COURTS THIS MONTH
- The Supreme Court allowing the appeal preferred by Tata Sons Ltd., set aside the National Company Law Appellate Tribunal’s (“NCLAT”) Order reinstating the ousted Chairman, Cyrus Mistry. The National Company Law Appellate Tribunal had restored Mr. Mistry’s position as the Executive Chairman of Tata Group by setting aside the judgment of the Mumbai Bench of National Company Law Tribunal (“NCLT”) that had upheld the appointment of N Chandrasekharan as Chairman, in his stead. The Hon’ble Court decided all the questions of law put forth by Tata Sons Ltd. in its favour. A three judge Bench categorically declared that the actions of the board against Cyrus Mistry do not amount to oppression and mismanagement under sections 241 and 242 of the Companies Act, 2013.
- The Supreme Court’s Bench comprising of Justice Indu Malhotra and Justice Ajay Rastogi, observed that the period of limitation for filing an application under Section 11 of the Arbitration and Conciliation Act, 1996 will be governed by Article 137 of the First Schedule of the Limitation Act, 1963. The Apex Court also proposed the amendment of Section 11 of the Arbitration and Conciliation Act,1996 in order to postulate a period of limitation for the purposes of filing an application under the said provision, which could ensure expeditious disposal of the arbitration proceedings.
- The Supreme Court in Swaati Nirkhi Vs. State (NCT of Delhi) (Transfer Petition (Crl.) No. 262 of 2018) reiterated that a criminal case ought to be inquired and tried ordinarily where the cause of action has accrued. The Bench comprising of Justice Ashok Bhushan and Justice Indu Malhotra dismissed a transfer petition filed by the accused seeking transfer of the criminal case from the Court of Metropolitan Magistrate at New Delhi to the Court of Metropolitan Magistrate at Allahabad (Prayagraj), Uttar Pradesh. The Bench observed that if the transfer is allowed it will cause great hardship to the witnesses and the same will get in their way of performing their legal duties.
- The Supreme Court’s Bench comprising of Justice D. Y. Chandrachud and Justice M. R. Shah in Alka Khandu Avhad vs. Amar Syamprasad Mishra (Criminal Appeal 258 of 2021) held that even in cases of joint liability, a person other than the person who has drawn the cheque on an account maintained by the latter, shall not be liable to be prosecuted for the offence under Section 138 of the Negotiable Instruments Act, 1881. The Apex Court held that “a person might have been jointly liable to pay the debt, but if such a person who might have been liable to pay the debt jointly, cannot be prosecuted unless the bank account is jointly maintained and that he was a signatory to the cheque”.
- The Apex Court in an appeal filed by a Resolution Applicant upheld that time is a crucial facet of the Insolvency & Bankruptcy Code, 2016 (“IBC”) proceedings. In this case, the NCLT allowed the liquidation of the Corporate Debtor to progress. However, subsequently the NCLAT assailed the order of the NCLT in view of the fact that the Resolution Applicant had failed in the implementation of the Resolution Plan by over 8 months. In appeal the Bench comprising of Justices D. Y. Chandrachud and M. R. Shah noted that ample reasonable opportunities were given to the Appellant, and yet the Appellant had failed to adhere to any of the timelines, thereby, dismissing the same.
- The Apex Court in Lt. Col Nitisha and Ors. Vs Union of India and Ors. (W.P. (Civil) 1109 of 2020) observed that the selection standards adopted by the Indian Army to consider the grant of permanent commission for female officers is patently “arbitrary and irrational“. The Court directed the Indian Army to reassess the said standards within a period of 2 months in accordance with the fresh directions issued by the Apex Court. The Supreme Court also observed that the same is a systematic act of discrimination and a reflection of the “insidious patriarchal system” of our society.
- The Supreme Court’s Bench comprising of the Chief Justice of India Justice S.A. Bobde, Justice A.S. Bopanna and Justice V. Ramasubramanian held that in case an arbitration reference is made after an application under Section 7 of the IBC the same is not maintainable. The Hon’ble Court further held that “In a situation where the petition under Section 7 of IB Code is yet to be admitted and, in such proceedings, if an application under Section 8 of the Act, 1996 is filed, the Adjudicating Authority is duty bound to first decide the application under Section 7 of the IB Code by recording a satisfaction with regard to there being default or not, even if the application under Section 8 of Act, 1996 is kept along for consideration.” The judgement was passed in Indus Biotech Private Limited vs. Kotak India Venture (Offshore) Fund (Arb. Petition (Civil) 48/2019).
