We current Justices read the Constitution in the only way that we can: as twentieth-century Americans. We look to the history of the time of framing and to the intervening history of interpretation. But the ultimate question must be, what do the words of the text mean in our time? For the genius of the Constitution rests not in any static meaning it might have had in a world that is dead and gone, but in the adaptability of its great principles to cope with current problems and current needs. What the constitutional fundamentals meant to the wisdom of other times cannot be the measure to the vision of our time. Similarly, what those fundamentals mean for us, our descendants will learn, cannot be the measure to the vision of their time. This realization is not, I assure you, a novel one of my own creation. Permit me to quote from one of the opinions of our Court, Weems v. United States
217 U.S. 349, written nearly a century ago:Time works changes, brings into existence new conditions and purposes. Therefore, a principle to be vital must be capable of wider application than the mischief which gave it birth. This is peculiarly true of constitutions. They are not ephemeral enactments, designed to meet passing occasions. They are, to use the words of Chief Justice John Marshall, "designed to approach immortality as nearly as human institutions can approach it." The future is their care and provision for events of good and bad tendencies of which no prophesy can be made. In the application of a constitution, therefore, our contemplation cannot be only of what has been, but of what may be.
Thursday, December 9, 2010
Thursday, November 18, 2010
Wednesday, November 17, 2010
moneycontrol.com on Net Asset Value in Mutual Funds
Business Line on contractual terms in Health Insurance Policies
In the above article, terms such as the "sum assured", "benefits", conditions such as exclusion of alternative therapies from the cover of insurance, exclusion of cover for organ transplants are explained.
Business Line on How to Arrive at the Enterprise Value
Enterprise Value is the index used to compare two firms (in the economic sense) in the same sector. The article explains how to calculate enterprise value, combination of enterprise value and other comparison systems, and the limitations of using enterprise value in the comparison of firms.
Business Line on Non-Compete Fee
The issue of Non-Compete Fee became famous because of the proposed acquisition of Cairn India by Vedanta. This article explains what a Non-Compete Fee is and briefly maps the legal position pertaining to it. [the latest news on the Cairn-Vedanta deal can be accessed from here.]
Wednesday, November 10, 2010
I shall explore this possibility in a later post.
Sunday, November 7, 2010
- Right to know the identity of the doctor treating the patient
- Right to know the probable diagnosis
- Right to know the probable treatment
- Right to be informed of the possible financial implications of the proposed treatment
- Right to demand transfer to another facility
- Right to accept or refuse treatment after being informed of the risks
- Right to be informed before research protocol is initiated and to refuse to be a part of it
- Right to demand photocopy of the patient's entire medical records.
Informed Consent and the Anesthesiologist
Doctrine of Informed Consent and the Patient: Different Aspects
Informed Consent Process
Informed Consent and Clinical Trials
Seeking patients' consent: The ethical considerations
Saturday, November 6, 2010
Wednesday, September 29, 2010
- issue of shares against import of capital goods, machinery or equipment including second hand equipment
- issue of shares against services
- issue of shares against import of raw materials and trade payables.
- issue of shares against pre-operative or pre-incorporation expenses.
- share swaps
- issue of shares against intangible assets including franchisee agreements
- issue of shares against one time extraordinary payment including arbitral awards
Tuesday, September 14, 2010
Saturday, September 11, 2010
“In terms of Section 53A(1)(a) of the Act appeal shall lie only against such directions, decisions or orders passed by the Commission before the Tribunal which have been specifically stated under the provisions of Section 53A(1)(a). The orders, which have not been specifically made appealable, cannot be treated appealable by implication. For example taking a prima facie view and issuing a direction to the Director General for investigation would not be an order appealable under Section 53A (emphasis mine).”
