for rewards to all Service providers of notified services,
who are providing services from India, regardless of the constitution or
profile of the service provider

 The rate of reward under SEIS would be based on net foreign exchange
earned. The reward issued as duty credit scrip, would no longer be with
actual user condition and will no longer be restricted to usage for
specified types of goods but be freely transferable and usable for all types
of goods and service tax debits on procurement of services/goods. Debits
would be eligible for CENVAT credit or drawback.

 The present rates of reward are 3% and 5%. The list of services and the
rates of rewards would be reviewed after 30.9.2015.

 Benefits available to MEIS and SEIS available to units in SEZs also.

IMPORTANT PROVISIONS OF EXIM 2015-
2020
 Duty credit scrips to be freely transferable and usable for
payment of custom duty, excise duty and service tax.
 All scrips issued under MEIS and SEIS and the goods
imported against these scrips would be fully transferable.

 Scrips issued under Exports from India Schemes can be

used for the following:-
 (i) Payment of customs duty for import of inputs / goods
including capital goods, except items listed in Appendix 3A.
(ii) Payment of excise duty on domestic procurement of
inputs or goods, including capital goods as per DoR
notification.
(iii) Payment of service tax on procurement of services as
per DoR notification.
 Basic Customs Duty paid in cash or through debit under
Duty Credit Scrip can be taken back as Duty Drawback as
per DoR Rules, if inputs so imported are used for exports.
 IMPORTANT PROVISIONS OF EXIM
2015-2020
 Status Holders - Business leaders who have excelled in international trade and
have successfully contributed to country’s foreign trade are proposed to be
recognized as Status Holders and given special treatment and privileges to
facilitate their trade transactions, in order to reduce their transaction costs and
time.

 The nomenclature of Export House, Star Export House, Trading House, Star
Trading House, Premier Trading House certificate has been changed to One, Two,
Three, Four, Five Star Export House.

 The criteria for export performance for recognition of status holder have been
changed from Rupees to US dollar earnings. The new criteria is as under:-
Status Category Export Performance - FOB / FOR (as converted) Value (in
US $ million) during current and previous two years
One star 3
Two Star 25
Three Star 100
Four Star 500
Five Star 2000
IMPORTANT PROVISIONS OF EXIM 2015-
2020
 Approved Exporter Scheme - Self certification by
Status Holders
 Manufacturers who are also Status Holders will be
enabled to self-certify their manufactured goods as
originating from India with a view to qualify for
preferential treatment under different Preferential
Trading Agreements [PTAs], Free Trade
Agreements [FTAs], Comprehensive Economic
Cooperation Agreements [CECAs] and
Comprehensive Economic Partnerships
Agreements [CEPAs] which are in operation. They
shall be permitted to self-certify the goods as
manufactured as per their Industrial
Entrepreneur Memorandum (IEM) / Industrial
Licence (IL)/ Letter of Intent (LOI)
IMPORTANT PROVISIONS OF EXIM 2015-
2020
 BOOST TO "MAKE IN INDIA"
 6. Reduced Export Obligation (EO) for domestic
procurement under EPCG scheme:
Specific Export Obligation under EPCG scheme, in case
capital goods are procured from indigenous manufacturers,
which is currently 90% of the normal export obligation (6
times at the duty saved amount) has been reduced to 75%,
in order to promote domestic capital goods manufacturing
industry.

