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CAM Corporate Team

The CAM Corporate Team can be reached at cam.mumbai@cyrilshroff.com

Indian Industrial Law - Wages

In its judgment dated September 20, 2018, the Supreme Court of India (SC), in the matter of Rajasthan State Road Transport Corporation, Jaipur vs. Shri Phool Chand[1] (Phool Chand) has ruled on a worker’s (workmen as per Industrial Disputes Act, 1947) entitlement to back-wages, if he/she his reinstated.

Under Indian labour and industrial laws, the provisions pertaining to a worker’s entitlement to back-wages is covered under the legal regime of Industrial Disputes Act, 1947 (ID Act).

In this regard, the ID Act stipulates that a worker[2] will be entitled to back-wages during pendency of proceedings.
Continue Reading Back Wages Upon Reinstatement: An Entitlement Which Has To Be Determined!!

Sec 377 LGBT Employment in India

The Supreme Court of India has held Section 377 of the Indian Penal Code, 1860 (IPC) to be unconstitutional, in so far as it penalises any consensual sexual relationship between two adults, be it homosexuals, heterosexuals or lesbians (Navtej Singh Johar v. Union of India and Ors. (2018) (Johar Judgment). By way of this landmark judgment, the Supreme Court has overruled its earlier decision in Suresh Kumar Koushal v. Naz Foundation (2013), whereby, the validity of Section 377 of the IPC had been upheld.
Continue Reading What Does the Section 377 Judgment Mean for a Modern Day Employer?

Transfer of Proceedings from Courts to NCLT: The Calcutta High Court’s View

A question that has often come up since the Companies Act, 2013 (the 2013 Act) came into force is how will proceedings ongoing before the High Courts be transferred to the National Companies Law Tribunal (NCLT)? Section 434(1)(c) of the 2013 Act deals with transfer of “all proceedings” under the Companies Act, 1956[1] to the NCLT. For winding up proceedings, this provision states that only such proceedings relating to winding up, which are at a certain stage as prescribed by central Government, are to be transferred to the NCLT. Another part of this provision, meanwhile, deals with cases other than winding up proceedings, which may not be transferred to the NCLT.[2] A reading of all the various provisions leads to the conclusion that not all proceedings under the 1956 Act pending before the District Courts and High Courts are to be transferred to the NCLT.
Continue Reading Transfer of Proceedings from Courts to NCLT: The Calcutta High Court’s View

Online Pharmacy Regulations in India

The Indian Pharmaceutical industry is in its prime phase of growth today at 11-12% per year. While exports occupy a huge chunk, the country meets nearly 95% of its own domestic demands through indigenous production and the domestic retail market is growing by leaps and bounds.

Sale of drugs in India is currently governed by the Drugs and Cosmetics Act, 1940 (D&C Act) and the Drugs and Cosmetics Rules, 1945 (D&C Rules). At present, the law permits sale of drugs through brick-and-mortar pharmacies only. The law as it currently stands is somewhat out of tune with the times in that it is still to catch up with the concept of online sales of drugs.
Continue Reading Medicines in Your Mail: The India Regulatory Story

Education Technology

The use of digital technology in the education sector is growing at a remarkable pace in India. With news reports giving Byju’s, a Bengaluru based learning app, a valuation of over USD 2 billion in its latest round of investments, the investors’ interest in the education technology (edtech) sector is on the rise.
Continue Reading M&A Trends in the EdTech Sector

To Regulate or Not To Regulate DPCO 2013 and The Modi-Mundi Pharma Case

Drug price control has been a source of considerable agony to the pharmaceutical industry. Price caps on drugs, though flowing from a larger public interest perspective, has the power to throttle growth of the industry and limit availability of new life saving-drugs to the public at large. It is much to the chagrin of the major players and their business models. The Government has of course adopted the public comes first policy, which has also seen considerable support by the courts. Right or wrong depends on which side of the street one is on.

