Understanding concept of "Power of Attorney"

I. What is a Power of Attorney ?

(a) Definition :

(1) According to S. 1A of the Powers of Attorney Act, 1882 (POA Act) a power of attorney includes any instrument empowering a specified person to act for and in the name of the person executing it.

(2) Power of Attorney is also defined under S. 2(21) the Indian Stamp Act, 1899 (Indian Stamp Act) according to which Power of attorney includes any instrument (not chargeable with a fee under the law relating to the Court fees for the time being in force) empowering a specified person to act for and in the name of the person executing it.

(b) Power of Attorney as an Agency :

(1) A power of attorney is a delegation of authority in writing by which one person is empowered to do an act in the name of the other. The person who acts on behalf of another person (the principal) by his authority, express or implied, is called an agent and the relation between him and his principal is called agency.

(2) A power of attorney holder is nothing but an agent as defined in S. 182 of the Indian Contract Act, 1872 (Contract Act). The authority of an agent is his power to affect his principal position by doing acts on his behalf. Actual authority is the legal relationship between the principal and agent created by a consensual agreement to which they alone are parties.

(3) A power of attorney is a document of convenience. Where circumstances require appointing an agent formally to act for the principal in a particular transaction, or a series of transactions, or to manage the affairs of the principal generally, the necessary authority is conferred by a power of attorney.

(4) In typical commercial transactions, a power of attorney may also purport to act as security to enable the security holder to exercise the powers conferred on him, which would be difficult for the donor to perform at a subsequent time. This subsequent nature of a power of attorney is dealt with herein.  

Termination of a Power of Attorney :

(a) Generally speaking, a power of attorney can be terminated or cancelled by the principal by revoking his authority or by the power of attorney holder renouncing his authority.

(b) According to S. 201 of the Contract Act, an agency can be terminated by the principal by revoking his authority or by the agent renouncing his authority, unless such revocation is prohibited under S. 202 of the Contract Act (quoted herein-below). S. 201 of the Contract Act also states that an agency terminates, inter alia, by death of principal or agent.

(c) Now, the questions that arise are whether a power of attorney can be irrevocable in nature, and, whether an irrevocable power of attorney granted would terminate on death of a donor ? In such an event, would the security holder under a power of attorney, cease to hold such security in the event the donor dies ? III. When does a power of attorney become irrevocable ?

(a) Legal provisions :

(1) The POA Act does not state when a power of attorney is irrevocable. However, in various commercial transactions, a donor gives an irrevocable power of attorney, on contractual basis, to secure the interest of the donee of the power.

(2) Under S. 4 of the (English) Powers of Attorney Act, 1971 a power of attorney is irrevocable if it is expressed to be so and is given to secure :

(i) a proprietary interest of the donee of the power; or

(ii) the performance of an obligation owed to the donee. Then, so long as the donee has the interest or the obligation remaining undischarged, the power cannot be revoked by the donor without the consent of the donee, or by death, incapacity, insolvency, winding up or dissolution of the donor.

(3) Illustration :

In a typical Mumbai scenario, where redevelopment of property is common, A, being the owner of a piece of land over which he resides, gives B, a developer, an irrevocable power of attorney to develop such land and ultimately transfer the same in favour of a Society or Condominium or such Association of Persons. Such a power of attorney is given for a valuable consideration. In the event A dies whilst the property is in the process of being redeveloped, such an irrevocable power of attorney granted by A to B cannot be revoked or terminated and B is entitled to complete such redevelopment.

(4) Where a power of attorney is given for a valuable consideration and expressed to be irrevocable, or is given to secure a proprietary interest of the donee of the power, or the performance of an obligation owed to the donee, then, so long as the donee has that interest, or the obligation remains undischarged, the power is irrevocable.

(b) Authority coupled with interest :

(1) S. 202 of the Contract Act lays down the rule that an authority coupled with interest is irrevocable.

(2) S. 202 of the Contract Act states that "where the agent has himself an interest in the property which forms the subject matter of the agency, the agency cannot, in the absence of an express contract, be terminated to the prejudice of such interest."

(3) Illustrations :

(a) A gives authority to B to sell A land, and to pay himself out of the proceeds, the debts due to him from A. A cannot revoke this authority, nor can it be terminated by his insanity or death.

(b) A consigns 1,000 bales of cotton to B, who has made advances to him on such cotton, and desires B to sell the cotton, and to repay himself out of the price the amount of his own advances. A cannot revoke this authority, nor can it be terminated by his insanity or death.

(4) In the aforesaid illustrations, authority is given for the purpose of being a security for a debt, therefore it is irrevocable.

(5) Where the authority of an agent is given by deed, or for valuable consideration, for the purpose of effectuating any security, or of protecting or securing any interest of the agent, it is irrevocable during the subsistence of such security or interest.

(6) To make the authority irrevocable, the agent must have an interest in the property which forms the subject matter of the agency. Where the agent has himself an interest in the property which forms the subject matter of the agency, the agency cannot, in the absence of any express contract, be terminated to the prejudice of such interest.

(7) The mere fact that a power is declared in the instrument granting it to be irrevocable, does not make it irrevocable.

(8) The exceptional case dealt with here is that in which the authority or power is coupled with an interest in the thing on which power is to be exercised.

(9) Instead of the words authority coupled with an interest used in the English and American systems of law, the Section contains the words the agent has himself an interest in the subject mater of the agency. Under the English law, what is meant by an authority coupled with an interest is this that where an agreement is entered into on a sufficient consideration, whereby an authority is given for the purpose of securing some benefit to the donee of the authority, such an authority is irrevocable. [Clerk v. Laurie, 2 H & N 199].

