ICSI-DEC-18.qxd 12/7/2012 4:35 PM Page 1 ICSI-DEC-18.qxd 12/7/2012 4:35 PM Page 2 ICSI-DEC-18.qxd 12/7/2012 4:35 PM Page 3 ISSN 0972-1983 12 CHARTERED SECRETARY R The Council [ Registered under Trade Marks Act, 1999 ] President Nesar Ahmad Vol. : XLII No. 12 Pp 1489-1632 December - 2012 Vice President S. N. Ananthasubramanian From the Members Anil Murarka (in alphabetical order) 1496 Ardhendu Sen President Arun Balakrishnan Ashok Kumar Pareek Atul Hasmukhrai Mehta Legal From the Atul Mittal 1574 1584 B. Narasimhan (LW-126-135) World (GN-265-273) Government Gopalakrishna Hegde 1594 News from the 1632 Our Harish Kumar Vaid Institute Members P. Sesh Kumar Pradeep Kumar Mittal SPECIAL FEATURE Renuka Kumar (Ms.) ICSI-The Triumph of Leadership 1498 Sanjay Grover Sridharan R ARTICLES ( A 479-535 ) Sudhir Babu C Supreme Court's decision in Sahara India Real Estate Corporation Ltd. v. SEBI The lesson to learn from 1516 U D Choubey (Dr.) Attitudinal shift in Corporate Functioning vis-à-vis Concern for Society 1526 Umesh Harjivandas Ved Political Economy of Neo-Governments 1530 Vikas Yashwant Khare Challenges in Formulation of Regulations Principle v. Rule based Regulations 1545 Reference to Shome Committee Regarding Retrospective Amendments - Secretary & Hastily Conceived and Imperfectly Executed 1550 Chief Executive Officer N. K. Jain Human Rights Violations by Companies in India 1555 Natco Pharma Ltd v. Bayer Corporation Compulsory Licence for a Editorial Advisory Board Pharmaceutical Product 1566 Annual Subscription Chairman Justice D. R. Deshmukh Inland : Rs. 1000 (Rs. 500 for Students of the ICSI) Foreign : $100; £60 (surface mail) Single Copy : Rs. 100 Members Chartered Secretary is normally published in the first week of every (in alphabetical order) D.P. Dash month. Non-receipt of any issue should be notified within that month. Articles on subjects of interest to company secretaries are welcome. G.R. Bhatia Views expressed by contributors are their own and the Institute does Girish Ahuja (Dr.) not accept any responsibility. The Institute is not in any way Harish K. Vaid responsible for the result of any action taken on the basis of the advertisement published in the journal. All rights reserved. No part K S Chalapati Rao (Prof.) of the journal may be reproduced or copied in any form by any means Nawal Kishor (Prof.) without the written permission of the Institute. The write ups of this Om Prakash Dani issue are also available on the website of the Institute. Pavan Kumar Vijay Edited, Printed & Published by R.S. Nigam (Prof.) N. K. Jain for The Institute of Company Secretaries of India, Renu Budhiraja (Ms.) ICSI House , 22, Institutional Area, Lodi Road, New Delhi- 110 003. Phones : 41504444, 45341000, Grams : COMPSEC Sanjeev Kumar (Dr.) Fax : 91-11-24626727 T V Narayanaswamy E-Mail : [email protected] Vinod K. Singhania (Dr.) Website : http://www.icsi.edu Design & Printed at Editor & Publisher N. K. Jain M. P. Printers B-220, Phase II, Noida-201305 Consulting Editor V. Gopalan Gautam Budh Nagar, U. P. - India Legal Correspondent T. K. A. Padmanabhan December 1489 CHARTERED SECRETARY 2012 ICSI-DEC-18.qxd 12/7/2012 4:35 PM Page 4 IMAGES 12th ICSI National Award for Excellence in Corporate 01 Governance 2012 - Jury Meeting - President Nesar Ahmad welcoming Hon'ble Jus. M.N. Venkatachaliah (Former Chief Justice of India and Chairman of the Jury). 12th ICSI National Award for Excellence in Corporate 02 Governance 2012 - Jury Meeting in Progress: Jus. M.N. Venkatachaliah chairing the meeting. Others sitting from left: Nesar Ahmad, Gopalakrishna Hegde, Naresh Chandra (Former Cabinet Secretary, Govt. of India), Y C Deveshwar (Chairman, ITC Ltd), Y M Deosthalee (CMD, L&T Finance Holdings Ltd.), Zia Mody (Managing Partner, AZB and Partners), P K Choudhury (Vice-Chairman & Group CEO, 01 ICRA Ltd) and M.K. Gupta. Jury Meeting in Progress ( Contd.) Sitting from Right: N.K. 03 Jain, Justice N Santosh Hegde (Former Judge, Supreme Court of India), Dr. M.B. Athreya (Management Consultant), T.S. Krishna Murthy (Former Chief Election Commissioner of India), G.V. Prasad (Vice Chairman & CEO, Dr. Reddy's Laboratories Ltd.), Sutanu Sinha, Dr. S.K. Dixit, Alka Kapoor and Sonia Baijal. Chairman and Members of the Jury seen with Team ICSI - 04 Sitting from Left: Y M Deosthalee, Dr. M B Athreya, Zia Mody, Justice N Santosh Hegde, Justice M N Venkatachaliah, Naresh Chandra, P K Choudhury, Y C Deveshwar, T.S. Krishna Murthy and G V Prasad (standing 7 th from left.) ICSI Convocation 2012 held at Kolkata - Newly admitted 05 Member receiving his membership Certificate from Chief Guest Dr. Samir Kumar Bandhyopadhyay (Vice Chancellor, West Bengal University of Technology). Others standing 02 from Left: N.K. Jain, Nesar Ahmad and Ashok Pareek. ICSI Convocation 2012 held at Mumbai ( ICSI - CCGRT) 06 - Newly admitted Member receiving his membership Certificate from Chief Guest Dr. A.K. Sengupta (Director & Chair Professor of Finance Area, SIES College of Management