 7. Higher level of rewards under MEIS for export items

with high domestic content and value addition.
 It is proposed to give higher level of rewards to products
with high domestic content and value addition, as compared
to products with high import content and less value
addition.
IMPORTANT PROVISIONS OF EXIM 2015-
2020
 TRADE FACILITATION & EASE OF DOING
BUSINESS
 Online filing of documents/ applications and
Paperless trade in 24x7 environment:
 Online inter-ministerial consultations
 Simplification of procedures/processes,
digitisation and e-governance
IMPORTANT PROVISIONS OF EXIM 2015-
2020
 Facilitating & Encouraging Export of dual use items
(Special Chemicals Organisms Materials Equipment
and Technology). (Validity of SCOMET export
authorisation has been extended from the present 12
months to 24 months.)
 Facilitating and Encouraging export of Defence items
 E-Commerce exports - Goods falling in the category of
handloom products, books / periodicals, leather
footwear, toys and customized fashion garments,
having FOB value up to Rs.25000 per consignment
(finalized using e-Commerce platform) shall be eligible
for benefits under FTP. Such goods can be exported in
manual mode through Foreign Post Offices at New
Delhi, Mumbai and Chennai.
IMPORTANT PROVISIONS OF EXIM 2015-
2020
 Duty Exemption
 Additional Ports allowed for Export and import -
Calicut Airport, Kerala and Arakonam ICD, Tamil
Nadu have been notified as registered ports for
import and export.
 Duty Free Tariff Preference (DFTP) Scheme - India
has already extended duty free tariff preference to 33
Least Developed Countries (LDCs) across the globe.
This is being notified under FTP.
 Quality complaints and Trade Disputes - For
resolving such disputes at a faster pace, a Committee
on Quality Complaints and Trade Disputes (CQCTD)
is being constituted in 22 offices and would have
members from EPCs/FIEOs/APEDA/EICs.
IMPORTANT PROVISIONS OF EXIM 2015-
2020
 Vishakhapatnam and Bhimavaram added as
Towns of Export Excellence - Government has
already recognized 33 towns as export excellence
towns. It has been decided to add Vishakhapatnam
and Bhimavaram in Andhra Pradesh as towns of
export excellence (Product Category– Seafood)
 108 MSME clusters have been identified for
focused interventions to boost exports. Accordingly,
‘Niryat Bandhu Scheme’ has been galvanised and
repositioned to achieve the objectives of ‘Skill
India’.
 FTP 2015-20 provides a framework for increasing
exports of goods and services as well as generation
of employment and increasing value addition in
the country, in line with the ‘Make in India’
programme.
PROHIBITED ITEMS
 items completely banned from the exports.
… All forms of wild animals including their
parts and products.
… Special Chemicals as notified.
… Exotic birds as notified.
… Beef.
… Sea Shells, as specified
… Human Skeleton.
… Peacock Tail.
RESTRICTED ITEMS

 Items allowed for exports under special license

issued by Director General of Foreign Trade
… Dress materials, ready-made garments,
fabrics or textile items with imprints of
excerpts or verses of the Holy Quran.
… Horses – Kathiawadi, Marwari, and
Manipuri breeds.
… Paddy (Rice in husk).
… Seaweeds of all types.
… Chemical Fertilizer all types.
COMPETITION ACT,
2002
 The Finance Minister in his Budget Speech on
27th February, 1999 stated
“The Monopolies and Restrictive Trade Practices Act
has become obsolete in certain areas in the light
of international economic developments relating
to competition laws. We need to shift our focus
from curbing monopolies to promoting
competition. The Government has decided to
appoint a Commission to examine this range of
issues and propose a modern competition law
suitable for conditions”.
 INDIAN COMPETITION ACT 2002
 India has chosen to enact a new competition law called
Competition Act, 2002 enacted in January 2003.
 Competition Commission of India established in October 2003
 The new law is designed to repeal the MRTP Act.
 Has one Member/Acting Chariman, Plus small complement of
staff
 As of now, only a few provisions of the new law have been brought
into force and the process of constituting the regulatory authority,
namely, the Competition Commission of India under the new Act,
is on.
 The remaining provisions of the new law will be brought into law
in phased manner, with amendments under consideration
 Provisions regarding Competition Advocacy notified
OBJECTIVES:-
 To prevent practices having appreciable adverse
effect on competition;

 to promote and sustain competition in trade and

industry;

 to protect the interest of consumers;

