Chamber Voice – June & July 2021

Taking cognisance of the economic hardships to businesses in the State the Government of Kerala has recently announced a Relief Package for Small Businesses in the State to help them tackle the difficulties faced by them. I am sure this will help small businesses survive these difficult times. The details of the relief measures announced are carried in this edition of the Chamber Voice. While the opening up of the economy inspite of the rising cases of Covid – 19 is risky, it is a chance that we have to take since the economic consequences of a total shutdown are too devastating to contemplate.

Recently, the Chamber had petitioned the State Government to intervene and direct the labour department to withdraw the notice issued to one of the industries for non-compliance with the provisions of law which was struck down by the High Court. The Chamber apprehended that negative publicity would result in sending wrong signals to existing as well as prospective investors in the state at a time when all other States are wooing industrialists to set up units to generate employment.
We requested the Government to institute a ‘Grievance Redressal Mechanism’ at the highest level that will alleviate the fears of many industrialists and ensure that a normal industrial atmosphere will continue to exist for the industries here.

In this connection, we are extremely happy to note that the Government has announced that it is planning to come up with a new amendment whereby a statutory ‘Grievance Redressal Committee’ would be established in the state for addressing grievances of the investors. This is a very positive step. We are also happy to note that the Government has appointed a three-member Committee to submit recommendations for the reform of redundant rules and regulations in industrial laws in the State. The committee is to submit its report in three months.

The Committee has been tasked with the job of reviewing all rules and regulations that appear outdated or not in sync with the modern times and to recommend changes/simplification wherever required.

Moving on, I am pleased to inform you that the Chamber’s Vaccination Drive which was organized between the 14th and the 22nd of June 2021, was a huge success. We were able to inoculate around 2500 people during this time.

The Covid Relief Fund instituted by the Chamber to assist the families of frontline health workers who lost their lives during the pandemic was, I am happy to say, welcomed by our members and well-wishers very generously. I take this opportunity to thank each one of you who graciously donated to this Relief Fund meant to support people who were affected by the Pandemic. Plans are afoot to utilise the donations received in the best and most effective manner.

Due to the ongoing pandemic situation, we have been constrained to conduct our Monthly CEO Forum meetings online in the last two months. The June edition which was also the second meeting under the 6th edition of the CEO FORUM meetings was handled by Dr. Manu Melwin Joy, of CUSAT, who is an accomplished academician, a writer and thinker. He spoke on “All work and no play makes your health, wealthy & wise – Make your work a Gameplay.” Dr. Joy is an expert in the gamification of workplaces and is renowned in this area.

The third meeting of the CEO FORUM’s 6th edition was heldon the 16th of July. Mr. G K Pillai, Former CMD, Heavy Engineering Corporation Ltd., Ranchi was the Speaker. Mr. Pillai spoke on “A Leader – A Catalyst for Growth in Turbulent Times.”  Mr. Pillai’s talk highlighted issues that are practical and doable, and which will, in the long run ensure the success of any organisation. The video recording of this session was uploaded on the Chamber’s YouTube Channel and this can be viewed there. The link is provided in this Newsletter. A detailed report on both meetings is also carried in this edition.

The next CEO FORUM meeting will again be a Virtual one and will be addressed by  Mr. T. Nandakumar IAS, Former Secretary to Govt of India, who is an accomplished Bureaucrat specialised in Public Policy, Agriculture, Food, Dairying, Textiles and International Trade has agreed to speak on “Way forward for Kerala”. This meeting will be held on Friday, the 6th of August, from 08.30am to 09.45am.

I request you all make it a point to join this meeting.

The Chamber’s Research Wing has been doing some studies on the various issues affecting business on account of the pandemic and the resulting lockdown and restrictions. We will share the studies with you once the reports are finalised.

I assure you all that we can overcome the challenges we are currently facing by facing the challenges as one. Rest assured that the support of the Chamber is with each one of you in this regard. Do feel free to contact our Secretariat for any assistance that you might require.

