MINISTRY OF CORPORATE AFFAIRS (MCA)
MCA NOTIFIES COMPANIES LISTING OF EQUITY SHARES RULES
The MCA vide notification no. G.S.R. 61(E) dated 24-01-2024, has notified the Companies (Listing of equity shares in permissible jurisdictions) Rules, 2024. These regulations apply to unlisted public companies and listed public companies issuing securities for listing on approved stock exchanges in permissible jurisdictions, such as the IFSC (International Financial Services Centre). The Permitted exchanges include the India International Exchange and NSE International Exchange. Additionally, the Ministry of Corporate Affairs (MCA) outlines certain ineligible entities under these rules, such as Nidhi Companies and companies limited by guarantee. Read More
MINISTRY OF CORPORATE AFFAIRS COMES OUT WITH UNIFORM NORMS FOR PRE- LEGISLATIVE CONSULTATIONS
Starting January 1, the Ministry of Corporate Affairs and related bodies like the Competition Commission of India will follow a new rule. Before making any laws or rules, they will put out a draft for public feedback for 30 days. This is to make the process more open and include people’s opinions. They are also going to review the current rules under the Companies Act and Limited Liabilities Partnership Act by 2024-25. Finance Minister Nirmala Sitharaman supports this, saying it will make financial regulations simpler and involve the public in decision-making. The goal is to cut down on complicated rules and make things easier for everyone. Read More
BYJU’S FOREIGN LENDERS FILE INSOLVENCY PLEA
Two petitions seeking insolvency proceedings against ed-tech start-up Byju’s, totaling $1.2 billion, have been filed at the National Company Law Tribunal (NCLT) in Bengaluru. The first, by international lenders, is under scrutiny, while the second, filed by Teleperformance Business Services India Limited, an operational creditor, has been numbered for hearing on January 25, 2024. Byju’s is also facing NCLT proceedings initiated by the Board of Control for Cricket in India (BCCI) for alleged default on a payment of Rs 158 crore related to a sponsorship contract for the Indian cricket team’s jerseys. Read More
RESERVE BANK OF INDIA (RBI)
RBI PROPOSED EASING OF NORMS FOR DIVIDEND PAYOUT BY BANKS
The RBI is considering changes to dividend rules for banks in India. The proposed guidelines may allow banks with a net non-performing assets (NPAs) ratio below 6% to declare dividends, down from the current 7%. Effective from FY25, the changes are influenced by Basel III standards.
Minimum total capital adequacy for eligibility is set at 11.5% for commercial banks, 15% for small finance and payment banks, and 9% for local area and regional rural banks. The upper limit for the dividend payout ratio may increase from 40% to 50% if the net NPA is zero. Ad-hoc requests for dividend dispensation are discouraged. Read More
SUPREME COURT ALLOWS PROCUREMENT OF CERTIFIED SPECIMEN SIGNATURES FROM BANK IN S.138 NI ACT DISPUTE OVER CHEQUE SIGNATURE
In a recent case, the Supreme Court of India ruled that in cases where the accused claims a forged cheque signature, certified bank signature copies are admissible for comparison, as per the Bankers’ Books Evidence Act. The judgment highlighted the presumption of genuineness for endorsements under the Negotiable Instrument Act. The appeal, challenging the refusal to accept additional evidence in a cheque dishonor case, was dismissed, with the court noting that the accused could have obtained certified copies of specimen signatures from the bank earlier. Read More
MERGERS AND ACQUISITION
ZEE-SONY MERGER: NCLT ISSUES NOTICE TO SONY
Zee Entertainment Enterprises Limited (ZEEL) shareholders have filed a petition in the National Company Law Tribunal (NCLT) to enforce the cancelled merger with Sony Group.
This move follows Sony’s termination notice, seeking $90 million for breach of conditions and initiating arbitration after the $10 billion merger was called off. The NCLT directed Sony Pictures Network India (now Culver Max) to respond within three weeks. A shareholder, Mad Men Film Ventures, initiated the petition, urging ZEEL and Sony to implement the NCLT- approved merger. Sony alleged ZEEL breached financial terms, while ZEEL denied the claims, accusing Sony of acting in “bad faith.” Read More
CCI APPROVES JSW’S ACQUISITION OF UP TO 38% STAKE IN MG MOTOR INDIA
The Competition Commission of India (CCI) has approved JSW Ventures Singapore Pte Ltd’s acquisition of approximately 38% of MG Motor Pvt Ltd’s share capital. JSW Ventures, a subsidiary of JSW International Tradecorp, is part of the JSW Group.
