[Richa Saraf and Shreya Jain are with Vinod Kothari Consultants Pvt. Ltd.] It is not an unusual business practice to collect advance monies from consumers before providing goods or services to them. In such a scenario, consumers constantly bear the risk of not being able to recover the advance amount in the event the provider of goods or services abruptly ceases operations and, as such, also...
Corporate Insolvency and the “Fitter Bidder”
[Jaskiran Kaur is an associate at IndusLaw] The National Company Law Appellate Tribunal (“NCLAT”) on 14 November, 2018 gave a go – ahead to the revised bid of Ultratech Cement Limited (“Ultratech”) for the acquisition of debt-ridden Binani Cement Limited (“Binani Cement”), while ruling that the resolution plan submitted by the competitor Dalmia Bharat through its group firm Rajputana Properties...
Filing of Return for Delayed Payment to MSMEs
[Simran Jalan is an Executive at Vinod Kothari & Co] The Government of India enacted the Micro, Small and Medium Enterprises Development Act, 2006 (the “Act”) to ensure timely and smooth flow of credit to micro, small, and medium enterprises (“MSMEs”) and minimize sickness among them. The Act strengthens the provisions relating to delayed payments to the MSMEs by specifying the maximum credit...
Filing of Form PAS-4 in Private Placements
[Deepansh Guwalani is a 5th year student at ILS Law College, Pune] Introduction Private placement in India is regulated by section 42 of the Companies Act, 2013 (the “Act”) and rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014 (the “Allotment Rules”). The said laws have undergone a recent change by way of the Companies (Amendment) Act, 2017 and the Companies...
Relevant Market in E-commerce: The Dilemma Resolved?
[Samarth Saxena and Mohak Chikhale are Final Year students at ILS Law College, Pune] This post aims to critically analyse a constant conundrum in the Indian antitrust scenario, namely the relevant market analysis in the e-commerce sector. It does so in the context of the order (“Order”) of the Competition Commission of India (“CCI”) in All India Online Vendors Association (“AIOVA”) v. Flipkart...
Price Parallelism in Bid Rigging Arrangements
[Gunjan Garg is a 3rd year B.A LLB (Hons.) student of National Law Institute University, Bhopal] The Indian Competition Act in section 3 deals with ‘anti-competitive agreements’ which gives the Competition Commission of India (“CCI”) the power to prohibit any agreement between enterprises or persons engaged in identical or similar trade of goods and services, directly or indirectly resulting in...
Activation of Companies Struck Off under Companies Act
[Anirudh Singh is a 4thyear B.A LL.B (Hons) student of NALSAR University, Hyderabad] When a company is registered on incorporation, it is necessary that it should have a process of deregistration other than by way of winding up. This is so if, after registration, the company does not carry on business. Such process, known as “striking off”, is specified in section 248 of Companies Act...
Supreme Court on the Applicability of the Limitation Act to Insolvency Proceedings
[Surbhi Jaju and Pulkit Chaturvedi are associates at Lakshmikumaran and Sridharan Attorneys] Introduction The conundrum of whether the Limitation Act, 1963 (‘Limitation Act’) applies to the proceedings initiated under the Insolvency and Bankruptcy Code, 2016 (‘Code’) has confused the stakeholders since the inception of the Code. The Code was formulated primarily to provide a mechanism to...
Prompt Corrective Action
[Manal Shah is a B.A. LL.B. (Hons.) student at the National University of Advanced Legal Studies, Kochi and writes at thesecuritiesblawg.in] Prompt corrective action (“PCA”) is intended to “intervene early and take corrective measures in a timely manner, so as to restore the financial health of banks that are at risk by limiting deterioration in their health and preserving their capital levels”...
Perceiving Data Protection within the Umbrella of Competition Law
[Vishal Singh is a III Year student at Dr. Ram Manohar Lohiya National Law University, Lucknow] The Competition Act, 2002 has been enacted to prevent activities that have an adverse effect on competition in the Indian Market. The Preamble of the Act unambiguously enunciates the role of ‘economic efficiency’ in competition law. The goal of competition law is to build a competitive market and thus...
Supreme Court on Insolvency Resolution by Operational Creditors
[Akhil Kumar and Ayushi Singh are Fourth Year and Third Year BA LLB (Hons.) students respectively at NUALS, Kochi] Petitions filed under section 9 of the Insolvency and Bankruptcy Code, 2016 (the Code) have received scrutiny before the adjudicating authority, being the National Company Law Tribunal (NCLT), the National Company Law Appellate Tribunal (NCLAT) as well as the Supreme Court on various...
Linde- Praxair Merger: Competition Assessment in the Industrial Gas Market
[Vaidehi Soni is a 4thYear B.A., LL.B. (Hons.) student at The National University of Advanced Legal Studies, Kochi] Background Linde Aktiengesellschaft (Linde) and Praxair, Inc. (Praxair), both international gasses and engineering companies primarily active in industrial gases, specialty gases, medical gases, related engineering and services sectors, entered into a business agreement wherein the...
RBI’s Measures for NBFCs and HFCs
[Vineet Ojha is a Manager at Vinod Kothari Consultants Pvt Ltd] In most developed nations, the bond market is often several multiples larger than the equity market. The same cannot be said about the India’s corporate bond market, as it is still underdeveloped and therefore unable to meaningfully share the credit burden of the banking system. To ease the funding strains non-bank lenders face and...
