Explore Insights

The Patents (Amendment) Rules, 2021 have been notified and has come into force from the date of Publication in the Official Gazette i.e. 21 September 2021.

Over the past few years, Indian courts have actively taken a pro-arbitration stance and emphasised on minimum judicial interference in arbitral processes or awards. Recently, the Supreme Court of India in Arcelor Mittal Nippon Steel India Ltd v Essar Bulk Terminal Ltd, has further clarified the scope of the courts’ power to “entertain” and adjudicate applications for interim relief, when the arbitral tribunal has been constituted during the pendency of parties’ applications for interim relief before the court.

On 13 September 2021, the Supreme Court (SC), has delivered a judgment (SC Judgment) in the batch matter of Ebix Singapore Pvt. Ltd. v. Committee of Creditors of Educomp Solutions Ltd. and Anr., Civil Appeal No. 3224 of 2020, providing long overdue clarity on the status of a resolution plan under the Insolvency and Bankruptcy Code 2016 (Code) once it has been approved by the Committee of Creditors (COC) but is still pending approval of the National Company Law Tribunal (Adjudicating Authority/ NCLT). SC took a view that once COC approves a plan, it becomes binding on the resolution applicant and there remains no scope of withdrawal, even while the plan is pending approval before NCLT.

The Union Cabinet, after much ado, has announced a slew of major reforms in the telecom sector on 15 September 2021. The reforms are set to address some long pending key issues affecting the telecom industry such as moratorium on payment dues, rationalizing the license fees and bank guarantees, spectrum auctions, increase in foreign direct investment (FDI) limit, etc. With the objective of promoting ease of doing business in this sector, these reforms aim to inter alia infuse liquidity, encourage investment and reduce the regulatory burdens on telecom service providers (TSP).

The government has justified its action to regulate digital media publishers under the IT Act, saying the Code of Ethics is in conformity with the permissible restrictions on freedom of speech

In a recent order in Palak Khatuja v Union of India and others (WP(T) No. 149 of 2021) (Order), a single judge bench of the Hon’ble Chhattisgarh High Court (High Court) has upheld the validity of reassessment notice issued under the old law (ie, law existing prior to 1 April 2021).

On 25 August 2021, the Ministry of Civil Aviation (Ministry) notified the Drone Rules 2021 (Drone Rules). The Drone Rules supersede the erstwhile Unmanned Aircraft System Rules 2021 (UAS Rules) and have significantly reduced the approvals, compliance requirements and entry barriers for drone operators in India.

The Remission of Duties and Taxes on Export Products Scheme(“RoDTEP”) is a new scheme that is formed to replace the Merchandise Exports from India Scheme (MEIS). MEIS was one of the schemes introduced under chapter 3 of the Foreign Trade Policy 2015-20 (FTP) with the objective "to provide rewards to exporters to offset infrastructural inefficiencies and costs". However, MEIS was successfully challenged by US at the WTO Dispute Settlement Body and is effectively being replaced with RoDTEP.

On 23 August 2021, the Competition Commission of India (CCI) imposed a penalty of INR 200 crore on Maruti Suzuki India Limited (MSIL) for employing a Discount Control Policy (DCP) vis-à-vis its dealers, amounting to Resale Price Maintenance (RPM).

The Securities and Exchange Board of India (SEBI) has been making consistent efforts to update and reconstruct the alternate investment space. Pursuant to the SEBI’s Consultation Paper on ‘Introduction of the Concept of Accredited Investors’ (February Consultation Paper) published on 24 February 2021, the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 (AIF Regulations) were amended on 3 August 2021 vide the Securities and Exchange Board of India (Alternative Investment Funds) (Third Amendment) Regulations, 2021 (Third Amendment), which primarily introduced the concept of ‘Accredited Investors’ and granted certain relaxations for Alternative Investment Funds (AIFs) with Accredited Investors.

The introduction of the regulatory and tax regime for alternative investment funds (AIF) in International Financial Services Centres (IFSC) undeniably defines a crucial epoch in the journey of the alternative investment asset class in India.

A positive development is the CCI’s and the Government of India’s emphasis in improving Indian competition law.

The Foreign Exchange Management (Non-Debt Instruments) Rules 2019 (NDI Rules) have been amended to permit foreign investment up to 74% for insurance companies in India. The amendment takes effect from 19 August 2021 and marks the completion of the liberalisation process for increasing the foreign investment limit for the sector from 49% to 74%.

Through its notification published in the Official Gazette on 13 August 2021, the Securities and Exchange Board of India (SEBI) has brought into effect (immediately from 13 August 2021) the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (2021 Regulations). The 2021 Regulations have replaced the SEBI (Issue of Sweat Equity) Regulations, 2002 (Sweat Equity Regulations) and the SEBI (Share Based Employee Benefits) Regulations, 2014 (SBEB Regulations), and the new regime will assume relevance even for existing share-based benefit schemes. In this ERGO, we navigate through the key changes brought about by the 2021 Regulations.

The Competition Commission of India (CCI) in an order dated 13 August 2021 declined to initiate investigation into allegations of abuse of dominant position and anticompetitive vertical agreements against Siemens Healthcare Private Limited (Siemens).

On 9 August 2021, the Hon’ble Supreme Court of India (Supreme Court) allowed the Competition Commission of India (CCI) to proceed with its investigation into alleged anti-competitive practices by Amazon Seller Services Private Limited (Amazon) and Flipkart Internet Private Limited (Flipkart) (collectively “OPs”).

Grasim Industries Limited (Grasim) abused its dominance again by charging discriminatory prices, denying market access, and imposing supplementary obligations in the viscose staple fibre (VSF) market from 2017 to 2018, held the Competition Commission of India (CCI) on 6 August 2021. (Informant (Confidential) v Grasim Industries Limited (Case No. 51 of 2017, Case No. 54 of 2017, Case No. 56 of 2017).)

On 13 August 2021, the Taxation Laws (Amendment) Act 2021 (Act) received the Presidential assent, withdrawing retrospective effect of the much-controverted indirect transfer tax.

The Supreme Court in its recent decision in Dena Bank (now Bank of Baroda) v C. Shivakumar Reddy and Anr, (Civil Appeal 1650 of 2020) has inter alia held that a final judgement, decree and/or a recovery certificate passed/ issued by a court or tribunal would give rise to a fresh cause of action for a financial creditor to initiate proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC).

In a first ruling on the issue, the Income Tax Appellate Tribunal, Mumbai (Tribunal) in its recent judgment in the case of Asia Today Limited (Taxpayer) [ITA No. 4628/2006, ITA No.4629/2006, ITA 1877 of 2008 and CO No. 123/2008], ruled that re-domiciliation from British Virgin Islands to Mauritius cannot by itself result in denial of the benefits of the India-Mauritius tax treaty (Tax Treaty).

The High Court of Madras (Madras HC) has struck down Part II Tamil Nadu Gaming and Police Laws (Amendment) Act of 2021 (Amendment) which had amended the Tamil Nadu Gaming Act 1930 (Act) that had banned all forms of online games with stakes as ultra vires the Constitution of India (Constitution).

‘Investment Subsidy in lieu of Net SGST of Haryana’ notified under the Haryana Enterprises & Employment Policy,2020 (dated 29.12.20) – an attractive incentive scheme for various categories of enterprises

SEBI on 6 August 2021 announced several policy changes which should be very positively factored by the financial sponsor community. Set out below is a snapshot of these announced changes, and we will keep you posted on when SEBI announces corresponding updates to the implementing regulations.

The Supreme Court of India (SC) in Orator Marketing Private Limited v Samtex Desinz Private Limited, Civil Appeal No. 2231 of 2021, judgment dated 26th July 2021 has held that an interest free term loan constitutes a financial debt under the Insolvency and Bankruptcy Code, 2016 (IBC).

The Insurance and Regulatory Development Authority of India (IRDAI) has formally withdrawn its guidelines on Indian ownership and control dated 19 October 2015 (IOC Guidelines), with effect from 30 July 2021. The withdrawal of the IOC Guidelines marks the completion of the removal of the requirement that Indian companies with foreign investment must remain “Indian owned and controlled”. Prior to this, on 7 July 2021, certain other IRDAI regulations that referred to the IOC Guidelines were amended to remove those references.

Larsen & Toubro Limited (L&T) filed a writ petition against Punjab National Bank (PNB), the Indian Banks Association (IBA) and the Reserve Bank of India (RBI) before the Delhi High Court challenging PNB’s and IBA’s interpretation of the third exception to Section 28 of the Indian Contract Act, 1872 (ICA). The issue arose because L&T in its ordinary course of business, routinely submitted performance bank guarantees/ advance bank guarantees while bidding for government contracts and also submitted bid bonds/ bid security in the form of bank guarantees (BGs). PNB compelled L&T to keep the claim period under the BG alive for a minimum period of one year, regardless of whether L&T required the BG for a shorter period. The implications of this for L&T was that it incurred unnecessary expenses for payment of commission charges on the BG and for maintaining collateral security in support of the BG during the extended claim period. Hence L&T also joined IBA and RBI as Respondents in the writ petition as it was a policy decision which affected all persons who availed of such banking facilities.

The Supreme Court of India's judgment dated 23rd July 2021 in “Prakash Gupta v. Securities and Exchange Board of India”, Criminal Appeal No. 569 of 2021, has for the first time, interpreted Section 24A of the Securities and Exchange Board of India Act, 1992 (SEBI Act) holding that an offence under the SEBI Act can be compounded only under the SEBI Act and not as per Section 320 of the Code of Criminal Procedure, 1973 (CrPC).

The Foreign Trade Policy (FTP) is traditionally laid out for a period of five years. The current FTP of 2015-2020 was extended till September 2021 on account of Covid-19 pandemic.

The Customs Excise and Service Tax Appellate Tribunal (“Tribunal”), Bangalore bench vide order dated 1 July 2021 in ICICI Econet and Internet Technology Fund v Commissioner of Central Tax [Service Tax Appeal No 2900 of 2012] confirmed service tax liability on expenses incurred by a venture capital fund (“VCF”) incorporated as a trust, as consideration received towards asset management services. Disbursement of “carried interest” to the Asset Management Company (“AMC”) and other expenses incurred by the VCF in the course of its operations, have also been characterized as service income of the trust. 

On 14 July 2021, the Competition Commission of India (CCI) dismissed a claim of charging prices below-cost and entering exclusive agreements with drivers against Uber India Systems Pvt. Ltd. (Uber).

Several High Courts have stayed the reassessment proceedings in relation to reassessment notices issued by Income-Tax Authorities (IT Authorities) post 31 March 2021 for the financial year (FY) 2016-17 or prior FYs (Stay Orders). This is on account of the recent amendment to the law relating to reassessments under Income-Tax Act, 1961 (IT Act) which led to a paradigm shift in the number of FYs for which past tax assessments can be reopened.

The COVID-19 pandemic has brought about an economic slowdown, including in the real estate sector, and has curtailed the purchasing power of the citizenry. In the wake of such crisis and in order to avoid piling up of unsold properties, the government of West Bengal (WB Government) and government of NCT of Delhi (Delhi Government) has decided to grant temporary relaxations to stakeholders in the real estate sector by way of reduction in market value of immovable properties (in Delhi and West Bengal) and in the rate of stamp duty (in West Bengal) payable on transactions involving such immovable properties.

On 8 July 2021, the Union Cabinet of India approved the Memorandum on Co-operation (MoC) between the Competition Commission of India (CCI) and Japan’s competition agency, the Japan Fair Trade Commission (JFTC). The MoC aims to promote and strengthen co-operation in matters of competition law and policy.

With increasing internet penetration and a push towards online education in the backdrop of Covid, ed-tech companies are only expected to grow further.

On 2 July 2021, the Department of Telecommunications (DoT) announced the approval for the creation of the ‘Digital Intelligence Unit’ (DIU) and ‘Telecom Analytics for Fraud Management and Consumer Protection’ (TAFCOP) to curb financial frauds committed through misuse of telecom resources, such as consumer harassment by sending of unsolicited commercial communication (UCC), use of false or forged documents to obtain telecom resources, and other deceitful activities. The circular issued by DoT in this regard bespeaks its aim to inter alia provide effective resolution to consumers against bad actors, enable better coordination between concerned authorities and law enforcement agencies (LEAs), and monitor the circulation of UCC.

