Master Circulars Issued by the RBI – Highlights
Shruti Priya
The Reserve Bank of India (RBI) on 1 July 2011 issued the updated Master Circulars compiling the regulatory framework and instructions formulated by RBI under various circulars and notifications. The Master Circulars are issued with a sunset clause of one year and will stand withdrawn on July 1, 2012. The highlights of the changes brought in by the present Master Circulars are as following:
MASTER CIRCULAR NO. |
Highlights |
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Master Circular No. 15/2011-12Master Circular on Foreign Investment, 2011 (“Circular”)
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Changes reflected in the consolidated FDI Policy:
Provisions pertaining to OCB’s:
Pricing Guidelines
Mode of payment
Form FC GPR:
Investments in Trust:
NRI Investments:
Escrow:
Pledge of Shares held by NRs to AD Bank in India or overseas Bank:
Issue of equity against import of capital goods etc.:
FVCI cannot buy through private arrangement with a third party:
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Master Circular No.9 /2011-12Master Circular on External Commercial Borrowings and Trade Credits, 2011(“ECB Circular”) | Salient Features of the ECB Circular: |
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Master Circular No.11/2011-12Master Circular on Direct Investments by Residents in Joint Venture/ Wholly Owned Subsidiary Abroad, 2011 | Performance Guarantee:
Corporate guarantee to step-down subsidiary of JV/WOS:
Write –off of Capital and Receivables:
Transfer by way of sale of shares of a JV / WOS:
Transfer by way of sale of shares of a JV / WOS involving write off of the investment:
Annual Performance Report: |
The write-off/restructuring shall be carried out as under:
The Indian party shall submit the following documents along with the application for applications to the designated AD Category –I bank (“Designated Bank”):
The write-off/restructuring shall be reported to the RBI via the Designated Bank within a period of 30 days of write off or restructuring.
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Master Circular No.03/2011-12Master Circular on Establishment of Branch/Liaison/Project Offices in India by Foreign Entities, 2011 | Highlights of Modifications and changes to the policy: |
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Legally India’s Firm Profile for PXV Law Partners
PXV Firm Profile: Structuring for the top tier
Written by Neha Chauhan | Tuesday, 26 July 2011 16:18 | Law firm profiles | published in Legally India [www.legallyindia.com]
Link: http://www.legallyindia.com/Law-firm-profiles/pxv-firm-profile-structuring-for-the-top-tier
http://www.legallyindia.com/Law-firm-profiles/pxv-firm-profile-structuring-for-the-top-tier
PXV Law Partners, which started as RDA Legal only three years ago with its founder just about two years out of NUJS Kolkata, can now boast four metro offices, a lockstep equity partnership model, bi-yearly managing partner elections and ambitious plans to give the legal world’s top brass a run for its money in the next five years.
Rohit Das, who was re-elected as managing partner in January 2011 after co-founding the firm in 2008, says he is not content for PXV to remain mid-market and mid-size. “We’re very aggressive and see ourselves in the top bracket in the next five years. And in terms of the size also we do see reaching 100 by five years.”
Das started RDA Legal, as it was then called, after spending less than two years with Amarchand Mangaldas, having graduated from NUJS Kolkata in 2006. The first office was Kolkata, a city, he says, where he had the right amount of support and contacts necessary to start a new firm. This also gave a leg up to the second office only eight months later in Bangalore. The firm underwent a restructuring to incorporate three new equity partners and rechristened to PXV last year.
PXV, short for Mount Everest’s original name Peak 15, is reflective of the firm’s ideologies, explains Das: hard work and dedication can lead them to the pinnacle of the legal profession.
The seven equity partners are on a pure lockstep with a common profit pool alongside two non-equity salaried partners. “From last year we’re in the lockstep, we’re quite aggressive – we don’t want a highly leveraged firm in terms of associates but we want a highly leveraged firm in terms or partners,” says partner Deepto Roy, emphasising a balance between aggressive lateral hiring and organic growth. “Our salaries may not be as competitive as that of the big law firms [so we convince laterals] of the growth potential we see in the firm and ensure that they feel a part of it.”
Structurally forward looking
Besides an electoral method of selecting the managing partner every two years by equity partners, PXV has administrative sub-sections headed by each partner. An executive committee looks into various managerial responsibilities. “One of things we’re putting in place is an executive committee of a smaller sub-set of partners taking on the firm’s responsibility,” explains Roy. “There are partners in charge of HR, knowledge, ethics and conflicts, business development, accounts and finance.” Das adds that the firm’s management is closely knit and centralised with standardised practice across offices but trust still remains the cornerstone of understanding among partners.