“Neither any statutory duty is cast on the Commission to issue notice or grant hearing, nor any party can claim, as a matter of right, notice and/or hearing at the stage of formation of opinion by the Commission, in terms of Section 26(1) of the Act that a prima facie case exists for issuance of a direction to the Director General to cause an investigation to be made into the matter.”(emphasis mine)
“The Commission, in cases where the inquiry has been initiated by the Commission suo moto, shall be a necessary party and in all other cases the Commission shall be a proper party in the proceedings before the Competition Tribunal. The presence of the Commission before the Tribunal would help in complete adjudication and effective and expeditious disposal of matters. Being an expert body, its views would be of appropriate assistance to the Tribunal. Thus, the Commission in the proceedings before the Tribunal would be a necessary or a proper party, as the case may be.” (emphasis mine)
“During an inquiry and where the Commission is satisfied that the act is in contravention of the provisions stated in Section 33 of the Act, it may issue an order temporarily restraining the party from carrying on such act, until the conclusion of such inquiry or until further orders without giving notice to such party, where it deems it necessary. This power has to be exercised by the Commission sparingly and under compelling and exceptional circumstances. The Commission, while recording a reasoned order inter alia should : (a) record its satisfaction (which has to be of much higher degree than formation of a prima facie view under Section 26(1) of the Act) in clear terms that an act in contravention of the stated provisions has been committed and continues to be committed or is about to be committed; (b) It is necessary to issue order of restraint and (c) from the record before the Commission, it is apparent that there is every likelihood of the party to the lis, suffering irreparable and irretrievable damage or there is definite apprehension that it would have adverse effect on competition in the market.” (emphasis mine)
“In consonance with the settled principles of administrative jurisprudence, the Commission is expected to record at least some reason even while forming a prima facie view. However, while passing directions and orders dealing with the rights of the parties in its adjudicatory and determinative capacity, it is required of the Commission to pass speaking orders, upon due application of mind, responding to all the contentions raised before it by the rival parties.” (emphasis mine)
At first blush the finding of the Supreme Court seems to be correct. However I shall analyze the decision in greater detail in a subsequent post.
Thursday, September 9, 2010
The order of the COMPAT has been previously discussed on this blog here.
Tuesday, September 7, 2010
You can access any of these links above to read the letter reportedly sent to those mags.
There was a specific complaint in the said letter that the said mag had invited NUJS to place ads. I quote and italicise the relevant portion of the letter:
(pardon the long quote)
"We wish to bring to your notice the fact that NUJS had received such an offer to advertise in your magazine in that particular issue by one Manish Kumar <email@example.com> (who claims to be the Assistant Manager of OUTLOOK) for varying rates starting from Rs. 1,00,000 and going up to Rs. 5,00,000.
The text of his email reads as below:
“From: manisk kumar [mailto:manishk@outlookindia.
Sent: Tuesday, May 18, 2010 10:40 AM
Subject: Proposal for professional college issues.
Outlook – India’s Best Professional Colleges Survey – 2010
Outlook, India’s most popular and respected English news magazine is bringing out its eagerly awaited annual survey and ranking of The Best Professional Colleges in India, through a special issue in June 2010. For the past four years, Outlook’s ranking of the leading engineering and medical colleges has set the benchmark for tracking academic excellence. This year, we are expanding the breadth of the survey by covering six other professional streams – architecture, fashion design, hotel management, law, mass communication, and social work.
For parents and students, this special issue is an invaluable guidebook. For colleges and institutes, it’s a matter of prestige to be featured in this survey -- there is high peer recall of Outlook’s ranking.
The survey is based on both objective and perceptual data across relevant parameters. Conducted by leading market research firm MDRA, the survey would also undertake a random physical audit of institutes. Authenticity and evaluation process would be the key elements of this survey. Our research team is contacting close to 1,300 colleges and institutes for the survey. A brief on the categories:
Engineering – More than 600 institutes recognized by AICTE.
Medical – Over 300 (MCI approved) and approximately 100 of Dentistry (DCI approved).
Mass Communication – 60+ institutes are being contacted.
Hotel Management – More than 60 institutes.
Law – Around 50, recognized by Bar Council of India and All India Bar
Social Welfare – 50+ institutes are being contacted.
Architecture – 50+ institutes are being contacted.
Fashion Design – 60 institutes.
The survey will be based on the following parameters:
We invite you to advertise in this special issue dated: June 28th. Released on: June 18th. Deadline: June 10th
Full Page : Card Rate -Rs. 490,000 Special Rate: Rs. 2,00,000
Half Page : Card Rate: Rs. 3,00,000 Special Rate: Rs. 1,00,000
We look forward to your participation. Thanking you and with warm regards
(The entire email chain is attached as Annexure A.)
Was this email and its offer to advertise for a heavy sum in the very same issue where the rankings were to appear, done with a view to subtly inform the college that if it advertised, it faced the prospect of a better ranking? We would appreciate a clarification from you in this regard.
