SSrana Newsletter 2021 Issues 12

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MEGHALAYA REGULATES ONLINE GAMING.

By Rupin Chopra

‘THIRD FROM THE SEVEN SISTERS ADOPTS LICENSE-REGIME FOR GAMING’

In a pursuit to embrace the gaming industry at its core just like its sister States Nagaland and Sikkim, the Government of Meghalaya has decided to adopt a license based regime for regulation of gaming and gambling in the territory of the state. The Honourable Government of Meghalaya has published the Meghalaya Regulation of Gaming Act, 2021 (Meghalaya Act No. 9 of 2021) (hereinafter referred to as the “Act”) on March 26, 2021.[1] Amidst the ambiguity on the Central legislation governing online gaming in India, promulgation of the said Act has rather served as a stroke of luck for all the stakeholders in the gaming sector and people seeking leisure indulgences.

The Act aims at regulating both ‘games of skill’ and ‘games of chance’ involving betting or wagering of money or money’s worth however precluding the following:

• Game of Arrow Shooting called Teer being regulated through Meghalaya Regulation of the Game of Arrow Shooting and the Sale of Teer Tickets Act, 2018 and;
• Lotteries regulated under the Meghalaya Lottery (Regulation) Rules, 2019;
• The Act has further withdrawn the applicability of Meghalaya Prevention of Gambling Act, 1970 to the Games of Skill or Games of Chance licensed under the said Act.

It is imperative to shed some light on this welcome move of the Meghalaya Government in the wake of the booming gaming industry in India:

1. Application to obtain the Gaming License: The License under this Act shall be issued only to an Indian citizen or legal entity incorporated in India. An applicant for the License has to file an application to the State Government to obtain the License in such form and manner as prescribed by the Government along with the prescribed License fees. The Licensing Authority shall accept or reject such Application on its Discretion. The License once granted, shall remain in force for five years from the date of grant of the said License after that renewal has to be applied for.
2. Gaming Royalty: The Licensee shall also pay to the Licensing Authority “Gaming Royalty” from time to time at regular intervals. Gaming Royalty refers to a percentage sum of money of Gross Gaming Revenue which is a sum of total amount of all bets made and the revenue generated from advertising, marketing and promotion under this Act minus the value of all winnings and prizes, bonuses and discounts and cash backs, as well as the payment gateway and banking charges in the course of the gaming period.

• Establishment of Meghalaya Gaming Commission: Meghalaya State Commission shall be monitoring the gaming activities of all the Licensees and ensuring compliances under this Act. The Commission shall also be responsible to issue policy directions for regulating games of skill and games of chance to be played in fair and transparent manner which after approval of the State Government shall be binding on all the Licensees.

1. Determining “Games of Skill” and “Games of Chance”: Under this Act, Games of Skill are defined as all such games where preponderance of skill over chance, including where the skill related to strategizing the manner of placing wagers or placing bets or where the skill lies in team selection or selection of virtual stocks based on analyses or where the skill relates to the manner in which the moves are made, whether through deployment of physical or mental skill and acumen, where the success in game depends on the existence of superior knowledge, training attention, experience and adroitness of a player for example; Bingo, Black Jack, Bridge, Poker, Poker Dice, Rummy, Solitaire, Teen Patti, virtual sports fantasy league games etc. whereas Games of Chance mean all such games where there if preponderance of chance over skill for example; Baccarat, Craps, Keno, Roulette, Slots etc. These games shall be conducted through non-restricted geo-fenced internet or at a physical premises.
2. Offences and Penalties to be paid for breach:

specific-relief

S. No.	Offences	Penalties
1	Contravention of provisions of this Act	Not exceeding INR 2 Lakh
2	Breach of the License by Player while playing any Games of skill or chance at the approved website or physical premises.	Not exceeding INR 10, 000 for first three violations and thereafter shall be prohibited in gaming under this Act.
3	License obtained by furnishing incorrect information.	Not exceeding INR 2 Lakh
4	Deliberate mis-declaration to the Licensing Authority.	Not exceeding INR 2 Lakh
5	Failure to submit statement of accounts to the Government required by this Act or submission of incorrect statements.	Not exceeding INR 2 Lakh
6	Issuance of misleading advertisement.	Not exceeding INR 1 Lakh
7	Operation of gaming without the License	Not exceeding INR 10 Lakh with imprisonment which may extend for a period of up to two years.

Conclusion

The progressive approach adopted by the State Government of Meghalaya has proved out to be a significant step towards liberalizing gaming operations in India amidst the blanket ban in some States like Andhra Pradesh, Telangana and Tamil Nadu. In addition to the sustaining of revenue generation to the Meghalaya State Government, this newly formed license-based regime of physical and online gaming will also generate employment and cater recreational needs of people at large.

[1] Available at http://meglaw.gov.in/Notification/LL_(B)_46_2020_70_Dated_Shillong_the_26th_March_2021.pdf

Related Posts

Online Gaming – a Profitable Venture in India

All you need to know about Online gaming business in India

India: Raising the Stakes for Online Gaming

India: How to obtain gaming license in India?

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MENTAL ILLNESS TO BE COVERED UNDER INSURANCE POLICIES!  .

By Nihit Nagpal and Manmeet Singh Marwah

Mental health, as a concept, is often overlooked in India, if not outright denigrated. In todays’ fast paced uber competitive world, mental health is as important as physical health and should not be a taboo – it deserves to be on the same pedestal as that of physical well-being, if not higher. This is been brought to light more than ever before since the onset of the COVID-19 pandemic.

