LEGAL UPDATES FOR THE MONTH AUGUST, 2023

Special Event

India’s New Data Protection Law, 29th August, 2023

The team at Ivy Law participated in a webinar on “India’s New Data Protection Law” organized
by Ikigai Law. The key highlights of the webinar was the recent update on the Digital Personal
Data Protection Bill, 2023 and its impact on the consumers as well as big technology companies.
A comprehensive discussion persisted including the bill's major problems with regard to the
public's views and its potential pitfalls. The webinar emphasized on various terms like “data” and
“processing” of digital personal data within India. The obligations of the fiduciaries and the
rights and responsibilities of the data principal were also deliberated upon.

Legal Updates

1. Rajya Sabha Passes the Advocates (Amendment) Bill, 2023 (“Advocates Bill”)

https://sansad.in/rs/legislation/bills

The Rajya Sabha, on 3rd August, 2023, has passed the Advocates Bill, with the aim to repeal the
Legal Practitioners Act, 1879, and to amend the Advocates Act, 1961 and thereby regulate the
legal profession through a single act namely the Advocates Act, 1961. The Advocates Bill further
provides that every high court and district judge can frame and publish list of touts (those who
procure clients for legal practitioner in return for any payment) who would be excluded from
entering the court premises, and any violation of this provision would entail punishment with
imprisonment up to three months or a fine upto INR 500, or both.

2. Digital Personal Data Protection Act, 2023 (“DPDP Act”)

https://www.meity.gov.in/writereaddata/files/Digital%20Personal%20Data%20Protection
%20Act%202023.pdf

The Ministry of Law and Justice, on 11 th August, 2023, has passed the DPDP Act after finally
been granted the President of India’s assent. The DPDP Act lays down the manner in which
companies should process users' data, gives Central Government (“CG”) the power to seek
information from firms and issues directions to block content on the advice of a data protection
board appointed by CG to handle grievances of individuals around personal data privacy if data
fiduciaries or firms using personal data fails to address individuals’ complaints. It further allows
users to correct their personal data and thereby aims to protect the privacy of Indian citizens
 while proposing a penalty of upto INR 250 crores on entities for misusing or failing to protect
digital data of individuals.

3. The Minister of Home Affairs Overhauls the Indian Penal Code, 1860 (“IPC”), Criminal
Procedure Code, 1898 (“CrPC”) and the Indian Evidence Act, 1872 (“IE Act”)

https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1947941

The Minister of Home Affairs, on 11 th August, 2023, has introduced three bills in the Lok Sabha
namely, the Bharatiya Nyaya Sanhita Bill, 2023, Bharatiya Nagarik Suraksha Sanhita Bill, 2023,
and the Bharatiya Sakshya Bill, 2023 in order to replace the IPC, CrPC and the IE Act,
respectively. As many as 313 changes have been proposed in the three criminal laws with the
objective to safeguard constitutional rights and deliver justice. They key highlights of the new
bills are:
 a new provision on mob lynching is introduced which would be punishable by seven years
imprisonment or life imprisonment or death penalty;
 enabling speedy justice through video trials, e-filing of First Information Reports;
 expanding the definition of sedition;
 bringing corruption, terrorism and organised crime under the penal laws, introducing
community service and solitary confinement as new forms of punishment and holding trials
in the absence of an accused;
 expanding the scope of offence against women pertaining to sexual intercourse by employing
“deceitful means” as well as considering sexual exploitation of women on the pretext of
marriage, job, promotions, a crime.

4. Union Cabinet Approves Outlay of INR 14,903 crore for Expansion of the Digital India
Programme

https://pib.gov.in/PressReleasePage.aspx?PRID=1949427

The Union Cabinet, on 16th August, 2023, has approved a five year extension (FY2021–22 to
FY2025–26) as well as expansion of CG's flagship Digital India programme, with funding
totalling INR 14,903 crore. The expansion has preserved cybersecurity as a key focus by
providing cybersecurity training to 2.65 lakh people, thereby making it easily accessible, low
cost and affordable. 5.25 lakh Information Technology workers would also receive upskilling as
part of the expansion. Further, 1,200 start-ups in tier 2 and tier 3 cities are expected to receive
some of the total investment as funding and three centres of excellence for research on the
application of artificial intelligence in healthcare, agriculture, and sustainable living would also
be established.
5. The Reserve Bank of India (“RBI”) Sets Guidelines for Penal Charges on Loan Defaults

https://rbidocs.rbi.org.in/rdocs/notification/PDFs/
FAIRLENDINGPRACTICE1B9DBE75410B4DA881E6EF953304B6F7.PDF

RBI, on 18th August, 2023, has published a circular outlining the procedures for penalising loan
accounts by banks. The new recommendations were created as a result of observations that many
banks apply penal rates of interest, over and beyond the applicable interest rates, in cases of
borrower defaults or non-compliance with the conditions of credit facility approval. As per the
circular, penalties for the borrower's failure to comply with the terms and conditions of a loan
contract would be handled as "penal charges" rather than "penal interest," which would be added
to the rate of interest imposed on loans. Penal charges cannot be capitalised, so no additional
interest can be calculated on them.

