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Laws of Convenience
By Anil Sinha
Difficulty in the enforcement of a law is one of the refrains of the authority as well as the legal practitioners and the people. The authorities have a tendency to add more stringent provisions in the law as a solution to this problem, increasing the already excessive discretionary powers in their hands. As experience shows, this forces people to find new ways to avoid or evade the law and even indulge in corruption or other alternative means.
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This syndrome can be attributed to the faulty mode of law making prevailing in the country. What we have now are mostly “Laws of Convenience”. These laws are drafted by government bureaucrats who try to gain as much discretionary powers as they can. But higher the discretionary powers of the authorities, lower the chances of compliance with the law and higher the chances of corruption. This malaise is also attributable to the technical weakness of the regulatory bodies. The weaker the regulatory body, the more officers opt to impose more discretionary and stringent provision.
The Laws of Convenience are enacted without ample consultation with the stakeholders and without preparing sufficient infrastructure for law implementation. Before 1990, nobody would know about what law was being prepared before it was actually enacted and published in the Gazette. So the laws of pre-1990 period in general can be termed as the Laws of Convenience.
Even after 1990, the mentality of the lawmakers and the regulatory body didn’t change. Even during the parliamentary system, though the draft laws used to be presented before the parliament for discussion and approval prior to enacting them, the practice of not consulting with the stakeholders was continued. Even if consulted, the fundamental points of law were shielded carefully and it was projected as if they are unchangeable. In fact, the majority of the Members of Parliament (whose primary function, according to the principles of parliamentary democracy, is to make laws) did not understand the process of law making at all. They opposed or supported a draft law depending upon the party presenting the draft. They would rarely read the draft or consult those who could assist them in understanding the reality or who could give a fair and independent opinion. They would come up with the excuse that since they could not understand the legal language, they could not debate upon the provisions of the draft law. As is the practice in other countries with parliamentary system, they could have invited experts in the related fields and lawyers to explain the draft and its enforceability. The lawyers would have been very happy to help as it is a matter of prestige for the lawyer to do so. But that took place very rarely. Most of the competent lawyers were simply kept busy in justifying the political moves of a certain political hero or political party .
The preparations for the enforcement of the law are started in Nepal only after the law is passed and enforced. Authorities say that the current Income Tax Law is an outcome of extensive public debate. Relatively speaking, they are right as the kind of debates held on this law was in fact unprecedented in the history of Nepal’s law making. But the suggestions put forward during such debates have hardly ever been incorporated in the law. Thus the debate was only a farce.
As this new law would bring a massive change in the existing practice, and would affect the day to day life of the people, a lot of new infrastructures were required for its effective implementation, but such infrastructure are still not there. Also the stakeholders needed extensive education about the new legal concept and the law itself which required a lot of time, efforts and patience. Therefore, I had advised the authority to implement this law only after a cooling off period of some years during which the authorities, the taxpayers, lawyers and even the judges would have time to gain more expertise and knowledge about the new system. But the authorities, including the Minister concerned, were of the view that if such a cooling off period were allowed, this would encourage street demonstrations pressurising the authorities for changes in the law that would make the law weaker. The Minister forgot that he was in his position with the help of similar types of street demonstrations. He should have had the readiness to protect the same freedom of the people who were going to be affected by the new law. When I see those very lawmakers of yesteryears demonstrating on the streets now (and for a good cause), I feel uneasy as they forget the very fundamental logic of their present demonstrations if they are elected and made the lawmakers. When they held high positions, they taught the theory of convenience to the present administrators who have now gone one step ahead in utilising that learning.
Among the other Laws of Convenience is the Consumer Protection Act. The regulatory body needed for the implementation of this law was not strong enough when this law was enforced. The result is that though the law exists, it is not properly implemented giving the impression that laws in Nepal are not for actual enforcement. Is a mere training of a day or two conducted by some NGO for administrators or Judges of various levels sufficient enough to achieve the objective of the law? I strongly believe in the old maxim that “a little learning is a dangerous thing”. Real expertise and open-mindedness are the need of the hour. This can only be achieved if all those concerned, beginning from the lobbyist, the lawmakers, the administrators, the lawyers and the judges, agree at their respective levels to change their attitudes to create an enabling environment for the creation of a society based on the principles of the rule of law. The rule of law means not only the enforcement of the law that is passed but it implies that the laws should be formulated through a judicious process without infringing the natural law.
