Government introduces another version of Enemy Property Amendment Bill in Lok Sabha

Source : IndLaw.com

The Government today introduced in the Lok Sabha yet another version of Enemy Property amendment Bill that provides all enemy properties will vest in the custodian till they are divested by the Centre, and such property could be divested only to the owner or his or her lawful heir.

If, however, the enemy property had been divested from the Custodian by a valid order made under section 18 before July 2, 2010 or where the property had been returned to the owner or his lawful heir, such enemy property would continue to remain with such persons. 

The amended version of the four-decade-old law proposes to allow Indian legal heirs to inherit the properties of their relatives who migrated to Pakistan after Partition. 

The Bill, entitled The Enemy Property (Amendment and Validation) Second Bill, 2010 was introduced by Home Minister P Chidambaram amidst pandemonium in the House created by the Opposition over its demand for a JPC probe into the alleged corruption in the allotment of 2G spectrum. 

The Bill also provides that nothing contained in the Act shall affect the claim made by any person before any court of law or other authority against the owner or his lawful heir to whom the property was or may be returned under this Act and such claim shall be decided in accordance with law by the court or any other authority. The Bill also says that transfer of any enemy property shall not include any transfer or any claim of transfer made through oral will or oral gift or if it has been done without the permission of the competent authority and no court shall have jurisdiction to order divestment from the custodian or direct the central government to divest enemy property. 

However, the court will have jurisdiction to adjudicate whether the property claimed to be vested in the custodian was an enemy property or not. 

Before introducing the new Bill today, the Government withdrew the old amendment Bill, which had faced strong BJP Opposition in the House in the last session of Parliament. 

The Bill seeks to replace the Enemy Property (Amendment and Validation) Ordinance, promulgated by the President on July 2. 

The government had enacted a law in 1968 by which it declared the properties left behind by those who migrated to Pakistan during partition as enemy properties. 

Introducing the Bill, Mr Chidambaram said that the 1968 Act was brought in to provide for continued vesting of enemy property vested in the Custodian of Enemy Property for India under the Defence of India Rules, 1962 and other connected matter. 

‘Of late, there have been a number of judgements by various courts that have adversely affected the powers of the Custodian and the Government of India as provided under the Enemy Property Act 1968. In view of such interpretation by the courts, the custodian has been finding it difficult to sustain his action under the Act,’ he said.

Foreign Direct Investment : A Comparison of the Consolidated Policies of 2010

Comparison of the Consolidated FDI Policies of 2010

Introduction

Every year the Department of Industrial Policy and Promotion (“DIPP”), Ministry of Industry and Commerce release the Foreign Direct Investment Policy (“FDI Policy”) outlining the broad policies/ regulations as contained in the Foreign Exchange Management Act (“FEMA”), Reserve Bank of India (“RBI”) regulations and the various Press Notes / Press Releases. However, since the beginning of this year, the DIPP has decided to issue a consolidated Policy circular every Six months. The Circular entails, into one document, all the prior policies/regulations on FDI and Press Notes/Press Releases/Clarifications issued by DIPP and reflects the current ‘policy framework’ on FDI.

The consolidated FDI policy Circular no.1 (“First Circular”) was released by the DIPP on 31st March, 2010 and came into effect from 1st April, 2010. The said circular consolidated all prior policies/ regulations, including the existing RBI Master Circular on FDI. On 29th September, 2010 the DIPP issued Consolidated Circular No. 2 (“Second Circular”), highlighting all the changes brought vide Press Notes, Press Releases, Clarifications, issued after the release of the First Circular. The Second Circular, which is effective from 1st October 2010, highlights the various amendments/ additions in the FDI Policy and sets out the clarifications issued by the DIPP with regard to the releases issued throughout the year.

From a comparison of the two circulars, the following additions/ amendments emerge, as under;

(i) Share Swaps:

The DIPP has introduced a new specific clause permitting the share swap transactions with prior FIPB approval. As per Clause 3.5.6 of the Circular, valuation of the shares needs to be undertaken by Category 1 Merchant Banker registered with Securities Exchange Board of India (“SEBI”) or a registered investment banker in the host country.

(ii) Internal Accruals:

The Second Circular has permitted the use of downstream investments through use of internal accruals, subject to such investments complying with respective sectoral caps / policy.