MG Motor India, engaged in manufacturing and selling passenger cars and electric vehicles, will see JSW Group holding a significant stake through this acquisition. The move is part of a strategic joint venture announced in November, focusing on MG Motor’s growth and transformation in India, emphasizing local sourcing, charging infrastructure improvement, and green mobility. Read More
MAKEMYTRIP COMPLETES SAVAARI TRANSACTION, ACQUIRES CONTROLLING STAKE IN CAB RENTAL COMPANY
MakeMyTrip reported Q2 FY23-24 results and confirmed acquiring a majority stake in Savaari Car Rentals, an intercity car rental startup. Savaari will operate independently, aiming to transform the largely unorganized intercity market by leveraging MakeMyTrip’s technology. The acquisition aligns with improved road infrastructure and growing online acceptance for intercity cab services. Rajesh Magow, MakeMyTrip’s co- founder, sees it as an opportunity to extend leadership in ground transport. Read More
TAX
DELHI HIGH COURT UPHOLDS VALIDITY OF ANTI- PROFITEERING LAW UNDER CGST ACT
The Delhi High Court recently affirmed the legality of anti-profiteering provisions within India’s Goods and Services Tax (GST) law. These provisions are designed to compel businesses to pass on the advantages of reduced tax rates or input tax credits to consumers by adjusting prices accordingly. Despite a legal challenge arguing vagueness and arbitrary application, the court upheld the constitutional validity of these provisions. It emphasized that the provisions are adequately defined and aligned with constitutional objectives of social and economic justice. The court also underscored the role of the National Anti- Profiteering Authority (NAA) in overseeing compliance and penalizing businesses failing to adhere to these regulations. Read More
CBDT NOTIFIES ITR-6 FOR AY 2024-25
The Central Board of Direct Taxes (CBDT) has issued Notification No. 16/2024, dated January 24, 2024, regarding the Income Tax Return (ITR) Form ITR-6 for the Assessment Year (AY) 2024-25. ITR-6 applies to companies not claiming exemption under section 11, indicating those without income from property held for charitable or religious purposes. The form will be effective from April 1, 2024, requiring companies to use it for filing income tax returns for the financial year 2023-24, assessed in AY 2024-25. ITR-6 can only be filed electronically, distinguishing it from other ITR forms (ITR-1 to ITR-7), which cater to various taxpayer categories based on income sources and nature. Read More
SECURITIES EXCHANGE BOARD OF INDIA (SEBI)
ADANI CASE: SUPREME COURT BACKS REGULATOR SEBI’S PROBE, REFUSES SIT INVESTIGATION
The Supreme Court has ruled in favour of the Securities and Exchange Board of India (SEBI) in the Adani-Hindenburg controversy, stating that SEBI did not exhibit regulatory failure. The judgment emphasizes that relying on unverified press reports is insufficient for alleging regulatory lapses. The case involved a dispute between SEBI and Hindenburg Research regarding SEBI’s handling of complaints against Adani Group. This verdict is seen as a win for Gautam Adani, highlighting the need for verified information in regulatory matters. The decision may prompt regulatory bodies to refine their approaches to handling complaints based on media reports, emphasizing thorough investigations. Read More
SEBI’S STRICTER FPI DISCLOSURE NORMS AND ITS LIKELY IMPACT
