ArchiveApril 2013

One Person Company – a still-born, half-baked concept?

The Companies Bill 2012 proposes a new concept of One-person Company (OPC). The obvious objective is to overcome the hurdle of needing a second person to form a company, despite the saying that “two’s company”. This brief post is to highlight its nature, some issues and also questioning the real benefit of an OPC. OPC, as the term implies, is a company with one and only one shareholder. The need...

Supreme Court on “Market Abuse”

In a judgment delivered last Friday, the Supreme Court came down heavily on “market abuse” not just on the case at hand but more generally on the practice to the extent prevalent in India. The case, N. Narayanan v. Adjudicating Officer, SEBI, arose in the form of an appeal from the Securities Appellate Tribunal (SAT) in relation to the appellant who was the whole time director of Pyramid Saimara...

Mandatory imprisonment under Companies Bill 2012

The Companies Bill 2012 has an innocuously titled chapter titled “Miscellaneous” which provides stringent and perhaps unprecedented punishment. The Chapter provides for imprisonment and fine for several types of situations. A minimum imprisonment (six months/three years) is also provided. Clause 447, for example, says that any person found guilty of fraud shall be punishable with imprisonment of...

The Scope of the Jurisdiction to Grant Relief against a Penalty Clause

In Andrews v Australia and New Zealand Banking Group, the High Court of Australia has considered an important question of contract law: is the jurisdiction to grant relief against a penalty clause confined to a sanction triggered by an event that can be characterised as a breach of contract, or does it extend to a sanction triggered by other events? The Supreme Court of India had occasion to...

Good faith in Contract Law

It is widely assumed that English contract law does not recognise a general duty of good faith. Instead, the law has preferred an incremental, piecemeal approach of solving particular problems as and when they arise; rather than a general overriding notion of ‘good faith’. For instance, Bingham LJ said in Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989] 1 QB 433, “In many...

GNLU Centre for Corporate and Competition Law (GCCCL): First International Conference

[The following announcement is posted on behalf of the GNLU Centre for Corporate and Competition Law] The GNLU Centre for Corporate and Competition Law (GCCCL) announces the first International Conference on, ‘Modern Corporate Laws: Understanding the Dynamism- Within and Beyond the Legal Boundaries’, on 5th and 6th of October, 2013. With the rising competition in the corporate world, the...

SEBI Order in the Art Fund Case

Earlier this week, SEBI passed an order against Osian’s-Connoisseurs of Art Private Limited holding that the Osian Art Fund falls within the purview of the SEBI Act and the SEBI (Collective Investment Scheme) Regulations, 1999 (the CIS Regulations). Since the art fund had raised investments without registering with SEBI, it was ordered to wind up its scheme and refund monies collected by it and...

Amendments to the Combination Regulations

[The following post is contributed by Karan S. Chandhiok, who is the Managing Associate of the Competition Law Team at Luthra & Luthra Law Offices. Karan graduated from Amity Law School followed by a BCL at Oxford. He currently serves as a Member Executive of the Competition Law Bar Association. These views are personal. Karan may be contacted at...

Changes in the Revised FDI Policy of 2013

[In a previous post, we had drawn attention to the Revised FDI Policy. One of the criticisms of the policy review process was that the changes were not evident from the face of the policy, thereby making it less user-friendly. Fortunately, this gap has been filled in a timely manner by one of our guest contributors below. The following post is contributed by Parag Bhide, who is a Senior Associate...

SEBI Adjudication Order in the IPCL Insider Trading Case

SEBI’s adjudicating officer yesterday passed an order exonerating Mr. Manoj H. Modi (MHM) and Mrs. Smita M. Modi (SMM) for insider trading charges in connection with the shares of Indian Petrochemicals Corporation Limited (IPCL). It deals with two primary legal questions as they were applied to the facts of the case, i.e. (i) whether MHM and SMM are “insiders” with respect to IPCL; and (ii)...

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