Best regards

Harikumar
President

Consider Neeraj Vora, an appliance salesman in Mumbai, India’s financial capital. During last year’s nationwide lockdown his salary was cut from 26,000 rupees ($348) a month to 14,000 rupees. This spring his father fell ill with the virus. As the cost of treatment mounted, both he and a sister broke into their fixed-deposit savings. When that proved too little he turned to clients whose trust he had earned. Their goodwill helped him cover a medical bill for 280,000 rupees.

Mr Vora’s family is now fine. But his father’s medication still eats 3,000-4,000 rupees a month, on top of the 5,000 rupees he pays in rent and the debts he now owes. “I don’t even understand when the money gets credited and when it disappears,” says Mr Vora, who now never leaves home without mask, gloves and sanitiser. “My family can’t afford for this ever to happen again.”

In the fiscal year that ended on March 31st India’s gdp shrank by 7.3%, more than any other big Asian economy. That was just before the virus’s massive second wave. Its economic impact may not have been as severe as the long lockdown suddenly imposed in mid-2020, which left millions of migrant workers stranded and jobless. But for many, particularly in India’s salaried middle class, the psychological shock of the second round of the pandemic has been worse. While tens of millions have found themselves, like Mr Vora, abruptly tipped down the income ladder, even those more comfortably off have had to dip into savings and put off investments. Bank loans against gold jewellery, India’s most traditional way of saving, jumped by 82% in the past fiscal year.

A poll of white-collar workers by Grant Thornton, a consulting firm, found that 40% of employees had suffered a pay cut last year. Another survey, of 3,000 mostly informal workers in Delhi, the capital, found that male breadwinners had on average suffered a 39% fall in income in the past year. Of the more than 38,000 respondents to another survey—carried out online, meaning all were rich enough to enjoy internet access—more than three-quarters said they expected their incomes to fall in the current year.

Anecdotal evidence corroborates the grimness. Charities report growing demand for food handouts. Private schools, most of which are cheap and basic rather than fancy, and which educate some 120m children, report falling enrolment despite measures such as cuts in teachers’ salaries and lower fees. The All India Mobile Retailers Association, a trade group, says over 40,000 mobile-phone shops have shut down since 2019. Sales of motorbikes—India is the world’s biggest two-wheeler market—are stuck at the level of 2014.

Most economists predict fairly robust growth this year, enough to make up for last year’s debacle. But for the medium term the talk is not of how fast “normal” growth will resume, but of how many years have been lost, and whether “normal” will be in the range of the 7-8% that India achieved in the 2000s, or more like the 3-5% of earlier decades. A recent study by the National Council of Applied Economic Research (ncaer), a think-tank in Delhi, suggests that without a fast-growth strategy India may never make up for the lost growth and may never reap the demographic dividend of a relatively large workforce with relatively few dependants.

India’s government is aware of the pressure. In late June it announced a further $85bn in stimulus measures, or about 3% of gdp, following a nominal $300bn pledged last year. It has extended by another five months the supply of free food grains that has kept many families afloat, shored up banks and helped small businesses, especially in hard-hit sectors such as tourism.

In real terms, though, government spending is not expanding but shrinking. In the quarter to June, state investment in new projects fell by 42% compared with the first three months of the year. According to the ncaer, total expenditure this year will amount to just 16.3% of gdp, a significant fall from the previous year’s 17.8%.

These numbers reflect the fact that India remains a poor country. The government keeps a wary eye on its credit rating, interest rates and inflation, which has crept above the central bank’s theoretical upper limit of 6%. But if India’s post-covid troubles are due to anything, it is to a legacy of poor choices by its leaders, from a chronic failure to invest in human capital to shying away from a fuller transition to a truly competitive economy.

Even now the pandemic could resurge. A survey of 36,000 people in 70 districts across 21 Indian states released by the Indian Council of Medical Research this week found that over two-thirds of Indians had covid-19 antibodies, including 62% of the unvaccinated. Like the excess death toll, that is vastly more than would be expected based on the official case count of just over 31m after the second wave (see chart). But it still leaves nearly half a billion people without any antibodies at all. Only 6.5% of the population has been fully vaccinated. Many of those with antibodies acquired through infection with earlier variants of the virus stand to still suffer mild disease and go on to infect all those unprotected people with the Delta variant or with new mutations that are yet to emerge.

