[Subodh Asthana and Madhur Bhatt are 3rd year B.A., LL.B. (Hons.) students at Hidayatullah National Law University, Raipur.] Section 279 of the Companies Act 2013 [“Act”] envisages that no legal proceedings shall be admitted if the winding up petition of a company has been accepted by the court or the liquidation proceedings have begun. The article seeks to clarify whether an application to...
Supreme Court on Directors’ Duties in the Tata/Mistry Case: A Critique
On 26 March 2021, the Supreme Court of India pronounced its much-awaited ruling in Tata Consultancy Services Limited v. Cyrus Investments Pvt. Ltd. The Court found that the allegations of oppression and prejudice raised by the Mistry group could not be sustained, and hence declined to grant any relief. It answered all the legal questions raised in favour of the Tata group. In a sense, this forces...
Fragmented Framework for Perfection of Security Interest: A Secured Creditor’s Nightmare?
[Sikha Bansal is a Partner and Siddharth Goel a Legal Advisor at Vinod Kothari & Company] An interesting question of law came up for consideration by way of appeal before National Company Law Appellate Tribunal (NCLAT) in Volkswagen Finance Private Limited v. Shree Balaji Printopack Pvt. Ltd . The brief facts of the case involved a car financing company, which extended a car loan to the...
The Future of Virtual Meetings under the Companies Act
[Gaurav Pingle is a Practising Company Secretary and Renucka Vaiddya a Research Associate at Gaurav Pingle & Associates] The Companies Act, 2013 has, at the outset, provided for conducting board meetings through video conferencing. In Achintya Kumar Barua v Ranjit Barthkur [2018] 91 taxmann.com 123, the National Company Law Appellate Tribunal (NCLAT) held section 173(2) of the Act read with...
Tug of War between Nominee and Legal Heir: The Debate Continues
[Abolee Vilas Vaidya is a Legal Analyst at Landryt and Priyanka Pillai an Associate at IC Universal Legal, Mumbai] The tussle between nominees and legal heirs in respect of shares of a company has always been a cause of sizeable confusion. The solution may seem to be a simple determination of whether the rights of the nominee under section 72 of the Companies Act, 2013 can override the rights of...
Paper on Shareholder Remedies: Oppression, Prejudice and Mismanagement
Under company law, shareholders (particularly the minority) can resort to various remedies prescribed thereunder, such as oppression, prejudice and mismanagement. While Indian company law has incorporated versions of shareholder remedies since the mid-20th century, the design of the remedies as they currently operate finds place in sections 241 and 242 of the Companies Act, 2013 (the “2013 Act”)...
Hybrid Companies: Lacunae in the Tata-Mistry Decision
[Umang Pathak is a 4th year B.B.A., L.L.B. (Hons.) student at Jindal Global Law School in Sonipat, Haryana] The National Company Law Appellate Tribunal (‘NCLAT’), in its decision in Cyrus Investments Pvt. Ltd. v Tata Sons Ltd., had decided the on the question of mismanagement and oppression which purportedly impacted the internal democracy of Tata Sons Limited (‘TSL’) and its accountability...
SAT on the Nature of Offering of Fully Convertible Debentures
[Aastha Agarwalla is a 2nd year law LLB student at the Campus Law Centre. Faculty of Law, University of Delhi] In order to streamline the process for access to capital for a company, the Companies Act, 2013 prescribes various funding options by issuing various kinds of securities. Depending upon the specific circumstances and requirements, a company pursues a viable financing option ranging from...
Application of Section 29A of the IBC to Schemes of Arrangement
[Nipuna Varman is a student at the NALSAR University of Law, Hyderabad and Lalitha Nandula a student at the Gujarat National Law University, Gandhinagar] The Insolvency and Bankruptcy Code 2016 (IBC) focuses on two aspects, i.e., the corporate insolvency resolution process (CIRP) and the liquidation process. The CIRP is prescribed for the revival of the corporate debtor. Under the IBC, the focal...
Debarment of Company Auditor: A Cursory Death Note
[Shubham Nahata is a 3rd year student of Hidayatullah National Law University] Chapter X of the Companies Act, 2013 contains provisions for regulating audit and auditors of the companies. Among other things, the chapter deals with the appointment, removal, disqualifications, and resignation of company auditors. Recently, the Bombay High Court in N. Sampath Ganesh v. Union of India dealt with the...
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