Aastha Agarwalla, Law Student, Campus Law Centre, Faculty of Law, University of Delhi
The Ministry of Finance, through a notification dated 19th March 2020, (hereinafter, “Amendment”) introduced a significant development in the legal framework of Differential Voting Rights (DVR), especially in shares having Superior Voting Rights (SR), by amending the Securities Contracts (Regulation) Rules, 1957 (hereinafter, “SCRA Rules”).The Amendment provides that in case a company seeks to list its ordinary equity shares for offering to the public, then it shall be mandatorily required to list its shares having SR on the same recognized stock exchange.
Continue reading “MANDATORY LISTING OF SHARES HAVING SUPERIOR VOTING RIGHTS: A STEP FORWARD?”
Aditya Singh Chauhan, Law Student, National Law University, Jodhpur
With heavy tax defaults pilling-up in the recent years, tax authorities have resorted to issuing freezing orders under certain special provisions to freeze bank accounts and directly recover the money. The Assessing Officer (“AO”) or Tax Recovery Officer (“RO”) can make use of section 226(3) of the Income Tax Act, 1961 (“Act”) for this purpose. The aforesaid provision pertains to “Garnishee proceedings”, and allows the tax authorities to attach or collect money directly from the account of the tax payer’s debtor. The Supreme Court of India, while defining the scope of this section, observed “[it] would be applicable only when a money is due to the assesse from any person. Was the amount due to the assesse when the notice dated […] was issued is the question.” However, indiscriminate use of this section can severely impact the reputation and business of the assesse.It has been said that “[t]his is a provision which has to be used sparingly but is now used at the first instance by the assessing officer even in cases where a stay application is pending with various appellate authorities.” This article will explain the process of Garnishee Proceedings under the Act, discuss case laws in relation to freezing orders issued after serving notice under section 226(3) of the Act, and conclude with the instances where freezing orders are illegal or invalid.
Continue reading “Defining Contours Of Freezing Orders Under Section 226(3) Of The Income Tax Act”
Ojasvi Sharma, final year law student, Nirma University
Arbitrability of disputes has always been a big fuss amongst the scholars. No law or act in India prescribes the subject matter of disputes which could be resolved through arbitration. Albeit, § 2(3) of the Arbitration & Conciliation Act, 1996 [“A & C Act”] clarifies that Part-I shall not affect the operation of any other laws in the country and certain disputes may not be submitted for resolution through arbitration. The issue of arbitrability of disputes relating to Competition law is contestable. The dubitable proposition is ‘whether a competition law dispute arising out of a contractual agreement between two parties could be submitted to an arbitral tribunal’. In other words, whether a dispute resolution mechanism primarily focused to address private parties’ concerns and is very much confidential could resolve an issue arising out of Competition law, which is of ‘Public Nature’ or includes ‘Public Interest’.
Continue reading “Arbitrability of Antitrust Disputes: A case against the orthodox approach of the Indian Courts”
Rahul Jajoo, Advocate, Supreme Court of India
Forward markets pertaining to commodities in India have been recognized as a way to deal in derivative markets  since independence. It was however only in 1952 that the government of India decided to regulate the regime of forward markets and hence, the Forward Contracts Regulation Act, 1952 (“FCRA”) was enacted. The object and purpose of the FCRA was “An Act to provide for the regulation of certain matters relating to forward contracts, the prohibition of options in goods and for matters connected therewith.”