The United Nations Convention on Rights of People with Disabilities (hereinafter referred to as the ‘United Nations Convention’) prohibited any form of discrimination in respect of mental illnesses or any other disabilities. Since the 1800s, there have been various statutes in India which encompass mental health and as recently as 2016, The Mental Healthcare Bill was promulgated in order to bring the domestic law in line with the applicable United Nations Convention. This finally led to the enactment of Mental Healthcare Act, 2017 and the same has been in effect since May 29, 2018. Also, The Insurance Regulatory and Development Authority of India (hereinafter referred to as “IRDAI”) vide its circular dated August 16, 2018, also stated that insurance is liable to be provided for mental illnesses upon the enactment of the Mental Healthcare Act, 2017.

The IRDAI regulates the personal insurance sector. It plays a pivotal role in safeguarding the interests of the policy holders while having a supervisory jurisdiction to keep a check on all the insurance policies being issued by the numerous insurance companies so that that the policy holders are not disadvantaged in any manner. The Section 14[1] of the IRDAI Act, 1999, protects the interest of the policy holders in respect of all kinds of policies, including settlement of insurance claims. Further, the IRDAI has a duty to `control’ and `regulate’ the terms and conditions of insurance policies. Therefore, it is the duty of  IRDAI to ensure that laws are fully given effect by the insurance companies which are enacted for the benefit of policy holders.

CASE FILED BEFORE DELHI HIGH COURT REGARDING INSURANCE AND MENTAL ILLNESS

The High Court of Delhi in its recent judgment of Shikha Nischal Vs National Insurance Company Limited & Anr (W.P.(C) 3190/2021) dated April 19, 2021, addressed issues relating to mental illnesses and their insurance coverage. The High Court observed that insurance companies had to make provisions for mediclaim insurance for treatment of mental illnesses on the same basis as treatment available for physical illnesses and Section 21[2] of the Mental Healthcare Act, 2017 recognizes the right to equality and prohibits discrimination qua mental illnesses.

BRIEF FACTS OF THE CASE

The Petitioner had been regularly obtaining health insurance policies from Respondent No. 1 – M/s National Insurance Company Limited (hereinafter referred to as the ‘NICL’), since 2016. The last policy was purchased by her on May 29, 2020, called ‘National Mediclaim Policy’ (hereinafter referred to as the ‘Healthcare Policy’) and the sum insured was Rs. 3,95,000/-. The said Healthcare Policy was valid for a period of one year i.e. till May 28, 2021.

In June, 2020, the Petitioner was admitted to a hospital on June 28, 2020 and was discharged on  July 28, 2020. She was diagnosed with a mental illness called Schizoaffective Disorder which is a mental health condition having a combination of symptoms of schizophrenia and mood disorder and the total expenses incurred for the hospitalization was Rs. 5,54,636/-. The Petitioner then applied for reimbursement of the said amount from NICL, as she was entitled to reimbursement in terms of Clause 1.1 of the Healthcare Policy, which provides for coverage for medical expenses incurred for hospitalization.

The NICL however, relying upon Clause 4.10 of the Healthcare Policy, rejected the claim vide letter dated September 01, 2020, on the grounds that the said mental illness was specified for exclusion from coverage under the Healthcare Policy.

BEFORE INSURANCE OMBUDSMAN

Being aggrieved by the Insurance Agency’s rejection, the Petitioner then approached the Insurance Ombudsman relying upon the provisions of Mental Healthcare Act, 2017. The Insurance Ombudsman however, rejected the claim of the Petitioner, concluding that the claim of the Petitioner would have to be settled in terms of the Clauses of the Healthcare Policy and not as per the provisions of Mental Healthcare Act, 2017 and held that Clause 4.10 of the Healthcare Policy provided for exclusion of certain conditions from the insurance cover, including Psychiatric and psychosomatic disorders/diseases.

BEFORE THE HIGH COURT

The High Court of Delhi passed a detailed order stating that Insurance policies cannot discriminate between mental illnesses and physical illnesses. The High Court observed that physical illnesses in a human body are visible in some form and the same is not always in the cases of mental illnesses however, mental illnesses can be equally or more debilitating and destructive. It is in recognition of the importance of a healthy mental state for a human being that both the Convention and the provisions of the Mental Healthcare Act, 2017 have been introduced. Further, the Covid-19 pandemic has aggravated such mental problems due to Coronavirus patients requiring isolation, healthy persons being subjected to lock-downs and not able to lead a normal life, work from home conditions with increasing working hours, loss of employment leading to lack of confidence and financial distress for long period of time. Therefore, availability of insurance coverage for mental illnesses is not only important, but is an essential need as such mental conditions need to be dealt with immediately.

The High Court further held that, the IRDAI has a duty to fully supervise and ensure that the provisions of the Mental Healthcare Act, 2017 are implemented by all the insurance companies for the benefit of the persons who obtain mediclaim policies which has not happened in the present case.

The High Court observed that the Petitioner’s claim has been paid for the covered amount, in view of IRDAI’s direction to NICL after filing of the writ petition. However, the Insurance Ombudsman’s order which holds that the provisions of the Mental Healthcare Act, 2017 are not applicable to the Petitioner is untenable as the provisions of Mental Healthcare Act, 2017 and provisions of the IRDAI Act, 1999 makes it clear that all insurance products ought to have extended the same treatment for mental and physical illnesses and remove any clause that discriminate between the same after Mental Healthcare Act, 2017 came into force. The Mental Healthcare Act, 2017 has come into effect from May 29, 2018, and thus the exclusion in the Healthcare Policy of NICL with respect to all psychiatric and psychosomatic disorders/diseases, under Clause 4.10 of the Healthcare Policy, is contrary to prevalent law and the Mental Healthcare Act, 2017 is completely relevant for a person who is suffering from a disorder such as Schizoaffective Disorder. Thus, the Petitioner was entitled for reimbursement of her claim as per the provisions of the Mental Healthcare Act, 2017.

