TaxCorp Corporate Laws

Corporate Laws Highlights

05-12-2024 (2024) TaxCorp(CL) 30392 (DELHI)

Potential Precedent in RERA Regulations Upheld by Delhi High Court Regarding Pre-Deposit Requirements - The Delhi High Court’s ruling underscores the inviolability of the pre-deposit requirement under RERA, clarifying that offering collateral in lieu thereof is not a permissible substitute. Stakeholders within the real estate sector must approach pre-deposit obligations with utmost seriousness. Failing to comply may result in non-hearings of appeals, culminating in adverse consequences for companies and their stakeholders, reflecting a stringent adherence to legislative provisions.

14-08-2024 (2024) TaxCorp(CL) 30391 (NCLT)

Section 218, of the Companies Act, 2013 - NCLAT Ruling on Employees' Protection under Section 218 of the Companies Act - This ruling accentuates the significance of procedural adherence in the context of employee protections under the Companies Act. Consequently, the decision underscores that while employees may seek redress under Section 218, the necessity for clear, non-repetitive applications is crucial. Parties seeking relief must ensure their claims are substantiated by fresh grounds, particularly in light of prior disclosures and resolutions in the same matter. Legal practitioners should approach similar cases with a preparedness to clearly delineate new allegations from previously settled disputes.

06-09-2024 (2024) TaxCorp(CL) 30390 (NCLT)

Mumbai Tribunal Decision On Allegations Of Oppression And Mismanagement In Family-Owned Company - In light of the Tribunal's ruling, petitioners must take strategic steps when formulating claims of oppression and mismanagement—ensuring timely actions are taken regarding any corporate decisions that may dilute their interests, and solid evidence is gathered to support claims of familial settlements or agreements. Furthermore, the distinction between statutory rights and expectations regarding directorship needs to be explicitly understood, demotivating reliance on assumptions.

11-11-2024 (2024) TaxCorp(CL) 30389 (DELHI)

High Court Upholds Equal Treatment of Creditors in Company Winding-Up Proceedings - The Delhi High Court's decision underscores the paramount principle of equitable treatment among creditors during a company's winding-up processes. As a decisive take-away, stakeholders must recognize that timely and diligent legal action is crucial, especially in contexts where recovery rights may be contested. Professionals involved in such proceedings should ensure robust representation to optimize their clients' positions in potential insolvency matters.

19-11-2024 (2024) TaxCorp(CL) 30388 (BOMBAY)

High Court of Bombay addresses allegations of forgery in real estate project registrations, dismissing PIL due to lack of substantial evidence. - The High Court of Bombay has decisively settled that while concerns regarding fraudulent registrations in the real estate sector are valid, they necessitate specific and substantiated factual bases for judicial intervention. Consequently, parties suspecting irregularities should gather concrete evidence before seeking court involvement, following prescribed legal pathways for contesting project registrations.

11-11-2024 (2024) TaxCorp(CL) 30387 (DELHI)

Sections 327, 326, of the Companies Act, 2013 - High Court of Delhi Rules on Preferential Payments and Winding Up Procedure in Commercial Disputes - The High Court of Delhi's ruling signifies a critical reinforcement of the procedural aspects concerning claims arising during winding-up proceedings. Parties engaged in similar commercial arrangements must ensure compliance with the formal procedures for claims and prioritization established in the Companies Act to protect their financial interests effectively. Moving forward, it is paramount for creditors to actively pursue their rights through appropriate legal channels and timely requests, particularly in the context of winding-up procedures, ensuring they adhere to the statutory framework governing preferential payments and claims.

06-12-2024 (2024) TaxCorp(CL) 30386 (NCLT)

NCLAT Holds Interim Orders Must Adhere to Natural Justice Principles - The decision by the NCLAT underscores the critical need for tribunals to substantiate their orders with explicit reasoning. Legal practitioners must ensure that in proceedings involving interim orders, all arguments are given adequate consideration and the resulting orders reflect a commitment to the principles of natural justice. This case serves as a staunch reminder that procedural safeguards are paramount in maintaining judicial integrity and protecting the rights of all parties involved.

