Principles of Legal Writing | |
By : ambrish on 05 November 2011   Print this | |
This article is intended for an overview on legal drafting and difference of legal English and general English. The principles are based on personal practical experience and observation of legal writing of Justices, Judges, eminent lawyers, senior colleagues and book of known legal authors. The information shared in this article would definitely helpful to develop understating with legal English and drafting fundamentals. 1. Difference between Legal English & General English for communication. Before to begin with legal English, we need to understand the difference between Legal English and plain English. Plain or general English writing is used for communicating thoughts, observation, stories, description etc. but legal writing is slightly different. Legal writing defines the rights and liabilities. It is defines the statutory position, legal obligation, legal provisions, statue, factual description etc. Legal writing is intended for interpretation. Interpretation by the court will effect overall result. That's why legal writing should be in such manner that no other interpretation can be taken out of a sentences other then the intended by the writer. 2. Understand the objective of writing Objective of writing set the language of the document. When you are writing a formal letter, response to a letter, business mail then your language could be a common English. But when you know that writing a letter could hamper your legal rights then the wordings should be carefully chosen. First see, what it the objective? Does the objective is to reply a complaint where customer is annoyed by default ? No, the objective is to save the actually handle an annoyed customer. 3. To whom you are addressing ? 'Addressing' indicates the person for whom the document is written for. It is 'know your audience' rule. Legal document is used before judges, judicial staff, other lawyers, clients, parties to the agreement, common public information and so on. If a document is written for a judge then certainly legalese would be easily understood. It is written for lawyer or some other authority then even the legal jargon can be understood. But, if it is written for a common public or client then the tough legal language would annoyed the reader. 4. Use of reference Material & Document Design Every Legal documents have a unique design. These designs are evolved in the past 200 year of the legal history. A design of a agreement would be different from a plaint or design of legal notice to an individual would be different from public notice. One should refer the prevailing practice of design a document. 5. Introduction of Context The introduction of a document is very important in legal writing. In the introduction, the writer should mention what is coming up. Introduction gives a clear understanding what is the whole is matter is all about. Keep following basic rules in mind for introduction. Put the significant facts upfront : Ask yourself, whether a reader would understand the matter by the introductory material. The facts should be presented in a way that even an average person can understand by bare reading. Use short, simple and easily understandable language so that reader go thorough it quickly and ask you- 'okey …what is particular about the event that happened after this.? 6. Description of facts in Chronological order Ideally, the facts should be presented in chronological order. The first incident should come first to be followed by second incident and so on. It is give clarity to reader about the sequence of the event. 7. Understanding with Legal terminology Have basic understanding with the legal terminology and its meaning. Understand the impact of the legal terms so used in document. Check what any other legal professional would interpret the term. The legal terms should be used very carefully with an understanding the interpretation before court. 8. Use of Legal Jargons and Latin Legal Jargons and Latin. Legal jargons are the word which only a legal professional can understand. It is often seen that legal professional feel pride using legal jargons and latin. Words like 'thereon' 'therewith' 'whereas' 'hereinafter' are not commonly used in general English but these words are heavily used by legal professionals. We have described these words in separate chapter in this book. It is commonly known as legalese. It can be acceptable when you are writing for consideration of court of legal fraternity who are accustomed to read and understand. But it may scared a lay man. Specially, Latin is very difficult to pronounce and even more difficult to understand. 9. Short sentence, paragraphs and heading Short sentences gives space to the reader to have pause and understand what is written. A paragraph containg 3 to5 short sentence in a sequence then it is enough. The new paragraph should be in line with the last paragraph. It should have some linkage with the previously told facts. Continuity is important. 10. Grammatical Corrections Like general English, a legal document should be grammatically correct. Legal document once written shall ever remain as piece of evidence and shall be examined by several people. Specially by judges, lawyers and well –knowledgeable client. There should not be any mistake in grammar. 11. Mare sure by re-reading and edit five times Edit the document five time at least. Don't hesitate to edit once more. Rule out every possibility of mistakes in grammar, spellings, commas, parenthesis, chronology etc. Every time you will find scope of improvement in the sentence construction, paragraph length and even sequence. 12. Beginning of the sentences Beginning of the sentence can be by 'But' and 'And'. However, the general English don't allow to use 'But' and 'And' at the begning but in legal English it is almost universally accepted in legal faternity. Beginning of facts can also be state by 'That' or 'Whereas' whichever suits the most. There is no any hard and fast rule but the beginning should directly jump to the core message that writer wish to communicate. 13. Check suitable substitute words or one word expression Legal English is all about the expression by the parties. The expression largely depends of choice of word. Be careful in choice of word. Regards Ambrish Tiwari MBA, LLB. |
Interpretation and its Rule
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Meaning
In simple understanding legal document are drafted by the professional with the help of legal word to create more value of the document which is not possible for a normal person to be understand without having legal knowledge. So proper understanding of the legal document for normal person quite difficult, in order to short this problem interpretation rules are introduced.
