COMMUNIQUE MAY, 2021

COURTS THIS MONTH 

  • An Apex Court Bench comprising of Justice U. U Lalit and Justice Indira Banerjee in the case of Uttar Pradesh Power Transmission Corporation Ltd. v. CG Power And Industrial Solutions Limited (SLP(C) 8630 OF 2020), held that the existence of an arbitration clause does not bar the courts from entertaining writ petitions that may arise from the terms of a contract. The Bench observed that relief under Article 226 of the Indian Constitution can be granted irrespective of the existence of an arbitration clause. The Apex Court further observed that that 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; (2) where there is a failure of principles of natural justice (3) where the impugned orders or proceedings are without jurisdiction or (4) the vires of the statute is under challenge.”.
     
  • A Five Judge Constitutional Bench of the Supreme Court comprising of Justices Ashok Bhushan, L. Nageswara Rao, S. Abdul Nazeer, Hemant Gupta and S. Ravindra Bhat struck down the quota limit in reservation for the Maratha community in excess of the 50% ceiling limit already guaranteed for the socially and economically backward classes under the Indian Constitution. The judgement was passed in the case of Dr Jaishree Laxmanrao Patil v. Chief Minister (CA 3123 of 2020). A batch of petitions were filed before the Court challenging the Maharashtra SEBC Act, 2018 which guaranteed the Maratha community an additional 16% reservation with respect to jobs and education. The said Act brought the total reservation offered to the aforesaid classes beyond the ceiling limit of 50%, as guaranteed by the Constitution. The Court further observed that it is not imperative for them to revisit the decision of Indra Sawhney v. UOI 1992 Suppl. (3) SCC 217 and the law laid down therein with respect to the upper limit for reservation and the extension of the same in an exceptional circumstance.
     
  • A Supreme Court Bench comprising of Justices L. Nageswara Rao and Justice S. Ravindra Bhat, dismissed a constitutional challenge against the notification dated 15.11.2019 passed by the Central Government and the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process of Personal Guarantors to Corporate Debtors) Rules, 2019. The said petition sought to have certain Sections of the Code to be declared unconstitutional as far as their applicability to personal guarantors and corporate debtors are concerned. The Apex Court decided that the Central Government had the authority under the Code to prescribe rules specifically for personal guarantors. The Court also held that the applicability of the Code and the Rules therein would not amount to selective application of law to personal guarantors. The Court further clarified that the acceptance of a Resolution Plan, although discharges the Corporate Debtor from its liability, the same will not automatically discharge the personal guarantor from his/her liability. The judgement was delivered in Lalit Kumar Jain vs. Insolvency and Bankruptcy Board of India (W.P. (C) No. 117/2021).
     
  • The Supreme Court in the case of Indian School, Jodhpur vs State of Rajasthan Civil (Appeal No. 1724 of 2021) upheld the constitutional validity of Rajasthan Schools (Regulation of Fee) Act, 2016. The said Act prescribed for the Regulatory Committee to have authority to inspect the books of accounts of private unaided educational institution and determine whether their existing fee structure involves any aspect of profiteering. The Supreme Court in this case observed that the said Act is not violative of Article 19(1) (g) of the Constitution as it merely permits a reasonable inquiry into the accounts of the said schools in order to ensure no commercialization of education is being carried out.
     
  • A Bench comprising of Justices D. Y. Chandrachud and M. R. Shah of the Supreme Court, in the case of Election Commission of India v MR Vijaya Bhaskar (Civil Appeal No. 1767 of 2021), held that reporting of judicial proceedings which include oral observations made and discussions had by and between the judges and lawyers during the proceedings, will be covered and protected under Article 19(1)(a) of the Constitution, which enshrines the freedom of speech and expression. The Bench further elaborated upon the essentials of reporting of the said judicial proceedings, stating that it is a part of freedom of the press and it further encouraged access to education. The Bench also added that the same has a direct bearing on the right to information and accountability of the judiciary which should be safeguarded at all costs. The Court however drew an exception with respect to matters involving in-camera proceedings such as sexual abuse cases or matrimonial disputes etc.
     