NUJS did not place any advertisement with your magazine. However, NLIU Bhopal did (see attachment: Annexure B). Both colleges had similar marks in the ranking i.e., 779.4: however, NLIU Bhopal was ranked at number 4, while NUJS was ranked at number 5. On what basis does one get precedence over the other? Shouldn’t both have been ranked at number 4 and the next in line should have been number 6. Isn’t this the standard practice? Please elaborate.
In any case, we hope that you will desist from this questionable practice in future. Sponsorships and paid advertisements in the very same issue in which you rank colleges taint the objectivity of ranking and create an impression of bias."
This allegation reminds me of the paid news issue that has been in the news for almost a year. On the paid news issue, have a look at these articles:
P. Sainath, The medium message and the money,
P. Sainath, Politics and the Praetorian Guard ,
Sathya Prakash M R & B K Ravi, India’s Prosperity Paradox and the Mass Media Disconnect,
Ashwin Mahesh, Invisible India is the elephant in your bedroom ,
Report of the Press Council of India on Paid News
Archna Shukla, Should Private Treaties be Made Public to Newspaper Readers?
"The Bill provides that the income earned by FIIs will be deemed as capital gains. This would not have much impact on the FIIs as most FIIs at present offer their income to tax as capital gains. The deemed characterisation under the Bill implies that income from derivative transactions, which are currently treated as business income, will now be taxed as capital gains. Considering that most derivative contracts have a maturity period of between 30-90 days, the income from the derivative transactions will be subject to tax at 15%. "
"For FIIs investing from favourable treaty jurisdictions, all capital gains will be tax exempt. Though, structures without much commercial substance are likely to face challenges with the advent of general anti-avoidance rule ('GAAR'). As per the proposed GAAR, if the structure has been set up to obtain an unintended 'tax benefit' or involves treaty shopping, the Indian tax authorities will have the ability to lift the corporate veil or deny the treaty benefits. While the detailed rules and safe harbours are still to be announced, it is apprehended that holding structures set up in tax favourable jurisdictions such as Mauritius and Cyprus will be presumed to be set up for tax avoidance and the onus to prove otherwise will be on the taxpayers. This uncertainty might tilt the balance in favour of certain well established jurisdictions such as Singapore, which already have an objective substance test built into their tax treaty with India. For those FIIs who have traders based in jurisdictions from where they invest, it may be easier to meet the commercial substance test."
"The significant impact on the FIIs will be as regards the taxation of their investors. The Bill deviates from the current law and has sought to tax offshore transfer of shares in companies which hold at least 50% or more investment in the form of Indian assets. As a consequence, non-residents investing in an open-ended offshore fund set up as a company may be subject to Indian tax upon redemption of offshore shares. This might create unintended cascading tax burden on the investors in the offshore funds set up as collective investment vehicles, and which have more than 50% asset allocation to India."
I shall explore some of the points in detail at a latter point.
Thursday, September 2, 2010
- Tax Rates
- Residential Status of Individuals
- Residence of Companies
- Income from Salary
- House Property
- Branch Profit Tax
- Wealth Tax
- Minimum Alternate Tax
Friday, August 13, 2010
I will discuss the judgement of the Bombay high court in a subsequent post.
Thursday, August 12, 2010
"I think when we are looking at greater corporate governance and shareholder democracy, this area itself is a very important issue. Who you are giving money to, what purposes you are giving money for, how much is permissible under the law, how much is to be disclosed... these are very, very important issues, which I hope will reflect in the new Companies Bill as well"As a matter of corporate governance, this is a good proposal. But as a matter of political governance, wouldn't it be nice if political parties are bound by rules similar to companies for maintaining their accounts and placing before its stakeholders (mainly public) such accounts? On the face of it, this may seem ridiculous and far-fetched, but when the CAG could be empowered to audit the accounts of certain Non-Governmental Organisations (NGOs), why can't political parties be subject to a similar kind of audit?
Check out today's column of Shailaja Bajpai in the Indian Express. The article is sub-titled:
"There are three sides to every event- the Doordarshan version, the private network version, and the truth"Her article is about how the news media tries to give its own take on the events. She has written about how the news networks try to show our parliamentarians to be hooligans disrupting the House when in the Lok Sabha/ Rajya Sabha channels, lively and informed debates are telecast. I am reminded of this.