23-02-2023 (2024) TaxCorp(CL) 30385 (NCLT)

Sections 232, 230 of the Companies Act, 2013 - Legal Crux in Amalgamation: Tribunal Upholds Rejection by D's Shareholders in HT Mobile and HT Media Case - The Tribunal's decision firmly establishes the principle that amalgamation can only proceed with the unanimous consent of all relevant shareholders. As a result, HT Mobile and HT Media must rethink their strategy concerning the amalgamation proposal to ensure that they align with the statutory requirement of obtaining the requisite majority, considering the stance taken by D's shareholders.

11-09-2024 (2024) TaxCorp(CL) 30384 (NCLT)

Sections 241, 180 of the Companies Act, 2013 - NCLT Addresses Oppression and Mismanagement in Inter-Corporate Loans without Shareholder Consent - This decision emphasizes the significance of shareholder approval in corporate transactions. Consequently, corporations must ensure that any inter-corporate loans or operations that require shareholder consent are conducted following the legal requisites set forth in the Companies Act. Adherence to these provisions is crucial to avoid instances of perceived oppression and mismanagement. Companies should establish robust compliance mechanisms to facilitate communication with shareholders and ensure that necessary resolutions are passed.

05-07-2024 (2024) TaxCorp(CL) 30383 (NFRA)

Failure of Audit Standards Leads to Severe Penalties for Chartered Accountant and Firm in Misconduct Case - This ruling illustrates the paramount importance of strict adherence to auditing standards and the disclosure requirements stipulated under the Companies Act, 2013 and related legal frameworks. Professionals are obliged to exercise utmost diligence and transparency, particularly in audit processes for substantial financial transactions and significant accounting principles. Consequently, future auditors should implement a thorough review system ensuring compliance with auditing standards to avoid similar sanctions.

06-09-2024 (2024) TaxCorp(CL) 30382 (NCLT)

NCLT Mumbai Orders Fair Valuation Exit for Oppressed Shareholders in Bedekar Family Company - The NCLT's ruling emphasizes the critical balance between safeguarding minority shareholders' rights and acknowledging the unique dynamics of closely held family businesses. Each case will depend on its individual facts and circumstances, particularly relating to the timing and nature of alleged misconduct. The outcome suggests that petitioners in similar future cases could benefit from seeking dissolution and exit provisions, particularly in family-run enterprises where emotional and relational complexities exist.

28-08-2024 (2024) TaxCorp(CL) 30381 (NCLT)

Section 113, 241, 242 of the Companies Act, 2013 - Legal Representation and Company Management: NCLAT Rules on Corporate Governance Disputes - The NCLAT’s ruling serves to reinforce the responsibilities of corporate representatives and expedites the resolution of oppression and mismanagement claims within companies. It establishes a clear expectation for the NCLT to resolve outstanding petitions promptly, thereby enhancing shareholder trust in corporate governance mechanisms. In light of this decision, companies should ensure that their boards provide unequivocal guidance to their representatives to mitigate the risk of disputes and safeguard shareholder interests.

05-07-2024 (2024) TaxCorp(CL) 30380 (NFRA)

Misconduct in Audit Oversight Leads to Significant Penalties for Chartered Accountant - The adjudication against CA Yogesh Mahipal and his firm illustrates the paramount importance of diligence, adherence to regulatory frameworks, and responsibility in the auditing realm. The essence of this ruling underscores that lapses in due process result in actionable repercussions, thereby compelling all professionals in the field to rigorously apply auditing standards and maintain transparency.

21-06-2024 (2024) TaxCorp(CL) 30379 (NFRA)

Professional Conduct Violation in Audit: CA Krishna Bihari Chaturvedi Penalized for Non-Compliance with Standards - The ruling delineates clear legal repercussions for chartered accountants who fail to meet established auditing standards and professional obligations. CA Krishna Bihari Chaturvedi's case serves as a pivotal reminder that adherence to ethical codes and standards is non-negotiable. Practitioners should maintain rigorous compliance with all relevant statutes and auditing standards to safeguard against professional misconduct and its consequential penalties.

