[Khush Bhachawat is a III year B.A., LL.B. (Hons.) student at NALSAR University of Law, Hyderabad] The Bombay High Court (“HC”) recently held that authorised signatory of a company who signs a cheque on its behalf is not a ‘drawer’ of the cheque and hence is not liable to pay interim compensation under section 143A of the Negotiable Instruments Act, 1881 (“NI Act”) in a case of...
Promissory Estoppel Revisited: Comment on State of Jharkhand v. Brahmputra Metallics Ltd.
[Kaustav Saha is a Lecturer at Jindal Global Law School. His research interests include private law and legal theory.] The doctrine of promissory estoppel has had a somewhat unprincipled evolution in Indian law, particularly in its relation to the doctrine of consideration and, more pertinently to this post, in its role and character as a public law remedy. In this context, the case of State of...
Analyzing Directors’ Duty of Care under the Companies Act, 2013
[Rishabh Mohnot is a lawyer working in Mumbai and Hrithik Merchant a law student at the National Law School of India University, Bangalore] With the increasing proliferation of companies and their influence, there is a growing need to understand the responsibilities vested on their decision-makers. The Companies Act, 2013 (“2013 Act”) places a duty of care on the key decision-makers in a company...
How Will Courts Decide in Bond Holders versus Central Banks?
[Bhargavi Zaveri Shah a doctoral researcher at the Faculty of Law, National University of Singapore and an editor of IndiaCorpLaw Blog and Harsh Vardhan is a management consultant] The Supreme Court is currently hearing an appeal against a Bombay High Court judgement on Yes Bank’s restructuring plan. The question at hand in this appeal is this: whether, as part of Yes Bank’s restructuring...
Breaking the Rules: When Crowdfunding Platforms Cross the Line in Raising Capital
[Mohammad Kaif is a penultimate year student at Campus Law Centre, Faculty of Law, University of Delhi] Crowdfunding has become increasingly popular as a way to raise funds, where numerous individuals invest in a project or a company, usually via an internet-based platform. Some companies have used crowdfunding platforms to issue securities in violation of the provisions of Private Placement...
Dilemma Surrounding Assignment of Not Readily Realisable Assets (‘NRRA’) under the IBC
[Rohit Sharma is a Partner at Mamta Binani & Associates, Mumbai] By way of a notification dated 13 November 2020, the Insolvency and Bankruptcy Board of India (‘IBBI’) inserted regulation 37A to the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (‘Liquidation Process Regulations’), which states as follows: “37A. Assignment of not readily realisable assets. A...
Reassessing the Validity of Dawn Raid in Light of French Supermarket Judgment
[Shubham Gandhi and Sreeya Sengupta are students at NLU Jabalpur & Nirma Law Institute respectively.] The Competition Act, 2002 (“Act”) vide section 41 grants the power to the Director General (“DG”) to carry out dawn raids, i.e., a sudden, unannounced raid on the company’s offices to seize relevant documents to corroborate the investigation. This power has been largely unguided and...
Call for Papers: 3rd RGNUL-SAM Conclave on Emerging Trends in Banking & Finance in India, 2023
The Rajiv Gandhi National University of Law, Punjab (RGNUL) is an autonomous National Law University (NLU) established by the RGNUL Act (No. 12 of 2006) passed by the Legislature of the State of Punjab, under the second wave of reforms instituted by the Bar Council of India. Established in 2006, RGNUL has garnered a pan-India reputation as a stellar institution for legal research and education...
SEBI’s Proposals to Enhance Corporate Governance by Empowering Shareholders
Over the last decade and, in particular, following the enactment of the Companies Act, 2013, the Securities and Exchange Board of India (SEBI) has been gradually and consistently strengthening the governance norms pertaining to listed companies. Among other measures, SEBI has sought to focus on two specific matters, viz., (i) enhancing transparency in corporate matters; and (ii) empowering...
Debenture Holders’ Right to Object to Material Related Party Transactions
[Vinita Nair is a Senior Partner at Vinod Kothari & Company] The Securities and Exchange Board of India (‘SEBI’) continues to tighten the regulatory regime for debt-listed entities as it aims to promote the corporate bond market. After equating debt-listed entities with outstanding value of listed non-convertible debt securities of Rs. 500 crore and above with equity-listed entities for the...
Modification v. Partial Setting Aside – Whether Two Sides of the Same Coin?
[Pallavi Mishra and Drishti Rajain are advocates practicing in the Delhi High Court] While the law has been settled by the Supreme Court (“SC”) in The Project Director, National v. M Hakeem (“M. Hakeem”) and affirmed in NHAI v. P. Nagaraju (“P. Nagaraju”) with respect to the lack of court’s jurisdiction to “modify” an arbitral award, the recent line of judgements rendered by the High Courts...
Taking away the Attorney-Client Privilege: Competition Amendment Bill, 2022
[Shubham Gandhi is a 5th year student at NLU, Jabalpur and Hricha Gandhi is an Advocate at Rajasthan High Court] The concept of Attorney-Client privilege (“ACP’’) has become one of the quintessential principles across all global jurisdictions. It simply enunciates that the communication made by the client to its attorney during the course of employment or any document shared will be inadmissible...
The Constitutional Validity of Deeming Fictions Under the GST Law
[Prakruthi Jain is a 3rd year B.A., LL.B. (Hons.) student at NALSAR University of Law, Hyderabad] The Goods and Services Tax (“GST”) was introduced by the 101st Amendment Act in 2016. This was followed by the introduction of the four Acts, i.e., the Central Goods and Services Tax Act (“CGST”), the Integrated Goods and Services Act (“IGST”), the Union Territories Goods and Services Tax Act (UTGST)...