Vivek Kaul, a canny economic commentator, says of his country’s economic decision-making: “You construct a house poorly and a storm hits. Now you are drenched due to a leaking roof. Is the storm the only one to blame?” Unfortunately, more storms may yet be on their way.

SOURCE

June 2021:

• Cabinet approves MoU between India and Nepal in the field of Health Researc : 30 Jun 2021
• Cabinet approves MoU between India and Myanmar in the field of health research : 30 Jun 2021
• Cabinet approves Memorandum of Understanding signed between India and Republic of The Gambia on Refurbishing Personnel Administration and Governance Reforms  : 30 Jun 2021
• Cabinet approves extension of last date of Registration under Aatmanirbhar Bharat Rojgar Yojana (ABRY) from 30th June 2021 to 31st March 2022  : 30 Jun 2021
• Cabinet approves BharatNet implementation through Public Private Partnership Model in 16 States with optical fibre connectivity to all inhabited villages : 30 Jun 2021
• Cabinet approves Loan Guarantee Scheme for Covid Affected Sectors (LGSCAS) and to enhance the corpus of Emergency Credit Line Guarantee Scheme (ECLGS) : 30 Jun 2021
• Government approves extension of Pradhan Mantri Garib Kalyan Anna Yojana (PM-GKAY), from July 2021 up to November, 2021 : 23 Jun 2021
• Cabinet approves merger of Central Railside Warehouse Company Limited (CRWC) with Central Warehousing Corporation (CWC) : 23 Jun 2021
• Cabinet approves Agreement between India and Saint Vincent and The Grenadines for the Exchange of Information and Assistance in Collection with respect to Taxes : 23 Jun 2021
• Cabinet Secretary condoles death of Dr. Guruprasad Mohapatra, Secretary DPIIT : 19 Jun 2021
• Cabinet approves Allotment of 5 MHz spectrum in 700 MHz band to Indian Railways : 09 Jun 2021
• Cabinet approves Memorandum of Understanding between India and Maldives on cooperation in the field of sustainable urban development : 02 Jun 2021
• Cabinet approves Signing and Ratification of an Agreement on “Cooperation in the field of Mass Media” between all the Member States of Shanghai Cooperation Organisation : 02 Jun 2021
• Cabinet approves Memorandum of Understanding between India and Argentine Republic on cooperation in the field of Mineral Resources : 02 Jun 2021
• Cabinet approves Memorandum of Cooperation between India and Japan in the field of sustainable urban development : 02 Jun 2021
• Cabinet approves Model Tenancy Act for circulation to the States/Union Territories for adoption : 02 Jun 2021

July 2021:

