Thursday, July 13, 2017

Corporate governance of banks

The corporate governance of banks is different and unique from that of the other organizations. This is because the activities of the bank are less transparent than other organizations. Thus, it becomes difficult for shareholders and creditors to monitor the activities of the bank. The situation becomes even more difficult when a major part of the share capital is with government. Additionally, banks also differ from most other companies in terms of the complexity and range of their business risks, and the consequences if these risks are poorly managed.
The Banking Sector in India has definitely not remained unaffected to the developments taking place worldwide. Enhancing the level of corporate governance structure of Indian banks is imperative. The regulatory bodies in India are the Reserve Bank of India and the Securities Exchange Board India. The RBI prescribes prudential principles and norms. The RBI performs the corporate governance function under the Board for Financial Supervision (BFS).
The Basel Accord was first established in 1988 by the Basel Committee on Banking Supervision under the Bank for International Settlements. The BIS was established on 17 May 1930 and is the world's oldest international financial organization. The Basel Committee was established by the central-bank Governors of the Group of Ten countries in 1974. It meets regularly four times a year. It has four main working groups. The Basel Committee on Banking Supervision provides a forum for regular cooperation on banking supervisory matters. Its objective is to enhance understanding of key supervisory issues and improve the quality of banking supervision worldwide.
The Basel Accord was established to provide a set of minimum capital requirements to banks. According to this accord, the banks would be required to maintain a minimum capital requirement a propos the loans given out by them. The 1988 Basel Accord also known as Basel I primarily focused on credit risk. The Central Banks of several countries that have agreed to become signatories have been given the responsibility of enforcing the provisions. In India, the Reserve Bank of India shoulders this responsibility.
The second of the Basel Accords, Basel II was first published in June 2004 and established in 2005. This accord widened the scope of Basel I by establishing capital requirements for market risk and operational risk, in addition to credit risk. Basel II also included provisions which allowed banks to use advanced statistical methods to compute possible losses for which they were required to hold capital. Therefore, international banks had an advantage as they could lower their capital requirements through the use of advanced models.
The third of the Basel Accords, Basel III was created in response to the flaws in financial regulation which led to the crisis and also due to appeals for the reform of capital adequacy and liquidity standards for banks.
According to the Basel Committee Report of 1999, Banks have to maintain a certain level of transparency and disclosures in their statements. The annual report should disclose a number of factors relating to the operations of the banks such as accounting ratios, business per employee, related party disclosures and information.

Recent Steps Taken by Banks in India for CG
•                   Induction of non-executive members on the boards
•                   Constitution of various Committees like Management committee, Investor’s Grievances committee, ALM committee, etc.
•                   Role of Independent auditor
•                   Gradual implementation of prudential norms as prescribed by the RBI,
•                   Introduction of Citizens Charter in banks
•                   Implementation of “Know Your Customer” concept
•                   The Board of Directors and top management of the Bank are chiefly responsible for good CG.

Frauds by others
•                   Forgery and altered cheques -This type of fraud involves altering the amount on the face of a cheque for nefarious purposes
•                   Stolen cheques -This type of fraud is initiated by the theft of a few cheques. Then accounts are opened using fake identities, and the suitably altered stolen cheques are deposited, followed by convenient withdrawal of the amount. In a similar way, stolen blank cheque books are misused by fraudsters.
•                   Accounting fraud -Overstating sales and income, dishonest accounting and inflating the worth of the company’s assets to hide that the company is actually functioning in loss constitute Accounting Fraud. E.g., Satyam.
•                   Credit card fraud - Credit cards lend themselves to several opportunities for fraud. Made of three PVC sheets, of which the central sheet is known as the core stock, credit cards carry substantial data. Credit card frauds can be carried out in several ways.
•                   Frauds committed by auditors
•                   Power of Attorney fraud- A “Power of Attorney” (“POA”) is a legal document through which the donor grants the power to his attorney to ‘step into the donor’s shoes’ and conduct legal and financial matters on the donor’s behalf.
•                   Phishing- In this type of fraud, sensitive data such as account numbers, login Independent Directors (IDs), passwords, and other verifiable information are extracted from gullible individuals either through fraudulent telephone calls or emails. These data are then misused for dishonest purposes, including identity theft. Phishing is most often perpetrated through mass emails and spoofed websites.