The Ministry of Consumer Affairs, Food, and Public Distribution, Government of India (Ministry) notified and made effective the provisions of the Consumer Protection (E-Commerce) Rules, 2020 (E-Commerce Rules) under the Consumer Protection Act, 2019 (Act) from 24 July 2020. Our Ergo on the E-Commerce Rules can be accessed here.

The Mumbai Bench of the Income Tax Appellate Tribunal (Tribunal) in the case of Deputy CIT v. Total Oil India Private Limited (ITA No. 6997/Mum/2019) (Taxpayer) has expressed ‘doubts’ over the correctness of certain decisions rendered by co-ordinate benches of the Tribunal (see our earlier Ergo published on 21 October 2020) on the issue of tax treaty applicability to dividend distribution tax (DDT). 

On 07.06.2021, the Appellate Tribunal for Electricity (APTEL) passed its judgment (Judgment) in Appeal No.131 of 2020: Tamil Nadu Power Producers Association vs. Tamil Nadu Electricity Regulatory Commission. APTEL vide the Judgment (uploaded on the website of APTEL on 11.06.2021), has settled various issues pertaining to verification of captive status of a Captive Generation Plant (CGP) under the Electricity Rules, 2005 (Rules).

On 23 June 2021, the Department of Telecommunications (DoT) issued the Revised Other Service Provider (OSP) Guidelines (Revised Guidelines), in supersession of the New OSP Guidelines that were released on 5 November 2020 (Old Guidelines).

A Will is a document written by a living person stating his/her wishes to be executed after his/her death. However, this is a complex task since the person writing the Will would not be living to explain the meaning of his/her intentions. To add to the complexity, between the time the person makes a Will and his/her demise, the assets, relationships, etc., also typically undergo a change and therefore the Will also has to withstand the test of time.

On 10 June 2021, SEBI introduced the SEBI (Delisting of Equity Shares) Regulations, 2021 (Delisting Regulations) which have now completely replaced the erstwhile regulations from 2009. A revamp of the delisting regime was imminent, and SEBI has sought to plug certain legal ambiguities and practical challenges that plagued the earlier regulations. This Ergo analyses certain key considerations and process involved in a voluntary delisting of equity shares of a company under the new Delisting Regulations. 

The Ministry of Information and Broadcasting (MIB) through a notification dated 17 June 2021 amended the Cable Television Network Rules, 1994 (Cable Rules 1994) by way of the Cable Television Networks (Amendment) Rules, 2021 (Amendment). The Amendment introduces a formal complaint redressal mechanism for redressal of viewers grievances relating to content broadcasted by cable television channels which are in contravention of the Programme Code or Advertising Code under the Cable Rules 1994. The Amendment replicates the three-tier grievance redressal mechanism set out in the recently introduced Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (IT Rules 2021) for digital media, and contains levels of self-regulation, a self-regulatory body, and an oversight mechanism through an inter-departmental committee.

The Securities and Exchange Board of India (SEBI) has on 11 June 2021, repealed the SEBI (Delisting of Equity Shares) Regulations, 2009 (Erstwhile Delisting Regulations) and notified the SEBI (Delisting of Equity Shares) Regulations, 2021 (Delisting Regulations 2021). As per Regulation 37 of the Delisting Regulations 2021, the equity shares of a listed subsidiary company (Listed Sub Co) of a listed holding company (Listed Hold Co) may be delisted from the stock exchanges, pursuant to a scheme of arrangement under Sections 230 to 232 of the Companies Act, 2013 (Act).

The Central Board of Direct Taxes (CBDT) has issued a Press Release dated 14 June 2021 (Press Release) to ease the compliance requirement of mandatory filings (Form 15CA / 15CB) to be made for foreign remittances.

The crypto asset market in India is worth $15 billion, and currently has about 6 million users

In an important move, against the backdrop of a nationwide health crisis emanating from COVID-19 outbreak, the Employees’ State Insurance Corporation (ESIC), by way of circular dated 3 June 2021, has announced the ESIC COVID-19 Relief Scheme (Scheme) for the beneficiaries of the insured persons, in the instance the insured person died as a result of COVID-19. The Scheme will be valid for a period of 2 years with retrospective effect from 24 March 2020. In this update, the authors examine the salient provisions of the Scheme.

The Central Board of Direct Taxes (CBDT) vide its notification dated 24 May 2021 (Notification), has introduced Rule 11UAE under the Income Tax Rules 1962 (IT Rules). Rule 11UAE prescribes the method for computing the fair market value (FMV) of an undertaking being transferred pursuant to a slump sale.

On 27 May 2021, Advertising Standards Council of India (ASCI) released the final ‘Guidelines For Influencer Advertising In Digital Media’ (Guidelines) which would have to be complied with for all posts published by influencers on or after 14 June 2021. The purpose is to enable consumers to identify and distinguish paid promotional content from other content posted by the influencers. The Guidelines are aimed at preventing manufacturers and advertisers using influencers for promotional posts or campaigns on digital media which may be misleading in nature and avoiding abuse of trust of consumers or exploitation of their lack of experience or knowledge.

The Supreme Court of India in the case of Lalit Kumar Jain v. Union of India & Ors. by its judgement dated 21 May 2021 upheld the validity of notification no. S.O. 4126 (E) dated 15 November 2019 (“the said Notification”) issued by the Central Government, which brought into force provisions relating to personal guarantors to corporate debtors with effect from 1 December 2019. Additionally, the Apex Court held that approval of a resolution plan against a corporate debtor ipso facto does not absolve a personal guarantor to the corporate debtor of liabilities under the contract of guarantee as the same arises out of an independent contract.

The final form of amendments to the Indian Insurance Companies (Foreign Investment) Rules, 2015 (Foreign Investment Rules) have now been notified, with effect from 19 May 2021 (Amendment). Our previous Ergo dated 21 April 2021 had analysed the draft amendments published on 15 April 2021 and also highlighted the key implications and next steps. The Amendment is a key part of the legislative and regulatory changes that are currently being implemented to increase the foreign investment cap in Indian insurance companies from 49% to 74% (also see our Ergo dated 4 February 2021).

Businesses have come a long way since noted economist, Milton Friedman, advanced his doctrine that the social responsibility of a business is to generate profit for its shareholders. We have already discussed the shift towards a stakeholder-centric governance model, the ‘triple bottom line’ and ESG related developments in the Indian context in our previous Ergo which can be accessed here.

In a major push for mining reforms in India, the Parliament recently enacted the Mines & Minerals (Development & Regulation) Amendment Act, 2021 (Amendment Act).

Although the concept of re-labelling has been unclear under law, these proposed changes can be viewed as putting an additional burden on re-labelling companies.

In a recent order in M/s DJ Surfactants v National e-Assessment Centre, Income Tax Department, New Delhi and Others (Writ Petition No. 4814/2021) (Order), the Hon’ble Delhi High Court (High Court) has granted interim stay on the assessment order (Assessment Order) passed in faceless assessment proceedings. The High Court, in doing so, observed that DJ Surfactants (Taxpayer) established a prima facie case of violation of the ‘principles of natural justice’ by National e-Assessment Centre (Tax Department) in doing faceless assessment.

India is fighting the second wave of the COVID-19 pandemic. Businesses, charitable institutions, public-spirited individuals as well as friendly nations are all doing their bit to mitigate the effects of this contagion.

Given the recent surge in COVID-19 cases across the country, the Central Board of Direct Taxes (Apex body for direct taxes administration) (CBDT) has issued circular no. 08/2021 dated 30 April 2021 (Circular).

The first major lot of assessment orders have been passed under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (BMA).

The Securities and Exchange Board of India (SEBI), on 6 October 2017 had introduced the circular on categorization and rationalization of mutual fund schemes in order to bring uniformity across mutual funds by standardizing scheme categories broadly into equity schemes, debt schemes, hybrid schemes, solution oriented schemes and other schemes. Further, on 5 October 2020 SEBI introduced the circular on Product Labelling in Mutual Fund Schemes - ‘Risk-o-meter’ which imposed an obligation on mutual funds to assign a risk level to its schemes, based on the characteristics of the scheme, at the launch of the scheme or a new fund offer. The circular provided for classification of funds under six levels of risk under certain parameters, based on the nature of the instrument or security invested in by the scheme. The primary intent behind these circulars was to aid investors in making an informed decision, to improve transparency and uniformity, and to enable dynamic reporting of risk.

Amidst the second wave of COVID 19 pandemic and restrictions imposed by various state governments, the Securities and Exchange Board of India (SEBI), at the request of listed entities, professional bodies, industry associations, market participants etc., has released a circular no. SEBI/HO/DDHS/DDHS_Div1/P/CIR/2021/557 dated 29 April 2021 (SEBI Circular). The SEBI Circular provides for certain relaxations with respect to compliances under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR) to companies that have listed their non-convertible debentures (NCDs), securitized debt instruments (SDIs), non-convertible redeemable preference shares (NCRPS), municipal debt securities (MDS) or commercial papers (CPs).

The concept of ‘Significant Economic Presence’ (SEP) was introduced in India’s domestic tax law in 2018, with the intent of bringing income of non-residents operating in the online / digital space (such as e-commerce, online streaming, etc.) within the ambit of India-sourced income. However, the concept of SEP remained inapplicable as the thresholds for constituting SEP had not been prescribed. Through a notification dated 3 May 2021 (Notification), the Government of India (Government) has prescribed the relevant thresholds for non-residents to constitute SEP in India, which will come into force from 1 April 2022.

The recent rise in the COVID-19 cases in India led the Hon’ble Supreme Court of India (Supreme Court) to pass another order dated 27 April 2021 (SC Order) in Suo Moto Writ Petition (Civil) No 3/2020 (SC Matter), restoring its earlier order dated 23 March 2020 (Earlier SC Order). Last year in March 2020, Supreme Court vide Earlier SC Order had extended the period of limitation in all legal proceedings, whether condonable or not, with effect from 15 March 2020 till further orders. 

Due to the exigencies created by the COVID-19 pandemic, a worldwide upswing has been observed in global internet use, with many enterprises opting for ‘internet first’ models and customer opting for online transactions. Also, to avert potential health risks to employees, businesses have also increased their dependence on modern automated and interconnected devices (often deployed in remote locations) to monitor business indicators and complete routine operations with limited human intervention. In view of the increasing global data requirements, and impending transition to 5G connectivity (coupled with rising fiberization of telecom networks), global corporations are also looking to leverage satellite technologies for data access and developing satellite internet solutions for global deployment. Such solutions also expected to power new-age technologies such as the internet of things (IoT) and machine to machine communications (M2M), particularly for activities like supply chain management, smart grids, railways, internal security, smart agriculture and healthcare etc., and to extend new services and superior connectivity to remote regions. 

In view of the ‘second wave’ of the COVID-19 pandemic severely spreading across the country, the government of India has issued two notifications (notification numbers 38/2021 and 39/2021 dated 27 April 2021) (Notifications) to extend certain timelines with respect to various tax compliances which are expiring/due on 30 April 2021 to 30 June 2021:

The Delhi High Court in its recent judgment in the case of Concentrix Services Netherlands BV WP (C) 9051/2020 and Optum Global Solutions International BV WP (C) 882/2021 (Taxpayer), ruled that the 10% tax rate on dividends under the India-Netherlands tax treaty (Tax Treaty) would reduce to 5% as per the most favoured nation (MFN) clause in the Tax Treaty.

A three-judge Bench of the Supreme Court (SC), by a common judgement in Asset Reconstruction Company (India) Limited vs. Bishal Jaiswal (15 April 2020, Civil Appeal No 323 of 2021) and related matters, has held that the for the purposes of Insolvency and Bankruptcy Code, 2016 (IBC), balance sheet entries could constitute an acknowledgment of debt under Section 18 of the Limitation Act, 1963 (Limitation Act). 

The Indian government is moving quickly with the changes needed to implement the increase to the foreign investment cap in Indian insurance companies from 49% to 74%, which was announced in this year’s budget speech (2021 Budget Speech).

