COURTS THIS MONTH
- The Supreme Court issued Notice in Amazon’s Plea against the Division Bench Order of the Delhi High Court which had stayed its Single Bench’s direction to maintain status quo in the Reliance-Future Retail Sale. The issue revolves around the retail stake sale of Future Retail Ltd. to Reliance Industries valued at INR 25000 Crores approximately. The Supreme Court further observed that they would refrain from commenting on the merits of the case. However, it allowed the amalgamation proceedings to continue before the National Company Law Tribunal (“NCLT”) with a pre-condition that the same would not result into any conclusive sanctioning of the scheme.
- The Apex Court in State of Andhra Pradesh Vs. Dinavahi Lakshmi Kameswari (Civil Appeal No. 399 of 2021) observed that salaries and pensions are rightful entitlements of Government employees and are payable in accordance with law. The Hon’ble Court also observed that the State Government which has stalled in the payment of salaries and pensions should be directed to pay interest at an appropriate rate. The State of Andhra Pradesh in the present case had restricted its challenge only to the component of interest before the Apex Court.
- The Supreme Court’s Bench comprising of Justice L. Nageswara Rao and Justice S. Ravindra Bhat in Najiya Neermunda vs. Kunhitharuvai Memorial Charitable Trust (Civil Appeal No. 606-616 of 2021) observed that the regulation of fees for MBBS students in self-financing private medical colleges comes within the purview of the Admission and Fee Regulatory Committee of the respective States. It was held that the Committee shall at all times ensure that the fee levied is not unreasonable and exploitative. It can also further direct the management to furnish such details/information in order to establish that the fee levied is fair and not excessive.
- The Supreme Court recently held that parties are entitled to a refund of Court Fees in case they privately agree to settle disputes without intervention of Court as per Section 89 of Civil Procedure Code, 1908 (“CPC”). The Supreme Court made the said observation in High Court of Judicature at Madras vs. M.C. Subramaniam (SLP (Civil) NOS. 30633064 of 2021).
- The judgement stated that when the Court refers parties to any of the modes of settlement as enshrined under Section 89 CPC, the fee paid shall be refundable in case such settlement is arrived at by the parties, privately. In the circumstances, the refund shall not be subject to whether the dispute was resolved or not by resorting to such mode. Section 89 CPC, entails four modes of settlement such as arbitration, conciliation, judicial settlement including settlement through Lok Adalats or mediation.
- Pre-deposit of decretal amount is to be mandatorily complied with before the Debt Recovery Appellate Tribunal, observed the Supreme Court in Kotak Mahindra Bank Pvt. Ltd. Vs. Ambuj A. Kasliwal & Ors. (Civil Appeal 538 of 2021). The amount to be deposited in all cases is 50% (Fifty Percent) of the decretal amount or value of the debt. However, in appropriate circumstances the percentage of deposit could be reduced to 25% (Twenty-Five Percent) subject to reasons recorded in writing, in pursuance of the same. The Court also made clear observations that no circumstances can possibly lead to the waiver of the said payment entirely as per Section 21 of the Recovery of Debts and Bankruptcy Act, 1993.
- The Supreme Court’s Bench comprising of Justice L. Nageswara Rao and Justice Indira Banerjee observed in Anmol Kumar Tiwari vs. State of Jharkhand (Civil Appeal Nos. 429-430 of 2021) that appointment of persons in public employment posts with lesser merit at the cost of those who have secured more marks would be in violation of Articles 14 and 16 of the Constitution of India. It further observed that the selection to public employment should be merit-based. The Appellants in this case consisted of public officials working in the Home Affairs Department of the Government of Jharkhand. The said officials were removed and terminated from their services on the ground that the list appointing them was prepared erroneously ignoring candidates with better scores.
- A Bench comprising of Justice Indira Banerjee and Justice Hemant Gupta reaffirmed the already settled position of law that a suspicion, no matter how strong can never take place of proof in a court of law. The Hon’ble Court proceeded on the age-old legal premise that an “Accused is innocent unless proven guilty beyond reasonable doubt”. The Supreme Court in State of Odisha vs. Banabihari Mohapatra (Special Leave Petition (Crl.) No.1156/2021) held the aforesaid while upholding the acquittal of a murder accused.
- The Supreme Court vide its judgement dated 19.02.2021 in Amitabha Dasgupta vs. United Bank of India (Civil Appeal No. 3966 of 2010) stated that Banks should exercise due diligence in maintaining and operating their locker facilities. The Hon’ble Court held that Banks cannot wash off their hands and claim that they have no liabilities towards customers operating locker facilities. The Hon’ble Court has directed the Reserve Bank of India (“RBI”) to lay down rules and regulations and take necessary steps towards implementation of the same. The Court also upheld the National Consumer Dispute Redressal Commission’s stance that the complainant may file a separate suit before the competent civil court for seeking relief in case of items are amiss from his/her bank lockers.
- Bombay High Court while rejecting the Bail Application of Yes Bank Promoter, Mr. Rana Kapoor, made an important observation that effective and honest governance of financial institutions is critical to the functioning of the economy. Mr. Rana Kapoor, has been primarily accused in the money laundering scam amounting to approximately INR 5050 Crores being looked into by the Enforcement Directorate.
- Justice Sabyasachi Bhattacharya of Calcutta High Court held that a Writ Petition under Article 226 of the Constitution, is maintainable in so far as it questions the jurisdiction of NCLT in Insolvency proceedings. The same could be entertained even if alternative remedies are available to address the same. The High Court relied on Supreme Court’s ruling in Embassy Property Developments Pvt. Ltd. Vs. State of Karnataka & Ors., (2020)4 CompLJ1 (SC) which put forth the position of law that issues regarding lack and/or wrongful exercise of jurisdiction could be taken into consideration under Article 226 of the Constitution before the High Courts.
