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About bhumesh

Bhumesh Verma is Managing Partner of Corp Comm Legal, a Delhi-headquartered Law firm. He is a senior corporate lawyer and author. A law graduate from Campus Law Centre, Delhi University (1994), he started his career at Ajay Bahl & Co. (now part of AZB & Partners) and went on to become partner at some of the leading Indian law firms.

He was selected as a Chevening Scholar in 2000 by the UK government. During this scholarship, he studied at the College of Law at York and worked with a big London law firm.

Currently, he is ranked among Top 100 Indian Lawyers by Indian Business Law Journal (“IBLJ”).

He has advised clients from more than 50 countries on M&A, inbound and outbound FDI, incorporation of companies, regulatory approvals and compliances, joint ventures, financial and technical collaborations, private equity, venture capital, corporate and securities laws, commercial agreements, exchange control laws, structuring cross-border transactions and strategy on legal and business issues.

He is a keen reader, prolific speaker and writer. He has contributed to in-house journals of many international law firms on India law

He is guest faculty with law colleges and online legal education portals too and conduct workshops on corporate laws and drafting skills. 


Question Marks on Efficacy…

The doctrine of constructive notice is often criticised for being used extensively and harshly against the parties, particularly in property related matters. In certain situations, the parties might not have the means or resources to inquire or acquire knowledge about the title of a property and other related information.

In India, it is a major problem to prove the title of a property. This is because in India the system of “presumptive titles” is prevalent where title documents are not certified by the State. They remain private documents and do not get the status of public records. This is because the present system under the Registration Act, 1908 only provides for registration of deeds and documents. Moreover even though the Transfer of Property Act, 1882 mandates compulsory registration of transfer of immovable property, there is still lack of proper documentation in this regard. More often than not, this contributes to unsatisfactory state of affairs in conveyancing the transfer of legal title of a property from one person to another.

Due to the lack of clarity in the title of ownership, the onus to inquire and confirm about the ownership and other title related facts lies with the buyer. It is difficult for a buyer to ascertain such facts due to the existing ambiguity and lack of conclusive ownership. A conclusive title may be defined as an unassailable and conclusive proof of ownership of property. The Ministry of Rural Development had prepared a Model Land Titling Bill, 2011, wherein it proposed to set up a Title Registration Authority and an Appellate Tribunal. The conclusive title system provides for certainty of title to land. The proposed system registers the title gives finality and indefeasible rights which cannot be overturned or annulled. Therefore, it does away with repeated, imperfect and costly examination of past titles which is often a problem to the parties while acquiring all the information related to the property.

The court imputes constructive notice on parties in cases of failure to find out all facts related to the title of the party. In certain situations the implication of the doctrine of constructive notice can be harsh and unreasonable on the parties as this notice is implied irrespective of the difficulties in acquiring complete knowledge of the title deeds. The title documents are not certified by the State and therefore remain private, making it very difficult for the parties to locate the documents and find out all the information. The doctrine of constructive notice, however, fails to recognise the ground realities and practical difficulties and tends to arbitrarily impose notice on the parties on their failure to ascertain and verify certain facts for safeguarding his one interest.

Conclusive title of ownership removes the scope of bona fide mistakes as to the past titles or existing burdens affecting the subject property. It also removes the ever-present possibility of fraud by duplication or suppression of deeds, and gives State-guaranteed safety. A conclusive title system requires a single agency to handle property records. Moreover, such single agency should at any given moment mirror the ground reality of the property records. This is known as the mirror principle. In addition, the curtain principle should also be applicable. This principle requires that the record of a title should depict the conclusive ownership status and probing into past transactions and titles of the property should become unnecessary.

Once a property is registered with the aforementioned land titling centre, there shall be a detailed title search including probing into past ownership, transactions and litigation history (if any) to establish non-encumbrance on the land. Thus, before purchasing a property, the buyer would have a clear understanding of the ownership issues and past record. Hence, granting of conclusive title of ownership will make the doctrine of constructive notice redundant and inapplicable to the parties because then there shall be no ambiguity with regard to the title of a property and a court shall not have to impute constructive notice on any party due to their failure to acquire the desired knowledge. This system is followed in Australia, Canada and the United Kingdom wherein one has to prove conclusive title of the property which is thereafter registered. Thereafter, the titleholder registered with the State cannot be dispossessed.