The Hon’ble President of India promulgated an ordinance being the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2021 dated 4 April 2021 (Ordinance) which inter-alia added Part III-A to the Insolvency and Bankruptcy Code, 2016 (IBC), introducing a framework for prepackaged insolvency resolution (Prepack) for corporate debtors qualifying as micro, small and medium enterprises (MSMEs). The Ordinance comes in the backdrop of the Covid-19 pandemic on MSMEs given that the pandemic exposed many of such businesses to severe financial distress. Last year, around the same time, recognizing the need for protecting smaller businesses, the Government of India, by way of a notification dated 24 March 2020, had also raised the minimum threshold for initiating corporate insolvency resolution processes (CIRP) to INR 1 crore (approx. USD 130,000) from earlier INR 1 lakh (approx. USD 1300). This was followed by a 1 (one) year suspension on initiation of any new insolvency proceedings for defaults occurring on or after 25 March 2020, irrespective of the size of default. 

The Securities and Exchange Board of India (SEBI), on 1 November 2018, had introduced the Unified Payment Interface (UPI) with Application Supported by Blocked Amount (ASBA) as an additional payment mechanism for retail individual investors to invest in certain capital market transactions. UPI is an instant payment system, which was developed by the National Payments Corporation of India. UPI merged several banking features, seamless fund routing and merchant payments under one umbrella, which allows instant transfer of money between the bank accounts of two persons by using a unique payment address.

It is noteworthy that two significant developments have recently taken place in relation to intellectual property laws, a brief summary of which is set out below

It is noteworthy that two significant developments have recently taken place in relation to intellectual property laws, a brief summary of which is set out below

Nearly 5 months after green-lighting Google International LLC’s (Google) acquisition of 7.73% shareholding in Indian telecom disruptor, Jio Platforms Limited (Jio), the Competition Commission of India (CCI), has published its approval order.

The President of India has promulgated an Ordinance (defined hereinafter) abolishing the Intellectual Property Appellate Board (IPAB) which was entrusted with certain matters falling under various Intellectual Property Rights laws (IPR laws).

The Hon’ble Supreme Court of India (Supreme Court) has recently passed an order dated 8 March 2021 (SC Order) in Suo Moto Writ Petition (Civil) No 3/2020 (SC Matter), ending the indefinite extension of limitation period which was granted by the Supreme Court last year vide an earlier order dated 23 March 2020 (Earlier SC Order).

In a rare move, the Competition Commission of India (CCI) for the first time has exercised its sparingly used interim powers to redress competitive harm in the market for online intermediation services for booking hotels in India (OTA Market).

The Supreme Court of India (Supreme Court), vide a common judgment dated 02 March 2021, in a batch of tax appeals, in the lead case of Engineering Analysis Centre of Excellence Pvt Ltd v The Commissioner of Income Tax & Another held that the amount paid by resident Indians to non-resident manufacturers/ suppliers of computer software in terms of distribution agreement or End-User Licence Agreement (EULA) does not amount to royalty and that such payment does not give rise to any income taxable in India and therefore, there is no liability on the resident Indian companies to deduct tax at source on purchase of software under section 195 of the Income Tax Act 1961 (Act). Khaitan & Co represented one of the Appellants, i.e., Concentrix Services India Private Limited (the Appellant), before the Supreme Court in one of the connected appeals.

New rules have been announced recently by the Union Ministry of Home Affairs, Government of India (MHA) for Overseas Citizens of India cardholders (OCI cardholders) vide MHA notification of 4 March 2021 (OCI Notification 2021).

In March 2019, Department for Promotion of Industry and Internal Trade (DPIIT) had invited comments from stakeholders and the public on a draft e-commerce policy (2019 Draft Policy). Among other items, the 2019 Draft Policy proposed that measures should be taken to regulate cross-border data flow, establish a level playing field for domestic and foreign e-commerce players, boost sale of domestic products through e-commerce, and generally regulate e-commerce in India.

The Supreme Court of India on 2 March has put to rest a long-standing contentious issue surrounding the characterisation of income in the hands of non-resident software manufacturers and suppliers in a landmark judgment in the case of Engineering Analysis Centre of Excellence Private Limited (Civil Appeal Nos. 8733-8744 of 2018).

Following the footsteps of its sister states – Nagaland and Sikkim – Meghalaya has become the third state to regulate gaming and gambling under a license-based regime. This step has been taken by the Government of Meghalaya at a time when the gaming industry is facing heat on account of legislative prohibition or court action across India. The Honourable Governor of Meghalaya has promulgated the Meghalaya Regulation of Gaming Ordinance 2021 (Meghalaya Ordinance #1 of 2021) (Ordinance) on 13 February 2021. The Ordinance seeks to regulate both ‘games of skill’ and ‘games of chance’ involving betting or wagering. The Ordinance has been notified and published for general information on 17 February 2021. However, the Ordinance is not in force as on date.

In the matter of Piyush Subashbhai Ranipa v. The State of Maharashtra, Anticipatory Bail Application No 336 of 2021 (Application), the Learned Single Judge of the Bombay High Court (Court), rejected the anticipatory bail to the Applicant (defined hereinafter) in a criminal matter for the various offences under Indian Penal Code 1860 (IPC), The Copyright Act 1957 (Copyright Act) and The Trade Marks Act 1999 (Trade Marks Act). The Court held that the offences under Section 63 of the Copyright Act and Section 103 of the Trade Marks Act (collectively, Acts) are non-bailable.

In what may not please many businesses, the Governor of Haryana granted his assent to the Haryana State Employment of Local Candidates Bill, 2020 (Bill) on 26 February 2021. The Bill, which reserves 75% of the jobs in specified private sector posts for local candidates, was published in the Official Gazette for general information on 2 March 2021 and will take effect on such date as may be notified by the state government. Interestingly, the Deputy Chief Minister of Haryana has, on his official Twitter handle, stated that the Bill has been brought into effect, although there does not appear to be any official notification indicating the same.

One of the key drivers behind the reorganization of the erstwhile State of Jammu & Kashmir (‘J&K’) into the Union Territory of J&K (‘UT’) with effect from 31 October 2019, was to usher in a new era of development based on the two pillars of industry and services.

Until now content on OTT platforms such as Netflix, Amazon Prime Video, Hotstar and others were largely unregulated, allowing them to cater to varied sensibilities. However, content on OTT platforms has also courted controversy time and again. 

The Indian government has come up with a new set of rules and regulations to regulate social media platforms, messaging services, OTT platforms and news portals. 

The Reserve Bank of India (RBI) issued a circular on 12 February 2021 (Circular) to impose restrictions on investments in non-banking finance companies (NBFC) by investors from Financial Action Task Force (FATF) non-compliant jurisdictions. The restrictions are applicable with immediate effect from 12 February 2021 onwards.

A three-judge bench of the Supreme Court of India (Supreme Court), comprising Justices R.F. Nariman, Navin Sinha, and K.M. Joseph, vide a judgment dated 11 February 2021 in the case of Chintels India Limited v Bhayana Builders Private Limited held that an appeal under Section 37(1)(c) of the Arbitration and Conciliation Act, 1996 (1996 Act) is maintainable against an order refusing to condone delay in filing a setting aside application under Section 34 of the 1996 Act.

On 15 February 2021, the Department of Science and Technology (DST) issued the ‘Guidelines for acquiring and producing Geospatial Data and Geo-spatial Data services including Maps’ (Guidelines). Acknowledging the benefits of availability of geospatial data and modern mapping technologies, the Guidelines seek to do away with the prior approvals, licenses and other restrictions on the collection, generation, preparation, dissemination, storage, publication, updating and/or digitization of geospatial data and maps in India.

The Government of Maharashtra (GoM) has by the Maharashtra Stamp (Amendment and Validation) Ordinance 2021 (Ordinance) amended Section 5 (Instruments Relating to Distinct Matters), Article 6 (Agreement Relating to Deposit of Title Deeds, Pawn, Pledge or Hypothecation) and Article 40 (Mortgage Deed) of Schedule I of the Maharashtra Stamp Act, 1958 (Maharashtra Stamp Act). The Ordinance has been specifically promulgated to clarify and reinforce the judgment of the Hon’ble Supreme Court of India in the matter of Chief Controlling Revenue Authority v Coastal Gujarat Power Limited (Civil Appeal No. 6054 of 2015) dated 11 August 2015 (Coastal Gujarat Judgment) and is in continuation of the circular issued by the Office of the Inspector General of Registration and Controller of Stamps of the Government of Maharashtra dated 28 September 2015 (GoM Circular).

The proposed reclassification regime will naturally streamline the process for promoter reclassification, as several gaps are being filled and timelines tightened. Once implemented, the revised norms are likely to benefit both incoming and outgoing promoter communities. Overall, a definite win-win, only with a few loose ends. 

The Central Government has amended the rules relating to Importer-Exporter Code (IEC) vide Notification No. 48/2015-2020 dated 12 February 2021.

One criticism could be that the government failed to meet the expectations of the salaried class on some relief in the form of a tax cut or direct stimulus payments.

In an important and perhaps a much-needed move, the Employees’ Provident Fund Organisation (EPFO) has launched an electronic facility for principal employers (i.e., establishments engaging contract labour through contractors / manpower service providers) whereby they may be able to verify compliance by their contractors with the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (EPF Act) vis-à-vis the contract labour. By way of its circular dated 1 February 2021, the EPFO has directed the regional officials to take cognizance of the facility and conduct webinars with major establishments engaging contract labour to ensure adequate dissemination of information about the facility.

On 1 February 2021, the Indian Finance Minister announced a long awaited increase in the foreign direct investment (FDI) cap in Indian insurers from 49% to 74% as part of her budget (2021 Budget Speech). This development has been under consideration for some time. The Finance Minister had during her budget speech for the year 2019-20 also announced that suggestions for further opening up of FDI in insurance will be examined in consultation with all stakeholders. The FDI cap for insurance intermediaries was also increased to 100% in November 2019. This announcement is therefore the latest step towards attracting greater foreign investment in the Indian insurance sector.

The Ministry of Corporate Affairs (MCA) has notified the Companies (Corporate Social Responsibility Policy) Amendment Rules 2021 (Amendment Rules) to amend the Companies (Corporate Social Responsibility Policy) Rules 2014 (Rules). The Amendment Rules build on the draft amendments that were introduced in March last year and to further implement some of the recommendations of the Report of the High-Level Committee (HLC) appointed by MCA in 2018. With exception of rules pertaining to registration of implementation agencies with MCA, other the Amendment Rules, came into effect from 22 January 2021.

The Securities and Exchange Board of India (SEBI) issued a consultation paper on 27 January 2021 on the introduction of provisions relating to the appointment / re-appointment of persons who fail to get elected as Whole Time Directors (WTDs) / Managing Directors (MDs) at the general meeting of a listed entity. This has been done with a view to promoting corporate governance and upholding shareholder supremacy in the functioning of listed entities.

On 22 January 2021, the Competition Commission of India (CCI) published its market study on the Indian telecom sector (Market Study). Initiated by the CCI in January 2020 as part of its advocacy measures, the Market Study aims to analyse competition challenges in the wake of technological innovations, and regulatory changes.

The Government of India in May 2020 made a series of announcements as a part of the Atmanirbhar Bharat Abhiyan to provide stimulus to the economy to beat the repercussions of Covid-19 and lockdown restrictions.

Indian Union Budget 2021-22: The government must rationalise GST rates for inputs and input services with the corresponding output supplies to avoid accumulation of tax credits

The new normal social interaction pattern of social distancing, quarantines and lockdowns has unsurprisingly not only resulted in an increased demand for digital content but has also acted as a catalyst in reforming content development

Recently, the Mumbai Bench of the Income Tax Appellate Tribunal (Tribunal) delivered an interesting ruling in the case of Unnikrishnan V S v ITO [ITA Nos. 1200 and 1201/Mum/2018] on taxation of perquisites arising out of equity incentives to a non-resident which were granted in India. The Tribunal held that if shares are allotted under an equity incentive scheme to a non-resident individual in connection with the services rendered by him in India, then regardless of the residential status of the individual, such perquisite will be taxable in India.

