s Legal world: 2008

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Wednesday, September 10, 2008

CA to Donate to the Patent Commons, Signs IBM Cross-Licensing Agreement

CA to Donate to the Patent Commons, Signs IBM Cross-Licensing Agreement
Computer Associates (CA) announces:
Computer Associates . . . today pledged open access to key innovations covered by 14 of its U.S. patents — and counterparts of these patents issued in other countries — for individuals and groups working on open source software. CA also announced it has reached a long-term, patent cross license agreement with IBM, creating an exchange of license rights and releases between the companies.In making its patent pledge to the open source community, CA is joining IBM in encouraging other companies to create an industry-wide "patent commons" in which patents are pledged royalty-free to further innovation in areas of broad interest to developers and users of information technology.

Craig Makes Second Bid to Withdraw Guilty Plea Over Bathroom Sting

Craig Makes Second Bid to Withdraw Guilty Plea Over Bathroom Sting

Posted by Dan Slater
Sen. Larry Craig, R-Idaho, takes the oath of office during a mock swearing in ceremony in the Old Senate Chamber on Capitol Hill in Washington, Jan. 7, 2003. (AP/Evan Vucci)
Last time we delved into the story of U.S. Senator Larry Craig, a Minnesota judge had rejected Craig’s bid to withdraw his guilty plea stemming from a sex sting arrest in a Minneapolis airport bathroom. Judge Charles Porter, a member of the Law Blog Moustache Society, found Craig had entered the guilty plea “accurately, voluntarily and intelligently” and that it was too late to withdraw his admission.
Lawyers for the Idaho Republican gave it another shot at the state Court of Appeals. According to a report in the Star Tribune, his lawyer, Billy Martin, argued to a three-judge panel that the case against Craig fails to show he participated in criminal conduct.First, a Larry Craig Refresher: Craig was caught in June, 2007, by Sgt. Dave Karsnia in a sting operation at the airport. Karsnia was in a stall and said Craig peered in for more than two minutes from three feet away. When the next stall opened, Craig went in and then tapped his foot and waved his hand under the stall - behavior indicative of an interest in a sexual encounter, the complaint said.
Today, the panel reportedly gave Martin some push-back. When Martin talked about how Craig used a mail-in plea form rather than appear in person and lost a chance for an on-the-record discussion before the court about the charge against him, one of the judges asked, “didn’t [Craig] waive the right to a colloquy when he signed the form?”
Martin said he did but he did not waive the legal right that the complaint against him be adequate. He also argued that Craig’s behavior didn’t meet the standard for disorderly conduct because the law requires behavior to affect “others.”
Martin said Craig was responding to Karsnia’s hand swiping and the senator’s behavior “was invited conduct.” Also, he was merely standing in front of a door waiting for a stall to open and that behavior “has not tipped the balance to guilt beyond a reasonable doubt.” Martin said the judges “shouldn’t have to guess” what was happening from an inadequate record.
In response, prosecutor Chris Renz said the plea should be allowed to stand because Craig failed to show a “lack of adequate judicial review.” He argued that by using the mail-in plea, Craig waived his rights to appear and question the evidence.