The High Court concluded by stating that Mental illnesses ought to be covered under insurance coverages without any discrimination and directed NICL and all insurance companies to give effect to Section 21(4) of the Mental Healthcare Act, 2017 from the effective date when it has come into force i.e., May 29, 2018. The High Court further directed IRDAI to insure compliance of this order by all the insurance companies.

CONCLUSION

Mental illnesses may take many forms and it does not discriminate regardless of factors such as sex, age, wealth, race/ethnicity, sexual orientation, income, geography, religion/spirituality, social status or other aspect of cultural identity. Some of mental disorders are mild and only interfere in manageable ways with daily life. However, there are many other mental health conditions, which are so severe that the person cannot carry out any semblance of ‘normal’ life.

Various protections are extended to persons with mental illnesses under Section 21 of the Mental Healthcare Act, 2017 so as to ensure that they are treated equally with persons who have physical illnesses and Section 21(4) of the Mental Healthcare Act, 2017 makes it clear that there cannot be any discrimination in providing medical insurance coverage to the insurance holders between mental and physical illnesses or conditions.

[1] Section 14 of the IRDAI Act, 1999. Duties, Powers And Functions Of Authority.–(1) Subject to the provisions of this Act and any other law for the time being in force, the Authority shall have the duty to regulate, promote and ensure orderly growth of the insurance business and re-insurance business. (2) Without prejudice to the generality of the provisions contained in sub-section (1), the powers and functions of the Authority shall include, -(a) issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registration; (b) protection of the interests of the policy holders in matters concerning assigning of policy, nomination by policy holders, insurable interest, settlement of insurance claim, surrender value of policy and other terms and conditions of contracts of insurance; (c) specifying requisite qualifications, code of conduct and practical training for intermediary or insurance intermediaries and agents; (d) specifying the code of conduct for surveyors and loss assessors; (e) promoting efficiency in the conduct of insurance business; (f) promoting and regulating professional organisations connected with the insurance and re-insurance business; (g) levying fees and other charges for carrying out the purposes of this Act; (h) calling for information from, undertaking inspection of, conducting enquiries and investigations including audit of the insurers, intermediaries, insurance intermediaries and other organisations connected with the insurance business; (i) control and regulation of the rates, advantages, terms and conditions that may be offered by insurers in respect of general insurance business not so controlled and regulated by the Tariff Advisory Committee under section 64U of the Insurance Act, 1938 (4 of 1938); (j) specifying the form and manner in which books of account shall be maintained and statement of accounts shall be rendered by insurers and other insurance intermediaries; (k) regulating investment of funds by insurance companies; (l) regulating maintenance of margin of solvency; (m) adjudication of disputes between insurers and intermediaries or insurance intermediaries; (n) supervising the functioning of the Tariff Advisory Committee; (o) specifying the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organisations referred to in clause (f); (p) specifying the percentage of life insurance business and general insurance business to be undertaken by the insurer in the rural or social sector; and (q) exercising such other powers as may be prescribed.

[2] Section 21 of the of the Mental Healthcare Act, 2017. (1) Every person with mental illness shall be treated as equal to persons with physical illness in the provision of all healthcare which shall include the following, namely:–

(a) there shall be no discrimination on any basis including gender, sex, sexual orientation, religion, culture, caste, social or political beliefs, class or disability; (b) emergency facilities and emergency services for mental illness shall be of the same quality and availability as those provided to persons with physical illness; (c) persons with mental illness shall be entitled to the use of ambulance services in the same manner, extent and quality as provided to persons with physical illness; (d) living conditions in health establishments shall be of the same manner, extent and quality as provided to persons with physical illness; and (e) any other health services provided to persons with physical illness shall be provided in same manner, extent and quality to persons with mental illness. (2) A child under the age of three years of a woman receiving care, treatment or rehabilitation at a mental health establishment shall ordinarily not be separated from her during her stay in such establishment: Provided that where the treating Psychiatrist, based on his examination of the woman, and if appropriate, on information provided by others, is of the opinion that there is risk of harm to the child from the woman due to her mental illness or it is in the interest and safety of the child, the child shall be temporarily separated from the woman during her stay at the mental health establishment: Provided further that the woman shall continue to have access to the child under such supervision of the staff of the establishment or her family, as may be appropriate, during the period of separation. (3) The decision to separate the woman from her child shall be reviewed every fifteen days during the woman’s stay in the mental health establishment and separation shall be terminated as soon as conditions which required the separation no longer exist: Provided that any separation permitted as per the assessment of a mental health professional, if it exceeds thirty days at a stretch, shall be required to be approved by the respective Authority. (4) Every insurer shall make provision for medical insurance for treatment of mental illness on the same basis as is available for treatment of physical illness.

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India: IRDA directs insurers to cover mental illness

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Transactions related to Virtual Currencies- RBI Circular.

INTRODUCTION

The last two decades have witnessed technological advancement in India and across the world by leaps and bounds. The unprecedented growth of technology has led to its penetration in several sectors of the economy and one such burgeoning sector is Fintech. With the increasing popularity and understanding of cryptocurrency such as Bitcoin, Ripple, Dogecoin, and others among the Indian public, many have begun to spend substantial amount of their time and money in Virtual Currencies (VCs) with hope of reaping huge profits and returns in view of current global trends.

As a result of growing popularity of the crypto market in the Indian public and the associated risk of potential revenue loss, the Reserve Bank of India (RBI) has time and again issued Circulars cautioning the public against dealing in virtual currencies and also completely prohibited cryptocurrencies in India in the year 2018.[1] However, later, the Supreme Court on March 04, 2020 lifted the ban imposed by RBI on cryptocurrencies in 2018. The Apex Court’s verdict was considered a historic one, especially for India’s virtual currency industry and start-ups.[2]

WHAT ARE VIRTUAL CURRENCIES?