21-06-2024 (2024) TaxCorp(CL) 30378 (NFRA)

A Qualified Chartered Accountant Penalized for Professional Misconduct in Audit Engagements - This legal decision emphasizes the necessity for rigorous adherence to professional standards and legislative requirements when accepting audit assignments. Chartered Accountants should prioritize the validation of their appointments in accordance with applicable laws and standards to avoid potential penalties and reputational damage. Professionals are urged to implement a personal compliance checklist referencing the relevant provisions, including those in the Companies Act, 2013, and the Chartered Accountants Act, 1949, to deter future occurrences of such infractions and safeguard the audit process's integrity.

16-05-2024 (2024) TaxCorp(CL) 30377 (NFRA)

Failure to Disclose Material Facts Leads to Professional Misconduct Charges Against Auditors - This case underscores the critical importance of transparency, diligence, and adherence to established auditing standards. Auditors must recognize and report material facts that impact financial statements, ensuring compliance with statutory obligations. Failure to do so invites severe penalties under the Companies Act, reaffirming the responsibilities held by audit professionals.

21-10-2024 (2024) TaxCorp(CL) 30376 (NFRA)

Professional Misconduct Under Scrutiny: National Financial Reporting Authority Imposes Penalty on Auditor for Negligence and Failures in Fraud Reporting - The NFRA’s decision reiterates the legal obligation of auditors to exhibit diligence and integrity in their work. Engagement partners must not only comply with statutory requirements but also uphold the highest professional standards when conducting audits. The penalties imposed underscored the importance of accountability in the auditing profession, cementing the notion that negligence has tangible consequences. Future engagements should ensure enhanced scrutiny and verification processes are implemented to mitigate risks of fraud and uphold stakeholders' interests.

10-09-2024 (2024) TaxCorp(CL) 30375 (NFRA)

Breach of Auditing Standards in Coffee Day Enterprises Limited: Major Misconduct Found - The NFRA decision marks a critical stance against professional negligence in auditing practices. The outcomes highlight the necessity for statutory auditors to ensure rigorous adherence to established auditing standards and legal frameworks, ensuring that professional skepticism is applied in all cases, especially in instances with potential fraudulent implications. Audit firms must improve supervisory mechanisms to avoid lapses that jeopardize public trust and financial integrity. Assessors and audit teams must remain vigilant in the performance of their audits to comply with laws and regulations even when disclaiming opinions.

09-09-2024 (2024) TaxCorp(CL) 30374 (NFRA)

Auditor Faces Heavy Sanctions for Professional Misconduct in Financial Reporting of Publicly Listed Company - Given the decision rendered by the NFRA, it is imperative for auditors, especially those engaging with Public Interest Entities, to rigorously adhere to established auditing standards and ethical requirements. Professional skepticism and diligence must be at the forefront of every audit to maintain credibility and transparency in financial reporting. Auditors should also conduct thorough reviews and verify compliance on every key aspect of audits to preclude future violations. Ongoing education on recent developments in auditing regulations and standards is essential to ensure conformity to the ever-evolving landscape of financial reporting responsibilities.

06-09-2024 (2024) TaxCorp(CL) 30373 (NFRA)

Legal Findings on Professional Misconduct Related to Non-disclosure from Related Parties - In light of the findings, CA Lavitha Shetty’s case reinforces the importance of transparency and accuracy in financial disclosures and the duty of care owed by professionals in maintaining independence and ethical standards. The decision effectively serves as a stern warning to all Chartered Accountants regarding the consequences of negligence and misrepresentation of facts, thereby emphasizing the need for rigorous adherence to compliance mandates.

23-10-2024 (2024) TaxCorp(CL) 30372 (NCLT)

Majority Shareholder Vindicated: Tribunal Deems Director Actions as Oppressive and Misleading - The decision rendered by the Tribunal underscores the importance of transparency and the adherence to corporate governance principles within the operational mechanisms of a company. The ruling reinforces that minority shareholders must be safeguarded against manipulative actions that aim to dilute their influence unjustly.

