Securities Law

03/09/2024

SCRA

- Recognized Stock Exchange

- Section 22
- Section 22 A
- Difference between 22 and 22 A
- Section 22 B
- Section 22 C,D,E,F

- Penalties and Procedure

- Later

- Contracts
- Section 2(e)(a) - Ready delivery contract - Full Payment for securities.
- Section 2(h)(a) - Specific delivery contract - put and option
- Section 2(i) - Spot delivery contract - timeline & place
- Section 2(k) - Transferable specific delivery contract

09/09/2024

- Section 16. 17, 17(A)

10/09/2024 -

- Exclusion of Spot delivery contracts from Section 13,14, 15 and 17.

-
12/09/2024 -

- SEBI PUFTP Regulations, 2003

- What is a Fraud?

- Regulation 2(b) Read ‘dealing’

- Fraud is very open-ended from SEBI’s end at the moment.

13/09/2024 -

Mid-sem types of questions -

- Definitions
-

20/09/2024 -

- Dealing in securities - (key compositors)

a) Act
b) Consent
c) Issue
d) Any way of transaction
e) Parties - pre/agreement
f) Influence
g) Assistance
 - Fraud -
a) Act/ Omission/Concealing/ Misrepresentation
b) Whether in a deceitful manner or not (important because still sub-judice)
c) Whether or not there is wrongful gain/avoidance of loss

- Deceitful Manner - Yes/No - Both will result in fraud - If it includes dealing with
securities. Whether fraud has happened or not, is decided, currently, based on impact.
Read the latest judgment to be updated.

- Read these judgements

- 1) SAT Order, 2010, Pyramid Saimira vs. Theatre Ltd. - Impact is important not
Intention.
- 2) SAT, 2011, S.Gopalkrishnan vs. SEBI -
- 3) SC, 2013, N.Narayanan vs. SEBI
- 4) SC, 2017, SEBI vs. Kanhaiya Lal Baldev Bhai Patel
- 5) SC, 2018, SEBI vs. Rakhi Trading Private Limited

Mid-Sem questions -

SCRA mcqs -

1. SEBI introduces a settlement third scheme on illiquid stock option cases in terms of
Section 15Jb of the SEBI 1992 Act.
2. When did SEBI come into existence? 1988.
3. It is correct that one of the objectives of setting up SEBI is to protect the interests of the
shareholders.
4. SEBI’s skin in the game rule is applicable to mutual funds and not Merchant bankers,
Financial Advisors and Brokerages.
5. In which year was SAT established? 1992, only one bench which sits in Mumbai, under
SEBI Act 1992.
6. When did SEBI become a statutory body? 1992.
7. Chairman of SEBI - Madhabi Puri Buch
8. Minimum Contract Size in equity derivatives segment in India is Rs. 5 lakhs.
9. SEBI issued guidelines for individual investor applying in public issues of equity shares
and convertibles. Up to what amount individuals can use UPI for application amount? -
Rs. 5 Lakhs.
10. As a regulatory norm in India, a listed company in ordinary course is required to report
quarterly results within how many days of the end of the quarters? 45
11. Which sectionof the SCRA enlists grant of recognition to stock exchanges? Section 4
 12. Which term refers to actual delivery of securities and the payment of a price therefor
either on the same day as the date of the contract or on the next day, as per SCRA - Spot
delivery contract.
13. What can be restricted by SEBI while approving the corporatisation and demutualisation
- the voting rights of the shareholders who are also stock brokers of the recognized stock
exchange, the right of shareholders, the maximum number of representatives of the stock
brokers of the recognized stock exchange to be appointed on the governing board of the
exchange.
14. Which section of the SCRA enlists withdrawal of recognition of stock exchanges?
Section 5
15. What is the maximum strength of stock broker in the governing council, as per the SCRA
- 0.25
16. SCRA,
17. Headquarters of SEBI - Mumbai
18. Who appoints SEBI Chairman - Union Government of India
19. It is true that SEBI undertakes registration of brokers and sub-brokers.
20. Mutual Fund Advisory Com. is a sebi com. Not financial standing com./public accounts
com./estimates com.
21. Two types of brokers - Discount and Merchant brokers
22. Rolling cycle of SEBI is T + 1. All the trades are settled within one day of them taking
place.
23. When was the depositories act passed? 1996
24. What is the current application limit for retail investors? Rs 200000.
25. Who was the regulatory authority before SEBI came into existence? Controller of Capital
Issues.
26. What is the number of departments under SEBI? 20
27. SEBI does not provide a platform for - Hedge Fund investors
28. What kinds of operations are regulated under SEBI? - Depositories, Participants,
Custodians of securities.
29. Insider trading is prohibited by SEBI.
30. What is not true for authority of SEBI? Quasi authoritative.
31. Mutual Funds are managed by Asset Management Companies.
32. What is AMFI? Association of Mutual Funds in India.
33. One member of RBI is a part of governing council of SEBI
34. What is the maximum period for which the SEBI chairman is appointed? 5
35. What is the current status of the regulations of SEBI? Statutory
36. How many board members form a part of SEBI? 9
37. The securities and Exchange Board of India overlooks the need of Investors, Market
Intermediaries, Issuer of securities.

03/10/2024-
07/10/2024 -

1. Read regulation 3 and 4 of PUFTP. Will circle back if required

2. Insiderer trading, LODR, ICDR, part of listing and delisting regulations.

LODR

1. 3,6,9,10,11,12,14-18,20-23,24A,25-27,29,31A,32,33,34,41A,43,43A,44,45,48,98,99,99A
and 102.
2. Applicability - Securities listed on NSE,BSE and CSE.
3. Once u become listed, even if there is no public issue, the provisions will apply on you
always.
4. PMLA - Black money, Illegal gains,
5. Pupose of LODR, Related to compisition of Borad of directors, KMP to be read with
directors.

08/10/2024 -

1.

09/10/2024 -

ICDR -

1. To get securities listed on stock exchange, ICDR gets triggered. To becomes a public
company simply. LODR is triggered.
2. Four types of listings -
a) IPO and FPO - General public
b) Rights issues - existing shareholders
c) Bonus Issue - kind of rights issue
d) Merger/De-merger of company.

- Promoter and promoter group -

- In offer document, whoever is mentioned as promoter is a promoter.
- Promoter group - promoter is a person who might have some say in functioning of the
company. In accordance with whose advice, BOD of the issuer is inclined to act.
Professional advisors are not included.
- Promoter gorup - declared promoters and connceted people. Immediate relative of the
promoter. If promoter is a body corporate, the subsidiary or holding company. Any
company in which promoter holds more than 20% of the shareholding. If a company
holds more than 20% in promoter company
14/10/2024

Regulation 6 -

- Eligibility requirements for an initial public offer

- Monetary Assets held by company or expected to be received, firm commitment must be
made to use it in a particular way if more than 1.5 crores monetary assets.
- Provided further that the limit of fifty per cent. on monetary assets shall not be applicable
in case the initial public offer is made entirely through an offer for sale.
- Difference between IPO and Offer for Sale - IPO is first time company is listing shares,
OS is not FPO, it is sale of securities held by some shareholders.
- it has an average operating profit of at least fifteen crore rupees
- it has a net worth of at least one crore rupees in each of the preceding three full years
- if it has changed its name within the last one year, at least fifty per cent. of the revenue,
calculated on a restated and consolidated basis, for the preceding one full year has been
earned by it from the activity indicated by its new name.
- An issuer not satisfying the condition stipulated in sub-regulation (1) shall be eligible to
make an initial public offer only if the issue is made through the book-building process
and the issuer undertakes to allot at least seventy five per cent. of the net offer to
qualified institutional buyers and to refund the full subscription money if it fails to do so.
- Clause 3 wont come in exam.

- Regulation 7 -
- General Conditions

- LODR
- Important topics for exams w.r.t LODR - Applicability of LODR (3,4), Grievance
redressal mechanism (13), various committees (audit, remuneration etc.) (18-22),
composition of directors (17), obligations of a compliance officer (6,5), in-principal
approval (28) and disclosures required for Related Party Transactions (23).
- Part 1 - Short answers - There will be 5 questions of 5 marks each. We have to attempt
any 4.
- Part II – Long answers - There will be 5 questions of 10 marks each. We have to attempt
any 3.
- You can make flow-chart, diagram, paragraphs, bullet points - just convey that you have
understood the concept using key words.
- If you are dicey about two questions you can answer both of them. You will be marked
for the best out of the two.
ITL

06/06/2024 -

1. Article 1 -
- Life products - Later on

2. National Treatment Principle - no discrimination between products that have been

imported or domestically produced. Not domestically manufactured/assembled etc., just
domestically available. How is this contradictory to Make in India? How is this against
the LPG policy?
3. Free Trade vs. Fair Trade principles - Markets have their own demand and supply
influences, in a free trade mark - propagated by Adam Smith. Fair trade means everyone
in the supply chain including the disadvantaged are given incentives to compete with a
wider market.
4. Fair Trade principles are generally in contradiction with International Trade Laws
including WTO Principles. In these cases, countries lose their case against companies and
are not subject to appeal. Then they go into arbitration.

09/06/2024 - GATT

1. Article 3 - National Treatment on Internal Taxations and Regulation.

2. MID-SEM: SITUATIONS BASED QUESTIONS - MFN VS. NTP - Whether It Is
Article 1 Or 2 Or 3 Or Any Other. Is It Under Any Exception?
3. Difference between Articles 1 and 3.
10/09/2024

- Article 3 - clause 1 talks about NTP.

- Defacto discrimination by promotion of certain products. De-jure discrimination.
- Example- Japanese Sochu Alchohol case.
- Question 1) How to determine like products? Four principles to determine if products are
like products
1) Quality, nature, and properties of the product
2) End usage of the product
3) Consumer tastes and habits - Substitute products.
4) Tariff Classification of the product

- Question 2) Are the like imported products being internally tagged or internally charged
in excess of domestic products? Two criteria-
1. 1) The internal tax/charge must not be in excess of domestic products.
2. 2) The internal tax/charge must not be applied in a manner that distorts conditions
of competition and consequently affords protection to domestic products.
- Read US Automobiles Case.

- Question 3) Concept of like products vis a vis directly competitive or substitutive product

—---------

12/09/2024 -

Mid-Sem questions -

- MID-SEM: SITUATIONS BASED QUESTIONS -

- MFN VS. NTP - Whether It Is Article 1 Or 2 Or 3 Or Any Other. Is It Under Any Exception?

- Answer :

Introduction

● "Like product" appears in multiple GATT provisions

 ● Meaning may vary between provisions
● Focus: Comparing meaning in Articles I:1 and III

Defining "Likeness"

● Requires specifying characteristics for comparison

● Often compared on a single scale of "likeness"
● Physical characteristics alone are insufficient
● Commercial concept: focus on competitiveness
● Criteria include substitutability, functional likeness

Policy Goals of Article III:2 and III:4

● Prevent use of internal measures to protect domestic industry

● "Like product" should mean competitive foreign products
● Article III:2 structure:
○ Narrow definition of "like product" for per se rule
○ Second sentence covers "directly competitive" products
● Article III:4: Only uses "like product" term
● Possible reconciliations:
○ Different meanings in Paragraphs 2 and 4
○ Broader interpretation of "like product" in both

Policy Goals of Article I:1

● Covers various measures (tariffs, border charges, internal measures)

● Economic effects similar to National Treatment rule
● For internal measures: similar to Article III
● For tariffs: different considerations
○ Allows market distortion
○ Needs product distinctions for protection management
○ Must promote negotiation to lower tariffs
○ Reciprocity principle conflicts with non-discrimination

Reconciling Conflicting Policies in Tariffs

● Management of negotiations
● Limited discrimination against free riders

Fine product distinctions in tariffs

Tariff Distinction Rules

● Based on established practice

● Tolerance for distinctions based on objective characteristics
● Examples: materials, manufacture method, species, value, size, quality
● Validity doesn't depend on competitive significance or purpose

Anecdotal Evidence: US "Chicken War" Retaliation (1963)

 ● MFN-based retaliation against EC
● Targeted France through fine product distinction in brandy tariffs
● No objections raised

Limits on Tariff Distinctions

● Objectionable when closer to country distinction than product distinction

● Example: 1904 German cattle concession
● Justification for Indirect Discrimination
○ Compromise between conflicting objectives
○ Product distinctions: clumsy but tolerable tool
○ Balances political need for reciprocity with economic goal of non-distortion
● Suggested Interpretation
● Narrow interpretation for tariffs under Article I:1
● Broader interpretation for internal measures (Article III and part of Article I:1)
● Define "likeness" based on competitive relationship

11. Legal Rulings a. 1970 Working Party Report

○ Suggests case-by-case approach
○ Lists criteria: end-uses, consumer tastes, product properties
○ Limited official weight, but often cited
12. b. Article I:1 Tariff Cases
○ SPF Lumber case:
■ Supports wide discretion in tariff classification
■ Acknowledges tariff differentiation as legitimate tool
○ Coffee case:
■ Ruled different types of unroasted coffee as "like products"
■ Criticized for overlooking commercial distinctions
■ Influenced by perceived discriminatory purpose and developing country support
○ Sardines case:
■ Avoided ruling on Article I claim
■ Suggests fine product distinctions in tariffs may be acceptable
13. Implications of Legal Rulings
○ Inconsistency between cases and normal GATT practice
○ Coffee case often cited, potentially misapplied to non-tariff measures
○ Difficulty in challenging established tariff distinctions

Thesis

● Internal measures (like taxes, subsidies, regulations) should be evaluated based on competition
between products rather than just their physical characteristics.