We, "PNJ Legal Consultants" are one of the well known organizations engaged in providing Consultancy Services keeping in mind the Client Service requirements.
Our team members deliver excellent performance in providing these services and our clients can avail the services at affordable prices.
Our sophisticated team has complete knowledge of various exercises and technicalities that are used in our services. Our services includes Strategy Consulting, GST Consulting, Asset Management, Feasibility Study, International Arbitration, Due Dilligence, Franchisee Consulting, Financial Audits, Operational Audits, Tax Heaven Registrations, Shareholder Agreements, Start up Consulting, IP Consulting, Taxation Services, Accounting system design and Mergers Acquisitions.
Contact at parascs@gmail.com or refer website www.pnjlegal.com


FINANCIAL INFORMATION TRANSPARENCY

FINANCIAL INFORMATION AND TRANSPARENCY RELATED DISCLOSURE FOR GOOD CORPORATE GOVERNANCE
1)        Financial Calendar
2)        Listing of Shares in Stock Exchange
3)        Details of Shareholders/ Shares
4)        International Listing
5)        Stock Market Data (Share Price Volatility)
6)        Share Transfer Process
7)        Dividend Payment
8)        Special Resolution by Postal Ballot
1)     Financial Calendar:
In all the companies disclosure of financial calendar include following data:
•Financial Calendar •Date, Time and Venue of Last Annual General Meeting •Book Closure Date •Dividend Payment Date •Date of Posting of Annual Report •Last Date of Receipt of Proxy forms •Approval Date of Quarterly Results •Stock Code •Special Resolution of Postal Ballot •Reporting on Conciliation of Account GAAP •Board Meeting Date •Probable Date of Dispatch of Warrants for Dividend
2)     Listing of Shares in Stock Exchange:
Listing means admission of securities to dealings on a recognized stock exchange. The securities may be of any public limited company, Central or State Government, quasi-governmental and other financial institutions/corporations, municipalities, etc.
The objectives of listing are mainly to:
•          Provide liquidity to securities;
•          Mobilize savings for economic development;
•          Protect interest of investors by ensuring full disclosures.
3)     Details of Shareholders/ Shares:
Following details of shareholders/shares are disclosed in sampled companies include:
•                   Name of Investors/Shareholders
•                   Number of shares and number of Shareholders
•                   Percentage of total shares and total Shareholders
•                   Percentage of Share Capital
•                   Amount of Shareholding
•                   Shareholding of Nominal Value
•                   Number of Shares held in demat form
4)     International Listing:
GDR (Global Depositary Receipt):
A global depositary receipt (GDR) is a bank certificate issued in more than one country for shares in a foreign company. The shares are held by a foreign branch of an international bank. The shares trade as domestic shares, but are offered for sale globally through the various bank branches.
A financial instrument used by private markets to raise capital denominated in either U.S. dollars or Euros.
ADR (American Depositary Receipt):
An American depositary receipt (ADR) is a negotiable certificate issued by a U.S. bank representing a specified number of shares (or one share) in a foreign stock that is traded on a U.S. exchange. ADRs are denominated in U.S. dollars, with the underlying security held by a U.S. financial institution overseas. ADRs help to reduce administration and duty costs that would otherwise be levied on each transaction. This is an excellent way to buy shares in a foreign company while realizing any dividends and capital gains in U.S. dollars. However, ADRs do not eliminate the currency and economic risks for the underlying shares in another country. For example, dividend payments in Euros would be converted to U.S. dollars, net of conversion expenses and foreign taxes and in accordance with the deposit agreement. ADRs are listed on the NYSE, AMEX or Nasdaq as well as OTC.
5)     Stock Market Data (Share Price Volatility):
Volatility is a statistical measure of the dispersion of returns for a given security or market index. Volatility can either be measured by using the standard deviation or variance between returns from that same security or market index. Commonly, the higher the volatility, the riskier the security. Stock price volatility is an indicator that is most often used by options traders to find changes in trends in the market place. There are two main types of stock volatility including Historical Volatility and Implied Volatility that are used in the options markets. The increase or decrease in volatility results from changes in investors emotions in the market place. More specifically greed and fear in the market place are the two main factors that cause stock prices to change. Stock price volatility tends to rise when there is new information released in the markets however the extent to which it rises is determined by the relevance of that new information as well as to the degree in which the news surprises investors.
6)     Share Transfer Process:
The shares of a company are movable property and are generally freely transferable. Though there might be certain restrictions on transfer of shares of private companies provided in the articles of the company, such restrictions are generally added to protect the rights of one set of investors or the shareholders. However, shares of a public company are always freely transferable. Here, researcher has taken 3 aspects of share transfer process which are normally disclosed in sampled companies.
•          Shares in physical form
•          Share transfer is allotted agent
•          Time period for share transfer process
Power of refusal to register transfer of shares is to be exercised by the company within thirty (30) days from the date on which the instrument of transfer or the intimation of transfer, as the case may be is delivered to the Company.
7)     Dividend Payment:
The term ‘dividend’ has been defined under Section 2(35) of the Companies Act, 2013. The term “Dividend” includes any interim dividend. It is an inclusive and not an exhaustive definition. According to the generally accepted definition, “dividend” means the profit of a company, which is not retained in the business and is distributed among the shareholders in proportion to the amount paid-up on the shares held by them.
8)     Special Resolution by Postal Ballot:
Applicable for E-Voting:
•                   Every listed company or
•                   A company having not less than one thousand shareholders shall provide to its members facility to exercise their right to vote at general meetings by electronic means.
•                   E-Voting Period:
•                   The e-voting shall remain open for not less than one day and not more than three days.
•                   In all such cases, such voting period shall be completed three days prior to the date of the general meeting.
We, "PNJ Legal Consultants" are one of the well known organizations engaged in providing Consultancy Services keeping in mind the Client Service requirements.
Our team members deliver excellent performance in providing these services and our clients can avail the services at affordable prices.
Our sophisticated team has complete knowledge of various exercises and technicalities that are used in our services. Our services includes Strategy Consulting, GST Consulting, Asset Management, Feasibility Study, International Arbitration, Due Dilligence, Franchisee Consulting, Financial Audits, Operational Audits, Tax Heaven Registrations, Shareholder Agreements, Start up Consulting, IP Consulting, Taxation Services, Accounting system design and Mergers Acquisitions.
Contact at parascs@gmail.com or refer website www.pnjlegal.com