We need to understand that FDI is not just a capital injection but package of technology and expertise, which is required to steer the Indian economy

In yet another case involving the real estate sector, the Competition Commission of India (CCI) dismissed allegations of abuse of dominant position by Haryana Urban Development Authority. (HUDA), a statutory urban planning agency.

A three-judge bench of the Hon’ble Supreme Court in the case of M/s N.N. Global Mercantile Pvt. Ltd. v. M/s Indo Unique Flame Ltd. & Ors by judgment dated 11.01.2021 expressed a differing view on the issue of invalidity and unenforceability of an arbitration agreement in an unstamped underlying contract and referred the issue to a Constitution Bench in light of the conflicting view it expressed on a well-settled issue. The Supreme Court had previously held the view that the court will not act on an arbitration clause in an unstamped agreement unless the stamp duty was paid and passed detailed directions as to the procedure to be adopted where the agreement /instrument was not properly stamped, including impounding of the unstamped agreement / instrument. The present three-judge Bench did not agree with this position and overruled the previous precedent on the issue.

The Competition Commission of India (CCI) took suo moto cognisance of alleged cartelisation between Romsons Scientific & Surgical Industrial Private Limited (Romsons / OP-1) and BSN Medical Private Limited (now known as Essity India Private Limited) (BSN / Essity / OP-2; along with Romsons, referred to as the OPs) in an open tender for surgical tapes invited by All India Institute of Medical Sciences (AIIMS).

The Securities and Exchange Board of India (SEBI) vide various circulars in October and November 2020 had substantially streamlined the process of issuance and listing of debt securities. SEBI through its circular dated 03 November 2020 had specified comprehensive guidelines for creation of security and due diligence to be carried out by the debenture trustee (s) in relation to issuance of listed debt securities (Circular).

Adam Smith’s free-market economy pivots around minimal government intervention so that markets can self-regulate and operate optimally. Unfortunately, in many cases, such environments allow the rise of monopolies through organic or inorganic growth. While true monopolies are rare in a free market economy, lack of government intervention often allows the rise of a single large player with many minor players with limited competitive ability. In these situations, the large firm is considered to have “monopoly power”.

In the past we have discussed at length the role played by proxy advisors and the regulatory framework set up by the Securities and Exchange Board of India which can be found here. This update discusses the latest SEBI Circular dated 31 December 2020, which amends the SEBI Circular titled ‘Procedural Guidelines for Proxy Advisors’ dated 3 August 2020.

By way of a notification dated 2 January 2021 (Notification), the Labour Department, Government of Karnataka, has permitted all shops and commercial establishments employing 10 or more persons to remain open for all days of the week throughout the year for a period of 3 years from the date of publication of the Notification in the Official Gazette*. The move comes after the state government’s imposition of night curfew in view of the spread of the new variant of SARS-CoV-2 and its subsequent withdrawal in the wake of widespread criticism.

To facilitate uniform, Know Your Customer (KYC) compliance requirements for all legal entities, the Reserve Bank of India (RBI) on 18 December 2020, amended the Master Direction - Know Your Customer Direction dated 25 February 2016 (Master Directions) (Amendment). This Amendment seeks to mandate all legal entities whose accounts are opened prior to 1 April 2021, to upload their KYC data onto the Central KYC Records Registry (CKYCR), pursuant to Rule 9 (1A) of the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 (PML Rules). The Amendment comes into force with immediate effect.

On 8 December 2020, the Ministry of Finance, Government of India notified the Foreign Exchange Management (Non-debt Instruments) (Fourth Amendment) Rules, 2020 (NDI Amendment Rules). The NDI Amendment Rules (i) notified increase in the sectoral cap for foreign direct investment (FDI) in the defence sector to 74%; and (ii) issued certain clarifications on the present policy on investments from countries sharing land borders with India.

Keeping in line with its focus to streamline the debt public issue process, across the gamut of securities, SEBI issued a circular on 23 November 2020 (Circular), introducing the Unified Payments Interface (UPI) mechanism as an additional mode for making online applications for public issues of various debt securities such as debentures, non-convertible redeemable preference shares, securitised debt instruments and municipal debt securities. The Circular mandates the adding on of the UPI mechanism as an optional application feature for those debt public issues which open for subscription on or after 1 January 2021.

A 'proxy adviser' is any person who provides advice, through any means, to institutional investors or shareholders of a company, in relation to the exercise of their rights in the company, including recommendations on public offerings or voting recommendations on agenda items. Since the implementation of the Companies Act 2013 (the 'Act') and enhanced corporate governance standards under Securities and Exchange Board of India (SEBI)(Listing Obligations and Disclosure Requirements) Regulations 2015, the role of proxy advisers has become more prominent. Over the last few years, proxy advisers have been at the forefront of advocating compliance with stringent corporate governance norms. Their recommendations have been responsible for shaping increased disclosures, transparency and compliance with the best corporate governance practices by many listed companies in India.

On 3 November 2020 a single-judge bench of the High Court of Gujarat determined the scope and applicability of Sections 9 and 47 of the Arbitration and Conciliation Act 1996 in GE Power Conversion India Private Limited v PASL Wind Solutions Private Limited (R/PETN under Arbitration Act 131/2019 with R/PETN under Arbitration Act 134/2019). Importantly, while dealing with the objections raised under Section 48 of the act, the court also delved into the highly debated question of whether two Indian parties can agree to choose a seat of arbitration outside India. This issue is now ripe to be finally decided by the Supreme Court, provided that this matter reaches the apex court.

Alternate dispute resolution systems such as arbitration, stand on a different footing than litigation in the judicial system. Procedural flexibility and party autonomy, being the key factors as to why parties opt for arbitration, in fact aid the arbitration process to better adapt to the “new normal” in this pandemic. The widespread use of information technology presents a real advantage over traditional litigation.

The International Financial Services Centre Authority, vide its circular dated 9 December 2020, titled “Alternative Investment Funds (AIFs) in International Financial Services Centres (IFSC)” (Circular) seems to have uplifted the spirits of fund managers and investors, both in India and globally. The Circular has introduced some far-reaching amendments to SEBI (International Financial Services Centres) Guidelines 2015 and the operating guidelines for alternative investment funds (AIF) operating in an International Financial Services Centre (IFSC). Notably, these amendments are being welcomed as a panacea to some of the long-term issues that were being faced by the fund management industry in India. In order to ensure that the IFSC regime compares well with its peer global financial services regimes, the following amendments have been introduced by the Circular, in relation to the AIF regime in IFSCs

It is not uncommon for joint venture partners to face impasses on operational matters during the lifecycle of a JV. These differences could be wide ranging, from day-to-day business issues to high-level strategic decisions such as capital expenditure, business expansion, entering into a new line of business, raising of funds, changing the business plan and sale or disposal of business or assets

Following the footsteps of Telangana and Andhra Pradesh (refer to our Ergo), the state of Tamil Nadu has also amended its laws to restrict online gaming within its territory. The Honourable Governor of Tamil Nadu promulgated the Tamil Nadu Gaming and Police Laws (Amendment) Ordinance 2020 on 20 November 2020 (Ref: Tamil Nadu Ordinance Number 11 of 2020) (Ordinance). The Ordinance amends the Tamil Nadu Gaming Act, 1930 (TN Gaming Act) and extends its territorial scope to cover the entire state of Tamil Nadu. Gaming related provisions of the Chennai City Police Act, 1888 and the Tamil Nadu District Police Act, 1859 are no more applicable in the State of Tamil Nadu.

In a positive development, the Competition Commission of India (CCI) has removed the Non-Compete Covenants (NCCs) disclosure requirement from merger filings. To that effect, the CCI amended the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 on 26 November 2020 (Amendment).

The Department for Promotion of Industry and Internal Trade (DPIIT) vide its circular dated 9 November 2020 has introduced revised standard operating procedures (Revised SOP) to process foreign direct investment (FDI) proposals.

Compounding of contraventions under the Foreign Exchange Management Act, 1999 (FEMA) is governed by the Foreign Exchange (Compounding Proceedings) Rules, 2000 and the Reserve Bank of India’s (RBI) Master Direction on Compounding of Contraventions under FEMA, 1999 dated 1 January 2016 (Compounding Direction). On 17 November 2020, the RBI issued a circular (RBI Circular) revising the Compounding Direction with the aim of inter alia aligning its provisions with the latest applicable laws, simplifying the regulatory framework, and regulating dissemination of information in the public domain.

The increased defaults by a few financial institutions and the complications faced by debenture trustees in expeditious enforcement of collateral for debt securities has prompted the securities market regulator, Securities Exchange Board of India (SEBI) to review its regulatory framework for listed / “to be” listed debt securities and public issue of debt securities and debenture trustees to plug certain loopholes. In furtherance of this objective, and pursuant to the observations made in the SEBI Consultation Paper on review of the regulatory framework for corporate bonds and debenture trustees dated 25 February 2020 (SEBI Consultation Paper) , a slew of amendments (collectively, SEBI Amendments) have been notified recently to the SEBI (Issue and Listing of Debt Securities) Regulations, 2008 (ILDS Regulations), SEBI (Debenture Trustees) Regulations, 1993 (DT Regulations) and the SEBI (Listing Obligations and Disclosure Requirements), 2015 (LODR Regulations) to ensure adequate disclosures and strengthen the role of trustees for effective discharge of their role.

The Insolvency and Bankruptcy Board of India (IBBI) on 13 November 2020 issued the Insolvency and Bankruptcy Board of India (Liquidation Process) (Fourth Amendment) Regulations, 2020 (Amendment) which introduced seminal changes to the liquidation regime under the Insolvency and Bankruptcy Code, 2016 (IBC). The Amendment has been introduced on the back of the discussion paper issued by IBBI on 26 August 2020 on Corporate Liquidation Process (Discussion Paper). This Amendment proposes solutions to resolve 2 major issues which plagued the efficacious and expeditious completion of a corporate liquidation process under the IBC, (a) assignment by a creditor of its claims / interest during liquidation; and (ii) disposal / assignment of non-readily realisable / illiquid assets. In this paper we are analysing these two issues, the manner in which the Amendments modify the corporate liquidation framework vis-à-vis these issues and their impact on the corporate liquidation process.

The senior partner at Khaitan & Co, a dealmaker, and institution builder talks about how leaders of corporate India never had to step out of their homes to do big deals, his journey from Kolkata to building Khaitan & Co into one of the largest law firms in India, the changes that the Covid-19 pandemic brought about to corporate India, the art of deal making, and the future of the legal industry

'Compared to the 2008 global financial crisis, access to capital will not be a problem as the US PE and strategic investors alone are sitting on almost $ 5 trillion of dry powder which needs to be deployed in some form'

In Bennett Coleman & Co Ltd (Times Now) v ARG Outlier Media Pvt Ltd (Republic TV) (IA No 7306/2017 in CS [COMM] 434/2017), the Delhi High Court has issued an interim order restraining Republic TV from using the mark NEWSHOUR, but has not intervened with regard to its use of the tagline “nation wants to know”.

The Central government has, with effect from 9 November 2020, brought under the jurisdiction and control of the Ministry of Information and Broadcasting (MIB): (a) films and audio-visual programmes made available by online content providers; and (b) news and current affairs content on online platforms. This change in the regulatory landscape for Over-The-Top (OTT) platforms and digital media news aggregators have been introduced through the notification of the Government of India (Allocation of Business) Three Hundred and Fifty Seventh Amendment Rules, 2020 (Amendment Rules).

MIC Redwood 1 RSC Limited, Abu Dhabi, United Arab Emirates (Fund) was recently conferred the tax exemption intended for a sovereign wealth fund (SWF) under the Income-tax Act, 1961 (Tax Act).

The Karnataka High Court (HC) in the case of Padmini Products Private Limited vs DCI (ITA No 154 of 2014) allowed depreciation on intangible assets acquired by Padmini Products Private Limited (Taxpayer or Company) upon conversion from a firm into a company.

The year 2020 has given many jolts to businesses. As companies across sectors continue to grapple with the ongoing COVID-19 pandemic, those located in Haryana may now have to gear up for localism-driven recruitment as envisaged under the Haryana State Employment of Local Candidates Bill, 2020 (Bill). The Bill, when implemented, would reserve 75% of the jobs in specified private sector posts for local candidates. This update attempts to bring out the salient features of the Bill and briefly critiques the same from legal and practical standpoints.

