It is important to note that before this due diligence process, a non-disclosure agreement is signed between the companies. The reason behind this step is that a considerable amount of information in the forms of documents, accounts, finances and even personal interaction is revealed and analysed. Within these resources there is a lot of critical info that if made public may lead to losses in terms of finances or even may put the company in a tight spot in terms of its competition with the rival companies. Thus to cover up for it and prevent any kinds of confidential information leaks the non-disclosure agreement is signed so that no such tough conditions may arise and even if they do , proper legal remedy may be seeked for the damages caused. After the initial process of due diligence a report is prepared comprising of its assets, accounts, shares, capitals, contracts, taxation, insurance, exports and imports, obligations and liabilities, legal proceedings and compliance and non-compliance with the statutes and provisions, third party rights, its shareholders, customers etc. On the basis of this report a final opinion is made by the buyer company in regard to the merger or acquisition of the concerned company. Legal opinions of the attorneys are also taken for the same. The basic objective is to inspect the different types of risk involved which the company might have to cater to if they decide to move forward with the transition. These risks are studied and determined from various aspects and resources. If we may talk about the legal risks, firstly we may take notice of the dispute and reputational risks. Here, any kind of dispute which the target company might have with its competitor or even with its customers is taken into account. Ways of solving that dispute is inspected and any sort of future challenge involving that dispute is determined since such sort of legal burden bear the potential to cause huge reputational as well as financial damage. Secondly, we may look into non contractual obligations. Under this specific emphasis is put conflicts relevant to Intellectual Property rights, trademark or copyright infringement committed unknowingly during the course of business. These might also include negligence, misrepresentation, fraud etc. These can be committed by any member of the staff and might have grave consequences for the acquiring firm if revealed in the future. Thirdly, the report also might include compliance and regulatory risks which may arise due to non-compliance of any specific relevant law or statute. Non abidance to any concerned regulatory frame work is also included within its ambit. If we view the process of legal due diligence from a wider scope, we may see that it also includes Business due diligence and accounting due diligence. It is the combination of these diverse aspects that make up an appropriate report which shall later on aid the process of decision making regarding the merger or acquisition.

Briefing up about business due diligence, usually in this process specific information related to investments of the target company is collected. The main goal is to figure the operational and logistical risks which could be involved after the main transaction takes place. Further, accounting due diligence at the same time is a very crucial aspect where accounting information relevant to the company is digged into. Financial statements of the company is analysed to determine and scrutinise any kind of inconsistency which might come into view. Since monetary defaults may cause major inconveniences after the deal has been finalised. With all of this being mentioned it is important to note that such an elaborate and rigorous process involves multiple steps since there shall be no scope of mistake that should be left. The process begins at the stage of basic preparation where the company has selected their targeted company and a dialogue has been initiated about it. This lays a foundation of mutual understanding among the companies after which the follow up steps can be taken up. After this understanding has been formed a non-disclosure agreement comes into the picture, it is important because within the due diligence process there be involvement of a lot of both internal and external information which puts the company in a vulnerable position due to which to protect the company from any kind of exploitation in the future the non-disclosure agreement is signed. In furtherance of this a due diligence team is formed to take hold of the different branches of the due diligence project, since it is an elaborate task thus it cannot be performed by a single person. After the team is formed the execution stage comes up, it’s the stage where the actual collection, analysation and evaluation of data in the form of documents, accounts, reports etc is done. After this is done the final stage comes up which is the closure stage. Here the final report is presented to the management authorities highlighting all the pros and cons of the transaction with which a legal opinion is also provided. Upon the basis of this report a final decision of merger and acquisition is taken.

Since a vast amount of information is reviewed so any kind of discrepancy or inadequacy within this process can lead to serious legal consequences for the company. As the end result of any kind of wrong move can bring the company into scrutiny under company law, SEBI, investment law, competition law, and even RBI guidelines. To avoid any such inconvenience it is important that not only proper due diligence is conducted but also it is conducted efficiently. The report will not only eliminate such legal risks but also helps to set the right expectations from the company. Having read their accounts and relevant information thoroughly one tends to get in a much better position to form a fair negotiating agreement. The clear picture of working conditions, obligations, liabilities, capabilities and risks involved within the company also gives the acquiring firm to plan for a solution oriented approach towards the problems. If metaphorically put its like mixing two food component into each other where the due diligence is present to test for their purity. It is equally important to mention that this whole process can be outsourced too and the other way to go about is the legal team of the firm itself conducts it. Lastly, having analysed the whereabouts around it there is no denial of the fact that due diligence is a crucial aspect from a company’s position point of view. But since these corporations work like a web in the market and have various connections within the industry due to which their actions work like a domino effect which means that on a broader level they if any losses are occurred due to a failed merger or acquisition it shall also affect the economy as a whole and that is something which is specifically not desirable. Thus the concept of due diligence is one of those legal conceptions which endeavours to prevent similar unwanted circumstances.