Wednesday, July 12, 2017

APPLICATION FOR RERA REGISTRATION

Ø Application of registration u/s4 to be made as per the Form ‘A’ prescribed under Rule 3(3) and along with the same declaration has to be filled in Form ‘B’ as per Rule 3(6).
Ø The concept of 70:30 is mentioned in section 4(2)(i)(d).
Ø Registration is guaranteed under section 5.
Ø Registration can be revoked u/s 7.
Registration and obligation of real estate
Ø As per RERA it now mandatory that real estate agents selling the premises in Real estate project have to register u/s9 by complying as per the form ‘G’ prescribed under Rule 11(2)
Ø As per Rule 12(4) the registration shall be valid for period of 5years.
Ø The provision for renewal in respect of Real estate agent should not be done as per Rule 13.
Ø There are various obligation caused on Real estate agent under Rule 14
Ø Revocation of registration of breach of provision mentioned in Rule15.
Ø As per the Rule 16 Real estate agents has to maintain and preserves separate books, accounts, documents. 70% of realization from allottees in a separate bank account
1.    The Act mandates that a promoter shall deposit 70% of the amount realized from the allottees, from time to time, in a separate account to be maintained in a scheduled bank. This is intended to cover the cost of construction and the land cost and the amount deposited shall be used only for the concerned project.
2.    The promoter shall be entitled to withdraw the amounts from the separate account, to cover the cost of the project, in proportion to the percentage of completion of the project. However, such withdrawal can only be made after it is certified by an engineer, an architect and chartered accountant in practice that the withdrawal is in proportion to the percentage of completion of the project
3.    The promoter is also required to get his accounts audited within six months after the end of every financial year by a practicing chartered accountant. , Further, he is required to produce a statement of accounts duly certified and signed by such chartered accountant, and it shall be verified during the audit that (i) the amounts collected for a particular project have been utilised for the project; and (ii) the withdrawal has been in compliance with the proportion to the percentage of completion of the project.
The application for registration must disclose the following information:
Ø Details of the promoter (such as its registered address, type of enterprise such proprietorship, societies, partnership, companies, competent authority)’.
Ø A brief detail of the projects launched by the promoter, in the past five years, whether already completed or being developed, as the case may be, including the current status of the projects, any delay in its completion, details of cases pending, details of type of land and payments pending.
Ø An authenticated copy of the approval and commencement certificate received from the competent authority and where the project is proposed to be developed in phases, an authenticated copy of the approval and commencement certificate of each of such phases.
Ø The sanctioned plan, layout plan and specifications of the project, plan of development works to be executed in the proposed project and the proposed facilities to be provided thereof and the locational details of the project.
Ø Performa of the allotment letter, agreement for sale and conveyance deed proposed to be signed with the allottees.
Ø Number, type and carpet area of the apartments and the number and areas of garages for sale in the project.
Ø The names and addresses of the promoter's real estate agents, if any, and contractors, architects, structural engineers affiliated with the project.
A declaration by the promoter supported by an affidavit stating that:
Ø He has a legal title to the land, free from all encumbrances, and in case there is an encumbrance, then details of such encumbrances on the land including any right, title, interest or name of any party in or over such land along with the details;
Ø The time period within which he undertakes to complete the project or the phase; and
Ø 70% of the amounts realised for the real estate project from the allottees, from time to time, shall be deposited in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost and shall be used only for that purpose.
