[Rashmi Birmole is a III year B.A., LL.B. student at ILS Law College, Pune] Infrastructure Leasing & Financial Services (“IL&FS”), a non-banking finance company (“NBFC”) belonging to a sub-category of systemically important non-deposit accepting core investment companies was, at the time, engaged in financing and developing infrastructure projects. In June 2018, the collapse of IL&FS...
Examining the Legal Nature of Commercial Papers: Securities or Money Market Instruments?
[Priyanka Sunjay is an associate at L&L Partners Law Offices. The author thanks Jay Parikh and Varun Kumar for their inputs] On 22 October 2019, the Securities Exchange Board of India (“SEBI”) issued a circular titled ‘Framework for Listing of Commercial Paper’ (“SEBI Circular”) in order to enable listing and trading of commercial papers on stock exchanges. This poses certain important...
IBC Threshold Raised: Analysis and Implications
[Megha Mittal and Shreya Jain are Associates at Vinod Kothari & Co.] The seemingly low threshold of Rs. 1,00,000 for the initiation of insolvency proceedings has been a persistent concern given the possibility of its exploitation by frivolous actions. While rumours about raising the threshold limit for initiating insolvency process have long been swirling, the recent outbreak of Covid-19 came...
Extraterritorial Compliance with Corporate Governance Norms
[Shubham Gupta is a 4th law student at Institute of Law, Nirma University, Ahmedabad] The Securities and Exchange Board of India (SEBI) has elucidated its position with the respect to the extra-territorial application of its corporate governance norms. In a recent informal guidance in the matter of KCP Limited, SEBI interpreted regulation 24(1) of the SEBI (Listing Obligations and Disclosure...
Leniency Plus: A Potential Minus To The Indian Competition Framework?
[Vedantha Sai is a 4th year student at the National University of Advanced Legal Studies (NUALS) Kochi, India] Acting upon the Report of the Competition Law Review Committee, the Ministry of Corporate Affairs on 20 February 2020 introduced the Draft Competition (Amendment) Bill with the object of filling several gaps and revamping the competition law framework in India. It incorporates several...
Vivad se Vishwas Scheme: Will the Tax Payer Express Trust?
[Venkat Maithreya is a Counsel at the Telangana High Court] The Vivad Se Vishwas Scheme (now the Direct Tax Vivad Se Vishwas Act, 2020) (the “Scheme”) was introduced by the Finance Minister, Ms. Nirmala Sitaraman, in her Budget speech for the year 2020-21 in the Lok Sabha on 1 February 2020. The Scheme seems to be an equivalent of the Indirect Tax Sabka Vishwas (Legacy Dispute Resolution) Scheme...
Liability of Issuers for Misleading Advertisement in a Public Issue of Securities
[Neha Sinha is a 3rd Year B.A. LL.B. student at National University of Study and Research in Law (NUSRL), Ranchi] In an order dated February 26, 2020, the Securities and Exchange Board of India (SEBI) imposed penalty on Muthootu Mini Financiers Ltd. (MMFL) in a matter relating to misleading advertisement made to the public at large regarding the issue of debt securities. The matter was decided by...
Delhi High Court on Limitation Period under Section 8, Arbitration And Conciliation Act
[Piyush Agrawal and Radhika Agrawal are 3rd year students at the Hidayatullah National Law University, Raipur] Whether or not the limitation period is applicable to section 8 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) is an unsettled principle. The peculiarity of the statute of limitation being enforceable in courts, but not in matters of arbitration, has long been debated...
Competition Law and the Deep Discounting Conundrum
[Akanshha Agrawal is a III year student at the National Law University, Delhi An earlier version of this post was published by the Kluwer Competition Law Blog] The changing market dynamics in the digital era have raised several concerns with competition regulators across the world, triggering a host of studies for a better understanding the issue. In doing its part, the Competition Commission of...
Supreme Court’s Enunciation of Insurance Law in India
[Kamakshi Puri is a final year student at Jindal Global Law School] In a series of cases last year, a Supreme Court bench comprising Justice Dhananjaya Chandrachud and Justice Hemant Mehta delivered judgments on important aspects of insurance law. Oriental Insurance Company v Mahindra Construction, Life Insurance Corporation of India v Manish Gupta and Reliance Life Insurance Company Limited v...
Position of Third Party Security after Jaypee Infratech
[Ankesh Kumar is a IV Year student at NLIU Bhopal] Anuj Jain v Axis Bank Limited witnessed the Supreme Court ruling on two important matter in Indian insolvency law. As summarized in this post, while the Court set aside the transactions in question as being preferential within the meaning of section 43 of Insolvency and Bankruptcy Code, 2016 (IBC), it went on to decide that creditors taking third...
Crypto-Trading’s Tryst with Destiny
[Megha Mittal is an Associate with Vinod Kothari & Co.] Amidst apprehensions of crypto-trading being a highly volatile and risk-concentric venture, the Supreme Court, in its order dated 4 March 2020 observed that the Reserve Bank of India (RBI), a staunch critic of cryptocurrencies, failed to present any empirical evidence substantiating cryptocurrency’s negative impact on the banking and...