 to ensure freedom of trade carried on by the

participants in market in India;
SALIENT FEATURES OF NEW
COMPETITION POLICY:-
 The Industries (Development and Regulation) Act,
1951, may no longer be necessary except for
location, for environmental protection and for
monuments and national heritage protection
considerations etc
 The Industrial Dispute Act, 1947 and the
connected statutes need to be amended to provide
for an easy exit to the non- viable, ill- managed
and inefficient units subject to their legal
obligations in respect of their liabilities
 The Board of Industrial Finance and Restructuring (BIFR)
formulated under the provisions of Sick Industrial Companies
Act, 1985 should be abolished.
 The MRTP Act 1969 may be repealed and the MRTP
Commission wound up. The provisions relating to unfair trade
practices need not figure in the competition Act as they are
presently covered by the Consumer Protection Act, 1986. And
the pending cases in the MRTP Commission may be transferred
to the concerned consumer courts under the Consumer
Protection Act.
POWERS AND FUNCTIONS OF COMPETITION
COMMISSION OF INDIA

 To eliminate practices having adverse effect on

competition, promote and sustain competition,
protect interests of consumers and ensure
freedom of trade by other participants
 Inquire into certain agreements and dominant
position of enterprise– It provides that the
Commission may either suo moto or on receipt of
any information of alleged contravention of
Section 3 (prohibits anti-competitive agreements)
may inquire into the same.
POWERS AND FUNCTIONS OF COMPETITION
COMMISSION OF INDIA

 Inquiry into combinations– Section 20 of the Act entrusts the

Commission with the power to inquire into any information
relating to acquisition and determine whether such
combination or acquisition may have an appreciable adverse
effect on competition (AAEC).
 Reference of an issue by a statutory authority to the
Commission
 Reference by Commission– Section 21A of the Act provides that
if in the course of proceeding an issue is raised by any party
that any decision taken by the Commission is in contravention
of the provisions of Competition Act, whose authority is
entrusted to a statutory authority then the Commission may
make a reference in respect of the issue to the statutory
authority.
POWERS AND FUNCTIONS OF COMPETITION
COMMISSION OF INDIA

 Power to issue interim order - Section 33 of the Act empowers

the Commission to issue interim orders in cases of anti-
competitive agreements and abuse of dominant position,
thereby temporarily restraining any party from carrying on
such an act.
 Competition Advocacy– Section 49 of the Act provides for
competition advocacy and enumerates that the Central or the
State Government may while formulating any policy on
Competition or any other matter may make reference to the
Commission for its opinion on possible effect of such policy on
Competition. However, the opinion given by the Commission is
not binding on the Central Government.
COMPONENTS OF COMPETITION
ACT

 Anti- Competition Agreements

 Abuse of Dominance

 Combination Regulations (Mergers)

 Competition Advocacy
 COMPETITION ADVOCACY

THE COMPETITION COMMISSION OF INDIA

¨ IS ENABLED TO PARTICIPATE IN THE
FORMULATION OF POLICIES AND
REVIEWING OF POLICIES RELATING TO
COMPETITION AT THE INSTANCE OF THE
GOVERNMENT
¨ IS REQUIRED TO CREATE COMPETITION
CULTURE
¨ IS REQUIRED TO ACT AS COMPETITION
ADVOCATE

Copyright - Dr. S. Chakravarthy 104

CHANGES IN 2017
 The year also saw the National Company Law Appellate
Tribunal being statutorily mandated as the appellate tribunal
for appeals arising from the CCI, in place of the Competition
Appellate Tribunal.
 Merger control - continues to remain the CCI's strongest
scorecard. The CCI has laid to rest industry's concerns of
significant delays to the M&A regime. The CCI's average
review time for notifiable transactions has reduced from 34
working days in 2016 to 24 working days (approximately) in
2017, despite it having a skeletal headcount in the merger
control division as compared to its international counterparts.
CHANGES IN 2017
 The year also saw the National Company Law Appellate
Tribunal being statutorily mandated as the appellate tribunal
for appeals arising from the CCI, in place of the Competition
Appellate Tribunal.
 Merger control - continues to remain the CCI's strongest
scorecard. The CCI has laid to rest industry's concerns of
significant delays to the M&A regime. The CCI's average
review time for notifiable transactions has reduced from 34
working days in 2016 to 24 working days (approximately) in
2017, despite it having a skeletal headcount in the merger
control division as compared to its international counterparts.
 Only change required - right of hearing, before the CCI can
invalidate a merger notification
CHANGES IN 2017