• Cabinet approves establishment of an Integrated Multi-purpose Corporation for the Union Territory of Ladakh : 22 Jul 2021
• Union Cabinet approves Production-linked Incentive (PLI) Scheme for Specialty Steel; : 22 Jul 2021
• Cabinet approves Memorandum of Understanding (MoU) between India and Kingdom of Denmark on Cooperation in the field of Health and Medicine : 14 Jul 2021
• Cabinet approves Memorandum of Understanding (MoU) between India and Russian Federation on cooperation regarding coking Coal, which is used for Steel making : 14 Jul 2021
• Cabinet approves Extension of term of the Commission constituted under Article 340 of the Constitution to examine the issue of Sub-categorization within Other Backward Classes in the Central List : 14 Jul 2021
• Cabinet approves continuation of the Centrally Sponsored Scheme (CSS) for Development of Infrastructure Facilities for Judiciary for further five years : 14 Jul 2021
• Cabinet approves increase in Dearness Allowance and Dearness Relief : 14 Jul 2021
• Cabinet approves scheme for promotion of flagging of merchant ships in India by providing subsidy support to Indian shipping companies in global tenders floated by Ministries and CPSEs : 14 Jul 2021
• Cabinet approves continuation of centrally sponsored scheme National AYUSH Mission : 14 Jul 2021
• Cabinet approves change of nomenclature & mandate of North Eastern Institute of Folk Medicine (NEIFM) as North Eastern Institute of Ayurveda & Folk Medicine Research (NEIAFMR) : 14 Jul 2021
• Government approves continuation of Rebate of State and Central taxes and Levies (RoSCTL) on Export of Apparel/ Garments and Made-ups : 14 Jul 2021
• Cabinet approves “India COVID 19 Emergency Response and Health Systems Preparedness Package: Phase II” at a cost of Rs 23,123 crore : 08 Jul 2021
• Cabinet approves Memorandum on Cooperation (MoC) between Competition Commission of India (CCI) and Japan Fair Trade Commission (JFTC) : 08 Jul 2021
• Cabinet approves Memorandum of Understanding (MoU) between Institute of Cost Accountants of India (ICoAl) and the Association of Chartered Certified Accountants (ACCA), United Kingdom (UK) : 08 Jul 2021
• Cabinet approves modifications in Central Sector Scheme of financing facility under ‘Agriculture Infrastructure Fund’ : 08 Jul 2021
• Cabinet approves amendment in Coconut Development Board Act, 1979 for making the post of Chairman, Coconut Development Board as Non-Executive Chairman : 08 Jul 2021

The next meeting of the CEO FORUM will be held on Friday, 6th August 2021 from 8:30 am to 9:45 am on the Zoom Platform.

Mr. T. Nandakumar IAS, Former Secretary to Govt of India, who is an accomplished Bureaucrat specialised in Public Policy, Agriculture, Food, Dairying, Textiles and International Trade has agreed to speak on “Way forward for Kerala”.

Join Zoom meeting.

Topic: CCCI CEO FORUM – Way forward for Kerala – August 2021

Time: Aug 6, 2021 08:30 AM India

Meeting ID: 893 018 4867

Passcode: ceoforum21

https://us06web.zoom.us/j/8930184867?pwd=SkNYcjNBbWdkMlNoVXNIMWtRNldFQT09

The Cochin Chamber of Commerce & Industry in association with Aster Medcity, Kochi, organised a Covid-19 Vaccination Drive between the 14th and 22nd of June, 2021.

We were successfully able to vaccinate 2500 individuals, who represented our Member organisations and their beneficiaries and also others from the business fraternity.

The Virtual Meeting of the CEO FORUM – June 2021 was held on Friday, 18th June 2021 from 8 am to 9:30 am on the Zoom Platform.

Dr. Manu Melwin Joy, Associate Professor, School of Management Studies – CUSAT, who is an accomplished academician, writer and thinker, was the Speaker. He spoke on the topic, “All play and no work makes you Healthy, Wealthy and Wise – Make your work, a Gameplay.”

Mr. K. Harikumar, President of the Chamber welcomed the participants and gave a quick introduction of the Guest Speaker.

During his session, Dr. Manu shared a lot of interesting information on the importance of games in each one’s life. He also shared insights on how to approach work through gamification as a solution. He further elaborated on how gamification techniques at workplaces can bring out the best in every individual, improve teamwork, bonding and help employees enjoy every minute of his/her work life.

Some of his interesting findings on how gamification solutions which are being employed at major corporates worldwide and how it has brought about changes in the employees and processes at various departments were indeed a breath of fresh air.

The session by Dr. Manu was followed by a very interactive networking session where suggestions for workplaces in various sectors were discussed.

Mr. Sabarish S., Head – Corporate Business, Club Mahindra Holidays also gave a presentation on their offerings for the Chamber Members and their employees.

Mr. P.M. Veeramani, the Vice President of the Chamber delivered the Vote of Thanks.

The session ended by 9:30 am.

The Virtual Meeting of the CEO FORUM – July 2021 was held on Friday, 16th July 2021 from 8 am to 9:30 am on the Zoom Platform.