(10) In Prahlad v. T. F. Kumari, AIR 1956 Pat 233 where, under a document drawn in the form of a power of attorney, a lady agreed that the debts raised by X for her should be realised out of the collections of a particular estate and the effect of the document though not described as one of agency was to create an agency in favour of X, it was held that the agency was one coupled with an interest and therefore irrevocable and in substance amounted to an allocation of the funds to be appropriated towards the repayment of the debts.

(11) Similarly, when an agent is employed to enter into any contract, or do any other lawful act involving personal liability, or is expressly or impliedly authorised to discharge such liability on behalf of the principal, the authority becomes irrevocable as soon as the liability is incurred by the agent [Read v. Anderson, (1884) 13 QBD 779], and where an agent is authorised to pay money on behalf of his principal to a third person, the authority becomes irrevocable as soon as the agent enters into a contract, or otherwise becomes bound to pay or hold such money to or to the use of such person [Robertson v. Fauntleroy, (1823) 8 Moore 10].

(12) So, where a principal and agent agree for valuable consideration or under a seal that the agent is to have authority, for example, to collect rents in order to secure a loan [Spooner v. Sandilands, (1848) I Y & C. Ch. 390], or to sell certain land and to discharge a debt owed to him by the principal out of the purchase money [Gaussen v. Morton, (1830) IO B & C 731], the principal thereby confers an interest on the agent, and the agency cannot be revoked unilaterally.

(13) As decided in Pestanji Mancharji Wadia v. Matchett, (1870) 7 BHC AC 10, where an agent is authorised to recover a sum of money due from a third party to the principal, and to pay himself out of the amount so recovered the debts due to him from the principal, the agent has an interest in the subject matter of the agency, and the authority cannot be revoked.

(14) Illustration : A owes B a certain sum of money. A authorises B to recover from C, the rent which C owes A, and to pay himself (B) out of the rent recovered, the debts due to him from A. Such an authority cannot be revoked by A, because such authority confers an interest on B.

(15) So also a vendor promoter of a company, who is to be paid a commission out of the money raised by the issue of shares, has a clear and direct interest in raising the capital. An underwriter who promises to buy a certain number of shares from the promoter and authorises him to make the necessary application, cannot revoke the authority, this being an authority coupled with interest. [Carmichael case (1896) 2 Ch. 643]

(16) "If a borrower, in consideration of a loan, authorises the lender to receive the rents of Blackacres by way of security, the authority remains irrevocable until repayment of the loan in full has been effected. This doctrine applies only where the authority is created in order to protect the interest of the agent; it does not extend to a case where the authority is given for some other reason and the interest of the agent arises later." [Cheshire on the Law of Contracts, 6th Ed.]

(17) Illustration :

A (lender) has given B (borrower) a certain loan. As a security for repayment of the loan, B authorises A to receive all the rent which B is entitled to — arising out of a certain property owned by B — until such loan is repayed by B to A. Such an authority created to protect the interest of A, is irrevocable.

(18) Further, the principle applies only to cases where authority is given for the purpose of being a security or a part of the security, and not to cases where the interest of the donee arises afterwards and incidentally. In such cases there is no authority coupled with an interest; but an independent authority, and an interest subsequently arising [Garapati Venkanna v. Mallupudi Atchuta-ramanna, AIR 1938 Mad. 542].

(19) However, it is pertinent to note that mere right to remuneration or commission does not constitute an agency coupled with interest.

(20) For example, the agents for the sale of cloth who are entitled to keep for themselves any excess over rates that they might secure from purchases have no interest in the property to be sold or in the sale proceeds thereof, so as to attract S. 202 of the Contract Act [Dalchand v. Seth Hazarimal, AIR 1932 Nag. 34].

(21) In another Bombay case, it was held that the mere fact that the salary of an agent collecting rents was to be paid out of the collections, did not create an interest sufficient to make the authority irrevocable [Vishnucharya v. Ramachandra, ILR 3 Bom. 253].

(22) For instance, as held in Lakshmichand Ramchand v. Chotooram Motiram, (1900) 24 Bom. 403, the interest which the agent has in effecting a sale and the prospect of remuneration to arise therefrom, do not constitute such an interest as would prevent the termination of the agency.

(23) If any such interest were to be created for the benefit of the agent, it should be contemporaneously provided for in the instrument of agency itself and should not only be express but also be explicit. It should not give any room for doubt, nor could it be a matter of interpretation. An agency to be irrevocable should therefore create in the agent an interest in the subject matter contemporaneously with the document wherein such agency is created and it cannot be left to chance or guess or inference.

(24) In Corporation Bank v. Lalitha H Holla, AIR 1994 Kant. 133, held : the fact whether the power of attorney is given for securing the interest of the agent, can be ascertained from the facts de hors the express terms of the contract.

(25) In Kondayya Chetti v. Narasimhulu Chetti, (1986) 20 Mad. 97, held : The interest of the agent in the subject matter of the agency may be inferred from the language of the document creating the agency, and from the course of the dealings between the parties, it need not be expressly given. It is the existence of the interest and not the mode in which it is given, that is of importance.

(26) In Mariyakutty v. Chalandian Bank Ltd., AIR 1957 TC 174, the hypothecation deed showed that the shares and the right to the dividends on the same were all charged for the amount borrowed. It was further stipulated that as long as the debt was in existence, the pledgee was authorised to receive directly from the bank any dividend declared and appropriate the same towards interest. It was held that these words clearly created an agency in favour of the pledgee in view of the hypothecation deed which clearly authorised the pledgee to represent the owner of shares with regard to receipt of dividends from the bank, and that the agency created was one contemplated in S. 202, and could not be determined at the instance of the principal alone. IV. Whether an irrevocable power of attorney would terminate on death of donor ?