Constitutionality of reverse onus clauses

Constitutionality of reverse onus clauses

This is a guest post from Karan Lahiri, a final year student at National Law School, Bangalore, on a recent judgment on the constitutionality of reverse onus clauses:'
Noor Aga v. State of Punjab examines the ‘reverse burden’ of proof in Sections 35 and 54 of the Narcotic Drugs and Psychotropic Substances Act, 1985.
The interesting portions of this judgment deal with the constitutionality of this ‘reverse burden’.
Though this has been upheld on previous occasions by the Supreme Court and certainly could not have been struck down in this matter by the division bench consisting of Justice Sinha and Justice Sirpurkar, I feel that this is the first matter which has really placed ‘reverse burden’ under a constitutional lens.
In a nutshell, the Appellant was an Afghan national from whom a quantity of heroin was allegedly recovered at Raja Sansi Airport, Amritsar, apparently concealed in the secret compartment of a carton containing grapes. The reverse burden placed on him was due to Sections 35 and 54 of the NDPS Act, as mentioned earlier. Section 35 states:-“In any prosecution for an offence under this Act which requires a culpable mental state of the accused, the court shall presume the existence of such mental state but it shall be a defence for the accused to prove the fact that he had no such mental state with respect to the act charged as an offence in that prosecution.
”Section 54 states:-“In trials under this Act, it may be presumed, unless and until the contrary is proved, that the accused has committed an offence under Chapter IV in respect of –(a) any narcotic drug or psychotropic substance;(b) any opium poppy, cannabis plant or coca plant growing on any land which he has cultivated;(c) any apparatus specially designed or any group of utensils specially adopted for the manufacture of any narcotic drug or psychotropic substance; ord) any materials which have undergone any process towards the manufacture of a narcotic drug or psychotropic substance, or any residue left of the materials from which any narcotic drug or psychotropic substance has been manufactured, for the possession of which he fails to account satisfactorily.”What is significant in this judgment is that it speaks of presumption of innocence as a human right.
While Justice Sinha invokes Article14(2) of the Intentional Convention on Civil and Political Rights, it is initially unclear as to how he plans to place this right in the context of the Constitution of India generally, as also how he plans to test the NDPS Act on the basis of this right in particular. The first important hint in this regard is the statement that merely placing the burden of proof on the accused would not render a provision doing so unconstitutional. Therefore, it is clear that there must be some counterweight when the burden is placed on the accused.
The judgment states:-“A right to be presumed innocent, subject to the establishment of certain foundational facts and burden of proof, to a certain extent, can be placed on an accused. It must be construed having regard to the other international conventions and having regard to the fact that it has been held to be constitutional. Thus, a statute may be constitutional but a prosecution thereunder may not be held to be one. Indisputably, civil liberties and rights of citizens must be upheld.”From this statement, one gets a sense that Justice Sinha seeks to scrutinize the proceedings under a law providing for a reverse burden more strictly than he seeks to scrutinize the law itself, especially since the judgment goes on to state that a stringent law requires stringent compliance with procedure.
It seems that this insistence stems from the right to fair trial, given that the following passage from the matter of South Africa in State v. Basson 2004, (6) BCLR 620 (CC), a war crimes case before the constitutional court of South Africa, has been cited with approval in the judgment:-“When allegations of such serious nature are at issue, and where the exemplary value of constitutionalism as against lawlessness is the very issue at stake, it is particularly important that the judicial and prosecutorial functions be undertaken with rigorous and principled respect for basic constitutional rights. The effective prosecution of war crimes and the rights of the accused to a fair trial are not antagonistic concepts. On the contrary, both stem from the same constitutional and humanitarian foundation, namely the need to uphold the rule of law and the basic principles of human dignity, equality and freedom.
”Here, it becomes clearer as to how reverse burden provisions are to be tested in the context of constitutional/human rights, given that the right to fair trial and human dignity are invoked to justify rigorous compliance with procedure. Enforcement of law and protection of citizen from the operation of injustice in the hands of the law enforcement machinery are the two factors to be balance according to Justice Sinha, and we finally discover the counterweight to a provision stipulating reverse burden where the judgment states that “[the] constitutionality of a penal provision placing burden of proof on an accused, thus, must be tested on the anvil of the State's responsibility to protect innocent citizens.”Put simply, this case acknowledges ‘presumption of innocence’ as a human right, but goes on to state that “limited inroads” might be made with respect to this right. However, when such inroads are made in the form of a reverse burden placed on the accused, such a provision must be read in light of Articles 14 and 21 of the Constitution insofar as they contain within them the right of fair trial and human dignity. This reading, apart from testing the law itself, is more useful in testing all prosecutions carried out under such law. The stricter the offence and the more stringent the statute, the more searching is the scrutiny involved.As a final word, I would like to point out an issue of hard criminal law in this case. This was a case where various discrepancies had crept in to the way evidence had been adduced by the customs authorities (to mention just a few, the bulk quantity of heroin, the carton as also the samples had gone missing!) and, taking a cumulative view of the same, the bench ruled in favour of the accused. What is of interest is that this is perhaps the first case on the NDPS Act I have read (not that I’ve read all that many) which clearly points out the obvious fact that before the reverse burden on the accused is placed under Section 54 of the Act, the burden is on the prosecution to prove the element of “possession” beyond reasonable doubt. The judgment rules that the prosecution, in this case, did not satisfy this, especially in light of the fact that the stringency of the statute and the seriousness of the alleged offence heightened the level of scrutiny and made this particular burden on the prosecution more onerous.'

Friday, April 25, 2008

Student Loan Consolidation

Student Loan Consolidation - How does it Work?
Student loans are a great source of financial aid for students who need help paying for their education. Unfortunately, students often leave college with burdensome debt. In addition, they often have multiple loans from different lenders, meaning they are writing more than one loan repayment check each month. The solution to this problem is loan consolidation.

What is loan consolidation?
Loan consolidation means bundling all your student loans into a single loan with one lender and one repayment plan. You can think of loan consolidation as akin to refinancing a home mortgage. When you consolidate your student loans, the balances of your existing student loans are paid off, with the total balance rolling over into one consolidated loan. The end result is that you have only one student loan to pay on.

Both students and their parents can consolidate loans.Should I consolidate my loans?
Loan consolidation offers many benefits:
* Locks in a fixed, usually lower, interest rate for the term of your loan, potentially saving you thousands of dollars (depending on the interest rates of your original loans) * Lowers your monthly payment * Combines your student loan payments into one monthly bill
In addition, consolidated loans have flexible repayment options and no fees, charges, or prepayment penalties. There are also no credit checks or co-signers required.
You should consider consolidating your loans if the consolidation loan would have a lower interest rate than your current loans, particularly if you are having trouble making you monthly payments. However, if you are close to paying off your existing loans, consolidation may not be worth it.

How will the interest rate for the consolidated loan be?
The interest rate for your consolidated loan is calculated by averaging the interest rate of all the loans being consolidated and then rounding up to the next one-eighth of one percent. The maximum interest rate is 8.25 percent.
To figure your interest rate, visit loanconsolidation.ed.gov for an online calculator that will do the math for you.

How much can I save?
How much you save by consolidating loans depends on what interest rate you get and whether you choose to extend your repayment plan. According to Sallie Mae, the leading provider of student loans in the United States, consolidating student loans can reduce monthly payments by up to 54 percent. However, the only way to reduce your payment this much is to extend your repayment plan. You typically have 10 years to repay student loans, but, depending on the amount you're consolidating, you can extend your repayment plan all the way up to 30 years. Remember that if you choose to extend your repayment term, it will take longer to pay off your overall debt and you'll pay more in interest. There are no preypayment penalties, so you can always choose to pay off the loan early.