IBC Ordinance, 2019: Impleadment of Allottees in a Pending Application
[Pareekshit Bishnoi is an advocate based in Delhi] The President of India on 28 December 2019 promulgated the Insolvency and Bankruptcy Amendment (Ordinance) Act, 2019 (the “Ordinance”) to amend several provisions of the Insolvency and Bankruptcy Code, 2016 (the “Code”). Pertinently, section 3 of the Ordinance amended section 7 of the Code by adding three provisos to it. The provisos have limited...
Vacating Directorship in Companies: Examining a Fallacy
[Paras Ahuja is a third year law under-graduate at National law University, Jodhpur] Section 167(1) of the Companies Act, 2013 provides for several grounds that mandate directors of companies to vacate their office. Section 167(1)(a) provides for one such ground, wherein the office of the director shall become vacant if he is disqualified to be a director under section 164 of the Act. Under...
Price Gouging in the Age of Coronavirus: An Analysis of the Regulatory Strategies
[S.S. Shri Lakshmi is a 3rd year student at Hidayatullah National Law University, Raipur (HNLU)] Amidst all the panic caused by the current novel coronavirus (COVID-19), the international economy has suffered a beating. Factories across China have closed, bringing exports to a halt and oil stocks have plummeted due to a drastic cut in travel. At the same time however, specific industries have...
Call for Papers: SRDC ADR Magazine from GNLU
[Announcement on behalf of the GNLU Student Research Development Council] About SRDC The Student Research Development Council (‘SRDC’) was established in 2014 as a platform for students to engage in collaborative academic research and to foster discussion around contemporary research questions in law and allied disciplines. Objective of the SRDC ADR Magazine The ADR Student Research Group, under...
Liability of Key Personnel of Companies under the Indian Competition Law Regime
[Nishant Pande is a IV Year, BA LLB (Hons.) student at NALSAR University of Law, Hyderabad] Personnel at the helm of a company’s decision-making ought to act in furtherance of its best interests. Nevertheless, the actions taken in search of this best interest sometimes bring the company’s practices into the realm of the anti-competitive. To account for such transgressions on behalf of the key...
Call for Papers: NLSIU’s Indian Journal of Law & Technology
[Announcement on behalf of the Indian Journal of Law & Technology] The Indian Journal of Law & Technology (IJLT) is now accepting submissions for Volume 16. Please send in your submissions before April 15, 2020 in order for them to be considered. About the Journal The Indian Journal of Law and Technology (IJLT) is a student-edited, peer-reviewed, completely open access law journal...
Disqualification of Directors: Construing Retrospectivity
[Aditya Singh Chauhan is a B.A. LL.B (Hons.) student at the National Law University, Jodhpur] The Companies Act, 2013 (“Act”), under section 164(2)(a), provides for the disqualification of directors of a company in case they fail to file financial statements and annual returns for a period of at least three (3) consecutive financial years. The provision reads as follows: “No person who is or has...
No Stamp Duty or Registration Fees on Conversion from Public Company to Private Company: H.P. High Court
[Deepika Shori and Madhusudan Bose are Advocates at PRA Law Offices] Stamp duty is ordinarily payable on transfer of movable and immovable properties, and several other specified transactions under stamp duty law. Corporate transactions such as mergers, amalgamations, slump sales and the like are naturally liable to stamp duty because they involve transfer of properties between two entities...
MCA Clarifies on Legal Actions against Outside Directors
Recognizing the specific roles that different directors of a company play, section 149(12) of the Companies Act, 2013 contains a safe harbour provision that protects certain types of directors against liability. It relates to three types of directors, who are, for the sake of convenience, referred to as “outside” directors: (i) an independent director; (ii) a non-executive director who is not a...
Enforcing a Pledge over an Insurance Company’s Shares
A transfer of shares of an insurance company requires the prior approval of the Insurance Development and Regulatory Authority of India (IRDAI) in certain circumstances. Section 6A(4)(b)(iii) of the Insurance Act, 1938 provides: “(4) A public company as aforesaid which carries on life insurance business- … (b) shall not register any transfer of shares … (ii) where, after the transfer, the total...
Reverse CIRP: Reflections on NCLAT’s Legal Experimentation
[Ankit Tripathi is a practicing advocate before the Supreme Court and Delhi High Court and Ravleen Chhabra is a final year student at Institute of Law, Nirma University] A recent ruling of the National Company Law Appellate Tribunal (“NCLAT”) in Flat Buyers Association v. Umang Realtech Pvt. Ltd. comes as a game-changer. It not only affects the existing corporate insolvency resolution process...
Supreme Court Rules on Preferential Transactions in Insolvency
In Anuj Jain v. Axis Bank Limited (26 February 2020), the Supreme Court was concerned with the validity of certain transactions that the corporate debtor carried out in the run up to its insolvency. Briefly, the corporate debtor, Jaypee Infratech Limited (JIL), mortgaged some of its assets in favour of certain and banks and financial institutions for loans they advanced to JIL’s parent company...
Paper on Shareholder Stewardship in India
I have uploaded on SSRN a paper titled “Shareholder Stewardship in India: The Desiderata”, whose abstract is as follows: The goal of this paper is to examine whether the stewardship code, which emanated in circumstances that are specific to the United Kingdom (UK), is capable of transposition to other jurisdictions that experience different corporate structures as well as legal and institutional...
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