(a) Indian Law :

(1) The Supreme Court of India, in the case of Seth Loon Karan Sethiya v. Ivan E. John, AIR 1969 SC 73, held : where the agent has himself an interest in the property which forms the subject matter of the agency, the agency cannot, in the absence of an express contract, be terminated to the prejudice of such interest. It is settled law that where the agency is created for valuable consideration and authority is given to effectuate a security or to secure interest of the agent, the authority cannot be revoked.

(b) English Law :

(1) According to S. 4(1) of the (English) Powers of Attorney Act, 1971 a power of attorney is irrevocable if it is expressed to be so and is given to secure :

(i) a proprietary interest of the donee of the power; or

(ii) the performance of an obligation owed to the donee. Then, so long as the donee has the interest or the obligation remaining undischarged, the power cannot be revoked by the donor without the consent of the donee, or by death, incapacity, insolvency, winding up or dissolution of the donor.

(2) According to S. 126 of the (English) Law of Property Act, 1925 (15 & 16 Geo. V, c.20) Powers of attorney, which are given for a valuable consideration and which are stated in the instrument creating them to be irrevocable, cannot be revoked at any time either by any thing done by the donor of the power without the concurrence of the donee, or by the death, disability, or bankruptcy of the donor of the power. Any purported revocation will be ineffective both as regards the donee and a purchaser for value.

(3) Adopting the classical statement of the rule given by Wilde, C.J. in Smart v. Sandars, (1848) 5 CB 895, 917, Bowstead on the Law of Agency, 14th Edition, page 423, states as follows : ]

"(i) Where the authority of an agent is given by deed or for valuable consideration, for the purpose of effectuating any security, or of protecting or securing any interest of the agent, it is irrevocable during the subsistence of such security or interest. But it is not irrevocable merely because the agent has an interest in the exercise of it or has a special property in, or lien for advances upon, the subject matter of it, the authority not being given expressly for the purpose of securing such interest or advances :

(ii) Where a power of attorney whenever created is expressed to be irrevocable and is given to secure a proprietary interest of the donee of the power, or the performance of an obligation owed to the donee, then, so long as the donee has that interest, or the obligation remains undischarged, the power is irrevocable;

(iii) Authority expressed by this article to be irrevocable is not determined by the death, insanity or bankruptcy of the principal, nor . . . where the principal is an incorporated company, by its winding or dissolution, and cannot be revoked by the principal without the consent of the agent."

V. Conclusion :

What emerges from the above is that an irrevocable power of attorney creating an agency, wherein the agent (the donee) has an interest in the property and which forms the subject matter of such agency created for valuable consideration, the agency cannot be terminated to the prejudice of such interest, unless there is an express contract to the contrary. It can, therefore, be inferred that an irrevocable power of attorney granted in relation to a subject matter in which the donee has an interest, cannot be revoked by the donor, nor can it be terminated by the death, unsoundness of mind or insolvency of the donor to prejudice such interest created by the donor in favour of the donee.

Source: P.V.Poornima, Lawyers Club

Indian perspective on Geographical Indication Intellectual Property

The Indian law of Geographical Indications is enshrined in the Geographical Indications of Goods (Registration and Protection) Act, 1999. This Act seeks to provide for the registration and protection of Geographical Indications relating to goods in India. The Act is administered by the Controller General of Patents, Designs and Trade Marks, who is the Registrar of Geographical Indications Registry. The rights granted under the Act, are operative in the whole of India.

What is a Geographical Indication?

A Geographical Indication is a sign used on goods that have a specific geographical origin and possess essential qualities that are due to that place of origin. It is an Indication used to identify agricultural, natural or manufactured goods from a definite territory which have a special quality or characteristics or reputation based upon the climatic or production characteristics unique to the location. A geographical indication conveys consumer that a product is produced in a certain place and has certain characteristics that are due to that place of production. For example, no produces of whisky can call it Scotch, unless it has been produced in Scotland.

Examples of geographical indications from India include DARJEELING tea, BASMATI rice, KANCHIPURAM Silk Saree, ALPHONSO Mango and KOHHLAPARI slippers. Other examples of geographical indications include TUSCANY olive oil in Italy, ROQUEFORT cheese in France, and IDAHO potatoes in the United States.

How Geographical Indication differs from Trade Mark ?

A Geographical Indication is different from Trademark. A Geographical Indication is used to identify goods having special characteristics originating from a definite territory whereas trademark identifies the source of the goods or services of one enterprise from those of others. Unlike Trade Marks which is proprietary in nature, with exclusive right on the owner to use the mark, a Geographical Indication is usually collectively owned by a Community, a group of producers or even by a Nation State.

Why does Geographical Indication need protection?

Geographical Indications denotes the origin and the quality of products which have acquired reputation and goodwill over time. False use of geographical indications by dishonest traders, for example "KANCHIPURAM" for sarees, which was not made in the Kanchipuram area of Tamil Nadu in India, is detrimental to purchasers and legitimate producers. Hence geographical indication needs protection.

Classification of Goods

Almost all jurisdictions including India follow International Classification system in which goods have been grouped into classes 1 to 34 for registration.

How rights conferred by registration

The registration of a geographical indication confers on the authorized users the exclusive right to use the geographical indication in relation to the goods in respect of which it is registered. The Registration offers better legal protection for an action for infringement.

Who Can Apply For Geographical Indication

Any association of persons, producers, organization or authority established by or under the law can apply. The applicant must represent the interests of the producers of the concerned goods.

