Recently, in Neeharika Infrastructure Private Limited v. State of Maharashtra[1] (“Neeharika Infrastructure”) a three-judge bench of the Supreme Court (“SC”) pronounced a detailed judgment on the powers of the High Court (“HC”), while adjudicating a petition for quashing of the FIR – filed under Section 482 of
Recently, the Ministry of Corporate Affairs (‘MCA’) has notified the amendments made to Sections 149(9) and 197(3) of the Companies Act, 2013 (‘2013 Act’) by the Companies (Amendment) Act, 2020 (‘2020 Amendment’) -to enable companies faced with absence or inadequacy of profits to pay certain minimum guaranteed remuneration to Non-Executive Directors (‘NEDs’) and Independent Directors (‘IDs’), as may be prescribed. On the same day, the MCA also issued a Notification to amend Schedule V of the 2013 Act to prescribe the scale of remuneration which can be paid to NEDs and IDs, depending on the effective capital of the company.
Continue Reading New Remuneration Regime for Independent Directors- Will It help in attracting better talent on the boards of India Inc?
Section 198 of the Companies Act, 2013 (‘2013 Act’), prescribes a special method for computation of ‘net profits’ of a company in a financial year — which has different rules for arriving at net profit than the one prescribed under Accounting Standards.
The special methodology for computation of net profits prescribed under Section 198 is used for two purposes – (i) for determining managerial remuneration under Section 197 and Schedule V; and (ii) for determining the minimum CSR amount to be spent by the company in a financial year, under Section 135(5) of the 2013 Act.
Continue Reading Computation of ‘net profits’ for Managerial Remuneration – Has this provision outlived its utility?
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.
Continue Reading Evidentiary value of Parliamentary Committee Reports
The Serious Fraud Investigation Office (‘SFIO’) is an organisation established under the aegis of the Ministry of Corporate Affairs (‘MCA’) – for investigation and prosecution of white-collar crimes. The SFIO was constituted in July 2003 following the recommendations of the Naresh Chandra Committee. In 2002, the Naresh Chandra Committee had recommended setting up a ‘Corporate Serious Fraud Office’, to uncover corporate fraud, and supervise prosecutions under various economic legislations.
Continue Reading Serious Fraud Investigation Office – Keeping a close watch on frauds in India Inc
Inter-corporate loans granted by a company are regulated under Section 186 of the Companies Act, 2013 (‘2013 Act’). One important pre-condition relates to the interest rate thresholds prescribed under sub-section (7). Section 186(7) of the Act states that – “No loan shall be given under this Section at a rate of interest lower than the prevailing yield of one-year, three-year, five-year or ten-year Government Security closest to the tenor of the loan.”
Section 186(7) effectively prevents a company from giving an inter-corporate loan at a rate of interest lower than the prescribed thresholds, i.e. the prevailing yield of one-year, three-year, five-year or ten-year government security closest to the tenor of the loan. This leads to multiple practical difficulties, especially in situations where a holding company wishes to provide funds to its foreign wholly owned subsidiaries (‘WOS’).
Continue Reading Minimum Interest Rates on loans to foreign WOS – Need for Review
The Ministry of Corporate Affairs (‘MCA’) notified the amendments made to Section 135 of the Companies Act, 2013 (‘the Act’) – via the Companies (Amendment) Act, 2019, and the Companies (Amendment) Act, 2020, on January 22, 2021.
On the same day, the MCA also notified the Companies (Corporate Social Responsibility) Amendment Rules, 2021 (‘new CSR Rules’). These Rules have made significant changes to the regulatory framework governing the monitoring and evaluation of CSR activities, and the utilisation of CSR expenditure.
In this blog, we shall focus on the new CSR Rules, and examine its implications for India Inc. The implications of the changes made by the new CSR Rules are analyzed below.
Continue Reading New CSR Regime – Is it too prescriptive?
The Prevention of Money Laundering Act, 2002 (‘PMLA’) has undergone multiple amendments after it was brought into operation on July 1, 2005. Most recently, the PMLA was amended through the –
These amendments aimed to plug loopholes in the operation of the PMLA – to strengthen the framework for tackling money laundering. In furtherance of this objective, the 2019 Amendment has clarified the definition of “proceeds of crime” under Section 2(1)(u). Amendments were also made to Section 45, following the Supreme Court’s decision in the Nikesh Tarachand Shah[1] case – which struck down the pre-conditions for bail prescribed under Section 45(1). Over the years, the list of “scheduled offences” under Schedule I of the PMLA has also been amended significantly. Another aspect that arises in many PMLA proceedings is the admissibility of statements made to investigating officers.
Continue Reading The PMLA – is the net cast too wide?
The recent instances of leakage of Whatsapp chats obtained during the course of investigation and their admissibility as evidence in a criminal trial has brought the issue of electronic evidence to the forefront. These Whatsapp chats have been leaked in the public domain at the investigation stage itself, even before the commencement of the trial. Considering these recent developments, the legal framework for electronic evidence merits further scrutiny.
Under the Indian Evidence Act, 1872, Section 65B prescribes a distinct framework that governs the admissibility of electronic evidence. There have been multiple litigations over the scope and ambit of Section 65B, with divergent views taken by the Apex Court.
Continue Reading Supreme Court on the admissibility of electronic evidence under Section 65B of the Evidence Act.
Films are an integral part of our daily lives whether it be belting out filmy dialogues or watching films to de-stress and relax. While it is commonly understood that the dialogues, script, music and lyrics forming part of the film are subject matter of copyright protection, the nitty-gritty in relation to intellectual property rights protection of film titles is less discussed. Considering that fact that it is the title of the film that at the first instance catches the attention of the general public, the law governing the protection and enforcement of film titles becomes relevant. In this blog, we have analysed the protection available to film titles under the Indian copyright and trademark regime.
Continue Reading What’s in a Name?