If there is one thing that COVID-19 has reminded us, it is that we cannot predict everything. In its fullblown shape, the pandemic disrupted businesses, and several entrepreneurs made attempts to resort to force majeure clauses in their commercial arrangements with third parties to get some respite from their obligations.

The New OSP Guidelines supersede the ‘terms and conditions – Other Service Provider Category’ dated 5 August 2008 along with all its amendments (“Old OSP Guidelines”).

Last month on 20 October 2020, the Patent (Amendment) Rules 2020 (Revised Rules 2020) came into force whereby the provisions pertaining to filing of priority document and filing of statement of commercial working were amended. Our Ergo on the Revised Rules 2020 can be accessed here. Now, the Patent (2nd Amendment) Rules, 2020 (2nd Revised Rules 2020) have been issued on 4 November 2020 with immediate effect.  The key highlights of the 2nd Revised Rules 2020 are broadly set out below

The Securities and Exchange Board of India (SEBI) has issued a circular dated 03 November 2020 (Ref: SEBI/HO/CFD/DIL1/CIR/P/2020/215) (2020 Amendment Circular), amending certain provisions of the SEBI Circular dated 10 March 2017 (Ref: CFD/DIL3/CIR/2017/21)  as amended and modified from time to time (2017 Circular). The 2020 Amendment Circular specifies detailed requirements that listed entities need to comply with while undertaking schemes of arrangement or while being involved in schemes of arrangement.

The Securities and Exchange Board of India (SEBI) has issued Guidelines for rights issues of units by unlisted Infrastructure Investment Trusts (InvIT) (Guidelines) through its circular dated 4 November 2020. SEBI introduced the framework for private unlisted InvITs in April 2019, however, the mechanism for further issues of units by unlisted InvITs under the SEBI (Infrastructure Investment Trusts) Regulations, 2014 (InvIT Regulations) remained restricted to private placements through the issuance of a placement memorandum. The Guidelines are expected to ease the fund-raising process for unlisted InvITs and supplement the increasing market interest in unlisted InvITs.

The Government of India has been paying special attention to the law relating to arbitrations in India and has amended the Arbitration and Conciliation Act, 1996 (Act) in 2015 and thereafter again in 2019. These amendments have generally been pro-arbitration, however, some proposed amendments were criticized by the international and domestic arbitration community.

On 5 November 2020, the Department of Telecommunications (DoT) released ‘New Guidelines for Other Service Providers’ (New OSP Guidelines). The New OSP Guidelines supersede the ‘terms and conditions – Other Service Provider Category’ dated 5 August 2008 along with all its amendments (Old OSP Guidelines). With the New OSP Guidelines, the DoT has made significant alterations to the preceding regime that are expected to have far-reaching benefits for the outsourcing industry in India.

The Department for Promotion of Industry and Internal Trade (DPIIT) on 28 October 2020, has issued the consolidated Foreign Direct Investment (FDI) policy circular of 2020 (Revised Policy). The DPIIT has released an updated consolidated FDI policy after a long gap of 3 years since the last one was which was issued on 28 August 2017.

The Income Tax Appellate Tribunal (Tribunal), Delhi bench in the case of Augustus Capital Pte Ltd [2020] (120 taxmann.com 325) (Taxpayer) ruled that the capital gain arising on transfer of shares of a Singapore company holding Indian assets is not taxable in India on the basis that the small shareholder exemption claimed by the taxpayer applies retrospectively from 1 April 1961.

The app ban is part of an wider effort by the Indian government to curtail Chinese involvement in the country's businesses.

In the context of GST, there is a rampant increase in the number of arrests made by the enforcement agencies drawing powers from Section 69 of the Central Goods and Services Tax (CGST) Act.

The Reserve Bank of India (RBI) has, in exercise of its powers under the Payment and Settlement Systems Act 2007, notified the Framework for Recognition of a Self-Regulatory Organisation for Payment System Operators (SRO Framework) on 22 October 2020. The SRO Framework can be described as a regulatory nudge which aims to encourage banks and non-bank Payment System Operators (PSOs) to establish a self-regulatory body, whose agenda would be to proactively frame and enforce rules and standards relating to the conduct of its member entities. 

On 14 October 2020, the Ministry of New and Renewable Energy, Government of India (MNRE) issued Guidelines for Tariff Based Competitive Bidding for Procurement of Power from Grid Connected Wind Solar Hybrid Projects (Guidelines) under Section 63 of the Electricity Act, 2003 (Electricity Act) which was notified on its website on 21.10.2020. The Guidelines have been issued in pursuance of the National Wind-Solar Hybrid Policy, 2018 (Policy) to provide a framework for procurement of electricity from the Inter-State Transmission System (ISTS) grid connected wind-solar hybrid power projects (Hybrid Projects) through a transparent process of bidding.

Following the footsteps of its neighbouring state Telangana, effective 25 September 2020, the Andhra Pradesh Government has banned all forms of real money games in the State. This comes as a serious blow to one of the fastest growing industries in India. On 23 September 2020, the Honourable Governor of Andhra Pradesh promulgated the Andhra Pradesh Gaming (Amendment) Ordinance 2020 [Andhra Pradesh Ordinance #13 of 2020] (Ordinance) amending the Andhra Pradesh Gaming Act 1974 (AP Gaming Act). The Ordinance has made significant amendments to the AP Gaming Act and has extended its application to online gaming activities. The Ordinance prohibits all forms of real money gaming from being conducted in the state of Andhra Pradesh with immediate effect. These amendments to the AP Gaming Act have been made by promulgation of the Ordinance pursuant to the extraordinary legislative powers of the Governor under Article 213 of the Constitution of India since the AP State Legislature is currently not in session. The Ordinance will have to be tabled before both the houses of the AP State Legislature once in session and will have to be approved with or without changes within six weeks of reassembling, else it will cease to operate.

The Securities and Exchange Board of India (SEBI) vide the SEBI (Alternative Investment Funds) (Amendment) Regulations 2020 (Amendment Regulations), which were notified on 19 October 2020, have amended the SEBI (Alternative Investment Funds) Regulations 2012 (AIF Regulations) to clarify the position with respect to: (I) conditions to be met by the key investment team of the Manager of the Alternative Investment Fund (AIF), and (II) composition and responsibility of the body taking the investment decisions of the AIF other than the Manager (referred to as the Investment Committee or otherwise). The Amendment Regulations do, to some extent, clear the air around the subjectivity with which these issues were being dealt with by SEBI until now on a case by case basis. However, it also appears to raise some concerns, amongst alternate asset manager, around the increasingly prescriptive nature that the AIF Regulations are taking.

E-commerce websites play a limited but complicated role in the functioning of their platforms. Indian law recognises this and accounts for it with a combination of legislation and judicial precedents and draws a fine line for placing liability for the sale of such illegal products on e-commerce websites.

The Patent (Amendment) Rules 2020 (Revised Rules 2020) have come into force from 20 October 2020. The key highlights of the Revised Rules 2020 are broadly set out below

In a landmark ruling, the Delhi bench of the Income Tax Appellate Tribunal (Tribunal) in the case of Giesecke & Devrient Pvt Ltd (Taxpayer) v. The Additional CIT (ITA No. 7075/DEL/2017), held that the Dividend Distribution Tax (DDT) payable by an Indian company should not exceed the rate specified in the applicable tax treaty between India and the country of tax residence of the shareholder.

On the heels of the Madras High Court verdict in D Siluvai Venance v State which sought to address the regulatory void in the online and virtual gaming space (refer to our Ergo), the Gujarat High Court has pursuant to its judgment in the case of Amit Nair v State of Gujarat pronounced on 29 September 2020, reiterated the need for regulation of online gambling. The division bench of the Gujarat High Court has directed the state government to look into the issue of online gambling and take action in accordance with the law in larger public interest before it is too late.

Recently, the Hon’ble National Company Law Appellate Tribunal has passed an order reiterating that once a resolution plan is approved by the Committee of Creditors (CoC), the successful resolution applicant cannot be permitted to be withdraw its plan.

The Department for Promotion of Industry and Internal Trade, Ministry of Commerce & Industry, Government of India (DPIIT) had, through the Press Note 4 of 2019 dated 18 September 2019 (PN4), introduced a foreign direct investment (FDI) regime for entities engaged in the news digital media sector.

The Foreign Contribution (Regulation) Amendment Act 2020 (Amendment Act) has been notified by the Central Government (Government) on 29 September 2020, to amend certain provisions of the Foreign Contribution (Regulation) Act 2010 (Act / FCRA). Our earlier updates on the Amendment Act are available here and here.

A contentious issue in the interplay between the Insolvency and Bankruptcy Code, 2016 (IBC) and the Limitation Act, 1963 (Limitation Act) has been the applicability of Section 18 of the Limitation Act (Section 18), which stipulates that a fresh period of limitation shall be computed from the time of the acknowledgement of liability in writing before the expiration of the prescribed period of limitation. In the context of IBC, the question is whether such an acknowledgement of debt in entries in a balance sheet would extend the limitation period for the purposes of filing an application for the initiation of corporate insolvency resolution process (CIRP) under Section 7 of the IBC (Section 7 Application).

The Foreign Contribution (Regulation) Amendment Act 2020 (Amendment Act) has been notified by the Central Government (Government) on 29 September 2020, to amend certain provisions of the Foreign Contribution (Regulation) Act 2010 (Act / FCRA). Our detailed update on the changes introduced vide the Amendment Act is available here.

The Securities and Exchange Board of India (SEBI) has notified the fourth amendment to the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (SEBI ICDR Regulations) on 28 September 2020 (Amendment) with the intention of permitting listed companies to undertake rights issues with brevity. The Amendment eases the eligibility requirements, significantly truncates the disclosure regime and introduces supportive changes to existing legal norms, applicable to rights issues. 

The Foreign Contribution (Regulation) Amendment Act 2020 (Amendment Act) has been notified by the Central Government (Government) on 29 September 2020, to amend certain provisions of the Foreign Contribution (Regulation) Act 2010 (Act / FCRA).

Telecom giant Vodafone has won a contentious tax dispute with the Republic of India in international arbitration, invoking India’s investment protection treaty with the Netherlands, in a decision announced September 25. 

Recently, the Permanent Court of Arbitration at the Hague passed an award in favour of the telecom giant Vodafone, in an international arbitration initiated by Vodafone International Holdings BV (Vodafone) against the Republic of India under the  ‘Agreement for the Promotion and Protection of Investments’ that India had entered into with the Kingdom of Netherlands (Agreement).

Over the recent years, cashless payments have become one of the preferred modes of retail transaction in India – particularly in urban markets. For instance, UPI, a real time fund transfer interface, has significantly scaled-up since its launch, growing from 0.09 million transactions worth 30.9 million in the month of August 2016 (when it launched) to clocking 56 billion transactions worth INR 2.85 trillion in the month of August 2020. While the impetus on cashless payments was fuelled in part by focussed government campaigns, the current challenges stemming from the Covid-19 pandemic have perhaps made cashless modes of payment the most dependable option for consumers and retailers across most cities in India – the implication being that the cashless payment industry is poised to double to $135.2 billion by 2023.

In line with Government’s widely promoted objective of ensuring efficiency and transparency in tax administration, the Government has notified the much-awaited Faceless Appeal Scheme, 2020 (Scheme) vide Notification No. 76/2020 dated 25 September 2020 to provide a framework for disposal of appeals by Commissioner of Income tax (Appeals) (CIT(A)) by

On 18 September 2020, the Telecom Regulatory Authority of India (TRAI) issued two directions (Directions) dealing with publication and advertisement of tariffs by telecom service providers (TSP) with an aim to increase transparency in tariff plans. 

After the clearance of the Industrial Relations Code, 2020 (IRC 2020) by the Lok Sabha, the Rajya Sabha also passed the IRC 2020 on 23 September 2020. It is noteworthy that prior to this swift approval, the Industrial Relations Code, 2019 (IRC 2019) was introduced in November 2019 and thereafter was referred to the Standing Committee on Labour 2019-2020 (Standing Committee) for comments.