So from the above we can understand the meaning of Interpretation that is proper constructing the meaning of legal word by applying the rule.
Need for Interpretation
In simple word need to interpretation is to clearly understand the legal language, because it is not within the human power to forsee the manifold sets of fact which may arise and without having the legal knowledge no body can extract the actual meaning from the legal draft. The object of the interpretation is to discover the intention of the author of the instrument. So to understand the actual meaning the thinking of reader should be similar to the writer and it can possible only when the reader succeed in finding the actual meaning of the word used by the author.
Principles of Interpretation
It must e cleared that, it is only when the intention of the legislature as expressed in the statute is not clear , that the Court in interpreting it will have any need for the rules of interpretation of statute. The rules of the interpretation are pointed below –
1. Primary Rules:
(a) Literal Construction : According to this rule the word, phrases and sentences of a statute are ordinary or popular and grammatical meaning unless such a construction leads to an absurdity or the content or object of the statute suggest a different meaning .
(b) The Mischief Rule r Heydon's Rule: In this rule four things are to be consider – i) What was the common law before the making of the Act. ii) What was the Mischief and defect for which law did not provide. iii) What remedy are available to cure damages. iv) The true reason of the remedy.
(c) Rule of Reasonable Construction : Normally the word used in the statute have to be construed in their ordinary, but in many cases judicial approach find that the simple device of adopting the ordinary meaning of words does not meet the ends as a fair and reasonable construction. It become necessary to have regard to the subject matter of the statute. According to this rule, the word of the statute must be construed ut res magis valeat quam pareat, so as to give reasonable meaning to them.
(d) Rule of Harmonious Construction: A statute must be read as a whole and one provision of the Act should be construed with reference to other provision in the same Act. so as to make a consistent enactment of the whole statute . Such construction has the merit to avoid inconsistency between a section and other part of the statute.
(e) Rule of Ejusdem Generies: According to this rule all the general word contain in the statute may be construed with reference to the antecedent matter and the construction may be narrowed down by treating them as applying to the things of the same kind as those previously mentioned.
2. Other Rule of Interpretation:
(a) Expressio Unls Est Exclusio Alterius: The Rule means that express mention of one thing implies exclusion of other. The method of construction according to this maxim must be carefully watched.
(b) The Noscitur a Socitis: In this rule meaning of the word should be known from its accompanying word. It is not a sound principle for interpretation. of statute to lay emphasis on one word disjuncted from its preceding words
(c) Strict and Liberal Construction : This Rule means Acts are not to be regarded as including anything which is not within their letter as well as their spirit, which is not clearly and intelligibly describe in the very words of the statute as well as manifestly intended, in simple meaning everything to be done in advancement of the remedy that can be done consistently with any construction of the statute.
From the above we can easily obtained the usefulness of the Interpretation and the requirement also, because no body can interpret legal document without having legal knowledge. So a person can interpret legal document only with the help of the Rule of Interpretation given in the above. So interpretation is very useful because without understanding the meaning no body can perform the function mention in the document.
Widening the investor base
High membership fees discourage small brokers from joining exchanges. — Paul Noronha
Broad-basing the broker network, focusing on investor education and diversifying products would go a long way in ensuring greater investor participation in the capital markets.
Despite being a trillion-dollar economy with a healthy 30 per cent-plus savings rate, households in India continue to pre-dominantly invest in real estate and gold, due to the natural inflation hedge that these non-financial assets have been seen to offer in recent times.
Even among financial assets, bank deposits account for a lion's share not because of high interest rates offered as much as safety of capital and absence of well-developed debt markets providing better fixed-income alternatives.