Similar is the case with the Environmental Act. The preparations for the development of the regulatory body needed for the implementation of this law were started only after the law was enforced. The most talked about CIAA related law and all revenue related laws including the Revenue Leakage (investigation and control) Act are classic examples of the Laws of Convenience as they were enacted very undemocratically even at a time when the so-called democratic governments were in office.
The most important example of the Laws of Convenience is the Income Tax Act. The law was made by those who collect taxes and follow a target of tax collection, without any mechanism of accountability for their wrongdoings. One provision of the Income Tax Act says that the authorities may reassess the tax return as many times as they see fit. Making reassessment means a mistake in the previous assessment. Therefore, this provision means that the tax authorities can repeat the same mistake several times over, and the liability of such mistakes by the tax authority can be put on the taxpayer. But if the taxpayer makes only one mistake or attempts to avail benefit of an unclear provision, s/he is immediately punished. One absurdity committed in the drafting of this law is such that if we study the law verbatim, one provision requires a dead person to file the details on his/her assets. It is a different matter that for a practical purpose, the lawyers and judges interpret it to mean the inheritor of the dead person. Such classic examples of absurdities would have been avoided had the authorities allowed a proper and sufficient debate on the draft law and taken pains to incorporate the suggestions made by the stakeholders during the course of the debates. But they did not incorporate those suggestions, as the entire exercise of the public debate was no more than a farce and the lawmakers as well as the bureaucratic lobbyists were prejudiced.
The law governing the investigation of revenue leakages is another example of the Law of Convenience. During the Panchayat period a Revenue Investigation Division was set up with the “hidden” intention of “fixing” certain groups of people. And immediately after the formation of the Division, there were a number of raids made on various businesspersons on the pretext of one allegation or another. Some of the allegations were valid to some extent, while some were simply made up. Ultimately, however, none of them could be proved true but this law caused an immediate and massive capital flight from the country causing serious economic problems in the country.
Later there was a separate law made for this Division. But the law was not in coordination with the revenue collection laws. The anomaly due to this lack of coordination is such that if a case is taken up by one officer the accused has to face the investigation and trial as a criminal offender, while if it is taken up by another officer, it becomes an economic/civil offence. Those who fought and made the Income Tax Act and the VAT Act as the supreme Laws (the provisions of these laws are such that they cancel the provisions of other laws), they intentionally left the revenue investigation law alive because it was only they who would use or misuse it as per their convenience. Making a case a criminal offence, the law has created the breeding ground for corruption. Faced by a criminal case, the person naturally prefers to settle it by even paying bribes. Those who can’t or won’t settle a case in this way will end up making a bail plea at the District Court like a murderer or a petty thief does. Such cases are dealt by those judges who have relatively limited knowledge of the technical aspects of the revenue laws. If the lawmakers are in fact serious, they should immediately abolish the duplication of laws and ensure that the entire issue including the administration of the law should be dealt with from a single authority. If not, this is the worst evidence of lawmakers’ distrust of the Inland Revenue Department or the Customs Department. Such an environment of distrust does not bode well for the future of the country.
(Sinha is a well-known business lawyer)
Sports Shoes IPR Game
While the enactment of a new Industrial Property Rights (IPR) Act is being delayed, the IPR related disputes between different business firms are becoming more complicated and difficult to resolve. The 40 year old outdated Patent Design and Trademark Act 2022 BS is either insufficient or the regulatory body is not competent enough to handle IPR related cases.
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Shiv Ratna Sarda
proprietor
AC Footware |
One such dispute that has been going on for over a decade resurfaced early March 2005 to public notice, when five sports shoe manufacturers and one slipper manufacturer held a joint press conference and complained that they were being forced to close down their factories by their bigger competitor Kiran Shoes Manufacturers. The complainants claimed that the owners of Kiran Shoes have a good influence in the police force and are utilising this clout to intimidate its competitors.
