From their abrupt promulgation[1] to their unusual administration by two ministries[2], to being the subject of widespread protests, and the staying of several operative portions by courts[3], the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (“Rules”) have had a brief and tumultuous existence.
The Supreme Court, in the case of Sripati Singh vs. The State of Jharkhand & Anr[i], has provided much needed clarity on the often-used defence of a cheque having been issued as ‘security’ in proceedings under the Negotiable Instruments Act, 1881 (the Act). The Court held that a cheque issued by way of security, if dishonoured, would attract the provisions of the Act, if the same is issued in consequence of a legally enforceable debt, which has become recoverable at the time of its presentation.
In continuance of various measures to resolve the pile of non-performing assets (NPAs) in the financial sector, the Reserve Bank of India (RBI) has now turned its focus on the role and framework of Asset Reconstruction Companies (ARCs) in being an important part of the solution. Even though the ARCs were in the game since enactment of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI”), their performance has been sub-optimal and the recovery percentage abysmally low.[1]
Continue Reading Overhaul of the ARC Framework – Need of the hour
In our previous post we had provided a synopsis of the legal framework relating to aircraft leasing in India and Indian IFSCs. In this piece, we will provide an overview of the tax incentives offered to the aircraft leasing activities undertaken from IFSCs located in India to achieve the dream of developing the GIFT IFSC into a global aircraft leasing hub. We have provided a few more thoughts to ponder upon as India fuels its engines to realise its objective of ‘letting the common citizen of the country fly’ (Ude Desh Ka Aam Nagrik).
Continue Reading Part III (B): Aircraft Leasing in IFSC – Let’s kick the tires and light the fires!
Power purchase agreements (PPAs) are generally long-term contracts that are vulnerable to legislative or judicial interventions. These interventions have the potential to impact the cost of establishing or operating generation plants over the life of the PPA. In order to address this risk, PPAs (and many other long-term contracts) incorporate a provision for ‘Change in Law’, which seeks to provide a mechanism to compensate the affected party for increase in cost or decrease in revenues, occasioned by changes in rules/ regulations governing the setting up and operation of the generation plant.
Continue Reading Recovery of Change in Law Impact – An Overdue Intervention
Previously, RBI had permitted Indian entities to make mandatory sponsor commitment to AIFs in IFSC under the ‘automatic route’
Alternative Investment Funds (“AIFs”) set up in an International Financial Services Centre (“IFSC”) are required to register themselves as Foreign Portfolio Investors (“FPIs”), for being able to invest inter alia in securities listed on Indian stock exchanges or in specific listed or unlisted corporate debt securities of Indian companies. Since entities set up in IFSCs are equivalent to ‘non-residents’ for the purposes of Indian foreign exchange regulations, restrictions placed by Securities Exchange Board of India (“SEBI”) and the Reserve Bank of India (“RBI”) on participation of Indian residents in FPIs are, by default, applicable to AIFs in IFSC. Considering that AIFs may be set up by managers/ sponsors who are resident Indian entities and that the SEBI (Alternative Investment Funds) Regulations, 2012 (“AIF Regulations”), require managers/ sponsors of AIFs to make mandatory sponsor commitment[1] to the AIF, it is imperative that the restrictions on residents investing in FPIs do not conflict with the mandatory sponsor commitment requirements under AIF Regulations, as applicable to AIFs in IFSC.
Marking a significant departure from the erstwhile position, SEBI has mandated that Cat I and II AIF managers should procure Portfolio Management license for facilitating Co-investments
Fund managers desirous of facilitating Co-investments for contributors, sponsors or themselves, in connection with their Category I or Category II AIFs (“Cat I and/or II AIFs”), shall be required to register themselves with SEBI as ‘Co-investment Portfolio Manager’ (as defined below) i.e. a new category of portfolio managers under SEBI (Portfolio Managers) Regulations, 2020 (“SEBI PM Regulations”), effective from December 9, 2021.
After a prolonged and anxious wait, on November 9, 2021, SEBI finally notified its far-reaching amendments to the regulatory regime for Related Party Transactions (“RPT”). The amendments[1] to the RPT regulatory regime under the SEBI (LODR) Regulations, 2015 (“LODR”), have their genesis in the Report of the Working Group on RPTs (“WG Report”), which was issued by SEBI on January 27, 2020.
Continue Reading Decoding SEBI’s latest amendments to the RPT regime
Ever since the notification of the Companies (Amendment) Act, 2017 (“2017 Amendment”), the identification and declaration of Significant Beneficial Owners (“SBO”) has been a vexed issue for India Inc.
Recently, in the case of Godrej Properties Ltd. v. Goldbricks Infrastructure Pvt. Ltd.[i], the Hon’ble Bombay High Court has held that an arbitral tribunal cannot pass ex-parte orders on the mere filing of an Application under Section 17 of the Arbitration and Conciliation Act, 1996 (the Act) without giving the parties an opportunity to be heard. The Court has further distinguished the powers of an arbitral tribunal to pass interim orders under the Act from those enjoyed by a Civil Court under the Code of Civil Procedure, 1908 (CPC).