As per the European Banking Authority (EBA), Virtual Currencies (VC) are a digital representation of value that is neither issued by a Central Bank or a public authority, nor necessarily attached to a FC (Conventional Fiat currency), but is accepted by natural or legal persons as a means of payment and can be transferred, stored or traded electronically.[3] Virtual Currencies (VC) includes cryptocurrencies like Bitcoin, Ethereum etc. The status quo of Virtual Currencies currently is that the same is not illegal in India pursuant to Supreme Court judgement in 2020[4].

RBI’s Circular- Clarification on Transactions related to VCs

In a recent development, considering the growing dealings of VCs in India, the RBI has issued a circular[5] for providing clarification on transactions related to Virtual Currencies (VCs).

Clarifications provided in RBI circular:

• Banks and financial institutions to not caution their customers against dealing with transactions related to Virtual Currencies (VC);
• Banks to follow regular compliance of regulations governing standards.

RATIONALE BEHIND THE CIRCULAR

This Circular has been issued in light of various banks and financial institutions warning their customers to not deal with transactions related to cryptocurrencies by citing a RBI circular which had been later invalidated by the Supreme Court.[6] This is in reference to a Circular dated April 06, 2018[7] which had previously prohibited any transactions or dealings in Virtual Currencies (VC) and imposed a blanket ban on VCs in India and directed that entities regulated by the Reserve Bank shall not deal in VCs or provide services for facilitating any person or entity in dealing with or settling VCs.

The Circular dated April 06, 2018 was later set aside by the Supreme Court stating that the restrictions imposed by RBI on banks and financial institutions with respect to dealings of VCs was unfair and that the impugned Circular was no longer enforceable.[8] Hence, the Supreme Court validated dealing in VCs and lifted the ban imposed by RBI on cryptocurrencies in 2018.

However, recently few Banks had sent emails to their customers alerting about the lack of clarity issued by RBI on regulations related to dealing in VCs and a possible suspension of their bank account in case of continued transactions. Reportedly, these Banks cited the struck down RBI circular of 2018 for reference and curtailed transaction services.[9]

COMPLIANCE OF REGULATION GOVERNING STANDARDS

Additionally, the RBI addressed the importance of asking Banks to provide constant due diligence with regard to the government regulations to their customers. These standard regulations include:

•  financial institutions (KYC),
• Anti-Money Laundering (AM),
• Combating of Financing of Terrorism (CFT)
• Obligations of regulated entities under Prevention of Money Laundering Act, (PMLA), 2002.

Due diligence of customers dealing in international transactions and remittances also needs to be ensured properly by following compliance of relevant provisions of Foreign Exchange Management Act (FEMA).

CONCLUSION

In view of the current situation, it is imperative that clarity is rendered with reference to the laws and regulations governing the dealings of Virtual Currencies in India. Hence, RBI’s present Circular is a very positive development for the whole industry as it provides a sense of clarity to the banks as well as customers. However, the lack of guidelines and specific law related to dealings in VCs is creating an impediment in the growth VCs in India. Interestingly, despite the RBI’s circular and clarification, it has been reported that Banks and Financial Institutions in India are still hesitant to facilitate transactions in relation to Cryptocurrency.

[1] https://www.rbi.org.in/scripts/FS_Notification.aspx?Id=11243&fn=2&Mode=0

[2] https://ssrana.in/articles/supreme-court-lifts-rbi-ban-crypto-currency/

[3] ‘EBA Opinion On ‘Virtual Currencies’’, http://www.eba.europa.eu/documents/10180/657547/EBA-Op-2014-08+Opinion+on+Virtual+Currencies.pdf

[4] https://ssrana.in/articles/supreme-court-lifts-rbi-ban-crypto-currency/

[5] https://rbi.org.in/Scripts/NotificationUser.aspx?Id=12103&Mode=0

[6] https://www.rbi.org.in/scripts/FS_Notification.aspx?Id=11243&fn=2&Mode=0

[7] https://www.rbi.org.in/scripts/FS_Notification.aspx?Id=11243&fn=2&Mode=0

[8] Internet and Mobile Association of India v. Reserve Bank of India, Writ Petition (Civil) No.528 of 2018

[9] https://www.bloombergquint.com/crypto/hdfc-bank-sbi-card-warn-customers-of-restrictions-if-they-deal-in-cryptocurrencies

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The Cryptocurrency Saga: Tracing the Developments in India

India: SC asks Govt. to regulate Crypto Currency

 

 

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Battery Operated Vehicles: Issuance of Registration Certificate Fees may be exempted.

The Ministry of Road Transport and Highways (MoRTH) has issued a draft notification dated May 27, 2021 to further amend the Central Motor Vehicles Rules, 1989 with the object to take a step forward for the adoption of electric vehicles in India[1]. The legislative intent behind the proposed amendment is to develop a viable e-mobility ecosystem which is affordable, reliable and easy to use as conventional automobiles for the consumers in India.

Exempt Electric Vehicles or BOV’s from payment for Issuance/ Renewal of RC

As per the draft rules, a proviso has been added to Rule 81 of the Central Motor Vehicles Rules, 1989 which proposes to exempt Battery Operated Vehicles (BOV) from payment of fees for the purpose of issuance or renewal of Registration Certificate (RC) and assignment of new registration mark. The Ministry further added that this step has been taken to encourage e-mobility. The Ministry has also invited comments from the general public and stakeholders within a period of thirty days from the date of issuance of the draft notification.