[Added after posting: On the propaganda model and related aspects, check out the below resources/ articles:
Edward Herman & Noam Chomsky, Manufacturing Consent: A Propaganda Model
Edward Herman, The Propaganda Model: A Retrospective
Edward Herman, The Propaganda Model Revisited
Chomsky, Necessary Illusions: Thought Control in Democratic Societies
Resources/ Bibliography on the Propaganda Model]
BTW: By the way, Jawaharlal Nehru, an alumnus of Trinity College, Cambridge University was, according to today's Mint (page 4, box titled "Leaving a Legacy"), a "charismatic Oxford-educated lawyer-politician".
Thursday, July 29, 2010
Wednesday, July 28, 2010
"There is absolutely no basis for the observation of the High Court that Arbitration and Conciliation Act, 1996 will not apply to 'civil disputes', but will apply only to 'commercial disputes' or international commercial disputes. The Act applies to domestic arbitration's, international commercial arbitration's and conciliation's. The applicability of the Act does not depend upon the dispute being a commercial dispute. Reference to arbitration and arbitability depends upon the existence of an arbitration agreement, and not upon the question whether it is a civil dispute or commercial dispute. There can be arbitration agreements in non-commercial civil disputes also."- para. 5
Saturday, July 24, 2010
The fundamental question before the tribunal was whether the partnership firm (linklaters LLP) which is treated as a fiscally transparent entity in the UK but is taxable as a separate entity in India under the Income Tax Act, 1961 eligible for the India UK treaty benefits. Before discussing the findings of the tribunal it is important to briefly elucidate on why this issue had arisen at the first place. Art. 1(1) of the India UK treaty stipulates that the convention shall apply to “persons who are resident of one or both the contracting states”. Further, Art 3(2) stipulates that a “partnership firm” which is a taxable unit in India shall be “treated as a person” for the purposes of the India UK treaty. It is very clear from the aforementioned provisions that a partnership firm is treated as a person under the impugned treaty. Thus, the only point that needs to be established for a partnership firm to avail treaty benefits is to essentially show that it is a resident of atleast one of the contracting states. For this purpose Art. 4(1) is important and it reads as under:
For the purposes of this Convention, the term "resident of a Contracting State" means any person who, under the law of that State, is liable to taxation therein by reason of his domicile, residence, place of management or any other criterion of a similar nature.
On the basis of this provision the question that the tribunal had to address inorder to answer the larger question of treaty benefits was whether Linklaters meets the test embodied under art.4(1) of the treaty. The tribunal answering in favour of the assesse held that fiscally transparent entities or specifically partnership firms are entitled to treaty benefits. In reaching this conclusion the tribunal adopted two distinct lines of reasoning.
The first line of reasoning was primarily based on the contextual interpretation of art.4(1) of the treaty. The tribunal after citing several authorities on the interpretation of tax treaties stated that if the literal interpretation of a provision in a treaty leads to unreasonable results, the courts or tribunals should resort to contextual interpretation. In this case if art. 4(1) was to be interpreted literally then linklaters would not have qualified as a resident of UK as the income of the firm was taxed at the hands of the firm and the firm was not taxed per se in the UK (resident country). This interpretation in the tribunal’s opinion and correctly so would have been unreasonable as even though there would be no juridical double taxation (same entity taxed twice), there would in substance be an economic double taxation (same income taxed twice). As a result the tribunal adopted a contextual reading of art.4(1) and held that test embodied under the said article was that the “income of the person should be subjected to residence based taxation on account of some locality related attachment” in that contracting state. The following observations are apposite:
“Viewed in the light of the detailed analysis above, in our considered view, it is the fact of taxability of entire income of the person in the residence state, rather than the mode of taxability there, which should govern whether or not the source country should extend treaty entitlement with the contracting state in which that person has fiscal domicile. In effect thus, even when a partnership firm is taxable in respect of its profits not in its own right but in the hands of the partners, as long as entire income of the partnership firm is taxed in the residence country, treaty benefits cannot be declined.”