DUTIES OF PROMOTER
Ø Upon receiving the login id and password Promoter has to create his web page on the website of the authority
Ø To enter all the details of the proceed project on his web page
Ø Once in three months the promoter has to update the data on web page in respect of booking status, approvals, status of the project etc..
Ø Advertising material should reflect should the registration details of the promoter.
Ø Promoter has to abide by all the obligation under section 11(3) at time of time of booking
Ø As per the section 12 promoters will solely responsible for on regards as the advertisement of prospectus.
Ø As per section 13 promoter cannot accept more than 10% of the cost of apartment without executing the contract.(in MOFA it is used to be 20 %)
Ø As per section 15 promoters cannot transfer the Real estate project to the third party without obtaining the consent 2/3rd of the allotters.
Ø  As per section 16 promoters has to insure Real estate projects in respect of land and building and construction of Real Estate project.
Ø As per s.17 promoter has to transfer the title when the norms are fulfilled for its transfer.(this done with help of amendment of land titling bill 2010 which gives the entire mechanism of land titling
 BENEFITS OF THE CUSTOMER
The Authority shall in order to facilitate the growth and promotion of a healthy, transparent, efficient and competitive real estate sector make recommendations to the appropriate Government of the competent authority, as the case may be, on,—
(a) protection of interest of the allottees, promoter and real estate agent;
(b) creation of a single window system for ensuring time bound project approvals and clearances for timely completion of the project;
(c) creation of a transparent and robust grievance redressal mechanism against acts of ommission and commission of competent authorities and their officials;
(d) measures to encourage investment in the real estate sector including measures to increase financial assistance to affordable housing segment;
(e) measures to encourage construction of environmentally sustainable and affordable housing, promoting standardisation and use of appropriate construction materials, fixtures, fittings and construction techniques;
(f) measures to encourage grading of projects on various parameters of development including grading of promoters;
 (g) measures to facilitate amicable conciliation of disputes between the promoters and the allottees through dispute settlement forums set up by the consumer or promoter
associations;
(h) measures to facilitate digitization of land records and system towards conclusive property titles with title guarantee;
(i) to render advice to the appropriate Government in matters relating to the development of real estate sector;
(j) any other issue that the Authority may think necessary for the promotion of the real estate sector.
CIVIL COMPLAINT
No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Authority or the adjudicating officer or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act.
 (1) No court shall take cognizance of any offence punishable under this Act or the rules or regulations made there under save on a complaint in writing made by the Authority or by any officer of the Authority duly authorised by it for this purpose.
(2) No court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under this Act.
We, "PNJ Legal Consultants" are one of the well known organizations engaged in providing Consultancy Services keeping in mind the Client Service Mentality.
Our team members deliver excellent performance in providing these services and our clients can avail the services at affordable prices.
Our sophisticated team has complete knowledge of various exercises and technicalities that are used in our services. Our services includes Strategy Consulting, GST Consulting, Asset Management, Feasibility Study, International Arbitration, Due Dilligence, Franchisee Consulting, Financial Audits, Operational Audits, Tax Heaven Registrations, Shareholder Agreements, Start up Consulting, IP Consulting, Taxation Services, Accounting system design and Mergers Acquisitions.
Contact at parascs@gmail.com or refer website www.pnjlegal.com