And although all PXV partners are currently from NUJS Kolkata, Das says that is quite coincidental and the firm does not hold any institutional bias. A
part of PXV’s expansion strategy now is to take on specialists to expand in given practice areas while developing other important niche practices such as competition law and intellectual property in-house. “Just recently we have inducted a consultant who is a UK qualified lawyer,” Das tells Legally India. “We are consulting her to develop a pharmaceutical practice – she’s an ex-Allen & Overy and has a lot of experience in-house as a lawyer working for pharma companies.”
M&As account for 45-50 per cent of the firm’s revenues followed by litigation, which contributes 30 per cent, and the rest that comes from other developing areas, according to Das. “General corporate work is bread and butter stuff for us.”
After four offices in Mumbai, Delhi, Bangalore and Kolkata, PXV is planning to open a fifth office by the end of this year in Ahmedabad, which according to Das is a growing centre of commerce where a lot of FDIs and investments have taken place.
Firm Fact File
Offices: 4 (Mumbai, New Delhi, Bangalore and Kolkata)
Total number of lawyers: 25
Number of partners: 9, of which 7 equity (Mumbai: Rohit Das; Bangalore: Pingal Khan; New Delhi: Deepto Roy, Mohit Abraham, Thomas Phillippe, Shobha Singh, Anuj Sahay, New Delhi; Arindam Pal, Kolkata; and Souvik Bhadra, Kolkata)
Practice areas: M&A, JVs, litigation and disputes, real estate, infrastructure and energy and banking and finance
Indian firms recently seen on opposite side of deals: Induslaw, J Sagar Associates (JSA), Kanga & Co, Crawford Bayley, Khaitan & Co
Worked with foreign firms such as Skadden Arps, Berwin Leighton Paisner and referral relationship with French-European firm DS Advocats
Business development model: leveraging old relationships, developing new relationships, “very serious” about working with international law firms
Recruitment: This year taken six or seven freshers from RMLNLU Lucknow and GLC Mumbai; internship programme has taken from Jindal Global Law School, Nalsar Hyderabad and GNLU Gandhinagar.
Most impressive interns or students in past year: Not the school that matters, it’s the individual. We’ve had fantastic interns from Symbiosis Law School, ILS and CLC Delhi.
CSR – The firm has undertaken vibrant pro bono work, says Das, at discounted fees or completely pro bono to various non-profit initiatives. Partners try to help clients who are not in a position to pay fees or have access to quality legal services, and some of the big non-profit organisation and those of clients such as Public Health Foundation of India, BPT – Hindustan Latex Charitable Trust and Yale Medical Centre.
Supreme Court guidelines on approvals for projects on forest land Corporate
Deepto Roy
First published on http://www.mylaw.net.
Link http://www.mylaw.net/Article/Supreme_Court_guidelines_on_approvals_for_projects_on_forest_land/
Published on: August 01,2011
In my earlier post on the Lafarge judgment (“Lafarge”) (T.N. Godavarman Thirumulpad v. Union of India, Interim Applications 1868, 2091, 2225 to 2227, 2380, 2568, and 2937 in W.P. No. 202 of 1995), I had examined the scope of judicial review as defined by the Bench. The other important aspect of the Lafarge judgement is the guidelines that the Court has laid down for future development projects that would use forest land. Decision makers within the Ministry of Environment and Forests (“the MOEF”) and the state forest departments are to be guided by these principles while considering whether to grant approval to a proposed project for the use of forest land.
This post summarises the principles laid down by the Supreme Court.
1. The “far-reaching” principles of the National Forest Policy, 1988 (“the NFP”), (including the articulation of the national goal that a minimum of one-third of the total land area of the country should be under forest cover) must necessarily govern the grant of permissions under Section 2 of the Forest Conservation Act, 1980 and should provide the road map for ecological conservation under theEnvironmental (Protection) Act, 1986 (“the EPA”). Till date, the NFP had merely been on paper and there was no mechanism available to implement it. However, the Court has now made it mandatory for decision-making bodies to consider the provisions of the NFA before granting project approvals.
2. The Court had directed that the MOEF appoint an independent regulator for ensuring implementation of the NFP while granting forest approvals. This regulator would have the powers of appraising projects, enforcing environmental conditions for approvals, and imposing penalties on polluters. From a theoretical perspective, this is an excellent decision, since the presence of an independent regulator should naturally make the decision-making process a more fair and efficient one. However, the powers of the regulator would need to be adequately clarified, so that the regulator has a clear mandate. There would also need to be clarity on the separation of executive and regulatory powers in relation to the grant of an approval.