Am I eligible to consolidate my loans?
In order to consolidate your loans, you must meet the following criteria:
* You are in your six-month grace period following graduation or you have started repaying your loans * You have eligible loans totaling over $7,500 * You have more than one lender * You have not already consolidated your student loans, or since consolidation you have gone back to school and acquired new student loans
The following types of loans can be consolidated:
* Direct Subsidized and Unsubsidized Loans * Federal Subsidized and Unsubsidized Federal Stafford Loans * Direct PLUS Loans and Federal PLUS Loans * Direct Consolidation Loans and Federal Consolidation Loans * Guaranteed Student Loans * Federal Insured Student Loans * Federal Supplemental Loans for Students * Auxiliary Loans to Assist Students * Federal Perkins Loans * National Direct Student Loans * National Defense Student Loans * Health Education Assistance Loans * Health Professions Student Loans * Loans for Disadvantaged Students * Nursing Student Loans

Where can I get a consolidation loan?
You can consolidate your loans through any bank or credit union that participates in the Federal Family Education Loan Program, or directly from the U.S. Department of Education. The loan terms and conditions are generally the same, regardless of where you consolidate. You may want to check first with the lenders that hold your current loans.
If all your loans are with one lender, you must consolidate with that lender.
If you decide to consolidate your student loans, remember that you can only do so once unless you go back to school and take out more loans. Therefore, you will want to make sure you get the best deal the first time. The interest rate will be the same from all lenders, but some lenders may offer future rate discounts for prompt payment and a discount for having monthly payments directly debited from your account.

Can my spouse and I consolidate our loans together?
You can consolidate your loans together, but it is not a good idea for a couple reasons:
* Both of you will always be responsible to repay the loan, even if you later separate or divorce * If you need to defer payment on the loan, both of you will have to meet the deferment criteria

When should I consolidate my loans?
You can consolidate your loans any time during your six-month grace period or after you have started repaying your loans. If you consolidate during your grace period, you may be able to get a lower interest rate. However, since you will lose the rest of the grace period, it is a good idea to wait until the fifth month of the grace period before consolidating. The consolidation process usually takes 30-45 days.
This article is distributed by NextStudent. At NextStudent, we believe that getting an education is the best investment you can make, and we're dedicated to helping you pursue your education dreams by making college funding as easy as possible. We invite you to learn more about Student Loan Consolidation at NexStudent.com.

Thursday, April 24, 2008

Los Angeles Criminal Defense Attorneys

What does it mean to "post bail?"
Bail is cash or a cash equivalent that an arrested person gives to a court to ensure that he will appear in court when ordered to do so. If the defendant appears in court at the proper time, the court refunds the bail. But if the defendant doesn't show up, the court keeps the bail and issues a warrant for the defendant's arrest.Bail can take any of the following forms:

* cash or check for the full amount of the bail * property worth the full amount of the bail * a bond-that is, a guaranteed payment of the full bail amount, or * a waiver of payment on the condition that the defendant appear in court at the required time, commonly called "release on one's own recognizance" or simply "O.R."

Who decides how much bail I have to pay?
Judges are responsible for setting bail. Because many people want to get out of jail immediately and, depending on when you are arrested, it can take up to five days to see a judge, most jails have standard bail schedules which specify bail amounts for common crimes. You can get out of jail quickly by paying the amount set forth in the bail schedule.

Are there are restrictions on how high my bail can be?
The Eighth Amendment to the U. S. Constitution requires that bail not be excessive. This means that bail should not be used to raise money for the government or to punish a person for being suspected of committing a crime. The purpose of bail is to give an arrested person her freedom until she is convicted of a crime, and the amount of bail must be no more than is reasonably necessary to keep her from fleeing before a case is over.
Some judges set a high bail in particular types of cases (such as those involving drug sales or rape) to keep a suspect in jail until the trial is over. Although bail set for this purpose -- called preventative detention -- is thought by some to violate the Constitution, this practice has continued in many courts.

What can I do if I can't afford to pay the bail listed on the bail schedule?
If you can't afford the amount of bail on the bail schedule, you can ask a judge to lower it. Depending on the state, your request must be made either in a special bail-setting hearing or when you appear in court for the first time, usually called your arraignment.

How soon can I appear before a judge?
In federal court, a person taken to jail must be brought "without unnecessary delay before the nearest available . . . magistrate." Most states have similar rules. In no event should more than 48 hours elapse (not counting weekends and holidays) between the time of booking and bringing you to court.

How do I pay for bail?
There are two ways to pay your bail. You may either pay the full amount of the bail or buy a bail bond. A bail bond is like a check held in reserve: It represents your promise that you will appear in court when you are supposed to. You pay a bond seller to post a bond (a certain sum of money) with the court, and the court keeps the bond in case you don't show up. You can usually buy a bail bond for about 10% of the amount of your bail; this premium is the bond seller's fee for taking the risk that you won't appear in court.
A bail bond may sound like a good deal, but buying a bond may cost you more in the long run. If you pay the full amount of the bail, you'll get that money back (less a small administrative fee) if you make your scheduled court appearances. On the other hand, the 10% premium you pay to a bond seller is nonrefundable. In addition, the bond seller may require "collateral." This means that you (or the person who pays for your bail bond) must give the bond seller a financial interest in some of your valuable property. The bond seller can cash-in this interest if you fail to appear in court.
Nevertheless, if you can't afford your bail and you don't have a friend or relative that can help out, a bond seller may be your only option. You can find one by looking in the Yellow Pages; you're also likely to find bond sellers' offices very close to any jail. Finally, be ready to pay in cash, a money order or a cashier's check. Jails and bond sellers usually do not take credit cards or personal checks for bail.

