Blog Posts
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DIPP issues draft “Master Press Note”
The Department of Industrial Policy and Promotion has issued a draft Press Note dated 24th December 2010 (“PN”) that is similar to the Master Circulars that we have on FEMA issued by the Reserve Bank of India. This 66 page Press Note is only a draft and comments are invited by 31st January 2010 after…
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The RTI and Income Tax Returns
The recent decision of the Central Information Commission in the Escorts case, has led to many raised eyebrows. In sum, the CIC held in Mr. Rakesh Gupta v. Public Information Officers (Decision No. CIC/LS/A/2009/000647/SG/5887, available here), that the information submitted to the Income Tax Department by a company cannot be personal information, and even personal…
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Bad Debts, Commercial Judgment and Taxation
We have discussed the controversy in Indian law surrounding the treatment of bad debts. In short, it has traditionally revolved around two questions. The first pertained to the extent to which commercial reality could influence the determination of taxable income. In particular, banks began to account interest on non-performing assets [“NPA”] or “loans” in a…
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Bombay High Court on the Entry of Foreign Law Firms
The Bombay High Court (Swatanter Kumar C.J. and J.P. Devdhar J.) has held that foreign law firms are not eligible to practice law in India even in a non-litigation context. Foreign law firms are also not entitled to open liaison offices in India. The case is Lawyers Collective v. Bar Council of India and Others,…
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Foreign Collaboration and Royalty Payments
Hitherto, Indian companies were allowed to make royalty payments to their foreign collaborators under the automatic route within certain limits. These involved payment for technology transfers of a lump sum fee of US$ 2 million and royalty of 5% on domestic sales and 2% for exports. Where no technology transfer was involved, royalty of up…
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More Suggestions for Governance Reforms
When the financial fraud at Satyam occurred nearly a year ago, there was tremendous anticipation of swiftly regulatory activity to follow in terms of reforms to corporate governance norms. But, that was not to be. Any hopes were only dampened when it was announced that the Companies Bill (drafted in the previous year) would be…
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Changes to ECB Policy
The Reserve Bank of India (RBI) last week announced changes to the policy governing external commercial borrowings (ECBs). This represents a reversal on two counts: 1. The all-in-cost ceilings, which were withdrawn about a year ago, have been reintroduced “in view of the improvement in the credit market conditions and narrowing credit spreads in the…
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SEBI Order on Participatory Notes
Just when it appeared that the din surrounding offshore derivative instruments (ODIs) and participatory notes (PNs) had subsided, the significance of regulating these instruments has resurfaced in an order passed by SEBI yesterday in the case of Barclays Bank PLC, a foreign institutional investor (FII) registered with SEBI. By this order, Barclays has been prohibited…
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“Consent in writing” and Standing for Oppression and Mismanagement: Section 399(3)
Having discussed the apparent relaxation in standing requirements under Section 399(1), this post will now consider what the requirements under Section 399(3) are. In particular, the effect of the Justice Ruma Pal’s decision in J.P. Srivastava v. Gwalior Sugars will be considered. Section 399(3) states: 3) Where any members of a company are entitled to…
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Locus Standi for Oppression and Mismanagement: Dilution of Section 399(1)
Remedies for oppression and mismanagement under Section 397 and 398 of the Companies Act, 1956 provide for some relief to shareholders. However, in order to invoke the provisions of Sections 397/398, the petitioners must demonstrate their standing under Section 399. Section 399, which deals with the right to apply under Sections 397 and 398, says…