The second line of reasoning adopted by the tribunal proceeded on the premise that the actual payment of tax in one of the contracting states is not a condition precedent to avail the benefits of the tax treaty in the other contracting state. In light of this principle the tribunal held that the test laid down under art.4(1) is embodied to ascertain the fiscal domicile of an person (see heading to art.4), hence it is sufficient to show that the resident state has a right to tax the income of the partnership firm irrespective of the fact whether such a right is exercised by the resident state. The following observations are apposite in this regard:
“In our humble understanding, as long as de facto entire income of the enterprise or the person is subjected to tax in that tax jurisdiction, whether directly or indirectly, the taxability test must be held to have been satisfied. Of course, the other possible approach to such a situation is that as long as the tax jurisdiction has the right to tax the entire income of the person resident there, whether or not such a right is exercised, the test of fiscal domicile should be satisfied.”
In my view though the final conclusion reached by the tribunal on this point seems to be correct and will surely encourage professional services, the second line of reasoning requires further investigation as it is against the OECD report on partnerships.
Wednesday, July 21, 2010
In another case Linklaters LLP v. ITO the Mumbai ITAT has reiterated that the amendment made by the Finance Act, 2010 has negated the judgment in Ishikawajima. The important point though is that the court in Linklaters has stated that rendering of service in India is no more an essential ingredient for taxability of service in India u/s 9 of the IT Act, 1961. In other words the service can be taxed in India even if it is only “utilized” in India. However some of the observations in Linklaters can also be possibly interpreted to mean that “no territorial nexus” is required at all. For instance the court observes as under:
“It is fallacious to proceed on the basis that territorial nexus to a tax jurisdiction being sine qua non to taxability in that jurisdiction is a normal international practice in all tax systems”- Para. 17
“ ………in consonance with the school of thought discussed above and these amendment unambiguously negate the principle of territorial nexus which is the understructure of the line of reasoning adopted by the honorable courts above”- Para. 18
An interesting point that emerges is again with regard to India’s compliance with the international tax regime. In Ishikawajima Harima the court had noted that territorial nexus (utilized+ rendered) is a well accepted international tax principle. The court had further noted that “having regard to the internationally accepted principle and DTAA, no extended meaning can be given to the words ‘income deemed to accrue and arise’ in India. Considering this observation and the subsequent ruling in Linklaters where the court holds that Ishikawajima Harima is not good law, it is submitted that the impugned amendment in the Finance Act, 2010 is against well accepted international principles. However, this is subject to an investigation whether at the first place the concept of territorial nexus as suggested in Ishikawajima Harima (utilized+rendered) is indeed a well accepted international tax principle.
India’s compliance with the international tax regime has been a matter of previous discussion on this blog here. A further analysis of linklaters and Ashapur is available on the legal developments blog here and here.
Wednesday, July 14, 2010
In an expedition to enlarge the scope of taxation of Residents, the revised discussion paper on the Direct Tax Code has yet again instituted a platform for debate with the introduction of taxation for Controlled Foreign Corporations( hereinafter CFC ). On an ongoing debate the legal fraternity has been divided amongst those who opine that India does not still require such a change as they believe in the existence of two different and distinct legal entities; those incorporated within and those incorporated outside the country. On the flipside others propagate that the Revenue is suffering losses as the recent trend shows an increase in outward investment, thereby making it necessary to introduce such laws for taxation. In my opinion there is a necessity to examine the proposal as laid down under the DTC, secondly to put forward the shortcomings of the proposal and finally to determine whether India has adhered to the principles recognised by most developed jurisdictions for taxation of the CFC’s.
In the Indian context, Controlled Foreign Corporations are understood as Companies which have been incorporated abroad, in countries with low tax jurisdictions, controlled directly or indirectly by Residents in an attempt to accumulate income without having to pay tax in India. It can therefore be concluded that such a structure is an added method for legally avoiding the payment of taxes in India.