Constructive notice is the equity which treats a man who ought to have known a fact, as if he actually does know it. It presupposes, that in property transactions, a transferee ought to ascertain and verify certain facts for safeguarding his one interest. These facts may relate to the property or the transferor. The basic objective behind these inquiries and verifications is to find whether the property sought to be transferred is free from any charges or encumbrances and whether the transferor is eligible to convey a valid title to the transferee. The rule that applies here is that when a prudent man enters into the market, he would like to take the property free from any charge or encumbrances. Therefore, the rule of “caveat emptor” or “buyer beware” applies here and the transferee has to make inquiry about (a) whether the transferor is competent to make the transfer; (b) whether there is a charge due over the property; and (c) whether any person has temporary or permanent claim over the property.

Constructive notice is only imputed in situations where a person has means of knowing a particular fact but has failed to do so. There exists circumstances which ought to put him on an inquiry, which if prosecuted would lead to discovery of it. However, if the person has no means or opportunities to obtain information about something, notice cannot be imputed on him about that thing. Thus, when the purchaser does not have the slightest idea or suspicion about any earlier agreement entered into, far away from the place where the property is situated, it cannot be said that there was any wilful abstention from the party.

Therefore, the theory upon which courts proceed in holding possession to be constructive notice of whatever rights the occupant may have in the premises is that possession, being prima facie evidence of some interest in the land by the tenant, should normally place a purchaser upon guard and lead him to investigate the extent and nature of such interest. Any failure on his part to make inquiry is, therefore regarded as an exhibition of negligence or bad faith which ought to place him in no better position than that of a purchaser with full knowledge of the adverse claim.

However, in certain situations, this doctrine has been extended to cases hardly within its jurisdiction. For instance, in a case, it was held that possession by one tenant in common is constructive notice of an unrecorded conveyance to him from his co-tenant as against subsequent mortgagee of the latter who had no actual notice. As the object of registry system is to facilitate transfers of property, the purchaser ought, unless there is some potent reason to the contrary, to be able to rely upon the registered records.

In company law parlance, the effect of the doctrine of constructive notice is harsh on the outsider who is entering into a contract with the company because that person is deemed to have a constructive notice of the contents of the documents of the company. In case of default of any condition, the outsider cannot claim relief on the ground that he was unaware of the powers of the company in case of ultra vires of the company.

Moreover, this doctrine does not take notice of the realities of business life because people know a company mostly through the reputation of its promoters and officers and not through its documents. As an antithesis, a new theory called the doctrine of indoor management has been evolved by the courts. The doctrine of constructive notice seeks to protect the company against the outsider; whereas the doctrine of indoor management operates to protect outsiders against the company. The rule of indoor management is based upon obvious reasons of convenience in business relations.

Firstly, the memorandum and articles of association are public documents, open to public documents. However, the details of internal procedures are not thus open to public inspection. Therefore, as per the application of this theory, an outsider is presumed to know the constitution of a company but not what may or may not have taken place within the doors that are closed to him. Moreover, as discussed above the passing of the Land Titling Bill proposed in 2008 shall provide conclusive title of ownership which would in turn reduce if not remove the ambiguity surrounding the information related to the past and present titles.

A shift from the presumptive titling system to the conclusive titling system for recording land titles will make the use of the doctrine of constructive notice redundant as the buyer will only have to prove the conclusive title of the property.



Till about 30 years ago, legal profession in India was assumed to be a very elite profession, made only for those who were very resourceful and born with a silver spoon or had the profession running in the family for generations.

There is a marked change in market perception in the eyes of parents, students and the society about the legal profession. Law, as a career, is quite glamourous today (did you see “Veere Di Wedding?).

You can see so many coaching institutions mushrooming in every nook and corner of big, medium and small cities. The aspirants are charmed by the business newspapers headlines reporting Campus recruitment by Big 5 law firms and ‘packages’, big law firms’ turnover in millions of dollars, legal websites reporting partner moves in Indian and foreign law firms, ex- partners setting up new boutique firms every now and then and so on.

The legal profession seems very rosy and hunky dory from outside – every potential law student feels she just has to crack CLAT, secure admission in a good National Law University (NLU) and the rest of her life is sorted thereafter.

However, the proverbial saying is 

(i) The grass is always greener on the other side or the slightly varied version, 

(ii) Apples are always juicier in your neighbour’s orchid. 

It is not easy to become a lawyer; becoming a successful lawyer is more difficult; and getting good legal education is the toughest part.