Capital markets, including mutual funds, account for merely 3-4 per cent of total household savings, reflecting a lack of investment culture in India. Interestingly, this percentage has remained virtually stagnant over the last decade, despite stock markets, for all their upturns and downturns, delivering a compounded annual growth rate of 16.6 per cent from 2001-02 to 2001-12.
Why the hesitation?
Why don't Indian households, then, consider capital market as a viable asset class for investing their savings?
One reason is the structural weaknesses of the Indian capital market. It lacks both width and depth. Despite 5,000 listed companies, the top 10 stocks account for a quarter of the National Stock Exchange's (NSE) cash equity and nearly 40 per cent of its derivative market turnover. More than 60 per cent trading is confined to five cities: Delhi, Mumbai, Ahmedabad, Chennai and Kolkata. Further, 25 brokers account for more than 40 per cent of trading volumes.
This acute market concentration and lack of financial deepening is a major roadblock in developing a nationwide equity investor culture. For that, we need to broad-base our capital market by ensuring wider investor participation in tier-II and tier-III cities and finally taking it to every district of the country. It requires expanding the financial intermediary network involving brokers, sub-brokers and other stock-market operators.
A major hindrance in developing a strong broker network has been the high membership fees imposed by stock exchanges, discouraging small and medium sized but qualified professionals to participate due to lack of initial capital. The NSE, for instance, charges a whopping Rs 1.3 crore for new membership and the total cost runs up to Rs. 2.3 crore (including Rs 1 crore net worth that corporate members have to maintain at all times).
This, it has been able to do only because of being the country's dominant exchange with a market share of over 90 per cent in the past two decades, enabling it to also register a net profit of Rs 638 crore in 2010-11. One hopes this will now change, with the newly established MCX Stock Exchange announcing a membership fee of Rs 30 lakh and the Bombay Stock Exchange also bringing it down to these levels. Cost optimisation will reduce the added burden on brokers, freeing up their funds trapped in the exchange that serves no other purpose but to buttress the latter's own profit margins. Brokers will be able to use the extra cash for expanding, training, sprucing up their own infrastructure and enhancing their service.
Need for education
But merely broad-basing the broker network will not help in widening capital-market participation. Equally necessary is an effective and well-coordinated countrywide investor education programme. Retail investors need to be provided better understanding of the risk-return profile of capital-market investments vis-à-vis other asset classes.
They should also be made more aware about investor-protection regulations. Stocks exchanges till now have been only been giving lip-service to these objectives. Investor education is not merely a corporate-social-responsibility issue, but a prime driver of market development. Well-informed investors ultimately help in creating a fair, rational and inclusive market system.
Another structural issue that needs to be addressed is the lack of a well-developed debt market. For a common investor, the capital market is synonymous with equity investments, reflecting ignorance about the role of debt market. Worldwide, equities account for only 10-12 per cent of trading activity on stock exchanges. Debt instruments and debt-related derivatives are major drivers of global stock markets, which is a grossly under-developed segment of Indian capital markets.
Debt markets
A major part of the Indian debt market today comprises trading in wholesale government securities, involving participation of captive institutional players such as banks and insurance companies, who are forced by the statutory liquidity regulatory norms to take exposure in these instruments. Further, the corporate bond market is virtually absent.
Thus, there is a need to lay greater emphasis on the development of debt markets to ease corporate financing and funding of large infrastructure projects in the country. That requires more broad-based investor participation. Again, it is unfortunate that the exchanges so far have paid scant attention to this segment of the capital market.
Apart from a primary market for debt instruments, it is important to simultaneously evolve a debt-based derivatives market. While interest rate futures (IRFs) were introduced as early as 2003, it found few takers. In 2001, the Reserve Bank of India introduced IRFs on 91-days Treasury bills, followed by IRFs on two- and five-year government bonds as well. However, trading in IRFs is still negligible owing to poor effort on the part of the exchanges to create a market for these instruments. IRFs will not only stimulate the primary debt market, but the development of debt-market cash and derivative platforms would provide retail investors with a choice apart from equity-based instruments.