(iii) Partly Paid shares and Warrants:

Both the Policies define ‘Capital’ as equity shares; fully, compulsorily & mandatorily convertible preference shares; fully, compulsorily & mandatorily convertible debentures. By way of a clarification of the above definition the DIPP in the Second Circular stated that any other type of instruments like warrants, partly paid shares etc. are not considered as capital. The effect of the clarification is that such warrants or partly paid shares can be issued to persons resident outside India only after approval through the Government route.

(iv) Share Premium and Capitalisation Norms:

The Second Circular clarifies that, for sectors having minimum capitalisation norms (such as Non Banking Finance Companies ("NBFC") and construction development projects), share premium received along with face value of the shares upon issue of the shares to non-resident investors would be counted as part of minimum capitalisation requirement.

Comparison vis-à-vis Sectoral Changes

1. Agriculture:

As per the First Circular, 100% FDI under automatic route is allowed for undertaking certain agriculture activities and animal husbandry, subject to undertaking the same under 'controlled conditions'. However, the term 'controlled conditions', which was not defined in the First circular, has now been defined in respect of 'floriculture/ horticulture/ cultivation of vegetables and mushrooms'; 'development of seeds'; 'animal husbandry'; and 'pisciculture & aquaculture'.

The term “under controlled conditions” covers the following: ‘Cultivation under controlled conditions’ for the categories of Floriculture, Horticulture, Cultivation of vegetables and Mushrooms is the practice of cultivation where in rainfall, temperature, solar radiation, air humidity and culture medium are controlled artificially. Control in these parameters may be effected through protected cultivation under green houses, net houses, poly houses or any other improved infrastructure facilities where micro climatic conditions are regulated anthropogenically. The term “under controlled conditions” covers the following:

Development of seeds will be considered to be ‘under controlled conditions’ when seed farms/laboratories use tissue culture or any other micro-propagation techniques for development and multiplication of seeds/planting material. Seed development in the case of anthuriums, orchids and other ornamental crops in greenhouses/net houses/poly houses is also be included in this category. In case of Animal Husbandry, scope of the term ‘under controlled conditions’ includes;

Rearing of animals under intensive farming systems with stall-feeding. Intensive farming system will require climate systems (ventilation, temperature /humidity management), health care and nutrition, herd registering/pedigree recording, use of machinery, waste management systems. · Poultry breeding farms and hatcheries where micro climate is controlled through advanced technologies like incubators, ventilation systems etc. In the case of Pisciculture and Aquaculture, ‘under controlled conditions’ includes – · Aquariums · Hatcheries where eggs are artificially fertilized and fry are hatched and incubated in an enclosed environment with artificial climate control.

2. Manufacturing of cigars, cheroots, cigarillos, and cigarettes of, tobacco or of tobacco substitutes:

The Government has included the manufacturing of cigars, cheroots, cigarillos, and cigarettes of, tobacco or of tobacco substitutes in the list of sectors prohibited for FDI.

3. Wholesale Trading:

The DIPP has withdrawn the condition under the First Circular, specifying that wholesale trading to the group companies should be there for their internal use only. With the revised policy, companies procuring goods from the group wholesale venture can undertake onward sale subject to the condition that the total wholesale trade to the group companies taken together should not exceed 25% of the turnover of the wholesale venture.

4. Construction Development Projects:

The Second Policy clarifies the term "Original investment" to mean the entire amount brought in as FDI. The Policy further states that the lock-in period of three years will be applied from the date of receipt of each installment / tranche of FDI or from the date of completion of minimum capitalisation, whichever is later.

5. Non Banking Financial Corporations (“NBFC”):

The Second Circular has clarified that 100% foreign owned NBFCs, with minimum capitalisation of $50 million, can set up subsidiaries for specific NBFC activities, without having to meet minimum capitalisation norms for such downstream subsidiaries.

6. Mining:

FDI for separation of Titanium bearing minerals and ores was allowed subject to value addition facilities being set up within India along with transfer of technology. The concept of what will constitute value addition has been expressly stated. The Government has further clarified that the objective of prescribing conditions for establishing Value Addition facilities and Transfer of Technology is to ensure that the raw material available in the country is utilized for setting up downstream industries and technology available worldwide is used to set up such industries within the country.

7. Telecom:

General conditions, such as manner of computing FDI, adherence to License agreement, source of FDI etc, have also now been made applicable to companies operating telecom services with the FDI cap of 49%. This is in addition to the security conditions which are already applicable to companies operating telecom services with the FDI cap of 49%.