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• Sales Associates v Forever 21 and Gucci and Sterling jewellers and Wal-Mart

This present case was a collective complaint by the brands of forever 21, Gucci, sterling jewellers and Wal-Mart. The main issue with the case of was of sexual harassment, discrimination and negligence at work place. The initial complaint was made by a forever 21 sales women who allegated that the company had installed CCTV camera within the employee bathrooms. This revelations was only made when the video when viral on internet further casing harassment to the worker. She also added that she had faced frequent sexual taunts from the manager. This was added by a testament by sterling jewellers first female CEO that she had faced on several accounts harassment by the male executives of the company.

It was further added by the court that within The United States of America especially in retail sector majority of the workers were women which amounted to 4.6 million of them thus the court ruled that proper protocol is necessary within these firms for the treatment of women to avoid any kind of harassment and discrimination based on gender.

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• Star Athletica v. Varsity Brands

In this case, the main question before the court was that were two dimensional or 3 dimensional graphics were copyrightable or not if printed on some commodity. As per the facts varsity brands had more than 200 graphic registrations which they used to print on cheerleading costumes. The copyright included various line patterns, colours and shape formations. Star athletica was sued for copyright infringement since they had printed one such design on their cheerleading costumes. The district granted athletica with a judgement which was of the view that design and the product itself could not be separated thus were ineligible for copyright.

Furthermore, it was ruled by the higher court that any kind of two dimensional and three-dimensional graphics can be very well separated and identified thus were eligible to exist independently. The court also mentioned that any such design that was capable to be depicted in a pictorial and sculpture form, when separated from the product, could very well come within the ambits of copyright. 

• Louis Vuitton v. My Other Bag

This is a very interesting case law where the company by the name of “My other bag” made a parody tote bag where the famous picture of Louis Vuitton bags was printed. The court a very important view in the case stating the a parody product must convey two simultaneous and contradictory messages at the same time which are that the product printed is an original but also it is not original but a parody. This case paved the path for all those products and brands which came into the ambits of parodies.

The company of my other bag was sued under the charges of copyright infringement and design theft. It was argued by sued company’s side that Louis Vuitton has continuously acted like a trademark bully within the industry by the looks of their past actions while Louis Vuitton on the other side contended that its actions are in support of the policy of active protection of their intellectual property. The court ruled that such approach cannot be approved every time and their has to be some sort of freedom provided to the brands in context of their products and as in this case the product was a parody so the charges were not approved.

• Puma v. Forever 21

In the present case puma has filed a suit against forever 21 under the charge of copyright and design infringement of the sneakers manufactured by them by the name of Creeper Sneaker, Fur slide and Bow slide which were part of the Fenty collection which was personally designed by celebrity Rihanna Fenty. The fact which differentiated the case from others was that here the issue of copy right infringement was dealt in relationship with the fact that it was specifically designed by a celebrity and was also endorsed within the public through her name. the court observed that within the copyright application Rihanna’s name was nowhere mentioned nor was she being involved within the suit.

Conclusively, it was rued b the court that as far as the plea of trade dress infringement was concerned, it was justifiably denied stating the reason that just because a specific celebrity was related to the product or endorsed it cannot be the reason to be granted the protection of copyright while it was duly granted on the basis of design uniqueness. Further plea regarding the activity infringement was also granted.

• Rajesh Masrani v/s Tahiliani Designs Pvt. Ltd 

In the present case the question arose within the court that does the patterns printed on the fabrics qualifies as artistic work or not and can it be protected under copyright act and design act. It was contended by the respondent that other than the copyright protection granted to the fabric designs which are drawn for production even the patterns printed on the fabric should be protected under the design act. The present case was an appeal as under the previous judgement Rajesh masrani was prohibited from producing, selling or advertising any kind of similar fabric.

The court stated that any such designs only come under the ambit of copyright protection when not more than 50 such commodities are produced for commercial use. While in the present case only 20 pieces with the specific design were created due to which justified protection was granted and any similar printing, selling or advertising of a similar pattern was prohibited.