Is it true that a defendant who proves his reliability can get out of jail on his word alone?
Sometimes. This is generally known as releasing someone "on his own recognizance," or "O.R." A defendant released O.R. must simply sign a promise to show up in court. He doesn't have to post bail. A defendant commonly requests release on his own recognizance at his first court appearance. If the judge denies the request, he then asks for low bail.
In general, defendants who are released O.R. have strong ties to a community, making them unlikely to flee. Factors that may convince a judge to grant an O.R. release include the following:
* The defendant has other family members (most likely parents, a spouse or children) living in the community. * The defendant has resided in the community for many years. * The defendant has a job. * The defendant has little or no past criminal record, or any previous criminal problems were minor and occurred many years earlier. * The defendant has been charged with previous crimes and has always appeared as required.

Tuesday, April 15, 2008

Twittering Tax Pros

The fabulous Wendy Piersall (now of sparkplugging.com in case you missed the re-branding announcement) posted a list today of Twitter Moms (the list is here - check it out).

I’ll confess. I’m a Twitter-freak. I do enjoy trying to sum up my day in 140 characters or less - it helps me clear out the cobwebs. Yes, there’s a joke in there somewhere that involves Paris, a Peugeot 205 and a crazy law student - but that’s for another day…

But back to the list… I’ll warn you about Twitter upfront. It’s addictive. Waaay addictive. But it’s also cool.
If you’re ready to take the first step and say, “I’m a tax professional and I love to Twitter,” let me know. I’m going to compile a list of Twittering Tax Pros.

Here’s the list so far:
lawmummy - my personal Tweet

taxgirl - my feed (oh yeah, you can read feeds via Twitter)










I tried to filter out the Twitter-spammers (who knew?) and the folks who never update. But if you don’t fit either description and you’re a Twittering Tax Pro, let me know and I’ll add you to the list! Just leave a note below in the comments with your Twitter ID.

Trackback : http://www.taxgirl.com/

OK AG values Bank over Battered Women

This was originally submitted to the Tulsa World as an op-ed piece, but was not published:

update as of 4/10/08: The Tulsa World did indeed publish this an op-ed piece, The Native American Times reprinted it and the Cherokee Phoenix plans to reprint it in the next issue. AG Edmondson responded with an op-ed piece on 4/6/08 and telephoned me to discuss the issue on 4/8/08. I have sent him additional info and will post any further updates in the comments section - mlt

On November 20, 2007, Oklahoma Attorney General Drew Edmondson announced an innovative partnership with Wal-Mart to combat domestic violence. In the press release describing that initiative, Edmondson declared, "It's tragic to lose a mother, daughter, sister orfriend to domestic abuse. . . . We will never know how many of those deaths could have been prevented if these women had only known where to go for help."
In February 2008, Edmondson joined several other state attorneys general (Idaho, Alaska, Florida, North Dakota, South Dakota, Utah, Washington, and Wisconsin) on an amicus brief asking the U.S. Supreme Court for a ruling that has the potential to eviscerate tribal court authority to issue and enforce protection orders - leaving Indian women battered by non-Indians with no legal recourse and no protection.

The case pending before the Supreme Court, called Plains Commerce Bank v. Long Family, is not a case about domestic violence - it is a case involving a loan made by a non-Indian bank to Indians who lived on the Cheyenne River Sioux Reservation. When things went awry, the bank lost the suit in tribal court, then went to federal court to contest the ability of the tribal court to hear the case.
In Plains Commerce Bank, the U.S. Supreme Court is being asked to clarify the ability of tribal courts to hear cases involving non-Indians who come onto a reservation and do business with Indians. If this has been a state, there would be no question the state court could decide the case - state courts have the authority to decide cases involving people and companies who conduct business within the state, even if they are not state residents.

The U.S. Supreme Court, however, has created a separate set of rules for tribal courts, limiting their authority over non-Indians. As part of those rules, the Supreme Court has declared that if a non-Indian engages in consensual relations with a tribal member, the tribal court can hear any case arising out of that transaction. The Bank in the case currently pending before the Court is asking the Court to rule that the consensual relationship test can be satisfied only if the non-Indian clearly and expressly agrees to let the tribal court decide the case. Edmondson and several state attorneys general are urging the Court to do what the Bank asks.
The problem is that such a ruling could potentially have far-reaching consequences. The consensual relationship test is also what allows tribal courts to issue and enforce protection orders to protect victims of domestic violence. Domestic violence is a widespread problem, and it is particularly acute for Indian women. U.S. government statistics show that Indian women are two and one-half times more likely to be the victim of violent crime; one in three American Indian women will be raped in their lifetime; three of four will be physically assaulted, and Indian women are stalked at a rate more than double that of any other population. Well over 75% of the perpetrators of these crimes are non-Indian.

That means when an Indian woman is involved with a non-Indian man in Indian country, the only court that can issue and enforce a protection order is a tribal court. Since it is unlikely that these men will clearly and expressly agree to tribal court authority over them, that leaves Indian women with no legal recourse. Apparently, our Attorney General thinks a bank that has voluntarily used the tribal court got mad because it lost the case is more important than Indian women who are battered and abused. He would rather protect the bank than the woman.
If that is the case, shame on him. If it is not the case, then I urge him to withdraw from the brief asking the Court to protect the bank. It's not too late, and if it saves one woman's life, it is well worth it.