  • The Supreme Court in the case of Gautam Navlakha vs. National Investigation Agency (Civil Appeal No. 510 of 2021) held that Court can order house arrests under Section 167 of the Code of Criminal Procedure, 1973. Such an order, however, must be reliant upon various criteria such as the nature of offence, age and health condition of the accused, etc. The Court also took into consideration various statistics which pointed towards the overcrowding of state prisons and the cost incurred through the government exchequer in the maintenance of the same. The Bench also noted that the concept of house arrest in India is ingrained in law in the form of preventive detention. The Supreme Court recently struck down the West Bengal Housing Industry Regulation Act, 2017 (“WBHIRA”), holding it to be unconstitutional in view of the Real Estate (Regulation and Development) Act, 2017 (“RERA”) which is the central legislation on identical subject-matter. The Court observed that WBHIRA would be repugnant under Article 254 of the Constitution as it created a parallel regime to that of RERA. The Court further explained that the repugnancy of the State Act does not arise because of any conflict between the State and Central law, but because the state law is a mirroring legislation of an already existing central law. “However, in the instant case, the state legislature encroaches upon the authority of the Parliament which has supremacy in so far as the concurrent list is concerned”, ruled the Bench in the said judgement passed in Forum for People’s Collective Efforts (FPCE) vs. State of West Bengal (W.P. (C) No. 116 of 2019).
     
  • On 28.05.2021, the Supreme Court in Satbir Singh Vs. State Of Haryana (CRA 1735 1736 of 2010) held that examination of accused under Section 313 of Criminal Procedure Code, 1973 is not merely a procedural formality, as it is based on the fundamental principle of fairness. The Court further directed the Trial Courts to exercise utmost caution while recording the statements of the accused under the said provision of law. It was further observed that the Trial Courts have an obligation to question the accused fairly and not casually.
     
  • The Supreme Court’s Bench comprising of Chief Justice of India N. V. Ramana, Justice Surya Kant and Justice Aniruddha Bose observed that a High Court, held that High Courts while dismissing anticipatory bail applications, can issue protective orders, subject to certain exceptional circumstances. The Apex Court observed that the provision of Section 438 Cr.P.C should be read liberally in light of Article 21 of the Indian Constitution. The judgement was delivered in Nathu Singh vs. State of Uttar Pradesh (CRA 522 of 2021). In the said case, after rejecting the application seeking anticipatory bail, the High Court directed the accused to surrender before the Trial Court and file a regular bail application within 90 days, while protecting them from any coercive action during that period.
     
  • Facebook’s subsidiary Whatsapp has moved the Delhi High Court challenging the new Information Technology (Guidelines for Intermediaries and Digital Media Ethics Code) Rules, 2021. The Central Government had offered a 3-month window for the intermediaries to comply with the same which ended on 25.05.2021. Whatsapp’s plea relies significantly on the landmark judgement of KS Puttuswamy Vs UOI (2017 (10) SCALE 1) stating that the said rules pose a serious threat to privacy to its users. Whatsapp has contended that the aforesaid requirement will “force it to build the ability to identify the first originator for every message sent in India on its platform upon request by the government forever”. The Ministry of Electronics and Information Technology on 26.05.2021 through a Press Release has however clarified that the Central government respects the privacy of its citizens and the messages will only be sought for prevention, investigations and punishment of very serious offences threatening the sovereignty and integrity of India, security of the State, friendly relations with foreign States, public order, incitement of offences related to the aforesaid or in relation to rape, sexually explicit material or child abuse material.
     
  • A Division Bench of the Telangana High Court, in the case of Garimella Venkata Krishna Rao v. State of Telangana & Ors (W.P. (PIL). No. 46 of 2021), stayed the guidelines dated 11.05.2021 issued by the State Government prohibiting inter-state travel of ambulances and patients amidst the COVID-19 crisis. The guidelines provided that people seeking hospitalisation from other states will have to apply to control rooms set up by the State Government which will be subject to subsequent authorisation. The Division Bench observed that any state action resulting in a delay of access to medical assistance to a person in dire need will be violative of the fundamental right to life & liberty safeguarded under Article 21 of the Indian Constitution. The Bench also observed that such guidelines are restricting the right of the citizens to move freely throughout the territory of India which is violative of their fundamental right safeguarded under Article 19(1)(d) of the Indian Constitution.
     
