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Insights Daily Current Events, 07 February 2015

Insights Daily Current Events, 07 February 2015

Move to Finalize Motor Vehicles Agreement

Officials from India, Bangladesh, Bhutan and Nepal met recently to finalize a Motor Vehicles Agreement (MVA). The agreement is expected to be signed at a meeting of Transport Ministers of the four countries to be held soon this year.
The countries have agreed to set up individual national committees and a sub-regional joint committee for overall facilitation of land transport and to coordinate and monitor the agreement’s implementation.

Motor Vehicles Agreement:

The proposed SAARC Motor Vehicle Agreement has wider scope for movement of all types of vehicles across SAARC member States and will be a path breaking endeavour.

What are the benefits?

  • The agreement will allow passenger, personal and cargo vehicles to travel along designated key routes in the four SAARC countries without the need for trans-shipment of goods and passengers at the border crossings.
  • The agreement will reduce costly and time-consuming unloading and loading of people and goods at the border crossing points making cross-border trade more efficient.
  • It would help transform transport corridors linking the four countries into economic corridors and enhance people to people contact.
  • This agreement would facilitate the transit of all types of vehicles between the contracting parties as is prevalent in other common markets like the European Union.
  • It would promote tourism and people-to-people interaction.

The following three routes have been identified for the bus service in the first instance:

  1. Kathmandu – Bhairahawa – Sunauli – Gorakhpur – Lucknow – New Delhi.
  2. Kathmandu – Bhairahawa – Sunauli – Azamgarh – Varanasi – New Delhi.
  3. Pokhara – Bharahawa – Sunauli – Gorakhpur – Lucknow – New Delhi.

Private and non-regular passenger vehicles would be entitled to use all established entry and exit points in the agreed upon framework envisaged under the Draft Agreement.

Sources: The Hindu, PIB.


Collegium system to continue until NJAC is in place

The union law minister recently said that the old collegium system for appointing judges to the Supreme Court and High Courts would continue until the National Judicial Commission is put in place.

  • The issue has come to the fore due to some media reports which claimed that there was a tug-of-war between the government and the highest judiciary.
  • There are also petitions pending in the Supreme Court challenging the validity of the NJAC Act, 2014.
  • The NJAC restores the political class’s role in the appointment of judges to the Supreme Court and the High Courts.
  • Both the Constitution Amendment Bill and the NJAC Bill were passed by Parliament in August 2014 and have also received President’s assent after ratification by 16 State legislatures.


NJAC is a proposed body responsible for the appointment and transfer of judges to the higher judiciary in India. It seeks to replace the collegium system of appointing the judges of Supreme Court and 24 High Courts with judicial appointments commission wherein the executive will have a say in appointing the judges.


  • A new article, Article 124A, (which provides for the composition of the NJAC) will be inserted into the Constitution.
  • It provides for the procedure to be followed by the NJAC for recommending persons for appointment as Chief Justice of India and other Judges of the Supreme Court (SC), and Chief Justice and other Judges of High Courts (HC).
  • It also seeks changes in articles 124,217,222 and 231.

The commission will consist of the following members:

  • Chief Justice of India (Chairperson, ex officio)
  • Two other senior judges of the Supreme Court next to the Chief Justice of India – ex officio
  • The Union Minister of Law and Justice, ex-officio
  • Two eminent persons (to be nominated by a committee consisting of the Chief Justice of India, Prime Minister of India and the Leader of opposition in the Lok Sabha or where there is no such Leader of Opposition, then, the Leader of single largest Opposition Party in Lok Sabha), provided that of the two eminent persons, one person would be from the Scheduled Castes or Scheduled Tribes or OBC or minority communities or a woman. The eminent persons shall be nominated for a period of three years and shall not be eligible for re-nomination.

Functions of the Commission:

  • Recommending persons for appointment as Chief Justice of India, Judges of the Supreme Court, Chief Justices of High Courts and other Judges of High Courts.
  • Recommending transfer of Chief Justices and other Judges of High Courts from one High Court to any other High Court.
  • Ensuring that the persons recommended are of ability and integrity.
  • Under the present Collegium system, the Chief Justice of India would consult the four senior most judges of the Supreme Court for Supreme Court appointments and two senior-most judges for high court appointments.


How the NJAC will help:

  • The NJAC, once it came into existence, is expected to usher in transparency in judicial appointments in the highest courts and end the highest judiciary’s two-decade-old grip over appointments of judges through the collegium system.
  • It would restore an equal role for the executive in higher judicial appointments.


