Supreme Court To Examine If NCLAT Can Refer Matter To Third Member When Two-Member Bench Delivers Split Verdict

The Supreme Court is set to decide whether, in the case of a split verdict by the National Company Law Appellate Tribunal (“NCLAT”), the reference of the case to a third member would be legally justifiable or should the matter be referred to a larger bench of three members for fresh adjudication. Observing that there is no clear procedure to address situations where a two-member bench of the NCLAT delivers a split verdict, a bench of Justices J.B. Pardiwala and K.V. Viswanathan sought the...

Change In Form Or Rephrasing Of Relief Cannot Defeat Principle Of Constructive Res Judicata: Kerala High Court

The Kerala High Court has recently clarified that changing the form or rephrasing of a relief prayed for cannot defeat the principles of res judicata and constructive res judicata.Justice Mohammed Nias C.P. was considering a writ petition filed by a registered MSME (Micro, Small and Media Enterprise) that had sought protection under the Central Government notification, which mandates banks and financial institutions to refer stressed MSME accounts for corrective measures.According to the...

Change In Form Or Rephrasing Of Relief Cannot Defeat Principle Of Constructive Res Judicata: Kerala High Court

The Kerala High Court has recently clarified that changing the form or rephrasing of a relief prayed for cannot defeat the principles of res judicata and constructive res judicata.Justice Mohammed Nias C.P. was considering a writ petition filed by a registered MSME (Micro, Small and Media Enterprise) that had sought protection under the Central Government notification, which mandates banks and financial institutions to refer stressed MSME accounts for corrective measures.According to the...

Kerala High Court Dismisses Plea Against CIAL's Decision To Conduct Online AGM, Says Centre Can Exempt Physical Meeting U/S 96 Companies Act

The Kerala High Court recently dismissed a plea challenging the decision of the Cochin International Airport Ltd. (CIAL) to conduct its Annual General Body Meeting (AGM) through online modes.Rejecting the petitioner's contention that the AGM has to be held either at the registered office of the Company or some other place within the city, town or village, Justice N. Nagaresh dismissed the writ petition. According to the petitioner, who was a shareholder of CIAL, such a virtual conduct of AGM was...

SFIO Probe Against Company Citing Public Interest 'Extremely Serious Action', Due Application Of Mind Must: Delhi High Court

The Delhi High Court has observed that Serious Fraud Investigation Office (SFIO) investigation against a company citing public interest is an extremely serious statutory action and an order to that effect must reflect due application of mind. “An order under Section 212(1)(c) of the Act, 2013 directing investigation by the SFIO is not a routine administrative measure. It is in the nature of an extremely serious statutory action having grave consequences and repercussions for the subject entities...

Defaulting Director Can Be Disqualified From All Companies, S.164 Is Reasonable Restriction To Article 19(1)(g): Karnataka High Court

The Karnataka High Court has held that under Section 164 of the Companies Act 2013, an individual can be disqualified from being a Director in a company against which allegations are made, as well as regarding any other company in which the individual is a director against whom no allegations are made.The petitioner directors had argued that they had been disqualified from the company–M/s Vihaan, as regards which allegations have been made, but also as regards any other company, and that they...

Of Profits And People: A Legal Odyssey Between Shareholder Supremacy And Stakeholderism

Professor Joe Badaracco in the documentary titled 'The Corporation' puts forward the idea that a Corporation is composed of a group of individuals who work for a bouquet of goals, the leading one of which is to earn huge sustainable and lawful return for the proprietors. The Civil War coupled with the Industrial Revolution changed the magnitude at which these corporations operated. The Corporations grew more power hungry, and they wanted to free themselves from the constraints which were imposed...

Selective Allotment And New Rights Issue Framework: A Double-Edged Reform

The Securities and Exchange Board of India (SEBI), on 4th March, 2025, introduced the SEBI (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2025, which also added a new framework for rights issue. In due course, on March 11, 2025, SEBI issued a circular setting out the timelines for completing various activities involved in rights issues and permitting selective allotment to specific Investors.This article compares the changes made in the rights issue process with the...

Court Must See If Company Is A Threat To Commercial World For Winding Up U/S 433(f) Of Companies Act: Allahabad High Court

The Allahabad High Court has held that for winding up of a company under Section 433(f) of the the Companies Act, the Court must opine that the company is a threat to the commercial world if it remains in existence.Rejecting the application for winding up of a company, Justice Pankaj Bhatia held “To appreciate a case for winding up of a company on the ground that it is just and equitable, it is essential for the Court to form a view that in view of the status of the company, if the company is...

Schrödinger's Cat of Jurisdiction

Is it possible to exist in two states at once, alive and dead, until observed? The thought experiment - 'Schrodinger's cat' offers us the answer to it. On similar lines, jurisdictional boundaries in corporate law often exist in a state of quantum ambiguity, much like Schrödinger's cat—neither fully alive (adjudicatory) nor entirely dead (non-adjudicatory) until the box is opened, that is to say, until a prima facie analysis is run. The Tribunals (National Company Law Tribunal and National...

SAT's Achilles' Heel: The Urgent Case For Contempt Powers

Born from a need for expediting resolutions, tribunals have evolved into an indispensable part of the Judiciary since they represent the hope to satisfy public demand for quick and effective justice. Still, a Tribunal needs respect and adherence to its decisions if it is to be an authoritative judicial body. While tribunals such as the National Company Law Tribunal (“NCLT”) and National Company Law Appellate Tribunal (“NCLAT) wield codified contempt powers to enforce their orders, the...

Pre-Pack Insolvency Resolution: A Solution for MSME Distress? - Examining India's Pre-Pack Schemes And Their Role In Resolving MSME Insolvency

63 million MSMEs employ nearly 115 million individuals, contributing to over 30% of India's GDP. MSMEs in India are also renowned for producing over 6,000 products, a good part of which earns precious forex. When the pandemic struck, there was a need to safeguard these MSMEs from adverse financial conditions. Enter pre-pack insolvency resolution process (PPIRP). The legal-process balanced the interests of stakeholders by ensuring that the company continued its operations and the overall business...