BUSINESS LAWS COMPACT IRF

Indian Regulatory Framework

Why to read Law?

Awareness is important to become a CA as CA’s are the first level of contact on legal matters.
We have to advise our clients on many legal matters.

Purpose of Indian Regulatory Framework?

To provide a set of uniform (same) rules and regulations that will govern the conduct of people
interacting with each other in personal as well as business relationships.

History of Law?

“Code of Hammurabi” is known for oldest law in written form. He carved the code on bulky stone
slabs.

‘’ Twelve Tables’’ is known as a set of laws was engraved on 12 bronze tablets in Rome which is
considered as first most detailed code of any of the civilisations. Purpose of these tables was to
protect the rights of public and to provide remedy for wrongs

What is Law & Process of Making It?

Law - It is a set of obligations and duties imposed by the government for securing welfare and
providing justice to society. India’s legal framework reflects the social, political, economic, and
cultural aspects of our vast and diversified country.

Process of Making A Law

When a law is proposed in parliament it is called a Bill
After discussion and debate, the law is passed in Lok Sabha
Thereafter, it has to be passed in Rajya Sabha
It then has to obtain the assent of the President of India.
Finally, It will be notified by the Government in the publication called Official Gazette of India
It is applicable from the date mentioned in the notification as the effective date
Once it is notified and effective, it is called an Act of Parliament.

Sources of Law

Main sources (4 points) – Constitution, statutes or laws made by Parliament and State
Assemblies, Precedents or the Judicial Decisions, established Customs and Usages.

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Types of laws in the Indian Legal System

1 – Criminal Law

o concerned with laws pertaining to violations of the rule of law or public wrongs and
punishment of the same
o Governed under the Indian Penal Code, 1860, and the Code of Criminal Procedure, 1973
o IPC, 1860, defines the crime, its nature, and punishments whereas the Crpc, 1973, defines
exhaustive procedure for executing the punishments of the crimes.
o Example - Murder, rape, theft, fraud, cheating and assault

2 – Civil Law

o Matters of disputes between individuals or organisations are dealt with under Civil Law
o Enforces the violation of certain rights and obligations through civil suit.
o Primarily focuses on dispute resolution rather than punishment.
o Administration of civil law are governed by the Code of Civil Procedure, 1908 (CPC).
o Further classified into Law of Contract, Family Law, Property Law, and Law of Tort.
o Example - breach of contract, non-delivery of goods, non-payment of dues.

3 – Common Law

o Judicial precedent or a case law is common law.

o Judgment by the Supreme Court will be binding upon the courts in India (Article 141)
o Doctrine of Stare Decisis is the principle supporting common law, means “to stand by that
which is decided.”
o It reinforces the obligation of courts to follow the same principle or judgement provided
by previous decisions if facts are similar or “on all four legs” with earlier decision.

4 - Principles of Natural Justice

o Often known as Jus Natural, deals with certain fundamental principles of justice going
beyond written law.
o Nemo judex in causa sua (“No one should be made a judge in his own cause, and it’s a Rule
against Prejudice),
o Audi alteram partem (“hear the other party or give the other party a fair hearing),
o Reasoned decision are the rules of Natural Justice.
o Judgement can override or alter a common law, but it cannot override or change statute.

Enforcing the Law

Once a law is passed by Parliament, it’s enforceability is the responsibility of executives.

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Enforcement depends on whether it’s a Central or State law, and the relevant government
becomes the enforcing authority.

To manage this, functions are divided among various ministries. Each ministry is led by a Cabinet
Minister and supported by junior ministers and civil servants.

Ministries of Central Government

1 – Ministry of Finance 2 – Ministry of Corporate Affairs (MCA)

o concerned with the economy of India, o Primarily concerned with administration of

serving as the Treasury of India. the Companies Act 2013, Companies Act
o Concerns with taxation, financial legislation, 1956, the LLP Act, 2008, and the Insolvency
financial institutions, capital markets, and Bankruptcy Code, 2016.
centre and state finances, and the Union o Responsible mainly for the regulation of
Budget. Indian enterprises in the industrial and
o CA’s day to day life is highly impacted with services sector.
this ministry o Run by civil servants of the ICLS cadre
o Ministers preferred MoF as their portfolio which are elected through the Civil Services
o MIMP function of MoF is presentation of Examination conducted by UPSC.
Union Budget which is eagerly awaited as it o The highest post, Director General of
provides rate of taxes and budget Corporate Affairs (DGCoA), is fixed at
allocations. Apex Scale for the ICLS.
o It is the apex controlling authority of four
3 - Ministry of Home Affairs
civil services namely –
Indian Revenue Service, Indian Audit & o An interior ministry of India
Account service, Indian Economic Service & o Mainly responsible for the maintenance of
Indian Civil Accounts Service. internal security and domestic policy
o Also, Apex authority of Indian Cost and o Headed by Union Minister of Home Affairs
Management Accounts Service Departments Under MoF
Departments Under MoF o Border Management
o Economic Affairs o Internal Security
o Expenditure o Jammu, Kashmir and Ladakh Affairs
o Revenue o Home
o Financial Services o States
o Investment and Public Asset Management o Official Language - Central Translation
o Public Enterprises Bureau, Central Hindi Training Institute,
Directorate of Census Operations.
4 - Ministry of Law and Justice