The MOEF has stated that it has already initiated the process of appointment of the independentNational Environmental Appraisal and Monitoring Authority (“the NEAMA”), proposals for which have been circulated for inter-ministerial consultations.
What would also be interesting to note would be how the environmental regulator would interact with the newly established National Green Tribunal (“the NGT”) to deal with all civil cases where a substantial question related to the environment is involved or for implementation of the EPA and other environmental legislations. The NGT has the power to provide compensation and restitution of property. Will the NGT then become an appellate authority for the NEAMA or will they have separate realms of functioning?
3. The Court noted that reports of expert agencies were often contradictory or conflicting. As a result of this, government bodies often did not have accurate information in relation to the environmental impact of a project. To obviate these difficulties, the bench has directed that till such time as the regulator is put in place, the MOEF should prepare a panel of “Accredited Institutions”. Project proponents should obtain Environmental Impact Assessment Reports only from these accredited agencies. The MOEF should also institute a Rapid E.I.A. mechanism and that too on the terms of reference to be formulated by the MOEF.
4. The Court has stated that in all future cases, the project developers should comply with the Office Memorandum dated April 26, 2011 issued by the MOEF (titled “Procedure for consideration of proposals for the grant of environmental clearance under EIA Notification, 2006”), which involve forests. This Office Memorandum requires that all mining projects involving forests and non-mining projects that involve more than 40 hectares of forests should submit high-resolution satellite images of the proposed site along with land use and ecological date. The developer should also submit a certificate from a State Forest Officer in relation to the land use for the project and whether there is any use of forest land.
5. The Court has also dictated that in case of any doubt in relation to the nature of a land (that is, whether the land is forest or non-forest) the site should be inspected by the State Forest Departmentalong with the regional office of the MOEF to ascertain the status of the land. The inspecting officials would grant a certificate in this respect. What this should also mean is that once this certificate is granted, and if there is no evidence that the certificate was granted in an arbitrary manner, there should be no reopening of the status of the land at a later stage.
6. There are several directions given to the MOEF to expand its internal infrastructure to better facilitate inspection, monitoring, and appraisal of proposals, including the expansion of regional offices from six to ten; constitution of Regional Empowered Committee, under the Chairmanship of the Chief Conservator of Forest (Central) along with three non-official members to be selected from the eminent experts in forestry and allied disciplines; loading of the minutes of meetings of the Forest Advisory Committee andExpert Appraisal Committee as well as all forest clearances in the MOEF’s website. The MOEF has to prepare a comprehensive policy for inspection, verification, and monitoring and the overall procedure relating to the grant of forest clearances and identification of forests in consultation with the states.
7. The Court has also called for the creation and regular updating of a geographic information system(“GIS”) based decision support database, which will contain district-wise details of the location and boundary of each plot of land that may be defined as forest, the core, the buffer, and the eco-sensitive zone. The GIS should also have details of important migratory corridors for wildlife, the forestland diverted for non-forest purpose in the past in the district.
8. Appropriate safeguards in the environment clearance process have to be taken to eliminate chances of diversion of forest land as non-forest. The court directed that a flow chart depicting the tentative nature and manner of incorporating the proposed safeguards should be finalised after consultation with the State and UnionTerritory governments.
9. Public hearing would be a necessary requirement for the environment clearance process.
The Guidelines provide specific steps that need to be taken by project developers seeking forest land clearance for their projects. It does provide a certain degree of certainty to the developers. The MOEF needs to now come up with a comprehensive and exhaustive list of all directions and processes, which are easily accessible. This would not only make it easier to ascertain what exact steps would be required for obtaining these consents but would certainly improve compliance standards in relation to use of forest land use by industries in India.
I would like to thank Abhay Pratap Singh from National Law University, Jodhpur, who had completed an internship with PXV Law Partners for his help on this post.
Lafarge judgment stabilises environmental clearance process
Deepto Roy,
First published in www.mylaw.net
Link: http://mylaw.net/Article/Lafarge_judgment_stabilises_environmental_clearance_process/
Published on: July 18,2011
The facts of the case are complicated, and I would attempt to summarise them in brief. Lafarge through a subsidiary had set up a two million tonne per year cement plant at Chhatak in Bangladesh. The limestone for the cement plant was proposed to be delivered from limestone mines in Nongtrai, which is in the East Khasi Hills district in Meghalaya. The limestone would be sent across the India-Bangladesh border on a conveyor belt (7.2 km of which was in the Indian side of the border).
