March 2021

Evidentiary value of Parliamentary Committee Reports 

In Kalpana Mehta v Union of India (‘Kalpana Mehta judgment’)[1], a Constitution Bench of the Supreme Court (‘SC’) pronounced a detailed judgment on whether Courts can place reliance on the Report of a Parliamentary Standing Committee (‘PSC’). The SC also examined whether the factual observations made in a PSC Report can be contested or challenged by the parties, during a judicial proceeding.

This decision arose from a referral order issued by a two-judge bench of the SC. The two-judge bench took the view that this was a ‘substantial question of law’ – that should be adjudicated by a Constitution Bench in accordance with Article 145(3) of the Constitution. While the Constitution Bench took a unanimous view, three separate concurring opinions were issued by Justice Dipak Misra, Justice Dr. D Y Chandrachud and Justice Ashok Bhushan.
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Indian Mutual Funds – M&A Wave

The Securities and Exchange Board of India (“SEBI”) recently approved amendments to the SEBI (Mutual Funds) Regulations, 1996 (“MF Regulations”) at its December 16, 2020 board meeting, notified on February 4, 2021 through the MF Regulations by way of the SEBI (Mutual Funds) (Amendment) Regulations, 2021, with effect from March 5, 2021.

Currently, a Mutual Fund (“MF”) ‘sponsor’ is required to have a ‘sound track record’ i.e. having profits  in 3 out of the last 5 years, including the fifth year. Recognising the role of emerging tech/ fintech companies in the Indian financial services space and to facilitate MF innovation/ geographic penetration, SEBI relaxed the above profit criterion for sponsors. Going forward, MF sponsors who do not meet the above, would still be eligible to, either set up a new, or acquire an existing, MF asset management company (“AMC”) and trustee company, if it has a minimum net-worth of INR 1 billion as contribution towards the AMC’s net-worth, which is required to be maintained till the sponsor makes profits for 5 consecutive financial years.
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IRDAI’s Approach to ‘Fit and Proper’ Assessment in light of the Sahara Life Saga

Introduction

An issue of significant relevance to financial regulators world-over is the fitness and propriety of key shareholders of financial entities. The objective of this blog is to analyse IRDAI’s approach to assessment of ‘fit and proper’ status of significant owners of insurers, especially in light of the order passed by the IRDAI in the matter of M/s Sahara India Life Insurance Company Limited (“Sahara Life”) on December 30, 2020 (“IRDAI Order”). Before we delve into IRDAI’s approach in this regard, it is important to trace the chronology of events, leading to the IRDAI Order.
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One-Sided-Contractual-Terms-Constitute-Unfair-Trade-Practice-Under-Consumer-Law-in-India

INTRODUCTION:

A three-judge bench of the Supreme Court, in Ireo Grace Realtech Pvt. Ltd. v. Abhishek Khanna and Ors.[1], has inter alia held that developers cannot compel apartment buyers to be bound by one-sided contractual terms. Finding such one-sided agreements oppressive, the Court has held that the same would constitute an unfair trade practice under the consumer laws in India.
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