Decided by the Hon’ble National Company Law Appellate Tribunal, New Delhi (Company Appeal (AT) No. 272/2018 – Decided on 09.07.2019) (Coram – Justice A.I.S. Cheema and Mr. Balvinder Singh) [Highlights: The provision of purchase of minority shareholding under Section 236 of the Companies Act, 2013 is only applicable to cases of an amalgamation, share exchange, conversion of securities or for other similar reasons, and not every case where 90% or more shareholding in a company is acquired. Second, valuation of shares for the purchase of minority shareholding under Section 236(2) must be done by a “registered valuer” and cannot be replaced by that of a chartered accountant] Facts…
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IL&FS Securities Services Ltd. Vs. NSE Clearing & Ors. [SAT Order – 03.07.2019]
[Highlights: First, the Hon’ble Securities Appellate Tribunal has held that decisions of Clearing Corporations established under Section 8-A of the Securities Contract (Regulation) Act, 1956 are appealable under Section 23L of that Act. Second, it reiterated that SEBI has wide powers to consider an annulment of trades under Sections 11 & 11B of the SEBI Act, 1992. Third, an affected party has the right to apply for the modification of a SEBI order and SEBI cannot deny such party, seeking to protect its interests, an opportunity of being heard.] Decided by the Hon’ble Securities Appellate Tribunal, Mumbai – Appeal No. 262/2019 – Decided on 03.07.2019 (here) Facts of…
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Trade Dress Infringement: When Imitation is not Flattery
The Trade Marks Act (TMA) was introduced in 1999 for the registration of Trade Marks in India and mainly to provide for better protection of the trademark for goods and services preventing their fraudulent use. Trade Mark refers to a graphically representable mark capable of distinguishing a particular good or service distinctively which includes the shape of goods, their packaging and combination of colours, etc. Under section 2(q) of TMA, a ‘package’ further includes a case, box, container, covering, folder, receptacle, vessel, casket, bottle, wrapper, label, band, ticket, reel, frame, capsule, cap, lid, stopper and cork. This article seeks to analyse ‘trade dress’ as an intellectual property right, both in…
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Feb 12 to June 7 : Analysing RBI’s Prudential Framework for Resolution of Stressed Assets
After suffering a major setback in the case of Dharani Sugars and Chemicals Ltd. v. Union of India (“Dharani”) where its Feb 12 Circular was struck down, RBI has come back with a more prudent and humble framework under the “Reserve Bank of India (Prudential Framework for Resolution of Stressed Assets) Directions 2019” (“2019 Directions”), inter alia, choosing to abandon mandatory insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 (“IBC”). This article seeks to make a thorough analysis of the new resolution framework under the 2019 Directions, comment on it and test it on the touchstone of Dharani. [We have analysed the Dharani Judgement at length, here. Furthermore, a thorough…
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Break-up of Dominant Enterprises: It’s Not Me, its You [Part II: Understanding the law of Breaks-ups]
The law of breakup of monopolies/dominant companies differs across jurisdictions. In this article, the Author analyses the law of breakups in the United States and India. In this series of articles, the author makes a holistic analysis of the concept of break-up/division of dominant enterprises/monopolies along with the jurisprudence on the subject. The other parts of this series can be found here: Part I –Understanding the Remedy of Break-up of Dominant Enterprises Part II – Understanding the Law of Break-ups 1. American Perspective Under Section 2 of the Sherman Antitrust Act, 1890 (“Sherman Act”) monopolization has been prohibited in its various forms. The Supreme Court of the United States of America…
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Break-up of Dominant Enterprises: It’s Not Me, its You [Part I: Understanding Break-ups]
Of late, there have been passionate political calls throughout the world to break-up the ‘big tech’ companies like Facebook, Amazon, Apple, etc. This is primarily because of the overwhelming power that these companies hold in their relevant markets and the near-monopolist advantage that these companies hold over the new entrants in their market. At the outset, this call purports to base itself on the touchstone of the principle of break-up of dominant/monopolistic companies and groups under competition/anti-trust laws. While some of the reservations presented under this call to break-up do raise some pertinent questions, while some of the allegations made against these companies are only clothed as competition concerns but…
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The Need for Context and Exemptions under the Insolvency and Bankruptcy Code, 2016
The Insolvency and Bankruptcy Code, 2016 (“IBC”) came at a time of great need for the Indian economy. It is argued that, at the time, Non-Performing Assets were on their way to crippling the Indian economy which would have had far-reaching implications on banks and the economy at large. However, ever since the IBC has come into the picture, far-reaching and substantial strides in the recovery and restructuring of dues have been made whether in the form of pre-admission settlements or the Corporate Insolvency Resolution Process (“CIRP”). Despite its successes, we have seen grave shortcoming under the IBC and the wake-up call with regard to this was seen in the…
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Leniency Programme under the Competition Act: A Definitive Guide
The Competition Commission of India (“CCI”) is empowered, under Section 46 of the Competition Act, 2002, to grant lesser penalties to members of cartels where (i) they have made a full and true disclosure in respect of the alleged violations and (ii) this disclosure is sufficient to enable CCI to form a prima-facie opinion about the existence of a cartel or which helps to establish the contravention of the provisions of section 3 of the Act. 15 years after this provision was enacted along with the Competition Act, the first case under Section 46 was decided by CCI in 2017. This article seeks to set out the law behind the…
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Call for Articles: The CorpLexia Blog [Submissions on Rolling Basis]
About the Blog CorpLexia is a legal blog for the next generation of lawyers, professionals, academics and students focused on the realm of corporate, commercial, financial, insolvency, securities, arbitration and competition laws, who are energised by ambition and striving for perfection. Believing in the free discourse of knowledge, CorpLexia aims to break away from the hardwired practice of caging the very cutting edge of legal research and intellectual output in a close-ended journal, away from open and free access. We endeavour to put forth authoritative, inquisitive and well-researched publications that stand the test of our readers’ intellectual vigour. Theme Corporate, commercial, financial, insolvency, competition, securities, arbitration laws, etc. …
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SC Strikes Down RBI’s Feb 12 Insolvency Circular: Demystifying the Decision
A bench of the Hon’ble Supreme court of India comprising of Justices R. F. Nariman and Vineet Saran, in the case of Dharani Sugars and Chemicals Ltd. v. Union of India (“Dharani”) have invalidated the Reserve Bank of India’s (“RBI”) Circular titled ‘Resolution of Stressed Assets – Revised Framework’ (issued on 12.02.2018) (“Feb 12 Circular”) as being ultra vires the Banking Regulation Act, 1885 (“BR Act”) and the Reserve Bank of India Act, 1934 (“RBI Act”). This Circular had overhauled the Indian regime of stressed asset resolution and introduced the generic scheme of a resolution plan to be implemented within 180 days from the date of the default on the loan. Furthermore, where the…