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Establishment and significance

For the starters the parliament as an institution has huge amount of work that are of complex nature because to run a country there are a lot of laws in hand which are diverse, complicated and technical as well at times. To ease down on this work there are mainly two types of committees in the parliament first is the AD-hoc committee which exists on the temporary basis and are usually agenda specific after that specific project is done with the committee is dissolved. In the past such a committee was formed to enquire into the matters of 2G scam, Bofors contract etc. On the other hand there is standing parliamentary committee which are formed for 1 year and their work runs whole year long. These are not agenda specific but their role is to aid the process of law making by discussing and researching on the potential laws on which the parliament as whole is working on. The most recent development which could be seen in context of the workings of these committees was in regards of the discussions pertaining to Information Technology (Intermediary Guidelines) Amendment Rules of 2018 due to which Dr Shahsi Tharoor who was the head of the standing committee dealing with the bill had summoned the CEO of facebook India in order to enquire about some privacy issues coming under the ambit of the bill. This move was further questioned by the ruling party but the standing committee was completely in its powers to take such an action. Initially the system was set up in April 1993 by India after independence while the parliament was chaired by the honourable vice president KR Naryanan. At that time the committees were segregated into 17 departments and as of now to meet the evolving needs we have 24 standing committees within the ambit of the parliament. These committees comprise of 31 members 21 of which are from Lok Sabha while 10 members are from Rajya Sabha. Viewing from the analytical point view the significance of these committees lie in the fact that they provide the representatives the opportunities to deliberate upon the issue by being away from the public eye. Not only this but while they are in these committees they are also not under their constituency pressure which is the case while they are present within the on record parliamentary debates. The main task of these committees is to prepare reports regarding different bills by analysing and researching upon them from every aspect possible, these reports are not binding in nature to the government but definitely bear an advisory and persuasive value. Although there is no separate provision within the Indian law which talks about standing parliamentary committees but section 105(4) which states “The provisions of clauses ( 1 ), ( 2 ) and ( 3 ) shall apply in relation to persons who by virtue of this constitution have the right to speak in, and otherwise to take part in the proceedings of, a House of Parliament or any committee thereof as they apply in relation to members of Parliament”[1]  of the Indian constitution gives them the powers and privileges to be involved in such process. Adding to this the essence of the committee is to scrutinise the bills with the specific expertise which the members posses. They are efficiently able to do so because under the concept the members are able to make decisions without any politics involved. The process also sometimes initiates collection of public feedback and mutual consensus. This deep determination of public needs and socio economic analysis make the upcoming law more competent for the societal needs while meeting the principles of the welfare state in a better manner.

Critical analysis

Diverting towards a bit critical aspect of the system if we may see the very latest developments itself recently the parliament passed 22 bills within a span of few days, the reason behind this which has been duly pointed out by many policy makers is that none of these bills was discussed by the standing parliamentary committee. This situation arose because the concerned authorities failed to form the required standing committees as well due to which the government evidently misused the situation to get the bills passed without much deliberation or debate. This in return reflects badly upon the law making capacity of the country. Since law formulation is a crucial task for the working of any country which not only affect the daily lives of people but also influences the socio-political, financial, cultural, economic and moral well being of the state. In some previous years the working of the standing committee have shown tremendous success as due to this diversity of our country such expertise within the discussion is an inevitable need for our country. As per PRS Legislative Research, in “the 16th Lok Sabha, 25% of the Bills introduced were referred to Committees, much lower than 71% and 60% in the 15th and 14th Lok Sabha respectively”[2]. Such a trend bears the potential of public outrage since much consultation is not done upon the passed laws which would further hinder the proper implementation of these laws since they might not be widely accepted by the general public. Keeping in mind the overall analysis of the concept and the extensive importance it holds within the procedure of law making it might be a feasible option that to bring in some more level of authority and reform for these committees so that full fruit of their existence and work done can be borne by the parliament. For this it has been highlighted that provided these committees with full time staff, larger ambit of research support and regulations making such scrutinies mandatory for the bills can be one of the many measures which can be taken to maintain the prestige of these committees. As the function performed by them is not only the part of law making proceedings but they also act as an indirect guardian for the appropriate consideration which any competent bill requires so as to make it a successful and fool proof law in the future.   

References 

1)     https://www.jagranjosh.com/general-knowledge/parliamentary-committees-1438142790-1 

2)     https://www.prsindia.org/parliamentary-committees/2194 

3)     https://rajyasabha.nic.in/rsnew/rsat_work/CHAPTER%E2%80%9425.pdf 

4)     https://www.jurist.org/commentary/2020/09/avirup-mandal-vatsla-varandani-shashi-tharoor-summons-facebook/ 

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