CORPORATE SOCIAL RESPONSIBILITY

Business is a part of larger external environment. It is a sub-system of the society. The modern corporation exerts considerable influence on the civil society, polity and the economy of the nation. It has to justify its role in the society as society gives business the license to operate. Simply giving economic benefits to the shareholders is not sufficient as societal expectations are continuously increasing. These expectations are the main reason behind the evolution of corporate social responsibility. And these expectations are the result of rapidly growing size of the business.
With the passes of time business has become more powerful and now it has far reaching impact on every aspect of the society. These impacts make it a moral duty of the business to be accountable and responsible for the same market. Contrary to them many companies are showing their deep passion to bring development in the society through CSR initiatives.
London Group Benchmarking Model (LGB) illustrates the impact of different corporate activities (with corporate community involvement) on society.

The LGB model has laid down methodology to measure and report on inputs and outputs of corporate community involvement. The relative sizes of the components are meant to reflect the company’s impact on society. The philanthropic component is typically what companies do for the society without any expectations, like donation of money. Social investment component includes limited range of social issues chosen by the company to protect long term corporate interest and to enhance its reputation. In commercial initiatives, the company is focusing more on the commercial benefits of the social involvement while addressing social issues. Cause related marketing or event sponsorship are typical examples of this type of engagement.