- A single judge Bench of Justice Pratibha Singh of the Delhi High Court observed that not having any provision for Advocates to be enrolled as professionals in the Ministry of Corporate Affairs (“MCA”) portal is a discriminatory practise. The plea was filed by the petitioner seeking directions to make necessary modifications on the MCA portal to facilitate lawyers in terms of registration as a professional and perform various lawful duties such as uploading of digital certificates, documents related to incorporation, etc. The observation was made in Shikha Sharma Bagga Vs. UOI & Anr. (W.P. (C) 1665/2021 & CM APPL 4747/2021).
- The MCA vide its Notification G.S.R. 91(E) brought into force the amendment to the Companies (Incorporation) Rules, 2014. The said amendment is to incentivise the incorporation of One Person Companies (“OPC”) under the Companies Act, 2013. Some of the salient features of these amendments include a) permitting any natural person whether a resident of India or otherwise to form an OPC b) reducing the residency period from 182 days to 120 days for Non-Resident Indians c) necessary modifications in conversion of OPC to a Private or Public Limited Company. The Notification also replaces the already existing Form INC-5 with Form INC-6.
- The Companies (Compromises, Arrangement and Amalgamations) Amendment, 2021 was brought into effect vide Notification dated 01.02.2021 bearing No. G.S.R. 93(E). The Notification provides for fast-track mergers of start-up companies and small companies. For the purposes of this amendment, “Start-up Company” shall mean a Private Company incorporated under the Companies Act, 2013 or Companies Act, 1956 and recognised as such in accordance with Notification No. G.S.R. 127 (E), dated 19.02.2019 issued by the Department for Promotion of Industry and Internal Trade.
- The MCA has notified the Producer Company Rules, 2021 in supersession of the Producer Companies (General Reserve) Rules, 2003. The aforementioned rules will be appliable to a Company registered as a Producer Company under the Companies Act, 2013. The Rules provide for provisions for change of registered office of the said Company from one state to another and also specifies scope for investment of its general reserves.
- Vide Notification bearing no. RBI/2020-21/89 DOR.CRG.CRS. Cir. No.5/13.05.000/2020-21, the RBI has mandated that all Primary Urban Co-operative Banks (“UBC’s) shall not make, extend or renew any loans or advances to their Directors or their relative or to firms/companies/concerns in which Directors or their relatives or the firms/companies/concerns in which the Directors or their relatives are interested shall also not stand as surety/guarantor to the loans and advances or any other financial accommodation sanctioned by UCBs. The Notification also provides a host of exceptions to certain ‘loans and advances’, to which the Notification shall not apply such as regular employees – related loans to Staff Directors, normal employee related loans to Managing Directors etc.
- RBI vide Notification bearing no. RBI/2020-21/73 DOR.FIN.HFC.CC. No.120/03.10.136/2020-21, issued a Master Direction on Non Banking Financial Company– Housing Finance Company (Reserve Bank) Directions, 2021. By way of this Notification, RBI issued a plethora of directions concerning minimum levels of liquidity coverage ratio, risk management, asset classification, etc. in order to prevent Housing Finance Companies from acting in a manner that is detrimental to the interest of its investors.
- Vide Notification bearing No. RBI/2020-21/74 DoS. CO. CSITE. SEC. No.1852/31.01.015/2020-21, RBI has issued a Master Direction on Digital Payment Security Controls. The aforementioned guidelines seek to implement a minimum common standard of security controls among the various entities regulated by RBI vis-a-vis digital payment of product or services.
- On 09.02.2021, the Securities Exchange Board of India (“SEBI”) under Regulation 7 of the SEBI (Prohibition of Insider Trading) Regulations, 2015. Prominently, Form B concerns disclosures by an individual at the time of becoming a Key Managerial Personnel/ Director/Promoter/Member of a Promoter Group. Whereas Form C in continuation to Form B details the change in security holding by a Member of a Promoter Group/Promoter etc. Additionally, Form D deals with the disclosure of transactions by connected persons as identified by the Company itself.
- SEBI vide Notification bearing no. SEBI/HO/DDHS/DDHS/CIR/P/2021/ 21, extended facilities for conducting meetings of Unitholders, through video conferencing or other audio-visual modes for Real Estate Investment Trusts and Infrastructure Investment Trusts. The timelines for the said meetings have been extended in the following manner
(a) Annual Meetings of Unitholders to be conducted by 31.12.2021
(b) Meetings other than the Annual Meetings of Unitholders to be conducted latest by 30.06.2021.
DEALS THIS MONTH
- On 09.02.2021, Housing.com the realty portal giant announced its tie-up with a property and rental management technology firm Propdial. This tie-up shall aim at cementing its rent services business and will help the Company to provide property/real estate management services such as renting/leasing, tenant background verification, rental agreement and rent collection/bill payment services to its users.
- Dineout has further expanded its portfolio of live events with the acquisition of event and experience curator, Steppin Out. Dineout through this acquisition will now be venturing into hosting various offline experiences, which will range from food festivals, stand-up comedy events, movie nights, etc. The acquisition is said to benefit its users by providing wholesome experiences.
- On 18.02.2021, after months of negotiations, KKR & Co. has agreed to an all-stock merger of its Indian lending unit KKR India Financial Services with In Cred, a shadow bank promoted by former Deutsche Bank officials. The union will help the private group to further its financial services in India.
- In a 51:49 ratio, Max Estate has formed a Joint Venture with New York Life Insurance in order to develop a Noida based commercial real-estate project. This marks the second occasion wherein New York Life Insurance will be investing in a Max Ventures and Industries since 2017. The Project is expected to be valued at INR 400 Crores with a built-up area of 700,000 square feet.