Status of Homebuyers in IBC

By Shivanjali Shukla, Student at Jindal Global Law School

Introduction

The status of a home buyer in insolvency proceedings has been a contentious issue for the past couple of years. The matter holds a lot of significance since it involves the rights of the home buyers against the developers who are the corporate debtor in an insolvency proceeding. Under the current framework of The Insolvency and Bankruptcy Code (the Code), there are three categories of creditors: (i) Financial Creditor, (ii) Operational Creditor, and (ii) Other creditors. During the nascent stage of the Code, the homebuyers were neither considered as financial nor as operational creditors, on account of which they suffered huge losses for the advances made. However, in 2018 with the advent of the Insolvency and Bankruptcy Code, (Second Amendment) Act, 2018, the home buyers were conferred the status of ‘financial creditor’ wherein any amount which was raised from a real estate allottee was deemed to create a ‘commercial effect of borrowing’. Despite the amendment of 2018, the position remained unsettled and numerous changes were made time and again due to which the position of home buyers always remained unsettled. The present article tries to study the entire journey of home buyers under the Code till date, and analyse the effectiveness of the amendments made keeping in mind the homebuyers.

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Arbitration of Landlord-Tenant Disputes: The Way Forward

By Rishav Ray and Subhadeepa Sen, Students at School of Law, Christ (Deemed to be University), Bangalore

Introduction

Disputes relating to property are a common occurrence in India since with the passage of time there has been a substantial and continuous hike in property prices and tenancy has increased in the urban areas leading to landlord-tenant disputes. Eviction cases are the most common kind of disputes between the landlord and the tenant. Landlords often try evicting tenants using unlawful force which causes a ground for legal dispute among the parties. This article however shall keep its scope restricted to only those cases wherein the landlord has the right to lawfully evict the tenant for his property.

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Regulatory Roadblocks in SPAC Listings in India

By Sourav Paul, Student at National University of Juridical Sciences

Introduction

Over the past few years, there has been a revival of Special Purpose Acquisition Companies [“SPAC”] in the international capital markets paradigm. As per SPAC Insider data, since 2009, out of 755 such Initial Public Offerings [“IPO”] by SPACs, 248 happened in 2020 and 281 in 2021 to date. The gross proceeds raised by SPACs in 2020 amounted to over $83 billion, whereas in 2021, it amounted to $91.65 billion as of now. In 2020, around $80 billion was raised in the US by 247 SPACs representing almost 50% of the raised capital of about $174 billion.  This resurgence of SPACs can be attributed to the pandemic-induced slowdown and extensive celebrity involvement. Some critics argue that the SPAC bubble is about to burst soon.

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Tata Consultancy Service Limited V. Cyrus Investments Pvt. Ltd and Others: Supreme Court Judgement Summary

By Utkarsh, Student at National University of Study and Research in Law (NUSRL)

Background Facts

On 10.08.2006 Cyrus Mistry was appointed as a Non­-Executive Director on the Board of Tata Sons. By a Resolution of the Board of Directors of Tata Sons dated 16.03.2012, Cyrus Mistry was appointed as Executive Deputy Chairman for a period of five years from 01.04.2012 to 31.03.2017, subject however to the approval of the shareholders at a General Meeting. By a Resolution dated 18.12.2012, the Board of Directors of Tata Sons re-designated Cyrus Mistry as its Executive Chairman with effect from 29.12.2012, even while designating Ratan Tata as Chairman Emeritus. By a Resolution passed on 24.10.2016, the Board of Directors of Tata Sons replaced Cyrus Mistry (CPM) with Ratan Tata (RNT) as the interim Non-Executive Chairman. It is relevant to note that Cyrus Mistry was replaced only from the post of Executive Chairman and it was left to his choice to continue or not, as Non-executive Director of Tata Sons. As a follow up, certain things happened and by separate resolutions passed at the meetings of the shareholders of Tata Industries Limited, Tata Consultancy Services Limited and Tata Limited, CPM was removed from directorship of those companies. CPM then resigned from the Directorship of a few other operating companies such as the Indian Hotels Company Limited, Tata Steel Limited, Tata Motors Limited, Tata Chemicals Limited and Tata Power Company Limited, after coming to know of the impending resolutions to remove him from Directorship. Thereafter, 2 companies by name, Cyrus Investments Private Limited and Sterling Investment Corporation Private Limited, belonging to the SP Group, in which CPM holds a controlling interest, filed a company petition in C.P No.82 of 2016 before the National Company Law Tribunal (“NCLT”) under Sections 241 and 242 read with 244 of the Companies Act, 2013, on the grounds of unfair prejudice, oppression and mismanagement. Along with the application for waiver of the requirement of Section 244(1)(a), the complainant companies also moved an application for stay of an Extra­ordinary General Meeting (“EGM” for short) of Tata Sons, in which a proposal for removing CPM as a Director of Tata Sons had been moved.

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