The business basics part of the model relate to how the company does its business and whether it is sensitive about the impact of its business on society. As per this model, a company’s business basics activities are expected to impact society more than its Philanthropic activities.
CSR in India has traditionally been seen as a philanthropic activity. And in keeping with the Indian tradition, it was an activity that was performed but not deliberated. As a result, there is limited documentation on specific activities related to this concept.
However, what was clearly evident that much of this had a national character encapsulated within it, whether it was endowing institutions to actively participating in India’s freedom movement, and embedded in the idea of trusteeship.
Behavioral Dimensions of CSR by management philosophers
HUMAN DIGNITY
Survival of any enterprise is outcome of the harmony between the company’s objectives, objectives of the state system and the people. Any conflict between the objectives of these three interactive players would stuck the business firm in the middle of the road ,corporations  are  responsible  for  worker’s human  dignity  and  status,  and  worker’s training and development as Corporation’s resource and not cost.
SOCIAL VALUES
Businesses are obliged to make and pursue those policies decisions which are desirable to social values of the community.
SOCIAL NEEDS
Execution of the businesses policies shall not be restricted to the firm's Financial gain, corporate interests only rather it should also cater for the sociologic aspects as well.
ETHICAL CONCEPT
The  social  responsibility  has  become  an ethical concept CSR  is  a  very  important  dimension  of corporate strategy and not a precondition for business success. The businesses must find a viable Course of action between what is socially and ethically rights and what is economically profitable. CSR is a voluntary initiative and should be proactive. Business encompasses the economic, legal, ethical and discretionary expectations that society has of business.
MORAL DUTY       
CSR is business response to the growing public concerns which revolves around its Socio-moral responsibility towards the well beings of society. CSR is behavior of business over and above what is ordinarily required by regulatory bodies and legal requirements.     
We, "PNJ Legal Consultants" are one of the well known organizations engaged in providing Consultancy Services keeping in mind the Client Service Mentality.
Our team members deliver excellent performance in providing these services and our clients can avail the services at affordable prices.
Our sophisticated team has complete knowledge of various exercises and technicalities that are used in our services. Our services includes Strategy Consulting, GST Consulting, Asset Management, Feasibility Study, International Arbitration, Due Dilligence, Franchisee Consulting, Financial Audits, Operational Audits, Tax Heaven Registrations, Shareholder Agreements, Start up Consulting, IP Consulting, Taxation Services, Accounting system design and Mergers Acquisitions.
Contact at parascs@gmail.com or refer website www.pnjlegal.com