Trackback : http://www.tribal-law.blogspot.com/

Transcript of Argument in Plains Commerce Bank v. Long Family Land & Cattle

The transcript of the argument today in Plains Commerce Bank v. Long Family Land & Cattle is available here. Surprisingly, the Court was heavily interested in the idea that a majority Indian-owned corporation might be considered an Indian or member of a tribe for jurisdictional purposes. At one point during the argument the Court was erroneously advised by counsel that such corporations could not be organized under tribal law.

If, as the questioning suggests, the corporate form of the respondent plays any significant role in the disposition of the tribal court jurisdictional issue posed in the case, the decision, if adverse to tribal court jurisdiction, could have significant adverse affects not only on tribal court jurisdiction but also on the ability of Indians to adopt corporate forms of organization for economic enterprise.Given that the case should turn on the basic Montana tests, surprisingly little of the oral argument and the questioning involved any actual analysis of that line of cases.

Trackback : http://lawandotherthings.blogspot.com/

Mandal II Judgment: Some unanswered questions

The original version as read out by the CJI is still not in the public domain, but this notes can be relied upon for raising some valid questions.
After the four judgments were read out by the Judges, the Chief Justice read out a summary of findings of the Court so that there is no confusion. He read out as follows:-*The 93rd Amendment Act does not violate the basic structure so far as it relates to aided educational institutions. As far as private unaided educational institutions are concerned, 4 out of 5 Judges have left the question open while Justice Bhandari has held that it is violative of the basic structure.*The 2006 Act is constitutionally valid subject to exclusion of creamy layer.*The quantum of 27% reservation for OBCs is not illegal.*The 2006 Act is not illegal merely because time limit is not prescribed for reservation.*There should be a review of the lists of SEBC every 5 years.

1.The direction for a review of the lists of SEBC every five years: Does it run counter to the direction in Indra Sawhney 1 which was for review/revision every 10 years? The Government appears confused on this. At the same time, it should be noted that the Bench rejected the plea to set aside the Act merely because the lists were not revised by the Government, even after 10 years. In 2003, when the time for review came after 10 years of notification of the lists, the Government consulted the NCBC, and the latter conveyed the views of the States that revision was not required at that stage. The Bench did not deal with how the review should be done, and what happens if the review is not to the satisfaction of the Court.

2. The question of graduation being a factor in identifying backwardness of castes was dealt by Justice Pasayat. But such a factor is already one of the recognised criteria with the NCBC, to determine backwardness. Therefore, Justice Pasayat's suggestion has been put forward as if it was earlier ignored by the NCBC. This forms part of the summary of Justice Pasayat's findings which says: "Graduation or professional qualification shall be the standard test for measuring backwardness,", but this is missing from the overall summary prepared by the Chief Justice. The summary of Justice Bhandari's findings (as read out in the Court) is equally silent on his opinion that once a candidate graduates from a uiversity, he/she is educationally forward and is ineligible for special benefits under Article 15(5) for post-graduate and any further studies thereafter.

3. Justice Bhandari suggested to the Government to adopt economic criterion to identify backwardness, after he said he was "compelled" to agree to caste being a criterion. Justice Pasayat also said, to strike a constitutional balance it is necessary and desirable to ear-mark certain percentage of seats out of permissible limit of 27 per cent for "socially and economically backward classes". This phrase is probably used for the first time in the context of reservations. Justice Pasayat says in the summary read out in the Court: Some seats of 27% seats for OBCs should go to socially and economically backward classes after 10 years. Taken together, do the majority Judges approve of economic criterion? Will it be binding? But it doesn't form part of the CJI's summary. And it also runs counter to Indra Sawhney1 which had rejected economic criteria adopted by the Narasimha Rao Government.

4. I understand some lawyers had suggested that Justice Bhandari's view that that part of Article 15(5) dealing with reservations in private educational institutions would be severed will be binding, as the other four Judges left it open. The summary read out by the Chief Justice in the open court says: "The 93rd Amendment Act does not violate the basic structure so far as it relates to aided educational institutions. As far as private unaided educational institutions are concerned, 4 out of 5 Judges have left the question open while Justice Bhandari has held that it is violative of the basic structure." Is the question of binding nature of Justice Bhandari's decision also open? The CJI's summary is silent on this.
This is how Justice Bhandari's opinion, as read out in the Open court goes: "The 93rd Amendment Act in so far as it relates to private educational institutions distorts basic structure as it abrogates Article 19(1)(g). As far as State and aided institutions are concerned, Article 15(5) is valid. Hence I sever the portion of Article 15(5) in so far as it relates to private unaided educational institutions." Of course, it is reasonable to suggest that majority Judges want the question to be left open, but I don't know whether there is any case law which suggests otherwise.

