By Swaroop George The recent order dated May 4, 2018, of the National Company Law Tribunal at Kolkata, dealing with various applications in C.P.(IB) No.359/KB/2017 with regard to the Corporate Insolvency Resolution Process of Binani Cements has brought to light the plight of operational creditors and their lack of influence in the insolvency process. Once the Corporate Insolvency Resolution Process is initiated, the Interim Resolution Professional collects and verifies the claims of various debtors and constitutes a Committee of Creditors. The Committee of Creditors is the linchpin of the Corporate Insolvency Resolution Process and all major decisions are routed via […]

Ashish Kabra and Mohammad Kamran Highlights of the Amendment Minimum Value of dispute (pecuniary jurisdiction) reduced to INR 3,00,000/- Commercial courts split in two – (i) District Judge Level & Below District Judge Level Commercial Appellate Courts introduced Mandatory pre-institution mediation prescribed Government to appoint commercial court judges The Government, on May 3, 2018, promulgated an Ordinance (Ordinance) amending the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (Act). These amendments are an attempt to expand the scope of commercial courts in India. They will also contribute towards improving India’s ranking on the ‘ease of […]

By Shanmugham D Jayan A coherent and consistent ideology is the bedrock of a successful legal system. The success of a rule is nothing but acceptance of the ruler’s law by the subjects. From suo moto acceptance of fended subjects emerges the lasting sustenance of a particular rule. This acceptance is a direct function of the underlying ideology and its continued coherence. Take any modern Constitution. The attempted concept of division of powers has, to a great extent, ensured that judiciary determines what the essence of the underlying ideology of a given Constitution is. Any deviation by Constitutional courts, either […]

By Jolly Abraham Ultratech and Rajputana Properties were among the resolution applicants for Binani Cement. Based on evaluation criteria specified in a process document provided to all persons who had submitted an expression of interest to the resolution professional for Binani Cement (RP) and following the timelines specified in such process document, Rajputana Properties’ resolution plan was selected by the committee of creditors of Binani Cement (CoC) as H1 and Ultratech’s was not. Long after the date specified in the process documents as the last date for submission of resolution plans (Relevant Date) and after Rajputana Properties was declared H1, […]

By Aayush Mitruka One of the reasons why the Insolvency and Bankruptcy Code, 2016 (the Code) is being regarded as the path-breaking legislation is because unlike its predecessors it prescribes tight timelines for resolution of sick companies. The relevant provision of the Code provides that the resolution process must be completed within 180 days, which is extendable, in certain cases, up to 90 days. The stressed asset managers at financial firms as well as asset reconstruction specialists suggested the Bankruptcy Law Reform Committee that 180 days would be a reasonable time to evaluate a stressed entity and propose a solution […]

Pavan Narang Recently, the Delhi High Court, in its judgment titled Rajbhushan Omprakash Dixit v. UOI, referred to a larger Bench certain important questions of law that need to be settled. One of the questions referred is “Do the provisions of Chapter XII Cr.P.C. apply to Prevention of Money Laundering Act (PMLA) insofar as offences under PMLA are concerned and if so, to what extent?” Although it has been held in a spate of judgments that courts have powers to remand the accused arrested by officers of the Enforcement Directorate (ED) under PMLA, they have failed to address the more fundamental issue […]

By Aditya Swarup The past few months in India have witnessed the admission of insolvency petitions of some high value companies, including Essar Steel and Videocon Industries. Such companies may have assets in jurisdictions outside India and one of the crucial questions that arises is the treatment of these assets. The problem is attenuated by the nature of the assets in question. A company may operate in a foreign jurisdiction through local subsidiaries or branches/offices. It may also have physical assets in such foreign jurisdiction. In the former case, each subsidiary is a separate legal entity and the winding up/insolvency […]

By Nikita Chawla and Aashka Shah The Reserve Bank of India (“RBI”) on 12th March 2018, issued the Hedging of Commodity Price Risk and Freight Risk in Overseas Market (Reserve Bank) Directions, 2018 (“Commodity Hedging Directions”). These Commodity Hedging Directions revamp considerable portion of the present laws in relation to commodity derivative transactions being undertaken on a cross border basis. This also withdraws previous circulars issued by the regulator in relation to such commodity derivative transactions. Brief background The RBI has always followed a cautious approach in relation to commodity hedging. In 2003, RBI had permitted only those residents in […]

The Union Cabinet has cleared the Arbitration and Conciliation (Amendment) Bill 2018. It will now have to be put before Parliament. The Bill according to a Government press release, is meant to encourage institutional arbitration and provide for a robust Alternative Dispute Resolution (ADR) mechanism in India. An important feature of the Bill, is that it envisages the establishment of an independent body . . . Facebook Comment To read the entire article, get a premium account With a premium account you get: One year of unrestrcited access to previous interviews, columns and articles One year access to all archival […]