Tuesday, July 11, 2017

SHOULD INDIAN LAWYERS BE ALLOWED TO WORK ON CONTINGENCY

The Bar Council of India prohibits advocates from charging fees to their clients contingent on the results of litigation or pay a percentage or share of the claims awarded by the Court. Bar Council of India Rules: Part VI, Chapter II, Section II, Rule 20 which reads as under:
“20. An advocate shall not stipulate for a fee contingent on the results of litigation or agree to share the proceeds thereof.”
Many have the misconception that the reason why lawyers do not work on a contingency basis is that such an agreement between the lawyer and client would be a wagering one, and therefore are void. Apart from the Bar Council Rules which have expressly prohibited it, in the landmark case of Ganga Ram v. Devi Das, 61 P.R. (1907), such an agreement was held to be void for being against public policy and also against professional ethics
 However, although prohibited, in several cases, especially those before the lower Courts, clients are charged on the percentage of claim amount that the lawyer is able to recover. However, the practice though prevalent, has hardly led to disputes and is can seldom be proved. Reason being that the contingency agreement is always oral and highly informal. It must be remembered that such an agreement is not only void but also would lead to the lawyer facing disciplinary action by the Bar Council and a chance of losing one’s license to practice at the Bar.
Contingency fees exist in the civil realm because the attorney "attaches" their fee to the resulting award; if there is no award, there is no fee. Many states also bar attorneys from taking divorce cases on contingency for similar reasons -- there's not an "award" but rather a separation of property. Further, it's an ethical issue that could result in the attorney preferring a plea bargain over going to trial, in order to further their interest in securing payment from the client, rather than taking the client's best interest. This isn't as much of a concern in the civil realm, because someone's not going to prison; they're just settling a dispute between private parties.
The main reason for the express prohibition in the Bar Council of India Rules is probably because lawyers must not be allowed to have ulterior interests in the outcome of the case. They are considered to be of a ‘noble profession’, and are officers of the Court. Their main objective must be Justice and not financial gain.
 If they were interested in the matter, they might adopt unfair means or allow their emotions to get the best of them. Sometimes, the Court may grant an alternate remedy then the one paid for, which the contingency agreement does not cover. In such case it is difficult to determine the lawyer’s fee. This may lead to unimaginable amount of disputes between lawyer and client.
Although theoretically this may seem like a very good reasoning, but in practice the Contingency Fee system is a boon to poor clients. There must be several people in India, who even though they have been wronged, do not take legal action because of the legal expenses and the fear that even after somehow being able to meet those expenses, still losing the suit. If the abovementioned rule is removed from the Bar Council of India Rules, then this transaction can be developed. Written and formal documents can come into existence with clear cut clauses for every possible outcome, as well as whether out-of-pocket expenses are also to be paid are also contingent
K.L. GAUBA VS UNKNOWN
This is an application under our disciplinary jurisdiction against Mr. K. L. Gauba. It came to the notice of this Court that Mr. Gauba, who is an advocate of this Court, had entered into an agreement with his client, one Amarnath Bhardwaj, which appeared to be champertous and this Court took the view that the circumstances under which the said agreement had been entered into and the terms of the agreement itself called for an investigation under the disciplinary jurisdiction, and so it was decided to refer this case to the Bar Council.
Accordingly, on May 1, 1953, the learned Chief justice appointed three members of the Bar Council to constitute a Tribunal under Section 11 of the Bar Councils Act for inquiring into this case. Notice of the intended inquiry was served on Mr. Gauba in due course. He appeared before the Bar Council Tribunal, gave his explanation on July 10 and filed an additional statement on August 6, 1953. The matter was then heard by the Members of the Tribunal and they made the report on December 16, 1953. The Tribunal has held that the respondent had entered into an agreement with the client that he should be given half of the profits of the litigation in case of success and this in the opinion of the Tribunal amounted to professional misconduct. After this report was received, notice of the hearing of the present application was served on Mr. Gauba and the matter has thus come before us for final disposal.
It would thus seem that the American decisions are based upon the statutory law upon the subject as obtaining in America. In India, however, we have got the provisions ofSection 23 of the Indian Contract Act according to which the agreements like the agreement in this case being against public policy must be deprecated. I, therefore, agree with my learned brother that Mr. Gauba's conduct in this case was grossly unprofessional and most objectionable
Law Commission fails    
The Law Commission of India has failed to address the issue of excessive litigation cost in the country which is predominantly the result of unfair levy of fees by lawyers. In its 240th report (May 2012), the commission examined several state rules on fees and strangely, pleaded for enhancement of fees! According to the report, fee prescribed in the rules is ‘so meager’.  
Rules do not cover all types of cases or courts and, therefore, the major varieties of fee are outside their ambit. Levying of fee by lawyers in India is not by and large governed by any rules at all, and even in areas covered by the rules, as in civil litigation, they are honored only in their breach.  