Studies, Nerul). Others standing from Left: N K Jain, Atul Mehta, Nesar Ahmad, S.N. Ananthasubramanian and Mahavir Lunawat. ICSI Convocation 2012 held at New Delhi - Standing 07 from Left: N K Jain, Nesar Ahmad, Chief Guest Dr. Ashok K Chauhan { Founder President of the Ritnand Belved Education Foundation (Amity Education Group)}, S N Ananthasubramanian and Rajiv Bajaj. ICSI Convocation 2012 held at Chennai - Standing on the 08 dais from Left: S S Marthi, Nesar Ahmad, Chief Guest Prof. Dr. S Sudalaimuthu (Vice Chancellor, Alagappa University, Tamilnadu), R Sridharan and N K Jain. 03 ICSI Convocation 2012 held at New Delhi- Group photo of 09 newly admitted Members of the Institute. ICSI Convocation 2012 held at New Delhi - A view of the 10 dignitaries, invitees and newly admitted Members of the Institute. EIRC - 23rd Regional Conference of Company Secretaries - 11 Nesar Ahmad lighting the lamp to mark the inauguration. Others standing from Left: B.P. Dhanuka, Ranjeet Kanodia, Deepak Khaitan, D. Bandopadhyay (RoC, West Bengal) and Ashok Pareek. EIRC - Bhubaneswar Chapter - Programme on Modernised 12 Competition Regime in India - G.R. Bhatia (Former ADG, CCI) addressing. Others sitting on the dais from Left: Debadatta Mohapatra, J.B. Das and A. Acharya. December 04 2012 CHARTERED SECRETARY 1490 ICSI-DEC-18.qxd 12/7/2012 4:35 PM Page 5 05 06 07 08 09 10 12 December 11 1491 CHARTERED SECRETARY 2012 ICSI-DEC-18.qxd 12/7/2012 4:35 PM Page 6 At a Glance Companies are also addressing a much larger number of stakeholders than Special Feature p- 1498 in the past. Social Responsibility may be no panacea for all business social problems, but it is something that must guide business in the future. ICSI-The Triumph of Leadership Businesses are being asked to assume broader responsibilities to society than ever before and to serve a wide range of human values. In as much N. K. Jain as business exists to serve society, its future will depend on the quality of he write-up captures briefly evolution of CS profession and management's response to the changing expectations of the public. CSR is T transformation of ICSI in the last decade (2003-2012) in both successful only to the extent that it adds to the bottom-line. CSR can be qualitative and quantitative terms. The period has witnessed effective brand sustainable only so long as it continues to add value to corporate success. building, collaborations, credible research studies and publications, big CSR has an upbeat future in the global business arena. The `business push for globalization of the profession, series of path breaking initiatives on case' for CSR will always be the crux for success in CSR. While all practices Corporate Governance, CSR and green Initiatives, Investor Education and of CSR cannot be profitable, the concept of Strategic Corporate Social Awareness, revision of syllabus to make it more contemporary, enhanced Responsibility can be adopted through policies, programmes and processes, which yield substantial business related benefits to the firm. recognitions for CS profession, use of technology for better services to its stakeholders, increased interface with government and regulators, Political Economy of infrastructure development, human resource development, etc. During the p- 1530 period ICSI has witnessed record increase in revenue, general reserves, Neo-Governments surplus, members admitted, students registered and students enrolled for examination. M. S. Sahoo he neo-governments provide public goods in public interest just as the T government does. They have responsibilities and powers similar to Articles (A 479 - 535) p- 1516 those of the government. Yet they are not the government. The emergence of neo-governments to share governance with the government is a hard reality and the governance through neo-governments constitutes the most Supreme Court's decision in Sahara important governance reforms in the last few decades. There is a need for p- 1516 a comprehensive review of the experience so far of this mode of India Real Estate Corporation Ltd. governance and use the learning to improve the spacing and design of the neo-governments within the constitutional schema. Based on the review, v. SEBI The lesson to learn from critical overarching principles may be written into a charter to guide the establishment as well as operations of the neo-governments irrespective of Dr. K. R. Chandratre the sphere of governance. n 31st August 2012 the Supreme Court by a landmark judgment, directed two companies of the Sahara Group, (which had issued O Challenges in Formulation of p- Optionally Fully Convertible Debentures (OFCDs) by a private placement 1545 offer by the boards of the two companies after special resolutions under Regulations Principle v. Rule based section 81(1A) were passed at their general meetings, and an Information Regulations Memorandum (IM) was circulated among prospective investors after it was filed with the Registrar of Companies purportedly under section 60B of the Dr.