Key Points

1. Article III:2 Structure:

○ This article supports a broader interpretation of product comparisons.
○ The "like product" concept is secondary in this context.
2. Importance of Articles I:1 and III:4:
○ These articles use "like product" to set standards for evaluating internal measures.
 ○ A broader interpretation is necessary to combat protectionism.
3. Cases Involving "Like Product":
○ Article I Cases:
■ Australia – Subsidy on Ammonium Sulfate
■ European Community – Measures on Animal Feed Proteins
○ Article III:4 Cases:
■ Animal Feed Proteins
■ Spain – Domestic Sale of Soybean Oil
■ U.S. – Measures Affecting Alcoholic and Malt Beverages
■ U.S. – Taxes on Automobiles
○ Most rulings in these cases lack authoritative weight.
4. Competitive Context:
○ The first three cases test the "like product" concept based on competitiveness rather than
just physical differences.
○ Products in these cases included chemically distinct fertilizers and various animal feed
proteins.
5. Case Insights:
○ In Animal Feed Proteins and Australian Subsidy, the focus often shifted to physical
characteristics and tariff classifications from other countries.
○ This reliance on tariff practices contradicts the idea that internal measures should be more
rigorously judged.
6. Soybean Oil Case:
○ The panel's narrow definition of "like product" as “more or less the same product” faced
U.S. criticism and was not adopted.
○ This case clarified that "like product" must be broader than mere identity.
7. Aim and Effects Test:
○ Proposed in the Malt Beverages and Auto Taxes cases to analyze market effects rather
than just product characteristics.
○ Rejected by the WTO Appellate Body for incorrect application of "like product."

Conclusion

● A more competitive-focused standard is necessary for assessing internal measures.

● Current interpretations often rely on narrow definitions and external tariff classifications, which
may hinder anti-protectionist goals.

Thesis

● Internal measures (like taxes, subsidies, and regulations) should be evaluated based on the
competitive relationships between products rather than just their physical characteristics.

Key Points

1. Article III:2 Structure:

○ The unique two-sentence architecture of Article III:2 allows for a separate interpretation
of "like product."
○ Despite this, cross-referencing various "like product" cases remains relevant for
understanding its application.
2. Importance of Articles I:1 and III:4:
○ These articles utilize "like product" to establish standards for internal measures,
necessitating a broader interpretation to combat protectionism.
 3. Key Cases Involving "Like Product":
○ Article I Cases:
■ Australia – Subsidy on Ammonium Sulfate
■ European Community – Measures on Animal Feed Proteins
○ Article III:4 Cases:
■ Animal Feed Proteins
■ Spain – Domestic Sale of Soybean Oil
■ U.S. – Measures Affecting Alcoholic and Malt Beverages
■ U.S. – Taxes on Automobiles
○ Many rulings in these cases lack authoritative status.
4. Competitive Context:
○ The first three cases provide valuable tests of the "like product" concept based on
competitiveness rather than mere physical differences.
5. Japan Alcoholic Beverages Cases:
○ Japan Alcoholic Beverages I (1987):
■ Rulings identified various distilled spirits (gin, vodka, whiskey) as "like
products," preventing Japan from imposing different taxes based on quality
distinctions.
■ The panel relied on tariff classifications and previous case definitions, rejecting
arbitrary quality-based distinctions perceived as protective in nature.
○ Japan Alcoholic Beverages II (1996):
■ The focus was on an internal tax on shochu, lower than on Western spirits. The
panel classified vodka as "like" shochu due to minor differences.
■ Physical characteristics (like color and raw materials) influenced the panel's
decisions more than market principles, leading to a narrow interpretation of "like
product."
6. Periodicals Case:
○ Involved a comparison between foreign and domestic periodicals.
○ The panel struggled to define "like product," ultimately favoring a "directly competitive"
standard due to inadequate rationale for distinguishing characteristics.
7. Implications:
○ The narrow interpretations in both Japan cases and the Periodicals case suggest a trend
towards stricter definitions of "like product."
○ Future GATT/WTO rulings may continue to adopt a narrow view, hindering the policy
distinctions proposed for evaluating internal measures.

Conclusion

● A focus on competitive relationships is crucial for assessing internal measures effectively.

● Current interpretations lean towards narrow definitions, influenced by physical characteristics
rather than the broader competitive context, which may impede anti-protectionist efforts.

—---

1/10/2024 -

End Sem Paper pattern - one 30 mark question with 10 marks each sub-questions.

Anti-Dumping Measures -
1. Countries started getting decolonized in a political manner, i.e. there was a shift of
political power but economic power/trade power still rested with first world countries.
They were also controlling global doors and hegemony was there. Shift from political to
economic colonization.
2. There were different measures to this - to keep them dependant -
● Giving them cheap products s that there domestic industry is not able to compete
with international markets. For example - Chinese Lights being dumped in India.
Because of mass production, cheap labor etc. This does not let Indian producers
compete with imported items. This is good in short term from consumer
perspective but in the long run this goes against the country’s interests. When you
become dependent, they can increase prices. And if the domestic market hasn't
been able to compete, they will not flourish and lead to unemployment.

3. Article 6 of GATT -

- Condemning, not banning

- Threatening to cause, not cause
- Material injury, not injury
- Introduced is wider than imported
- Same vs like products
3/10/2024 -

1. What is wrong with Anti-dumping?

- To protect/safeguard your domestic market. Cannot have prices reduced in such a
manner that it hurt domestic market. A safety valve.
- It is a strategic weapon - whenver there is a dumping in a country, it can be used
retaliation against countires which have already dumped their products
- Response to unfair trade - this is not free or fair trade.

2. Features -
- Investigation to find if there has been dumping - Find out change in prices - in
exporting countries, prices are v low. In importing countries, princes are high.
- Establishment of a material injury - has to be material injury not just injury.
- Establishment of a causal link - between exporting country and importing country.

3. Ascerting dumping -
- No internal body decides, investigation not possible by international body. If
sanctioned country has problem, approach WTO under MFN and NTP.
- Domestic investigation agnecy decides - India - DG of Anti Dumping and Allied
duties. China - MOFCOM. US - ITAD.

4. How is dumping calculated ?

- Normal Value : NV is the price at which the like product is sold at the exporting
country during the ordinary course of trade.
- Dumping Value/Margin of Dumping : DV = NV - EP (Export price)
- Depending on DV, Dumping tariffs will be decided.

5. NV Calculation - two methods -

a) direct - seeing the price of like product in exporting country,

b) indirect/alternate - third country price method,

c) constructed normal value method -

a) Direct method/ Domestic Sales Calculation method -

 - Sales must be in ordinary course of trade
- Sales must be of like product
- Products must be destined for consumption in the exporting countrye
- Price must be comparable
- OCT Calculation - no extraordinary situations in the country
(exporting/importing).
-

08/10/2024 -

1. Anti-dumping agreement :
2. Article 3 - injury - tells you manner in which injury should be determined.

Article 3.2 -

3. Difference between absolute and relative increase - relative might not be a significant
amount but absolute is sheer volume
4. Objectivity and verifiability of material injury - if it is able to be verified, then evidence
is posititve evidence. There is objective data.
5. Comparable prices explanation - 3.2 -
a) Price undercutting - Price of the product at issue is set below the domestic like
product.
b) Price suppression - Domestic prices of the product in issue are inhibited or
suppressed from rising. Or the increase is less than what would have been
otherwise. Stagnancy is there.
c) Price depression - DP of the product in issue are pressed down or reduced.

- Determination of injury -
- Fundamental substantive obligation to objectively examine and ascertain the positive
evidence :
- Article 3.2 - determination of volume and price effect by the like domestic dumped
imports in the importing country.
- Article 3.3 - Cumulation that is requirement ot investigate imports from more than one
country.
- Article 3.4 - Evaluation of relevant economic factors to assess the impact of dumped
products on the domestic industry.
- Article 3.5 - Determination of causal link between imported goods and injury. Non-
attribution analysis - to assess the impact of the factors - is not aattributed to the
dumped imports.
- Article 3.6 - effect sof dumped imports shall be assessed in relation to the domestic
production of the like product ……….
 - 3.7 and 3.8 - determination of threat of material injury and special care while assessing
the same.

09/10/2024

Article 3.3 -

1. If anti dumping investigation happening on products from more than one country, there
are two ways to determine injury -
a)
b)

2. Examination of the impact of the dumped imports -

a) Actual and potential decline in sales

b) Profits
c) Output
d) Market share
e) Productivity
f) Roi
g) Utilization of capacity
h) Factros affecting domestic prices
i) Magnitude of the margin of dumping
j) Actual and potential negative effects on cash flow
k) Inventories
l) Employment
m) Wages
n) Growth
o) Ability to raise capital
p) Investment

The list is not exhaustive.

Cases -

● EC Pipe Fitting case - There is no particular rule/order in which harm can be ascertained.
They can look into any/all of these factors.

Article 3.5 -

Determination of causation -
 - Shall examine any known factor other than the dumped imports which at the same
timemare injuring the domestic industry, and the injuries must not be attributed to the
dumped imports.

Article 3.6 -

- Effect of dumped imports shall be assessed in relation to the domestic production of the
like product when available data permit the separate identification of that production on
the basis of such criteria as the production process, producer’s sales and profits.

Article 3.7 - important

- Determination of threat of injury shall be made on basis of facts not mere

allegations/conjuncture/remote possibility.
- Injury must be clearly forseen or imminent.
- Factors while dtermining existence of threat of metrial injury :
a) Significant increase of sumped imports into the market indicating likliihood of
substantially increased importation.
b) Exporter have more so they might increase dumping
c) Whether imports are entering at prices that will have significant depressing or
suppressing effect on domestic prices, and would likely increase demand for further
imports.
d) Inventories of the product being invested.
- One of these cant necessarily give decisive guidance but totality of factors considered
must lead to conclusion.

Article 3.8 -

Anti dumping measures must be determied with special care.

NV - EP (EP always includes subsidies)

Therefore when NV = $ 50, EP = $30 and ES = $10 - 9

11/10/2024 -

- Article 5.8 -
- Article 5.9 - anti dumping should not hinder procedures of customs clearance.
- 5.10 - in one year in general or maximum 18 months.

Article 6 - Evidence
 - All interested parties will be issued notice, ample opportunity to provide all in writing all
evidence.
- Summary paragraph needs to be given b y parties who do not want to disclose
cobfedential information about prices.

Article 7 - Provisional measure

- Applied when? Investigation starter, public notice issued, adequate opportunity to submit
information, dumping should be satisfied and injury should have been caused.
-
- Forms -
- Provisional duty
- Security or cash deposit equal to amount of estimated duty, not more than anti dumping
margin.
- Provisional measures shall not applied sooner than 60 days.
- If IA thinks effects of dumping is gone, then they have to conclude investigation and no
duty will be imposed on exprting company.

Article 9 - Imposition and collection of duties

Question will be on if the process was taken in the correct manner. Just see what is broadly there
in the article.

- The decision if the amount will be full margin or less

Article 10 - Retroacitivyt

- Only apply to products entering after decision under article 7 and 9 is in force.
- Only apply to products meant for domestic consumption not others.
-
-
-
-

14/10/2024 -

- Article 13 -
- The IA has to have a judicial function, like a tribunal. Basically there should be an
appellate power, or local courts should have jurisdiction. Arbitral tribunal will also
suffice.

- Article 14 -
- Anti-dumping action on behalf of a third country -
- Article 17.6 -
 - Article 17.7

23/10/2024 -

- RTAs formed due to Custom Unions and their own sanitary rules
- Not the same duty but substantially the same duty
- Custom unions means two or more territories coem together to have same tariff system.
- Another methods apart from CU can be FTAs.

Article 24(8) -

- For the purpose of the agreement

- Turky Vs. India case - 19 different types of textile duties.
- The panel
- RTA is coming in exam.
- Security exceptions

—--------------

PIL

06/09/2024 -

Question 3) State Recognition -

1. Subjects of International Law - Why to study? What are these subjects?

2. International personality refers to the capacity to be a bearer of rights and duties under
International Law.
3. Four basic elements/qualifications of IP -
- They must have duties - when they have duties, they will have responsibilities
- They must be capable of claiming benefits of rights - There is a corresponding
right of every duty. They must not be just a mere beneficiary. They must have the
capacity to get the rights enforced.
- They must possess the capacity to enter into contractual or other legal relations
with other legal personalities.
 - They must possess the capacity to enjoy some or all of the privileges and
immunities.
4. Traditionally, only states were subjects of IL. Now it has expanded to established
international legal persons namely -
- Independent sovereign states
- Political settlements (Eg - Free city of Denzig 1919 in treaty of versailles)
- Condominium - (formed due to political relations between countries, more than
one state has access to sovereignty) There are only 7-8 in the world. Eg -
Vanuatu. Common territorial sovereignty.
- Belligerents and Insurgents - Difference between Belligerents and Terrorists.
- Individuals - Many organizations, conventions, internationally declared terrorists,

09/09/2024 -

- Mid sem syllabus - Until we finish the second module. No first module.
- Subjects of International Law -
- Pope or The Holy See - Till 1807, Pope had both sovereign rights as well as head of the
roman church. Since there was no separation of power, the pope was considered head. So,
he was also subject to international law. Then, there was separation of power by an act
called the Law of Guarantee. The Italian government took away sovereign powers of the
pope but could still represent the country in international organizations. In 1929, there
was a treaty signed called the Lateran Treaty clarified that position of holy see. His power
was taken and financial compensation was given to build the Vatican city after annexing
papal estate. Then he was made head of the Vatican state.