Relevant extract from the Draft Rules

“Provided further that, for the Battery Operated Vehicles as defined in rule 2(u); the items given at Sl. no. 4 of the below-mentioned TABLE shall be exempted from the payment of fees for the purpose of issue or renewal of registration certificate and assignment of the new registration mark.”

The proposed amendment to the Central Vehicle Rules is a welcome move and takes India one step closer to the elimination of vehicular pollution. With such draft Rules coming into play, electric mobility will also contribute to balancing of energy demand, energy storage, and environmental stability. Thereby penetrating deep into the Indian market and further accelerating the adoption of electric vehicles by the public in India.

[1]https://morth.nic.in/sites/default/files/notifications_document/draft%20GSR%20352%28E%29%20dated%2027th%20May%202021%20registration%20fees%20exemption%20to%20battery%20operated%20vehicle.pdf

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FSSAI LICENSE NO. MANDATORY ON RECEIPTS BY RESTAURANTS- FROM OCTOBER 01, 2021.

By Lucy Rana and Rupin Chopra

INTRODUCTION:

The Food Safety and Standards Authority of India (hereinafter referred to as FSSAI) vide its notification dated June 8, 2021[1], has directed the food businesses in India to mention FSSAI license/registration number on receipts/invoices/cash memos/bills etc. from October 01, 2021.

As per the notification, there shall also be amendments to FSS (Licensing and registration of Food Businesses) Regulations for all time display of ‘food safety display boards’ at prominent places at restaurants. FSSAI aims to strengthen the regulatory structure and robust customer grievance system by digitalizing access to information related the food business and lodging complaint by inputting the 14-digit FSSAI license/registration number.

BACKGROUND:

According to FSSAI regulators, complaints are largely inconclusive due to lack of specific information such as FSSAI number mentioned. FSSAI number acts similar to a unique locator code for identifying and tracing the origin of the complaint. FFSSAI mandates compulsory registration of food establishments prior to commencement of business as well as compulsory display of FSSAI number on packaged food labels. Further, FSSAI plans to provide consumers a mechanism to know the FSSAI number of service providers vide this order.

POLICY:

1. There shall be mandatory declaration of 14-digit FSSAI license/registration number on transaction documents provided by all food businesses such as cash receipts/purchase invoices/cash memo/bills etc. excluding GST e-way bill from October 01, 2021. Food businesses shall be required to maintain minimum compliance cost as no new transaction documents are required to be issued as per the order. Mandatory declaration shall enhance disclosure and improve the food regulation infrastructure. Non-compliance of declaration shall lead to food business being declared as non-registered under FSSAI.
2. Food establishments shall display ‘food safety display boards’ as per FSS (Licensing and registration of Food Businesses) Regulations amendments. Boards shall be located at prominent places of restaurants to increase overall consumer awareness.
3. FSSAI number can be used for purposes of tracking and tracing path of pre-packaged food from manufacturer to consumer. Such mechanism shall improve the traceability and establishing a trail for food products.

ANALYSIS:

The order seeks to enable enhanced access to information and empower credible regulatory structure. Inclusion of digitally equipped mechanisms such as FSSAI online portal and ‘Food Safety Connect’ app shall improve lodging online complaints. FSSAI number on cash receipts/purchase invoices/cash memo/bills shall help in building a database for FSSAI in cases of complaints for verifying source.

CONCLUSION

FSSAI seeks to improve the grievance redressal mechanism by simplifying lodging online complaints through FSSAI number. This step shall make consumers equipped with specific information that is required for speedy disposal of grievances and further improve the overall awareness and hence enhance the parameters of food safety and standards in India.

[1]https://fssai.gov.in/upload/advisories/2021/06/60c08b4456ef1Order_License_Registration_Mandating_09_08_2021.pdf

MANDATORY HALLMARKING OF GOLD JEWELRY FROM JUNE 16, 2021.

The Ministry of Consumer Affairs, Food and Public Distribution via a press release dated June 15, 2021 has announced the phased implementation of mandatory hallmarking of Gold Jewellery from June 16, 2021.[1]

Since gold is of such intrinsic value and is considered to be a popular investment choice for majority of people, the Bureau of Indian Standards (BIS) in order to safeguard consumers from adulteration and to oblige jewelers to maintain legal purity standards has taken this noteworthy step.

WHAT IS HALLMARKING OF GOLD?

As per Bureau of Indian Standards, hallmarking is the “accurate determination and official recording of the proportionate content of precious metal in precious metal articles. Gold hallmarking is thus a purity certification of the precious metal and a mark of its fineness.

Also read BIS Hallmarking in India

KEY HIGHLIGHTS

1. The entire process will be implemented in a phased manner and initially in 256 districts of the country which have Assaying marking centers[2].
2. Hallmarking is allowed on 14-, 18- and 22- carat gold jewellery. Gold in additional carats, 20, 23 and 24 will also be allowed for hallmarking in due course.
3. Hallmark shall be done at first point of sale which includes manufacturer, whole-seller, distributor or retailer.
4. To ensure that manufacturers, whole-sellers and retailers have adequate time, they have been given time till August, 2021 to get their current gold jewellery stock assessed by the gold hallmarking center without any penalty.

WHO ALL ARE EXEMPTED FROM HALLMARKING?

1. Jewelers with an annual turnover of up to Rs. 40 lakh
2. Jewellery for international exhibitions
3. Government approved B2B domestic exhibitions
4. Trader’s engaged in export and re-import of jewellery as per the government’s trade policy.
5. Gold watches, fountain pens and special type of jewelry such as “kundan, poli and jadau.”

