Rapid MetroRail Gurgaon Limited vs. Haryana Mass Rapid Transport Corporation1
The Supreme Court observed that under usual circumstances a High Court in its jurisdiction under Article 226 has to decline to entertain a dispute which is arbitrable, unless there is a fundamental issue of public interest.
The Court observed that "as a measure of abundant caution, we clarify that ordinarily the High Court in its jurisdiction under Article 226 would decline to entertain a dispute which is arbitrable. Moreover, remedies are available under the Arbitration and Conciliation Act, 1996 for seeking interim directions either under Section 9 before the Court vested with jurisdiction or under Section 17 before the Arbitral Tribunal itself."
Sanjiv Prakash vs. Seema Kukreja and Ors.2
The Court observed that the 'question of novation of contract containing an arbitration clause cannot be considered by the Court in a petition filed under Section 11 of the Arbitration and Conciliation Act.'
The court said that a Section 11 court would refer the matter when contentions relating to non-arbitrability are plainly arguable, or when facts are contested. The court cannot at a preliminary stage, enter into a mini trial or elaborate review of the facts and law which would usurp the jurisdiction of the arbitral tribunal.
Lalit Kumar Jain vs. Insolvency and Bankruptcy Board Of India3
The Court upheld the provisions of the Insolvency and Bankruptcy Code, 2016 (IBC) concerning the liability of the personal guarantors to the corporate debtors. It also held that approval of a resolution plan does not ipso facto discharge a personal guarantor (of a corporate debtor) of her or his liabilities under the contract of guarantee. The release or discharge of a principal borrower from the debt owed by it to its creditor, by an involuntary process, i.e. by operation of law, or due to liquidation or insolvency proceeding, does not absolve the surety/guarantor of his or her liability, which arises out of an independent contract.
The Ministry of Corporate Affairs through the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019 extended application of IBC process to the personal guarantors. Various personal guarantors were proceeded against under the new laws. These personal guarantors approached the Supreme Court to challenge the rules and application of IBC to personal guarantors.
M/S Utkal Suppliers v. Maa Kanak Durga Enterprises4
A Court cannot second-guess an Authority's interpretation of its own tender unless it is arbitrary, perverse or mala fide.
The Court noted that the authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If the two interpretations of tender are possible then the interpretation of the author must prevail over the other.
Ghanashyam Mishra And Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd.5
The Hon'ble Court observed that the 2019 amendment to Section 31 of the Insolvency and Bankruptcy Code has retrospective operation.
The Court observed that the amendment is clarificatory and declaratory in nature and therefore will be effective from the date on which I&B Code has come into effect.
PASL Wind Solutions Private Limited v. GE Power Conversion India Pvt. Ltd.6
The Supreme Court held that parties to a contract who are Indian nationals or Companies incorporated in India can choose a forum for arbitration outside India.
"Nothing stands in the way of party autonomy in designating a seat of arbitration outside India even when both parties happen to be Indian nationals."
The Court observed that the freedom of contract needs to be balanced with clear and undeniable harm to the public, even if the facts of a particular case do not fall within the crystallised principles enumerated in well-established 'heads' of public policy. The question that then arises is whether there is anything in the public policy of India, as so understood, which interdicts the party autonomy of two Indian persons referring their disputes to arbitration at a neutral forum outside India.
Uttar Pradesh Power Transmission Corporation Ltd. and Anr. vs. CG Power and Industrial Solutions Limited and Anr7
'Existence of an arbitration clause does not debar the court from entertaining a writ petition.'
The Supreme Court has stated that the existence of an arbitration clause does not debar the court from entertaining a writ petition in a contractual matter.
The Hon'ble Court has held that the availability of an alternative remedy does not prohibit the Court from entertaining a writ petition in an appropriate case. The High Court may entertain a writ petition, notwithstanding the availability of an alternative remedy, particularly (1) where the writ petition seeks enforcement of a fundamental right; (ii) where there is failure of principles of natural justice or (iii) where the impugned orders or proceedings are wholly without jurisdiction or (iv) the vires of an Act is under challenge.
General Circular No.06/ 2021- Relaxation on levy of additional fees in filing of certain forms under the Companies Act, 2013 and LLP Act, 20088.
Considering the Covid- 19 pandemic, the Ministry of Corporate Affairs decided to relax levy of additional fees for late filing. No additional fees for delayed filing of forms (other than CHG-1 form, CHG- 4 form and CHG- 9 form) which were due during 1st April to 31st May 2021 will be charged. For such delayed filing of such forms upto 31st July 2021, only normal fees would be applicable.
General Circular No.07/ 2021- Relaxation of time for filing forms related to creation or modification of charges under Companies Act, 2013.9
Continuing with the pandemic relaxations, the Ministry of Corporate Affairs decided to relax the time as well as additional fees for filing of forms related to creation or modification of charge. The relaxations are applicable to CHG-1 form and CHG-9 form, where creation/ modification of charge took place before 01.04.2021 but the timeline for filing was not over before 01.04.2021 or took place between 01.04.2021 to 31.05.2021. The period of 01.04.2021 to 31.05.2021 would not be counted for calculation of timeline. The first day for counting of timeline would be 01.06.2021 for the purpose of require of timeline as well as late fees. This circular does not apply to CHG-4 forms.
