TagCompany Law

Enhanced Minimum Amount of Default under IBC – Retrospective or Prospective?

[Ashwin Bala Someshwerar is an LL.M. Student at TNNLU, Tiruchirappalli, Tamil Nadu.] The Ministry of Corporate Affairs (MCA) issued a notification on 24 March 2020 (hereafter, ‘the notification’) enhancing the minimum amount of default under the proviso to section 4 of the Insolvency and Bankruptcy Code, 2016 (IBC) from one lakh rupees to one crore rupees. The notification does not mention the...

NCLAT Clarifies the Degree of Intervention in a Scheme of Reduction of Capital

[Aastha Bhandari is a fourth-year student at Jindal Global Law School] On 28 July, 2022 the National Company Law Appellate Tribunal (“NCLAT”) passed its judgement in Precious Energy Services Limited v. Regional Director, holding that the negative financials of a company vis-à-vis its net worth and book value per share do not hold any relevance in determining whether the company possesses...

Cox and Kings Judgment: Revisiting the Group of Companies Doctrine

[Natasha Matange and Dharmvir Brahmbhatt are 4th and 5th year students at Gujarat National Law University, Gandhinagar] Arbitration has been growing as a method of dispute resolution in recent years both in India and abroad. It is more formal than mediation, yet has certain procedural similarities to litigation. The essence of arbitration is rightly considered to be consent. It is recognised by...

Analyzing the Business Judgement Doctrine in the Indian Context

[Dhvani Shah is a penultimate year student at Gujarat National Law University] In January 2022, the Rajasthan High Court stayed trial court proceedings against Mr. Pratip Chaudhuri, ex-SBI Chairman, for an alleged bank loan scam. Mr. Chaudhuri was arbitrarily arrested for discrepancy in the sale of a non-performing asset (NPA) of the bank, i.e., the “Garh Rajwada hotel” to the Alchemist Asset...

Ratification of Director’s Breach of Duty: Opportunity to Evade Liability?

[Arjun Tyagi is a fourth year B.A., LL.B. (Hons.) student at National Law University Odisha.] Directors of companies owe fiduciary and ‘statutory’ (section 166 of the Companies Act 2013) duties to the company, its employees and the shareholders. Common law principles provide ratification of breach of duty by directors, if the shareholders pass a resolution agreeing to absolve directors from...

Covid-19 and Company Law: The Impact of Digitalisation

[Dharini Shanker is a 1st Year LL.B student at Campus Law Centre, University of Delhi] The Company Law Committee (“Committee”), set up to make recommendations to the Government for reforms directed at promoting greater ease of business in India and the effective implementation of the Companies Act, 2013 (“Act”), the LLP Act, 2008 and the Rules made thereunder, has submitted its report in March...

Should India Allow Fractional Share Investing?

[Ajith Kidambi is a V year student at the NALSAR University of Law, Hyderabad] Fractional share investing could finally be a reality in the Indian stock market. The Company Law Committee, which the Ministry of Corporate Affairs constituted in 2019, had released its third report in April 2022, making several recommendations to the government to improve the ease of doing business in India and...

Duomatic Principle: Neither Mere Substantial Compliance nor a Normative Right

[Sahil Aggarwal is a 4th year B.A., LL.B. (Hons.) student at National Academy of Legal Research and Studies (NALSAR), in Hyderabad and Akshat Baghmar is a 5th year B.A., LL.B. (Hons.) student at Maharashtra National Law University, Aurangabad] In its recent judgment in Mahima Datla v. Dr. Renuka Datla (2022), the Supreme Court reaffirmed the application of the ‘Duomatic’ principle in Indian...

Can Government Companies be Brought under the Aegis of the IBC?

[Shradha Sharma is a banking and finance lawyer at a law firm in India] Government companies are defined under section 2(45) of the Companies Act, 2013 (“Act”) to mean any company in which not less than 51 percent of the paid-up share capital is held by the central government or state government(s), or partly by the central government and partly by one or more state governments, and includes the...

Lost in a Labyrinth: NCLT’s Journey from Admission to Withdrawal under the IBC

[Siddharth Jasrotia is a IV year student at the Maharashtra National Law University, Mumbai] The National Company Law Tribunal’s (“NCLT”) power to allow the withdrawal of insolvency petition has been subject to immense judicial scrutiny over the past few years, often resulting in conflicting outcomes. The inception of section 12-A in the Insolvency and Bankruptcy Code, 2016 (“IBC”) further...

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