- A Single Bench of Justice GS Patel of the Bombay High Court in Sanjay Soya Pvt. Ltd. v. Narayani Trading Company (I.A No. 5011 of 2020 in COMM I.P Suit no. 2 of 2021) held that in case of seeking an injunction from infringement of copyright, the registration of same is not mandatory. Emphasis was laid down on Section 51 of the Copyright Act, 1957 which does not restrict infringement action against unregistered works. The Court also opined that a ‘label’ even though protected under the Trade Marks Act, 1999 is also eligible to fall within the purview of copyright based on the artistic work done on the same.
- In the case of Babulal Verma v. The Enforcement Directorate (Criminal Application (Apl) No. 201 of 2021 with Criminal Bail Application No. 974 of 2021), the Bombay High Court recently held that “Even if the predicate/scheduled offence under is compromised, compounded, quashed or the accused therein is/are acquitted, the investigation of ED under PMLA does not get affected, wiped away or ceases to continue.” A Single Judge Bench whilst dismissing the appeal also held that investigation of offence under Section 3 of the Prevention of Money Laundering Act, 2002 which is punishable under Section 4 is an independent investigation and once the crime is registered, the Enforcement Directorate has to take it to its logical end, irrespective of the same being compromised by the parties.
- Delhi High Court in the Amazon – Future Retail case has held that an ‘Emergency Arbitrator’ is an ‘Arbitrator’ in all respects under the Arbitration & Conciliation Act, 1996. Amazon was allowed to enforce the emergency award pursuant to Section 17(2) of the said Act. The Hon’ble Court held that Section 17(1) of the said Act empowers the Arbitral Tribunal to pass interim orders which are subsequently enforceable under Section 17(2) of the Act and thereafter appealable under Section 37 of the said Act.
- A Single Judge Bench of Justice Anu Sivaraman of the Kerala High Court allowed the plea for enrolment of transgenders in the National Cadet Corps i.e. NCC. Justice Anu Sivaraman held that “…the fact that the provisions of the NCC Act do not recognize the third gender or that detailed guidelines are required to be drawn up for the integration of persons of the third gender into the Armed Forces or the National Cadet Corps cannot, according to me, be a justification for denying admission to the petitioner.” The landmark judgement was pronounced in Hina Haneefa v. State of Kerala & Ors. (W.P (C) No. 23404 of 2020(A)).
- The Division Bench comprising Justices K Vinod Chandran and M. R. Anitha of the Kerala High Court held that the Demand Notice sent under Section 138 of the Negotiable Instrument Act,1881 need not disclose the nature of the transaction which led to the issuance of the cheque in the first place. Therefore, rendering the effect of a Demand Notice invalid on grounds that it didn’t make full disclosure of the relevant transaction, was held to be contrary to the provisions of the Act.
- A Single Judge Bench of Justice Suvra Ghosh of the Calcutta High Court held that non – issuance of duplicate share certificates on account of it being misplaced by an alleged shareholder does not indicate malice on part of the company from the commencement of the transaction. Considering the shares were issued in lieu of a consideration and misplacement took place at a subsequent stage, no criminal intention could be made out since inception on account of the Petitioners, i.e. the Company. The decision was held in the case of BVG India Ltd. v. The State of Maharashtra & Ors. (C.R.R No. 3058 of 2019).
- The Allahabad High Court in Bhanu Pratap Singh Vs State of UP (W.P. (C) No. 12036 of 2021) held that wife’s silence would not be inferred as her consent to adoption under Section 7 of the of the Hindu Adoption & Maintenance Act, 1956. The Bench comprising of Justices Manoj Misra and Rohit Ranjan Agarwal held that the wife’s consent under such adoption proceedings must be evidenced either by way of her consent in writing or actions that she has actively participated in the ceremonies of adoption.
- Whilst deciding a Writ Petition filed in the 2013 murder case of a Navi Mumbai builder, a Division Bench of the Bombay High Court refused to transfer the ongoing trial from one judge to another. The Hon’ble Court observed that a trial court cannot be perceived to be either accused or victim centric. It further supplemented its observation by stating that it is the duty of the court and the prosecutor to ensure that the proceedings are carried out in a “fair manner” and both the parties are brought to justice.
- A Division Bench of Chief Justice Dipankar Datta and Justice G. S. Kulkarni of the Bombay High Court recently passed orders in a batch of petitions concerning the Government Resolution passed by the Maharashtra Government amending certain provisions of the Maharashtra Educational Institutions (Regulations of Fee) Act, 2011. The amendment made it mandatory for the schools to inform the parents of the students in cases of fee hike at least one academic year in advance. The Hon’ble High Court pursuant to vacating the stay on the said Government Resolution held that such an amendment is applicable prospectively and cannot apply to schools which have already fixed/declared their fee for the academic year 2020-2021.