Continue reading “Forward Markets in India and the Saga of Electricity”
Divyansh Nayar, 4th year, National Law University, Odisha
The industrial undertakings are in dire need of funds for various purposes during the period of this economic collapse at the heels of COVID- 19 Pandemic. In order to attenuate the capital adequacy requirement, the Securities and Exchange Board of India (‘SEBI’) allowed relaxations in the rights issue process that seem to ease out the stringent requirements that debilitate the facility of raising funds by companies. Through a series of circulars, SEBI streamlined the process in order to cater to the need of the market and promote the influx of capital in the market. This article lays down the scheme of relaxations proffered and emphasizes on the capital requirement of the market
Continue reading “Streamlining The “Rights Issue” Process: Temporary Relaxations Amid The Pandemic”
Urja Dhapre, Institute of Law, Nirma University
The Indian Supreme Court has ironed out the position of limitation period governing foreign decrees from reciprocating territories. The recent case of Bank of Baroda (“Appellant”) v/s Kotak Bank Ltd (“Respondent”)[i] has broken new ground by categorising limitation as a substantive requirement rather than being merely procedural. The upshot is the period of limitation for enforcing a foreign judgement in a reciprocating territory is now no longer determined by Indian law but instead depends on the law of limitation of the foreign country.
Continue reading “Supreme Court’s Ruling on Limitation Period of Foreign Decrees: Untangling the Knots”
Chetan Saxena, 4th-year student, Institute of Law, Nirma University.
The National Company Law Tribunal [NCLAT] on February 28th, 2020 in Pacific World Shipping PTE Ltd. v. Dadi Impex Pvt. Ltd. and Ors. ruled that the tribunal cannot examine the commercial wisdom of the Committee of Creditors [CoC] and refuted the appellants’ argument of discriminatory treatment of the Operational Creditors as supposed to that of the Financial Creditors.
Continue reading “To Discriminate or Not to Discriminate: NCLAT’s ruling on differential treatment of the creditors”
Siddharth Chechani, Advocate, Supreme Court of India
International arbitration with its global and distinctly adaptive nature has continued to grow amongst major business transactions. Multinational companies are opting for International Commercial Arbitration considering its speedy disposal mechanism and its expertise to resolve the complex business matters in a time bound manner. It started in the early years of twenty first century from Australia, and subsequently this practice has been adopted in United Kingdom, and in United States of America (‘USA’) respectively.
Continue reading “STATUS QUO OF THIRD-PARTY FUNDING IN INDIA”
Tanuj Agarwal, Institue of Law, Nirma University
Covid-19 pandemic has raised serious apprehensions surrounding health and safety causing a lockdown in India. The pandemic has caused a worldwide recession and has spooked investors’ sentiment. Prior to the coronavirus outbreak, the Indian stock market was in full positive swing as Sensex and Nifty had reached their all-time intraday peak of 42,273.87 and 12,430.50 respectively in January, 2020. Even after attaining such progress, the Indian stock market is witnessing the most difficult period for the past few months. The stock market has observed lower circuit levels after 12 years on March 13, 2020. Afterward, the equity index discerning a continuous downfall. On March 19, 2020, Sensex crashed below 27,000 and Nifty breached the level of 7,900, thereby attained their five-year closing low levels. Consequently, an approximate downfall of 37% is evident in both the equity indices within a period of just 2 months. The stock market has seen a considerable collapse due to high market volatility. This downfall has degraded the financial market and faded the interest of investors and corporates. Thereby, the concern is whether such a market downturn can be controlled by restricting short-selling.
Continue reading “COVID-19 AND STOCK MARKET CRASH: SHOULD SEBI BAN SHORT-SELLING?”
Nitya Jain, 4th year law student, Nirma University
The world position at a standstill, for an unforeseeable force disrupts lives across boundaries. Covid – 19 has emerged as a pandemic whose expiration is still a blurry vision. As a retort to the deadly virus, the governments of various nations have put strict travel restrictions with almost nil movements of goods and people, leading to severe disruptions in the supply chains all over the world. Consequently, various contracts are being assailed or tend to be violated because of late or no delivery. This article assembles and then, analyses the answers of various governments to the question – Whether Covid -19 pandemic can amount to a force majeure event, excusing parties of their contractual obligations for time being?
Continue reading “Is Covid-19 a Force Majeure Event? : A Global Scenario”