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Corporate Laws Highlights

SAT Overturns SEBI’s Insider Trading Order: Long-Term Holding and One Phone Call Not Enough for Violation in Aptech Case - Based on the available evidence and the legal framework, SAT decisively held that the mere existence of a single phone call and the subsequent long-term holding of shares do not satisfy the legal threshold for establishing insider trading under Regulation 4 of the PIT Regulations, 2015. The finding emphasizes the importance of substantial and corroborative evidence in proving violations relating to UPSI. As a result, SAT set aside SEBI’s order, allowing the appeal and exonerating the appellants from all charges of insider trading in Aptech shares.

High Court's Decision to Release Funds Reversed by Supreme Court: Investigation Preserved - The Supreme Court’s decision serves as a vital reminder of the balance between judicial interventions and ongoing criminal investigations. It reinforces that courts should exercise caution when engaging with cases where investigations are incomplete, particularly in matters involving financial transactions linked to fraudulent activities. Therefore, it is prudent for parties involved in similar circumstances to refrain from seeking premature judicial relief that can disrupt investigative procedures.

Gujarat High Court Rules Against Malicious Prosecution Over Non-Compliance With Companies Act - This judgment reinforces the criticality of adherence to established accounting standards when addressing related party transactions. It underscores the principle that prosecutorial actions must be anchored in substantive legal requirements. The ruling further signals a judicial commitment to upholding individual rights against unmeritorious allegations, thereby advocating for a more rigorous examination of conditions before initiating criminal proceedings. Practitioners should take heed to ensure that compliance with the Companies Act and associated standards is thorough to safeguard against potential legal repercussions.

Tribunal Upholds Validity of Corporate Actions Amidst Allegations of Oppression and Mismanagement - This decision confirms the power of the Tribunal to address and investigate claims of corporate malfeasance while maintaining the primacy of shareholder agreements and management rights. Companies must ensure proper documentation and transparency in financial dealings to mitigate risks of mismanagement claims. Companies should conduct regular audits and maintain open lines of communication with their shareholders to fend off potential disputes.

Supreme Court Mandates Clarity on Builder-Homebuyer Disputes under Real Estate Act - The Supreme Court's ruling delineates the responsibilities of both builders and home buyers while reaffirming the significance of procedural compliance before reaching the stage of contempt. Home buyers facing similar disputes should prioritize engaging with RERA to address any contested demands, thus potentially avoiding lengthy and complex contempt proceedings. This decision reinforces the need for home buyers to take proactive steps in settling disputes directly with builders through established legal channels rather than resorting to contempt actions prematurely.

Bombay High Court Clarifies Stamp Duty Computation on Demerger of Consumer Mobile Business - The Bombay High Court in its ruling reinforces the critical necessity of adhering strictly to the statutory guidelines laid out in Article 25 (da) of the Maharashtra Stamp Act regarding the computation of stamp duty in Schemes of Arrangement involving demergers. The correction of assessing stamp duty based on the market value of shares issued instead of 'enterprise value' or 'net worth' ensures compliance with legal requirements, underscoring the importance of accurate valuation methods for tax obligations. Tax practitioners and corporate entities must now ensure clarity in share valuation methods deployed to prevent similar miscalculations.

Bombay High Court Upholds Lack of Jurisdiction for Civil Suits Against NCLT Orders under IBC - In light of the foregoing analysis, it is imperative for the appellant and similarly situated parties to heed the clear directives set out in the IBC. The ruling underscores that while civil courts may offer certain remedies in a broad context, specific challenges arising from NCLT orders must be pursued through statutory channels as articulated under the IBC. The Court's dismissal of the commercial appeal signifies that attempts to circumvent this established protocol are unlikely to succeed.

Sections 241, 242 of the Companies Act, 2013 - Court Decision on Oppression and Mismanagement in Private Company: Directors Found Engaging in Unauthorized Financial Activities - The Tribunal’s decision reinforces the principles of corporate governance and the fundamental duty of directors to act in the best interest of the company. The ruling not only highlights the importance of adherence to legal frameworks concerning financial transactions but also emphasizes the repercussions of unethical conduct. In order to avert similar disputes, a robust framework for internal controls and compliance with corporate governance norms is essential. Companies should ensure proper documentation and transparency in their financial dealings, including formal agreements where necessary, to safeguard against potential mismanagement or allegations of oppression.

Legal Decision on Duress and Settlement in Family Company Dispute at NCLT, Ahmedabad - This ruling underscores the principle that once parties enter into a Settlement Agreement and derive benefits from it, it is both inequitable and unmeritorious for one party to seek to retract their commitments without substantive justification. Specifically, reliance on coercion claims without evidence does not hold weight under judicial scrutiny. Thus, parties involved in similar disputes should approach settlements with clear intent and understand the binding nature of their agreements to avoid potential legal pitfalls.

