[Lavanya Pathak and Pallavi Mishra are advocates practicing at the Delhi High Court. This is a continuation from Part I] Position Taken by High Courts at Bombay, Delhi and Madras The recent judgements rendered by High Courts at Bombay, Delhi and Madras (discussed below) are instructive when it comes to offering clarity on the SC’s understanding of the law on liquidated damages and penalties. In...
Balancing Contractual Autonomy vis-à-vis Application of Section 74 of the Contract Act, 1872: Part I
[Lavanya Pathak and Pallavi Mishra are advocates practicing at the Delhi High Court.] The concept of ‘liquidated damages’ and ‘penalty’ was originally intended to be omitted from the realm of the Indian law by careful usage of the phrase “sum named in the contract” under section 74 of the Contract Act, 1872 (“Contract Act”). However, following the amendment brought about in 1899, the scope of...
CCI’s Inconsistent Stance on Acquisition of Optionally Convertible Securities: Reconciling Control and Competition
[Arham Anwar and Ruby Agrawal are 4th year and 2nd year students of NLU Jodhpur and RGNUL Patiala] The scheme of arrangements contemplated under the Companies Act, 2013 generally requires the approval of the Competition Commission of India (hereinafter, “CCI”) in relation to asset size and turnover of the enterprise. This essentially underlines high level of dependability the company has on the...
Fine-Tuning the FLDG Framework: Sectoral Caps Reflecting Default Rate Variations
[Ritvij Ratn Tiwari is a 3rd-year B.A., LL.B. (Hons.) student at the National Law School of India University, Bangalore.] In June 2023, the Reserve Bank of India (“RBI”) issued guidelines regulating the arrangements for sharing the losses arising from defaulted loans, popularly called default loss guarantee (“DLG”), between regulated entities (“REs”) and lending service providers (“LSPs”). These...
Section 241 of the Companies Act, 2013: An Avenue for Derivative Actions
[Rakshit Agarwal is a 2nd Year Student at the National Law School of India University, Bangalore] The judgment of the Delhi High Court in ICP Investments v Uppal Housing Pvt Ltd has spurred the debate as to whether section 241 of the Companies Act 2013 (“Act”) is the appropriate provision under which derivative actions can be instituted. The decision in ICP Investments to include derivative...
SEBI’s Order on Spoofing – A Way Forward
[Shivangi Paliwal and Mahak Shinghal are final year B.A. LL.B. (IPR Hons.) and B.B.A. LL.B. (IPR Hons.) students at National Law University, Jodhpur] Section 12A of the Securities and Exchange Board of India Act, 1992 [“SEBI Act”] read along with Regulation 3 & 4 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 [“PFUTP...
Regulating the Regulator: A Prohibited Territory for the CCI
[Shourya Mitra is a penultimate year law student at Jindal Global Law School, Sonipat] On 2 June 2023, the Delhi High Court, in the case of Institute of Chartered Accountants of India (“ICAI”) v. CCI, held that the Competition Commission of India (“CCI”) lacks jurisdiction to assess grievances arising from a statutory regulator’s decisions. It held that the CCI could not compel or outsource...
Put Options: Putting Up with Foreign Exchange Regulation
[Ryan Joseph is a 3rd year B.B.A., LL.B. (Hons.) student at Jindal Global Law School] A decision of the Madras High Court in January this year in GPE (India) Limited v. Twarit Consultancy has added to the controversial debate over the enforcement of put options that guarantee assured returns. The High Court toed the line with other courts and upheld an arbitral award, notwithstanding the...
Reimagining the Insolvency Process: A Case of Multiple Resolution Plans
[Piyush Kr. Choubey and Kaustubh Kumar are 4th year students at the National University of Study and Research in Law, Ranchi] The Ministry of Corporate Affairs (“MCA”) in January 2023 floated a discussion paper on possible changes to the Insolvency and Bankruptcy Code, 2016 (the “Code”). One of the topics in the discussion paper was “Reimagining the consideration of the resolution plan and the...
Securing Borrowers, Shielding Lenders: RBI’s Default Loss Guarantee Regulations
[RS Sanjanaa is a 3rd year BA LLB (Hons.) student at Symbiosis Law School, Pune] The Reserve Bank of India (RBI) has granted approval to and released guidelines (on June 8, 2023) on the much-contended topic of default loss guarantee (DLG). A DLG model according to this refers to the default loss cover provided to a bank or non-banking finance company (NBFC) by the fintech company that was the...
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