CONCLUSION

The mandatory hallmarking of gold scheme will help develop India as a leading global gold market center and will further protect and ensure that the public do not get cheated on and get the purity as marked on the ornaments.

[1] https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1727661

[2] Assaying and hallmarking centre” means a testing and marking centre recognised by the Bureau to determine the purity of precious metal articles and to apply hallmark on the precious metal articles in a manner as may be determined by regulations

 

Lay Power Lines underground in habitats of Great Indian Bustard- Supreme Court.

By Lucy Rana and Manmeet Singh Marwah

INTRODUCTION

Extinction of wildlife due to man-made intrusions has become a major concern the world over.  The Wildlife Institute of India (hereinafter referred to as “WII”) has published its report, namely “Power Line Mitigation, 2018[1]”, wherein it was stated that every year one lakh birds die due to collision with power lines. More specifically, extinction of the Great Indian Bustard is imminent  until and unless power line mortality is mitigated on an emergency footing. The survey, conducted by the Wildlife Institute of India in the 4200 square km area in and around the Desert National Park, Rajasthan, estimated about 3 bird mortalities/km/month for low voltage overhead power lines, and 6 bird mortalities/km/month for high voltage overhead power lines, leading to bird fatalities amounting to about 1 lakh birds/per year.

The Hon’ble Supreme Court of India observing the said issue in the case of M.K. Ranjitsinh & Ors Vs. Union of India & Ors[2] passed a notable judgement, directing the State of Gujarat and State of Rajasthan to lay all low voltage and high voltage overhead power lines underground (as opposed to above ground) on a case to case basis in the habitats of the Great Indian Bustard, and also directed installation of bird divertors, where the power lines cannot be laid underground. Further, for laying of high voltage transmission lines underground, where technical evaluation is essential, the Hon’ble Supreme Court constituted a three-member committee to assess the feasibility of the same.

FACTUAL BACKGROUND

The writ petition was filed by a well-known environmentalist M.K. Ranjitsinh in public interest seeking to protect two species of birds which are on the verge of extinction, namely the Great Indian Bustard (Ardeotis nigriceps), and the Lesser Florican (Sypheotides indicus).

The Petitioner contended that the Great Indian Bustard, being about a meter in height, with a wing span of around seven feet, is one of the heaviest flying birds in the world, but which has disappeared from 90 per cent of its natural habitat, except for parts of Rajasthan and Gujarat, and it needs to be protected on an urgent basis to be saved from extinction altogether. The Petitioner further contended that overhead power lines are the biggest threat to the survival of the Great Indian Bustard, and was thus seeking laying of all future overhead power lines underground, including select power lines in priority Great Indian Bustard habitat, and installation of diverters in potential habitats.

The Petitioner has also filed an application[3] seeking interim directions to direct the State of Rajasthan and State of Gujarat to ensure predator-proof fencing, controlled grazing in the enclosure development. The Petitioner has further prayed to direct the State of Rajasthan and State of Gujarat to not permit installation of overhead power lines and also to not permit further installation of solar infrastructure and construction of windmills in priority and potential habitats of the Great Indian Bustard as recognized by the WII.

HELD BY SUPREME COURT

The Hon’ble Supreme Court, before deciding on the main issue, observed that the State as well as the Central Government have a duty to preserve the endangered species of wildlife in India, and as such the expenses incurred for protection and betterment of such endangered species shall be provided by them either under the available schemes or by allocating the same in an appropriate manner. The Apex Court further observed that in the instant case the steps to preserve the endangered wildlife is by laying the power lines underground, and in that context, if cost is incurred, it would also be permissible to pass on a portion of such expenses to the ultimate consumer, subject to approval of the Competent Regulatory Authority.

The Apex Court thereafter directed the Respondents to take steps for laying transmission line underground wherever it is feasible. The Apex Court gave its detailed directions on the following points:

A. Cost of the process:

1. The Apex Court held that the concerned Respondents i.e. State of Rajasthan and State of Gujarat shall work out and provide for cost incurred in the said process and that the other Respondents i.e. Union of India, should provide aid in this regard. The Apex Court further stated that priority shall be to save the near extinct birds irrespective of the cost factor.
2. The Apex Court further held that other options for paying the cost of the process could be explored, like Section 135 of the Companies Act, 2013, which imposes corporate social responsibility upon companies having a specified net worth or turnover or net profit. Further, Section 166(2) of the Companies Act, 2013 ordains the Director of a Company to act in good faith, not only in the best interest of the Company and its affiliates but also in the best interest of community and for the protection of the environment. The Apex Court observed that the word “environment”, is not defined in the Companies Act however, it has to be given the meaning assigned to it under Section 2(a) of the Environment (Protection) Act, 1986 which defines the word “environment” to include the interrelationship which exists among and between water, air and land, and human beings, other living creatures, plants, micro-organisms and property.
3. The Apex Court further observed that Sections 4, 5 and 6 of the Compensatory Afforestation Fund Act,  2016  (CAF,  2016), provides for the utilization of the fund for measures to mitigate threats to wildlife which are available with the National and   State  The State of Rajasthan on November 12, 2009, had even set up a Compensatory Afforestation Fund Management and Planning Authority (CAMPA) for promotion of afforestation and betterment of wildlife habitat.

B. Safety of the bird’s eggs

1. The Apex Court, while analyzing conservation of the habitat to secure the safety of the eggs laid by the birds, marked an area for fencing and protection from invasion by predators so that the eggs laid in these areas are safe.
2. The Apex Court further stated that the power supply line (regarding which underground passage is to be made) should also avoid these areas.