Authorized User in relation to a Geographical Indication ?

A producer of goods can apply for registration as an Authorized User, with respect to a registered Geographical Indication. He should apply in writing in the prescribed form along with prescribed fee.

Procedure for Geographical Indications Applications

An application for registration of geographical indication shall be in prescribed Form (Form GI-1 for the registration of a Geographical Indication in Part A of the Register by an Indian applicant; Form GI-2 for a convention application; an application for goods falling in different classes by an Indian applicant in Form GI-3 and an application for registration of goods falling in different classes from a convention country in Form GI-4).

The application should include the various requirements and criteria for processing a geographical application as follows:

1.                  How the indication serves to designate the goods as a GI?

2.                  The Class of goods;

3.                  The territory;

4.                  The particulars of appearance;

5.                  Particulars of producers;

6.                  An affidavit of how the applicant claim to represent the interest;

7.                  The standard bench mark or other characteristics of the GI;

8.                  The particulars of special characteristics;

9.                  Textual description of the proposed boundary;

10.              The growth attributes in relation to the G.I. pertinent to the application;

11.              Certified copies of the map of the territory

12.              Special human skill involved, if any;

13.              Number of producers; and

14.              Particulars of inspection structures, if any, to regulate the use of GI.

Upon filing of the application accompanied by prescribed fees, a number will be alloted. The application would be examined on turn to check whether it meets the requirements of the GI Act and Rules. After issuance of the Examination Report submission would be considered. If no objections is raised it would be accepted and would be advertised in the Geographical Indications Journal. An opposition can be lodged within a maximum of four month period. If the opposition is dismissed, the application will proceed to registration in Part A of the Register.

After a geographical indication is registered any person claiming to be the producer of the registered geographical indication can file an application for registration as an authorized user in Part B of the Register.

Term of a geographical indications

The term of a geographical indications registration is for a period of ten years. The renewal is possible for further period of 10 years each. If a registered geographical indication is not renewed, it is liable to be removed from the register.

Remedies For Infringement

The Act also provides criminal remedies. First, the intentional falsification of a geographical indications will bear a prison sentence of at least six months. This may be extended to three years and be accompanied by a fine. Second, the police may conduct search and seizure operations without any warrant. In essence, unauthorized parties may not use geographical indications if such use is likely to mislead the public as to the true origin of the product

Agarwal and Company Law Offices LLP. 

Guide to Incorporate Company in India

For setting up a business establishment in India, first step is to incorporate a company whether a private limited or a public limited, which includes:

ü      obtaining director identification number (DIN),

ü      obtaining digital signature certificate,

ü      reserving the company name with the Registrar of Companies (ROC),

ü      paying stamp duties

ü      filing all incorporation forms and documents  and

ü      obtaining the certificate of incorporation.

Thereafter, it is required to get the other necessary formalities done such as:

ü      Company seal

ü      Permanent Account Number (PAN).

Based on the nature of business, it may further be required to obtain a

Tax Account Number (TAN) come taxes deducted at source (TDS).

Subsequently, depending upon the nature of business additional requirements may include

ü      registration for Value Added tax (VAT),

ü      registration with Employees' Provident Fund Organization,

ü      registration for medical insurance (ESIC)

For incorporating a company in India, there is a series of steps required for incorporating a private or public limited company in India. These steps work according to the guidelines provided by The Company’s Act, 1956.

1. The very first step of formation for incorporating a company is to get the name of the company registered at the Registered of Companies (ROC) in the territory of the company’s registered office. The company’s name should not match any existing name. ROC at least takes a week from the date of registration of the name to assure that the name does not exist before.

2. After the completion of this process, the company has to file a Memorandum of Association and Articles of Association with ROC itself. For a public company, the company’s name should end up with “Limited” and for a private company; the company’s name should end up with “Private Ltd”.

3. After submitting the Memorandum of Association and Articles of Association, ROC issues an incorporated certificate only after receiving a mandatory registration fees.

4. After these steps, the next main step is to get the address of the registered office. It is not mandatory for the registered office to be the same building from where all the work is being carried out.

5. Foreign companies need to fill up a FNV-5 form with the Reserve Bank of India to get the permission to start the manufacturing and trading activities in India without an Indian partner. Any Indian or foreigner can be the director of a company in India. Any person whether he/she is Indian or foreigner and any Indian company or foreign company can be shareholder of an Indian company.

6. For incorporating a Public Company, a minimum of three directors and seven shareholders are required and for incorporating Private Company, a minimum of two directors and two shareholders are required.

7. After the registration and certification, each company needs to designate an Auditor. He has a very important duty to perform in the company. All the balance sheets, company’s documents and company’s meetings are scrutinized by him.

8. Every company should have an account book and written records of all the directors, shareholders and the employees. Account book takes care of all income, including profits and losses and the records register takes care of all the past and present work of the people associated with the company.

9. At last, each company should have a different logo, and a stamp of that logo which is imprinted on each written record and each written document of the company. 

Agarwal and Company Law Offices LLP.

Sole proprietorship firm converted to a company

Many entrepreneurs start their businesses as a sole proprietorship due to the low compliance requirements. As the business and the revenues grow, there is a need to separate the bank accounts and the tax filings of the sole proprietor and that of the business. To achieve this separation a possible solution is to convert the sole proprietorship into a private limited company. In this article, we discuss how this conversion can be done and you as a shareholder can avail of the provisions of law in this regard.