Mr. G.K. Pillai, Former Chairman & Managing Director, Heavy Engineering Corporation Ltd. , was the Speaker. He spoke on the topic, “A Leader – A Catalyst for Growth in turbulent times.”

Mr. K. Harikumar, President of the Chamber welcomed the participants and gave a quick introduction of the Guest Speaker.

In his opening remarks, Mr. Pillai said that Leaders of every single company that has survived and revived during the Covid Pandemic are a good example of how Leaders have been a catalyst for organisational growth during turbulent times.

He emphasized the following points during his session, which he felt will help leaders to successfully manage their organisations in difficult times:

(1) Conserve cash/ Manage liquidity
(2) Reduce fixed cost/expenses
(3) Management of working capital
(4) Managing capital expenditure
(5) Banking relationships
(6) Customer Connect/ Customer Relationship Management
(7) Managing Human Resources

Mr. Pillai urged the Chief Executives to think out of the box during difficult times, as only this will help organisations find the way forward during crisis situations. He suggested that Leaders should give their team a direction, confidence and trust which will lead to good results.

He shared some interesting initiatives from his time with Heavy Engineering Corporation Ltd and how he turned around things with the support and cooperation of his team.

Mr. Pillai then interacted with the participants and also encouraged the Chamber Leadership to work closely with the State Government in order to develop the Industry, thereby creating employment opportunities ably backed with strict rules, guidelines and SOP’s which will create a bright future for the State and the future generation of Kerala.

Mr. P.M. Veeramani, the Vice President of the Chamber delivered the Vote of Thanks.

‘Social Media Intermediaries’ is defined under Rule 2(i) of Rules, 2021 as “an intermediary which primarily or solely enables online interaction between two or more users and allows them to create, upload, share, disseminate, modify or access information using its services.” Therefore, all online applications such as WhatsApp, Instagram, Facebook, LinkedIn, fall within ambit of the definition Digital media (by virtue of these players being ‘intermediaries’).

Rule 4 of the Rules, 2021, provides for ‘Additional due diligence to be observed by significant social media intermediary’ and mandates all social media intermediaries to enable the identification of the first originator of the information on its computer resource. The disclosure shall be made only in the following 2 scenarios:

a) as may be required by a judicial order passed by a court of competent jurisdiction; or

b) an order passed under section 69 by the Competent Authority as per the Information Technology (Procedure and Safeguards for interception, monitoring and decryption of information) Rules, 2009.

Limitations to the Rule 4(2) of the Rules, 2021:

The order mentioned hereinabove, passed by the authority for tracing the first originator, shall only be limited to the purposes of prevention, detection, investigation, prosecution or punishment of an offence related to the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, or public order, or of incitement to an offence relating to the above or in relation with rape, sexually explicit material or child sexual abuse material, punishable with imprisonment for a term of not less than five years.

Exemptions to the Rules 4(2) of the Rules, 2021:

The Rules DO NOT require the social media intermediary to disclose the information of the first originator in case the order passed by the authority, relates to the following:

a) cases where other less intrusive means are effective in identifying the originator of the information.

b) disclose any contents of any electronic message, any other information related to the first originator, or any information related to its other users.

On the bright side, the Rules, 2021, whilst hampering the right to privacy to a certain extent, is also interesting in light of the decision of the Hon’ble Supreme Court in  Justice Puttuswamy (Retd.) v. Union of India^[1], wherein it was held that the right to privacy is granted to citizens with exceptions. The judgment provided for exceptions which said that “a person’s right to privacy must be preserved except in cases where legality, necessity, and proportionality are all weighed against it”. The landmark case of privacy as mentioned supra, is inclined more towards protection the privacy of the individual, however, when the judgement is read with an open mind, it is observed that, the contentions regarding State security and crime prevention, are genuine grounds which require the social media intermediaries to disclose the information to the authority to trace the first originator.

Given the above, the Rules, 2021 are a balance between the right to privacy of the users, and the manner in which the law requires the social media intermediaries to disclose the information of the first informant. However, it is pertinent to note that, implementing Rule 4(2) of the Rules, 2021 will cause a significant damage to the privacy of the individuals.