23-10-2024 (2024) TaxCorp(CL) 30371 (NCLT)

Tribunal Rules Against Petitioner in Oppression and Mismanagement Claim - The Tribunal ultimately dismissed the petition, reinforcing the principle that shareholders must approach legal forums with transparency and integrity. The key takeaway from the Tribunal's decision is the emphasis on the criterion of ‘acting with clean hands’ when pursuing claims of oppression and mismanagement under corporate law. Future petitions similar in nature must ensure credible affirmations of authenticity and propriety in their claims, particularly focusing on the accuracy of self-representation and the procedural adherence of all parties involved.

11-11-2024 (2024) TaxCorp(CL) 30370 (DELHI)

Court Denies Petitioner's Request for Company Name Change over Trademark Dispute Involving 'Panchhi' - In light of the Court's ruling, it is imperative for entities involved in trademark disputes to seek resolution within the appropriate legal frameworks dedicated to intellectual property rights rather than attempt to navigate these issues under the corporate nomenclature provisions of the Companies Act. For the parties involved, as acknowledged in the decision, acknowledgment of the need for a dedicated and proper forum for their disputes may facilitate a more definitive resolution regarding ownership and usage rights of the contested trademark 'Panchhi'. Going forward, parties should seek comprehensive legal advice to delineate their intellectual property rights clearly and avoid jurisdictional pitfalls.

12-08-2024 (2024) TaxCorp(CL) 30369 (NCLT)

NCLT Approves Joint First Motion Application for Amalgamation While Dispensing with Creditors' Meetings - The decision of the NCLT to permit the amalgamation while dispensing with the creditors' meetings signals a progressive interpretation of the Companies Act, 2013. This ruling emphasizes the Tribunal’s commitment to facilitating corporate restructuring processes while ensuring compliance with statutory requirements and stakeholder engagement standards. Companies seeking amalgamation should note the Tribunal's willingness to accommodate innovative meeting formats, which could streamline future processes, potentially enhancing operational efficiencies.

05-09-2024 (2024) TaxCorp(CL) 30368 (NCLT)

NCLT Mumbai Resolves Deadlock in Shareholder Dispute through Valuation - Based on the NCLT's resolution of this deadlock, it is imperative for companies with similar shareholding structures to establish comprehensive and transparent agreements on profit-sharing, remuneration, and corporate governance. The Tribunal's decision emphasizes the importance of having agreed upon valuation methods and transparent reporting to avoid potential conflicts that could hinder company operations. Shareholders are advised to proactively implement compliance frameworks to prevent entrenchment of disputes that escalate to the extent witnessed in this case.

08-08-2024 (2024) TaxCorp(CL) 30367 (NCLT)

Jurisdiction of Tribunal Limited in Oppression Claims: Non-payment of Salary Not Grounds for Mismanagement - The decision underscores the importance of clear evidence and the distinction between various legal contracts and frameworks governing corporate and employment relationships. Therefore, stakeholders alleging oppression or mismanagement must ensure their claims are substantively supported, as failure to do so may lead to dismissal, as seen in this case. Companies must rigorously document financial transactions and maintain transparent practices to protect against claims of mismanagement.

02-08-2024 (2024) TaxCorp(CL) 30366 (NCLT)

Sections 241, 242, of the Companies Act, 2013 - Legal Crux of NCLT Decision: Oppression and Mismanagement Allegations Dismissed - This decision underlines that for allegations of oppression and mismanagement to succeed under Sections 241 and 242 of the Companies Act, there must be substantial evidence demonstrating that the actions taken by majority shareholders are not merely strategic business decisions but instead designed to undermine the rights of minority shareholders.