To convert a sole proprietorship concern into a private limited company, an agreement has to be executed between the sole proprietor and the private limited company (once it is incorporated) for the sale of the business. Further, such private limited company so incorporated must have “the takeover of a sole proprietorship concern” as one of the objects in its Memorandum of Association. Further, there are also certain other requirements and issues related to this process as set forth below:

A.         Requirements under the Companies Act:

Section 75 of the Companies Act, 1956, as amended (Companies Act) states that whenever a company makes any allotment of its shares as fully or partly paid up otherwise than in cash, to any person, then a written contract of sale, or a contract for services or other consideration in respect of which that allotment was made must be produced for inspection to the relevant Registrar of Companies (RoC). Further, such company is also required to within thirty (30) days, thereafter, file with the RoC within thirty (30) days, copies of all such contracts and a return stating the number and nominal amount of shares so allotted and the extent to which they are paid up along with the mode of consideration.

B.         Exemption under the Income Tax Act:

Conversion of a sole proprietorship into a private limited company entails a “transfer” within the meaning of the Income Tax Act, 1961, as amended (Income Tax Act). That is, the assets of the sole proprietorship concern are considered transferred to the newly formed company, which makes the sole proprietor liable to pay tax for any capital gains calculated on such transfer. However, there is a provision under section 47(xiv) of the Incoem Tax Act, which lays down certain conditions for exemption from any capital gains.

The conditions are:

All the assets and liabilities of the sole proprietary concern relating to the business immediately before the succession become the assets and liabilities of the company;

The shareholding of the sole proprietor in the company is not less than fifty per cent (50%) of the total voting rights in the company and such shareholding continues to so remain as such for a period of five years from the date of the succession; and

The sole proprietor does not receive any consideration or benefit, directly or indirectly, in any form or manner, other than by way of allotment of shares in the company;

If any of the conditions laid down above are not complied with (say the sole proprietor sells his share in two years instead of holding on to the shareholding for five years), the amount of profits or gains arising from the transfer of such capital assets or intangible assets not charged earlier by virtue of these conditions, shall be deemed to be the profits and gains chargeable to tax of the successor company for the previous year in which the requirements are not complied with.

So therefore,

If you are a sole proprietor who intends to convert his sole proprietorship into a private limited company, and also allot shares to yourself, then it is imperative that an agreement is entered into for such allotment and one of the conditions in the agreement should state that your shareholding / voting rights will not fall below fifty per cent (50%) in the next five years.

Source: Yourstory.in

Merck unit sues Glenmark over diabetes drug

The action comes a day after Swiss drugmaker Novartis AG (NOVN.VX) lost a landmark court ruling over patent protection for its cancer treatment Glivec, a decision widely seen as boosting India's generic pharmaceuticals business.

Merck's Indian unit, MSD, holds an Indian patent on sitagliptin, a chemical compound sold under the Januvia and Janumet brands.

Although the patent is yet to expire, Mumbai-based Glenmark confirmed it had launched generic versions of the two drugs.

"Glenmark is a responsible company and has launched the products after due diligence and research," it said in an emailed statement.

MSD filed its case with the Delhi High Court on Tuesday, saying it was disappointed with Glenmark's decision to launch products that directly infringed its intellectual property.

There are about 65 million patients in India being treated for type 2 diabetes, MSD said.

"We believe our patents for Januvia and Janumet are valid and enforceable and will vigorously defend them," MSD said in an email to Reuters.

Januvia costs nearly 1,300 rupees for a month's dose while Glenmark has offered the drug at a discount of about 30 percent, an industry source said.

Artful claims can’t decide patent law: court

The law of patent in India could not be developed on the artful drafting of claims by companies rather than on the intrinsic worth of invention, the Supreme Court has ruled, rejecting Novartis’ claim for patent for its cancer drug.
A Bench of Justices Aftab Alam and Ranjana Desai said, “We certainly do not wish the law of patent… to develop on the lines where there may be a vast gap between the coverage and the disclosure under the patent; where the scope of the patent is determined not on the intrinsic worth of the invention but by the artful drafting of its claims by skilful lawyers; and where patents are traded as a commodity not for production and marketing of the patented products but to search for someone who may be sued for infringement of the patent.”
The Bench noted that in the United States, ‘Gleevec’ came to the market in 2001, and what was marketed then, beyond doubt, was Imatinib Mesylate. “On its package, the drug was described as ‘Imatinib Mesylate Tablets 100 mg’ and it was further stated that “each film coated tablet contains: 100 mg Imatinib (as Mesylate).” If that be so, and the [appellant’s] claim for patent for the beta crystalline form of Imatinib Mesylate would only appear as an attempt to obtain patent for Imatinib Mesylate, which would otherwise not be permissible in this country.”
The Bench said, “Since the grant of the Zimmermann patent, the appellant has maintained that Gleevec [Imatinib Mesylate] is part of the Zimmermann patent. It obtained drug approval for Gleevec on that basis.
It claimed extension of the term of the Zimmermann patent for the period of regulatory review for Gleevec, and it successfully stopped NATCO Pharma Ltd. from marketing its drug in the U.K. on the basis of the Zimmermann patent.”
“Not only the appellant but the U.S. Board of Patent Appeals, in its judgment granting patent for the beta crystalline form of Imatinib Mesylate, proceeded on the basis that though the beta crystal form might not have been covered by the Zimmermann patent, the Zimmermann patent had the teaching for the making of Imatinib Mesylate from Imatinib and for its use in a pharmacological compositions for treating tumours or in a method of treating warm-blooded animals suffering from a tumoral disease. We thus find no force in the submission that the development of Imatinib Mesylate from Imatinib is outside the Zimmermann patent and constitutes an invention as understood in the law of patent in India.”
The Bench dismissed the appeal filed by Novartis and allowed the appeals filed by NATCO Pharma and Cancer Patients Aid Association.

