[Aditi Nagpal is a 4th year BALLB student at Jindal Global Law School] The Ministry of Corporate Affairs (MCA) released a clarification through its General Circular 14/2020 dated 8 April 2020 which allows for extraordinary general meetings (EGMs) of companies to be conducted virtually. The Circular provides a welcome relief in light of the Covid-19 pandemic, and follows naturally in line...
The (Active) Involvement of Directors during Insolvency Proceedings
[Kushagra Srivastava is a 3rd year B.A.L.L.B. (Hons.) student at National Law Institute University, Bhopal] Section 17(1)(a) of the Insolvency and Bankruptcy Code, 2016 (the “Code”) vests the management of the affairs of a corporate debtor in the interim resolution professional (“IRP”) on the insolvency commencement date in accordance with section 16 of the Code. This implies the imposition of...
Shareholder Ratification for Directors’ Breach of Duty
[Rajat Maloo is a III year B.A., LL.B. (Hons.) student at the National Law School of India University, Bangalore] Common law provides that those to whom duties are owed may release those who owe the duties from their legal obligations. In the corporate law context, this principle has been applied by courts in cases where shareholders ratified directors’ breaches of duties. However, various...
‘Apply and Explain’ – An Alternative Model of Corporate Governance
[Manasvin Andra is a III year student at NALSAR University of Law, Hyderabad] Corporate governance has emerged as one of India Inc.’s primary concerns since the time the Satyam scandal came to light. The incident – dubbed “India’s Enron” – has had a seismic effect on how businesses are regulated, and its effects have been felt most prominently in terms of how corporate governance norms are...
Setting Up To Fail: The Amended Significant Beneficial Ownership Rules
[Ayush Kashyap is a IV year law student at Hidayatullah National Law University, Raipur] The Companies (Significant Beneficial Owners) Amendment Rules, 2019 suffer from a problem relating to the computation of significant beneficial ownership and disclosure requirements thereon. With the compliance deadline for these rules already lapsed, a look at the problem is in order. However, before that, a...
Some Comments on NCLAT’s Ruling in the Tata-Mistry Case
Last week, the National Company Law Appellate Tribunal (NCLAT) pronounced its ruling in the Tata-Mistry case. It held that the removal of Mr. Cyrus Mistry as executive chairman by the board of Tata Sons was illegal, and called for his reinstatement to that position. It also decided that consequential actions taken in the interim, including the appointment of a new executive chairman were illegal...
Delhi High Court Rules on Disqualification of Directors
In order to address the scores of shell companies in existence, the Ministry of Corporate Affairs (MCA) introduced a range of measures in the wake of the 2017 demonetization exercise. One of them pertains to the disqualification of directors in companies that have failed to file financial statements or annual returns for a continuous period of three financial years, as prescribed under section...
Promoter Cannot Initiate Restructuring Scheme for Insolvent Company
In an earlier post, I had noted the revival of the scheme of arrangement as a restructuring tool for companies that have been taken into liquidation under the Insolvency and Bankruptcy Code, 2016 (IBC). In the cases discussed therein, the adjudicatory authorities sought to encourage the parties to use the scheme to attempt a revival of the company before certifying its demise. Among the leading...
Power to Dispense with Meetings of Shareholders and Creditors in a Scheme of Arrangement
[Anirban Chanda is a 4th Year B.A., LL.B. Student at Jindal Global Law School. The author is grateful to Anujay Shrivastava for his inputs] For a very long time, there was an ambiguity regarding the National Company Law Tribunal’s (NCLT) power to dispense with the meetings of shareholders and creditors in an amalgamation or arrangement, especially in a scenario where the ‘majority’ of the...
“Group of Companies” Doctrine & Post-Negotiations in the Context of an Arbitration Agreement
[Achyutha GM and Pranika Correa are students at the Gujarat National Law University] The Supreme Court’s decision in Reckitt Benckiser (India) Pvt. Ltd. v. Reynders Label Printing India Private Limited on 1 July 2019 is a bittersweet journey for the doctrine of “group of companies”. The Court’s refusal to implead the foreign subsidiary saw the doctrine to its true spirit. However, a blanket ban...
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