After spending 10 years in the profession (may be a bit successfully in others’ eyes due to a British Chevening scholarship and otherwise), I started getting invitations to contribute to the students’ fraternity by way of guest lectures and articles, etc. Therefore, I have had the opportunity to interact with the number of law schools, teachers and students in last 15 years across India. Some of my observations of the state of legal education in India based on my experience and feedback from academic community are as under.

There are broadly 3 categories of law colleges in India.
Category A. There are 20 plus NLUs in India today with around 3,000 seats – most of these are excellent institutions with best academic brains, amenities, libraries, all round development facilities, relationship with the law firms for internships and placements of students, etc. No wonder there are about 50,000 aspirants for these seats.
Category B. Below NLUs, there would be around 100-150, maximum 200 good law colleges in India mostly affiliated with good universities and having genuine rankings for their education standards. Most of the 47,000 odd students who do not secure a place in NLUs manage a place in these colleges mostly through an entrance exam.
Category C. This is the scariest part of the Indian legal education pie. Apparently, there are 1,000 plus other law colleges in India located here, there, everywhere or even nowhere. About 50,000 students enrol in such colleges every year - there may or may not be an entrance exam.

Lack of Good teachers
Teachers are the backbone of the education sector. If the system cannot attract the best talent for teaching, no good students will emerge. Teaching is assumed to be very monotonous and much less paying and glamourous than a law career. Sad but true, teaching is amongst the lowest paying job for professionals today. As a result, teaching is very low among career options of most of law students. This needs to change.
Very few law graduates wish to pursue Masters or further studies in law. Those who do prefer studying in foreign universities to provide edge to their cv. Again, if they wish to teach after such additional qualifications, they would prefer to teach in foreign institutions for better remuneration, research facilities and living standards.
Due to this apathy towards teaching, even NLU and other eminent institutions struggle at times to get good teachers for all the courses. The third category or the colleges we discussed above does not care. Whosoever is at fault, students are the sufferers.

Inadequate infrastructure
Apart from good teachers, an institution requires world-class infrastructure to create a conducive atmosphere for studies and encourage ideas. Today is no age of blackboard and chalk (or should  I say, whiteboard and marker these days!). A good lot of investment is required in this regard. A spacious and clean campus with computers, online search tools, latest communication technologies are need of the hour, just to name a few facilities. Some NLUs are better off in this regard but other institutions lag in this regard, although some private universities can afford such systems due to their deep pockets and the hefty amount of fees they charge from students.

Stress on academic knowledge
Most of our law hardcore academicians as some of them may have got into teaching straightaway after their colleges are still living in the old era of cramming and rote – there is less or none exposure to practical aspects of law and encouragement to progressive thinking. At many places, majority of the faculty members are studies and never practiced in courts or a law firm.  Their knowledge and teaching, therefore, may lack a practical dimension.
Resultantly, the students are therefore at a loss when they come out of the law college and are expected to perform in a courtroom or the law firm from day one. It is a nightmare particularly for students who have not had good internship or moot courts exposure.

No Quality control on students and teachers
NLUs have a robust system of scanning potential students through CLAT. Most other law colleges too have an entrance test and some screen the students through interviews as well. Majority of the colleges however, do not have such systems in place – money is the only entry ticket. Whosoever can afford an admission gets entry.
Similarly, there has to be quality control in faculty selection as well. how it works for the students’ entry works for faculty selection as well – they’d hire anyone who is willing to work at a low compensation, anyone is hardly bothered about the experience and quality of the teachers there.

As a result of the problems highlighted above, the students are at a loss. Some of them are undeservingly becoming lawyers without having attended college or learning anything there. Some colleges are only degree printing press – no good faculty, no classes, no facilities, no practical training.
I have heard there is rampant corruption in the concerned quarters which allows creation, sustenance and growth of such institutions (if they can be called that in the first place). Many people who are employed full time in government service and elsewhere, company secretaries in practice or people who just want a law degree for some fancy reason take admission and obtain a law degree without any attendance, classes, studies, even exams. This includes some of our politicians as well – we all know how a former Law Minister of a State having obtained such a degree.
30 years back, many students used to take admission in LL.B. in Delhi University just so that they can get a hostel / P.G. in Delhi, prepare for UPSC and get a DTC bus pass (Rs. 12.50 a month). 90% of these students were not serious about legal studies. Ultimately, Delhi University did away with open admissions and introduced an entrance test system in 1991 (yours truly was among the first batch!).
Whosoever is at fault, the government in funding the government institutions, private institutions minting money out of students but not spending much on them or plain and simple degree machine colleges, the students are the worst sufferers.