Intervention, competition
Broad-basing the broker network, focusing on investor education and diversifying products would go a long way in ensuring greater investor participation in Indian capital markets. In addition, there is need for policy intervention in so far as lowering trading costs. Transaction costs on Indian stock exchanges are between two to 38 times more for cash and derivative segments, compared with the average figures for leading stock exchanges in the world. High transaction costs, apart from discouraging domestic traders, are forcing even foreign investors to migrate to cheaper trading platforms in other emerging countries.
The Union Government should make stock markets more cost competitive, by eliminating or at least reducing the security transaction tax (STT) and rationalising stamp duties on market transactions. The capital-markets regulator should also focus on strengthening corporate-governance norms, internationalising stock exchanges, encouraging inter-exchange cooperation, and setting up a sovereign fund for capital-market stabilisation as Brazil and some other emerging economies have done. This will ensure that our capital market is less vulnerable to macro-economic shocks from global crises.
International evidence shows that as economies move to higher income levels, stock markets play a greater role in economic development. Widening the investor base and the right policy reforms will help in attaining long-term sustainable economic growth.
(Sanjay Sehgal and Muneesh Kumar are Professors at the Department of Financial Studies, University of Delhi. The views are personal.)
(This article was published on October 24, 2012)
Caution, IPO ahead
The tepid investor response to IPOs has arisen mainly from unsustainable pricing timed to bullish market conditions.
The capital markets regulator's order last week laying down a long list of 'disqualification' criteria for initial public offers (IPO) is welcome as initiative goes, but is fraught with regulatory challenges. While some of these criteria are objective in nature and can, hence, legitimately form the basis for rejection of offer documents, the rest, being subjective, can lead to litigation. Thus, offers by companies that dress up numbers through related-party transactions, or by those with pending litigations threatening their very survival and projects without critical regulatory clearances, may not pose a challenge, as a summary rejection on any of these grounds can stand the test of judicial scrutiny.
But where the Securities and Exchange Board of India (SEBI) is treading on thin ice is in laying down subjective criteria that, in the event of forming the basis for rejection, can be challenged, thus leading to vexatious litigation. One such ground is if a prospective issuer's business model is "exaggerated, complex or misleading and investors may not be able to assess risks associated with the business". How is SEBI to determine 'complexity' for the lay investor? Similarly, an "unreasonably long" gap between raising the funds and utilising them is a no-no, but again with no proper definition of 'unreasonable'! The SEBI order also frowns upon use of IPO proceeds for a purpose that does not create any tangible asset, such as meeting advertising expenses or consulting fees. This condition ignores the fact that many consumer-oriented businesses would possibly create better investor value through brand-building than putting up fixed assets. Moreover, how is SEBI going to clear offers within a reasonable time frame, if it sets out to screen everything from the issuer's business model to its accounting policies and financing decisions? It is understandable that SEBI, in its efforts to rebuild retail investor interest, should focus on primary market reforms. Investor confidence there has taken a beating in recent years, with many instances of exorbitant pricing, poor disclosures and even sheer manipulation of the bidding process. But given the limited resources at its disposal, SEBI is biting off more than it can chew.
Also, filtering out poor quality IPOs, such as there are, will not revive the primary market anytime soon. The tepid investor response to issues has arisen mainly from unsustainable pricing timed to bullish market conditions. Curbing such practices isn't easy, unless SEBI plans to go back to an era of 'pricing' approvals as was the case in the Controller of Capital Issues regime. SEBI has already done quite a few things to level the field for retail investors by measures such as making the offer/bidding process quite transparent, ending the advantage enjoyed by institutional investors, and cracking down on instances of blatant manipulation. Beyond that, the doctrine of 'caveat emptor' should guide its actions.
(This article was published on October 24, 2012)
Lessons from the 1962 debacle
India's younger generation can barely comprehend the humiliation, trauma, shame and anger that prevailed in the immediate aftermath of the diplomatic, military and strategic debacle in the 1962 border conflict with China. Responding to former President Sarvepalli Radhakrishnan's admonition of his "credulity" and "negligence", former Prime Minister Jawaharlal Nehru had acknowledged, "We were getting out of touch with reality in the modern world and living in an artificial atmosphere of our own making".
Nehru had, in 1959, proclaimed that the Chinese were "unlikely" to invade India because they knew it would lead to a "world war". He believed that China, faced with a growing rift with the Soviet Union and at odds with the US, would just not go to war with India.
