Sagus Speaks - June 2025 | Part 1

REGULATORY AND POLICY UPDATES

DERC issued DERC (Supply Code and Performance Standards) (Seventh Amendment) Regulations, 2025

The Delhi Electricity Regulatory Commission ("DERC") through notification dated 02.06.2025 issued the DERC (Supply Code and Performance Standards) (Seventh Amendment) Regulations, 2025 ("Amendment Regulations")¹ , amending the DERC (Supply Code and Performance Standards) Regulations, 2017 ("Principal Regulations").

The Amendment Regulations issued amendments in Regulation 24(4) of the Principal Regulations which provides for conditions in which shifting of electric line or plant can be allowed.

A proviso has been added after Regulation 24(4) (iv) wherein the conditions applicable in case of shifting of HT/LT lines, electrification of bus depots, and other similar infrastructurerelated works undertaken by the distribution licensees on behalf of Departments of the Government of NCT of Delhi ("GNCTD") have been provided which are as follows:

1. The execution of works has been divided into broad milestone(s) categories based on design and procurement, execution and installation and testing, commissioning and handing over.
2. The distribution licensee is required to prepare the scheme for works based on cost data book of DERC as on the date of the preparation of scheme.
3. Payment for each stage shall be governed by Rule 172(1) of the General Financial Rules, 2017.
4. Distribution licensees shall not be required to submit a bank guarantee against advance payments and instead shall submit an undertaking that in the event of noncompletion of works, the advance amount as recoverable shall be adjusted in the Annual Revenue Requirement ("ARR") of Delhi Transco Ltd., which will remit the said amount to the concerned department of GNCTD.
5. In case of delay in payment beyond 45 days of submission of final invoice and other documents, interest on the said amount plus 350 basis points, shall be recoverable by the distribution licensee from the concerned department of GNCTD.
6. The cost of such works shall not be passed on to consumers and therefore, shall not be included in the ARR of the distribution licensees.

SEBI introduces new provisions for margin obligations to be given by way of pledge/ re-pledge in the depository system

The Securities and Exchange Board of India ("SEBI") through Circular No. SEBI/HO/MIRSD/MIRSDPoD/P/CIR/2025/82 dated 03.06.2025 ("Margin Circular")² , has introduced new provisions for margin obligations to be given by way of pledge/re-pledge in the depository system. This Margin Circular is issued in exercise of powers conferred under Section 11(1) of the SEBI Act, 1992 ("SEBI Act"), read with Regulation 30 of SEBI (Stock-Brokers) Regulations, 1992 and amends the existing SEBI circular on margin obligations dated 25.02.2020 and Master Circular for Stock-Brokers dated 09.08.2024.

The Margin Circular mandates automated margin pledge and securities invocation processes in the depository system. The key changes include a single-instruction feature for releasing pledged securities when clients sell them and an automated system for invoking margin-pledged securities. Depositories will block invoked securities in the client's demat account with payment verification for prompt settlement, providing invocation and redemption for mutual fund units not traded on exchanges. If a client's trading account is frozen, trading members must sell invoked securities under their own codes and complete payment on the same day.

The provisions of the Margin Circular shall come into force with effect from 05.09.2025, with depositories required to specify detailed operating guidelines by 01.07.2025.

SEBI extends relaxation from hard copy requirements for non-convertible securities

SEBI through Circular No. SEBI/HO/DDHS/DDHS-PoD1/P/CIR/2025/83 dated 05.06.2025 ("LODR Circular")³ , has provided limited relaxation from compliance with certain provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI LODR"). This LODR Circular is issued in exercise of the powers conferred under Section 11(1) of the SEBI Act read with Regulation 101 of the SEBI LODR and follows the earlier relaxations provided by Ministry of Corporate Affairs ("MCA").

The Circular extends relaxation from Regulation 58(1)(b) of SEBI LODR requirements for entities with listed nonconvertible securities, regarding sending hard copies of financial statements to security holders without registered email addresses, exempting them from penal action for noncompliance during the period of 01.10.2024 to 05.06.2025. Furthermore, the Circular gives similar relaxation from 06.06.2025 to 30.09.2025, provided the advertisements under Regulation 52(8) of SEBI LODR disclose web-links to the required statements for security holder access.