Resolving Ambiguities in CSR Provisions
[Bunny Sehgal is an Associate at Vinod Kothari & Co. and can be reached at [email protected]] With the enactment of the Companies Act, 2013 (‘Act’), India has become one of the leading countries to mandate spending on corporate social responsibility (‘CSR’) activities through a statutory provision. Since then CSR has become a topic of interest for corporates. Further, with the passage...
Call for Papers: NLIU Journal of Intellectual Property Law
[Announcement from the NLIU Journal of Intellectual Property Law] The Cell for Studies in Intellectual Property Rights (CSIPR), incorporated under the aegis of Prof. (Dr.) Ghayur Alam, Chair of IP Law at the National Law Institute University, Bhopal (NLIU), is now accepting submissions for Volume 8 of the NLIU Journal of Intellectual Property Law. About the Journal The NLIU Journal of...
Analyzing the Applicability of GAAR to Schemes of Arrangement
[Varun Kannan is a 4thyear student at NUJS, Kolkata]. In a recent post on this Blog, Prof. Umakanth Varottil has elaborately examined the NCLT decision rejecting the proposed scheme of merger of Gabs Investments Private Limited into Ajanta Pharma Limited. In this post, I shall specifically analyze the applicability of the General Anti-Avoidance Rules (“GAAR”) against a proposed scheme of...
Law on Corporate Opportunity: India at Crossroads
[Angad Singh Makkar is a 4th year BA LLB (Hons.) student at Jindal Global Law School in Sonipat, Haryana] The equitable rule of corporate opportunity, which aims to balance the fiduciary duty owed by a director to the company and the director’s serving of individual entrepreneurial interests, has been varyingly applied across several jurisdictions. Most notably, while the courts in the United...
Retrospective Operation of the Limitation Act: Impact on Insolvency Proceedings
[Vaidehi Soni and Pulkit Khare are 4th year B.A., LL.B. (Hons.) students at The National University of Advanced Legal Studies, Kochi] Background The Insolvency Bankruptcy Code, 2016 (“Code”) allows creditors to approach the adjudicating authority, being the National Company Law Tribunal (“NCLT”), to seek a collective procedure for insolvency resolution. However, there were rising concerns before...
Attachment of Property: Efficacy of the Fugitive Economic Offenders Act in the Backdrop of the Criminal Procedure Code
[Surya Rajkumar is a third year law student at the Jindal Global Law School, Haryana] Introduction The Fugitive Economic Offenders Act, 2018(the “Act”) came into force on the 21 April 2018. According to its preamble, the Act provides “for measures to deter fugitive economic offenders from evading the process of law in India by staying outside the jurisdiction of Indian courts………”. While there are...
Liquidation Process (Second Amendment) Regulations: An Analysis
[Richa Saraf and Devisha Dhanuka are with Vinod Kothari Consultants Private Limited] By way of a notification dated 27 March 2018, the very first amendment was brought to regulation 32 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (“Regulations”) with effect from 1 April 2018 to permit a sale of the corporate debtor as a going concern. The insertion was...
Supreme Court’s Balanced Approach to Damages under Contract Law
[Anujay Shrivastava is a 4th Year B.A., LL.B. (Hons.) student at Jindal Global Law School, Sonipat] Section 73 of the Indian Contract Act, 1872 governs the compensation for damages arising from a breach of contract or failure to discharge obligations resembling those created by contract, while section 74 governs the compensation for damages where penalty is stipulated in the contract. In either...
New Measures to Spur FDI in the Indian Defence Sector
[Bhavin Gada is a Partner and Soumya Shanker a Senior Associate at M/s Economic Laws Practice, Advocates and Solicitors. The views of the authors are personal] Timeline of Liberalisation of FDI Regime From 2000 to 2016, foreign investment in the Indian defence sector has been approximately USD 5.12 million. Looking at the total foreign investment inflows to India, one could say that this...
The Common Ownerships Conundrum
[Parag Srivastava and Poonam Pal Sharma are members of the law firm Nishith Desai Associates. The views represented in this post are strictly personal and do not represent the views of the firm] The insidious yet hitherto unspoken subject of horizontal shareholders has been in recent limelight due to its mention in the order by the Competition Commission of India (“CCI”) in its Ola Meru Cabs Case...
NCLT on Scheme of Arrangement and Tax Avoidance
Background Schemes of arrangement have been a useful method of implementing mergers and acquisitions in the Indian context. Historically under the Companies Act, 1956, schemes were supervised by the High Courts, but the Companies Act, 2013 conferred that jurisdiction upon the National Company Law Tribunal (NCLT). Under the regime set forth in the 1956 Act, the High Courts had adopted a largely...
Payments Regulatory Board: Merits and Criticisms
[Tishya Saran and Aayush Grover are both 5th year students of Government Law College, Mumbai] Introduction The Reserve Bank of India (“RBI”) and the Central Government seem to be embroiled in a regulatory tussle. It all started when an Inter-Ministerial Committee (the “Committee”) set up by the Department of Economic Affairs, in a report published by it (the “Report”), proposed the establishment...
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