22 September 2020

Corporate Amicus: June 2020


IBC (Amendment) Ordinance, 2020 – A game changer?
By Dinesh Babu Eedi and Manasa Tantravahi

The first article in this issue of Corporate Amicus covers Insolvency and Bankruptcy Code (Amendment) Ordinance, 2020 which has been recently promulgated in order to prevent corporates from being forced into insolvency/liquidation, due to unprecedented situations arising out of COVID-19 pandemic. Highlighting various amendments made by the Ordinance, the article discusses elaborately various challenges under the Ordinance. Authors discuss at length issues like perpetual applicability of Section 10A, absence of discussion about personal guarantors, and suspension of even voluntary insolvency, etc. According to the authors, the suspension of the provisions of IBC may guide creditors to rely on enactments like SARFAESI Act/RDDBFI Act, thereby, retracting the reasons for the IB Code...

Lapsing of land acquisition proceedings – Supreme Court Larger Bench answers reference
By Aditya Thyagarajan

The second article in this issue of the newsletter discusses the recent Supreme Court Larger Bench decision in the case of Indore Development Authority and Ors. v. Manoharlal and Ors. in respect of interpretation of Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 regarding lapse of proceedings under the Land Acquisition Act, 1894. The 5-Judge Bench has concluded that the Government’s obligation to pay compensation was complete when it tendered or offered the compensation to the landowners and that the Government was not obligated to deposit the compensation in Court on the landowner’s refusal to accept the same. The Court was also of the view that non-deposit of compensation in Court did not result in a lapse of the acquisition proceedings. According to the author, though the judgment has put some crucial interpretational issues to rest, it might be seen as an escape route for the Government...

Notifications and Circulars

  • Import payment – Extension of time limits for settlement
  • Resolution timelines under Prudential Framework on Resolution of Stressed Assets revised
  • Companies (Share Capital and Debentures) Amendment Rules, 2014 amended
  • Further Public Offer – Relaxations from certain provisions of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018
  • Margin obligations to be given by way of Pledge/ Re-pledge in Depository System - Extension of Timeline
  • SEBI framework for regulatory sandbox to regulated entities
  • Extension of timeline for compliance with various payment system requirements

Ratio decidendi

  • Arbitration Agreement has effect irrespective of invocation of proceedings under Section 18 of Micro and Small and Medium Enterprises Development Act, 2006 – Bombay High Court
  • Interest rates higher than the prevailing banking interest rates awarded by an Arbitral Tribunal is perverse – Delhi High Court

News Nuggets

  • Suspension of rent due to lockdown – Delhi High Court clarifies on force majeure and TPA
  • Every breach cannot be justified merely on invocation of COVID-19 as a force majeure condition
  • Relaxation for employers in relation to mandatory requirement of Aarogya Setu App.
  • Contribution to PM CARES Fund eligible as CSR activity
  • Rights issue opening up to 31-07-2020 – Non-dispatch of notice by specified means under Section 62(2) of Companies Act, 2013 condonable
  • Tests to determine whether an instrument can be considered as a release/relinquishment deed
  • Further extension of payment of EMIs moratorium
  • Arbitration - Section 19 of Micro, Small and Medium Enterprises Development Act, 2006 not applicable to an award by arbitrator appointed otherwise than in accordance with Section 18
  • Retirement of one partner amounts to dissolution of partnership firm consisting of only two partners
  • Relationship between clients and foreign law firms is “commercial” for Sections 44 and 45 of Arbitration and Conciliation Act, 1996
  • Electricity dues when can be recovered from the auction-purchaser of unit
  • Insolvency – Workers gratuity not payable if same not part of liquidation estate

June, 2020/Issue-105 June, 2020/Issue-105

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