President promulgates four Ordinances - Pragnya IAS Academy - News Analysis.

President promulgates four Ordinances.

The Muslim Women (Protection of Rights on Marriage) Second Ordinance, 2019; The Companies (Amendment) Second Ordinance, 2019; The Indian Medical Council (Amendment) Second Ordinance, 2019; The Banning of Unregulated Deposit Schemes Ordinance, 2019.

The President of India on the 21st February, 2019 has promulgated the following four Ordinances, namely:––
1. The Muslim Women (Protection of Rights on Marriage) Second Ordinance, 2019 (Ord. 4 of 2019).
2. The Indian Medical Council (AmendmentThe Indian Medical Council (Amendment) Second Ordinance, 2019 has been promulgated to give continued effect to the work already done by the Board of Governors (BOG) as per the provisions of earlier Ordinance. This Ordinance, inter alia, enables the Board of Governors appointed in supersession of the Medical Council of India (MCI) to continue to exercise the powers of MCI for a period of two years or till the Council is reconstituted, whichever is ear
3. The Companies (Amendment) Second Ordinance, 2019 (Ord. 6 of 2019).
4. The Banning of Unregulated Deposit Schemes Ordinance, 2019 (Ord. 7 of 2019).

The Muslim Women (Protection of Rights on Marriage) Second Ordinance, 2019 has been promulgated to give continued effect to the provisions brought in by the Muslim Women (Protection of Rights on Marriage) Ordinance, 2019. This Ordinance, inter alia, declares the practice of triple talaq to be void and illegal and also to make it an offence punishable with imprisonment up to three years and fine.
The Ordinance will protect the rights of married Muslim women and deter the practice of divorce by triple talaq (i.e., talaq –e –biddat). It also provide for payment of subsistence allowance and custody of minor children.
In pursuance of the Government’s objective of providing Ease of Doing Business to Law abiding corporate while simultaneously strengthening the corporate governance and compliance framework enshrined in the Companies Act, 2013, the Companies (Amendment) Second Ordinance, 2019 has been promulgated with a view, to empower the Central Government to allow certain companies to have a different financial year instead of as determined by the Tribunal. This Ordinance, inter alia, addresses the need to impose civil liability for technical and procedural defaults of a minor nature and to plug the corporate governance and enforcement frame work, through the following: (i) re-categorisation of 16 minor offences as civil defaults which will de-clog special courts; (ii) transfer of certain routine functions such as permitting conversion of a public company into a private company from NCLT to the Central Government; (iii) making non-maintenance of registered office and non-reporting of commencement of business as grounds for striking of from register of companies; and (iv) breach of ceiling on Directorships being made a ground for disqualification; (vi) Enhancing the pecuniary jurisdiction of Regional Director’s for compounding offences under the Companies Act with a view to unburdening the NCLT of routine functions etc.
The Banning of Unregulated Deposit Schemes Ordinance, 2019 has been promulgated to have a central legislation to tackle the menace of illicit deposits taking activities in the country. Presently, non-banking entities are allowed to raise deposits from the public under the provisions of various statutes enacted by the Central Government and State Governments. However, the regulatory frame work for deposit taking activity in the country is not seamless. Despite such diverse regulatory frame work, schemes and arrangements leading to unauthorised collection of money and deposits fraudulently by inducing public to invest in uncertain schemes promising high returns or other benefits are still operating in the society.
This Ordinance, therefore, ensures a comprehensive ban on unregulated deposit taking activity and for its effective enforcement. It aims to prevent such unregulated deposit schemes or arrangements at their inception and at the same time makes soliciting, inviting or accepting deposits pursuant to an unregulated deposited scheme as a punishable offence. The said Ordinance also seeks to put in place a mechanism by which the depositors can be repaid without delay by attaching the assets of the defaulting establishments. (Source:pib)


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President promulgates four Ordinances.

BRICS summit begins tomorrow.

Setting up a BRICS rating agency and the trade war triggered by US President Donald Trump are likely to be part of the agenda for BRICS summit