C. Laying of high-voltage power lines and low-voltage power lines

1. The Apex Court held that laying of high voltage power lines underground would require technical evaluation based on facts and circumstances of each case and an omnibus conclusion cannot be reached laying down a uniform method and directions cannot be issued unmindful of the factual situation.
2. The Apex Court concluded that, the low-voltage overhead power lines existing presently in the priority and potential habitats of the Great Indian Bustard shall be converted into underground power lines and in all cases shall be laid underground in future.
3. In respect of high voltage overhead power lines in the priority and potential habitats of the Great Indian Bustard, more particularly the power lines referred in the prayer column of the interim application and indicated in the operative portion of the order, the Apex Court directed that such power lines shall be converted into underground power lines.
4. The Apex Court further stated that habitats shall be kept in perspective and steps be taken for the safety of the Great Indian Bustard in the said habitat while considering the laying of power lines underground.

D. Constitution of Committee

The Apex Court observed that the laying of high-voltage underground power line would require expertise to assess the feasibility of the same. For this specific purpose of assessing the feasibility after taking into consideration all technical details, the Apex Court deemed it proper to constitute a committee consisting of the following members:

• Rahul Rawat, Ministry of New and Renewable Energy, New Delhi.
• Sutirtha Dutta, Wildlife Institute of India, Dehradun.
• Devesh Gadhavi, The Corbett Foundation.

The Apex Court directed the Government of India to provide all assistance to the Committee.

1. The Apex Court further gave details of the power lines from Kutch and Rajasthan for installation of bird diverters and details of the power lines to be converted to underground power lines depending upon their feasibility and, if not feasible or technical evaluation required, then diverters should be installed immediately.
2. The Apex Court stated that the Respondents shall proceed with laying of power lines underground right away where there is no doubt of feasibility. However, in cases where there are issues relating to feasibility, the Apex Court directed the said matters to be referred to the committee with all relevant material and particulars. The committee shall assess the matter and arrive at a conclusion as to whether the underground power line is feasible or not and on that basis further action shall be taken.

E. Installation of Diverters and Timeline for the Process:

1. The Apex Court directed that in all cases where the overhead power lines exist as on date, in the priority and potential habitats of the Great Indian Bustard, the Respondents shall take steps forthwith to install diverters, pending consideration of the conversion of the overhead cables into underground power lines.
2. The Apex Court further directed that in all such cases where it is found feasible to convert the overhead cables into underground power lines the same shall be undertaken and completed within a period of one year, and till such time the diverters shall be hung from the existing power lines.

CONCLUSION

The Hon’ble Supreme Court, assessing the fact that the Great Indian Bustard might be declared extinct, if they keep dying at present rates due to collision with overhead power lines, has allotted one year’s timeline to the State of Rajasthan and Gujarat for completion of laying the power lines underground, and wherever the process does not seem feasible, the same shall be forwarded to the constituted committee. The Apex Court has further directed that till the power lines are made underground, that bird-diverters should be installed in order to protect the birds from colliding with the power lines. The Apex Court has also directed that all the future power lines shall be laid underground in the areas identified in the order.

This present notable judgement is a major relief for the endangered birds, even though the process of laying the power lines underground will be more expensive than the earlier process of installing overhead power line. But it is certainly a necessary step in order to achieve sustainable development.

[1] Citation: Wildlife Institute of India 2018 Power-Line Mitigation Measures

[2] Writ Petition (Civil) No. 838 of 2019

[3] I.A. No.85618/2020

Section 135 in the Companies Act, 2013. Corporate Social Responsibility.— (1) Every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any financial year shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors, out of which at least one director shall be an independent director. (2) The Board’s report under sub-section (3) of section 134 shall disclose the composition of the Corporate Social Responsibility Committee. (3) The Corporate Social Responsibility Committee shall,— (a) formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the company as specified in Schedule VII; (b) recommend the amount of expenditure to be incurred on the activities referred to in clause (a); and (c) monitor the Corporate Social Responsibility Policy of the company from time to time. (4) The Board of every company referred to in sub-section (1) shall,— (a) after taking into account the recommendations made by the Corporate Social Responsibility Committee, approve the Corporate Social Responsibility Policy for the company and disclose contents of such Policy in its report and also place it on the company’s website, if any, in such manner as may be prescribed; and (b) ensure that the activities as are included in Corporate Social Responsibility Policy of the company are undertaken by the company. (5) The Board of every company referred to in sub-section (1), shall ensure that the company spends, in every financial year, at least two per cent. of the average net profits of the company made during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy: Provided that the company shall give preference to the local area and areas around it where it operates, for spending the amount earmarked for Corporate Social Responsibility activities: Provided further that if the company fails to spend such amount, the Board shall, in its report made under clause (o) of sub-section (3) of section 134, specify the reasons for not spending the amount. Explanation.—For the purposes of this section ―average net profit‖ shall be calculated in accordance with the provisions of section 198.

Section 166 in the Companies Act, 2013. Duties of directors.— (1) Subject to the provisions of this Act, a director of a company shall act in accordance with the articles of the company. (2) A director of a company shall act in good faith in order to promote the objects of the company for the benefit of its members as a whole, and in the best interests of the company, its employees, the shareholders, the community and for the protection of environment. (3) A director of a company shall exercise his duties with due and reasonable care, skill and diligence and shall exercise independent judgment. (4) A director of a company shall not involve in a situation in which he may have a direct or indirect interest that conflicts, or possibly may conflict, with the interest of the company. (5) A director of a company shall not achieve or attempt to achieve any undue gain or advantage either to himself or to his relatives, partners, or associates and if such director is found guilty of making any undue gain, he shall be liable to pay an amount equal to that gain to the company. (6) A director of a company shall not assign his office and any assignment so made shall be void. (7) If a director of the company contravenes the provisions of this section such director shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees.