RIL and Facebook's Investment Discussions Lead to Insider Trading Violation by RIL - The decision of the Securities Appellate Tribunal reinforces the critical importance of compliance with insider trading regulations. Companies must ensure that they develop robust frameworks for identifying and executing their disclosure obligations related to UPSI. This case serves as a reminder that failure to act upon leaks of sensitive information can lead to significant financial ramifications, including penalties and reputational damage.

Legal Crux on Transfer of Winding Up Petitions from High Court to NCLT: Himachal Pradesh High Court Ruling - The Himachal Pradesh High Court decisively affirms the precept that corporate revival is preferable to liquidation and endorses the efficacy of the IBC’s structured process for rehabilitation. Courts are encouraged to facilitate the transfer of winding up petitions where appropriate and to prioritize attempts at reviving distressed companies. Stakeholders should proactively engage with the provisions laid out in the IBC to explore avenues for restoration rather than hastily resorting to liquidation under the Companies Act.

High Court of Allahabad Upholds YEA's Cancellation of Lease for Developer's Payment Defaults under U.P. Industrial Development Act - In light of the High Court’s decision, developers engaging with governmental bodies for land and project development must adhere closely to payment schedules and contractual obligations to avoid similar legal repercussions. Furthermore, entities like YEA should leverage their statutory powers judiciously to maintain compliance while ensuring proper communication and transparency with stakeholders in the development process.

Sections 241, 213, of the Companies Act, 2013 - Petitioner’s Claims of Oppression and Mismanagement Denied by NCLT Mumbai: Unauthorized Buy-Back Not Prejudicial to Members - Given the NCLT’s ruling, petitioners in cases of alleged corporate oppression must present concrete evidence linking their claims to specific misconduct that affects the company’s operations or shareholders collectively. The clear distinction between personal shareholder disputes and corporate governance practices is critical when framing legal arguments. This decision encourages careful attention to creating well-grounded grievances rather than relying on unsubstantiated allegations.

NCLAT Finds Procedural Misstep in Directing Director's Personal Appearance Amidst Company Existence Issues - In light of the NCLAT's judgment, it is crucial for adjudicating authorities to adhere to established procedural norms and prioritize evidentiary support through formal inquiries (e.g., RoC reports) before resorting to physical appearances or imposing costs upon parties. The clear implication is that future adjudications involving similar inquiries must be conducted with a caveat that emphasizes proper investigative procedures.

Legal Repercussions of Mismanagement and Oppression Affirmed by NCLT Mumbai: Allegations Found Lacking in Substance - The Tribunal ultimately concluded that the Petitioner failed to establish a credible case for oppression and mismanagement. Lack of clean hands, insufficient evidence, and a misrepresentation of agreements obstructed a favorable ruling for the Petitioner. Prospective petitioners must present substantial evidence and clarity in their assertions while considering the equitable jurisdiction and conduct criteria emphasized by the Tribunal.

Appellant's Late Claim Dismissed in IL&FS Insolvency Case, Citing Procedural Lapses - The Tribunal affirmed that the Appellant's failure to meet the prescribed timelines for claims registration constituted grounds for denying the belated claim. This decision underscores the importance of vigilance and adherence to procedural timelines in insolvency proceedings. The ruling distinctly illustrates that while the Appellant may have had valid claims, their inaction and lack of diligence in filing timely documentation cannot prejudice the timely claimants within the resolution process.

Sections 66, 8, 25 of the Companies Act, 2013 - Foreign Direct Investment Return Intricacies: NCLT Dismisses Petition for Share Capital Reduction - In light of the Tribunal's ruling, it becomes essential for not-for-profit companies receiving foreign contributions to remain vigilant about the proper utilization of such funds in alignment with their stated objectives. A proactive approach should involve ensuring compliance with FCRA and related stipulations before accepting or utilizing foreign investments. Organizations must maintain stringent records and governance practices to demonstrate adherence to legal obligations and avoid potential pitfalls in capital management.

Section 230 of the Companies Act, 2013 - National Company Law Appellate Tribunal Addresses Meeting Requirements for Scheme of Arrangement under Section 230 of Companies Act, 2013 - The decision by the National Company Law Appellate Tribunal reinforces the principle that the majority rule prevails in corporate governance actions, particularly in matters concerning arrangements under Section 230. Companies should ensure compliance with statutory provisions while recognizing the authority of majority shareholders in decision-making processes, thereby mitigating unnecessary legal disputes and facilitating smoother execution of corporate strategies.