Action at Bar Council end
First and foremost, our Bar Council has to play a pro-active role to ensure world-class standards in legal education. Therefore, it must be stricter with its recognition norms for law colleges and there should be no compromise on some standards.
Only colleges having adequate background in education, well known promoters, financial resources, infrastructure, faculty, campus, etc. should be allowed to engage in legal education. There should be frequent inspections and colleges which do not adhere to prescribed norms should be barred from offering law courses.
People with experience and impeccable integrity should constitute the bodies inspecting and deciding the recognition of law colleges.

High entry barriers
India is witnessing an oversupply of lawyers for last few years. Today, India probably has most number of lawyers after the US. Reasons being so much population and lawyer-making- machines in the form of 1,300 odd colleges awarding law degrees.
As an example, most prestigious colleges in Delhi University can only admit students scoring above 95% in their Class 12 exams (yes, the cut-offs are crazy). However, it seems that everyone assumes that getting entry into a prestigious law school is a child’s game – you just need good CLAT coaching and your marks in Class 12 don’t matter. This culture needs to change. One should pursue Class 12 most seriously, whatever field one were to chose as a professional course or a vocation.
The eligibility criteria at entrance test and admission level for law schools may be enhanced and proficiency in the language which is the medium of instruction should be a must. I have seen students who have not studied English even at Class 10 level applying in law institutions where English is the medium of instruction. Unless someone is so brilliant that she can pick up English language out of nowhere (at graduation level), these students may not stand a chance at picking up anything.
An ecosystem should be built where only (or at least, mostly) serious students who actually wish to study and pursue law should be inducted in law courses. Today, we see so many students who pursue law, obtain a degree and find later that what they studied (if they did actually) wasn’t of good standard and good enough to make them sustain in the legal profession. According to some information, a majority of the law graduates are not practicing law after 5 years. We can certainly do with less new but better lawyers.

Higher investment in infrastructure
The government and the promoters of private colleges must invest more in the infrastructure and ecosystem which is conducive for study. A bigger part of the government’s budget should be allotted to education in general and law education in particular – the efforts so far aren’t simply good enough. This is the reason why the Category C colleges come into existence in the first place and flourish – if Category A and B were enough in number and good enough, there would be no Category C.

Updating the curriculum
The content being taught at our law colleges should be constantly upgraded and updated taking note of the national and international research and developments in the legal ecosystem. Outdated and archaic subjects and teaching styles should be done away with.

Practical Engagement outside College
There must be enhanced interaction among the Bar, Bench and Academia. Students should be exposed to the ‘real’ legal world by way of more outings and interactions – it could be moot courts, training in courts, working with seasoned practitioners, internships in companies, law firms, NGOs etc. Good law colleges have robust systems built-in for this regard but most colleges in B and C categories lack.
Inviting professionals to interact with students
Practicing judges and lawyers may have a lot to share with students in terms of their knowledge, experience, exposure, hindsight and practical insights. Regular interactions help students immensely. Judges have very limited time for such events but there are more lawyers than judges and lawyers may afford more flexibility in interacting with students – guest lectures, specific modules, fast-track courses, bootcamps, etc. I, for one, enjoy interacting with students and the process is very interactive and interesting, never gets boring (sometimes, monologue-ish lectures do get boring). My sense is that students enjoy interaction with outsiders (be it politicians, industry experts, judges, lawyers, etc.) more than that with the regulars and insiders – the colleges should take note and enhance the interaction. Bringing such luminaries at college is much easier than taking all the students to them in one go.
Inviting better adjunct faculty
This works both ways. Professionals should feel the need to contribute to the growth of legal fraternity by imparting education and law colleges should invite professionals on a regular basis. The UGC may relax the norms for eligibility criteria for teaching for outstanding professionals.

With the growing change in the legal education sector, the aforementioned concerns are to be addressed at the earliest. The need of the hour is to take reformative steps in making the sector more adaptive and receptive to the international legal education standards. Better infrastructure, improvement in the curriculum and the course structure, providing adequate incentives to teachers and regular checks at legal institutions can bring dynamic transformations to the discourse of legal education in India. Hope these words reach the concerned quarters and the bar, bench and academia work in tandem to make it better for the students.