09-08-2024 (2024) TaxCorp(CL) 30365 (NCLT)

Section 98 of the Companies Act, 2013 - National Company Law Tribunal Ruling: Liquidation Of Holding Company Affirms Rights Of Investors And Shareholder Meeting Authority - In light of the NCLT's decision, it underscores the importance of understanding cross-jurisdictional legal authority, especially concerning liquidation proceedings. Companies are advised to ensure compliance with arbitral awards and investor agreements to avoid administrative and judicial challenges in the future. The ruling empowers liquidators with critical functions, enhancing their ability to uphold creditors' rights even amid cross-border operations.

08-08-2024 (2024) TaxCorp(CL) 30364 (NCLT)

Tribunal Addresses Claims of Oppression and Mismanagement in Shareholding Dispute - In light of the tribunal's decision, it is crucial for shareholders to maintain meticulous records of all agreements, share transfers, and participation in board meetings. The implications of inadequate record-keeping or failure to contest acknowledgments in a timely manner can lead to significant financial liabilities. Upon adherence to the tribunal's mandates, shareholders can safeguard their rights effectively by ensuring transparent transactions and consistent documentation practices throughout their corporate engagements.

30-08-2024 (2024) TaxCorp(CL) 30363 (NCLT)

Section 241 of the Companies Act, 2013 - Legal Dispute Over Share Purchase Agreement: NCLT Dismisses Oppression Claim in Altron Case - The decision underscores that disputes rooted in contractual obligations, such as shareholder agreements, should typically be pursued within civil courts rather than being framed as issues of corporate oppression or mismanagement. Stakeholders involved in similar agreements should be acutely aware that the obligations set forth in such contracts can significantly affect their rights and responsibilities, with potential claims hinging on evidence demonstrating prejudice or detriment to interests directly linked to company governance.

13-12-2024 Circular No. SEBI/HO/AFD/AFD-POD-1/P/CIR/2024/175

Pro-rata and pari-passu rights of investors of AIFs

13-12-2024 Circular No. SEBI/HO/IMD/PoD2/P/CIR/2024/174

Classification of Corporate Debt Market Development Fund (CDMDF) as Category I Alternative Investment Fund

13-12-2024 Circular No. SEBI/HO/DDHS/DDHS-PoD-1/P/CIR/2024/173

Relaxation from the ISIN restriction limit for issuers desirous of listing originally unlisted ISINs (outstanding as on December 31, 2023)

11-12-2024 NOTIFICATION No. SEBI/LAD-NRO/GN/2024/217

Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) (Third Amendment) Regulations, 2024.

10-12-2024 Circular No. SEBI/HO/MRD/MRD-PoD-3/P/CIR/2024/172

Enhancement in the scope of optional T+0 rolling settlement cycle in addition to the existing T+1 settlement cycle in Equity Cash Markets

10-12-2024 Circular No. SEBI/HO/MRD/TPD/CIR/P/2024/171

Revised Guidelines for Capacity Planning and Real Time Performance Monitoring framework of Market Infrastructure Institutions(MIIs)

03-12-2024 Master Circular No. SEBI/HO/MRD/MRD-PoD-1/P/CIR/2024/168

Master Circular for Depositories

04-12-2024 NOTIFICATION No. SEBI/LAD-NRO/GN/2024/216

Securities and Exchange Board of India (Intermediaries) (Second Amendment) Regulations, 2024.

04-12-2024 NOTIFICATION No. SEBI/LAD-NRO/GN/2024/215

Securities and Exchange Board of India (Prohibition of Insider Trading) (Third Amendment) Regulations, 2024.

05-12-2024 Circular No. SEBI/HO/CFD/CFD-TPD-1/P/CIR/2024/170

Repository of documents relied upon by Merchant Bankers during due diligence process in Public issues

03-12-2024 Circular No. SEBI/HO/MIRSD/MIRSD-PoD1/P/CIR/2024/169

SMS and E-mail alerts to investors by stock exchanges

02-12-2024 Circular No. IFSCA-LPRA/11/2024-Legal and Regulatory Affairs

International Financial Services Centres Authority (Informal Guidance) Scheme, 2024

28-11-2024 NOTIFICATION No. SEBI/LAD-NRO/GN/2024/213

Securities and Exchange Board of India (Depositories and Participants) (Third Amendment) Regulations, 2024

29-11-2024 NOTIFICATION No. SEBI/LAD-NRO/GN/2024/214

Securities and Exchange Board of India (Merchant Bankers) (Amendment) Regulations, 2024.

