Contracts Act

Introduction

In its recent judgement of Loop Telecom and Trading Limited v Union of India and Another[1], the Supreme Court denied the Appellant restitution of certain sums paid by it under a void agreement. The Court, while rejecting the claim for restitution u/s 65[2] of the Indian Contract Act, 1872 (“Act”), placed reliance on the doctrine of ‘in pari delicto’, and reiterated that courts shall not assist a party who has paid the money or handed over the property in pursuance of an illegal or immoral contract[3].

Continue Reading Restitution Under the Contracts Act: The In Pari Delicto Exception

Invesco v Zee

In a recent judgment pronounced in Invesco Developing Markets Fund v. Zee Entertainment Enterprises Limited[1] (“Judgment”), on March 22, 2022, a Division Bench of the Bombay High Court (“BHC”) allowed Invesco’s appeal against a judgment dated October 26, 2021[2]. The October 26 judgment was passed by a Single Judge of the BHC (referred to hereinafter as the “Impugned Order”), which had granted an injunction restraining Invesco from calling for and holding an extraordinary general meeting (“EGM”) of Zee.

Continue Reading Bombay High Court’s Judgment in Invesco v Zee– A major boost for shareholders’ rights in India

Information Rights of a Company Director

Background

The fiduciary duties of the directors of a company under the Companies Act, 2013 (“Act”) have been well-recognised in multiple landmark judgments, and in Section 166 of the Act.  Under Section 166(3), a director is required to exercise his duties with reasonable care, skill and diligence, and exercise “independent judgement”.

Continue Reading Information Rights of a Company Director- Does our company law need a relook in the post-pandemic world?

Multi Modal Logistics Parks

BACKGROUND

A systematic logistics network is crucial to economic growth. To develop this sector, the Cabinet Committee on Economic Affairs, in October 2017, under the ‘Bharatmala Pariyojana’, mandated the Ministry of Roads Transport and Highways (MoRTH) to develop Multi Model Logistics Parks (MMLP) across the country[1].

Continue Reading Multi Modal Logistics Parks – Logistics Future of India

JV Company’s Board

Background

The fiduciary relationship between a director and the company is among the foremost principles of company law, which was first enshrined by common law courts of equity. The Supreme Court of India (“SC”) first recognised this common law principle in its celebrated judgment in the Nanalal Zaver case[1], which noted that directors can be considered as “trustees” of the company, and “must exercise their powers for the benefit of the company and for that alone”.[2]

Continue Reading Dilemma of a Nominee Director on the JV Company’s Board – Is there a conflict in his fiduciary duties?

Company Law

Introduction

For a company or a large corporate group, the outcome of a single litigation can be life changing, and may severely impact the interests of the promoters, the management, investors, and other stakeholders. Given the impact that even a single litigation can have on the life of a company, the lawmakers have been conscious of the fact that time is of the utmost essence in adjudicating company disputes.

Continue Reading Zee v Invesco – Has Bombay High Court created parallel jurisdiction in company law matters?

Product Liability

INTRODUCTION

‘Product Liability’ has been defined for the first time under the Consumer Protection Act, 2019 (“2019 Act”). As per the 2019 Act, product liability means the responsibility of a product manufacturer or product seller, or product service provider, to compensate for any harm caused to a consumer by a defective product manufactured or sold or by deficiency in services in relation to the product.[1]

Continue Reading Product Liability under the Consumer Protection Act, 2019: An Overview

Delegated Legislation

Background

Over the last few decades, there has been a trend where only a small fraction of law stems directly from ‘legislations’ passed by the Parliament. In the sphere of corporate law, the tendency of the law makers is to enact ‘bare-bone’ statutes such as the SEBI Act, 1992 (“SEBI Act”) and the Foreign Exchange Management Act, 1999 (“FEMA”), and a bulk of the law is enacted by the designated regulators, such as the MCA, SEBI and RBI.

Continue Reading The Rise & Rise of Delegated Legislation – Do we need more Safeguards?

Company Law

Background

The law on minority squeeze-out has not been a glorious chapter in the history of India’s company law. The Parliament, as a matter of legislative policy, appears to be uncomfortable with enacting a law that forces minority shareholders to compulsory sell their shares. The government perceives it as a kind of ‘expropriation’. Hence, despite Dr. JJ Irani Committee’s specific recommendation, our Parliament has adopted a conservative approach while providing majority shareholders with the mechanism to ‘buyout’ the shares held by the minority shareholders. Even after the ‘right to property’ was abolished as a fundamental right under our Constitution, law makers seem uncomfortable in giving such right to majority shareholders, and half-hearted attempts have been made to provide majority shareholders with the ability to fully own a company.

Continue Reading Minority squeeze-out under our Company Law – Is it a legislative policy dilemma?

MCA’s Notification on Section 67 of the Companies Act, 2013

Introduction

One aspect which English Company Law has always grappled with is the manner in which the capital of a company should be protected for the benefit of its creditors. Way back in 1887, in its celebrated decision in Trevor v Whitworth[1], the House of Lords held that the statutory restrictions on a company’s power to reduce its capital “is to prohibit every transaction between a company and a shareholder, by means of which the money already paid to the company in respect of his shares is returned to him”.

Continue Reading MCA’s Notification on Section 67 of the Companies Act, 2013 – Is it an Exemption or an Inclusion under the Henry VIII Clause?