Process of obtaining environmental approvals
Lafarge accordingly commenced the process of obtaining the necessary environmental approvals from the various authorities in 1997. As part of these applications, Lafarge made representations that the limestone mines did not involve the diversion of forest land and in support provided letters from theKhasi Hills Autonomous District Council (“the KHADC”), the local authority with jurisdiction over the Nongtrai division, and a certificate from the Divisional Forest Officer (“the DFO”) of the Khasi Hills Division stating that the mining site was not in the forest area. Lafarge also stated that limestone mines had existed in Nongtrai since the 1850s and that several unorganised small players were already exploiting the limestone reserves.
After several rounds of queries from the MoEF and consequent responses from Lafarge, the MoEF finally gave environmental clearance for the mines in 2001 and Lafarge commenced mining operations in Nongtrai.
Trouble commences
Trouble started in 2006 when the Chief Conservator of Forests (“the CCF”) for Meghalaya wrote to the MoEF stating that he had visited the mining area and noted that the mining site was surrounded by thick natural vegetation. The CCF expressed the view that the land where the mine was located was forest land and accordingly Lafarge could not carry out operations without the necessary forest clearance.
Despite Lafarge’s protest that no forest land had been diverted for mining purposes, the MoEF directed Lafarge to obtain forest clearance under the Forest Conservation Act, 1980 (“the FCA”), and the interim applications before the Supreme Court arose from Lafarge’s application for forest clearance.
The essential question before the Court was whether Lafarge had obtained the initial environmental clearances by misrepresenting the nature of the forest land, and if such were to be the case, whether the application for forest clearance was being presented as a fait accompli and should be rejected.
The Court’s judgment
The judgment is very important for two reasons; firstly it clarifies the extent of judicial review in a situation where environmental clearances had already been granted and where questions are subsequently raised with respect to the validity of the process, and secondly it lays down a set of comprehensive guidelines for future projects that involve both forest and environmental clearances. It would not be possible to examine both aspects in one post, so this post will deal with the Court’sdetermination on judicial review. My next post would examine the guidelines that the Supreme Courthas laid down for future projects, in particular, the interesting concept of a national environmental regulator.
Going back to the question of whether the project involved the use of forest land, and as such whether Lafarge had misrepresented the nature of the land in obtaining the various clearances, Lafarge maintained that both the KHADC and the DFO had certified that the land for the mine did not involve diversification of project land and therefore there was no obligation on them to obtain clearance for forest land. Their opponents, specifically the Amicus Curiae appointed by the Court, and the counsel for the Shella Action Committee argued that the MoEF’s decision was vitiated by misinformation and non-application of mind and that the Court should order that the mines be closed. The SAC also argued that the forest cover in the mining area was tropical deciduous forest, and in terms of India’s Forest Policy, 1988, no development could be permitted in such forests.
The Court held that the protection of the environment is an ongoing process and therefore “across-the-board” principles cannot be applied. Courts would have to examine the facts of each case on whether the project should be allowed or not. The Margin of Appreciation Doctrine would apply in cases of deciding whether a governmental authority had erred in granting environmental clearance.
The Court placed great emphasis on the rights of locals to determine the value of conservation of the environment and the KHADC’s letters as well as subsequent findings that the Lafarge project resulted in significant gains for the local community were to the Court’s mind, evidence that the local community had taken a conscious decision to support the Lafarge project.
Extent of judicial review
The Court held that the constitutional doctrine of proportionality should apply to environmental matters as well and therefore decisions relating to utilisation should be judged on the well established principles of natural justice, such as whether all relevant factors were taken into account at the time of coming to the decision, whether the decision was influenced by extraneous circumstances, and whether the decision was in accordance with the legislative policy underlying the laws that governs the field. If these circumstances were satisfied, the decision of a government authority (in this case the MoEF) would not be questioned by the Court.
On the basis of these principles, the Court concluded that the accusations of misrepresentation and fraud by Lafarge were unfounded. The Court also concluded against the contention that there had been no application of mind on the part of the MoEF. Lafarge was allowed to continue mining operations.
The importance of this section of the judgment is that the Court lays down a clear principle that if a project developer complies with the specified procedure for obtaining environmental clearances and there is evidence on record that the entity granting the clearance had done so after due consideration, such clearances would not be reversed to the prejudice of the project developer. This gives some much needed stability to the environmental clearance process and both project developers and environmental activists would definitely benefit from this consistent approach.
My post next week will examine the guidelines laid down by the Supreme Court for future projects looking for environmental and forest clearance.