Prime Minister Narendra Modi, along with the heads of Brazil, Russia, China and South Africa, will be in Johannesburg to take part in the 10th BRICS summit starting Wednesday.
What is expected from the BRICS summit this time?
The summit is being held at a time when unilateral trade actions by US President Donald Trump have set off a global trade war that could cost the world $430 billion by 2020, according to International Monetary Fund estimates. The five countries, especially China, which has been the key target of US actions, are likely to protest the protectionist measures of the Trump administration. India is likely to support a generic statement against growing protectionism without naming the US.
What will India push for at the BRICS summit?
India is keen to set up a BRICS rating agency, arguing that the methodology of S&P, Fitch and Moody’s is biased against developing nations. Though it presented a feasibility study at the 2016 meet, other members were not much enthused. India will likely push for the plan again.
Modi has called for a BRICS counterterrorism strategy, including joint action on money laundering, terrorist financing, cyberspace and deradicalization. India will seek a stronger statement against cross-border terror to send a message to Pakistan.
What other issues could be discussed?
Cooperation in the areas of counterterrorism, UN reforms, cyber security, energy security and global and regional issues are likely to be discussed.
Where does India stand on the socioeconomic parameters in the BRICS grouping?
Although India is the second-largest economy in the grouping behind China, its per capita income ($1,750) is the lowest among the five member countries. The country’s infant mortality rate (per 1,000 live births) is the highest at 37—compared to Russia’s 6—while its public expenditure on health as a percent of gross domestic product is the lowest at 1.2%, against China’s 6%.
What is the relevance of BRICS grouping?
The grouping has survived for 10 years despite the inherent contradictions among its members: autocratic governments in China and Russia; the rivalry and border disputes between China and India; South Africa and India competing for permanent membership of UN Security Council. BRICS nations have raised concerns over growing protectionism. The New Development Bank set up in 2014 is a big achievement of BRICS. (Source: Livemint)


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BRICS summit begins tomorrow.

President Approves Promulgation of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 - Pragnya IAS Academy - News Analysis

President Approves Promulgation of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018.

The President today gave assent to promulgate the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018.

The Ordinance provides significant relief to home buyers by recognizing their status as financial creditors. This would give them due representation in the Committee of Creditors and make them an integral part of the decision making process. It will also enable home buyers to invoke Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016 against errant developers. Another major beneficiary would be Micro, Small and Medium Sector Enterprises (MSME), which form the backbone of the Indian economy as the biggest employer, next only to the agriculture sector. Recognizing the importance of MSME Sector in terms of employment generation and economic growth, the Ordinance empowers the Government to provide them with a special dispensation under the Code. The immediate benefit it provides is that, it does not disqualify the promoter to bid for his enterprise undergoing Corporate Insolvency Resolution Process (CIRP) provided he is not a willful defaulter and does not attract other disqualifications not related to default. It also empowers the Central Government to allow further exemptions or modifications with respect to the MSME Sector, if required, in public interest.
In order to protect the sanctity of the CIRP, the Ordinance lays down a strict procedure if an applicant wants to withdraw a case after its admission under IBC 2016. Henceforth, such withdrawal would be permissible only with the approval of the Committee of Creditors with 90 percent of the voting share. Furthermore, such withdrawal will only be permissible before publication of notice inviting Expressions of Interest (EoI). In other words, there can be no withdrawal once the commercial process of EoIs and bids commences. Separately, the Regulations will bring in further clarity by laying down mandatory timelines, processes and procedures for corporate insolvency resolution process. Some of the specific issues that would be addressed include non-entertainment of late bids, no negotiation with the late bidders and a well laid down procedure for maximizing value of assets.
With a view to encouraging resolution as opposed to liquidation, the voting threshold has been brought down to 66 percent from 75 percent for all major decisions such as approval of resolution plan, extension of CIRP period, etc. Further, in order to facilitate the corporate debtor to continue as a going concern during the CIRP, the voting threshold for routine decisions has been reduced to 51%.
The Ordinance also provides for a mechanism to allow participation of security holders, deposit holders and all other classes of financial creditors that exceed a certain number, in meetings of the Committee of Creditors, through the authorized representation.
The existing Section 29(A) of the IBC, 2016 has also been fine-tuned to exempt pure play financial entities from being disqualified on account of NPA. Similarly, a resolution application holding an NPA by virtue of acquiring it in the past under the IBC, 2016, has been provided with a three-year cooling-off period, from the date of such acquisition. In other words, such NPA shall not disqualify the resolution application during the currency of the three-year grace period.
Taking into account the wide range of disqualifications contained in Section 29(A) of the Code, the Ordinance provides that the Resolution Applicant shall submit an affidavit certifying its eligibility to bid. This places the primary onus on the resolution applicant to certify its eligibility.
The Ordinance provides for a minimum one-year grace period for the successful resolution applicant to fulfill various statutory obligations required under different laws. This would go a long way in enabling the new management to successfully implement the resolution plan.
The other changes brought about by the Ordinance include non-applicability of moratorium period to enforcement of guarantee; introducing the requirement of special resolution for corporate debtors to themselves trigger insolvency resolution under the Code; liberalizing terms and conditions of interim finance to facilitate financing of corporate debtor during CIRP period; and giving the IBBI a specific development role along with powers to levy fee in respect of services rendered.
The above mentioned changes are expected to further strengthen the Insolvency Resolution Framework in the country and produce better outcomes in terms ofresolution as opposed to liquidation, time taken, cost incurred and recovery rate. (Source: PIB)

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President Approves Promulgation of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018.