6. RBI to Develop Platform to Boost Seamless Digital Loans for Frictionless Credit

https://rbidocs.rbi.org.in/rdocs/PressRelease/PDFs/
PR750RBIPILOTPROJECTBAAA31635BD74A9E92A9F10C66B6B314.PDF

In light of growing digitalization in India, RBI is on the verge to create a technological platform
targeted at improving the seamless digital flow of credit by enabling a smooth flow of vital
digital data to lenders. The platform would facilitate non-collateral Micro, Small and Medium
Enterprises (“MSMEs”) loans and Kisan Credit Card loans up to INR 1.6 lakh per borrower,
among others, through participating banks to enhance credit penetration into underserved areas.
The platform further aims to create a shared space for various central and state government
entities, banks, credit information companies, digital identity authorities, etc., to share data for
credit appraisal, thereby bringing transparency, efficiency, cost reduction, faster disbursement,
and scalability to the lending process.

7. CG Floats Draft National Deep Tech Startup Policy (“NDTSP”)

https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1944369

CG has put out a draft NDTSP proposing changes across nine themes including access to
funding, strengthening the intellectual property regime, sustaining deep tech startups, ease
regulatory requirements and enabling shared infrastructure and resource sharing. The policy
seeks to bolster research and development in deep tech start-ups, which would further work on
fundamental and technical problems, unlike firms that monetise technology with distinguished
business models. Moreover, NDTSP calls for a more multi-pronged approach to protect Indian
interests by providing a coordinated, comprehensive push to optimally engage with international
partners and multilateral institutions.
8. CG to Roll out New Law on Digital Competition to Regulate Big Technology (“Tech”)
Companies

https://economictimes.indiatimes.com/tech/newsletters/morning-dispatch/exclusive-new-law-on-
digital-competition-likely-to-regulate-big-tech-it-minister-ashwini-vaishnaw-on-data-protection-
bill/articleshow/102588582.cms

CG is planning a separate digital competition law instead of tweaking the recently amended
Competition Act, 2002, in order to regulate big Tech companies. An official committee, led by
the Ministry of Corporate Affairs, would examine the need for ex-ante regulatory mechanisms
for digital markets through a separate law and study international best practices. However, large
multinational Tech companies have expressed their disagreement with the concept of ex-ante
regulations in India and according to them, since the existing Competition Act, 2002 has already
been revised earlier to address modern issues and manage fair trade concerns across various
sectors, there is no need to amend it again.

9. Proposed National Electronic-Commerce (“E-Commerce”) Policy in Final Stages, to be

Presented at the Top Level of CG

https://economictimes.indiatimes.com/industry/services/retail/national-e-commerce-policy-in-
final-stages-to-be-presented-before-top-level-official/articleshow/102870096.cms?from=mdr

The proposed national e-commerce policy, developed by the Ministry of Commerce and
Industry, s in its final stages, with the Department for Promotion of Industry and Internal Trade
having a thorough discussion on the same with various representatives of e-commerce
companies. The proposed policy is expected to be presented to the top level of CG wherein all
stakeholders' interests, including those of investors, manufacturers, MSMEs, traders, retailers,
startups, and customers, would be taken into account, with the goal to develop plans for creating
an environment that is favourable for the sector's inclusive and harmonious growth through the
adoption of modern technologies, a streamlined regulatory framework for ease of doing business,
supply chain integration, and increased exports.

10. Rajya Sabha Clears the Pharmacy (Amendment) Bill, 2023 (“Pharmacy Bill”)
https://sansad.in/getFile/BillsTexts/LSBillTexts/Asintroduced/
114_2023_LS_ENG83202360247PM.pdf?source=legislation
The Rajya Sabha, on 10th August, 2023, has passed the Pharmacy Bill, with the aim to amend the
Pharmacy Act, 1948 which regulates the practice and profession of pharmacy. The Bill looks at
the insertion of new section 32C (Special provision relating to Person registered or qualified
under Jammu and Kashmir Pharmacy Act, 2011) wherein anyone who is registered as a
pharmacist under the Jammu and Kashmir Pharmacy Act, 2011 or possesses prescribed
 qualifications would be deemed to be registered as a pharmacist under the Pharmacy Act, 1948
and the same would be contingent upon the person submitting an application for registration
within a year of the amendment coming into force, and further paying a prescribed fee.
11. The Securities and Exchange Board of India (“SEBI”) Seeks to Keep Regulated Entiti from
Financial Influencers (“Finfluencers”)

https://www.sebi.gov.in/reports-and-statistics/reports/aug-2023/consultation-paper-on-
association-of-sebi-registered-intermediaries-regulated-entities-with-unregistered-entities-
including-finfluencers-_75932.html

SEBI, on 25th August, 2023, released a consultation paper wherein it stated that influencers who
are not registered with the applicable financial sector regulator may lack the necessary
credentials or subject-matter knowledge and thus could impair investors’ interest. As per the
paper, no SEBI-registered intermediaries, regulated entities or their representatives should
directly or indirectly have monetary or non-monetary association for promotion or advertisement
(“ad”) of their services or products with any unregistered entities including Finfluencers. Further,
entities registered or regulated by SEBI or stock exchanges shall not share any confidential
information of their clients with any unregistered entities and therefore registered Finfluencers
must adhere to a code of conduct and rules set forth by SEBI and the enforcement agency
concerned would take appropriate action, including filing case under Section 420 (Cheating and
dishonestly inducing delivery of property) of the IPC.