The suit initiated by WhatsApp brings about different dynamics which emphasize on privacy related issues. The Rules, 2021 provide powers to the government to access data of the users from the social media intermediaries which puts the users in a vulnerable position. The Rules, 2021, do not provide an option / choice to the social media intermediaries, and mandates them to provide this information at the request of the Government.

It is important to note that the data that is being shared with the Government is not owned by the social media intermediaries, but by the sender of the message i.e., the users of the social media intermediaries. The end – to – end encryption facility provided by WhatsApp gave a sense of relief to the users while using the platform for day-to-day communication and sharing data. However, the introduction of the Rules, 2021 undermines such a facility. The suit initiated by WhatsApp will prove vital in addressing privacy related aspects and potentially fasten the process of implementation of the Personal Data Protection Bill, 2019.

The authors are Partner and Associate respectively, with Shivadass & Shivadass (Law Chambers). 

The contents and comments of this document do not necessarily reflect the views/position of Shivadass and Shivadass (Law Chambers) but remain solely of the author(s). For any further queries or follow up, please contact [email protected].

The Union Cabinet, on June 2, 2021, approved the Model Tenancy Act, 2020 (‘MTA’). The main objectives of this MTA include the need to bring and maintain an equilibrium between the rights and obligations of the landlords and the tenants and provide a speedy adjudication process to resolve disputes between landlords and tenants.

The State and the Union territories can adopt the MTA by instilling a new legislation or through modifying the subsisting rental laws. The MTA primarily a) shifts to a regulatory framework for governing tenancy related disputes rather than ‘control mechanisms’ prevalent in some States / regimes, b) give a legal backing to the rental housing market, c) to promote a sustainable and economic lifestyle which is provided under Affordable Rental Housing Complexes (ARHC), 2020. It shall act as the means to build a relationship of trust between the landlords/owners and tenants.

The Rent Control Act, 1948 (‘RCA’) was passed in order to maintain ensure that the rights of landlords/owners and the tenants are upheld. However, each State and the Union Territory were given the liberty to formulate respective state legislations keeping in view the requirements of the respective State and Union Territory.

However, when the RCA was implemented, it was observed that the provisions of the RCA were more beneficial towards the tenants. For example, the act disregarded factors like inflations and increased property valuation due to which the rent received by the landlord / owner remained the same since 1948.

When amendments to the RCA were suggested by the Central Government in 1992, the same was strongly opposed, therefore, the same failed to take effect.

• This framework did not provide for a balance of relationship between the landlords/owners and tenants.
• The law restricted the landlords / owners with respect to imposing strict restrictions for evicting tenants and revising rental rates. This practice defeated the purpose of the Rent Control Act, 1948, which was to protect the tenants from exploitative practices. However, the excessive authority exercised by the authorities in protecting the tenants strongly deviated from the rights of the landlords / owners.
• On the contrary, this Act gave certain discretionary powers to the landlord/owner to increase the rent without having any cap for the same. Therefore, without any proper legislation in place, the landlords / owners exploited the market and caused hinderance to the tenants.
• Due to the unregulated rental values and security deposits demanded by the landlords / owners, a large number of houses were left vacant.

Therefore, the ambiguity in the property legislations, improper contract enforcement and discrepancies in the rent control laws coupled with poor implementation served as obstacles in the enforcement of the urban and rural rental housing regimes.

• An adequate rental housing stock will be established for the income groups which shall address the issues such as unauthorised settlements between landlord / owners and tenants.
• A speedy adjudicating mechanism to resolve the disputes with the introduction of certain authorities upon different matters.
• A gradual shift towards the formal market through institutionalisation of rental housing in the country.
• A relationship of trust by all formal means between the landlord/owner and the tenant.