SEBI introduces framework for ESG Debt Securities

SEBI through Circular No. SEBI/HO/DDHS/DDHS-POD1/P/CIR/2025/84 dated 05.06.2025 ("ESG Circular")⁴ , has introduced a framework for environment, social and governance debt securities (other than green debt securities) ("ESG Debt Securities"). This ESG Circular is issued in exercise of the powers conferred under Section 11(1) of the SEBI Act read with Regulation 55(1) of the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 and follows SEBI Board approval from 30.09.2024.

The ESG Circular introduces frameworks for ESG Debt Securities for financing and refinancing social project, such as social bonds for targeting social projects like affordable infrastructure, healthcare, education, employment generation, sustainability bonds for combining green and social projects, and sustainability-linked bonds with financial terms linked to pre-defined sustainability performance targets measured through key performance indicators. All ESG Debt Securities are to align with recognized international standards like ICMA Principles, Climate Bonds Standard, ASEAN Standards, or EU Standards as specified under the ESG Circular.

The key requirements include mandatory appointment of independent third-party reviewers/certifiers for verification and certification, comprehensive disclosure obligations in offer documents and annual reports including fund utilization tracking and impact reporting, and strict anti-purposewashing measures requiring continuous monitoring and potential early redemption if funds are misused. Issuers must maintain decision-making processes for project eligibility, provide detailed impact assessments with quantitative performance measures where feasible, and SME exchange entities must comply with bi-annual disclosure requirements. The detailed initial and continuing disclosure requirements for issue and listing of ESG Debt Securities are set out as Annexure A of the ESG Circular.

The ESG Circular came into force for issuance of ESG Debt Securities from 05.06.2025.

SEBI mandates verified '@valid' UPI handles for collection of funds from investors by intermediaries

SEBI by way of Circular No. SEBI/HO/DEPA-II/DEPAII_SRG/P/CIR/2025/86 dated 11.06.2025 ("UPI Circular")⁵ , has introduced the adoption of standardised, validated and exclusive Unified Payment Interface ("UPI") IDs for payment collection by SEBI registered intermediaries from investors. This UPI Circular is issued in exercise of the powers conferred under Section 11(1) of the SEBI Act, to protect the interests of investors in securities and to promote the development of, and to regulate, the securities market.

SEBI has mandated the implementation of a structured UPI address mechanism for SEBI registered intermediaries to collect funds from their investors, with the standardised, validated, and exclusive UPI IDs becoming available to investors from 01.10.2025. The new UPI address will comprise a username (alphanumeric ID selected by intermediaries followed by mandatory abbreviations like '.brk' for brokers, '.mf' for mutual funds) and a handle using the unique identifier '@valid' combined with self-certified syndicate bank names (e.g., abc.brk@validhdfc). The mechanism provides investors with the option to transfer funds directly to validated bank accounts with transaction limits of up to INR 5 lakh per day for capital market transactions through UPI, with payments displaying a "thumbs-up inside a green triangle" icon for verification. SEBI is developing a "SEBI Check" functionality to allow investors to verify the authenticity of UPI IDs by scanning QR codes or entering UPI IDs manually.

GOVERNMENT NOTIFICATIONS

MCA notifies revised Forms MGT-7, MGT-7A and MGT-15

The MCA by way of notification No. G.S.R.358(E) dated 30.05.2025⁶ , has notified the Companies (Management and Administration) Amendment Rules, 2025, introducing revised Forms MGT-7, MGT-7A, and MGT-15. This notification is issued in exercise of the powers conferred under Section 469 of the Companies Act, 2013 ("Companies Act") and will come into effect from 14.07.2025.

The key revisions include enhanced disclosure requirements in Form MGT-7 with mandatory summary of indebtedness for debentures and category-wise shareholder breakup. Form MGT-7A now requires photograph of registered office showing external building and company name prominently visible, and Form MGT-15 mandates clear indication of financial year to which the AGM pertains for improved traceability and record accuracy in regulatory filings.

MCA notifies revised forms CRA-2 and CRA-4

MCA through notification No. G.S.R.361(E) dated 30.05.2025⁷ , has notified the Companies (Cost Records and Audit) Amendment Rules, 2025, introducing revised Forms CRA-2 and CRA-4. This notification is issued in exercise of the powers conferred under sub-sections (1) and (2) of section 469 and section 148 of the Companies Act and will come into effect from 14.07.2025.

The key revisions include specification of nature of appointment (fresh/re-appointment) and confirmation of auditor's consent declaration in Form CRA-2 and disclosure of lead auditor status and AGM extension reporting details including Service Request Number (SRN) of Form GNL-1 and revised AGM date for companies availing AGM extensions in Form CRA-4.