12. Doctors Oppose the National Medical Commission’s (“NMC”) Directive on Prescription of
Generic Medicines Rather Than Their Branded Counterparts

https://www.nmc.org.in/MCIRest/open/getDocument?path=/Documents/Public/Portal/
LatestNews/NMC%20RMP%20Conduct%20Regulations%202023.pdf

NMC, on 2nd August, 2023, has notified the National Medical Commission Registered Medical
Practitioner (Professional Conduct) Regulations, 2023, wherein it has demanded the doctors to
only prescribe generic drugs to patients rather than their branded versions, failing which they
would be punished accordingly. However, apprehensions have arisen regarding the efficacy and
quality of these generic drugs as the medical professionals argue that their effectiveness and
reliability may be compromised due to lack of standardized testing and approval procedures.
They further contend that branded drugs offer greater assurance of quality. This notification has
thus sparked a wave of outrage and criticism among the medical community across India.
Doctors, medical groups, and healthcare organisations have therefore urged the Prime Minister
as well as the Union Health Minister of India to reconsider and repeal the rule.
13. Over-the-Top (“OTT”) Players Might Possibly be Removed from the New Draft Indian
Telecommunication Bill, 2022 (“Telecom Bill”)

https://economictimes.indiatimes.com/industry/telecom/telecom-policy/ott-players-may-have-
been-removed-from-new-telecombill/articleshow/102435096.cms?
utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

While the Union Cabinet has cleared the draft Telecom Bill, CG has most likely removed OTT
players from the definition of telecommunication services in the Telecom Bill, giving huge relief
to communication service providers such as WhatsApp and Telegram who would thus remain
out of telecom regulation by requiring them to obtain a licence from CG. In the hindsight, it is
considered to be amongst the most contentious issues in the Telecom Bill, with telecom service
providers seeking a level-playing field with OTT applications over communication services such
as voice calls, messages, etc. where operators had to incur high costs of licences and spectrum,
while OTT players rode on their infrastructure to offer free services.

14. Various Renowned Software Companies Seek Change in Local Value Addition Norms

https://economictimes.indiatimes.com/tech/technology/software-companies-seek-tweak-in-local-
value-addition-norms/articleshow/102916901.cms?from=mdr

Various reputed multinational software corporations have been pushing for a change in local
value addition requirements for software, arguing that the absence of such standards prevents
them from competing for government contracts. As government regulations on the procurement
of software and associated services do not take into account the nature of how software and other
related services are generated, enterprises that are involved in their development are denied the
reasonable opportunity to compete for state-run projects and procurement. Therefore, as per the
software companies, there should be uniform standards for software localisation.

15. The Ministry of Information & Broadcasting (“MIB”) Refrains Media Entities From
Carrying Direct or Indirect Ads of Betting, Gambling
https://pib.gov.in/PressReleasePage.aspx?PRID=1952004

MIB, 25th August, 2023, has issued a warning to all parties, including media outlets, online ad
intermediaries and social media platforms, requesting them to stop airing any type of betting or
gambling-related ads or promotional content as they pose significant financial and socio-
economic risk for consumers, especially youth and children. MIB has specifically underlined that
disregarding this warning could result in CG taking the proper legal action. As betting and
gambling activities are illegal in most parts of India, consequently, advertisements and surrogate
promotions for these betting platforms are similarly illegal.
16. Alleged Liquidity Crunch of Award Debtor Not Sufficient Cause Under Order XXI Rule
26 of the Code of Civil Procedure, 1908 (“CPC”) To Grant Stay Of Enforcement Of
Award: Delhi High Court (“Delhi HC”)

https://www.livelaw.in/high-court/delhi-high-court/delhi-high-court-arbitration-act-alleged-
liquidity-crunch-of-award-debtor-not-sufficient-cause-234316#:~:text=The%20Delhi%20High
%20Court%20has,relation%20to%20an%20arbitral%20award.

The Delhi HC has ruled that alleged liquidity crunch of the award debtor cannot be a sufficient
cause under Order XXI Rule 26(1) (When Court may stay execution) of CPC to grant stay of the
enforcement proceedings in relation to an arbitral award. The court had directed the award debtor
to deposit the entire award amount of INR 165 crores, however, the award debtor sought to
modify the court’s order so as to enable him to furnish bank guarantee instead of cash deposit, on
the ground that the same shall lead to liquidity crunch in its company. Therefore, the court finally
concluded that the bank guarantee cannot be utilised by the decree holder to compensate its loss.