- International Organizations -
- Example - reparation case of Norwegian national. It was re-confirmed that International
organizations also are subjects of international law.
- Three conditions to satisfy - 1) Permanent association of states - for common objectives
and having its own administrative organs. 2) they must exercise some power that is
distinct from the sovereign powers of its member states. 3) Competencies must be
exercisable on an international level and not confined exclusively to the national system
of its member state.
- These conditions are not part of law, it is part of the advisory opinion of ICJ . Example -
ICJ Advisory opinion on legality of a threat or use of nuclear weapons 1996.
- Immunities and privileges -
- Capacity to enter into international arrangements.
- Binding on these international organizations.
- The right one exmoo id 19992, Geneva Convention law of war.
 - NGOs and Transnational Organizations.
- A lot of NGOs are recognized as
- TransNational Organisation - Eg - Taliban. JP Morgan, World Bank etc.
- Case name - Texaco Overseas Petroleum Company vs. The Libyan Arab Republic.
- MNCs are also recognized as subjects of international law. They have to prove they are
doing more than profit earning.
- Government is also a subject, for example, in Tibet.

10/09/24 -

- Concept of State and International Personality -

- Recognition of the State is more an example of International politics than Public
International law. It is also called a one-shot bullet.

UN Charter -

- Article 3
- Article 4

Montevideo Convention of the Rights and Duties of States, 1933 -

- Four qualifications for the state to be a person of a law - 1) Permanent population, 2) a

defined territory, 3) government, and d) capacity to enter into relations with the other
states.
- Kelsen’s qualifications of a community - The community must be politically organized,
and should have control over a definite territory, this definite control should tend towards
permanence and the fourth one is the community thus constituted must be independent.

12/09/2024 -
1. Article 6 - Recognition is unconditional and irrevocable.
2. Article 7 - Recognition of a state may be expressed or tactic.

3. Four theories of recognition -

- Constitutive theory of recognition - a state is recognized only when another state
recognizes that state. Drawbacks - too much reliance on another state.
- Declaratory theory - it is immaterial whether one state recognizes the other state. For a
sovereign state, their sovereignty is immaterial if some other state recognizes it.
Drawbacks - All rebellions will declare a state and it will create a ruckus.

4. Is there a duty of recognition on states? Read about the responsibility to protect as a

similar phenomenon -

5. Assignment - Kosovo case.

6. Can there be a state which is recognized as a state but not independent?

- Yes. Independence is not necessary.

7. Forms of recognition -
- De-facto recognition - When the act of one state recognizes another state. What
could be these factors - Not trades,
- De-Jure recognition - By law. By passing legislation or by declaring. Example -
Jerusalem-Palestine, Bangladesh.
- Premature recognition - States do not have basic essentials to recognize other
states but are still recognized. Ex- premature acceptance of Hong-Kong, Partial
recognition of Tiber.
- Explicit or Implicit recognition - Whenever any state declares - that is explicit.
Implicit - getting into a treaty etc. Great Britain recognizing Latin America as a
state - example of implicit and premature recognition.
- Collective recognition - Group of Countries/regional organizations recognising
the state. Example - OIC recognizing Syria etc.

8. Retroactivity of Recognition - From when is recognition valid? Ab-initio or a certain date

- Whenever there is a recognition of state, state is recognized ab-initio. There is always
 retroactivity of recognition. In 1975, Western Sahara Case, ICJ held that no rule of
international law governs forms of recognition.

9. Insurgents and Belligerents -

- Insurgents - rebellion, riot or mutiny by a portion of citizens against their own
country. May lead to belligerency. Primarily an internal matter.
- Belligerency signifies a state of war in which there are two contenders of power.
Primarily an external matter.
- Both of them are subjects of International Law.

10. Can there be de-recognition of state? As per montevideo, nope. Otherwise, yes. Example
- UK recognizing Ethiopia after capture by Italian government.

11. Non- Recognition of States - When we are talking about rules and mandates, obligations
may exist but rules and mandates are not enforceable.

20/09/2024

- Mid Sem -

- State Succession - This important topic, specially after the 18th century because more
than 100 nations getting de-colonized. The rapid formation of states has led to the
discussion over state succession.
- A lot of attempts have been made to codify state succession because there were disputes
relating to borders etc. Types and method of state succession -
- Methods - annexation, amalgamation, subjugation, merger, disintegration. No fixed
method was decided or demarcated.
- Reasons - De-colonization, Self-determination.
- Hence, it has not been codified. But why exactly? - Sovereignty. How can another state
provide for a framework for the sovereignty of another state?
-
- Vienna Convention definition -Replacement of one state by another in responsibility for
the international relation of territory.
- Types -

1) Universal Succession - Where a state is succeeding in a manner when there is no

existence of a parent state. Example - disintegration of USSR.
2) Partial Succession - The identity of a parent state remains. Examples - India Pakistan,
Pakistan Bangladesh, Sudan South Sudan, Syria Egypt.

- Theories of State Succession -

- 1) Universal Succession Theory (Hugo) - Whenever a state is succeeded from another

state, new state takes all responsibilities and duties of old state. There are two
justifications - 1) Divine theory of state - state gets power from god and it cannot be
divided by a government. 2) The permanency of state - When the state is permanent,
rules and responsibilities is also permanent. Similar to government change.
- Criticism - Roman Origins, Divine intervention. Hence, ceaded to exist.
- Only functional part - treaty obligations wrt border/boundary obligations.

- 2) Popular Continuity Theory is related to universal succession theory. The commonality

is both of them talk about the continuation of the rights and responsibilities of the old
state. It was given by Fiore.
- They have divided state into two persons - social personality and political. PP refers to
the rights and obligations of states towards the government. SP refers to rights and
obligations of the state towards the people.
- This theory suggests that the PP of a state changes with succession. SP does not change
with succession.
- Criticism - difficult application.

- 3) Organic Substitution Theory -

- This theory was first discussed by Von Gierke and Max Huber.
- What is organic nature of state - state will keep on growing and developing. Hence,
whenever there is change of state, it is only a change of sovereignty and rules and duties
resin smae.
- Organic Bond of government with people and state remiss same.
 -

Mid-Sem questions -

Question 1) Relationship between Municipal Law and International Law

Introduction -

● International Law: A collection of rules that govern interactions between states.

● Municipal Law: Also known as National Law, it pertains to the laws within a specific
country.
● Various theories exist to distinguish and define the relationship between these two legal
systems.

1. Monistic Theory
● The Monistic Theory, articulated by Hans Kelsen and influenced by H. Lauterpacht,
posits a unified legal system encompassing both International and Municipal Law.
● Proponents argue that there is no significant distinction; both are viewed as parts of a
single legal framework, with International Law holding superiority.

2. Kelsen’s Grundnorm Theory

● Kelsen introduced the concept of the Grundnorm, a foundational norm from which all
laws derive authority.
● He asserts that International Law and state laws form a cohesive system of norms.
● His argument centers on the idea that norms of International Law supersede conflicting
Municipal laws, rendering the latter invalid.

● Lauterpacht's Perspective
● Lauterpacht emphasized the individual as a key component of society, allowing for the
transference of rights and obligations from Municipal to International Law.
● He contended that while the two systems serve the same fundamental purpose—
promoting human welfare—they are not equivalent.
● Critique of Monistic Theory
● Critics argue that Municipal Law often operates independently of International Law,
particularly in instances where historical contexts hinder alignment.

3. Dualist Theory -
● The **Dualist Theory**, championed by H. Triepel, maintains a clear distinction
between International and Municipal Law.
● This theory suggests that both operate as separate legal systems, with no inherent
hierarchy.

● Key Features
● - Dualism argues against the automatic transference of rights and obligations between the
two systems.
● - Municipal Law governs internal matters, while International Law pertains to relations
between states.
● International Law requires formal incorporation into Municipal Law for application,
typically through legal notice.

● Critique of Dualist Theory

● Critics highlight the rigidity of Dualism, noting that it overlooks instances where
International Law directly impacts individuals and can impose accountability (e.g., for
war crimes).
● .The principle of **Pacta Sunt Servanda** (agreements must be kept) is vital but not
exclusive, as various binding rules exist within International Law.

4. Consent Theory (Common Theory)

● - Originating from John Locke’s ideas of equality, the **Consent Theory** posits that
International Law is based on the agreements of sovereign states.
● - Treaties and customs are considered primary sources of International Law, as outlined
in Article 38(1) of the ICJ Statute.

● Application
● - The theory emphasizes that states do not require third-party consent to enter agreements
with one another.
 ● - For example, the UN Charter mandates that states must adhere to its principles without
external interference.

5. Incorporation Theory
● - The **Incorporation Theory** asserts that International Law automatically becomes
part of Municipal Law when recognized by domestic legal frameworks.
● - Article 103 of the UN Charter stipulates that obligations under the Charter take
precedence over other international commitments.

● Judicial Considerations
● - Domestic courts may consider International treaties when interpreting national law,
particularly regarding human rights issues.

Case Studies under the ICJ

1. South West Africa Case (Ethiopia vs. South Africa)

● - Ethiopia and Liberia claimed that South Africa violated its mandate obligations.
● - The ICJ ruled against Ethiopia and Liberia, determining they lacked legitimate rights to
the claims presented.

2. Barcelona Traction Case (Belgium vs. Spain)

● - The case involved the Belgian government asserting claims for Belgian shareholders in
a Canadian company affected by actions of the Spanish government.
● - The ICJ ruled in favor of Spain, emphasizing the necessity of direct involvement and
sovereignty in international claims.

3. Rule of Law in International Law (India)

● - The concept of the Rule of Law, articulated by figures like Albert Venn Dicey,
encompasses the supremacy of law, equality before the law, and the predominance of
legal spirit.
● - This principle applies to the governance of both International and Municipal Law.
 ● Conclusion
● - Both National and International legal systems operate within their own domains but
interact in complex ways.
● - Monistic theorists argue for the supremacy of International Law, viewing Municipal
Law as subordinate and a subset of the broader international framework.
● - The dynamic relationship between these legal systems is essential for addressing global
issues effectively.

Question 2) Sources of International Law -

● Characteristics: Unlike national legal systems, there is no "Code of International Law" or

central legislative body (e.g., no Parliament).
● Decentralized Nature: International law arises from the actions of the 192 States in the
international community.
● ICJ Statute, Art. 38: Identifies five main sources of international law:

1. Treaties between States

2. Customary international law

3. General principles of law recognized by civilized nations

4. Judicial decisions (as subsidiary means)

5. Writings of highly qualified publicists

Customary International Law

● Definition: Customary law is the oldest source of international law, binding on all States
without being codified in writing.
● Elements: Requires two key elements:
● 1. **State Practice**: Widespread and consistent behavior among States.
● 2. Opinio Juris: The belief that such practice is obligatory.
 ● Examples: The rule granting immunity to visiting Heads of State illustrates both
elements.
● Persistent Objector Principle: Allows States that consistently reject a rule before its
acceptance to avoid its application.

Treaties

● - **Nature**: Treaties are agreements that create obligations for the parties involved but
do not constitute a source of law per se.
● - **Pacta Sunt Servanda**: A customary rule that mandates States honor their treaties.
● - **Codification**: Many treaties serve to codify existing customary law (e.g., Vienna
Convention on the Law of Treaties, 1969).
● - **Impact**: Treaties can influence customary law when widely accepted and practiced,
becoming part of the law even for non-signatories.

General Principles

● - **Use in International Law**: General principles recognized by civilized nations are

invoked to adopt concepts widely accepted in national systems.
● - **Application**: They provide foundational legal concepts without directly replicating
specific national laws.

Judicial Decisions

● - **Role in Law**: Judicial decisions are considered a subsidiary means of determining

rules of law.
● - **No Binding Precedent**: Unlike common law systems, past decisions do not create
binding precedent, though they inform future judgments.
● - **Influence**: The ICJ often refers to its past rulings, and decisions from national
courts can contribute to customary international law.

Writings

● - **Influence of Scholars**: Writings by international lawyers serve as persuasive guides

but do not create law. Care is needed to avoid misinterpreting isolated statements.
Other Sources

● - **UN Acts**: Acts from UN organs significantly influence international law, even if
not explicitly mentioned in Article 38.
● - **General Assembly Resolutions**: While not legally binding, resolutions can shape
customary law and influence treaty negotiations.
● - **Security Council**: Decisions under Chapter VII of the UN Charter are legally
binding and take precedence over other agreements.