NCLAT Denies Petition for Investigation into Company Affairs; Non-Membership a Key Barrier - In conclusion, this ruling from the NCLAT emphasizes that non-members cannot initiate investigative petitions under Section 213 of the Companies Act, 2013. Therefore, future complainants should ensure that they hold membership status to substantiate their claims effectively. Moreover, potential litigants must refrain from using petitions as leverage in concurrent disputes, as such actions may be construed as tactical rather than substantive.

Rejection of Injunction Suit Highlights Mismanagement and Lack of Legal Standing under Companies Act: Calcutta High Court Decision - In light of the decision, any further attempts by the plaintiff to seek redress must be underpinned by a clear legal right and a well-defined cause of action. It is essential for plaintiffs in similar situations to meticulously establish their legal standing and to understand the appropriate legal remedies for corporate governance disputes under the Companies Act, particularly Section 241. This determination leads to an actionable focus for parties involved in corporate disputes to seek remedies as per specific statutory provisions rather than pursuing redundant injunction suits.

Section 132, of the Companies Act, 2013 - Supreme Court Upholds NFRA's Minimal Penalty for Auditors Amidst Financial Irregularities - In light of the Supreme Court's ruling, it becomes imperative for auditors and accounting professionals to rigorously maintain compliance with auditing standards and safeguard ethical practices to protect themselves from punitive actions by regulatory bodies. It is essential to conduct thorough due diligence, especially in high-stakes corporate environments, and to retain professional integrity as a means of avoiding legal repercussions.

Court Upholds Rejection of Discharge in Company Property Case Amidst Contentions of Wrongful Retention - The decision to reject the discharge of the petitioner stands as legally sound and procedurally justified. The High Court’s refusal to intervene further emphasizes the necessity for a thorough investigation and presentation of evidence before any judicial conclusions can be drawn regarding the alleged wrongful retention of company property. Therefore, it necessitates that all parties engaged in similar disputes maintain a focus on the evidence and testimonies leading up to trials, thereby ensuring a robust legal approach to potential criminal liability.

High Court of Delhi Upholds Home-buyers' Rights in Greenopolis Project Dispute: Clear Distinction Between Proprietary Rights of 'O' and 'TCSPL' - The High Court's decision in this case serves as a significant precedent affirming the rights of home-buyers over completed projects notwithstanding the insolvency proceedings related to developmental entities like TCSPL. Developers are under clear obligations to deliver possession to eligible buyers upon the completion of construction, as long as they hold valid occupancy certificates. Home-buyers must proactively ensure that their transactions are executed with the correct entities to safeguard their interests in the face of potential insolvency disputes.

Supreme Court Upholds Principle of Finality in SEBI Disgorgement Orders - The Supreme Court's ruling decisively reinforces the tenets of finality and jurisdictional integrity in regulatory actions by SEBI. Stakeholders must recognize that once SEBI makes a final determination on a matter, particularly regarding penalties or disgorgement, it cannot unilaterally reopen that matter without a compelling justification. Consequently, firms should strategize their compliance and appeal mechanisms carefully to prevent the harsh consequences of regulatory overreach.

Delhi High Court Addresses Maintainability of Suit Under Companies Act - The Delhi High Court’s ruling underscores the imperative for plaintiffs alleging oppression or mismanagement to direct their grievances to the appropriate tribunal, i.e., NCLT, rather than attempting to utilize the Civil Court as a venue for dispute resolution in matters pertaining to company law. This decision emphasizes the necessity for assessees to meticulously assess jurisdictional issues before commencing litigation to avoid expenses and delays associated with inappropriate forums.

NCLAT Upholds Principles of Natural Justice: Rectification Orders Quashed Due to Lack of Audi Alteram Partem - The Tribunal's decision underscores the significance of upholding natural justice within legal proceedings, especially when rectifications involving the potential alteration of substantive rights are at play. Practitioners and companies must ensure that any applications for rectification strictly follow procedural rules and safeguard affected parties' rights to adequate notice and participation in proceedings. Going forward, legal representatives should closely examine order issuance processes to prevent similar transgressions and ensure compliance with natural justice principles.

Section 59 of the Companies Act, 2013 - Legal Crux in a Dispute Among Promoter-Directors: NCLT Orders Rectification of Share Register - The Tribunal’s decision underscores the necessity for proper corporate governance and adherence to procedural guidelines laid out in the Companies Act, 2013. It reinforces the importance of active participation and transparent dealings among promoter-directors. As such, a conclusion can be drawn that strict compliance with share transfer protocols and Board approval is crucial to uphold corporate integrity.