Trackback : http://lawandotherthings.blogspot.com/

Monday, March 17, 2008

Farmer Debt Waivers: The Ongoing Debate

Farmer Debt Waivers: The Ongoing Debate

This year’s Budget, which was presented by the Financial Minister Mr. P. Chidambaram in Parliament a couple of weeks ago, has been termed a populist and an election-year budget. One aspect of the Budget that has been subject to intense scrutiny and debate pertains to the waivers and one-time settlements offered to certain farmers who have obtained agricultural loans from scheduled commercial banks, regional rural banks and cooperative credit institutions.Budget TermsIn his Budget speech, the Finance Minister stated (in paragraph 73):

“Debt Waiver and Debt Relief 73. Sir, while I am confident that the schemes and measures that I have listed above will give a boost to the agriculture sector, the question that still looms large is what we should do about the indebtedness of farmers. Honourable members will recall that Government had appointed a Committee under Dr. R. Radhakrishna to examine all aspects of agricultural indebtedness. The Committee has since submitted its report and it is in the public domain. The Committee had made a number of recommendations but stopped short of recommending waiver of agricultural loans. However, Government is conscious of the dimensions of the problem and is sensitive to the difficulties of the farming community, especially the small and marginal farmers. Having carefully weighed the pros and cons of debt waiver and having taken into account the resource position, I place before this House a scheme of debt waiver and debt relief for farmers:

(i) All agricultural loans disbursed by scheduled commercial banks, regional rural banks and cooperative credit institutions up to March 31, 2007 and overdue as on December 31, 2007 will be covered under the scheme.

(ii) For marginal farmers (i.e., holding upto 1 hectare) and small farmers (1-2 hectare), there will be a complete waiver of all loans that were overdue on December 31, 2007 and which remained unpaid until February 29, 2008. In respect of other farmers, there will be a one time settlement (OTS) scheme for all loans that were overdue on December 31, 2007 and which remained unpaid until February 29, 2008. Under the OTS, a rebate of 25 per cent will be given against payment of the balance of 75 per cent.…”

The Budget estimates the total figure of the debt waiver to be in the region of Rs. 60,000 crore (Rs. 600 billion).Some of the key features of the debt waiver are as follows:

(i) they are applicable to agricultural loans disbursed by scheduled commercial banks, regional rural banks and cooperative credit institutions;

(ii) marginal and small farmers get a complete waiver of the loans;

(iii) other farmers are entitled to a one-time settlement under which they get a rebate of 25% of the loan outstanding, while they are required to pay the balance 75%.Public Interest Litigation This farmer debt waiver was challenged in the Supreme Court in a public interest litigation (PIL) within days of the Budget announcement. The petitioner, ML Sharma, alleged that the amount of debt held by small and marginal farmers was way below the Rs. 60,000-crore figure suggested by the Government. Further, the PIL sought that the waiver not be limited to farmers who have taken loans from nationalised banks, but also be extended to farmers who have obtained finances from private banks and private money lenders.The Supreme Court, however, refused urgent hearing on the petition on the ground that the waiver was still a proposal pending before Parliament, and that the Court would not interfere on an issue that is still being discussed in Parliament.

The Supreme Court’s approach seems appropriate at this stage because the petition is premature – the proposal is still being discussed in Parliament, and there is not certainty that the debt waiver will assume the nature of a binding law in the same form that it has been proposed, if at all.However, since the matter has assumed importance, not only due to several legal and economic issues that it raises, but also because of the significant political overtones surrounding it, there is strong reason to suspect that the issue will not die down so easily that that the matter will spring up in further litigation at a later stage.It would therefore not be out of place to discuss some of the key issues that emerge from the debt waivers proposed. The purpose of this post is only to raise the issues and highlight the arguments from different points of view, but no attempt is being made to proffer any final solutions (as that may not only be premature yet, but will necessarily involve a far more detailed exercise).Implications

1. Size of the Problem A key challenge to the proposal has been the alleged incongruity in the numbers disclosed by the Government. It is believed that the amount of loans borrowed by farmers from public sectors banks is far less than the numbers (i.e. Rs. 60,000 crores) arrived at by the Government. For example, the Economic Times reports today that the non-performing assets/ loans (NPAs) of all scheduled commercial banks stood at Rs. 20,100 crore, the NPAs of the cooperative sector at Rs. 32,500 crores and the NPAs of the regional rural banks at Rs. 1,000 crores. Therefore, all the NPAs of the affected set of banks totals only to Rs. 53,600 crores. Now, these figures include all loans that are non-performing in the books of the banks that arise from all types of activities, including agricultural and non-agricultural activities. Then, it seems curious at a first glance as to how the agricultural non-performing loans as proposed in the Budget stand at Rs. 60,000 crores, when the entire non-performing loans (from all sectors) of the scheduled commercial banks, cooperative banks and regional rural banks stand only at a lesser figure of Rs. 53,600 crores. This defies logic, and the anomaly in the figures requires further explanation, failing which the proposal could be susceptible to serious challenge on the ground that the proposal seeks to address an illusory problem that does not exist at all.

2. Issues of ClassificationAny challenge to the proposal is likely to involve issues of classification that constitutional lawyers are entirely familiar with. Has there been any arbitrariness in determining the class of farmers that are eligible to the waiver benefit? For instance, why are only loans borrowed from scheduled commercial banks, regional rural banks and cooperative credit institutions eligible for the waiver? Why not the loans borrowed from private commercial banks or private money lenders? In fact, commentators have stated that the agriculture sector is quite substantially funded by private money lenders whose terms of lending (such as exorbitant interest rates) and harsh recovery methods cause unbearable harassment to poor farmers, sometimes even resulting in farmer suicides.