28-11-2024 NOTIFICATION No. SEBI/LAD-NRO/GN/2024/212

Securities and Exchange Board of India (Attestation of Documents) (Amendment) Regulations, 2024.

28-11-2024 Circular No. SEBI/HO/MRD/TPD/P/CIR/2024/167

Business Continuity for Interoperable Segments of Stock Exchanges

26-11-2024 Circular No. SEBI/HO/IMD/IMD-I PoD-1/P/CIR/2024/163

Valuation of repurchase (repo) transactions by Mutual Funds

22-11-2024 Circular No. SEBI/HO/MRD/POD-3/P/CIR/2024/162

Guidelines to Stock Exchanges, Clearing Corporations and Depositories

21-11-2024 Circular No. SEBI/HO/CFD/CFD-PoD-2/P/CIR/2024/0161

Withdrawal of Master Circular on issuance of No Objection Certificate (NOC) for release of 1% of Issue Amount

20-11-2024 NOTIFICATION No. SEBI/LAD-NRO/GN/2024/211

Securities and Exchange Board of India (Bankers to an Issue) (Amendment) Regulations, 2024.

20-11-2024 NOTIFICATION No. SEBI/LAD-NRO/GN/2024/210

Securities and Exchange Board of India (Buy-Back of Securities) (Second Amendment) Regulations, 2024

18-11-2024 Circular No. SEBI/HO/DDHS/DDHS-PoD-3/P/CIR/2024/160

Amendment to Para 15 of Master Circular for Credit Rating Agencies (CRAs) dated May 16, 2024 (“Master Circular”)

18-11-2024 NOTIFICATION No. SEBI/LAD-NRO/GN/2024/209

Securities and Exchange Board of India (Alternative Investment Funds) (Fifth Amendment) Regulations, 2024.

13-11-2024 Circular No. SEBI/HO/DDHS/DDHS-PoD-2/P/CIR/2024/159

Relaxation from certain provisions for units allotted to an employee benefit trust for the purpose of a unit based employee benefit scheme, Alignment of timelines for making distribution by InvITs and Format of Quarterly Report and Compliance Certificate

13-11-2024 Circular No. SEBI/HO/DDHS/DDHS-PoD-2/P/CIR/2024/158

Relaxation from certain provisions for units allotted to an employee benefit trust for the purpose of a unit based employee benefit scheme, Alignment of timelines for making distribution by REITs and Format of Quarterly Report and Compliance Certificate - Real Estate Investment Trusts (REITs)

28-10-2024 DRAFT CIRCULAR, DATED 28-10-2024

Sms and e-mail alerts to investors by stock exchanges.

29-10-2024 PRESS RELEASE, DATED 29-10-2024

FAQ for Investors

29-10-2024 CIRCULAR NO. F. NO. IFSCA-IF-10PR/1/2023-CAPITAL MARKETS/5

Clarifications in relation to investment restrictions on retail schemes set up in IFSCs.

29-10-2024 NOTIFICATION NO. IFSCA/GN/2024/011

International Financial Services Centres Authority (Market Infrastructure Institutions) (Amendment) Regulations, 2024 - amendment in regulations 2, 8, 15, 16, 17, 18, 23, 24, 29, 31, 32, 39, 41, 57, 62, and 73; insertion of regulation 10A, 25A, 43A, 63A, 63B, and 63C; insertion of Schedule-I and Schedule-II; substitution of regulations 25, 26, 27, and 44.

30-10-2024 CIRCULAR NO. F. NO. IFSCA-PLNP/12/2024-CAPITAL MARKETS

Framework for ESG Ratings and Data Products Providers in the IFSC