On 19 September 2020, the Government of India introduced the Occupational Health, Safety and Working Conditions Code, 2020 (Code 2020) in the Lok Sabha. The bill has since received clearance from both houses of Parliament, although it awaits the assent of the President of India and subsequent notification(s) of the government to be brought into effect.

On 23 September 2020, Parliament passed the Code on Social Security, 2020 (Code 2020). The introduction of the bill in the Lok Sabha on 19 September 2020 and its subsequent clearance by both houses of Parliament come after the Code on Social Security, 2019 (Code 2019) was introduced in Parliament last year and subsequently sent to the Standing Committee on Labour 2019-2020 for evaluation.

On 16 May 2020, the government had announced raising the Foreign Direct Investment (FDI) limit in defence manufacturing, under the automatic route, from 49% to 74%.

The Telecom Regulatory Authority of India (TRAI) issued its ‘Recommendations on Cloud Services’ on 14 September 2020 (Recommendations). The Recommendations are a culmination of an extensive consultation process that has virtually spanned over the last 8 years.

The Reserve Bank of India (RBI) on 04 September 2020 released the revised Master Direction – Reserve Bank of India (Priority Sector Lending – Targets and Classification) Directions 2020 (Revised PSL Guidelines).

On 3 September 2020, the Central Drugs Standard Control Organization (CDSCO), the national regulatory body for Indian pharmaceuticals and medical devices released draft classifications for newly notified devices. This is a significant development. As covered in an earlier ERGO from our firm available here, in February 2020, the Ministry of Health and Family Welfare (MoHFW) had: (a) adopted a “catch-all” definition of medical devices bringing all devices which were previously excluded (New Notified Devices) within the scope of the Medical Device Rules, 2017; and (b) required all importers and manufacturers to provisionally register these New Notified Devices with the CDSCO, effective from 1 April 2020. Upon registration, such New Notified Devices would enjoy exemptions from the remaining provisions of the Medical Device Rules, 2017 for a period 30 – 42 months (based on the Class of medical device).

The Telecom Regulatory Authority of India (TRAI) issued its recommendations on regulatory framework for ‘over-the-top’ (OTT) communications services on 14 September 2020 (Recommendations). The Recommendations have been issued pursuant to a reference letter from Department of Telecommunications (DoT) dated 3 March 2016 by way of which DoT had sought recommendations of TRAI on net neutrality and other related aspects such as economic, security and privacy issues, and regulatory framework for OTT services, etc. Over the course of the last 4 years, TRAI has issued different sets of recommendations addressing these aspects and the present Recommendations lay emphasis on regulation of OTT communication services.

Depending on the extent of financial distress, some companies are considering laying off some of their existing workforce. But the question remains, can financial distress be a ground for initiating layoffs in the wake of a pandemic?

In our previous post (Previous Post), we analysed the Reserve Bank of India’s (RBI) circular on Resolution Framework for Covid-19 Related Stress dated 6 August 2020 (August 6 Circular) that provided for a limited time window for resolution of stress of certain categories of borrowers affected by the Covid-19 pandemic (Pandemic) while permitting the eligible borrower accounts to retain their status as ‘standard’. The August 6 Circular proposed constitution of an expert committee headed by Shri K. V. Kamath (Expert Committee) to make recommendations to the RBI on the required financial parameters, along with the sector-specific benchmark ranges for such parameters, to be factored into the resolution plans prepared for eligible corporates, under the August 6 Circular.

The launch of the National Digital Health Mission (NDHM) was announced by Sri Narendra Modi, India’s Prime Minister on the 74th Independence Day on 15 August 2020. In this regard, the National Health Authority (NHA), Ministry of Health and Family Welfare (MoHFW), Government of India, released the Draft Health Data Management Policy (Draft Policy) on 26 August 2020 as a part of the NDHM for feedback and stakeholder comments to be submitted by 21 September 2020.

The National Company Law Appellate Tribunal, Delhi (NCLAT) in the case of Sh. Sushil Ansal Vs Ashok Tripathi and Ors, has reiterated that a decree-holder though covered under the definition of creditor under Section 3(10) of the Insolvency and Bankruptcy Code (IBC) would not fall within the class of financial creditors and therefore, a decree holder cannot initiate a corporate insolvency resolution process (CIRP) against a corporate debtor with an object to execute a decree.

The Delhi High Court (HC) in CIT v. Nalwa Investment Ltd ITA 822, 853, 935, and 961 of 2005 has held that transfer of shares held as stock-in-trade, in the scheme of amalgamation constitutes a taxable event under the head ‘profits and gains from business and profession’.

India’s competition authority – the Competition Commission of India (CCI) has dismissed two cases of similar nature involving allegations of collusive bidding by several manufacturers of 14.2 kg LPG cylinders. In 2009 and 2010, LPG cylinder manufacturers had quoted identical or near identical prices in two tenders floated by the State-Owned Enterprise (SOE), Bharat Petroleum Corporation Limited (BPCL) for supply of 14.2 kg LPG cylinders  which had prompted the CCI to direct an investigation. However, considering the nature of the LPG cylinder market in India, confirmed by the Supreme Court of India (Supreme Court) in the Rajasthan Cylinder case,  the CCI closed both cases without delving into the individual conduct of the cylinder manufacturers.

Section 50 of the Central Goods and Services Tax Act 2017 (CGST Act) was amended1 to provide that the interest on tax payable in respect of supplies made during a tax period and declared in the return for the relevant period furnished after the due date, except after commencement of any proceedings under section 73 or section 74 of the CGST Act in respect of the said period, shall be levied on that portion of the tax that is paid by debiting the electronic cash ledger. The amendment ensured that the taxpayers are not saddled with unnecessary interest liability on the amount paid through electronic credit ledger. After a gap of one year, the Government has now notified2 the said amendment to be effective from 1 September 2020.

On 13 August 2020, the Reserve Bank of India (RBI) issued the “Review of Guidelines for Core Investment Companies” (Review Guidelines) incorporating majority of the recommendations from the report of the Working Group to Review the Regulatory and Supervisory Framework for Core Investment Companies (CICs) published on 6 November 2019 (Report).

On 5 August 2020, the Kerala High Court (High Court), in its decision in MP Varghese v Annamma Yacob & Ors (MFA No 47/2020) (MP Varghese Case), explained with considerable clarity the procedural mechanism to lift an encumbrance from an immovable property under Section 57 of the Transfer of Property Act 1882 (TPA), which provision has till date been rarely espoused in reported judgments in India.

In the ongoing dispute between the Oswal family in relation to nomination of the shares of Oswal Agro Mills Limited, the Supreme Court has set aside the order of the National Company Law Appellate Tribunal (NCLAT).

Global trends towards a stakeholder-centric governance model have resulted in a structured movement towards responsible business conduct. Companies are expected to be driven not only by profitability but also the increasingly relevant non-financial parameters measured through impact on society and the environment, popularly referred to as the ‘triple bottom line’.

In continuation of Reserve Bank of India’s (RBI) efforts to ease financial stress caused by the Covid-19 pandemic, the RBI issued the circular on the Resolution Framework for Covid-19 Related Stress dated 6 August 2020 (August 6 Circular). The August 6 Circular creates a limited time window for certain categories of borrowers affected by Covid-19 pandemic related business disruption to be allowed resolution plans in the nature of restructuring while permitting the borrower accounts to retain their status as ‘standard’. This effectively would be a carve out from the RBI’s circular on Prudential Framework for Resolution of Stressed Assets dated 7 June 2019 (June 7 Circular) which requires status downgrade of borrower accounts which are restructured under the same management until satisfactory performance threshold is met. This dispensation is intended to facilitate revival of real sectors and avoid impairment of the recovery process as well as the consequent risk on the financial stability in general.

Ministry of Power, Government of India, vide its order dated 5 August 2020 has waived inter-state transmission (ISTS) charges and losses on transmission of electricity generated from solar and wind projects, for sale to entities, till 30 June 2023. This waiver is applicable to power plants using solar and wind sources of energy, including solar-wind hybrid power plants.

Hon’ble Prime Minister (PM) Mr Narendra Modi launched a ‘Transparent Taxation’ platform on 13 August 2020 comprising faceless assessments, faceless appeals and a taxpayer’s charter (Charter) enumerating responsibilities of the income-tax department towards taxpayers and also listing down duties of the taxpayers towards the income-tax department. The reforms are part of the Government’s attempt to honour ‘honest’ taxpayers of the country and to make the tax system ‘seamless, faceless and painless’. The Hon’ble PM, however, expressed that while there has been a decrease in complexity, tax rates, tax litigation and increase in transparency, compliance and trust; the number of taxpayers in the country is still very low in relation to the nation’s population. While faceless assessments and the Charter are effective immediately, faceless appeals will be effective from 25 September 2020. In addition to this, the Central Board of Direct Taxes (CBDT) passed two separate orders on 13 August 2020 to introduce some additional measures.

A three-judge bench of the Supreme Court delivered a landmark ruling which has put to rest a long-standing debate on the applicability of the amendment to the Hindu Succession Act 1956 (HSA) in respect of  the rights of a female Hindu in joint family property.

A three-judge bench of the Supreme Court in the case of Vineeta Sharma v. Rakesh Sharma & Ors. [Diary No.32601 of 2018] and a batch of similar appeals tagged together has finally settled  the issue of  applicability and scope of Sec.6 of the Hindu Succession Act, 1956 (1956 Act) as  amended by the Hindu Succession (Amendment) Act, 2005 (2005 Amendment). There was lack of clarity regarding the amended section which deals with devolution of interest in coparcenary property due to conflicting judgments of the Supreme Court in Prakash & Ors. v. Phulavati & Ors. [(2016)2SCC36] (Phulavati) and Danamma@ Suman Surpur & Anr. v. Amar & Ors. [(2018) 3 SCC 343] (Danamma).

On 22 July 2020, the Ministry of Power (MoP) rolled out Guidelines for Tariff Based Competitive Bidding Process for Procurement of Round-The Clock Power from Grid Connected Renewable Energy Power Projects, complemented with Power from Coal Based Thermal Power Projects (Guidelines).

It is conventional wisdom that the Indian state enjoys the power of ‘eminent domain’, which refers to the power of the sovereign to acquire private immovable property for public use, provided the public nature of the usage can be demonstrated beyond doubt, by following a procedure established by law and upon payment of just compensation to the owner of such property. Payment of fair compensation to land owners in exchange of expropriation of their land by the state for public use, forms the most significant component of jurisprudence around land acquisition in India.

On 6 August 2020, the Reserve Bank of India (RBI) issued its statement on developmental and regulatory policies inter alia setting out measures to deepen digital payments. The RBI acknowledged the significant increase in the number of disputes and grievances in the digital payments space, and recognised the need for technology-driven redressal mechanisms (which are rule-based and automated) to resolve such disputes effectively and expeditiously. The RBI now proposes to mandate adoption of online dispute resolution (ODR) systems by the payment system operators (PSOs) in a phased manner for addressing all forms of disputes arising in the digital payments ecosystem.

I don’t believe in micromanaging," quips Haigreve Khaitan, ace corporate lawyer and co-founder of the Mumbai office at one of India’s oldest law firms, the 108-year old Khaitan & Co.

Trends show that a number of businesses are facing challenges related to cash flows and investors are looking for assets at attractive valuations.

The Consumer Protection (Ecommerce) Rules 2020 attempts to combine the teeth of the Consumer Protection Act 2019, Indian exchange control laws (IEC Regulations) and the Information Technology Act 2000, to ensure fair play in technology and data-driven ecommerce environment.

Just as the Non-Banking Financial Companies (NBFC) sector was emerging out of the recent Infrastructure Leasing & Financial Services (IL&FS) and the Dewan Housing Finance Limited (DHFL) crisis, COVID 19 hit the global markets. 

The Ministry of Electronics & Information Technology (MeitY) have constituted a committee of experts to deliberate a data governance framework along with issuing an Office Memorandum No. 24(4)/2019-CLES dated 13 September 2019  to create an 8 member committee (NPD Committee) to study issues and make suggestions pertaining to the regulation of non-personal data (NPD). The NPD Committee has published a report titled ‘Report by the Committee of Experts on Non-Personal Data Governance Framework’ on 12 July 2020 (NPD Report).