Certainly, the public sector banks are likely to be softer on borrowers than private money lenders. Now, if the Budget proposal is to address the issue of farmer harassment, one issue that may arise is why the private money lenders have been left out of the waivers. The legal approach to dealing with private money lenders may be somewhat different because that would involve cancellation of the loan contracts they have entered into with borrowers, unlike in the case of public sector banks where the Government has direct authority over the activities of these banks themselves which can forego their rights under the loan contracts without involving a cancellation of the contracts. But, that may not necessarily explain the reasons for leaving the private money lenders out of the scheme.There may potentially be challenges to the types of farmers who are eligible to benefit from the waiver. For example, there have already been calls from members of parliament such as Rahul Gandhi to increase the threshold limits of landholding that determine which farmers are entitled to the benefits.

3. Moral Hazard

This is a problem that arises in economics where one of the parties to a contract has entered into the contract without good faith or has the incentive to take unusual risks without any attendant consequences. In the context of loan transactions, this involves cases where borrowers have taken loans, made risky investments and defaulted on the loans, but have been rescued either by government intervention or other circumstances thereby excusing them from fully performing the contract, as they would have been required to had the intervention not occurred. The problem with moral hazard is that it induces risky behaviour in other borrowers who, having witnessed their peers being bailed out, generate expectations in themselves of being similarly bailed out and hence indulge in risky investments.Applying this (implicitly) in the context of farmer debt waivers, Gurcharan Das, a well-known commentator on the Indian economy, notes that such waivers are likely to result in large scale defaults by farmers that will impose an unbearable burden on the Indian public banking system. However, others have countered this point by arguing that bail-outs and the moral hazard problem are not unique to the farming sector. It ubiquitous in the industrial sector. That is indeed a fact hardly capable of being disputed. We witness bail-outs all the time of different industrial groups or banks that have gone into the red, and usually such bail-outs have been the result of governmental intervention either directly or through the involvement of central banks. For instance, we are seeing such bail-outs unfold before us in the sub-prime crisis where several banks and economies themselves (the United States for one) have seen interventions by the central banks (such as the Federal Reserve in the case of the United States). Such industrial bail-outs are common in India too. It is probably too hard to disagree with the proponents of the farmer debt waiver measures that the moral hazard problem is universal and should not be held up as a red-flag to scuttle the waiver of farmers’ debts.
Despite all the legalities and economic aspects involved in this ongoing issue, one thing seems clear. The debt waiver is perhaps only a short term measure to extricate some farmers out of their financial misery. It does not, however, address long-term issues on how agriculture can grow through proper methods of financing the farmers. There are several other long-term measures that need to taken to improve the situation of farmers. However, as far as financing is concerned, there is a need to find ways of more sustained lending measures that properly support the farmers in their activities so as to enable them to repay their loans without imposing too high a burden and thereby keeping the non-performing loans at a low rate. It may even be necessary to replicate the success of the micro-credit financing schemes in the agricultural sector in the longer term.

Friday, March 14, 2008

Which form does an NRI need to file tax returns ?

Which form does an NRI need to file tax returns
I am working in the US and need to file my income tax returns in India. I qualify as an NRI but also have two months income in India for which my employer has issued a TDS certificate.
How and where do I file my return? Which form do I need to use for the return?

From the information provided by you it seems that you were employed in India for 2 months and have gone abroad for the purpose of employment. You can file your returns in any of the following forms:
Form 2A - This form can be used if your income is less than Rs 200,000, and if your income does not comprise income under the head Profits and Gains from business or profession and if you don't have any brought forward losses.
Form 3 - This form can be used if your income is more than Rs 200,000.
Saral - This is a general form that can be used by anyone.

You are required to file your return based on the ward or circle of Income Tax where you are covered. If you have filed IT returns in the earlier years then the IT ward or circle number would be mentioned on the stamp affixed on the acknowledgement of such a return. If such acknowledgement was not available then the IT return would need to be filed based either on the name of your employer in India.
Source: http://www.rediff.com/money/perfin/2000/sep/20nritax.htm

Interest-free loans to employees and tax implications

Perquisites in relation to an employee are the personal advantage gained by the employee during the course of his/her employment. It is the profit or gain incidentally made from employment in addition to regular salary or wages. Section 17(2) of the Income Tax Act, 1961 defines perquisite in an inclusive manner. It includes the following:

The value of rent-free accommodation provided to the employee by the employer.
The value of concession in the matter of rent in respect of any accommodation provided to the employee by the employer.
The value of any benefit or amenity granted or provided free of cost or at concessional rate in case of specified employees.

The value of any specified security allotted or transferred, directly or indirectly, by any person free of cost or at concessional rate to an individual who is or has been in employment of that person, such as ESOP (applicable only up to financial year 1999-2000).
Any sum paid by the employer in respect of any obligation which, but for such payment, would have been payable by the employee.
Any sum payable by the employer, whether directly or through a fund other than a recognised provident fund or approved superannuation fund or a deposit linked insurance fund, to effect an assurance on the life of the employee or to effect a contract for an annuity.
From the above it becomes evident that any benefit, concession or amenity given by an employer to his employee would take the form of perquisite taxable in the hands of the employee. One such interesting situation is that of interest-free loan or loan provided at concessional rate by an employer to his employee.

The questions that come to our mind are:

Whether such benefit is really a perquisite?
Whether such benefit is taxable and if yes in whose hands would it be taxed?
What rate of tax would be attracted?
The answers to these questions could be found in the various decisions delivered by high courts and the Supreme Court. It could definitely be argued that loan given by an employer free of interest or at concessional rate would endow benefit to the employee, which otherwise would have been borne by such employee. Let us take an example to get a clear idea.