MCA notifies revised Form GNL-1

MCA by way of notification No. G.S.R.360(E) dated 30.05.2025⁸ , has notified the Companies (Registration Offices and Fees) Amendment Rules, 2025, introducing the revised Form GNL-1. This notification is issued in exercise of the powers conferred under Sections 396, 398, 399, 403 and 404 read with Section 469 of the Companies Act and will come into effect from 14.07.2025.

The key revisions include detailed disclosures mandated based on application objectives such as compounding offences, AGM extensions, and merger approvals, with specific requirements for type of default, parties involved, duration of default, and corrective actions taken. The revised form also requires mandatory certification by practicing professionals (CA, CS, or Cost Accountant) to verify accuracy of submissions based on company records and compliance with Companies Act provisions.

CPCB issued draft Guidelines for Storage and Handling of Waste Solar Photo-Voltaic Modules

The Central Pollution Control Board ("CPCB") through its notice dated 04.06.2025 issued draft guidelines for storage and handling of waste Solar Photo-voltaic ("SPV") modules, panels, or cells ("Draft Guidelines on Disposal of Waste Modules")⁹ to provide technical guidance for the environmentally sound transportation, handling, and storage of solar waste and related components, inviting comments by 25.06.2025.

The salient features of the Draft Guidelines on Disposal of Waste Modules are as follows:

1. Draft Guidelines on Disposal of Waste Modules are applicable on producers, manufacturers and recyclers of SPV panels or modules or cells.
2. The collection and transportation of solar waste shall be in the following manner:

a. Solar waste must not be disposed of in open areas or sold to unauthorized entities.

b. Producers and manufacturers should establish collection mechanisms, including take-back systems, and publicize these systems with details of collection points and authorized recycling facilities.

c. Transportation should be in covered trucks, preferably authorized for transporting hazardous wastes, following the provisions under the Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016 for final disposal.

iii. The storage and handling shall be done inter-alia in the following manner:

a. Storage should prevent breakage and ensure worker safety.

b. Storage practices should maintain the potential for re-use after refurbishing or recycling/recovery without harming health or the environment.

c. Floors should be non-leachable and impervious to prevent groundwater and soil contamination.

d. Panels should be stacked in no more than 20 layers or to a maximum height of 2 meters.

e. The storage area should have fire protection systems, emergency exits, and an emergency response plan.

f. Storage racks or containers should be clearly labelled.

MoP issued amendment to Standard Bidding Documents for procurement of ISTS through TBCB process

Ministry of Power ("MoP") by its notification dated 05.06.2025, has issued amendments to the Standard Bidding Documents("SBD"), for procurement of ISTS through Tariff Based Competitive Bidding ("TBCB") process ("SBD Amendments")¹⁰.

The key amendments are as follows:

1. Introduction of Insurance Surety Bonds and Payment on Order Instruments: In addition to the existing bank guarantee mechanism, bidders may now submit either an Insurance Surety Bond or a Payment on Order Instrument ("POI") as acceptable forms of bid bonds under standard Request for Proposal ("RfP") and Contract Performance Guarantee ("CPG") under standard TSA.
2. Restricted issuers of POI: Only three specified NonBanking Financial Institutions under MoP / Ministry of New and Renewable Energy ("MNRE") IREDA, PFC, and REC are permitted to issue POIs. Letters of undertaking or similar instruments from any other entities will not be accepted.

Formats for submission of Insurance Surety Bond and POI for bid bonds under standard RfP and CPG have been provided with the SBD Amendment.

CCPA issues advisory on Dark Patterns for E-Commerce Platforms

The Central Consumer Protection Authority ("CCPA") has issued an advisory bearing no. CCPA-1/1/2023-CCPA dated 05.06.2025 regarding self-audits by e-commerce platforms to detect Dark Patterns ("Advisory")¹¹. The Advisory aims to foster a fair, ethical, and consumer-centric digital ecosystem. The Guidelines for Prevention and Regulation of Dark Patterns, 2023 ("Guidelines for Prevention and Regulation of Dark Patterns") categorise and encompass 13 types of Dark Patterns. The CCPA has already noted instances of Dark Patterns despite the Guidelines for Prevention and Regulation of Dark Patterns and has issued notices in certain cases.