SEBI Introduces Stricter Disclosure Norms for FPIs with Concentrated Equity Holdings: Aiming to Prevent Opacity and Potential Circumvention of Regulatory Requirements. Sovereign Wealth Funds, Listed Companies, and Regulated Pooled Investment Vehicles Exempted. Grace Period until January 30, 2024, for Compliance; Non- Compliant FPIs Face Trading Restrictions and Mandatory Liquidation within 180 Days. Read More
SEBI APPROVES AMENDMENT TO ALTERNATIVE INVESTMENT FUNDS (AIF) REGULATIONS
SEBI’s 203rd board meeting approved amendments to the Alternative Investment Funds (AIF) Regulations, focusing on ease of compliance and investor protection. Effective September 2024, new AIF investments must be held in dematerialized form, with exceptions for certain cases. All AIFs are now mandated to appoint a custodian, a departure from previous regulations. The amendment exempts certain investments from mandatory dematerialization, including those held by liquidation schemes, schemes ending within a year, and schemes with extended tenures as of the amendment’s notification. The changes aim to enhance regulatory efficiency and safeguard investor interests in alternative investment funds. Read More
ARBITRATION
ARBITRAL AWARD CAN’T BE CHALLENGED ON GROUND OF BIAS OF ARBITRATOR IF NO CHALLENGE WAS MADE DURING ARBITRAL PROCEEDINGS: DELHI HIGH COURT
In a recent case the Delhi High Court held that an arbitral award cannot be challenged on grounds of arbitrator bias if no challenge was raised during the arbitral proceedings. The court emphasized that a party participating fully in arbitration without contesting bias jurisdiction during proceedings cannot challenge the award under Section 34 of the Arbitration and Conciliation Act. In cases initiated before the 2015 amendment, such conduct constitutes a waiver under Section 4. The court rejected claims against the award, stating it couldn’t reassess merits or set aside awards based on evidence misappreciation. Read More
MERE VIOLATION OF SUBSTANTIVE LAW BY ITSELF NOT A VALID REASON TO SET ASIDE ARBITRAL AWARD: JHARKHAND HIGH COURT
The Jharkhand High Court ruled that violating substantive law alone is not sufficient grounds to set aside an arbitral award post the 2015 amendment to the Arbitration and Conciliation Act, 1996. The court dismissed an appeal challenging the Commercial Court’s decision upholding an arbitrator’s award in a dealership dispute. The appellant sought to nullify the award due to false information provided by the claimant in securing the dealership. The court highlighted that Section 34(2-A) allows setting aside a domestic arbitral award only if tainted by prima facie patent illegality. The judgment emphasized that a mere violation of substantive law does not warrant interference. Read More
FINALITY OF DECISION AND NON-ARBITRABILITY’ CLAUSE IN GCC DOES NOT IMPLY AN ARBITRATION AGREEMENT: BOMBAY HIGH COURT
The Bombay High Court clarified that a contractual clause deeming a decision final doesn’t automatically imply an intent for dispute resolution through arbitration. The court emphasized four crucial elements for arbitration: a genuine contractual disagreement, mutual consent for private arbitration instead of court proceedings, an agreement to abide by the arbitrator’s decision, and an active agreement to participate in arbitration with a clear meeting of minds between the parties. Read More
INFORMATION TECHNOLOGY (IT)
BOMBAY HIGH COURT DELIVERS SPLIT VERDICT ON PLEAS CHALLENGING IT RULES AMENDMENT, GOVT TO NOT NOTIFY ‘FACT CHECK UNIT’ FOR 10 DAYS
Split Verdict by Bombay High Court on IT Rules: Rule Empowering Fact-Check Unit Challenged by Kunal Kamra & Others; Justice GS Patel Strikes Down, Justice Neela Gokhale Upholds.