  • The Delhi High Court in the case of Gurucharan Singh v. Ministry of Finance (W.P. (C) 5149/2021) held the imposition of Integrated Goods and Services Tax (“IGST”) on oxygen concentrators, imported by individuals or received as gifts from their relatives staying abroad, for personal use, to be unconstitutional. In respect of the same, the High Court quashed the notification dated 01.05.2021 issued by the Ministry of Finance, which provided for such imposition of IGST at the rate of 12% on the said import of oxygen concentrators. The decision was taken in light of the fact that oxygen concentrators, in present times, are placed at par with lifesaving drugs and medicines.
     
  • In the case of Shifa Ur Rehman v. NCT of Delhi, (W.P. (Crl) 1347/2020 & Crl M.A. 11897/2020) a Single Judge Bench of the Delhi High Court held that the right of a detained person to consult a legal counsel of their choice cannot be taken away by the State. The High Court set aside the decision of the Sessions Court wherein the said Court allowed the application for extension of period of investigation and detention, without giving the detainee an opportunity to access or consult their lawyer. The High Court observed “The right of a person in detention to consult a legal practitioner of his choice is a right guaranteed by the Constitution of India and it is not open for the State to dilute this on the ground that no purpose would have been served even if such consultation is permitted.”
     
  • The Kerala High Court’s Bench comprising of Justice A Muhamed Mustaque and Dr. Kauser Edappagath, whilst deciding a matrimonial appeal, held that conduct of a parent resulting in denial of a child’s love and affection to the other parent amounts to mental cruelty. The High Court observed that both the parents have the right to receive the love and affection of their child. The High Court while laying down principles to further shed light on mental cruelty, stated that the same is not necessarily always constituted by an act that is grave or severe in order to make cohabitation impossible or causes danger to life, limb or health, but it could be just something more serious than “ordinary wear and tear of the married life”.
     
  • A Single Judge Bench of Justice Sudhir Mittal of the Punjab & Haryana High Court, whilst granting protection sought by a live-in couple, held that an individual has the right to formalize the relationship with their partner through marriage or by adopting the non-formal approach of a livein relationship. The High Court in the case of Pradeep Singh Anr v State of Haryana, (CRWP-4521- 2021 (O&M)) observed that social acceptance of live-in relationship is on the rise and the same does not amount to commission of any offence and, thus, the couple is entitled to equal protection of law vis-a-vis any other citizen of the country. The decision came days after another judgement of the same High Court which refused to grant protection to another live-in couple on the grounds that the same, if granted, will be disruptive towards the entire social fabric of society.

 
NOTIFICATIONS/AMENDMENTS INSIGHTS 

  • The Reserve Bank of India (“RBI”) vide a Notification dated 21.05.2021 relaxed and subsequently extended timelines for compliance with certain payment system requirements. As per the notification, all existing issuers of non-bank Prepaid Payment Instruments (“PPIs”) have to comply with the minimum positive net-worth requirement of Rs.15 Crores by 30.09.2021. Additionally, the timeline to harmonise the turnaround time and customer compensation for failed transactions on all working days has also been extended to 30.09.2021. The authorised Payment System Operators are required to furnish System Audit Report on an annual basis, within two months of the closing of their respective financial year which now stands at 30.09.2021.
     
  • The Ministry of Corporate Affairs (“MCA”) vide a Circular dated 20.05.2021 provided clarification for offsetting the excess Corporate Social Responsibility (“CSR”) spent for FY 2019-20. MCA clarified that any amount donated by a Company to ‘PM CARES Fund’ on 31.03.2020, that is over and above the minimum amount of CSR prescribed under Section 135(5) of the Companies Act, 2013 for FY 2019-20, and such excess amount or part thereof is offset against the requirement to spend the CSR for FY 2020-21, then the same shall not be viewed as a violation by the Company. However, the same is subject to certain conditions such as (i) the amount offset shall have factored the unspent CSR amount for previous financial years; (ii) the Chief Financial Officer and the statutory auditor shall certify that the contribution to PM CARES Fund was made on 31.03.2020; and (iii) the details of such contribution shall be disclosed separately in the Annual Report on CSR and the Board’s Report for FY 2020-21.
     