Conclusion

The Second Circular, while clarifying several aspects on which earlier there was ambiguity, also recognises the introduction of various Discussion Papers issued by DIPP (Defence, multi brand retail, existing venture/tie-ups, issue of shares for consideration other than cash and FDI in Limited Liability partnership ("LLP")). It is expected that appropriate amendments to the FDI policy would be made as and when the policy framework in respect of these matters is finalised. The Circular is clearly a step forward in increasing the transparency in the FDI policy framework. The Government's initiative of using a consultative process with various stakeholders will help in further addressing other ambiguities and in evolving the policy.

Sukrit Seth is a 4th Year Student of Amity Law School, New Delhi. He is currently interning with Amarchand Mangaldas & Suresh A. Shroff in the Corporate Department.

Tenant by 'Holding Over' and 'Sufferance' : The Law explained

This snippet deals with the Law relating to concept of Tenant by 'Holding Over' and 'Sufferance' as provided under the Transfer of Property Act. In Inmacs Ltd. v. Prema Sinha & Ors., the Delhi High Court has culled out the entire law pertaining to tenancy vis-a-vis the provisions of the Transfer of Property Act;

12. Section 105 of the Transfer of Property Act, 1882 defines a lease of an immovable property as a transfer of a right to enjoy immovable property for a certain time, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee who accepts the transfer on such terms. The transferor is called the lessor and the transferee is called the lessee. The price is called the premium and the money, share, service or other thing to be so rendered is called the rent. 

13. Section 106 of the Transfer of Property Act 1882 deals with the duration of leases and states that in the absence of a contract, or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable on the part of either lessor or lessee, by six month's notice and a lease of immovable property for any other purpose shall be deemed to be lease from month to month, terminable, on the part of either lessor or lessee by 15 days' notice. Section 107 of the Transfer of Property Act, 1882 stipulates that a lease of immovable property from year to year, or for any term exceeding 1 year can be made only by and under a registered instrument. Law is clear. If a lease is evidence by a contract, as in the instant case, the duration of the lease would be as per the contract and at the expiry of the lease period as per contract the lease expires by efflux of time. Expiry of lease by efflux of time results in the determination of the relationship between the lessor and the lessee and since the lease expires under the contract by efflux of time, no notice of determination of the lease is required. 

14. Once a lease expires, the mandate of clause q of Section 108 of the Transfer of Property Act 1882 makes it the bounden duty of the lessee to put the lessor into possession of the leased premises. 

15. To the extent aforenoted there is no problem in law, but as in the present case, more often than not, rent is tendered post expiry of the lease period by efflux of time and accepted by the landlord. What happens”16. Section 116 of the Transfer of Property Act 1882 reads as under:- “116. Effect of holding over-If a lessee or under-lessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or under-lessee, or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased, as specified in section 106.” 

17. On the strength of having paid the last agreed rent the tenant is naturally expected to claim that his status is that of a tenant holding over and till tenancy is determined by a notice under Section 106 of the Transfer of Property Act 1882 the status continues. 

18. As noted above, mandate of clause q of Section 108 of the Transfer of Property Act 1882 is that on the expiry of the lease the lessee is bound to hand over possession of the leased premises to the lessor and therefore the lessor would be entitled to maintain an action to compel the lessees to abide by the mandate of clause q of Section 108 of the Transfer of Property Act 1882. 

19. A person who enters upon the property of another without authority of law is a trespasser. It could be argued that the very next moment after the period of lease stands expired the act of entering upon property by the tenant is an act of trespass. But law says no. A lessee who continues in possession after expiry of the lease, without the consent of the lessor or without any agreement between the parties or in disagreement with the lessor, is treated in law as a tenant by sufferance. But where the lessor consents to the continued possession of lessee on the same terms and conditions as per the original lease a tenancy by holding over comes into operation. 

20. The words “accepts rent or otherwise assents to his continuing in possession” in Section 116 of the Transfer of Property Act contemplates that from the side of the lessee there should be an offer to take a new lease and on the side of the lessor there must be a definite consent to the continuation of possession. In other words there must be a bilateral contract. 

21. Such a bilateral contract could be express or implied. Thus mere continuance of possession after the expiry or determination of the lease is not enough to entitle the tenant to establish tenancy by holding over. 

