Ergo Update

With the intent to reduce the direct tax litigation pending before various courts / appellate forums [i.e. the Supreme Court or High Courts or Income Tax Appellate Tribunal or Commissioner of Income Tax (Appeals)], the Government of India introduced ‘The Direct Tax Vivad Se Vishwas Bill, 2020’ (Scheme) before the Lok Sabha on 5 February 2020 (please see our Ergo). Thereafter, various representations were made by the stakeholders expressing their concerns and suggested modifications to the Scheme.

The Constitution Bench of the Supreme Court in New India Assurance Company Limited v Hilli Multipurpose Cold Storage Private Limited (Civil Appeal No 10941-10942 of 2013) has conclusively settled conflicting decisions under the Consumer Protection Act 1986 (Act) pertaining to the limitation period for filing a reply to a complaint under the Act. The Supreme Court has held that the time prescribed for filing a reply to the complaint under Section 13(2)(a) of the Act is mandatory and not merely directory.

In a landmark judgement, the Supreme Court of India (SC) has quashed the circular issued by the Reserve Bank of India (RBI) on 6 April 2018 (Circular) that prohibited banks and financial institutions from dealing in, and providing services for facilitating dealing in, virtual currencies (Cryptocurrencies) such as Bitcoin. A three-judge bench of the SC held the Circular to be a disproportionate regulatory action, in a decision that suggests that Cryptocurrencies should be subject to considered regulation, and not blanket prohibition, under Indian law.

M/s Indo Rubber and Plastic Works (Indo Rubber) entered into a non-exclusive distribution agreement with Sunlight Sports, Singapore (Sunlight Sports) for import and sale of branded sports goods in India by the name ‘Li Ning’. In terms of the Agreement, Indo Rubber had to bear all costs of marketing, advertising and promotion of the Li Ning products within India.

The President of India had promulgated the Banning of Unregulated Deposit Schemes Ordinance on 21 February 2019 (Ref: No. 7 of 2019) (Ordinance) which was replaced by the Banning of Unregulated Deposit Schemes Act 2019 on 31 July 2019 (Ref: Act No. 21 of 2019) (Act). In our Ergo dated 7 March 2019 (which can be accessed here) we had provided an overview of the Ordinance and its key highlights.

A recent un-reported judgment of the Bombay High Court (Fedbank Financial Service Ltd through its AO Zahid Sultan v Narendra H Shelar through his LRs & Ors, Arbitration Application No. 34 of 2020, Order dated 24 February 2020) holds that the express termination of the mandate and denial of an extension, of a previously constituted arbitral tribunal, afford grounds to deny the appointment of a new arbitrator.

In yet another landmark decision in relation to the corporate insolvency resolution process (CIRP) of Jaypee Infratech Limited (JIL), the Supreme Court in Anuj Jain, Interim Resolution Professional for Jaypee Infratech Limited vs. Axis Bank Limited Etc. Etc. (Civil Appeal Nos. 8512-8527 of 2019)dated 26.02.2020, has laid down the law on two aspects:

Auditor’s reports are issued by the statutory auditor of the company as an end result of the audit to inter alia consolidate and summarise at the outset the key points emerging therefrom as well as to provide assurance and inspire confidence in the validity of the financial statements as it indicates compliance with applicable accounting standards. The format of auditor’s report is governed by Company (Auditor’s Report) Order. The Company (Auditor’s Report) Order, 2016 (CARO 2016) was notified on 29 March 2016.

Recently, the Supreme Court in the case of Deep Industries Limited v Oil and Natural Gas Corporation Limited and Anr (Civil Appeal 9106 of 2019 decided on 28 November 2019) has clarified the issue of maintainability of writ petitions against orders passed by the relevant jurisdictional court under Section 37 of the Arbitration and Conciliation Act 1996 (Act).

About 80% to 90% of India’s requirement of medical devices is met through imports. As the present government pushes for its “make in India” agenda, the medical device industry can play a significant role. A specific law regulating all the medical devices was needed inter alia to ensure minimum standard quality of the medical devices imported, manufactured and sold in India.