 Leniency regime - Detection and busting of cartels

continues to remain the CCI's primary focus, given
the harmful effect on prices, choice and innovation.
 The CCI has been promoting its leniency
programme. In 2017, the CCI issued its first order
under the leniency regime in a case involving bid-
rigging for tenders relating to supply of fans to
Indian Railways.
 The CCI gave a 75% reduction of penalty to both
the enterprise and the individual who availed of the
leniency regime.
CHANGES IN 2017

 Contentious cases - The CCI recently

imposed a penalty on Monsanto for not
providing information regarding the role
of individuals allegedly involved in the
conduct of business at the time of the
alleged contravention.
 The CCI's penalty sends a strong signal
to industry of a "zero tolerance" approach
to non-co-operation during investigations,
even if parties have challenged the CCI's
proceedings in court.
CHANGES IN 2017

 The CCI also delivered its first

substantive order in relation to resale
price maintenance and held that Hyundai
Motor's discount control mechanism
through which it monitored maximum
discounts offered by dealers and imposed
sanctions for non-compliance with the
stipulated discounts, was a violation of
the Competition Act, 2002.
 The key takeaway message for industry
is that minimum resale price
maintenance will not be permitted, in-
line with international competition
 OVERVIEW &
SALIENT FEATURES
OF
RTI ACT 2005
OBJECTIVES OF RTI ACT
 Transparency
 Accountability
 Contain corruption.
 Democracy requires informed citizenry which in
turn is vital for its functioning.
 To hold govt. and their instrumentalities
accountable to the governed.

RTI Overview: NTIPRIT

APPLICABILITY
 Applicability excluding the state of J&K.
 To citizens only?

RTI Overview
 STRUCTURE FOR IMPLEMENTATION
OF ACT
State Central
Information Information
Commission Commission

State Central

PAs PAs Public Authority

Public Authority Transparency
Transparency
Officer Officer
Appellate
Appellate
CPIO
SPIO

CAPIO
SAPIO

RTI Overview
INFORMATION
 Any material in any form
 Records, documents, memos, e-mail
opinions,advices,press releases, circulars
orders,logbooks,contracts,reports,papers,samples,
 Models, data held in any electronic form, and
 Information relating to any private body which
can be accessed by a public authority under any
law

Section 2(f)

RTI Overview
DEFINING THE TERM “FILE”
 'Manual of Office Procedure' of the DoPT. Section
27 of Chapter II: 'Definitions', clearly states,
 'File means a collection of papers on a
specific subject matter assigned a file number
and consisting of one or more of the following
parts:
 (a) Correspondence
 (b) Notes
 (c) Appendix to Correspondence
 (d) Appendix to Notes'

RTI Overview
RECORD
 Any document, manuscript and file;
 Any microfilm, microfiche and facsimile copy of a
document;
 Any reproduction of images or images embodied
in such microfilm and
 Any other material produced by a computer or
any other device .

Section 2(I)

RTI Overview
MODE OF ACCESS
 Inspection of works ,documents,records
 Taking notes,extracts or certified copies of
documents or records;
 Taking certified samples of materials;
 Obtaining information in the form of diskettes,
floppies,tapes,video cassettes or any other
electronic mode or through printouts

Section 2(J)

RTI Overview
PUBLIC AUTHORITY
 Any authority or body or institution of self –government
established under or constituted
 (a) by or under the constitution.
 (b) by any law made by the Parliament/ state legislature
 (c) Established by notification by the appropriate govt. which
include any
 Body owned, controlled or substantially financed
 NGO substantially financed-- directly or indirectly by funds
provided by the appropriate govt.