The dispute is not only about the brand names that look or sound similar but also about the design of the product. While Kiran Shoes is manufacturing and selling sports shoes under the brand name GoldStar, its competitors are manufacturing and selling similar shoes with brand names such as GoodStar, GladStar, Superstar, Gulf Star, GoalStar. Though the brand name dispute has been going on for quite some time, the recent squabble is more about the use of what the sports shoes manufacturers call “the side trim device”.
The complainant firms claim that the side trim is an indispensable part of a sports shoe and no sports shoe can be imagined without a side trim, therefore it can never be claimed as an exclusive right to use one. But Amir Pratap Rana, Managing Director of Kiran Shoes, counters the argument by showing photos of various international brands of sports shoes that have no side trim. Kiran Shoes itself has a number of designs of GoldStar that have no side trim that resembles the disputed one.
Another question being raised is about the registration of the disputed side trim as a proprietary design of Kiran Shoes. The competitors claim that though they were manufacturing sports shoes using the now disputed side trim, Kiran Shoes outsmarted them and got its side trim registered in its name. Another point of the complainants is that the side trim can best be claimed to be a design, but Kiran Shoes has got it registered as a trade mark, therefore, this registration is invalid. But Rana shows a decision by the Patan Appellate Court dated 2057 Mangsir 7th which has declared the registration valid.
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The dispute recently reached a new stage after Kiran Shoes started lodging complaint with the police administration, which started raiding the other shoes factories and confiscating the products bearing the disputed side trim device. Though these goods alleged to be counterfeit are submitted to the Department of Industry, both sides of the dispute are irked at the delay by the Department in taking decision about it. In this connection, Rana’s competitors argue that the police administration has no right whatsoever under the Patent, Design and Trademark Act, hence the action of the police is an illegal one. Rana says he had to approach the police because the competitors did not stop manufacturing and selling their products copying his firm’s registered side trim device. ‘And I had nowhere else to go for remedy as the law has not specified how I should go about when the other party continues infringing my Industrial Property Right. But I know it is a case of theft, and when you have to complain about a theft you have to go to the police.’
This is not the first case of trademark dispute that Kiran Shoes is facing. Its struggle with such case had started soon after the beginning of its business with manufacturing and selling Hatti Chhap slippers. Though the infringer of that brand was caught and punished, he did not stop repeating the same infringement for a quite long time. Kiran Shoes then kept quiet because taking more actions was costly and time consuming. However, as the infringer has now stopped making counterfeit Hatti Chhap Chappal, the case now stands resolved.
The origin of the present brand name and side trim devise dispute dates back about eight or nine years when Kiran Shoe’s competitor factory in Morang district started producing sports shoes using the brand “New Gold Star”. Kiran Shoes complained to the police who made a raid on the Morang factory, confiscated the counterfeit shoes and submitted the same to the Department of Industry. The department decided in favour of Kiran Shoes and fined the infringer. The infringer then applied to the Department seeking for permission to use GoodStar as the brand but that was rejected on the ground that GoodStar was similar to GoldStar. After that the party went to court which decided that the manner in which the DOI had rejected the application was not right. But the Department did not try to correct the process nor did it appeal against the court’s decision, says Rana. Instead, DOI waited till the lapse of the statutory period for appeal and after that promptly registered GoodStar as a trademark of the Morang Factory. Then Kiran Shoes managed to get an interim order issued by the Supreme Court about two years ago against the Department’s decision. The Supreme Court also ordered the Morang Factory to stop producing shoes with GoodStar as brand. The final verdict on the case from the apex court is still pending, but the other party is continuing to produce the shoes using the brand Gold Star, complains Rana.
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Amir Rana
MD Kiran Shoe Manufactures |
That is not all. There were cases of GoldStar shoes imported from Tibet as well. Rana shows documents in which such importers as well as other infringers of the GoldStar brand have confessed to their guilt and promised not to repeat it. All such documents are prepared with the Department of Industry officials as witnesses. “But these competitors have not kept their promise,” Rana complains.
Now the goods with the disputed design or trademark collected by the police during the latest raids are deposited with the Department of Industry and it is supposed to make the decision taking these confiscated goods as the evidence. But when the decision will be made is still anybody’s guess. Maybe, it will wait until the new law is enacted.
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