The key directives issued under the Advisory:

1. Mandatory Self-Audit: All e-commerce platforms are advised to take necessary steps to ensure their platforms are free from deceptive and unfair trade practices that constitute Dark Patterns. They are advised to conduct self-audits to identify Dark Patterns within three months from the issue date of this Advisory.
2. Self-declaration: Upon completion of the self-audit, platforms are encouraged to submit a self-declaration confirming that their platform does not indulge in any Dark Patterns. This self-declaration is aimed at promoting accountability and reinforcing consumer trust in online marketplaces.

All e-commerce platforms are therefore, advised to refrain from deploying deceptive design interfaces that mislead consumers or manipulate their decision-making.

MCA notifies revised form AOC-4

MCA through notification No. G.S.R. 371(E) dated 06.06.2025 ("AOC-4 Notification")¹², has introduced amendments to the Companies (Filing of Documents and Forms in Extensible Business Reporting Language) Rules, 2015. This AOC-4 Notification is issued in exercise of the powers conferred under Section 469 read with Section 398 of the Companies Act and will come into force with effect from 14.07.2025.

MCA has introduced a new mandatory requirement for companies filing financial statements in XBRL format to additionally attach copies of their duly authenticated financial statements, while also updating the entire AOC-4 XBRL form structure with increased disclosure requirements including detailed sections for AGM details, financial specifics, secretarial audit compliance, SBN (Specified Bank Notes) reporting, CSR obligations, and certification requirements by 'practicing professionals'.

MoP issued conditions for waiver of ISTS charges for Hydro PSP and BESS Projects

MoP in furtherance to its earlier orders, has issued conditions for waiver of Inter-State Transmission Charges ("ISTS") on for Hydro Pumped Storage Projects ("Hydro PSP") and Battery ESS ("BESS") Projects through its order dated 10.06.2025 ("Amendment Order")¹³.

The conditions prescribed for waiver of ISTS charges for Hydro PSP and BESS Projects are as follows:

1. 100% ISTS charges waiver is applicable for Hydro PSP projects for which the construction work is awarded on or before 30.06.2028.
2. 100% ISTS charges waiver is applicable for co-located BESS projects commissioned on or before 30.06.2028, provided that the power from these BESS projects is consumed outside the State where the project is commissioned. A BESS project is considered as colocated if it is connected to the same ISTS sub-station as the RE project.
3. Hydro-PSP, for which construction work is awarded after 30.06.2028 and BESS projects commissioned after 30.06.2028 will not be eligible for the ISTS charges waiver.
4. For BESS projects that are not co-located, the ISTS charges waiver will be governed by existing orders and regulations issued by the MoP and Central Electricity Regulatory Commission Regulations. For BESS projects that are not co-located, the ISTS charges waiver will be governed by existing orders and regulations issued by the MoP and Central Electricity Regulatory Commission Regulations.

The Department of Economic Affairs, Ministry of Finance has released Foreign Exchange Management (Non-Debt Instruments) (Amendment) Rules, 2025

The Department of Economic Affairs, Ministry of Finance through notification dated 11.06.2025 issued the Foreign Exchange Management (Non-debt Instruments) (Amendment) Rules, 2025 ("Amendment Rules")¹⁴ to amend Rule 7 which deals with acquisition of equity instruments (other than share warrants) through rights issue or bonus issue to persons resident outside India under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 ("Principal Regulations").

The Amendment Rules have added a new sub-rule 7(2) to the Principal Regulations that enable the Indian companies engaged in sectors or activities prohibited for foreign direct investments to issue bonus shares to their pre-existing shareholders who are persons resident outside India, subject to the condition that the shareholding pattern of such shareholders does not change pursuant to the issuance of the bonus shares.

Further, any bonus shares issued to such shareholders prior to the commencement of the new sub-rule 7(2) of the Amendment Rules shall be deemed to have been issued in accordance with the provisions of the Principal Regulations or the Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India) Regulations, 2000 or the Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India) Regulations, 2017, as may be applicable.

MoP issued Draft Electricity (Amendment) Rules, 2025

MoP on 11.06.2025 has issued Draft Electricity (Amendment) Rules, 2025 ("Draft Amendment Rules")¹⁵, with proposed amendments to Rule 18 of the Electricity Rules, 2005 ("Principal Rules"). MoP has invited stakeholder comments on the Draft Amendment Rules which are to be submitted on or before 10.07.2025. Rule 18 was introduced in the Principal Rules through the Electricity (Amendment) Rules, 2022.