NOTIFICATIONS/AMENDMENTS INSIGHTS
- The Ministry of Corporate Affairs (“MCA”) vide its Notification bearing No. S.O. 1066 (E)., MCA announced 05.03.2021, as the date for implementation of Section 23(i) of the Companies (Amendment) Act, 2017. Pertinently, under the said Section 23(i), Section 92 (l) of the existing Companies Act, 2013 stands amended by insertion of subsection (l) with clauses (a), (b) and (c). In light of the said amendment, inter alia, the Central Government may prescribe an abridged form for filling annual returns of a one – person company, small company etc.
- Vide Notification bearing S.O. 1255(E)., the MCA announced 18.03.2021, as the date for notifying Section 32 and 40 of the Companies (Amendment) Act, 2020. Most notably, Section 32 amends Section 149 of the Companies Act, 2013 and inserts sub section (9) to the same. This sub section provides a mechanism for independent directors to seek renumeration in case the Company has no profits or its profits are inadequate. Additionally, under Section 40, the words “any other non-executive director, including an independent director” were inserted subsequent to “whole time director or manager” in Section 197 of the said Act. As such, the scope for receiving managerial remunerations in the absence or inadequacy of profits stands broadened.
- Recently, SEBI implemented a “Code of Conduct and Institutional Mechanism for Fraud or Market Abuse” in Stock Exchanges, clearing Corporations and Depositories (hereinafter referred to as “SCD”). The same was implemented to ensure the accountability of the management of the said Stock Exchanges in formulating the aforementioned Code of Conduct. The Notification also warrants designating a Compliance Officer to administer the said Code etc. The Notification can be identified as Notification dated 03.03.2021 bearing No. SEBI/HO/MRD/DCAP/CIR/P/2021/3.
- Vide notification dated 22.03.2021 bearing No. SEBI/HO/MRD1/DTCS/ CIR/P/2021/33, SEBI modified its Circular dated 23.03.2019, whereby a framework for Business Continuity Plan (“BCP”) and Disaster Recovery Site (“DRS”) for Stock Exchanges, Depositories and Clearing Corporations was implemented. Under the new regime, the said Stock Exchanges will have to implement a BCP and DRS to maintain their data and transaction integrity and also ensure zero data loss. Furthermore, a direction with respect to creation of an incidence and response team was also given which shall be chaired by the Managing Director of the SCD or Chief Technological Officer etc.
- On 23.03.2021, the Reserve Bank of India (“RBI”) issued Master Directions for Amalgamation of Urban Urban Banks, 2020. The aforementioned directions are applicable to all Primary (Urban) Co-operative Banks in India. Furthermore, these directions include circumstances when RBI may consider a possible amalgamation between two such banks. These include situations when the net worth of the Amalgamated Bank is positive and the Amalgamating Bank ensures to protect the entire deposit of all the Depositors of the said bank or when the net worth of the Amalgamated Bank is in the negative and the Amalgamating Bank ensures protection of all Depositors of the Amalgamated Bank etc.
DEALS THIS MONTH
- Kalyan Jewellers, one of the country’s leading jewellery brand, offered its shares for an Initial Public Offering (“IPO”) in March, 2021. In a two – day affair starting from 16.03.2021 to 18.03.2021, Kalyan Jewellers have received a funding of Rs 1,175 Crores through the said IPO which also includes a fresh issue of shares worth Rs 800 Crores. The lot size of the said IPO was 172 shares. The IPO proceeds shall be utilised towards financing business working capital requirements of the Company and to meet the general corporate needs that arises on a day-to-day basis.
- Piramal Capital & Housing Finance is expected to raise funds up to Rs 3,000 Crores through an issue of bonds, offering interest at 9.25% per annum. The bonds to be issued by the Piramal group are rated AA. The same is likely to take place prior to its proposed merger with Dewan Housing Finance Corporation (“DHFL”). Piramal group had initially received RBI’s clearance and approvals for its restructuring with DHFL. The gruop now awaits upon the approval of the NCLT for finalisation of the same.
- On 22.03.2021, the Hinduja Group announced the launch of Berryllus Capital, a novel joint venture in partnership with Focus Financial Partners Inc., to provide investment management, investment banking and real estate advisory to the ultra-high net worth families across the globe. The joint venture shall partner with such other independent wealth management firms in order to cater some of the most prominent families in the world. The joint venture shall be initially operating through its offices in London, Geneva and Singapore.
- As on 12.03.2021, Titan, a Tata Group entity completed its exit from the joint venture of Montblanc India Retail, which operated retail boutiques in India for the luxury brand Montblanc. Titan had announced its exit from the five year old association with the said luxury brand venture in October, 2020. Titan had held 49% equity stakes in Montblanc India Retail Private Limited.
