July 5, 2017
The legal status of virtual currencies (“VCs”) such as Bitcoins continues to be debated as it remains unrecognized in India.
The Reserve Bank of India (“RBI”) in the past had issued several advisories clarifying that creation, trading or usage of VCs, as a medium for payment are not authorized by any central bank or monetary authority in India and entails various risks, but RBI stopped short of declaring VCs as illegal. However, pursuant to issuance of these advisories, the Enforcement Directorate did reportedly conduct raids against operators of trading platforms of VCs in India, creating an atmosphere of regulatory uncertainty for the VC industry. In absence of any clear direction or regulation by the Government, the matter of VCs seems to have remained in an uncertain limbo riddled with regulatory pitfalls.
June 23, 2017
The issue concerning conflicting interpretations of the phrase “existence of a dispute” under the Insolvency & Bankruptcy Code, 2016 (“Code”) by the Delhi and Mumbai benches of the National Company Law Tribunal (“Tribunal”) (see One Coat Plaster vs. Ambience Pvt. Ltd., Annapurna Infrastructure Pvt. Ltd. & Ors. vs. Soril Infra Resources Ltd. and Essar Projects India Ltd. vs. MCL Global Steel Pvt. Ltd.), seems to have been put to rest by the National Company Law Appellate Tribunal (“Appellate Tribunal”) for the time being.
June 12, 2017
The law with respect to lifting of the corporate veil is well established in India. The courts have time and again held that corporate veil can be pierced only in rare cases where the court concludes that the conduct of the shareholder is abusive and the corporate facade is used for an improper purpose, for perpetuating a fraud, or for circumventing a statute. At the same time, the courts have also taken a view that corporate veil cannot be lifted by an arbitrator in an arbitration proceeding. While discussing the law on the subject in detail, the Delhi High Court (“DHC”) has recently in a judgment passed in the matter of Sudhir Gopi vs. Indira Gandhi National Open University and Another reinforced the said legal position.
May 30, 2017
India has, in accordance with the Agreement on Technical Barriers to Trade, through the Ministry of New and Renewable Energy (“MNRE”) notified the World Trade Organization’s (“WTO”) Committee on Technical Barriers to Trade, for circulation of a draft quality control order (G/TBT/N/IND/59) on solar photovoltaic systems, devices and components amongst other member countries and interested international standardizing and conformity assessment bodies to elicit their comments.
May 23, 2017
As much as Chief Executive Officers (“CEOs”), Chief Financial Officers (“CFOs”) have been involved in corporate scandals reported around the world. There have been instances of connivance between CEOs and CFOs in fraudulent irregularities. Corporate scandals often involve material accounting manipulations, or what is commonly referred to as “cooking the books” which cannot otherwise be accomplished without the tacit nod of the CFO.
May 19, 2017
The recent overhauling of the H1B visa policy under the Trump Administration, has led to rising concerns and uncertainties on issuance of visas in the Indian IT industry.
For instance, the revised H1B visa guidelines prescribe for certain eligibility criteria like minimum educational qualifications, requirement of establishing that a particular position is a specialty occupation etc. The US Citizenship and Immigration Services had also recently clarified that an entry level computer programmer position would not generally qualify as a position in a “specialty occupation”. A position of “specialty occupation” requires higher education and would typically include scientist, engineers, skilled computer programmers, etc. The impact of these guidelines are, therefore, likely to be felt by entry-level IT recruits the hardest, many of whom travel to and are regularly outsourced to the US, for projects of US companies.
April 26, 2017
1.1. Multi-level marketing (“MLM”) or direct selling models, where goods are marketed/sold directly to the end user (and not through a fixed retail location), by a network of distributors at different levels of distribution is a well-established business model used by various companies.
1.2. However, there have also been various instances, of ‘ponzi’ or ‘pyramid schemes’, operating under the guise of MLM models, where income is generated through enrolment of more and more members, rather than sale of any tangible product, and which lure in the unsuspecting public through claims of quick and easy money. These schemes are regarded as a ‘Money Circulation Scheme’ and prohibited under the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 (“Money Circulation Act”).
April 10, 2017
With India presently having a wind power installed capacity of around 32GW, the Ministry of New and Renewable Energy (“MNRE”) has invited comments on the draft guidelines for procurement of wind power through bidding. The draft guidelines have been formulated to promote competition and transparency through the process of bidding as required in terms of section 63 of the Electricity Act, 2003. The draft guidelines identifies the participants in the bidding process and outlines the pre-bid and post-bid activities and documentation to be fulfilled while undertaking the bidding process. A copy of the draft guidelines can be found here. Comments are requested by April 21, 2017.