Disastrous policy
What followed was a disastrous policy of deploying poorly-equipped troops in forward positions to contest Chinese claims, despite logistical and operational reservations expressed by former Army Chief Gen K. S. Thimmayya and other senior operational commanders. This policy sought to give credibility to a claim in Parliament that "not an inch of Indian territory" would be left undefended. Having raised expectations, the Prime Minister was unable to negotiate on suggestions by China's former Prime Minister Chou en Lai. Taking suggestions on border claims at face value could, however, have been hazardous, as China's claims continued to change repeatedly, as they do to this day.
Compounding the diplomatic bungling and the incredible naiveté in believing that China would never attack India was the behaviour of former Defence Minister V. K. Krishna Menon. He arbitrarily appointed Lt. Gen. B. M. Kaul, with no combat experience, as the Corps Commander of the newly-established IV Corps in Tezpur, tasked to "throw the Chinese out" in the eastern sector. India's defence collapsed on November 19, with its elite 4th Infantry Division beating an ignominious retreat.
BORDER TENSIONS
As the eastern sector collapsed, a panic stricken Nehru wrote to former US President John Kennedy seeking American air support. India's claims to non-alignment lay in tatters. A few months before the conflict commenced, the Chinese Ambassador had learnt in secret negotiations with the Americans that the US would not get involved in the event of border tensions escalating with India.
With the Sino-Indian conflict coinciding with the Cuban Missile crisis, China compelled the Soviet Union to initially remain neutral. Rather than assisting India, the Americans and the British demanded that India resolve differences with Pakistan over Jammu and Kashmir. It was the Soviet Union that moved meaningfully to help India bolster its Defences.
China has significantly bolstered its defences on Tibet's borders with India since 1962. Apart from developing an impressive road and rail communication network, it has deployed 2.2 lakh troops in the Lanzhou military region bordering Ladakh, including airborne and motorised divisions. Another 1.8 lakh troops are deployed in the Chengdu military region facing India's north-eastern States. Beijing has also been augmenting capabilities and training for high altitude warfare. The main lesson of 1962 is the need for Indian conventional capabilities along our borders with China to convince it that future conflicts will not remain confined to the Indian side.
Strategic containment
China today is the second largest economy in the world. It has made remarkable strides in areas ranging from space to cyber warfare. But it faces serious internal tensions arising from contradictions inherent in having a relatively open economy, on the one hand, and a closed and increasingly corrupt one-party political system on the other. China is continuing nuclear weapons, missile and defence collaboration with Pakistan. It is expanding its role in Pakistan-occupied Kashmir. It has consistently sought to undermine India's "Look East" Policies by trying to block India's entry into the East Asia Summit, prevent the Nuclear Suppliers Group from giving India a waiver on nuclear cooperation, and being ambivalent on India's quest for a permanent seat in the UN Security Council.
There is little awareness on the security implications of China's growing role in key sectors of our economy such as power and communications, or of the dangers posed by the domination of these sectors by Chinese companies.
India has to, therefore, combine pro-active diplomacy and build up its offensive military capabilities along its borders with China, by formulating and implementing measures to achieve indigenisation in key sectors such as power and communications. Moreover, if present policies continue, our imports of electronic and communication equipment will exceed imports of oil and natural gas by 2020.
A serious effort has to be made to enable our public and private sectors to develop capabilities comparable to those developed by the Chinese in these strategic sectors.
(The author is a former High Commissioner to Pakistan. blfeedback@thehindu.co.in)
Inflation — visible and invisible
In its second quarter review of the Monetary Policy to be announced on October 30, the RBI should go for a cut in policy rates and not touch CRR.
As the Reserve Bank of India (RBI) reviews the state of the economy and formulates its policy response to the emerging situation, it finds its task no less difficult than in the past.
Even if the recent reform announcements get implemented, it passes one's comprehension as to how it will lead to a higher GDP growth in the near future, as claimed by some observers.
The opening up of retail trade, aviation, and so on, to foreign investment will take time to fructify on the ground. Even if these lead to some additional employment in the service sector, it may have only a marginal impact on the commodity sector in increasing output.
Excess liquidity
On the inflation front, there is no relief in sight. Its continued elevated levels, especially in the case of food, are likely to prevail during the rest of the year. What is disturbing is the revelation from the monthly seasonal factors in economic time series published in the RBI Bulletin of September 2012.