A Hierarchy of Norms?

● - **Jus Cogens**: Recognized norms of such fundamental importance that no derogation

is permitted (e.g., prohibitions against genocide, and torture).
● - **Treaty vs. Customary Law**: Treaties can prevail over customary law for parties
involved, but do not affect non-signatory what are States. There is no strict hierarchy, but
certain rules are seen as superior due to their fundamental nature.

Question 3) Recognition of States -

1. Why Study Subjects of International Law?

● Understanding international law requires knowledge of who the subjects are and their
roles.
● Subjects possess rights and duties that shape interactions on the global stage.

2. Definition of International Personality

● International Personality: The capacity to bear rights and duties under international law.
● Key Elements:
1. Duties and Responsibilities: Subjects must have duties to hold corresponding
responsibilities.
2. Claiming Rights: They must be able to enforce their rights, not just be passive
beneficiaries.
3. Legal Relations: The ability to engage in contracts or legal relations with other
entities.
4. Privileges and Immunities: Subjects should enjoy certain privileges and
immunities under international law.
3. Traditional Subjects of International Law

1) Independent Sovereign States: The primary subjects with full rights and responsibilities.
2) Political Settlements: Entities like the Free City of Danzig established by treaties (e.g.,
Treaty of Versailles, 1919).
3) Condominiums: Joint sovereignty arrangements between states (e.g., Vanuatu).
4) Belligerents and Insurgents: Recognized in conflicts, with distinctions from terrorists.
5) Individuals: Acknowledged through international conventions and declarations.

4. Additional Subjects

● The Holy See: Historically held sovereign rights; its position was clarified through the
Law of Guarantee and the Lateran Treaty.
● International Organizations: Must meet specific criteria to be subjects, including:
1. Permanent Association: For common goals with distinct administrative organs.
2. Distinct Power: Authority beyond member states' sovereign powers.
3. International Competency: Ability to act at an international level.
● NGOs and Transnational Organizations: Entities like the Taliban and multinational
corporations (e.g., JP Morgan, World Bank) can be recognized as subjects if they meet
certain criteria.

Question 5) Concept of State and Recognition -

● Recognition: Often a political act rather than a legal requirement.

● Montevideo Convention Criteria for Statehood:
1. Permanent population
2. Defined territory
3. Government
4. Capacity to engage with other states

6. Recognition Articles

● Article 6: Recognition is unconditional and irrevocable.

● Article 7: Recognition can be explicit or implicit.

7. Theories of Recognition

● Constitutive Theory: A state exists only upon recognition by others.

○ Drawback: Relies too heavily on other states.
● Declaratory Theory: A state exists independently of recognition.
○ Drawback: Could lead to legitimizing unlawful rebellions.

8. Forms of Recognition

● De-Facto: Informal recognition based on actions.

● De-Jure: Formal recognition through legal frameworks.
● Premature: Recognition given before meeting essential state criteria.
 ● Collective: Recognition by groups or organizations (e.g., OIC).
● Retroactivity: Recognition can have retroactive effects from the date of acknowledgment.

9. Insurgents vs. Belligerents

● Insurgents: Internal rebellion against a government, primarily an internal matter.

● Belligerents: Engage in a state of war with defined rights and duties, primarily an
external matter.

10. De-Recognition of States

● Generally, the Montevideo Convention asserts no de-recognition, but practical instances

exist (e.g., UK recognizing Ethiopia post-Italian occupation).

11. Non-Recognition of States

● Non-recognition can lead to obligations that are not enforceable under international law.

04/10/2024 -

● Article 34 on articles of state responsibility -

- Restitution -
- No fixed limit till which restitution can be done.
- Indemnity - whenever restitution is not possible, they indemnify against losses which
means that whateve ris actual loss caused, they will indemnify for that actual cost.
- Costa Rica vs Nicargua - environment pollution case - done by nicargua - was asked to
pay compensation to costa rica.
- Fair market value of the goods harmed is seen for calculating compensation.
- Satisfaction :
- Propritonality test applies to indemnity restitution.
- Cessation and non-repetition - they ask u stop the act, the act should not be repeated.
Examples- Islands disputes
- Interest - Byaaj - If any loss has been made, u dont just pay principle amount but also
interest.
- Injured state asks for protection of their properties like embassies, assets etc.
- Treatment of alien - anywhere who is a non-citizen - aliens should also be protected who
are not citizens of theparticular state in case of riots or wrongful acts. Standard is
internationally minimum standard should be followed.

- Defences of State Responsibility :

-
- 08/10/2024
- Earliest Case of Extradition - Saavarkar

- 1911 - To be tried in india. He jumped off the ship and swam to france. French police
handed him to britishers. They reliase they have not followed extradition process. France
writes a letter to UK, saying give us savarkar back and request for extradition, then we
will send. Britishers went for arbitration. Arbitral ward was in favour of france, there was
breach of international law, proper procedure was not followed. But savarkar was not
returned to france. There was no sovereign duty on britain to return a fugitive and due to
lack customary law there was no mandate.

- Sarbjit Rick vs. Union of India -

- Mr. Sarbjit went from india to us, sells drugs and runs back to india. US demands
extradition.
- Extradition Act of 1962 says district magistrate issues documents and can give chance to
defend. Sarbjit said these documents are not proper and cant defend. Court said no it is
proper and issued extradition.
- Sarbjit appealed under section 21. HC said necessary to give proper documents. HC
didnt dismiss order. Not important.
- SC said under the Act, it is not duty fo magistrate to try the case, but to inquire the case.
- Bhavesh Jayanti Lakhani vs. State of Maharashtra - 2009 -SCC
- Mr and Mrs. Bhavesh used to live in the USA. She gets pregnant, they fight, husband
comes back in India. USA grants custody of child and issues arrest warrant against
husband.
- Mrs.Bhavesh re-marrying and came back to bangalore. Bomaby HC stayed arrest
warrant. The US issued a red-corner notice. US Court issued a interpol notice. He moved
to Supreme Court against interpol order. SC said interpol is nothing, rules of extradition
will be followed. Red Corner notice is not as serious as sovereign notice.
- Rules of municipal court will previal over interpol regulations.
- Offence should be recognized by municpal law.
- Person concerned must be liable to be arrested in India either in any law related to
extradition or otherwise.

- Manjit Singh vs. CBI -

- Majit singh gets TADA. He is extradiated from Signapore to India. There was a treaty but
no strict mechanism, no list of cases. They function on dual criminality. No similar act
was under Singapore Law.
- He was not charged under TADA but under IPC.

- Abu Salem vs. State of Maharashtra -

 - 93 serial blasts in Mumbai. Convicted and he was is portugal. Portugal and india are part
of convention on International conventions on terrorists bombings. There was no treaty.
He was extradiated to pay resepct to reciprocal relations.
- Then TADA was re-appled, filed petiiton in SC. Beach of international law. SC said not
under extradition law but under reciprocal treaty hence not applicable.

RENDITION -

- It is no compulsory to have treaty with a state. Its a bigger concept than extradition.

REFUGE/ASYLUM -

18/10/2024 -

Geneva Convention - this convention is to help, POW, sick and wounded, civilians.

- Article 2 - Application of the convention - in addition to the provisions which shall be

implemented in peacetime, not a replacing convention.
- Not only war, but also in case of armed conflict.
- Two or more of the high contracting parties even if state of war is not recognised by one
of them.
- There may be instances when only one country has declared a war and not the other one.
Eg- India and Azad Kashmir.
- Also apply to partial or total occupation of the territory of a high contracting party, even
if the said occupation meets with no armed resistance. Example - Crimea, Taliban taking
over Afghanistan.
- The powers who are parties thereto shall remain bound by it in thier mutual relations.

- Article 3 - Conflicts not of an international character

- Minimum provisions to take care of -

- Additional protocol 1,2 and 3 of the convention -

- 1 - Wars of national interest, guerilla warfare.
21/10/2024 -

- Maritime law vs. Law of the Seas

- United Nations Convention on the Law of the Sea -

23/10/2024 -

- Article 34 - Legal status of waters forming straits used for international navigation -
- Regime of passage through straits used for international navigation established in this
part shall not in other respects affect the legal status of the waters forming such straits.
- The sovereignty or jurisdiction of the states bordering the straits is exercised subject to
this part and to other rules of international law.
-
- Transit Passage (may be question on difference between transit passage and
innocent passage)
- Only available in contagious zone.
- Section 37 - Straits which are used for internal navigation between high sea/eez and
another high sea/eez.

- Article 39 - Duties of states

- Article 40 - Research and survey activities
- Article 42 -
- A.45 - Innocent Passage - what is innocent is in A.38

- Archipelagic States -
- A.47 - Archipelagic baselines

- A.48 - Measurement of the breadth of the territorial sea, the contiguous zone, the
exclusive economic zone and the contiguous zone.
- A.49 - Legal status of archipelagic waters, of the air space over archipelagic waters and
of their bed and subsoil.

—------------------------------------------------------------------------------------------------------------------
Labour Law II

09/09/2024 -

- After superannuation, in the Organized sector, the government feels that people are too
infirm to work anymore. Hence, the Provident fund system.

19/09/2024

- Some yapping is going on. Surrounded by Losers.

Mid-sem questions -

Chapter 1 - Question 1) Definitions -

1. "agent" when used in relation to an establishment, means every person, whether

