Tag Archives: India

ILN Today Post

International Food Law and Policy – India Along with Other Jurisdictions

We are happy to announce that the textbook “International Food Law and Policy” published by Springer, with the India chapter lead authored by Ms. Dimpy Mohanty, Partner, LexCounsel, is now available in print version. It is also available as an e-book.

The book covers major aspects of food regulation, law, policy, food safety and environmental sustainability in a global context. 

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NCLAT: ADJUDICATING AUTHORITY CANNOT REJECT APPLICATIONS COMPLETE UNDER SECTION 10 OF THE INSOLVENCY CODE BY CORPORATE DEBTORS ELIGIBLE UNDER SECTION 11 OF THE CODE

Judgment: M/s. Unigreen Global Private Limited (“Unigreen”) v. Punjab National Bank (“PNB”) and others followed in Leo Duct Engineers & Consultants Limited v. Canara Bank and Another.

Forum: National Company Law Appellate Tribunal (“NCLAT”).

Judgments delivered on: December 1, 2017 and December 13, 2017 respectively.

Act/Law: The Insolvency and Bankruptcy Code, 2016 (“Code”).

Ratio: If complete information is provided by an applicant (corporate debtor) as required under Section 10 and Form 6 of the Code and if the applicant is otherwise not ineligible under Section 11 of the Code, the Adjudicating Authority (“NCLT”) is bound to admit the application and cannot reject the application on any other ground.

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Specific performance of an agreement to sell of an immovable property

The law with respect to specific performance of a contract is well established in India. The grant of relief of specific performance is a discretionary and equitable relief. The courts are therefore not bound to always grant the relief of specific performance merely because it is lawful to do so, but are required to apply their discretion in a sound and reasonable manner to meet the ends of justice.

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Insolvency Code – Resolution of NPAs Vis-À-Vis Defaulting Promoters

Massive expansion and investments, primarily funded through bank loans (despite a weak promoters’ equity base), has given rise to companies which have overleveraged their balance sheets. Coupled with the economic slow-down, industry conditions and global financial crisis in the past, this led to these companies becoming financially stressed. While, certain companies were able to sustain themselves through swapping loans, many have already reached a point where they have financially broken down. Bhushan Steel, Lanco, Essar Steel, Kingfisher, Monnet Ispat and Alok Industries, are just a few reported examples of such broken down stories.

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Compensation Agreements with Employees of Subsidiaries of Listed Indian Entities Within the Ambit of SEBI Listing Regulations

Earlier this year, the Securities and Exchange Board of India (“SEBI”) amended the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), to structure the unregulated compensation and profit sharing arrangements/agreements between shareholders/third parties with the employees, including the key managerial personnel, directors and promoters of listed investee companies (“Regulation 26(6)”). These arrangements were widely used by private equity investors to not only incentivize the promoters/key employees/directors but to accelerate the growth of the company and its consequent valuation to benefit the investors and other shareholders at large. But, from SEBI’s view point, these arrangements were a breeding ground for corporate governance issues and unfair trade practices. We have in our earlier article1, discussed the implications of the above SEBI amendment. While the Listing Regulations were amended to incorporate Regulation 26(6) vide its notification dated January 4, 2017, certain ambiguities related to interpretation of the Regulation 26(6) persist.

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Security interests over moveable assets

Security interests over movable property can be created by way of mortgage, pledge, hypothecation, lien and charge.However, mortgage is usually a method of creating security interest over immovable properties, and its only in certain specified cases that it is coupled with a mortgage on moveable properties thereon. This article provides a brief introduction to some of the more commonly used security interests for moveable properties (being pledge, hypothecation, lien and charge). 

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ICCA recognizes Ms. Seema Jhingan as one of India’s Trusted Corporate Lawyers in its publication – ‘The Vanguards’

We are pleased to announce that Ms. Seema Jhingan, has been recognized as one of India’s Trusted Corporate Lawyers of 2017 by the Indian Corporate Counsel Association (ICCA) in its publication – ‘The Vanguards’ (as attached together with her published profile), with forwards from the Department of Legal Affairs, Ministry of Law and Justice and the Department of Commerce, Ministry of Commerce and Industry.

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Significance of territorial exclusivity rights of franchisees

India has increasingly attracted global brands to establish their franchise arrangements in the country to benefit from the ever-expanding Indian market. Indian enterprises have also adopted franchise business models to expand in to the vast Indian territories. Typically, under a franchise model the franchisees benefit from the established business systems of the franchisors under a licensing arrangement with the right to use the trade mark and brand of the franchisors, and open franchise outlets for distribution of the products/services of the franchisor, in consideration of payment of franchise fees and/or royalties to the franchisor.

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Changing landscape of the Indian Foreign Direct Investment Policy

The foreign direct investment (“FDI”) policy of India has in the recent past witnessed a series of reforms introduced by the Government with the aim of increasing FDI inflows into India inter alia by liberalizing FDI in various sectors and streamlining the approvals processes. According to the Ministry of Commerce and Industry, FDI inflows hit an all-time high of USD 60.1 billion in 2016-17 as compared to FDI inflows of USD 55.6 billion for the year ending March 2016, (as against record high of USD 139 billion FDI inflows in China in 2016).

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The Insolvency and Bankruptcy Code ’16

The Insolvency and Bankruptcy Code, 2016 is a comprehensive piece of legislation that touches all insolvency and bankruptcy issues of companies, limited liability partnerships (LLPs), limited liability entities, individual and partnership firms.

The Insolvency and Bankruptcy Code, 2016 (the Code) applies to both domestic and foreign creditors in dealing with issues related to cross- border transactions of companies incorporated under the Companies Act, 2013. Enactment of the Code is an attempt to match the international corporate standards followed across the globe.

 

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