Although there are peaks and troughs in the wholesale price index for all commodities, the amplitude of the curve or the range between the maximum and the minimum in a year has been small or negligible like that between Tweedledum and Tweedledee. The amplitude increased from 1.1 in 2002-3 to 1.5 in 2007-8, and thereafter witnessed a steady decline to 1.1 again in 2011-12.
Among food articles, the seasonal variation is important only in the case of pulses and fruits and vegetables. The annual rise in the prices of wheat and rice at 18.6 per cent and 12.4 per cent, respectively, in September, defies logic, considering the bulging stocks lying with the Food Corporation of India. Does it mean that rising official food procurement has led to a reduction in the floating stocks in the market resulting in the price rise? It is also symptomatic of the underlying problem of excess liquidity and demand management.
Reducing size
In this context, one needs to take note of what I would call 'invisible inflation'. It refers to a sale strategy of retaining the price of a good, while simultaneously reducing its size or the quantities offered. Manufactured goods such as toilet soaps are available in small sizes, but without any proportionate decrease in prices vis-à-vis the big ones.
Another classic example is coffee. In the distant past, restaurants used to supply the beverage in good-sized tumblers. Over the years, the size got reduced, progressively culminating in a small cup now. There is sometimes a double whammy for the consumer, as the price also 'visibly' goes up!
Likewise, the vegetable vendor selling the masala mixture of coriander leaves, and so on, used to earlier provide a piece of ginger 'free' to generate goodwill. Now, we have to buy it. It was selling around Rs 200 per kg at one time! Then there is the restrictive practice, where in the case of both masala mixture and tulsi leaves, the vendor in the Matunga market of Mumbai insists on a minimum purchase for Rs 5. What do you do with all the tulsi leaves, when you can use only three or four in any religious ceremony?
There is, indeed, no way for monetary policy to tackle such problems of 'invisible inflation' that any wholesale or consumer price index cannot measure!
Case for Status Quo
The RBI is concerned with liquidity at the level of the banking system.
Banks put together had an excess investment of more than Rs 500,000 crore in statutory liquidity ratio-linked securities on October 5, as against the highest amount in recent times of Rs 100,000 crore of repos availed of on October 18.
The trends in the call money market, credit-deposit ratio (75 per cent), investment in mutual funds (Rs 51,700 crore), bid-cover ratio in the auction of securities and the spurt in the total traded amount of commercial paper from Rs 3,663 crore in August to Rs 21,574 crore on October 15 are all indicative of a comfortable liquidity situation. The recent high level of repo transactions at the RBI was only due to the temporary outflow of currency in the festival season.
Going by the current trends in relation to major economic variables, there is no case for any change in the policy.
The RBI's focus should continue to be on inflation, though there is considerable pressure on it from the banking and the corporate sectors, and also the Government, to loosen up policy in the interest of growth.
Such liberalisation can be in two ways. One is a further reduction in the banks' cash reserve ratio (CRR) that will release primary liquidity. The other is a decrease in policy (repo and reverse repo) rates by the RBI. Under the current circumstances, the reduction in policy rates is preferable to that in CRR.
A CRR cut benefits all banks across-the-board, including those with comfortable liquidity.
The policy rates, by contrast, benefit only those accessing the RBI's window. If the rates are reduced, it is not likely to lead to any dramatic increase in the issue of created money.
In any case, unlike the CRR, which has a feature of permanence until a change is made, the repo transactions are for only overnight, even though there are daily rollovers by many banks.
From the point of view of the public and politicians, a decline in rates is easily seen as something good. It is a no-brainer!
On the other hand, not many can understand the nuances of CRR.
Thus, from the point of view of public relations, too, a cut in rates is preferable to one in CRR being less damaging in the current economic situation.
(The author is an economic consultant.)
In India, women occupy a mere 4.8% of seats in boardroom: study
October 24, 2012:
Indian women seem to have a harder time than men when it comes to working their way to the top of the corporate ladder — the board of director.
A new study reveals that half the boards of Sensex companies do not have a woman director. And of the women who have managed to break into the boardroom, hardly any are in an executive role.
