On the heels of the Punjab & Haryana High Court and the Bombay High Court verdicts, the Rajasthan High Court has vide its judgment in the case of Chandresh Sankla v State of Rajasthan & Others pronounced on 14 February 2020, upheld the legality of online fantasy sports gaming in India. It ruled that that such games are preponderantly a game of skill and therefore outside the ambit of gambling / betting legislations.
The Securities and Exchange Board of India (SEBI) by its informal guidance in January 2020 has settled the question of extraterritorial compliance of corporate governance required under Regulation 24(1) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations). The informal guidance was sought by KCP Limited (Company), which has a material subsidiary, KCP Vietnam Industries Limited (KPC Vietnam), a limited liability company incorporated under the laws of Republic of Vietnam.
The Income Tax Appellate Tribunal (ITAT) recently held that income from cloud hosting services provided by a company based in the United States of America to its Indian customers was not ‘royalty’ or ‘Fees for Technical Services’ (FTS) under the India - USA Double Taxation Avoidance Agreement (Treaty). The same constituted business income which was not taxable in India in the absence of a Permanent Establishment (PE).
The Supreme Court has recently in its judgment dated 21 January 2020, in the case of Standard Chartered Bank v MSTC Limited [SLP (C) No 20093 of 2019], provided clarity on the interplay between the provisions of Recovery of Debts and Bankruptcy Act 1993 (RDB Act) and Limitation Act 1963 (Limitation Act). Supreme Court has in doing so refused to condone a delay of 28 days in filing of a review application by the government borrower entity against a decree in favour of the bank.
The Directorate General of Trade Remedies (DGTR) has, in January and February 2020 initiated the following investigations:
Section 7A of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (EPF Act) authorises Provident Fund Commissioners to initiate inquiries in order to determine amounts due from employers under the EPF Act. For the purpose of determining the shortfall in contributions, Section 7A vests Commissioners with the powers of a civil court.
The Ministry of Corporate Affairs has, on 3 February 2020, issued the long pending notification of sub-sections 11 and 12 of Section 230 of the Companies Act, 2013 (Companies Act). These sub-sections provide for the takeover of minority shareholders by majority shareholders in unlisted companies through a scheme of arrangement placed before the National Company Law Tribunal (NCLT) in the same manner as other schemes of arrangement under Section 230, subject to the specific changes below.
With a view to streamline the process and timeline involved in issuance of observations on draft offer documents (DOD) filed with the Securities and Exchange Board of India (SEBI), SEBI has issued the “Securities and Exchange Board of India (Issuing Observations on Draft Offer Documents Pending Regulatory Actions) Order 2020” dated 5 February 2020 (General Order), which has come into force with immediate effect.
Securities and Exchange Board of India (SEBI) has recently notified amendments to the SEBI (Issue of Capital and Disclosure Requirements) Regulations 2018 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 to make the rights issue process more efficient and effective, and to reduce the overall time taken to undertake a rights issue, from approximately 55 days to approximately 31 days (the Amendment). Our ERGO on the Amendment can be accessed here.
Digital transactions and fintech have been the buzz words during the past few years. The Indian government, the regulators and the industry have trained their focus on adopting fintech and digital transactions.
