Ergo Update

A three-member bench of the National Company Law Appellate Tribunal (NCLAT), presided over by the Hon’ble Acting Chairperson, vide its judgment dated 22 May 2020 passed in the matter of State Bank of India  v M/s Metenere Limited [Company Appeal (AT) (Insolvency) No. 76 of 2020], declined to interfere with an order passed by the National Company Law Tribunal, Principal Bench (NCLT) refusing to appoint an ex-employee of the Financial Creditor as the Interim Resolution Professional.

The case finds genesis in the Competition Commission of India’s (CCI) order of investigation against Mahyco Monsanto Biotech (India) Private Limited’s (Mahyco Monsanto) conduct in relation to the sub-licensing of a patented gene. The patent, Bt Cotton Technology, is a technology that consists of two genes to make cotton seeds resistant to bollworms. The technology was patented by Monsanto Company under the Patents Act, 1970 (Patents Act) and licensed to Mahyco Monsanto. Mahyco Monsanto, in turn, sub-licensed the technology to various seed manufacturers in India.

The Supreme Court of India (SC) in its recent case of PILCOM (Civil Appeal No. 5749 of 2012 with Special Leave Petition (Civil) No. 6829 and 7315 of 2019) ruled that the obligation of the payor to withhold tax at a specified rate of 10% under section 194E of Indian Income tax Act, 1961 (IT Act) on payments made to non-residents, is not affected by the tax treaty applicable to such non-resident recipient.

A single-judge bench of the Hon’ble High Court of Delhi, comprising Hon’ble Mr Justice Navin Chawla, vide judgment dated 20 May 2020 in the matters of Tripta Kaushik v Sub Registrar VI-A, Delhi & Anr and Ramesh Sharma v Government of N.C.T. of Delhi & Ors., dealt with the distinction between a relinquishment deed and a gift deed.

On 18 May 2020, the Controller General of Patents, Designs and Trade Marks (Respondent) issued another Public Notice (New Notice) whereby the deadlines for various acts, proceedings, filing of any reply/document, payment of fees, etc relating to any intellectual property matter (IP Filings) falling due between 15 March 2020 to 17 May 2020 was fixed as 1 June 2020 and no extension was permitted for the deadlines falling beyond 17 May 2020.

The Delhi High Court (Court) passed an order dated 11 May 2020, in the matter of M/s SMS Ltd v Konkan Railway Corporation Ltd (O.M.P. (COMM) 279/2017), wherein it set aside an arbitral award (Award) pertaining to a dispute regarding the construction of a railway line in Jammu and Kashmir (Railway Project). The Award granted M/s SMS Limited (Claimant) compensation amounting to approximately INR 1.73 Crores, as against its aggregate claim of approximately 89 crores.

The Delhi High Court (Court), in its judgment dated 12 May 2020 in Spentex Industries Ltd v Quinn Emanuel Urquhart Sullivan LLP, has inter alia held that the legal relationship between a law firm and client is commercial in nature and accordingly covered by Sections 44 and 45 of the Arbitration and Conciliation Act, 1996 (Arbitration Act).

In our previous ERGO update published on 6 May 2020, we endeavored to guide businesses through the standard operating procedure (SoP) that they should incorporate as part of their resumption plan in COVID-19 times. Since the update, several important developments have taken place, both at the Central and the state levels. The Central Government rolled out revised guidelines for Lockdown 4.0 phase with various relaxations aimed at opening up business activities in a calibrated manner.

The Delhi High Court has vide its order dated 21 May 2020 in the case of Ramanand and ors v. Dr Girish Soni and anr (Rent Control Revision Petition No. 447/2017) analysed whether the present Covid-19 pandemic and resultant lockdown would entitle tenants to claim waiver from payment of rent or suspension of rent and has clarified the legal position in this regard.

The Supreme Court of India (SC) in Union of India & Anr v UAE Exchange Centre [Civil Appeal No. 9775 of 2011], held that the liaison office (LO) set up by UAE Exchange Centre LLC (Taxpayer) in India does not constitute its permanent establishment (PE) in India.