In order to ensure that the objectives are attained, following features have been introduced:

1) Written Rental Agreement:

It is compulsory for the landlords/owners and tenants to enforce a written rental agreement and register the contract with the Rental Authority within two months of its execution. Subsequently the parties shall receive a Unique Identification Number (UIN), within 7 days of registration. It is proposed for the States and Union Territories to encompass a digital platform in their vernacular language to effectuate the process of online document submission.

2) Institution of Independent Mechanism:

The earlier regime gave the civil courts the power to deal with disputes relating to landlord – tenants / rental agreements. This however, led to a large number of pendency of cases. Hence, the MTA mandates setting-up of an independent adjudicating authority / quasi-judicial bodies that would exclusively deal with disputes between landlords / owners and tenants.  These quasi-judicial bodies shall be in the form of a Rent Court or Rent Tribunal and shall settle the disputes in a timely and effective manner. It has also been laid down that any complaint / appeal registered under this MTA hence-forth needs to be settled within 60 days of the complaint / appeal is filed.

3) Property Maintenance:

The rent agreement shall facilitate all the details defining the maintenance of the property. In the event of refusal by the landlord / owner to treat the damage or call for repairs made by the tenant, the tenant shall pay for expenses and subsequently deduct the amount incurred in treating the damage from monthly rent paid. On the contrary, if the landlord acts upon the call for repair, the expenses incurred shall be deducted from security deposit. The MTA also provides for a list of repairs / damages that each party is responsible for carrying (in case the landlord refuses to carry that work) and the respective expenses incurred to be deducted from the security deposit / rent as applicable.

4) Fair Compensation for delayed rentals and overstays:

As per the previous regime, there was no relief to the landlords / owners upon refusal by the tenant to vacate the premises after the termination of their agreement, which resulted in fear of losing control over the premises and an unending litigation to repossess the same.

However, as per the MTA, if the tenant continues to occupy the premises even after the termination of the agreement, the tenant is mandated to pay twice the rent for the subsequent two months. In case the tenant fails to pay the same, the landlord / owner shall have the right to evict the tenant from the premises.

5) Limitation on sub-letting the premises:

Earlier, the tenants procured illicit gains without knowledge or prior consent of the landlord/owner, by sub-letting the property for commercial purposes. However, the MTA now prohibits the tenant from sub-letting the premises partially/fully for unless a written consent is obtained from the landlord.

6) Prescribed Security Deposit:

Prior to the MTA, the landlord / owners collected increasingly high security deposits to the extent of one year which caused deep hardships to the tenants. The MTA now provides for a standard parameter for collecting the security deposits from the tenants.

a) Residential Purposes: the security deposit must not exceed two (2) months’ rent in advance.

b) Non-residential Purposes: the security deposit must not exceed six (6) months and a minimum of one (1) month rent in advance.

7) Legacy of the tenancy:

The previous regime provided for the rent agreement to succeed upon the death of the person on whose name the agreement was made. The family of the tenant was required to effectuate the agreement.  But as per the MTA, the tenancy agreement ceases and the family of the tenant, if willing to continue shall occupy the same upon their will with the consent of the landlord.

1) Prospective nature:

The MTA shall not impact the existing tenancy disputes i.e., those initiated before the commencement of the MTA. This shall deprive the landlord/owner from getting the market rates of their property as well as the tenant from reaping the benefits enshrined under the MTA.

2) Complexity in the institutional framework:

The MTA provides for creation of a Rent Authority for registering the agreements, which is carried by sub-registrars under the Registration Act, 1908. This causes confusion while implementing the MTA, as it overlaps with the provision which requires setting up of a separate authority for registration.

It creates the Rent Court and Tribunal but also grants co-extensive powers of the court to the Rent Authority, which leads to multiplicity of authorities.

3) Definition of Premises:

The scope of ‘Premises’ in the present as well as the earlier regime is limited to any building or a part of the building which is intended to be let on rent for residential or commercial or educational purpose and excludes renting for the industrial purposes.

The earlier regime as well as the MTA has not spoken about the scope of hotel, lodging house, etc. from being considered as premises.