Rethinking Interest on TDS/ TCS Credit under GST Law in India: Part 2
[Manohar Samal is an Associate Advocate at Ratan Samal & Associates, Mumbai and a Panel Arbitrator at the Indian Institute of Arbitration and Mediation. This is continued from Part 1] Current Mechanism for Levy of Interest Now that the basic outline of the GST law in India has been discussed, the manner of levy of interest under the GST statutes can be discussed. The CGST Act, 2017 envisages...
Rethinking Interest on TDS/ TCS Credit under GST Law in India: Part 1
[Manohar Samal is an Associate Advocate at Ratan Samal & Associates, Mumbai and a Panel Arbitrator at the Indian Institute of Arbitration and Mediation] The concept of interest under tax law has been one of the most significant sources of compensating the Government treasury for non-compliance with tax statutes in India. The most common forms of non-compliance for which interest is levied on...
Identification of Related Parties of Subsidiaries
[Aisha Begum Ansari is a Manager at Vinod Kothari and Company] The provisions pertaining to related party transactions (RPT) under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the ‘LODR Regulations’) were substantially amended by the Securities and Exchange Board of India (SEBI) on November 9, 2021. Pursuant to the amendments, the definitions of a related party...
Bombay High Court Reiterates Distinction Between Forward Contracts and Options in Securities
The distinction between a forward contract for sale and purchase of securities in a company on the one hand and the creation of an option in relation to such securities on the other hand bears considerable relevance when it comes to their enforceability. While the Securities Contracts (Regulations) Act, 1956 (SCRA) and various notifications issued therein by the Central Government as well as the...
Liability of Company Secretary for Misstatements: SC Remits Case to SAT
In November 2022, we had discussed a somewhat curious ruling of the Securities Appellate Tribunal (SAT) in V. Shankar v. Securities and Exchange Board of India which exonerated the Company Secretary of Deccan Chronicle Holdings Limited (DHCL) from liability for certain misstatements and incorrect disclosures made by the company. We had noted that the SAT largely arrived at the ruling on first...
Necessity of Judicial Member in the CCI: NCLAT’S Perplexing Piece of the Puzzle
[Shourya Mitra is a penultimate year law student at Jindal Global Law School, Sonipat] Recently, the National Company Law Appellate Tribunal (NCLAT) dismissed the appeals filed by United Breweries and others against the order of the Competition Commission of India (CCI) (Beer Cartel Case). The CCI had held that the beer companies were in contravention of the provisions of the Competition Act 2002...
Imposition of an Interim Moratorium Prior to Corporate Insolvency Resolution Process
[Sumer Karekar is a lawyer and is presently undergoing the Graduate Insolvency Programme at the Indian Institute of Corporate Affairs, Gurgaon] The Insolvency and Bankruptcy Code, 2016 (“IBC”) has sought to implement a time-bound framework for resolution of stressed companies. For this purpose, it prescribes a timeline for the adjudicating authority (“AA”) to admit or reject an application for...
Derivative Action – Where Does the Jurisdiction Lie?
[Pratyush Singh is a third-year student at the National Law School of India University, Bangalore] Does the National Company Law Tribunal (NCLT) have exclusive jurisdiction over matters pertaining to derivative action? In November 2022, the Madras High Court in Valluvar Kuzhumam Pvt. Ltd. v. APC Drilling & Construction Pvt. Ltd. ruled in the affirmative. The argument to bar a civil court’s...
Bombay High Court’s ASREC Ruling: Form v. Substance in SARFAESI Proceedings
[Sharanya Shivaraman is an Advocate practicing in Mumbai and a graduate of ILS Law College, Pune] The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 was enacted over two decades ago to facilitate loan recovery and the securitisation of financial assets of banks and financial institutions. Under the framework of the Act, section 13 is a key...
Resolving the Conundrum Surrounding Applicability of Moratorium under Section(14)(1)(a) of IBC
[Kanishka Aswal and Ritik Jhanwar are III year students at the Gujarat National Law University, Gandhinagar. This post was first published here] One of the ultimate goals of the Insolvency and Bankruptcy Code, 2016 (“IBC”) is to provide a mechanism for the timely resolution of a corporate debtor’s insolvency in order to maximize the value of its assets, to facilitate credit facility and to...
NCLAT’s Pronouncement in the DLF Case: An Unwarranted Restriction on the Commission’s Powers
[Shourya Mitra is a penultimate year law student at Jindal Global Law School, Sonipat] Recently, the National Company Law Appellate Tribunal (NCLAT) in the case of Amit Mittal v. DLF Ltd Competition Appeal (AT) No.82 of 2018 (DLF case), passed an order remitting a case against DLF, back to the Competition Commission of India (CCI) on account of the Commission’s order being void. The reason was...
Supreme Court Reiterates Rectificatory Jurisdiction Under Companies Act: A Conundrum Involving NCLT and SEBI
[Anshita Dave and Abhyudaya Yadav are 5th year B.A., LL.B. (Hons.) students at Dharmashastra National Law University, Jabalpur] Recently, the Supreme Court in IFB Agro Industries Limited v. SICGIL India Limited held that the National Company Law Tribunal (“NCLT”) cannot exercise its rectificatory jurisdiction under section 59 of the Companies Act, 2013 (“the Act”) to...
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