Ø The public view of eminence in advocacy also needs to be changed.
The artificial and luxurious misconceptions about professional greatness need to be exposed and fairness in fixation of remuneration recaptured. While recognising the labour behind research, travel and homework, the litigant also should be guaranteed fairness in dealings. We are yet to realise the significance of proper guidance and genuine legal consultation. It is reasonable to charge for a fair advice after due consultation than charging exorbitantly for a fruitless litigation based on an erroneous or casual advice.
The country should change its litigation habits. More egalitarian and sophisticated methods of dispute resolution like arbitration and conciliation are to be encouraged in areas ranging from business to matrimonial disputes. The iron wall between legal profession and society is only to be smashed and the profession demystified. There is a real need to evolve a national movement for fair advocacy which should take in lawmen as well as laymen from all the states. 
Types of Legal Fees:-
The type of fee arrangement that you make with your lawyer will have a significant impact on how much you will pay for the services. Legal fees depend on several factors, including the amount of time spent on your problem; the lawyer's ability, experience, and reputation; the novelty and difficulty of the case; the results obtained; and costs involved. There will be other factors such as the lawyer's overhead expenses (rent, utilities, office equipment, computers, etc.) that may affect the fee charged.
There are several common types of fee arrangements used by lawyers:
  • Consultation Fee: The lawyer may charge a fixed or hourly fee for your first meeting where you both determine whether the lawyer can assist you. Be sure to check whether you will be charged for this initial meeting.
  • Contingency Fees: The lawyer's fee is based on a percentage of the amount awarded in the case. If you lose the case, the lawyer does not get a fee, but you will still have to pay expenses. Contingency fee percentages vary. A one-third fee is common. Some lawyers offer a sliding scale based on how far along the case has progressed before it is settled. Courts may set a limit on the amount of a contingency fee a lawyer can receive. This type of fee arrangement may be charged in personal injury cases, property damage cases, or other cases where a large amount of money is involved. Lawyers may also be prohibited from making contingency fee arrangements in certain kinds of cases such as criminal and child custody matters. Contingency fee arrangements are typically not available for divorce matters, if you are being sued, or if you are seeking general legal advice such as the purchase or sale of a business.
  • Flat Fees: A lawyer charges a specific, total fee. A flat fee is usually offered only if your case is relatively simple or routine such as a will or an uncontested divorce.
  • Hourly Rate: The lawyer will charge you for each hour (or portion of an hour) that the lawyer works on your case. Thus, for example, if the lawyer's fee is $100 per hour and the lawyer works 5 hours, the fee will be $500. This is the most typical fee arrangement. Some lawyers charge different fees for different types of work (legal research versus a court appearance). In addition, lawyers working in large firms typically have different fee scales with more senior members charging higher fees than young associates or paralegals.
  • Referral Fee: A lawyer who refers you to another lawyer may ask for a portion of the total fee you pay for the case. Referral fees may be prohibited under applicable state codes of professional responsibility unless certain criteria are met. Just like other fees, the total fee must be reasonable and you must agree to the arrangement. Your state or local bar association may have additional information about the appropriateness of a referral fee.
  • Retainer Fees: The lawyer is paid a set fee, perhaps based on the lawyer's hourly rate. You can think of a retainer as a "down payment" against which future costs are billed. The retainer is usually placed in a special account and the cost of services is deducted from that account as they accrue. Many retainer fees are non-refundable unless the fee is deemed unreasonable by a court. A retainer fee can also mean that the lawyer is "on call" to handle your legal problems over a period of time. Since this type of fee arrangement can mean several different things, be sure to have the lawyer explain the retainer fee arrangement in detail.
  • Statutory Fee: The fees in some cases may be set by statute or a court may set and approve a fee that you pay. These types of fees may appear in probate, bankruptcy, or other proceedings.
With all types of fee arrangements you should ask what costs and other expenses are covered in the fee. Does the fee include the lawyer's overhead and costs or are those charged separately? How will the costs for staff, such as secretaries, messengers, or paralegals be charged. In contingency fee arrangements, make sure to find out whether the lawyer calculates the fee before or after expenses.
We, "PNJ Legal Consultants" are one of the well known organizations engaged in providing Consultancy Services keeping in mind the Client Service Mentality.
We have a team of highly qualified professionals and time to time training is provided by us as per the requirements. Our team members deliver excellent performance in providing these services and our clients can avail the services at affordable prices.
Our sophisticated team has complete knowledge of various exercises and technicalities that are used in our services. Our services includes Strategy Consulting, GST Consulting, Asset Management, Feasibility Study, International Arbitration, Due Dilligence, Franchisee Consulting, Financial Audits, Operational Audits, Tax Heaven Registrations, Shareholder Agreements, Start up Consulting, IP Consulting, Taxation Services, Accounting system design and Mergers Acquisitions.
Contact at parascs@gmail.com or refer website www.pnjlegal.com