The present proposal can be seen as yet another attempt by the Revenue to overcome the recognition given to the principle of Tax Avoidance in Azadi. It has sought to tax the Resident controlling such a Foreign Corporation on the passive income earned by the same. Furthermore in order to check the deferral of taxes from dividend earned by the CFC’s which are not distributed in India to the shareholders, the DTC(Chapter 8) proposes to tax such dividends as deemed dividend from the Foreign Corporation. The effective test laid down under the DTC is the ‘place of effective management’ of the corporation which is an internationally recognised principle for determining the residence of the Corporation. The DTC defines the term ‘place’ as being the country in which the ‘ key management’ and ‘commercial decisions’ are made for the ‘entity as a whole’. Therefore in substance it widens the ambit of residence of a Foreign Company if it is managed wholly or partially in India unlike the present law which limits a Foreign Corporation liable to tax only if the management and control are wholly in India (s.9 Income Tax Act, 1961). Further the DTC lays down a two-fold test for determining the Place of effective management under Schedule 10 of the code-
(i) The place where the board of directors of the company or its executive directors, as the case may be, make their decisions; or
(ii) in a case where the board of directors routinely approve the commercial and strategic decisions made by the executive directors or officers of the company, the place where such executive directors or officers of the company perform their functions.”
In order to understand the true nature of the applicability of laws governing CFC’s, it is necessary to analyse the limitations of the provisions relating to its induction within the tax structure. Pursuant to the above definition of place of effective management, there should essentially be a bracket which categorises the term ‘ routinely’( clause ii) in such a manner that no further room for interpretation is left. This would check a series of litigation which may arise subsequently. Furthermore the code should specify the ambit of passive income such that there is no ambiguity to the jurisdiction in which such an income arises. There should also exist provisions which specifically limit the applicability to only passive income and does not affect active income. Another issue which arises is in the definition of a Controlled Foreign Income. The DTC should encompass within the meaning of a CFC, structured requisites for determining what would constitute a CFC. By doing so it would thus prevent persons from interpreting the term to their advantage and avoiding tax. Since the concept of CFC’s is not yet developed in India and since this is the first composite legislation governing the same, it lays a higher burden on the drafters to fully analyse the benefits and the limitations, thereby structuring the legislation by according well defined definitions, explanations, exceptions and its effect on the DTA Agreements which India shares with several foreign jurisdictions.
Over the years the developed countries have extensively advanced several principles relating to the taxation of CFC’s as a result of which there has come to exist a set of uniform global principles which have been adopted. A glance at some of the provisions under foreign jurisdictions and the proposal under the DTC makes it evident that India needs to make its law more comprehensive. Illustrating further, most jurisdictions have adopted the principle of determining ‘control’ under the control/ ownership test where a definite percentage is specified which determines if such a corporation could be subject as a Controlled Foreign Corporation. Secondly most of these jurisdictions follow the 50% Shareholder test according to which a Corporation is taxed as a CFC only if 50% of its shareholders are residents of India or have voting power comprising 50%. Such a threshold ensures that there are no two ways in interpreting the provision. Most countries which have adopted this regime do not impose these provisions on Corporations which have their residence in countries with a high tax rate. Therefore it can be inferred that as long as there is bona fide intention for not evading tax, the Corporation will not be taxed. Further, certain exemptions are also granted in favour of these corporations such as the application of the De minimis rule which is prevalent in the UK and the U.S. whereby an exemption is granted only when no part of the gross income of the corporation exceeds a specific limit under the governing laws. In the case of the United States the limit is specified as 1 million dollars.
It is pertinent to take into account that the Indian law still needs to develop a lot further before it has a fully functional system to tax CFC’s. First and foremost the Government should take into consideration the necessity for such legislation. The justification given by the Government for instituting such a provision is that there is a trend for outbound investments which is causing the Revenue to incur losses as it is not being able to tax these entities. However it is vital to understand that a fundamental difference exists between being an economy which has advanced to making outbound investments on a large scale and an economy which is progressively increasing its outbound investments. India today largely depends on inward flow of funds; therefore such legislation would be highly premature. Some considerations are needed to be taken by the Government which largely consists in determining the functioning of the Indian market. Rather than inducting a premature legislation the Government should study the market pattern for a few years such that it is in a position to frame proper laws applicable to the Indian markets than making regular amendments to such provisions. This would be highly ineffective and would lead to a series of unnecessary litigations. A consequent effect of such law would prevent Corporations having Holding Companies in India which would largely affect Mergers and Acquisitions made by Indian Residents.
Concluding, the Government needs to prioritise the needs of the Indian market which would enable the advancement of the Indian economy. Arguendo, the Government should not enact a legislation justifying it as precautionary if there exists no proper framework for its governance. This would entail hardship on a number of Companies which are trying to develop and expand. Therefore a thorough understanding is necessary not only at the domestic level but also the impact on an International platform. Only then can a proper legislation can be brought into effect.