appointed as such or not, who acting or purports to act on behalf of the owner, takes part
in the management, control, supervision, or direction of such establishment or part
thereof.
2. "aggregator" means a digital intermediary or a marketplace for a buyer or user of a
service to connect with the seller or the service provider. Seventh Schedule gives
classification of aggregator.
3. Appropriate Government.
4. "audio-visual production" means audio-visual produced wholly or partly in India and
includes— • (i) animation, cartoon depiction, audio-visual advertisement; • (ii) digital
production or any of the activities in respect of making thereof; and • (iii) features films,
non-feature films, television, web-based serials, talk shows, reality shows and sport
shows.
5. "Authorised Officer" means such officer of the Central Board, or as the case may be, of
the Corporation notified by the Central Government; • 1. Central Provident Fund
Commissioner • 2. Additional Provident Fund commissioner • 3. Regional Provident
Commissioner • 4. Director General of Corporation
6. “Building or other construction work" means the construction, alteration, repairs,
maintenance or demolition in relation to buildings, streets, roads, railways, tramways,
airfields, irrigation, drainage, embankment and navigation works, flood control works
(including storm water drainage works), generation, transmission and distribution of
power, water works (including channels for distribution of water), oil and gas
installations, electric lines, internet towers, wireless, radio, television, telephone,
telegraph and overseas communications, dams, canals, reservoirs, watercourses, tunnels,
bridges, viaducts, aqueducts, pipelines, towers, cooling towers, transmission towers and
such other work as may be specified in this behalf by the Central Government, by
notification, but does not include any building or other construction work which is related
to any factory or mine or any building or other construction work employing less than ten
workers in the preceding twelve months or where such work is related to own residential
purposes of an individual or group of individuals for their own residence and the total
 cost of such work does not exceed fifty lakhs rupees or such higher amount and
employing more than such number of workers as may be notified by the appropriate
Government.
7. "building worker" means a person who is employed to do any skilled, semi-skilled or
unskilled, manual, technical, or clerical work for hire or reward, whether the terms of
such employment are express or implied, in connection with any building or other
construction work, but does not include any such person who is employed mainly in a
managerial or supervisory or administrative capacity.
8. "career center" means any office (including employment exchange, place or portal)
established and maintained in the manner prescribed by the Central Government for
providing such career services (including registration, collection and furnishing of
information, either by the keeping of registers or otherwise, manually, digitally, virtually
or through any other mode) as may be prescribed by the Central Government, which may,
inter alia, relate generally or specifically to— • (i) persons who seek to employ
employees; • (ii) persons who seek employment; • (iii) occurrence of vacancies; and • (iv)
persons who seek vocational guidance and career counseling or guidance to start self-
employment;
9. "child", for the purposes of Chapter VI, includes a stillborn child
10. "completed year of service" means continuous service for twelve months
11. "confinement" means labour resulting in the issue of a living child, or labour after
twenty-six weeks of pregnancy resulting in the issue of a child whether alive or dead
12. "contract labour" means a worker who shall be deemed to be employed in or in
connection with the work of an establishment when he is hired in or in connection with
such work by or through a contractor, with or without the knowledge of the principal
employer and includes inter-State migrant worker but does not include an employee who
is regularly employed by the contractor for any activity of his establishment and his
employment is governed by mutually accepted standards of the conditions of
employment (including engagement on permanent basis), and gets periodical increment
in the pay, social security coverage and other welfare benefits in accordance with the law
for the time being in force in such employment;
13. ) "contractor", in relation to an establishment means a person, who— (i) undertakes to
produce a given result for the establishment, other than a mere supply of goods or articles
of manufacture to such establishment through contract labour; or • (ii) supplies contract
labour for any work of the establishment as mere human resource, and includes a sub-
contractor
14. "contribution" means the sum of money payable by the employer, under this Code, to the
Central Board and to the Corporation, as the case may be, and includes any amount
payable by or on behalf of the employee in accordance with the provisions of this Code.
15. "Corporation" means the Employees' State Insurance Corporation constituted under
section 5
16. ) "delivery" means the birth of a child
17. "dock work" means any work in or within the vicinity of any port in connection with, or
required for, or incidental to, the loading, unloading, movement or storage of cargoes into
or from ship or other vessel, port, dock, storage place or landing place, and includes— •
(i) work in connection with the preparation of ships or other vessels for receipt or
discharge of cargoes or leaving port; • (ii) all repairing and maintenance processes
 connected with any hold, tank structure or lifting machinery or any other storage area on
board the ship or in the docks; and • (iii) chipping, painting or cleaning of any hold, tank,
structure or lifting machinery or any other storage area in board the ship or in the docks;
18. "employment injury" means a personal injury to an employee, caused by accident or an
occupational disease, as the case may be, arising out of and in the course of his
employment,— • (i) for the purposes of Chapter IV, if the employee is an insured or
insurable employee under section 28 whether the such accident occurs or the
occupational disease is contracted within or outside the territorial limits of India; and •
(ii) for the purposes of Chapter VII, whether the such accident occurs or the occupational
disease is contracted within or outside the territorial limits of India;
19. "establishment" means— (a) a place where any industry, trade, business, manufacture or
occupation is carried on; or (b) a factory, motor transport undertaking, newspaper
establishment, audiovisual production, building and other construction work or
plantation; or (c) a mine, port or vicinity of port where dock work is carried out. •
Explanation.—For the purposes of Chapter III, where an establishment consists of
different departments or has branches, whether situate in the same place or in different
places, all such departments or branches shall be treated as parts of the same
establishment;
20. "exempted employee" for the purposes of Chapter III, means an employee to whom any
of the schemes referred to in section 15, but for the exemption granted under this Code,
would have applied and for the purposes of Chapter IV, means an employee, whose wage
is specified in the notification by the Central Government and who is not liable to pay
employee's contribution;
21. "factory" means any premises including the precincts thereof— • (a) whereon ten or more
employees are working, or were working on any day of the preceding twelve months, and
in any part of which a manufacturing process is being carried on with the aid of power, or
is ordinarily so carried on, or • (b) whereon twenty or more employees are working, or
were working on any day of the preceding twelve months, and in any part of which a
manufacturing process is being carried on without the aid of power, or is ordinarily so
carried on, but does not include a mine, or a mobile unit belonging to the Armed Forces
of the Union, railways running shed or a hotel, restaurant or eating place.
22. "family" means all or any of the following relatives of an employee or an unorganized
worker, as the case may be, namely:— • (a) a spouse; • (b) a minor legitimate or adopted
child dependent upon the employee or an unorganized worker, as the case may be; • (c) a
child who is wholly dependent on the earnings of the employee or an unorganized
worker, as the case may be, and who is— • (i) receiving education, till he attains the age
of twenty-one years; and • (ii) an unmarried daughter; • (d) a child who is infirm by
reason of any physical or mental abnormality or injury and is wholly dependent on the
earnings of the employee or an unorganized worker, as the case may be, so long as the
infirmity continues; • (e) dependent parents (including father-in-law and mother-in-law of
a woman employee), whose income from all sources does not exceed such income as
may be prescribed by the Central Government; • (f) in case the employee or an
unorganized worker, as the case may be, is unmarried and his parents are not alive, a
minor brother or sister wholly dependent upon the earnings of the Insured Person
23. “fixed-term employment" means the engagement of an employee on the basis of a
written contract of employment for a fixed period: Provided that— • (a) his hours of
 work, wages, allowances, and other benefits shall not be less than that of a permanent
employee doing the same work or work of a similar nature; and • (b) he shall be eligible
for all benefits, under any law for the time being in force, available to a permanent
employee proportionately according to the period of service rendered by him even if his
period of employment does not extend to the required qualifying period of employment;
24. "gig worker" means a person who performs work or participates in a work arrangement
and earns from such activities outside of the traditional employer-employee relationship
25. "home-based worker" means a person engaged in, the production of goods or services for
an employer in his home or other premises of his choice other than the workplace of the
employer, for remuneration, irrespective of whether or not the employer provides the
equipment, materials or other inputs.
26. "inter-State migrant worker" means a person who is employed in an establishment and
who— • (i) has been recruited directly by the employer or indirectly through contractor in
one State for employment in such establishment situated in another State; or • (ii) has
come on his own from one State and obtained employment in an establishment of another
State (hereinafter called destination State) or has subsequently changed the establishment
within the destination State, under an agreement or other arrangement for such
employment and drawing wages not exceeding eighteen thousand rupees per month or
such higher amount as may be notified by the Central Government from time to time;
27. "medical practitioner" means a person registered under any law for the time being in
force, or, any person declared by the State Government, by notification, to be qualified as
a medical practitioner for the purposes of this Code: • Provided that different class or
classes of medical practitioner having specific qualification may be notified by the
Central Government for the purposes of Chapter IV and by the appropriate Government
for other Chapters of this Code;
28. “Medical termination of pregnancy" means the termination of pregnancy permissible
under the provisions of the Medical Termination of Pregnancy Act, 1971;
29. "miscarriage" means expulsion of the contents of a pregnant uterus at any period prior to
or during the twenty-sixth week of pregnancy, but does not include any miscarriage, the
causing of which is punishable under the Indian Penal Code.
30. "National Social Security Board" means the National Social Security Board for
Unorganised Workers constituted under sub-section (1) of section 6
31. "occupational disease" means a disease specified in the Third Schedule as a disease
peculiar to the employment of the employee;
32. “Organized sector" means an enterprise which is not an unorganized sector;
33. "permanent partial disablement" means, where the disablement is of a permanent nature,
such disablement as reduces the earning capacity of an employee in every employment
which he was capable of undertaking at the time of the accident resulting in the
disablement: • Provided that every injury specified in Part II of the Fourth Schedule shall
be deemed to result in permanent partial disablement;
34. "permanent total disablement" means such disablement of a permanent nature as
incapacitates an employee for all work which he was capable of performing at the time of
the accident resulting in such disablement: • Provided that permanent total disablement
shall be deemed to result from every injury specified in Part I of the Fourth Schedule or
from any combination of injuries specified in Part II thereof where the aggregate
 percentage of the loss of earning capacity, as specified in the said Part II against those
injuries, amounts to one hundred percent.
35. "Pension Fund" means the Pension Fund established under clause (b) of sub-section (1)
of section 16
36. "Pension Scheme" means the Employees' Pension Scheme framed under clause (b) of
sub-section (1) of section 15
37. "plantation" means— (a) any land used or intended to be used for— • (i) growing tea,
coffee, rubber, cinchona, or cardamom which admeasures five hectares or more; • (ii)
growing any other plant, which admeasures five hectares or more and in which ten or
more persons are employed or were employed on any day of the preceding twelve
months, if, after obtaining the approval of the Central Government, the State
Government, by notification, so directs. • Explanation.—Where any piece of land used
for growing any plant referred to in this sub-clause admeasures less than five hectares and
is contiguous to any other piece of land not being so used, but capable of being so used,
and both such pieces of land are under the management of the same employer, then, for
the purposes of this sub-clause, the piece of land first mentioned shall be deemed to be a
plantation, if the total area of both such pieces of land admeasures five hectares or more;
• (b) any land which the State Government may, by notification, declare and which is
used or intended to be used for growing any plant referred to in sub-clause (a),
notwithstanding that it admeasures less than five hectares: • Provided that no such
declaration shall be made in respect of such land which admeasures less than five
hectares immediately before the commencement of this Code; and
38. "Recovery Officer" means any officer of the Central Government, the State Government,
the Central Board or the Corporation, who may be authorized by the Central Government
or the State Government, as the case may be, by notification, to discharge the functions
and to exercise the powers of a Recovery Officer under this Code
39. "seasonal factory " means a factory which is exclusively engaged in one or more of the
following manufacturing processes, namely, cotton ginning, cotton or jute pressing,
decortication of ground nuts, the manufacture of indigo, lac, sugar (including gur) or any
manufacturing process which is incidental to or connected with any of the aforesaid
processes and includes a factory which is engaged for a period not exceeding seven
months in a year in a manufacturing process as the Central Government may, by
notification, specify;
40. "Social Security Organization" means any of the following organisations established
under this Code, namely:— • (a) the Central Board of Trustees of Employees' Provident
Fund constituted under section 4; • (b) the Employees' State Insurance Corporation
constituted under section 5; • (c) the National Social Security Board for Unorganised
Workers constituted under section 6; • (d) the State Unorganised Workers' Social
Security Board constituted under section 6; • (e) the State Building and other
Construction Workers' Welfare Boards constituted under section 7; and • (f) any other
organisation or special purpose vehicle declared to be the social security organisation by
the Central Government;
41. "superannuation", in relation to an employee, means the attainment by the employee of
such age as is fixed in the contract or conditions of service, as the age on the attainment
of which the employee shall vacate the employment: • Provided that for the purposes of
Chapter III, the age of superannuation shall be fifty-eight years
 42. "temporary disablement" means a condition resulting from an employment injury that
requires medical treatment and renders an employee, as a result of such injury,
temporarily incapable of doing the work which he was doing prior to or at the time of the
injury
43. ) "Tribunal" means the Industrial Tribunal constituted by the appropriate Government
under section 7A of the Industrial Disputes Act, 1947;
44. ) Wages** refer to all types of payment made to an employee for their work, expressed
in money or convertible to money. This includes:
● - **Basic Pay**
● - **Dearness Allowance**
● - **Retaining Allowance** (if applicable)

Wages do not include -

● - Bonuses that aren’t part of regular pay

● - Value of housing or amenities (like water, electricity, medical services) unless specified
● - Employer contributions to pension or provident funds
● - Conveyance allowances or travel benefits
● - Payments for special expenses related to the job
● - House Rent Allowance
● - Remuneration from awards, settlements, or court orders
● - Overtime pay
● - Commissions
● - Gratuities upon termination
● - Retrenchment compensation or other retirement benefits

Additional Notes -

● - If certain payments exceed half of the total remuneration, the excess will be counted as
wages.
● - To ensure equal wages across genders, certain allowances (like travel and house rent)
will be included in wage calculations.
● - If an employee receives part of their wages in kind (non-cash), the value of that benefit
(up to 15% of total wages) is considered part of their wages.

Chapter II - SOCIAL SECURITY ORGANISATIONS

Question 2) EPF

1. Section 4 - Constitution of Board of Trustees of Employees’ Provident Fund :

**1. Establishment of the Board**- The Central Government can create a Board of Trustees for
the Employees' Provident Fund, called the Central Board, through a notification. This Board will
manage the fund as outlined in the law.
**2. Membership Composition**:

● - **Chairperson and Vice-Chairperson**: Appointed by the Central Government.

● - **Government Officials**: Up to five members from Central Government officials.
● - **State Representatives**: Up to fifteen members from specified state governments,
appointed by the Central Government.
● - **Employer Representatives**: Ten members representing employers, appointed after
consulting recognized employer organizations.
● - **Employee Representatives**: Ten members representing employees, appointed after
consulting recognized employee organizations.
● - **Central Provident Fund Commissioner**: Serves as a member by virtue of their
position.

**3. Legal Status**- The Central Board is a legal entity, able to sue and be sued, with a
perpetual existence and a common seal.

**4. Executive Committee** - The Central Government can create an Executive Committee
from Board members to help carry out its functions.

Overview of Rule 7 from the Draft of the Code on Social Security (Central) Rules, 2020

1. Composition of the Executive Committee:

The Executive Committee will consist of:

● Chairperson: Appointed by the Central Government from the Central Board members.
● Government Officials: Two members appointed from among five government officials.
● State Representatives: Three members appointed from among the fifteen state
representatives.
● Employer Representatives: Three members elected by the Central Board from employer
representatives.
● Employee Representatives: Three members elected by the Central Board from employee
representatives.
● Central Provident Fund Commissioner: Serves as a member by position.

2. Election Process for Members:

● The Chairperson of the Central Board will organize a meeting to elect employer and
employee representatives.
● Members can propose and second candidates.
● If the number of candidates does not exceed available positions, they are automatically
elected.
● If there are more candidates than positions, members will vote using ballot papers.
● Candidates with the highest votes will be declared elected.

3. Validity of Elections:
 ● Any disputes regarding the election will be referred to the Central Government for
resolution.

4. Term of Office:

● Chairperson and Trustees: Serve a term of four years.

● Executive Committee Members: Serve a term of two years.
● Members continue to hold office until their successors are appointed.
● If a member is appointed to fill a casual vacancy, they serve for the remainder of the
original term.
● A person can be appointed as a Trustee or member for a maximum of two terms (with
exceptions for certain positions).

**5. Committees** - The Central Board can set up additional committees as needed to assist in
its duties.

**6. Delegation of Powers**- The Board can delegate some of its powers to the Chairperson,
Executive Committee, or officers, under certain conditions, for efficient management.

**7. Member Terms**- The Central Government will set terms, conditions, and tenure for Board
members. Members will stay in their roles until successors are appointed, even if their term has
expired.