Section 2(h)

RTI Overview
PIO
 To be designated by the public authority within
100 days of the enactment of this Act;
 As many as the case may be;
 In all administrative units;
 To provide information to persons requesting for
the information under this act
 Concept of deemed PIO

Section 5 (1) (4) (5)

RTI Overview
APIO
 To be designated within 100 days
 At sub-divisional /sub- district level
Responsibilities of APIO:
 To receive information requests and appeals,
 To forward it to the PIO or the appellate authority or to the
CIC/SIC as the case may be
 Where an application for information or appeal is given to a
APIO a period of five days shall be added in computing the
period of response.

Section 5(2)

RTI Overview
REQUEST FOR INFORMATION
 In writing or through electronic means ;in Hindi /English/in the
official language of the area, accompanied by the prescribed fee;
 PIO to help the person seeking information to convert oral
request for information into black and white.
 To give reasons for the requested information not mandatory
 Personal details only to the extent required for contacting the
requestor

Section 6

RTI Overview
REQUEST
 The public authority, if requested for information,
which is held by another public authority or the
subject matter of which is more closely connected
with the functions of another public authority,
shall transfer the application or such part of it as
may be appropriate to that other public authority
under intimation to the applicant
 The transfer of the application must happen
within five day’s of the receipt of the request

Section 6(2)

RTI Overview
DISPOSAL OF REQUEST
1. As expeditiously as possible within 30 days and 48 hours, if it is
concerned with violations of human Rights and reject if comes
under Secs. 8 or 9.
2. If not given within time – it is deemed to have been refused.(Deemed
refusal)

3. Provide details of cost and inform about the review right on cost
4. Provide assistance to the sensorily disabled persons.
5. If information sought is published /electronic format charge the fee
prescribed. (No fee for BPL card holders)
6. PIO to consult third parties before providing information.
7. Public Information Authority may reject by giving reasons, appeal
privileges and appellate authority particulars..
Section 7
8. Information shall be provided in the format sought.
RTI Overview
INFORMATION EXEMPTIONS
a. Disclosure would prejudicially affect the sovereignty and integrity of India.(e.g.
interception directions)

b. Expressly forbidden to be published by any court. ( Draft judgment cannot be given;

Inspection of land on which there was pending suit)

c. Which would cause a breach of privilege of Parliament (Five privileges – speech,

control over its affairs, publication, arrest and punish contempt eg., standing
committee materials, budget proposals)

d. Commercial confidence, trade secrets or intellectual property

e. Information available to a person in his fiduciary relationship, ( examiners, doctors,

advocates - legal opinions Visitors registers of police stations are exempted.

f. Information received in confidence from Foreign Government

g. Which would endanger the life or physical safety of any person

h. Which would impede the process of investigation

i. Cabinet papers including records of deliberations.

Section 8 (1)
j. Information of personal nature

RTI Overview
REJECTION

 Requests involving infringement of copyright subsisting in a

person other than the state may be rejected.

Section 9

RTI Overview
SEVERABILITY
 the part of information not covered by the
exemptions under section 8 may be disclosed.

Section 10

RTI Overview
THIRD PARTY CASES

1. Information supplied by third party to be treated as

confidential, PIO must cause a notice to third party
inviting his submission within 5 days. Except trade
secrets, disclosure may be made if the public interest
outweighs.
2. The third party within ten days to make representation on
disclosure.
3. PIO to decide within 40 days and make a decision.
4. Third party to whom notice is given may prefer an appeal
under Sec. 19. ( Third party to be heard Section
before imparting
11
information)

RTI Overview
 RTI ACT 2005 :- WHO IS NOT COVERED.