Condonation of Delay in case of Appeals

  Section 5 of the Limitation deals with condonation of delay in case of appeal. Since the limitation period for appeals is very short, this section is then introduced to meet the end of justice such that the purpose of justice is not defeated merely because there is “sufficient cause” is present due to which an appeal was not preferred. This section extends the limitation period. The word “”sufficient cause” is an important phrase in this section. Since the section is not a matter of right for the party who pleads the condonation, but it depends on the discretion of the court.The court must be satisfied that the delay is caused due to a genuine reason.

 

It is sufficiency of the cause which counts, and not length of delay - Expression "sufficient cause" should receive a liberal construction - As regards delay on the part of State, certain amount of latitude is not impermissible - Expression "sufficient cause" should be considered with pragmatism in justice oriented approach rather than technical detection of sufficient cause for explaining every day's delay - Matter remitted to High Court to decide the criminal revision on merits - Suggestions made to prevent delay in State litigation - Administration of justice – [STATE (NCT OF DELHI) VS AHMED JAAN. AUGUST 12, 2008]

 

Now the question arises what can be the “sufficient cause” which the court accepts-:

 

1. Illness it is the sufficient cause when it is proved without the reasonable cause that the appellant was not able to file an appeal.

 

2. Imprisonment-The imprisonment of the appellant can be a sufficient cause.

 

3. Ignorance of law can also be a one of the reason but it should be bonafide.

 

4. Mistake of fact-It should be real and unintentional.

 

5. Delay in obtaining copies of judgement can be sufficient cause also this reason is also covered in section 12.

 

6. Poverty, Infancy, Pardah

 

7. Mistake of Counsel-mistake by counsel which is not negligence.

 

But to enjoy the benefit of section 5 There should be no negligence due to inaction of the party is a prerequisite, also length of delay is not a matter of concern but reasonable explanation why the delay has occurred is the subject matter of this section.

 

In the end the court prefer liberal approach in favour of justice and favour only reasonable excuses to condone any delay in filing an appeal .However the court must be convinced beyond reasonable doubt that the delay was genuine and it must be condoned in favour of justice. Also there should be absence of negligence in order to make the cause reasonable.

Increase in Trademarks Infringement Cases

Under the Trademarks Act, 1999, the Registered Proprietor or the authorized user of a trademark can take recourse to civil or criminal action against the infringer in the appropriate fora. The statistics of trademark infringements is not maintained by the Central Government.

 

The accession (proposed notification of Trademark rules under the Trademark (Amendment) Act, 2010 would enable the Indian companies to register their trademarks in the member-countries of the Protocol through a single applications as well as allow foreign companies to register their trade marks in India, within a specific timeframe i.e. 18 months. At present, there are 86 contracting parties to the Protocol. Under the Trademarks (Amendments) Act, 2010, the Head Office of the Trade Marks Registry (which is at Mumbai) or such branch of the Trade Marks Registry as the Central Government may by notification in the Official Gazette specify, will deal with the international applications.

Income tax returns out of RTI ambit

                       IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

          Special Leave Petition (Civil) No. 27734          of 2012
                              (@ CC 14781/2012)



Girish Ramchandra Deshpande                  .. Petitioner
                                   Versus
Cen. Information Commr. & Ors.                     .. Respondents



                                  O R D E R

1.    Delay condoned.

2.    We are, in this case, concerned with the question whether the  Central
Information Commissioner (for short 'the CIC') acting  under  the  Right  to
Information Act, 2005 (for  short  'the  RTI  Act')  was  right  in  denying
information regarding the third respondent's personal matters pertaining  to
his  service  career  and  also  denying  the  details  of  his  assets  and
liabilities, movable  and  immovable  properties  on  the  ground  that  the
information sought for was qualified to be personal information  as  defined
in clause (j) of Section 8(1) of the RTI Act.


3.    The petitioner  herein  had  submitted  an  application  on  27.8.2008
before  the  Regional  Provident  Fund  Commissioner  (Ministry  of  Labour,
Government  of  India)  calling  for  various  details  relating  to   third
respondent, who was employed  as  an  Enforcement  Officer  in  Sub-Regional
Office, Akola, now working in the State of Madhya Pradesh.  As  many  as  15
queries were made to which the Regional Provident Fund Commissioner,  Nagpur
gave the following reply on 15.9.2008:

      "As to Point No.1:     Copy of appointment order of Shri A.B. Lute, is
                            in 3 pages.  You have  sought  the  details  of
                            salary in respect  of  Shri  A.B.  Lute,  which
                            relates to personal information the disclosures
                            of which has  no  relationship  to  any  public
                            activity   or   interest,   it   would    cause
                            unwarranted  invasion   of   the   privacy   of
                            individual  hence  denied  as   per   the   RTI
                            provision under Section 8(1)(j) of the Act.


      As to Point No.2:      Copy of order of granting  Enforcement  Officer
                            Promotion to Shri A.B. Lute, is  in  3  Number.
                            Details  of  salary  to  the  post  along  with
                            statutory and other deductions of Mr.  Lute  is
                            denied to provide as per RTI  provisions  under
                            Section  8(1)(j)  for  the  reasons   mentioned
                            above.


      As to Point NO.3:      All the transfer orders of Shri A.B. Lute,  are
                            in 13 Numbers.  Salary details is  rejected  as
                            per the provision under Section 8(1)(j) for the
                            reason mentioned above.