Globally, 9.8 per cent of directors in 2011 were women, with 58.3 per cent of companies having a female on the board.
India is ranked 38th in the world in terms of women representation on boards, with only 4.8 per cent of board seats occupied by them. Of the women directors, 50 per cent are independent directors.
The study, 'Board Diversity in India', conducted by The Institute of Public Enterprise, Hyderabad, notes that none of the boards of Sensex companies is led by a woman.
Age profile
What is more, most of the women directors are not only new entrants to the board but younger than their male counterparts.
Sensex companies' boards consist of men with ages in the range 38-89 years, with an average age of 63. In contrast, women directors were aged 40-75 years, with the average age being 58.
Another interesting finding was that none of the women directors in the Sensex companies holds a doctorate, whereas 11 per cent of male directors were doctorates.
And 6 per cent of the women directors are undergraduates, which appears to be an outcome of the family-run business model for a number of India's largest firms.
The report also suggested that Indian boards are yet to go global, with only 7 per cent of directors in listed companies being non-Indian.
The foreigners who have made it to the boards are highly qualified or have expertise that is directly related to the company business.
The study highlights the diversity in the tenure of directors in India.
While the average is 8.4 years, some have served as long as 48 years. Some 10 per cent of them are veterans with more than 20 years' experience on the board.
Bank can freeze account into which it mistakenly credited money: High Court
October 24, 2012:
When a bank inadvertently omits to upload the stop payment instruction issued by its account holder and the cheque is thus credited to the account of the payee despite such instruction, the bank is well within its rights to freeze the account of the payee till he returns the money with interest.
This was the view taken by the Andhra Pradesh High Court in Ganesh Cotton Traders, Guntur, v. The General Manager, UCO Bank, Kolkata & Others. One Lakshmi Ganesh Textiles (P) Ltd had issued a cheque in favour of the petitioner for some Rs 24 lakh for which a stop payment advice was issued to the bank due to dispute in quality and quantity of goods purchased from it. It was a post-dated cheque and the stop payment advice was received and acknowledged by the bank well before the date mentioned on the cheque. It was therefore clearly the bank's fault that it did not upload the stop payment instruction to the system as a result of which the cheque was cleared on presentation by the petitioner's bank. Nearly half of the amount thus credited was used by the petitioner in the course of his business. It was at this point that the respondent bank wrote to the petitioner's bank and got the account of the petitioner frozen.
The AP High Court sustained this action of the respondent bank on the ground that on issue of stop payment instruction, the money did not belong to the payee in the first place in terms of section 72 of the Indian Contract Act, the negligence of the bank notwithstanding. It went on to hold that a person into whose account a wrong credit is made is duty bound to return it along with interest.
(The author is a New Delhi-based chartered accountant)
Reliance Industries agrees to auditing of D6 block
CAG audit subject to conditions; Nod to plan to raise D6 output
New Delhi, Oct 24:
Are there signs of reconciliation between Petroleum & Natural Gas Ministry and Reliance Industries Ltd (RIL)?
In a communication to the Principal Director of Audit, Economic and Service Ministries, dated October 23, the Petroleum Ministry said that RIL had agreed to the second round of auditing of RIL-operated D6 block, subject to certain conditions.
If interpreted, this would mean the CAG will be able to do only the financial audit, not performance audit -- an issue that was the bone of contention between the parties involved.
RIL had been refusing any kind of performance audit by the CAG on the grounds that it breached the PSC. While the Ministry and CAG have been maintaining that the Government auditor can look into the operator books unconditionally.
In fact, these differences between the parties involved were cited as the main reason for RIL unable to get the D6 management committee's nod for the operators' plans to raise output from the block. The finalisation of the decisions was pending due to RIL's refusal to allow a second round of audit by the CAG of its spending on the D6 block. At stake were approvals worth millions of dollars.
Now, with the auditing issue being resolved, the operator of D6 may get a fillip for taking steps to increase output from the block.
"RIL has agreed for an audit under Section 1.9 of the Accounting procedure of the PSC by the Comptroller and Auditor General of India (CAG) and to cooperate with such audit without prejudice to any of their rights and contentions as stated in their reference letter," it said.
RIL, while agreeing to another audit through a letter dated October 18, had reiterated that the proposed audit would be as prescribed in the PSC, and not a performance audit of the operator.
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