The Central Board of Direct Taxes (CBDT) has granted a much-awaited wish of investors and fund managers mulling over at starting operations in International Financial Services Centre (IFSC) at Gujarat International Finance Tec-City (GIFT City). The newly inserted Rule 114AAB, notified vide the Income-tax (19th Amendment) Rules 2020 (Rules) exempts all (i) non-residents (except for a company) and (ii) foreign companies (together referred to as ‘Non-Resident’) from the mandatory requirement of obtaining the permanent account number (PAN).

Cartels are one of the most pernicious offences and deserve serious penalties for deterrence, the Competition Commission of India (CCI) has said in several decisions.

On 24 July 2020, the National Company Law Appellate Tribunal (NCLAT), in its decision in GRIDCO Limited v Surya Kanta Sathapathy and Others [C.A. (AT) (Insolvency) 1271 of 2019] (GRIDCO judgement), held that the termination of a Power Purchase Agreement (PPA) during the subsistence of a moratorium would be in violation of Section 14(1) of the Insolvency and Bankruptcy Code 2016 (IBC).

The conflicted interpretation of Section 65B of the Indian Evidence Act, 1872 (Act) by two judgments of the Supreme Court was referred to a three judge Bench of the Supreme Court in the case of Arjun Panditrao Khotkar v. Kailash Kushanrao Gorantyal And Ors.[2020SCCOnLineSC571]. The two Judge Bench decision in Shafhi Mohammad v. State of Himachal Pradesh [(2018)2SCC801] (Shafhi) required reconsideration in view of the three Judge Bench judgment in Anvar P.V. v. P.K. Basheer & Ors. [(2014)10SCC473] (Anvar).

The concept of ‘proxy advisor’ is of western import and despite the nascency has slowly and steadily gained importance in the Indian market as a critical intermediary and a rather persuasive influencer of a company’s decision making and policies through the shareholders.

In 2019 a three-judge bench (full bench) of the Bombay High Court had to decide whether the courts can exercise their power to grant interim or ad interim reliefs under Section 9 of the Arbitration and Conciliation Act 1996 where the arbitration clause is contained in an agreement that is insufficiently stamped (Gautam Landscapes v Shailesh Shah).

The Central Government, vide notification dated 17 October 2019 had notified the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 (NDI Rules) in supersession of the Foreign Exchange Management (Transfer  and Issue of Security by a Person Resident outside India) Regulations, 2017 and the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2018. This change had led to a shift in rule making power so far as foreign investment in India is concerned.

The Supreme Court of India (SC) in Director of Income Tax-II (International Taxation) v M/S Samsung Heavy Industries Co. Ltd. (Civil Appeal No. 12183 of 2016) has held that the Project Office (PO) set up by Samsung Heavy Industries Co. Ltd. (Taxpayer) in India did not constitute its permanent establishment (PE) in India.

The Insurance Regulatory and Development Authority of India (IRDAI) on 22 July 2020, issued a circular to all insurance companies, in relation to the transfer of shares of insurance companies (Circular). The Circular has been issued to bring greater clarity to the existing provisions governing the transfer of shares of insurers, being: (a) section 6A of the Insurance Act 1938 (Insurance Act); (b) IRDAI (Transfer of Equity Shares of Insurance Companies) Regulations 2015 (Transfer Regulations); and (c) IRDAI (Listed Indian Insurance Companies) Guidelines dated 5 August 2016 (ListCo Guidelines).

Just as the Non-Banking Financial Companies (NBFC) sector was emerging out of the recent Infrastructure Leasing & Financial Services (IL&FS) and the Dewan Housing Finance Limited (DHFL) crisis, COVID 19 hit the global markets.

Globally, the COVID-19 pandemic and the consequent lockdowns have increased people’s interest in exploring and participating in online games. Discretionary consumer spending which was otherwise used in vacations, dining out and other entertainment options, has been freed up. The digital and online gaming sector is less sensitive to recessionary pressures. The S&P 500 Index has declined by more than 9% since the beginning of this year whereas an index of western digital gaming companies has increased by more than 22% during the same time period. Historically (ie, in both 2001 and 2008), the digital gaming sector enjoyed healthy overall growth in both software and hardware sales despite a negative economic environment. (Source: BITKRAFT Esports Ventures Management LLC)

The Ministry of Consumer Affairs, Food, and Public Distribution, Government of India notified and made effective the provisions of the Consumer Protection (E-Commerce) Rules, 2020 (E-Commerce Rules) under the Consumer Protection Act, 2019 (Act) from 23 July 2020.

Recently the Supreme Court in Kunjumuhammed and Anr. v Mariyumma (Civil Appeal No. 2771 of 2020), held that while hearing a second appeal, the High Court must frame the substantial question of law.

In the arbitration regime, party autonomy has gained much recognition. When drafting an arbitration agreement, parties are free to choose ad hoc or institutional arbitration, governing law, seat and venue of arbitration, number of arbitrators (odd number), their qualifications and other matters relevant to the procedure to be followed. The ability of parties to determine the procedure to be followed in appointing an arbitrator is a key manifestation of party autonomy. The UNCITRAL Model Law (Model Law) has adopted this principle of party autonomy in as much as it provides that parties are free to agree on the procedure to be followed in conducting the proceedings. Arbitrations in India are governed by the Arbitration and Conciliation Act, 1996 (based on the Model Law) which also envisages party autonomy.

Keeping in mind the times that we are in, there might come a situation where the principles behind the protection of intellectual property rights would have to be balanced with the public welfare. One such mechanism for balancing the rights of the intellectual property holder and the general public is compulsory licensing.

The Karnataka Land Reforms Act, 1961 (Act) was enacted with an objective to consolidate and make uniform laws relating to purchase and holding of agricultural land, conferment of ownership on tenants, vesting of occupancy rights, and ceiling on land holdings of the agricultural land in the State of Karnataka.

On the basis of clinching evidence such as emails and WhatsApp communications, the Competition Commission of India (CCI) found ten manufacturers and suppliers of brake blocks to Indian Railways (Railways) guilty of collusive bidding. However, given the economic downturn due to the pandemic faced by Micro Small and Medium Enterprises (MSMEs) in India, and other public interest considerations, the CCI imposed no penalty and directed the parties to cease and desist from indulging in such activities in the future.

The Ministry of Corporate Affairs should adopt a liberal and pragmatic approach to allow companies to use their own products and services to provide COVID-19 related relief as part of their CSR activities under the Companies Act.

The amendments to the Indian Stamp Act 1899 (Act) have come into effect from 1 July 2020. These amendments were first proposed under the Finance Act of 2019 and the Indian Stamp (Collection of Stamp-Duty through Stock Exchanges, Clearing Corporations and Depositories) Rules, 2019 (Rules).

It has been more than a year since the government of Gujarat brought into effect the new Gujarat Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2019 (S&E Act 2019).

With the amendments to the Indian Stamp Act 1899 (Stamp Act) brought in by the Finance Act 2019 (to be effective from 1 July 2020), there was an ambiguity on the application of such amendments on issuance and transfer of units of alternative investment funds (AIFs). This was followed by the issuance of a circular by SEBI, i.e. circular SEBI/HO/IMD/DF6/CIR/P/2020/113 dated 30 June 2020 (Circular), whereby SEBI has provided clarity on the applicability of stamp duty on issuance and transfer of units by AIFs and its treatment of units of an AIF as a ‘security’ under the Securities Contract (Regulation) Act 1956.

The Securities and Exchange Board of India (SEBI), at its board meeting held on 25 May 2020, approved several significant changes to regulations governing listed companies. The amendments to the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (ICDR Regulations), the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (Takeover Regulations), and the SEBI (Prohibition of Insider Trading) Regulations, 2015 (Insider Trading Regulations), are discussed in this Ergo.

On 9 June 2020, the Mumbai Bench of the National Company Law Tribunal (NCLT) passed an order admitting a petition for the initiation of the corporate insolvency resolution process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) in the matter of Agrocorp International Private (PTE) Limited v National Steel and Agro Industries Limited (CP(IB) No. 798/MB/C-IV/2019). In doing so, the NCLT held that a foreign-seated arbitral award is adequate proof of a “claim” under Section 9 of the IBC, despite the fact that the foreign award had not undergone enforcement proceedings in India.

On 24 June 2020, the Reserve Bank of India (RBI) issued directions on “Loans Sourced by Banks and NBFCs over Digital Lending Platforms: Adherence to Fair Practices Code and Outsourcing Guidelines” (Directions) to scheduled commercial banks (Banks) and non-banking financial companies (NBFCs) in relation to their engagement with digital lending platforms for disbursement of loans to borrowers.

In a significant judgment dated 9 June 2020 titled ‘Indus Biotech Private Limited v. Kotak India Venture Fund-I’, the National Company Law Tribunal, Mumbai Bench-IV (NCLT) allowed an application filed by the corporate debtor, Indus Biotech Private Limited, (corporate debtor) under Section 8 of the Arbitration & Conciliation Act, 1996 (Arbitration Act) seeking reference to arbitration for settlement of the disputes between the parties, while dismissing the Company Petition filed by the financial creditor, Kotak India Venture Fund-I (financial creditor) under Section 7 of the Insolvency & Bankruptcy Code 2016 (IBC).

On 19 June 2020, the Controller General of Patents, Designs and Trade Marks (Respondent) issued a Public Notice (Recent Notice) to the effect that the deadlines for various acts/proceedings, filing of any reply/document, payment of fees, etc relating to any intellectual property matter (IP Filings) falling due after 15 March 2020 shall be the date as decided/ordered by Court (defined hereinafter).

The Securities and Exchange Board of India (SEBI) has granted certain significant relaxations with respect to new capital raises / preferential allotments by stressed public listed companies. These are effective 22 June 2020, through appropriate amendments to the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (Takeover Regulations) and the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (ICDR Regulations).

A single-judge bench of the Hon’ble High Court of Delhi (High Court), in its judgment, MEP Infrastructure Developers Limited v South Delhi Municipal Corporation & Ors. dated 12 June 2020, held that a force majeure clause instantly comes into effect once it has been acknowledged by the other party. Accordingly, in such circumstances, the need to explicitly invoke the force majeure clause does not arise.

India’s capital markets regulator, the Securities and Exchange Board of India (SEBI) has, on 16 June 2020, notified amendments (Amendments) to the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014 (InvIT Regulations) and Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014 (REIT Regulations). The Amendments, inter alia, allow de-classification of persons and entities as sponsors, induction of new sponsors, introduce whitewash waiver provisions for Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs) (together, Business Trusts), and ease lock-in requirements in case of REITs.

A three-judge bench of the Supreme Court (SC), vide its judgment dated 5 June 2020 passed in Shakti Bhog Food Industries Limited v The Central Bank of India & Anr (Civil Appeal No. 2514 of 2020) (SC Judgment), held that accrual of right to sue under Article 113 of the Schedule of the Limitation Act, 1963 (the Act) did not necessarily arise when the right to sue first accrued but rather, when there was a clear and unequivocal threat of infringement of rights. Subsequently, the Calcutta High Court (HC), vide a judgement dated 11 June 2020 passed in In the Goods of: Hanuman Prasad Agarwal  AND Suresh Agarwal v Satyanarain Agarwal & Ors (GA No 990 of 2018 with TS No 7 of 2016) (HC Judgment)arrived at the same finding in respect of matters covered under Article 137 of the Schedule of the Act.

The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (Takeover Regulations) have been amended, effective 16 June 2020, to grant certain significant relaxations to promoters looking to consolidate their holding in Indian listed companies (ListCos). These are:

India’s appeal tribunal for competition matters - the National Company Law Appellate Tribunal (NCLAT) - has dismissed an appeal filed by a natural person - Pankaj Raj (Informant) - against an order of the Competition Commission of India (CCI).  (Maj. Pankaj Rai v Secretary, Competition Commission of India & Ors. (Competition Appeal (AT) No. 01 of 2020), decided on 29 May 2020.).

On 5 June 2020, the Competition Commission of India (CCI) in disposing of Suo Motu Case No 05 of 2017 concluded that National Engineering Industries Limited (NEI), Schaeffler India Limited (Schaeffler), SKF India Limited (SKF) and Tata Steel Limited, Bearing Division (Tata) had  contravened provisions of Section 3(3)(a) read with Section 3(1) of the Competition Act, 2002 (Competition Act).