  • SEBI vide a Circular bearing No. SEBI/HO/CFD/CMD-2/P/CIR/2021/ 562, dated 10.05.2021, has now introduced new reporting requirements for listed companies on Environment, Social and Governance (“ESG”) parameters called the Business Responsibility and Sustainability Report (“BRSR”). The BRSR requires listed companies to make certain quantitative ESG disclosures that would enable the investors to make better investment decisions. The said Report would also encourage investors to look beyond financial records and focus more on the social and environmental impacts of the said Company at large.
     
  • SEBI vide Notification bearing No. SEBI/LAD-NRO/GN/2021/18 dated 05.05.2021 has issued the SEBI (Issue of Capital and Disclosure Requirements) (Second Amendment) Regulations, 2021 to further amend the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. The amendment allows for the exit of issuers whose securities are listed and traded on the Innovators Growth Platform, pursuant to an Initial Public Offer. The Notification further also explains the requirements for listing of securities on the Innovators Growth Platform.
  • RBI vide a notification dated 11.05.2021 has reviewed the rate of interest payable by Banks to the depositors/claimants on the unclaimed interest-bearing deposit amount transferred to the Depositor Education and Awareness Fund. The reviewed interest rate on the said amount now stands at 3% simple interest, per annum. The said interest rate will come into effect from the date of the said notification, i.e. 11.05.2021.

 
DEALS THIS MONTH 

  • A Tata Sons’ subsidiary, Tata Digital acquired a majority stake in Supermarket Grocery Supplies, the parent operator of Bigbasket, a daily need grocery portal. The deal will allow Tata Digital to be in control of Bigbasket’s retail and B2B business. The acquisition will further enhance the Tata group’s ecommerce hold across retail, grocery, e-pharmacy and other sectors.
     
  • UpGrad Education Pvt. Ltd. has acquired Impartus Innovations Pvt. Ltd, a video-enabled learning solutions provider. The transaction was valued at Rs 150 Crores. Subsequent to the deal, Impartus will now be rebranded as UpGrad Campus. This venture will enable the acquirer to focus particularly on the higher education sector and college going students.
     
  • Dell Computers recently sold its integration specialist Boomi, to a private equity firm Francisco Partners and TPG. The transaction was valued at $4 Billion. Boomi is a business unit that was acquired by Dell in the year 2010. One of the most valuable assets of Dell, Boomi, specialized in integration platform, API management, master data management and data preparation.
     
  • Gland Pharma Ltd., a company having majority stake controlled by China’s Shanghai Fosun Pharmaceutical Group, has acquired the assets of Hyderabad based biopharma company Vitane Biologics. The acquisition is expected to boost the production of Russian Covid-19 vaccine Sputnik V in India. Vitane Biologics is part of the Vitane group, which is into providing solutions for development, technology transfer and manufacture of biopharmaceuticals. The Drug Controller General of India approved the use of the Sputnik V vaccine in April 2021.
     
  • Adani Green Energy Ltd (“AGEL”) has struck a deal to fully acquire SB Energy India at an agreed value of $3.5 billion. SB Energy is a joint venture of SoftBank Group and Bharti Enterprises, incorporated in the year 2015. The acquisition is a step further towards AGEL’s future plans to become the world’s largest solar player by the year 2025 and thereafter the world’s largest renewable company by the year 2030.
     
  • Mindtree Limited, an Indian multinational Information, Technology and outsourcing company is to acquire the NxT Digital business from the L&T Group for INR 198 crores. The said acquisition will help in meeting the growing digital transformation demands of customers. The combined forces shall help in delivering tangible operational efficiencies and a differentiated customer experience to the end users.
     
  • AT&T Inc in a deal valued at $43 billion will be merging its media giant WarnerMedia with Discovery Inc, a TV company. Pursuant to the said deal the premium entertainment, sports and news assets of WarnerMedia will be combined with the non-fiction, international entertainment and sports businesses of Discovery Inc. The said deal aims to create a premier, standalone global entertainment company which is yet to be named.

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