By Puneet Shah With the rising concerns over misuse of black money in financing illegal activities and with an objective to tackle the issue of benami properties, the recently enacted Companies Amendment Act, 2017 (Amendment Act) has introduced a new definition of term ‘beneficial interest’. Beneficial interest in shares of a company has been defined to mean right to exercise any or all rights attached to such shares; or right to receive or participate in any dividend or other distributions in respect of such shares. The idea seems to track the persons who are ultimately exercising rights over such shares […]

While the Supreme Court has, on more than one occasion, allowed settlement after admission of cases under the Insolvency and Bankruptcy Code, 2016 (IBC), it has done so with a caveat that the tribunals don’t have inherent powers to do so. The Supreme Court under Article 142 of the Constitution has the power to “pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it.” But the NCLT and NCLAT don’t. The first time this question arose before the NCLAT, was in the case of Lokhandwala Kataria Construction, where the […]

By Kanwardeep Singh On 10 January 2018, nine (9) years after the Satyam scandal hit Indian Inc., Securities & Exchange Board of India (SEBI) has passed the Order pursuant to which a slew of directions have been issued against the global accountancy firm PW and its network entities in India. The directions, among others, include prohibiting PW and its network entities in India from issuing audit certificates to any listed company in India for a period of two years (prohibition not to be applicable to audit assignments that relate to the financial year 2017-2018). A substantial portion of the 108 […]

In the democratic process, Parliamentary Questions are important tools to hold ruling dispensations accountable for their policies. They also serve to bridge the gap between the common man and the government he might have helped elect, and are used to gauge the performance of a Member of Parliament. Quite often, Question Hour is the most interesting part of a Lok Sabha or Rajya Sabha session. But apart from providing entertainment, the first hour of a session also reveals important information on how the government aims to tackle the problems faced by the people. As the Winter Session of 2017 kicks […]

By Sakal Bhushan For invoking insolvency proceedings against a corporate debtor, an operational creditor is required to issue a notice of demand under Section 8(1) of the Insolvency and Bankruptcy Code, 2016 (IBC). Then under Section 8(2)(a) of IBC, the corporate debtor shall within 10 days of the receipt of that notice bring to the notice of the operational creditor “existence of dispute, if any, and record of the pendency of the suit or arbitration proceedings filed before the receipt of such notice or invoice in relation to such dispute”. This portion of the statute was interpreted by the NCLAT in […]

All is not well with India’s Armed Forces Tribunals (AFT). Highly placed sources reveal that the Principal Bench at Delhi, as well as several Regional Benches across the country, are operating at a mere 25-30 per cent capacity owing to a shortage of members. This problem, coupled with legal challenges to the functioning of the Tribunal, among other things, are proving to be spokes in the wheel of the Armed Forces Tribunal Act 2007, which aimed at ensuring speedy dispensation of justice to members of the country’s Armed Forces. Tuesday saw the Bar of the AFT Chennai Region paying rich […]

Somasekhar Sundaresan The Law Commission has published a report titled Assessment of Statutory Frameworks of Tribunals in India. While the report is a response to five specific issues referred to the Commission by the Supreme Court last year, it promises to be a catalyst to a new debate on the legitimacy of the tribunal framework that has come to dominate justice delivery in India. First, while repeated constitutional challenges to the creation of tribunals have met with mixed results, with the institution of tribunals largely being upheld (with tweaks to composition and manner of appointment), one fundamental issue has eluded […]

By Harini Subramani The Reserve Bank of India’s notification on peer to peer (P2P) lending issued on October 4 this year (“Regulations”) seems to have only added an element of ambiguity in the minds of stakeholders. Eighteen months since the RBI issued the consultation paper and it is not certain how and whether stakeholder comments have been internalised in the paper. In fact, a few concerns were discussed in a recent call organised by the Digital Lenders Association of India (DLAI) involving stakeholders. Primary among these include the scope of these Regulations, who exactly it aims to cover and the commercial […]

Aankhi Ghosh “It is more important that innocence be protected than it is that guilt be punished, for guilt and crimes are so frequent in this world that they cannot all be punished. But if innocence itself is brought to the bar and condemned, perhaps to die, then the citizen will say, ‘whether I do good or whether I do evil is immaterial, for innocence itself is no protection,’ and if such an idea as that were to take hold in the mind of the citizen that would be the end of security whatsoever.”  These words of immense wisdom by […]

By Shanmugham D Jayan Article 12 of Indian Constitution has undergone a series of interpretations with myriad logic and reasons being used for giving meaning to the content of the Article. Presently, majority of the books on Constitutional law cite the decision in Ajay Hasia v. Khalid Mujib Sehravardi (AIR 1981 SC 487) as the decisive one with respect to interpretation of Article 12. However, if one takes the pain to traverse the case laws that have been relied for the conclusion arrived at in the said case, certain unexpected but interesting facts can be discerned. As mentioned earlier, right […]

Sumit Agrawal The introduction of Goods and Services Tax (GST) is one of the biggest tax reforms in India. A “Dual GST” model has been adopted under the Constitution of India, whereby Centre and States will simultaneously levy GST on every supply of goods or services or both which takes place within a State or a Union Territory. Therefore, given the federal structure of Indian democracy under the Constitution, there are three enactments pertaining to GST: Central tax (CGST) (levied & collected under the authority of Central Goods and Services Tax Act, 2017) State tax (SGST) (levied & collected under […]