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o Is a cabinet ministry, which deals with the

o management of the legal affairs, through the Department of Legal Affairs
o legislative activities through the Legislative Department
o administration of justice in India through the Department of Justice
o Concerned with advising the various Ministries of the CG.
o Legislative Department is concerned with drafting of principal legislation for the CG.

Departments Under MoF

o Department of legal affairs o Legislative Department o Department of Justice

Statutory Authorities

1) Securities & Exchange Board of India (SEBI)

o Regulatory body for securities and commodity market in India
o Under the ownership of MoF within Government of India
o Established on 12/04/1988 as an Executive body and was given Statutory powers on
30/01/1992 through SEBI Act, 1992.

2) Reserve Bank of India (RBI)

o India's Central Bank & regulatory body responsible for regulation of Indian banking system.
o Ownership of MoF, Government of India.
o Responsible for the control, issue and maintaining supply of the Indian rupee.
o Manages the country's main payment systems and works to promote its economic development.

Divisions Under RBI

o Bharatiya Reserve Bank Note Mudran (BRBNM) - prints and mints Indian currency notes (INR)
Two currency printing presses – Nashik (Western India) & Dewas (Central India)
o National Payments Corporation of India - Regulate the payment and settlement systems.
o Deposit Insurance and Credit Guarantee Corporation - providing insurance of deposits and
guaranteeing of credit facilities to all Indian banks.

3) Insolvency and Bankruptcy Board of India (IBBI)

o Regulator for overseeing insolvency proceedings and entities like Insolvency Professionals(IP),
Insolvency Professional Agencies (IPA), Information Utilities (IU) in India.
o Established on 1 October 2016, statutory powers through the IBC, 2016.
o Covers Individuals, Companies, LLP’s, Partnerships and Partnership firms.
o It will speed up the resolution process for stressed assets in the country.
o Attempts to simplify the process of insolvency and bankruptcy proceedings.
o Handles cases through two tribunals – NCLT & Debt recovery tribunal.
The Indian Judicial System

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When there is a dispute between citizens or between citizens and the Government, these
disputes are resolved by the judiciary.

Functions of The Indian Judicial System

o Regulation of the interpretation of the Acts and Codes
o Dispute Resolution
o Promotion of fairness among the citizens of the land

Hierarchy of courts
Supreme Court is at the top, followed by High courts and District courts.
Decisions of High court – Binding on respective states only
Decisions of Supreme court – Binding on all High courts under Article 121 of constitution.
Decision of Supreme court is final decision on the matter.

1) Supreme Court 3) District Court

o apex body of the judiciary o Below the High Courts are DC’s.
o Established on 26th January, 1950. o Civil Judge deal with Civil law matters i.e.
o Chief Justice of India is the highest contractual disputes & claim for damages.
authority (Article 126) o Courts of Sessions deals with Criminal
o Principal bench consist of 7 members matters.
including CJI. o Pecuniary jurisdiction, can try suits valuing
o Presently – 34 members including CJI due to not more than Rupees two crore.
rise in no. of cases. o Courts get territorial Jurisdiction based on
o Individual can Seek relief in SC by writ the areas covered by them.
petition under Article 32. o Cases are decided based on the local limits
within which the parties reside or the
2) High Court property under dispute is situated.
o Highest court of appeal in each state and UT.
o There must be a HC in each state (Article 4) Metropolitan Court
214) o Established in metropolitan cities in
o HC has has appellant, original jurisdiction, consultation with the HC where the
and Supervisory jurisdiction population is ten lakh or more.
o Article 227 limits a HC’s power. o Chief Metropolitan Magistrate has powers
o Currently 25 High courts & 6 states share as Chief Judicial Magistrate
single HC. o Metropolitan Magistrate has powers as the
o Individual can seek remedies against violation Court of a Magistrate of the first class.
of fundamental rights by writ (Article 226)
o Oldest HC – Calcutta HC

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