Keyword Advertisement…

In today’s digital world, the internet is probably the most intrusive and effective way to make yourself known and available to the global community. In the last decade or so, online advertising has become the easiest way for corporates to advertise their products and services. The internet’s ability to find, attract and target customers is unmatchable.

Keyword advertising is one of the main tools that a lot of companies have been using to expand their internet presence. This form of advertising allows the products of the companies to appear on the search results of the customer when they search a particular phrase on the search engines. This has been triggered by the help of the search engines like Google and Yahoo which have created keyword advertisement programs that allow the advertisers to purchase certain words or phrases that would lead to their product.

For e.g., if a person was opening a new NGO in Dehradun and wanted to advertise the NGO on Google, the first step would be to create an online advertisement for the NGO. Thereafter, the person would choose certain terms that would lead to the advertisement being shown on Google. The person might purchase those words to lay the framework for keyword advertising.

The problem that surrounds the increasing use of keyword advertising is that of trademark violations. This field though requiring a lot of attention is still highly unsettled due to lack of sufficient and clear law or judicial understanding. The principle reason for the same deficiency is that most cases of keyword advertising do not reach court and are settled by the parties outside it.

The problem arises when companies buy keywords that are trade marks of unrelated third parties or even their competitors. This is done to allow its product to be shown on the search engine when the customers search for its competitors’ marks. To put it into context for instance like in the first example, the person opening the new NGO purchases Child Rights as a keyword, it may show the NGO advertisement every time a person searched Child Rights and You (CRY). Now, this seems to be an excellent move by the advertisers because the established keyword CRY will garner more views than its newly established NGO’s keywords.

This practice of using another company’s name in advertisements is also known as piggybacking and is often practised by companies in disguise to manipulate customers. The general idea that exists in judicial decisions is that the advertisers can bring in action if there is a confusion caused among consumers. While analysing trade mark violations with respect to keyword advertisements, the courts have mostly held that the “likelihood of confusion” is not obvious. However, this being a grey area has attracted a lot of diverse opinions by intellectual property rights (IPR) experts. Different courts have given different judgments in this regard. The courts have mostly restrained from holding the search engines liable for allotting such keywords. However, a conclusive determination on the issue is still awaited. Thus, let us analyse the “likelihood of confusion” in keyword advertisements.

The Trade Marks Act, 1999 deals with the legal issues related to trade mark infringement in India. It is defined as an infringement of exclusive rights attaching to a trade mark without the authorisation of the trade mark owner or any licensee. There are two types of remedies available to the owner of a trade mark for unauthorised use of its imitation by a third party. These remedies are an action for passing off in the case of an unregistered trade mark and an action for infringement in case of a registered trade mark. Moreover, there also exists a jurisdictional issue with regard to the competence of national courts to hear matters relating to keyword advertisements and the liability of search engines.

The essential function of trade mark law is to secure the real identity of any product. It is to provide a product with a secondary meaning which distinguishes it from other products. The “likelihood of confusion” is instrumental in determining whether a trade mark violation has taken place. This research is significant because there is no uniform standard with regard to the trade mark violations by the use of keyword advertisements. Therefore, the existing problem in relation to keyword advertisements is whether it has all the essentials of trade mark violations. Moreover, whether the search engines shall be liable for selling such keywords is another issue that exists today.

The issue of keyword advertising and the related trade mark infringement is still evolving in India as there is no binding decision on the same. The major reason for the lack of judicial authority over the same is that there are no particular laws and regulations that are governing keyword advertising. Development in the law on keyword trade mark infringement will enable the courts to analyse and rule on them effectively. However, with the increasing scope of online advertisements, the number of infringement suits is increasing worldwide. Most jurisdictions have refrained from ruling in favour of trade mark infringement or contributory infringement of search engines. As it was seen in Portakabin Ltd. v. Primakabin BV decided by the European Court of Justice (ECJ) in 2010, the tide is still in the favour of advertisers in such disputes.

The ECJ ruled in favour of Primakabin’s use of trademarked keywords while stating that:

A specialist reseller of second-hand goods under another person’s trade mark cannot be prohibited from using that mark to advertise to the public its resale activities unless the resale of those other goods risks seriously damaging the image which the proprietor has succeeded in creating for its mark.