Time-barred Appeal Dismissed: NCLT Rules on Shareholding Dispute Over 100 Equity Shares - The NCLT ruled that the Appellant's appeal was time-barred, having been filed beyond the prescribed three-year limitation period under Article 137 of the Limitation Act, 1963. Stakeholders in corporate governance must be vigilant in their claims related to shareholding and act promptly to secure their interests.

Section 58 of the Companies Act, 2013 - NCLT Orders Restoration of Shareholders' Rights and Rectification of Register in Equity Dispute - In light of the NCLT's ruling, it is evident that companies must rigorously document all share transfers and comply with statutory directives regarding shareholder rights. The decision reinforces the necessity of transparent operations within corporate governance, ensuring that equity holders can effectively exercise their rights.

Section 241 of the Companies Act, 2013 - Legal Crux in Share Buy-Back Controversy of Company ‘M’ : Tribunal Finds No Oppression or Mismanagement - In conclusion, the Tribunal's decision reflects an adherence to procedural due diligence and a commitment to uphold corporate governance standards mandated by the Companies Act. The petitioner’s failure to act within the prescribed statutory limits and the absence of substantial evidence to support his claims resulted in the dismissal of the petition. Hence, it serves as a cautionary tale for shareholders about the necessity of prompt action and substantiation of claims when addressing issues of corporate governance.

Simplification of operational process and clarifying regarding the cash flow disclosure in Corporate Bond Database pursuant to review of Request for Quote (RFQ) Platform framework.

Review of provisions pertaining to Electronic Book Provider (EBP) platform to increase its efficacy and utility

Extension of timeline for implementation of provisions of SEBI circular dated December 17, 2024 on Measures to address regulatory arbitrage with respect to Offshore Derivative Instruments (ODIs) and FPIs with segregated portfolios vis-à-vis FPIs

Rating of Municipal Bonds on the Expected Loss (EL) based Rating Scale

Composition of the Internal Audit team for CRAs

Investor Charter for Registrars to an Issue and Share Transfer Agents (RTAs)

Extension of timeline for complying with the certification requirement for the key investment team of the Manager of AIF

Companies (Indian Accounting Standards) Amendment Rules, 2025

National Company Law Appellate Tribunal (Recruitment, Salary and other Terms and Conditions of Service of Officers and other Employees) Amendment Rules, 2025.

National Company Law Tribunal (Recruitment, Salary and other Terms and Conditions of Service of Officers and other Employees) Amendment Rules, 2025.

Competition Commission of India (Determination of Cost of Production) Regulations, 2025.

Review of - (a) disclosure of financial information in offer document / placement memorandum, and (b) continuous disclosures and compliances by Infrastructure Investment Trusts (InvITs)

Review of - (a) disclosure of financial information in offer document, and (b) continuous disclosures and compliances by Real Estate Investment Trusts (REITs)

Publishing Investor Charter for KYC (Know Your Client) Registration Agencies (KRAs) on their Websites

Securities and Exchange Board of India (Issue and Listing of Securitised Debt Instruments and Security Receipts) (Amendment) Regulations, 2025

Securities And Exchange Board Of India (Listing Obligations And Disclosure Requirements) (Second Amendment) Regulations, 2025.

Measure for Ease of Doing Business – Facilitation to SEBI registered Stock Brokers to undertake securities market related activities in Gujarat International Finance Tech-city – International Financial Services Centre (GIFT-IFSC) under a Separate Business Unit (SBU)

Securities Contracts (Regulation) (Stock Exchanges And Clearing Corporations) (Third Amendment) Regulations, 2025.

Securities and Exchange Board of India (Depositories and Participants) (Second Amendment) Regulations, 2025

Clarifications to Cybersecurity and Cyber Resilience Framework (CSCRF) for SEBI Regulated Entities (REs)

Extension of timeline for implementation of provisions of SEBI Circular dated December 10, 2024, on optional T+0 settlement cycle for Qualified Stock Brokers (QSBs)

Clarificatory and Procedural changes to aid and strengthen ESG Rating Providers (ERPs)

Securities and Exchange Board of India (Infrastructure Investment Trusts) (Second Amendment) Regulations, 2025

Timelines for collection of Margins other than Upfront Margins – Alignment to settlement cycle

Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2025

Securities and Exchange Board of India (Credit Rating Agencies) (Second Amendment) Regulations, 2025

Change in cut-off timings to determine applicable NAV with respect to repurchase/ redemption of units in overnight schemes of Mutual Funds

Trading Window closure period under Clause 4 of Schedule B read with Regulation 9 of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (“PIT Regulations”) – Extension of automated implementation of trading window closure to Immediate Relatives of Designated Persons, on account of declaration of financial results.

Specialized Investment Funds ('SIF') - Application and Investment Strategy Information Document (ISID) formats

Clarification on Regulatory framework for Specialized Investment Funds (‘SIF’)

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