Price control as a measure has met with its fair share of challenges and is, as a policy issue, here to stay. Interpretation of price control regulations (DPCO) on the other hand is still a topic for many a contentious litigation before courts. The most recent one is a case where the Hon’ble Delhi High Court on July 17, 2018, passed a judgment in the case of Modi-MundiPharma Pvt. Ltd. v Union of India & Ors[1]. Here, the court opined that drugs developed through incremental innovation or a novel drug delivery system could only be included under the National List of Essential Medicines 2015 (NLEM) for the purpose of fixing the ceiling price, procurement etc. if they were explicitly listed. In other words, the court clarified on what kind of drugs are included.Continue Reading To Regulate or Not To Regulate: DPCO 2013 and The Modi-Mundi Pharma Case

Foreign Investment Reporting Process

In alignment with the Indian Government’s continuing efforts to bolster foreign investment and ease of doing business in India, the Reserve Bank of India (RBI) has issued two important circulars in June 2018 with the aim of simplifying reporting under the Foreign Exchange and Management Act, 1999 (FEMA). The circulars are as follows:

Simplifying reporting under FEMA - RBI Circular

Currently all foreign investment transactions are reported in a complicated, disintegrated manner across various platforms/modes. The Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 (FEMA 20) provide for exhaustive reporting requirements for any foreign investment in India through 12 different forms[1]. Meeting these requirements had become a cumbersome process for foreign investors as well as Indian entities. Continue Reading India Simplifies Foreign Investment Reporting Process

It’s the Final Countdown Achievements by and Expectations of the AIF Industry

Morning Mumbai mist, hot coffee and the 1986 song ‘The Final Countdown’ by Europe is playing in the background – life seems blissful! And it was mostly so for the Alternative Investment Funds (AIFs) industry. As we begin the run-up to Budget 2018, we look back at the milestones crossed in 2017 and the goalposts set for 2018 – and we focus on the key hits, misses and asks of the AIF industry.

2017: Key Highlights 

  • Investment by Banks in Category II AIFs: The Reserve Bank of India (RBI) amended the Reserve Bank of India (Financial Services provided by Banks) Directions, 2016 permitting banks to invest in Category II AIFs up to a maximum cap of 10% corpus of such AIF. With Category II AIFs constituting nearly 50% of the total number of AIFs registered with the Securities and Exchange Board of India (SEBI), this amendment sets the roadmap for channeling domestic savings into productive alternate assets and, at the same time, provides banks with the ability to earn a risk-adjusted return, thereby boosting the overall Return on Equity for its stakeholders.

Continue Reading It’s the Final Countdown: Achievements by and Expectations of the AIF Industry

The M&A Activity Spike Consolidation Among Domestic Players

M&A activity in India has reached USD 46.5 billion in 2017 and is predicted to hit USD 52.8 billion in 2019.[1] There are many reasons for this spike, and one important reason is consolidation among domestic players. The potential opportunities driving consolidation among domestic players are as follows:

  • Expansion of customer base

Post the proposed Vodafone-Idea merger, the combined subscriber count of the merged entity is expected to be around 39 crores with 35% of the market share, making the combined entity the largest operator in India and the second largest in the world.[2] Its nearest competitor, Bharti Airtel, currently has 24.21% of the market share.

The acquisition of BSS Microfinance by Kotak Mahindra Bank led to Kotak’s entry into the micro-lending sector and provided it access to approximately 271,000 customers of BSS.

In the pharma sector, the recent acquisition of Strides Shasuns’ drug brands in India by Eris Lifescience will enable Eris to break into the league of top 25 companies that have a market share of more than 1% in the pharmaceutical sector[3].Continue Reading The M&A Activity Spike: Consolidation Among Domestic Players

Tender Offers – 2017 The Year that Was

January to December 2017 saw 56[1] tender offers/open offers made under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (Takeover Regulations), 41 of which have been completed. This compares to 63 open offers made in the calendar year 2016.

For 2017, the total value of open offers made to the shareholders was Rs. 2,015[2] crores as against Rs. 9,676 crores for 2016. In 2017, no open offers were made by a private equity fund as compared to three made in 2016.[3]

Companies in the non-banking financial companies (NBFCs) space saw a particularly high number of open offers (11 in all). Some of these were open offers for Upasana Finance Limited, Capital India Finance Limited, Dhanvarsha Finvest Limited, Golden Goenka Fincorp Limited, Lark Trading and Finance Limited, Chokhani Securities Limited and TRC Financial Services Limited. However, some of these have not closed, probably due to delays in receiving regulatory approval for change in control of the NBFCs.Continue Reading Tender Offers – 2017: The Year that Was