With regard to the search engines liability, it was seen in Victor Andrew Wilson v. Yahoo! UK Ltd. that search engines cannot be held liable for the use of trademarked advertisements. The UK Court had opined that the search engine was not using the trade mark of the claimant and it was being used by the people who were browsing the term “Mr Spicy”. Thus, similar to the stand in the Netherlands, the UK Courts have also ruled in favour of the advertisers. Moreover, in France, the Court has held that Google is merely performing a technical and passive role and thus it cannot be held liable. As the search engine is not working for its own communication, but the communication of the customers, the liability shall only arise when Google is asked to take off the infringing keyword and it refrains from doing so.

The ECJ has held that there are four main cumulative conditions that must be shown to prove trade mark infringement. In order for trade mark infringement to occur, all four components shall be satisfied:

(i) the use must be in the course of trade;

(ii) the use must be made without the consent of the trade mark owner;

(iii) this use must relate to identical or similar products or services; and

(iv) the use must affect the functions of the mark.

Given the aforementioned grounds of trade mark infringement, keyword advertisements of the trade mark words may as well constitute trade mark infringement of the registered trade mark. Such tactics are invariably undertaken by rival companies involved in similar trade as of that of the trade mark owner. The rival companies use trademarked words as keywords without taking permission from the owner. This, therefore, is a dishonest practice and involves a use of symbol or mark that has been registered by another party. Further, most of the times, these companies produce products or provide services that are close substitutes of each other and thus keyword advertisements relate to identical and similar products and services.

Another question that merits an answer is whether the use of such keywords amount to loss to the owner of the trade mark. It has been argued that given the level of internet literacy, an average internet user does not know the difference between search results and advertisements and it is likely that a user will go to a link of other advertisers mistaking it to be the trademarked products advertisement. However, this argument does not stand given the increasing scope of online advertisements and online shopping. The internet has become the biggest platform for the exchange of goods and services. A lot of customers browse for particular products in the internet and are confused due to the advertisements of the rival companies. Since, it is the first advertisement that appears on the search result, more often than not, the customers end up landing on their websites.

It must be noted here that mostly, the new rival brands are trying to use the keywords of renowned trade marks to market their products are producing similar products or services. As these products or services are close substitutes of each other, the customers might be swayed to purchase the new companies’ goods or services as the newly marketed products are mostly cheaper in the market. Further, the customers become aware of the existence of such a rival brand and therefore the exclusivity of the trade mark owner does not remain the same and they may face substantial dip in their sales and profits. The initial confusion affects the economic gains of trade mark registration.

We conclude by saying that trade mark violation of trademarked keywords constitutes an infringement of trade mark by the rival advertiser. However, with regard to the liability of search engines, it shall depend upon the recognition of the trade mark. If it is too widely renowned trade mark for instance “Coke”, then the search engines should be held liable for putting it in the suggestion box for keywords. Sooner or later, such matters may start landing before appropriate courts for redressal and the uncertainty over this issue may then be settled by providing a conclusive determination.

India to embrace artificial…

Artificial intelligence (AI) is the intelligence demonstrated by machines, in contrast to natural intelligence (NI) which is displayed by humans and animals. AI is also known as machine intelligence.

The advent and continuous growth of AI are throwing up new possibilities, challenges, and debates each passing day. 

The entire world is considering AI as a boon and tool to transform the development prospects of existing technologies to another level – a number of countries and businesses have recognized the advantages of AI and started espousal of AI through its integrating AI into their business/economic/administrative regime.

Slowly but steadily, India too is joining this bandwagon to embrace AI on a large scale as the Central Government had entrusted Niti Aayog with the job of developing an AI plan at national level with international standards during the Union budget for 2018-19.

Accordingly, Niti Aayog has formulated a plan to establish an organizational system for the adoption and development of AI in the nation.

As a part of the AI plan, it is proposed to allocate funds worth INR 7,500 crore (over a billion US dollars in a span of 3 years period) for conception of a cloud computing platform (Airawat) and research institutes.

A high-level task force will be constituted to monitor the usage of funds for rolling out and implementation of AI plan. The task force body will be comprised of members from all central ministries and states along with the key professional in the AI industry.

A cabinet note could be placed in respect to the aforesaid plan before the newly formed government very soon for a final decision.

The basic notion behind the AI plan is to establish an organized institutional contrivance for handling AI matters coupled with formulation/enforcement of a transparent AI policy for the well being of the nation.

The major focus of AI plan is to facilitate financial funding for development of 5 centres of research excellence (CORE) and 20 international centres for transformational AI (ICTAI) and creation of AIRAWAT which can be easily accessible by everybody.

