Corporate and Economic Legislation: SEBI, FEMA, Competition, Consumer and IPR
SEBI Act, 1992
SEBI regulates the securities market with powers to investigate, issue directions, penalise and requisition information. Core regulations: ICDR (public issues), LODR (listing obligations), SAST (takeovers - 25% threshold triggers a mandatory open offer), PIT (insider trading). Penalties lie under ss.15HB-15J.
FEMA, 1999
Section 3 prohibits dealing in foreign exchange without authorisation; both current and capital account transactions are regulated. Section 13 penalty may extend to three times the sum involved; s.15 allows compounding.
Competition Act, 2002
Section 3(1) prohibits anti-competitive agreements. Horizontal agreements, including cartels, are presumed to cause appreciable adverse effect under s.3(3); vertical restraints (tie-in, exclusive supply, refusal to deal) are tested under s.3(4) by rule of reason. Section 4 prohibits abuse of dominance - predatory pricing, denial of market access, discriminatory conditions. Combinations are regulated under ss.5-6. Penalties can reach 10% of average turnover, with leniency for cartel whistleblowers.
Consumer Protection Act, 2019
Consumers include e-commerce buyers; unfair trade practice and unfair contract terms are defined; product liability lies against manufacturer, product service provider and seller. Jurisdiction under the 2021 rules: District up to ₹50 lakh, State above ₹50 lakh up to ₹2 crore, National above ₹2 crore. The CCPA investigates.
IPR
Copyright protects literary, dramatic, artistic works and computer programmes; registration is not mandatory. Trademark protection covers registered marks and prior users. Patent needs novelty, inventive step and industrial application; term 20 years. Designs protect new, original shapes and patterns.
Worked example
Two cement companies agree to fix prices. This is a horizontal agreement under s.3(3)(a); appreciable adverse effect is presumed, so the CCI need not prove actual harm, and the first discloser may obtain leniency.