**8. Additional Functions**- The Central Board can also perform other functions as directed by
the Central Government.

Chapter 3 - Question Employees' State Insurance Act, 1948:

● The ESI Act is a key social security law for workers in India, providing health-related
protections such as benefits for sickness, maternity, and disability.
● Applicability: Covers establishments with 10 or more employees (20 in Maharashtra and
Chandigarh), with a wage limit of Rs. 21,000 per month.
● Coverage Areas: The ESI Scheme is implemented in 526 districts, but is not yet
operational in Arunachal Pradesh and Lakshadweep.

Overview of Section 5 - Constitution of the Employees’ State Insurance Corporation

1. Establishment of the Corporation:

● The Central Government can create the Employees' State Insurance Corporation (referred
to as "the Corporation") through a notification, effective from a specified date.

2. Composition of the Corporation: The Corporation will include the following members:

● Chairperson: Appointed by the Central Government.

● Vice-Chairperson: Appointed by the Central Government.
● Government Officials: Up to five members appointed from Central Government officials.
 ● State Representatives: One member representing each state, as prescribed by the Central
Government.
● Union Territory Representative: One member appointed to represent union territories.
● Employer Representatives: Ten members appointed in consultation with recognized
employer organizations.
● Employee Representatives: Ten members appointed in consultation with recognized
employee organizations.
● Medical Representatives: Two members from the medical profession, appointed in
consultation with recognized medical organizations.
● Members of Parliament: Three members, including two from the Lok Sabha and one
from the Rajya Sabha, elected by their respective houses.
● Director-General: Serves as a member by virtue of their position.

3. Legal Status:

● The Corporation is a legal entity (body corporate) with perpetual existence, capable of
suing and being sued.

4. Standing Committee:

● The Central Government can create a Standing Committee from among the Corporation's
members to oversee operations.

5. Functions of the Standing Committee:

● The Standing Committee will manage the Corporation's affairs and exercise its powers as
directed by the Central Government.
● It will present cases and matters for the Corporation's consideration and may also submit
additional matters for decision.

Simplified Overview of Rule 8(4) - Social Security Central Rule 2020

1. Constitution of the Standing Committee:

The Standing Committee of the Employees' State Insurance Corporation will be formed with the
following members:

● Chairperson: Appointed by the Central Government.

● Government Appointees: Three members of the Corporation appointed by the Central
Government.
● State Representatives: Three members representing specific state governments, as
specified by the Central Government in notifications.
● Elected Members: Eight members elected by the Corporation:
○ Three representing employers.
○ Three representing employees.
○ One representing the medical profession.
○ One elected by Parliament.
● Director-General: Serves as a member by virtue of their position.
2. Medical Benefit Committee:

● The Central Government may establish a Medical Benefit Committee to assist the
Corporation and Standing Committee with medical benefits administration.
● This committee will perform duties and exercise powers as prescribed by the Central
Government.

3. Additional Committees:

● The Corporation can create additional committees to help with its functions as needed.

4. Terms and Conditions:

● The Central Government will set the terms, conditions, and tenure for members of the
Corporation and the Standing Committee.
● Members will continue to serve until their successors are appointed, even if their term has
expired.

Question 4) Medical Benefit Council -

Simplified Overview of the Medical Benefit Council and Related Rules

1. Medical Benefit Council:

● The Medical Benefit Council is an advisory body that helps manage medical benefits
under the Employees' State Insurance (ESI) Scheme.
● It is formed by the Central Government for a specific term and includes:
○ Director General, Central Health Services (ex-officio Chair).
○ Deputy Director General/Addl. Director General, Central Health Services.
○ One member representing each State Government.
○ Three members each representing employees, employers, and the medical
profession.
○ Medical Commissioner of the ESI Corporation (ex-officio member).

2. Powers and Duties of the Medical Benefit Committee:

The committee has several key responsibilities:

● Advisory Role: It advises the Corporation on how to set up and manage Local
Committees for medical benefit administration.
● Recommendations: It makes recommendations on:
○ The scale and nature of medical benefits at hospitals and clinics, including
necessary medicines, staff, and equipment.
○ The medical formulary for benefits provided under the Code.
○ Procedures for medical certification and related records.
○ Health improvement measures and rehabilitation for insured persons who are
disabled or injured.
 ● Professional Conduct: It advises on matters related to the professional behavior of
medical practitioners providing these benefits.

3. Term of Office for Members of the Corporation:

● Members of the Corporation, except for specific officials, serve a term of four years,
starting from when their appointment is officially notified.
● Members continue to serve beyond this period until their successors are appointed.
● Non-official members can serve a maximum of two terms.
● Certain officials (as specified in the rules) hold office at the discretion of the Central
Government.

Question 5) National Social Security Board and State Unorganized Workers’ Board

National Social Security Board and State Unorganized Workers’ Board

1. National Social Security Board

● Establishment: The Central Government will create a National Social Security Board for
unorganized workers.
● Membership:
○ Chairperson: Union Minister for Labour and Employment.
○ Vice-Chairperson: Secretary, Ministry of Labour and Employment.
○ Forty nominated members:
■ 7 representing unorganized workers.
■ 7 representing employers.
■ 7 from civil society.
■ 2 members from the Lok Sabha, 1 from the Rajya Sabha.
■ 10 from relevant Central Government Ministries.
■ 5 from State Governments.
■ 1 representing Union territories.
○ Member-Secretary: Director-General of Labour Welfare (ex officio).
● Membership Criteria: Members, except the Chairperson, should be eminent in fields like
labour welfare, management, finance, and law, with representation from marginalized
groups.
● Term: Members serve for three years.
● Meetings: The Board will meet at least three times a year.
● Functions:
○ Recommend schemes for unorganized, gig, and platform workers.
○ Advise on administrative matters.
○ Monitor social welfare schemes.
○ Review state-level record-keeping and expenditure.
● Advisory Committees: The Central Government can form committees for additional
advice on unorganized worker matters.
2. State Unorganized Workers’ Board

● Establishment: Each State Government will form a State Unorganized Workers' Social
Security Board.
● Membership:
○ Chairperson: Minister of Labour and Employment of the State (ex officio).
○ Vice-Chairperson: Principal Secretary or Secretary (Labour).
○ One member from the Central Government.
○ Thirty-one nominated members:
■ 7 representing unorganized workers.
■ 7 representing employers.
■ 2 from the State Legislative Assembly.
■ 5 from civil society.
■ 10 from relevant State Departments.
○ Member-Secretary: As notified by the State Government.
● Membership Criteria: Similar to the National Board, emphasizing expertise and
representation from marginalized groups.
● Term: Members serve for three years.
● Meetings: The Board will meet at least once a quarter.
● Functions:
○ Recommend schemes for unorganized workers.
○ Advise on administrative matters.
○ Monitor state welfare schemes.
○ Review district-level record-keeping and registration progress.
● Advisory Committees: State Governments can establish committees for guidance on
unorganized worker issues.

Question 6) Section 9 - Disqualification and removal of a member of any Social Security

Organization

1. Disqualifications for Membership

A person cannot be a member of a Social Security Organization or its committees if they:

● (a) Are or have been declared insolvent.

● (b) Are deemed to be of unsound mind.
● (c) Have been convicted of a morally reprehensible offense.
● (d) Are an employer who has failed to pay dues under this Code.
● (e) Are a member of Parliament or a State Legislative Assembly, and cease to be so.
● (f) Hold positions such as:
○ (i) Minister of Central or State Government.
○ (ii) Speaker or Deputy Speaker of the House of the People or State Assembly.
○ (iii) Deputy Chairman of the Council of States.

Note: For disqualificatio

ns under clause (d), the relevant government will have the final say.

2. Removal of Members

The Central or State Government can remove a member from a Social Security Organization if
they:

● (a) Meet any of the disqualifications listed in subsection (1).

● (b) Are absent without permission for more than three consecutive meetings.
● (c) Misuse their position, making their continued membership detrimental to public
interest.

Conditions for Removal:

● Members must be given a chance to explain why they should not be removed.

3. Resignation

Members can resign by submitting a written notice to the appointing government. Upon
acceptance, their position becomes vacant.

4. Removal by Opinion

The government can remove a member if they:

● (a) No longer represent the interests of employers, employees, or unorganized workers

adequately.
● (b) Are found lacking expertise in their declared area.
● (c) Cannot continue their role due to changing government needs.

Conditions for Removal:

● Members must be given a chance to explain their position before removal.

5. Disclosure of Interests

If a member is a director of a company with a financial interest in a matter before the

organization:

● They must disclose this interest as soon as they become aware.

● The disclosure will be recorded, and they must refrain from participating in related
discussions or decisions.

Section 9: Procedure for Transaction of Business in Social Security Organizations

1. Meeting Procedures

● A Social Security Organization or its committees will meet at intervals determined by the
Central Government.
 ● Rule 12 outlines the following:
○ (a) Meetings are to be held at times and places decided by the Chairperson.
○ (b) The Central Board and Corporation will meet at least twice a year.
○ (c) The Executive Committee of the Central Board and the Standing Committee
of the Corporation will meet at least four times a year.
○ (d) The National Social Security Board will meet at least thrice a year.

2. Authentication of Decisions

● Orders and decisions must be authenticated by specified officials, such as the Central
Provident Fund Commissioner or the Director-General.

3. Validity of Actions

● Actions taken by the organization cannot be questioned due to vacancies or constitutional

defects.

4. Fees and Allowances

● Members of the Social Security Organization are entitled to fees and allowances as
prescribed by the Central Government.

5. Notice of Meetings

● (a) A minimum of 15 days' notice is required for ordinary meetings, detailing the agenda
and business to be transacted, which must be sent to all members.
● (b) For emergency meetings, reasonable notice is at the Chairperson's discretion.
● (c) No other business may be discussed unless permitted by the Chairperson.

6. Meeting Leadership

● The Chairperson presides over meetings; if absent, the Vice-Chairperson or a member

nominated by the Chairperson will take over.

Section 10: Executive Heads of Central Board and Corporation

● The Central Provident Fund Commissioner and Director-General are full-time officers of
their respective bodies, prohibited from engaging in unrelated work without prior
approval from the Central Government.

Section 11: Supersession of Organizations

1. Grounds for Supersession

 ● The Central or State Government can supersede any Board or Corporation if:
○ They are unable to perform functions.
○ They are persistently delaying their duties.
○ They have exceeded or abused their powers.

2. Process of Supersession

● Prior to supersession, the organization must be given an opportunity to respond to the

proposed action.

3. Interim Arrangements

● The Government will establish alternative arrangements for administering relevant

provisions until reconstitution occurs.

4. Reporting Requirements

● The Government must report any supersession actions and their context to Parliament or
the State Legislature within three months.

Section 12: State and Regional Boards

1. Constitution of State Boards

● The Central Government may establish a State Board after consulting the relevant State
Government.

2. Regional Boards and Local Committees

● The Corporation can appoint Regional Boards and local committees to perform
designated functions and exercise specific powers.

Section 13: Additional Functions of Social Security Organizations

1. Assignment of Additional Functions

● The Central Government may assign additional duties to a Social Security Organization,
including administering other Acts or schemes related to social security.

2. Expenditure and Approvals

● Any expenses incurred in carrying out these functions will be covered by the Central
Government, subject to prior approval.
This section ensures that Social Security Organizations operate efficiently, transparently, and
within their designated powers, while also allowing for the addition of new responsibilities as
needed.

CHAPTER III - EMPLOYEES’ PROVIDENT FUND

Question 1)

EPFO Overview

The Employees' Provident Fund Organisation (EPFO) is one of the largest social security
organizations globally, managing approximately 28.77 crore accounts as of the 2022-23 Annual
Report. It was established on November 15, 1951, through the Employees' Provident Funds
Ordinance and later formalized by the Employees' Provident Funds Act, 1952.

Employees’ Deposit Linked Insurance (EDLI) Scheme, 1976

The Employees’ Pension Scheme (EPS) was introduced in 1995 to provide various pension
benefits to employees in establishments covered by the EPF Act.

Section 4: Board of Trustees

4. (1)

The Central Government can form a Board of Trustees, known as the Central Board, for
managing the provident fund. It consists of:

● A Chairperson and Vice-Chairperson (appointed by the Central Government).

● Up to five officials from the Central Government.
● Up to fifteen representatives from State Governments.
● Ten representatives from employers (appointed after consultation).
● Ten representatives from employees (appointed after consultation).
● The Central Provident Fund Commissioner (ex officio).

4. (2)

The Central Board is a corporate body with perpetual succession and can sue or be sued.

4. (3) - (7)

The Central Government can create an Executive Committee to assist the Central Board and
delegate functions. The Board may also perform additional functions as prescribed by the
Government.

Section 14: Appointment of Officers

14. (1) - (4)

The Central Government appoints a Central Provident Fund Commissioner as the Chief
Executive Officer and other key officers to help manage the EPFO.

14. (5) - (7)

Appointments for certain positions require consultation with the Union Public Service
Commission, while the Central Government specifies recruitment methods and salary conditions
for officers.

Section 15: Schemes

15. (1)

The Central Government can create several schemes:

● Employees' Provident Fund Scheme: For establishing provident funds for employees.
● Employees' Pension Scheme: For providing various pension benefits.
● Employees' Deposit Linked Insurance Scheme: For life insurance benefits.
● Additional schemes for self-employed workers and modifications to existing schemes.