22. More often than not, the only evidence which surfaces is the tender of rent and its acceptance by the landlord. As observed in the decision reported as AIR 1951 SC 285, Eastern Investment Ltd. Vs. Commissioner of Income Tax the acceptance of rent is only one form of the assent of the lessor to the lessee remaining in possession of the property. But, as observed in the decision reported as AIR 1949 FC 124, Kai Khushroo Bezonjee Capadia Vs. Bai Jerbai Hirjibhoy Warden and Anr., the acceptance must be of rent as such. 

23. Since law requires a bilateral agreement between the parties for the tenant continuing to holding over, offer and acceptance of rent is at best an evidence raising a presumption of assent but would not amount to a conclusive proof of such assent. It could be rebutted by other evidence. 

24. In order that the acceptance of rent may amount to assent of the lessor it has to be shown that the offer of rent was made on the express ground that the lessee intended to continue the lease and that the acceptance was with the full knowledge of the nature of the offer. This is a question of fact which has to be determined from the circumstances of each case. Greater is the period of continued possession coupled with receipt of rent, stronger would be the presumption in favour of the lessee. 

25. Where a tenant fails to establish a case of holding over, his status would be, as noted above, that of a tenant at sufferance. The difference in the status of a tenant holding over and a tenant at sufferance was explained by the Supreme Court in the decision reported as AIR 1996 SC 140, R.V. Bhupal Prasad Vs. State of A.P. wherein their Lordships said:- “8. Tenant at sufferance is one who comes into possession of land by lawful title, but who holds it by wrong after the termination of the term or expiry of the lease by efflux of time. The tenant at sufferance is, therefore, one who wrongfully continues in possession after the extinction of a lawful title. There is little difference between him and a trespasser. In Mulla”s Transfer of Property Act (7th Edn.) at page 633, the position of tenancy at sufferance has been stated thus: A tenancy at sufferance is merely a fiction to avoid continuance in possession operating as a trespass. It has been described as the least and lowest interest which can subsist in reality. It, therefore, cannot be created by contract and arises only by implication of law when a person who has been in possession under a lawful title continues in possession after that title has been determined, without the consent of the person entitled. A tenancy at sufferance does not create the relationship of landlord and tenant. At page 769, it is stated regarding the right of a tenant holding over thus: The act of holding over after the expiration of the term does not necessarily create a tenancy of any kind. If the lessee remaining in possession after the determination of the term, the common law rule is that he is a tenant on sufferance. The expression “holding over” is used in the sense of retaining possession. A distinction should be drawn between a tenant continuing in possession after the determination of the lease, without the consent of the landlord and a tenant doing so with the land-lord”s consent. The former is called a tenant by sufferance in the language of English law and the latter class of tenants is called a tenant holding over or a tenant at will. The lessee holding over with the consent of the lessor is in a better position than a mere tenant at will. The tenancy on sufferance is converted into a tenancy at will by the assent of the landlord, but the relationship of the landlord and tenant is not established until the rent was paid and accepted. The assent of the landlord to the continuance of the tenancy after the determination of the tenancy would create a new tenancy. The possession of a tenant who has ceased to be a tenant is protected by law. Although he may not have a right to continue in possession after the termination of the tenancy, his possession is juridical. 13. In view of the settled possession of law, the possession of the appellant is as tenant at sufferance and is liable to ejectment in due course of law. But his possession is not legal nor lawful. In other words, his possession of the theatre is unlawful or litiguous possession. The appellant may remain in possession until he is ejected in due course in execution of the decree in the suit filed by the respondent. His possession cannot be considered to be settled possession. He is akin to a trespasser, though initially he had lawful entry.” 