Amendments Face Scrutiny Over Potential Curtailment of Free Speech; Petitioners Allege Unconstitutionality and Lack of Natural Justice. While Patel Deems Rule an Infringement on Article 19(1)(a), Gokhale Disagrees, Stating No Restriction on Free Speech. Senior Advocates Argue Rules are Arbitrary, Unconstitutional; SG Tushar Mehta Defends, Emphasizing Protection Against False News Without Criminalization. Further Assurance by SG Delays FCU Formation Until Judgment Pronouncement. Read More
DELHI HIGH COURT REFUSES TO DIRECT FACEBOOK TO CHANGE ALGORITHM AND BLOCK HATEFUL CONTENT AGAINST ROHINGYAS
The Delhi High Court dismisses a petition urging Facebook (Meta) to alter its algorithm and remove hate speech against the Rohingya community. The court, cites the robust IT Rules grievance redressal mechanism, stating it provides an effective remedy. Rejecting prior censorship, the court notes the absence of evidence that Facebook violated IT Rules, highlighting the petitioners’ unawareness of the platform’s legal obligations. The court emphasizes the efficacy of existing rules and dismisses the plea to restrain Facebook from allegedly promoting hate speech against Rohingyas. Read More
GAMING
“STAY SAFE WHILE GAMING ONLINE!” ALERTS MHA’S CYBER WING
The MHA’s cyber wing issues a cautionary alert in response to rising gaming app frauds. Emphasizing vigilance, it urges citizens to exercise caution during online gaming activities. The advisory underscores the need for heightened awareness to mitigate potential risks and protect against fraudulent schemes. As part of ongoing efforts to address cyber threats, the Ministry aims to safeguard users from financial and personal information exploitation within the gaming realm. The advisory serves as a proactive measure to enhance public awareness and foster responsible online gaming practices amid the increasing prevalence of cyber fraud in the gaming sector. Read More
SC TO HEAR LANDMARK ONLINE GAMING TAX CASE WITHIN TWO MONTHS
The Supreme Court gears up for a final hearing on tax disputes, totalling ₹1.5 lakh crore, between the government’s GST body and online gaming entities. E-Gaming Federation, Games24x7, and Head Digital Works challenge retrospective tax demands, advocating for a skill-based classification. The court instructs the GST enforcement body to respond in two weeks without issuing a stay on tax notices. The imminent hearing, likely in February or March, aims to resolve the prolonged tax uncertainty in online gaming, determining the nature of skill versus chance. The DGGI seeks to consolidate similar cases, including the ₹21,000 crore appeal against Gameskraft Technology. Read More
“SILICON VALLEY BATTLES STATES OVER NEW ONLINE SAFETY LAWS FOR CHILDREN
NetChoice, representing major tech firms, files lawsuits against state laws like Ohio’s, requiring age verification and parental consent for minors on social media, claiming First Amendment violations. Federal judges temporarily halt the laws, marking a clash between child safety and free speech concerns.
Despite states viewing it as a setback, tech companies prefer federal legislation for consistent standards. The legal disputes highlight the challenge in balancing online safety and constitutional rights, with ongoing bipartisan efforts to regulate social media’s impact on minors. The lawsuits create a regulatory landscape where state measures face scrutiny for potential infringement on free speech. Read More
INTELLECTUAL PROPERTY
MOTI MAHAL OR DARYAGANJ? DELHI HC TO DECIDE WHO INVENTED BUTTER CHICKEN, DAL MAKHANI
The Delhi High Court is adjudicating a dispute between restaurant chains Moti Mahal and Daryaganj over the invention credit for Butter Chicken and Dal Makhani. Moti Mahal’s owners claim that their predecessor, Kundal Lal Gujral, invented these dishes, while Daryaganj is allegedly misleading people by attributing the creations to their predecessor, Kundan Lal Jaggi. Moti Mahal seeks to restrain Daryaganj from using the tagline “by the inventors of butter chicken and dal makhani.” The court has summoned Daryaganj’s owners and set a further hearing for May 29. Moti Mahal contends that Gujral’s invention of the butter sauce led to both dishes’ creation. Read More
DELHI HC SETS ASIDE ORDER REVOKING REGISTRATION OF PEPSICO’S SPECIFIC VARIETY OF POTATO USED FOR LAY’S CHIPS
The Delhi High Court has set aside an order revoking PepsiCo’s registration of the FL 2027 potato variety, used for Lay’s chips, in a case against farmer rights activist Kavitha Kuruganti. The court rejected Kuruganti’s plea to restrain PepsiCo from suing farmers for infringement. The dispute began when PepsiCo sued farmers for growing FL 2027 potatoes. Kuruganti sought to revoke the registration, claiming incorrect information and non- compliance. The court ordered the authority to reconsider PepsiCo’s registration renewal application. It disagreed with the single-judge’s findings on incorrect information and non- submission of documents, emphasizing the remediable nature of mistakes. Read More