The key amendments proposed under the Draft Amendment Rules are as follows:

1. Rule 18(2) has been amended and now provides that the Energy Storage System ("ESS") shall be utilised either as an independent ESS or as part of generation, transmission, or distribution.
2. Rule 18(4)(a) has been substituted and provides that the ESS can be developed, owned, leased, or operated by a generating company, a transmission licensee, a distribution licensee, a consumer, a system operator, or an independent energy storage service provider.
3. Rule 18(4)(b) states that the legal status of ESS shall be same as that of the owner subject to conditions as mentioned in the proviso.
4. Rule 18(5) has been substituted and provides that the developer or owner of the ESS shall have the option to sell, lease, or rent out the storage space, either in whole or in part to any consumer or utility engaged in generation, transmission, or distribution, or to a Load Despatch Centre.

JUDICIAL PRONOUNCEMENTS

Supreme Court held flat developers are not liable for paying interest on the personal loans taken to finance their homes

The Supreme Court through its judgement dated 04.06.2025 in the matter of Greater Mohali Area Development Authority Through Its Estate Officer (H) v. Anupam Garg¹⁶ held that developers are not liable for paying interest on the personal loans taken by buyers to finance their homes.

The Supreme Court observed that compensation under the Consumer Protection Act, 2019 cannot be awarded arbitrarily and should be based on legal principles and the

extent of the developer's liability. It further observed that taking loans for the purposes of securing the required finances is not a consideration that the developer of a project is required to keep in mind, and the only relationship between the developer and the buyer is that of a consumer and service provider, respectively.

Supreme Court held that the right to carry on business under Article 19(1)(g) also includes the right to shut down business

The Supreme Court through its judgment dated 04.06.2025 in Harinagar Sugar Mills Ltd. (Biscuit Division) & Anr. v. State of Maharashtra & Ors¹⁷ held that the right to carry on any occupation, trade or business under Article 19(1)(g) of the Constitution of India, 1950 ("Constitution") also includes the right to voluntarily shut down such business, subject to reasonable restrictions.

The Supreme Court held that when a person chooses to shut down a business and the State fails to act with reasonable expediency, then the business owner cannot be burdened with continuing operations indefinitely. It was observed that Article 19(1)(g) of the Constitution includes the right to close a business, subject to reasonable restrictions.

NCLAT held that a subsequent application under Section 95 of IBC is barred if proceedings against the same personal guarantor are already pending

The National Company Law Appellate Tribunal ("NCLAT"), Chennai, through its judgment dated 04.06.2025 in Indian Bank v. K.R. Tirumuruhan¹⁸ held that a subsequent application under Section 95 of the Insolvency and Bankruptcy Code, 2016 ("Code") is barred under Section 96 of the Code if the proceedings against the same personal guarantor have already been initiated by another financial creditor.

The appeal arose out of an order passed by the National Company Law Tribunal ("NCLT"), Chennai, wherein the NCLT dismissed the application under Section 95 of the Code filed against the personal guarantor as infructuous.

NCLAT dismissed the appeal and observed that the appropriate course to adopt would be to expedite the existing proceedings instead of initiating parallel proceedings.19

Footnotes

1. DERC (Supply Code and Performance Standards) (Seventh Amendment) Regulations, 2025.

2. Circular on new provisions for margin obligations to be given by way of pledge/ re-pledge in the depository system.

3. Circular on SEBI's relaxation from hard copy requirements for non-convertible securities

4. Circular on SEBI's introduction to framework for ESG Debt Securities.

5. Circular on adoption of standardised, validated and exclusive UPI IDs for payment collection by SEBI registered intermediaries.

6. MCA's Notification on revised Forms MGT-7, MGT-7A and MGT-15.

7. MCA's Notification on revised Forms CRA-2 and CRA-4.

8. MCA's Notification on revised Form GNL-1.

9. CPCB Draft Guidelines on Disposal of Waste Modules.

10. MoP's amendment to the standard bidding documents for procurement of ISTS through TBCB process

11. CCPA Advisory on Dark Pattern for E-Commerce Platforms.

12. MCA's notification for revised form AOC-4.

13. Amendment Order on waiver of ISTS charge for Energy Storage Systems.

14. Foreign Exchange Management (Non-debt Instruments) Amendment Rules, 2025.

15. Draft Electricity (Amendment) Rules, 2025.

16. SLP(C) Nos. 27847 – 27848 of 2019

17. SLP(C) No. 4645/2023

18. Company Appeal (AT) (CH) (Ins) No. 150/2025

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