26. Dealing with the issue whether accepting rent after serving upon the tenant a notice to quote amounts to a waiver under Section 113 of the Transfer of Property Act, in the decision reported as 2006 (4) SCC 205, Sarup Singh Gupta Vs. S. Jagdish, their Lordships of Supreme Court held:- “6 “ A mere perusal of Section 113 leaves no room for doubt that in a given case, a notice given under Section 111, Clause (h), may be treated as having been waived, but the necessary condition is that there must be some act on the part of the person giving the notice evincing an intention to treat the lease as subsisting. Of course, the express or implied consent of the person to whom such notice is given must also be established. The question as to whether the person giving the notice has by his act shown an intention to treat the lease as subsisting is essentially a question of fact. In reaching a conclusion on this aspect of the matter, the Court must consider all relevant facts and circumstances, and the mere fact that rent has been tendered and accepted, cannot be determinative. 7 A somewhat similar situation arose in the case reported in Shanti Prasad Devi vs Shankar Mahto 2005 (5) SCC 543. That was a case where the landlord accepted rent even on expiry of the period of lease. A submission was urged on behalf of the tenant in that case that Section 116, Transfer of Property Act was attracted and there was a deemed renewal, of the lease. Negativing the contention, this Court observed that mere acceptance of rent for the subsequent months in which the lessee continued to occupy the premise even, after the expiry of the period of the lease, cannot be said to be a conduct signifying his assent to the continuing of the lease even after the expiry of the lease period. Their Lordships noticed the conditions incorporated in the agreement itself, which provided for renewal of the lease and held that those conditions having not been fulfilled, the mere acceptance of rent after expiry of period of lease did not signify assent to the continuance of the lease. 8 In the instant case, as we have noticed earlier, two notices to quit were given on 10th February, 1979 and 17th March, 1979. The suit was filed on 2-6-1979. The tenant offered and the landlord accepted the rent for the months of April, May and thereafter. The question is whether this by itself constitute an act on the part of the landlord showing an intention to treat the lease as subsisting. In our view, mere acceptance of rent did not by itself constituted an act of the nature envisaged by Section 113, Transfer of Property Act showing an intention to treat the lease as subsisting. The fact remains that even after accepting the rent tendered, the landlord did file a suit for eviction, and even while prosecuting the suit accepted rent which was being paid to him by the tenant. It cannot, therefore, be said that by accepting rent, he intended to waive the notice to quit and to treat the lease as subsisting. We cannot ignore the fact that in any event, even if rent was neither tendered nor accepted, the landlord in the event of success would be entitled to the payment of the arrears of rent. To avoid any controversy, in the event of termination of lease the practice followed by courts is to permit the landlord to receive each month by way of compensation for the use and occupation of the premises, an amount equal to the monthly rent payable by the tenant. It cannot, therefore, be said that mere acceptance of rent amounts to waiver of notice to quit unless there be any other evidence to prove or establish that the landlord so intended. In the instant case, we find no other fact or circumstance to support the plea of waiver. On the contrary the filing of and prosecution of the eviction proceeding by the landlord suggests otherwise.” 27. In the report published as 2006 (1) SCC 228, C. Albert Morris vs K. Chandrasekaran it was observed as under:- “26 “ Much argument was advanced on the receipt of the rent by the landlord after the cancellation of the lease. The consensus of judicial opinion in this country is that a mere continuance in occupation of the demised premises after the expiry of the lease, notwithstanding the receipt of an amount by the quondam landlord would not create a tenancy so as to confer on the erstwhile tenant the status of tenant or a right to be in possession. “ 32 “ We are, therefore, of the opinion that mere acceptance of rent by the landlord, the first respondent herein, from the tenant in possession after the lease has been determined either by efflux of time or by notice to quit would not create a tenancy so as to confer on the erstwhile tenant the status of a tenant or a right to be in possession. We answer this issue accordingly.” 

28. Similar view has been expressed in the decisions reported as 2005 (5) SCC 543 Shanti Prasad Devi Vs. Shankar Mahto, 129 (2006) DLT 338 Central Bank of India Vs. Lalit Kumar Bhargava, 118 (2005) DLT 52 Yashbir Sharma Vs. Mrs. Sulakshna Lal, 104 (2003) DLT 158 Delhi Jal Board Vs. Surendra P.Malik, 2002 (5) AD (Delhi) 7 FCI Vs. Kuljinder Pal Singh Dhillon and 99 (2002) DLT 139”Sh.Prithvi Raj Bhalla Vs. Industrial Cables (India) Ltd. 

29. It would be interesting to note that in the decision reported as (1973) 2 SCC 388, Bari Lal vs. Municipal Corporation of Indore the tenant continued in possession for nearly 5 years after expiry of the lease and yet was held to be not holding over. Status held was of a tenant by sufferance. Meaning thereby that mere time duration of occupation post tenancy coming to an end by efflux of time is not a very determinative factor.