4) Written Agreement:

The MTA mandates the written agreement between the parties which is beneficial to bring about transparency and accountability, but the adverse effect is caused to the labour and backward sectors which usually take up the tenancy through oral agreements. There needs to be a recourse to the ones who are deprived of entering into such agreements.

The implementation of the MTA shall boost the rental housing in India through a sound implementation of the provisions which shall help the government strengthen its “Housing for All” initiative. The MTA shall encourage the landlords / owners to unlock their properties for rental purpose as the MTA provides for equal rights between landlords / owners and tenants. The MTA will attract more investors and more rental housing stock which will help students, working professionals and migrant populations to find urban accommodation, especially in Covid-19 exigencies. The MTA lays certain rules and obligations on the landlords / owners as well as the Tenants which shall build a relation of trust between them. The speedy and effective adjudicatory mechanism is another key advantage of MTA.

The MTA shall modify the enforcement of existing laws with a just and fair norm with adequate transparency and accountability The interest of both the parties is considered rather than being in favour of tenants only. Though the government is protecting the rights of the tenants, the elaborated rules are prescribed to address the issues surrounding the landlords/owners. The MTA proves to be a blessing as it keeps the relationship between tenant and landlord/owners in equilibrium.

Even though the MTA provides for a comprehensive approach to the issues faced by the landlord / owners, the implementation of the same rests with the State Authorities as land and urban development falls under the state list of the Indian Constitution. As the MTA is not legally binding on a State or Union Territories, it is to their discretion if they want to accept or reject the MTA or modify the provisions as per their requirements. Hence, the alignment of the rental norms by the States with the Centre shall be reflected and introspected over the years.

The authors are Partner and Associate respectively with Shivadass & Shivadass (Law Chambers). The Authors would like to acknowledge the contributions of Ms. Mahek Agarwal, a 3^rd year law student from Symbiosis Law School, Hyderabad.

 The contents and comments of this document do not necessarily reflect the views/position of Shivadass and Shivadass (Law Chambers) but remain solely of the author(s). For any further queries or follow up, please contact [email protected]

On 30th July 2021, Shri K N Balagopal, Finance Minister, announced a ₹5,650-crore package to support small traders, businesses, farmers etc. in coping with the COVID crisis.

Major highlights

1) Upto 4 percent interest subsidy for loans up to Rs 2 lakh taken from banks. Valid for loans availed from 1st August 2021

2) Rent waiver for commercial space in government property from July to December 2021.

3) MSME units are exempted from paying building tax, electricity fixed charges and government rent from July to December 2021.

4) The penal interest will be waived for all KSFE loan defaults from January 20, 2021, to September 30,2021.

5) KFC measures

a) ‘Startup Kerala’ scheme that will offer loans up to ₹1 crore without collateral security.

b) 20 crore loan for units in the different industrial estates.

c) Revived Chief Minister’s Entrepreneurship Development Programme – Loans up to ₹1 crore at 5% interest will be sanctioned under this scheme to 2,500 industrial units in the next five years.

d) Moratorium of one year for the loans taken by small-scale enterprises from the KFC.

e) A scheme for units manufacturing equipment for combating the pandemic where 90% of the project cost would be provided as loan.

2. Law to setup Complaint Redressal Committee for Industry:

In its first Cabinet meeting, the newly elected Government has decided to institutionalise a single window system to address complaints with regard to the setting up of industries in the State. A Special Act is set to be enacted to constitute the Grievance Redressal Committee. A Committee has been directed to examine the draft of the said law.  The Industries Minister has indicated that the Bill to institutionalise the Redressal framework will be introduced in the ongoing session of the Legislative Assembly.

3. The Directorate General of Foreign Trade has invited suggestions for drafting a new Foreign Trade Policy. The deadline is 31st July (Notice date- 16th July) Submission link : https://bit.ly/3khHEI2

4. The Ministry of Commerce and Industry is inviting suggestions on India UK enhanced trade partnership. Deadline: 25th July (Notice date – 25th June). Contact id: [email protected]

5. The Government of India has listed some important bills for introduction and approval in the Monsoon session of the Parliament. Some of them are listed below:

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