15. (2) - (3)

These schemes may cover specific matters and can take effect on specified dates, either
prospectively or retrospectively.

The Fifth Schedule

Part A: Provisions for the Provident Fund Scheme

The Provident Fund Scheme may include provisions on the following matters:

1. Eligibility and Exemptions: Guidelines on who must join the Fund and conditions for
exemptions.
2. Contributions: Details on the timing and method for making contributions.
3. Recovery of Contributions: How employee contributions may be collected by
contractors.
4. Committees: Establishment of committees to assist the board of trustees.
5. Account Management: Procedures for maintaining accounts and investing Fund money as
directed by the Central Government.
6. Administration Costs: Employer contributions necessary for Fund administration.
7. Withdrawals: Conditions for allowing withdrawals from the Fund.
8. Interest Rates: The rate of interest payable to members.
9. Employee Information: The format for employees to provide personal details.
10. Nomination: Process for nominating a person to receive benefits.
11. Records Maintenance: Registers and records that employers must maintain and submit.
 12. Identity Cards: Design specifications for identity cards or tokens.
13. Fees: Any fees to be charged for specific purposes.
14. Defaults: Provisions regarding contraventions or defaults.

Part B: Provisions for the Pension Scheme

The Pension Scheme may address the following matters:

1. Applicable Employees: Classes of employees eligible for the Pension Scheme.

2. Employer Contributions: Portion of employer contributions to the Provident Fund that
will be allocated to the Pension Scheme.
3. Protection of Interests: Measures to protect employees’ interests in case of employer
default on contributions.
4. Pension Fund Management: Accounting and investment methods for the Pension Fund as
overseen by the Central Government.
5. Employee Information: Required forms for employees to provide details about
themselves and their family members.
6. Records Maintenance: Forms, registers, and records related to employees.
7. Pension Disbursement: Methods for disbursing pensions.
8. Administrative Expenses: How administrative costs for the Pension Scheme will be
funded from Pension Fund income.

Part C: Provisions for the Employees' Deposit-Linked Insurance Scheme

The Employees' Deposit-Linked Insurance Scheme may include provisions on the following
matters:

1. Coverage: Identification of employees or classes of employees covered by the Insurance

Scheme.
2. Account Management: Guidelines for maintaining the accounts of the Insurance Fund.
3. Employee Information: The format for employees to provide personal details.
4. Nomination: Process for nominating a person to receive the insurance amount.
5. Insurance Benefits: Scales of insurance benefits and conditions for granting these
benefits.
6. Payment Procedures: Manner in which the insurance amount will be paid.

Section 16: Employees' Provident Fund

(1) Provident Fund Scheme

● The Central Government may establish a Provident Fund where:

○ Employer Contribution: 10% of wages for each employee.
○ Employee Contribution: Equal to the employer's contribution, with the option to
contribute more, subject to employer limits.
● For specific establishments, this may be modified to 12% based on inquiries.
 ● The Central Government may also specify employee contribution rates for certain classes
of employees.

Withdrawal Rules

● Withdrawal Timing: EPF can only be withdrawn at retirement or during unemployment.

● Withdrawal Amounts:
○ 75% of the EPF corpus can be withdrawn after one month of unemployment.
○ The remaining 25% can be transferred to a new EPF account once re-employed.

Case Law

● Regional Provident Fund Commissioner v. ABS Spinning Orissa Ltd (2009): The holding
company is not liable for dues under the scheme for its subsidiary, as they are separate
legal entities.

(b) Pension Scheme

● The Central Government will establish a Pension Fund into which contributions will be
made for each employee under the Pension Scheme:
○ Up to 8.33% of wages from the employer's contribution.
○ Additional sums may be specified by the government.

Features of the EPS

● Guaranteed Returns: The EPS is risk-free, providing fixed returns.

● Mandatory Enrollment: Employees earning ₹15,000 or less per month must enroll.
● Automatic Enrollment: Employees in the EPF scheme are automatically enrolled in EPS.
● Minimum Pension: ₹1,000 is the minimum pension amount.

(c) Insurance Scheme

● The employer will contribute to the Deposit-Linked Insurance Fund, up to 1% of wages,

plus additional amounts as determined by the Central Government to cover
administrative expenses.

Fund Management

● The Provident Fund, Pension Fund, and Insurance Fund will be managed by the Central
Board as specified in the respective schemes.

Salient Features of EDLI

● Employer Contribution: No deductions from employee salaries; the employer covers the
entire contribution.
 ● Claim Amount: 35 times the average monthly salary (up to a maximum of ₹7 lakh).
● Average Salary Calculation: Based on Basic + Dearness Allowance.
● Bonus: A bonus of ₹1.75 lakh is also applicable.
● Opt-Out Option: Employers can opt out if they provide a higher-paying life insurance
scheme.

EPFO Contribution Structure

● EPF:
○ Employee: 12% of Basic + DA
○ Employer: 3.67% of Basic + DA
● EPS:
○ Employee: N/A
○ Employer: 8.33% of Basic + DA
● EDLI:
○ Employee: N/A
○ Employer: 0.5% of Basic + DA (capped at ₹75)

Summary of Sections 17-23 and Key Judgments

Section 17: Contributions for Employees and Contractors

1. Employer Contributions:
○ Employers can recover contributions (both theirs and the employees') from
contractors through deductions or as a debt.
2. Contractor Deductions:
○ Contractors may deduct employees' contributions from their wages but cannot
deduct employer contributions or administrative charges from employee wages.

Section 19: Priority of Payment of Contributions

● Contributions due under this Chapter are prioritized over other debts, as per the
Insolvency and Bankruptcy Code, 2016.

Case Law:

● Employees Provident Fund Commissioner v. O.L. of Esskay Pharmaceuticals Ltd (2012):

○ The Supreme Court ruled that PF dues have priority over secured creditors' debts,
making them the first charge on establishment assets.

Section 20: Exemptions from Application

1. Exempt Establishments:
○ Co-operative societies with fewer than 50 employees.
 ○ Establishments under government control providing similar benefits through other
schemes.
○ Employees receiving Provident Fund benefits under different laws prior to the
new Code.
2. Government Discretion:
○ The Central Government can exempt certain establishments from this Chapter
based on financial assessments.

Case Law:

● Mandovi Pellets Ltd v. Union of India (1989):

○ The court ruled that a plant shut down for three years due to power shortages was
not subject to the act.
● Regional Provident Commissioner v. Sanatan Dharam Girls School (2007):
○ Institutions under specific state legislation were deemed exempt from EPF
provisions.

Section 21: Maintaining Provident Fund Accounts

1. Authorization:
○ Employers of establishments with 100 or more employees may apply to maintain
their own provident fund accounts.
○ No prior defaults in contribution payments are allowed for authorization.
2. Compliance:
○ Authorized employers must maintain accounts, submit returns, and comply with
other specified conditions.
3. Cancellation of Authorization:
○ The Central Government can cancel authorization if compliance fails, providing a
chance for the employer to respond.

Section 22: Transfer of Accounts

● When an employee changes jobs, their provident fund or pension account balances will
be transferred according to the Provident Fund or Pension Scheme.

EPF Transfer Requirements:

● Revised Form 13
● Valid ID proof
● Current PF account details
● Active UAN and employer-approved e-KYC

Section 23: Appeals to Tribunal

1. Filing Appeals:
○ Appeals against authority decisions on dues or damages can be made to the
Central Government's Tribunal.
 ○ Employers must deposit 25% of the determined dues before appeals are
entertained.
2. Timeline:
○ The Tribunal aims to resolve appeals within one year.

Appeal Documentation:

● Orders being appealed, supporting documents, and an index must be submitted.

● Legal representatives must provide proper authorization.

Landmark Judgments

● APFC v. M/s G4S Security Services (2013):

○ Basic wage under EPF cannot be equated with minimum wage; only basic salary
is considered for EPF dues.
● Director, Centre for DNA Fingerprinting v. Asst. Provident Fund Commissioner (2022):
○ Emphasized adherence to procedural guidelines in EPF proceedings.
● Regional Provident Fund Commissioner (II) West Bengal v. Vivekananda Vidamandir
(2011):
○ The court ruled that allowances universally paid to all employees are part of basic
wages for EPF calculations.
● Civicon Engineering Contracting v. Central Board of Trustees:
○ Orders from various authorities regarding provident fund disputes must be
accessible to the public.
● Marathwada Gramin Bank v. Management (2011):
○ The bank is required to pay statutory provident fund contributions, regardless of
any additional trust contributions made.
● Loyal Textile Mills v. Regional Provident Fund Commissioner (2020):
○ Established that mens rea (intent) is necessary for levying damages under Section
14B of the EPF Act.

This summary encapsulates key points from Sections 17-23 along with significant case law
relevant to the Employees' Provident Fund and associated regulations.
Cyber Law

06/09/2024 -

1. IT Act -
- Section 43(b)

Mid-sem crucial points - Electronic governance, jurisdiction, public infrastructures, some

principles

Cloud Computing -

1. It can run from galaxy of computers connected through real time communication network
such as internet.
2. It is a synonym for distributed computing over a network.
3. So u need only an internet connection, no accessory, no apps, no updates, no applications,
no suits.

Types of cloud service -

- Infrastructure service - servers, operating systems etc are rented.

Corporate Governance

03/09/2024 -

Narayan Murthy Report

Risk Management Systems -

- What are the types of risks faced by the business?

- What are ‘risks’ and how to ‘mitigate’ them?
- Risk cannot be eliminated it can only be mitigated

Code of Conduct -

- Legal/ Non-Legal (ethical) compliances.

- Shows an internal picture and shows the approach of the company towards the outside
world.
- Evaluation is also a part of Code of Conduct.

Nominee Directors -

Non-Mandatory Recommendations -
 1. Qualified and Unqualified Reports/Opinion - Recommendation was - reporting should
always be as it is.
2. Training of Board members.
3. Evaluation of performance of board members.
4. Whistle blower policy.
5. MCA set up NFCG - PPP Model - Objectives for NFCG - Capacity building, research
and scholarship, culture of good governance, create framework of best practices.

JJ Irani Committee -

1. Number of directors - Term and Age

2. Independent director
3. Maximum number of Directorship hold by individual
4. Remuneration policy
5. Sitting Fee structure
6. Stakeholders Relationship committee
7. LODR (Clause 49 of Listing Agreement)
8. Voluntary guidelines on Corporate Governance

04/09/2024 -

Amendment of Companies Act 2013

1. More accountability for the KMPs, Directors, Secretary, and Auditors.

2. Better governance and disclosures.
3. Mandatory for companies under a certain threshold to have CSR.
4. CSR Committee.
5. Non-compliance with the CSR rule.

Uday Kotak Committee on Corporate Governance (2017) -

10/09/2024 -

1. Cadbury Committee Recommendations on Corporate Governance (1991)

11/09/2024 -

1. Mid-sem syllabus - Unit 1 and Unit 2 - 2*10 marks. Answer the question in parts.

12/09/2024 -

1. How does Corporate Governance impact the price of a product?

- No answer.
2. Box-ticking method - what is the practical implication of this method? - Not every
country may be practically following it. However, some companies do that genuinely.
3. Hampel Report -
4. Turnbull Report -
- Internal Control: Guidance for Directors on the Combined Code (1999) -

13/09/2024 -

5. Myner’s review of Institutional Investment - (2001)

20/09/2024 -

Mid-sem questions -

Question 1) Models of Corporate Governance -

1. Single Tier Model / Shareholders Model / Anglo-Saxon Model:

- Characteristics:
● - Single board of directors
● - Focus on shareholder interests
● - Separation of CEO and Chairman roles
● - Independent directors
- Advantages:
● - Quick decision-making
● - Clear accountability
 - Disadvantages:
● - Potential for short-term focus
● - May neglect other stakeholders

2. Two Tier Model / German Model / European Model:

- Characteristics:
● - Two separate boards: Supervisory Board and Management Board
● - Employee representation on Supervisory Board
● - Focus on stakeholder interests
- Advantages:
● - Better stakeholder representation
● - Improved oversight
- Disadvantages:
● - Slower decision-making
● - Potential conflicts between boards

3. Japanese Model:
- Characteristics:
● - Keiretsu system (interlocking business relationships)
● - Main bank system
● - Lifetime employment
● - Focus on long-term relationships
- Advantages:
● - Long-term stability
● - Strong business networks
- Disadvantages:
● - Less flexibility
● - Potential for insider dominance

4. Indian Model:
● - Characteristics:
● - Mix of Anglo-Saxon and German models
● - Family-owned businesses common
● - Government involvement in some sectors
● - Evolving regulatory framework
- Advantages:
● - Adaptability to local conditions
● - Family businesses can provide stability
- Disadvantages:
● - Potential for family dominance
 ● - Challenges in implementing best practices

Each model has its own unique features, reflecting different cultural, legal, and economic
contexts. The effectiveness of each model depends on the specific environment in which it
operates.

Question 2) Theories of Corporate Governance -

1. Agency Theory:
Explanation: This theory focuses on the relationship between principals (shareholders) and
agents (managers). It assumes that managers may act in their own self-interest rather than in the
best interests of shareholders.

