Corporate
IBC | After Moratorium, Creditor Cannot Appropriate Pre-CIRP Dues From Earlier Security Deposit Made By Corporate Debtor : Supreme Court
The Supreme Court has observed that once a moratorium is imposed, a corporate debtor's pre-CIRP dues cannot be set off against a deposit held by the creditor. The Court held that until such deposit is lawfully adjusted, it continues to remain the property of the corporate debtor, and any appropriation after the moratorium would be impermissible in law. “The deposit made even if treated as...
IBC | Primacy Of Commercial Wisdom Doesn't Mean Every Decision Of CoC Will Be Immune From Judicial Scrutiny : Supreme Court
The Supreme Court has underscored that while the commercial wisdom of the Committee of Creditors remains paramount, it is not immune from judicial scrutiny where issues of statutory illegality or jurisdictional error arise. “…it is necessary to state that primacy of commercial wisdom does not mean that every action taken in the insolvency process is altogether immune from scrutiny in...
Fraudulent Diversion Of Company's Funds Can't Be Cured By Subsequent Shareholder Ratification : Supreme Court
The Supreme Court on Tuesday held that diversion of funds raised through preferential allotment for purposes other than those disclosed to investors amounts to fraud under securities law, and cannot be cured by subsequent shareholder ratification.Allowing appeals filed by the Securities and Exchange Board of India (SEBI), a Bench of Justice J.B. Pardiwala and Justice K.V. Viswanathan set aside...
Arbitration | Belated Jurisdictional Challenge Impermissible After Active Participation In Arbitration Proceedings: Supreme Court
The Supreme Court has observed that a party which participates in arbitration proceedings without raising a jurisdictional objection at the appropriate stage cannot subsequently raise a technical plea of jurisdiction of the arbitral tribunal upon passing of an adverse award. “A party cannot keep a 'jurisdictional ace' up their sleeve and then claim that filing of the jurisdictional...
NCLAT Order Not Invalid Merely Because Bench Had Majority Technical Members : Supreme Court
The Supreme Court has held that an order of the National Company Law Appellate Tribunal (NCLAT) cannot be treated as illegal merely because the bench deciding the case had a majority of technical members. The Court clarified that the present statutory framework governing the tribunal system does not mandate that judicial members must outnumber technical members in NCLAT benches.A bench...
Asset Reconstruction Companies In India: High-Handedness, Judicial Reckoning, And Regulatory Reform
Anyone of us who have appeared before a Debt Recovery Tribunal, a High Court, or the NCLT in a Non-Performing Asset matter has, at some point, encountered an Asset Reconstruction Company on the other side of the record. They arrived with an ambitious mandate: to clean the Indian banking system's distressed debt backlog through professional, non-adjudicatory enforcement, free from the delays that frustrated bank-led recovery for decades. The Narasimham Committee I (1991) and Narasimham Committee...
IBC Permits Parallel CIRP Against Debtor & Guarantor For Same Debt : Supreme Court
The Supreme Court on Thursday (February 26) observed that there's no bar under the Insolvency and Bankruptcy Code to initiate simultaneous CIRP against the corporate debtor and guarantor for the same debt. The bench of Justices Dipankar Datta and Augustine George Masih endorsed the findings of BRS Ventures Investments Ltd. v. SREI Infrastructure Finance Ltd. & Anr that "consistent with...
ESG And Competition Law In Cross-Border M&A: A Contemporary Shift In Corporate And Commercial Regulation
Cross-border mergers and acquisitions (M&A) evaluations have been significantly altered due to the rise of Environmental, Social and Governance (ESG) considerations. The integration of ESG considerations in M&A has scaled new height shaping global settlement and risk assessment. ESG factors are increasingly treated as inputs to and outcomes of competition analysis. They are no longer confined to voluntary commitments or investor reporting. To ensure merger clearances, the authorities are...
Rooh Afza To Be Classified As Fruit Drink/Processed Fruit Product And Taxed At 4% Under UP VAT Act : Supreme Court
The Supreme Court today held that “Sharbat Rooh Afza” is classifiable as a “fruit drink / processed fruit product” under Entry 103 of Schedule II, Part A of the Uttar Pradesh Value Added Tax Act, 2008 and is taxable at 4 percent.A bench of Justice BV Nagarathna and Justice R Mahadevan set aside Allahabad High Court's judgment that had held that Rooh Afza has to be classified under...