Trademarks and Domain Names : The Law

The Delhi High Court in Times Internet Ltd. v. M/s Belize Domain WHOIS Service Ltd. & Ors. discussed the law relating to Trademarks and Domain Names. Justice V.K. Jain, while following a line of judgments on the issue held as under;

10. In CS(OS) No.1108/2006, decided on 29th October, 2010, this Court, inter alia, held as under: "18. A person is well within his right to sell his goods or render services using any trade name for the purpose. With the passage of time the goods sold or the services rendered by him, as the case may be, may acquire certain reputation or goodwill in the market which becomes the property of that person and needs to be protected by the court. It is not permissible for any other person to start selling goods or rendering services either using the same name or imitating that name so as to cause injury to that person and enrich himself at the cost of the person who had already been using that name and had acquired a certain reputation with the passage of time and on account of the quality of the goods sold or services rendered by him. Any attempt on the part of a person to enrich upon the goodwill generated by any other person needs to be curbed by the court whenever approached by the aggrieved party in this regard.

19. Even if the person using or imitating the trade mark or goodwill of another person is yet to commence his business activities his dishonest intention to make use of the mark and name of the other party will be obvious from the very use or imitation of the mark and goodwill of the other person and, therefore, it should not be a defence to say that there has so far been no use of the offending corporate name or mark."

Though the aforesaid observations were made in respect of a registered trade mark, they would equally apply in a case of passing off.

11. In Cadila Health Care Ltd. vs. Cadila Pharmaceuticals Ltd. (2001) 5 SCC 573, the Supreme Court, inter alia, observed that its decisions in the last four decades had clearly laid down that what had to be seen in the case of a passing off action was the similarity between the competing marks and to determine whether there was likelihood of deception or causing confusion.

12. In Satyam Infoway Ltd. vs. Sifynet Solutions Pvt. Ltd. 2004 (28) PTC 566 (SC), the appellant registered several domain names like www.sifynet, www.sifymall.com, www.sifyrealestate.com etc. 'Sify was a coined word of the appellant which claimed a vital reputation and goodwill in that name. The respondent, at a later dated, started carrying on business of internet marketing under the domain names www.siffynet.net and www.siffynet.com and also obtained registration of these two domain names with Internet Corporation for Assigned Names and Numbers (ICANN). Coming to know of it, the appellant filed a Civil Suit against the responding claiming that the respondent was passing off its business and services by using the appellants business name and domain name. The City Civil Court Judge allowed the application of the appellant for grant of injunction, noticing that the appellant was the prior user of the trade name Sify which had earned good reputation in connection with Internet and computer services and that the respondent domain names were similar to the domain name of the appellant and confusion will be caused in the mind of general public by such deceptive similarity. The High Court, however, set aside the order passed by the City Civil Court. Allowing the appeal, the Supreme Court, inter alia, observed as under:- 

"11. The original role of a domain name was no doubt to provide an address for computers on the internet. But the internet has developed from a mere means of communication to a mode of carrying on commercial activity. With the increase of commercial activity on the internet, a domain name is also used as a business identifier. Therefore, the domain name not only serves as an address for internet communication but also identifies the specific internet site. In the commercial field, each domain name owner provides information/services which are associated with such domain name. Thus a domain name may pertain to provision of services within the meaning of Section 2(z). A domain name is easy to remember and use, and is chosen as an instrument of commercial enterprise not only because it facilitates the ability of consumers to navigate the Internet to find websites they are looking for, but also at the same time, serves to identify and distinguish the business itself, or its goods or services, and to specify its corresponding online Internet location. Consequently a domain name as an address must, of necessity, be peculiar and unique and where a domain name is used in connection with a business, the value of maintaining an exclusive identity becomes critical. "As more and more commercial enterprises trade or advertise their presence on the web, domain names have become more and more valuable and the potential for dispute is high.

15. The use of the same or similar domain name may lead to a diversion of users which could result from such users mistakenly accessing one domain name instead of another. This may occur in e-commerce with its rapid progress and instant (and theoretically limitless) accessibility to users and potential customers and particularly so in areas of specific overlap. Ordinary consumers/users seeking to locate the functions available under one domain name may be confused if they accidentally arrived at a different but similar website which offers no such services. Such users could well conclude that the first domain name owner had mis-represented its goods or services through its promotional activities and the first domain owner would thereby lose their custom. It is apparent therefore that a domain name may have all the characteristics of a trademark and could found an action for passing off.

23. As far as India is concerned, there is no legislation which explicitly refers to dispute resolution in connection with domain names. But although the operation of the Trade Marks Act, 1999 itself is not extra territorial and may not allow for adequate protection of domain names, this does not mean that domain names are not to be legally protected to the extent possible under the laws relating to passing off."