      As to Point No.4:      The copies of memo, show cause notice,  censure
                            issued to Mr. Lute, are not being  provided  on
                            the ground  that  it  would  cause  unwarranted
                            invasion of the privacy of the  individual  and
                            has no relationship to any public  activity  or
                            interest.   Please  see  RTI  provision   under
                            Section 8(1)(j).


      As to Point No.5:      Copy of EPF (Staff & Conditions) Rules 1962  is
                            in 60 pages.


      As to Point No.6:      Copy of return of  assets  and  liabilities  in
                            respect of Mr. Lute cannot be provided  as  per
                            the provision of RTI Act under Section  8(1)(j)
                            as per the  reason  explained  above  at  point
                            No.1.


      As to Point No.7:      Details of investment and other related details
                            are rejected as per the provision  of  RTI  Act
                            under  Section  8(1)(j)  as  per   the   reason
                            explained above at point No.1.


      As to Point No.8:      Copy of report of  item  wise  and  value  wise
                            details of  gifts  accepted  by  Mr.  Lute,  is
                            rejected as per the provisions of RTI Act under
                            Section 8(1)(j) as  per  the  reason  explained
                            above at point No.1.


      As  to  Point  No.9:       Copy  of  details  of  movable,   immovable
                            properties of Mr. Lute, the request to  provide
                            the same is rejected as per the RTI  Provisions
                            under Section 8(1)(j).


      As to Point  No.10:      Mr.  Lute  is  not  claiming  for  TA/DA  for
                            attending the criminal case  pending  at  JMFC,
                            Akola.


      As to Point No.11:     Copy of Notification is in 2 numbers.


      As to Point No.12:     Copy of certified true  copy  of  charge  sheet
                            issued to Mr. Lute - The matter  pertains  with
                            head Office, Mumbai.  Your application is being
                            forwarded to Head Office, Mumbai as per Section
                            6(3) of the RTI Act, 2005.


      As to  Point  No.13:      Certified  True  copy  of  complete  enquiry
                            proceedings initiated against  Mr.  Lute  -  It
                            would cause unwarranted invasion of privacy  of
                            individuals and  has  no  relationship  to  any
                            public activity or interest.   Please  see  RTI
                            provisions under Section 8(1)(j).


      As to Point No.14:     It would cause unwarranted invasion of  privacy
                            of individuals and has no relationship  to  any
                            public activity or interest,  hence  denied  to
                            provide.


      As to Point No.15:     Certified true copy of second show cause notice
                            -  It  would  cause  unwarranted  invasion   of
                            privacy of individuals and has no  relationship
                            to  any  public  activity  or  interest,  hence
                            denied to provide."




4.    Aggrieved by the said order, the petitioner approached the  CIC.   The
CIC passed the order on 18.6.2009, the operative portion of the order  reads
as under:

      "The question for consideration is whether the  aforesaid  information
      sought by the Appellant can be treated as  'personal  information'  as
      defined in clause (j) of Section 8(1) of  the  RTI  Act.   It  may  be
      pertinent to mention that this issue came up before the Full Bench  of
      the Commission in Appeal No.CIC/AT/A/2008/000628  (Milap  Choraria  v.
      Central Board of Direct Taxes) and the Commission  vide  its  decision
      dated 15.6.2009 held that "the Income Tax  return  have  been  rightly
      held to be personal information exempted from disclosure under  clause
      (j) of Section 8(1) of the RTI Act  by  the  CPIO  and  the  Appellate
      Authority, and the appellant herein has not  been  able  to  establish
      that a larger public interest would be served by  disclosure  of  this
      information.  This logic would hold good as far as the  ITRs  of  Shri
      Lute are  concerned.   I  would  like  to  further  observe  that  the
      information which has been denied to the appellant  essentially  falls
      in two parts - (i) relating to the personal matters pertaining to  his
      services career; and (ii) Shri Lute's assets  &  liabilities,  movable
      and immovable properties and  other  financial  aspects.   I  have  no
      hesitation in holding that this information also qualifies to  be  the
      'personal information' as defined in clause (j) of Section 8(1) of the
      RTI Act and the appellant has not been able to convince the Commission
      that disclosure thereof is in larger public interest."




5.    The CIC, after holding so directed the second respondent  to  disclose
the information at paragraphs 1, 2, 3 (only posting  details),  5,  10,  11,
12,13 (only copies of the posting orders) to the appellant within  a  period
of four weeks from the date of the order.  Further, it  was  held  that  the
information sought for with regard to the other queries did not qualify  for
disclosure.

6.    Aggrieved by the said order, the  petitioner  filed  a  writ  petition
No.4221 of 2009 which came up for hearing before a learned Single Judge  and
the court dismissed the same vide order dated  16.2.2010.   The  matter  was
taken up by way of Letters Patent Appeal No.358 of 2011 before the  Division
Bench and the same was dismissed vide order dated 21.12.2011.   Against  the
said order this special leave petition has been filed.

7.    Shri A.P. Wachasunder, learned counsel appearing  for  the  petitioner
submitted that the documents sought  for  vide  Sl.  Nos.1,  2  and  3  were
pertaining to appointment and promotion and Sl.  No.4  and  12  to  15  were
related to disciplinary action and documents at Sl. Nos.6 to 9 pertained  to
assets and liabilities and gifts received by the third  respondent  and  the
disclosure of those details, according to the  learned  counsel,  would  not
cause unwarranted invasion of privacy.

8.    Learned counsel also submitted that the privacy  appended  to  Section
8(1)(j) of the RTI Act widens the scope of documents  warranting  disclosure
and if those provisions are properly interpreted, it could not be said  that
documents  pertaining  to  employment  of  a  person  holding  the  post  of
enforcement officer could be treated as documents having no relationship  to
any public activity or interest.

