[Vatsal Jain and Vedant Bhardwaj Singh are 3rd year B.A., LL.B. (Hons) students at Hidayatullah National Law University] On 4 May 2023, the Securities and Exchange Board of India (‘SEBI’), by way of a circular titled ‘Additional requirements for the issuers of transition bonds’ (‘Circular’) laid down certain additional compliance measures for the issuance of transition bonds to prevent the...
Position of a Seller of an Immovable Property under the Insolvency and Bankruptcy Code, 2016
[Lavanya Pathak and Pallavi Mishra are advocates practicing in the Delhi High Court] Under the Insolvency and Bankruptcy Code, 2016 (“IBC”), there is a clear scheme of categorization of creditors for the purpose of initiation of the corporate insolvency resolution process (“CIRP”). This categorization lies at the core of the waterfall mechanism for distribution of assets prescribed under section...
Shareholder Protection under IBC: A Myth or a Possibility
[Dhruv Kohli is a 4th year B.A.LLB student and Sanya Singh a 4th year B.S.W LLB student, both at Gujarat National Law University] Ever since the enactment of the Insolvency and the Bankruptcy Code, 2016 (IBC), there has been a shift in the debt resolution mechanism in India. Unlike its predecessors, the IBC is a creditor-centric legislation, which can be ascertained from the fact that once there...
Reevaluating the Independence of Credit Rating Agencies: Time for Stricter Norms?
[Akanksha Dutta is a final year student of the 3-year LLB course at Government Law College, Mumbai] Credit Rating Agencies (“CRAs”) in India play a very vital role in determining the overall financial health of a company as well as the safety of the securities issued by such companies. The assessments made by CRAs assist investors, both large and small, in evaluating the risk linked to the...
Perpetuating an Anomaly: What is the “Prescribed Period” for Challenging an Arbitral Award?
[Rhythm Buaria is an advocate practicing commercial and matrimonial disputes before courts in Delhi] The Supreme Court in Bhimashankar Sahakari Sakkare Karkhane Niyamita v. Walchandnagar Industries Ltd. (WIL) held that a challenge to an arbitral award under section 34 of the Arbitration and Conciliation Act, 1996 cannot be entertained under the proviso to section 34(3) even if the 30-day period...
Constitutionality of Section 327(7) of the Companies Act 2013: Sanctity of the Waterfall Mechanism
[Simran Malhotra is an Associate at Shardul Amarchand Mangaldas, New Delhi] In Moser Baer Karamchari Union v. Union of India (2 May 2023), workmen unions challenged the constitutionality of section 327(7) of the Companies Act (“Act”) for excluding preferential payment for workmen’s dues over other dues as provided under sections 326 and 327 of the Act in the event of liquidation of a company...
The Remedy for a Corporate Break-Up: A Framework for Cross-Border Demergers in India
[Ishika Garg is a 4th year B.A., LL.B. (Hons.) student at the NALSAR University of Law] Navigating the legalities associated with cross-border demergers (‘CBDs’) has always been a tricky task. The Indian position on this subject has been especially muddled, with a lack of sufficient clarity from both the legal enactments and judicial forums. A post on this Blog has previously noted how the...
Navigating India’s Green Taxonomy: Charting a Course for the Future
[Manvi Khanna is a Research Fellow at Vidhi Centre for Legal Policy and Hitoishi Sarkar a fifth-year law student at Gujarat National Law University. This post first appeared as an article in the Deccan Herald] The G20’s Sustainable Finance Working Group’s recent emphasis on the need to establish a green finance ecosystem has brought to the limelight the challenges that impede India’s green...
Cross-Border Merger Framework in India: Limited Efficacy?
[Rajat Sethi (Partner), Sumit Bansal (Partner) and Oshika Nayak (Associate) are at S&R Associates] The Ministry of Corporate Affairs (“MCA”) notified section 234 of the Companies Act, 2013, as amended (the “Companies Act”), and rule 25A of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, as amended (the “Companies Merger Rules”), on April 13, 2017, to permit merger and...
Denying Input Tax Credit to Bona Fide Recipients Where GST is Not Paid by the Supplier
[Shubham Sharma is a 2nd year BBA LLB (Hons.) law student at Chanakya National Law University] A key distinction between GST and the pre-GST tax regime is that GST promises to eliminate the “cascading effect of taxes” or “tax on tax” that sellers often suffer from. Input tax credit (ITC) under GST is one such core concept that furthers this objective. ITC is the tax that a business pays on a...
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