In order to allow a larger group of listed companies to raise funds from the public, during the testing times brought about by COVID-19, the Securities and Exchange Board of India (SEBI) has issued a circular dated 9 June 2020 (Circular). The Circular has relaxed the eligibility conditions applicable to fast track further public offers by listed companies (Fast Track FPOs). This is in continuation of the regulator’s efforts to aid listed companies access capital during this time - over the last several months, SEBI relaxed several regulations applicable to rights issues by companies, allowed creation of encumbrances by listed REITs (allowing debt funding), relaxed certain procedural matters applicable to takeovers and buybacks and guidelines applicable to initial public offerings, et cetera.

On 4 June 2020, the Reserve Bank of India (RBI) issued a notification (Notification) relaxing the timelines for certain compliances to be undertaken by banks, authorised payment system operators, and system participants. The RBI noted that the relaxations are being introduced in view of the present situation in the country.

The Central Board of Indirect Taxes and Customs (CBIC) has issued a circular dated 10 June 2020 (Circular), clarifying the applicability of goods and services tax (GST) on the remuneration paid to whole time directors and independent directors. Services rendered by an employee to his/her employer in the course of, or in relation to, his/her employment are not exigible to GST, and therefore, the moot issue was whether services provided by directors are in the course of employment or not.

A three-judge bench of the Supreme Court, comprising of Justices NV Ramana, Sanjiv Khanna and Krishna Murari, vide judgement dated 26 May 2020 in the case of Guru Nanak Industries and Another v. Amar Singh dealing with the Indian Partnership Act, 1932 inter alia reiterated well-established principles of partnership law regarding ‘retirement of partner’ and ‘dissolution of partnership firm’.

The Intellectual Property Appellate Board (IPAB) vide three office orders dated 11 May 2020, 12 May 2020 and 26 May 2020 has set out the framework for future hearings and filings during the ongoing COVID-19 pandemic. The said orders bring about the much needed clarity regarding the functioning of the IPAB in the present times, especially considering that many urgent matters could not be filed or listed due to the non-functioning of the IPAB.

As part of the Government’s ongoing efforts to combat the economic fallout of the COVID-19 crisis, the Union Finance Minister in a press conference dated 24 March 2020 announced an increase in the threshold for invoking the corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC). A notification published by the Ministry of Corporate Affairs on the same date (Notification) states that the “Central Government hereby specifies one crore rupees as the minimum amount of default for the purposes of the said section.”

Ever since the Hon’ble Finance Minister of India announced the suspension of initiation of corporate insolvency under the Insolvency and Bankruptcy Code 2016 (IBC) in wake of the COVID-19 pandemic, there have been several market speculations about the nature and extent of the proposed suspension and its implications. With the promulgation of the amendment ordinance to IBC, most of these speculations have been put to rest, however owing to the language of the Ordinance, a new set of issues may have arisen.

The Authority for Advance Rulings (AAR) recently rejected applications made by three Mauritian entities on the taxability of capital gains on indirect transfer of an Indian company’s shares, under the India-Mauritius Double Taxation Avoidance Agreement (Tax Treaty). The AAR held that that the transaction was prima facie designed for tax avoidance and that even otherwise, the benefit of the Tax Treaty cannot be allowed in this case.

On 14 May 2020, the Learned Single Judge of the Hon’ble High Court of Delhi delivered a landmark judgment in the case of Horlicks Limited & Anr. v Zydus Wellness Products Limited (CS(COMM) 464 of 2019). The Learned Single Judge, after a thorough examination of precedents relating to trade mark disparagement, restrained Zydus Wellness Products Limited (Zydus) from telecasting a television commercial (TVC) for its product COMPLAN which was disparaging Horlicks.

The High Court of Delhi, in its judgment, Parsvnath Developers Limited & Anr. v Rail Land Development Authority, dated 19 May 2020, has reiterated the powers of a Court under Section 11 of the Arbitration and Conciliation Act, 1996 (Act). Consequently, it has been held that preliminary issues fall within the domain of the arbitral tribunal and are not to be delved into by a court under Section 11 of the Act.

It is not an everyday instance for the apex court in the country to adopt a pro employer approach, specifically in a matter pertaining to a disciplinary inquiry initiated against an employee. In the case of Chairman-cum-MD, Mahanadi Coalfields Limited v Rabindranath Choubey [Civil Appeal Number 9693 of 2013] (Mahanadi), however, the Supreme Court of India (Supreme Court) did so. Exercising its appellate jurisdiction, the Supreme Court decided on the question whether it is permissible for an employer to continue a disciplinary proceeding, initiated during an employee’s tenure with the employer, even after his retirement. A related question before the court was whether it was tenable for an employer to withhold the payment of an employee’s gratuity, which would have been payable upon his superannuation, on account of pendency of the disciplinary proceedings against him.

A major impact of the lockdown and Covid-19 has been, one that most shy away from admitting, the cash flow crunch.

India with the second largest armed forces and with the fifth largest defence budget in the world aims to achieve self-reliance in defence production.

A three-member bench of the National Company Law Appellate Tribunal (NCLAT), presided over by the Hon’ble Acting Chairperson, vide its judgment dated 22 May 2020 passed in the matter of State Bank of India  v M/s Metenere Limited [Company Appeal (AT) (Insolvency) No. 76 of 2020], declined to interfere with an order passed by the National Company Law Tribunal, Principal Bench (NCLT) refusing to appoint an ex-employee of the Financial Creditor as the Interim Resolution Professional.

The case finds genesis in the Competition Commission of India’s (CCI) order of investigation against Mahyco Monsanto Biotech (India) Private Limited’s (Mahyco Monsanto) conduct in relation to the sub-licensing of a patented gene. The patent, Bt Cotton Technology, is a technology that consists of two genes to make cotton seeds resistant to bollworms. The technology was patented by Monsanto Company under the Patents Act, 1970 (Patents Act) and licensed to Mahyco Monsanto. Mahyco Monsanto, in turn, sub-licensed the technology to various seed manufacturers in India.

In order to ease the impact of the Covid-19 pandemic on the Indian economy, the Reserve Bank of India (RBI) on 27 March 2020 and 17 April 2020  introduced certain regulatory measures to deal with the challenges arising due to the lockdown (together, the Initial Covid Regulatory Packages). The Initial Covid Regulatory Packages issued by the RBI focused on steps to mitigate the debt servicing burden  of the borrowers on term loans and certain fund based working capital facilities for the period from 1 March to 31 May 2020 (Moratorium) and related relief on income recognition to banks and financial institutions. Please read our analysis of the Initial Covid Regulatory Packages

The Supreme Court of India (SC) in its recent case of PILCOM (Civil Appeal No. 5749 of 2012 with Special Leave Petition (Civil) No. 6829 and 7315 of 2019) ruled that the obligation of the payor to withhold tax at a specified rate of 10% under section 194E of Indian Income tax Act, 1961 (IT Act) on payments made to non-residents, is not affected by the tax treaty applicable to such non-resident recipient.

On 18 May 2020, the Controller General of Patents, Designs and Trade Marks (Respondent) issued another Public Notice (New Notice) whereby the deadlines for various acts, proceedings, filing of any reply/document, payment of fees, etc relating to any intellectual property matter (IP Filings) falling due between 15 March 2020 to 17 May 2020 was fixed as 1 June 2020 and no extension was permitted for the deadlines falling beyond 17 May 2020. This New Notice was contested by Intellectual Property Attorneys Association & Anr (Petitioners), by filing an application in their writ petition bearing WP(C) No 3059/2020 (Writ Petition) before the Delhi High Court (Court). The Court passed a further order dated 21 May 2020 (Further Order) staying the operation of New Notice.

A single-judge bench of the Hon’ble High Court of Delhi, comprising Hon’ble Mr Justice Navin Chawla, vide judgment dated 20 May 2020 in the matters of Tripta Kaushik v Sub Registrar VI-A, Delhi & Anr and Ramesh Sharma v Government of N.C.T. of Delhi & Ors., dealt with the distinction between a relinquishment deed and a gift deed. The Court laid down an elaborate test to determine whether an instrument is construed to be a release deed or a gift deed and held that if the relinquishment by the co-owner is only in favour of one of the co-owners and not all the co-owners, that document will be a gift deed and not a relinquishment deed.

The Delhi High Court (Court) passed an order dated 11 May 2020, in the matter of M/s SMS Ltd v Konkan Railway Corporation Ltd (O.M.P. (COMM) 279/2017), wherein it set aside an arbitral award (Award) pertaining to a dispute regarding the construction of a railway line in Jammu and Kashmir (Railway Project). The Award granted M/s SMS Limited (Claimant) compensation amounting to approximately INR 1.73 Crores, as against its aggregate claim of approximately 89 crores. The Court set the Award aside on the grounds that: (a) the Claimant was not at fault for the non-performance and consequent termination of the rate contract between itself and Konkan Railway Corporation Limited (Respondent); and (b) the compensation awarded was egregiously low. It further held that application of the ‘notional proportional loss’ formula by the arbitral tribunal was perverse.

The Delhi High Court (Court), in its judgment dated 12 May 2020 in Spentex Industries Ltd v Quinn Emanuel Urquhart Sullivan LLP, has inter alia held that the legal relationship between a law firm and client is commercial in nature and accordingly covered by Sections 44 and 45 of the Arbitration and Conciliation Act, 1996 (Arbitration Act). Further, the Court, while dismissing the anti-arbitration suit filed by the Plaintiff, has reiterated the principle that courts have to be extremely circumspect and reluctant to interfere in arbitration proceedings and shall refer parties to arbitration unless the arbitration agreement is on the face of it null and void, inoperative or incapable of being performed.

In our previous ERGO update published on 6 May 2020, we endeavored to guide businesses through the standard operating procedure (SoP) that they should incorporate as part of their resumption plan in COVID-19 times. Since the update, several important developments have taken place, both at the Central and the state levels. The Central Government rolled out revised guidelines for Lockdown 4.0 phase with various relaxations aimed at opening up business activities in a calibrated manner. The state governments followed in tow, with some sticking with the relaxations provided by the Central Government and others introducing some restrictions. In this article, we attempt to share important steps that may be taken by employers in view of government mandate and industry-wide developing practices, as they contemplate resuming operations. 

The Supreme Court of India (SC) in Union of India & Anr v UAE Exchange Centre [Civil Appeal No. 9775 of 2011], held that the liaison office (LO) set up by UAE Exchange Centre LLC (Taxpayer) in India does not constitute its permanent establishment (PE) in India.

The Delhi High Court has vide its order dated 21 May 2020 in the case of Ramanand and ors v. Dr Girish Soni and anr (Rent Control Revision Petition No. 447/2017) analysed whether the present Covid-19 pandemic and resultant lockdown would entitle tenants to claim waiver from payment of rent or suspension of rent and has clarified the legal position in this regard.

As several countries including India remain in lockdown and continue to follow strict social distancing measures, the question on everybody’s mind today is how quickly will we return to “business as usual”, after nearly eight plus weeks of standstill?

On 1 May 2020, the Telangana High Court (Court) passed an order in M/s Pennar Industries Limited & Anr v. The Reserve Bank of India & Anr (IA No 3 of 2020 in WP No 6573 of 2020), granting an interim injunction restraining Yes Bank Limited (Yes Bank), the second respondent from debiting amounts due under letters of credit (LCs) from the account of the Petitioner.

A three-judge bench of the Supreme Court of India (Supreme Court), comprising Hon’ble Justice N.V. Ramana, Hon’ble Justice Mohan M. Shantanagoudar and Hon’ble Justice Ajay Rastogi has, vide its judgment dated 11 May 2020 passed in the matter of South East Asia Marine Engineering and Constructions Ltd (SEAMEC Ltd) v Oil India Limited (Civil Appeal No. 673 of 2012), held that where the interpretation provided by an arbitral tribunal to a contractual provision  in an award was not reasonably possible upon a reading of the contract as a whole, the same was liable to be set aside under Section 34 of the Arbitration and Conciliation Act, 1996 (Arbitration Act).