9.    Learned counsel also pointed out that in view of Section 6(2)  of  the
RTI Act, the applicant making request for  information  is  not  obliged  to
give any reason for the  requisition  and  the  CIC  was  not  justified  in
dismissing his appeal.

10.   This Court in Central Board of  Secondary  Education  and  another  v.
Aditya Bandopadhyay and others (2011) 8  SCC  497  while  dealing  with  the
right of examinees to inspect evaluated answer books in connection with  the
examination conducted by the CBSE Board  had  an  occasion  to  consider  in
detail the aims and object of the RTI Act as well as  the  reasons  for  the
introduction  of  the  exemption  clause  in  the  RTI  Act,  hence,  it  is
unnecessary, for the purpose of this case to  further  examine  the  meaning
and contents of Section 8 as a whole.

11.   We are, however, in this case primarily concerned with the  scope  and
interpretation to clauses (e), (g) and (j) of Section 8(1) of  the  RTI  Act
which are extracted herein below:
      "8. Exemption from disclosure  of  information.-  (1)  Notwithstanding
      anything contained in this Act, there shall be no obligation  to  give
      any citizen,-


      (e) information available to a person in his  fiduciary  relationship,
      unless the competent authority is satisfied  that  the  larger  public
      interest warrants the disclosure  of such information;


      (g) information, the disclosure of which would endanger  the  life  or
      physical safety of any person or identify the source of information or
      assistance  given  in  confidence  for  law  enforcement  or  security
      purposes;


      (j) information which relates to personal information  the  disclosure
      of which has no relationship to any public activity  or  interest,  or
      which  would  cause  unwarranted  invasion  of  the  privacy  of   the
      individual unless the Central Public Information Officer or the  State
      Public Information Officer or the appellate authority, as the case may
      be, is  satisfied  that  the  larger  public  interest  justifies  the
      disclosure of such information."




12.   The petitioner herein sought for  copies  of  all  memos,  show  cause
notices and censure/punishment awarded to  the  third  respondent  from  his
employer and also details viz. movable and  immovable  properties  and  also
the details of his investments, lending and borrowing from Banks  and  other
financial institutions.    Further, he has also sought for  the  details  of
gifts stated to have accepted by the third respondent,  his  family  members
and friends and relatives at the  marriage  of  his  son.   The  information
mostly sought for finds a place in the  income  tax  returns  of  the  third
respondent.  The question that has come up for consideration is whether  the
above-mentioned  information  sought   for   qualifies   to   be   "personal
information" as defined in clause (j) of Section 8(1) of the RTI Act.

13.   We are in agreement with  the  CIC  and  the  courts  below  that  the
details called for by the petitioner i.e. copies of all memos issued to  the
third respondent, show cause notices and orders of  censure/punishment  etc.
are qualified to be  personal  information  as  defined  in  clause  (j)  of
Section 8(1) of the RTI Act.  The performance of an employee/officer  in  an
organization is primarily a matter between the  employee  and  the  employer
and normally those aspects are governed by  the  service  rules  which  fall
under the expression "personal information", the disclosure of which has  no
relationship to any public activity or public interest.  On the other  hand,
the disclosure of which would cause unwarranted invasion of privacy of  that
individual.  Of course, in a given case, if the Central  Public  Information
Officer or the State Public Information Officer of the  Appellate  Authority
is satisfied that the larger public interest  justifies  the  disclosure  of
such information, appropriate orders could  be  passed  but  the  petitioner
cannot claim those details as a matter of right.

14.   The details disclosed by a  person  in  his  income  tax  returns  are
"personal information" which stand exempted  from  disclosure  under  clause
(j) of Section 8(1)  of  the  RTI  Act,  unless  involves  a  larger  public
interest and the Central Public Information  Officer  or  the  State  Public
Information Officer or the Appellate Authority is satisfied that the  larger
public interest justifies the disclosure of such information.

15.   The petitioner in the instant case has not made  a  bona  fide  public
interest in seeking information, the disclosure of  such  information  would
cause unwarranted invasion  of  privacy  of  the  individual  under  Section
8(1)(j) of the RTI Act.

16.   We are, therefore, of the view that the petitioner has  not  succeeded
in establishing that the information sought for is  for  the  larger  public
interest.  That being the fact,  we  are  not  inclined  to  entertain  this
special leave petition.  Hence, the same is dismissed.

Supreme Court extends ban on tourism in core areas of tiger reserves

 Extending the ban on tourism activities in the core areas of tiger reserves, the Supreme Court today pulled up the Centre for the depleting population of the wild cats in the country.

A bench of justices A K Patnaik and Swatanter Kumar put some searching questions to the Centre as it made a fresh plea for the review of the apex court's July 24 order banning tourism in the core areas of tiger reserves.

"You are trying to make up. You have done it (guidelines) after due deliberation. We want to know on what basis you want to do it? What is the data available?

"What are you going to do to save tigers? Earlier it was 13,000, now it has come down to 1,200. You are more worried about the commercial activities," the bench told the Centre's counsel Waseem Ahmed Kadiri.

The apex court made the observation after the Centre made a mention of its affidavits filed in the court for permission to review its earlier guidelines for conservation of tiger.

The apex court earlier on July 24 had imposed an interim ban on tourism in core areas of tiger reserves on the basis of same guidelines. The ban extended today would remain in place at least till next hearing on August 29.

"What have you done for the tiger project? What about the core areas you have promised to take steps for? The Union of India has not done anything except filling affidavits. Why did you initially recommend the ban?," the court asked the counsel.

The apex court later while ordering that its interim ban order would continue posted the matter for further hearing to August 29