Example: The Enron scandal in 2001 is a classic example of agency theory problems. Executives
at Enron acted in their own self-interest by hiding debt and inflating profits, ultimately leading to
the company's collapse and significant losses for shareholders.

Application: To address agency problems, companies implement governance mechanisms such

as:
● - Independent boards of directors to monitor management
● - Performance-based compensation to align manager and shareholder interests
● - Regular audits and financial reporting requirements

2. Stakeholder Theory:

Explanation: This theory argues that companies should consider the interests of all stakeholders,
not just shareholders. Stakeholders include employees, customers, suppliers, local communities,
and the environment.

Example: Patagonia, the outdoor clothing company, exemplifies stakeholder theory in action.
They prioritize environmental sustainability, fair labor practices, and community involvement
alongside profitability.

Application: Companies applying stakeholder theory might:

● - Implement corporate social responsibility (CSR) programs
● - Include stakeholder representatives on advisory boards
● - Report on environmental and social impacts alongside financial results

3. Resource Dependency Theory:

Explanation: This theory views the board of directors as a resource that can help the company
acquire critical resources and information from the external environment.

Example: When Facebook (now Meta) appointed Sheryl Sandberg to its board, it gained not just
her expertise but also her connections in the tech industry and government circles.

Application: Companies might:

● - Appoint directors with diverse backgrounds and connections
● - Form strategic partnerships or alliances
● - Engage in interlocking directorates (where directors serve on multiple boards)

4. Stewardship Theory:

Explanation: This theory posits that managers are essentially good stewards of corporate assets
and will act in the best interests of shareholders without the need for strict oversight.

Example: Companies like Berkshire Hathaway under Warren Buffett's leadership exemplify
stewardship theory. Buffett is known for his long-term focus and alignment with shareholder
interests.

Application: Governance practices might include:

● - Combining the CEO and Chairman roles
● - Providing managers with more autonomy
● - Focusing on long-term performance metrics rather than short-term results

5. Social Contract Theory:

Explanation: This theory suggests that businesses have an implicit social contract with society
and must operate in a way that benefits society as a whole.

Example: The Body Shop, founded by Anita Roddick, built its business model around ethical
sourcing, opposition to animal testing, and support for social causes, reflecting a strong sense of
social contract.

Application: Companies might:

● - Engage in philanthropic activities
● - Ensure ethical supply chain practices
● - Prioritize sustainable business practices
6. Legitimacy Theory:

Explanation: This theory proposes that companies need to operate within the bounds of what
society deems acceptable to maintain their legitimacy and "license to operate."

Example: After the Deepwater Horizon oil spill, BP had to work hard to regain its legitimacy.
This included cleanup efforts, compensation payments, and changes to its safety procedures.

Application: Companies might:

● - Engage in transparent reporting practices
● - Respond quickly to public concerns or controversies
● - Align business practices with societal expectations

7. Political Theory:

Explanation: This theory recognizes the influence of political factors on corporate governance,
including how political decisions and connections can shape governance practices.

Example: The varying corporate governance practices between countries (e.g., the stakeholder-
focused approach in Germany versus the shareholder-centric model in the US) reflect different
political and legal environments.

Application: Governance practices might include:

● - Lobbying activities
● - Appointing politically connected individuals to boards
● - Adapting governance practices to align with local political expectations in different
countries

In practice, effective corporate governance often involves balancing insights from multiple
theories. For instance, a company might:

- Have a strong independent board to address agency concerns

- Implement stakeholder engagement practices
- Appoint directors who bring valuable resources and connections
- Foster a culture of stewardship among executives
- Maintain legitimacy through ethical practices and transparency
- Adapt its approach based on the political environment in different markets
This multi-faceted approach recognizes that corporate governance is complex and that different
theoretical perspectives can provide valuable insights for different aspects of governance.

Question 3) Characteristics of Corporate Governance -

1. Accountability: Clear responsibilities and accountability structures for management and

the board.
2. Transparency: Openness in communication and disclosure of information to
stakeholders.
3. Fairness: Equitable treatment of all shareholders, including minority and foreign
investors.
4. Responsibility: Adherence to ethical standards and legal compliance in decision-making
processes.
5. Independence: A board comprised of independent directors to reduce conflicts of
interest.
6. Risk Management: Effective systems to identify, assess, and manage risks.
7. Stakeholder Engagement: Consideration of the interests of all stakeholders, not just
shareholders.
8. Strategic Guidance: The board provides direction and oversight for the company’s
strategic goals.
9. Performance Monitoring: Regular assessment of organizational performance against
strategic objectives.
10. Diversity: Inclusion of diverse perspectives in the boardroom and leadership teams.
11. Succession Planning: Established processes for leadership development and succession.
12. Compliance: Adherence to laws, regulations, and industry standards.
13. Ethical Culture: Promotion of an organizational culture that prioritizes integrity and
ethical behavior.
14. Board Committees: Use of specialized committees (e.g., audit, compensation,
nomination) for focused oversight.
15. Continuous Improvement: Commitment to evolving governance practices in response
to changing conditions and stakeholder expectations.

Question 4) Evolution of Corporate Governance measures in India -

1. Evolution of Corporate Governance in India:

● Ancient Indian Concepts: The concept of good governance in India dates back to the
third century B.C., with Chanakya's fourfold duties of a king, which are comparable to
modern principles of protecting and enhancing shareholder value.
● Pre-1990s: Corporate governance wasn't a priority for Indian companies until the early
1990s.
● Economic Reforms (1991): The fiscal crisis and the resulting reforms initiated
liberalization, marking the beginning of improvements in governance standards.
 ● 1999-2003 Reforms: The Companies Act was amended multiple times to improve
corporate governance, followed by initiatives through SEBI and the Ministry of
Corporate Affairs.

Major Milestones in Reform:

● CII Task Force (1998): Developed the “Desirable Corporate Governance” code,
recommending reduced government stake in companies.
● Kumar Mangalam Birla Committee (1999): SEBI accepted its recommendations,
integrating them into Clause 49 of the Listing Agreement, promoting higher governance
standards.
● Naresh Chandra Committee (2002): Focused on auditor-client relationships and the
role of independent directors.
● Narayana Murthy Committee (2002): Reviewed the corporate governance code for
listed companies, introducing new norms on audit committees, risk management, and
independent directors.

2. Corporate Governance Framework:

● Clause 49 (2005): SEBI's Clause 49 of the Listing Agreement set out requirements
for board independence, audit committees, and financial disclosures.
● Companies Act, 2013: Introduced provisions for board structure, independent
directors, related party transactions, corporate social responsibility (CSR), and
transparency in company operations.

3. Challenges in Corporate Governance:

● Ownership Concentration: In India, there is high ownership concentration, often

with families controlling publicly traded companies, leading to potential conflicts of
interest.
● Ethical Dilemmas: Corporate governance often faces challenges where actions may
be legal but considered unethical.
● Lack of Transparency: Corrupt practices and inadequate transparency remain
significant issues, particularly in the Indian context.
● Regulatory Compliance: While India has strong governance laws, enforcement and
implementation are often lacking.
● Cultural Mindset: The mindset of people and the organizational culture needs to
evolve to truly embrace the spirit of corporate governance.

4. Imperatives for Strong Corporate Governance:

● Ethical Conduct: Governance must be based on ethical business practices, which are
crucial for sustaining stakeholder trust and long-term success.
 ● Board Accountability: Senior management and boards of directors need to
demonstrate ethical leadership by "walking the talk," as credibility is essential for
organizational morale.
● Global Competition: Indian corporations must adhere to international governance
standards to access global capital markets and attract top talent.
● Technology and Labor Mobility: Companies face challenges due to rapid
globalization, where capital, technology, and labor move across borders, creating a
complex governance landscape.

5. Recommendations and Suggestions:

1. Value-based Corporate Culture: Organizations should prioritize ethics and values

to ensure sustainable long-term success.
2. Holistic Management View: Adopting a broader, godly view of management helps
foster qualities like tolerance and empathy within an organization.
3. Improved Transparency: Disclosure of timely, accurate financial information is
essential for maintaining stakeholder trust.
4. Human Resource Focus: A robust HR management system is critical to ensuring
that employees are treated with respect and are motivated to contribute to the
company’s success.
5. Innovation: Corporations must embrace innovation in products and services, as it
plays a crucial role in governance.
6. Judicial Reforms: Fast and cost-effective dispute resolution is necessary to support a
good governance structure in a liberalized economy.
7. Learning from Failures: Corporate bodies should learn from internal and external
failures and adopt strategies for continuous improvement.
8. Whistleblower Policies: Strong codes of conduct and whistleblower policies should
be implemented to ensure ethical practices.

01/10/2024 -

1. Questions for the nomination committee -

2. Questions for audit committee -
3. For remuneration committee -
4. For risk committee -
5. For sustainability committee -
6. For Risk Governance

● Comparison US vs. UK -
● US is comply, no chance to explain
● UK is comply or explain
 ● India is same as UK

● US and UK are different in these ways -

- US has few acts and reports, UK has more
- US focuses on shareholders wealth, UK is more diverse
● Australia - no direct question
- Council formed in 2002
- If not, why not. Same as comply or explain
- Principle 1 - lay solid foundation for management and oversight - companies
should establish and disclose the respective roles and responsibilities of Board
and Management.
- Principle 2 -
- Principle 3 - Promote ethical and responsible decision-making - Companies
should actively promote ethical and responsible decision making.
- Principle 4 - Safeguard integrity in financial reporting
- Principle 5 - Make timely and balanced disclosures
- Principle 6 - Respect the rights of shareholders
- Principle 7 - recognize and manage risk

● Germany - No direct question - No need to remember foreign principles, only remember

Indian requirements.
- Key Principles - 1,2,3,4,5,6,7,8,9,10,11,12,13,14,15,16, 18,19,20,21,22,23,24,25.
-

03/10/2024 -

● OECD -
- OEEC earlier - administer the US -financed Marshall Plan for the reconstruction
of a continent ravaged by war.
- By making individual governments recognise the interpdependance of their
economics.
- These are certain principals that signatories are expected to follow.
- Council, Committees and Secretariat constitute Policy makers and policy shapers
- Functions

- G20/OECD - Principles of Corporate Governance - 1999/2004/2014-15.

- Ensure the basis of an effective corporate governance framework
- Rights and equitable treatment of shareholders
- Insitutional investors, stock markets and other intermediaries
- Disclosure and Transperancy
 - Key disclosures - financials, company objectives, share ownership and rights,
remuneration policy, risk factors, rpt, issues specific to stakeholders, governance
structures.
- Responsibilities of the board

UNIT - 4

Internal Control -

- Internal control = IC over financial reporting + Operational control reporting + Fraud

prevention reporting.
- Internal controls are of three categories -
a) Preventive
b) Detective
c) Corrective
- Necessity of Internal Controls
- Board - 5 ways to control
a) Control environemnt
b)

04/20/2024 -

1) How is risk score calculated?

2) Green and Red risk
3)

TABLE - ACTIVITY
Operation Risks Name

LEGAL IPR Aiman

ISI Standard

Licensing

Grivience Redressal

R&D Envionrmental concerns Madhav

 Proto-typing

HR Training

Recruiting

Retention

08/10/2024 -

1. Components of a risk mitigation strategy -

- Monitoring
- Communication
- Planning
- Reporting

- Listed companies

- All companies

COSO ERM Framework

16/10/2024 -

Principles of responsible business and strategies -

1. The Caux round table (1986)

2. 1994 - three ethical principles - a) responsible stewardship. b) japanese concept of
Kyoseo, c) respecting and protecting human dignity.

CRT principles for responsible business

- Principle 1 - respect stakeholders beyond shareholders

- 2 - contribute to economic, social and environmental development.
- 3 - respect letter and spirit of the law
- 4 - respect rules and conventions
- 5 - support responsible globalisation
- 6 - respect the environment
- 7 - avoid illicit activities

Stakeholder management guidelines (Part of CRT only) for -

 1. Customers
2. Employees
3. Shareholders
4. Suppliers
5. Competitors
6. Communities

Based on this, National Voluntary Guidlines on Social, Enviromental and Economic

Resposnbilties of business (NVGs) (2011) - basis of BRR and BRSR

1. Business should conduct and govern themselves with integrity and in manner which is
ethical, transperacy
2. Business should provide goods and services in a manner that is sustainale and safe
3. Business should protect
4. Respect and promote human rights
5. influe……
6. 9.

How should reporting become part of business strategy?

Legislative and reporting framework -

1. Ten principles of the UN Global Compact

2. Sustainable development Goals
3. BRSR

21/10/2024

- MDGS turned ito SDGS

- What is sustainable development?
- Why study SDGs at all?
- BRR Vs. BRSR (BRSR is mapped on SDGs)

MDGs

- Developed countries were given less time, developing countries were give more time to
comply.
- There should be more compliance on developed.
- MDGs were not a success. Although there was more time for 3rd world countries, the
issues remained.

SDGs

- Fixed deadlines
 - Broken down into 17 key goals and sub-goals
- Interface with many sectors, holistic vision
- SDGs mapped against NGRBC
- Essential Indicators and Leadership Indicators of Principles 1-9. (NGBRC)
- Do all companies need to conduct impact assessments?

End-Sem Questions - Everything mentioned in syllabus.