 Intelligence Bureau, Research & Analysis Wing, Directorate of

Revenue Intelligence, Central Economic Intelligence Bureau,
Department of Enforcement, Narcotics Control Bureau, Aviation
Research Centre, Special Frontier Force, BSF, CRPF, ITBP,
CISF, NSG, Special Service Bureau, Assam Rifles, Special
Branch (CID) Andaman & Nicobar, Crime Branch (CID) Dadra
And Nagar Havelli, Special Branch Lakshaweep Police…….list is
expanding

 However no exemption –in matters relating to human rights

violations and corruption, Information can be given only if
concerned IC approves-Time limit 45 days

RTI Overview
FEES
 Application Fee Rs 10/- (for Central PAs)

 Material cost to be paid by applicant (photocopy, CD, sample etc.)

… Rs 2 per A4/A3 page

… inspection of documents- no fee for first hour, Rs. 5 for every

subsequent hour or fraction thereof

… Rs 50 for CD

 No application Fee/cost of information for BPL applicants

 No cost of information if supplied after 30 days period

 States have their own rates

RTI Overview
 INFORMATION SUPPLY TIME LIMITS
1. Information to be provided in 30 days from the date of application

2. 48 hours for information concerning the life and liberty of a person

3. 5 days shall be added to the above response time, in case the

application for information is given to Assistant Public Information
Officer.

4. If the interests of a third party are involved then time limit will be 40
days (maximum period + time given to the party to make
representation).

– Failure to provide information within the specified period is a deemed refusal.

RTI Overview
RTI ACT 2005 ---- APPEAL
Appeal :
 Who can appeal?
… Any person who does not receive a decision within the time
specified

… Who is aggrieved by the decision of the PIO

 First appeal with appellate authority in Public Authority

… Apply within 30 days of PIOs order

… Decision on appeals within 30-45 days

 Second appeal to CIC or SIC

… within ninety days of order of appellate authority or from the date
on which order was due section19

RTI Overview
 PENALTY & COMPENSATION
 CIC/SIC can impose penalty of Rs 250/- per day on PIOs found guilty for:

i. not accepting an application;

ii. delaying information release without reasonable cause;

iii. Malafidely denying information;

iv. knowingly giving incomplete, incorrect, misleading information;

v. destroying information that has been requested and

vi. obstructing furnishing of information in any manner.

 CIC/SIC can recommend disciplinary action against errant PIO

Section 20
 Compensation to applicant

RTI Overview
 OTHER SECTIONS
Sec. 12. Constitution of CIC:
( No. of Ics, selection committee, CIC powers of general superintendence,
qualification of CIC &Cis, not to hold office of profit & HQ Delhi.)

Sec. 13. Term of office and conditions of service.

( 5yrs., including aggregate, oath and resignation)
Sec. 14. Removal of C.I. Commissioner.
Sec. 15. Constitution of SIC.
Sec. 16. Term of office and conditions of service.
Sec. 17. Removal of S.I. Commissioner.

138
OTHER SECTIONS
Sec. 18. Powers and function of Information Commissions – appeals and penalties.
Functions : 1. Receive and inquire in to complaints of:
a. who has not been able to file because PIO is not appointed ,
b. on refusals;
c. not responded;
d. unreasonable fee;
e. incomplete or misleading information etc,.
f. Any other matter

2. Initiate inquiry if reasonable grounds exist.

3. It enjoys the same powers as that of civil courts such as;

Enforce attendance; inspection of documents; receiving evidence in affidavit; Requesting any public record;
issuing summons etc,.

4. Examine any records and such records shall not be withheld.

139
OTHER SECTIONS
Sec. 19. Appeals – First and Second appeal.
Sec. 20. Penalties – fine upon hearing him and disciplinary actions under service rules
Sec. 21. Protection of action taken in good faith
Sec. 22. Overriding effect of the Act.
Sec. 23. Bar on Judn. of courts.
Sec. 24. Act not to apply for certain organizations.(18 Organisations)
Sec. 25. Monitoring and Reporting.
Sec. 26. Govt. to prepare programmes.
Sec. 27. Power to make rules by App. Govt.
Sec. 28. Power to make rules by Competent Authorities.
Sec. 29. Laying of rules before Parliament.

140