[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...
Call for Papers: 11th Securitisation Summit 2023
[Announcement on behalf of the Indian Securitisation Foundation] Indian Securitisation Foundation invites researchers, law students and legal scholars to write original and unpublished research paper (5 pages to 15 pages) on any of the following topics, of relevance to securitisation/direct assignment and similar structured finance topics in Indian context, with a global flavour. Bankruptcy...
Interpretation of DTAAs: A Special Case of Explicitly Applying Vienna Convention for Treaty Interpretation
[Shantanu Singh is a 4th year B.A., LL.B. (Hons.) student at Dharmashastra National Law University, Jabalpur] In India, international treaties are not immediately incorporated into domestic law. Under the “dualism” approach, separate legislation is necessary for India to execute treaty-based international law. Treaties, according to Indian courts, are part of public international law and thus are...
“Private Placement”: Syntactic Interpretation of a Financing Engagement Letter
Recently, the England and Wales High Court (Commercial Court) had the occasion in Cantor Fitzgerald & Co. v. Yes Bank Limited [2023] EWHC 745 (Comm) (31 March 2023) to consider contractual language in capital market transactions. While the contract itself was governed by English law, the ruling has implications on contractual interpretation more generally, in addition to its relevance to...
Preserving the IBC’s rationale: The Tussle with the Benami Act
[Rohan Srivastava and Rupam Dubey are currently B.A., LL.B. (Hons.) students at the National Law School of India University, Bengaluru] Presently, the Supreme Court is considering an appeal in the C Ramasubramaniam Liquidator v. Deputy Commssioner of Income Tax (Benami Prohibition) , which will potentially establish the extent to which the Insolvency and Bankruptcy Code (‘IBC’), [year] is given...
Unraveling “Materiality” in SEBI’s Consultation Paper: Legal Perspectives and Recommendations
[Shantanu Dhingra is a 3rd year law student at the National Law University Odisha] The Securities and Exchange Board of India (SEBI) on 20 February 2023 released a consultation paper focused on streamlining disclosures by listed entities, intending to strengthen compliance with the SEBI Listing Obligations and Disclosure Requirements Regulations, 2015. Central to this post is the notion of...
Liability of Authorized Signatory of a Company to Pay Interim Compensation Under the Negotiable Instruments Act, 1881
[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...
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