UK going green ?

UK going green?
You might think so. Since we’ve been here, we’ve been inundated with organic produce and eco-renovation television programming - my son is even using environmentally friendly diaper wipes.
What else is going green? UK tax policy.
The Chancellor has introduced a new budget which includes a substantial tax on higher carbon emitting vehicles. A new Range Rover, which is included in the highest category, can now result in a tax increase in the first year of nearly 1000 pounds (sadly, with the exchange rate, is equal to $2000).
The idea is to provide a disincentive for the average taxpayer to buy an inefficient vehicle. Unlike the 3p increase in beer prices, this kind of increase is likely to make a difference in taxpayer behavior.
Smart policy or destined to be a problem?

Thursday, March 13, 2008

NOT Before Supreme Court - Legality of Land into Trust Authorization

Legality of Land into Trust Authorization NOT Before Supreme Court

The Supreme Court granted cert today in Carcieri v. Kempthorne, No. 07-526. The case involves efforts by the State of Rhode Island to prevent additional lands from being taken in trust by the federal government for the Narragansett Tribe. Materials regarding the background of the case, the petition for certiorari and the lower court opinion can be found here. While first two of the three issues Rhode Island presented in the case involve narrow questions applicable primarily to the Narragansett as a result of the Rhode Island Indian Claims Settlement Act, one of the issues in the cert petition involves a nationwide bombshell -- the legality of Section 5 of the Indian Reorganization Act (IRA). Specifically, the question Rhode Island sought to present in the cert petition is "Whether providing land “for Indians” in the 1934 Act establishes a sufficiently intelligible principle upon which to delegate the power to take land into trust." Since Section 5 of the IRA provides the only general federal statute authorizing the federal government to take land, an adverse ruling from the Court on this issue could have catastrophic consequences for Indian tribes nationwide. Fortunately, the Supreme Court order limited review to the first two narrow issues and declined review on the broader issue of Section 5 and the nondelagation doctrine. This was at least the second time that the Supreme Court has declined to tackle nondelagation doctrine challenges to Section 5 head on. The first occurred when the Supreme Court vacated the adverse decision in South Dakota v. United States Dep’t of the Interior, 69 F.3d 878 (8th Cir. 1995), resulting in the later decision uphold the authority of the Secretary to take land into trust under Section 5. That decision is available here.

Lecture on Death Penalty in Asia

Lecture on Death Penalty in Asia
There will be a lecture by David T. Johnson, Professor of Sociology and Adjunct Professor of Law, University of Hawaii, on "The Next Frontier: National Development, Political Change, and the Death Penalty in Asia" at the Centre for the Study of Law and Governance, Jawaharlal Nehru University, New Delhi at 3 p.m. on March 14th.Over the last three decades, the number of countries in the world to abolish capital punishment has tripled, and some regions of the world, such as Europe and Latin America, are now almost death penalty free zones. In this context, Asia has become the regional capital of capital punishment, the site of more than 90% of all the judicial executions in the world. But death penalty policy and practice is changing in Asia too. This talk, based on a forthcoming book with the same title, describes and explains how capital punishment is changing in Asia and explores some possible death penalty futures in Asia generally and in India specifically.

The Indian Judicial System

The Indian Judicial System has the Supreme Court of India at its helm, which at present is located only in the capital city of Delhi, without any benches in any part of the nation, and is presided by the Chief Justice of India.
The Supreme Court of India has many Benches for the litigation, and this apex court is not only the final court of permissible Appeal, but also deals with interstate matters, and matters comprising of more than one state, and the matters between the Union Government and any one or more states, as the matters on its original side. The President of India can always seek consultation and guidance including the opinion of the apex court and its judges. This court also has powers to punish anybody for its own contempt.
The largest bench of the Supreme Court of India is called the Constitution Bench and comprises of 5 or 7 judges, depending on the importance attached of the matters before it, as well as the work load of the court.
The apex court comprises only of various benches comprising of the Divisional benches of 2 and 3 judges, and the Full benches of 3 or 5 judges.
The Appeals to this court are allowed from the High Court, only after the matter is deemed to be important enough on the point of law or on the subject of the constitution of the nation, and is certified as such by the relevant High Court.
In the absence of any certificate from the High Court, a person may, with the leave of the apex court, appeal to this court, by filing a Special Leave Petition before the court.
A person or body may also file a Writ against the violation of Fundamental Rights granted under the Constitution of India, with the permission of the apex court.
Certain writs are allowed to be instituted in the apex court directly, against the orders of the Courts of the Court Martial, and the Central Administrative Tribunals.

Study Tracks Subprime Litigation

Study Tracks Subprime Litigation:

Hat tip to Consumer Law & Policy Blog for alerting us to a new report from Navigant Consulting tracking trends in subprime mortgage litigation. It found 278 subprime-related cases filed in federal court in 2007, with well over half filed in the second half of the year.

From the report:
The number of subprime-related cases filed in federal court is accelerating dramatically. Indeed, the number of filings nearly doubled during the second half of 2007, from 97 to 181 (total of 278). Major case categories include borrower class actions (43 percent), securities cases (22 percent) and commercial contract disputes (22 percent), along with employment class actions, bankruptcy-related, and other cases.
Each of the top 10 subprime mortgage lenders for 2006 were named in at least one borrower class action during 2007, the report says.

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