General Circular No.08/ 2021- Gap between two board meetings under section 173 of the Companies Act, 2013 (CA- 13)- Clarification- reg.10
The Ministry of Corporate affairs, considering the resurgence of Covid-19 and requests from stakeholders, extended the requirement of meetings within 120 days under section 173 of Companies Act, 2013 to 180 days for the first two quarters of 2021. Accordingly, the gap between two meetings could extend to 180 days during quarter April- June 2021 and quarter July- September 2021.
General Circular No.09/ 2021 - Clarification on spending of CSR funds for 'creating health infrastructure for COVID care', 'establishment of medical oxygen generation and storage plants' etc.-reg.11
In this notification, the Ministry of Corporate Affairs clarified that spending of CSR funds for 'creating health infrastructure for COVID care', 'establishment of medical oxygen generation and storage plants', 'manufacturing and supply of Oxygen concentrators, ventilators, cylinders and other medical equipment for countering COVID-19' or similar such activities are eligible CSR activities. The circular also reiterated that contribution to specified research and development projects as well as contribution to public funded universities and certain organizations engaged in conducting research in science, technology, engineering, and medicine are eligible CSR activities.
Circular - Clarification on offsetting the excess CSR spent for FY 2019-20.12
The circular provides that excess CSR amount spend on "PM CARES fund" in the FY 2019-20 could be offset against CSR amount to be spent in FY 2020-21 subject to the following three conditions. Firstly, this is subject to unspent CSR amount in previous years. Secondly certification by Chief Financial Officer that the amount sought to be offset was spent on "PM CARES fund". Thirdly, disclosure of such amount in annual CSR report as well as the Board's Report for FY 2020-21.
Priority Sector Lending (PSL) - On-lending by Small Finance Banks (SFBs) to NBFC-MFIs.13
Through this notification, Reserve Bank of India recategorises loans given by Small Finance Banks (SFBs) to NBFC-MFIs and other MFIs (Societies, Trusts etc.) which are members of RBI recognised 'Self-Regulatory Organisation' of the sector and which have a 'gross loan portfolio' of upto ?500 crore as on 31 March 2021, for the purpose of on-lending to individuals as Priority Sector Lending (PSL). Prior to such notification, such lending was not PSL.
Resolution Framework - 2.0: Resolution of Covid-19 related stress of Individuals and Small Businesses.14
Following up on the Resolution Framework - 1.0, the Resolution Framework - 2.0 provides some modifications in the original to account for the resurgence in Covid-19. As such, lending institutions are permitted, as a one-time measure, to review the working capital sanctioned limits and / or drawing power based on a reassessment of the working capital cycle, reduction of margins, etc. without the same being treated as restructuring. The decision with regard to above shall be taken by lending institutions by September 30, 2021, with the margins and working capital limits being restored to the levels as per the resolution plan implemented under Resolution Framework - 1.0, by March 31, 2022. However, such measure depends on whether the lending institution satisfied that the same is required on the basis of economic fallout from Covid-19.
Resolution Framework 2.0 - Resolution of Covid-19 related stress of Micro, Small and Medium Enterprises (MSMEs).15
This notification allows for restructuring of loans given to Micro, Small and Medium Enterprises (MSMEs) without a downgrading the asset class. A loan which was standard asset can be retained as such and a loan slipped to NPA category may be upgraded to standard asset. These measures are subject to various conditions. These include firstly, the borrower must be MSME. Secondly, borrower must be a GST entity or exempt from GST registration. Thirdly, the exposure of the lender to the borrower is not more than Rs. 25 crore. Fourthly, the borrower's account was standard account on 31st March 2021 and other conditions. The notification also allows for one-time measure by lending institutions, to review the working capital sanctioned limits and / or drawing power based on a reassessment of the working capital cycle, reduction of margins, etc. without the same being treated as restructuring. The above measures shall be contingent on the lending institutions satisfying themselves that the same is necessitated on account of the economic fallout from Covid-19.
1. Supreme Court, April 1st, 2021
2. Supreme Court, April 6th, 2021
3. Supreme Court, May 21st, 2021
4. Supreme Court April 9th, 2021
5. Supreme Court, April 13th, 2021
6. Supreme Court, April 20th, 2021
7. Supreme Court, May 12th, 2021
8. Ministry of Corporate Affairs, May 3rd 2021, effective immediately.
9. Ministry of Corporate Affairs, May 3rd 2021, effective immediately.
10. Ministry of Corporate Affairs, May 3rd 2021, effective immediately
11. Ministry of Corporate Affairs, May 5th 2021, effective immediately
12. Ministry of Corporate Affairs, May 20th 2021, effective immediately
13. Notification No. RBI/2021-22/27, Reserve Bank of India, effective from 5th May 2021, available at https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12081&Mode=0
14. Notification No. RBI/2021-22/31, Reserve Bank of India, effective from 5th May 2021, available at https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12085&Mode=0
15. Notification No. RBI/2021-22/32, Reserve Bank of India, effective from 5th May 2021, available at
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