By Dr. Amit George The recent judgment of the National Company Law Tribunal (‘NCLAT’) in Kirusa Software Private Ltd. v. Mobilox Innovations Private Ltd. [Judgment dated 24.05.2017 in Company Appeal (AT) (Insolvency) 6 of 2017] has been welcomed for having provided an authoritative pronouncement on the meaning of the terms ‘dispute’ and ‘existence of dispute’ as appearing in Sections 8 and 9 of the Insolvency & Bankruptcy Code, 2016 (‘Insolvency Code’). While the judgment provides some much needed definitional clarity on certain fundamental concepts that lie at the very heart of the Insolvency Code, it is relevant to take note […]

Satvik Varma & Vikrant Pachnanda The Director General of Civil Aviation (DGCA), India’s aviation watchdog, recently issued a Civil Aviation Requirement (CAR) regarding handling of unruly/disruptive passengers. Issued under the Aircraft Rules, 1937 and framed in pursuance of the Indian Aircraft Act, 1934, the CAR acknowledges that unruly behavior of any sort, on board an aircraft or during embarkation/disembarkation, interferes with the performance of crew members’ duties. It also notes that such disruptive behavior jeopardizes the safety of the aircraft, the persons on board and most importantly, affects good order and discipline on a plane. Recognizing the potential harm, any […]

by Puneet Shah A cross border merger refers to the merger of two or more companies in different countries for scaling economies, efficiency, competing and strategic objectives. The Reserve Bank of India (RBI) late last month has issued draft regulations [pdf . . . Facebook Comment To read the entire article, get a premium account With a premium account you get: One year of unrestrcited access to previous interviews, columns and articles One year access to all archival material Access to all Bar & Bench reports Register Already a subscriber ? Login

By Kanika Satyan and Manas Ingle Technology has changed the way human beings lead their day-to-day life. The influence technology has had, especially on the gaming and entertainment sector, whether for the positive or for the negative, has changed the perspective of gaming and entertainment all across the world. From enabling us to play real life games and sports virtually, the innovations in this sector are now enabling us to play virtual games in real life environments. Such developments have been brought about by technological . . . Facebook Comment To read the entire article, get a premium account With a premium […]

By Shashank Prabhakar The Finance Act, 2017 which has been passed by both the houses of Parliament and which was assented to by the President of India on April 3, 2017, has amended certain provisions of the SEBI Act, 1992 (“SEBI Act”) and the Securities Contracts (Regulation) Act, 1956 (“SCRA”). Here we are only concerned with the amendments carried out to Section 15J and Section 23J of the SEBI Act and the SCRA, respectively. The interpretation of Section 15J of the SEBI Act was a substantial question of law in two recent Supreme Court cases, namely, SEBI v. Roofit Industries […]

The recent push by the central government in making Aadhaar mandatory for several government schemes has met with widespread criticism from various sections of the society, including activists, lawyers, policy professionals and journalists. Just yesterday, amendments were introduced in the Finance Bill, 2017 to make Aadhaar mandatory for filing of income-tax returns as well for obtaining and retaining the permanent account number (PAN).

By Ankit Sinha and Harshit Dusad The world has witnessed recurrent instances of cyber attacks in the recent past. These cyber attacks have raised eyebrows on the reliability of the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) messaging network, as most of the cyber attacks occasioned from the infiltration of SWIFT by hackers. Although steps for improving cyber resilience have been taken by jurisdictions across the world, in wake of continuous technological advancement, the cases of cyber attacks are on the rise. Given . . . Facebook Comment To read the entire article, get a premium account With a premium account […]

by Shashank Prabhakar SEBI has issued yet another circular on March 10, 2017, for regulating schemes of arrangement by listed entities. This is the fourth circular on this subject that has been issued by SEBI in as many years. First, there was the circular dated February 4, 2013, which was substantially revised by another circular that was issued in quick succession on May 21, 2013. Then there was the circular dated November 30, 2015 (“Erstwhile Circular”) which . . . Facebook Comment To read the entire article, get a premium account With a premium account you get: One year of […]

by Sumit Agrawal The Insolvency and Bankruptcy Board of India (IBBI) was established on October 1, 2016 in accordance with the provisions of The Insolvency and Bankruptcy Code, 2016. Within a short span of five months of its establishment, Dr. M S Sahoo, Chairman of IBBI has issued first regulatory order last week. The order has been issued in an application under regulation 6 of

 – Sumit Agrawal & Vaneesa Agrawal The Union Budget 2017 has brought about some major changes for the capital markets. We look at the most important ones in this article. 1. Deepening of the Commodities Market In the Union Budget of 2015-16, the Government had announced the merger of the Securities & Exchange Board of India (SEBI) and the Forward Market . . . Facebook Comment To read the entire article, get a premium account With a premium account you get: One year of unrestrcited access to previous interviews, columns and articles One year access to all archival material Access to […]