The selection of institutions and partners will be contingent on the formulation of associated guidelines – Financial funding for rolling out AI plan will be allocated phase wise based on the milestones perceived in the AI arena.

Niti Aayog has requested States and central ministries to recognize identify feasible and vital projects compatible to adopt and integrate AI.

It is crucial to educate all the concerned stakeholders (associated with recognized projects) about the eminence of AI and benefits of AI adoption into the process flow.

The primary target of the central government is to emerge as a key player amid emerging economies in the AI field – there is a vision and confidence that adoption of AI will play vital role in resolving certain key challenges associated with the social sectors (e.g., Education, Health, Agriculture, Urbanization and Mobility). 

As per the estimates, with the AI in its armor India could be capable to generate and add around USD 1 trillion in revenue to its Gross Domestic Product by 2035 which will reinforce the annual economic development of nation by 1.3%.

The central government’s recognition of the AI potential and the technologies/economic prospects is a positive sign and AI will definitely be instrumental in further development of Indian economy.

With right monitoring and execution of AI plan will undoubtedly facilitate the nation to come out as a key player in the AI arena and to generate more employment opportunities, economic resources and businesses.

Certificate of Practice…

Ever since the implementation of the Insolvency and Bankruptcy Code (IBC), qualified Insolvency Professionals (IP) have garnered a vital role in the Corporate Insolvency Resolution Process (CIRP). As a matter of fact, IPs are among the most important intrinsic parts of the entire CIRP ecosystem for the company facing IBC proceedings.

With the intent to bring about more accountability in the IPs fraternity - Insolvency and Bankruptcy Board of India (IBBI) is considering making it mandatory for the IPs to procure the certificate of practice (COP) in order to be qualified to practice as resolution/interim resolution professionals or liquidators.

The underlying intent is to reinforce the eligible parameters for IPs and to take the monitoring system of the IP’s functionality to next level. As per the proposal, each registered IP will be forced to procure a COP and get the renewal of such COP from Insolvency Professional Agency (IPA) on an annual basis.

The provision of renewal on annual basis is on equal footing with the line of practice for Chartered Accountants and Cost Accountants.

The advantage of COP system is that it will act as a regulatory check on IPs and make them more vigilant/responsible about performing their duties. Mandatory prerequisite of a COP will guarantee that the IPs against whom disciplinary action is pending won’t be competent to accept new cases.

IPs can barely afford any margin for error in discharging their duties/responsibilities as any sort of negligence will result in non-renewal of COP and will rule out such IPs from practicing as a resolution professional.

From the insolvency professional perspective, it will endow such professional with the option to decide (to renew or not to renew) the COP.

However, absence of specific guidance in relation to the requisite “A fit and proper person” could become contentious – It is imperative to issue certain guidelines in this regard to be content with the prospect of timely resolution of CIRP.

Besides, IBBI has also proposed certain modifications to IP regulations to accommodate the ‘Conflict of Interest’ issues.

The proposal to prohibit IPs, their relatives and related parties from practicing as resolution professional/liquidator in a transaction provided such persons have rendered professional services in other capacity in the said transaction is under consideration with the IBBI.

As a downside, inclusion of the transactions associated with the IP’s relatives under the realm of conflict of interest may disproportionately impede the functionality of the genuine/sincere IPs.

IBBI should formulate additional criteria in relation to close business association amid IPs and their relatives to strike right balance amid the functionality of IPs and relatives in related party transactions without compromising the real crux of the IBBI proposals.

Another proposal which is on the cards is that the refusal of COP renewal to the IPs professionals aged above 70 years with the target to encourage younger IPs and enable the young guns to flourish in the IPs regime with the assistance of senior IPs.

Inception of COP is quite likely to augment the quality of resolution professionals’ work and will reinforce the success prospects of CIRP process to next level.

However, renewal of COP on annual basis may act as an irritant and a cause for concern as such provision could make the renewal process unyielding and cumbersome for the IPs resulting in uncertainty in the accessibility of IPs. It is necessary to establish clear cut guidelines in relation to renewal process to ensure that renewal process won’t be a burdensome affair to qualified IPs.

The proposal of COP and associated prospects should serve as an additional layer of scrutiny and bring more transparency/accountability in the functionality of IPs – The enforcement of the IBBI proposals along with sorting out the associated hiccups will ultimately uplift the professional ethics and standards of IPs fraternity.

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