  • Some people contend that that by passing the NJAC Bill, Parliament had “altered the basic structure of the Constitution” and encroached into judicial independence. They say Independence of the judiciary includes the necessity to eliminate political influence even at the stage of appointment of a judge. This is being violated.
  • The amendment, as passed by the two houses of Parliament, “takes away the primacy of the collective opinion of the Chief Justice of India and the two senior most Judges of the Supreme Court of India”.
  • Although the six-member Commission had the CJI as chairperson and two senior most Supreme Court judges as members, there was no “primacy” for them. Even their collective recommendation of a candidate as judge could be frozen if any two non-judicial members on the panel vetoed it.

Under the present Collegium system, the Chief Justice of India would consult the four senior most judges of the Supreme Court for Supreme Court appointments and two senior-most judges for high court appointments.

Sources: The Hindu, Wiki, BS, ET, PIB.


ED notice to Sahara on FEMA violation

The Enforcement Directorate has served a show-cause notice to the Sahara group and its chief, seeking explanations for an alleged violation of foreign exchange rules involving an overseas direct investment of about Rs.3,662 crore in 2010.

  • The direct investment outside India is allowed either through the Automatic Route, where the investor does not require prior approval from the Reserve Bank of India but has to adhere to certain conditions; or the Approval Route, which requires permission from the RBI.

Enforcement Directorate:

Enforcement Directorate, established in the year 1956, is a law enforcement agency and economic intelligence agency responsible for enforcing economic laws and fighting economic crime in India.

  • It is a specialized financial investigation agency under the Department of Revenue, Ministry of Finance, Government of India, which enforces Foreign Exchange Management Act,1999 (FEMA) and Prevention of Money Laundering Act, 2002 (PMLA) laws.

Other functions of the directorate include:

  • To collect, develop and disseminate intelligence relating to violations of FEMA, 1999, the intelligence inputs are received from various sources such as Central and State Intelligence agencies, complaints etc.
  • To investigate suspected violations of the provisions of the FEMA, 1999 relating to activities such as “hawala” foreign exchange racketeering, non-realization of export proceeds, non-repatriation of foreign exchange and other forms of violations under FEMA, 1999.
  • To adjudicate cases of violations of the erstwhile FERA, 1973 and FEMA, 1999.
  • To realize penalties imposed on conclusion of adjudication proceedings.
  • To handle adjudication, appeals and prosecution cases under the erstwhile FERA, 1973
  • To process and recommend cases for preventive detention under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act (COFEPOSA)
  • To undertake survey, search, seizure, arrest, prosecution action etc. against offender of PMLA offence.
  • To provide and seek mutual legal assistance to/from contracting states in respect of attachment/confiscation of proceeds of crime as well as in respect of transfer of accused persons under PMLA.

Foreign Exchange Management Act:


The Foreign Exchange Management Act, 1999 (FEMA) is an Act of the Parliament of India “to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India”.

  • It replaces the Foreign Exchange Regulation Act (FERA).
  • This act seeks to make offenses related to foreign exchange civil offenses. It extends to the whole of India.
  • It enabled a new foreign exchange management regime consistent with the emerging framework of the World Trade Organisation (WTO).
  • It also paved way to Prevention of Money Laundering Act 2002, which was effected from 1 July 2005.

Features of the Act:

  • Activities such as payments made to any person outside India or receipts from them, along with the deals in foreign exchange and foreign security is restricted. It is FEMA that gives the central government the power to impose the restrictions.
  • Restrictions are imposed on residents of India who carry out transactions in foreign exchange, foreign security or who own or hold immovable property abroad.
  • Without general or specific permission of the MA restricts the transactions involving foreign exchange or foreign security and payments from outside the country to India – the transactions should be made only through an authorised person.
  • Deals in foreign exchange under the current account by an authorised person can be restricted by the Central Government, based on public interest generally.
  • Although selling or drawing of foreign exchange is done through an authorised person, the RBI is empowered by this Act to subject the capital account transactions to a number of restrictions.
  • Residents of India will be permitted to carry out transactions in foreign exchange, foreign security or to own or hold immovable property abroad if the currency, security or property was owned or acquired when he/she was living outside India, or when it was inherited by him/her from someone living outside India.
  • Exporters are needed to furnish their export details to RBI. To ensure that the transactions are carried out properly, RBI may ask the exporters to comply to its necessary requirements.

Sources: The Hindu, PIB, ED.



Bhalchandra Nemade wins Jnanpith

Bhalchandra Nemade has been selected for the 50th Jnanpith Award for 2014.

  • Nemade is the fourth Marathi writer to win the honour.

About the Award:

  • The Jnanpith Award is one of the two most prestigious literary honours in the country. The award was instituted in 1961.

Eligibility: Any Indian citizen who writes in any of the official languages of India is eligible for the honour.

  • Prior to 1982, the awards were given for a single work by a writer; since then, the award has been given for a lifetime contribution to Indian literature.
  • Seven women writers have won the award so far.

Sources: The Hindu.