Section 2(a) in The Environment (Protection) Act, 1986. (a) environment includes water, air and land and the inter-relationship which exists among and between water, air and land, and human beings, other living creatures, plants, micro-organism and property;

Section 4 in of the Compensatory Afforestation  Fund  Act,  2016 (1) With effect from such date as each State Government may, by notification in the Official Gazette, appoint in this behalf, there shall be established for the purposes of this Act, a special Fund to be called the “State Compensatory Afforestation Fund-……… (name of State)” under public accounts of such State: Provided that in case of Union territory having no legislature, such fund shall be established under the public account of Union of India with effect from such date as the Union territory Administration may, by notification in the Official Gazette, appoint in this behalf. (2) The State Fund in each State shall be under the control of the State Government of such State and managed by the State Authority of such State, in such manner as may be prescribed. (3) There shall be credited into the State Fund of a State— (i) the unspent balance of all monies which has been transferred by ad hoc Authority to the State Compensatory Afforestation Compensatory Afforestation Funds Management and Planning Authority constituted in such State in compliance of guidelines dated the 2nd July, 2009; (ii) all monies transferable from the National Fund under clause (a) of section 5; (iii) all monies realised from user agencies by such State towards compensatory afforestation, additional compensatory afforestation, penal compensatory afforestation, net present value, catchment area treatment plan or any money for compliance of conditions stipulated by the Central Government while according approval under the provisions of the Forest (Conservation) Act, 1980; and (iv) the funds recoverable from user agencies by such State in cases where forest land diverted falls within the protected areas, that is, areas notified under sections 18, 26A or 35 of the Wild Life (Protection) Act, 1972 for undertaking activities relating to the protection of biodiversity and wildlife. (4) A State Government may also credit to the State Fund constituted by it—  (i) grants-in-aid received, if any, by the State Authority; (ii) any loan taken or any borrowings made by the State Authority; (iii) any other sums received by the State Authority by way of benefaction, gift or donations. (5) The monies received in the State Fund shall be an interest bearing fund under public accounts. (6) The balance in each State Fund shall be non-lapsable an and get interest as per the rate declared by the Central Government on year to year basis.

Section 5 in the Compensatory Afforestation  Fund  Act,  2016. Save as otherwise provided in this Act, the monies available in the National Fund shall be disbursed and utilised in the following manner, namely:—  (a) ninety per cent. of the all monies collected by a State, which has been placed under the ad hoc Authority and the interest accrued thereon, shall be transferred to the State Fund established in such state under sub-section (1) of section 4; (b) the balance ten per cent. of all monies collected by the States and Union territory Administrations, which has been placed under the ad hoc Authority and the interest accrued thereon, and all fresh accrual to the National Fund, as provided in sub-section (4) of section 3, and the interest accrued thereon, shall be utilised for meeting-— (i) the non-recurring and recurring expenditure for the management of the National Authority including the salary and allowances payable to its officers and other employees; (ii) the expenditure incurred on monitoring and evaluation of works executed by the National Authority and each State Authority; (iii) the expenditure incurred on specific schemes approved by governing body of the National Authority. Explanation.—For the purposes of this section, “scheme’’ includes any institute, society, centre of excellence in the field of forest and wildlife, pilot schemes, standardization of codes and guidelines and such other related activities for the forestry and wildlife sector

Section 6 in the Compensatory Afforestation  Fund  Act,  2016. 6. Save as otherwise provided in this Act, the monies available in a State Fund shall be disbursed and utilised in the following manner, namely:— (a) the money received for compensatory afforestation, additional compensatory afforestation, penal compensatory afforestation, catchment area treatment plan and for any other site specific scheme may be used as per site-specific schemes submitted by the State along with the approved proposals for diversion of forest land under the Forest (Conservation) Act, 1980; (b) the monies received towards net present value and penal net present value shall be used for artificial regeneration (plantation), assisted natural regeneration, forest management, forest protection, forest and wildlife related infrastructure development, wildlife protection and management, supply of wood and other forest produce saving devices and other allied activities in the manner as may be prescribed; (c) the interest accrued on funds available in a State Fund and the interest accrued on all monies collected by the State Governments, which has been placed under the ad hoc Authority and deposited in the nationalised banks, in compliance of the directions of the Supreme Court dated the 5th May, 2006, shall be used for conservation and development of forest and wildlife in the manner as may be prescribed; (d) all monies realised from the user agencies in accordance with the decision taken by the Standing Committee of the National Board for Wild Life constituted under section 5A of the Wild Life (Protection) Act, 1972 or the orders of the Supreme Court involving cases of diversion of forest land in protected areas shall form the corpus and the income therefrom shall be used exclusively for undertaking protection and conservation activities in protected areas of the State including facilitating voluntary relocation from such protected areas and in exceptional circumstance, a part of the corpus may also be used subject to prior approval of the National Authority; (e) ten per cent. of amount realised from the user agencies, which has been credited directly into the State Fund in a year shall be transferred to the National Fund to meet expenditure as provided in clause (b) of section 5; (f) the non-recurring and recurring expenditure for the management of a State Authority including the salary and allowances payable to its officers and other employees may be met from a part of the interest accrued on the amounts available in the State Fund, in the manner as may be prescribed; (g) in case of trans-boundary forestry or environmental implication of diversion of forest land for non-forest purposes in a particular State, if found expedient and necessary by the National Authority, it may, in consultation with the concerned Sate Authorities order that such sum as may be justified for reparation of the trans-boundary effects, be transferred to State Fund of such State or States; (h) State Authority shall release monies to agencies identified for execution of activities in pre-determined installments as per the annual plan of operation finalised by steering committee of such State Authority and executive committee of the National Authority.